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Your Insider's Look: The Laundry RFP

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......
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An inside look at laundry revenue (commissions)

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......
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Important Paragraphs to Look For in a Laundry Room Lease

Greetings Gentle Readers!  Important Disclosure: I am not a real estate attorney and I only offer my anecdotal and work experience in the informational blogs I write.  Should any legal question arise from your readings please consult with your in house counsel or locate an attorney for a legal opinion.  I'm happy to give my opinion/response which is business based and not grounded in real estate law.  Here's a quick "laundry list" of lease paragraphs...this is not all inclusive as each lease may be modified and negotiated by both counter parties....but it should suffice to kick start a discussion.... Firstly, Keep in mind that the laundry vendors have written the leases they prefer to use and generally it's written to their benefit but if you read the leases carefully you'll find there are areas that are negotiable and non negotiable.   Not all laundry vendors use the same format, language and clauses so don't assume one lease is like another.   Preamble -  identifies Lessor (property) and Lessee (laundry vendor) - includes date of execution & lessor description and address,     A typical lease will include number of apt. units and identifies number of units with connections (if applicable)  - keep in mind that if you have in-unit connections for washes and dryers you present competition for the laundry room resulting in possibly reduced usage and reduced revenue.  Laundry vendors will want to know how many in unit connections are in play at lease execution.  That is a known risk.   Furthermore there will be......
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"I Quit!" Sorta...

Over the years in this industry, many of us have experienced our share of letting people go, as well as having our employees, co-workers, and colleagues let us go in turn. I’d say the most evocative way of being let go is when a Manager/Supervisor is absent from the office and comes back to find a set of keys on his desk. Sometimes this is not unexpected, although sometimes, it completely blind sides you. First off, I’d say this person has quit with no written notice. But I’ve been told this is not necessarily true. I don’t know, but if I find keys left on the desk and the employee has clocked out and left the property, it would certainly give me pause for interpretation, wouldn’t it you? I find this most often happens in the maintenance department. Truth be told, just as in real estate, this is a Buyer’s Market – and it’s no different in property management for our skilled employees. I feel like the shortage of really capable, loyal, and hardworking skilled professionals is so heavy in the industry right now that a Tech can command his price pretty much anywhere in the United States. Does that mean that Managers and companies should sit back and accept whatever demands our onsite Maintenance Techs present? Don’t want to work weekends? Fine, we’ll delegate it to other Techs and hope they don’t complain. Don’t feel like the Manager has spent enough time during the day shooting the breeze with you? Fine, we’ll make su......
Recent Comments
Mary Gwyn
Mindy, you ask so many great questions! Very relevant! We shouldn't be so desperate for skilled team members that we retain empl... Read More
Monday, 08 October 2018 09:10
Brent Williams
I've never heard of a key mulligan - that's great!
Friday, 12 October 2018 09:38
Mindy Sharp
A key mulligan is a great one, hahaha!
Friday, 12 October 2018 20:21
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Overbuilding Overblown? Apartment Markets Expand in April NMHC Quarterly Survey

Apartment markets rebounded from a soft January, with all four indexes above the breakeven level of 50 in the latest National Multifamily Housing Council (NMHC) Quarterly Survey of Apartment Market Conditions. Last year’s concerns of overbuilding or lack of capital have largely eased, reflected in market tightness (56), sales volume (52), equity financing (53) and debt financing (63) all above 50 for the first time since April 2013. “Supply appears to have ramped up enough to meet approximate ongoing demand with few, if any, signs of irrational exuberance,” said NMHC Senior Vice President of Research and Chief Economist Mark Obrinsky. “A handful of submarkets are facing a temporary surge in new deliveries that may put downward pressure on occupancy rates or rent growth. However, increased development costs could well keep a lid on new supply.” “The improvement in sales volume comes as a bit of a surprise, both because volume generally falls off seasonally at the beginning of the calendar year and because there has been a dearth of product available. It will be interesting to see whether the results are further borne out in transactions data over the next few months,” said Obrinsky. Key findings include: The Market Tightness Index rose from 41 to 56. Almost half (47 percent) of respondents reported unchanged conditions, and approximately one-third (32 percent) saw conditions as tighter than three months ago, in contrast with January’s survey, where almost one-third saw conditions as looser than three months ago. This is the first time the index has indicated o......
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Deals Drive Shake-Up in 2014 National Multifamily Housing Council List of Nation’s Top 50 Owners, Managers

A rebounding apartment industry with near record transaction levels created notable changes in the National Multifamily Housing Council’s (NMHC) newly-released 2014 NMHC 50 – the industry’s ranking of the top owners and managers.  Hunt Companies/LEDIC Managed Group Affiliates (253,295 units owned) jumped to the top spot in the owners list while Greystar Real Estate Partners, LLC (214,696 units managed) topped the NMHC 50 management list for the fourth consecutive year. Full rankings and detailed analysis is available at www.nmhc.org/NMHC50. “While rental demand continues to rise, new apartment supply still came up short. Multifamily completions came in at 185,800 in 2012 still well below the 300,000 per-year pre-bust average,” said NMHC Senior Vice President of Research and Chief Economist Mark Obrinsky. “Annual absorptions of investment-grade apartments rose by almost a third in 2013, but ultimately remained constrained by new supply. Providing further indication of continued strong demand, occupancy rates were unchanged at just over 95 percent.” “Top apartment executives looked to best position their companies to take advantage of the market recovery and larger portfolio deals and acquisitions marked the year. This level of trading resulted in more than the usual degree of shake-up in the apartment industry last year,” said Obrinsky.   NMHC 50 highlights, by the numbers: $104.7 billion – 2013 transaction levels, just 1.4 percent less than the all-time high in 2007 and $17 billion more than 2012. 110,198 – Number of units Hunt Companies added in 2013, mostly from the acquisition of last year’s number three NMHC 50 owner Centerline Capital Grou......
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ApartmentRatings.com Finally Creating a Positive Impression of Apartment Living?

Most people think about ApartmentRatings.com in a micro sort of way, analyzing their own community’s rating and that of their immediate competition.  But ApartmentRatings impacts the industry in a far greater way, by appearing to show what the prevailing opinion is on apartment living overall.  For example, if there was a rating site for almond butter and the average rating was 40% across the site for all brands, you would probably assume that almond butter as a whole isn’t very good, even if some of the brands had 90% ratings while others had 20%.  So in this way, ApartmentRatings on a macro level was shaping the debate on whether people really enjoyed apartment living in the first place.    Not only is this consolidated effect important on dictating existing attitudes on apartment living, but it also works to perpetuate those very attitudes.  Going back to the almond butter analogy, if you already knew that almond butter overall had a 40% satisfaction rating going into a tasting, you would be more likely to have a negative predisposition before you even started.  Most people follow the herd with reviews, so if there are thousands of negative reviews already, they will likely not question that assessment.  So the negative reviews themselves breed a negative perception.  This is why ApartmentRatings has been the biggest negative PR campaign the multifamily industry has ever seen. The winds appear to be changing, however, as big changes with ApartmentRatings.com, as well as apartment communities approach to reputation management has dra......
Recent Comments
Doug Miller
Great points guys. Manager Center is also great as you get notifications of postings, a basic reporting package. FYI, AR.com is ... Read More
Sunday, 29 November -0001 18:00
Doug Miller
Great conversation. Sally hit the nail on the head. I think this is where a good cross section of reviews come into play. Apart... Read More
Sunday, 29 November -0001 18:00
Guest — Jay Koster
One of the bigger problems I see with Apartment Ratings (disclosure: our community is currently sitting at 91% and was a Top Rated... Read More
Friday, 07 February 2014 15:11
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The Problem With Better: A How-To Guide For Disrupting The Property Management Software Industry

The Problem With Better: A How-To Guide For Disrupting The Property Management Software Industry
  The June announcement of Property Solutions’ new management software offers interesting possibilities for disruption. Entrata, currently still in BETA, is a one-stop-shop for operators and boasts a single platform development. Features include resident screening, portal, and CRM. Just to name a few. What seems to set the software apart is its open API, which would, in theory, allow owners and operators to customize the code to their specific needs. Entrata sounds even better when you hear the price for its "core suite" - Free. While it is still unclear what, exactly, comes with the free edition, Entrata is sure to ruffle some feathers with its new pricing model. The decision to move towards an open source, freemium model make Entrata a prime candidate for a disruptive technology. It's clear Property Solutions intends to steal away market share by simply providing a better service with better pricing. When you consider the current state of property management software, you can't help but root for Entrata to knock out the established firms. Unfortunately, "better" doesn't always convince the masses. And it certainly doesn't last. Why Better Won’t Work The problem with better is it can always be made better. Theres nothing special about better. Software teams ship better all the time - better reports, better apps, better code. Better gives no real advantage to the little guy. Better is how the established firms compete and, in all likelihood, they can ship better a lot better than an entrant firm could hope to. Different, however, is, well, different. The rules for......
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Renting to Mary Jane

I want begin this post with the observation that there is absolutely no connection between the facts that (1) I have not posted here at MFI for a while and (2) this post is about marijuana. Sometimes I just can’t think of something that is truly relevant for you to read, but then my muse does her thing (and this time my muse is DJ Ryan with the law firm of Kimball, Tirey & St. John, LLC). Speaking of relevancy, this post is for the California folks only… Medical marijuana has been legal in California for many years and if you have communities that you own or manage there, you do need to have a policy about its use on your property by residents. (BTW – I have been told that a California case precludes employees from using medical marijuana on the job.) Many California communities are smoke-free now, as result of landlord preference or local laws. Smoking is smoking – cigarettes, pipes, cigars, hookahs, roaches. You can forbid it all, but if because of a disability someone asks to be allowed as a reasonable accommodation to smoke their medical marijuana, you will need to consider that request. It is likely that unless such use becomes a nuisance (in the legal and lease sense, and be careful here in coming to that conclusion), or if it conflicts with someone else’s disability, you will need to allow this to happen. This is a complicated topic – does the smoking of marijuana leave residue beh......
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William Rhoten
Hello Nadeen, With two states making recreational marijuana legal your post may have implications beyond California. The biggest ... Read More
Friday, 07 December 2012 10:37
Green Nadeen
And hello back, Mr. Rhoten. I do believe it is perfectly OK for a landlord to "just say no" to allowing the recreational use of m... Read More
Friday, 07 December 2012 10:53
Green Nadeen
An update to the information and comments above. If you are interested in more resources for this issue, you may wish to take a g... Read More
Friday, 07 December 2012 15:07
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WHAT’S YOUR RENTAL EXPERIENCE LIKE?

WHAT’S YOUR RENTAL EXPERIENCE LIKE?
Like a lot of other nerds, I watched the release of the new Microsoft Surface tablet with much interest. Being touted as an iPad killer, there was much hype behind Microsoft's reimagining of the tablet experience. The problem, of course, turned out to be Microsoft's failure in managing that experience correctly. The reviews haven't been good. Microsoft, it turns out, spent a ton of time making sure the device felt good in your hands. They wanted the right, curvy angles for the device. They wanted the screen to blast its high def-y goodness all over you and to create a better typing experience with its touch cover keyboard. All of those things turned out to be pretty cool. The problem? The overall experience associated with using the device stinks. Why? It's slow. The software is a cross between poor design and clumsy. Already, there are defects. The price tag is too high. All of these items overshadow its cool angles with touch keyboard. They focused on the wrong things and their oversights have been detrimental to the entire Surface Experience. Let Microsoft's Surface problems be a lesson for all of you. Make sure you are managing your leasing experience effectively. Think of every leasing opportunity as its own product launch. Everything a prospect sees is part of the experience. Your phone manner must be right. Make sure you're smiling, understanding the prospects needs and showing them the best apartment. A maintenance man addressing employees inappropriately in front of prospects takes away......
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