Aparments for Sale

There is a lot in the news lately about how great the market is for the acquisition and disposition of multifamily assets. You see the big players out there “wheeling and dealing” getting in on the action and proudly announcing their companies being assigned new properties in receivership. But no one ever talks about what happens to the onsite team caught in the middle. No one ever discusses how they weather the storm, the upheaval of not knowing what is going to happen next, and how to transition through the changes.   “A Negative Thinker Sees a Difficulty In Every Opportunity.” Well, I can well imagine how the onsite team might fall into this trap. After all, sometimes completely out of the blue you are told, usually in an impersonal telephone call, that your property is for sale. Maybe you did have a faint inkling it was coming, maybe you didn’t. Either way, most people will internalize this news and rationalize a plan of action.   The onsite team may well first think, “What will happen to us?” followed quickly by “What will happen to me?”   Change is difficult. Everyone understands this, but the questions a sale raises can blind any employee into not being able to see the forest for the trees. With today’s economic climate, employees may well worry about their financial well-being. They begin to worry whether or not their paychecks will be good, whether their current company will honor their accrued sick and vacation pay, whether......

By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia I’m sure you are beginning to understand the vital importance of an operational due diligence being conducted prior to your offer to purchase a rent roll becoming unconditional. Once that contract is unconditional you are bound to proceed with the purchase regardless of how inferior the business is that you are purchasing. Yes, I understand that in most purchases there is a retention period, usually three months (again, this is a time period I do not agree with) whereby you have the opportunity to not pay for any managements that you may lose in this period. But, under normal rent roll contracts it’s fairly standard that a percentage of the purchase amount is usually withheld in a solicitor’s trust account and is released when the retention period has expired. Some agents believe this period is their safe guard. Well, I’m here to tell you that you must not be lulled into a false sense of security and, with that said, I feel another article is worthy of this subject. This post focuses on what I refer to as the “critical factors” that need to be investigated when conducting an operational due diligence. These critical factors are: Average management fee Average distance to property ratio Average weekly rent Management splits (percentage of houses and apartments) Number of owners against properties under management and how many are multi owners (including details of each owner’s actual number of properties) Percentage of fixed term leases Monthly disbursement methods......

By Ben Holubecki, STML Realty Group, Glen Ellyn, IL Over the past four to five years, I have been posed all of the questions asked of many business owners in the real estate industry. How has the downturn in the economy hurt your profits? Has the housing collapse crippled your business? What about the high unemployment rate? My answer to these questions has been consistent throughout all of these turbulent times. Business is great, and consistently so. I usually walk away from those conversations feeling fortunate to be a part of a strong niche within a deeply depressed industry, and I think many good property managers feel the same way. However, I don’t know that we give a lot of thought to how profound external factors affect our industry. The recent announcement by President Obama regarding expansion of the HARP (Home Affordable Refinance Program) got me thinking about the ramifications for the property management industry as well as how the housing collapse has shaped our industry overall. One factor that seems to be absolutely clear is that the U.S. government’s incompetence and inability to stabilize the housing market continues to drive the residential property management industry forward. I was first exposed to the property management industry during the apex of the housing boom. It was a time when everyone had equity, mortgage approvals and refinances were easy to come by, and anyone with a few dollars in the bank was trying to rehab and flip property in their spare time. The portfolios of......

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA You don’t have to be a homeowner to have heard the term “short sale”. It’s one of the most widely used terms in the real estate industry these days, and unfortunately, it’s also a term that many renters are starting to hear more of as well. The prolonged economic downturn that engulfed the real estate industry, starting with the subprime loan debacle, which rapidly resulted in mass foreclosures of adjustable rate home loans, has now inevitably morphed into the “short sale” frenzy of the 20% down conventional homeowner. Unfortunately, many of the affected properties are the homes of renters who abruptly find themselves caught in between the bank and the landlord’s hardships. The typical scenario is as follows: An owner/landlord carrying an upside-down mortgage on a rental property finds himself under financial distress due to the economy. The landlord tries to hold onto the property for as long as he can only to realize that it’s either too far underwater or the loan modification offered by the bank isn’t going to reduce the monthly mortgage payment enough to help him through his current financial situation. At this point, it’s either foreclosure or short sale, and currently, most banks are starting to favor short sales. Either way, the unaware tenant is typically left with minimal notice to relocate. So, what can you do if you find yourself in this situation? Tenants do have rights, and even though you may not be ab......

About six months ago, I wrote about the changes I was seeing in marketing,  concessions, and targeted prospects in my specific comp market... It was suggested to me that I complete a follow up to Prostituting the Product.   So away we go... In the merry adventures of market comp re-shopping, I was astounded to see that very little has changed locally.  Unfortunately, my market suffers due to influx of new multifamily builds and increasing home purchases, which has reduced traffic across the board and continued to train prospects to expect the very best in concessions. Seemingly, product quality is not at the forefront of the shopper's mind; "concession, concession, concession" continues to blink about as a strobe-light of expectation... Of my market comp's, Rental History continues to fail the mark.  Gone are the days of taking serious rental verification... instead what I heard was:  "Well.... if the writ wasn't processed..." or even better yet was, "We're giving away clean slates, here at...". I continue to be dumbfounded.  If a prospect can't pay previous property management, how can you expect to be any different (Note:  Reference the definition of "insanity").  Trust me, I get the concept of hard times.  I even get the concept of the resident that is consistently late but always comes through.  But what I fail to get is the turning of the blind eye to what seems to be an obvious mistake in decision making. Credit has also taken a direct hit in terms of importance.  My......

By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia Property management… just mentioning those two words usually sets off a plethora of comments, memories and grunts. Most of them are bad memories and grunts of frustration, annoyance and mild to wild anger. Yep, this sector of the real estate industry has grown up to be like the delinquent teenage child who is hell bent on causing pain and humility, rebellious in every sense of the word. You only have to ask around to discover that this is a problem the world over… yes, that’s right, the world over. Why? There are many reasons why, but the good news is there is no need to be seen as the delinquent and rebellious child anymore. Property management is set to become the golden child of every real estate business. For those agencies that don’t provide leasing and management services it’s time to sit up and listen. It’s time to feel confident in knowing that as a business owner you can design and deliver the leasing and management service of your choice. It’s important to truly understand what we mean when we say the world is changing and so is the industry. Real estate businesses can no longer rely on commission from property sales alone. The last few years have highlighted the vulnerability each and every real estate business faces. First there was the Global Financial Crisis (GFC). The GFC should have been the wake up call to every real estate business owner needing to understand that ......

By Ben Holubecki, STML Realty Group, Glen Ellyn, IL I’ve always had a lot of respect for professionals who truly learn from their mistakes.  Many of the top companies and executives in the world admit that they have made plenty of them over the years.  What sets the successful companies apart from the unsuccessful ones is the ability to immediately make adjustments and avoid making the same mistake twice.  It can be costly to make an error on the job but it can be devastating to repeatedly make the same mistake over and over again.  That’s why I sat down last week to reflect upon a recent string of lost property management accounts. Those of us who manage properties owned by others all have our steady, long-term clients.  These are the ones that we can count on.  We depend on them to provide the residual revenue that drives our business and allows us to operate on a monthly basis.  These owners generally defer to our decisions, believe in our process, and most importantly trust us to manage an important part of their investment portfolio.  In our experience we have found a common theme that runs along with most of these clients.  Ground rules and expectations were properly set at the beginning of those business relationships.  Although there are always ups and downs involved in managing any relationship when you are playing with someone else’s money, those hurdles can often be overcome if guidelines were properly established at the beginning of the relationship.  If ......

By Peter Lamandre, Better by Design Real Estate, Scranton, PA Whether your portfolio is made up of large complexes or scattered smaller units, performing unit and site inspections is an important value-added service that a property management firm provides to their clients. It is also one of the more time consuming aspects of our daily jobs. Performing the inspections requires scheduling with tenants, documenting observations, and follow-up on deficient items. It is also crucial to have the historic inspections readily available to reference changes in conditions. Over the years my firm has tried numerous variations on a rather routine process; from the traditional pen and clipboard documenting observations on standard forms to utilizing digital cameras and even portable video. Recently we have been testing and are just rolling out a new process for conducting inspections. A fully digital and paperless inspection process; allowing for a swift method to memorialize observations by following a consistent process. With the advent and proliferation of smartphones and tablets in the marketplace this process is becoming more streamlined. As an avid iPhone user the apps we use are iPhone/iPad based. However searching though your application marketplace I am sure you can locate apps for windows and android based devices as well. A few helpful apps that you may want to look are: Tap Inspect. Tap inspect is a free app that allows you to customize the inspection process and deliver customized reports directly to your client from the field. You can include photos of the property and ......

By Peter Lamandre, Better By Design Real Estate, Scranton, PA I was out and about this week and while on the interstate I pulled behind a contractor that had a QR code on the back of their tow trailer. While I applaud them for embracing an emerging technology, it occurred to me that that may not be the best application of a QR Code. Some of you are probably wondering, “What the heck is a QR Code?” QR code is an acronym meaning Quick Response code. It seems as though QR codes are the latest rage in advertising. But what are they? Without getting into the computer advantages of using QR codes versus standard bar codes; they are in essence a 2D bar code allowing you to pack a large amount of information in a small space. The QR code was invented by a subsidiary of Toyota in the mid 1990s for tracking parts during shipment. The format of the code allowed machines to quickly scan and track parts on a conveyor belt and route their destination accordingly. Fast forward 20+ years and with the proliferation of smartphones with cameras what was once a way to track machine parts is now the hottest new way to pack more advertising into smaller spaces. Would you rather see this… FOR RENT 3 BR, 1BA ½ double $xxx/mo plus utils call for details XYZ Management, Inc maybe with a picture, a phone number perhaps a website, etc. or A single image that when scanned......

As smartphones rapidly flood the market, businesses are increasingly looking for ways to bring their companies and processes mobile. Androids, iPhones, and Blackberries all allow users to perform a variety of processes straight from their mobile phones by incorporating functionality that was primarily limited to PCs just a few years ago. Though there is conflicting information out there regarding the degree to which smartphones have permeated the market (Nielson estimates that one out of every two Americans will own a smartphone by the end of 2011 while Forrester Research estimated that only 17 percent of Americans had smartphones in September 2010), there’s still no denying that mobile is the wave of the future. It’s important to at least begin thinking about how this technology will ultimately fit into your business plan. When it comes to apps, the sky’s the limit. You can build an app that will allow potential tenants to search your rental listings. Or, alternatively, you can build an app for tenants (this makes more sense for larger property management companies) to communicate with you, find information, file requests, or even make payments. According to BusinessInsider.com, when deciding to build an app, it’s important to consider three main questions: What is the key benefit I want users to get from using this app? What other apps exist that are competitive and why will mine be different? What is this app going to do for my business? For some ideas on how property managers are already using apps, be sure......