James Phifer: Hello, everybody, and welcome back. I will tell you what. A lot is going into this new year. This gentleman right here is a vote of congratulations for the purchase of Knott Laboratories. Give us your elevator pitch.
Mike Lowe: Yeah, elevator pitch. So Knott Laboratory, we’ve been around since 1982, and we’re just here to help you guys with all your engineering needs, building issues, really and any drainage thing you have. We’re always up to come out to your community, no charge, walk the site with you for free, and tell you do you have an issue or not. We’re not the ones that are going to benefit off that work, so we don’t have an agenda. And like I said, we’re willing to be there for your community board meetings. Pick up the phone if you got a question. Hit us up.
James Phifer: The services that your company provides to community associations, it’s hands down one of the most important for a variety of different reasons. You know, engineering, many community associations rely on a manager to say, “Hey, we have a problem over there. Can you please go ahead and get that fixed?” Well, a lot of the time it’s way beyond the scope of what community association managers know how to do, and it requires engineering. So from an engineering aspect all the way to what I call phone a representative, which is when costs to an association … pick a number … exceed 50, 70, $100,000 in some cases, and the community manager, it’s just getting too large for them. Hiring a company like yours to oversee the process to make sure that the contractor is doing things the way that they scoped it out when they bid to the association. Tell our listeners exactly what it is that you do for these community associations.
Mike Lowe: Yeah, I would say the biggest thing that, how we view ourselves at Knott Laboratory is simply we are a tool in your guys’ toolbox. That’s how I like to say it. It’s how our engineers like to provide it. We’re a independent, third-party consultant. We’re not aligned with anybody on the management side, the contracting side, the city side, whatever it may be. We want to come in and help you guys. I don’t think it’s in your employee handbook, is it, that your property managers should know everything and everything? Everything and all about construction? Is that in there?
James Phifer: It is not. It’s not in our contract, either, but yeah, sometimes that’s the expectation. I’m not saying all the time, but sometimes, I definitely think that’s what we do.
Mike Lowe: Yeah. And I think there’s a ton to the last decade of learning about this stuff is dealing with communities is hard. It’s rewarding, but it’s also difficult because there’s so many different areas that you guys deal in from the landscaping to the building maintenance to getting letters out on time. Getting-
James Phifer: Insurance, covering the covenant enforcement, and the list goes on and on, of course.
Mike Lowe: So it’s a super valuable service. And what we’re there to do is really anything with the vertical or the horizontal is what we say of the buildings, right? So the grading and drainage of a property or the buildings themselves. So anything that goes wrong, what we like to do is you can just … You can call contractor A, B, and C and get quotes, and that’s often what happens.
James Phifer: Mm-hmm (affirmative).
Mike Lowe: The problem with that sometimes is that, again, you’re not … I don’t think it’s in your job description to know everything that’s going to be in a contractor’s bid and what that actually means for a community. So what we do on that owner’s representation side is we can come in as an independent party and offer some value to a community and to a property management firm by assessing like, “Okay, hey …” For instance, “This firm wants to redo all of the sidewalks. This one didn’t. That’s why the bid price is lower.” You know what I mean?
James Phifer: So one of the services you provide to associations is comparing the proposals from three different contractors to verify what we call apples to apples.
Mike Lowe: 100%.
James Phifer: Is that right?
Mike Lowe: 100%.
James Phifer: Because it’s so hard when you receive three proposals-
Mike Lowe: Who do you choose?
James Phifer: Yeah, one is $10,000 less than the other. Sometimes it’s easy to quickly say, “Oh, well you know, this is the most affordable option. We’re going to go with them,” but what are you losing in that? Right? To have somebody who has the skillset to be able to come in and do that on a high level. Many managers can perform this responsibility until it starts to get to such a scope that it’s out of their realm. And that’s really when you need to hire a owner representative that is going to look out for the better interest of the community association and the board.
James Phifer: Let’s just take for example that we have a sinking building and it needs to be addressed. That’s going to take a certain level of engineering. You’d want the engineer to write the scope, for the three contractors to bid that scope, and you don’t want the manager telling the contractor what to do, because they’re not educated and they don’t have the degrees to say that the fix that was presented was done the way the contractor had specked it out. It’s really going to take an engineering firm to complete that process.
Mike Lowe: Very often, we come in after you know the problem. Like, “We got this problem, and we need to fix it.” A property management firm will go out and talk to contractors and get it in, and that’s fine. We’re more than happy to come in and do that owner’s representation stuff. We like it best when we come in first with you guys, assess the issues. We’re a forensic engineering firm. So forensics, fancy little word. Didn’t know much about what it meant before I came here, but basically we’re just on the investigative side. We are not your traditional firm that you come, “I want to build a building,” and we draw you up the designs. That’s an engineering firm or a architect firm.
James Phifer: Mm-hmm (affirmative).
Mike Lowe: We are capable of doing that stuff when it coincides with a project where there’s an investigation or an issue needed. So we will often times, decks and stairs seem to be our number one thing in communities. You know, these people build these great buildings and then we start screwing them up by punching holes into them for windows and doors, which are probably needed. And then we just stick these structures on the outside of them for decks and other structures outside, so those often fail the quickest. That’s what we see.
Mike Lowe: And so what we’ll see is a bunch of stairways being reported as having damage. We’ll go out, assess the issue. We will come up with the repair plans and work on that scope for a contractor to bid it. We’ll also go with you when necessary, you being the property manager, and talk to your board about it, because that’s sometimes an uncomfortable situation where you have to go stand in front of your board and be like, “No, this is why …” Let us help you. We’ll go and tell them the nuts and bolts, so to speak, of that project. And so that’s kind of our whole scope is we are that tool that you guys can use to better communicate with your boards, your communities, and with your contractors, and just to make sure everybody’s getting that apples to apples comparison, and everybody’s got a fair shot and knows what’s on the table, and what the money’s going to be spent for ultimately.
Mike Lowe: The other big thing too that comes to mind really is that the engineers can be thought of as, “Hey, if we can save this cost by not bringing in a professional engineer, so to speak, let’s save this $5,000 or $10,000.” The problem that you get with that is we’re trying to help you with the city. You’re going to have to get permits for everything. You’re going to have to get all that stuff pulled, and at the end of the day, a lot of that stuff can get overlooked. and then you get into a project, and then you have problems.
James Phifer: You don’t want a general contractor building a property without a developer in many regards, because you want to make sure a developer’s overseeing it so corners aren’t cut.
Mike Lowe: Checks and balances, man.
James Phifer: Checks and balances. The majority of the contractors that do business with our company are reputable. They don’t cut corners. They’re great. One of the reasons you want to hire an engineering firm for the oversight is because there are issues in the construction industry, and it’s a known fact that what is put in the proposal is not always what is completed on the property. The board nor the management company really have the tools, right, the engineering firm, to be able to determine whether or not all of the layers and the construction were put on the appropriate way, and that’s where the value add happens. So if you’re trying to save $10,000 by not hiring an engineering firm, you may lose, I don’t know how many times more in having to make that repair down the road.
Mike Lowe: Yeah, so this community up North, very large and they were going under a reroof process. They brought us in after a contractor was selected, and we were able to work with the contractor on it, but we saved, working with the contractor. The contractors know what’s going. For the most part, they’re all reputable. They’re all trying to do a good job. But in the communication and somewhat of accountability working with an outside firm, you can come up with different solutions, and we were able to save them a quarter million dollars just on a simple reroofing project. It was just simply because we made sure every basis was checked. We had nothing in it, right? The community was thrilled, and they were able then to go out and enhance some of the other areas that were a little bit less important than your roof.
James Phifer: Sure, but they were able to take that money and repurpose it-
Mike Lowe: Totally.
James Phifer: … to address some other maintenance that needed to happen in the community.
Mike Lowe: All the flowers got planted that year.
James Phifer: That’s awesome. One of the questions that we are always curious to ask anybody who is on this show, if you had words of wisdom for a community manager who is interested in performing that as a career, what would you say to them?
Mike Lowe: If you like to be out and about working with other individuals, socially, that builds your energy level, I think this is a great career. You’re not going to be sitting at a desk every day. You’re going to be out and about, and I think you get to keep sharpening your tools, personally, every day on the job. And I think the great thing about being a community manager is you can build that portfolio to whatever you can manage. I’m sure someone in your position, you’re like, “Yeah, where are those people at?”
James Phifer: Where are those people at?
Mike Lowe: I want them.
James Phifer: That’s of my concerns, running a community association management company, is that the career option is not a glamorous one, but when you’re in this career, the benefits are not something that you see on a day-to-day basis. I’m telling you, working with the engineers, understanding how buildings are put together, having to know everything from insurance to roofing to siting, to all the different types of siting, concrete, asphalt, you name it, when it comes to a property, there is a certain amount of knowledge that you gain over a career. When you start to understand how all these pieces function together, and the business partners that you get to have, and the relationships you get to create, it becomes an industry that is hard to get out of after you have probably a one or two year run in it. The first year as a community manager is by far the hardest. Coming in, learning budgets, pool season, turning on irrigation system, like getting just through a full cycle that first year. Oh, if you’re in your first year of community management, hang in there. I promise you it gets better.
Mike Lowe: Lots of coffee. Lots of coffee.
James Phifer: Lots of coffee. But once you-
Mike Lowe: Just to touch on what you just said. I think, and that’s what’s important in whatever career or path you decide, is the biggest reward in all this stuff is the community you build.
James Phifer: That’s right.
Mike Lowe: The networking and the people that you’re working with, for, and around. And I think what’s so cool … Like I said, I came to Denver. I didn’t know anybody, and I have strong friendships and great community with a ton of different people in this business. And everybody, it’s very welcoming. It’s accepting. There’s roles. Like when I first came in I wanted to do more with our CAI organization. You can get involved with this. You can get involved with that. You learn a lot, and you meet a lot of good people, and there’s always people there to help you, too, which is important.
James Phifer: That’s important.
Mike Lowe: So I think it’s a great career path if it’s something … You know, like I said, you got to be willing to get out and get around and talk to people and solve problems. But yeah, it can be very rewarding in the lives you can impact and the community it can put around you.
James Phifer: It may not be glamorous, but when you impact somebody’s life in a positive way and you’re building community, there’s not a better feeling than that. I really, really do enjoy it, what it is that we do for a living. You know, being a board member for a community association is oftentimes a really thankless position.
Mike Lowe: What do you mean? You get your door painted whatever color you want to paint it.
James Phifer: That is true. That is true. You can get on the board with an agenda. That is-
Mike Lowe: I’m sure that doesn’t happen.
James Phifer: It happens. I promise it happens. I think most board members get on the board for the right reasons. We have some that don’t. But if you were a board member … Let me say that differently. If you were a community member that is being asked to be on the board or a reason you should run for the board, what would be some of your advice?
Mike Lowe: Yeah. I think that everybody likes to impact change around them. And I think obviously this is a clear cut way to get on there and have a voice. I think the best people and the best people I’ve ever had around me or involved above me making decisions, the selfless leader in those communities can make huge impacts on the change of where you live. You know, kids are out running around and you’re home. That’s an important thing these days. And so I think the more you can think of others in a position like that and take that to heart when you’re on a board is invaluable to a community.
James Phifer: Communities, when they’re dealing with really difficult decisions, and I know you’ve seen this a lot, because when they’re to the point of needing engineering, it’s usually not small dollars. We were talking about this just a second ago, about how you come and speak to the board, and many times it’s more than the board. It’s the board and the community, because at this point, it’s coming to a head, and there’s people that are upset because something isn’t being done or there’s a cost involved maybe through special assessment that’s really drawn the attention of a lot of people. They’re almost to the point of bringing pitch forks to the meeting, because they’re upset. For a board and a community manager for the industry, what do you think some of the best ways to approach those situations and those members are?
Mike Lowe: We were talking about what it takes to be a good community manager. I mean you got to have that heart for people where you got to understand, this is where they raise their kids. This is where they go to school. This is the roads they go out on walks on. You’ve got to become a part of that community to do that job well.
James Phifer: Mm-hmm (affirmative). You do. And some of the communities that I’ve managed personally … I recently gave one up because of my role for my company, and it was difficult for me and it was difficult for them. I think they almost mourned-
Mike Lowe: Like saying good-bye.
James Phifer: Yeah, my exit from managing that. I think it was 12 years I managed that community.
Mike Lowe: Wow. You become a fabric of that community.
James Phifer: Buddy, I tell you what, every time I walked that community, if something was out of place, I took it personally-
Mike Lowe: Yeah.
James Phifer: … because I felt like I had ownership, even though I didn’t own it, and that’s very true. Walking into those scenarios, and this is coming from my experience in being a community manager, there are two different sides of what we’re talking about. There’s the business side and there’s the community side, and sometimes, in this situation, they overlap or at some level have conflict. Mr. Jones is on a fixed income. He can’t afford the special assessment. That’s a community problem, right? That’s a being-a-neighbor issue. The business side of it is the documents for the community association state that the board of directors shall maintain the common elements. The community knows that that asphalt is a problem and creating a hazard. We also know that Mr. Smith is handicapped and in a wheelchair, and he is not able to get through the parking lot in its current condition. That’s also a community problem.
James Phifer: So we have two conflicts of need and something has to be done. What I’m trying to represent here is that there are certain times when you’re dealing with a corporation, because a community association is a corporation, that you have to make the business decision before you can just make a community decision, and that is tough for board members. For homeowners out there, remember that these board members are volunteers. They are not being paid for this position, and to make the decision to special assess everybody in the community is very difficult, because it’s usually not a popular option.
Mike Lowe: Yeah, I’m always, if I’ve got two options and one’s to pay less, I’m probably going to choose the pay-less option.
James Phifer: Usually.
Mike Lowe: Yeah, no, those are tough. Those are tough calls. Again, it goes back to empathy and how you do your job and and having that relationship with the community. I mean, I’ve seen in what you just described, right? where you left the community after 12 years, and it was tough. You can tell when you walk into that board meeting. Especially a firm like ours, we’re not involved on the day-to-day and all that stuff, and you can tell those communities that love their managers, and it’s awesome to work with. It makes everything go well.
James Phifer: I did a vlog not too long ago about what it takes to be a community manager, and I explained that you really, really have to work hard for a couple of years. But once you gain the trust of that board, the way that they treat you … It’s like they won’t do anything unless they’ve talked to the manager first for advisement, because that level of trust becomes so high. And when you have communities like that and clients like that, it really just makes working an amazing experience. So again, great interview. Thank you so much, and we’ll have to do it again sometime.
Mike Lowe: Yeah, thanks, man.
James Phifer: All right. Thank you. Awesome.
Mike Lowe: Cool.