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What Type of Commercial Real Estate Investment is Right for You?

I often get asked how I first started investing in commercial real estate (“CRE”), and of course the next follow up question: “How do I start investing?”    I think the most important facet to begin investing in CRE is to identify what your goals are.  How much do you want to invest and why do you want to invest, is it to build equity; for cash flow purpose; or are you looking for larger future appreciation?  CRE can provide an avenue of long-lasting income; it can help diversify your portfolio, it can offer tax benefits, and by using properly selected real estate strategies, it can produce the potential for appreciation, in addition to cash flow. Many first time investors in CRE immediately go to multi-family apartment buildings.  Any multi-family building with 5 units or more is considered a commercial property.   There is a comfort level for most people in that they are familiar with the leases, how they operate, and what a tenant might expect of a landlord.  This asset class however, is one where the investor is typically very hands on with the investment.  There tends to be higher turnover of the units (advertising for new tenants), make-ready of the apartment once someone has moved out, and maintenance issues (emergency calls in the middle of the night).  An area many first time investors overlook is the budgeting for capital expenditures (roof or water heater replacement, repairs, etc...).    An alternative to an apartment building is either an office or retail bu......
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Balancing the Needs of Multifamily Owners and Residents

Balancing the Needs of Multifamily Owners and Residents
When you're a third-party manager of an apartment community, you have two groups of customers: the owner of the property and the residents. At first glance, it may seem as though balancing the needs of these two groups would be difficult.  After all, their objectives are quite different: the owner wants to see consistent revenue growth, reduced expenses and year-over-year NOI growth, while the residents want a place that fits their lifestyle needs and truly feels like a home. They couldn't care less about the property’s NOI. On top of that, they're not crazy about rent increases, which owners want to see. But in the end, a third-party manager should see that the interests of these two groups really are aligned. They both want a well-run, customer-service-centric apartment community. Such a property will attract prospects and make current residents happy, compelling them to renew their leases; in turn, that will lead to strong financial performance that delivers rent growth and the returns ownership is seeking. Along the same lines, keeping both ownership and residents happy involves similar tactics. Below are some of those tactics: • Open and frequent communication. This is a big one. Residents need to be kept firmly in the loop about what's going on at their community. For instance, if the water supply to a building is going to be shut off for a period of time, they need to know as far in advance as possible. If work to the front gate is going to impact their dri......
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The 7 Habits of Highly Successful Maintenance Supervisors

The 7 Habits of Highly Successful Maintenance Supervisors
I have the honor of working with numerous Super Stars in apartment Maintenance.  They certainly had technical skills, but what made them successful were these 7 Habits I’ve observed consistently in the best of the best Maintenance Supervisors: 1.They pick up trash. When we walk a property, Juan stops if he sees that trash has fallen during the day.  I do it too. He’s not “too good” to take time for the small stuff. I admit the antenna go up when I walk with staff and they pass the trash and don’t reach down for it. I try to set an example, picking up as I go along, and respect those who do as well. 2.They do more than is on the service ticket. Mark has a couple of standard items that he and his team check every time they perform a service request. They check faucets for leaks, test the smoke detector, and check for running toilets, as well as spotting obvious problems, like worn weatherstripping.  There may be more, but these are standard items.  It saves the property money, keeps the resident safe, and demonstrates caring to the customer.  In the long run, Mark’s job is easier on the turn, since he’s taken care of problems each time he enters the apartment.   3.They communicate with residents. Marvin and his team speak to the residents they pass, leave behind information about repairs in their homes, and will make phone calls or home visits when a resident has a question about his or ......
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