How I Went from 200+ Tenant Cellphone Calls to 1 Per 12 months

Henry:
That is the BiggerPockets Podcast present quantity 784. Look, I did it. I nailed the fingers on the primary strive. 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:
Right.

Henry:
I’d say the system works.

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

Henry:
I’m taking on the BiggerPockets Podcast at present and I’ve the pleasure of interviewing my good pal, my companion, my scholar, Mr. Pasha Maleknia. Pasha’s received 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’re keen on board video games. So what would you say is extra enjoyable, studying a brand new board sport or constructing a brand new system?

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

Henry:
So why must you 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 in regards to 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, it is a good spot to be as a result of you possibly can set your enterprise up for progress within the long-term. And if you happen to’re an skilled investor, you need to stick round and pay attention as a result of we’re going to speak about issues that might doubtlessly put more cash in your pocket and likewise assist you maintain 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 short tip for me. So at present we’re going to maneuver into the-

Pasha:
Fast tip.

Henry:
At present’s fast tip is go to biggerpockets.com/assets. There you possibly can 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 device. You’ll really get to see a chunk of it if you happen to’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 a bit little bit of background, we lately had Pasha on an episode, episode 773, the place he shared his unbelievable story about how he received into the world of actual property investing and the way he’s taken that begin and catapulted his enterprise. However we form of left with a bit little bit of a cliffhanger. Pasha is an professional on methods and the right way to save your self money and time with actual property investing and we wished 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 ought 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 pal of mine, he’s a scholar of mine, and he’s a superb actual property investor. So I wished to start out off, Pasha, if you happen to wouldn’t thoughts by let’s dispel some myths round methods. As a result of each time individuals hear the phrase system, I believe typically they suppose it’s rather a lot both greater than it’s or dearer than it’s, or that they’re not prepared for methods of their enterprise but. And I don’t actually consider any of these issues are true. So let’s speak about a few of these myths after which you possibly can inform us why they’re lacking or in the event that they’re lacking. Possibly I’m simply fully flawed right here.

Pasha:
100%. Let’s do it.

Henry:
So the primary fantasy is that methods should be complicated. Is that this a fantasy or is that this details?

Pasha:
Completely a fantasy. As you realize, even in greater firms typically there’s a bent to construct complicated methods and it nearly all the time fireplace backed. I believe the most effective methods that I’ve encountered are of their easiest type. And also you all the time wish to begin with a quite simple one degree sort of system that works for you after which begin, you possibly can all the time make it extra related to a enterprise or to the problem that you just’re tackling. However I see this rather a lot that individuals begin with an ideal system, a really complicated system as a result of they like it, however whereas they’re constructing it, they need it to be completely excellent, nevertheless it finally ends up with a system that by no means implements.
The best type of methods are all the time higher as a result of you possibly can all the time get a suggestions and you’ll all the time return and construct it once more and make it a bit bit extra related. There’s a saying that claims: “Your first 5 methods, all the time going to suck.” So it’s higher to simply begin it easy, make it possible for it’s like, perceive why, what’s the drawback, return, repair it. After which as you go ahead it’s going to be extra related to your want. However positively don’t begin with a posh system.

Henry:
Superior. Man, that’s nice perception as a result of I believe individuals do are inclined to overthink methods. I do know I did and truthfully most likely nonetheless do in lots of areas of my enterprise. So the second fantasy is that you just 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 fantasy, completely a fantasy. I’ve stated this rather a lot nearly in all of the talks that I’m going to, all of the workshops and all the things, individuals attain out and are like, “Okay, what software program do you employ? What do you employ for this? What do you employ for that?” And I all the time clearly inform them the reply, nevertheless it’s like lots of people wish to begin from the software program. They suppose software program functions or apps are the methods, which is 100% flawed.
Mainly you all the time wish to just be sure you begin together with your core problems with your enterprise first, you then stroll that again and you then concentrate on what system can tackle that core challenge that I’ve. And you then exit and store for the softwares or functions for it. An instance I might say goes to Residence Depot and purchase the primary 5 instruments that you just see from the shelf after which return house and attempt to construct one thing with it. That’s not the way it works. You all the time wish to just be sure you concentrate on a related device in your want. And I see this rather a lot, man. They suppose they simply want to jot down a verify for a giant fancy software program they usually suppose that every one of their issues are going to go away magically. And I all the time inform them that you just’re in for a giant shock as a result of that’s not going to occur.

Henry:
Superior. Yeah, that’s a good way to take a look at it. Right here’s a enjoyable reality about me. Even when I knew precisely what device I wanted to do a job and I walked into Residence Depot and purchased that device, I’d suck at that job. I’m simply not helpful. That’s simply not a skillset that I’ve. And so that you additionally don’t should be helpful to be an actual property investor. Possibly 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 must go purchase a chunk 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 need to do these issues and it doesn’t work like that. A system is admittedly only a set of processes that you just implement systematically over and over and it’s supposed to save lots of you money and time. That may be something. We talked yesterday once we have been discussing this present and also you confirmed me one in all your methods that was actually only a Google Sheet. Everyone 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 data expertise that it’s the simplest time to construct a software program and you probably have 5 softwares proper now, we’re going to have 20 by the top of subsequent 12 months, I promise you. And if you wish to simply chase the shiny software program software, 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 all the time begin from the enterprise, you all the time begin your methods round it, and you then return and begin looking for one thing that’s related to yours.

Henry:
The following fantasy that I wish to speak about is, so I’m form of going to skip one right here as a result of I believe we at the moment already hit at it. Programs are just for massive companies. Clearly we’ve touched on that. We all know that methods are meant for any enterprise of any aspect, it’s only a course of. However this one I believe is admittedly vital is that methods are just for out-of-state buyers.

Pasha:
After we speak about methods are just for out of the state, I believe that’s not related as a result of I believe I’m the residing instance of this. We now have about 20 models that the majority of them are inside 10 miles radius of the place I dwell, however we form of urge ourselves to make it possible for 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 be capable of renovate our houses and be capable of handle all of our houses. We have already got performed the administration piece, now we’re centered on constructing our methods round rehabbing them remotely. If you wish to be extra passive in your enterprise, I’d advocate to start out simply fascinated about constructing the companies that you’ve got on a platform that’s scalable and that’s solely doable you probably have system in place. And also you don’t must be out of the state. You will be as shut as it could possibly get to you, however you simply don’t wish to be the weather that’s the heart of your enterprise.

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 situated? However implementing methods if you end up native as properly I’d suppose provides 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 whenever you’re native since you will be there to hone it. After which when you’ve received it dialed in, you actually open up nearly this world of enlargement. As a result of if you happen to’re not tied to the geographic location of the place your properties are, although you’re native, what’s stopping you from selecting a unique market and increasing your enterprise 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 study pretty shortly that it’s completely not a passive enterprise. However methods help you purchase again that passivity in your enterprise. And so you possibly can nonetheless have a semi-passive enterprise of actual property investing and make it extra passive via using methods. And you then 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 permits you to be the individual that you’re known as to be and never the individual that you must 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 vital, Pasha.

Pasha:
The no BS why got here up when, if you happen to guys really listened to episode 773, it was like I used to be in a really dire scenario, if you’ll. And after that I believed 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 form of following a why, that means why I’m doing all of this or why I wished 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 individuals speaking about how they wished to give up their job or how they wished to have the liberty of monetary dependency on their job, which is nice, don’t get me flawed.
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 truthfully it was a BS why for me as a result of I really like my job. I truthfully do. It wasn’t a giant motivation for me to be above and past and dig deeper into completely different enterprise fashions and attempt to be an entrepreneur. It’s simply a kind of issues that you just wish to make it possible for no matter motive you give you is one thing that 100% aligns with who you’re and what your core values are. And that is a kind of issues that’s form of onerous as a result of there are such a lot of shiny whys on the market as properly that you just may really simply stumble throughout and also you’re like, “Oh, yeah, cool, I need it.” That’s not sufficient. You should have that. It’s not like I wish to have it. You should 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 automotive to drive round. Everyone desires to have a enterprise that generates some huge cash. That’s the facet that you just see on lots of social media. However the second that the rainbows and unicorn go away and there are some alligators on the best way and there are some challenges on the best way, they again out as a result of that doesn’t fulfill their need half.
And that’s the rationale that I all the time advocate to individuals that really attain out to me is that just be sure you have your eyes on the why, why you’re doing this, and it must be so robust. It must strongly align with you in a means that everytime you get up within the morning, you possibly can give it some thought. It’s already in entrance of your eyes. It’s one thing that you just simply can’t disconnect your self from it. It’s not like at some point you’re not within the temper and at some point you’re within the temper. It simply doesn’t work that means. And that’s why I known as it no BS why and it’s actually onerous to get there. I imply it’s nearly, it’s essential to simply dig deeper and deeper and deeper in your self to get there.

Henry:
Sure, I fully agree and I like that you just name it the no BS why as a result of I’d by no means heard it known as that earlier than. However I’ve talked about it completely different with a number of of my different college students and the best way I’ve all the time pictured is individuals all the time 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 individuals actually perceive what they imply. For me, monetary freedom’s not a aim. 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 individual that you’re known as to be, not the particular person you must be for cash. And sometimes whenever you’re the individual that you’re known as to be, you get to influence different individuals.
So your why is often rooted in who you get to be in service of different individuals. And so whenever you’re fascinated about your why, you’re proper, it’s received to be the factor that drives you past the nice days and the unhealthy days. You stated it greatest, you stated, you want it, you want it to occur. So if you happen to’re pondering proper now, I wish to be an actual property investor in order that I will be financially free, that’s nice. Take it a step deeper. If you happen to have been free at present, if you happen to awakened and magically had all of the rental property to provide all of the cashflow you wanted to dwell 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 all the time like, you see that image and you then’re like, “Oh, man, wait. So now I’ve freedom however my household sucks,” or one thing like, “Now I must put all of my undivided consideration to my household.” And you then’re like, “Okay, that is what I want, let’s go for it.” After which there may be nothing that actually 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 individuals dig into that’s who you get to be since you’re free. Lots of people are like, “Nicely, 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 right medical remedy.” These are the issues, these are the whys which are going to drive you thru the troublesome occasions. As a result of in case your why is just rooted in you and what you need, of us, we’re human and we let ourselves down every single day.
You understand how many occasions 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 wish to let down different individuals. 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 individuals discover that why, what drove you, what questions did you must ask your self to hit what that why was?

Pasha:
I believe for me it was a bit bit troublesome as a result of I used to be in a scenario 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 advocate is, one, it’s essential to be brutally trustworthy 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 anyone that is aware of you very properly and ask them that can assist you to dig deeper. It’s extra like interrogation even. You wish to just be sure you get to the core wants that you just wish to go after and it’s one thing that simply makes you a blazing why that then it turns into an engine that it’s essential to harness that power to run your enterprise in your day-to-day life.
However I’d say be brutally trustworthy with your self. If you happen to’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 scenario that they is likely to be left after. It must be tremendous tailor-made about you. So make it possible for it’s 100% personalized primarily based in your life, primarily based in your values in life. It’s good to take a look at different individuals’s why and that’s high-quality, 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 it’s essential to simply dig deeper and deeper and deeper till… While you get there, you realize it. It’s a kind of issues that, whenever 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 trustworthy with your self. He additionally talks about if you wish to be wealthy or why you wish to be wealthy, diving into what meaning. We speak about this rather a lot with individuals. It’s like, what’s the wealth going to do for you? What’s the wealth going to do for the individuals round you? And you then speak about whenever you outline your why, is there one thing that you just didn’t clearly know earlier than? That’s an incredible 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 lift some questions and now you may need some new info that it’s essential to work via so as to determine what that why is.
After which this one, I consider, is massively vital. 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 individuals and assist different individuals. I actually had a bummer name with a tenant proper earlier than this. However understanding that I received to get on right here and share actual property investing with all of you guys and chat with my pal Pasha and have him share his data and knowledge with you has actually lifted me up as a result of my why is rooted in ensuring that I share this information with individuals. So it will get me excited every single day. And so if you happen to reply no to any of those questions, it implies that it’s essential to hold 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 all the things.
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 helpful, it’s simply, I’ve all the time been a prepared, fireplace, goal form 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 very excessive degree, Pasha had this nice system for putting in… Primarily you’re putting in web-enabled cameras, hooking them as much as a cellular 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’ll go check out the property and we don’t must bodily go see the property. And what was big for us is true once we sat down with Pasha about this, we have been about to place a property available on the market 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 save lots of actually simply two hours of driving time per appointment already off the highest. Plus, if you happen to calculate that, and I try this for if I do 10 showings, that’s, what, 20 hours that you just saved in simply drive time.
And so we have been capable of implement this on that property. We confirmed it just about. Nobody ever complained, nobody had an issue with it in any respect. The cameras would activate when individuals would enter the room. So we might know when individuals confirmed up, we might know after they left. The codes, we might 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 are even near us as a result of not solely is it saving drive time, nevertheless it’s saving the time that it takes to really open up the property. And everyone knows as landlords, you set appointments for showings and about half of the individuals present up, a few of them don’t even present up. So that you’ve wasted your time even going to a property and folks simply no present on you. So what an enormous time saver for me. We’re additionally utilizing it to observe our rehab property. So I do know firsthand that a few of these methods have been a lifesaver in my enterprise.
Pasha, let’s speak about, 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 just introduced up was an excellent one. I believe once we have 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 performed just about. So precisely what you talked about, that’s what we applied. All of the cameras, all the net connections, and all of the keypads all collectively. And so they really at the moment are all in several bins. We’ve received seven of those bins that they’re all paired. So all they should do is to simply ship it to anyone, simply plug them to {the electrical} plug after which it’s all going to be on-line. I believe that’s actually one in all my favourite ones. So that you positively 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 kind of issues that you just simply purchase them as soon as and you then hold utilizing them. As you talked about, you don’t must be the individual that drives all the best way there. And tenants like it too, as a result of they didn’t really feel strain. They might go into the unit they usually might take a look at it. My contractors additionally, it allowed us to know who is an effective contractor who just isn’t. If anyone 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 could have 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 linked collectively to unravel an issue for you, which for us it was not losing time and never losing power. And it’s additionally really form of humorous too. Generally 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 performed too.” First they’re all afraid like, who’s speaking to them, after which they discover. It’s really fairly humorous. That’s one in all 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 flawed in our rental properties. For instance, it says you probably have a, let’s say, surge or you probably 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 be in entrance of them. After which on the finish it says, if none of those treatments work, then it’s essential to contact this particular person for that challenge. And that particular person goes to be the plumber, electrician, handyman. After which in fact we’ve got 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 tackle 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 few of the drawback fixing and typically our tenants are literally capable of remedy 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’ll 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 tackle 15% of our upkeep calls with doing one thing like this.
And if it helps, I’m going to make it possible for I ship a template so that you could put it into the aspect notes. However once more, this is rather like a template. You should go in there and see what are the issues which are relevant to your enterprise and you’ll construct one thing there. However that is additionally positively one in all our entrance winners.

Henry:
That is actually cool, Pasha. And so what I wish to do is add a bit context right here for individuals who are listening or driving and may’t see, after which I wish to make it possible for I’m fascinated about it in the precise means. So what Pasha’s received up here’s a spreadsheet, and in that spreadsheet he’s damaged down a class and I consider the classes are the trades. And we are saying classes, what we’re speaking about is points. So if a tenant has a difficulty, 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 kind of, then on this spreadsheet you possibly can comply with 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 problem. After which as soon as you discover the subcategory of that challenge, proper subsequent to that subcategory is the treatment or the remedy for that drawback. And so then you possibly can 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 anyone on the market to determine what the precise drawback is and get it mounted.
That is like whenever you name the cable firm as a result of your web’s out they usually’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 just took the time to fill out on the entrance aspect with what points you usually see, after which the way you usually remedy these issues, after which who to contact if this remedy doesn’t work. And what you’ve performed is you’ve given this spreadsheet primarily 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 comply with 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 possibly can construct it your self or in order for you, once more, I’m going to verify 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 comply with 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 folks which are 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 individuals say, “I don’t wish to be a landlord as a result of I don’t wish to cope with tenants and bogs.” And also you simply actually confirmed me a spreadsheet that offers with the tenants and bogs for you. So it’s not that large of a deal, of us. Are you able to give us an instance or breakdown indirectly, how a lot time or cash is a system like this saving you and your enterprise?

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

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

Pasha:
We acquired about 218 tickets or calls within the final 12 months for our properties as a result of we really form of expanded and all of them are addressed with my tenants. Now there are some examples which are one-offs which are actually bizarre and it means, for instance, we had a thunderstorm. You and I are each residing 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 kind 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 problem, it’s essential to name this particular person.” However then I constructed it into my system so if it occurs once more, then I don’t should 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:
Right.

Henry:
I’d say the system works.

Pasha:
Thanks. Or perhaps 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 comfortable, 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 comfortable, when your renters are comfortable, the possibilities of them staying with you is extra. So your emptiness really begins going decrease as a result of they know that each time they’ve a difficulty, it’s going to be addressed instantly. They don’t must name the tenant, name the owner, sorry, after which landlord calls the seller and going backwards and forwards. So that is simply a kind of issues that it helps when you could have all the things 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, straightforward 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 incredible instance for individuals to see that methods don’t must be loopy costly and that they’ll 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 individuals actually wish to know is what are the 5 most vital steps for constructing any passive system? The 5 steps we’ve got listed here are inputs, processes, outputs, suggestions, and the atmosphere. What the heck does that imply? Pasha, give us an instance. So what are the inputs for a system?

Pasha:
So if you consider this, all of the methods have these enter course of, output piece. So enter will be something truthfully, no matter you wish to get into so that you just’d be capable of convert it into one thing else. So the enter could possibly be any knowledge level that you could find. For instance, within the instance that I confirmed, the enter goes to be the issue, the problem that the tenants are going through, proper? It’s simply the info level on the problem. 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 together with your core enterprise challenge. You don’t wish to have additional info coming in, you need it to be proper, crisp, addressing the precise drawback that you just’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 speak about 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 move chart to get to a sure output. And this instance, for instance, it’s going to be the treatment part, which is whenever you stroll your tenant via the problems that they’ve and now you wish to mainly get it mounted. 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 unique 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 accustomed to 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 interchange you if you wish to construct a system to interchange you. Does that make sense? That is the place you’d wish to have your data extracted from the individual that is an professional, 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 comply with these step-by-step so that it’s going to move via that to the following 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 must have some extent which mainly desires to present you what you want. Now typically the output of a system will be enter for the following system and this occurs on a regular basis, particularly if you wish to have a sequence of system and you probably have a posh enterprise mannequin that you just wish to put all the things collectively. On this instance, the output goes to be a walkthrough that’s already supplied and ensuring that the issue is addressed. So it may be in several codecs, it may be within the format of a data repository. Data repository is mainly the place you set your entire info which are actually tangible and helpful to you.
Within the instance of lead era, it’s going to be the listing of those who… So, let’s say, you begin with 1000 individuals, you could have a course of that breaks it right down to, let’s say, an inventory of 20. And now that 20 goes to be the output of your first system. That’s going to be individuals which are extra more likely to be prepared to promote their house. Now you could have 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 like. And it may be in several codecs and it may be repeatable.

Henry:
It appears like your outputs can doubtlessly be in several 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 mounted and one output is likely to be that you just needed to name an expert 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 could have a brand new subcategory so as to add to the spreadsheet so that you just don’t have to unravel that drawback once more.

Pasha:
That’s 100% proper. In order that output can feed to completely different methods. One in every of them is the fee system. It’s a feed to a unique one, which is like, now the job is finished, 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 verify 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’ve got, which mainly is the following system which is the suggestions.

Henry:
Yeah, let’s speak about that.

Pasha:
So suggestions… Okay, so the enter course of output is kind of widespread. I’d say that even in large corporates when it’s constructed, when the enter is given and when the output is taken, all people’s like, “Hallelujah, we received there. That’s the system we wish.” And, man, I see this over and over, which they simply depart it like that. They’re like, “Okay, cool, the system is working.” After which they simply go on to the following one. The issue is you construct a system nevertheless it’s not a sustainable system as a result of because the context modifications, because the enter modifications, because the enterprise world modifications, your system must be alert, it wants to know what’s taking place so it could possibly regulate itself.
So 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 comfortable 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 12 months it would work completely, however the second 12 months it would really not work very well and it’s going to lift a purple flag that enables us to return in there, dig into our system and see what was the problem, what precipitated that particular person to not be comfortable about it. After which we stroll it again after which we regulate our processes, we regulate our enter to make it possible for subsequent time we will tackle this. So the suggestions is mainly a loop that goes out of your output to the method and to the enter to make it possible for 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 modifications to a dynamic system that’s altering or evolving as your enterprise evolves. So with the instance you gave, you measure your tenants, mainly you measure in the event that they’re happy with the work that’s being performed. In case you are nice, you state the system retains doing what it’s doing. If you happen to’re getting lots of suggestions that tenants aren’t comfortable, then you possibly can dig deeper into that suggestions after which regulate your system to handle these suggestions points after which proceed to guage and make modifications 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 got a system that does the suggestions for you.

Pasha:
I really like that. I really like that. You realize I do. No, yeah, completely. Now you wish to make it possible for, once more, that system, that suggestions loop can be working the best way that you really want. This is sort of a loop, it’s like a spiral, you possibly can simply go right 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 last vacation spot. Simply put some KPI, be sure this KPI is nice. If you would like, you possibly can all the time, as Henry talked about, construct one other system in your KPI. However on the finish of the day you wish to make it possible for this isn’t a one linear line. It really goes again and it feeds itself so it stays related. As a result of if you happen to try this, you’re going to must spend much less time coming again to the issues that aren’t being addressed by your methods.

Henry:
Incredible. So to recap, we received the 5 primary elements of a system is the enter. That’s the drawback that you just feed into the system. You’ve received the method, that’s primarily the way you’re fixing the issue or the way you’re addressing that challenge. You’ve received your output, which will be the outcomes of that course of and that may be a constructive or a detrimental outcome. After which you may make changes to your course of via suggestions and measuring the outcomes. After which atmosphere, we didn’t contact on atmosphere, did we?

Pasha:
The atmosphere is mainly the context that your system is working in and that’s just like the final element that you really want to pay attention to. Mainly on this instance, once more, if this technique 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 unique context, you’re in a unique context for enter, you’re in a unique context for processes, some litigations apply to it, some litigations to the output and that’s the place you need to pay attention to that, return in there and regulate your methods to the context that they’re working in to make it possible for 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 appear to be one thing all people needs to 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 enterprise that perhaps you didn’t count on.

Pasha:
I believe one in all them is we have been really in Hawaii and my condo received 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 unhealthy. I didn’t even discover. It was simply on my weekly report that I get from the digital assistant of what’s occurring as a result of I all the time wish to know what’s occurring. And it was simply addressed routinely. The issue raised, they known as, there’s an emergency degree on that system, it was a excessive emergency. They dispatched anyone 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. But it surely was addressed within the first couple of hours and it was fully working high-quality, which, to me, it was an incredible win as a result of it confirmed me that it could possibly work particularly after I wanted it to.

Henry:
Yeah, man, that’s an incredible instance since you’re proper, nobody desires the decision after they’re on trip that one in all their models flooded. And it all the time looks like that’s whenever you get these calls is whenever you’re out having time. In order that’s cool that your system simply form of dealt with it for you and saved you every kind of cash and did precisely what it was purported to do. That’s superb. Thanks for sharing that.
All proper, thanks, Pasha, for giving us this breakdown of methods. There are some nice info that you just gave us as a result of, once more, methods, I like to consider it and also you form of put this in my head, it’s that we’re all already utilizing methods, proper? A system is only a course of you could have in your enterprise and lots of the occasions 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 are vital to you or the issues which are taking probably the most of your time that you just 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’ll 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 wished so as to add actual fast is usually it’s such as you won’t be the individual that is the professional in that space and that’s nonetheless high-quality. An excellent instance is like, you and I’ve been pals 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 fascinated 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 probably 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 known as it LA, so native assistant, that picks it up, processes all of the mails. The direct mails are out, all of the codecs, all the things 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 needs to 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 in order for you to try that spreadsheet template, you possibly can go to biggerpockets.com/assets the place Pasha has been gracious sufficient to share that with us. And so let the individuals know the place they’ll discover you, Mr. Pasha.

Pasha:
You will discover me on Instagram, @techierealestate, T-E-C-H-I-E, actual property, all one phrase. And likewise the web site is 5dayscourse.com. These are the 2 locations that you could find me.

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

Pasha:
Thanks, sir. Have one.