In this episode, I talk with Andrew Pope. Andrew is a highly experienced Senior Asset Manager with expertise in all the major components of commercial real estate investment.
Since 2014 he has been a part of over $1B in real estate transactions.
Andrew will discuss what is an asset management and why it is a critical component to your investment strategy.
He will also talk about the common mistakes people make with asset management and how AM are adapting to a changing real estate market.
Find out more in this video. Don’t forget to subscribe!
Trsancript:
Andrew Pope 00:00
They soon realize that they need an asset manager or somebody expertise who’s done it before, because they can’t do it all themselves because there’s so many moving parts that they are spread too thin, absolutely will become the catalyst for growth.
Chris Bounds 00:13
In this episode, I talk with Andrew Pope. Andrew is a highly experienced senior asset manager with expertise in all major components of commercial real estate investment. Since 2014, he has been a part of over $1 billion in real estate transactions, we discuss what is asset management, and why it’s such a vital component to your investment strategy. What are the common mistakes that asset managers make in multifamily? And how are asset managers adapting to this current market? Hope you enjoy? Now?
Here’s the show. I was gonna enter. Are you good? How about you? Good, good. I’m glad Glad you’re able to come on today. Want to talk about something that’s probably one of the most, maybe it’s hard to hard to say the most important but definitely a vital component to investing in real estate. And that’s asset management. And really, whether you’re in a maybe we’ll get into this in a minute, whether you’re in multifamily or commercial or single family. Asset management’s always involved. But for those who don’t know what Asset Management is, can you explain what that is, and maybe how it differs from property management.
Andrew Pope 01:26
Asset Management is looking out for the owners and the investors are risk and cashflow and making sure they get the returns as represented to them. So, you know, in a nutshell, I used to say revenue minus expenses equals noi, and then that gets split and affects the valuation going forward. So what we’re trying to do is enhance and improve and protect the cashflow and the sales price in the future. That was shown to the investors and then that way that the ownership is able to carry on do business again with those investors and hopefully, look good in the process of doing what they say and protecting the pro forma that was originally done. Okay,
Chris Bounds 02:12
how does that differ from property management?
Andrew Pope 02:15
Property measures are higher at four fee, they typically do the leasing the collection, and pay the expenses and sometimes had the accounting. So they’re what they’re doing is a vital service to the property. They provide staffing, that being leasing representation on the property and maintenance. And so they provide the team and the customer service. And they’re kind of the sticky part the the human part that keeps the tenants there. That makes sense. Yeah. And so
Chris Bounds 02:45
they’re the boots on the ground, whereas the asset managers making sure that they’re doing their job, is that some sound fair,
Andrew Pope 02:55
then executing the plan? Yeah, the exit, the asset manager is there to review metrics, make sure that financial performance matches what they are saying, and that they are performing their work, and providing the focus needed for that particular asset. And working behind the scenes on renovations. According now with new tenants. Property Management typically writes the leases for the tenants, and they pay the bills for expenses to take care of the property while they’re there. And they are the representation. So sometimes they stray outside of that, and that’s the manager’s job is to bring him back into focus. So they are able to perform on their core competencies, if that makes sense.
Chris Bounds 03:42
Yeah. And so then anyone can be an asset manager, or I guess, what, right when I saw that phrase, and I was kind of really trying to distinguish what it was, and you really described it very well. But it kind of it kind of hit me, it’s like if you had a single family property, because usually this term is in commercial real estate or multifamily, you don’t really see this term unless you’re talking about big portfolios of single family. But really, if you own a single rental property, and that property is being managed by a third party management company, you’re an asset manager is basically what you are, because you’re making sure the property managers aren’t me, you should be at least you’re making sure the property manager is doing what they’re supposed to be doing,
Andrew Pope 04:26
right. Yeah. So a lot of owners start out doing their own asset management because you operated as an owner the same concerns. And then once they reached a certain critical mass of portfolio where they had are spread too thin, they need somebody to help kind of help get them to the next level or peel off their responsibilities. They can go to our property management. We’re an asset management person who oversees a property management company, and it’s a duplication of themselves and way So at a certain point with Porter follows as they grow as managers become. It’s a hard handoff for some owners. But it is a point where they is asset management fee and and that fee goes to pay an asset manager to take over, rather than the owner doing everything themselves being hands on.
Chris Bounds 05:16
So yeah, that’s ultimately why like, it’s going back to single family, just most people involved in real estate or they’re involved in the single family side. It’s why real estate and rental properties or single family rental properties, they’re not truly passive, I mean that they definitely have passive natures to them. But at the end of the day, you’re always actively even if you’re not properly managing the property, you’re actively managing or managing the asset. So you’re an asset manager, which means like, at the end of the day, the buck still falls on you to solve some of the critical problems that can come up unless you bring in an asset manager and you build a portfolio and you bring someone in, and then it can be a bit more passive. Does that sound right?
Andrew Pope 06:05
Correct. Yep, asset managers have the same Have you say task list, as most owners are concerned with meeting the pro forma as it was underwritten, which means that there’s rent growth, typically making sure that the occupancy is up and happening and who’s accountable for that, that would be the property management company, and making sure the taxes are paid and the bills are paid, and knowing the details under the hood so that they can act on behalf of the ownership. No. And then they also report back to the owner and their investors and provide let’s say the market and what’s going on. But typically the brought in when the portfolios are big enough that the owners can justify paying an asset manager for their services. Institutional people, it’s a must. There’s there’s a football team asset managers, typically the portfolio is broken down.
Gearing ratios, this is for debt equity and ownership. I’ve managed up to 3040 properties. But then again, it matters what the tasks on a daily, daily and monthly basis are. But large institutional owners want asset managers to touch their asset at least two times a month, and make sure things are going to per plan. And the ones that are in development or lease up or new, they require being touched every day. So it varies on the type of asset there is. So it is a mixed bag. And there’s various definitions of the term what it is, you just kind of have to look and see what what is needed by the dealership.
Chris Bounds 07:39
And from an asset manager standpoint, you mentioned 30 properties or so is that 30 Like multifamily communities or is it 30? Like single families or?
Andrew Pope 07:51
Yeah, so I worked for AIG in America and then a financial they did equity and debt for multifamily, some affordable some market rate. And so they had total company wide, let’s say 150 in process at any one time, and each asset manager would take on about 30 If there was a construction component because it took more hands on work. Once it becomes stabilized and cash flowing with with a stabilized loan. Those asset managers handled up to 70 and 80. And it was all automated and checks and balances, making sure that you know things from the ownership side were taken care of. And that’s kind of an extreme case. I mean, 80 is a big load. So younger that right now there’s a lot upstarts and ownerships and portfolio sizes of less than 10.
Those owners are, let’s say 10 Single Family rentals, that’s about the time we bring it asset manager because they’re looking for growth and asset manager as a growth agent, where we can automate and get things all pulled together and the quality of data performance and they want to acquire more so asset management tends to dovetail overlap with acquisitions, and dovetails and overlaps with accounting, and all the consultants and the tax base and and getting the grant the growth plans and the NOI growth from year to year to happen with certainty. So there’s strategies to get that to happen. And we look at all that so it is a big topic and but there are various scopes and varieties of asset managers you just have to ask the question how detailed and how experienced they are.
Chris Bounds 09:36
It seems like it’s a it’s like a dream job for someone who loves numbers loves projections love seeing those play out Excel graphs, charts, especially when it’s tied to something that’s real, that you could actually touch to and something interesting like like real estate
Andrew Pope 09:59
so So you have, yep. So you have to look at you have to see the forest for the trees, you have to look at the details and back up and see is this going the right direction? And provide an overall strategy and course correction, if need be for the property managers who may be able to see it, but in most cases, they are very much how can you say very close to what they’re doing and need some guidance and some strategy?
Chris Bounds 10:24
So, how did you find yourself in this field? And how did you get started in real estate and find yourself doing asset management.
Andrew Pope 10:34
So I started out, I’ve been doing this a variety of asset management, my whole career has been since before 1989, but I started with a large Life Insurance Company. And we manage the risk mostly. But what they did, they had a billion dollars of commercial mortgages a year operation nationwide. And then they had about three or 4 billion own across the nation. And we kind of were in a matrix environment, and we kind of plugged herself into the teams per region. So I remember going to the West Coast one month and going to the East Coast next month, you know, do the on the ground work, and then plugging into the teams under one roof that covered the nation.
So it was really a How can you say a lot. So what it was was just plugging into a team that needed your expertise and guidance, because they were all about lending. And they may not have known what the asset or the collateral was, or the market conditions was the we were to set them up for success and make sure that they could pull it off because we were, they had less experience than us. But we had more specialized knowledge and they justified we had a whole group of them of professionals, mostly engineers, and architects and so forth.
And my specialty was construction management at the time cost engineering putting together cost estimates. And but we had environmental people, we had HVAC people, we had construction management, contractual people. And so we we set up straight underwriters, straight finance people with the nuances of owning, say, an office building or a shopping center in Boston, and getting them set up for success. And there’s a lot of pitfalls and a lot of traps out there that we we you know, somebody’s not knowing the terrain. We got them so that people would have had eyes and ears locally who had worked for us and watch that, watch it while we were back in the home office, so to speak. So we had a big chalkboard, and they were across the nation. Most outfits work regionally, let’s say out the southeast, or inner city or metro area. So that’s more specialized.
But I’ve worked across the nation, and each market has its own story, its own particular set of risks. And we just were had the experience and knew what to look out for. But there’s a lot of things that how can you say, Construction wise, property manager wise, anybody who work for a fee. There’s human behavior behind that. And it’s easy to see how they’re going to behave based on their agreement. So we manage those folks as consultants as service providers to the deal. And we’ve put together FTC contractual agreements and made sure that we met with them, and we had a connection with them, and that they were working on our behalf working for us instead of against this, if that makes sense. Anybody in real estate tends to know that you need to be careful if you’re an absentee owner. So we facilitated that absentee across country type. Distance gap. Yeah, it
Chris Bounds 13:49
definitely requires a tight team. You can find yourself in a tight spot if you don’t have that nailed, nailed down and from a single salmon family standpoint, I never personally I know people who do it successfully I just the economics and it really found found worthwhile multibeam it’s easy because it’s a business. How are assets managers? How are they typically, like in across there’s a lot of different I mean, you can have asset manager pretty much any type of asset class but what sticking with like multifamily like residential, multifamily single family, how are they typically compensated?
Andrew Pope 14:27
So right now the industry standard is that an owner or portfolio er would hire an asset manager, their going rate would go anywhere between 90k a year to 200k a year with benefits depending on experience. So there has to be a certain amount of critical mass in order to make that work. And then the asset managers have to extract the value make sure that the assets are performing and that the performers are cash flowing and the investors are getting their cash. The become the eyes and ears and we take the load off The owners.
And we’re kind of the glue that that brings together the property management teams, the construction teams and all the consultants involved and get overlap and provide backup for underwriting for accounting, and Problem Management. So it’s multi faceted, it comes down to foreseeing and getting out in front of the risk. Because once you get into this business, you realize there are a few risk components that you need to be wary of. So a lot of it is you can learn on the job, through experience, a lot of it is just knowing the numbers and having a, you know, a good solid financial modelling construction background.
So I’ve touched on a lot of different facets there. So I guess the more value you can bring to the owner, the more valuable you are. So that’s what I’m doing is becoming a freelance asset manager and doing on a fractional basis talking to owners, where they don’t have to pay the full yearly cost or hire someone, but they can hire me on a fractional basis, like two month basis project basis by the hour, we’d like you to work on us for six months train our teams are bad better at it. And then we can take it from there
Chris Bounds 16:17
based on percentage of GCI, or
Andrew Pope 16:22
it’s really, it really depends, because everybody’s asset is in different states of ownership with say they’re in development and lease up, they just close on it, and they have to implement a value added plan. Well, things get, things get pretty hands on pretty busy. So if it is something that is, you know, they have 10 properties that they bought, they’re all 9% occupied, or cash flowing, we just want to make sure that it continues on that way, you know, means budget, it’s a different set of things. So there’s a there’s a lifecycle component to understanding where you fit and what you’re going to perform. So obviously, one is different than the other and more time involved. So it comes down to an hourly basis, basically, but
Chris Bounds 17:07
I just don’t I see how its its charged to investors in syndications and funds. And now, of course, the fund manager or the operator, you know, they then typically have staff that they’re paying to do this. So it’s now there could be a spread. I know. I don’t know, it depends on the asset and the game plan. But Well, speaking of syndications, because it’s definitely grown, exploded over the last, you know, three or four years. What, what common mistakes are you seeing syndicators make in the asset management area?
Andrew Pope 17:47
So one of the most common things is making sure the investor comes out hole and gets the return. And a big part of that on value add is making sure they have the right renovation plan. And from month to month and year to year they’re getting new units delivered at a rent premium paid. And then that is the rent growth. Mostly it is how can you say it’s not organic rent growth, it is an accelerated rent growth per plan. And the most common mistake is that people don’t deliver a renovation that tenants will willingly pay for.
Chris Bounds 18:26
So their projections are based on a certain renovation but the actual renovation scheduled is not meeting that quality. Essentially, what you’re saying yes, like they want to charge luxury, but they’re renovating only to a basic premium.
Andrew Pope 18:46
Exactly. They want to make sure they’re fair for tenants that they’re delivering what their photos show. So I like to say that okay, you build a nice renovation, you follow, you take photos of it, and then you put that out on the internet on your websites. And that is your marketing right there, you show a renovated unit, and then that you get get draws into the site, they’re able to show up and touch it and see it. And then they can say okay, I get a fitness center here. I get stainless steel appliances, a new top, it’s basically new, even though the property is 1980s and I’m spending let’s say 40 bucks less than I would have on this brand new one right down the road.
So this is a deal my book because it’s the equivalent. So it is the owners responsibility to make sure they’re providing know that quality of unit for them to willingly pay the money for and be honest with their tenant. So a lot of cases they’re making a pretty big rent pump bulk let’s say 150 to $300 a month because they bought it. An owner just basically cash flowed and did not pump money back into a new renovate And so they’re making those renovations, and they’re catching up on the deferred maintenance, and the Raising the rents to market and also making it economic for the tenants. So it’s that equation right there that there’s some shortcuts being taken. And let’s say they hire contractors who don’t perform and they get behind.
Well, those are probably the most common mistakes that they make. And then that affects the the NOI and ability to pay debt service and the investment return on down on down the road. So you have to get that component, right? If you’re going to be in this value added business, and to get the new investment quality asset that everybody saw during the presentation, so it’s asset management’s job to take care of that and see what can be fixed and what needs to be fixed. And to advise and tell them this is critical in order to meet your numbers. Take care of you and your investors right now.
Chris Bounds 20:58
Yeah, I mean, I’ve always coached like, you know, the agents on our team, and folks that are wanting to get their first rental property. And it’s like, look, you can renovate it to any any love you want. But you just have to make sure you’re renovating to meet the comps that you’re targeting. So if you ended up pulling back on that, and not being quite as aggressive, you want to, you know, trim your budget down, that’s fine, you can do that. Just know and understand that that potentially will impact the rent rate, and which from a single family standpoint, may not be that bad. Maybe it could, from a multi standpoint, or multifamily standpoint, you know, that’s compounded times 50 100 300 units, which has a huge impact on the bottom line.
Andrew Pope 21:43
Yeah, it’s a big number. And in most cases, that is the yield that is returned for everybody involved. And that’s why they get into this. So and in the process, what they’re doing is positioning, much needed housing at a much better quality for the tenants. And at the same time, hopefully, they’re giving saving the tenants, let’s say 4050 bucks a month based on a brand new property. So you have to know your market, you have to know your tenants because they are paying the bills or paying the rent. And so everything you can do to take care of them. And to gain trust from them, it will show in your numbers and everybody will walk away home and happy and investors will get what they need. And we’re represented so
Chris Bounds 22:25
because that first year is so critical, because everything on years two through five, or seven or down down the performer, projections, everything is based on year one, so Yeah, screw in your one off, even if you were like, it’s pretty difficult to play catch up at that point. So it’s just gonna have a domino effect on the numbers that maybe you still do, okay, but you’re not going to hit your numbers.
Andrew Pope 22:51
Yeah, so there is a way to accelerate the plant and get ahead of it so that you are able to sell like you’re in your five. But the first year will be slower or less than projected, you can still recover. The thing is you have to, you have to actively get in there and put together a plan in a process. So with one outfit that I worked for, they’ve been at it for 20 years, they had a pretty well oiled machine. And a lot of people like my knowledge in their processes. And I talked about that. And they say, I want you to teach me how to do that. So I was an asset manager, I handled the transactions also.
And during the due diligence period of the say 6090 days, all the value add plan and all the coordination and all the new teams and everything was done so that the day after closing, we had a new system, a new property management team, a new flag, a new signage, and everybody was off and running. And they knew what they had to do. Meaning that the property management team, the construction team, everything was pre loaded and set and they were off and running. A lot of people who get this, they close and they take a breather, and they say oh, now what do we do?
How do we implement this? Well, they can get behind if they take too long. But a lot of times they can do it in a short amount of time, you know, get get organized and 3060 days. But for most institutional grade people, there’s really not a lot of room for error these days, give them what they have to pay for these properties on the front end. So they have to be very precise and very accurate on their timing and their costs and getting this done. And that is where the yield is and the ones that are successful and able to do it. But once you’ve had the experience, they know exactly what’s going to take and they don’t have to spin their wheels to figure it out, so to speak.
So having said that, there are a lot of units out there that are smaller in size that a lot of newer people the same moving from single families, single family flips to rentals to get into 10, plexes and 50 Plex, is they still have to go through the same thing. Only there’s less competition and they can buy these cars properties or less. So three of them put together a creative plan, and that fits the niche in the marketplace, they’re able to have a pretty good investment then. And I would suggest, you know, I’ve seen people new at the game who started out smaller units, that’s, that’s the safe way to start out, I see people and then they move up to institutional and they do that institutional is 100 plus, and there’s a lot of competition, meaning that the margins are skinnier, and there’s less room for error on that regard, because you’re competing with the REITs, large owners, large portfolio owners.
And they’re able to do a lot of units, let’s say by two to 500 units a year. And so they have to have a full team, that’s well coordinated. But believe me, there’s a lot of people doing that, and there and a lot of people are being successful at it. So that’s the goal of everybody. So, and they soon realize that they need an asset manager or somebody’s expertise who’s done it before, because they can’t do it all themselves, because there’s so many moving parts that they are spread too thin. Absolutely. So you can see that we became we’ve become the catalyst for growth. You know, if they’re able to hire an asset manager, it means they’ve already acquired say about 100 units, and that allows them to get better data and get better underwriting and more and better acquisitions. So we are the catalyst for growth and asset managers typically have the experience, they know what you can perform on. So they often times overlap and become underwriters.
They overlap and take care of the accounting with the accounting team involve the overlap and take care of paying the bills. Real estate taxes are one also. So every line item in the expense of T 12 has its own strategy and its own skill set on how to manage to get the appropriate people in there. So that’s where Asset Management show their value is being able to hire, let’s say Real Estate Tax Appeals consultants, how to hire the right landscaper, how to hire the right laundry provider, the pool cleaner, the property management company also has ideas, but that’s also an opportunity to save expenses. So the asset managers are involved with that.
And they make sure they get paid because it’s critical for the tenants to have a working place that they don’t have to do any maintenance on and come home to her each night. So the property manager should have a full time staff there and of maintenance and leasing people that the tenants are comfortable being around with and can’t take care of their tenants. And then once you how can you say assemble the right mix, that’s your secret sauce, you can duplicate that and take off that everybody is able to get what they need and walk away happy. So it’s challenging putting them out
Chris Bounds 27:53
and putting together an orchestra. You know, you got the you got the brass, you got the string, you’ve got the choir in the back, and you get the percussion and then once you get them all together, that’s when you get a beautiful song. How are you seeing so we’re seeing year over year rent, decrease, decrease growth, like negative growth and a lot of markets now. Meanwhile, expenses are still increasing taxes and a lot of metro areas just out of hand insurance, same thing, but labor, construction costs. How are you seeing asset managers adapt to this market? And from a say someone were talking non non institutional here, adapt with current projects, and then also adapt going into new projects to make sure that they can perform and hit their numbers?
Andrew Pope 28:49
Yeah, there’s no question we’re going through a correction. And all the things that you mentioned are a factor. So asset managers come in after the fact after the closed, they see that they may be missing their noi. So maybe the market has changed, maybe the environment has changed around it from the time of underwriting. So they need to come up with creative ways to boost noi add income and slurry income, decrease expenses, and that helps cash flow meet your noi. And for every $10,000 of savings, or NOI that you can add you cap that are divided by 5.5 or six and that gives you about 180,000 More of justified value at the end because the cap rate determines the valuation at the end.
And in a simple way, that is how you justify your value is that you meet NOI and you’re able to adapt and adjust and help the owner get meat that fly creatively per plan or by just adapting and getting out in front of problems that the environment has changed around that. So right now, expenses are going up at That is a battle. rents have, surprisingly, during COVID have peaked and went higher, and now they’re coming back down. So they’re worried about how low that they will go. But they hope that 3% rent growth is the standard industry, they hope that they can maintain their 3% rent growth.
So markets bounced up 10 20% During COVID, because everybody decided to rent and stay put. So that was, that was a surprise. And it can how can you say it can be kind of a head fake, it can throw ownership stocks, they don’t, we don’t need to renovate, we don’t have to do our value add plan, because we got so much revenue now that, you know, we’re taking care of well, things are coming back down. And so they’re having to adapt and adjust and change as they go in order to meet the expectations of the investors what they were shown at the beginning, which is pre pandemic, pre recession, and still get it to work.
So what we’re seeing here, the ones who are able to perform and make their investors Hall are going to be able to get reinvestment from those people, they’re going to be able to get new reinvestment. We’re going to throw a period where, how can you say the ones that didn’t adapt and adjust are going to not be rewarded in the marketplace, and they’re going to find it harder to continue. They may make some money on this first round, but they have to adapt or die, I guess. And that’s kind of how the American economy is. back together.
Chris Bounds 31:33
That’s what everything you know, I played that game with house flipping, it was a lot different back into those and a lot of wall, the, you know, going into 16 through 18. And then during COVID. So you’re always adapting. And it’s going to be interesting, I think, on the on the rent rate, how that’ll end up playing out. And there’s lots of there’s so many factors there. But yeah, we just, it accelerated so quickly in such a short amount of time that it’s natural that we’re gonna see a year over year decline. Part of it seasonal, the other part is just coming, you know, gravity.
And then we’ll see how low that goes. But I would imagine that levels off the I mean, with as long as labor remains strong and unemployment remains low, which the Fed is trying to work on that still at Imagine that still keeps it but the the concern that really wraps up into that equation is new supply coming on in 2023 has one of the highest number of units coming online and like 40 years. So depending on your market and sub market, there could be a little bit more pain
Andrew Pope 32:51
ahead. Yeah, supply and demand in a market pretty much dictates what the rents will be. A lot of cases under supply and new units are desperately needed. And it really won’t affect let’s say the value as it were built in the 1980s. They’re able to adjust in a small way. Sometimes the new supply will be more than it’s needed. And they will compete and drive down rents and so that they’re not able to get what they projected with the standard underwriting on rent growth is about 3% per year. Most markets in the Sunbelt, at least are above that. But it’s gonna vary from market to market.
And that’s based on rent growth and everything.
And other big surprise that happens is the rise of interest rates. The cost of money is about the biggest expense line item in real estate budget, because no i pays the mortgage. And there’s a debt service coverage that is contractual with the banks. And if you’re below what’s contractual 1.25, and a lot of cases you’re on their scope. So you have to work with the banks. They’re gonna give you some concessions and work with you. But sometimes it’s a threat because they have first lien rights on the security and they can foreclose and take it and then the equity investors get nothing all the equity is lost then so that is a threat. And so asset managers provide more noi to make sure the debt service coverage stays in the projections for wanting to keep the lenders off their back, so to speak, wanting to make sure that equity providers get the same returns that they were expecting.
So that is the demand for people like me, we know how to increase NOI and get that reliability to things like portfolio and supply and demand and adjusting for variances and everything else that you know there’s a strategy for each line item that those are the types of things that we can see. We can spot the mini trends before they become big trends. And the big trends become Um, let’s say big variances, which are hard to correct and oftentimes expensive to correct. But if they go too long, they’re not correctable, and they can cause trouble. So, right now, people are compensating for interest rates that were once, let’s say, 3% have gone to six and 7%, because they were adjustable.
That’s a big jump. So that means that the ability to pay the mortgage is impaired, because the interest rate payment went up. So the properties that were locked in rates, you’re able to assume loans from Freddie and Fannie from a prior year, you’re able to purchase those as soon soon them that makes them investment quality and more valuable.
So the debt has a big impact on real estate holders. As you well know, the homeowners right now realize that their personal budgets, because of interest rates, have gone from, say 2000 to 3000 a month, it comes out of their pocket, same thing times, you know, 100 400 unit property. Yeah. Yeah. Everybody, the real estate industry has some challenges. But like I say it’s a it is the guys who are able to underwrite appropriately and manage appropriately are going to survive this, the ones that got a little bit carried away, or going to have some more troubles. But it is correctable? Yeah, I’ll say that. Let’s close out
Chris Bounds 36:22
with a couple questions. I asked this to all the guests that come on the podcast. Starting off with question number one, if you can give advice to your 20 year old self, what would that be?
Andrew Pope 36:36
Oh, that would have been, I wouldn’t have done anything different. But having, you know, hindsight, being 2020, I would say that the 2000s are coming in that 2000 10s and 2000 20s. They’ve changed drastically. I would say that, you know, let’s understand the new culture of leadership and accountability. For ahead. So I would have studied more leadership type topics back then. And then continue to adapt and learn because things have changed drastically in the last 20 years. That’s interesting.
Chris Bounds 37:16
It’s perspective, I haven’t heard before, like, What book or books have greatly influenced your life.
Andrew Pope 37:24
So right now, when you’re young and 20, you don’t think about that far ahead. You do the best you can with the information that you have. Yep. So if books like extreme leadership, or dichotomy of leadership, or these, these leadership books written by, you know, Maxwell and all these others out there would have been extremely valuable at that point. Back when I was 20, the only way to get that type of leadership training was to enlist in the Navy or the military, it goes through the ranks. Right now you have ex Navy SEALs, writing books and talking about all the all the things that you need to do to keep up with technology and the new things and to adjust and adapt. That’s been critical in this new age most COVID. So the extreme Extreme
Chris Bounds 38:12
Ownership, right? Extreme Ownership and the dichotomy of
Andrew Pope 38:19
leadership. Yeah, sure. Those are two, two straight to the point, Jocko Willick. Books that that speak to, it’s a direct thing that the private sector needs to really get a grasp on and apply to the business world, taken straight from Navy SEAL training. It’s a hard thing to get your mind around. As a 20 year old, you don’t have that type of load that type responsibility put on you that young, but as you get out into the business you do. So it’s good to get all the training and coaching and leadership thing that you can get as you get out to the business world.
Chris Bounds 38:59
In the last five years, go ahead, you have something else.
Andrew Pope 39:02
So I would say in the last five or 10 years, these books have came out. And the leadership gurus I call them or the coaches are the people who learn this at an advanced level and perform at you know, at a, at a high level in the military, the Navy SEALs. They’re finding customers in the business world who need this because technology, the economy, the business world is all changed and they need this, they need to understand this and how to operate with this in order to grow in order to even just to stay at even par. We’re operating profitably. So you know, you learned that on the fly. But my 20 year old self, I did what I was doing at a high level of young, but we still didn’t have that type of training and I wish we had
Chris Bounds 39:50
Yeah. The last five years what new belief behavior or habit has most improved your life
Andrew Pope 39:58
you know, so along that line or leadership. I took a bootcamp course, with Raul molasses he had, he writes a book, but he also teaches he has kind of a following. But you know, 1%, the goal is to get 1% better each day, that perfection is really the lowest standard, you’ll never get to perfection, you just have to get 1% better. And a lot of people in the business world get who are working in a career, and so forth get loaded up to the point of failure to the point where it taps their well being. So this brings you back learning meditation, and taking care of yourself, being an entrepreneur has a lot of demands, you need to be able to have a good carbon based unit that’s healthy and operating. So you can adjust and expand with the demands out there in the world.
So I think entrepreneurs, working for yourself is is a good test. So I have seen the American model more competition, and the best survive, really almost push human capabilities to its max and then some, you know, technology has grown a lot in the last 10 years, they say it’s gonna grow 100 times the next 10 years. So that is really affecting a lot of folks and their well being their mental health. So a lot of is just being able to adapt and change and get up the learning curve. And know this 1% per day is something and staying healthy is what you need. In order to get that you know, order to continue to grow. You’re not you may have the highest perfection level expectations community, you know, that you may have on yourself, or your employer may put that on you. But you need to really worry about yourself and getting better 1% per day, because that’s 37% per year. And that’s a pretty good growth rate right there.
Chris Bounds 42:03
100%, though,
Andrew Pope 42:05
people are being pushed to their limits, and are getting in having health troubles. And that’s a problem in our society, right now. They’re turning to self medication, whatever that is, addictions. So the thing is be as healthy as you can be, and continue to grow.
Chris Bounds 42:22
Yeah. And I would add having the self awareness to, and the humility to, to know what your skills are and what they may not be and how you fit. Because at the end of the day, entrepreneurship is cool, it’s a lot cooler than when I was 20. And it’s definitely a lot cooler than when you were younger. But the end of the day, not everyone needs to be an entrepreneur, some people are much better being a number two, or a number five and a startup. And they’ll probably be happier, wealthier, more overall, well rounded.
Andrew Pope 43:02
So the self awareness is key. There are a lot of people out there who work. I’ve seen this earlier working for a large institutional life insurance company. These 10 People are told that they are high performance, they’re, you know, they’re all that in the bag of chips, and they’re perfect. And they are, you know, and they believe that we’re if they’re compared to openers, and so forth out in the real world, it may not be. So people have to have a broad base a lot of checks and balances and the humility and the awareness and to be able to tap into all the feedback that life gives you. So you can adapt and adjust on a daily basis. I hope that makes sense. But you know, I see a lot of people who have the self awareness saying just see how you fit in in the day to day with everybody else out there, because the competition is steep. You have to perform on a daily basis. So if you aren’t aware of what you have those standards you have to meet on a daily basis. You’re at a disadvantage.
Chris Bounds 44:05
Yeah, yeah. And it’s getting stiffer, because a 14 year old kid and Rwanda can come in and compete with you, depending on you know, what you’re doing. And their their version of success is a lot different than what yours might be if you live in Silicon Valley. So how can people reach out to you?
Andrew Pope 44:26
So the best way I guess is I have a LinkedIn profile that’s been up for 20 years or so Andrew, a pope. You can search on google me. Preferred systems is a company that I work with and do freelance and fractional asset management. So I’m doing consulting and I help owners who want to grow I become the change agent and the growth agent for their portfolio size because it pays it’s economically feasible to grow a portfolio of real estate and become financially independent.
There’s a big demand And for that, everybody wants to get to a point where they don’t have to work, you know, to the point of exhaustion every day, and have a life that they want to continue to pursue other interests. So that has been the theme right now is to grow your portfolio. And asset managers help with that. We trained with that. And we get people of the awareness in the system so that they can check their checks and balances and get 1% Better a day in this industry.
Chris Bounds 45:28
Yeah. Which is clearly illustrated how vital it is, just in general, but especially in a cloudy market with a lot of uncertainty ahead. It’s just, it’s vital to run a successful property to fulfill your promises and projections that you have for your investors, to make sure you’re fulfilling your obligations to the banks, and doing your job as an operator, like for your residents. It’s just so important.
Andrew Pope 45:58
Yeah, I’ve seen this before, when economies change and properties go bad, it affects the owners life and their careers and their families. So, you know, once they understand this, you know, they’re well vested, and they take responsibility and leadership, and they want to do it right the first time. So that’s where the value is, is that they don’t want to fail and we don’t want my job is to make them successful and not fail, and to stay ahead of it. And to you’re gonna make them look good. Make them look good. So this is common sense stuff, but not everybody does it and I just want to give my two cents.
Chris Bounds 46:35
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