What Happens After Taking Over The Property

When we moved into our recently acquired deal, we had around 85% occupancy. There are two properties, one had 80% occupancy and another was at 88% and now it's kind of flip-flopped and one's short of 83% and the others at 90%, being the smaller properties at 90%, we've settled out at about 85%. We attribute a lot of that flip-flopping and fluctuations due to poor previous property management, that was another thing we noted, we always knew that it was the mid-eighties occupied and in the submarket that it's a well occupied, mid-nineties in the market. Our question was, why is this one underperforming? When we took the property one of the occasions, there was not one unit ready and available, I think at that stage there were at least 20 units that knocked down, 20 units not ready, we said to the two managers, if we arrived today and needed to lease an apartment, do you have one for us? And they confidently said, no. 

This owner had a master lease with an oil company and so he had this place full for a couple of years and with a large oil company, he didn't have to work hard, he just received one big check. They put all their employees there and I don't think he ever really pulled everybody out of there, I just don't think he was really motivated, he was doing storage units and other things. After that fact, he wasn't putting money into it, he wasn't really managing it well, it didn't seem to be getting a lot of his attention after that, so every property has a story that's kind of the story behind this property.

It's just interesting that the owner had a pretty good run for a while and then I lost that major contract and never really seem to bring it back after that. There was a manager at each location and maintenance people, they were one of the days we asked about the vacant units not being ready. They had five people doing yard work and no one working on make-readies, but you can understand five maintenance people if you have 20 units and they were all being worked on, but to be out in the yard, like playing around in the grass, blowing leaves, payroll was quite high as well, which we saw an opportunity there too.

The unit mix predominantly was a one-bedrooms, we're at about 45% one-bedrooms, which is quite high, but the location really lends itself to working professionals. Although the property is not working professional property, that is where we are going to be taking it. So predominantly a one-bedrooms and two beds and two-bedroom townhomes and then I think there's about 9% three bedrooms. We're at a price point of around $800 for a one-bedroom, two beds are at around $900, and the three beds are going to be pushing to probably $1050. So those are what you're hoping to get it too. We going to start off with all included offers and then see if the opportunity presents to implement R.U.B.S within that market, we implementing valet trash as well, adding a cable tv, we're going to be implementing a smart laundry system, where residents will be able to check from their smartphone how much longer is on their cycle, so they don't have to go down and check when their laundry is available, they'll be able to pay from their smartphones. We're really excited about attracting younger and more professional demographic, other than that we're going to be implementing, complete exterior rehab, refacing the property, horizontal rails and putting cool deck on, building outdoor lounge areas, outdoor lounge furniture, large pergola with grilling stations outside, implementing, pet parks at both locations. And one of both of the other properties faces the interstate, we're going to have it repainted. So it'll be really visible, bright, vivid, something that's easy to see from the highway and hopefully, we'll bring in some traffic as well.

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