18 May Multifamily Minute: North Santa Monica & Pacific Palisades 5-18-2020
The pandemic changed the way we do business in multifamily investing and management. Below are key pieces of information in effort to provide something of value during a challenging climate. Stay tuned for more information and feel free to call or email with questions and comments.
Eric von Bluecher
Leasing During A Pandemic
How are you leasing now? Through affordable technology, owners and managers can lease virtually. Most of the leasing companies below also offer apps for your smart phone and tablet to make managing your building easy on the go. Many of the publicly traded REITs have already successfully adopted virtual leasing due to the pandemic.
- TenantCloud – online payments, screen applicants, listing website, tenants pay rent online, rental applications, submit maintenance requests. Basic account is free with ability to upgrade for more features for $9-$35/month. See more info here and video here.
- RentTrack – online rent payments that provides credit-building incentive for your renters.
- LandlordStudio – track income, manage expenses, screen tenants, set automatic reminders, keep each property organized for tax time, cloud storage for important documents. 30 day free trial then $9/month.
- Re-Leased – tenant insight, performance and operations; geared for more towards the syndicator, family office or multifamily portfolio holders.
- zuby – organize properties, renters and lease. Keep track of payments and late fees. Screen renters, maintain properties, create leases. Free for collecting rent and ordering maintenance and pay fees for leases, legal docs, rental apps and screening reports.
- appfolio – priced at $1.5/unit/month, the software is designed to grow with your portfolio as well as an option for larger operators with over 1,000 units. Resident and ownership communication and management, marketing tools, leasing management, online maintenance, online payments and more. They also have AppFolio’s AI Leasing Assistance, Lisa, that provides responses to prospective renters, book showings, qualify leads, follow up with leads to fill vacancies.
- Zillow – has Zillow 3D Home, pay per leasing and “Living Lab” to help with virtual leasing. Click here for more.
- LeaseHawk – has virtual leasing assistants, online chat assistants, all using AI. Also integrates with other property management systems like Yardi.
How to Prep Your Building for Prop 10 2.0 and Repealing Costa Hawkins
Despite the challenges with the pandemic, major legislation on the ballot could seriously reduce equity and cash flow. With the November elections around the corner, right now is the time to find ways to increase value to your building and preserve or increase cash flow and equity. If you have a vacancy now, give Eric a call/email for advice on what renovations actually add value to the rent. Contact Eric at 310-900-9505 for an analysis or email firstname.lastname@example.org.
Sales are Happening
Market rents, underwriting, valuations and lending can be challenging now, though sales are happening.
– 5/7/20 – 4 units @ 1124 24th St, 90403 – listed for $1.995M and sold for $1.895M, 5% under asking price – $617/ft
– 5/6/20 – 6 units @ 1620 Washington, 90403 – listed for $2.995M, sold $2.750M, 8.18% under asking price, $458k/unit, $467/ft, unit mix of (1)3+1.5; (1)2+1.5; (4)1+1; 2.67% cap rate; 21.77 GRM
– 4/10/20 – 48 units @ 2643 Centinela, 90405 – sold $12.1M, sold off market, $252k/unit, $427/ft, 3.69% cap, unit mix of (48) 1+1s
– 4/7/20 – 5 units @ 1009 10th St, 90403 – listed 1/23/20 for $3M and sold $2.98M, less than 1% under asking, $596k/unit, $810/ft, 4 vacant units at time of sale
Loan Due in 6-12 months?
Experts suggest getting in front of your lender now to plan ahead. With tighter lending requirement and capital available, banks are looking at conservative market rents, increasing their vacancy underwriting, increasing their DCR, in some cases, lending only on stabilized deals. Bottom line, if you have a loan coming due, experts state to get in touch with your lender now, and get ahead of the curve on your loans. Additionally, if acquiring and have the reserves to offer and close cash, refinancing in the next 6-18 months may be the best strategy. Contact Eric at 310-900-9505 or email email@example.com for lender referrals.
Investors looking for blood in the water may need to look outside of core markets to find massive discounts and distressed assets. As of right now, I have not seen any foreclosure sales for Multifamily in Santa Monica with the majority residents paying rent mostly due to the high quality tenant base found on the Westside combined with long-term and well-capitalized owners. Investing in multifamily is generally a long-term strategy, where quality location, tenants and construction still equate to solid investment fundamentals. If the numbers make sense, you like the location, the building and the tenants, the investment may be worth further analysis to see if it’s a good fit for your portfolio. Contact Eric at 310-900-9505 or email firstname.lastname@example.org for on and off market opportunities.
Current Inventory For Sale
For current listings, off and on market opportunities contact Eric at 310-900-9505 for an analysis or email email@example.com.
When tenants stop paying rent, your loan is coming due and reserves are running dry, how will you and your partners manage? Have the discussion now with you partners, make sure there is a plan in place and everyone knows where they stand with the ability to financially withstand a short-term or long-term period of a negative cash flow property. Give Eric a call for ideas or referrals for professional legal, tax or property management.
Eric von Bluecher