A Podcast | Jason Waggoner
Pete Neubig: [00:00:05] All right, everybody. Well, welcome back to the Farm Radio podcast. And as promised, I have my good buddy, Jason Wagner here in studio. What do you think of my studio wax? I love it. I love it.
Jason Waggoner: [00:00:20] I love it. I never have more fun than anybody with you.
Pete Neubig: [00:00:23] And the studio really is just my study that where I work at. So. So Jay, tell us a little bit about ten reports.com. What do you guys do And yeah tell tell us a little bit about that.
Jason Waggoner: [00:00:35] Yeah tangent reports.com started in 1992 full service background screening so that means we go a little bit deeper than just the credit the criminal and eviction reports that you know that have become a commodity.
Pete Neubig: [00:00:46] Got it. So let's talk a little bit about because because application background screening, however you want to call it, it's it's always a big challenge for for property managers. You've been doing this a long time before tenant reports.com. You were doing this for another firm so you've been in this you personally have been in this business for how many years now?
Jason Waggoner: [00:01:05] About 14.
Pete Neubig: [00:01:06] Years. About 14 years. So what are some of the biggest mistakes that you see people make when they're going about doing the background slash credit screening?
Jason Waggoner: [00:01:17] The biggest mistake And, you know, you would think at this point in time it would it wouldn't be that big of a factor. But your landlords or property managers getting emotionally involved with that applicant story and making a bad decision. I see that across the board. I've taught classes on it and I still see it. I mean, it's one of the things that if you know me and you call me asking advice on a on an applicant, you're going to get a real answer. I'm not a yes person. I'm going to look down through there and ask you, why would you give this person a chance with the risk involved? Or Sure, if you want to take a chance, have an $8,000 deposit. I don't know what to tell you, but to listen to that story, it's like, just apply. We have, you know, processes to treat everybody the same, but you start making those kind of decisions to where you want to get involved with that applicant story. It can it doesn't end well.
Pete Neubig: [00:02:05] So how do we prevent that? Right? So one one of the things that that I was always big on is as I'm always worried about fair housing, especially during the application selection, right? Because to me, that's where that's where you can get sued the most or have a claim against you, so to speak. So what are some of the things that companies can do to prevent fair housing claims and to prevent this? Like, hey, I've been hearing this story, these guys got a 40 credit score and I feel like I should take them, right.
Jason Waggoner: [00:02:38] He just went through a divorce. He's trying to help his.
Pete Neubig: [00:02:41] You're making literally making excuses for him. Right.
Jason Waggoner: [00:02:44] You're talking yourself into a bad decision. But the thing about it is, is whether it's our application or your application, those qualifications should be on the front page. There should be something that tells that person whether or not they would even qualify for your property. They should be able to make that decision for themselves. But also having the policies in House so that if somebody does file discrimination or a fair housing claim or something of that nature, you've got something to show them. Look, everybody's treated the same. Here's what our qualifications are. And, you know, we've done we there's no wrongdoing here.
Pete Neubig: [00:03:17] So make making sure you have good qualifications and then having a policy and a process that you follow over and over that's in.
Jason Waggoner: [00:03:24] Every business, not just property management. We've all taught taught those classes that that's important.
Pete Neubig: [00:03:29] So where So let's talk a little bit about qualifications. What are some of the things that well, for one, can I have different qualifications for different properties?
Jason Waggoner: [00:03:40] I would So if you have HUD properties, it's going to be a different set of qualifications than a gated community.
Pete Neubig: [00:03:45] Got it.
Jason Waggoner: [00:03:46] Okay. So when somebody calls me, that's the first thing I ask them. What type of properties are you leasing? You know, if there is a yeah, if it's if it's a $3,100 a month home.
Pete Neubig: [00:03:56] Versus a $800 a month home, there might be some different qualifications.
Jason Waggoner: [00:04:00] Do your client a favor and protect that home, not not make a willy nilly decisions. So a good.
Pete Neubig: [00:04:05] Rule of thumb then would have like maybe you have certain set of qualifications for maybe A and B homes and another set for C and D homes.
Jason Waggoner: [00:04:11] Right. And you might even have a different application fee, you know, so for the for the a lower income property application, you know, you might charge $30 for a higher one, you might charge $75 because that's your first line of defense in qualifying them no matter where they fall in the in the program. You got to have they got to have some skin in the game.
Pete Neubig: [00:04:33] So what are and then you said qualifications should be on your application. They should also be in your listing. Right? Be on your website and on your website. Okay. So they need to be everywhere, right? So that's so now people know. And then if you are using a firm to answer the phone calls, they need to know what your qualifications are per per property or anything like that. Okay. So what goes into qualifications?
Jason Waggoner: [00:04:58] Um, a lot of people start with the credit score, but the thing about it is, you know, you've got your credit. Your criminal, your eviction searches. Are you running a state search or a national search? You'd be surprised how many people are running state searches and don't even know it. And then, of course, your prior verification. So some people do it, some people don't, but with the current landlord.
Pete Neubig: [00:05:16] Right. So like if if I'm a applicant or a potential applicant and I see the qualifications, so like, for example, like what I'm going for here is like how, what kind of credit score should be in like, you know, qualifications for, you know, a high end property and a low end property and then like, you know, what else should I put in or should I put in like, how much how much money you need to cover for that, for that rent. Do I, you know, criminal. Yeah.
Jason Waggoner: [00:05:46] So you know, it's the credits. A whole bear in itself with credit. A lot of people are. So most things are going to give you a pass fail recommendation now it's not an end all it's not saying that you know our algorithm says this person fails so they fail. No, you need to take it. If you if your programs do that, it's just a recommendation. You need to take a look at the full picture. So what the people will do a lot of times is, let's say from, you know, 302 to 515 fail 515 to 615 conditional 615 and above pass, you know, that doesn't mean that that's an end all. But the thing about it is, is just because the person has a bad credit score doesn't necessarily mean they're a bad renter. You need to look down through those trade lines, which a lot of the, um, a lot of the softwares don't give full trade lines and things like that. So it makes it hard to, to discern.
Pete Neubig: [00:06:42] When you say the software's you mean the, the like the app folios, the buildings of the world where you can it's built in, but they just give you kind of a pass fail.
Jason Waggoner: [00:06:50] Yeah. And there's different levels to that. So you may do the site inspection to where they give you access to full credit reports and I recommend doing that. If you have the option to do that, you should. All they're going to do is come to your home or your office and look at it and say, Yes, this is a real person. They're not pulling up to a McDonald's wi fi and stealing people's credit report. But the thing about it is, is you can look down through their that credit score may be terrible, but it may be because of a bunch of past stuff. So if they're what you'll see on the right hand side is current but was 90 or 90 DL that means they're 90 days delinquent. Now the next 1st May say current, but was 120. That means everything's current now. But at one point it was 120 days late. So if you have a bunch of those on there, but everything's current and as agreed now and you can tell this person went through a divorce or they lost their job or whatever the case may be, they had a rough six months, they had a rough year.
Pete Neubig: [00:07:41] But now but they actually paid everything back.
Jason Waggoner: [00:07:43] Now they're.
Pete Neubig: [00:07:43] Yeah, that shows you that they're actually a pretty.
Jason Waggoner: [00:07:45] Good especially if it says current but was right and they went ahead and made good on all those trade lines but their credit score doesn't necessarily reflect that.
Pete Neubig: [00:07:53] Yet. And what are some of the things you're looking for? That's a great tip, by the way. I actually didn't know that. But what are some of the other things Like, is there like if I don't pay the electric bill but I pay the landlord, right? Like there's like those are things you have to look at, too, right? Yeah.
Jason Waggoner: [00:08:09] I mean, some people don't pay anybody, and some people make sure that even if they're late, they get that stuff caught up. And you can really discern a lot from the credit report. I wish I could go through each one of my clients applications and say, All right, here. And I do that for the first couple until they get the hang of it. But like, here's what you're looking for. And in making this decision.
Pete Neubig: [00:08:29] Yeah, I know. When, when we when we owned our property management firm, the one the main thing we looked at was if credit was poor due to like medical bills we treated, we didn't treat that the same as credit was poor due to not paying any bills or not paying the landlord, owing a.
Jason Waggoner: [00:08:47] Property management.
Pete Neubig: [00:08:47] Owing a property management firm. And so if you had bad credit due to that, we'd put you on what we call the risk mitigation program. And you can go two ways with the risk mitigation program. You could you can as a firm, you can say, well, risk mitigation, meaning I'm going to get double deposit, triple deposit or something like that. What we did instead is we we had like different levels, like so if the credit score was I'm, I don't remember them, so I'm just going to throw numbers out here. Let's just say 550 to 600. Then it was a it was a $750 one time fee that was that was given to the management firm. And then if it was a little bit higher, then it was like a $500 and a little bit higher than it was 250 and it was a little bit higher than it was. Of course. No, no mitigation. And then what we did is we backed it up with, you know, so because that money went to us and then we backed it up with if they didn't if they punched out before the before the the, the lease amount I mean before the lease date, the the release date is one year. Then we would release the property for free. And so we we actually got some numbers on that. And the funny thing was the eviction rate for the risk mitigation was equal to. The risk, the eviction for the non risk mitigation. So there really was an additional risk, even though, you know, you would think there would be, but our numbers proved proved otherwise.
Jason Waggoner: [00:10:13] But in a case where somebody dipped out early or you had to evict, you had funds in there to cover that, it didn't affect your homeowner.
Pete Neubig: [00:10:20] Yeah, I mean, obviously it could, right? You put somebody who's who's high risk and they left, you know, five months in, they have the eviction and we release it for free. But that doesn't mean that the homeowner is happy about it because they, you know, they didn't get the full lease. But the main the main point I'll try to make is we were going to have the same type of risk even if they weren't risk mitigation based on our numbers. Right. You know, and then I had some other people do it a little bit differently where instead of charging the one time upfront, they would actually charge them a monthly fee. Because here's the thing, Jay Right. We all know that rents are going up, right? So let's just say your rent is 1500 bucks or let's call it 2000. Well, they have $2,000 for the first month, $2,000 for for the security deposit. And now you want another $2,000 for double deposit. People just don't have that kind of money. So if you charge them 750. Okay. Or you charge them $75 a month. And so we had some people doing a monthly risk mitigation fee and then if they wanted their credit rerun, right, we would do it through our methods. You can't give me credit karma. You do it through our methods. And then if they did that, then they would, they would then and if their credit went up they would remove them from the, from the. Yeah, yeah, yeah. So what other, what other gotchas that, that you can think of that people are doing. That's that's kind of you know putting the wrong people in play or, or creating some kind of risk for them.
Jason Waggoner: [00:11:48] Yeah. Where the risk that I see are. So if you're a property manager and you're doing employment verifications, you've heard of the work number, everybody's heard of it.
Pete Neubig: [00:11:57] And so what is the work number for for.
Jason Waggoner: [00:12:00] So, so many companies don't want to mess with employment verification. So the work number and there's 3 or 4 that are getting to be larger now that do this. But it's a third party that has a database that whenever you get hired, your company submits your information to them. So if somebody needs an employment verification, you have to go through them. Okay. Well, I think the fee right now is $108. I'd have to look and see what exactly what it's at. But it's expensive. Okay. And so no one does it. It's it's one of those things to where. Okay, send us your pay stubs. So if somebody is trying to get over it.
Pete Neubig: [00:12:32] Or we do it ourselves or we're trying to call the company, and I can tell you from past history, that is what takes the longest to to get verified. And then what happens is you lose other applicants because you're kind of waiting on this one to go through and then or you just say, screw it, we're just going to go ahead. We got the pay stubs. We're going to go ahead and say that they work there. Right.
Jason Waggoner: [00:12:55] And outside of not running a criminal check and renting to a sex offender or a high level drug trafficker or cartel or something like that, the biggest risk is, do they make money? How much money do they make and can they afford this property?
Pete Neubig: [00:13:08] By the way, the cartel guy probably makes enough money. I'm just saying. I would say.
Jason Waggoner: [00:13:12] But what we've seen in those situations where they get a whole house and then they they leave shop and you're sitting there with studs. Yeah. And some grow lights left.
Pete Neubig: [00:13:19] But anyway, so let's talk about that. So let's talk about this work number. So it does it cost me $108 every time I have.
Jason Waggoner: [00:13:26] To call every time. It used to be 60 something. It just kept going up over the last ten years. And so that's the biggest thing. And so one of the reasons that I worked with tenant reports was because they have the only end to that. So it solves a huge pain point. But that's the biggest thing is the employer.
Pete Neubig: [00:13:41] So meaning if I use tenant reports.com, I can get that and I don't have to pay anything extra.
Jason Waggoner: [00:13:45] It's included in in that package, you know, the what I call the super search. But yeah, the property management super search package and you don't have to pay that. So in the past what we had to do before we had that was on the report, if you remember it says unable to verify a company uses work number this other one you know right and just a huge pain point and so being able to verify employment is one of.
Pete Neubig: [00:14:08] The and how if I call the if I call that work number, how long does it take to verify employment? Is it like the same day is instantly.
Jason Waggoner: [00:14:15] So when we call that when we call the employer and say, you know, we're trying to do a verification on John Doe, here's his information. They give us their code for the work number. We just plug that in and literally button it up within seconds. So where we used to chase them down for, you know, a day or two, three days to try to get an employer to call us back or this or that. I want to say it's it's it's a big number. You know, it's like 60% of verifications for employment can get buttoned up instantly for all the people that feed into that database.
Pete Neubig: [00:14:47] So you you still have to call the employer and then from there somebody has to answer and give you this, Oh, where we use the work number, right. And then and then if you don't have that access, you're kind of sol.
Jason Waggoner: [00:15:02] Everybody has the access. If you want to pay the fee, pay the fee.
Pete Neubig: [00:15:05] Yeah. Okay. All right. So if I don't do that, then somebody in theory could give me fake pay stubs and in theory could say they work somewhere and they really don't. Or could say they make more money than they actually do. And then they really maybe they can't afford the three x rent or the two x rent, which is.
Jason Waggoner: [00:15:23] Something else that we're seeing more of are pay stubs and identity stuff that I mean, it's just these people are getting so good with it. I mean, there's been cases where they had driver's license, Social Security number, and we're just sitting there like, look, both of you have everything that you would need. There's fraud here going on. We got to move on to the next applicant. Sorry y'all figured out because if you remember when you had one with Empire happen, that was when and we tried. You know, it's like, What? Let's catch these guys. And, well, we found out that it takes 28, you know, 27 days to even get a detective assigned to that case. And so it's not like you can string an applicant along while the property is sitting vacant. It just doesn't it doesn't work. We tried three.
Pete Neubig: [00:16:06] Times. Best thing is to cut, cut and run cut ties.
Jason Waggoner: [00:16:09] There's fraud been detected and in most cases you can tell who the real person is. But in a couple of those cases, it was so good that we're like, We don't know which one of you is real. So real. Right. So, so now I'll deal with that. If you want to file a criminal complaint, then please do that because that's the only way this is going to get resolved now. But we got to move on now.
Pete Neubig: [00:16:28] Could that be a fair housing case against you or could that be some kind of case? But or you could back that up saying we there's there's fraud and we're not sure who's who's fraud.
Jason Waggoner: [00:16:37] And when it comes down to identity theft, you know, there's we haven't done anything but taking application from somebody. Right.
Pete Neubig: [00:16:44] So and so is this something like again, I know a lot of people use the software, the software, property management softwares have a lot of stuff built in. Right. So talk to me a little bit about what are the because it's the positives are it's built in. It's it's one somebody enters their information one time. It's you know, there's no double entry and I hit a button and it just works. So that's the positives. So what's the negatives of using something that's built in?
Jason Waggoner: [00:17:14] All of that. I mean, just the amount of fraud with technology and it's only going to get worse.
Pete Neubig: [00:17:18] So fraud, so fraud detection, automation.
Jason Waggoner: [00:17:21] When there's not a human intervention involved, it just leaves room for so much error. I mean, everybody's trying to make things better, but who do you think can can skim by those? It's the actual real criminals, the ones that know they're the.
Pete Neubig: [00:17:36] Ones that are looking for this type of solution that you offer, like where it's just it's just automated.
Jason Waggoner: [00:17:43] Criminal history, for instance. It's the ones that know if they change their date of birth or if they change their their name to a different variation, you they know that you could very well miss their criminal history. So it's being able to to look through the report. So for instance like what we do is and I was doing a demo the other day with a walking somebody through their first report, and there were literally like 13 variations of this person's name. So on that one, we lose because we run a criminal report on all 13 of those. Oh, wow. Typically it's going to be 2 or 3, you know, a maiden name, a married name, a nickname. You know, you may have a Robert that goes by Robbie or Bobby or Bob. See how they can get really, you know, depending on what name that person's used or what they used on the application. If their government name on the ID is Sandra and they're putting down Sandy, you know, there could be you know, there's no criminal history on Sandy Smith Right. But there might be on history on Sandra Smith So right. All those factors matter in or all those factors.
Pete Neubig: [00:18:45] Which you don't you wouldn't even look at that like that automated. Very correct. Okay. So there's variations there. So let's talk a little bit about, you know, anything about the disparate. Yeah, what's it called?
Jason Waggoner: [00:18:58] It's needed. Disparate impact.
Pete Neubig: [00:19:00] Disparate impact. So can you talk can you talk a little bit about that?
Jason Waggoner: [00:19:03] Sure can. And what's happened there is our country. I mean, it's just facts. Now that we incarcerate more people than the rest of the world combined. And it's very sad. And I don't know the exact number on that, but, you know, it's high on that's mostly minorities.
Pete Neubig: [00:19:21] Most of them are minorities. Right.
Jason Waggoner: [00:19:23] So and it was you know, it's it's I watched a there was a video the other day about this guy and he was he was at a gas station and had this crew. And he was asking them all, you know, how much time did you do? And one of them is like, man, I did 17 years. I did 21 years. I did 13 years. And then he was like, and look at them all out here working. They were doing a logistics, transportation type services and all doing great. But what I took from that was that's something that if you're not a minority, that's something that you haven't dealt with, is everybody in your community has.
Pete Neubig: [00:19:56] Been incarcerated.
Jason Waggoner: [00:19:57] At some point, right? You think about it from a child. So when they come out and let's so what happens is, is they come out and they apply for a job and that job runs just a criminal report off the top and and just gets out everybody that's had criminal history. Right. That's what they're trying to prevent because this person might have been out of prison ten years, had no problems, has a great track record, but you wouldn't even get to know them because they had a marijuana charge that most people would have done six, you know, six months of probation, but they got three years of prison, of hard time prison. Wow. You know, and.
Pete Neubig: [00:20:30] So so basically what that means in our language is you can't just have a blanket statement. No, no felonies anymore.
Jason Waggoner: [00:20:38] Not with criminal history. It's not. It's and you shouldn't you know, it's not a bad thing. It's actually a good thing because you're going to miss out on a lot of good applicants.
Pete Neubig: [00:20:47] What are what are some what are some guidelines that you would recommend that I put in my qualifications because I can't say no felons? Well, but I don't want somebody who's just out last 30 days either. Right.
Jason Waggoner: [00:20:57] It's not guidelines that I recommend. It's guidelines that Fair Housing and EEOC and people like that recommend. Okay.
Pete Neubig: [00:21:03] And what are they.
Jason Waggoner: [00:21:04] Not having a blanket policy on criminal history And they're even they're even sending that over into credit nowadays to where they're saying don't have a blanket policy on credit. Take a look at it. Let's see what's going on there.
Pete Neubig: [00:21:15] I mean, that's just that's just a I mean, I hate the fact that, you know, they want us to here's the here's the issue that I have with this. Right. No blanket policies. But then if you make the wrong decision and then somebody puts a fair housing claim against you. Right. Because I don't like making I don't like a lot of gray area. Right. Right. Because now all of a sudden, I don't know who or who not. Right? So I run. I'm a big first come, first serve guy. And we could talk about running all that all the applications at once. Matter of fact, I've done a couple of hot topics on it and that's my biggest ones. People blast me on that stuff. But with that being said, you know, we're all scared of the government because once the government gets involved in your business like it is just it's so time intensive and it costs a lot of flipping money, right? Meanwhile, the government wants us to make these decisions, but yet then they turn around. And because, you know, the government speaks out of both sides of their mouth, Right. So so is there like, okay, so I can't say no felons and I'm okay with that. Right. But that's. It does mean I don't. I don't have to take. What is it? Drug dealers.
Jason Waggoner: [00:22:17] Well, you don't have to take, you know, anything. You still get to make that decision. But where they where they want you to look at that decision is and there's certain states that have already implemented this. And that means that you're going to offer the property or you're going to offer the job and then run the background check. So the background check is the very last portion of it. So, you know, you've given this person an opportunity to go through the application hiring process. We love you, but.
Pete Neubig: [00:22:42] Our our process for property managers, we run the credit criminal. We do everything all at once, depending.
Jason Waggoner: [00:22:50] On what state you're in. We do in Texas, yes. But depending on what state some of these other listeners are in, they may have to run that background check very last after they've offered the property.
Pete Neubig: [00:23:00] Wow.
Jason Waggoner: [00:23:00] That way. That way. We've offered you the property. We love you now. Everything's contingent upon your criminal history. So. Okay. You had a hiccup eight years ago. I've already known you. Now you're going to we're going to go ahead and rent to you as opposed to just at the beginning of the process saying, oh, you have criminal history. Well, you're out.
Pete Neubig: [00:23:15] Yeah, we used to I think at Empire we our statement was no felons over the last five years or seven years or something like that. So if you were clean for five years now. Yeah.
Jason Waggoner: [00:23:26] And it's the same way with bankruptcy. You know, there's a grace period in there too, where a lot of landlords aren't going to rent to anybody that had a bankruptcy within the last two years, five years, whatever your policy dictates. And that's the reason it's.
Pete Neubig: [00:23:38] But that's something that you should put in your qualifications to is a bankruptcy clause. Yes.
Jason Waggoner: [00:23:43] Okay. Yes. And any of that stuff helps them, you know, but and so criminal history, the way I explain it to to my clients anyway, is on that front page. Just let them know, hey, if you have criminal history, it's a case by case basis, let us know. We're going to run a check. We're going to you know, we're going to find out. We want to we want you to apply. If that's the only thing holding you back and you think you might qualify. Other than that, call us. Let us know. We'll make a we'll make a case by case basis to where in the past we had to have those blanket policies that said we don't rent to felons or we don't rent to.
Pete Neubig: [00:24:15] Well, we don't do Section eight, right? Like, that's another one that that was a blanket statement that. Can you still have that blanket statement? I know in Texas you can.
Jason Waggoner: [00:24:21] But yeah, I mean, it's up to you as a landlord if you want to adopt that program.
Pete Neubig: [00:24:27] I always tell people, if you don't want to do Section eight, instead of doing we don't do Section eight, like you can say case by case. But let's put it this way. If you're on Section eight, the chances of you having good credit. Right. Or making the the the amount, you know, making enough salary to cover to cover your two X or three x.
Jason Waggoner: [00:24:45] I've seen it both ways. I've seen people have great success with Section eight and then I've seen people that it you know, it was really hard on their business. And once they got everything lined out to where they were getting paid correctly, I mean, I cleaned out, you know, during 2009 through 2011, did clean outs for the government and getting paid from them sometimes can be.
Pete Neubig: [00:25:04] Took a little while. Yeah. Yeah. I have my I have my opinions on section eight that I'll leave for a for a hot topic one of these days. Maybe I'll actually maybe I'll do a hot topic on that next next one.
Jason Waggoner: [00:25:17] So back to the topic disparate impact. It eliminates a lot of that. It's not something that people should worry about. You know, look at that and structure your business so that you're not so that you're not discriminating against minorities just because they had you know, they went to prison in their early 20s and they're 35 now. Don't hold that against them. You know, my son's a minority and I hope these things that come down the pipeline like this will help him as an adult to to not have to deal with things like that.
Pete Neubig: [00:25:45] Yeah. Yeah. Or well, the funny thing is just out of jail. But I guess if you're a minority, you kind of got a kind of got a target on your back and you're.
Jason Waggoner: [00:25:53] There picking on people. I mean, you can look at our numbers and it's absolutely atrocious what we've done in this country. We can't prison systems and mainly private prison systems. That's a whole nother topic.
Pete Neubig: [00:26:03] Oh, yeah. Moneymakers. You gotta they need, they need clients, they need clients.
Jason Waggoner: [00:26:07] Those for profit prisons and they fill them up. That affects our our community, you know?
Pete Neubig: [00:26:13] All right. So we talked we talked a little bit about where you put your qualifications. We talked a little bit about disparate impact. We talked a little bit about how to read the credit reports or anything else on the credit report that we should look at.
Jason Waggoner: [00:26:24] Um, a lot of times that employment can be cross-referenced on the credit report. The social Security number can be cross-referenced on the credit report, things like that. When it comes to identity, I know there's a lot of different companies trying to put things together to to cure this, but it's you at the property management level when you get these reports back, doing your due diligence and all of that. If you care, the property managers that call me and we go through their process and sometimes I'm amazed. I'm like, Wow, you are an anomaly. And this is the reason your properties have done so well. Now let's get that eviction rate down to even less than 1% and which which I love doing. I love helping property managers take that rate and just plummet it. Because that's the thing about it. For the owners, for the business, it's the only way we get paid is if you put people in there that can pay the rent.
Pete Neubig: [00:27:10] That's right. That's right. Absolutely. So okay, so where where do you fall on? You know, I notice your business and you make money when you run apps, but where do you fall on the first come, first serve versus I'm going to run all the apps for a property and then make the best decision that I think would be would be most beneficial to the to the owner.
Jason Waggoner: [00:27:32] Well so so the the the big difference is there are okay so I'm a I'm a first come first serve.
Pete Neubig: [00:27:41] Wow. I didn't see that coming. You throw me A32 slider and I was waiting for the fastball.
Jason Waggoner: [00:27:46] But yeah, first come, first qualified move on. And the thing about it is, is when people apply, that's your structure either has to be like that first come, first serve. And I haven't taken these other people's money yet.
Pete Neubig: [00:27:59] Why do you like first come first serve.
Jason Waggoner: [00:28:00] Because it just if you do it that way and you haven't taken the people behind them their money and you haven't charged them yet, it just keeps the Yelp reviews down. It just keeps the it just keeps everybody in check as far as look. So what.
Pete Neubig: [00:28:14] Do you what do you say to the people that say, well, we have a few douchery responsibility to our owners and we want to run all the credit and criminal.
Jason Waggoner: [00:28:25] Say, wonderful. If you want to do that, then what's going to happen is what they usually do is set a date. So like a week from now, we're going to cut it off. Anybody can apply from now until then. So then I end up with 20 applications. We run them all and we pick the best one and nobody gets their money back. So that's that's okay if you want to do it that way, totally fine. You know, as long as your state and your city and everything.
Pete Neubig: [00:28:47] So my, my, my.
Jason Waggoner: [00:28:49] If you can't go back and forth.
Pete Neubig: [00:28:51] Okay. So my opinion is that if I do that right, let's say I had ten people and I select one obviously, and nine other people don't get their money back and I select the white couple. And there was a Hispanic couple that didn't get it that qualified. Right. But the white couple just had a little bit better credit, a little bit, maybe a little bit more money. Yeah, I feel that they have a potential to put a fair housing claim against you.
Jason Waggoner: [00:29:19] And even if you win.
Pete Neubig: [00:29:21] It cost you money, you still.
Jason Waggoner: [00:29:22] Had to deal with.
Pete Neubig: [00:29:23] It. So if I just did the first come, first serve and everybody else gets their application back, I never run the application. And they they qualify based on our qualifications because the qualifications to me is what is how we protect the owner. Right. It's not the top of the best. If they pass these qualifications, then they're good enough for the property. So why am I looking for another set of qualifications? So that's that's kind of my defense to most.
Jason Waggoner: [00:29:51] Of these credit reports. I mean, Trans Union, Smart Moves and Experian Connect. There's a couple of them that are still soft hits. But when you use a real company and you're getting access to detailed credit reports, it's going to be a hard hit. And that's not a bad thing. But what it is, is all those ten people now have a hard hit on their credit report, which drops.
Pete Neubig: [00:30:08] Their credit down a little bit, a couple of.
Jason Waggoner: [00:30:10] Points, especially if they're having to go apply somewhere else and get another hard hit. They may have just gotten a raise or they're moving. They may be getting a car that's going to be another hard hit. And so all of those factors. But whichever way you're going to do it, put it in your policy, don't flip flop. Make sure if you're running all of them, run all of them. If you're doing first come, first serve, do first, come, first serve, because you start differentiating from that policy and you can't prove your process, that's where you'll lose a fair housing or a discrimination claim pretty quickly in the court.
Pete Neubig: [00:30:40] So most property management firms, they they might use virtual assistants from VPN solutions, let's just say, to run the applications or to answer the phone calls. What are some of the things that you recommend that we do as business owners to prepare our team to make sure that they're not saying anything that's inappropriate or anything like that?
Jason Waggoner: [00:31:05] That's the proper training. I mean, I'm not turning anybody loose on my team until I've worked with them myself. And there needs to be somebody within your company that if you have virtual assistants that they're working with and shadowing. And the other thing with with virtual assistants is making sure that sensitive data isn't leaving our country. You know, they can answer all the phone calls they want. They can process all the things that they want. But now there's processes in place where you can mask socials, mask dates of birth, just to take those precautionary measures before you send something to Mexico or the Philippines or India. You know, and I love virtual assistants. You know, I've I've been a fan of those. I've had my own and absolutely amazing. But yeah, just to make sure that that they're trained properly. I mean that's the only Yeah.
Pete Neubig: [00:31:52] A lot of role playing I would think. And and again again if you have policies and you have a solid procedure. Right. So what does that mean? Well it means every time we list a property, these qualifications go up. If we list a property, these qualifications go up. They go up here, here, here, here and here. You know, when you enter the when we answer and ask about, you know, do you take this, do you take that? You send them to the website. Right. And then, you know, you learn how to answer the top ten questions and you make sure that you don't say anything that can be used against you in the court of law, evidently. Right. Okay.
Jason Waggoner: [00:32:28] Question Stop. Call and ask before you answer and say something that's going to get us all in trouble. Yeah.
Pete Neubig: [00:32:34] And then the other big thing would be look at if you're using the app folios of the world to run your credit and criminal, you may want to look into a tenant reports.com type of solution and put some human interaction there not your team doing it you have the tenant reports.com and in theory you should be able to charge the application fee enough to cover the cost of the tenant reports.com or the or the the the other firms out there.
Jason Waggoner: [00:33:03] I'm glad you brought that up because that comes up a lot and whether you're you know rarely will somebody's cost go up with our program but if it does my biggest thing is the application fee being the first line of defense. And so many landlords, property managers are afraid to charge. And we're talking about houses in most cases that I deal with single family homes. When I rented an apartment while our house was being built, it cost us $125 each to apply. Wow. And $150 admin fee. So we were 300.
Pete Neubig: [00:33:37] That's six. That's almost 600.
Jason Waggoner: [00:33:38] $450 in to apply. Wow. So why are we being so.
Pete Neubig: [00:33:44] Worried about $35? About $25?
Jason Waggoner: [00:33:46] 50. I mean, your application fee, my my best clients charge $75 and up.
Pete Neubig: [00:33:51] Especially if you're doing first come, first serve. Just kidding. I mean, I'm just going to beat this one to death, right? Because then you're not charging the other people because I think one of the one of the big, you know, blockers that that applicants have is I don't want to apply for four houses and get charged four times. It hurts. It hurts bad. You know, at least with the the apartment you're you're applying one time. And you know, because they have so many units that you know you don't you don't have to put in 4 or 5 applications.
Jason Waggoner: [00:34:18] Granted there are people that that rent because they rather rent than buy a home. But for the most part, if somebody is renting, it's because they're in a position they can't afford a down payment on a house. Well, they're having to put deposits down that are just under what a down payment would on a house would be. I mean, they're in a bad position anyway. So yeah, when you're taking somebody's money four different times on a property and they're just trying everything to get approved because they've got kids to put under roof and everything else, it's a very stressful time. So yeah, anything that was always my goal. I'm not into catering, you know, to to people that made bad decisions. But in this case, if they're not even if they're five people deep and you're taking their money and just running their application just to get their application fee and I see this happen. Really? Oh, yeah, Yeah. It's just it's added, you know, we know in property management if, if you, if you buy an investment property and people's perception of this is so far off that don't invest but if you buy an investment property let's say that that property is going to cash flow $275 a month.
Pete Neubig: [00:35:18] So that's a good deal. That's a good deal.
Jason Waggoner: [00:35:20] Yeah. But when you can do things like this and up that, you know, $100, $150 each time a vacancy comes.
Pete Neubig: [00:35:27] Try to get your money back on the vacancy.
Jason Waggoner: [00:35:29] They're trying, you know, and I don't blame them, but it's really hard on these renters out here. These it's not it's.
Pete Neubig: [00:35:35] Not very scrupulous. And the nice thing about the. Members. As you hear as you hear my dog in the background. This is a this is what happens when the studio is in your house, by the way. And we'll see if the team we don't have to cut. I think it's funny. Oh, he's all right. But now I lost my train of thought. But. Oh, yeah. So that's not scrupulous behavior. And most agents won't do that yourself. Landlords might do that. And of course, people from, you know, if you're home, you have a higher you actually have a higher standard than than even just the regular.
Jason Waggoner: [00:36:10] Just for the record, I don't have a problem with that. If you're going to if you do that, do it. Just just put it on your application that your applicants know. We take all applications and pick the most qualified. Let them know that up front.
Pete Neubig: [00:36:23] Right, Right. All right, Jay, we're going to hit a we're going to hit a commercial break real quick and then the lightning Round. Are you ready for it? My favorite. Are you ready for the lightning round? All right. We'll be right back after these messages. All right. Welcome back, everybody. I think we got the dog wrangled in and there's no no more dog barking here. All right, Jay, are you ready for the lightning round? I hope you're ready.
Jason Waggoner: [00:36:49] You never know what I'm saying.
Pete Neubig: [00:36:51] All right. Do you use virtual assistants?
Jason Waggoner: [00:36:55] I have. I don't at the moment, but I have. And I will as soon as I can afford it again.
Pete Neubig: [00:36:59] What is one piece of advice you would give someone who's just starting out in the property management business?
Jason Waggoner: [00:37:07] Get the right mentor. Go through a couple. Meet with a couple and pick the best one for you. But you know what they say. Even Michael Jordan had a coach.
Pete Neubig: [00:37:16] Yeah, that's a great that's a great advice. And again, if you join Northam, there's thousands of mentors right there. And the one thing about Northam is people love to give back. Does Pineapple belong on pizza?
Jason Waggoner: [00:37:26] Absolutely not. Never.
Pete Neubig: [00:37:30] All right. I knew I liked you for a reason. What was your first job?
Jason Waggoner: [00:37:35] My first job was digging ditches at 12 years old. There was a guy down the street from me that had a dozer and backhoe business, and I walked down there and asked him what I could do, and he said, I'll put you to work for $2 an hour. And I said, I'll take it.
Pete Neubig: [00:37:48] I'm glad he owned that business, not and he wasn't part of the Mafia and had you digging ditches. I would ask for a little bit more money than $2. I never asked what.
Jason Waggoner: [00:37:56] Was going in though.
Pete Neubig: [00:37:59] What is your ideal vacation?
Jason Waggoner: [00:38:01] Um. Tahiti. French Polynesia Islands. I'm going there one of these days.
Pete Neubig: [00:38:07] All right. I thought you were going to tell me it was a monkey farm in Tennessee. That's second inside joke.
Jason Waggoner: [00:38:12] Going back there to.
Pete Neubig: [00:38:13] Uh, what is something most people don't know about you.
Jason Waggoner: [00:38:18] God, he's.
Pete Neubig: [00:38:19] He's. He's. He's like a man of mystery. Just give me one. Don't give me ten.
Jason Waggoner: [00:38:24] Um, that I was a signed recording artist back in the from 2012 to 2015.
Pete Neubig: [00:38:32] Nice. Um. Well, what is one success you had in your life?
Jason Waggoner: [00:38:38] Um. Being just being a father. I mean, that's just where I'm at now with my kids, 16 and 13. I feel like they have a good head on their shoulders and I'm sure we've got some fun years coming. But right now that's been a success in my eyes.
Pete Neubig: [00:38:56] What is one Marvel character you associate with? Oh, I got the character for you.
Jason Waggoner: [00:39:03] I would say Captain America. I don't know.
Pete Neubig: [00:39:06] Wolverine, man.
Jason Waggoner: [00:39:07] Oh, okay. You're like.
Pete Neubig: [00:39:08] Wolverine.
Jason Waggoner: [00:39:09] Don't really follow that stuff. So that's. I wasn't sure.
Pete Neubig: [00:39:11] All right. Should I ask you what Disney character, what Disney princess do you most associate? I'm just.
Jason Waggoner: [00:39:16] Kidding. I'm Elsa all day.
Pete Neubig: [00:39:18] He knows that one right away. Oh, man. You prefer dogs or cats?
Jason Waggoner: [00:39:22] Dogs, Dog.
Pete Neubig: [00:39:23] Guy. All right, J If somebody was moved enough to want to reach out to you, how can they get a hold of you and. And over you over there at ten reports.
Jason Waggoner: [00:39:32] Jason@tenantreports.com and that's t e n and T reports with an S so Jason at tenant reports.com.
Pete Neubig: [00:39:41] Awesome. And if you are looking for virtual assistants because they can help with all aspects of your business give us a try at VPM solutions or you can reach me at Pete at VPM Solutions.com and if you're looking to join them, if you're listening to this and you're not a knaapo member, why not join Call the good folks over there at (800) 782-3452 or give or reach. Go online and you can you can sign up as a member email@example.com.
Jason Waggoner: [00:40:17] I will say one more thing. So I have had experience with virtual assistants and it was very early on when I was getting involved, but you had success with that. And so I came to you and the virtual assistant that we hired, I trained and is now running the company that I left. So I mean, the the potential there, I'm so proud of him. It's, you know, it's amazing. And it.
Pete Neubig: [00:40:39] Really is. They can virtual assistants can can.
Jason Waggoner: [00:40:43] But I'm glad you went to that area because your your your ability to identify talent is is is amazing.So.
Pete Neubig: [00:40:50] All right. Well, I appreciate it. All right, everybody. That's all we got for our show today. Thank you so much. Until next time.