After you’ve acquired a property, what comes next? Ideally, you have to get solid property management in there, but even then, as history has shown, so much can still go wrong, so you have to look for solutions. Monick Halm speaks to Dana Dunford, the CEO of Hemlane. Monick and Dana dive into property management solutions that will make the work you’re doing that much easier. If you’re interested in more efficient and effective ways to go about property management, this conversation is definitely for you!
Listen to the podcast here:
Property Management Solutions – Interview With Dana Dunford
We have a guest that has an incredible solution to help real estate investors. She is a real estate investor as well. For many real estate investors, property management is one of the toughest parts of owning property. One of the big questions people ask themselves is, “Should I self-manage or not? Can I afford outside property management or not?” Our guest has an interesting online solution to help people better manage long-term rentals. Our guest Dana Dunford is the CEO of Hemlane, a technology-enabled property management platform. She’s a strong advocate of purchasing properties anywhere, as the best investments are not typically in your backyard.
I relate to that living in Los Angeles but investing in six other states. It’s not the easiest market to invest in, so she created this platform. In 2018, she was named one of the Top 20 Women Leaders and Influencers in Commercial Real Estate Tech. Dana has previously worked at Apple on their worldwide financial planning and analysis team and Nest, the home technology company, acquired by Google for $3.2 billion in business development. She has a lot of experience in tech. She received her MBA from Harvard Business School. She’s a smarty too. I’m so happy to have her here. Welcome, Dana.
Thanks so much, Monick for having me on the show.
I’m thrilled to have you. You have this property management tool and you’re also a real estate investor, so let me start with a real estate investing. How did you get started in real estate investing?
How I got started in real estate investing was my brother-in-law, who had started investing. He had vacation rentals out in the Caribbean and had said, “Do you want to get involved more with real estate investing or learn about it?” At that time, I was like many people in Silicon Valley, where we were so technology-focused that I had no experience in learning or exploring real estate investing, and what it had to offer. One of the things that I was quick to learn was spreadsheets. They’re everything at the beginning. Depending on the class of the property, you have to look at that. I was doing business, financial planning, and analysis at Apple. I love the concept of having a spreadsheet but more importantly, having a physical asset.
At that time, I had invested in Facebook when it had IPO. I lost all of that money within four hours of the IPO. I learned that maybe it’s a physical asset where I can put the numbers. It’s transparent to me on how much I am purchasing something for and what am I likely to get in rent. It was much easier to put those numbers together versus looking at the stock market and trying to get numbers that I can’t predict the future on. I felt real estate was a place where you could predict the future and that essentially led me to the management where the management is so crucial to determine the future of your cashflow. It’s something that is an afterthought but what I see about the smartest investors is they see that as a huge asset of how to manage property more effectively.
Property management can make or break your investment. You started off with your brother-in-law, who had these vacation rentals in the Caribbean. What made you go from there into property management?Property management can make or break your investments. Click To Tweet
He had properties in Denver. I was talking to him about getting involved. At the time, I was living in San Francisco and he was with my sister in San Francisco. At that time, it was, “How do we manage these properties?” The first question that came up was, “Potentially, could we do it on our own? We don’t have a large portfolio. Can we manage it remotely?” At that time, we didn’t think San Francisco was a good investment when we were looking at purchase to rent ratios. It did not make sense to us. What we learned was, we could use the broker on the ground to do some of the leasings and for the management, we started doing remotely, but we saw a lot of hiccups and a lot of time and mistakes spent on it. One of the things that became one of our biggest pains, and when I see a lot of pain, I realized that we weren’t the only ones without pain and where there’s pain, there’s an opportunity.
He sees this opportunity and you go on. Complete the story. What happens then? You see this opportunity and you go, “Let me start the business around this.”
I heard other owners, agents, and managers, especially property managers, constantly complaining about unreasonable tenants or dealing with maintenance calls as they’re sitting down at 6:00 PM on Sunday night for family dinner. There were some trends that I saw throughout. One of the most prominent was about 70% of landlords were self-managing. That’s where they were trying to take control of it and from that perspective, I said, “If everyone’s going to self-manage, how do we make this an opportunity where you will elevate these landlords from running an operationally intensive business to becoming a more professional real estate investor where it’s almost treated like a business?”
The things that they do well, they can do themselves and the business that they don’t do well they can outsource. In most cases, that’s outsourcing the maintenance calls, and having someone who is an expert at maintenance, dealing with service professionals, pushing back on quotes and having someone else do that other than you. From the perspective of accounting, a lot of times like collecting the rents, I want control over that. I don’t want to give that to someone else. Putting together the puzzle pieces of saying, “What is wrong with the industry in the sense that people are having pain with it and how do you solve that by combining technology and subject matter experts to be able to help you with the property management process?”
What exactly did you come up with?
Hemlane is a property management platform. I think about it like 70% software doing the work and 30% of people local support or someone picking up your phone calls and doing the maintenance for you. We’ve divided into those two and provided flexibility where you can take your maintenance calls and route them to yourself or you can outsource that. We’ve provided flexibility through the entire process to advocate building your team and property management even if you only have one rental unit, which many of our clients have. When you look at it, it’s somewhere in the middle. There’s do it yourself where you do everything yourself and there’s a full-service management, where you have a full-service property manager. We are in the middle. Most of our clients are landlords who never considered a full-service manager.
Now that there is another option out there, they suddenly say, “I can still control and have the rents go to me. I can still approve of every maintenance work order. This is fantastic. Sign me up.” It provides some of this reassurance that they have someone who has their back. Also, the best technology built-in. For example, on the leasing side, a lot of people don’t understand what SEO is. For those reading who don’t understand SEO, SEO is Search Engine Optimization. It’s essentially when I type something into Google, it’s the algorithms that determine who is number 1, 2 or 3, etc. search results. If you’re a tenant, you might say, “Rental property in Los Angeles,” and you might take that into the Google search results.
What shows up first is going to be Zillow. What if another tenant types in, “Apartments in Los Angeles,” Apartment List might show up or Aparments.com, those are typically the two that do. In the case of being a real estate investor, you don’t want to ever lose out on having the best tenants. We will advertise your property on over 40 rental listing websites. You don’t have to think about that. We’ll do that for you. Responding to tenants is another one. If a tenant is interested in your rental property during the leasing, they’re only going to inquire about an average of five rental units. They’re only going to see three of them, and they’re going to make a decision. If you take 24 hours to respond, which most people do, because you’re busy, you have another job, out meeting with clients and other people within the industry, you don’t have time to sit on your phone, email and respond.
We’ll do that for you. We’ll send out your showing calendar. For every step, that’s the beginning of it. That’s starting with the leasing. For every step in the process, we try to say, “What did we wish we had that we were having to do manually?” We’d put those best practices directly into the system for you. You don’t have to do it. It’s even prescreening the tenants before they’re able to schedule that showing. Everything like that is built into the process to make it where you don’t have to know what’s complex on the back end but it’s simple for the user. You don’t have to know what’s going on. You have to know the best practices are built into place for you.
When you were creating this, I’m assuming you’re thinking about what are some of the challenges or mistakes that landlords that are self-managing do. What are some of the mistakes you see owners making in leasing other properties or in the day-to-day operation of their properties?
The biggest one, hands down, is letting emotion impact decisions. Everyone’s a person. You should treat your residents and tenants as if they’re your customer. At the same time, emotions get involved. Tenants will text you and say, “I can’t pay rent because this circumstance and something happened to me. It’s going to be five days late.” Depending on what that is like, a death in the family, as a first-time real estate investor, but more so as a human being, you want to say, “Don’t worry about it. You can pay me in five days.”
There is an emotion and it’s not referring back to the lease that says, “Rent is due on the 1st or 5th of the month,” or whatever you have your late. See us and you’re going to have a late fee on that day. By either waving those late fees or saying, “Yes, you can pay me in the future,” you’re essentially setting up a precedent that you’re their bank and you’re lending that debt of $1,200 for five days to them. Rather than saying, “For the lease agreement, this is what it is. Please seek out that capital from your family, friends, boyfriend, girlfriend, or whoever it may be.”
The biggest thing is emotions. That’s where setting up LLC can help because if you have it under a property name, suddenly your full name is taken off to the pitcher, not only from a liability perspective but also from a communication perspective. In other words, you’re a member of the LLC. If you can defer as much to the legally binding contract, it’s going to set you up for so much success where you say, “It’s not emotional. It’s what we’ve agreed to from a contract perspective and we’re not going to stray from that.” Having a lease that’s concrete and sticking to the guidelines of it will help you so much throughout real estate investing and make it where your property management goes so much smoother.
I have a friend who is a property manager in Dallas. He’s an investor. He owns lots of properties himself and owns a property management company with his brother. He explained to me why he doesn’t manage his own. His brother will manage his, and he will manage his brother’s because he found himself doing those things. We’re nice people and empathetic. Somebody would say, “I lost my job or something happened.” He would say, “You can pay later or next month.” He realized that it was one tenant who said, “My mother passed away. Can I pay late?” He allowed that person to pay late and he was sending flowers. When he went into his books, he realized that this was the third time he sent flowers for the same person’s mother, who died. That’s eighteen months. That’s when he said, “Maybe I shouldn’t be doing this myself. I need somebody else. He’s a bad guy.”By allowing tenants to pay late, you’re setting a precedent that you are your tenants’ bank that they can lean on. Click To Tweet
I’ve never heard of sending the flowers and doing it multiple times. That is a good property management story that I’ll have to remember.
I can see how that’s a big mistake that people make. We’re nice and it’s easy when it’s your own money to go, “I’ll let you go this time.” When you’re doing it for somebody else or somebody is doing it for you, that’s much less likely to happen.
Especially if you’re with a professional. A professional property manager knows that and that sets that precedent upfront. It’s helpful for the tenants too. The second you stray from that, then the tenants continue to make up stories. That’s an outrageous one, your example, but they can make up stories and not say that all the stories are made up. Some of them are true but it takes the lease and says, “We’re not following the lease any longer.” Once you don’t follow the legally binding contracts, it’s like, “How many days late for the next one 15 or 60 days?” You’re suddenly in this guessing game and become a debt collector. No one wins in that situation.
I always like to ask our guests this in terms of your own investing. What was the biggest mistake that you’ve made and what did you learn from it?
Coming from the technology industry and Silicon Valley, people from here, to some extent, suffer from this as well. It’s a little bit of a tax brat. We think that technology will solve everything and I learned the hard way on that one. For example, meeting with service professionals. Yes, you can go online and see their reviews and try to vet them as much through technology but that’s not everything. You need to talk to them on the phone. Scheduling even calls with service professionals, they used to think, “I can send out the work order and that’s it.” For small, simple things, absolutely but in a lot of cases, you have to physically get on the phone with them. For example, lint in the dryer and knowing that, “Do I need a handyman to take the dryer out?”
I’ve made mistakes where maintenance costs were so much and it could have been so little had we gotten on the phone because I sent someone out and realized, “That wasn’t the person to send out,” or, “They can’t do the work because there’s something else in the way.” I think there’s that component of saying that in real estate, you still have the human component and talking to those subject matter experts, whether it’s yourself or someone else. You can’t do everything through technology. There’s still that component of humans and them being smarter than a lot of the technology, especially in this space.
The other question is, I asked what your biggest mistake is because I feel we learn so much more from our mistakes than we do from when things are smooth sailing. On the flip side, what are you proud of?
I’m proud of starting out with $0 in my bank after leaving Business School and growing Hemlane into becoming a leader in the property management space for real estate investors. We were named by FinancesOnline as the 2018 Top User Experience Award. I will tell you that that first year is difficult, especially when you don’t have money but it was all worth it in the end. I am proud of starting with $0 in the bank and going out and diving into the deep end, starting a tech company.
To what do you attribute your success?
As far as success when I arrived at Apple, I remember my first day in the office and I received this plain thick piece of paper. On it said, “People don’t come here to swim in the shallow end. They come here to dive into the deep end. Welcome to Apple.” Not only do I love swimming because my husband’s a professional swimmer, but I take that to heart. All of my success has been attributed to hard work and perseverance. It’s not that I ever took the easy road with anything and never did I have all the resources but it was that hard work and dedication that brought me to where I am now.
What advice do you have for a woman who’s starting out in real estate investing?
I will say is, the first year is going to be difficult. Especially in this climate now, you’re going to find that it’s a seller’s market, not a buyer’s market in most areas. You’re going to get no and going to get outbid. You may potentially be saying, “I thought it was going to be making a lot of cashflow. I thought this was going to be easy.” Real estate investing is not a get rich quick strategy, especially if you’re doing buy and hold, which I highly recommend. You’re going to make a lot of mistakes in your first year but keep at it. This is what I told my husband, my first year going into it, “You’re meant to be the breadwinner of the family,” that’s traditionally how it is. It was great because by telling him that I could take that first year to build the company. In my case and hopefully everyone else’s case, you can build your empire and surprise everyone with what you’ve built.
What do you wish you’d known at the beginning that you now know?
What I wish I had known at the beginning is how important it is to have someone like you, Monick, who’s an advisor, a consultant, and mentor because of that drive and perseverance and also starting with no money. I never got help. I never asked for help. I learned that the hard way. I would say that you learn so much better by finding the right mentor. There’s going to be a lot of people out there who say, “I can help mentor and consult you,” but finding the person is so important to help make that first year less burdensome than it usually is or has been, at least in my experience.The first year of being an investor is always the most difficult, especially as a woman. Click To Tweet
That’s impressive that you were able to do this without any advisors, consultants, and mentors.
I now have them.
It makes you feel better. They help you collapse timeframes and avoid costly mistakes. You learn from them and you’re able to leapfrog from where they are. I found that to be helpful, too. That’s great advice. I am a big advocate of highlighting women doing cool things. You, being a founder of this incredible company, which is a real estate, is a male-dominated field, and tech is a male-dominated field. I’m sure combining the two is even more so to do it and to do it so well and successfully is super impressive.
That’s what I love about your show as well. You’re bringing all these great women together.
For people who want to know more about Hemlane and you, what’s the best way for them to find out more about you and what you do?
You can reach out to me. I’m better with emails and text messages. It’s [email protected] or you can visit www.Hemlane.com. We typically have a chat in the corner and you can check out what we’re doing there.
It is time for our end of show trinity. In our trinity, I’ll ask you a brag, something you’re celebrating, something that you’re grateful for, gratitude, and a desire. What is your brag? What are you celebrating now?
What we’re celebrating is, our team launched a maintenance feature. I know what you think that this is probably not the sexiest thing to brag about new maintenance but it sure is for our users. It took us a year to build it. We were super excited about this new feature because it’s going to make it from the perspective of being a customer or a service professional. It’s such a better way to collaborate and all of that effort off of our plates and off of real estate investor plates. We’re looking forward to it. We’re having a party here in the office to celebrate it.
That’s a sexy brag. It’s good and awesome. You worked hard. You’re finally launching this feature and that’s going to help a lot of people. What are you grateful for?
I’m grateful for my team and everyone I work with in real estate. It took me so long to reach out to others and build a team. Consultants, advisors, investors, mentors, and my direct team who I see every day here. We have a dog named Bae. She belongs to Ben on our team but now she’s a company dog. I’m thankful for all of them because when you think about what you build and what makes your success, it’s to the people around you. That’s the thing I’m most grateful for.
Last but not least, what’s one thing you desire?
Related to this show, I know there are some phenomenal women reading. If you’re a high quality licensed real estate agent, I’d love to connect with you. I love meeting people who are experts in the industry looking for additional leasing activities for their clients or whatever it may be. I am looking to meet more subject matter experts in the industry and women who are successful. If you’re out there, you have my contact information from it and I’d love to hear from you.
Your desire is to connect with licensed agents.
Licensed real estate agents. We were building out our agent platform but honestly, real estate investors and everyone else are looking to meet you and hear your story as well as some lessons you may have for me, even in your property management as I learn every day something.
Shall your desire be or so much better than you can imagine. If you’re an agent or investor, you can connect with Dana at [email protected] or www.Hemlane.com and you can find out about this cool platform. We didn’t talk about the price but it’s super affordable too. You can find out more about that by going on the website and connecting with her. You can always connect with me always at RealEstateInvestorGoddesses.com. There, you can join our incredible community of women real estate investors and all sorts of other goodies that we have on there for you. That’s it for our show. Thank you so much, Dana. That was amazing. Thanks to you all for reading. Catch us for another amazing Real Estate Investing Goddesses episode. Bye.
Thanks, Monick. Bye.
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