Ep #467 – Chris Wooten – Former Marine on Multifamily Leadership
Chris is in Rod’s Warrior Program and they discuss the two types of leaders
- Trust and verify
- The value of networking
- Putting a team together
- Double down on your strengths – understand your weaknesses
- Strategies for Asset Management
- CPI and CANI
- Loss Control Mitigation
To find out more about our guest, click here.
Full Transcript Below
Ep #467 – Multifamily Leadership with Former Marine Chris Wooten
Rod: Welcome to another edition of How to Build Lifetime Cashflow through Real Estate Investing. I’m Rod Khleif and I am thrilled you’re here. And I’m super excited to interview the gentleman I’m interviewing today, happens to be one of my warriors one of my coaching students and he has just crushed it in this business. He’s up to over 1,800 doors both as a general partner and a limited partner and a retired marine corps officer and really looking forward to this conversation. His name is Chris Wooten. Welcome to the show brother!
Chris: Thanks for having me on Rod. Anything I can do to help educate and help push people along and inspire, I’m all for it! I’d love to give back
Rod: Thank you and love that and that’s why your success because you operate from that place of giving back. So take a minute and tell my listeners your story and then we’ll dig into some of these qualities that I know you can add tremendous value in
Chris: Okay so a little bit about me and how I got started. I knew when I hit 15 years in the marine corps, I was pushing through the ranks at a very fast pace and I only had two ranks left to achieve until I was capped out. So I knew I was gonna go ahead and retire at 20. So I needed to find something that I could do that would give me freedom to move around. So then I started looking into real estate while I was active duty. I did remote property flipping. I really enjoyed that and it’s just team building and project management
Rod: So remote property flipping, you were flipping houses while you were active duty
Chris: Yes sir
Rod: Okay so one of that’s one of the topics we’re going to talk about is how you were able to do that and talk about delegation and leadership but please continue with your story and then we’ll come back to that
Chris: Okay so while I was in the marine corps, I was doing aviation asset management. So doing the remote property flipping, it just fit. Changing the product type but a lot of the same tools and strategies worked. So I was able to do that and then I happened into a multi-family property at while I was still active duty, went ahead and bought it. It was a good deal, good returns. And just took it on as just a bigger asset. After a year I realized the scale and how many things you can do with multi-family that you can’t do in single family. And that’s when the light bulb went off. So as soon as I retired and I had my full day to me, I started focusing solely on multifamily. I sold off all my single family assets and just started building and that was just over two years ago
Rod: Beautiful beautiful and so let’s talk about, let’s start with the leadership. Let’s talk about leadership because I mean you’re from the marine corps, good Lord. It doesn’t get any more leadership driven than that. So let’s talk about that first and yeah let’s start there
Chris: Okay so I’ve been exposed to various kinds of leadership even in the marine corps. You have leaders that want to listen take in and help direct the people to get the task done and then you have the leaders that are more micro managing and they’re more on top of people. And I tend to classify those into two areas of you’re either confident in your team and how you’ve trained your team or you’re not and that’s why you’re micromanaging. So I really talk to anybody that’s learning to do project management, learning to team build, they have to focus on their own foundation and make sure that they’re comfortable with what they’re doing. They need to have enough awareness to be comfortable of what they’re going to be asking the rest of their team to do so that when they’re receiving products from their team, they can actually understand what it is that they’re looking at rather than I get a deliverable from my team member and I’m like I don’t know what I’m looking at here. And that’s okay but you need to have the confidence to go to the team member and say, hey, can you explain this to me and be willing to learn it. If you’re just like, I’m the boss. I know how this works, you’re going, it’s going to cause you to be more micromanaging and in being more micro managing, you typically have uh less productive teams because
Rod: Sure and you have a ceiling as to how far you can go but let me, guys so why are we talking about leadership? Okay we’re talking about leadership because if you’re listening to me, you’re a leader whether you believe it or not because you know to do this business, it’s a team sport. And you’re going to have to lead teams. You’re going to have to lead you know maybe your internal team, your external team you know and if you’re in a family, you’re a leader. So again this is why this topic is so important. So train your team yes start there. Make sure you’ve got at least a basic understanding of the subject matter whatever it is. So that when and but then don’t be so insecure that if you get feedback from one of your team members you don’t understand like you said, you don’t say I’m the boss you say okay help me understand this so that we can move forward and be effective. And you know I’m one of these guys that trusts but verifies. So you know that’s how I do an accountability and maybe you can speak to how you do it Chris
Chris: No and that’s definitely, you have to trust but verify because you can be getting products delivered and potentially the action be a little off course but the report you’re getting makes everything look okay. And that can be the team member not being malicious but they’re definitely cleaning up the report because they know what you want to see. And you’re like, no no okay great and go see what’s actually happening and you don’t have to be on top of them all the time. But it does take a couple of touches to make sure that you understand that the deliverable matches the outcome. And then once you have that full understanding that that outcome and deliverable marry up and that team member is doing things 100% of what you want, then you can release the reins and let them have a little bit more free run
Rod: Yeah no, I agree completely in fact I was just writing myself a note that I want to check. I want to check after some of the guys, I’m actually at an asset as you know that you’re invested in actually here in Louisiana and we’re having a management company changeover and we won’t go into the you know the sorted details of that but you know you actually triggered something for me in this conversation. I end up learning more in these interviews than the people listening. So let’s talk about, I mean it kind of ties in the same thing delegating but do you have a system for that? Let me ask you that. When you assign people things to do, do you have a system in which you do that?
Chris: So for the most part, the system per se is I take a project and then I cut it up into professional skills. I don’t have, I haven’t scaled to the point to where I have employees within the team
Rod: Partners, right
Chris: So I rely on those, yes so I rely on the partners and then I also rely on skilled professionals. So obviously property management does property management, maintenance does maintenance. And there’s still some things that you have to clean up and trust but verify with them to make sure that you’re getting the product that you’re expecting is happening down the line as well as what you’re seeing on paper. The partners, you definitely need to identify the strengths of the partners
Rod: So we’re going to talk about team building now okay guys so, and most of you as you get into this business are going to discover that you know you’re likely not going to have employees for a while. You’re very likely just to have partners and so please continue talking about strengths yep
Chris: So, let’s see. I’ve heard various kinds of uh terms thrown around but hire out your weaknesses and things like that. That’s great and fine. However you still need to have some understanding of what the weakness is and then find someone that you can partner to fill that void. But you focusing on a niche strategy that you’re a piece of the pie that you’re focusing on. So whether it be acquisitions, asset management, investor relations, whatever piece is your niche of the project. If you’re focusing on that and you’re constantly maturing that tactic, you’re going to get better and better and better. And you’re going to get faster at that one thing. So there’s no need to try to know it all. Be aware but then bring on the partners that can go just as fast as you can and together you will all sprint ahead and I say that loosely it is definitely a marathon activity but you can run a marathon faster in a pack
Rod: Talk about for a minute the different components inside your team. So I know you do asset management. So your strengths are project management that’s, you brought that from the marine corps. What are your partners, what are their strengths?
Chris: So on the acquisition
Rod: I know you’ve got a partner that’s a warrior and then you’ve got another partner that’s came kind of circuit, it’s kind of, what’s the word, I’m looking for, certi… I can’t pronounce it. Kind of circled around from my boardroom, a boardroom member that had a mentee that became a partner of yours as well, Brian Murray’s and so yeah so I just wanted to expand on that for a second. Talk about their strengths and weakness or just strengths really
Chris: Okay so essentially what we do is we have a pretty broad brush of how big of a market that we’re looking at. So we carve it up and each one of us takes a state and that’s how we find our properties. And then one of the partners is really strong in the underwriting of a deal, evaluation of the property, gathering the comps, all the data pieces. And to see him work in excel spreadsheet is like magic. So he focuses on that piece and make sure to get it structured correctly and make sure it fits what our margin criteria are. And then if he finds those things that fit then typically I’ll go in and verify it and it’s just to make sure that we’re as lean as we can be. We clean it up as good as we can be and we’re presenting a good solid product that has room to move it’s got cushion on the downside, it’s got cushion on the upside. So we’ve got all that space there and then it will go over to the other partner. The other partner’s specialty is financing. He’s got um various relationships throughout the financing world to find the right financing product for us. But he also does the investor relations for us. And investor relations is in a lot of ways taking the weekly and monthly data that we’re going through property management calls and construct construction calls and everything else and making it, deciphering it, to where an investor can read it and not get freaked out or just be way too granular and they don’t care. We want it to be, he’s good at the emotional touch on the investor side. So he does all those pieces and then like I say, I focus on the asset management and the construction flows timelines. And it’s more of a binary piece so I tend to, if you ask me what’s going on I’ll tell you as if I was talking to a contractor but it would be way too much for somebody to take in that would be an investor. So then that’s why we have that relations piece in so you can decipher what I’m coming across with
Rod: Nice nice and so you know, and so how did you, I know the answer but I still want to ask it and have you answer it. How did you get connected with these partners? I mean, I know they’re fellow warriors. By the way, guys, if you don’t know the warriors, those are my coaching students. But what was the activity that got you connected with them?
Chris: So let’s see
Rod: Listen, don’t overthink. I just want you to hear you say networking because this business is a networking sport. So, I’m sorry. I stole your thunder. I didn’t want you to have to go deep on that. I was just, guys, it’s just building relationships. It’s just friendships and meeting people and you know I facilitate that at my events and let me let me take a moment to talk about my event you know guys I’ve got a live stream coming up, two full days of training, it’s like 97 and I’m not selling anything at the event just you know it’s a no-brainer so go to multifamilyvirtualbootcamp.com or text “rodlive” to 41411, that’s “rodlive” is one word to 41411 and come see me for two days. It’s drinking through a fire hose but if you’re serious about this business, stop screwing around and just come see me multifamilyvirtualbootcamp.com. By the way, what was the first event you went to Chris?
Chris: I was in Atlanta in ‘18.
Rod: No kidding
Chris: Like I say, I was already in multi-family space then but I was doing it on my own and i was doing it with my own capital and I hit this point and I said, to grow, I gotta figure out the syndication thing
Chris: So I came on to Atlanta and then that’s where I met a lot of folks, got into the warrior group actually met the one partner through the warrior Facebook group last summer. And then we both went to the Baltimore event because there’s just, there’s tons of networking at the events
Chris: So we definitely went to the Baltimore event. We networked the whole weekend and definitely got a very good partnership flow and we’re like, this is perfect. And that’s also how we ended up linking up with Brian Murray to end up contacting the other partner. So that’s how we all came together through the networking
Rod: Networking. So guys that’s how this business is done. And by the way we have a networking component at my virtual event as well so don’t think that you know, we’ve brought that into the mix. So awesome. So now let’s talk about your strategy for asset management Chris. Talk about what that looks like for you. You know what’s involved and maybe how you track what you do. So maybe go a little bit granular not crazy granular like I know you can so but just give us an overview
Chris: So a lot of it is, constant process improvement, lean six sigma, whatever word you want to call it like but in the marine corps aviation, asset management they really focus on the CPI and that’s because we don’t get a lot of funds on the marine corps side of the house. So we have to do a very significant mission. So it’s learning to do more with less and I just took that into the properties.
Rod: What is CPI?
Chris: Constant Process Improvement
Rod: oh gotcha gotcha I call it CANI. Constant And Never-ending Improvement got that from Tony Robbins, CANI okay got it love it okay
Chris: So I just take that approach with the property. I don’t necessarily put that in when we’re doing our initial underwriting so that I know I have that extra cushion of goodness because we’re going to go in with a CPI lens and optimize the property. And what we’ll look at typically is how can we rein in our expenses, how can we, if the market rent isn’t there, let’s get everything up to market and a lot of times what we’ll do there is if there’s not a huge margin between the two is we will actually do shorter term leases for the people that are there to try to give them time to come up, see how they can work with it. And if they can’t work with it thanks for playing have a nice day and then we’ll go ahead and move in somebody else that can do the full level. But on the
Rod: Talk about what you do, sorry, talk about what you do say on a weekly basis as it relates to asset management as I’m sitting here at an asset that you were actually invested in Louisiana. Talk about um you know the things that you do with your, I know you don’t you don’t self-manage at all correct? It’s all third-party
Rod: So you’re using you’re using third-party property management partners. Talk about what sorts of things you’re looking at and how often you’re communicating?
Chris: So we, once a week and we’re year one, definitely once a week as long as we’re doing renovation construction, it’s definitely once a week. I typically will do our formal call with uh the regional, the property manager and the construction manager once a week and then I still will have additional contacts with them throughout the week. But in those calls a couple of the reports that I get essentially it’s kind of the funnel throughput for new residents is, how many contacts whether it be people called in? website hits? whatever we’ll have that number. We’ll have a uh follow-up calls. We’ll have application walk-ins and tours, applications collected, applications either denied or approved, and then move-ins. And that kind of gives us a whole sales funnel feel. So we can really look at each piece where are we failing. So I had one just three weeks ago. I was like, man, we are, our front end doesn’t exist. We almost had 100 conversion but it was literally we would have a walk-in and as long as they got approved, they were moving in. But we weren’t having very many walk-ins. I’m like, something’s missing so we
Rod: Not enough traffic, they call it traffic in the business. So just not enough traffic. The top of the funnel as it were
Chris: Yes sir so started digging into it a little deeper and noticed that we started using a website that populates the other websites and the write-up was lagging significantly. So you would look at the property on a multitude of websites, but because that source website, the write-up was lacking, it actually took down some of the stuff that we had populated on the other websites. So it overwrote our stuff that was good. So we had to go back to that source website get that fixed and now all of a sudden we’re just shy of a hundred percent on that property. And so that was three weeks ago
Rod: So let me drill down a little bit on what you said, you did it kind of fast. So you’re measuring the people coming you know that are inquiring either online a phone or in person. Then you’re looking at how many of those people actually converted to an application. And then you’re looking at how many those applications got approved or denied. And so guys, when you’re doing that like let’s say for example you have a bunch of people coming but they’re not converting, that means you’re leasing people need training or the units are or their price too high or they don’t show well. It’s very simple. It’s pretty basic. That’s it. So you know and so what Chris is talking about here is then you can know what’s broken if you do it with that level of detail. Okay please continue on this train of thought
Chris: So that’s residents coming in and that’s just cleaning those pieces up. Another thing we had identified and this was several months ago was we would have people coming in taking up applications but we were having about a 90 percent denial rating. I was like, what is happening? So dug into it after a couple weeks of that happening, I was like this isn’t working and somebody had hit a switch in the system to where if they had any, pretty much any negative in their credit history in the last seven years, it was an automatic denial
Chris: So we had to clean that up and actually sculpt that better because we didn’t want one event that happened seven years ago that’s been clear ever since to be affecting today
Rod: Sure or some old medical bill or you know who knows
Rod: Okay good
Chris: Correct. So we clean that up and then um get further into the day-to-day operation kind of stuff. And this is more of a monthly piece but watching if the property, if you’re paying utilities on the property, watch what the building is doing. Watch the utilization. What’s happening? We, I get maintenance involved and they have a 90 day checklist. So they’ll go change the air filters when they’re in there changing their air filters, they’ll look underneath the sinks for any leaks, they’ll listen to the toilets make sure they’re not running just a general look also while they’re in there they make sure that all of our green products that are in place are in place. So shower heads, aerators, led light bulbs, all those things are still there um and make sure that the resident didn’t decide to switch them out because they didn’t like how it was operating for them. We definitely leave it open hey come talk to us if there’s something that this just isn’t working for you but otherwise leave our stuff in place. So we look at all those kind of things. When maintenance goes in, like I say, it’s every 90 days that maintenance goes into the unit. They change their air filter. They do a quick visual on those kinds of things and then move on. And if we have a unit that’s showing high utilization, then we go looking, I mean I found a unit with an air fryer that they were just cooking through some electricity because they were using the air fryer. I said okay not allowed in the property and we’re going to bill back the differential. We didn’t beat them up about it but the griddles and all those things, you have to talk to us if you want to bring those in and we look at them for safety reasons. I also like, you can, most insurance companies or brokerages you can reach out to them and ask for a lost control mitigation file. And it’s like an ebook. It’s long but you kind of pick through that and it will point out a lot of green strategies in it, a lot of safety strategies in it. So I pull things out of there uh especially when we’re going through the acquisition piece of things we can do on property to make things more safe
Rod: What’s that called again from the insurance company?
Chris: It’s a lost control mitigation booklet
Rod: Well that kind of says it, lost control mitigation guide or rule you know got it okay good. I love it. Great tip okay
Chris: I got a hold of that and just started digging through it and I mean a lot of this stuff was stuff that I had done before but it is good to reaffirm. But just looking for those areas to continuously improve as you’re going along and one thing especially like I say the application denial piece, everything was going good and then also we had this couple of week period that everything was going sourness what happened? And it was one switch that got flipped in the system and started throwing everything else off. So you have to have that constant pulse of items
Rod: And let me just say this guys, and so you have a weekly call with your people and you get reports on a weekly basis and don’t think that you know you can buy the asset and hire a third-party property manager and your work here is done. You got to manage the management so you know very very important piece of that as well. Do you, is that your child behind you there? It’s all fine. It’s all good
Chris: I was like I can’t see you if you’re under my arms.
Rod: I love it love it. Well listen buddy I need to find out there’s some things happening here I need to get involved with. But I really appreciate you being on the show and you know being a warrior and you know and getting to see this incredible progress that you’re making and incredible results that you’re having and just appreciate your wisdom and it’s great to spend a little time with you one-on-one like this anyway. So but thanks for being on the show my friend
Chris: Yes sir. Thanks for having me on like to say I just like to help educate anybody that I can especially if they’re running into a roadblock and help them get on around it and press on
Rod: Yeah no I love it and his, your website’s Wooten Capital correct? wootencapital.com
Rod: All right my friend. Great to see you and I’ll talk to you soon brother
Chris: All right good seeing you. Take care
Rod: All right thanks