Balancing Profit & People (Inside Multifamily Asset Management)

Episode Transcript:  

  Real estate investing to a lot of people seems like, Hey, a great way to make money. All I have to do is buy a place, rent it out to somebody. Maybe keep up with it a little bit. But what about when you own an entire apartment complex or multiple homes? Most people discover it's not nearly as simple as it seems.

So today we are gonna unpack the truth about what it takes to really manage multifamily assets. Let's get ready to scale.

Hey guys, my name is Jeannette Friedrich, director of Investor Relations here at Blue Lake Capital, and joining me today is Kayla Maack. Kayla is an asset management expert, currently serving as our new senior asset manager at Blue Lake Capital. Before that she was the senior regional manager for RPM Living, and prior to that, the owner had arrived housing, arrived service, both long and short-term rentals for single family homes.

After Kayla realized that there was a huge need in the market for single family management services. And prior to that, this entrepreneur was the owner at Zendo. Zor was a startup company where she founded her own property management software. In addition to all of that impressive track record, she also is a child advocate for casa, and she advocates for children throughout the city of Maricopa County courts for those that are going into foster care, and she's joining us today.

From Tempe, Arizona. So Kayla, welcome to the show. 

Thank you so much for having me, Jeanette. I'm excited to dive in here. 

Yeah, I really appreciate you taking the time for those that dunno, she's actually on vacation and doing me a solid getting onto the show today. Kayla. Let's just dive right in because I think a lot of people really do have a lot of misconceptions about what it takes to really manage assets.

I think that it's possible that some investors think, oh, you just have to do rent collections and some occasional repairs. But when we are talking about, say, a 300 unit community that's run by just a handful of site leaders, what are the unseen processes that actually fill an average day and keep operations moving smoothly?

Yeah, that's such a great question. And to your point, yes. I mean there is just so much that goes into the daily, weekly, monthly, quarterly management of an asset to make sure, our investors are protected and our clients are protected and some of the unforeseen. Challenges or systems that we're utilizing on a day-to-day basis.

The nice thing about property management is it's different every day. And I think those people that get into property management do it for that purpose. There's no solid routine in place. Every single day. We're faced with different challenges, whether it is resident communication about a late rent payment but beyond that, work orders, preventative maintenance leaks that may happen throughout the property randomly. We've seen buildings where there's severe emergencies. There's so many different challenges that property managers face. And on a 300 unit property, you can assume you're looking at almost upwards of, probably actually 500 residents, not just 300.

That in of itself is a challenge. Just the people management of it is there's care that comes with it. There's challenges that come with people management. You're dealing with people's lives, people's homes, and you have to really be on your toes every single day and care for them and show that care.

And make sure that they're living in a place that's worthy of being called home. 

I love that. I love that. In addition to that too, one time I was speaking with someone else that was in asset management and they pointed out to me that every property is really a multimillion dollar property that they are running.

And so it's essentially a multimillion dollar business, if you will, while at the same time really about real people, their real lives, their real homes, and their real families. So it, yes, it's gotta be incredibly challenging. Now, I'm curious to know when it comes to, communication and being able to really exercise your people skills, what have you found to be some of the most effective ways to approach difficult?

Subjects, for example a tenant is laid on their rent or, you're trying to help them avoid eviction and things like that. How do you typically find you get the best results from people that are either your tenants or possibly even teammates? 

It's really hearing them. It's understanding, it's listening.

I think so often we become. Counselors and listeners to many of these residents. There have been so many times I have sat side by side with somebody and listened to very personal circumstances that they were going through, and the idea is to always come at it with some type of solution and some type of middle ground.

We are here, we're protecting our clients to say, Hey, at the end of the day, here's where we need to be, maybe financially. But there are so many other pieces to that portion of what we do because we are also having to be advocates for the property management company and for our residents. So we really are a middle man in this great journey of.

Of managing these multimillion dollar assets. And we did do some framework at a prior company of mine where we set that to our property managers. We taught them how do you understand the value of your assets? And instead of saying, I'm just a property manager, you say, I'm the CEO of this multimillion dollar asset because it's true at the end of the day, you are.

Running this ship and for our residents, you have to come at them with care and understanding and saying, Hey, okay. I. My job here is to hold you to your lease agreement, and my job is to make sure that you pay your rent and you pay it on time. But I'm hearing this circumstance that you're dealing with and here's a solution, or here's a resource.

And so many times when we do that, we not only see retention, but we build a bond with that resident. And I have seen managers have residents follow them to different communities just by doing that. It sounds so little and so simple, but you are going out of your way to hear what they need and to provide them with something that's gonna help them at the end of the day.

So that in and of itself gets you so far with a resident. 

That's amazing to hear. And actually I never had taken that into consideration or actually thought about that, but it's such a great point that you make that by building those relationships, you can even, as crazy as it sounds, create a following right of residents that go with you and how much people value how you make them feel.

As the saying goes. Yeah. Very interesting. Now, Kayla, along those lines too, I'm curious to know now that we have so much prop tech emerging and for those that are not up to speed with all of the day-to-day lingo that we use around here, this is basically just technology that's used for property management or tenant management.

In short, they call it prop tech. So now that PropTech has started to streamline work orders and communications I think it's even more challenging to make residents feel like you care about them, and it's not just all transactional. So I'm curious to know, what forward-looking metrics do you monitor that connect the day-to-day operational data that you absolutely wanna keep an eye on?

But still balance that with resident wellbeing as well as still keeping your eye on the prize, which is the long-term value creation for investors. 

That is a super question, and yes, absolutely there, it, it has to be more than transactional. The further away from making it transactional as possible, because again, there is a human aspect to this.

These are people's homes, these are people's lives. So forward thinking. I would say it, it's gonna be touchpoint throughout their lease. You don't want it to just be, Hey, I moved in and now we never speak again. So there needs to be touch points throughout their lease term to show, Hey, we haven't connected, I haven't heard from you, we don't have work orders.

I wanted to check in, see how things are going in your home. And that human aspect of it is what will set. Different assets apart because there are very many who just utilize AI or utilize different technologies to, again, track metrics and track communication and track. We do surveys, we do reviews, but again, that's all transactional.

That's just showing, hey, we did this thing and in return you gave us this. 



So viewing it more as just. What can we do for you without expecting anything in return is huge. And there's not a lot of ways necessarily to track metrics like that. It really is just the human base. I would say that we have systems in place like renewal touchpoint and move in touchpoint to follow up on specific processes.

There's not necessarily a way to track those metrics. At this point, I think it would be great to do but again, does that make it become transactional? Because once you're tracking a metric, there's something behind that in our minds that becomes a job. 



And we want it. We wanna almost remove that from the thought and make it really just a human interaction.

Wonderful. And I'm curious to know, how do you inspire the teams that you oversee to basically embrace this type of mindset and attitude towards, the tenants that they're there to help manage? 

So often people who get into this industry do it because they already have that mindset. Not always.

And I think that there's definitely a point in time where you can lose that. Spark and forget that. So to keep them motivated and to keep them intentional in that, really it comes down to how you lead or I lead. Do I care about my people? Because in turn, they're going to take that and care about their people, and their people are gonna care about the residents.

And it's a domino effect and. I think anything in property management is a domino effect because one thing affects so many different other operational standards and metrics, and this is part of that too. If I come in and I'm leading my people with kindness, with grace, with support, they're not feeling the stress that can sometimes come with managing these properties.



They are coming at it with, okay, like I have this. Kayla has my back, or my upper leadership has my back, and I know I'm doing a good job. I'm getting my small wins celebrated. I'm getting my big wins celebrated, and I'm getting support through my challenges, and it makes their jobs when they're coming in and having residents throughout the day come in, usually only with issues.

Very rarely are they getting people coming in and just saying. You guys are doing a great job here. High five. It's almost always they're coming in and they're upset and we're having to deescalate so many different situations. A work order a late rent payment, somebody who can't make ends meet we're, we are emotionally drained many times in this job.

And your leadership makes a huge difference in how you. Approach those situations day after day. 

Yeah. Very good insight. All right. Now I'm curious to know too, given your extensive background where do you often see operators misstep that, quietly erodes returns? And what should investors be asking sponsors to confirm that these types of risks are being controlled before they start to scale out?

Great question. I think we see some of the bigger hiccups when it comes to renovations and doing renovations on different assets. There are quite a lot of different, things that can go wrong. So overseeing a renovation process really requires so many different people to be involved and regular updates.

One of the things that we do here at Blue Lake, which I absolutely love from a client perspective getting that intake from the property management group is our renovation tracker because it not only tracks unit by unit and cost by unit but it also tracks those premiums on rents and things of that nature.

So that would definitely be something I would recommend is that if you don't have a process like that implemented. You implement it do your due diligence beforehand and understand the supplier where we're getting the materials from. Understand a typical timeline from the group doing the renovations, understand the relationships behind the renovations and really scope out strong vendors and strong suppliers who are gonna be able to deliver on time and not further delay to add vacancy and add, other different cost variables that are gonna impact the property financially, but having some type of tracker and system in place when it comes to renovations. And you can ask the property management group, what do you have in place that's gonna help us track this project by cost, by unit, and things of that nature.

Because it really makes a big difference in, in making sure financially there's not big misses. 

Absolutely. Very good insight there. And for those of you listening along that, may or may not be aware there is a tendency to track project cost, but not by unit cost. And it is something a little bit strict and unique here at Blue Lake that not a lot of operators do.

Some do, but there's a lot that don't. They always are eyeing the project costs and not the unit costs, and that's where you can start to lose sight of, money. Really beginning to lose its ROI as these types of renovations are implemented. Excellent insight, Kayla. All right. And then my last question for you before we get to the lightning round is beyond the spreadsheets, can you just share a moment when thoughtful management altered the trajectory of a resident or maybe even an entire community showing why you know these assets matter for people just as much as they do for profit?

Absolutely. I have so many of these situations that have happened throughout my career and I hear it from my community managers and the teams that are running these assets so regularly. An experience I had personally as a regional manager, which I. Is not typical for a regional manager. We usually will deal with escalated residents who, are at their wit's end, maybe with the site teams.

So we jump in sometimes when things have really gone the wrong way. For whatever reasons. It's not always the property manager, sometimes it's just the resident. But I had a resident who was dealing with a very personal situation and was trying to. Leave her previous home. She was applying, not even a resident yet, a prospect at one of the properties that I oversaw.

And the site team was taking too long to process the application. She was getting very antsy 'cause she had to get out of a situation. So she called me and I went out of my way to. Essentially tell her, while of course this would benefit me for her to move into this complex, it was very clear she had already got, her relationship started off on a not so great foot.

So I went out of my way and I found a bunch of sister properties. So it still benefited, the management company. We still got the move in. She just didn't move into my particular complex. And I called around to different managers, got pricing, got specials, and I gave that all to her and she was so grateful just for the legwork I had done to help her move forward and get out of this situation that she sent me a bouquet of flowers to our corporate office.

And I checked in with her afterwards even, and just said, Hey, I am, hoping that this situation is resolved and you're somewhere safe now. And that they're treating you well. And she was just very grateful for. Somebody doing to me what should be standard. And it was such a low bar of expectation on her end, in my opinion.



But she was grateful because she needed it. She needed the help and the guidance. And for me to not say, Hey, I really want you to move into this complex even though you didn't have a great experience. So it, it goes wonders. It, 



Goes far. 

Love it. Absolutely love it.

It makes a big difference. And I think something that a lot of people also don't realize is sometimes, we forget that our life experiences are not those of others. And sometimes people truly don't know how to access additional resources or don't know, quote better. And we have to be mindful of that and, the differences that, exist in life and experiences.

So I love it. Great story. Yes. All right. Wonderful. Kayla, we've arrived now at what I call the lightning round questions, which are five questions that I ask all the guests on the show just to make it a little more fun and interesting. So are you ready? I'm ready. All right. So when you are not managing assets and your family, what do you do for fun?

Oh, 

great question. I think I do have two beautiful girls now and I love them, but. And many other people out here can probably relate to this. You can lose yourself in motherhood. And it is so important to maintain some type of individuality and hobbies and things that you just truly love.

I have recently taken back up. Playing piano. This was something I always have loved doing and I again stopped doing it for some time now. So I have been dabbling in playing piano. Nice. We absolutely love hiking. My husband and I used to every single year hike the Grand Canyon. Oh wow. All the way down to the bottom and all the way back out.

We stopped doing that after we have kids. So we have recently gotten back into. Hiking. However, it's at a halt now just with Tempe being, a hundred plus degrees. But yeah those two things are really my creativity and some exercise, some outdoor time. Yep. 

Goes a long way.

Yep. Wonderful. All right. Now what is something interesting about you that most people don't know? 

I am adopted. Ah. I went through the foster care system growing up, which had challenges of its own, and I really truly think that advocating for kids who are going through things like this is so important because these kids just need someone stable, somebody who's there for them and for me, that's.

My giving back. I experienced it and I want to make sure I'm that stable person for somebody else. 

Love it. Love it. Wow. All right. And then, one of the things that we also talk about on the show is, yes, we all wanna make money. We wanna have strong returns. That's great. But the whole point behind it is people really seeking to create and live extraordinary lives.

So what is your advice to someone that is focused on doing that? 

Ooh, great question. I would say a little bit at a time. It doesn't need to be that you go. All in and go big. You can start small, you can buy one single family home and turn that into more and more investment properties. And the second piece of advice I would say is just do it.

It 

doesn't need to be overly analytical and overly thought out, and a five year plan or a 10 year plan, just do it. 

Love it. Very good advice. A lot of people often say that they wish they had started sooner. Yes. And that definitely is a resounding theme on the show. All right. And then last but not least, if folks wanna get in touch with you, have some questions or wanna bounce some ideas off you, how can they find you?

Oh, that's a great I love that. I would love for people to reach out. I know extensively about property management, so I am. Open to any type of conversation. LinkedIn would be great. You can find me on LinkedIn. I think that would be the best way. I'm open to email. I can share that through a LinkedIn message.

If we wanna talk that way or jump on a phone call, I'm happy to share all my personal contact information. But let's connect on LinkedIn. I. 

All right, perfect. And we'll be sure to include that in a link to your LinkedIn in the show notes. All right. Very interesting and very insightful. I love your passion for people, Kayla, and it's why I am very happy that you are on board here at Blue Lake.

You've already begun to make a great impact, and I have no doubt you'll continue to make an even bigger impact along the way. So thank you so much for coming on and sharing your thoughts. 

Thank you so much for having me. It's been great. 

And for those of you that invested your time with us today, thank you.

Please don't forget to the show, subscribe to it. Leave us some comments and let us know more that you'd like us to dig into. And until next time, be bold. Ready to scale is brought to you by Blue Lake Capital, where we hunt down the best multi-family investment opportunities that we can find. And invite investors to join in with us.

We target Class B value add multifamily properties across the Sunbelt. Our CEO Ellie Pearlman invest a substantial amount of capital into every deal. This means our interests are aligned with yours. If you're an accredited investor looking to expand your portfolio and diversify sponsors, be sure to visit us@bluelakecapital.com.

Blue Lake Capital, be bold, be extraordinary, and keep moving forward, bold. Be extraordinary, and we'll see you on the next episode.