How I Went from 200+ Tenant Telephone Calls to 1 Per Yr

Henry:
That is the BiggerPockets Podcast present quantity 784. Look, I did it. I nailed the fingers on the primary attempt. Take that David Greene. So for reference, what you’re saying is within the final 12 months, you had 218 calls from tenants round points or potential points at a property. And of these 218 calls, you solely needed to discuss to somebody one time.

Pasha:
Appropriate.

Henry:
I’d say the system works.

Pasha:
Thanks. Or possibly I’m simply tremendous fortunate. I don’t know.

Henry:
I’m taking on the BiggerPockets Podcast at this time and I’ve the pleasure of interviewing my good good friend, my accomplice, my scholar, Mr. Pasha Maleknia. Pasha’s bought a complicated diploma in info methods. He’s right here to show you the right way to construct methods that prevent money and time. Pasha, we all know you like board video games. So what would you say is extra enjoyable, studying a brand new board recreation or constructing a brand new system?

Pasha:
You’re making it so laborious. I’d say constructing a brand new system. I identical to to problem and simply the problem of it. After all you’re a nerd.

Henry:
So why do you have to stick round for this episode? We’re going to be dispelling some myths round system. We’re going to speak about why you’re most likely already spending time on methods with out even understanding it. Your methods most likely simply aren’t that nice but. We’re going to speak concerning the money and time methods can prevent, the money and time it saved me, the money and time it’s saved Pasha. And so if you’re a newbie, this can be a excellent spot to be as a result of you’ll be able to set your small business up for development within the long-term. And should you’re an skilled investor, you must stick round and pay attention as a result of we’re going to speak about issues that would probably put more cash in your pocket and likewise enable you to handle your tenants with out you having to spend a lot time addressing these points your self. All proper, so Pasha’s right here with me. He desires to tackle the introduction of the fast tip for me. So at this time we’re going to maneuver into the-

Pasha:
Fast tip.

Henry:
Immediately’s fast tip is go to biggerpockets.com/sources. There you’ll be able to obtain Pasha’s instance spreadsheet of how one can implement a system and jumpstart constructing methods in your personal enterprise. Thanks Pasha for sharing that with us. It’s a brilliant cool software. You’ll really get to see a bit of it should you’re watching this model of the podcast otherwise you’ll hear me clarify what that system spreadsheet is and the way he makes use of it in his enterprise. So thanks for sharing that with us.

Pasha:
Completely a pleasure.

Henry:
All proper, let’s get into the interview with Pasha. All proper all people, let’s welcome Pasha Maleknia again to the present.

Pasha:
All proper, thanks. Thanks, Henry, for having me.

Henry:
Superior, man. So for just a little little bit of background, we lately had Pasha on an episode, episode 773, the place he shared his unbelievable story about how he bought into the world of actual property investing and the way he’s taken that begin and catapulted his enterprise. However we type of left with just a little little bit of a cliffhanger. Pasha is an knowledgeable on methods and the right way to save your self money and time with actual property investing and we needed to dive into it, however clearly didn’t have time in that episode. So we introduced him again, particularly on this episode, to dig into methods, what they’re and the way he implements them and the way you need to be contemplating and doing the identical factor. As a result of the tremendous secret is all people already has methods in place, they most likely simply suck. So let’s discuss to Pasha about methods.
So Pasha, clearly, he’s a good friend of mine, he’s a scholar of mine, and he’s a superb actual property investor. So I needed to start out off, Pasha, should you wouldn’t thoughts by let’s dispel some myths round methods. As a result of every time folks hear the phrase system, I believe typically they suppose it’s rather a lot both larger than it’s or costlier than it’s, or that they’re not prepared for methods of their enterprise but. And I don’t actually imagine any of these issues are true. So let’s discuss a few of these myths after which you’ll be able to inform us why they’re lacking or in the event that they’re lacking. Perhaps I’m simply fully improper right here.

Pasha:
100%. Let’s do it.

Henry:
So the primary delusion is that methods have to be advanced. Is that this a delusion or is that this details?

Pasha:
Completely a delusion. As you realize, even in larger firms typically there’s a bent to construct advanced methods and it nearly at all times hearth backed. I believe one of the best methods that I’ve encountered are of their easiest type. And also you at all times wish to begin with a quite simple one degree sort of system that works for you after which begin, you’ll be able to at all times make it extra related to a enterprise or to the difficulty that you simply’re tackling. However I see this rather a lot that folks begin with an ideal system, a really advanced system as a result of they like it, however whereas they’re constructing it, they need it to be completely good, nevertheless it finally ends up with a system that by no means implements.
The only type of methods are at all times higher as a result of you’ll be able to at all times get a suggestions and you may at all times return and construct it once more and make it just a little bit extra related. There’s a saying that claims: “Your first 5 methods, at all times going to suck.” So it’s higher to simply begin it easy, ensure that it’s like, perceive why, what’s the downside, return, repair it. After which as you go ahead it’s going to be extra related to your want. However undoubtedly don’t begin with a fancy system.

Henry:
Superior. Man, that’s nice perception as a result of I believe folks do are inclined to overthink methods. I do know I did and actually most likely nonetheless do in lots of areas of my enterprise. So the second delusion is that you simply want some costly software program after which when you get this piece of software program, that software program system goes to repair all of your issues.

Pasha:
Oh, man, you’re preaching to the choir. Completely a delusion, completely a delusion. I’ve stated this rather a lot nearly in all of the talks that I’m going to, all of the workshops and every thing, folks attain out and are like, “Okay, what software program do you utilize? What do you utilize for this? What do you utilize for that?” And I at all times clearly inform them the reply, nevertheless it’s like lots of people wish to begin from the software program. They suppose software program purposes or apps are the methods, which is 100% improper.
Principally you at all times wish to just be sure you begin along with your core problems with your small business first, then you definately stroll that again and then you definately deal with what system can deal with that core challenge that I’ve. And then you definately exit and store for the softwares or purposes for it. An instance I may say goes to House Depot and purchase the primary 5 instruments that you simply see from the shelf after which return house and attempt to construct one thing with it. That’s not the way it works. You at all times wish to just be sure you deal with a related software in your want. And I see this rather a lot, man. They suppose they simply want to put in writing a examine for a giant fancy software program and so they suppose that each one of their issues are going to go away magically. And I at all times inform them that you simply’re in for a giant shock as a result of that’s not going to occur.

Henry:
Superior. Yeah, that’s an effective way to take a look at it. Right here’s a enjoyable reality about me. Even when I knew precisely what software I wanted to do a job and I walked into House Depot and acquired that software, I’d suck at that job. I’m simply not useful. That’s simply not a skillset that I’ve. And so that you additionally don’t have to be useful to be an actual property investor. Perhaps we’ll throw that on the finish of the present, professional tip for you new buyers.
That’s a improbable level as a result of lots of people suppose that methods imply I have to go purchase a bit of software program after which I inform the piece of software program, right here’s all of the issues that I do in my enterprise. After which that piece of software program says, superior, that is how you must do these issues and it doesn’t work like that. A system is absolutely only a set of processes that you simply implement systematically again and again and it’s supposed to avoid wasting you money and time. That may be something. We talked yesterday once we had been discussing this present and also you confirmed me considered one of your methods that was actually only a Google Sheet. All people has entry to Google Sheets. So it’s not software program you want, it’s processes.

Pasha:
100%. One other factor that I wish to add is we’re on the age of knowledge expertise that it’s the simplest time to construct a software program and if in case you have 5 softwares proper now, we’re going to have 20 by the top of subsequent yr, I promise you. And if you wish to simply chase the shiny software program utility, the latest pattern, man, you’re going to spend some huge cash and also you’re most likely not going to see nice return on that. That’s the place you wish to just be sure you at all times begin from the enterprise, you at all times begin your methods round it, and then you definately return and begin purchasing for one thing that’s related to yours.

Henry:
The following delusion that I wish to discuss is, so I’m type of going to skip one right here as a result of I believe we presently already hit at it. Techniques are just for massive companies. Clearly we’ve touched on that. We all know that methods are meant for any enterprise of any facet, it’s only a course of. However this one I believe is absolutely essential is that methods are just for out-of-state buyers.

Pasha:
Once we discuss methods are just for out of the state, I believe that’s not related as a result of I believe I’m the dwelling instance of this. Now we have about 20 items that the majority of them are inside 10 miles radius of the place I stay, however we type of urge ourselves to ensure that we by no means step into any of them as a result of we wish to have the liberty of geographical location. We would like to have the ability to be anyplace we wish and have the ability to renovate our houses and have the ability to handle all of our houses. We have already got accomplished the administration piece, now we’re centered on constructing our methods round rehabbing them remotely. If you wish to be extra passive in your small business, I’d suggest to start out simply eager about constructing the companies that you’ve on a platform that’s scalable and that’s solely doable if in case you have an excellent system in place. And also you don’t should be out of the state. You might be as shut as it will probably get to you, however you simply don’t wish to be the weather that’s the middle of your small business.

Henry:
If I’m listening to you accurately, what you’re saying is that methods are supposed to prevent money and time. And who doesn’t wish to save time or cash regardless of the place you’re positioned? However implementing methods if you end up native as properly I’d suppose offers you an added benefit, proper? Since you’re there within the occasion one thing doesn’t go as deliberate. So it’s simpler to hone your methods once you’re native since you might be there to hone it. After which when you’ve bought it dialed in, you actually open up nearly this world of enlargement. As a result of should you’re not tied to the geographic location of the place your properties are, regardless that you’re native, what’s stopping you from choosing a special market and increasing your small business since you see a chance in a brand new market and now you’re not held again by geographic location? So I believe that’s an exceptional means to take a look at issues.

Pasha:
100%, 100% agree with that.

Henry:
Nice. So we’ve established it’s about getting again your time and that’s why I believe methods are actually for everyone as a result of most individuals get into actual property as a result of they really feel prefer it’s a passive enterprise after which all of us be taught pretty shortly that it’s completely not a passive enterprise. However methods permit you to purchase again that passivity in your small business. And so you’ll be able to nonetheless have a semi-passive enterprise of actual property investing and make it extra passive via the usage of methods. And then you definately actually do get time freedom. And that’s actually what that is about. It’s about having the time freedom as a result of that lets you be the person who you’re referred to as to be and never the person who it’s a must to be for cash. I do know Pasha talks about having his crystal clear why and he calls it his “no BS why”. What does that imply and take us via why that’s essential, Pasha.

Pasha:
The no BS why got here up when, should you guys really listened to episode 773, it was like I used to be in a really dire state of affairs, if you’ll. And after that I assumed to myself why this by no means got here up. My life setting earlier than this factor was precisely the identical why I didn’t see that. And one of many issues that stood as much as me was I used to be type of following a why, which means why I’m doing all of this or why I needed to have a enterprise, that it was simply not unique to me. It wasn’t that I by no means heard about being an entrepreneur earlier than, I’d by no means heard about monetary independence earlier than. I used to be simply listening to different folks speaking about how they needed to give up their job or how they needed to have the liberty of economic dependency on their job, which is nice, don’t get me improper.
And I used to be listening to it and I used to be like, yeah, cool, that’s neat. I need that too. However I by no means took any actions on that as a result of fairly actually it was a BS why for me as a result of I like my job. I actually do. It wasn’t a giant motivation for me to be above and past and dig deeper into totally different enterprise fashions and attempt to be an entrepreneur. It’s simply a type of issues that you simply wish to ensure that no matter purpose you give you is one thing that 100% aligns with who you might be and what your core values are. And that is a type of issues that’s type of laborious as a result of there are such a lot of shiny whys on the market as properly that you simply would possibly really simply stumble throughout and also you’re like, “Oh, yeah, cool, I need it.” That’s not sufficient. That you must have that. It’s not like I wish to have it. That you must have that why.
I believe I talked to you, myself, nearly each different profitable entrepreneur I discuss to, there’s a why of their life that comes from the necessity half. It doesn’t come from the need half. As a result of all people desires to have a cool automobile to drive round. All people desires to have a enterprise that generates some huge cash. That’s the facet that you simply see on lots of social media. However the second that the rainbows and unicorn go away and there are some alligators on the way in which and there are some challenges on the way in which, they again out as a result of that doesn’t fulfill their need half.
And that’s the explanation that I at all times suggest to folks that really attain out to me is that just be sure you have your eyes on the why, why you might be doing this, and it must be so sturdy. It must strongly align with you in a means that everytime you get up within the morning, you’ll be able to give it some thought. It’s already in entrance of your eyes. It’s one thing that you simply simply can’t disconnect your self from it. It’s not like sooner or later you’re not within the temper and sooner or later you might be within the temper. It simply doesn’t work that means. And that’s why I referred to as it no BS why and it’s actually laborious to get there. I imply it’s nearly, you’ll want to simply dig deeper and deeper and deeper in your self to get there.

Henry:
Sure, I fully agree and I like that you simply name it the no BS why as a result of I’d by no means heard it referred to as that earlier than. However I’ve talked about it totally different with a number of of my different college students and the way in which I’ve at all times pictured is folks at all times are, they’re fast to say, “I need monetary freedom, or, “I need monetary independence,” or, “I wish to construct generational wealth.” That’s the buzzword, generational wealth. All of these issues sound good, however I don’t know that folks actually perceive what they imply. For me, monetary freedom’s not a purpose. It’s not your why. Your why is what you get to do since you’re financially free. Monetary freedom permits you the time freedom to be the person who you’re referred to as to be, not the particular person it’s a must to be for cash. And sometimes once you’re the person who you’re referred to as to be, you get to affect different folks.
So your why is usually rooted in who you get to be in service of different folks. And so once you’re eager about your why, you’re proper, it’s bought to be the factor that drives you past the great days and the dangerous days. You stated it greatest, you stated, you want it, you want it to occur. So should you’re pondering proper now, I wish to be an actual property investor in order that I might be financially free, that’s nice. Take it a step deeper. In case you had been free at this time, should you wakened and magically had all of the rental property to supply all of the cashflow you wanted to stay your way of life and to pay for all of your life’s bills, what would you be doing with that freedom? Whose life would you be impacting with that freedom? That’s the place your no BS why lives. Agree?

Pasha:
100%. Completely. It’s at all times like, you see that image and then you definately’re like, “Oh, man, wait. So now I’ve freedom however my household sucks,” or one thing like, “Now I have to put all of my undivided consideration to my household.” And then you definately’re like, “Okay, that is what I want, let’s go for it.” After which there may be nothing that basically can cease you as a result of you realize precisely the place you wish to head to.

Henry:
We do that train with a number of of my college students and the cool half about listening to folks dig into that’s who you get to be since you’re free. Lots of people are like, “Effectively, now I get to retire my mother and father. Now I get to ship my mother and father on a visit or transform my mother and father’ home,” or, “now I get to pay the medical payments for my sick member of the family who couldn’t afford the correct medical remedy.” These are the issues, these are the whys which can be going to drive you thru the troublesome instances. As a result of in case your why is barely rooted in you and what you need, people, we’re human and we let ourselves down every single day.
You understand how many instances I stated I’m going to go to the health club tomorrow and didn’t go? We let ourselves down on a regular basis, however we don’t prefer to let down different folks. And so take into consideration who you get to assist, what you get to do with that freedom, that’s what pushes you thru. So discuss to me briefly right here, Pasha, about how folks discover that why, what drove you, what questions did it’s a must to ask your self to hit what that why was?

Pasha:
I believe for me it was just a little bit troublesome as a result of I used to be in a state of affairs that I discovered myself, I didn’t have lots of time after which instantly it was in entrance of me like, what are an important issues for me? However what I’d suggest is, one, you’ll want to be brutally sincere with your self. And there’s a phrase in there brutally, it means it’s not going to be snug, it’s going to be an uncomfortable dialogue. And typically you wish to herald any individual that is aware of you very properly and ask them that will help you to dig deeper. It’s extra like interrogation even. You wish to just be sure you get to the core wants that you simply wish to go after and it’s one thing that simply makes you a blazing why that then it turns into an engine that you’ll want to harness that vitality to run your small business in your day-to-day life.
However I’d say be brutally sincere with your self. In case you’re speaking a few particular want that must be compensated for or must be addressed for, what are these wants? Write them down. As you talked about, it is likely to be addressing your particular family members or the state of affairs that they is likely to be left after. It must be tremendous tailor-made about you. So ensure that it’s 100% personalized based mostly in your life, based mostly in your values in life. It’s good to take a look at different folks’s why and that’s wonderful, however typically it simply merely doesn’t align and also you don’t wish to simply copy another person. You wish to just be sure you tailor it for your self and you’ll want to simply dig deeper and deeper and deeper till… While you get there, you realize it. It’s a type of issues that, once you hit there, you’re like, “Oh, yeah, that’s it. That’s what 100% aligns with my core worth.”

Henry:
Discovering your why, Pasha’s the first step for locating your why is to be brutally sincere with your self. He additionally talks about if you wish to be wealthy or why you wish to be wealthy, diving into what which means. We discuss this rather a lot with folks. It’s like, what’s the wealth going to do for you? What’s the wealth going to do for the folks round you? And then you definately discuss once you outline your why, is there one thing that you simply didn’t clearly know earlier than? That’s an ideal level as a result of if you end up digging into your why and making an attempt to determine what’s actually driving you, it’s uncomfortable. It’s going to boost some questions and now you might need some new info that you’ll want to work via to be able to determine what that why is.
After which this one, I imagine, is vastly essential. Is it one thing that excites you everytime you get up within the morning? That’s a reality. This enterprise excites me to no finish. And what I like about this enterprise particularly is attending to share with different folks and assist different folks. I actually had a bummer name with a tenant proper earlier than this. However understanding that I bought to get on right here and share actual property investing with all of you guys and chat with my good friend Pasha and have him share his information and knowledge with you has actually lifted me up as a result of my why is rooted in ensuring that I share this data with folks. So it will get me excited every single day. And so should you reply no to any of those questions, it implies that you’ll want to maintain digging. And I believe that’s nice. And all these are coming from Pasha. And so what’s superior about that is that is Pashas system for having a why. This dude has a system for every thing.
So whereas we’re on that matter, let’s go forward and let’s dive into methods. Pasha sat down with me and reviewed all of his methods for his enterprise. I used to be one who didn’t implement lots of methods, and it’s not as a result of I don’t suppose they’re priceless, it’s simply, I’ve at all times been a prepared, hearth, goal type of operator after which make tweaks as I’m going. And after I sat down and went over to Pasha’s system, I used to be totally impressed, a lot in order that we began to implement a number of of the methods that he’s utilizing. So I’ve began to implement a few of these methods in my enterprise and I’m going to speak to you about these. However afterward within the present we’re going to interrupt down 5 steps of how one can construct any passive system with Pasha. So stick to us for that.
However for me, after I sat down with Pasha, I instantly applied a system for exhibiting my rental properties and a system for keeping track of renovations of my properties. And so at a extremely excessive degree, Pasha had this nice system for putting in… Primarily you’re putting in web-enabled cameras, hooking them as much as a cell hotspot, after which putting in a web-enabled keypad door lock after which permitting your tenants who wish to see your property. So after our tenants apply, we will now give them a code the place they will go check out the property and we don’t should bodily go see the property. And what was large for us is correct once we sat down with Pasha about this, we had been about to place a property in the marketplace that was a few 45-minute drive away from the place the remainder of our properties are. And so I used to be like, man, that is going to avoid wasting actually simply two hours of driving time per appointment already off the highest. Plus, should you calculate that, and I do this for if I do 10 showings, that’s, what, 20 hours that you simply saved in simply drive time.
And so we had been capable of implement this on that property. We confirmed it nearly. Nobody ever complained, nobody had an issue with it in any respect. The cameras would activate when folks would enter the room. So we’d know when folks confirmed up, we’d know after they left. The codes, we’d give all of them cycles, so all people had their very own code. And it was actually a lot much less time-consuming and fewer painful that we’ve now applied it for properties which can be even near us as a result of not solely is it saving drive time, nevertheless it’s saving the time that it takes to truly open up the property. And everyone knows as landlords, you set appointments for showings and about half of the folks present up, a few of them don’t even present up. So that you’ve wasted your time even going to a property and other people simply no present on you. So what an enormous time saver for me. We’re additionally utilizing it to watch our rehab property. So I do know firsthand that a few of these methods have been a lifesaver in my enterprise.
Pasha, let’s discuss, give us two of your favourite methods after which how they’re saving you time or cash.

Pasha:
Oh, yeah, completely. As you talked about, the instance that you simply introduced up was an excellent one. I believe once we had been beginning this, we realized that once we wish to present the property or once we wish to have a greater monitoring system on the contractors coming out and in, it must be one thing that may be accomplished nearly. So precisely what you talked about, that’s what we applied. All of the cameras, all the online connections, and all of the keypads all collectively. They usually really at the moment are all in numerous packing containers. We’ve bought seven of those packing containers that they’re all paired. So all they should do is to simply ship it to any individual, simply plug them to {the electrical} plug after which it’s all going to be on-line. I believe that’s actually considered one of my favourite ones. So that you undoubtedly took one of many favourite ones for positive.
It saved us lots of time. It nonetheless is saving us lots of time as a result of it’s simply a type of issues that you simply simply purchase them as soon as and then you definately maintain utilizing them. As you talked about, you don’t should be the person who drives all the way in which there. And tenants like it too, as a result of they didn’t really feel strain. They may go into the unit and so they may take a look at it. My contractors additionally, it allowed us to grasp who is an effective contractor who is just not. If any individual says, “Oh, I’ve been working right here for 5 days,” they’re like, “No, right here’s a log that really reveals you’ve been working right here for 2 days. So let’s wrap it up. After which there are another those who they really really feel higher when you’ve gotten safety within the space for the entire supplies.
I imply all of this comes collectively into, what you talked about, the ache for enterprise, which is mainly the way it’s all related collectively to unravel an issue for you, which for us it was not losing time and never losing vitality. And it’s additionally really type of humorous too. Typically we go as a result of these are like two-way communications. So typically we go in there with the contractor and we’re like, “Hey, don’t overlook to complete that wall. We have to get that accomplished too.” First they’re all afraid like, who’s speaking to them, after which they discover. It’s really fairly humorous. That’s considered one of them.
The opposite one which I actually like is the system that I put collectively, which is mainly the class of the problems that may go improper in our rental properties. For instance, it says if in case you have a, let’s say, surge or if in case you have overloading like electrical after which we categorize it into plumbing space, landscaping space, mainly handyman stuff, HVAC, issues like that. And the issues are mainly in right here and the answer to them or the treatment can also be in entrance of them. After which on the finish it says, if none of those cures work, then you’ll want to contact this particular person for that challenge. And that particular person goes to be the plumber, electrician, handyman. After which in fact we now have one other web page that has, these are our contacts for electrician, these are our contacts for a plumber, these are our contacts for so-and-so.
Now with one thing like this, I can simply step again and now my digital assistant that’s working remotely can deal with the entire issues, not all of them, however I’d say 99% of the issues that our tenants have. They obtain these, they mainly come right here, they match them with the issues right here, they stroll tenants via a number of the downside fixing and typically our tenants are literally capable of resolve the issue themselves, just like the small ones. Clearly if it’s severe or if it’s one thing that may create a legal responsibility, we ship a licensed particular person to repair it. However typically there’s some simpler stuff that they will do and, man, our tenants like it. They completely love this as a result of they get to unravel the issue actually quick. And it’s nice for us as a result of we don’t spend tons of of {dollars} for each name. It’s one thing that may be addressed. I believe we deal with 15% of our upkeep calls with doing one thing like this.
And if it helps, I’m going to ensure that I ship a template as a way to put it into the facet notes. However once more, this is rather like a template. That you must go in there and see what are the issues which can be relevant to your small business and you may construct one thing there. However that is additionally undoubtedly considered one of our entrance winners.

Henry:
That is actually cool, Pasha. And so what I wish to do is add just a little context right here for individuals who are listening or driving and might’t see, after which I wish to ensure that I’m eager about it in the appropriate means. So what Pasha’s bought up here’s a spreadsheet, and in that spreadsheet he’s damaged down a class and I imagine the classes are the trades. And we are saying classes, what we’re speaking about is points. So if a tenant has a problem, one thing’s not working, you break it down into classes. So there’s that class, plumbing, electrical, is it handyman?
So you determine the class. If the class is a type of, then on this spreadsheet you’ll be able to observe alongside and say, okay, it’s electrical. So what’s the subcategory? The subcategory, if it’s a electrical, it could possibly be the breakers are tripping or it could possibly be flickering lights. And so you discover the subcategory of the difficulty. After which as soon as you discover the subcategory of that challenge, proper subsequent to that subcategory is the treatment or the resolve for that downside. And so then you’ll be able to see what that answer is, attempt to implement that answer and if that works, the issue is solved. And if that doesn’t work, then your subsequent part is who to contact to get any individual on the market to determine what the precise downside is and get it fastened.
That is like once you name the cable firm as a result of your web’s out and so they’re like, “All proper, properly, is the sunshine lighting up?” And also you’re like, “Yeah, the sunshine’s lighting up.” They’re like, “Okay, nice. What’s your add velocity, obtain velocity? And also you inform them, they are saying, “Okay, nice.” So lots of these issues are simply solved by typically your modem isn’t on, proper? And so that you’re in a position to make use of this and it’s only a spreadsheet, it’s only a Google Sheet that you simply took the time to fill out on the entrance facet with what points you usually see, after which the way you usually resolve these issues, after which who to contact if this resolve doesn’t work. And what you’ve accomplished is you’ve given this spreadsheet basically to a digital assistant.

Pasha:
That’s appropriate, sure.

Henry:
And your digital assistant takes the calls out of your tenants, so that you’re not taking calls for bogs and something. Your digital assistant, this actually is their coaching. They only observe the spreadsheet, inform them what to do. If it doesn’t work, then this spreadsheet tells your digital assistant precisely which contractors to name. Is that appropriate?

Pasha:
That’s appropriate. And, once more, that is an instance, guys. You’ll be able to construct it your self or if you would like, once more, I’m going to ensure that is accessible to you as properly. However the contact right here tells the digital assistant who they should contact, as a result of I don’t need them to make use of their judgment for it. I need them to observe this written down system. So, for instance, on this case it says, if, let’s say, there’s a surge that it simply makes their fusebox flipping, then that is severe, you don’t wish to do something, you wish to contact an electrician. After which there’s one other web page that has the job title and other people which can be doing that and it ranks them from the primary to the final. So, begin calling them.

Henry:
And that is nice as a result of lots of people, one of many myths of landlording is that folks say, “I don’t wish to be a landlord as a result of I don’t wish to take care of tenants and bathrooms.” And also you simply actually confirmed me a spreadsheet that offers with the tenants and bathrooms for you. So it’s not that huge of a deal, people. Are you able to give us an instance or breakdown ultimately, how a lot time or cash is a system like this saving you and your small business?

Pasha:
Oh, man, rather a lot, rather a lot.

Henry:
What number of calls is your VA taking and what’s the quantity you’re seeing?

Pasha:
We obtained about 218 tickets or calls within the final 12 months for our properties as a result of we really type of expanded and all of them are addressed with my tenants. Now there are some examples which can be one-offs which can be actually bizarre and it means, for instance, we had a thunderstorm. You and I are each dwelling in Northwest Arkansas, so we all know that thunderstorms are usually not that alien right here. After which there was a tree that coming like 45 angle about to hit the home, nevertheless it didn’t. So clearly this was a type of issues that we didn’t have it in our system after which we added it. So if there’s a tree hanging round, name a tree particular person or tree elimination particular person and now, from then they do it. However that was, I believe, the one name that I needed to chip in. I used to be like, “Okay, if that’s the difficulty, you’ll want to name this particular person.” However then I constructed it into my system so if it occurs once more, then I don’t have to be pulled again into it.

Henry:
So for reference, what you’re saying is within the final 12 months you had 218 calls from tenants round points or potential points at a property. And of these 218 calls, you solely needed to discuss to somebody one time.

Pasha:
Appropriate.

Henry:
I’d say the system works.

Pasha:
Thanks. Or possibly I’m simply tremendous fortunate, I don’t know.

Henry:
And it’s not simply that too, it’s not simply that. However what I wish to spotlight right here is he solely needed to get on the telephone one time, however he stated his tenants love this, they’re glad, they’re not feeling a disconnect from customer support via this.

Pasha:
Precisely.

Henry:
That’s superior.

Pasha:
And that helps us rather a lot as a result of when your prospects are glad, when your renters are glad, the possibilities of them staying with you is extra. So your emptiness really begins going decrease as a result of they know that every time they’ve a problem, it’s going to be addressed instantly. They don’t should name the tenant, name the owner, sorry, after which landlord calls the seller and going forwards and backwards. So that is simply a type of issues that it helps when you’ve gotten every thing on this format. And once more, I believe you talked about one factor that I actually wish to emphasize. That is constructed on Google Spreadsheet, which is free, out there, accessible to all people and it’s saving us lots of time. So one other factor is simply go along with what you suppose you wish to do, construct a easy, tangible, simple to make use of system on no matter, even back-up a serviette, and simply to start out getting it to work.

Henry:
Thanks a lot, Pasha. I believe that was an ideal instance for folks to see that methods don’t should be loopy costly and that they will profit all people and prevent money and time.
All proper, so let’s transfer on to the meat and potatoes of the present. The data folks actually wish to know is what are the 5 most essential steps for constructing any passive system? The 5 steps we now have listed here are inputs, processes, outputs, suggestions, and the surroundings. What the heck does that imply? Pasha, give us an instance. So what are the inputs for a system?

Pasha:
So if you concentrate on this, all of the methods have these enter course of, output piece. So enter might be something actually, no matter you wish to get into so that you simply’d have the ability to convert it into one thing else. So the enter could possibly be any knowledge level that you’ll find. For instance, within the instance that I confirmed, the enter goes to be the issue, the difficulty that the tenants are going through, proper? It’s simply the information level on the difficulty. It could possibly be your P&L if you wish to have a system that checks your P&L and tells you if you’re doing okay or not. The enter must be actually aligned and I believe an important factor about enter is the enter is an important factor that must be aligned along with your core enterprise challenge. You don’t wish to have further info coming in, you need it to be proper, crisp, addressing the precise downside that you simply’re making an attempt to unravel and construct the system round it.

Henry:
Thanks. So enter is what you feed into the system after which course of. What’s the method? And I like the way you associated the inputs to the instance we simply noticed. So let’s proceed that. Let’s discuss what the method is after which what’s the method from the instance you simply confirmed us.

Pasha:
So course of is mainly the engine of the system. That’s what it’s. It could possibly be the step-by-step procedures in order that it follows a sure circulation chart to get to a sure output. And this instance, for instance, it’s going to be the treatment part, which is once you stroll your tenant via the problems that they’ve and now you wish to mainly get it fastened. So that you stroll them via how one can get the enter info and mainly add to it or take a look at it from a special angle or mainly change that knowledge enter. So, for instance, on this case, let’s say, if rubbish disposal is clogged and I believe, “Oh, the landlords are actually aware of this challenge,” is that you really want the tenant to go in there, take a look at the underside of it if there’s like a fuse button or one thing or if there’s a Allen wrench that they should use. All of those walkthroughs and procedures and step-by-step guides, that’s the place the method is available in.
And it’s simpler to do that. It’s mainly the principle half that’s going to exchange you if you wish to construct a system to exchange you. Does that make sense? That is the place you’d wish to have your information extracted from the person who is an knowledgeable, often it’s going to be you, and also you wish to put it right into a step-by-step information that with that enter can observe these step-by-step so that it’s going to circulation via that to the subsequent step.

Henry:
So if I’m following you accurately, the enter is the issue, the method is the the way you’re fixing the issue.

Pasha:
It may be.

Henry:
Okay, now discuss to us about output.

Pasha:
All methods have to have a degree which mainly desires to offer you what you want. Now typically the output of a system might be enter for the subsequent system and this occurs on a regular basis, particularly if you wish to have a sequence of system and if in case you have a fancy enterprise mannequin that you simply wish to put every thing collectively. On this instance, the output goes to be a walkthrough that’s already offered and ensuring that the issue is addressed. So it may be in numerous codecs, it may be within the format of a information repository. Information repository is mainly the place you place your whole info which can be actually tangible and priceless to you.
Within the instance of lead era, it’s going to be the checklist of those who… So, let’s say, you begin with 1000 folks, you’ve gotten a course of that breaks it all the way down to, let’s say, a listing of 20. And now that 20 goes to be the output of your first system. That’s going to be folks which can be extra more likely to be prepared to promote their house. Now you’ve gotten one other system that use that after which course of it after which sends a mailer to them, for instance. However that output is mainly what you’re going after and what the results of your system ought to appear to be. And it may be in numerous codecs and it may be repeatable.

Henry:
It feels like your outputs can probably be in numerous codecs even inside the similar system as a result of with the instance we went via, one output is likely to be that the outcomes guidelines resulted in the issue being fastened and one output is likely to be that you simply needed to name knowledgeable in and out one of many sub examples you gave, that skilled got here out and did the work and the output was now you’ve gotten a brand new subcategory so as to add to the spreadsheet so that you simply don’t have to unravel that downside once more.

Pasha:
That’s 100% proper. In order that output can feed to totally different methods. One in every of them is the cost system. It’s a feed to a special one, which is like, now the job is completed, it must go to the payroll system. So that you pay them. Once more, you don’t wish to be the one who writes the examine each time. One other one goes to be, the issue is solved, nevertheless it was a brand new one, so let’s return and add it to the system that we now have, which mainly is the subsequent system which is the suggestions.

Henry:
Yeah, let’s discuss that.

Pasha:
So suggestions… Okay, so the enter course of output is sort of widespread. I’d say that even in huge corporates when it’s constructed, when the enter is given and when the output is taken, all people’s like, “Hallelujah, we bought there. That’s the system we wish.” And, man, I see this again and again, which they simply go away it like that. They’re like, “Okay, cool, the system is working.” After which they simply go on to the subsequent one. The issue is you construct a system nevertheless it’s not a sustainable system as a result of because the context adjustments, because the enter adjustments, because the enterprise world adjustments, your system must be alert, it wants to grasp what’s occurring so it will probably modify itself.
So an excellent instance of it’s going to be figuring out KPIs for a way your system is working in order that you realize in case your system is definitely in fine condition or not. So, for instance, on this case, once more going again to the upkeep system, the KPI for us is, are our tenants glad about addressing their points or not? So we ship out two surveys each six months, mainly, yearly. So each six months we ship one survey and we ask our tenants how do they really feel they’re being handled, how do they suppose their upkeep points are being addressed? And that could be a nice KPI as a result of it tells us whether or not it’s one thing that finally our tenants are feeling nice about it or not. And in the event that they don’t, we have to come again. In order that’s our KPI, proper?
The primary yr it’d work completely, however the second yr it’d really not work very well and it’s going to boost a crimson flag that permits us to return in there, dig into our system and see what was the difficulty, what brought about that particular person to not be glad about it. After which we stroll it again after which we modify our processes, we modify our enter to ensure that subsequent time we will deal with this. So the suggestions is mainly a loop that goes out of your output to the method and to the enter to ensure that we replace it and keep related.

Henry:
Okay, nice. So, if I’m understanding, the suggestions or suggestions loop is what takes your system from being a static system that by no means adjustments to a dynamic system that’s altering or evolving as your small business evolves. So with the instance you gave, you measure your tenants, mainly you measure in the event that they’re glad with the work that’s being accomplished. If you’re nice, you state the system retains doing what it’s doing. In case you’re getting lots of suggestions that tenants aren’t glad, then you’ll be able to dig deeper into that suggestions after which modify your system to deal with these suggestions points after which proceed to judge and make adjustments so your system is dynamic. And I’m going to exit on a limb right here and I’m going to guess that you’ve a system that does the suggestions for you.

Pasha:
I like that. I like that. I do. No, yeah, completely. Now you wish to ensure that, once more, that system, that suggestions loop can also be working the way in which that you really want. This is sort of a loop, it’s like a spiral, you’ll be able to simply go all the way down to it. However 100%. And once more, begin with one thing easy, simply enter course of output is ideal, nevertheless it shouldn’t be like your ultimate vacation spot. Simply put some KPI, be certain that this KPI is sweet. In order for you, you’ll be able to at all times, as Henry talked about, construct one other system in your KPI. However on the finish of the day you wish to ensure that this isn’t a one linear line. It really goes again and it feeds itself so it stays related. As a result of should you do this, you’re going to should spend much less time coming again to the issues that aren’t being addressed by your methods.

Henry:
Incredible. So to recap, we bought the 5 most important parts of a system is the enter. That’s the downside that you simply feed into the system. You’ve bought the method, that’s basically the way you’re fixing the issue or the way you’re addressing that challenge. You’ve bought your output, which might be the outcomes of that course of and that may be a constructive or a destructive consequence. After which you can also make changes to your course of via suggestions and measuring the outcomes. After which surroundings, we didn’t contact on surroundings, did we?

Pasha:
The surroundings is mainly the context that your system is working in and that’s just like the final part that you really want to concentrate on. Principally on this instance, once more, if this method is working in houses, I’m simply saying like in Arkansas and now you wish to handle the identical properties in, let’s say, California, you’re in a special context, you might be in a special context for enter, you’re in a special context for processes, some litigations apply to it, some litigations to the output and that’s the place you need to concentrate on that, return in there and modify your methods to the context that they’re working in to ensure that your system stays related.

Henry:
Thanks for breaking down that 5 step course of, Pasha, that’s nice info and I believe it actually helps not solely to demystify methods however make it seem to be one thing all people must be implementing inside their enterprise at some degree. Earlier than we go, give us some examples of some wins or some successes or some positivity that’s come from you implementing a number of methods in your small business that possibly you didn’t count on.

Pasha:
I believe considered one of them is we had been really in Hawaii and my condo bought flooded, one of many ones that really we had a tenant in. I’m not speaking a few leak or one thing. It was about to get flooded actually dangerous. I didn’t even discover. It was simply on my weekly report that I get from the digital assistant of what’s happening as a result of I at all times wish to know what’s happening. And it was simply addressed robotically. The issue raised, they referred to as, there’s an emergency degree on that system, it was a excessive emergency. They dispatched any individual like a plumber that’s actually good in mould remediation and all of that. Thank God it didn’t get to any of this as a result of we had this in like the primary hour.
And I believe, all in all, we spent about $800 and it included a brand new piece to the water heater, which, if I didn’t have the system in there, I’m fairly positive my journey would’ve been ruined and it wouldn’t be a really pleasing expertise for my tenant both. However it was addressed within the first couple of hours and it was fully working wonderful, which, to me, it was an ideal win as a result of it confirmed me that it will probably work particularly after I wanted it to.

Henry:
Yeah, man, that’s an ideal instance since you’re proper, nobody desires the decision after they’re on trip that considered one of their items flooded. And it at all times looks as if that’s once you get these calls is once you’re out having an excellent time. In order that’s cool that your system simply type of dealt with it for you and saved you every kind of cash and did precisely what it was alleged to do. That’s wonderful. Thanks for sharing that.
All proper, thanks, Pasha, for giving us this breakdown of methods. There are some nice info that you simply gave us as a result of, once more, methods, I like to consider it and also you type of put this in my head, it’s that we’re all already utilizing methods, proper? A system is only a course of you’ve gotten in your small business and lots of the instances our processes simply aren’t nice. And so pondering of methods isn’t pondering of how can I’m going purchase an costly piece of software program or how do I spend lots of effort and time to unravel big-level issues? It’s only a matter of systematizing the issues which can be essential to you or the issues which can be taking essentially the most of your time that you simply don’t wish to be taking your time and giving it some inputs, some processes and a few outputs, after which offering some suggestions to maintain your methods dynamic and you may actually save your self, not simply time however cash. Did I summarize that in a great way there for you?

Pasha:
And one other factor that I simply needed so as to add actual fast is typically it’s such as you may not be the person who is the knowledgeable in that space and that’s nonetheless wonderful. An excellent instance is like, you and I’ve been associates for years and I personally realized rather a lot from you, particularly in the case of discovering good off-market offers. And I used to be like, man, this man is aware of his stuff. As I confirmed it to you, we began eager about all of those procedures and processes, how can we flip that right into a system in order that even that may be automated.
So, for instance, I do know that we didn’t get time to get there, however even lead era proper now for me is one thing that I put collectively. Once more, we tried it, it began with essentially the most easiest method, however proper now it’s like, hey, I simply despatched this zip code that I wish to go after. After which there’s really, I referred to as it LA, so native assistant, that picks it up, processes all of the mails. The direct mails are out, all of the codecs, every thing is predefined. However all of them comes from, not from me, however from a educated particular person within the space, such as you, that may assist me get understanding how this must be. And all I do is simply take the idea from the thinner and convert it right into a system and simply let the system work.

Henry:
That’s nice info. A good way to consider fixing issues. Pasha, thanks a lot for being gracious sufficient to share a template or a clean template instance of your, what do you name that?

Pasha:
I name it Residential Upkeep System XLX.

Henry:
Your RMS Spreadsheet. And so if you would like to try that spreadsheet template, you’ll be able to go to biggerpockets.com/sources the place Pasha has been gracious sufficient to share that with us. And so let the folks know the place they will discover you, Mr. Pasha.

Pasha:
You will discover me on Instagram, @techierealestate, T-E-C-H-I-E, actual property, all one phrase. And in addition the web site is 5dayscourse.com. These are the 2 locations that you’ll find me.

Henry:
Nice. And you’ll find me on Instagram as properly. I’m @thehenrywashington on Instagram. Thanks a lot for becoming a member of us. Numerous nice info there, Pasha. It’s been a pleasure speaking to you and we want you nothing however one of the best.

Pasha:
Thanks, sir. Have an excellent one.