
Show Me Your Numbers! Brad Larsen on the NAS
In the second portion of this 3-part series, I am speaking with Brad Larsen of RentWerx Property Management. Together, he and I discuss the ins and outs, ups and downs of current practices and what we can look forward to with the implementation of NARPM standards.
Topics covered:
- (1:15)- Intro
- (2:30) – How did you get to this point?
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- (2:50)- PM Growth Summit/NARPM background
- (4:00)- Benchmarking study
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- (4:55) – Why should anyone else care?
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- (5:05) – Labor Efficiency Ratio
- (5:57)- Strategic
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- (7:40)- Profit per Unit (PPU)
- (10:25) – Pull the industry into talking about entrepreneurial conversation?
- (10:50) – Ability to compare NARPM standards
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- (12:20) – Labor costs to revenue
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- (12:50) – Business benchmarks
- (13:40)- Owner compensation
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- (12:20) – Labor costs to revenue
- (14:20) – Data
- (14:30) – “Green fielding” Austin
- (15:20) – Designed for single-family management company
- (16:20) – Implementation
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- (17:00) – Start Today-Start Now
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- (17:34) – Implementation process
- (18:25)- Accounting challenges
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- (17:00) – Start Today-Start Now
- (18:59) – 3 Strategies of implementation
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- (20:05) – How many small businesses are dealing with other people’s money that needs to “stay in the cookie jar” and not get touched?
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- (21:09)- Fraud
- (21:40)- Financials Controls Guide
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- (22:50) – What is the most meaningful things you do to prevent fraud
- (23:00) – Dual authentication/outside firm
- (25:00) – Staff members are largest concern
- (25:30)- Book “Black Swan” reference: Barbell Strategy
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- (26:26)- Sanity of knowing your numbers
- (26:50)- Creating opportunities
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- (29:00) – What does exit-value optimization look like in practice?
- (29:20) – Transformed portfolio management compensation
- (30:20) – Compensation models need to evolve/change over time
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- (30:50)- Combination of personnel and model in place
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- (31:49)- Exit strategy (revisited)
- (32:38) – Offer pool expands as the bar is lowered for due diligence
- (34:13) – “Speed is my camouflage”
- (35:30) – Steps to roadmap to exit
- (36:50) – Business brokerage for property management companies
- (38:40)- Does this have the potential to raise service quality as a whole?
- (39:00) – Providing good service
- (39:50) – Building ethos
- (40:30) – What do you do to connect financial outcomes?
- (40:40) – Compensate on renewals
- (41:14 )- 4 Specific Documents: (Chart of Accounts/Conversion Guide, Metrics in Definitions, Benchmarking Study, Financial Controls Guide)
- (41:40) – KPI’s
- (43:10) – Closing