On this Flashback Friday episode, Jason Hartman talks about self-management. He brings on Chief Product Officer of Key Please, Adam Lorentzen. They discuss what Key Please does and how it helps self-managers by allowing landlords to do self-showings of their rental properties. They believe in automating the self-management process and give tools on how.
Jason Hartman 0:00
Welcome to this week’s edition of flashback Friday, your opportunity to get some good review by listening to episodes from the past that Jason has hand picked to help you today in the present, and propel you into the future. Enjoy.
Announcer 0:15
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. Here’s your host Jason Hartman with the complete solution for real estate investors.
Jason Hartman 1:05
Welcome to the creating wealth show, episode number 785. This is your host, Jason Hartman, thank you so much for joining me today. And you know, as I always say, it is an amazing time to be alive. Now, what’s amazing This time, I know I’m not, you know, I have my share of complaints. I complain about a lot of stuff. In fact, you could say I’m a complainer, but at the same time, I do realize all of the amazing stuff that is going on out there in the world, and we try to bring some of that to our listeners. So what is amazing? Well, many things are amazing. The guest we have today is going to be talking about self management automation. Well, not specifically, no, they don’t call it that. But I call it that. And I think you’re really going to enjoy this interview. You know, we’ve done a lot of shows over the years, about how you can self manage properties from a distance. properties that I’ve self managed in a similar way, you know, not not the same properties, obviously, those are my properties. They’re not yours. But properties that I’ve self managed that I’ve never seen with tenants that I’ve never met. And if you would have told me that was possible years ago, I would have said you were crazy. But then I thought about it. And I thought, well, I had this property when I lived in Irvine, California. And it was just a few minutes from my home. And I realized when one of my tenants moved out of that, that I hadn’t been to that property in about three years. I hadn’t been there. So why would it matter if it were 1000 miles away? Or, you know, about how far was that maybe six miles away from my house? It was probably less than was the crow flies. It was probably about two miles. But driving. Yeah, might have been four or five miles. I don’t know. Anyway,
Jason Hartman 2:56
but you know, it didn’t really matter because I never went there. Anyway, right. That was the thing. You’re gonna love this interview today. Again, we’re moving in this direction, where we and we’re trying to do this, this is a movement that I have really taken by the horns. And I am pushing this movement for all a cart property management services for self management technologies. And just bringing you all the tools and the education you need to do this if you want to, you don’t have to, you can certainly use the property managers we vet and recommend, okay, but there are options. And you know what this is its competition. And when there’s competition in the marketplace, of course, you know what happens, things get better, they get less expensive. The service improves all of this natural stuff that happens inside of free markets. So that is one amazing time to be alive thing. And that interview is coming in just a moment. Thank you, Fernando, for sending me this art. Well, actually, a couple of clients sent it to me. I think Aaron sent it to me as well. I got the same article from a few people, I no longer Subscribe to The Wall Street Journal. Although I did for many years and I like the Wall Street Journal. I just can’t keep up with it. But Fernando sent this to me and Aaron did as well and a few other people, listeners, and it is on it was on the cover of the business and finance section. And it talks about how Fannie Mae is broadening its role in house rentals. Okay. So this is another step in the right direction. For an expanding investor market. The expansion of the asset class of single family homes has investments, and it’s a big deal. This is a big deal. It’s great news, right? invitation homes, which owns a zillion rentals, a zillion rental homes now. An exact number, by the way, is going public. Our listener Cody sent me the roadshow on their public offering, which is also interesting because, you know, this is this is Blackstone’s company, right? And they are the ones that do all of these rentals of these zillions, not an exact number of single family homes. And again, this has never been established over history. As a real asset class like it is becoming established now. It’s expanding. It’s becoming more sophisticated. The commercial real estate people, I believe, to a large extent have realized that single family homes are the better asset class, we beat them hands down, we beat those office buildings, we beat those industrial parks, those shopping centers. I mean, those deals aren’t nearly as good as single family homes as a broad stroke. way to think of it of course, Every individual deal can be very different. No question about that. But you know, would you rather have a hotel or a bunch of single family homes? Well, you know, we’re not playing Monopoly, right? This is real life. And those single family homes have much better characteristics than those hotels do, or those shopping centers or those office buildings. So the single family home is the most historically proven asset class in the world as an investment as a rental property not for living in but as a rental property. So that is really being seen. There’s some talk and we talked about this at our recent meet the masters of income property event, we talked about how Fannie Mae is considering an easing of the financing restrictions on single family home investment properties. This would be incredibly wonderful news. It would certainly expand the opportunities for investors, I think it would cause prices to increase even more than they already have. And they have significantly already. So there’s a lot of really amazing stuff that’s going on. Of course, we’ve talked many times about the Trump administration, and Dodd Frank and their move to either soften or repeal that. And by the way, I got a mention for Mr. Trump. I mean, love him or hate him, and, you know, everybody’s welcome to their opinion, but God, is there a president with more energy than that guy? I mean, he is How old is he? What is he 70 years old. And I mean, that guy just, he’s a workhorse. I mean, he just gets stuff done. You know, and I realize some of you listening may hate that he’s getting stuff done. But nonetheless, he’s getting stuff done. He moves quickly and very swiftly. You know, certainly not the typical sort of government, you know, management by committee type mentality. He’s moving quick. So we will see, you know, we’re in, I really think it’s going to take 100 days, you know, they always talk about that first hundred days of a presidency, to really see how good or bad Trump is going to be. I think everybody on both sides of the aisle really needs to just withhold their judgment, love them or hate them. Because, you know, I don’t know what to make of them. You know, I have big reservations about Trump. But I do think, with those reservations that you know, those reservations I have notwithstanding, I think he’s going to be good for the economy. I think the American worker is going to earn more, they’re going to be more fully employed. One of the problems we’ve had over the past many years, certainly over the last eight years, is that we’ve had this you know, look, we had john Williams of shadow stats on the show, of course, you hopefully remember that episode. He’s not exactly the most dynamic, exciting special But shadow stats calm is an awesome website with fantastic information because it really does dissect and provide a lot more meaning to statistics. And of course the government manipulates like crazy the news media manipulates like crazy. We saw in this last election cycle the mainstream media lose tons of credibility, which I I think they deserved it. That was a good thing. So they’re being called into question, rightfully so. And with the unemployment rate, you know, it’s of course manipulated like crazy. It doesn’t include the people that fall off the unemployment rolls the discouraged workers, we’ve seen homelessness increase food stamps increase. I mean, there’s a lot of despair out there, no question. But the thing that’s really, really not counted is underemployment and the inflation adjusted wages. I mean, it’s been pathetic. The last 20 years the last 25 years, I mean, Americans have just suffered, suffered suffered as their jobs have been exported. So that’s changing. Okay, that is definitely changing. Like I said, Love or hate Trump, fine, but wages are going to go up, and there’s probably going to be some inflation. Trump is inflationary, philosophically, of course, you know, I hate inflation. But as a self interested real estate investor, I like inflation quite well. So, you know, that’s the thing. But yeah, the financing for single family rental homes is on the upswing. So that’s going to be really good news. Okay. What else? Gosh, there’s so many things to talk about here. I got I’ve got just so many articles I want to get to but you know, again,
Jason Hartman 10:53
in the interest of time, we got to get to our guest. One more thing did I tell you about Foxconn. Okay, I, maybe we mentioned that on a prior show, but they’re now considering $7 billion plant in the US that could create 50,000 jobs. I mean, this Trump administration dealmaker mentality is going to really benefit wages in America. And here’s one more subtle way, I think that’s going to show up to our advantage as income property investors, we’re going to see not just those wage increases that push rents up and push housing prices up. And we all love both of those things. But we’re also going to see a reduction in this is my prediction, of course, we’re going to see a reduction in problems. Well, how do you quantify that, Jason? Well, it’s hard to quantify. It’s a soft metric. But if you’ve had to evict tenants, if you’ve had tenants short you if you You’ve had tenants leave your properties in bad condition. If you’ve had more tenant turnover than you want, well, I think you’re going to see a lessening of all those negative things. Because when that tenant becomes more financially sound, when they become more financially successful, of course that trickles down, it benefits us it or trickles up, I guess you could say because usually we’re richer than our tenants. Not always though, you know, I mean, I may well be richer than my landlord and I rent but that’s kind of a different discussion. Because you know that renting your own high end home is a great deal. And having lots of lower end homes that you rent to other people is the best arbitrage, arbitrage. Always think in terms of arbitrage. think in terms of ratios and percentages, rather than absolute numbers. Think of the the way you can do that. That’s a very important thing in life. Anyway, yeah, we’ve got some great stuff coming up a couple of fantastic podcasts that are already in the can that I’ve already recorded. Those are coming up. Inventory. Listen, we have heard it from you inventory, we know it is scarce. We are always always trying to solve that problem. Go to Jason hartman.com. And check out the properties there. Ask your investment counselor, if you don’t see what you want on the website. If they can get it for you, they may well be able to do that. But again, inventory is a constant challenge in a market like this, not only because investors are buying up properties, like crazy, and they’re throwing money at Real Estate like it’s going out of style As the old saying goes, but also because we just had our meet the Masters event and there a lot of sales come out of all of those events whenever we do them. We do ask our our providers, our local market specialists to withhold some properties for the event. And then people buy them all up. And then there is a little bit of a lull in inventory. So you’re gonna see that changing and improving too. But yes, inventory inventory inventory of properties for you to buy. That is the name of the game for us. It’s a huge part of our business. And it’s something we are working on every moment of every business day. So you can be confident of that. But anyway, in either case, let’s get to our guests. And let’s talk about key please. So that is actually the name of the company. And you’re going to like this interview, you’re you’re just going to see this empowerment. And that has been the theme of our meet the Masters events for the past couple of them, investor empowerment, putting the power back in your hands, the investor rather than that power being in some fund manager, rather than that power being in the hands of some property manager. We want it in your hands. Remember, you’re listening to flashback Friday. Our new episodes are published every Monday and Wednesday. This was the era of disintermediation. And that’s one of the themes of this interview and this entire concept of self management. So let’s listen in.
Jason Hartman 15:29
It’s my pleasure to welcome Adam Lorenson to the show. He is the Chief Product Officer of an innovative company called key please. And you know, on prior episodes, we’ve talked a lot about self management and what I believe is a revolution. Many years ago, if you told me that I could self manage a property from thousands of miles away. Without a property manager, I would have told you you were crazy. But I did it successfully. I’ve done it successfully several times. And many of our clients are doing it as well. In fact, we have an entire course on self management. And there are some innovative companies that are offering some technology and some new ideas on way to do that, and ways to do this. And I’m really excited to dive into that today. Adam, welcome. How
Adam Lorentzen 16:12
are you? I’m well, thanks for having me. Jason, good to have you on the show. So tell us what you do. And what is the unique selling proposition behind it because I think it is pretty unique. Well, one of the things we do is we help you manage your property for people that are just getting into this with you know, one to five properties, that there’s a lot of things you learn, and we’re trying to speed that process up. And we’re also flipping the script. We’re changing the way that that the leasing sales process is handled. We like to let the renter the prospective renter do as much work as possible. And and really, they’re gonna move at their own speed anyway, so we try to just get out of their way and let them go for it.
Jason Hartman 16:51
Fantastic. Okay, let me just interrupt you for a moment because this begs the question, what is your background and the background of the other you know, founders of this company, I mean, were you all in the traditional property management business before? Or are you in that now, I know that you did work with one of our local market specialists in the past. Just give us a little, you know, context here. So we understand where you’re coming from.
Adam Lorentzen 17:14
Cool. So our CEO, Dinesh, he does own a few properties. And the guy that he was using to manage his properties, which is Daniel, who is our operations officer, they have a really good working relationship. So we’ve got kind of the property owner covered. We’ve got the property manager covered. And I’ve been in tech for the last 12 years. I do a lot of apps and prototyping. And when Dinesh came to me, he had all this work to do because his wife was out of town. And he was kind of coming to grips with the fact that some of these properties are a little difficult to manage, and communication and scheduling. And so I was like, we can totally automate this. We could we could make something really special that give people what they want. And then we ran our ideas by Daniel and he said Hey, this is how I do it in real life with people and paper. But I think what you’re doing with automation would be way better I want in. So So that’s kind of how we started.
Jason Hartman 18:10
So key, please is not a property management company, is it?
Adam Lorentzen 18:14
No, it is not. It’s just a tool set.
Jason Hartman 18:16
Yeah, a tool set. Okay. So
Adam Lorentzen 18:17
tell us about the tools if you would. So So we have three tools. We have a marketing tool, a showing tool, and a leasing tool. And they all work in concert with each other. Our marketing tool lets you go to apartments, calm or Zillow will help get your property syndicated on all of these listing websites, and then when the leads come in, we we take those leads and automatically put them into our pipeline. And we say, hey, instead of reaching out to the landlord, why don’t you just download our app, go see the property. And then if you have questions, and then if you want to lease, we’ll, we’ll help you get there. So all three of those things, the three different tool sets kind of work in concert. And once they get the app they can record West key, as long as their GPS coordinate of the unit, they can, you know, put the number into the keypad, it is a keypad lock, and they go in, we get notified, the landlord gets notified that there’s been a tour, we track them for 20 minutes. If they haven’t locked it in 20 minutes, we kind of, we send them a text message and ask them if everything’s okay if they need help. And then once they’re done, we asked them, Hey, is this still in your list? Or, or do you want to, you know, do you want to lease or do you want to leave it? And and a lot of people respond really well to that actually.
Jason Hartman 19:33
How old is this company? And how many like, I guess users do you have our customers do you have?
Adam Lorentzen 19:37
Yeah, we started last March. And we we started actually prototyping and discussing and then we launched our software in September, when we on boarded for property, I mean for properties. I think each of them had two to three doors that we put our locks on and set them up in the system and
Jason Hartman 19:57
so you had like 12 customers Yeah. Yeah, I love that story because it’s like the story of Federal Express when it launched, you know, like they shipped like four packages the first day, with, with jets waiting on runways. And
Adam Lorentzen 20:11
it’s been crazy because we’ve had people touring like prospective renters. We had them touring on Christmas Day. We had them touring at 6am in the morning, and we would text these people and say, Hey, you know, we noticed you came at six in the morning, you know, how did you like the apartment or like, Oh, I just wanted to see it before I went into work. And I’m like, how many landlords would have done that? How many landlords would have woke up that early? You know,
Jason Hartman 20:33
this is what I absolutely love. See, this is the concept and it’s an amazing time to be alive, as I always say, and this is, you know, another part of what’s called disintermediation, right? You get there are so many thing ways. Now look at you know, I was in the traditional real estate business for many years, I had a traditional company in Southern California sold at Coldwell Banker and, and you know, realtors certainly provide some real service. There’s no Question about it. But a lot of times they just get in the way. And the same is true with lawyers. And the same is true with so many other things in our economy. And you know, the tenants would prefer to just do this themselves, they would prefer to just go when they see a property, boom, they want to go now, you know, in the in the realtor is not available, the property manager is not available necessarily. So that that’s a great thing to disintermediate in that way. But you know, be really candid with us be just extremely honest. Look at every business has problems. Every every idea has flaws. I would assume that you have some problems with this, right? Do people leave the doors on lock the lights on? Do they fiddle with a thermostat, you know, not flush the toilet? Well, you know what? I mean? There’s some problems here. You know, just be really candid about that.
Adam Lorentzen 21:51
Yeah. So one of the things that that actually surprised us was, how little of these incidents that we ran into, we had one person that couldn’t figure out how to relock the door. They the instructions, I guess maybe they had a harder time reading them. But But we were able to call them and reach out to them. And then one guy think left a bag like a like a, like a food bag or something. And, you know, we saw it and we were like, Oh, well, you know, we know who left it was one of these four people. But But luckily, there was no date, there’s been no damage to any of the properties. There. There hasn’t been any like no one’s mess with thermostat like most people come in and leave. And it’s it’s actually been very surprised. We haven’t had any problems yet. So we’re I guess we’re looking for those but we haven’t had. Okay, so how many users or customers do you have now? I mean, you launched really in September, it was the software launch, I guess. Yeah. Tell us what size business this is. So we’ve had so out of the four property owners that we have. We’ve had probably 150 tours among the four properties over the last from November to December, which we thought would be insanely slow. We thought there’s no way people are going to come but We’ve been very surprised that during the holiday season, people wanted to go tour. So we’ve had 150 users go through three leases signed. And one of the properties is still on the market. But I, you know, just kind of that time of year, you know, we’re just
Jason Hartman 23:14
slow are these apartments or single family homes? One of them is a single family home. The other ones are apartments. We have no discerning, you can pick any property you want. So it’s really who wants it. All right. Take us through more of the process. You took us through the physical showing. So basically help people put the property on the rental market, syndicate the the listing of that property on Zillow and the other rental websites. And then the inquiries come in. How do they come in? Do they come in via phone, email, all of the above? What happens there does it and are those fed through your software platform? Are they like direct contact with the owner in the old old fashioned way?
Adam Lorentzen 23:58
Yeah, that’s a great question. We actually take both accounts in, in stride, I will say, if you get the contact form on Zillow or purpose calm, it automatically comes to us, we figure out which unit you’re looking at, we reach back out to you through whatever contact information you gave us. And then we get you in the pipeline. If someone does reach out to you through a phone, or maybe they stop by if you have an office, and they just stop by and want to chat, we give you the ability to put their phone number or email in the app, and then it will put them through the pipeline. So we handle both accounts.
Jason Hartman 24:33
Okay, fantastic. So what else happens?
Adam Lorentzen 24:37
So then, once they they sign up, it’s a very quick signup process. They give us their a photo of their state ID, and their name, their current residence and their phone number. And then we provide an identity verification service. And if they if wastefully, we feel like they’re an actual person, then we allow them to progress to the point where they can get a code for the door. And then that, you know corresponds with the door code that the landlord gave us when they put installed our keypad lock on their door. Okay, and is this a permanent lock? Is it a lockbox? You know, what does the owner have to do to get set up on your system. So it’s a ideally, it’s permanent. Because this kind of leads into something else that we do, we would like to help the real estate market become more flexible. Not everybody lives places for six to 12 months. And with the cost of customer acquisition being very low, we think that property owners will be able to have more of a rotating schedule. So if you leave the lock on the door, it’s a deadbolt. By the way, if you if you leave that on the door, then not only do you have keypad access, which you can change the code when the renter moves in, you don’t have to worry about lost or forgotten keys, which which I know a lot of property owners, you know, try to charge a lot of money for because it’s annoying work. But also you can recode it and then activate it back in the app when it’s ready to go back out on the market. So hopefully, you just you just can keep turning your property over and you can really get flexible stays. And we encourage renters when they’re proposing their lease, if they’re going to stay for a shorter period of time to offer more than the list price. So that way you could you could really, to six month contracts are really worth more than a one year contract.
Jason Hartman 26:20
Well, that’s an interesting point you make. Everybody wants longer term tenants. In fact, we recommend, you know, being with since most of our clients are in the traditional system, right, which we are trying to change. We recommend that people when possible, signed two year leases, many times with escalations for the second year written into them in advance, but we want to minimize tenant turn. And what you’re saying is because the friction of releasing a property that friction is is lower in your system, that you can do shorter term leases because you don’t have to pay at least up But you’re gonna have some vacancy in between because you’re not showing a house that’s occupied. I mean, there’s no way you can allow strangers to walk through an occupied house, even if the tenant would cooperate and give them a key, you know, basically a key to their house so that that’s not going to work. So you’re going to have vacancy in between I don’t. I, you know, it’s an interesting concept. And I just wanted to point that out. But in practice, I don’t know that it’s really gonna work because it
Adam Lorentzen 27:27
so hear what you’re saying. The fun part for us is that we’ve been able to watch especially in St. Louis, which has a very slow way, one of the slowest growth, growth rates in the country. We’ve we’ve watched people hold out with empty units just sitting on the market because they’re waiting for that one year lease to come in. So so you want to wait two or three months, okay, like you You can do that, but you’re just losing money. So our hope is that, with the market becoming more flexible Airbnb, doing longer term stays, and a lot of they’re just There’s a lot more competition in the market, especially in the leasing space with Millennial renters who they are changing jobs, they’re moving all over. You know, these are things that we’re trying to help small property owners become more flexible in a market that is, is demanding that so I do see your point. But But I think as time goes on, we will see people staying for three or four months or staying over the summer, or through school and then moving on to another place. So yeah,
Jason Hartman 28:26
interesting. Okay, so, so almost sort of a hybrid between Airbnb and traditional, what actual, we’ve looked at a lot of these different, you know, electronic locks, and different electronic lock boxes. And there are services out there that we’ve discussed on the show, and I believe I’ve interviewed one or two of them that actually do this type of service with lock boxes. They basically do a part of what you’re talking about now. But what actual hardware Are you using which which lock Do you like because, you know, in my eyes, none of these little locks are quite there yet. And it’s kind of amazing that they’re not. And one of the other things is that many of them require the owner of the property to maintain a Wi Fi network all the time on that property, which, you know, I suppose that can be done, of course, but that’s a little more complex to some of them don’t require a Wi Fi network. They work through cell phones, what a hardware using and how does it work take through the hardware component a little bit.
Adam Lorentzen 29:28
Absolutely. So right now I’m getting off the ground. We’re the early innovators that have chosen to use our service. These are people that don’t mind when things are a little difficult. So we’re using the we’re using a standard keypad lock. I believe it’s the Quick Set powerful too. So it’s very inexpensive lock, but we don’t how much does it cost about 150 bucks? No, no, I think it’s like, around 80 it’s like $80 Yeah, it’s like 75 or 80. Amazon I think has the best price. But if you go into like Home Depot, it’s around that.
Jason Hartman 29:56
Yeah. And then the prices of these locks are coming down. Yeah, I don’t know that I’ve the quick site was really my favorite. I don’t think that Schlag, I think that’s how you say it. That one really wasn’t either. We saw some other ones that were more interesting, but these will evolve. Look, folks, it doesn’t have to be perfect today. These locks are getting better every day. You know, there’s, you know, the next iteration, I’m sure he’s gonna do a lot more. It would be great if the lock had a little camera in it like an ATM. So Brian’s opening it, you know,
Adam Lorentzen 30:26
and everything. So I think he would, he would like I think what we’re trying to do is that we’re trying to stay off of this sort of Wi Fi or cell tower band. We’re actually working with a manufacturer right now we have been for the last four months to get their rotating pin lock. So this is a lock that just as synced up with a time and the codes change at a certain time. So you have a really strong security point where people can get a code, but then they don’t have the same code later. They can’t give it to them.
Jason Hartman 30:55
It’ll give them like a window. Right? That’s where you know, I could assume, I mean, get That’s a good idea security wise, but giving them a window also becomes an administrative hassle if they, you know, if they decide they’re going to come later. And as long as that’s automated and you don’t have to deal with automate,
Adam Lorentzen 31:10
you just request the key in the app. And we let them know this as a temporary code every time they request a key. So that way, if they want to come if they want to tour the property four times in one day, bring their mom bring the roommate, we encourage that, that that is just them emotionally getting attached to the property, which will make it very hard for them to walk away. Absolutely. Not.
Jason Hartman 31:31
Just a reminder, you’re listening to flashback Friday, our new episodes are published every Monday and every Wednesday.
Adam Lorentzen 31:41
We’re not trying to be a big crazy tech company. We’re trying to use very, very simple tools to help you do something simply it wouldn’t be very fair of us to ask you to install this crazy network with a hub, you know, to sell a property that could go in two weeks, and then you have all these tech hassles. And now there’s tech support. We’re providing Marry simple locks that do a very standard job, but also provide a high level of safety and security.
Jason Hartman 32:05
Okay? So anything else you want to say on the actual physical, you know, we’ll call it showing or virtual showing of the property where the tenant goes, they see it, they like it. They decide if they like the property, and what happens next, you help them approve the tenant and actually lease the property.
Adam Lorentzen 32:22
Right. So one of the things to kind of cap the showing off is we let people give anonymous feedback, to say, like, Hey, I liked it, but the unit had a really weird smoke smell. And we do this anonymously, because if the person does end up wanting to lease, we don’t want any negative comments or criticisms of the unit to track with them. So we’re trying to build an unbiased system. But we’re also wanting to give landlords you know, our property owners the ability to see critical feedback on a property that they might not be able to see. But but once they’re done, we basically asked them, What did you think about the property? Is it Do you like it or not? And if not, we Say, Hey, cool, thanks, we’re going to remove the listing and you’re not gonna be able to go to it again. But if you like it, we would consider proposing your rental terms to the property owner. These are things like when you want to move in, if you’ve got pets, you need parking. And it’s basically like a really well crafted email that we keep in the app that can go back and forth between both parties. Ultimately, the property owner will need to, you know, have a finalized contract that they get a signature on. And over time, we would love to build that into the app. But everyone has been happy so far using the regular paper process. But but the negotiation is handled in the app and you can really go back and forth and and get all the cards on the table from the get go.
Jason Hartman 33:43
Very interesting. Okay, what else do you want people to know?
Adam Lorentzen 33:47
Really this is for these are for. These are for property owners that that really want to leverage their passive income that want to have more flexibility and how you They manage their property. It’s not for everybody. Some people want total control, they want paper, they want phone calls, they want to be there with someone, even when they don’t show up, and they’re, you know, they’re just sitting in the parking lot. You know, anybody that wants flexibility and leveraging passive income, that that’s kind of who we’re targeting, and we’re hoping to help them grow with us. And, you know, make it make leasing so much easier. And
Jason Hartman 34:25
is it purely on the lease side? Or are there any tools for ongoing management?
Adam Lorentzen 34:31
Yeah, so we we’ve talked, we’ve had several people ask us about having a simple way in in the app to say, hey, my refrigerator is broken, or I, you know, they’ve got a leak somewhere. And we actually put the contact details in the app. So it’s not it’s not like a super official management system, but it’s a very, very low key way to reach out to the property owner, when there are issues. So we think that there are a lot of people out there doing really great property management stuff. Where we don’t feel like we need to compete with them. We think we’ve got a great tool from when you get a lead to getting a signed lease. We feel like that’s our sweet spot. Okay, fantastic. How much do you charge for all of this? We charged 4.97% of the lease total. So if you, so it’s $1,000 a month and you get a 12 month lease total. That’d be $12,000 for the year, and then 4.9% of that, which I need to I should have done math better.
Jason Hartman 35:26
Okay. So basically, what you’re doing is you’re taking like the sort of somewhat typical property management fee of about 10%. And saying that, that you’re charging half of that, but the real difference is that you don’t have I suppose, I hope any of these, what I call garbage fees on top of their, you know, because the property manager is is you know, keeping part or all of the late fees when the tenant is late which, you know, I’ve talked a lot about a flat fee management program, because I think that can make the manager predatory on the tenants And you know, ultimately your tenant is not your enemy. They’re your customer. Okay, so make sure you keep that in perspective owners. I mean, I know we like to complain about our tenants and, you know, sometimes that I heard these rants from people, oh, they’re so immature, you know, they can’t handle anything, whatever, but, but ultimately, that’s your customer, okay? And you got to treat them well. And they, you want them to be happy with the property. So they’ll stick around. So that whole lease is signed and say it’s for $12,000 for the year. And then you take, you know, 4.97% use, which would be
Adam Lorentzen 36:35
like 500, like around like, maybe 555 60 somewhere around,
Jason Hartman 36:38
okay. So you take, you know, 500 bucks somewhere around there. But, you know, a lot of times the tenant Well, not a lot of times, but sometimes, you know, the tenant won’t finish that lease, right? They might move early or something like that. You know what happens in that scenario, I mean, your prices are a lot cheaper than a traditional property manager. So that’s great, but Sometimes the tenant doesn’t really stay for the whole lease or many times they stay longer to do you know, if they renew for a second year, do you come back and ask for more money? Or is Are you done? Right? So,
Adam Lorentzen 37:11
what we feel like that scenario is an outcome of people wanting to get long term renters who actually don’t want to rent long term, people who in their minds know they’re only going to be there seven months, but they’re just agreeing to be there for 12, then I’ll just work out a way to, you know, not tell my grandma died, or I gotta, you know, my job’s moving me. But what we think a lot of the issues stem from how the leases are actually constructed in the beginning. And so, to answer your question, more specifically, we we can take an upfront fee, or we can let you pay monthly. We are big fans of the monthly fee, because we that means we’re making money when you’re making money. So if you’ve got a five month lease and you want to pay us every month, because you’re concerned they might leave, that’s great. We’re perfectly happy with that. If you want to pay us up front so that you can you know, get it out. Have your hair and not thinking about it again, that’s fine too. We want to be as flexible as, as we’re helping you be
Jason Hartman 38:06
fantastic. Okay, so we got to wrap it up. But just any final thoughts on this, you know, and maybe also include where you see it going in the future. You know, I’m sure you’ve thought of a roadmap of all the stuff you want to do. And you did allude to some of that here. But, you know, just final thoughts.
Adam Lorentzen 38:23
So I think where we want to see a small property owners being able to go is in big places, we want people to be able to purchase one or two properties and then go, Oh, this is easy. I could do more of this. And and in the future, you know, helping maybe the renter side providing, you know, renter’s insurance or for short term stays, maybe there are people that really want to get into an apartment, but it’s it’s not going to be available for a month. And so helping them find a place that with a landlord that’s like, Hey, I, I haven’t been able to, you know, lease this property or I’ve got a property that I do Airbnb. On the weekends, but I wouldn’t mind giving it up for a month for someone to kind of, you know, stay. We want to provide great flexibility for renters and property owners. And that’s really where we see the future going. It’s just being like a really awesome system for flexibility.
Jason Hartman 39:15
Fantastic. Good stuff. Well hate. Thank you so much for sharing this. I really think this is going to become a major part of the industry. I think it’s a great thing. You know, I’m just all about freedom, frictionless markets and power to the people. And I think the way property management has been done is really old fashioned. It needs to change property managers, and some of them are doing it. You know, they need to offer Allah carte services because sometimes you need some help. And you know, why can’t you just pay for this one thing? I mean, this is happening in the legal industry. They call it unbundled legal services, where you can just hire a lawyer for one little component of something rather, you know, why do you have to hire the lawyer for the whole thing? This is this is great. It’s really the way it has to go. So I thank you for sharing it. We’ll have more information. In the shownotes, and we look forward to seeing this, this kind of thing really grow. So thank you. Thank you so much, Jason. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.