Learn. Improve. Succeed.

Property Management Mastermind Show

#167: Leasing Your Property Made Easy Ft. Cody Frank

Apr 24, 2023 by Brad Larsen

Are you tired of the hassles that come with leasing your property? Let Sunroom Leasing provide the perfect solution for all your leasing needs in one convenient location. In this episode, Cody Frank joins Brad to explain how Sunroom Leasing streamlines the process, taking you effortlessly from listing to move-in.

See how Sunroom Leasing can help you with a free demo!

Connect with Brad's team at www.rentwerx.com!

Brad Larsen: Hey everybody, on today's episode, I've got Sunroom leasing and we're going to be talking about all the cool stuff they're doing. You got to listen in.

Announcer: Welcome to the Property Management Mastermind show with your host, Brad Larsen. Brad owns one of the fastest growing property management companies in San Antonio, Texas. This podcast is for property managers Buy property managers. You'll hear from industry leading professionals on best practices, new ideas, success stories and lessons learned. This is your opportunity to learn about the latest industry buzz surrounding property management, as well as tips and strategies to improve your business. Are you looking to grow your company?

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Brad Larsen: Welcome, everybody, to another edition of the Property Management Mastermind podcast. I'm your host, Brad Larsen. Now today's guest, I've got Mister Cody on and we're going to be talking about what he's doing with some Sunroom leasing. Here we are at PMMCON 2023. We're almost to the end. It's Friday afternoon as a sort of semi announcement. I just signed an agreement to bring the conference back here. March 6th 7, 8, 2024. Look at that same hotel, same floor, roughly same month. Same city. Yeah. And it's going to be all set up. We're all signed and ready to go. This is fresh off the press. Fresh off the press. I signed, like, an hour ago. No kidding. You know, you go back and forth with the hotel, you negotiate a few things and make a few tweaks. And. And they said we were one of the few that actually sign on the spot. And I said, well, that's that's an it should be attributed to you guys and your staff because they've treated us fantastic here. It's been a great, great conference and everybody says that. But okay, well, I didn't rebook in Vegas the first year. I didn't rebook in Dallas. The second year I didn't rebook in Vegas last year. And here we are in has been fantastic. Nashville and I booked for next year already. I already signed before we're leaving. So that's that's pretty good testament. So all that aside, I wanted to bring you on to talk about what you're all doing, because I'm really know very little about what you guys do. Most people do. And so rather than you and I talk for 20 minutes in the hall, I said, let's just stop. Let's, let's talk about it right here on the podcast and talk through what you all do and who you are. So I'm going to be quiet for a few minutes and let you tell us all about what y'all are doing.

Cody Frank: Love it. Well, thanks for having me, Brad. It has been a truly a good event. I mean, from start to finish, it's been very wild as far as relationships and and all the details that go into this. Your staff specifically at RentWerx fantastic people. I don't know what you guys are drinking in the water down there in San Antonio, but very generous, very kind. And they're working. They're working their 12 hour shifts and they're still doing it here at PMMCON. So bravo to you. But yes, I'm Cody Frank. I'm the head of sales at Sunroom Leasing. So we're actually right up the road from you in San Antonio in Austin, Texas. So we actually are a leasing only brokerage. A lot of people consider us as a partner in leasing an in-house leasing team. I always really like to go into kind of the problem that we solve. Leasing is very cumbersome for property managers, so a lot of moving parts. It's what we call operationally intensive. I think when you think of it from a strategic standpoint, you are at the mercy of your owners to reduce days on market. You're the expert at working with the owners. Sunroom is actually expert at working with the renters. And the reason why we created Sunroom about six years ago and our co-founders Ben Doherty and Zach Murray, they created it to make a frictionless process for renters to find properties and apply very seamlessly. Easily one person to contact find a property online, bought a bing bada boom.

Cody Frank: They're done. And what's interesting about our model now is we've shifted towards property management companies that have typically north of 100 doors, single family residential in states like Texas, Georgia, South and North Carolina, Florida. We're expanding into other regions. We just launched Arizona a couple months ago, so we're getting really popular in these areas. But the problem that we solve is, like I said, leasing is cumbersome. So if you think of the time that goes into it, photography, front yard sign marketing, all those pesky phone calls, the drive time, the tours, you think about lease prep, signing, security, deposit collection, all of those things can last a while. Then you've got the pain from the owners telling you about how long it's been on the market for and what we can do to get at least faster. So we come in and partner with these property management companies simply as an in-house leasing team. Personally, as the head of sales, I really don't like to be painted with the brush that you're outsourcing your leasing. If you're familiar with the construction or really anything subcontracting. We really like to be understood as more of a partner, a mutual partnership with leasing. So everything is aggregated in a portal. So instead of simply putting your properties into maybe your property where or your building software, your property management software, you would actually submit it into a Sunroom portal very similar to Netflix or Uber if you've ever used an Uber before, right? You see a little car moving around, you submit a property very easy and it's a set it and forget it.

Cody Frank: That's what our property management customers tell us. Wow, I just submitted a property to you guys. I gave the rent price, I gave the security deposit collection, I gave the pets. No pets. It's a simple process I can do on my phone. And once I hit submit property, Sunroom goes to work. We go out to the property, we set up the front yard sign, We do the the marketing, we write the description for you. We blast that puppy on like 50 different Internet listing sites. We feel the phone calls. We do the screening for you, which is really big on fraud detection, and we collect voi voi VO So you don't have to. And the nice thing about that is once we get somebody that fits the criteria that you're looking for, Brad, is we hand that over to you and say, Hey, how does this look for you? Approve or deny it inside your portal. Once you approve it, we'll take the ball down field and simply do draft up the lease for you. We'll we'll collect security deposit for you. And it's all really done by our team of experts. This isn't a VA situation. These are people that are in-house in our Austin, Texas office. Ex property managers, licensed agents in the states that we operate in. We have to be because again, we are a leasing only brokerage.

Cody Frank: So if you think about it conceptually, what is the problem that Sunroom is solving? Days on market, right? We're solving the fact that renters who are happy to pay and they stay. We're solving the problem of reducing the noise that goes into property management. When you're dealing with your owners, that's your sole focus. And there's four pillars to property management, if you think about it. So if you think about the four pillars, there's there's, there's, there's finance and accounting pillar number one, there's marketing. There is leasing and there's growth. And you can't really get to growth if you don't have one of those pillars pretty much tackled, right? So we come in and just handle the leasing portion of your management style. You could incorporate maintenance in there with finance and accounting as well. So the point I'm trying to drive at is we're going to simplify leasing. We're going to draft up all of your your leases for you. That reduces a lot of time and friction under your command without giving you the impression that you have to manage us. And it really does a good job. We see a lot of smiles on our customers faces. I'm very impressed with selling this product because of the feedback we get from our customers. There's always a pain point, whether it's I'm sick of doing the tours or I'm really sick of drafting up these these leases. I'm really sick of communicating back and forth with the landlord for voy or voy or voy or and you have an account management team at Sunroom that's really good at dealing with the problems that you would normally have to face.

Cody Frank: And we stand in front of the noise so you can focus on that fourth pillar of growth. You can focus on the owners because you're an expert at dealing with your owners. We're the expert at dealing with the tenants. Let us help you get these properties leased quicker. So that's kind of like in a nutshell, the concept of Sunroom leasing. We're not for everybody. We're for growth minded property managers who really, really want to focus on reducing the noise that they have. Maybe even take a vacation for once, right? Since we work seven days a week, we kind of provide this opportunity so you don't have to. It's a really good plan for for working with experts instead of, you know, the quintessential Vas or the oh, we just do self tours and that's all we do. Having the ability to do self tours and having our technology here at SUNROOM, we're backed with some really smart co-founders here. So you're always working with an expert team, not somebody who oversees or not somebody that doesn't know what the heck they're talking about. It's a good place to work. It's a good, good opportunity for any property manager out there that's looking to grow door count and stop being just stuck in the mud with the minutia of screening and leasing and tours.

Brad Larsen: Great intro. One of the best I've seen because sometimes you get people to say, All right, tell me about yourself. Hi, I'm Brad. You know, great intro, man. I got lots of questions. Are you ready? You're strapped in. You're sitting down. Yeah. Okay, so branding. Let's talk through that. How is it branded? Is it branded under my company or your company or neutral agnostic hidden white label? Tell me.

Cody Frank: Yeah, for for we're one of these companies that we bend for our customers, but we don't break. And if you know what I mean by that, like we, we, we, we onboard our customers in a very, very secure manner. It's got to be mutual partnership. It's got to be beneficial for the property manager and also for Sunroom. So when it comes to branding, essentially if you're speaking about the portal, the portal is branded to rent works, right? The portal is branded to ABC Property Management Company. As far as advertising, since we come in and we represent you as the property manager, we are simply the liaison or standing in front of those phone calls. So they're dealing with Sunroom employees. If these tenants have questions, they're dealing with Sunroom employees throughout the application and screening process. As far as branding, your portal is branded towards you. But if you're talking about representation to provide your owner details about property performance, we are really big on data and reporting. So if your owner is sitting there thinking, you know, Hey Joe, why is my property sitting on the market for so long? Well, I can use a tool like Sunroom as a weapon, as as a as a really, really, really good secret weapon to get your property leased faster.

Cody Frank: Or we could. Just sit on the MLS. What would you like to do or sit on Zillow and pay them 200 bucks a month? So what we're going to do for for you and your owner's relationship is provide you reporting so they can see how long the property has been sitting on the market without Sunroom and with Sunroom. So what I'm driving at is the data and reporting that we provide. You're going to have account managers that work these leads that come in. You're going to have reporting that you can provide your owner to say, Hey, this is how fast we're getting your property leased by using Sunroom. My secret weapon. And for the record, we don't interfere with your client relationship. Your client is your client. One of the biggest questions I get from property managers is if I introduce you to my owner, how do I know that they're not just going to call you and work with you? Well, we don't work with individual landlords. We're crazy, but we're not that crazy. Yeah, no, I get it.

Brad Larsen: Do we always concern, I guess, where I'm going with that is so does the tenant see your branding or ours? The tenant would.

Cody Frank: See Sunrooms branding. Okay, that's fine.

Brad Larsen: Just trying to understand it. I don't think there's really a difference necessarily. If they they want a home, they don't really care who's it branded under.

Cody Frank: Yes, they want communication, frictionless process.

Brad Larsen: They want the home. I don't give a darn if I'm applying X, Y and Z or rent works, whomever the tenant wants, what the tenant wants. Now, the owner, there might be a little confusion there. So how do you how do you kind of assure that, Oh, that's great.

Cody Frank: I love that. I love that question. The owner is, is is under the impression that if you are a a really growth oriented property management company in a professional industry, you're going to use weapons, you're going to use weapons like property management software, you're going to use weapons like marketing, you're going to use weapons like leasing technology. One of the leasing technologies. Here we go. Here's here's one of my surprises for you, Brad. Congratulations on Nashville 2024, by the way.

Brad Larsen: I don't think the podcasters can listen to me drink an old fashioned this early in the day.

Cody Frank: Hey, we had one last night so we can have it.

Brad Larsen: Well done. So that's a good way to grease the podcast. Host You did? Yeah, right. Bring them an old fashioned love it.

Cody Frank: So the the. It's a very common question. One of the, you know, suitable answers I can give is one we don't interfere with your with your client relationship. It's a sacred relationship. You worked hard to do it but we can provide them your portal access. So what they see on their end is a landing page essentially of their property with professional photography done of their property, with real time stats of how many leads, how many tours we provide them, an opportunity to see the performance of it. So they're not calling you on Friday nights and Sunday mornings about why is my property sitting on it? So as far as the branding, you almost want to promote as a property manager that you use a weapon like no different than your property management software or your your, your maintenance team or your accounting software. You use a weapon for leasing. And that's what this industry is missing is weaponry for leasing. And you've expanded.

Brad Larsen: The definition of leasing. Okay. Let me let me go back a little bit, because you talked about this in the beginning. Okay. We take the pictures. Well, that's an expansion of leasing, in my opinion. It's a little bit outside of leasing. Leasing to me is taking applications. Writing a lease agreement. Yeah, getting a moved in. That's kind of the parameters of leasing. But if you're going as far as marketing, that's that's very intriguing and neat because getting people to actually take the pictures is a big part of leasing. And so you're doing some sort of professional or outsourced photography. And how does.

Cody Frank: That work start to finish? Start to finish is a very cliche word to say, right start. What do you mean by start? Where to.

Brad Larsen: Start? What does that mean? What does that mean?

Cody Frank: The leasing process. Right. And that's what makes this, this, this product so, so fun and challenging in a good way to to promote because we do fly under the radar because because of our our opportunity. It's a very unique process. If you are a control freak, if you're listening to this podcast and you are a control freak in property management, that's a good thing. You you're going to have a problem relinquishing your leasing operations to a company. And that's why I was very careful with the word outsource. We don't really like to because you have visibility into it and we're not trying to replace anybody's job. So back to your question about what start to finish is. Yes. So from start go out to the property boots on the ground in the in these major metropolitan areas, front yard sign photography, professionally done inside and out. We actually have this really cool piece of technology called a Son lock. So her name is Sunroom Leasing, right? We have a technology called Son Lock. So what happens when we do an install is we have the deadbolt of the property that's vacant. What we'll do is we will replace that deadbolt with something called a son lock. It's a standard keypad. It has a really cool Wi-Fi enabled pi for any of you tech junkies out there, you probably know what that is. Talks to the lock. So what happens is if you're on your smartphone as a renter and you're browsing on a Sunday morning and all of a sudden you see a property on Zillow or Trulia or Realtor.com that you want a tour, what you can do is click on the tour button. It'll redirect you to Sunroom rentals.com, which is the tenant facing interface that we have.

Cody Frank: You'll fill out some preliminary information to make sure that you know that there's no. Section eight or no aggressive breeds or this is 6600 all in like all said and done with security deposit fees and all that good stuff. You take a selfie, you upload a government ID when you get close to the property, when you go out and drive to that property, one, two, three, Main Street, whatever it may be, the door automatically unlocks from you with a proximity. And this is what really, really sexy feature because a lot of lock companies are self showing tours deal with keys. We don't deal with keys here. It's all done by proximity. The keypad is replaced once we get the property leased. But that tenant experience is seamless, so they have 30 minutes about to tour the property. They go in and out. We have that raspy, that Wi-Fi enabled stick inside that talks to the lock so we know who's going in. We know who's going out safe, secure, no squatters, no scammers, no anything. It's very, very secure process. Once they leave, door automatically unlocks. And guess what? One of the the claim to fame is that we have with leasing properties so quickly is we send them the link, the application link via text. Once they leave the property, they can fill it out right before they hit the door handle on their car when they're hot and bothered. So again, these contributing factors that go into leasing properties quick, there's no magic wand. It's it's a it's a combination of things. It really comes down to a combination of these things. So the frictionless part about leasing is having that self tour capability.

Brad Larsen: Okay. So the metrics, let's get through some of this. So you probably are pretty good on the data side. Are you able to quantify how fast you lease homes compared to the average? Yeah. So let me explain. Let's say the average days on market in San Antonio in the month of May, any year, any given year is 28 days. Just for fun, I'm pulling Rabbit out of a hat number. Are you able to yet? Because you're kind of new, are you able to get to quantify us in our average days on market is 18 and the rest of the world out there is 28? Yeah.

Cody Frank: Okay. Short answer is yes. Account managers are a big benefit to having a lot of I mean, look around here, right? You have a lot of vendors, a lot of good vendors, a lot of vendors have the process where they sign you up and they never talk to you again. It's a SaaS based model. And this economy, we're cutting jobs and doing overseas. We have a manager that not only licensed that are not only licensed in the state that we operate in, but they are solely responsible for getting your property leased. So I say that to say this we got skin in the game. Brad So when you submit a property inside the Sunroom portal, we are responsible for getting at least with a good qualified tenant, by the way, that you approve those metrics and those account, those account managers are meeting with you on a bi weekly basis, providing you those data points typically before you submit your first properties and so on and so forth. You come ready for that conversation and so do we. Depending on what market you're in, we can we can share that data with you. But I think one of the biggest selling points for property managers, especially recently partnering up with Sunroom, we offer a test drive like a pilot test drive, like what are their opportunities out there that you have with the vendor ships in your property management company? Do you have to do like a trial or a pilot? We call it here at SUNROOM. So you've got a 60 day opportunity to submit some properties to see if it's good, and then we'll ask you for a maybe a little bit larger of a commitment. But the data and the reporting that you have with our account managers regarding reduced days on market, it's our job to shine for you. And if we're not working out for you, shake hands and part as friends. We're not for everybody, that's for damn sure. But the opportunities that you have to get properties leased faster is surely going to be a little bit quicker with Sunroom than doing it yourself.

Brad Larsen: I'm with you on that. There's a couple things I wanted to bring up. Yeah, let's peel back. Let's peel it back because it's just lots going on in my head because we have so many things going on in the leasing side. Are you able to communicate to the owners or do you communicate to the property manager who communicates to the owners potential price adjustments? Homes been on the market ten days, No showings, no interest, no applications. Clearly it's vacant. Made ready pets allowed. Yeah, right. Those are our three big like filter bottoms. If those three are happening and you have no showings and no applications, what is it? The answer is, you know, I'm leading you into an answer is price, right? How do you help us communicate that or do you communicate that to the owners that, Hey, dummy, you're overpriced. Yeah. You know, you want two grand for this thing? It should be a 1500. Yeah.

Cody Frank: Yeah, It's a it's a very interesting question. Just just to clarify. So we're not we're not communicating with, with the with the owners, which is good because in this conversation, in the example that Brad just brought up, we provide CMAs, the magic word competitive market analysis, right? So when you submit inside your portal and again for for the listeners out there, think of Netflix portal, think of the Uber portal, think of any portal that you use that's really tech savvy. Right. At the end of the day, we're a tech company. We're just also leasing only brokerage. So you have this visibility when you submit a property and after it goes live, automatic CMA in your market goes out completely, 100% visible inside your portal. You can share that CMA, for example, let's say the property is sitting on the market for 14 days. Your owner calls you up as the property manager. Hey, what's the story with my property? Why is it sitting on there for so long that property manager can now confidently report back to the owner to say, we have this many tours or this many leads, this many showings, this many tours, so on and so forth. And by the way, I use this leasing tool called Sunroom, and they have a CMA, a five, six page report on your market or your neighborhood for the CMA for this property excuse me. And you can share that with them and say, Hey, this is a leasing only brokerage, this is a leasing tool that I use and they are saying that you should reduce your price instead of just the property manager's opinion. Now I like.

Brad Larsen: The neutrality of that because you're really offering third party information, right? It's not me as a property manager, it's.

Cody Frank: Just in my best interest. Right?

Brad Larsen: Feels like the total price. But no, here's some actual data in a CMA. Yep. We've had no showings for a week, ten days, whatever the number is, and that's my hotbed, my hot button, because I'm assuming in the portal you can go in there and actually organize by days on market and the homes that you have listed and the triggers would be in my mind, okay, anything past ten days on market? I got to call the owner. Yeah. Mr. Owner. Love you. We haven't had anything for ten days. I think we need to reduce. And if it gets to 21 or 30, that's when you should be calling significantly more because that's where you lose owners is if a home is on the market vacant, made ready allows pets and they're not getting applications, they're not getting lease agreements and you're not telling them daily that it's overpriced, then they're going to wonder what you're doing wrong and want to move elsewhere. Certainly fire you. Yeah, this is where I'm getting at.

Cody Frank: It's a very traditional concerns, put it that way, right. I think one of the the the benefits of partnering with like again a secret leasing weapon like Sunroom is the the portal accessibility so you can share with your owner that that portal that's branded to to you towards ABC Property management company they will see this link. It's a simple like share button, like think of your iPhone or your Android device. You've got the share button. When you find a really intriguing article online, share it. Same concept, same use of ease. When that owner sees it. Now you got them reducing the frequency of calling you and asking what the heck's going on because you got real time data. Now a branded web page that shows their property, their pride and joy, their their their property that is sitting there for seven, 14 days, however long it takes. Hopefully you get at least sooner. But at the end of at the end of the day, we just want to give the property manager another tool to get the owner off their back.

Brad Larsen: Are you able to automate reports that go out to these owners? We can.

Cody Frank: Yeah. By request.

Brad Larsen: On cadence like a five day you mean you mean.

Cody Frank: Our customers or the owners?

Brad Larsen: The owners on behalf of the property manager? Or do you send it to the property manager and they send it because if you white labeled my name or my company's name, but you send out an automated report like, Hey, your home's been on the market five days, hey, your home, ten days, 15 days, whatever you cadence, pace you want, that'd be a great feature for me because, you know, we have Monday morning updates that we do with our owners that have homes in the market that haven't leased. And so we send out a one page days on market report. Yeah, Page listings. Typekit gives our PMS an opportunity to follow up with the owner. Say, Mr. Owner, your home's been on the market seven days, 14 days, whatever. We've had no applications, ten applications, and that's where they have to potentially needle them for a price adjustment because some owners, you know, they price their homes. We don't yeah, we can guide them, but at the end of the day I know.

Cody Frank: It's their decision, right? Yeah.

Brad Larsen: So I guess a feature that I'm asking if you have, is there a way to automate that in your system to send the owner an automated marketing report at a certain cadence, whatever it could be daily. It could be every week, Whatever you decide. That would be a really cool feature. Do you have something like that? Yeah, that's really neat.

Cody Frank: Being a tech company, there's a lot of flexibility. Like I said before, we bend, we don't break for our customers, right? And hopefully any professional out there that's hearing that understands what we mean because owners can be very demanding in property management. And as a property manager owner, you bend and you don't break, you conform, but you don't, you know, completely.

Brad Larsen: The reason to bring it up is the number one complaint is communication during the leasing. Yeah, exactly. My property manager never called me. Just put the home on the market and 30 days later it hasn't rented ever. Even once. It's a common problem. Yeah, it is a common problem because we were doing 20 different things. Yeah, right. And so we have to really strong awareness of that home being on the market and vacant. Right. Vacancies cause problems. You got break ins, you got squatters, you got all kinds of weirdness going on. Hell, you have dead bugs in the entry, you know what I mean? There's all kinds of stuff going on on the leasing side.

Cody Frank: Yeah, you mentioned that. Just to speak out of turn there, Brad as Yes, the reporting great. We got account managers that meet with you on a regular basis and provide you. That information. And by the way, just a little side comment. You're not dedicating your entire portfolio to Sunroom unless you want to. Some partners dedicate 100% of their portfolio. Here, Take it. I need to focus on growth. I need to focus on firing some of my owners, not even just hiring new owners. You can dedicate 50% of your portfolio. So I say say that to basically lean into to not only just the reporting, but kind of what you just mentioned was something along the lines of now I'm spacing on what you mentioned.

Brad Larsen: Automated reporting basically is what we want to I like to see to say something to send out to the owners, you know, daily, weekly, whatever cadence you set, because that's that's always been a challenge is to make sure that we communicate effectively. Now, I know it's email, I know it's more white noise. Maybe we augment with a text message. Here's your latest report. Click here. Go to this. Yeah, you know, the text message clicks to a link and takes them to a portal that they can review now.

Cody Frank: Yeah, now I recall. So you're on to something with that. So like I was saying that the, the sharing link inside the portal, if you're a customer of ours by the way, for any customers listening, you have that ability to share it with your your customers when you when you or excuse me, your owners when you share that it also provides tour feedback. And this is what I meant. I left out when I was talking about the sun lock. So when you go tour as a tenant after you leave the property or sent the application, but you're also sent a survey to provide some candid feedback of the property, which also goes into contributing factor to your owner's knowledge of why is this property sitting on the market longer than desired? Meaning, does it smell like cats? Is there holes in the drywall or even grown grass? Cleanliness?

Brad Larsen: Yeah, ten to a one on carpet cleanliness.

Cody Frank: So it's Mr. Mister Owner. It's not the price. Yeah. And that's the easy solution to to lower the price. Right. It's because it has cats or blood in the carpet and that happens a lot. Yeah.

Brad Larsen: I mean something. Yeah.

Cody Frank: So we provide.

Brad Larsen: That raccoon in the backyard.

Cody Frank: Yeah. We provide that candid feedback provided by our tenants or excuse me, provided by our renters who hopefully become tenants. So if the property is sitting on the market, you have another a bullet in the chamber before you lower the price to say, hey, you need some work on this property. Okay. So it's a really, really like the page that you can share with your owner does a good job at explaining so you don't have to.

Brad Larsen: That helps a lot. I do like that feature quite a bit.

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Brad Larsen: So let's switch on the applicant side. Are we able to make the settings or set the settings to however we want to choose the best applicant and or choose the first applicant? There's lots of debate in the world about which applicant to choose. Do you take the best one or do you take the first one who meets the screening criteria? Right. I'm more in the first part of take the best applicant within reason, not like within 30 days, but like over a weekend. If you get 3 or 4 applications in, you review all of them. And if one is really solid, you go with that one. Same thing. If my PMS always has the have the ability. Okay, here comes an 800 credit score applicant makes you know ten times what they need to qualify for the rent. Take the home off the market. Right. Don't take any more applications because it's going to be very difficult to beat that particular applicant. But here comes one. They've got a 550 and, you know, six kids and four pets. And, you know, that might be one we might be marginal on, even though they meet the screening criteria that we might post, it's not necessarily the best applicant for the home. Sure. Long winded explanation to a question, because I guess you just have to tell me, are we able to make those settings on OWN?

Cody Frank: So let me answer your question with the question What would you prefer?

Brad Larsen: I make those settings on my own. Like I have the ability to say we take the best applicant and review them and pick applicant A, B, C, or D, or we could set it to where the first applicant that meets the screening criteria and has X, Y, and Z credit score, You know, you set that screening criteria. So follow up you would just to approve them automatically and then move to lease signing.

Cody Frank: Yes. So follow up question to that is typically the property managers out there listening, you probably have owners that have different criteria set depending on how large your portfolio is. Sometimes you standardize it across the board. Sometimes you have owners that.

Brad Larsen: Know the bugaboos of the owners. They might say, I don't want pets or I don't want pets bigger than £20. You know, there's always a little bugaboo from each owner, and sometimes you get to know the little nuances. They're not violating the screening criteria. They're not being racist or sexist or something like that. They're just like, I really don't want any cats in this property. Yeah, okay. We say no cats. Yeah, but it's not really against the screening criteria. Sure, Right. It's against the requirements of that property. Yeah. And sometimes tenants just blow past that. Yeah. You understand they don't read it and they apply anyway. Yeah.

Cody Frank: I think one of the very intuitive things about the portal and the product that that has been developed by Sunroom in the last six years is the ability to, when you become a customer of ours or try us out on a pilot, you do an onboarding call. And on that onboarding call we ask you kind of the same question you just asked me. What are your preferences, right? Is it per property? Is it per owner? Is it universal? And again, using the word intuitive inside the portal, you are basically guided this white glove onboarding approach from our great fantastic account managers about what you prefer. Is it 550 credit score or is it three times rent? Is it no bankruptcies, evictions, felonies? You literally can get down so detailed about aggressive breeds in which aggressive breeds you want to omit. You can make a universal settings, you can go property to property, but at the end of the day, you are in control. I just don't like to give the impression that you have to be so in control where you feel like you're managing somebody else because that's not the concept. The concept is an in-house leasing team, keyword team, keyword in-house, not subcontractor.

Brad Larsen: Great lead in. Let's talk through the pet scenario. Yeah. Pet screening or some sort of pet filter. A lot of folks out there use pet screening.com, right? With or without pets. I think that's a pretty good scenario because they actually have to sign a bunch of disclosures and waivers that says we're not bringing in pets. Here's my signature. You know, I pinky swear that I don't have any pets type stuff. Talk me through your your animal process. Pet process. Sure.

Cody Frank: Yeah. Diving into the details on that. Obviously, pet screening is I mean, you live in Texas, right? We're based in Austin. There's more dogs than humans in Austin. Right. So pet screening is a big bugaboo for a lot of property managers, especially if they live in different areas that have maybe aggressive breeds or they live in areas that have smaller concept apartments like multifamily, garden style, whatever it may be. So when we do the onboarding call, you can select these things, of course, but we do integrate with your software. So not to, not to, you know, make it brought to you by pet screening.com, but we do have the ability to sync with your pet screening.com for instance your account and then that obviously essentially talks to your property management software.

Brad Larsen: That's huge and that's huge. That's what that's what everybody needs to hear. There really isn't a better product out there than what they're doing. No, And I do think I like him. I like what they do. And they're the most popular for sure. And we use the paw score method, you know, that comes with a five paw paw paw. And then we take that algorithm method and apply that to our pet fees. So I'm sure you would do the same inside the settings of what we in the onboarding call, we would say we would show you our screening criteria and maybe you just take it word for word and just implement it into the system. But. Essentially, you know, the par score equals a monthly pet fee. And that's that's where we get it from. So again, it's a third party determination of that of that breed of pet animal, whatever it's going to be.

Cody Frank: We want to use the tool like we don't want to come in and be a bull in a china shop, so to speak. We want to come in and be a tool that systematizes and simplifies all of your vendors. So one of the again, the problem that we we solve is you simplify a hell of a lot of vendors. How many vendors are in the leasing process? 4 or 5 sometimes. Yeah. You got a lot of them with Sunroom. You only got one, right? So we're not trying to kick anybody out of bed here, but we just want to say like, there's a lot of cooks in the kitchen with leasing. Oh, you're right. Here we got one, one portal, one submission.

Brad Larsen: Professional photographers, you have your screening product, you have your showing product. Yep. You have your pet screening type product. There's at least four. You probably have your DocuSign product that you need or your dotloop, whatever you may want to use or PDF, you know, signature. Don't forget.

Cody Frank: Va's.

Brad Larsen: There's your remote team members. Forget marketing.

Cody Frank: Zillow.

Brad Larsen: Does your seven. I mean, we're racking it up here pretty quick. Zillow is an additional fee so maybe that's covered in your in your algorithm. Yeah, great question. Let's ask that really quick. Tell me about your Zillow. Yeah. Operational process there. Yeah. One of the most.

Cody Frank: Popular questions, Brad, that we get on on the demonstrations and by by the way, anybody listening, if you're a visual learner about kicking the tires on vendors, Sunrun has a really good way to go about showcasing the portal and the settings and the detailed questions that Brad's asking today. So take us up on on inquiring about a demo. But as far as the marketing most popular question we get, where do you market? We market about 40 plus keyword plus Internet listing sites, right? Marketing sites. Think of your your big dogs, Realtor.com, Zillow, Trulia, Apartments.com, Apartment Guide, Zumper, all, all, all the big ones. And we do that manually. So when we take the photos, we'll write up the description for you. If you if you want us to, we'll make them nice, neat and order. Right? It's got to have some sex appeal, right? These pictures got to look good because at the end of the day, when people are scrolling on their cell phone, which they make decisions nowadays more on their cell phone, it's got to have some appealing pictures. And everybody uses something different, whether it's Hotpads or whether it's Padmapper. So there's always a really niche market that somebody is loyal to. And if we're syndicating out to those Internet listing sites, you're going to have visibility. So instead of you manually doing it or you doing it in relying on your property management software to do it, which in my opinion is is a little bit of some smoke and mirrors. Oh, we syndicate everywhere. Sometimes you're going to be at the bottom of the barrel. It's like being at the bottom of Google. We're going to put you at the top. We're going to put you in premier listings. We're going to have you pretty much omit your Zillow cost because we're covering all of those fees for you. We're doing all the marketing. At the end of the day, for you listeners out there, we got skin in the game at Sunroom. Our sole job is to find a tenant that is not only qualified, that fits the criteria that you're looking for, but pays and stays. That's it.

Brad Larsen: Going through the end of that life cycle. Let's talk through lease agreement signing and then money collection and move in.

Cody Frank: All the boring stuff.

Brad Larsen: Brad Boring. Boring. Because the lease collection sign up. I mean, we use a custom lease agreement. Attorney Yeah, yeah, we custom sorry. Yeah, yeah. Custom. So it's attorney approved, Trek approved the custom lease. And so it's a word document that we turn into a PDF that can go into DocuSign or whatever. Right? It's very generically common, but it's a hugely effective. So we use our own lease. That's easy. You probably have an upload system or integration into some sort of signing platform. Hey Mr. Applicant Turn Tenant, you're approved. Sign here, sign here, deliver us money. How does the funds collection work? Because that's really more important than the actual document signing.

Cody Frank: It's true. Yeah. So a couple, two, maybe three part question there. So we can either use your state's lease agreement, right? For example, in Texas, it's called tar. For the record, it's not called tar. A lot of people say tar. There's always somebody that gets somebody mad about that. Yeah, right. I know if you have a custom lease agreement, which most people do have a custom lease agreement, especially outside of the state of Texas, integrate with that. Easy. The addendums like you're along for the ride. Like it's not like we're doing this rogue or behind the scenes. We're just doing it for you. No different than if you were to hire somebody to do it. So the second half of your question about the security deposit collection, you can sync up with your own bank account, your your your your property management bank account inside the portal. When the time comes, there's a link that says you can invite your client to connect their bank account. So your owner, which is very uncommon in property management, unless you're maybe an agent or something like that, or it's a one off deal that we would do. Typically in most of our customers are going to link up their own property management bank account with it. So if it's, you know, ABC company really easy and they would pay. A Sunroom, the security deposit, and then we would just write back to you. So we're kind of like in escrow like that. We're just the liaison between it. But remember, at the end of the day, we're collecting security deposit, we're writing up that lease. We want to make sure that they're not going to jump ship, which, you know, rarely happens when you have good customer service as a tenant, as a renter, I should say, to become a tenant. And then that syncs up with you. So it's really from start to finish again, security deposit collection. Once that renter moves in, we pass things right over to you. So it's this really easy.

Brad Larsen: Handoff necessarily have to have the money in hand. We just need assurances that they've given money to somebody.

Cody Frank: As do we. Yeah. Yeah.

Brad Larsen: Right. And then they can move in. And how do you move them in? Do you just do a lockbox, remote move in type thing.

Cody Frank: Yeah. So the uninstall, there's a lot of details. We don't need to peel that back. Save it for the demo. Sure. But the uninstall, what happens is we we get notified. We have a great field ops director. They'll, he'll, he'll basically dispatches wherever the property is, dispatches workers go out there, they uninstall the sun lock. They make sure that they have this policy called leave no trace. So they're no, no, no modifications will be done to the door whatsoever. So they uninstall it, unplug that pie, that Wi-Fi enabled stick, install the original deadbolt on there. But the key right back where it was put in the first place and that's it kind of brush our hands and walk away and hand things back over to you. Tenants are happy. Happy tenants mean happy owners. Happy owners mean happy customers.

Brad Larsen: The p m a signed lease agreement collected funds and a moved in tenant all in one all no brainer.

Cody Frank: Right.

Brad Larsen: Okay. That's I love it. All right. Here's the tough question. What's it cost?

Cody Frank: Right. It's such a such a great question towards the end of this podcast. Right. So if you think about I totally sound like a politician when I answer this question. If you think about right, if you think about the process of vendors in the space, right, and the property management, whether in multifamily or single family, there's a lot of subscription based fees, there's a lot of onboarding fees and account manager fees and monthly fees and yearly fees and 12 month contracts. We try to keep it simple at Sun, or maybe it's our Austin, Texas mentality. I don't know what it is, but we keep it simple. So we're performance based is what I'm driving at. And if you've heard me before say Skin in the game, we really mean that we don't get paid until we find you a tenant. So we work for free until we get paid, right? Just the A the oldest real estate line around. Depending on your market, typically a safe benchmark is about 65 to 75% of first month's rent. Okay. So before anybody out there hears that and signs off on this podcast, keep in mind all the fees that go into leasing operations that Brad and I talked about before, like Zillow, overhead personnel days on market drive time photography costs. There's a lot of things. And in the beginning, depending on what you charge your landlords for first month's rent, typically in, I don't know, Texas, you're going to have property managers that charge one month rent. Like for example. What do you charge?

Brad Larsen: It's a flat fee. Yeah, a flat fee because like in Houston, it's market normal 100%.

Cody Frank: Right. One month's rent.

Brad Larsen: Rent. That's in Houston.

Cody Frank: Yeah. So what we're going to do is 65% of first month's rent. That's really the only fee you're ever going to have with with Sunroom. And you're only going to get an invoice. You know, to make a long story short, once we get a tenant in there. So no subscription based fees, no monthly fees, no anything like that. We do a pilot program in the beginning just to do proof of concept to make sure it's a mutual partnership and it's agreeable on both sides of the fence because again, you're almost hiring an employee or employees here. After that trial period is done, we'll ask you for a larger commitment, maybe a large percent of your portfolio, like 70, 75% of your portfolio, whatever you feel comfortable with. And it would be at about 65 to 75% of first month's rent, depending on what market you're in.

Brad Larsen: So that's that's one thing to clarify. Is there a co broker commission coming out of that fee that goes to a Remax co banker, you name it, leasing agent that's bringing the tenant to you.

Cody Frank: If the tenant is represented by an agent, of course we will pay them out. Okay? Right. Of course we'll pay them out part of the.

Brad Larsen: Fee or on top of the fee.

Cody Frank: It's part of the fee. Don't quote me on that. But yeah, it is impressive. We try to stay away from the MLS for a lot of different reasons.

Brad Larsen: Don't like it either. I don't want to pay agents, to be frank. I don't want to make enemies with this. But you know, we pay a $300 broker commission right in Austin. When we moved into Austin and started to own a management company there, everything in Austin was 35%. Yeah, I said, No, we're not doing 35%. We're just going to pay 300 bucks. Yeah. And the agents, we got a few hate mail. The end of the day, I don't care about the agents. I want the tenant. Yeah, the agents can go make money somewhere else. Yeah, they.

Cody Frank: Buy and sell properties. They don't make it off.

Brad Larsen: We're doing shadow showings, You understand? The shadow showings are just like in the apartment. Industry. Yep. They don't show the property, they just tell the applicant to put their name down and then they charge you a commission or try to get a commission from you. Just preach.

Cody Frank: Preach, preach.

Brad Larsen: Yeah, totally. Apartment locating industry is notorious for the shadow showing system, and I don't play that game in the single family home. If they didn't physically take that applicant to the property and show them in person, I don't feel they deserve a commission precisely because they can find that home online anytime, day or night, and they can access the property through our you know what? You're doing the same thing as we're doing as we're doing those unaccompanied vacant home showings. They don't need an agent to show them. Yeah, call us up. We'll arrange a showing for you. You know, give us your license, give us your selfie, Go see the property with this technology. I mean, or here's a gate code and here's a lockbox code. I agree with you on that. So to include it, I get it. You know, just once in a while, you know, a couple, 300 bucks, I'm sure that the property manager can set that commission. Sure. You know, knowing that that's actually makes a lot of sense because that's where the that's where it can get ugly. Yeah. If you can code, broker, commission or you don't, it can. Some markets are 50% right.

Cody Frank: Some are We're in the right and I mean, again, not to not to piss off any agents out there listening but at the end of the day, the result for our partnership with a property manager property management company is to get a tenant in there that is qualified, that pays and saves. Right. I said that a few times. If we have to pay out an agent that is shadow or even completely 100% representing that that tenant, then we'll pay him out. We're not going to we're not going to throw that fear away. We did our job. Hopefully you come back for more. Hopefully, you know, we do it again and again and again. But if you remember me saying about how many marketing sites we we we advertise that thing out, too, that really gets interesting because we don't have to post it on the MLS, which the common or the common mentality that an owner has is it's got to be on the MLS. I got to search it and then this day and age, when there's so many Internet listing sites, right, there's just a dime a dozen. Most people are scrolling on their phones looking for a place that don't, you know, looking for a place to rent that aren't represented with an agent.

Brad Larsen: Are you able to dump it in the MLS?

Cody Frank: We can. We prefer not to. I mean, for the reasons that we just kind of brought up. Like a lot.

Brad Larsen: Of it is the co broker. So some MLS you cannot advertise a zero. Exactly. Co broker commission San Antonio you can. Austin i believe you can h.r.

Cody Frank: You can't.

Brad Larsen: That's my point. I was getting there. H.r. Is not. So you have to advertise a dollar or. Yeah. Then you're blackballed because let's be let's be frank here. Yeah.

Cody Frank: We don't, we don't want to. The proof is in the pudding. So if we get the tenant and we get this property leased, you know, your properties lease quicker, your owner's not going to care if it's on the MLS or not. They don't.

Brad Larsen: Yeah, right. They care. They Zillow. Yeah, exactly. We get hate mail and calls from I can't find my property on Zillow. Well we don't control that syndication. We do this and they take a day or two to reflect. I mean, you know, we have that conversation.

Cody Frank: Yeah, yeah. It'll be covered on Zillow. We, we, we control the hell out of the Zillow syndication.

Brad Larsen: Stuff on that. Okay. Sorry to interrupt you. No, go. Go ahead. So so the Zillow conversation. All right. I did some numbers for a presentation in San Antonio and Houston, and I looked at the multiple listing service in San Antonio. Sabre Sabre. Right.

Cody Frank: Cooley's MLS name around, by the way.

Brad Larsen: Yeah. We put all of our rentals in there, right? We advertise for a $300 co broker commission. Okay, great. Zillow, Where are the conversations going next is I did the analysis of roughly 10 or 12 property management companies that are very common in our industry, their their members and I knew them and they everybody knows who they are and did their days on market analysis for the last 12 months. Yeah. And several of them were at this presentation, like Hendrix, for example, in my market and our days on market was I think 26 or 27. Their days on market was roughly 25. 26. Wow. Splitting hair. Yeah. Here's the big punchline. They didn't use Zillow and we did. And so the conversation spurred into like, is Zillow worth it, comma, question mark, or do we just are we better off to like not use it because we pay for the Zillow upgrade versus 11, 1200 a month or whatever it is just to make that one owner happy. But at the end of the day, I don't know if it's really worth it when they're leasing homes just as fast without using Zillow. Kidding.

Cody Frank: It's a hell of a fireside chat, right? I mean, this is a conversation that you could you could do three podcasts about. Right?

Brad Larsen: Because you make you wonder if it's even worth doing. Oh, my.

Cody Frank: God. Yeah. And you think about the history of the MLS, right? Mls is very similar to the Craigslist, right? It's just like the New Times Roman font, and it really hasn't kept up with the changes. And then Zillow came along to be this like knife in the back of of the MLS. But I you can probably get away with omitting from the MLS with your owners. I don't know if you can get away with with the Zillow at this point in time in my in my professional opinion data is data and facts are facts for sure but it's really hard to. To have that conversation with their owner, especially if you're rolling the dice. If the property sits on the market for a little too long and then they're like, Why the hell isn't it on Zillow? Right? They get they get they can get perturbed about stuff like that. But yeah, it's some of their.

Brad Larsen: Clients might be a little bit more loyal. You got long, long clients. Sure.

Cody Frank: You know, true investor clients just get at least I don't.

Brad Larsen: Carry out working with them forever and ever. Some of us are more reluctant landlord clients and that 1 or 2 homes they might have because they had to with the military or whatever they're looking, you know, because every day that goes by is money out of their pocket. And then when they can barely make the mortgage. Right. You know, they want that. They want a tenant in there pretty bad. Yeah. So, yeah.

Cody Frank: Consideration we lean in on on Zillow. It's not where the majority or it is the majority of where our traffic comes from, but it's not where all of it comes from. I would say, again, not to sound so cliche, but the the owner wants a head in the bed, as I say. Right. A tenant who pays and stays and however you get to that is however you achieve that is is, is kind of up to the property management company, whether you're using Sunroom or some other sort of weaponry and leasing. But I think it's it's fair to say that at the end of the day, the owners in control, we're just kind of facilitating the decision to get a to get a tenant in there, if that if that makes sense. Zillow is kind of a necessary evil, as they say.

Brad Larsen: I like what you all are doing because one of the reasons I was considering maybe we use this at Rent Works is we have a pretty good leasing system, right? But it gets darn busy in the summer. You know, there's a little bit of a peak, right, in the summer months. And maybe we get behind maybe we, you know, slice off a couple for you. It's very, very much a possibility on that regard just to augment some of that, because leasing in other markets, for example, like in a cold weather market, it's dead in the winter for sure. You can have it's just a huge bell curve in the summer. Right? It's it's up and down. So to be able to augment that with with some. Yeah. Insourcing of good partners to be able to do like that that's pretty intriguing.

Cody Frank: I'm stealing that Brad Insourcing.

Brad Larsen: Insourcing. Right. You like that, huh? There's been some talk, too, about doing this typ

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About The Host

The Host of this Podcast is Brad Larsen from San Antonio, Texas. Brad is the founder and owner of RentWerx, one of the fastest growing residential Property Management companies in Texas that currently manages over 700 single family homes.