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

Pasha:
Right.

Henry:
I’d say the system works.

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

Henry:
I’m taking up the BiggerPockets Podcast at the moment and I’ve the pleasure of interviewing my good good friend, my companion, my scholar, Mr. Pasha Maleknia. Pasha’s acquired a sophisticated diploma in info programs. He’s right here to show you learn how to construct programs 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 onerous. I’d say constructing a brand new system. I similar to to problem and simply the problem of it. In fact you’re a nerd.

Henry:
So why 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 most likely already spending time on programs with out even figuring out it. Your programs most likely simply aren’t that nice but. We’re going to speak in regards to the money and time programs 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 great spot to be as a result of you possibly can set what you are promoting up for development within the long-term. And if you happen to’re an skilled investor, you must stick round and pay attention as a result of we’re going to speak about issues that would probably put more cash in your pocket and in addition aid you maintain your tenants with out you having to spend a lot time addressing these points your self. All proper, so Pasha’s right here with me. He desires to tackle the introduction of the short tip for me. So at the moment we’re going to maneuver into the-

Pasha:
Fast tip.

Henry:
Right now’s fast tip is go to biggerpockets.com/assets. There you possibly can obtain Pasha’s instance spreadsheet of how one can implement a system and jumpstart constructing programs to your personal enterprise. Thanks Pasha for sharing that with us. It’s a brilliant cool instrument. You’ll really get to see a bit of it if you happen to’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 just a little 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 acquired into the world of actual property investing and the way he’s taken that begin and catapulted his enterprise. However we sort of left with just a little little bit of a cliffhanger. Pasha is an professional on programs and learn how to save your self money and time with actual property investing and we needed to dive into it, however clearly didn’t have time in that episode. So we introduced him again, particularly on this episode, to dig into programs, what they’re and the way he implements them and the way you ought to be contemplating and doing the identical factor. As a result of the tremendous secret is all people already has programs in place, they most likely simply suck. So let’s discuss to Pasha about programs.
So Pasha, clearly, he’s a good friend of mine, he’s a scholar of mine, and he’s a superb actual property investor. So I needed to begin off, Pasha, if you happen to wouldn’t thoughts by let’s dispel some myths round programs. As a result of at any time when folks hear the phrase system, I believe typically they assume it’s so much both greater than it’s or costlier than it’s, or that they’re not prepared for programs 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 possibly can inform us why they’re lacking or in the event that they’re lacking. Perhaps I’m simply fully unsuitable right here.

Pasha:
100%. Let’s do it.

Henry:
So the primary fable is that programs have to be advanced. Is that this a fable or is that this details?

Pasha:
Completely a fable. As , even in greater firms typically there’s a bent to construct advanced programs and it virtually at all times hearth backed. I believe the very best programs that I’ve encountered are of their easiest kind. And also you at all times need to begin with a quite simple one stage sort of system that works for you after which begin, you possibly can at all times make it extra related to a enterprise or to the problem that you simply’re tackling. However I see this so much that individuals begin with an ideal system, a really advanced system as a result of they adore it, 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 best type of programs are at all times higher as a result of you possibly can at all times get a suggestions and you’ll at all times return and construct it once more and make it just a little bit extra related. There’s a saying that claims: “Your first 5 programs, at all times going to suck.” So it’s higher to simply begin it easy, be sure that it’s like, perceive why, what’s the drawback, return, repair it. After which as you go ahead it’s going to be extra related to your want. However undoubtedly don’t begin with a fancy system.

Henry:
Superior. Man, that’s nice perception as a result of I believe folks do are likely to overthink programs. I do know I did and truthfully most likely nonetheless do in a whole lot of areas of my enterprise. So the second fable 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 fable, completely a fable. I’ve mentioned this so much virtually in all of the talks that I’m going to, all of the workshops and the whole lot, folks attain out and are like, “Okay, what software program do you utilize? What do you utilize for this? What do you utilize for that?” And I at all times clearly inform them the reply, however it’s like lots of people need to begin from the software program. They assume software program functions or apps are the programs, which is 100% unsuitable.
Mainly you at all times need to just remember to begin along with your core problems with what you are promoting first, you then stroll that again and you then concentrate on what system can tackle that core problem that I’ve. And you then exit and store for the softwares or functions for it. An instance I may say goes to Dwelling Depot and purchase the primary 5 instruments that you simply see from the shelf after which return dwelling and attempt to construct one thing with it. That’s not the way it works. You at all times need to just remember to concentrate on a related instrument to your want. And I see this so much, man. They assume they only want to jot down a examine for a giant fancy software program and so they assume that each one of their issues are going to go away magically. And I at all times 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 a good way to take a look at it. Right here’s a enjoyable truth about me. Even when I knew precisely what instrument I wanted to do a job and I walked into Dwelling Depot and purchased that instrument, I’d suck at that job. I’m simply not useful. That’s simply not a skillset that I’ve. And so that you additionally don’t have to be useful to be an actual property investor. Perhaps we’ll throw that on the finish of the present, professional tip for you new traders.
That’s a implausible level as a result of lots of people assume that programs imply I have to go purchase a bit of software program after which I inform the piece of software program, right here’s all of the issues that I do in my enterprise. After which that piece of software program says, superior, that is how you must do these issues and it doesn’t work like that. A system is admittedly only a set of processes that you simply implement systematically again and again and it’s supposed to save lots of you money and time. That may be something. We talked yesterday after we have been discussing this present and also you confirmed me one in all your programs that was actually only a Google Sheet. Everyone has entry to Google Sheets. So it’s not software program you want, it’s processes.

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

Henry:
The following fable that I need to discuss is, so I’m sort of going to skip one right here as a result of I believe we at present already hit at it. Techniques are just for massive companies. Clearly we’ve touched on that. We all know that programs are meant for any enterprise of any aspect, it’s only a course of. However this one I believe is admittedly vital is that programs are just for out-of-state traders.

Pasha:
Once we discuss programs are just for out of the state, I believe that’s not related as a result of I believe I’m the dwelling instance of this. We now have about 20 items that the majority of them are inside 10 miles radius of the place I stay, however we sort of urge ourselves to be sure that we by no means step into any of them as a result of we need to have the liberty of geographical location. We wish to have the ability to be anyplace we would like and be capable to renovate our houses and be capable to handle all of our houses. We have already got carried out the administration piece, now we’re centered on constructing our programs round rehabbing them remotely. If you wish to be extra passive in what you are promoting, I’d suggest to begin simply interested by constructing the companies that you’ve got on a platform that’s scalable and that’s solely doable you probably have a superb system in place. And also you don’t need to be out of the state. You will be as shut as it may possibly get to you, however you simply don’t need to be the weather that’s the middle of what you are promoting.

Henry:
If I’m listening to you accurately, what you’re saying is that programs are supposed to prevent money and time. And who doesn’t need to save time or cash regardless of the place you’re situated? However implementing programs if you end up native as nicely I’d assume 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 programs once you’re native since you will be there to hone it. After which when you’ve acquired it dialed in, you actually open up virtually this world of enlargement. As a result of if you happen to’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 selecting a special market and increasing what you are promoting since you see a chance in a brand new market and now you’re not held again by geographic location? So I believe that’s an outstanding manner to take a look at issues.

Pasha:
100%, 100% agree with that.

Henry:
Nice. So we’ve established it’s about getting again your time and that’s why I believe programs 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 be taught pretty shortly that it’s completely not a passive enterprise. However programs assist you to purchase again that passivity in what you are promoting. And so you possibly can nonetheless have a semi-passive enterprise of actual property investing and make it extra passive by means of using programs. 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 individual that you’re known as to be and never the individual that you need to 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 means of why that’s vital, Pasha.

Pasha:
The no BS why got here up when, if you happen to guys really listened to episode 773, it was like I used to be in a really dire state of affairs, 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 sort 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 would like that too. However I by no means took any actions on that as a result of fairly truthfully it was a BS why for me as a result of I like my job. I truthfully do. It wasn’t a giant motivation for me to be above and past and dig deeper into totally different enterprise fashions and attempt to be an entrepreneur. It’s simply a type of issues that you simply need to be sure that no matter motive you give you is one thing that 100% aligns with who you’re and what your core values are. And that is a type of issues that’s sort of onerous as a result of there are such a lot of shiny whys on the market as nicely that you simply would possibly really simply stumble throughout and also you’re like, “Oh, yeah, cool, I would like it.” That’s not sufficient. It is advisable to have that. It’s not like I need to have it. It is advisable to have that why.
I believe 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 desires to have a cool automotive to drive round. Everyone desires to have a enterprise that generates some huge cash. That’s the side that you simply see on a whole lot of social media. However the second that the rainbows and unicorn go away and there are some alligators on the way in which and there are some challenges on the way in which, they again out as a result of that doesn’t fulfill their need half.
And that’s the rationale that I at all times suggest to folks that truly attain out to me is that just remember to have your eyes on the why, why you’re doing this, and it must be so sturdy. It must strongly align with you in a manner that everytime you get up within the morning, you possibly can give it some thought. It’s already in entrance of your eyes. It’s one thing that you simply simply can’t disconnect your self from it. It’s not like in the future you’re not within the temper and in the future you’re within the temper. It simply doesn’t work that manner. And that’s why I known as it no BS why and it’s actually onerous to get there. I imply it’s virtually, you’ll want to simply dig deeper and deeper and deeper in your self to get there.

Henry:
Sure, I fully agree and I like that you simply name it the no BS why as a result of I’d by no means heard it known as that earlier than. However I’ve talked about it totally different with a number of of my different college students and the way in which I’ve at all times pictured is folks at all times are, they’re fast to say, “I would like monetary freedom, or, “I would like monetary independence,” or, “I need 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 aim. It’s not your why. Your why is what you get to do since you’re financially free. Monetary freedom permits you the time freedom to be the individual that you’re known as to be, not the particular person you need to be for cash. And sometimes once you’re the individual that you’re known as to be, you get to influence different folks.
So your why is usually rooted in who you get to be in service of different folks. And so once you’re interested by your why, you’re proper, it’s acquired to be the factor that drives you past the great days and the dangerous days. You mentioned it greatest, you mentioned, you want it, you want it to occur. So if you happen to’re considering proper now, I need to be an actual property investor in order that I will be financially free, that’s nice. Take it a step deeper. Should you have been free at the moment, if you happen to wakened and magically had all of the rental property to provide all of the cashflow you wanted to stay your life-style and to pay for all of your life’s bills, what would you be doing with that freedom? Whose life would you be impacting with that freedom? That’s the place your no BS why lives. Agree?

Pasha:
100%. Completely. It’s at all times like, you see that image and you then’re like, “Oh, man, wait. So now I’ve freedom however my household sucks,” or one thing like, “Now I have to put all of my undivided consideration to my household.” And you then’re like, “Okay, that is what I want, let’s go for it.” After which there’s nothing that basically can cease you as a result of precisely the place you need 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, “Properly, now I get to retire my mother and father. Now I get to ship my mother and father on a visit or rework my mother and father’ home,” or, “now I get to pay the medical payments for my sick member of the family who couldn’t afford the correct medical therapy.” These are the issues, these are the whys which can be going to drive you thru the troublesome occasions. As a result of in case your why is simply rooted in you and what you need, people, we’re human and we let ourselves down day by day.
You understand how many occasions I mentioned I’m going to go to the fitness center tomorrow and didn’t go? We let ourselves down on a regular basis, however we don’t prefer 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 need to ask your self to hit what that why was?

Pasha:
I believe for me it was just a little bit troublesome as a result of I used to be in a state of affairs that I discovered myself, I didn’t have a whole lot of time after which instantly it was in entrance of me like, what are crucial issues for me? However what I’d suggest is, one, you’ll want to 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 need to usher in anyone that is aware of you very nicely and ask them that will help you to dig deeper. It’s extra like interrogation even. You need to just remember to get to the core wants that you simply need to go after and it’s one thing that simply makes you a blazing why that then it turns into an engine that you’ll want to harness that power to run what you are promoting in your day-to-day life.
However I’d say be brutally sincere with your self. Should you’re speaking a couple of particular want that must be compensated for or must be addressed for, what are these wants? Write them down. As you talked about, it may be addressing your particular family members or the state of affairs that they may be left after. It must be tremendous tailor-made about you. So be sure that it’s 100% personalized based mostly in your life, based mostly in your values in life. It’s good to take a look at different folks’s why and that’s wonderful, however typically it simply merely doesn’t align and also you don’t need to simply copy another person. You need to just remember to tailor it for your self and you’ll want to simply dig deeper and deeper and deeper till… Whenever you get there, it. It’s a type of issues that, once you hit there, you’re like, “Oh, yeah, that’s it. That’s what 100% aligns with my core worth.”

Henry:
Discovering your why, Pasha’s the first 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 need to be wealthy, diving into what which means. We discuss this so much 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 once you outline your why, is there one thing that you simply didn’t clearly know earlier than? That’s an ideal level as a result of if you end up digging into your why and attempting 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 you’ll want to work by means of with the intention to determine what that why is.
After which this one, I consider, is massively vital. Is it one thing that excites you everytime you get up within the morning? That’s a truth. 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 figuring out that I acquired 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 information 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 day by day. And so if you happen to reply no to any of those questions, it implies that you’ll want to hold digging. And I believe that’s nice. And all these are coming from Pasha. And so what’s superior about that is that is Pashas system for having a why. This dude has a system for the whole lot.
So whereas we’re on that matter, let’s go forward and let’s dive into programs. Pasha sat down with me and reviewed all of his programs for his enterprise. I used to be one who didn’t implement a whole lot of programs, and it’s not as a result of I don’t assume they’re useful, it’s simply, I’ve at all times been a prepared, hearth, intention sort 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 totally impressed, a lot in order that we began to implement a number of of the programs that he’s utilizing. So I’ve began to implement a few of these programs 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 keep on with us for that.
However for me, after I sat down with Pasha, I instantly applied a system for displaying my rental properties and a system for keeping track of renovations of my properties. And so at a extremely excessive stage, Pasha had this nice system for putting in… Primarily you’re putting in web-enabled cameras, hooking them as much as a cell hotspot, after which putting in a web-enabled keypad door lock after which permitting your tenants who need to see your property. So after our tenants apply, we are able to now give them a code the place they will go check out the property and we don’t need to bodily go see the property. And what was big for us is correct after we sat down with Pasha about this, we have been about to place a property available on the market that was a couple of 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 save lots of actually simply two hours of driving time per appointment already off the highest. Plus, if you happen to calculate that, and I do this for if I do 10 showings, that’s, what, 20 hours that you simply saved in simply drive time.
And so we have been capable of implement this on that property. We confirmed it just about. Nobody ever complained, nobody had an issue with it in any respect. The cameras would activate when folks would enter the room. So we’d know when folks confirmed up, we’d know once they left. The codes, we’d 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 applied it for properties which can 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 other people simply no present on you. So what an enormous time saver for me. We’re additionally utilizing it to watch our rehab property. So I do know firsthand that a few of these programs have been a lifesaver in my enterprise.
Pasha, let’s discuss, give us two of your favourite programs 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 believe after we have been beginning this, we realized that after we need to present the property or after we need to have a greater monitoring system on the contractors coming out and in, it must be one thing that may be carried out just about. So precisely what you talked about, that’s what we applied. All of the cameras, all the net connections, and all of the keypads all collectively. And so they really are actually all in numerous packing containers. We’ve acquired seven of those packing containers that they’re all paired. So all they should do is to simply ship it to anyone, simply plug them to {the electrical} plug after which it’s all going to be on-line. I believe that’s actually one in all my favourite ones. So that you undoubtedly took one of many favourite ones for certain.
It saved us a whole lot of time. It nonetheless is saving us a whole lot of 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 individual that drives all the way in which there. And tenants adore it too, as a result of they didn’t really feel stress. They may go into the unit and so they may take a look at it. My contractors additionally, it allowed us to grasp who is an efficient contractor who will not be. If anyone says, “Oh, I’ve been working right here for 5 days,” they’re like, “No, right here’s a log that truly exhibits you’ve been working right here for 2 days. So let’s wrap it up. After which there are another those who they really really feel higher when you have got 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 principally the way it’s all linked collectively to resolve an issue for you, which for us it was not losing time and never losing power. And it’s additionally really sort 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 overlook to complete that wall. We have to get that carried out too.” First they’re all afraid like, who’s speaking to them, after which they discover. It’s really fairly humorous. That’s one in all them.
The opposite one which I actually like is the system that I put collectively, which is principally the class of the problems that may go 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, principally handyman stuff, HVAC, issues like that. And the issues are principally in right here and the answer to them or the treatment can also be in entrance of them. After which on the finish it says, if none of those treatments work, then you’ll want to contact this particular person for that problem. And that particular person goes to be the plumber, electrician, handyman. After which in fact we have now 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 tackle the entire considerations, not all of them, however I’d say 99% of the issues that our tenants have. They obtain these, they principally come right here, they match them with the issues right here, they stroll tenants by means of among the drawback fixing and typically our tenants are literally capable of clear up the issue themselves, just like the small ones. Clearly if it’s severe or if it’s one thing that may create a legal responsibility, we ship a licensed particular person to repair it. However typically there’s some simpler stuff that they will do and, man, our tenants adore it. They completely love this as a result of they get to resolve the issue actually quick. And it’s nice for us as a result of we don’t spend tons of of {dollars} for each name. It’s one thing that may be addressed. I believe we tackle 15% of our upkeep calls with doing one thing like this.
And if it helps, I’m going to be sure that I ship a template so as to put it into the aspect notes. However once more, this is rather like a template. It is advisable to go in there and see what are the issues which can be relevant to what you are promoting and you’ll construct one thing there. However that is additionally undoubtedly one in all our entrance winners.

Henry:
That is actually cool, Pasha. And so what I need to do is add just a little context right here for many who are listening or driving and may’t see, after which I need to be sure that I’m interested by it in the precise manner. So what Pasha’s acquired 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 possibly can observe alongside and say, okay, it’s electrical. So what’s the subcategory? The subcategory, if it’s a electrical, it may very well be the breakers are tripping or it may very well 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 possibly can 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 anyone on the market to determine what the precise drawback is and get it mounted.
That is like once you name the cable firm as a result of your web’s out and so they’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 pace, obtain pace? And also you inform them, they are saying, “Okay, nice.” So a whole lot of these issues are simply solved by typically your modem isn’t on, proper? And so that you’re ready 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 carried out is you’ve given this spreadsheet primarily to a digital assistant.

Pasha:
That’s right, 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 only 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 right?

Pasha:
That’s right. And, once more, that is an instance, guys. You’ll be able to 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 would like them to observe this written down system. So, for instance, on this case it says, if, let’s say, there’s a surge that it simply makes their fusebox flipping, then that is severe, you don’t need to do something, you need to contact an electrician. After which there’s one other web page that has the job title and other people which can 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 need to be a landlord as a result of I don’t need to take care of tenants and bathrooms.” And also you simply actually confirmed me a spreadsheet that offers with the tenants and bathrooms for you. So it’s not that huge of a deal, people. 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, so much, so much.

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

Pasha:
We acquired about 218 tickets or calls within the final 12 months for our properties as a result of we really sort of expanded and all of them are addressed with my tenants. Now there are some examples which can be one-offs which can be actually bizarre and it means, for instance, we had a thunderstorm. You and I are each dwelling 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 particular person or tree removing particular person and now, from then they do it. However that was, I believe, the one name that I needed to chip in. I used to be like, “Okay, if that’s the problem, you’ll want to name this particular person.” However then I constructed it into my system so if it occurs once more, then I don’t have to 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:
Right.

Henry:
I’d say the system works.

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

Henry:
And it’s not simply that too, it’s not simply that. However what I need to spotlight right here is he solely needed to get on the cellphone one time, however he mentioned his tenants love this, they’re pleased, they’re not feeling a disconnect from customer support by means of this.

Pasha:
Precisely.

Henry:
That’s superior.

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

Henry:
Thanks a lot, Pasha. I believe that was an ideal instance for folks to see that programs don’t need to be loopy costly and that they will 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 need to know is what are the 5 most vital steps for constructing any passive system? The 5 steps we have now listed here 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 programs have these enter course of, output piece. So enter will be something truthfully, no matter you need to get into so that you simply’d be capable to convert it into one thing else. So the enter may very well be any knowledge level that yow 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 may very well 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 believe crucial factor about enter is the enter is crucial factor that must be aligned along with your core enterprise problem. You don’t need to have additional info coming in, you need it to be proper, crisp, addressing the precise drawback that you simply’re attempting to resolve and construct the system round it.

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

Pasha:
So course of is principally the engine of the system. That’s what it’s. It may very well be the step-by-step procedures in order that it follows a sure circulate chart to get to a sure output. And this instance, for instance, it’s going to be the treatment part, which is once you stroll your tenant by means of the problems that they’ve and now you need to principally get it mounted. So that you stroll them by means of how one can get the enter info and principally add to it or take a look at it from a special angle or principally change that knowledge enter. So, for instance, on this case, let’s say, if rubbish disposal is clogged and I believe, “Oh, the landlords are actually conversant in this problem,” is that you really want the tenant to go in there, take a look at the underside of it if there’s like a fuse button or one thing or if there’s a Allen wrench that they should use. All of those walkthroughs and procedures and step-by-step guides, that’s the place the method is available in.
And it’s simpler to do that. It’s principally the principle half that’s going to interchange you if you wish to construct a system to interchange you. Does that make sense? That is the place you’ll need to have your information extracted from the individual that is an professional, normally it’s going to be you, and also you need 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 circulate by means of that to the subsequent step.

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

Pasha:
It may be.

Henry:
Okay, now discuss to us about output.

Pasha:
All programs have to have a degree which principally desires to present 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 fancy enterprise mannequin that you simply need to put the whole lot collectively. On this instance, the output goes to be a walkthrough that’s already offered and ensuring that the issue is addressed. So it may be in numerous codecs, it may be within the format of a information repository. Information repository is principally the place you place your whole info which can be actually tangible and useful to you.
Within the instance of lead technology, it’s going to be the checklist of those who… So, let’s say, you begin with 1000 folks, you have got a course of that breaks it all the way 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 can be extra more likely to be keen to promote their dwelling. Now you have got one other system that use that after which course of it after which sends a mailer to them, for instance. However that output is principally what you’re going after and what the results of your system ought to appear like. And it may be in numerous codecs and it may be repeatable.

Henry:
It seems like your outputs can probably be in numerous codecs even inside the identical system as a result of with the instance we went by means of, one output may be that the outcomes guidelines resulted in the issue being mounted and one output may 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 have got 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 totally different programs. One in every of them is the cost system. It’s a feed to a special one, which is like, now the job is completed, it must go to the payroll system. So that you pay them. Once more, you don’t need to be the one who writes the examine 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 have now, which principally 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 acquired there. That’s the system we would like.” And, man, I see this again and again, which they only depart it like that. They’re like, “Okay, cool, the system is working.” After which they only 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 adjustments, because the enter adjustments, because the enterprise world adjustments, your system must be alert, it wants to grasp what’s occurring so it may possibly regulate itself.
So a superb instance of it’ll be figuring out KPIs for a way your system is working in order that in case your system is definitely in fine condition or not. So, for instance, on this case, once more going again to the upkeep system, the KPI for us is, are our tenants pleased about addressing their points or not? So we ship out two surveys each six months, principally, yearly. So each six months we ship one survey and we ask our tenants how do they really feel they’re being handled, how do they assume their upkeep points are being addressed? And that could be a nice KPI as a result of it tells us whether or not it’s one thing that ultimately our tenants are feeling nice about it or not. And in the event that they don’t, we have to come again. In order that’s our KPI, proper?
The primary yr it would work completely, however the second yr it would really not work very well and it’s going to boost a crimson flag that enables us to return in there, dig into our system and see what was the problem, what brought on that particular person to not be pleased about it. After which we stroll it again after which we regulate our processes, we regulate our enter to be sure that subsequent time we are able to tackle this. So the suggestions is principally a loop that goes out of your output to the method and to the enter to be sure that we replace it and keep related.

Henry:
Okay, nice. So, if I’m understanding, the suggestions or suggestions loop is what takes your system from being a static system that by no means adjustments to a dynamic system that’s altering or evolving as what you are promoting evolves. So with the instance you gave, you measure your tenants, principally you measure in the event that they’re happy with the work that’s being carried out. If you’re nice, you state the system retains doing what it’s doing. Should you’re getting a whole lot of suggestions that tenants aren’t pleased, then you possibly can dig deeper into that suggestions after which regulate your system to handle these suggestions points after which proceed to guage and make adjustments so your system is dynamic. And I’m going to exit on a limb right here and I’m going to guess that you’ve got a system that does the suggestions for you.

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

Henry:
Improbable. So to recap, we acquired the 5 most important parts of a system is the enter. That’s the drawback that you simply feed into the system. You’ve acquired the method, that’s primarily the way you’re fixing the issue or the way you’re addressing that problem. You’ve acquired your output, which will be the outcomes of that course of and that may be a optimistic or a unfavorable end result. After which you may make changes to your course of by means of suggestions and measuring the outcomes. After which setting, we didn’t contact on setting, did we?

Pasha:
The setting is principally the context that your system is operating in and that’s just like the final part that you really want to concentrate on. Mainly on this instance, once more, if this technique is working in houses, I’m simply saying like in Arkansas and now you need to handle the identical properties in, let’s say, California, you’re in a special context, you’re 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 programs to the context that they’re operating in to be sure that your system stays related.

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

Pasha:
I believe one in all them is we have been really in Hawaii and my condominium acquired flooded, one of many ones that truly we had a tenant in. I’m not speaking a couple of 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 at all times need to know what’s happening. And it was simply addressed robotically. The issue raised, they known as, there’s an emergency stage on that system, it was a excessive emergency. They dispatched anyone like a plumber that’s actually good in mould remediation and all of that. Thank God it didn’t get to any of this as a result of we had this in like the primary hour.
And I believe, all in all, we spent about $800 and it included a brand new piece to the water heater, which, if I didn’t have the system in there, I’m fairly certain my journey would’ve been ruined and it wouldn’t be a really pleasing expertise for my tenant both. Nevertheless it was addressed within the first couple of hours and it was fully working wonderful, which, to me, it was an ideal win as a result of it confirmed me that it may possibly work particularly after I wanted it to.

Henry:
Yeah, man, that’s an ideal instance since you’re proper, nobody desires the decision once they’re on trip that one in all their items flooded. And it at all times looks as if that’s once you get these calls is once you’re out having a superb time. In order that’s cool that your system simply sort of dealt with it for you and saved you all types of cash and did precisely what it was presupposed to do. That’s superb. Thanks for sharing that.
All proper, thanks, Pasha, for giving us this breakdown of programs. There are some nice info that you simply gave us as a result of, once more, programs, I like to think about it and also you sort of put this in my head, it’s that we’re all already utilizing programs, proper? A system is only a course of you have got in what you are promoting and a whole lot of the occasions our processes simply aren’t nice. And so considering of programs isn’t considering of how can I’m going purchase an costly piece of software program or how do I spend a whole lot of effort and time to resolve big-level issues? It’s only a matter of systematizing the issues which can be vital to you or the issues which can be taking essentially the most of your time that you simply don’t need to be taking your time and giving it some inputs, some processes and a few outputs, after which offering some suggestions to maintain your programs dynamic and you’ll 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 typically it’s such as you won’t be the individual that is the professional in that space and that’s nonetheless wonderful. An excellent instance is like, you and I’ve been associates for years and I personally realized so much from you, particularly with regards to discovering good off-market offers. And I used to be like, man, this man is aware of his stuff. As I confirmed it to you, we began interested by all of those procedures and processes, how can we flip that right into a system in order that even that may be automated.
So, for instance, I do know that we didn’t get time to get there, however even lead technology proper now for me is one thing that I put collectively. Once more, we tried it, it began with essentially the most easiest way, however proper now it’s like, hey, I simply despatched this zip code that I need to go after. After which there’s really, I known as it LA, so native assistant, that picks it up, processes all of the mails. The direct mails are out, all of the codecs, the whole lot is predefined. However all of them comes from, not from me, however from a educated particular person 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 possibly can go to biggerpockets.com/assets the place Pasha has been gracious sufficient to share that with us. And so let the folks know the place they will discover you, Mr. Pasha.

Pasha:
You’ll 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 yow will discover me.

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

Pasha:
Thanks, sir. Have a superb one.