play_arrow

keyboard_arrow_right

skip_previous play_arrow skip_next
00:00 00:00
playlist_play chevron_left
volume_up
chevron_left
  • Home
  • keyboard_arrow_right Featured
  • keyboard_arrow_right Leadership
  • keyboard_arrow_rightPodcasts
  • keyboard_arrow_right Excellence a Catalyst for Thriving
play_arrow

Featured

Excellence a Catalyst for Thriving

Patrick Antrim January 5, 2021


Background
share close

Jon Taylor, Chief Financial Officer for WRH Income Properties, looks back on the challenges of 2020 and highlights the growth opportunities.

Jon joined WRH Realty Services in 2018 and serves as Chief Financial Officer for WRH Income Properties. As CFO Jon is in charge of all accounting, finance, human resources, risk management and technology for the holding company and its subsidiaries. He has more than 25 years of experience in the financial industry. Prior to WRH, he served in financial and operational leadership roles with leading companies including GE Capital, Franchise Finance Corporation of America, and EMF Broadcasting, in addition to MC Companies, and global private equity firms. He’s balancing the “Head thinking” with our “Heart thinking” We will look back on the challenges of 2020 and see the growth opportunity. We will forever live with the positive and negative changes from this disruption, and we will create new patterns of behavior until the next major disruption event occurs. The strategy of embracing cloud technology and remote workforce efficiency & effectiveness technology in concert with their commitment to Excellence Through People gave WRH a great foundation to build on in the face of the Pandemic. WRH reached another record revenue year, they delivered on their budgets. Their trust and communication metrics showed a significant rise reaching an all-time high. Their team member engagement and satisfaction are at an all-time high. They have successfully navigated COVID through their team’s and resident’s perspective.

Welcome to the multifamily innovation show. This show will bring you some of the most innovative minds in the apartment industry. And today I have an incredible guest to interview. John Taylor is with WRH Realty services. Now John joined WRH in 2018 and he serves as the chief financial officer at WRH income properties. As a CFO, John is in charge of all the accounting, finance, human resources, risk management, and technology for the holding companies subsidiaries as well.

He has more than 25 years experience in the financial industry, and he’s served in the operational leadership roles for leading companies, including GE Capital, Franchise Finance Corporation of America and EMF Broadcasting. In addition to MC companies and other global private equity firms, he’s balancing the head thinking with our heart thinking.

So look, when we look back on the challenges of 2020 and see the growth and opportunity, we will forever live with the positive and negative changes from this disruption. And we will create new patterns of behavior until the next major disruption event occurs. Now the strategy of embracing cloud technology and remote workforce efficiency and effectiveness technology in concert with their commitment to excellence through people gave WRH a great foundation to build on the face of this pandemic.

WRH reached another record revenue they delivered on their budgets. It was a record year. Their trust and communication metrics showed a significant rise in an all time high. Their team member engagement and satisfaction are also at all, all time high. They have successfully navigated COVID through their teams and the resident’s perspective. They tweaked operational things like property COO. We’re going to talk about what is a property CEO is talking about excellence development review.

This is really driving excellence and getting through and thriving in an organization. They did portfolio management moves on upgrading the portfolio, converted to loans, to long-term fixed rate acquired properties. Purchased land took on a client with 20 properties, rolled out new things like rent tracker to essentially enhance the residents credit ratings, a rhino security deposit replacements. They’re looking at liability only renter policies implemented new voiceover IP systems successfully navigated the sale of four client properties and operated at a high occupancy.

And again, reached a new high milestone for total revenue. You’re listening to the multifamily innovation with Patrick. Antrum your source for innovative strategies for multifamily professionals, CEOs, executive leaders, and aspiring leaders that want to drive high performance results for their property or portfolio. John, I have to say man, reading that you have been very busy. Well, I I’ve been very busy.

It’s really been the team. The team has been very busy, very focused. So the head thinking and the heart thinking, talk to me about where you’re going with that. So, in 2019, at April, 2019, we, we did an offsite strategic planning session. And we, we worked with some people that we we’ve used since 2009 and, and did what’s called a 3d collaborative.

And so through that process, we really identified the need for what, what, at that point in time, we, we, we termed it WRHH excellence through people and the, and the concept there was, I mean, self-explanatory really right, but the concept is that that yes, WRH has always had a culture of you matter.

And that was a real culture, you know, it really does matter. You do matter, you know, as a resident, as a, as a team member, etc. we felt that that to take it to the next level. And that, that was where the excellence of the people came from. So, so we started working toward our vision in 2019.

November of 2019, we met with our board and the chairman of the board was, was, you know, this is where the head heart really came from. We had this conversation and, and knowing that WRH is very metric driven. I knew that I needed to, to bring metrics to support the position I was trying to advocate for.

Yes, absolutely. You know, at the same time I felt that that heads head thinking only wasn’t going to really win the day the heart needed to be there too. So that, that balance between heart and head and, and so how, how we, we approach it, it was really the issue was what is the right level of pay for a beginning employee that comes on to our team?

And we had people that we were paying minimum wage and, and I just, I just took the position. I said, look, I know that we can do better. Right. So, so as a leader in this organization, as the CFO, I’m not proud of where we’re at.

I think that, that we need toto address this. And so I you know, brought in the numbers and the numbers were look, it costs WRH $16,000 per person that, that turns over. And so that happens a lot. Absolutely. Especially on that, that, you know, that zero to six month timeframe, there’s a really high turnover, you know, industry-wide and we had our challenges there as well.

So we had high turnover costing $16,000, you know, each term. So the point was, Hey, why would we, why would we want to incur that cost if we could, instead let’s, let’s, you know, raise the base for everybody. Right.

And so, so we had this discussion and at the end of the discussion, the balance between the, the head thinking and the heart thinking was okay, $15, 25 cents an hour, which is a large increase because, you know, we were in multiple States, for instance, Florida, you know, you’re in the, the $8.75 range, and then for the minimum wage to go to $15.25, you know, that’s a significant increase.

But that was what we, our hearts told us that that was the right thing to do. And our heads told us it’s, it’s the right thing to do. So that was kind of the first of the, the heart head conversations, if you will.

And that, and that really, it really set the tone because I got to tell you a story. Well, we’re here to talk. So, so you know, you and I, we, we can get that, you know, that’s, that’s, that’s really good. That’s a really good move to be able to get an organization to make that kind of a percentage increase dollar increase,

but we’d probably just don’t really grasp what that means day to day to, to everybody in an organization to, to hear that. So, so we had just built a, a really top notch class, a property, and it, it just killed the market. As far as, you know, the leasing velocity, we were like three times better than all the competitors.

And so we filled it up rapidly and, and we, we have housekeepers. And so one of the housekeepers, when the manager was able to explain to her what WRH this decision and what it was, meaning she just broke down in tears. And, and she’s, she, you know, shared with the manager that in my whole life, I would never dream that I would be able to make that kind of money. That’s just, that’s not touchable thing, right?

I’m a, I’m a single mother. I work here all day long. I go, go home, take care of my kids. Then I go to my next job to work all night long so that I can make ends meet. This is going to change my life. I’m now going to be able to quit that second job because of what has done for me.

And that’s just one story. And there, there are many, many more, but that, to me, that’s like, like a very powerful recognition that we, we made the right decision, that, that whole heart head, it’s not, it’s not just buzzwords or anything like that. This is people we’re about. And that’s what excellence through people is all about.

Sure. And, and acknowledging people how, you know, what their efforts are and, and, and what their value is. So that that’s where the heart head comes from. Yeah. I love it. I mean, I’m thinking, cause they’re not doing the math, even, even if you look at the, the turnover, because even if there’s not a spreadsheet in the world that would support a percentage increase or the way others would look at it in terms of selling that idea,

but going through it in that capacity, what do you think it takes for, I mean, leaders to get to that point where they can have the courage to have that conversation. Cause I mean, you’ve done some really great things in your life and you come in with a, and I love how you’re talking about, you went through things with the residents perspective and the team member’s perspective.

I mean, you have to have that perspective to make a decision like that. Right. You bet No question about it. And as far as, like, where does that come from? Yeah. I mean, I think, yeah, because you know, in multi-family you have that we look at what’s already happened. Right. And, and, and we’ll look at something very standardized.

Like how many employees, not, how much should you pay them and how many should you have onsite? And the old story has always been, Oh one per 100 unit and then maintenance one per 100 units, like who came up with that number and why is that number there? I mean, if you relate it to advertising or media, they say that they’re,

it takes seven touch points for someone to remember content or whatever the data is. We can go search it, but in today’s world, it’s more like 26, 27 touch points because there’s more mediums back then when that data point was in place, it was yeah. TV, radio print, that’s it. And so they’re like, okay, it’s seven.

Yeah. You got to get them with some mailers and some, a radio ad and a TV ad and maybe a call, a call center. And then you got them on, on the media piece. But today it’s more like 27 and the world has evolved. And so when, when we’re underwriting properties doing these things, it feels interesting too, to just kind of take a step back and go,

you know, do we need to, your new rate is 15, you know, and, and the value that’s achieved from that. Right. Well, you know, Results always, always determined if you know, your, your prior decisions, you know, where are you on target? Do you need to adjust kind of like using the artillery, right,

right. You shoot, you see how close you are, you make adjustments, et cetera. And so, so I absolutely we’re on target this year. Not only are we having record record all time highs for revenue, and there’s much more to that story there w record net operating income record EBITDA. I mean, every financial metric and what’s more important.

My mind is every employee poli, you know, team engagement type metric metrics around in, in WRH many, many years ago started started a survey. So There’s, there’s over about 15 years, Years of consistent data to look at, right. So the same questions asked at the same time of the year sure. In the same exact wording. And,

and so you can see over the year that the trends and yeah, and it’s really interesting. I mean, we’re talking hundreds of questions and so you can really get into granular detail and 2020, you just see a complete new plateau starting. So, so up to about 2012, 2013, there was a plateau, you know, you know, up,

down, up, down, but in a certain range, then 2014 to 2019, there was, there was another plateau that had been achieved. And then 2020 is, is, you know, a new paradigm that, that has been established. And, and I think that, that, it’s the, the focus around the, the excellence through people that we were talking about,

the, the, the whole tools that we’re talking about, you know, the property CEO, you mentioned, the excellence development, it also gets into wh is, is really a it’s a family office. Okay. So, so the, the structure, so we have, we have a family as, you know, very wealthy, you know, group of siblings that,

you know, This is, this is one of their wealth Building strategies and for, for generational wealth. And as you know, there are people, and, and although they are lawyers and, you know, business leaders, you know, people that, that just like as a CPA, you might think, well, why would John care about people,

right. John just cares about, you know, cost Per kind of a thing and that, and what CPAs do, But th you know, there are people and they care about people and it’s, it gets back to the first thing we talked about balancing, you know, we all have, we all do think with our heads and we think with our hearts,

and when we can find that right balance between the two, we D we get these types of results. And so, so we, we have the support from our ownership structure to, to be able to make these types of courageous moves without, okay, well, you know, right, John, go ahead and do what you, You’re talking about.

You, you twist our arm, you do it, but boy, if it doesn’t work, don’t let them, Or hit you on the way out, kind of a thing. So a lot of support there as well. And just that, that empathy, that caring for all of the people on those surveys, one of the questions is, do you,

do you intend to retire from WRA? Is that where you intend to retire over 75% of the people that work for WRA say, this is where I’m going to retire. Wow. And, and so when you get past one year of, of, you know, service with WRH, you rarely leave surely because it is a family and, and there’s,

there’s that true caring. Yeah. It’s interesting. And, you know, the, the, the bottom line Results, I mean, if someone is just looking at yields and those numbers, I mean, what you said about how the housekeeper essentially stopped doing the second job, I mean, what’s, you’re doing, is you’re putting a customer now they’re in front of the customer with more rest and,

you know, leaving their family in new ways, but like enriching their life in new ways. And then you take that along with maybe the savings of not having to, what was it? 16,000 and turnover or something like that. And that number’s growing, I would imagine. Yeah. But yeah. So there’s the bottom line numbers that reflect being empathetic and,

and leading that’s. Right. It makes, it makes a big difference. Yeah. So talk to me a little about this property CEO. Is that an accountability? Is it an empowerment approach? Talk, tell me about what that CEO’s All of the above. So again, as we’re sitting down with our, our leadership team and having various discussions, one of the concepts was okay,

so let me understand. We have all of these multimillion dollar businesses spread, spread over many States and you know, these, these, so from a sales standpoint, multi, you know, millions and millions of dollars per, per property. And then you have properties that have valuations of, you know, a hundred million dollar asset. Right. So,

so is, do you really want to have a manager in charge of that? Or would you want to have managers who are, you know, what they are becoming CEOs surely it’s a CEO that, that I would prefer to have, because whether it’s risk management, right? Because if I have a CEO leading that property versus a property manager managing the property,

I think that, I think that my, you know, whether it’s work comp claims, whether it’s resident injury claims, you know, fires just the whole risk profile, right. It comes down, that’s, that’s a bottom line savings, as well as if, if, if my, my manager is thinking more like a CEO, then leadership principles,

that’s going to, as you said, is this an empowerment thing? Yeah. It’s an empowerment. Let’s empower the CEO, the CEO who then will empower their team, that, that CEO needs to be able to not be so much in the weeds as a manager is to where I can’t think about, Hey, strategically, where should my property be placed?

Is there an opportunity? I know parking is one of the main reasons why I lose lose residence at, you know, fleece. Is there an opportunity for an adjacent piece of land? Is there something I could repurpose to be able to create creates parking spaces? I’m just, just, just an example. So if you can have somebody thinking strategically and long-term,

and that gets back to long-term also w H is a longterm thinker, right? So we’re not, we’re not buying to sell we’re buying to hold and create, create significant wealth. And so, so that’s just totally in alignment with, with concept of a CEO. So, so just like anything, I mean, I could have said, Hey, we should have everybody be a CEO.

Sure. Boom, you’re a CEO Patrick title. Right. It doesn’t, it doesn’t do anything. So instead we have developed a one-year program that gets into, you know, all aspects of, of being a CEO clearly in a year, you can’t, you know, get complete depth, but, you know, we do have there’s enough depth and enough breadth in terms of,

of, you know, providing people with a mentor within the organization, providing people with tools, providing people with real live examples, you know, case studies, if you will, to work through for an entire year. And these people, when I say people are our existing managers, so we’re not forcing anybody to do this. I, you know,

I view it as, as if you want to do it, you will be passionate about it, and then you will really succeed. And so, so if, if somebody forces me to do something, I’m not going to be very passionate about it, and I’m probably not going to succeed. Right. So, so it’s totally a voluntary basis. And we started with our first cohort in August and,

and it’s going extremely well, so well that, that I’m, I’m watching it. And I’m saying, wait a second, this, the property CEO was a good idea, and this is really, really good stuff. But these leadership principles, our entire organization can benefit through this. So, so that’s one of our, okay. And so now we look at it as it’s kind of like your cell phone,

you know, my, my iPhone, it’s a very valuable tool. Sure. Right. But what makes it really valuable is the applications, right? So, so we’re calling these applications, right? So, so property CEO is one application I see within the WRH excellence through people. So you’ve got, you know, here’s, here’s the, here’s the,

the, the, the iPhone, if you will, that, that platform, that’s, that’s the excellence through people. And now we’re, we’re, we’re creating the apps that will really make that excellence through people really valuable. So that’s, that’s what the property CEO is. We, we created a program called star trainer best practice sharing. So, so if you,

if you are really loving self identify with the name of that, like I’m a star trader. Yes. You bet. And so you’re really good at leasing. So, so you become a star trainer and now you will share your knowledge with others in the organization. So it brings everybody up to a star trainer level within, and we just now completed the development of the excellence development review.

So instead of your once a year, okay, Patrick, how, how are you doing this year? Right. I haven’t talked to him for a year long. No. So, so everybody likes to know, and, and any leader stays very close to their team. And, and so that was the, the idea of this. So every 90 days that can be overwhelming.

And so once, but, but that’s okay because what we did, and as I said, w H is really metric driven, a lot of metrics. So, so because we have, we made the commitment to go, to go to cloud, to really invest in technology and, you know, be on the leading edge of, with technology. We have this information,

so now let’s leverage it. And that’s what, that’s, what we built was, okay. So if you are at a market rate property and you are a, a maintenance manager here is what excellence looks like, Patrick, you’re important. You just want, it looks like that’s right. I’m telling you upfront, this is exactly what excellence looks like.

Cause I was going to ask you a lot of people, But we’ll say they have their own idea of what excellence is here you are. This is what it is. We need to do that at this position. Right? Exactly. So, so it’s very specific to them, your position and type of property, because as you know, depending on what the type is there,

it can’t. So we ha we wanted consistency, but we, we understood there does need to be some differentiation to make it really meaningful. Right? So, so Patrick, here you are, you are, you are that maintenance manager, and this is what excellence looks like at the end of the quarter here we’re, we will go through this and,

and through our systems, you will receive your, your excellence ratings. And this is all about developing you. That’s where we call it excellence development, your review, sorry. And because, because you know, you, you probably start off the quarter expecting that, you know, this is where I’m going to be, but we need to, we need to have that,

that, you know, that today It’s so interesting, and this is off topic. But when I played baseball, my whole young life leading up, getting through scholarships and all that. And when I was drafted by the Yankees, they put us through what they called the Yankee way. And it was, this is what, you know, their, their definition of excellence.

You know, you don’t clean shaven, they literally defined it. And you sort of step into that. And then, and then you develop as an individual, you know, but I think it’s fascinating to me that organizations expect that excellence, but don’t always not only clarify it, but then develop it as you are. Right. And that that’s really what,

as I said, WRH has always been about excellence, right? I mean, always seeking excellence, wanting to do work with excellence, but what we’re doing now is really bringing it to a tangible, you know, reality. And part of that is the defining of it. So there’s no surprises at the end of the quarter that, you know, here we go,

I’ve got that automated report. So that, so that, that overwhelmingness of how can I do all these reviews every 90 days? No, it would be easy because the system will provide it to you. You just need to schedule time to meet with me vice versa. And, and then, you know, there will, there’s, there’s a little bit of qualitative in there,

but the, most of it is it’s quantitative too, again, trying to make it, you know, ease of use and something that’s consistent and not a moving target and well, but John, you like me better than you do Bob type of thing. No, take, take that out as much as possible and give you good, meaningful feedback on,

on a, you know, a 90 day basis. I think that that’s where today’s world, especially millennials, I mean, who wants to wait? Do you really want, you know, let’s, let’s just use Netflix, let’s fast forward. Let’s get to the end of the season and know what happens. Right. So, so that’s the world we’re in.

And, and again, a lot of the things that we’re doing, the different levers we’re pulling is because we recognize there, there it’s, the market for labor is intense and we want, if we want excellence, then we need to be excellent. We, you know, birds of a feather flock together, right? I mean, Eagle soar with Eagles.

And, and so if we can have these types of tools, then not only will it attract people of excellence to R H it also, it, it just, it just a matter of, of, you know, I, I want to, I want to be there. And I, I understand that this isn’t, you know, with the Yankees,

nobody would have, would have said, Hey, you know what, if you go over 20, don’t worry about it. Right. Right. So, so it’s a matter of debate, demanding excellence. So do you need to get together with that batting coach and, and really analyze your swing? What can you do? Right. So that you can maybe,

you know, go at least five for 20 minutes, let’s start there. And then let’s get you to 15 for 20 and Better when they’re winning for themselves. Right. Like showing up and contributing and they understand their bigger picture and why all this matters to the whole, you know, operation. So do you find, I mean, this is a lot of leading in,

I mean, this would help you raise capital, get investors. I mean, it, you start showing these types of strategies as the leading indicators of what creates the yield for the investor that maybe if, you know, it doesn’t even see anything, right. They’re backing all of these operations. It seems like these are the leading indicators of those things,

which seems so obvious. Sure. Why do you think so many people don’t step in and do some of these things that may be even, you know, I don’t want to call them different, but you know, you got, you got your operation where a lot of management companies are. It’s very competitive trying to get new clients and marketplaces and, and they’re expanding into different marketplaces.

And, you know, these types of strategies you’re talking about, you know, even in the long-term take time to implement, I would imagine, how do you get somebody that’s maybe operating for a third party that maybe doesn’t drive the vision of that, but the management company ought to, to get the yields. I, I, it’s a great question.

So, and I think I have a really good story. Yeah. Me, that really hits on what you’re talking about. So, so from the standpoint of, of, you know, first of all, WRH, you know, we, we utilize our capital. We have, we, we have plenty of capital. So, so we’re not doing this to attract investors,

right. Because frankly, we don’t want investors. We’d like to buy on our own account. And sure. So, so, so that’s not necessarily why we’re doing it, w we’re doing this because we want to build that generational wealth. And, and, you know, we look at the constituent wheel if you will. Right. So I’m in the middle of that constituent wheel.

I put myself in the middle and I look around and I see vendors. I see, I see team members. I see residents, I see, you know, government institutions. I see. So there’s, there’s a variety of, of constituents and, and we’re doing it for our constituents. It’s, it’s, you know, let’s re if I serve every one of those constituents,

I will drive better, better revenues, better net profits, et cetera. So here’s the story. The story is that this time, last year I’d mentioned that we were meeting and we had this discussion about the 1525. And so, so we, we, we, the board was so excited that the board wanted to, let’s go retroactive with this.

Okay. Yes, you bet. Wow. So it was, it was, it was very, very warmly embraced. It wasn’t, you know, pulling teeth. Right. You know, you’ve got to do this or I’m quitting kind of a thing. Right. And so, so there was full adoption of it. However, we, you know,

we do do some third party management. Sure. And, and on the third-party management, we, we do it because we view it as a way for us to be able to, to even, you know, raise higher the level of excellence in terms of the staffing and the technology tools that we have. Th th cause it’d be hard to justify it if,

if it was just for our own own portfolio. So that’s why we do it. And we, and we kind of look toward the people that we do, third-party management for. Do they match, do they match up with us? So we’re definitely not out there Looking for anybody, just Any kind of an assignment, but if you have the same type of long-term mentality,

if you have the type of principles that we do, if you, if you would embrace excellence through people. Okay, well, let’s talk, we, we would, we’d like to consider seeing if there’s a way that we could serve you to, you know, meet your, your needs. So one of our, our top third-party clients, long-term client,

they said, no, we don’t agree with this 1525. Oh yeah, yeah, yeah. We know, ah, Not onboard with that. Right. And, and of course these are our employees, right. I mean, that’s the way all of these structures are. And, but Hey, you know, what it gets back to, you know,

serving, right. So, so it’s not very service oriented, servant oriented. If I, if I try to cram something down your throat, right. I mean, that just doesn’t really work. So, so we said, okay, you know, what, if you’re not comfortable with this, it really, we really would encourage you to, because it’s,

it’s really a good message. If, if we can say to all WRH employees across the board, it doesn’t matter which asset you’re working on it. This is w this is the way it works this way. We roll it at WRH. We care about you, you know, it’s kind of, kind of takes away from the message for us to have to say,

well, except for, but they, but they felt strongly about it. And, and my view was, you know, what, give them a year and they will see their results and they will be there. And so within a year, we’ll have everybody at 1525. I it’s, it’s almost a year right. About a year. And I believe we have everybody at 1525,

you know, I mean, as the, as the floor at the minimum, obviously there’s plenty of people that make above that, but Because we’re not managing to the payroll or imagined to the NOI anyway, right. Like you bet, you bet ended up getting there in some capacity. And I think, I think that we’ve proven over the last year,

how, how much that there is a link between pay and excellence and, and know. So, so the, the pandemic, the pandemic was a huge test for everybody. Right. And so, Well, there’s some efficiencies there too that maybe we could rethink some things too, but you best explore that, but you bet. Well, I, I’m just thinking.

So, so as most companies and, you know, I put my CFO hat on here, you know, I’m, I’m looking at a PPP loan, right. Because, because th the threshold was, look, is there uncertainty to your future? And if there is, you would qualify for this, this loan. So we’re looking at this, and I was kind of a,

you know, an early adopter terms of understanding and learning. What’s, what’s, you know, the different drafts that are going and what it will probably look like when it comes out at the end of the day, we, we made the decision. We don’t want one of those just, it’s not in line with, you know, we were doing projections of,

Hey, we might see 50% erosion of our revenues because when you have, you know, how many people sick and not working, being fired, et cetera, who could really be bad. We were doing a lot of pro farmer looking at demographics of our, of our resident base, the whole works. And so, so with, with that, we,

you know, right off the bat, our, our CEO, Mark Rutledge, he said, he’s like, you know, we’ve never seen something like this in our, you know, we’ve got, you know, a lot of experience on this executive team. And none of us seen anything like this, our parents haven’t seen anything like this. So, so we need to really come together as a,

as a team and really up our game with respect to communication, we need to stay close to the hip with each other. And constantly w as, as things are changing so rapidly, and I really credit, you know, Mark’s thinking along those lines too, the, we were really focused on the excellence through people. And we were talking about, we had just barely done this,

another one of these 3d collaboratives, where we developed the, the property CEO and then the pandemic hit. So right off the bat, you know, the idea of, we need to communicate, we need to come close together as a team. Right? And, and in our first meeting, you know, the, the chairman, the board joined in to the,

to the meeting and his statement was, you know, even though we have these, these great automated tools that, that tell us on a weekly basis, daily basis, what should pricing be for one of our units? So forget that we need to care. We need to show the residents that we care about them. That there’s empathy, because they’re going through some pretty scary stuff.

We’re all going through this. We don’t know what’s going to happen. Right? So I, I think that we should not raise rents on any renewal. We should not raise rent. You know, anybody who wants to let you forget what that all says, keep rents where they are and start, start, you know, if anybody has trouble making their rent payment,

let’s work with them, forget the evictions. You know, now if somebody says somebody just a problem, that’s a different story, but somebody, and that’s kind of the commercial real estate, Hey, are you a part of the problem or part of the solution? And, you know, so, so I, I saw that as a really strong signal to,

to speak to the entire executive team, to then speak to the entire organization of, Hey, everybody, we’ve got your back. Don’t worry about it. In terms of, of, you know, we, we care more about the safety of our employees, the wellbeing financially of our employees, the safety of our residents and the wellbeing of our residents.

Then we do our own situation. We have plenty of capital. We can, we can withstand this storm. Let’s do what’s right. For those, the people, the back to that excellence through people that, that constituent we, right. You know, the residents are our key on there. The team members are key on there. So what we did was we,

we said, all right, in April, even though you just received your annual bonus in March, you have now taken on a completely new role because we believe you’re at, we believe that you are essential. And so we never shut down. Yeah. We, we, we operated through the whole pandemic. Of course we provided, you know, all the PPE,

we, you know, we had to, you know, follow any local CDC guidelines, you know, so, so we’re doing it right. And, and for instance, if, if you’re a maintenance person, you’re absolutely essential because we have hundreds of people that are relying on you. And if their air conditioner doesn’t work, it’s pretty darn essential.

Now, if you don’t feel safe going into that, that apartment and fixing the air conditioner or whatever the need is, don’t worry. We’re not gonna force you. You know, this, isn’t what we’re firing you. We will find another way to do it. So again, it gets back to focusing on the people. So anyhow, so perspective of their needs.

Yeah, exactly. And, and so with another raise or not raise another, another bonus in April, plus that, that message of, you know, we, we care about it. Yeah. You’re putting them at ease too. That’s more news, more fear coming at them than ever before. And it’s like, what, they’re going to fill in the gaps if,

if you’re not out there with that message. That’s right. And, and, and speaking of message. So when you, that, that leadership team that was meeting every single Monday morning, there was communication, like none other in the organization throughout the pandemic. So, so here, you’ve got, you know, the whole make lemonade with lemons type of thing.

I mean, this is right in the face of really nasty stuff, but, but the way that, that WRH chose to, to, you know, really go through this journey, it, it showed everybody how much, you know, what that caring level is. It showed everybody that, wow, the vice president of operations, he really cares he’s,

he’s on this phone call with me and giving me direction, asking, answering my questions, understanding why I’m, I’m being fearful. And so, so it was really taking a crisis and, and seeing the opportunity in it and really coming out extremely well. Yeah. What, how do you manage to those expectations in terms of, I mean, obviously you have to be in a,

in a position of strength to have the patients and it’s like, solve the income problem. So then you can, so then you can do the right thing. I see a lot of companies, you know, they’re, they’re scared as much as their employees, right? Like, how are we going to remain relevant? How are we going to meet payroll,

cash flow, all those things, will we be able to interact with the marketplace, all those things. So if a company isn’t sitting on strength, you know, how do you get through some of those, those things, there’s this, this new, it’s not even a new way of thinking, but it’s a different way. I would say, You know,

I I’m sure that you’ve seen it in your career. You’ve seen it in others’ careers and I’ve certainly seen it in mine. And, and that is true. Leadership has, has a big, strong component of courage. And, and so, so to me, you can’t let fear paralyze you. And so, so I I’ve been involved in organizations where,

Oh, it’s, it’s a recessionary time. Sure. Let’s cut back on our marketing. Right. And it’s like, no, Yeah, you’ve got the CFO over here saying, don’t spend any money into the CEO’s saying, Hey, go sell stuff. It’s like, wait a minute. There’s other exactly. Now, now fortunately, I, you know,

the type I, I’m a very relational CFO. Yes. I understand. Gap and tax, you know, but, but you know, I see, I see, I see the holistic picture. Right. And so, so no, I, I would, I would fight anytime. I would hear something like that. Even if it’s the CEO saying let’s cut the marketing.

No, if anything, we’ve got to double down and do more marketing. Maybe it’s smarter marketing. Maybe there’s a new, new types of marketing, but, but definitely do not because we need customers. We need, we need residents and we, you know, we need revenue and let’s, let’s, let’s really find new ways. If that’s what it takes.

That’s find new ways to generate new revenue sources, new business models. But let’s, let’s, let’s not hunker down. A lot of companies about now in this pandemic are saying, okay, let’s go on ahead and turn the 401k matching back on. Right. So, so I get it. A lot of companies that, you know, maybe they were in positions where they just couldn’t.

But again, this gets back to the fear and not letting fear drive you, but being courage and courageous and letting, letting that be more of what, you know, I we’re going to make this, we’re going to make it through. Let’s not send signals to our team members of, Hey, you know, that, that match that, that I used to do,

I don’t have do it. So that’s one of the first things I’m going to cut. Well, think about it. I talked about it earlier. How, how tough the market is right now to find people of excellence. Why would I ever risk over a 401k match, losing somebody? And then what do I get to do? I get to pay $16,000 to replace them.

And now I’ve got somebody who’s who’s who may be a diamond in the rough, or they may be another $16,000 bad decision and the lawsuit, or who knows. Right. Exactly. You you’ve been around, you know, that’s true. And so how can you develop When you mentioned relation a relational CFO, is that because of the, sort of the family,

like really getting beyond the numbers and into why a family would own multi-family? Is it, is it something you can teach or is it a strength? Well, I, I think that, I think you can probably teach just about anything it’s just as to, you know, how effective does that, that teaching, you know, grab on and, and resonate with who it is that you’re trying to teach.

Right. So, so I think you have to have some natural, you know, inherent kind of leaning in a particular direction to then, you know, have those types of concepts, if you will really attach to you, and then you, you actually flex those muscles and because just like anything, right. I mean, you could teach me something today.

You know, we went to the gym and, and mentally we went to the gym and, and, and I flexed that, that muscle. Sure. Right. Okay. Well, I better get to the gym tomorrow and the next day. And, you know, I, I’m going to need to repeatedly, you know, flex that muscle, otherwise that muscle will never grow.

Right. And so that, that’s where I would, I would look at it, you know, in terms of being a relational CFO, you know, anybody who’s a CFO, I, well, not anybody, but for the most part, you, you went through formal schooling, you’ve had, you know, a variety of, of professional experiences and,

and, you know, so, so you’ve, you, you should flex those types of muscles, but, And you’re dealing with exceptions in many cases and absolutes and, and, you know, recurring activities in terms of the it’s like that steering wheel right. In the vehicle. So, but I guess what I’m wondering is do you see that role evolving and because of technology and the different aspects of bigger purchases that are happening,

that, that new, new, new ideas, new ways of, of even even risk, you know, new ways of transacting in the world today, I did remote world. I, I think that, that I gravitated to this, this type of, you know, financial leader mentality way early on in my career. And, and I’ve just developed it over the years.

I think that, I think that more and more people that are, are on a CFO path, or they are a CFO or that they, they get that, that it’s all about people. And it’s just a matter of where are they on their journey in terms of, of that, that development. I personally, I don’t think I would have ever had the types of success,

you know, had I just been a head thinker, only the head heart balance is, is really, to me, that’s the key. Yeah. It seems like there’s a blend of more than the financial piece of it that has to, that has to evolve over time. You guys have done a lot of things, purchased land, acquiring more units,

at least for clients. And, and you know, what, how do you, how do you still go on the growth mindset even when you’re still, I mean, you’re, you’re people are going through all these different aspects. Are you, does it feel like, you know, there, there was even early on in, in the stages of,

of COVID it was like, don’t show profit, don’t show success, like when people are hurting right now. Right. So how do you go on the offense in, in that period of time? Wow. I, you know, I never even really thought of it in that sense, but you’re right. That, that is something to, you know,

kind of care about other people’s feelings almost, you know, if I’m hearing you right. Yeah. Not to apologize, you know? Yeah. Yeah. I, yeah. I don’t think that, that there was any conscious thought of that. It was, I mean, we’re Mark, Mark’s an athlete, I’m an athlete. Yeah, sure. Our,

our team has that, that heart of a champion, if you will. And so, so it’s all about, it’s all about finding ways to win and not, not, not with that at all costs. Right. It’s, it’s, it’s finding ways to win so that we all win. And, and so, so I think that, I know,

I know with myself as I was going through this, I would have conversation with, with bankers let’s for instance, explain it to them where we’re at and the things that we’re doing and why we’re having success. And I’m encouraging them to encourage their other clients to, you know, try doing some of these types of things I’m talking with, you know,

insurance brokers, same, same types of conversations and, you know, other, other people within multifamily as well. So, so kind of, you know, like if you will, a best practice sharing, that’s, that’s kind of the approach. Yeah. And what I guess, you know, through, through all of what you’re doing for this operation,

I guess, how, how do you see, and there’s no predictions, we don’t do a lot of predictions and things like that, but what, what do you, what’s your sense of where we go from here? So I, you know, I, I think that, and as we were talking, I was doing pro formas with 50% revenue reductions because you don’t know where it is.

And I still think that that there’s a, a large degree of uncertainty still. So, I mean, there’s a lot of political uncertainty in the United States right now that is adding on to a lot of all, a lot of the other stuff of, of 2020. But, but I think that I don’t see, and this isn’t, Oh, I’m the biggest prognosticator.

I’m just parroting what I hear from the smart people in terms of, I think that I don’t see the fed, you know, doing much with, with rates. So I think that, that I D now I take that information and I look at history and match it up. And I say, okay, that then tells me that if rates remain low,

cap rates remain low, they will still be deal flow. I th I see that in certain pockets, home ownership is starting to grow, but at the same time, you still have that, that fear of, Ooh, I saw what happened to mom and dad. They got really burned on any of those properties. I think I like renting. I liked the flexibility of renting.

So, so I think that, that there in pockets, there may be some change in terms of, of, you know, what we’ve seen in the last, you know, five, five, even 10 years. But for the most part, I think there’s going to be deals. I think that, you know, if we were able to go through the 20,

20 pandemic and really not see much compression in pricing, and, and I mean, there is still a plethora of activity out there and, you know, we’re out there competing every day on buying assets. You know, we have capital and we want to buy and, but we’re really disciplined. And so, so more times than not, we don’t end up on the best and final list.

And, but that’s okay because we want to be really disciplined with our capital invested, you know, very strategically. And when the right ones come along, we, we, we do those. And then we’re also, we’re also looking at development as, as being a really strong opportunity as well, going forward. So that’s kind of, Yeah. And,

and there’s, there’s new innovations coming to that part of the business that could change. Okay. About 3d printing and all that. Yeah. I mean, you look crazy just the entitlement, you know, all these, the technology’s there. And then, you know, you get to the planning commission and everything’s flattened into the, you know, the,

the flat 2d plans and stuff like that. And so it’ll be interesting how all those things work through, and that’s the solution to affordable housing, if it’s efficiency or who knows what, but that’s, you know, definitely something to watch. I, I will say that, you know, spending time at, even our, our events and summits that we’ve done,

we’ve had sort of a, an inside look at, at some of those leading technologies where they’re building units in other countries, even skyscrapers and like record times days. And it just blows your mind to think of the possibilities, but I know a lot of things have to catch up for, you know, you look@eventhe.com I guess, era where the crash in the early days of.com,

you know, you had people trying to do home grocer, home delivery of groceries, and Hey, it made sense, but, you know, people didn’t want to put credit cards online, the timing wasn’t right. And so there’s so many elements that go into making all this. Right. So what, what, what are you excited about? I know you talked a little about where,

what you, how you see things, you know, from here out, but what, what are you excited about? Well, I, for, for next year, what’s pretty exciting is, is we’ve already identified eight, eight new applications that we won’t, we won’t develop them all in 2021, but just Dig into these, inside the, the container of your program,

right. Applications. Yes, exactly. So those excellence through people, applications that, that content, just like every application that I use on my phone makes my phone more, more precious and more valuable to me, every one of these applications that actually get used, you know, and people embrace them, we’ll make the WRH excellence through people model that much more,

that much more, you know, really valuable and, and attracting, right. Because we want to attract the best, right. We, we didn’t, we demand excellence. We want to attract excellence. And I think that, that that’s, what’s happening. We are seeing that where, where, you know, people are learning about what we’re doing.

We’re not, you know, we’re definitely not a big player. We’re, we’re a good size organization. We’re well-known, but there’s a lot of other players that are much larger than us. And so from the standpoint of whether, whether I mentioned that we’re not really seeking clients and on the, on the management side, but, but you know, one of our,

the, the, the client that’s, that’s bringing 20 new properties. They, they were with one of the large well-known firms and, and they just made their decision what’s best for them. They would rather more of that boutique working with us where we’re going to treat you, just like we treat our own properties that own. And there’s a difference. I know,

I, I remember when I, I first started working with GE and one of the, the head honchos said, well, you know, we are entrepreneurial. And, and I, I just kind of check it like you, and it’s like, it’s like, you know, you, you might think that you’re entrepreneurial and that’s great, but when you’re 300,000 people strong across the world,

you really can’t act like you’re entrepreneurial. And whereas, you know, a company that’s, that’s smaller has their finger on the pulse of, of the market. I th I just, that’s, that’s a space I like to be in. And that’s, that’s what excites me about being without BRH, it’s, that’s, that’s the organization. And, and you’re able to,

you know, really pick and choose who do you want to do business with because you’re partnering with them. And, you know, who wants a partner that, that doesn’t, isn’t thrilled with the, with your ideas and concepts and how you do it. You want, you want it the matched properly. So, so I was like, Oh, great.

We got, we got a new client with 10 properties. Sure. We hate each other. They can’t wait to get rid of us. So it’s, it’s, it’s all about, it’s about relationships. It’s about people. Yeah. What you, how do you see as a CFO technology? Talk to me about that. So, so technology, I mean,

I think that technology totally embraced technology. And I think that, that I don’t mind being on the leading edge of technology, but certainly don’t want to get so far out in front of my skis that I’m on that bleeding edge. Right. Right. Because, because it changes so rapidly, I need to know that it’s going to be there. I know I was with another,

another organization years ago, and I was talking with my chief technology officer and he says to me, yeah, you know, all you CFOs, you all think cloud is the answer. And that’s because we had your typical mainframe kind of environment. And, you know, it’s like, sure, that was a threat to that CTO. Right. And you know,

here, here we are not many years later. And cloud is definitely if, if w R H was not dedicated to, to the cloud, this pandemic would have been crushing. We were, we were teed up. We had, we had practiced a year in advance cause that’s a year in advance when we started the, the w H excellence through people.

So we were really honing our, our people thinking muscles for a year in advance. So when that pandemic did hit, we, we were, we were flexed and ready to go from, from the people that heart side. Sure. And then at the same time, because as I’ve mentioned, many times already, you know, very metric driven and how are we metric driven?

You, you don’t get metrics, good, solid value, you know, type metrics if you don’t have good technology. So, so, you know, we’ve been, we’ve been working out that technology muscle for years and years and years. And we probably, you know, got a little soft on the people, muscle, the heart thinking. Right.

And so, so because of a year prior to the pandemic, we were working out both of those muscles day one, we, we, we were able to keep everybody safe in terms of working remotely, because we had all the technology tools in place already. So it wasn’t like, Ooh, I need to learn how to, how to use this new software.

Right. And at the same time, I needed to figure out how I’m going to even do my job now that I’m, I can’t meet together in the office the way that we used to. So, so technology definitely is, is, you know, it, it hugely important to the value, the value add process. Yeah. And, and I would follow that up with,

how do you see the customer? Are you paying, I mean, the next generation renter, even today’s generation renter, are you, I know you’ve really had a deep, you know, compassion and understanding of the employees. I mean, they’re customers too, but how are you guys seeing the customer, the people that ended up renting and maybe choosing not to buy and end up renting?

How are you looking at that? Well, I, I hope that it’s come across in our short conversation here that, you know, we’re, we’re highly focused on that customer, right? So, so the resident, they are, they are the key. And, and so whether it’s providing them with, you know, we’re talking about technology, providing them with the type of technology tools so that they can,

they can continue their life dependent, no matter what the future looks like with, with this pandemic or the next pandemic, or, you know, whatever comes our way. You know, we, we are already changing our designs on, on what, we’re, what we’re going to, we’re going to start another development in 2021. And, and so we’re changing up on some of the,

those designs and, and, you know, with that thought of, okay, these are the residents, what will be attracted to them? What do they need? You know, we know what they needed for the last five years, but for the next five years, what, what would be more valuable to them? And because just like, just like we’re competing in the marketplace for the best employees we’re competing in the marketplace for the best residents.

We have residents that have, have lived in our properties for, for 20 years. I just heard a story yesterday from one of our regionals in the Texas market, where there was a resonant in a property, been there 10 years. And, you know, you know, elderly, it’s, he’s retired and with COVID, he really couldn’t, he couldn’t get out and shop.

He couldn’t, you know, just all of the things that we take for granted. Sure. And, and so the team onsite, they, they kind of adopted him and, you know, really took care of him. What do you need? Let us, let us get it for you. Let us help you through this. And I mean,

that’s, that’s what we’re talking about. And it’s not looking at, Oh, well, you’re dollars and cents. That’s why I’m treating you like this. Right. It’s looking at you, you’re a person, right. It’s excellence through people and, and there’s value in you being a person. I want to serve you. How can I serve you?

Sure. And, Oh, you need me to take you to an appointment. No problem. That’s not my job, but I can take you to an appointment. I have a car you need, you need to have some groceries picked up for you. We got you covered. Don’t worry. And so, so there’s, there’s definitely a very, very high focus on,

on our residents as, as a very important customer. Yeah. That’s, that’s, that’s amazing. I love those stories because I mean, we’ve all grown up on and watch TV and movies. And, and obviously the, sometimes the property owner is not portrayed. Yes. And that type of manner it’s, you know, it’s portrayed in other ways.

And that brand has to change, you know, because this has been an opportunity for these communities that you guys build and manage and take care of for those people that live within them to have a new way to experience life. I mean, in, in many cases, I mean, I have kids, I mean, we were told to stay home with kids and well stay home.

And then the kids were not in school. So you’re working at home and the kids were at home and all these things change. And so I like to hear that even in your design build stuff that you’re, you’re, you’re thinking about what my maybe different in the next five years. So it’s pretty, pretty fascinating. Yeah. And you know, back to the constituent wheel,

cause you were talking, it reminded me of that. So the CDC this year somehow decided that they had had this, this authority to get into the real estate world and, and start telling, telling owners of properties, what they can and can’t do with their, with their property. And, and back to, if you, if I look at you and I mentioned,

you know, governmental agencies, as I talked, talked about people that are all are around that constituent wheel, you know, I need to, I need to do a better job with the CDC or with whoever is coming up with the next executive order saying, Hey, everybody, you don’t have to pay rent. I need to do a better job with them so that they understand,

we aren’t like, you know, we can, we can self police this industry. We can self police ourselves. Nobody wins. If, if we just have, have no heart, we also, nobody wins if we have no head. Right. So if I give you rent for free, you’re going to love it. Right. But you’re not gonna love it in a year from now because that building will have deferred maintenance.

It’ll just be a horrible nightmare. And so, so just like we’re balancing heart and hat, you know, we need to, with all of our constituents, we need them to understand that balance of heart and head. You can’t come in and wave a wand and make a dictate that you know what you can and can’t do with your property, right?

Maybe you feel like you can, and maybe you even have a legal right to, I highly challenged that you would have a legal right to infringe on, on, you know, very strong rights. But, but nonetheless, you need to be able to, to, you know, look at it from the standpoint of we are, you can’t just lump everybody into one,

one size fits all. Here’s here. For instance, WRH w you know, I can challenge anybody to find a resident. Who’s going to say, yeah, they were really bad people. They treated us wrong type of a thing. No, because we don’t treat people wrong. We, we treat people like they are people and people just because you are a person you’re,

you’re valued. And if we, again, if we always maintain that balance, I know how many times we’ve said it, the heart, the heart, thinking the mind think and bounce between the two of them. Then I think that people who probably have good intentions, but they maybe don’t understand the logical conclusion to these, these ideas of force, everybody to not be allowed to evict force people,

to not, you know, charge rent that’s right. It just doesn’t work. It doesn’t work. And, you know, you don’t talk about what you don’t know. And sometimes the intention, maybe in the public view, it seems like a move to make, but not understanding that do the math and, and, and how that math plays out over coming months.

If, if, if you take oxygen away from You stop right. Of essential at some point, it’s going to be Problematic. Yeah. So I can appreciate all that. And I think that it’s, and thank you for some of those remarks, because I think that’s another step in just planting another seed. So other leaders, and, and if it’s congressmen or,

you know, you know, just leaders around, even if it’s a city council, Rooney and people to really truly understand this industry at that level and, and hearing from other great owners that are doing great things. So I appreciate what you guys are doing. And you guys also making one of the top places, top 50 best places to work multifamily.

It’s been an amazing honor to, for absolutely. And appreciate all that you guys do. All right. So let’s keep the conversation going on. Social. Let’s follow us on Instagram, LinkedIn. We’re also on Facebook anywhere else. You can find us follow us on there, and we’ll be, we’ll be in touch with you for some more upcoming shows some of the behind the scenes,

you know, documentaries that we’re filming upcoming events, workshops, and even mastermind. So visit multifamily innovation.com. That’s multifamily innovation.com. All right, we’ll see you in the next show. Thanks for listening to this episode Of the multifamily innovation show. Please remember to like, and subscribe for more episodes. Don’t forget to hit the notification bell so you can stay up to date.

Everything is MultiCare.

Tagged as: .

Avatar
Author

Patrick Antrim

Patrick Antrim is the Founder of Multifamily Leadership, LLC, a thought leadership platform providing streaming content around technology, innovation, and leadership. He also produces two of the highest level events in the Multifamily Apartment industry. The Multifamily Leadership brand is preparing Multifamily Leaders for the FUTURE. They honor the Best Places to Work in Multifamily®️ at our annual leadership Innovation summit.

list Archive

Previous episode