How can you find someone honest and responsible to manage your real estate investment properties? Who can you trust? Today, Clint Coons of Anderson Business Advisors talks to Doug Brien about what to consider when looking for a professional property management company. Doug is the co-founder and CEO of Mynd Property Management, which manages about 8,000 units in 16 markets and enables remote real estate investing in 20 markets. As a former professional football player for the New Orleans Saints and San Francisco 49ers, Doug is a true competitor with brains and brawn on and off the field. By the time he retired at 35 years old, Doug was an experienced real estate investor.
Highlights/Topics:
- How did Doug end up with something to show for being in the NFL? Instead of spending all his money on fancy jewelry and cars, Doug built wealth via real estate investments
- How did Doug get started in real estate investing? Focused on apartments, then single-family homes in foreclosure to raising private funds to form Waypoint Homes
- What did Doug learn about real estate investing? Became comfortable using technology, systems, and data to manage his portfolio
- Why did Doug form Mynd Property Management? Property management business is hard, so decided to start and build a company and technology it uses
- What home valuation tool does Mynd use? INVESTimate determines the investment potential of any home in the United States via artificial intelligence (AI) and machine learning (ML)
- What issues do investors deal with when choosing a property management company? How do they not get ripped off? Don’t hire and individual, but a company; trust is earned
- What does Doug focus on? Build and use own platform to give investors more access and transparency to data
- How is data used? To manage investors’ properties and make it available to them for peace of mind of knowing people are paying attention and things are/aren’t happening
- Does Mynd Property Management provide recommendations/referrals? Yes, talk to other investors experiencing the same challenges
- What data should be obtained? Find out how long it takes to lease, what kind of rent per square foot is achieved, and other financial reports
- What is Mynd’s property prescription? Inspections and in-depth analysis of the property to put together a plan on how to maintain or improve your property
- Has Doug had issues with bad property managers who didn’t keep up their properties? Yes, get data and ask for insights into other markets to grow your portfolio
- How to get started in real estate investing? Educate yourself, understand the tax benefits, and learn how to do it
Resources
Anderson Advisors Tax and Asset Protection Event
Full Episode Transcript
Clint: Welcome, everyone. Hi, it’s Clint Coons here with Anderson Business Advisors and this is another weekly podcast. Now this week, what I wanted to do was talk about a subject that just came up when I was teaching an event down in San Francisco. I was speaking to a California real estate investor and we were discussing her properties. More particularly, engage in a 1031 exchange, take those properties out of California, and go to an alternative market. A different market across the United States that would produce greater returns.
Now, one of the questions that this investor kept bringing up to me was, if I move to that market and I invest there, my concern is, who’s going to manage my property? I said, “Well, you can look for some professionals, go to the market, interview people, see who they’re using,” and they always kept coming back to, “But how do I know they’re not going to steal my rents or mismanage my properties?” This investor, their concerns are well-founded, because I myself as you know, own properties across the United States. I have a portfolio of over 100 properties and I have dealt with this.
When I first started investing, I started in Indianapolis. I had a few properties there, and for six months, I collected zero rent because my property manager was stealing from me. In fact, it got so bad when I flew out there to check on my properties to find out why it was not getting paid rent, I found out that my property manager has actually died and his kids were stealing the rents from me.
What I realized is that you need to vet the people you work with. I thought, this week could be a great opportunity to bring on a good friend of mine, Doug Brien from Mynd Property Management that can talk about the things that you all should be looking at when you’re considering using a professional property management company. Let’s face it, managing it ourselves, it sucks. Who wants to deal with tenants and toilets? Let someone else have the stress. Let’s just reap the rewards of the real estate that we’re investing in.
Doug, thanks for coming in today.
Doug: Yeah Clint, thanks for having me.
Clint: Before we get started, before we get into the meat of the matter, why don’t you tell everyone your story about how this all got started, where you came from. I know it’s really interesting, and I know the listeners are going to want to hear that, because that’s going to add context to where we are now.
Doug: Sure. I think I’m like you in many ways, a passionate real estate investor. I got into it in a little bit of a different way than most. I actually […] by San Francisco […] almost. I was a placekicker and I had an opportunity to play in the NFL. When I went in, one of my goals was not to be one of those guys who had this unbelievable opportunity and ended up with nothing to show for it. As a placekicker, obviously, it’s a pretty volatile position. I had no idea how long it would last. I actually ended up winning a Super Bowl with the 49ers in my first year, my rookie year. I walked straight into the Super Bowl and got a nice Super Bowl cheque in addition to a pretty good salary.
I decided that, that was a good time to start researching various investment […] and think about, how was I not going to be one of those people that have nothing to show for it besides spending it all on jewelry and fancy cars.
So, I didn’t do that and I did research and I figured out that real estate was a really great way to build wealth over time, but to me also, equally as important is to build a really strong, consistent, after-tax cash flow. I wanted to put myself in a position post-football to where I could do what I wanted to do instead of what I had to do to pay bills for whatever lifestyle that I wanted.
I started learning about real estate investing every year and ended up playing for 12 years and was able to build all of that. I have a pretty good portfolio, but more importantly, learned a ton by doing market research. I find that five year deal with […]. At one point got an MBA at Tulane and focused on real estate finance.
When I retired at age 35, I was a pretty experienced real investor. It was mostly focused on the apartments, but then in 2008, I got focused on single family homes around the foreclosure crisis that I co-founded a company called Waypoint Homes.
We started out by just buying some single family homes in the Bay area where the prices went down 50%-70% yet rents were stable, which meant that there was a really attractive 10% class cash-on-cash returns, which in the Bay area was unheard of.
It was such an interesting opportunity that I partnered up with a friend of mine and we started raising private funds, we […] institutional funds. It ultimately led to a public company. Long story short, Waypoint Homes, we ran it for 7½ years. We bought 17,000 single family homes, mostly on a one-off basis, 13 markets across the US, and ultimately turned it into a single family dedicated REIT that we ran for two years. Ultimately merged with Colony American Homes, which then went on to merge with Invitation Homes, which today is the largest owner and operator of single family rentals in the US.
Obviously, along the way, learned a lot about real estate investing but I would say more importantly, how to use technology, systems, and data to run and base in one portfolio and really do it in a more sophisticated 21st century way that maybe you’re […] and more comfortable.
Clint: Wow. I bet a lot of the listeners are thinking when you’re telling that story about walking right into the Super Bowl in the first year, “Hey, I did it. I’ve accomplished everything and I’m out.”
Doug: Yeah. It’s funny, you’re supposed to win the Super Bowl and walk out in glory. In the last year, I got that part backwards. […]. I did manage to play for 12 years and it was a fun ride for sure.
Clint: Absolutely. That’s great. Your knowledge in this area has got to be unsurpassed from a lot of the guests I’ve had on the podcast, just the wealth of experience that you’ve had in the real estate market and building up these properties is phenomenal. Why did you formed Mynd Property Management? How did that come about?
Doug: Great question and it’s the one I get asked a lot. I did pretty well. Waypoint built a successful company and we started Mynd. Property management is hard. Like you said, it’s a hard business and it is. It’s ironic because when we went into Waypoint Homes, our goal, the way we thought about putting the company together was to just hire a property manager. We found it that easy, it was not […] that are real interest like.
What became very clearly, if we were going to execute on our goals and deliver the returns that we knew were possible, we were going to have to manage these properties ourselves. So, because we built our own property management company from the ground up, including much of the technology that we ran it on.
We […] about it, but we also realized that it’s a big pain point in the industry. Your story that you just said is a similar story but with a different ending for many folks. I talked to many investors and it’s like, “I want to diversify. I want to invest in the market that makes the most sense versus the market that’s closest to me,” but what I get stuck is property management. Who’s going to watch it for me? How am I going to know it’s doing well?
With my partner, Colin and I decided to do after Waypoint was to find another company. Instead of raising money from institutions and making money from Wall Street investors, at the end of the day, we’re individual investors and believe strongly in real estate, and the tremendous wealth creation vehicle.
We’re very familiar with how hard it is to invest in properties and to build a proper portfolio. We set out to build an investor platform because we think property management is so challenging yet vital to success with an investment. We decided to start by building a property management company, but we’re doing it in a very different way. We’re building all of our own software, and the idea that […] we’re going to build on other features such as tools to help investors buy a property, tools and capabilities to help people finding at things, insurance. Everything you need to pick a property, buy it, and ultimately deliver on the returns that you expect, and to create one company that has one simple user interface, and one set of consistent reporting, one operational performance standards that someone can […]. We immediately think there’s a huge opportunity for growth and also a huge need. It’s hard to invest and […] return and we want to make it easier. That’s why we started Mynd.
Clint: That is like you said, such a need for investors, because somebody who become paralyzed, they see the opportunities, they want to move forward, but then they always end up investing in the area in which they know which is local, because they can see it, touch it, feel it, go out to it, and they feel like they have more control, because they don’t want to turn that control over to someone else.
We’ll take a quick break here and when we come back, I want to talk about some of the issues that we face or that investors face when they choose a property management company. Let’s take a quick break and we’ll be right back, talking about investing in real estate and finding a property management company.
Welcome back, everyone. It’s Clint Coons of Anderson Business Advisors, and in this podcast, if you haven’t caught the first part, we are talking to Doug Brien of Mynd Property Management. Right before the break, we got into talking about what an individual investor should look for when hiring a property management company to manage their real estate, because there are so many questions that come up.
You know what? I don’t know those answers. When people ask me that, I tell them, “Let’s go find an expert,” so I brought on an expert with me today that has built a mega company that offers these services to individuals. Doug, if I’m an investor and I decide I want to invest in Oklahoma City, for example, and I’m going to buy 15 properties there, finding that property manager, what are some of the things that I should look out for, maybe the questions I should ask. How do I go about doing it to know that I’m not going to get ripped off?
Doug: Good question. […] I think first and foremost, just […] you can’t really hire the individual. I’m a big proponent of hiring the company. People switch jobs, like you said, people die, move on to other careers, and I think you have a much better chance for success if you hire a company with an approach, where you know that people are going to come and go, but at the end of the day, if it’s a company that’s reputable and has a good approach.
One of the things that I learned at Waypoint and for me is vital in terms of my comfort, for me, trust is earned over time. What I tend to focus on is data. Part of the reason that we’re building our own platform is because we believe that investors should have more access, more transparency to data. Again, going back to your example, if you had a real time access to data on how your property was performing, it wouldn’t take you six months, or three months, or one month, or even a week to figure out that money was missing.
Part of our approach, again, is using our own software and then creating an app so that owners of real estate can actually get real-time data. As money is collected, you see it show up. If you had a vacant property on a real time basis, you can see leads showing application, those are three data points that we use to help us […] rent, adjust rent, and know if we’re getting enough market demand. We use this data to manage your property but then we also make it available to you, so you can have peace of mind and know that people are paying attention to your property and things are happening or not happening.
Clint: One of the things that I’ve also seen happen before is the property managers neglect the property, it falls into disrepair, you don’t know about it, you get cited or fined by the city because now your property is an eyesore and the grass is 7 feet tall. That is such a problem, I think that’s why people are hesitant to engage with property managers or to invest in other markets. What I hear you saying is that you have to have a lot of transparency there. How about if I were to contact you and I ask, say, for referrals, do you typically provide that or do you recommend people who asks for that?
Doug: Absolutely. I think talking to other investors. There’s all different types of investors, I think it aldo […] asked that you manage with investors that are similar to you. This could be your first rental property and maybe it used to be your house and you’re moving out of it because you got transferred or something.
There’s investors, lots of investors that has that exact same set of circumstances and they could think about it the same way, and then there’s other investors who are maybe more like me or you. You’re trying to grow wealth over time and is really focused on this asset class and […] 5 properties or 10, but the goal is to grow that. Talking to a like-minded investor is really important, but I also think asking for data. The things that drive return than anything else are they can see any repairs and maintenance.
We’re a company that, if asked, we could give you data, not just overall data, but by marking it on how long it’s taking us to lease? What kind of rent per square foot are we achieving? We can show you our financial reports, both online and through the app and PDF, they can be mailed or the portal in which you can access this data.
Inspections, to your point about maintaining an asset, that’s a big part of a property manager’s job. We have something we call the property prescription. When we come in and see your property, we do an in depth analysis and actually put together a plan on how to maintain or improve your property. Then we actually budget for it and put aside funds so that we have the money to […] over time and really make sure that we’re protecting the integrity of the asset, but also maximizing […] the most rent possible.
I think asking for data and being able to look at those interfaces that you’re going to have to experience in advance is very important. Something that we’re also very passionate about is when you talk to a lot of investors and you get, “Are you doing repairs and maintenance, or leasing, or anything like that and they typically will say, “[…].” This concept of benchmark data in a market is like, “Changes by season. Changes as the economy changes.” Really understanding what’s the benchmark, how is your property performing compared to the benchmark. If it’s underperforming, there are a lot of reasons why and our big focus is really looking at the asset and what can we do to the asset to make sure that it’s performing at or above the market.
Clint: What I’m gathering from this, your approach probably comes from experience. Having all of those properties in Waypoint, obviously you have those managed before you started your own property management company. Did you ever run into those issues like I faced, where you had bad property managers that didn’t keep your properties?
Doug: Yeah, I mean, your story is pretty bad. […] your story, but […]. We have 13 markets with 17,000 properties. I didn’t want to get on the phone and say, “Hey, how are these properties going inTampa?” I don’t care what somebody says, I wanted to look at the data. I pick up my phone, I went to my computer, and looked at our own technology system and looked at the dashboard, simple dashboard. How are things going? Yeah, these are […] myself and our management team. We’re very focused in we figure it out. That is how you learn the large portfolio nationwide where you can’t lay your eyes on every single thing. You have to be looking at that data and being out and performing.
It’s really, to your point, that experience that is driving us towards trying to create that same investor experience for the everyday individual investors who’s got a property or two, who wants to grow, but historically has just been too hard and […] that trust. I’m saying, “Don’t trust that, trust the data. We’re going to show you lots of data and over time that data and our performance is going to earn your trust. That’s what’s going to bring back to us to ask for insights into other markets and other places to invest, so you can grow your portfolio.
Clint: Yeah, even today, I don’t have that transparency with my property managers and it is frustrating. You typically get a spreadsheet at the end of the month or maybe three quarters away into the second month and you get one cheque and then you go through and you have to decipher all this information. Basically, I take two aspirins before I even attempt it because it’s so frustrating. I turn it over to my bookkeepers and say, “You figure this out and then you report back to me with the data that I need.” So, that’s important
You brought up something else there that I hope everyone caught that by having that data, it’s going to make you a better investor. If you have that level transparency, then I’m going to be able to look at other markets that you’re managing. You’re basically boots on the ground, so if I wanted to start investing in North Carolina and you’re managing a property there, I could see what the returns are like when theCapEx is running and get a sense of, “Yeah, is that the right market for me?” It sounds like you’re expanding in Nevada area well to help people find places to invest.
Doug: Yes, and really trying to align interests. If you’re talking to a broker using our platform to help make the buying decision, there’s no bait and switch, we’re not making the transaction and then we throw you off […], and say good luck. No. We’re only going to buy in the markets that we manage, so that hand off between the buying phase to the management phase is more seamless and aligned because it’s one company.
I think you also got a good point about what you were talking to, transparency is an interesting thing. Transparency isn’t always a good thing. It’s like, “Oh my gosh, this isn’t going well.” Just because we offer transparency, it doesn’t mean everything is always going well. Sometimes, in a vacancy we have to way up in the market. At least we know.
The thing I hated the most about that when I think of it as the 20th century paradigm of you get your financial report from the month before. In arrears, it’s all very interesting, but it’s not actionable. Why I’m so passionate about real time data is because I can see when my property hit 18 days and I can see how many leads an application, and showing. Showing so I can avoid getting that painful statement by dealing with the problem as it’s happening so you can solve the problem versus digesting the problem when it’s too late. I think that’s really the power of real- time data.
Clint: I completely agree with that because I do see that when I have vacancies, they show up on the report, the property is vacant, then maybe it’s on the report the next month, and you don’t know if […] actively trying to fill that property.
Doug: You’re like, “What happened?” […] like, “Okay, […] I can see on my app this day or this week, we’re not getting the showing. What’s going on?” Hopefully that interaction happens the other way where our team is calling you and saying, “Hey Clint, it’s Monday, we’ve been on for two weeks. […] with my property monthly.” My property manager reached out. I knew I was being aggressive. We look at the data, it just said that we’re getting people looking at it, but we’re not getting the showings.
What that means is, they’re looking at it because it’s interesting but the price, and the product, and the market are not matching up, so you’re not going to get showing. Let’s lower it to $2999, below that $3000 threshold and we’re going to watch the data for another week. To me, that’s a healthy way of dealing with vacancy management.
Clint: I would completely agree with you on that, because as I stated, the answers they give you a lot of times is that, “Oh, that vacancy rate? That’s within our pro forma. We told you, you could expect 10% vacancy rate.” That doesn’t mean I want a 10% vacancy rate to run the entire period or term. That’s funny you should mention that because I know those answers that they are keen to throw out there to get excuses.
If I’m listening to this call right now and I want to learn more and engage you, just talk about where I should be investing, where can I go to get some of this data to start looking at possibly bringing you on to manage my portfolio in the markets that you’re in, where would you direct the listeners go to?
Doug: I think for starters, you go to mynd.co. The whole reason for the word Mynd is we’re trying to deliver peace of mind. Unfortunately, mind is taken, we ended up with Mynd. Go check out the website. You’ll see in the top right, there’s a menu for owners and if you click on that, you’ll see our investment marketplace. That’s the place where you can look for properties. The rest of the website if you go to the owner section, there’s lots of information about what it’s like to be an owner.
Based on your criteria, we have our buying platform. Basically, it stacks in all the data from the MLS and it should be the 10% that are best for rental property. Based on your search criteria, it will narrow the type of […] more, to give you the best property. For example, I’m personally always buying myself, I’m looking at Atlanta. Atlanta’s got some interesting things going on. Dallas, Houston are an interesting market. These are all markets that we help people buy and manage them.
Clint: I was trawling around your site and I think I got lost in it for at least a good hour, because there’s so much information there that I was just eating it all up. I think to anybody who’s listening, you definitely want to go to this website and experience what I’ve seen there. It’s only going to make you a better investor by having this information so you’re not making poor decisions about where to put your money.
Doug: Yeah, and I think you have a really good point. One of our […] is education. We have tons of content on how to be a better investor. The market we’re focused on, small apartments, and single family rental, […] it’s a huge market. We know that for some it makes sense and they ask themselves, “Will they work? Are they good at it?” That might change at some point, you may want to hire a company manager. People like […] make money so you can buy more properties and you need a property manager. What I said about being there for an investor when they need us, first and foremost, to educate and just raise the level of awareness, like this is how you build wealth through real estate. That’s all there on the site.
Clint: Definitely. Guys that are listening, go to the website, check it out. It’s mynd.co. In the show notes, I will have the website address as well. If someone wanted to reach out to you, Doug, probably not you but your team, how best can they get a hold of you guys?
Doug: The website is the super easy way to do it. There’s basically form […] where you can go request to talk to a salesperson and they’ll just put in an inquiry in our Contact Us, […] quickly.
Clint: They can’t get your personal cell phone number?
Doug: When you’re interested in a property, you’ll get my personal cell phone.
Clint: All right. Thanks for coming on. I know that the listeners got a ton of information out of this. I appreciate you taking the time. I know you’re a very busy individual. Is there any parting comments that you want to leave with the audience?
Doug: […] and obviously if people are listening to your show, they’re on the right track, but I think you and I are both testimonials to the fact that real estate is the greatest wealth creation vehicle known to American capitalism, 90% of all millionaires in the last 200 years. It should be a large part of their wealth creation to real estate […] tax benefit.
Educate yourself, understand the tax benefits, learn how to do it, and start. I think that’s the hardest part. You can do lots and lots of studying, and there’s challenging aspects to real estate, but the only way to get started is literally just to pull the trigger. Typically, the hardest property to buy is your first one. Start today.
Clint: Absolutely. Hey, one last question. Saints or 49ers?
Doug: I live in the Bay area, so it’s hard not to root for three names, Kyle Shanahan. His dad, Mike Shanahan was our offensive coordinator and Kyle was running around in the sidelines. He’s our ball boy and he’s now the head coach. That’s pretty cool and I live here in the Bay area, so I’m a 49ers man.
Clint: Okay, well there you have it. Well, thanks for coming on and I wish you the very best.
Doug: Yeah, thanks. I appreciate you having me on. Take care.
Clint: Bye-bye.
Doug: Bye.
