Scaling a company is a lot harder than just getting new business. Tony Cook knows. He was instrumental in Bay Management Group’s rise to over 6,000 doors.
Cook joins Andrew Smallwood to talk about his story, his time at Bay, how they won new business, how they developed standing in new markets, and how they managed their rapid growth.
Ready to talk to an RBP expert in your area? Fill out the form on our website https://www.secondnature.com/request-demo
Questions or thoughts on the topics we covered? Email us at triplewin@secondnature.com
Join our private Facebook group - only for professional property managers at https://facebook.com/groups/triplewinpropertymanagers
Stay up to date on events and resources on our website https://www.secondnature.com/events
Follow the Triple Win Property Management podcast by Second Nature and never miss an episode!
Season 4 Episode 17 features Tony Cook
The Triple Win Property Management podcast is produced and distributed by Second Nature
Transcript
Tony Cook
I would say the easiest way to say this is it's a bit more exciting when you're smaller because you're doing a lot of different things. As you get bigger, each person is doing maybe a third of the amount of different things they were doing, and just more of those particular tasks. So that changes pretty, pretty heavily.
Andrew Smallwood
Hello professional property managers, Andrew Smallwood here with the Triple-Win podcast. I'm joined by my new friend Tony Cook from from Bay Management Group. And, Tony, for people who are meeting you for the first time. Can you give us a little backdrop of how you got into property management? Tell us a little bit about your role there. How it's evolved over time. Just a little of your story.
Tony Cook
Yeah. So it's, I actually fell in the property manager and I'll start there and then kind of work my way back and then bring it full circle. So, out of college, I was looking for a job. I went to school for accounting, and I grew up in Rochester, New York, where there's, I don't know, less than 200,000 people, not a lot of jobs back in 2010. And I just took the first job that came my way. And it was an accounting job. It was an accounts receivable, for Morgan Management. They owned, like 50,000 units, self-managed. And I didn't plan on staying there for very long. And, ultimately, I was like, you know, there's something about this property management thing. So that's kind of what inspired me just falling into an accounting role and just seeing how it ran from the accounting side of things, is really how I got into property management. But to back up a little bit, I grew up in a pretty, pretty, you know, my parents were 15 and 16 when they had me, so we didn't have much, man. And I'm the oldest of three. So you imagine a household. And back in 1989, you've got three little kids running around, and their diapers and two teenage adult, two teenage parents trying to manage that situation was chaos. It was absolute chaos. And so, you know, you kind of imagine how how that all unfolded. Nobody on either side of my family ever went to college. So that was never even on my mind. But I had a knack for school. I like school, I like learning, I like improving myself. And, it's kind of been that way my whole life and out of high school. You know, I, I didn't know what I wanted to do. I had absolutely no idea. I thought I'd, like, manage a restaurant or something. And that's just the mindset I grew up around of, hey, you know, work in a restaurant. Maybe you'll be a supervisor one day. Maybe you'll be a manager. And, you know, 20 bucks an hour sounded like the dream to me. That's just kind of how I grew up. But ultimately, you know, I, I went to school, I went to, RIT, for accounting. And I picked business school because nobody around me new business. And I'm like, I gotta land a good job with business, with a business degree. And so I did that. Little did I know at the time, back in 2006 that, you know, you’re going to owe all this money afterwards. And I didn't have a mentor. I had nobody explaining this stuff. I didn't know the right questions to ask. And so I went through that whole, four years of college deal, got done, had no job, wasn't, wasn't thinking like, go through the career center, have them help you, etc. it works 40 to 50 hours a week throughout the whole four years. Man, it was crazy. It was the hardest four years of my life. Got out and then, you know, two months later I get a bill for 600 bucks and they're like, you owe this for the next ten years. And I'm like, that's like my rent at the time. I'm like, how am I going to do this? And so I just got really desperate, started looking for, any job I could get that would be more than, you know, what I was making at the time and landed with Morgan, worked there for a couple of years, and then, I actually started dating my wife, my current wife, when we were 18. So we were we dated through, through all of that. And, she wanted to move to Maryland to get her masters. And so we moved down here, and I got a recruiter and he said, hey, there's this small mom and pop, shop. It's 12 people or it's 11 people. You'd be number 12. They need a staff account. And and I was like, staff accountant. That sounds like. Oh, my God, I've only done a course receivable. It sounded like a lot to me, but I took it. And I come in, there's zero benefits whatsoever. There's no parking. It's a we're working out of a row home in Baltimore City. The the owner is just absolutely hysterical. There's there's no obviously no HR. It's it's it's basically like, it was like an episode of friends I felt like, and we worked in that every single day. We had no idea what we were doing, man. It was it was pretty clear, like, at the time, we had an idea of, like, how to grow and everything, but no one understood technology, like how to manage people. We very much learned as we went. And so, you know, I did that for a couple of years. And then back in 2016, Patrick approached me about, running the company. At that point, I think we had like 2500 doors or something like that. And he's like, he's like, you can see I'm not I'm not managing anybody. He's like, I'm just out here getting, he was still our director of business development. Yeah. He's like, they're getting new business. And he approached me about running it. I was like, Pat, I've never run a company. He's like, you can you can do it. I see how hard you work. So alright, here we go. Like, mountains of books and YouTube and just everything. I just chewed up everything you can imagine. And, I figured out how to run a company, I guess. And, here we are eight years later. And, I mean, there's a lot that has happened in eight years. I'll kind of have you ask me questions about that, but it's been a grind, man. I've done it the hard way. Let's say that.
Andrew Smallwood
Wow. And so when you join, you mentioned like, there was 11, you know, people there. How many, units was the company managing when you start it?
Tony Cook
900
Andrew Smallwood
900. Okay. And then I heard you say 2500.
Tony Cook
In 2016.
Andrew Smallwood
And fast forward to today, how many clients or units can you give us a kind of a picture of what it looks like today?
Tony Cook
Yeah, it's 6000 to about 6500 doors. I was actually just looking at this recently. It's a little over 5000 owners, 6500 doors and we have four offices. We have one in Baltimore, Philly, Northern Virginia and DC. And they're all, you know, individually owned, individually run. But then we have a corporate office that kind of oversees, we have all of our different departments that oversee the four of them, and I'm obviously leading the charge with that. We've acquired one. So our Northern Virginia office was an acquisition back in 2021, and the other three were all Greenfield, and we just did it from the ground up. Patrick had the template for Baltimore, and we sent our director of business development to Laurel back in 2015 to start that office. And then his replacement, we were saying, you know, you're doing a good job, too. Let's go to Philly. And then he went there and built that from the ground up. And I've worked with those guys since day one. And here we are.
Andrew Smallwood
Yeah, yeah. Well, listen, Tony, that I really appreciate you sharing your story. And it's, it's apparent, you know, that you've put a lot of effort into to get where you are and, you know, getting it, getting yourself into situations where you had opportunity and then finding a way to, to advance from there. I'm sure a lot of people listening to this will take some inspiration from that and motivation from that. I'm curious to hit that before we get into, like, the tactical and practical, you know, what would you say like, motivates you most? And what, you know, a lot of, hey, books are available to a lot of people. YouTube's available to a lot of people. But what you said you enjoyed school, like, some of this feels like it was maybe intrinsic early on, but I'm just curious. Kind of like what really makes you tick and what's really kind of driven you to get where you are?
Tony Cook
Oh man, it's just an obsession to get better. And it's not a good thing. Trust me, I go to therapy for this. It's like, it's there's this, like, burning desire inside of me just to always be better. Part of that is from some childhood trauma. But then, part of it is just naturally, you know, following people like Gary Vee and whatnot. It's like, man, these guys just grind and grind. If they can do it, why can't I, so I really I came from a place of, you know, insecurity and now I, I'm trying to get to an a place, to a place of abundance. And I have, I've always had this, like, weight on my shoulders to help out my family and whatnot. Really? So, I want to inspire them. I want to get that move, and and it's it's it's interesting. It's painful to go through all the growth and everything, but it's to me, it's necessary. It's kind of hard to explain. I don't settle for things. I always want to improve and be better. And it's always been that way. I'm the oldest of three, so I kind of always had my brother, who's the youngest one to be, just like me. And so I had a model for him. You know, I wanted good things for him and whatnot, so that that's kind of where it comes from at the end of the day. And then once you. I started reading, personal development books, it started with the seven Habits of Highly Effective People. I read that in high school. I'm like, Holy crap, you know, you need better habits. You need to. You have this in your mind that you want to be better, but you're not actually doing the things to be better. And so, you know, I just went down the rabbit hole of all the self-help. I was literally just living in, in the library in that section for the longest time. But what I wasn't doing for the longest time was actually putting it into motion. And like, you're reading all this stuff, but what are you actually doing? And then I started the doing and then things really started to happen for me. So yeah, it's kind of like an innate desire, but also growing up poor, I don't ever want to get back to that place again. And so I'm trying to get as far away from that as possible is kind of what it is.
Andrew Smallwood
And maybe you can tell us like, I'm just imagining, okay, you're coming in as staff accountant, right? And like, employee number 12 and then, you know, fast forward a few years, you're in your role as, like, a COO and kind of like a quasi COO-CTO at the same time, you know, from what I understand. Can you talk a little bit about that? Like what? What was that journey, learning and career like, can you share some of the big lessons that were learned and some of the things that you, you know, did that had a big impact on the business as you were kind of increasing your level of responsibility?
Tony Cook
Yeah, I think the first thing. So when I came into the company, you know, from day one when I interviewed with Patrick, I said, this guy is an absolute workhorse, a very demanding, very demanding, he's lightened up over the years, but very demanding back then. And, I mean, it was his baby, and it still is his baby. And so for me, I kind of came in and I remember having a conversation, I think it was with my one of my buddies. He said, you need to be like best friends with that guy and just basically Velcro yourselves to him. And people would say, you're putting your nose up his rear or whatever, I don't care. Like I'm coming in here and I'm going to act like I'm the owner. It's kind of how I treat it, like I'm going to treat this business like it's my own. And I told him that and it's like, dude, I wish everyone thought that way, that you know how much easier you're making my life. And so I would work 10, 12, 14 hour days. It didn't matter to me. The hours didn't matter. I wanted to be the first one in the last one out. Even making, you know, whatever, 25 bucks an hour or something. At the time, it didn't matter to me. I outworked my boss. I outworked the one manager for less and doesn't matter. I'm just going to work. And, eventually I'll get noticed if I haven't been noticed yet. And, I knew it was only a matter of time before the, there was only four of us in accounting. I knew it was a matter of time before the manager in there was going to leave. She was getting older, tired, etc., and so I was just waiting for my opportunity. And then it came, and, he approached me. He said, all right, you know, you you want to run the accounting department now, and I said, I don't even know how to do half the stuff she's doing. She's not sharing it with anybody. She's kind of like job security type deal. But I said, I'll figure it out. You know, I have no problem. I'll figure it out. And so that's that's really when the 12 to 14 hour days started for several months there, if you want to grow, you gotta work. You know, it's, the four hour workweek. People read that book, and that's not where you start. That's where you end. Right? You know, so you put in those hours and good things will happen. And I think it's really important, especially for the people that aren't don't own their businesses, is a line yourself with the owner or if it's a smaller company or upper management, what have you, and make yourself valuable for them. Make yourself invaluable for them. And that's kind of what I did. And, I didn't expect to be in the role I'm in now. I expected to just keep growing in the accounting department, which right now is 25 people. But ultimately in 2016, he kind of hit a wall. I was like, I just can't do it no more. And I said, we don't have anyone here. I don't think I can run this company. He pointed to me, he's like, you can. I was like, I don't know anything about leasing or maintenance or rental licenses or like what I like, see the invoices. But I don't understand how to do all that stuff. And he's like, figure it out. Then I said, all right, I'm the guy that will figure it out. Even over this, the most trivial stuff like, my business development guy earlier was, how do I, how do I paste a document from word to PowerPoint or publisher without the bullet points dropping? And I was like, I don't know, but I'll figure it out for you just because I, I got to know now, so I’m very curious, in that regard. And so that that's kind of how that all shaped up, learning experiences as you're growing the foundation can break very, very easily when you're in rapid growth mode because we we just dumped money into marketing from 2020 when I got into the role it was already happening. But from 2016 to 2020 man. Oh we we we grew too fast and we all knew it. We're like, this is dizzying. Like we I can't even stay focused. We're growing so fast. But the cool thing is we weren't losing business like we were just growing, growing and growing. And, I'm the type that, you know, I need things done right. Like, I'm not okay with half assing stuff or things being sloppy. And so, you know, it's through that growth, that stuff's going to happen, and you have to be okay with that. And so for me, I learned that good is better than perfect. You know, I used to be a perfectionist. I'd say no good is better than perfect. Get it done. You know, and things tend to work themselves out. But when you're kind of growing a business, and we had no, like, in-house marketing department, we had no recruiting department, we had no compliance department or operations or we basically had property managers, maintenance techs, leasing agents and a few admin. That's it. But so I basically through all of that, I had to put departments in place, departments that I've never actually run. And so that those experiences, once I did it a few times at this point, I'm like, what do we gotta do, put a man on the moon? All right, I'm going to figure this thing out like I it's all about being resourceful at the end of the day to get to know the right people. And for the longest time, I was behind the scenes. You guys will see. I've only been on maybe six or 7 or 8 podcasts. There was part of it was fear, but the other part was, I just need to focus on BMG. I've learned to use your resources. Not everything's in a book or a YouTube. Talk to people like Andrew. I could probably call you and ask you questions. You know, give me answers like feed off your network. It's really important, and you'll save yourself a lot of time.
Andrew Smallwood
So, Tony, you know, a direction. I kind of want to take this because I'm sure there's going to be some people listening to this and thinking, okay, wow. I just heard, like, 25 person accounting department, I heard compliance, I heard market. It's a and, you know, many people might be in this scenario, their company looks more like, the company that you joined, right. Like 40 or a half dozen employees or maybe even people who are the first hires. I say this, but I think it'd be, like, interesting to hear from your perspective. Hey, going from a a few hundred units to a few thousand units, what is like the evolution of the team looked like over time. And as you thought about kind of, you know, building and expanding and supporting, the growth and healing, the growth, you know, what are what are some of the just observed actions that you have and the kind of lessons learned, over that multi-year period that that you'd share with others who are interested in walking down that path?
Tony Cook
Yeah. I think, you know, back then, when you're small, you have a you're wearing a lot of hats. You're a jack of all trades. Even though I was in accounting, I was answering the door. I was answering the phone when the receptionist was at lunch sometimes. I was scanning things for other departments that needed help. You have to be the ultimate team player when your company is small. If you're stuck in an in a lane of. Oh, I only do maintenance. Well, you're probably not going to work out very well in a small company. You need to help other departments. And so for the longest time, you know, there's structure. But at the same time you need to cross-train, you know, if you lose one person when there's only 12 of you, you're in deep shit. Sorry. I don't know if I can swear or not. But you're in deep poo if you lose one person, you only have 12. And so cross-training people is extremely important. And then getting people to be team players doing the company events, it's easier. We would go to the bowling alley, we'd go to the movies, we go to Orioles games like that stuff is extremely important, I would say always, but particularly when you're too small, like people really need that stuff. And it's hard for people to see something as a career when it's such a small company. Right. They're not sure if the company is going to end up staying afloat. Right. And so there was a lot of fear with job security back then. Like, is is he going to sell? Are we actually going to grow? How is he going to get tired of working 12, 14, 16 hour days? Because the profit margin wasn't there. When you're that small now, over time, as you get bigger and bigger and bigger, you get economies of scale, and that comes through vendors. You can can negotiate more. It's easier to recruit. We have no problem recruiting people these days. Just due to the size, size of our company, obviously go to, like, somewhere like Microsoft. Like you just say the name, like, yeah, I want to work there. You know? We're not there. Of course, that would be like many phases down the road, but but the things change in that regard. As you get bigger, you wear less hats and you kind of do more. I would say the easiest way to say this is it's a bit more exciting when you're smaller because you're doing a lot of different things. As you get bigger, each person is doing maybe a third of the amount of different things they were doing and just more of those not particular tasks. So that change is pretty, pretty heavily now COVID made a major impact, in half of our companies overseas. Now, you know, before that was not a thought. We shot that down many times. We knew of the antiquarians and the companies doing this and we're like, no chance. Too risky not doing it, man. I wish we did it earlier. But but at the same time, for us, how do you maintain that close bond with your staff when they're all overseas and, and whatnot? And it took us a few months to figure that out. But we did figure it out. And we have good morale at our company. So that's a whole topic, we can jump into. But, getting people in the right positions was another thing. You know, if someone's doing maintenance and they're good, but they don't like it, see if they want to transfer or do something else. Our our accounting team has become the, I would say the I don't want to say dumping grounds, but it's become the transitional department for for property burnt out property managers. I want to go work in accounting. I already know accounting. So I'm just gonna go do the books now. And so, giving them the ability to do that has been pretty huge. We prefer not to have somebody leave the company. You know, if you're doing a good job, we'll find somewhere to put you in the company. Whereas back in the day, it's like, sorry. I mean, we need a maintenance coordinator, like, there's no one else to do it. So that's that's been a pretty big change.
Andrew Smallwood
Yeah. You know, just reflecting back a few of the interesting things that I heard. So one is like the importance of culture early on and getting time outside of the office in that trust building as a team, when so many people are doing so many different things at that, that glue being there, you know, really helps kind of keep the team together and performing. Not that it isn’t important later. You know, I think you clarified that, but just the importance of that early on. And then I'm kind of imagining this like athletes and people who can play kind of all over the field to specialists and people who are like really good in their role and more more focused in their activities or the set of activities that they're working on. And you mentioned like this shift to overseas. Yeah. I'm curious. You said it, I think about half of your team. Can you talk a bit about, you know, what's the size of the team today in total? And then, like, what are their roles and functions that you guys have found a lot of success with? Hey, that being done by global talent versus what's still local in Maryland or, you know, local in your markets.
Tony Cook
Yeah. So we're about 225 people right now. And last time I checked, which was like two months ago, there was 115, 117, overseas. Initially, we started in accounting. We figured, you know, administrative type work. They're just going to enter invoices, you know, so when Covid hits rent, the courts shut down. Basically, you can't you can't charge late fees, you can't file. We're just watching our delinquency climb. It's like, oh, my God, we can't even do anything about this. So we were super worried about, like, are we going to make this? Like, is this how bad is this going to get? And so what we did is it was a great resignation. It kind of helped. We never, not one time fired somebody to replace some of the overseas talent. I want to make that clear. I would never do that. People were leaving like crazy. It's like some of our best people are leaving, and it's like nobody, nobody's got loyalty anymore. What happened? And so as they were leaving, it's okay. Now we're going to go overseas because two of our really good people left. We have to. We can basically hire ten of them for the salary those two are getting. Let's do it. What's the worst that could happen? Five people are doing that job and five are doing that job. And so that's what kind of prompted it. And so we started with accounting, just entering invoices and all that, and then we quickly realized, hang on a minute. If they can do that, they can do anything that can be done remotely. Like I'm sitting at a desk right now. Realistically, half of the things I'm doing can be done overseas, right? If you're at a computer, you have a phone. Why can't you do it? Owners stopped coming into our office. Basically, our conference room is probably had ten people in it since 2020. It's just it's like a ghost town in here now. Half our team that's local works from home still. And then our conference room is just, there's just. It's like a deserted island in there. It's quite depressing when you walk in. And now it used to be lively, and there was water in there. It's like. Nah, it's just an extra room now. And so with people, you know, just staying home with people not going out as much with people wanting more. One of the things quicker, easier text, email, etc. is easy for us to do that. And so we started out with, with agencies, you know, the antiquities of the world and a few other ones. And what we discovered pretty quickly was we could just do this ourselves. You know, we've recruited before we can do this. And so that's kind of what we did. And then the big. So any administrative work, maintenance coordination or. I'm sorry. Accounting compliance, recruiting administration, any of those types of roles, marketing admins, those all started getting push. And then after about a year, we said, wait a minute, our operating managers, said, normally they have to be local because they have to go to court. They have to meet owners at properties, things like that. Owners aren't demanding that anymore. Court, we just hired one person per office to go to court, so we don't need all the PMs to go to court. You have one person doing it. And so, it's kind of it's not something we force. It's something that kind of just fell in our laps, really, at the end of the day, it's like, what do we need people locally for? Okay, every office has 2 or 3 people that can do all those tasks. Anything that can be done remote, is going to be done remote. And so all of our departments have, remote people in the Philippines, Mexico, Kenya, Jamaica, we're pretty much all over the place. And you had a second question that I, I need to address.
Andrew Smallwood
You know, I, I'm already thinking of a different question.
Tony Cook
Go for it.
Andrew Smallwood
So something you said that was interesting, Tony, that I wanted to, like, double click on was you were talking about this decision, you know, like, again, global talent. And you know, scaling. There it was. Hey, we didn't lay off 30 people. It was kind of like organic the way that it happened as people were actually there also. You did that, but you made this comment about, hey, like in these two people salary, we had ten. Like we could have ten, right? To replace. And I'm just curious, you know, as you guys were working through this, how much of this was like, okay, we can get the people doing, you know, same people, same same role, like, you know, same number of people, same roles and wow, it's like a much lower expense. So that allows us to reinvest into the business or growth or other places or, or keep that or distribute that. And that was like, you know, part of the thinking in the justification, how much of it was like, okay, actually, we could hire two people for that role and give it, you know, more attention than it was getting before, like a faster responsiveness that we're looking for in the business. These different hiring decisions, like people come about them different ways. And I'm just. And was that role dependent or department dependent? I'm just you don't have to go through everything exhaustively. But just curious kind of your guys thought process as you work your way to a 220 person team.
Tony Cook
There is no doubt in my mind, pre-COVID our staff was overworked and we all knew it. I knew it, they knew it. But the margins just didn't make sense. Two of the four markets at the time, there was only three markets. Nova came after, northern Virginia. It's lower income markets. So your average rents are only, you know, 15, 16, 1700 bucks. You know, Virginia it's like 3000. Our team was overworked. We knew it. And so, for example, our property managers managed 225 doors pre-COVID. 225 is a lot of doors, single family homes to manage. At the time, we thought it was okay. Their bonus, they were doing it. They were getting it done, but they were exhausted. And it's like, how long is this going to go on for? So when COVID hit, it's like, wait a minute, you're getting 75, 80, 90 grand a year, depending on the, the property manager, your experience, etc., you can hire for eight, ten bucks an hour or something. So not only can you cut that work in half. So now they manage like 120 doors, but you can basically quadruple your, customer service. So now the owner, if you email or call as you're getting in, you're getting some money back instantly. Whereas before it's like, oh, sorry, I've gotta be able to like three different properties, you know, can I get back to you by tomorrow morning? Like, and owners were with that. They weren't, you know, pumped up about that. They were okay with that. Now it's much different. We're going to get right back to you. So it was it was twofold. Our customer service needed some improvement. And our team needed some relief.
Andrew Smallwood
Yeah. Yeah. Thanks for walking through that. Yeah. Tony, I think something that would surprise folks, like most people think again, COO, 200 plus person team, you know, and I, I just imagine, like you, even my first instinct would be like, wow, I bet that person's in a lot of just meetings internally talking to their team and like, no, but you're like, actually very engaged with, like, vendors. You get like, you're, like, we've noticed this about you, like, you're very engaged yourself, and you're willing to kind of like, go right to here's the issue, the problem. And it seems like you've got a passion for, like, problem solving, and optimizing processes. And I'm just wondering if we could get into that a little bit more. You know, if you could, you could shed some light there and maybe even share, like, here's a couple things that you'd like personally worked on and work through. Like, this is a great process. This is something that you know is working and supporting, scale that you guys have worked on and changing the business.
Tony Cook
Yeah, I think for me, one of your previous guests just said I was I was telling you before this, I was listening to it this morning. I'm hands on. I would not ask my team, anybody in this company to do something I wouldn't personally do. Aside from getting on a roof. I'm sorry. Maintenance techs. I'm just not getting on a freaking roof. But in terms of, like, you know, any of, like, the, the office work, you know what? You know anything. Go into a property, whatever. I'll do it. I've shadowed our maintenance techs, you know, way past where I should even be doing those types of things. I'm like, something is off about our inspections. Like something just, I need to see it from. I hear what you're saying, like. And I'm a very visual person. I hear what my office head to say. I hear what the, may say, but something's just not clicking for me, so I need to go out there and see it for myself. So that's part of it. But the other part is I want to, I guess, mentor people. I want people to, to get that additional, feedback. People value my opinion at the company, which I am very grateful for. I don't have all the answers. I tell people that all the time, but what I'm decent at doing is getting people to kind of get the answer for themselves by talking to them. You can just probing them and asking questions. That's part of it. The other part is I, I think at my level, it's really important to have those relationships with vendors. You know, your company is one of them. I want to know who you guys are. You know, my team, they love you guys. They love you. All the other vendors we work with, but a lot of it, I feel strongly if I wasn't involved, the relationships wouldn't be as good. You know, these vendors were the company that structured like ours. You'd be going, like, four, six, eight, ten different people. And it's like, I kind of want the perception for a vendor with the management group to be like, hey, there's there's like, not the owner, but there's that guy at that company. That's our guy. That's who we want to work with. That's who we can work with. And then I can work internally to kind of get things done. I'll give you an example. The second nature, I love your guys's implementation, your onboarding. It was probably the best I've ever seen with any company. I'm super hands on. The training was immaculate. It was great. The problem though, and this is with any organization and any one of them, when you're training, like another company on your product or what have you, you don't know that other companies internal processes and procedures, you have a template and you're like, okay, we kind of know like property managers, this is generally what they're doing. You know, how they're operating, but you don't necessarily know, are we using a sauna slack. Like how how are we communicating with each other? How is that working? And so even with that, there's something missing there. And then what you end up having to do is retraining your staff because a vendor like trained them and it's correct, but it's not how BMG does things. So it's like, we kind of have to go through that again. And so now any time of vendors like, hey, we'll train you guys, I'm like, train me or train like my assistant, and then we'll train our team and vendors love that. That's great. You know how much work you just took off of us? That you're, like, the easiest client ever, which we're not always to. So that's part of it is we we do things a little bit uniquely in some regards, and I'm sure every company has their own thing. And so I just like to be super hands on to make sure that that partnership is really working the way it should be working. You know, that's a big reason why I do what I do. And I have no problem being that sounding board for vendors. And what's up? Remarkable. And this includes AppFolio, who we've been with since 2012. Their senior leadership still reaches out to me on a monthly, quarterly basis to, like, pick my brain and, I'm happy to say like a decent amount of their changes is they've talked to me and a few other people here and it's like, please do that. And, and same thing with your company, man. Like just giving that feedback to help you guys make us better, to make you better. That's really important. I see our vendors as an extension, as an extension of us. I, I don't even think, like, employee, contractor, vendor. I think we're all, like, together in this in this whole thing that's happening right here.
Andrew Smallwood
Yeah. Like, it's often trite, you know, it feels trite, maybe to say or hear like, oh, it's not a vendor, it's a partner. Or like, hey, we're in true partnership. But, you know, the comments I hear from our team and our observations, you know, working with you guys so that that really feels true. There's a lot of engagement. There's investment. There's hey, here's a problem we're working on together and staying on it together to get to get it to where where, you know, where one to and continuing to improve and make make progress. Yeah. Yeah. You guys have been great with that, Tony. I'm curious. Like, I think there's going to be a couple people here looking for a couple of tactical, practical things. Are there. You know, if you could rewind and go back, you know, whether it's 2016 or earlier on and think about man, a couple of the policy decisions that we changed. Right, or some of the processes that we put in place, or a couple the key company decisions that we made. You know, what comes to mind, like me. And if I'd known that earlier or done that or you mentioned hiring overseas towns, I think I think we've touched that one. But are there 1 or 2 others that you think are really just man, somebody building a property management business, this is something they're going to want to think about. And here's how we made our decision on that, how it's worked out for us.
Tony Cook
At the end of the day, we're in customer service. You know what I mean? And I actually put a Facebook post up recently about how horrible customer service has gotten in the world, really since, especially since COVID. And a lot of people will say, well, you're using overseas. Isn't that like bad customer service? Not necessarily. No. One of the key policies we have that people come here and they're actually surprised, like that's that seems tough. 24 hour response time. It's literally in our handbooks. It's everywhere. If anybody reaches out to you, whether it's an employee within our company, a tenant, an owner, a vendor, you have no more than 24 business hours to get back to them. And that's actually being lenient in my opinion. If you email me or text me or call me, I'm getting back to you within the day and you best believe I'm busy as hell. So if I can do it, I know you can do it. That policy, when we put that in the place, and this is definitely going back to like 2016 or so, that was a game changer because what was happening before that was people just weren't seeing the sense of urgency with getting back to people. It's like, well, you know, the tenant put in the ticket for like a leaking, trap in there. And they're saying, like, they should know to put a bucket in there and we'll get back to them in a couple of days. Like, what are you talking about? Like when I got in there, I was like, no, no, no, no, no. People want to be seen. They want to be heard. They want they want that confirmation that, hey, you're looking at this, you're doing something about this. And so I was really critical about getting back to people and how you get back to them. People get frustrated over, over a lot of different things. Right? If you if you get a call, call the person back, you know, people would and our company would get a call like, I'll just text, or email. Now, if they call you, there's a reason, call them back and say text. You text them. If they email you, email you that. It seems weird. And I'm sure some people are like, why does it matter? I'm like communicating with them. It matters. There's a reason they use that method. They want that method back. So that was a pretty big one for us. Everything has really surrounded, customer service surveys. We were never surveying our tenants or owners at all until 2018. Probably. It took me two years to figure that out like we were. We're over here like spinning our wheels, trying to, like, figure, like, why did that owner terminate? Okay, we talked to them, but how many owners feel this way? We were just making a lot of assumptions and we weren't using data. And then. And then I think it was at folios started to put in those surveys for maintenance, move ins, move out. So tenant anytime there's a showing tenants were getting surveys and we started to look at that's like whoa, we have a problem that we did not even knew because I I've heard it, I didn't see the data for it. And so that prompted me to say, wait a minute, why is no and why are we not serving our owner client like we have no idea how they feel as a whole? Right now? We're guessing, we know our churn rate, so that gives you a good idea. But what do we need to get better at? Let's stop trying to figure it out ourselves. Let's ask them.
Andrew Smallwood
Tony, what's like what's 1 or 2 like insights that you guys have gotten out of surveys over the year that kind of, like, surprised you? Like, hey, this is something where we were expecting something different. And then when we surveyed, actually, we uncovered ex, you know, as an inside owner distributions.
Tony Cook
So owner like when they get paid matters big time. And we knew that. But owners really want to be paid ASAP. They almost want to. And again at least in our market. So this could be different across the country. But in our in our four markets, if the tenant pays today, which a lot of payments are coming in right now, owners want to be paid like tomorrow. Which we didn't know that we've always paid. You know, one time a month up until several years ago. And it's like, we're assuming this is cool, like it's you're getting paid. The problem is, we weren't thinking these people have a mortgage a lot of the time. A lot of our owners are accidental landlords. And so there's a death, a divorce, a job transfer. They're in the military like they didn't want to be a landlord to begin with. They ended up landing this thing. And but now they're like, oh, cool. I'm like getting monthly payments, but they still have a mortgage, taxes and insurance, etc. to pay for. And so if we're getting paid today, their mortgage is due tomorrow, they're having to float that mortgage and then wait until the 6th, 10th, 15th, whatever. A lot of people can't do that. And there's this misconception that landlords are all rich. That is beyond the truth. That's not even close to true. I would say most landlords are not rich. Most are definitely not rich. And so they really need to get paid, pretty quickly. And so we shifted our owner payouts once we started to see that feedback, it's like, oh crap, you can't wait until later in the month. You can't pay a month in arrears. Definitely not for single family owners. Multifamily? Sure. Single family. You need to pay them ASAP. The problem is, is if a tenant makes an ACH today, it could just bounce tomorrow. And then if we floated that to the owner, now we're in the hole and we have to fund the trust account so that becomes, an issue. And so we've got internal systems for that. That, that ended up helping us a lot. But at the end of the day, owners want to plug their property with you and they want to just see that money coming in every month, and they want it as soon as possible without, disruption. And so we really started to hone in on that and make sure we give them the right reports. So there's limited questions. They have confusing owner statements. They're like, what does this even mean? I'm looking at this app for the owner, a statement, the security deposit here, the water bill. What does this all mean? We didn't know they were having problems reading these statements until we started to survey them. It's like, oh, crap, this should be a piece of cake. And so then we just changed out the statements in the system. Questions largely went away.
Andrew Smallwood
That's great Tony, I'd love to hear. Like, what's something you guys are working on right now? Either a challenge that you guys are really engaged with, or a goal that you guys are really focused on, and kind of like how you're starting to approach it and work through it.
Tony Cook
Man, if I opened up my Asana, it's like my project list is a mile long and I.
Andrew Smallwood
Just one thing, right? There's just one thing you guys are working on?
Tony Cook
This is one of my problems, that I always have at least 15 to 20 things going on at once. And I used to just do this stuff myself or try to, like, not delegate learning to get delegate at this level, you have to. You can't possibly do all this stuff yourself. You have to lean into your team. Lean on your team. A couple big things right now, is we're open it. We plan on opening up two new offices. So we're marketing right now in Boston and Atlanta. And so that's going to be, a pretty big thing coming up here. And so we're kind of shifting some things around at the corporate level, to make sure we have the right, tools in place for that. We're ramping up our procedure guides. We're hiring more staff just to deal with that. We just hired, like three more people and marketing. So that's a pretty big one. We have this hub right now in the Mid-Atlantic, but we want to kind of move that into like New England and down south and then eventually in Vegas, probably Phoenix. So that's a pretty big thing we're doing right now. And then there's always, you know, the RBP, that's where we're only a year into this. So we're still trying to figure that thing out completely. How do we nail this thing down? Yeah. I mean, there's all kinds of all kinds of things, maintenance tax, like, we're really, we're really looking to bring more in-house, workers versus, subbing out, you know, plumbers, landscapers, etc.. And the problem is you end up becoming a construction company, and we've taken stabs at that. It's hard, man. We're, it's so much easier to just send, you know, ABC, mechanical out to, to deal with the issue. And we need very limited expertise in-house. And you kind of lean on them for that. Bringing that stuff in-house. You need to now have the expertise here. You need to have the equipment. You need to have a lot the insurance. There's a lot that goes into that. But ultimately, at our size, like you have to do it, you get things done much faster. You're dealing with our schedule. I can my, my manager can pull a guy and send him to another property just like that. Whereas if I call ABC mechanical. Oh, sorry. Like, you know, it's harder to deal with that. And then you got to go back to the tenant and say, sorry, it's gonna be two more days. Well, guess who they're mad at. Not dumb. They're mad at us. And so that's that's been a pretty big thing. That's like the two of the bigger things I can think of right now. There's a ton of smaller stuff, too.
Andrew Smallwood
And I know I'm gonna come up on my time in a few minutes here, but I want to try to squeeze in a couple more. But,
Tony Cook
Yeah, go for it.
Andrew Smallwood
You know, talking about, like, opening a market and you mentioned, like, you guys have done this from scratch multiple times, that. Hey, there was an acquisition or two I think you referenced earlier, Virginia, but in many cases it's like, no, just like zero first person first unit first client, can you talk a little bit about that process and what that what that looks like of how, you know, how you guys get a market from 0 to 60?
Tony Cook
Yeah. So I think the first thing is marketing. So you have to go find your your location like, you know, do your homework and things to look for there. You know, what's the average rent. You know we we charge a percentage of management, percentage of monthly collected rent, which is pretty common. And so the higher the rent, the more profitable you're generally going to be. And so the population, you know, for us, 1.5 million people, anything less than that, we're not going to touch it right now. And so looking at things, looking at the legislation, is this a landlord friendly or a tenant friendly area? We tend to be in three tenant friendly and one landlord friendly. The one landlord friendly market is by far the most profitable and the easiest to run with the least amount of staff. And it's it's take work to the other three offices. Virginia. One won't think that or see that because that's what they know. But I'm telling you right now, try to do Baltimore. You're going to be like, nope, send me back. And so and so, you know, finding your target market setting, getting an office, setting up the Google page and all that stuff, and then just, you know, kind of banging out your SEO. That's all we do. 99.9% of our our leads are SEO. And the other point 1% is referrals. And so, you know, getting that up and running, which for us will be in the next couple of months here. And then once the leads start coming in, you got to wait until you get enough, like you get one lead. I'm not going to send a guy to live in Boston, right. And so once you get a handful of leads a week and say, okay, this is starting to happen now, it's starting to to wrap up, then you take someone within our company and you've already had this agreement with them, and you ship them up there, you know, give them a place to live. And they've already been training to have have that, that, that new business development, that leasing and some property management, not not all of it, but some of it. And then they're kind of going up there on their own, but they have all the support from corporate. And then I'll be going up there, Patrick, you know, we'll we'll be pretty hands on the star for the first few months there. And then and then. Yeah. And it's just off to the races from there. We have, we use so many different technology use that in today's day and age that it's not really we could we could manage in Portugal. It doesn't it doesn't matter. We just need someone to live there. If one person will go live there, we can do it. We can do it from here. Because a lot of what we're doing is remote. You you get leasing agent or I'm sorry, you get realtors up there, so you have them do all the leasing for you. You hire contractors, you don't need maintenance techs. You basically outsource as much as you can. And in the meantime, as people are calling. Hey, Tony, you know, I saw your, you know, I'm looking for property management. You just honest with them. Hey, look, right now we're marketing. We're not taking on new customers. Give me, like, a couple months. I'll call you back if you don't already have another company. And we'll. We'll get going on this thing. That's what we did for both Laurel and Philly. And it worked out. They won. They went up there and they already had properties that were, signing property management agreements from like three or 4 or 5, 6 months ago.
Andrew Smallwood
Yeah. No thanks for walking through that. That's great. I love that. Like, hey, marketing and like starting to see demand and there's a certain point of demand. It's like, okay, we're ready. And then the process you describe it reminds me of like retail stores or restaurants where they got like those core couple people. They're like, we can drop these people out of a helicopter, right? Yeah, yeah, they can. They can go get this thing from 0 to 1. You know, that that kind of process and how your talent development can kind of fuel that, expanding into to new markets that that's really great.
Tony Cook
And give them a know give them an ownership. Right. One of the things we're going to do with these two that we've, we've not done before is give them a percentage of ownership, let them invest in the company if they want to. Right. They're going to be more invested if they actually have skin in the game. And so, we've got a few guys, and a lady that would gladly do that. And so they've been around long enough. They're willing to throw their own money into it. They're willing to, you know, have an ownership stake in this thing. And for us, I can sleep at night knowing that they're part owner. Like, that's great. Like, I know you're going to work. I know this means a lot to you. And so, yeah, I'm going to totally drop one of them from a helicopter into Boston. That sounds awesome.
Andrew Smallwood
Awesome. Well, hey, Tony, a couple rapid fire ones here to to finish. So. So again, you're like a books guy. YouTube's got, like, if property managers could only read 2 or 3 books, like, where, where should they, where should they start or what? What books would you recommend to property management business owners.
Tony Cook
So this is probably not going to go where you think it's going to go. But nothing about property management, I'll tell you that you want to read something about the mind, like understand how the mind works. Property management is extremely stressful. I got to pull my company about this. Actually. But I know I talk to them daily. It's a stressful job. You know, every job has it’s stress. But in property management specifically, if you don't know how to manage your emotions, if you don't know how to de-escalate things, if you're not super organized and that a lot of it stems from the mind, right? You can really let yourself go pretty quickly when a tenant's screaming at you on the phone. Or an owner just happened to his yesterday, tenants going to move in with the, with the leasing agent and the owner's there and change the locks and want to let them move in. It's like, are you kidding me? Right now? The leasing agent lost, you know, a thousand bucks on the move. And, like, these things will really kick you down pretty quickly. So in property management, I would start with making sure you understand the psychology of the mind as much as you can to make sure that you're prepared to work in this field. It's not for everybody. I equate us to like, if you were to look at the trades like you've got your you've got your carpenter, you've got your painter, you've got your plumber, we're the plumbers. And I'm sorry for the plumbers that are listening. It's not an easy job. It's a it's a hard job. That's where I would start. I personally am a big fan of stoicism. Ryan Holiday's, like, my favorite author ever. I've read every book he has five times. Marcus Aurelius, you know, Roman Empire. That's where I personally would start with these types of things, because I, I started with understanding property manager jumped in and then kind of broke a little bit. I'm like, oh my God. Like, you got to understand yourself first so that personally you're running a businessman. Every business owner I know has a level of stress that is like, it's up here. And so start there first. You know, you can figure anything out as you go, but start with learning. Learning about the mind and your behaviors, your thought processes, etc.. But then you know, Rich Dad, Poor Dad. So you can't go wrong with that if you're going to run the company yourself. And then books like Compound Effect, Seven Habits was a good one. I can go on for days, but those those are kind of the ones that stand out.
Andrew Smallwood
All right, we got some Ryan Holiday, Obstacles Away. Daily Stoic. I know he's got a few books. Kind of.
Tony Cook
Courage is Calling. Oh, yeah.
Andrew Smallwood
Okay, great. And then Darren Hardy, compound effect, I think.
Tony Cook
Yeah, yeah yeah, yeah, yeah, that's a good one. Yep.
Andrew Smallwood
Okay. And, Tony, what's the best advice you've ever been given? You know, and, you could broaden it to like, business leadership or, or in property management specifically.
Tony Cook
The best advice. Man, that's such a hard one. I've been asked, and I feel like I've answered it differently each time because I've had so much good advice. Honestly, living in the moment, you know, people can get defeated pretty quickly, living in the moment and just kind of embracing, embracing whatever you're doing, right and actually putting forth the effort and caring about what you're doing. I think that's the best thing. You know, you might be doing something that feels like you're in the minutia or whatever, but there's a reason you're doing it. And at the end of the day, you're going to look back and be glad that you actually did that. And it's hard sometimes to just kind of live in that moment. It's so it sounds simple, but, you know, hey, today, man, that's that's not really is it for me? So that I'll, I'll give you a Marcus Aurelius quote. You can leave life right now, let that determine what you do and say and think. That's really important. And memento mori for for the ones that understand, you know, our demise. I know it sounds cryptic, but just, you know, living in that moment, knowing that everything's going to be good, I think that's some pretty good advice. I just talked to a buddy yesterday. He wants to give up on his business and what he's doing. I'm like, nah, you're just from the outside. It's easy for me to look at that and be like, dude, here's what you gotta do, right? But for him, he's in it and he's exhausted and he's burnt out and but there's things he can do. I don't want to lecture him. Right. So you got to kind of be careful of that stuff. But yeah, that's, that's probably the best advice I've gotten. And most of my best advice has come from books. Not people I know, unfortunately.
Andrew Smallwood
Yeah, yeah. Okay. And, Tony, let's wrap with this. As you look to the future of this industry, your company, your career journey, like what excites you most, like as you're looking to the future, what are some of the things that you're seeing that make you optimistic or excited?
Tony Cook
Man, there's a few things. One, personally for Bay Management Group, we've been in, in, the Mid-Atlantic at 6500 units. It's great. A lot of your listeners are like, Holy crap, that's a huge company. I feel like we're small. And I don't know, I don't know why. And a few people around here do. Or, like, we can. We want to be national. We want to blow a renter's warehouse out of the water. We want to be 100, thousand, 200,000 units. We feel like it's it's very manageable to do that now because all of the consolidation that's going on like to get us to get an ownership group that has, you know, a thousand, 2000, 3000 doors isn't as difficult as it was ten years ago. That was hard to find 10, 15, 20 years ago. Now we talk to asset managers. We talk to these folks all the time. It's like, man, there's some big boys that we can get management and they don't want to do in-house management themselves. They don't. They're not good at that. They're developing or they're good at buying their but they don't want to manage property. That's not their thing. So for me, we've been looking our chops looking at this. And in marketing, SEO, social media, it's increasingly I don't want to say easy because I don't do it, but it's more and more relevant these days and it's quicker to scale. So I get excited about scale without breaking the foundation and technology, just all the technologies that exist. It's it's a little bit dizzying. I was telling you, we hired a CTO, so he's, thank God, here to help us with this. But everything's there. It can be done. Think of what you want to do and just do it. And we want to be 100,000 units, so that's what we're going to do. And so hopefully in 3 to 5 years or so, you know, you guys are just seen as all over the TV, the radio, etc. that's kind of where we want to be. We don't want to be this regional player anymore.
Andrew Smallwood
Awesome. Well, Tony, I think that's a great note to end on. Thanks so much for joining us today and sharing your stories. Your energy, you know, your passion with us. And, you know, a lot of lessons and practical tips and your thoguht process how you guys have thought through things. So I really appreciate you coming on and sharing with us today.
Tony Cook
Likewise, Andrew was awesome to see you, man. Take it easy.
Laura Mac & Carol Housel
And that wraps up another episode of the Triple-Win Property Management podcast. Thank you for pressing play. We hope you've gained valuable insights and inspiration.
The Triple-Win Property Management Podcast is proudly produced and distributed by Second Nature, where we believe in a Triple-Win, building winning experiences for your residents, investors and your teams with the only fully managed resident benefits package. Visit SecondNature.com to learn more and talk to an RBP expert in your area. If you have any questions or comments or want to weigh in on the conversation, we'd love to hear from you. Email TripleWin@SecondNature.com. That's TripleWin@SecondNature.com. Stay connected with us beyond the podcast. Visit our website at SecondNature.com to stay updated with upcoming property management events and articles. And don't forget, you can keep the conversation going in the Triple-Win Property Management Facebook group. It's exclusively for property managers. To receive even more valuable insights and updates, subscribe to our newsletter. You can find the link to that and much more in the show notes. On behalf of the Triple-Win community, this is Laura Mac, thanking you for tuning in. And on behalf of Second Nature, this is Carol Housel. Check back soon for another exciting episode. Until then, keep striving for that Triple-Win.