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Northwest Arkansas's go-to show for real estate agents, brokers, and investors looking to zoom in on the local market. Join us as we sit down with the leading voices in the area to hear how they're investing in NWA.
Hosted by (in order from left to right) Brian Wagers, Zach Stanley, and Brandon Still.
Brian Wagers: [00:00:00] Today we're on site at one of TCS Management's professionally managed properties here in Northwest Arkansas, Parkside at Lowell. We've got Joe Puggi and Kim Minnis with us, operators managing at both a local and national level.
Brandon Still: One thing we're gonna dive in today a little bit is kind of what makes property management work, what matters to operators, what it takes to kind of be great property managers, and what investors should be asking questions-wise, and what they should be thinking about along the way.
Zach Stanley: This episode is sponsored by TCS Management. Landlords, are you tired of late rent, surprise repair bills, and wasting hours on tenant calls? TCS Management is your full-service property management company here in Northwest Arkansas. They solve the headaches. Professional leasing and tenant screening to reduce vacancy and risk, target marketing to fill units fast, 24/7, 365 maintenance to stop small issues from becoming big bills, reliable rent collection and eviction [00:01:00] coordination when needed, plus transparent financial reporting, vendor management, and capital projection oversight.
Protect your investment and reclaim your time. Visit tcsmgtar.com. That's T-C-S-M-G-T-A-R.com, or call 888-TCS-MGT-5.
Brandon Still: Appreciate
Brian Wagers: y'all both kind of being on with us today. We're excited to have y'all.
Joe Puggi: Thank you for having us. Glad to be here.
Brian Wagers: Yeah. Absolutely. What separates investors who thrive versus those who struggle?
Joe Puggi: So what we see is the ones that thrive look at it as a... They look at the asset, they look at the numbers.
They don't necessarily get emotionally attached to the product itself and to every situation that comes in. So what we see is the most successful ones are the ones that, um, you know, they look at the portfolio as a whole, even if it's just one property. They're doing their [00:02:00] underwriting on it. And again, they're just treating it as a business transaction and not getting any s- sentimental attachment to the asset itself.
Brian Wagers: That's-
Joe Puggi: That is where we see it thrive the best.
Brian Wagers: Yeah, that's great advice, and that's kind of why I got into commercial real estate versus residential real estate, 'cause there's so much- ... more emotion. Well, you, you guys do manage residential real estate. Is, you know, I, I feel like there's more emotion tied to that.
Uh, w- what's your take on that? Th-
Joe Puggi: there is. Um, you know, for us, we have a, a, a big client mix, right? We have the institutional investors, we have the mid-size, the mom-and-pop investors, and then we have the accidental landlord, too, right? So we see all different personalities. Um, you know, and, and it's, it's great because you're able to educate clients in their investment journey.
Um, you know, and we get the experience from all different clientele.
Brandon Still: That's really good. I think, I think something that you see a lot out there with property management, there's a lot of different ways to cut it, and I think [00:03:00] sometimes you'll see... You know, even in our market, I've seen companies that have failed because...
property management companies that have failed because they wanted to be the cheapest on the block, and that was, uh, kind of their value proposition. Um, you, you see others that just aren't good at, at operating or maybe they're not good at marketing. What do you think kind of, you know, where do you think people get property management wrong when they're looking for a property management company to work for and, and, uh, along those lines?
Joe Puggi: So I think you said it best, too, when it came to pricing, right? Not-
Brandon Still: Mm.
Joe Puggi: You could have the best pricing in the market, doesn't mean the best service, and, you know, you might- Pay a lesser management fee, but down the road that could cost you 10X because it wasn't managed appropriately and proactively.
Brandon Still: Yeah.
Joe Puggi: So, um, the biggest thing is, you know, don't always go with the cheaper option. Look for the best service. Vet your property manager out. Make sure one's experienced, um, because they can save you a lot of money down the road.
Brandon Still: Yeah. That's really good. I think operations too in general, I [00:04:00] mean, that's really where- Mm
where things kinda can, can rocket ship for you as an investor or it can kinda take you down in the dumps, for sure. And, uh, I mean, eh, everything can look good on paper until you get out into the field and you're actually taking care of people and you're, you know, servicing tenants and, and, uh... Would you agree that's kind of the, the big thing there?
Joe Puggi: Yeah. I would say expect the unexpected.
Brandon Still: Make or break.
Joe Puggi: Yeah. Um, and Kim, I'm sure you can attest to this too. You know, y- you know, you go in and always have a plan, but it's usually plan C that's usually gonna end up the one you're gonna be implementing because there's so much going on.
Brian Wagers: For sure. That's good.
Yeah. Um, and we'll dive into some of those questions that you should be asking your property manager and, uh, feeling them out. W- before we do that, what got you guys into property management? Tell us about the backstory of TCS and where you guys at today.
Joe Puggi: Yeah. So I'll let Kim lead off and then-
Kim Minnis: Yeah ...
Joe Puggi: yeah.
Kim Minnis: Kinda local level Um, TCS has actually been around for, gosh, over 10 years.
Joe Puggi: Coming up on
Kim Minnis: 15 now. 15 years. Yeah. Yeah, based out [00:05:00] of Philadelphia. Um, currently managing over 5,000 doors from what I understand. Um, but as far as locally, we just started servicing the Northwest Arkansas area in January. Um, and I'm doing pretty good and making really good growth during that time, but, um...
And as far as what got me into property management, so I have been in real estate now for about six months. I came from the corporate world. Decided that was no longer my route in life. Um, got into real estate. I do residential real estate. Um, but also there's so much opportunity when in property management.
It's almost like nobody wants to do it.
Zach Stanley: Mm-hmm.
Kim Minnis: For sure. Um, so there's so much opportunity in it. Yep. So that's kinda how I got into it.
Joe Puggi: Um, my story is a little opposite. I kinda just fell into it. Um, you know, had a friend of mine at the time that, you know, was a head hunter and said, "Oh, there's a position open.
Go interview." It's kinda what happens. Um, I started off business development for the company, [00:06:00] uh, just locally in Philadelphia where we're headquartered. Um, and then a handful of years ago We kind of, we got pushed from the outside world to come up with a model to expand the, you know, across the country with, um...
So Gaurav and Ben, who are our founders and our partners, you know, we kind of all put our heads together and came up with a model. So as Kim said, we're about 5,500 units now, 16 states. Um, you know, and for me, since being in it, I love it, is, you know, this is probably the most expensive asset you're gonna own.
Brandon Still: Mm.
Joe Puggi: So being able to take care of that for people, um, you know, in their investment journey is pretty cool.
Brandon Still: That's fun.
Joe Puggi: Yeah.
Brandon Still: So expansion-wise, where did, where did that... I assume it started in the local market in Philadelphia, and then where did it kind of, did it travel down the United States elsewhere? And obviously now we're in northwest Arkansas, but where, where did it kind of stem from?
It,
Joe Puggi: it did. So it started in Philadelphia, the tri-state area there. Um, and then from there, our first ever expansion market was Nashville. [00:07:00]
Brandon Still: Mm-hmm.
Joe Puggi: Um, and then from there, right, it kind of, you know, we went up and down the eastern seaboard, so we're call it Philadelphia all the way down to Miami-
Brandon Still: Mm-hmm ...
Joe Puggi: as far west as Phoenix right now.
Brandon Still: Okay. Yeah. Amazing. So when y'all kind of look at a new market, I mean, what, what are some intangibles that are important? I mean, how, how did you go from, you know, thinking about, you know, leaving Philadelphia, uh, expanding from Philadelphia, excuse me, and going to Nashville or going to Phoenix and, and what made, uh, you know, even northwest Arkansas attractive to, for y'all?
Joe Puggi: So for us, it, it was a combination of a few things. One was just having the op- you know, in Philadelphia, the laws are very strict when it comes to tenant-landlord laws. So in our heads we're like, "If we can do it Philadelphia, why can't we do this in other markets?" Because, you know-
Brandon Still: So true. ...
Joe Puggi: little easier- Yeah, yeah
to manage, and we said, "We're seeing, you know, the hardest of the hard-
Brandon Still: Mm-hmm ...
Joe Puggi: and doing a, a stand-up job of it, so why not look to expand?" [00:08:00] Um, and then, you know, from there, like I said, we g- we got pushed, um- So Gaurav and Ben, they own a, a Keller Williams brokerage. Gaurav's in Gary Kell's mastermind and he said, you know, "Help build a, a model that you can kind of leverage to all our other market centers" and that's, that's how the idea formed of trying to do it.
Brandon Still: Gotcha.
Joe Puggi: And that's what got us to this point today.
Brandon Still: I see. I love that. And then as far as, uh, TCS today, so you're, you're fif- how... Would you say 5,000, over 5,000 units? Mm-hmm.
Joe Puggi: Almost 5,500. Yeah.
Brandon Still: And then what's that unit mix? Is it, uh, mostly larger multifamily or is it across... I mean, what, what would you say that split is?
It,
Joe Puggi: it's a mix. Majority, I would say, is your scattered site portfolio of single family duplexes, triplexes. Mm-hmm. Um, and then, you know, probably f- round numbers, right, 1,500 to 2,000 of multifamily properties where you're talking, like, 20 units plus. Okay. Um, you know, and they trade off, right? So [00:09:00] somet- the largest one we've ever managed I think was, like, 350 unit staff building.
Brandon Still: Mm-hmm.
Joe Puggi: Um, but our primary focus is scattered site residential, like where we're sitting today- Yeah ... like this type of asset class.
Brian Wagers: Love it. Mm-hmm. Yeah, there's a huge gap in the single family, kind of scattered market. You know, there's, there's quite a few that do the large multifamily, but someone that will manage and manage it well, you know, your average investor who has a couple single family investments or that accidentally became landlords as well along the way in this site we're sitting at.
What, uh... You asked, or you said in the beginning, you know, vetting your property management. I wanted to dial more in on that. Like, what, what are good questions for an investor owner to ask their property manager? S-
Joe Puggi: So, you know, a few things, right? One is you have to have the property occupied and performing to be able to produce for you.
So what is your vacancy rate? What's your average days on market? They're the two key indicators there. And how do you market my property? Um, you know, how do you handle maintenance [00:10:00] requests? How's your rent collection process? What's your reporting like? What types of softwares do you use? Um, what's your tenant retention ra- rate?
Um, they're, they're the, you know, kind of hot topic trigger questions that you should ask on the fly when you're vetting someone.
Brian Wagers: I, I like how none of those had to do with price. You know? It's not straight into what, what's your fee- Yeah ... and what's your lease-up fee. It's, it's getting the operational questions out first.
Yes.
Brandon Still: That's really good. I think, I think too, you know, a lot, a lot of people talk... I think a lot of property managers, and you may have a different perspective too, but a lot of property managers are maybe really good at, you know, renewals or maybe they're really good at operations or maybe they're really good at, you know, maintenance and things like that.
But something that at least I've seen in our market is I, I don't think a lot of people or, or a lot of property management companies are great at marketing. Um, do you... What do you feel like is the biggest gap for most property management companies out there that, that you would say are your competitors?
And of course, what, [00:11:00] uh, you know, how, how do y'all kind of fit into th- those as well?
Joe Puggi: So from a marketing perspective, m- marketing your property, I'll definitely defer to Kim- Yeah, yeah ... on that knowledge. But from a operations standpoint, you know, the biggest thing is not reinventing the wheel, right? Like, use technology as leverage.
Zach Stanley: Mm-hmm.
Joe Puggi: But you still want someone to answer the phone when you call because in property management, no same situation is alike. There's always an asterisk to the situation, so you still need, um, that person to person. It's all about relationships, right? Yeah. So the biggest thing is answering the phone, having the people behind the technology that can solve a problem.
Brian Wagers: That's good. Mm-hmm. Yeah. Do, do you guys have that, like, software for some 24/7 or-
Joe Puggi: We do. So we use App- App- Our property management software is AppFolio. Um, so we use that, right? Owners, tenants, they all get a portal. Everything gets ran through that system. We leverage some other technology too in each department that, that helps support, um, our [00:12:00] associates there.
Um, but yes, we, we do use a property management. And if you're n- with a property manager that's not using one, I strongly suggest getting with one because it just makes- It, room for error much less, and you're able to know what's going on with your property almost in real time, and it's accurate.
Brian Wagers: Hmm.
Speaking of tech, are you guys utilizing AI and, and TCS management in any way or looking to implement it?
Joe Puggi: We, we are. So, um, our management software I was mentioning, they've been good at leveraging, uh, you know, AI through workflows, right? So there's an interesting stat that said property managers are mostly caught up on doing paperwork when the real value is being on the phone handling the relationships, whether it's with the landlord or the tenant.
So we're in the... Yes, we're leveraging it, um, and what we're finding is it's offering better customer service. Not that we're replacing people with AI, but that the people are able to leverage AI [00:13:00] to make their work more efficient to talk to more people.
Brandon Still: Love it. That's really good. Uh, uh, Kim, I'd love to know more on, on the marketing side, kind of how, how TCS fits in that.
Do you see... Do you feel like that's a gap, though, for a lot of property management companies out there?
Kim Minnis: I do feel like there's a gap, because I think you can get stuck in the normal ways of marketing, where they rely on, like, the different, the basic websites, right? Um, and I think something that's underutilized is social media.
Yeah. And I know that's always changing, but I don't feel like it's being used to its full potential for a lot of- Sure ... property management companies. Um, and I think where we're excelling, and I'm seeing a lot of stuff come through, is getting on those groups, knowing who you're targeting, kind of, um, who the potential renters or leaseholders are, and just using social media for that.
Brandon Still: Yeah. So- And by groups, you mean, like, Facebook groups and things like that?
Kim Minnis: Yeah, like Facebook groups, and then just understanding the di- uh, the different algorithms with social media, what works best on Instagram, what works best on Facebook, [00:14:00] Twitter. Not Twitter, I'm sorry. Um- ... TikTok.
Brandon Still: Yeah.
Kim Minnis: Um, so yeah, just understanding and really utilizing it, not just relying on the basics that worked before.
Brandon Still: That's really good. I think, yeah, I think that's super underutilized by a lot of the legacy companies, especially even s- small mom-and-pop property management companies around here. They're just doing the bare minimum and, and hoping that they get leased up. And I think when you're looking at, to get a premium or you're marketing a property such as this, you know, you, you...
It, it takes more. And especially in a competitive market like Northwest Arkansas, that it's continuing to get more and more difficult to, you know, compete against larger companies that are coming in, institutional investors and things like that. As a, you know, individual investor, it matters a lot to have a property management company that, you know-
Brian Wagers: Will
Brandon Still: get the exposure
kind of takes that next step. So...
Joe Puggi: And, and to piggyback off of this, too, um, that's our model, right? Is like we believe agents should lease the properties, not... You know, in scattered site, I know it's a little [00:15:00] different, but- Not particularly your property manager itself, right? Yeah. The agent's the one that has the expert.
The agent's the one that's incentivized to find you a tenant. Um, they know the market a lot better.
Brandon Still: Mm-hmm.
Joe Puggi: So to have that aggressiveness, um, to fill that vacancy a lot quicker.
Brandon Still: That's great. Yeah. Yeah, that's interesting.
Brian Wagers: Yeah, 'cause the agent is gonna know the Facebook groups to jump into and, like, actually get hands-on versus the property manager.
They might know who the, the plumber to call or the maintenance tech to call. What does that look like for you once you get it l- Do you work with hand-in-hand with the maintenance techs, or does it... Is there a handoff once you get this leased up, or?
Kim Minnis: There's usually a handoff. So there is a dedicated client, um, care coordinator that will be dedicated to that property and to those tenants.
So it will get handed off to someone, um, that coordinates all of that.
Joe Puggi: And we, you know, we went through a flow as building the company out, right? You go from hiring someone that can do everything to then building out the departments on the back end, right? So then accountants are, like, [00:16:00] all they're doing is accounting.
The maintenance coordination's only doing maintenance coordination.
Brandon Still: Mm.
Joe Puggi: But then you run into departments, and then you get... You hit another stalling point, and then it becomes, okay, well, how do we offer better customer service? So like Kim was saying, w- we then, you know, figured out have a client care representative that'll be your main point of contact, and have those departments operate behind the scenes.
So Kim and whoever our agents are can focus on renting more properties to fill vacancies quicker.
Brian Wagers: That's great.
Brandon Still: Yeah, that's good. Is
Brian Wagers: that, is that part of the pre-process for you? Or what's that process l- Like you're getting ready to lease up a, you know, this, this town home. Are you researching maintenance in the ar- How does that look like putting the, the package together?
Kim Minnis: Yeah. So we do have preferred vendors. So there's, on a national level, there are some preferred vendors. Okay. Uh, but then we also are creating a preferred vendor list that's local as well. Okay.
Brian Wagers: Mm.
Kim Minnis: Um, and again, coming from a, an established brokerage, we have a lot of preferred vendors already. Um, but we also have that benefit of working...
There's [00:17:00] a h- a lot of agents, um, and so you can really collect and hone in on, uh, finding those vendors- Yeah ... and good preferred vendor.
Brandon Still: That's really good. I think, uh, you know, something that, that I think through, obviously marketing is one of the big, uh, one of the biggest things, getting the unit fill, units filled.
But as far as, you know, the, the next biggest thing for an investor, obviously what, what comes to mind is maintenance. But where, where do you see investors for the most part, if they're new or if they're more experienced, where do you think they, you know, if they're not with the right property management company, where do you see them lose the most money typically?
Joe Puggi: Maintenance.
Brandon Still: Mm.
Joe Puggi: Maintenance and vacancy are the two biggest things.
Brandon Still: Yep.
Joe Puggi: Uh, from what I see, Kim, I'll...
Kim Minnis: No, I agree with you. I agree with you. On the front end though, I would say pricing strategy-
Brandon Still: Yeah ...
Kim Minnis: um, and days on market. I feel like that can get overlooked a lot, and speed is important. Um, and if you're, if the pricing strategy is off and it spends more [00:18:00] days on market, you're not protecting your revenue.
For sure. And you're losing a lot of revenue. So I think one area, um, that really investors need to ask about too is what is your pricing strategy? How are you suggesting this price? Where are you getting this from? Mm-hmm. And don't be afraid to ask that, 'cause that can make a huge difference. Because days on, the longer it's on market-
Brandon Still: Yep
you're
Kim Minnis: losing revenue.
Joe Puggi: Yeah And, and also on the front end too, right? Like, what is your, uh, vetting process for residents and your underwriting guidelines for that? Mm. Um, what we like to do is keep the landlord- In the know and they get... Actually, the way we operate is we give them final approval of the tenant too, so they're comfortable.
Brandon Still: Yeah. That's good.
Joe Puggi: Yeah.
Brandon Still: How, how do you... I, I mean, in your experience, is that pretty strict compared to other property management companies? Or how do, how do your vetting rules that you, or guidelines that you guys follow k- you know, stack up against, you know, what would you say your competitors would be at?
Joe Puggi: So vetting process is very [00:19:00] thorough when it comes to reports that are ran. You know, credit checks, background checks. Mm. I mean, it's, it's as if you're going to get underwritten to go get a mortgage on a house. You know, saying that jokingly, but, like, you'll get all that information- Yeah ... up front. It's what you do with it after and how to read it.
Um, so guidelines, v- very market specific.
Zach Stanley: Mm.
Joe Puggi: Some markets you might not look so much at credit score. You might look at the overall credit profile, job stability, history, income, all that. Um, other markets you're looking at all of that, including credit score. So we like to look at the holistic picture-
Brian Wagers: Mm
Joe Puggi: 'cause, you know, credit score just isn't anything. And also we like to... We're there for, to be a guide and the expertise. We also talk the landlord through it too, 'cause they have their own criteria sometimes also.
Brian Wagers: Right.
Joe Puggi: So they try and merge that and blend that.
Brian Wagers: That's good. Are you guys usually getting involved with a currently managed property or a, a new property that they're getting to acquire?
Joe Puggi: Both. So [00:20:00] most of the business comes from clients that have been actively managing a property, whether it's self-managing or from another management company. Um, you know, naturally too, you know, given all the, the different brokerage locations we have and all that, you know, the brokerage feeds the business also.
So new acquisitions, people adding. But majority of it comes from You know, they're leaving another management company or they're self-managing, or even the accidental landlord. You're seeing a lot of that now 'cause the rates are... You know, I saw a stat just a couple years ago, what 80% of the country has a rate of 4% or less or something like that.
Yeah. So the rents are high, it makes sense for them, they have to relocate now. Go f- you know, they just became a landlord.
Brandon Still: Yeah.
Joe Puggi: But it makes sense for them to do it, but they don't wanna do the work, so we've been getting a lot of that business now too.
Brandon Still: Seems like that's one of the biggest opportunities as a property manager right now.
I mean, the amount of conversations that I have nowadays with- Mm ... [00:21:00] clients that, you know, were... They're interested in selling their house, but they also- Right ... wanna know, like, it- would it be wise for me to maybe hold onto it and, and rent it out? And so, um, that, I, I don't think that's been a con- that was a conversation for the last 20 or more years.
Um, but yeah, I think it turn- kinda turns a lot of people into, like, I, I can't sell this type of situation. Right. And, and so I think that's where... But none of them really are experts on, on what it takes to really manage and operate it well, so I think that's where y'all could fit in.
Joe Puggi: Hun- 100%, where there's a resour- we even tell people too, like, even if you just want us, you know, manage for the first year or two, and if you wanna take it back under your wing, you know, we did our job too, right?
Brian Wagers: Yeah.
Joe Puggi: Try and make it e- you know, as easy as we can and informative as we can along the way.
Brian Wagers: That's really good. W- what are you seeing... So you've been in a lot of different markets. Looking at all these different markets, how, what do you think separates Northwest Arkansas from your other markets as a whole?
Joe Puggi: Besides the beauty Uh. [00:22:00] Growth, like just the population growth alone. You have, you know, the obvious one is Walmart, but then they also pull in every corporation and supplier they deal with here, too. Um, so for us it's just, you know, just the growth that's going on here.
Zach Stanley: Mm.
Joe Puggi: Um, and it doesn't seem to be slowing down.
That's the exciting thing, right? Um, so for us that... Just looking around and seeing the economy and seeing the, all the, the major companies that are here, um, you know, for us is a big selling point.
Brandon Still: That's really good. I think, you know, a lot of investors I think keep up with the ARVEST Skyline Report. I'm not sure if you two are familiar with that necessarily, but they see vacancy rates.
They see, you know, how we stack up numbers-wise against the rest of the country. But because you all are in Philadelphia and Nashville, Phoenix, other areas, what are some differentiators that you see in our market, you know, as, as far as, you know, do we have a lower days on [00:23:00] market than most markets that you all are in, or do you see, you know, tenant base being a lot different than what you see in other areas?
A lot more, you know, maybe singles rather than families or, or whatever. Like, what are, what are some differentiators that you all see compared to, you know, a lot of the other markets you all are in? Um,
Joe Puggi: I would say days on market is one, you know, but I'll, I'll be biased and attest to Kim doing a lot of the leasing, so, you know- Sure
she does a, a great job here as a rock star. Um, you know, days on market's the biggest thing, the growth, and just the, the overall, you know, population. You're having people relocate from all over the country, whether, you know, mostly young professionals.
Zach Stanley: Mm-hmm.
Joe Puggi: They move here, then they set their roots here, then they have a family, so they're in all different stages, you know, of their life a- and, and their home life.
So, you know, to be a part of that, you know, it just creates that full circle moment.
Brandon Still: For sure.
Joe Puggi: Yeah.
Brandon Still: Uh, e- even on some other little [00:24:00] things, you know, tenant turnover, things like that, do you, do you see any kind of significant differences in, in our market compared to other markets in, in things like that? Or...
I know investors, some of the things- Yeah ... that you see that investors can't necessarily see on paper, are there any kind of metrics like that that, that, uh, stick out here?
Joe Puggi: Yeah, taking pride in their home.
Brandon Still: Yeah.
Joe Puggi: Like, they-
Brandon Still: Taking
Joe Puggi: care
Brandon Still: of it ...
Joe Puggi: taking care of it- Yeah ... treating it as if it's their own. Um, that I would say, you know, was one thing that really stuck out here.
Brandon Still: That's interesting.
Joe Puggi: Um, you know, at least from our experience and sample size, right? Yeah. Like, you know, I'm sure there's, there's stories, but from what we've seen so far it's just- You know, there's just common sense
Brandon Still: here. For sure.
Joe Puggi: Everyone, you know. Yeah. Something breaks, all right, get it fixed. They worked and then the vendor has to come in and help fix it or, you know, they broke something, they know it has to be fixed.
Brian Wagers: Yeah.
Joe Puggi: Um, we don't see that in a lot of other markets. It's always I broke it, but it's your fault.
Brian Wagers: For sure. For sure. Yeah, before we started recording, you were telling me on your road trip [00:25:00] here that it was, it felt cleaner, it felt friendlier. You know, and that, that definitely translates in, in the business, too.
Joe Puggi: Soon as you get off the plane here, like, it's just, everything's just so nice, clean, and new. Mm-hmm. And everyone... It just seems like everyone takes care of each other and everything here. Like, it's different. No offense, 'cause I'm from the Northeast. Live in the Northeast, but it, it's a breath of fresh air when you come down here.
Zach Stanley: At Advantage Title and Escrow, we don't just close deals. We partner with realtors to protect their clients from contract to close. Because closing isn't just paperwork, it's people. We strive to educate, communicate, and safeguard every step of the process so your buyers and sellers feel confident, informed, and secure.
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Brandon Still: So just in y'all's experience in Northwest Arkansas, [00:26:00] what are, what are some of these sub-markets within... I know y'all been here since January now, but, um, you know, what, what are some that y'all are excited about that you're seeing success in, or even just anything along, along those lines? I know we're, we're here in, in the Parkside in Lowell.
Mm-hmm. And I think, you know, Lowell is one of the markets that I'm super bullish on. I think there's a lot of opportunity here coming up, especially for developers, but also if there's, you know, existing product out there. Mm-hmm. I think there's a lot of opportunity here. But, um, but are there other markets?
I know you, you spent some time in Fayetteville now at this point. Mm-hmm. Um, but an- any others that y'all have seen a lot of success in so far, or maybe are excited about since you've been in the market?
Kim Minnis: We've actually, we've been spread out throughout Northwest Arkansas. Um, but I'm excit- I do, I love our sub-market.
So you've got Fayetteville, which is very stable. You've got the U of A. Um, I think they have now, what, between 29,000 to 31,000 students. Yes. And when on average, 75% of those students are [00:27:00] off-campus living, um, there's that stable, the stability there, right? It's a little more price conscious, but there's stability.
Mm-hmm. And days on market is usually a b- a little bit lower- Mm-hmm ... for Fayetteville. Um, you've got Siloam Springs, which is up and coming. There's more demand than there is what's available. Um, so those are going pretty quickly. Springdale's pretty stable.
Joe Puggi: Mm-hmm.
Kim Minnis: Um, you've got Bentonville. It's the corporate.
It's close. Um, a little more competitive, um, but great market as well. So we're just, we, we're very lucky that we have a stable, yet growing market everywhere. You've got Bella Vista. You've got the new Oz Bike Trail opening, so you have a lot of people coming in for that.
Brian Wagers: Mm-hmm.
Kim Minnis: Um, so yeah.
Brian Wagers: It's really good.
And you, you guys manage, uh, I think y- on Beaver... Do you manage something over by Beaver Lake, too?
Kim Minnis: Yeah. Yeah. We've got some, uh, luxury lake- Leases going on
Brian Wagers: When you're looking at these [00:28:00] different sub-markets, h- how do you approach that when you're talking to investors and owners? If you're looking at someone's property in Springdale versus someone property in Bentonville, how do you, uh, approach that?
Kim Minnis: Yeah, definitely doing a deep dive into market analysis and checking, you know, what's been leasing and why, and understanding, um, what the market is saying and who are those potential tenants. Um, and I think when you can understand that, um, it's a better conversation to set expectations with the investors or landlords.
Brian Wagers: For sure. I, I think, uh, I see a lot of out- like, out-of-state investors, they see Northwest Arkansas as a whole- Whole ... instead of, like, diving deep into these, you know- It's different
Kim Minnis: sub-markets ...
Brian Wagers: different sub-markets, and Lowell is different than Rogers. And even- Right ... within Rogers you have varying levels of, uh, demographics, uh, b- you know, between Downtown Rogers and Pinnacle Rogers.
So that's good to hear you're doing deep dives with them on each one, for sure.
Joe Puggi: [00:29:00] And yeah, I mean, look, even I'll take it a step further. I know we're talking Northwest Arkansas, but where we're headquartered in Philadelphia- It's block by block. Yeah. You mean the same neighborhood and one block verse the next block over is completely different.
Brian Wagers: Mm.
Joe Puggi: Um, so just understanding that, like Kim was saying, um, is hu- is huge 'cause that can make or break a deal for you, so...
Brian Wagers: I think that is a unique perspe- you were talking about earlier, like if we can handle Philadelphia, we can handle e- any other areas as a landlord. Same, it's the same thing. Like, you know, we see it as, uh, these different sub-markets are so different, but the big cities, you know, like you were saying, like a, a block can be di- a street, you can, it can vary by street.
So you're used to approaching things not as just a catch-all. It's in Philly, this is your f- your price per square foot is gonna be this, and, uh, your, your days on market is gonna be this. It's l- it's dialing in.
Joe Puggi: A- and that's one thing too, right? You have... Also, you have all this software. You can go online, [00:30:00] you can go check and see what the projected rent price is.
But again, it's, it can only get you so finite. That's why I always suggest doing your own research and also leveraging an agent too-
Brandon Still: Mm ...
Joe Puggi: that knows the markets and knows the streets because, like, you can pull a zip code and pull it within a 10th of a mile of that address, and it still might not be accurate because of the exact block it's on.
Brandon Still: Mm.
Joe Puggi: Um, so just being hyper local with that data is huge.
Brandon Still: I think that's unique too. I, I don't think I've heard that. I, I'd love to know more about the agent type of partnership that y'all have. Um, i- is that l- you know, a listing, uh, like e- let's say you get a new, you're getting a new property. Mm-hmm. You get this property to, to market.
Mm. Is it passed to the agent to list on the MLS and kinda do their marketing play, or is it, you know, TCS i- has, is licensed and they list it and they're just... I mean, how, how does that relationship work?
Joe Puggi: So from a, a legality [00:31:00] standpoint, depends on the market, right? Mm-hmm. We have our own brokers in some.
Others, like Northwest Arkansas, we don't. Our partner does, so w- we, we leverage, you know, which is where Kim's at, um, and works hand-in-hand with us. But yes- We leverage the agent. That's their expertise.
Brandon Still: Mm.
Joe Puggi: Hyperlocal. They take it, they run with it. They're the ones that are running the comps, marketing strategy, everything.
Brandon Still: Okay. And then as far as leasing goes or, or, I'm... And I'm trying to help the, the listener understand a little- Yeah ... bit more too. Uh, is that, is that an added cost for the investor to, you know, let's say, a lot of what you see out here in the past at least is, you know, let's say 25% of first month's rent is the commission for a, uh, an agent to bring a buy- Mm
or bring a renter to the table or whatever. Mm. Um, is that something that how you guys market it, or how, how does... And is that an extra cost for the investor, or how, how do y'all kind of- It,
Joe Puggi: it is ...
Brandon Still: strategically? Yeah.
Joe Puggi: It is. So, you [00:32:00] know, you have your leasing fee to find the tenant, which, and it's incentivized, right?
That's never, the landlords never do the pay that until we find a tenant, they approve. The tenant then has to sign a lease, pay their move-in funds. So there's- Yeah ... checks and balances and incentives in place for that.
Brandon Still: Mm-hmm.
Joe Puggi: Um, so yes, there's a leasing fee for that. It includes the marketing. Um, varies per market we're th- we're in, right?
For sure. Um, 'cause up in Philadelphia, we charge a full month-
Brandon Still: Yeah ...
Joe Puggi: of rent. But, um, you know, and then we also leverage other agents too if they can bring tenants in, there's a co-broke fee.
Brandon Still: Mm-hmm.
Joe Puggi: Um, sorry, that's my long-winded answer that-
Brandon Still: No, it's
Joe Puggi: great ... depends on the market, but yes, there's an additional fee.
I
Brandon Still: think that's important, uh, like, like we've talked about before, I think, um, the bare minimum of just a property management company putting it on apartments.com and, like, the typical-
Brian Wagers: Mm-hmm ...
Brandon Still: um, and, and taking cell phone pictures and stuff like that, you know. Like, I think the days of that are where you see the, this gap growing for skilled property management companies like TCS and others that do things [00:33:00] the right way, but also are leveraging market experts to be able to kinda get that extra r- reach.
Joe Puggi: A- and, you know, the, to lean on that, we see things don't typically rent for two reasons. It's either pricing or it's agent effort.
Brandon Still: Yeah.
Joe Puggi: So it all revolves around basically the agent, right? Like, they have to provide the comps and the, the information to price it right. Um, but they also have to put the e- the effort in and answer the phone, too.
It's not just, you know, if we build it, they'll come. You still have to work the leads when they come in, and the rental market's so fast that you have to be on top of your leads.
Brian Wagers: Yeah.
Joe Puggi: I mean, within minutes basically.
Brian Wagers: So true.
Joe Puggi: Yeah.
Brian Wagers: Before we go into the fire round, um, growing TCS, what's been some of the keys to growing it and professionally managing such a, a big team?
Joe Puggi: So I would say the, the big key is hiring the right talent And ha- processes. They're the two biggest things because if you can [00:34:00] have a process, but if you don't have the right talent to implement that process, the process means nothing. Um, so I would say those are the two biggest things. Um, you know, again, it's just all the associates that I work with, um, and then also, you know, partners as well, like just pushing us to the next level and being there for support and never limiting the resources.
If someone needs something and there's a problem, fixing it, whether that's with money, with just brain power, um, making sure it gets fixed so it doesn't happen again. So I was very big in reinvesting in the business.
Brandon Still: That's awesome. Love that. Yeah, hiring and, and processes. Yeah. It's important. Uh, so just kinda as we wrap up, I'd love to get answers on, on these from both of y'all.
Uh, we like to do a little fire round with some questions to, to kinda wrap this up. Um, for y'all, uh, biggest mistake that investors make
Joe Puggi: For me, I would say it's [00:35:00] hiring on price and not so much the, um, the process itself and, and the services offered.
Brian Wagers: That's good.
Joe Puggi: Um-
Kim Minnis: I would say overpricing and chasing rent instead of occupancy.
Brian Wagers: Underrated factor for investors to think about?
Joe Puggi: I would say the underrated factor is, um, m- make sure you know your expenses. Don't just focus on the gross rent. Like, make sure you're looking at the deal as a whole, and make sure you know all your expenses that are in place down to, you know, your manager, your insurance costs, everything.
Um, 'cause again, at the end of the day, it's an investment, so you wanna make sure it's a good investment. So I would say the underrated thing is not looking at your expense.
Brian Wagers: Mm.
Kim Minnis: I'm gonna put my realtor cap back on. Um, and I'm gonna say days on market, speed.
Brandon Still: Mm.
Kim Minnis: Um, the longer it's vacant, it's gonna kill your profits.
Brandon Still: So true. Overrated metrics that you think, um, investors put too much weight on?
Joe Puggi: Hmm, [00:36:00] overrated metric that they put too much weight on, I would say, I'll flip it back and say gross rent.
Brandon Still: Yeah.
Joe Puggi: Like, how much is the property gonna produce? But again, if you don't, you know, income versus expenses, what's your net gonna be?
Brandon Still: Mm-hmm.
Joe Puggi: Tells the whole picture. So people are just always worried about that or what I'm gonna cashflow to, which I understand if it's your primary job, for sure, but if you're looking at it as a passive investment, at a minimum, if you have someone there that's paying down your debt service and you're getting the appreciation, look at it that way, not am I gonna get an extra $10 a month in rent so I could say cashflow.
Brian Wagers: Right. That's good.
Kim Minnis: I'm gonna, I'm, I agree with you on that one.
Brian Wagers: Love it. Best decision owners or investors can make?
Joe Puggi: Best decision, um, it's like anything else. Get a second opinion. Like, go to a doctor, right? Like- Mm-hmm ... don't just take our word for it. You know, if you're dealing, if you're dealing with an agent, make sure [00:37:00] you're vetting and making sure, along with the property manager, you know, talk to a few different people.
Make sure you understand it fully first. Don't just take one person's word on it. I'd say that'd be the biggest thing.
Brandon Still: That's good.
Kim Minnis: I would say be proactive and not reactive.
Brandon Still: Love it. What excites you all about Northwest Arkansas the most in the future?
Joe Puggi: For me personally, I would say it's just the, the, there's no ceiling at the moment on the growth.
Brandon Still: Mm.
Joe Puggi: Um, and just kind of seeing, you know, as I look out here, all new construction, it's like, it's everywhere.
Brandon Still: Yeah.
Joe Puggi: Um, you know, it, it's transforming, but it seems like it's transforming in a way where it's nice, where you don't lose that charm.
Brandon Still: Yep.
Joe Puggi: Um, that's the biggest thing. If you can keep the charm, uh, it's, that's the exciting thing, but get the growth.
Brandon Still: That's good.
Kim Minnis: Yeah, no, I agree. I think there's unlimited opportunity here, and that's exciting.
Brian Wagers: For sure. I love it. One final [00:38:00] question before we close out. If, if you're starting today with one to two properties, what would, what should you s- focus on first?
Joe Puggi: For one to two properties, I would really focus on having your vendors lined up, even if you're self-managing.
Brian Wagers: Mm.
Joe Puggi: Leak comes in in the middle of the night, who you calling? So you're not scattering. Like I said, even if you don't hire a property manager and you're doing it yourself, your, your network is... What they say, your network's as good as your net worth, so-
Brandon Still: Yeah ...
Joe Puggi: vendors are your make or break in this business, I would say.
Brandon Still: That's really good. Well, I appreciate you both. We, uh, we're super grateful that y'all took time with us and, and, uh, love- excited about y'all's business here and, and kind of what you're doing with TCS, and I think you're in the right market now. Um, but yeah, we're, we're grateful for your time and, and, uh, excited for what's to come.
How, how can people reach y'all as well, if y'all don't mind?
Joe Puggi: So, um, you can go t- you know, tcsmtg.com, and you can see all the markets we're [00:39:00] in. Um, you know, or 888-TCS-MGT5 is, is our main number, and, you know, we'll make sure we can answer any questions you have.
Brandon Still: Awesome.
Joe Puggi: Um, and then Kim, you-
Kim Minnis: Yeah, the local website is www.tcsmtgar.com, and that's the local TCS website.
Brandon Still: Perfect. We appreciate y'all both. Thanks for your time. Yeah.
Joe Puggi: Thank you
Brandon Still: both.
Kim Minnis: Thank you.