Show Me Your Numbers! Brad Larsen on the NAS

February 13, 2019. By Joshua Frazier

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