What steps do we need to take to be the entrepreneur that we have dreamed of for ourselves? With the right customer service mindset, we open doors for opportunities to achieve the hard-earned success we deserve. Tony Andrews and Shannon Robnett discuss why having a customer service mentality to maintain tenant relationships and build the trust needed to profit. Tony has a wealth of experience, having been in real estate for over 15 years. We dive into analyzing the market for rental demand compared to supply and vacancy rates. As entrepreneurs, we have to have a mindset that could drive a business to sustainable growth. In this episode, Tony shares the positive results that could spring from having a customer service mindset and what he’s providing to good renters to keep them from moving. If you are looking to learn more about how to invest in a property and how to invest in your tenants, Tony has all the information you need to get there.
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Tony Andrews: Have A Customer Service Mindset And Focus
Everybody, we take the time to talk to our buddy, Tony. He is going to tell us all about what it takes to have a consumer mindset. Tony Andrews has been in this business for a while and he understands a few things. He understands how to analyze the market for rental demand, have a customer service mindset that builds relationships and create an environment that provides amenities that are good for the renters. If you want to know more information like that, you are going to want to tune in to the show where Tony and I break that down and bring that information to you, our audience.
I have the great honor of interviewing my man, Tony Andrews, who is coming to us all the way from Fort Collins, Colorado. Tony, welcome to the show.
Thank you so much, Shannon. I appreciate you having me.
Tony, you have been involved in real estate since 2005, which means that you’ve got it right before some bad things happened but of course, they didn’t happen to you. We are not going to have to talk about that. That has nothing to do with your experience. We are going to be able to go right over, gloss over all of that to only good points and sunshine.
Sounds great. Let’s not dredge up that bad stuff.
We are going to miss about half your story. Here’s the thing, Tony. You have a wealth of experience, having been in real estate for several years and you’ve got the mindsets that brings that out. Tell us a little bit more about who you are, the mindset that you bring and how to create the environment that you bring to your rental properties?
It’s my part-time job. I have a full-time job. Probably since ‘94, I have been in sales and marketing. I have an extreme customer-centric point of view of the world. In any business, you need customers. They pay you money so you want to treat them well. I bring that attitude into being a landowner and a landlord.
Fix things in your life sooner rather than later.
Tony, what brought you into real estate out of the customer service?
My wife and I partner in this business. We both have a lot of aptitude for purchasing homes, owning homes and working on homes. We have probably owned a dozen of our own homes and lived in 16 or 17 different dwellings over the years. It just made sense to take that aptitude and have a go-to work for us.
What were your first steps when you’ve got into the real estate world back in 2005 that was some of your better learning aptitudes? What were some of the things that you learned that real estate is such a quick teacher in helping us figure out those things?
Let me back up. I had a false start opening a restaurant before that and I started to learn what not to do. If I would have done that correctly, I would have had more money, partnered with people that have been successful in it, and had the right types of brokers and mentors in that process. I guess maybe I’m not the sharpest learner in the world because I made a lot of those same mistakes when I’ve got into real estate.
I think back in ’05. I learned a lot about what not to do. I thought, “Let’s buy a cheap house, let’s fix it up, getting that lower rent area where people have to rent and they don’t have a choice.” I did not screen renters properly. I did not get legal people. I didn’t have mentors. I just thought, “I know everything and I can do this on my own.”
What did you prove, Tony? Do you think that you couldn’t do it on your own without some help?
I couldn’t do it on my own. I’ve got lucky. I decided to get out of it. Not to boot on top of that, I was living in Illinois at the time and buying houses in Arizona thinking I was going to end up there. On top of all the other stuff I did wrong, I was a long-distance landlord, which I think was another fatal mistake. I’ve just got out of it and I’ve got lucky that my choice to do that was right before the crash yet. I didn’t take a big loss. I washed out even on that and walked away from it, and then when we’ve got to Colorado, it was time to do it again.
Let’s talk about that because the reality is at the beginning of your conversation, you identified all the things that you were doing that you thought you were doing right that you later found out you were doing wrong that is probably about half of what my readers are doing. You are buying the least expensive property you can find thinking that the lower the entry point, the better the learning curve is going to be.
You said you were fixing them up yourself, you weren’t screening your tenants and you were doing all of this yourself because you are saving money that way. You weren’t using a property management company because all the property management company does is collect your money. They don’t provide you value. What was it in those supposed trues that you learned that they weren’t? What brought that to light? Let’s start with the cheapest property you can buy. Why is that a mess you should avoid?
Customer Service Mindset: Create the right environment for your rental properties.
Not only did I do that myself, I still have friends that still do it. Let’s just pick some numbers. You could go buy a brand new house in your market for $400,000 or you could buy one for $250,000 or $300,000 and fix it up. It’s going to take you $100,000 to fix it up and it’s going to take 6 or 9 months. At the end of 6 or 9 months, you are at the same place you would have been had. You just spent that $400,000 but now you have lost out on 6 to 9 months worth of rent.
Don’t forget that you lost out 6 and 9 months for the vacations and you didn’t have to go see the in-laws at all. There are a lot of benefits to that if you like smashed fingers and splinters. To me, there’s absolutely nothing worse than a home improvement project. I absolutely hate home improvement projects. Some people look at that and they go, “Look at the fun we could have.” I get nervous watching HGTV because I don’t know if they are going to get it back together before the 30 minutes is up.
Those are very good points and people don’t realize the time and value of money. They don’t look at what their time is worth. If you would have gone and put all those hours in at your day job, what would that have added up to? Plus, you would have been getting rent. Your $300,000 property went up 10% but so did your $400,000 property. You would probably be made an extra $10,000 there, had all your nights and weekends back or you could have changed that time for money at the job you have.
There are a lot of things there that people don’t consider. Now, we are going to assume that you fixed all those habits. You don’t have any of those bad habits now. How did you go about fixing all those habits? You’ve got out of the real estate, your timing was impeccable, you came to Colorado, you decided it was time to do it again, what did you do differently? What is the success you have seen from that difference?
I hate to say this but one of the best things I did was get a little lucky and that was moving to a hot market in Fort Collins, Colorado. I think what got me back into it was, I could see that as I’m looking for properties for my daughter to go to college at CSU. I’m thinking I could pay $600 a month to somebody else and rent a place for my daughter or I could go buy a condo and get some of her friends in there and make some money on my own.
You bought something. What was the difference in that experience between the one you had in Arizona?
Obviously, I’ve got with lawyers and other people that I know, I found some mentors in the business and I learned how to be successful. It included things like not only have a rock-solid lease but get the kid’s parents assigned guarantor letters. It almost sounds awful but each parent had to sign a letter saying they are responsible for the entire rent every month if nobody else can make it. I never had to enforce any of that. We have had good tenants and good parents, people paid on time, took care of the places and we took care of it also in return.
You have to fix your habits to become successful.
I’ve got lucky there, too, Shannon. My wife and I had lived here not very long. This is several years ago and we are sitting in this café drinking some wine. This guy approaches me and we start talking. It turns out he owns a café and he’s looking for somebody to ride bikes with. I’m an avid cycler and he’s an avid cycler. We had been cycling and hanging out together for a little over a year when I found out he’s not just a restaurant owner but he runs his own real estate company and has quite a few rentals that he owns and manages. I start picking his brain a little bit and he likes my wife and me. He’s in a position where he doesn’t have to work with too many people but he enjoyed helping make us successful.
Tony, I’ve got to ask you because we always hear about this undercover agent. This person is a real estate agent but nobody knows. You actually met one. If you are taking advice with a guy for over a year before you even knew he was in real estate, was he that secretive about it or was he not interested in selling anything? Was he just interested in riding bikes?
He’s interested in both. Every time we go on a bike ride, he ends up stopping a few times and taking phone calls where I’ve got my phone turned off or not with me. One of the things I like about this individual is just not a lot of egos and not a lot of pride in the game.
He does have something that most realtors don’t have and that’s his own investment property. It blows me away how many realtors don’t even own their own homes. Let alone a second investment property. This guy obviously drinks the Kool-Aid. He understands the value of the real estate game as not only a place to make his money but a place to invest his money. How did that influence your decisions moving forward when you knew you had a pro in your corner that was able to show you the ropes and bring you the deals that you would buy?
It bolstered my confidence to have that coach and mentor. It also turns out that we brought a lot of good business ideas and concepts to the table. It wasn’t just a matter of him telling us what to do but they were good conversations where we would meld our ideas together and talk about the pros and cons, and what results could possibly come from those.
That’s always awesome when you can influence or be a part of the conversation contribute from a different perspective. I’m a fourth-generation realtor. Everybody knows that second-generation builder. People don’t usually talk to me about what they think about real estate but it always is refreshing because I always learn something when I hear somebody else’s point of view.
Even if it’s from the other side of the street, down the road or around the corner, where people are seeing things the way that they are instead of the way that I have always seen them and thought about them but that’s just me. Now you have moved on. You have been riding bikes with the guy for a couple of years. You bought a couple of properties. Tell us a little bit more about where you are at and where your journeys brought you.
We were about several years from retiring from the day job and we have finally built this up to where we can afford to do that.
Customer Service Mindset: When you have the aptitude to purchase, own, and work on homes, you must take that blessing and let it work for you.
What does that look like for you? When you are talking about retiring from the day job, is that more about lifestyle or age? What is that?
We could retire tomorrow, honestly, but we both enjoy our jobs quite a bit. We have successful careers and we are not ready to turn that off yet. We’ve got a lot of wonderful activities that we like to pursue when we are not working now and that’s what makes me want to do sooner rather than later. From a money standpoint, we’ve got eight homes now and they will replace the income that we get from both of our day jobs. We will stay level set at that point.
Are you not planning on expanding past the eight?
You are a real estate investor, not a real estate nut. You are not one of those that runs around looking for real estate like Charlie Sheen does is a bookie and is a dealer. There are two kinds of real estate people. Some understand the value and there are those that absolutely lose their mind with the value or with the proposition of doing deals.
I know a lot of people that are in that boat, where they are more interested in doing the deals and having the fun doing the deal than they are anything else but some understand what it does. It can provide the cashflow that you are looking for to step into the next chapter of your life without having to be tied to the job. That’s going to be what it does for you now. What does that look like for you have spent your career in sales? What does that do when you talk about it from the tenant’s side? When you are talking about how you serve your tenants, how are you doing that with a different mindset than most people do?
My mindset is, “You are paying us a crap ton of money to rent this home and live in it.” My customer service attitude is, “I want to make sure you get the value for your money.” If there’s an issue with the house, if there’s a problem, if neighbors are upset, even if you get a letter from the HOA, I want to know about it. I want to help talk to them. I take care of things instantly and I had that good business relationship because they see me doing things for them that they have never experienced from a landlord.
Now, they are open and willing to come to me and, “This happened or that happened.” “Great. Thanks for letting me know. I would rather fix it sooner rather than later.” Believe it or not, typically, when that happens, it has been fixed. I don’t wait until the end and take deposit money out. I don’t recall ever keeping deposit money from any of my tenants because of this.
Let go of ego and pride. Lead the game of life
Do you think that the customer service attitude makes your tenants stay longer?
How does that affect your bottom line at the end of the day?
It’s expensive to move tenants.
It’s not easy to take care of every problem they call and complain about.
That’s true. There’s got to be some reasonableness to the problem. I have a priority list I go through them. If they can’t cook or they can’t get hot water, that’s a 24-hour emergency, and then other problems get knocked down on that priority list. Let’s jump to one other topic. When I first moved here several years ago, I heard about somebody buying a brand new house down the road to owners of rental. I thought, “That’s crazy. Who would do that?” I then thought, “Why did I think that.”
I’m that crazy person now. That’s what I do. My whole goal is to hit the easy button. Out of all the homes we have, four of them we purchased brand new construction and their higher-end homes so you get a higher-end tenant. They are the smart type of people, they work hard for the money and they take care of their stuff. That’s hitting the easy button for me.
I couldn’t agree with you more. We build and develop all new products as well because I understand that if you buy a fifteen-year-old house, they may have just replaced the water heater or you may replace the water heater. The water heater might last another ten years but, at some point, you are going to begin to replace that thing. It’s like the argument between a new and a used car.
Customer Service Mindset: The customer service attitude is what will make your tenants stay longer.
Everybody loves the new car smell but then you have the payment. You could go with the old car, it smells like you might have last week’s chicken baked hidden somewhere under the seat but there’s no car payment for it but the u-joints are going out and the tires need to be replaced. It does depend on what you want.
I honestly couldn’t agree with you more that there is an easy button on rentals and buying a house that doesn’t nickel and dime you, you just pay it all upfront and you get the bank to become your partner in that because they will front you all the money to buy all new stuff. Ask them, they will pre-approve your loan. You go in and you buy it for $400,000 instead of the analogy where you bought it earlier in the show at $300,000 and it costs a bunch of money to get it done. You are constantly giving up your part. You are hitting on such a great point here because when you get your $2,000 in rent, the bank doesn’t say, “That’s great but since you had the hot water heater go out and that was $500, only pay us a portion of that payment.”
Don’t you wish you could call your banker up and say, “I’m just going to connect you with my tenant, he can explain what I did and you can then take it off the loan? I don’t have to deal with that.” That’s what buying new does. Buying new puts you in that position where now you are putting a 30-year mortgage on a product that’s actually going to last 30 years. You can be able to go from one to do on this thing, make all the payments on time just like you promised and have it keep going. Give us another example of another thing that you have learned that put things on the easy button that makes Tony’s life easy and makes him look like a genius to his wife.
Another thing lately is Zillow. I did not like Zillow too much in the beginning, but they have made a lot of good enhancements. The easy button is I advertise a place on Zillow and automatically it goes to 4 or 5 other websites that people are looking at. I’m in that hot market. When someone sends me an email saying, “I want to look at that house.” I say, “Fill out the application on Zillow. I will analyze it and see if you are a good potential applicant, then we will go look at it.” Instead of showing it to 50 people and 40 of them, there’s no way they could have rented it.
To recap what we’ve got here as far as nuggets that we have picked up on the show, one is to hit the easy button and buy new. You are going to pay for it on one side of the equation or you might as well put it in the loan. The second one I hear you saying is that Zillow can be your friend because we hear so many negative things about Zillow from the real estate agents and everything. What we heard in the third thing was that taking care of your tenants takes care of your property and takes care of you. Did I miss anything?
I think that’s a good synopsis of what we have talked about. The last lucky thing I did before COVID in 2020, we decided let’s not make all of our rentals for college kids, even though that was our original thrust of what to do. Again, I’ve got lucky and sold the paper in the crash in ‘07 and eight of our homes have families in them. Only one went empty when they shut the school down.
I always say, “I would rather be lucky than good any day.” Tony, we want to thank you for coming to the show. Thanks for being with us. Guys, thanks for reading. Don’t forget to like, share and subscribe to The Real Estate Rundown on Podchaser, Spotify, iTunes. You know the drill where everywhere you want to get your podcast. When you subscribe to that, you will get your automatic updates. You can find us on Instagram and YouTube. Leave us a review. We would love to hear your feedback. Thanks again, Tony one more time for coming to the show. We appreciate you.
My pleasure, Shannon. Thanks for having me.
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About Tony Andrews:
My wife and I have been investing in rental income homes since 2005. We are not trying to get rich, but to have a comfortable retirement income and a nest egg to hand down to our 4 children.
We now own 8 rental income houses in Fort Collins and Tinath in Northern Colorado.
In the 2000’s we learned more about what not to do than how to be successful. We had 2 houses in Prescott, AZ thinking we would end up there when we retire, we had bad properties and bad tenants in a poor market and got extremely lucky to get out without much of a loss in 2007 as the crash was happening. When we came to Colorado nearly 8 years ago we decided to get better at what we were doing, we started by purchasing a townhome to house our daughter and her roommates while they went to Colorado state university, we found realtors that had investment properties, a fantastic mentor, and luckily moved into a hot market. This property was a fantastic producer and we did well while we had it. It motivated us to get more college area rentals and we got one more. But for future purchases we decided it would be easier to target families that will not move every semester or every year. That turned out to be a stroke of genius when COVID hit and the schools shut down. We sold the original townhome prior to COVID and tenants stayed in the next one past graduation and for all purchases after that we targeted new or newer homes in family communities.
Also for our first 2 homes we did what I have seen others do and that was to buy cheap, fixer uppers and sink money as you go, that is a lot of work and we wanted the easy button for us, so of the last 5 homes we have added 3 were new construction and the other 2 less than 3 years old, it took more money but in the long run is the same minus all the work of renovation and upkeep.
Now I know all the keys for success that match the goals we have.
Also having spent most of my career is sales, I have a very customer service centric attitude with our tenants. I want them to feel they get more than they paid for.