Henry:
That is the BiggerPockets Podcast present quantity 784. Look, I did it. I nailed the fingers on the primary strive. 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 discuss to somebody one time.

Pasha:
Appropriate.

Henry:
I’d say the system works.

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

Henry:
I’m taking up the BiggerPockets Podcast right now and I’ve the pleasure of interviewing my good good friend, my accomplice, my pupil, Mr. Pasha Maleknia. Pasha’s bought a sophisticated diploma in info methods. He’s right here to show you the way 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 arduous. I’d say constructing a brand new system. I similar to to problem and simply the problem of it. After all you’re a nerd.

Henry:
So why do you have to 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 understanding 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 in case you are a newbie, it is a good spot to be as a result of you’ll be able to set what you are promoting up for progress within the long-term. And should you’re an skilled investor, it is best to 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 in addition assist you deal with 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 needs to tackle the introduction of the short tip for me. So right now we’re going to maneuver into the-

Pasha:
Fast tip.

Henry:
As we speak’s fast tip is go to biggerpockets.com/sources. There you’ll be able to obtain Pasha’s instance spreadsheet of how one can implement a system and jumpstart constructing methods in your personal enterprise. Thanks Pasha for sharing that with us. It’s a brilliant cool device. You’ll truly get to see a chunk of it should 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 all people, let’s welcome Pasha Maleknia again to the present.

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

Henry:
Superior, man. So for a little bit little bit of background, we not too long ago had Pasha on an episode, episode 773, the place he shared his unbelievable story about how he bought 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 little bit little bit of a cliffhanger. Pasha is an skilled on methods and the way 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 you need to be contemplating and doing the identical factor. As a result of the tremendous secret is all people already has methods in place, they in all probability simply suck. So let’s discuss to Pasha about methods.
So Pasha, clearly, he’s a good friend of mine, he’s a pupil of mine, and he’s a superb actual property investor. So I needed to start out off, Pasha, should you wouldn’t thoughts by let’s dispel some myths round methods. As a result of each time folks hear the phrase system, I feel typically they suppose it’s loads both larger than it’s or dearer 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’ll be able to inform us why they’re lacking or in the event that they’re lacking. Perhaps I’m simply utterly unsuitable 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 details?

Pasha:
Completely a delusion. As you already know, even in larger companies typically there’s an inclination to construct complicated methods and it virtually all the time hearth backed. I feel the perfect methods that I’ve encountered are of their easiest type. And also you all the time wish to begin with a quite simple one degree sort of system that works for you after which begin, you’ll be able to all the time make it extra related to a enterprise or to the problem that you simply’re tackling. However I see this loads that individuals begin with an ideal system, a really complicated system as a result of they find it irresistible, however whereas they’re constructing it, they need it to be completely good, however it finally ends up with a system that by no means implements.
The only type of methods are all the time higher as a result of you’ll be able to all the time get a suggestions and you may all the time return and construct it once more and make it a little bit bit extra related. There’s a saying that claims: “Your first 5 methods, all the time going to suck.” So it’s higher to only begin it easy, make it possible for 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 posh system.

Henry:
Superior. Man, that’s nice perception as a result of I feel folks do are inclined to overthink methods. I do know I did and truthfully in all probability nonetheless do in numerous areas of my enterprise. So the second delusion is that you simply 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 mentioned this loads virtually in all of the talks that I’m going to, all of the workshops and every little thing, folks attain out and are like, “Okay, what software program do you employ? What do you employ for this? What do you employ for that?” And I all the time clearly inform them the reply, however it’s like lots of people wish to begin from the software program. They suppose software program purposes or apps are the methods, which is 100% unsuitable.
Mainly you all the time wish to just remember to begin together with your core problems with what you are promoting first, you then stroll that again and you then concentrate on what system can deal with that core problem that I’ve. And you then exit and store for the softwares or purposes for it. An instance I might say goes to House Depot and purchase the primary 5 instruments that you simply see from the shelf after which return residence and attempt to construct one thing with it. That’s not the way it works. You all the time wish to just remember to concentrate on a related device in your want. And I see this loads, man. They suppose they simply want to write down 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 all the time inform them that you simply’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 have a look at it. Right here’s a enjoyable reality about me. Even when I knew precisely what device I wanted to do a job and I walked into House Depot and purchased that device, I’d suck at that job. I’m simply not helpful. That’s simply not a skillset that I’ve. And so that you additionally don’t should be helpful 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 implausible level as a result of lots of people suppose that methods imply I must 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 it is best to do these issues and it doesn’t work like that. A system is de facto only a set of processes that you simply implement systematically time and again and it’s supposed to avoid wasting you money and time. That may be something. We talked yesterday once we had been discussing this present and also you confirmed me considered one of your methods that was actually only a Google Sheet. All people 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 simplest 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 12 months, 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 all the time begin from the enterprise, you all the time begin your methods round it, and you then return and begin purchasing for one thing that’s related to yours.

Henry:
The following delusion that I wish to discuss is, so I’m type of going to skip one right here as a result of I feel we at the moment already hit at it. Programs are just for giant companies. Clearly we’ve touched on that. We all know that methods are meant for any enterprise of any aspect, it’s only a course of. However this one I feel is de facto essential is that methods are just for out-of-state buyers.

Pasha:
Once we discuss methods are just for out of the state, I feel that’s not related as a result of I feel I’m the residing instance of this. We’ve about 20 models that the majority of them are inside 10 miles radius of the place I dwell, however we type of urge ourselves to make it possible for we by no means step into any of them as a result of we wish to have the liberty of geographical location. We would like to have the ability to be wherever we would like and be capable of renovate our houses and be capable of handle all of our houses. We have already got performed the administration piece, now we’re targeted on constructing our methods round rehabbing them remotely. If you wish to be extra passive in what you are promoting, I’d advocate to start out simply desirous about 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 will be as shut as it could actually get to you, however you simply don’t wish to be the weather that’s the middle of what you are promoting.

Henry:
If I’m listening to you appropriately, 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 find yourself native as nicely I’d suppose offers 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 if you’re native since you will be there to hone it. After which when you’ve bought it dialed in, you actually open up virtually this world of enlargement. As a result of should you’re not tied to the geographic location of the place your properties are, despite the fact that you’re native, what’s stopping you from choosing a special market and increasing what you are promoting since you see a possibility in a brand new market and now you’re not held again by geographic location? So I feel that’s an exceptional manner to have 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 feel methods are actually 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 help you purchase again that passivity in what you are promoting. And so you’ll be able to nonetheless have a semi-passive enterprise of actual property investing and make it extra passive by way of the usage of methods. And you then actually 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 by way of why that’s essential, Pasha.

Pasha:
The no BS why got here up when, should you guys truly 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, which 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 folks 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 unsuitable.
And I used to be listening to it and I used to be like, yeah, cool, that’s neat. I need 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 simply wish to make it possible for no matter purpose you provide you with is one thing that 100% aligns with who you might be and what your core values are. And that is a type of issues that’s type of arduous as a result of there are such a lot of shiny whys on the market as nicely that you simply may truly simply stumble throughout and also you’re like, “Oh, yeah, cool, I need it.” That’s not sufficient. It is advisable have that. It’s not like I wish to have it. It is advisable have that why.
I feel I talked to you, myself, virtually each different profitable entrepreneur I discuss 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 all people needs to have a cool automotive to drive round. All people needs to have a enterprise that generates some huge cash. That’s the side that you simply see on numerous 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 all the time advocate to folks that really attain out to me is that just remember to have your eyes on the why, why you might be doing this, and it must be so robust. It must strongly align with you in a manner that everytime you get up within the morning, you’ll be able to give it some thought. It’s already in entrance of your eyes. It’s one thing that you simply simply can not disconnect your self from it. It’s not like someday you’re not within the temper and someday you might be within the temper. It simply doesn’t work that manner. And that’s why I referred to as it no BS why and it’s actually arduous to get there. I imply it’s virtually, that you must simply dig deeper and deeper and deeper in your self to get there.

Henry:
Sure, I utterly agree and I like that you simply 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 all the time pictured is folks all the time are, they’re fast to say, “I need monetary freedom, or, “I need 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 actually perceive what they imply. For me, monetary freedom’s not a purpose. 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 sometimes if you’re the person who you’re referred to as to be, you get to influence different folks.
So your why is often rooted in who you get to be in service of different folks. And so if you’re desirous about your why, you’re proper, it’s bought to be the factor that drives you past the great days and the dangerous days. You mentioned it finest, you mentioned, you want it, you want it to occur. So should you’re pondering proper now, I wish to be an actual property investor in order that I will be financially free, that’s nice. Take it a step deeper. In the event you had been free right now, should you awakened and magically had all of the rental property to provide all of the cashflow you wanted to dwell your way of life 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 all the time like, you see that image and you then’re like, “Oh, man, wait. So now I’ve freedom however my household sucks,” or one thing like, “Now I must put all of my undivided consideration to my household.” And you then’re like, “Okay, that is what I want, let’s go for it.” After which there’s nothing that actually 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 folks dig into that’s who you get to be since you’re free. Lots of people are like, “Nicely, now I get to retire my dad and mom. Now I get to ship my dad and mom on a visit or rework my dad and mom’ home,” or, “now I get to pay the medical payments for my sick member of the family who couldn’t afford the correct medical remedy.” These are the issues, these are the whys which might be going to drive you thru the tough occasions. As a result of in case your why is barely rooted in you and what you need, of us, we’re human and we let ourselves down each day.
You understand how many occasions I mentioned 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 folks. 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 discuss to me briefly right here, Pasha, about how folks discover that why, what drove you, what questions did you must ask your self to hit what that why was?

Pasha:
I feel for me it was a little bit bit tough as a result of I used to be in a scenario that I discovered myself, I didn’t have numerous time after which instantly it was in entrance of me like, what are an important issues for me? However what I’d advocate is, one, that you must be brutally sincere 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 usher in someone that is aware of you very nicely 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 simply wish to go after and it’s one thing that simply makes you a blazing why that then it turns into an engine that that you must harness that vitality to run what you are promoting in your day-to-day life.
However I’d say be brutally sincere with your self. In the event you’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 is likely to be addressing your particular family members or the scenario that they is likely to be left after. It must be tremendous tailor-made about you. So make it possible for it’s 100% custom-made primarily based in your life, primarily based in your values in life. It’s good to have a look at different folks’s why and that’s superb, 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 that you must simply dig deeper and deeper and deeper till… While you get there, you already know it. It’s a type of issues that, if 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 sincere with your self. He additionally talks about if you wish to be wealthy or why you wish to be wealthy, diving into what which means. We discuss this loads with folks. It’s like, what’s the wealth going to do for you? What’s the wealth going to do for the folks round you? And you then discuss if you outline your why, is there one thing that you simply didn’t clearly know earlier than? That’s an awesome level as a result of if you find yourself digging into your why and making an attempt to determine what’s actually driving you, it’s uncomfortable. It’s going to boost some questions and now you may need some new info that that you must work by way of with a view to determine what that why is.
After which this one, I consider, is massively essential. 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 folks and assist different folks. I actually had a bummer name with a tenant proper earlier than this. However understanding that I bought to get on right here and share actual property investing with all of you guys and chat with my good friend 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 folks. So it will get me excited each day. And so should you reply no to any of those questions, it signifies that that you must hold digging. And I feel 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 little thing.
So whereas we’re on that matter, 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 numerous methods, and it’s not as a result of I don’t suppose they’re beneficial, it’s simply, I’ve all the time been a prepared, hearth, purpose type of operator after which make tweaks as I’m going. And after I sat down and went over to Pasha’s system, I used to be completely 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, after I sat down with Pasha, I instantly carried out a system for exhibiting my rental properties and a system for maintaining a tally of renovations of my properties. And so at a very excessive degree, Pasha had this nice system for putting in… Primarily you’re putting in web-enabled cameras, hooking them as much as a cellular 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 enormous for us is correct once we sat down with Pasha about this, we had been about to place a property available on the market 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, should you calculate that, and I try this for if I do 10 showings, that’s, what, 20 hours that you simply saved in simply drive time.
And so we had 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 folks would enter the room. So we might know when folks confirmed up, we might know once they left. The codes, we might give all of them cycles, so all people 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 might be 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 folks 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 simply introduced up was an excellent one. I feel once we had been beginning this, we realized that once we wish to present the property or once we wish to have a greater monitoring system on the contractors coming out and in, it must be one thing that may be performed nearly. So precisely what you talked about, that’s what we carried out. All of the cameras, all the online connections, and all of the keypads all collectively. They usually truly are actually all in several containers. We’ve bought seven of those containers that they’re all paired. So all they should do is to only ship it to someone, simply plug them to {the electrical} plug after which it’s all going to be on-line. I feel that’s actually considered one of my favourite ones. So that you undoubtedly took one of many favourite ones for certain.
It saved us numerous time. It nonetheless is saving us numerous time as a result of it’s simply a type of issues that you simply simply purchase them as soon as and you then hold utilizing them. As you talked about, you don’t need to be the person who drives all the way in which there. And tenants find it irresistible too, as a result of they didn’t really feel stress. They might go into the unit they usually might have a look at it. My contractors additionally, it allowed us to grasp who is an effective contractor who is just not. If someone says, “Oh, I’ve been working right here for 5 days,” they’re like, “No, right here’s a log that really reveals you’ve been working right here for 2 days. So let’s wrap it up. After which there are another those who they really really feel higher when you’ve gotten safety within the space for the entire supplies.
I imply all of this comes collectively into, what you talked about, the ache for enterprise, which is mainly the way it’s all linked collectively to resolve an issue for you, which for us it was not losing time and never losing vitality. And it’s additionally truly type of humorous too. Typically 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 performed too.” First they’re all afraid like, who’s speaking to them, after which they discover. It’s truly fairly humorous. That’s considered one of them.
The opposite one which I actually like is the system that I put collectively, which is mainly the class of the problems that may go unsuitable 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, mainly handyman stuff, HVAC, issues like that. And the issues are mainly 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 that you must contact this individual for that problem. And that individual goes to be the plumber, electrician, handyman. After which after all we’ve 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 deal with the entire considerations, not all of them, however I’d say 99% of the issues that our tenants have. They obtain these, they mainly come right here, they match them with the issues right here, they stroll tenants by way of a number of the drawback fixing and typically our tenants are literally in a position to clear up the issue themselves, just like the small ones. Clearly if it’s critical 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 find it irresistible. 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 tons of of {dollars} for each name. It’s one thing that may be addressed. I feel we deal with 15% of our upkeep calls with doing one thing like this.
And if it helps, I’m going to make it possible for I ship a template as a way to put it into the aspect notes. However once more, this is rather like a template. It is advisable go in there and see what are the issues which might be relevant to what you are promoting and you may construct one thing there. However that is additionally undoubtedly considered one of our entrance winners.

Henry:
That is actually cool, Pasha. And so what I wish to do is add a little bit context right here for individuals who are listening or driving and may’t see, after which I wish to make it possible for I’m desirous about it in the proper manner. So what Pasha’s bought 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’ll be able to observe alongside and say, okay, it’s electrical. So what’s the subcategory? The subcategory, if it’s a electrical, it might be the breakers are tripping or it might be flickering lights. And so you discover the subcategory of the problem. After which as soon as you discover the subcategory of that problem, proper subsequent to that subcategory is the treatment or the clear up for that drawback. And so then you’ll be able to see what that answer is, attempt to implement that answer and if that works, the issue is solved. And if that doesn’t work, then your subsequent part is who to contact to get someone on the market to determine what the precise drawback is and get it mounted.
That is like if you name the cable firm as a result of your web’s out they usually’re like, “All proper, nicely, 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 velocity, obtain velocity? And also you inform them, they are saying, “Okay, nice.” So numerous 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 simply took the time to fill out on the entrance aspect with what points you usually see, after which the way you usually clear up these issues, after which who to contact if this clear up doesn’t work. And what you’ve performed 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 bogs 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 in order for you, once more, I’m going to ensure that is accessible to you as nicely. 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 need 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 critical, 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 might be 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 cope with 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 huge of a deal, of us. Are you able to give us an instance or breakdown in a roundabout way, how a lot time or cash is a system like this saving you and what you are promoting?

Pasha:
Oh, man, loads, loads.

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 truly type of expanded and all of them are addressed with my tenants. Now there are some examples which might be one-offs which might be 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 feel, the one name that I needed to chip in. I used to be like, “Okay, if that’s the problem, that you must 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 discuss to somebody one time.

Pasha:
Appropriate.

Henry:
I’d say the system works.

Pasha:
Thanks. Or possibly 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 cellphone one time, however he mentioned his tenants love this, they’re comfortable, they’re not feeling a disconnect from customer support by way of this.

Pasha:
Precisely.

Henry:
That’s superior.

Pasha:
And that helps us loads as a result of when your prospects are comfortable, when your renters are comfortable, the possibilities of them staying with you is extra. So your emptiness truly begins going decrease as a result of they know that each time 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’ve gotten every little thing on this format. And once more, I feel you talked about one factor that I actually wish to emphasize. That is constructed on Google Spreadsheet, which is free, accessible, accessible to all people and it’s saving us numerous 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 start out getting it to work.

Henry:
Thanks a lot, Pasha. I feel that was an awesome instance for folks to see that methods don’t need to be loopy costly and that they’ll profit all people and prevent money and time.
All proper, so let’s transfer on to the meat and potatoes of the present. The knowledge folks actually wish to know is what are the 5 most essential steps for constructing any passive system? The 5 steps we’ve 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 will be something truthfully, no matter you wish to get into so that you simply’d be capable of convert it into one thing else. So the enter might be any knowledge level that you will discover. For instance, within the instance that I confirmed, the enter goes to be the issue, the problem that the tenants are dealing with, proper? It’s simply the info level on the problem. It might be your P&L if you wish to have a system that checks your P&L and tells you in case you are doing okay or not. The enter must be actually aligned and I feel an important factor about enter is the enter is an important factor that must be aligned together with your core enterprise problem. You don’t wish to have further info coming in, you need it to be proper, crisp, addressing the precise drawback that you simply’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 mainly the engine of the system. That’s what it’s. It might be the step-by-step procedures in order that it follows a sure move chart to get to a sure output. And this instance, for instance, it’s going to be the treatment part, which is if you stroll your tenant by way of the problems that they’ve and now you wish to mainly get it mounted. So that you stroll them by way of how one can get the enter info and mainly add to it or have a look at it from a special angle or mainly change that knowledge enter. So, for instance, on this case, let’s say, if rubbish disposal is clogged and I feel, “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 mainly the principle half that’s going to switch you if you wish to construct a system to switch you. Does that make sense? That is the place you’ll wish to have your data extracted from the person who is an skilled, often 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 move by way of that to the subsequent step.

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

Pasha:
It may be.

Henry:
Okay, now discuss to us about output.

Pasha:
All methods must have a degree which mainly needs to offer you what you want. Now typically the output of a system will be enter for the subsequent system and this occurs on a regular basis, particularly if you wish to have a series of system and you probably have a posh enterprise mannequin that you simply wish to put every little thing collectively. On this instance, the output goes to be a walkthrough that’s already supplied 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 mainly the place you set all your info which might be actually tangible and beneficial to you.
Within the instance of lead era, it’s going to be the checklist of those who… So, let’s say, you begin with 1000 folks, you’ve gotten a course of that breaks it right down to, let’s say, an inventory of 20. And now that 20 goes to be the output of your first system. That’s going to be folks which might be extra more likely to be prepared to promote their residence. Now you’ve gotten one other system that use that after which course of it after which sends a mailer to them, for instance. However that output is mainly 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 appears like your outputs can probably be in several codecs even inside the identical system as a result of with the instance we went by way of, one output is likely to be that the outcomes guidelines resulted in the issue being mounted and one output is likely to be that you simply 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’ve gotten a brand new subcategory so as to add to the spreadsheet so that you simply 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 special 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 who 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’ve, which mainly is the subsequent system which is the suggestions.

Henry:
Yeah, let’s discuss that.

Pasha:
So suggestions… Okay, so the enter course of output is kind of frequent. I’d say that even in huge corporates when it’s constructed, when the enter is given and when the output is taken, all people’s like, “Hallelujah, we bought there. That’s the system we would like.” And, man, I see this time 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 subsequent one. The issue is you construct a system however it’s not a sustainable system as a result of because the context modifications, because the enter modifications, because the enterprise world modifications, your system must be alert, it wants to grasp what’s occurring so it could actually regulate itself.
So a very good instance of it’s going to be figuring out KPIs for a way your system is working in order that you already know in case your system is definitely in good 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 comfortable about addressing their points or not? So we ship out two surveys each six months, mainly, 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 finally 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 12 months it would work completely, however the second 12 months it would truly not work very well and it’s going to boost a pink flag that enables us to return in there, dig into our system and see what was the problem, what brought on that individual to not be comfortable about it. After which we stroll it again after which we regulate our processes, we regulate our enter to make it possible for subsequent time we are able to deal with this. So the suggestions is mainly a loop that goes out of your output to the method and to the enter to make it possible for 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 modifications to a dynamic system that’s altering or evolving as what you are promoting evolves. So with the instance you gave, you measure your tenants, mainly you measure in the event that they’re happy with the work that’s being performed. In case you are nice, you state the system retains doing what it’s doing. In the event you’re getting numerous suggestions that tenants aren’t comfortable, then you’ll be able to dig deeper into that suggestions after which regulate your system to handle these suggestions points after which proceed to judge and make modifications 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 make it possible for, 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’ll be able to simply go right 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 closing vacation spot. Simply put some KPI, be certain this KPI is nice. If you need, you’ll be able to all the time, as Henry talked about, construct one other system in your KPI. However on the finish of the day you wish to make it possible for this isn’t a one linear line. It truly goes again and it feeds itself so it stays related. As a result of should you try 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 bought the 5 major parts of a system is the enter. That’s the drawback that you simply feed into the system. You’ve bought the method, that’s basically the way you’re fixing the issue or the way you’re addressing that problem. You’ve bought your output, which will be the outcomes of that course of and that may be a constructive or a detrimental end result. After which you can also make changes to your course of by way of suggestions and measuring the outcomes. After which setting, we didn’t contact on setting, did we?

Pasha:
The setting is mainly the context that your system is working in and that’s just like the final part that you really want to concentrate on. 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 special context, you might be in a special context for enter, you’re in a special context for processes, some litigations apply to it, some litigations to the output and that’s the place you need to concentrate on that, return in there and regulate your methods to the context that they’re working in to make it possible for your system stays related.

Henry:
Thanks for breaking down that 5 step course of, Pasha, that’s nice info and I feel it actually helps not solely to demystify methods however make it look like one thing all people ought to be implementing inside their enterprise at some degree. 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 what you are promoting that possibly you didn’t anticipate.

Pasha:
I feel considered one of them is we had been truly in Hawaii and my condo bought flooded, one of many ones that really we had a tenant in. I’m not speaking a few leak or one thing. It was about to get flooded actually dangerous. I didn’t even discover. It was simply on my weekly report that I get from the digital assistant of what’s happening as a result of I all the time wish to know what’s happening. And it was simply addressed mechanically. The issue raised, they referred to as, there’s an emergency degree on that system, it was a excessive emergency. They dispatched someone 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 feel, 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. Nevertheless it was addressed within the first couple of hours and it was utterly working superb, which, to me, it was an awesome win as a result of it confirmed me that it could actually work particularly after I wanted it to.

Henry:
Yeah, man, that’s an awesome instance since you’re proper, nobody needs the decision once they’re on trip that considered one of their models flooded. And it all the time looks like that’s if you get these calls is if 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 purported to do. That’s wonderful. Thanks for sharing that.
All proper, thanks, Pasha, for giving us this breakdown of methods. There are some nice info that you simply gave us as a result of, once more, methods, I like to think about 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’ve gotten in what you are promoting and numerous the occasions 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 numerous effort and time to resolve big-level issues? It’s only a matter of systematizing the issues which might be essential to you or the issues which might be taking probably the most of your time that you simply 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 may not be the person who is the skilled in that space and that’s nonetheless superb. An excellent instance is like, you and I’ve been mates for years and I personally realized loads from you, particularly in the case of 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 desirous about 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 era 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 truly, 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 little thing 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 info. A good 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 in order for you to try that spreadsheet template, you’ll be able to go to biggerpockets.com/sources the place Pasha has been gracious sufficient to share that with us. And so let the folks know the place they’ll discover you, Mr. Pasha.

Pasha:
You could find 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 will discover me.

Henry:
Nice. And you will discover me on Instagram as nicely. I’m @thehenrywashington on Instagram. Thanks a lot for becoming a member of us. A lot of nice info there, Pasha. It’s been a pleasure speaking to you and we want you nothing however the perfect.

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