How A 100-Door Company Quietly Took Over 900 Doors And Kept Clients Happy - with Darus Trutna

We unpack how a 100-door company quietly absorbed a 900-door competitor, kept churn low with continuity, and then modernized operations fast behind the scenes. We also dig into remote leadership, stack minimalism, and where AI truly helps property managers today.

• continuity-first acquisition strategy to protect trust
• internal overhaul to digitize files and unify workflows
• fewer logins and deeper use of core software
• shared inbox inside Gmail for team visibility
• remote culture built on weekly huddles and frictionless contact
• AI as force multiplier for defined tasks
• humans focused on undefined, relationship-driven work
• custom tools and training content with AI assistance
• focus on outcomes over features to reduce friction

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Transcript

Canyon Story & Guest Intro

Tony Cline 0:00

Welcome to the Property Management Success Podcast, where we interview leaders in the industry to uncover the secrets to profitability, efficiency, and achieving true freedom, whether it's your time, money, or lifestyle. I'm your host, Tony Klein, and I'm here to help you build a wildly successful property management business. Let's get to it. Welcome back to another episode of the Property Management Success Podcast. Today I have Darius Tretna with Rentor. Darius, welcome to the show.

SPEAKER_01 0:28

Thank you, Tony. Well, a pleasure to be here. And it's always uh fun. You're an inspirational character for your PM and your adventure spirit. And as a quick anecdote, you know, Tony, you and I had an epic cross Grand Canyon trip. And so it's it's the fun thing about the property management industry to have, you know, the work, but then also there's some good play out there as well.

Tony Cline 0:52

Yeah, I think you and I, we actually crossed the canyon back in, I think it was 2021. Uh yeah, I think that sounds right.

SPEAKER_01 0:59

Yeah, there was a group, probably what, 25, 30 people. There was a big group on the way over rim to rim, and then there was like eight on the way back on the second day. And I'll just remember that I woke up sore, beat up, tired, but I was like, I'm gonna go back. And then at the starting line, I think you and someone else just started running. We're like, have fun, guys. We'll we'll see the other side.

From 1 Door To 100 With Tech

Tony Cline 1:26

Yeah, when we broke off, I think we broke off into a couple of smaller groups. And and uh yeah, one of my pacers that usually paced me in my 100 and 200 mile races, he was there to just kind of help do some camera work and and help, you know, just get people across the first way. And then we decided it was time for us to to run back the second way. But that was a great experience. That was the first time I think that it was it was either the first time that I met you or the first time that I really got to know you. And uh and I think that one of the reasons why I've stayed connected with you is because you are you are fascinating in the way that you run your business, and you you took on something that I think that most people would not have even dreamt of doing. And you were a smaller company that basically swallowed a bigger fish. Yeah, and went after. And so before we jump into that, because I think that's really fascinating, just tell us kind of how you got started and what market you're in, and we can kind of drive from there. Yeah, sure.

The Undercover Boss Acquisition

SPEAKER_01 2:25

Well, so for backstory, I'm from a little town, Eureka, California, which has a population of 30,000 people. So we're a very small market in Northern California. It's about a six hour drive north of San Francisco, and then it's another two and a half hours to get to Oregon. So we're the true Northern California. And uh I'd grown up, you know, some light exposure to to property management because my parents had some simple little rentals that they they owned and had a manager for it. So I wasn't involved, but just was saw it indirectly. And so I'd come back from the army, had some money saved, been overseas, and so I bought an investment property with a friend of mine and rehabbed it. We're gonna sell it, and that did not work out. So we ended up but just putting it on the rental market, and then I was building out this tech stack back in the day, it was building, you know, so you're doing the leasing, the counting, the maintenance, everything. And I had one property and this full tech stack. And so then I thought, well, gosh, my friend's mother's sister has a rental and just started kind of exploring that track because there's so many connections of people that have them that are either self-managing or just are unhappy with it. And so got licensed, grew it to about a hundred doors just organically, just from built-relationships and just outbound communication and BI and rotary and the classic stuff. And so we were growing pretty quickly. And then uh to your point about a big fish, there was a company in our area that was kind of the dominant name brand, not necessarily the most respected or had the highest reputation, but just known because of their scale and history. And uh, the owner of that business reached out and said, Hey, Darius, would you be open to lunch? And I told my business partner, I said, I'll bet you he's he's right looking to retire. He's looking to exit. And uh we had lunch and it was exactly that. We said, Daris, uh, I've seen what you're doing. I think it's great, your energy, you know, passion for it. I'm looking for an exit strategy. And so it took us a while. It took us a couple years to kind of finalize the structure and it ended up being because I was 100 units and they were eight, nine times our size, that we did an undercover boss where I actually worked inside the business as an employee. And what we did is we merged the two companies. And it was kind of in a sense, from the public's percep perception, it was just that, well, this bigger company had acquired a smaller company. But that was our little secret. It was the small company coming in for the bigger company. But realistically, to go from 100 to 900 is a big jump. And so it made sense to be on the inside of it and to meet the people and to learn it. And so pretty quickly the team was like, why is Darius working here? This seems weird. It's just it felt odd for a lot of people. And so they kind of had some suspicions. But we actually worked together for about a year and then had an announcement to the team that I'm gonna be taking over. And and uh then it was outward, you know, announcement to the clients that there's been a sea change and a new ownership. But same phone numbers, the same property managers, and and um it was actually an incredibly fortunate and lucky uh experience, you know, and we'd worked hard. I mean, I'd actually literally walked into every single property management company months prior. And said, hi, I'm Darius, new property manager here. If anybody's ever looking making a change, I know we're gonna have clients going back and forth at an individual level, but at the business level, I'm happy to talk about where you're going. So we kind of planted the seed initially. And so yeah, it was an epic journey. Obviously, some um highs and lows and cleanups to do, but it was a huge accelerator that was I'm very, very grateful for the previous owner and the team and we had very little loss. Whenever I hear people talk about acquisitions and like expect like 30% loss, I'm like, what do you how? I tell people it's like if you're gonna acquire a portfolio, be aware. I mean, there's there's there's uh definite advantages to organic growth, but if you're acquiring a portfolio, just business as usual. Don't shake it up, don't scare clients away. So long story short, yep, went to 100 to now we're over eleven hundred just from additional organic growth, and it's been a uh a great journey.

Retention First: Business As Usual

Tony Cline 6:49

A couple of things that stood out to me what you talked about. The first one is from what I know about you, it does not surprise me that you had a complete tech stack when you had your first property. And we'll get into your passion for tech and what you've been able to do inside of some of your software. So that's the first thing. But the second thing that you said, you know, there are a lot of people that are trying to figure out how to grow right now. I mean, especially this time of year, people are looking at their annual goals and kind of forecasting out where they want to be at the end of the year and things like that. And and there's a couple of ways to grow. One is organic, and the other one is let me go out and do an acquisition. And you're right, a lot of people make the mistake. And I we actually did this too when we did our home vault merger and we we went into different markets. We thought that the public was going to be excited about the fact that we were taking over this business. And so we were quick to rebrand, quick to lay out our new management agreements, quick to do all of these things, combined phone numbers. And what we should have done was, like you said, business as usual. And then if they're if they're already working with you for a year and you say, Oh, well, this happened a year ago, like we we're announcing it now, but you've already been through the transition, you've been experiencing the new company, the new service, and it's it's exactly what you would expect, then you reduce the churn. And and so that was one of the big lessons that we learned from doing that. I'm curious, are there other lessons looking back now? If you were talking to somebody else that took you to lunch and said, Daris, I'm impressed with your acquisition and how smooth that went. What were either some of the things that really worked for you, or what are some of the things that didn't work that if you were to do it again, you would do it differently? What advice would you give to them?

SPEAKER_01 8:42

Yeah, no, I and I I, you know, just to preface, you know, I just want to make sure everyone is clear. I have one office, one location, a small town. So I always want to preface it like aspiration is multi-state, big, but you know, I always be careful about advice, you know, just to make sure we know where we are. But 100%, if someone said, hey, I've got this opportunity for an acquisition, I've got uh uh uh you know uh a letter of intent signed, we've done our due diligence, I think we're gonna be moving forward. We have our purchase agreement, we have a timeline figured out. What should be our operational and communication strategy? Well, there's communication strategy we talked about. Little. Now that's that might be controversial, but I'm saying that a letter to the client is basically saying, hey, there's a new owner, but the number is the same, your property manager is the same, we're gonna be operating the same, your owner statement's gonna be the same schedule. Just making it clear in my experience that the communication is just about continuity, that they're protected, they're safe. This isn't some uh fly by night thing happening suddenly. This is just a continuity. So that's a big communication thing, and just reassurance in that. On the operation side, that's where we made some mistakes. In hindsight, I would have moved a lot faster internally to change. And what I mean is that in a lot of our, and this isn't gonna be true in the coming years, but in a lot of older businesses, it's very paper-driven, filing cabinets, processes that are just very manual. And I was hesitant to I kind of wanted to like really know the lay of the land. And I was there for a year, but even then, uh, there's a lot of just organizational momentum. But I would say that if you're gonna go in an organization, move fast internally to transition to kind of unified operations, get papers scanned and into whatever software you have, move faster on that because the longer you take, it's just the longer you know you're optimizing the business. And we we we just kind of we just delayed. We we should have just scanned the 20 filing cabinets and got them into you know Google Drive much faster because you have to imagine for months we're running over to a filing cabinet. This is how old the business was, and looking for like a management agreement to confirm terms just instead of having it in the software. Yeah, besides that, uh I think for the team, same concept, continuity trying to operate. We we actually took on their employees as well, uh, because you know, I had two employees and there was you know significantly more. So I think that the the overarching uh lesson is continuity as much as possible for communication while simultaneously pushing as fast as you can for uh optimizing operations.

Tony Cline 13:11

I'm curious when you did your due diligence, because this this is what stood out to me. You know, you mentioned you had two employees and you're bringing on hundreds of doors at one time. Yeah. And yes, there was a continuity, yes, you had the filing cabinets that you could go look into once once the business was yours.

unknown 13:29

Yeah.

Tony Cline 13:30

But when somebody's looking to do a purchase and they're looking at how do I know that I'm actually getting what I'm paying for? And I can imagine the the level of due diligence that you would have to do on that many properties. And with it being paper-based, like did you guys just kind of roll the dice and say, I hope we're getting what we're getting? Or was there like it's definitely a concern? Yeah, what was the process like for there?

Running California Ops From D.C.

SPEAKER_01 13:58

Well, so it it the reality is at that scale, it's true. We did not verify every single property. And and I think that maybe a more responsible person would, but uh, we did spot checks. I think we probably did, I'd say we probably verified like 100, maybe 50, where we actually got a property directory. We actually verified the file for each one. We verified there's a PMA property management agreement, we verified the rental agreement, we verified the terms, visited the property. So we did do reviews, but it's similar to any audit where you're not doing a fur, we didn't do a true forensic deep dive because yeah, the the labor involved in that would have been massive. And overall it worked out maybe we're just lucky, right? There wasn't uh fraudulent activity in the company. But yeah, I'd say if if anyone were exploring an acquisition, definitely get the property directory. And then if you're checking us, you know, a good percentage of those, it just gives you confidence, right? No, no matter you know, if you're auditing anything, you just do if you're auditing a 500 things and you check 20 of them and it's perfect, that doesn't guarantee that the entire portfolio is dialed in. And there's definitely wasn't. I mean, this is definitely a scenario where you know tenants are being added or moved, and we can't find the addendum, right? There's you're you're going in, you know there's going to be messes. I think that the reality, I'd be impressed at any property management company that has perfect, perfect everything. We try to be as close as possible, but um, there's a lot of complexity moving parts. So so yeah, it's just a percentage audit, is the goal. Sure.

Tony Cline 15:38

I think there's a lot of companies out there that still, even without acquisitions, even at a low door count, still have issues with they can't find a lease, they can't find a management agreement. So exactly those issues exist across the board. I want to shift just a little bit because I I think it's fascinating. Again, your story just is so unique to me for what I hear in the marketplace, where smaller company takes on a bigger company, absorbs it, the way you did it, the way it was structured. But you've now done something else. You mentioned that your property management company is in California, but I want to talk a little bit about where you are currently located and how you're managing the business from where you are and where the company is.

Culture For Hybrid And Remote Teams

SPEAKER_01 16:27

Yeah, yeah. And I think that's a another fascinating and interesting topic and something for us all to be grateful for that with that folio, building, rent vine, whatever you have, and other tools. Outside checking that the keys work at the door, I mean, the significant percentage of our operations now are screen-facing, right? Um, and so yeah, my company is in uh Rentor is in Northern California, and I'm currently living in Washington, D.C. My wife was nominated for a position here, and we made the adventurous decision to do what we call a deployment to DC. And uh it's been fascinating. We brought our brought our daughter and our pupper and living in an apartment uh a block from the national mall. And so it's just an incredible experience. But on the property management side, I remember in in related to remote work. Uh in I think it was February 2020, I I had a I just woke up and I was like, you know, we really should have uh complete remote capability for everyone in the office. And what what brought it to mind is that there had been fires and other issues in Humboldt County. I thought, well, there might be a scenario where we can't access our office. And so it became a really big intention to have virtual meetings, to have everything accessible to the team, once again, absent the key. The key is the key. That's the key we haven't solved yet. And uh a lot of properties, it just doesn't quite make sense to transition to a digital uh lockbox because that would be the most epic solution. But we transitioned in in February of 2020 to video meetings. So we moved our weekly meetings to video. So even if you were at home or at the office, it's the same experience. And so for me to operate in in DC um works because of technology and tools and our culture. But also I'm very lucky I have a business partner who's the boots on the ground. So I I can't we can't say technology is the solution. It's like, no, you need to have a solid, reliable, trusted partner if you're gonna do this. And that is the harder part, right? The tech is there, anybody can get it. Having someone that is your battle buddy, right? That that really is what makes it work.

Tony Cline 18:47

Do you think it has to be somebody at that partner level or just somebody that you trust? Can you build that level of trust with your team members to be the boots on the ground, the eyes in the field?

SPEAKER_01 19:02

I think that it very much could work if you had a trusted employee. And we know this to be true because there's scenarios where both of us are in a town for a week or two or three. And so that happens and that works. And so I think that yes, um, what you need is to have competence and caring. And competence is knowing the job, it's knowing the skills, the laws, and then actually caring how the owner experiences that or the resident experiences and caring what it looks like when you off walk in the office, right? And so as long as you had an employee that had competence, they know how things work and they actually care. Yeah, you could do it with someone local for sure that was just an employee, which is part of what I think is gonna be very interesting evolving over time, is you know, how we structure teams. That's a whole other discussion on agentic AI and team members and all that. But yeah, back to the question 100%. I think that this could be if it was just me and my team, I think we could still pull it off. I think it's better to have someone who has a really strong sense of ownership. I think it's it's gonna be hard to hard to Yeah.

Tony Cline 20:13

One of the things that my clients, when they come to me and they they talk to me about leaning into remote team members and building the remote team, one of the things that that comes to mind for them is it's different when you're remote than when you're all sitting around an office in how you have to be intentional about building out your culture. And you know, if you have three or four people in the office and then you have one or two people that are remote, the only window into your company that they have is when you're on screen with them. Otherwise, it's just software. And it it's if they're working in Building or App Folio or Rentvine for your company, and that's all they see, well, they could be doing that for any company that uses that software. So what ties them to your company is how you indoctrinate them into your culture, how you bring them into making them feel like they're a useful part of the team that has purpose. And and so I'm curious, have you have you had to do anything different now that you are also remote to keep your culture together? Do you guys do anything to emphasize that, or has it just been at that level where now that it's at that level, you're able to maintain it? Is it work or is it sort of status quo?

One Stack Mindset: Fewer Logins

SPEAKER_01 21:33

We've been really intentional about trying to have tools and a culture that makes people. Feel like they're they belong, you know, and that they're they understand who they're working with. A simple example of that is on our weekly huddle, there's typically 18 of us on the Tuesday huddle. And one of the written agenda items is going line by line each person. And they they are basically required. This is this is uh you know not optional. You need to share something fun from the weekend or from the last week. And so it's just those little things like that where you're hearing about someone's birthday party, or someone went on a little trip, or someone caught up with their grandma, or someone has a recommendation for a movie they saw. And it's kind of it's basically the equivalent of the the uh you know water, you know, chat room, right? It's just those little things like that of trying to give people a sense of who the people are increases trust. And I think ultimately when the rubber hits the road, what we're talking about is if something goes wrong in the company and there's a friction point, if Tony, you and I, there's a friction point, and you see some file and you're like, Daris, the where's the rental agreement? What's going on here, right? Because we have you heard about some movie that I watched. As idiotic as that sounds, you give me the benefit of the doubt. You have something beyond the work. It's not just a tactical relationship, it gives grace to each other because, like, oh yeah, this is just a person. And so I think that's a big focus for us is just accepting that we're real people. So one weekly huddle, I highly recommend just some sort of personal anecdote. We have 18. Yeah, if you're at 100, might be a little much. Um, and then I I recommend making interactions really frictionless. And what I mean is that to initiate this podcast, it was pretty frictionless. We went in, we had a portal, I put my information in, easy. But to have a meeting at Rentor is even less. You literally just show up. There's no logins, nothing. So we use a tool called Rome and it's a little virtual office. And so everyone has a little virtual space. And you can just walk in to someone's office or walk into a virtual meeting room. And so I think it's a big focus is one culture, just some sort of personal status awareness. And then two, for interactions, how do you make them as frictionless as possible when you're in a screen environment? And there's lots of tools for that. I'm not recommending anything, but we've we've been enjoying using Rome for probably six or seven months now. And no tools perfect, but it's nice in that, you know, Tony, if you and I work together, I would literally be able to see your little avatar. And if you're on a call, it lets me know. And I can just click on your room and you'll get a knock on your virtual room. So it's things like that that simplify the they they cut out the the hesitation to communicate. You want to be really easy to talk to each other. And that happens obviously naturally in a physical office. You need to replicate that in the digital realm.

Tony Cline 24:57

I want to keep this conversation going on the the tools and technology because again, um, I just think you are a fascinating character by the way you run your business, by the way you set the culture. Also, you are one of the most technically inclined people that I know in the property management space. And we've we've talked about a lot of different tools. And some of those tools you discover, you investigate, and then you decide it's not for you, but you continue to push the envelope, I think, on looking for solutions. And some people will find a find a product, they'll go to a conference and they'll walk the trade show and they'll get excited about a product, and then they'll they'll say, Well, how could I force fit this into my business? Yeah, because it's shiny and exciting and somebody else is using it. And you've kind of gone the opposite where you've created some of your own tools to solve your problems. And then you said, What else do we need to be able to solve the problems that we are currently facing or take advantage of opportunities that are in front of us? And so I want to hear a little bit about, like share with our audience some of the cool tools you found, some that maybe worked, some that didn't work. But just uh I want to have that conversation about some of the cool stuff that you've been playing around with and things that you've built in your company to make it more efficient. 100%.

Gmail, Shared Inboxes, And Flow

AI Now: Assistant, Not Replacement

SPEAKER_01 26:26

And I think that's it when I talk to people about property management that are not in the industry, that's what I I use the metaphor of taxi drivers and Ubers. And I think we're still as as interesting as a lot of the vendors are, we're still in this taxi driver stage where a lot of phone calls and conf and tracking, and we don't quite have the GPS of the status of what's happening on the turn or whatever it is, right? We can't see where it is. And so I'm very excited in that I can see where we could be in three, four, five years as these tools evolve and we can get better real-time tracking and data and owner communication and tenant communication. And so part of my interest in exploring tools is just to be a witness as they evolve in that direction and then to play our own part in developing our own tools. So for Rentor, yeah, we've we've kind of poked and prodded and tested as many different tools as possible. And to your point about simplification, what we've ended up doing is just saying, you know, and this is not a pitch for Atfolio, I think that Building is still my favorite property management software, but Rentvine, all the tools, uh what I implore people is before you uh attempt to integrate or explore another tool, uh ask yourself a simple question. Have you in all integrity clicked on every single button in that software and explored every mechanism of workflow and control inside that software? Because yes, there's a shiny object over here, there's another tool that can do things, and it has a Gentec AI and all these marketing pitches. And just internal note here, uh the marketing is marketing is way ahead of the reality on most of these uh AI tools. It's coming. But uh yeah. So that's the first thing is just whatever it is, is building, rent vine, upfolio, etc. I I would for us, what we've done is we've kind of cut out as much as we can and we're trying to use every single feature. And to be honest, kind of brute force things into the tool that weren't originally designed to be that way. I'll share a theoretically idiotic example in that uh we've actually found that you can use work orders in Appfolio as a workflow tool. And you can think about it and you're like, well, what's a work order? A work order is a method of tracking a goal and the progress on that goal. That's typically to repair a toilet or a water heater, right? But if you think about it, you're like, well, what if the goal was to effectively onboard an owner? I'm not recommending this, but we've built out our entire workflow stack just using work orders. It has communication, you can text, you can email, you can have notes, you can have assignees back and forth. You can develop reporting mechanisms inside the software. So I can have reports by status, reports by assignee, right? So this is the same thing in building and renting vine is that just play with these tools. I'm not recommending doing anything, but just consider the idea that, you know, yes, lead simple is awesome. Git Apply are awesome tools. But sometimes these tech stacks that I've seen so far, they I think they actually end up adding more net time. They have some little automations in here there, here and there. But my overall concern is that they add overall complexity and time that isn't necessary. So that's a big one. I think that's a big starting point right there, is just try to maximize one primary tool. And then there's lots of stuff we can talk about that we bolted on.

Tony Cline 30:14

You hit something that I talk about quite a bit, which is every time we introduce a new login to our team, we are automatically doing damage to the team, to the productivity, to the culture, because now they have to learn how this other software developer team created what they think is the best practice. And most of the time, the people that develop software are not the people that actually need to use it. So they have a different understanding of how things should go. And so when I introduce a new login, I set my team back. Then hopefully there's enough benefit that it brings us back to neutral. And then if we're lucky, we can actually get some additional benefits. So I'm always driving home. What problem are we trying to solve? It's the simplest way we can solve that. And I think a lot of times when people are rolling out new software, they get excited about all the possibilities of the things that they could do to manage this 10% when they haven't solved the basics. They don't have the fundamentals down where we're solid and very, very good at the fundamentals. And then we can look at now that we have that layer, what else could we do to improve the level of service or improve the speed at which we do things? But they start in the wrong direction. They go and say, Well, this could make us faster. So let's introduce this new tool. But they still don't have their basics. And so it just creates a bunch of additional friction that you mentioned. We should be reducing friction for the team. Even if it remains, even if it means reducing some of the things that we actually do, we should be reducing the friction for ourselves, our teammates, and our clients.

Force Multipliers And Burnout Relief

SPEAKER_01 32:01

Yeah, exactly. Um and friction, I think, is a beautiful word, Tony. That ultimately, what is a property manager doing? They're they're reducing the friction in the life of our clients, right? The friction of having to answer a phone call or try to handle rent that's interfering with life. So, so but you think about the employees and their friction, you know, I I think that health is always a good metaphor for business and for life. And so I think that there is a lot of exciting stuff and toys and gadgets and peptides and this supplement and this thing. But the reality is that if you got good sleep, you moved a little bit, stayed hydrated, and you had good quality food, a lot of these little additional benefits are just in the percentages versus these big blocks. So I think that the big blocks for us as property managers is having a primary property management tool that you just dedicate the majority of your energy into maximizing. And then other tools like Gmail, you know, it's not 100% universal, but majority of us are using Gmail. And as an example, we've tried different tools in email management. You know, shared inboxes are a big topic, and Lead Simple has their inbox and Apply has their inbox. And those are great tools. And I actually recommend people explore them because there's benefits there. But on the concept of less logins, my aspiration is one Gmail login, one app fully login. Now we haven't fully got there yet. We still have Z Inspector and a couple other things, you know. But inside Gmail, there's a, and once again, I'm not recommending this, but as a to answer your earlier question, Tony, about cool tools, um, something to explore that we've found really useful is Hiver. And Hiver is an add-on for Gmail that creates a shared inbox method. And the beauty of it, and what I why I love it, is that if I have an email that comes in, it's from Tony, and it's just a personal email, that's just between us, it's just a project we're working on, whatever it is. That's my own email. It's in my Gmail. But if that was related to the to a client, an owner, something we want to handle, I just click a single button and that's instantly visible to the whole team. And I can assign that email from within Gmail to the team member, make a note about how I want that email to be handled. I could link it to the owner, tenant, whatever it is in that folio. And then basically what you have is you're just your Gmail inbox, but it's simultaneously your personal items that you're handling. It might be some gusto thing you got to handle, whatever it is, right? Stuff that's not for the whole team. But in line is the shared inbox items. And so it's just a really, really simple, powerful way to not have some other place to check email as well as your Gmail. So uh that's what we're aspiring to do is just Gmail at Folio and have the work where you do the work as simple as possible. So you're not bouncing around.

Tony Cline 35:07

So let's let's stay with that um that type of uh conversation here where let's let's continue to dig into the tech stack and AI. One of the things that I hear like rumblings underneath the market. So people are interested in AI, some of us are running towards it, some are afraid of it. But I think part of the conversation that you don't hear a lot about is if AI will help me do my job better and take stuff off my plate in three or four years, won't AI be able to do pretty much everything that we're doing? You know, it's kind of like back, you know, some of us that have been in this business long enough remember when Zillow first hit the scene. Yeah, and Zillow was, oh my gosh, you have you heard of Zillow? There's this great tool, they'll market your stuff for free, and all of a sudden they are now they've taken over to the point where they're selling you back your own stuff.

SPEAKER_01 36:14

Yeah.

Tony Cline 36:15

And I think that there's this conversation that needs to be had of if AI can replace people and replace things and tasks, and agentic AI can actually do things. You and I are not big enough. We don't have enough funds, we don't have enough manpower to compete with companies like Zillow or some company that's not even been introduced to our space yet to come in and go direct to consumer. So number one, where where is AI? Do you think that we're at a point where AI is able to replace us as property managers, or is it to the point where it can assist us, or is it got a long way to go? I'm curious because you're one of those guys that I know is deeply involved with tech.

Build Vs Buy And Custom Apps

SPEAKER_01 37:00

Yeah, I and and um I saw a post from what's his name? And Andrew Parthy. I forget his name, but anyway, he's basically one of the AI trailblazers, helped write the original code for large language models, very involved in OpenAI and other uh organizations. And he made a post basically saying, I feel like I can't keep up. I cannot keep up. I feel like I'm on the ground floor of understanding how to effectively use these tools now. And this is the original, one of the original people driving this direction. So I just to give grace to everyone that we're all on the same page, even the highest level people of how do you effectively uh operate with it. But to answer the question, you know, for the company, yeah, I mean, if you read any report from, you know, these Morgan Stanley analysts, they'll talk about the real estate industry and they they're projecting, you know, within five years, they'll say 37% of all the tasks, you know, all the interactions, the maintenance coordination, resident coordination will be automated. There'll be agentic AI, autonomous AIs. And you're seeing all the companies move in that direction. So folio has their performer series, which we can talk about. Other tools, obviously, vendoro others are moving in this direction of having this AI. But I think that we have to remember that there is defined work, which you can write an SOP for, you can write a process and have proof of work that it was done on track properly. That's defined work. Undefined work is the relationship with the owner and them just wanting to have a discussion. Is it the right time to sell or buy? And there's a disagreement between the owner and the tenant and the vendor about some activity that happened at the property. This is undefined work. You could write an SOP for it, but an AI is gonna get to the point where it could theoretically have that conversation. But I mean, I'm talking in l in the next five years, in the next 10 years, who knows? We'll have AI brain chips and you know, but in the next five years, I can with confidence say, look, people are still very important because the undefined work is still needed. It's the relationships, it's the the interactions, the conflict resolutions, not quite there. But I think that the opportunity for all of us is to be open to embracing it as a force multiplier and not as a labor reducer. And so when I talk about AI with the team, we're not coming in and saying, oh, AI is going to do this and you're done. Of course not. It's the the idea is this is going to, for example, that folio maintenance performer they just released. This is their this marketing has gotten way ahead of the actual result. But the maintenance performer and that folio, and once again, I'm not pitching them. I'm just saying this is an example. It will uh you can click a button and it'll text the vendor requesting an update and then it'll read what they reply and ask for more details and ask for pictures if needed and attach those to the work order and then adapt adjust the status. I'm not saying this is beautiful agentic AI, but it is interacting with the vendor to confirm the status. So if it said, hey, we have this action to fix this deck, how's the status? And the vendor says, oh, well, we need some more time for materials or something, it'll respond back. Oh, okay, you need more time. Can you give us an example of a timeline you'd need? So it'll it'll reply coherently to him and add a note in there. So the point of all this, though, is that these tools are going to be a force multiplier so that your existing team can handle more volume because a lot of these base tasks are being handled. You can scale the company up and aspirationally, there's more mental bandwidth to handle those undefined relationship-based tasks, right? I think one of the challenges we have as an industry is that individual employees and owners just burn out. You're so burnt out on the defined work, the task work, the work order follow-up, the accounting, the rent collection, that when the relationship building comes up, you've you're completely drained of the capacity to be present with them. So my hope is that, and what we're attempting to do is embrace the AI, attempt to maximize its value so that we have the mental bandwidth to be present for the human interactions.

Creative AI: Content, Training, Tools

Tony Cline 41:34

That falls right in line with one of the one of our key concepts here is we talk about there's$10 an hour work,$100 an hour work, and thousand dollar an hour work. Exactly. And as the owner of the company, you you are responsible for doing the things that only you can do, and then hiring out or delegating everything else. And then your next front line down should be doing the same. And so I see AI very, very easily taking up those$10 an hour tasks, those repeated tasks. And eventually it will be able to take over the$100 an hour tasks. And so what that does is it leaves your entire team freed up to work on those$1,000 an hour tasks. And regardless of if those numbers are mentally if you can accept those numbers, it's it's the point that each time we level up and we get closer and closer to the relationship and the the interaction directly with the client and working on high leveraged activities and things that really move the needle, I don't think they're going to care if we have somebody else that is sending out when somebody does a showing and we do a showing follow-up request, I don't think they're going to care if we're pushing the button or if AI is is doing it to get that follow up. I think what they care about is do I have the trust and confidence in your ability and do you have the authority in the marketplace to be my preferred vendor, my preferred partner? And I think by using AI, it allows us to to have the time to focus on those things that inspire and energize the not just the entrepreneur themselves, but the team that knows that they're doing things that actually make a difference. Exactly. Exactly.

Focus Amid The AI Hockey Stick

SPEAKER_01 43:24

And that you know when you think about life satisfaction and feeling good and proud about yourself, a lot of that is just having a sense that you are providing value. I think we all have an ingrained human desire to be of value. We want to belong, we want to feel like we're contributing. And when we don't do that, that's where you have these really depressive cycles where you're just consuming doom scrolling, that kind of thing. And so if an employee in a company is able to be really valuable and have a direct connection with the clients, with the residents, with each other, that's going to make them feel better. They're going to feel they're going to they're going to want to stay. So I am I try to be realistically optimistic, but I think that I think we've got a bright future ahead is one potential outcome where AI transitions from being a generative AI where it just, hey, rewrite this email for me or review this contract, right? Those are all very valuable things and I I definitely recommend everybody just to keep open whatever your preferred tool is and just start throwing stuff at it. I mean Gemini is wild. You could take a property management agreement and have it create a podcast about the terms. It's not quite a good use use case yet. But the point is that as AI transitions from assistant to operator that's what we're 2026 is going to be the year you're going to really start hearing people talk about that. And there's already a lot of vendors in that space where it's not just assisting you, it's actually operating the process you know that's a full agentic AI. So there's that but I think what's also exciting is 2026 and the next coming years is that each of us is going to have a lot of power and leverage to start creating really custom solutions for ourselves. If you've ever tested out you know lovable.dev or Claude code and I'm not a coder, but you can literally just go in there and it's kind of funny. Hey uh Claude Code, research what appfolio.com is and then make me equivalent to that. And it generates a full backend software. It's not it's not enterprise grade. It can't use it yet. But it'll basically it'll make software. So I think what's fascinating is that in the coming years the pace of innovation in these software tools is going to accelerate and then there's going to be a really weird weird scenario I'd say probably on or before like 2030 where Tony you're like I want some software that does X and you'll say that and then the AI is going to be able to generate it. So I'm in the woo-woo land right now, but you know you have assistant assistant AI to operator AI, but then we're going to come into the point where we're going to have hyper personalized capabilities. So one of the things that we're doing with Rentor is I'm actively developing our own custom app, which isn't a new thing, except I don't know how to code and I'm making an app that allow owners to have their own uh I'd say a better portal than I've seen of anybody else where it'll display who their property manager is, their name, phone number, email, it'll allow them to be presented tasks, it'll allow them to do stuff and a link into their folio portal. But there's going to be fun stuff in the pipeline that we're all going to be able to create just by saying the words. Right. So that's the the the 2027 2028 2029 which sounds fantastical right now but if you go and look at these tools anyone here anyone listening you could just go and make a brand new website for yourself in five minutes and just hey hey I want you to role model this website go ahead and make it it's going to get I think very fascinating in the coming years about the personalization level of technology. So we'll see.

Tony Cline 47:09

You mentioned being able to do this going in and having technology create this stuff. I I saw a post this morning I don't know when it was actually posted but I saw it this morning and it was a post from Elon Musk saying that he believes we have reached singularity which just means that AI is now as smart as humanity and that because it's reached that same level it is actually now able to create and develop AI tools faster than we can create and develop AI tools. And so we're just going to see this hockey stick of what becomes possible. I think one of the challenges and and I want to kind of wrap up with this one of the challenges is there is going to be so much possibility that people have to get very focused on what actually moves the needle in our companies right and what makes a difference for our clients and where do we focus I think there's a quote by Steve Jobs and I'm not going to try to say it because I don't want to butcher it, but it was basically he's made more money by the things he said no to than the things he said yes to. Yes. And and something like that. And so I think that there's got to be somebody in the company that is intentionally evaluating AI tools or just tools in general. I think at some point we're going to stop talking about AI. I remember 20 or 30 years ago when well 20 when when we had the dot com boom and bust people would say well our our software is web enabled or it's powered by the internet. You don't hear that anymore nobody would say our software is powered by the internet. I think it's the same thing with AI. Eventually it's just going to be there won't be anything that's not AI powered.

SPEAKER_01 48:53

Yeah exactly.

Tony Cline 48:54

I want I want you to take us home I think this will be fun. I know you've explored a lot of tools what are some of the things that you've come across that have no application in property management but just things that you've come across that you think are cool tools that demonstrate what what AI can do. And if you don't have any off the top of my head I can share one that you shared with me.

SPEAKER_01 49:18

Yeah I'm trying to think the the not directly applicable to to property management. But either way I'm just not putting the limit of yeah I think I think that on a on a on a on a personal note like taking old photos like I highly recommend this. Take an old old photo that's going to be torn up and beat up and pop it into Gemini or Grok or wherever and it'll it'll properly restore old photos. So just on a you know side project thing there's incredible opportunity there for giving yourself kind of old legacy photos re recreated. And then one that's I don't know if I actually like it or not but you can then create videos from those. That's where it gets a little almost too much where you're like this is my great great grandfather and now he's running and doing a hurdle or something. You're like okay that's so to be honest you know I think that AI is very exciting and I'm fascinated to see where the the real use cases come in. But right now it's most of it you know it's very simplistic. There's a big pitch there's a big pitch authentic AI end to end. And then what I've seen so far is relatively simple just chats back and forth or simple motions that it takes but but what were you thinking for an example?

Tony Cline 50:31

Well there there were two you shared with me a while ago and now I think it's more popular but I think you kind of got on it when months before other people uh shared it with me or before I started seeing it. But there was a Suno which was the you you type in a couple of lines and it'll create an entire song for you.

Optimism, Next Steps, And Closing

SPEAKER_01 50:50

I thought that was uh pretty cool not extremely useful in property management but it was fun to play around with yeah yeah well and I think that you know on that topic it's like if you go to Gemini or other tools and you know you wanted to create a graphic novel for a child and you wanted to create like a custom little story about overcoming challenges, you could create a little comic for them. And I think for us as property managers for advertising, you know, creating branded content branded material is something that's also going to be helpful. And his big push for us is video editing content, just add ad creation. That's where there's uh you know specifically Gemini and nano banana is their image generation tool and you can create incredible infographics. So you could literally say hey do an infographic about Tony Klein and it would it will make like a cool infographic just Googling you, reading your LinkedIn that could be used if you were directly marketing yourself in that manner. So I think there's a lot of value in creation and each of us becoming creators in a way that wasn't possible as easily in the past. So that's what I'm working on is allowing myself and my team to to be creative and think about how we're communicating with residents and owners and is there a better way of doing this you know visually and that's where AI in the creative content creation has a lot of potential.

Tony Cline 52:17

We one of my other favorite tools that I use is notebook LM I don't know if you mess around with that but we I'll I'll upload a lot of our training materials, our content, I'll take a management agreement and then there's a couple of different ways to use that to create the podcast. I like the podcast piece not because they always get it all right but what I like about it is you can have them debate. So you can put stuff in there and then tell them to debate the pros and cons. So a lot of times we'll take training material for business development managers and we'll have them put them in there and then we'll have them debate it. We'll have them come up with objections to their services and they get to hear people go back and forth. And right now it's still more entertainment than educational because they do pull in things that are not necessarily included in the content that you upload because they're trying to make it conversational. But I but I do think it's a great tool for people to to have it open up other possibilities or different ways of thinking just like if you and I were to brainstorm some new idea that we had well I'm going to only see the things that I can see and you're going to only see the things that you can see but when we have that conversation it opens up different ways of looking at things and so that's one of the my favorite tools that I'm using right now. I think it's a great one.

SPEAKER_01 53:40

And I think that that idea of uploading content in there a PDF of your management agreement or PDF of your operations manual and then asking it to create a three minute training video about the move out process and it'll read that content. It'll create a narrated with you know graphic images of the move out process. And then also hey create me a 10 question quiz. So I think there's a lot of potential for training and engagement with the team. So we're we're in the process of integrating that into our weekly huddle. So we'll have a little mini lesson and we rotate who the huddle leader is. And so one of the tasks is going to be to create your own little two three minute just training video topic using AI and then have some questions on it. So yeah it's it's uh you know we're we're still scratching the surface on the potential for it for sure. Yeah.

Tony Cline 54:30

Well Daris this has been a lot of fun for me. I can't believe how fast this uh this time has gone so I think it's uh time for us to wrap up but I want to give you the last word is there anything that you that we touched on but didn't go deep enough or anything that you wanted to talk about before we kind of wrap up and let you get on with your day.

SPEAKER_01 54:48

Yeah no I yeah the hour flew by Tony that was a lot of fun. And you know I just try to remind myself and anybody I talk to like we can be overwhelmed with all these changes or we could be excited. And we can't guarantee the future but the the the path forward for the first time ever for our species is you know with AI, with robotics we don't want to be Pollyanish, but there's some incredible positive outcomes we can have for our businesses, for our communities that I think if we had open eyes for it would be very exciting, very positive. I think there's some some negative narratives in the news and in the communities. And I think if people kind of don't look at that too much, that's reality sure. But there's also a track that we're on right now that's very, very cool and exciting for education for knowledge for support. It's just incredible what's what's possible that's never been possible before. So I think it's a bright future ahead.

Tony Cline 55:53

I think that's a great place to to leave it. So Daris, thanks so much for hopping on and I've really enjoyed our conversation and I look forward to seeing you in person sometime soon. Yeah the next thanks for tuning in to the Property management success podcast. We'll be back with another value packed episode to help you level up your property management game. If you've got something valuable out of today's episode please share it with a friend or colleague and don't forget to subscribe and leave a review so you never miss out on future insights and strategies and tactics. Until next time here's your success