117. Tips for CRUSHING CapEx from the Institutional Level! with Dan Milinazzo

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00:00:00:17 – 00:00:27:00

Kyle

What’s up, guys? Welcome to episode 117 of the KCREatingwealth Podcast. I am your host, Kyle Curtin. I am a co GP specializing in investor relations and capital raising for multifamily sponsors. Today we get the great pleasure of chatting with Dan Milinazzo, the extraordinary owner and operator of real value ventures. We are super excited to have him on today.

00:00:27:02 – 00:00:30:12

Kyle

Dan, what’s going on, my man? How the heck are you?

00:00:30:15 – 00:00:33:03

Dan

Fantastic. Happy to be here, buddy. How you doing?

00:00:33:05 – 00:00:58:14

Kyle

Oh, I’m doing swell, man. Super excited to be able to sit down with you today and and jump into your story, man. And what you got going on now. And. Yeah, super excited to jump in. So to kind of get us started, you know, tell us a little bit about your backstory, you know, from kind of the humble beginnings to where you are now, what’s kind of going on, you know, for the the near future.

00:00:58:16 – 00:01:00:09

Kyle

The floor is yours.

00:01:00:11 – 00:01:28:04

Dan

Sure. Well, I grew up in in construction. My father owned and operated a building envelope business. So roofing, siding, windows, things like that. So I grew up picking up shingles in slate when I was a little boy, picking up nails used to get paid by the nails. That was that was a bit different back then. And then, yeah, I went to school, fell in love with architecture and CAD design, things like that.

00:01:28:06 – 00:01:53:12

Dan

So I decided to pursue architecture in college. And during that education, I had the ability to kind of co-op with an architect and building envelope consulting company. And I realized that was more figure it out engineering mindset than drawing really good pictures. So I kind of shied away from architecture and focused more on the engineering side of that equation.

00:01:53:14 – 00:02:17:28

Dan

And then after I graduated, I was with that engineering firm for almost a decade and put in quite a bit of work there, doing a lot of work in the condo world. And then I went to work for a large multifamily re national, and I supported all their construction up in the Northeast and that’s where I eventually got my Masters of Construction Management.

00:02:18:00 – 00:02:43:12

Dan

So along the years, I’ve worn a lot of the hats, I’ve I’ve swung the hammer, I’ve worked with a couple of GC actually did work with a local GC that’s in the building envelope arena for a couple of years, and I do projects on my own and I’ve done some flip work, things like that. But yeah, I’d like to say I’m pretty handy, so I’ve, I’ve been on the construction side, on the architecture side, on the engineering side, on the owner side.

00:02:43:15 – 00:03:01:06

Dan

I do own and invest in multifamily myself. I have a couple of units locally and always looking to branch that out and, you know, get into other syndications and, you know, get a little bit more passive on some. But I also like the the active component of some of these deals. So it’s kind of it in a nutshell.

00:03:01:08 – 00:03:35:16

Kyle

Yeah, no, absolutely, Man, I absolutely love it. You know and it’s I always thought your story was pretty interesting, especially from a couple different angles, right. Of like seeing the investing world from multiple different ways from being an investor yourself, you know, with some, some smaller Maltese and stuff to a little bit bigger Maltese. You know as well as working in that like the space and seeing it from a drastically different angle, you know, in the construction type of lens.

00:03:35:19 – 00:03:56:15

Kyle

Yeah, I think it’s extremely cool, man. You know what I mean? And tell us a little bit about like in the world’s tallest kind of what, like a tall. It’s kind of like what you did, I guess, like the most often. Like, well, we’re kind of like some of the, like, key, like most common, like, like a day to day.

00:03:56:15 – 00:04:00:24

Kyle

I guess you could kind of say, okay, just generally speaking, I guess.

00:04:00:27 – 00:04:25:17

Dan

Yeah, day to day to day was a bit different because, I mean, I was supporting, I think at at the max, I want to say about 6000 units spread out across 19 or maybe 20 communities up in the Boston area. For the most part. I did do some work down in like Maryland and supported some other work down in like Florida, things like that.

00:04:25:17 – 00:04:49:14

Dan

The company was national, you know what I mean? So we had a pretty good footprint. But my role was everything CapEx, everything below the line would kind of fall to me. And sometimes that translated into property management and maintenance teams on the property, not having the budget to tackle some of their maintenance needs. So unfortunately, those maintenance needs gets deferred.

00:04:49:15 – 00:05:07:06

Dan

I’m sure you guys have dealt with, you know, listening to the term deferred maintenance, it’s it’s not a fun thing because when the maintenance gets deferred enough, it eventually falls below the line, turns into a capital need, so it falls off the expense side of the equation. But now it’s a capital need and you need to take take care of it.

00:05:07:08 – 00:05:31:09

Dan

Otherwise you’ll be chasing expenses forever. So it’s it’s a little bit hard there. But I mean, for all of these assets, you know, again, I was supporting, you know, 18 to 20 different communities in the greater Boston region, and they all had very, very different needs. I mean, we had class A brand new out of the ground buildings and we had some C class properties, some affordable properties, things like that.

00:05:31:09 – 00:05:58:28

Dan

And very, very different. So every property had its own set of challenges and it was really presenting the right projects that needed to be done at the right time. And Y so part of it was on a regular basis on a like an annual and a continually rolling basis. Well, I’d have to inspect these properties and keep a keep a log updated on what the capital needs are for this community.

00:05:58:28 – 00:06:21:16

Dan

So every couple of years we do a deep dive, pick a property condition assessment or a Sienna, a capital needs assessment, and we try to lay out the biggest capital projects that should be considered at each individual property. And some of these properties I’d be putting, Hey, you need a $50,000 garage door in the next year or two.

00:06:21:18 – 00:07:03:12

Dan

But then in the same breath I’d be saying, Yeah, at this other community, which is ten times the size you need, $2 million worth of roofing so that the range of projects was was definitely different and the class of projects very different. But as portfolio, I had to look at that across the plate because it was all one ownership and kind of look at it in a way of, you know, I know that the number one project at this Class eight property might be a $50,000 garage door, but the number one project need at this 900 unit complex might be brand new pavement.

00:07:03:15 – 00:07:27:00

Dan

And I’d have to kind of strategize where the money made sense to go. So there was a lot of constant moving and then just out of the blue you’d get a random insurance loss. Catastrophic loss would throw the major wrench right in the works and it would be an all hands on deck go deal with a massive flood or, you know, a an unfortunate fire, things like that.

00:07:27:00 – 00:07:44:24

Dan

I mean, we’ve had water mains break in the middle of a creek bed in the middle of winter and then having to redirect a creek so that we could get to this pipe, which also happened to run under the corner of a building. It definitely had its own challenges for sure. So it was never the same thing day to day.

00:07:44:27 – 00:07:46:27

Dan

So it definitely kept me on my toes.

00:07:47:00 – 00:08:15:03

Kyle

Yeah, yeah. No, I can definitely imagine, man. You know what I mean? And I think it’s it’s incredible. Like how, how unique it is. Like just seeing that from different perspectives and that actually kind of brings me to a question that I did want to ask you is like when you first buy a property right or like the first time that, you know, a syndication is, you know, you close, it’s acquired.

00:08:15:05 – 00:08:46:29

Kyle

Like how do you kind of, you know, like step on site, I guess, kind of like theoretically speaking of like, all right. Like what’s kind of like the first step to figuring out like, what this CapEx plan looks like in like, what are kind of like, I guess kind of like what’s your I guess, like standard operating procedure in a way of figuring out like what the immediate, like urgent items are versus maybe things that you can kind of like spaced out like how do you kind of like navigate something like that?

00:08:47:02 – 00:09:09:09

Dan

So for that, you really need to understand the business plan a little bit, right? So the business plan for so I supported a lot of acquisitions in due diligence and disposition. Due diligence as well. And it sounds funny disposition, due diligence, but I can dive into that as well. But I mean, I supported over $1,000,000,000 worth of transactions in the multi-family real estate space.

00:09:09:11 – 00:09:31:07

Dan

And when you look at a brand new acquisition opportunity, it’s it’s hard because during the due diligence phase, a lot of flags will come up. I mean, just like when you buy a single family home, you get the home inspection and the home inspector lists everything, right? Like, oh, this there’s a crack in the baseboard. And it’s like, yeah, that shouldn’t kill your deal, but it’s something to be aware of, right?

00:09:31:07 – 00:09:56:14

Dan

So my job was identify everything. And so I would bring a team with me to do the due diligence work and I would gather all that data and I would look at it all and it’s like, All right, in a vacuum, you know, hey, what’s the, let’s say, the worst problem, right? Let’s say the property is is experiencing active leaks and damage and poor customer satisfaction from a roof.

00:09:56:14 – 00:10:19:05

Dan

Right. That kind of puts that on the high end of, hey, you really need to take care of this. But at the same time, let’s say that that that leak is maybe in a trash room or a backup house utility space. It doesn’t necessarily get the same type of attention that you would think it would. But it’s a it’s a mix of what is your business model?

00:10:19:05 – 00:10:36:08

Dan

What’s your business plan? Right. If you’re going in and you’re going to redevelop you, going to rebrand a property, which was a lot of what we did, we would go in there and kind of scratch off everything and say, this is this is going to be part of our brand. So we have to apply our brand everything. And we had a certain model that we do.

00:10:36:10 – 00:10:58:24

Dan

So knowing the operator, the owner and the operators ultimate goal with this property, whether it’s a we just got to reposition it and get rid of it in three years or this is a long term long term hold core property for us is going to definitely change what I’d recommend. Right? So it’s like if it’s a short term hold, then it’s a what are the the the loudest, Right.

00:10:58:24 – 00:11:23:04

Dan

What’s the squeaky wheel? That’s where you want to put the attention. But if it’s a long term hold for you, then customer satisfaction is actually going to do a lot more in the driving of what projects you tackle first. Because ultimately, if customers aren’t satisfied, you’re you’re lost. The lease is going to be increased like incredible. You’re going to be like way off market because Yelp has a lot of effect.

00:11:23:04 – 00:11:46:08

Dan

Google reviews have a lot of effect. So those are the type of things you’re watching. Then you have to weigh it. You have to weigh it in, right? So it’s hard to say that there’s a perfect formula without knowing an owner and operator business plan on what their what their position is on this property and whether it’s a quick turn it and get it capitalized again or we’re going to hang on to this for for forever.

00:11:46:10 – 00:11:53:09

Dan

You know, we got to look at it very differently and put the money upfront into the projects to have the best bang for the buck, you know?

00:11:53:12 – 00:12:22:09

Kyle

Gotcha. I think it makes a lot of sense, man. And I really like that that take on it, you know, I mean, even like, yeah, like just kind of like taking everything into account and kind of figuring out what the, the most effective and applicable use of, you know, like the reserve capital or whatever it is, you know, in comparison to like what the plan is like the, the length, like the forecasted length of the whole period, just what the plan is overall.

00:12:22:09 – 00:12:40:10

Kyle

You know, I really like that man. It makes a lot of sense, you know, I mean, even like even thinking about it in a on the complete opposite end of the spectrum of like, you know, if you just buy like a two family or a three family or something and it’s like, all right, you know, like I’m going to hold it for like, you know, 20 years or, you know, ten years, whatever it is.

00:12:40:13 – 00:12:54:17

Kyle

And like how you navigate that on a much like a drastically smaller lens, you know, and comparing that to like, you know, a humongous like skyscraper like piece, You know what I mean? It’s it’s cool. It’s a really.

00:12:54:24 – 00:13:19:24

Dan

When you’re dealing with those those big type of projects, too, there are things that you might not necessarily fully understand. You know, I mean, you get into a property that that is a really big property and what might not be like in your face all the time, right? It could be something that’s just a ticking time bomb. You know, I can’t tell you how many times we walked into these beautiful big properties and you realize that there are things in the background happening.

00:13:20:02 – 00:13:40:15

Dan

But hey, as long as they’re still performing, we’re fine. And then you find out your your domestic tank just went in that domestic tank, support 100 units, you know what I mean? Like, that’s not good When you’re domestic, supply gets impacted by that. It’s not a quick fix, you know what I mean? And it has such a long term impact on your customer.

00:13:40:17 – 00:14:05:19

Dan

So you have to be aware of if like you have to forecast out a little bit of, hey, if we don’t do this project, what’s the worst that could happen? Right? And then, you know, weigh that against all the other things. So it’s it’s it’s a really extreme example of like a cost benefit analysis. But you have to do it quickly in your head because you don’t have six months to kind of wrap your head around all the different assessments and all the different things you could do.

00:14:05:21 – 00:14:30:21

Dan

But it’s similar in a way to doing like reserve study inspections for condominiums, right? So I’ve done a lot of reserve studies where these condominiums might not be 300 units, but they still have a lot to deal with because there’s a lot of common area components, whether it’s pavement, roofing, shared siding, things like that, or if it’s shared utility systems that you have to tackle.

00:14:30:23 – 00:14:57:21

Dan

You have to understand what the big picture is and what happens if something goes down, but also lay out all the options, because what a lot of people don’t don’t really take into account is if we don’t do the capital project today, we can just do it in three, five years. But it’s like, yeah, but are you actually tracking enough on the cash flow side and putting enough away in reserves to be able to tackle that?

00:14:57:24 – 00:15:30:01

Dan

In most cases that might not be the situation. So if you’re not cash flowing enough and if you don’t put away enough reserves, number one, your your investors are going to get hurt by that. Right. Because if you’re either over banking in your reserves, your investors aren’t getting the payout that maybe they want or if you’re not banking anything in reserves, the last thing you want to do is put a capital call into your investor and say, Hey, you know how when we bought this property there was $3 million worth of initial CapEx we were going to do, but we only took off 2 million while that other million dollars we didn’t do on day

00:15:30:01 – 00:15:46:21

Dan

one, we thought we’d be able to make it up in cash flow over the next 5 to 10 years. We’re going to come up a million short, like, you know, what do you do with that point? You have to recapitalize it, right? So whether you refinance it, you sell it, you do something like that, and you make it the next person’s the next buyer’s problem.

00:15:46:21 – 00:16:03:21

Dan

And then the million dollars worth of CapEx that you didn’t do turns into a million and a half or $2 million on somebody else’s spreadsheet. When they underwrite it, they’re going to underwrite it much higher than you underwrote it. So you have to stay you have to stay in tune with any projects that you don’t decide to do.

00:16:03:24 – 00:16:25:13

Dan

You have to watch those projects because if it’s a commodity that is volatile, right? So like roofing products, petroleum based products, things like that, your roof today might cost you $1,000,000. But if you decide, you know what, I’m not going to do it, and then the petroleum commodity like skyrockets or that million dollar roof is now going to cost you $2 million in a year.

00:16:25:15 – 00:16:41:28

Dan

You know, I mean, that’s not unheard of, especially now with with what everybody’s seen with COVID, with the material prices skyrocketing. I mean, I was helping a buddy price up a project the other day. Again, this is kind of where it’s not big multifamily stuff. It’s a friend of mine that was doing a project and he’s like, Hey, help me budget this.

00:16:41:28 – 00:17:00:03

Dan

And I’m like, Yeah, I mean, I know I was paying around like $0.70 a square foot a couple of years ago for this, but I haven’t really done that work in a while. Let me just double check it on you. But you might want to carry a little bit more like maybe carry a buck. And when I actually ran the numbers and I pulled up all this in all, Mike, it’s a buck 30.

00:17:00:05 – 00:17:18:00

Dan

And he’s like, How long ago was the 70? And I’m like, Yeah, that was maybe three years ago. And it’s like in three years material price on this one project doubled and it’s like, and you can’t make that up, you know what I mean? Like, you can’t necessarily properly prepare for that unless you’re watching these things on a regular basis.

00:17:18:02 – 00:17:54:09

Kyle

Yeah, that’s wild, man. And it’s it’s incredibly interesting to me. Like how much like, like how that affects like, everybody throughout the entire like, ecosystem, like, in the entire environment, right? Of like, you know, not not having somebody like, on your team, you know, that that has like our particular knowledge especially, you know, like as deep as the knowledge of yours, you know, and stuff like that, to be able to see some of those things coming down the pipeline like, you know, pretty far away, you know what I mean?

00:17:54:09 – 00:18:12:17

Kyle

And how that can impact exactly like you said, like, oh, you know, like now this thing’s an extra, you know, like $0.50 a square foot and you need, like, you know, a ton of square feet or whatever it is now there’s like a huge unexpected expense. Well, that’s going to keep going, like up the funnel and, you know, affect like returns.

00:18:12:17 – 00:18:37:13

Kyle

Hopefully there’s not a capital call there. If there is a capital colony, your investors get past your investors don’t come back like it’s funny like it’s well, it’s not funny but like it’s it’s interesting how it it all like spiderwebs like from the bottom you know what I mean of like having just an incredibly deep understanding of the actual physical construction aspect and the structure and the plan that surrounds that and just how that affects everybody as a whole.

00:18:37:19 – 00:18:43:05

Kyle

Down to the passive investors on the other side of that, you know, it’s friggin incredible, man.

00:18:43:07 – 00:19:08:12

Dan

Right? And that’s why you have to really have a good partnership with the sponsors of a deal or be on that sponsorship team so that you can you’re not going to make the final decision, you know what I mean? One person I can tell you is on blue in the face. You should really do this project. And regardless of my experience or whatever, there might be other factors at play, which is why I don’t do multifamily investing on my own, you know what I mean?

00:19:08:12 – 00:19:32:03

Dan

So there’s there are other experts involved in the deal that are watching other pieces of the project and other pieces of the business plan. And you just have to be open and aware of what’s happening there, because I’ve been in scenarios and I’ve known plenty of people like this that are so bullheaded when it comes to this is the project you need to do and they don’t care about anything else.

00:19:32:03 – 00:19:53:21

Dan

And then you end up talking to the finance guy who’s on the sponsorship team and they’re like, Look, we’re getting debt at this percent. We can raise this much equity. And the way that this works out our best bang for the buck is maybe let’s not do an entire like multimillion dollar roof renovation, but let’s go ahead and do like a 20% upgrade of the units.

00:19:53:21 – 00:20:17:00

Dan

Let’s do a kitchen and bath upgrade and start to push the rents up. And that will hopefully, you know, either put us in a better position to sell down the road or it will boost our cash flows enough to fund pieces of that. And then you have to wrap your head around how can we phase it facing big projects is a very big it’s an opportunity, right?

00:20:17:00 – 00:20:47:01

Dan

So you don’t have to necessarily do it all at one time. So you have a a $10 million roof project. The chances that every square inch of that $10 million roof needs to go day one is probably unlikely. So you need to know what makes sense to strategically phase out a project like that so that you don’t bite off more than you can chew, or you don’t leave yourself in a position where you have to undo work you’ve already done in order to tie in a new system or anything like that.

00:20:47:07 – 00:21:09:21

Dan

And that’s true for everything, whether it’s, you know, whether it’s an electrical upgrade for an entire building or, you know, pavement. You know, you can you have to look at things as it doesn’t have to be the full bow, right? But you just have to understand, if you do 50% of $1,000,000 job today, it might cost you $600,000.

00:21:09:23 – 00:21:27:17

Dan

And you ask why is it not half the price? And it’s like, well, there are certain mobilization costs and certain costs that are just inherent with running a project of that size that get baked into that number so that you can’t just divide that number in half. You could divide the scope in half, but your number might not divide perfectly in half.

00:21:27:19 – 00:21:58:09

Dan

And then when you go to do the second half next year, now it’s 750. So now you just track $1,000,000 job into a $1.3 million, $1.4 million job, and you just have to be able to prepare yourself for what that might look like. And I mean, I know it very well because one of the projects that I, I just recently ran through was it was a new acquisition and it was it was supposed to be $1,000,000 window repair project.

00:21:58:11 – 00:22:22:03

Dan

And as we dug into it a little bit, it turned into like a $7 million window replacement project. And obviously somebody missed the boat there. Right? So the the experts in the report that we had, the executive memo was pushing repair, repair, repair. And, you know, during the conversation, I you know, I presented it as as well as I could that we need to replace these windows.

00:22:22:03 – 00:22:39:29

Dan

But it didn’t work in the underwriting. It didn’t look very good. And it’s like, all right, well, then we should really carry a little bit more because the repairs probably not going to be the best approach. These are old windows anyway, and you don’t really want to spend million $2 million repairing 20 year old windows. You should maybe things out.

00:22:40:01 – 00:22:58:11

Dan

Let’s do a $2 million portion of replacement. You know what I mean? And let’s see how far that can stretch. And then it was, okay, well, how many more can we do if we can really like get some really good financing options for this, whether it’s local grants, you know what I mean? A lot of communities have grants when you do an exterior work.

00:22:58:14 – 00:23:19:20

Dan

So if you have somebody paying attention to that side of the equation, they can go and they can apply for grants. And next thing you know, your $7 Million Window Replacement Project that you only budgeted $2 million because you thought it was a repair project. There’s a $5 million delta there that you know what, let’s do $2 million worth of replacements on the worst $2 million.

00:23:19:20 – 00:23:38:18

Dan

And it’s not pick and choose. Right. You have to be strategic about whether it’s a stack of Windows or whether it’s an entire floor of windows, depending on what you need to access and things like that. And then whatever’s left, can you go for certain grants and can you go for certain subsidized support and and do those projects?

00:23:38:21 – 00:23:48:06

Dan

And especially if it’s if it’s a low income property, there’s a lot of government assistance on projects like that, as long as it’s approved and presented in the right way.

00:23:48:09 – 00:24:13:07

Kyle

Wow. That’s incredible, man. It really is. You know, like and it’s so interesting, like, how how like, like, I guess all the, like the facets of that, you know, inside of, you know, something that could be like a 5 to 7 to like ten year project. Like all, like the the strategizing and like, you know, and you know, kind of like, like testing things out and stuff like that.

00:24:13:07 – 00:24:36:07

Kyle

Like you just mentioned what, you know, what that window example of like just being strategic like, of like how much that you’re allocating towards something like that. You know, is it like the best situation for what’s going on? Is it possible to be able to test out, you know, that type of thing, you know, see how things go and then be able to like carry that on on in different phases and stuff like that?

00:24:36:09 – 00:24:40:25

Kyle

That’s that’s really cool stuff, man. It’s not. Yeah. So I didn’t.

00:24:40:27 – 00:24:56:06

Dan

Really take the big picture stuff, but there’s a lot of there’s a lot of smaller kind of more palatable pieces of the physical asset management in the asset management in general that, that come into play on a regular basis as well.

00:24:56:09 – 00:25:19:06

Kyle

Yeah, yeah, yeah. No I love, I mean I definitely have some more questions for you than I do. I do want to ask you about your company though, and like kind of how you got started, like what you guys do. I feel like it’s a nice transition from like what we were just talking about as well as, you know, kind of the the following, you know, kind of questions that I have for you and what is our vibe, man?

00:25:19:06 – 00:25:22:26

Kyle

I’d love to to tell it. Tell everybody, you know.

00:25:22:28 – 00:26:12:15

Dan

Yeah. So real value ventures, it’s actually a company I’ve had for, for a while where I, you know, outside of working in the big national multifamily space, was I was pursuing some multifamily acquisitions on my own and consulting and supporting other investors in the space. So the mission now is to really to support large multifamily owners scale their operation because what I’m what I’m seeing a lot in the space, especially over the last couple of years, is a wave of owner operators and sponsors that scaled so fast that they don’t have the infrastructure in place to support their continued growth and really help solidify their foundation.

00:26:12:15 – 00:26:37:15

Dan

You know what I mean? So our mission now is to kind of take some of that stress off the plate of owner operators that are stuck in the grind of asset management, and they really just want to go out and find another deal. And maybe they don’t speak the language of the contractor or they can’t really negotiate the right change orders because they don’t they don’t know what’s legitimate and what’s not right.

00:26:37:15 – 00:27:03:18

Dan

And so there’s been this this upswell of of investors that were very well protected from mistakes because the market just buried all of it. Right. So you can make a big mistake. And the next thing you know, you’re raising rents 25%. It’s like, yeah, what mistake? You know, something like you don’t do it. So my goal is to prevent people from feeling that pain too late.

00:27:03:20 – 00:27:33:25

Dan

And companies that are growing, but they’re not big enough to to really bring in an entire in-house construction team to support those endeavors. I can kind of plug into those systems, educate, navigate, help, consult and guide them on that path. And it can be as simple as like scopes and specifications. You know, a lot of a lot of the scaling owner and operators are used to having handshake deals.

00:27:33:25 – 00:27:58:07

Dan

It’s if they’re flipping a six family, maybe you don’t write a full blown contract for that. But when you’re now dealing with 600 units, you need to bring a certain level of professionalism to the table because your expectations are going to be much higher. And what might slip on a six family could end up costing you and your investors multiples of of a loss.

00:27:58:07 – 00:28:17:25

Dan

You know what I mean? And you want to protect yourself from that. So it’s a different level of sophistication when you’re running big projects and scaling to that size and you can’t run those projects like you would a six family foot or something like that. So sometimes you just need guidance on what needs to be done and how best to do it.

00:28:17:28 – 00:28:38:04

Dan

So you need somebody to write the instruction manual for you. So we can support with specifications and scope writing to kind of lay it all out so that all of your contractors are bidding apples to apples. Everyone’s looking at the same instruction manual and they’re going to tell you what it’s going to cost. And then even more, everyone’s bidding it hopefully on your bid form.

00:28:38:12 – 00:29:05:06

Dan

Whenever I did a project in is coming through on my bid form so that I expect the bid to be broken out in a certain way. Right. I want to see, you know, five line items. I want you to break your price down into these five chunks so that when I compare you to your three competitors on this project, I can see line by line who’s maybe not sure what they’re doing and who is a little, you know, overzealous on on the project.

00:29:05:08 – 00:29:31:11

Dan

And then the next piece from that is, is acting as an owner’s rep. Right? So let’s say you have your project underway, but you know, you just don’t have the time to monitor the project because you have other things going on. You’re trying to buy the next deal or something like that. So, you know, we can step in as an owner’s rep service where we stand between the owner and the contractor or the owner and the owner’s project management team and kind of help bridge that gap.

00:29:31:14 – 00:30:12:01

Dan

Right At the end of the day, our job is to advocate for and represent the owner and protect the owner’s interests. And the best part is, is we’re all a bilingual we can speak the language of the owner because we also know investing and we can speak the language of contractors because I own plenty of tools and I’ve got stuff on my own that I can I can bridge that gap better than some owner operators so that that then leads into the next piece of it, which is like Owners Project project management, which is a little bit more hands on, it’s more support in writing the contracts and managing the day to day, or at

00:30:12:01 – 00:30:35:24

Dan

least kind of laying out the groundwork for the day to day management, whether it’s a site team that’s involved, but kind of building the expectations and checking in and holding everyone accountable along the way. And then that last piece that I mentioned earlier is the the long term physical asset management, where that’s more of a it’s not like a simple quick hit, like a spec in a scope.

00:30:35:24 – 00:30:56:05

Dan

I can write a spec in a scope, give it to you and we could never see each other again. Hopefully it’s not the case, but when you’re on the asset management side, it’s not a snapshot, right? You can’t be a successful asset manager by taking a snapshot. It is a constant evolution in the business needs, in the community, needs in everything.

00:30:56:07 – 00:31:16:15

Dan

So as the financial and economic world changes, your business plan may change. And do you have somebody that can translate that into what it means for your physical asset? Like maybe you don’t do as big of an update on your property this year, but maybe spread it out a little bit more or all of a sudden, I mean, there was a day I don’t know what the day was.

00:31:16:15 – 00:31:37:29

Dan

It’s not on my calendar, but there was a day in history where all of a sudden renters demanded in unit laundry. Right. And I can’t tell you, like of all the communities that I supported in the past years, a small percentage of them in the past decade, like when I started doing this multifamily stuff, a small percentage of them had in unit laundry.

00:31:38:02 – 00:31:58:29

Dan

And then fast forward a decade, a very small percentage of these properties did not have in unit laundry, you know what I mean? Because it became an expectation of the market. And if you’re not aware and you’re not tied into the property in the plan, long term, you’ll miss that boat and then you’re making a knee jerk reaction and maybe it’ll cost you more in the long run.

00:31:58:29 – 00:32:22:27

Kyle

So I am. That’s wild, man. That’s that’s so valuable, man. Like it’s, Oh, my goodness. And that’s you’re totally right, man. And I can speak to, to the washer dryer thing from personal experience because I’m trying to rent the unit without one on site right now. And I haven’t gotten any bites. So I can definitely, definitely hear you there in a different way.

00:32:23:00 – 00:33:06:03

Kyle

So yeah, I think that’s an that’s incredible, man. And one thing that I did want to bring up is like, how do you navigate the dynamic of, you know, kind of like how much I guess I’m trying to figure out like how to word it. So having like the, the market’s expectations for on like the physical, I guess like construction amenities, you know, type of side in comparison to like the business plan and like the forecasted rents, you know, just kind of matching up, you know, like the like the sponsors have like the business plan set up.

00:33:06:05 – 00:33:33:11

Kyle

They have the certain assumptions for, you know, those particular rents. How do you come in as you know, someone that’s like, you know, essentially telling them like, oh, hey, like you, you know, to achieve market rents like this, like you need like, you know, like granite countertops or like, like kind of like matching up the expectation, I guess, for like what the what the spreadsheet says, if that kind of makes sense.

00:33:33:13 – 00:33:55:13

Dan

Yeah. So the I mean, the easiest way to do it and it is a bit it’s a bit of an older way to do things, but you have to shop. Your competition like spreadsheets can give you so much information. I mean, you can go to Costar Yardi, you can, you can bring those big systems and software into, into your operation and they give you really good spreadsheet data, right?

00:33:55:15 – 00:34:17:14

Dan

But if you are niched down into a market, you need to shop your competition, right? You need to go, you need to act as a prospect, you need to see not just their their physical offering, but their personal offering, right. Like is their leasing team may be a little bit more friendly when you walk in. Do they offer you water?

00:34:17:21 – 00:34:42:01

Dan

I mean, it ultimately comes down to you’re stealing the best ideas from your competition, right? Or as you’re going through this and this is this is just as true as stealing. What’s working is you realize what does not work, right? So if you walk into a property and you’re completely ignored, you probably realize that’s not a feeling I want my prospects to feel when they walk into my communities.

00:34:42:03 – 00:35:06:27

Dan

Right? So you’re like, All right, what not to do, Let’s improve upon that. Or as you’re going through all these different things, you start to realize there might be a missing opportunity here. And I’ll give you a very of a random example of that is while I was with the right, I went through a bit of a training program and part of that program was to be innovative, right?

00:35:06:27 – 00:35:27:03

Dan

They they promoted innovation and change in the organization. So they always want you to be thinking outside the box, come up with the next great thing because they’re a giant. Right? Right. So they have more backing than your mom and pops right there. They’re not going to mom and pops aren’t going to set the set the tone. They’re not going to test things out.

00:35:27:05 – 00:35:57:00

Dan

But the bigger reads are a little bit more capable of taking that risk. So they did. And as part of this this program I was in, I actually developed we had some some assets coming on the market in Cambridge. Right. And Cambridge is a very expensive market. And we were realizing that what I was realizing was part of my my project was I realized that some of our units were actually pigeonholing us into a smaller opportunity than we could.

00:35:57:02 – 00:36:21:27

Dan

The difference at the time between a studio and like a one bed, let’s say, was drastic. And with the floorplan of some of these properties, our studios were generous sized or even our one beds were a little bit more generous just because of the way the property landed on this this BLOCK So I’m sure you’ve heard of Murphy Beds, things like that that might pop up into the wall.

00:36:21:27 – 00:36:56:23

Dan

But in Jap in Japan, there’s a lot of that. In New York they start doing a lot of that where they make such a small footprint feel so much larger because it turns into a transformer, right? Your unit becomes a transplant. And so it wasn’t really an adopted thing in Cambridge. And the project that I came up with was a moving wall that would help divide a somewhat generous sized living room into a temporary or a smaller sleeping quarter to get better use out of the space, especially if it was a short term use.

00:36:56:23 – 00:37:15:12

Dan

Right. Because especially in that area at the time, this was probably five, six years ago, we were seeing people kind of bring in their their parents, let’s say, is, you know what, my parents need a place to go. They sold their big house and, you know, want to stay with us for a little while before they go and retire down south.

00:37:15:15 – 00:37:48:11

Dan

So people were accommodating family and extended extended stays from people. So I actually came up with this plan of this like moving wall. And it was a fun concept. It was a little more on the expensive side, so we didn’t implement it. But I actually left the company for a period of time, came back after two years, and sure enough, they had found a company that was starting to pre build these devices, these like structures, and they started putting them into some of the units.

00:37:48:13 – 00:38:09:00

Dan

And it’s just like, I mean, that is innovation, right? And it was like, Huh, I wish I was here to see them implement it because I felt like it was it was like my baby. I come up with that now. I know I’m not the the father. That idea, it’s just in our portfolio. At the time it would have been the innovation and it just happened to be implemented.

00:38:09:02 – 00:38:26:14

Dan

After I left because they found some value in that idea. But the implementation, the way I had built that out because I didn’t flush it out well enough, it was just too cost prohibitive until they found somebody that was able to build it a little bit cheaper and they started to employ it in a percentage of their units.

00:38:26:21 – 00:38:46:21

Dan

And then it increased the value of those units. So now they created a new segment of the market in those properties where instead of having a studio or instead of having a one bed and two bed, they had this like interim unit where it could be a convertible so people would pay a little bit more than one bed because it had the ability to transform.

00:38:46:24 – 00:39:07:12

Dan

But they didn’t want to pay a four to bed price because it didn’t have as much square footage. So it’s it was an interesting idea, but the same type of thing that you see, everyone’s going digital now, right, with their keys and their locks. That had to start somewhere. Somebody probably did a tour of a actually somebody probably did a tour of a re, you know what I mean?

00:39:07:12 – 00:39:34:27

Dan

A large corporation’s property. And they’re like, Oh, wow, look at this. And they realized, I’m going to go ahead and try that. And in the grand scheme of things, as an organization and as an industry, right, we need companies like the Ritz. We need these big organizations to take those risks so that they can make it a little bit more affordable for the mom and pops to start implementing these things.

00:39:35:00 – 00:39:56:06

Dan

And they kind of get the learning curve out of the way. And then a lot of us follow suit with that. I mean, I happen to own an even now and EV Chargers became the hottest thing that we were doing in that portfolio. And now it was part of the brand, right? As soon as we do an acquisition, we would implement an EV station.

00:39:56:08 – 00:40:24:00

Dan

It was just part of it and then it became synonymous with, if that’s the type of demographic you’re going after, then you know that this this particular company, this brand of multifamily product units, that’s the way you want to go because you know that they cater to that type of of, of end buyer and user. So it’s really just it’s a long way around saying shop your competition, see what they’re doing right and wrong and learn from it.

00:40:24:00 – 00:40:33:21

Dan

Don’t try to figure it all out on your own. If you if you can avoid it because you don’t want to have to spend ten weeks to learn that lesson when somebody else has already done it.

00:40:33:23 – 00:41:17:12

Kyle

That’s neat, man. Holy crap. Wow. It makes a whole lot of sense, man. It’s incredibly interesting. Like how it works. Like, it’s almost like a like. Like circle of life and like the like an economic, you know, real estate type of space of, like, you know, the top guys, top of the food chain, you know, highest budgets, biggest buildings, the ones that can actually, you know, potentially have the the bandwidth and the capability to experiment without like exactly like imagine taking like a huge risk, you know, insta like in comparison to like, you know, somebody with like a six family trying to do like, like experiment with, like a wall, you know, in, like a

00:41:17:12 – 00:41:52:28

Kyle

unit like that of their own. And like, if things work out frigging phenomenal, like you’re like pioneer of the year. But if they don’t, it’s like, oh, shit. Like, you know, I just lost, you know, six months of cashflow, you know, like, Oh, no, Yeah, But no, I think that’s incredibly, incredibly cool, man. Like, just like the whole, like macroeconomic sense of, of how that type of thing works and how like the innovation comes about and like how it kind of comes from the top and kind of makes its way down in a way, you know, And C let the market kind of decide of like what sticks and what doesn’t and how you adapt

00:41:53:04 – 00:41:56:02

Kyle

accordingly. You know, as time goes on.

00:41:56:04 – 00:42:17:13

Dan

That’s ingrained. Probably the biggest the biggest thing as well is, I mean, again, we we keep going back to like the smaller mom and pop because at the end of the day, I’m a mom and pop, right? I have a couple units, but I don’t have like the units of a re yet. That’s exactly. But the big takeaway to some of that is when you’re when you’re dealing.

00:42:17:13 – 00:42:42:15

Dan

So one of the communities that I supported was was over 900 units in one footprint. Okay. So it was a wide open property, beautiful property setback. You had lots of trees. It was it was a different era of building and multifamily, Right. Not these super dense, compact buildings that you have now. But this was spread out over acres and over 900 units in this property.

00:42:42:18 – 00:43:16:23

Dan

When you have that many units in a small, relatively small footprint, you are setting your own market in your own little like ecosystem here, right? So you can test things on a building by building basis and or floor by floor basis. I mean, when, when I underwrite multifamily, when all the sponsors that I know are underwriting multifamily and they’re going from like six, 12, 20 units to like 500 units, they they underwrite in a way that is all right, you’re treating every unit the same.

00:43:16:23 – 00:43:39:01

Dan

So a two bedroom is a two bedroom is a two bedroom. That couldn’t be further from the truth because a two bedroom that has a pond view on the top floor should have a premium attached to it, A two bedroom located in a building that you just updated the hallway. You have brand new paint, brand new flooring, brand new wallpaper, brand new light fixtures.

00:43:39:03 – 00:44:02:06

Dan

The two bedroom in that building should be more expensive than the two bedroom in a legacy building that has like really old and outdated wallpaper and everything like that. So you have the ability to test all of those theories in a relatively protected environment in your own backyard and see what works, what doesn’t work. And I think that’s what benefits like big organizations and big properties.

00:44:02:09 – 00:44:28:21

Dan

So I recommend when you’re when you’re looking at these bigger type properties for for any owner operators out there that are that are listening to this is be conservative in your underwriting. But when it comes to actually putting your business plan in place, test your boundaries, right? Pick some buildings to do a full blown renovation and see, hey, can we really get an extra $50 a unit?

00:44:28:24 – 00:44:43:04

Dan

Because we did the hallway over, we added LED fixtures and we did this and did that because not only if you changed all your fixtures to LED, you’re going to be saving on your expense line anyway. And we know that if you save on expense, your A.I. is going to be supported, right? It’s going to be better, better for it.

00:44:43:06 – 00:45:18:03

Dan

And if you increase your revenue because instead of having a unit, that’s the exact same price, top, middle and bottom rate, if you can get an extra $15 premium for a middle unit and an extra $20 premium for the top unit, you’ve just increased your NOI quite a bit. If you have 900 units and you can now say the top third of the buildings can get a $20 premium, you’ve now kind of pushed your market up a little bit and you still have a you still have product that is in line with the market, right?

00:45:18:06 – 00:45:28:02

Dan

You’ll always be able to keep that in line, but you always have the ability to push that market limit just a little bit because you have so much inventory to deal with.

00:45:28:05 – 00:46:06:27

Kyle

Wow, that’s mind blowing, man. Holy crap. Especially like like you mentioned, like, you know, having multiple buildings in one like in one property or something. Man, Like, I mean, think about it. It’s kind of like when people do like, like split testing for, like, like marketing campaigns, like, try, like different mailers, whatever it is, it’s that big, like in a completely like macroeconomic type of way that can subtly or I don’t know what the opposite of subtle is more prominently, I guess, affects, you know, like the relatively comparable type of buildings around you.

00:46:06:29 – 00:46:46:22

Kyle

That’s cool, man. Like, that’s that’s all that’s really interesting is like, wow. Like, that’s it’s just it’s such a such an incredible conversation of like the experimentation while still staying risk averse. And like you said, you know, like if it’s something like, you know, buying like the more, you know, like price friendly lights or whatever it is, their the high LSD or whatever it is, it’s going to help you anyway, you know, because like you said, it’s going to, you know, drop your expense items a little bit, jack up your I know I a little bit and like why not experiment too, You know what I mean?

00:46:46:22 – 00:47:18:24

Kyle

And kind of see like how the market reacts to that type of thing. Like that’s that’s such a crazy thought of like, yeah, you know, like there’s that like the optimal condition that, you know, you want that building to be in, you know, three, five, seven, ten years down the line, whatever that, that term life looks like. But also like you might be able to add your own flavor to it and like try some things out and like not be risking like, you know, a like basis points of return still like, you know, try out something, Maybe it’ll work, maybe it won’t.

00:47:18:27 – 00:47:35:18

Kyle

Right. That, you know, the rest of the market could, you know, follow suit to some degree. I think that’s extremely cool. Like the influence in itself, you know, in addition to your deal. But how that could also trickle off into into other parts of the market as well. That’s neat.

00:47:35:25 – 00:47:54:11

Dan

Yeah. And you can’t just you can’t just focus on the top line of Yeah, can we increase revenue, Increase revenue because you’re going to hit a ceiling, right. Yeah. You can’t just keep, keep, keep doing like if you put a a keypad on your door, it’s not, I don’t think people are going to be paying an extra $5 a month because of it.

00:47:54:16 – 00:48:16:26

Dan

Know what I mean? The oh my God, I didn’t want to carry keys. Like there’s some convenience factor. Absolutely. But at the end of the day, when you look more on the expense side, that really is one of the main driving forces behind why our properties did all keyless entry. Because the amount of time when you actually look at you, you go back and you do the historic review of your work orders.

00:48:17:02 – 00:48:49:15

Dan

And this is another benefit of the bigger organizations you can track better, right? You have more data to to pull from. And I think as smaller operators, we need to leverage that knowledge as much as we can because they’ve already done the testing right. They’ve already done the split testing of how long does it take to require like how long does it take to, you know, get dig a key out of a lock that somebody snapped off or, you know, you, you end up having to change out the whole cylinder and all that.

00:48:49:16 – 00:49:07:13

Dan

Like when you’re dealing with hundreds of units, it’s, it’s, it’s a time suck, right. And if you’re paying let’s say you’re paying or maintenance tech $30 an hour and it takes them an hour to deal with all that, that’s 30 bucks an expense that that unit had. Now, you put a keyless lock on there and somebody gets locked out.

00:49:07:13 – 00:49:35:22

Dan

And if you have a full smart system, it’s like checking your app and unlocking the door remotely and or reissuing another code. And it cost you maybe five, 10 minutes, you know what I mean? So now you’re under $10. You just saved $20. You added $20 to your bottom line. So whether it’s an additional revenue or a savings expense, a savings in the expense side, it still has the same net effect of improving your A.I..

00:49:35:24 – 00:50:02:07

Dan

So it’s you have to look at it from both sides, not just look at the big glitzy what can generate the most money, but what can save on expenses, getting rid of carpet and go with LVP. It’s not just because it’s the fab thing to do, it’s because carpets have a shorter lifetime life expectancy. And I don’t know many people that see a stain in the middle of the floor and they cut out that square and just patch it in.

00:50:02:07 – 00:50:21:14

Dan

You don’t do that right? You have an LP for and one of those planks gets damaged. Guess what? You cut the plank out, You put a new plank down. It doesn’t stand out as much. And then you can rewatch the entire floor and it looks uniform again anyway. So again, it’s an expense line, right? It might cost more to put the plank down.

00:50:21:17 – 00:50:25:27

Dan

You’ll get more life out of it and it makes repairs so much better and cheaper down the road.

00:50:26:00 – 00:50:57:19

Kyle

I love that man. And that was actually something that I kind of wanted to pick your brain about as well. It was kind of funny, like how we segmented that into that anyway is kind of like the tech side in like today’s day and age of like, you know, like the keyless entry. Did you kind of see anything in like, like the world’s in regards to like, like sensors and like anything like, like, builds in automation, you know, like anything like that, by any chance?

00:50:57:21 – 00:51:25:04

Dan

Yeah, I mean, probably one of my biggest projects was it was improved drastically after a risk assessment was performed. I mean, I could I could give you so many examples of technology saving our bacon, but I’ll give you a one which is probably the most like in my face at the time. So we had a building that ended up taking on water from a variety of possible reasons.

00:51:25:04 – 00:51:47:29

Dan

But regardless, we got water into the basement of our building. In this building we had all of our electrical gear. And this isn’t just an outlet, right? This is the entire switchgear of a of a multi hundred unit class property. Yes. Water got in. Right. And it’s a it was water getting into a room that was never designed to have water in it.

00:51:48:05 – 00:52:20:25

Dan

Right. So that’s not a good situation. And it of course happened at 2:00 in the morning. So it was an extremely expensive loss insurance claim. It was a very long project to put back together. But the benefit was that came out of it is after that project was done, I put cameras in this room, I put a leak detection rope around the entire perimeter of this this room, and tied it to the building’s beams.

00:52:20:25 – 00:52:53:03

Dan

The building management system. That building management system was tied to my cell phone. So if anybody like spilled a drop of water on this perimeter line at any time, any doesn’t matter what, I would get an instant alert text. The front desk would get an alert test because they were 24 hours a day. And there was a process that I had put in place that if you get this text, you pull up that camera and you check if there’s water in that basement, you check this the panel, it tells you where because we had it mapped out.

00:52:53:11 – 00:53:12:06

Dan

So if it told you that there was a leak at 57 feet, you could look at the map that I had created. And no 57 feet is on this wall. And it’s like between two pieces of equipment or whatever it is. So you could really hone in on it, get all that data, and then call the on call service guy and say, look, we have an emergency.

00:53:12:06 – 00:53:41:15

Dan

You need to get down here and then we can hopefully fix it. Before we ended up with three feet of water in an electrical room. Yeah. So 100% technology. It was it was unfortunately a hard learned lesson, right? Because this room was never designed to allow water and by some chance it did. And now we had to make sure that we put every possible belt and suspender we could on this property so we’d never incur a loss like that again.

00:53:41:18 – 00:54:10:27

Dan

The other other technology experience I had that was really beneficial was a new construction, new development building and we had all smart sensors, we had smart leak detection, so we had water sensors in our AC closets, We had water sensors in, we had a combination domestic and heat system. So you’d have domestic hot water and your radiant heat being filtered from this one combination unit.

00:54:11:00 – 00:54:29:23

Dan

So we had a water sensor in there and our laundry machines also had a water sensor that would trip so that if water hit that pan, it would shut the power off and it would shut the water off to the laundry machine. So let’s say a hose blew out the back of your laundry, your washing machine. It hit that sensor.

00:54:29:23 – 00:54:58:13

Dan

That sensor would automatically shut the power down and shut the water off to the laundry to make sure that you didn’t continue to flat out that that unit. So in a in a new construction building, having all those systems operated, we found all of the air conditioners that were not operating properly because we also had smart thermostats. And I could pull up a report and I would I’d set my parameter and say, you know what, Units have over 60% humidity right now.

00:54:58:15 – 00:55:23:10

Dan

And I thought I’d be like, Oh, okay, crap. Like, there’s a handful of units that are 60% humid or more. So we could then target those units, go up to the roof, check the rooftop units we found like shorted circuits we found we found wires that were chewed through by mice like, so we could troubleshoot all that stuff without waiting for it to be a service call from a tenant.

00:55:23:10 – 00:55:48:09

Dan

Right. And as a as a as a vacant building, we could also control our utility costs by turning up and turning down the units, turning on and turning off the lights as we needed to make things, you know, work for us so that we weren’t just drawing energy in a vacant property. Because when you have over 100 units and you forget to turn the light off of 100 units, it adds up.

00:55:48:09 – 00:56:15:25

Dan

And if you’re if you have a vacant building, that’s your expense and that’s that can be pretty expensive. And if you have an air conditioning unit that is continually trying to cool a room that is overly humid and then you find out that your condensate pump is completely failed and it somehow bypassed the system. Or we found situations where the water sensor, because it was so sensitive, if the water center tripped, it would shut down the condenser, Right.

00:56:15:25 – 00:56:39:22

Dan

So you wouldn’t get any any cooling effect at all. And other conditions during construction, that water sensor maybe landed on a piece of debris tucked in this closet. And we didn’t that so we wouldn’t find out that the sensor would trip until there was three inches of water in this closet. And when three inches of water shows up in a crazy closet, your drywall is now saturated and been saturated for a while.

00:56:39:22 – 00:56:56:28

Dan

We didn’t catch it till maybe the next day because somebody had elevated the sensor. So we didn’t get it until it was too high. And gone a couple of days in hot conditions, in dark conditions, in wet conditions. We’d have mold running rampant, so we’d have to go in and do all sorts of cutting of a brand new building, which is not not fun.

00:56:56:28 – 00:57:14:20

Dan

So, yes, technology has saved us on numerous occasions, but it comes at a price, you know, I mean, it it is expensive to implement, but, you know, it does it does help give you the data that you need to make the right decisions.

00:57:14:22 – 00:57:53:22

Kyle

Mm hmm. Yeah, I think that’s extremely cool. Men especially kind of coming from that part of the trade a little bit. Yes. I definitely hear you. When it comes to, you know, kind of like the Johnson Controls and, you know, some of the bass and stuff like that. And yeah, no, it’s it’s incredibly powerful, man. Like, even like our whole conversation, one of the like, kind of common variables is like just how differently how differently like you can operate in terms of like, like people and systems at a much higher level level, you know, in like the syndication world.

00:57:53:22 – 00:58:17:23

Kyle

And you know, and above, you know, and comparisons are like, you know, smaller like commercial, residential, multi stuff like that. It’s it really is incredible, man. You know what I mean? Like, because I mean, like, you’re not going to be able to put, you know, like a like JCI, you know, system in a six family. You know, it’s like actuators and like all this like crazy stuff going on, you know what I mean?

00:58:17:25 – 00:58:36:26

Kyle

But, you know, and like a huge building, like you said, I mean, you’re going to be able to pull up like the trends of like certain things going on and like, really be able to hone in and, you know, there’s going to be some sort of role, you know, associated to, you know, tracking that data, you know, trying to give solutions, that type of thing.

00:58:36:28 – 00:58:49:28

Kyle

A lot more, a lot more like, you know, capital and bandwidth to be able to to leverage, to optimize size, you know, those particular properties the best that they can. It’s yeah.

00:58:49:28 – 00:59:21:07

Dan

But even even taking it to a personal level right. I mean imagine the customer experience and that’s that’s what this technology frees up. Right. It frees up your, your your service team or your property management team to focus on the customer. At the end of the day. Yep. Now imagine the experience of of a of a tenant of a resident that they experience water coming out of their water heater closet and it’s now damaged their brand new shoes that are on the floor right there or a package of of like family pictures.

00:59:21:09 – 00:59:44:26

Dan

They’re going to call you in a certain emotional state. Okay. Now, imagine the experience when you get the alert that there’s a drip of water in that closet and you proactively go there and say, hey, I just got to check something. We got a little alert. You stop that catastrophe from ever happening. Imagine that the communication between the tenant, you know what I mean?

00:59:44:26 – 01:00:25:10

Dan

It’s just it it just changes the it changes the dynamic. Dynamic completely. And in today’s day and age customer service is an amenity that’s hard to put a dollar value on. But it is important for the the life expectancy of your organization in your community. You know, I mean, your reputation, you know, if you are constantly getting five star reviews, then don’t you think that property would be a little bit more open to, Hey, we got to charge you a little bit more because you’re getting white glove service and smiling at your customers, walking down the hallway and knowing your customers, pets, names, things like that.

01:00:25:13 – 01:00:46:13

Dan

You don’t really get that opportunity when you’re dealing with a very high need value add property and you don’t have any of these types of technology in place or you have a really fully stretched service team and they just they don’t want to really be friendly with anybody. They just want to do their job because as soon as they take a breath, they finish their job, they take a good breath.

01:00:46:13 – 01:01:06:27

Dan

Guess what? A dishwasher just went in unit 25 B, you know, I mean, so it’s like it’s a constant, constant battle and it doesn’t allow you to prepare and have your stuff in line. And I mean, even on the technology side, when you have a big enough property and you have inventory, right, you should keep inventory on hand.

01:01:06:27 – 01:01:28:15

Dan

So you’re not running a Home Depot to grab a piece of pipe that you need and you can start building inventory systems in place and have big or big companies like HD Supply, who I’m a big fan of. I have a lot of good connections over there. They can come in and they build this inventory system for you where you tell them, Hey, at any given time I need to have three of these no matter what.

01:01:28:17 – 01:01:46:24

Dan

And they come in, they scan your systems and they’re like, Oh, we only have two of those elbows. So I got to get one on order for you. And they handle your inventory management, you know what I mean? And it’s like, Hey, we told you we needed a minimum of three. You looked at the box, there was only two, and then you just automatically shipped me a box and we just put them away.

01:01:46:26 – 01:02:07:02

Dan

So yeah, there’s definitely ways to leverage that to, to benefit you guys as operate. Are you guys I mean benefit all of us as operators once you know where you start to have those those leaks in the in the organization, in the system, it’s like I really want to take some time and some, some energy sap away from my service team.

01:02:07:05 – 01:02:33:00

Dan

Great look at where they spend their time. Now. What technology can you implement to make that better or I mean, laundry units, for God’s sakes? I mean, we we know we personally know people that have pictures of them taking 300, £400 of coins out of line who can’t afford to. There are more efficient ways I can tell you the stories I hear from these people, like the service managers on some of these properties.

01:02:33:00 – 01:02:49:05

Dan

And like I remember we’d have a guy that comes in here with a station wagon. He’d go building the building, collecting all the coins, and by the time he left, the station wagon was grinding on the road trying to go to the back. And I mean, just a simple application of like rechargeable cards, you know what I mean?

01:02:49:05 – 01:03:13:22

Dan

And you now have cash lost laundry, and it just takes so much energy and effort away from the site team to now give them their time and energy back to focus on customer service, which will help drive your property value that much more. So again, I’m not all about nuts and bolts. I’ve been around enough to tell you that at the end of the day, you know, personal interaction can actually generate more revenue for you.

01:03:13:24 – 01:03:35:23

Kyle

I love that man. That’s fricking gold. And then thank you so, so much for coming on here, man. This was absolutely awesome, guys. I definitely recommend like listening to that again and really, like, just soaking in like all of that information. There is so many friggin nuggets in there, like my head spinning right now. Like, I’m not going to sleep tonight, just right.

01:03:35:27 – 01:03:51:24

Dan

I know. I, I’m passionate, but it’s all love. Possible info. Hell yeah. You just go down or play it out like, you know, 0.75 speed or something like that or you just reach out to me. I’ll be happy to talk about it over and over again.

01:03:51:27 – 01:04:04:26

Kyle

Exactly. Absolutely. Man. And that was the other thing I wanted to ask is like, you know, where on social media can you be reached? Like, where can people get in touch with real value ventures? Everything you want is all tagged down below.

01:04:04:28 – 01:04:28:25

Dan

Yeah, I mean, real value. Dan is my handle on just about everything. So it’s, you know, on Facebook and Instagram, it’s real value dot Dan on LinkedIn and YouTube, it’s just real value. Dan No dots, all one word. So yeah, I mean, you Google that, you’ll probably find me. My web page is real Value Ventures dot com. I am not a web builder, so you know, take it easy on my web page.

01:04:28:25 – 01:04:33:27

Dan

I just have to have a presence. It could definitely be improved. But yeah.

01:04:34:00 – 01:04:38:08

Kyle

You’re not alone. Dan Yeah, you are not alone, man, I assure you.