Driving NOI: Transforming Property Management with Ancillary Services and Bulk Internet | Patrick Osman

A Podcast | Patrick Osman

Pete Neubig: Welcome, everybody, to the NARPM Radio Podcast. I'm your host, Pete Neubig, the voice of NARPM. Today we have Patrick Osman, CEO and co-founder of Utility Valet, which is a national resident services company transforming how property managers deliver internet, utilities, and essential services at scale. I've known Pat for a few years now, and here's something I did not know. So Patrick is a serial entrepreneur who launched several startups across multiple industries and has led business ventures internationally. I did know that, Pat. However, he also is the author of two books on entrepreneurship and personal growth, where he shares lessons on risk resilience and building long-term wealth. He learned something new every day, even about your buddies that you hang out, have cigars with, travel with. I learned something new. Pat, welcome in, buddy.

Patrick Osman: Thank you so much, man. I really appreciate that. Obviously, we've got our own podcast, Between Two Hats. I'm not wearing my cowboy hat today. But you just kill it with the intros, bro. Just straight Pete Neubig, facts, dropping bombs. I appreciate that, brother. Thank you so much.

Pete Neubig: All right. So before we get into the heavy-hitting stuff that I have some questions for you about you being an author and your books, let's talk a little bit about Utility Valet. So for somebody who's listening, how does Utility Valet help property managers and talk a little bit about how it benefits property managers, basically?

Patrick Osman: Utility Valet benefits property managers by providing assistance to their residents when it comes to their residents moving into a property. So what does that do? That allows the residents to stop communicating with their team and allows them to communicate with us. So we take pressure off the move-in process, number one. Number two, they make revenue from the ability to move in with us. And number three, data collection. We collect and verify the residents' data, which means their electricity account numbers, their water account numbers, their gas account numbers. We get that information from the resident, or if we connected ourselves, we get it ourselves. And we share that data in real time with the management company. What that prevents is it prevents residents from talking shit and setting up their own utilities and lying and submitting a fake account number. And in three months, the management company says, hey, we got a bill for water. And some residents are cheeky, right? And they don't set up their utilities. So we found that out three months into starting this company.

Pete Neubig: So basically, I own a property management firm. I got a bunch of SFR. I got a bunch of family, a bunch of rentals. And when I have applications, somebody's going to move into that property. They no longer have to call my staff and say, what's the local water company? What's the local electric company? What's the, what's the, what's the, what's the? Your guys take that, and then you basically help them set up all of their internet and electric and water and gas and all that stuff?

Patrick Osman: We do all that, correct. Our business is not brand new. Our industry is not brand new. Our industry is about 11 years old. Industry has been servicing property management for about nine years. So a lot of the property management industry know about our services, know about our industry, sorry. They may not know about Utility Valet. Utility Valet is a growing brand, been around for four years. But what makes us different is basically, I guess, the culture, the culture of Utility Valet, the three and a half thousand reviews that we have. And of course, we're notorious for being the leading revenue share provider. We have the highest revenue share in the industry.

Pete Neubig: Now, is there, I know there's a lot of talk about keeping the utilities on in property managers' names. So like a lot of, some of the property managers I'm speaking to are like, instead of turning on and turning off utilities, they just keep it in their name. What do you, what's your thoughts on that? Is there a product for that, or are you guys working on something?

Patrick Osman: That's cool. I like it. I think it makes sense. Right? I decrease my labor costs if that happens. So whenever a PM comes to me and says, everything's in my name, I'm like, perfect. No worries. Let's say this isn't business. And they say, but what are you going to do about utilities? Well, what we're going to do is not going to do utilities, but we're going to explain the process to your resident to decrease ambiguity. Right? So what happens is that your resident is moving into the property. Once they pay their lease, there's a gap between the deposit and the move-in date. That one, two week gap, they don't know the process of how utilities works. Right? So basically we come in and we facilitate a conversation with them, three to five minute conversation that explains how the move-in process works with that property management company. And on top of that, we connect their internet there. And then on top of that, we connect their home security there and then. So it becomes an efficiency play. There's revenue. And we explain the process.

Pete Neubig: And it's still less calls to my staff because I don't have to explain the property. Okay.

Patrick Osman: It's still less calls. Exactly.

Pete Neubig: All right. So we kind of got that out of the way. Is there anything that's coming down the pipeline that's new with UV that we need to let people know here?

Patrick Osman: Utility Valet is a growing company. We are spending a lot of money on technology. Spend a lot of money on infrastructure, which is really cool. Bring on board some major people from the industry to join our C-level, to join management. We, eight months ago, received an investment from Phil Yee, who is his ex head of ancillary services at Invitation Homes. He invested into our RVP. He joined as chief commercial officer, which was a really big benefit to us. We launched our own resident value package, which is a direct competitor to a residence benefits package. So we've got our own insurance now. We've got our own air filter program. We've got our own pest control. We've got our own resident rewards and credit building. We have all that package now. Basically, we want to give property management companies choice, right? Have some options, right? So we're coming in. We're challenging the financial aspect of that. We're coming in, you know, 30, 40, 50% cheaper, which is pretty cool. And we're just trying to beef up the industry. And the other big thing that we're working on is bulk internet. Bulk internet across the SFR industry is huge. We're paying some large upfront fees as well for specific markets, Tampa, Connecticut, some doors in Florida, some doors in Dallas. If you've got portfolios there, we can pay you guys up to $35 to $45 per door upfront, right? For the whole portfolio. So there's some exciting things we're working on.

Pete Neubig: Bulk internet. What does that actually, what does that mean? What does, right?

Patrick Osman: You've got a portfolio of 500 doors, right? Okay. You say to me, Pat, I want to make some money on these doors. How do I do it? I say, okay, what we're going to do is we're going to deploy bulk internet across your whole portfolio. What we've done is we've gone to AT&T, Spectrum, Xfinity, Frontier, and all the other major ISPs. We've negotiated an agreement with them. And we said, listen, we promise to give you 5,000 doors or 10,000 doors in the next 12 months. Give me a wholesale rate. They sell internet to me for 35 bucks, 30 bucks. I sell it to you for $45 or $40. You sell it to the resident for $55. You now sell one gig internet to your resident for $10 to $15 less than the retail value of one gig. Your resident gets one gig internet discounted. You're making $15. Resident doesn't have to deal with anything when they move into a property. Internet's there waiting for them.

Pete Neubig: And then if it's vacant, though, I'm guessing the manager just pays for it. And because they're making so much money, some. Okay.

Patrick Osman: Some. Some. Some doors you're going to pay for it. Some doors you won't pay for it. Depends. Depends on the internet service provider.

Pete Neubig: All right. So let's talk a little bit about this.

Patrick Osman: Are you going to increase NOI? I like, I appreciate the direction of property managers and the way they're thinking. I appreciate that they're proactive in regards to driving NOI. I mean, that's how we grow a business, right? We grow a business by scaling financial efficiency, increasing our margins and getting market share and just getting more, more, more staff, more expenses, more income, more accounts, more properties, more, just more. Right. So that's what we're trying to do. We're trying to drive more revenue for that property management company. The reason why we want to do that is because brother, we're making money along the way, we're a part of that. That's how we eat through their doors. So how can we further drive value to the point where the value is not questionable? And there's a delta in it for all of us.

Pete Neubig: It makes a lot of sense, right? So it's like, hey, if we eat, everybody eats. That's it. All right. So let me ask you about your books, right? So when you were writing the mindset book, tell me what did you find? A lot of people in property management that I speak to, they have a hard time going from operator to owner, right? So they roll their sleeves up, they're operators, they grow their business, but they have a hard time elevating and becoming that mindset of owner. What are some of the things that they can do to shift their mindset?

Patrick Osman: All right. So from operator to owner is an interesting conversation, okay? Because when you go from operator to owner, as an operator, infrastructure is built. You come in and you run the existing, right? As an owner, you build the infrastructure. And as an operator, you're going to have the experience of what the owner does. So there's a few things that you need to remember that's going to keep your business afloat. Number one, initiative. If you don't drive it, no one will. So if you don't say get up and find your job every day is to actively find problems. Actively. So you've got to actively find gaps in your process, actively find gaps in your business, in your product, in your staff. If you don't actively find those gaps, that's the best way to do it. Because if you don't actively find those gaps, it's going to come one day where there's just going to be a kerfuffle of problems and you're going to say, shit, man, how do I deal with this? Right? So as an owner, there's a lot of surprises that come our way. And we need to make sure that we're proactive and driving initiative to make sure that we eliminate whatever problems can come our way, number one. Number two, just driving that initiative to further grow the business because the growth of the company is governed by the founder's energy and the founder's motives. And if the founder's motives and the founder's energy are not gone home, how are the rest of the staff going to behave? The rest of the staff will directly replicate.

Pete Neubig: So kind of a couple of things. One is don't stick your head in the sand when there's a problem, right? Be thankful for that problem. And two, if you can, if there is no problems hitting you in the face, go find them, right? There's problems. There's problems in your business. Go find them. And then number two is what is it? The snake dies from the head down. What's the old saying? But basically, you're the head of the snake and the body's following you. Or you're kind of the leader there. And you have to be a leader. Now, what if you just don't have a lot of energy? You're not a high I in the DISC profile. You're not super outgoing. And you're more of that, you know, that integrator type deal. Can you still be a good leader in your opinion?

Patrick Osman: I believe that you will connect with certain personalities better than others, right? But for as long as a business needs to drive, right? There's got to be something in you that wakes you up every day. Now, I'm not saying get up and yell in your company every day. You don't have to do that, right? I don't do that, right? But there's got to be some form of momentum driven. Now, that momentum driven can be through your fingers on a keypad. That's momentum. That's your coding, your building. You're building something. As long as you're building, whether it's culture, whether it's brand, whether it's product, whether it's systems, whether it's technology. If you're building, you are driving momentum. Now, priorities and direction of where you're building is a whole separate conversation. Growth and going to the next level, more market share, more business, more accounts, more client acquisition. That's the direction that we want to be going into. Doubling down on product and trying to perfect your product a thousand times can cost you a lot because your running costs are going to eat you alive. The market will eat you alive. Your competitors are going to eat you alive because what cures all? Sales, right? So I've always had the mindset of going into the market at 65% and allowing the market to coach us the other 35% that we need to fix, right? So go in at 65%, have your product at 65% and the market will coach you on what you need to further refine. But go out and get them sales, man. Go out and get them sales. Them sales will give you the cashflow. The cashflow becomes the heartbeat of the entity, not the profit. The cashflow becomes the heartbeat of the entity. And at that point, you can determine direction as to where you want your business to go.

Pete Neubig: Yeah. You know what's funny is, I think I've told this story before, but I'll tell it to you again. When I first started, I had a business coach because I came from the IT world and we started this property management business, me and my business partner. And basically, my business coach didn't talk to me for like a year. He literally just talked to Steve, my business partner, because Steve was in charge of marketing and sales. I was in charge of operations. And he would look at me and he goes, we don't need to figure out operations. We need the phone to ring first and then we need to figure out how to close them. So you need marketing first, right? You need marketing first and the phone to ring, right? And then you need somebody to close it. And then when you have business, then you need to figure out your operations.

Patrick Osman: But- See, I'm in between. I used to be like Steve. I used to be exactly like that. I was very gunslinger, right? I'm the ex-stockbroker. So I get that. But now as a business owner, I don't think like that anymore. I'm in the middle of you two. I'm directly in the middle of you two, where I want a bit of Pete. I want something that's 60%, 70% objection proof, right? It's so good. It's not perfect. I don't want perfect. But I like the tenacity of Steve as well. I want to hit them phones. I want to get the accounts. And then we're going to officially do what? Grow a business.

Pete Neubig: Yeah. If you're listening to your property management company, and you're waiting to have all of your systems in place and your Aptly or your LeadSimple in place, and you have like 10 doors, welcome to my club. I love you. And I think that's great. But however, you will not be in business very long. You need to grow the business first. And then as you grow the business, you start building automation or you hire remote team members.

Patrick Osman: Bro, you don't even have money for Aptly and LeadSimple. That is a nice to have, okay? It's a nice to have, right? Those automations are their investments that you're making your business to drive further efficiency, right? You need doors. You need to go and sell the absolute dream to every owner possible as to how your property management company is going to be different and committed to that specific owner and making their portfolio full at any given time. No vacancies. That's the goal, right? Now, talking about systems and integrations and making the operation better, it's a whole separate conversation that comes once you've- All right, we've said a couple of things there, Pat.

Pete Neubig: First, you said how you're different, not better. I love that, right? As a property manager company, you never want to say you're better than another property manager firm. You want to say you're different. And then two, I love the fact, we said sales solves all problems. We got to get the sales in first and then you can worry about making the operations more efficient, right? The operation is going to be kind of inefficient for a little while as you're growing the business. And then as you hit a specific number of doors or some growth, then you can come back around, fix the operations, reduce the churn, and then you can find it. Because once you have enough business, Pat, right? Then you can squeeze out and you can find other things like Utility Valet. You can implement Utility Valet RVP. If you have five, 10 doors, you really can't do stuff like that, right?

Patrick Osman: I mean, you can, right? But it shouldn't be a focus. It shouldn't be a focus. You want to build a foundation of your company. I think a good number of solid foundation for a PM, I think it's a hundred doors. Like when you get to a hundred doors, I think you've got yourself, you've clearly got sustainable systems. You've clearly got a sustainable CRM. You've clearly got sustainable people. You've clearly got a sustainable culture to get to that point, right? At that point, it's all about now further reinvesting in how to amplify, scale, and grow. Now, I'm not a property management company. I'm not. I've got three doors of my own. I literally got three. I'm building some multi-family right now. I'm increasing my personal real estate portfolio.

Pete Neubig: But just from my- Yeah, but you're just talking like a standard business, right? So a standard business, there's kind of a formula. And I think, you know, like getting the marketing to work, right? You can't polish your sales, you know, scripts when the phone's not ringing. So like if you had to look at step one, you gotta figure out, you gotta think on marketing. Now, I know you are the sales guy. So you might say, Pete, I think sales is first because you have to go out and beat the doors and you can do cold calls and stuff like that. And that's debatable. Like, what do you think? Do you think if I own a business, should I focus on marketing first or sales first?

Patrick Osman: How many businesses have you started?

Pete Neubig: Well, just I guess two, Empire and then VPM. I mean, I've had a couple of apartment complexes and I've had a couple of other, you know, stuff like that.

Patrick Osman: But they were more investments, right? They weren't businesses or investments, right? Let's talk Empire. Walk us through, okay, your first client.

Pete Neubig: It was my first client at Empire. He was in a Lifestyles Unlimited, which is an investment club with us. Found out that we're fixing our problems through this property management. He's like, can you do that for me? And that's how we got our first client. My first client was actually me, right? It was our properties. Okay.

Patrick Osman: Okay. Okay, cool. Okay, so you put your own skin in the game.

Pete Neubig: We became the test bed, right? So we test all the stuff on our property and then, yeah.

Patrick Osman: Yeah. Yeah. Okay. So to answer your question, I believe sales comes first before marketing. And what did you do to get your first client? Did you advertise to him? Or did you indirectly pitch him what you could, you're doing for your own portfolio?

Pete Neubig: Indirectly pitch to him. However, comma, I'll say once we created marketing, you know, once we created a marketing plan and put marketing together, we did get more people like to reach out to us.

Patrick Osman: Yeah, but bro, as a startup, you don't have budget. You need sales first to get budget. You then reinvest into marketing to then scout the company, right? But like you got it, bro. I remember I've had 11 startups. I've had 13 startups, 11 failed, right? And I'll tell you right now, every startup that I had budget was tight and marketing dollars is the biggest, biggest, biggest slippery dip. Because brother, if that goes down south, it can eat up your whole bank account. So as a startup, you grind it out from the garage. Just like all the major companies, Disney, Amazon, and all the big boys, right? Apple, Microsoft all started from the garage, right? And it was all building product and then going out and somehow getting sales through word of mouth and building that. Your cost per lead is like a zero bucks. It's your time. Whatever value that is at the time is your burn rate. So investing into marketing, I'm personally extensively against investing into marketing. If it's a small round that you've raised or if it's a bootstrap company, I would prefer to go and go boots on the ground and get two, three, four sales to get some cashflow. At that point, you're going to invest into the marketing machine.

Pete Neubig: Right, okay. Now you're a good sales person and you have that dynamic personality. Now for that personality type, I tend to agree with you, right? Like, hey, just go out and pound pavement, right? Go talk to the realtors. If you're starting a property management firm, go to BNI, go to investment clubs, all that good stuff. Now, if you don't like being in front of people and you're kind of more of an introvert, whatever, hiring that salesperson could be just as expensive as investing in a marketing machine, yeah?

Patrick Osman: Depends on your compensation plan. Depends on how much of a closer you are. You don't have to be a loud person to be a great closer. Steve Jobs wasn't a loud person. He was a great closer, right? So, you know, it depends on compensation, bro. What about if you're going to negotiate with... As a matter of fact, if you're an introvert, you need an extrovert somewhere in your business, right? So if you're an introvert and you've got a startup and you find an extrovert who can help you grow and scale, perhaps there's a negotiation that can take place there, right? Perhaps there's a get me one, two, three, and you get X percent of equity. Get me, you know what I mean? There's a negotiation for everything, Pete. That introvert is clearly a builder, right? But okay, I'm more of a builder with people than I am with product. However, I built our CRM. I built our product. I negotiated our contracts. I did all that. My C in my personality is low. There's enough in there in the tank to get me up to par. There's enough in there. Now, once I had sales and money, I invested into the right stuff to amplify what I built. So I suggest the opposite of that for introverts.

Pete Neubig: All right, I'm going to pivot the conversation because AI is kind of on everybody's mind these days. So I'm going to start asking all my clients, like all my... Sorry, not clients. All of my... You are my client.

Patrick Osman: I am your client.

Pete Neubig: And you are also my guest. So all my guests about AI. Where do you see AI? I mean, it's amazing what's going on. Where do you see it in like six months, a year? And how is it going to affect... How do you see it affecting the world? Property management in general, but just the world, man. I mean, it's fascinating what's going on out here.

Patrick Osman: It's crazy. If you've got minimal skill, your job's been taken out. So be prepared because machine learning is coming for you. You need to upskill yourself effective immediately. If you're an admin or if you're in auto processing or something like that, it's time for you to start investing into more, something else. Okay? We need you to start getting into people management, strategy, product development, things that AI won't be as good at, right? Now, I personally am a really big fan of AI. I freaking love it. It's just, it's catapulting growth. It's just absolutely making everything so much easier and faster. I love it. I can't tell you as a business owner how much. I love AI, right? I love, it excites me. It sounds screwed up, but it excites me that I get to substitute people with AI because I get to fast track specific processes. Now, am I excited to fire them? No. Am I going to fire them? Yes. Am I going to find a place in my business for them before I try to fire them? Yes. But if I can't, I cannot. It is not my fault. It's a competitive world. And you got to make sure that you show up and that you be competitive. Because if you're not, you're going to get whacked out.

Pete Neubig: I'm listening to some of these doom and gloomers. All right.

Patrick Osman: What happened? These are doom and gloomers. What are they saying? Wait, is that it? Is that it?

Pete Neubig: No, no. This is, you're my first one to ask, buddy. So like, yeah, but like, you just read a lot of stuff. There's just a lot of chatter going out there, right? So what's going to happen when, let's call it 10 years from now. And luckily I'm old enough and I'm going to be riding out into the sunset here. But AI takes on so many jobs here in the States. What are these people going to do, brother? Yep. So is the government going to have to like tax these AI trillion billion, you know, multi-trillion dollar companies to subsidize housing?

Patrick Osman: Yeah. Yeah. That's a whole other conversation. There's going to be a huge play. There's going to be a huge play. You know what? I think all the companies that are going to deploy AI to substitute all the headcount are definitely going to have to pay a fee of some sort, right? It's going to be some form of society.

Pete Neubig: A lot of people are saying like AI is very similar to like the internet boom. I'm old enough to understand the internet boom. Hell, I was in the middle of it. I was an IT guy back then. And you know, the internet, the doom and gloomers said the internet's taken all the jobs. And what it did is it created millions and millions of jobs. I don't know if I see that with this boom. I do see some jobs get created and really good, handsomely paying jobs. I don't see millions of jobs being created. I see millions of jobs getting replaced with machines. And I'll even go even further. You know, at some point, everybody's going to have a little robot in their house. And they're not going to need the maintenance guy to come over to do the AC because they'll just tell the robot, fix the AC. Tell the robot, cut the grass. Tell the robot, oh, hey, there's a light bulb that's out. The robot just gets a sensor, goes in and just does the light bulb. Like, what the heck? You know, like, so like, I'm just seeing this futuristic world that I'm like, man, now I know what my 80 year old mom feels like when she has to do a DocuSign.

Patrick Osman: I get it. I'm excited for it, bro. And you know what, man? I think we're going to enter into the world. The market will force the world to become more intelligent. It will push you and it will basically give you an ultimatum. Join the party or don't. Because back in the days, in the 80s and the 90s, when we would graduate from school and we would choose, oh, I want to be an accountant or I want to be a pilot or I want to be whatever it is, a fireman, whatever it is, the options are not going to be the same. They're just not. You got to face reality. You know, there's always going to have to be man to manage. But brother, we need some skill, some serious skill to make sure that we manage.

Pete Neubig: It's going to be really interesting. I'm trying to think how AI really is property management. You know, is there an instance that happens where all of a sudden people don't need property managers anymore? I personally don't see in the next few years, but I think over time, you know, like if these softwares get better and somebody says, I don't need a property manager, I'll just manage it myself. And, you know, I can go find X, Y, and Z and I want to do it myself. I just don't know. I mean, you know, I used to be a property manager. I used to be a property manager. Yeah.

Patrick Osman: Used to be what? Empire. Yeah. So your perspective here right now in this conversation is extensively valid, right? So what does a property management company, how do they affiliate themselves with the property? Let's just go through the journey, right? Throughout move in, there's a lot of communication with the resident. Throughout move out, there's communication with the resident. Whenever there's a problem, there's communication with the resident.

Pete Neubig: Or eviction, yep.

Patrick Osman: Yes. Yes, okay. Outside of those three, when are you interacting with the resident?

Pete Neubig: You're not.

Patrick Osman: Okay. So we've identified the three main communication channels, right? Move in, move out, and when there's an issue.

Pete Neubig: You can add a fourth one, a 3.5, I guess, where annual inspections, there's some communication with the resident and inspect the property.

Patrick Osman: Okay.

Pete Neubig: Yeah.

Patrick Osman: Okay, okay. So let's add a 3.5. Out of the three and a half right there, I can tell you right now this second that move-ins can be completely automated with no communication. Okay. I can guarantee you that. Move-out is not fully automated because man has to come in and approve it. Fair. Maintenance and conflict resolution is not automated today. So and then the annual inspection is May's manual. So out of the 3.5, 100% can be automated.

Pete Neubig: I think so. I think so.

Patrick Osman: Is that fair or not?

Pete Neubig: Yeah, I think, but I want to do a caveat here, Pat. I think everything that can be automated, there is always going to need a human because somebody's always going to what I call zero out. They're going to want to hit the zero and talk to a human person. There's going to be a percentage of people that want to do that. So yes, but they're getting smaller and smaller as they get younger.

Patrick Osman: They're going to die, bro. In 20 years, they're gone.

Pete Neubig: Damn, I've only got 20 years left, buddy. I was hoping I had like 30. I was shooting for 30. I do smoke a lot of cigars.

Patrick Osman: I had a client talk to us today and they were like, I like using Utility Valet, but we would appreciate a fully hands-off approach. And I said, look, we can do that for you. No problem. And I said, why would you appreciate that? She said, because our clients are all students. And they don't like talking on the phone to anyone. They want all technology. I said, it makes total sense. So decreasing communication and increasing technology usage is where the market- It's been like that for two, three, four decades now.

Pete Neubig: I mean, ever since we got out of the industrial age, right? Buddy, it's always good talking to you, man. Pat, if somebody says, hey, I want to get those big fat refund checks or whatever you call them. What do you call them?

Patrick Osman: You want to make some money.

Pete Neubig: And then I want to reach out to Utility Valet. What's the best way to get in touch with you guys?

Patrick Osman: Yeah. You're going to send me an email personally. I'll respond to you personally, all right? patrick@utilityvalet.io. That's my email. You reach out to me directly. You want to go on our website, check out our website, go to the contact us page. Someone from our team will get it and we'll reach out to you.

Pete Neubig: Awesome. And if you're listening to this and you're not a NARPM member, give them a call at 800-782-3452 or go to NARPM, narpm.org. And if you are looking for remote team members, because somebody's going to need to manage your AI, might as well have a remote team member do it. Give me an email at pete@vpmsolutions.com. Pat, thanks so much for being here, buddy.

Patrick Osman: Appreciate you, brother.