How In-House Maintenance Protects NOI and Preserves Investor Wealth | Ep 95

James: I wanna talk about toilets on this week of the Furlo Capital Real Estate Podcast. Specifically fixing toilets. All right. Or hiring someone else to fix toilets. That's, and a whole bunch of other stuff. An appropriate topic. Let's, let's talk toilets because we're here to dive into the intricacies of passive real estate investing, which hopefully means you don't have to fix any toilets 'cause we're gonna do it for you.

And our mission is to equip people to invest wisely in both property and people so that together we can fix toilets while building wealth and improving housing. I'm James, and this is my wife, Jesse.

Jessi: This is actually perfect 'cause we just we're, you know, you get into these routines where like you are not as on top of chores or like, you know, just, just like family routines.

Okay. Not necessarily like maintenance or big level things, but. I mean, that, that was the conversation of like, okay, well what's a realistic expectation here of like what we, what we can expect ourselves to do and our kids to do and like, you know, so tidy I think is an, an avoided word in our household.

Now. The kids know, we're like, it's tidy time. They're like, Ugh. Oh man. Yeah. It means we have to put everything away.

James: Yes. There's a whole nother conversation there about parenting and kids and teaching them to clean versus not, and, and just the idea of, because little, like, what the heck, we'll go down this digression.

We reached a point where we're actually thinking about hiring. Some house cleaners. Yeah. Like

Jessi: super part-time.

James: Yeah. Just because we're both busy and we've got stuff going on. Yeah. And I've listened to enough podcasts where it's like, Hey, if you're looking to save time, this is actually one of the highest ROIs that you can invest in.

Right. Like the, the price. For hours saved. It's like, it's like number one. Yeah. In terms of things to, to hire out and do. And so we're like, all right, all right, we're doing it. But there's all sorts of weird emotions. And one of 'em is like our own, like, well, we should be able to do this. 'cause we used to be do it in the past, which I actually don't like that argument.

I'm like, yeah, no, we've, we've leveled up on our priorities and we're solving bigger problems, which is great. What's different? But you have this other downstream impact of like, well what is this? What's the message we're sending to our kids, both in terms of us. Just expectations for them. Right. So it's an interesting debate.

It's like there, there's other layers. Like,

Jessi: you know, with health, some of my health issues, my energy levels are now lower tapped, and so I'm like, I have to prioritize what I spend my time doing, and I'd rather hang out with my kids stinking tumors than clean windows, you know? True. So it's like, okay.

Where's the, you know, where's the trade off and where do you maximize potential? Mm, yes. Which I, which is with maintenance. I feel like those are, those are questions like, what do I prioritize? Where do I focus? How do I know what to fix and what not to fix? And

James: yeah, I had a situation where I was which kind of kicked all this off.

It was the summer where I was managing a property for somebody. The tenants called me and were like, Hey, there's something going on with the garbage disposal. Mm-hmm. And at the time I was like, well, did you try clearing it? And they were like, we don't know what that is.

Jessi: I wonder what does that mean?

James: It was like, and I knew it was going to be a five minute fix. Sure. I just know I've done this enough times, so I'm like, oh my gosh, I just gotta get the Allen key and do it. So, yeah, sure enough. So I, I show up and they're like, Lee, it's not working. It's stuck. I'm like, I look on a little. Inside the, the cabinet is, sure enough, there's the Allen key and I grab it and go, yeah, you just put this on the inside.

They're like, oh, that's what that's for. I'm like, well, at least you didn't throw it away. And yeah, so I grab it and, you know, yank on it and pull it, clean it free. And like five minutes later I'm like, all right, you're done. It works. Now. They're like, wow, that was amazing. And I was driving back, like a half hour drive back home just being like, this is not the best use of my time anymore.

I need to hire someone else to do this. And so that's, I've been in the process of, mm-hmm. Of of hiring someone. Mm-hmm. Because we're now managing what is it? And include my portfolio plus other people's properties. Mm-hmm. I'm at 180 units really close to it. Units. 180 units. 180 units. That's a lot.

It's a lot. And

Jessi: I'm like, I kind of am in charge of managing one and I need help. So yeah, trying to do 180 and all the ins and outs of that is, that's a lot.

James: Yeah. But it's been interesting just to be fully candid. Like it's one of those where we have, we have a list of things to happen and I've just been slowly getting behind on the list.

Ugh. And that doesn't feel good. No, it, it, it's not. And there's like. And the hard part is like, there's some of 'em where it's just like, there's like 10 little things like, ah, like yeah, am I really gonna hire someone to come out and fix this thing? Right. And and honestly that's been like, we've been spending all of our time, like, or I should say my team now spends a significant amount of time saying like, Hey, who are we getting to go out there to do this?

And like, well, what about this person? Can they send us a bid and then we'll do whatever? Interesting.

Jessi: Yeah. There's a, there's a time component there that's like, oh yeah.

James: Yeah, it just

Jessi: takes way longer. And

James: honestly, like I would say, I'd say a third of it, it's just one of us just go and do it. 'cause it's just easier.

Yep. You're like, whatever, man. Like,

Jessi: well, like the garbage disposal thing, it's like right. Really? You're not gonna hire some third party contractor, maintenance dude to go. You know, loosen the thing. Yeah. Can you go loosen this up? Tighten a doorknob or something, you know, something like that.

James: So, so I've been like, so with like, these are real things that I'm, that I'm dealing with.

And one of the nice parts about being a passive investors, you don't have to worry about it. There you go.

Yeah.

And it's taken care of, which is fine, but it's got me thinking, right? So I put together a job rec or description, like, here's what I'm looking for, here's what I want.

Mm-hmm.

And, and I've like, it's, it's an interesting time to hire because.

I absolutely 100% have enough work for the next two weeks. Mm-hmm. I mean, two months, probably even the next three months.

Jessi: Interesting.

James: Like I feel to catch up, up on all of that. To-do list stuff. Yeah. And other stuff keeps coming up, so I'm like, all right. I feel pretty good. And then the interim, like the business continues to grow.

Sure. And so as long as I keep adding units, I'm like, I'm like,

Jessi: yeah, you think you could keep someone busy?

James: Yeah. Yeah. So, so the fear is

Jessi: like, you hire them, they catch up on the list, they're just super efficient, and now you're like, ah, I don't, don't have anything else for you to do. Yeah, yeah.

James: Interesting.

But the mark keep thinking about it where I'm like, you know, that's, that's, that's not gonna be true because there's not likely there's all the like the seasonal stuff that has to happen. Sure. Yep. And so I'm like, nah, that, that'll always like.

Jessi: Yeah. Continues to come back up.

James: Yeah. And so I think, so again, I I, this got me thinking more about like, okay, like should I, should I hire someone?

And, and it's not just because it's cheaper though. I think that is going to be also, I, I think, I don't know if that's actually gonna be true. I think it'll be true. Because well cost

Jessi: the savings in time. Right. Seems like that would, that would pay for itself. Yes.

James: I think so. Or you know. You better trade off, I

Jessi: guess.

James: It's an interesting, interesting thing, huh? Right. And so like I think there are some opportunities, like just maintenance delays are definitely a thing. Higher vacancies as we're waiting for units to turn is definitely a thing. I think there's tenant frustrations. Yep. That can happen. I think that it can, little things can turn into big things.

Ooh. Yeah. And it's not because we're ignoring, it's just. It's just on the list and we haven't gotten to it yet. Sure. And other urgent stuff keeps coming up. Yep. I, I think just as an investor too, it just starts to erode into your returns for all those reasons. Right. Because at the end of the day, like your net operating income is all about like that, the income piece of it.

Mm-hmm. And if you don't have people in it because they're not ready Right. Even though the expenses are low the numbers Yeah. You're still, still don't work out. Yep. So I've been trying to really think of it less as a cost center. And and more as like, no, this is a frontline defense for wealth preservation.

Oh,

Jessi: okay. That's interesting. More think of it more as like an offensive move than a defensive move.

James: Correct.

Jessi: Huh?

James: I'm trying, so I've got five ways. I'm trying to think of it that way.

Jessi: Okay. All right. I'm trying to just justify in my head like, oh, this is totally, here's your offensive justification. Like this is actually a good thing.

James: Oh my gosh, dude. There are so many things where I'm like, but I want it. And I'm like, and I, I try to, I can't justify this. I try to back into like, how can I justify this? Okay, so I could use some help. This is this. I could use some help on this one. A rabbit trail here, another rabbit trail here. I could use help on this one.

I wanna buy a 3D printer So bad. I can't stand it, but I cannot justify the cost yet.

Jessi: It doesn't make sense because.

James: The one I want turns out is super fancy. Yep. And like not $200. And and so like, I need business justification to buy this thing because if I do it for personal, I gotta get Jesse's approval.

Right. But if I do it for business, I don't.

Jessi: Right. Plus have to write it off. It's the business pays for it. Sure. And so,

Some of your ideas have been very creative. I must admit. I have.

James: I've, I am tried. I'm not, I got a 3D print. I'm not there yet. No, no, no. Spoilers. I yeah, spoil. Yeah. So anyways, if you got ideas, they help me justify buying a 3D printer.

We totally appreciate it. Hit me up in the comments or email me. Okay. But for boondoggle key chains, for a maintenance that I could print a lot of boondoggle, key chains, give some of your tots. That's a fantastic movie. Something happened. Oh okay. One more rabbit trail. There's so Eli Manning once did this like undercover football player thing where he showed up on a college thing.

I remember that. Well, Amazon has not turned this into a TV show. Oh. Where they're doing it with other people. It was interesting. It's like Undercover Boss, but Mayfield, the quarterback for the Bucks. They did it with him where he pretended to be. Like a super fan with a bunch of other super fans and get the backend tour super funny.

Anyways, the reveal, or like the moments before the reveal is they're doing a throwing competition and he just like, he launches this thing 60 yards, right? And everyone's like, this

is amazing. He's so good. After

him being like a total goofball for like the entire time beforehand. Anyways, he launches it and someone in the background goes, uncle Rico.

Charlie's like, man, those are some. Some deep cuts. I like these fans. That's amazing. Anyways, this has nothing to do with maintenance stuff, but good movie, Doug. It's all. It's a funny movie. Highly recommend it. I don't know what age appropriateness I know is for our kids, but not yet. I know that that's a total nother rabbit

Jessi: trail We could go on, but we won't tonight.

We're not gonna,

James: but yes. So why we're hiring now again, we, we've grown significantly. Mm-hmm. And and I, part of that growth demands internal consistency. Yep. And like I said, like it, it's, it's weird, like when I was back at just like a hundred units mm-hmm. It was enough where it was like myself and I had another maintenance guy.

We could handle everything. Yeah. It's like just that adding that extra, you know, 80 units I know. Nearly double. I know. It's just, it's like for whatever reason, it's not just like, oh yeah, we just go out and find another maintenance person. It's just, it's weird. It's different. Yeah. Yeah. It is different.

Jessi: Hit a tipping point now to,

James: yeah, and I still think like, outsourcing for specialized people is important, and we'll probably even use them for spikes in demand of like, Hey, we got this thing going on. So like,

Jessi: would an example of that be like. Heating and air conditioning. Like you'd hire a, a specific Yeah.

Technician for something like that. Yeah. Like HVAC

James: person or it's just like, Hey, we had multiple things happen this week. Mm. Like, our guy can get to half of 'em. Interesting. Let's get someone else in to handle the other half. Just to, to smooth out the Sure. You know, the issues. All right. You know, that kind of thing.

Jessi: And are these like maintenance items? What I'm hearing or like gathering is it's more like. Fixing stuff, making sure everything's running well, as opposed to like cleaning carpets or, oh, like prepping a unit, like painting or, or does it include all of that?

James: It includes all of that. Okay. Maintenance, just like unit turns is definitely one of them.

I have like, I just have four units that just need a, like a total like paint, carpet? Yeah. Like the works Just facelift. Yep. You know? Yeah. Where it's like, this isn't a two day thing. This is like a two week thing. And I have four of 'em right now. Yeah. And I've got another one in theory that's coming the end of this week.

Sure. We'll see if she moves out. I would keep someone busy for a while. Eventually the sheriffs will make her, she, well

Jessi: theoretically, like you're saying, once you, like you might be right at that bubble, but once you hit a certain point they'll get those four done and then there'll be another four ready to go.

I think so. Just 'cause it is gonna cycle through. Yeah.

James: And so I think maintenance turns would be a regular thing. Mm-hmm. I think, and then there's just a bunch where it's like, it's just little stuff where it's like like I got this property. It's mixed use where like there's some graffiti, it needs to be painted over.

Yeah. There's this egress area that needs a grate put on top of it. Mm. There's a window that needs to be replaced. I have a couple where it's like window, I need new screens and stuff where it's like none of 'em are hard. Yeah. But need to happen, happen. And then there's like just the, there's gutters that need to be done and.

What is it? The stuff you put on roofs zinc that needs to be put on roofs. Oh, yep. For moss. Mm-hmm. You know, which I'm just like, I've, that, that's a multi-day project right there, just from all the driving around. Even though it takes all like half an hour to do it, you know, it's just like, okay, we gotta go do it.

Yep. And so there's, there's things like that that, I spend a lot of my time doing, driving

Jessi: around and doing 'em and,

James: and I'm just like, ah, this is not like I, today I was out replacing some handles, some locks.

Jessi: Yeah.

James: You know, 'cause I was like, well this has to happen. Someone's moving in. I don't know about hiring someone do like Yeah.

That's a weird Yeah. Mr. Contractor. So so things like that. Yeah. Just regular maintenance type of stuff. We're not doing any structural big rehab type of stuff. Yeah. Not that like we would hire out for that one. Mm-hmm. So yeah, so actually that's, that's my second one is like, I was trying to think through like, here's what they're doing.

Mm.

So they're painting, they're patching, maybe putting down some LVP flooring. Mm. Replacing fixtures, replacing appliances. They're doing preventative maintenance stuff like mm-hmm. Swaping out filters, testing and replacing smoke detectors, doing some weatherproofing. 'cause in Oregon, like there's always weatherproofing.

Water, it's never not done. Just some other stuff like documenting things. Mm. You know, every task to just be logged and notated. Yeah. For, for owners, here's what we ended up doing. Creating those. Yeah. I can see that being useful. Logs. 'Cause I do have owners, like, they, they log into our system and they check stuff.

Mm-hmm. They're like, oh, you did this and this, and it. Yeah. Like we did.

Jessi: Yeah. If I were a passive investor or an owner, I might want to know how things are going and what you've been spending time on. Sure.

James: Yeah. So that's, that's some stuff that they'll be doing. And again, I, here, I was like, yeah, that's just like, that'll get us faster turns, it's gonna reduce the vacancy and ultimately just give our investors stronger returns at the end of the day.

It's good. I was trying to do like. Some math on the finances. Right? So some vacancy math. Mm-hmm. I guess so. Every extra month that a unit is vacant is like 1200 bucks. It's like, that's a, that's a. That's a smaller unit. Mm-hmm. Bigger units could be like 2000 Yeah. Dollars a month. Right. And, and when you start, when you start to think about that on an annual basis, we're talking somewhere between like 14,000 Yeah.

And 24 to $25,000 significant annualized. Yeah. And that's just lost rent. Yeah. Just 'cause it's because it's empty. Yeah. You know? And so not collecting rent. Yeah. It, it's a lot or it's. It's not necessarily that, oh, it's empty, but whoever's there isn't happy and so they're gonna move out sooner. Like when a time comes, oh, they're gonna look for another place.

It's like, ah, I want another. Interesting. Which obviously there's a balance here, right? You don't wanna spend all your money fixing up a place to be perfect. So like that's part of the game of it. But like vacancies are like genuinely expensive. That's one of the reasons why I try not to play or try not to put rent at the top of the market.

Mm-hmm. I want to be middle, maybe even lower of middle. Mm-hmm. 'cause people like, they'll stay 'cause it's just like. It's not worth having two extra weeks of vacancy. Yeah. To get an extra a hundred dollars. Mm-hmm. For the most part. Right. Like if rents are $2,000 and I'm trying to get an extra a hundred dollars mm-hmm.

Out of it, like that will take me 10 months to break even.

Jessi: Yeah.

James: Right. And so if as a result of that. They only stay that one year because they go, this isn't that good of a deal and I have another vacancy still lose money. Boom. I, yeah, exactly. Like game on. Mm-hmm. But if I keep it down a hundred dollars and they go, man, this is great, we're gonna stay here for four years, man, I won.

Yeah. And so like that's, it's, yeah, that makes sense. You

Jessi: gotta strike that balance.

James: Yeah. And just, and just in general, like, like yeah. Being able to, so. Having people not move out and then just being able to do the turns faster.

Mm.

Which again, I like the a hundred unit, like even the 120 unit mark, like I was really fast at doing turns.

Mm-hmm. And, and part of it is I'm inheriting a lot of properties as well now. Mm-hmm. And so the, the conditions are across the board. Yeah. In terms of what they are.

Jessi: Would you say philosophically though, you, you would, you would put money towards making things like usable and functional as opposed to like upgraded?

James: Yeah. Mm-hmm. That, yeah, makes

Jessi: sense. You know, because that, that allows you to keep your rents, I mean, my own house, just in a, a normal reasonable rate. You don't have to be top of the market because you're not getting the super fancy, high end, whatever.

James: Yeah. And the way I've, I've tried to think about it is there's different aspects of.

There's different reasons why someone stays. Mm. For example, they do stay because of location. Well, that's like the number one thing. Mm-hmm. But the condition of the property, but then also the service experience. Like how friendly are we, do they, do they like us? Yeah. Do they, are they cool paying us if they reach out to us, do we respond quickly?

Yeah.

Things like that. And it's hard when it's like I'm out doing stuff. Like today again, I was out doing, replacing some knobs and. It was way longer than I thought it would take. 'cause I was putting in a, a smart knob. Mm-hmm. And then giving everyone a code 'cause

Jessi: Oh yeah.

James: Instead of, 'cause it just,

Jessi: yep.

James: But I had to punch in all the key codes and it was like, word.

There's like 17 of 'em. It was, I'm like but anyways, someone sent an email during that time and it wasn't, it wasn't an emergency mm-hmm. By any means. But it was like, I didn't get to respond to him until I got home. Had sent every, had texted everybody the new code, so they had it. Mm-hmm. And then I replied, which meant we weren't gonna meet today, we're not gonna meet tomorrow.

It's not the end of the world. Sure. But, but it was a delay. But one, I was like, yeah, yeah. Could have, I could have actually got that thing handled today and now it's gonna go tomorrow. And it's what? It's so interesting. Yeah. I think number four, there's some risk management that happens for investors. I just think that like professional conduct mm-hmm.

Is a thing. And it builds trust with tenants Yeah. As well. And they go, okay, yeah. Like they're, they're doing this, right. Mm-hmm. Again, we've already talked about how it preserves the asset itself. Mm-hmm. Better, which I think is good. And and I, I think it just, it just helps us stay. When I say like, compliant is maybe a good way to say it, or like, we just.

I have more control knowing that things are being done right. Yeah. And and I like that. Or at least consistent, at the very least. Yeah. Yeah.

Jessi: Well, and I, there's something to be said about when you hire someone to do a specific role, instead of you splitting your time to do two different things, you're now trying to become an expert in both of those and trying to balance and jumping back and forth.

Whereas it's like, no, I'm hiring this person to do this thing. They're gonna do it super well, and they're gonna have a super high standard and they're gonna practice doing it over and over again. Yeah. Like you're saying, they have that level of professionalism or experience or, you know, just that's what they do.

They get really good at it.

James: Yeah. And it's been really interesting talking and interviewing with people. Before we get to the last one, it's, it's been interesting and, and I'll admit this has been, there's learning on my end too. Mm-hmm. I'm like, how do you hire someone for this position? Right.

Because most of the people that I've hired in the past have been for like their more office

Jessi: Yeah. Admin type,

James: that kind of stuff. Positions, or even when I was with hp Right. They were technical types of jobs. More computer type of work.

Jessi: Yeah.

James: And so I, it was funny, like for first couple guys I was like, so tell me about yourself.

And, and they were like, here's my life history. And I was like, whoa, okay. That's a lot. That's not quite what I meant. And so I got better later on saying, Hey, tell me about your work history. Mm. And which is what I actually meant. And you know, I got a much better, quicker, more on point answer, which was good.

I, when other things that I've, I, you know, just things that I've been learning like, okay, how do you assess somebody and how do you. How do I, like what's the right amount of information? Like for example, one of the things that I've been doing is, so they send me a resume, I can see it, we talk on the phone, I learn more about them, go a little bit deeper on the resume.

I share more of like vision of here's what we're doing.

Mm-hmm.

And then since I do have one of these properties that needs to be turned, I'm like, Hey, let's meet up and like, walk me through it. What's the plan? And, and what I've been telling 'em is, and at the end of this, I want a project plan. Mm. What would you do?

Mm-hmm.

I want some estimates on the materials and an estimate on the time. Mm-hmm. Because ultimately that's the thing that I'm gonna take to an owner. So I'm gonna come to you and say, Hey, this place needs to be turned. Yeah. What are your thoughts? Like, what should I tell 'em it's gonna cost and how long?

Mm-hmm. And like, so like, let's practice. Yeah. Like gimme the liberal. Yeah. I've actually been surprised. Guys don't wanna do that. They're really, I've had multiple people like, oh yeah, sure. Totally send it to you. And then just nothing. They just

Jessi: don't ever respond at all.

James: Or they might ask a few clarifying questions the next day,

Jessi: Uhhuh,

James: and then they just don't do it.

I don't know. Weird. It is very weird. And I, and this is one of those where I'm like, am I not describing this well? I mean, and I'm kind of like, Hey, you get a half hour, which is plenty of time, trust me, to like walk around, take measurements. Mm-hmm. Do whatever you need to do. Hmm. And. Yeah, I don't know.

Are the,

Jessi: is that just like too high of a bar for not getting like actually hired to do it?

James: I don't, it doesn't feel like it, but, huh. Maybe. And that, maybe that's the, and so, so I've tried to get better as well as like, as I've had more of these to be like, Hey, look, I am not looking for the line by line count every screw analysis.

Jessi: Yeah.

James: But I also don't want the single high level number. Mm-hmm. Like, I'm looking for the medium. And I'll give an example where I'll be like, look, I'm looking for you to say like, Hey, we're gonna redo the, the flooring patch, paint the walls. We're gonna fix some of the appliances. We're gonna redo these things.

You know, I like, and I tell 'em, I'm like, there's gonna be five to 10 line items I can bundle together. Sure. And then. You don't need to list out all the materials. Mm-hmm. But, you know, I kind of want an estimate of the materials. Yeah. I'm like, and you know, kind of, you might, depending on your comfort level with doing something like this, you might need to do more research, but like, that's ultimately what I'm gonna send to an owner.

Jessi: Mm-hmm. Like,

James: that's what they want to see.

Jessi: Yeah.

James: And then I wanna tell them like, Hey, it sounds like this is gonna take two weeks, or ah, this should be a two day thing. Mm-hmm. Or like, oh man, buckle up. Like mm-hmm. We're gonna be at this for two months or something. I don't know. And and I've, because ultimately like I'm gonna pat it and mm-hmm.

You know, and set expectations for them. And so I'm like, so it doesn't have to be perfect. Sure. Like, I ideally don't, we don't go over, you know. Hmm. So yeah, it's been interesting. That's interesting. But I'm like, I, but part of me's like I, this is something I need. Like, I'm not making up, like, I'm not trying to make a, a hard.

And this is this is the, okay, so this is the other thing that I've been wrestling with, right? Again, as someone trying to hire someone, I'm like, okay, who am I looking for? Like, am I looking for that expert person who's, who's done this a ton of times? They know what they're doing, they know the cost, they know their time.

Mm-hmm. They know how to do everything. They actually could be a supervisor or an estimator and do all that. Like actually highly skilled person. Mm-hmm. That I don't actually have the budget to pay for, or am I looking for that, Hey, I'm looking for my first time job. Mm-hmm. This looks interesting. I, I've, I like tinkering on my car, so yeah.

Maybe I will like this.

Mm-hmm.

And, or something in the middle, which, which someone like that is like, I, they're like, they're like, I don't, I have no idea how long this is gonna take or what it is. I've never done this. And they're making it up and is like, okay, could I, is it worth it to me to get someone like that and then train them?

We're not, and I'm leaning more towards like, no, I want some experience. Because, because you can hire for like, you know, you have skills mm-hmm. Is one area, but then like the, like I'm gonna say like attitude mm-hmm. Or aptitude maybe is, is another one. Sure. And, and kind of depending on what the role is, you can kind of like, you can go one or the other.

The, the example I've heard is like, like there's some things that are, you know, from a skill wise, it's not very hard. Let's say like a receptionist. Mm-hmm. Type of job, right? The idea of. Answer phone calls pretty quick. Take good notes. Mm-hmm. Figure out what they go though. I can train someone to do that.

I'm gonna hire purely for attitude. Someone who's got interesting bu yeah. Someone who, yeah. It's harder for me to teach someone to be bubbly on the phone, greets people well, than it is for me to teach them how to properly take notes and Yeah. You know, make sure they categorize it. Okay.

Jessi: That makes

James: sense.

Whereas to go to the other end. Right. If I was hiring a data scientist mm-hmm. That one I'm gonna be like, I kind of want you to know math ahead of time. You need to do the job. Yeah. I don't, I, I'm going to put up with a bad attitude. And I can, I can, I can do a better job of teaching them here's how to have, here's how to present with a smile.

As opposed to like, how to, right. The actual technical skill or whatever. It's like roofing, you know, like, I don't, I don't Sure. I don't know that, I mean, I know it's not actually that hard, but, or doing electrical work, right? Hmm. Like if there's an electric and electrician, I'm like, well, you know, if they do a good job, I'm kind of gonna put up with it.

Jessi: When you are, I'm just curious, like when you're pitching this idea, or I guess doing this interview Yeah. With these maintenance guys, how do you frame it for them? Are you like, I am looking to hire someone to join my company? Mm-hmm. To do ongoing projects? Yeah. Or are you just like. I got a few projects and I might wanna hire somebody to get those done.

So I'm just kind of, what's my pitch? Yeah. Checking out a few different options, you know? 'cause like as a, if I were a contractor i'd, I would treat those differently. You know, if you're just like, oh yeah, I got a couple projects, they'd be like, okay, whatever. Like, cool. But if I knew like, oh. Is like a, potentially like a full-time gig.

Like it hired for a company

James: Yeah.

Jessi: To do ongoing work.

James: Yeah. What I, the way I tell people and what I've, what I've listed it for is like, hey, this is a full-time, 40 hour a week W2 job.

Jessi: Mm-hmm.

James: And you know, it's hourly. It's not sly, it's salary, salary, salary. And part of it is I tell 'em like, no, I need you to track my hours.

'cause part of it is I bill it back to the homeowners. Mm-hmm. So like, I need to know. Yeah. And so but I tell them. And what I told him was like, look, I already have a backlog of work for the next two to three months. Like I can already tell you what you're gonna be working on. Yeah. Every single day.

Mm-hmm.

So that part's not a question. Yeah. I'm like, and I'm getting and big enough where there'll be new things that pop up. 'cause there is every single week. Yep. And I went. So I'm like, so I can't, I can't look out six months. Mm-hmm. And say, oh yeah, absolutely. But what I can say is I know there will be something.

Yeah. 'cause there always is and there's just the regular maintenance stuff that Yep. I went, worst case scenario, I've got a yard guy, you can do the yard maintenance instead. Like, I've got stuff that needs to happen. Mm-hmm. I just, I dial it back on some of the contractors that I've got and have you do it, give the work.

Jessi: Yeah. Give the work to them. Yeah.

James: So I'm like, so there, there's things to do. Mm-hmm. And what I'll tell people is like, and my goal isn't to stay at this 180 realm. Like I, I, I would love to hit 200 by the end of the year, and I feel pretty good that I'll happen by the end of next year. I want to be closer to that 400 mark.

Yeah. You know? Three to 400 mark. Yeah. Recognizing that like half of it is mine, so I don't know if it, you know, whatever. Yeah. But like, that's the trajectory. And what I'll tell them is my goal is like, and they're running it. Mm-hmm. Like, yes, we'll bring stuff to them, but at the end of the day, they're the ones who are making the decisions on like, yeah, James, this is a higher priority than this one.

Ah. And we're focusing on this one. And if they get to a point where like, Hey, there's more than I need to do. I'm like, great hire, let's, let's go find people to help you. Hmm. And you direct them. Interesting. And, you know, so

Jessi: there's the potential for them to move into like a management type of role.

Correct. Yeah. As you grow Yeah. Or as you scale. So,

James: so that's what I've, that's what I've been sharing and interesting telling them like, and by you doing that, that frees me up.

Jessi: Mm-hmm. To

James: then go find more clients and spend more time on the marketing sales side. Do you tell

Jessi: them up? This is like kind of. I have a side note, but it's all involved.

Hope, this is, hope.

James: This is interesting.

Jessi: Do you tell 'em ahead of time, like, okay, as you're interviewing for this position or whatever, here's like the five things I'm gonna have you do. Like, we're gonna have a phone conversation. I'm gonna have you estimate a bid on a property. I'm gonna have you, whatever, I don't know, answer this questionnaire or about like, I don't know, you have a list of things you want to ask them about or have them do for you.

This is one of them.

James: Yeah. I haven't quite been that like, hey, here are the seven steps. But it is like, they've sent me resumes 'cause I've got it posted mm-hmm. In various places. And it's usually I'll read the resume and if it's interesting, I'll, I'll reach out and be like, Hey, I saw your resume. Thanks for applying.

Would love to set up a phone call. Mm-hmm. Here's my link to find a time. And then we get on the phone and I usually started off with, and this is a very like, I don't know, control the frame or in claf type of thing. Mm-hmm. I go, Hey, here's what I'd like to do. I want you to start off telling me about your work experience.

Mm-hmm. And just more about yourself and you know, your skills and what you know. And then I will share more about myself, what we're doing, and our vision and where we're headed.

Mm-hmm. And

then I want to talk about you know, I got some other questions for you. Then I wanna talk about next steps.

Mm-hmm.

And so then, so we go through that phone call. We do that, and that phone call, like, it's usually like half an hour. It's not very long. And and then I'm like, yes, awesome. I wanna get you out to look at this property. When are you free? Let's set a time. And and that's when whenever that is. Mm-hmm.

We'll do it. And then, and, and I tell them at that time, I'm like, yeah, what we're gonna do is we're gonna walk through, I just want to like, and I describe that deliverable that I need. Mm-hmm. I'm like, so let's do one.

Mm-hmm.

Let's just see what that looks like. And so that's when they'll go and in theory, they'll gimme that deliverable.

Hmm. And. And then I'll, I'll look at it and if I'm like, yeah, like this is what I'm looking for, I'm gonna hire 'em.

Hmm.

And then and then it is more of a, Hey, you're hired, here are the terms, here's the, you know, the employment letter. Mm-hmm. Whatever. Yeah. And then once they sign that there's just some onboarding stuff and Right.

And yeah, I've got I'll have 'em take some of the personality test type stuff Sure. Because I think that's interesting. Just helps with

Jessi: team communication in addition to

James: filling out the each other, whatever the i nine forms and all that other Sure. Legal stuff that has to happen. Interesting. Yeah. I

Jessi: wonder if it's not like in my brain, that sounds like what you just described sounds like a classic business interview.

James: Yeah, it is.

Jessi: And it's what I know. You hit all the steps of like, yeah, I'm gonna learn about you. I'm gonna share my vision, I'm gonna have you test this. I wanna like test to know you. Make sure that you know the skills I, yeah, yeah. And I'm wondering if like, if contractors just don't, like that's not a typical contractor interview.

Perhaps, I don't know.

James: Yeah. That and I've, I don't know. 'cause I, in a perfect world, once I had this first person

Jessi: Yeah.

James: The next person, yeah. I would be like, learn I'll to, I'll be like, Hey, we're looking for this job. And, and I might have them look at their resume and have them go, oh, I'm interested in this person.

Like, okay, cool. Let's have 'em work with you for a day. We'll pay 'em for days worth of work and then just gimme their feedback. Yeah. Were they good? Yep. And like, and that'll be the test. That's so interesting. But oh boy, here comes trouble. Hey buddy. And so, yeah, in a perfect world, that's eventually how it'll work.

But I'm not there yet, so I'm kind of like, I'm, I'm trying to do what I know, which is probably why I'm looking for more of that. Like, nah, I want somebody who's a little more skilled, can work on their own, can, can do this liberal estimating piece. 'cause I'm, I, I, I could be the one who does it. Mm-hmm.

But I also don't wanna have to set up the card table and do the direction each day. 'cause I've done that game. That's,

Jessi: yeah. And

James: it can work, but I'm like, nah, that's not. That's not where I'm at. Yeah. Okay. Number five. Oh man. Hey, yes. Lots of rabbit trail. That's okay. That's all good. I'm trying to think.

Yeah, we've, we've kinda already talked about a bunch of this stuff, but it's just that, that bigger picture of as, as I'm trying to scale just creating systems that scale mm-hmm. With me. Yeah. Right. And that's part of like, this is that system. This, I have a guy I can call. We're no longer, it's a lot less ad hoc.

Yep. On who can we get a hold of. Yeah. Right. And that's 'cause I've, I've got a much bigger unit count goal that I want to get to.

Jessi: Well, it's consistent work. You're not hiring multiple different people to do different jobs or to do the same types of jobs. It's one person and they do it the way you want them to do it.

James: Yeah. And, and I think it also just feeds into my vertical integration story. Mm-hmm. Right? Like, yeah, no, we've got, like, I've got people to go mm-hmm. That I can just call and say, yep, go take care of it. And so I think that that helps my, my sponsor story as well. So There you go. So here's some actionable stuff.

Mm-hmm.

Yeah, hopefully just that conversation in general is just kind of interesting in like the hiring process mm-hmm. And kind of what we're doing. It's not just like, oh yeah, it's super easy and whatever. Like these are, like, these are the issues that I'm working through. Yeah. Which I think is pretty funny.

Like I've, I've noticed when I go to real estate investor club meetings, like a lot of people are like, they're like, I'm just, I'm looking for the next deal. I'm trying to figure out how to underwrite. I'm trying to like. You know, just saving money. How do I buy in my first place? And, and I'm definitely in, like, so I'm worrying about hiring people and Yeah, it's a, yeah, it's a different, trying to interview and yeah, like, it's just, there's, it's, there's different problems.

Just different, which is great. It's all good. And I've, and both are issues, but it's definitely, I'm like, man, no, I'm in a different spot. So anyways, you wanna ask them if you are looking for a property manager mm-hmm. You should ask 'em how they handle unit turns and preventative maintenance. Mm-hmm.

Do they just rely on vendors or do they have an in-house type of person? Mm-hmm. And, and it's not necessarily like, yes or no go for this, but like, really try to get like, yeah. How do they think about it? Why do they have that person and. That kinda stuff. If you're a passive investor, when you're looking at a sponsor, again, don't just, and we've talked, we've talked a lot about this and we will continue to talk a lot about it, but when you're doing your due diligence on the property, right?

Yes. You absolutely wanna look at the sponsor mm-hmm. And ask them questions and learn about them. But part of it is you want to know about that construction plan

and

their maintenance plan and like, how, how are you gonna make sure that. Things, things get done. Mm-hmm. Is it an in-house deal or are you gonna hire out and mm-hmm.

Are you gonna get that person to show up? Yep. We've got this one project that we've been like, he was supposed to get it done today. Mm. And he texted in the middle of the day and was like, sorry, something came up. Can't do it. We're like,

Jessi: ah, my word

James: okay. Whatever. And so I think it's kind of, in a lot of ways maintenance is like, it's where, it's kinda like the, where the wealth building rubber meets the road in a way. Yeah. And that's the, that's the thing that's gonna preserve wealth. And I am, I am learning to appreciate it more. I hate paying for maintenance stuff. Yeah. Wish never had to. I mean, I love dealing with tenants, but deal with tenant all day long, that part's great, but man, the maintenance interesting piece, I'm just like, ugh I don't, I don't wanna deal with it.

And so, but I'm learning to appreciate it. Yeah. For what it is and how it really does help build and preserve wealth over time. And and that is good. So you go, that's that's, that's all I got. All right. That's a lot. That a lot. So, yeah. So hey, hiring someone, it'll be good. Hopefully by the time this airs, I do have someone on the team.

Yep. And it'll be great. But but yeah, man, so lots of lessons there. Yeah. Wow. And and again, just trying to help you understand some of the, the inside intricacies behind mm-hmm. That process and the thinking that goes into it and the intentionality behind it. And it isn't just, let's just find someone and go, right.

I mean, sometimes it is that lucky, but not always.

Jessi: Yeah, not always. And this is one of those, well, and for certain projects, but. Yeah. For ongoing. Yes. Makes sense. Yeah. By the way, you reach

James: out to a bunch of people for referrals and nothing panned out. Turns out it's hard to hire. Mm. Everyone talks about it's hard to hire contractors.

Yeah. It's hard, hard to just hire laborers in general. Interesting. But it's all good. I'm gonna find someone good and it'll work or not, and. Well move on to the next person. Figure it out real quick, but it's all good. All right, well there you go. Hopefully that was helpful and again, would love to hear your comments both on 3D printer ideas and yeah, just your thoughts on hiring maintenance and if you've got some good stories behind it, we would love to hear those stories and you can learn more about our investing philosophy and the kind of projects that we're working on right now at furlo.com.

And so with that, thanks for listening. Have a great day.