How We Are Improving a Property to Increase Rents

We have identified grossly underpaying tenants, not that they're bad tenants but we've identified them to potentially have procedures to bring them closer to market. We have also identified month-to-month leases and upcoming leases that we are targeting to bring to market so those units come due, we're turning them pretty quickly and in conjunction with that, we just finalized our construction budget.

We have a 60-day plan to get the first phase of all of our construction items through our CAPEX or capital expenditures done within the next 45 to 60 days. Some of those items include water savings initiatives

which will involve replacing the toilets to bring the waters bills down by 25% along with some other items to enhance the efficiency initiatives and additional water initiatives as well. One of the most important points that we took care of day one we said to the property staff “Let's go out there and make sure that we are fixing all the deferred maintenance for all the tenants out there who had open tickets for items that the old seller had neglected”, We probably had a good 20 of them that were open tickets on some minor and some a little more major.

We want to make the tenants know that we're here, we want to make this property better for them so when they see us increasing the rents that we're giving them a reason why because we're trying to m

ake this a better place to live. Another thing we're doing is we negotiating for a cable contract, there are a couple of different options to do this in bulk or non-bulk. A bulk contract means that you're going to have a cable company taking the property and then they would be less direct with the cable and we would be responsible for getting reimbursements from the tenants. we are seeking based on the class of property. We would have the one cable company and their cable for the entire building but the tenants would pay directly if they want. For this, we also would get a share of the revenue from the cable company with whichever option we chose and a per door with royalty for signing up for this exclusive right to the cable company. We're still in negotiation for that but it’s one of the main things that we're really targeting just to add some value to the property.

One of the additional items that were targeting that is unique to this property is a storage component. That should give us an additional revenue stream with pretty good sized storage areas or just open areas in the basement. What we're doing right now is building out 10 storage units that's like a pilot program to see if we can get those quickly rented out somewhere in the range of 35 to $40 a month in addition to the rents per month and then once we get those first 10 we probably have room for 40 total storage spaces.

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