3 More Lessons from Our Latest Multifamily Deal

[John Casmon]

Last week we closed on an 81-unit multifamily community and I shared 3 key lessons learned over on the BP member blogs. You can check out those lessons there. Now, that we've been owning this for a week, I thought it would be good to share more insights and lessons learned and hear from you on your experiences. 

1. Keys and Locks
Every time we buy a property, inevitably there will be keys that don't work, are labeled incorrectly and locks that need to be changed. Be ready to just replace locks for any vacant units and have extras on hand for unit turns. Ideally, you use a master key or keypad system to simplify things going forward. 

2. Fix the Biggest Problem First 
In our case, there were about 4 residents that caused the majority of the issues at this property and residents were happy to call it out. Because we spoke with the local police, previous owners, and the previous PM, we had a strong sense of the people who would not be apart of the community going forward. They were served notice, sending a message to the community that we wanted to create a better environment for them and blatant disregard for others would no longer be tolerated.

3. Communicate to Residents
Whenever a new manager/owner takes over current residents grow concerned. Particularly, they wonder if they will be kicked out, will rents go up, do the community be a place they want to live in going forward? If they don't know the answer, they may just book it and leave.

Clearly communicating your plans and intentions is a start, but they want to see it. They won't believe empty words, so taking early steps to create a better community and justify higher rents is critical. Most people would prefer to stay put if their issues can be addressed, even at a higher price point. By fixing their problems and communicating with them, you can reduce turnover even when raising rents.

What are some lessons, you've learned from your own deals?

[Caleb Johnson]

Hey John, 

Those are some great takeaways. What I learned on the last deal we did was to expect some push back from the tenants. This might sound obvious, and I expected that there would be push back, just not exactly what the tenants did. The tenants said that they paid the previous management company in advance, so they didn't need to pay for the next month. We did some digging and found out that they hadn't paid. We promptly asked them to pay or we would be start the eviction process.