One of the biggest mistakes we see investors make is cutting corners during the due diligence process. While apartment buildings can be lucrative, failure to perform thorough due diligence can cripple an otherwise promising investment.
All of these reports can certainly add up. A few thousand dollars here, a few thousand dollars there. Costs will vary depending on the size, location and condition of the property as well as who ordered the reports, the scope of the reports and so on. In general, we suggest budgeting at least $20,000 for the due diligence process, which can usually be rolled into and paid as part of your closing costs.The upfront investment may seem steep, but trust us – you don’t want to gloss over the due diligence process. You could end up with major unplanned expenses otherwise.
Amazon Alexa, Google Home and other smart home devices have grown in popularity over the past few years, especially among homeowners. Smart home devices allow users to digitally control a variety of functions inside their homes⏤such as climate and security⏤using a smartphone. While homeowners have been quick to use this technology, rental property owners have been slower to adopt it.But MYND recommends that property managers move fast when it comes to installing one type of smart home device⏤smart locks⏤to improve resident safety and provide real estate owners with increased revenue.
Smart locks are digital devices that give residents keyless access to their units via a smartphone. You simply need a digital access code that’s delivered directly to your device to enter a unit.When deployed correctly, smart locks provide:
Smart locks enable self-showings, giving tenants more control over the sometimes competitive process of signing a lease. Traditionally, a prospective resident spends significant time trying to schedule a showing. They have to work around the property manager’s schedule, which could cause delays.Booking an appointment is easy. The prospect simply signs up, provides a copy of their ID and credit card for verification, and selects when they’d like to view the unit.Before the showing, the prospect receives a unique access code to tour the property during a specific window of time. The code remains valid only during the allotted time frame. Prospects don’t have to worry about a property manager showing up late to the appointment or hovering over their shoulder while they tour the unit.
Smart locks are more secure than traditional keyed-entry systems. At MYND, we only use self-showings at vacant properties, so a resident's personal belongings are never at risk. Smart locks provide an audit trail: Property managers maintain an activity log of anyone who enters or exits the unit with their unique access code. As an added security measure, the prospect’s credit card information is kept on file.Traditional locks provide no record of who entered the unit, when they entered it, or if they entered the unit at all.
We’ve all been in this situation before: You run out to the car for a minute and realize you’ve locked your keys inside the house. That’s why smart locks are such a valuable amenity: They eliminate the need for traditional keys, which can be forgotten, misplaced, or stolen. Unnecessary calls to a locksmith are also eliminated. Residents simply need to use their smartphone to unlock their unit.Visitors also gain keyless entry, with the blessing of the resident. Smart locks allow residents to share unique access codes with visitors of their choosing. They can issue a one-time access code to friends, relatives, the dog walker or any other guest. The property manager can also generate access codes for third-party vendors to access the unit, thereby facilitating faster, more efficient repairs and maintenance.
Smart locks keep tenants safe, and provide owners with access to additional revenue. On average, MYND property owners collect $120 a year more in rent for each unit with a smart lock compared to one without. In addition, smart locks tend to attract more tech-savvy and financially secure tenants.Units with smart locks also lease up faster. On average, smart locks trim three to seven days of vacancy from a lease. If the average apartment rents for $1,500 per month, a seven-day reduction in vacancy can save owners $140 with each turnover. The average property owner recoups their investment in smart locks within seven months of installing them.
Smart locks simplify rental-home living, ownership and property management. They give residents and managers the ability to utilize self-showings, keep residents safe and facilitate faster repairs, all while saving owners money.Are you a property owner interested in learning more about how to make your investment more efficient and productive? Contact Kyle Cortopassi at email@example.com or () 805-1176.
Matt , host of Leading Voices in Real Estate, sat down with Colin , CTO and co-founder of MYND Property Management in early December. Colin discussed his tech background, the “small residential” real estate industry and how Mynd got its start in Oakland, CA.
To listen to the entire podcast, download Leading Voices in Real Estate.
Question : Talk to us about the rental business.
Answer : MYND is a full stack, tech-enabled property management company focused on the small residential industry, which includes single-family rentals and multifamily buildings with up to 49 units. It’s a $430 billion industry, and rent rolls are twice as big as the hotel industry. Yet, it’s highly fragmented. There are over 30,000 companies that provide property management services, and the largest one has one-seventh of 1% market share. But nobody’s operating at scale, and nobody’s really applying technology.
Q: How did you get here? One of headlines is you’re a technologist.
A: I went to Cal, where I studied mechanical engineering. I got a dream job at Boeing writing algorithms for automated control systems on airplanes. It was Nirvana for me. At Boeing, I invented a new way to control anti-lock brakes for airplanes. I worked in AI and created patents for this technology that Boeing still holds to this day.
Q: What was your next move?
A: I always wanted to be an entrepreneur, so I became an independent software consultant. In 1996, I spent a year at Netscape, where I became one of the first Java programmers in the world. Eventually, I started a software consulting company that grew to 35 people. I got to experience the dot.com boom firsthand. Luckily, I sold that consulting company when things started to unwind in 2000.
Q: So, you had some money saved, and you put into real estate?
A: With a friend of mine, I invested in a mobile home park and storage facility. It was highly reliable income because residents never seem to leave mobile home parks. I am always looking for inefficiencies in a marketplace, and what the masses are getting wrong. If an idea is counter what most people think, all the better because that’s where the opportunity lies.
Q: Why did you decide to co-found Waypoint Homes?
A: In 2008, I was looking at what was happening in certain San Francisco Bay Area communities in the East Bay like Antioch and Vallejo. Homes in that region had lost 70% of their value from the peak. But rents weren’t off at all, or maybe down slightly. Along with Waypoint Homes co-founder, Doug Brien, who is the co-founder and CEO of MYND, we ended up buying 25 homes in Vallejo, Antioch and Pittsburg. We were buying houses for under $100,000, with cap rates between 8% and 9%.
Q:How do you work with MYND co-founder Doug Brien?
A: Doug is more of an operationally minded person than me. He ran all of the property management operations at Waypoint. I realized there was a much bigger opportunity at play: to own the entire property management space for small residential. And I was excited to launch another company with Doug. The opportunity to start MYND was so compelling that we had an easy decision.
Q: When you’re with the right people and you take a concept and iterate it over a period of time, it’s an amazing experience. Describe your even bigger opportunity.
A: When we were at Waypoint and had 17,000 homes under management, over 500 employees and a robust tech platform. We kind of nailed it with our technology. But we felt we could have managed a lot more properties. The small residential sector...is an old-school industry with lots of mom-and-pop third-party managers. Most people self-manage, and they’re not leveraging technology like we were at Waypoint. If you look back at the industries in America, at some point, they became larger, institutionally managed industries. For example, before the 1950s, there were thousands of convenience stores nationwide. Then 7-Eleven started in the 50s. They found they could more efficiently control the supply chain and distribution of goods. They were able to benefit from the economies of scale. Similarly, taxis were disrupted by Uber and Lyft. Technology eventually disrupted all of these industries.
Q: Tell us how MYND was built.
A: MYND provides complete end-to-end property management service. We are competing with incumbents that are disrupting the real estate industry. Small residential is one of the largest industries in America, which hasn’t been disrupted by technology yet. But there is no reason it shouldn’t be now. Everyone has access to technology: cloud computing, mobile tech and SMS. There are much better ways to manage properties using technology.
The San Francisco Bay Area rental market is unlike any other in the country. Unprecedented growth of tech companies has fueled the local rental market over the past few years, placing upward pressure on rents and downward pressure on vacancies.
What trends will shape the San Francisco Bay Bay Area rental market in 2019? Here are four major trends we’ll be watching in the San Francisco Bay Area rental market to boost your property's performance and make 2019 a great year!
It’s no secret that the Bay Area has some of the highest residential rents in the United States. While rents in other regions have begun to plateau, San Francisco Bay Area rents keep climbing, with some areas increasing as much as 10% last quarter. The city of San Francisco beat out New York, Miami, and Los Angeles as the most expensive city in the nation with one-bedroom rentals averaging a high of $3,570, according to Zumper’s annual analysis. As 2019 approaches, we will continue to watch this trend so Bay Area property owners can price their units at market rate.
According to Forbes, rental demand is slowing in most areas of the United States. However, this is not true in many western metro areas, including the San Francisco Bay Area. As tech companies ramp up their hiring efforts, demand outweighs supply. Zillow recently gave the area a 10 of 10 for market health. Even in the face of ongoing NIMBYism and regional resistance to new housing development, demand should remain strong next year.
Prior to November, it was unclear whether tougher rent-control measures would be passed by voters across California. But voters ultimately turned down Prop 10, maintaining the Costa Hawkins Act, which gives property owners the right to keep rents for all units constructed after 1979 at market levels. This is great news for owners, investors and developers in the San Francisco Bay Area. Property managers as a whole will save money and resources related to training staff members on management techniques for rent-controlled properties. Since many had projected Prop 10 would pass, we are now paying attention to how its denial will shape the market in coming years.
Public transportation remains a hot trend in the San Francisco Bay area. According to the San Francisco Municipal Transportation Agency (), 62% of local residents did not use public transportation in 2013. The agency had projected that by 2018, 50% of local residents would drive privately and 50% would utilize public transit systems. By 2015, 52% of Bay Area residents started using public transportation somewhat regularly, and that number continues to grow. San Francisco residents use public transportation, including commuter systems like Muni, more frequently than residents of any other metro areas besides New York, according to the SFMTA. As more tech industry workers and others continue to move to the area and traffic worsens, residents will likely turn to public transportation as a commuting option. Rental properties near transportation will drive new development and urban reuse projects in the local market, making this a trend we will keep watching in 2019.
San Francisco real estate investors, owners and managers should keep an eye on these four trends as 2019 approaches. If you have any questions, or to find out how MYND can help you maximize your San Francisco Bay Area property's net operating income, contact us today.Maximize Your NOI
Before selecting a property manager for your rental, there are many factors to consider. First and foremost, you’ll want to hire a property manager that’s committed to providing exceptional customer service to you and your tenants. This article will show you how to do just that. So how do you get started evaluating the level of customer service a property manager can deliver? The simple answer is: Do your due diligence.
“Doing your due diligence when selecting a property manager is just as important as doing your due diligence when selecting a rental property to acquire,” says Doug Brien, CEO and co-founder of MYND Property Management. Doug is also a seasoned real estate investor, and former founder of REIT Waypoint Homes. Under his direction, Waypoint amassed a portfolio of over 17,000 homes valued at $3 billion. This article will outline the three most important steps to take when selecting a qualified property management firm. Here they are:
Here's your how-to guide when it comes to assessing the level of service a property manager provides.
What is one of the best ways to measure customer service? Request two metrics: a company’s Customer Satisfaction () Score and its Net Promoter Score (). The Score gives you insight into the level of service a firm provides over time. A good property manager will send a survey after a resident has completed the on-boarding process to see how efficient it is, and if any improvements are necessary. If a property manager does not have their own internal service tracking and reporting, they are likely not committed to identifying issues and constantly improving their service.
provides similar insight, but it also measures the willingness of a customer to recommend a company’s product or service. In other words, shows how likely your clients are to recommend your service to another person. And over the course of time, MYND's increased to approximately 19, compared to the property management industry average of 7.Here’s how MYND's Net Promoter Score compares to the property management industry as a whole:
Online reviews for a service-intensive industry like property management tend to be highly subjective, and polarizing. Certain industries will often skew towards either the negative or positive side. In the property management sector, residents often use third-party review sites to post public complaints as a means to negotiate with an owner. As a result, these reviews often skew to the negative side. In addition, residents comprise majority of the reviewers using third-party sites. However, these experiences and reviews do not reflect the overall experience of a property owner.
It’s also very important to note that each third-party review site uses a different set of metrics, and their algorithms change constantly. For example, Yelp recently changed their algorithm to remove any reviews from users who have been inactive on their site. Even though some of those reviews were submitted by real customers with valid opinions, they may not “count." Therefore, they may not be prominently displayed on their website, or they may "fall off" their website entirely. With an ever-changing algorithm, metrics are not tracked consistently. Therefore, these reviews don’t provide an accurate assessment of a company’s service over time. Online third-party reviews only tell part of the story when it comes to customer satisfaction. Due to this fact, they should always be cautiously factored into your decision to hire a property manager.
Tap into your network of property owner friends, acquaintances and associates to get an insider’s opinion. An honest referral from another owner who has worked with the management team you are assessing is critical. Place a call to an associate in the real estate industry who owns similarly sized portfolios of rentals to get their recommendation. You can ask them to provide specific details about the property manager’s level of service, their responsiveness to tenants and the quality of repairs and maintenance they provide.
“There are many customer service-related metrics to assess when evaluating a property manager that’s right for you,” concludes Brien. "You can't improve what you don't measure. So, make sure your property management company has effective measurement tools in place."
The development of new rental units skyrocketed in Oakland in 2018 as more businesses, especially tech companies, flocked to the East Bay from San Francisco. This mass exodus has placed upward pressure on regional rents over the past two to three years, thus justifying the construction of new, ground-up multifamily properties. More than 11,000 units were under construction at the end of 2018 in Oakland, which is more than the number of units planned for San Francisco or San Jose. View a list of some of the most notable projects currently rising in Oakland, courtesy of Oakland Magazine.
More than 45% of the new apartment supply – or 5,000 units – is coming online in Downtown Oakland. While primarily aimed at wealthy renters, this new inventory is a welcomed addition. It's welcome because booming demand has led to strong rent growth and a lack of desirable options for renters.
As Oakland property owners know, new units have been leased up quickly throughout 2018. Vacancy remains at the historically low, despite this recent addition to supply. Yet, as multifamily development continues to increase and cranes keep filling the skyline, market analysts expect vacancies to rise moderately through 2020. However, vacancy for 4- to 5-star properties could peak at a high of 16% in 2020 as a possible economic downturn looms in the region. As a result, vacancies for 3-star buildings are expected to remain relatively stable through next year, according to CoStar. Therefore, Oakland property owners may have an easier time leasing up mid-tier properties, which are always in demand during every economic cycle.
Over the past several years, traffic congestion has plagued the entire Bay Area, clogging up major freeways and thoroughfares from Livermore to San Rafael and then down to San Jose. As a result, developers are building rentals within walking distance of BART stations and other public transit. Savvy investors may want to target these infill locations for long-term investment opportunities.
How has this onslaught of new construction impacted the Oakland/East Bay rental housing market as we approach the second month of 2019? Our latest State of the MYND East Bay/Oakland report takes a look. The report also contains a wealth of real estate trends to watch in the East Bay, including:
If you own Oakland rental property, or plan to invest in 2019, this resource is a must-read.
OAKLAND, Calif. - Mynd Property Management, a customer-first, tech-enabled property management firm, has acquired Jevons Property Management, a property management company located in the Seattle area.With the transaction, Mynd launches in Washington State with more than 800 units of multifamily and single-family rentals. The Jevons team adds valuable local property management experts and technicians who will continue to provide great service in the Washington market to MYND’s staff.“We’re pleased to bring Mynd’s best-in-class service to the Washington market in partnership with the Jevons team,” says Doug Brien, CEO and Co-Founder of Mynd Property Management. “Mynd looks to partner with property management firms whose core values align directly with ours, and Enrique was a perfect fit. Jevons is committed to providing residents and owners in Seattle and Washington State with excellent customer service and that aligns well with our approach. ”Moving forward, Jevons Property Management will be known as Mynd Property Management. Residents, property owners and real estate investors who are interested in property management can expect the same high-quality customer service and responsiveness they did in working with Jevons.Enrique Jevons will remain in charge of the Seattle office as its Regional Director. A seasoned real estate investor with more than 20 years of experience, Jevons has worked in various hospitality management positions for Hyatt Hotels, Stanford University and the Marriott. In addition, he personally owns 71 rental housing units.“My goal is to continue to provide optimal service to the property owners and residents of Seattle, the Puget Sound, Yakima and everyone in Washington State,” Jevons says.For more information, visit MYND’s Seattle property management page.mynd.coMynd Property Management is a customer-first, tech-enabled property management firm based in Oakland, Calif. Mynd focuses on the small residential sector, or multifamily and single-family rentals with fewer than 50 units. The company’s team of on-the-ground experts provide a combination of excellent service and efficient technology to boost net operating income () for property owners, while improving the rental living experience for residents. With management capabilities throughout California and Washington State, Mynd has aggressive plans to expand nationwide in 2019.
Since emerging from the Great Recession nearly a decade ago, the San Francisco economy and rental housing market have been among the nation’s strongest. The region’s bustling tech sector and still-strong finance and banking sector have bolstered record-level employment and household growth. In spite of this expansion, job growth started to moderate four years ago, partly due to a lack of qualified workers for certain highly skilled positions in San Francisco, San Mateo and Santa Clara counties.
In spite of recent volatility among some companies in the tech industry, such as Facebook and Apple, the tech sector continues to perform well overall. Google shares have steadily risen over the years, and the company has benefited from a spike in Internet advertising revenue, which rose by 21% in 2017 to $88 billion. Salesforce continues to expand, now employing 8,000 people in San Francisco. The company’s breakneck hiring pace in 2017 will likely put it ahead of Wells Fargo as San Francisco’s leading employer. Uber has also hired aggressively, increasing its local headcount to 5,000 in January 2018. Other tech companies that have been growing rapidly include Lyft, Dropbox, Affirm and AirBnB.
Although Wells Fargo and Charles Schwab have had some recent setbacks in years, companies in the financial services sector have overall steadily recovered from the subprime mortgage crisis 10 years ago. According to CoStar, the sector stands at 102% of its pre-recession peak.Altogether, total non-farm employment in San Francisco has risen to 125% of its pre-recession peak, with office-using employment growing to 133% of its pre-recession peak as of the third quarter of 2018. Employment in high- tech jobs has more than doubled in the expansion period lifting the entire economy, though the pace of job growth in tech has also slowed.
San Francisco’s construction boom continues to mature. Since the Great Recession ended a decade ago, more than 100 high- and mid-rise rental properties containing some 17,000 units have been delivered. Most of these properties contain more than 100 units each. Since the beginning of 2015 alone, 10,000 units came to market, and another roughly 7,000 units are currently under construction. The new inventory has been well received: Most properties lease-up within a year of completion. However, a number of property owners offered tenant concessions to boost occupancy.Which neighborhoods are seeing the highest levels of construction? Download the State of MYND San Francisco report to find out.
Long-term rental property investing is an excellent way to diversify your investment portfolio, and protect it from stock market volatility. And one of the best places in California to invest with a long-term-hold mindset is San Diego, where rents are among the highest in the country and demand is strong. But what if you don’t live in this picturesque California rental market, with one of the most temperate climates in the world?
How can out-of-state investors protect their assets while living out of state? The short answer is: Hire a tech-enabled property management firm with local expertise.
Out-of-state investors are drawn to buying properties for either immediate yield or long-term appreciation. San Diego is a great market for long-term appreciation. According to Zillow, Q4 2018 year-over-year asking rents rose 3.4% to more $2,100 per month. Meanwhile, demand is expected to outstrip supply in 2019, based on data from the Q1 State of Mynd San Diego report. The region has the best supply/demand metrics in the entire country, the report states. The chart below shows significant rental appreciation since 2013 in San Diego County:
CoStar forecasts that rents will climb steadily throughout 2019 in San Diego. As a matter of fact, “San Diego landlords have no objections to raising rents upwards of 20% when a unit turns over in light of tight vacancies and low turnover. New investors are most likely to push such rent increases to compensate for such high property taxes."
The common belief that you should own investment property near your personal residence so that you can keep an eye on it, oversee repairs and manage your tenants is outdated. In today’s world of iBuying and advancements in proptech, you no longer have to worry about being located near your property. The notion of real estate as a hyper-local business has been turned upside down since the arrival of online platforms like Roofstock and HomeUnion, according to TechCrunch.
The same technology advancements that power e-commerce proptech platforms also enables great property management. Great property management makes out-of-state investing a reality. To ensure your piece of the California dream is managed as efficiently as possible, hire a property manager with decades of experience investing in and managing California rental properties, Mynd Property Management.
Being an out-of-state investor presents a unique set of challenges that can be best handled by a property manager in San Diego. They include:
If you’re out of state, how can you fill vacancies at your San Diego rental unit fast? You need an on-the-ground expert who understands the local market so that they can find the highest-quality tenants. Mynd’s comprehensive leasing platform uses technology to market your units on more than 40 websites, all from the comfort of your own home. You don’t have to lift a finger. We do all the work to lease your units, which means we fill your vacancies in 16 days on average across our portfolio of AUM.
Mynd diagnoses maintenance issues at your property, using technology and doesn’t dispatch a field technician to complete the repair until it is clearly identified. This saves you money as a remote investor. In fact, we save our owners up to 20% on repairs and maintenance costs by operating this way.
California has some of the most complex rent regulations and landlord/tenant laws on the books. That’s why you, as an out-of-state investor, should hire a property manager or advisor with expertise on state and local rental regulations. For instance, do you know if you’re within the law to evict a tenant who hasn’t paid rent in 30 days? Are you up-to-speed on current rental laws impacting San Diego? As a remote investor, the likely answer to these questions is no. But Heather Jones, Regional Director of Mynd’s San Diego office knows the answers to all of these questions, and more. She has more than 17 years of property management experience in the region.
Now that you can trust your valuable California investment with an expert even if you’re located in another time zone, you can focus on growing your California dream by purchasing more rental housing in San Diego and beyond.
Colin Wiel, Chairman, CTO and Co-Founder of Mynd Property Management, recently sat down with Jeff Large, host of the Jeff Large Podcast. Wiel discussed how technology has disrupted real estate investing and property management. He also shared his experience as a technologist and serial entrepreneur. Since leaving his first job out of college at Boeing, Wiel founded five companies. At Boeing, his career took off quickly after inventing a new algorithm for controlling anti-lock brakes in airplanes using AI.
Eventually, Wiel moved out of the corporate world to become a software consultant. This gave him the ability to work for different companies and projects that interested him. At the same time, it gave him the ability to travel the world.Wiel also consulted at Netscape during the time when the Java programming language was born. This led to an opportunity at the University of California, Berkeley where he developed the Java curriculum and founded a Java programming company.
After selling his Java programming company, he started investing in real estate, thanks to his friend Doug Brien’s advice. Together, they started identifying inefficiencies in the market. When the 2008 financial crisis happened and the house market crashed, Wiel and Brien saw an unprecedented opportunity.
That opportunity was in the rental real estate market. They started buying homes in the far corners of the East Bay. Despite push back from a number of real estate investors and industry experts, Wiel was confident that their idea would work.The pair created a scalable platform for buying and managing single-family rentals nationwide, Waypoint Homes, a publicly traded single-family rental REIT.Their collaboration continues to this day at Mynd, where they are C0-Founders of the three-year-old, Oakland, CA-based startup. Brien currently serves as Mynd's CEO as well.
To hear Wiel’s full story, download the Jeff Large Podcast.