HOA Insights: Common Sense for Common Areas

044 | What is AIM and a FiPhO score?

March 11, 2024 Hosts: Robert Nordlund, Kevin Davis, Julie Adamen Season 1 Episode 44
HOA Insights: Common Sense for Common Areas
044 | What is AIM and a FiPhO score?
Show Notes Transcript Chapter Markers

Explore how AIM and a FiPhO Score can refine HOA management and community health
❗Join our LIVE Podcast April 1st 2024 on Youtube! 👉  https://www.youtube.com/watch?v=24KbKsKyoNY
✅ Is a Reserve Study right for you? 👉 https://www.reservestudy.com/

Step into the future of HOA management with AIM and your FiPhO Score, groundbreaking metrics poised to enhance the way community associations operate. This episode covers how adopting these measures can significantly improve the financial, physical, and operational aspects of your community, akin to the personal FICO score system. Learn how informed, transparent decisions can not only boost property values but also create a more vibrant, engaged community fabric. Join us to see how achieving a high FiPhO score and embracing AIM principles can lead your HOA to new heights of success and community satisfaction.

Chapters from today's episode: What is AIM and a FiPhO score?

00:00 Minimizing expenses can start your HOA
01:01 Why are we making our podcast?
03:36 Follow up from listener who had the condominium leak question in 038 
05:50 Join us for our LIVE Podcast Episode! 
06:56 Ad Break - Community Financials 
07:28 The stereotype associated with HOAs 
12:09 What is AIM and What is a PiPho Score? 

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Julie Adamen
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Kevin Davis, CIRMS
https://www.linkedin.com/in/kevin-davis-98105a12/

Robert Nordlund, PE
https://www.linkedin.com/in/robert-nordlund-pe-rs-5119636/

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Community Financials
...

Robert Nordlund:

I think you all know it's pretty easy for boards to focus on minimizing expenses, keeping those monthly assessments low. Because that's a common metric we use to measure the cost of living in an association. It's the one number that is so obvious. What's it cost. What are your monthly assessments? Is this association more expensive than the other one, but that's a destructive goal. Starving the association are the carrot needs. And we should not be surprised by what happened.

Announcer: HOA Insights:

Common Sense for Common Areas exists to help all 2 million volunteer board members nationwide have the right information at the right time to make the right decisions for their future. This podcast is sponsored by four companies. They care about board members, association insights and marketplace, association reserves, community financials, and Kevin Davis Insurance Services. You'll find links to their websites and social media in the show notes.

Robert Nordlund:

Hi, I'm Robert Nordlund of Association reserves and welcome back to HOA Insights: Common Sense for Common Areas. This is episode number 44. A bonus episode where I'll catch you up on a number of loose ends that regular listeners are probably wondering about. And it'll set a stage to help new listeners enjoy future episodes. We're here to serve our community of listeners providing a regular weekly program to affirm, inspire and motivate the approximately 2 million volunteers across the country. And that's about five board members for each of the approximately 400,000 associations here in the country. And let me stop right there. That's a body of elected officials larger than all city, county, state and national elected officials combined. So it's YOU the hard working volunteer board members, generally under trained, under appreciated and overworked, who carry this entire community association industry on your shoulders. And that's why we're doing this podcast to encourage and equip you to lead well, to know how to prepare for your next board meeting and to gain some insights that are going to help you make better decisions for your community. While generally, I'm not alone, we have monthly board hero features like last week's episode number 43, featuring Brooks Cummings. And we have guest experts like you've heard in the last few episodes weighing in on interesting audience questions. And I'll come back to that in just a minute. And I'm blessed with two great co hosts, Kevin Davis of Kevin Davis Insurance Services. He's a long term industry expert in insurance. And as you probably know, one of our podcast sponsors, Kevin is just great. He's so knowledgeable, but he has a gift to get to the bottom of a matter. And he takes something complicated, like insurance, and makes it simple. And my other co hosted Julie Adamen, who also has decades of experience, and that's decades of experience as a community association board member, a manager in different roles, and also as a consultant. Now, not only will make her special, does she have that experience, but she's learned from all those experiences. And while she's now a consultant for the industry, we get her offering her wise and humorous counsel free for you here on the podcast. So we have a great team. It makes my job easy. So catching up. Back in episode 38. We've heard from noted attorney Adrian Adams, who weighed in on the issue of I got a kick out of this the condo association with an upstairs leaker, and the unit below who was the leakee. And while the board thought it was a owner to owner issue, Hadrian have wisely clarified that water doesn't get from one unit in a condo to the other without going through common area. But there's now more to that story. Let me read from a follow up email from the board member who submitted the question. And by the way, as a reminder, if you have an interesting story, or a question or a topic you'd like to have us address, leave us a voicemail at 805-203-3130 Leave a comment on our YouTube video seeing more and more of those or send us an email at podcast@reserve study.com. And while I'm catching up, if you missed prior episodes, you can find them on our podcast website, HOAinsights.org, on your favorite podcast platform or on our YouTube channel. But back to the leaker and the leakee. The board member wrote it got more interesting. The leaker hired an unlicensed contractor to both correct the leak and do the sheetrock repair for the leakee. But unfortunately, they cut into the association plumbing in the process and broke the leakee's$400 bathroom light fixture which resulted in a huge hole in the ceiling. Now, it's turned into a repair dispute between members and use of unlicensed and on unbonded contractors. So, again, now, what do we as the board do to step in, don't use my name. This issue is too specific. Call me Fred. Folks. The stories out there are endless, crazy things are going to happen. And we're here to help you give it your best shot. Now I've got some fun news to share. Our upcoming episode number 47 will be presented as a live stream on April one, no fooling. At 3pm Pacific time. It will also be available as a podcast in the normal ways as a recording on the HOA insights.org on your favorite podcast platform or on our YouTube channel. But we thought we'd mix in something special and give you the opportunity to listen live and ask questions live. And in that upcoming episode, I'll be addressing the topic of reserve study legislation is your state next, and I'll describe where it started. The three different purposes some trends and why this matters nowadays. So mark your calendars for April 1 3pm. Pacific if you want to catch an episode live and ask questions live. More details on that to come back to today's bonus episode number 44. But before I dive in, let me introduce you to one of our sponsors.

Russell Munz:

Is your HOA or condo self managed and you don't want to work as hard volunteering. Are you full managed and looking to save money? Are you looking to split the accounting from a manager's role for better service? Like community financials handle the monthly accounting for you? We collect dues pay bills produce financial reports include portals and help with other support services, all while providing awesome service. We'd love the opportunity to help you make your community accounting stress free with our industry leading systems and expert team. Visit our website community financials.com to learn more.

Robert Nordlund:

And we're back. Our sponsors are great, they make this podcast possible. And I'll spend some more time on sponsors in general in just a minute. But I want to talk about the elephant in the room. And that's dysfunction. I come from this from the point of view as the founder and CEO of association reserves. One of the sponsors, where we prepare reserve studies for community associations and in our minds our words, and means preparing a plan for our clients to accomplish their major predictable common area repair and outpatient projects. Okay, we improve the future of our clients by helping them see that future clearly. And we help them prepare for it that minimizes future special assessments evenly spreads out the cost of homeownership over the owners over the years. And it maximizes property values. And that last one, remember, this is the true prize. We've been doing this for 37 years now. And from our network of regional offices across the country, we've prepared over 80,000 and reserve studies for clients in all 50 states. So when I introduce myself to someone new, they usually say one of two things. First is wow, you can make a living doing that. Or if they know about community associations, they launch into a complaint about the misdeeds or foolishness going on in their association. The latter is a real stereotype. And I want to show you, you, you YouTube viewers can see this I'm lifting a mug I have on my desk it says Folsom Prison, a gated community. Now this stereotype is real. So as you can imagine, we asked for feedback on these podcast episodes. And we get a lot of feedback about this negative stereotype in the audience, some emails, the voicemails that we get. But clearly, we're not going to focus on stories of bad board behavior. That's a destructive race to the bottom. That's not what we want this podcast to be all about can be entertaining. But that's not what we're doing here. We're here to improve the future of associations, one board member, one board, one association at a time. So we're not going to focus on the entertaining dysfunction among our community associations trying to have one story top another dysfunction is what we're trying to solve, because dysfunctional This, this podcast exists. And this community association model of homeownership, where it relies on the goodwill and service of untrained volunteer board members, it's here to stay, Hoa insights, common sense for common areas is here. Therefore, to improve the future of Community Association, homeowners and board members, not just stir the pot and complain. So if you're listening, I hope it's because you want to join us in this mission, making the future a better place. And since the collapse of Champlain towers, south and 2021, we also have to add a safer place for you and your loved ones. We're here to improve the quality of life in community associations and maximize your property values. And if that resonates with you, by all means, share this podcast with others who feel the same. It's your home, and we're here to help. Okay, back to the topic of sponsors. I told you about AssociationReserves just a moment ago. And I've also given some praise to Kevin Davis Insurance Services, Kevin and his team. And the cost effective, great work they do as a DNO insurance expert for community associations nationwide. And I believe they're the largest in the country. And for good reason. They do a great job of protecting board members from the inevitable things, some crazy things that go wrong, or from the things that they can be accused of doing wrong, then we move on to Community Financials. That's a great company that provides the financial backbone for community operations. Basically, it's a great service for self managed associations and a great service to complement a manager who doesn't have a lot of strength in financial type matters. I'm a firm believer that you've got to have current clear financial information in order to make wise decisions that your association and community associations does just that. And I must add very cost effectively. And our fourth sponsor is Association insights and marketplace. I'm not sure we've done a good job or a great job of explaining what that company does, or what the PiPho score is, and how it helps associations. So I'm going to take a few moments here and talk about that. The brief background is that association reserves prepared the one and only reserve study for a Champlain tower South delivering it in, I believe, January of 2020, as the association was about 40 years old, as you can imagine, that's pretty late for an oceanfront high rise to begin planning for the care of their property. And right after we delivered the plan, do you remember what happened in March of 2020, the pandemic pretty much shut things down the association there, began plans to fund and begin their repair and reconstruction projects. And in fact, the manager was literally on the roof of the association June 23. The evening before the collapse, talking with a roofer. Well, we of course, wish that we'd been hired 5-10-15 or 20 years prior. So the board could have implemented a plan earlier to take care of the property and create a different future for the people living in Chaplin tower south. But we can't change the past, we can only change the future. So why didn't the board take better care of the building for those 40 years? Well, we don't know for sure. But it certainly fits the stereotype of focusing on minimizing expenses, not spending money to care for the property, not giving it the care it needed to maximize owner enjoyment and home values. I think you all know, it's pretty easy for boards to focus on minimizing expenses, keeping those monthly assessments low. Because that's a common metric we use to measure the cost of living in an association. It's the one number that is so obvious. What's it cost? What are your monthly assessments? Is this association more expensive than the other one, but that's a destructive goal, starving the association are the carrot needs. And we should not be surprised by what happened. So let's take a sobering look at this situation. We realized here that associations need a virtuous goal to offset that destructive goal in order to take their minds off what they're doing negatively, just that monthly assessment trying to keep it low. So as individuals, we all have a FICO score that measures our financial performance as a person, and we pay our bills on time because in my case, my parents taught us that it was a responsible thing to do. And the result is when you do those things, well, you have a high FICO score. Now we realize As we all know that, but that's missing in the community association industry, there needs to be a similar simple measure of performance for community associations. So as a public service, we dug into our pockets spend a bunch of time, and we created a solution. So it has two purposes. One is to guide boards towards a virtuous, safe and successful pattern of behavior. And then if the board chooses to make that score public, it gives prospective homeowners a way to compare one association to another. And that's just like a lender will compare you or another prospective borrower to another prospective borrower. It's crazy that in this great country, where a home was typically our largest purchase, we pretty much make that purchase blindly. You know, we can do research on so many other things, a television, a blender, looking around my office, computer monitor, or a big thing like an automobile, but when it comes to a condo, or Hoa, we're forced to hope that the association is fiscally well balanced, physically solid, and operationally well put together. Typically, the process is as you know, in my case, when I bought my condominium, I knew how much it was going to cost, I knew it was gonna be expensive. I didn't know what I was getting into. In California, it's an escrow process. So you come in for closing, you pass across the file check. I still remember that escrow agent, given me a stack of documents and saying, We'll sign here that you've read this, and we'll give you the keys. And, you know, there's no way I can read all that there's no way I can understand all that. And make an informed decision, I had already made the decision blindly. And that's how it typically happens all across the country. So that's what Association insights and marketplace is all about. It's a free website, called our fipho.com, or urfipho.com, as our board members and managers can claim their association from the pre populated list of associations across the country. Now, if you can't find your association in that pre populated list, we have over 300,000 there, it just takes a moment to add it, then you fill out your associations profile, answering a few key and very revealing questions about how the association is doing, okay. And it's categorized into three tabs on the website, financial, physical, and operational. It's a list of about 13 key questions that reveal good or bad, responsible or irresponsible or better or worse behavior by the association. It's things like board elections, percent owner occupied if you have a reserve study and how old it is. percent 60 Day delinquencies, your special assessment, history on that kind of a matter, things like that this, the result is a score from one to 100. rating, the association on its combined financial, physical and operational behaviors. It's a great scale. It's a simple scale. And it's an easy way for you to find out where do we stand? So finally, boards have a way to measure how their association is doing on that absolute scale. It's not wondering, Well, I think we're doing okay, it's a numerical measure, again, just like a FICO score, and if it's a good score, or it can make that score public and shout from the rooftops, so the entire world knows there is is a strong, desirable Association. And again, further maximizing home values, eliminating the mystery. We all want to have a high FICO scores, and that's a virtuous goal. A high FICO score does good things for us as individuals. And now boards can pursue that same virtuous goal of a high FiPhO score, not the destructive goal of minimizing monthly assessments. And we believe the result of board members focusing on this virtuous goal, a high FiPhO score is nothing less than revolutionising the entire community association marketplace. So that's what dissociation insider marketplace is all about. Again, it's a free public service brought to you by association reserves. If you search YouTube for Association, insights, and marketplace, and that's Association insights ampersand marketplace, you'll see a short introductory video so if you want to see how your association measures up and start pursuing a virtue Who was cool for your association? That higher FICO score, go to our fifo.com claiming Association and fill out the profile about your association, Champlain tower South taught us that something needs to change in our industry. And we believe we've created that change that our industry needs. Well, we hope you've gained some HOA insights today, bigger picture what this podcast is all about, and gained some insights into what we're trying to do for the community association industry from this bonus episode. And I hope that helps you bring common sense to your common areas. I hope I stirred your thinking about Association stereotypes, destructive goals, virtuous goals. And I know there's a few 1000 of you listening to this podcast, let's together defy the stereotype and together one week, one episode at a time, lead this community association industry towards a virtuous future and remember, and mark a calendar for April one, and our 3% 3pm Pacific live stream. And remember, if you find this podcast helpful, share it with other board members and other owners will someday join the ranks of board members. Thank you for joining us, and we look forward to another great episode. Next week.

Announcer:

You been listening to HOA Insights: Common Sense for Common Areas, you can listen to the show on our podcast website, Hoainsights.org, or subscribe on any of the most popular podcast platforms. You can also watch the show on our YouTube channel. Check the show notes for helpful links. If you like the show and want to support the work we do, you can do so in a number of ways. The most important thing that you can do is engage in the conversation. leave a question in the comment section on our YouTube videos. You can also email your questions or voice memos to podcast@reservestudy.com Or leave us a voicemail at 805-203-3130. If you gained any insights from the show, please do us a HUGE favor by sharing the show with other board members that you know. You can also support us by supporting the brands that support this program. Please remember that the views and opinions expressed by the podcast do not constitute legal advice. You'll want to consult your own legal counsel before making any important decisions. Finally, this podcast was expertly mixed and mastered by Stoke Light Video & Marketing. With Stoke Light on your team. You will reach more customers with marketing expertise that inspires action. See the shownotes to connect with Stoke Light

Minimizing expenses can start your HOA
Why are we making our podcast?

Follow up from listener who had the condominium leak question in 038
Join us for our LIVE Podcast Episode!
Ad Break - Community Financials
The stereotype associated with HOAs
What is AIM and What is a PiPho Score?