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Asset Management Real Talk: Self-Manage or Hire the Pros? · The Academy Presents podcast

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You're already taking the first step. just by
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joining us here today. Hey guys thank you so
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much for joining us again and I am super excited
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because we are going to talk about asset management
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and asset management and management companies
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and all of that stuff which if you have not had
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the joy of doing those things get ready. Today
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we have Greg Scully and he is going to share
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with us some of what his experiences have been.
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So Greg, I'm gonna let you kind of intro yourself
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and tell us a little bit about your background.
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Thanks, Agile. Yes, Greg Scully, operating out
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of Middle and Eastern Tennessee, almost exclusively.
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We're apartment and RV park syndicators and joint
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venturers, occasional house flippers and property
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managers. So cut our teeth in the apartment space.
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still have a bunch of that stuff. I don't know
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how many units we have. We're managing 65 of
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them ourselves now for the past year or so. And
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more recently got into the RV space, evolved
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in a few parks there and are currently on point
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operating a 50 pad park out of town in Tennessee.
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So I guess that's part of our property management
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as well, but not necessarily under the umbrella
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of our company. Well, we come from residential.
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And in residential, if something goes wrong on
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a property, and we use property managers for
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the residential too. Don't get me wrong, we self
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-manage nothing. But still, I feel like things
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just move faster. And our experience in multifamily
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so far has just been, man, there's a lag. There
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is a serious lag and it feels so slow to me sometimes,
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but I understand that there's things that have
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to be met and boxes that have to be checked for
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the management companies and for the management
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of the property to go smoothly. But wow. Is it
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doesn't move the meter about the clock. So are
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you able to push it faster by being the property
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management company and the managers yourselves?
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At times, at times I feel like we've moved faster
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than we would have as third party managers, but
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also they have a lot of advantage. A reasonable
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to mid -size property management company has
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a lot of relationships, hopefully developed around
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materials and labor. that we have to build. So
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I think sometimes on the labor material side,
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they can procure a little bit quicker. We're
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a little more subject to, most of the stuff we're
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doing is off the shelf at Lowe's. We're not doing
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granite and things like that. We're largely D
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minus C class investors. So we're not building
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small little custom homes. So yeah, at times
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we've done better, but their larger networks
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often do pay up. Yeah, well that's, and this
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is kind of where I think in our own personal
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backyard, I think we're more tertiary just because
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the biggest metro to us is DFW. Well, Oklahoma
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City is probably about the same, but they're
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about two, two and a half hours away. And so
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it doesn't seem like it's that far, but a lot
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of people don't want to drive that. They don't
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want to drive. Yeah. People don't want to drive.
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I don't want to drive over. So I get it. I mean,
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in Texas, we're used to driving. You got to drive
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to get anywhere. It's still they don't want to.
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I guess it's kind of like a risk thing, too.
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They don't want to drive all the way here and
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then, oh, gosh, I'm missing something. And now
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it's, I call it risk because now they're going
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to have to go to somewhere local like Lowe's
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or maybe one of the commercial places we have
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here. And they're going to have to pay more than
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what they would have paid had it been a piece
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of the original order or had it come with them
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from their original location. And so there's
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that level of risk. And then just, it's more
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difficult to find people here in town because
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it's a smaller town. I mean, we're a hundred
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thousand people. The fuel costs, less of an issue
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now than it was a couple of months ago, but we
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started to see fuel surcharges on some of our
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vendors. And if you're a property management
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company, I know our pest control guy, we had
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a conversation about it, just how significant
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that rise in fuel costs for some of these vending
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companies. It's a fixed, it's not a fixed cost
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in dollars, but it's a fixed expense that has
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to be paid. So anytime they can kind of control
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that with routing and just, you know, proximity,
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I understand. Well, and it's, when you think
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of it that way too, it's why would they expand
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out two hours to a town of a hundred thousand
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people with way less properties? I mean, it's
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that scale issue. We're only managing 65 units
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over two properties. They're a couple hours apart.
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So 34 units at one, 31 units at the other. And
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it's very difficult. We do have a maintenance
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tech at one. That was a bit of a challenge to
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finally get that hire done because you can't
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offer full -time employment. So you're trying
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to fill a very specific little niche in need
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and what somebody need on both ends. So how many
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people need a part -time gig? So we had to compensate
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a little bit more and it's worked out because
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he's local and he has scaled with other projects
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that we weren't able to get with just having
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100 units in there. So that's something we're
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more cognizant about moving forward is buy bigger
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stuff if you're gonna have your own property
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management company that can support employees
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or try and get that scale by just buying close
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to what you already own. Yeah I know and I think
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of there's that weird spot right where it's like
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probably 20 units to I don't know probably 20
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units to 60 units that they're not residential
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but even though they're called commercial most
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commercial people don't want to touch them. Yeah.
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And you don't have enough income to really support
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full -time staff and so you really get stuck
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in the situation. I've thought about how could
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you use the residential model because we come
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from residential and we use property management
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there. How could we take that model and take
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the larger commercial model and somehow pull
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them into some level of hybrid? But it's There's
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things that happen at the residential level that
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just don't make sense at the commercial level,
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regardless of size. What are some examples on
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that? So when I think of like roofing, like we
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just had to replace it. I know we repaired it.
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It needs to be replaced on one of our houses.
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And I think of how that call went down, like
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property manager calls us. He's like, man, I
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hate to make these phone calls. I'm like, oh,
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God, just. Skip all the crap. Just tell me what's
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wrong. Tell me what's up But he's east I don't
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know that he's used to me because I'm just like
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come on just tell me what's wrong And so that
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was just it was a single one we called insurance
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we took care of it and There's a bunch of guys
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here in town that will do residential roofing
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To commercial level. Yeah, that's not just a
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phone call of oh, yeah, let me call my insurance
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I mean, it kind of is, but then it is, okay,
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who do I, who is in my list of people that will
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do commercial repair? Because they have to have
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their own insurance and I guess they ought to
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be bonded and they have, it just, it's a different
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level of business. Yeah. And I had that, you
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know, that's a similar conversation yesterday
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with the plumbing issue that we were working
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through is. call the plumber, oh, we don't do
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commercial, we don't do multi -unit. And then,
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you're also with the multi -unit theoretically
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these vendors may be going into multiple people's
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homes, which may be, they may be there or they
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may be not. So not only do you have everything
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related to, are they licensed, bonded and insured.
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are they trustworthy enough to be inside people's
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homes? And, you know, until you have that kind
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of relationship established, that's why I was
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up there for nine hours. We had somebody coming
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in that was new. I'm like, well, somebody from
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property management needs to be just there. On
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site. Yeah. It needs to just be there while they're
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going in and out until they're completely vetted.
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So, yeah. And then it's kind of like the same
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thing that we're dealing with when we're talking
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about property management, either self versus
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third parties. When it comes to vendors and contractors,
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do you bring that in -house then too, to try
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and control that? And then again, it's back to
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the labor thing. It's like, well, you got to
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have enough to support a quality employee. No,
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that was one of the things that we went through
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too is like, we call it the hoarder unit, the
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hoarder unit, just wouldn't get in the name,
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the hoarder unit. And so I, I've got a lot of
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friends here in town that do residential. And
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so I started reaching out to people and like,
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guys, I got this unit. It's not getting clean.
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Do y 'all know anybody that cleans hoarder units?
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And they gave me a list of people when we found
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a guy and he went in there and bid it and he's
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like, yeah, I can do this in a day. Took three.
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Which it didn't at the outset, it didn't look
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as bad. It was like, oh, this isn't that bad.
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And then it was just more and more and more.
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And so it turned out being much rougher than
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originally anticipated. But I was up there a
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lot, not because the guy wasn't trustworthy,
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but just because He was recommended to me. I
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trusted the guy who recommended him to me. But
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I still needed to at least see what's going on,
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get a good feel for the guy. And so I was up
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there more than I wanted to be in that disgusting
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unit. And so those are the things I'm like, there's
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like, I look at some of the stuff with we weren't
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getting reports on time or we weren't getting
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reports on our timeline. But Our timeline, like
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we think of ourselves as small fish because we're
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72 units. And so we're small fish. And just because
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we don't like the fact that the reports don't
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close until the 15th of the month, what can we
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really say about that? We'd really like to know
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where are things at on the fifth of the month.
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you know, where are things at on the 10th? Oh,
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yeah. Oh, yeah. I mean, that's, that's how we
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were paying the ask for our third party managers.
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And we did, you know, they did give us access
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while I was able to get in and pull reports whenever
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I wanted. So that was nice. Maybe you can ask
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for that. It's like we can pull reports. But
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again, like, I'm looking at those reports and
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we just switched from we were with the company
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that was using resmen. And now we're with the
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company that's using a different one. And I'm
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just like, I'm not, I'm not the most, um, tech
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savvy person out there. Well, I mean, that's
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also, you know, an interesting thing to bring
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up with third party management. Uh, if you're
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in multiple markets and we're multiple markets,
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um, you may end up with three or four different
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third party managers using three or four different
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property management software. And then you have
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to learn how to navigate each of those. The reporting's
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all a little bit different. It takes a little
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bit of practice to figure out how you want to
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filter down to get the information that you need.
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So, you know, I guess that's one advantage of
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self -managing is you get to pick the software
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that you want to use. To some extent, that's
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a whole other, you know, conversation is us figuring
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out which software to use. So, you know. I have
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a friend that he actually wrote his own property
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management software. I don't think he's a programmer,
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but he's from California and he's in computers,
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like software stuff. And so he was having, I
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guess he just didn't like everything that was
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out there. And so he just created his own. And
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like when all of my, like, I call it the, you
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know, the burning when, when my world was burning
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down around me, um, I called him up and I'm like,
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Wes, I need help here. Will I need help? And
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so he gave me access and, um, I didn't, I haven't
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even looked at it because everything kind of
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fell into place, but it's there. So I'm probably
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eventually once everything calms down, I'm going
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to take a look at it just to see, cause And there's
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someone, so he's there in California, but he
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owns some buildings downtown commercial, um,
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like office space and trying to turn some of
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it into residential like lofts. And so he told
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me who's here that's managing stuff for him and
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told me that I just have to go down there and
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say, Hey, we'll set me and she'll show me how
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the, how it works. Because I think that's the
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other issue too, is I've never had anyone just
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sit with me and show me how it works and just.
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sharing the screen and watching people click
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through things, I'm like, oh, wait, what? Because
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I've already got like a middle block with all
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those numbers that are everywhere in spreadsheets.
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Yeah, and some of them aren't very intuitive.
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Yeah, the real page is one that I've, you know,
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it's robust. But it's not intuitive like your
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smartphone where you can go in and kind of figure
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it out a little bit with your dropdown menus
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and stuff. Some of this stuff is a little antiquated.
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It's good, but you can't just go in and start
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using it. It takes some time to figure out.