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Posted by on in Apartment Investment
There is no doubt, leaking pipes at your apartment complex are a nuisance.  From residents to property managers to maintenance supervisors to owners, everyone is impacted when a property is leaking.  Oftentimes, the thought of selling the property to get rid of the headache seems appealing.  However, leaking plumbing is hard to hide, and chances are you will not be able to pass off the property without taking a valuation hit unless you get the pipes fixed. If you are thinking of selling your property and are in need of a repipe, it is in your best financial interest to get your piping systems fixed before you list. With turnkey contractors who are able to quickly and cost effectively complete a repipe without moving out residents, selling a hassle free building will most assuredly increase the value of your property, which will typically offset the cost of the repipe. Because new pipes (installed behind patched walls) have no curb appeal and an ambiguous correlation to increased rents, many property owners are hesitant to make this upfront investment before listing their property.  However, inspectors, insurance agents, appraisers and potential buyers are sure to uncover the evidence if your property is leaking, and will either lose interest or submit a low-ball offer knowing the property has issues. By being upfront about the investments you have made (just like you would promote a new roof or renovated kitchens), promoting a recent repipe indicates to buyers that the property is well maintained and worth their...

Posted by on in Apartment Leasing
Since writing about HUD's Fair Housing Act guidelines, I have received inquiries about how to handle an applicant with a criminal conviction record in a nondiscriminatory manner.  One example is: An electronic background check reveals the applicant has a 5-year-old conviction for grand theft auto, which is a felony, so the application is denied based on the conviction only.  " A policy or practice that denies housing to anyone with a prior arrest of any kind criminal conviction cannot be justified. " says the general counsel for the US Department of Housing and Urban Development thus that property manager could be breaking the law.  The better approach is: a background check reveals the applicant has a 5-year-old conviction of grand theft auto.  The agent conducting the screeing contacts the applicant's prior landlord and finds this person evicted a month ago for not paying the rent and his employer indicated he was recently fired. With an established policy of not renting to persons with a prior eviction record, you may be justified in rejecting the application since the denial is not based solely on the conviction record. On the other hand, the agent conducting the screening on this individual, upon learning about his conviction record, contacts the current landlord and finds this individual has paid rent on time, is a model tenant, and has a solid employment record.  Under the ACT guidelines, he should be welcome him into your community regardless of the conviction. The ACT is confusing, thus am always available...

Posted by on in Apartment Investment
In the previous article, we began to highlight mistakes that Jake and I committed as we embarked on our investment career. We obviously have committed more than 13 mistakes, but we felt that these thirteen errors had the ability to destroy our future and were vital to focus on and try to give a solution to the problem. We discussed our “nightmare” manager and our unscrupulous mortgage broker in the previous article. In this article, we are going to focus on two more mistakes.   Bed Bugs:Once you attract bed bugs, it’s extremely difficult – and costly – to eradicate them. One of our apartment complexes that we purchased was being run as a weekly rental and the tenants would use the mattresses and furniture that were in the units. Although the rental income was higher with weekly rentals, it wasn’t worth the hassle or the bed bug problem that the tenants brought in. The tenant base was extremely transient and our make-ready expenses were higher than the extra income that was generated. We’ve now partnered with a new pest control company that specializes in heat treatment for these evil creatures so we ensure it’s not going to be an issue again regardless of how long our tenants stay. When you purchase a property, make sure to have the inspector walk through all the units and check to see if there is any bed bug activity or termite activity. If you find instances of bed bugs, try to have the seller...

Posted by on in Multifamily Training and Career Development
I was doing some work for a company not that long ago and took a few phone calls. Man, it must have been a full moon or something because I spoke with some crazy people that day. If you have worked onsite for any period of time, you know that the multifamily universe does have our share of “cray-cray” people! I had someone yell at me because the United States Postal Service didn’t deliver her package into the mailbox or package locker and instead kept it at the post office. The mail carrier left her a note letting her know of this and she was ticked off at me because USPS did this. (Let that sink in for a bit.) Now, of course, I wanted to say, “I don’t work for USPS! If you have a problem with the UNITED STATES POSTAL SERVICE have you considered calling the UNITED STATES POSTAL SERVICE???” Now, since I teach customer service for a living, and since I like this gig, I figured I better not say what I wanted to say. So, I tried to grit my teeth through it-and even though I did my best to help her, she still had a conniption, yelled at me one final time, said some things that I cannot print here and hung up on me. Incidentally, I don’t know if she ever called the United States Postal Service. So, how do you handle them?? One: Do not become the problem! One of the most important things you can do...

Posted by on in Apartment Maintenance
Apartments, condominiums and other multifamily facilities are becoming bigger, better outfitted and more beautiful than ever. Adding granite countertops and crown molding might be an excellent way to attract new tenants. However, one of the absolute best ways to entice renters and keep those who already live there happy is by adding outdoor areas for relaxation and enjoyment. Today, an outdoor living area for tenants to gather is more of a necessity for many multifamily housing properties. Here are a few low-maintenance options for improving your property. These will help you stand out in today’s ever-competitive rental market: Rocks, stones and other hardscapes — While grass, flowers and greenery are great, they require work and will have certain seasons that they may not be as beautiful. Adding stones and rocks is an affordable way to add interest and “curb appeal” to these outdoor areas. Picnic tables — Add a couple of picnic tables and you suddenly have the makings of an inviting area. Not only are picnic tables appealing to tenants who want to enjoy a meal outdoors with their family, but these can be utilized for community events, too. Depending on how the sun hits your space, a covered area may be recommended. Bike rack — A bike rack is not only a good addition to your outdoor space, it is a nice offering for your tenants and their guests no matter what. Giving bike riders a place to secure their bikes is very thoughtful and shows that you care....

Posted by on in Apartment Investment
Real estate investing is a business proposition, even if you’re only buying one small rental property. Property owners need a business plan with some features specific to real estate. Remember to speak to your lender, and include market research and an outline for when to sell. Consider Your Target Audience Your business plan is a sales pitch, and what you’re selling is profit. Your audience is a bank lending agent, so highlight your own experience and introduce your team. List your partner(s), legal representation, financial, contracting and real estate resources, along with brief bios that tell a lender that your team has the experience and dedication to make this investment plan turn a profit. Expand Your Guiding Principles Among your guiding principles should be step-by-step instructions for pre-purchase property research. Think of it as a “how-to” guide for when you or someone on your team might want to cut corners. Set up a system that outlines exactly what due diligence looks like to make sure each and every property you buy is a great investment that meets your current needs. The biggest mistake an investor makes usually comes with a mortgage, so get detailed enough to avoid buying properties that will cost you in the long run. Exit Strategies When you buy a property, you usually know up front if you’ll buy and hold, rehab, or wholesale for more immediate returns. Your business plan exit strategy is a great place to detail some “if, then” scenarios in which you would have...

Posted by on in Miscellaneous
Dear Gabby, Pool season is my favorite time of the year to relax and catch some sun. But lately, others at the pool are ruining it for the rest of us with uninvited guests, blaring music and obnoxious activity. Have you had any experience with this? #ConcernedPoolGoer     Dear #ConcernedPoolGoer, Pools rock and even as summer winds down, the pool is a community hot spot but it can go wrong so quickly…public displays of affection, a little too much skin for that suit (or not enough suit for that skin), pool toys…the list goes on. But here are the worst pool faux pas. If you encounter these, feel free to pull your hair out.   1. Non-resident guests Pretty simple really. A guest here, a guest there, fine. I get it; we all have friends we’d like to invite over from time to time. But if the head count starts looking like a softball roster, you’re outta here. Also, please stop making me get up to let you in since you conveniently “left your card at home”.   2. Pool Toy People Acceptable: floaties (for children of course)….and really, that’s about it. Unacceptable: everything else. Keep the extended loungers, footballs, and for heavens sake, the “noodles” at the comforts of your own pool (or at least a private one).     3. Cannonballs!!!! CANNONBALLLLLLL! **SPLASH** Book soaked, cell phone ambushed, and mood, salty. Just don’t.   4. PDA Hey there cassanova. We see you’ve been practicing those sweet moves you learned...

Posted by on in Miscellaneous
Temperatures are soaring and the A/C is cranking. Condo associations can reduce cooling costs in common areas with a few simple techniques. Read on and start saving!   Natural Cooling with Plants Indoor temperatures rise when the sun beats down on roofs and walls. Keep indoor temperatures cooler by planting tall bushes around the property and trees in the line between the sun and the roof.    Solar Screens Try putting solar screens on east- or west-facing windows. These mesh screens can block 70% of solar energy before it gets into the building. Window films can do the same thing, but they only work if windows are closed. If windows in common areas are frequently open, solar screens are a better choice.    Automation Use automatic settings to lower air temperature during the day and raise it during the night. If offices or common areas are closed at night, there’s no need to cool them for the people who aren’t there.    Location, Location, Location If there’s a basement section of a common area, consider making it a gathering place for residents. Instead of putting a pool table or a couch and TV on an upper level, locate these items on a naturally cooler basement level. Keep cool this summer, but be smart about it to save money. Enjoy your summer!  ...

Posted by on in Property Management
image1 (1)The photo above has been all over the internet this week and has caused quite a bit of hype. The quote to go along with it is very fitting, “Winners focus on winning. Losers focus on winners.” The purpose of that quote is to motivate you to focus on your own goals, on your own successes, and your own “race” to get there. I agree with all of that. But, based on my day today, and seeing this photo all over my newsfeed, it dawned on me that we can look at it in an all together different way. As a reminder to actually focus on your competition. My boss came for a site visit today and while she was there we went out and about searching for a new property that had just opened down the road from us. One comp visit turned into a second and third comp visit. Which, I hate to admit, since I’ve been in Georgia, I’ve hardly had an opportunity to go out and do this, but shopping comps with your boss, well mine anyhow, is an altogether different experience. And a ton of fun. While I’m usually always heavily focused on the leasing presentation and pricing, my extremely detail oriented boss is focused on those things as well as whether the televisions in the Athletic Club were on, the undermount lighting in the kitchen, the trees surrounding the community, the picture of the ostrich over the bed in the model……every single small detail. It was an...

Posted by on in Apartment Leasing
Challenger_Sales_Model.jpg Regular readers of this blog already know our thoughts on the need for multifamily operators to fundamentally change their approach to sales. They also know our feelings on the need to create a real conversation about how operators should manage the sales function today and in the future. We were quite excited to see the current moving in the right direction this past June when we had the opportunity to present our research and results on selling at the NAA conference.  Not only did we get a standing room only experience during the presentation, the conversation afterwards and on the trade show floor showed how far sales has moved up the list of attention. We were encouraged not only by the conversation, but also the familiarity with some of the broader research into effective selling.  Maybe it’s the fact that we’re clearly past the peak of the recent multifamily performance boom, but we’d like to think that our contribution has had some impact as well. One of the most common themes we’ve been asked about is how the research done by CEB that led to the book The Challenger Sale can be applied to multifamily sales.  We love that question, as this research is some of the best ever done into what actually causes successful sales results, and is a core part of what led to our conclusion that the multifamily industry was past the point of desperately needing to change its approach. It also leads to a great set of questions and insights.  Because while...