Aaron Norris is joined this week by James Sheppard. Today will be a little bit different as at the beginning of the year the Norris Group went completely digital. They are not just doing a radio show since most of their listeners are completely online all across the country. Today they will be adding a video piece. While they will try to explain everything going on, you will want to go over to YouTube, Facebook, or LinkedIn and check out the video.
James is CEO and co-founder of Centriq where he’s on a mission to simplify the life of homeowners. He is a two-time entrepreneur who has brought ideas to life in both the physical and digital worlds. In building Centriq, James is drawing from his experience in commercial real estate development, building large mixed-use projects in Vancouver, Canada, as well as in the infrastructure asset management business where he helped large utilities and cities optimize the performance of their physical investments. With Centriq, he’s making those best practices accessible for residential property owners.
Aaron began by asking James when he first came up with the idea for Centriq and what his elevator pitch behind making homeownership simple. James said the quick version is we are filling our homes with more complicated things. Homes in general are getting more complicated, and at the same time consumers have less time available. We find ourselves in situations where our home and everything in it is overwhelming, we don’t know how to use it, we don’t know how to troubleshoot when problems happen, as well as on top of that that maintenance and what we should be doing to keep our house to give us a return. Unfortunately, it becomes too complicated and we end up doing nothing a wasting a lot of time and money. Centriq set out to solve this.
Aaron said it has come a long way and asked what he did the last couple years in the process. He said when they first set out to build Centriq, it was when he and his co-founder were still at Sales Force and found themselves working with a lot of companies that make things to sell into the home. They were all struggling with how to better serve and support the customers. At the same time, he was doing a remodel on his home in California. His co-founder had just bought a new house, and they were sharing with each other horror stories about the experiences they were having.
He remembered the straw that broke his back was a remote-controlled gas fireplace. You just have to press a button to get a fire; our grandparents would roll over in their graves if they knew of this. He was walking out the door one morning, and when he pressed the button there was no fire. When he looked at the remote control, the batteries were good and everything seemed to be working on it. Not knowing what to do, he called the service man. When he came over, he illuminated James to the fact that the thing was not hard-wired and had a battery-operated receiver. Those batteries needed to be changed too, and he had no idea. James paid the man $200 to change batteries. When this happens, there is a problem.
When they set out to build Centriq, initially their focus was on the consumer experience in the home with bigger-ticket things attached to the house. They have done this, and anyone who goes to Centriq now will find they are doing a great job of replacing that binder. If you are organized, you will have the product information for the big ten things in your home in nicely organized binder where you can access it if you need. Initially, they set out to replace that, and they have. Now since they have replaced the binder on steroids, the question is where to go from here. This is where they are now not just going to market through consumers, but opening up to all these channel partnerships of these ecosystem that touches the home. This includes the builder, property manager, realtor, lender, and inspector. These are key stakeholders who have their own things to benefit from by using Centriq. It is all in the service of creating an even better experience for the consumer. It is the whole channel strategy that excites them.
Aaron stumbled upon James’ app where it said to scan the serial numbers within your appliances. He ran around his primary residence and took pictures of all the stickers on the appliances. It took him a day, but when he came back he found it had sucked in all the PDF of the user manual, which he had long lost. He had bought a refrigerator when he purchased the home, but he lost the manual for how to replace the water filter. It pops in the PDF of the user manual for that appliance automatically, and it had a list of all the parts and videos on how to install the parts. When he clicked on the part, it took him to amazon to buy the filter.
At the time, he had not replaced the water filter in six years. He clicked on the link, ordered the filter from Amazon, and it came two days later. There was a video on how to install it, and he felt embarrassed on how easy it was to install it. He thought he had to pull out the entire refrigerator from the wall and it was going to be a big production. It ended up taking him two minutes. After this, he made sure he was prepared. He had a rental property he was only inside one time when he visited Florida. He went through and took pictures of every appliance, did a video walk-through and used it as an online tool since now there is an app and you can log in online. Since he was not good about keeping track of these things before, he was really appreciative of the tool.
James’ background is real estate investing, and he worked with condo projects and shopping centers in the real estate market. He gets the space, and that has always informed his approach to things. The reality is that as a smaller scale investor who owned a few properties but was not operating with great efficiencies, the difference sometimes is between cash flow break even or not is the handful of service calls a year. If you can cut the cost and get those down, that is the difference between holding property and breaking even on cash flow versus not. They have been excited about these stories since they have been going to market about property managers who would have figured out how to get across town to find out what he needs to get parts for but got to save these trips.
Aaron asked James about having a certain appliance and if it is still the case where it automatically gets registered on a recall list and he would be notified. James went back to when he was working with big brands at Sales Force that sell into the house everybody would say they would give the customer an app. This was their answer to how they would engage with and serve their customers. They were working off the idea that consumers do not mind having twenty apps on your phone for every possible brand in your house. They looked at this and said it was ridiculous and nobody wanted it. What people want is one place for them to turn to for everything. This is exactly what James and his co-workers built, and they did it off this model that nobody wants to be typing in a bunch of information. They thought, “We are all walking around with cameras in our pockets, why can’t we just make it so you just take a photo of a label?” The app would then pull in all this content. That basic idea of being able to take photos was really central to how any busy professional wants to in and out of the house and get their business done quickly.
James discovered along the way that they could take the data and integrate with the government’s Consumer Product Safety Commission’s recall database. Here, for every product in America that is recalled, except for automotive, they check everything in their database against that database every day. Even if you were diligent with a rental property you owned, in the past if you walked around and checked it, if it was recalled the day after you would never know. You checked that box and are done. With Centriq, it does not matter as they will check it and notice in any point in time.
They have gotten great feedback on this. This includes things from recalled furnaces where somebody is about to close on a purchase and realized they can make the seller replace it before they buy. They do not just do big appliances. People don’t realize there were 8 million recalled Cuisine Arts because the blade was chipping off into the food. While this is not a direct real estate play, they have been thrilled with the response since people have been very grateful to hear about this when they would have never heard about it otherwise. These are things you don’t even think about, but especially those who do vacation rentals would be grateful to know this. If you operate several of these and are happy about buying something in bulk with a specific appliance they always supply, they would be especially grateful for this.
Aaron and James will cover this database in the next segment, but prior to this Aaron did not even know it existed. James said nobody did, and there is starting to be a lot more talk about it in the risk management community around real estate brokerages. According to the 2008 Consumer Product Safety Act, it is illegal to sell a recalled product, and the law is silent on whether it matters if you know or not. Given there are upward of 40 million recalled products still out there today because the manufacturer has no good way of reaching the consumer. Statistically, if you are transacting a lot of properties, you are likely to be buying or selling a property that has a recalled product. It is a little unclear right now where the liability lies and how enforceable it is, but there is a lot of conversation happening because it is now easier than ever to check and know whether there is something recalled.
They are particularly seeing in the home inspection community that inspectors are stepping up and making sure they check the buyer’s inspection. If more enforcing starts to happen, a liability event occurs, and an inspector gave the greenlight on somebody closing on a home, if they close with a recalled appliance that was not caught and a problem happens there will be a lot of concern about the risk and liability implication. Aaron said living in California, he immediately smells a lawsuit for the inspector. Most inspector right now are doing some level of recall check, which is great. Those who aren’t will likely catch up and make sure they are. However, it is interesting to see how that is all starting to play out.
Aaron and James went on to cover the video portion, which you can check out on YouTube, Facebook, or LinkedIn. Centriq is available on mobile app or on an IOS on Android or on the web. They are in the process of doing some really neat things particularly for the builder community. If you are building a number of homes the same, you can bulk upload and create a Centriq account for each community without individually adding products. This is good for any level of people doing bulk builder or model build.
The basic premise behind Centriq is you can have as many properties as are relevant to you. If you are an individual who owns a vacation property and two rentals, and your primary residence you will have four properties total. Maybe you are a property manager and will have 25 properties total. They also have a whole dashboard for property managers. In all, they have multiple properties all on one login as well as they are building the ability to let your tenant see a read-only version. As a property manager, you would also want the owner to see a read-only version, but you may be the only one with full access. There are all kinds of combinations there that make sense in the space.
If you are a builder, this particular instance is branded with a home inspector. As a builder, you can populate Centriq and give it to your client with your branding on it so they always remember the great experience they had buying from you. This is good for referral business. On the video, James showed Aaron a series of different groups that are categorizations of things in his home. Looking at the kitchen, there were a few different things. He clicked on the refrigerator to use as an example and saw it was a Samsung refrigerator. This was populated through nothing more than a photo of the product name plate label. That make/model/serial number exists to be found any time you call with a problem. The user snaps the photo of that, and in return they end up getting a rich set of content back for that product.
In this case, it shows the make, model, and serial number and provides access to the manufacturer’s support website. More significantly, it includes all the parts and accessories you could ever want for it listed. This includes the water filter. If he clicks on it, not only does he see which one he needs but also can click through to Amazon to order it to be sent directly to his investment property or home. Next quarter, they are releasing the maintenance schedule, so all things maintenance are being put on auto pilot. You will be able to get notifications saying when it is time to replace the items in your different properties.
It’s really easy things to forward to your tenant and direct them to the video regarding how to replace it yourself. There is also this great feature where they can find any part you need for any product you have in Centriq. If you are an investor owner and are DIYing the things in your property, you can just go to Centriq to see where you can get a replacement part. All you need to do is click and say what you are looking for, and they will find it for you. This is intended to make the entire world of replacement parts go away.
Aaron also talked about PDF user manuals. This is a given for them. In the video, he was clicking on the user manual against the refrigerator in Centriq, and the PDF popped up. They are adding a hotlink to the troubleshooting section so you can get to troubleshooting content even faster. Once it is installed, that is 90% of why people go to a user manual. He also showed Aaron some of the videos he referred to that showed how to replace a water heater and other things. Their brand is really built around relevance. For people with lots of spare time, there is no shortage of information on the internet if people know where to look.
Most people don’t have time and want things to work. Therefore, Centriq curates all this. If there is a “How to replace my water filter” that is relevant to your exact product model, that is what you will get. If it is broader than that and just relevant to Samsung front door refrigerators. This is infinitely better than not having anything, but you know with Centriq they have already curated it and are cutting through the noise. If you are seeing it, it is relevant to you and the things you own.
Another thing Aaron liked about this was on those pages, you can drill down and put your own pictures and video. This is very important as a real estate investor because if you have to open up a wall and wanted to remind yourself which way the pipe came in, you can take pictures behind the refrigerator while the wall was open to see where things were so you don’t hit the gas line. If you are building and have work in progress and construction photography, then load that in Centriq because those things are gold and you are staring at the wall thinking you vaguely remember the level at which the gas pipe ran. Load that in Centriqu, and you will be glad you did when problems happen.
In the suite of features being added for builders, which will be closer to the end of the year, they want to make it easier to bulk upload things. They recognize when you are building property, you have a lot of content. You don’t necessarily want to do it one-by-one, but nonetheless you want to get it in front of the consumer.
There are also things like the photos, including floor plans. When the new buyer or tenant is standing at Home Depot to see if the property set will fit properly on the back deck, you can save them a trip to measure to see if it will fit. They can pull up the floor plans right on Centriq and see if they will fit. There is no end to those kinds of examples. It also goes for paint colors. When he moved a table at his home, he saw his kids had drawn on the wall underneath it. They had to decide if they did not have the original paint color in Centriq, what would be their alternative. People working with rental turnarounds always deal with this. If they only have to touch it up but cannot find the matching color, they may have to repaint the entire room. Those are the kinds of things if you invest a couple minutes upfront, you will have it.
This is all the time for this week, but we will continue our interview with James Sheppard next week. This time it will be on video, so check out The Norris Group page on YouTube, Facebook, or LinkedIn so you can see behind the scenes.
The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669. For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.