This Flash Back Friday centers around self-management tools. Jason Hartman hosts Lucas Hall Swanky to discuss Cozy and Landlordology, property management tools which offer end to end online self-management solutions. They go through the various aspects of each tool including rent collection, tenant screening, and more.
Jason Hartman 0:00
Welcome to this week’s edition of flashback Friday, your opportunity to get some good review by listening to episodes from the past that Jason has hand picked to help you today in the present and propel you into the future. Enjoy. This show is produced by the Hartman media company. For more information and links to all our great podcasts visit Hartman media.com.
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 1:15
Welcome to the creating worlds show. This is episode number 598 598. And this is your host, Jason Hartman, thank you so much for joining me today, as we are coming up on a very important day. You know, it’s been said, and I think it is very true that you cannot be successful in life without first being grateful for what you already have. And I think that brings to mind the affirmation. I talked to you about several episodes ago. What is that information? Remember, I told you when I spoke to my second largest audience ever 2000 people a couple weeks ago in Las Vegas, I would ask the audience, what time is it? And the answer was Be it’s an amazing time to be alive. So I asked you that what time is it? It’s an amazing time to be alive. Yay. Okay, so Thanksgiving is coming up. Of course that’s the the day the one day of the year that one hopefully we, you know, kind of reflect a little bit and count our blessings and do that. So I just want to remind you that we got one more episode before Thanksgiving. And today our guests will be Lucas Hall we’re going to talk about some swanky. Yes. swanky. You know, that’s a really cool word. It’s not a cool word. It’s a swanky word. Anyway, some swanky self management tools. He’s with landlord ology, and cozy and we’ve talked about cozy on the show before. We’ve got some in depth stuff coming up about their fantastic product or service. Before we get into that, I just want to super quickly because I don’t want to keep you in suspense too long. Cover one more of those slides. Okay. One more on the income investments strength versus deflation. Last time we talked about income and investment strength versus inflation. But what if we have deflation, right? And we divided them up into three categories, low, medium, and high. And so in this one, our worst performers in the deflationary environment will be gold or any precious metals, your mortgage, because remember if you owe money, and the money actually goes up in value, and that’s what happens in a deflationary environment, dollars, or euros or whatever currency we’re talking about, increase in value due to deflation. See, when we have inflation Of course, inflation is that hideous, hidden tax that robs the money right out of our wallet, our bank account, our stock portfolio in our bond portfolio, but deflation actually makes the value of those things go up. Why? Because they’re denominated in the currency. They’re denominated in this case in dollars. Now I know we have listeners from 164 countries around the world, and that’s awesome. But you know, most of you are pretty familiar with a good old dollar, as mismanaged as it is, it’s comparatively not that bad. But that isn’t saying much and it shouldn’t say much. So how do these different asset classes perform versus deflation? And what is their strength like? Well, cash goes up in value. Bonds go up in value, pension income, goes up in value, retirement plans and so forth. taxes go up in value, in a way because if you have tax liability, what happens when your liability is denominated in dollars? But now now this is really interesting. And you know what, if lest I go off on another tangent, as I so often do, this could take a long time, you know, this one, this one is complex because think about it. What if you earn your money the year before, as we all do, right? You earn your money the year before, whether it be investment income or income from your job or business, and then you pay taxes on it
Jason Hartman 5:27
about a year later. So say you earn income in January of we’ll just take a hypothetical, we’ll take 2015 you earned the income in January of 2015. And so you have a great month, and you make a lot of money. And the taxes in the US are due April 15 of the following year, but really, you can extend them out and you don’t have to BAM to October 15 or so of the following year. So really, almost two years has gone by, and if we have some real deflation Or inflation in that two years? What happens to your tax liability? Well, let me see, let’s think about this. You’re paying the tax bill in either inflated or deflated dollars, almost two years later, and that could be pretty significant. Because if we have deflation, then it makes your tax liability act very differently than if we have inflation.
Jason Hartman 6:26
Right. So that’s one to ponder. And it’s a little complicated. I actually like to talk to you about that for a half hour. Maybe we’ll do that in the future. But guess what we have, you won’t believe this is the most ever last night. I took the time to plan out. Our next what 18 shows Yes, 18 shows ahead. We’ve never been that far ahead. By the way, if you can hear that noise in the background. My wonderful housekeepers are steam cleaning the floor, so I apologize. But at least Coco isn’t barking So yeah, that’s pretty significant. We really should talk about that one, but we’ve got up to Episode 615. all planned out for you already. And wow, have we got some great shows coming up? Okay, back on track here, Jason. Yes, I know. It’s tough to keep you on track. So medium, what x and a medium weigh in terms of strength versus deflation, the income from your job, your rental income on your properties, or dividend income on stocks or the value of your stock portfolio, the capital value of it, and what is low what has low strength versus deflation? Well, precious metals, gold, you know, silver, platinum, palladium, whatever, right, your mortgage, because and this one’s interesting, too. We could talk for a half hour about this one quite easily, just like the tax liability, one sort of interesting to ponder and and scratch your head against this one, because mortgage liability actually increases right if you you know, part of my big strategy is what I call inflation induced debt destruction, inflation induced debt destruction. So the likelihood is over time, we’re definitely going to have inflation, right? I mean, that’s at least historically what we’ve had. And given the amount of debt and the unfunded liabilities coming at us, not just in the US, but around the world. Over the next 1520 years, it’s pretty much insane. And inflation is probably in the cards, maybe severe inflation, maybe hyperinflation. And there’s no academic definition for hyperinflation. Remember, but, you know, most people would consider hyperinflation to be 50%. Did you hear me? I didn’t say 15%. I said five zero percent, annually or more. Now, certainly, we’ve seen hyperinflation much higher than this. But can you imagine if you have $1 million worth of mortgages and in one instance One year, you have 55 zero percent inflation. Literally inflation pays off half of that liability. It’s unbelievable. But what if you have deflation, then the value of the debt actually increases because remember, debt transfers wealth. From lenders to borrowers, the lenders get poorer, and the borrowers get richer in an inflationary environment because they pay the debt back in cheaper dollars ever debased dollars, but if it goes the other way around, and we have deflation, the debt becomes more burdensome. However, remember, you always have that implicit option, that backdoor option, maybe you want to even call it the nuclear option and that is to get a loan modification to default to walk away. I had the founders of a company called you walk away.com on my show for And we did that as a flashback Friday again, remember, this is not uncommon, just in the last several years, you know, millions 10s of millions. Well, I don’t know if I want to say 10s of millions, but well over 10 million people have done this. So it is by no means some kind of rarity. Okay? Lots of people do it. And frankly, why wouldn’t they look the lenders, when they call to get their loan modification or to do a short sale or a workout or a deed in lieu of foreclosure? The lender is pretty much all said to them. Look, if you want a favor from us, you can’t be paying your mortgage yet gotta stop paying. Why would we negotiate with you if you’re paying? Why would we do you any favors if you continue to pay? So you know,
Jason Hartman 10:48
what gets rewarded gets repeated right? You know, that’s the the old saying I talked about from that great book, the greatest management principle in the world by Michael lebeau, or Michael lebeau. However you say it, what gets rewarded gets repeated. Just look around the world. And you’ll notice that that is most definitely true. So the mortgage is interesting. It’s something we could talk about in much greater depth, but you get the idea, right? If we have deflation, the debt becomes more burdensome, and so long as they don’t have debtors, prisons, and you can do a workout alone model walk away a deed in lieu of foreclosure. I mean, you’ve got options, right? You’ve got implicit backdoor options, right? Well, the value of your real estate, what happens then with deflation? Well, it’s bad news, because it deflates in value. But interestingly, your rental income is kind of medium because you can adjust that. And if the real estate deflates in value, that actually will give you more strength and power to negotiate with your lender for loan modification. And that’s really what happened during the Financial Crisis just a few years ago, right? Real Estate deflated in value in most places. The debt became more burdensome, and well over 10 million people just in the US alone, but certainly all around the world too, got favors, they got a bailout. You know, hey, look, if if goldman sachs and Lehman Brothers and Merrill Lynch and Bank of America and countrywide and all these disgusting scumbags, the banksters, if they’re going to get their bailout, why shouldn’t we? You know, I mean, everybody, I joked about it, I said, look for those people who got loan modifications and got favors from their banks, you know, tact good, upstate standing taxpaying citizens. I mean, it’s basically like they just got some of their tarp money back. I mean, you know, the Hank Paulson, our treasury secretary at the time and, and George Bush, who right at the end of his tenure, dealt with this, you know, they just, they gave almost a trillion dollars. To these criminals, you know, Wall Street is the modern version of organized crime. So they gave them almost a trillion dollars and whose money was that it was yours. It was not just your tax money. But when they create money out of thin air that causes inflation, and it steals the money right out of your pocket, the insidious hidden tax. So all I say always is align your interests with the powers that be we’re not going to change it. They’re too powerful. The most powerful entities the human race have has ever known governments and central banks. That’s it. Why are they so powerful? Well, they happen to have militaries and armies behind them. So you know, that makes them really powerful. Okay, so let’s get to our guest. Hey, look, folks. I did that in only 13 minutes. That’s amazing. Right? Could have been two hours easily, but I went through it pretty quick. Okay, so if you’ve got questions, go to Jason hartman.com. Use the voicemail feature and Send me a voicemail. I gotta ask you a favor. be concise. Think about what you’re gonna say talk quickly talk fast, because when we play your message on the air, you know, we don’t want to wait too long listeners become impatient, right? So speed it up a little bit, just jot down a couple bullet points that you want to talk about questions you want to ask and fire away and we’d love to take your questions on the air. And also go to Jason hartman.com. Register for our meet the Masters event coming up fast, and also go to venture Alliance mastermind comm to check out the venture Alliance, our high level mastermind group, we’re headed to Dubai, beautiful, incredible Dubai, venture Alliance mastermind calm and Jason Hartman calm in the events section. Okay, here’s our guest, you’re going to hear about some great tools for self management. You’re gonna learn a lot from this episode. So please help me welcome Lucas Hall. Here we go. Remember, you’re listening To flashback Friday. Our new episodes are published every Monday and Wednesday.
Jason Hartman 15:12
It’s my pleasure to welcome Lucas hall to the show he is a successful landlord investor and IT consultant for the last 10 years. He has dozens of tenants and a profitable income property portfolio. He’s founder of landlord ology and the chief landlord ologists. I love that at cozy, which provides free online rent collection screening tools and training for landlords and managers. Lucas counsels thousands of managers every year teaching them how to successfully manage rentals build wealth, and keep their tenants happy. We had Lucas’s partner in cozy on the show before you may have heard that episode, we’re going to talk about kind of a different angle on the business and talk about how you can better manage your properties and actually self manage your property. As I’ve told you the story before on prior episodes, I never thought it would be possible years ago to self manage properties that I have never seen with tenants I have never met from 2000 miles away. And I and many of my clients are doing just that. So you know, you got a good manager, hey, they’re great, keep them. If you don’t have a great manager, self management is another option, but you got to know what you’re doing. And that’s what we’re going to talk about today. Lucas, welcome. How are you? Hi, Jason. I’m well, thanks for having me on the show. Good to have you. So I just wanted to preface that whole self management thing a little bit and, and maybe ask you since I lead with that, do you talk about helping people manage their property managers, or on your end of the spectrum? Is it just direct management of your own properties?
Lucas Hall 16:53
Correct. So personally, in my own life, I manage five properties and dozens of tenants myself that I own With my my wife and I, but what I do with landlord ology and cozy is I teach landers, managers, excuse me teach landlords how to manage their own properties. And if they do have a property manager, then I usually try to educate them as best I can on the things that need to happen so that they could do it themselves. But while they’re still in that contract, that management contract, you know, what to expect from a property manager and what kind of reports you should be getting and how involved the owner should be. So that eventually they could pick it up and take it on themselves and potentially save, you know, 10% a month in profit. Yeah,
Jason Hartman 17:37
okay. Okay, good. So let’s talk about what we can learn about how to be a better manager, you know, here is sort of a broad stroke. We’ve all heard the horror stories about you know, bad tenants and so forth. But to me, this is surprisingly easy. I mean, I don’t know maybe it’s easy because I’ve been doing it for a long time, but it’s just like Not that
Lucas Hall 18:00
hard. Is it? Or is it? No, it’s really not. It’s really, really not, you don’t need a degree to manage a property. And in many states, you don’t need any sort of certification or business license, you just, you know, as long as you own it yourself, you can do kind of whatever you want within the housing laws. So it’s, it’s fairly simple and there’s so many great resources out there and landlord. ology is, is definitely one of them just to teach you how to be better. For sure.
Jason Hartman 18:27
Let’s kind of we’ll do this in chronological order. I guess we’ll talk about tenant screening. And then we’re going to talk about some other things on rent collection and so forth. But you do you by the way, before we even do Tenant Screening before that is marketing. Do you talk on any of that topic of how to market your properties and so forth?
Lucas Hall 18:45
I sure do. And, and
Jason Hartman 18:46
I think that’s why don’t we talk about them to talk about that first? Yeah. Okay, great.
Lucas Hall 18:50
So the key is to really get your property listing or your ad out there, right. I mean, you want to catch as many tenants as you can. To see, you know, to get a bigger pool of applicants, and so you’re casting the broadest net. And I think that’s a challenge for a lot of people because maybe you’re not so tech savvy or maybe you’re not comfortable with, you know, advanced listing sites, or maybe there’s just a ton of them. So, the tools that I often recommend and that I use personally in my own life, is you know, Craigslist is so huge in my my city, which I’m in the DC metro area, and I get 90% of my applicants from Craigslist, but, but the other tool that I highly recommend is something called postlets. And it’s POS t le t s postlets.com, which is a little Deaf that’s owned by Zillow. Sure, correct. Yep. Zillow, and the thing I love about them is that they actually will let you formulate a listing and then it will send it out to all the major listings sites and so it’s kind of like hitting you know, 12 birds with one stone I should say,
Jason Hartman 19:56
yeah, so it’s great and we love those slats. Yeah,
Lucas Hall 19:59
yeah. And something that we do cozy is we have a listings capability to so any property that you might have they’re listed with cozy that you’re using to screen tenants will also show up in you know, a another listing site so it’s it’s really great. It’s really easy to get your your property out there
Jason Hartman 20:17
before you even use postlets here’s one thing every landlord needs to do. You got you know, you’ve heard the old saying a picture says 1000 words,
Lucas Hall 20:27
Jason Hartman 20:28
You got to get some good photos of your property and keep those on file because you might be using them once a year or once every other year. You know, have if if a lawn looks crappy, get that photo photoshopped. If you don’t know how to use these photo editing programs yourself to adjust the lighting. Don’t have the sun behind the house have the sun in front so the shadows aren’t bad. You know, get these photos look at it. It’s worth hiring even a professional real estate photographer really estate photography is a specialty, okay? And there are all kinds of real estate photographers out there that call on realtors all the time and they say look for 100 bucks 150 bucks, we’ll go take photos of your listings. All you only need to do this once, okay? Just get some good, you know, have have five or six good photos of your property done. You know, have them retouched, so they look good. And you can use those over and over again on Craigslist. postlets
Lucas Hall 21:31
everything right? I mean, would you agree? Absolutely. I have a bunch of folders on my computer where I go back to the same pictures over and over again every time I need to release the apartment. So and you know, one thing that I think is worth saying is that it’s it’s so wise to take incredible pictures up front. But it’s also wise to go back every few years and do it again. Because if you don’t and the property sees a lot of wear and tear through some rough tenants or maybe ahead, you know, maybe it really got destroyed one time. And then the next group comes in there and the paints changed. Maybe the furnishings are gone. And then you know, the outdoor yard doesn’t look at all like it used to, you know, and they’re basically approaching a completely different property than what’s displayed in the pictures, then, then you’ll have a problem because it just feels like false advertising feels like you’re pulling the wool over their eyes. And that’s never a good feeling.
Jason Hartman 22:21
Fair enough, of course, but if your property doesn’t have any major changes, you can just reuse these things, you know, which is absolutely, absolutely. Okay, tell us more.
Lucas Hall 22:31
Okay, great. So as you said, picture’s worth 1000 words. I also like to put my contact information in there. I know that’s silly. And but it’s worth saying that I actually put my phone number in the listings, which a lot of landlords do and I actually invite people to text me. So you know, as many barriers as I can remove, to help me connect with that potential applicant, that I’m going to get showings better and faster than the way lower down the street.
Jason Hartman 22:58
Now, I think you’re crazy. You bet. Okay, go ahead. And just so you know, my mom does it this way to God, I think I hate texting. It’s literally the worst form of communication ever invented. But she just takes the calls all the time. And I just think you could automate that a little bit by having one of these voicemail services that will let them talk to you, but first just plays some standard information and says, you know, here’s the property address, feel free to go look at it, you know, and you’ve got to use some, obviously some savvy about that, you know, here’s the deal, here’s what I need security deposit, etc. Just explain it all to them on tape. So you don’t have to keep answering calls and of course, long distance investors, you’re probably not going to do this, okay, you’re going to have an agent do the lease up of your property, but you know, you can layer what we do is we layer on top of what that agent or property manager does, and it really gets the property leased a lot faster. You No, we, and it also holds them accountable. And you know, if you control that advertising funnel, you can say, hey, look, I saw that we got, you know, 16 people interested in the property last week, what’s going on with them? And the agents gonna say, Oh, well, I guess they know what’s going on I better, you know, I’m being held accountable here.
Lucas Hall 24:18
Right, right. Yeah. tools like Google Voice will let you set up that, like a fake phone number that you could forward to anybody else and then leave that recording, as you described. So that that’s a I’m glad you brought that up. That’s a fantastic idea,
Jason Hartman 24:29
the outgoing message, right. So at least they hear that first, they get the details. And then if they have further questions or interest, they can you know, be connected with you.
Lucas Hall 24:39
Yeah, good. And to touch on the whole picture idea that you had mentioned earlier. One of my favorite companies and little tools is called circle picks pi x and their national company. And what I love about them is I think, you know, you can hire a, they’ll hire a local photographer, a professional photographer for you, and they’ll come take, you know, events 360 degree photos and some of your rooms and it’s like 100 bucks. I mean, it’s really cheap. And then they’ll even host the pick
Jason Hartman 25:05
it is it’s so inexpensive. Yeah,
Lucas Hall 25:07
right. I’ve used them a couple times I’ve been very pleased. So, okay, so once the listings out there and you start getting phone calls or emails, or you know, your property managers is collecting those, and you’re keeping them accountable. The next step is to really set up showings for these people who actually want to see more and there, they might be good candidates. And so when I’m taking and when I’m screening these people, I will have an initial phone call with them. And it sounds like the property manager could do the same. Just to go through the general requirements so that we don’t waste any time going to a property if it’s not going to work out. You know, things like if the property is a no pet policy, then then you know, it’s worth asking even if it is clearly stated in the ad. And then you know, if everything checks out whether, you know, tell them what your income requirements are and tell them what kind of a lease you’re looking for, which is really important, I think that a lot of times people just assume, especially tenants, they just assume they can get whatever lease they want. But if that doesn’t match up with the schedule that the the owner has, you know, then it may not work. So I’ve wasted many hours that way, where as it sounds like I have a good candidate, and then they say, Oh, I’m looking for a three month lease, and I said, Oh, shoot, it’s, you know, it’s only a year minimum is the requirement and we go our separate ways.
Jason Hartman 26:25
Yeah. Or got three months. Who wants that? You know, what do you think about two year leases? I think two year leases are pretty good.
Lucas Hall 26:31
You know, I love them. I will always offer a two year lease to somebody when I’m talking to them, but I’ll say a year as the minimum and then I typically won’t actually reduce my rent price for a two year lease because I think it’s I think it provides extra security. I think there’s a benefit for the for the tenant as well to have a two year lease and so they’re getting that extra benefit, but
Jason Hartman 26:52
Oh, yeah, absolutely. You know, by the way, just Lucas dimension on that. We actually try to increase them. Where we say, you know, here’s the rent, you know, so 1500 dollars or whatever the first year, but the second year it goes to 1540 or 1550, or something like that. So we build that rent increase in there, just for inflation protection.
Lucas Hall 27:15
Sure. That’s a great idea. And actually, I like that because it gives them a heads up a year in advance when the rents gonna go up.
Jason Hartman 27:21
Yeah. And then you don’t argue about it either. You know, it’s already, it’s already spelled out. And usually the way the human mind works, you know, that people think about today instant gratification, very few people think about the future in a cogent way. You know, and so the tenant will usually just agree, hey, look, you know, that’s not for 13 months. I don’t need to think about that now. You know, so they’ll, they’ll just usually agree to it. Yeah.
Lucas Hall 27:43
So after that initial inspection or conversation that I have with them, and it looks like it’s going to work out, I’ll usually invite them to, you know, join me at the property so we could go through and check it out and they can get a warm fuzzy about it. So what I typically do is, I do some Nicola landlords open house, I don’t know if I’ve coined that term or if I made up or I heard it somewhere, but but basically, it’s similar to a real estate open house for sale of a property. But the difference is that, you know, I’ll schedule back to back showings with people who had been interested all that week. And I’ll you know, set it up from like, one o’clock to four o’clock on a Saturday, and I can just tell my existing tenants who were there, hey, listen, you know, you don’t have to leave. But I’d really appreciate it. If you did, you know, go catch a movie, go get a long lunch, you know, for these three hours, and I’m going to show the place to like six different groups of people. And what happens when that that open house happens is that though they can’t really just show up, it’s all by appointment only. It does create a sense of urgency because people will inevitably show up as other tenants are leaving and then there’s the buzz around the property. And they always ask the question, you know, hey, has anybody else applied or Oh, I really like it. How quick Do I have to move on it? And then I can quit. Tell them Oh, listen, I had six showings today. You know, it just creates this sense of desire for the unit, especially if it shows really well. So, that tactic has helped me many times on many properties, collect multiple, you know, holding deposit checks from tenants that day. So oftentimes I’ll spend three hours and ended up with three different groups who are interested and have gone home to go apply. So it’s worked well for me and allowed me to secure qualified applicants in like three hours. Right? So
Jason Hartman 29:35
just a reminder, you’re listening to flashback Friday, our new episodes are published every Monday and every Wednesday. Okay, sounds good. Tell us more. You know and and move on anytime to rent collection if you want, rather than the screening process. But but more on screening? Sure.
Lucas Hall 29:56
Yeah, more than screeners? How about if I do find something
Jason Hartman 30:00
How about using cozy and doing the background checks and all that good stuff?
Lucas Hall 30:04
Great. If there is someone who does want to apply, then what I’ll tell them to do is go to my application, my online application, I’ll provide them the link or it’s, it’s usually in the ad anyways, they can always go back to the listing and click on it from there. And then they can, this online profile, this online application is on cozy, it’s hosted, it goes in it’s public, and they can go to it from their phone, they can go to it from any laptop, or iPad or whatever, and they can just fill it out. And so sometimes my tenants or my applicants will, will be at the property or in the showing and want to jump on it and they will literally just walk out to their car and fill out the application on their phone. And the beauty of that is one of the features that cozy offers is that it lets a landlord or manager require a credit report and a background check as part of the submission of that application. So by the time I ever see any real application from that person, it has a full Experian background check with credit score credit data, credit lines, debt, everything and a full background check which includes you know evictions criminal sex offender database terrorist watchlist, all that stuff. And it’s all bundled together so the first time ever have to really deal with an applicant on paper, the data is already there, everything’s there it makes it super easy just to look at it. Everything’s there in one place. So we did a show on more with a lot more on cozy but just explain to us how that works if you would, people can go to the cozy website co z y and it’s dot it’s not calm. What is it? It’s dot co.co
Jason Hartman 31:44
Yeah, yeah, coat cozy.co Okay, they can go there and they can set up an account. What as a
Lucas Hall 31:50
landlord, right. And is there any charge for that? What is the account do? You have you own your own portal and everything right, tell us more about it. That’s correct. So cozy. is a full in the in property management software platform for landlords and managers. And so they, they go to cozy co set up a landlord account. And instantly you’ll be prompt with you know, Hey, tell us about one of your properties and you can fill it all in. And then you can start collecting applications on that property or that unit. And so we’ll provide you with that URL to send your applicants to and that URL that you can put into all your listings. And then the tenet, you know, it’s really easy for the tenant to just log in or go to that URL, create a tenant account with cozy, and then go through an identity verification process and fill out the application and can submit the whole application including a credit report and score in about five or six minutes. So it’s extremely easy for a landlord to just kind of get up and running in a few minutes and then have a way to collect these screening reports and the application. And so, you know, I think that’s critical. Just to make make it super easy. So basically what you do is you go to cozy, you set up an account saying that you’re a landlord.
Jason Hartman 33:07
Now, if you have multiple properties, how do you do that? are you setting up? You know, one account for each property? Or do you have one account and say I have all these properties?
Lucas Hall 33:17
No, each manager landlord would set up one, just a single account and then they would they can add as many properties or units as they want to. so cozy is completely free for I mean, there’s nothing there’s no charge the landlord or tenants, the only the only tool out there that will let you screen tenants and collect rent for free. So it’s, it’s easy.
Jason Hartman 33:34
And then when a tenant applies for your property on Elm Street, they go there and there’s a portal for Elm Street, right? And they can they can apply and it’ll it’ll just automatically get their credit report now, there it charges the tenants for credit reports, right?
Lucas Hall 33:51
That’s correct. So each tenant would pay about $19 or $34 for the two reports.
Jason Hartman 33:57
Now many landlords that self manage actually, you know, It’s a minor detail, it’s not even worth the time, frankly, but but they do, they do have the credit report and background check is a little bit of a profit center, frankly, you know, they, they’ll charge $25 for an application only cost them 10. To process. So, if they if they use CCOs, either they’re not gonna be able to do that, right?
Lucas Hall 34:18
That’s correct. We’ve actually tried to purposely eliminate that application fee and just charge the tenant directly.
Jason Hartman 34:23
Yeah, okay. That’s, that’s no big deal. It’s fine. And then, once this tenant is approved, the tenant has a profile inside of cozy and then you can do the rent collection right through the software, right at no charge each month. That’s correct.
Lucas Hall 34:35
It’s really easy. Yeah. Beautiful, beautiful, beautiful. I love it. Okay, what else should we know? Well, one of the perks that I love about the way cozy handles credit reports is that, you know, I used to have to struggle when ever I collected a credit report from somebody and and then I denied them based on something on their credit, you know, the federal regulation says that I actually have to give the tenant either a copy of their report or help them figure out How to get that report so that so that they can correct it in case there’s an error or something, or maybe they’re being, you know, penalized for something that’s not true, and then they can fix it for next time. So, the thing with cozy is that because the tenant is participating in this process, they get a copy of all these reports at the same time the landlord does and, you know, so they never, they never have to, the landlord never has to worry about following up with that tenant that they deny and working with them. And then, you know, having the hassle that so it’s instantly compliant with with the regulations. It’s really just easy.
Jason Hartman 35:35
Yeah. Excellent. That that just makes it a lot simpler. Okay, what else should we know? Do you want to talk about rent collection? I mean, you know, we know cozy does that but you you teach people about rent collection in general. What tips do you have there?
Lucas Hall 35:48
Absolutely. So rent collection is probably the biggest pain point for I think for all managers, landlords, it’s difficult. I mean, I’ve heard landlords Tell me horror stories and, you know, probably the craziest type of recollection I’ve ever seen was or heard of was I was speaking with this person at a conference. And they said they do the ice cream truck policy. And I looked at her and I said, Well, what do you mean the ice cream truck? And she goes, Well, you know, you, you have a couple houses and neighborhood and you literally drive through, roll down your window and like yell out the window, you know, it’s time to pay your rent. And people come walking down their doors, and you know, with cash wads of cash and checks and all that, and collected that way. And I just looked at I said, that’s a horrible. That’s a huge pain point. And she goes, Oh, yeah, I hate doing it. So, you know, I encourage her, Well, why don’t you try to do something that’s automatic and online and helps people to, you know, pay pay their rent online, because they already pay everything else online. And with the tools that you have, in today’s modern society, you just, there’s just no excuse for having to write a check. There’s no excuse for paying with cash. I mean, it’s really just kind of an old school way of doing it. So with rent collection, I think the three big key components to really high quality rent collection and making sure that you always get paid on time is first starts with tenant screening, you make sure that you collect high quality tenants that have a history of paying their rent on time. But then to make sure that you set up, you know, your consequences in the lease. And so make sure you get that written lease and then tell them what’s going to happen if they, if they fail to meet these requirements, you know, one, they’re going to get a late fee to, you know, you may even get a daily late fee if they’re really late. If it depends on your state laws. Three, you know, you could terminate the lease for you could file an eviction and then win a judgment and then even go after him win collections. And, you know, you can lay this out so that they understand this is what’s going to happen if I don’t pay my rent. So I think that’s important because I think a lot of times, tenants will pay their rent late or not at all because they think they can get away with it. Right.
Jason Hartman 37:57
I think I think that’s a good point. They don’t understand the consequences. And, you know, unfortunately, less educated people, usually the lower end of the economic spectrum, you know, they, they don’t think of these consequences, you know, they don’t really, you know, that’s why so many people have bad credit and, you know, they got to pay ridiculous, usurious interest rates. Part of that is, of course, the vast bankster conspiracy, which did that to people on purpose, you know, in the last meltdown, but that subject would take 45 minutes to discuss. So, you know, and I have a feeling you might even agree with me, you know, but that notwithstanding just generally being responsible and paying your bills, you know, people don’t understand what this gonna haunt me, you know, it’s gonna it’s and if you lay that out for people, you know, most of them are gonna want to do what’s gonna protect their future. Right,
Lucas Hall 38:51
right. Right, exactly. So if you can get past those two points, you can pick quality tenants and then make sure that they understand the consequence. And you have to be able to back them up. So like, you can’t just like blab this off, you have to know. Okay, this is how I would file an eviction and you have to be familiar with those, those rules in your county. But then I think the third and the most important method before you move on though, sorry to interrupt you, before you get to that last one. Just cozy help with any of that filing evictions or anything there. Oh, filing eviction? No. each county rule is different, in different different Yeah, they have different processes, and every state has rules and then each county has their own rules. And so it’s just a it’s a beast to try to get into. Sure.
Jason Hartman 39:34
So here’s the thing. I do want people to know, though, that in every area, there are attorneys that operate like a mill, okay, an assembly line, and they process you know, sometimes hundreds or even thousands of these, you know, unlawful detainers they’re called mere forcible entries or eviction notices, whatever, you know, in in all these different counties around the US, so you Really, it’s not that expensive. You just go to one of these attorneys that does it as an assembly line as a mill. And it’ll be anywhere from, you know, three to $600. Probably. And they just do the whole thing. They’ll even get the judgment for you. And this is what kills me. I find that so many landlords, they don’t pursue the judgment, the post eviction judgment, they just, they, they, they let them go. They say things like, Oh, well, you know, they’re just a deadbeat. They don’t have any money. You know, you can’t get blood out of a turnip. Well, you know what, folks wake up because that turn up won’t always be a turn up, okay, they’re gonna come into money in their life at some point, probably, and they’re gonna have the money to pay you. And just because they’re, you know, they’re they’re broke today doesn’t mean they’re going to be that way in five years or 10 years. Okay. And you can renew these judgments indefinitely. Yeah, I pretty. I think that may be changing jurisdictions a little bit, but I’m pretty sure you can just keep renewing them, you know, as soon as they’re going to want to buy car and get an auto loan or get a home loan and buy a house, or maybe even rent another property, you know that that lender is going to say, Hey, you got to clear up your judgment before I’m gonna before I’m gonna loan to you, you know, that happens all the time. And you’ll suddenly get paid off with interest with really nice interest, by the way, right?
Lucas Hall 41:21
And one of the things that’s always been a real incentive when explaining it to tenants is if I tell them that, hey, listen, if I even if I can’t collect on you now, because you don’t have a stable job, or the money, you know, it’s, it’s good for a long time and I will get an order to garnish your wages at your next real employer. So that that whole aspect of them, you know, getting a new job with a new employer and they’re trying to impress this new person to work their way up. And then I come in with some sort of an order saying they have to, you know, I’m garnishing the wages and if they pay me first, every month, that’s an embarrassment to them. They don’t, you know, they don’t care about the car representative at the Toyota dealership, but they do care about their employer knowing that they don’t have a good handle on their finances. So usually if I threaten that they get really worried and then it’s just like, Okay, well, here’s your money, you know, they come up with this somehow and then the judgments over so that that, to me has always been the most successful in terms of incentivizing them to pay.
Jason Hartman 42:22
Okay, all right, good. Good. What else anything else we got to wrap up here, Lucas, but just, you know, a couple final points. Okay.
Lucas Hall 42:29
I think the third and final point to flawless rent collection is just to make it automatic, you know, put it online use something like cozy or use cozy and cozy is completely free to process rent. And so basically, you have, you’ve got your cozy landlord account, and you tell us where you want the money to go to. And then the tenant tells us where they want the money to come out of and it just gets processed, like clockwork every month. There’s no no extra fees involved. There’s no worry about things being late because they can set up recurring automatic payments. And if you do that most tenants will actually thank you because they don’t have to think about rent. You know, that’s a that’ll blow your mind right? If a tenant goes up to you says, Hey, thanks for taking my money. Yeah, right, exactly. Just make it easy for them. Number one. So that’s, that’s good, good stuff. What websites do you want to give out? We talked about cozy Of course, do you want to give out landlord ology shirts, landlord ology.com. And that’s the site that I founded has a tremendous amount of information and resources available. It’s all free. We don’t make any money off it. It’s our way to give back to the community in which we belong. You know, we were talking about evictions earlier and one company that I I like and I don’t have any affiliate relationship with or anything, but it’s called click notices.com. I’ve talked with their CEO while and what they do is, you can sign up for an account with them and if you need to file an eviction, you do it through their website and they have partnerships with all of these, you know, eviction mill, attorneys that you were describing, and They will literally, you know, file it through one of them, and they’ll represent you in court. And so you could you could file an eviction and get it all handled through the site for a small amount of money. And you never would have to show up, you know, you could just get it all done. And it tracks that process, kind of like getting a mortgage, and you can see the process going through. So that’s one of the more tech savvy ways to file an eviction. And luckily, I’ve not had to use it, will they literally just go and post the three day notice on the door for you and stuff like that? You know, you’d have to look at their website. I’m not sure. Like I said, I haven’t haven’t used it, but I know that they will file that eviction from start to finish at once, probably once the lease has been terminated. So I don’t I don’t think they actually post the notice because that’s they start kind of after that process. But it just seems like an easy, you know, kind of web to a modern technology way to do it.
Jason Hartman 44:49
Yeah. Yeah, I agree. I agree. You know, it is I always like to say it’s an amazing time to be alive. Because of technology. It’s just it really is an amazing time to be alive, but It’s an amazing time to be a landlord to. There are some really great tools out there. And thank you for being behind one of them. We really like your tools. So keep up the good work. And thanks for being on the show. Lucas. Thank you, Jason. It was a pleasure.
Lucas Hall 45:15
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