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Show Me Your Numbers! Brad Larsen on the NAS

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.

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Topics covered:

  • (1:15)- Intro
  • (2:30) – How did you get to this point?
        • (2:50)- PM Growth Summit/NARPM background
      • (4:00)- Benchmarking study
  • (4:55) –   Why should anyone else care?
      • (5:05) –  Labor Efficiency Ratio
    • (5:57)- Strategic
  • (7:40)- Profit per Unit (PPU)
  • (10:25) – Pull the industry into talking about entrepreneurial conversation?
    • (10:50) – Ability to compare NARPM standards    
      • (12:20) –   Labor costs to revenue
          • (12:50) – Business benchmarks
        • (13:40)- Owner compensation
    • (14:20) – Data
  • (14:30) – “Green fielding” Austin
  • (15:20) – Designed for single-family management company   
  • (16:20) – Implementation
      • (17:00) – Start Today-Start Now
          • (17:34) – Implementation process  
        • (18:25)- Accounting challenges
    • (18:59) – 3 Strategies of implementation
  • (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?
      • (21:09)- Fraud
    • (21:40)- Financials Controls Guide
  • (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  
      • (26:26)- Sanity of knowing your numbers
    • (26:50)- Creating opportunities
  • (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
      • (30:50)- Combination of personnel and model in place
  • (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

Resources mentioned:

ProfitCoach Mixer at the Mirage
NARPM Accounting Standards