Technology is transforming the future of real estate. Learn more about how managed Wi-Fi systems can provide added value and smart solutions to properties with our guest Todd Thorpe.
Todd is the VP of Sales of Dojo Networks, a leading provider of high-speed data services focused on working with multifamily communities. He breaks down what makes a managed Wi-Fi system a valuable amenity to multifamily properties. He also goes in-depth on the process of installation, including the costs involved as well as the ancillary revenue that can be generated.
[00:01] – [07:49] What is Managed Wi-Fi?
- Todd on his background and doing MDU sales
- The advantage of having a managed Wi-Fi system
- Designing a managed wi-fi for the best coverage and best experience
[07:50] – [21:25] Adding Value with Managed Wi-Fi
- Increasing NOI and revenue through managed Wi-Fi
- How it can benefit the owner and the resident
- Uses of managed Wi-Fi in maintenance and security
- Reducing trouble and service calls
- How to seamlessly integrate a managed Wi-Fi system into a property
[21:26] – [22:21] Closing Segment
- Reach out to Todd!
- Links Below
- Final Words
Tweetable Quotes
“Once you put in a managed Wi-Fi system within that property, then you can start layering in all this other really cool technology… which again, that’s what residents are looking for.” – Todd Thorpe
“Managed Wi-Fi needs to be like running water or a light switch. You flip it on and you expect it to work. You don’t think about it, right?” – Todd Thorpe
“You’re creating an environment where the resident is happy, they’re more apt to renew the lease…’cause you’re offering these additional types of amenities.” – Todd Thorpe
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Connect with Todd! Shoot him an email at todd.thorpe@dojonetworks.com or contact him at 608-669-6514. Follow him on LinkedIn.
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Want to read the full show notes of the episode? Check it out below:
[00:00:00] Todd Thorpe: You’re gonna pay that 20 to $25 per unit, but then you’re gonna turn around and charge your resident, maybe $50, $60 per unit, an amenity fee or a tech fee. And then you’re going to keep that difference. And that’s where you are increasing your NOI and you’re generating this ancillary revenue and you’re still way below what the retail rate would be for the resident to go out and get internet on their own from the local cable provider or the local phone provider.
[00:00:48] Sam Wilson: Todd Thorpe is a well respected multifamily veteran with over 30 years of industry experience. Todd, welcome to the show.
[00:00:55] Todd Thorpe: Sam, thank you so much, man.
[00:00:57] Sam Wilson: Hey, man, the pleasure’s mine. There’s three questions I ask every guest who comes in the show: in 90 seconds or less, can you tell me where’s to start? Where are you now? And how did you get there?
[00:01:05] Todd Thorpe: Okay, well those are pretty easy questions. So got my start in cable TV probably 30 years ago. So I’m kind of dating myself, right out of college. Started doing public access programming, kind of the, the Wayne’s World thing and got into ad sales and then kind of got into sales, direct sales and have spent literally probably 20 years in MDU sales, multifamily sales from, from a telecom technology perspective.
[00:01:34] Todd Thorpe: And I am in Greenville, South Carolina right now. So got out of the, the cold Northern Illinois, got sick of shoveling snow and move down here and love it.
[00:01:46] Sam Wilson: And love it. Absolutely. Man, come on down the, the south. It’s a good place to be so welcome. Question for you there, what, just for our listeners and for my own sake, I have no idea what MDU sales even means.
[00:01:59] Todd Thorpe: MDU. So multi-dwelling unit. So you have your, your SFUs, which is your single family homes. And then you have MDU, which is multi-dwelling unit or multi-family. Okay. Multifamily properties. So student housing, your traditional or conventional multifamily, senior properties, and then affordable housing is also really big right now.
[00:02:25] Todd Thorpe: And all of those types of verticals are deploying managed Wi-Fi. They’re putting in technology now as an amenity for their residents, and that’s a way to generate ancillary revenue, increase NOI on the property, which as a, as an investor, you know how important that is, ’cause you wanna increase your NOI and make the property more valuable and creating a, a marketing tool that attracts residents to your property versus the property across the street. Why should I rent from ABC property? Well, because they have all these great amenities, and they also have managed Wi-Fi, kind of turnkey.
[00:03:11] Sam Wilson: Now, so that’s part of the MDU sales is what you were talking about there when you say MDU sales, correct. You’re looking at all of this tech package as a whole.
[00:03:19] Todd Thorpe: Yep. Like a prop tech is kind of the big buzzword right now. And that includes managed Wi-Fi. And then once you put in a, a managed Wi-Fi system within that property, then you can start layering in all this other really cool technology, like smart thermostats, smart locks, creating that smart home or that smart apartment environment, which again, that’s what residents are looking for.
[00:03:47] Todd Thorpe: They want these, these amenities, ’cause they don’t wanna have to go out and get it on their own. It’s like going to a, checking into a hotel. Imagine, imagine checking into the Holiday Inn or the Hyatt or a hotel that doesn’t have Wi-Fi right today. You wouldn’t even think about that. 20 years ago, 10 years ago. It was all brand new.
[00:04:07] Sam Wilson: Tell me about, I mean, cause this is really fascinating, ’cause I’ve not heard a lot of people spending a lot of time even, you know, investing in this sort of technology. It’s kind of, I mean, obviously it’s been around for a while, but the, I guess, putting it all together into a seamless package, I would imagine is kind of, kind of a problem.
[00:04:24] Sam Wilson: One, how do you guys solve that? And two, is there a certain class of property this works in? Is it all class A, is it class B? What are we talking about?
[00:04:33] Todd Thorpe: So, how we solve it is we take a real expert or consultative approach by guiding owners and developers, could be existing properties.
[00:04:45] Todd Thorpe: It could be brand new developments, and we kind of guide them through that process. And just like an architect would kind of walk you through the best way to design your home or your new kitchen, we will walk them through how to design a managed Wi-Fi for the best coverage and the best experience for the resident.
[00:05:10] Todd Thorpe: And as far as the class, it’s class A, class C properties, it doesn’t really matter so much, the class. Where it does start to make sense or maybe doesn’t make sense are real small property. So if you get below 50 units, putting in a managed Wi-Fi system is probably not gonna be cost effective, but you get north of that, especially you get north of a hundred units. That’s where it really starts to make sense. And we’re, we’re seeing a lot of success. That developers and, and owners are achieving, is value add properties where they’re putting in, you know, in their underwriting and their proforma, they’re making sure that there is capital funds not to just do landscaping and brand new fixtures, and paint, and kind of aesthetic things, but also, you know, and maybe putting in a new roof, they’re also making sure that there’s money set aside in that underwriting to install a managed Wi-Fi system, to start installing all that technology. So, Sam, it’s all across the board, it’s value add, and it’s these real kind of sexy, resort style class A properties that are, you know, monster 10 story buildings and 500 units, right?
[00:06:39] Sam Wilson: Do you guys do the actual installation of this or are you just consultants on this?
[00:06:45] Todd Thorpe: Both. So we are a, a turnkey, soup to nuts provider. So we bring in fiber to the property and then we will either do all the low voltage running fiber and ethernet throughout the property, putting in access point in every unit and all the common spaces.
[00:07:05] Todd Thorpe: And we also work with the owner and the developer, especially in new construction where they maybe already have a low voltage contractor and we will work with that contractor. They’ll do all the wiring and then we just bring all the electronics, hook everything up, flip the switch on, and everything’s working.
[00:07:24] Todd Thorpe: And that’s really what this is all about is managed Wi-Fi needs to just like running water or a light switch. You flip it on and you expect it to work. You don’t think about it, right? We’re talking, we got Wi-Fi going right now to, to keep this, this podcast going and you don’t even think about it. You just start the Zoom, you start the podcast then going, just kind of rely on it.
[00:07:49] Sam Wilson: Yeah. That’s absolutely, absolutely true. On the value add side of things, obviously, for those of us who are buying value add multifamily properties, the thing we want to do is to increase rent. I mean, we wanna drive revenue.
[00:08:02] Sam Wilson: And so give me, I guess, a general, if you can, a general case there of, say, Hey man, here’s a hundred units. Here is the range that, you know, you could expect to spend. Here’s what we see on an average rent bump. I mean, I’m sure you guys have some of those kind of basic metrics. Can you help break some of that down for us?
[00:08:19] Todd Thorpe: Yep. Yep. So every situation’s gonna be a little different, garden style versus mid-rise or high rise. If it is an existing property versus new construction, but by and large, kind of back of the napkin figures, you’re looking at maybe 800 to a thousand dollars, a unit in CapEx cost, one time, you know, upfront costs.
[00:08:49] Todd Thorpe: And then you’re looking at around $20 to $25 a unit. And you’re operating costs, you’re monthly. So that’s what you would pay us, but here’s, here’s the kicker. Here’s the beauty part. Then this is where, where the NOI comes in. And this is where you, you drive that ancillary revenue. So you’re paying maybe 20 and we’ve even seen it in the, the high teens.
[00:09:16] Todd Thorpe: It depends on what kind of cost you can get from that bandwidth, fiber circuit coming into the property. But you’re gonna pay that $20 to $25 per unit, but then you’re gonna turn around and charge your resident, maybe $50, $60 per unit, an amenity fee or a tech fee. And then you’re going to keep that difference.
[00:09:40] Todd Thorpe: And that’s where you are increasing your NOI and you’re generating this ancillary revenue and you’re still way below what the retail rate would be for the resident to go out and get internet on their own from the local cable provider or the local phone provider, right? So it’s a win-win for everybody, the owner or the developer gets this fantastic what we call frictionless Wi-Fi experience. The resident doesn’t have to go out and get the service on their own. And you’re creating an environment where the resident then is, is happy, they’re more apt to renew the lease. And first of all, they’re more apt to just rent from you versus the property down the street, ’cause you’re offering these additional types of amenities, valet services and you know, waste haul and you know, you got a pool and that’s what residents are looking for is, and that’s, you know, value add properties. That’s what you’re trying to do is increase the rent, right? And in some cases you’re able to even do that. You’re, you’re able to increase the rent. You’re able to add that maybe that tech feed to the rent because now you are giving them more value than they would get before.
[00:10:57] Sam Wilson: Yeah. And so I guess that’s the, you just have to include that, you know, the practically speaking, you have to include that in your lease upfront, you just say, Hey, all leases include a 50 buck tech fee, whatever it is. Of course. I know we’re just talking back with the napkin numbers here, but every lease either you build it into the lease or you, you know, line item and out, and, but it’s still a required, Hey, it’s a $50 tech fee. What are things outside of smart locks and thermostats? I mean, I get it. People wanna pay for Wi-Fi. People may not care as much about smart locks or even smart thermostats. Obviously, as the building owner, we would care about things like that. And I guess as a tenant, you probably would too. If you could control your thermostat and have a lower utility bill. What are some things that are kind of on the horizon that you see where this could be the next level or the scalability of this PropTech platform? Like where, where do you want this to go outside of just maybe those three items?
[00:11:49] Todd Thorpe: Well, so besides the, the thermostats and the locks, you’re right. Not all residents want or need that. And it really depends a little bit on the property type. There are student housing properties where internet is a must.
[00:12:08] Todd Thorpe: And that’s where managed Wi-Fi started really taking off was in student housing because they live and breathe by that internet connection. They have to take their tests and, you know, that’s, that’s how they watch everything. They watch it on their phone. My kids had TVs in, in their bedroom growing up in high school and they never watched them.
[00:12:27] Todd Thorpe: They were constantly on their phone, but, you know, from a, from a maintenance and a property standpoint, When you turn that unit by being able to, so it’s an advantage for the resident, but it’s also an advantage for the maintenance staff and the property staff, because now they can lower that or raise that temperature, turn on the AC, turn on the heat, lower it when somebody moves out.
[00:12:54] Todd Thorpe: So you can just do that remotely. The whole lock thing, you don’t need physical keys anymore. So you’re saving money. You’re saving time, you’re saving resources. So there’s an advantage of the resident experience, but there’s also an advantage for the property itself. So you want to kind of weigh those options.
[00:13:17] Todd Thorpe: Maybe you don’t think that the resident would necessarily benefit from it, but the property could. So when you’re adding and thinking about these amenities, you wanna kind of look at both sides, but then in addition to that, you can do video surveillance. You can put up cameras and things and, you know, affordable housing.
[00:13:37] Todd Thorpe: We’re seeing that, especially very prevalent, putting in security systems and things like that. Water and leak detection, so you can add those devices as well. Running toilets, busted pipe, especially in, in the, the north where it’s cold, those types of services you can easily add once you have that managed Wi-Fi.
[00:14:04] Todd Thorpe: And then there’s just all the things that haven’t been invented yet, right? That are, that are going to be coming that we just don’t know. But as technology advances typically costs come down, the cost of bandwidth should go down over time and how much bandwidth you can, you can purchase and get usually increases just like technology and hardware. The flat screen TV today, you can buy for $300 and, you know, seven years ago it was $3,000. But the one thing that we do, Sam, is we make sure that we stay up on technology. We’re always in the lab, we’re testing the latest and greatest technology. We are an elite Ruckus partner.
[00:14:50] Todd Thorpe: Ruckus is in the managed Wi-Fi space, in the hardware space is the best of the best when it comes to hardware for access points and switches. We only use the best because by doing that upfront and by being extremely proactive on the front end, that reduces your, your trouble call and your service call.
[00:15:16] Todd Thorpe: So here’s a, here’s a statistic. On average, less than half a percent of our customers submit a troubled call or a service ticket on an annual basis. So less than half a percent and the industry average is 8%. That’s a testament to, we’re able to achieve those statistics because we do it right upfront. We answer the phone, our customer care answers the phone in 15 seconds, you’re gonna get a live technician when you call in if you do have a problem, and our average speed to resolve a trouble ticket is eight minutes.
[00:16:02] Sam Wilson: That’s amazing. Tell me about this. You mentioned the word fiber. Is this available in areas where fiber hasn’t yet made it? I mean, I know right now I’m in my own neighborhood and they’re, they’re, they’re finally running fiber here and it’s like, oh, that’s cool. So is that, is that a prerequisite for you guys? Like, there has to be fiber in the area.
[00:16:20] Todd Thorpe: Yeah. I mean, you, we can look at other options and you can feed a property with coax. That doesn’t mean that it can’t be done. And you can achieve some pretty great speeds over coax. So we never, we never wanna just say absolutely no. And we walk away from that opportunity. But there are certainly with, with the $65 billion that the federal government is, is doling out in ISPs and cable companies deploying fiber.
[00:16:51] Todd Thorpe: And there’s a lot of resources out there. Yeah. There’s gonna be pockets of real, you know, urban areas where it’s gonna take a while to catch up. But we were a nationwide company. We service properties all over the country and we have yet to be able to find an area where, I mean, we just have to say, no, sorry. There’s just no fiber available. Most of the developments are in, you know, and that we’re seeing, especially are in areas that are serviced and there’s a lot of fiber providers out there.
[00:17:26] Sam Wilson: Right. When does it make sense? I know you said class A, the class C, like, you can put it in any of it, but let’s say we bought a property. And, you know, we’ve owned it for maybe a year or two. You’ve got people in the, you know, you’ve got a call, go back to the hundred units, 80 of those have their own internet connection. Everybody’s got their own contracts that started at different times. How do you navigate that in the middle of an ownership, you know, period? Like, what do you guys say? Do you just go to all the residents and say, Hey guys, by the way, we’re bringing in know, managed Wi-Fi, you know, cancel your contracts. I mean, what, what is, how does that process, that sounds like it could be a cumbersome integration. I’m sure you’ve got a solution to that.
[00:18:09] Todd Thorpe: Yeah. And, and it’s really not as complicated as you would like to think, but yes, we work through all of those logistics with the owner to make sure that we roll it out seamlessly to the resident. The key there is communication to the resident and there really are no contracts anymore. If a person goes out and they, they get their own internet service with the local cable company or the phone provider, you know, none of them really have contracts anymore. It’s all pretty much once to month. So you don’t have to worry about that. You know, you can cancel your internet, you know, pretty much at any time now. Your mobile bill, like your mobile phone, typically you have a contract there, but that’s usually, you’re just trying to pay off the phone too. But with the internet, you don’t really have to worry about that.
[00:18:58] Todd Thorpe: It’s kind of a lease up and you’re going to kind of ramp those people up. And we can certainly work with owners in some sort of ramp to kind of ease those residents in, especially if you know, you’re talking literally, like you said, 80 out of a hundred units, probably 80 of those residents are gonna have internet.
[00:19:21] Todd Thorpe: ‘Cause when you think about it, That’s the first thing, when you move into an apartment or a home, what do you have to do? I got to call the cable company. I got to get my internet set up. Even before you get there, you want to like it on and working. So, you know, it’s just a, it’s just a matter of kind of working through those logistics.
[00:19:40] Todd Thorpe: We hand hold the, the owner, make sure there’s no trip ups. The other key is, is to plan well in advance. So if you do have a contract, like you’re the owner, and maybe you have a, a bulk agreement with the local cable company or the local phone provider, maybe you have bulk TV or something like that. You want to be well in advance of all of that. If you’re building a property, you want to be at least 12 to 18 months out before your first certificate of occupancy. So just planning, and by planning ahead, you really minimize and reduce and kind of eliminate all of those, potholes that you might run into.
[00:20:22] Sam Wilson: And I would imagine that as soon as we get a property under contract, correct me if I’m wrong, but that would be when we’d also wanna be reaching out to you and saying, Hey, we’re under contract. This is something we’d like to implement. What is, what is, is even possible? What’s it look like? And, and you guys can probably help guide the process from there.
[00:20:39] Todd Thorpe: Yep. That’s exactly it. Yeah and really like hold periods don’t really affect it either. You know, a lot of people hold a property for five years. We’ve seen owners where they, they do that and they want to use this as a way to increase the value of the property. So when they do go to sell it, they can certainly increase the value.
[00:20:59] Sam Wilson: Right, right. Yeah. I mean, just simple back of the napkin math, I think where we’re looking at there, you said, you know, basically a thousand bucks, a unit. And if we had a hundred units, that’s a hundred thousand dollars and if you’re charging 25 bucks, we pay you 25 bucks a month. That’s 2,500 bucks a month. We’re charging 5,000. That’s, that’s a spread of 2,500 a month. That’s 30,000 a year. So you’re getting a 30% annualized return. That smells very good on a six, seven cap deal.
[00:21:25] Todd Thorpe: There you go.
[00:21:26] Sam Wilson: That’s a win-win man. Todd, thank you for coming on today. I certainly appreciate it. If our listeners wanna get in touch with you, learn more about you, what is the best way to do that?
[00:21:34] Todd Thorpe: So I’m very active on LinkedIn, so you can look me up there. My email address is todd.thorpe@dojonetworks.com or cell phone (608) 669-6514.
[00:21:51] Sam Wilson: Todd. Thank you so much. Certainly appreciate it. Have a great rest of your day.
[00:21:54] Todd Thorpe: You too, Sam. Thanks.
