Property Management Brainstorm host Bob Preston has met many property managers in the industry. Bob and AJ Shepard of Uptown Properties have known each other for the last few years, mainly from their involvement in the NARPM organization. AJ is also a real estate investor, active in real estate syndication, and owns a beer brewery.
Bob and AJ discuss the buzzword Artificial Intelligence, AI for short, and how it can be utilized in property management companies to streamline operations and increase efficiencies. This is his second time on the show, so we are excited to welcome AJ back to the Brainstorm!
[1:58] AJ Shepard introduces himself and his company, Uptown Properties.
[2:55] AJ explains his involvement in the NARPM organization and why he is running for President-elect for the NARPM National Board of Directors.
[12:30] Bob and AJ discuss the definition of Artificial Intelligence (AI) and its use in the property management industry.
[14:24] Is AI synonymous with automation?
[16:45] Are routine tasks of property management the primary application for AI in our industry?
[21:55] Can AI be used by property management company owners for higher-level predictive analysis and decision-making?
[23:35] Property management is a people business. Is there a risk of AI losing that personal touch?
[26:45] Bob and AJ discuss Smart Home technology and its application of Artificial Intelligence in managing rental property portfolios.
[30:20] AJ provides his parting words and thoughts on AI.
Connect with AJ Shepard
Connect with Bob Preston
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Transcript of This Episode
Bob Preston 01:18
Hello, Brainstormers, and welcome to the show. I've met many property managers nationwide as a property management industry consultant, business coach, and mentor. During my time in the property management industry. I've known AJ Shepherd for the last few years, mainly from our involvement in the NARPM organization. He is also a real estate investor, active in real estate syndication, and pretty cool. He also owns a beer brewery. This is his second time on the show. So, I'm excited to welcome him back today to the brainstorm. AJ, good to see you. Welcome to the brainstorm!
AJ Shepard 01:45
Hey, Bob. Thanks for having me. Appreciate it.
Bob Preston 01:47
It's been a while since we connected. As I mentioned in my preamble, we've known each other for quite a few years from the industry and our involvement in NARPM; how about we start there today by introducing ourselves, telling us about your property management company, and a brief overview of your journey in the industry?
AJ Shepard 02:03
Sure. My name is AJ Shepherd. I'm out of Portland, Oregon, and my brother and I co-own a few companies. But the main one is Uptown Properties, which does property management. We also syndicate, purchase apartment units, and use the property management company to add value. So we started back in 2011. And we began syndicating units just in 2020. So that's newer to us.
AJ Shepard 02:32
As you mentioned, with NARPM, I volunteer on the board. This will be my last year as regional vice president, and I'm managing the Territory of the Pacific Islands, which is just California and Hawaii. I have written myself in for the ballot for President-Elect this upcoming election.
Bob Preston 02:51
Well, let's talk about that. Because over the last several years, you've been very committed to participating in NARPM. How did that come about? Where did you write yourself in? Or did you have your petition? How did that all come about? Could you tell us how that process went?
AJ Shepard 03:05
Yeah, the process to do it isn't that difficult; I just found myself in that position where I needed to keep moving up and move and be on the board. I timed out with four years of RVP. So, he wasn't eligible for an RVP position, and the nominating committee has put two people in place. And one of them could have kept serving as an RVP. So it felt a little slighted towards me. I'm pretty young, I've got the time, I've got the money, I want to still be on the board, I still want to serve, and I've got a ton of knowledge I can share with the community. I have excellent leadership skills, as seen by the companies we run. So I'd be suitable for the position. And I didn't want the membership to miss out on that opportunity. So, this will be the first year NARPM members have an actual choice.
Bob Preston 04:14
It's never happened before.
AJ Shepard 04:16
This is the first time. Many new things have come up, like, oh, wait a minute, we've got to figure this out. So, it's paving the way.
Bob Preston 04:26
I know there's the undercurrent in the market and among the membership, a "reform NARPM thing you've probably heard about among some of the members. Is that a legitimate opinion? And what do you think needs to change in NARPM to make it so those kinds of sentiments aren't expressed?
AJ Shepard 04:45
Yeah, that's pretty tough. I know some people in that group, but I don't know exactly what their platform is or what they want reformed. The nominating committee is now public and serves on it. When we did the interviews, we actually could see people's faces instead of just black boxes, which was a lot more welcoming and less intimidating when doing the interviews. So, NARPM has heard and tried to address some of those concerns as best as possible. There are probably still more concerns about being on board; you learn that when you can't please everyone, unfortunately. I mean, as a company owner, like, sure, you have a specific type of client, and you don't want the clients you don't wish to because they take up a lot of time, it just doesn't fit your business, they have somewhat different expectations. You know, and I feel that that kind of is, you know, representative, in within NARPM, as well as like, you know, hopefully, we're trying to please 95 to 98% of everyone and add value and provide, you know, education, great networking opportunities. Like that's the goal, you know, on the grand scheme of things, too, like, I go to other conferences and other networks, and NARPM is a considerable value. Like, I can't believe how low our prices are for everything. So I'm sure you know, I've been attending other conferences and other organizations that cost $5,000 A year or, you know, two or $3,000 a meeting, and I'm happy to pay those. But, you know, when I hear sometimes, people say, like, NARPM doesn't provide any value. It's the lowest-cost organization out there that I know of.
Bob Preston 04:45
So, what would you like to see changed with a NARPM? Do you have a short list of things that may not have been reformed? There must be things that alter in any organization.
AJ Shepard 06:50
So, Bob, you've been involved with the strategic plan, like, I fully believe that like, you know, serving in a position, it's not, yes, I do have an opinion, but it's the organization that, you know, and the board comes out with one voice. And so it's really, where does the organization want to go? And yeah, my opinions on that, not slightly, I mean, in line, are somewhat different in some cases. But listening to the members and discovering where they want to go is essential. And there's that the opportunity is like the in the prep work for the strategic plan. There are many members out there that haven't even looked at the strategic plan. But that is a roadmap for what the organization will accomplish over two years. And so this strategic plan coming up in September is a rewrite. Last year was just a review. So, one of the things that we got into the strategic plan last year on the rewrite was peer-to-peer networking groups. And I was one of the ones that presented on that. But essentially, it's small group masterminds. So I'm super excited to see that come out. It's selective; it may be like 100 bucks for a member. I haven't written. I'm not the one in charge of the white paper. But it would allow for this, opportunity that NARPM can connect people from coast to coast.
Bob Preston 08:30
That's one of the most significant values of the organization.
AJ Shepard 08:33
I'm learning, and because you feel free to talk amongst those people, they're not competition. So you have this, like, you have your local chapters, and I was super impressed with a lot of local chapters that are, you know, willing to educate and give information, you know, tell all the things that they do. But then, as you meet people from coast to coast, it's just amplified this, the level of sharing goes up and up, um, is they've got a white paper for that. I hope they continue to include that in the strategic plan. But, that prep work, understanding what Narbonne wants to do, getting the right stuff on the strategic plan, and ensuring it's goal-oriented. You know, there's a lot of times that I've seen where it's like, review this or review that, and I'm sure, you know, working in a company, like your employees, they want the, you know, how do you determine whether it gets done or not? Anybody can say, oh, yeah, I reviewed that idea. Well, what did you do? It is essential, too.
Bob Preston 08:35
Having sat on the NARPM board myself, some people think it's this mysterious group that meets privately, but a regular member can also ask to attend board meetings.
AJ Shepard 09:54
Sometimes, the board will ask prominent members to come and sit in on a meeting. Typically, the strategic plan will have four to five people that are just regular members because they want to hear from, you know, these other people on where the organization could go should go, you know, what, what other opportunities are there? We're, we're only, you know, at that planning meeting, it's only, you know, as good as the idea is at the time, and sometimes you need more people with more experience to be more creative.
Bob Preston 10:33
And the strategic plans last for two years, right?
AJ Shepard 10:35
Yes, and then there's a refresh every year. So, that's kind of like one of the things in the short interim that, like, you know, if I don't get elected, I'm not invited to that meeting, I no longer get to help shape the direction of where NARPM is going or hold the people accountable for actually performing those tasks. Staff compensation is tied to that plan and acting on it. Making sure that those actions are doable, have a high level, and will provide a lot of value.
Bob Preston 11:12
Could you remind us when the election is so we can all be ready?
AJ Shepard 11:17
It's August 28 and will open at 8 a.m. Eastern. And there'll be a reminder that goes out on August 29. And then the polls closed at 5 pm Pacific time. So, 2 pm Hawaii time on Tuesday, the 29th. So there are two days. Getting the word out that this year is different than any other year is what I've been trying to do or hoping to do.
Bob Preston 12:28
Let's get on to the topic of today. So, it is one of the buzzwords we hear these days. It's all over the news, right? It pops up in all industries, but also has a play in the Property Management industry. Is the term Artificial Intelligence AI right? So, when you think of AI and its application and property management, what are we discussing here? And how would you define it?
AJ Shepard 12:52
You know, AI is a tool that's being used. And it's hard. Like, you've got these websites that you can go to other called AI websites, but you still have to input manually, and then you manually get an output. Then you use it, you know, significantly a lot of different ones, you get like open dollar ChatGPT for the big ones. And then there's all these other ones popping up. So, it can work in the aspect of calling that API. We have started to experience some plugins, too, and then to plug into your browser, plug into your email, where you know, those will, you can press a button, and then ChatGPT writes the email for you, right? Or corrects it in proper grammar, fixes it, or, like, does some other stuff. I find that handy sometimes, actually, no, I mean, I think that there's going to be a progression of AI as they've, they've opened this up to the public, like, Alright, we're going to let you guys put in all your crazy prompts, and it's going to learn a lot of stuff and learn what you're thinking and how to deal with you. And so I believe we are, we're down that road. But, you know, stuff that I hear is, like, you've got companies that have taken that model and formed it into something specific to what they want. I'm sure some people want to do the same for property management. So, it's only a matter of time before we get some AI specific to the industry.
Bob Preston 12:54
Is it synonymous with automation? Or are the two terms different?
AJ Shepard 13:18
They're two terms, but they're intertwined, right? Like, AI is the thought behind, why would I do something? How would I do it? And then automation is the portion, whether that's AI or some program that will take whatever you want done and do it over a set of rules, right? Yeah, I was going to say that, in conjunction together, they can be super powerful. And if you are looking to automate your business, what you'll find is there are just tons of exceptions. You're like, man, I now tried another program for this and another program for this. And that can be the tricky part, right? It is like ensuring that the process is written so that it's the same each way but can be run by a program instead of a person.
Bob Preston 15:20
Well, that's right. That's the difference. Right? You mentioned earlier that AI implies that some machine learning improves over time, whereas in some forms of automation, the most basic one is probably the Auto Attendant when the phone rings, right? So, if you press one, you're going to go to this person; if you demand to serve all these, then rules, but that's all been programmed by a human. That's not, you know, computer learning or intelligent learning.
AJ Shepard 15:47
The cool thing now is that one of the powerful things about chat GPT is that it can program. So, if it's directed correctly, it can program stuff. I mean, I recently used it. I had another colleague saying, Hey, we're converting our CRM over, and I need, I've got this column of phone numbers. And some of them have dashes. Some of them have parentheses, some of them have spaces, and some of them have commas. Interesting. And I need to write and get them all in the same format. Thirty thousand lines, and it's like, well, I know Excel can write a formula. I don't know how to write that. Yeah, I asked ChatGPT. And within five minutes, I had a correct procedure to paste to get it all in the same format. Oh, that's interesting. That was when one of the light bulbs went off my head a few months ago of like, oh, man, this thing's powerful.
Bob Preston 16:46
Our property management business has many routine tasks, including proper lease agreements, rent collection, and maintenance facilitation. I could go on and on. Is that mainly what we're talking about for AI and property management at this stage?
AJ Shepard 16:58
Unfortunately, I don't even know if we're there yet. Like, there's a negotiation that comes with leases. I'm sure that most people are like, I'm not changing the terms of my lease. But, you know, there's a lot of forms that need to be filled out. We have yet to get to that point. I've got remote team members doing that, and I will do anything a remote team member can. AI will come in there first. Right, right. We've implemented ChatGPT, you know, with email checking, editing about listings, property listings, lease listings, property management listings, we do it and maintenance troubleshooting; I found it is like some of our remote team members, you know, aren't necessarily familiar with the type and level of construction that's over here. ChatGPT will spit out all the troubleshooting items that need to be done. So, our troubleshooting has improved. Where we're getting recorded is cleared off before we even have to send it the handyperson number.
AJ Shepard 18:12
AI is getting towards that arena where you can have it put a lease together. I did talk with another NARPM member who has reached the utilization of Adobe power forms to do lease renewals. 100% automated. So he's got, you know, the, the record, the tenant will fill out the form. They'll tell, like, you know, what they're willing to pay for a lease renewal. And then it'll kick back out, they'll do the clumps, kick it back to them and say, This is what we can offer you. You can either say yes or no if they say yes. Then, they fill out the form again, which goes into Adobe Power form and automatically gets sent to them. And I'm like, Oh, wow, that's awesome.
Bob Preston 18:58
That is awesome, but it makes me a little nervous from the legal point of view and the possible risk management. But the fact is, it gives you a starting point.
AJ Shepard 19:07
That's when I've used ChatGPT. Let's ask a fundamental question. It gives you a starting point for your content or creative thought; that'd be a process, right? Whatever it is, it's much easier to edit something than it is conjured up yourself; that creative portion sometimes takes a lot of brain space. And if you have something to start with, then you know, it's it's, it's generally a lot easier. And it's easier to delete something than, like, create.
Bob Preston 19:37
What are the technology tools, other than ChatGPT, are you seeing out there that are used for either AI or some of that basic task automation?
AJ Shepard 19:45
We've developed a person in our company to be 100% the person who goes to about writing zaps. So anyone in our company can come to them and say, Hey, this can be automated. Can you help me write a zap for that?
Bob Preston 20:02
Zapier is the glue that connects the various programs. So, if the program has an open API, the ZAP can take fields or data from one thing and use that to do something else.
AJ Shepard 20:03
So you know, like with our evictions, we have, you know, the standard like eviction letter and all that sort of stuff. And we don't mind. It's all we use, lob. And so it goes, you know, Zap takes it from the, you know, batch list of people that we need to send do evictions, and then it gets sent, Zapier sends it over to law that emails them, we put everything on the tenant portal, we have to do that manually. And we're not stuffing envelopes, but because of it. And it's written the same way every time because of the template. So that's pretty cool. Yeah, it's interesting.
Bob Preston 21:03
Everybody has a tech stack in this industry, which could sometimes be ten or more applications. And some things you mentioned, like Zapier, are trying to be the glue between or the interface between these different applications on disparate platforms.
AJ Shepard 21:18
You know, where we're going to see things go is, instead of like Zapier, being the glue is that AI is going to be able to be correct. When I currently like it, asking AI to do something is challenging. But you can ask for information on how to do something. And even once that kind of next step comes, like, can you do this? That's going to be it's going to be an exciting step. And many people are wary of taking that step two just because of the implications of Terminator.
Bob Preston 21:54
All right, what about higher-level company thinking? Predictive analysis and decision making, things like that, that need to be analyzed and reviewed and decisions at the management level? Things like rent trends, occupancy rates, market data? Are you seeing that? Are you using it? Is it helpful to make informed decisions and allocate the resources for a property management company?
AJ Shepard 22:17
I don't know that I've thought to use it a lot. That way, I understood that it didn't have access to the internet and all the data was old. I was thinking about the analysis and data that needs updating. I would be a little wary of; I will say that, like for higher level stuff, we've had it create scorecards, create job positions, give us ideas on where to go with that sort of stuff.
Bob Preston 22:46
I hear the term Big Data thrown around. And I don't know if we're there yet in our industry, but it's something that we'll be looking at.
AJ Shepard 23:10
You've got websites that are using, right, like, we use Rentometer to find comps and stuff and sharing like Zillow and Rentometer got to be using some sort of, you know, technology to make all those comparisons. So it's, it's there. But sometimes, it's just running in the background where we need to figure out how it works.
Bob Preston 23:36
Property management is, in many ways, a people business. You have tenants, you have owners, you have vendors, you have a lot of stakeholders involved, and you have your staff; all of us in this industry are always looking ways for ways to streamline and gain efficiencies while programming chatbots fantastic, for example, but sometimes, I mean, I even I get irritated and annoyed. I want to know where to go, who to talk to, and a chatbot. Like, it sends me in some weird direction. Is there a risk in AI of losing that personal touch and human interaction?
AJ Shepard 24:06
I think so. And it's really up to the business owner, like what sort of company do you want to run? Yeah. You know, there's two ends of the spectrum, one of them like the super high touch, high human interaction, and then super low, super efficient, but there's two, so I think it comes down to, like, what sort of company do you want to run? I've always wanted to have that person who picks up the phone and not have the RingCentral auto thing, but we've never been able to staff it. It just ends up costing too much money for us. And I don't, I don't know, it's hard to say where someone should go with that. It's, you know, an analysis of what sort of fees you're charging. You know, is it worth it to be able to pay for that sort of thing, and as you grow and get bigger and get a better idea of what your company is and who your company is going to serve, I think that it will become apparent.
Bob Preston 25:07
I remember walking out into our bullpen when I still had North County Property Group and watching what was happening daily. We had a receptionist for quite some time, and the phone would ring, she would answer, transfer it, and then that person couldn't pick it up. So that person would have to call back. I mean, it's like the inefficiency was everywhere, so at some point, you have to face the reality that you didn't do some level of automation to have an efficient operation.
AJ Shepard 25:37
And I think that, like in some aspects, tenants don't want to talk to people too. When they're like blood going to look at places like, generally, they don't want to get the keys, look at it, and be on their merry way. And so I think that there is, there is some opportunity to speed up those operations; it would be nice to have automated leases be able to go out; I could see that being like a next step for us and trying to figure that out, you know, I think adhering to those timelines with the tenants and getting, getting the stuff to them. As you know, screening quickly, like that was one thing we found very early on is like the quicker we can filter and give them an approved decision, like getting other properties out of the queue faster is going to, you know, make our workload lighter, in a sense over some time.
Bob Preston 26:29
No kidding. You're also collecting property management fees faster and rent for the owner more quickly if you can screen, decide, and get someone in the property.
Bob Preston 26:38
What about smart homes? And you know, it's referred to as the internet of things. Where you have this level of automation and intelligence in the household, that is a play over time because, in property management, it could be significant cost savings if you have a home dialed in. What do you see out there? You've seen this starting to take hold?
AJ Shepard 27:02
Yeah, the development of new units; I mean, talk to the building guys. Yes. And they'll have a better answer. But my assumption and limited research is that there's no standard. So, like, you've got your USB ports on your computer. Like, I've probably got, I've got this mic plugged in, I've got my video camera plugged in like there's a standard port my device can talk to, bringing it to the computer. Right now, it doesn't seem like any of the devices that work within your home as a smart home unless you buy the entire system together that someone's selling as a package. But it doesn't seem like there's a standard way of communicating. Sonos might have a great music option. But I can only pair that with this other light function that has led to changing with some, you know, a technical way to put it all together. So until this solution comes, you know if having more options will be better for everyone. And yeah, the guys that come up with a system are like, Well, I don't want to open it up and have someone sell a bunch of their products on my system. And then, you know, vice versa, all these guys come up with products that are like, well, it's tough to get standalone stuff. So my thought is until there's a way to integrate everything, it's going to be tough, especially with remodels; a lot of this stuff needs wiring. And once you go in and do it once, like it's not cost-effective to, you know, put wiring in after the drywall has been put up.
Bob Preston 28:48
It's a perfect point. And as a property management company, you can't have, you know, 500 different doors all on different types of smart home devices; it'd be impossible to manage it, right? So to have that level of influence as a property manager would be challenging and less like you said, it's some community that has been built to rent, and you know, you get off doors, which would be pretty cool.
Bob Preston 29:10
When we first entered management, a lock was wirelessly connected to the network. And you could I could be in an office and I can you know get on my app. It would unlock the door for someone if I needed to let a vendor. That's right, what a code, and I could like it was all fussy and sure enough would not connect to the internet, so I'd try it. It wouldn't work, and then I'd have to go out there, and I mean the Intel, there's more. What I would say is a seamless, more tried and true option. I don't know that I will be pushing to put stuff in now in my regular home.
Bob Preston 29:59
I've got a I've got a mountain home up in the snow. Sometimes, a guest calls the front door and needs to remember the key. So from a remote location, I can unlock it, and click, the door opens. That's pretty cool.
Bob Preston 30:08
We've barely scraped the surface on this topic, but for today's purposes, we did a pretty good job. AJ, what other thoughts would you like to share with our listeners and wrap this topic up today?
AJ Shepard 30:24
If you have yet to use Chet GPT, get on there and ask many questions. Just to let you know, this is not going away. Nope. And this is only going to get better. So could you put it into your processes as a like, check, check GPT, or use it? As I said, our favorite thing right now is maintenance and troubleshooting. Start to use it, get your employees familiar with it, develop creative ways to use it, and then share that with the rest of the organization. Because, like, it's just not going away. And the better we better mousetrap that we all have, the more secure we are going to be against the, you know, big people coming in and buying us, all right?
Bob Preston 31:07
That's excellent advice. And if someone wants to talk to you about NARPM, AI, or just your syndication in general, learn more about you, your career, and all that. What would be the best way to do that?
AJ Shepard 31:18
Yeah. So, my email is AJ at Uptownpm.com. You can also find me on LinkedIn. My brother and I run the podcast West Side Investors. network.com. Win for short. You can find it on any Apple or Spotify on your podcast.
Bob Preston 31:36
Thanks again. AJ, your good friend. I appreciate you being back on the show and hope to see you in Atlanta for the NARPM annual conference, if not sooner. Thanks for being on the show today.