Henry:
That is the BiggerPockets Podcast present quantity 784. Look, I did it. I nailed the fingers on the primary attempt. Take that David Greene. So for reference, what you’re saying is within the final 12 months, you had 218 calls from tenants round points or potential points at a property. And of these 218 calls, you solely needed to speak to somebody one time.

Pasha:
Appropriate.

Henry:
I’d say the system works.

Pasha:
Thanks. Or perhaps I’m simply tremendous fortunate. I don’t know.

Henry:
I’m taking on the BiggerPockets Podcast immediately and I’ve the pleasure of interviewing my good pal, my associate, my pupil, Mr. Pasha Maleknia. Pasha’s obtained a complicated diploma in data methods. He’s right here to show you find out how to construct methods that prevent money and time. Pasha, we all know you like board video games. So what would you say is extra enjoyable, studying a brand new board sport or constructing a brand new system?

Pasha:
You’re making it so exhausting. I’d say constructing a brand new system. I similar to to problem and simply the problem of it. In fact you’re a nerd.

Henry:
So why must you stick round for this episode? We’re going to be dispelling some myths round system. We’re going to speak about why you’re in all probability already spending time on methods with out even realizing it. Your methods in all probability simply aren’t that nice but. We’re going to speak concerning the money and time methods can prevent, the money and time it saved me, the money and time it’s saved Pasha. And so if you’re a newbie, it is a excellent spot to be as a result of you may set your online business up for development within the long-term. And in the event you’re an skilled investor, you must stick round and hear as a result of we’re going to speak about issues that might probably put extra money in your pocket and likewise assist you handle your tenants with out you having to spend a lot time addressing these points your self. All proper, so Pasha’s right here with me. He desires to tackle the introduction of the fast tip for me. So immediately we’re going to maneuver into the-

Pasha:
Fast tip.

Henry:
At the moment’s fast tip is go to biggerpockets.com/sources. There you may obtain Pasha’s instance spreadsheet of how one can implement a system and jumpstart constructing methods to your personal enterprise. Thanks Pasha for sharing that with us. It’s a brilliant cool software. You’ll really get to see a chunk of it in the event you’re watching this model of the podcast otherwise you’ll hear me clarify what that system spreadsheet is and the way he makes use of it in his enterprise. So thanks for sharing that with us.

Pasha:
Completely a pleasure.

Henry:
All proper, let’s get into the interview with Pasha. All proper everyone, let’s welcome Pasha Maleknia again to the present.

Pasha:
All proper, thanks. Thanks, Henry, for having me.

Henry:
Superior, man. So for a bit little bit of background, we just lately had Pasha on an episode, episode 773, the place he shared his unbelievable story about how he obtained into the world of actual property investing and the way he’s taken that begin and catapulted his enterprise. However we type of left with a bit little bit of a cliffhanger. Pasha is an professional on methods and find out how to save your self money and time with actual property investing and we needed to dive into it, however clearly didn’t have time in that episode. So we introduced him again, particularly on this episode, to dig into methods, what they’re and the way he implements them and the way try to be contemplating and doing the identical factor. As a result of the tremendous secret is everyone already has methods in place, they in all probability simply suck. So let’s speak to Pasha about methods.
So Pasha, clearly, he’s a pal of mine, he’s a pupil of mine, and he’s a wonderful actual property investor. So I needed to begin off, Pasha, in the event you wouldn’t thoughts by let’s dispel some myths round methods. As a result of at any time when individuals hear the phrase system, I believe typically they suppose it’s lots both greater than it’s or costlier than it’s, or that they’re not prepared for methods of their enterprise but. And I don’t actually consider any of these issues are true. So let’s discuss a few of these myths after which you may inform us why they’re lacking or in the event that they’re lacking. Perhaps I’m simply utterly fallacious right here.

Pasha:
100%. Let’s do it.

Henry:
So the primary delusion is that methods should be complicated. Is that this a delusion or is that this info?

Pasha:
Completely a delusion. As you already know, even in greater firms typically there’s a bent to construct complicated methods and it virtually at all times fireplace backed. I believe the very best methods that I’ve encountered are of their easiest type. And also you at all times wish to begin with a quite simple one stage sort of system that works for you after which begin, you may at all times make it extra related to a enterprise or to the difficulty that you just’re tackling. However I see this lots that individuals begin with an ideal system, a really complicated system as a result of they like it, however whereas they’re constructing it, they need it to be completely excellent, however it finally ends up with a system that by no means implements.
The only type of methods are at all times higher as a result of you may at all times get a suggestions and you may at all times return and construct it once more and make it a bit bit extra related. There’s a saying that claims: “Your first 5 methods, at all times going to suck.” So it’s higher to only begin it easy, guarantee that it’s like, perceive why, what’s the drawback, return, repair it. After which as you go ahead it’s going to be extra related to your want. However undoubtedly don’t begin with a fancy system.

Henry:
Superior. Man, that’s nice perception as a result of I believe individuals do are inclined to overthink methods. I do know I did and truthfully in all probability nonetheless do in loads of areas of my enterprise. So the second delusion is that you just want some costly software program after which when you get this piece of software program, that software program system goes to repair all of your issues.

Pasha:
Oh, man, you’re preaching to the choir. Completely a delusion, completely a delusion. I’ve stated this lots virtually in all of the talks that I’m going to, all of the workshops and every part, individuals attain out and are like, “Okay, what software program do you utilize? What do you utilize for this? What do you utilize for that?” And I at all times clearly inform them the reply, however it’s like lots of people wish to begin from the software program. They suppose software program functions or apps are the methods, which is 100% fallacious.
Mainly you at all times wish to just remember to begin along with your core problems with your online business first, then you definately stroll that again and then you definately give attention to what system can handle that core problem that I’ve. And then you definately exit and store for the softwares or functions for it. An instance I might say goes to Residence Depot and purchase the primary 5 instruments that you just see from the shelf after which return house and attempt to construct one thing with it. That’s not the way it works. You at all times wish to just remember to give attention to a related software to your want. And I see this lots, man. They suppose they simply want to put in writing a verify for a giant fancy software program they usually suppose that each one of their issues are going to go away magically. And I at all times inform them that you just’re in for a giant shock as a result of that’s not going to occur.

Henry:
Superior. Yeah, that’s an effective way to take a look at it. Right here’s a enjoyable reality about me. Even when I knew precisely what software I wanted to do a job and I walked into Residence Depot and acquired that software, I’d suck at that job. I’m simply not useful. That’s simply not a skillset that I’ve. And so that you additionally don’t should be useful to be an actual property investor. Perhaps we’ll throw that on the finish of the present, professional tip for you new buyers.
That’s a incredible level as a result of lots of people suppose that methods imply I have to go purchase a chunk of software program after which I inform the piece of software program, right here’s all of the issues that I do in my enterprise. After which that piece of software program says, superior, that is how you must do these issues and it doesn’t work like that. A system is actually only a set of processes that you just implement systematically again and again and it’s supposed to avoid wasting you money and time. That may be something. We talked yesterday after we have been discussing this present and also you confirmed me one among your methods that was actually only a Google Sheet. Everyone has entry to Google Sheets. So it’s not software program you want, it’s processes.

Pasha:
100%. One other factor that I wish to add is we’re on the age of data expertise that it’s the best time to construct a software program and you probably have 5 softwares proper now, we’re going to have 20 by the tip of subsequent yr, I promise you. And if you wish to simply chase the shiny software program utility, the latest development, man, you’re going to spend some huge cash and also you’re in all probability not going to see nice return on that. That’s the place you wish to just remember to at all times begin from the enterprise, you at all times begin your methods round it, and then you definately return and begin searching for one thing that’s related to yours.

Henry:
The subsequent delusion that I wish to discuss is, so I’m type of going to skip one right here as a result of I believe we presently already hit at it. Techniques are just for giant companies. Clearly we’ve touched on that. We all know that methods are meant for any enterprise of any facet, it’s only a course of. However this one I believe is actually vital is that methods are just for out-of-state buyers.

Pasha:
Once we discuss methods are just for out of the state, I believe that’s not related as a result of I believe I’m the residing instance of this. Now we have about 20 models that the majority of them are inside 10 miles radius of the place I reside, however we type of urge ourselves to guarantee that we by no means step into any of them as a result of we wish to have the liberty of geographical location. We wish to have the ability to be wherever we wish and be capable of renovate our houses and be capable of handle all of our houses. We have already got accomplished the administration piece, now we’re targeted on constructing our methods round rehabbing them remotely. If you wish to be extra passive in your online business, I’d advocate to begin simply interested by constructing the companies that you’ve on a platform that’s scalable and that’s solely doable you probably have a very good system in place. And also you don’t need to be out of the state. You may be as shut as it might probably get to you, however you simply don’t wish to be the weather that’s the heart of your online business.

Henry:
If I’m listening to you accurately, what you’re saying is that methods are supposed to prevent money and time. And who doesn’t wish to save time or cash irrespective of the place you’re positioned? However implementing methods if you end up native as properly I’d suppose provides you an added benefit, proper? Since you’re there within the occasion one thing doesn’t go as deliberate. So it’s simpler to hone your methods once you’re native since you may be there to hone it. After which when you’ve obtained it dialed in, you actually open up virtually this world of growth. As a result of in the event you’re not tied to the geographic location of the place your properties are, although you’re native, what’s stopping you from selecting a distinct market and increasing your online business since you see a chance in a brand new market and now you’re not held again by geographic location? So I believe that’s an outstanding approach to take a look at issues.

Pasha:
100%, 100% agree with that.

Henry:
Nice. So we’ve established it’s about getting again your time and that’s why I believe methods are really for everyone as a result of most individuals get into actual property as a result of they really feel prefer it’s a passive enterprise after which all of us study pretty rapidly that it’s completely not a passive enterprise. However methods assist you to purchase again that passivity in your online business. And so you may nonetheless have a semi-passive enterprise of actual property investing and make it extra passive via the usage of methods. And then you definately really do get time freedom. And that’s actually what that is about. It’s about having the time freedom as a result of that permits you to be the person who you’re referred to as to be and never the person who you must be for cash. I do know Pasha talks about having his crystal clear why and he calls it his “no BS why”. What does that imply and take us via why that’s vital, Pasha.

Pasha:
The no BS why got here up when, in the event you guys really listened to episode 773, it was like I used to be in a really dire scenario, if you’ll. And after that I believed to myself why this by no means got here up. My life setting earlier than this factor was precisely the identical why I didn’t see that. And one of many issues that stood as much as me was I used to be type of following a why, that means why I’m doing all of this or why I needed to have a enterprise, that it was simply not unique to me. It wasn’t that I by no means heard about being an entrepreneur earlier than, I’d by no means heard about monetary independence earlier than. I used to be simply listening to different individuals speaking about how they needed to give up their job or how they needed to have the liberty of monetary dependency on their job, which is nice, don’t get me fallacious.
And I used to be listening to it and I used to be like, yeah, cool, that’s neat. I would like that too. However I by no means took any actions on that as a result of fairly truthfully it was a BS why for me as a result of I like my job. I truthfully do. It wasn’t a giant motivation for me to be above and past and dig deeper into completely different enterprise fashions and attempt to be an entrepreneur. It’s simply a type of issues that you just wish to guarantee that no matter motive you provide you with is one thing that 100% aligns with who you’re and what your core values are. And that is a type of issues that’s type of exhausting as a result of there are such a lot of shiny whys on the market as properly that you just would possibly really simply stumble throughout and also you’re like, “Oh, yeah, cool, I would like it.” That’s not sufficient. You have to have that. It’s not like I wish to have it. You have to have that why.
I believe I talked to you, myself, virtually each different profitable entrepreneur I speak to, there’s a why of their life that comes from the necessity half. It doesn’t come from the need half. As a result of everyone desires to have a cool automobile to drive round. Everyone desires to have a enterprise that generates some huge cash. That’s the side that you just see on loads of social media. However the second that the rainbows and unicorn go away and there are some alligators on the way in which and there are some challenges on the way in which, they again out as a result of that doesn’t fulfill their need half.
And that’s the explanation that I at all times advocate to individuals that truly attain out to me is that just remember to have your eyes on the why, why you’re doing this, and it must be so sturdy. It must strongly align with you in a approach that everytime you get up within the morning, you may give it some thought. It’s already in entrance of your eyes. It’s one thing that you just simply can’t disconnect your self from it. It’s not like in the future you’re not within the temper and in the future you’re within the temper. It simply doesn’t work that approach. And that’s why I referred to as it no BS why and it’s actually exhausting to get there. I imply it’s virtually, it is advisable simply dig deeper and deeper and deeper in your self to get there.

Henry:
Sure, I utterly agree and I like that you just name it the no BS why as a result of I’d by no means heard it referred to as that earlier than. However I’ve talked about it completely different with a number of of my different college students and the way in which I’ve at all times pictured is individuals at all times are, they’re fast to say, “I would like monetary freedom, or, “I would like monetary independence,” or, “I wish to construct generational wealth.” That’s the buzzword, generational wealth. All of these issues sound good, however I don’t know that individuals really perceive what they imply. For me, monetary freedom’s not a aim. It’s not your why. Your why is what you get to do since you’re financially free. Monetary freedom permits you the time freedom to be the person who you’re referred to as to be, not the individual you must be for cash. And usually once you’re the person who you’re referred to as to be, you get to affect different individuals.
So your why is often rooted in who you get to be in service of different individuals. And so once you’re interested by your why, you’re proper, it’s obtained to be the factor that drives you past the nice days and the unhealthy days. You stated it greatest, you stated, you want it, you want it to occur. So in the event you’re pondering proper now, I wish to be an actual property investor in order that I may be financially free, that’s nice. Take it a step deeper. For those who have been free immediately, in the event you awoke and magically had all of the rental property to supply all of the cashflow you wanted to reside your life-style and to pay for all of your life’s bills, what would you be doing with that freedom? Whose life would you be impacting with that freedom? That’s the place your no BS why lives. Agree?

Pasha:
100%. Completely. It’s at all times like, you see that image and then you definately’re like, “Oh, man, wait. So now I’ve freedom however my household sucks,” or one thing like, “Now I have to put all of my undivided consideration to my household.” And then you definately’re like, “Okay, that is what I would like, let’s go for it.” After which there may be nothing that basically can cease you as a result of you already know precisely the place you wish to head to.

Henry:
We do that train with a number of of my college students and the cool half about listening to individuals dig into that’s who you get to be since you’re free. Lots of people are like, “Effectively, now I get to retire my mother and father. Now I get to ship my mother and father on a visit or rework my mother and father’ home,” or, “now I get to pay the medical payments for my sick member of the family who couldn’t afford the right medical therapy.” These are the issues, these are the whys which are going to drive you thru the tough instances. As a result of in case your why is simply rooted in you and what you need, people, we’re human and we let ourselves down day-after-day.
You know the way many instances I stated I’m going to go to the health club tomorrow and didn’t go? We let ourselves down on a regular basis, however we don’t wish to let down different individuals. And so take into consideration who you get to assist, what you get to do with that freedom, that’s what pushes you thru. So speak to me briefly right here, Pasha, about how individuals discover that why, what drove you, what questions did you must ask your self to hit what that why was?

Pasha:
I believe for me it was a bit bit tough as a result of I used to be in a scenario that I discovered myself, I didn’t have loads of time after which instantly it was in entrance of me like, what are crucial issues for me? However what I’d advocate is, one, it is advisable be brutally trustworthy with your self. And there’s a phrase in there brutally, it means it’s not going to be snug, it’s going to be an uncomfortable dialogue. And typically you wish to herald any person that is aware of you very properly and ask them that will help you to dig deeper. It’s extra like interrogation even. You wish to just remember to get to the core wants that you just wish to go after and it’s one thing that simply makes you a blazing why that then it turns into an engine that it is advisable harness that power to run your online business in your day-to-day life.
However I’d say be brutally trustworthy with your self. For those who’re speaking a few particular want that must be compensated for or must be addressed for, what are these wants? Write them down. As you talked about, it may be addressing your particular family members or the scenario that they may be left after. It must be tremendous tailor-made about you. So guarantee that it’s 100% custom-made primarily based in your life, primarily based in your values in life. It’s good to take a look at different individuals’s why and that’s wonderful, however typically it simply merely doesn’t align and also you don’t wish to simply copy another person. You wish to just remember to tailor it for your self and it is advisable simply dig deeper and deeper and deeper till… Whenever you get there, you already know it. It’s a type of issues that, once you hit there, you’re like, “Oh, yeah, that’s it. That’s what 100% aligns with my core worth.”

Henry:
Discovering your why, Pasha’s the 1st step for locating your why is to be brutally trustworthy with your self. He additionally talks about if you wish to be wealthy or why you wish to be wealthy, diving into what meaning. We discuss this lots with individuals. It’s like, what’s the wealth going to do for you? What’s the wealth going to do for the individuals round you? And then you definately discuss once you outline your why, is there one thing that you just didn’t clearly know earlier than? That’s an excellent level as a result of if you end up digging into your why and making an attempt to determine what’s really driving you, it’s uncomfortable. It’s going to boost some questions and now you may need some new data that it is advisable work via so as to work out what that why is.
After which this one, I consider, is massively vital. Is it one thing that excites you everytime you get up within the morning? That’s a reality. This enterprise excites me to no finish. And what I like about this enterprise particularly is attending to share with different individuals and assist different individuals. I actually had a bummer name with a tenant proper earlier than this. However realizing that I obtained to get on right here and share actual property investing with all of you guys and chat with my pal Pasha and have him share his data and knowledge with you has actually lifted me up as a result of my why is rooted in ensuring that I share this data with individuals. So it will get me excited day-after-day. And so in the event you reply no to any of those questions, it signifies that it is advisable preserve digging. And I believe that’s nice. And all these are coming from Pasha. And so what’s superior about that is that is Pashas system for having a why. This dude has a system for every part.
So whereas we’re on that subject, let’s go forward and let’s dive into methods. Pasha sat down with me and reviewed all of his methods for his enterprise. I used to be one who didn’t implement loads of methods, and it’s not as a result of I don’t suppose they’re priceless, it’s simply, I’ve at all times been a prepared, fireplace, purpose type of operator after which make tweaks as I’m going. And once I sat down and went over to Pasha’s system, I used to be totally impressed, a lot in order that we began to implement a number of of the methods that he’s utilizing. So I’ve began to implement a few of these methods in my enterprise and I’m going to speak to you about these. However in a while within the present we’re going to interrupt down 5 steps of how one can construct any passive system with Pasha. So stick to us for that.
However for me, once I sat down with Pasha, I instantly carried out a system for displaying my rental properties and a system for keeping track of renovations of my properties. And so at a extremely excessive stage, Pasha had this nice system for putting in… Primarily you’re putting in web-enabled cameras, hooking them as much as a cell hotspot, after which putting in a web-enabled keypad door lock after which permitting your tenants who wish to see your property. So after our tenants apply, we are able to now give them a code the place they’ll go check out the property and we don’t need to bodily go see the property. And what was large for us is true after we sat down with Pasha about this, we have been about to place a property in the marketplace that was a few 45-minute drive away from the place the remainder of our properties are. And so I used to be like, man, that is going to avoid wasting actually simply two hours of driving time per appointment already off the highest. Plus, in the event you calculate that, and I do this for if I do 10 showings, that’s, what, 20 hours that you just saved in simply drive time.
And so we have been in a position to implement this on that property. We confirmed it nearly. Nobody ever complained, nobody had an issue with it in any respect. The cameras would activate when individuals would enter the room. So we’d know when individuals confirmed up, we’d know once they left. The codes, we’d give all of them cycles, so everyone had their very own code. And it was actually a lot much less time-consuming and fewer painful that we’ve now carried out it for properties which are even near us as a result of not solely is it saving drive time, however it’s saving the time that it takes to really open up the property. And everyone knows as landlords, you set appointments for showings and about half of the individuals present up, a few of them don’t even present up. So that you’ve wasted your time even going to a property and folks simply no present on you. So what an enormous time saver for me. We’re additionally utilizing it to observe our rehab property. So I do know firsthand that a few of these methods have been a lifesaver in my enterprise.
Pasha, let’s discuss, give us two of your favourite methods after which how they’re saving you time or cash.

Pasha:
Oh, yeah, completely. As you talked about, the instance that you just introduced up was an excellent one. I believe after we have been beginning this, we realized that after we wish to present the property or after we wish to have a greater monitoring system on the contractors coming out and in, it must be one thing that may be accomplished nearly. So precisely what you talked about, that’s what we carried out. All of the cameras, all the net connections, and all of the keypads all collectively. And so they really at the moment are all in several packing containers. We’ve obtained seven of those packing containers that they’re all paired. So all they should do is to only ship it to any person, simply plug them to {the electrical} plug after which it’s all going to be on-line. I believe that’s actually one among my favourite ones. So that you undoubtedly took one of many favourite ones for certain.
It saved us loads of time. It nonetheless is saving us loads of time as a result of it’s simply a type of issues that you just simply purchase them as soon as and then you definately preserve utilizing them. As you talked about, you don’t need to be the person who drives all the way in which there. And tenants like it too, as a result of they didn’t really feel strain. They may go into the unit they usually might have a look at it. My contractors additionally, it allowed us to know who is an efficient contractor who shouldn’t be. If any person says, “Oh, I’ve been working right here for 5 days,” they’re like, “No, right here’s a log that truly exhibits you’ve been working right here for 2 days. So let’s wrap it up. After which there are another those that they really really feel higher when you could have safety within the space for all the supplies.
I imply all of this comes collectively into, what you talked about, the ache for enterprise, which is principally the way it’s all related collectively to resolve an issue for you, which for us it was not losing time and never losing power. And it’s additionally really type of humorous too. Generally we go as a result of these are like two-way communications. So typically we go in there with the contractor and we’re like, “Hey, don’t neglect to complete that wall. We have to get that accomplished too.” First they’re all afraid like, who’s speaking to them, after which they discover. It’s really fairly humorous. That’s one among them.
The opposite one which I actually like is the system that I put collectively, which is principally the class of the problems that may go fallacious in our rental properties. For instance, it says you probably have a, let’s say, surge or you probably have overloading like electrical after which we categorize it into plumbing space, landscaping space, principally handyman stuff, HVAC, issues like that. And the issues are principally in right here and the answer to them or the treatment can be in entrance of them. After which on the finish it says, if none of those treatments work, then it is advisable contact this individual for that problem. And that individual goes to be the plumber, electrician, handyman. After which in fact we now have one other web page that has, these are our contacts for electrician, these are our contacts for a plumber, these are our contacts for so-and-so.
Now with one thing like this, I can simply step again and now my digital assistant that’s working remotely can handle all the considerations, not all of them, however I’d say 99% of the issues that our tenants have. They obtain these, they principally come right here, they match them with the issues right here, they stroll tenants via a number of the drawback fixing and typically our tenants are literally in a position to remedy the issue themselves, just like the small ones. Clearly if it’s severe or if it’s one thing that may create a legal responsibility, we ship a licensed individual to repair it. However typically there’s some simpler stuff that they’ll do and, man, our tenants like it. They completely love this as a result of they get to resolve the issue actually quick. And it’s nice for us as a result of we don’t spend a whole lot of {dollars} for each name. It’s one thing that may be addressed. I believe we handle 15% of our upkeep calls with doing one thing like this.
And if it helps, I’m going to guarantee that I ship a template so that you could put it into the facet notes. However once more, this is rather like a template. You have to go in there and see what are the issues which are relevant to your online business and you may construct one thing there. However that is additionally undoubtedly one among our entrance winners.

Henry:
That is actually cool, Pasha. And so what I wish to do is add a bit context right here for individuals who are listening or driving and might’t see, after which I wish to guarantee that I’m interested by it in the fitting approach. So what Pasha’s obtained up here’s a spreadsheet, and in that spreadsheet he’s damaged down a class and I consider the classes are the trades. And we are saying classes, what we’re speaking about is points. So if a tenant has a difficulty, one thing’s not working, you break it down into classes. So there’s that class, plumbing, electrical, is it handyman?
So you determine the class. If the class is a type of, then on this spreadsheet you may observe alongside and say, okay, it’s electrical. So what’s the subcategory? The subcategory, if it’s a electrical, it could possibly be the breakers are tripping or it could possibly be flickering lights. And so you discover the subcategory of the difficulty. After which as soon as you discover the subcategory of that problem, proper subsequent to that subcategory is the treatment or the remedy for that drawback. And so then you may see what that resolution is, attempt to implement that resolution and if that works, the issue is solved. And if that doesn’t work, then your subsequent part is who to contact to get any person on the market to determine what the precise drawback is and get it mounted.
That is like once you name the cable firm as a result of your web’s out they usually’re like, “All proper, properly, is the sunshine lighting up?” And also you’re like, “Yeah, the sunshine’s lighting up.” They’re like, “Okay, nice. What’s your add pace, obtain pace? And also you inform them, they are saying, “Okay, nice.” So loads of these issues are simply solved by typically your modem isn’t on, proper? And so that you’re in a position to make use of this and it’s only a spreadsheet, it’s only a Google Sheet that you just took the time to fill out on the entrance facet with what points you usually see, after which the way you usually remedy these issues, after which who to contact if this remedy doesn’t work. And what you’ve accomplished is you’ve given this spreadsheet basically to a digital assistant.

Pasha:
That’s appropriate, sure.

Henry:
And your digital assistant takes the calls out of your tenants, so that you’re not taking calls for bathrooms and something. Your digital assistant, this actually is their coaching. They simply observe the spreadsheet, inform them what to do. If it doesn’t work, then this spreadsheet tells your digital assistant precisely which contractors to name. Is that appropriate?

Pasha:
That’s appropriate. And, once more, that is an instance, guys. You possibly can construct it your self or if you need, once more, I’m going to verify that is accessible to you as properly. However the contact right here tells the digital assistant who they should contact, as a result of I don’t need them to make use of their judgment for it. I would like them to observe this written down system. So, for instance, on this case it says, if, let’s say, there’s a surge that it simply makes their fusebox flipping, then that is severe, you don’t wish to do something, you wish to contact an electrician. After which there’s one other web page that has the job title and folks which are doing that and it ranks them from the primary to the final. So, begin calling them.

Henry:
And that is nice as a result of lots of people, one of many myths of landlording is that individuals say, “I don’t wish to be a landlord as a result of I don’t wish to take care of tenants and bogs.” And also you simply actually confirmed me a spreadsheet that offers with the tenants and bogs for you. So it’s not that large of a deal, people. Are you able to give us an instance or breakdown ultimately, how a lot time or cash is a system like this saving you and your online business?

Pasha:
Oh, man, lots, lots.

Henry:
What number of calls is your VA taking and what’s the quantity you’re seeing?

Pasha:
We acquired about 218 tickets or calls within the final 12 months for our properties as a result of we really type of expanded and all of them are addressed with my tenants. Now there are some examples which are one-offs which are actually bizarre and it means, for instance, we had a thunderstorm. You and I are each residing in Northwest Arkansas, so we all know that thunderstorms should not that alien right here. After which there was a tree that coming like 45 angle about to hit the home, however it didn’t. So clearly this was a type of issues that we didn’t have it in our system after which we added it. So if there’s a tree hanging round, name a tree individual or tree elimination individual and now, from then they do it. However that was, I believe, the one name that I needed to chip in. I used to be like, “Okay, if that’s the difficulty, it is advisable name this individual.” However then I constructed it into my system so if it occurs once more, then I don’t should be pulled again into it.

Henry:
So for reference, what you’re saying is within the final 12 months you had 218 calls from tenants round points or potential points at a property. And of these 218 calls, you solely needed to speak to somebody one time.

Pasha:
Appropriate.

Henry:
I’d say the system works.

Pasha:
Thanks. Or perhaps I’m simply tremendous fortunate, I don’t know.

Henry:
And it’s not simply that too, it’s not simply that. However what I wish to spotlight right here is he solely needed to get on the telephone one time, however he stated his tenants love this, they’re joyful, they’re not feeling a disconnect from customer support via this.

Pasha:
Precisely.

Henry:
That’s superior.

Pasha:
And that helps us lots as a result of when your clients are joyful, when your renters are joyful, the probabilities of them staying with you is extra. So your emptiness really begins going decrease as a result of they know that at any time when they’ve a difficulty, it’s going to be addressed instantly. They don’t need to name the tenant, name the owner, sorry, after which landlord calls the seller and going backwards and forwards. So that is simply a type of issues that it helps when you could have every part on this format. And once more, I believe you talked about one factor that I actually wish to emphasize. That is constructed on Google Spreadsheet, which is free, out there, accessible to everyone and it’s saving us loads of time. So one other factor is simply go along with what you suppose you wish to do, construct a easy, tangible, straightforward to make use of system on no matter, even back-up a serviette, and simply to begin getting it to work.

Henry:
Thanks a lot, Pasha. I believe that was an excellent instance for individuals to see that methods don’t need to be loopy costly and that they’ll profit everyone and prevent money and time.
All proper, so let’s transfer on to the meat and potatoes of the present. The data individuals actually wish to know is what are the 5 most vital steps for constructing any passive system? The 5 steps we now have listed below are inputs, processes, outputs, suggestions, and the setting. What the heck does that imply? Pasha, give us an instance. So what are the inputs for a system?

Pasha:
So if you concentrate on this, all of the methods have these enter course of, output piece. So enter may be something truthfully, no matter you wish to get into so that you just’d be capable of convert it into one thing else. So the enter could possibly be any information level that you’ll find. For instance, within the instance that I confirmed, the enter goes to be the issue, the difficulty that the tenants are dealing with, proper? It’s simply the information level on the difficulty. It could possibly be your P&L if you wish to have a system that checks your P&L and tells you if you’re doing okay or not. The enter must be actually aligned and I believe crucial factor about enter is the enter is crucial factor that must be aligned along with your core enterprise problem. You don’t wish to have additional data coming in, you need it to be proper, crisp, addressing the precise drawback that you just’re making an attempt to resolve and construct the system round it.

Henry:
Thanks. So enter is what you feed into the system after which course of. What’s the method? And I like the way you associated the inputs to the instance we simply noticed. So let’s proceed that. Let’s discuss what the method is after which what’s the method from the instance you simply confirmed us.

Pasha:
So course of is principally the engine of the system. That’s what it’s. It could possibly be the step-by-step procedures in order that it follows a sure movement chart to get to a sure output. And this instance, for instance, it’s going to be the treatment part, which is once you stroll your tenant via the problems that they’ve and now you wish to principally get it mounted. So that you stroll them via how one can get the enter data and principally add to it or have a look at it from a distinct angle or principally change that information enter. So, for instance, on this case, let’s say, if rubbish disposal is clogged and I believe, “Oh, the landlords are actually aware of this problem,” is that you really want the tenant to go in there, have a look at the underside of it if there’s like a fuse button or one thing or if there’s a Allen wrench that they should use. All of those walkthroughs and procedures and step-by-step guides, that’s the place the method is available in.
And it’s simpler to do that. It’s principally the principle half that’s going to exchange you if you wish to construct a system to exchange you. Does that make sense? That is the place you’d wish to have your data extracted from the person who is an professional, normally it’s going to be you, and also you wish to put it right into a step-by-step information that with that enter can observe these step-by-step so that it’s going to movement via that to the following step.

Henry:
So if I’m following you accurately, the enter is the issue, the method is the the way you’re fixing the issue.

Pasha:
It may be.

Henry:
Okay, now speak to us about output.

Pasha:
All methods have to have a degree which principally desires to provide you what you want. Now typically the output of a system may be enter for the following system and this occurs on a regular basis, particularly if you wish to have a series of system and you probably have a fancy enterprise mannequin that you just wish to put every part collectively. On this instance, the output goes to be a walkthrough that’s already offered and ensuring that the issue is addressed. So it may be in several codecs, it may be within the format of a data repository. Data repository is principally the place you set all your data which are actually tangible and priceless to you.
Within the instance of lead technology, it’s going to be the checklist of those that… So, let’s say, you begin with 1000 individuals, you could have a course of that breaks it all the way down to, let’s say, a listing of 20. And now that 20 goes to be the output of your first system. That’s going to be individuals which are extra prone to be keen to promote their house. Now you could have one other system that use that after which course of it after which sends a mailer to them, for instance. However that output is principally what you’re going after and what the results of your system ought to appear to be. And it may be in several codecs and it may be repeatable.

Henry:
It feels like your outputs can probably be in several codecs even throughout the identical system as a result of with the instance we went via, one output may be that the outcomes guidelines resulted in the issue being mounted and one output may be that you just needed to name knowledgeable in and out one of many sub examples you gave, that skilled got here out and did the work and the output was now you could have a brand new subcategory so as to add to the spreadsheet so that you just don’t have to resolve that drawback once more.

Pasha:
That’s 100% proper. In order that output can feed to completely different methods. Considered one of them is the fee system. It’s a feed to a distinct one, which is like, now the job is finished, it must go to the payroll system. So that you pay them. Once more, you don’t wish to be the one that writes the verify each time. One other one goes to be, the issue is solved, however it was a brand new one, so let’s return and add it to the system that we now have, which principally is the following system which is the suggestions.

Henry:
Yeah, let’s discuss that.

Pasha:
So suggestions… Okay, so the enter course of output is sort of frequent. I’d say that even in large corporates when it’s constructed, when the enter is given and when the output is taken, everyone’s like, “Hallelujah, we obtained there. That’s the system we wish.” And, man, I see this again and again, which they simply go away it like that. They’re like, “Okay, cool, the system is working.” After which they simply go on to the following one. The issue is you construct a system however it’s not a sustainable system as a result of because the context adjustments, because the enter adjustments, because the enterprise world adjustments, your system must be alert, it wants to know what’s occurring so it might probably alter itself.
So a very good instance of it will be figuring out KPIs for the way your system is working in order that you already know in case your system is definitely in fine condition or not. So, for instance, on this case, once more going again to the upkeep system, the KPI for us is, are our tenants joyful about addressing their points or not? So we ship out two surveys each six months, principally, yearly. So each six months we ship one survey and we ask our tenants how do they really feel they’re being handled, how do they suppose their upkeep points are being addressed? And that may be a nice KPI as a result of it tells us whether or not it’s one thing that ultimately our tenants are feeling nice about it or not. And in the event that they don’t, we have to come again. In order that’s our KPI, proper?
The primary yr it would work completely, however the second yr it would really not work very well and it’s going to boost a purple flag that enables us to return in there, dig into our system and see what was the difficulty, what brought on that individual to not be joyful about it. After which we stroll it again after which we alter our processes, we alter our enter to guarantee that subsequent time we are able to handle this. So the suggestions is principally a loop that goes out of your output to the method and to the enter to guarantee that we replace it and keep related.

Henry:
Okay, nice. So, if I’m understanding, the suggestions or suggestions loop is what takes your system from being a static system that by no means adjustments to a dynamic system that’s altering or evolving as your online business evolves. So with the instance you gave, you measure your tenants, principally you measure in the event that they’re happy with the work that’s being accomplished. In case you are nice, you state the system retains doing what it’s doing. For those who’re getting loads of suggestions that tenants aren’t joyful, then you may dig deeper into that suggestions after which alter your system to deal with these suggestions points after which proceed to judge and make adjustments so your system is dynamic. And I’m going to exit on a limb right here and I’m going to guess that you’ve a system that does the suggestions for you.

Pasha:
I like that. I like that. You understand I do. No, yeah, completely. Now you wish to guarantee that, once more, that system, that suggestions loop can be working the way in which that you really want. This is sort of a loop, it’s like a spiral, you may simply go all the way down to it. However 100%. And once more, begin with one thing easy, simply enter course of output is ideal, however it shouldn’t be like your last vacation spot. Simply put some KPI, be sure that this KPI is nice. In order for you, you may at all times, as Henry talked about, construct one other system to your KPI. However on the finish of the day you wish to guarantee that this isn’t a one linear line. It really goes again and it feeds itself so it stays related. As a result of in the event you do this, you’re going to need to spend much less time coming again to the issues that aren’t being addressed by your methods.

Henry:
Incredible. So to recap, we obtained the 5 fundamental parts of a system is the enter. That’s the drawback that you just feed into the system. You’ve obtained the method, that’s basically the way you’re fixing the issue or the way you’re addressing that problem. You’ve obtained your output, which may be the outcomes of that course of and that may be a constructive or a destructive outcome. After which you may make changes to your course of via suggestions and measuring the outcomes. After which setting, we didn’t contact on setting, did we?

Pasha:
The setting is principally the context that your system is working in and that’s just like the final element that you really want to pay attention to. Mainly on this instance, once more, if this method is working in houses, I’m simply saying like in Arkansas and now you wish to handle the identical properties in, let’s say, California, you’re in a distinct context, you’re in a distinct context for enter, you’re in a distinct context for processes, some litigations apply to it, some litigations to the output and that’s the place you need to pay attention to that, return in there and alter your methods to the context that they’re working in to guarantee that your system stays related.

Henry:
Thanks for breaking down that 5 step course of, Pasha, that’s nice data and I believe it actually helps not solely to demystify methods however make it appear to be one thing everyone ought to be implementing inside their enterprise at some stage. Earlier than we go, give us some examples of some wins or some successes or some positivity that’s come from you implementing a number of methods in your online business that perhaps you didn’t anticipate.

Pasha:
I believe one among them is we have been really in Hawaii and my condominium obtained flooded, one of many ones that truly we had a tenant in. I’m not speaking a few leak or one thing. It was about to get flooded actually unhealthy. I didn’t even discover. It was simply on my weekly report that I get from the digital assistant of what’s occurring as a result of I at all times wish to know what’s occurring. And it was simply addressed mechanically. The issue raised, they referred to as, there’s an emergency stage on that system, it was a excessive emergency. They dispatched any person like a plumber that’s actually good in mildew remediation and all of that. Thank God it didn’t get to any of this as a result of we had this in like the primary hour.
And I believe, all in all, we spent about $800 and it included a brand new piece to the water heater, which, if I didn’t have the system in there, I’m fairly certain my journey would’ve been ruined and it wouldn’t be a really pleasing expertise for my tenant both. But it surely was addressed within the first couple of hours and it was utterly working wonderful, which, to me, it was an excellent win as a result of it confirmed me that it might probably work particularly once I wanted it to.

Henry:
Yeah, man, that’s an excellent instance since you’re proper, nobody desires the decision once they’re on trip that one among their models flooded. And it at all times looks as if that’s once you get these calls is once you’re out having a very good time. In order that’s cool that your system simply type of dealt with it for you and saved you all types of cash and did precisely what it was alleged to do. That’s wonderful. Thanks for sharing that.
All proper, thanks, Pasha, for giving us this breakdown of methods. There are some nice data that you just gave us as a result of, once more, methods, I like to consider it and also you type of put this in my head, it’s that we’re all already utilizing methods, proper? A system is only a course of you could have in your online business and loads of the instances our processes simply aren’t nice. And so pondering of methods isn’t pondering of how can I’m going purchase an costly piece of software program or how do I spend loads of effort and time to resolve big-level issues? It’s only a matter of systematizing the issues which are vital to you or the issues which are taking probably the most of your time that you just don’t wish to be taking your time and giving it some inputs, some processes and a few outputs, after which offering some suggestions to maintain your methods dynamic and you may actually save your self, not simply time however cash. Did I summarize that in a great way there for you?

Pasha:
And one other factor that I simply needed so as to add actual fast is usually it’s such as you won’t be the person who is the professional in that space and that’s nonetheless wonderful. An excellent instance is like, you and I’ve been associates for years and I personally discovered lots from you, particularly relating to discovering good off-market offers. And I used to be like, man, this man is aware of his stuff. As I confirmed it to you, we began interested by all of those procedures and processes, how can we flip that right into a system in order that even that may be automated.
So, for instance, I do know that we didn’t get time to get there, however even lead technology proper now for me is one thing that I put collectively. Once more, we tried it, it began with probably the most easiest method, however proper now it’s like, hey, I simply despatched this zip code that I wish to go after. After which there’s really, I referred to as it LA, so native assistant, that picks it up, processes all of the mails. The direct mails are out, all of the codecs, every part is predefined. However all of them comes from, not from me, however from a educated individual within the space, such as you, that may assist me get understanding how this ought to be. And all I do is simply take the idea from the thinner and convert it right into a system and simply let the system work.

Henry:
That’s nice data. An effective way to consider fixing issues. Pasha, thanks a lot for being gracious sufficient to share a template or a clean template instance of your, what do you name that?

Pasha:
I name it Residential Upkeep System XLX.

Henry:
Your RMS Spreadsheet. And so if you need to try that spreadsheet template, you may go to biggerpockets.com/sources the place Pasha has been gracious sufficient to share that with us. And so let the individuals know the place they’ll discover you, Mr. Pasha.

Pasha:
You will discover me on Instagram, @techierealestate, T-E-C-H-I-E, actual property, all one phrase. And in addition the web site is 5dayscourse.com. These are the 2 locations that you’ll find me.

Henry:
Nice. And you’ll find me on Instagram as properly. I’m @thehenrywashington on Instagram. Thanks a lot for becoming a member of us. A number of nice data there, Pasha. It’s been a pleasure speaking to you and we want you nothing however the very best.

Pasha:
Thanks, sir. Have a very good one.