Addressing the Multifamily Challenges

[Mark Cukro] (0:00 - 0:09) We're constantly learning all the time, but you have to pour into here, here, and here, and you have to develop all three. Be fully staffed.

[Adrian Danila] (0:09 - 0:15) Don't overwhelm your staff with work just because you're short staffed. Don't punish them for showing up.

[Mark Cukro] (0:16 - 0:53) Mark my words, and this is not going to change. I've been saying this for 10 years, and you can watch the decline. It is going to get more and more difficult, and I mean remarkably more difficult to find qualified personnel, and not just technically qualified, socially qualified.

If you were to ask someone like list the trades, let's say plumbing, electrical, HVAC, carpentry, masonry, roofing, cement, they don't mention multifamily. People that don't train don't. It's that simple.

You cannot use the excuse of I can't let you go, we need you here so badly, because now you're the person that's making that process worse, and you're multiplying the negative effect of that.

[Adrian Danila] (0:53 - 1:28) That's going to create a nightmare. If you really think that this is how you're helping your assets, I'm telling you, you're absolutely delusional. I'm just going to go ahead and get started.

I want to touch on a little bit, you know, Mark, that's outside of the spotlight. Who are you outside of an educator, a leader in the industry, and your amazing history, if you want to touch on that. What are your passions?

I know that you're a jiu-jitsu instructor, and you know, you're many other things. I wanted to know what you wanted to be when you grew up.

[Mark Cukro] (1:29 - 3:42) Yeah, so there's more to me than just the multifamily industry, right? So, first and foremost, I'm a very happily dedicated family man, and my wife and I have been together for 30 years. I met her on a property many years ago.

She was a prospect, and of course, I wouldn't talk to her, because she was, you know, she was, she might live there. And eventually, we wound up dating, and 30 years later, here we are. We've been married for 25.

And interesting fact, I'm a twin. My twin brother has twins, and we have twins. And so, we're no more twins in the family, but have a boy and a girl.

My daughter just graduated. My son helps teach at our jiu-jitsu academy. I just, I couldn't be any happier.

I'm just blessed to be surrounded by such wonderful, I mean, really, truly wonderful people. I have siblings, and it just, every, you know, so, and that said, now we have two dogs. And both of them came from shelters, and they light up our home.

And so, we're doing very well. And for anyone that may know, we've been trying to adopt a young woman, a young girl from Ukraine for many years. And it's one thing after the other pandemic, and then Russia invades.

And so, but next year, she'll be old enough to travel alone. And so, she'll be coming here permanently to be part of our family instead of just making trips and visits. So, outside of that family part, I am a professional jiu-jitsu coach.

I've been doing that since Brazilian jiu-jitsu arrived in the United States. And I have an academy, have hundreds of students. And this year is a huge milestone.

So, I'm glad you asked. It's, I'm proud of it. We finally bought land and built a building.

And so, and I have more land than I need, but we have a, we had a parking lot built. The building, it's several thousand square feet. It's a brand new facility.

And I feel like I've come a long way from, you know, doing grounds to starting a business 20 years ago. And I just couldn't be any happier. And we get to benefit the lives of a lot of people through what we teach.

That's me in a nutshell, pretty much. And of course, I'm a military veteran for anyone that served. I spent a few years at Fort Bragg and deployed overseas.

[Adrian Danila] (3:43 - 4:09) For the few of you that don't know Mark, we have Mark Kukur with us at a Multifamily X podcast, Masters of Madness. I figured that, you know, we're approaching Christmas. You know, we could take like a very relaxed take and, you know, get to know Mark a little bit.

And then instead, like starting with a typical me introducing him, I just kind of ask him a question and, you know, he went on with it. And this is Mark Kukur. Welcome to the show, Mark.

[Mark Cukro] (4:09 - 4:14) Thank you for having me again. I really appreciate it. And I look forward to our conversation.

[Adrian Danila] (4:15 - 4:38) It's always a pleasure, Mark. I take lots of, lots of things, you know, lots of wisdom after every conversation we have. And I know our audience does that too.

They love our conversation. So I hope to, you know, maybe make this a regular that we're not just taking a couple of years again until we meet. Maybe we do it more often if you agree, of course, and if you can make the time.

[Mark Cukro] (4:39 - 4:47) Of course. It is fascinating how different the same topic is to even a year later that, you know, the same question has a totally different answer.

[Adrian Danila] (4:48 - 5:17) We were just talking about starting recording about, you know, me intending to ask some of the questions that I asked on a previous episodes that I done with you. And I said, I think it's important that we kind of see things in perspective too. See, were they the same like two years later?

Are they any different now? How different are they for the better, for the worse, or just like simply different? So Mark, when you grew up, what was your dream about becoming an adult?

What did you want to become?

[Mark Cukro] (5:18 - 6:46) So as a young child, of course, I wanted to be a policeman, a fireman, an astronaut. And then as I got a little older, I wanted to be a professional athlete, of course, and then a professional fighter. And I will say this, I've always had some idea of being of service to others, our community, our industries, whatever that is.

And so it changed over the years. But the basic theme was I wanted to do something meaningful and purposeful. And my grandmother always had a statement.

She said, always make everyone and everything around you better. And she saw to it. And my parents pushed us.

But, you know, as time goes by, I wanted to join the Army. So I joined the Army in 1989. I went to Georgia, then Fort Bragg, then I got deployed.

And I started doing HVAC as a teenager and a contractor. And I grew up in the trades. So I did you name the contracting trade.

And I basically grew up in the New York City area. But the electrical was the thing that came easy to me, electrical, mechanical, and working with people and managing projects. And so I have been doing some form of that ever since.

And then when I became a jujitsu coach, I just started teaching classes. And I, of course, went to school and took public speaking classes, but I never really thought it would lead to what it is today. So what I thought as a child is completely different.

However, it's still kind of the same idea and theme. The concepts are the same, if that makes sense.

[Adrian Danila] (6:48 - 7:14) You stay true to your core, just some, you know, layers kind of change to the idea. Thank you for your service, Mark. Definitely much appreciated.

How did you become a jujitsu practitioner? Because I'm assuming before becoming a coach, you kind of like go through the ranks and you don't become a coach by, you know, reading a book or, you know, like taking a test. So tell me about that journey.

[Mark Cukro] (7:15 - 9:52) Yeah. So of course I did some wrestling in high school and, you know, I was undecided about it. It was fun.

It was intense. And I'm a competitive person. And even though I try to hide my competitiveness, I'm still pretty competitive.

I mellowed a little bit as I get older, but at Fort Bragg, we had PT, physical training. And once a week we could do some other kind of form of exercise because when you're in an airborne unit, like I was, all you run and you better have good, strong legs and you better be in shape. And oftentimes the equipment is as heavy as I am, if not more.

So these two guys were at the gym and they were in my, one was in my squad and one was in my platoon and they were catch wrestlers, which is a form of wrestling, but it's more like jujitsu and there's submissions in it. So they just, I mean, they beat me like I was a child and I didn't really understand what was happening. And so I said, I don't know what you just did, but I'll have to learn that.

So they taught me a little and I had my interest piqued. And of course, when I got out, I took kickboxing and other arts. And then I took what jujitsu I could find here.

And then I remember the day that people from Brazil came and they just absolutely dominated everyone. And I thought, well, I have to meet these people because I, you know, I want to be prepared for everything. There's one thing I've learned being a boy scout, being in the military is you have to be prepared as much as possible.

So I started training and years later, I started helping to teach. And then I was at the same time going to school and it just grew from there. And it's like, I realized this potential that was in me.

I didn't really understand at the time. I just enjoyed it. And that was my ability to communicate and teach and share information.

And so they always had a parallel with business and jujitsu. And then when I started my own company, I didn't start one. Of course, I had to start two.

And so I started a jujitsu academy with a small group of people while I started my consulting and speaking. And I would put my kids in the carriers, the twins, and I would bring them with me to train, sit them on the side of the mat. And where I went, they went, they were like my backpacks, left shoulder, right shoulder.

And my wife was super supportive and she always has been and still is today. And that was it. They grew up on the mats and I just eventually opened my own place.

I kept saving up everything. I wouldn't allow myself to profit. I took everything I made for three years and I put it back into the business.

And then I got one location, another one. This is our fourth location. And now we built, I couldn't have designed an academy more fitting for what we do right now.

And we own all the land in the parking lot. So it's wonderful.

[Adrian Danila] (9:53 - 9:58) Amazing accomplishment, Mark. What are the things you wish, you know, when you first started your own business?

[Mark Cukro] (9:58 - 12:20) Yeah. So I wish, you know, like anything you learn through trial and error and either you fail forward or you fail and fall off. And that's pretty much it.

I wish I understood a little bit more about the marketing part of it and also how important your presence is. So in any business, you can put anything on paper you want, but if you're not good with people and you're dealing with people, your business is going to fail and you have to have standards and they're not personal. You can't help everybody by lowering standards.

You have to have standards and processes. And you have to understand that when people come to you, whether they ask you a question, they have a conversation, they think you care or they hope they do. And they want to find out.

And then if you prove to them that you do care and that you do try to help, even if it doesn't work, they're going to keep coming to you. And people really want someone to bring out the best in them, but they don't want you to be too harsh about it in the beginning. You have to assimilate into mental toughness.

It's a learned behavior like anything else. Running a business is a skill. And just because you put a sign on the door and have a degree or some kind of certificate or certification, it doesn't guarantee success.

It increases the likelihood of it in most cases. But if you are great at math and terrible with people, you're not going to be very good at running a business that deals with people. And we need everyone in all of those.

So it's not to say put anything down or take anything away from everyone, because we're constantly learning all the time. But you have to pour into here, here and here, and you have to develop all three. And the takeaway is you have to be efficient, effective and proficient.

And if you don't have overlap in those three, you're going to have a lot of shortcomings and it'll get exposed. And you're either willing to fix it or you're not. And sometimes you have to come to the realization that you just don't know what you're doing.

And you have to ask people for help, people that you trust. And very often people you trust don't give you the answer that you hope for. They give you the answer that you really need to hear.

It's kind of like the friend that tells you if there's something in your teeth. It's like when you're eating at a restaurant, that's the friend you value. That's the mentor that you value.

But most of the time you have to work on yourself more than anything else. And so that's a long answer, but that's what I would say.

[Adrian Danila] (12:21 - 12:54) It's an amazing answer. And while you were talking, I'm thinking about how you translate those things that you learn in your teachings, in your current presentations. And it's quite amazing to kind of see that how it translates.

Mark, I want to go next to the current state in multifamily maintenance. What are the challenges, the main challenges that you see the multifamily business, the multifamily landscape facing when it comes to maintenance facilities maintenance in 2024 and 2025? Because we're almost there.

[Mark Cukro] (12:54 - 14:55) Yeah. So the overall theme, you're going to hear this a lot, is still finding personnel, hands down across the board. Even if the job markets get better and the percentages of unemployment come down, they're still remarkably increasing in service and trades.

And the ratio to exit and entrance into our industries in all of the trades, not just us, but it specifically affects us more because we have multiple trades. So there's more people leaving the industry than we could ever fill in. So right now we are at a continuous, ongoing, never ending loss of people, shrinking of our workforce until we do something drastically different.

You're starting to see it now where people are just, they're basically doing anything to get people to work for them. And very often you'll see these kinds of programs and these incentives, but then the people can't take advantage of them because they're so short staffed. So mark my words, and this is not going to change.

I've been saying this for 10 years and you can watch the decline. It is going to get more and more difficult. And I mean, remarkably more difficult to find qualified personnel and not just technically qualified, socially qualified, the hard skills, the soft skills, the emotional quotient, someone that's good with people, not just good at making repairs.

And those are two very difficult skills to find together. And as the workforce declines and ages out, it's going to be more difficult. And right now generation X is pushing 60 and one third of service workers leave the workforce from actively working in the field when they're 55 years old, right around there, plus or minus a few years.

It's just harder on your body. And so as an industry, I think we need to do a couple of things. We really, really need to do a better job at letting people know that our industry even exists.

As strange as that sounds because we're in it, we get it. But most people don't even know that this industry exists. And then why would someone want to work here?

So I think those are the two challenges.

[Adrian Danila] (14:57 - 15:51) What you just said, everything you said, is music to my ears. Well, not in a way that I'm joyful that we're more desperate by the time goes by in finding the qualified personnel and we're losing way more than what we're bringing in. But making the industry known to the world, to the outside world, even making them aware that we exist as an industry has been a challenge.

I talked to so many executives with so many people. And one of the questions that I almost ask every single time is, okay, you just kind of fell into this industry. Everybody has that story, how they accidentally ended up in multifamily.

What do we do as an industry to turn the tables and make this a conscientious decision for people that actually want to pursue a career in multifamily? So that's my next question to you. What do we do?

[Mark Cukro] (15:52 - 17:58) Yeah. So it has to happen at all levels, right? And so there has to be, you can call it a unified kind of approach if you like, but we have national organizations, state level organizations, associations.

Very often they'll promote like a job, but not so much the industry as a whole. Generally, if you look at it, they will promote or market or advertise this is a job for your future as opposed to this is an industry. So if you were to ask someone like list the trades, let's say plumbing, electrical, HVAC, carpentry, masonry, roofing, cement, they don't mention multifamily.

And so I think what we need to do is get some level of recognition to the point that people know that multifamily is an actual trade. It's something that people want to pursue. They want to enter, they want to make a career.

And although you may be a generalist, you can pick an area of specialty. I also think the major shift, and I think this is the biggest opportunity out of all of it, is getting to the younger generations that there is a promising future in trades and in the industry. Now I will say this, there's a silver lining in this because a lot of times people think when you talk about the future generations, it's all doom and gloom, and it's not.

Generation Z, mark my words, they're going to save all the trades, the bottom half. They're far more interested in trades, meaningful jobs, working with their hands, not dealing with bureaucracy and the corporate culture. And they want to just do things by themselves where they can see a start and a finished product and feel like they made an impact.

However, entering the workforce, they have zero trade skills. All the trade skills are pretty much gone out of the United States right now. And if you started today, it would take four to five years for people to get at a moderate level skill set.

So even if we started today and we had everything aligned perfectly, it would take five years for us to get this in the workforce. So I think we need to really get ahead now because Generation X is pushing 60. They're only going to be around for a few more years, which will lead us into other questions later, I'm sure.

But we need to make the industry known, and it's not known enough.

[Adrian Danila] (17:58 - 18:40) This is an amazing way to put it, but how are we convincing the operators to invest in something that they will see the results five years from now, when most of the companies are actually thinking shorter term, right? They're saying our business plan is to keep this asset for five to seven years. But if the market allows a great return, that asset might be transitioned out in two to three years.

So what would be the incentive? How would we sell to owners this program by just being very honest with them at the same time and saying, it's going to take you five years to see the results? How do we convince them to invest?

[Mark Cukro] (18:40 - 20:31) That's the thing like anything else, right? Everything that's aged to perfection takes time and you have to have patience, right? If you make it a 10-year whiskey, well, you're not making any money for 10 years.

If it's five or 20, whatever that is, here's kind of an analogy is, do you want to be known for selling good used cars or trash and you're not trusted, right? So let's say an owner is like they have assets and liabilities. And most of the times our expenses are considered liabilities, not really assets, not investment worthy in many cases, which we're changing.

However, if you were known as an owner that whatever you sell is hot on the market, well taken care of, and you're going to get a premium for it, you're probably going to pay more attention. But oftentimes people don't have the time, they're so busy putting out fires, they don't really have someone that can sit down and mathematically prove to them financially why it's a good decision to sell a property in a better condition. And it needs less renovations and there's fewer surprises behind the walls.

And they didn't discover termites that no one knew about or covered up or whatever. So if you really want to get a return on your assets, you want to sell a property that's easy to sell, premium, moves faster, be known as someone that can buy an asset, turn it around, reposition it, manage it well, keep the maintenance and have really few problems. And you can historically prove that through records and data.

And you're going to get more for your money. There's just no way if there's two properties in a marketplace where one is trashed and you're like, oh my goodness. And then you drive through another with your cameras and your peers and you're like, wow, the grounds are clean, the buildings are clean, even the windows are caulked, the gutters are empty, there's nothing overflowing.

I don't see any really suspicious things. I don't see things painted over and covered up. You're going to feel a lot better about getting your money and you're going to feel anyone that lends you money is going to feel a lot better when they assess the property as well.

And so I think there's a lot to it, you know, but they have to think of it in those terms as well too.

[Voice Over] (20:32 - 20:35) And now a word from Dean Fungawing, founder and CEO Kyros.

[Dean Fung A Wing] (20:36 - 21:47) We've embedded 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 the sensor, the 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 from the steamy shower.

Well, we've 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 know, 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's 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] (21:48 - 22:12) What I'm seeing, Mark, is kind of the opposite of paying to build talent in-house. It's more like more outsourcing, more third-party work being called in versus trying to fill those positions with the same low wages, with no training, with no clear career paths. Is this something that you're seeing too?

Or are you seeing a different picture?

[Mark Cukro] (22:13 - 24:25) No, I'm seeing a lot of the same and some different, right? So something I spoke about at the NAA and the TAA is the average starting pay for Starbucks is $15 to $17 an hour, closer to $17 and a little bit more depending on the marketplace. I can't tell people what to pay anybody else, but just think of someone that doesn't know HVAC, that doesn't know electrical.

They know what Starbucks is, but they've never worked there. And you have a job for the first time in your life. Do you want to work in the AC for $17 or $18 or $19 an hour?

Or do you want to work outside in the sun on the AC, right? And so it seems like kind of a logical decision, but now I had someone too, they're like, well, it's a different kind of personality. Not really, they're in the service business.

And what they want to do is something meaningful. Now, if you say it's a short time, temporary job, well, that's fine that you can get those anywhere. But if you're looking for a career, we need to make it known.

We need to make sure people understand what they're getting into. They're going to learn trades, you're going to get paid decently. And some of the companies are now starting to get a little more creative and innovative with what they're doing to attract employees and to keep them.

And I say this every time, and I don't give out the company's names because they get flooded with people trying to recruit their associates. But there are companies in this industry right now, as we speak, that have a waiting list to get in. They put postings and there's a lobby full of people.

And I'll give you a big company just to use as an example. Nucor has been a steel company, it's been in the United States forever. They put job postings out, there are hundreds of people waiting for those.

They are lined up, they have to go through, it's unbelievable. And they all have the same kind of things in common. They take care of their people, they give them the resources, they make sure that they know and they practice through behavior that their safety is of the utmost importance.

It's not a false claim. It's something that we really believe. They compensate them, they take care of them, they encourage them to have a life outside of the business.

And they want to make sure that they spend time outside their life and they enjoy it. So they enjoy working, that provides that kind of life. And it's a really remarkable culture that they do.

And in multifamily, we need to do a better job at that. There are some places that are amazing, but overall, we really need to improve that.

[Adrian Danila] (24:26 - 24:54) Mark, centralization still takes the central stage. I repeat myself, but take the central stage at most major industry conferences. It did take the stage, I should say, in 2024.

Tell me your thoughts on main and centralization. I know that we had this conversation on one or two previous occasions when you were a guest on the show, but I'd like to get your take today at the end of 2024 on centralization.

[Mark Cukro] (24:54 - 27:30) So I see a lot of people starting to try it. And so these are things, if you're good at implementing programs, it shouldn't take a year or two. If it does, I don't know what to say.

Really, honestly. So it sounds funny, but the Empire State Building was built in 14 months and we can't deploy software in 12. There's got to be some kind of management and execution.

There's two components to this, centralizing the shops or centralizing maintenance operations with software. So the software I'm a big fan of because you can monitor and track everything and assign things and have a workflow. But when it comes to centralizing shops and having people dispatched like contractors that drive a truck or a van, good luck with that.

I know that there's some clients and customers that have no choice. And okay, fine. But if you have a choice, just start to analyze payroll and transportation time.

And for example, if you have an eight hour a day and the average American, and this is true, it'll vary plus or minus, but they work about four and a half hours out of the eight hours a day between administration, paperwork, technology, interactions, and everything else. So now that person has to travel 30 minutes, 10 minutes, four or five, six times a day, it's going to increase the payroll. It's going to increase risk, liability, insurance, and everything else.

So you have to ask yourself, is it really worth it? And why have you really done a thorough analysis? And in my experience, people that try it start to realize that, and then they withdraw and they go back to semi-centralization or decentralization completely.

But for the software component, it's okay. You can manage it, but you're still going to manage your property like it's its own ship, so to speak. But you can't have technicians driving and running all over the city unless you have a very favorable density in the area where they don't have to travel.

My example is I lived in New York City. I grew up there and had to drive back and forth over the bridge. And I forgot a tool one day and I had to get all my tools, put them together, put them in the elevator, go down to the lobby in the service elevator.

And then you have to go to the parking garage. Then you got to pay $30 to get your car. It takes a half an hour to get the truck out.

And you got to drive all the way over the bridge back to Long Island and then go all the way back. Now that's an extreme case, but just analyze the production loss and value that because the hottest, most valuable commodity you have is time. And would you rather save a dollar on a part or save 10 minutes in time?

I'd rather save 10 minutes in time. And if you don't think that way, it's going to be expensive to run your service department.

[Adrian Danila] (27:31 - 27:40) Mark, what are some pieces of advice that you could give operators that they're considering starting to centralize their services?

[Mark Cukro] (27:41 - 29:20) If you're thinking about this, just ask yourself, why? Why am I doing this? Did I read an article?

Did I just hear someone speak at a conference? Or have I talked to people that have been running service departments for many years that already tried this and get their insights? Because you ask 20 people, you'll get 20 opinions.

That's how it is, right? You'll get 20 different sets of experiences. But in those experiences, you'll start to see common themes, common threads, common points, common grounds, similarities, dissimilarities.

And then you can really figure out what you want to do. But the only time that centralization of a shop really works is if you are very close in proximity to a bunch of other properties. And when you have that much amount, you have a high amount of inventory and goods stored in a facility, you better have good security.

And so, these are things to just consider. Just ask yourself, why? And if you're pretty happy with the way that your budget's running and your response times and your repair times and completion times, why would you change that?

Right now, while that's running smooth, then think about it and look into these other things. But from my experience working with so many people over 20 years, I don't know anyone that centralized and stayed that way. They've got some hybrid versions here and there, but nobody stays to my knowledge.

And I hope I'm proven wrong because I really want to look into it. But let me make that straight too. I don't want anyone to think they should do it because I'm saying it.

I'm telling you, in 20 years, I've been in the business for almost 30 now. I don't know anyone that did it and has called or ever had a conversation with me where like, that was the best thing we ever did. It's usually, I wish I knew something.

[Adrian Danila] (29:21 - 29:25) How many times during your career you've seen this trend of centralization?

[Mark Cukro] (29:26 - 30:18) It comes up probably, I don't know, maybe two, every five, seven, eight years, something will come up. Now, let me say this. I commend people for constantly, continuously improving and attempting to do so.

But there are some things like you're going to need a hammer to drive a nail. I don't care if it's a thousand years from now or if it's next week. So, there are some things that are just fundamentally not really going to change, although they might slightly look different or be packaged differently or presented differently.

But always keep that continuous improvement mindset. But just know there are some old school fundamental bread and butter things that work for a reason. And you should talk to people that run service departments as much as you talk to other people in the industry and ask them where they got this idea.

Is it an opinion? Is it an evidence-based thing? Is it a preference?

And I think you'll start to see some different insights.

[Adrian Danila] (30:19 - 31:52) I think where the whole entire thing started this time around was the stagnation of rent increases for the most part. They're thinking, okay, if we can't really increase the rents like we used to, because we're not meeting pro forma, we got to look at our expenses. How do we cut expenses?

Well, we got to do more with less people. So, bingo centralization. Well, if you don't have your basic functions being run right, the right way, like the basics, the one-on-one, do your turns in five days, have parts on hand when you need to, pay your bills, resolve work orders within 24 to 48 hours based on a company policy, be fully staffed, don't overwhelm your staff with work just because you're short-staffed, don't punish them for showing up.

Those are some things that are being missed. And then we're talking about, let's roll out even more stress on the teams. That's what I'm seeing.

And I think that's unfortunate. That's a real recipe for disaster. I had side conversations with individuals at companies saying, we've been looking at centralizing our services, but we are terrified.

Our comps in the area are going through like horrid times, horror times. They try this and there is so much pain. Is this something that describes the situation?

Like you see it, is this your experience or am I looking at things, I won't say the wrong way, but you know, am I seeing like a different side of things that you do, Mark?

[Mark Cukro] (31:52 - 34:00) Is it crazy to think so? No, right? You know, the thing is like, I run a business, I have two, and I don't know anyone that wants to make less money.

Let's just start there. But at some point you got to stop cutting expenses and have a standard operational quality standard, whatever that is. So, you know, it's for, you see this a lot with companies, especially when they try to grow too fast, they try to offer too many products or too many services.

And it's like, you know, I can use Starbucks as an example. How about you just serve a regular cup of coffee in less than three minutes? It's, you know, it shouldn't, you shouldn't have three people in front of you and it takes 30 minutes to get your drink.

If you have a quality of service and turns and whatever that is, at some point, just stop trying to cut the expense and say, this is, this is it because we can't just remove our own headaches. We have to remove headaches for our customers and for our staff. And at some point when you change the sandwich or whatever that is, your customers are going to say, I don't like it anymore and I'm going to leave.

And you're like, but we're doing our best. I don't understand. I just wanted to raise the rent or I wanted to change the service to save a little bit of money.

And you're like, you know what? It's never the big things for people. This is what most people that own companies for a long time will tell you.

It's never the big things. A building burns down, the staff's got it. They're on it.

They call in a disaster relief. They call in emergency services, but it's the little things that just grind on you day in and day out. And then one day, remember it's the final straw.

It's not the final basket, right? I think we need to figure out what we're going to do. Now there are some people, they just don't care.

They're going to run a property in the ground and that's how it is. There are some people that absolutely run top notch, high level, high performer, high thinking properties that look immaculate and spotless and they sell fast and everything in between. So I see that, but I will say this, the companies that have a waiting list to get in, they don't have that pessimistic, negative, squeeze every ounce of blood out of the nickel kind of approach.

They run good operations. They have good vendors. They pay their vendors on time.

They pay their people. They treat their people well. And it seems like it's much easier for them to be successful overall as a whole.

[Adrian Danila] (34:01 - 35:16) There's another aspect of centralization here, and this is a matter of opinion for me, and I like for you to wait on it. Before you even consider any type of centralization like that, running things from the same shop for multiple locations, I think that there's two prerequisites. They're a must.

They're not negotiable. First one is having the technology to enable you to run more sites at a time. Secondly, have direct access to the locations that are being serviced.

I mean to the apartments. In other words, eliminate the trips to the main shop, possibly, but mainly to the leasing office to pick up keys and return keys. And I'm going to say why.

When you have someone servicing two or three locations in a day, they got to be leaving with keys on them every single day. I can guarantee you a few times a week. That's going to create a nightmare.

If you really think that this is how you're helping your assets, I'm telling you, you're absolutely delusional. I can't find a different word for it. If you don't have those two prerequisites, you shouldn't even be thinking, considering starting a centralized program.

I want your take on this, Mark.

[Mark Cukro] (35:17 - 37:23) I can multiply this and I could divide it at the same time. So the technology and access deal breakers, if you don't have that, don't even try. The other thing is resources.

And I know I get on this a lot and I talk about this often. If you have four technicians that do four AC, that all do AC calls, you need four sets of gauges. You need four independent shops of equipment traveling with that individual.

And if you have to pass around tools and weight, like imagine sharing one phone in the office, sharing one computer, having one chair and you just got to wait for someone until they're done. Well, that's essentially what you're doing when everyone doesn't have their tools. And then the other part of that is the environment.

And so what happens is people just think overall, it's going to cost me less. And then the same person that centralized wants to know why their overtime tripled or their response time has doubled or gone up 30, 40, 50, 80, 90%. And like, I don't understand everyone.

I know that centralized told me this, but you didn't talk to someone that was experienced. See what it does to your payroll. You have to have technology.

And let me just say this. If you have technology, you have to have connectivity, right? And it has to work and it has to work for the person in the field.

The other thing is most people don't use all of the components of the technology that you employ, right? So they may use 10, 15, 20% tops. Just give me the quick down and dirty.

This is what I got to do. Because if they start navigating and all of a sudden time disappears, then they're not being productive. You have to have tools and equipment for everybody.

And now remember, you're going to have to outfit vans and trucks, and they're going to have to have everything in those. And it's thousands of dollars, thousands of dollars on wheels driving all over the city. And then of course the environment itself.

So everyone in the office has to know that losing a key is usually losing a customer. If you forget something in your pocket and someone can't get access to something, you just cost someone half a day, right? And then all of the things that come with it.

So this is where I think we all need to work together a little bit better. But the environment and resources are also training, which we can get into if you like. It's my pleasure.

But I think those are the four main considerations.

[Adrian Danila] (37:24 - 37:43) I love that every single one of your analogies is a white drop. Boom. I could hear the white dropping and it's kind of hard to refute that.

For the non-believers, right? I'm a believer. I'm a believer.

But for the non-believers, I think it's very hard, incredibly hard. It's impossible really to refute anything like that.

[Mark Cukro] (37:43 - 38:29) I mean, I've made a lot of mistakes trying to run service departments and I've learned from them. I've listened to people smarter. And the thing is after a while you figure it out and you're like, how come one team that you hire, their region runs like effortless.

There's no drama. Everyone has what they need. There's really no turnover.

And then you have another region with the same exact resources, number of personnel, and it's a disaster. And it's because the things, the allocation of resources in your environment is very important. And it's just overlooked too often because people are looking at a percentage of a slice of something on a budget or a P&L or a statement as opposed to realizing that payroll just tripled.

And so did incidents and accidents, right? And so we got to weigh this all out.

[Adrian Danila] (38:29 - 39:02) I want to stay on technology a little bit. What's your take on technology? Where do you see it currently?

How does it affect? Is it a positive thing for the most part? Is it the right technology?

Because now there's a ton of technology available, but the question is, is that technology that's available, when applied, does it make our team's life easier or does it just add another, more burden, more time that they had to spend on with not so great results? What's your take on current technology in the space?

[Mark Cukro] (39:03 - 41:32) So I'm going to ask you a question and it's a leading question. So if you're listening to this, I fully intend to lead this, right? And so let's say you go to the doctor's office and you go in the lobby, you fell out of form, you sit down and you wait 30 minutes, although your appointment was two o'clock, it's now 2.30. So then you see a nurse or an assistant or a PA or a physician, and they ask you 40 questions and they're entering everything into the system. And then you talk to them for about three minutes and they go, and they hand you a prescription and you go to the pharmacy and it's aspirin or Motrin, right? So I'm just saying like, how many times have we done these types of things? Now, here's the thing with technology.

It should enhance performance, not replace knowledge and skill. It should not slow down the ability for you to deliver customer service in a meaningful, grateful, helpful way to get you towards a solution. If your people are working on technology more than they're working in the field, it's counterproductive.

Technology should enhance performance, not replace knowledge and skill. Now, as the workforce is increasing with younger generations, they're much more technically savvy, but the trades and the tools and everything, they're not as savvy. So that's going to be where their learning curve is.

But what happens very often is you have someone that's never worked in the field, and this is the classic battle, right? Engineering, you name it. The person in the field is like, look, this has taken way too long.

And you're like, well, you got to just trust the process. And like I've been telling you for a year, we could just change these two things, and it'll make a difference. If you don't trust feedback from the people in the field, why are they working for you?

And if you ask them for feedback and tell them that you value their feedback, and you've never tried to implement anything, why would they ever speak up again? They just go, mm-hmm, and they just go about their day. So you have to really understand that the technology can be helpful.

It should multiply in productivity. And if it doesn't, why do you have it? Because if you're going to have technology, it has to actually be helpful.

And I understand everything that goes with it. And I really do, because I've been in the field for so long. I have technology that I wish I got sooner.

And I have technology that I've thrown in the trash and I'm still paying for, and my subscription is almost over. I want the technology that I'm glad I got a year later. And I think those are the types of things that we need to consider.

Really get the voices from the field and ask them, if this was your business, what would you change to run it smoothly and on budget and on time? And watch the feedback you get. It'll be very simple, but very effective.

And now a word from Sean Landsberg, co-founder, Appwork.

[Sean Landsberg] (41:32 - 41:43) What you can measure, you can improve. You did mention an average completion time or tracking completion time for maintenance technicians. What other very important KPIs is Appwork capable of tracking?

[Adrian Danila] (41:43 - 42:22) All the data can also be broken down. All those KPIs can be broken down, like we said, on a property level, technician level, or back up to a portfolio level. But even within a technician, you could break that down based off of the categories.

You can see, how is this technician doing with HVAC workers, with plumbing workers? We also took the concept of KPIs. A lot of companies use a KPI to say, well, how is somebody doing?

Let's look at his KPIs. But another thing that we actually did is we took that a step further, where we actually translated those KPIs into sentence-based comment. The system will actually automatically spit out an actual actionable sentence, whether it's positive or negative, based on that technician's performance.

[Adrian Danila] (42:23 - 42:37) Mark, I want to go to maybe your favorite topic, training and development. What are the key components, in your opinion, of a successful maintenance training program for us in multifamily?

[Mark Cukro] (42:38 - 45:52) The keys for successful training, first and foremost, you have to understand that the time for your greatest impact on an individual, when they enter your organization, is the first several weeks. The other thing is, most people don't want to tell you they don't know something because they don't want to look foolish. They don't want to be looked down upon.

They don't want you to wonder why you just hired them. But training should be for everybody. I'll tell you this as a Brazilian jiu-jitsu coach, and I may have said this before, but I'm going to say it again.

People that train, win. People that don't train, don't. It's that simple.

It's not that easy. You cannot use the excuse of, I can't let you go. We need you here so badly, because now you're the person that's making that process worse, and you're multiplying the negative effect of that.

You have to be the person that's like, you know what? I'm going to tighten my belt for another week or two or more or however many hours, and I only want you to come back when you've gone through training and everything is complete. So now when you come here, you can hit the ground running a little bit faster.

But it's about three to 5% a week of improvement when you hire someone before they can get to the 100%-ish kind of performance in their job. The other thing is, the average training, and please listen to me when I say this, write this number down, or write this phrase down in the number. Nobody, nobody in any segment of the service industries trains less than multifamily.

Nobody. The other thing I want to say is certifications are not training. Certifications transfer liability from an organization to an individual as much as possible, and I can give every certification there is pretty much in this industry.

You have to allow people to train. So what does that look like? If you were to just make a minimum standard, nobody under any circumstances is allowed to train less than 40 hours a year.

If you're a technician, 40 to 80. If you're a supervisor, 100 and above. And I don't mean just putting your phone camera off while you're listening to some kind of training.

I'm talking about actively engaging in training, whether it is online or whether it's in the field or it's a version of both. Just go on any Zoom call or any kind of conference and you'll see out of 100 people, 55 cameras are off and 45 are on. That means half the people aren't even engaged in the training they're getting because they're so busy.

They're supposed to work and train. So I would start with that, and then the other thing is give people notice. I see this all the time, and I mean, Adrian, all the time.

We have an HVAC or a pool class or some kind of certification, and I ask every single year, how many of you had less than 48 hours notice to be here? Almost always, a third of the room raises their hands. How many of you were threatened directly or indirectly or in a joking manner that you better pass or else?

Oh, by the way, good luck. I'm rooting for you. That doesn't help.

So I think we need to get our training at minimum up to 80 to 100 hours per person. And if you're brand new, 40 before you even get started. And I think that'll make a huge difference, and it's not a lot because training pays dividends.

Lack of training is going to get you in court or get an injury. So I would recommend that right away.

[Adrian Danila] (45:52 - 46:24) I was talking to a friend just a few days ago, and he leads a fairly large organization, tens of thousands of apartment homes under management. The compliance numbers for the know, you're looking at like seven, I believe there were seven must have classes throughout the year with some fancy technology where you go into a virtual environment and you're supposed to, you know, play with things. The numbers of compliance were below one percent.

[Mark Cukro] (46:25 - 48:55) Yeah, see, that's the thing. The other part of this, too, is it's interesting just to hear like if you would ask my opinion on what the trades are, I can make a list of trades, right? It's easy for all of us to do.

The simplest thing to do is just run a history on your property and see what people are repairing the most, what's costing you the most money and start there. The thing is, and this is a culture shift, if people are into the trades, and let's say they went to college, they didn't go to college, it doesn't matter, right? You know, there's people that are brilliant that can just look at an engine and somehow they know how to take it apart and rebuild it.

And there are some that have gone to classes and they have no idea and everything in between. We have to figure out what we're doing, but I recommend no matter what, no matter what you say, you're going to training and you better have a good attitude. In fact, if you don't spend money on preventative maintenance and training as a manager, you're not getting your bonus.

And I can't think of a better incentive because if you have incentives that are bonus-based incentives or incentives that are bonus-based, you know what I mean, right? Okay. So what I think you should do is take anything that's preventative maintenance out of the budget.

Take anything that's training, take it out of the budget and require everyone to spend 90% of that. And they have to go to 90% of their training or nobody gets a bonus. Watch how different the shift takes place.

And because we're trying to monetarily incentivize people to save money instead of perform. And if you perform, the money comes. If you don't perform, it's usually seen as a negative expense and people want to know why you're there.

And then they start reducing everything. And it's really tough to deny a top performer everything they need when all they do is just keep killing their goals and smashing their goals. So it's really interesting to watch the structure.

And I've done this myself too with employees. Do you give a bonus for finding somebody new or do you pay them really well and that's their job and they're going to do it the best that they can? And in my experience, the second one is usually the one that gets the best results.

I'm not trying to take anything away from anybody, but if people think money fixes problems and you're full of problems and you double everyone's salary, you're still going to have problems. You have to fix the cultural shift. You have to fix the vibe and the mindset of everybody on the team.

And then generally that will take care of itself. But I don't know anyone that's really had a long lasting improvement just because a bonus was in place. But if that person is incentivized by that, then it will be helpful.

But it's not the largest group of people.

[Adrian Danila] (48:56 - 50:19) Here's a scenario, Mark. You have an on-site team. Service manager is not around anymore.

He moved on. Bigger, better teams. Now you have a group of technicians right there.

Obviously they're ranked. You have your top performer and he's being offered a service manager job because he's the next in line. Basically what you do as a management, you're handing the keys over to a person that's never been trained or the job never is not qualified to a 60, 70, 80 million dollar assets.

Now I try to put this into perspective and tell people when you do that, if you were to invest your money, your hard earned money, and you go to like a money advisor, a person that handles finances and provides financial advice and you ask him, how much money are you handling? How much portfolios? How large is your portfolio?

He tells you 60, 70, 80 million dollars worth of assets. Wouldn't you be impressed? And then would you think that that person is qualified?

That is the question. That is the real question. Would you find that person qualified?

What makes you think that a person with zero training for the job, handing them the keys for an 80 million dollar asset, it's all of a sudden qualified because he's the highest performing ticket runner?

[Mark Cukro] (50:20 - 53:54) These are the things why we have these conversations, right? The insights. Because if I have an 80 million dollar asset, do I want the cheapest person to fix it?

Do I want them to just put paint over wood that's rotting? No. I want you to fix it, but it's going to cost you.

It's going to cost me more to know that you can do that. And now I have to weigh out, is it cheaper to hire a contractor or have someone on staff? And I train them because training is the cheapest thing you could do.

Most expensive thing you could do is fail to train people and let them just get out in the field and start working because they're going to cover it. You're going to find disasters, although it's like a minefield. You're going to find things popping up all over the place.

So I agree with you. And I think this is something that most people don't understand because it's different when you own a building. And I have a couple now and it's like, well, okay, thank goodness I know what I know.

So I'll give you an example. An HVAC company just installed a system for us, which by the way, HVAC has gone up 40% in the past 12 months and it's going to go up another 10 to 20 in next year for sure. And so they put the return grills in and I thought to myself, hmm, okay, can I just ask you a question?

The technician was like, yeah. I was like, okay, wonderful disposition. I said, I know what you have on the drawings, but how is anyone going to change the AC filters?

And he goes, oh, well, you just take this tool and it was a bit extension. It was a 24 bit extension. He said, you just climb up the ladder, lay on top of the light and change the filter.

That was my luck. And I was like, really? I said, okay, can you show me how to do that?

And he was like, oh, and I said, now, I would like to get your supervisor here. You're not, listen, no hard feelings. I want someone like me.

And he has no idea what my background is, right? So I'm just playing stupid. I'm like, you know, it's going to be me and whoever's in the office, just getting on a footstool and changing the filters.

And is it really that hard to move? And he goes, that's not how it is in the drawing, sir. And I said, okay.

So I said, if you were going to build a piece up, fill in the blanks and it was on the drawings, would you build it? Because it was like that, knowing that it was a piece of whatever. And he was like, what?

No. I said, so then you knew this wouldn't work and you put it in there anyway. And he was like, well, that's what the drawing said.

I said, I know what the drawing said. I said, but if the drawing told you to build a wall that was collapsing, would you build it? And he said, no.

I said, would you build anything that doesn't work? And he was like, no. So well, then why did you do this?

And he was like, hang on, let me get my supervisor. So the supervisor came out and he said, I'm sorry, what, what is, do you have a background in this? I said, actually I do.

I've been, I was an HVAC contractor, I've been teaching for many years and I don't know everything. I don't act like I do, but I know a little bit and people should have access to the filters and they shouldn't have to climb on a drop ceiling to change it. And he's like, well, who would do that?

I was like, well, come on inside. So he came inside and he looks, he goes, all right, everybody off the ladder. So he's like, come here.

And we circled up, we talked for about five minutes and he was back in a few days. He made a couple of new pieces of duct work, a transition, dropped it in a ceiling. Everything is easy and good to go.

And so do you want a technician like the one I had to deal with in the field? Or do you want a technician like the supervisor that came in and was like, we can fix that in just a couple of days. No worries, man.

I'm so sorry. I'll tell you what, we'll leave it like it is. I'm not even going to finish a bad job.

I'll go back and make it. We'll come in and install it and you're good to go. And that's the difference sometimes is you do get what you pay for, especially when it comes to technical knowledge and trades.

And I like to share these stories because they happen to me personally too, still to this day. And I'm really glad I wasn't traveling that day and caught it.

[Adrian Danila] (53:55 - 55:22) Those are the best. Those are the ones that so many of us, not just you, but so many of us could learn from and kind of be on a high alert when it comes to just believing everything that's being delivered out there. Luckily, you knew what you were talking about versus 99% of the people that don't, they're not expected to have an HVAC background or to understand how this works.

That's why we're paying a certified contractor because they know everything. They have the drawings, they pass the inspections. The inspection is the holy grail.

And honestly, I've seen inspectors that are learning from the contractors because they're new in the field. They haven't had the proper training. I've seen them literally reaching out to contractors and trying to get educated.

They really mean well, but they just don't understand enough to make the calls. And they're actually reaching out to the contractors to get educated. So that's another, I'll say, funny, not so funny part if you're on the other receiving end of things.

Mark, I want to use the last few minutes that we have today and ask you to share your predictions for 2025. You could go anywhere you want with this. It could be centralization, it could be training, it could be learning, it could be development, it could be people, it could be retention, it could be hiring, anything.

Pick whatever you like and how long you like.

[Mark Cukro] (55:23 - 59:25) Okay. So we'll compare a year from now. So let me just say to the crew that made those repairs, I bought them lunch.

And I thank them for being open-minded because we're all human, right? And they're probably never going to make a mistake like that again. And it cost me a lunch and everybody got what they needed.

My predictions for 2025 is AI is going to play a more prominent role. Nobody really knows what that means yet. We're going to discover things we like about it and things we don't like about it.

It's not going to live up to the hype. Let's just count it. Let's say that.

So if I'm wrong, I'm pleasantly surprised. A lot of the technology is coming out. I think for sure the workforce is going to continue to drop.

We're going to start to see younger generations trickle in, but they don't even know that screwdrivers come in sizes. They don't know the different types of metals and screws. So our training is going to really shift all the way down to the most common denominator, which is this is hardware.

This is what it's for. These are the different grades. These are the tools.

And something that I'm really pushing, and I'm going to predict this and really hope that it takes off, is to see technicians get rewarded with tools in increments for their length in service. So your first day, here's a toolkit. 90 days, here's a toolkit.

So I think you're going to see companies giving out tools more often to the people in the field. I think training will increase, but the type of training is what's going to change the most. I think companies are beginning to realize that they need hands-on and virtual training as much.

They need both of those. And so I think we're going to see that. I think you're also going to start to see the language change.

And this is something I've been spending a lot of time on. You're going to start to see the language change in all of the job postings and advertisements. You're going to start to see technicians that are Generation X and baby boomers start to teleconference in to service technicians that are stuck.

So instead of having a call center for on-call or just trying to find a home, an apartment home to live in, you're going to have a tech center. I think this should really happen, where you're going to say, like, someone's like, hey, Adrian, I'm on an AC call. It's 11 o'clock at night.

You log in. You're on camera, whoever is willing to be available at that time. And you can virtually walk the person through troubleshooting.

Or you can do that with a resident. And then also last year, we mentioned this. And I'm starting to see this happen a little bit, is where companies are hiring on-call services that are outsourced, that do not work as employees.

So I think that's going to happen. I think the conferences are starting to get back to where they were pre-pandemic, where they're buzzing with people. I think we're also going to see a greater focus, once this centralization thing is kind of settled down, a greater focus on getting back to the practical daily routines of old school approaches to running a service department.

And I think that's about it. I don't think there's really going to be anything crazy, but there are some new tools coming out. And the new refrigerants are finally going to be settled in 2025.

And I will say this for everyone, please listen to this. There is no such thing as a drop in refrigerant. And if you just drop in a refrigerant, you can avoid the warranties.

Don't listen to salespeople, look at engineering reports. We want you to do these things, not to give you a hard time and not to scare you. We want you to allow the technicians in the field to do quality work that lasts for 20, 30, 40 years.

It's not about giving you a hard time in the beginning. So I think the refrigeration will change. The employment practices will change.

The language is going to change for sure. AI is going to have pleasant surprises and a lot of disappointments in the way that it works. And you can tell the difference.

There's nothing that's going to replace a human being. And I think we're going to start to get back to that. However, the human beings will have more gadgets than ever before.

[Adrian Danila] (59:26 - 59:56) Marco Kro, spectacular having you back here. So much wisdom, so many mic drops. It hurts to just listen to the truth.

It hurts in a most positive way because we need those honest conversations. Otherwise, we can't be really advancing the industry. We're always going to be playing safe and not say the things that people need to hear versus things that people like to hear.

So thank you once again for being back here and sharing all these things with us.

[Mark Cukro] (59:56 - 1:00:08) I'll just close with this. Please let us help you run your business to win, not run your business to prevent a loss. And there's a difference between those two.

So let's help each other win in life. Thank you very much.

[Adrian Danila] (1:00:09 - 1:00:32) Everybody, thank you for watching another episode of Multifamily X Podcast, Masters of Maintenance. I'm Adrian Danila, your host. I want to thank our sponsors for making this podcast possible.

They're Upwork and Kairos. We hope to see you back here next year in January. This is the last episode for 2024.

Signing off. Take care. Have an amazing afternoon.