00:00:37:22 – 00:00:45:01
Charles
Yeah. Thanks so much for having me. I’m excited to be here.
00:00:45:03 – 00:01:15:02
Charles
Yeah, I attended college at a small school in Chicago, and this is back in the day. Charles, where your first job you got from a pushpin board in an employment office. And so there was an ad posted there to do marketing for some loan officers at what eventually was Wells Fargo. And that’s that’s how I started in the mortgage business, was sending out mailers trying to convince people to do FHA streamline refinances.
00:01:15:04 – 00:01:54:09
Charles
So really, right at the beginning, I was a loan originator and grew in that role. And then, you know, up kind of through the ranks, through different leadership roles into a senior leadership role in the origination side of the business. So had an amazing run at Wells Fargo. I’m so grateful for the development that I received there, the mentorship, the knowledge I was able to gain about the real estate industry broadly and lending more deeply and just just incredible that I had that opportunity.
00:01:54:11 – 00:02:17:22
Charles
You know, I would love to take credit for, you know, this, this heroic leap from the what felt like the safety of a very large organization to a very small one at the time that I joined. Actually, what it came down to was a life decision. I read a book years ago by John Maxwell called Today Matters, and I think John Maxwell, a lot of, a lot of younger listeners don’t know who that is.
00:02:17:22 – 00:02:50:10
Charles
But you and I probably know that, you know, John was kind of the leadership guru of my developmental years. And he one of the tenets of the book was make your decisions early, your life decisions early, and then apply them throughout your life. And one of them for us was that we weren’t going to relocate our kids. And once we reached a point in life where relocating them, we felt like wouldn’t be good for them, we started to say no to moves, and the last thing that I said no to resulted in my position being eliminated at Wells Fargo.
00:02:50:10 – 00:03:08:23
Charles
So I got essentially laid off. We call it displaced because that sounds better than laid off. Right. And and it’s one of the best things that ever happened to me personally, was giving me an opportunity to look at 20 years with an organization and then look ahead. How do I want to spend the second half of my life?
00:03:08:23 – 00:03:31:07
Charles
And, and, you know, through a process of really a deep process of evaluating what I wanted to do and how I wanted to use the skills that I had obtained over that 20 years, I, I landed it Atlas Real Estate.
00:03:31:09 – 00:03:58:01
Charles
You know, it’s funny, for many years at Wells Fargo, people would ask me, what’s it like just being a number? And my employee ID was 240114. You know, that’s how ingrained it is. It just comes right out. And I for most of my time at Wells Fargo, I never felt like a number. I worked for amazing people. I had incredible mentors, incredible bosses that I just I learned so much from.
00:03:58:01 – 00:04:28:10
Charles
And they were people who cared about me and they cared about my family, and they it never really had that feeling of being anonymous, if you will. That changed a little bit as the company got very, very large and as regulation kind of, I think, put a stranglehold on particularly the lending business, took away any ability to be creative and the ability to be really to be collaborative with the people that we were trying to serve.
00:04:28:10 – 00:04:52:10
Charles
And, and eventually that that kind of, that kind of stuff leads to you lose a little bit of your soul organizationally. So it was a shock to leave that company that identified with for so long. I have an amazing partner. We’ve been married for 27 years, and she looked at me at the time and said, we just need to leave the country for a while.
00:04:52:10 – 00:05:12:00
Charles
And the best thing we did was pull our kids out of school. And we we rented a tiny little apartment on the coast in Spain, and I spent several months decompressing is really what it was. It was like, man, kind of unlearning patterns, waking up in a cold sweat some mornings, going, what am I going to do with my life?
00:05:12:00 – 00:05:31:10
Charles
And and I was also really fortunate to have a wonderful mentor and guide, a business coach who came alongside me during that time and helped me answer the big questions of, what do I really want to spend the second half of my life doing? And, you know, we landed on a few things. One was, I want to be a lifelong learner.
00:05:31:12 – 00:05:58:23
Charles
And the reality was, after 20 years in the mortgage business, there probably wasn’t a problem. You could show me that I didn’t know the answer to, and I didn’t see a path toward, you know, continuing to grow and learn. One was I wanted to develop leaders, and the great joy of my career is looking at the people that I got to work with that are now in senior leadership positions in other companies, people at Wells Fargo that are excelling and seeing them really get what they want out of life.
00:05:58:23 – 00:06:42:12
Charles
And the other one was, I just wanted to be empowered to run the business. And, you know, over time, early on in my career, Wells Fargo, we were really empowered. And, you know, as that organization grew and as regulation really became. Overarching in that business, you know, your ability to make decisions really diminished. So those three things led me to say, all right, I’m going to go search for the opportunity to to to grow and develop leaders, to build the kind of organization I can be really proud of over time and to continue to learn and grow myself.
00:06:42:14 – 00:07:14:18
Charles
Yeah. It’s great. So Atlas was founded by two guys, Ryan Boykin and Jason Shepard. My two partners. And Atlas was formed really in the the foreclosure days following the GFC of 2008. So Ryan and Jason were able to go out and start buying real estate. Just recognizing this is probably a generational opportunity right now. And when you buy real estate, you then have to renovate that real estate and make it ready for a renter or for another owner.
00:07:14:18 – 00:07:37:09
Charles
So you can do flips with it, or you can or you can rent that real estate out. If you rent it, you need someone to manage it. And thus was born Atlas Property Management, Atlas Asset Management, Atlas Home Services are repairs of maintenance and construction company. Kind of all grew out of this necessity. And we were an early operator in the single family space.
00:07:37:09 – 00:08:00:12
Charles
So early on you know, what is now Invitation Homes was a was a bunch of other things before it became the publicly traded entity is today. We helped them acquire their portfolio and have played in that space ever since. So when I joined the firm, we were at the time very much focused on Colorado, Denver and Colorado Springs.
00:08:00:14 – 00:08:26:23
Charles
We had probably somewhere between 1 and 2000 doors that we managed of residential real estate. And and we had become the Zillow buyer partner for Colorado. So if you remember Zillow for a moment, there was paying cash for your house. And our experience in buying real estate allowed us to to win that business from Zillow. And we bought and sold a couple thousand homes for them.
00:08:27:00 – 00:08:57:22
Charles
And and really what we were looking at was, okay, this, this kind of confluence of experiences and, and resources and my experience in corporate America, Ryan and Jason’s experience as entrepreneurs, could we really build something bigger and something that we think could be an evergreen company? We talk about our company as being 100 years old someday. We want our kids, kids to work here, and we want to do that for the the team members that we serve.
00:08:57:23 – 00:09:18:08
Charles
You know, when we think about our our mission statement of uplifting humanity through real estate, it starts with the people that are employed by Atlas, that that do the work and make it happen every day and extends out to the residents we serve and the investors we serve. And and so we started to dream back in the end of 2018 and early 2019, what that could look like.
00:09:18:08 – 00:09:43:23
Charles
And since then have just have built what is now an operating platform where we can bring on multifamily, single family and build to rent assets. We can operate them incredibly efficiently and in doing so create opportunity for our team members, but also for the residents we serve to eventually become homeowners and investors themselves. So it’s really been cool to see the way that that’s come together.
00:09:44:00 – 00:10:03:19
Tony
Do you have money sitting in the stock market and you’re worried about it? Or worse, you have money sitting at the bank not keeping up with inflation. My name is Charles Grillo, founder and managing partner of Harborside Partners. And since 2006, I’ve been investing my money and my family’s money into income producing properties. These are real assets, real properties with real addresses that produce real cash flow.
00:10:03:20 – 00:10:22:05
Tony
At Harborside Partners, we provide passive investors who love real estate with a turnkey investing solution. If you want to put your money to work in real estate, we can find deals, don’t have the time to get funding, and the last thing that productive people want to do is manage real estate. We find the deals, we fund the deals, and we manage the tenants, the termites and the properties.
00:10:22:06 – 00:10:49:00
Tony
Partner with us and invest with Harborside. And that’s invest with Harborside. Go to invest with Harborside. If you love real estate, you like the idea of passive income and believe that income producing properties will appreciate over time. Go to invest with Harborside. That’s invest with Harborside.
00:10:49:01 – 00:11:12:19
Charles
Yeah. When we brought on our first joint venture capital partner, it was early. It was late 2020. We started the capital raise in early 2020. And if you remember, something else happened in early 2020 and, you know, as Covid launched, nobody knew what was going to happen with real estate, right? We didn’t know if he was going to pay rent anymore.
00:11:12:21 – 00:11:39:12
Charles
And, you know, little, little. Did anyone expect that real estate would see its its biggest run in in a generation. And during that time we were able to buy about 2000 single family homes in partnership with our capital partner and deployed just under $1 billion on that portfolio. And as we set out to do that, we really looked at the landscape and said our mission is uplift humanity through real estate.
00:11:39:14 – 00:12:06:13
Charles
How do we see being a renter as a path toward homeownership, not as an alternative to homeownership? And we believe in real estate ownership, right. I, I own real estate, my partners own real estate. Everyone on our executive team owns real estate. One of the metrics we track in our company is average doors owned per team member. And and that’s a success metric for us.
00:12:06:15 – 00:12:35:10
Charles
If our team members are buying real estate, it means that they’re setting themselves up for financial freedom in the future. And they’re better team members today, right? If you’re a property manager who owns real estate yourself, you’re a better property manager. So that’s how we think about it. And then we step back and said, all right, if we’re going to have 2000 homes, single family homes in this partnership, how do we create a path for those people that when they leave an Atlas owned property, they move into when they own themselves?
00:12:35:12 – 00:12:50:17
Charles
So that’s where the uplift program came from. And the idea is you live in one of our homes for four years and you do that well. You pay your rent on time. You’re a good resident of that property. And at the end of that four years, you’re going to have access to resources to help you with a down payment.
00:12:50:17 – 00:13:12:01
Charles
And we’re able to do that through some brokerage commission that we rebate back a partnership with a mortgage lender, some local affiliates, just a number of things. We don’t do a renting crease in year for. We make sure you’re going to get your full security deposit back. We’re doing positive rental credit reporting during your four years with us to help you build your credit.
00:13:12:01 – 00:13:35:15
Charles
And and that’s the uplift program really in a nutshell. And and then throughout your four years with us, you have access to some coaching and financial resources as well. And we think it’s something the whole industry should do. We’re facing some headwinds right now with legislation because the industry didn’t adopt things like this. There are other players that have but but not broadly.
00:13:35:15 – 00:14:11:04
Charles
And we just think it’s good for everybody. And, you know, one of our core values, Charles, is good for you, good for me, good for everything. And we think it rings all three of those bells and.
00:14:11:06 – 00:14:20:02
Charles
Exactly.
00:14:20:04 – 00:14:43:16
Charles
That’s exactly right. So the name of the game in property management today is renewals. And being a landlord who cares about your residence and is creating future opportunity for them does equate to. And now we can show it four years later does equate to long longer residency. Or you know, tenancy is a word that a lot of people don’t like the word tenant.
00:14:43:18 – 00:15:35:16
Charles
I’m not the the Lord of my lands with my tenants. But yeah, longer residency is the win for the investor and we create wins for other resident as well.
00:15:35:18 – 00:15:57:22
Charles
Yeah. I think, you know, we talk about in a couple of ways. Number one is we talk a lot about our local the nationals and our local. The national player for us is we have boots on the ground, property managers, assistant property managers, leasing specialists in all of the markets where we manage real estate. These are local people who know the market.
00:15:57:23 – 00:16:24:17
Charles
They know the cross streets, they know the submarkets, they know where the path of development is. And that’s kind of like that, that that local feel, that person that is really embedded in that market and understands the market well. On the flip side, we want to out national, the locals, and there are a lot of just wonderful small property management companies that work really, really hard and they do a tremendous job.
00:16:24:19 – 00:16:50:09
Charles
What there’s certain things they can’t do. They have a very difficult time providing really meaningful reporting or asset management capabilities. They have a difficult time keeping up with changing laws and regulation, and that’s a big deal in our industry right now. Understanding your insurance coverage. If you own residential real estate and you don’t have appropriate insurance coverage, you’re creating risk for yourself that you just shouldn’t create.
00:16:50:09 – 00:17:15:10
Charles
So that’s kind of the way we look at a value proposition is you should have a relationship with your property manager or your portfolio manager to where they understand the asset. They understand your goals as an owner, and we’re managing it toward those goals. And you should have access to information. So we should be able to report on what rent growth has looked like in the market versus what you’ve achieved, what occupancy and vacancy looks like.
00:17:15:11 – 00:17:42:07
Charles
We should be able to systematically drive renewal rates and engagement, and that just takes resources that a small property management company simply doesn’t have. So our ability, because we are also an institutional investment partner, we have data warehouses and data lakes and data streams, I think. I don’t know what all of them are, but lots of opportunities to visualize data.
00:17:42:07 – 00:18:06:07
Charles
And you know the old adage of if you can’t measure it, you can’t manage it is very true in real estate. So that’s a big win. Our our Atlas home services team that is working with local vendors and all of our markets and driving down their pricing so that we can pass savings along. Inflation has been very, very, very, very, very difficult on real estate.
00:18:06:07 – 00:18:36:22
Charles
So operating expenses have risen across the board, whether it’s property taxes and insurance or just the cost of doing simple repairs. We have to have a team dedicated to not only engaging vendors and driving pricing down, but then once we get an invoice, we have an invoice quality team that’s going through that invoice and saying, hey, this doesn’t really pass the the sniff test, if you will, and we’re going to go back to that vendor and say, you know, this, this pricing does not align with what we’ve agreed to.
00:18:36:23 – 00:19:07:15
Charles
So those capabilities then lead to an experience where you’re just going to have a higher level of visibility into the assets that we manage. And at the end of the day, lower costs and higher renewal rates. Now, all that being said, Charles owning residential real estate, Hart and I think there are people that want that to be kind of an A+ experience, and it’s just not going to be.
00:19:07:16 – 00:20:44:23
Charles
So you got to set expectations correctly that you’re dealing with human beings, and human beings have challenges. You’re going to have vacancy. You’re going to have residents don’t treat the property the way you think they should. All of that is true. What processes and systems do you have in place to mitigate that? I think is really important.
00:20:45:00 – 00:21:10:04
Charles
You know, there’s a great article floating around on LinkedIn about a private equity investor who bought a PM company and thought, you know, hey, how hard can this be? You collect the rents, you send out a handyman when you need to. And a year later, he wrote his reflections on oh wow, I had no idea. And I think it’s helpful, it’s helpful.
00:21:10:06 – 00:21:31:14
Charles
And and frankly, if you own one asset and you self-manage it, it’s probably fine. I own the house next door to me and I self-manage it. You know, we run it all through Atlas, but it’s my next door neighbor. She’s been there for 12 years. You know, she calls me, she knows I own the house. Right. And I still get to tell everyone I have my own rent roll.
00:21:31:15 – 00:21:58:12
Charles
I manage property directly. If you own one asset, it’s probably fine. If you own more than that, you’re probably taking on risk. You shouldn’t, depending on what state you live in. And frankly, God forbid you have to run an eviction. The eviction rules in Tucson are different than they are in Phoenix, are different than they are in Colorado Springs are different than they are, and in Salt Lake City it’s just understanding how to do that stuff and do it right.
00:21:58:16 – 00:22:18:19
Charles
In fact, just this weekend, I was at an Easter party with my sister and one of her friends came up and said, hey, can I tell you about the lawsuit? I just lost to my last tenant because I didn’t give them back all their security deposit. And I said, sure, you know, so just following the rules of how you have to document certain things and, and do all of that.
00:22:18:19 – 00:22:49:00
Charles
Right, it is a little bit daunting. And that’s why you’ve got to build processes. You’ve got to build systems. For us internally, we’ve built teams right, that handle a lot of these logistical things that as an individual be really hard.
00:22:49:01 – 00:23:17:02
Charles
Such a good question. It’s hard. It’s really hard. And and I’d say it’s hard on a in a few different ways. Number one, you do have to have SOPs, right. Standard operating procedures. And when you’re an entrepreneur SOP is a that’s like fingernails on a chalkboard. Like, what are you talking about? Like, let’s just run and go and empower people and it’s going to be great.
00:23:17:03 – 00:23:37:14
Charles
And you quickly realize that’s not really how it works. So there’s the balancing act of stepping back and looking at each process and saying, all right, how do we do this? Let’s just document how we do it today, like step one, step two, step three. And then let’s look at that through the lens of both. Does that ring every bell.
00:23:37:14 – 00:24:02:11
Charles
It needs to ring from a compliance perspective. And is it a and effective right. So there’s a whole process there that that is difficult. And you have to just kind of wade your way through it. The danger of it is you start to lose your soul. And that’s been the balancing act for us, is saying, no, actually, you know, we have a core value that’s simple, empowered and accountable.
00:24:02:11 – 00:24:26:08
Charles
So we want everything to be as simple as it can be. And by the way, simple is actually quite hard. Making complicated things simple is very, very hard. But we spend a lot of time on it. We want to empower our people like crazy, and then we want to hold them accountable to that empowerment. So the only way you can really empower and create accountability is to have really good visibility into the key metrics of the business.
00:24:26:10 – 00:24:54:00
Charles
So where that starts is data and reporting capabilities and really what property management is. And I’m going to quote our our VP of operations, who really is the mastermind behind all of this at Atlas. He’s an organizational guru. I mean, the guy just thinks in, in a, in a linear way that I wish I had that ability. So I can’t take credit for where we are today.
00:24:54:00 – 00:25:13:13
Charles
I give all the credit to him, but he often will talk about property management is an exception management business. So what we have to see is where did we miss the thing that needed to get done and go back and do it? And your ability to track those exceptions, whether it’s in the in the city of Denver, you have to have a rental license.
00:25:13:15 – 00:25:32:16
Charles
If you don’t have a rental license, you’re creating risk for yourself. So where is the exception report that says, oh, these these rental licenses are expiring in the next 60 days, and what are we going to do about it. Right. So a lot of it is being able to look ahead to what problem are we going to have and how do we solve for that problem before it happens.
00:25:32:18 – 00:26:22:07
Charles
And and that takes assembling an amazing team of people. And that’s really what makes Atlas what it is.
00:26:22:09 – 00:26:51:03
Charles
That’s a great that’s such a good question. You know, the very first thing that comes to mind is what are you if you’re selling me a frictionless experience, I don’t believe you. So, you know, I see these things, but it’s like, hey, it’s just mailbox money. It’s just mailbox money. And that sounds awesome, I love it, it’s never the case.
00:26:51:04 – 00:27:12:12
Charles
So, you know, one of the things we do when we hire a new team member is everything we can to scare them out of working for us. And we have them shadow and we make sure they’re shadowing. Days are the worst days of the month. You know, we do everything we can to give them such a real view of what this job is.
00:27:12:13 – 00:27:50:22
Charles
And I think a property management company or, or someone trying to sell investment real estate to an investor should do the exact same thing. They should say, hey, if you’re modeling. So if you’re looking at investment and you’re modeling in, you know, 1.5% bad debt, 2 or 3% vacancy a turn every three years, you’re not looking at reality and you’re never going to hit your modeled returns if you aren’t sitting on meaningful reserves in the event that you have a long vacancy or you have a very difficult eviction.
00:27:51:03 – 00:28:23:20
Charles
We’ve had evictions go over 12 months because there are markets where the tenant friendly legislation has made it such that there’s nothing you can do, and so you’ve got to be prepared for that. Number one, I just want a gut check. I want it to be I want to be living in reality. Right. Number one, I think number two is asking people what their systems and their processes look like.
00:28:23:22 – 00:28:47:13
Charles
How do you do exception reporting? That’d be one of my very first questions, you know, how do you do exception reporting? I think a lot of companies would say, what does that mean? And that might be a red flag. How do you track these kind of critical dates. And then probably one of the big ones would be how do you engage with residents and build a relationship with them?
00:28:47:15 – 00:29:06:02
Charles
The reality is, the resident doesn’t really want to be best friends with their property manager, right? They just kind of want to be left alone. And and that’s fair, right? People want things to be smooth. They want to go on their phone and and I mean, Charles, I can order a book and have it here by 4 p.m..
00:29:06:04 – 00:29:26:23
Charles
Right. Like the ease of all of this in our in our culture today, that’s really what the resident wants. They want to push a button and get an answer. They want to. They don’t want you calling and asking how things are going. Right. They don’t. They don’t want that phone call. So what are you doing intentionally to build trust and to build a relationship with that resident?
00:29:26:23 – 00:29:50:07
Charles
And there are ways to do that that aren’t invasive, but that at the end of the day, drive better results. They drive better retention. They drive better collections. So when we look at our portfolio today, our our single family portfolio that we own and manage is about 97.5% occupied and 99% collected. That’s really hard work to get to those numbers.
00:29:50:07 – 00:30:12:12
Charles
And those are true numbers. We don’t we don’t take out the one unit that, you know, had a fire, or take out the one unit that’s on the market for sale. If we own it, it’s in, it’s it’s in the it’s in the equation. So you’ve got to have those systems and those processes built that, that are, are driving those kinds of results.
00:30:12:12 – 00:30:18:17
Charles
And those are the questions I’d probably be asking.
00:30:18:19 – 00:30:48:20
Charles
Those are those a lot of me talking.
00:30:48:22 – 00:31:11:17
Charles
You know, one, Charles, that if if I were hiring a property management company today, I’ll give you one. That’s just totally counterintuitive, right? Normal property management fees are a percent of rents collected and then some type of compensation for leases and renewals. Right. Well, typically let’s just go with kind of like a broad, broad strokes. You’re going to pay one month, you know, half a month to a month for a new lease.
00:31:11:17 – 00:31:37:01
Charles
And you’re going to pay 20 or 25% for renewal. Let’s just use those numbers. That’s going to be different in multifamily than it is a single family. But let’s just use those numbers. If I were hiring a PM company, I would invert those. I would say, I’m going to give you a half a month for a renewal, and I’m going to give you 20% for a new lease because I’m not aligning incentives correctly.
00:31:37:01 – 00:31:59:04
Charles
I want the renewal. I will pay you more to get that resident renewed because I don’t have to pay for a turn. And you know, when you think about other ways that you can align incentives correctly, I think that’s really important. The other one would be how much real estate do you personally own? When’s the last time that you experienced a vacancy and had to pay for a turn?
00:31:59:05 – 00:32:31:06
Charles
Because when that’s in play, people make different decisions.
00:32:31:08 – 00:33:11:04
Charles
Wow, that’s a good question. I think that I have been the recipient of, or the beneficiary of amazing people around me, and I get to point to an executive team at Atlas that I’m so proud to be a part of, and I get to lead alongside these people. I do think that the the single most powerful leadership tool that any of us have is love, and that if we will love our people well and align ourselves with them, then we’ll get great results over time.
00:33:11:06 – 00:33:33:04
Charles
And I define love. C.S. Lewis defined love as wanting the greatest possible good for another person. And when you approach work that way, when you approach your the team you’re a part of, I want to approach our residents that way, our investors that way. We just want the greatest possible good, the greatest possible outcome at the end of the day.
00:33:33:04 – 00:33:55:14
Charles
And when we do that, we’re all pulling in the same direction. Then I think you get you get results you can be really proud of. At the end of the day, I think the other piece is just think very long term. And, you know, I had a mentor early in my career. Say, Tony, if you will make decisions that are best for the organization now and in the future, that will pay off for you over time.
00:33:55:14 – 00:34:13:09
Charles
It may not pay off for you in the individual decision. And that’s a long term perspective that I was able to embrace and I think has served me really, really well over time.
00:34:13:11 – 00:34:26:16
Charles
Atlas is our website and anybody’s welcome to email me. I’m easy to get Ahold of Tony at Atlas.
00:34:26:18 – 00:34:28:09
Charles
Thanks for having me, Charles.
