Affordable Housing

In multifamily real estate when an investor has built momentum, they are extremely hard to compete against. Every broker and seller wants to do business with them. In this video we discuss The Law of The Big Mo as author John C Maxwell calls it in his book The 21 Irrefutable Laws of Leadership.    Below are THE 7 KEY FACTS ABOUT MOMENTUM from John Maxwell's book: 1. MOMENTUM IS THE GREAT EXAGGERATOR When deals are being brought to you, and you’re closing, and more investors continue to give you money, and management is managing well, momentum makes it look even better. In contrast when you can’t find deals, and nobody is bringing you any, and you’re in a dry spell for closing, and you can’t find equity, momentum makes you look even worse. 2. MOMENTUM MAKES LEADERS LOOK BETTER THAN THEY ARE The more deals you’re closing on, the more brokers and sellers are wanting to bring you deals. The world forgets about how long it took you to get there, all the bids you lost, a moment or two you had to retrade, etc. 3. MOMENTUM HELPS FOLLOWERS PERFORM BETTER THAN THEY ARE When you’re acquiring more deals, and they are being managed well, and rents are increasing, and your value add program is working, your staff becomes inspired to perform at their highest levels. It becomes contagious. 4. MOMENTUM IS EASIER TO STEER THAN TO START Momentum is hard to get started but all elite investors found out that once a......

During my years in the business, I have seen and weathered multiple downturns in our economy; though nothing has been quite like what we’ve all seen the last few weeks. The past downturns that I went through were financial related for the most part and took time to come together, this however, is a health crisis that is creating financial hardships, many of which are yet to be seen that may in turn be difficult to recover from.  If this is your first experience with an economic downturn, I believe you are about to witness an incredible comeback. Don’t get me wrong, I am not saying this will happen overnight or even the next few months, this will take time and a maximum of effort. I have seen people sacrifice a lot over the last few weeks, strangers helping strangers do things they probably would have been less likely to have done before.  Times of crisis really show you who people are, and, in this crisis, I have seen a lot of support, creativity, generosity and kindness. If we maintain this mentality, we can all continue to work together and get most everyone back on track, building our businesses and our economy once again. I do believe that we as a country are realizing how important we are to one another. The people that we see daily on TV, social apps or movies are not the ones saving our country from devastation, it’s the people that normally run behind the scenes and j......

As you know the coronavirus (COVID 19) emergency has led to many companies and organizations mandating that their people work remotely, instead of coming into the office. In this post I'll detail several things that leaders can do to make sure that their remote teams: Are Competent (to do the jobs they need to) Are Consistent (in what they do) Are Connected (so they feel like they're part of the team) First Things First-Take Inventory The first thing to do if you have people working remotely is to take an inventory of your team. What I mean by this is you need to think about your individual's strengths and weaknesses relative to working remotely-then armed with this inventory you'll want to create an "action plan" for how you interact with each team member.  For example:  Some of your people are really social, and derive their energy from being around people. So, you may need to connect more with these folks (text, email, phone etc.) Some of your people work better when left alone. If you keep "connecting" with these folks, you may interrupt their work flow, and cause them to be be less efficient....and quite frankly bug the heck out of them. (=  Some people need lots of data, information, and details. You may have to, what I like to say, "Break things down to the ridiculous" up front for them, so you don't get endless text messages, phone calls, and emails with question after question after question.  Get the picture?......

Housing affordability is a serious problem across the U.S. Nearly half of renter households are considered cost-burdened (meaning they spend more than 30% of their income on rent), and of those renters, more than half spend over 50% of their incomes on housing.  This means there’s a real need for strategies that reduce the cost burden on renters.  While some municipalities have focused primarily on rent control bills, others are focusing on solutions that are beneficial for both renters and properties. And as new legislation shows, an increasing number of lawmakers are recognizing the role that deposit alternatives can play in offering these win-win solutions.  Legislators focusing on up-front rental costs Several states introduced (and passed) rent control bills in 2019. This legislation focused on monthly rent costs and was designed to make renting more affordable, but was largely opposed by property owners and operators.  Now, legislators are beginning to shift their focus from monthly rent costs to up-front move-in costs, as these can be cost-prohibitive to many renters.  In fact, in our 2019 Renter Sentiment Report, 30% of renters ranked affording up-front costs as more stressful than making monthly payments, and almost 60% of renters said they’d been prevented from moving into a rental home because the up-front costs were too high.  As a result, legislators like Cincinnati’s have chosen to focus on giving renters more affordable alternatives to standard cash security deposits. With their new bill, passed in January, properties have the option to either cut deposits in half, give ......

In the past couple years, overall interest rates have risen several times in the United States. According to many experts, they are likely to finally stabilize in 2020. However, they have already risen sufficiently enough in 2018 and 2019, and we cannot be sure that the same won’t happen by the end of 2020, or especially the year after. With that in mind, the commercial real estate market needs to start preparing for a possible rise that can have significant effects.  But what are those effects? How does a rising interest rate affect the commercial real estate market? If you want to know the answers, you've come to the right place, as this article aims to give you all the information you need. Let's take a look. How Interest Rates Affect Real Estate Values For those who are unaware, interest rates, like the ones on Treasury bills and interbank exchanges, have a massive effect on the value of commercial real estate and all property, for that matter.  That’s because they influence the ability of people to buy property by increasing or decreasing mortgage capital costs. However, that’s only one part. Interest rates also affect capital flows, supply and demand, and much more. When all of that is considered, we can conclude that interest rates have a profound effect on the commercial real estate market in a wide variety of ways.  However, we are only interested in the higher interest rates and how they affect the commercial real estate market. And that is a ......

Greetings Gentle Readers! Typically when a property owner or manager needs a laundry proposal for their multifamily asset they contact a laundry company and ask for a “proposal” without giving the operator specific, if any,  guidelines in which they are interested.   And, usually when asked by the laundry vendor what the property wants to see in a proposal, the response is all too often a vague and less than strategic response: “Just give me your best deal”.    That response, unfortunately, is a nonstarter for a laundry vendor and leaves way too many options for the laundry vendor who sadly doesn’t have any idea what the property’s “best deal” looks like.   Too often neither does the property and it can result in multiple proposals, revisions, lost time and energy and missed opportunities for both counter parties. Let me give you an analogy that might help make the point.   1.      If I were to go looking for a roofing contractor, I would know at least 3 things, conceivably more, that are critical to my decision process.  In no particular order those might be: reputation, timeline for job and price.  I might also know that I prefer composite to tile and that I want 8 nails not just 6...all those are preferences that begin to outline my request. And it provides the contractors bidding the job a solid understanding of what I want.   2.      What I’m saying is the property owner/manager who knows at least three things, hopefully more, is in a better position......

Greetings Gentle Readers! Today's topic is one that is of some concern to multifamily apartment owners currently in a laundry lease or thinking about signing a laundry lease. "Commissions" is a colloquial term used by laundry vendors and property owners alike but in reality "commissions" are legally "RENT" for the space the machines occupy. Typically the property will receive a percentage of the gross revenue (collections) that the machines generate from usage by the residents on the property and in some cases off property usage. How that percentage is computed can be confusing.  There are 3 very broad categories of RENT payments that are computed and made typically monthly. First let's look at what some variables the laundry vendor will input to calculate any type of RENT payment. Capital investment (buying the machines and providing technology payment systems if suitable)  Operating expenses (installing, servicing, collection, processing, insurance, vent cleaning, etc., etc) Term of the lease (Typically, 5, 7 or 10 years) Contingency Risk (Occupancy, market risks, competition from in unit hook up) Revenue (collections) from historical performance over the past 12 - 18 months Condition of the property (new construction or existing) Class of Property (A, B, C, D) In unit connections Vend prices Competing laundromats in the area # of Machines Vandalism risks Type of Machines (front load or top load) Quality of Machines (Factory New or from Inventory)   Once those variables are collected and input the commission or RENT payments can be determined by the laundry vendor's software program. ​And, as I......

Pulling the trigger on your first real estate investment is daunting and not everyone has the risk appetite to go it alone.  If you want to start investing but don’t want to take a leap of faith, you may want to consider a Real Estate Investment Trust (REIT). A REIT is an investment vehicle that can invest in any real estate class and they’re operated by experienced executives. The benefit of investing in a REIT is that you do receive some of the benefits of real estate ownership/investing, but you have seasoned professionals managing the properties.  Since you’re really buying stock in the company, your investment is spread out over a portfolio of properties along with other investors, which helps to mitigate risk. REITs are required to pay out substantially all (90%) of their taxable income and most pay above-average dividends, so consult your CPA to see if this may affect your tax position. Of the 172 publicly traded REITs listed on the major U.S. exchanges with market capitalizations greater than $500 million, 94% have higher dividend yields than the average S&P 500 company. REITs are excellent stocks to add to any long-term investment portfolio. Not only are REITs income generators, but as property values rise they have the potential to produce some impressive returns over time. Similar to when you look for your own properties, you need to look into the assets that the REIT has that have an interest in buying. Due to the strong dividend income REITs provide, they ......

Preventative maintenance goes a long way in keeping HVAC systems operating as they should be, but breakdowns can still occur. These complex systems are made of many components. Without being familiar with how HVAC units and their many parts work, diagnosing issues can be difficult. Especially when you’re managing large multifamily properties, it’s helpful to know about some of the most common causes of HVAC problems, as it can save you, your team, and your residents from a lot of frustration.   Swollen Capacitors  Air conditioners cannot run on their own when their capacitors stop working. The job of a capacitor is to start the motor and to help keep it running. It does this by sending jolts of the energy it stores to the fan. Without the jolts, the fan simply can’t get going. There are a few ways to tell if a capacitor has gone bad. A visual inspection is often the easiest, as a swollen capacitor is a problematic capacitor.   What causes capacitors to swell? Gas is created when the conductive electrolyte within the capacitor decomposes, which happens with time or damage. Capacitors have a lifespan that can vary but is definite. The HVAC systems that house them can outlive them, meaning there naturally comes a time when a capacitor must be replaced. Swelling is a sign that the time has come, as any swollen capacitor has reached its end. You can tell that a capacitor is swollen when its shape has become altered, usually resembling a can of soda ......

There’s nothing special about bad property management companies. They ought to be literally a dime a dozen, because they usually end up costing owners far more than they can bring in or help keep. Bad property management companies provide much opportunity for great property management companies. They can snatch business away from the bad ones easily, as well as gain big through referrals. But, how can you know if your company is good or bad? Here are a few things that make it good: Care About the Residents Caring about the residents should be the number one rule. They are the ultimate source of profit after all. Ironically, the trouble starts when you think of residents more as numbers than people. A cold-hearted push to reduce costs and maximize revenue at the expense of your residents’ happiness will only undermine your goal. Think of your residents as a community and communities as families; serve them well and the benefit will be great. Care About the Property Generally speaking, the better the condition of the property, the happier the residents, the lower the repair costs, and the greater the potential to attract great residents who are willing to pay decent rent rates. To be a great property management company, go the extra mile in upkeep and maintenance. Get creative. Do what you can to make the property you manage a wonderful place to be.  Care About the Owner Besides taking good care of their property and its residents, how can property managers show the......