“They might start pocketing rent or security deposits—we even had an instance where the owner was taking the appliances out of the units and selling them on the side,” says Laramar CEO Dave Woodward. “Even if they are good guys who got themselves into a bad deal, clearly the focus on the management side goes away for the most part, and unfortunately multifamily fundamentals can deteriorate quickly.”
With distressed real estate, Laramar stresses safety first. “When you come on board, you’ve got deferred maintenance, vacancy, and staff and resident satisfaction issues,” Woodward says. “The absolute No. 1 priority is life safety: Make sure lights and alarms are working, and smoke detectors and fire extinguishers are all in place. Then you can start addressing resident issues and potential capital expenditures.”
Lastly, reaching out to residents will always make an impact on community morale. The “Under New Management” banner may seem cliché, but letting tenants know that positive change has occurred is critical to smoothing new management transitions.
“The day of the takeover, issue a letter introducing the company and the new property manager and list where to send your rent check and numbers to call for service requests and for the leasing office,” Clare says. “Within the first 30 days, you need to be more present than ever in the leasing office and on site. Be visible and quite often residents will take the initiative and come to you first. If not, host an event and serve food. You’d be surprised how quickly you get to know your new neighbors.”
