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Making Money is NOT Always About the Money

Making Money is NOT Always About the Money
I wanted to share with you a story of a great customer service experience I recently had with a man named Bill Moore of Softcomm Industries. I am a member of Civil Air Patrol, and as a aircrew member trainee, I wanted to stop using the aviation headsets that are in our planes and used by different people, and wanted to have a set of my own. (This thought came to me somewhere at 3,500 feet when I wondered “Who else has been using these? And did they clean them??”) I found a headset, that was perfect for my situation, on eBay at a good price and was very excited when it arrived in the mail. My excitement was tempered a little when I realized that there were no cushion pads on the ear covers, just the covers themselves. After wearing them for a bit it was clear that they could really use the foam cushions! Wah-wah.  I looked online at my usual sources and couldn't find an exact match for my headset…then I looked on the Softcomm website and saw that they head accessories (like the ear cushions) but the only indication on how to purchase them was verbiage that said, “Contact us to find the dealer near you.” So, I contacted them to find where I could purchase the cushions and I received an email from Bill that simply asked for my mailing address. I gave him my address and I assumed that he was sending the ear cushions to me, an......
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Boosting Profitability with The Rule of 150

Boosting Profitability with The Rule of 150
Determining property value is one of the great difficulties faced by multi-resident housing investors. Many investors have previous experience with other types of real estate, typically residential homes or duplexes. However, the methods used to value those properties are different and often much simpler than the methods needed to value multifamily. For example, it is generally quite easy to find the fair market value of a single family residence by using a comparative sales approach. However, investors and appraisers use a variety of techniques to determine the fair value of a multi-resident property. Among these methods, The Rule of 150 is one of the most common. What is The Rule of 150? The Rule of 150 applies to the operational profitability of a multifamily property. It suggests that for each additional $1 in monthly NOI (net operating income), the value of the property is increased by approximately $150. This rise in NOI can come in one of two ways: increasing income or decreasing expenses. How does it work? Unlike the comparative sales approach mentioned above, multifamily property valuations are primarily a function of the CAP (capitalization) rate. This method maintains that by improving the financial operation of a building, this will in turn improve its overall value and equity. The following terms and formulas will help to explain further: NOI = income minus operating expenses Capitalization Rate = a measure of the income produced by an apartment building divided by the cost of the building Simple CAP Rate Formula: Capitalization Rate = NOI/Building Value So as an example, if a property generates an annual......
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The Math Behind Rehab ROI

Rehabs present one of the most challenging pricing situations I’ve found in the apartment industry. There’s a tug of war between the business desire to allocate capital in a way that provides a measurable real return on investment (ROI) and the human desire to preside over a nicer portfolio. Candidly, I find that a lack of familiarity and comfort with the math behind ROI calculations often gets in the way—and not always just from the jobsite side of the team. The basic premise of rehabs* is straightforward: An operator invests $X to increase rent $Y, gaining a return of Z% in the process. As long as Z% is higher than the cost of capital, the overall return is positive. Seems simple enough, right? But I’ve encountered several issues that cause me to believe that operators aren’t always getting what they think they’re getting from their rehab investments. Renovations Aren’t Forever I frequently hear something like this from rehabbers: “We’re putting $3,000 into a rehab and need a 10 percent ROI. So as long as we get a $25-a-month bump in rent, we’re good.” Twenty-five dollars times 12 months is $300 a year, which is a 10 percent return on a $3,000 rehab cost. What’s wrong with that? Nothing—if you’re going to get the rent bump in perpetuity. But of course, we’re unlikely to get that—every upgrade has some life span to it, and that life span significantly affects the project’s actual ROI. In fact, there’s a good chance the units being considered for renovation have already been upgrad......
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Trade Shows: Analog Marketing in a Digital World

Trade Shows: Analog Marketing in a Digital World
In mid-June we returned from the largest trade show in our industry, the National Apartment Association Education Conference & Exposition. This show represented months of prep, thousands of man-hours, and hundreds of thousands of dollars investment. I really do love planning, promoting and attending these events, but as I decompressed from the show I wondered if the return could possibly be worth all that investment. The fun part of my trade show job as a marketer is now over. Now comes the hard part— proving out the investment. Trade show ROI is notoriously difficult to quantify. Piecing together the right metrics and measurement strategies can sometimes take months to accomplish, but if you know what you are looking for it can be possible to prove trade show effectiveness. The first thing that I want to determine is if trade shows are even worth our time. Currently 89% of marketers say that trade shows hold some level of importance and value to their organization, but only 31% say that they are vital1. In fact 40 percent of companies are cutting back on big shows in favor of more targeted gatherings, and 44 percent are choosing to host their own events such as the 2nd Annual Property Solutions Summit (sorry I couldn’t help myself). So, is the trade show world slowly dying like it showed a few years ago? Actually the opposite is true. According to the Center for Exhibition Industry Research2 the trade show industry has grown consecutively over the last nine quarters and is projected to con......
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Would You Leave the Pool Green? Why Leave Your People That Way?

Would You Leave the Pool Green? Why Leave Your People That Way?
  I recently completed a phone training workshop for an apartment association in Texas. At the end of the workshop I was approached by a woman who had a look of relief and excitement on her face. She took my hand and said, “This is what I have been waiting for!!” For the next few minutes she told me about her situation. She has been working at her community for about six months and has been struggling on the phone. She knew that she could be better, she just didn’t know how to be better. So for many months she’s been frustrated, thinking that she was the problem; when in reality, she just didn’t have the knowledge to overcome the challenges everyone faces on the phone. What I think I loved the most was as our conversation ended she said, “I can’t wait to use all of this!” No matter where I am, I always find that most people want, need and desire the tools to be able to do their jobs right. People hunger for information. They want to know what they need to do to succeed. So why do so many companies skimp on providing their people with the tools to succeed? Why do companies cut corners with their people in ways that they would never do with the physical asset? If the pool is green after a busy weekend do you prevent your maintenance team from “shocking” it, because you don’t want to spend the money? If a resident calls in a co......
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Social Media ROI: What Is It?

'Does social media turn into leads and leases?' Customers ask me this question a lot, and I have to say 'probably not.' Other than Craigslist (which isn't technically social media) and generating resident referrals through posts, social media generally doesn't create leads. We track leads for about 400 client communities, and our data shows that six social media-based leads per community per year is a good number. Why? Prospective residents seem to prefer doing old-fashioned legwork, relying on marketing, word-of-mouth and personal visits before engaging with you online. In other words, they'll engage with you when they put down roots. But it's not to say that social media pages are only for current residents; an active and responsive online community is a great draw for prospects, the virtual equivalent of smiling faces and an open door. There's more to ROI than leads. Many things that are second nature to our business have intangible ROI - newsletters, virtual tours, videos, even email. As social media becomes many people's primary communication tool, a social media presence allows you to monitor your reputation, deal with customer complaints, and proactively handle maintenance requests. Even more so, it gives your community legitimacy. In a world where apartmentratings.com scores translate into dollars, social media pages demonstrate a commitment to accessibility and transparency. Your residents 'live' on social media, and they want you there too. Social media ROI can't be measured traditionally - but it can't be discounted. Diversify your marketing investment with an ILS, SEO and other quantifiable source......
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