On this episode of The Mobile Home Park Lawyer, Ferd interviews Steve Sacher a leadership expert, MHP owner/operator, and investor. Ferd and Steve discuss transactional leadership, transformational leadership, and how to lead an organization. Steve shares his advice for young people within the industry as well as leaders. Enjoy!
“Find connectors with your team, bring meaning and purpose and life to those seemingly meaningless jobs and the whole thing comes to life.”
HIGHLIGHTS:
0:00 – Intro
0:56 – Steve talks about his background and how he got into MHP
4:34 – Steve mentions how he asks himself the same question every Monday morning, which is “how can I bring the most value?”
6:32 – Leadership is a dial tone, not a light switch – you’re not just on and off, you’re constantly influencing your team
9:35 – Self-awareness is the strongest predictor of success
10:46 – Steve discusses transactional leadership
11:50 – You have to set expectations, monitor expectations, and reward good behavior
14:57 – Steve shares a tip for transactional leadership – get your team sitting in a room and pass 3×5 cards to each person and ask them to write 5 things that are expected of them in their job
18:15 – Build to Last by Jim Collins is a great book to read to learn about leadership
19:02 – Steve speaks on transformational leadership
20:07 – Steve gives an example of how to implement transformational leadership into your organization
23:21 – Transformational leadership connects people to process
24:51 – Some people who don’t have the time for every team member, so invest in those who invest in others and you’ll double your investment
27:12 – Steve shares his advice for young people in the industry
31:37 – Steve discusses how his organization helps young people grow in the industry
39:30 – Motivating people is key to leadership
39:59 – Ferd asks Steve to share some final pieces of advice
43:06 – You can’t be in MHP if you lose sight of one of these three things; investors, the team, your residents. Steve mentions how finding the balance of allegiance between these three is where it all begins.
FIND | STEVE SACHER:
Website: saratogagroup.com
Email: steve@saratogagroup.com
FULL TRANSCRIPTION:
Ferd Niemann: Welcome back to home park nation. Ferd Niemann here again with another episode of the mobile home park lawyer podcast. My guest today, a friend of mine, he’s an owner-operator, investor. He’s the COO of Saratoga Group, a big mobile home park fund. He’s a leadership expert. We decided today we’re going to talk about leadership, transactional leadership, transformational leadership, and really how to lead an organization. So as a COO, he has a lot of experience in operations, but we’re going to talk more on personnel and people management than perhaps the new water-sewer bill back, the tax appeals, some of the other machinations of the mobile home park business. So without further ado, please help me welcome Steve Sacher. Steve, welcome to the show.
Steve Sacher: Thanks Ferd good to be here. Appreciate you having me on.
Ferd Niemann: You got it. Well, I know a little about you obviously, and we’ve talked about this topic offline, but maybe tell us a little more about your background, how you got onto MHP and then we’ll dive into just general tips and tricks as it pertains to leading an organization.
Steve Sacher: Absolutely. Yeah. So sort of an unorthodox entry into the industry, like many I meet, but I’m actually thankful for that because I didn’t have to unlearn bad habits, you know, to learn the good ones. So yeah, back in 2017 I was working totally unrelated, department of Homeland security working my way up there thinking I’m going to end up in DC and try to make a difference there. And a friend said, hey, you got to meet this guy. He does mobile home parks. And I quite honestly said, you know, what the heck are you talking about? Why would I do that? Why would I even consider that anyway, for whatever reason, I took the meeting and like many people were just blown away by the numbers, right? Undeniable there should also by the impact that could be had, for myself, at least there was, you know, a big stigma there that was a bit hard to overcome. So I had a meeting with this guy. We sort of talked for a couple months and he ended up offering me a regional position to oversee a Bay area portfolio. And so I started as a regional there. And first day on the job jumped in as a community manager at our largest park, high density, urban park, super high strict rent control ordinance you know, undergoing the utility upgrade program, 17 evictions, you know, ACD violations. It had everything you could not want in a park. And I thought, boy, this is the perfect training ground for me. So I sat in that office, smokey office I remember vividly and just absorbed everything I could. And it really sort of propelled me to take on more in the industry. I ended up promoting a couple of times with them and did some awesome things, have nothing but respect for those guys out in California. A couple of years after that, I got connected with Sam through another friend and I didn’t know Sam at the time. I didn’t know his business really, but we had breakfast one morning. It was clear that we had some quick unity established around ethics, operations, and his vision. He was at a space a lot of us find ourselves at Ferd and that is the space between no longer and not yet. Maybe some of your listeners have been there, right? Like you’re not three parks, but you’re not 130 parks. You’re right in between that space, a lot of growing pains. And for me, that’s my wheelhouse, that’s the space I love most. So joined Sam and since then have moved my family to Tennessee. We’ve opened a Knoxville office here. So we’ve a California in Knoxville office and I’ve got five or six already in that office and growing every month. So very excited to be with Saratoga and super blessed to be in the industry at a time like this.
Ferd Niemann: No, that’s great man. It’s been great to see you guys grow and everything you guys been able to do, obviously a good shop. You and Sam had those discussions I’m sure. When you’re at that kind of in-between, you know, are we big enough to scale or you’re big enough to bring on a COO, for example, you know, instead of just a district manager, big enough to bring on additional accounting staff, admin staff, it’s fun and exciting, but it’s also scary, right? I’m kind of going through some of that myself, that it’s just like, man, I just feel like I’m a head of HR, you know most days. I know you feel the same way. You’ve mentioned that like you’re the HR Director, because there’s so many personnel. For the good, better than the worse. But tell us a little more about your day-to-day. And then I want to focus on two topics. You and I have talked about how you’re leading that organization through growing pain, but really through growth.
Steve Sacher: Sure, sure. Yeah. So to start Ferd the question I asked myself every single Monday morning is how can I bring the most value? And I challenge anyone out there listening if they feel, you know, you get in the rut or you get a little stuck or bogged down, or your team members get bogged down, start there, like, what are your unique skill sets that can bring maximum impact for that week and then go after those, put everything else aside. So for me, that’s connecting with people and that’s helping our team grow like the mentorship development, coaching stuff. It’s special projects that really no one else might not want to take on like start a new office and find used cubicles that are cost-effective to put our team members in and mixing in some due diligence trips. You know I’m constantly traveling and enjoy that element. And then overall, you know, just an injection of life and purpose to our culture. That’s really been what Sam and I have focused on. We want people that want to stay for the long haul. You know, burnout is common, it’s a fast paced business. So how do we get our people to be engaged and to want to stay for the long haul for sure.
Ferd Niemann: That’s great. And it’s funny you mentioned culture. Cause I was having a conversation with my team yesterday and I’ve got a friend, he’s in ministry and he lives to a T, but he says, whether you recognize it or not, you are a walking culture and time you walk into a room, you’re bringing a culture with you. And he said, everybody in the room has to either react to you or vice versa. He says to me personally, I prefer to be the thermostat that sets the temperature as opposed to the thermometer that just reacts to it and reads it. And I’d never heard that analogy, but I thought it was really cool. I was like, yeah. And he does, he walks in the room and you know, he’s there and he brings a culture of joy and energy and attitudes. Like that’s kind of cool, you know.
Steve Sacher: Absolutely. Yeah. I’ve heard it said, you know, leadership is a dial tone, not a light switch. If you’re not just on and off, you don’t clock in clock out as the leader, you’re constantly influencing your team, whether you’re aware of it or not. And sometimes you’ve got to dial it up. Sometimes you got to dial it back, whatever the situation requires of you.
Ferd Niemann: Yeah, no, I agree. I had an internship with the Army JAG Corps when I was in law school and it looked hard at possibly joining the service and have a lot of respect for the guys that do. And I remember they had a Marine. They had an amazing inspirational leadership video as you’d expect from the Marine Corps. And this was, I don’t know if it was Marine or JAG or army guys at the time, but they were telling stories of like in Japan, world war II guys were in their foxhole and they were paralyzed with fear and they would basically lay there and soil themselves and wait for the Japanese to come stick a bayonet in their heart. You might as well logically, you might as well get up and turn and shoot, worst case scenario you get shot with a bullet or they get closer and they stab you in the heart with the bayonet. The logic went out the window, right? Because of emotion, because of psychological impact. So a manager sits in the back and yells get going. A leader, grabs him by the shirt, pulls him out of the foxhole and says, follow me. And as a result, you just saved that guy’s life. And I thought, man, that’s a great analogy of a leader to get people to follow you into a firefight and they can follow you because you’re willing to be in the front and fighting with them. And I’ve never forgot watching that video.
Steve Sacher: Beautiful, beautiful story. Reminds me of my favorite definition of humility Ferd is how much you view as beneath you, right? I mean, you can’t tell me Ferd that you and your dad haven’t crawled under those trailers yourself, right? I think I remember a LinkedIn post back a couple of months and it was six degrees where you’re at. So I love that leading by example, and we’ll get into some of that today that, you know, with transformational leadership approach. It’s a beautiful thing for sure.
Ferd Niemann: Well, tell me a little bit more about maybe the definitions of transactional and transformational and then what you see in the leaders that you aspire to be or do as a leader yourself.
Steve Sacher: Sure, sure. Yeah. So let’s start with leadership as a broad topic. I get asked a lot, you know, what’s the most important thing to become a great leader, right? I ask that a ton too, and maybe I should re-ask that from time to time, right? Because that seems to evolve a bit. But I remember reading about a Cornell university study years back on 72 executives ranging from like 50 million to 5 billion, big companies. And they did a study on what were the commonalities, what were the differentiators, if you will that set these CEOs apart. And I was fascinated as I was reading through this and curious, right? I mean, just for the listeners plug in what your answer would be. I plugged in what mine would be. Anyway, it came back that self-awareness was the strongest predictor of success. And that has changed my leadership paradigm in a huge way. The idea of holding up the mirror and understanding who I am and who I’m not. And putting people around me, you know, Sam putting people around him at Saratoga, you putting your guys around you, that strengthen your blind spots, I call them balconies and basements, right. We all have them in our leadership. And so you better be aware of both of those and that’s a start. The second thing is just a bias toward action. I mean, I don’t even set an alarm and I’m up 4.00, 4.30. People say I’m crazy, but my mind just keeps going. I want more, right. I want to learn more. I want to contribute more, make a greater impact. And the leaders that I know that are highly successful will always take action. Even if it’s the wrong action, it’s better than inaction. And so those would be the two things that come to mind right off the top. In terms of transactional and transformational leadership. For me, it’s about putting language to them and then sharing that with your team. So that there’s an understanding of why you’re operating the way you do. So we’ll start with transactional. Transactional involves positional authority, right? So you have people that report to you. Transactional leadership fits perfectly in the MHP space because we have to have results. We have to collect rent, we have to read meters, right? We have to serve notices and go to court. We have to do all these rhythmic operational objectives every single month. And so what we’ve done at Saratoga Group is we create, again, every single week, rhythm. We want our team to repeat the same patterns and then what’s rewarded gets repeated. So we have a weekly call. Every week. We report on delinquency every week from the community managers. We have parked videos that are required, and park reports every week. We have a Facebook post that’s required every week. We have a pipeline meeting every single week. And we go through each of our tasks. So we create rhythm. There’s a transactional approach there within our culture, sort of embedded in our culture and that maximizes short-term results that are essential in the MHP space. You can’t go without these things. You can’t, you got to set the expectations, you got to monitor them, and you got to praise and reward good behavior. We have a phrase that we say, we are what we celebrate. So whatever you shine that light on as the leader, that’s where your team’s going to focus. So you better be mindful of that. So that’s transactional leadership for maybe I’ll pause there and pass it back to you. What do you focus on in terms of the transactional components in your work?
Ferd Niemann: I think what you’re talking about is good. I agree with all that and I want to touch on the decisiveness cause that’s one of my better traits, I guess. Cause I’m of the opinion, you know, indecision is a decision, right? So there’s just paralysis analysis is a decision that gets you nowhere. So I’m a big fan of, you know, take a bite at that Apple. And sometimes it doesn’t always taste right. That’s part of it. So definitely there with you, as far as transactional leadership with similar structures, we have compensation structure that you know, in my ideal world, everybody would have zero base and then they would have make, not for a number of reasons but have twice the income potential. But based on production and based on positive results that we can define. So I came up with this like merit badge system, which is kind of cheesy, but like, you know, you get an accounting wizard. Once you get accounting and rent manager down, you get a thousand bucks, you’re a sales guy. Once you get the sales process down, you get a thousand bucks. Once you personnel management, project management, all these different processes and you know, then we do other bonuses and things, you know, for just high tide rises, all ships kind of bonuses. But I worked in government for five years. And when I took over the position, I had a75 person department, an assessment department. And when I got the job the County executive told me, congratulations, you’re taking over the most dysfunctional department in the history of government and which I don’t know if that was true, but I saw a lot of what not to do and how to motivate people, how to lead working in a bureaucratic organization with limited flexibility in their systems. So try to just, like you said, have metrics, kind of a scorecard of here’s what you need to do every week, and then to some degree cross-training, but to some degree siloed lanes and that’s hypocritical at times or inconsistent, but I’d like everybody to learn operations. Each of them, here’s what that vacant lots worth to your customer. Here’s what that occupied lots worth to the customer, here’s what the setback differences and how it’s going to help us sell these houses or not. So then we look at that zoning, look at those setbacks as an owner-operator think like a businessman instead of a lawyer and then same thing with the whole company. So really just trying to get people cross-trained, but then also we’re like, okay, your job is you’re the, you’re the bookkeeper, your job is you’re in charge of project management. Your job is you’re in charge of admin. So it’s kind of a catch 22 on some of those, but that’s kind of how we try to set it up from a structural standpoint. And then we have, you know, lanes and hierarchy, if you will, from, you know, park greeter, part-time all the way on up.
Steve Sacher: Yeah. That’s well said. Here’s a little test that I’ve used before for transactional leadership. So say your team sitting in a room around you and you have three by five cards and you pass them around to your team and you say, write the five things that are expected of you and your job. First time I did that it was a bit embarrassing and humbling. Being a nice community manager, like, I mean, just not clear on the expectations. So you want to be good at transactional leadership, you’ve got to get clear on expectations first. Your team should be able to, you know, say this. I like to work in threes or fives, but like what sub 10% delinquency for every park we’ve owned over, whatever it is. Define it, define it, define it, and then measure it and track it and then reward the good behavior. So that’s sort of step one, two, three on the transactional side that has worked for me.
Ferd Niemann: That’s good. I should actually do that as a test to see how and I’ll give you a report on how bad or good I’m doing it. Yeah, give it to my team. Some of them I know, they know, cause my park managers, I’ll be like, here’s your number one duty. And obviously like there’s customer service. There’s all kinds of things. Here’s what you got to do. And like my bookkeeper, I am like here is what your job is to watch Ferd’s money. That’s your life mission when you’re here. There’s P and L’s, there’s monthly reports, there’s collection, there’s entry, there is Rent Manager. Watch it like it’s your own.
Steve Sacher: Yeah. And when you get those three by five cards back by the way, and they don’t say what you would hope they would say, first question, you should ask yourself as you know, how you or I contributed to the problem. So that’s the other thing. The days of firing off of frustrated email, we, you know, we got to overcome that and get back to understanding that it’s our issue like that delinquency numbers, my number, it’s your number. It’s our team’s number. That’s the kind of level of responsibility we’re looking for.
Ferd Niemann: Have you read Jocko Willink, extreme ownership?
Steve Sacher: I have not.
Ferd Niemann: You got to read it, our whole team read it. And it addresses what you just talked about. And he’s a Navy seal and he’s an alpha male stud. And that example saying, wow, I thought my team would know what’s around the three by five card. I really failed them in communicating what their core job duties were cause they missed it. And that’s my, hundred percent my fault. And then, but then my regional manager will be like, no, no, no, it’s a 100% my fault because I supervise them directly and the community manager, it’s my fault because I should know that. In fact, I do remember you saying this and this. But ultimately if I’m the CEO, everything is my fault. Delegate and you find good staff and you outsource, and you leverage because you only got 24 hours a day. And your wife gets mad if you come home late about four days a week, I can assure you. So anyway extreme ownership, top 20, if not top 10 leadership book.
Steve Sacher: Awesome. I’ll have to check it out for sure.
Ferd Niemann: Who do you recommend while we’re on the topic of books, who’s your Babe Ruth in the leadership category?
Steve Sacher: You know, Jim Collins built to last good to great stuff. I take a lot from that. A lot of faith-based stuff too, a book years ago called Visioneering by a pastor named Mandy Stanley.
Ferd Niemann: I’ve heard of that. I’ve not read that one.
Steve Sacher: Yeah, really, really interesting book. But I sort of blend, you know, the human development coaching side with the industry and find that it works really nicely because the impact on people, it’s all about people. Prior to working in government, I did some nonprofit work overseas and I’ve always been interested in improving process and people. And so absolutely love contributing to organizational behavior and those sorts of topics always interest me as well.
Ferd Niemann: Great.
Steve Sacher: Yeah. So let’s move over to transformational leadership because I feel like that’s where the conversation sort of stops here in my experience, right? So we get our transactional stuff set up and it’s, and it’s working, we’re getting a rhythm going, at least for a lot of my journey, I stopped there. I didn’t even know this other sort of realm of leadership was in play. And so again transactional leadership focuses on positional authority. Now we get into more of the moral authority and this is connecting all those processes and busy work to purpose. Why are we doing what we’re doing? And that increases motivation, engagement, creative thinking, but it’s critical here. Primary mistake that I see with transformational leadership is pace. So we move so quickly, right? We have so many deals in the pipeline. We have so many projects going that we can’t really slow down and identify those opportunities to invest in our team, to help them grow to create that longevity, to create or cultivate a creative thinking, kind of a culture in our company. Quick example, we in Knoxville, we’re implementing a once a month, half-hour team meeting and it’s off, it could be completely off topic from MHP. It might just be a developmental thing. We did our first one and the response was like, I mean, the team was just like a sponge. It was like, oh my gosh, like my employers investing, you know, investing in me. And they believe in me and want the best for me is a really cool thing. So you got to slow down a little bit to see the texture and color in terms of the opportunities in the transformational space. It’s a little more challenging for us fast-paced people. But if you miss it again, you squash any creativity or ideation opportunities. It’s like your team, you know, somebody brings you an idea and it’s like, no, we already have a process for that. Move on, move on. Versus like, okay, what if the idea works great? What if it doesn’t, I still want to empower this person to think creatively. I’ll give you another practical example Ferd is when a team member of mine brings a problem. I require them to bring a thought-out solution. So you never just come up and say, Hey Fred, what do you think this happened? I’ll just be like, what do you say? On purpose, Like, I want to know, I want you to think, I want to give you the elbow room to think about the problem. Not be so busy that I’m just like, do this. You know what I mean? And over time those things add up for sure.
Ferd Niemann: Yeah. That’s, that’s crucial. My friend, Nick is, he’s listening. I’ll give him a shout-out. He manages a number of people that are kind of big IT healthcare company. And he’s big on that. Just saying, what do you think? And they’ll say, well, I don’t know, but what do you think? You know, and he just like makes it over and over and gets the critical thinking. And that’s hard to do as a manager, leader I think because, you know, inherent, maybe speaking from my own, maybe it’s pride. I want to give the answer. I know this, I know better than you. Well, I’m not letting you get your critical thinking and your analysis jeans going, and I’m with you. So I need to make you think and it’s slower, it’s inefficient as opposed to you give the answer. But long term, I’m letting you build that muscle, which makes you better. It makes me less necessary, you know, which is better for me in the long run. But definitely with you there, that’s key to developing people is making them think for themselves. I do that with financial reports. There’s an error here and here, I’ll just look at a couple of accountants, what do I see wrong here? And then I’ll start with like the lowest paid person. Can you find it? Great and if not, can you find it, and more and more other people are finding them. Sometimes it goes all the way up and I’m like, here’s why it’s wrong, because of this.
Steve Sacher: Yeah, no, that’s fantastic. When I think of transformational leadership Ferd, I think of, they’re the intangibles of leadership, right? They’re the things that aren’t measured, like transactional stuff. And I actually, just for the sake of this conversation, checked out the word intangible a little bit deeper, and one of the definitions was it only exists in connection to something else. So what transformational leadership does is it connects people to process. It’s really a connector and without it, you’re going to burn a lot of people out. You’re going to have a lot of turnover and I’ve seen that world. It’s, you know, it’s a part of a lot of operators, you know, it’s like reposting the same jobs over and over and over, you know, it’s tough.
Ferd Niemann: As you know, turnover and training is so painful for an organization. It’s the most, I was at Frank Ross, they had a headquarters event, I don’t know, a year ago. And they had their training guy come in and he said, the number one expense of that, again, I don’t know if it’s tangible, the number one expense in that company was training. Because they had 300 communities and they had 300 community managers. And every year they replaced 150 of them. I said, that is painful for us. Let’s invest in a world class training program. And you know, wherever chief of training officer, a job that doesn’t exist in most, and most organizations are too small, probably in our industry. But if you’re big enough to handle something like that or at least make it somebody’s duty, invest in your people. And I mean, maybe it was you and me talking the other day, or maybe somebody else, but there’s that old quote, you know, CFO looks at CEO and says what if we train our people so well that they leave? CEO looks at him and says, what if we don’t and they stay.
Steve Sacher: Yeah. And what if, you know, have you ever been at the point where it’s like, I just don’t have the time for everybody. So like, where do you start with that moment? At least for me is invest in those who invest in others and you’re going to double your investment. So if you can’t get to everybody all the time, I understand that that would be ideal. I love information. I want reports. I want to know what’s going on, but I’ll pick and choose and invest in those people that I know are going to take that investment forward, whether it’s a developmental concept or an adjustment with operations or whatever it is, invest in those who invest.
Ferd Niemann: Yeah. Great. One thing I’ve found, you know, I got a baseball bat in my office here, but I use the example. I know how to bunt really well, but I could teach you how to bunt, but it’s hard to do verbally. But if I have a bat and I can teach you how to bunt in about two minutes and give you tips and tricks in how to do the bunt, but it’s because I understand it so well. So in order to see what people are capable of, I’ll often have somebody else, hey go train this person on this new skill. And as a result of having to be the one training, they recognize, I am talking about self-awareness. They recognize where the deficiencies are in their own understanding, and they get smarter on the process. And then they’re better able to go teach it. There’s an old saying, if you can’t teach it to an eight-year-old, you don’t know well enough. And there’s more to it than just half swinging the bat. And you probably know, there’s a whole process to it. You realize that you can’t use acronyms. You can’t use, you know, say things like, well, you know how it is? No, I don’t. I talked to the seller, he said, X I’m like, hold on. Which seller, which property? You have to remember, I was not on the phone book you just got off of. So I can’t just jump right in. You need to give me context clues. And that’s part of being a great communicator, which is part of being a great leader,
Steve Sacher: Right. Well said for sure. So let’s talk about young emerging leaders in the space. I talk with a lot of, I don’t know how your staff you know, if you have any younger folks, but we have a number of college-age interns coming on, and we’re trying to build out kind of an intern program. And I’d imagine there’s other operators that are considering that too. My advice for young people in the industry is first learn to follow really, really well. A good follower is a great future leader. And so ask a ton of questions, get around smart people, right? And the second thing Ferd, and we kind of touched on this, but for all of our team members is take responsibility before you are given authority. That’s the person I’ll give the authority to. I don’t know about you, but it’s the person that owns it fully before they’re given authority. I hear this all the time. How do you influence someone when you don’t have authority? I don’t even have any direct reports. How can I be a leader? And I’m looking for that posture of taking full responsibility of whatever topic we’re on, whatever system you’re managing, right? And in doing so good or bad, whatever the results may be, that’s on you, that’s on us. And that’s the person that’s going to get the promotion, right? Not the person that’s trying for the promotion and asking for the promotion and pushing all responsibility elsewhere.
Ferd Niemann: Great point. I mean, I’ve heard it said leadership is not a job title. I mean, I was a pretty good football player. And used to play backyard football in college. And, you know, I was like, I’m going to lead this team. And like, I would become the leader of the football field on a pickup football game within the first 30 seconds, nobody was deeming, there was no vote. There was no hierarchy. Nobody knew yet who was good or bad. You know, and there was a guy who used to work with, and he was old and he was six foot seven. So you don’t see a lot of older guys that tall. So that was tall, and he was a division one basketball player. He was a very sharp tax attorney, worked all kinds of hours. And he had a good leadership role in the organization, but part of it was his height and his age going, walked into a room. I said, one time to my coworkers, man, that guy has a presence. When he walks into a room and I was in his office a couple of months later and I saw on his bookshelf, a book called the power of presence. Like this guy learned this in like, it’s an attitude. And it was bringing that culture and leadership. I feel like it’s similar, but the leadership will fill it back and when there is a void of leadership, it’s painfully obvious. And I guess my point is if you see somebody who’s a low-ranking staff person, but they take leadership and have ownership, success will follow.
Steve Sacher: Totally, totally agree with that. Yeah, we believe in young people, but it’s a big investment. It’s a huge time-consuming thing, but we believe it will pay dividends in the long term for sure.
Ferd Niemann: They’re cheaper too.
Steve Sacher: That’s another part.
Ferd Niemann: Yeah. I’m half-joking, but it’s like, you know, somebody is out of work, out of school, 22 years old, they’ll say, I want to learn, I want to grow, maybe they have a little more hunger and they practically, they typically don’t have spouse, kids, mortgage. So they’re willing to travel. You know, I used to work, you know, I used to work till almost midnight every night and now I take a three-hour break, you know, from six to nine to be with my wife and kids. But if I was young and single, the ambition and drive and energy might as well, you might as well put the foot pedal on the gas.
Steve Sacher: Right. Well, what a space to be in for a college-age student right now to imagine the difference. I mean, the asset class is on fire. Let’s be honest. And so you get a lot of young, talented people that want in, let’s steer them in the right direction. Good things can happen for sure.
Ferd Niemann: Yeah. That’s great. So what else, I mean, how are you, how are you inspiring these young leaders to grow other than giving them time, attention, vision when they are, you know, maybe this might be the wrong word, but need so to speak as you know, how do you keep them motivated where it’s unlikely, I don’t know how your organization is completely set up, but presumably they’re not making six figures. They’re not getting the equity. They don’t have a division to lead, they are analysts, or they are managers, or they are accountants and it’s not as glorious and it’s not as sexy. So how do you help them to see the long-term vision?
Steve Sacher: Yeah. I mean, our analysts can see the numbers and they can see if they, you know, they stay in the business and at our growth rate, the opportunities will be there. We are pretty transparent on that stuff. You know, if you do good work and you’re an ethical person, you know, and you’re committed to the company, we want you here. We’ve already offered one intern that graduated a full-time analyst position, and we’ve got two more interns right now. We’re looking at bringing on. So, there’s a real path, that’s number one. We don’t just, you know, have them on a treadmill and run them out. And number two, though, you touched on it earlier for it, you got to explain the whole business. And the first place I go is we own and operate small cities. That’s what we do. You got to understand the economics, you got to understand the infrastructure. You got to understand and deal with the people. What about your neighboring cities or counties regulations? You know what I mean? And when you look at a mobile home park, from that perspective, it’s much easier to understand the business and ask the right questions. Versus if you just give them a proforma, you know, some behind the scenes stuff and they never get out to the communities and see what’s going on, how this connects to their work, back to the transformational, bring meaning and purpose to those numbers, bring them to life. For us that seems to get some good traction with our younger folks for sure.
Ferd Niemann: I think that’s great. And that’s another reason I like to take your brain to the field is help to break down that stigma we talked about. Look this isn’t a trailer park. This is somebody’s neighborhood. You can call it manufactured housing, mobile home trailer. The reality is, this is a neighborhood, and we offer as you know, a superior product, single-family or multi-family housing options. In almost all respect. Frankly, I think every respect. So as a result people really are investing this for the community’s sake. So I try to get to employees, look, what if you lived here, how would you feel about this? And I really do it a lot with prospects and I’m on-site at least once a week somewhere, probably. So inevitably there’s a customer that comes in and they’ll be like, what are the rules? And you’ve seen my lease. It’s 26 pages and there’s a 15-page leasing guideline with park rules. It’s robust, there are a million vendors, but it really breaks down to three. And I say, here’s the three rules pay your rent. My goal in life is to collect zero late fees and zero penalty fees. Just pay your rent. Rule two, don’t do drugs, drugs will ruin your community and ruin your life so bad, I am just really anti-drug. And the third rule is don’t ruin your neighbor’s lives. And they go, what does that mean? And what it means is if I want to sit on my porch and just have a conversation with my next-door neighbor, if you’ve got 17 bicycles in the yard, it kind of ruins my atmosphere. Now, likewise, if you’re trying to, if you work nights and you’re trying to sleep and I’m playing my stereo in full blast, I might be ruining your sleep. If I got 16 junk cars, if I got two pit bulls running around with no chain, I am ruining your life. So, it’s just those three rules, pay your rent, don’t do drugs, and don’t ruin your neighbor’s life. And the rest of it will work out. And I feel like it’s the same thing with employees. You know, as far as like, look, put yourself in the other person’s shoes and how would you want this business to work? And obviously, you got to be genuine like, Oh, free rent. Like no, nobody thinks free rent for real, put yourself in their shoes. Am I getting a value? You question, how do I add value, it is the same analysis as an employee, the same analysis for your customer, how to add value. It is simple as that right? That is what sales is, selling occupancy or selling housing.
Steve Sacher: Yeah, it is well said. We have what we call the bust test that at Saratoga Group. You probably heard the bus test, the idea of being, yeah. If a child gets off that bus stop in front of our park and is doing one of these, like some of the students, kids, you know, and we haven’t done our job. We really, we haven’t, and it’s all connected Ferd. I remember talking to a project manager, we have who’s phenomenal. And I was telling him about, you know, this concept that we’re all responsible. And even he is responsible for rent collection. And he goes, well, you know, I don’t, I’m just not connecting that. I’m working on landmark signs and solar lighting. Why does that matter? And we connected at all the way through, I said, hang on a second. So you understand that, you know, a family that drives through our park with a nice landmark sign and well-lit on the paved roads and all this is far more likely to want to purchase their home and pay their rent, right? So your job directly connects and that’s back to that transformational approach. Find those nexus points, find those connectors with your team, bring meaning and purpose in life to those seemingly kind of meaningless jobs, you know, a little bit tedious jobs and the whole thing comes to life. So that’d be my 2 cents on kind of connecting purpose behind the day-to-day stuff.
Ferd Niemann: That’s great. It’s kind of the old, I think it’s Simon Sinek, his book is Start With Why and it’s, you know, and Tony Robbins for his time management system, either a results planning method or rapid planning method, he starts with the outcome, the goal. And then he works backward. If the outcome is, I’m going to sell 20 houses this year, okay, how do I get there? Or what’s the outcome? What’s the purpose. Well, the purpose is to increase revenue, get my bonus, and provide 20 families with quality affordable housing. Okay. That’ll motivate you a little bit. And then now it’s like, how do I get there? I got to comb my hair before I get there, I got to have business cards. I got to have flyers. I got understand pricing. I got to post ads. I got to do showings, houses are going to be clean. I got to have lights on. There’s a million things like that, but if you start with the outcome and you work backwards for purpose and why and then you get to the how it’s not as overwhelming. If you start with the how you have this to-do list, I call it the stress list and it never ends. It never ends. And you’ll never get started because it’s insurmountable and you forget about the motivation and you don’t see the outcome. The book, you’ve mentioned probably the visionary it probably does, but the visualization processes, I’m going to imagine what it’s like you know, and I get one of my managers, I gave him an F-150 as a bonus. If you sell 20 houses, I think it was 30 houses. If you sell 30 houses this year, I’m going to buy you a $30,000 truck. And every time you sold a house, I’m like, Hey, you’re a little closer to that truck. And it happened. And then the truck happened, and I don’t think he thought I was messing with him, but it happened. I bought three trucks in the last 120 days.
Steve Sacher: Boy. I got to get on that initiative. That seems to be working.
Ferd Niemann: And here is why I do the truck. One, because you could put tools in it. And it’s functional, two, something about driving a truck makes you feel a little better and you driving the truck every day and you turn it on. You grab the steering wheel, and that truck is paid for by your boss, you are going to work a little harder that day. And you’re going to, and when your friends ask him, how’s your new truck? Well, let me tell you how much of a stud I’m at work, that I got a free truck because I earned this thing and it gives you a little more panache and a chip on your shoulder, man, you bring in a different culture. So it goes back to, everybody is motivated in different ways. But we’re all motivated in some degree by, you know, words of affirmation, gifts, compensation, things like this. Tangent, but you know, motivating peoples is key to leadership.
Steve Sacher: 100%. Yeah. I’m also motivated by the Kansas City barbecue. So I’d be paying you a visit in the next couple of months.
Ferd Niemann: I told you yesterday, anytime man, anytime, my treat. We could go for breakfast and go for lunch, we can go for dinner, all kinds of Kansas City barbecue.
Steve Sacher: You’ll have to roll me out of there Ferd, that’ll be great. Looking forward to getting up to your neck of the woods soon for sure.
Ferd Niemann: Steve, what other advice do you have for other MHP owners, operators? Just in general or more on leading teams part.
Steve Sacher: Sure. Yeah. So just a kind of a final thought that’s helped me. And that is I call it the balance of allegiance. So I find and talk with many owner-operators and they have such a strong allegiance toward their investors and that’s critical, right? I mean, we’ve got to you know, work for them. And a lot of investors, you think of an investor in these, you know, high net worth guys. And some are, some put their whole retirement with your company, and you got to make sure they’re getting their distributions, right. So there’s nothing wrong with that, but I view it like a tripod. And when you find that balance of allegiance is when, at least for me, I get in a rhythm and I feel like I’m on balance. First is the investor, second is your team, and then third is your residents. And so without one of those, and I’m sure just in hearing that Ferd, you can think of moments when you’re like, man, I just, all I did was talk to the investors this week or whatever or all I’m dealing with this residence, right. Or man, this team member balance of allegiance between those three is where it really begins. And I don’t see it done well, I’m not there yet. As a leader, I want to get there where I can find that true rhythm where one doesn’t take from the other, right. You’ve seen those parks, they throw down some three-quarter crush and raise rents 10%, call it goodwill. We’re doing good in the community. And it’s like, no, that’s not how we’re going to operate. So you got to include your residents at all times, to your point, you know, this is their home, this is their life, and then the team often gets overlooked and the pace of the business. So we have to be investing in the team and then, of course, we have to serve our investors. So for what it’s worth, that language has helped me, the tripod balance of allegiance, remembering all three components are critical.
Ferd Niemann: That’s good. If I can ask, do you have, are all three equal or is there a prioritization? And if so, can you share the ranking?
Steve Sacher: Great question. So I think it depends on the position and kind of the season that you’re at in the company, right? I mean, if you’re raising money for big fund or individual deals, or if you’re in our case, we’re going so rapidly that I’m probably disproportionately investing into our team right now and helping with the investors and then, you know, the residents less than I would like, I enjoy being in parks. I love walking parks and talking to people. I was just at a park yesterday in Millington, Tennessee, and talked with a number of people. But for me specifically, it would be more time spent with the team and second investors and then the third team. For other team members, it would probably be the opposite, right. They don’t talk with investors much, but they still are mindful of their decisions, right. The impact that they’re going to have on the investors. And it’s all back to that awareness and mindfulness that you can’t be successful in this business if you lose sight of one of those three.
Ferd Niemann: Makes sense. Great points, Steve. Anything else before we part and if not, maybe where can people find you and how can they get ahold of you?
Steve Sacher: Yeah. Awesome. It’s been a treat to be on here Ferd. I had a lot of respect for you and you’ve done some great things for our company in terms of our contract for deed. And we’re excited about that for sure. Yeah, you can find me at www.saratogagroup.com and steve@saratogagroup.com, and yeah again, thanks for having me on Ferd. It’s been a blast.
Ferd Niemann: You got it. Thanks, Steve. I appreciate it.