Multifamily Stakeholders
Late Newsletters…
This month’s newsletter is a bit late but it comes with good tidings… I have a $2.1M townhouse complex under contract. I’m very excited for this new opportunity and look forward to conveying my experience in the future. As it stands, we have completed our physical inspection process and are working through financing and other due diligence items relevant to the deal.
One thing I’ve realized is the Balance Sheet may be issued rather intermittently. This is because I only want to email you when I actually have something worthwhile to share. Generally I can come up with something each month, but just know at times it’ll come early or late. In this case, quite late.
Community
I don’t know if it’s been the Holiday season, Covid-19, or something I’m grappling with internally but it is really important to talk about what a multifamily business provides to your community. For starters, this isn’t discussed enough as it should be. You go to real estate investing conferences (hah!) and all we talk about are market cycles, return metrics, raising capital et al. You might have clients (investors, limited partners) but your customers are the tenants [residents] — and they are the ones with your cash flow.
What I’m really driving at is rent raises, cash on cash return, and reducing Op-ex are not the only considerations to make, sometimes you need to consider the asset and the tenants first. Your annual budget may not account for a new roof, but if the roof is leaking the choice is decided for you.
For what it’s worth, my experience locally has shown me that the real estate investors’ who acted like a local business included the communities impact into their lexicon fared much better than others in the long run. The community is a stakeholder in your business decisions (to an extent). I have one particular investor in mind, he died in 2000 as a beloved local leader and he always had first shots on great deals. Being a known quantity for good will lead to additional success and I just want us to remember that when we are making our investment decisions.
If you need inspiration, follow @MarcSGilbert on Twitter who had a sewage backup occur at one of his properties’ on Christmas day. He went out there to oversee the repair and cleanup and that is the kind of leadership that leads to successful businesses and inspires us to work hard. Small businesses are the backbone of America because of these sorts of actions and I am extremely bullish on our collective future.
Here’s to a wonderful New Year’s
Jon