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You're Selling My Property???

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......
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Are Renters Flocking to Buy Homes? [VIDEO]

Small shifts in data tend to quickly make headlines and dominate conversations. Most recently, it’s the uptick in single-family home sales creating some news about apartment renters leaving to buy homes. But it’s not a big spike – and even if it was, that wouldn’t necessarily be a bad thing for the U.S. apartment industry. Greg Willett and Jay Parsons from MPF Research explain why in this video edition of Apartment Market Dynamics.

[video:http://www.youtube.com/watch?v=CD7QPR5O1KY&list=UUyoXp1Vnx1d1sw1ZzzT2AJw&index=2&feature=plcp 433x300]


Michael Cunningham is the Managing Editor for Property Management Insider.

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Is The Landlord At Fault?

Is The Landlord At Fault?By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA I enjoyed philosophy classes in college. I enjoyed thinking about such questions, as: If a tree falls in the forest and no one hears it, does it make a sound? I enjoyed even more Bart Simpson's reply to the question: What is the sound of one hand clapping? (He immediately held up his one hand and patted his fingers against his palm, making a muted clapping sound). My enjoyment of these questions has found a natural outlet in the law. The law ostensibly provides you with an answer, whether it be found in a book, or in a code section, or recommended by experts. So it is one of those questions today that is our focus: If a tenant hurts himself in an apartment and the landlord did not know about the condition which caused the injury, was the landlord at fault? As is always the case, the answer in law is perfectly clear: it depends. There is a duty to inspect premises when the property is given to the tenant. Landlords are in the best position to assess the relative safety of the property before the tenant takes control, so they should inspect and repair as needed. The inspection should comport with general negligence principles – i.e. be "reasonable" and make it "reasonably safe." * Yes, but how do we know if it is reasonable? Well that answer is clear and simple and straightforward: it depends. It depends on the......
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If It Is Broke, Don't Delegate

Landlord RepairBy Colin McCarthy, J.D., Robinson & Wood, San Jose, CA Even after our little spigot fiasco, my father and I are speaking again. In fact, it did not take long. We both bonded over the fact that later that night, my wife and I walked out of the George Clooney movie, the Descendants. My wife and I both were bored out of our minds and had little empathy for a guy who owned all of Hawaii. I mean, really? I'm supposed to feel sorry for this guy!? Dad, being generally anti-Hollywood applauded our decision to vacate the movie theater in favor of the bar next door. We got to talking, and we agreed that in the future, it would be best if I not ask him to do repairs on our house. It's not really something I should delegate to him. We decided on the McCarthy "non-delegable duty of repairs” rule - I must do my own repairs. By operation of law in California, a landlord also has a non-delegable duty regarding repairs. If the negligent – grossly negligent one might argue – repairs my father attempted were on a tenant's dwelling that I rented out, I still would be liable for any injuries it caused. So if the tenant got hurt from this negligent repair, they could still sue me. A landlord cannot escape liability for his repair duties by having someone else do the repairs. This duty to repair is "non-delegable." Thus when a landlord hires a plumber, or......
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Painting Postcards; The Apartment Developer's Dilemma

I toured an apartment complex the other day and was asking tons of questions of my leasing agent (who knew that I was a developer and was just shopping their product). I am always struck by the wall that goes up when you ask demographic questions (I do get that that these young folks are taught to not even address these questions for fear of being hunted down by the crazy Fair Housing police). Unfortunately, as a developer, these are about the only questions that really concern me.   When choosing whether or not to undertake a $50M investment, understanding who the prospective renter is- is actually a critical part of my job. Of course there is always the basic demographic info that we get from our consultants:   Income breakdowns. Traffic counts. Local rent comparisons. Gender breakdowns. Blah, Blah, Blah…   But to best serve the community and position my leasing team for success, it’s all demographics and psychographics:   ·         What are the racial and sexual preference demographics in the area? ·         What kind of cars do they drive? Do they require regular or premium gasoline? ·         Do they wash the car themselves or use a service? ·         Do they drink beer and wine or alcohol? Which brands? How often? ·         Do they have their shirts dry cleaned? ·         What gym do they belong to? Do they go or just pay for the membership? ·         What TV shows do they watch? ·         Do they have or want to have children......
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Maximize Your Property’s “Exposure”

When’s the last time you Googled your property? What did you see? Harmful reviews that you didn’t know existed? Outdated property photos? Incorrect information? Oftentimes we get so caught up in the day-to-day operations and running our apartment business that we fail to put ourselves in the perspective of the consumer (or apartment prospect), the true reason we exist and ultimately the factor that will contribute to our successes or demise. I want to offer a suggestion—er, or rather a challenge—to all on-site professional property managers and staff: Google your property. What do you see? What might be more fascinating is what you don’t see. Generally, when a potential renter finds us from a traditional ILS (i.e. apartments.com, apartmentguide.com, etc.) and expresses interest, he or she will most likely Google that property, look for reviews and other insightful information that will guide their decision. On the flipside, prospects already aware of a community’s name might bypass an ILS, and Google a property’s name to gain knowledge. This is where savvy on-site staff can truly shine by utilizing all outlets available to flood a search engine with pictures, amenities, and language that can sway a prospect to rent. So, what will you find when you do a Google search? The other day I Googled my own property for the first time and I was introduced to a plethora of advertising outlets that I didn’t even know existed. And the best part, they were all free! Here’s a few that will likely pop......
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Open The Window of Opportunity with Owner-Financing

By Linda Day Harrison, theBrokerList, Chicago, IL Today more than ever, many people do not have traditional sources of employment income. With the job market shrinking, many of us are working for ourselves and are creating jobs by starting businesses and new ventures. With that being said, how does a self-employed individual purchase a residential or commercial location with the stringent financing requirements currently in place? Simple! Look at properties with owner-financing. What is owner-financing? Owner-financing is when the seller of a property is in a position to act in the capacity of a lender. The seller accepts a down-payment and an agreement for repayment. The advantages are tremendous and can be a win-win for both parties. Advantages include: More favorable rates and terms. Easier qualification process. Able to sell a property in a depressed market. Seller can get a much higher return than other vehicles such as a CD. Seller can receive a substantial down payment. Tenant can now become an owner. Less closing costs. Now like anything, there are many pros and cons depending on each seller and buyer's tax consequences and personal financial situation, including whether or not the property is held free and clear. Owner-financing should definitely be a serious avenue to consider when selling a property and when evaluating your lease vs. purchase decision on residential or commercial property. An attorney is needed to assist in the process and as a buyer, you should still do your homework, via a due diligence period. Whether buying or......
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How to Use Due Diligence to Expose Business Landmines!

By Jo-Anne Oliveri, ireviloution intelligence, Brisbane, Australia Sadly, when carrying out due diligences many agents buying a rent roll are not sure what they are looking for. This lack of understanding means most pay a hasty glance over files and computer reports. On the surface they all look fine, but it’s a bit like an iceberg, we need to understand what looms below. We are all in the industry because we are good sales people. Ultimately, isn't this industry all about our ability to sell? Yes, we promote the best features and benefits of our products and services, but as selling specialists we also need to understand that whilst it looks good on the surface, there may be landmines below. I’m not saying don’t buy rent rolls, just be aware of what it is you are purchasing. So, the first thing is to understand due diligence. There are two kinds of due diligence – financial and operational. When purchasing rent rolls, financial due diligence is undertaken by a valuer. In many instances, the valuer is engaged by the bank to conduct an evaluation of the business prior to lending. If you are not borrowing for the business, I recommend a financial due diligence be conducted nonetheless. Operational due diligence is the second type. This is just as critical as the financial due diligence. Not having an operational due diligence prepared would be like buying shares in a company that is on the verge of bankruptcy and hoping a healthy bottom line......
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Telling Tall Tales; The Apartment Developer's Dilemma

When recently asked about which skill I felt was the most important for a real estate developer to possess, I was stumped for about thirty seconds (which is an eternity when someone is staring at you and waiting). My mind raced. How could I not just rattle-off something well thought out and brilliant? Shouldn’t this be a question that every developer must be able to answer without flinching? Well- I flinched. But at the end of that short eternity, my answer was ‘They must be great storytellers.’    I say this for one simple reason: At his most basic level, the developer is a master salesman. We sell our visions and dreams to our investment committees, the communities in which we work, municipalities, equity partners and debt providers, and eventually to the end user.   So what makes someone a great storyteller?   1.       VALUES. More specifically, understanding what your audience values. Unlike a Dr. Seuss fairytale, the developers’ story is intended to illicit a response. It is designed to excite and sway the audience to allow us to build, help the designers understand our vision, invest in our project, lease or purchase from us, etc.  Our story will only connect with the listener if it appeals to what they value. For instance, telling a County Commissioner about how much money you stand to make will not excite them…hearing that same story, your equity partner will be quite pleased. 2.       FOCUS. A good storyteller understands that they are only providing a framework......
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How To Handle An Abandoned Property

By Carla Toebe, New Century Realty, Kennewick, WA They say that abandonment is a landlord’s or property manager's worst nightmare when dealing with a tenant. How do you know it is really abandonment? Sometimes it’s obvious when everything is gone, the place seems perfectly empty, and the tenant's keys are lying on the counter. But what if the place is full of furniture, the food is still in the cupboard, and you can't get a hold of them? They haven't paid their rent, they haven't returned your phone calls, no one has seen them, and you can't get a hold of anyone on the emergency contact form you had them complete when they moved in. Surely this means they must have abandoned the place. So you change the locks, and uh-oh! There they are coming back claiming you have now burglarized their place. Oh no! This can't be, they clearly abandoned the place and you took all the steps you had to take that were required by law. Maybe it isn't that clear cut. Maybe a tenant still has some rights. Now you are facing penalties, a criminal investigation, and a whole slew of troubles you never knew you had. Let's back up and figure out how to determine that this is really abandonment and you have the right to take possession of your unit. You spelled out what abandonment was with your tenant and you had it written in the lease, right? Good, well at least you tried to get......
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