Insider Secrets Podcast Episode #61

Featuring Guest: Kyle Mitchell

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Guest Bio:

Kyle Mitchell - Episode 61 guest at Insider Secrets Podcast

Kyle Mitchell is a real estate entrepreneur who has a focus on Multifamily Syndication. He is the Managing Partner and Co-Founder of APT Capital Group and the Asset Management Summit, where their mission is to positively impact the lives of their investors and the communities in which they invest through the highest level of transparency and fiduciary responsibility.

Kyle is also the co-host of the weekly real estate podcasts, Passive Income through Multifamily Real Estate & Asset Management Mastery, where he speaks with various experts in the real estate industry to help educate and create clarity for passive investors and new operators. With a background in operations, management and logistics, he has overseen multi-million dollar businesses and has a passion in doing the same in the multifamily syndication space.

Shownotes:

Standout Quotes:

“I can separate myself from all my competition or most of my competition by just being consistent” – [Kyle]

“A lot of younger people are not picking up this game of golf which is why it is shrinking a bit” – [Kyle]

“When you’re buying an apartment building, you are buying a multimillion dollar business” – [Kyle]

“As long as you understand the risks and rewards of buying older buildings and plan for it, I think you’re okay” – [Kyle]

Key Takeaways:

  • Kyle describes himself with one word ‘Consistency’.
  • Kyle says he can separate himself from all his competition or most of his competition by just being consistent.
  • I fell into it real estate by mistake, to be honest. I’ve never been a guy that invested in the stock market. So I did invest in real estate back starting in 2010, but that was mainly single family homes. And I stopped a couple of years after acquiring a portfolio of about 10 single family properties.
  • I was a regional and general manager for a golf management company. Much like property management for apartments.
  • An Insider Secret from Kyle: Hire a Virtual or Executive Assistant three to four months before you need them.

Episode Timeline:

[01:55] I am excited today about our guest on Insider Secrets, Kyle Mitchell

[03:34] In one word, tell us what describes you personally and professionally?

[04:36] Kyle shares his backstory.

[09:14] So tell us a little bit about your portfolio. Where’s it at? What type of product and asset class?

[10:05] Do you buy an older product or do you not? What’s your thoughts on the age piece of this?

[16:55] Do you use third party to manage your properties?

[19:46] How difficult do you find it is or pushback do you get from your onsite staff or your property manager when you want to go in and make a change?

[21:29] What types of things have you seen as a result of adding more value locally in neighborhoods?

[24:09] When you talk about holding people accountable, you mean that property manager or your onsite staff?

[24:49] How do you go about making high stake decisions when it comes time to do?

[26:00] Kyle shares about the systems and techniques they use.

[28:11] Kyle talks about the best amenity in their properties that helps generate some extra revenue.

[31:42] One of those Insider Secrets that you feel best has helped scale your business?

[32:24] Last thoughts by Kyle.

[33:23] Favorite tourist attraction?

[34:38] Best book you’ve ever read? “Cash Flow Quadrant” by Robert Kiyosaki

[36:33] How to contact Kyle: You can always schedule a call at our Website (aptcapitalgroup.com)

Transcript:

[00:00:00] Mike: Hey everybody, welcome back. It’s Mike with Insider Secrets, and I am joined today by Kyle Mitchell from APT Capital Group. Hey Kyle, would you please tell our listeners a couple of things that they’re going to hear on today’s program?

Kyle: Yeah, absolutely. Thanks for having me on. In this program, you’re going to hear a lot about asset management and the differences between asset management and property management, which is extremely critical.

We’re going to talk about things like KPIs and holding your manager accountable and some strategies and systems that we put in place for leasing as well.

Mike: Awesome. And I’m excited about it and you’re going to have to listen in to get the rest today. We’ll see you inside.

[00:01:00] Kristen: Welcome to this week’s edition of Insider Secrets. The show that turns multifamily investing into reality. Each show we interview guests who are seasoned professionals, actively closing and managing real estate deals. Your host Mike Morawski has more than 30 years of multifamily, real estate investing and property management experience.

Mike is the founder of My Core Intentions. And he’s been involved in over $285 million of transactions. Focuses on helping you create short term cashflow and long-term wealth. Here’s your host, Mike. 

Mike: Hey, good afternoon, everybody. Welcome back to another episode of Insider Secrets. And Insider Secrets is brought to you by My Core Intentions. And the one question I always ask everybody is, Hey, what are your intentions? And what are you thinking about? Did you wake up this morning and did you get specific about what you were going to accomplish today and this week?

One of the things that we always talk about at MCI is the future for our clients. And how we can help empower them to execute sound real estate investing principles and property management principles. And I am excited today about our guest on Insider Secrets, Kyle [00:02:00] Mitchell. Kyle, would you say hi to everybody?

Kyle: Hello everybody. Thanks for having me on Mike. I’m excited to be here.

Mike: I’m glad you’re here, Kyle. And just so everybody knows, we’re going to go live here on Facebook. And because that this episode’s not going to run for a few weeks, so this will give people an opportunity to get a little pre look at our episode.

But I’m excited about today because we’re going to have a chance to talk about property management. We’re going to have a chance to talk about asset management. But Kyle, let me tell the listeners a little bit about you. Kyle’s a real estate entrepreneur with a focus on multi-family syndications. And he’s a managing partner and co-founder of APTCapital Group and Asset Management.

Where their mission is to positively impact the lives of their investors and the community surrounding their properties. They strive to do this with the highest level of transparency and fiduciary responsibility. You may have heard Kyle on his weekly podcast, Passive Income through Multifamily Real [00:03:00] Estate and Asset Management Mastery.

He has 41 million under management. Is that still the right number, Kyle?

Kyle: That is.

Mike: Okay, good. Cause I know you had just closed a couple deals. We’ll talk about those. Yes, 41 million under management and his background in operations and management logistics, and he has overseen million dollar businesses in the past.

So Kyle, that’s pretty impressive. And I feel honored that you’re on the show today and I’m glad that you’re here so. One question I always ask my my guests right away is, in one word, describe to us or tell us what describes you personally and professionally?

Kyle: Consistency.

Mike: Ah, consistency. That’s great. What do you really feel that in your life is the thing that you’re really most consistent about?

Kyle: It’s all encompassing about how I approach life and approach everything is just being consistent on a weekly and daily basis.

It comes down to even [00:04:00] reading my one-year and five-year goals on a daily basis. And so I’m a big systems and procedures kind of guy and in my mind, I can separate myself from all my competition or most of my competition by just being consistent. And that word consistency, it does mean a lot to me. And it’s something that I pride myself in.

Mike: Okay. Awesome. That’s excellent. So let’s do this Kyle, let’s talk a little bit about your background. I’d like to dive in here a little and fill some blanks in, right? I read your bio. It just brief highlights of who you are and what you’re about, but how’d you get into real estate and to where you’re at today in business?

Kyle: Yeah, I fell into it by mistake, to be honest. I’ve never been a guy that invested in the stock market. So I did invest in real estate back starting in 2010, but that was mainly single family homes. And I stopped a couple of years after acquiring a portfolio of about 10 single family properties.

I found quickly it was very tough to scale that business and it just wasn’t scaling as fast as I’d like so I stopped doing that. My [00:05:00] career before this was in the golf business. I was a regional and general manager for a golf management company. Much like property management for apartments.

We were property management for golf courses, and I loved what I did. I worked for that company since I was in high school, when I was 16 years old, worked for nearly 20 years. But in 2015, I did get burnt out. The golf business was shrinking. I wanted to be growing and so I started looking for something else to do, and I wasn’t quite sure what to do.

And it took me two years to finally figure out what I wanted to do. And it was just searching on the internet to be honest with you. I came across an online course for multi-family. It peaked my interest. We bought it, my wife and I, and three weeks later I decided to jump all in into multifamily and get coaching.

It just spoke to me just the way multi-families valued. A lot of the systems and procedures that get implemented to run your businesses is what I was doing, but for golf courses. So it really spoke to me. And 11 months after that, I left my [00:06:00] job to pursue this full-time and I’ve been doing it ever since.

Mike: That’s really interesting. And I find it really intriguing that you think that you said that the golf business is shrinking. Is it still in that contraction or is it expanding anymore? It seems to me like it’s more exciting today for people than it’s been in the past.

Kyle: I think COVID definitely, it was one of the only things during COVID that you could still go out and do. So the golf business is booming right now in the short term, but certainly over the years, golf had been shrinking. It’s an expensive sport, it takes a long time to play. And with the current state of immediate gratification.

It’s now one of those sports that a lot of people pick up when they’re younger. So I would say that a lot of younger people are not picking up this game of golf which is why it is shrinking a bit.

Yeah, that’s interesting. I understand that piece about you want things a lot faster, right? Than normal that we’re beyond the microwave age. We’re even faster than that. But I have two kids that love golf, and I’m [00:07:00] surprised about that. My son he’s 16 and then my daughter’s 14 and they both love golf. So it’s interesting though.

Hey, so I like the part of your story a little bit, that you took some time off to figure out what you wanted to do. That’s how I wound up in the apartment business, right? Or in the real estate business I should say. I was in the contracting business, woke up one morning, just burnt out, didn’t want to do it anymore, sold my company and took a year off and discovered real estate. So what was it about real estate do you think was your passion that kind of drew you to that?

Yeah. Like I said, I started investing in real estate in 2010 and reading all the books, “Rich Dad Poor Dad”, “Cashflow Quadrant”, all those things. I knew I wanted to be in real estate, but I wasn’t sure in one asset class or what fashion.

And then, like I mentioned, I found an online coaching course and multifamily just spoke to me. I love the business aspect of it and how it’s valued. When you’re buying an apartment building, you are buying a multimillion dollar business. And so I loved that [00:08:00] piece of it that you can manage the business that you can increase its value by implementing systems and procedures and putting money back into the property and ultimately running it like a business. So I really love that. And that’s one thing that didn’t really appeal to me with single family is it’s very singular. There’s not a lot of moving pieces. And there’s not a lot of ways to control how much cashflow that property is making.

With multifamily, there’s multiple incomes, streams of income and multiple areas in expense lines where you can control those things. That’s one of the main reasons. And then now what I do is we help other people as well, build wealth through real estate. And we really love doing that.

Mike: Yeah. That’s that whole syndication piece and we’ll get to that in a minute. But it sounds like really you’ve been an entrepreneur for a long time, and that’s why I think that’s one of the things that multifamily offers us as an entrepreneur is the ability to walk away from closing. And to have a business operational where you don’t have to wait a week or months for revenue to [00:09:00] start being produced, but it’s being produced right away.

When you are looking at your multifamily deals, and I know you own about 41 million, how many doors is that right now?

Kyle: It’s about 450 doors.

Mike: Okay. So tell us a little bit about that portfolio. Where’s it at? What type of product and asset class? About your buying criteria a little bit.

Kyle: Yeah, absolutely. So we purchase only in the Arizona market. So Phoenix and Tucson heavily focused out there. Actually by the time this launches I’ll be living there because we want to get closer to our portfolio and build stronger relationships out there. But we’ve got three properties in Tucson and one in Phoenix and do plan on continuing to build our portfolios out there.

Our typical criteria is in that hundred plus unit space, B and C class assets. And preferably 1980s or newer, although we do have some pre 1980s product.

Mike: That doesn’t scare you away at all? And here’s why I ask, I just underwrote yesterday, a deal with a coaching client of mine. We are looking at [00:10:00] a deal different market, but it was a seventies product.

And one of those things it’s like, do you buy an older product or do you not? What’s your thoughts on the age piece of this?

Kyle: Yeah, it’s a couple things there. Even 1980s product is 40 years old right now. We would like to be getting into more nineties and two thousands product here in the next year or so.

As long as you understand the risks and rewards of buying older buildings and plan for it, I think you’re okay. But there’s definitely more risk to buying a 1970s product. That’s maybe master meter versus individually metered, for example. Your day to day maintenance costs are going to be higher because you have to take care of the mechanicals.

And we also have higher reserves and cap ex for those items as well. The deal is still pencil. If the deal sell pencils with all those things, and you’re willing to understand that those things need to be done, that I think you’re going to be okay. On the resale side, yeah. The property is only getting older.

But once you add value to the property, if you do it the right way, [00:11:00] focus on the right things, make sure there’s not a ton of deferred maintenance, which is really a huge issue with these aging properties. Then, in the end, I think you’re going to be okay.

Mike: Yeah. And sometimes doesn’t it just boil down to what you like as part of your buying criteria and what you will buy, what you won’t buy and what you’re flexible on?

Kyle:  Absolutely. I know people that only buy class A product, and I also know people that love class D product that is just a full heavy lip. So I always tell people that you can make tons of money in any asset class, in any industry, in any market, but you have to understand the game you’re playing and everything is just slightly different.

You have to plan for that game. So understanding what you’re getting into before you decide to buy in and set your criteria is important.

Mike: So Kyle, you’re pretty focused on the Phoenix market ,Phoenix, Scott Stale Tucson area. What are the metrics there that you’re looking at that you find there that you might not find somewhere else or in another market?

Kyle: Are you talking about as far as our returns or as far as the reason why I liked the market?

[00:12:00] Mike: Whatever your answer might be, because why that market versus going to Dallas or to Atlanta where some of the other smart money is these days.

Kyle: Yep. Great question. One of my criteria, not the deciding criteria is proximity and it’s one of the reasons why I’m moving there.

But, originally when we were investing, I was not planning on moving to my market. And so if I was going to invest in like an Atlanta or Florida, they’re three hours ahead. Which does affect things when you’re trying to do business out there, I would have to make my latest phone call at two o’clock to get a hold of someone at five o’clock.

So it hampers you there a little bit. Travel, I like traveling to my market often. We’re out in our market, even when I don’t live in the market every other week. Flying to Atlanta, flying to a Florida every other week gets expensive. It’s time-consuming and so it just wasn’t efficient for me.

So I was really trying to find a market that still had great fundamentals, which Arizona definitely does. That’s a little bit closer. I can drive there in five hours. I could fly there in an hour and now we’re moving there. But [00:13:00] some of the other things that we love about Arizona is controllable expenses.

Their taxes, year over year, the most they increase is 5% unless you’re doing a new build. We really liked that because it’s predictable. Insurance costs are much lower there because there’s less natural disasters. Rent increases in Arizona have been booming. It’s a very landlord friendly state and then the population growth, job growth, in that migration growth has been fantastic. And then the number one reason why I like Arizona, in 2008, their job diversity was just not where it should have been. And really they got hurt by that in a way. They were very heavily reliant on construction jobs. And for that reason in 08, they really hit hard.

And they’ve done a really nice job over the last 13, 14 years really diversifying their job front, which is in my opinion, really got them on a long runway.

Mike: Yeah. It’s interesting the effects that 2008 had on a lot of people. I had a friend in the real estate business that he made a lot of money [00:14:00] doing residential. He’d buy the buy foreclosures, he’d fix them up, and then he would resell them on contract sale.

And he did, he had a heck of a business doing that. All of a sudden, when the market started to improve or change, he decided to go build a few big buildings in downtown Phoenix, and then the market hit a wall. And when that happened, he got hurt. And so it’s interesting how that market’s rebounded, how it’s come back and what it’s like there today.

I think, one of the big things you said is that migration, right? The people that are still going there, you look at the baby boomers still turning 65 every day and that are retiring and going to that place and so it’s interesting. Hey, one of the things I wanted to talk about on this episode was the difference between property management and asset management.

And that was the thing when you and I first talked that kind of really intrigued me was you really focus in on the [00:15:00] asset management piece. Would you spend a couple of minutes and explain the difference between the two? And your thought philosophy around it?

Kyle: Yeah, absolutely. And there is a huge difference between asset management and property management. And essentially property management, if you don’t own your own property management company is the third-party company that you hire to run your day-to-day operations. So you’ll have an onsite manager, you’ll hopefully have a regional manager and some infrastructure behind that. And you pay this third-party property management company to manage your property on a day to day, but that doesn’t mean you hand them the keys and say, okay, that’s it.

Thank you. We bought our property. And that’s, it we’ll check in every month. There’s a piece called asset management, which is essentially managing the manager. You’re buying like I’ve already said a multi-million dollar business, you’ve implemented or put together a business plan on how you’re going to improve the property for an eventual sale. And if there’s no one there driving that bus and really driving the business [00:16:00] plan, then you’re going to be in trouble. You can tell the property management what some of your goals are, but ultimately you’re going to be the one responsible making sure that the property management companies accountable for those goals, staying on timeline, staying on budget. All those different things, and even goes down to investor relations, contacting and staying in touch with your investors and keeping them up to date on how the property is running.

So asset management is a critical piece, a huge piece. In my opinion, the number one piece of buying apartment buildings. It’s all fun when you’re raising capital and getting that hundred units and X number of assets under management. But if you don’t have systems and processes in place to run the business and business plan, then that’s gonna spell trouble.

Mike: Yeah, for sure. So what are some of the KPIs that you look for from your property manager? So let me back up for a minute. So one of the things that I heard you say and correct me if I’m wrong is you guys don’t manage the property yourselves. Do you use third party to manage your properties?

Kyle: Correct. So we have a third [00:17:00] party property management company that manages them on a day to day.

Mike: Okay. But you manage the manager then. So what are some of the KPIs that you have in place that you like to watch? To determine whether or not they’re doing their job?

Kyle:  Yeah. There’s so many different KPIs that we look at and we actually purchase a system through RealPage that integrates with our property management software that takes our data and then spits it out into KPIs.

And we look at those some every day and some every week. But the number one thing that we want to see is leads coming in and conversion of those leads and how they’re dealt with. I think that’s a huge key piece. And a missing piece in a lot of operations is just getting leases or leads to convert to appointments.

And then appointments to showing staff locations, applications to leases. And that’s a good friend of mine and colleague and mentor Neil Bawa calls it the lay soul program that he does. And we follow that very [00:18:00] much. And that’s one huge key piece is to make sure the conversions are keeping track, that the leasing office is keeping in touch or getting back to applicants within 24 hours, if not within the hour. So that’s number one, because leases fix a lot of problems, right? Revenue cures all evil. And so we want to make sure that we have the processes and systems in place to lease up efficiently.

Mike: Could you say the name of that program again, or that system again, that Neil uses?

Kyle: Yeah, it’s Lasal, LASAL. And it’s essentially just tracking conversions from each point. And the reason why you do that is, I’ll give you an example, if you knew you had a hundred leads that came in this week, but you only had one lease, you couldn’t really tell me where there’s an issue. You just know that we’re not converting. But if you say, okay, there’s a hundred leads that came in and 50 of them were appointments, right?

And then 25 were showings and then one application and one lease. Now, you know where the bottleneck [00:19:00] is there. For some reason you weren’t able to convert the showings into applications. Why? Are your rent’s too high? Was the property a mess? Do you have the wrong leasing agent? Are they not selling? But now you’ve boiled that down.

But if you have a hundred leads and only one application. Now, maybe your leads aren’t quality enough or we’re not getting back to the leads enough. So the reason why you do KPIs and look at KPIs is to ask the right questions. They avoid all that nonsense in between of, Hey, where’s this report? How do I do this? You have all the information there. It’s in one place. And now you can ask the right questions to establish what’s going on in the business and where the bottlenecks lie.

Mike: So when you figure out where a bottleneck is or where there’s a challenge in the process, how difficult do you find it is or pushback do you get from your onsite staff or your property manager when you want to go in and make a change?

Kyle: I think a lot of the reason why people start their own property management companies, because they want the [00:20:00] control and they want to be able to set the systems and procedures. And when you have a third-party property management company, they have their own operating standards, and so you have to work with them. We’re at a point now where we only use one property management company throughout our portfolio, they understand how our systems are. They’ve been very willing to customize to what we need and what we like. And so that working relationship has been great.

Now I will say it was not like that in the beginning. Even though we did set our expectations, what we thought up front, but we had to work with them through little things and we’ve even had some turnover at the manager position because they weren’t willing to follow some of those processes and procedures, but ultimately we own the building.

And we have investors to report to. So if the third party property management company isn’t going to meet our standards, then we’re going to move on.

Mike: Yeah. One of the things I like about, and you’re right about reporting other people, and this is one of the things I like in the bio I read about you is that you guys are really [00:21:00] concerned about the community, right? And I call that the stakeholders right. Different from our shareholders, because we have to be responsible to them and we have to be responsible for those returns, but the community, the stakeholders, who do we affect when we take over a property?

And is it being run right? Are we increasing the value? Are we increasing the neighborhood? And I think that really becomes an important part in what we do is how do we add value to the community? What types of things have you seen as a result of adding more value locally in neighborhoods?

Kyle: Yeah. Retention, number one of our residents, people stay longer, they give you referrals. And it just becomes a safer community, people care. And I think that’s really important. You hit the nail on the head there, even when it comes down to, we made a mistake at our first property of how often we did renovations and in what order we did them.

And ultimately when you’re doing renovations, you’re affecting someone’s livelihood [00:22:00] who’s living there, right? Day after day, week after week, they’re living there in their home. And if you’re causing disturbances, that’s going to affect someone who wants to stay there. So communication, planning things out in advance, all that stuff is important. But yes, adding value to the community, adding value to the residents, that’s why we’re there.

We want to make these places better, safer places to live, where people feel comfortable. And we’re in that class B and C space where class C space can sometimes have elevated crime that you have to deal with some bad tenants. And so we really go in there and we clean it up and we set the expectation with all residents and hold them to a standard that ultimately does add value back to their lives.

Mike: That’s interesting, we look at some of these properties sometimes, right? And I remember one time I pulled in a parking lot and I couldn’t believe the beer drinking going on in the parking lot and the loud music and the cars bouncing up and down, and the drugs and the prostitution, and everything else.

And you go, man, how do you [00:23:00] clean this up? How do you change this? And what types of things do you do when you take over a property that has those types of activities going on, those types of demographics going on, how do you clean that up?

Kyle: Yeah, it’s definitely not easy. And it’s one of those things that take a lot longer than you want, especially during COVID with the eviction moratorium. We do have a property that has been slower to turn because of that, because we’ve not been able to get out the bad seeds. And people don’t want to live where those bad seeds are.

And so until you can get them out, you’re stuck. In a regular environment, it’s going in there right away. Setting the expectation and showing people, look, this stuff will not be okay. We’re going to evict you. We’re going to call the police. We’re going to have round the clock courtesy patrol, which we’ve done before, it’s expensive.

But you don’t want to just say you want to clean up the community. You’ve got to put your money where your mouth is and actually do it. It’s just like anything, you put a plan together and you execute on that plan. But I think it’s gotta be more [00:24:00] aggressive in the sense that you’ve got extra staff on hand, extra support and really highly focused on holding people accountable.

Mike: Yeah. And when you talk about holding people accountable, you mean that property manager or your onsite staff and those types of people to get in the process done, moving the ball forward?

Kyle: Yeah. And I would say the residents as well. The residents want to see the place cleaned up, but some don’t.

And so you’ve got a hold. There’s community standards, and guidelines and rules. And if you’re not following those rules, you’ve got to stay on top of people and make sure you hold them accountable to those rules.

Mike: Yeah, it’s interesting. So obviously you put your yourself in a position from time to time where you have to make high stake decisions, different choices, things that are going to impact the community, impact your share shareholders.

How do you go about making high stake decisions when it comes time to do?

Kyle: As a team, a hundred percent. I never made those decisions by myself. I do have a [00:25:00] partner in Gary Lipski and we make a lot of our decisions together, but we also have other general partners on the team, but we also have our property management company that we really trust and has a ton of experience.

So we never make a decision blind per se. We get all the information we can from every side. And then we talk about what is the best way to handle this for the community, for the investors and for our team? And then we make a decision jointly to move forward. And, it’s also good to get the property management company as involved as possible because they are part of your team. And even though they’re not directly tied to the performance of the property, like the investors are, like we are, they still have some skin in the game and we really want to treat them as partners so that we can continue to grow their portfolio along with ours.

Doing things as a team has worked really well for us.

Mike: Yeah. Interesting. Techniques that you’ve used, over the years, you continue to learn things. What are one or two of the best systems or techniques that you’ve learned that you continually use over and over again?

[00:26:00] Kyle: Yeah, besides our KPIs, one thing that we do, we call a secret shopper reports for the property management company. And this is something that I had done on me in the golf business and I absolutely hated them, but it made us better. And essentially what they are is that we have our assistant call in and do an online inquiry on one of the many different platforms that we’re on, whether it’s apartments.com, apartment guide, or even the website for this property.

And we create a new Gmail account and we create a new name essentially, and use a Google voice phone number. And we act as if we’re a resident applying for an apartment and we asked very specific questions and we want answers to those questions in a presentable professional format. And we also have kind of a template that each property is supposed to use that’s professionally laid out, has links to local places to shop local schools, things like that. That’s more warm and inviting for people.

 And we do that once a month to make sure they’re responding the way we [00:27:00] want, answering the questions, not just copying and pasting. And then number one, how quickly are they responding to that inquiry?

Are they making a phone call or are they just sending an email? So there’s all those things. And so we’ve got a scorecard that we score them on and we send it to them every month and we want to see 90% or better.

Mike: Interesting. So do you ever go out and secret shop yourself?

Kyle: Oh yeah, we go in and pop in all the time.

So I’ll be out at one of our properties next week, just popping in seeing how it’s going. They obviously know my face, but I can certainly walk through and see what the property looks like before I walk in and they see me. But yeah, we will also do in-person shops with people we know in the market that will go in for us.

Mike: Yeah, interesting. I used to like to go to different complexes myself and see how they operated, how they greeted you, how they took care of you in comparison to how my staff did or how our properties look. It’s always an interesting process. You learn a lot from that one piece. [00:28:00] Best amenity that you feel that you have right now in your properties that helps generate some extra revenue or helps with tenant retention?

Kyle: That’s a good one. Let me just think. Amazon lockers have been good for us. It does generate the USPS lockers just generate some extra income. That’s been a good one for us and I don’t know if it’s resulted in retention, but what it has done is taken some duties off of our staff, which has freed up more time for them to do the things that they need to focus on. So I think that’s been a good one for us.

Mike: Yeah, that’s good. I think that’s a big key, right? Is when you can free up your staff’s time a little bit more because now they can work on things that need to get taken care of, some social media, things like that will help produce better revenue for the property.

Tenant retention, every apartment owner, that’s  a big question. Any special techniques that you use on a tenant retention [00:29:00] side that work better than others?

Kyle: Yeah. The first thing that I would say is make sure you fix all the deferred maintenance and it service calls are getting done immediately.

There should be no reason why someone calls in and doesn’t have a working appliance or there’s a leak in their kitchen and no one gets to it for even a week, two weeks, three weeks, properties, we take over. Some people haven’t had a working fridge for months, and so that’s unacceptable and you’re not going to have any retention in that case.

So make sure you get to those things and show that you care about the residents and then fix all the deferred maintenance items and going back to freeing up time. If you fix all the deferred maintenance items, there’s going to be less for your maintenance staff to do so they can focus on other things, like cleanliness of the property or in house turns, depending on if you do that as well.

And then one thing that we’re starting to do is instead of a renewal letter to residents, we’re doing an anniversary letter. So it’s a little bit of a twist. It’s still the same thing. It’s still going to ask for an increase in rent, but it’s, Hey, congratulations for staying with our community for one year. We really appreciate it. And so on and so forth [00:30:00] versus, Hey, here’s a renewal letter for a $53 increase in your rent. Please let us know if you want it or not. So that’s one thing we’re trying. So it’s something that we just implemented, so we don’t have any data for that yet, but we are starting to track it.

Mike: I like that, I think that’s a great idea, that kind of takes the edge off, it doesn’t make somebody feel like, Oh God, now what do I need to do? You’re saying, hey, listen, thanks for being here. Thanks for being part of the community and we’d love for you to stay and be part of the community for another year.

And I really liked that. I think that takes a big edge off.

Kyle: Yup.

Mike: Technology, best software, best system that you have right now that you feel helps streamline things?

Kyle: Yeah, it’s our KPIs. So we use “Real Page” to basically integrate with Yardi and Yardi is the software our property management company uses.

So RealPage has been a real help because it takes all the data and puts it into KPIs and we get to choose what those KPIs are. And when you have to organize them in a way that, we can just [00:31:00] see them how we want. And you can see data views, you can see graphs, you can drill in. And so that’s been really efficient because otherwise I’d be pulling 10, 15, 20 different reports to get that snapshot.

And when you can look at it on one page, it really shortens the timeframe that you need to look at things and allows you to see things visually to predict trends, to see trends and things like that to manage a property.

Mike: Yeah. Interesting. So this show’s calledInsider Secrets. And one thing I always like to get my listeners to do is give a new investor or even a seasoned investor, one of those insider secrets that you feel best has helped scale your business or helped you to get to where you’re at today?

Kyle: Yeah. One of the biggest mistakes I made when getting started was I didn’t hire people quickly enough. And now we’re in the point of our career where we want to be ahead of that game.

We want to hire someone three to four months before we even need them. So there’s no bump in the road, it’s just as a smooth sailing. And so I would have really hired a [00:32:00] virtual assistant or even executive assistant, much quicker to take some things off my plate to allow me to focus on the things that allow us to scale, which I now have that ability. But if we would’ve started a year ago, we probably would have been able to grow much faster.

Mike: Yeah, interesting. That’s something always to remember, isn’t it? Any last thoughts that you would want to talk about before I go to the second part of the show?

Kyle: Just make sure that if you’re buying apartments, you understand the whole thing. And that just buying an apartment is not the end of the investment. That’s the start of the investment. And the real work starts on day one when you take over. And so you really have to have someone on your team that understands how to manage a business and really drive it home.

Mike: It’s interesting you say that Kyle cause I wrote a book called Exit Plan.

Kyle: I do.

Mike: I talk about that in there, right? That too many people walk away from the closing table going, okay, now what? When you really should be prepared before you ever get to the closing table of how that takeover is going to be, how your cap ex is going to go, how your exits going to [00:33:00] go.

And it’s an interesting process that some people they go into it blindly.

Kyle: No doubt about it.

Mike: Yeah. On the other side, that makes good deals for guys like you and I.

Kyle: That’s right.

Mike: Hey so a couple of questions I always like to ask, where do you live now that you’re moving to Phoenix?

Kyle: I live in Southern California right now so in that just 30 minutes South of LA. But moving to Scottsdale here in just a couple of weeks.

Mike: Okay. All right, great. Somewhere in that region, what’s your favorite tourist attraction?

Kyle: In which region?

Mike: Southern California, between there. I don’t know, something in the desert, maybe.

Kyle: Yeah. And the desert, it’s the hiking out there, Sedona, we like to get away out there a little bit. You got a lot of good hikes out there. And one thing that I’m really excited about to move to Arizona is the hiking. As far as in the LA area, I’m a big golfer. Any golf course out here to go out and hang out with friends is a good one.

Mike: Hey, I always say there’s nothing like a bad day at Pelican.

Kyle: Yeah, exactly. [00:34:00] As long as you bring enough golf balls.

Mike: That’s right. That’s right. I I liked the one sign. I can’t remember what whole time, but it says beware of rattlesnakes.

Kyle: Yeah, exactly. You’re not hitting the right spot then.

Mike: Hey how about a favorite restaurant?

Kyle: Favorite restaurant is going to be, Oh man. I should have had this prepared. There’s a Japanese restaurant my mom loves it and it’s one of the reasons why I love it. But it’s called Otafuku, it’s in LA and they make handmade soba noodles. And I really like it.

Mike: Nice. Interesting. Have to try that next time I’m out there. Best book you’ve read?

Kyle: Best book I ever read, it’s gotta be, I always say this, but it’s “Cashflow Quadrant”. It really changed my life. A lot of people say, “Rich Dad Poor Dad”. It really was “Cashflow Quadrant”, understanding how to get to the right side of the quadrant.

Which ever since I read that book, I’ve been working diligently to get on that right side of the quadrant and have now several income streams on that side, which has been very beneficial.

[00:35:00] Mike: Yeah, there was a book years ago that kind of alluded to all that multiple streams of income. And I think that’s a place we all strive to try and get to. So that’s really good insight. Listen, I want to thank you for being here today. You’ve been a wealth of knowledge that’s for sure. Any last thoughts?

Kyle: We do have a summit coming up that is revolved around asset management and it’s completely free.

And really Gary and I are just trying to get the word out that asset management is hugely important and you do need to educate yourself on it. And so that’s June 21st through the 27th. It’s “AM Summit 2021.com.  And like I said, it’s completely free. It’s a virtual event and it’s a seven day event.

Mike: So for them to register for the summit. Tell that web address again.

Kyle: Yeah. www.amsummit2021.com.

Mike: Okay, excellent, good. And I hope that you get a lot of people there for that. I think it’s a topic that needs to be discussed that people need to be more aware of and it will be helpful for them in their business.

And Kyle, how [00:36:00] do people get ahold of you, if they want to pick your brain a little bit or see a little bit more about what you’re doing?

Kyle: Yeah, you can always schedule a call with us at our website, aptcapitalgroup.com. We also offer a free passive investors guide on our website, and that essentially educates you on everything you should know before you get into your first passive deal.

Mike: Awesome. Listen, thank you very much for being here today. I appreciate it. Like I said, you’re a  wealth of knowledge and I learned a couple things today. I like the anniversary letter versus the renewal letter. I think that it’s really smart thinking.

Alright. Hey everybody, thanks for being here today. Again, we’ll be here every Tuesday. It’s Insider Secrets, and we look forward to seeing you soon.

Kyle: Thanks, Mike.

Kristen:  Thank you, Mike, and thank you for joining us for another great episode of Insider Secrets. As always, Insider Secrets is brought to you by My Core Intentions. Join us on social media and visit mycoreintentions.com where you can get expert coaching on all things, [00:37:00] multifamily investing in property management.

We’re looking forward to having you back again next week for more Insider Secrets.