 Aloha, and welcome to another edition of Condo Insider. You know about a third of our population in the state of Hawaii lives in some form of an association. And our show is specifically designed to inform board members and owners about association living. I do want to invite you to the conversation if you want to call our hotline. It can be called at 415-871-2474. Some association board members struggle with how to make their association operate efficiently, and they somewhat compare doing the work in-house or outsourcing and what do they do when they're managers on vacation, those types of things. So I've invited a very dear friend of mine, Mano Nguyen, who's the president, owner, founder, and king, I guess, of NK Management, a new company here in Hawaii, that helps associations deal with all sorts of problems. So I'd like to welcome Mano to the show. I've known him a long time. Welcome to the show. Nice to have you on, Richard. Tell us a little bit about yourself, personally. Well, I was born in Vietnam. I grew up in Texas and joined the military. Military brought me out here to Hawaii and finished my undergrad at HPU in business, been in property management ever since. And now I'm in the executive MBA program at UH. Well, that's a lot of hard work and also run a company. It's crazy. And just briefly tell us about your new company. Where did that come from? And where did you get the vision and what your objectives are? You know, I've had a lot of good mentors in the condo industry. Jim Merrow touched on properties. Richard Emory, Hawaii First, I was a vice president of the social, and then decided to go on my own because I understand what the homeowners need. So we opened up a community association staffing company, which has site management, janitor, landscaping, and some construction elements in it. And how's it going so far? You know, every entrepreneur's growing pains is that we're growing too fast. But it's a good problem. But just we want to maintain quality control. So I just want to watch growing too fast. And just as a general preface to start, I know that the laws are different in Hawaii with regard to a handyman and a general contractor. Can you kind of describe where the line is drawn between a handyman and a general contractor and whether or not a license is required? Right. That's a good question, Richard. I'm not a condo attorney, but a lot of condo attorneys will tell you that for association common element work, you want to be able to keep it under $1,000 if it's going to be handyman. Anything above should be a license contractor. So in simple terms, if it's $1,000 or less, then you could use a handyman. Absolutely. One of the things I found from my own experience was is that when you look at a handyman, you went into this problem of what is really an independent contractor versus an employee. And oftentimes associations have tried to take a person and put them on a regular contract weekly and they then would say, well, you're an independent contractor, so I'm not providing you medical. I'm not providing you workers comp. And if you read the papers recently, you saw that big hotel down at Waikiki that without knowing all the facts, similar experiences that the fines are very large if you just try to kind of circumvent paying your legal obligations by calling someone an independent contractor who's not an independent contractor. You kind of agree with that or? I wholeheartedly agree with that and we are very careful to follow the labor laws. Unfortunately some companies here do try to get around that. I think it's pretty black and white. You have to follow the labor laws. You cannot, you know, and it's really spelled out like you can't dictate, you can't dictate their hours and give them uniforms and call them an independent contractor because they would function under a job description of an employee, so you have to be very careful. So your people are employees of your company or you've subcontracted it, but the reality is you're following all the labor laws when you do the work you provide. Absolutely. All of our employees are on W-2, they're on payroll. From time to time in some of the construction we do, we might outsource here and there, but not much. Yeah. Okay, well let's talk about the types of services your company provides. What would you say the number one service you provide? I would say, you know, the gatekeeper into the community association staffing is the site management, right? So a lot of management companies here in Hawaii, they have property managers that often manage like 10 properties. We want to be on the front lines dealing with the owner's issues, whether it's household enforcement, dealing with the vendors and basically running the operations of a building, managing the security, the janitorial landscaping staff to make sure the quality control is met. So it's just running the operations of the building. And now are you doing that as a contractor or are you actually bringing to the table the employee who works on behalf of the association? Not the association employee, but your employee, but you're basically providing a labor service but providing a full-time resident manager or site manager, is a more vacation substitution? We are contracted on a monthly basis and depending on the needs of that particular association, oftentimes we'll be asked to do either 20 hours a week, site management maybe 20 hours a week, janitorial, it just depends on how big the building is. But there's another building we have, it's 349 units. We function as a site manager, we manage, we supervise their whole entire staff. And you know, we got pretty innovative last year by offering an admin assistant so we can hire them. We're connected in the condo industry so we can find qualified people to deliver the services. You know, we often come in and we hear our clients like, oh, our guy is so under-trained, he doesn't have vendor relationships, we want three bids for a project, he can't meet that for us. He needs admin help because he's weak in admin. So we can really find the right fit for the, whatever the association's needs are. So do you find that the core of your business on this particular category are medium-sized or smaller associations because they really can't afford the full-time, quote, resident manager or is it a little bit of everything or is there a particular market that is really kind of the core of that particular part of your business? I mean, obviously we prefer to staff a full-time position because those are easier to fill. There's some properties, handful of properties where they'll ask for 20 hours and so we'll find another bill in 20 hours so that employee can make their 40 hours. It's hard. I know associations want to cut costs but it is very challenging to say, well, we only need you for 15 hours a week and here in Hawaii if you hit 20 hours then you have to provide medical insurance. So they'll try to save costs but again it's really hard to fill so we try to obviously full-time is better. Yeah, but I can see smaller associations 20, 30, 40 units and the board is not that engaged at the small board. Basically, I like to have a manager Monday, Wednesday, Friday or Tuesday, Thursday or four hours a day because the size of the complex itself doesn't lend itself to a full-time position and I know it's hard to fill that job but I'm gathering you do provide that kind of service. We do. In fact, part of our staffing is constantly looking through resumes, trying to see where people are at, what their skill sets are and so we'll have a lot of people waiting in case something does pop up then we can say, hey, give you two weeks and come on. So we'll try to make it 20 hours here, 20 hours there to kind of make up the time but those are things that I have to factor in to make sure the company also has profit margin at the same time providing the services. And how about a situation where you have a larger project, for example, hypothetically, where their general manager and they have a full-time employee of their own, he's going on vacation for two weeks, do you have services that provide vacation coverage? We do interim management, we do it all the time and in fact, interim management can either be when they're on vacation or the transition from one manager to the next whether a manager resigned or got terminated. There's three properties we have. We came on as interim and then the client, the AOAO, actually asked us to service them full-time. So those are actually good opportunities for us. And how do you find the people? I mean, is it hard to find people who can, you know, I think in my experience this industry is not an easy industry. You have homeowner complaints and expectations and they all vary between board members. Is it hard to find people? It's not easy. I think you have to just know where to look. I have a very good business partner, Matt Connochiero. He's had 20 years of construction experience, lots of manpower experience. So we kind of vet prospects out together. But for me, I feel that I've had really good mentorship. I've taken lots of classes and I think if people are willing to come to work and be dedicated, committed, I can teach them condo management. It's not rocket science. And you know, one of the things I know that we used to preach anyway is that every association is different. I used to say it's charting the correct course. We're going to develop a plan just for you because frankly they're all different with different needs and different sizes and different problems. Do you do actually house rule enforcement because they're going to have their own house rules and do you do that as well as a part of this process? Absolutely. House rule enforcement, understanding the government documents from the bylaws to the declarations on who's responsible for what, insurance claims, house rules and that's all part of it. And that's actually an expectation all of our managers have to abide by. I'm assuming if you have a manager and he's not quite sure he's calling you and saying what do you recommend? You know, I say what did the doc say? Yes. So that's basically, and again, it's spelled black and white. What we try not to do, Richard, is selective enforcement. You know, you have some associations out there where there may be some board members on the board and they're like, well, we'll just let that one slide. So it's actually very hard to manage the property that way because then the board is delivering an inconsistent message to the rest of the owners. Those are hard to, so it's a habit, right? So you have to encourage them to break that habit. And it's not just us. We work as a team with the managing agent, the property manager. We have to work together to kind of break bad habits. One of the common complaints I used to hear was that a resident manager or the site manager, because he was the employee of the board, he would get supervision from the three, four, five, seven, nine board members and he was always frustrated because it would be inconsistent direction. You find by outsourcing it and having a contract, it helps mitigate that, that you don't have three or four or five people trying to tell you what to do or you're managing what to do, or do you find it's still the same problem? You know, I think whether they outsource it to us, whether they get a resident manager, an independent site manager, I think expectations should be laid out in the very beginning. If a board does have a history of micromanaging, having too many cooks in the kitchen, I think expectations should be set from the get-go and you'll most likely have less problems down the road. So in general, in summary, on this part of your company, you provide full-time slash part-time site management resident managing. You also provide interim management in case they've lost their resident manager or they have a manager on vacation. And you do all the normal work that a normal resident manager might do with respect to that. And you carefully vet your employees and provide all the common labor loss, and that's kind of a summary of that portion of it. That is, definitely. Okay, we're going to take a short break. We'll be right back on Condo Insider and talk more about the other options for boards and owners with regard to outsourcing and meeting the challenges of association living. Hey, everybody. My name is David Chang, and I'm the new host of the new show, The Art of Thinking Smart. I'm really excited to be able to share with you secrets on giving yourself a smart edge in life. We're going to have awesome guests and great mentors of mine from the political, military, business, nonprofit, you name it. So it's something for everybody. Aloha. My name is Danelia D-A-N-E-L-I-A. And I'm the other half of the duo. John Newman, welcome. We are co-hosts of a show called Keys to Success, which is live on the ThinkTech Live Network series, weekly on Thursdays at 11 a.m. We're looking forward to seeing you then. Aloha. Hello, this is Martin Despeng. I want to get you get excited about my new show, which is Humane Architecture for Hawaii and Beyond. We're going to broadcast on Tuesdays, 5 p.m. here on ThinkTech Hawaii. Welcome back to Condo Insider. We're talking to Mano Nguyen about outsourcing opportunities for associations. Certainly, boards have a responsibility to maintain the property. But oftentimes, things happen, or the size of the condo itself may make it difficult to hire and find reliable people. And outsourcing of various activities has become somewhat commonplace for certain projects in the industry. And I have my good friend, Mano Nguyen, here from NK Management, who's talking about his company. Mano comes from the Association Management Industry. It has a deep set of skillset with respect to solving association issues. We have been talking about outsourcing site management rather than management services. But I want to kind of roll into some of the other things you provide and tell us about your janitorial services. Yeah, thanks again for having me on the show, Richard. So the janitorial service that we offer, again, is understanding condo boards. Oftentimes, we come into a new client, they're like, we don't know what our guy does. We don't know where he is. We don't know when he comes and we don't know what he does. And the place looks a mess. So I develop a scope of work that the board agrees on. And I basically take that scope of work and make it into a checklist. So when our guys are on site, they check off and they sign off on exactly what they do when they're there. So there's never any question whether the boards change hands. They understand what they're paying for. And do you give those reports to the board? Every single board meeting, some boards are different. They might just check it. Small buildings, they don't meet very often. But yeah, those are easily available. So let's say you have that scope of work and you have people on site. And all of a sudden, there's a pipe to burst and a plumbing problem. Which means you maybe would drop what you're doing and address the challenge. You do that kind of work as well. What's interesting is that we're not just a regular janitorial company. We're a janitorial company and a landscaping company and a maintenance company that has condo management experience. So the property manager that works for the managing agent, there's like, hey, is your guy on site? Can they help post notices? Can they help with this and that? If I'm nearby or my other manager's nearby, we can come through and we can help with water mitigation stuff as well. So that's another thing about insurance. We can do water mitigation and insurance claims very efficiently. So kind of where I was leading to that, you have a scope of work and you know that in the hallway, you're going to vacuum it once a day. I'll make this up as an example and they're going to clean the rails. And so if all of a sudden they did that and someone came along with her dog who did a little mess on the carpet. You guys aren't saying, well, I'm sorry, I already did that in my scope of work. I'm not doing anything additional. You kind of have a degree of flexibility about- Yes, we have to. So we just have to take care of the client. And what's it going to cost us to just run back out there and take care of that? So we have teams that we can kind of deploy and just cover each other. And that's the whole team approach. When I was at Hawaii First, managing a small project division with you, Kim Becker and I, we would work in teams and just covering each other. So that if you're the property manager of one association, what happens if you're sick or you're on vacation, there's no backup. So I think working in teams really helps. So I know from my experience, one of the common problems was maintaining quality with janitorial landscaping personnel. And frankly, it's also one of the areas of higher abuse I've seen where they've improperly used independent contractors. So how do you train or maintain the quality for those types of people? We're just really, again, setting the expectations in the beginning on what the board wants. Our execution needs to be on point because not just satisfying the board members, but it's those satisfied board members that will give us referrals to their neighbors or whoever. And it's very important for us to maintain that brand quality control. But the contract you have may be for, I'm going to again use this as an example, like one or two days a week. It's not always 40 hours for the landscapers or the janitorial service people. I mean, is it fair to say that it's based on a scope of work and maybe one day a week or three days a week? Or do you only take five day a week type of contracts? Oh, yeah. So if certain associations only have a certain budget, you're right. They may not need a 40 hour a week type of person. And again, I think as far as landscaping and janitorial, again, it's faster to work in teams. So sometimes for landscaping, you may not need somebody 40 hours a week. You could bang out a large property with three guys coming once a week. And so just working in teams, I think, is a lot more efficient. So we can customize and tailor it. And of course, it's a balancing act, right? Manpower work. And you've got to make sure to get stuff done. I'm sure the larger the scope of the work, the more it costs. Because the thing that I've also often heard about landscaping people is kind of blow and go. They come in, you know, quickly mow the lawn, and mow the leaves, and they're gone. But the refinement type work of the flower beds and those things don't get addressed, do you do those types that more precise work as well in your contract? You know, that's a good question, Richard, because by no means am I an arborist. I've worked with many arborists. But you have to go in and you have to look at, OK, you know, you mow and blow, and then you go however you want to say it. But the grass is dead. Are they watering? Are they fertilizing? Why are these bushes all diseased and dead? So we make those types of recommendations. Why? Because it adds property value. And that's why we're there. Really, if we're on a new project, six months down the road, and it looks absolutely the same, you should fire us. We really want to come on to help these homeowners maintain or enhance their property value. And to discuss one more program you offer, and we briefly touched on it earlier, the District of Independent Contractors and Licensed Contractors and Handyman, tell us a little bit about your, quote, handyman slash licensed contractor work. Yeah, so our sister company is Universal Matrix. My partner, Matt Connashiro, and his partner, Keith Connashiro, who works for non-Ink. He's an estimator for non-mentoring us. So if those projects exceed $1,000, where we need a licensed contractor, we can bring an RME on from project to project to take care of things. We're working on an RME right now to hang his license with NK Management. And we will be a fully fledged BC licensed contractor to do all types of construction. What are some of the larger projects you've done? I mean, we've done some commercial projects, some renovations. We've partnered with other armies. An army, the contractor, to do full-on resident manager renovations. So just full-on home renovations, we can do that. And for the people who maybe are watching this and don't know what an RME is, you wanna tell us what an RME is? Registered managing employees. So they're the employee that has the license. So that's basically what that means. So if they're on staff, they hang their license with you. Don't quote me on this, but I believe that the licensing board allows them to hang it with two different places. They have their own company, but because we have the market, they'll come over here, hang their license with us, and they can do business that way. But whatever it is, you're gonna comply with the law and it's gonna, I don't know either what the RME rules are. You have to do all the paper with the DCCA and pay your taxes and do it, absolutely. Well, I've known you a long time. I know you're very stickler about doing things the right way. So that's why I was asking the question. What are some of the smaller jobs you've done? I mean, you do small handyman jobs, a $500 repair to a wood-rotted entry gate or? Yeah, the smaller jobs, I mean, drywall repair. We work with a lot of water mitigation companies to come through, demo the wall, put the drywall back, prime paint, carpet. So we outsource the carpet with some qualified carpet guys. And part of being an experience manager on site is if you're putting in wood laminate flooring, the underlayment, so you have to look at the house rules if there's impact isolation class, they call it IAC rating, IAC rating. And it's usually 55 to 60 or higher, which means there's enough acoustic barrier to dampen the noise. So if your house rules do say that you have to know that and make sure that those are installed before they install it, right? What do you say the biggest challenge as you have with boards on your services? You know, not reading their board packets before the board meeting. A lot of us spend a lot of time preparing the board packets and maybe they trust us a lot so they don't have to, but cutting the costs, cutting personnel also to just reduce the budget, but you don't want the property value to go down, right? So prices are increasing, medical insurance rates are going up, just insurance, utilities, everything goes up. And so as it goes up, your maintenance fees naturally should go up, but some boards just want to cut costs and they'll say this building was ran by 10 janitors before, but now they cut down to five, how would you possibly maintain that level of service with half the staff? So it's just encouraging them to be realistic is a challenge, so sometimes. You feel there's any propensity in the part of, I know all boards are not the same, but they look at only the price, they don't look at the quality? There's a wonderful organization called CAI and I always encourage every single board member that I come in contact with to attend those classes. It is so beneficial to learn about how to prepare budget, the fiduciary duty of the board, maintaining the property value. I mean, the list goes on, right, just of all the classes that they offer and that's step one, but again, it's a team effort, you got to work with the property manager. I love all the condo attorneys out there that have given me good advice, but no offense to you guys, why should you have to go to the attorney if you're doing things the right way? And I think that we are, we should be recognized as those professionals as well. And one of the problems I used to see as a board, but again, look at this quote, I'm going to call it illegal independent contractor. There are legal independent contractors, but ones who are just a handyman are going to pay them $200 or $300. But part of the problem is if you got hurt, you're going to have risk with regard to damages and work comp and not having work comp because probably they're employees, but also if the work's not done well, you have no warranty or someone to go back to to say fix it right where I would assume with a contract with you, you're standing behind the work you provided, so. I think that's a great comment and you know, for contractors to come onto an association to do the work, the best practice is before they start the work is to indemnify the AOAO on the board, hold them harmless if anything happens. I mean, we live in a legal society now, so you have to have this certificate of insurance to cover the association as you know, so. But we're getting near the end of our show, so I'm going to ask you one more question that is, what's your number one advice to boards in dealing with these types of issues? You know, take time to explore your options. There are options out there. We created the company to provide that service for them, but there is so much help out there that these condo owners, there's options, you know, just seeking the right advice and asking questions, attending the CI courses. Well, I support what you're saying is a long time industry professional and association management, boards need to accept their responsibility, do their due diligence, look at their options carefully, but trying to just find the cheapest solution really may not be in the best interest of the association. You want to look at warranties, work experience, those types of things because you can end up paying for it more often or twice as often because the person you selected didn't do a good job and then you run the risk if that person isn't legally licensed and they got hurt, you've exposed your association to a lot of liability. So I think you have to carefully check this through and check this out to do the right thing for their fellow owners, even though it may cost a couple of nickels more. Absolutely. When you're doing multi-billion dollar contracts with vendors, making sure they all bid apples apples, checking the warranty and oftentimes if you get a third party contractor or consultant to vet that out for you, it's well worth it. I want to thank Mano N of NK Management. They were talking to us about options you have to run your association successfully. We'll be back next Thursday at three o'clock with another show. Thank you for watching today and aloha.