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The Dallas Dirt podcast with Candy Evans takes you inside the real estate news stories you’ll find daily on CandysDirt.com and beyond, giving you more insight, juicier details, and the inside scoop from one of Dallas’ most well-connected real estate personalities.
Speaker: I'm Candy Evans
and this is Dallas Dirt.
Today I not only have a dear friend,
but also one of the most important
people in the real estate industry.
John Corona.
Hi John.
John is the founder and the CEO of
a Socia, which is the largest home
management firm in North America.
They manage the HOAs.
Who manage us, correct?
Speaker 2: That's correct.
Speaker: As someone who's about
to move into an HOA community, I
thought this would be a great time
to talk about communities, because
that's what real estate is all about.
That's what living in your home,
in your neighborhood is all
about, is the community you live
in, and that's where it starts.
I'm so excited to have you.
Thank you so much.
Speaker 2: I'm delighted.
Speaker: Thank you.
Speaker 2: You.
Speaker: Tell me, because I've
known you for a while, our boys both
went to school together and played
football together too, which is.
So much fun.
How did you start this company
and when did you start it?
What were you in real estate?
Speaker 2: You know, I started
the company right outta college.
I, I took a, real estate and insurance
degree from the University of Texas
at Austin, from that I, went to work
for a very brief period for another
company that recruited me from college.
At that age, I didn't
know what I didn't know.
I was, a mere 22 years old
and decided I can do this.
I found one small client who had enough
trust and faith in me to allow me that
opportunity, and it all began from there.
Speaker: Wow.
Was that in Dallas?
Speaker 2: Dallas.
That's right.
Speaker: Who was that client?
Speaker 2: it was an apartment owner
from, Southern California and, it
was through, his generosity and trust
that allowed me to build a company
we built it one brick at a time.
Today we are the largest
in, north America.
We employ about 17,000 people.
We are based here in Dallas, but we have
300, separate offices around the country.
It's a real business.
As I like to remind
myself from time to time.
Speaker: Yes.
Interesting.
Well, you've acquired a number
of these communities one by
one, as you say, brick by brick.
How did that happen?
Speaker 2: it took me a few
years to figure out the industry.
The first big challenge was how
in the world am I gonna make
any money in this industry?
Community association management was
a rather new thing at the time, and
people in this part of the country
just didn't know much about it.
There weren't many management companies
of the type that we are today.
And, we began growing and the next move
was our first acquisition out of state.
Of course, with every one of
those, moments came something
that we learned mistakes made yes.
But something we learned.
The one thing that I think set us
apart was despite the occasional
mistakes, wouldn't let anything stop us.
we just decided success was the goal.
And failure was just not an option.
we looked up one day, 48 years
later, and here we are today.
Speaker: what is one of the big
mistakes you made that you learned
from that made the company better?
Speaker 2: one of themhad to do with the
acquisition of an out-of-state business.
We got in a hurry and we
didn't do our due diligence.
We didn't really check out the
people we were buying from or the
daily details of the business.
We paid the price.
Turns out that the sellers had actually
acted in fraud we were a young company
and we didn't have much money and we
certainly didn't have money for mistakes.
But once you go through it, you learn
and you don't repeat it a second time.
Speaker: exactly.
Speaker 2: But we've had things like that
throughout the history of the company.
with each and every acquisition, even
up to this dateWe learned something
we find something in that company
That we either learned from because we
never really thought of it, or we had done
the same thing years ago and abandoned the
practice though it was a good practice.
every bit of it has been a learning
experience We tried to get wiser as
we go and, we did learn along the
way the art of making a little money.
So that initial worry passed as well.
Speaker: You learned that very well.
I mean, the model is that you own,
the company that manages the complex,
Speaker 2: manages the various
homeowners associations.
That's right.
Speaker: And so you have employees,
you pay, but you also do all the,
the, the painting, the upkeep,
the maintenance, we do the lawn.
Everything we do, we, yes,
Speaker 2: we are full
service in that regard.
And we find that clients
really favor that approach.
Because of the size and scale of
our operation, we run hundreds
of service trucks coast to coast.
the clients are able to get a good
price, quality is always important no
matter who you are or what company.
we have to make sure, we're maintaining
top quality in everything we do,
because clients scrutinize those
things as they hire you for management.
They wanna make sure that the other
skills that you boast having are
skills you're capable of doing.
we train our people very well.
Mm-hmm.
Um, this company spends millions of
dollars per year training its employees.
And the one thing about training in
a service business is it never stops.
you continue to deliver that message and
the next message and you hope that people
along the way become more proficient
at what they're doing and they do.
one of the things I'm most proud
of with our company is that
our people enjoy being here.
employee morale is very
high within our company.
We've been a coast to coast national
best place to work, and so those
are the type of things we strive
for and that we're proud of.
Speaker: And that's great because you're
also a big company and you kind of rule
the roost, but you also are a very good
place to work and your employees are.
Speaking volumes about Let's talk a little
bit about community, because that's such
a real estate buzzword now and it has
changed over the years a little bit.
And I wanna go back to how it was
when you first started the business.
A community.
I mean, I remember when we got
outta college, we went to our
first apartment and it wasan
extension of college in some ways.
there was activities and there
was a pool and all that fun.
then you get older andtime goes on and
now you've got the full circle of people
entering their golden years, which
I dunno if they're so golden or not,
Speaker 2: we hope
Speaker: they are.
We hope they are.
And then they kind of come back to that.
Speaker 2: that is the very point.
it is cyclical.
Yes.
Andtime Changes a lot of things.
External factors are always involved
in how communal people actually feel.
when you look today at what's going on
and the controversy and the issues that we
face as a nation and into our communities,
we think having, well constructed,
well organized, close knit community is
probably as important as it ever has been.
And so what we're finding today is
that after coming outta the seventies
and eighties when people were a little
bitseparate and apart from one another.
people didn't necessarily
speak to their neighbor.
Todayall Of that's being
renewed in a positive way.
Interesting.
People wanna know their
neighbor, they want to connect,
they wanna find commonality.
one thing about living in
a homeowner's association.
Is it requires a degree
of conformity as well.
There are rules and regulations
that actually preserve and increase
the value of the community.
it comes with an understanding on the
part of each resident that you're not
simply in a place that is detached where
you can go outside and scream to the top
of your lungsand have nobody that cares.
It's different but our industry
surveys on a regular basis.
overwhelmingly homeownersapprove of
living in homeowners associations.
Speaker: 86% or something?
Speaker 2: a very high
percentagein the high eighties.
the only thing that ever makes the
news or the sensational story is
about one neighboreither in a dispute
with their homeowner's association
or neighbor against neighbor.
And while those situations
do in fact occur, it's a very
small percentage of cases.
But those are the ones that draw
the attention to get reported on.
Most people really appreciate
living in a homeowner's association.
Speaker: I do too.
I'm looking forward to it.
to me it means there is a quality, I'm
very OCD about my home, inside and out.
if I see something that looks out of
place or the garbage is still there
after the, I mean, get it out of there.
Get get it done, get it cleaned up.
when you live in an HOA, there's
that expectation and really.
Everyone has to do it.
you keep your property up.
If you don't, you're in trouble.
Speaker 2: you do and yeah.
But, the good thing is there's reward
for that because people do have to keep
the lawn mow and keep the junk cars outta
the driveway and keep the 18 wheelers
from being parked inside the community.
All of those things.
promote quality of life.
But our job is to, make sure
the rules are fair and enforced.
our most pressing issue is to assure
there's a communal spirit we're not just
property managers, but we are the social.
club,
Speaker: the fun.
Well, I understand that By the
way, at Lake Forest, I've been
asked to join the Mahjong Group.
Speaker 2: I'm
Speaker: gonna start
playing Mahjong, I guess.
Speaker 2: division of our
company organizes all of that.
Speaker: A whole division.
Speaker 2: A whole division organizes
all of that to assure it's our
lifestyle departmentBut it assures
that we're not only providing the
basics of property management.
Does the pool get cleaned?
Does the lawn get mowed?
But we're providing the
social calendar as well.
it's an important part of it,
but it's one of the best parts
of living in an association.
Speaker: I'd like to know how
you think that changed from
during COVID and after COVID?
wasn't it more important?
During COVID that people got together?
Speaker 2: people of course
couldn't during COVID.
But what they could do
Speaker: outside because
Speaker 2: they could call their
property manager and say, I noticed
that loose gutter over there.
Or, I noticed that door
that needs painting.
Speaker: That's what happened.
Always.
Speaker 2: No question about it.
When people went home
during the period of COVID.
Our phone volume increased noticeably.
people would call and let us know all
the things that we could do better.
and they were right.
There were things that we could do better.
our job got a little rough there for
about two years, but, today things
are more or less back to normal again.
People have returned to
work, outside the home again.
it's a much different environment, but
As difficult as that period was for
everyone, it made us a better company
Speaker: I am gonna ask you now
about communities, and you've
got a new book about this.
Speaker 2: Thank you very much.
it's the third in a series.
Speaker: in the common interest, unlocking
the potential of community, which is
such an important topic in real estate.
I mean, it's really why
people buy their homes.
People buy their home because
they wanna live in a community
or a neighborhood, and it's the
kernel of the basis of real estate.
how does the ASCIA as the large
company that it is, make sure that your
communities are functioning and thriving?
Speaker 2: Well, the single greatest thing
really revolves around communication.
It is just critical that homeowners know
what's going on, what their board of
directors, you know, in every association.
A board of directors is elected from
the body of homeowners themselves.
And those are the people that we
take instruction from and that we
report back to on a regular basis.
But it's important that that
board of directors communicate to
the homeowners what's going on.
Doesn't matter whether it's
a small project or a massive
renovation of the community.
Communication's the key.
And fortunately, we now live in an age
when social media and Facebook, allow
that to be much easier and inexpensive.
In the old days, if you would,
of community association.
You'd prepare a newsletter and
it'd have to be mailed out.
while it was a good way of
communicating, it was expensive.
using social media has really
turned out to be to the advantage
of community associations.
Yeah.
Because when people don't understand
the budget why the rules exist, or What
an appeals process might be if they
receive some sort of notice of violation.
That's when they become negative.
Upset.
And that's when neighbor can
oftentimes turn on neighbor.
Because these board members
that volunteer their time?
There's somebody's neighbor
as well within the community.
you want people to be fair and
consistent in rulemaking and rules
enforcement, but you wanna make sure
that you also are willing to listen.
A big part of a successful
board of directors is listening
when homeowners have concerns.
Speaker: Now.
We, we talk about the quality control
that you keep up, which is such a benefit,
I think, of living in an HOAs, knowing
that the grass is mowed and the trees
are trimmed and the trash is picked up
nicely, not scattered all over the place.
how do you guys keep that
quality up in your company?
Speaker 2: Well, for one thing,
we're constantly training.
It never stops.
and there are standards we provide,
specific written standards for what
landscaping ought to look like what the
quality of a paint job ought to look like.
What A parking lot that's just
been repaved ought to look like
and how it ought to be redone.
Everything has a detailed process
behind it so that the standard is not
only sufficient, but it's consistent
across all communities it's a large
operation, but the reason we're able
to keep up with it better than most
other management companies is because.
Yeah, we do have those
procedures in place.
And we do have those guidelines.
And we live by that.
and that's what we train our people to.
Our job is to make your living in a
homeowner's association as trouble
free and stress free as possible.
Now, do we always achieve it?
In every circumstance will.
Nobody could.
it's a service industry.
But I can tell you, we take
every issue very seriously.
We watch our Google ratings and work
toward the best possible survey results
and reviews from our homeowners.
we want to do well, and we want them
to communicate to us not only when
we're doing well, but to let us know if
we're not or if we've missed something,
part of the training of our personnel
came years ago from Ritz Carlton.
Ritz Carlton has a training program.
And they offer it to other companies.
we adopted the Ritz Carlton
training, methodology years ago.
to my knowledge, no one else in our
industry does that, but we did it.
we think it was a great foundation
for all of the training that's come
since that time, because as we've
grown and gotten older, our entire.
methodology as well as our library
of tools to use in training
has increased significantly.
Speaker: I love that.
We wanna do a follow up story on that.
it would be so fun to kind of
do a day in the Ritz-Carlton
training session of associate.
Speaker 2: you were to travel
around the country And go up to
one of our employees and say to
them, show me your Associa book.
I guarantee nine outta 10 would pull
it outta their pocket and show you.
And we reward them, for keeping those
Associa books handy and carrying
them with them when they're asked.
they never know when they're gonna
be asked, show me your Associa book.
But that Associa book, much like the
Ritz Carlton book, talks about all of
the service standards that we expect
and we give every employee within the
company a certain amount of authorization
to take care of a problem, period.
We don't want to be so bureaucratic.
Problems or issues can't be resolved
with going through three or four steps
of management and whatnot, We want our
frontline people to be able to resolve
as many issues immediately, as possible,
Speaker: 'cause sometimes homeowners
get frustrated if they wait too
long and that's a big thing.
Speaker 2: homeowners appreciate that.
because sometimes issues,
depending upon the size and
scale, require board approval.
Even though we're the manager, we
don't necessarily have contractual
authority to make repairs and
improvements without that board approval.
Board members, are volunteers.
They don't meet every day.
They don't meet every
week in most instances.
if you can bypass that to a limited
extent and have the authority to
just fix things, people love that.
Speaker: They love that.
let's say I'm writing a story.
about how to avoid bad HOAs.
What is, something that consumers
should look out for in an HOA that
is kind of a telltale sign that
maybe that's not a well run HOA?
Speaker 2: if I were moving into a new HOA
One of the things I would do is before I.
Completed the transaction,
I'd talk to a neighbor or two.
Tell me about the HOA, tell me
about the board of directors.
Are they responsive?
Do they listen?
Do they hold regular meetings?
Do they make available to the homeowners
financial statements on a regular basis?
Speaker: I was gonna ask you.
They're supposed to let.
Those are open books, right?
Speaker 2: open books.
Texas law requires that certain
things be available to homeowners.
Every homeowner's entitled to know
exactly how their money is spent.
Right.
And that's not just unique to our state.
That's all across the industry.
All across the nation..
and again, if homeowners
know what's going on.
they have a much greater appreciation
and a willingness to be more
cooperative as various governance
issues come up from time to time.
Speaker: Well, and that's good advice
because I have heard stories from,
people I've written about where you
move into A building, let's say a condor
or something, and immediately you're
hit with a $25,000 assessment because.
Something has to be fixed.
a really good rule, is to
read that financial statement
right before you close on your
Speaker 2: property, and most
closings around the country.
a disclosure statement is requested by
the buyer and provided by the seller that
talks about issues of the association that
might be pending, a properly completed
and executed disclosure statement.
will tell you precisely
what issues are coming up.
Is there a big roofing, problem?
Is there a.
Foundation problem.
Something of significant proportion.
Is there a pending special assessment?
It might be pending, it might not
have been authorized or approved yet.
But if it's out there in a
possibility, you as a buyer wanna know.
Speaker: And there was a horrible example
of that in Miami not too long ago.
Speaker 2: the structural integrity
of these buildings, particularly
condominium associations.
And we manage.
A great many condominium associations
across the country in New York, in
the five boroughs alone, we manage
over 1000 buildings just in that area.
all of those have, structural issues
that have to be taken into consideration.
Most, of course, are in excellent
condition, particularly, given
their age because they're
Speaker: maintained,
Speaker 2: conscientious board
of directors did the things
necessary along the way.
Doing the right thing, especially as a
property ages can be quite expensive.
But I can assure you this, with nearly
50 years of personal experience, it's
a lot more expensive if you put it off.
Speaker: Exactly.
And that is so true.
it's very much similar to being
a homeowner, if you put it off.
The termites come.
The wood rots.
It's not a good thing.
You have to take care of
maintaining your property,
Speaker 2: a result of what happened
a few years ago in Florida with that
building collapse, that's so sad.
Florida legislature has made
significant changes in the law to
assure that doesn't occur again.
Among those things, requiring building
reserves studies to make sure that each
and every association knows what its
common elements will need into the future,
and then sets aside an appropriate amount
of money on an annual basis to cover
those costs to cover as they come up.
Speaker: I know that sometimes in
the news one story comes out and it's
blown up and then that kind of sheds
a bad light on the whole industry.
It's like that basically and everything.
But I remember several
years ago writing about.
The soldier in Frisco was in an HOA
and they were gonna foreclose in Texas.
let me see if I get this right.
If you don't pay your HOLA bill,
the HOA does have the right
to foreclosing your property
Speaker 2: in most instances.
That is correct.
Because if a person doesn't pay, then that
burden falls upon every other homeowner.
it's an emotionally charged issue,
people go in budgeting for their
own family and their own account, a
certain amount of money, and suddenly.
Two or three of their neighbors don't pay.
They have to pick up the slack.
And so nobody wants say.
But on the other hand, foreclosure
is always a serious issue.
And we try everything possible.
And most boards of directors feel the
very same way Nobody wants to foreclose.
Any kind of personal enrichment
from foreclosure is prohibited
and will get you promptly sued.
So the myth that boards of
directors or individual directors
often want to foreclose on
members of the association, is.
a myth.
Speaker: you have to understand real
estate to also know you're not in the
real estate business, so you don't
want to own all these properties.
Right.
That's exactly right.
You want to do your business, which is
managing properties that That's right.
Not owning them and selling 'em, but
Speaker 2: situations like that
Frisco situation, those things
do come up from time to time
Speaker: No, we did
Speaker 2: I'm pleased to say yes, but
we've had the occasional issue too.
We're a very large company
and things come up.
It's a service business.
People make mistakes,
but we try to encourage.
These boards of directors to think twice
before they take any kind of action
of a particularly sensitive nature.
Political perhaps, elderly
residents, perhaps.
any of those things you really wanna
look at carefully because at the end
of the day, regardless of the issue.
These people are your neighbors.
Speaker: Exactly.
Speaker 2: And when all the turmoil
is over and settled, they're
still gonna be your neighbors.
it's important that people really
think about how they approach these
things, but sometimes things happen and
sometimes boards get a bit overzealous.
that does happen.
It's not widespread, but it does happen.
when that's the case,
bad things can happen.
Things get in the news,
things get reported.
Many times they get misreported
or exaggerated, but a bad
report is a bad report.
It's not good for the
homeowners association.
It's not good for property values,
and it's certainly not good for
the parties that are at disputes
We try to avoid those things.
Speaker: what are some of the
biggest misconceptions about HOAs?
Speaker 2: Well, I think perhaps
the biggest misconception is that.
Most residents in homeowner's
associations are absolutely delighted
They support their boards of directors.
They're pleased with
their management company.
You'd never know that.
every time the legislature in Texas
meets fairly large contingents of people
show up at the capitol wanting to change
the law for one reason or another.
Because they're angry at
their homeowners association.
And one of the things that the
members of the legislature have to
be reminded of the people that are
happy, they don't come to Austin.
It's only the people that are
unhappy for one reason or another.
And oftentimes though,
they are the squeaky wheel.
their issue is necessarily one that should
be addressed at the legislative level.
Speaker: Well, I do wanna talk to
you about technology and innovation,
because I'm sure that's something that
was not around when you first started.
how have you utilized and how has
technology assisted you in the
management of these associations?
Speaker 2: candy, I've been in
this business a long time, and if
you would've told me 20 years ago.
That we would use artificial intelligence
in my business or that we would've used
any of the various technologies we use, I
would've just looked, with a blank steer.
But today we use artificial intelligence
as an example on a very regular basis.
Speaker: How do you use it?
Speaker 2: we use it for, governance.
every association has a very
thick document, oh, yes.
Call it the governing documents.
Yes.
And, and they're Lengthy.
AI allows us to pick and
choose the information we
need to know instantaneously.
It allows us to take that same information
and give it to our, phone bank of people
that serve the customers, because of
artificial intelligence today, more
and more of those people are able to
use artificial intelligence to make
sure that the call is handled in an
automated fashion from start to finish.
So what it enables us to do is not.
Displace people, our goal is
not to reduce our payroll.
But our role is to get our
people out onto these properties
where they can inspect them.
'cause there is no substitution
for eyes on the issue.
And so we want our people out
there inspecting those properties.
The things that can be done through
the new technologies that exist.
Well, that's great, but it doesn't mean
we're gonna end up with fewer people.
Speaker: Are you finding that like
in security, I know there's this
device that we are thinking of
using in our neighborhood, where
it monitors every license plate
That comes into the neighborhood.
Oh, yes.
And goes right to the police.
Speaker 2: license plate readers.
we have cameras on this campus today
that use artificial intelligence to
detect various movements they can detect
the movement of a car from the movement
of a pedestrian to the movement of a
tree limb and know the difference and
set off alarms for better security.
One third of all incoming calls
to our company are handled
by artificial intelligence.
Not a human being.
Wow.
Now, one of the functions we
have is that we distribute money.
we have thousands.
Literally, I think the number today
is close to 80,000 separate vendors
that we do business with send in their
invoice through electronic portal.
The computer reads their invoice,
the computer knows what our
authorized spending limit is.
It can detect any amount of fraud in
the makeup or remake of that invoice.
In other words, a fake invoice.
it spits out a check.
that percentage we never even
see or have to touch now.
That's
Speaker: Pretty amazing.
That's amazing.
Speaker 2: the error rate is less than
3%, I believe is the current figure.
So this technology, none of
it existed 20, 30 years ago.
I've been in this business
now almost 50 years.
the technology, the tools available
to us get better all the time.
Will there need to be actual
property managers 10, 20, 30 years?
Oh, absolutely.
There will be.
But their job will change a bit and I
think they'll get to use their brain
more and their eyes more and the client
will get a better quality of service.
by using artificial intelligence wherever
we can They'll get more timely reporting
and response and greater consistency.
Speaker: So that's where you
think the future The future of
the business is, in AI technology.
Speaker 2: We are as much today
a technology company as we are a
real estate management company.
We have, in our technology, department,
or series of departments, we have over 150
people that their job full-time is nothing
but technology, software, programmers,
and I could go on and on and on.
Yeah.
Constantly writing and upgrading software
that we have to serve these residents.
when people wonder what does that
management company really do?
they have no idea how much technology
goes behind it and how much of a
capital investment is necessary
To effectively manage their property.
Speaker: Absolutely.
I would imagine that is a very
significant part of your company budget.
Speaker 2: is.
As well as training.
Speaker: technology and training.
Speaker 2: without a doubt.
None of those things get any less
expensive over time, but to compete
today, you absolutely have to have
them, in my earlier years in the real
estate industry, that, you know, we
liked doing things a certain way and
nobody should change how we do it.
Oh, yes.
And realtors are, are to me, I, and I was,
I, I Was an active realtor for many years.
Realtors don't like change.
They like to know the program.
But today it's all about change.
Speaker: can't keep up, forget it.
Speaker 2: they just have
to be willing to adapt.
more and more, people of all ages
find themselves willing to do that.
Not necessarily because they
want to but they recognize
that's just the world we live in.
and that's part of the
success of this company.
over our near 50 years in business,
we've adapted as we needed to be.
Yes, absolutely.
Our priorities have changed,
our service offerings have
changed, and all those things.
At the end of the day, while they
were difficult in the beginning,
they made us a better company.
Speaker: They did.
And I think that that is a
beautiful way to wrap because.
it is amazing.
You've been in this business so long
and you've grown it so tremendously,
but a big part of that was because you
adapted to the change, which was a lot.
Speaker 2: you have to.
Yes.
and that's just the
world we live in today.
Yeah.
And we can sit back and.
Become frustrated about it
or we can embrace it and we
just choose to embrace it.
I'm one of the fortunate few that loves
to get up and go to work each day.
Even at my age I don't think I'll
ever see a day of true retirement.
I enjoy this too much.
Speaker: I enjoy homeowners.
Speaker 2: I enjoy working with people.
We are honored to get to serve
these homeowners associations.
Speaker: Well, thank you so much and
I'm so honored that soon I will be
in one of your home associations.
That's what I hear.
I love it.
thank you so much.
I hope you've learned a lot.
I certainly have.
And there's more to come in the
common interest 'cause real estate
is really all about community.
Thank you for joining Dallas Dirt.