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Kairos Revolutionizing Home Maintenance

RELEASED ON 3/24/24

From the 2008 market crash to founding a luxury home services firm with 35k clients, Dean's journey led to Kairos—a cutting-edge water tech company. Tune in to hear how his experience with over 3,000 water damage cases drives innovation in asset protection and conservation!

[Intro Voiceover] (0:00 - 0:22) Welcome to Multifamily X podcast series, Masters of Multifamily Maintenance Conversations. Ready to engage in essential dialogues exploring the multifamily universe alongside top industry leaders? Join us as we explore fundamental conversations for the multifamily space.

Let's dive in.

[Adrian Danila] (0:23 - 0:54) Hello everybody and welcome to another episode of Multifamily X podcasts, Masters of Maintenance. Today's special guest is Dean Fungawang. Welcome to the show, Dean.

Thank you for having me. Dean is the CEO and co-founder of Kairos Water. Dean, walk us through your journey with Kairos.

Tell us a little bit about your journey in general, professional journey and then the specifics with how Kairos started and where are you today and where are you heading?

[Dean Fung A Wing] (0:54 - 8:22) In 2008, the market crashed. I was actually in the mortgage business as a branch manager of a multi-state mortgage company, sort of a brokerage firm and got laid off in September of 2008. Two weeks later, I found out my first kid was on the way and my wife worked for a city out of New York and she also got laid off.

So it was an interesting time. I tell people I went from the top floor to the kitchen floor because the next business I got into is actually as a service technician, apprenticing for one of my friends who owned an appliance service company. I studied for months under his tutelage, so to speak.

In 2010, I started my own company, also in the high-end luxury appliance industry, both laundry and kitchen appliances. So we were working on the big $10,000 fridges and $15,000 stoves, very complicated technology, but it was a niche here in Atlanta, servicing that market. Fast forward over 10, 12 years, I've personally been in about 15,000 homes.

I'd seen over 3,000 water damage cases. Back in 2017, 2016, I was actually looking around for some solutions that were on the market to help my own customers solve this problem. I wanted my customers to not have to have their million-dollar homes destroyed because an ice machine water line snapped, or their sub-zero refrigerator, which weighs like 600-700 pounds, had a line crack behind it and was putting water on the drywall, creating mold, buckling these giant white European oak floors.

I had seen it thousands of times, and water was just a very tricky thing to solve. I looked at certain solutions, like little alarms that would go off, little puck sensors, and realized, man, this is not going to fit underneath this dishwasher or this ice machine. We have to get a probe and try to stick it under there.

What if the person's on vacation? I started just looking at the problem and just digging into it and found out, at the time, I think it was a $9 billion annual problem in the U.S., one of the biggest insurance problems. Like 14,000 people file insurance claims every day in the U.S. for water damage. That's still true today. It's the single largest insurance problem in the world. I think globally, it's about $300 billion, and I think in 2021, Texas, $21 billion of damage.

It's a pretty big problem. I just was glooging around for solutions. Can I just sell my customers the sensor that you can get at Home Depot?

I'll just keep some on the truck or keep some in the car. Customers were kind of like, nah. They didn't really care that much because that's what insurance is for, right?

Famous last words. That's what insurance is for. Most customers had a $500 deductible.

If they had to put 10 sensors in their house that were $50 a piece, $500, it was just one of those things that they just said, look, I'll just take my chances. If something goes wrong, I get a brand new basement renovation or a brand new kitchen renovation I've always wanted. The insurance companies were kind of left holding the brunt of it.

I said, there has to be a better way. There has to be a way for some of the more discerning customers to say, look, I would buy something like that. I started polling customers, asking them, what if there was a sensor that could detect it and notify you with an app?

You got to think, 2016, 2017, we're only probably five to six years into apps being a thing, right? The connected home space was something that was very new and exciting. I just thought, what if I could just help them avoid this problem?

I said, all the solutions I looked at, they weren't good enough. Let's just come up with something that can really be comprehensive and allow us to detect leaks in all the varying ways that it tends to damage a property, right? It could be the water heater.

It could be the air conditioning. It could be plum sources, unplum sources. It could be the dishwasher, the refrigerator, the window.

Who knows? Some pump in the basement. There's just so many things that can go wrong that I've seen happen in a home really step back and say, how do we tackle this holistically as opposed to looking at just, oh, we're just going to come up with this one good idea and that should take care of it, right?

You've got a lot of experience, Adrian, with this issue and you know that it's not always the same. Sometimes it's slow and that could be dangerous because then that creates mold. Sometimes it's really fast.

It's a rupture and everyone's freaking out, but if you're not there, then you just come to soggy carpet and drywall when you find out about it and it's too late, right? Sometimes you can just wait for things to show up and blow up. It was just one of those things where I said, I got to solve this problem.

In 2017, I met an early advisor and now board member to the company, Lawrence Echelboom. I told him, I said, look, what do you think of this idea? You've built an app.

It's successful. I don't know anything about building apps. What do you think if I build this connected water leak detection device and tied it to a water meter with a shutoff?

This was like in 2017, 2016. He said, honestly, I really do see that this is kind of like a fire alarm, right? This is the technology that probably one day be mandated by either insurance companies or building owners, right?

This is something that's just standard because there's going to come a time where it's kind of like, well, how did you not know that there was water in your building? Why are you surprised? Because this is a solvable problem.

I don't know how to stop hurricanes, fires, and floods, but perhaps we can do something about water. So that kind of was like the start and the genesis of the company. I started a company in 2017.

We spent three years in research and development, talking to multifamily owners, talking to commercial real estate owners, getting feedback on pricing and the technology and how they want it to work, talking to maintenance teams one-on-one. And it wasn't until 2021 that we actually launched product. And from our very first customer to now over 15,000 multifamily apartments, I think we'll be in over 30,000 units after the end of next quarter.

It's growing very fast and all of our customers have about a hundred properties that we're in. Not a single customer has experienced water damage post installation of our technology. We've seen a quick ROI and with thousands of sensors, not having any insurance claims post-installation is kind of unheard of in this space.

So insurance companies are starting to pay attention to what we're doing. But at the end of the day, the technology is amazing, but I really am looking at what is the outcome? Are they succeeding or are we just selling tech just to sell tech?

And I think that's like the heart of the company is really technology for a moment and seconds matter. It's a true operational technology as well as a sort of sustainability play. When you look at sort of water losses in a building, also being sort of connected to the energy usage in a building.

So we can be both sustainable with our resource water, but we can also like help protect these very valuable assets from sort of all this risk associated with it. So that's kind of what we've done. We'll continue to develop sort of operational tech as we start to engage with more and more maintenance and building engineers and asset owners and managers.

What are the problems they want to solve that are kind of like no one's really paying attention to, but it's a big problem and we need to take care of it. And we just continue to create solutions, custom solutions for them. That's kind of the genesis of the company where we've gone in the last six years since inception.

[Adrian Danila] (8:23 - 8:48) It's amazing to me that you spent like four years just doing research and talking to operators, multifamily operators. So I want to go back to that particular time where you did your discovery and share with us, please, what are the things that you know you've learned? What were the concerns of the operators at the time?

And what are the concerns of the operators today in 2024?

[Dean Fung A Wing] (8:48 - 22:33) There's your qualitative acknowledgement that there's a problem and there's a quantitative acknowledgement that there's a problem, right? So if I asked you, is water damage a problem? And you say, yeah, it happens all the time, right?

And I say, okay, well, how much does it cost? And the next thing that comes out of their mouth is crickets, right? I don't know.

Real estate is this massive industry, but it's been said many times that they're very bad at collecting data and surfacing it up and making sense of it, right? So data's good, but structure it, figure out what it means and then take action, right? And I think that was the big struggle.

When we first started, we were kind of in a really high time in multi-family, right? Things are just growing up and to the right. NOI is spiking, people are making money hand over fist, assets are trading.

It's just a good time in the market. If you think about when we were doing discovery from 2017 to really about 2021, it was good for a couple of years. And in 2020, then suddenly everyone was scrambling, right?

And figuring out what to do. And I think there's a couple of things that were happening in parallel outside of what was happening inside the multi-family industry. And one of the key things was there was a lot of capital flowing into the economy from this sort of zero rate, zero interest rate environment.

And on top of that, you had a very difficult climate environment. There's a lot of hurricanes, floods, fires that were occurring between 2017 and sort of today, you know, if you look at it in 2021, right? There was essentially like five, six years of very difficult catastrophic events that were happening that cost a lot of insurance losses.

So those insurance carriers suddenly went, okay, we've got all these losses across. And some of them are happening to these multi-family assets. You look at Texas freeze in 2021, that was $9 billion in one state.

You look at California fires and you see insurance companies pulling out. You see Florida hurricanes coming through some assets on the coastline, eighties, nineties, stick built properties getting wiped to the ground. At some point, insurance companies come around and go, you know what?

These prices need to go up because these losses are too high. Initially, you look at providing a solution. And the first question in mind of an asset manager is like, what's the ROI?

If qualitatively, I can tell you water damage is a problem, but then the next thing I ask you is how much does it cost? And you don't really know, but you're making money and NOI keeps going up and your deductibles are fairly low. When I got in this business and I was pulling customers, so what's your deductible, right?

So I'm trying to derive the ROI formula for them and saying, well, how many water heaters did you have plus? How many dishwashers needs? How many plugs did you have?

And they're just giving sort of surface level data. Well, your ROI calculation is incomplete, right? You just don't know how much the problem costs.

So the only thing they were focusing on was how much the solution costs. And so it's hard to make any kind of transaction where you say, look, I'm going to provide you value. And they're like, oh, well, our NOI keeps going up.

Our property values keep going up. My insurance deductibles are low. I'm like, well, this is going to be difficult to sell.

Well, what if we didn't tell you the hardware and we could just prove it to you? We could do a subscription service. Well, that impacts OpEx and they're like, not a chance, right?

So it didn't work. No matter how we wanted to make this work, everybody liked it. It was a good idea, but the willingness to pay for it was a difficult thing because there just wasn't enough pressure, I think, from the market to do something about operational expenses.

And then you would meet with the maintenance guys, right? And the maintenance guys would tell you the truth. And I always loved meeting with the maintenance guys.

So I'd meet with the property manager, the asset manager, and they would say, ah, it's not that big of a deal. Every now and then we have some leaks, maybe $10,000 here or there, or $5,000 here and there. You talk to the maintenance guys, like, man, I'm dealing with like four or five leaks a week.

I'm like, really? From what? Water heaters.

What's happening then? Oh, man, it's like going through the second, third floor, sometimes the drywall and HVAC. Sometimes you have to put the resident in the guest department and sometimes you have to put them in a hotel.

I was like, how much does that cost? And I bet we're spending $20,000 a month. I was like, wow, that's a lot, right?

And so you would start to find out the truth from the guys who are actually solving the problem, but they don't cut the check. A lot of times they don't know exactly how much all of this stuff costs, right? You're pulling from the maintenance shed, you're grabbing a new water heater, whatever it is, right?

And so I think there's always this disconnect that was there between the financial folks that were offsite that were making the decisions to buy solutions and the folks who are using the solutions, Adrian, you talked about a lot. It's like, what about the end user? What about the one actually solving the problem on the ground?

Are you hearing from them, right? Do they want another app or do they want a text message? Do they want an email?

How do you not bother them when they're already bombarded with 30, 40 work orders, right? And then here you come telling them there's a leak across the property and it's just a little bit of water, right? Well, ah, I'm just going to ignore that.

And so we had to figure out all of those things about what the end user and the maintenance team cared about. Could you tell me if it was a little bit of water or a lot of water? That would be really helpful.

And that was like a piece of feedback we got from the maintenance guys. Well, yeah, I mean, last year we were able to successfully do that in R&D. It's just, we could tell you, hey, this washing machine has a little bit of water in it, right?

That way you don't have to drop what you're doing on that HVAC replacement to run over across the community, bother the resident just for a little bit of water. What if you could know if it was a flood? Then you got to drop everything you're doing.

So it sort of warrants a different level of response. And that way the maintenance guys know when to treat something seriously. And when they know, hey, we need to get to this because it's important, but it's not urgent.

Creating context for the maintenance teams was super important. And it's something we've been working on for years because we know that if they ignore it, then the problem still exists. I had one CTO of a big multifamily operator tell me it doesn't matter what the ROI is being.

He's like, if my team does not follow on with action from the data that you're giving them, then we still have a problem. Think about that. I pay for your solution that can solve this problem.

But if they don't react, I still have the problem. And I said, well, you know, this sounds like it's more than just a technology solution that's needed. It sounds like we need cooperation and buy-in from the guys who are actually solving the problem.

You need buy-in and you need incentive structures to kind of help motivate those maintenance guys to be excited about, hey, you know, this way your day doesn't get derailed by some, you know, some water heater that busted on the third floor. And now you got to stop all those work orders you're doing to go deal with that disaster. When you and I know, Adrian, from having seen hundreds, if not thousands of leaks, right, they always start, like a lot of times they just start slow.

And then suddenly, boom, there's an explosion, right? It's like, but you're only coming to it when it's already exploded and it's flooding the carpet. But what if you knew about it when it was only a few drops?

Or what if you knew about it when it was just contained to the water heater pan or HVAC pan, right? And it wasn't a disaster already. If you could be notified about that and you're like, I need to get to that, but it's not an emergency or I can get to that in a few hours, right?

That's kind of like an efficiency that you gain in the operations team that's really desirable for everyone involved. Maintenance guys aren't getting yelled at, you know, your CapEx budget, you can kind of stretch it out. You don't have to change every water heater in like a broad paintbrush stroke, right?

You can just take the water heaters one at a time as opposed to just doing them all at the same time, right? So a lot of this benefit, we had to learn from the interactions with what do the asset managers care about? Maximizing NOI, extracting value, protecting the economic life of the asset.

Well, how do you mobilize maintenance teams to do that, right? And it's part of this sort of whole comprehensive risk management and property strategy, right? If you're trying to dump an asset in a year, you don't want to give somebody a five year contract, right?

Or maybe they're just like, let's keep all the fingers in the holes, right? You know, the image of the boat with the leaky holes, you just got to plug the holes, right? And just hold it tight enough until you can sell it and then just get out of dock, right?

And so you saw this sort of attitude in the early days. Well, fast forward to like 22, 23, you're seeing 20, 30, 40% increases, sometimes even more than that in insurance costs. And suddenly you're seeing massive insurance costs rising.

You're seeing deductibles going from 15,000, 20,000 to 7,500,000 and even 250,000 in a lot of cases, right? And so when these large portfolios have massive exposure across, you know, thousands of apartments, suddenly you start to go, wow, I'm exposed, right? I'm on the beach, I'm in my bathing suit, and there's a hurricane coming.

And a lot of times it's, you know, in this case, it was financial, you're looking at the pressure that you're getting on the premium side, you're getting exposure on the deductible side. And suddenly those $50,000 worth of leaks that you were getting every year or $100,000 in leaks are suddenly impacting in a lot. And now you're paying attention because you're like, man, my insurance costs going up.

It's like my number three expense, capital is now gone. You know, the cost of capital has gone up. People are holding on their assets.

Some of them are distressed, right? You've got all, you've gotten suddenly post COVID, you've got suddenly way more people utilizing that asset in a way they didn't use before, right? We used to go to work in the morning, right?

Come back in the afternoon, you're home for a couple of hours, you know, that night you sleep, you're not stressing out the asset. But now you've got like almost half of that workforce is like staying in the apartment during the day. And now they're paying attention to everything.

The dishwasher is broken. The light bulb needs to get changed. My door doesn't close right, right?

My water heater is busted, like you name it, right? My faucet is leaking. Whatever it is that's causing an issue.

Now suddenly the residents have this renewed focus. On top of that, their rents have gone up, right? So now they're even more demanding that you need to take care of them because I'm paying you a lot of money to rent this apartment, right?

So I think in light of all of those pressures that have descended on multifamily, you know, rents are cooling off. You can't let rents go up indefinitely up into the right. Insurance costs can't keep going up into the right because eventually what will happen is this will force people to be more self-insured.

Well, you're more insured. Now you're on the hook for all this capacity that you have to have to cover your asset. Now you're on the line to make sure that, you know, you don't let all of that cash that you put aside for the insurance captive or the self-insured vehicle go to waste, right?

Because of some stupid leak or some pipe freeze or some building fire, right? You are now more responsible than you've ever been. And I think what insurance companies have essentially done post COVID is they've transferred more and more risk onto the owners.

And suddenly you're like, what am I going to do about all this risk? The transition we've seen from when we started and from where we are today. And I think we've seen more partnerships and engagements from insurance companies on our behalf because they're using this data to figure out, okay, how can I better underwrite this asset for the actual risk that it has?

I can tell you, I've had clients that prior to installing our technology had seven-figure losses, six-figure losses. They install our tech, nothing, literally nothing. It's like drops off.

And their insurance companies are calling us going, how are you doing this? Right? I'm like, well, it just works.

And we work with the customer. So we don't just throw in tech, like a solution grenade, and then walk off. You actually have to have this sort of white glove approach to helping re-educate on board.

There's this change management that's happening, right? Staying on top of that, you really have to keep following them. This kind of comes from my customer service side of being in a service-driven business.

It's like, yeah, tech is great, but serve the customer, meet them at their need. If they want changes, like, I don't like the way this notification comes to you, change it. Okay.

Get my software guys to fix this, right? I don't like this report. Can we change this report?

Yes. Let's change the report. This is how they want to surface it up to the C level or the CFO.

This is how we want to see it, right? And so those key factors of engaging with customers early on, those rejections we had, and how we sort of tailored the solution for this industry is invaluable spending three years talking to the maintenance guy. The other thing that was key with talking to maintenance guys, a lot of times they're so overwhelmed because of the fluctuation of labor, right?

The revolving door that you see, and we can talk about that, Adrian. It's a huge challenge, right? It's like, how do you maintain staff when demand from the residents has suddenly spiked because they're now home?

What happened to the service work orders? I'm really curious. How many service work orders did they have before COVID and after COVID?

That would be an interesting conversation but getting the feedback from the maintenance guys and the chief building engineers, absolutely invaluable. Talking to the asset owners and the asset managers about how they want to pay for this, also invaluable. So we learned a lot of lessons.

[Adrian Danila] (22:34 - 22:49) Dean, next I want to go into specifics about what is your product doing. So let's just talk about the ROI. What is the ROI for a property owner that embraces your solution?

[Dean Fung A Wing] (22:50 - 34:09) What we do is we work with a lot of property owners to evaluate the specific site. No two buildings are the same. I've walked in hundreds and hundreds of properties.

I can tell you like, you get a one property and you're like, this is the way our water is routed. This is the age of the water heaters. This is, oh, these water heaters have all been changed out, but these haven't.

Or these HVAC units are brand new and those aren't. Or the kitchen layout is different here. You wouldn't believe where the water heater is.

It's so different. And I think we take that personal touch of showing up to the property, meeting with the building engineers, meeting with the site maintenance team and saying, you tell us where you see the most problems. We're not going to assume that we know where your particular problems are.

And when they start telling us like, dishwashers aren't a problem, but water heaters are a big problem. Or last year, we had a fire suppression system that froze and it leaked down into eight apartments, caused $300,000 worth of damage. Those conversations are invaluable because now I've got a historical marker where I have a quantitative problem.

I have now not just said, oh, water is a problem or fire is a problem or freeze is a problem. I've now told you how much that problem cost me last year. And I say, okay, if this year I can prevent a pipe freeze, if this year I can prevent another water heater from destroying and getting out of control, I can't stop the water heater from leaking.

But I can tell you about it early enough because the name of the game with water is get to it as fast as possible. There is actually a curve of exponential cost. The longer a water problem goes unnoticed, if you go from a reactionary state where it's oh, we'll just wait for the, oh, the resident will tell us.

Really? That's the experience you want to create? Is you want the resident to be disrupted for you to react?

That's insane to me. I want the experience to be, we just noticed something going on with your HVAC. We'd like to come check it out.

Okay. I haven't noticed anything. You go in there, you find out that coil set is completely frozen over.

There's water now leaking into the condensate pan. And you start vacuuming it out and fixing that refrigerant issue or whatever may be causing that coil set to freeze up like an ice block, right? And you do that before the resident is completely discomforted, before they have to put in a service ticket.

All of that is ideal. And you want to work in that fashion where you are proactive. You're working quicker than this old school reactive mechanism that can just disrupt your entire maintenance schedule.

And not to mention, obviously the relationship with the actual resident. When it comes to engaging with properties, we want to figure out what were your historical losses? Can you just tell us the most common areas, the biggest problems that you've had historically?

Once we know that and we assign a number like, hey, when a water heater bust and we had reactive in the past, it cost me anywhere between $1,500 and $15,000 per water heater. And more so on the second and third floor, not so much on the first floor, right? The first floor we're on slab, no big deal.

Would it be fair to say if next year, if I stock a water heater in its tracks, because I notify your maintenance guys early enough when it was just in the little pan, you had water in the pan build up because the galvanized tank started rusting. You had a little bit of water, water heater was working fine. The resident didn't complain.

You never got a service ticket, but you were notified the moment water was in that pan. You went out there and were like, yep, we got to replace this water heater. You did the job.

Resident's happy. They got a brand new water heater and you don't have any water damage. Would it be fair to say I saved you somewhere between $1,500 and $15,000, right?

So they would say, yeah, that's fair. So that's how we can track every bit of data that's happening in that property where we literally catch hundreds and hundreds of leaks, right? We took one property, we had over $250,000 in water leaks, and it was mainly coming from water heaters.

And actually water heaters that were on the deck in like kind of in a mechanical closet, but it was a cold environment. So what was happening is they had two problems. One where the water heaters were busting on the patio area.

And then the water was leaking from the drywall into the master bedroom. So the resident would be like, why is my carpet moldy and soggy? I don't see where the water's coming from.

And it was the water heater that was out on the patio area. Number two issue they had is they were using a re-circ pump on the hot water heater to run hot water through that evaporator coil, right? So it's like essentially pulling off heat off of the hot water recirculating.

But the recirculation pump wasn't at the water heater. It was in the HVAC closet, right? Where that fan coil is.

That re-circ pump had a seal that would snap and then hot water would just spray out behind the wall, behind the air filter. The resident had no idea it was happening. The maintenance team didn't know until there was a service ticket put in.

Like, why is there water running down into my kitchen? And from the guys below, the guys up top where it actually was happening had no idea. And they were like, how are you going to solve this problem?

This is like behind the wall, like three feet down. You know, like we need to know when there's water behind this wall. And I was like, okay, well, let's see how we can solve this problem.

So we did it for them the following year, zero, zero issues. And we followed up with them multiple times. And like, they were like, yeah, our maintenance guys are like, they treat it very seriously now.

When they see a leak behind that wall, think about it. That can't be a false alarm. You never want water behind that wall, right?

Because historically they were going there to tear that wall out because it's dark, it's damp, it's cold, right? And you got hot, moist water with steam coming behind the wall. It's just like the perfect recipe for organic growth.

And so they just got very serious about solving that problem. And for them, they could, instead of just having this massive capital budget request for like changing every water heater, every research pump going through this massive disruption, they could tackle them one at a time. Boom, boom, boom, boom, right?

It's safe to say that they got an ROI like very, very quick. And because our solution costs nowhere near $200,000. So they were happy.

And we want to talk about the actual solution and what it entails. We can definitely get in more detail if you want to follow up and more broadly talk about kind of our approach. But really we combine two things, right?

We combine a wide area network on the property that's very, very light infrastructure, incredibly easy to install. We're not talking about putting base stations and network equipment in every apartment. We're talking maybe five to seven base stations across the community.

I can blanket the community with coverage, wireless coverage. And that wireless coverage is then used to take all of that sensor data, whether it's leak sensors or water meters or occupancy sensor, whatever kind of sensor you want, temperature, humidity sensor. And those sensors are then going to those base stations and transferring all that data to the software layers and services.

And from that software dashboard, the notification engines will kick in to then notify the site team. Again, nobody really wants to use another piece of software, right? Like you guys got plenty of software to do.

And last time I checked, like no one wants to sit there and stare at a fire alarm waiting for it to go off. Our technology is incredibly unsexy in that regards. You won't want to stare at an app waiting for it to go off.

But when it does go off, this is mission critical stuff. You have to go take care of this problem. Because in other cases, we've had sort of a water tank, a boiler system on top of a 42 story tall multifamily building could have a well joint that cracked.

Well, you know what happens when a boiler has a crack. It's super dangerous. It's also like, when you think about the output, how much water will come out of that tank, because it's pressure on.

You have all these booster pumps that are pushing water through the system. Like that's going to create a massive issue. And a lot of times it's funny because they're like, well, these rooms have drain holes.

Have you ever seen the drain hole is like this big? Do you know how many gallons of water is going to come out of that room in one instant? I mean, it is just unbelievable.

I've had building engineers tell me they've walked into pump rooms and mechanical rooms and it's like three feet full of water. Like you imagine if it breaches that threshold, like it comes down or if there's any kind of crack and it's running down a 40 story tall building, it's disastrous. So we want to detect that stuff as early as possible.

As a matter of fact, that one client, we detected it within six months. And that building was only a few years old. People think it's just the old stuff that's causing problems.

And you know, Adrian, you've seen new stuff, you've seen old stuff. And we had new buildings for large property management and ownership companies. They're like this one building, this one high rise, two years old, $90 million of damages from these pinhole leaks behind these walls on these riser stacks.

I'm like, wow. I mean, it's catastrophic for everyone involved. It had to empty out the building.

You look at those cases and you go, how could we have solved this problem? And that brings me to my other point about how the technology works is we actually can put in a lot of technology. Our newest solution that we launched last year was in the construction risk management space.

So when you're developing a real estate asset, you're putting in hundreds of fixtures and faucets and connections and dishwashers and refrigerators. And how many plumbing connections can you imagine, Adrian, are they putting in a high rise building? Thousands, right?

Or more, right? So you're looking at how many connections you make and you just go, we usually ask these risk engineers from these insurance companies, what's the most common thing you see? And they're like, just human error.

You can't predict when it's going to happen, but you know it will. And it turns out that 55% of construction claims for insurance are for water damage. And the average claim on a high rise building is $10 million.

These big insurance companies came to us and they're like, can you help us solve this? I'm like, that's easy. Because our solution can transport from garden style to high rise, to office building, doesn't matter what it is.

We've invented this smart material. It's a conductive material that can be shaped or sized for any area. So you think about high spatial coverage, you look at a giant mechanical room, how do we cover a whole mechanical room with a sensor, right?

We've developed a sensor, a strip sensor to create containment areas, where if water were to leave this threshold, you would instantly know about it. We created special sensors for high moisture environments, like bathrooms. You're like, well, I don't want to get a bunch of false alarms in the steamy shower.

Well, we fixed that because we can actually print the sensor in a way that it's less sensitive or more sensitive based on the environment. And so we've been able to solve really weird issues. Like I challenge any multifamily owner that's got a water problem to come to us and say, can you help us solve this?

Because we've done this for 158 year old site in San Francisco, 100 year old building here in Atlanta. You have a hodgepodge of plumbing, very difficult situations to solve, and we've solved them, right? From our very first customer to the customers that we have today.

Again, everyone has seen an ROI based off of the historical losses. Again, historical losses is the key thing that you need in order to solve the problem and justify the ROI.

[Adrian Danila] (34:10 - 34:30) You explained very well at length how your product works to prevent plumbing leaks. Let's talk about your product relating to water suppression. How does it work on avoiding floods and disasters?

[Dean Fung A Wing] (34:32 - 39:12) We're members of NFPA. We have been petitioning their technical committee for some time and been working with some other folks in sort of like local fire department here in Atlanta. And last year, kind of at the tail end of last year, we came up with a solution because a lot of folks were asking us, hey, can your leak sensors work on these fire suppression systems?

Can you do anything with shutting off valve? You can't shut off a fire suppression system because that impairs the systems from its primary function, which is life safety. So you can't shut it off, but what can you do about the problem, right?

Let's focus, let's backtrack for a second here. What is the problem with fire suppression systems? Aside from a coat hanger getting snapped on, someone hanging a coat hanger on the filament and busting the filament and water going everywhere, or someone walking in the hallway with a mattress and knocking the sprinkler head off, I can't do anything about that.

It's working the way it's supposed to, right? And you technically, legally cannot shut the water off remotely. Obviously in those cases, you got an emergency situation on your hands, you got to shut it down.

But let's talk about the bigger problem. If you look at Texas, for example, in 2021, a key thing happened. Texas grid went down, buildings got cold, buildings froze, buildings pipes busted, and the fire suppression's the most damaging one.

In a lot of cases, those lines were even frozen down to the fire hydrant because it was like seven degrees for like a week or two. But that state alone had $9 billion of damage. Well, in 2021, NFPA added an amendment to their guidelines.

One of the things was that you could put a dump valve on an auxiliary line, especially an auxiliary line that's exposed to extreme weather conditions, right? So it's technically the building's owner's responsibility to maintain that the fire suppression system is above 40 degrees Fahrenheit because it poses a significant risk because you have the material contraction. So whether you have like these plastic lines that will contract, you can have joints that give, they can get brittle.

You can have sort of valve connections and seals give out. Why is this a problem? Because technically the environment should be over 40 degrees.

Well, if you look at the Southeast of the United States compared to like New York or Chicago, you've got a less winterized asset, right? You're not used to minus two degrees for three weeks, right? So the Southeast of the United States, like even as much as like Northern parts of Florida, Georgia, Tennessee, North Carolina, South Carolina, you've got these states where these 80s and 90s, and maybe even some of the newer assets are just not, the attics don't have enough insulation in it, where your wet systems are, they could easily be exposed to drafts coming up through the soffits.

You could have a lot of really, really cold air coming into that area. And that causes those pipes to freeze. So what we came up with was a solution that could effectively let you know what not only the ambient temperature is, but also the temperature of the suppression system itself.

And in doing so, the user can be notified of that temperature, and they can do one of two things. They can either recirculate water through the system, right? Through an auxiliary valve, or they can go on fire watch because the alternative, the third option is the pipes freeze, the pipes bust, it's 2am in the morning, 10 apartments got flooded, a fire alarm goes off, all the residents have to go outside because you don't know if there's a real fire in the building, right?

The fire department comes out, has to walk the entire property. Now you have to be on fire watch until the fire suppression system gets fixed. But guess what?

You're not the only building in town that had a fire suppression system bust. You and 128 other buildings had that happen. And guess what?

That plumber that's specialized by your chief fire inspector, they're the only handful of plumbers that are allowed to come and touch that fire suppression system and fix it. Not only does that cost a ton, but if those guys are delayed, you're going to have weeks of overtime pay for your staff to walk that building once every 45 minutes to be on fire watch. In certain jurisdictions, you have to actually hire a third party company to come in and walk the building every 45 minutes until your fire system is fixed.

It's a law. We obviously want option one and two. And matter of fact, our very first client that we did this project with was a huge owner, a top 10 owner.

This was a huge problem because in Texas, they had a bunch of buildings that had gotten flooded. And what do people do when the power goes down in a building? This is another risk, right?

When the power goes down and it gets really cold in the wintertime, what's the next thing they do, Adrian, to heat up the apartment?

[Adrian Danila] (39:12 - 39:13) They turn on the stove.

[Dean Fung A Wing] (39:15 - 42:00) That's right. You manually light the stove, right? And you start heating up that apartment.

And that is a massive, massive risk, right? And now you're introducing fire risk, not just water. So we saw that happen too.

And it was disastrous for some. We're taking this overall comprehensive risk management approach to areas that typically people thought, hey, there's no solution for this. We just have to take it on the nose and the insurance company will take care of it.

The residents will understand. You're erring on the side of good natured humans here. But in light of them paying record rents, do you think they're going to be tolerating consistent maintenance issues at a property?

I don't think so. I think if you had solutions that can tell you about these problems long ahead, this first customer we installed this solution for, we installed on January 4th this year. And within like three weeks, the temperatures of the attic had gotten below 40, immediately sent a notification to the key building engineer.

They saw that the temperatures that night, according to the weather forecast, were going to drop into the 20s, low 20s. Well, sure enough, the ambient sensor could tell that the attic was dropping very fast, like hours, within hours, down to 32 degrees. And that night it had gotten down to 20 degrees.

Well, luckily for them, they went on fire watch once they saw the temperatures were opposing freezing, they could drain the lines of the system. And that way there was no risk to the asset. And they just had to pay for a little bit of overtime for somebody to walk the building every 45 minutes.

In the morning, when the temperatures start to rise, they could turn back on and go back off of fire watch. This happened multiple nights in a row. And one of the nights they actually caught a crack in one of the lines, the leak sensor.

They were able to detect that there was a small crack in one of the lines from it just being an old line. And they only had to pay $3,000 for a specialized plumber to come and fix that line, but they didn't have any damage. Last year, over $300,000 worth of damage because of the apartment's flooding.

Same building, same issue, the following year, zero water damage. And the only difference was they knew what the temperature of the pipes were. And that's it.

Like once you know, then you can act and be responsible. But if you don't know, now you're in a reactive state. So again, data is great.

Technology is great. But if you don't act on it, you don't get to experience the ROI. And that's the key.

And so this guy, this team is now gunning to say, how can we solve this problem in the Southeast of the United States? How can we help all these assets that we have that are exposed? We don't know that they're exposed because we're just kind of waiting for something to show up or blow up.

And I just think there's a better way of doing this.

[Adrian Danila] (42:00 - 42:06) Kitchen fires. Help me understand the solutions that you're developing to prevent kitchen fires.

[Dean Fung A Wing] (42:06 - 45:04) I can't prevent somebody like wanting to turn their air fryer on or like have a grease fire and add water to it. I mean, I can't stop. People will do what people do.

Again, the name of the game is solve these problems as fast as possible with just water is just like fire in this in this sense. The faster you respond, the more likely you are to limit the exposure. It's all about limiting exposure.

We have these like sort of gaudy things that are like underneath the vent hoods. Kitchen fires can come from lots of different things, right? You could have a controller system like you think, oh, we're not going to use gas, we use electric.

Okay, great. How many control boards have you seen burn up? How many limiter switches have gotten stuck?

A regulator, you know, burner regulators got stuck with the internal contact is welded shut and that burner stays on. The resident has no idea. They put a pizza box there, brand new building, burn up the kitchen, right?

This happens all the time. But what if you need to set a default? What's the current state versus the future state?

The current state is, well, we've got a smoke alarm. That's one. Number two is you've got a sprinkler filament that can go off if there really is a fire in that apartment.

But you always scratch your heads when you see these things on the news. You're like, how did this whole building burn down? The whole building burned down.

I don't understand. What's the first thing that happens when that fire starts to get out of control? That kitchen gets really hot.

Should a kitchen ever be more than 90 degrees? Not really, right? I mean, call it a hundred degrees.

What if you knew that the cabinets above a microwave were a hundred degrees? Instantaneously, you are notified. You could notify the fire department.

You could notify the chief building engineer, the maintenance team, the office staff. Hey, apartment 101 has temperatures over a hundred degrees. Get up there now with a fire extinguisher.

And you can do that with a device that is incredibly low cost, non-obtrusive. The resident can't mess with it. They don't even know it's there half the time.

It is an easy problem to solve. You don't need shutoff valves. You don't need $500 pieces of fire suppression systems.

You don't need all that. You just need to know when it's too hot in the kitchen and then go solve that problem as fast as possible. Because you're also relying on a resident being awake.

You're also relying on, what if you get a false alarm? You got a resident burning a steak. They're not necessarily burning the kitchen down.

The smoke alarm goes off, starts beeping. They rip the battery out of it, take the thing out of the sink. You've never seen that, Adrian?

You don't know what residents are doing and you have to get ahead because ultimately, as an owner, as a manager, you're the one responsible for the condition of the asset. Because the economic viability of that asset ultimately is dependent on its physical condition. If you don't have good physical condition, nobody wants to rent from you and dot, dot, dot, dot, dot.

That's why I'm encouraging folks to seriously consider looking at a simple solution, low cost. There's no additional operating expense for adding this type of sensor. And if you already have our network, you can just bolt on the solution.

And it's very, very simple to just be notified when things are not headed in the right direction, so to speak.

[Adrian Danila] (45:04 - 45:15) I just wanted to say, I don't think it's ever a good idea to outsource your preventive maintenance and risk management to your residents if you're an operator.

[Dean Fung A Wing] (45:15 - 45:22) The times, Adrian, that I've heard that from even the maintenance guys, it's like, oh, they'll just let us know. Okay.

[Adrian Danila] (45:22 - 45:30) Is that the way you want to respond? It never ends well. Let's chat about your HVAC solutions.

Let's talk about those.

[Dean Fung A Wing] (45:30 - 1:02:07) Yeah. Years ago, we had a client come to us, a prospect come to us and say, look, we've gotten some issues with organic growth at a particular property. They could not figure out why there was organic growth on the walls.

It's a dirty M word. Nobody wants to talk about it. This is maybe more particular to audiences that have properties in the Southeast or properties that are exposed to high humidity.

The thing with an HVAC system is it's doing two things. It's recirculating air and it's filtering air. In the recirculation of the air, it's either heating air or cooling air, both of which remove moisture from the environment.

Either it goes out of that flue or it goes down that condensate drain pan. A lot of people don't know that an air conditioning system can pull 70 to 100 gallons of water out of the air. That's not a plumb source, so shut off valves won't do you any good.

But you know, as well as I know, if you don't have tabs in that condensate pan, if you don't clean that condensate pan, you don't blow out those lines, what happens? It backs up, you get water coming out of that, and it's not clean water, is it? It's nasty water.

That's one risk that you have. I don't know that there's water in the condensate pan and you're, oh, we got an overflow pan, it's got a drain. Okay, great.

You want to wait until it's in the overflow pan and then there's this float switch that sits in the overflow pan that then floats up and does what to the air conditioning system? What's it do? Turns it off, right?

Now the resident's like, hey, my HVAC's not working and it's 96 degrees in Georgia. And what happens? Humidity goes up, temperature goes up, now your maintenance guy's got another service work order.

What if I could tell you there was water in that pan the second you got water in that condensate pan, that overflow pan, before the float switch ever went up and before it cut off the air conditioning system? You've been notified by it right away. That's one solution that you can be notified of.

The other thing is residents, again, can be challenging sometimes, right? It's hard to beat a resident sometimes. You'd be surprised at the things that get damaged or destroyed because of a resident.

I think one of the key things is residents think they can solve a problem by taking this behavior or taking this action, but really they're creating another problem. And one of the key areas that we saw was actually in and around the HVAC operation. So in Florida, it gets hot.

Residents want to save money. I get it. Utility expenses are high.

What do they do? Turn off the air conditioning system. Well, when you turn off, you're removing one of those primary functions of the air conditioning, filtering and humidity and moisture removal.

You do that. Suddenly that dirty pan underneath that HVAC system, that condensate pan, now becomes a petri dish. It literally, bacteria will fester, mildew.

And then the resident gets too hot and they're like, oh my gosh, I got to turn this temperature down because I'm way too hot. They turn the AC on. And what happens to everything that's in that pan that's floating around in that air conditioning?

How did I get this all over my walls, right? How did you get organic growth all over the wall? It's because you turned the air conditioning system off, thinking you were going to save money on your energy.

Now you've created a health hazard for yourself. You want to know the dirty secret of Florida? It is this issue, right?

It is this issue of organic growth. You know it the moment you walk in an apartment, you can smell it. You know that this ain't, I bet if I peel that, that plenum apart, I bet if I took that filter back and I looked at this HVAC coil, there would be mildew everywhere.

And you don't want to face it. You just kind of want to put the blinders on and say, oh, just deal with it when I get the complaint. You don't want that kind of experience in this world because in those places, it's billion dollar company versus poor miss such and such living in an apartment, right?

She's 70 years old, right? Who's going to win that court case? The judge is not going to be favorable to a billion dollar company.

I can promise you that. But you can get ahead of it with a tiny little sensor, right? That doesn't cost very much that can do this.

It can tell you the difference between your air supplied to the apartment and the air condition returning to the filter, right? Because it's recirculating air in a loop. I need to know the humidity of the air returning to the air condition.

And I need to know the temperature because that's going to give me my temperature split. And you know, with an HVAC system, you're looking for about 15 degrees split, right? Between your supply and your return.

That's ideal. If that split starts to close over time, we have an algorithm software that can tell you, hey, your split is not optimal. If I see these two numbers trailing together, that's not good, right?

They might have the fan on, but there's no humidity being removed from that environment because the AC coil is not on. Could be a problem with the condenser fan. Maybe your cycle times are not long enough because some HVAC guy sold you a system that was oversized for that apartment.

So what happens is the air conditioning turns on really quick. It blows freezing cold air in the apartment. You're like, wow, this is really cold.

And then what does it do? Because that thermostat will cut it off. Shuts off the HVAC system.

Now you've got freezing cold air and high humidity, and now you've got moisture on the walls. That's a problem because some guy sold you an HVAC system that was too big for that apartment. What you need is an optimization of runtime of removing enough moisture out of the environment and getting to your set temperature of 72 degrees or whatever it is, right?

What we figured out is that, you know, this is the EPA studies on this stuff. You can look up when you have moisture and humidity that is over 65% humidity for more than 48 hours, you will get organic growth period. And it can happen very, very fast.

And if it's more than 10 by 10 feet of drywall that's covered with this, it's a hazard plane, which oftentimes isn't covered by your insurance, which means that you've got to get specialized disposal to that property and painting over it with peels is not going to do you any good. You know how that is, right? Moldec, you spray it.

You know, you can bandaid the solution all you want, but it is like the honey badger. It does not care. It will keep coming back.

And you're going to keep having this problem until you get to the source of it. And oftentimes the source of that mildew, the source of that organic growth is coming from the HVAC system. And it's very simple to solve it.

You get some coil cleaner, you get the drain pan cleaned out. You make sure your filters are changed on your regular PM schedules. You would not believe how often those filters get dirty faster than the PM schedule by annual.

And you're like, oh, the residents can come by the leasing office anytime and pick up a filter. Yeah, right. You think they're doing that?

Not a chance. And you know what we saw? You know, we noticed Adrian from the sensor.

We could actually tell when the temperature split wasn't optimal. We could tell what was happening. That sometimes it was just the filter was so clogged up.

There was no recirculation coming back because you turned that thing into like a Hepa 10 filter. And now all that dog hair and lint and buildup from that, you know, from that laundry room is like, you know, the vent hose on the laundry room is not tight. And so it's like you get filtered lint coming into that trap.

I mean, it's just, there's so many maintenance issues that can be solved with simple data that tells you, hey, this is not working right. Go take care of it. Dean, amazing conversations.

Very educational content. Our core technology, you know, it started with leak detection, right? And again, knowing about the issue sooner rather than later, right?

And the difference between our sensor and most sensors that you can find on Amazon or anywhere else is those are consumer grade sensors. And you know, when you're dealing with multifamily buildings, you're dealing with commercial buildings, you're dealing with an environment that's a little bit more intensive than a home, 250 homes in a community, as opposed to one home, you've got a lot more redundancy of risk. And so this technology notifies you in any place that you need to know that there's water, the instant, the moment that there's water in that area, anywhere behind the dishwasher, in front of the dishwasher, the water heater pan, the HVAC closet, the washing machine, laundry room applications, hydronic pumps.

We've seen all kinds of areas, P-TAC units in places like New York. We created a specialized sensor just for P-TAC units, because again, we print this material, this conductive material, and that conductive material is attached to this little module. And that module sends out a signal.

It's operating on a 10-year battery. It has the ability to transmit a signal from five to 10 floors of concrete in a commercial building. That means that you have to have 35 times fewer base stations to collect all that data.

You've got this broad covers. Now you've got visibility across your site of the real-time risk and coming very soon to severity context so that your maintenance guys aren't seeing a bunch of signal noise and they're ignoring things. Those are newer sensors that we're coming up with.

And really what we've seen from customers is that they're avoiding insurance claims. You can't stop water from entering into your property because I'm not responsible for the condition of the water heater. But when that water heater does give out, instead of you being blindsided, you know instantly the moment water's in the pan.

It's behind a wall. It's in the ceiling in the closet. Sometimes you have those pancake air conditioning units.

That's difficult to solve. The metal pan in the ceiling with a dropdown. How do you know when there's water up there?

Because it's a metal tray. You won't know until it ends up outside of the metal tray and into the actual closet on their purses, on their Gucci clothes. And guess what?

When it's on a resident's clothes and they complain and you say, oh, you got to file a renter's insurance claim. And then you have subrogation because the renter's insurance company says, is it the resident's fault the air conditioning system is leaking? I don't think so.

So then they go back to the general property casualty insurance policy and they subrogate that thing. Just know that the days of being able to push things onto renter's insurance is going away very, very quickly. And the solution that sits in between the real estate owner and the insurance company is the solutions that we provide.

Real time risk data, what we call building telematics. It lets you know what is happening in real time. That's the water leak detection solution.

We can combine that solution with shutoff valves, which is a more capital intensive project. And it's not for everybody. You can do it on the beginning of a building's life cycle.

So if you're constructing a building, I highly recommend that you start with automated shutoff valves and leak detection solutions because now you're providing sort of this blanket gold standard of risk management protection for the entire life cycle of the asset. Imagine just never having catastrophic issues in that building and being able to hand that off at this position and saying, look, we haven't had historical losses. We haven't had historical insurance claims.

You can acquire this asset at a much better value, right, compared to someone else because our maintenance record is stellar. That is the solution on leak detection sort of shutoff valves. We do have water meters that can give you real time data on the consumption.

And if you have a pipe burst or if you have a low pipe temperature, those things can be also seen through sort of our comprehensive leak detection and water management technology. Then you have sort of other technologies that we combine in conjunction with those technologies. It's like the freeze protection, right?

So we look at freeze protection packages. We're looking at both shutoff valves that are rated by NFPA. I believe we're one of the only ones in the country that have the solution right now.

And it is specifically designed for fire suppression systems. And then you've got not only leak detection in the fire protection package, but you also have the temperature monitoring. So you can see the ambient temperature.

You can see pipe temperatures. You can then use this data to avoid having pipes bust in the middle of winter when you have these cold snaps. What you're going to see in this country is that more and more of the climate as that polar vortex pushes further south, you're going to see more and more extreme cold weather in the wintertime in Texas, in Georgia, in Northern Florida.

You're going to see more and more cold weather. It's going to get normal. And if you're not prepared with a solution, you're going to be surprised by this.

You will have large insurance claims. You'll have residents that are going to have to get kicked out in the middle of the night when it gets really cold. This is a problem.

Our system is also designed to notify your local fire department to let them know, hey, we've detected a freeze condition. We're going on fire watch so that you're in compliance with local safety regulations. You can notify the alarm company in case you need to bypass the flow switch.

All of this can be put together in a package that allows you to provide protection in case of a winter freeze cold snap, where you don't have to tell the residents, oh, just drip the faucet, right? Like you're wasting water and it's unnecessary, right? Because there are ways to, once you know the data, you can respond to the data.

Next is this fire protection solution around kitchen fires, right? Again, we are not by any means saying that this is replacing your fire suppression system. This is replacing your building's fire protection systems, which are all regulated by fire departments and local codes and all that, right?

You still have to have all that, but I'm telling you, there's actually a step before any of those systems go off. And that is just knowing what the temperature in that kitchen above that stove is in real time. You knowing that is the difference between you stopping a fire in your apartment and not.

If you knew that that apartment was a hundred degrees, Adrian, you could get to it with a fire extinguisher. You could wake up the resident, open that door, get in there, solve that problem before it spreads to the whole building. Again, you can also notify the fire department just by the moment that kitchen's over a hundred degrees, notify the fire department via text message, email, phone call.

You can notify your local building engineer, your maintenance staff, your property management. Everybody needs to know the moment that apartment's over a hundred degrees. Simple solution to a problem nobody ever wants to think about.

This is a life safety issue and it's no one else's responsibility except for a building owner to make sure that we take care of that building and make sure we protect residents. So we're here to help if that's something that folks are interested in. Another solution, which is our HVAC sort of monitoring solution that we have.

We've been testing this for years. The problem with HVAC monitoring is that, again, these HVAC systems were like $1,500 HVAC systems to replace the whole stinkin' thing, right? So what we found out is that a lot of folks don't want to spend money.

They don't want to spend a thousand dollars on some complex solution that can tell you if it's the capacitor or the compressor or the fan coil, or you've got a short somewhere or some sensors off. We don't need all kinds of telematics on the HVAC system. You need to know what is the condition of the air returning to the HVAC system?

What is the humidity in the environment? What is my temperature split? What is my cycle runtime?

Is it too short? Is it short cycling because you oversized the HVAC system or is it running optimally? Did the resident turn it off for 48 hours or more and the humidity is over 65%?

These are data points that matter and there's a simple solution, the same one that we use for the freeze protection package, the same one we use for the fire protection in the kitchen. All of that can be utilized also with the HVAC solution. Very simple.

You can bolt it on. There's no additional OPEX expenses for bolting on additional solutions. And a lot of times when you already have our network in place, our network is very low cost.

You're talking a couple of thousand dollars typically for our network. So these are very simple, affordable solutions, quick ROI, focus on the problem, great solutions that your team can actually win with. Operational technology, typically not resident facing.

We don't have apps for residents or anything like that. It's just for the maintenance and building engineering team. And then also for the asset management and property management team.

One of the key benefits you get is to avoid any kind of organic growth claims, which is not only a health safety issue. It's a resident comfort issue. It's an operational efficiency issue for your maintenance engineer.

You can extend your APEX. These are huge benefits for having, you know, what does maintenance guy do if he gets four or five complaints on the HVAC system? What does he do, Adrian?

I'm just going to go grab one from his child. I'm going to replace this compressor. I'm going to pump it full of refrigerant and we're done.

We've got a brand new HVAC system. And it wasn't needed because it could have been something as simple as a capacitor. So when you talk about centralized maintenance, why are they doing that?

Because they're consolidating the skill set into a specialized team to tackle these issues with the properties, because they know they're bleeding cash out because of inefficiencies in the maintenance team. And there's ways to solve that problem with data to say, Hey guys, these 10 HVAC systems are the worst offenders in the whole community. You need to focus on these 10 HVAC systems.

Don't worry about being PMs on all the other, you know, 90%. Just focus on these 10. They are the ones that are the problem children.

You got to solve that problem. And that's how you get to it.

[Adrian Danila] (1:02:07 - 1:02:15) Super interesting conversation. A lot to take on. A lot to share with the public out there.

It's going to be extremely educational.

[Dean Fung A Wing] (1:02:16 - 1:03:15) Any final thoughts? We're in this space now where rents are sort of flat. And depending on what market you're in, you may be dealing with other pressures, right?

There's some regulations that are coming that you should know about. There's all these things that are coming. You know, when you talk about this renter's bill of rights, right?

There's things that are coming as consumed, you know, masked as consumer protections that are really like devastating to the operations of the business, to the profitability of the business. We need to get ahead of all of that. But with solutions, anything we can do to reduce expenses in light of all these external pressures that we may or may not be able to do anything about, I would say is prime.

When it comes to risk management, operational technology, again, not necessarily shiny objects, but things that can get you quick ROI, things that can help improve the resident's experience, help protect the economic and physical life of the assets. That is what we do at Kairos. We'd love to help you and feel free to reach out if you have any questions or inquiries.

[Adrian Danila] (1:03:15 - 1:03:26) It was amazing having you today with us here. You're welcome anytime. There's just so much value in what we've discussed today.

Thank you very much for being with us today.

[Dean Fung A Wing] (1:03:26 - 1:03:33) You're welcome. Yeah. Love being on it.

I'm sure we can talk shop all day long, Adrian. I'd love to do it.