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Right strategy, right technology are key to ESG success

Right strategy, right technology are key to ESG success
The last couple of years have been a turning point in many ways, particularly when it comes to climate and social inequality, and many organizations are using Environmental, Social and Governance (ESG) to help guide their future. If your organization is currently working on an ESG strategy, you are definitely ahead of the curve. If you are part of a company that has yet to invest in ESG, it is important to realize that it is here to stay. The changing societal views have resulted in governments worldwide beginning to install regulations that make an ESG strategy necessary. Increasingly, earnings calls for an organization cannot focus solely on financial statements and require a look at ESG performance as well. ESG success can only be obtained if a company has the right strategy and technology in place. These are just a few of the issues I covered in a recent discussion with Multi-Housing News. An organization first must look at its portfolio and then decide what type of ESG company it wants to be, such as an ESG-first organization. It will then need to develop a strategy that brings it to that goal. ESG has financial impacts on properties When seeking financing for multifamily housing projects, ESG plays a vital role in the terms a builder can obtain from lenders, and it opens the door to a pool of investors who might otherwise not consider the project. Organizations with projects that are more environmentally friendly have an opportunity for lending earmarked strictly......
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Big Boy Multifamily Investors Are Buying Smaller Assets


Why are a number of big boy multifamily real estate investors buying smaller under 100 unit assets in addition to 100+ unit assets?

There are a number of big boy multifamily real estate investors that are buying smaller under 100 unit assets in addition to 100+ unit assets. Those real estate investors that have the efficiency to acquire under 100 unit deals are finding deals with high rents, low operating expense ratios (due to no amenities and on-site labor costs), and better purchase prices per unit than larger deals. In addition, due to the small number of 100+ unit deals coming to market, buying under 100 unit deals nearly doubles the number of chances they have to place equity.

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The Not So Obvious Clause That Every PSA Needs


You must add this clause to your next purchase and sale agreement to avoid uncomfortable situations that threaten your reputation. Most of the time challenges that come up in a transaction are for the most part pretty common. You learn from them and are able to predict if it might happen again in another transaction.

Listen to a story of a recent deal that hammers home why you need to add this clause to all future PSAs. Definitely a lesson learned for all parties, and something I will be adding to my process as a normal course of a transaction.

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Will Multifamily Real Estate Housing Crash in 2022?


I have some very strong predictions about whether there will be a multifamily real estate housing crash in 2022.

Will there be a multifamily real estate housing crash in 2022? Hell no! Here are the reasons:

  • We need to build 325,000 new apartment homes each year on average, which we haven't done since 1989. We only did 289k in 2020, which was an extremely active year by any standards.
  • We need to build over 4 million apartment homes by 2030. And another 10-12 million apartments need renovation during that time. We aren't even close to being on track.
  • Immigration is predicted to account for half of all new U.S. population growth through 2030 and immigrants mostly rent.
  • For millennials 22-37 most common form of living is renting.
  • Seniors are choosing the convenience of apartment living over ownership.
  • Renters in the U.S. are near 39 million people, which is about 1 in 8!
  • Even if home prices flatten or go down in 2022, which is highly doubtful, they still won’t go down anywhere near enough to then shift renters to buyers.

Hear more in the video: 

 

 

 

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Can We Fix Property Management Turnover?

Can We Fix Property Management Turnover?
The multifamily industry has a turnover problem, but it’s not the resident turnover we primarily think of. The turnover problem is actually one that has been steadily growing for the last decade: property managers.  While many operators focus on resident turnover, losing a property manager can take a huge transitional toll on how a community functions. Property management turnover is costly and puts a strain on other onsite associates. Research from the National Apartment Association estimated 2019 turnover for onsite managers and leasing teams was 22.5% and 31.9% respectively.  So, why do property managers leave? While multiple reasons exist, delinquency management is one of the biggest factors - some of what we hear a lot is… “Managing delinquency sucks” - Delinquency is bad, and it generally means residents aren’t having a good experience. Paying rent late is stressful enough. Worse yet, property managers don’t sign up to collect bad debt. Who wants to approach an irate resident who is emotionally stressed because they are having trouble making ends meet -- or a resident who just experienced an expensive, stressful life event -- with a high-cost late fee? “Managing delinquent rent is time consuming” - Property managers don’t necessarily have the tools or time to understand the personal circumstances of each renter, and managing delinquent rent has become a huge part of the job that no one enjoys. The process of working with each renter is time consuming, taking at least a few hours a week per delinquent renter, at best. Property managers would pr......
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Not Your Mama’s Budget: Finishing Your 2022 Budget Following a Not-So-Average Year

This year was certainly abnormal for budget planning due to the pandemic. It’s not prudent to base 2022’s budget based on 2021 actuals. It’s important to recognize areas that have become more critical, like turnover, raising rents and reducing loss to lease.  Despite the not-so-average year, we're only two months away from 2022, which means your 2022 property budgets should be nearly finished by now. Are they? If not, there are things you can do to get your budgets moving forward and on track for the new year. Here are six steps to get you back on track: Start with reviewing how you assigned responsibilities regarding the budget last year and ask yourself if those assignments worked well. Whose input was valuable? Who got it right? A good rule of thumb is to include the property manager, regional manager, human resources and accounting. After each group has added their own input, a final review should be conducted by either the controller or CFO. Then create a timeline of who will handle what tasks; for instance, the marketing manager will review the marketing budget and the regional manager will recheck occupancy and complete the final review. Review your data from this year to combine with data from prior years. While it's not a complete look at this year, the contracts, expenses and revenue should still give you a strong grasp on the trends for the end of the year going into the next fiscal year. These trends are vital in preparing a budget that takes......
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Fair Housing and the Supreme Court Ruling for the LGBTQ+Community

Fair Housing and the Supreme Court Ruling for the LGBTQ+Community
In line with the Supreme Court’s decision regarding discrimination based on sexual orientation or gender identity, President Biden signed an executive order earlier this year mandating that all federal agencies review the ruling and make needed adjustments. So what can property management companies expect? Should we wait on updated guidelines from HUD (Department of Housing and Urban Development) or should we make changes now to avoid any appearance of housing discrimination against LGBTQ+ prospects?   A Quick Legal Recap President Biden signed an Executive Order on January 25, 2021, requiring protections of LGBTQ+ people in housing, health care, and education. The Executive Order cites the recent Supreme Court decision, Bostock v. Clayton County, that held that the prohibition against sex discrimination in the Equal Employment Act prohibits discrimination on the basis of sexual orientation and gender identity. The Executive Order requires the applicable federal agencies, including HUD, to promulgate actions consistent with Bostock and the various civil rights laws. This Executive Order will result in new HUD regulations explaining the protections of LGBTQ+ persons under the Fair Housing Act.     A New Protected Category? There is always confusion with any change. With this new ruling questions have been raised as to whether or not this ruling meant a new protected category. To clarify, we do not have a new protected category, rather we now have an expanded protected category of sex. Under this expansion, it is illegal to discriminate against anyone based on their sexual orientation or the gender they are p......
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The Biden’s Administration’s Plans to Combat Workforce and Low-Income Housing

The Biden’s Administration’s Plans to Combat Workforce and Low-Income Housing
The Biden-Harris administration released a statement of September 1st, 2021, announcing immediate steps that would increase the affordable housing supply. The administration has recognized that major investors have stepped up to purchase real estate, such as urban and suburban single-family homes, and convert them into rental properties. However, the government has also recognized that this may have led to a shortage of affordable housing. In a White House statement, it was revealed that “One out of every six homes purchased in the second quarter of 2021 was acquired by investors.” This has created a limited supply, which drives up pricing.    However, the administration recognizes there is more to the dilemma than investors buying up most of the supply. The increase in material costs, labor shortage, the global pandemic, and prohibitive zoning laws all add to the problem. Therefore, more can be done to increase the affordable housing supply.  They announced steps that “create, preserve, and sell to homeowners and non-profits nearly 100,000 additional affordable homes for homeowners and renters over the next three years, with an emphasis on the lower and middle segments of the market.”   These steps include giving federal agencies the resources and authority to:  Relaunch partnership between the Department of Treasury’s (Treasury) Federal Financing Bank and the Department of Housing and Urban Development (HUD) Risk Sharing Program Expand financing through Freddie Mac, Fannie Mae’s and the Federal Housing Administration’s (FHA) Leverage existing federal funds Explore federal levers to reduce exclusionary zoning Launch learning and listening sessions with local le......
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Maximize the Sale Price of your Asset with Simple Front End Preparation


Here is a dream list of documents every broker wishes they could obtain from their listing client prior to going to market. In this video, I talk about how to maximize sale price, close quickly, and with little drama. This simply requires proper preparation on the front end before going to market. Many buyers will put in their offers that they don't want their Due Diligence period to start until after they've received all documents in the seller's possession. They do this so that part of their short due diligence period isn't eaten up waiting for pertinent documents. When I take a listing, the first thing I do is hand the seller a list of documents I’d like to put in a deal room. A deal room is simply an online, password-protected folder where I keep all the pertinent documents to a transaction. On this list is also a few to-dos that will boost value for the property. 

The more documents on this list a seller can provide, the more value it builds in the property because it allows a broker to inform buyers about all the excellent records the seller has, which makes the buyer feel more comfortable with a higher price and a fast Due Diligence period. It's no fun scrambling to find various documents for the buyer once a purchase contract is signed. It is much better to have already built an excellent deal room ahead of time.

 

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Your Website is No Longer Your Most Strategic Marketing Asset.

Welcome to The Local Search Economy.  Google My Business (GMB) is upstaging your community website. This spells trouble for a few reasons:  You’ve invested (and continue to invest) time and money in your website. Users form first impressions based on your GMB profile, then decide whether to visit your website. You depend on your website to generate leads and leases.  So, what’s going on?  Things change rapidly in a digital-first world. Google introduced GMB in 2014 and since then has steadily evolved the platform and its localized search algorithm. GMB is now a critical part of local search for any business with a physical location and an ideal solution for apartment marketers.  Consider the following six points: GMB is Free. Setting up a GMB profile for a physical location is free and helps ensure your communities can be found on Google search and Google maps while prospects are actively searching.  The Rise of Zero-Click. 65% of Google searches end without a click to another website, with users' queries resolving directly from the search results page. Prospects can call, get directions, view your offers and other info, right from your GMB profile. Catch prospects where they are and provide them with what they need to choose your community.   Google is (Still) Eating The World. Google dominates the global search engine market share, handling more than 92% of all search queries globally. And Google's local search algorithm favors signals from GMB profiles that are complete and consistently updated. Optimizing your GMB profile is you......
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