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Postmortem; The Apartment Developers' Dilemma

Regardless of our role within an organization, we will be asked throughout our careers to participate in, lead or evaluate various corporate initiatives. After all, most of what a company really ‘is’ is a series of interrelated initiatives.  These could range from the acts of sales, operations, marketing, and acquisitions to finding efficiencies, fixing problems launching new products, etc. Generally we would like to succeed in whatever initiatives we are involved. And hopefully we have positioned ourselves for success through our understanding and expertise, our dedication and will to succeed, and our preparation and focus. Additionally we may have benefited from multiple books, papers and degrees which exist to provide us tools or help train us to succeed at whatever task we undertake. But invariably, there will be times when success is not an option or when we fail after seemingly doing all of the ‘right’ things. In those cases what do we do?   Our next step should be to perform a postmortem. Think of the postmortem as a forensic analysis of the results of the initiative. Admittedly, the specifics of every project are going to be different. But if we were to approach each postmortem as its own totally unique situation, then it would virtually be impossible to be efficient in our analysis. Over time, we also need the ability to connect the information that we gain to make better future decisions. This is the exact same process that our minds go through as the act of learning. The probl......
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Who Stole My "Community?"; The Apartment Developer's Dilemma

No matter what our role is within the multi-family industry, there is always one word which is used more than any other; “community.” Some of us own communities, some of us develop communities, some of us design communities and others of us lease or operate them. And chances are that many of us live in an apartment, condominium or townhome community as well. So then why is it that there is so little ‘community’ in our communities? When it comes down to this failure’s root cause, it can really only be one of two choices; a.       Either the management team does not expend their energies in a manner that creates a welcoming and vibrant atmosphere that encourages interaction, or b.      The developer did not guide the design in a manner that supports congregation. Now because I am an owner and developer by trade and not a manager, my expertise is limited when it comes to the nuance of property management. I am positive that I undervalue the challenges of those on the front lines. But where I do have some insights is on the development side of the industry. I have mentioned in multiple other essays that the developer has become effectively a highly functioning project manager. We have lost our intellectual curiosity about how folks ‘actually’ live. We have lessened our study of the ways that neighborhoods, communities and cities are formed, only to concentrate on sharpening our excel acumen and expand our address book of consultants. Instead, we generally......
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Form 1099s & Year End Statements

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA For property management companies, the month of January signals a time to prepare and issue year end statements to their clients for tax preparation purposes. Consequently, each January the IRS requires that any taxpayers who have made payments in excess of $600 to workers that are not considered employees must prepare Form 1099 – Miscellaneous Income. Property management companies are also federally required to file Form 1099 for their clients regarding rental income received throughout the year. In addition, copies of this completed form must be provided to the IRS. The IRS compares the payments shown on the information returns with each recipient’s income tax return to determine whether the payments were reported as income and done so properly.   The filing deadline for Form 1099 is January 31, 2012. The IRS also requires that you file a Form 1096 to identify all of the Form 1099s. The filing deadline for Form 1096 is February 28, 2012.   Failure to issue a Form 1099 and file Form 1096 results in penalties and potential disallowances of deductions for those amounts paid. Thus it is imperative to comply with these filing requirements. In years past, SDP Management would spend a lot of time and resources preparing large bulky paper laden year end packages to meet these requirements. The packages, which contained printed year end statements and other tax required documents, would detail the properties prior year performance and provide necessary documentation for......
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Walkway Liability

It may have taken a while to get here, but winter is upon us.  If you are lucky enough to live in a warm climate city, you don’t have to worry about snow removal.  But for the rest of us, winter means investing in a durable pair of boots, warm gloves and a shovel.   Although every city is different, most have an ordinance or code about keeping walkways clear during the winter.  As a property manager or owner, it’s important to stay informed on your city’s policies concerning who is responsible for snow removal, when it has to happen and to what extent.  It’s possible to be held liable if someone slips and falls on your property or a walkway that you are deemed responsible for clearing.  Your city should make this information public and easy to understand.  For instance, the Chicago Department of Transportation has a website, pamphlet and video explaining the importance of snow removal for residents and businesses.  The City of Denver lays out how they enforce their snow removal policies and what their consequences are, while the City of Boston gives clear Do’s and Don’ts.  Visit your city’s website to read about ordinances specific to you.   As timing of snow cleanup is addressed in most ordinances, it’s a good idea to keep salt and a shovel handy at your property when the winter months hit.  Keep a couple snow brushes available for your residents to borrow from the leasing office as well, in case they......
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Social Media means having our residents market for us. Don’t be scared…

It seems like over the past five years or so, an infinite number of marketing channels have emerged. We bought pages on listing sites, then we created our own property websites.  Now web pages are generated for our property just by having a resident “check in” on Facbook or Foursquare.  Seriously!  This makes it extremely challenging for an apartment community to have one coherent brand on the web. So what’s a marketer to do? First, claim your facebook page! This can be as simple as going onto facebook and searching for your property name to see if it has already made its way onto Facebook without your knowledge. If you see your property in the search results, click on it and take a look… It probably says X number of people like this, Y number of people are talking about this, and Z number of people were here (where X, Y, and Z are real numbers). This is because everytime someone adds an interest to their profile, Facebook automatically creates a landing page for that interest. So if they like where they live… Bam, landing page!  The same thing happens if someone checks in somewhere…it will add it to an existing page or create a new one.  While it feels like this is totally out of your control, don’t worry – it’s actually a GOOD thing. It means (a) your residents like you, and (b) they’re telling their friends about your property (by virtue of publically checking in).  So how do y......
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Single Family to Multifamily (Apartment) Investing, Making a Successful Transition

fishmakingtransition  “If you are not getting bigger, you are getting smaller.” We’ve all heard the quote in business, but have you applied it to your real estate investing career? If you’ve been investing in real estate for awhile, this article is for you. It’s time you take the next step in your investing career. It’s time to use all the knowledge you’ve learned over the years in single family investing and apply it at the next level. It’s time to go from single family to multifamily real estate investments. It’s the logical next step. It will accelerate your wealth and grow your cash flow. There has never been a better time. Are you ready to take the next step in your real estate investing career? Are you ready to go from single family to multifamily investing? If so, there are a few things you need to know so that your jump has a smooth landing. Here are 5 key differences you must know to make a successful transition from single family to multifamily investing: How to determine value. One big difference between single family and multifamily investing is how value is determined. Single family home value is determined by looking at sales of comparable homes. Homes can also be priced per square foot. Apartments are not priced by looking at similar property sales. Multifamily property value is determined by the income it produces. How to read a financial statement. To be successful in multifamily investing you must know how to read and evaluate an investment property’s financial statements and understand the metrics ......
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Do Short-Term Rentals Make Sense for Property Managers?

Short-term rentalsA guest post by Ashley Halligan, Analyst, Property Management Software Guide Short-term rentals, of all natures, have become a hot commodity – and a controversial one at that. Short-term rentals can include vacation rentals and temporary housing, often sought by vacationers, business travelers, or people who have recently relocated while seeking long-term living arrangements. Either way, it’s become an ongoing topic of debate and an attractive investment opportunity for property owners and managers. In comparison to traditional rentals, short-term rentals can charge significantly higher rates given their nightly and weekly availabilities. Some property owners have earned as much as 25% of their mortgage in a single night. And during special events or peak rental periods in a given area, potential rental rates can be very attractive to property owners. Because of the income short-term rentals can procure, the opportunity for profit potential may be exponential – but there are several considerations that should be kept in mind. First and foremost, it’s essential to keep the added costs of maintaining a short-term rental in mind. These rentals can be subject to Hotel Occupancy Taxes in certain cities, while other cities require specific licensures and inspections not required of traditional, long-term rentals. Penalties for not abiding by short-term rental laws in your city may result in hefty fines. There can also be increased insurance costs. Additionally, the cost of regular upkeep and maintenance, including utilities, should be calculated. In order to continually attract tenants, your property must be kept in prime condition, both functionally and cosmetically. F......
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Team Building III (the final chapter); The Apartment Developer's Dilemma

In this, the third and final installment of the Team Building series, we are going to hone in on the key skills to identify and quantify when hiring a young developer. As we recall, in the first chapter we discussed the three key indicators of success; The Get-It Factor, Communication Skills and a History of Success. In the second chapter, we introduced our ‘toolbox’ and explored the difference between hard-skills and soft-skills (i.e. the tools). As we previously mentioned, between hard and soft tools, the soft ones are more critical because they are more difficult to develop. This fact doesn’t make them more important in the long run- but a young developer with a strong soft-skills base will generally be much easier to train successfully than one who relies heavily on the hard ones. The irony is that our profession most heavily respects hard-skills.   So what are the key soft-tools to hone for a developer’s toolbox?   Clearly we all possess multiple soft-skills with varying degrees of proficiency. Within the limits of an interview process, it is impossible to identify them all. That is why there are a few which are both critical and identifiable. The top three of these are:   Comportment. The way that an individual behaves and carries them self is indicative of a number of other key qualities. Do they speak clearly and concisely?  Do they maintain eye contact? Are they well groomed? Does their appearance indicate an attention to detail? Are they deferential, or aggressive,......
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The Most Wonderful Time of the Year; The Apartment Developer's Dilemma

Let me begin by wishing you all a very Merry Christmas and Happy Hanukkah. For those of you who regularly read my scribbles, you are used to some pretty meaty topics. In light of the Holidays, this one will be a bit frothier. In each blog that I write there are certain themes which remain pretty consistent. One of my favorites is that real estate development is about the coolest industry on the planet. After all, our job is to make the world a better, more usable, more beautiful place.   Often my intended audience is the real estate developer (my hope is of course that there is some part of my subject matter which translates to my non-developer audience- or at least helps you better understand those temperamental developers who constantly tell you ‘We can’t afford that.’). Today, I would like to remind us all of something that is very easily glossed over as we perform our day-to-day tasks.   No matter what our role in the industry, we have a hand in something very precious. Through our daily work (whether it is building, developing, leasing, managing or maintaining) we have a definite and real effect on people’s lives. We provide the backdrop in which our residents and neighbors work, play, rest, are made safe, fall in and out of love, have babies, spend their final years, argue and make-up, worship and congregate and pursue their individual goals. And while we don’t necessarily know which combination of these that they are ex......
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Fun Ideas for the Holidays at Your Apartment Community

With the holiday spirit all around, this is a great time of year to get your residents together and show them your appreciation.  Here are a couple fun ideas that you can do around your apartment community:   1.       Resident gifts:  A small gift for your residents is an easy way to say thank you for living in your community and the holidays are a great time to surprise them.  Order T-shirts or sustainable bags with your branding on them for each resident.  Print some festive notes to say Happy Holidays and put them in your resident mailboxes.  Each resident can use the note to redeem their gift from the leasing office.  This would also be a great time to have them update their contact information with you.  Your residents will love their new swag and your branding will be all over the city. 2.       A hot drink on a cold day:  The weather is getting colder (in Chicago at least) and everyone likes a nice warm drink on a bitter day.  Set up a table at the front gate or leasing office to hand out free coffee or hot chocolate for a day.  Make sure to promote the event, so residents don’t make their own cup that morning.  Everyone will start their day off right, thanks to you! 3.       Host a white elephant:  It can be hard to meet your neighbors, especially if you live in a large community.  Host a ‘Meet Your Neighbors White Elephant’ in your community room. ......
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