Podcast appearances and mentions of pete they

Pete Neubig has been investing in real estate since 2001. He has owned and managed 39, 52, and 100-unit apartment complexes. He currently owns single-family homes and a 52-unit apartment complex. Pete created a property management company based on the motto "by investors for investors". His property management company has clients from Houston and all over the world. His technology-based systems allow owners to see everything that is happening at their property without having to be involved. Pete leverages virtual assistants to do more than he can do on his own. A real estate virtual assistant (VA) is a business admin who essentially acts as your right hand. A real estate VA can offer a variety of business services in-person or remotely. The right VA can cover diverse tasks like lead gen and database management, or even finance and marketing. Tune in for today's episode where Pete talks about how he uses virtual assistants and what real estate investors should be aware of when they want to take this step in building a team. Episode Link: https://www.vpmsolutions.com/ --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and joining me again today for a recurring visit is Pete Neubig and he is the founder of VPM solutions. He's gonna be talking to us today about virtual assistants and what we as investors should be aware of and how we can utilize them to our advantage. So let's get into it.   Pete Neubig what's going on man, you are back for more didn't have enough the first time we had.   Pete: Man, Michael, thank you so much for bringing me back on. I had we had such a blast. You know, last time just talking about my investor jury and then right at the end, we got to talking about my new venture and so I'm glad, thank you so much for having me back to talking about my new venture.   Michael: Of course, no, super, super excited. So for those who didn't catch the tail end of our conversation from your prior episode, give us a quick and dirty who you are, and what you're doing in real estate and what your company is all about.   Pete: Sure. Well, my name is Pete Neubig. I'm out of Houston, Texas, I started buying properties in 2001. I bought so many that I failed miserably at it that I ended up creating a property management firm in 2012, sold that firm in 2019 and in 2020, I started VPM solutions and we went live with our product in 2021 and VPM solutions is think of it as a dating service. It's like it's an online marketplace that connects people in the United States and Canada, like employers, you know, people in real estate, with contractors in mainly Philippines and Mexico, but we're in about 60 different countries where we have different contractors and so that's you know, so we're like, like dating service, like match.   Michael: I love it, I love it, I love it. Okay, so who are your clients? Kind of on the investor side and then who are your contractors on the contractor side, just random, random people?   Pete: Yeah, that's a great question. So we really try to stick with the real estate industry. So because I'm a property manager by trade, we started with property management and so we targeted property managers in the United States and Canada, right, because in property management, as most of your clients know, especially if they self-manage, is a process oriented and is a people oriented business, right? It there's a lot of things you have to do manually and so you can't automate as you can automate a lot. But there's still a lot that has to be done manually. So we started there. So that's our main clients, we're now breaking into the real estate and brokerage side of things because there's a lot of work, there's a lot of help, they need like transaction coordination, and just generating leads and appointment setting, so we're there, as well and on the contractor side, what we're looking we advertise we do quite a bit of advertising in different countries, just letting people know, hey, you can work from home, you can pretty much make a little bit more money than what you can get, you know, in your environment and we actually build some, it's called LMS. But it's video training, that you can literally take video training for free to learn more about right now is property management. But we're going to be built, we're going to be throwing some other videos out there always well, we'll be adding more video training out there and so are our contractors, somebody who's bilingual, someone who's educated, and somebody who's looking to make a little bit more than what they what they make in their own in their own country, and that they want to get into real estate, mainly property management or in the real estate industry.   Michael: Okay, interesting. So I am like, the whole concept of a VA is I understand it, but it's totally foreign to me, I've never utilized one but I know people who have so give all of our listeners who are listening, a little bit of background or insight like why should someone consider a VA, like what benefits do they bring?   Pete: Yeah, another great question, man. It's like, so, here's the main thing, right. What happens is, you get so much work, that you need to hire somebody, right? Whether it's whether you're self-managing, and like me and Steve, what my business partner, we were self-managing properties and next thing, you know, we had all these maintenance requests, we had all these leases that had been renewed and we had all these resident questions and we have lease marketing, and it gets daunting and all of a sudden your conical passive job becomes very, very active very quickly and so now you have to either A) hire somebody or B) you know, hire a property manager or hire somebody internally, right and so when you start looking at assistants in the United States, what happened was, especially after the pen EMIC with inflation. So what's happening is those low level low enjoyment tasks that that you don't want to do as the you know, as the investor or as the self-manager you want to give to somebody else? Well, if you, you try to hire that person United States, typically what happens is that job role doesn't pay what people want.   So for example, it might be like the job role might only pay 30,000 a year, right? That's a full time, whatever, but the person wants 50,000 a year and if you pay that person, what they wanted, you would make you would be negative cashflow, you will make any money. This happens quite a bit when you're managing your own properties and you're kind of building your portfolio and adding more properties to your portfolio. It's like all of a sudden, you're overwhelmed overworked, to hire somebody, now you're cash negative and so and then what happens is with these folks, what I found in my personal job, my personal company, Empire industries, when we when we started, we manage over 1000 units. When I hire people in the US, they have like a GED, or that you're getting very, like you're getting very low, you know, schooled, low education type people, and what happens is one, they're not appreciative of the opportunity get, and then two, they always want more money, and then three, they always bring in their outside challenges into your business, the car doesn't work, they take more time off, you know, they have family drama, that kind of comes into your business and so in the past, what happened was, you have to be stressed out to make money in property management. So I have I have, I have, I have all these doors are managing, I have all this work that needs to be done, I have to hire somebody. But as soon as I hire somebody, now I'm not profitable. So now I have to go get more properties to manage, so that I can bring the income up and now everybody's stressed again and the reason why everybody's stress is because I'm hiring people in the States, which, you know, demand a much higher hourly rate, if you will and so what I realized is, if I, if I hire if I outsourced, in a second or third world country, I can get educated people, bilingual educated people, that will work for a lot cheaper than somebody in the US and it's not, I'm just going to pay them less because they're in the Philippines or they're in Mexico, it's that in Mexico, $10 an hour goes a lot further than $10 an hour in Houston, or $10 an hour in Northern California. So the way I tell people look at is like this, if I took if I was doing the same job in Northern California, as I do in Houston, Texas, I'd get paid a lot more for that job in Northern California, because the cost of living, right, and then I'd get less money doing the same job in Houston, because of the cost of living and I probably make, I probably even get paid less if I was in like Arkansas, because of the cost of living. The dollar still travels just as far. Well just think of Mexico, as you know, as the next level down of cost of living. Just because you're paying somebody $10 an hour doesn't mean you're taking advantage of them. Matter of fact, $10 an hour in Mexico is a very good hourly wage. It's actually a very good wage and then in Philippines, to give you an idea, Michael $4 an hour is a good wage in the Philippines.   Michael: Wow.   Pete: And you think you save yourself? There's no way we're gonna take advantage these people? No, I mean, $4 an hour is a good wage in the Philippines. So it's, you know, as a criminal getting paid very well here in the States and so, the reason why people are outsourcing is because I can get bilingual and by the way, most of these people are either their high school educated or greater. They have some type of education after high school, whether it be associate's or a college degree. So you're getting educated people that that are bilingual, for a fraction of the costs in the United States that you are in the United States and because these low level jobs can, you can only pay so much. Now you can actually pay what the job role requires, which means now you can make more money in the company, right and then I'll turn this around on how we actually helped our US people, because I had people in Empire that were that were making some money. The ones I hired the virtual team members like oh, Pete, you got rid of jobs. Actually, no, they got rid of themselves because I couldn't afford them anymore. They wouldn't work at the level I needed them for the company make money. But once I hired these other virtual team members in the company started making money, I was able to actually pay my US people more, I was actually able to get better benefits for my US people, right because these are contract workers in the Philippines and Mexico and you know, Costa Rica, wherever you're going to hire them from and so they're contract workers, so they work they get paid, that's great. But your team members in the US once a company starts making more money, you can treat your kids because their employees right so you can treat them better stock options or 401k, whatever it was. So for us, it was bonuses, it was higher salary and we started doing we started we started looking at it we start doing health insurance. So that's how we were able to benefit out team. So the next question is, well, what can a VA do that somebody in the US?   Michael: Yeah, that's exactly where I was gonna go with it.   Pete: What I'll tell people is the VA can do anything that the person in us can do except for two things. One, obviously, if they need to be physically at the property, right, right, they can't they can't do that and then we'll do if they need a license, if they need a license to do something, they can't do license act, right. So give you an example, though. We actually had one of our virtual team members do all of our lease renewals? Well, you say, well, P That's a licensee Act and the you know, you need to be licensed to do lease renewals and the answer is actually, you don't need to be licensed to just create the lease renewal, you need to be licensed to negotiate the lease renewal. So what we would do is 90% of our lease renewals were not negotiated, most people just sign the lease renewal, right, most of our owner clients, or our residents would just sign the lease renewal and the ones that would have questions, that would get escalated to our property manager and so what we did just that one, just that one job role, what we did is we literally took 90% of the work away from the property manager gave it to give it to the virtual team member and then a product manager took the escalations. Now, I'm a big proponent of it, the way you can save your company, so to speak, a lot of a lot of stress and noise is can you automate through policy and can you automate through, you know, computer technology, in this case, what we did in this, you have to look at it but in Houston, we know that the average rate, the average renewal rate would go up about 2% per year over time. Now, some years, it would go up more in other years, it wouldn't go up at all, it actually would go down. But over time we…   Michael: need in terms of like the rent, like how much rent, you're getting rent increase the renewal… Yeah, okay.   Pete: So we did is we just create a policy that our rent increases every 2% every year, and we put that in the lease. So there was no negotiating, right on the residence side...   Michael: It wasn't up for discussion…   Pete: Right, so but if people say, hey, I'm gonna leave unless we do XY and Z, well, that would get escalated but we were able to reduce the escalations because of the part because of the policy we were able to automate and then we on the on the owner side, we would send something 90 days out, hey, do you want to renew your release or not, right like, we didn't ask them what the amount was, we because we built the 2% and so we stopped doing CMAs. So it is a lot of grunt work that we can stop doing, which then allows your virtual team ever to actually do a lot more, we have one person for 1000, doors, doing lease renewals, and, and reviewing inspections.   Michael: one person for all 1000 doors…?   Pete: For lease renewals and inspections. Yeah…   Michael: Holy smokes.   Pete: But then I had one person that did all collections. So I'll kind of go through the whole thing, right. So like, you can have a virtual team member, their whole job literally could be making sure that your collections are being done, your notices are getting sent out and that they can if you have if you have a third party company like we did that handle the evictions, they can actually be the gatekeeper with that third with that third party company and do all that stuff. My property managers did nothing with evictions   Michael: What?   Pete: Yeah, yeah. So we again, we had policies in place, right. So if, if the resident owed less than 50%, we, we wouldn't file evictions, if they owed, you know, 50% or more, we'd file the eviction we like so we just put on a different policy. You teach the VA, what the policies are, and then they just follow the process and what's cool is they actually know the process better than you and they, hey, can I do this or this or this instead, and they tweak the process and you're like, yeah, that sounds so much better and then they own the process. So if you're like an investor listening to this, and you don't like magic companies, for whatever reason, by the way, obviously, I own a magic company, I highly recommend. But let's just say, let's just say that you don't like me had a bad experience, and you're gun shy. But what you're finding is your leases aren't being renewed, right? You're your maintenance is overtime, the phone rings you like, I don't want to deal with this. You hate when somebody moves out, because you want to deal with the turn, your books are a mess, because you don't have time to do the books because you're, you know, a high net worth individual working 70-80 hours a week as it is, then a VA could do all of that stuff for you. They can do everything, you got to train them, of course. So just step back, take two steps forward. But they can do your property accounting, they could be your QuickBooks, they could do your business accounting, they could do your maintenance coordination, they could do your turn coordination, they can do your collections or evictions. So they can do your utility turn on and turn offs, like so all that stuff that you like, oh my god, they could do your onboarding for you. So I was going to get a new property you got to enter all that stuff in the in the computer system. They can do all of that stuff for you.   Michael: If anyone's watching the video here, you see that my jaw is like on the floor. So for anyone listening I just want wanted to bring you up to speed. But okay, so peace on, let me just understand. So they could do, like they could do all of this stuff and literally anything I mean sky's the limit is and with regard to things that they can do other than the two things you mentioned the license act, and then anything that requires them to physically be there. But when it comes to accounting, I mean, one thing that I'm thinking about is, there's very sensitive information, there's banking information, there's pat, you know, credit card information, as part of the accounting process that I do personally. So am I going to need to divulge personal information and sensitive information to the VA or like, how does that work?   Pete: Yeah, so, you know, in most in most instances, like in your QuickBooks, and in any property management software, they have different levels of permissions and even in your banking, like I bank with Chase, and Chase has different levels of permissions. So I can give you all the rights to, to my, my, my VA team, right, which I did, I gave them all the rights, so they can see everything, they can reconcile the bank statements, they can, they can look at everything, they just couldn't make any payments, right, they couldn't make any transactions. So that's, that's what we did. Now, we also had two property accountants that they did probably accounts for our third party folks and so they had access to, you know, sensitive information. So what we did is we did a bet we did a thorough background screening, there's a third party company out there that can do background screening, and they came up, you know, pretty, they came out really good. So we went forward, and then we just had our cyber liability insurance policy just to make sure go again, because we're a property manager firm with over 1000 units that we manage. So we wanted to make sure that we you know, we took care of ourselves. But if you're an individual with a handful of properties, or a small property manager, then you can do all of this through the permissions that your banking and that your that your software allows you to do.   Michael: Okay and so as I'm hearing you, you talk about as a man, I'm getting really excited, I'm trying my the wheels are kind of turning on all of the things that I might be able to outsource. What are some things that you should definitely not have a VA do? I mean, have you seen some things go really sideways or go really south because someone said, oh, well, Pete said, they can only can't do these two things. So I'm gonna give my VA everything else. I mean, what should I be thinking about in terms of limitations?   Pete: Yeah, so I gotta be honest, you, Michael I, at first, I always thought like, okay, I'm just gonna give him a list of things to do. I'm going to scan it to him and we're going to just do this stuff off the list, like a checklist thing. I quickly realized he could do much more. Then I said, hey, I own the process and they own the process and they can and now I do believe that I actually had VA supervise people in the States. So I had somebody in Mexico supervising people in the United States. So I believe they can get to that that supervisory level, what I will say is, they can do everything. So I'm not saying they can't do anything. But the one thing is you need to put in place some escalation paths…   Michael: What do you mean?   Pete: So even though they own so let's say for example, they own maintenance, right? Well, they're going to be able to handle 99 out of 10 maintenance calls, no problem. But then there's that mold call that comes in, right where the resident says they have mold, well, right there, that should be a buzzword that gets escalated to the property manager because they don't like they don't have mold in other areas of the country of the world that were that worried about mold as much as much as we do in the US. So if there's like an emergency, that could that can cause you know, a resident can get sick, right, or anything like that we're property code. So each, each state has their own little different property code, right. So like, for example, in Texas, believe it or not heat, if they have no heat, that's, that's a, that's an emergency. But if they have if they don't have air non-emergency, well, we treat no AC as an emergency in our in our company we did and so there was like three or four things that those got escalated a property manager. Now the property manager, at that point would say, I'm going to take it from here, or here's what you should do. But then the property manager is kind of co-managing that ticket. So I believe that in any business that you run, whether you own a property management firm, or you're a you know, an individual landlord that manages your 10 units, there's got to be certain. I call them taps on the shoulder, there's got to be certain tabs that you realize this is a potential problem, right? So let me deal with it or I call them taps two by fours and then getting run over by a man, right? On over by a Mack truck means that you're in a lawsuit, right? The two by four means somebody moved out because you didn't handle a maintenance request in a certain way and the tap is the maintenance request is 10 days, 15 days old, whatever it is, and no one's looking at it. Right, so how can you run your business through tabs? Well, if you have these vas, the great thing is you're not doing the work anymore, right? You're not creating the lease renewal you're not you know, calling, you know roto rooter to get out to the property. You're not doing that but what you have to do is you have to take a step above, right so you have to instead of being at the ground level, you got to be 2000 feet up, right, not 15 30,000 feet up, but at least 2000 feet up and as report you have to review and so if you see a property that's vacant for over so many days, that's a tap, if you see a maintenance request that's open for so many days, or major quests that hasn't been responded to, in so many days, these are tabs. So if you can identify what the potential problems are, your job now becomes manager, right? So I'm not the doer anymore. So you're getting rid of the task or hat, you put it on your manager hat. So if you hire a VA for him to do everything, and then you don't put your manager hat on, I can tell you, you're gonna, you're gonna get in trouble. Especially if you, especially if you do terrible training, which most people do.   Michael: That was gonna be like my next question and so like, for everyone listening, what what's the expectation around training? How long is it before a VA is really up and running and so as people are thinking about, okay, forecasting, I don't need a VA today, but maybe in 369 12 months, I maybe need one. So what's the runway lead up time to get someone effective?   Pete: You're gonna hit the answer, but it depends.   Michael: That's my favorite answer.   Pete: It depends, okay, so the more like, even if I'm a smaller firm, and only got 20 properties, I'm managing, I'm doing everything, you have to teach that VA, every piece of managing that property, right, from onboarding, to, you know, to utilities, to lease ups to move into maintenance, to collections to eviction, to move out, and you have to teach them everything… Well, just because only one move out happens a month, it doesn't make anything any easier, you have to learn, they have to learn how to do that they have to understand basically, property management. So that's going to take a lot longer than say, like, with me, I had one person like all they do is collections. Well, I can teach collections in less than two weeks. Right, especially if you have processes in place. So the big thing depends. So if I wanted to hire somebody for collections, it'd be about two weeks. But if I want to hire someone to do maintenance, the more I call them, if they analysis, the more decision points there are in the job. In the process, the longer the training, right maintenance, so many things go could happen with lease renewals, it's like there's three things, like you teach them the three things, and then they know, okay, I do these three, if this happens, I do this and if this happens, property manager, right. So to my least your own person, it really was like two weeks of training. My maintenance people, it was about two months to three months of training.   Michael: Wow. Okay, so yeah, you weren't kidding. When you said it depends.   Pete: It depends, yeah.   Michael: And then I guess, like, the next question that comes to mind is, what is the turnover look like if I'm an investor, and I'm investing two months, three months into a person really getting them up to speed, and then doesn't work out or they don't like it or they move on, like, what have you seen in terms of turnover?   Pete: That's a great question as well. So what I saw at Empire, I had 23, virtual team members, 23 different roles that that my virtual team members handled, and I had them for about five years, you know, most of the jobs some jobs were newer, but I had people there for five years and in those five years, I had to get rid of I let go of two and one person left. So I had three people, my churn rate was much lower on the VA side of things than they were on the US side of things…   Michael: I was gonna ask… in the US:::   Pete: Now, I'll tell you why my churn rate was low, though, okay, because I treated these people like team members, not like virtual assistants, right? So the old mentality of a virtual assistant is, I'm just going to throw you here's the work, you go do the work, I'm going to make sure it's done and like, that's it right. My guys that we have day out there on our website, they had videos, they were they were part of all of our company meetings, they had, they had ownership of each of their job roles so that they can, they can modify and do things they had, they had more control over certain things. We went down, I went down there to go visit them, because most of my people were one city in Mexico, so I paid them PTO like I gave them like if they even though there were contractors, if they needed a day off Mike just put the time in, that's okay, I'm gonna give you a day. So we the more you treat people like we can we put them on a bonus structure. So if their key performance indicator was met, they got a pat on the back, but if they exceeded it, they got they got 50 bucks, or something small, but $50 to somebody in California that Michael they're going to take the $50 thing it's critical and throw in your face like this isn't even a gallon of gas. You know, and but in you know, Mexico you give somebody 50 bucks that's like a half a day's work, like so again, you so you can make people happier with a lot less with a lot less money, right? because sometimes it's like, oh, it's not the thought. It's like, wow, man, you only gave me $20 like that's like almost like an insult you know, in the US where it's not a over there. So if you treat the people, right, so what does that mean? It's not just like paying them and treating them, right, make it part of the team, but also manage them correctly. A lot of people think like, I'm just gonna hire this VA, but they have, like, they hire the VA and then you're, you're not ready for the VA, like, you hire them because you like you got excited, you heard this podcast, I'm gonna hire VA, right and then it's like, okay, you don't have a good job description, you're not really sure what they should do, you don't know how to manage if they're doing a good job or not and so you hire somebody, and they don't really know what to do, and then you don't know what to do and then it doesn't work out, right. So I recommend anybody do is make sure like you, you create a job description first. So you can go about it two ways:   One is I want them to take this, this process from end to end or two is like I want to be an executive assistant and I want to do the things that I hate doing. So identify the low level low enjoyment tasks that you don't like, create a job description from that, post it out there, say this is what I'm looking for or say, man, I really want to give somebody collections evictions, you know, like that process? So it depends if you're if you're smaller than you may say, hey, I want them to be a property manager and give me all the things I have to do just understand it's a lot more training. So once you have the once you have the job description, so that you know what they should do they know what they should do. The next thing is what are the key indicators that you know they're doing a good job and the rule of thumb is 123 key indicators they call key performance indicators and every job role in the organization should have at least one if somebody has 14, that's way too many, I know because I live this I had my property manager API's and it's not it was way, way too much. So like, for example, your executive assistant. If that's where they are, you know, maybe they have to answer calls, well, maybe a KPI is answering 94% plus call rate, right or response to any email is in less than one day. Now, you the KPIs, you can pull them out of a hat, but they have you have to have a report that can show that, that they can put the KPI and so they have to get the data, the data has to be available, right? So if I say hey, I want a 90% call rate, but my call, my call software doesn't have call answer rate, I'm not gonna be able to get that number. Does that make sense?   Michael: It makes total sense.   Pete: And so you have to be able to report on it. So just because you want a KPI, but there's no way to report on it, then you have to figure out a way to report it and get that KPI. If not, you have to move to a different KPI. So if I have the job description set up, they know what to do that we have the key indicators, so they know what the scorecard is if they're doing a good job or not, and so to you, because so many of you will say, yeah, I feel like that he's not doing a good job. What the hell is that me show you?   Michael: How do you know?   Pete: Especially if they're, you know, 20,000 miles away for you in the Philippines? Like, yeah, like, so how do you know the key indicators and then if you have good training, and you spend the time with them, and then you should once you have the train, So training is like every day, right? You do every day for two weeks, maybe three weeks, you have training every day, hour a day video so they can rewatch it and they can build, they build the process manual, not us. So they build a process manual. Why is that important because if I had 100 page process manual for maintenance, I did Michael I swear at Empire had 110 page process manual…   Michael: We talk in single space, or double space?   Pete: Single space, I think. Like legit, it was legit. Nobody read it. Nobody knew how to navigate it and nobody learned once I had them build their own manuals, guess what happened, they started retaining stuff and they knew how to navigate their manual. So don't be don't be upset if they like let them create their own manual so they can navigate it. So now you know what they what you want them to do. They know what they know what they're supposed to do. You can you can you can scorecard it with the metrics, you train them, and now you manage them and the way you do that is you have a weekly meeting. Now if you're smaller, you're going to have you're going to meet with them every day, right my IV pm or smaller firm was five of us, I mean, when my VAs every day, because we're just we're so small, we have to talk about what to talk every day when I was at Empire because I have 40 people working for me. I met them once a week and I would meet my maintenance team, separate from my accounting team separate from my resident services teams and for my own services team. But I would go over with them each week and we'd go over, we'd say what's a feel good? Tell me something that's good, right because as humans, we have this habit of going below the line instead of like above the line. So let's start off the meeting really good. Let's go over to metrics, right individual and then the group metrics, the department metrics, then let's go over tasks from last week did they get done? Then let's go over challenges and each one of those a five minutes and challenges like 20 minutes, 25 minutes. You don't you can't solve all them all the time. But you can solve you know, a couple of them and if you could solve a couple of challenges each week, you're doing really, really good and then and then one thing I added was what's your stress level from zero to 10. This was interesting because sometimes they'd be at a 10 and it was because somebody was on vacation or we just got 50 new houses that week, it's worth, you know, 10 yeah, okay. But when it's 10 all the time, and that's the standard, that means you haven't to do too much and if somebody's attend all the time, it means they're ready to punch out. Like anybody in your team, you should literally take the pulse of your team on a weekly or monthly basis, right and but here's sometimes the 10 was because they had something going on personally and then I'd get everybody off the off the phone, and then I would talk to them personally and that gives you an incredible opportunity to create relationships with people who you never met, that working with you that are, you know, 5-10 1000 miles away and that is why they didn't leave me because they knew I cared, right, it wasn't a bonus. It was it was I cared, I want them to grow the company, I want them to, you know, to, to feel like they're wanted, but I also cared about their personal lives, I really did and so if somebody had an issue, you know, Hey, man, you know, we talk about so you get to learn a lot about people when you do that. But I did that each week and if a KPI was read two weeks in a row, and went to the issues list, you know, things and so you, if you have a structure with your business, you're the person you hire, the chances at whether that's in the US, like sitting next to you in the US, that's, you know, a few states away, that's working virtually, or a virtual team member outside the borders of the US. If you have structure, the chances of you hiring somebody successfully becomes great becomes very, you know, most cause much greater. But if you don't have that structure, the chances of hiring anybody is not going to be it's not going to be very, very, very good. It's going to be much lower rate of success.   Michael: Yeah. That makes a ton of sense. Pete, have you ever had a VA hire and train another like another VA?   Pete: Oh, yeah, of course. That's the whole job, right? The whole goal, right? So monkey see monkey do, right? So when I forget Empire, the first round of vas, you're looking at the trainer. I was the guy I trained there. Okay but my maintenance team, once somebody would leave, and somebody would get hired, or they would hire a new person, I was out at a training business.   Michael: I love it.   Pete: They train them. So once you train that first batch, and by the way, here, Michael, here's the secret to at Empire, I was gonna hire two virtual team members. That was that's what was in the budget. I interviewed four people hired all four of them and here's the reason why one figure one person is going to wash out right? Can you figure that and then the second thing is, it's, I was hiring two to three people for one person United States.   Michael: Okay.   Pete: All right. So think about that hourly rate, I would get rid of one person us and I'd hire three people in Mexico and so do you think more stuff gets done with three people?   Michael: I would than one probably guessed.   Pete: So. Yeah. So then I'm like, okay, I'm gonna hire four people. So I was over budget, guess what happened within 30 days, I'm able to grow my business because more tasks are being done and so all of a sudden, it's like, yeah, and if one but I hired four, none of them washed out, I was one of them wasn't a good fit, they were a good fit for the organization, not a good fit for the role. So we moved on to a different role. So another important thing is when you hire and this is probably I mean, your team, your, your listeners probably know this. But every business has core values, that can be a sheet on the wall that you never look at, and they're not going to be any, they're not going to be worth anything for you. But you should have core values that you hire, fire, promote and demote on, and give raises to like, that's your core value. So who are the people you want on the bus with you, right and if you are, if you are an individual landlord, that you know has a bunch of house and you're looking to hire that first person. Well, that's a business, right Michael, would you teach that like, as soon as you're hired, as soon as you buy that first house, you are business…   Michael: Yeah, you are business…   Pete: You are business. So you need to have core values and if you don't, as a business, you should have them as an individual. So who are the people I called the fog. So who do people want to foxhole with you? That gets you the right person in the organization. But that doesn't mean they're the right person in the right seat, right because the right see, for example, like, if somebody's super outgoing, you want them in sales, if they're super outgoing, but not detail. You don't want them in accounting, right? I might have the right person. But if I put that outgoing person, and that's shipping and sales and accounting, he's going to do a terrible job. So I found the people through my core values, I then put them through a personality profile test. I like disk. It's super simple. I don't know what you would use. Do you have one that you use?   Michael: No, not personally, but I'm definitely going to be adopting one as I'm gonna get for virtual assistant, yeah…   Pete: There's, there's a lot of them out there. Disk is super easy. I know it very well. It's easy to learn. So I use disk. So that tells me I get the right person in the organization. I put them in the right seat and through my job description and my key performance indicators. I know they're going in the right direction. So if you do all of that, and then you do the training and then you do the managing the chances of you having somebody washed out or somebody leave, it goes down dramatically. It's not 100%. It's never 100.   Michel: Like anything… Yeah, that makes a ton of sense to me, Pete this has been, this has been super eye opening, really exciting, exciting stuff for people that want to learn more want to take advantage of the cam solutions, like how do they get in touch with you? Where should they be going?   Pete: Yeah, so you can go to https://www.vpmsolutions.com/ , and create a free profile. So that's the other thing, Michael, everything on the company side is free. So creating a profile posting a job, searching for people, finding them is all free. When you thought when you hire somebody, they we charge the virtual team member a percentage, and that's how we make our money. So, it's free to the company. So all you're paying is the hourly rate, and a small processing fee that we pass on from the stripes of the world onto the onto the dude the company, but that's what it should go and if you want to email me directly, it's pete@vpmolutions.com and we have over 14,000 virtual team members in 60 countries on our on our site right now looking for work and we have property management video training that your listeners can actually take for free as well. So we have like, I think we have like 12 courses, it's over about nine hours of content it goes from, it's basically the lifecycle of property management. So if you are a, you know, a self-manager, and you want to learn more about how I can manage my property a little bit more efficiently, I highly recommend taking those courses and then when you post the job, you can actually ask your VA, these are the recommended courses that we recommend that you take and then people would actually take those courses on their time and they're done. So you're getting a little bit of people trained before you actually are paying them.   Michael: That's really slick and it probably helps weed out a little bit more of who's serious versus who's not is who's gonna put in the time in advance.   Pete: Absolutely, 100%...   Michael: Oh, man, I love it. Pete This has been so great. Thank you for coming on with us a second time. Definitely, we'll be in touch man.   Pete: Yeah, Michael, thank you so much for having me. Really appreciate it.   Michael: You got it, take care. All right, everyone. That was our episode a big thank you to Pete for coming on. Super exciting. If you couldn't tell it was pretty giddy throughout the episode. It's something that I'm going to be very much looking into for my personal business. As always, if you enjoyed the episode, we love hearing from you reviews, comments, feedback questions are always welcome in the comment section, and we look forward to seeing on the next one. Happy investing…

Pete Neubig is a realtor who focuses on investment properties. Pete has been investing in real estate since 2001. He has owned and managed a 39, 52, and 100-unit apartment complex. He currently owns single-family homes and a 52-unit apartment complex. Pete created a property management company based on the motto "By investors for investors". His property management company has clients from Houston and all over the world. His technology-based systems allow owners to see everything that is happening at their property without having to be involved. Tune in for today's episode where Pete talks us through some of the mistakes that he made as an investor and how he's doing things differently today. Episode Link: https://www.vpmsolutions.com/ --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: What's going on everyone? Welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today with me, I have Pete Neubig who is a real estate investor and CEO of VPM solutions and Pete is going to be talking to us today about some of the mistakes that he made as an investor and how he's doing things a little bit differently today than maybe your typical investor. So let's get into it.   Pete, what's going on, man? Thanks so much for hanging out with me today. Appreciate you coming on.   Pete: Michael, thanks so much for having me, I'm really looking forward to it.   Michael: No, me too and so before we hit record here, you were telling us about the three different lives that you've lived. So you are a super interesting guy. Needless to say. So for anyone who hasn't heard of Pete Neubig before, give them the quick and dirty rundown of who you are, where you come from, and what you're doing in real estate today.   Pete: Sure. Well, real quick. Let's see, I'm from New York City originally, I moved to Texas in Houston back in 1995. So I have a gun. So I guess I'm a Texan now.   Michael: Give me one when you move to the state, like I think…   Pete: They give you a cowboy hat, a gun in some boots, you know. So I started buying real estate in 2001 when I bought my first property, actually, I bought a duplex and a single and a a 100 unit apartment complex like same day, like I closed on the same day, I ended up owning bunch of property that I ended up starting a property management firm and I got so busy doing that, that I stopped buying real estate for a while just to build the investment, the property management business, I ended up selling the property management business and now I started a an online platform. It's a virtual property management solutions or VPM solutions where we connect the real estate industry with virtual talent around the globe, so…   Michael: That's so cool. Pete just taking a total step back to say you're from New York now living in Texas, do you remember like I don't know in the late 90s, early 2000s there was that pace salsa commercial where like all the cowboys were sitting around like, where's that guy from New York City, New York City? When you say that, that's like the first thing that I thought of like, oh, hey, salsa commercial.   Pete: And I still can't say y'all correctly I get I get I get yelled at all the time and I'm down here saying y'all, so…   Michael: Y'all with the New York accent, I love it, I love it. Well, you did you I mean, this is a really cool trajectory that that you've ended up on and I would love to focus on kind of the first stage of your investing career where you own a bunch of rentals and again, we were chatting before we hit the record button, and you were saying that you had sold a bunch of them off, and then actually paid off some of the remaining ones. So walk us through, you know, like, why because I think I think a lot of people would be like, oh, that's stupid, like, what is Pete doing? You gotta have leverage. That's how you juicy return. So, you know, walk us through how you built up the portfolio and then why you decided to sell them but then keep some free and clear.   Pete: Sure thing. So I started buying on my own first right so I own like 12 I think it was like duplexes. I was for some reason I was love duplexes. I think most people would say, well, it's the cash flow, right? Duplexes, have a great cash flow and I was always looking at just cash flow and I think if I go back in my, in my investor life, I can tell you, Michael, I've lost so many millions of dollars by not buying houses with very low cash flow, because I forgot about this thing called appreciation, right? I wasn't buying cash flow, right and my goal at the time, I was a young man, I was early 30s, like 30-31 when I started buying, my goal was to get enough cash flow so I can just leave my corporate job. That's kind of what the way I was thinking. So I buy a bunch of properties and then I get I get talked into being a passive investor for 100 unit apartment complex and I told if I buy one apartment complex, I can retire right? So I'm like, oh, great, you know, monopoly, I'll buy a bunch of houses, sell them and all that good stuff. Well, it just never materialized. I was buying lower income homes and if anybody knows the lower income homes a cash flow is really just on the sheet of paper. It's not it's not true returns unfortunately, because there's little things like you know, the evictions or you know, not getting all the rent and in the make readies are not a couple 100 bucks or a couple of $1,000 because people in low income they take what's called parting gifts. You know, they take your AC, your doors…   Michael: Your goodie bags, you know…   Pete: Yeah, good. Yeah, exactly. Exactly. So, so I ended up connecting with a business partner named Steve Rosenberg, who he's kind of a a national speaker now but Steve and I ended up finding his guy who is offloading a lot of his portfolio. So we thought this is great and we ended up buying like 30 houses and we were both enamored with buying property. But we didn't had no idea what to do once we bought them. Like we were terrible and how to manage them. So what happened was…   Michael: Pete was this was this local in New York or local in Texas, there was this remote?   Pete: Yeah, great question. So I was, I was, I had lived in Texas at the time, we're buying everything in Houston. I there was no such thing as Roofstock that we knew have to go buy stuff in other areas and back in the early 2000s, the average price of a single family home in Houston was like around 130. I was buying it for 35,000. Like, lower low income houses. Yeah.   Michael: But not have roofs, like, what's the deal?   Pete: Man, they were just in low income and today, those houses are now worth about 150, right, 20 years later, and I was buying them at 35 and they were worth 50 to 55,000. So I was buying them below. But I just found an investor who wanted to offload stuff but he was offloading me all his problems, right and if you don't have good management, behind you, if you have a good management company, by the way, it's really difficult to manage these low income stuff. It just is because they don't pay online, they don't abide by the lease, they have dogs, when they say they're not going to have dogs, all that all this stuff that you have to deal with. It's just difficult and so Steve and I, we ended up buying 31 homes. So now I have 31 homes, and we advertise bad credit, okay, no credit, okay, like you have you have a pulse and $1 will, we're gonna let you in the house and of course, that comes back to bite you to the point where not only are we not making the cash flow that was projected, but we're losing money at the end of the year, now I have to come in and pay for my taxes and my insurance and so now I'm working even harder at my nine to five than I did and I'm working hard to manage these properties.   But all of a sudden, this this like, dream that you have is becoming a nightmare and so, you know, caution, number of cautionary tale number one for your listeners is buy absorb, right, and then buy some more like don't just keep buying if you can't manage the assets, or number two is go find a professional management company that will take your properties. My problem was I had my problems was so low, I couldn't get a professional management company to take my properties. The manager companies know how hard they are and I'm like, Well, I'm gonna give you 25 They're like, Yeah, great. Keep it like, we want to charge you more. So I ended up creating the management company with Steve so we can manage our own properties and so there's been two there's two things, the two big instances that happen in my investing life that has propelled me to pay off properties, right. So let's get to your question. The first thing was I bought all those properties, and I wasn't making cashflow, right, but I had to pay the note every month, right and at the end of the year, now I'm getting in tax and insurance. And so there was no cashflow there and there's no appreciation I just told you it took him 25 years to get that double or triple of appreciation. So I own these properties for 10-12 years for 35,000 and they were worth like 45,000 right 50,000 I told you I got equity, but that nothing ever increased. So when that when the banks are coming and asking for their money, and I gotta go work a double because I need more money, or I gotta go sell off stock because I got to. So that that was something that kind of made me realize maybe I want to be the bank myself, or maybe I don't want to owe the bank so much money. So that was the first thing. The second thing was, I ended up buying that 100 unit apartment complex that I told you about and that 100 unit apartment complex. I am still today friends with the lead investor, he's a good guy, we just had a bad plan. We lost the apartment complex. Now I was a passive investor and now here's cautionary tale number two for your investor listeners. If you're going to be a passive investor, make sure that you either A have an attorney you trust or be read the documents yourself. So I was a passive investor, but I was legally on the hook for with my credit. So I personally signed the note. Yeah, I see you I see you if you for those of you not look, for those of you listening and not watching the video, Michael's jaw just dropped, right and so and then what happened was because the plan was bad, we couldn't we couldn't make a payment and so the bank led us to believe that we can restructure our debt. Well, they ended up having somebody that would buy the debt would buy the property from under us. So they foreclosed on us and sold the property for more than what we owed, which in normal cases, you think that's fine. I owed 1.1 million they sold for 1.5 million. I should be off the hook. Well, there was a little checkbox that said no, if they foreclose on me regardless how much they sell, they can sue me for that amount. So I got personally sued for one point $2 million.   Oh my god all because now I will tell you this, I paid a mentor and I paid an attorney. Before I got into that deal thinking I covered myself, I got a guy who's done a bunch of apartment complexes, I have an attorney, they just missed that. They just missed it, the mentor wanted to deal to get done because he was the broker on a deal. So it really was it wasn't aligned. You know, are you know, of course, at the time, I was like, get the deal done. But he needed to protect me from myself at that time and so when you owe, so long story short, I ended up selling. I had a six unit apartment complex that I sold, made 30 grand, and I actually was able to, to pay $30,000 to make the lawsuit go away. So the bank knew that what they were coming after me, they knew that they didn't really have a good case because they made their money. So they just wanted their attorney fees paid for but that put the fear of God in me to be quite honest and so I vowed that I don't want to ever be over leveraged, right and so of course, Kiyosaki talks about other people's money and every you know, rich, Guru, Rich Dad, Poor Dad, guy, every guru out there will tell you, if you can borrow 110% borrow 110%. Well, back in the early 2000s, you were able to borrow 110% I don't know if you remember and so I did that, right now. I was fortunate that I was able to overcome when the properties weren't making any money because I had a job. But if you are again, a cautionary tale number three, if you are a full time real estate investor, you cannot survive when you when your cashflow negative, it's very, very difficult, and you have to sell off assets. But if the assets are worth less than what you owe, that's a challenge. So when I got into property management, I realized pretty quickly that people will manage Class B homeless people will buy and rent Class B homes, I always had this mindset that people will only manage or rent Class C or D homes. I'm like, no one's gonna pay $800 in rent or $1,200 in rent, and go buy a property, a nice property and have $1,200 on my mortgage, right? Like it was a mindset thing and so another tale is if you're an investor, don't you don't try to buy anything that you would live in you. Other people will live in stuff that you like, why would they rent stuff when I when you can buy something? So when I found that aha moment, I pivoted and I hired a property manager. Finally I was trying to property manage and I was terrible at it. Like, I'm like, I had to hire a property manager. First day she comes in, she goes, okay, we're gonna fire half your clients, this tree store, we had 67 doors, 30 of them were mine. She's like, we're gonna fire half your clients, because those houses are in are in a low income area. They're not worth managing. We're gonna pivot, we're gonna get these Class B homes. Oh, and by the way, you need to sell off your homes. We're not managing your homes either. So you know what I said, You know what, I've been trying to make this work for so many years and are every year I'm coming at the end of the year, I gotta pay money. Now I quit my job to start my property management firm, which by the way, I was making $105,000 a year now making $12,000 a year am I okay? These properties, they can't be an albatross around my neck. So I sold a bunch of homes. So I had, I think 31 of them and 25 are in kind of the lower income area and I couldn't get rid of some of them. So I owner financed them and that was when I had an aha moment. So I was able to wrap the note, I had a very good, I had a local bank and I had a very good relationship with a local bank, and they allow me to wrap the note, right. So basically what that means is I've sold the property to you Michael, right. But I still own the property, you pay me 10% 20% down, you're gonna pay me a mortgage, and then I'm gonna pay the bank, the mortgage, and I get the spread. Yeah, the first time ever that those properties made me money.   Michael: Wow, okay. Were you able to sell them for much more than you paid for him? I know, you said there wasn't much appreciation.   Pete: No appreciation. But remember, I did have equity. So I sold them for like 50,050 to 55,000. I bought it for 35,000. So I was able to make money that way but if you think about it, I lost so much by owning and by doing the rehabs that I kind of broke even. Okay, it's great. Like, I'm able to be on podcast now. Tell that story, I guess. You know, it's the school of hard knocks, right? That's it. So college is way more expensive than that, by the way that just took me a lot of time. I ended up breaking even and making a little bit of money on it. But what happened was so when I when I started my property management firm, I don't know if you've ever started a business from scratch, Michael, but it is not easy, right? I didn't I didn't build it. I didn't buy somebody else's business, right. I built it from scratch and, you know, it's at 90 hour weeks. It's every day, you know, and so I got away from the investing thing. So I sold off my assets at a 52 unit that I sold office well took a bath in there, investors lost money.   So I don't like multifamily. I can just tell you that much. I know you do. I've listened to some of your stuff. But we could debate that on another pod. A lot of fun things off. So when I, when my property management firm seven years later started becoming like I was working now five hours a week, 10 hours a week, I started getting back into buying investment properties. So I was able to find and a bought a couple of properties for about $120,000. It's called Baytown. So it's a little bit it's like a Class B, B minus area, blue collar, I like it gray area of town in Houston to buy in, because there's a lot of renter's there, but I started buying them and I started buying cash. So of course, you have to have the cash, right. So I had some cash I was able to buy in cash and so all my other properties that I did keep, I kept paying those down, and I have those in cash. So today, instead of 31 non producing properties, I have eight properties, one of them is paid for, and I own the note. So I sold it, I did an owner financing sell and I make more money on that property now than I ever did when I rented it out. I have three others that are paid for three or four, four others that are paid for and then I have four others that have a note on them. With the four that I bought the last four, I bought a boat with a note, it was one of those commercial loans. Package note, I had to put 30% down I did, I bought them in January of 2020. So right before the pandemic, there I bought it for 535 from a California investor he was done. We I gotta because I own the management company. So before I went on the market, I made him an offer and so I got him for 535 they appraised at 640 and I put 30% down and they kept they cashflow beautifully and I have I have a small note and now if I want them to sell one of the houses, I can take it out of notes, sell it pay the note down. So now I own eight or nine properties total and they're worth you know, close to, I want to say like one like one, let's call it 1.2 million, I only want 300,000 or 350 on the whole thing, right and my cashflow is about 12,000 a month, uh, me a little bit less, a little bit less, a little bit less, maybe like 10, five around there and so, so I'm a big fan of owning the property outright. So I have both houses that aren't paid for right, so. So it's just hear me out on this, I am now in my 50s. So in my 30s I was a big fan of taking out mortgages, as much as you can bind as much as you can, because you got this thing called time on your side, you can make mistakes, right? At 50 you have less time, right? I've 20 years less, so I can't really make the same mistakes. So I believe even though I make less cash on cash, right? Less overall, I have this thing where I can sleep better at night, right? The house is paid for like, for example, I own  a house, I just had to put in a brand new AC and heater, right cost me like I think like six grand. That's cash flow for a year in most in most instances, right and you can't afford it because you don't have the money. Well, when the house is rented for 2500 a month. That's only two to three months. It's not terrible. It doesn't it doesn't knock you out of the game. You're not always stressed for cash. In my in my in my bank account for my business, my housing business. I got like 30 to 35 to $45,000 sitting there all the time, right. So if anything ever happens, I'm okay and so that in now because they're paid for I have more cash flow. I don't have to pay all the notes all the time. So, so again, as you get older, you're like, okay, well, how can I have like, How can I afford to live day to day? Well, if I have $12,000  a month coming in, and I only have $22,000 going out for principal and interest. Well, now I'm at 10 grand and now you figure another 3000 a month in taxes and insurance. So now I'm at seven grand. Well, that's, you know, that's almost 80,000 a year in Texas. It's not terrible and of course if maintenance happens, which always does you never get that full 70% right you never get that full deal. So because of my past issues with banks, by the way the bank on the 100 unit apartment complex really, they really screwed us they let us believe one thing and kind of did the end around and so because of that, I'm really you know, just I was scared is not the right word, but very unjust and very hesitant, hesitant to do it now. That doesn't mean that I won't take on a note, especially if I can't afford to buy something in cash, but I'm gonna He's going to put 2030 40% down, whatever, whatever the bank wants, and then a little bit more and then I'm like, I'm at the back into my life, right? So I am looking to, to pay these things off. So I have 20, year amortizations. If I could, if I could pay them off in 15 years. Okay, I'm 60-65 and now I have no notes, and I have all these houses paid for and at the end of the day, you want to live on cash flow, right? You don't want to live on like hoping that your properties increase in value, and then you can take the money out. If they're if they're paid for in 10 years, I can go take you know, 80-70, 80% of the value of the house, which are increasing now. tax free. So I have so I do have ability to, to go take the money out. Should I should I choose to do that?   Michael: Yeah, man, this is wild, man. This is this is such a cool story and of course, I'm so sorry to hear that you had to deal with all that nonsense, Bs. But it sounds like it helped lead you to the decision and kind of path where you are today. So would you say that you're thankful for those experiences as crummy as they were?   Pete: Yeah, look, whatever doesn't kill you makes you stronger and I am truly I think I'm a better business partner today than I then I was back then I'm a better investor today for sure and so overall, I feel like I'm, I'm better, I'm a better as a person, because you won't like, like I said, if it doesn't kill you, the one thing that you as an investor, as a real estate investor, you have to make sure that you don't make the mistake that could put you out of business, right. So in my when I had the 100 unit apartment complex, I use my 401k. No my IRA money, so I went and did a self-directed IRA and that's how I invested my money, lost it all, by the way, okay. Again, at 31, I lost 120 grand, which is a lot of money for me back then. A lot of money for anybody right now. Okay but it didn't put me out of business.   Once I once I was able to clear my name with the bank, my credit was cleared, everything was clear. Like it was never it's not on my it's not on my credit history at all, because they know that they messed up and I was part of our deal. So that allowed me to get back in the game and by I had another pair of business partners, that they ended up taking bad advice, they ended up using credit cards, taking money out of their credit cards, cash advances, to put money down to buy this apartment complex, because some guru told them that he did it, just because he did it and it's possible doesn't mean it's the right thing to do. Well, they had declared bankruptcy. So they were they were out of the game. They you have a bankruptcy, you're not going to be buying investment properties. Why don't you know, you're not going to buy your personal home, let alone investment properties. So as a real estate investor, for the for if you're listening to this, you know, it's great to take on some risk. I mean, obviously, we all take on some risk, right? We know there's no guarantee price is gonna go up. There's no guarantee that people are going to pay their rent. There's no guarantee but don't take on a risk that will put you out of business.   Michael: Yeah, I love that and I think that makes a ton of sense. Pete, you said something kind of at the beginning of your story that I want to come back to and that's you were buying these low income properties, and you bought them and you scrimped and you saved and you and you put these deals together, and they really hadn't appreciated very much and you sold them because your property manager, right, yeah, that after that, they appreciate it. So like, talk to us about how people should be thinking about if they're in a similar situation, they bought a property. They did all this work to get the deal done. they scrimped and they save and they just haven't seen very much appreciation. Maybe they're in a similar situation where it's not cash flowing, or it's just covering its expenses. It's just not what they thought it was going to be. When should someone cut their losses and run and maybe go try something else or how do they know maybe they should keep hanging on because we're right around the corner from that appreciation jump?   Pete: Yeah, that that is if I had a crystal ball, I could I could answer that. I can just, I can just tell you from my perspective, I did everything I could to make those properties work. I mean, I would put it you know, like when we did a rehab, we made the house even nicer than it was right? We got rents up, but for whatever reason, and we just can never get them to cash when we were losing money. After about five years, I think you got to if you do not have the cash flow, where you can lose money every year on your properties, and it hurts you. You know, I think you got to cut the cord after a couple of years of trying everything. You have to try everything though. I'll tell you my grandfather before he passed away, he was in his 80s and he when he passed away, he was worth I think 30 million. So this is a guy who knows a thing or two. But he told me one of the last conversation I had with him he said, Pete, never sell your property. When grandpa died here. We had a lot of property it was he was a mess. The guy didn't put any money into it. Son of a gun when we had to deal with it, but it was luckily all those properties appraise or appraised value over time, time heals all wounds if you can afford it and knowing like, hey, like, I can tell you this when I bought the properties in my early 30s, I needed the cash flow as a means to I try to exit out of the of my, you know, my w two life, right?   Luckily, my w two allow me to handle those properties, right, allow me to handle the losses. When I got into starting my own business, I knew the upside of starting my own business was great but starting my own business meant I had to take a huge step back in how much money that I can afford, that I was going to be able to extract out at a business. I wasn't venture backed, none of that stuff, right. I mean, I literally just hung a shingle and I started working. Well, I couldn't afford to lose the money on those properties anymore. So that was, that was a big reason on why I decided to sell. Now I will tell you, I sold all those properties in 2015. I bought them in like 2008 2005 I bought most of them and I saw them 10 years later. So it wasn't for lack of trying Michael like I tried right? Even after 2015 they didn't jump up until recently, like this pandemic has me all jacked up, I have no idea what's up what's down, like, I thought the price would come down. So I sold my last property in that area of town for 120. I bought that piece of property for 50 in 20 in 2005, so here we are. So it kind of matches up right 2005. Here we are 15 years later and that thing actually, you know, more than doubled. Now that property I owner financed, I sold it at 120. It was probably worth 100. Alright, so probably doubled in value over those 15 years. I always pay, I always sell it for a little bit higher because I'm holding a note. I want to build in that appreciation. You want to go through the numbers on it real quick?   Michael: Yeah, let's do it again. All right.   Pete: So when I when I own the home, and I rented it out, I was renting for 1000 bucks a month.   Michael: Okay, you bought it for 50 renting for 1000. So crushing the 2% rule. Everyone on paper is like, oh, you're killing it.   Pete: Right? Exactly. On paper, right. So 1000 bucks a month. So now you like Pete, you're making $1,000 a month. But am I Michael? I'm not making $1,000 a month, right? What do we have? We have taxes 300 bucks a month now making 700 a month? What do we have? We have insurance 120 a month. Okay, so now I'm down to 580. My management fee was 80 bucks, I'm down to 500 bucks a month and that's before you get into maintenance and turn, right. So on my best month I make 500 bucks a month.   Michael: Oh no.   Pete: You wanna go through the numbers?   Michael: Yeah, let's do it, man.   Pete: Or go through the numbers. Okay, so I'm renting that property for $1,000 a month, right? I bought it for 50 rent it for $1,000 a month, right? So am I making $1,000? a month? No way? No, right because the taxes were 300 a month. So now I'm making 700. Right, my insurance is 120 a month. So now making 580 and my manager fees are 80 bucks a month. So I'm making 500 bucks a month and asked me for any kind of maintenance happens or turn. So the best I can do is 500 a month, right? So now I sold the property I sold for 120 got 10% down. So the notes 113. I sold on a 20 year amortization 7%, I found a company that will actually serve as the note for 30 bucks a month that I pushed on to the buyer. So right now it's cost me nothing. The principal and interest on that house is 7-78 and it's like I think it's like $67 is principal and $7 is interest and that's what I make on that house every month, right? If taxes go up, does it affect does it affect me and my cash flow? No insurance goes up doesn't affect my cash flow. Refrigerator breaks doesn't affect my cash flow   Michael: Vacancy could be vacant doesn't affect your cash flow.   Pete: Doesn't affect my cash flow. Now I ended up selling this one to an owner occupied. So I didn't sell to an investor on this one. So the owner occupied and he pays and all I gotta worry about is if he doesn't make his payment, I can foreclose on him. I don't know what the laws are in California in Texas, it's about 21 days. Before we before we can start the process and start the process.   Michael: Okay, okay. Okay.   Pete: So 21 back in the day used to be 21 days, you get them out now it's like…   Michael: That's what I was going to ask. Yeah. Okay. So just real quick on owner financing, because I think this is something that a lot of our listeners who own property should hopefully their ears are perking up. How do you underwrite a buyer, someone who's going to be, you know, seller financing from you as the lender as the owner.   Pete: So, I don't really care about credit at that point because if they had good credit, they're not coming they're not buying.   Michael: They go then to a bank…   Pete: Right, exactly. So what I'm looking for and what I'm always looking for is why is it credit bad, right? So are they not paying their rent or are they not paying the you know, the electric bill or whatever, whatever, you know, car or bill or whatever it is, right? So I want to know what kind of why they're why they have such bad debt. I don't care why they have such bad credit, I don't care that bad credit and then I'm looking at cash, how much money they make. So what happens is a lot of these guys, so guy that that bought my property, he's in like the construction business, right? So he has his own little deal, he can't show he shows no income, but he showed me his bank statements and he showed me his deposits for the last couple of years and so I just look at how much cash do you have, can you afford it right and then, as a property manager, I always go to two and a half to three times. So if I can get two and a half to three times of cash for what it's going to cost them all in, then I feel I feel at that point, it's not that big a deal. Also, he's paid me 10% down. So I have some cash there. So if he did move out, or couldn't afford any more, I got a little bit of cash, I could make the place a little bit nicer. Okay but the mentality of somebody who buys your property, even if it's owner finance verse, somebody who rents your property, let me just tell you what happens, right? When somebody used to rent that property, what they used to do there give me a long list of stuff that didn't work in the house, that they wanted me to fix it, right, even though the lease says, as is all that good stuff, right? When somebody buys a house, they're getting a long list, and they're improving the house. When somebody rents your house, they're paying the car to pay the electric, they're paying their damn Hulu bill before they pay you because they know that they can they know the eviction process all the way through and how long it take them right? When they own the house were they paying first and for paying…   Michael: The mortgage first. Every time they pay the mortgage, first…   Pete: Hulu gets put on the back burner, the car payment gets put on the back burner. So the mentality is completely different. I've only I've only you know, I think he's been over there a little over a year, never had one issue with payment. Knock on wood.   Michael: That's great and is the term is the note do you get it full term to 20 years or is it a couple of shorter year term with a 20 year AM?   Pete: I will have to double check but I'm pretty sure it's just a 20 year amortization and he just pays me to 20 years and then that's it. So what a lot of people say to me is well, Pete, you're missing out on the appreciation, right? Like, if you sold the house or 100, or the house is worth 120,000 or 200, right? So if you think about this, Michael, most people don't pay extra. Most people don't pay the house off early or if they do right grade, they pay the house off early. They make my money. But he's paying $60 In principal and $680 in interest, right? If you if you pay that house off in 20 years, he's gonna pay that he's gonna pay about 240,000 hours on that house. I think I got my appreciation.   Michael: Just fine. Yeah. Oh, man. I love it, I love it. That is so cool Pete. That is such a great story.   Pete: I built into cushion of 20,000 so that he can't refinance right away. Right, because the house is only worth 100. So by no one's gonna give him $110,000 or whatever it takes to refinance the house. So by increasing it a little bit, you save yourself at least those first you know, five years or so.   Michael: Super, super smart. Super smart.   Pete: Yeah, that's a good one.   Michael: That's a that's a really that's really good, man. Pete, we could chat for hours, man. What's the best way if people want to learn more about you reach out to you for, nobody gets to cover your VPM solutions today, but learn more about your words, where is the best place to do so?   Pete: Yeah, you know, best thing is they can actually I'm on all the socials I guess. But it's Pete Neubig NEU big and you can email me at: pete@vpmsolutions.com or you can just go to our website to https://www.vpmsolutions.com/ and check us out.   Michael: Right on man. Well, thanks again for coming on and sharing some wisdom, really appreciate you.   Pete: Thanks, Michael. Very good talking to you.   Michael: All right, when that was our episode, a big thank you to Pete for coming on super interesting way of thinking and doing things just a little bit differently than maybe we hear about what we need to be doing as investors. So as always, if you've liked the episode, we'd love to hear from you ratings and feedback are always appreciated, and we look forward to seeing you the next one. Happy investing…

About PetePete does many startup things at Allma. Links: Last Tweet in AWS: https://lasttweetinaws.com Twitter: https://twitter.com/petecheslock LinkedIn: https://www.linkedin.com/in/petecheslock/ TranscriptAnnouncer: Hello, and welcome to Screaming in the Cloud with your host, Chief Cloud Economist at The Duckbill Group, Corey Quinn. This weekly show features conversations with people doing interesting work in the world of cloud, thoughtful commentary on the state of the technical world, and ridiculous titles for which Corey refuses to apologize. This is Screaming in the Cloud.Corey: This episode is sponsored in part byLaunchDarkly. Take a look at what it takes to get your code into production. I'm going to just guess that it's awful because it's always awful. No one loves their deployment process. What if launching new features didn't require you to do a full-on code and possibly infrastructure deploy? What if you could test on a small subset of users and then roll it back immediately if results aren't what you expect? LaunchDarkly does exactly this. To learn more, visitlaunchdarkly.com and tell them Corey sent you, and watch for the wince.Corey: This episode is sponsored in part by our friends at Redis, the company behind the incredibly popular open source database that is not the bind DNS server. If you're tired of managing open source Redis on your own, or you're using one of the vanilla cloud caching services, these folks have you covered with the go to manage Redis service for global caching and primary database capabilities; Redis Enterprise. To learn more and deploy not only a cache but a single operational data platform for one Redis experience, visit redis.com/hero. Thats r-e-d-i-s.com/hero. And my thanks to my friends at Redis for sponsoring my ridiculous non-sense.  Corey: Welcome to Screaming in the Cloud. I'm Corey Quinn. I am joined—as is tradition, for a post re:Invent wrap up, a month or so later, once everything is time to settle—by my friend and yours, Pete Cheslock. Pete, how are you?Pete: Hi, I'm doing fantastic. New year; new me. That's what I'm going with.Corey: That's the problem. I keep hoping for that, but every time I turn around, it's still me. And you know, honestly, I wouldn't wish that on anyone.Pete: Exactly. [laugh]. I wouldn't wish you on me either. But somehow I keep coming back for this.Corey: So, in two-thousand twenty—or twenty-twenty, as the children say—re:Invent was fully virtual. And that felt weird. Then re:Invent 2021 was a hybrid event which, let's be serious here, is not really those things. They had a crappy online thing and then a differently crappy thing in person. But it didn't feel real to me because you weren't there.That is part of the re:Invent tradition. There's a midnight madness thing, there's a keynote where they announce a bunch of nonsense, and then Pete and I go and have brunch on the last day of re:Invent and decompress, and more or less talk smack about everything that crosses our minds. And you weren't there this year. I had to backfill you with Tim Banks. You know, the person that I backfield you with here at The Duckbill Group as a principal cloud economist.Pete: You know, you got a great upgrade in hot takes, I feel like, with Tim.Corey: And other ways, too, but it's rude of me to say that to you directly. So yeah, his hot takes are spectacular. He was going to be doing this with me, except you cannot mess with tradition. You really can't.Pete: Yeah. I'm trying to think how many—is this third year? It's at least three.Corey: Third or fourth.Pete: Yeah, it's at least three. Yeah, it was, I don't want to say I was sad to not be there because, with everything going on, it's still weird out there. But I am always—I'm just that weird person who actually likes re:Invent, but not for I feel like the reasons people think. Again, I'm such an extroverted-type person, that it's so great to have this, like, serendipity to re:Invent. The people that you run into and the conversations that you have, and prior—like in 2019, I think was a great example because that was the last one I had gone to—you know, having so many conversations so quickly because everyone is there, right? It's like this magnet that attracts technologists, and venture capital, and product builders, and all this other stuff. And it's all compressed into, like, you know, that five-day span, I think is the biggest part that makes so great.Corey: The fear in people's eyes when they see me. And it was fun; I had a pair of masks with me. One of them was a standard mask, and no one recognizes anyone because, masks, and the other was a printout of my ridiculous face, which was horrifyingly uncanny, but also made it very easy for people to identify me. And depending upon how social I was feeling, I would wear one or the other, and it worked flawlessly. That was worth doing. They really managed to thread the needle, as well, before Omicron hit, but after the horrors of last year. So, [unintelligible 00:03:00]—Pete: It really—Corey: —if it were going on right now, it would not be going on right now.Pete: Yeah. I talk about really—yeah—really just hitting it timing-wise. Like, not that they could have planned for any of this, but like, as things were kind of not too crazy and before they got all crazy again, it feels like wow, like, you know, they really couldn't have done the event at any other time. And it's like, purely due to luck. I mean, absolute one hundred percent.Corey: That's the amazing power of frugality. Because the reason is then is it's the week after Thanksgiving every year when everything is dirt cheap. And, you know, if there's one thing that I one-point-seve—sorry, their stock's in the toilet—a $1.6 trillion company is very concerned about, it is saving money at every opportunity.Pete: Well, the one thing that was most curious about—so I was at the first re:Invent in-what—2012 I think it was, and there was—it was quaint, right?—there was 4000 people there, I want to say. It was in the thousands of people. Now granted, still a big conference, but it was in the Sands Convention Center. It was in that giant room, the same number of people, were you know, people's booths were like tables, like, eight-by-ten tables, right? [laugh].It had almost a DevOpsDays feel to it. And I was kind of curious if this one had any of those feelings. Like, did it evoke it being more quaint and personable, or was it just as soulless as it probably has been in recent years?Corey: This was fairly soulless because they reduced the footprint of the event. They dropped from two expo halls down to one, they cut the number of venues, but they still had what felt like 20,000 people or something there. It was still crowded, it was still packed. And I've done some diligent follow-ups afterwards, and there have been very few cases of Covid that came out of it. I quarantined for a week in a hotel, so I don't come back and kill my young kids for the wrong reasons.And that went—that was sort of like the worst part of it on some level, where it's like great. Now I could sit alone at a hotel and do some catch-up and all the rest, but all right I'd kind of like to go home. I'm not used to being on the road that much.Pete: Yeah, I think we're all a little bit out of practice. You know, I haven't been on a plane in years. I mean, the travel I've done more recently has been in my car from point A to point B. Like, direct, you know, thing. Actually, a good friend of mine who's not in technology at all had to travel for business, and, you know, he also has young kids who are under five, so he when he got back, he actually hid in a room in their house and quarantine himself in the room. But they—I thought, this is kind of funny—they never told the kids he was home. Because they knew that like—Corey: So, they just thought the house was haunted?Pete: [laugh].Corey: Like, “Don't go in the west wing,” sort of level of nonsense. That is kind of amazing.Pete: Honestly, like, we were hanging out with the family because they're our neighbors. And it was like, “Oh, yeah, like, he's in the guest room right now.” Kids have no idea. [laugh]. I'm like, “Oh, my God.” I'm like, I can't even imagine. Yeah.Corey: So, let's talk a little bit about the releases of re:Invent. And I'm going to lead up with something that may seem uncharitable, but I don't think it necessarily is. There weren't the usual torrent of new releases for ridiculous nonsense in the same way that there have been previously. There was no, this service talks to satellites in space. I mean, sure, there was some IoT stuff to manage fleets of cars, and giant piles of robots, and cool, I don't have those particular problems; I'm trying to run a website over here.So okay, great. There were enhancements to a number of different services that were in many cases appreciated, in other cases, irrelevant. Werner said in his keynote, that it was about focusing on primitives this year. And, “Why do we have so many services? It's because you asked for it… as customers.”Pete: [laugh]. Yeah, you asked for it.Corey: What have you been asking for, Pete? Because I know what I've been asking for and it wasn't that. [laugh].Pete: It's amazing to see a company continually say yes to everything, and somehow, despite their best efforts, be successful at doing it. No other company could do that. Imagine any other software technology business out there that just builds everything the customers ask for. Like from a product management business standpoint, that is, like, rule 101 is, “Listen to your customers, but don't say yes to everything.” Like, you can't do everything.Corey: Most companies can't navigate the transition between offering the same software in the Cloud and on a customer facility. So, it's like, “Ooh, an on-prem version, I don't know, that almost broke the company the last time we tried it.” Whereas you have Amazon whose product strategy is, “Yes,” being able to put together a whole bunch of things. I also will challenge the assertion that it's the primitives that customers want. They don't want to build a data center out of popsicle sticks themselves. They want to get something that solves a problem.And this has been a long-term realization for me. I used to work at Media Temple as a senior systems engineer running WordPress at extremely large scale. My websites now run on WordPress, and I have the good sense to pay WP Engine to handle it for me, instead of doing it myself because it's not the most productive use of my time. I want things higher up the stack. I assure you I pay more to WP Engine than it would cost me to run these things myself from an infrastructure point of view, but not in terms of my time.What I see sometimes as the worst of all worlds is that AWS is trying to charge for that value-added pricing without adding the value that goes along with it because you still got to build a lot of this stuff yourself. It's still a very janky experience, you're reduced to googling random blog posts to figure out how this thing is supposed to work, and the best documentation comes from externally. Whereas with a company that's built around offering solutions like this, great. In the fullness of time, I really suspect that if this doesn't change, their customers are going to just be those people who build solutions out of these things. And let those companies capture the up-the-stack margin. Which I have no problem with. But they do because Amazon is a company that lies awake at night actively worrying that someone, somewhere, who isn't them might possibly be making money somehow.Pete: I think MongoDB is a perfect example of—like, look at their stock price over the last whatever, years. Like, they, I feel like everyone called for the death of MongoDB every time Amazon came out with their new things, yet, they're still a multi-billion dollar company because I can just—give me an API endpoint and you scale the database. There's is—Corey: Look at all the high-profile hires that Mongo was making out of AWS, and I can't shake the feeling they're sitting there going, “Yeah, who's losing important things out of production now?” It's, everyone is exodus-ing there. I did one of those ridiculous graphics of the naming all the people that went over there, and in—with the hurricane evacuation traffic picture, and there's one car going the other way that I just labeled with, “Re:Invent sponsorship check,” because yeah, they have a top tier sponsorship and it was great. I've got to say I've been pretty down on MongoDB for a while, for a variety of excellent reasons based upon, more or less, how they treated customers who were in pain. And I'd mostly written it off.I don't do that anymore. Not because I inherently believe the technology has changed, though I'm told it has, but by the number of people who I deeply respect who are going over there and telling me, no, no, this is good. Congratulations. I have often said you cannot buy authenticity, and I don't think that they are, but the people who are working there, I do not believe that these people are, “Yeah, well, you bought my opinion. You can buy their attention, not their opinion.” If someone changes their opinion, based upon where they work, I kind of question everything they're telling me is, like, “Oh, you're just here to sell something you don't believe in? Welcome aboard.”Pete: Right. Yeah, there's an interview question I like to ask, which is, “What's something that you used to believe in very strongly that you've more recently changed your mind on?” And out of politeness because usually throws people back a little bit, and they're like, “Oh, wow. Like, let me think about that.” And I'm like, “Okay, while you think about that I want to give you mine.”Which is in the past, my strongly held belief was we had to run everything ourselves. “You own your availability,” was the line. “No, I'm not buying Datadog. I can build my own metric stack just fine, thank you very much.” Like, “No, I'm not going to use these outsourced load balancers or databases because I need to own my availability.”And what I realized is that all of those decisions lead to actually delivering and focusing on things that were not the core product. And so now, like, I've really flipped 180, that, if any—anything that you're building that does not directly relate to the core product, i.e. How your business makes money, should one hundred percent be outsourced to an expert that is better than you. Mongo knows how to run Mongo better than you.Corey: “What does your company do?” “Oh, we handle expense reports.” “Oh, what are you working on this month?” “I'm building a load balancer.” It's like that doesn't add the value. Don't do that.Pete: Right. Exactly. And so it's so interesting, I think, to hear Werner say that, you know, we're just building primitives, and you asked for this. And I think that concept maybe would work years ago, when you had a lot of builders who needed tools, but I don't think we have any, like, we don't have as many builders as before. Like, I think we have people who need more complete solutions. And that's probably why all these businesses are being super successful against Amazon.Corey: I'm wondering if it comes down to a cloud economic story, specifically that my cloud bill is always going to be variable and it's difficult to predict, whereas if I just use EC2 instances, and I build load balancers or whatnot, myself, well, yeah, it's a lot more work, but I can predict accurately what my staff compensation costs are more effectively, that I can predict what a CapEx charge would be or what the AWS bill is going to be. I'm wondering if that might in some way shape it?Pete: Well, I feel like the how people get better in managing their costs, right, you'll eventually move to a world where, like, “Yep, okay, first, we turned off waste,” right? Like, step one is waste. Step two is, like, understanding your spend better to optimize but, like, step three, like, the galaxy brain meme of Amazon cost stuff is all, like, unit economics stuff, where trying to better understand the actual cost deliver an actual feature. And yeah, I think that actually gets really hard when you give—kind of spread your product across, like, a slew of services that have varying levels of costs, varying levels of tagging, so you can attribute it. Like, it's really hard. Honestly, it's pretty easy if I have 1000 EC2 servers with very specific tags, I can very easily figure out what it costs to deliver product. But if I have—Corey: Yeah, if I have Corey build it, I know what Corey is going to cost, and I know how many servers he's going to use. Great, if I have Pete it, Pete's good at things, it'll cut that server bill in half because he actually knows how to wind up being efficient with things. Okay, great. You can start calculating things out that way. I don't think that's an intentional choice that companies are making, but I feel like that might be a natural outgrowth of it.Pete: Yeah. And there's still I think a lot of the, like, old school mentality of, like, the, “Not invented here,” the, “We have to own our availability.” You can still own your availability by using these other vendors. And honestly, it's really heartening to see so many companies realize that and realize that I don't need to get everything from Amazon. And honestly, like, in some things, like I look at a cloud Amazon bill, and I think to myself, it would be easier if you just did everything from Amazon versus having these ten other vendors, but those ten other vendors are going to be a lot better at running the product that they build, right, that as a service, then you probably will be running it yourself. Or even Amazon's, like, you know, interpretation of that product.Corey: A few other things that came out that I thought were interesting, at least the direction they're going in. The changes to S3 intelligent tiering are great, with instant retrieval on Glacier. I feel like that honestly was—they talk a good story, but I feel like that was competitive response to Google offering the same thing. That smacks of a large company with its use case saying, “You got two choices here.” And they're like, “Well, okay. Crap. We're going to build it then.”Or alternately, they're looking at the changes that they're making to intelligent tiering, they're now shifting that to being the default that as far as recommendations go. There are a couple of drawbacks to it, but not many, and it's getting easier now to not have the mental overhead of trying to figure out exactly what your lifecycle policies are. Yeah, there are some corner cases where, okay, if I adjust this just so, then I could save 10% on that monitoring fee or whatnot. Yeah, but look how much work that's going to take you to curate and make sure that you're not doing something silly. That feels like it is such an in the margins issue. It's like, “How much data you're storing?” “Four exabytes.” Okay, yeah. You probably want some people doing exactly that, but that's not most of us.Pete: Right. Well, there's absolutely savings to be had. Like, if I had an exabyte of data on S3—which there are a lot of people who have that level of data—then it would make sense for me to have an engineering team whose sole purpose is purely an optimizing our data lifecycle for that data. Until a point, right? Until you've optimized the 80%, basically. You optimize the first 80, that's probably, air-quote, “Easy.” The last 20 is going to be incredibly hard, maybe you never even do that.But at lower levels of scale, I don't think the economics actually work out to have a team managing your data lifecycle of S3. But the fact that now AWS can largely do it for you in the background—now, there's so many things you have to think about and, like, you know, understand even what your data is there because, like, not all data is the same. And since S3 is basically like a big giant database you can query, you got to really think about some of that stuff. But honestly, what I—I don't know if—I have no idea if this is even be worked on, but what I would love to see—you know, hashtag #AWSwishlist—is, now we have countless tiers of EBS volumes, EBS volumes that can be dynamically modified without touching, you know, the physical host. Meaning with an API call, you can change from the gp2 to gp3, or io whatever, right?Corey: Or back again if it doesn't pan out.Pete: Or back again, right? And so for companies with large amounts of spend, you know, economics makes sense that you should have a team that is analyzing your volumes usage and modifying that daily, right? Like, you could modify that daily, and I don't know if there's anyone out there that's actually doing it at that level. And they probably should. Like, if you got millions of dollars in EBS, like, there's legit savings that you're probably leaving on the table without doing that. But that's what I'm waiting for Amazon to do for me, right? I want intelligent tiering for EBS because if you're telling me I can API call and you'll move my data and make that better, make that [crosstalk 00:17:46] better [crosstalk 00:17:47]—Corey: Yeah it could be like their auto-scaling for DynamoDB, for example. Gives you the capacity you need 20 minutes after you needed it. But fine, whatever because if I can schedule stuff like that, great, I know what time of day, the runs are going to kick off that beat up the disks. I know when end-of-month reporting fires off. I know what my usage pattern is going to be, by and large.Yeah, part of the problem too, is that I look at this stuff, and I get excited about it with the intelligent tiering… at The Duckbill Group we've got a few hundred S3 buckets lurking around. I'm thinking, “All right, I've got to go through and do some changes on this and implement all of that.” Our S3 bill's something like 50 bucks a month or something ridiculous like that. It's a no, that really isn't a thing. Like, I have a screenshot bucket that I have an app installed—I think called Dropshare—that hooks up to anytime I drag—I hit a shortcut, I drag with the mouse to select whatever I want and boom, it's up there and the URL is not copied to my clipboard, I can paste that wherever I want.And I'm thinking like, yeah, there's no cleanup on that. There's no lifecycle policy that's turning into anything. I should really go back and age some of it out and do the rest and start doing some lifecycle management. It—I've been using this thing for years and I think it's now a whopping, what, 20 cents a month for that bucket. It's—I just don't—Pete: [laugh].Corey: —I just don't care, other than voice in the back of my mind, “That's an unbounded growth problem.” Cool. When it hits 20 bucks a month, then I'll consider it. But until then I just don't. It does not matter.Pete: Yeah, I think yeah, scale changes everything. Start adding some zeros and percentages turned into meaningful numbers. And honestly, back on the EBS thing, the one thing that really changed my perspective of EBS, in general, is—especially coming from the early days, right? One terabyte volume, it was a hard drive in a thing. It was a virtual LUN on a SAN somewhere, probably.Nowadays, and even, like, many years after those original EBS volumes, like all the limits you get in EBS, those are actually artificial limits, right? If you're like, “My EBS volume is too slow,” it's not because, like, the hard drive it's on is too slow. That's an artificial limit that is likely put in place due to your volume choice. And so, like, once you realize that in your head, then your concept of how you store data on EBS should change dramatically.Corey: Oh, AWS had a blog post recently talking about, like, with io2 and the limits and everything, and there was architecture thinking, okay. “So, let's say this is insufficient and the quarter-million IOPS a second that you're able to get is not there.” And I'm sitting there thinking, “That is just ludicrous data volume and data interactivity model.” And it's one of those, like, I'm sitting here trying to think about, like, I haven't had to deal with a problem like that decade, just because it's, “Huh. Turns out getting these one thing that's super fast is kind of expensive.” If you paralyze it out, that's usually the right answer, and that's how the internet is mostly evolved. But there are use cases for which that doesn't work, and I'm excited to see it. I don't want to pay for it in my view, but it's nice to see it.Pete: Yeah, it's kind of fun to go into the Amazon calculator and price out one of the, like, io2 volumes and, like, maxed out. It's like, I don't know, like $50,000 a month or a hun—like, it's some just absolutely absurd number. But the beauty of it is that if you needed that value for an hour to run some intensive data processing task, you can have it for an hour and then just kill it when you're done, right? Like, that is what is most impressive.Corey: I copied 130 gigs of data to an EFS volume, which was—[unintelligible 00:21:05] EFS has gone from “This is a piece of junk,” to one of my favorite services. It really is, just because of its utility and different ways of doing things. I didn't have the foresight, just use a second EFS volume for this. So, I was unzipping a whole bunch of small files onto it. Great.It took a long time for me to go through it. All right, now that I'm done with that I want to clean all this up. My answer was to ultimately spin up a compute node and wind up running a whole bunch of—like, 400, simultaneous rm-rf on that long thing. And it was just, like, this feels foolish and dumb, but here we are. And I'm looking at the stats on it because the instance was—all right, at that point, the load average [on the instance 00:21:41] was like 200, or something like that, and the EFS volume was like, “Ohh, wow, you're really churning on this. I'm now at, like, 5% of the limit.” Like, okay, great. It turns out I'm really bad at computers.Pete: Yeah, well, that's really the trick is, like, yeah, sure, you can have a quarter-million IOPS per second, but, like, what's going to break before you even hit that limit? Probably many other things.Corey: Oh, yeah. Like, feels like on some level if something gets to that point, it a misconfiguration somewhere. But honestly, that's the thing I find weirdest about the world in which we live is that at a small-scale—if I have a bill in my $5 a month shitposting account, great. If I screw something up and cost myself a couple hundred bucks in misconfiguration it's going to stand out. At large scale, it doesn't matter if—you're spending $50 million a year or $500 million a year on AWS and someone leaks your creds, and someone spins up a whole bunch of Bitcoin miners somewhere else, you're going to see that on your bill until they're mining basically all the Bitcoin. It just gets lost in the background.Pete: I'm waiting for those—I'm actually waiting for the next level of them to get smarter because maybe you have, like, an aggressive tagging system and you're monitoring for untagged instances, but the move here would be, first get the creds and query for, like, the most used tags and start applying those tags to your Bitcoin mining instances. My God, it'll take—Corey: Just clone a bunch of tags. Congratulations, you now have a second BI Elasticsearch cluster that you're running yourself. Good work.Pete: Yeah. Yeah, that people won't find that until someone comes along after the fact that. Like, “Why do we have two have these things?” And you're like—[laugh].Corey: “Must be a DR thing.”Pete: It's maxed-out CPU. Yeah, exactly.Corey: [laugh].Pete: Oh, the terrible ideas—please, please, hackers don't take are terrible ideas.Corey: I had a, kind of, whole thing I did on Twitter years ago, talking about how I would wind up using the AWS Marketplace for an embezzlement scheme. Namely, I would just wind up spinning up something that had, like, a five-cent an hour charge or whatnot on just, like, basically rebadge the CentOS Community AMI or whatnot. Great. And then write a blog post, not attached to me, that explains how to do a thing that I'm going to be doing in production in a week or two anyway. Like, “How to build an auto-scaling group,” and reference that AMI.Then if it ever comes out, like, “Wow, why are we having all these marketplace charges on this?” “I just followed the blog post like it said here.” And it's like, “Oh, okay. You're a dumbass. The end.”That's the way to do it. A month goes by and suddenly it came out that someone had done something similarly. They wound up rebadging these community things on the marketplace and charging big money for it, and I'm sitting there going like that was a joke. It wasn't a how-to. But yeah, every time I make these jokes, I worry someone's going to do it.Pete: “Welcome to large-scale fraud with Corey Quinn.”Corey: Oh, yeah, it's fraud at scale is really the important thing here.Corey: This episode is sponsored by our friends at Oracle HeatWave is a new high-performance accelerator for the Oracle MySQL Database Service. Although I insist on calling it “my squirrel.” While MySQL has long been the worlds most popular open source database, shifting from transacting to analytics required way too much overhead and, ya know, work. With HeatWave you can run your OLTP and OLAP, don't ask me to ever say those acronyms again, workloads directly from your MySQL database and eliminate the time consuming data movement and integration work, while also performing 1100X faster than Amazon Aurora, and 2.5X faster than Amazon Redshift, at a third of the cost. My thanks again to Oracle Cloud for sponsoring this ridiculous nonsense.Corey: I still remember a year ago now at re:Invent 2021 was it, or was it 2020? Whatever they came out with, I want to say it wasn't gp3, or maybe it was, regardless, there was a new EBS volume type that came out that you were playing with to see how it worked and you experimented with it—Pete: Oh, yes.Corey: —and the next morning, you looked at the—I checked Slack and you're like well, my experiments yesterday cost us $5,000. And at first, like, the—my response is instructive on this because, first, it was, “Oh, my God. What's going to happen now?” And it's like, first, hang on a second.First off, that seems suspect but assume it's real. I assumed it was real at the outset. It's “Oh, right. This is not my personal $5-a-month toybox account. We are a company; we can absolutely pay that.” Because it's like, I could absolutely reach out, call it a favor. “I made a mistake, and I need a favor on the bill, please,” to AWS.And I would never live it down, let's be clear. For a $7,000 mistake, I would almost certainly eat it. As opposed to having to prostrate myself like that in front of Amazon. I'm like, no, no, no. I want one of those like—if it's like, “Okay, you're going to, like, set back the company roadmap by six months if you have to pay this. Do you want to do it?” Like, [groans] “Fine, I'll eat some crow.”But okay. And then followed immediately by, wow, if Pete of all people can mess this up, customers are going to be doomed here. We should figure out what happened. And I'm doing the math. Like, Pete, “What did you actually do?” And you're sitting there and you're saying, “Well, I had like a 20 gig volume that I did this.” And I'm doing the numbers, and it's like—Pete: Something's wrong.Corey: “How sure are you when you say ‘gigabyte,' that you were—that actually means what you think it did? Like, were you off by a lot? Like, did you mean exabytes?” Like, what's the deal here?Pete: Like, multiple factors.Corey: Yeah. How much—“How many IOPS did you give that thing, buddy?” And it turned out what happened was that when they launched this, they had mispriced it in the system by a factor of a million. So, it was fun. I think by the end of it, all of your experimentation was somewhere between five to seven cents. Which—Pete: Yeah. It was a—Corey: Which is why you don't work here anymore because no one cost me seven cents of money to give to Amazon—Pete: How dare you?Corey: —on my watch. Get out.Pete: How dare you, sir?Corey: Exactly.Pete: Yeah, that [laugh] was amazing to see, as someone who has done—definitely maid screw-ups that have cost real money—you know, S3 list requests are always a fun one at scale—but that one was supremely fun to see the—Corey: That was a scary one because another one they'd done previously was they had messed up Lightsail pricing, where people would log in, and, like, “Okay, so what is my Lightsail instance going to cost?” And I swear to you, this is true, it was saying—this was back in 2017 or so—the answer was, like, “$4.3 billion.” Because when you see that you just start laughing because you know it's a mistake. You know, that they're not going to actually demand that you spend $4.3 billion for a single instance—unless it's running SAP—and great.It's just, it's a laugh. It's clearly a mispriced, and it's clearly a bug that's going to get—it's going to get fixed. I just spun up this new EBS volume that no one fully understands yet and it cost me thousands of dollars. That's the sort of thing that no, no, I could actually see that happening. There are instances now that cost something like 100 bucks an hour or whatnot to run. I can see spinning up the wrong thing by mistake and getting bitten by it. There's a bunch of fun configuration mistakes you can make that will, “Hee, hee, hee. Why can I see that bill spike from orbit?” And that's the scary thing.Pete: Well, it's the original CI and CD problem of the per-hour billing, right? That was super common of, like, yeah, like, an i3, you know, 16XL server is pretty cheap per hour, but if you're charged per hour and you spin up a bunch for five minutes. Like, it—you will be shocked [laugh] by what you see there. So—Corey: Yeah. Mistakes will show. And I get it. It's also people as individuals are very different psychologically than companies are. With companies it's one of those, “Great we're optimizing to bring in more revenue and we don't really care about saving money at all costs.”Whereas people generally have something that looks a lot like a fixed income in the form of a salary or whatnot, so it's it is easier for us to cut spend than it is for us to go out and make more money. Like, I don't want to get a second job, or pitch my boss on stuff, and yeah. So, all and all, routing out the rest of what happened at re:Invent, they—this is the problem is that they have a bunch of minor things like SageMaker Inference Recommender. Yeah, I don't care. Anything—Pete: [laugh].Corey: —[crosstalk 00:28:47] SageMaker I mostly tend to ignore, for safety. I did like the way they described Amplify Studio because they made it sound like a WYSIWYG drag and drop, build a React app. It's not it. It basically—you can do that in Figma and then it can hook it up to some things in some cases. It's not what I want it to be, which is Honeycode, except good. But we'll get there some year. Maybe.Pete: There's a lot of stuff that was—you know, it's the classic, like, preview, which sure, like, from a product standpoint, it's great. You know, they have a level of scale where they can say, “Here's this thing we're building,” which could be just a twinkle in a product managers, call it preview, and get thousands of people who would be happy to test it out and give you feedback, and it's a, it's great that you have that capability. But I often look at so much stuff and, like, that's really cool, but, like, can I, can I have it now? Right? Like—or you can't even get into the preview plan, even though, like, you have that specific problem. And it's largely just because either, like, your scale isn't big enough, or you don't have a good enough relationship with your account manager, or I don't know, countless other reasons.Corey: The thing that really throws me, too, is the pre-announcements that come a year or so in advance, like, the Outpost smaller ones are finally available, but it feels like when they do too many pre-announcements or no big marquee service announcements, as much as they talk about, “We're getting back to fundamentals,” no, you have a bunch of teams that blew the deadline. That's really what it is; let's not call it anything else. Another one that I think is causing trouble for folks—I'm fortunate in that I don't do much work with Oracle databases, or Microsoft SQL databases—but they extended RDS Custom to Microsoft SQL at the [unintelligible 00:30:27] SQL server at re:Invent this year, which means this comes down to things I actually use, we're going to have a problem because historically, the lesson has always been if I want to run my own databases and tweak everything, I do it on top of an EC2 instance. If I want to managed database, relational database service, great, I use RDS. RDS Custom basically gives you root into the RDS instance. Which means among other things, yes, you can now use RDS to run containers.But it lets you do a lot of things that are right in between. So, how do you position this? When should I use RDS Custom? Can you give me an easy answer to that question? And they used a lot of words to say, no, they cannot. It's basically completely blowing apart the messaging and positioning of both of those services in some unfortunate ways. We'll learn as we go.Pete: Yeah. Honestly, it's like why, like, why would I use this? Or how would I use this? And this is I think, fundamentally, what's hard when you just say yes to everything. It's like, they in many cases, I don't think, like, I don't want to say they don't understand why they're doing this, but if it's not like there's a visionary who's like, this fits into this multi-year roadmap.That roadmap is largely—if that roadmap is largely generated by the customers asking for it, then it's not like, oh, we're building towards this Northstar of RDS being whatever. You might say that, but your roadmap's probably getting moved all over the place because, you know, this company that pays you a billion dollars a year is saying, “I would give you $2 billion a year for all of my Oracle databases, but I need this specific thing.” I can't imagine a scenario that they would say, “Oh, well, we're building towards this Northstar, and that's not on the way there.” Right? They'd be like, “New Northstar. Another billion dollars, please.”Corey: Yep. Probably the worst release of re:Invent, from my perspective, is RUM, Real User Monitoring, for CloudWatch. And I, to be clear, I wrote a shitposting Twitter threading client called Last Tweet in AWS. Go to lasttweetinaws.com. You can all use it. It's free; I just built this for my own purposes. And I've instrumented it with RUM. Now, Real User Monitoring is something that a lot of monitoring vendors use, and also CloudWatch now. And what that is, is it embeds a listener into the JavaScript that runs on client load, and it winds up looking at what's going on loading times, et cetera, so you can see when users are unhappy. I have no problem with this. Other than that, you know, liking users? What's up with that?Pete: Crazy.Corey: But then, okay, now, what this does is unlike every other RUM tool out there, which charges per session, meaning I am going to be… doing a web page load, it charges per data item, which includes HTTP errors, or JavaScript errors, et cetera. Which means that if you have a high transaction volume site and suddenly your CDN takes a nap like Fastly did for an hour last year, suddenly your bill is stratospheric for this because errors abound and cascade, and you can have thousands of errors on a single page load for these things, and it is going to be visible from orbit, at least with a per session basis thing, when you start to go viral, you understand that, “Okay, this is probably going to cost me some more on these things, and oops, I guess I should write less compelling content.” Fine. This is one of those one misconfiguration away and you are wailing and gnashing teeth. Now, this is a new service. I believe that they will waive these surprise bills in the event that things like that happen. But it's going to take a while and you're going to be worrying the whole time if you've rolled this out naively. So it's—Pete: Well and—Corey: —I just don't like the pricing.Pete: —how many people will actively avoid that service, right? And honestly, choose a competitor because the competitor could be—the competitor could be five times more expensive, right, on face value, but it's the certainty of it. It's the uncertainty of what Amazon will charge you. Like, no one wants a surprise bill. “Well, a vendor is saying that they'll give us this contract for $10,000. I'm going to pay $10,000, even though RUM might be a fraction of that price.”It's honestly, a lot of these, like, product analytics tools and monitoring tools, you'll often see they price be a, like, you know, MAU, Monthly Active User, you know, or some sort of user-based pricing, like, the number of people coming to your site. You know, and I feel like at least then, if you are trying to optimize for lots of users on your site, and more users means more revenue, then you know, if your spend is going up, but your revenue is also going up, that's a win-win. But if it's like someone—you know, your third-party vendor dies and you're spewing out errors, or someone, you know, upgraded something and it spews out errors. That no one would normally see; that's the thing. Like, unless you're popping open that JavaScript console, you're not seeing any of those errors, yet somehow it's like directly impacting your bottom line? Like that doesn't feel [crosstalk 00:35:06].Corey: Well, there is something vaguely Machiavellian about that. Like, “How do I get my developers to care about errors on consoles?” Like, how about we make it extortionately expensive for them not to. It's, “Oh, all right, then. Here we go.”Pete: And then talk about now you're in a scenario where you're working on things that don't directly impact the product. You're basically just sweeping up the floor and then trying to remove errors that maybe don't actually affect it and they're not actually an error.Corey: Yeah. I really do wonder what the right answer is going to be. We'll find out. Again, we live, we learn. But it's also, how long does it take a service that has bad pricing at launch, or an unfortunate story around it to outrun that reputation?People are still scared of Glacier because of its original restore pricing, which was non-deterministic for any sensible human being, and in some cases lead to I'm used to spending 20 to 30 bucks a month on this. Why was I just charged two grand?Pete: Right.Corey: Scare people like that, they don't come back.Pete: I'm trying to actually remember which service it is that basically gave you an estimate, right? Like, turn it on for a month, and it would give you an estimate of how much this was going to cost you when billing started.Corey: It was either Detective or GuardDuty.Pete: Yeah, it was—yeah, that's exactly right. It was one of those two. And honestly, that was unbelievably refreshing to see. You know, like, listen, you have the data, Amazon. You know what this is going to cost me, so when I, like, don't make me spend all this time to go and figure out the cost. If you have all this data already, just tell me, right?And if I look at it and go, “Yeah, wow. Like, turning this on in my environment is going to cost me X dollars. Like, yeah, that's a trade-off I want to make, I'll spend that.” But you know, with some of the—and that—a little bit of a worry on some of the intelligent tiering on S3 is that the recommendation is likely going to be everything goes to intelligent tiering first, right? It's the gp3 story. Put everything on gp3, then move it to the proper volume, move it to an sc or an st or an io. Like, gp3 is where you start. And I wonder if that's going to be [crosstalk 00:37:08].Corey: Except I went through a wizard yesterday to launch an EC2 instance and its default on the free tier gp2.Pete: Yeah. Interesting.Corey: Which does not thrill me. I also still don't understand for the life of me why in some regions, the free tier is a t2 instance, when t3 is available.Pete: They're uh… my guess is that they've got some free t—they got a bunch of t2s lying around. [laugh].Corey: Well, one of the most notable announcements at re:Invent that most people didn't pay attention to is their ability now to run legacy instance types on top of Nitro, which really speaks to what's going on behind the scenes of we can get rid of all that old hardware and emulate the old m1 on modern equipment. So, because—you can still have that legacy, ancient instance, but now you're going—now we're able to wind up greening our data centers, which is part of their big sustainability push, with their ‘Sustainability Pillar' for the well-architected framework. They're talking more about what the green choices in cloud are. Which is super handy, not just because of the economic impact because we could use this pretty directly to reverse engineer their various margins on a per-service or per-offering basis. Which I'm not sure they're aware of yet, but oh, they're going to be.And that really winds up being a win for the planet, obviously, but also something that is—that I guess puts a little bit of choice on customers. The challenge I've got is, with my serverless stuff that I build out, if I spend—the Google search I make to figure out what the most economic, most sustainable way to do that is, is going to have a bigger carbon impact on the app itself. That seems to be something that is important at scale, but if you're not at scale, it's one of those, don't worry about it. Because let's face it, the cloud providers—all of them—are going to have a better sustainability story than you are running this in your own data centers, or on a Raspberry Pi that's always plugged into the wall.Pete: Yeah, I mean, you got to remember, Amazon builds their own power plants to power their data centers. Like, that's the level they play, right? There, their economies of scale are so entirely—they're so entirely different than anything that you could possibly even imagine. So, it's something that, like, I'm sure people will want to choose for. But, you know, if I would honestly say, like, if we really cared about our computing costs and the carbon footprint of it, I would love to actually know the carbon footprint of all of the JavaScript trackers that when I go to various news sites, and it loads, you know, the whatever thousands of trackers and tracking the all over, like, what is the carbon impact of some of those choices that I actually could control, like, as a either a consumer or business person?Corey: I really hope that it turns into something that makes a meaningful difference, and it's not just greenwashing. But we'll see. In the fullness of time, we're going to figure that out. Oh, they're also launching some mainframe stuff. They—like that's great.Pete: Yeah, those are still a thing.Corey: I don't deal with a lot of customers that are doing things with that in any meaningful sense. There is no AWS/400, so all right.Pete: [laugh]. Yeah, I think honestly, like, I did talk to a friend of mine who's in a big old enterprise and has a mainframe, and they're actually replacing their mainframe with Lambda. Like they're peeling off—which is, like, a great move—taking the monolith, right, and peeling off the individual components of what it can do into these discrete Lambda functions. Which I thought was really fascinating. Again, it's a five-year-long journey to do something like that. And not everyone wants to wait five years, especially if their support's about to run out for that giant box in the, you know, giant warehouse.Corey: The thing that I also noticed—and this is probably the—I guess, one of the—talk about swing and a miss on pricing—they have a—what is it?—there's a VPC IP Address Manager, which tracks the the IP addresses assigned to your VPCs that are allocated versus not, and it's 20 cents a month per IP address. It's like, “Okay. So, you're competing against a Google Sheet or an Excel spreadsheet”—which is what people are using for these things now—“Only you're making it extortionately expensive?”Pete: What kind of value does that provide for 20—I mean, like, again—Corey: I think Infoblox or someone like that offers it where they become more cost-effective as soon as you hit 500 IP addresses. And it's just—like, this is what I'm talking about. I know it does not cost AWS that kind of money to store an IP address. You can store that in a Route 53 TXT record for less money, for God's sake. And that's one of those, like, “Ah, we could extract some value pricing here.”Like, I don't know if it's a good product or not. Given its pricing, I don't give a shit because it's going to be too expensive for anything beyond trivial usage. So, it's a swing and a miss from that perspective. It's just, looking at that, I laugh, and I don't look at it again.Pete: See I feel—Corey: I'm not usually price sensitive. I want to be clear on that. It's just, that is just Looney Tunes, clown shoes pricing.Pete: Yeah. It's honestly, like, in many cases, I think the thing that I have seen, you know, in the past few years is, in many cases, it can honestly feel like Amazon is nickel-and-diming their customers in so many ways. You know, the explosion of making it easy to create multiple Amazon accounts has a direct impact to waste in the cloud because there's a lot of stuff you have to have her account. And the more accounts you have, those costs grow exponentially as you have these different places. Like, you kind of lose out on the economies of scale when you have a smaller number of accounts.And yeah, it's hard to optimize for that. Like, if you're trying to reduce your spend, it's challenging to say, “Well, by making a change here, we'll save, you know, $10,000 in this account.” “That doesn't seem like a lot when we're spending millions.” “Well, hold on a second. You'll save $10,000 per account, and you have 500 accounts,” or, “You have 1000 accounts,” or something like that.Or almost cost avoidance of this cost is growing unbounded in all of your accounts. It's tiny right now. So, like, now would be the time you want to do something with it. But like, again, for a lot of companies that have adopted the practice of endless Amazon accounts, they've almost gone, like, it's the classic, like, you know, I've got 8000 GitHub repositories for my source code. Like, that feels just as bad as having one GitHub repository for your repo. I don't know what the balance is there, but anytime these different types of services come out, it feels like, “Oh, wow. Like, I'm going to get nickeled and dimed for it.”Corey: This ties into the re:Post launch, which is a rebranding of their forums, where, okay, great, it was a little crufty and it need modernize, but it still ties your identity to an IAM account, or the root email address for an Amazon account, which is great. This is completely worthless because as soon as I change jobs, I lose my identity, my history, the rest, on this forum. I'm not using it. It shows that there's a lack of awareness that everyone is going to have multiple accounts with which they interact, and that people are going to deal with the platform longer than any individual account will. It's just a continual swing and a miss on things like that.And it gets back to the billing question of, “Okay. When I spin up an account, do I want them to just continue billing me—because don't turn this off; this is important—or do I want there to be a hard boundary where if you're about to charge me, turn it off. Turn off the thing that's about to cost me money.” And people hem and haw like this is an insurmountable problem, but I think the way to solve it is, let me specify that intent when I provision the account. Where it's, “This is a production account for a bank. I really don't want you turning it off.” Versus, “I'm a student learner who thinks that a Managed NAT Gateway might be a good thing. Yeah, I want you to turn off my demo Hello World app that will teach me what's going on, rather than surprising me with a five-figure bill at the end of the month.”Pete: Yeah. It shouldn't be that hard. I mean, but again, I guess everything's hard at scale.Corey: Oh, yeah. Oh yeah.Pete: But still, I feel like every time I log into Cost Explorer and I look at—and this is years it's still not fixed. Not that it's even possible to fix—but on the first day of the month, you look at Cost Explorer, and look at what Amazon is estimating your monthly bill is going to be. It's like because of your, you know—Corey: Your support fees, and your RI purchases, and savings plans purchases.Pete: [laugh]. All those things happened, right? First of the month, and it's like, yeah, “Your bill's going to be $800,000 this year.” And it's like, “Shouldn't be, like, $1,000?” Like, you know, it's the little things like that, that always—Corey: The one-off charges, like, “Oh, your Route 53 zone,” and all the stuff that gets charged on a monthly cadence, which fine, whatever. I mean, I'm okay with it, but it's also the, like, be careful when that happen—I feel like there's a way to make that user experience less jarring.Pete: Yeah because that problem—I mean, in my scenario, companies that I've worked at, there's been multiple times that a non-technical person will look at that data and go into immediate freakout mode, right? And that's never something that you want to have happen because now that's just adding a lot of stress and anxiety into a company that is—with inaccurate data. Like, the data—like, the answer you're giving someone is just wrong. Perhaps you shouldn't even give it to them if it's that wrong. [laugh].Corey: Yeah, I'm looking forward to seeing what happens this coming year. We're already seeing promising stuff. They—give people a timeline on how long in advance these things record—late last night, AWS released a new console experience. When you log into the AWS console now, there's a new beta thing. And I gave it some grief on Twitter because I'm still me, but like the direction it's going. It lets you customize your view with widgets and whatnot.And until they start selling widgets on marketplace or having sponsored widgets, you can't remove I like it, which is no guarantee at some point. But it shows things like, I can move the cost stuff, I can move the outage stuff up around, I can have the things that are going on in my account—but who I am means I can shift this around. If I'm a finance manager, cool. I can remove all the stuff that's like, “Hey, you want to get started spinning up an EC2 instance?” “Absolutely not. Do I want to get told, like, how to get certified? Probably not. Do I want to know what the current bill is and whether—and my list of favorites that I've pinned, whatever services there? Yeah, absolutely do.” This is starting to get there.Pete: Yeah, I wonder if it really is a way to start almost hedging on organizations having a wider group of people accessing AWS. I mean, in previous companies, I absolutely gave access to the console for tools like QuickSight, for tools like Athena, for the DataBrew stuff, the Glue DataBrew. Giving, you know, non-technical people access to be able to do these, like, you know, UI ETL tasks, you know, a wider group of a company is getting access into Amazon. So, I think anything that Amazon does to improve that experience for, you know, the non-SREs, like the people who would traditionally log in, like, that is an investment definitely worth making.Corey: “Well, what could non-engineering types possibly be doing in the AWS console?” “I don't know, jackhole, maybe paying the bill? Just a thought here.” It's the, there are people who look at these things from a variety of different places, and you have such sprawl in the AWS world that there are different personas by a landslide. If I'm building Twitter for Pets, you probably don't want to be pitching your mainframe migration services to me the same way that you would if I were a 200-year-old insurance company.Pete: Yeah, exactly. And the number of those products are going to grow, the number of personas are going to grow, and, yeah, they'll have to do something that they want to actually, you know, maintain that experience so that every person can have, kind of, the experience that they want, and not be distracted, you know? “Oh, what's this? Let me go test this out.” And it's like, you know, one-time charge for $10,000 because, like, that's how it's charged. You know, that's not an experience that people like.Corey: No. They really don't. Pete, I want to thank you for spending the time to chat with me again, as is our tradition. I'm hoping we can do it in person this year, when we go at the end of 2022, to re:Invent again. Or that no one goes in person. But this hybrid nonsense is for the birds.Pete: Yeah. I very much would love to get back to another one, and yeah, like, I think there could be an interesting kind of merging here of our annual re:Invent recap slash live brunch, you know, stream you know, hot takes after a long week. [laugh].Corey: Oh, yeah. The real way that you know that it's a good joke is when one of us says something, the other one sprays scrambled eggs out of their nose. Yeah, that's the way to do it.Pete: Exactly. Exactly.Corey: Pete, thank you so much. If people want to learn more about what you're up to—hopefully, you know, come back. We miss you, but you're unaffiliated, you're a startup advisor. Where can people find you to learn more, if they for some unforgivable reason don't know who or what a Pete Cheslock is?Pete: Yeah. I think the easiest place to find me is always on Twitter. I'm just at @petecheslock. My DMs are always open and I'm always down to expand my network and chat with folks.And yeah, right, now, I'm just, as I jokingly say, professionally unaffiliated. I do some startup advisory work and have been largely just kind of—honestly checking out the state of the economy. Like, there's a lot of really interesting companies out there, and some interesting problems to solve. And, you know, trying to spend some of my time learning more about what companies are up to nowadays. So yeah, if you got some interesting problems, you know, you can follow my Twitter or go to LinkedIn if you want some great, you know, business hot takes about, you know, shitposting basically.Corey: Same thing. Pete, thanks so much for joining me, I appreciate it.Pete: Thanks for having me.Corey: Pete Cheslock, startup advisor, professionally unaffiliated, and recurring re:Invent analyst pal of mine. I'm Cloud Economist Corey Quinn and this is Screaming in the Cloud. If you've enjoyed this podcast, please leave a five-star review on your podcast platform of choice, whereas if you've hated this podcast, please leave a five-star review on your podcast platform of choice along with an angry comment calling me a jackass because do I know how long it took you personally to price CloudWatch RUM?Corey: If your AWS bill keeps rising and your blood pressure is doing the same, then you need The Duckbill Group. We help companies fix their AWS bill by making it smaller and less horrifying. The Duckbill Group works for you, not AWS. We tailor recommendations to your business and we get to the point. Visit duckbillgroup.com to get started.Announcer: This has been a HumblePod production. Stay humble.

What Works II DEB: I wanted to talk about Marijuana PETE: Well. Who doesn't? DEB: Exactly! PETE: You live in New York man, you can do anything you want! Ohio they'll string you up but yeah...so what about pot? DEB: Well first of all I learned that it doesn't cause stroke the way cigarettes do....cigarette smoking...it's really good for treating other effects beyond the spasticity and things like that. It's more like anxiety, anger, sadness, frustration, hopelessness, fear, depression types of feelings which I think is really important because if people are feeling those negative types of emotions then it's harder to participate in your rehabilitation. PETE: I've done some talks in Colorado recently and you know there's often therapists from every different kind of facility and I'm like, hey does anybody here um work in skilled nursing....and yeah, yeah they do... so um, are they allowed to smoke pot, I mean like you know, these are people they're adults... can they smoke pot? They go, yeah, yeah, they can smoke pot. I go, how does that affect rehab? Well they don't want to go. They just say no... DEB: They're too chill? PETE: They say no I'm not going anywhere. That's the downside. EPISODE SUMMARY: In this episode of NOGGINS & NEURONS: Stroke and TBI Recovery Simplified, Pete and Deb talk about interventions that do work. In part II we covered: Subconscious mind and stroke recovery Dysarthria Resistance to new ideas, working through it and moving into acceptance The role of research to help us leave our comfort zones Combining interventions to drive neuroplasticity, create home programs and the importance of the therapist/client relationship Letting go of the old you as a means of evolving and progressing through recovery E-stim, functional e-stim and functional improvements along with how to uncomplicate it so therapists use it more Small group of interventions that work and often work better when combined together Acupuncture, acupressure and dry needling along with muscle vibration in stroke recovery Task specific training, the LEAPS Trial, Modified Constraint Induced Therapy, gait and ambulation Mind-Body interventions and Hippo Therapy can improve balance Brain-Computer Interface to improve UE function following stroke Sensory brain areas are neuroplastic and re-training improves joint position sense, light touch, 2-point discrimination, and better Berg Balance scores Physical activity as a cognitive intervention for stroke recovery Marijuana to reduce neurotoxicity and pain as well as decrease depressive and anxiety symptoms You'll hear more clinical reasoning in action in this second episode of what works as Pete and Deb talk about some commonly used interventions and a few that are less common and what the research says. We talked more about interventions that work well together, creating home programs and novelty in the rehab process. As always, we want to hear your top takeaways! LINKS TO ARTICLES, BOOKS AND OTHER IMPORTANT INFORMATION: Bolognini, N., Russo, C., & Edwards, D. (2017). The Sensory Side of Post-Stroke Rehabilitation   Restorative Neurology and Neuroscience (34) 4. 571-586 doi: 10.3233/RNN-150606 Hsieh, Y., Lin, Y., Zhu, J., Wu, C., Lin, Y., & Chen, C. (2020). Treatment Effects of Upper Limb Action Observation Therapy and Mirror Therapy on Rehabilitation Outcomes After Subacute Stroke: A Pilot Study Behavioural Neurology, vol. 2020, Article ID  6250524, 9 pages, 2020. https://doi.org/10.1155/2020/6250524 Ji, H., & Yu, L. (2020). Effect of Yoga Exercise on Cognitive Ability and Motor Function Recovery in Stroke Patients Behavioral Neurology https://doi.org/10.1155/2020/6250524 Lyu, D., Lyu, X., Zhang, Y., Ren, Y., Yang, F. Zhou, L., Zou, Y. et al (2018). Tai Chi for Stroke Rehabilitation: A Systematic Review and Meta-Analysis of Randomized Controlled Trials Frontiers in Physiology 9; 983 doi: 10.3389/fphys.2018.00983 Zou, L., Yeung, A., Li, C., Chiou, S., Zeng, N., Tzeng, H., Wang, L, et al. (2018) Effects of Mind-Body Movements on Balance Function in Stroke Survivors: A Meta-Analysis of Randomized Controlled Trials International Journal of Environmental Research and Public Health. (15)6. 1292 doi: 10.3390/ijerph15061292 Vibration machine (Italian Site, has image of machine.) The Effects of Virtual Reality Training on Function in Chronic Stroke Patients: A Systematic Review and Meta-Analysis Dysarthria and stroke. The effectiveness of speech rehabilitation. A systematic review and meta-analysis of the studies. Immediate and long-term effects of BCI based rehabilitation of the upper extremity after stroke: a systematic review and meta analysis. Sensory retraining of the leg after stroke: systematic review and meta-analysis Endocannabinoids: A Promising Impact for Traumatic Brain Injury Cannabis & Stroke Risk  Chemicals in Marijuana May Help Stroke Victims Questions and Comments about the podcast: NogginsAndNeurons@gmail.com DONATE TO NOGGINS & NEURONS: Donate to Noggins And Neurons and get an Allstar Pete Trading Card Using your PayPal app:   RESOURCES: Information about Pete's blog and book, “Stronger After Stroke: Your Roadmap to Recovery” 3rd edition:Blog: blogspot.com Book: Stronger After Stroke, 3rd edition Deb's OT Resources: Deb's OT resources The OT's Guide to Mirror Therapy Tri-Fold Mirror (US address only) Occupational Therapy Intervention: Scavenger Hunt Visual Scanning for Adults REQUEST TO BE A GUEST ON NOGGINS & NEURONS. If you're passionate about stroke recovery and have information or a story you believe will help others, we'd love help you share it on the show. Complete the guest request form below and let's see if we're a good fit!   Guest Request Form MUSIC: “Soft Inspiration” by Scott Holmes/Scott Holmes Music/scottholmesmusic.com ✨Google Podcasts  ✨iTunes    ✨Spotify

Links: Unconventional Guide to AWS Cost Management: https://www.duckbillgroup.com/resources/unconventional-guide-to-aws-cost-management/ Migrate from Oracle to Amazon Aurora: https://aws.amazon.com/getting-started/hands-on/migrate-oracle-to-amazon-aurora/ TranscriptCorey: This episode is sponsored in part by LaunchDarkly. Take a look at what it takes to get your code into production. I’m going to just guess that it’s awful because it’s always awful. No one loves their deployment process. What if launching new features didn’t require you to do a full-on code and possibly infrastructure deploy? What if you could test on a small subset of users and then roll it back immediately if results aren’t what you expect? LaunchDarkly does exactly this. To learn more, visit launchdarkly.com and tell them Corey sent you, and watch for the wince.Pete: Hello, and welcome to the AWS Morning Brief: Fridays From the Field. I am Pete Cheslock.Jesse: I’m Jesse DeRose.Pete: We’re coming at you again with some more listener questions from the Unconventional Guide to AWS Cost Management. I’m excited. People are listening to us, Jesse.Jesse: This is fantastic. I’m really excited that we have one fan. I’ve always wanted one fan.Pete: Well, two fans now. Maybe even more because we keep getting questions. And you can also be one of our Friends of the Pod by going to lastweekinaws.com/QA. And you can give us some feedback, you can give us a question and, like, will totally answer it because we like Friends of the Pod.Jesse: We may or may not enter you into a raffle to get a Members Only jacket that’s branded with ‘Friends with the Pod.’Pete: We should get some pins made, maybe.Jesse: Ohh…Pete: I think that's a good idea.Jesse: Yeah.Pete: So, what are we answering today, or attempting to answer for our listener, Jesse?Jesse: So today, we’ve got a really great question from [Godwin 00:01:20]. Thank you, Godwin, Godwin writes, “I truly believe that the system that I support is, like, a data hoarder. We do a lot of data ingestion, we recently did a lift-and-shift of the system to AWS, we use an Oracle database. The question is, how do I segregate the data and start thinking about moving it out of traditional relational databases and into other types of databases? Presently, our method is all types of data goes into a quote-unquote, ‘all-purpose database,’ and the database is growing quite fast. Where should I get started?”Pete: Well, I just want to commend you for a lift-and-shift into Amazon. That’s a Herculean feat, no matter what you’re lifting and shifting over. Hopefully, you have maybe started to decommission those original data centers and you don’t just have more data in twice as many locations.Jesse: [laugh]. But I also want to call out well done for thinking about not just the lift-and-shift, but the next step. I feel like that’s the thing that a lot of people forget about. They think about the lift-and-shift, and then they go, “Awesome. We’re hybrid. We’re in AWS, now. We’re in our data center. We’re good. Case closed.” And they forget that there’s a lot more work to do to modernize all those workloads in AWS, once you’ve lifted and shifted. And this is part of that conversation.Pete: Yeah, that’s a really good point because I know we’ve talked about this in the past, the lift-and-shift shot clock: when you don’t start migrating, start modernizing those applications to take advantage of things that are more cloud-native, the technical debt is really going to start piling up, and the folks that are going to manage that are going to get more burnt out, and it really is going to end poorly. So, the fact you’re starting to think about this now is a great thing. Also, what is available to you now that you’re on AWS is huge compared to a traditional data center.Jesse: Yeah.Pete: And that’s not just talking about the—I don’t even know if I’ve ever counted how many different databases exist on Amazon. I mean, they have a database for, at this point, every type of data. I mean, is there a type of data that they’re going to create, just so that they can create a database to put it into?Jesse: Wouldn’t surprise me at this point.Pete: They’ll find a way [laugh] to come up with that charge on your bill. But when it comes to Oracle, specifically Oracle databases, there’s obviously a big problem in not only the cost of the engine, running the database on a RDS or something to that effect, but you have licensing costs that are added into it as well. Maybe you have a bring-your-own-license or maybe you’re just using the off-the-shelf, but the off-the-shelf, kind of, ‘retail on-demand pricing’ RDS—I’m using air quotes for all these things, but you can’t see that—they will just have the licensing costs baked in as well. So, you’re paying for it—kind of—either way.Jesse: And I think this is something also to think about that we’ll dive into in a minute, but one of the things that a lot of people forget about when they move into AWS says that you’re not just paying for data sitting on a piece of hardware in a data center that’s depreciating, now. You’re paying for storage, you’re paying for I/O costs, you’re paying for data transfer, to Pete’s point, you’re also paying for some of the license as well, potentially. So, there’s lots of different costs associated with keeping an Oracle Database running in AWS. So, that’s actually probably the best place to start thinking about this next step about where to get started. Think about the usage patterns of your data.And this may be something that you need to involve engineering, maybe involve product for if they’re part of these conversations for storage of your product or your feature sets. Think about what are the usage patterns of your data?Pete: Yeah, exactly. Now, you may say to yourself, “Well, we’re on Oracle”—and I’m sure people listening are like, “Well, that’s your problem. You should just move off of Oracle.” And since you can’t go back in time and undo that decision—and the reality is, it probably was a good decision at the time. There’s a lot of businesses, including Amazon, who ran all of their systems on Oracle.And then migrated off of them. Understanding the usage patterns, what type of data is going into Oracle, I think is a big one. Because if you can understand the access patterns of the types of data that are going in, that can help you start peeling off where that data should go. Now, let’s say you’re just pushing all new data created. And we don’t even know what your data is, so we’re going to take some wild assumptions here on what you could possibly do—but more so just giving you homework, really—thinking about the type of data going in, right?If you’re just—“I’m pushing all of my data into this database because someday we might need to query it.” That’s actually a situation where you really want to start thinking of leveraging more of a data warehouse-style approach to it, where you have a large amount of data being created, you don’t know if you’re going to need to query it in the future, but you might want to glean some value out of that. Using S3, which is now available to you outside of your data center world, is going to be super valuable to just very cheaply shove data into S3, to be able to go back in later time. And then you can use things like Athena to ad hoc query that data, or leverage a lot of the ingestion services that exist to suck that data into other databases. But thinking about what’s being created, when it is going into places is a big first step to start understanding, well, how quickly does this data need to come back?Can the query be measured in many seconds? Can it be done ad hoc, like in Athena? Does it need to be measured in milliseconds? What’s the replication that needs to happen? Is this very valuable data that we need to have multiple backups on?Is it queried more than it’s created? Maybe you need to have multiple replica reader databases that are there. So, all these types of things of really understanding just what’s there to begin with, and it’s probably going to be in talking to a lot of engineering teams.Jesse: Yeah, you can think about this project in the same way that you might move from a monolith to a microservice architecture. So, if you’re moving from a monolith to a microservice architecture, you might start peeling away pieces of the monolith, one at a time. Pieces that can easily be turned into microservices that stand on their own within the cloud, even if they’re running on the same underlying infrastructure as the monolith itself within AWS. And then, as you can pull those pieces away, then start thinking about does this need to be in a relational database? Does this need to have the same amount of uptime and availability as the resources that are sitting in my Oracle Database right now?All those things that Pete just mentioned, start thinking about all of those components to figure out where best to pull off the individual components of data, and ultimately put them in different places within AWS. And to be clear, there’s lots of great guides on the internet that talk about moving from your Oracle database into, gosh, just about any database of choice. AWS even has specific instructions for this, and we’ll throw a link in the [show notes 00:09:02].They really, really want you to move this data to RDS Aurora. They go through painstaking detail to talk about using the AWS schema conversion tool to convert your schema over; they talk about the AWS database migration service to migrate the data over, and then they talk about performing post-migration activities such as running SQL queries for validating the object types, object count, things like that. I think that a lot of folks actually don’t know that the database migration service exists, and it’s something worth calling out as a really powerful tool.Pete: Yeah, the Amazon DMS service is honestly I think, a super-underrated service that people just don’t know about. It has the ability to replicate data from both on-premises databases to Amazon databases but also databases already running on Amazon. You could replicate from a database running on EC2 into Aurora. You could replicate that into S3—you know, replicate data into S3 that way, bringing things into sync—replicate that data into S3, and then maybe use it for other purposes. It can replicate data from DocumentDB into other sources.So, they’re clearly doing a big investment in there. And to Jesse’s point, yeah, Amazon really wants this data. So, talk to your account manager as you’re testing out some of these services. Do a small proof of concept, maybe, to see how well it works, if you can understand the queries, or you can point your application over at an Aurora database with some of this data migrated in; that’s a great way to understand how well this could work for your organization. But as Jesse mentioned, they do want that data in Aurora.So, if it turns out that you’re looking at your—you know, migrate some data in there, and it’s starting to work, and you’re kind of getting a feel for the engineering effort to migrate there, stop. Talk to your account manager before you spend any more money on Aurora because it’s very likely that they can put together a program—if a program doesn’t already exist—to incentivize you to move that data over; they can give you subject matter expertise; they can provide you credits to help you migrate that data over. Don’t feel like you have to do this on your own. You have an account team; you should definitely reach out to them, and they will provide you a lot of help to get that data in there. They’ve done it for many of their other clients, and they’re happy to do it for you because they know that, long term, when you move that data to Aurora, it’s going to be very sticky in Aurora.You’re probably not going to move off of there. It’s a long game for them; that’s how they play it. So, check out those services; that could be a really great way to help you get rid of your Oracle addiction.Jesse: Yeah, and if you’re able to, as we talked about earlier, if you’re able to identify workloads that don’t need to run in a relational database, or don’t need to run in, maybe, a database at all, for that matter, stick that data in S3. Call it a day. Put them on lifecycle management policies or different storage tiers, and use Athena for ad hoc queries, or maybe Redshift if you’re doing more data warehouse-style tasks. But if that data doesn’t need to live in a relational database, there are many cheaper options for that data.Pete: Exactly. But one last point I will make is don’t shove it into MongoDB just because you want to have schema-less, or—Jesse: Please.Pete: —think about what you’re going to use it for, think about what the data access patterns because there is a right place for your data. Don’t just jump into no-SQL just ‘cause because you’ll probably end up with a bigger problem. In the long run.Corey: If your mean time to WTF for a security alert is more than a minute, it's time to look at Lacework. Lacework will help you get your security act together for everything from compliance service configurations to container app relationships, all without the need for PhDs in AWS to write the rules. If you're building a secure business on AWS with compliance requirements, you don't really have time to choose between antivirus or firewall companies to help you secure your stack. That's why Lacework is built from the ground up for the Cloud: low effort, high visibility and detection. To learn more, visit lacework.com.Pete: So Jesse, I’m looking at our list of questions. And it turns out, we have another question.Jesse: Ohh.Pete: Two questions came in.Jesse: You like me, you really like me!Pete: It’s so great. Again, you can also send us a question, lastweekinaws.com/QA. You can go there, drop in a question and feel free to put your name. Or not; you can be anonymous, it’s totally fine. We’ll happily answer your question either way. So Jesse, who is our next question from? What is this one about?Jesse: This one’s from [Joseph 00:13:19]. They write in, “Hey, folks. Love the show. Longtime listener, first-time caller.” Thank you. “I would love to know how people manage their costs in AWS Batch. Jobs themselves can’t be tagged for cost allocation, which makes things a bit complicated.” Lord Almighty, yes, it does. “How best should I see if the jobs are right-sized? Are they over-provisioned in terms of memory or compute? What’s the best way to see if EC2 is my better choice, versus Fargate, versus other options? How can I tell if the batch-managed cluster itself is under-utilized?”Pete: Oof. This is a loaded question with a lot of variables.Jesse: Yeah. And so we’re going to break it down because there’s definitely a couple questions here. But I want to start off with what AWS Batch is, just really quick to make sure everybody’s on the same page here. AWS Batch, effectively, is a managed service in AWS that schedules it and runs your batch computing jobs on top of AWS compute resources. Effectively, it does a lot of the heavy lifting configuration for you so you can just focus on analyzing the results of those queries.Pete: Yeah, exactly. And Batch supports a really wide variety of tooling that can operate this, and that’s why it’s hard for us to give, specifically, how you might optimize this, but I think some of the optimizations actually mirror a lot of the optimizations we’ve done with optimizing EMR clusters and things of that nature, where you’re running these distributed jobs. And you want to make sure that if you’re running straight off of EC2 instances, then you want to make sure that they are essentially maxed out. If the CPU is anything less than 100% for an on-demand instance, then there’s wasted, or there’s opportunity for improvement. And so making sure that your jobs are sized appropriately and balancing out memory and CPU so that, effectively, you’re using all of the memory and all of the CPU, that’s a real basic first step.But honestly, a lot of folks kind of miss out on that. They just kind of run a job and go off and do their own thing. They never really go back and look at those graphs. You can go to CloudWatch, they’re all going to be there for you.Jesse: Yeah. And to this point, there’s always an opportunity to make these workloads more ephemeral. If you have the opportunity to make it more ephemeral, please, please, please, please, absolutely do so. Unless your batch job needs to run 24/7. We’ve seen that in a few cases where they have, essentially, clusters that are running 24/7, but they’re not actually utilized regularly; the workloads are only scheduled for a short amount of time.So, if you don’t need those batch jobs running 24/7, please, by all means, move to more ephemeral resources, like Fargate. Fargate on Spot, Spot Instances in general, or even Lambda, which AWS Batch now supports as well.Pete: Yeah, it has some step function support, which is pretty interesting. Yeah, this is a great opportunity to aggressively—aggressively—leverage Spots, if you’re not currently today. The reality is that check out Fargate on Spot if you don’t need, like, a custom operating system, you don’t need a custom EBS volume size. If you do, then EC2 on Spot is probably the best option that you really have. But really do not want to be running anything on on-demand instances. Even on-demand instances with a really good savings plan, you’re still leaving money on the table because Spot Instances are going to be a lot cheaper than even the best savings plan that’s out there.Jesse: And I think that’s a good point, too, Pete, which is if you do need to run these workloads on-demand, 24/7, think about if you can get away with using Spot Instances. If you can’t get away with using Spot Instances, at least purchase a savings plan if you don’t do anything else. If you take nothing else away from this, at least make sure that you have some kind of savings plan in place for these resources so that you’re not paying on-demand costs 24/7. But in most cases, you can likely make them more ephemeral, which is going to save you a lot more money in the long run.Pete: Yeah, exactly. That’s the name of the game. I mean, when we talk to folks on Amazon, the more ephemeral you can make your application—the more you can have it handle interruption—the less expensive it will be to operate. And that goes from everywhere from Spot Instances and how they’re priced, right? If you just get a normal Spot Instance, it will have a really aggressive discount on it if you need zero time in advance before interruption.So, if that instance can just go in at any second, then you’ll get the best discount on that Spot Instance. But if your app needs a little time, or runs for a defined period of time—let’s say your app runs for one hour—you can get a defined duration Spot of one hour, you’ll get a great discount still and you’ll only pay for however long you use it, but you will get that resource for one whole hour, and then you’ll lose it. If that’s still too aggressive, there’s configurable options up to six hours. Again, less discount, but more stability in that resource. So, that’s the trade-off you make when you move over to Spot Instances.Jesse: So, I also want to make sure that we get to the second part of this question, which is about attributing cost to your AWS Batch workloads. According to the AWS Batch documentation, you can tag AWS Batch compute environments, jobs, job definitions, and job queues, but you can’t propagate those tags to the underlying resources that actually run those jobs. Which to me, kind of just defeats the point.Pete: Yeah. [sigh]. Hashtag AWS wishlist here. You know, again, continuing to expand out tagging support for things that don’t support it. I know we’ve seen kind of weird inconsistencies, and just even, like, tagging ECS jobs and where you have to tag them for they’re to apply.So, I know it’s a hard problem, but obviously, it’s something that should be continually worked out on because, yeah, if you’re trying to attribute these costs, you’re left with the only option to run them in separate Amazon accounts, which solves this problem, but again, depending on your organization, could increase just the management overhead of those. But that is the ultimate way. I mean, that is the one way to ensure 100% of costs are encapsulated to a service is to have them run in a dedicated account. The downside being is that if you have a series of different jobs running across a different, maybe, business units, then obviously that’s going to break down super quick.Jesse: Yeah, and it’s also worth calling out that if there’s any batch jobs that need to send data to different places—maybe the batch job belongs to product A, but it needs to send data to product B—there’s going to be some amount of data transfer either across regionally or across accounts in order to share that data, depending on how your organization, how your products are set up. So, keep in mind that there are potentially some minor charges that may appear with this, but ultimately, if you’re talking about the best ways to really attribute costs for your AWS Batch workloads, linked accounts is the way to go.Pete: Yeah. If you need attribution down to the penny—some of our clients absolutely do. For invoicing purposes, they need attribution for business unit down to the penny. And if you’re an organization that needs that, then the only way to get that, effectively, is segmented accounts. So, keep that in mind.Again, until Amazon comes out with the ability to get a little bit more flexible tagging, but also, too, feel free to yell at your account manager—I mean, ask them nicely. They are people, too. But, you know, let them know that you want this. Amazon builds what the customers want, and if you don’t tell them that you want it, they’re not going to prioritize it. I’m not saying if you tell them, you’re going to get it in a couple of months, but you’re never going to get it if you don’t say anything. So, definitely let people know when there’s something that doesn’t work the way you expect it to.Jesse: Absolutely.Pete: Awesome. Wow. Two questions. I feel it’s like Christmas. Except—Jesse: [laugh].Pete: —it’s Christmas in almost springtime. It’s great. Well, again, you, too, can join us by being a Friend of the Pod, which Jesse really loves that one for some reason. [laugh].Jesse: Yeah. Don’t know why, but it’s going to be stuck in my brain.Pete: Exactly. You too can be a Friend of the Pod by going to lastweekinaws.com/QA and you can send us a question. We would love to spend some time in a future episode, answering them for you.If you’ve enjoyed this podcast, please go to lastweekinaws.com/review. Give it a five-star review on your podcast platform of choice, whereas if you hated this podcast, please go to lastweekinaws.com/review and give it a five-star rating on your podcast platform of choice and tell us why you want to be a Friend of the Pod. Thank you.Announcer: This has been a HumblePod production. Stay humble. 

It’s that time of year as college students start or return to school. They may think they know it all, but really know nothing. How many students does it take to change a lightbulb or turn the heat on? It’s time to grow up in the real world! Today’s guest is Peter Tverdov of Tverdov Housing. Although student rentals are management intensive, Peter actually enjoys dealing with students. It’s prepared him to take on other types of tenants to diversify and grow his business.  You’ll Learn... [02:18] Rutgers University: Becoming a landlord in New Brunswick and loving it. [02:53] Student Housing Side Hustle: Accumulate more and manage them for others. [03:24] Hindsight is 20/20 in 2020: Bad timing to start business and quit day job to grow. [04:41] Decision to deal with students and student housing led to diverse tenant groups. [06:15] Peter’s Portfolio: 65-70% student rentals, 15-20% low-income families, 5-10% middle-class/workforce housing. [08:10] Onboarding Students: Educate and set expectations to limit excuses later on. [11:00] Happy Tenant, Happy Owner: Second largest lead generator is tenant referrals. [12:57] Broken Windows Theory: Dumpy/dilapidated areas attract crime and trouble. [13:45] Tverdov Renovation Consultants: Improve properties to attract better tenants. [14:47] Avoid or Acquired Taste? Riches are in the niches as a student rentals landlord. [16:33] Other Options? Rules/laws for room rentals, individual leases, boarding houses. [20:55] Responsibility: How to be landlords and hold each other accountable. [23:35] What’s next for Tverdov Housing? Track KPIs, achieve goals, and grow doors. Tweetables Landlord Business: Slowly and discreetly acquire more properties, get your hands dirty, and deal with people. “In business, it’s good to diversify.” “Managing student rentals, it really gets you battle-tested for managing other tenants.” “We’re not for everybody. We’re fair, but firm.” Resources Tverdov Housing Tverdov Housing on Instagram DoorGrow on YouTube DoorGrowClub DoorGrowLive Transcript Jason: Welcome, DoorGrow Hackers, to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you’re crazy for doing it, you think they’re crazy for not because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change the perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show. All right, today's guests, I'm hanging out with Pete. I’m going to see if I can say your last name right, Tverdov. And I'm going to unmute you so you can actually respond to that. Did I say it right? Pete: That was awesome. Pete Tverdov of Tverdov Housing. Pete, before we get into the topic, I want to introduce you, have you introduce yourself a little bit, but we’re going to be talking about student rental properties and the title is The Cash flow and Chaos of managing student rental properties. That sounds kind of fun. Let's get into the cash flow and chaos after we hear a little bit about your background, how did you get into this, and tell everybody who's listening about Pete. Pete: Sure. Happy to be on the show, thanks for having me. I got into it, my wife and I moved back to the Central Jersey area about six years ago and in the process of moving back we were looking to buy a multi-family, live in one unit, and it brought us to New Brunswick, where Rutgers University is. We both went to school there, we both played sports there, became a landlord, and really enjoyed the process of becoming a landlord. As I wanted to try to accumulate more rentals, I had the idea to begin managing for the people as it's something I really enjoyed doing. I enjoyed just getting your hands dirty and dealing with people. I started to do that on the side a little bit in that neighborhood, very slowly, very discreetly, and then little by little, I was just nibbling and getting more people under management because I was doing a pretty good job. About a year ago, it grew into a large enough business where I was at a crossroads with my regular job. I said you know what? I feel pretty good about this. I'm just going to dive in and really try to grow my business. That has been a bit rocky because I did that officially in January. I say rocky because of Coronavirus. The business has been good. It's been fun. I enjoy being an entrepreneur. I enjoy trying to grow the business each day and I'm happy to be here. Jason: Yes. Looking back, hindsight being 20/20, pun intended, so here in 2020, would you have chosen, if knowing that this would all happen to start your business, would you still have done it? Pete: It's such a hard question to answer because I had grown a business enough to that point where there was really no turning back. I just had a breaking point because I was working 24 hours a day. I was working in New York City. So it's just really challenging to try and juggle both really and I couldn't at that point. So was the timing the best? Definitely not. Jason: Okay, so you started getting into doing this yourself. Then you started doing it for others. At what point did you start deciding it would be a good idea to deal with students? I mean, this is your college hometown, right? It's a college town, your wife's college town, there is a college there, and it seems probably pretty obvious that you should be dealing with student housing. Were you already dealing with students with your own rentals? Pete: Yeah, that's exactly right. Every rental we owned was student housing and something I had a lot of familiarity with. For a while, I didn't want to do anything else but student rentals. About a year ago, I started to diversify that and try to pick up other tenant groups to manage, which we have, thank God, because in business it's good to diversify. But for me, anything with investing or my advice to anybody with investing is to go with what you know or the areas you know and then you branch out from there, which is what we did with the business. Again, student rentals are something we're super familiar with, super comfortable with and now we're at the point where we're happy with how much we have in the business and we're actively looking. We don't really even market too heavily to student rental landlords just because we have a sizable amount and because we know what chaos comes with managing them and how management-intensive they could be. As I said, we're trying to diversify the business. In addition to being well-known for student rentals, we want to [...] things as well. Jason: Give listeners a little bit of idea of what your portfolio looks like right now. Pete: Of our business, 65%–70% is student rentals. Another 15%–20% is lower-income families, and then the remainder is middle-class housing, workforce housing, yuppies. What's funny is managing student rentals really gets you battle-tested for managing other tenants because the other tenant groups really are a breeze. Student rentals are very management-intensive because they're 18- to 21-year-olds, so young adults. Most of them know nothing and what's worse is they think they know something which compounds the problem sometimes. I was the same way and maybe you were as well. You don't really know much when you're that age. They don't understand that they're responsible for changing light bulbs or if the heat's not working in the house, maybe it's because no one checked to see if the thermostat was even on. Stuff like that is really low hanging fruit. Jason: Yeah. Like you're saying, before anybody has kids or business or any of that, we're all experts on parenting, business, and how the world should work. I love it when my teenagers tell me how to be a better parent. I love that. That's always a really fun conversation. Everyone's an expert until they do it and then they realize they're like everybody else winging it and trying to figure out what's next. You started with the most difficult type of housing. It sounds like it was more difficult renters and tenants than anything else. It felt like it was just downhill. From there it was easier. Pete: That's right. As I said, it's just a very management-intensive group. What do I mean by that? They never signed a lease before. Some of them have never paid rent before. They've never written a check before or they don't know how to pay rent online. They don't really know what a security deposit is. They don't really know the process of getting it back. I think our business grew because we really tried to help the tenants understand the process and how it works. With students, for example—I would recommend this to anyone managing students—we usually sit down with them for 20–30 minutes and go over the lease with them, go over all the points in the lease, and set expectations upfront. We try to really limit the excuses for a tenant, like I didn't know that. What do you mean? We sat with you in person and went over that. That's one of the things. Some of the management items that I was talking about beat the properties up a little bit more so the repairs are higher and things always just mysteriously break. It was never their fault like something happens and nobody wants to admit it. I got a taste for managing other tenant groups. I realize how intense the students are and it's not a bad business to be in because, for people who own the rentals, the cash flows are higher, but with higher cash flows comes a set of their own problems. Jason: Aren't these things just common in property management in general? Like the advantage of you having a business like this is that you're almost educating these people through the process. That would work well for any new client because even if they've rented multiple places before, you have your way of doing things, they still may not want to follow things, have misinterpreted things, or they may claim they read the lease and understand it. All of these things sound like a really good baseline for how to onboard all of your renters. Pete: What I realized early on with the way I conduct business is we're not for everybody and that's because we believe in holding people accountable. One of the gentlemen who help me out hits me on the head. We're fair but firm. We're very fair. We don't try to nickel and dime people, but we're firm. The lease is the lease or the code is the code and this is what we have to do in order to ensure that the property is running smoothly, to ensure you're happy as a tenant, and to ensure the owner’s happy as a client. As a property manager, you're getting hit from both sides a lot of the time, but that's what I try to do to tenants. Honestly, we try to give as good of an effort as we can to make sure that they have a good experience because what's pretty cool about our business is the second-largest lead generator for us is tenant referrals which is awesome. That's free. That costs nothing. For that to be number two, it tells me we're doing something right, even though it feels like we're not sometimes and I want to continue that. Jason: So tenant referrals, meaning the tenants are referring the owners to your company? Pete: They're referring other tenants to our company. It makes the amount of advertising we have to spend on finding tenants less. Jason: Right. Do you feel like that's a challenge and student housing is finding people to rent the place? Pete: I must say it depends on the demographic. What's unique about Rutgers is it's split between two towns in New Jersey, New Brunswick, which has a population of 55,000 and Piscataway, which (I couldn't tell you) maybe it's 30,000 or 50,000. It's not a small town either, but it’s very old homes, especially in New Brunswick. What a lot of landlords in that area are realizing is people don't want to live in a dump anymore. They're willing to pay a little bit more. The house needs to be nicer. That's what we've done with stuff that we own. Most of the clients we have take a little bit of convincing, but after a while, they trust us to spend some money on their property because it makes it easier to rent. I went out to Rutgers, I majored in Criminal Justice. There's this thing called Broken Windows Theory and for people who don't know that it is, it's what it sounds like. When you have a dilapidated area with a bunch of broken windows, it attracts crime and attracts people looking to get into trouble. When you have that same place and it's all cleaned up, all the windows are fixed, the outsides painted, and the sidewalks are redone, the crime statistically usually has gone away. We took that same theory with housing. So if you have a dump, you're likely going to attract tenants who don't care about the place. They're just going to beat it up even more. If you have a nice place, you usually attract nice tenants, and even with the students being as management-intensive as they are, we've found that to be true. What's interesting is within the property management business—I did this right in the middle of the pandemic—I said screw it. I’m going to start another business. So we created what's called Tverdov Renovation Consultants. We basically do project management for our clients. We tell them, listen, we could help you rehab, bathrooms, kitchens, additions, roof siding, blah-blah-blah. We have a whole portfolio of the work we've done on Instagram. That's been good for the owners because it makes their property easier to rent. They get more rent and make our property worth more. We're happy because we've found a better tenant. The town's happy because we've improved the property and it's really a win and win across the board. It's just a matter of convincing other owners who are stuck in having lipstick on a pig or they don't want to spend a lot of money on properties and now we're at the point where I don't really want clients like that. I want clients who want to have a well-run property. Jason: Got it. Do you feel like tenants are an acquired taste in property management? My perception as other property managers avoid dealing with student housing, with those types of tenants. They feel like they're more difficult to manage unless they feel like in their market they need to. Do you feel like you would maybe in general convince these property managers in some way that there is a benefit or an upside to focusing on a tenant or better student housing? Pete: I think if you know it and you know the area, you could do very well and we have done very well. If you don't know it, it's pretty obvious to people who don't know it. You get beat up because you don't know what you're doing. The challenging part is every school is different across the country. When tenants begin to look when the lease is run and there are a plethora of questions to answer. If I was going to invest in another state, it's a whole different set of rules if you're going to try to be a student rental landlord in that state. For me, the riches are in the niches. Again, that's what I knew and I grew it. Now we're looking at expanding into more residential options. Still single family, two to four families, small apartment buildings. That's our bread and butter. That's all we want to do. We don't do commercial. We don't do HOAs or anything like that. That's what we focus on and that's what we're trying to grow. Jason: Now, the financial upside that I've heard from some people that get into this is some have convinced owners to take a property and to rent it out the room instead of renting out the entire property to a family. They're renting it out by the room in these sorts of situations and they're able to get a lot more rent at the property by doing such. That seems to be that there would be a potential financial upside, especially if your fee structure is based on percentages or each renter rather than being just connected to a flat fee per unit, for example. Pete: Maybe it's a little off-topic. We charge a percentage base and we'll always do that. I really don't know how property managers make money doing a flat fee. I think it's tough so we'll always be a percentage-based company. Renting by the room is, you're correct, that is the way to make more money. Again, I keep saying this phrase, but management-intensive, renting by the room is even tougher for students where we put groups together. We put a bunch together last year. We had a kid from Singapore, a kid from India, a kid from New Jersey, a kid from Pennsylvania and they don't know each other. When you're renting by the room, it's even worse because now you almost have four tenants, not one tenant, or six tenants, or however many people you're putting in a house. That creates its own set of problems. Again, this is based on jurisdiction. You cannot do individual leases because that would be considered a boarding house unless it's a licensed boarding house, you really shouldn't be doing that. We don't do that, so we had to rent by the room. We put them all on one lease. We say, listen, you're all legally responsible for damage in the common areas, and so on and so forth. It's challenging. What's funny, though, is I actually want to try to add a boarding house to manage because we get a lot of people just looking for a room. Just looking for a place to live, not just an apartment or a studio. We get a lot of inquiries like, hey, do you have a room? Jason: Is this boarding house law something that is common in just your state? I haven't heard from this, but it makes sense. Is this in other states as well? Pete: I'm just speaking about New Jersey. Jason: Interesting. It's something to those listening if they haven't dabbled in student housing or they're thinking of renting by the room or something like that, they probably should check with their local laws to make sure whether or not there's any sort of rules against doing such. In New Jersey, what does it take to become a boarding house then or to set one of those up? Is it on an individual property basis or is it a licensing sort of deal as a property manager? Pete: You need to have (they call it) a rooming house or a boarding house, but you need to have a license displayed in the property. I've been in enough of them. It's pretty obvious if it's a boarding house or rooming house because there'll be a kitchen with a bunch of labels on each cabinet. Like, this is John's cabinet, this is Max's cabinet, this is Pete's cabinet, and there's a common bathroom or two. Then all the other doors are just shut with locks on it. If you can imagine, that's what they look like and then they'll have a big license in the hallway or stairwell that'll say this is a New Jersey-licensed rooming house or boarding house. That's how they work. But again, those are challenging. Jason: Do you find in those situations you end up sort of having to play parent between roommates? Pete: Yes and no. We had to do it last year with a group of girls we put together. It was a little aggravating and a lot of girl drama. I stepped in and I spoke with them and tried to give them some words of wisdom. Most of the time, what we do with student rentals, I don't care how many kids are living in the house. It's one tenant and I explain to them you're all jointly responsible for rent and all the lease obligations. So it doesn't matter how many people are in the house. At the end of the day, you guys are all responsible. The other thing is we manage nearly 400 students. Some of these are very nice people, but we can't talk to 400 people. It's just not possible. What we do is we make a house manager or captain, or house mom, dad, whatever you want to call it and that's the person we speak with now regarding any tenant issues. We usually recommend somebody else in the house be responsible for submitting rent. So rent is submitted in one payment. Someone else is responsible for utilities. What it teaches these guys is responsibility, how to be accountable, and hold their roommates accountable. In theory, what's cool is we are actually teaching them how to be landlords because they have to make sure rent is collected. Something's broken, they have to find out who did this. Now, I have to tell Pete or for repairs to be made, coordinate with them to schedule it. That's why I said earlier, we're not for everybody because somebody who needs their hands held or mommy and daddy to wipe their mouth, we're not for you and that's okay. Our system usually winds up attracting tenants who are a bit more mature, a bit more independent and if they're not, they get there by the time that they're done with us. Jason: Right, I like it. You’re part of their educational process of the real world. That might be a good selling point for getting tenants. We'll make your kid actually grow up. I hope you're excited about that. I'm serious. I'd be like, I'm going to send my kids into one of those properties, right? Pete: I might try that. Jason: It's worth a shot. Pete, I think this is really interesting. I'd be interested in those that are doing student housing when you see this posted or see this inside the DoorGrow Club Facebook group at doorgrowclub.com. I'd be interested to see other people's comments on what you're doing, what's working, and what's not working in student housing. This started as a side hustle. It's evolved into a business doing it for other people. It's now growing. What do you feel like is next for you and your business moving forward? Pete: What I start to do from watching podcasts like this is to track our KPIs, which is really cool. I love that side of the business. It's like a quarterly visit if people think of it. It helps me to understand where we should be spending money, what's working, what's not, and tweaking things. Because we're in the growth stage right now, 100 doors is cool, but there are people who are 500, 800. Those are huge, huge companies. We won't get there overnight, I understand that. The goal of my business is we want to cover three counties in New Jersey. So we're based in Central New Jersey. If anybody from New Jersey is listening to this, Central New Jersey really doesn't exist. That's the inside joke. But the three counties we cover probably have about 2.6–3 million people in them. Those are within a 30-minute radius of our office, so we're very comfortable being within a 30-minute radius of home base. The goal is just to continue to add doors under management. Single-family, 2–4 families, small apartment buildings in those areas. There are certain towns that are rental towns and certain towns that are not. What we've been doing on the marketing side, we've been working on SEO, we have our own website, we blog, we're very active on Instagram, then we do mailers, which maybe not a lot of people do. We do some cold calling, too, and just constantly trying to tweak and figure out what's working, what's not, and how we could generate more leads. On top of the property management, because in New Jersey you have to have your real estate license. So right now, me and a few people, my team are realtors. Eventually, I would like to have my own brokerage. Really rural housing is three companies, so it's realty services—we can help you buy and sell investment properties; that's all we do—we could help you manage the property, or we could help you rehab the property. We have some clients where we help them buy the property, we help them rehab the property, and then we manage the property. Then, one day when they want to sell it, we'll sell the property. That's about creating multiple income streams for our business within the same business, which I think is pretty cool. Jason: Makes sense. Cool. Pete, it's been great having you on the show. I wish you success at Tverdov Housing and for those that are listening, if you have questions about student housing or getting this, or if people listening are interested in getting a place from you or whatever your goal is, how can they get a hold of you? Pete: My website is tvdhousing.com and also my Instagram, Tverdov Housing. You could look at the last name on the DoorGrow Show. It's Tverdov Housing. We're constantly posting what we're doing on Instagram, so it's usually properties we're rehabbing, or some crazy management story, about just some crazy stuff that's happened and probably will happen in the future, stuff that we're selling, so we're very active on there. Jason: Cool. All right. Pete, thanks for coming on the show. Pete: Pleasure being on. Jason: All right. Those of you that are interested in getting into student housing or that have been dealing with student housing, I'd be really curious, like I mentioned, to see your feedback inside the DoorGrow Club Facebook group so inside the DoorGrow Club. Let us know what you find is working or not working. It sounds like a challenging thing. I think any of us that have gone to college and remember some of the crazy stuff that either we did or that we saw other people doing, recognize that could be a really challenging thing, but it's necessary. Like their student housing is a need. It'll be interesting to see how things go moving forward with COVID-19 and Coronavirus, and things shifting to online. It will be interesting. Check out the Facebook group, doorgrowclub.com. If you are interested in growing your business and your property management company, making some changes there, if you are feeling stuck, struggling, whatever, reach out to DoorGrow. Check us out at doorgrow.com We'd love to help you out. Until next time. To our mutual growth, Bye everyone. You just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet, in the DoorGrow Club. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead, content, social, direct mail, and they still struggle to grow. At DoorGrow, we solve your biggest challenge getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today’s episode on our blog at doorgrow.com. To get notified of future events and news, subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you’ve learned and start DoorGrow hacking your business and your life.

 Find out how to hit your stride and turn your business profitability around Learn how to overcome business struggles to stay afloat finding your own cadence on your business journey Discover how simple it can be to transform your business profits through Pete's framework Resources/Links: Grab Pete's book: Cadence: A Tale of Fast Business Growth Summary Pete Williams is an entrepreneur, advisor, and marketer who Forbes recently called, 'one entrepreneur today that every marketer should be modeling', while Inc. describes him as, a savvy marketing strategist. He's the author of 2018's Business Book of the Year, Cadence. In this episode, Pete shares how his framework helps business owners find their cadence in their business journey, turning their business profitability to grow sustainably and effectively. Check out these episode highlights: 01:25 – Pete's ideal client: Businessowners selling information, marketing online, or even selling consulting services. 01:56 – Problem he helps solve: Giving business owners a path to follow when it comes to growing profit.. 03:16 – Typical symptoms that clients do before reaching out to Pete: They get bogged down with tactics really quickly, as opposed to what's the strategy. 04:07 – Common mistakes people make when trying to solve that problem: They focus too much on traffic. 06:07 – Pete's Valuable Free Action (VFA): Stop thinking of your leads as being one bucket. And ask yourself the question, what is the micro commitment people are making between becoming a suspect in your business and becoming a buyer? 07:49 – Pete's Valuable Free Resource (VFR): Cadence: A Tale of Fast Business Growth Tweetable Takeaways from this Episode: “Stop thinking of your leads as being one bucket. Ask yourself the question, what is the micro commitment people are making between becoming a suspect in your business and becoming a buyer.” -@preneurClick To Tweet Info about our correspondent host: Travis has a background in sales, marketing, and strategy, and left the corporate world several years ago to start his own agency. As a copywriter by trade, his biggest skill is putting the right words, in front of the right people, at the right time. Travis has developed go-to-market strategies for grassroots apps to Fortune 500 and helped optimize up to $50k per day in Facebook Ad spend for one of the biggest startups in Asia. Transcript (Note, this was transcribed using a transcription software and may not reflect the exact words used in the podcast) Travis Bennett: 0:09 Hi everyone and welcome to another edition of Marketing The Invisible. My name is Travis and I'm rocking it to you out of Yangon in Myanmar, proving you can be anywhere in the world and actually build a successful business. I'm joined today by Pete Williams. Pete, a very, very warm welcome. Pete Williams: 0:22 Thanks for having me, really appreciate it. Travis Bennett: 0:24 So where are you hanging out in the world today? Pete Williams: 0:26 I'm in not so sunny Melbourne at the moment. It's the start of spring here but it's been a bit overcast and crappy weather, but beautiful Melbourne. Pete Williams: 0:33 Good. Good. It's always good for a coffee, right? Pete Williams: 0:37 Absolutely. Coffee, food, and sport. That's the, it's the place to be for that. Travis Bennett: 0:40 Excellent. So, for those of you who don't know Pete. I'm going to do some really quick. He's an entrepreneur, an advisor, primarily a marketer and Forbes just called him one entrepreneur that every marketer should be modeling. And Inc. describes him as a savvy marketing strategist. Just last year he wrote 2018's Business Book of the Year, Cadence. And Pete, it's just awesome that you've joined us on the show today. Pete Williams: 1:03 It'll be fun, let's do it.

Whoa Boy!!! OMG Entertainment Politics!! So this week the guys go all in on talking about the crossover of entertainment and politics, and how it seems you can’t have one without the other. Also those damn EA Loot Boxes It’s 2 Mikes a Beau and a Pete They are gonna talk about all the important … Continue reading Episode 21-Entertainment Politics AKA We know too Much AKA Damn EA Loot Boxes → The post Episode 21-Entertainment Politics AKA We know too Much AKA Damn EA Loot Boxes appeared first on GoTW Podcast.

Whoa Boy!!! OMG Entertainment Politics!! So this week the guys go all in on talking about the crossover of entertainment and politics, and how it seems you can’t have one without the other. Also those damn EA Loot Boxes It’s 2 Mikes a Beau and a Pete They are gonna talk about all the important … Continue reading Episode 21-Entertainment Politics AKA We know too Much AKA Damn EA Loot Boxes → The post Episode 21-Entertainment Politics AKA We know too Much AKA Damn EA Loot Boxes appeared first on GoTW Podcast.