1 Unit, 1 Week, 10 Applications: How to Fill Vacant Units While Practicing Social Distancing

1 Unit, 1 Week, 10 Applications: How to Fill Vacant Units While Practicing Social Distancing

4 min read
Matt Faircloth

Matt Faircloth, co-founder and president of the DeRosa Group, is a seasoned real estate investor. The DeRosa Group, based in historic Trenton, N.J., is a developer and owner of commercial and residential property with a mission to “transform lives through real estate.” DeRosa creates partnerships to finance select real estate investments and has a proven track record of providing safe, profitable investment opportunities to their clients.

Experience
Matt, along with his wife Liz, started investing in real estate in 2004 with the purchase of a duplex outside of Philadelphia with a $30,000 private loan. They founded DeRosa Group in 2005 and have since grown the company to hundreds of units in residential and commercial assets throughout the East Coast. Under Matt’s leadership, DeRosa has completed tens of millions in real estate transactions involving private capital, including fix and flips, single family home rentals, mixed-use buildings, apartment buildings, and office buildings.

Matt is an active contributor to the BiggerPockets Blog and has been featured on the BiggerPockets Podcast three times (show #88, #203, and #289). He also regularly contributes to BiggerPockets’ Facebook Live sessions and teaches free educational webinars for the BiggerPockets Community.

Matt authored the Amazon Best Seller Raising Private Capital: Building Your Real Estate Empire Using Other People’s Money. The book is a comprehensive roadmap for investors looking to inject more private capital into their real estate investing business and is a must-read for anyone looking to grow their business by using private lenders and equity investors. Kirkus, the No. 1 trade review publication for books, had this to say about Raising Private Capital: “In this impressively accessible introduction to a complex subject, Faircloth covers every aspect of private funding, presuming little knowledge on the part of the reader.”

Matt and his wife Liz live in New Hope, Penn., with their two children.

Education
Matt earned a B.S. in Industrial and Systems Engineering with a minor in Business from Virginia Tech. (Go, Hokies!)

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Residential housing owners have likely had many questions during the COVID-19 outbreak—questions about everything from rent collection to tenant and staff safety are at the top of everyone’s minds. Beyond that, many of us have vacancies that need to be filled, and there are people out there who need to move to a new living space.

So, that leads us to the topic today: How do we lease an apartment while abiding by the rules that govern social distancing?

Renting Out Property While Practicing Social Distancing

Three months ago, this was not a question. Today, if you invest in rentals, you need to know the answer to this question—or you will find yourself overwhelmed with empty apartments and no way to fill or show them.

We are mid-renovation on several apartment complexes and have plenty of newly refurbished units ready for new tenants. We wanted to take a shot at getting these rented, so I did some research.

I spoke to owners and property managers who didn’t want to change their systems or take the risk of exposure, so they decided to hold off on leasing for now. We also spoke to others utilizing online and hands-off methods (some that we had already been doing) and came up with a system to lease apartments while fully abiding by social distancing protocols.

(Note: This is all well and good while we are working to avoid the spread of COVID-19. But this method can easily be continued post-pandemic in order to optimize the time of our leasing staff.)

Related: How to Rent Your Property to the Right Tenants—Fast

Hands-Off System for Leasing Apartments

We decided to first try the method out at our property in North Carolina called Douglas Square. You may remember it as the property that was featured in the BiggerPockets YouTube mini-series “Fair and Square.” We ended up generating over 10 rental applications in the first week while having zero human contact. (In contrast, the week before implementation, we received three applications.)

My hands-off method revolves around automation and online tools, which when combined in the right order, create a powerful streamlined leasing system. The process involves six steps that I will outline here (and you can learn more by watching the video below).

Step 1: Online Marketing

Create a strong online marketing campaign through various channels, such as Instagram, Facebook Marketplace, Zillow, Trulia, and Apartments.com. The online campaign should have a good writeup and pictures. It should also include a video walkthrough, highlighting the strengths of the apartment like recent renovations and amenities.

We also did regular Facebook Live posts, giving a tour of the units. The video should end with a call to action.

To see some examples of the tours and videos we created, here is the complex’s Facebook page.

Step 2: Automated Showing Box

Put an automated showing box (an automated lockbox) on the door of the vacant apartment. Two popular options are ShowMojo and Rently, but there are plenty of others out there. Once you install the box, you direct your interested traffic from Step 1 to the showing box company directly.

The showing box company will ask the questions you have provided them (i.e., Do you have any pets? When do you need to move? Etc.). They also collect a copy of the prospective tenant’s driver’s license and a credit card as collateral.

The prospect tells the showing box company when they want to view the unit, and they are given a code that opens the box for a short period of time. They can then go to the unit, open the door, and take a self-guided tour. The showing box provider then follows up with the potential tenant after the showing to gauge their interest level.

Step 3: Online Application

The interested, qualified tenant can then use an online application such as Appfolio, Buildium, Cozy, etc. to submit their application. This step should include a background and credit check, as well.

tenant filling out rental application

Step 4: Lease Signing

After all the boxes are checked, the tenant can sign their lease via digital signature, which is now recognized as a legally binding signing method—no wet signature required.

Related: Landlord Emergency Preparedness 101: What Real Estate Investors Should Do Before Disaster Strikes

Step 5: Online Payment

The security deposit and first month’s rent can even be paid hands-off via ACH. All companies mentioned in Step 3 provide ACH services. If the prospect is not set up or not comfortable with online payments, the companies mentioned have relationships with major retailers like 7-Eleven to pay their rent at a brick and mortar location for a minor fee.

Step 6: Moving In

You can then give the prospect another code to the showing box to open the door and move themselves in. Once they are settled, have a maintenance tech go out and move the box to your next vacancy, and off you go!

Now, I know that every situation, tenant, and property is different, so the steps I listed above may need to be tweaked or compromises made to accommodate certain circumstances. That’s all OK, because I believe that this system works for most properties.

In fact, we are now using it across the four states we are invested in on all our properties with similar success.

In addition, once we are beyond the coronavirus, I will continue to use this method, as it creates operational efficiencies for our staff. Instead of having to go out and do showings several times a week, our leasing agent can focus on creating more great content for our media outlets and other proactive activities to help take our properties to the next level.

Hopefully, these steps can help make your rental portfolio more efficient and help others stay safe during these times.

Thanks for reading and watching the video, and have a great and profitable week!

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What hands-off methods are you using? Are you inspired by our process, or do you think it’s flawed?

Don’t worry you won’t hurt my feelings—share your thoughts below!

Residential housing owners are scrambling amid the COVID-19 outbreak—questions about everything from rent collection to tenant and staff safety abound. But people continue to need housing, and rental vacancies need to be filled. So, how do we lease an apartment while abiding by the rules that govern social distancing?