Multifamily #Trust30: Greatness

I like what Tom Peters has to say about it, “reward failure.”…

Moving past the halfway point with day 16 of the #trust30 challenge –

Greatness appeals to the future. If I can be firm enough to-day to do right, and scorn eyes, I must have done so much right before as to defend me now. Be it how it will, do right now. Always scorn appearances, and you always may. – Ralph Waldo Emerson

Trusting intuition and making decisions based on it is the most important activity of the creative artist and entrepreneur. If you are facing (and fearing) a difficult life decision, ask yourself these three questions:

1) “What are the costs of inaction?”….

2) “What kind of person do I want to be?”

3) “In the event of failure, could I generate an alternative positive outcome?”

Multifamily greatness

We recently purchased a property from a lending institution who had in turn taken it back from a previous ownership interest. When completing the due diligence phase of our process we discovered roughly 40 units in various stages of disrepair. Units we classify as down. Down to mean not habitable absent some major rehab.

It spoke loudly to the point of the first question – inaction. Banks are not property managers. And, in lieu of spending $25 to $30k to replace the roofs, they left them alone. Result of that inaction? Several hundred thousands of value wiped away.

Greatness starts with forecasting the consequence of in-actions. In this case, it would suffice to say that some back of the napkin math would have yielded an ROI that would have driven a decision to replace the roofs.

What kind of company do we want to be

At Mills Properties, we ask that question a lot. As of late it has been in the area of branding, marketing, digital footprint and the such. We have been slow in moving toward what we want to achieve part and parcel because of near 50% growth in community and unit count over the past four years. And, in part not having a real plan.

Fast forward to today. We have taken the time to craft a 40+ page branding/marketing plan that includes everything from font types and size for all thing forward facing to big ticket strategies to dominate the St. Louis Apartments on and off-line space. It lays it all out and captures how everything from curb appeal to lease contract signing ladders up into an overarching message for the neighborhoods and communities we serve. And, in advance our striving to make a splash nationally at some point.

It all starts with asking the right questions.

Multifamily failure

I think the best way to overcome failure is understand that it going to happen from time to time. In fact, I like what Tom Peters has to say about it, “reward

Crash and Learn

failure.” If you are not failing, you are not trying, you are not learning and thus you are not growing. Equity Residential cements this in their 10 ways to be a winner – one being ‘take educated risks.’ The expectation is that you gather every piece of information you can to include the counsel of others before you pull the trigger. And, if you fail, you simply have a group postmortem where you examine the facts and the various action points to see what could have been done better.

Off for a float trip

It’s Saturday, it’s raining and we are headed out for camping and a float trip. Should be loads of fun. I say that with lots of hope in mind.

Your hoping you have an amazing weekend contributor,

M

Echo Boomers and the propensity to rent…but from whom?

Gen_y
I pulled the following excerpt from an AP story over at [Yahoo]

"The so-called Echo Boomer generation, which is loosely defined as the
children of Baby Boomers, will help drive business for Equity
Residential and the apartment market as a whole, Neithercut said. He
said the population, estimated at 80 million, will have a high
propensity to rent and will be attracted to the company’s core markets."

That is, in part, David Neithercut’s, sentiment on the multi-family market and more specifically the core markets that EQR manages property in. Mr. Neithercut is the CEO and President of Equity Residential Properties based in Chicago, IL.

I’ve read the estimates that the EB crowd numbers in the 75 to 80 million range, I have also read that 57% or greater are staying home and or going back to live with Mom and Dad after college graduation. [Read Here] And, note that affordability not only seems to be a driver for more renters in lieu of buyers  but it is also a driver for doubling or tripling up and or staying home a few more years. The Echo Boomer’s are ambitious and driven not to mention more responsible than most think. If they can live at home with little to no overhead and pay down college loans and otherwise get their financial affairs in order then they will do it.

I’m not so sure I share the same optimism as Mr. Neithercut although I consider Equity Residential to be the absolute best PM firm in America.