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The Not So Obvious Clause That Every PSA Needs


You must add this clause to your next purchase and sale agreement to avoid uncomfortable situations that threaten your reputation. Most of the time challenges that come up in a transaction are for the most part pretty common. You learn from them and are able to predict if it might happen again in another transaction.

Listen to a story of a recent deal that hammers home why you need to add this clause to all future PSAs. Definitely a lesson learned for all parties, and something I will be adding to my process as a normal course of a transaction.

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Top 5 Value Add ROI Projects in Multifamily Real Estate


We dive deep into the Top 5 exterior value add projects in multifamily real estate that have the greatest return on investment. You don’t have to do interior renovations, except make the units really clean, if you’ve done great exterior upgrades. You’ll never have a shot at leasing to that tenant if they don’t love the outside while driving by. We brought in the creative value add master himself, Jason Schaller, to give us his Top 5 value add ROI projects in multifamily real estate. If you’re an investor in the central and north Florida markets and you don’t know Jason, you sure as heck should. Jason Schaller is the Founder and Principal of The Schaller Group, a design, construction, and creative agency. He is also a partner with Peacock Capital, a multifamily investment company that has purchased and operates 33 apartment communities totaling 1,300 apartments in just the last 5 years with 500+ additional apartments under contract and 5 development sites in the early stages of development. I’ve had the pleasure of brokering a number of those deals with Jason and his partners. Prior to forming The Schaller Group, Jason was Vice President and Managing Director at McKinley, Inc., a $4.6 Billion Dollar real estate company based in Ann Arbor, Michigan where he worked for over 18 years. He was responsible for leading property management operations, sales, marketing, branding, due diligence, acquisitions, design, construction, and redevelopment throughout McKinley's National Real Estate Platform. He was directly responsible for the operations of a 12,000+ Uni......
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Will Multifamily Real Estate Housing Crash in 2022?


I have some very strong predictions about whether there will be a multifamily real estate housing crash in 2022.

Will there be a multifamily real estate housing crash in 2022? Hell no! Here are the reasons:

  • We need to build 325,000 new apartment homes each year on average, which we haven't done since 1989. We only did 289k in 2020, which was an extremely active year by any standards.
  • We need to build over 4 million apartment homes by 2030. And another 10-12 million apartments need renovation during that time. We aren't even close to being on track.
  • Immigration is predicted to account for half of all new U.S. population growth through 2030 and immigrants mostly rent.
  • For millennials 22-37 most common form of living is renting.
  • Seniors are choosing the convenience of apartment living over ownership.
  • Renters in the U.S. are near 39 million people, which is about 1 in 8!
  • Even if home prices flatten or go down in 2022, which is highly doubtful, they still won’t go down anywhere near enough to then shift renters to buyers.

Hear more in the video: 

 

 

 

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Selecting Rental Comps & Rent In Multifamily Real Estate


Determining rental comps to use when valuating multifamily real estate is highly important. Especially when you're looking to add value to the asset after a renovation. Part of the process involves some sort of online membership-based software that can query all the assets in a market. Some of it is a gut feeling about whether a comp matches and some of it is an investor's knowledge of the market. This is how I select rental comps and post renovation rents when underwriting multifamily real estate assets. As a broker listing multifamily real estate assets for sale, it is imperative to select the right rent comps to prove achievable rents to the buyers. Buyers aren't stupid. They are going to recognize if a broker is choosing assets way better than the subject in order to sell the idea of higher rents. I use Costar to narrow down the initial field of assets based on the unit count, age, unit mix, and location in the market. Any similar program to Costar can do the same trick. After looking at the initial list of assets from the above search on Costar, I then use my market knowledge and gut feel to eliminate any remaining assets I know are not a close match. For the remaining comps, I typically put them in an excel spreadsheet and rank each one as 1, 2, and 3 with 1 being the closest matched asset to the subject. I place more weight on the 1s and the least weight on......
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We Really Need to Talk About that Dorm Project with No Windows

Student housing design is an evolving art.

What amenities will attract the most renters? How about smart tech? Or offering virtual tours? Maybe taking away windows?

*Record scratch*

*Freeze frame"

I bet you're wondering how we got here...

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The Law Of The Big Mo (Momentum) In Multifamily Real Estate


In multifamily real estate when an investor has built momentum, they are extremely hard to compete against. Every broker and seller wants to do business with them. In this video we discuss The Law of The Big Mo as author John C Maxwell calls it in his book The 21 Irrefutable Laws of Leadership.    Below are THE 7 KEY FACTS ABOUT MOMENTUM from John Maxwell's book: 1. MOMENTUM IS THE GREAT EXAGGERATOR When deals are being brought to you, and you’re closing, and more investors continue to give you money, and management is managing well, momentum makes it look even better. In contrast when you can’t find deals, and nobody is bringing you any, and you’re in a dry spell for closing, and you can’t find equity, momentum makes you look even worse. 2. MOMENTUM MAKES LEADERS LOOK BETTER THAN THEY ARE The more deals you’re closing on, the more brokers and sellers are wanting to bring you deals. The world forgets about how long it took you to get there, all the bids you lost, a moment or two you had to retrade, etc. 3. MOMENTUM HELPS FOLLOWERS PERFORM BETTER THAN THEY ARE When you’re acquiring more deals, and they are being managed well, and rents are increasing, and your value add program is working, your staff becomes inspired to perform at their highest levels. It becomes contagious. 4. MOMENTUM IS EASIER TO STEER THAN TO START Momentum is hard to get started but all elite investors found out that once a......
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When and How Much Should My Community Charge for Parking

When and How Much Should My Community Charge for Parking
"How much to charge for a parking space" is a common concern we hear on a frequent basis. A lot of communities, specifically in the multifamily industry, struggle with knowing how much and when to charge for parking due to the concern of negative response or backlash from residents. It is an unfortunate reality, that offering free parking at a community such as an apartment complex or shared condo parking lot can lead to numerous issues and even place a higher long-term cost on the local community itself. Overcrowded lots result in unhappy residents that spend additional time searching for parking; which is just one issue that can arise when there is no cost tied to parking a vehicle onsite. Parking Lot Supply and Demand Considering if a multifamily community or apartment complex has fewer spaces than it has units or is above the average of 1.88 vehicles owned per household (according to the U.S. Department of Transportation), the demand outweighs the supply causing a parking deficit. This results in parking problems such as residents wanting to park their vehicle close to their own home only to find out the space has been taken by a neighbor's guest who has been occupying the space for far too long. This can be managed effectively by pricing out permits based on the deficit. Every city has building codes which allocate a specific number of parking spaces per unit, however depending on the data that was used at the time of construction, this may......
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Five Benefits to Paperless Parking

Five Benefits to Paperless Parking
More and more companies every day are switching to paperless parking solutions, whether it be a condo or HOA, multifamily complex, or a business center. Not surprising either, considering the many advantages. Here are just five ways you can benefit with paperless parking permits. Environmentally Friendly Everyone is concerned about the environment nowadays, and rightfully so. Reducing paper waste, reducing deforestation and pollution, etcetera. The worries and struggles of endlessly printing out paper and stickers for residents and their guests will be totally negated, contributing to the elimination of the paper waste. This change will make a substantial difference for every leasing and management office. Ease of Access & Use Not only can going paperless can earn you points for being more environmentally conscious, it will save you time from having to issue and re-issue parking permits over the span of a day. You won't have to keep your binder full of hang tags anymore. And, just think of the never-ending task to record and keep track of vehicles associated with those hang tags. The burdens associated with distributing physical parking permits are phased out once you switch to a paperless parking system. Especially when it comes to guest parking; residents and guests will now have 24/7 access to purchase their parking permits, allowing communities to maximize on ancillary revenue even when the office is closed. Resident Satisfaction Our quality of life can be greatly improved upon in the digital world. This no doubt includes paperless parking permits, where residents or......
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We As Americans Love A Good Come Back Story. This Is Ours.

During my years in the business, I have seen and weathered multiple downturns in our economy; though nothing has been quite like what we’ve all seen the last few weeks. The past downturns that I went through were financial related for the most part and took time to come together, this however, is a health crisis that is creating financial hardships, many of which are yet to be seen that may in turn be difficult to recover from.  If this is your first experience with an economic downturn, I believe you are about to witness an incredible comeback. Don’t get me wrong, I am not saying this will happen overnight or even the next few months, this will take time and a maximum of effort. I have seen people sacrifice a lot over the last few weeks, strangers helping strangers do things they probably would have been less likely to have done before.  Times of crisis really show you who people are, and, in this crisis, I have seen a lot of support, creativity, generosity and kindness. If we maintain this mentality, we can all continue to work together and get most everyone back on track, building our businesses and our economy once again. I do believe that we as a country are realizing how important we are to one another. The people that we see daily on TV, social apps or movies are not the ones saving our country from devastation, it’s the people that normally run behind the scenes and j......
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Tips to Respond to Coronavirus Related Online Reviews

Tips to Respond to Coronavirus Related Online Reviews
In the wake of the COVID-19 pandemic, with stay-at-home orders in 31 states and counting, an increased number of families are confined to their homes. During such times, the on-site property teams and resources are likely to be tested. Reviewers are complaining about the property teams not doing enough to combat Coronavirus or lack of accommodations by the management when it comes to rent payment. On the bright side, residents are quick to point out positive actions such as the “manager handing out pizza and sanitizers.”  As you work frenetically to manage this crisis and the effect it may have on your online reputation, how can you effectively respond to some of the criticism stemming from your property’s handling of Coronavirus in online reviews?  Here are some tips to respond to reviews around this fluid situation. Be empathetic: The situation today is an anomaly, and many people are extremely anxious. Be empathetic while reading and responding to reviews, and reassure residents that the management is making every effort to follow guidelines from trusted sources like the Centers for Disease Control and Preventionand the local, state and federal government to ensure the well-being of everyone connected to the community. It is critical to reflect sympathy and understanding particularly with complaints related to rent collection during this time of “economic vulnerability.” Monitor your reviews: Get your teams to diligently monitor reviews for any conversation related to this crisis. Nip any apprehensions and further gossip in the bud by reaching out to the resident directly ......
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