Jan 02

A year ago I wrote of my five top ideas for real estate for 2013.

Of those ideas I have implemented .. not much.   Shortly after the first of the year 2013 we found that my wife’s ongoing back pain was being caused by a large benign tumor. She had it surgically removed on Valentine’s day and is fine today, but it upended things for a while

Today as I reflect on the past year and think about this coming year I reread the ideas posted last year. A year later they all hold value.

Two have been implemented as part of an effort to increase the value of membership by the Apartment Association of Southeastern WI’s  board of directors under the leadership of Joe Dahl.

The Association now has quarterly small group meetings as part of the Professional Membership. These meetings are an important element of #3 on the list, improving  how we share our collective knowledge

In a big step towards #1 on the list, reducing maintenance supply costs, the Association has teamed up with Home Depot, Pittsburg Paint, Sherwin Williams, and a number of other organizations to provide discounts to our members.

Home Depot offers a whopping 20% discount on paint and 2% cash back rebate on most purchases to our members. Sherwin Williams offers members discounts on paint equal to the discounts that major contractors receive. Pittsburg has similar discounts.

I would add a sixth and seventh opportunity for 2014, Crowdsourcing/Crowd funding for real estate.  I’ll post my thoughts on these in the next couple of days

The five most important Real Estate Ideas for 2014 remain:

(Clicking on the topic’s title takes you to the full article)

  1. Reducing Maintenance Supplies costs
    Pre 1950 buildings in lower income neighborhoods require around $100 per month per unit for repairs, replacement reserves and improvements. Newer buildings in more affluent neighborhoods perhaps $50 – $65. This is all maintenance from leaky faucets and unit turnovers to new cabinets, new roofs, electrical upgrades, replacing parking lots ect. (more)
  2. More Effective Maintenance Labor/Contractors
    Maintenance, replacements and improvements to rental housing represents nearly $100 million per year in the city of Milwaukee alone. A savings of even 1% is a lot of money. (more)
  3. Become better at sharing our collective knowledge
    The ApartmentAssoc@YahooGroups.com is good beginning. However it does not work real well as a reference tool as the posts are not organized by topics nor apparently easily searchable for many users. (more)
  4. Group purchase of a distressed block or two
    There has been this wild idea floating around in my head for years, acquiring a distressed block with a group of active owners and turn it around for fun and profit. (more)
  5. Tech Meets Real Estate
    There certainly are huge opportunities for software/web solutions for things that cause frustrations for owners and perhaps tenants. (more)
  6. Crowdsourcing for real estate, posting later in the week.
  7. Crowdfunding for real estate, posting later in the week.

 

Dec 26

Our company buys a lot of products from Amazon – from office supplies to maintenance parts to bug spray.

We do this for no altruistic reason,  Amazon is less expensive and faster for many items. Amazon Prime rocks if you buy even a modest amount!

Amazon has a really cool program where they give 1/2% of your purchases to a charity of your choice. Our company chose Children’s Hospital of Wisconsin. Children’s does good work and have helped my granddaughter as well as many thousands of other kids.

If you are an Amazon user, I would encourage you to sign up and let your purchases help an organization you believe in. If you are lost for a worthy charity – Children’s Hospital of Wisconsin is a great choice.

More info at:

http://smile.amazon.com/

Nov 04

A reader of the ApartmentAssoc Yahoo Group asks:

I am about to hire someone to cut some trees around houses. I told him that I would like him sign something to knowledge that I will not be responsible of his personal injury from this job if it happens. What kind of form and where I can find it? and is it enough or something else I have to do to insure that I will be absolutely OK if his personal injury from work actually happens

It is not possible to have someone sign away their rights or your liability under Wisconsin worker comp laws.  The only safe options are to have a minimum worker comp policy of your own or only hire companies that are insured.

Remember that a dwelling liability policy will not cover injuries to those working on the property.  This is an area that a lot of owners of small multi families run into problems with when they assign a tenant to do lawn work or snow removal for a discount in rent.

There is really a great risk in not having the coverage or in hiring people without coverage. I had an employee that was making a minor repair to a small first floor porch overhang. He made a wrong move, fell and the worker comp carrier had to pay out $140,000.  If we would have been uninsured that would have been me paying out the $140k, and probably more as insurers get discounts from the medical providers.

If you have employees, or non employees deemed to be statutory employees,  then the law requires coverage.

I think the minimum worker comp policies are around a grand a year, but am not positive.

Jan 04

 Real Estate Ideas for 2013

What can be done collectively to improve our businesses, save costs or generate additional revenue?

On January 1st I posted a list of ideas that I had that some of us could consider to collaboratively work on.  I intend to pursue one or two of the ideas presented and may entertain partnering with the right person or persons.

This post is the third of my more in depth notes on the ideas.  I will post others over the next week or so as time permits me to clean my notes into coherent sentences. If any of the topics interest you comment either on the list or directly to me at:Tim@ApartmentsMilwaukee.com


Part Three: 

Become better at sharing our collective knowledge 

The ApartmentAssoc@YahooGroups.com is good beginning.  However it does not work real well as a reference tool as the posts are not organized by topics nor apparently easily searchable for many users.

What if the archives were used to form a new reference tool, perhaps a Wikipedia style “Best Practices” Guide for Milwaukee rental owners.  My vision is a user contributed, user edited tool that would be a ready reference to many topics we discuss on these lists.

It would include everything that a property manager runs into. Who is the best plumber, what notice do you use for the tenant that decided that partying till 6 AM everyday is being neighborly.

Many of us know a lot, but none of us know it all. Things change in our industry nearly daily.   Contractors and suppliers who were the best may have become expensive  sloppy or retied.   New vendors and contractors come on the scene every day. Bad tenants learn new ways to circumvent screening. Laws change. Judges and Commissioners change their views on how laws are implemented.

Similarly a Mastermind Group could reap benefits if the right people were involved. Here is a good overview of how Mastermind groups work.

Another model is what groups like StartUpMKE are doing in the tech field.  It is similar to what the Apartment Association does, but they seem  more involved in actual business creation.

Lunch with  AASEW board members was an interesting idea.  If you don’t recall this you can read more about lunch with AASEW board members here.  When I look back on our prior attempt, I think this would work better if the sponsor board members would set a date, place and topic.  Then if there was enough interest for that particular meeting it would move forward.

Bottom line: There is power in shared knowledge and we should do more to harness that power

Jan 03

Real Estate For Ideas 2013 Part Two

What can be done collectively to improve our businesses, save costs or generate additional revenue?

On January 1st I posted a list of ideas that I had that some of us could consider to collaboratively work on.  I intend to pursue one or two of the ideas presented and may entertain partnering with the right person or persons.

This post is the second of my more in depth notes on the ideas.  I will post others over the next week or so as time permits me to clean my notes into coherent sentences. If any of the topics interest you comment either on the list or directly to me at:Tim@ApartmentsMilwaukee.com


Part Two:

More Effective Maintenance Labor/Contractors/Service Providers

As mentioned in part one, maintenance, replacements and improvements to rental housing represents nearly $100 million per year in the city of Milwaukee alone. A savings of even 1% is a lot of money

More Effective Maintenance Labor/Contractors/Service Providers

The ability to have skilled, cost effective maintenance available on demand is typically a missing element for small owners.

If all of your unit preps are done two days after move out you will have far less vacancy income loss. If you can respond quickly to emergency repairs less tenants will move.

Even larger owners such as our company can’t do this efficiently with typical staffing. Either you have too few workers the first week of the month or too many the rest of the month.

The million dollar question is ‘How do can you have an on demand workforce without the risk of uninsured “contractors” who may later be deemed employees by taxing authorities or injured and not covered by your property insurance?’

A couple of years ago Affordable Rentals rolled out Rental A Worker, where we ‘rent’ other owners our maintenance people by the hour for small or large jobs. We benefit as we can have a larger workforce to meet the up and down demands of maintenance, while being able to share them when our workload is lighter.  We can also justify having highly skilled people on staff full time, such as certified heating techs.

The big advantage this offers other owners over hiring Joe off the street is our people are insured and have taxes withheld. There is a real danger and expensive otherwise. For the longer version read: Your Handyman-Cheap Contractor or $60000 Mistake?

The real vision for Rent-A-Worker is to expand it to a temp like service where there is an on demand workforce that can ramp up when there are a lot of preps etc and then can work for another temp agency on slow times.  This would hold an advantage for our company as well as other owners who participate.

Such a system would have a worker rating system, whereby the owners would grade them and their opportunity to work and future pay rate would be based on those grades.  So the best workers would achieve full time employment at a decent wage.

All the workers, whether they are laborers or small uninsured contractors would be treated as employees with the temp agency withholding taxes, maintaining worker’s comp etc., thereby eliminating a potential career ending risk for owners who were hiring “handymen” for cash.  The guy in the Cheap Contractor or $60,000 mistake went under.  I assume this was the cause

I pursued the temp angle a bit a year a half ago.  We hired a college grad who was formerly a manager a temp agency that moved out of the area. Excellent resume and references. I held a lot of hope for him to do well at this, but in the end it did not work out. By that time I was distracted with the purchase of a commercial property in Hollywood FL to house my wife’s businesses.  The basic software framework exits as well as some operating procedures.

I still believe an available,  flexible workforce  is the brass ring for our industry; seeing so much benefit for my company as well as many other owners. This may be the top new project to aggressively pursue this in 2013. The open question on this is does Obamacare make this in anyway less practical today if the number of temps exceeds 50.


preload preload preload