Multifamily Asset Management Lessons From Jay and Tana Boersma
Multifamily asset management is one of the most important parts of creating long-term value in apartment investing, and Jay and Tana Boersma provide a practical look at how investors can manage renovations, property managers, occupancy, delinquency, and operating performance after closing on a deal. On Multifamily Rockstars, the couple discusses their journey from residential mortgage lending into multifamily real estate and shares lessons from their 124-unit Class C apartment acquisition in Stillwater, Oklahoma.
From Mortgage Lending to Multifamily Real Estate Investing
Jay and Tana Boersma built their real estate experience through decades in the residential mortgage industry before transitioning into multifamily investing. Jay had been interested in real estate from an early age because both his grandfather and father were involved in real estate, but he initially entered residential lending because he believed he did not have enough capital to invest directly in property. After years in the mortgage business, the couple began looking for a way to build passive income and create a long-term path beyond working in sales.
Their transition into multifamily real estate began with education, networking, and relationships. After listening to the Multifamily Rockstars podcast for more than a year, Jay joined the Warrior community and began building the knowledge and connections that eventually led to larger apartment acquisitions. The couple first purchased smaller multifamily properties before closing on a 72-unit property in 2022 with a team that included other members of the Warrior community. Their experience demonstrates how investors can progress from smaller deals to larger multifamily acquisitions by developing the skills, relationships, and confidence necessary to operate at a higher level.
A 124-Unit Class C Value-Add Apartment Deal
The featured deal was a 124-unit Class C apartment community in Stillwater, Oklahoma, built in 1972. Jay and Tana acquired the property for approximately $7.8 million, or just under $63,000 per unit. The property was sourced off market through local relationships, including their property manager, whose father had originally developed the community.
The original business plan included approximately $800,000 in capital expenditures, with roughly half allocated to interior renovations. Planned unit improvements included flooring, countertops, cabinet refacing, appliances, and lighting fixtures or fans. However, the investors quickly discovered that the market was providing valuable feedback. Within the first two weeks after closing, six units were leased at rents that matched the property’s projected post-renovation targets without requiring the planned renovations.
That development led Jay and Tana to reconsider how much money should be invested in each unit. Instead of automatically completing every planned renovation, they began testing the market to determine whether certain upgrades were actually necessary to achieve higher rents. This is a key multifamily asset management lesson: the original underwriting and renovation plan should guide the strategy, but actual leasing results should influence how capital is deployed after acquisition.
Why Investors Should Avoid Over-Renovating Class C Apartments
One of the most valuable lessons from the discussion is the importance of matching renovations to the actual market and resident base. Jay and Tana originally expected to spend approximately $4,000 to $5,000 per unit on many renovations, with some units requiring more and others requiring no work at all. But when classic units began achieving the projected post-renovation rents, the investment team had to reconsider whether spending additional capital would generate an adequate return.
The goal was to test renovations on selected units and determine whether additional improvements could justify higher rents. Jay discussed the possibility of spending around $4,000 to $5,000 on renovations in exchange for approximately $100 in additional monthly rent, while also recognizing that some units had little or no opportunity for rent growth due to lower demand. For investors purchasing older Class C properties, this approach highlights the importance of avoiding unnecessary capital expenditures and focusing renovation dollars where they are most likely to produce measurable returns.
Key takeaways for value-add multifamily investors include:
- Test the market before completing every planned renovation.
- Avoid over-improving units for the resident demographic and submarket.
- Compare renovation costs with the expected rent increase and payback period.
- Allocate capital toward the improvements that create the greatest operational impact.
The discussion also emphasizes that exterior improvements and essential building systems may sometimes provide more value than excessive interior upgrades. Parking lot work and potentially replacing older Federal Pacific Stab-Lok breaker boxes were among the exterior and property-level considerations discussed for the asset.
Multifamily Asset Management Requires Weekly Oversight
After closing, Jay and Tana moved into the asset management phase, where their focus shifted from acquiring the property to executing the business plan. They work with a third-party property management company that they have used on other assets and emphasized the importance of having a management partner they can trust.
Tana explained that the ownership team meets with the property management company regularly after closing, often on a weekly basis, to stay aligned on the execution of the business plan. While the property manager coordinates much of the day-to-day work, the ownership team remains closely involved in monitoring progress, reviewing results, and ensuring that the planned improvements are being implemented.
Some of the most important multifamily asset management metrics discussed include:
- Occupancy and the plan for filling vacant units
- Delinquency percentages
- Leasing and marketing performance
- Number of showings and applications
- Application approvals and screening
- Open maintenance work orders and completion times
- Lease renewals and upcoming move-outs
These metrics provide investors with a more complete picture of how a property is performing. Strong multifamily asset management goes beyond simply looking at occupancy. Investors should understand the entire leasing funnel, from marketing and lead generation to showings, applications, approvals, move-ins, renewals, and resident retention.
Communication and Accountability Are Essential
For Tana, communication is one of the most important factors in determining whether a property management relationship will succeed. A good property manager should be willing to communicate openly, discuss problems, and work with the ownership team to develop solutions when unexpected issues arise.
The discussion also highlights the importance of accountability. If a property manager misses a target, owners should not simply receive excuses. They should receive an explanation of what happened and a clear plan for correcting the issue. This is particularly important when tracking metrics such as occupancy, delinquency, maintenance, leasing activity, and renewals.
Multifamily asset management works best when the owner and property manager operate as partners while maintaining clear accountability. Owners need enough visibility to understand what is happening at the property, while the management company needs the authority and support to execute the operating plan effectively. Jay and Tana’s experience shows how consistent communication and regular reporting can help investors stay ahead of problems instead of discovering them after performance has already deteriorated.
The Importance of Learning Multifamily Underwriting
One of the final lessons from the conversation is that underwriting is foundational to nearly every role in multifamily real estate investing. Jay explained that investors need at least a basic understanding of underwriting to evaluate a property, participate in a general partnership team, or make informed decisions about an investment.
That knowledge also applies to capital raising and asset management. Investors who understand the numbers can better answer questions from limited partners, evaluate operating expenses, understand the assumptions behind a deal, and determine whether a property is performing according to the original business plan. For Jay and Tana Boersma, learning underwriting is one of the most important steps for anyone who wants to become more effective in multifamily real estate.
Jay and Tana’s story demonstrates how investors can build a multifamily portfolio by combining education, local relationships, disciplined underwriting, and active asset management. Their experience with a 124-unit Class C property also provides a valuable reminder that the best business plan is not always the one created before closing. Investors who pay attention to real-time leasing results and operating performance can adjust their strategy, avoid unnecessary spending, and focus capital on the improvements that create the greatest value.
If you want to hear the full conversation and detailed insights from Jay and Tana Boersma, watch the Multifamily Rockstars podcast video or read the complete transcript below.
Multifamily Asset Management FAQ
What Is Multifamily Asset Management?
Multifamily asset management is the process of overseeing an apartment property’s financial performance, operations, capital improvements, leasing activity, and property management after acquisition. The goal is to execute the business plan, improve the property’s performance, control expenses, increase occupancy, and create long-term value for investors.
Why Is Multifamily Asset Management Important?
Multifamily asset management is important because purchasing an apartment property is only the beginning of the investment process. Effective asset management helps investors monitor whether the property is performing according to the original underwriting and allows them to make adjustments when actual market conditions differ from projections.
What Metrics Should Multifamily Investors Track During Asset Management?
Important multifamily asset management metrics include occupancy, vacancies, delinquency, leasing activity, marketing performance, maintenance work orders, renewals, and capital expenditure progress. Tracking these metrics regularly helps investors identify problems early and determine whether the property management team is executing the business plan effectively.
How Does Multifamily Asset Management Help Control Renovation Costs?
Multifamily asset management helps control renovation costs by comparing planned improvements with actual market demand and leasing results. Instead of automatically completing every renovation included in the original business plan, investors can test improvements and determine whether the additional rent justifies the cost.
Should Investors Over-Renovate Class C Apartment Units?
Investors should generally avoid over-renovating Class C apartment units without first confirming that the market will support the higher rents. As demonstrated by Jay and Tana Boersma’s experience, some classic units may achieve projected post-renovation rents without extensive upgrades, allowing investors to preserve capital and focus on improvements that produce the greatest return.
What Is the Role of a Property Manager in Multifamily Asset Management?
A property manager handles many of the day-to-day operational responsibilities involved in running an apartment community, including leasing, maintenance, resident relations, and coordinating capital improvements. The asset manager or ownership team remains responsible for monitoring performance, maintaining accountability, and ensuring that the property manager is executing the investment strategy.
How Often Should Investors Meet With Their Property Management Company?
Investors should meet regularly with their property management company, especially during the early stages after acquiring a property. Jay and Tana Boersma described meeting weekly during the initial onboarding and execution period to stay aligned on operations, capital expenditures, leasing, and other important aspects of the business plan.
What Makes a Good Multifamily Property Management Relationship?
Strong communication, trust, accountability, and a shared commitment to solving problems are essential to a successful multifamily property management relationship. Owners should receive timely information about issues and expect property managers to provide solutions and action plans when performance does not meet expectations.
Why Is Underwriting Important for Multifamily Asset Management?
Underwriting is important for multifamily asset management because it helps investors understand the assumptions behind a deal and determine whether the property is performing as expected. A strong understanding of underwriting also helps investors evaluate expenses, monitor returns, answer questions from partners, and make informed decisions about capital improvements and operations.
How Can Multifamily Asset Management Increase Property Value?
Multifamily asset management can increase property value by improving occupancy, increasing rental income, reducing delinquency, controlling expenses, completing strategic renovations, improving operations, and strengthening property management performance. The most effective strategies focus capital and attention on improvements that generate measurable improvements in the property’s financial performance.
00:00:29:00 – 00:00:48:18
Rod
Welcome back to Multifamily Rockstars. So as you guys know, this is where we deep dive into our guests deals and we give you some practical and actionable items for getting started and and really doing your first deal or learning about how to do these deals. And, yeah, no, but especially helpful if you’re brand new to the business.
00:00:48:20 – 00:00:53:16
Rod
And I’ve got my co-host, Mark Nagy on with me as usual. Mark what’s up bud? Good to.
00:00:53:16 – 00:00:54:12
Mark
See you. Good to be here.
00:00:54:12 – 00:01:13:10
Rod
Another one for the year. Yep. Happy new year. So today we’ve got Jay and Tana Boersma on. You know I’m not going to steal too much of their thunder. But they’re in over 300 doors now as warriors and you know, they’re, they’re just a beautiful couple. So I’m excited to hear their story and dig into their, into one of their deals.
00:01:13:10 – 00:01:37:02
Rod
So welcome, guys. Thanks. Glad to be here. Awesome. So why don’t, you know, Jay, if you’d like, why don’t you tell us a little bit, of your story, as you know, as it relates to maybe a little background, high level background, and then talk about why real estate and then maybe ultimately, why multifamily? Because I think you had one property when you got into the group and then now you’re over 300.
00:01:37:02 – 00:02:02:14
Jay
So yeah. Okay. So, well let’s see. So Tana and I met each other in the late 80s at Oklahoma State University. We’re both Okies. We went to college there, and then we moved to Arizona to go to graduate school and did that, studied finance. And we ended up soon getting into the residential mortgage lending business.
00:02:02:14 – 00:02:20:14
Jay
And that interest in that was initially founded by having an interest in real estate, but not having any money. So I didn’t, as a 25 year old, didn’t think I could do anything in real estate. And but I saw residential lending as an opportunity. So I got into that and started doing that.
00:02:20:14 – 00:02:22:24
Rod
And then what year was that? What would you realize?
00:02:22:24 – 00:02:26:16
Jay
1990? The beginning of 1986?
00:02:26:18 – 00:02:27:19
Rod
Long time ago. Yeah. Okay.
00:02:27:20 – 00:02:57:23
Jay
96. So, so I did that for three years, and then, Tanya joined me. And right when we met, the, the qualifications to get our own broker’s license and start our own company, Tanya quit her job and joined me, and we started a mortgage company that quickly turned from a mortgage broker into a mortgage banker. And then we continued to do that, right up until the meltdown, which for us happened in early oh seven.
00:02:58:00 – 00:03:20:14
Jay
So we had our company was about an eight year old company that that, got caught up in that went down, started another company. So we owned a couple different mortgage companies over a 15 year period that that culminated for us ten years ago. But we’ve stayed involved in the mortgage industry as loan originators, working a W2 for a different company.
00:03:20:16 – 00:03:41:02
Jay
But the interest was always in real estate at my grandpa and my dad were both in real estate, both as developers. It was it was neither of their primary business, but they were involved as as my grandpa was a developer. And my dad has my almost my whole life has had rental property. So that’s where the interest was.
00:03:41:04 – 00:04:05:07
Jay
And as we got into the late, I think it was like 2018 and I actually started listening to your podcast broad in late 2018. Listened to it for more than a year, right around a year, and then joined the warrior community in, December of 2019, came to the LA event in January of 2020. Then, of course, Covid happened.
00:04:05:09 – 00:04:29:12
Jay
And so but also right around that time or the original thought was, hey, I’m in my late 40s, I’m a sales person. I chase realtors and builders for referral business and residential lending. I’m not sure I want to do that when I’m 60, but I definitely want to still be working. Started to have the thoughts of passive income and started to think about multifamily.
00:04:29:12 – 00:04:47:18
Jay
And a friend of mine, I said, hey, let’s get together, friend, and let’s talk about doing multifamily. He said, let’s not let’s not get together. We don’t need to. We don’t need to get together. You need to listen to this podcast. And it was your podcast, so I’ll listen to it for a year. Join the community. And then right away of course Covid happened.
00:04:47:20 – 00:05:09:15
Jay
And but also when Covid happened, mortgage rates which were already low got even lower. So we weren’t able to, implement what we were learning and be as involved in the community as we would have normally been those first couple of years, because we were still in residential lending, and those were two of our best years out of 25 years in that business.
00:05:09:15 – 00:05:26:00
Rod
Oh yeah. Oh yeah. Those interest rates are were insane. I wish they were still here. You want to hear something funny? Just as an aside, I just got to throw this in there. I don’t know if, you know, in a previous life, I had a huge mortgage company. I had 60 loss loan officers. We were mailing a half a million postcards a week.
00:05:26:00 – 00:05:41:07
Rod
We had a printing operation, a truckload. Yeah, yeah. Anyway, just as an aside, yeah, I’m sure you didn’t know that, but we could talk about another time. But yeah, that’s one of my many, seminars, one of my mini seminars. But, I had a lot of fun with it, but this is, like, a lifetime ago. Anyway.
00:05:41:09 – 00:05:42:15
Rod
Please continue.
00:05:42:17 – 00:05:51:05
Jay
Well, and so then, so we did buy, on multifamily. We bought a six plex with a partner that is also a warrior in.
00:05:51:05 – 00:05:53:19
Rod
Where where were you living and where did you buy?
00:05:53:21 – 00:06:15:01
Jay
So we were living in the Phoenix metro area in a north, eastern suburb called Fountain Hills. And we bought in a tertiary community that’s actually just removed from the the metro area down to the south. So it’s about an hour and 15 and 20 minutes away from me. It’s about 30 or 40 minutes away from my partner.
00:06:15:01 – 00:06:21:17
Jay
So we we bought that. It was a, what do we call it when we upgrade the property.
00:06:21:17 – 00:06:24:18
Rod
We upgraded value add. It was a value. And you know, you.
00:06:24:18 – 00:06:39:21
Jay
Add we do value adds. And so we had to you know, we bought the property. It was built in. This part of it was built in the 60s. Part of it was built in the 80s I think. We didn’t know going in that the city was going to require us to do major landscaping and put in a parking lot.
00:06:39:21 – 00:06:41:19
Jay
So that was that was a city.
00:06:41:23 – 00:06:43:15
Rod
The city required that. The city.
00:06:43:15 – 00:06:44:17
Jay
Required it.
00:06:44:19 – 00:06:52:09
Rod
Oh, yeah. Yeah, I can understand the parking lot. They’re they’re they’re anal about, having the parking based on the number of units, but, please. Yeah. Okay.
00:06:52:11 – 00:07:15:07
Jay
So we so we did that. We also, have had a, a short term vacation rental condo on the beach in Mexico for 23 years now. But in 2021, with this same partner, we bought another one of those. Where in Mexico, it’s called Puerto Penasco. It’s up in the Sea of Cortez, otherwise known as the Gulf of California.
00:07:15:13 – 00:07:17:20
Jay
It’s the body of water between.
00:07:17:20 – 00:07:26:23
Rod
It’s not it’s not the new Gulf of America. Yeah. Oh, no. I’m sorry. Sorry I couldn’t get to the. So that is okay. Yeah, yeah. So that was a political joke.
00:07:27:00 – 00:07:31:10
Jay
Probably going to name it the Gulf of America two the following me two got married. Yeah.
00:07:31:12 – 00:07:34:11
Rod
Sorry, sorry, I couldn’t resist. Please continue.
00:07:34:13 – 00:08:03:08
Jay
It’s the closest body of water to Phoenix. It’s 3.5 hours by driving from the airport. So it’s closer than than San Diego and closer than the LA. Wow. So? So we go there. Anyway, we bought another condo down there in 21, and then in 2022, late, probably late, 2021, we got into escrow on a seller direct deal that the seller was a friend of mine.
00:08:03:08 – 00:08:21:13
Jay
It was his parents that had owned the property. And he he was a buddy that was one of my best friends from the third grade on. And he knew that we had gotten into the multifamily business and, a couple years before I had just made a remark, I said, we want to buy Cedar Oaks. It was a joke because we were total rookies.
00:08:21:13 – 00:08:35:16
Jay
I didn’t know anything about how to even underwrite or do any of those things yet, so I just was planning that seed. Well, he took it seriously. We got into escrow. And closed on that property in March of 22.
00:08:35:18 – 00:08:38:04
Rod
And so how many units, how many units was that? One.
00:08:38:06 – 00:08:40:08
Jay
That was 72 units. And so.
00:08:40:08 – 00:08:41:22
Rod
Fantastic.
00:08:41:24 – 00:09:04:14
Jay
Yeah. So we took that, you know, I had been involved in coaching for that first year in the warrior program. And then we were a full year at more than a full year already removed from having been in coaching. But I was in good touch with my coach. And so the first thing that I did was I called my my former coach, who was in the warrior community and said, hey, help me with this deal.
00:09:04:14 – 00:09:30:01
Jay
And he said, I’d love to. And so he and another warrior came alongside me and my, my friend who he and I had joined the warrior community together. So it was it was a four warrior team myself, Greg Deal, in that we closed in March of 22 right before the rates went up. And so that was the first kind of, bigger multifamily deal that we did.
00:09:30:03 – 00:09:31:23
Rod
Congratulations. That’s beautiful.
00:09:32:00 – 00:09:33:01
Jay
Yeah, it was fun. Well, let’s.
00:09:33:01 – 00:09:47:02
Mark
Jump into the most recent one that you wanted to talk about. I believe it was, I think, well, a year and a half ago now that you guys talked about a different deal, bring us into that, that most recent deal, how you closed it, how you found it, how you put the team together. Give us the basics on that one.
00:09:47:04 – 00:09:49:15
Rod
Yeah. Where is it? How’d you find it to start there.
00:09:49:17 – 00:10:08:04
Jay
Okay, so the most recent deal, is in the same market as the last deal I just talked about. It’s a tertiary market. Stillwater, Oklahoma. It’s my hometown. I was born and raised there. My parents live there still. I got a brother and his family who live there. My sister and her family lives there. Oklahoma State is there.
00:10:08:06 – 00:10:28:12
Jay
Tana and I met at Oklahoma State, so this is in the same community. And we had actually just closed on, 96 light tech units in July. And this property, this latest deal came back to us off market in July, and we were okay.
00:10:28:12 – 00:10:32:14
Rod
Before you go on, before you go on to explain to my listeners what light tech is, please.
00:10:32:16 – 00:10:56:06
Jay
Okay. So light tech is low income tax credit housing. And what it what it means is that there is a restriction. There’s a cap on rents and there’s also a cap on income. So that was our first one of those. And the only reason I mention that mostly is just because timing was not great. And I’m setting the stage by telling the rest of the story of the deal.
00:10:56:06 – 00:11:17:04
Jay
It just closed by mentioning that timing was not ideal. We had just come out of a of a deal that we had done with a single capital source. It was a JV deal. And so that was a great, great deal. But we weren’t really ready. But we had actually been in, in best in final in June of 23 on this latest deal.
00:11:17:04 – 00:11:46:11
Jay
And it came back to us off. And the seller decided not to sell back in June of 23. So it came back. Well, our, our property manager in this market, who was also born and raised in Stillwater, Oklahoma, he, he was our property manager and his, his father actually developed this latest deal. It’s called Bricktown. So his dad developed developed the property, built it in 1972.
00:11:46:13 – 00:12:10:01
Jay
And he this this partner, Howard is super active in the market. He wanted we wanted to collaborate. So we did. So we dove into it. Knowing that we really didn’t have probably didn’t have our capital necessarily as well-organized as we should have going in. And there’s some story around that. Maybe not a full scale seminar, but, we’re still dealing with that.
00:12:10:01 – 00:12:17:12
Jay
That property closed, I think, on the 11th of December. And, we’re still raising, so.
00:12:17:14 – 00:12:44:21
Rod
Okay. And so, so let me explain that for a second. So what will happen sometimes, guys, is, is you’ll close on a deal and you haven’t raised all the money yet. It was let’s say that you’ve got a CapEx budget that you’re raising. Let’s say you’ve got operating reserves that you’re raising. You know, and maybe you’re collecting an acquisition fee that, that you don’t capitalize on or take until you’ve raised the entire, amount that you’re going after.
00:12:44:21 – 00:13:01:06
Rod
So it’s not uncommon at all to close on a deal and still be raising money for it. I in fact, I did it on my last deal in San Antonio. We raised 12 million. And a little bit of it was after closing. So it’s not uncommon. So I just wanted to explain what that meant. Okay. So so you closed on it.
00:13:01:08 – 00:13:07:13
Rod
And and this is the 124 class C construction in 1972. Is that right?
00:13:07:15 – 00:13:08:13
Jay
That’s right.
00:13:08:15 – 00:13:18:03
Rod
And so you’re and what I’m reading here is that, so talk about the CapEx budget on that and what you’re what you’re planning to do, you know, to to fix it up and add value to it.
00:13:18:09 – 00:13:44:04
Jay
So the CapEx budget was originally about $800,000, and about half of that was for and was designated for interior CapEx. We’ve subsequently we’ve gotten into the property, and the reason there was so little CapEx on the interior is the strategy of the seller had been to make some of the upgrades on an ongoing basis. So they had upgraded the property.
00:13:44:04 – 00:14:00:16
Jay
There’s some units that we wouldn’t touch that we weren’t, but we’re not planning on touching at all. And then there’s some units that are going to get, five different line items of interior renovation. So there’s it ranges from some that need everything to some that need none. So that we.
00:14:00:18 – 00:14:04:10
Rod
And give an example the five line items. Just so people are tracking you here.
00:14:04:12 – 00:14:19:16
Jay
So we’re going to do flooring. We’re going to do countertops. We’re going to re face some of the cabinetry. We’re going to do new appliances. And the last one was lighting fixtures fans. Nice.
00:14:19:18 – 00:14:21:11
Rod
Nice nice.
00:14:21:13 – 00:14:39:22
Jay
Yeah. So that was the plan. There’s been a development since we closed that changes that somewhat. So we closed a month ago, and in the first two weeks, we leased six units at post renovation and rents without renovating.
00:14:39:24 – 00:14:55:00
Rod
Without renovating. So. So what that’s called is classic units. Classic as if they haven’t worked on them yet. And and so you’re rethinking the whole renovation budget at this point. So like why spend the money if you’re getting the rents that you anticipated before? Yes.
00:14:55:02 – 00:15:10:10
Jay
Exactly. So so we’re going to test the market. We’re going to do the renovation as planned ASAP on some of the units. And see if we can add $100 a unit to our previous post renovation targets.
00:15:10:10 – 00:15:16:00
Rod
And so what is your new renovation per unit budget? Forgive me Mark, what is it per per unit.
00:15:16:02 – 00:15:29:08
Jay
So per unit it was around. Let’s see. It was around five between 4 and $5000. And some of them again will require 8000. Right. But some of them won’t require anything.
00:15:29:10 – 00:15:55:17
Rod
Okay. Well, you know, rule of thumb. You’ve probably heard me preach. This is you try to get or you try to get your renovation back in 36 months, ideally. Now you can go longer than that. So if you’re getting 100, then ideally you’d spend 30, 600, you know, 4000, something like that. Now I know you’re spending a little more than that, but it sounds to me like you’re already getting rent bumps underneath that, that, that new bump that you’re going after.
00:15:55:17 – 00:16:00:22
Rod
So it looks to me like you’re you’re in good shape. What’s the exterior work you’re doing?
00:16:00:24 – 00:16:26:02
Jay
The exterior is we’re going to do some work on the, the parking lot. So we’re planning on spending 75 to $100,000 in the parking lot. Just to, do the regular upkeep on that. And then we were also planning on, this is still we’re still kind of discussing this as a Jeep team, but it’s got the old federal specific stab lock breaker boxes.
00:16:26:04 – 00:16:36:01
Jay
And, we have raised capital or are raising capital. The initial plan was to replace all those breaker boxes.
00:16:36:03 – 00:16:54:22
Rod
Okay. So that that’s that’s always a good thing when you’ve got old ones like that. You know, one thing I want to mention to you guys and I, I don’t know if you’ve pursued this at all, but very often you can get a tow company to handle the striping and even numbering of parking spaces if you’re going to do reserved parking spaces, striping and numbering, if they get the towing contract.
00:16:55:01 – 00:17:08:02
Rod
So it’s something you may want to look into if you haven’t already. But that’s something that’s, not uncommon. We’ve done it a couple of times and, you know, save a little money, after you’ve resurfaced or lost or whatever. The parking lot.
00:17:08:04 – 00:17:11:16
Jay
Thanks for us. I, we never heard of that. That’s that’s great.
00:17:11:18 – 00:17:26:24
Mark
Okay. And I wanted to touch on one thing real quick that you mentioned that we’re actually doing on a couple assets, especially these C-Class assets, is scaling back the interior renovations with these tenants that are used to like super cheap units. A lot of the times you don’t have to put as much into the interior that you thought to get.
00:17:26:24 – 00:17:48:12
Mark
The rents were doing the exact same thing. We over renovated a lot of the units, and every single unit got leased before we even released it. And so we realized, okay, we’re probably overdoing it, scale back, and a lot of that money has actually gone to the exterior stuff and making sure the building is still working properly and less of it’s going towards the interior and sounds like that’s happening on on your asset as well.
00:17:48:12 – 00:18:03:07
Mark
And so I think that’s just a real golden nugget for people to take away, is when you’re buying C-Class assets. Think about that of not overdoing the interiors and all the other expenses that are kind of going to come along with a, you know, a 1972 that’s almost 50 years old at this point. Right?
00:18:03:07 – 00:18:16:08
Rod
So talk talk about your talk about your going in rents and, and what you’re seeing now, as far as, even on your classics, you say you’re getting your post rents, projected post renovation rents. Yeah.
00:18:16:08 – 00:18:43:11
Jay
So the the rent bump was only going to be $145 on average anyway. And so we’re already getting the targeted rent on both the ones and the and the two bedrooms. There’s some larger twos and some three bedroom units that they’re, in low demand. And so we weren’t going to do anything. There’s not much of an opportunity to raise rent on those.
00:18:43:11 – 00:18:58:16
Jay
So we weren’t going to touch those. But, yeah. So the, the going in rent was let’s see the, the target rents was 816. So what what is that six like 675 or something like that is what. Yeah.
00:18:58:18 – 00:19:12:06
Rod
That’s what you had down on your, on your notes here. So yeah. Okay. Okay. So how did you how did you finance the deal. What sort of debt did you put on it. And what is your pay again.
00:19:12:08 – 00:19:42:13
Jay
So we paid 7.8 million. Okay. A little, little bit less than $63,000 per door. We did bank financing, which we had done before. Specifically to get more leverage to create more return for limited partners. Okay. So we could finance part of the CapEx. So we, the bank said that they would do up to 80, of, acquisition plus CapEx.
00:19:42:15 – 00:19:57:19
Jay
Wow. We never we never counted on that. We were we were underwriting at 75. Okay. And then they came back at 70. So that was that wasn’t that wasn’t great. But that wasn’t that was okay. So okay, now there’s a lot of other big story around.
00:19:57:19 – 00:20:04:04
Rod
So you got seven you got 70% loan to value. Did they include the CapEx or did they not include it after they did?
00:20:04:04 – 00:20:07:21
Jay
So we got 70 years of cost plus 70 of CapEx.
00:20:07:23 – 00:20:19:12
Rod
Gotcha. Gotcha. Okay. So now you’re in the asset management phase, which is Tana’s, bailiwick. So, have you stepped in there to start asset managing already? Tana.
00:20:19:14 – 00:20:32:18
Tana
Yes, we have. We’ve had a couple of meetings and we’re really just, you know, trying to get through all of the details with the property manager to make sure that we are implementing our plan. And.
00:20:32:20 – 00:20:37:09
Rod
Do you have a third party property management company or are you doing it, in-house?
00:20:37:11 – 00:20:54:15
Tana
We do have a third party property management company, that we’ve used on other assets, and we have a really great relationship with them. So, you know, we’ve found that that is such a blessing to have a partnership in that and have a team you can trust and rely on.
00:20:54:16 – 00:21:04:06
Rod
So is the property management company coordinating the, CapEx work or do you have someone else handling that?
00:21:04:08 – 00:21:15:22
Tana
Yeah. So they will coordinate it for us. We are involved quite a bit. So once we close on an asset, we try to meet with the property management group every week. Just so.
00:21:15:22 – 00:21:16:12
Rod
You.
00:21:16:14 – 00:21:40:09
Tana
Stay on track, make sure that we’re all on the same page. We’ll loosen that up a little bit. Went to get stabilized, but, they’re coordinating it for us. So, we just have, you know, we’re we’re in the loop on everything that’s happening, but we let them take the lead. It it helps to, you know, this helps us with managing the, the work that comes with onboarding.
00:21:40:11 – 00:22:00:17
Rod
Talk about some of the metrics that you look at on a weekly basis. Just in general. You know, obviously when you’re doing the CapEx, there’s a lot of other things involved because you’re looking at, you know, which units are being done, you’re monitoring those costs. But talk about some of the other metrics that you evaluate on a weekly basis with your property management company.
00:22:00:19 – 00:22:29:18
Tana
You’re we’re of course, always looking at our vacancies. That’s, you know, the number one thing we’re talking about and making sure we’ve got a plan for filling those units. We’re looking at our delinquency percentages. It’s really important to stay on top of those, especially when you take over a new asset. So we have a whole slew of reporting that we just try to look through and make sure that we’re on track in each of our areas.
00:22:29:20 – 00:23:00:03
Mark
Well, I’d love to get your opinion because I know we again, we haven’t gotten into this too much. But rod, you always talk about, you know, you say, hey, some property managers are better than others. And maybe rod, you know, you and I can maybe chime in with our opinions as well. But Tana, in your opinion, when you’re buying an asset and then you get into the asset management with that property manager, what are some things that you look for just that lets you know as an indicator that this is going to be a good property manager versus maybe a bad one in the long run.
00:23:00:05 – 00:23:22:13
Tana
Yeah. So I think for for me specifically, it’s communication. Like we’ve got to have great communication and we have to be able to discuss issues and be able to develop a plan together about how we’re going to move down the road. We have an asset in Phoenix that we don’t have a great relationship with the property manager.
00:23:22:13 – 00:23:47:18
Tana
It’s just, you know, maybe we’re not clicking whatever the reason, but it just we’re not getting answers to questions very quickly and things like that. So I really feel like communication is the number one thing. If you can just develop a really great relationship that’s open and everybody’s willing to work together and find solutions to things that come up that are unexpected, then, you know, it sets the stage for being successful.
00:23:47:24 – 00:24:09:05
Rod
Let me bring in some other thoughts because you talked about, you know, your occupancy. Obviously, that’s a huge metric that you’re managing. But, you know, as it relates to occupancy, you know, you want to be evaluating the entire leasing process from marketing all the way through to applicant positions. And so, you know, one of the things you’ll look at is, you know, what are we doing for marketing?
00:24:09:05 – 00:24:27:09
Rod
Are we in apartments.com or are we on Zillow. Are they doing Facebook marketing. So that’s one of the things, you know, are we getting enough bodies in the doorway. How how many how many showings are happening as a result of those bodies in the doorway? How many showings are resulting in applications? How many applications are being approved?
00:24:27:12 – 00:24:46:15
Rod
How are those applications being screened? So these are all you know, and that’s an example on the leasing and marketing side. Then you’re also looking at maintenance. You know how long how many maintenance work orders do you have open. How long have they been open. So this is you know, these are some of the metrics that I just want to share with my listeners real quick.
00:24:46:15 – 00:25:10:16
Rod
And then you’re looking at delinquency. Obviously you want to see if they’ve got a delinquency number. You want to see that number go down as, as things progress. And then lastly a big one is renewals, you know, so they should be proactively looking at renewals three months in advance telling you that, you know, if how many have given notice, how many are pending, how many have actually moved, how many, you know, have have have signed renewals.
00:25:10:22 – 00:25:34:19
Rod
So those are some of the metrics that we look at. You know, on a weekly basis as well. And, you know, it’s it’s great that you’ve got a great relationship. So, you know, maybe you don’t have to be quite as on it, with this management company if they’ve really got their stuff together. But, you know, just, I just wanted to elaborate more on, on some of the things that you’re going to look at as an asset manager.
00:25:34:21 – 00:25:35:10
Rod
And I’ll go ahead.
00:25:35:10 – 00:25:51:06
Mark
And one more thing as well is accountability on all those metrics as well. Is, is what I’ve noticed is if they’re not hitting those metrics, do they come to you and just make an excuse and say, oh, it’s somebody else’s fault? Or do they come to you with a solution and say, okay, here’s what we’re going to do and here’s why.
00:25:51:12 – 00:26:07:12
Mark
And a lot of things with software and things like that can be automated, like App Folio with the maintenance, like what rod just mentioned, that the tenants can give, you know, up to five stars or whatever. And those are things we track, with our property managers and so those are all things you want to hold your property manager, accountable for.
00:26:07:18 – 00:26:23:05
Mark
Now, one thing I do want to mention, because we don’t have couples on here very often, is how did you guys operate between yourselves? Do you work kind of as a team and do similar superpowers and say, hey, we work as a team? Or do you each kind of take on different roles within your properties?
00:26:23:07 – 00:26:31:09
Rod
Great question, great question. And, and you know, how do you deal with disagreements as well. Yeah, I would, I.
00:26:31:09 – 00:26:33:19
Jay
Would rather that tend to not answer this question.
00:26:33:19 – 00:26:36:15
Rod
Let me let’s do that.
00:26:36:17 – 00:26:38:04
Mark
See where this is going.
00:26:38:06 – 00:26:39:21
Rod
I fish a lot. Yeah.
00:26:39:22 – 00:26:41:08
Jay
So antenna does a lot of.
00:26:41:08 – 00:27:06:21
Tana
Work and I go diagnose fishing and I sit at my desk, you know, I’m teasing. So we have very I mean, which is where we have such a great partnership. We’ve been married for 32 years. We’ve been working together for 25 years. So we’ve had a lot of time to, you know, work through the kinks and figure out who’s good at what and how to resolve conflict and how to take a break and all that good stuff.
00:27:06:21 – 00:27:34:04
Tana
But we are we’re very different in our skill set. I’m, you know, sit at my desk. I love to be at my desk, pushing around paperwork, answering emails, tracking things, and just great at relationship building, meeting people, looking for deals and writing. So, it’s good that we have a different skill set. And we also like the the skill set that we have.
00:27:34:04 – 00:27:40:04
Tana
So we kind of have each have half a brain, if you will, in, in the partnership.
00:27:40:04 – 00:28:00:01
Rod
So and that’s fantastic. And you know, that’s it’s not you know sometimes it’s easier said than done is to have that kind of a partnership and relationship, in where you’re working together. You know, I tried it with my ex and it’s, I forget it. It’s not going to happen. But, that’s beautiful that you were able to do that.
00:28:00:01 – 00:28:09:16
Rod
Now, have you gotten value out of the warrior program? I have these deals that you’ve done since you’ve joined. Have they been with warriors and, and so on and so forth? Yes.
00:28:09:18 – 00:28:28:18
Jay
So the first deal, as I mentioned, it was an all warrior GPS team, including my code and that and so unequivocally, yes. But what is, super fortunate for us is that now, five years in, we’re finding more value than ever.
00:28:28:20 – 00:28:30:00
Rod
No kidding. Why is that.
00:28:30:01 – 00:28:56:06
Jay
Community? And for example, on this last, this deal that just closed, you know, I’ve, I’ve probably talked to between 15 and 20 warriors that I met during that time. And so just in the last six weeks. So I’ve met as probably and spoken one on one and on zooms and etc. with warriors. In the last six weeks, as I did in the, in the five years before that almost.
00:28:56:06 – 00:29:20:04
Jay
So we, we find huge value in it. I mean, I just was on the, the Facebook page, I look at the Facebook page almost every day. There’s I think there’s 16 or 1700 people there now. It’s gone up like 2 or 300 members just in the last few months. So, and then on this deal, yes, there were warriors and a couple of warriors were involved and are involved as general partners on this last deal.
00:29:20:04 – 00:29:49:03
Rod
So fantastic. It’s fantastic. Yeah. So it’s been good. Well listen. Well thank you. So if you’re, you know, if you’re considering possibly getting some guidance and, you know, then you can get into the life you want this year rather than, you know, five years from now, ten years from now, you know, text the word crush to seven, two, three, 4 or 5 to see if the warrior program might be able to something, you know, might be able to help you get to where you want to be in life to get to accomplish what you want.
00:29:49:05 – 00:30:07:20
Rod
And, and, you know, that’s that’s how you apply. You just text the word crush to seven, two, three, 4 or 5. And we’d love to help you crush it in this business. And, you know, the program is extraordinary. And, you know, I tell my new Warriors, the most successful warriors that I have are the ones that are the most connected in the community.
00:30:07:20 – 00:30:28:03
Rod
And, you know, once we discovered that about four years ago, even, you know, after you joined, we started doing all sorts of things to facilitate those connections. So, you know, we have our warrior only events. We have, you know, every other week we do speed dating, where you can meet warriors and zoom breakout rooms after our Q&A calls and, and, I’m making a lot of big improvements to the program we’re at.
00:30:28:05 – 00:30:43:04
Rod
Mark and I were talking about before we let you guys in, on this call, you know, we’re we’re we’re going to make some more improvements. You’re going to see some really cool stuff coming down the pike. So I’m very excited about what’s happening there. So again, if you’re interested, text crush to seven, two, three, 4 or 5.
00:30:43:06 – 00:30:45:19
Rod
And, we’d love to chat with you.
00:30:45:21 – 00:31:04:04
Mark
Well, one thing I if we could tease on that real quick. Right? I know we were talking about, you know, a weekly thing that we might do is specifically working with underwriting. And I know that, like, if someone were to ask me, what’s the number one thing you should learn in this, that would probably, that would probably be the one thing I’d say, because it applies to everything, every single role in the business.
00:31:04:06 – 00:31:19:24
Mark
Now, Jay. Yeah, I know you guys wrote this on your goals. Here’s what’s the deep dive. And if we could leave the listeners with maybe a practical thing. What did you mean by that? Why did you say underwrite it? And how do you think underwriting learning that applies to, I guess really everything else in the business?
00:31:20:01 – 00:31:40:24
Jay
Well, it’s the foundation of everything. You can’t really fulfill any of the roles in that. There might be on a general partnership team or make any assessment about the property, unless you have some basic, at least basic knowledge of underwriting. So yeah. Yeah, you have to you have to start there.
00:31:41:01 – 00:31:54:08
Mark
Okay, I probably agree. And again, I think it goes to everything. If you’re going to be money raising, you’re going to get questions from people that are going to say, okay, well what does this mean? Right. And you’re going to have to understand that if you’re going to be asset managing, you’re going to need to understand the expenses where all those things come from.
00:31:54:08 – 00:31:58:24
Mark
So I really think it just applies to everything. I think it sounds like you guys would agree there.
00:31:59:01 – 00:31:59:16
Jay
Definitely.
00:31:59:16 – 00:32:04:24
Rod
Yeah. Are you are you guys okay with if listeners have a question, if they reach out to you.
00:32:05:01 – 00:32:06:06
Jay
That’d be great.
00:32:06:08 – 00:32:29:18
Rod
Okay. Yeah I’ll give you a website. It’s, resources.us. Fantastic. Well, listen, guys, I really appreciate you coming on the show. You’ve added some tremendous value. We’ve gotten into some areas that we don’t always get into. So I think the level of detail was really good this time. And and I know this was your first interview, so, you knocked it out of the park, guys, honestly.
00:32:29:18 – 00:32:45:23
Rod
So thank you for coming on. And, you know, we really appreciate you being here. And, look forward to seeing seeing you back on in about a year or so to see where you’re at at that point. Thank you I be great. Thanks, guys. All right. Take care guys. Thanks. All right. Appreciate it. So one other quick thing.
00:32:46:02 – 00:33:04:11
Rod
We encounter so many people that are frankly frustrated. You know they’re looking in the mirror and they’re frustrated that they hadn’t been able to escape the rat race. They haven’t been able to build cash flow to the point where they’re able to have financial and time freedom with their families, you know, and maybe they see other people buying real estate and creating, you know, incredible cash flow.
00:33:04:11 – 00:33:27:05
Rod
And they think, well, it’s just scary. You know, buying apartments is intimidating. And I get it. See, that’s why we created our warrior mentorship program. There are coaching students and they’ve had extraordinary results. My students I’ve been teaching about five years and upwards of 140,000 units. Now that we know of. Right. And we feel like it’s just getting going now, we’re looking to grow this group and really take it to the next level.
00:33:27:10 – 00:33:51:09
Rod
And honestly believe that the greatest transfer of wealth could be upon us right now with this current economic environment. Everything’s going on sale. So we’re looking for people who want to follow a proven framework, really like a blueprint or a map, literally step by step. And then they’re able to leverage our systems and our incredible network to raise money in equity, to find deals and close those deals and build partnerships really nationwide.
00:33:51:09 – 00:34:12:16
Rod
So if you’re interested in finding out more about how you can become more in our incredible network and take advantage of the unbelievable opportunities that are upon us, you can apply to my Warrior Mentorship program by texting the word crush to 72345. Or you can go to mentor with rod.com. And what we’ll do is we’ll set up a call so you can check us out, and we can check you out and see if it’s a fit.
00:34:12:18 – 00:34:20:00
Rod
Now again you can go to mentor with rod.com or text the word crush to 72345 to apply and we will speak.
