All Forum Posts by: Michael Tempel

@Alexander Mattson

I am working with a legacy commercial company (multiple generations/A locations). MRI is very robust for CAM etc.

@Ladè Baruwa

Crime, non-payment, drugs, addiction issues, property damage...

I tried multiple times. Just always is a losing battle unfortunately. I wish it wasn’t, but it’s very hard to change an area, especially D.

@Paul D.

Honestly we have bought 100% vacant buildings or ones that had rents way under or under market without value add. Sometimes buying a problem you can solve immediately creates 30+ % growth in first quarter. On a 5-15 million building that’s a fast 1.5- 4.5 million dollar gain. Obviously you have to invest time and money, but I have seen this model work time and time again.

Works best in large multifamily in A/B areas. Unfortunately with the current politics with anti rent increases, no evictions etc. in place this is much more challenging, but in the long run works extremely well.

In short I have seen fees all over the place.  We price SF differently then MF.   Flat rate and leasing fee for SF and % based on project size, property type and scope.  

10% seems very high, but 2% is way to low.   I wouldn’t consider a large MF for less then 3.5% or higher, you just can’t pay to keep the lights on less then that with strong staff and technology.   

This is a great question.   Here is what I have seen, but either way agree that managing a few units on your own, if for a set length of time is a great education and highly encouraged.  

Reasons PM is hired:

Owner wants separation from tenants - it is very easy to become to comfortable with tenants that become friends and then expect favors or exceptions.   I have had this happen with my own properties.   Having a layer in between also makes you to make business decisions without being personally involved.  

Growth Mindset/Time -Many owners have very demanding careers, but high incomes.  Hiring a PM let’s them grow their portfolio fast!  Similar to paying for lawn care etc. vs doing it so you have time to focus on your core business.  In many cases the PM can locate off market properties or assist in acquisitions.  

Asset needs a team in place - once you get a building over 50 units (or less) things get much more complex and the decision of making it a full time job as your own management company vs outside management becomes a real question.  The right PM company should be able to grow into 50-500+ units.   This is a huge learning curve for owners since you have to navigate so many different areas at once.  

Having systems and paperwork in place.  It is vital to make sure you have strong leases, addendums and screening policies that follow your areas guidelines.   Also having online accounting, rent collection and many other services is highly helpful as well.  

There are a ton of other reasons and unfortunately lots of things to watch out for also.   If you hire the right PM you should experience growth and security though.    

@Brian Burke

I have seen very interested and aggressive cash rich owners excited about future opportunities in Commercial and MF the last few weeks.

We keep getting off market sellers looking to sell off assets and re-allocate into preferred investments.

There are opportunities always, but I am really seeing the strong sideline investors starting to participate.

@Amber Carter

There is and will be so many new restrictions put on landlords I expect we are going to have to take things day by day and remember as a management company we work for the owner, but follow all guidelines.

For example before Covid Minneapolis passed a new screening ordinance that will not let us use credit, criminal (very subjective/minefield) and evictions past 3 years! Oh yeah, we also have to participate in section 8.

Honestly income requirements is our only option, so I see rent and this requirement going up (unintended consequence from city).

With this being said, yes I would be more open to helping a restaurant owner that went under etc. but at the same time our hands are limited and tied to Fair Housing and mandates we are forced to work under.

@JonDerek Sallee

Mainly age of asset. Brand new new construction is typically class A. A 80-90s building on good shape is a class B and a older building that needs some TLC is likely a class C. It can be a little subjective, but this is at least how I look at it.

You can also look at area as well in this way. For example a class C in an A location is often a great investment while a class A in a C location is often not since the area will pull it down.

A would be in a nice upcoming neighborhood or area with high income/low crime. C is opposite.

Like many stated it depends on your market and the property you are adding value to.   We used to take B-C class buildings and put in the whole kitchen, granite, stainless steel and new flooring, it typically at the time added 1-30% higher rents. 

Here is an example of a class A we did this way to show typically what we do....just imagine the same in a B or C class with smaller appliances/kitchens - https://my.matterport.com/show...

 I think you need to look at cost of materials and labor.  Based on that make a decision.  Baths and kitchens always make the most impact.   One overlooked item at least in the past is going to a vinyl planking that is water proof, but looks like wood.  Carpet will need to get replaced every few years typically, but we have floors that are in from 10 years ago that look brand new.   

Another improvement for the owner is putting in meters or setting up a RUBS program to capture and make utilities a recoverable cost.  If done correctly you can have rents stay the same, but capture water, trash and even gas (electric is normally paid by resident).   Ideally putting in meters in a duplex etc. works the best and adds value to the resale, but in a large multi-unit property there are many RUBS options from companies that will manage this for you.  AppFolio and other management software companies are adding these features into their software as well, so you can self management this, but look closely at regulations/laws in your area to make sure you are not doing something incorrectly.

We can scan your apartment unit, home, commercial property etc. for virtual tours typically same day service is requested.   This is a service to help other owners for a reasonable cost 150.00 per 1 bedroom and 200 for home under 10,000 SF.   THis is in a 50 mile radious of Mpls.  We will also need to determine if it is safe....unoccupied, clean units or property work the best.

We can also offer photos, floorplans and other options for additional cost (set of photos generated from Matterport will be included - along with short intro videos.

E-mail: [email protected] - Subject "Matterport".   

Here are a few scans we have done this week:

Class A Micro Apartment - https://my.matterport.com/show...

High End Condo Quality Property in Uptown: https://my.matterport.com/show...

We include this at cost or free based on the listing for management services we provide.  You can learn more below:

Single Family Management - https://www.NexusHomeManagemen...

Multi Family -https://www.NRSPM.com - you can also request case studies that will show are past large value ad projects we have done.   Anywhere in Minnesota 1-50 units in a 100 mile radious of Mpls.  75-500+ anywhere in Minnesota.  

We also offer broker services for buying or selling smaller investment properties - we have many off market deals and can also assist in value add renovations.   We have a full time agent that primarily focuses on Investment properties.