Apartment Blogs

You hear in a lot of places that the only commercial loans available today are for apartments.  Apartment loans are available especially for larger apartment project (over $5 million) where the agency lenders, Freddie Mac and Fannie Mae, and HUD are keeping the market going.  These lenders are offering very aggressive rates and in some cases aggressive loans.   HUD loans are still available up to 85% LTV and Freddie and Fannie loans are available in the 75%-80% LTV range in most markets.  However, Freddie and Fannie do not generally service the smaller loan market.  You can get a loan from them in the $3-$5 million range, but only if you find the right correspondent lender.  For loans under $3 million its very tough to get a Freddie or Fannie lender interested in talking to you at all.

So for smaller properties is there capital still available?  Thee quick answer is yes.  Owners of properties under $5 million still have choices.   There are fewer choices today compared to last year, but of coarse who has more choices today when compared to last year.  There are still some banks lending and some Fannie lenders are offering loans to borrower needing between $1 and $3 million.  

Over the last week my office called over 100 banks in the Chicago area looking to see who is lending.  We found 21 banks (about 20%) who said they were willing to consider new loans.  A slightly smaller survey earlier in the year found almost 50% of the banks we called saying that they were lending.   Additionally many of these lenders who said they were looking to make loans were offering terms so onerous that I would not really consider them in the market.   These banks were only willing to do amortization schedules of 20 years or less and/or requiring LTV's under 60%.  The rates offered had a wide range with some offering rates slightly below 6% and others being at 7.5% or higher.  In reality fewer than 10 loans were really looking for new loans and wanted to compete for new business.

After reading this morning's news watch from the NMHC, I spoke with Mike Kelly of Caldera Asset Management about the predictions he made for the apartment rental market as a whole, from an investor and ower's perspective.

The featured article, 'US Multifamily Rents Could "Explode" in Three Years.' Naturally, we wanted to determine whether this was the good or bad kind of explosion. The article, however, goes on to explain that by "explode" they mean that on a nationwide scale, rents are expected to decline for at least another year and a half, after which rents may climb to higher levels, but wouldn't exceed the rents of 2005 through 2007.

Caldera Asset Management co-founder Mike Kelly explained that lenders are only giving loans and basing credit lines based on currents rents (and therefore values) instead of future values, as was common before 2007.

"I'm sorry, there's nothing I can do."

Grrr.

As a customer, there's nothing worse than those words. As a customer, I don't want to hear about what you Can Not do for me. I want to hear what you Can do for me.

The Hispanic community in the United States has an incredible $800 billion worth of buying power, even in today’s economy, proving to be an incredibly lucrative investment for the multi-family units willing to tailor their marketing approach in order to meet the needs of the Hispanic renter community. Home ownership proves to be incredibly challenging among the Hispanic community, with lower average education levels, large family units, the general lack of Social Security Numbers for applications and background/credit checks, and a relatively lower average age of individual households deterring most from being able to possess their own homes.

The majority of the Hispanic community is of foreign birth, opting to make their way to the United States by way of major cities such as New York, Miami, and San Francisco. These densely concentrated metropolitan areas are generally home to few owners, and more renters, thus making home rental among the Hispanic population a popular option. The road to home ownership is often lengthy and bureaucratic—60% of United States Hispanic residents opt to rent their homes, and take pride in doing so. Studies show that Hispanics take pride in paying their rent on time and are often more eager to keep a clean living space and uphold tenant/landlord requirements within their homes. Because of this, many multi-family complexes are reaching out to the Hispanic community and adapting the general structure of their renting process and marketing approach to accommodate these eager renters’ needs. In a world where identity theft is happening all around us, a vast number of apartment applications no longer require Social Security Numbers, and many complexes are making concessions for large families. Apartment marketing efforts targeting the Hispanic market can bring you many qualified and eager renters.

 How are you preparing? Do you have any suggestions? Do you have a spanish rental application?

A compelling story that may have been lost this week in the furor over the Horizon Realty mess was the WHO's study on the dangers of tanning beds. As an industry, we need to be aware of this and address it at our apartment buildings and communities.

The dangers of tanning have been known for several years. Sadly, my generation not only tanned religiously, we even added iodine to baby oil to 'darken' ourselves even more! (Yes, we really did that.) But finally, even more information on how dangerous it is to 'fake bake' has been made public.

"We're having a heat wave, A tropical heat wave..."

It is BLAZING hot in Seattle this week! Usually when people in the Pacific Northwest complain about the weather, I call them wussies and tell them to try out Kansas for a week in December and a week in July, however, the weather out here has gotten confused this summer.  We're getting the 101 degree days while my friends in the Midwest are enjoying the 70s and 80s.  GIVE ME BACK MY CLIMATE, YOU HEARTLANDERS!!!

The grounds at many of my client's properties look like they are living in Kansas this summer.  We haven't had any real sizable rain since about mid June out here, and so it's getting pretty brown and crispy out there.  We all know how important curb appeal can be, especially in these high traffic summer months, so I wanted to pass along a tip that I got out of the January 2009 issue of Real Simple magazine.  I've mentioned Real Simple here before since I really like a lot of what the magazine has to offer on everything from home tips, to quick fixes, to organization ideas.  You might consider getting a subscription for your club house/cabana since it's an easy and non-controversial read!

In an article titled 25 timely tips for 2009, Allegra Muzzillo passes this along for the month of July:

"Let the grass grow.  In summer, keep grass tall, which slows water loss by shading the soil.  "Raise the mower's blade to three inches or higher from now until Labor Day," says Paul Tukey, author of the Organic Lawn Care Manual."

Because of the substantial rainfall that Seattle normally receives, the roots of our plants stay at a relatively shallow level in comparison to, say, the plants in Nebraska and Oklahoma. Once the top water is gone, the grass starts to brown up and get crispy like a wonton skin in a deep fryer. 

The great thing about this tip though, is that it works for anyone who has
warm summers with sporadic rain.  By asking your grounds crew to leave your lawns a little longer this summer, especially in a dry, warm climate, you can save yourself some serious money on the water bills.  Since you're not watering as often, but still able to maintain green grass, it allows you to put some of those saved funds in to attending to those wilted flowers by the walk way in front of your offices.  (I know they're there, I've seen them!)

Plus, you can let your residents know that you're letting the grass be just a touch longer this summer in an eco-friendly move, which gives you some very literal green marketing power!

 

Heather is a consultant, staffing facilitator, recruiter and trainer in the Seattle area with Career Strategies Inc.  Check out more of her property management ideas at www.behindtheleasingdesk.com .

Ever heard the saying “if you can't say something nice, don't say anything at all”? When was the last time you said this to one of your children? As an adult do you live by this rule?

In the event that you haven't heard – Horizon Group Management in Chicago is suing a former resident for $50,000 over a tweet complaining about mold.

After yesterday's chain of events, and the subsequent twitter uproar I find myself between a rock and hard place. A small part of me wanted to jump in all the drama, voice my opinions, as others have said “un-freaking believable”.

Yesterday, we came across an article about an apartment in Fayetteville, Arkansas, The Crowne at Razorback community that recently hosted a pet-adoption drive in conjunction with their local animal shelter. As part of The Crowne's 'Christmas in July' party, the Fayetteville Animal Shelter brought several adoptable dogs and a photo display of cats to show to residents.

We think this is a great way for pet friendly apartments to showcase how welcoming they are to cats and dogs. According to our internal figures, 1 in 4 searches are for apartments that allow either dogs or cats or both, which shows a widespread national demand for pet-friendly apartments.

We have also previously conducted some research in the past on the topic, comparing the availability of pet-friendly apartments by city to a Forbes survey, and determining that cat versus dog preferences have a definite geographic divergence.

I felt compelled to share a comment from one of my friends on facebook.  This is something she posted on her status yesterday.  I asked her ahead of time if I could use it.  This is from Mindy McCorkle who works at Crosland LLC.  Here it is:

Think about the job you love - and sometimes don't. Now think about having to do it with people you don't get along with. Makes me VERY grateful for the team I work with!!

Name Your Price!

I tried posting this as a discussion as well, but I would like to reach a broader audience.

This question is for all multi-unit leasing agents, property managers, apartment operators and apartment owners.

If you were to think of a price per pre-qualified lead, per pre-qualified rental application, and price per lease that would be acceptable. A price for each of these that would allow you to make the decision on the spot.

NOTE- Pre-qualified = a potential renter interested in YOUR apartment.

Here is an example:

• Price per tenant lead: $20.00
• Price per rental application: $50.00
• Price per lease: $100.00

What is a price for each one of these that would make you say: "That is a great deal! I will take it!"

Thank you all for your input,

Apartment Marketing, Tenant Leads, Rental Applications

Sergio Navarrete