Helping Healthcare Scale
Imagine you're friends with multiple CEO's of billion dollar organizations. You can call them anytime you like and ask them all that they've learned about real estate and investing, including some of their biggest mistakes.
That's the mission of this podcast, to teach the insider strategies used by the big guys to everyday healthcare operators in order to get access to the best strategies and real estate at the best prices.
If you need help finding the perfect location or you're ready to invest in commercial real estate, email us at podcast@leadersre.com.
Helping Healthcare Scale
Virtual Assistant Mastery and Real Estate Investing with Neal Bawa
Join us as we unravel the extraordinary journey of Neal Bawa, dubbed the "mad scientist of multifamily." Ever wondered how someone transitions from a network engineer to a successful entrepreneur who sells their company for a record-breaking multiple? Neal shares his story of resilience and strategic pivots, from weathering the 9-11 downturn to creating a booming healthcare education division. Learn how leveraging virtual assistants and data science can push your business to new heights, all while maintaining high profit margins.
Curious about how real estate investments can help alleviate those hefty tax burdens? Neal walks us through his initial steps into real estate, using cost segregation and depreciation to optimize earnings. By meticulously analyzing data, he didn't just find the best cities for investment; he created a popular Udemy course that now boasts over 12,500 students. Discover how innovative problem-solving, hiring virtual assistants, and unique marketing approaches can make even recession-era investment decisions lucrative.
Managing virtual assistants effectively is an art, and Neal breaks down his stringent monitoring practices to ensure productivity. From software tools to strategic hiring practices, you'll learn the do's and don'ts of building a reliable virtual team. Whether it's preventing double-dipping or favoring certain hires for communication roles, Neal’s insights are invaluable. Don't forget to check out the comprehensive, free course "10X Your Business Through VAs" on MultifamilyU.com for a detailed guide on recruiting, training, and managing virtual assistants to supercharge your business productivity.
If you need help finding the perfect location or your ready to invest in commercial real estate, email us at podcast@leadersre.com.
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In 2003, I started my first licensed vocational nursing class with 30 people. In 2006, I started with an associate degree nursing program 2010, I went to a bachelor's program Now. In the meantime, all the technology business had completely returned. We were doing really well. We were growing year over year. But what was interesting is the healthcare division was growing 30% year over year, where the technology division was only growing about 10% a year.
Speaker 2:The goal of this show is to help healthcare organizations scale by leveraging real estate strategies and interviewing high-level healthcare executives in order to pull out lessons learned along the way. If you'd like a free site selection analysis from our team, or you'd like to learn more about how we're acquiring real estate through our fund on the blockchain, visit us at wwwreuniversityorg and drop us a line. That's re as in realestateuniversityorg.
Speaker 3:Hey everybody, welcome back to another episode of Helping Healthcare Scale, where I'm your host, austin Hare, and I'm thrilled to introduce our guest today, neil Bala. He's known as the mad scientist of multifamily. He uses data science and has built a portfolio of roughly 1 billion and over 1,000 investors, and we're going to dive into his story today. So, neil, thanks for having me on the show. Thanks for having me on. I'm excited to be here. Yeah, so I had the pleasure of listening to your speech live at Front Launch Live in Orlando here recently and that was really fascinating, just talking about how you use all the systems and automation and VAs for all the different things that you're doing and VAs for all the different things that you're doing. And so I wanted you to hear your story and have you tell the audience a story about how you took a company from 10 to 400 employees and then sold that for a record-breaking multiple.
Speaker 1:So I'm a technologist computer science degree, data science is my major. I came to the United States and joined a company as a network engineer, teaching network engineering, and within the next six months this bumped me up to management. We had about 10 or 11 employees in that company. It was a high-end technology education and the timing was great because I came in 1997. It was very easy to get into Silicon Valley, get jobs, get consultants. So we built up the technology business all the way to 2001,.
Speaker 1:And then 9-11 happened and we lost about 70 or 80% of our revenue. Now I felt that revenue would come back, but I was very nervous, right Because if it didn't come back for a year or two and nobody traveled, it would really hurt our technology business because a lot of our students were traveling from other parts of the US and coming into our location in San Francisco. So I was nervous. So I went to my boss and said Ian, you've got to have another leg here. The problem with technology is when it's up, it's great, when it's down, it's really down. And he was like okay, so what do you want to do? I said we're in the education business. I'd like to start a healthcare division. And he's healthcare. Really we're tech people Like you're a tech guy, I'm. No, no, there's a huge amount of demand for nurses. Have you looked at this? I'd come to him with lots and lots of research and he had already looked at it himself, actually. So he was like, yeah, this is very interesting. We don't know anything about nursing. And I said, look, half of the education that we're doing is in fields that we don't know anything about either. It just happens to be in technology, so we're more comfortable with it. Not everything that we're teaching are things that we know. And he was like, yeah, that makes a lot of sense, so let's look into it.
Speaker 1:So I started this healthcare division and I dipped my toe in the water with a medical assistant class. So this is a class to basically train people to be medical assistants. And then I went into pharmacy technicians. And then I went into something that really I was passionate about was nursing. In 2003, I started my first licensed vocational nursing class with 30 people. In 2000, I started with an associate degree nursing program. 2010, I went to a bachelor's program.
Speaker 1:Now, in the meantime, all the technology business had completely returned. We were doing really well, we were growing year over year. But what was interesting is the healthcare division was growing 30% year over year, where the technology division was only growing about 10% a year, and so we kept building it up. We became the first private school for-profit school in all of California to have a program all the way to bachelor's degree and by 2021, when my senior partner and founder was ready to retire, he was getting close to 70 and wanted to sell the business.
Speaker 1:I think he was getting close to 65 and wanted to sell the business. Both of our divisions were doing well, right, so they were both moving along and we had basically managed to build a business that was leveraging both of them. And, as you will hear from me today in one of the sections we go into, we were using virtual assistants. We were using a lot of data we were using, and so our profit levels were incredibly high because of the use of virtual assistants. We had a offsite workforce to complement workforce in the.
Speaker 1:US. So we sold the business in 2013,. But we started preparing to sell it from 2011. So we were cleaning up. We basically had a number of business arms that were not growing and we basically killed them. So, even though they cost us a million dollars in revenue and $200,000 a year in profit, we killed them because we needed to clean the business out for sale.
Speaker 1:So one of the key reasons why we were sold for a class-leading multiple. What that essentially means is let's say that your net profit is 6 million. If you get $30 million for your business, that's a 5X multiple right, and then 5X multiples are pretty common for your annual profit. So buyer comes in and gives you a 5X multiple. We wanted an 8X or 9X multiple, which in the education industry was completely unheard of. So we spent two years cleaning up the business, making it squeaky, squeaky, squeaky clean, and by the time we put the business up for sale in early 2013, it looked phenomenal and we had a whole bunch of private equity firms chasing us and eventually we picked one from Chicago Very nice people, by the way.
Speaker 1:Private equity is known to be a bunch of vultures that come in and basically just buy your company and sell off pieces. Nothing like that was happening with this particular company. They were very nice people, they really liked us and both the founder and I kept in a significant portion of our money. And seven years later they exited again and more than doubled our money. So we had two exits from the same business, because the business was so strong that we believed that anyone that could come in and scale it to the next level, bring in more money, would be successful. And we were right. They were successful and so we exited in 2013 and also in 2020. That's awesome.
Speaker 3:So when you were talking about the virtual assistants, you started using them between 2010, when you first started using them, or was it later.
Speaker 1:What's interesting is, this was a technology and healthcare business, right? So it had nothing to do with real estate, but my first use of virtual assistants was related to real estate. So let me tell you that particular story so you understand why it is that I use so many virtual assistants, right? So, for the benefit of the viewers, we've spent millions of dollars on virtual assistants. We have 45 currently open jobs on upworkcom, which is the exclusive website that we use for virtual assistants 45.
Speaker 3:And in general, there's 20, 30, 40 people that we have you recruit from Upwork or you actually just use Upwork continually.
Speaker 1:So it's the site that, the recruiting site that we use. And so all of that was tied back to real estate. So in 2003, I stormed into my CEO founder's office and I said Paul, I don't work for you anymore. And he's like and I'm like I work for the tax man because I live in taxifornia, I have the big fat tax salary and I'm paying 50% of my income to the taxman. So I'm like I work for the taxman, I don't work for you.
Speaker 1:He gives us a nice smile. He's okay, I understand what you're saying. He's my mentor. So he's like look, I'm going to take you to one of my apartment complexes and you're going to learn a lot there. So he takes me to this really ugly apartment complex in Los Angeles. I'm like oh, this is a really ugly place. And he says I know. And I'm like no ugly. And he's like I know it, this is absolutely incredible, right? He's using cost segregation and depreciation to wipe out his income.
Speaker 1:So then the next year he's you know what, neil, we're making a lot of money. Let's just build our own campus. We don't want to be renting with somebody else. Let's build a campus from scratch and I'm like okay, and so I helped him build this beautiful, gorgeous campus and I was invested in that product and so I started getting these depreciation benefits. And all of a sudden I'm like whoa, it's not about how much you make, because I was obsessed with how much I made, it's about how much you keep right. And so all of a sudden, year after year, as we built more and more campuses 2003, four, six, seven, eight as we built more campuses, each year I was earning more money, but I was keeping a higher and higher number as well. So the campuses they helped us be class leading in our business, because everybody else in the education business was renting campuses and we were owning our own campuses and that massively increased our bottom line as well.
Speaker 3:So you were doing the real estate. I'm confused then, because if you're using it as a cost segregation to wipe out your personal income, was it included in the business that you then sold or did you keep them separate?
Speaker 1:It was separate, so we owned the real estate separately and we were basically giving preferential terms to our business. So our business had benefits, but we also were receiving the benefit that the tenant has never moved. It is now 2024 that we're recording this in. The first campus was built in 2003. So for 21 years it's had the same tenant and Austin. When you have the same tenant, you're always going to make more money because there's no turnover.
Speaker 1:We knew we had a great business and so, even though the tenant was getting a discounted rent, overall, our profits were significantly higher than they would be if we tried to rent it out to other people. And then I had new tenants every five years and had to pay for tenant improvements and things like that. So it was a fantastic move. But as I was going through this process, austin, the money in bank was just growing because I was paying less and less in taxes but I was earning more and more. So by 2008, I'd gotten to the point where I had seven figures in the bank and I was ready to make the investment.
Speaker 1:But I start hearing all this bad news real estate is crashing and the world is coming to an end and Lehman Brothers is going out of business and now nobody wants to buy real estate. So I'm like, but I'm a data scientist, I should take a data-driven approach. So I hire a Ukrainian hacker and I basically say let's spider the Bureau of Labor Statistic website and Zillow and Trulia and rentcom and all these websites and let's gather information on every single city in the United States. Because I was trying to figure out the answer to one single question and this, by the way led to my most famous course, which has 12 and a half thousand people right now taking the course On Udemy. There's a course about this has 12 and a half thousand students right now. And all of that came out of this one question, austin.
Speaker 1:The question was which city in America is the best to invest in today? I knew that the answer to that question changes every year. There's different cities, some go up, some go down. But I wanted to know what it was today and I wanted to know in a data-driven way. I didn't want to ask Austin, I didn't want to ask John, I wanted to know for sure, based on a certain methodology. And so I went around looking for somebody. I was like I should just be able to buy this and I couldn't find anything. I was shocked because real estate is the largest asset class in the world, bigger than the stock market and I could not find a data-driven, data science-driven methodology to measure cities. Now I now know, in 2024, that there's a company called CoStar that gives you a very good way of doing that, but CoStar licenses are $50,000.
Speaker 3:And I didn't even know CoStar existed back then. So I'm like, okay, well and CoStar is only as good as the rep. There's a physical person that has to take the data, pull it and put it in the software, and a lot of times they're outdated too.
Speaker 1:Oh yeah. Yeah, it's by no means perfect. They're a flawed product, but it's certainly there and certainly leads you in the right direction and gives you useful data. So from that perspective, they're very beneficial.
Speaker 1:The catch, of course and this is important for you to understand the catch was that I didn't have access to CoStar. I didn't know anything about CoStar and wouldn't have been able to pay $50,000 anyway. So I'm like, okay, maybe I'll just design my own, I'll make something rudimentary. I'm a data scientist. We gather data all the time and we'll put it together and we'll churn it. So I churned the data. So the Ukrainian hacker gives me terabytes of data.
Speaker 1:I put it into a statistical analysis software called R. Look up it. The software is actually just called R and basically it gives you insights based on the data that you put in. These days, the software uses AI. Back then you had to do a lot of things manually. So I put it in and I come up with a city called Madeira, california, and Madeira, california, luckily happens to be only 144 miles away from where I live in the San Francisco Bay Area. So I was like, yay, didn't think that California would have the best city in America to invest in and the software basically had come up with a major insight. It had said that in an environment where prices are crashing, the most important factor in making profits is the drop from peak to trough. So the peak was in 2006 and the trough was in 2009. And so that drop for Madera California was 71. And so what happened is prices in Madera California had dropped below replacement value, right Like to half of replacement value. So I get in my car, I drive 144 miles, I go to Madera.
Speaker 3:This is in 2009 that you're doing this 2009,.
Speaker 1:Yeah, 2009. And so I drive into the city and I see that there's entire streets filled with these beautiful, brand new four bedroom Kaufman and Broad single family homes. But they're gorgeous, right With stonework, they're clearly brand new and some of them it's clear that nobody's ever lived in these homes, but they're all empty. And so I go to a broker and I say could you tell me how much it costs to build one of these homes? And he says about $250,000. And I said how much are you selling them for? Oh, $95,000. I'm like how can something that costs $250,000 to build be sold for $95,000? He said that's because what Kauffman and Broad did, this is the national builder. What they did was there's a bunch of farm workers around Madeira Madeira is surrounded by farms and so they would call them in and say do you want to buy this beautiful property? $300,000 and a stated income? So we'll just, we don't care about your income, you just sign here and you buy this property and it's going to go up in time.
Speaker 1:So now there's thousands and thousands of homes in this city that are brand new, that nobody's ever lived in, and all of those farm workers have left because they know that the values have fallen to 95K 95K in bulk. You got to pay a little bit more if you're buying one at a time. I'm like this is a steal. And he's I know it's a steal. So I'm like so why don't you have a hundred investors chasing you? He's first everyone thinks this is a bad time for real estate. I'm like no, no, look at my data. My data shows this is the best time in a hundred years best time in a hundred years to invest in real estate. And he's like yeah, there's, I don't find people like that. How did you?
Speaker 3:okay, I know you looked at the data and you were able to come at the answer of now the same time. It was really scary out there, like I was. Just I was still in college and I wasn't. I just I wasn't dealing with it firsthand, but I I heard a lot about it. So I guess my question is I have a lot of people that always say, like, buy the dip, but then, at the same time, when it comes, when it comes time to actually catching a falling knife, that's effectively what you're trying to time, like when is it going to stop falling? So, like, how did you know that it wasn't just going to keep? Because that was the thought, right? Obviously, hindsight is 2020. We, of course, yeah, 90k on, like paying for $250,000 worth of an asset, like it's obviously a great deal, but still the thought is okay, it's going to keep going down because just nobody wants real estate, right? Like when it's going down, you don't know when it's going to turn around. So what made you so confident during that time?
Speaker 1:Just the cost to build, so cost of replacement, right. So I knew that the US was three, four or five million homes short. I also knew that, looking at the last hundred years worth of data, the market had only been below cost of making anything once before for a few months back in the fifties. So the entire premise what made me confident was not only were we below cost of building, what made me confident was not only were we below cost of building, I was buying at 40% of the cost of building, right? So we weren't 10% below, we weren't 20% below, we were 60% below cost of construction.
Speaker 1:And when I looked at that math I said there is no statistical possibility. There is no statistical possibility that one day in the future and I don't know when three, five, seven, nine years later, this is going to hit 250. And I was actually more conservative than what happened. All of those homes are worth $400,000 today. So bottom line is, when you do data analysis and when you see a very high correlation between two things, you become convinced. Once you see a correlation at 98, 99, 99 cent, you become convinced that these two things are highly connected and the cost to build is highly connected to price, and so, with a connection that's almost a hundred percent, I knew that eventually the price would get pulled back to 250. I just didn't know when but I didn't want to lose money on it.
Speaker 1:So I was like so I need to rent these out. Right, I speak to the broker and I need to rent these out, and he's yeah, that's the problem. There's like a 1500 of these homes that are empty in Madera and most people want to rent in Fresno because there's a recession going on and they feel more comfortable living closer to Fresno, which is a major market. I jump into my car, I drive 22 miles South If I go, walk into a broker's location, I say I want to buy an ugly three bedroom property.
Speaker 1:And he's no, I have these beautiful, brand new four bedroom properties to show you, but no, I would like an ugly old three bedroom property to buy. And it gives me this weird look. Another crazy idiot from Silicon Valley and sells me this home on Summerfield Drive in Fresno and I think I paid $84,000 for it. It wasn't exactly ugly, but it wasn't very good looking because my goal was that I wanted to push those people back to Madeira and I needed something that was not as good looking as what I was trying to say, an idea.
Speaker 1:So that day is when I hired my first virtual assistant. So I basically realized that I needed a very large number of leads to do what I was planning to do, and I'll explain what I was. It was in a minute and I was like I need a full-time virtual assistant on the phones, and so I did my research and hired a lady in the Philippines, and this was before Upwork even existed. There was a predecessor website and there were a few people Before or after Tim.
Speaker 1:Ferris' four-hour work week. So I had at this point I'd already read the four-hour work week and I'm a huge fan of Tim Ferris and I talk about all the different things.
Speaker 1:I'm a life hacker, just like he is, and so I'd read the book at that point of time, but I hadn't fully absorbed everything from the book itself. So I knew a little bit about virtual assistants, but not a lot. Remember, I haven't used them in my company yet. I've just been growing my company using US employees, and this is 2009. The last four years of my company is when I really went all in on virtual assistants. All of this happened because I needed to rent one property that's how real estate is really tied to the rest of my technology because of this one person. So I hired this lady. Her name's Julianne. She's in the Philippines. Back then, I think, I paid her $3.20. And I'm like okay, so I'm going to put you on the phone, and this is a virtual phone that I'm going to give you. You're going to basically have this headset and you're going to take calls from eight to five.
Speaker 1:And I go back to the Ukrainian hacker and I say here's my property in Fresno. This is an old rental property, and here's the pictures. I want this property to be number one on every single rental board, like apartmentscom, rentcom, realtorcom, all of the different places. I want it to be number one and I want you to write a script to refresh it every hour so it stays on top.
Speaker 1:He's like why do you need so many leads? It's just you need one renter, right? No? I'm like no, I need about a thousand people. And he's like why would you need a thousand people to rent one property? I'm like, just do what I'm saying, get me a thousand leads. And he's like okay, it's your money. He's probably also thinking this crazy guy from Silicon Valley and so he does what I want starts ringing, there's hundreds and hundreds of people calling and Julian says that property there in Fresno, that one's sold, that one's done, it's rented out. But I have this website called fresnomaderahomescom, which have these 10 beautiful homes, and I'd gotten permission from the bank to put some pictures there.
Speaker 3:You hadn't known them yet Known who, you had not purchased the homes yet.
Speaker 1:No, I hadn't known them, I hadn't bought them yet because I was afraid just like you, austin, I was afraid of making a mistake. So I went to the bank and I said I'm going to try and rent these out and I'm going to show these properties to some renters and if anyone's interested, before I sign a contract, I will pay cash for the property. And Julian starts getting these calls that there's these 10 properties in Madera. And most people are like no, I'm looking for a property in Fresno, so in Fresno. So she makes an offer, which was the magic If you jump in your car and drive 22 miles to Madera and you don't rent our property, we will give you a $50 Amazon gift card, okay, or a $50 Visa gas card. And most people consider us to be insane. So they basically hung up on us.
Speaker 1:But roughly one out of every 20 or 30 people that called believed Julianne and said fine, I will take the $50 card and I will go check out this property. And we got a thousand leads and roughly three 400 people went to the property, checked it out and I was signing rent contract after rent contract and what I was doing is basically buying the property with cash, immediately applying for a refinance with the same broker that was actually selling the property. He also was doing refinancing. He was also a loan broker and I would pull out about $80,000 out of a $95,000 property and rinse repeat and I was doing this once a month Was the reason that you're buying it in cash and refining it because it's faster Because I couldn't.
Speaker 1:The bank would never let me sign a rent contract the next day unless the property was actually mine. So the bank was like it's illegal to sign a rent contract on a property you don't own. So what I would do is, the moment the tenant was ready, I would immediately buy the property, and back then they were like selling them in three days. It was different because they were so desperate. The bank was so desperate. Wow, okay, wow.
Speaker 1:Three days, Three days four days turnaround with a firm that a closing entitled company, because it's all cash right. All cash is very quick, purchase right. So I buy it immediately, sign the rent contract and then go back and refinance it. And here's the thing that convinced me that I was doing the right thing. Even back then, rents were a thousand dollars and today, those same properties, the rent is 3000. Even at a thousand dollars, my loan was only about $73,000 at 4%. So I was already making $6,500 a year. I was self-managing, but I was making $6,500 a year and I still had fundamental belief that this $95,000 property was going to hit $250,000 at some point in the future. So I knew that I was going to win now and win in the future.
Speaker 1:And when I did that, it really changed my life because by the time I had 15 of these properties and then I started buying from my mother-in-law, sister-in-law and everybody else I could find because it's incredible and I started teaching the location magic software that had bought me to Madera California, first at a meetup group and then on udemycom, and before I knew it I had 20,000 people following me. So at a meetup group and then on udemycom, and before I knew it I had 20,000 people following me. So it really changed my life because in steps, firstly, I got income and I knew I wasn't tied to my tech job anymore. I love my tech job. You work 14 hours a day and you're like what, if I want to work 12 hours today, maybe my boss will fire me. I didn't have that fear anymore because I had $15,000 in income, right.
Speaker 1:That had nothing to do with him and I'd learned something really powerful, really new. So it really changed my life. And then I became obsessed with. Instead of having this one virtual assistant, I'm basically going to take my business, which has 300 employees, and I'm going to find a way to input 30, 40, 50, 60 of these people. And when you take 60 people that are in the United States off, those 60 people were earning roughly $4 million a year in salaries and you're replacing them with half a million dollars in salary, that $3.5 million profit number at an 8X multiple, that's $28 million. So my company's selling price increased by $28 million.
Speaker 1:So we hired so many virtual assistants. We hired them for lots of different things in operations and recruiting and marketing and sales, you just name it. They were accounting, they were everywhere, and today in my business I keep a 50-50 ratio. So I have a org chart of about 45 people, of which roughly 22 are in the US and 23 are in the Philippines 22 in the US and 23 in the Philippines. You said, yep, philippines and other places. So we've got some Ukrainians, some people. We've got some Indians. The Indians are very good at accounting and dashboarding, so we like hiring them for that. They're also good for project management. The Filipinos are really great at general virtual assistant stuff. So we hire them for lots of different countries, with the Philippines always being about 80% of the total hires. But the key is it's a one-to-one ratio, right? So you build a company.
Speaker 1:I don't like using virtual assistants because a virtual assistant implies that they do other things. So we require that 30 days after they join us they drop all of their other contracts on Upwork and then after that they're never allowed to work for any other company. As long as there are employees, they work Pacific standard hours. There is no flex hours, meaning they can't start early, they can't finish late. They have to work eight to five Pacific standard hours, eight hours a day.
Speaker 1:So it's a remote job, but it is not a flex job and we monitor them very heavily. Every screenshot, every click on their computer, every mouse click is fully monitored. What software do you use to monitor them? So the Upwork basically does all of the monitoring information and then we download the data from Upwork and we create custom reports and those reports are basically a ranking of nine, with nine being the highest, and if somebody is below eight we know on that ranking that they are slacking, and so we load them up with more work If they don't do, if they can't manage that load, then we fire them.
Speaker 3:So I thought Upwork was just for the recruitment, but is there something about Upwork that you use to keep consistently using? Absolutely.
Speaker 1:So one of the things that is not well known is that when you are paying Upwork, upwork is taking screenshot of what the employee is doing, and that's how the Upwork engine works.
Speaker 1:Whenever a virtual assistant starts their day, they have to actually click a button on their computer to start the Upwork clock. The moment they start the Upwork clock, that same software is now basically monitoring what they're doing. Now the software doesn't just take screenshots, it actually gives a numeric ranking to how busy they were during each hour. So if you're less busy, you might have a ranking of three. If you're more busy, you might have a ranking of nine or even 10. 10 is very hard, but you have a ranking of nine. Download all of those reports and average them out across a 40-hour workweek, and you had to maintain a busyness level of eight. And then we assigned a person in India as a project manager to spend four hours a week auditing all of those screenshots to make sure that not only were they very busy Austin, with scores of over eight, but they were busy with our stuff. So every time he would come across the software that we didn't use in our company.
Speaker 1:He would go into Slack and post that and say hey, john, could you tell me what this software is that you're using? Because we don't have it in our software stack. And so over time, the virtual assistants, through their own Slack channels the Philippines team has their own Slack channels would warn everyone else. This is a company that keeps an eye on you. You cannot use any software that is not related to their company. You have to maintain a very high level of busyness, right and again.
Speaker 1:Sometimes we just weren't giving them enough work. So they were at seven, seven and a half, so we just load them up with more. So ironically and I'll get in trouble for saying this, austin, ironically I cannot be big brother to my 22 American employees, but I can be big brother to my 23 Filipino employees because it is accepted in their culture. If I tried to do what I just described with my American employees, not only would they leave, I would get nasty reviews on web online websites. Right rankings for my company would go down because culturally it is not accepted like absolutely accepted there.
Speaker 3:And what I would say in your defense is I have firsthand experience in this, using online jobs at pH as a platform to recruit VAs. Every single one was double dipping, like every single. Like you took to your point about the Slack channels, all these things, like 100% one. Whenever I hired them, I would say hey, we use free monitoring software. We take screenshots. When you're on the clock with me, I expect you to work for me. Yeah, that's fine, I agree, I agree, I agree. 100% of them ended up getting multiple jobs. So that's, I think that's something that is less common over here. So I think that's why it's probably more frowned upon to have big brother mentality, and I think that it's absolutely justified when you're doing it over there, because it's such an ingrained part of their culture. I don't see any other way to get good productivity out of it.
Speaker 1:Yes, and it's not considered bad in their culture to be doing these multiple jobs. Now let me tell you something else that'll get me in trouble. So, obviously, because we were monitoring, remember, the first thing we do is get rid of all of your Upwork jobs. That's number one. Number two we monitor your screenshots and we audit them every day, right Every week.
Speaker 3:Number three we have this how often are they taking screenshots?
Speaker 1:Is that the screenshots are every time something changes on the screen. So if nothing changes on the screen for two minutes, then it won't take a screenshot, but if something changes three times in five seconds, it's taking three screenshots. So we and we created internal training processes and we definitely did not want anybody from the Philippines to be doing the auditing, so we had hired somebody from India who was also a project manager.
Speaker 3:Did you think that they wouldn't do the reporting because they're friends or something being in the same? Yeah?
Speaker 1:I didn't want there to be a, so I wanted somebody from outside of the group to be the ones that was auditing them, and that was very successful, I remember. Even with all of these things, even with us having a minimum eight out of nine ranking us not allowing otherwork jobs, us screenshotting them, they could still use a second Upwork profile and a second laptop to cheat on us, correct? Now it would become fairly obvious, because their scores would dip below eight, because, obviously, unless you're some genius, you can't simultaneously be working on both laptops. Right, you're bouncing back and forth, and so your busyness score is falling on both sides sides. And so we were able to wean them out.
Speaker 1:But here's a few things that we learned. Number one the people that were stealing time was a 70-30 ratio in favor of men to women, so 70% of the time theft came from males and 30% came from females. So culturally culturally females were more okay with not having time theft. Second, if you're the kind of employer that follows a very well-defined big brother strategy, the women would just scare it's oh yeah, I'm going to lose my job. And so they, even if they were stealing time from other employees, they wouldn't steal it from you. The men were more brazen. They were like catch me. So, as a result, at this point, our ratio of men to women is about eight and a half women to one and a half men.
Speaker 1:Right, because we statistically found and I know I'm going to get in trouble this is sexism. Blah, blah, blah. This is just math. I am a data scientist, I follow mathematics, and if my math tells me that the women are much less likely to steal time from me, I'm going to hire more women. Also, we found that the women were easier to understand on the phone than the men. Their voices are lighter and thinner, and so it's easier to have them talking with our investors and talking with other people. So the men are more restricted to back office stuff like website building and data cleaning, where the women have jobs that often require them to pick up the phone and call people in the US, and so this has worked really well for us.
Speaker 1:The last thing and I'm going to teach you something very useful here, because I have Upwork up on the screen and so I'm not going to share my screen, but I'll give you an example of what we're doing the last thing is this Most of those people that steal time, get low ratings from the employers that they have. Why? Because they're stealing time. They're not very productive. They're not very productive, the employer doesn't like them. So here are all of the steps that we are required to follow, that our recruiters are required to follow on Upwork, and most of these steps also work If you want to share your screen.
Speaker 3:We can post this on social media too, or we can just go through it verbally.
Speaker 1:It's up to you. So I'm going to share my screen for about two minutes so you understand why this is so critical, right? So here I am on Upwork and what I've done is I've typed the word virtual assistant in, and these are all of the different things that our staff is required to do. So number one once I type in virtual assistant and I get to this screen, I go into advanced and I actually type in exact phrase. So I'm removing it from the tier, all of these words, and I'm doing exact phrase. When I do exact phrase, I get a higher quality of person, because now it's not the word virtual somewhere in the resume and assistant somewhere else. So now I've got all these people and I'm going to drag this over to the right. Okay. So in terms of quality, the people that cheat less or double dip less are only the top rated plus. So a lot of people are like I'm okay with top rated, I'm okay with rising talent. Trust me, you have to check only this box. So you check this box, then you drag this box to $10. So you're looking for people that are $10 or under and that automatically removes people in the US.
Speaker 1:Then here in talent location we usually type in the Philippines. You're welcome to type in others, but trust me, the overall quality of the talent in the Philippines is higher and there's more of them. Then here we don't allow agencies, so we just select freelancers. Then here, going down in job success, we select the highest 90%, and up In earned amount, we select the highest 10K plus, because we want people that have learned at other people's expense, not ours. In hours billed, we select the highest. In English level, we select fluent.
Speaker 1:Now you notice, I've basically filtered out about 95% of the people in the Philippines. I've filtered them out, but still what I'm left with is not acceptable quality. So I'm going to show you the manual filters. So I'm going to show you the manual filters, right, so I'm going to show you manual filters. So here's a manual filter.
Speaker 1:Number one I want 100% job success, because the filter only allows 90. And we only allow, we only work with people with 100% job success, right. 99 is not good, 98 is not good, not good. 100% job success $50,000 minimum right. See there. And if I click on it or a mouse over actually I could do it via mouse over If I mouse over it, then now the total number of jobs that I want is about 15. Do you see this 15? Because what if they had one job and they worked on that job for six years? They're not going to learn enough. I want 15 different jobs. This person, anna, qualifies because she's earned $100,000, which means that Upwork is her full-time job and she's used to working at night. She's had 15 jobs, which is my minimum criteria, and she's worked about 20,000 hours total.
Speaker 3:So she's working for roughly $5 an hour.
Speaker 1:I don't know, I have no idea. So now.
Speaker 1:I've got a top-rated person with 100% job success who's basically made over $100,000 on 15 different jobs. And then here are our last filter and this is the most important of those filters we call it the superlative filter. The superlative filter is we only interview people where four to five employers have used superlatives in their language during the review the word great and we have a list of superlatives Great is a superlative, excellent is a superlative, good is not a superlative, amazing is a superlative. So this person, anna, has great, excellent, amazing and we'll scroll down Great, a pleasure to work with, completed her task quickly. There's no superlatives here. None of these qualify right, but that great qualified again. And if you don't find four that's our minimum Then we go.
Speaker 1:We switch from relevant job to all job and then we continue going down. Once we have four superlatives amazing, excellent, incredible, best ever those are superlatives. Only those people are invited to interview. That's the secret to our success. Now we have other filters during the interviewing process. It would take me forever to get there, but keep in mind of the people that we interview, we hire one in eight. So there's more filtering going on there as well.
Speaker 3:How much is Upwork a month?
Speaker 1:or how does that work? Charges 10% to the freelancer and charges us a 3% one-time fee, small fee, 1%. So the employer isn't paying much, the employee is paying a lot. So what we do is, after 90 days of keeping them on Upwork, we move them to a different software called WebWork which charges 1% of their fee instead of 10%. So all of our employees receive a 9% salary increase at the completion of 90 days. So they're just used to paying that 10%. They're used to paying 10% if they work on Upwork. But we also believe that to get the highest quality people, you have to be advertising and telling them that at some point you'll take them off of Upwork. And so they know that if they last 90 days and they're confident about that they will receive a 9% salary increase, which they all do. We usually we're quick to fire, we're slow to hire, we're quick to fire. So because of that, if they last 90 days, it'll probably last a long time.
Speaker 1:The other thing that we do is we have a three-step process. So it's silver, gold and platinum. Silver starts at $6 to $6.60. Gold starts at $7 to $7.60. And platinum starts at $8 to $9. So we have a upward mobility for them, which no one else does and there are certain specific steps and performance benchmarks that you have to hit to move from one tier to the next tier, and you can also be moved down if your performance is not acceptable. So people basically can earn more money with us, which is why they tend not to look around and steal time, because we pay them more. I have a number of people at my platinum level that are between $8 and $9 an hour. I'm paying them more than market, but these are all people that have spent three to four years with me and are very valuable to me, so it's worth paying them $1 to $2 an hour more.
Speaker 3:Oh yeah, because of the experience that they have, they're able to basically, at that point, after four years of working with me, they're able to fully replace a US-based employee. Wow, yeah, the online podcast recently that came out they're talking about a combination of AI and VAs is just going to be how companies make it. That's going to be the winners, because now you can get so much more productivity out of your VAs and you put those things together and you got rocket fuel.
Speaker 1:Every company that's been successful knows how to do this. Google has 16,000 employees in Bangalore, microsoft has 24,000. Tesla's most profitable factory is in Shenzhen. So you look at these superstar companies. Vidya, massive location in India Everyone's outsourcing. Outsourcing is not an option, it is a necessity. Sooner or later, somebody will come along and kill you because they're more effective than you if you don't outsource. I 100% agree.
Speaker 3:So two questions in closing, so to bridge the gap, maybe between real estate and multi-site healthcare groups. What do you think are some roles? If you've got or anybody listening they've got a multi-site dental organization or behavioral health or derm or vet, they might be thinking my business is special, my business is unique and I can't use VAs. What would you say would be a role for them that they could use VAs for?
Speaker 1:I'm going to say the following words Stop thinking about roles. Virtual assistants work in every business, in every single role. It is you that are the problem. So first point to yourself and say I am the problem. It's because you believe that by, instead of hiring one person in the US, that you do train, that you can hire three people in the Philippine and not train them and somehow that will work because they're cheaper. No, they require the same sort of training. Also, here's what I'd like to say let's say that you have a general purpose administrator that is earning $70,000 a year and you like this employee. Here's what I don't want you to do Replace this employee with one person that's making six bucks an hour in the Philippines. Do not do that. Hire four people in the Philippines, and those people will cost you $1,000. And save 20 grand. Have one of those people be senior and keep an eye on the other three, and now you'll get two people's worth of productivity from those four people. So now you have doubled your productivity and saved $20,000.
Speaker 1:What most people are trying to do, which is a silly thing to do, is I'm going to replace a $70,000 person in the US with a $12,000 person in the Philippines. It doesn't work like that. You get benefits right, but you don't get that level of benefits. So you have to be realistic about it. You want double the manpower at about half the cost. So you could probably get away with doing it with three people. Three people is 35,000. You were spending 70. So now you've cut your expenses to half, but now you're getting at least one and a half, maybe even two persons worth of work done. I think that's reasonable enough. Half the expense, double the productivity is what your goal should People's goals are. I'll just hire a $5 an hour person and replace the person in the US. It doesn't work. I'll just hire a $5 an hour person and replace the person in the US.
Speaker 3:It doesn't work. Yeah yeah, I love that Cause I've got so selfishly. I've got a guy that I'm using and we don't have any accountability software set up, cause I just hired him and I was going to use HubSpot. But would you recommend that we just go straight to Upwork?
Speaker 1:Webwork is a site that monitors them, but it's not a site that hires them. Upwork is the only option in the world for high volume hiring of virtual assistants because it has reviews. I am extraordinarily tied to reviews. Remember 100% job success is my minimum and four superlatives, otherwise I will not interview and I will not allow anyone.
Speaker 3:That means all their past employers gave them a good job. Have you ever caught somebody like double dipping on you and you gave them a bad review on Upwork?
Speaker 1:We require bad reviews. So if a person is being fired, then we don't give them more than three stars. So the answer is no. So, austin, it's not that stringent. 100% job success doesn't mean that 100% have given them five-star reviews. It's an algorithm. And it's a fair algorithm because anyone can have a bad day. Anyone can have an employer. That's a dick. So no, they can have a couple of bad reviews over a very large, substantially period of time, but the algorithm still gives them a hundred percent job success and I think it does a good job of it.
Speaker 3:Okay, and as we come to our time, wrapping up here, I know we've only scheduled for a few more minutes, but I did want you to hear more about your course, the 10X, your Business Through VAs that you're working on.
Speaker 1:So imagine what we're talking about. Right, I gave you a teaser. I was on a virtual screen for about two or three minutes and I basically showed you some of my approach filters. The entire recruiting process is much, much longer right. So how do we recruit them? What Google Forms do we use? What is the internet speed that is required when we interview them? What do we talk to them about? And then, what are all the different tools that we use to monitor them? What do our weekly reports look like? What do our monthly reports look like? How do we make sure that these people are doing their job? What are all the different things that they do? Examples of 12 different departments that they're doing. Because initially, people are like I'm going to hire this full-time person and then what do I do with them?
Speaker 3:So people are a little confused about what to do, and so they need their mind opened up. That's where I'm at. Yeah, how many, how many can I actually use, is what?
Speaker 1:I'm thinking so. Dozens and dozens of live demos, together with more of those Upwork filters that you just saw, because I was just giving you a two minute teaser. So the course, it's basically a course and it's free. It's meant to be free. There's no subscription, there's no upsell. You cannot hire me to hire your virtual assistants. I'm not selling anything. I have a billion dollar portfolio.
Speaker 3:The course is free. 10x. Your Business Through VAs is free.
Speaker 1:It's completely free and it's always been free. Over 10,000 people have taken the course. It is on multi-. What's the website? Multifamilyucom, okay.
Speaker 3:And that takes you to your business through VAs.
Speaker 1:Yep, yep, yep. So just scroll down to the middle of the page and you'll see it Share knowledge very completely and very freely. You saw me present in Fund Launch in front of 1,500 people, and what I gave away there I finished it with. You never have to talk to me ever again and you never have to buy anything from me or anybody else. Here's a PDF. Follow it and this will work for you. So the same thing applies to our VA course. Take it, use it. You don't have to work with us. You don't have to give us any money. I've always believed that education is meant to be free, right? So we behave like the Wikipedia of real estate education.
Speaker 3:So if somebody like, let's just say somebody's listening and they're like oh man, I love everything he said and I do want to work with you in some way or provide value back to you somehow or whatever, get connected with you, is there any way that you could? You are looking to partner with people or work with people or anything like that we work with people in two different ways.
Speaker 1:One is if you are an accredited investor. If you don't know what that is, ask ChatGPT, it'll give you a very nice one. Actually, I find I used to say that and I realized I was wrong. There's a lot of older people that don't know the meaning or are not sure about the meaning. They're like I might be, I might not be, but I don't really know the meaning. So I found, actually, that it's best to just say type in what is an accredited investor into ChatGPT and it does a wonderful job of explaining it for you.
Speaker 1:So if you're an accredited investor, we have a track record. We've exited nine projects over the last five years and we've made our investors more than 30% annualized. This is our past track record, not an indicator of the future. Come to our website and take a look, but the best place to start is not our website. The best place to start actually in my mind, is multifamilyucom. So come to multifamilyucom.
Speaker 1:We put together 12 educational webinars every year. Come there and spend some time there. Don't give me money. Wait for a year. That money is not burning a hole in your pocket. Spend an entire year going through our webinars. Number one you're actually going to learn a lot about real estate, which is good for you, and you'll make better decisions. Number two over a year, you'll have a chance to understand if our philosophy really matches yours.
Speaker 1:The worst thing that investors do is they listen to a podcast and the next day they show up at our doors here's $100,000. Why is it burning a hole in your pocket? Engage with us, spend some more time and then maybe one day you'll see an offer from us on a certain project and probably don't invest in the first couple of those as well. Go study those, understand them, contrast them and then one day maybe we can partner together. And then there's people that come to us and say we're equity partners. You're welcome. You're welcome to come connect with me directly. Roughly 20% of our projects have some form of equity partners that are involved. It hasn't happened for a while, but we do keep a list and we will connect with you when we have needs for equity.
Speaker 3:That's awesome. Yeah, you're playing a long game and I love it.
Speaker 1:The longer the better. I think that the more of your vision is for the longer game, the better a company you build. It took me from 1999 to 2013 years to build my first company, and if it took me 14 years to build this one, I'd be pretty happy Wow.
Speaker 3:That's cool. Okay, what about like on socials or anything? Do you active on any of them? You want people to follow you on?
Speaker 1:I happen to be lucky and unlucky in that I am the only Neil Bawa on the World Wide Web. No one else has that name. All you have to really do for social is to just type in the word Neil Bawa, as Google owns YouTube, so you'll immediately not just get 5000 links about me, you'll get dozens and dozens of videos on YouTube. I like other social channels, but I'm the kind of person that provides value, and I don't know how to provide value in 30 second TikTok videos. So most of our content, the most powerful content, is on multifamily university on YouTube. So we are long form guys. I know that we lose a lot of money because we are not on TikTok and Instagram. That's not our thing.
Speaker 3:That's, yeah, that makes sense, awesome, hey, thanks so much. This is awesome Talked, full of value and content, and I'm sure our listeners are going to get a kick out of it. So thanks for your time. Thanks everyone, bye, bye.
Speaker 4:If you need help finding the perfect location for your practice or you're ready to invest in commercial real estate, email us podcast at leadersreecom R-E, as in realestatecom, or go to leadersreecom and fill out our form. See you next time.