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What is due diligence? According to Investopedia, due diligence is defined as:

1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to a sale.

2. Generally, due diligence refers to the care a reasonable person should take before entering into an agreement or a transaction with another party.

To many seasoned investors, this may sound like the “no-duh” reminder. Yet, we’re all subject to the ups and downs of real estate investing, and need to understand that many of the “downs” are well within our own control to prevent. For this reason, we’ve put together the following list of items every prospective multifamily property owner and/or investor should know:

• Inspections—Do we really need to say it? Apparently so. You’d probably be surprised how many people forego inspections in order to save just a bit. They, however, tend to pay dearly in the long-run. Don’t try to save when it comes to verifying the viability of your property. Invest more, in fact. Pay a professional roofer, plumber, general contractor, HVAC specialist, and foundation expert to come give their two cents. You’ll be grateful you did.
• Condition and repairs—Yes, there is a difference in these points. Once you’ve determined the steadfastness of the structure and its components, it’s time to be reasonable about what it will take to get the property ready-to-rent. How are the blinds? How dated are the appliances and fixtures? What does the paint look like? Bottom-line: What will it cost you to make the property attractive to the tenants most likely to seek you out?
• Community and neighborhoods—Before you make a decision to purchase any multi-family property, do your research on the neighborhood and community. What are the demographics? How is the location? What are the local attractions? Even a cheap purchase price tag will not help you sell a property in a bad neighborhood that is inconveniently located.
• The competition—Evaluating the competition is something every business owner should do before opening shop, regardless of industry. Multifamily is no different. What types of properties are in the general vicinity? What are the tenants like that rent there? What types of improvements have been made? What are they charging for rent and deposit? And, most importantly, what will it cost you to position your property to effectively compete?

Start out on the right foot with a property management company in your corner that knows all the ins and outs of effective due diligence. The professionals at Class A Management are ready to assist. Give us a call today at 817-295-5959, or send us an email to info@classamgmt.com.

Are you a property owner on a budget, wondering how you could ever possibly compete with the properties that are able to hire the services of big name property management companies? In so doing, they instantly have access to economies of scale when it comes to contractors, maintenance crews, marketing, and more. They also have a well-trained staff, with quite a bit of experience on what it takes to keep units occupied.

Just because you don’t have a big budget doesn’t mean your property can’t rival those that do. Here are some simple things that will help ensure your property equals (or exceeds) the offering of the big guys:

• Invest in proper training. Many property owners simply overlook just how important it is to have a friendly and responsive staff on the property. However, this is something tenants notice (and complain about) with frequency. Choose office staff wisely using thorough screening processes and invest in their training. While having access to professional training is a nice benefit, simply being clear about expectations, enforcing those expectations in reviews, and setting the right example yourself goes a long way.
• Be resourceful. Just because you don’t have a big budget doesn’t mean you have to go without when it comes to hiring good maintenance crews and contractors. It means you just have to be a bit more resourceful. Use Craigslist, Yelp, and references from trusted small businesses in the area. Do your homework by conducting adequate research and background checks on anyone you hire. This includes checking references and making a concerted effort to see their past work. Don’t forgo this important point: costly mistakes come from hiring untrustworthy contractors, and that’s exactly what you’re trying to avoid.
• Shop the sales. You, too, can have great looking aesthetics just by knowing where to shop. You don’t have to hit up Restoration Hardware to get great looking and very appealing cosmetic touches the big guys pay for at a premium. Scour the Internet. Check eBay regularly for discounted lots of materials. Keep an eye out at your local Goodwill, where many businesses tend to donate their overages. And, there are also amazing finds to be found at places like the Discount Home Warehouse, and other similar businesses that offer deep discounts on recycled materials and furnishings.

Of course, the best idea for any property owner is to enlist the assistance of a professional property manager who knows what it means to work on a budget, while providing services to rival the big guys. Class A Management can be that provider for you. Call us today to learn more at 817-295-5959 or send us an email to info@classamgmt.com.

A tenant may not fully understand the classification of apartment complexes or even know classifications exists. To the owner and property manager, however, this rating is very important. It indicates not only appeal, but also the rental rate that can be expected for each level within the given market. And while owning and renting out a Class A multifamily property is highly desirable, the cost of acquiring one out-right can be prohibitive.

The great news? You have the ability to own a Class A-type property without having to purchase one. How’s it possible? It’s simple, really. You purchase a Class B or Class C property and make the necessary improvements to create a complex worthy of an “A” rating. Here, we take a look at the features that separate them, and learn how some simple changes can make big differences.

Multifamily Property Classes

One of the main differences between the classes is locations. When they say ‘location is everything,’ there’s truth in the statement. Class A properties tend to be in the more affluent areas of town where white collar workers live and the more expensive real estate is constructed. Class B properties are just a step down and can be found in the middle to upper middle class neighborhoods. Class C properties are another rung down, and can be located in the low to moderate income areas most typically home to blue collar workers. And then there are Class D properties, which suffer from neighborhood issues, and therefore cannot be modified in any way that would increase their ratings. For this reason, we do not make consideration for this classification going forward.

Another significant factor is age. The majority of Class A properties are brand new and are built to include all the latest components of design and amenities. Class B properties, on the other hand, are about 10 to 20 years old. They have structural integrity, but because of age, may be just a bit outdated in design and amenities. The Class C property is 30-40 years on average, and while it, too has structural integrity, it has likely already been through at least one significant revamping and may be in need of another.

While you’ll never be able to change a property’s neighborhood or age, you can up the asking rental rate by making it the most highly desired property in the neighborhood in which it currently resides. Here’s how:

B-Class Properties with A-type Qualities

To achieve an A-class quality in look and feel, it’s all about attention to detail. Fresh paint, new carpet, newer hardware such as knobs and faucets, and the latest in community amenities. New appliances are also an included offering.

C-Class Properties to B-type Qualities

One of the best things to be done with a C-class property is focusing on the age of the building and playing that up in the rehab and marketing. Many people are drawn to the history, look and feel of older buildings, so incorporating new hardware created to capture an older ‘feel’ will help accomplish this. Using new, but older-looking tiles and backsplashes, as well as hardwoods or treated concrete floors will help accomplish this as well. And, of course, amenities should also play a large part as well.

Class A Management

Ready to create a best-in-class property? Let us help. Contact the professionals at Class A Management today for more information at 817-295-5959. You can also send us an email to info@clasamanagement.com.

The thing landlords fear most: damage to their rental. Yet, depending upon the type and location of the property itself, damage often comes with the territory. There are, however, measures that any manager can take to help protect the property and the owner’s interests for the long-term. Here, we take a look at the top six.

Damage Proofing Rentals:

1. Screen Applicants. The importance of screening cannot be emphasized enough. Through a thorough background and references check, a tenant’s history is easily discovered. Whether or not he/she has had issues with former landlords, has a problem with non-payment, or has even been evicted are all items that can be quickly uncovered. Calling on past landlords, running a credit check, and verifying employment can provide a reliable personality snapshot to be used in determining suitability. In this case, a little effort now can help prevent significant challenges in the future.
2. Put it in Writing. The contract is the best place to include any notices, obligations, responsibilities, etc., to and of future tenants. This is the opportunity to clearly define the condition to which a unit and surrounding property must be maintained, as well as the applicable penalty that may arise in the event the conditions are not met.
3. Get a Deposit. Look at the deposit as a safety net. In the event damage occurs and there is no way to seek retribution from the tenant, his or her deposit can be applied to repairs, keeping insurance or out-of-pocket to a minimum.
4. Foster Relationships. An absent landlord who pays little mind to his tenants is most likely to have tenants who feel neglected, and will treat the property as such. Be involved. Take an interest. Foster a sense of community. If you know where your tenants are and what they are up to, they will sense your awareness and recognize the lack of freedom to do whatever they want to the property. Additionally, an involved and caring landlord has better chances of earning respect, which encourages loyalty from tenants who wouldn’t want to do harm to someone who cares for their well-being.
5. Follow Through. If your contract threatens legal action in the event damage is done to the property, you need to follow through. Not only does this help you attempt to recoup lost costs, but it also sends a message to current and future tenants that you’re true to your word.

A Great Property Management Company

The sixth measure any owner can take to help damage-proof her property is in the hiring of a good management company. Having a party in your corner who knows how to construct the best contract, vet all applicants adequately, and monitor the goings-on of the property on a consistent basis helps ensure its viability and return for years to come. Class A Management is here to help you. Call us today to learn more at 817-295-5959, or send us an email to info@classamanagement.com.