Posts Tagged ‘Rentlytics’

Multifamily Finance Trend | Real Estate Crowdfunding: Is Technology Cutting out the Middle Man?

Written by Apartment Management Magazine on . Posted in Blog

Rentlytics_Article ImageAs real estate crowdfunding builds a head of steam behind the JOBS Act, what are the benefits and initial concerns that will make or break this budding industry?

“It is really this access problem.” says RealtyShares co-founder Nav Athwal and his partner Trey Clark. “The fact of the matter is, there is no easy-to-access marketplace for even investors to access a reliable source of quality private real estate investments and thus investors have traditionally invested in what is readily available – stocks, bonds and mutual funds.”

When President Obama signed the JOBS Act in April of 2012, the crowdfunding industry achieved what has been identified in the industry as having “potential to be a game changer” for future private equity fundraising efforts. According to RealtyShares, the JOBS Act brought about for the first time since the great depression and the enactment of the Securities Act of 1933, the opportunity for unaccredited investors to be able to participate in a private equity deal.

This is a huge step for investors looking to take advantage of the fact that private equity investments in the U.S. have traditionally outperformed the stock market. Up until the signing of the JOBS Act, these private equity deals were reserved for only for the wealthiest investors, while the average investor was left to invest in the public markets.

And while the JOBS Act is considered by most to be a step towards balancing this inequality, it does have its limits. For both investors and fundraisers, understanding these limits is crucial.  For starters, some of these limits may be prohibitive when it comes to private real estate deals and the act sets a $1 million per issuer, per year fundraising ceiling in addition to possible exorbitant compliance requirements.

One of the biggest benefits of crowdfunding real estate is that it allows investors greater access to deals and it offers a way for them to diversify portfolio.

“If you take a standard investment portfolio, allocated 60% to stocks and 40% to bonds, and reallocate a 20% portion of it to private real estate, you not only increase returns but reduce volatility.” adds Mr. Athwal.

Platforms, like the one RealtyShares operates, allow investors to invest passively in private real estate investments, all while managing the transactions as they would when investing in either stocks or bonds.

With technology, the industry is able to increase the transparency around how capital is raised for private real estate investments and the fees that real estate firms then charge investors.

According to Nav at RealtyShares, “Real estate has been operating under the country club model for too long. The fees operators have traditionally charged investors to pool their funds, acquire properties, and manage the final real estate assets are typically hidden amongst a ton of legal jargon.”

Technology makes the entire process of crowdfunding possible. Without it, this market wouldn’t be possible. Technology allows crowdfunding to adapt and overcome these shortfalls to allow prospective investors to have this desired transparency and increased accountability.

From a logistical standpoint, technology allows for not only the feasible managing of multiple transactions, but also makes it possible to reduce costs through the added efficiency. This efficiency opens up the door for smaller investors who want to get involved in deals with a minimal investment of $5,000 in most cases.

Does this spell the end of the real estate middle man?

“I think that technology enables more information to the investor and better decision making, however the middle man will still always be a part of the process,” says crowdfunding investor Justin Miller, “We will always need someone chasing and sourcing great deals.”


JustinAlanis Justin Alanis | Company Website | LinkedIn Connect |

Justin Alanis is the Co-Founder and CEO of Rentlytics Inc.  Rentlytics is based in San Francisco, CA providing deep analytics for apartment property owners and managers. View and analyze property operational and financial metrics more effectively and identify issues.

Real Estate Trends | Real Estate Crowdfunding: An Easier Way to Raise Money for Companies

Written by Apartment Management Magazine on . Posted in Blog

RealEstate CrowdingOne of the biggest problems facing today’s entrepreneurs is the lack of access to financing. In fact, 98% of the businesses that are able to secure an appointment with a venture capital firm fail to secure financing often as a result of a single element in their business plans.

The Small Business Administration reports that, regardless of the level of legitimacy of the business’s need, banks in the United States are lending less often. In 2011, banks had over $607B worth of outstanding American business loans, all of which were for $1M or less. In comparison to the same period of time in 2008, that’s a reduction of about $100B.

As discussed earlier in the week, crowdfunding, is the practice by which informed investors pool their money together into a single deal. For real estate investors, that would be to acquire property. In return, the investors earn a share of the profits once the deal is complete. Aside from the smaller risk, the “crowdfund” investor is able to benefit from having other informed investors involved in ensuring their deals’ success.

It’s clear that the advancements in technology have revolutionized the ways in which we access and gather information. Researching an investment was once more of a cumbersome process that took not only time and money, but know-how and access to previously publicized resources.

These days you can research everything from property profile data and lean information with nothing more than an address or parcel number. Once you’re invested, there is technology available that allows you to track and manage all the deals in your portfolio without missing a beat.

Now, thanks to the JOBS Act that President Obama passed in spring of 2012, the general public is now allowed to obtain actual company equity in exchange for funding a company’s efforts.

And the timing for such an act couldn’t be better. With all the communities that have been hit by the housing crisis and unemployment trends, crowdfunding has the potential to become one of the primary means for boosting the overall economy.

Through these types of investment opportunities, we can see a new surge of investing for our nation’s small businesses. After all, in the past two decades, small businesses have been responsible for creating 65% of the new jobs in the country.

As far as the public’s acceptance of the crowdfunding platform, statistics gathered by Massolution Research show that the funds collected on the current platforms have grown by a whopping 524% to fund over a million new projects with the $1.5B they raised.

“Yesterday, it was a big deal if you could get Intel to invest in your company. Tomorrow, you will seek funding from 500 Intel employees, who are all better qualified to vet your technology startup than 90% of the people in Intel’s investment arm,” says Fred Trotter from O’Reilly’s Radar. “These crowdfunders are also willing to make a decision to invest in six hours rather than six months.”


JustinAlanis Justin Alanis | Company Website | LinkedIn Connect |

Justin Alanis is the Co-Founder and CEO of Rentlytics Inc.  Rentlytics is based in San Francisco, CA providing deep analytics for apartment property owners and managers. View and analyze property operational and financial metrics more effectively and identify issues.

 

Multifamily Renters Trend | How Today’s Moving Trends Will Affect Multifamily in 2014

Written by Apartment Management Magazine on . Posted in Blog

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According to a press release that the U.S. Census Bureau shared late last month, 11.7% or 35.9 million U.S. residents moved their primary residence in the 2012-2013 year. This translates to a drop of about 12% compared to this same time period from the year prior.

When comparing the data found in the Geographical Mobility report published in 2013, these statistics show 2013’s numbers to be very similar to the 11.6% reported in 2011.

Researchers found that 48% of Americans claimed that the move was housing-related, 30.2% was a result of family, and 19.4% said their move was fueled by employment-related reasons.

What do these moving trends mean for multifamily?

We have three solid years in which moving trends have remained steady or improved nationally, with certain specific metropolitan areas seeing enough growth to maintain the averages for their whole region.

At 13.4%, the Western region of the United States has actually seen the highest percentage of all movers. This is followed by the South, who received 12.8% of our nation’s movers, and the Midwest who turned in an even 11%. The region with the lowest mover rate is the Northeast, who had 7.8% in the last year. According to these trends, industry professionals can expect to see at least these same percentages with a slight improvement being the most likely result of all the new activity planned for 2014.

Multifamily News identified that two-thirds of today’s movers are staying within their same county of origin. In addition, 40% of these movers are staying within 50 miles of their current home.

To the multifamily apartment owners or managers, this means that the bulk of their new renters are likely going to relocate from a relatively short distance. The method in which we’re planning to market our properties needs to hone in on this close-proximity trend.

When it comes to further segmenting this short distance market, it has been found that existing multifamily residents are more likely than current homeowners to move. Data for 2012-2013 reports that 24.9% of renters moved throughout the year, but only 5.1% of homeowners did the same during this time period.

Outside of regional differences, analyzing other areas of data gives property owners and managers a way of refocusing specific communities’ existing marketing plan so that it identifies patterns of the most likely renters in 2014. Job relocations, for example, which account for about 25% of our total movers, have a tendency to pay higher rents initially before settling into any community permanently. This should call for a differentiated marketing approach.

Is your multifamily real estate market already experiencing any of these trends?


JustinAlanis Justin Alanis | Company Website | LinkedIn Connect |

Justin Alanis is the Co-Founder and CEO of Rentlytics Inc.  Rentlytics is based in San Francisco, CA providing deep analytics for apartment property owners and managers. View and analyze property operational and financial metrics more effectively and identify issues.

Multifamily Tech Trend | Property Management Companies Going Paperless in 2014

Written by Apartment Management Magazine on . Posted in Blog

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After reports surfaced that the U.S. Department of Veterans Affairs was having logistical problems processing claims due to the literal piles of paperwork they had accumulated, it became apparent to the rest of the world who hadn’t begun the process of going paperless, that it was time to get serious.

For those in the multifamily industry, the idea of going paperless not only means a chance to reduce overall expenses, but once established, can mean both time saved and a boost in the overall quality of work produced.

From clearing of the office clutter to the fact that going paperless can be a great marketing message, we have some great tips for promoting a paper-free zone in your work-zone.

Why should management companies eliminate paper leases?

When it comes to the business of leasing, going paperless can present a whole new series of benefits. One of the foremost benefits is the ability to execute leases anywhere in the field. Since you’re digitally transmitting everything, only a wireless internet connection and connectable device are needed to present, sign, and distribute those documents to the tenants email and a virtual office file that your staff shares access to.

Agents will spend less time and money traveling and even less energy consuming detailed audits of all the properties in your portfolio when all the documents are electronically accessible.

Industry professionals estimate that up to 40% of the time in leasing offices is spent dealing with paper to make copies, set up files, to send faxes, or simply just searching through existing files to find need documents.

In the long run, it’s time that could be spent being proactive and accomplishing tasks that affect the bottom-line.

How can management companies get e-signatures on their leases when they are paperless?

paperlessSigning

If you’re just looking to store and share documents online with your users/agents, then Google Docs is a simple, no-cost solution. If you need to take it a step further, Adobe EchoSign is a free e-signature app that allows you to both sign documents digitally and send those documents via email or Google Docs/Drive.

If you are looking to have that same power of Drive/Docs while also adding the ability to capture actual legal signatures on your leasing documents in an all-in-one environment, however, then you’ll need to enlist the services of a company like DocuSign, Lease Runner, SyndicIT Services, or On-Site.

DocuSign has been endorsed by NAR as their official electronic signature provider and boasts that over 115,000 real estate professionals are currently using the program to manage everything from residential and commercial real estate, property management, mortgage, escrow and more

LeaseRunner, like On-Site, is a 100% paperless, time saving application that maintains editable lease documents that comply with all 50 states and a variety of property types. The documents have the ability to capture electronic signatures and store everything digitally.

What do the statistics say about companies who go paperless?

When you look at the sheer impact the paper and ink industry has on the environment, paper consumption in America has generated approximately 85 million tons of paper waste. The pulp and paper industry in the United States is actually the 2nd largest consumer of energy.

According to the statistics gathered by GoPaperless.com, the average office worker prints around 10,000 pages per year. That’s equivalent to two-and-a-half fully grown trees and 56 gallons of oil per office worker, per year.

By going paperless, the study shows that the average multifamily real estate office can see benefits that extend into not only a reduction in the business costs associated with paper, printers, and ink and toner cartridges, but a reduction in physical filing cabinets and the time it takes associates to search for and retrieve documents.

Going paperless can also mean that a business can begin to employ services in a mobile environment that will promote a professional image and a more customer service oriented way of conducting day-to-day business.

The protocols set in place by a paperless office management system have been shown to have the added benefits of providing the company a secure way of backing up all documents, granting better access to real time updates and document delivery, as well as creating a marketing message that lets the business promote the fact that it is environmentally friendly.

As far as managing statements and paying bills goes, the more you do online the less time and energy you’ll spend managing this part of your business. When it comes to going paperless, it’s a trend that is not going away and one that makes the kind of good “sense” that can be seen in your bottom-line.


JustinAlanis Justin Alanis | Company Website | LinkedIn Connect |Justin Alanis is the Co-Founder and CEO of Rentlytics Inc.  Rentlytics is based in San Francisco, CA providing deep analytics for apartment property owners and managers. View and analyze property operational and financial metrics more effectively and identify issues.

 

 

Resident Retention Trends | How to Hold on to Your Best Tenants

Written by Apartment Management Magazine on . Posted in Blog

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The best renters, those with high credit scores and low maintenance needs, are highly sought after in the new rental market. Renters report that they don’t mind paying a premium for a home where they feel safe and comfortable, but keeping those tenants will take more than amenities. Adding bells and whistles is just as much a dead end game as lowering the rent and no property owner will survive long without a strategy to attract and hold onto the best tenants.

Great tenants are getting harder to find and the competition is heating up to find them, even if they are not in the market for a new apartment currently. Big data and aggressive marketing techniques are the hallmarks of the emerging rental market. At the recent Apartment Rental Management conference in Miami, Kelly Maguire, an executive director at SAS, clearly laid out the future of the rental market, where owners “need to be more strategically oriented, consumer focused and be more technologically advanced.”

The new renter is older and ready to settle down a bit, according to 2012 statistics from National Multi Housing Council . For those under 30, just over half, 57 percent, are renters. That percentage increases with age. From 30-44, almost two thirds are renting at 63 percent.  Those numbers jump up to 78 percent for baby boomers aged 45-64 and the really surprising number is 84 percent of seniors are now in the rental market. We can expect those to stay high or increase as the population bubble ages. The new renters are older, wiser and accustomed to being treated with respect. Here are three suggestions for making the ideal tenants feel at home for the long haul.

1. Make it personal

The rental market has moved from one of price sensitivity to value sensitivity. Renters say they want reasonable rents, but they are more concerned about how they are treated. They could easily get lower rent or more amenities elsewhere, but most stay for  the way they are treated by the staff.

The wise owners will retain these renters by personalizing the interactions, with things like thank you notes, flowers in the apartment when new tenants move in or an online presence that covers relevant activities in the neighborhood. Remember that the new renter cares about local, mobile and social information.

2. Be an early responder

The world outside is unpredictable enough. The new renter finds uncertainty about issues in their home extremely stressful. Respond quickly when they contact you and clearly communicate a policy about call back times.

Remember that tenants will be focused on results instead of explanations. Even if you only want to assure tenants that the circumstances that led to the problem won’t be repeated, don’t. Explanations tend to sound like excuses to the renter. All they really want to know is when it will be fixed.

3. Start now

Consider your lease renewals as new sales rather than administrative burdens. Good tenants are those who plan ahead, and they may well be planning for a new apartment six months before the end of their lease. Ask how they like living there and what would make their lives easier to begin discussions about renewal.

Remember that how you ask matters as much as what you say. Alex Jackiw, managing director of residential client services at McKinley, pointed out that 67 percent of clients in a recent survey chose email as their preferred method of contact from leasing offices.

Today’s advanced databases for rental management are able to handle a great deal of information about tenant preferences and interactions. Use the tools at your command to learn who your best tenants are and what they need to feel at home.


JustinAlanis Justin Alanis | Company Website | LinkedIn Connect |

Justin Alanis is the Co-Founder and CEO of Rentlytics Inc.  Rentlytics is based in San Francisco, CA providing deep analytics for apartment property owners and managers. View and analyze property operational and financial metrics more effectively and identify issues.

Are We Overbuilding Multifamily?

Written by Apartment Management Magazine on . Posted in Blog

By Justin Alanis via Multifamily Insiders

RentvsBuyA gradual shift in the American Dream from home ownership to renting has some U.S. developers of multifamily housing and real estate market analysts (like the CoStar Group) worried over a threat of overbuilding. The concern is that the rapid increase in rental demand will eventually (and soon) dwindle, leaving a plenitude of “sitting empty” apartments and apartment buildings.

Others though — like the market researchers who attended the annual National Multi Housing Council meeting earlier this year — contend that as a whole, the industry remains safe from being over saturated with building.

“While the pipeline in some markets is at worryingly high levels (see Which Markets are at Most Risk of Over Development? below), the national supply is within normal levels,” said Bendix Anderson of National Real Estate Investor.

Mark Obrinsky of the National Multifamily Housing Council (NMHC), also doesn’t believe we are overbuilding multifamily. “The rebound in the single-family home market doesn’t mean that the multifamily market is overbuilt, Obrinsky said.

The construction rate remains below the demand for new apartments — even in the midst of the somewhat unimpressive economic recovery. “Demand requirements outpace the supply pipeline,” said Jubeen Vaghefi, international director and leader of Jones Lang LaSalle’s Multifamily Capital Markets. “This year, expected deliveries of new product will be 12 percent below historical average delivery levels.”

How Does the Real Estate Cycle Factor Into the MultiFamily Overbuilding?

When kicking around the overbuilding multifamily debate, it is important to note that local real estate development is cyclical. It includes periods of accelerated new growth, oversupply, high vacancies, followed by periods of declining rent, slowed down construction and lower prices. Then, we see an absorption of excess supply, lower vacancies, leading to an increase in prices and rent. This starts the real estate cycle over again with accelerated new construction. And as the economy improves and bank financing becomes easier — a period that we’re in now — multifamily gains momentum.

Which Markets are at Most Risk of Over Development?

While there are experts on both sides of the fence as to whether the nation as a whole is overbuilding multifamily, there are some clear ideas on overbuilding in certain segments of the country in the views of some multifamily finance professionals.

According to Apartment Finance Today’s annual CFO Survey of 100 multifamily finance professionals, markets most at risk for overbuilding include D.C. and Seattle, where 15 percent and 10 percent of the CFO respondents, respectively, indicated as their belief as areas most at risk for being overbuilt.

Atlanta and Jacksonville, Florida are other areas that are in danger of being overbuilt, says Greg Willett, vice president of research and analysis for MPF Research. That said, in Washington and Raleigh for example, Willett is certain that overbuilding is temporary in both those markets. “They’re very attractive long-term investment markets, due to their healthy overall economies and great renter demographics,” Willett says.

Points to Ponder

“There are people who will be making the transition to homeownership sooner and there are people who will be making the transition later. And some never will. That’s always been the case, but that last number will probably be larger,” says Rolf Pendall, a housing expert at the Urban Institute.

The rental culture is changing and not just in real estate. Younger generations are embracing renting. They rent rather than own movies through streaming, they share bikes instead of buying their own (Philadelphia and New York as examples of this growing trend), and they even share cars rather than bearing the cost and responsibility of car ownership (Zipcar is an example).

The multifamily market (both on the construction side and rental side) isn’t going away anytime soon. The fact of the matter is that it is contributing to the nation’s economic recovery, however lackluster that may be. Clearly we’re in the early stages of the multifamily development cycle, but how far away are we from overbuilding?


JustinAlanis

Justin Alanis is the Co-Founder and CEO of Rentlytics Inc.  Rentlytics is based in San Francisco, CA providing deep analytics for apartment property owners and managers. View and analyze property operational and financial metrics more effectively and identify issues.

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