Your First Steps After Closing with Alain Villegas and Michael Barnhart

Episode 95 of the Diary of an Apartment Investor Podcast with Alain Villegas and Michael Barnhart, hosted by Brian Briscoe. Transcript by – please forgive any errors.

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Brian Briscoe 0:00

Michael, we got Elaine on the line here. What do you want to ask him,

Michael Barnhart 0:03

what is the first thing you do on day one when you take over the asset.

Alain Villegas 0:06

Day One is a very busy day. There are a lot of things that you have to onboard you wanted to take over to be as smooth as possible. Now, having said that the takeover activities should start prior to closing, we do sit down on a meeting with property management, three to four weeks before closing and discussion items include the business plan, first quarter, second quarter, third quarter and fourth quarter and also including the year's business plan items. Now if you do not do those things prior to close, then you're already running behind by day one.

Brian Briscoe 0:50

Welcome to the Diary of an Apartment Investor Podcast with your host Brian Briscoe. In this podcast we bring some of the top professionals in the apartment investment field to discuss various aspects of the apartment investing journey, with the sole purpose of educating listeners to make wise investment decisions. The Diary of an Apartment Investor podcast is sponsored by Four Oaks Capital, bringing you high yield returns through apartment complex investing. This is journal entry number 95. And part of our Ask the Expert series. Today we bring on experienced investor link vegans and aspiring investor Michael Barnard. Keep listening to hear about the first steps to take after closing on a property and how to financially incentivize your property manager. And now this show Hey, welcome to the diary apartment investor podcast. I'm your host Brian Briscoe with four oaks capital. Very excited for today's show. It's one of our Ask the Expert episodes. We've got two amazing people on the line with us right now a man with a tonne of experience in this and other fields. Elaine Villegas and a motivated energetic aspiring investor, Michael Barnhart, tell you a little bit about Elaine, and then we'll hop right into the show. Lane is a full time commercial real estate investor, he established your real estate investment company LML investments in 2012. He's a managing partner of abundance Equity Partners and active asset manager on nine properties 13 170 apartment units total, this total ownership stake is in over 2600 units as a deal sponsor, key principle, independent owner or limited partner. And that said, Elaine, welcome to the show.

Alain Villegas 2:18

Brian, thank you for having me on your show. And to all the listeners. Thank you for your time. I'm a chemical engineer by education and currently working on the IT consulting industry. around three years ago, I moved into apartment and now I'm doing this full time.

Brian Briscoe 2:37

Yeah, yeah, I love it. You know, and just just for our listeners, you know, the two of us met a year ago, it was the last real estate conference I went to for COVID shut everything down. But it's a pleasure, pleasure having you on again. And so let's talk a little bit more about your history. You know, I know you're a chemical engineer, you're working in that field, give us a little bit more of your background in history.

Alain Villegas 2:59

Yeah, so in 2012, I still have a W two job then. And I was doing real estate investing on the side owning a few single family rentals, and a small apartment. And by 2007, we did well. The cash flow on single family rentals are really nice. And by 2017, my wife and I were able to have a considerable liquidity. And we needed to deploy our capital. We sold some of our single family rentals. And we that liquidity, we decided to jump into apartment space. Now, when we were when we started buying single family rentals, our goal was to replace our w two income and retire early. And we have no we did the numbers, we have identified how many doors that we are going to own to be able to get there. But as we started building up our rental portfolio, we noticed that we also spend more time on them. And we realise that we are just replacing our jobs without really freeing our time. I did the same thing starting with a single family homes. And the other thing I noticed is that scaling was gonna take a lot of effort I spread she did everything out and and my number based on the metrics in the place that we were investing, I was going to need like 50 single family homes and that, that effort to me seems a seemed like an enormous amount of effort. But anyway, go

Brian Briscoe 4:32

go ahead with your story.

Alain Villegas 4:34

Yeah, so actually, we have the same number of we said, okay, well, we're going to own 50 single family rentals. But we are we're really motivated to step out of corporate world and get back our time. So we started exploring our options and after doing some study and research apartment came out this great space, as you mentioned, with economies of scale apartments enables us Those of the owner to hire full time staff and I know them that this is where I can realise our goal of stepping away from the corporate world and taking back our time. So that's, that's where the motivation came from in terms of really jumping into apartments.

Brian Briscoe 5:20

Yeah. Now the the single family homes you you invested in? Were those in your local area?

Alain Villegas 5:26

Yes, yes. Here in Dallas Metro where I'm based.

Brian Briscoe 5:32

Okay, good. Good. So when did you transition from the single family to multifamily? And I guess the other question that goes along with that is what did you do to be able to make that transition?

Alain Villegas 5:44

When we decided to jump into multifamily, we just think I'm doing it ourselves. And we spent almost a year trying to get deals, talking to brokers, underwriting properties, and we ended up with zero doors. And we realised me and my wife realised that, hey, this is not the same as the single family space, or you can do it by yourself. We need to build a team. And so I joined an investor group. And after right after joining the the investor group, we're able to find success in getting acquisitions or buying some deals, and we did not look back since then.

Brian Briscoe 6:24

Yeah. So what do you think the difference was before and after that group, and what really made a difference for you in joining that group,

Alain Villegas 6:34

so the thing is in multifamily, there are a lot of pieces. In order to build a deal and you need, you need brokers, you need a property management company, you need contractors, legal counsel. And that's what you get in joining our group, you You're the group assess, the investment group already has vetted vendors. And it becomes very easy to build your team. Now having all this people including the mortgage broker, insurance companies, you're already sure that this, this vendors, this team that you're building, will be able to support you. And once I joined in, it was very easy, because at the same time that we are presenting ourselves, having this team behind us, also provides us good ability to the sellers. And that's what it takes. This is support methods, relationship business, and you need to have this strong relationship with your team in order to be successful and get the offers accepted.

Brian Briscoe 7:36

Yeah, a lot, a lot of parallels to how I went through it. I mean, I was touring, you know, six unit complexes, eight units, you know, things like that, trying to do it on my set on my own. And it wasn't until I did the exact same thing, you know, joined a group paid for coaching and then built that team around me. It wasn't until then that I actually started getting traction, and I was putting out offers, you know, every every other week, but I think you hit the nail on the head, you know, you need to have a credibility with the sellers and the brokers and a team gives you the credibility So yeah, I think that's that's a very common trend with with a lot of people who get into our position you later on is you got to figure out a way to become a we and not just an AI doing things. Good. So So you started looking at multifamily now most of your properties are in the DFW area. But you have a couple in Houston, right?

Alain Villegas 8:27

Yeah, actually have one in your zone. The other one is in Abilene. So that's Yeah, and seven are in Dallas Metro. Okay, nice,

Brian Briscoe 8:35

nice. So walk us through, you know, one of those properties, you know, pick either your favourite one or a recent one and give us an idea of one of the properties you've invested in, you've sponsored.

Alain Villegas 8:48

Yeah, so I have sponsored nine, Class B and C properties. And I am, I'm an active asset manager for all, we are fortunate to be able to ride out the profit period that we were able to maintain the performance and distribute cash flow to the investors. But talking to you today is actually a perfect timing, because yesterday, one of our investors published a case study about this investment with us and the deal that we own in Fort Worth, Texas, and I'm going to talk about that. So we bought that property in 2018. And on year one, we returned 11% cash flow and we were already planning to sell it last year and feel forfeited, we feel that we the pandemic there will be pricing discount if we sell it and so we started planning for refinance instead. So we had the property appraised and the valuation came out six to 7% higher. So in less than two years, we were able to increase the property value by 67%. Compared to the price that we purchased it. It was my second deal actually. So we really put the Have a focus on that. And we decided that instead of selling, we will just refinance. So in 2020, we're still fortunate to have the property performing. So from operations, we returned 77%, and from the refinance 44% to our investors. And so the cashflow for last year was a total of 51%. So after two years of ownership, we have returned a total of 62% of the investors money already. But here's the thing. It's amazing, but due to lower interest rates, our debt service is lower, despite having an increase in our loan. So our cash flow position is even better as we continue to hold on this investment. So it and I think that triggered one of our investment to write the case study and I already have a few, many investor who said, Hey, Elena, any, you know, if there's some investors that comes to me and looking for recommendation, we just recommend you because we have great experience with the with our investments with you.

Brian Briscoe 11:04

Yeah, that's awesome. You know, those numbers are just killer. And I love how you guys were able to just you view what was going on in the market and say, you know, we have planned on selling right now. But it may not be the best time because of what's going on and that refinances is killer, I mean, 2018 interest rates were, you know, five for agency debt, you know, and nowadays, your you can get, you know, low threes for agencies. So, I think that's a, that's an absolute killer deal. Usually, when you refinance, you're you're getting a bigger loan, and your debt service goes up, which kills cash flow, but you were able to make that work with a lower interest rate, higher debt and less debt service. So I mean, your numbers should just absolutely crush pro forma from here on out. Now, here's a question How did you communicate that to your investors? And were any of them planning on getting their money back this year?

Alain Villegas 11:55

Yeah. So for for our investors, we do a monthly reports to them. So they know about what's going on? What's our projections for this year? How are we managing know the challenges that comes with people losing jobs, or tenants potentially losing their income? So we are very proactive on that. And at the same time we give them? What's the current situation of the market? What are we expecting for the year and where the opportunities will come from? This is just to make sure that, you know, whatever we see, we always, you know, get the feel of where the multifamily investing goals, and we just want to make sure that this information that we have, is also communicated to investors first, so that they will be able to make a decision or an informed decision on whether to continuously invest with us, or look for investment elsewhere. And second, also to be able to make sure that we are being proactive in making sure that we are protecting their money that they have just said, Enough. Nice,

Brian Briscoe 13:02

nice. I love that, hey, we're gonna shift shift gears slightly here. And I got a question that I like to ask everybody. And that's about your big burning, why what what is your motivation? And I know you've talked a little bit about this, you know, throughout your story, getting out of the corporate world, but if you can boil it down to one or two things, what's your big burning Why?

Alain Villegas 13:21

So, first, we want to spend time with family and friends and we just want to take back our time and thing corporate world will not will not get it, even if you make tonnes of money there, you know this, this company will still own you, you will still have to ask them whenever you say, Hey, I'm going to vacation, we just want our time back. And, second, this time that you have if you spend it wisely, with your family, it goes a long way and on translating it into satisfaction and happiness personally. But at the same time now that you know we are we are doing syndications in apartments, there's also satisfaction in knowing that you're able to provide value to other people as well. So it's not only us, it's not only personnel, but also being able to help other people.

Brian Briscoe 14:11

Yeah, I mean, it's not just freeing up your own time, but you're giving people a vehicle to be able to earn passive income, you know, mailbox money as some people call it and get that exact same thing that you're searching for. So it's one thing that I absolutely love about this, this business is you get to help other people achieve their dreams at the same time you're reaching for years. So Love it, love it.

Alain Villegas 14:33

So what's next for you? Well, you know, 2021 is a very promising year. We just went through the the market updates and it looks great. I mean, we can see a lot of opportunities this year. And we me and my, my partners will continue to do acquisitions this year. We target between five to seven deals, and that's three to four deals just between me and My two main partners and between two to three deals with strategic Equity Partners. And we also have mobilised property already that we own, I think two to three properties. And we're planning to exit them this year. Since, you know, as we discovered on during COVID, period there this five or six months, there is no deals on the market. And what we did was we improved our inter internal business processes, and we will continue doing that. And the reason why is to be able to provide amazing experience for investors at the same time, continue to give out great returns on their investments with us. Nice.

Brian Briscoe 15:42

Now, are you guys continuing to focus in Texas and especially DFW? Are you guys moving your sights elsewhere?

Alain Villegas 15:49

So our main markets right now is DFW and Houston. But we are also looking at opportunities in Florida and North Carolina as well. Oh, nice. Nice. Yeah,

Brian Briscoe 16:01

we have one of my partners lives in North Carolina and other ones moving very soon in North Carolina. So that's a couple a couple of cities that that state that we really like, not Florida, we haven't we haven't done delve into Florida yet. But se in general is cooking. I think every time you see a top 10 for multifamily and you know, seems like every other day, there's a new top 10 list coming out, Dallas, Houston, Florida, in North Carolina are all all going to be somewhere on that top 10 list. So all good places. Well, let's shift gears again and bring our aspiring investor Michael on the show. Michael Barnhart is co founder adventures real estate investors. He currently is active duty in the United States Air Force. He's a PhD student in biochemistry at the University of Cambridge in the United Kingdom. And when he's done with his PhD, he'll be working at sea at the US Air Force Academy in Colorado Springs. As an assistant professor of biology, once he finishes his military career, he's plans on transitioning into multifamily investing full time after that. And that said, Michael, welcome to the show.

Michael Barnhart 17:06

Thanks, Brian. I really appreciate you asking me to be on the show. And Alaine, thank you for taking the time to answer some other questions. I'll ask you later. It's a It's a pleasure being on the podcast with you. I've been following you on LinkedIn and Facebook and I really enjoy your energy. You're always posting videos of dancing, things like that. I really enjoy that. So it's fun. Yeah,

Brian Briscoe 17:23

I mean, it's not it happens quite often when I when I link to people love that. The Australian industrial Yeah, I know who that is. I follow that guy or whatever. So it's really great. It's great to hear that. So it makes makes the conversation a lot better, I think. But so let's let's talk about you a little bit. Michael, tell us a little bit about you where you're at? And basically why you decided to get into multifamily.

Michael Barnhart 17:47

Yeah, thanks, Brian. So as you mentioned, the bio, I'm a PhD student in biochemistry at the University of Cambridge, in Cambridge, England, not Massachusetts. And basically, I'm over here, I'm active duty Air Force, I was teaching at the Air Force Academy, due to genetics and molecular biology. And then they say, I'm continuing my education in PHP. And I'll return back to the Academy to continue teaching in the bio department as an assistant professor. And then I'll transition I'll finish out my military career and transition to real estate full time at that point, while we're over here, you know, we're locked down last year, for over 100 days. And so it's kind of other lab and basically spending every single day with Susie, my partner in crime, if you will, and we were hanging out, didn't have much to do. And we decided to start reading, I think a lot. And we started, you know, I would read a book and shooter your book. We so we started this little book clubs, and we finished a book together, and then we talk about it. Well, one of the books we came across was multiple streams of income by by Robert Allen. And so we're looking to add additional revenue streams, right. And so, you know, the first section of the book is about stock market. We're like, cool, we're in the stock market. Now we got retirement plans set up and things like that. And then the second section is all about real estate. I was like, hang on, I never really thought about real estate that much, you know, own some homes did kind of like a live in flip, not really understanding the whole thing, but really diving into real estate. So I started Googling some searching, of course, which, you know, ended up on bigger pockets, and bigger pockets, pockets was all about, you know, single family to a single family that like just get started, which is awesome. They have a great platform. And, you know, after that, you know, we started digging a little bit deeper and got hooked up with some military members who are actually overseas as well. And one of those people we hooked up with was Marcus long, and it was the first person that I talked to about real estate. And he just got me jazz, jazz. Yeah. And he's doing a lot of great things. And just we are really turned on to real estate and we just kind of took off from there. After that. We attended the veterans real estate investing conference that happened last year, but on my bill alley, and his team or whatever. And one of the speakers on there was actually Whitney Sewell. And so, Whitney, he gave a talk about syndications. I had no idea what syndication meant at that point. He was talking about it and multifamily. I was like, Man, that's so cool. I can't wait. You know, in five years, that's going to be me right? So I we paid for the VIP upgrade, which allowed us access to the q&a session whenever. So we had like one on one with Whitney and I got to ask him a lot of questions and he was like, you know, you don't have to do single family first, you know, here's, here's what you need to read in order to go into multifamily. And even at that point, after all the words of encouragement from him, we were gonna like, well, when you start somewhere, we decided to start with single family. And so we ended up building a long distance investing team in Cedar Rapids, Iowa. What happened was, we had two properties under contract and the unthinkable happened. There's an inland hurricane that happened and basically took out 60% of the trees. And you know, Midland Cedar Rapids, Iowa is right in the middle of the country, right. So, weird hurricane took out all the trees making a long story short, then we couldn't get the contractor put a bid on these properties, because the contractor is more concerned with repairing the city rather than just doing rehabs for rental properties, right. So there's two properties fell in escrow. And our whole plan to buy a bunch of single family homes in Cedar Rapids kind of went out the window with that, you know, we couldn't get any contractors that So Susan, I took a step back looked at our goals, our five year goals multifamily, said, hey, let's just go and tackle that when you say we could do it, let's do it. So actually, the first networking event that we attended was yours, Brian. So that that really propelled us in got our network growing. We met all of our most our team members through through networking group, and it just like allowed our multifamily network to grow exponentially since there and so after that, one of my good friends classmate of mine, who's in his full time real estate now I've known him for like 15 years. He's in Oklahoma City. So we started chatting, and I started talking about multifamily with him and he his whole thing is he wants to move into multifamily. Now they're cool, let's let's tackle this together. You can be my boots on the ground. Since you're a full time real estate, you can be about winter ground for Oklahoma City of Tulsa. And we'll kind of run everything else. I'll do broker relations and acquisitions, our underwriter kind of that from here. And Suzy will focus on Investor Relations, and marketing and things like that. We just need eyes and ears on the ground. So needless to say, we finally got a property under contract. And we'll be closing in February. So that's kind of our real estate or multifamily journey. Yeah, in the last nine months, basically.

Brian Briscoe 22:10

Yeah, that's, that's nice. And that's quick. And it's been fun following your guys's progress, too. I mean, you mentioned your wife, she was on the podcast earlier. So if anybody's listening wants to check up on that part of the story, I just looked it up Episode 43. And Whitney Sewell was just the the episode released on Monday. So once you're really really good people, and I actually had tickets to that conference, you were talking about when it was live, they ended up closing it down. And when when it went virtual, I actually decided not to do it, but I was just like, virtual What's that? But anyway, I get a lot a lot of good stuff there to be able to unpack but let's let's look at your your motivation, your big burning y as well. What's what what is it that gets you guys actually doing this?

Michael Barnhart 22:55

I think it kind of aligns with Alain's in yours as well, Brian is that you know, as we all know, a wealth is not about how large a balance sheet is. But rather, it's about having the time to do what you want, when you want to do it. Right. My burning wife, Susan is burning wise to pursue time freedom, right. So during lockdown, as I mentioned, we were we spent over 100 days together and we really got to know each other on an even deeper level. It was just amazing to spend all that time with her. And so going back to the lab going back to work and things like that, and spending time apart now, we want to be able to create wealth through time freedom to be able to spend more time together. And so Brian, I'm a little bit further away from retirement, retiring from you, I have 2907 days left, until I retired from the Air Force, which is well over seven years. But I'm on the way. And you know, after that, I'll transition real estate full time and we were going to transition to a more of a passive role. And then

Brian Briscoe 23:51

I'm at 184 today. Yeah, I knew 184. So yeah, getting close getting super, super close. But well, that is awesome. Hey, So Michael, we got Alain on the line here where you want to ask him.

Michael Barnhart 24:06

Hey, lane, so I kind of want to dig into your asset management skills a little bit. Since a lot of people talk about acquisitions. Let's let's talk about Asset Management on this podcast. So the first question I have is, what is the first thing you do on day one, when you take over the asset? Do you have a 30 6090 day plan for takeover? And how's that whole whole thing unfold for you?

Alain Villegas 24:25

Yeah, so, day one is a very busy day. There are a lot of things that you have to onboard. And with the business plan and operational changes, you want to take the takeover to be as smooth as possible. And then there may be some hiccups and you have to inform the tenants of the change in ownership and management so that this will create excitement in the community. Now, having said that, the takeover activities should start prior to closing. We do sit down on a meeting with property management three to four weeks before closing and discussion right Include the business plan, first quarter, second quarter, third, quarter and fourth quarter. And also including the year two, business plan items, contact information of all the people to be involved in the project. Hiring of on site staff, I review of all service contracts and start the bidding out for service to replace services to replace, notice for utility transfer should be ready for operative management, software onboarding should be started. A review of office and maintenance supplies or inventory should also be ready for a day of closing. Now, if you do not do those things prior to close, then you're already running behind by day one. So the word comes even before the closing. So they want it's mostly it's mostly the items that you can do prior to closing like utilities, water electric, you cannot transfer it until the name is on your on the new owner. So most of the items can be done in advance. And there are there are there are very few items only that you can do during the time of closing, but let the community know that the new owner is coming. You have you have a new business plan and let them know that exciting things are about to come, you'll be making improvements, and you will be making the community even better for your tenants.

Michael Barnhart 26:27

It's great, just a follow up question to that is, so you're saying you know, let when you let the tenants know that you've taken over the property. And that letter, you may spell out, hey, these are the kinds of things that we're going to be targeting to you know, defects or to these amenities, we're going to be adding you add that in as well.

Alain Villegas 26:41

We just we just make general statements, that the goal of the new ownership is to make the property and the community better and safer, safer for them.

Michael Barnhart 26:53

So next question here is what has been your biggest challenge when taking over an asset? And what did you learn for it, and how has that changed your strategy moving forward?

Alain Villegas 27:02

Our previous practice before is to have a takeover meeting after we close on the deal. And that was early on on our on our early acquisitions. And as I have just mentioned, if you start that on day one, you're already behind. With a lot of moving pieces, it is easy to miss some some take over items. And what we started doing is to have this pre closing meeting, we actually have a takeover checklist and we start a meeting a month out before we close and then follow up with another meeting a week before closing to make sure that we covered all our items in the takeover checklist. Now, you have to be very thorough in the checklist and make sure that you do not miss some items. Now, there are one of our properties that were there was supposed to be a service contract that we have to take over and it was almost close to a year when we received notice from the service provider that they we are supposed to sign this contract with the new ownership and we have we have not yet received any information from you. And we will we will assess you with penalties or for this contract if you will not do so. So make sure that during due diligence, you will be given the list of service contracts for the property. So go over them those those are important because you may be paying some fines there if you do not take care of those lists down all the items do the do the takeover checklist.

Brian Briscoe 28:39

We actually got bit by one of those service contracts. You know, we had a service contract on a property for the the exterior cameras and security system. And our new property manager looked at that and said you guys are overpaying you guys are overpaying and I'm gonna get you hooked up with something that's that's a better system, you're going to have better response, you know, it's just, it's going to be it's going to save you guys money. And what we didn't realise is there was a cancellation clause in the contract and we ended up paying a large fee once you cancel the contract but yeah, it's something you gotta you got to be meticulous on as far as a contract goes. And anyway, the good point you brought up, you know, make sure you know what's in those contracts. Now, like I got one question for you. I don't usually ask the questions at this point. But I'm just going to jump in and now your your assets are mostly in in the Dallas Fort Worth area. Do you use the same property manager on everything? And if so, how does that make things easier on each acquisition?

Alain Villegas 29:36

Yeah, so for our properties in Dallas, we use one property management company for our property in Houston. It's a different property management but having the same property management company, for for our new acquisitions. It makes the takeover process easier. We already know who will communicate in terms of the onboarding process. What are the information They need the timing of the activities that we have to do. And at the same time, the people that we work with, we already know them, they already know us. And that makes the process much easier. Nice.

Brian Briscoe 30:15

Nice. I anticipated that answer, but I just wanted to hear it. I mean, we've started, you know, acquiring more and more properties. And we've we've used the same property manager on most of them. And it's, I echo everything you said. All right, back to you, Michael.

Michael Barnhart 30:31

So we talked about takeover, let's move into that of the operations here. So when developing incentive programmes for your property management company, what are the top two or three KPIs or key performance indicators that you kind of target for those?

Alain Villegas 30:46

Yeah, so um, I look for I look at four important items. But, you know, for many, it's, it's very easy to say, hey, occupancy jumps off the top of the list. And it is one of the most important information or the most important indicator of the performance of the property. But for me, the most critical is the net operating income, budget versus actual. And the reason for this is, it is sort of reflective of the overall performance of your operations. It, it takes into account both your your income side and your expense side. Now, we also want to watch out for your delinquency, you want your delinquency to be capped at three to 5%. Ideally, one 1% delinquency is desired. But, you know, during COVID, period, it's expected. And we did see an increase in delinquency, but keep it between three to 5%. That's one of the things that you want to look at. And also vacant units, you want to make sure that you always have a vacant unit ready. And this is for you to be able to make sure that if there's a potential tenant qualified tenant that wants to move in the same day, it will help your leasing staff to close this deal with with the potential tenants, you can they can easily say, hey, you want you want the unit today? We already have one ready and you're qualified. So those are the two things, the four things noi, the occupancy, delinquency and status of vacant units? Make sure that you're on top of this, because that's what you need to have your property performing. Well. Love it.

Michael Barnhart 32:36

Yeah, that's great. It's great. So diving into the occupancy piece real quick. If you're targeting a certain occupancy with your property management company, let's say 95% or something, you know, how do you go about incentivizing this, but also ensuring that the property management company is leasing to quality residents, not offering like unnecessary concessions or lower rent and things like that?

Alain Villegas 32:57

Yeah, so I'm focused marketing efforts is necessary to achieve and maintain high occupancy. So depending on your target demographics, you may have to do advertising in Google, Facebook or free advertising. Using Craigslist, you may do hand out flyers and nearby employment centres. It works for certain areas, but you need to be consistent and doing the marketing efforts that works for the property. So if a Class B property means advertising in Google, then focus on that, if you are just a mile out of an employment centre, so there are some businesses near you and handing flyers to there gives you the constant flow of demands that you need, that lives in that will live in your property, then continuously do that. Now, having said that, you need to set up a leasing criteria and make sure that the property management follows that leasing criteria when qualifying potential tenants. Now, the criteria depends on your property, whether it's Class A, B, or C, but you have to stick to that. But also not Not only that, but you also need to make sure that you have a good handle of what your rent comps are offering. In terms of concession you don't want to offer one month free when all the other properties in the sub market has high occupancy is not giving any specials and also vice versa. So now, in terms of incentives, you know, you want your property to perform well, but, you know, the people your onsite team is very instrumental in that in getting high occupancy and getting high revenue. Now, you have to give realistic targets in terms of incentives for your onsite team. Start with lower bonus aware, it's very to achieve that, that bonus, but it's higher than your budget, for example, your budget calls for 92% occupancy, you tell them, Hey, get me to 94, or get me to 93. And you will get this performance bonus. And as your team hits higher occupancy higher revenue, also increase the bonuses. So this will motivate your team to hit even higher performance. Once they hit 93, they will think I think we can get to 95, I think we can get to 97. So if you have a scaling bonus, where it increases as they hit a higher level of performance, then it gives them an extra push, like, Hey, I may be able to hit this, and I think we can do this. And then there's, you know, there's a performance incentive. If we can do this, it will give them motivation to give that extra push.

Brian Briscoe 35:55

Nice, nice. Hey, one last question, we got time for one more.

Michael Barnhart 36:00

So you're talking about the scaling bonuses Is that like a new use, like a monetary bonus, or days off, or plaques or some other kind of rewards you kind of use?

Alain Villegas 36:12

Yeah, so um, we normally give out the cash bonuses to our team, this this higher impact for them to motivate them. But what we do is make them feel really appreciated. So as owners, we tell our property management, regional manager without a May, we want to give out more in the store team. But what we do is we take them out for lunch. And that allows us to be able to talk to them and for them to also to give us feedback on what we can do more in order to improve the property. And we then we hand out the bonuses personally, this gives a personal touch, your your onsite team will feel more appreciated if you do this, because it's the owners who are shaking out their hands and, and then giving the incentives to them. And you know, this personal touch goes a long way. And you will have a team fighting and hustling for you, knowing that you're there. You know, you personally acknowledge their achievements and reward them accordingly.

Brian Briscoe 37:26

Nice. Well, we're about out of time right now. I got one final question for both of you. I actually, before I do that, you know, I definitely appreciated this conversation more just because I am not the asset manager in our company, you know, and this was this was all a lot of good stuff that I was taking notes thinking, Hey, man, this is MC make sure we're doing this. Make sure we're doing that. Yeah, I know, we are doing a lot of what you what you suggested. But you know, it's it's nice to hear, you know, a different aspect on stuff. So Michael, thanks for thanks for asking about asset management. I think it's something that not enough people talk about on on podcast like this. But now back to the last question for each of you. And Elaine, you're going first? how can listeners learn more about you?

Alain Villegas 38:06

Yeah, so please reach out to me by email, my email address is That's ALAIN VI, l l e. g You can also reach me out in Facebook, leaving the legacy and also in LinkedIn, I'm based in Dallas, Fort Worth, Texas. But we are open to other markets as well, in terms of acquisitions, but we love providing great value to our investors. So if you're looking to passively invest, please reach out to me, My phone number is 317-440-1116. And so I look forward to your listeners. So Brian, thank you for having me and highly recommended this of podcast, your podcast. And also I recommend this to to all the listeners recommend this to all your friends and hope you get something some lessons from our discussion today. Yeah, hey, thanks a lot. I

Brian Briscoe 39:10

appreciate that. And for the listeners, if you want to get in touch with Elaine highly recommended. I will put his email address and links to his Facebook LinkedIn profiles in the show notes, just to make it a lot easier for you guys just you know, tap scroll tap again, and it'll whisk you away to you know, whatever you're looking for. Michael, same question for you. Thanks, Brian.

Michael Barnhart 39:34

So yeah, as you know, I'm overseas so there's plenty of ways to invest overseas or even out of state. And so what I did was put together a guide where you can, there's four different ways that you can invest either out of state or overseas, get that guide at www dot adventerous Rei comm forward slash guide, you can download that for free. And you can also reach out to me on my email at explore more adventure. Interest and just visit our check out our website at interest, Rei calm. And you can find me on LinkedIn, Facebook and things like that as well. All right,

Brian Briscoe 40:08

sounds good. So yeah, and I'll also put links to social media profiles and adventures, Rei and your email address in the show notes. So anybody who's looking to get in contact with him, or you can show up at our Friday, you know, meetup and information for that's on LinkedIn because you know, you and Suzy are, you know, kind of the placeholders on that group. So anyway, Hey, thank you so much to the two of you for for being on the podcast today. You know, very much appreciated and look forward to talking to you guys again soon.

Thank you for listening to the tiger one apartment investor podcast today brought to you by four oaks capital. If you'd like to know more about how to invest in apartment buildings or want to be a guest in our show, visit our website at four oaks capital comm slash podcasts or email us directly. If you're still listening, you obviously like the show. So pull out your phone, app, subscribe, and leave us a five star rating on your favourite podcast app. And we'll see you again next week.

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