A Podcast | Jeff Doering

Pete Neubig: [00:00:04] Welcome back everybody. And I have Jeff Doering with RIS Insurance. Um, Jeff, thank you so much for being here.

Jeff Doering: [00:00:12] Thank you. Great to be here.

Pete Neubig: [00:00:14] And remind me...

Jeff Doering: [00:00:16] It's Renters Insurance Solutions.

Pete Neubig: [00:00:18] Renters Insurance Solutions.

Jeff Doering: [00:00:18] I don't say it often. We just say RIS but it's Renters Insurance Solutions. So I should say that.

Pete Neubig: [00:00:25] All right. Thank you. Because I always say RIS. And then I'm like well is it RIS insurance or no renters insurance solutions?

Jeff Doering: [00:00:32] I know. I know.

Pete Neubig: [00:00:32] All right. So I did as a record as of this recording, I just got back from Texas style and there was a lot of talk about insurance, especially property managers selling insurance without a license. So can you kind of expand on what you're hearing and what you're seeing out there as far as these property managers and insurance?

Jeff Doering: [00:00:53] Sure, absolutely. Thanks. Um, it's interesting because from our perspective, we're looking at all 50 states. I'm having phone calls with property management companies throughout the week, every week. So I might have a call in Oregon in the next week. It's Vermont, and so we are seeing some trends happening. Of all the insurance boards out there, one of the toughest and most stringent is the actual Texas Department of Insurance. And I think that's the one Brad ran into a little bit that he was discussing at the board at the last meeting here, which was really good. So when you're offering a product, a guarantee and you're taking money in, they they look at that as selling insurance, selling a guarantee. And that's, that's what we're running into right now. And each state is looking at this. They're looking at ancillary fees what they call junk fees as the new term out there in the industry. So we're we're trying to anticipate that we're looking well down the road. We saw this coming, for example, with California. And so last year we started filing with all the the boards. Insurance boards in the nation are animal pet policy, which we now have because California just outlawed, if you want to call it that outlawed mandated that you cannot collect a fee for pets in California. So now we have a insurance product that's filed with the state of California that that protects that owner and helps that PM company not to be blindsided by by this mandate.

Pete Neubig: [00:02:33] Wow. Okay. So...

Jeff Doering: [00:02:34] A lot going on.

Pete Neubig: [00:02:36] So you can't even have a pet fee in the country of California.

Jeff Doering: [00:02:39] That is. And yeah. And to follow up on that, there are seven states that are following California's example. Colorado of course, is one of the examples. And there's I think five more after that coming.

Pete Neubig: [00:02:52] So I know a few years back, um, you know, especially through NARPM. A lot of these property managers mocked me, including at Empire. We had, um, you know, we had like a bundle of products that we called assurances. Right? So not insurance, but assurance. And one was like the pet assurance. So the way this product would work is, you know, you charge a pet fee...

Jeff Doering: [00:03:17] Right.

Pete Neubig: [00:03:17] Instead of pet rent. And then if, if something and that went to the property manager, not the owner, and if something happened to the property, then the property manager would assure that they would, you know, give you up to some, you know, crazy amount of $5,000, $2,500 towards any kind of pet damage like a pet damage assurance. Um, and so you're saying that is considered insurance now in California, or is that considered insurance in most of the states now?

Jeff Doering: [00:03:46] Well, that is I think your your your your that is exactly what Brad's whole discussion was, was, on one hand, it wasn't.

Pete Neubig: [00:03:58] Brad Larsen who just spoke at.

Jeff Doering: [00:04:01] The Texas Style Conference. He made a presentation of what he just went through, and I thought he did a fantastic job of describing what you said between assurance and insurance. So legally, you can offer some of these types of fees. But then when a ruling body, for example, a Department of Insurance looks at it, they they can kind of do what they want. And it's. So here's an example. In Texas, I'm in three counties which probably has 11 or 12 different Justice of the Peace. They're the entry level courts in Texas. I can go to all 11 in 1 day and get a variation of rulings. They're all a little different, and I can argue it all day long, but they're tenant friendly And that's what's happening. They're looking at a property management company taking in a fee and then giving out a guarantee. And the boards are looking at these these insurance boards are looking at this as, hey, you're collecting a premium and paying out insurance and you're not. And so...

Pete Neubig: [00:05:17] You know, even if you were if you went to go get licensed and become an a licensed insurance person, it still has to become a product, right? Like I can't just because...

Jeff Doering: [00:05:26] Exactly.

Pete Neubig: [00:05:26] I'm a licensed insurance person doesn't mean a licensed insurance agent, doesn't mean I can go and just create my own products and sell them. Is that.

Jeff Doering: [00:05:34] That's exactly right. You have to file these. They have to go through the scrutiny of of um, you know, all these different, um, filings with the state. And they, they come back and it costs lots and lots, hundreds of thousands of dollars to file these policies so you can't just go get a license, like you said, down the street, and then start offering a product has to be filed with the state.

Pete Neubig: [00:05:59] So is this the same concept with the eviction protection? Is this kind of the same thing? Pet insurance and eviction protection is the same thing. Or does the eviction protection again? If I have eviction protection, I'm offering if, um, you know, you pay X dollars to get protected...

Jeff Doering: [00:06:16] Yes.

Pete Neubig: [00:06:16] And if somebody is evicted, then I go ahead and I'll pay the rent throughout throughout the eviction or we, you know, we cover X amount of dollars.

Jeff Doering: [00:06:24] It's exactly the same thing. And we offered it for years. And then we were like, wait a minute, they're ruling on this. And in the in the flavor of the ruling, we stopped offering that because you're offering insurance. And so really we just, you know, why put a target on your back. There are ways to do, um, you know, to get the protection you need. We're. We're coming. There's other companies, too. There's that have these out there that are filed with the state. For example, the pet policy. I just, uh, brought up those. Those are filed in all the states with the insurance board. You're not going to get any trouble. You're not going to have, um, you know, a target on your your company's back.

Pete Neubig: [00:07:09] Why do you think that, um, it's, you know, why do you think for one. And we'll talk about Brad Larson's case in particular. But why do you think they they went after him? Like, is this something? Because usually small, you know, even though Brad's kind of a bigger company and I think about 12 or 1500 units, something like that, it's still small potatoes.

Jeff Doering: [00:07:31] Yeah.

Pete Neubig: [00:07:32] And so why do you think all of a sudden property managers have a target on their back?

Jeff Doering: [00:07:37] Uh, it just seems to be in the atmosphere right now federally that has come down over the last few administrations, I believe, has trickled down the attitude or the the message has gone out. And then when you get the coast, New York side and California side all the way up to Washington, um, it has become, you know, almost socialist as, as if the owner is evil. And these mandates, you know, we we all want people to be protected. Of course, we don't want to take advantage of our tenants. But, you know, when I go to these courts, like I was mentioning the JP court, I went in there and this one, uh, judge was ruling in the favor of the tenant. And I walked up there and I said, Your Honor, my owner is two months behind in their mortgage payment, and it's like, they don't even look at that. It's like they think they're dealing with Home Depot that has deep pockets. And I have an investor here that's $4500...

Pete Neubig: [00:08:39] The big bad. The big bad landlord and a big, bad property manager.

Jeff Doering: [00:08:44] Yeah, yeah. So in Brad's case, Brad is unbelievable. He he's a trailblazer. Um, most of the people listening to this podcast have probably benefitted from something Brad has done two years ahead of them, which is I can say that personally. And when you're a trailblazer like that, you eventually get hit on one of them because he's aggressive and he didn't offer one thing, he offer seven things because he's a businessman. He's not a mom and pop. So he's he's always tinkering with the system, right?

Pete Neubig: [00:09:20] Yeah. And look, let's be honest, right. You go into an eviction court, there's there's probably ten lawyers for for these residents and probably 0 to 1 lawyers for for the property manager slash landlord.

Jeff Doering: [00:09:34] Exactly.

Pete Neubig: [00:09:34] And so and I think you said it right. The junk fee stuff been you know, whether somebody, you know, had a bunch of junk fees and like some maybe black or something to kind of push down to. To the mom and pops. But owning property is evil in this country all of a sudden, you know, any kind of fee trying to make any money? Uh, right. It's, um, it's getting more and more difficult, so. All right, so I want to talk about a couple other products, though, um, some of us offer tenant liability. I know, like, um, I won't name names. Appfolio, create. They they actually will put a tenant liability thing on your tenants portal. I don't know if sometimes they don't even ask you if they just. They just kind of pull it and. Yeah, they're selling insurance. Uh, and then other times, um, you know, somebody will put it in like the resident benefit package. So I guess my question, is, is that folio okay to sell that, that tenant liability insurance product? Number one. And number two, how does it does it benefit the property manager more so than like a resident benefits package? Or if the property manager had RIS or some other type of resident solution.

Jeff Doering: [00:10:43] Right. Well, you know, you can you can go through all the hoops and the money and get with companies that'll make it legal to do something like that, to offer it through software. I think the issue is what what are the pain points that a property manager or an owner of a property management company? You know, there's so many challenges with property management on a daily basis for their staff. And so what are the pain points? The pain points we looked at were onboarding. Um, is is just another oh my gosh, another thing another project. Right. So we tried to make it easy an easy pathway for onboarding. So we develop the report in your software. We can do any software we do any training for your staff. We don't want them to have to become programmers to implement this. The second challenge pain point was tracking. I had Yeah, I've got a two guys up in Idaho. These guys are incredible. It's, uh, Andrew and Matt Johnson up there, and I think they're in Boise. These guys are phenomenal. They grew up. They were like four years old. You know, their dad had this company. They're they're you know, well above that now they're in their upper 40s probably or 40s or something. But these guys are so methodical. And they they came in and they wanted they were going to hire someone. And I remember talking to him, yeah, we're going to hire someone to do all the tracking for our insurance. And that was it. I'm like, you're kidding me. So we solved that issue for them because we want to be a solution. So tracking is an issue with insurance. You always hear that people put it in their their PMA and they put it in their lease.

Pete Neubig: [00:12:27] And oh yeah, they, they they pound their chest. Yeah. We make sure that the right has insurance before we...

Jeff Doering: [00:12:32] No one does it.

Pete Neubig: [00:12:33] And I mean, even if they do do it the resident then can, you know, basically cancel insurance two days after they move in and they have no idea.

Jeff Doering: [00:12:41] Yeah. So we do all that for them. And the other stuff I'm mentioning these three pain points. It's onboarding, tracking and submitting a claim. Because whatever company you use, if it's not ours, these are the three things you're looking at. We learn this from our clients saying, hey y'all, we need a better system for submitting a claim. So we have a portal. And this was developed by property managers. So the solution is whatever you're sending to the tenant, the lease, the Z inspector photos, the disposition. You take that same information and submit it in our portal. We want easy easy easy. And that that's the challenge. So that's what you whatever company you're looking at, some of these companies like AppFolio etc., they offer liability protection for the owner, which is become the standard in the industry. They don't have content. Wait till your tenant has to submit a claim because a lightning hit blew out all their electronics and they come to you. Hey, I've got this insurance. You go. No you don't. I'm like, what do you mean? I'm paying this every month? No you don't. You don't have content. That's not fun. So we would not have a product without having content on it.

Pete Neubig: [00:13:56] Got it. So, so the the the AppFolio products of the world or the ones from the software companies typically don't have tenant tenant content, just tenant liability.

Jeff Doering: [00:14:04] Most don't.

Pete Neubig: [00:14:05] Which the tenant liability covers your owner. But yeah, the the resident is kind of a client too. And we're not covering them. And they think they're getting hoodwinked, right. When it's like their stuff's not covered.

Jeff Doering: [00:14:15] They're not happy.

Pete Neubig: [00:14:16] And then another another challenge that I think you're saying is with, with that software product, they can click on it, get the insurance. And you would never know if they actually had it or not as a, as a client, as a property manager?

Jeff Doering: [00:14:32] Right.

Pete Neubig: [00:14:32] Unless I guess it's in the software I would think.

Jeff Doering: [00:14:34] You're right, you're right. They can. One of the things you touched on a little earlier was selling insurance back and forth. You know, should. Can we do that? Can you just go get a license? One of the real differentiators is we add you to our list. Meaning, when you get a policy, we want it in the property managers company name, not in the tenant. So the tenant is not purchasing that. So that that helps for a couple of things. One, you're not taking premium in for the tenant. You're you're purchasing it as a company that keeps how do I get the money.

Pete Neubig: [00:15:14] How do I get the money from the tenant. Because that's going to cost me, right? So how does that.

Jeff Doering: [00:15:19] There's there's different avenues. What a lot of people are doing right now is it's just wrapped in the resident benefit package. So they're collecting it with that or it's just put in their GL codes with the rent. That's another option.

Pete Neubig: [00:15:33] They get a rent charge, and then they get a insurance charged.

Jeff Doering: [00:15:35] Exactly. The other one that we're working on, well, we've already kind of got it, is to keep it absolutely out of your software, to not bring your property manager into it at all. It's a link with your company. The tenant hits it, they're required to and they go and they purchase it there. It's still in our name over here. And it keeps it from going through your software. That's one of those items that's coming down the pipe right now.

Pete Neubig: [00:16:05] And as the tenant moves out or they, you know, when that property is vacant, am I, as the property manager company paying for that insurance when the tenant moves out, or is it based on property or is it based on tenant?

Jeff Doering: [00:16:17] It's based on when the tenant is in the property. When the tenant leaves, there's no need for the policy.

Pete Neubig: [00:16:24] Got it. So the policy gets kind of put on hold for that property. And then two months later, a month later when I re-rent it, then the policy gets back in.

Jeff Doering: [00:16:31] Yes. It starts over again because remember this is tenant liability. If the tenant burned down the kitchen or made, you know, caused a flood...

Pete Neubig: [00:16:39] And its contents too, in this policy's contents too, right?

Jeff Doering: [00:16:42] It's content for the tenant.

Pete Neubig: [00:16:43] Right. And liability for the owner.

Jeff Doering: [00:16:45] Correct.

Pete Neubig: [00:16:47] Right.

Jeff Doering: [00:16:47] That's right.

Pete Neubig: [00:16:48] If the tenant is cooking in the kitchen and they create a fire and it burns, you know.

Jeff Doering: [00:16:53] Yeah.

Pete Neubig: [00:16:54] The kitchen. Um, and that's caused by the tenant. Tenant liability would cover that.

Jeff Doering: [00:16:59] And I'm surprised how often this happens. It's something else.

Pete Neubig: [00:17:03] So you said it's for it's easy to track. So how as a property manager, if I, if I wanted to use RIS, how can I say. All right, I want to make sure that the tenant now they don't have to show me proof of insurance because I just enroll them in it as soon as they move in. And then it's getting charged a monthly fee for it.

Jeff Doering: [00:17:22] Correct. Now, keep in mind one of the things to remember it is state to state. There are some states that this doesn't apply to, but they have the right to say I have my own insurance and bring it in. And our company, at least with us, will verify that you don't. You're that property management company. Then you need to spend time seeing if that insurance is real. We'll do that. You upload it to our portal, we'll verify it. We'll come back to you and say, yeah, they're good to go. They've got their own insurance. That's so few. It's 5 or 6 a year. It's very, you know, but you have to offer it legally.

Pete Neubig: [00:17:55] Got it. Okay. Um, now I cannot if, let's just say we'll just throw a round number here. Let's just say it's $10 a month.

Jeff Doering: [00:18:05] Yeah.

Pete Neubig: [00:18:05] So insurance, $10 a month. As a property manager, I cannot increase that to $11 a month. Is that is that a fair statement like I can't...

Jeff Doering: [00:18:13] That is a fair statement.

Pete Neubig: [00:18:16] Yeah. So this used to be a profit center. Um, and now it's no longer a profit center is.

Jeff Doering: [00:18:21] Well, it is in two different ways, possibly depending on what company. As you mentioned, I've had clients where I'm talking to them and they go, oh, yeah, uh, making up a number that, like you said, $10 and they're charging $19 and that's. You can't do that. You have to file the admin fee in each and every state. For example, just as an example, ours has a $2 admin fee on the renter's insurance. And so you can do that. Now, wrapping it into a package makes it a different deal. But if you're doing a standalone insurance, you cannot make up what you want to do as an add in fee.

Pete Neubig: [00:19:03] Got it. Do you recommend um. And I'm going down a rabbit hole here, but do you recommend the insurance be in a benefit package or do you recommend it be outside and it be its own thing. But what is your best practices?

Jeff Doering: [00:19:18] Best practices is is it works better if it's in the RBP. Our company has already designed a number of solutions for when that day comes that that's not recommended. It is a little more state specific right now. You can do that. I wouldn't absolutely discourage it. It's a very high rate of acceptance for your insurance. Um, but that day is coming when we're going to have to separate that out and we're prepared for that.

Pete Neubig: [00:19:52] Yeah. Look, learning what I learned over at the Texas State chapter and what I'm learning from other property management companies, uh, if it was me, I would probably pull it out and have it separate now. That's just that's just my opinion. Um.

Jeff Doering: [00:20:07] Yup.

Pete Neubig: [00:20:08] Does RIS have kind of a rev share program. Um, or. Yeah, they do that even legal. Like, what's going on these days with that stuff?

Jeff Doering: [00:20:15] Yeah. Um, we have, I call it kind of a trust fund, but it's it's you get a certain percentage of all the premiums you bring in through the year. There's almost no companies doing that. Um, the company who were affiliated, the insurance companies doing this, like 38 years. Um, that's that's how we like to meet with people and go through those kind of numbers. They're they're impressive. I'll say that. And what what you quickly summarize in your head is, wait, why am I not getting this from everybody else? They're not sharing that with me. So the way we look at this is we are going into partnership with someone and we take that very serious, um, that partnership. So what we have is, um, we just have direct access to decision makers. We don't have many layers. It's not like trying to call Google or AppFolio. Et cetera.

Pete Neubig: [00:21:13] What you're gonna get is an AI bot anyway.

Jeff Doering: [00:21:15] That's right. I used to get on with Microsoft and I would call these guys. I couldn't believe I could call them and they would solve issues. Now it's like, you know, calling the moon. So I'm one phone call away from the CEO and president of this thing. And I call them weekly. And we talk, talk through issues because within the guidelines of insurance and that state, there's some flexibility and customization for each company. Um, but there's a significant...

Pete Neubig: [00:21:46] Even a company in California participating in a rev share.

Jeff Doering: [00:21:49] Yes, yes they can. Yeah.

Pete Neubig: [00:21:51] And then how long does it take to get rev share? Because I remember talking to you guys about this. Oh like a year ago. And it's like it does take a little bit of time, right. It's like I think 18 months. It's got to it's was it 18 months or something like a year. It's it's got, it's got to build up the reserves.

Jeff Doering: [00:22:05] Yeah. And you know remember we're in an extremely highly regulated, you know, insurance is just so highly regulated. That's most of the wait time is the requirements of an of an insurance board with their numbers. They have to have certain numbers before you can start dispersing any kind of dividends. Um, but yes, I've seen it as as early as 12 months. It can be up to 18 months in that range. And really, you know, you got to get through a year and see how policies are playing out. And that's company by company. I've had one company go very quickly and others like, we got to wait a while.

Pete Neubig: [00:22:45] Does the tenant liability insurance have anything to do with age or anything, anything to do with the House since its liability on the house or on the residents? Do they have to fill out like any kind of forms and you have to like look at their like, you know, credit score or anything like that?

Jeff Doering: [00:23:00] No. With the tenant legal liability, it's just offered. Just offered.

Pete Neubig: [00:23:06] Okay. All right. So now I'm going to so I'm going to pivot into security deposit alternatives.

Jeff Doering: [00:23:13] Yeah.

Pete Neubig: [00:23:13] So that's a that was a big thing. Um a few years back we had I think it was Obligo Rhino. They kind of made a big splash. They came from family, came into single family, and originally people that were on it loved it. And there seems to be kind of a shift going back into traditional security deposits.

Jeff Doering: [00:23:36] Yeah.

Pete Neubig: [00:23:37] I'm hearing a couple of things. One is, you know, originally when you had a secure deposit alternative, it's like, oh my God, you rent the house so much quicker. Oh my God, you have more control. Oh my God, things are better. And then now you're hearing I don't rent it much more quickly. I don't have as much control. Um, I, it's hard for somebody to move from. Like if somebody lets fires me and goes to another property manager, there's no security deposit to move over. And then I'm even hearing people do more damage to a property that they don't have security deposit in.

Jeff Doering: [00:24:06] Right.

Pete Neubig: [00:24:07] Which I don't know if I believe that. I don't know if the numbers are there to prove that. But, um, and then there are some people that saw that, that there's a lot of money to be made, that they actually created their own security deposit assurance. So I guess the first question is, if I were to do a security deposit alternative, and I wanted to hold all the money in myself and just kind of self-insure, that's not legal anymore. Is that, uh.

Jeff Doering: [00:24:33] Only in a few states?

Pete Neubig: [00:24:34] Okay, so a few states, you can do it.

Jeff Doering: [00:24:36] Very few, but it's very dangerous. Um, you can get hit with hundreds of thousands of dollars, and we've seen that fines. And they can even be referred to the attorney general at that point. It can get serious very quickly. These boards can be like dealing with the IRS. It can get scary very quickly and defending yourself in these. And I'm not making this up. These are real. And it's more than just Brad. They can be anywhere from 30,000 to 100,000 trying to defend yourself depending on how significant the issue is. So yes.

Pete Neubig: [00:25:16] You would recommend either doing traditional security deposit or some type of alternative, some type of alternative using a third party. Uh, and I'm assuming RIS has a, does it have a solution for this? A security deposit alternative?

Jeff Doering: [00:25:31] Yes we do. It's it is actual insurance filed in every state. So we filed we don't just do federal we we filed in all all states. That's very important.

Pete Neubig: [00:25:44] Can you give a high level overview of what the actual how it works versus a traditional deposit?

Jeff Doering: [00:25:49] Yeah. Uh. It's interesting you mentioned, you know, Obligo and Rhino and what we've, what we found as, as along the way. Yes. People were very happy with them because they were paying out like crazy. And then about 18 months ago, close to two years ago, they retracted significantly. And I had more of some of those companies' clients coming to me. Almost. There were barnstorming me because they were having significant issues. The payments changed. So what we found was they were having the staff was having issues with renewing every year. That was a big pain point for the staff on the on those other companies. So we got rid of the renewal. If you if you come into a policy with us, which is an insurance policy, you have to meet a certain, let's say, 600 credit score because you can't have a company come on and gut the system by saying, hey, I'm going to put every high risk tenant on this and you've got 19 evictions in six months. That's not good for anybody. Especially, you'd think for us, but especially your owners. It's terrible for your owners to take on those kind of clients.

Pete Neubig: [00:27:02] Talk a little bit about how the security deposit alternative works. Right. So we all know how the traditional security deposit works, right? Traditional security deposit. It's $2,000 for rent. You get $2,000 security deposit. They do some damage. I write it, you know, they they lose a little bit of that money and then they get the rest. And if they go over, then we, you know, we charge all of, all of that back. And then we come after them, you know, in small claims court the worst or, or just send out letters.

Jeff Doering: [00:27:29] Exactly.

Pete Neubig: [00:27:29] So security deposit alternative, they're not paying any money into the security deposit. They're not given a bunch of money up front for security deposit. So talk a little bit about how that process actually works.

Jeff Doering: [00:27:38] Right. The the concept is that the tenant the resident is is having the, the luxury of not having to to bring up the $2,000 to get in. They're paying a fee to skip that. They're not paying security deposit. They're not paying out a security deposit. It's only a fee. The insurance company is protecting the owner. So the property management company turns around and purchases a policy on behalf of the owner. It's in the property management company's name, not the tenant. You have control over that you're not collecting funds from the tenant for insurance. You're not acting as an insurance agency.

Pete Neubig: [00:28:20] But they are paying an extra fee. Right. Another line item.

Jeff Doering: [00:28:23] They're just paying a fee for the right not to have to put up a security deposit.

Pete Neubig: [00:28:28] Got it.

Jeff Doering: [00:28:29] It's Convenience fee. Yeah.

Pete Neubig: [00:28:30] All right. So it's like a convenient, an inconvenience.

Jeff Doering: [00:28:33] Yeah. An inconvenience fee. Yeah.

Pete Neubig: [00:28:35] Yeah. All right. And then, um, now, in this case, does the resident credit score matter or you said something about the average portfolio. Whatever. Like, does the average age of the home does the average type of the home does the average security deposit, sorry, security. The average resident, like, does that all come into play to get approved, to be part of this security part alternative?

Jeff Doering: [00:29:00] Well, each company, uh, approaches this a little differently at this point. Right now we evaluate each property management company. We're trying to not we don't want to slow down the process basically by adding a bunch of steps to the tenant which slows down your application process. We qualify the company once, and then once the tenant goes through the application process, the company the PM company can offer...

Pete Neubig: [00:29:30] And what are you looking for from the PM company like? Do you have to have a minimum number of of units? Um, did it have to be all like a certain class, certain level of uh, um, uh, rent like like.

Jeff Doering: [00:29:42] Right. Yeah. It's interesting because that's a good question, because we could have what, a model that someone has $800 rent properties. We call that a C level property possibly, or an A level that's 2500 to $3000 in that range. And all three of all all those types of companies can be very profitable with this. Um, what we're looking at, the bottom line is how many evictions are they doing a year? We're looking at how much security deposits they're bringing in and what they're paying out, what they're taking out of the security deposit. So we're doing a risk assessment on the company.

Pete Neubig: [00:30:19] And how do you gather that information? Are you looking at their I guess you have to look at some financials, some books. Do they have this information most of the time?

Jeff Doering: [00:30:26] Yeah, we've made it. We've made it pretty easy. We year one it was like being audited. What we've done now is we just pull a certain number of dispositions from from their company. And in Texas it's a 2-page PDF. And they just drop them in an email and send it to us. And our underwriter looks at the numbers. Very easy. Most people just send them to us, you know, an hour after our phone call.

Pete Neubig: [00:30:53] Oh nice. Okay. Yeah.

Jeff Doering: [00:30:54] And they rate it.

Pete Neubig: [00:30:55] And then in that case is so the benefit to the resident with the security deposit alternative is I don't have to come up with double, triple rent sometimes.

Jeff Doering: [00:31:04] Yup.

Pete Neubig: [00:31:04] Get in. And who has 4 or $5000 sitting around these days? Not many people. Um, the and but but I do pay a smaller fee monthly for the right to do that.

Jeff Doering: [00:31:15] Right.

Pete Neubig: [00:31:16] Now if, um, the the benefit to the, the property management firm and the owner is even though I'm not getting security deposit, I'm getting a monthly fee, that is not I don't have to give that back to the resident. Right. So I don't have to do a security deposit disposition, uh, as far as that's concerned. But I get that fee and I get the in theory, I rent the property quicker because I have more people who have who have the money to to rent that property.

Jeff Doering: [00:31:41] Yeah, that's a tough thing to measure. One of the things that we're seeing as we talk to other clients is that you're the way it's worded as a no security deposit company in your MLS. Your multi listing is that you're I can't verify speed. You're getting more people to apply.

Pete Neubig: [00:32:02] Okay. Which which in turn which in turn would would get you more leads, more applications and more. Yeah. More applications.

Jeff Doering: [00:32:10] Exactly.

Pete Neubig: [00:32:10] Uh, now, tell me, what happens if, uh, when the resident moves out and the property is super clean? There's nothing there. No harm, no foul. I don't have to give anything back to the resident. I'm not sending him anything because there is no security deposit disposition for the resident. Is that correct

Jeff Doering: [00:32:26] Correct. Yep. They're they're off and they don't owe anything.

Pete Neubig: [00:32:30] Let's say the resident leaves it in pretty good condition, but there are some. There's some cleaning that needs to be done. Right. There's some massive cleaning. A few hundred dollars worth of stuff. What does that look like?

Jeff Doering: [00:32:41] Well, just submitting a claim. We have you, uh, submit this exact same information here. Here's what we don't want to do. We don't want to send you a six page insurance form to fill out. And every time you see it, you're like, oh, my gosh, I got to do this again. We you we just designed it to where you've already done what you have to do for the tenant. So you just upload that same information to your portal for us. And in 48 to 72 hours we're ACH-ing you that money.

Pete Neubig: [00:33:12] Got it. Okay. So I'm not putting an official claim. I'm just putting in all the information I normally put for security deposit disposition up in up into the portal. But I'm not doing deposit disposition.

Jeff Doering: [00:33:22] But the paperwork you filled out that you normally do in processing that, that to the owner, to the tenant is, is the claim to us. It's showing us what you're asking for. The tenant is what you're asking for us to pay.

Pete Neubig: [00:33:36] The monthly fee that the tenant pays that's going to RIS in this case, or to the security deposit alternative company, not to the property manager. Is that is that a fair assessment?

Jeff Doering: [00:33:46] Yes. Well, since it's an insurance product, you're being charged for an insurance policy and we're billing you once a month. You can tack on a state by state admin fee. So you are making money on the front end.

Pete Neubig: [00:34:03] Got it.

Jeff Doering: [00:34:04] So we'll bill, we'll pull that report weekly to see who's coming on and going off, which we build into your software for you. You don't have to track it. And then once a month we'll bill you.

Pete Neubig: [00:34:15] Got it. Now what happens if it's like a disaster and it was an eviction. And you know what is it the same concept as if it's just a car?

Jeff Doering: [00:34:25] Yeah, we see those. So let's just use that. Let's say that you had a policy that's $2,500, and they did $5,000 worth of damage. You're going to send all that information to us. We're going to process it and send you the $2,500. And our company, the way we're set up is we will we will do the collections for you and go after them. Now, you are as the property management company. You're responsible for the other half of that 2500 of the five. So we'll do one half. You'll do the other. Now, if you would like for us to do all of it for you. We'll do that in the collections. But that's kind of how that works, just like a traditional security deposit. We even though these rules are outside of your states, uh, you know, like in Texas, 30 days, you have to have to close that out with the tenant. Insurance is not under that requirement, but we train every PM company to do it the exact same way. So there's no confusion.

Pete Neubig: [00:35:30] So just I just want to make sure I hear this. So, um, when a resident gets that quote unquote security deposit alternative, they're still only getting a certain amount. It's not it's not infinity. It's in this case, we'll just use 2500. Right. If they do $5,000 worth of damage, then the insurance company will will cover up to that 2500. And then you're saying that the management company is responsible for the 2500, which really is that we're going to push that back to our owner client.

Jeff Doering: [00:35:56] The owner. Correct.

Pete Neubig: [00:35:57] The owner has to pay the 2500, which then we pay the insurance company. Because the insurance company is paying out the 5000? 

Jeff Doering: [00:36:08] No. Right, right. We're we're going to we're going to go up to our policy limit and that's it.

Pete Neubig: [00:36:13] Got it. So I'm not paying insurance company. I'm paying, I'm paying, I'm getting I'm getting 2500 from the insurance company. But it's a $5,000 bill for the 2500 for the owner to pay the to pay the the the makeready team or the rehab team.

Jeff Doering: [00:36:25] Exactly.

Pete Neubig: [00:36:25] Okay, I got it. Sorry. Sorry, everybody. Um. Everybody's listening. Like. Yeah. Pete, that's the way he was telling you. So I'm.

Jeff Doering: [00:36:31] A no. No, I may not have said it. I go off on on rabbit. So. And I'm just saying that our company helps with the collections. If you like that, we'll do that for you.

Pete Neubig: [00:36:39] Got it. And then you take like, a collection company. Do you take, like, 40%?

Jeff Doering: [00:36:44] No, we don't. Take any percent. We put it back. That's part of what we talked to people back on a on a call about that profit sharing and the trust fund captive is that we'll put that money that we collect back into your account.

Pete Neubig: [00:37:02] Wow. Yeah. You know, what's funny is I think insurance is pretty boring, but I actually can talk to you for another hour on this stuff, because I do find it fascinating, especially where we are today. Um, if you are a property management firm and you're doing self-insurance, definitely called, you have to find out if it's even legal in your state and then, um, if it is great, keep going doing it. If it's not or you want to tweak it, then, you know, talk to Jeff about alternatives. Jeff, we're going to take a quick commercial break. We're going to come back with the the lightning round. And then we'll do our.

Jeff Doering: [00:37:32] Awesome. Thanks

Pete Neubig: [00:37:33] Everybody. We'll be right back.

Jeff Doering: [00:37:34] All right.

Pete Neubig: [00:37:39] All right. Welcome back everybody. All right Jeff Dearing, you are officially on the lightning round. Here we go.

Jeff Doering: [00:37:46] All right.

Pete Neubig: [00:37:47] Now, I know that you, uh, you used to own a PM firm, so I'm going to ask you some questions of when you actually when you and your brother own the PM firm GDAA in Austin. Okay?

Jeff Doering: [00:37:58] Yeah.

Pete Neubig: [00:37:59] What PM software did you guys use?

Jeff Doering: [00:38:01] We were, uh. We're rent manager.

Pete Neubig: [00:38:04] Rent manager? You're the one that's on rent manager. Okay.

Jeff Doering: [00:38:07] You found us.

Pete Neubig: [00:38:09] What is your current or what was your organizational structure when you before you sold the company?

Jeff Doering: [00:38:15] Um, it was departmental where we've shifted more towards, uh, pod system.

Pete Neubig: [00:38:23] How many units did you have when you departmental?

Jeff Doering: [00:38:26] 550.

Pete Neubig: [00:38:28] Okay. And then pods. You went over. Well, I guess what you sold?

Jeff Doering: [00:38:32] 900.

Pete Neubig: [00:38:33] 900. Okay. Awesome. Did you have BDMs?

Jeff Doering: [00:38:36] We didn't until about two years ago.

Pete Neubig: [00:38:41] Got it. Did you use virtual assistants?

Jeff Doering: [00:38:43] Absolutely. That changed our world.

Pete Neubig: [00:38:47] What is one piece of advice you'd give someone just starting out in the PM business?

Jeff Doering: [00:38:53] Uh oh. Gosh. There's a lot under that one.

Pete Neubig: [00:38:55] Insurance?

Jeff Doering: [00:38:56] Yeah. Insurance would be the first. Uh, no. Actually, uh, join NARPM. NARPM, um, is everything. It's it's it's where all the. I can't believe how willing people are to help, um, our our insurance business. I there's so many people I can name that have helped us, um, with, with solid critique. It was just authentic. It was really, really helpful. So NARPM is number one advice. Um, the remote assistance changed our world. We jumped into that probably because of Pete and Brad. Brad Larsen those two people are the ones that come to mind close to eight years ago, seven, eight years ago. Changed our business. Um, even so. So when we hit COVID, everyone was, you know, struggling and we, it was like a speed bump for us because we already had 8 or 9 remotes situated, so it was like a speed bump. Yeah, not in some other areas, but in that one with staff. Um, it was tremendous. But NARPM is probably my number one advice.

Pete Neubig: [00:40:05] Yep. Agreed. Does pineapple belong on pizza?

Jeff Doering: [00:40:09] Oh, man. No, I think it's jalapenos.

Pete Neubig: [00:40:13] Um. Man. After my own heart. What was your first job?

Jeff Doering: [00:40:17] First job? How back do we. How far back do we want to go? Like mowing lawns. When I was ten years old, probably. I remember I had one job again because of my brother when I was like nine, actually. And he had a friend who drove. He had excavators. It was, it was um, uh, big, big tractors and stuff. And he was out there leveling, and he needed someone to spray down the field while he was turning it over with the dust. And I sat out there at nine years old with the hose spraying all day long. Making, like two bucks an hour or something. I loved it.

Pete Neubig: [00:40:52] Oh, man.

Jeff Doering: [00:40:53] Yeah, I loved it.

Pete Neubig: [00:40:54] What is a book you're currently reading or one that has impacted your business or life that you would recommend?

Jeff Doering: [00:41:01] Oh, boy. There's I'm I'm reading some World War Two books like Off the Fire and Fortitude. I forgot the author. I really like that one. I'm reading a political book called Unhuman. I like a lot, uh, very political, but I'm just throwing it out there I am. Um, and you know what? I'm. I have on my list. I guess it's going to have to be today. Because I said this week, what's the pool guy? I want to I want to read that one. Um.

Pete Neubig: [00:41:28] Oh. Marcus Sheridan.

Jeff Doering: [00:41:30] Yeah, yeah.

Pete Neubig: [00:41:31] Mark Sheridan book. Yeah.

Jeff Doering: [00:41:32] I want to read that one. Yeah, yeah.

Pete Neubig: [00:41:34] I'm trying to think what that what the name of the book is.

Jeff Doering: [00:41:36] But answer what they're asking.

Pete Neubig: [00:41:38] They ask. They ask. You answer.

Jeff Doering: [00:41:40] Yeah. That one. You answer. Okay. Yeah. Those are my three. It's...

Pete Neubig: [00:41:43] All right.

Jeff Doering: [00:41:44] I never finish them. It's it takes four months to finish everything, you know. So...

Pete Neubig: [00:41:48] What is, uh, what is one challenge you're currently facing in your business?

Jeff Doering: [00:41:53] Um. Oh, boy. Gosh, I got to go through my list. Let me, let me think. Always. Hiring is always a challenge, you know, because culture is so more important each year when you bring someone in. And we're so blessed. We've had staff for eight and nine years. You're nervous about just plopping someone down in here?

Pete Neubig: [00:42:16] Yeah. Um, I agree with that. I mean...

Jeff Doering: [00:42:18] Hiring.

Pete Neubig: [00:42:18] One person in. Yeah. Alright. And what do you prefer, dogs or cats?

Jeff Doering: [00:42:22] Oh my gosh. Dogs.

Pete Neubig: [00:42:26] All right Jeff. Well, you are out of the lightning round. Um, if somebody wanted to contact you about RIS, what's the best way that they can get information about RIS?

Jeff Doering: [00:42:37] Uh, our website is yourrentersinsurance.com.

Pete Neubig: [00:42:44] Um, it's two Rs, right? Your and then renters insurance?

Jeff Doering: [00:42:47] Yeah. Yeah, we probably should rethink that. Yeah. Um, my email is jeff@yourris.com. yourris.com. So we might revamp that along the way. Make it a little easier.

Pete Neubig: [00:43:08] Alright. And if you're listening to this and you're not part of NARPM, how dare you stop listening and join NARPM. Go to narpm.org. narpm.org or give them a call at (800) 782-3452. And if you want to do the one thing that Jeff said changed his business and get virtual assistants, check us out at vpmsolutions.com or email me direct at pete@vpmsolutions.com. Um, Jeff, thanks so much for being here. All right everybody, until next time.

Jeff Doering: [00:43:38] Thanks I appreciate it. Thank you.