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Every Friday, join us as we dive into the latest in real estate multifamily with David Moghavem, Head of East Coast Acquisitions at Trion Properties. David invites top experts who know the ins, outs, and trends shaping the real estate multifamily market across the nation!
Whether you’re a seasoned investor or just curious about where the next big opportunity might be, Deal Flow Friday brings you the weekly inside scoop on what’s hot, what’s not, and what to watch for in today’s ever-evolving real estate scene.
Intro 0:00
David Moghavem 1:30
All right, welcome to another episode of deal flow Friday. I'm your host, David mogam, and today we got the try on ops team. Johnny della espriella, Natalina, redo, Ritu and Max sharkansky,
Unknown Speaker 1:44
bingo. How's it going? It's going great.
David Moghavem 1:48
A couple takes for that. So thanks again. Last names, yes, exactly it's I'm really excited for this pod because I feel like try on. You know, I've been at Tryon for 10 years. Max, the company's been going on for 20 now. And I really just feel like having you guys now on the team has put us to a different level in terms of our operations, and would love to dive into that as well. First, a quick intro for you, two for the audience. Johnny was formerly at rKw. You helped scale the multifamily portfolio from 6000 units to 30,000 units. You were also head of ops at Eagle property capital, and you are serving as a 2024 president of the South East Florida Apartment Association, board of operations, or board of directors, that's right. So lot of experience, our head of property management and Adelina, you have over a decade of experience in multifamily management, experience, and including managing a $5 billion portfolio at livecore Blackstone and also prior roles at Coleridge and mid and Natalina. Johnny, working with you guys has been a pleasure. So far, we've had some great dinners and we've done some great tours together, but we've also been getting into the weeds, improving operations. You guys have been impact day one, and we're excited to dive into how we're doing and how we're getting our ops in line, which now more than ever, I think operations is super important. I think Max can attest to that too, pre rate hike. I think a lot of operators can hide behind the rent growth. They can hide behind the inflation growth, and everything looks fine and dandy on paper, because you're getting recovered by rents now in a down market, Ops is as important as ever. And I think us self managing is as important as ever. So I guess the first question is, really, what are the core fundamentals of running a high performing multifamily portfolio? Maybe max if you want to kick it off. And we could talk about with the team,
Max Sharkansky 4:05
sure. First of all, as you said, impact day one. Couldn't be happier. And we're proud to have you guys on board. You guys are amazing. And I'm really looking forward to growing the company with the two of you and going in a whole new direction and just being even more operationally focused, where before, our whole business model was, you know, let's buy like a blank canvas value, add play and let's renovate it. Reposition the asset, change the facade, change, the signage, change, do a full common area, reset. We would take an old rec room, turn it into a fitness center with like, you know, and being really smart about it and thoughtful about it. I remember we were one of the first ones to do pelotons in the East Bay, right? And there was a single file line out the door. So we just bought more pelotons, and that was a huge selling point. And we were doing, you know, washer dryer hookups and really nice rentals. We did the vending machines on with the app, and they said all kinds of different products. It wasn't just sodas, it was food and napkins and whatever you would need for your house. And now we're looking at more like, you know, nitty gritty ops. Natalina came in in her first month, our first quarter, and I remember our first quarterly review, picked up $700,000 of noi portfolio wide, which was amazing. That's like nothing I would ever be able to do. I don't think anybody in our company had that skillset. And it was just nitty gritty operations, looking at month to month audits, utility rebuild audits, and looking at every line item on a financial statement, and understanding where to increase your noi, which is amazing, yeah. And I know
David Moghavem 5:41
part of that too is also processes Natalina, like you and I were talking about, there's if one word is off on a notice, then you have to throw it out the door and reset the the claim. And so I think part of that too is like, maybe give a little bit of examples of some like day one impacts even on those type of processes that most, most operators probably don't know about or learn the hard way, but given your experience, you were able to kind of put day one,
Natalina Rettew 6:14
yeah, and I would agree with learning the hard way. I think that's probably how a lot of us at this table have gotten to,
David Moghavem 6:20
where to have changed too, right? So it's also part of that, absolutely
Natalina Rettew 6:25
and having to stay very nimble. And you know, we operate in in some highly regulated markets. It's and I've worked in many of those for the 10 plus years in my career. And so having to get very creative, I think, you know, just getting really back to basics is the best place to start. And so some of the things that Max touched on, and a little of what we talked about, it's like when bad debt isn't making sense and the team is telling you their process and everything they're describing is the right answer, actually getting behind the curtain, you know, opening the files. Let's see, you know, what are we doing with screening? Are we overriding? Are we playing with the deposits? If we're using a deposit alternative, are we using it correctly? And yes, if we're sending the notice, I want to get my eyes on that notice and understand what isn't moving forward here, because even in Northern California and in Oregon, in Colorado, companies are finding some success. It's it's very hard, but we can't throw our hands up and say, Oh, the regulations are making it impossible, like we Yes, bad debt may be double what it was pre covid and before a lot of the regular regulations came out in Colorado, but it's not necessarily triple or quadruple. So how do we rein that in? It's just one example,
Johnny De La Espriella 7:50
yeah, and I think in on the operational part, it's, this is really much a people business, right? It all starts with people. It could really make or break a property's financial performance. So it all starts with hiring the best talent and really giving them all the resources from a training perspective, platforms to make them successful so you can retain them. You know, those are the team members that will get you, the high occupancy, the low delinquency, high renewal, retention. So really, besides hiring, retaining and training your best people and getting the best talent after that is really communicating what the business plan is right and what the targets are, and really having a timeline and a process in place to really monitor these target metrics to achieve them.
David Moghavem 8:35
Yeah, and I think part of that when you say it's a people business, I've seen where we have different properties with different payroll structures, and some structure may look a little more efficient on paper, but if there's not that, let's say like assistant manager that's knocking on doors and trying to see, like, what the tenant's going through. Why can't they pay, helping them out that like, person to person connection can really go a long way with bad debt. Sometimes it's those little things that Natalina, Johnny, you guys are just talking about, that go such a long way with curing your bad debt. And it's not just, oh, the markets. That's just how the market is. That's market bad debt. No, there's little things. It just takes a little bit of extra effort. I I appreciate the guidance that you guys have brought so far. I guess you know one other thing we want to talk about too, as we're talking about, also human interaction is some of the prop tech tools that we're also implementing, I guess, maybe some would say, in lieu of human interaction, but I think it's more of a supplement to that. What are, I guess, a few of the tools that we've been playing around with to get our operations in order and help as like another team member for our management.
Max Sharkansky 9:55
Well, we're living in an age of AI, right? Everything is Ai, ai, ai. So we have one solution we've used for a very long time is a chat bot to interface with prospective residents, right? So years ago, when we were using AppFolio, they had their proprietary chat bot. It was called Lisa. Was amazing, and it worked really well. And I remember when we went from the old school kind of just, you know, answer the phone and take a meeting to using a chat bot our lead or guest card, I guess to lead ratio to actual tour ratio was skyrocketing because there were so many missed calls and the managers walking around. And at that time, especially, we had a lot of properties with one, maybe two people on site, so that we didn't have the manpower on site to answer every phone call. And it's all evolved, right? And things evolved very, very fast in this day and age. So we then moved from AppFolio to Yardi, which meant we had to use a third party Chatbot. We piloted a few different ones. We went with one, we went with perk, and that was after piloting Elise and perk, and it was working great. And I was sitting at home on Saturday with my iPhone texting all the different communities in our portfolio and others that I knew those bots worked, and I thought that was the better one, and you were testing them out. Yes, I was sitting there on the weekends just on my couch, just working with the bots, yeah, and figuring out which one we liked best, and then over the upcoming days and weeks. Which one was following up the most automatically, lead nurturing, and we decided to go with that product. And we discussed internally. We had some debate. There was a lot of disagreement, but that's ultimately we decided. And here we are, two years later. Now we're switching to the other product, because if they've just evolved, and it's more than just a what's other product, it's Elise.
Unknown Speaker 11:51
Elise is the new product,
Max Sharkansky 11:52
yes, old one, yes. Because all of these products in their infancy, they were just for prospective residents, right, right? Somebody wants to lease a unit, they send you a text message. How much is a two bedroom? What's your pet policy? When is it available? Can I schedule a tour? And that was kind of the whole thing. It worked very, very well, yeah. Now it's just evolved, and it's just a completely different beast, right? It's got voice AI, which works incredibly well. And if someone wants to call in, instead of having a live person talk to them, there's a voice AI bot. And it works very, very well, incredibly well. Scary. Well, yeah, like, there was an example where somebody called in to the voice bot and said, I need to reschedule the meeting I have for tomorrow, the tour I have for tomorrow because it's my daughter's birthday, and the voice bot says, Happy Birthday to your daughter. Let's reschedule for next week. And it's just, I mean, that's, that's really scary, amazing, yeah,
David Moghavem 12:48
there's resident I walked into the leasing office and said, Who is the leasing agent I was talking to? I wanted to see if I could, like, go on a date with her.
Max Sharkansky 12:57
Yes, yes, but that was a different product to my point, actually, that was a product that we used for text messaging for people that were behind on their rent. Okay, that product got bought by entrada, so that's gone, and we can no longer use that, but Elise has that product, right, right? So they have a rent collection product, they have a voice product, they have a text bot product, I feel like I'm doing a commercial for them. And they also have a maintenance and work order product, yeah, so we tested it. I called a bunch of references. I did the same thing again, sat on my couch on weekends, nurtured the leads, or, sorry, watch how it nurtured me as a lead, and it worked really well. So we're off boarding our former product and onboarding, at least
Natalina Rettew 13:40
this might be the first they're hearing of that, by the way. Oh yeah,
Max Sharkansky 13:44
sorry, that's pm. I am you got, you've got your hands full. So we figured we would just have pm handle.
David Moghavem 13:50
Johnny, would you say that, on your experience helped with the staff on site? Like, are they happy with it? Do you also feel like, again, going back to what we were talking about, replacing versus empowering your staff, like, how do you see that those tools help?
Johnny De La Espriella 14:06
Yeah, I think going back to the AI, really, it's taking it from the beginning of the life cycle of a resident, right, right when they're a prospect, that experience of when they submit a lead online, that they get a response back from, from the AI agent once they move in, that AI agent is helping them right through that process, through their moving process, once they move in, for their rent payment for the resident portal. So really, it makes the lives of our teams members easier. And there's plenty of other platforms we're looking at as well that we currently use that makes their lives easier, for example, for market surveys and in benchmarking, we have apartment IQ, yeah. To another, another great platform, you know, saves them time to do that. We have a great platform for maintenance as well, you know. So really trying to improve the experience for our team members so they're more efficient. This app helps them, you know, close our work orders, complete their move in, inspections, their preventive maintenance program that we rolled out is also handled through this app. So it's really adding to our tech stack only if it's going to make the lives of our team members easier, make it more efficient, but also provide a better experience for our residents.
David Moghavem 15:17
Exactly. I think efficiency is the part too, even apartment IQ, because we use it on the acquisition side when we're pulling comps, it's a great first step, but then you still got to go call the apartments to like, just get that extra edge. It doesn't really, like, replace the ops, but it just makes some of these processes more efficient. And then, you know, we walk comps all the time when we're deep in a deal. I don't think anything is can replace that for now. But, yeah, these tools are super powerful. I guess on the asset management side, where are some of like, the tools, prop tech ideas that we've been embracing that that's been a huge help?
Natalina Rettew 15:56
Well, we have been excited to onboard apartment IQ on the asset management side as well, in terms of meeting the needs of our Capital Partners and being able to answer those questions really quickly. Also, you know, we use AI revenue management, being able to fact check and use some additional data and clarity around pricing and setting prices. Additionally, we're just about to roll out our own instance of Power BI, which I'm very excited about. If you know, you know, right, like
David Moghavem 16:27
it's, I don't know if the audience knows, you gotta, you gotta give them the. The state of
Max Sharkansky 16:30
visualization. Everyone has seen commercials for Tableau. Yeah, right. Market very heavily.
Natalina Rettew 16:36
Yeah. It's like, you know, Excel and PowerPoint having a really cool baby, yes, yes, and just allowing us, you know, we talk about scaling, right, not going property by property, and every property getting the same amount of time and attention, but that 8020 rule and the ability to dive in when we see issues, to get a little predictive and understand trends and adjust pricing early on, things like that, that will really help us just to visualize the portfolio as a whole and then look for the outliers.
David Moghavem 17:11
Yeah. So all of this, what I've seen since you guys have joined and we've been embracing this technology, is that it's been also a huge impact in transmitting that information to our investors, to our equity partners, because part of it is not just having good ops, but explaining it and showing it to our Capital Partners, I guess, talk a little bit about the importance also, of having the transparency with our partners and how some of these tools help with showing the bigger picture, what's market versus what's management. What can we do better versus what's the reality boots on the ground? Like, how has that been?
Natalina Rettew 17:56
Yeah, that's been one of the most rewarding and interesting parts of this new role, because I came from that side. Yeah. So I was the capital partner. I was the one asking those really tough questions of operations and making management changes and recommendations when things weren't going well, and so I try to cater my responses with that in mind. And I think of utmost is data integrity, being able to support any number that we provide to them, and also being able to tell a story and a narrative that jives with what's really happening boots on the ground.
Max Sharkansky 18:32
Yeah. How has that transition been? Oh, sorry, you want to Yeah. I
Johnny De La Espriella 18:35
was going to say, I think you know our when we prepare our budgets, our annual budgets, that's really our promise to our investors and everybody involved, and we're very much committed to it. But we all know there's things that happen sometimes throughout the year, market condition shifts and having platforms that you could really be able to have the visibility to explain what's going on in the market. Are we being better than our competitors? Are we doing the best we can to navigate those waters? Also helps tremendously.
Max Sharkansky 19:03
How's the transition from, you know, being the person who does a lot of the beating up to now, you know, having to answer some of our Exactly, exactly
Natalina Rettew 19:13
guys property management is a lot harder than it looks.
Unknown Speaker 19:18
Yes, that's cycle. Yeah.
Unknown Speaker 19:21
It's really, oh yeah, this operational environment.
Natalina Rettew 19:23
And it's, you know, there's such a human element to it that cannot be discounted, and often is when you're that extra step removed. But you know, people are flawed. They're imperfect. Mistakes happen. You know, you're sometimes only as strong as your maintenance supervisor going out and calling a vendor for something that's not approved. Like we live and die by that, and it plays out in the numbers, and we control, you know, as much as we absolutely can. So I think that's been my biggest takeaway, is a newfound empathy for the site teams and the number of requests that come from all different directions, and then the really involved Capital Partners that think they know the business better than the people that are living it every day who want to, you know, dissect a unit Reno down to the, you know, speckle of resurfacing, you know, color on the counter, or
Unknown Speaker 20:25
what's the ROI on The back splash? Hey,
Unknown Speaker 20:27
that's a, that's legit question.
Natalina Rettew 20:32
But you know, hey, take, take everything you just gave me now, put it into my format. Like, don't you have an analyst that can do that for you? Do you really want the property manager spending time on that? Or do you want them out walking the property, making sure it looks good? And, you know, something that does that really add value to the the property? Or does that just make your day a little easier,
Unknown Speaker 20:53
right? Right?
David Moghavem 20:56
It's crazy when we're talking to some of these Capital Partners. It makes a world of a difference from when you have, like, a really good capital partner that works with you, versus some that are not in the weeds. Another part, I would say is I think that human inefficiency is kind of our edge as self managing to have inefficiency and have alpha in multifamily. I would tell you some of our regionals, we have some really good regionals, and some of them are really outstanding where you. In markets that are super management intensive, I'm like, wow, we can perform really well in these markets because we have a great team, and I think especially multifamily, that makes a world of a difference, and is, like, true alpha in outperforming in a market because of just the boots on the ground that we have. That's correct. Yeah,
Max Sharkansky 21:51
it's all people. It's all business. And like any other business, I don't think it's specific to multifamily. Of course. It's any any business you have to manage those people and nurture those people and keep everybody happy and try to keep morale up in tough times. That's really
David Moghavem 22:05
triple net, triple net lease a retail deal or something. It's just not the same dynamic as, like, a management intensive multifamily deal. You know what? I mean?
Max Sharkansky 22:15
Of course, yeah, because these are people's homes, yes, their lives. And you know, if you're good at what you do, and you're a competent human being, and you're an A player, then you want to, you want to have a great product for those people and you care, yeah? And you want everybody to have a good
David Moghavem 22:29
experience, yeah? So one of the things I want to talk about with you guys is going back into, like, market in our portfolios. What are some of the biggest surprises you're seeing Max maybe you could start off with, like, what are some of the biggest surprises you're seeing this year in our portfolio, from the operations, I guess, like, West Coast versus East Coast, and we have a great lens, right? We're in eight different states, from California to Florida. So what are you seeing on the operation side? That are some of the trends, and then also some of the biggest surprises, and maybe differences between the different states and coasts.
Max Sharkansky 23:06
I think the most pleasant surprise was when we were doing some analysis on a state by state basis, on a lot of our different line items in the financials, and that bad debt in California is our lowest in the portfolio. So I think the you know, the knee jerk would be for a company that owns in a lot of states in different political climates that California probably has the worst bad debt because it's so regulatory intensive, and there were so many issues during covid, and the bad debt was really horrible during covid. But as we sit here today in August, 2025 in our portfolio, California has very, very low bad debt. What is it? Sub 2% sub 3% Yeah, sub 2% and we've got other states where it's much, much worse,
David Moghavem 23:57
pretty low too. No. Oregon and California are the lowest, yeah, which are the two rent control states and hardest to evade, yeah, and hard to evict, yeah? And I feel like the rent control does play a little bit of a role for some of like, the lower bad debt. Because why? I guess, if you're under market, like, why would you be delinquent? But maybe part of that, too is higher incomes. Not so, I guess, what's, I guess? I want to dissect a little bit why, as why? Why do you think that's the case?
Max Sharkansky 24:27
I don't know. Maybe it's a supply issue. Also, where somebody, you know, if somebody loses their home because of an eviction, it's not so easy to just find something similar, the same price, especially, as you pointed out, you know, if they have a slightly low rent, then they want to keep that unit. It's an asset, right? It's like having a, I mean, think about it. It's like having a business contract on some sort of an asset that's 20% below market.
David Moghavem 24:55
It'll only give funds and ask an asset, yeah, it's
Unknown Speaker 24:59
an asset. Yeah, it's an asset.
Natalina Rettew 25:00
I think also, if I can pay a compliment, it has to do with where we buy, right? It's California for us, is largely East Bay, but specifically, like San Leandro, Fremont, some of these more prime suburban markets, and then Sacramento, which historically has been a really strong performer on the delinquency and collection side. So there's that Portland. It's Hillsborough, Aloha Beaverton, it's it's not necessarily a ton in. Call it Gresham. Maybe one day we'll invest in Gresham. It's more about the ancillary and service providers for the major employers, rather than like, logistics, warehousing, you name it. I think that that does play into some of the fundamentals that we're seeing and why we've been able to find success there. And then again, strong teams, some of our strongest managers and regionals are in those markets.
Johnny De La Espriella 25:56
Yeah, we definitely see different regulations from an operational in our markets, right from an operational perspective, you know, it definitely hurts the value of some of the properties when you have regulations like rent control or anything stopping evictions. But, you know, once you learn how to navigate them from an operational perspective, you develop the right processes and workflows, it starts to become non challenging at that point. So it's really about adjusting and coming up with the right processes to adapt to some of these regulations, because they are very different by state.
David Moghavem 26:27
Yeah. So I guess give an example of like, maybe. Some way we were able to kind of adapt to a regulation, I know, like there's so many different states that are the regulations keep changing, and then we, as Natalina said, we learn the hard way sometimes, but just give us a little bit of lens in some of these processes that maybe the audience can pick up and say, okay, maybe I should start implementing these in my properties.
Johnny De La Espriella 26:51
You know, we've seen it in some markets where there are delays with the eviction processing. So there are times where we will adjust and hire private process servers or additional resources to speed these things up. You know, when it comes to rent control or something along those terms, also, you know, really looking at what are the best strategies to to still navigate that, you know, they are also a lot of from an age, from a human resources perspective. So we have a great team as well and human resources that's also having the right process in place and working with our operations teams to make sure we're abiding by all these regulations. Yeah,
David Moghavem 27:29
I would say, like with Colorado, for instance, like some of these regulations that just keep coming and changing, it's just been super tough, and we're seeing it kind of hit. But if you can get you wrap your head around some of these laws and rules that are and the minutia of it, and not only, like you said, getting the right wording on the notices to make sure it doesn't reset. That's how you can kind of create that alpha in outperforming on some of your markets.
Natalina Rettew 28:02
And I think it's really we've seen this before. When AB 1482 you know, rent control for California came, there was this over correction, where you had a massive amount of month to months, you know, people it was just not enough of a discount to sign a 12 month lease. It wasn't worth it. So they rolled month to month. And then Oregon, SB, 608, same story, maybe less so on the month to months, but just kind of this, this over correction, of people trying to figure out how to navigate these, these strategies, right? Can we even implement valet living in Oregon? Right? That was a question at that time, and how we could do it. And now we're seeing it in Colorado. And what I would say is, you know, now that we're five, six years down the road, maybe seven years with with some of those regulations, things have really stabilized for California and Oregon. I'm not advocating for these regulations. All I'm saying is stabilization can come for Colorado,
David Moghavem 28:56
yeah. Like, stop changing the rules, right? Like, we need a playing field that the rules just stop changing. And I think now you're seeing, as you said, stabilization, where it's like, Okay, now we have time to learn. Now we have time to to do the processes the right way, and I think that's part of it, for sure,
Natalina Rettew 29:14
and leaning really heavily on our apartment associations to help, not only for the advocacy side, but for help on the interpretation, making sure that we don't step outside the line. Because, you know, we certainly we have a business to operate, and we have residents to take care of, and we take care of them by being able to pay our bills. And so, you know, we're towing that line, but we also are not interested in breaking the law, right?
Max Sharkansky 29:39
That's, that's a really good point. As you asked that question, I was kind of thinking the same thing that that Colorado is going through like a certain like Californication of the state, but where California was doing it in, like, 2016, 17, 1819, I remember all of us were, like, tearing our hair out, trying to figure trying to just keep up with the regs. And then it stopped. And then Oregon too. And I, but I remember Oregon, you know, it's a smaller state, and you're, you get a little bit closer, you talk to a lobbyist, somebody, and you know somebody who, they know people who are in state government, and Oregon was saying, you know, we're gonna do these two three things, and it's pretty much over, and that's what happened. And Oregon was a little more stable. So they passed a couple laws, and then they passed a housing law here and there, like any state does, but at this point, it's stable, and we know what framework we're working within, right? And I think Colorado is gonna get there pretty soon. It seems like you know, most of the regs have been already done. It's just been an excruciating process, like getting on a weekly call with your LP and saying, why are your why is your bad debt, you know, so high, and you say, Well, we had to reserve our notices. Our notices got kicked out. Well, what you didn't serve your notices correctly? Well, no, they pass a new regulation that, like, they have to be in multiple languages, or the notice has to have a certain disclaimer on it, and our notice didn't have it, but they passed the law in the middle of the eviction, so now we have to reserve and it, it just it makes it really, really challenging to operate as the goal posts
David Moghavem 31:08
are moving. Yeah, I guess one question for you guys is, since you two have joined Max Natalina, Johnny, like, has there been any operational philosophy differences or things that may say, like, you know, I know you've been doing it this way for a while, but I think we should do it that way. Has there been any kind of. Differences in opinion, or even on that same note, has there been anything where you guys have seen the way we run our process? You're like, you know what? I really like the way that's ran. I you know, we never did it that way, but I like that. I guess any examples of that, I think
Transcribed by https://otter.ai
Max Sharkansky 1:30
However, the notice has to have a certain disclaimer on it, and our notice didn't have it, but they passed the law in the middle of the eviction, so now we have to reserve and it, it just it makes it really, really challenging to operate as the goal posts are
David Moghavem 1:44
moving. Yeah, I guess one question for you guys is, since you two have joined Max Natalina, Johnny, like, has there been any operational philosophy differences or things that may say, like, you know, I know you've been doing it this way for a while, but I think we should do it that way. Has there been any kind of differences in opinion, or even on that same note, has there been anything where you guys have seen the way we run our process, you're like, you know what? I really like the way that's ran. I, you know, we never did it that way, but I like that. I guess, any examples of that, I think
Johnny De La Espriella 2:23
I've seen operationally, we're pretty, pretty aligned. I would say, you know, from from where I come from, I have not had to change much of operational procedures. It's really been a lot of fine tuning and continue to build on what we have. And as Natalina mentioned, you know, implementing Power BI and having a lot of different resources to really monitor our performance. But I think we've been pretty aligned in our operations, actually?
Natalina Rettew 2:51
Yeah, I would say it's more of an adjustment on just how we make decisions. So we were just talking about, like, wow, in my old companies, just analysis paralysis, like needing to run the model 100 times before we decide to go with like a meet Elise. Meanwhile, shark and I are on the phone with our rep, with me, Elise, asking a couple of questions, and on the phone, he's like, Okay, I signed the contract. And I'm like, Oh, that was happening right now. Okay, well, I guess we should figure out what properties are gonna go first in the pilot. And I mean, they're blowing us up today. I'm supposed to have a call with them. We haven't picked the property, so we're gonna do that, right? But it's great. It's like moving at the speed of business. And sure, sometimes it can be a little hectic for that moment, and then the dust settles and we figure it out. We had some fun banter when I was new about delinquency and in terms of negotiating with residents or maybe a promise to pay, or, you know, hey, they pay eventually, right? And it's true, like we have some properties in Northern California with low bad debt, because we accrue the bad debt at 90 days right? Days zero to 90, someone could pay in that time, whether it's day three or day 60, and it won't, it won't hit on the the books. However, our mortgages still do on, you know, between the fifth and the eighth of the month, depending on the loan. And so I think that was something where, I mean, we quickly got on the same page, but I came in and there were some different practices and and we've had to kind of retrain some of the site team who were used to doing things a certain way for a certain amount of time. But I think in explaining what's in it for them, the benefits, why? The why behind the what, we've really been able to get everyone on the same page and aligned
Unknown Speaker 4:46
Nice. Max, nothing to add. That's their question. Yeah, that's
Unknown Speaker 4:51
their question to answer.
Unknown Speaker 4:52
Fair Fair enough. Fair enough.
Unknown Speaker 4:56
I guess you know some closing thoughts.
David Moghavem 5:00
I we talked a lot about AI and all that, but I guess maybe separate from that, looking forward the next couple years, and I think it's going to be a little bit of a better operating environment. I hope fingers crossed, better operating environment. What do you think will be like, the changes that'll have the biggest impact again, like we talked about AI, but maybe like something, something else, other than AI, of like operational impact at Tryon, as we move forward the next couple years,
Unknown Speaker 5:35
processes, efficiencies in operations,
Unknown Speaker 5:40
not all at once.
Natalina Rettew 5:42
I mean, scaling our third party could be something that really takes us to the news,
Max Sharkansky 5:47
breaking news, breaking news. We're getting into the third party management business. And, you know, I think we do it pretty well for us. Oh, sorry, yes, sorry, we're getting into the third party management business. I'd like to think we do it pretty well for ourselves, at least. You know, most of our LPs, not all, have thought so, and we want to offer that service to others. We have the infrastructure. We have the personnel from Johnny and Adelina all the way to the, you know, the great regionals, as you pointed out earlier. And right now, we have an amazing team of regionals. We've had some personnel changes, really good regionals, Johnny, you know, Johnny came on earlier this year. We made some personnel changes at that level as well. Right now, the team is just triple A plus. I. Are great site level people, and we have depth. We have depth in market with vendors, and we understand markets, so we want to offer that service to others. And the Genesis was we've had over the years, some of our LPS call us and say, Hey, we own this other property with this other sponsor, or we own it ourselves, direct. It's a mess. Can you help us manage out of it? And we've done it, and we've done it successfully. And right now, we're actually creating a brochure, and we're putting some of those case studies in the brochure, so we're gonna be building out that business. And we're super excited for
David Moghavem 7:04
it, yeah, I mean, I'm super excited for it because I've seen how successful we've been third party kind of as a favor, like you said, for like, an investor who said, like, please get us out of this hole. And we've done it, and we've gotten out of the hole, and now with Natalina and Johnny on the team, I feel even more confident. And I think our edge and our alpha through our management is something that maybe I don't know if, like, Oh, we're sharing it with the world, but it's just something that we can really capitalize on, and it has so much potential because we manage. I've noticed, like, in such a different style than your typical third party, the big names, the great stars, the AMCs, this. You know, there's just different alignments of interest, and I think by being on the principal side, we see the NOI. We see like the bottom line, and so we know how to manage for maximum potential, also of value. It's not just about, you know, being passive and managing for occupancy, but it's like really capitalizing on all efficiencies of what a potential of a property could be
Max Sharkansky 8:12
absolutely and I think we're going to be because we're not a management company. We're not started as a management company, and we're not going to be just like, you know, trying to figure out how to maximize our revenue and how to make a couple bucks here and a couple of bucks there, but we're looking at it as owners, right? So you're getting, you're getting an owner operator who's managing your property the same way they'd manage their own property. There's no difference. We're talking about in management meetings. It's the same thing. So that's why we have these multiple case studies where we've taken properties over and we've had significant improvements in four to nine months. Three off the top of my head, one was a boutique local management company that we took over, but two others were national management companies with 100,000 plus units, one with several 100,000 units, where we took over, and occupancy was in the low 80s, and today they're both in the 90s, mid 90s. So we're excited to offer that to other people.
David Moghavem 9:08
Yeah, I think again, with, like, some of the bigger names, you don't know what team you're gonna get. I think with us, you know exactly what team you would be getting. And by being an owner and having the team the nimbleness that we have, we're going to be nitty gritty in the weeds more than maybe a C team at a big company would be getting correct. And we still have, you know, the, I don't know if this is being offered. I might be Miss picking, but, like, we have our own master insurance policy. We have our own, like, of these prop tech tools. So, like, that's, that's part of, is that part of the package is the master, yeah, okay, great, yes, Master policies. And anybody, that's a huge edge. Yeah, that's an amazing edge. So a
Max Sharkansky 9:53
lot of the management companies either don't have them, or if they do have them, they're very snobby about what properties they put on, because they don't want, you know, an older junkier property on their master for obvious reasons, but we'll take the older junkier property, so we don't have room to be snobby yet,
David Moghavem 10:10
yeah, yeah. I mean, well, you're, you're really ripping on our portfolio, but, yes, old junky, but we made it. We've made it beautiful and but we have experience. We have experience in that vintage. And having experience there on Ops is important. On project management, it's important how to you know, on acquisitions, how to inspect for those systems, and then on the ops side, how to address, you know, a pipe leak, or address some of these issues the right way. Because with that vintage, there's a lot of hurdles. It's very different than new construction. There's a lot of mold, asbestos, this sounds like so like knowing the right way to treat it the right way. That's also safe, important, most importantly, but also cost efficient. I think that's something where we've learned as an owner that maybe some other bigger third party managers might have issues with. Yep,
Johnny De La Espriella 11:04
you said it well too. It's also the expertise and all asset types we have a very diverse team currently. You know with that have managed luxury, new developments and across a lot of different markets, a lot of value add to your point where there may be a lot of maintenance issues and knowing how to navigate through that. So I think we will bring a lot to the table, personalized attention, owner mindset, but also that expertise in a lot of different markets and with different assets. Types, from myself to our regional managers and all of our support teams.
David Moghavem 11:34
Yeah, I had the pleasure, like, when we did our West Coast tour of really, like, sitting down with our regionals as well. And I turned to Max, I think it turned to you guys too. I'm like, wow. Like, we really have such great teams, like boots on the ground at this point that when we were first breaking into markets that was harder to find, and now that we've established ourselves in our markets, it's been amazing to see, like, the higher the talent that we have on that regional level, it's making me as kind of an acquisitions guy, excited to scale up in these markets and be like, okay, like we can execute. So that's been huge for us, and also credit to the rest of the team. Like not everyone can be sitting in this podcast, the rest of the team, Carlene Sanchez, Simon Rashad, like every, everyone really puts their part of the ops as well. And it's been, it's going to be a great, great next chapter for sure, absolutely, one thing I wanted to do is like a rapid fire round on Alps. One word answers gonna say, you know, say a question. One word answers will go around. And we'll do a couple of these. And, yeah, I'll start favorite op KPI occupancy.
Natalina Rettew 12:56
Return on headache, R O H, yes, R O H,
Unknown Speaker 13:00
that's a good one. Economic occupancy.
David Moghavem 13:03
Economic occupancy, okay, most underrated prop tech tool. We really talked a lot about Prop tech, but we'll go here,
Unknown Speaker 13:13
marketer, a tool.
Natalina Rettew 13:15
I'm going to say, AI revenue management, just because it's getting so much hate right now. Revenue
Max Sharkansky 13:23
management, revenue management is, I'm sorry, I know this is very not fireside, but it is, if you have the right people running it. It's incredible. I'm gonna say chat bot.
David Moghavem 13:34
Chat bot. Yeah, nice ops headache. You'd outsource
Unknown Speaker 13:39
accounts payable. Ooh, that's good. That's good. That's
Natalina Rettew 13:44
a good one. I'm gonna say serving notices. Serving
Unknown Speaker 13:48
notices, good one.
Unknown Speaker 13:53
In the spirit of
David Moghavem 13:56
one word answers, sorry. Self guided tours. Self guided tours, okay? Because
Max Sharkansky 14:00
the leasing guide, leasing agents not doing it, right? Yeah, yeah, sourcing it, software and also human being, yeah.
David Moghavem 14:06
And then I guess on the other side of it, ops, aspects that cannot be outsourced, site
Unknown Speaker 14:12
management, yeah, that's a good
Unknown Speaker 14:14
one. Resident retention,
Unknown Speaker 14:18
yeah, and all that goes into it, right,
David Moghavem 14:20
yeah. Like keeping people on, for sure, I
Natalina Rettew 14:23
think those are good answers. People management, yeah, right, yeah,
David Moghavem 14:28
okay. I think that's good. That was good. That was a good exercise. Appreciate it, guys. It was, this was fun. It was great to have you guys on board. Great to all be together, right? We're, you know, Miami office, San Diego and LA, like you're Miami LA, and we're all so when we're all spread across, doing work and just talking through teams and stuff. It's great. We're productive, but it's nice to sit down have dinner like we had a couple nights ago, and just like, put our heads together and just take a deep breath and and collab. So appreciate it. Thanks for hopping on. Thanks everyone for tuning in. And yeah, this was great. Thanks. It's great.
Transcribed by https://otter.ai