Chris Gray
And everyone thinks, "Oh, you're managing the property." Well, true, but we're also managing people. And managing people is the most difficult thing to
September 26, 2025 · 1 hr 9 min
He Scaled From 4,000 to 15,000 Units in LA (Here’s How)
With Chris Gray — President, Moss & Company
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In this episode of The Group CRE, Taylor Avakian sits down with Chris Gray, President of Moss & Company, which manages over 15,000 multifamily units and 3 million sq. ft. of commercial space.
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Episode show notes
In this episode of The Group CRE, Taylor Avakian sits down with Chris Gray, President of Moss & Company, which manages over 15,000 multifamily units and 3 million sq. ft. of commercial space. Chris shares how Moss scaled its operations, built a strong company culture, and leveraged technology to tackle today’s toughest challenges — from fraud prevention to AI-driven leasing. You’ll learn: - How Moss and Company scaled from 4,000 to 15,000 units - The leadership changes that transformed company culture - Why most owners struggle with property management - How AI and machine learning are reshaping leasing and fraud prevention - The biggest threats — and opportunities — facing LA’s rental market Whether you’re an owner, investor, or operator, this episode offers powerful insights on growth, resilience, and the future of property management. CONNECT WITH ME: EMAIL: taylor@thegroupcre.com WEBSITE: www.thegroupcre.com Subscribe and Stay Ahead! Stay informed and empowered in the multifamily real estate market. Subscribe to the channel for exclusive insights, rental updates, and expert analyses on the Los Angeles market. 🔔 Don’t miss out on the latest trends and tips to maximize your property's potential: https://www.youtube.com/c/TaylorAvakian #RealEstatePodcast #PropertyManagement #MultifamilyInvesting #LosAngelesRealEstate #RealEstateInvesting #CRE #ApartmentInvesting #AIinRealEstate #MarsAndCompany #TheGroupCRE
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Episode transcript
This 13,366-word transcript is matched to English (Original) automatic captions. Timestamps seek the episode player to the matching passage.
0:00–10:00
Taylor Avakian
do in business.
Chris Gray
It didn't take me long to realize we had a uh management issue. Uh just people management. And I think that's the biggest issue, the the most difficult thing when it comes to property management. I think the last stat I had, we were 320 units leased and we had one person not paying. I always say every year it can't get any worse. And they the city council figures out how how
Taylor Avakian
to make it worse. Welcome to the podcast. My name is Taylor Avakian. Um and today I'm here with my esteemed guest Chris Gray.
Chris Gray
Chris, thank you for being here.
Taylor Avakian
Thank you.
Chris Gray
Appreciate you.
Taylor Avakian
So, um you are the president of Masin Company, which is, if anyone doesn't know, is a massive U property management company. I think 15,000 or so units under management right now. Right. And you're only a fee management. You don't manage any of your own stuff in house, right? Can you tell me a little bit about how Moss came to be? Like how how do you get to 15,000 units?
Chris Gray
Happy to. Proud to be on this show. Thanks for having me. Um, so Moss started way back in 1960 as an investment uh real estate investment firm. Wasn't until the 90s where fee management was introduced and then fee management kind of grew, you know, bigger than the holdings they had over the years. I joined the company in 2011 and at that time we were uh just under 4,000 units. Um and I came from a sales background to other industries. So I really came in for business development. Um and really haven't looked back since then and and grew quite a bit right from from just under 4,000 to now 15,000 units. We've also seen our commercial. A lot of people forget we have a commercial uh management uh element as well and we're up to 3 million on 3 million feet under management in
Taylor Avakian
commercial. So what is um what goes into managing commercial versus apartments? Because I came from a background where my company where I started was heavy into triple net leases. So you know I'm very familiar with triple net easy management.
Chris Gray
Yeah. Exactly.
Taylor Avakian
I'm like wait what really goes into managing Yeah. I was going to say it seems like a pretty good deal. Like I'd want to manage as much commercial as I could.
Chris Gray
Yeah. Well, remember too, you have different types of commercial. So, you got multi-tenant, right? You could have a big office building, uh, small space, for example, got it becomes much more management intensive, similar to an apartment building, but obviously drastically different, right? 247 people where they're living, more business hours in the in the work element on the commercial side. So, as we say in the business, it takes a special animal to want to be on the multifamily operation side.
Taylor Avakian
For sure.
Chris Gray
Yeah. Do you um so how did you what were some of the tactics you did to take it from four to 15 because that's pretty okay so it's uh without boring you with the details uh when I started I came from a sales management standpoint so you know really I just went on a listening tour in the in the organization learning the business right if I was going to sell the business I needed to learn the business and that meant talked to a lot of people from the site level folks to the middle management etc and obviously it was a lot smaller company back then um it didn't take me long to realize we had a management issue uh just people management right and I think that's the biggest issue or I should say the the the
Chris Gray
most difficult thing when it comes to property management everyone thinks oh you're managing the property well true but we're also managing people and managing people is the most difficult thing to do in business people either love it or they hate it or they're they're good at it or they want to be good at it right but it really takes an effort and I was fortunate coming from a sales management background with great training training in management. So I was almost taught it at a young age. Got it. And so I realized we had a management issue. We made some uh changes in leadership. Not in the first year even, right? It really took three to four years, right, to kind of change some of that stuff. But once you get the right leadership in place and then you start hiring the right team, it's amazing what happens.
Chris Gray
I always said a goal would be like build a company that builds itself. And truly, it all comes down to culture. How you treat your people. I know everyone says it. Yeah. Uh it's easy said easier said than done. Yeah. Um but once you get a great culture in place uh and really put the people first, it's it's magical what
Taylor Avakian
happens. Interesting. Okay. So because yeah I there was a um a podcast that I've listened to and they talk about what what is the real business you're in, right? And the example they give is like a gym, right? A gym is not a company that goal is to make people fit, right? They're in the sales and marketing role. They want to get as many people in as possible and sell them on the memberships. Like that's how most gyms make money. It's not how good their programming is. For you for property management, how much of it is getting good staff and people to manage everything versus getting new clients to then be able to manage their buildings. Does that kind of make sense?
Chris Gray
Yeah. If you build the right team, it's amazing. it it becomes kind of like a magnet a magnet for new business clients prospective clients uh will come in and see it. you you almost are wearing the culture in in an interview and any conversation you realize when you walk the corporate office are there smiles right is there conversation or do people look miserable right and there's something about that energy of the right culture that just attracts business so it's I don't want to say it's easy to grow but we've never had a problem growing through taking care of our people taking care of our clients and then it's word of mouth, right? And in property management, as I said, it's an easy business to start. It's an easy business business to get into, low barriers of entry. It's conceptually very simple,
Chris Gray
right? But it's hard to do. Back to your gym analysis, it's easy to the thought of getting shape. Everyone knows how to get in shape. Yeah. But damn, it's hard. Yeah. Right. It takes discipline. It takes motivation. And it goes back to that people management thing.
Taylor Avakian
For sure. Totally.
Chris Gray
did.
Taylor Avakian
Um, so it it what what is interesting to me is because I talked to a lot of owners, right? And there's not one that's not true. Maybe there's one that I've talked to who's like, I love my property management company. Yeah. Most people don't. Why do you think most people don't like their property management companies?
Chris Gray
There's always something to find that's not optimal, right? And that's the other challenge, right? You could, you know, we have top five KPIs that we manage on a daily, monthly basis, right? Uh we we call them the key priorities. So we figure, hey, if you manage these well, everything else will fall in place. But the the better you do in each layer of the onion you you peel, right, there's always something where you could get better. So we have another thing within our culture, right? I stole it from Tony Robbins. I'm a big Tony Robbins guy. Let's go. Big mindset guy, right? Um and he has something you know called cany and it's continuous never-ending improvement. It's exactly the approach that really any property good property management company any business I mean any industry at the
Chris Gray
end of the day the second you think you know it all you know nothing right so we're always looking at processes right business is just a process that you can multiply and scale right so you've got to lock in the process and once you think you have the right process you know you go okay here's priority one priority two three you set up those processes when you get through that list of top 10 priorities you got to start over again and figure out how can you be more efficient, how can you be more cost effective. The job is never done, right? It's uh you know, everyone says property management, especially on the multif family side, is 24/7. Yeah. Yeah. It's 247 because the phone may be ringing that. So that's true. But it's truly 247 because there's always something to improve on, right? Yeah.
Chris Gray
And so you could continue to work and it you could continue to get better. We're we're never good in our business. And the second you think you're good, the second you you start
Taylor Avakian
failing. So why do So then what is it that what is the biggest complaint I guess from from owners and operators as to why they're not in love with their property management companies?
Chris Gray
Sure. I could tell you the most common now, right, in in today's uh market. Yeah. And and a lot of it is uh market driven, right? Some of the uh the factors that we're dealing with. So right now, right, you have higher interest rates than people are used to. Um you have and we're a regional company right so we're a greater Los Angeles is that footprint um you know right now and I don't think many are talking about it but we are noticing some softness in some markets due to the immigration oh yeah issues interesting yeah so some markets like in the valley steady as ever right we're seeing some softness in in some of those markets for the first time for from renting yeah prospects renting traffic yeah uh and no one's reporting on that but You know, it's interesting with
Chris Gray
our footprint of 15,000 units in in a subm market. We have a lot of data. I was going to say right at our fingertips. Yeah. Right. Um and and so that's one of the things we're seeing now. Um but back to uh your question of, you know, what are the most common? I would say the single big most common right now is because of the interest rate environment, cost of goods and services, you name it. Insurance, right, is a big one, and we could get into some of that later, but are the new builds. Interesting. new new development, right? The cost of land. Yeah. The underwriting. Yeah. You have a budget to build. You have a timeline to build. Everything with LWP is delayed. Every 100% of the projects are delayed. And so now you're running into your interest reserves, right? You're running out of capital. And now, okay, we
Chris Gray
got the TCO 3 6 12 months after projecting. Now we're in a hole. We got to come out
10:00–20:00
Chris Gray
of the hole. And now the underwriters are backing in values. This is what we need, Chris. And I go, well, I wish it was that simple. Got it. Right. And so then it's a value unfortunate. It's just a it's an unfortunate piece of what we're dealing with in the market. And and that could be specific to LA, California. Yeah. Right. Regulations. LWP is the common thorn in the side. And um and so unfortunately we're also seeing a trend where we're taking over for lenders because developers are walking away equities. Y so we're probably operating uh probably eight to nine assets now for lenders. Wow. That we weren't involved with during Lisa, but the lender takes over and then says, "Moss, we need you.
Taylor Avakian
We need you to come and turn this thing around."
Chris Gray
Right.
Taylor Avakian
That asset management side. So yeah, cuz a good property management company is almost a quasi asset manager when it comes to making sure the building is 100%, you know, maximizing its value, right? And I know leasing is always a big issue for people. I've had more people reach out to me because of I talk a lot about AI and artificial intelligence and there's a ton of tools that are coming out to kind of streamline a lot of those processes or try to streamline and one of the biggest complaints is leasing units and whether it's just the back and forth with setting up showings or you know doing lock boxes or you know following up with prospective tenants things like that I think leasing has been more of a problem in the last 12 to 18 months. than it was in my prior career at all.
Chris Gray
And you're seeing that as well. Yeah. Signs of the market, right? Every LA is so interesting because you have so many different submarkets, right? You can't group all of LA together. Every every neighborhood is different. Um so, you know, look at the end of the day, you have the industry standard, right? The across the industry when you look at all the data, less than 50% or about 50% of the calls are answered, right? So then you look at AI. So accessibility is key. Now then you look at size of asset, right? So if you're looking at a 500 U unit asset, right? We just did a Korea Town 500 unit lease up blown out of the water. It's fantastic success even in today's market. Wow. 40 leases last month, right? They're rocking it. But think about a 500 unit building. You've got a staff that's insane, right?
Chris Gray
All in uniform, all in unison and rocking it. And we have a great staff, right? It's always about about the people. But that's a 500 unit asset. They're rare. What's most common might be in LA might be a 10-unit asset. 20, 30, 40. Well, you don't have that staff, right? You don't have that payroll on a on a building like that. So, that's another key metric of ours is accessibility. Who's answering the phone?
Taylor Avakian
How often are they answering?
Chris Gray
If someone walks up, you know, off the street for a tour, is someone there to tour them or are you dealing with an AI computer and you say, or you know, in some cases when we shop buildings, they say, "Do you have an appointment?" No. Oh, you got to make an appointment. You're like, "What? What is going on?" Right? So AI from a leasing standpoint is is certainly an opportunity. And in my mind, and I'm fairly old school, right? Um you could never take away the human touch, you know, back to the gym analys. What makes a gym successful is the community they develop right within that within their membership. So, same thing with a community, an apartment community. You have to create a sense of community. That's sticky, right? They that tenure renewals, right? People are going to say, "I'm not leaving this place. All my friends are here
Chris Gray
or we've got these great resident events. These are fantastic. I'm not leaving, right? I'll drive an extra whatever time. So, so I could stay here even though, you know, maybe my job changed." Um, so so back to the AI and and leasing. So I I do think that human interaction is very important because of that sense of community. But there are processes not only in leasing but when you look from a toz in operation in our industry and I'm sure in most industries where AI can be crucial addition in incre in increasing efficiency that's where we're looking right I'm not looking for the consumer focus you knowentric if you
Taylor Avakian
want internal team stuff but
Chris Gray
backend processes. So, for example, if someone sends a text message to a leasing office, usually it's pretty basic. That's AI. Respond immediately. Don't wait for a leasing agent on a tour. And I'm going back to, you know, a 50-unit building. Maybe it's a part-time manager. What are you going to hear back from them? You know, so that's where AI from the leasing process, I'll say. There's parts of that process that can be designated or run by AI and just increase your efficiency and customer satisfaction. And you guys are actively trying to implement this or are implementing it and they're all over the place, right? So, and like anything when you you know if you implement any new technology, it's costly, it's timely, there's training, right? So, I'd like to think we are on the forefront of technology, but I would say we're very careful. We do our due diligence.
Chris Gray
We really And are we always are we batting a thousand? No, I've implemented some things. I go, "Nope, pull that out. We're changing." Right? Because it's not what we thought it was. Yeah. We want to avoid that as much as possible. But, um, certainly from an AI standpoint, I mean, all your big property management um, system software systems from Yari to Real Page to Intrada, what have you, they all have are implementing AI throughout the process. So, there's AI there. I'll tell you uh one of my favorite AI or I should say maybe machine learning um processes was in the screening process uh totally changed our industry in fact tell me about that okay so in LA through co right the biggest issue was fraud any you know I won't bore any of your listeners of how long it takes to evict somebody
Chris Gray
right but we know it's it's a nightmare in California it's a nightmare in LA right it's worse in LA than it is in California But um so the key comes down to the screening. If if you get someone in there that's not going to pay it, it's costly. I don't care if it's 100 units or 10 units, it's costly. So then they started kind of tying our hands on the screening criteria. And then your screening tools out there, your your common background and credit checks, those companies are so afraid of liability by giving the wrong information that they'll withhold information. If you have a different middle initial, if it doesn't match exactly on a criminal, right, Kate, they're not going to give you that info. So, we've literally moved people in that got through our screening that had an eviction a year ago, and you're going, "Wait a minute.
Taylor Avakian
What what's going on here, right?
Chris Gray
I got to change training companies." But then you realize they're all scared of their own shadows because of liability, right? That's unfortunately doing business in California. We all have to think of the big L word. So, we thought long and hard. We said, "Okay, screening, you might as well not even screen, right? If someone's going to get through like that." And and we we saw that kind of being a trend. So, we said, "We need a solution. There's too much fraud. There's too many bad people getting in that are, you know, aren't paying." You know, it's a different story when someone gets in and they have a hardship. That happens. That's life. But when someone's getting in to, you know, be a fraudster, right, and and rob you basically. Uh, and it's tough when you know someone's behind a door that's not who they say they are.
Chris Gray
and now they're probably subleasasing and they get to stay there for 6 months because of our legal system. That's pretty frustrating. So anyway, back to screening process in our search um for screening tools. We knew screening, we needed screening obviously, but we needed to do something more. So there's AI machine learning for the document, right? We started um requiring bank statements. We started, you know, we always had proof of income, etc. And there's some ways of looking at income without asking for proof, right? It's all um through different technology. That's all fine, but I always say what's the exception, right? If if these this technology isn't going to find your income as a resident of ours, okay, I love it for 80% or 90% or 50% whatever it is. It makes it easy, but what about the others, right?
Chris Gray
Because there's only one two 3% of the fraud and they're going to work around those systems. So, we found a a company that we require everything, all the paperwork. So, we increased our requirements and it's all machine learning documents. So, it's all scanned and they'll tell you exactly if it's fraud. It'll tell you that this was doctorred on this such date. Really? It's wild.
Taylor Avakian
What's the company called? Do I say it here?
Chris Gray
Yeah, you can say it. Yeah. It's called Two Dots. Two Dots. Yeah. Yeah. Wow. They started pro. So, we were their first client. No way.
Taylor Avakian
Their first client. That's a big signing, man.
Chris Gray
Good for them. Finder of the founder. I met the founder. He came out to LA from New York. They're now local. They moved over here to I think Santa Monica. Um, and since they started, I'm going to say, you know, time flies. I say two years, it's probably four years ago, but somewhere in that that range. And, you know, I just saw him at NAA in a big booth now, like center center booth. Yeah. Saw the founder and they're somewhere like half a million units now, like out of the gate, which is insane.
Taylor Avakian
So, they should sponsor this podcast.
Chris Gray
Sounds like they should sponsor this podcast. But how did it change our industry? Yeah. I mentioned 500 unit lease up in Korea Town. Yeah. We saw most of our fraud in LA, downtown, Korea Town area. I'll just say downtown area. Um, our lease up at 500 units, we denied I think it was 12% fraud. 12% 12% was fraud of our lease up. So now the same client have other large buildings operated by
Taylor Avakian
others.
Chris Gray
Yeah. And and it's not a knock to anyone. it was just something that the industry needed and we were probably guilty of it too. When you're you're leasing up a building, there's always going to be a fraud issue. So the so that delinquency or you know bad debt, whatever in a lease up is pretty, you know, it's pretty damning, right? So,
20:00–30:00
Chris Gray
um I think the last stat I had, we were 320 units leased and we had one person not paying, which is in LA, that's a which in LA in that market, that's a massive was pretty Yeah, especially in comparison to their other lease ups. So, it was a huge win. It was a game changer for us. Um so, anytime you can manage, you know, not going to eviction um by bettering your your screening process, it's a a win across the board. such a minor detail that we implemented and um you know we do a few other things within the screening but total game changer in our
Taylor Avakian
market. Jesus that's incredible. Yeah, that's it's a big problem. I mean across the board and I think when when these technologies continue to grow. It's going to be you're going to be left behind if you don't implement it. Like you you almost have to start to learn and there's a people I know my age who don't even use chat GBT and I'm like dude what are you doing man?
Chris Gray
I just started.
Taylor Avakian
I'm in. Yeah.
Chris Gray
Go.
Taylor Avakian
Okay. You have to You're never going to use Google again. I promise. Yeah, it's great. It's It's really incredible. So, I'm curious to know on the data stuff cuz I love um figuring out hidden opportunities. Alpha, man. I love alpha. So, with all the data that you have, let's see if we can uncover some alpha on the podcast. Of of the locations of the units, where is the most promising place that you think either has good rent growth, it's been solid in these down markets? like where should people be looking to invest based upon just
Chris Gray
the data that you have from the leasing. Okay. Um being a regional company, right? So we're only talking like greater LA. Yeah. Right. And and surrounding. I'll tell you from a new development standpoint, the greatest successes we see are new developments in neighborhoods where they're not used to new developments, which sounds scary to some people because they're like, is there a market here? And the answer is yes. So those are our fastest leaseups. So there's like one little takeaway. Whereas if you're, you know, LA is so challenging if you're in Hollywood, LA, you know, just the within the city, it's harder with all the development op, you know, options out there differentiating yourself from a marketing standpoint. It's like which new building do I go to? Got it. So, so trying to get out of some of those markets where there's not as much new construction on a new build.
Chris Gray
Generally speaking and and I mentioned earlier with the immigration situation, we have seen some softness. Hopeful hopefully it's a blip in the radar, right? And it's not a trend. Yeah. But like anything, you know, you look at household formation, you look at population, you look at job growth, um you look at um you know, home affordability, right? Those are all huge factors when it comes to renting apartments. And all of those factors are usually favorable in Southern California. That's why I love the market. Mhm. Now I don't know other markets like I know SoCal of course but your appreciation your your lack of build you know so for example over the next three two really two years there's really not much in the pipeline for some of the underwriting and and difficulty whatever you want to call it but that means there's a little runway for current owners.
Chris Gray
So you know we're we're coming off 2024 was very flat 2025 a little rocky we started seeing a little uptick and now with the immigration thing we're kind of seeing you know kind of flatline again. But I do think 2026 2027 by the numbers and really lack of new supply coming uh we should see some rent growth which is what everyone needs. So are there any neighborhoods? Yeah. So generally I'm going to I'm going to do generalization. You could hedge all the rent all the rent growth starts in West LA. Okay. Okay. So if you're looking at same class, same unit type, West LA is going to be more expensive than Sherman Oaks, then Van Eis. We saw a wave over the last 5 years. Renro starts West LA, but then it the wave travels up north through the valley, east to
Chris Gray
west. So obviously there's been a big uptick in in new builds in Woodland Hills, for example. Mhm. So, I personally live in Westlake Village, which is even further up the 101, but I love the idea as far as neighborhood back to supply north 101. I think there's great growth to be had from Thousand Oaks to Oxnard going up to Ventura. Interesting. Okay.
Taylor Avakian
Yeah, cuz that's not talked about. I mean, I'm definitely below the hill. I don't even do as much in the valley as a lot of other people because I started in Korea Town. So, I'm very familiar with Korea Town. Um, and there's a ton of development there because the zoning is just super perfect for development. But, it's interesting that you're seeing it go further and farther up inwards because a lot of investors are looking in Ventura too, Oxnard. They don't want to deal with, you know, LA County rent control and stuff. But, if you're doing new construction, it's kind of like squeezing those two opportunities together. And if the rent's going to continue to grow up, it's probably gonna make a ton of
Chris Gray
sense, right? Yeah. I see a lot of that and and a lot of job growth going going that route as well. It's been a trend over really. Yeah. You know, I was a valley kid born and raised in the valley. So, you know, uh back then, right, Agora, we used to ride motorbikes, you know, there was nothing there. So, you can you could still see the growth and there's a lot of, you know, um I would say barriers to build, you know, feels more neighborhood. For sure. For sure. Great place to raise a family, right? Um, so I I that that's me, you know, personally. I think I like I like that.
Taylor Avakian
Uh, grow. Would you buy there? Like if you could buy anywhere in Los Angeles, where would you buy?
Chris Gray
I would go up there. I the 101. Yeah. Um, we have a very smart client. Um, that she would pick her spots based on uh coffee shops, the latest trending coffee shops. No way. She bought in Ventura. Again, time flies. Probably pre-COVID, like 2020 maybe. 1920. Killed it. Killed it. Crushed it. Value ad. The old school value ad play in the Maui or West LA.
Taylor Avakian
Killed it. Really? What do you remember what coffee shops you saw?
Chris Gray
Was it like Oh, you know, she's so much cooler than I am. Uh, the answer is no, but or knows. There's a handful that she was tracking.
Taylor Avakian
Isn't that interesting? I might have to meet her and hear some of these tactics.
Chris Gray
Sure.
Taylor Avakian
I'd be happy to introduce you. That's incredible. No, it's it's funny because understanding because again people ask me, Taylor, where should I be buying? Where should I be looking? Where's the next Silver Lake Echo Park? Where's the next Highland Park? Where's this next high growth hipster, you know, coffee shop kind of spot? And it's hard to track everything like that because again, LA is so spread out and so big and the laws change in different spots and I can only talk to so many people at the end of the day. But um I've I've been a big fan cuz my generation I lived in Venice for a little bit. I lived in the South Bay for a little bit. I love the South Bay, but very expensive from an investment perspective. Um I live now in West LA in Central City area.
Taylor Avakian
And so I can I see where my vintage of people, I guess you could say, my era of people want to live. West Hollywood has lost a lot of favor for my kind of year, but everyone wants to live like coastal west side a little bit. Maybe in the South Bay, Palms, Mar Vista area. Yeah. And then the valley, I think it's like Studio City, Sherman Oaks, you know, a little bit nicer in that cuz you're close enough to LA. But what's interesting about um going up to 101 is that seems to be more of a family oriented area, right?
Chris Gray
Right.
Taylor Avakian
But if they're growing and building these shopping centers or or Caruso goes and builds a, you know, new cool hip spot, then you might see younger people going up there and youth seems to be driving where this rent growth comes up, right?
Chris Gray
I agree. Yeah. And I think um you know just those and I agree, you know, Culver City, Palms, right? Those are very popular. Mhm. Um certainly with the younger beach vibe generation, but you get the same thing further north, right? It's just not there yet. Interesting. And so I think, you know, when you when you have investors or or clients saying, "Where do I buy?" Well, you're trying to want to you want to get in front of that wave, right? Is the idea. The other thought, uh, as you know, we've had so much growth over the last 15 years in LA. And you're, you know, another metric we look at is, uh, income to lease, right, ratio.
Taylor Avakian
and um like percentage of their income, right?
Chris Gray
Yeah. Um and we're seeing that tick up every
Taylor Avakian
year. So 33% 35% of their income 36. So it's going higher.
Chris Gray
So becoming less affordable basically. Exactly. So that's an important metric because you figure you know back to underwriting and you know repositioning an asset you go well what's the affordability right? And of course, every neighborhood is different, but I could just tell you generally in LA, we're seeing a 1% tick every year. So that's trending to where, you know, we cut them off at, you know, three, right? We want three times, you know, the income or two and a half, we'll go conditional and we'll make some adjustments as needed, but you can't really much go much more than that, you know. Interesting. So they got to be So there's some quotability issue, right? So I would say the the other big thing which isn't any secret is um there's obviously more deals to be found on the smaller level as far as unit count goes
Chris Gray
and there's a lot of I think um you know mom and pop owners that hate uh vacancy and they're under they're undermarketed right they're underleased. Yeah. Right. Which provides that value ad uptick, you know, immediately. But, you know, I say that because a lot of it is rent control. And back when I uh first started in this industry, I said, "Oh, what a great what a great model. Just buy LA rent control. You're guaranteed, you know, 3 to 4% every year and you that's easy to pencil out." Well, as we all know, there's no guarantees in life. And then COVID hit until my little uh rent control. Oh, wait a minute. that I can't it's not guaranteed.
Taylor Avakian
Nice model, Chris. I Well, did you see what happened in uh DC
30:00–40:00
Taylor Avakian
there? There was a case that just came out where they ruled it unconstitutional for um these governments to it. I think it was like not they have to pay back landlords for these moratoriums that they
Chris Gray
put. I have not heard that because I did know the California Supreme Court just
Taylor Avakian
uh shut us down on a landlord case.
Chris Gray
Yeah.
Taylor Avakian
But it just won. All right. In DC. So there's hope. There's hope, which is kind of crazy. And that's going to be a ton of income. Four years or 3 years, they froze the rents.
Chris Gray
You couldn't raise them at all.
Taylor Avakian
That's insane. That would be like it probably bankrupt like LA to be honest. Well, by the way, it's hurt a lot of people, right?
Chris Gray
And, you know, I'll give you some CO stats, you know, talking about data in the in the industry. Um, it was a scary time, you know, for our clients, right? Because, uh, if anyone doesn't have to pay, you wonder how many are not going to pay. And so we were running models and I remember when that first came out sitting in my office running models of how many people of our you know back then maybe it's 12,000 units or whatever it was. What percentage of people have to pay for me to keep paying employees in that one. Holy Yeah. It was scary time because you didn't know what it was. Is it going to be majority not paying or is it going to be you know is it 10% is it 60%. Right. So, I was running models to figure out, holy crap, this is pretty scary.
Chris Gray
At the end of the day, um it was a long time of no rent growth. It was a long time of not required to pay rent. And I'll throw some stats out for you. The good news is at the end of the day, most paid. So, most people are good people. Yeah. Right. Most are. And certainly some took advantage big time. Um, so of course I used to have all the dates down, but from March 2020, call it two years, whatever it was, California, right, had the the rent freeze in and the moratorum. They ended theirs, I want to say 21, 22, maybe it was 21, middle of 21, maybe it was about a year, year and a half for California. Well, they had a a program where you could apply and get paid for landlords, for anyone that wasn't paying. We ended up getting probably $12 million for
Chris Gray
our clients in unpaid rent through the state when this which was the majority that was owed. So it was actually it wasn't perfect, but it was actually a decent program that made sense. Yeah. So hats off to California in that sense. But then the idiots in LA extend it for another year and a half or whatever it was with no recourse for landlords. Here's where it gets worse. So, you figured our our debt uh our COVID debt or bad debt would have been let's say 14 million in California up to that first point. We got 12 of it back. Our clients are throwing parties, right? Like, thank God, thank you for for doing this and following the procedure and getting it done. But then LA extends it. We acrewed another 15 to 18 million in in rent due because of the LA extension with no recourse.
Chris Gray
And then they say, "Oh, no, it's small claims. It's consumer debt. You could go get in small claims." Small claims is a state court. We take that to the LA um U mortorium money to state court. They throw it out. I talked to the city council members. They have no idea. They have no idea that that was happening. So, we just treat it as consumers that bottom line or as as regular rent debt. Bottom line, people move out owing a fortune. You send them to collections and you don't see but 2 3% of it. Holy. So there. So, property owners in LA, we're 1% of the market. 15, do the math, $15 million in our portfolio alone at 1%. So, if there's some court order that we were all begging for and hoping for, like you just had mentioned in DC, LA's going to owe a lot of money.
Chris Gray
Holy crap. If they hold their feet to the fire, and as we all know, LA has no money. So, where's that going to come from, you know? So, it it was a tough time. And unfortunately the uh lawmakers and city leaders had no idea what they were doing.
Taylor Avakian
What?
Chris Gray
And I say that because I go I meet with them individually to try to be a voice to say guys you don't understand what you're doing to the industry. And they're very you know the politicians they they give you the ear. Oh no way.
Taylor Avakian
How can we help?
Chris Gray
Right. Then you send them the letters and you know nothing comes out of it. Yeah. But uh it's an unfortunate piece but yeah a lot of people got hurt in
Taylor Avakian
co LA's got a ton of problems. I think we all know that. What have you seen or what do you think is wrong with LA? What's what's the issue that's causing all this um hostility and these two sides fighting against each other where it seems like the city council is and then everyone else in business and landlords and all this stuff? They're like butting heads. Where do we go wrong? What's the issues?
Chris Gray
I think the the issues are it's a popularity contest with our uh elected leadership. The loudest voice wins. Well, these tenant unions have nothing better to do than to literally go and protest in front of a city council member's office and take over the city building, right? And these council members say he's they Chris, you won't you don't understand the the abuse we take. They take up the hallways. Security has to kick them out. It's like, okay, we'll do whatever you want. Just leave us alone, you know, type thing. It's almost fatigue. Um landlords don't do that. Um, tenants outnumber landlords from a vote standpoint and certainly from a voice standpoint. Um, we have better things to do during the day than go hang out at city hall, right? We're running businesses for sure um and what have you and and trying to contribute uh not with our hand
Chris Gray
out, right? we're we're offering housing um which I think is a great service and unfortunately others are out there with their hand open saying housing is free and so I think that's our our biggest issue. If if anyone listening to this your your show, you know, agrees that says landlords are outnumbered. I've been up to Sacramento. I talked to the the city council members one-on-one. best thing we can do is make our voice heard. Whether it's a phone call to a city council member or assembly member, senate person, whoever it is, if it's a state or city issue, uh an email, and I know it's asking a lot. You know, I'm on the board of AGLA in LA. We always have a representative at all these city council members fighting. Oftent times, they're the only person representing landlords in a room full of
Chris Gray
tenants. That's the issue. So, if we can, and I know it's a pain, no one wants to do it, but if you could click that button and send that email, even if it's a template, they see it and they see, okay, wait, we've got some opposition. We can't do that, right? So, it's a it's a tough hill to climb.
Taylor Avakian
You know, they need their voice.
Chris Gray
Yeah.
Taylor Avakian
We need our voices heard. It's um I've showed up to a couple LA city council meetings and there these were some bigger, you know, laws and bills. So, I think we had some good support there. But yeah, the tenants outnumbered us for sure. And um it's I I get it too, right? People they want to be empathetic with these people who are struggling and and all this stuff, but for example, like when they wanted to freeze the rents from the fires for all of LA city, I'm like, how in the does that make any sense where someone in downtown Los Angeles is going to be affected by a Palisades fire, right? Like it doesn't and they got to freeze their rent. It doesn't make any sense. So that's where I think a lot of the sentiment from investors when I talk
Taylor Avakian
to too who are just like I don't want to deal with the brain damage of knowing what's going on here, right? It's just the riskreward has not felt like it made sense for a lot of these investors. Do you feel like LA moving forward is going to continue to get worse or do you feel like it needs to recorrect itself like we're at the bottom and it's going to go back? How do you feel about LA long term?
Chris Gray
So, I always say every year, it can't get any worse. And they the city council figures out how how to make it worse, right? And it's like, wow. I thought truly that was it. We were at the the end of the line there. Um, and they try to make it worse with the with the fire moratorum, right? I was just shaking my head. Um, with that said, as bad as LA city leadership is, and you know, some will lump in all of California, but California looks like a bunch of Trump supporters compared to LA. Yeah. Right. when you think of the the politics. Um, so as bad as LA is, value the property values, albeit interest rates and insurance costs, you know, so I understand it's not all roses, but overall trajectory are just continuing to perform. You can't say that about a lot of markets.
Chris Gray
So I always say as bad as LA is, look how great the demand and occupancy is and rent per unit, right? per foot. It's remarkable how resilient the the the housing market is in LA. Even with these idiots doing what they're doing, you know, so my hope is we're at the end of the line of craziness. I think common sense has to take over at some point where people are like, "No, housing is not free. You got to pay for your housing." Right? And that's truly what I think some of the goals are of not only, you know, call it socialism, call it call it what you want, not only of the tenant unions, but honestly of some of the city council members right now. They're limited that really want that and feel like housing is a right, but it's there.
Chris Gray
And I think as more people wake up to it, those people got to be removed. And you know, we saw it with our attorney general uh change um uh LAN. Yeah. Yeah. Um so that was a nice swing. Uh hopefully we see it with the council members, right, with the the voting coming up. But you know, all I could hope for is uh common sense
40:00–50:00
Chris Gray
wins and we get some people with it in office. And so with that being said, as bad as it is, market's not not horrible. So you could imagine if wow what if there is a little pendulum swing even a couple of notches forget halfway but a couple of notches I mean now sky's is the limit for
Taylor Avakian
him. Yeah LA becomes crazy. Shout out to Tracy Park. You are doing great work Tracy Park. Um and you're going to be coming to the podcast. It's going to happen. I know it's going to we're going to talk about all this fun stuff. Um, I want to talk about um the rental data and how can someone determine the best rent for their unit when a vacancy does come up, right? I know that's a big question I get. Hey, where what should I lease my unit for? What's market rent? How do you guys determine what you should be trying to rent these vacant units for?
Chris Gray
So, what's nice being a regional company with the the uh footprint we have of 15,000 units, we have a lot of data. So, we could run our own data. There's also a lot of tools as you guys know, as you know, it's it's back to the old school looking at comps, right?
Taylor Avakian
What what are the major comps? What are they getting?
Chris Gray
And then you got to throw out a number and see what the market dictate dictates at the end of the day. Um, so that's uh, you know, the old school way and and that's certainly understanding the market, knowing the market, seasonality of of LA of when that that vacancy comes up. Um, you know, looking at uh any renovations and and what that would do to your your monthly rent. Uh at the end of the day, there's nothing wrong with trying for a high number, seeing what what uh response you get, and then dropping it as needed. Uh but obviously, there's a marketing component, you know, to that. Make sure the word gets out. The the more uh the better marketing or more demand, right? Yeah. The the uh uh higher the number um that you could get.
Chris Gray
But what is interesting, you know, one of the things in legislation, but now this is a California thing. Usually it's the larger, more institutional folks are using the computerenerated revenue
Taylor Avakian
management tool. Real page, right?
Chris Gray
Right. Everyone knows it for for that one. But there's Yardi has one. There's a there's a few out there. Uh and they're popular um for good reason, right? Because you you throw in your goals, your lease velocity and and uh your traffic and and it takes comps into consideration and it adjusts pricing. It it's doing everything a human would do but in a fraction of the time. Yeah. Right. Right. And that's what AI is about. Being more efficient. We talked about it at the beginning of the show. So, uh, unfortunately, um, the legislature feels that that's, uh, wrong to quote unquote maximize rent, um, from a housing standpoint. Yeah. So, uh, there is legislation now uh, in the state that frankly I think will absolutely pass which will outlaw any use of pricing.
Chris Gray
uh management tools uh in our industry in the housing industry. Holy. So if they're using it now, enjoy it because I don't think it's going to be around
Taylor Avakian
long. Interesting. So that means no automated tools to analyze pricing or do you know the language? Is it is it you can't use pricing to get a first number or you can't get pricing to do you know Monday it's this, Tuesday it's this, Wednesday it's this?
Chris Gray
Yeah, I think it's any algorith um any automatic system technology that's going to give you a price. It's but it's the same process of what a human
Taylor Avakian
What is the difference between that and Excel?
Chris Gray
Nothing. It's the same. But here's the other thing back to not knowing what they're doing. They think we're maximizing. Well, yeah, maybe. But guess what happens when traffic drops? Guess what happens when occupancy drops? The computer drops the price. And in fact, we have assets with it. Very few, but we do some of our larger ones. Those are faster lease ups because the computer is generating a lower amount to generate the leasing velocity versus where we don't have it. Yeah. And we have to fight that developer say, "Hey, we need a lower price." And they're like, "No, you don't. You need a better leasing person. You need better marketing." Yeah. Like, no, it's really kind. Look at the price. Look at the So, so what's interesting, I guess the irony of it all, the computer will lower the price of housing faster than any human
Taylor Avakian
would. It's almost like supply and demand is like re works like, you know, macroeconomics actually.
Chris Gray
That's how humans think about. You can't use that here in
Taylor Avakian
LA.
Chris Gray
Gosh, man.
Taylor Avakian
That's so frustrating because it just feels like people have their handcuffs that, you know, they're they're in the they're in a boxing ring and their hands are tied behind their back and they can't do anything and they got to take the punches and you're really trying. You're really trying. Like you spent all your life to buy this property and your kids, they come and help you and you're renovating it. You're doing all this stuff and then your expenses keep going up and you're like, "Okay, all right, fine." You know, we're going to be do do our best. We're going to make a little less money this year, but we'll get through it. And then the government says, "Hey, by the way, you can't raise your rents for a
Chris Gray
couple years." And you're like, "Really?"
Taylor Avakian
Like, "But my my trash bill just went up 35%."
Chris Gray
Like, "Are you sure?"
Taylor Avakian
"Yeah, unfortunately, you can't do that." And you're like, "Okay, fine.
Chris Gray
All right.
Taylor Avakian
I'm fighting through it.
Chris Gray
Cool.
Taylor Avakian
We just need to get through this time. It'll be fine." And then that happens for 3 years. And then your insurance jumps up by 4x, right? and you're looking at yourself and you're looking at this investment that you thought was going to be generational wealth and you're losing money or barely breaking even even and you have millions of dollars tied up in this and you got to ask yourself is it worth it and for a lot of people and a lot of clients that I talk to it's no longer worth it and it's really sad because all of these laws are just making it so that the mom and pop the person who wanted to have investments a little bit of cash flow passivity generational wealth they can't do it or it doesn't it doesn't make sense.
Taylor Avakian
They don't want to give their kids the burden of this stuff anyways because what is there to do? It's just like a it's like a bank account at this point except it doesn't pay you any interest. It's worse than a bank, right? And um and so that's really frustrating to me and I think if we can share with people what the reality is from not these greedy landlords, the Blackstones, whatever. And first of all, they they own like 12% of the market. So it's not even doesn't even make sense to me. Most of LA is mom and pop. No doubt. If they can show like this is, you know, Mrs. Sanchez who worked all of her life in a department store, bought this building 30 years ago, and she has to give it back to the bank. Like, what are we doing?
Chris Gray
Yeah, it's sad. And and that question, is it worth it? Is being asked by everyone. It's landlord fatigue, right?
Taylor Avakian
How, to your point, how many punches can you take?
Chris Gray
And it's one after another. That's why I'm hopeful that it's we're at the end of the line, right? the the punches are done. Yeah, we'll always have to fight, right, to ensure to to hold those punches back from a, you know, a legislated standpoint. But, um, but you're right, I I I you know, we hear clients, you know, saying the same, you know, uh, is it worth it at at the end of the day? Um, and that's where my hope is that it changes, right? And and it can change with city council and it could change with votes, right, of getting the right people in in leadership. But, but you're right. I mean, when you when you think of what LA has done to landlords, the rest of the world, I don't even think understands it, right? The landlords in LA, you know, it's such small number, right?
Chris Gray
They certainly know the pain, but it's such a small number that no one else knows the pain. And when you think of if I always said if I wrote an article or went on social media and did a video and and explained each step kind of almost what you just went through, no rent, you don't have to pay rent, you're not allowed to increase your rent, your trash fees just went up because LA needs to make more money, your insurance, etc. But everything you just went through to now there's a balance threshold before you could evict equivalent to one month's rent. Right? So what does that mean? I could tell you in our portfolio because you you know each unit type you know a studio I want is like 1,900 or one bedroom is 2200.
Chris Gray
You for your audience that doesn't know they you have to the resident has to be be above that threshold before you could file for eviction. So in other words they don't even have to pay one month and you can't kick them out. They could hold that balance for as long as as they're living in your place. What does that mean? a carrying uh delinquency consistently of $4 million in our portfolio. My gosh. Because they're in they're out or under the threshold. Yeah. $4 million. That's landl should be in landlord's pockets. Yeah. You know, and and no one right. It's hard to run a business that way. So, you know, we have a three-day notice cure quit. Another thing in the legislature um that was actually not passed. Uh it got kicked aside, but they're asking for reconsideration. is the 14-day notes and change a 3-day to to a 14-day.
Chris Gray
So, it it's and and by the way, on top of all that, we're going to pay for eviction defense. I mean, that's what I was just like, how can we get any can we get any worse? And so, yeah, it's like we're going to punch you, punch you, punch you, and then by the way, we're going to pay for that that fraudster resident that got in, committed fraud. We're gonna pay the city taxpayer dollars are gonna pay for that person's attorney. There's no money to attorneys for a landlord, right? It's absolutely insane. And it almost makes you want to, you know, scream for help from the the someone at the national level to say we are being, you know, kicked around over here. Harassment, it's not constitutional. Whatever you want to call it, and someone needs to come over here and slap some of our city
Taylor Avakian
leaders. I hope it happens sooner or later because um selfishly uh and I'll say it selfishly like it does not make my job any easier for sure. Um so what are some things because you've obviously had to get tight with expenses. You've had to maximize every dollar and
50:00–1:00:00
Taylor Avakian
you know what are some money-saving tips or ways that you've been able to maximize the uh you know revenue from properties that you guys manage?
Chris Gray
So we always want to maximize the uh the revenue right first height as far as values right so you always want to try to get max values um you do that for marketing accessibility having the right people etc. So uh it starts there at the revenue line and then you know at the end of the day we're always trying to increase NOI. So then you have to look at back to every process constant never- ending improvement uh where can you save money? Um we're finding there's uh some some regional companies that are kind of a one-stop shop on a unit turn from painting like your basic. So it's one invoice quick turn uh really shrinks vacancy time rather than dealing with maybe three or four vendors. Um, and they're pretty darn well priced. So, but it the value comes in the time, right, of the unit turn. Got it.
Chris Gray
So, uh, by the way, it helps having a large portfolio because, you know, economies of scale. Yeah. Um, we we do our best to leverage our size with our vendors. We try to be selective. We don't want to spread our business. We can't have one vendor. Yeah. But we don't want to we don't want 200 vendors. We want maybe three to five because they appreciate the business and the pricing gets better. Yeah. Um, so I think unfortunately a lot of the efficiencies come with size. Your products that you buy, it's all volume, right? The higher your volume, the big the bigger discount you get. Um, so we're able to take the discounts of of product and service uh due to our size and pass to our clients. So I I would say unfortunately that's more of a competitive advantage. Um but like um you know like anything I
Chris Gray
think there's always a a smaller vendor business person, single operating plumber for example. Yeah. That any building owner and and I know a lot of building owners out there have those relationships and they're almost like extended family. I I think you can't go wrong with with those relationships when you need those services to have the right people to call to make sure you're you're getting a good deal or a good value and you're not being lied to. Um, you know, it's such an easy concept. There's really no uh secret sauce other than the the whole relationship and leverage and and get the best price.
Taylor Avakian
Are you doing anything from trying to create more storage income, like creating spaces that were underutilized and making them into storage? Are you seeing a lot of landlords do ADU stuff? Are they charging for parking? Are there any ancillary income? Laundry? I don't, you know, are there any things like that where you can try to plug and play to increase the income?
Chris Gray
Yeah, there's a list of ancillary fees that you could generate, right? um with uh renters's insurance, you know, for example, is one. Uh you mentioned laundry parking. Um ADUs is is popular. I I think it's kind of died off just because of the cost, you know, return. Um so that's that's died off. That was a popular play. Um I think we will see parking become more of a charge throughout the city. it already is in many subm markets of LA. Um, but a lot of new construction because it's not penciling are underparked. Um, we have we have two properties we're opening up in the in San Fran Valley that are underparked significantly. And it'll be interesting because it's the first ones in the valley, right, that to my knowledge, Yeah. that are under park. So, it's going to create a challenge, but um and we're
Chris Gray
at the very beginning stages. We're waiting on TCO. Uh, but it'll be interesting to see how many residents come in in
Taylor Avakian
that market that don't have a car.
Chris Gray
I'm curious to know the way up. Yeah, it'll be it'll be an interesting uh uh white paper for
Taylor Avakian
sure. What do tenants value the most? What what things like if someone's building a property right now? What should they make sure that they either have in their building or that tenants actually will pay for to get the highest rent?
Chris Gray
It all comes down, you know, everyone's looking for that secret sauce. uh remember for a long time the last decades what do millennials want? Oh, they want co-working space. They want gathering, social gathering space, right? But then you you take any young person say, "What do you want?" He goes, "Location and value. I want to be in a good location at the best value, right?" And of course, everyone's different, but those are the main needs, right, at the end of the day. So, I never want to overthink it. Obviously, amen fully amenized buildings, movie theaters, golf simulators now, and some of the big ones. It's all sexy to during the tour and it sells. So the amenities sell, they're rarely used.
Taylor Avakian
That's what I'm saying.
Chris Gray
Just use for marketing. Yeah, absolutely. Um but I I think the best, you know, advice is location value and um and and sense of you know, sense of community. So you you don't go AI instead of a person. You know, you got to have someone there. Obviously depends on the the size of the the asset, but it's your on-site team that's going to create that sense of community and budget a line item for uh resident events. I mean, that's the that's the name of the game now. Really, you got to create that small gym atmosphere, yoga on the rooftop, uh private trainer in the gym. Yeah, you got to get those relationships and develop that sense of community.
Taylor Avakian
Do you guys do all that in house and coordinate that or are there companies that you can kind of use as third parties to make these events happen?
Chris Gray
So our portfolio ranges because we are specific to greater LA. I mean we have things as small as you know 15 units. We we try to stay above 30 and then we have as high as 500 units. So um to your question yes there are companies that will run events. Um as you know it costs right there's middleman there. It makes it easy but there's a middleman. So, we're usually generating our own events. Um, they don't have to be spectacular, right? But they they need to be social and they need to be convenient and they need to be something that the residents want to do. Um, one of my favorite things actually, and we've done it at 50unit buildings and 400 unit buildings, and I unfortunately don't know the guy's name, but he's an electric violin player.
Chris Gray
He sets up at sunset like a little cool light that lights him up. He'll be like on a balcony over over the pool or a walkway. Yeah. And he plays on this violin like like rock and roll. No way. It is really cool and also kind of relaxing. Yeah. So residents go out there, glass of wine. It's awesome. One guy, two hours, right? And it it creates quite the ambiance for our residents and they love it. Epic. So So something as simple as that.
Taylor Avakian
Yeah.
Chris Gray
Yeah. Yeah.
Taylor Avakian
You just like little things, little concerts or whatever it is to feel like there's community. I That's interesting to me because I've never lived in a big huge apartment complex. Most of it's 15 units, six units, you know, a house, stuff like that. But I can imagine when you're in one of those bigger things, it's like sometimes you don't even know your neighbors, you know. So, what's what's an excuse to get people in the complex to start knowing each other, becoming friends, share, you know, butter and uh sugar and stuff like that?
Chris Gray
For sure. You know, there's a lot of apps too, you know, um that kind of could also assist in creating that community. There's one in particular, and you, by the way, you can select which applications on that app that you want to actually do at your community. Got it. But I know one, for example, is a is a dating app forities. Yeah. We never we never turn that off. Yeah. Yeah. Yeah.
Taylor Avakian
That might increase turnover.
Chris Gray
Oh my gosh. Or decrease households or Yeah. It's exactly people in your tenants, right? Business. thought it was an interesting concept. They have on the same app, they have uh, you know, pet dates, dog walking dates, you know, that you can set up with neighbors, you know, that type of Yeah. Yeah. Yeah. Huh.
Taylor Avakian
All technology driven. Man, that's super.
Chris Gray
Yeah.
Taylor Avakian
I'm I'm I'm For me, I like to think about where again there's opportunities where there's alpha in some of this stuff. Um, are there any alpha opportunities in any of the business that you're doing personally with the company? uh you know other business ideas you have like is what are you most excited about I guess right now moving forward with what you're working on?
Chris Gray
Um our growth our vision at 15,000 units would be 30,000 units. Um 10 years ago it was 15,000 units, right? Yeah. And so that's our our trajectory. That's where we want to go. Uh and that gets me excited. Um I get excited of building a team. um seeing someone at new hire orientation and watching them grow within the organization that's so gratifying to me. Uh we have 400 employees um which means a lot because that means you have 400 families relying on you. Um, you know, another little motto of ours is if you're not growing, you're dying and, you know, with growth brings opportunity to your current um, uh, team members and it brings security, right, at the end of the day and and that's so important and that's what really kind of drives drives me.
Chris Gray
It's not being the biggest I in fact in some respects the mindset the bigger you
Taylor Avakian
are the more headaches, right?
Chris Gray
So, it's not about being the biggest, but it's about consistent growth. So I could keep the talent, keep them interested and make sure that they feel and we never have to cut. It would destroy me if we went the other direction and I have to lay off people. That would be destructive. And fortunately, we never had to.
Taylor Avakian
We're always growing the team. I like to ask this question. I like people to think a little bit outside the box. This is unique to you. So I guess I like to ask questions like this. I haven't asked this question before, but if you had to start over from scratch, zero, and you had to start a property management company from
1:00:00–1:10:00
Taylor Avakian
the ground up, what would you do to build that company? Because big ships are sometimes hard to steer. So, there's certain things you can't do that maybe you want to do, but because it's too big, it would be too disruptive. Like, if you had to start over, how would you build a property management company to be the leader, the number one? Are there systems? Are there processes? Is there things you do from day one to grow it?
Chris Gray
like you know it's it's a great question um first I will say we are a big regional company we're not like a big national company like Greyar or something so for example I think we're very nimble right yeah so if there's a new technology that I want to implement we're going to implement it okay I'm more of an action guy fail and learn then sit on the fence and look for a year of what's next right so we're always what's next So, so with that being said, I think the only benefit of starting over is you could create processes a lot easier when you're smaller. But as you grow, the processes have to change, right? When I first started, everyone wore 10 hats. As you grow, you can't wear 10 hats or it's going to be a disaster. Yeah. Um, so you're always creating new positions and new processes.
Chris Gray
So, I don't, you know, it's interesting. I don't think I would want to uh start over. I don't think it I would change anything. I think um if anything I I guess one thing about starting over would be you know we all make hiring mistakes sometimes. Yeah. So I try to avoid those but sometimes that's impossible. But we have such a good team. I think we're such a good culture. We're um we have fun and frankly I don't know. I think I think starting over sounds like a a big pain. Uh, I love what we have and and we continue to have fun and be nimble and, you know, try to conquer Southern California market for our
Taylor Avakian
clients.
Chris Gray
Yeah.
Taylor Avakian
I um a little bit off topic, but I I know you're a whiskey guy. Do you have a favorite whiskey that you like?
Chris Gray
Well, I'm kind of an everything guy. Let's see. Favorite uh what would I drink?
Taylor Avakian
Like what are you drinking right now, you know?
Chris Gray
Oh, well, probably more of a tequila guy. Oh, really? Yeah. Okay. Yeah.
Taylor Avakian
Uh so, give me the tequila that you're into.
Chris Gray
Yeah.
Taylor Avakian
It kind of changes with tequila oo like the forlesa. Is that good?
Chris Gray
What do you Yeah, I'm I'm kind of simple. The uh the um of course now I'm going blank.
Taylor Avakian
Didn't know this question was Yeah, I know.
Chris Gray
Used in my head.
Taylor Avakian
What is it? Uh who's the actor?
Chris Gray
Clooney. Yeah.
Taylor Avakian
What was that brand?
Chris Gray
Um the reposado is what?
Taylor Avakian
I like that one. Yeah. K.
Chris Gray
No. Yeah. Kasu. No. Okay. That one would be top shelf.
Taylor Avakian
Okay. So do that one.
Chris Gray
Yeah.
Taylor Avakian
I I don't remember what. Uh but you know which one. I don't.
Chris Gray
Yeah. Yeah. Yeah.
Taylor Avakian
Clooney is one.
Chris Gray
Kasamigos. Cosmos.
Taylor Avakian
Okay.
Chris Gray
Kasmigos. Okay. Kasmigos reposado. Okay. All right. See, I'm cheap.
Taylor Avakian
I'm a Hey, look.
Chris Gray
Yeah. Right.
Taylor Avakian
A cheap date.
Chris Gray
There we go.
Taylor Avakian
I know. I got a gift for Chris. It's just $35 bottle of Kasamigos.
Chris Gray
Let's go.
Taylor Avakian
Um, I want to talk a little bit about Agla before we wrap up. So, you're on the board there. Like, what are you guys fighting behind the scenes?
Chris Gray
What's actually going on that it's it's non-stop and I never realized it before I got on the board. Um, you know, I the association and anytime there's an audience on a panel or something, I always bring up Agla to say if you do nothing else, join because your membership fees, number one, you get great resources with it with the membership um to stay up to date on latest market trends. I think it's fantastic with all their red alerts that they're fighting. They put out um you know, they cue you when we need you to to dial in city council or or state legislator. Um, but just to join because that membership, those membership dollars are going to work for the industry. Um, I've never seen anything like it, right? There's so much whether it's charity or nonprofit or organization, you never really know where the money's going.
Chris Gray
But being on the board, I see, right? It's we're all no one's paid on the board. We're all industry folks uh donating our time and trying to figure out what's the best thing, you know, for the industry. But to your point, so much of it in in California and specifically LA, which I love Agla being specific to LA and they also have the surrounding uh cities uh that they cover, but they are at these they're in front of these council members. They're at the meetings. Um they're so dedicated that that team that that's there that that are employees of AGLA, which are are hugely needed. You know, like every probably organization like that is underst staffed. So they work their tails off and um to your question it's every year there's a laundry list of legislation written that's being proposed and by the way a lot we pay
Chris Gray
a lobbyist she's fantastic um at the state level um so she gets to work immediately on all the things we're opposing as a board and unfortunately we oppose 99% of what's suggested did and we're always trying to find one thing we could get behind, right? So, we're not just the bill killers, but um they're hard to find, right, in California especially. So, um there's a lot of time and effort just going going against legislation, right? We talked about all the things that passed that we have to deal with. Yeah. I think if the general public knew that what was potentially coming, it's it's double or or triple. Wow. So, it's all that effort in the background with the lobbyists to knock that stuff out. Yeah.
Taylor Avakian
Um, is there anything that people should be prepared for or or do to prepare for anything coming up or, you know, is there something that people should be actually looking into?
Chris Gray
You know, there there's always some that we're we're trying to, you know, cut down, but I would say, you know, we talked about the three-day notice to a 14-day notice. It's not the end of the world, but I don't think it's it's going to pass. We talked about the machine pricing, computerized pricing, that's probably gone. Yeah. Uh, I don't think that's the end of the world. Um, there's always attack on um, you know, local uh, rent control, right? And rent caps. Um, you know, there was a a bill written that's was was dropped, but they're trying to reconsider it. You know, with the fires, if it was lost in a fire, you got to and you rebuild, it's going to be subject to 1482, right? It's like, okay, someone's not going to redevelop, right? It's just it's silly what they do.
Chris Gray
So, um, there's a lot of that, but I I would say fortunately we dodged a lot of bullets over the last three years, right, with some of those big votes on on the props. Um, so the good news is nothing too groundbreaking uh in the horizon, but then there's always next year. So, the folks at Agla will be fighting again year after year, unfortunately. But, you know, at least they're doing good work.
Taylor Avakian
They are doing good work and we appreciate them very much. I love you guys newsletters. It helps me out a lot. I use it. I just regurgitate it to my clients. So, I thank you for that. Um, one last thing. Um, I heard Prop
Chris Gray
13 potentially can come back.
Taylor Avakian
Have you heard anything about that or know anything?
Chris Gray
That's always the rumor. Uh, so here's my crystal ball. If it if it comes to haunt us,
Taylor Avakian
can you explain what Prop 13 is for?
Chris Gray
Yeah. So, it's your cap on uh on your property taxes, right, from your Yeah. your purchase. Whereas, you know, a lot of states, right, for example, it's reassessed every year. Yeah. And it just becomes a line item, uh, you know, like in the state of Texas, for example, that, oh, we got to fight our property tax assessment. Uh, so that's a pain. Hopefully that never happens in California. Um, because that's what they're trying to do, right? They need revenue, so they want to increase everyone's taxes in one way or another, and getting rid of Prop 13 is one way to do it. So, with that being said, um, you know, it goes back to the loud voices. I think homeowners in California will have a loud enough voice to prevent that from ever happening. That's my future, my crystal ball outlook. However, commercial property is another story.
Taylor Avakian
And how do you define commercial?
Chris Gray
That's a good question. How does the state how will the state define commercial at some point? Uh is commercial, you know, office, industrial, right? um retail or is commercial multif family? Um so that one I do think commercial and I'm hoping it does not include multi my crystal ball says no multif family but other commercial assets which makes no sense because oddly they struggle more than the you know multif family.
Taylor Avakian
Yeah, most of these trip the tenants are paying the property taxes. So, you're putting all these people out of business. Like, what are you doing? So, uh yeah, but you know, they need money, right?
Chris Gray
So, they're going to find it somewhere. Um unfortunately. So, I hope I'm wrong, but um talking to the uh the um Jeffrey Pring, right? Tax assessor. Not the collector, as he likes to say. He's not the collector, he's just the assessor, although it's pretty important job. Yeah. Um because it results in collecting, right? So, um, in conversations with him in the past, he has said commercial. He's he said what I said, and that's kind of where I, okay, you know, take that from, man.
Taylor Avakian
Well, we need to have our voices heard. You guys heard it. There's uh there's plenty of time and people for us to go and support. So, just like spend 15 minutes and send an email, make a little phone call, like do your part because it affects everyone. Um, so Chris, thank you very much for being here and this was awesome. I love diving into that stuff. I'm a nerd about all the the details. So, the fact that you knew all that was was great.
Chris Gray
So, um thank you, man. Yeah, great meeting you. Great guy, great broker. Call him. Thanks. Thanks, Chris. All right, bud. Thank you. That was fun.