Insider Secrets Podcast Episode #92
Guest: Lisa Russell
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Lisa Russell has been a transformational leader in the Multi-Family industry for over 30 years. She started managing apartments her first year in college and never looked back. By the time Lisa graduated from the University of Houston with her Bachelor of Science degree, she was a property management professional.
Throughout her career, Lisa has directly supervised more than 900 million dollars in assets over 20 major markets across the nation. From Manager to multi-state Regional Director, she specialized in capital renovations, new construction, value add, and lease-ups.
In addition to Asset Management, Lisa helped develop and sell a property management software application to a large vendor in the industry. In her most recent role, Lisa was the Chief Operating Officer for a company that specialized in the development, construction, and management of large multi-family assets in the Southeast.
She started Meta Leasing LLC in 2021, specializing in consulting, training, and asset management to improve operations and deliver financial wins!
Lisa’s commitment to the world is learning so currently she mentors young investors and new industry professionals on Clubhouse
One of the things I would tell you is the team has to be a United team. They have to be a synergy.
If you ask a leasing agent today, they don’t read the lease, they don’t know the lease. And the difference is because we have e-signature.
The technology over the past five years has altered the core fundamentals that we were doing as an industry.
What we’re doing is we’re layering on more technology on top of more technology. We’re not removing any technology, we’re layering on more and more.
Believe it or not, customer service is still king. So if they’re go-getters in the retail space and have been trained properly for some of the upper brands or in the areas of customer service, we can teach them technology.
Protect our teams and really have a strategic marketing technology plan, way before you get those on-site teams involved in it.
If you have people who are on your site now that never knew the basics to begin with, they don’t know old school any longer. Your old school people are now your regional directors or your corporate people.
“It was really a fun opportunity to really have built that experience with limited knowledge and just got thrown into the fire, like I think we all do in this business”- Lisa
“I actually shifted conventional properties that had leases expiring all year and I converted them to a nine-month rotation with a summer rotation as well” – Lisa
“It’s cool is once those systems are in place, things tend to run a lot smoother” – Mike
“There was a synergy happening back then in the nineties where all of that collegiate housing was developing”- Lisa
“I have a five-part system on those properties that goes all together as a formula. And when that’s working, those properties are at maximum capacities, occupancy and rent.”- Lisa
“When you have an owner and built those relationships and you have systems in place that you can put in any market. Once those systems are in place, they speak for themselves” – Lisa
“We’ve had situations where we would get a lead process of about 40 leads on an average property that now is getting 150 leads. Imagine that volume” – Lisa
“Back in the day, we didn’t have a separate text system. We had to check if you had a whole conversation with a new prospect.” – Lisa
[00:44] Intro to show and today’s guest, Lisa Russell.
[03:45] One word that describes Lisa personally and professionally.
[04:35] Lisa’s background and professional career.
[07:17] Starting in the Student housing space.
[08:39] Talking about “by the bed versus by the unit rentals”.
[15:05] The defining moment in Lisa’s life.
[17:34] Top three most important systems an effective property manager should have.
[24:00] Lisa shares her opinion about the best hire today in the multifamily space.
[28:47] There is nothing better than the old-school process in the presence of technology, social media, and all the stuff.
[30:34] The role of social media in good operations of property management.
[34:36] Lisa shares her Insider Secret.
[37:19] Favorite tourist attraction of Lisa.
Kristen: [00:00:00] Welcome to this edition of Insider Secrets, the weekly podcast that turns real estate investing goals into reality. Each show we interview guests who are seasoned real estate professionals, actively closing and managing real estate deals. Mike is the founder of My Core Intentions and would like to help you make your real estate investing dreams a reality.
Mike coaches you to buy investment real estate, creating short-term cash flow and long-term wealth. Your host and real estate coach, Mike Morawski has more than 30 years of real estate investing and property management experience. Here’s your host, Mike.
Mike: Hey everybody, welcome back. It’s Mike, your host of Insider Secrets. Today, I am joined by a good friend of mine, Lisa Russell. We’re going to talk about property management. Hey Lisa, why don’t you say hi to the listeners and tell them a couple of things we’re going to talk about inside today.
Lisa: Great Mike. Yeah. We’re going to talk a little bit about my favorite [00:01:00] topic, which is the transformation of kind of old-school management styles to new technology. And so we can see really what are the ins and outs and what do we have to look forward to over the next couple of years?
Mike: Hey, my vote is old school is still the best everybody has to listen in. See you inside.
Hey everybody, welcome back. It’s Mike, your host of Insider Secrets and it is a regular weekly episode. Glad that you’re here today. Insider Secrets is brought to you by My Core Intentions. And I always ask, what are your intentions today? What did you get up this morning and decide that you are going to do?
How many clients were you going to see? How many properties were you going to look at? What were you going to underwrite? What types of steps were you going to take in your property management operations to re-engineer a property?. What were your intentions today? You know what, I want to make sure that you’re empowered and be able to do those things, complete those intentions, and grow your business.
And, I always say that nobody grows [00:02:00] professionally until we grow personally. So how do we help you do that? What’s the stretch that you need to take today or this week that’s going to take you to the next place. I’m glad that you’re here today and I am super, super excited about today’s guest.
This is somebody that I just met recently over the last few months, we got to meet in person. We met in clubhouse, spent some time together in and out of some rooms. Really got started to get to know each other and met in person. And then just from there, the relationship’s really grown and I’m excited about my friend, Lisa Russell. Lisa, say hi to every.
Mike: And Lisa comes with 30 years of real estate knowledge and experience. Kinda like me, we probably been in the business about the same amount of time. But our focus has all been multifamily housing, mine was a little bit of residential. But Lisa has got 30 years in the multifamily housing industry. She’s now on the property management operation side. She’s committed to [00:03:00] strong cultures, building a strong culture, developing strong and resilient teams.
And that’s really something that we’ve talked a lot about lately. She’s committed to achieving financial success in her portfolios for her owners. Lisa’s commitment to the world is that everyone is seen, heard, and valued. Boy, that’s a big statement, Lisa. Hey, welcome. Glad that you are here today.
Lisa: Great. Thanks so much, Mike. Excited.
Mike: So Lisa, I always start my show with one question and I ask all my guests this, and I don’t know someday, I think I’m going to take all of this and I’m going to write something with it. But in one word, what best describes you personally and professionally?
Mike: So that’s my word. And you’re probably the second person in that’s.
Lisa: How did I connect with you on that one? Huh.
Mike: So that just goes to the synergy that we built. And what’s really cool is you and I have built this [00:04:00] relationship mostly off a clubhouse. Listen to each other and had conversations and we’re in these spaces where we got that to just learn about each other and I think that goes so much to the real estate space about building relationships and how do you build good, solid, strategic relationships with people?
Hey, do this for us for the listeners, fill in the gaps. Take the next few minutes and just talk about your background and how you got into the crazy world of real estate? Cause I always think it’s crazy, but how you got into this crazy world, and what do you like? What do you not like so?
Lisa: Yeah, I love building teams. That’s probably one of the biggest that you said. And what you also said is as you are networking and developing people that being seen, heard, and valued I think is a solid foundation that whether it’s an employee, where there’s an investor or a vendor, anybody that you’re dealing with on a day to day basis.
I really just look at that as the [00:05:00] key fundamentals for myself. How I got started in the business. It’s a really funny story, but I showed up to college and needed a job and walked into the housing department at Stephen F. Austin state in Texas, and said, I’d like a position working for you guys.
And they said, we have some apartments that you can manage, and it’s all the football players. And our married housing and you can just handle all the apartments. And so literally I started college and became a real estate professional all at the same time. It was really a fun opportunity to really have built that experience with limited knowledge and just got thrown into the fire like I think we all do in this business.
Mike: Yeah, cool. Listen, there’s a difference between us cause you went to college, I didn’t. It’s funny. Listen, did you go to college for real estate then?
Lisa: Actually my degree ended up being from the Conrad Hilton hotel restaurant management school in the University of Houston.
So I transferred down to [00:06:00] Houston, ran one of their largest residence hall facilities and their apartments on campus, and finished my degree. And so once I did that, I was really hooked. I’d already done almost five years of resident management, student housing, and decided I wanted to get into the conventional space eventually.
And once I transferred over into the conventional space, I was in Tampa, Florida. And it was 1200 units. So I became the business manager for 1200 units right there on, in Tampa bay on the coast way. So yeah, I went right into the fire and then starting on the largest community to date that I’ve had that I’ve handled.
And then did that for a couple of years. And then what I found is I’ve misleading between student housing and conventional housing. But as I grew my profession and was recognized and promoted I got to a level that I was doing multi-state regional director and I was actually in 20 major [00:07:00] markets.
So that was a 10 year on a plane Monday through Friday kind of career. And it was intense and fun. And I learned a lot about the different markets that we have out there.
Mike: Very cool. So really you started out in the hospitality space?
Lisa: Student housing. So in the student housing space apartments and residence halls and really that whole world of by the bed leasing is really what it is. And I worked for five major universities. So I actually went on to work for some other universities, and I thought that might be my career path at one point. But I really liked the conventional side of it because the university works with the state budgets and doesn’t necessarily look to the fiscal responsibilities.
I really found that once I came into the conventional space that I really enjoyed having that budget accountability, really having the policies and procedures, and really [00:08:00] not having ever done it before, it was all like, I love learning. And so that really gave me the opportunity to learn something new. I’d never done evictions in student housing, so it was a whole new learning curve. I felt like I’d entered almost a different career so.
Mike: That’s interesting. So listen, one thing I have never gotten into all my years in real estate and the multi-family space is student housing. I always shied away from it.
The horror stories about parties and, the trashing of units. Talk about some of the differences between by the bed versus by the unit rentals.
Lisa: Yeah. So different university environments are different. College housing came up while I was in the industry. There was no professional collegic housing organization, or if it was coming, it was just becoming popular.
And they build right outside the university on private land. And then they would do the four-bedroom, four beds [00:09:00] in a traditional-looking apartment. And then they would fully furnish it, that kind of thing. And so we would partner with them in some cases, the university would own some of those as well.
So there was a synergy happening back then in the nineties where all of that collegiate housing was developing. But I also got to see how our university environments use bonds. And bond systems within the state to build on-campus facilities. And so there’s a bond process and that’s why a lot of our stuff was built in the seventies because there was a big movement and bonds that were built in the seventies to build those big high rises that you see on college campuses.
And then that partnership with collegic housing, which was more of a corporate entity, came in and married the two. And so there’s always a challenge in that industry, but I love it. And I seem to look for that college or university element wherever I go. And I was in Omaha one day taking over a [00:10:00] conventional property and about halfway through the due diligence, I said, It’s a student property.
And they were like, no, it isn’t, this isn’t a student property. It’s what they were trying to like, not label its student housing. And I said, you don’t understand, I can really increase your rents every six months here. And the guy looked at me like every six months and I said, oh yeah, we’ll do some master leases.
And we’re gonna up those renewals and we’re going to up those prices and we’re going to max out probably more than you’ve put in your performa for sure. And so his ears perked up and he was happy as a clam to find out it was a conventional housing that we could capitalize on a different structure. And once the structure’s in place, he met all his financials.
Mike: So were you able to do that? Did you actually perform on that statement?
Lisa: Oh, yeah, absolutely. If I walk in and I see a student element and I know that we can capitalize on that, then they don’t understand the numbers cause they can’t see it in the numbers.[00:11:00]
And they would say to me like, we want to do 18 months leases and I’m like, I don’t, I want to do nine. And they’d be, nine? And they wouldn’t understand the cycle. So I actually shifted conventional properties that had leases expiring all year and I converted them to a nine-month rotation with a summer rotation as well.
And we converted that property, even though there were conventional people living there, we had a student schedule and we maximized and we would be almost a hundred percent occupied, six months out of the year.
Mike: So I would imagine even at nine months when you took that performance to the bank cause one thing in multifamily is the bank doesn’t want to see month to month leases.
Mike: Or want to see more long-term. But I would have to imagine that when you went for funding on that type of a project that the bank would still look very favorably. I guess my point is what happens to the debt service coverage ratio? Does it increase or like if you [00:12:00] underwrote a deal like that, what did it increase or decrease in that model?
Lisa: One of the things that happened is I converted it. I converted one of the sites that I did that way and didn’t tell the lenders or the bankers or anybody. And then they showed up and did a review. And when I went through all the numbers, they got to see what I really capitalized and how I really was able to do that.
The bankers were so shocked, they didn’t say a word. They checked the box and were happy and they said, whatever she’s doing, she needs to keep doing it. And so when they saw the numbers compared to the performa, compared to what was already out there and we had that one of those properties for a couple of years, but we hadn’t identified that element to switch. And once we made that change, they were able to see just how impactful it was hitting on the bottom line. And those kinds of changes, we made five major changes on that style of property when we would identify it. And I would have the competition [00:13:00] coming in and saying, what are you doing? How are you doing that?
They could figure out about three of the five, but they could never get the full formula. So they would try to replicate it. And then there would be an issue. And I have regionals that wouldn’t mind to take me to lunch, to find out what we were doing, but I have a five-part system on those properties that goes all together as a formula.
And when that’s working, those properties are at maximum capacities, occupancy, and rent. Like I said, the market would react because they could never get to that formula. And didn’t understand that we were actually hitting and having and Mike, this is probably one of the things that shock the people the most I’ve replicated this at least five times at different locations in California, in Texas in like I said, Omaha, and as we did those and we did these conversions and worked with what we had, the biggest thing that showed up [00:14:00] was that we were able to have that consistency year over year that you could almost set your clock by it. And we would have a waitlist and this is the shocker that nobody understood back then. We never showed, we didn’t show a model. We didn’t show anything.
So we stayed on a permanent 100% no-show policy because we were that full all the time. Now, fast forward all of that to 2020, I had already created forms and systems and put them in place that my teams were already trained not to show. And they already had that as part of their tool belt in case we ever needed it.
And so in 2020, when we went to virtual leasing, my teams were already ready because they had that was something they already had been taught and knew how to handle.
Mike: Nice. Boy, at once you get your arms around those systems, it’s easy to replicate and it’s easy to make them work time after [00:15:00] time.
Hey, tell me this. So what was the defining moment in your life, in your career?
Lisa: I can honestly say I had been doing a lot of rehabbing and a lot of where I was going to different sites doing due diligence, really taking care of individual ownership.
And one specific owner came to me and he asked me questions about a property that was in California. And I wasn’t in the California market, but I was giving him my formula, my answers, and everybody kept saying, don’t speak on that because you don’t know that market. And I said, but I don’t need to know the market.
And then they’re like, why do you not need to know the market? You’re giving him advice and he’s going to take that back and implement it. And I said, then he needs to because this is what’s missing, this is what he needs to do. And that owner went to bat for me and immediately my career took off and he gave me not only that site which was $450 million site to take care of and recover [00:16:00] in 2009, when we all know needed extra supervision, but we successfully recovered that site and it sold at a profit. And so when you have an owner and built those relationships and you have systems in place that you can literally put in any market.
Once those systems are in place, they speak for themselves. Even to the point that California market, once we’d sold that facility, the management company came in. The new management company had never done those processes and the manager, they kept them on board and she fought to keep those processes in place.
And they actually listened to her and listened to her experience and they successfully kept those procedures in place. And so that’s when you know somethings got a legacy, is what you would call it. Because I want those systems and structures to work well past my involvement, [00:17:00] anything, I’m not the one steering it at that point.
The manager had the system, understands that formula, and could now herself duplicate it with another.
Mike: It’s really cool is once those systems are in place, things tend to run a lot smoother. So I really want to know over the years you’ve built systems and found ones that don’t work.
What do you think are the top three most important processes and systems as an effective property manager that you have to have in place to get a final result of property value increase.
Lisa: So some of the answers I would have told you five years ago are different than they would be today. And I’m going to tell you that because we’ve faced 2020 and 2021 and hitting the wall, even on some tried and true processes. One of the things I would tell you is the team has to be a United team. They have to be a synergy. We go back and talk about our staff and we talk about our teams, but we have, what’s called a 10 year [00:18:00] knowledge gap right now. In 2009, we were at a certain stage that I could go into almost any leasing agent or clubhouse office, and I would say to the leasing agent explain the least to me and tell me what’s what the lease entails and tell me what you could do or not do according to this lease.
And that was whether it was Texas, California, wherever it was. If you ask a leasing agent today, they don’t read the lease, they don’t know the lease. And the difference is because we have e-signature. So we used to sit with paper lease in front of us, go paragraph by paragraph, and show them an initial. We used to have to know the paragraphs. We would explain each paragraph with a short sentence. Now we just email it to them and they do an e-signature.
Mike: Time up. So I’m an owner-operator, I’m a syndicator. I raised money and put deals together. My property manager. I don’t want them to do that.
Lisa: That’s what I’m telling you. So that’s what I’m trying to tell you. The [00:19:00] technology over the past five years has altered core fundamentals that we were doing as an industry. I’m giving you one example, where I’m telling you that is happening across the board, across the nation right now.
And so some of that is back to basics. Some of that is that you have to come up with another format in which to educate the lease.
Mike: So isn’t this a great format. And we could pull the lease-up in front of us right now. And if I’m the property manager moving you in, I could go, okay Lisa, so here’s the price. This is what the lease is going to be. Could you just electronically initial in the margin right now that we covered this? And here’s what the term is. This is when you’re moving in and when you’re moving out, could you just initial in the margin right now? So, couldn’t you still bring that bit of what used to really be a personalization, right?
You’re really building the relationship with the [00:20:00] tenant. And can’t you still do that by zoom and the technology that we have today?
Lisa: No, they’re not doing it. The question is what’s happening. So that’s the bigger picture that I’d like to cover with you a little bit today. And that is how has technology altered our industry in a way that we are not even present to. And things that we took for granted are now gone.
And they died out over 10 years. That’s why I called the ten-year knowledge gap because over the 10 years manual processes that we had in place for 20 years, started disappearing. And they started being replaced with technology. The question that we have today as owner, operators, as asset managers, is what the current systems are in place?
And are they being executed accordingly? Is there still another way that you can convey those same points, whether it’s a [00:21:00] one-page, bullet point of the lease, and maybe another initial signature that you did cover that with them when they picked up the keys. But what I’m trying to tell you is that’s where we’ve had to rethink the wheel with technology.
And some of the examples are that our passwords, I was a manager and a regional director that back when we had no computers sitting on our desk, or if we did, they were AMSI and now we’ve got 22 passwords on each site. That’s the handle keys? That’s the handle the door fobs that’s to do the and the door Kings and the Yardi and the blue moons and the app folios and the call max, which is answering the phone and all of these technological things that we’ve added to the plate of our onsite teams. So if I can be.
Mike: Technology was supposed to make everybody’s life easier.
Lisa: No, I’ve had to add [00:22:00] staff. I’ve had to add staff to the office at large locations where we could have in the past, handled it with three. We now have to have four or at least three and a half. So unless you were recreating the wheel, which is what I’ve been doing for the last six months is repositioning myself and my teams and my philosophies to shift with the times and make sure that I’m protecting my teams from the technology.
And what we’re doing is we’re layering on more technology on top of more technology. We’re not removing any technology, we’re layering on more and more. And it will put the strain of training and education back onto our management companies. And that’s where we will see what happens in the future. That’s gonna really show who’s on their game.
Mike: Yeah. It’s going to really separate talent from non-talent. [00:23:00]
Lisa: Absolutely. Absolutely. And imagine being a new employee that comes in and as a seasoned manager of 10 years and thinks they know their job. And all of a sudden they’ve been given 10 different new technology programs that they’ve never worked with before. So you just took a seasoned veteran manager and she’s now in a brand new learning capacity role and being expected to still produce the reports and, manage the property and control her expenses and learn 10 different technology systems.
Mike: So let’s talk about this. Do you think that you can take somebody today in the multi-family space who’s your best hire? Is it somebody who is coming from a totally different industry and knows nothing about real estate? Or is it somebody who has a little bit of real estate knowledge, maybe some property management knowledge? Where’s your best hire come [00:24:00] from today?
Lisa: Believe it or not, customer service is still king. So if they’re go-getters in the retail space and have been trained properly for some of the upper brands or in the areas of customer service, we can teach them technology if they have nowadays the technology of the phones, computers, and that kind of thing. But that’s where your processes have to be ready to adapt to an assistant manager that doesn’t have the skills that we would normally have expected a seven yearseven-year veteran assistant manager to have. So she’s got to have training that would in some cases be all the way back down to leasing. And she may have to have additional time built into her onboarding procedures to make sure that she really is checking the boxes that she understands those things and not just a wink nod.
Here’s the keys, please run the place. It really is are you setting up aside time, do [00:25:00] you have teams in the corporate office that are supporting that training. And in busy offices today with the phone ringing non-stop, that’s where we run into the challenge is people are using the technology also against us.
We’ve had situations where we would get a lead process of about 40 leads on an average property that now is getting 150 leads. Imagine that volume. Okay.
Lisa: Huge. And but that’s, they’re using the internet. They’re Googling, the advertisements out there, the bots are there, everybody’s searching for those leads as they come in. You’re still doing old-school follow-up. You’re still having to connect, like you said, with those people. So how is today’s technology connecting us in a way? And we’ve got, oh, we’ve got texts [00:26:00] programs now, you can text with the computer and it comes up on their phone and it acts like we’re texting with them.
What happens when that person doesn’t understand the text system or if there’s somebody else that gets involved in the conversation. Back in the day, we didn’t have a separate text system. We had to check if you had a whole conversation with a new prospect. So all these things, they all look good.
They’re little shiny objects, and we went all over him and we sign up for him. We do the demo and then that’s the second part. This technology, we get promised something, we see it in the demo and then they can’t integrate into our systems for over a year. That means that you’ve got something you really want to use and implement with your teams, but one system doesn’t want to talk to the other system.
So again, I’m not trying to overwhelm you. I’m trying to give you the overwhelm that those teams feel so that you can understand that we’ve got to pull that back, protect our teams [00:27:00] and really have a strategic marketing technology plan way before you get those on-site teams involved in it.
Mike: Interesting. Man, there’s just so many moving parts to. I think that the industry has gotten very fluid, right?
Mike: One thing I like about multi-family is there’s always something to learn. You can grow.
Mike: You can learn. I actually heard somebody say, one day she goes, I really liked multifamily investors, and she wasn’t in the industry. She said, I really like multifamily people because they’re always on this education quest.
Lisa: Yeah. And you have to, think about it, Mike. I have to know the difference of the types of Freon that are in my air conditioning systems, as well as how the irrigation systems work, in addition to what a legal binding lease and document is if I’m an on-site manager. If I’m a regional manager, I’ve got to even know broader scopes. And then all the way up to the corporate level, they’ve got to relate with these people that are onsite hands-on and then [00:28:00] make sure that the technology supports. And so I think we’re in that shift, we’re in that matrix per se of really having to make some tough decisions as leaders. And that’s exciting to me because I happen to be somebody whose foot is in the old school technology, the old processes, and procedures, but I also understand, and all of the new technology coming on board. So I’m excited by that shift. But it is a transition until we fully get there. If that makes.
Mike: Hey, you know what? Listen, I always say this, that all this new stuff that we have the technology, social media, all that stuff is great. It works well, but really when it gets right down to it, nothing better than old school.
Lisa: It is. You got to go to the basics. But here’s the thing. If you have people who are on your site now that never knew the basics, to begin with, they don’t know old school any longer. Your old [00:29:00] school people are now your regional directors or your corporate people, which are so separated from the day-to-day days on-site, then how is that old school maintained or is that something that it will be like dinosaurs and die off.
But how do we preserve that? How do we make sure that customer service is still number one in the world of technology where disconnection happens. And I call it there needs to be a VP position in every major management company that is strictly on Systems, processes, technology, and that the evolution of where they are. And the companies that want to stay in old school will be left behind. Because that technology will rapidly leapfrog some of the people that have not embraced the technology.
Mike: Always remember this, bell bottoms will circle back.
Lisa: They will. And so will answering the phones. But right now, that’s the challenge within the chats of [00:30:00] all the onsite property management insider magazines and all the great resources we have. The teams are telling you what’s going on. So listen.
Mike: Hey, Elvis owns a bait shop somewhere near lake meet in Vegas.
Lisa: I’m sure. I’m sure of it.
Mike: Listen. So talk about social media. How does social media play a part in property management, in good operations? I see some property managers out on social media, really doing some things and a lot of others that aren’t. So does it play a part today?
Lisa: Absolutely. So here’s the other thing is that you’ve got young people out there that are very good with some of the social aspects of it, but it’s case-by-case side by side.
So how do you combine those resources and have that social media may be even handled by one or two people? And that you’re not relying on having a social media guru on every site, but that you could have a good rounded [00:31:00] social media team that really keeps that moving. Because we tried to say just like old school, you just handle your own on-site.
And then pretty soon that leasing agents handling all the social media, all the moving paperwork, all the customer complaints, everything to COVID and beyond, and not to mention if there’s package acceptance or any other dramas for the day. But social media has basically gotten more people talking about where they’re living.
It’s got more people talking about whether they’re a review where you live and die by those reviews these days. And we say to ourselves, how are we impacting our residents in a way that truly does make a difference that those are organically happening. Those reviews are organically happening. And and right now it’s not always people that want to advertise [00:32:00] where they live.
As a single female, do you want to promote and put your name out there and say, I live in these apartments and this is my, where I’m going to live, and I love living here? It may not be the safest thing to do. So when you ask some of those people to do those reviews, there is sometimes still hesitation. And not wanting to have that exposure per se, where they live.
Mike: Man, we’ve covered a lot of ground here and I can’t believe how fast the time goes when we’re doing this. So you know, this is Insider Secrets. Any secrets that you want to share right now, or any last thoughts from a high level that you know, something that a new owner-operator maybe should be aware of?
Lisa: I think my favorite and not-so-favorite topic is fraud and fraud that’s in the systems of applications. I do know, and I’m excited to say with goodthe news we know there’s a problem, but we also know that there are solutions coming. That there is multiple vendors that are out there working with either AI and technology, [00:33:00] as far as data science goes that are working to pull together a kind of resident profile that may be something that we could actually be able to share with people, right?
So that we would be able to have some sort of a database or some sort of way that we could do some verifications in the future amongst each other, those kinds of things. So I think some of that is coming. It’s about 75% effective right now. And so I do think there’s again, that transition period. So I think the Insider Secrets is you have got to make sure your teams are scrubbing those applications, that your rental criterias are being adhered to as much as you possibly can. And that you’re asking questions about how can fraud impact my community and how do I see it first?
I see it in Skip’s even way more than evictions. You’ll see it in Skips because they’re not going to get a quarter of their fake. And the second part of that is that you need to be able to identify if your teams are identifying. Because in some [00:34:00] cases that may be, they’re just checking the box, they’re exhausted and pushing some of those applications through to make their numbers and really make sure that we used to do that. Back in the day, maybe a two to 5% fraud was happening that we weren’t aware of.
And it was like, we know it’s there, but we minimize it with our bad day. And nowadays some properties up to 50% can be affected.
Mike: Man. That’s a crazy number when you think about it. So somebody that’s committing fraud, what are they getting out of it? From the tenant side, is it just they’re getting housing and that they might not normally be able to get?
Lisa: That’s correct. So here’s the big picture that I see it, and this is Insider Secret and you’re only getting it here. That is, we always have seen in recessions or when there’s times of shifts and changes in the market that everybody levels up, they go from a C property to B properties when it’s good times.
Because you’re A people are buying houses. So you’ll see that [00:35:00] rotation of one level, right? That’s our industry. We do that periodically. That’s nothing new. What’s new is if you’ve got somebody that’s not meeting your rental criteria normally would not ever be accepted into that property.
They’re actually using that fake persona and they’re living in A properties. So you’ve now got a competition of living in those nicer communities at the top, who’s your client.
Lisa: So that’s the question. So we’ve got to see that shift is pushing up. Now, those owners that are out there in the C and D properties, they’re going to be affected the most because that’s their clientele they’re losing to a and B properties.
Mike: Got it.
Lisa: Okay. We used to lose to sub-markets, right? Housing that was in the area that used to be your only real major loss if we had a major shift. What we’re seeing now is [00:36:00] complete shifts as far as accessibility to apartments.
Now I think everybody is at some point in time, needs to be realistically judged and held to that rental criteria. But we need to know that the information that we’re given as an risk management is how are we qualifying them based and how are we doing our risk assessments on that? And so it’s just keeping that exposure right in front of you. More now than ever before. If we go into 2022, if you’re not looking at your exposure daily, that’s where you want to go look at now. That’s going to be your number one.
Mike: Probably this goes back to a couple of things, right? We’re in a shiny object syndrome world today.
Mike: Don’t pay attention to some of those details that we need to pay attention to. You get distracted by social media and you’re not paying attention to some of the details so I can [00:37:00] see where a lot of that would slip through the cracks.
Mike: Good stuff, Lisa. Thank you. Hey, let’s shift up a little bit. Let’s have a little bit of fun here right now.
Lisa: Yeah let’s do it.
Mike: You have been around a little bit. You’ve seen some places. I always like to ask people, what is your favorite tourist attraction?
Lisa: Oh, my goodness. Everybody probably has different ones that I’m completely a Vegas girl. So I like the glitz and the glamour and the Vegas. And I just think that they have been able to really keep reinventing themselves and as real estate professionals that we are Mike, I think we can take key lessons from Vegas because they really will get hit hard, but they always come back.
Now helps when you’re gambling and spending some money and that influx of money’s coming in. But you’ll notice that parts of town that they completely renovate and they bring it all up and then they add a new feature. And[00:38:00] so as real estate professionals, Vegas needs to be our example that we have to think out of the box. We’ve got to get wild and crazy and put some funny, maybe flags up or some different types of paint colors, or whatever we might need to do is that keep it going, keep it evolving and growing and developing.
And I think that’s why when I go to Vegas that’s what I do. As I’m walking around, I have a property manager going that wasn’t here before they just built this thing in the middle of the strip, it seems like overnight. And so that’s where I think over the next 10 years, evolution, thinking out of the box, growing change in those paint colors, being flexible and really reinventing yourself over and over again with a team environment that really looks fluid like you said, that’s going to be our industry going forward.
Mike: Nice. Hey, I always say real estate that has flags, fountains and fences are your [00:39:00] best buys.
Lisa: I don’t know about the fountains anymore because we’ve had all kinds of issues with fountains these days, but you’re absolutely right. We want to make sure that there is an idea out there of what we’re looking for.
And Mike, when you’ve got the eye, and you’ve seen as many properties as you and I probably seen, it’s amazing out there when you see one that you’ve taken, completely revamped it, really redone it, and done a value add on it. And then you see the reaction of either the residents that are living there that are really extremely happy.
In most cases, they get the rent increases, but you also get to see something of a legacy you’ve left behind. And I have a couple of those that feathers in my cap that I still drive by. And I’m like, I created that sign or that there’s something about it that we changed, flipped the entire resonant profile or the owners wanted us to do something way out of the box and we did it and it worked. So [00:40:00] again, just part of my passion.
Mike: All right. Great. Lisa, if people want to get ahold of you, how do they reach out to you?
Lisa: Email is probably the best just to get me and it’s it’s firstname.lastname@example.org
Mike: There you have a great email address, right? Just coming up. Hey, Lisa, this has been awesome. Thank you. Always love your energy and what you bring to the table. I appreciate all your insight and knowledge.
And everybody. Thanks for being here this week. This again was another episode of Insider Secrets. Glad that you were here. And remember all we ever ask is that you just go out on social media. You like us, you love us, you follow us, subscribe on our YouTube channel, subscribe to this on wherever you get your podcast, whether that’s Apple or Spotify or any of the other platforms. And we’ll be here again next week. Thanks. Thanks again, Lisa. Talk to you soon.
Lisa: Thanks so much.
Kristen: Thank you, Mike, and thank you for joining us for another [00:41:00] great episode of Insider Secrets. As always, Insider Secrets is brought to you by My Core Intentions. Wherever you hang out on social media, you will find Mike and My Core Intentions. Please and follow us to get the most up-to-date real estate investing trends.
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