Monthly CirCulation to More than 7,000 apartMent owners, property Managers, on-site & MaintenanCe personnel

Professional Publishing, IncPO Box 30327Portland, OR 97294-3327 Current Resident or

PRSRT STDUS Postage

PAIDSnohomish, WA

Permit #5

Advertise in Rental Housing Journal Colorado Circulated to over 6,000 Apartment owners, On-site, and

Maintenance personnel monthly.

Call 503-221-1260 for more info.

March 2014 - Vol. 6 Issue 3Rental Housing Journal Colorado

www.rentalhousingjournal.com • Professional Publishing, Inc DENVER • COLORADO SPRINGS • BOULDER

Experts on Buying & SellingRental Housing Journal sat

down independently with apartment brokerage experts,

Joseph Chaplik, Linda Fritz- Salazar and Greg Frick. This is the advice each gave:

RHJ: What advise do you give to an investment property owner when they are considering putting a prop-erty on the market?

JC: If you are considering selling, I would recommend working with a broker and brokerage firm that has the following: They should have a specific and sole expertise in the apartment market and a good history of past transactions as well as current activity. Working with the right pro-fessional is the main difference with selling correctly or making huge er-rors.

LFS: I stress street appeal and op-erational health of the investment. Simple cosmetic enhancements and bookkeeping housekeeping can have a significant impact on the final sales price. The property’s appearance is the first perception a Buyer will have. The owner that shows pride in his property is a step up from the others. From simple items, such as trimming bushes and trees, cleaning up around the dumpster and parking lot, or re-

placing unit numbers on front doors to touching up paint on trim, gutters doors, window sills fences and gates will all have a positive effect on the property’s appearance.

The operational health of a prop-erty can be a best foot forward by having organized books and records. Make sure all leases are up-to-date and tenant files are organized and orderly. Keep a monthly “rent roll” that will show all of the particulars for each unit, not just the day and the amount of rent paid. Things like move-in date; lease expiration date, refundable deposits and non-refund-

able deposit information all make the potential Buyer feel secure with the records.

Maintain a monthly record of all income and expense items, in detail, and keep receipts. The more orga-nized you are, the more impressed the Buyer will be.

GF: Find a firm that knows how to listen. By listening to what your goals and objectives are, a good broker can help put a plan together that will help achieve your goals. Be careful of those who might just tell you what you want to hear! The person you

Continued on page 3

Are You Leaving Money

on the Table?By Cliff Hockley CCIMPresident, Bluestone & Hockley Real Es-tate Services

Most real estate investors tend to operate their prop-erties with a simple rule

in mind: If money appears in their checking account by the end of the month, their property is healthy. As long as they see the same amount every month they’re happy.

However this rule inevitably leaves money on the table. Sophisti-cated investors know that they need to plan for their properties to be suc-cessfully operated. They need to buy the right property and operate it with a vision in mind. That vision should include an annual focus on rent in-creases and tenant relations.

Rent Increases

Residential: Multifamily or single family investors have the opportu-nity to increase rental income at least once a year through the annual bud-geting process. This process starts with an annual inspection, followed by a local area renewal rate review (rental comparison survey). Keep-ing your property well maintained

Researching frequently pro-moted tips for rental housing owners brought up a plethora

of topics related to the functioning and financial survival of properties. Ultimately I want to narrow in on three different factors that I feel make the biggest impact on a smoothly op-erated building. Three business man-nerisms which have been around forever but are now requiring meth-ods of modern improvement are documentation, exceeding customer expectations and obtaining insurance coverage.

Documentation has been a funky transition from literally having ev-erything hand written, to the inven-tion of the telephone and now to the endless possibilities of internet communication and email. Everyone communicates on the phone and in a lot of ways it is the most direct and efficient way of getting the job done. However, how many times have things slipped through the cracks or been mis-communicated because the original message is lost in transla-tion and memory? I can’t hear our property managers reiterate enough

to their resident managers the need to follow up on phone calls with an email summary. It saves so many steps and provides a great back up when controversy arises.

Along with always having doc-umented evidence, the old busi-ness tactic of under-promising and over-delivering will never cease to be relevant. There always comes a time when business operators have wishful thinking and want to deliver sugar-coated hopes and dreams to their clients. But this is where dreams and reality need to have a fine, re-

alistic line carved right down the middle. As the intelligent American author Ernest Hemingway once said (more profoundly): “the most essen-tial gift for a good writer is a built-in, shockproof, crap detector.” This applies to a businessman as well. In order for your property to function,

Tips for Rental Housing Owners

Continued on page 4

Get Social With Rental Housing Journals

Continued on page 3

Rental Housing journal Colorado • March 201422

RENTAL HOUSING JOURNAL COLORADO

Money on the Table ..continued from front page

Jerry Kendall Managing Director (720) 280-7431 direct jerrykendall@multifamilycap.com

www.multifamilycap.comWhy do Customerskeep coming backto Multifamily Capi-tal Advisors. Thereare more than 700reasons. We eat,breathe, and live

apartment financingacross Colorado

and over the last 13years we have

closed more than700 Apartment

loans totaling morethan 25,000 units.We get it and weget deals done.

Capital Sources include:

Local Banks andCredit Unions

Fannie Mae/Freddie Mac

FHA/HUD

Insurance Companies

Conduits (CMBS)

Regional and MoneyCenter Banks

Mezzanine Funds

Private Money

We specialize in:

Small Apartment Proper-ties

Garden Apartments

High Rise Apartments

Affordable/Subsidized

Student Housing

Senior Housing

Under Performing Projects

Conceptualizing YourDeal, Representing YourInterests

We work for our cus-tomers as advisors andanalysts. Our custom-ers benefit by getting

our vast transaction ex-perience and our stronglender relationships toultimately execute theirinvestment strategy, nomatter where they areon the deal horizon.

Use Multifamily CapitalAdvisors to accomplish

your goals and buildwealth.

Call Us today!

Great Rates!Real Customer Solutions!Apartment Loan Experts!Wealth Building for Clients!100’s of Satisfied Customers!

Jerry Kendall(720) 280-7431

is the key to managing long term rental increases. Tenants will not be as hesitant to pay more if you treat them with respect and keep the prop-erty looking well maintained. A clean property with great looking land-scaping, a current paint job without any mold or a refinished roof will net you more rent. Yes it will cost more to maintain, but in my opinion the payback will be in the form of higher rent, longer tenancies and lower turnover costs. Don’t forget, tenants want to be appreciated just like you do. If you have a property manager you work with, have them help you draft an annual budget and forecast the annual increases. Think into the future; plan your rent increases and capital expenses two to three years ahead so you can better control you long term destiny.

Commercial: Owners of office, re-tail or industrial buildings need to

think through the same process. They need to develop a plan that lasts through the initial lease term and in-cludes details regarding the tenant’s options to renew, (since commercial tenants tends to stay for 3-10 years, even more planning is involved in controlling the costs and the rental increases). Annually, property own-ers need to review the comparative position of their property. They need to be realistic regarding the value of their real estate. Just as with residen-tial investments, they must consider the condition and location of their investment. Commercial landlords need to have a long term plan in place that keeps rent increasing on an annual basis

If you make a concession regard-ing a starting rent to get a tenant in, plan to step it up to market value within three years. Aim for a mini-mum of 21/2 % to 3% in annual in-

creases based off the pre-negotiated step increase or percentages that increase on the basis of a business’ success (typically used by retail busi-nesses). I am not a huge fan of CPI (consumer price index) increases be-cause the government has too much control of those numbers. Don’t per-mit expense caps unless you can stay ahead of the expenses, regardless of the caps.

Landlords and their property man-agers should not automatically cave into very low or zero rent increases at lease renewal time, even if the ten-ant threatens to move out. Run real-istic scenarios regarding the cost of re-tenanting. Include vacancy rates, leasing commissions and tenants improvements in these calculated scenarios. Consider also, the moving costs an existing tenant will face. Un-derstand their business and business goals, their staffing and their success at your location.

Most importantly while they are renting from you. Fix repairs that are required by your lease, and fix them quickly. Show your tenants you ap-preciate them by treating them how you would want to be treated, oth-erwise they will blame you and pos-sibly hold back rental payments, do the repairs themselves or, worse yet, move out.

Last year there was a client who took two months to repair the air conditioning units on a newly leased space. It was wintertime and it was raining; the tenant was livid and

hired an attorney to preserve their rights under their lease. The land-lord wanted absolutely the lowest price for the repairs and getting the lowest price took over 30 days of negotiating with vendors. The ten-ant almost moved out because it took so long, and alternative cool-ing systems needed to be provided. The experience drove them to be-come a hostile tenant and we aren’t sure if they’ll renew their lease when the time comes. These bad feelings could have been prevented and we could have agreed on rent increase and lease renewals with this tenant if the landlord would have allowed the property manager to be more proactive. Note: Typically property managers have vendors they work with that are reasonably priced who respond quickly; but they may not be the absolute lowest period.

ConclusionInevitably, attention to detail, fu-

ture planning, a current understand-ing of the marketplace and a fair and realistic approach to tak-ing care of the properties will yield higher returns for real estate inves-tors. A key component to profitability is a focus on current and future rental incomes. Sticking to the basics with an annual planning process and tak-ing care of your tenants will increase your annual yield and keep reliable tenants in your properties.

Tri-R Carpet Care

303 898 1329www.trircarpetcare.com

• 24 hr Flood Work• Blood Cleanup• Carpet Restretching

• Carpet Repairs• Dying & Tinting• Pet Damage

Carpet Cleaning - $30 a Room!(Closets and Hallways Free!)

Additional Services offered:

Rental Housing journal Colorado • March 2014 3

work with should listen to you, and be willing to tell you when, given all the circumstances involved, it’s not in your best interest to sell your property.

Then, when you’re sure the time is right, choose a brokerage team with the experience, knowledge and skill to implement an effective plan of ac-tion.

RHJ: What about buying? What words of wisdom do you have for prospective investor when they are considering buying a property.

JC: If you are considering buy-ing, I would recommend working with a broker and brokerage firm that has the following: They should be experts in the apartment market and have the knowledge and deep resources to assist with finding the right property for sale. There should be a lot of data given to you by your broker to help evaluate the right pur-chases and how it compares to the rest of the market. They should also know the future potential of proper-ties and how to protect your invest-ment and help grow it.

LFS: Before giving advice to an in-vestor, it is imperative that we find out what the investor wants and/or what he/she needs. Wants are wishes and I, as much as most, understand unless you have a wish, you will never have a wish come true, real-ize needs are where we should start.

Many investors come to our market and say they want an 8 or a 9 CAP, only to realize they need cash flow to cover the debt, if they need to borrow, and they need to put some money in their pocket after all expenses are paid. That’s not necessarily an 8 CAP purchase, initially. It doesn’t mean a 6.5 or 7 CAP property at time of pur-chase can’t get there.

A second piece of advice or piece of the puzzle to match is to find out what the investor plans to do for management. Many owners prefer to self-manage, staying very “hands-on” and involved. Conversely, many have no interest in this facet of own-ership and will gladly let someone else take care of the broken toilets and leaky faucets. Management plays a large part in the success and profit-ability of multi-family ownership.

I do not want to overlook, perhaps, the most important piece of advice and that would be to find a broker who is experienced, not only in sell-ing apartments; but ownership, man-agement and the ongoing success of the investment.

GF: In addition to the above, you need to have someone working for you with the expertise to analyze the properties in terms of valuation and operations. In any transaction, it’s “surprises” that come up that pre-vent a sale. You will be best served by working with an expert who can identify potential surprises and find solutions in advance.

You’ll also want to work with someone who is not afraid to tell you whether what you’re hoping to find is in line or out of line with the market. Portland metro multifamily properties typically are not trading at cap rates above 7.5% and above. A buyer coming into this market sometimes needs to be educated on whether their expectations in terms of return and pricing are realistic.

Look for a firm that doesn’t push you into a deal because it benefits them. Find someone who does what’s right for you. A client can get the most out of a broker/client relationship when they are acting in sync over the long term. Brokers are always on the front lines of what properties are coming to market. The more they know about you and your investment goals, the more great op-portunities will come knocking at your door.

Joseph Chaplik is President of Jo-seph Bernard Investment Real Estate.

Joseph Bernard Investment Real Estate is headquartered in Portland and has of-fices in Washington and Arizona. They

consistently complete more apartment transactions annually than any other Oregon firm. www.josephbernard.net

Linda Fritz- Salazar is Associate Broker at The Kasten Long Commercial Group. KLCG has specialized in apart-ment brokerage in metro Phoenix since

1998. Agents have brokerage more than 1,000 communities with gross sales in

excess of 1 billion dollars. The company also provides weekly updates (by e-mail)

on apartment sales and publishes the Metro Phoenix Apartment Owner’s

Newsletter on a quarterly basis – past issues are available on the company’s

web site (www.KLCommercialGroup.com).

Greg Frick is a partner at HFO In-vestment Real Estate. Founded in 1999, this apartment-only brokerage firm has

handled transactions on over 15,000 units valued at $1.84 billion through-

out Oregon and Washington. Greg works with both private market and

institutional clients and can be reached directly by phone at 971-717-6332 or e-mail greg@hfore.com. For details about

apartment listings and services visit www.hfore.com.

RENTAL HOUSING JOURNAL COLORADO

www.rentalhousingjournal.com

Experts ..continued from front page

Integrity Painting Services Inc www.integritypaintingservices.com

--32 years local business --interior and exterior; --BBB Rating A+ --commercial; --Licensed and insured --residential; --Handyman services --small and large.

We take the pain out of painting & we can help you.

720-581-2703

•32 years of experience •5 year warranty

1/8 Page4 7/8” x 3 5/8” bwOn-Site4

ON-SITE-NW SEATTLEVALLEY, METRO, ARIZONA APT. NEWSSalsbury IndustriesFeb, Apr, Jun, Aug, Oct, Dec

1010 East 62nd Street, Los Angeles, CA 90001-1598Phone: 1-800-624-5269 • Fax: 1-800-624-5299

PROFESSIONAL PUBLISHING, INC

NTN SecureMobile

The best things in life are freeNational Tenant Network’s Free iPad App can provide you with secure applicant screening, literally at your � ngertips. Enjoy the same great service, rigorous screening and realiability that NTN offers through NTNonline.com with this convenient App.

NTN SecureMobile®

Download today from the Apple App Store and screen applicants anywhere, anytime!

NTN Corporate Offi ces800-228-0989ntn@ntnonline.comwww.ntnonline.com

NTN Corporate Offi ces800-228-0989ntn@ntnonline.comwww.ntnonline.com

26180-2014.13.indd 1 3/26/14 5:10 PM

Rental Housing journal Colorado • March 20144

RENTAL HOUSING JOURNAL COLORADO

Is YOUR Pool Like These?

IF NOT...

You Could Be Losing Customers and Revenue!

Is YOUR Pool Like These?

IF NOT...

Expert Pool and Spa Renovation and Resurfacing

Reduced Chemical Usage - Easy to CleanExtremely Durable Ceramic Finish

5-Year Warranty Renewable with Every Re-Coat

Details and Photos at www.pwcoatings.com

Free Estimates - CALL TODAYToll Free 1.800.440.8732

you have to be straightforward with everyone involved in the function-ing of the property. That way when it comes time that you do have the flexibility for extra efforts, building perks, rental incentives, etc., they’re that much more appreciated. This isn’t encouraging putting out mini-mal effort for the greatest return, but altogether continuously exceeding customer expectations.

One of the many ways to exceed customer expectations is by always being prepared. Obtaining building insurance and requiring renter’s in-surance not only helps when disas-ter strikes but the reassurance of its benefit in situations of necessity facil-itates the functioning of other day-to-day tasks at your property. Making insurance a high priority and estab-lishing solidified restrictions and re-quirements upon move-in will avoid any mishaps that may come up in a time of chaos.

Ultimately there are many tips that should be utilized in order to main-tain a well-run building. The founda-tion of business practice objectives that owners should follow is made up of thorough documentation, pro-viding exceptional customer service and ensuring that you are insured. These are some of the many steps owners can take to make the most of their investment.

By Lauren Ginder, Pacific Crest Real Estate

Contact info: Lauren can be reached at 206-812-9144 or via email at:

ginderl@pacificcrestre.com · www.paci-ficcrestre.com

Tips for Owners...continued from front page

Publisher Will Johnson • will@propubinc.com

Designer Steve Olsen • steve@propubinc.com

Advertising Sales Will Johnson • will@propubinc.com

Terry Hokenson • terry@propubinc.com

Staff

www.rentalhousingjournal.com

The statements and representations made in advertising and news articles contained in this publication are those of the advertiser and authors and as such do not necessarily reflect the views or opinions of Professional Publishing, Inc. The inclusion of advertising in this publi-cations does not, in any way, comport an endorsement of or support for the prod-ucts or services offered. Metro Apartment Manager is produced monthly and is published by Professional Publishing Inc. PO Box 6244 Beaverton, OR 97007. (503) 221-1260 - (800) 398-6751 © 2013 All rights reserved.

Advertise in the Rental Housing Journal Colorado

Call 503-221-1260 for more info.