Matt: I told all of my teams, if you're gonna hire something out that you don't know how to do, try your very best to tag along with that that vendor.
Rory Anderson: Yes, learn how to do it.
Matt: Learn how to d watch what they're doing, so that you can do it the next time.
Rory Anderson: Welcome back to the Property Playbook, the property management podcast that unlocks leadership lessons from experts in the trenches of multifamily. If you've looked at a property budget lately, you've probably noticed the same thing that I have: that everything is costing more. Labor costs are up, materials are up, insurance is up, vendor pricing is up, and yet owners and operators are still expected to. To protect that NOI, deliver a great resident experience, and maintain their assets at at a high level. So the question becomes: how do you control costs without cutting those corners? And today's guest is the perfect person to help us answer that question. Joining me again is my friend Matt Heron, owner and founder of Facilitech. Matt brings more than 25 years of experience in multifamily maintenance, facilities management, and operations, and he's worked as a maintenance supervisor, a property manager. A regional manager, facilities director, and consultant. So he has a unique perspective on what actually drives operating costs and what separates efficient properties from expensive ones. And what I love about Matt is that he doesn't just talk about maintenance as repairs, he talks about maintenance as investment strategy. And in today's conversation, we are diving into where operators are wasting money. Biggest misconceptions about reducing expenses, how to get more productivity from your maintenance teams without burning them out, which is so important. When it makes sense to outsource versus bringing services in-house, And how a simple philosophy Matt calls eyes up maintenance can save thousands, sometimes tens of thousands of dollars in avoidable costs. We're gonna talk about the old benchmark of one maintenance technician per hundred units, the highest ROI maintenance programs he's ever implemented, and the smartest cost saving ideas he's seen from maintenance teams in the field. So if you're an owner, an asset manager, a property manager, maintenance leader, or anyone responsible for protecting NOI in today's market, you are going to get a lot out of this conversation. So let's get into it. Matt Heron, welcome back to the property playbook.
Matt: Well thank you so much. I am so happy to be here. Thanks for inviting me back. it's always exciting to to talk through these things, so
Rory Anderson: Yeah, we're gonna have a great conversation. So let's start off with a story from your life. I know in property management you've had a lot of crazy th things happen. share with us something that's happened to you that you're like, I just couldn't believe that.
Matt: Sure. Well, you know, it's it's hard to top the last story, but I'll I'll give you
Rory Anderson: That one is that one is really good. If you haven't listened to Matt's first episode, you need to go back and listen to his story.
Matt: I I'll I'll give you I'll give you another one that was it was still super interesting. so I was working at a p a at a site and we knew we had a a resident that was struggling with with alcohol. however We didn't think it would get this bad. So basically what happened is I was at a corporate retreat, and I I get a phone call from my maintenance supervisor or my maintenance tech, and he says, there's a car in the office. And I was like, Wait, what do you what do you mean there's a car? Like I honestly I thought he was joking. I was like, There's there's no way there's a an actual car in the office. he's like, No, there's a car sitting on your desk and I was like, Huh?
Rory Anderson: Ha ha. Ha
Matt: And so he he he he said, Yeah, this the he gave me the guy's name and and it so I knew exactly probably what happened. he said he seemed to have been intoxicated and meant to hit the brake and push the gas as he was pulling up to the office and his car is now sitting on your desk. And I was like, That is insane.
Rory Anderson: Yeah.
Matt: but the craziest thing was, and this was a younger guy, so I I don't really fault him for this, but he was like, I don't know what to do. I don't know what to do now. Like what how do you want me to push the car back out? I was like, No, no, no, no, no, no, no. Please don't touch anything. Like, you don't have to mess with anything. I said, Have you called authorities? Like fire, police, all of that, ambulance. You know, I don't even know if this guy he maybe he's not okay. he's like, No, we haven't done that yet. I said, Okay, well get off the phone with me. Let's call them first. and so it was it it's just it was pretty interesting because the the gentleman
Rory Anderson: Ha ha
Matt: He literally was coming to pay his rent but he was intoxicated and just n I mean, he just hopped the curb and just drove his car straight through our our wall into my office and it was it was the most insane thing I've ever seen. Yeah, exactly. That's yeah, yeah.
Rory Anderson: Don't drink and drive, kids.
Matt: it's definitely a good good lesson for that. But but I think I think more than anything it was it w the the cool lesson there was just knowing that I had been there at one time where I might not have known what to do and just being there to support that team and as soon as you know, I let five or ten minutes pass and then y you know, call back and find out what's going on. So it was yeah, it was a really, really interesting situation. So
Rory Anderson: Mm. Well, to your point, I think sometimes in this world of property management, you feel like you have to take care of every problem because you feel like it's your responsibility. but you need to know the limits and boundaries of where, you know, you do need to just call the police. Like this is not an issue you have to handle. This is an issue that somebody else is gonna need to come in and help you out.
Matt: Sure. Absolutely. Absolutely. Yeah. Don't don't take those those types of things into your own hands. So
Rory Anderson: Yeah. Well, and also sometimes residents expect you also to take care of things that maybe the authorities should be taking care of, right? Yeah. Good lesson. Yeah, I'm sure. I'm sure. well, let's get into our questions. So I I want to talk to you about this because it feels like every line item right now in multifamily budgeting has increased over the last few years. And
Matt: Sure. yeah, absolutely. Absolutely. Got stories on that too, so Sure.
Rory Anderson: I wanna know from your perspective, what do you think is driving the biggest increases in maintenance and operating expenses right now?
Matt: Well, I think from one, probably the biggest driver is labor inflation, plus scarcity, right? Like there's not there's not enough maintenance guys out there that are quality or qualified. Let me let me restate that. They're not qualified to necessarily be doing what they're doing. and so, you know, we're we have an underqualified group of guys that we're hiring and even so they're extremely expensive and it's it's just in in my mind at least and I I'd done this as as a a regional and as an on-site guy like you know if you can go if you can go down to Bucky's or McDonald's or anywhere like that and you're gonna make 17 18 bucks an hour and you're literally dropping fries it's the same job over and and over again all day long. But I'm telling you you g you you can come to work at our apartment community, but I expect you to be a jack of all trades. I need you to I need you to know some HVAC. I need you to be a plumber, electrician, you know, a a general contractor. Like you have to know all of these things. And I'm gonna pay you eighteen dollars an hour, right? it's hard to to make that make sense. So I think that's what we're seeing is the only way to entice these
Rory Anderson: Well
Matt: guys to even come and think about coming to work with our our industry is we have to offer more money. So I think that's the I think that's the biggest in my mind that's the biggest driver because it's not a stable cost. Right? Like it's not we can't we can't budget anymore like we're in twenty seventeen. We just it's it just it's not possible. So we have to look at
Rory Anderson: Mm-hmm. Yeah.
Matt: other areas where we can affect NOI, I guess, is the main one.
Rory Anderson: Well, and to your point, it's it's a supply and demand issue, right? Like you can't find people that are qualified and so you do you have to pay more because there's a shortage of them, right? And so you've got that issue.
Matt: Sure. And I'll put a little shameless plug in there. If anybody wants to hire our company, I can come in and train your guys for you. Like that's that's one of the reasons why I started the company in the first place was to develop training systems. because I think unfortunately, because these kids and these younger guys have not went out when they went to school, they didn't go to school for trade. and I I think we're starting to see some of that come back because people are understanding it's you don't necessarily have
Rory Anderson: Mm. Right.
Matt: have to have an MBA to make a six figure income anymore, which is phenomenal. I love that. and but I think it's gonna take time and and it's it's obviously we that's that's something that's against us in the the operations of multifamily is usually we don't have time for the the learning curve. So
Rory Anderson: Mm-hmm. Yep. Yeah. And honestly, like any high school seniors out there listening or juniors, like go get into trades. There's it's such there's such a need right now. Please. We need we need more people in the trades. so what do you think is the biggest misconception that owners and managers are having right now about reducing operating costs?
Matt: Absolutely. Well in my mind it's the biggest misconception is the fastest way to s to improve NOI is to spend less money. I know it it sounds counterintuitive, but I think I think sometimes it can be completely wrong. so a lot of owners that at least I've worked with, they see a maintenance budget of three hundred K with everything in it, right? Like they see all line items and they're like three hundred thousand dollars for the year. but they start asking questions like can we cut supplies? Where you know, can we reduce staff? Can we delay projects? As can we negotiate our our vendors harder? And I I agree that those questions aren't necessarily bad. but they're focused on the expense itself and not the cause of the expense. So in my mind And a better question to ask is why are we spending this money in the first place? Like, why do we why do we have it budgeted here in the first place? because I think that challenges us to look at an operational systems look at that point. Like you're looking at you're looking from a 30,000-foot view and saying, okay, if we're going to spend this money here, does are are we getting the ROI back on that? Because if not, you know, you can pivot and you can make changes.
Rory Anderson: Mm. Mm-hmm. Mm.
Matt: changes. but I think that's in my mind, I think I think asking that question, why are we spending this money here in the first place, and it I think it comes back to what you said earlier, kind of my philosophy with maintenance is it's not a cost center, it's more of an investment strategy. Like it's you have to look at it from that perspective because there's so many things that deferred maintenance can it can absolutely tear your valuation apart. So
Rory Anderson: Mm-hmm. Yep. You can eat up your property. Yeah, it's true.
Matt: Yeah.
Rory Anderson: So I I think it's important to be looking at your budget every year and kind of analyze, go back and say, are there things that we're spending money on that maybe five years ago it was good to spend money on that, but maybe now, this year it's not? Because that's another thing that I've seen is like sometimes the budget just gets rolled over from year to year to year to year and and it's not we're not really like looking at every item going, mm, maybe and and especially right now, in a time where it is crucial to be operating as neatly and and tightly as you can in order to continue that NOI success, I think it's important to go back and look at those line items again and just reevaluate and say, is it something that we need to be spending money on? but I I agree with you
Matt: Yeah.
Rory Anderson: You have to look at is this something that is adding value to the property, adding value to the residence, you know? We had a instance where the other day I was looking at one of our budgets and we had a contract with a rug cleaning company, and it was really expensive, you know, and I'm like
Matt: No. Yeah.
Rory Anderson: Maybe we don't need to be doing that anymore. Maybe we just need to get some better rugs that don't need to be shampooed. And like maybe, you know, some mats, some door mats that, we buy that we don't need to shampoo every single month. So, you know, there's just different things. I think you you can look at them and say, What what is it that's gonna give our property more value right now?
Matt: Sure. Mm. Yeah. No, I I I totally agree with you. Totally.
Rory Anderson: So if you inherited a two hundred unit property tomorrow and you needed to reduce maintenance spending by ten percent over the next year, where would you start? What would you look at? What's your advice?
Matt: Well, so I made a list of these things because I wanted to make sure I was as thorough as possible. and the first thing is actually what you just mentioned. I think I would definitely look at vendor contracts and I would audit those. I think I think a lot of times, at least in my experience, I have seen, you know, fifteen to twenty five percent leakage in these areas. That's a that's a big deal, especially especially at a lower cap rate. That c that can be hundreds of thousands of dollars. I i essentially could be.
Rory Anderson: Yeah. Mm. Yeah.
Matt: at least over the time frame of of owning the property. So, one of the other things that I see is or that I would personally do would be a turn process standardization. you know, I I think there is there are ways to
Rory Anderson: Absolutely.
Matt: To systemize I mean and I know it sounds property management one on one, systemize your turns, but unfortunately because of the skill level of who we have coming in as our maintenance teams and a lot of times they don't they've never done this before, and if they're not trained by the right person they may set them up for for failure. So I would probably take a look at the turn process for the property and see if there's a way we can standardize materials, also labor variances, you know, because I I think Thank you. making the team understand let's not run back and forth to the shop forty seven times, because that's that's a cost to the property and you add that in to that turn cost and that's why it's so difficult to really nail down turn cost is because you never know necessarily the labor hours that you're putting in there. so that would be number two. number three, I would probably look at work order like
Rory Anderson: Yes. Yeah.
Matt: categorizing? so basically I would separate real emergencies from the noise. so let's say that we've got we have you know five work orders that one's a doorknob or three work orders that's that's that so I can make the story shorter. we've got three work orders one is a doorknob is loose one is a light bulb and in a bathroom and the other is a fridge seal around the door is not working. So in my mind as a maintenance supervisor I'm going, okay, the fridge seal has to be done first because there's a there's potential loss of capital there because if the fridge continues to leak air, all the food goes bad for the resident, the resident's gonna come into the office, they're gonna expect compensation, and the property's gonna end up giving some sort of concession, most likely.
Rory Anderson: Mm-hmm.
Matt: which is still a loss to the NOI. and so I see that as as prioritizing those things. I have seen maintenance guys that would say, Okay, I don't wanna have to do the door on the fridge because it takes longer. So I'm gonna go do the light bulb and the doorknob, but I'm gonna leave the fridge till tomorrow. And so there's a higher potential for that loss of capital in my mind.
Rory Anderson: Mm. Mm.
Matt: So I think setting those types of things up. those are pretty much my top three that I would do. you know, 'cause I've done this myself even. I've stepped into as a regional and a facilities director, I've looked at labor costs first. unfortunately. because that one stands out so much easier. Right? Like we see that one. That one stands out like a sore thumb. So we're like, okay, if we take if we can attack it here, then it doesn't really matter what all these smaller t items are.
Rory Anderson: Right. Yeah.
Matt: But at least for me, not recognizing all of those small things, that's what adds up. and that's really where the systems come into play because all of the smaller items are the things that is the system for running the property. It's the operations. So
Rory Anderson: Yeah. I agree with you. And I think that there's also when you talked about like lack of experience sometimes with the process. I've seen that with managers too, like managers not understanding how to lead that turn process. And so where would you say would be how do you learn that? Like what's the best way to learn that? I mean, calling you, I guess. Calling you.
Matt: Mm-hmm. Yeah, yeah. No well, i yeah, you can definitely do that. I I I have I have no problem. I'll spend as many dimes as you want me to spend. So no, I think I think unfortunately, it's it's a it's a time plus mentor.
Rory Anderson: Ha ha ha Mm.
Matt: And by that I mean it's gonna take a little bit of time 'cause, you know, if you're new to the industry or if you've been a property manager for a couple of years, and you haven't had good maintenance around you in the first place, it's gonna be really, really difficult to develop that consistent e expectation for how we do turns and that process and how it works. and I think that that that falls to the management companies or the owner operators
Rory Anderson: Mm. Mm.
Matt: in order to put those processes in place and really you know really drive home to the team these are processes and I think one of the reasons why it sometimes doesn't get done that way is because it is it it is the time plus mentorship. So it's it's they know it's going to take a long while to get this really concreted in the thought processes of day-to-day operations. However if if you never start
Rory Anderson: Yeah. Mm-hmm.
Matt: doing it then the yeah that manager's never gonna know. So I think probably the easiest way of doing that is picking out within your organization the really high performing teams because you're gonna know the ones that are high performing. And you're gonna go to those people and you're gonna say, hey how could you help us put together this this plan of action for this property?
Rory Anderson: Mm-hmm.
Matt: And it's more of a a collaboration rather than, the corporate office or the ownership team trying to come up with how to do this. you already have someone who's performing really well in that space, so let that person be the the guide for the rest of the team.
Rory Anderson: Right. Yeah. Yeah.
Matt: And you know, I I've I've done that I've done that both in maintenance side and on the administration side. I came in and for one company that I worked for and my wife and I actually developed a a leasing training system for our company because it was there was nothing standardized so it was everybody was doing something totally different but the corporate office, my regional, everybody wanted a standardized at least for that region, they wanted a standardized way of doing things. So we developed this and then we put on basically a little seminar for the entire office teams and and explained why we sell the way we do, how to do it, you know, all of these different things. And it it and again it took time but it also
Rory Anderson: Mm.
Matt: took bringing everybody together in one session. We all got together, we were there for a whole day. so you know, there's some disruption to day to day operations in training as well, but I think the I think the benefits long term are exponential. Like it it so
Rory Anderson: Absolutely. Yeah. Training yeah, you you slow down to speed up, right? I mean, it's that whole concept. And I like the part where you talked about having a mentor because I think that's actually one of the best things that companies can do is take a high performer and they can be a mentor, not only does that provide them leadership opportunity, but it also gives them an opportunity to share what they know and
Matt: Yeah, exactly. Yep.
Rory Anderson: say like hey, I've already done this, you know, five hundred or a thousand times. So just learn from me. This is the best way to do it. And here's how you do it. And if you had them come on property, to maybe support them once a week or even once a month, just to of walk through the the role with them and keep those expectations high, I think that helps to just create a better system of accountability, but also success. For those people that are newer.
Matt: Yeah. No, I think so I I most of my mentors have been like I guess they've been they've been pretty hands on. I've had a couple that weren't they called themselves mentors or leaders, but they didn't actually I don't think they actually knew what they were doing and I I I that sounds arrogant and I I know. I it sounds extremely prideful. but you can tell and and I think the average, you know, schmuck like me can tell when somebody actually knows what they're talking about because when you ask a question, they can teach you how to do it. They can literally show you their expertise in action. And I think that's you know, I think that's a big thing
Rory Anderson: Yes.
Matt: there's a lot of times I've I have personally made the mistake and making a few people mentors in my past. and they weren't ready for that. Like it went to their head and they said, so now I have some sort of power over this person and rather than let me see if I can help this person, and and and be a good steward to this person and really show them here's how you do this, it it was more of a power trip. So I think there's a fine line you have to walk, but there are definitely high performing assets that at every property. The most properties even even the ones who are struggling, there's probably one or two lights there somewhere that are they're doing what they're supposed to be doing at a high you know, a high level. So
Rory Anderson: Mm. Y That's a good point. I like that. Last time you talked to me about the eyes up maintenance or like the eyes up mentality. So I wanna know, do you have any stories where that's saved money? Where that philosophy is translated into dollars saved at a property or
Matt: Yeah. Yeah. Sure, yeah, absolutely. well I have I probably have several, but the the easiest ones that I can think of are gonna be like roofing issues, because you're obviously eyes up that way. but I had a tech one time at a property. he didn't have a supervisor at the time, but I had a tech. he noticed that there were shingles missing over a building that we were he was ninety five five percent sure that there were leaks in the attic. and nobody had had reported them yet. And he was he was thinking that it has it has to be leaking because there's literally ten or twelve shingles are completely gone. Like I can see the felt underneath. but we hadn't gotten any call. So we basically made a you know emergency on the apartment and sure enough he was he was absolutely right. and the reason why the the
Rory Anderson: Wow.
Matt: the folks had not told us anything is because it was a person who worked abroad and they were they were gone sometimes couple of months at a time and and and just would not know. You know, just wouldn't be there, right? and this was before cameras were ring cameras and all that stuff. Everybody has cameras in their houses now. So you probably would notice it at this point, but back then, you know, I'm as old as dirt, so
Rory Anderson: Right. Right. Yeah.
Matt: you know, n we didn't have those things back then. But anyway, so this this this tech catching that, We went in and it had it it was leaking, but it was only I it was isolated to one room at the time. and it was the storm had come through probably the weekend before and he caught this on a Tuesday. So my in my mind, i it if we if he hadn't caught that and this guy didn't come back for a month and a half, and he's on the top floor, we had three floors, you that's when that's when the that's when the NOI
Rory Anderson: Mm. Wow.
Matt: gets really affected. and I know potentially you have some insurance offset there, but still, I mean there's a lot of I mean I obviously you know there's a lot of factors that go into water damages. But that's the biggest one that I can remember. was just be and it was it was so crazy how it just
Rory Anderson: Yeah.
Matt: If he hadn't had that eyes up thought process that we had been teaching He would have never seen those shingles or even maybe not even known what he was looking at, honestly. because he was also going through training and had a mentor and was, you know, showing him how to do the things. 'Cause this guy was like I think he was maybe twenty two, something like that. So and I'm not saying that twenty two year olds don't know anything. I'm just saying like a lot of times th you you know, it it you just don't know what you don't know yet. I didn't know lots of stuff when I was twenty two. So
Rory Anderson: Mm-hmm. Yeah. Me neither.
Matt: But, so I think that's that's probably the biggest one that I can think of. And I I love coming up with little one liners. So I actually wrote a a note on this one and I said eyes up is basically loss prevention disguised as maintenance work. I mean it's it's that's all it is. You know, it's it you're you're looking for
Rory Anderson: Okay. Ooh, I like it. I like it.
Matt: things that are gonna cost the the the site money. And that's really all eyes up is because it's it's an additional thing you have to take on. Like you know I'm gonna pick up trash, I'm gonna do work orders, I'm gonna do turns. I could ki I I could stay in my you know, in my lane there. Yeah, you got your blinders on, you're not paying attention to anything else, I'm just gonna go do what I have to do, and I'm gonna go home. But I think I think that that in my mind that's what sets a high achiever apart, is that's the person who's out there looking for those things that are gonna drive costs down for the site. So
Rory Anderson: In your little lane with Yeah, I love that. Okay, I have a I have a little story about eyes up that I experienced a week ago because I was I was on site and I decided to bring my work clothes and help the team clean breezeways. And so we were cleaning breezeways and I I looked up and there was a whole part of the soffit hanging down, like like a five foot portion, right? it was huge. but it was at the back of the property, so
Matt: Okay. perfect. nice, okay. yeah, sure.
Rory Anderson: Like it just didn't even notice. No one had reported it, you know. But anyway, so I I was able to go talk to the maintenance team and be like, Hey guys, I don't know if you knew about this but
Matt: Yep. Sure. Yeah. And that's That's exactly what I'm talking about. And you know, sometimes sometimes on the i i if it's on the back side of the property, those are the ones sometimes that that definitely get missed, especially if there's a high workload at the site or if there's things going on that that, you know, maybe we don't see, but but I think for the most part, yeah, you're right. that's how you go find these things because here's the thing, if that that soffit falls, squirrels, birds, grain, I mean you name it.
Rory Anderson: Yes.
Matt: It's getting up in the attic and it's gonna start they're they're they're gonna start causing havoc up in there. and then that's just additional funds that's gotta come away from the property because we didn't we weren't looking for those little things to fix, right? Like preventative maintenance is, you know, let's let's I I don't wanna wait till it's broken to fix it. So I I think we talked about that on the last one as well. It's you know, we wanna if it ain't broke, don't fix it is not the the right concept to have in your mind when you're
Rory Anderson: Yeah. Right. Yeah, and also, this is another story, I guess, from when I was out there. There was a tree that was I mean, it's huge and it was towering over this three story building, right? and it's an old, old tree. I mean, one windstorm and those branches the branches were hanging over the roof. And I just thought, wow, that's probably not good because one storm and we're gonna be having
Matt: Sure.
Rory Anderson: a caved in roof. You know? So just just being on property is so good for me because sometimes when you're on property too, you just it looks the same every day. And so sometimes having an outsider come in and be like, maybe we should think about that tree. You know, it's it's also good. And I always love that. I love when somebody else brings me ideas because, you know, I it's it's good to have other perspectives.
Matt: Very possible. Yeah, absolutely. Right. Yeah, no, I I definitely it took me a while to to understand that concept. in my younger days it was frustrating to have someone walk onto the property and find things. and and I'm like w I I just didn't see it. but that's the point, right? Like you didn't see it because you're in the day-to-day grind and so I I had to really train my teams to understand if our regional or if I'm the regional and I'm pulling up to your
Rory Anderson: Yeah.
Matt: site, I'm not nitpicking your site. It's nothing like that. you probably just didn't catch it because you're so busy doing the day-to-day operations. I come in here with a new set of eyes, and I found this same concept in turns. I think there should be definitely someone who does the turn and someone who does the final inspection of the turn. Right?
Rory Anderson: thank you for saying that. Yes.
Matt: And and and the reason why is because different eyes see different things. and I'll be the first to say I am very particular about the way I do things, but it may not be your way, right? You may see things and you're like, No, I really want that to be done too. But there are things that I'm like i as a maintenance supervisor, I'm running around in there and I'm going, Okay, I've got everything working. Everything looks good from my perspective, but I think it's so subjective that in order to get an objective perspective, in my mind, that that's kinda cool. I didn't even catch that until just now. to get that objective perspective, you have to have someone else take a look at it. Because you need more than one set of eyes, because, you know, again, you see things differently than I would see it. or you may catch something that I just missed. So it's no different from a grand scheme property inspection.
Rory Anderson: Mm-hmm. Ha ha ha Okay. I agree. And here's the thing. I want to say to all maintenance people that when when that final inspection comes, you also have to be humble. You can't be like, no, this, I'm sorry, you're wrong. you gotta be humble because there might be things that that somebody is like, yeah, you know, this needs to be done better, or it needs to be done differently. And you kind of have to be willing to accept that and say, Yeah, okay, I can see your perspective. I can see you know, anyway. I just wanna say that 'cause I I've seen I've also seen that where maintenance professionals get a little defensive and maybe feel like they're justified in the way they did something, which they might be, but you gotta be open. You gotta you gotta be open. Yeah.
Matt: It's a it's a hard peel to swallow. They may have been yeah, no, I I've done it myself. Yeah, I've done it myself. I've I've I've done turns and And you know, the the the final inspector walks through. I'm probably the person who initiated the final walkthrough at this point in my career. And I'm so I'm wanting them to find things. And then when they find things, I get mad at myself. I'm like and and I'm mad at the situation, but I end up taking it out on them. I'm like, why did you no, that's not that makes no sense. Why do we gotta do it that way? That makes no sense. And so I agree with you. I think that we have to maintenance guys, you gotta be c you gotta be humble in those situations. It's it's not that
Rory Anderson: Right.
Matt: That you have done anything wrong. it's just that you you you may not see it the same way that this person sees it. especially and and I I personally I love it when it's an office team member that does the final inspection, not another maintenance guy. And the reason why is because typically the office personnel are the people who's selling that product. They need to they know what their prospects say when they walk those units or don't say. they know, you know, you don't have to be a
Rory Anderson: Right. Mm-hmm. Right.
Matt: an expert in body language to tell if somebody walks in and curls their nose up at, a paint job, there they may never say that the paint job looks like crap, but Even if it's just one one wall, one spot on a wall, they don't rent. Well we just lost that lease because we should have caught that, but we had two maintenance guys inspecting the turn rather than someone who's selling the product as well. So I I personally I like it when you basically take turns. So
Rory Anderson: Love it. Love it. Okay, I wanna know, let's go back to vendor contracts because you talked a little bit about that, but where do you see properties wasting the most money when it comes to vendors or service contracts?
Matt: I think the biggest driver there is scope of work. And and on both sides. Like
Rory Anderson: Mm.
Matt: A lot of times and I and and it's no fault to the people who are at the sites, right? It's it's really no fault. but I know that you and I have worked with some some folks that will take a look at the scopes after the vendors have created the scope because vendors are looking out for the vendor, right? They're not necessarily looking out for your bottom dollar. there are with the exception of a few, there are a few vendors out there who really do care about they understand the
Rory Anderson: Right. Right.
Matt: the business side of things and and even some of them may have even worked in this industry before so they kinda understand that the the the value build on the property is what keeps them in business. But for the most part, letting vendors make their own scopes is And and well, let me let me rephrase that. Letting vendors make their own scopes without having someone qualified enough to review that scope and make sure that it makes sense that why are we doing all of that? They can they can question things, right? so I think that is probably the biggest driver. And then not enforcing that scope once somebody has said, I'm gonna do all of this for you
Rory Anderson: Mm.
Matt: And, you know, I I guess that's it's more accountability at that point. Like you you hold them accountable to what they said they were gonna do for you. 'cause I think I I mean, I know I have seen just in the last few years I've seen renovation vendors say we're gonna do all these things to your unit and then you you walk in when they say they're done and you're like, Wait, there's no backsplash, there's no you didn't put the garbage disposal in, you know, the the appliances are still sitting in the boxes, like what do you mean? Like you said it would be you said it would be ready, right? Like we could rent it. So I I think I think that's part of it.
Rory Anderson: Yeah. Yeah. And that's a great lesson, right? Being clear about what the scope actually is. I found that it it really helps to have it in writing. I like to also walk it with the vendor, talk to the vendor directly before they give me the bid. Yeah.
Matt: Yes. Yes. Yep, absolutely. I think because look, I'm not saying that we shouldn't trust vendors expertise and what they're they're scoping up, or writing up that needs to be completed. but there are times and and there may be there there have been times that I've seen that they've written things into the scope that don't necessarily have to be done by their team. Sometimes things can be done by the in house team.
Rory Anderson: Yeah.
Matt: So it really just it it's a it it's a balance. I think you have to balance all of that out. So
Rory Anderson: I actually that was a learning that was actually a learning curve for me too. Understanding what can the in house team do versus what can the what can they not do or what should they not do? And so maybe switching into this this topic of what services should operators almost always outsource versus what services should they seriously consider bringing in-house? Do you have any thoughts on that?
Matt: Okay. Sure. yeah, yeah, I've got I got plenty of thoughts on that. I I I definitely think that at least for my teams, what I always told people w was what I want you to outsource are the major repairs. I want you to outsource roofing issues. One for liability reasons more than anything and insurance cost. if you're telling your insurance company that we allow our our teams to get on the roofs, your insurance just it it there's a
Rory Anderson: Yeah. Yeah.
Matt: There's a higher higher premium there just from that one statement. so roofing is usually something that I would I would outsource. Let somebody else take on that liability. major HVAC replacements. Now, that being said, there is a caveat here that I I am I am learning about that it it used to be because you wanted to make sure that they if they didn't know how to use a torch to be able to torch these these line sets.
Rory Anderson: Sure.
Matt: and things like that in. But technology and the development of different types of connectors has actually made some really awesome
Rory Anderson: Yeah.
Matt: ground on all of this. So they actually have push to fit connections now just like they do for water pipes. They actually have them for HVAC pipes as well. So you can literally just push and connect these things together and you don't have to you literally don't have to solder anything. You don't have to pull a torch out. There's no risk of fire. It th like it's it's actually a really cool development in HVAC, to have that option. So it it is
Rory Anderson: Okay.
Matt: fairly new. I think it's been around probably it's probably been around ten ten or eleven years. I've personally never used any of them, but I've seen many, many demonstrations of them and they seem to hold up. so there there would be some cost savings there, but I think The problem with major HVAC replacement is the time that it takes to take the old system out, rebuild the plenum, put everything back in place. The soldering is really typically not the the longest part of that installation anyway. So I think, from that perspective, most of the the vendors that I've I've used here in Nashville, it's anywhere from four to six hours to to change out a unit properly. So, you know
Rory Anderson: Mm. Mm.
Matt: again, I I think I think you have to look at your high value work.
Rory Anderson: Mm.
Matt: if it makes sense to have your team do it in house, and they they have the time to spend six hours on changing a unit out and saving you a couple thousand dollars in labor, maybe that makes sense. I but I I unfortunately the the properties that I have had worked with that we just didn't have the we didn't have the capacity because of workload for the rest of the things that were going on at the site.
Rory Anderson: Right.
Matt: It was it was a little more difficult. But I would I would definitely say that. electrical panel work. I I'm just a big guy. You don't like most of our guys barely know how to change switches and light fixtures and things like that. And and again, it's all training. Eventually they'll they'll probably be really good, decent shade tree electricians.
Rory Anderson: And don't touch it. Yeah. Mm-hmm.
Matt: But when it comes to a panel or taking messing with the meter outside, really you should leave that to professionals. I I know this is a big one for you guys and really it should be for everybody. Pest control. That should never be done in-house. Because it's not I I would challenge anybody to prove me wrong on this. in twenty five years in this in industry, I've never seen an internal pest control system
Rory Anderson: Mm.
Matt: that worked and probably because it wasn't getting worked by the team they weren't doing it and I know that there's some caveats. I'm sure there's one or two properties out there. But I would say overwhelming majority probably shouldn't do pest control in-house. but I also know that that's one of the the the
Rory Anderson: Ha ha. Mm-hmm.
Matt: the vendors that's so hard to find somebody who actually does a good job at that. Like that's you know, it's it's super, super hard. So I I think think that would definitely you you have to I guess there's some some balance there as well.
Rory Anderson: It is. It's a similar industry where it's hard to find people that have the expertise, right? Like not many people grow up wanting to be a pest control technician. That's just the reality. Supply and demand.
Matt: Right. Yeah, exactly. Right, exactly. Exactly. Right, exactly, exactly. So one of the other things, the the last thing that I would probably say that we so outsourced at least with my teams would be like specialized plumbing, like sewer lines, excavation, things like that. drain cleaning in my mind Unless there's unless there's something weird about the plumbing system, which there are some in in the older assets that I've worked for, there's some there's some nuances that make it tougher to clear drains. but for the most part your teams should be able to clear your drains for you. so I don't see that as something we should hire out. Unfortunately it does get hired out.
Rory Anderson: Mm.
Matt: So you but in my mind it would be specialized plumbing like changing shower valves, sewer lines, excavation, things like that. you know, major plumbing repairs w in my mind. So some things that obviously you would do in-house are gonna be your turns. You you definitely wanna do those. and then coming back to you know, plumbing and electrical, basic plumbing and electrical, I've seen I have actually seen invoices. come through for an electrician for three hundred dollars for them to come and put a a a single pole switch in, one light switch. But because of the travel time, the service fees, the all of that, and not only that, but we used our parts at the site. Which is even more frustrating.
Rory Anderson: Mm-hmm. Ha
Matt: Like I y the so the maintenance guy went and grabbed the part, gave it to the electrician, and said, Go do this for me I'm like, Okay, but what? So you know, I I think those definitely
Rory Anderson: And that's where that's where also like I I hope that property managers are listening to this too because it's also an education issue, I think, just with the whole team. Like it's it's important for the the manager to know, like, no, your your technician should be able to do that.
Matt: Sure. Yeah. Yeah. Yeah, and and if if you tell me that you're not qualified to do that, that's fine. But if we're gonna th this is something that I I I told all of my teams, if you're gonna hire something out that you don't know how to do, try your very best to tag along with that that vendor.
Rory Anderson: Yes, learn how to do it.
Matt: Learn how to d watch what they're doing, so that you can do it the next time. some vendors don't like that. Some vendors are, you know, weird about that because, you know, they just don't want you knowing how to do it so that they can get more calls. I get that. but
Rory Anderson: Yeah. Yeah.
Matt: But the g in my mind, the good vendors, the ones who really do they want to have a business relationship with you a long term, they're much more willing to have you come with them. Cause one, honestly, they're not making a lot of money on that little service call. They'd rather be doing a big project somewhere where they're making thousands of dollars instead of hundreds of dollars. So it you know, not that not that that's not a good thing, but they just they would prefer not to do those smaller things. so a lot of times they're willing to train and
Rory Anderson: Right.
Matt: show show your guys hey here here's a cool tip I actually that's how I know how to do a change out a GFI receptacle in my younger years I had no clue how to do that. I kept putting a GFI in wrong and it kept tripping and so I called the electricians and the a really nice older gentleman came in he's sitting there working on it and I I'm watching and he notices that I'm watching and he's like are you the one Who put this in and I said, Yes, sir. I was the one that put that in there. He's like, Well, let me explain to you what you did wrong and that way you can do it right next time and you don't have to call me. and it it was it it was one of those situations where he just you know, he gave me a very, very simple an
Rory Anderson: That's awesome.
Matt: saying to just remember and I'll never forget it. line hot, load not. So I'm looking for my line into the back of that GFI is my hot wires and my load wires going out to whatever it's powering is it goes into the load. So I'll I'll never forget that. But that's that's the kind of things that I think vendors should be willing to do. and and your team should be willing to go and do that. Because when I asked that question from that maintenance tech
Rory Anderson: Yeah.
Matt: Did you go with the vendor to watch him put that switch in? The answer was no. I didn't realize I needed to do that. And I'm like, okay, well that that pretty much tells me what I need to know. that we we've got to get you some more training on making sure that you understand the expectations here. So just
Rory Anderson: Mm. Yeah. So good. Okay. I gotta
Matt: Just one one one one last thing. I would say I ha I I created a little rule. Outsource complexity, internalize repetition. So whatever you can do in-house that's that's that you can do over and over again, you should probably do that in-house. Anything that's gonna be super complex, especially in today's world with our our techs and and supervisors, should we probably should pass that along.
Rory Anderson: Okay. I like that. I like that. Yeah, that's a good way to remember it. Let's talk about the your take on that old industry benchmark of one maintenance person per hundred units. Do you think that makes sense still today? Because labor costs are expensive, right? It's one of the largest largest expenses on any property. So, but what do you think about that whole, one to one hundred philosophy?
Matt: So I I personally I it's an okay concept. It's a bad metric in my mind. and the reason I say that is because
Rory Anderson: Okay.
Matt: most of our well not most, but definitely a lot of our assets that we're managing and overseeing in today's world are are fifty, sixty years old. Again, they were never they weren't built to last this long. I don't I I truly don't believe that. I I think that they were built to tear down in thirty, forty years something else is gonna get built. so all of your systems within that property are falling apart. which hints that you're gonna have more labor intensive repairs. If you're doing things
Rory Anderson: Mm-hmm.
Matt: in-house. Now that's that's the big caveat there is what you're doing in-house versus what you're hiring out. But I I think you know the newer newer assets that these class A things that are being built they're under warranty for three to five years on most things. Builders are having to kind of push out those warranties a little bit longer at this point. And so you you don't you don't need a a huge team to
Rory Anderson: Yeah. Yeah.
Matt: fix things there because when something breaks they're just gonna call the vendor that built it and say, hey I need this sub to come back out and fix this. but on these older assets you don't have that luxury right like you you know that you're gonna have things that are gonna break. So you know I I would say I would say it's it's property specific even. you have to look at the needs of that specific property. because even even the older sites are not you can't you can't look at one site and go, okay, this site should be operating like this one, same kind of same age, same demograph i it it's and and I think i at least in my mind the reason why is because it could be a difference of the quality of maintenance team that you have at the site. Like if you have a if you have a gung ho
Rory Anderson: I agree. Yeah.
Matt: very qualified, very professional team running that asset, you're probably they're probably doing a lot of things in-house and you're not gonna have to hire out as much. So you're gonna see the savings. But in order it but again I think that comes back to the mentor program. That's when you take that guy and you say hey can you help this guy over here? or would you guys be willing to at least discuss what you do to make things work so well over there. And I'm not saying that that would work every single time but I definitely
Rory Anderson: Mm mm. Yeah.
Matt: I definitely think the one per 100 is it's it's a little outdated. you know, I think it was great in the you know 90s and definitely through the early 2000s. but even then, you know, again, like I've I'm working or have worked at properties that were built in the mid-60s.
Rory Anderson: Yeah.
Matt: You know, these these properties are th these plumbing systems, the electrical systems, none of this was none of that was built for modern technology. And for us to for us to expect that that site's gonna run like a brand new one that you're building with all the new codes and all of those things in place, it doesn't make any sense in my mind anymore. So I think I I think a better metric would probably be again, just looking at the
Rory Anderson: Right.
Matt: site specific, workload, and then, you know, age a and then even sometimes just looking at your capital expenditures that you know you're gonna you have coming up, you have to take all those things into consideration. So you know, I I've
Rory Anderson: Mm-hmm.
Matt: I know I'm I if if i I I had an old r regional that was all about this one per one hundred and and she would definitely slap me on the hand for speaking ill of it. but it's it's definitely it it's not the right concept in my mind. Not anymore.
Rory Anderson: Yeah. Well, I'll just put a plug in for also thinking outside the box. I mean, we have an asset that's a newer asset. It's like five years old, but it's a newer asset and the way the management company runs it is they have it's it's it's like a hundred and twenty-ish units. So it's not like a huge property. And to be honest, like it's pretty maintenance light. So they
Matt: Mm-hmm. Sure.
Rory Anderson: They share the maintenance with other properties and we only have somebody come when it's needed or when the turn's happening. And so there's not somebody on site every day. Splits the cost. it it's it saves us money. It saves and then it helps it's helps them provide work for them at other properties. So there's different ways to do it, right? And you don't necessarily have to have somebody on site all the time.
Matt: Sure. Me. Yeah, no, I think I think what you're talking about is centralization. I think that that's that's a buzzword in our industry that sometimes it works, but I think it's it's gonna work on those properties that you're talking about. It's the properties that are again, they're Exactly it's not
Rory Anderson: For sure. It's not for everybody, right? Like you can't you can't do that.
Matt: You you can't take a portfolio of properties and say, I've got a property that was built in twenty twenty, I've got one that was built in twenty eighteen, one that was built in two thousand one, but then I have ten that are built in the before the seventy or you know, before the eighties. your centralization team is gonna be at those older properties all the time. You're you're you're never gonna be able to get to the other side. So I think I think centralization is again, it's a good concept, but I think it's so hard to achieve what
Rory Anderson: Yeah. Yeah.
Matt: what everybody thinks it's supposed to be, because of that same reason. So
Rory Anderson: Yeah. I would agree. Okay. Before we end, I want to ask you one more question because I think this is one that will that people will resonate with. What's the smartest cost saving idea that you've seen a maintenance supervisor implement at a property?
Matt: I actually was I had a maintenance supervisor create turn kits for each floor plan. So he he knew exactly what he was taking with him. He already had pre packed. So it was it it was kinda like a and and I think the concept is out there now and has been for a long time. But like renovation kits, they call Chad Packs through Chadwell and different things like that. So you got pro packs and all that. But this would be something that that was broken down f specifically for the site. So you know you you basically put everything that you could possibly have in that box and you're taking it with you that you you know, 'cause you know you've already walked the unit. Walk the unit for your list anyway. but it's always nice to have some of those universal things that you might have missed already in the box because then you don't have to run back to the shop. So I saw a guy do that one time and and I tried to implement that myself. it worked really well. but I have I I personally have a little bit different way of doing that. but it it seemed to work really well for him and his team. and we trained some other guys to do the same thing, and it worked it was you could duplicate it. So I think that was
Rory Anderson: Yeah.
Matt: really cool cost savings. because again, and and that could be nuanced depending on the age of your property and if if if everything's uniform, things like that. So I think you have to look at things like that as as well. But I definitely think that that's that that was a really cool
Rory Anderson: Right.
Matt: cool way of doing things 'cause I I'd never seen anybody do it from a property level. I knew you could do it from a renovation pack perspective, but I but I think it's I think it's super impressive to see this guy, you know, put his own pack together based on the unit itself. And so I've adopted some of that stuff in the way I train now.
Rory Anderson: That's cool.
Matt: Because we wanna be very property specific and and unit type specific because every unit type could be a little different on sites as well. So
Rory Anderson: True. Very true. Okay, if you could leave owners with one rule for protecting NOI in this expensive economy, what would it be?
Matt: I think it would come back to stop treating maintenance like a cost center. understand it. every dollar that you could possibly save, right? Like you could you could cut. if you do it on the maintenance side and and you don't improve the processes in order to make things work smoother, it's probably gonna cost you more in the long run. So I think that's that's probably the thing. and I think I think the real rule, I guess in my mind would be control failure events. again, I I I know I it property management one one but maintenance is to maintain. So we don't want things to fail. If we can if we can stop a a refrigerator compressor from failing by making sure that we keep the the all of the coils and everything clean on that thing on the back and we're checking those or each HVAC systems, things like that, all of that proactive maintenance is going to you know, is is obviously the best thing to do. So if I were gonna spend money on stuff
Rory Anderson: Mm-hmm.
Matt: that's the kind of stuff I would do because you you're preventing the failure you're controlling the failure events, not the expense lines, I guess is the best way of saying it. So you're not you're not drilling down so far. You're you're really more looking at how can we prevent major expenses.
Rory Anderson: Yeah. I like that. Matt, you're so awesome. This has been such a great conversation because I think you've challenged a belief that a lot of operators have right now. And when expenses start climbing, their instinct is often to look for the things to cut, right? And like, how can we make it better? But you what you've shown me throughout this conversation is that the best operators aren't necessarily the ones cutting the most expenses, they're the ones preventing those unnecessary expenses from happening.
Matt: Sure.
Rory Anderson: In the first place. And I
Matt: Absolutely.
Rory Anderson: like that we talked about vendor management and staffing efficiency. We talked about the eyes up philosophy to help those teams identify those problems before they become expensive emergencies. it's not, you know, maintenance isn't just an expense line on the budget. It's it's really one of the most powerful tools we have to protect that resident experience and preserve the asset value and ultimately improve NOI. Because I've seen sites
Matt: Absolutely. Mm-hmm.
Rory Anderson: that because their maintenance is keyed in and they and because it's operating well, that's what's that's what's creating the most NOI at the property, honestly.
Matt: Well and I I would even I would even go as far as to say that's probably what's what's driving your renewals. I mean it's it's an industry st it's statistic that usually ninety five percent of the reason why people move out of their site is or their apartment home is because maintenance
Rory Anderson: Yeah. yeah. I would agree.
Matt: didn't get to fast enough or didn't do it the way they you know, they had to come back three or four times. So I think that that definitely affects the resident experience as well. So
Rory Anderson: Yeah, totally. Well, for everyone listening today, I here's the challenge. I want you to pick one thing from today's episode and implement it. maybe it's reviewing your vendor contracts, maybe it's evaluating how your maintenance shop is organized, maybe it's walking your property with the eyes up mentality, or taking a closer look at where your team is spending time versus where they're creating value. Because in today's environment, those small operational improvements can have a massive impact on your bottom line. If you got value from this episode, please share it with your maintenance supervisor, your property manager, your regional manager, your ownership group, anyone responsible for property operations, because these are the kinds of conversations that create results. And if you haven't already, make sure to subscribe to the show. Leave us a review. We love that. Check out everything we've got going on at the propertyplaybook dot riverside.com. Matt, thank you again for coming back and sharing your knowledge with us. I I want I want you to do an unpaid advertisement real quick before you have to go.
Matt: Of course. Okay. Well, w the the one thing that came to mind this time was the DeWalt Tool backpack.
Rory Anderson: Okay.
Matt: I I actually was turned on to this only four years ago. instead of using a toolbox or a you know, anything like that, you actually put all of your things in a backpack and it's it's just so much easier. And the DeWalt seems to be the best one. I did a lot of research, I'm a nerd. I really wanted to make sure I made the right purchase, but the DeWalt tool backpack is phenomenal. So
Rory Anderson: Ha I love it. That's a great idea. Okay. DeWalt. Okay. Well, to everyone listening, until next time, keep building great teams. Keep leveling yourself up and go be a light and a blessing to someone else.
Matt: DeWalt. That's the one.
Rory Anderson: Yes, learn how to do it.
Matt: Learn how to d watch what they're doing, so that you can do it the next time.
Rory Anderson: Welcome back to the Property Playbook, the property management podcast that unlocks leadership lessons from experts in the trenches of multifamily. If you've looked at a property budget lately, you've probably noticed the same thing that I have: that everything is costing more. Labor costs are up, materials are up, insurance is up, vendor pricing is up, and yet owners and operators are still expected to. To protect that NOI, deliver a great resident experience, and maintain their assets at at a high level. So the question becomes: how do you control costs without cutting those corners? And today's guest is the perfect person to help us answer that question. Joining me again is my friend Matt Heron, owner and founder of Facilitech. Matt brings more than 25 years of experience in multifamily maintenance, facilities management, and operations, and he's worked as a maintenance supervisor, a property manager. A regional manager, facilities director, and consultant. So he has a unique perspective on what actually drives operating costs and what separates efficient properties from expensive ones. And what I love about Matt is that he doesn't just talk about maintenance as repairs, he talks about maintenance as investment strategy. And in today's conversation, we are diving into where operators are wasting money. Biggest misconceptions about reducing expenses, how to get more productivity from your maintenance teams without burning them out, which is so important. When it makes sense to outsource versus bringing services in-house, And how a simple philosophy Matt calls eyes up maintenance can save thousands, sometimes tens of thousands of dollars in avoidable costs. We're gonna talk about the old benchmark of one maintenance technician per hundred units, the highest ROI maintenance programs he's ever implemented, and the smartest cost saving ideas he's seen from maintenance teams in the field. So if you're an owner, an asset manager, a property manager, maintenance leader, or anyone responsible for protecting NOI in today's market, you are going to get a lot out of this conversation. So let's get into it. Matt Heron, welcome back to the property playbook.
Matt: Well thank you so much. I am so happy to be here. Thanks for inviting me back. it's always exciting to to talk through these things, so
Rory Anderson: Yeah, we're gonna have a great conversation. So let's start off with a story from your life. I know in property management you've had a lot of crazy th things happen. share with us something that's happened to you that you're like, I just couldn't believe that.
Matt: Sure. Well, you know, it's it's hard to top the last story, but I'll I'll give you
Rory Anderson: That one is that one is really good. If you haven't listened to Matt's first episode, you need to go back and listen to his story.
Matt: I I'll I'll give you I'll give you another one that was it was still super interesting. so I was working at a p a at a site and we knew we had a a resident that was struggling with with alcohol. however We didn't think it would get this bad. So basically what happened is I was at a corporate retreat, and I I get a phone call from my maintenance supervisor or my maintenance tech, and he says, there's a car in the office. And I was like, Wait, what do you what do you mean there's a car? Like I honestly I thought he was joking. I was like, There's there's no way there's a an actual car in the office. he's like, No, there's a car sitting on your desk and I was like, Huh?
Rory Anderson: Ha ha. Ha
Matt: And so he he he he said, Yeah, this the he gave me the guy's name and and it so I knew exactly probably what happened. he said he seemed to have been intoxicated and meant to hit the brake and push the gas as he was pulling up to the office and his car is now sitting on your desk. And I was like, That is insane.
Rory Anderson: Yeah.
Matt: but the craziest thing was, and this was a younger guy, so I I don't really fault him for this, but he was like, I don't know what to do. I don't know what to do now. Like what how do you want me to push the car back out? I was like, No, no, no, no, no, no, no. Please don't touch anything. Like, you don't have to mess with anything. I said, Have you called authorities? Like fire, police, all of that, ambulance. You know, I don't even know if this guy he maybe he's not okay. he's like, No, we haven't done that yet. I said, Okay, well get off the phone with me. Let's call them first. and so it was it it's just it was pretty interesting because the the gentleman
Rory Anderson: Ha ha
Matt: He literally was coming to pay his rent but he was intoxicated and just n I mean, he just hopped the curb and just drove his car straight through our our wall into my office and it was it was the most insane thing I've ever seen. Yeah, exactly. That's yeah, yeah.
Rory Anderson: Don't drink and drive, kids.
Matt: it's definitely a good good lesson for that. But but I think I think more than anything it was it w the the cool lesson there was just knowing that I had been there at one time where I might not have known what to do and just being there to support that team and as soon as you know, I let five or ten minutes pass and then y you know, call back and find out what's going on. So it was yeah, it was a really, really interesting situation. So
Rory Anderson: Mm. Well, to your point, I think sometimes in this world of property management, you feel like you have to take care of every problem because you feel like it's your responsibility. but you need to know the limits and boundaries of where, you know, you do need to just call the police. Like this is not an issue you have to handle. This is an issue that somebody else is gonna need to come in and help you out.
Matt: Sure. Absolutely. Absolutely. Yeah. Don't don't take those those types of things into your own hands. So
Rory Anderson: Yeah. Well, and also sometimes residents expect you also to take care of things that maybe the authorities should be taking care of, right? Yeah. Good lesson. Yeah, I'm sure. I'm sure. well, let's get into our questions. So I I want to talk to you about this because it feels like every line item right now in multifamily budgeting has increased over the last few years. And
Matt: Sure. yeah, absolutely. Absolutely. Got stories on that too, so Sure.
Rory Anderson: I wanna know from your perspective, what do you think is driving the biggest increases in maintenance and operating expenses right now?
Matt: Well, I think from one, probably the biggest driver is labor inflation, plus scarcity, right? Like there's not there's not enough maintenance guys out there that are quality or qualified. Let me let me restate that. They're not qualified to necessarily be doing what they're doing. and so, you know, we're we have an underqualified group of guys that we're hiring and even so they're extremely expensive and it's it's just in in my mind at least and I I'd done this as as a a regional and as an on-site guy like you know if you can go if you can go down to Bucky's or McDonald's or anywhere like that and you're gonna make 17 18 bucks an hour and you're literally dropping fries it's the same job over and and over again all day long. But I'm telling you you g you you can come to work at our apartment community, but I expect you to be a jack of all trades. I need you to I need you to know some HVAC. I need you to be a plumber, electrician, you know, a a general contractor. Like you have to know all of these things. And I'm gonna pay you eighteen dollars an hour, right? it's hard to to make that make sense. So I think that's what we're seeing is the only way to entice these
Rory Anderson: Well
Matt: guys to even come and think about coming to work with our our industry is we have to offer more money. So I think that's the I think that's the biggest in my mind that's the biggest driver because it's not a stable cost. Right? Like it's not we can't we can't budget anymore like we're in twenty seventeen. We just it's it just it's not possible. So we have to look at
Rory Anderson: Mm-hmm. Yeah.
Matt: other areas where we can affect NOI, I guess, is the main one.
Rory Anderson: Well, and to your point, it's it's a supply and demand issue, right? Like you can't find people that are qualified and so you do you have to pay more because there's a shortage of them, right? And so you've got that issue.
Matt: Sure. And I'll put a little shameless plug in there. If anybody wants to hire our company, I can come in and train your guys for you. Like that's that's one of the reasons why I started the company in the first place was to develop training systems. because I think unfortunately, because these kids and these younger guys have not went out when they went to school, they didn't go to school for trade. and I I think we're starting to see some of that come back because people are understanding it's you don't necessarily have
Rory Anderson: Mm. Right.
Matt: have to have an MBA to make a six figure income anymore, which is phenomenal. I love that. and but I think it's gonna take time and and it's it's obviously we that's that's something that's against us in the the operations of multifamily is usually we don't have time for the the learning curve. So
Rory Anderson: Mm-hmm. Yep. Yeah. And honestly, like any high school seniors out there listening or juniors, like go get into trades. There's it's such there's such a need right now. Please. We need we need more people in the trades. so what do you think is the biggest misconception that owners and managers are having right now about reducing operating costs?
Matt: Absolutely. Well in my mind it's the biggest misconception is the fastest way to s to improve NOI is to spend less money. I know it it sounds counterintuitive, but I think I think sometimes it can be completely wrong. so a lot of owners that at least I've worked with, they see a maintenance budget of three hundred K with everything in it, right? Like they see all line items and they're like three hundred thousand dollars for the year. but they start asking questions like can we cut supplies? Where you know, can we reduce staff? Can we delay projects? As can we negotiate our our vendors harder? And I I agree that those questions aren't necessarily bad. but they're focused on the expense itself and not the cause of the expense. So in my mind And a better question to ask is why are we spending this money in the first place? Like, why do we why do we have it budgeted here in the first place? because I think that challenges us to look at an operational systems look at that point. Like you're looking at you're looking from a 30,000-foot view and saying, okay, if we're going to spend this money here, does are are we getting the ROI back on that? Because if not, you know, you can pivot and you can make changes.
Rory Anderson: Mm. Mm-hmm. Mm.
Matt: changes. but I think that's in my mind, I think I think asking that question, why are we spending this money here in the first place, and it I think it comes back to what you said earlier, kind of my philosophy with maintenance is it's not a cost center, it's more of an investment strategy. Like it's you have to look at it from that perspective because there's so many things that deferred maintenance can it can absolutely tear your valuation apart. So
Rory Anderson: Mm-hmm. Yep. You can eat up your property. Yeah, it's true.
Matt: Yeah.
Rory Anderson: So I I think it's important to be looking at your budget every year and kind of analyze, go back and say, are there things that we're spending money on that maybe five years ago it was good to spend money on that, but maybe now, this year it's not? Because that's another thing that I've seen is like sometimes the budget just gets rolled over from year to year to year to year and and it's not we're not really like looking at every item going, mm, maybe and and especially right now, in a time where it is crucial to be operating as neatly and and tightly as you can in order to continue that NOI success, I think it's important to go back and look at those line items again and just reevaluate and say, is it something that we need to be spending money on? but I I agree with you
Matt: Yeah.
Rory Anderson: You have to look at is this something that is adding value to the property, adding value to the residence, you know? We had a instance where the other day I was looking at one of our budgets and we had a contract with a rug cleaning company, and it was really expensive, you know, and I'm like
Matt: No. Yeah.
Rory Anderson: Maybe we don't need to be doing that anymore. Maybe we just need to get some better rugs that don't need to be shampooed. And like maybe, you know, some mats, some door mats that, we buy that we don't need to shampoo every single month. So, you know, there's just different things. I think you you can look at them and say, What what is it that's gonna give our property more value right now?
Matt: Sure. Mm. Yeah. No, I I I totally agree with you. Totally.
Rory Anderson: So if you inherited a two hundred unit property tomorrow and you needed to reduce maintenance spending by ten percent over the next year, where would you start? What would you look at? What's your advice?
Matt: Well, so I made a list of these things because I wanted to make sure I was as thorough as possible. and the first thing is actually what you just mentioned. I think I would definitely look at vendor contracts and I would audit those. I think I think a lot of times, at least in my experience, I have seen, you know, fifteen to twenty five percent leakage in these areas. That's a that's a big deal, especially especially at a lower cap rate. That c that can be hundreds of thousands of dollars. I i essentially could be.
Rory Anderson: Yeah. Mm. Yeah.
Matt: at least over the time frame of of owning the property. So, one of the other things that I see is or that I would personally do would be a turn process standardization. you know, I I think there is there are ways to
Rory Anderson: Absolutely.
Matt: To systemize I mean and I know it sounds property management one on one, systemize your turns, but unfortunately because of the skill level of who we have coming in as our maintenance teams and a lot of times they don't they've never done this before, and if they're not trained by the right person they may set them up for for failure. So I would probably take a look at the turn process for the property and see if there's a way we can standardize materials, also labor variances, you know, because I I think Thank you. making the team understand let's not run back and forth to the shop forty seven times, because that's that's a cost to the property and you add that in to that turn cost and that's why it's so difficult to really nail down turn cost is because you never know necessarily the labor hours that you're putting in there. so that would be number two. number three, I would probably look at work order like
Rory Anderson: Yes. Yeah.
Matt: categorizing? so basically I would separate real emergencies from the noise. so let's say that we've got we have you know five work orders that one's a doorknob or three work orders that's that's that so I can make the story shorter. we've got three work orders one is a doorknob is loose one is a light bulb and in a bathroom and the other is a fridge seal around the door is not working. So in my mind as a maintenance supervisor I'm going, okay, the fridge seal has to be done first because there's a there's potential loss of capital there because if the fridge continues to leak air, all the food goes bad for the resident, the resident's gonna come into the office, they're gonna expect compensation, and the property's gonna end up giving some sort of concession, most likely.
Rory Anderson: Mm-hmm.
Matt: which is still a loss to the NOI. and so I see that as as prioritizing those things. I have seen maintenance guys that would say, Okay, I don't wanna have to do the door on the fridge because it takes longer. So I'm gonna go do the light bulb and the doorknob, but I'm gonna leave the fridge till tomorrow. And so there's a higher potential for that loss of capital in my mind.
Rory Anderson: Mm. Mm.
Matt: So I think setting those types of things up. those are pretty much my top three that I would do. you know, 'cause I've done this myself even. I've stepped into as a regional and a facilities director, I've looked at labor costs first. unfortunately. because that one stands out so much easier. Right? Like we see that one. That one stands out like a sore thumb. So we're like, okay, if we take if we can attack it here, then it doesn't really matter what all these smaller t items are.
Rory Anderson: Right. Yeah.
Matt: But at least for me, not recognizing all of those small things, that's what adds up. and that's really where the systems come into play because all of the smaller items are the things that is the system for running the property. It's the operations. So
Rory Anderson: Yeah. I agree with you. And I think that there's also when you talked about like lack of experience sometimes with the process. I've seen that with managers too, like managers not understanding how to lead that turn process. And so where would you say would be how do you learn that? Like what's the best way to learn that? I mean, calling you, I guess. Calling you.
Matt: Mm-hmm. Yeah, yeah. No well, i yeah, you can definitely do that. I I I have I have no problem. I'll spend as many dimes as you want me to spend. So no, I think I think unfortunately, it's it's a it's a time plus mentor.
Rory Anderson: Ha ha ha Mm.
Matt: And by that I mean it's gonna take a little bit of time 'cause, you know, if you're new to the industry or if you've been a property manager for a couple of years, and you haven't had good maintenance around you in the first place, it's gonna be really, really difficult to develop that consistent e expectation for how we do turns and that process and how it works. and I think that that that falls to the management companies or the owner operators
Rory Anderson: Mm. Mm.
Matt: in order to put those processes in place and really you know really drive home to the team these are processes and I think one of the reasons why it sometimes doesn't get done that way is because it is it it is the time plus mentorship. So it's it's they know it's going to take a long while to get this really concreted in the thought processes of day-to-day operations. However if if you never start
Rory Anderson: Yeah. Mm-hmm.
Matt: doing it then the yeah that manager's never gonna know. So I think probably the easiest way of doing that is picking out within your organization the really high performing teams because you're gonna know the ones that are high performing. And you're gonna go to those people and you're gonna say, hey how could you help us put together this this plan of action for this property?
Rory Anderson: Mm-hmm.
Matt: And it's more of a a collaboration rather than, the corporate office or the ownership team trying to come up with how to do this. you already have someone who's performing really well in that space, so let that person be the the guide for the rest of the team.
Rory Anderson: Right. Yeah. Yeah.
Matt: And you know, I I've I've done that I've done that both in maintenance side and on the administration side. I came in and for one company that I worked for and my wife and I actually developed a a leasing training system for our company because it was there was nothing standardized so it was everybody was doing something totally different but the corporate office, my regional, everybody wanted a standardized at least for that region, they wanted a standardized way of doing things. So we developed this and then we put on basically a little seminar for the entire office teams and and explained why we sell the way we do, how to do it, you know, all of these different things. And it it and again it took time but it also
Rory Anderson: Mm.
Matt: took bringing everybody together in one session. We all got together, we were there for a whole day. so you know, there's some disruption to day to day operations in training as well, but I think the I think the benefits long term are exponential. Like it it so
Rory Anderson: Absolutely. Yeah. Training yeah, you you slow down to speed up, right? I mean, it's that whole concept. And I like the part where you talked about having a mentor because I think that's actually one of the best things that companies can do is take a high performer and they can be a mentor, not only does that provide them leadership opportunity, but it also gives them an opportunity to share what they know and
Matt: Yeah, exactly. Yep.
Rory Anderson: say like hey, I've already done this, you know, five hundred or a thousand times. So just learn from me. This is the best way to do it. And here's how you do it. And if you had them come on property, to maybe support them once a week or even once a month, just to of walk through the the role with them and keep those expectations high, I think that helps to just create a better system of accountability, but also success. For those people that are newer.
Matt: Yeah. No, I think so I I most of my mentors have been like I guess they've been they've been pretty hands on. I've had a couple that weren't they called themselves mentors or leaders, but they didn't actually I don't think they actually knew what they were doing and I I I that sounds arrogant and I I know. I it sounds extremely prideful. but you can tell and and I think the average, you know, schmuck like me can tell when somebody actually knows what they're talking about because when you ask a question, they can teach you how to do it. They can literally show you their expertise in action. And I think that's you know, I think that's a big thing
Rory Anderson: Yes.
Matt: there's a lot of times I've I have personally made the mistake and making a few people mentors in my past. and they weren't ready for that. Like it went to their head and they said, so now I have some sort of power over this person and rather than let me see if I can help this person, and and and be a good steward to this person and really show them here's how you do this, it it was more of a power trip. So I think there's a fine line you have to walk, but there are definitely high performing assets that at every property. The most properties even even the ones who are struggling, there's probably one or two lights there somewhere that are they're doing what they're supposed to be doing at a high you know, a high level. So
Rory Anderson: Mm. Y That's a good point. I like that. Last time you talked to me about the eyes up maintenance or like the eyes up mentality. So I wanna know, do you have any stories where that's saved money? Where that philosophy is translated into dollars saved at a property or
Matt: Yeah. Yeah. Sure, yeah, absolutely. well I have I probably have several, but the the easiest ones that I can think of are gonna be like roofing issues, because you're obviously eyes up that way. but I had a tech one time at a property. he didn't have a supervisor at the time, but I had a tech. he noticed that there were shingles missing over a building that we were he was ninety five five percent sure that there were leaks in the attic. and nobody had had reported them yet. And he was he was thinking that it has it has to be leaking because there's literally ten or twelve shingles are completely gone. Like I can see the felt underneath. but we hadn't gotten any call. So we basically made a you know emergency on the apartment and sure enough he was he was absolutely right. and the reason why the the
Rory Anderson: Wow.
Matt: the folks had not told us anything is because it was a person who worked abroad and they were they were gone sometimes couple of months at a time and and and just would not know. You know, just wouldn't be there, right? and this was before cameras were ring cameras and all that stuff. Everybody has cameras in their houses now. So you probably would notice it at this point, but back then, you know, I'm as old as dirt, so
Rory Anderson: Right. Right. Yeah.
Matt: you know, n we didn't have those things back then. But anyway, so this this this tech catching that, We went in and it had it it was leaking, but it was only I it was isolated to one room at the time. and it was the storm had come through probably the weekend before and he caught this on a Tuesday. So my in my mind, i it if we if he hadn't caught that and this guy didn't come back for a month and a half, and he's on the top floor, we had three floors, you that's when that's when the that's when the NOI
Rory Anderson: Mm. Wow.
Matt: gets really affected. and I know potentially you have some insurance offset there, but still, I mean there's a lot of I mean I obviously you know there's a lot of factors that go into water damages. But that's the biggest one that I can remember. was just be and it was it was so crazy how it just
Rory Anderson: Yeah.
Matt: If he hadn't had that eyes up thought process that we had been teaching He would have never seen those shingles or even maybe not even known what he was looking at, honestly. because he was also going through training and had a mentor and was, you know, showing him how to do the things. 'Cause this guy was like I think he was maybe twenty two, something like that. So and I'm not saying that twenty two year olds don't know anything. I'm just saying like a lot of times th you you know, it it you just don't know what you don't know yet. I didn't know lots of stuff when I was twenty two. So
Rory Anderson: Mm-hmm. Yeah. Me neither.
Matt: But, so I think that's that's probably the biggest one that I can think of. And I I love coming up with little one liners. So I actually wrote a a note on this one and I said eyes up is basically loss prevention disguised as maintenance work. I mean it's it's that's all it is. You know, it's it you're you're looking for
Rory Anderson: Okay. Ooh, I like it. I like it.
Matt: things that are gonna cost the the the site money. And that's really all eyes up is because it's it's an additional thing you have to take on. Like you know I'm gonna pick up trash, I'm gonna do work orders, I'm gonna do turns. I could ki I I could stay in my you know, in my lane there. Yeah, you got your blinders on, you're not paying attention to anything else, I'm just gonna go do what I have to do, and I'm gonna go home. But I think I think that that in my mind that's what sets a high achiever apart, is that's the person who's out there looking for those things that are gonna drive costs down for the site. So
Rory Anderson: In your little lane with Yeah, I love that. Okay, I have a I have a little story about eyes up that I experienced a week ago because I was I was on site and I decided to bring my work clothes and help the team clean breezeways. And so we were cleaning breezeways and I I looked up and there was a whole part of the soffit hanging down, like like a five foot portion, right? it was huge. but it was at the back of the property, so
Matt: Okay. perfect. nice, okay. yeah, sure.
Rory Anderson: Like it just didn't even notice. No one had reported it, you know. But anyway, so I I was able to go talk to the maintenance team and be like, Hey guys, I don't know if you knew about this but
Matt: Yep. Sure. Yeah. And that's That's exactly what I'm talking about. And you know, sometimes sometimes on the i i if it's on the back side of the property, those are the ones sometimes that that definitely get missed, especially if there's a high workload at the site or if there's things going on that that, you know, maybe we don't see, but but I think for the most part, yeah, you're right. that's how you go find these things because here's the thing, if that that soffit falls, squirrels, birds, grain, I mean you name it.
Rory Anderson: Yes.
Matt: It's getting up in the attic and it's gonna start they're they're they're gonna start causing havoc up in there. and then that's just additional funds that's gotta come away from the property because we didn't we weren't looking for those little things to fix, right? Like preventative maintenance is, you know, let's let's I I don't wanna wait till it's broken to fix it. So I I think we talked about that on the last one as well. It's you know, we wanna if it ain't broke, don't fix it is not the the right concept to have in your mind when you're
Rory Anderson: Yeah. Right. Yeah, and also, this is another story, I guess, from when I was out there. There was a tree that was I mean, it's huge and it was towering over this three story building, right? and it's an old, old tree. I mean, one windstorm and those branches the branches were hanging over the roof. And I just thought, wow, that's probably not good because one storm and we're gonna be having
Matt: Sure.
Rory Anderson: a caved in roof. You know? So just just being on property is so good for me because sometimes when you're on property too, you just it looks the same every day. And so sometimes having an outsider come in and be like, maybe we should think about that tree. You know, it's it's also good. And I always love that. I love when somebody else brings me ideas because, you know, I it's it's good to have other perspectives.
Matt: Very possible. Yeah, absolutely. Right. Yeah, no, I I definitely it took me a while to to understand that concept. in my younger days it was frustrating to have someone walk onto the property and find things. and and I'm like w I I just didn't see it. but that's the point, right? Like you didn't see it because you're in the day-to-day grind and so I I had to really train my teams to understand if our regional or if I'm the regional and I'm pulling up to your
Rory Anderson: Yeah.
Matt: site, I'm not nitpicking your site. It's nothing like that. you probably just didn't catch it because you're so busy doing the day-to-day operations. I come in here with a new set of eyes, and I found this same concept in turns. I think there should be definitely someone who does the turn and someone who does the final inspection of the turn. Right?
Rory Anderson: thank you for saying that. Yes.
Matt: And and and the reason why is because different eyes see different things. and I'll be the first to say I am very particular about the way I do things, but it may not be your way, right? You may see things and you're like, No, I really want that to be done too. But there are things that I'm like i as a maintenance supervisor, I'm running around in there and I'm going, Okay, I've got everything working. Everything looks good from my perspective, but I think it's so subjective that in order to get an objective perspective, in my mind, that that's kinda cool. I didn't even catch that until just now. to get that objective perspective, you have to have someone else take a look at it. Because you need more than one set of eyes, because, you know, again, you see things differently than I would see it. or you may catch something that I just missed. So it's no different from a grand scheme property inspection.
Rory Anderson: Mm-hmm. Ha ha ha Okay. I agree. And here's the thing. I want to say to all maintenance people that when when that final inspection comes, you also have to be humble. You can't be like, no, this, I'm sorry, you're wrong. you gotta be humble because there might be things that that somebody is like, yeah, you know, this needs to be done better, or it needs to be done differently. And you kind of have to be willing to accept that and say, Yeah, okay, I can see your perspective. I can see you know, anyway. I just wanna say that 'cause I I've seen I've also seen that where maintenance professionals get a little defensive and maybe feel like they're justified in the way they did something, which they might be, but you gotta be open. You gotta you gotta be open. Yeah.
Matt: It's a it's a hard peel to swallow. They may have been yeah, no, I I've done it myself. Yeah, I've done it myself. I've I've I've done turns and And you know, the the the final inspector walks through. I'm probably the person who initiated the final walkthrough at this point in my career. And I'm so I'm wanting them to find things. And then when they find things, I get mad at myself. I'm like and and I'm mad at the situation, but I end up taking it out on them. I'm like, why did you no, that's not that makes no sense. Why do we gotta do it that way? That makes no sense. And so I agree with you. I think that we have to maintenance guys, you gotta be c you gotta be humble in those situations. It's it's not that
Rory Anderson: Right.
Matt: That you have done anything wrong. it's just that you you you may not see it the same way that this person sees it. especially and and I I personally I love it when it's an office team member that does the final inspection, not another maintenance guy. And the reason why is because typically the office personnel are the people who's selling that product. They need to they know what their prospects say when they walk those units or don't say. they know, you know, you don't have to be a
Rory Anderson: Right. Mm-hmm. Right.
Matt: an expert in body language to tell if somebody walks in and curls their nose up at, a paint job, there they may never say that the paint job looks like crap, but Even if it's just one one wall, one spot on a wall, they don't rent. Well we just lost that lease because we should have caught that, but we had two maintenance guys inspecting the turn rather than someone who's selling the product as well. So I I personally I like it when you basically take turns. So
Rory Anderson: Love it. Love it. Okay, I wanna know, let's go back to vendor contracts because you talked a little bit about that, but where do you see properties wasting the most money when it comes to vendors or service contracts?
Matt: I think the biggest driver there is scope of work. And and on both sides. Like
Rory Anderson: Mm.
Matt: A lot of times and I and and it's no fault to the people who are at the sites, right? It's it's really no fault. but I know that you and I have worked with some some folks that will take a look at the scopes after the vendors have created the scope because vendors are looking out for the vendor, right? They're not necessarily looking out for your bottom dollar. there are with the exception of a few, there are a few vendors out there who really do care about they understand the
Rory Anderson: Right. Right.
Matt: the business side of things and and even some of them may have even worked in this industry before so they kinda understand that the the the value build on the property is what keeps them in business. But for the most part, letting vendors make their own scopes is And and well, let me let me rephrase that. Letting vendors make their own scopes without having someone qualified enough to review that scope and make sure that it makes sense that why are we doing all of that? They can they can question things, right? so I think that is probably the biggest driver. And then not enforcing that scope once somebody has said, I'm gonna do all of this for you
Rory Anderson: Mm.
Matt: And, you know, I I guess that's it's more accountability at that point. Like you you hold them accountable to what they said they were gonna do for you. 'cause I think I I mean, I know I have seen just in the last few years I've seen renovation vendors say we're gonna do all these things to your unit and then you you walk in when they say they're done and you're like, Wait, there's no backsplash, there's no you didn't put the garbage disposal in, you know, the the appliances are still sitting in the boxes, like what do you mean? Like you said it would be you said it would be ready, right? Like we could rent it. So I I think I think that's part of it.
Rory Anderson: Yeah. Yeah. And that's a great lesson, right? Being clear about what the scope actually is. I found that it it really helps to have it in writing. I like to also walk it with the vendor, talk to the vendor directly before they give me the bid. Yeah.
Matt: Yes. Yes. Yep, absolutely. I think because look, I'm not saying that we shouldn't trust vendors expertise and what they're they're scoping up, or writing up that needs to be completed. but there are times and and there may be there there have been times that I've seen that they've written things into the scope that don't necessarily have to be done by their team. Sometimes things can be done by the in house team.
Rory Anderson: Yeah.
Matt: So it really just it it's a it it's a balance. I think you have to balance all of that out. So
Rory Anderson: I actually that was a learning that was actually a learning curve for me too. Understanding what can the in house team do versus what can the what can they not do or what should they not do? And so maybe switching into this this topic of what services should operators almost always outsource versus what services should they seriously consider bringing in-house? Do you have any thoughts on that?
Matt: Okay. Sure. yeah, yeah, I've got I got plenty of thoughts on that. I I I definitely think that at least for my teams, what I always told people w was what I want you to outsource are the major repairs. I want you to outsource roofing issues. One for liability reasons more than anything and insurance cost. if you're telling your insurance company that we allow our our teams to get on the roofs, your insurance just it it there's a
Rory Anderson: Yeah. Yeah.
Matt: There's a higher higher premium there just from that one statement. so roofing is usually something that I would I would outsource. Let somebody else take on that liability. major HVAC replacements. Now, that being said, there is a caveat here that I I am I am learning about that it it used to be because you wanted to make sure that they if they didn't know how to use a torch to be able to torch these these line sets.
Rory Anderson: Sure.
Matt: and things like that in. But technology and the development of different types of connectors has actually made some really awesome
Rory Anderson: Yeah.
Matt: ground on all of this. So they actually have push to fit connections now just like they do for water pipes. They actually have them for HVAC pipes as well. So you can literally just push and connect these things together and you don't have to you literally don't have to solder anything. You don't have to pull a torch out. There's no risk of fire. It th like it's it's actually a really cool development in HVAC, to have that option. So it it is
Rory Anderson: Okay.
Matt: fairly new. I think it's been around probably it's probably been around ten ten or eleven years. I've personally never used any of them, but I've seen many, many demonstrations of them and they seem to hold up. so there there would be some cost savings there, but I think The problem with major HVAC replacement is the time that it takes to take the old system out, rebuild the plenum, put everything back in place. The soldering is really typically not the the longest part of that installation anyway. So I think, from that perspective, most of the the vendors that I've I've used here in Nashville, it's anywhere from four to six hours to to change out a unit properly. So, you know
Rory Anderson: Mm. Mm.
Matt: again, I I think I think you have to look at your high value work.
Rory Anderson: Mm.
Matt: if it makes sense to have your team do it in house, and they they have the time to spend six hours on changing a unit out and saving you a couple thousand dollars in labor, maybe that makes sense. I but I I unfortunately the the properties that I have had worked with that we just didn't have the we didn't have the capacity because of workload for the rest of the things that were going on at the site.
Rory Anderson: Right.
Matt: It was it was a little more difficult. But I would I would definitely say that. electrical panel work. I I'm just a big guy. You don't like most of our guys barely know how to change switches and light fixtures and things like that. And and again, it's all training. Eventually they'll they'll probably be really good, decent shade tree electricians.
Rory Anderson: And don't touch it. Yeah. Mm-hmm.
Matt: But when it comes to a panel or taking messing with the meter outside, really you should leave that to professionals. I I know this is a big one for you guys and really it should be for everybody. Pest control. That should never be done in-house. Because it's not I I would challenge anybody to prove me wrong on this. in twenty five years in this in industry, I've never seen an internal pest control system
Rory Anderson: Mm.
Matt: that worked and probably because it wasn't getting worked by the team they weren't doing it and I know that there's some caveats. I'm sure there's one or two properties out there. But I would say overwhelming majority probably shouldn't do pest control in-house. but I also know that that's one of the the the
Rory Anderson: Ha ha. Mm-hmm.
Matt: the vendors that's so hard to find somebody who actually does a good job at that. Like that's you know, it's it's super, super hard. So I I think think that would definitely you you have to I guess there's some some balance there as well.
Rory Anderson: It is. It's a similar industry where it's hard to find people that have the expertise, right? Like not many people grow up wanting to be a pest control technician. That's just the reality. Supply and demand.
Matt: Right. Yeah, exactly. Right, exactly. Exactly. Right, exactly, exactly. So one of the other things, the the last thing that I would probably say that we so outsourced at least with my teams would be like specialized plumbing, like sewer lines, excavation, things like that. drain cleaning in my mind Unless there's unless there's something weird about the plumbing system, which there are some in in the older assets that I've worked for, there's some there's some nuances that make it tougher to clear drains. but for the most part your teams should be able to clear your drains for you. so I don't see that as something we should hire out. Unfortunately it does get hired out.
Rory Anderson: Mm.
Matt: So you but in my mind it would be specialized plumbing like changing shower valves, sewer lines, excavation, things like that. you know, major plumbing repairs w in my mind. So some things that obviously you would do in-house are gonna be your turns. You you definitely wanna do those. and then coming back to you know, plumbing and electrical, basic plumbing and electrical, I've seen I have actually seen invoices. come through for an electrician for three hundred dollars for them to come and put a a a single pole switch in, one light switch. But because of the travel time, the service fees, the all of that, and not only that, but we used our parts at the site. Which is even more frustrating.
Rory Anderson: Mm-hmm. Ha
Matt: Like I y the so the maintenance guy went and grabbed the part, gave it to the electrician, and said, Go do this for me I'm like, Okay, but what? So you know, I I think those definitely
Rory Anderson: And that's where that's where also like I I hope that property managers are listening to this too because it's also an education issue, I think, just with the whole team. Like it's it's important for the the manager to know, like, no, your your technician should be able to do that.
Matt: Sure. Yeah. Yeah. Yeah, and and if if you tell me that you're not qualified to do that, that's fine. But if we're gonna th this is something that I I I told all of my teams, if you're gonna hire something out that you don't know how to do, try your very best to tag along with that that vendor.
Rory Anderson: Yes, learn how to do it.
Matt: Learn how to d watch what they're doing, so that you can do it the next time. some vendors don't like that. Some vendors are, you know, weird about that because, you know, they just don't want you knowing how to do it so that they can get more calls. I get that. but
Rory Anderson: Yeah. Yeah.
Matt: But the g in my mind, the good vendors, the ones who really do they want to have a business relationship with you a long term, they're much more willing to have you come with them. Cause one, honestly, they're not making a lot of money on that little service call. They'd rather be doing a big project somewhere where they're making thousands of dollars instead of hundreds of dollars. So it you know, not that not that that's not a good thing, but they just they would prefer not to do those smaller things. so a lot of times they're willing to train and
Rory Anderson: Right.
Matt: show show your guys hey here here's a cool tip I actually that's how I know how to do a change out a GFI receptacle in my younger years I had no clue how to do that. I kept putting a GFI in wrong and it kept tripping and so I called the electricians and the a really nice older gentleman came in he's sitting there working on it and I I'm watching and he notices that I'm watching and he's like are you the one Who put this in and I said, Yes, sir. I was the one that put that in there. He's like, Well, let me explain to you what you did wrong and that way you can do it right next time and you don't have to call me. and it it was it it was one of those situations where he just you know, he gave me a very, very simple an
Rory Anderson: That's awesome.
Matt: saying to just remember and I'll never forget it. line hot, load not. So I'm looking for my line into the back of that GFI is my hot wires and my load wires going out to whatever it's powering is it goes into the load. So I'll I'll never forget that. But that's that's the kind of things that I think vendors should be willing to do. and and your team should be willing to go and do that. Because when I asked that question from that maintenance tech
Rory Anderson: Yeah.
Matt: Did you go with the vendor to watch him put that switch in? The answer was no. I didn't realize I needed to do that. And I'm like, okay, well that that pretty much tells me what I need to know. that we we've got to get you some more training on making sure that you understand the expectations here. So just
Rory Anderson: Mm. Yeah. So good. Okay. I gotta
Matt: Just one one one one last thing. I would say I ha I I created a little rule. Outsource complexity, internalize repetition. So whatever you can do in-house that's that's that you can do over and over again, you should probably do that in-house. Anything that's gonna be super complex, especially in today's world with our our techs and and supervisors, should we probably should pass that along.
Rory Anderson: Okay. I like that. I like that. Yeah, that's a good way to remember it. Let's talk about the your take on that old industry benchmark of one maintenance person per hundred units. Do you think that makes sense still today? Because labor costs are expensive, right? It's one of the largest largest expenses on any property. So, but what do you think about that whole, one to one hundred philosophy?
Matt: So I I personally I it's an okay concept. It's a bad metric in my mind. and the reason I say that is because
Rory Anderson: Okay.
Matt: most of our well not most, but definitely a lot of our assets that we're managing and overseeing in today's world are are fifty, sixty years old. Again, they were never they weren't built to last this long. I don't I I truly don't believe that. I I think that they were built to tear down in thirty, forty years something else is gonna get built. so all of your systems within that property are falling apart. which hints that you're gonna have more labor intensive repairs. If you're doing things
Rory Anderson: Mm-hmm.
Matt: in-house. Now that's that's the big caveat there is what you're doing in-house versus what you're hiring out. But I I think you know the newer newer assets that these class A things that are being built they're under warranty for three to five years on most things. Builders are having to kind of push out those warranties a little bit longer at this point. And so you you don't you don't need a a huge team to
Rory Anderson: Yeah. Yeah.
Matt: fix things there because when something breaks they're just gonna call the vendor that built it and say, hey I need this sub to come back out and fix this. but on these older assets you don't have that luxury right like you you know that you're gonna have things that are gonna break. So you know I I would say I would say it's it's property specific even. you have to look at the needs of that specific property. because even even the older sites are not you can't you can't look at one site and go, okay, this site should be operating like this one, same kind of same age, same demograph i it it's and and I think i at least in my mind the reason why is because it could be a difference of the quality of maintenance team that you have at the site. Like if you have a if you have a gung ho
Rory Anderson: I agree. Yeah.
Matt: very qualified, very professional team running that asset, you're probably they're probably doing a lot of things in-house and you're not gonna have to hire out as much. So you're gonna see the savings. But in order it but again I think that comes back to the mentor program. That's when you take that guy and you say hey can you help this guy over here? or would you guys be willing to at least discuss what you do to make things work so well over there. And I'm not saying that that would work every single time but I definitely
Rory Anderson: Mm mm. Yeah.
Matt: I definitely think the one per 100 is it's it's a little outdated. you know, I think it was great in the you know 90s and definitely through the early 2000s. but even then, you know, again, like I've I'm working or have worked at properties that were built in the mid-60s.
Rory Anderson: Yeah.
Matt: You know, these these properties are th these plumbing systems, the electrical systems, none of this was none of that was built for modern technology. And for us to for us to expect that that site's gonna run like a brand new one that you're building with all the new codes and all of those things in place, it doesn't make any sense in my mind anymore. So I think I I think a better metric would probably be again, just looking at the
Rory Anderson: Right.
Matt: site specific, workload, and then, you know, age a and then even sometimes just looking at your capital expenditures that you know you're gonna you have coming up, you have to take all those things into consideration. So you know, I I've
Rory Anderson: Mm-hmm.
Matt: I know I'm I if if i I I had an old r regional that was all about this one per one hundred and and she would definitely slap me on the hand for speaking ill of it. but it's it's definitely it it's not the right concept in my mind. Not anymore.
Rory Anderson: Yeah. Well, I'll just put a plug in for also thinking outside the box. I mean, we have an asset that's a newer asset. It's like five years old, but it's a newer asset and the way the management company runs it is they have it's it's it's like a hundred and twenty-ish units. So it's not like a huge property. And to be honest, like it's pretty maintenance light. So they
Matt: Mm-hmm. Sure.
Rory Anderson: They share the maintenance with other properties and we only have somebody come when it's needed or when the turn's happening. And so there's not somebody on site every day. Splits the cost. it it's it saves us money. It saves and then it helps it's helps them provide work for them at other properties. So there's different ways to do it, right? And you don't necessarily have to have somebody on site all the time.
Matt: Sure. Me. Yeah, no, I think I think what you're talking about is centralization. I think that that's that's a buzzword in our industry that sometimes it works, but I think it's it's gonna work on those properties that you're talking about. It's the properties that are again, they're Exactly it's not
Rory Anderson: For sure. It's not for everybody, right? Like you can't you can't do that.
Matt: You you can't take a portfolio of properties and say, I've got a property that was built in twenty twenty, I've got one that was built in twenty eighteen, one that was built in two thousand one, but then I have ten that are built in the before the seventy or you know, before the eighties. your centralization team is gonna be at those older properties all the time. You're you're you're never gonna be able to get to the other side. So I think I think centralization is again, it's a good concept, but I think it's so hard to achieve what
Rory Anderson: Yeah. Yeah.
Matt: what everybody thinks it's supposed to be, because of that same reason. So
Rory Anderson: Yeah. I would agree. Okay. Before we end, I want to ask you one more question because I think this is one that will that people will resonate with. What's the smartest cost saving idea that you've seen a maintenance supervisor implement at a property?
Matt: I actually was I had a maintenance supervisor create turn kits for each floor plan. So he he knew exactly what he was taking with him. He already had pre packed. So it was it it was kinda like a and and I think the concept is out there now and has been for a long time. But like renovation kits, they call Chad Packs through Chadwell and different things like that. So you got pro packs and all that. But this would be something that that was broken down f specifically for the site. So you know you you basically put everything that you could possibly have in that box and you're taking it with you that you you know, 'cause you know you've already walked the unit. Walk the unit for your list anyway. but it's always nice to have some of those universal things that you might have missed already in the box because then you don't have to run back to the shop. So I saw a guy do that one time and and I tried to implement that myself. it worked really well. but I have I I personally have a little bit different way of doing that. but it it seemed to work really well for him and his team. and we trained some other guys to do the same thing, and it worked it was you could duplicate it. So I think that was
Rory Anderson: Yeah.
Matt: really cool cost savings. because again, and and that could be nuanced depending on the age of your property and if if if everything's uniform, things like that. So I think you have to look at things like that as as well. But I definitely think that that's that that was a really cool
Rory Anderson: Right.
Matt: cool way of doing things 'cause I I'd never seen anybody do it from a property level. I knew you could do it from a renovation pack perspective, but I but I think it's I think it's super impressive to see this guy, you know, put his own pack together based on the unit itself. And so I've adopted some of that stuff in the way I train now.
Rory Anderson: That's cool.
Matt: Because we wanna be very property specific and and unit type specific because every unit type could be a little different on sites as well. So
Rory Anderson: True. Very true. Okay, if you could leave owners with one rule for protecting NOI in this expensive economy, what would it be?
Matt: I think it would come back to stop treating maintenance like a cost center. understand it. every dollar that you could possibly save, right? Like you could you could cut. if you do it on the maintenance side and and you don't improve the processes in order to make things work smoother, it's probably gonna cost you more in the long run. So I think that's that's probably the thing. and I think I think the real rule, I guess in my mind would be control failure events. again, I I I know I it property management one one but maintenance is to maintain. So we don't want things to fail. If we can if we can stop a a refrigerator compressor from failing by making sure that we keep the the all of the coils and everything clean on that thing on the back and we're checking those or each HVAC systems, things like that, all of that proactive maintenance is going to you know, is is obviously the best thing to do. So if I were gonna spend money on stuff
Rory Anderson: Mm-hmm.
Matt: that's the kind of stuff I would do because you you're preventing the failure you're controlling the failure events, not the expense lines, I guess is the best way of saying it. So you're not you're not drilling down so far. You're you're really more looking at how can we prevent major expenses.
Rory Anderson: Yeah. I like that. Matt, you're so awesome. This has been such a great conversation because I think you've challenged a belief that a lot of operators have right now. And when expenses start climbing, their instinct is often to look for the things to cut, right? And like, how can we make it better? But you what you've shown me throughout this conversation is that the best operators aren't necessarily the ones cutting the most expenses, they're the ones preventing those unnecessary expenses from happening.
Matt: Sure.
Rory Anderson: In the first place. And I
Matt: Absolutely.
Rory Anderson: like that we talked about vendor management and staffing efficiency. We talked about the eyes up philosophy to help those teams identify those problems before they become expensive emergencies. it's not, you know, maintenance isn't just an expense line on the budget. It's it's really one of the most powerful tools we have to protect that resident experience and preserve the asset value and ultimately improve NOI. Because I've seen sites
Matt: Absolutely. Mm-hmm.
Rory Anderson: that because their maintenance is keyed in and they and because it's operating well, that's what's that's what's creating the most NOI at the property, honestly.
Matt: Well and I I would even I would even go as far as to say that's probably what's what's driving your renewals. I mean it's it's an industry st it's statistic that usually ninety five percent of the reason why people move out of their site is or their apartment home is because maintenance
Rory Anderson: Yeah. yeah. I would agree.
Matt: didn't get to fast enough or didn't do it the way they you know, they had to come back three or four times. So I think that that definitely affects the resident experience as well. So
Rory Anderson: Yeah, totally. Well, for everyone listening today, I here's the challenge. I want you to pick one thing from today's episode and implement it. maybe it's reviewing your vendor contracts, maybe it's evaluating how your maintenance shop is organized, maybe it's walking your property with the eyes up mentality, or taking a closer look at where your team is spending time versus where they're creating value. Because in today's environment, those small operational improvements can have a massive impact on your bottom line. If you got value from this episode, please share it with your maintenance supervisor, your property manager, your regional manager, your ownership group, anyone responsible for property operations, because these are the kinds of conversations that create results. And if you haven't already, make sure to subscribe to the show. Leave us a review. We love that. Check out everything we've got going on at the propertyplaybook dot riverside.com. Matt, thank you again for coming back and sharing your knowledge with us. I I want I want you to do an unpaid advertisement real quick before you have to go.
Matt: Of course. Okay. Well, w the the one thing that came to mind this time was the DeWalt Tool backpack.
Rory Anderson: Okay.
Matt: I I actually was turned on to this only four years ago. instead of using a toolbox or a you know, anything like that, you actually put all of your things in a backpack and it's it's just so much easier. And the DeWalt seems to be the best one. I did a lot of research, I'm a nerd. I really wanted to make sure I made the right purchase, but the DeWalt tool backpack is phenomenal. So
Rory Anderson: Ha I love it. That's a great idea. Okay. DeWalt. Okay. Well, to everyone listening, until next time, keep building great teams. Keep leveling yourself up and go be a light and a blessing to someone else.
Matt: DeWalt. That's the one.
