Property Lines

California Ranks High in Multifamily Research Report

2012-01-28T12:23:00.000-08:00

California Ranks High in Multifamily Research Report
By: Nicholas A. Dunlap, CPM

Marcus & Millichap recently published it's 2012 Real Estate Investment Research Report and the news bodes well for apartment owners in California. Despite a tough political climate and the absence of a unified, statewide apartment association to fight legislation, 4 of the top 10 or 6 of the top 20 apartment markets in the United States are located in California. The markets and their rankings are as follows: San Jose #1, San Francisco #2, Orange County #5, San Diego #6, Los Angeles #13 & rounding out the group is Oakland at #16.

The annual research report showcases amongst other things: trends in the rental market, employment market, sales trends and overall supply and demand based on newly completed units and vacancy rates in the market. Of course, property owners in California have recently lost redevelopment agencies as a source of potential funding for improvements and are again battling the threat of rent control through "inclusionary zoning", which would require all new construction to fall under some sort of rent control. Here, Texas has it right: rent control is outlawed in the State constitution. Austin came in at 7th, Dallas at 15th, Houston at 18th and San Antonio at 21st. In my personal opinion, the Texas markets are the best places to buy at present. You can buy for cashflow and appreciation.

Right now, it is an owner's market in California. That is, its a great place to own, but if you plan on buying in California, be prepared to pay a premium and be lucky to receive a 2 to 3% return on your investment. Better than the bank, better than the stock market, but not high enough to substantiate the physical process of investing in commercial real estate.

New Homeownership Stats Great For Apartment Owners

2012-01-13T09:17:00.000-08:00

New Homeownership Stats Great For Apartment Owners
By: Nicholas A. Dunlap, CPM

Today's HBR Stat of the Day shows the direct correlation between uncertainty of income and declining marriage rates in the US among people ages 25 to 44 and the declining rates in homeownership.

There was 5% total growth between 1962 & 2007 from 62% to 67%, but those numbers have now dropped to 57%. Since 1980, marriage rates in the United States have also dropped 15% and married couples are more likely to own their own homes. Not only is there uncertainty in income, there is also uncertainty in the for-sale housing market. Many of these would-be homeowners have seen their friends and family lose their homes and are now dealing with home values that have dropped, leveled, dropped again and are now skipping along what many presume to be the bottom, thus, they are skeptical as to whether or not now is the time to buy.

This uncertainty translates into opportunity for apartment owners and developers. In fact, these numbers have caused apartment investors to continue on in acquistion mode, taking advantage of low interest rates, and have most recently caused developers to put the shovels back in dirt, breaking ground on new projects. This is of course shared by asset and property managers who are able to piggy back off of their customer's uncertainty and their client's optimism.

2012: Could the Mayans Have Predicted Economic Apocalypse? Part VI

2012-01-10T08:28:00.000-08:00

2012: Could the Mayans Have Predicted Economic Apocalypse? Part VI
By: Nicholas A. Dunlap, CPM

The following is an excerpt from my 2012 Outlook on Investing that appeared in this month's Apartment News & Apartment Management Magazines. I will be publishing it in segments here on my blog. Here is Part V.

Closing

As I write this, our occupancy rates are higher portfolio-wide than they have been in over 3 years. Half of our properties are at 100% occupancy and the other half are at or above 95%. So while things might look bleak politically or economically, at least we still have our rentals to look forward to! Remember, there is no better time than now to take the initial steps toward your ensuring your future success. Having made it through the worst of the downturn, there is finally light at the end of the tunnel. Though it’s not quite clear just how long this tunnel is.

2012: Could the Mayans Have Predicted Economic Apocalypse? Part V

2012-01-09T08:37:00.000-08:00

2012: Could the Mayans Have Predicted Economic Apocalypse? Part V
By: Nicholas A. Dunlap, CPM

The following is an excerpt from my 2012 Outlook on Investing that appeared in this month's Apartment News & Apartment Management Magazines. I will be publishing it in segments here on my blog. Here is Part V.

Comply or Wave Bye
Although it might not be required until 2013, Carbon Monoxide detectors belong in your apartment homes now. Combination smoke/carbon monoxide detectors are affordable enough and even cheaper when bought in bulk. Be ahead of the curve and harness this opportunity for good PR. Sure, it’s not required until next year, but we installed it now because we care.

The verdict is still out on the newest changes related to the Virginia Graeme Baker act. We all rushed to implement the required modifications or upgrades out of fear of steep fines and penalties, only to have a Commissioner mysteriously change his mind as to his original decision; mysterious of course because there was no record of issue causing his change in opinion. That said, if we as an industry are unsuccessful in our efforts to thwart this new proposed change, we will be subject to additional changes to our drains and most likely increased fines and penalties should we not comply. Stay abreast of updates from your local association to ensure you stay in compliance.

Sorry, I cannot put a positive spin on the senseless overregulation of our business by the Federal Government.

2012: Could the Mayans Have Predicted Economic Apocalypse? Part IV

2012-01-06T09:19:00.000-08:00

2012: Could the Mayans Have Predicted Economic Apocalypse? Part IV
By: Nicholas A. Dunlap, CPM

The following is an excerpt from my 2012 Outlook on Investing that appeared in this month's Apartment News & Apartment Management Magazines. I will be publishing it in segments here on my blog. Here is Part IV.

The Rent Raise: A Landlord’s Best Exercise

Perhaps the best thing about the economy being in the toilet is that in spite of the low interest rates and low SFR market values, many prospective buyers are still priced out. That said, Orange and Los Angeles counties boast some of the highest barriers to entry, meaning that it is more difficult here than in most places in the nation to make the jump from renting to owning. Thus, renting is the true value. Plan on increasing your rents at least 3 to 5% or perhaps more depending on the specific circumstances of property locale and current (existing) versus market rents.

With the combination of increased income and low interest rates, we will continue to see the market values of multifamily housing on the rise. And thus, another year of low capitalization rates, high costs per square foot and increasing GRMs, which of course is great for sellers but not the best for buyers. Further reason to diversify.

2012: Could the Mayans Have Predicted Economic Apocalypse? Part III

2012-01-05T08:47:00.000-08:00

2012: Could the Mayans Have Predicted Economic Apocalypse? Part III
By: Nicholas A. Dunlap, CPM

The following is an excerpt from my 2012 Outlook on Investing that appeared in this month's Apartment News & Apartment Management Magazines. I will be publishing it in segments here on my blog. Here is Part III.

Diversify Yourself: Location & Product Type

Us Californians have it tough. Our State Legislators relentlessly try to drive us out, either through the overregulation of our industries, the implementation of foolish policies that cost us more money and more time or perhaps the most repulsive of them all, the loose or seemingly careless operation of our state legal system that is exploited with ease.

Enough is enough!

Until our State gets it together, do not give them the benefit of any new property tax dollars. Consider diversifying yourself outside of California to neighboring markets such Arizona, Nevada or Texas. Here, you can still realize immediate cash flow that will beat the bank and substantiate your efforts for consummating a real estate transaction. Not to mention, these States actually want your business and both respect and reward the risks that you take as an investor.

If you must purchase in California, specifically in Orange or Los Angeles Counties, consider diversifying your holdings to include some of the distressed office assets that are available. Do not let the high vacancy rates discourage you. The corresponding purchase prices can often allow for flex room in your pro-forma rents. Other opportunities will continue to include the bank-owned SFR and 2 to 4 unit complexes. There is pent up investor demand so realize that you will likely get into a bidding war with multiple cash-heavy buyers. Come prepared and consider putting your best and final offer first.

2012: Could the Mayans Have Predicted Economic Apocalypse? Part II

2012-01-04T09:18:00.000-08:00

2012: Could the Mayans Have Predicted Economic Apocalypse? Part II
By: Nicholas A. Dunlap, CPM

The following is an excerpt from my 2012 Outlook on Investing that appeared in this month's Apartment News & Apartment Management Magazines. I will be publishing it in segments here on my blog. Here is Part II.

Record Low Interest Rates = Time to Refinance or Reposition Your Debt
With no plans to help grow our economy and no solution on how to add jobs or decrease the national unemployment rate, President Obama realizes that his only way to the American people’s hearts is through their wallets. Albeit, the route is not direct and requires his influence over the still green Bernanke. Eleven months ahead of the Presidential election, we can certainly expect President Obama to exercise his influence and keep rates low. If you did not take advantage of the low rates in late 2011, make this a priority for 2012.

If you share my conservative outlook on investing and are not highly leveraged, take advantage of the low interest rates to either reposition the existing debt on your property to lower your debt service and increase your cash flow, refinance and set money aside for additional investment opportunities or refinance and reinvest the money into your property by introducing capital improvements or upgrades.

Put this at the top of your 2012 to do list.

2012: Could the Mayans Have Predicted Economic Apocalypse? Part I

2012-01-03T15:43:00.000-08:00

2012: Could the Mayans Have Predicted Economic Apocalypse?
By: Nicholas A. Dunlap, CPM

The following is an excerpt from my 2012 Outlook on Investing that appeared in this month's Apartment News & Apartment Management Magazines. I will be publishing it in segments here on my blog.

It’s hope and change all over again. And while many business owners hope for change at the Executive level of our Federal Government, we still have a year before the official change takes place, presuming of course that there is a change. With the coming election, we should expect a somewhat steady year economically. That is, no major changes to policies or procedures, except maybe a slight drop in interest rates. Some might see it as a way to buy the election, but all feelings aside, it is a much needed shot in the arm to a still ailing economy. So while a full recovery is still years away, it is safe to say that as apartment owners and operators, we are headed in the right direction as we head into the new year. Let’s consider some points of interest as we plan for a fruitful 2012. And unlike the Mayans, I do see hope for us past December.

Stocks & Bonds Vs Commercial Real Estate

2011-12-22T08:47:00.001-08:00

Stocks & Bonds Vs. Commercial Real Estate
By: Nicholas A. Dunlap, CPM

Stock & Bond guys love to dog Real Estate. They see it as non-liquid and labor intensive. They see it as one headache after another, from roof leaks to angry tenants. What’s more, they lack the expertise to locate, identify and acquire real estate investments. In some ways, it’s like the Freeway Series in Los Angeles, the Subway Series in New York or the Battle of the Bay in Northern California. Rival investment counselors battling for capital. While most articles or interviews will feature a Stockbroker discussing why rather than purchase a rental house or condominium, an investor should purchase shares of multiple companies in order to diversify, these figures of comparison are irrelevant with the exception being that both are investment vehicles.

Sure, allocating equity to invest in shares of stock that require minimal decision making or maintenance can be seen as preferable over time to investing in a labor intensive project that can sometimes feel like a second job. However, Stock Brokers are not telling you the whole truth and are deliberately excluding the more potent investment vehicle. That investment vehicle is the lost art of private placement syndication. Yes, the group acquisition of commercial real estate or pooling of equity with likeminded investors to acquire a larger asset producing greater income.

I am working on an article to for the Wall Street Journal that will summarize the 12 round prizefight between the two investment vehicles and clearly crown the real estate investment partnership the champion. Stay tuned…

Don't Talk Trash Around a Garbage Can

2011-12-19T08:47:00.000-08:00

Don't Talk Trash Around a Garbage Can
By: Nicholas A. Dunlap, CPM

Nowadays, you can't search for a business or property without the corresponding Yelp Review or Apartment Ratings content catapulting itself in front of your eyes. This can be a great thing if the reviews are positive or even accurate, but given society's penchant for spewing negativity on a business or establishment following an experience that was less than favorable, it is quite possible that this content is not what you would want your current or prospective customers to see. Being as this is a fairly new concept, I would like to point out what I have noticed.

Several of our market-rate multifamily properties (6 to be exact) have received exceptional ratings from residents both current and former following their residency at these properties. The Palms at South Coast in Santa Ana, Pine Bluff in Costa Mesa, Colonial Maple in Orange, College Palms in Fullerton, Eastbay Villas in Newport Beach to name a few. I am alerted via a pre-set "google alert" with any corresponding reviews the moment they post to a site. Reason being, we have a pre-established game plan for responding to negative reviews. Our most consistently unfavorable (if you can call them that) reviews tend to come from our generically named University Village property. That is: our sole student housing property.

What I love about our reviews for University Village is that there are so many student housing complexes across the US, in California alone we have them in: Fullerton, Pomona, Santa Barbara, Riverside, Chico, Long Beach and the list goes on. Maybe it's something in the name, but University Village is by far the most frequent Google alert that I see. Reason being, the insensible nature of the corresponding student base. Negative reviews can often be so inflammatory or exclamatory that they lose all merit or validity through their unrealistic approach to reviewing.

So, if you find that your businesses or your properties are plagued by reviews that are less than desirable, read my post from October, 2010 and find out how you can help yourself and your business.

Property Lines: The Dollars & Sense of Social Media: The Dollars and Sense of Social Media By: Nicholas A. Dunlap, CPM Social Media has become an integral part of our daily lives. As f...

Highlights From the Panel Discussion

2011-12-14T08:25:00.000-08:00

Highlights From the Panel Discussion

IREM has posted a summary of the panel I participated on in San Diego. If you click the link, you scroll down and will see highlights from the panel, including what some of the other panelists had to say about their careers in property management. The panel was a lot of fun and it is always good to encourage others into careers in real estate (management).

http://www.irem.org/getrealgetready/IREM_Newsletter/currentIssue.cfm

Where We're At

2011-12-02T14:29:00.001-08:00

Where We're At
By: Nicholas A. Dunlap, CPM

Being the hybrid economic optimist/realist that I am, I want to point out some of the signs suggesting that our economy is improving. To liken our economy to a rock and a lake, I'd like to think that the rock is no longer sinking to the bottom of the lake, but skipping along the surface, waiting for a big enough gust of wind to make a jump to the surface. The surface, of course, signifying the full recovery of our economy.

To put it all into perspective, multifamily owners in Orange County, California are truly fortunate. In spite of the State's poor leadership and over-regulative measures, our sector of the market is rocking, in part due to the overall improvement of outlying economic fundamentals.

Here are four figures I'm looking at:

1. Recent highs in Black Friday and Cyber Monday sales figures. True, this reflects the consumer's needs for bargains in tough times, but through that, we still see that these numbers are up 33% year over year for Cyber Monday and as much as 32% for Black Friday. Regardless of these days being stereo-typically huge shopping days, 30% growth year over year if phenomenal. That's real money, not Obama-extended, unemployment so I can buy Christmas gift money.

2. Gas prices are down in some Orange County, CA locations by as much as $0.15 per gallon, true, that means were at $3.41 from $3.56, but it's less money wasted on fuel.

3. Nationwide unemployment figures have dropped to 8.6% nationwide as a result of private sector(not public) job growth. That, my friends, is job growth to be proud of.

4. Market and existing rents on multifamily housing are up and continuing to increase by as much as 5 to 10% year over year depending on your local market.

Of course, the numbers speak for themselves. You don't have to be an economist to read them, maybe just to forecast where they are headed.

Finding Substance Past the Headline

2011-12-01T12:05:00.000-08:00

Finding Substance Past the Headline
By: Nicholas A. Dunlap, CPM

The problem with our world today is that we thrive on headlines and article blurbs. We thrive on the "buzz" of the keyword or attention grabbing phrase that graces our internet homepage. People with short attention spans make permanent decisions on individuals, situations and scenarios without bothering to read the full story, many times not bothering to read beyond the cleverly worded catch phrase or title.

Take for example this bit from the Wall Street Journal on December 1st in response to the ongoing debate over the so-called rich not paying their "fair share" in taxes.

"Tech Millionaire: ‘The Rich Aren’t Job Creators’"

In the piece, the interviewee went on to state that he only created jobs because he had to and that if his product didn't sell, then he would not continue to employ as many people as he originally had. As we dissect this statement, we see that not only is the statement exaggerated, it is untrue in this very scenario.

The interviewee made profits on selling products. To manufacture and sell these products, he had to hire labor. However, he states that he only hired these people because he had to and did not keep them employed as sales began to slow and ultimately stop. You don't say?

He admits he created and took away jobs and yet says "the rich aren't job creators". Well, the rich might not drive the demand for a product that creates jobs, but they are often times the force behind the supply of a product; the entrepreneurial mind or go-getter that puts his money where his mouth is; bets big and wins big. Conversely, these bets can go sour and the entrepreneur can lose big, sometimes even bigger than the initial investment. That said, it is only right to recognize the true brilliance of the entrepreneur: the true American Capitalist.

It is important to understand the high-level of risk taken on by many entrepreneurs and reward them with the one thing the government has to offer: tax breaks and benefits. With politicians looking to fill some of the budget gaps, these few benefits have been hammered away at by most. Just this morning, New York State has decided to impose higher taxes on those earning more money. Why? Because they feel that the rich are not paying their fair share? Sadly, it is not the mega-wealthy who will feel the squeeze, more the upper middle class.

Sadly, it is only the Republican party who recognizes the American people's need for these benefits. My point is not to ask you to change your political affiliations, but to take the time to read beyond the headline, to see past the headline, read past the blurb and listen beyond the sound byte to arrive at an informed, educated decision on the issues that significantly impact our nation and our economy.

My Thoughts on Accountability

2011-11-28T09:55:00.000-08:00

My Thoughts on Accountability

Whatever happened to accountability? When I was a kid, I remember not getting the grades I should’ve gotten and having to answer to my parents. Or not doing my chores and having to answer to my mom. I would’ve rather been hit by a car than disappoint my parents. Now, my parents were not unlike most others in expecting more from their children than perhaps they were capable of, but if high standards aren’t set, how high will a kid reach on their own? This mental conditioning we experience as youth is supposed to be the foundation for our futures. Raising responsible children who become responsible adults is by all means the duty of parents. And yet more and more in our society around us, we are seeing accountability fall by the wayside.

Whether it’s Barack Obama and the super committee that he created so that he would have someone to blame for his own inability to lead, compromise and reach an agreement, whether it's a professional Boxer (Antonio Margarito) and his trainer who conspired to put plaster in the boxer's hand wraps pre-fight and then in the aftermath acted as though neither knew how it got there, our City Councils who exploit their roles and then fail to act in times of need, or whether it’s an employee who simply shrugs off shortcomings or mistakes by saying things like “I didn’t know” or “Nobody told me”, nothing exacerbates a problem more than shrugging it off or sidestepping it.

It takes a lot to admit you were wrong, but in doing so, you free your conscience and exhibit personal character and strength that most lack. So the next time you make a mistake: acknowledge it, learn from it and move forward; admit it and move on. In this age of transparency, accountability is more necessary than ever.

Who Needs a Property Manager, Anyway?

2011-11-14T07:38:00.000-08:00

Who Needs a Property Manager, Anyway?
By: Nicholas A. Dunlap, CPM

In meeting property owners, one of the questions I often encounter from individuals who operate or manage their own rentals is: why do I need a property manager? While I cannot speak for all property managers, I usually start by saying that professional management can preserve current income, create additional income and lead to additional improvement projects so as to ensure your property evolves with the times. Ultimately, these renovations can lead to decreased maintenance expenses and higher occupancy as a result of a well-maintained curb appeal. Of course, these are the tangible, real-life, real-world solutions that occur on a frequent basis. The in-tangibles, such as tenant screening prior to move-in are best explained by the newspaper headlines, that is, when professional management is not retained and, well, your tenants start to grow marijuana in your beautiful four bedroom, three bathroom rental home.

Unfortunately, I am not making this stuff up and you can read about it here:http://www.latimes.com/news/nationworld/nation/la-na-pot-homes-20111113,0,574959.story

The Market

2011-10-28T08:29:00.000-07:00

The Market
By: Nicholas A. Dunlap, CPM

People are always asking me what I think about the market. And if you follow my blog, you will know that I think there are some great opportunities available in the market at present. You can acquire distressed office properties in primary markets such as Orange & Los Angeles counties for a fraction of what they sold for 4 years ago or you can look outside Southern California in areas with room for growth, like the Austin, Dallas or Las Vegas multifamily markets. By room for growth, I am talking population, employment and ultimately rent growth, which ties into my point on the other market so relevant to our business as property owners and operators: the rental market.

As for current trends, we have continued to see occupancy and rental rates increase. Existing and market rates have continued their uptick as consumers remain priced out of for-sale housing. Orange County has seen steady demand for B & C grade multifamily housing, whose rates have not been hit as hard as Class A product. Although market rental rates had gradually increased over the past 1.5 to 2 years, 2011 was the first year in the past 3.5 years that we raised rents on existing residents. The one bedroom apartment is again becoming favorable as younger renters and those who had previously doubled up with family members continue to move out on their own. Thus, as vacancy rates continue to decline, we should also see a correlation between less move-out or turnover and a decrease in maintenance expenses.

While 2011 saw modest yet very welcome increases of 2% to 5%, we are hopeful that 2012 will see a strong 3.5% to 5% increase in rental rates across the board. Since we have already started to play "catch up" on the time lost following the economic collapse and the recession of 2007-2009, but it will take strong job and wage growth for us to continue the progress necessary to restore certainty and confidence to our economy. Of course, in states like California, it will also take strong political leadership and guidance to restore some stability and confidence to a place that has done so much to shoe businesses away. Will we see the lost jobs return to California? Or will they be outsourced or relocated to Arizona, Nevada, Texas or...India?

Politics aside, the demand for apartments remains strong and looks to continue well on through 2013, especially in Southern California.

The Contrarian With Cash Is King

2011-10-19T09:38:00.001-07:00

The Contrarian With Cash Is King
By: Nicholas A. Dunlap, CPM

It's always a great time to own property. Especially now and in Orange County, California. Of course, there are other markets across the US that boast better investment opportunities and growth potential, like Austin, Dallas & Las Vegas to name a few, but some feel that Austin is in it's own bubble and Las Vegas (hard as it is to believe) still has more room to drop. Dallas? Big things expected in 2012 and I'm obviously not talking about the Cowboys.

Consider the fundamentals on the acquisition side for a moment:
- Going in financing available in the mid 4% to low 5% range (better rates for the short term, of course).
- Distressed opportunities in the office & multifamily sectors in most markets (albeit, with heavy competition and possibly not the "distressed deal" you were looking for).
- Market rents increasing, existing rents increasing (in some markets/product types) and occupancy increasing.

And for sellers we are seeing: declining capitalization rates and rising per unit and per square foot pricing in most markets. But with the strengthening fundamentals, who would want to sell? The answer: Someone who is sophisticated enough to realize that the market they are cashing out of is likely not where they should re-park their equity. Orange or Los Angeles County sellers of multifamily should be looking at the distressed office opportunities in the same areas or the multifamily opportunities in Austin, Dallas & Las Vegas.

Of course, if you own property and you are not happy with your portfolio's performance, you should probably shop around for a new management company. There are too many opportunities right now to be burdened with a lazy management company who cannot respond to the economic conditions facing our country. We have and our occupancy is through the roof. We have eight buildings at 100% occupancy and nearly a dozen more with less than 4% vacancy.

The opportunities are out there and there is a ton of money on the sidelines. For contrarians like myself, the time to buy is when nobody else is and that means...NOW.

Real Estate As Your Muse

2011-10-05T19:50:00.000-07:00

Real Estate as Your Muse , Part I

If you enjoy reading books about life or business, or perhaps how you can streamline your business and improve your quality of life, then perhaps you are familiar with Tim Ferriss. Tim is the author of the NY Times, WSJ & Business Week #1 Best Seller “The Four Hour Work Week”. The book, which I highly recommend, discusses the ways that business owners or operators can relieve themselves of the minutiae and monotony of the miniscule, day-to-day operations of their businesses and actually enjoy life. A crazy concept, I know.

Tim is an Angel investor and actively invests and encourages readers to invest and/or build online businesses that are easily operated within our new global economy. This business or venture is known as a “Muse”. What occurred to me as I was reading the book is that as the owner/operator of commercial real estate, we streamline the investment process for our clients in a way that enables real estate to be their muse. What’s more, these clients then receive the additional benefits of owning real estate, benefits that would not apply to someone operating an online shop or marketplace.

Whether you are a lone investor looking just for a professional management company, or an investor looking to partner in a real estate syndication venture, there is great opportunity for cash flow, tax shelter, equity buildup and a hedge against inflation. With the right systems in place, you can be cruising the Mediterranean, reviewing financial information via email or portal and having your periodic income directly deposited into the bank account of your choice.

Now, that’s my idea of a global economy. Stay tuned for future blog posts on this most interesting topic.

You can learn more about Tim by clicking here: http://www.fourhourworkweek.com/blog/

Real Estate is Still the Darling

2011-10-01T10:14:00.000-07:00

Real Estate is Still the Darling
By: Nicholas A. Dunlap

Touted by many financial publications as a "quarter to forget", the Stock Market has continued it's downward, depressing trend. All the talk of Greece, the Eurozone and bailouts and these dark undertones are starting to resonate in our own American Economy with our increasing unemployment figures, new consumer credit crunch, and of course: our lack of leadership through such bleak times. And yet, those of us who own and operate investment real estate have not been busier or better in recent years. At our firm, we had our best Summer since 2007. We saw rent increases at most B properties in B or better areas and have seen our occupancy continue to trend higher. That said, it is no wonder that this week the Wall Street Journal and Money Magazine both began to hype up the REIT or Real Estate Investment Trust. In fact, WSJ published an article today titled "REITs, Don't Fail Me Know", virtually acknowledging the hold of Real Estate through REITs as one of the superior investments available in the marketplace today.

Why wouldn't it be? Interest rates are low, rental income rates are on the rise and there are still a number of distressed opportunities available in the marketplace. Sophisticated investors are killing it in this "perfect storm" of sorts. My opinion? Don't go for the REIT, align yourself with a fund or syndication sponsor and identify the opportunities that best suit you. Not only is the time right, you can achieve the four benefits of owning commercial real estate.

The Investor's Progress Report (9/11)

2011-09-27T08:20:00.000-07:00

The Investor's Progress Report (9/11)
By: Nicholas A. Dunlap, CPM

As an Author/Economist, there are few things better than looking back on projections made 9 to 10 months ago and seeing that most were correct and more importantly, none were wrong. I wrote an article that published in the IREM Los Angeles "Inside IREM" Magazine as well as "Apartment News Magazine" for the Apartment Association of Orange County that you can revisit by clicking below. In it, I described interest rates dropping, a better climate for investors, rental increases in select areas as well as the need for property owners to streamline their operations through e-operations and more. Not only have we seen rates continue to drop, rental rates have increased (not just in our portfolio, but county and region-wide) and the climate for buyers could not be better...That is, if there was just more to buy in Orange County! Not to mention, software and app companies continue to develop programs intended to help multifamily owners and managers.

Check out the article here:

Property Lines: The Seven for 2011: The following text is taken from an article I wrote for both Apartment News Magazine February 2011 & the forthcoming Institute of Real Estat...

Giving Back

2011-09-21T15:47:00.000-07:00

Giving Back
By: Nicholas A. Dunlap, CPM

Last week I had the opportunity to participate through the Institute of Real Estate Management's Orange County Chapter as a panelist on "Careers in Commercial Real Estate" held at CSUF's Mihaylo School of Business. Aside from hearing some great stories from my fellow panelists, the best thing about this panel was the fact that we had almost 60 students packed into the conference room. Sure, the free pizza helped, but having the opportunity to share my insight and help others onto the right path is a great experience and I think that many often overlook their ability to assist and advise others. Real estate is a great business and it is fantastic to see so many students considering a career in the industry.

Here are some shots from the panel:

Why Our Water Rates Are Rising...

2011-09-14T10:06:00.000-07:00

Why Our Water Rates Are Rising
By: Nicholas A. Dunlap, CPM

It's good to know that we can count on public organizations such as the Water District to raise our rates in order to line their pockets with fat benefits and pension increases. After all, most of us in the private sector share these same benefits, right? WRONG. In looking at some of the out of whack budgets prepared by the various water districts across Orange County, one can't help but gripe over the extraordinary benefits afforded to these civil servants.

It used to be that the benefits of public and private sectors shared similarities. Now, the public sector has unions, a monopoly on the industry or service it provides and benefits that far exceed those of most private sector workers.

Check out the OC Register report here: http://taxdollars.ocregister.com/2011/09/13/water-workers-get-pensions-and-401k/97178/

The D Word

2011-09-13T11:22:00.001-07:00

The D Word
By: Nicholas A. Dunlap, CPM

As we watch the economic crisis in Greece play out before our eyes, one can't help but see parallels between the issues plaguing the Greeks and those facing Americans today. An over-sized Government with over-sized spending, pensions and benefits to it's employees faces a serious issue: how do we continue to pay all of these people and award all of these benefits without collecting enough money to function and operate in such a manner? Quite simply, the answer is to make adjustments at once.

Whether you are in Greece, the US, California or the EU one must ask: where is the accountability? These officials have been elected to serve us and are serving themselves and their special interests.

These same issues are seen today in the US Nationwide as well as in California. Unemployment is at record highs and job growth is virtually non-existent in most areas. What's more, we have seen government agencies hiring new employees and making no attempt to reign in spending. Some agencies, such as the EPA have increased their spending exponentially.

The parallels are quite clear. In Greece, the US and California, career politicians or public employees without private sector experience are at the helm and are in charge of guiding our respective countries through turmoil, the likes of which neither have seen before (well, the US did in the 1930s). And the D word, which the head bankers in the EU have avoided for so long: default, could in fact become a reality. Greeks have tried slowly to make cuts and address the deficit, but as a result, unemployment and other such expenses now pose an issue.

And so, while we watch Greece and we can hope for the best and certainly hope that a tragedy of such drastic proportions does not reach home to us here in the United States and that the global effects of this crisis do not cause damage to the EU or the US economies. That remains to be seen.

14 Months & Counting

2011-09-09T08:59:00.000-07:00

14 Months & Counting
By: Nicholas A. Dunlap, CPM

I have always considered myself an independent thinker and have voted for a variety of candidates and political parties in local and national elections. Often times though, I'd sway conservative on fiscal policies, cherish our 2nd Amendment rights, and favor a smaller government with less bureaucracy and less pension that controls spending and balances a budget. Socially, I would tend to be slightly more liberal, favoring our individual rights to do whatever we want within the letter of the law, to the extent the laws make sense and are not simply to satisfy or appease one's religious beliefs.

Having said all that, allow me to now say what I think the rest of the nation now knows for certain: WE NEED A NEW PRESIDENT IN 2012! One who can lead, one who understands and one who will right the ship. In retrospect, Hilary Clinton would have done a much better job than Barack had she won the candidacy. But it will likely take the fiscal conservatism, the understanding of what makes our economy tick and the experience that markets can thrive on in order to get us back on track. Yes, that means a Republican candidate. Re-electing someone who has no private sector experience will not boost private sector confidence. No. It will continue to grow our government, spend and borrow our country into a further downgraded mess.

So if it's not Ron or Rick, let's hope for Mitt. And hopefully, if things continue to trend downward, we will be just 14 months away from a strong uptick in our economy. Here is a photo of me at the Rick Perry Rally yesterday at Roger's Gardens in Newport Beach.

And yes, if you look closely, he did sign my poster "Ricky".

<a href="http://www.7is7.com/otto/countdown.html?year=2012&month=11&date=6&hrs=20&ts=12&tz=-300&min=0&sec=0&lang=en&show=dhms&mode=t&cdir=down&bgcolor=%23CCFFFF&fgcolor=%23000000&title=Countdown%20to%20the%202012%20Presidential%20Election">Countdown to the 2012 Presidential Election</a>

Enough to Go Around

2011-07-31T08:57:00.000-07:00

Enough to Go Around
July 2011

July has been a very busy month for the DPG team, which explains the infrequent blog posts. However, it has been a good busy to say the least. Before I discuss my writing, I'd like to briefly synopsize the rental market at present. By food group, we will touch on: multifamily, commercial & office property. And as I suggested in the title of this post, there is enough to go around.

Multifamily Housing
Occupancy rates are up, rental activity is up and although the economic outlook is bleak, our existing & market rental rates are rising simply due to the stable demand for rental housing in Orange County. Even with the low interest rates & depressed market values of single family housing, the barrier to entry remains too high for most would be homeowners. The result: increased rental income, downward trending capitalization rates and cash heavy investors looking to acquire additional assets.

Commercial
Commercial activity has come on strong and in fact, we have a waiting list nearly five slots deep for most of our space. Back from the dead has come the restaurant, small business retailer or other such boutique tenant that had all but disappeared the previous 3.5 years. Realize that my use of the word "strong" in the aforementioned description is used in the same manner in which you would describe a homerun hitter breaking out of a slump with a steady string of 1 for 4 games. Not thriving by any means, but certainly showing signs of life. Right now, there is big upside in the commercial market.

Office
With terms such as "centralized hub", "in the cloud" and "e-commute" becoming increasingly popular, it is no wonder the office market is so complex at present. Here, the word complex translates to "variable demand". New Gen-Y tenants are opting for less space and more technology. As such, the mid-sized space is perhaps the most difficult sell, and by mid-sized space I mean above 2,000 square feet, the demand for very small space or 250 to 500 square feet could not be hotter. It would appear as though many a savvy manager or owner have identified this trend and begun to wall up and dress down some of the larger, more sexy space previously occupied by a range of professional businesses from mortgage companies to attorneys to physicians, etc. Now is a great time to shop for office space, both for lease and purchase. Simply put, with leases on a discount, you are buying on a discount. If you have cash and like Orange County, office space is where you SHOULD be looking.

In a nutshell, you are up to date on the multifamily, commercial and office property types as of July 31, 2011. I can talk about student housing as well, but that's a whole 'nother beast. And while I have not been active on the blog, I have been working on the following:

- Apartment News Magazine: Article published in August 2011 issue entitled "Thriving in Turbulent Times"
- Journal of Property Management: Article (and feature article at that!) will run in the November/December 2011 issue
highlighting Due Diligence.
- Winning Property Management Strategies- My new book has been completed and is in print. More info once it is widely
available and past the "peer review" stage.
- I have been tapped to speak at two national, commercial real estate conferences in the fall.

On that note...

My first book "The Four Benefits: Commercial Real Estate Investing & You" has been officially published by the Institute of Real Estate Management here: http://www.irem.org/acb/stores/1/_font_color_FF0000_NEW_fo_P23743C1.cfm

But, I would much rather have you purchase it on your kindle or e-reader by clicking here:
http://www.amazon.com/Four-Benefits-Commercial-Investing-ebook/dp/B005DNHCC8/ref=sr_1_1?ie=UTF8&qid=1312131125&sr=8-1

I should point out that this a very stimulating beach read. And if you implement what I teach you, you will be able to spend more time on the beach, more time on vacation and less time dealing with the minutiae of the day-to-day grind. How's that for a guarantee?

The End of Free Advertising?

2011-07-15T09:17:00.000-07:00

The End of Free Advertising?
By: Nicholas A. Dunlap, CPM

If you use Craigslist to advertise your rentals, you most likely have noticed the changes that have recently taken place. Going back nearly one year, the original layout had started to change until last week when the entire layout shifted. Now, the standard layout or home screen for Craigslist Account postings features four tabs: your postings, new postings, account settings & billing/accounting.

Those in the multifamily industry are certainly aware of the writing on the wall and that is: Craigslist will no longer be Free for property owners or landlords looking to advertise space for rent. This has been the talk for several years, but it appears that the time could be upon us. While the service continues to be free and is quite possibly one of the most effective methods of advertising for landlords, it will be interesting to see how the establish their rate structure once it becomes monetized. Will they charge per ad or per account? How long will the ads stay up for?

Just like with other services, it is likely that landlords will start looking elsewhere once costs increase. Will some of the other online or in-print advertisers be stepping up to compete for market share?

Just Another Reason to Invest in Real Estate

2011-06-29T10:50:00.000-07:00

Just Another Reason to Invest in Real Estate
By: Nicholas A. Dunlap, CPM

Investing in real estate provides an exorbitant comfort, unrealized with that of stocks and bonds. That comfort of course, is the physicality of real estate through bricks and mortar. Property values or rental rates can plummet, but there is still the human need for a place to live, work, shop or play. These inherent, human needs result in a consistent flow of income to you as the property owner. While there are times the income level might be lower than you would have hoped, so long as you maintain the property you will still be able to generate a return on your investment. The same cannot be said for the stock market and shareholders.

And, if you are a beginner looking to invest or understand more about the science and the logic behind commercial real estate investing, you can buy my book by clicking the following link.

The Four Benefits by Nicholas A. Dunlap |

Some Thoughts on Private Placement Syndication

2011-06-28T10:01:00.000-07:00

Some Thoughts on Private Placement Syndication
By: Nicholas A. Dunlap, CPM

Participating in a private placement syndication or partnership is an excellent way for investors to align themselves with likeminded individuals looking for similar returns or gains. What’s more, the partnership’s sponsor or General Partner will in most cases have a unique insight as to how the property will operate most successfully. Typically investors will be presented with a prospectus and then a capital call will take place. At this point in time, the syndication’s sponsor identifies the number of spaces available and the minimum/maximum dollar amount of the buy in required. A strategy will be discussed, a management plan will be presented and ultimately, the acquisition will be made. Often times the sponsor will determine that a number of improvements should be made to the property before proceeds can be shared with investors. Thus, the improvements are financed by the Operating Income of the asset, not requiring additional out-of-pocket contributions from ownership unless otherwise agreed upon.

Tailor It Down

2011-06-14T10:02:00.000-07:00

Tailor It Down
By: Nicholas A. Dunlap, CPM

Way back when, the income you received from your multifamily property was comprised primarily of rent, late fees and other fees associated with move-in or move-out. Now, there are a number of ways apartment owners are profiting. From partnerships with Cable TV and Internet companies to valet recycling programs and exclusive amenity packages that rival those of resorts and spas, there are multiple income streams flowing to ownership without having done anything more than sign an agreement or make an arrangement. We know that institutional owners are taking advantage of these opportunities, but are the mid-range management companies or individual owners as well?

Will concierge-type services soon become the norm at multi-family properties? Depending on your portfolio and the locations of the properties within it, the luxury treatment could soon be required to compete with the other guys in order to maintain occupancy and still attain top market rents. In the meantime, the bonuses and benefits are just icing on the cake.

There is a constant battle for relevance and the inability to adapt and implement these ideas as they develop will only set you back further. Smaller owners should grow accustomed to picking and choosing what works for the big owners and tailoring it down to fit their needs.

The Multi-Generational Workplace

2011-06-13T10:00:00.000-07:00

The Multi-Generational Workplace
By: Nicholas A. Dunlap, CPM

Last Friday, I had the opportunity to sit on a panel at the Southern California Real Estate Conference in which we discussed the multi-generational workplace. Represented on this panel were: Builders, Boomers, Gen Xers & Millennials. It was brilliantly directed by managerial/generational rapport expert Chip Espinoza, Ph. D.c. What an exciting discussion to be part of. With the abundance of Millennials pouring into the workplace, I was the proverbial “guinea pig” of sorts. But while I was asked about things like our (millennial) tech savvy and self-drive, I was also able to express my sincere admiration for the tireless work ethic exhibited by boomers, the pride shown by builders or the ingenuity shown by Gen X’ers who have become sort of the bridge between “then and now”.

View the chart here:

The conclusion: success takes a perfect balance of old school work ethic and new school technology. Not adapting or conforming to the new way of business will leave you behind. With this, we were all in agreement.

Fish In a Barrel?

2011-06-11T09:07:00.000-07:00

Fish In a Barrel?
By: Nicholas A. Dunlap, CPM

Every bad movie or nowadays, bad television show, about real estate seems to have a scene where the wiser, more mature figure informs a young, uninformed colleague that real estate is about three things: "location, location, location." As cheesy, insignificant or irrelevant as it may seem to the dialogue or situation at hand, it is in fact the truth. And with the growing popularity of location-based, social media platforms like Foursquare, Yelp!, Gowalla, Brightkite, Loopt and Facebook Places, property owners now have the ability to harness the power of their almighty locations and thrust their mite upon unsuspecting visitors or passersby.

It's smart, is it not? There's a good chance if I am in a certain area at a certain time, I might be looking for a place to eat, drink, live or work. And if provided with a coupon, discount or incentive, I just might be inclined to stop into a specific establishment and see what they are all about. Restaurants are utilizing these programs through Yelp! and are quite successful. Will office or multi-family landlords experience this same response? Larger, more free-spending multifamily owners are already on this platform. Are they seeing results or just maximizing their exposure?

It's always interesting (or creepy, depending on your thought process) to see the way technology evolves and what data becomes available to businesses or individuals. Should I feel privileged to have received a special discount or should I feel offended that my privacy has been breeched and although I have subscribed to the do not call list, I am now having offers sent to my cellular phone without my consent. It's an interesting situation and it is upon us.

With regard to location based marketing I pose the question: in a battle of metaphors, are we shooting fish in a barrel? Or are we still leading the horse to water?

The Jobs Forecast Is Bleak, Unless You're Talking About Steve

2011-06-03T07:41:00.000-07:00

The Jobs Forecast Is Bleak, Unless You're Talking About Steve
By: Nicholas A. Dunlap, CPM

I knew the numbers would not be great, but come on: unemployment actually ticking upward?

Stats released this morning by the Labor Department buck the trend of positivity we have experienced over the past year and a half. While we certainly see this reflected in the occupancy rates of our mid to large office space, our multifamily occupancy rates are rock solid. Unless we are testing the market at higher rates, our units are renting quicker to what appears to be a better quality of tenant, both income and credit wise.

Now, as for the US & California's employment outlook: if only Steve Jobs could consult with our Legislators and Politicians to help open their eyes and instill the same sense of visionary thinking that has made his firm the continued success story throughout the downturn. It's interesting to apply private-sector principles to public-sector fundamentals. Continued re-thinking of ideas and technologies and actually approaching a situation from the standpoint of: how can we improve on last year's success or how can we ensure that we do not make the same mistake twice? Steve is a brilliant man and he is also in control of his own success. Our Representatives do not take the same approach to our livelihood. There is minimal responsibility and lots of shoulder shrugging.

If only our Legislators began to realize what actually worked for the public and continued to promote programs like the First Time Home buyer Tax Credit (nationwide) or if on the California state level there were actual benefits or incentives to continue to do business in California.

While people blame the FTHB Tax Credit for creating a false sense of stability in the marketplace, what it did was help create jobs, maintain jobs and instill stability in our economy. Follow the chain of command and look at how many people this touches: buyer/investor, realtor (1 or 2), mortgage broker and staff, appraiser, home inspector, contractor, escrow officer and staff, county offices, state offices, home warranty companies and ultimately the seller. With one move, have there been any other incentives introduced by the Uncle Sam that have actually touched at minimum 12 lives?

The answer is no. Their solution was to extend unemployment benefits. It's time we get pro-active about change. As we have seen: hope springs eternal, but does nothing.

Please view the official DOL release here: http://www.dol.gov/opa/media/press/opa/OPA20110856.htm

Smart Investing Starts Here...

2011-06-01T09:15:00.000-07:00

Smart Investing Starts Here. Buy My Book!

The Four Benefits by Nicholas A. Dunlap |

We're In a Bubble, Somewhere

2011-05-31T16:23:00.000-07:00

We’re In a Bubble, Somewhere
By: Nicholas A. Dunlap, CPM

As figures surface showing that home prices continue to reach new lows, the market for multi-family continues to stay hot. With limited quality product and pent up investor demand, select sub-markets across the Southwest are so hot, it is as though there are price bubbles being inflated before our very eyes. As usual, markets with strong fundamentals and improving circumstances are the investor’s primary focus. Population growth, rent growth, job growth and wage growth are all factors typically considered by investors. Yet in times of uncertainty when these markets are few and far between, investor demand can cause markets to overheat and ultimately burst the bubble.

Having recently come close to two acquisitions in the Austin, Texas market which would’ve marked our first play out of California since the 1980’s, we see the writing on the wall. Our first opportunity had us against 18 other buyers, the second opportunity had us against 11. Needless to say, the novelty list prices that generated such activity are far lower than the ultimate sales prices on either of these assets. Will these values remain hot or will they be cooled off by land development?

Sorry, We're Closed!

2011-05-23T11:22:00.000-07:00

Sorry, We're Closed!
By: Nicholas A. Dunlap, CPM

Recently published data by TREPP shows that small, regional banks across the United States are being tapped out by non-performing, commercial loans. This truly unfortunate scenario marks what some feel could be the proverbial “tip of the iceberg” of the current/looming commercial real estate debt mess. Local financial institutions dot our communities nationwide and often issue these commercial loans as a way of endearing themselves to the local business community. These banks overextended themselves unknowingly in an attempt to enter the commercial mortgage marketplace. Ultimately, this has resulted in the undoing of approximately 13 banks nationwide.

Similarities can be found between the relationship based lending of the sub-prime mortgage meltdown and the willingness to boldly go where “their bank hasn’t gone before”. Focusing on fundamentals as opposed to relationships will likely keep your local institutions’ doors open.

View the data from the study here: http://www.trepp.com/main.cgi

You Know You're In California When...

2011-05-20T10:35:00.000-07:00

You Know You're In California When...
By: Nicholas A. Dunlap, CPM

You're a Real Estate Investor and you own multiple properties. You have built a successful approach to the operation and management of your properties and part of that includes the use of vendors who have a track record of getting the job done. A new bill (AB 350) carried by Jose Solorio would prevent this from happening. With AB 350, you would be required to retain the current service persons, not their companies, for at least 60 days following a change. Your preferred company would actually be forced to make these service persons their employees.

Oddly enough, when service is unsatisfactory and owners or tenants are unhappy it is usually the service persons who are to blame. Sadly, property owners would be forced to compromise quality in order to appease the socialistic, unionized ways of California.

Hopefully the various property right groups statewide will help put a stop to AB 350. And then, we can all make better decisions the next time we choose to elect a "head in the sand" politician.

Coming Soon

2011-05-08T19:28:00.000-07:00

It’s not often that I use this blog as a means of discussing items irrelevant to commercial real estate investment. That said, I would like to clarify the lack of recent content. This weekend, I will be getting married. In addition to the long hours at the office, I have also been involved in the planning, correspondence and otherwise mind-numbing forethought that goes into putting a wedding together. As a result, I have not updated you all with some of the timely content so important to our cause.

With that, expect more frequent updates soon. This will include a complete summary of my lobbying efforts both in Washington, DC and Sacramento, a look at some of the markets we are interested in and the opportunities we continue to see in the Southern California market.

For great articles, research and highlights from my reading list, follow me on twitter at: http://www.twitter.com/nicholasdunlap or @nicholasdunlap.

Trip To The Hill Part 2

2011-04-12T14:01:00.000-07:00

Trip To The Hill Part 2
BY: Nicholas A. Dunlap, CPM

Springtime in DC and that means it's time for the 11th annual IREM/CCIM visit to Capitol Hill. Due to our control and ownership of a significant amount of property within the areas represented, we have been awarded the opportunity to communicate directly with our elected officials to educate them on the foremost issues concerning the commercial real estate industry.

This is my second time participating in the event. You can read my blog summarizing last years event by clicking here: http://www.nicholasdunlap.com/2010/05/my-plea-to-congress.html

This year we will be meeting with a number of new and old faces on the Hill. Our meetings include: Ed Royce ( a former tenant of ours), Loretta Sanchez, Dana Rohrabacher, Gary Miller and Darrell Issa to name a few. We will be advising them on policies such as: mortgage liquidity, covered bonds, increases in credit union lending as well as new incentives to encourage energy efficiency in the operation of commercial properties.

Additionally, I will be presenting each of the aforementioned officials with a copy of my book "The Four Benefits: Commercial Real Estate Investing & You".

Stay tuned for a complete summary of events and occurrences on the Hill.

Small Steps Toward a Recovery

2011-04-04T09:38:00.000-07:00

Small Steps Toward a Recovery

By: Nicholas A. Dunlap, CPM

Success in commercial real estate depends on jobs. From employment growth to wage growth, investors make their decisions based highly on the performance of a region or the projections set for a specific time period. Right now, the statistics bode well for office and multifamily properties alike. People have jobs and need a place to live. Employers now hiring, need a place for their employees to work. This improving climate has highlighted several market areas as “places to watch”.

Recent data released by the Labor Department shows that unemployment has decreased to 8.8% which happens to be a two year low. Of course there are specific geographic regions where the number may be higher or lower, but the general idea that things are looking up is recognized nationwide. Be it from an operational standpoint where we recognize an increase in rental applications and occupancy or a decrease in delinquencies, or from the investment standpoint where we are actively considering new opportunities, we are heading toward a perfect storm for positive cash flow real estate investors: low interest rates, decreasing unemployment and product available at a discount from recent highs.

If you are interested in obtaining additional information on group real estate investments, joint venture programs or other commercial real estate investment services, click below to purchase my book "The Four Benefits: Commercial Real Estate Investing & You".

Timing, Finding & Moving

2011-03-08T16:46:00.000-08:00

Timing, Finding & Moving

By: Nicholas A. Dunlap, CPM

Successful investing is about timing, finding and moving on the best opportunities available in the marketplace. Having said that, it is important to consider just how these opportunities fit within some of the more noted or historic patterns of wealth building utilized by investors. As the saying goes, there is no need to reinvent the wheel. Focus your efforts by looking for the best opportunities in today’s market and adhering to proven models such as exchanging up or leveraging your way to success.

Right now in Orange and Los Angeles Counties, the opportunities are in the distressed 2 to 4 unit complexes that seem to clog Loopnet and the MLS. There are very few pride of ownership properties in this unit range on the market and the ones that are, seem out of place. Look for a fixer upper in need of TLC and find your value. Then, join your local Apartment Association and self-manage your property. If you work long hours and are otherwise unable to dedicate part of your time to self-managing, consider a group real estate investment. Partnering alongside likeminded investors in a private placement syndication will allow you to own a portion of a larger property, likely yielding a greater return.

Tailoring your investments to fit you and your lifestyle is of the utmost importance. The return on your investment should supplement your income and lifestyle, not compromise it. Before you invest, ensure you are making the right decision by effectively quantifying the investment vehicle and your corresponding involvement. If you foresee the investment becoming more detrimental than supplemental, you should likely not proceed with the transaction.

For additional reading, purchase my book directly at:

Two Year Best

2011-03-04T09:05:00.000-08:00

Two Year Best

By: Nicholas A. Dunlap, CPM

Unemployment has decreased to 8.9%, the lowest in nearly two years. For those of us in consumer driven businesses and in this case, the rental industry, these statistics certainly mirror what we have seen in our leasing offices. An increase in calls, improving credit ratings and expendable income have lead to a decrease in move-in specials and concessions and an increase in occupancy.

Will we see these improving circumstances transcend into the investment sector? In some instances, we already have. All cash buyers are snapping up properties of all sizes in primary markets such as Orange and Los Angeles counties, with smaller apartment complexes selling to cash heavy buyers through multiple offers and decreased due-diligence periods.

By The Time You Hear The Sirens

2011-02-28T21:21:00.000-08:00

By The Time You Hear The Sirens

By: Nicholas A. Dunlap, CPM

No offense to the economists, but I am firm believer in the idea that by the time you hear the sirens, its already too late. And so is becoming the case with great opportunities to buy or invest in Southern California and many other real estate markets nationwide. Simply put, cash heavy investors are looking for places to park their money. And whether you are looking at single family residences or multifamily housing, you have likely been beat to the punch by someone with more cash, less financing and as a result, a decrease in the corresponding escrow period. Whether the seller is a private property owner or a financial institution, this equates to quicker money in their pocket and with lower likelihood of a hiccup in the transaction.

The best advice? Study the comps, talk to the dealmakers and respond quickly to any and all opportunities that fit your investment criteria. While you will likely miss out the first time around, identifying the subtle nuances within the marketplace will help you recognize true value when it comes your way. Then, you realize success and become a positive statistic. That is, before the economists can identify it.

Browse through some recent articles in the news also about these topics:

WSJ: http://online.wsj.com/article/SB10001424052748703905404576164720668195108.html?mod=WSJ_hpp_sections_realestate

LA TIMES:

http://www.latimes.com/business/la-fi-cash-only-20110301,0,5886560.story

OC Register:

http://jan.ocregister.com/2011/02/28/55533/55533/

Home Depot As An Economic Indicator

2011-02-23T09:58:00.000-08:00

Home Depot As An Economic Indicator
By: Nicholas A. Dunlap, CPM

Home Depot reported that its profits rose over 72% in the 4th Quarter of 2010. This significant increase means more than just padding to Home Depot’s bottom line. Historically, Home Depots profits have shown increased activity in the rehab and upgrade of residential properties, construction of newer properties and shown that more homes are selling and thus requiring upgrades or personalization. Essentially, people are starting to believe again. People once again have the money to spend on their homes, illustrating the increase in consumer confidence that has been published in recent studies by the Commerce Department (showing we have reached 3 year highs). All of this activity has been helped by low mortgage rates and flat if not slightly declining home values in some areas.

What To Look For

2011-02-20T09:04:00.000-08:00

What To Look For

By: Nicholas A. Dunlap, CPM

One of the questions I get asked the most with regard to investing in real estate is: what rate of return do you look for in order to proceed with an acquisition? The answer, though complex in nature, is quite simple. You see, Real Estate requires more physical work than other assets such as stocks or bonds. With that, it is only right that you earn more than you would by either keeping your money in the bank, purchasing stock in a company or investing in bonds. But just how much and what to look for? Although those questions will be answered differently by individual investors, consider the following.

A high interest earning savings account will bring you about a 1% annual return on the amount you keep in the account. Stocks will carve out a sawtooth pattern that you hope will end up higher than you purchased your shares for so that you can sell for a gain. Bonds will remain somewhat less rousing but should stay steady nonetheless. Now, time for real estate. Aside from the four benefits, you will want to identify investment opportunities in markets with strong fundamentals and growth potential. While primary So. Cal markets such as Los Angeles and Orange Counties present better opportunities in the SFR, 2 to 4 unit market, it is important to evaluate the real estate market as a whole and answer this question for yourself: what returns are you looking for? No expert can answer this question for you.

If you are a looking for an introduction to commercial real estate investment, click here to buy my book “The Four Benefits: Commercial Real Estate Investing & You”http://www.blurb.com/bookstore/category/Business

Due Diligence. Done.

2011-02-15T16:23:00.000-08:00

Due Diligence. Done.
By: Nicholas A. Dunlap, CPM

The title should read “Smart”, not “Rich”. Of course, the smart are not always rich and the rich are not always smart. This in response to the Wall Street Journal article headline reading “Rich Investors Trust Bankers More Than Press”. While reporters are writers or journalists, Bankers work in the finance industry and as such have experience with trends and details on an hourly, daily, weekly, yearly basis from a hands-on perspective. The press on the other hand, simply writes about these trends and documents them from an armchair quarterback’s point of view. Ask yourself: would you ask a writer to help you diversify your investment portfolio? Probably not.

Key here is the fact that investors are looking to professionals for counsel, as opposed to doing their own research. This is astonishing on many levels, specifically given the fiscal performance of the stock market and the performance of most mutual funds going back 5 to 10 years. People are not looking to do their own research, they want a professional to locate, identify and present them with an opportunity. While I can understand the need for convenience, I do not understand the lack of self-educating.

Read, study and then read and study more. It is imperative that investors educate themselves on trends and processes relative to the investments they make from the management strategies to the operational platform of the investment vehicle. Due diligence is necessary whether you are investing in Stocks, Bonds or Real Estate.

Read the original article here: http://blogs.wsj.com/wealth/2011/02/15/rich-investors-trust-bankers-more-than-the-press/#

When Investing, It’s Better to Waste Your Time Than Waste Your Money

2011-02-11T20:41:00.000-08:00

When Investing, It’s Better to Waste Your Time Than Waste Your Money By: Nicholas A. Dunlap, CPM

Underwriting a potential investment takes time, attention to detail, research and expertise. With that, we look at two potential investment opportunities available: one in Texas, the other in Southern California. Essentially it takes the same amount of work to build each cash flow model, evaluate and compare the analysis, and yet we arrive at two drastically different outcomes. Reason being: the old adage, tired as it might be, is true. In Real Estate, it’s about location, location, location.

However, location doesn’t necessarily guarantee you a greater return on your money. Sometimes, you put $1.7 million dollars down on an apartment building and earn 0.7% on your investment. Yeah, that makes great sense. Cough up close to $2 million dollars to earn 0.7%. If this appeals to you, be advised, you have more money than brains. And while you’re at it, take a look at the bridge for sale in Brooklyn.

Back to my point, and that is: why do it? Any decent bank can beat that with a Money Market or Interest Earning Savings Account at a whopping 1%. So what to do? Don’t look in Southern California. Look to invest in emerging markets with strong fundamentals. Invest in bourgeoning areas like Phoenix, Las Vegas & Dallas. With the exception of Dallas, properties in these areas soared almost overnight in value and then deflated even quicker. Now, with attractive pricing, many of these same properties are being placed back in play, ripe for the picking. Of course, Texas did much better over the past decade than either of the other areas mentioned. In fact, we are looking at a potential acquisition right now in Texas with a guaranteed 8% Cash on Cash Return and short term potential to increase cash flow another 5-8% on top of that.

8% on your money? Can your bank top that? Can your mutual fund? The answer is no to both. The idea behind investing is to put your money to work for you. Therefore, you want to place it wisely and generate the greatest possible return for yourself. Investing in an asset class like Real Estate that requires more activity should generate greater returns. It's commonsensical: more work, more risk, greater reward.

Do your homework and position yourself to succeed in today’s market. As you look around and see nobody else is buying, you know you are doing something right.

From "Extend & Pretend" to "Re-fi & Buy"

2011-02-10T09:14:00.000-08:00

From “Extend & Pretend” to “Re-fi & Buy”
By: Nicholas A. Dunlap, CPM

If late 2009 through 2010 marked the “Extend & Pretend” era of commercial real estate financing, then 2011 marks the dawning of a new era. As I see it, 2011 marks the beginning of the “Re-fi & Buy” era of commercial real estate. Veteran CRE owners and operators are utilizing low interest rates and equity buildup to acquire additional properties (at significant discounts), while locking in low rate, long term financing both on the acquisition and debt repositioning side of the transaction.

Not only do favorable rates help generate competition amongst investors in terms of price, financing and escrow terms, it further decreases the already minimal response time to acquire discounted assets in select primary markets. Align yourself with astute, like-minded investors to maximize your returns.

Scenario:

Currently, 10 year rates are in the 5.85% range. Say you own a 16 unit building in Orange that you bought for $100K per door in 1998. All two bedrooms with garages, today that property is worth approximately $160K per door. Based on the purchase/market price, that is almost $1,000,000 in untapped equity. Barring any necessary capital improvement projects and assuming a solid in-place cash flow, you can pull out equity to acquire additional investments and still cash flow.

If this is you, we should talk!

I can help you increase your portfolio to include pride of ownership, positive cash flow group real estate investments. Email me at: ndunlap@dpgre.com .

Or, if you are a looking for an introduction to commercial real estate investment, click here to buy my book “The Four Benefits: Commercial Real Estate Investing & You” http://www.blurb.com/bookstore/category/Business

The Seven for 2011

2011-02-03T09:28:00.000-08:00

The following text is taken from an article I wrote for both Apartment News Magazine February 2011 & the forthcoming Institute of Real Estate Management Los Angeles Digital Magazine-1st Quarter 2011. Continue reading below...

The Seven For 2011
By: Nicholas A. Dunlap, CPM

2011 is upon us and for property owners, it’s back to business as usual. As symptoms of the recession continue to taper off, owner/operators of multifamily housing will realize the opportunity to restore order or income to their bottom line. Part of restoring this order will require an active, hands on approach to both the asset and property sides of management. Doing so will not only prove profitable, but help to streamline operations as well. While we certainly need job growth to succeed, fears of a double-dip recession have subsided in most economic outlooks. Consider the following seven points as the “Seven for 2011”. Seven things for you to do in 2011 to ensure your continued success in the ownership and management of your income property.

Re-finance- With record low rates and great terms, now is an excellent opportunity to reposition the debt on your property. Lock in low rates for the longterm and improve your cash flow instantly.

Increase Rents- That’s right, it’s time to increase your market rents and consider raising those who moved in with move-in specials. Also, it is important to understand where you fit within your marketplace. If you are the only one still using concessions or specials to bring in prospective tenants, you may want to consider abandoning your strategy.

Create Ancillary Income- Pursue and establish partnerships with third-party service and utility providers to generate up front bonuses as well as residual income on an ongoing basis. Laundry companies have done this for years, but you will be amazed when you see what Cable, Telephone, Internet, Renter’s Insurance and other such service providers can offer. Depending on the size of your properties, you may want to consider Vending Machines as well.

Exhaust Your Freesources (Free Resources)- Monitor your advertising expenses and ask yourself “Are my paid ads truly attracting qualified prospects who ultimately lease?” In conducting a similar audit, we found that Craigslist had generated over 75% of our leases, with the other 25% coming from resident referral and walkup or drive by traffic. Our prospects were not coming from paid advertising.

Streamline Your Operations- Credit cards, online rent payment and application process, bookkeeping technologies; now is the time to modernize. Speed up processes, free up resources and become more efficient. What you spend on materials, you will recuperate in labor over time.

Invest & Expand- Whether acquiring a property on your own or participating with likeminded investors in a private-placement syndication, do not miss this opportunity to buy. There may not be great financial returns available in Southern California, but broadening your horizons and partnering with others to invest out of state yields tremendous potential. 10% immediate cash flow is available in select, primary Southwestern US markets.

Sell the Dog- Not Fido of course, but the figurative “dog” of your portfolio. You know, the underperforming, lackluster play that never quite performed how you wanted it to. With interest rates low and capitalization rates declining, adjust your expectations and call your Broker. Well-priced assets are generating multiple offers in most cases as there is pent-up demand to own multi-family property in Southern California.

Whether you choose to do one, none or all of the aforementioned items is entirely your decision. Certainly you will agree that it is important to implement the “smarter, not harder” philosophy when managing your property or portfolio. Having emerged from one of the most bleak fiscal periods our Country has known, consider today the best day in recent years to make an active attempt to make your life easier. Why not make yourself more money while you are at it?

Just What Is That Rate Increase Comprised Of?

2011-01-15T09:44:00.000-08:00

Just What Is That Rate Increase Comprised Of?

By: Nicholas A. Dunlap, CPM

It's a question we have learned to ask in recent years. Public agencies or committees, their boards and decision-makers voting to increase rates exponentially in order to increase their pensions and benefits. In turn, they lobby politicians to support their cause or group instead of another's. Today's Orange County Register brought to light some of the expenses that the members of our local Water Board are claiming. There are a number of inflated expenses, ranging from Travel to Lodging to Meals to Entertainment.

Is there not a checks and balances system in place? How do these dishonest crooks continuously take advantage of the public they are elected to serve?

At a point in time when we are looking at rate increases of 66% over three years in the City of Orange, it is good to know just why our rates are on the rise. For those of us who do not serve on Public Boards or Committees at least we can find comfort with ourselves as we prepare our 2010 year end income/expense information for income tax purposes. After all, we pay our own way.

View the article & the numbers here: http://taxdollars.ocregister.com/2011/01/14/water-board-members-rack-up-400000-in-expenses/72660/

Stocks & Bonds Vs. Real Estate

2011-01-13T09:10:00.001-08:00

Stocks & Bonds Vs. Real Estate
By: Nicholas A. Dunlap, CPM

Stock & Bond guys love to dog Real Estate. They see it as non-liquid and labor intensive. They see it as one headache after another, from roof leaks to angry tenants. What’s more, they lack the expertise to locate, identify and acquire real estate investments. In some ways, it’s like the Freeway Series in Los Angeles, the Subway Series in New York or the Battle of the Bay in Northern California. Rival investment counselors battling for capital. While most articles or interviews will feature a Stockbroker discussing why rather than purchase a rental house or condominium, an investor should purchase shares of multiple companies in order to diversify, these figures of comparison are irrelevant with the exception being that both are investment vehicles.

Sure, allocating equity to invest in shares of stock that require no decision making or maintenance can be seen as preferable over time to investing in a labor intensive project that can sometimes feel like a second job. However, Stock Brokers are not telling you the whole truth and are deliberately excluding the more potent investment vehicle. That investment vehicle is the lost art of private placement syndication. Yes, the group acquisition of commercial real estate or pooling of equity with likeminded investors to acquire a larger asset producing greater income.

I am working on an article to for the Wall Street Journal that will summarize the 12 round prizefight between the two investment vehicles and clearly crown the real estate investment partnership the champion. Stay tuned…

Chasing My Tale Thanks to Chase Bank

2011-01-10T16:48:00.000-08:00

Chasing My Tail Thanks to Chase Bank
By: Nicholas A. Dunlap, CPM

Throughout the 90s on until 2008 when it became Chase, Washington Mutual or WAMU was a great source of financing for both residential and commercial properties. Service was good, selection varied and loan costs were inexpensive. Now, in their somewhat recent merge with Chase which is in actuality Bank One using the JPMorgan Chase name by merger, service has plummeted and business practices have deteriorated.

We have entered an age where obtaining a HELOC (home equity line of credit) takes 2.5 months and multiple batches of paperwork. Not to mention, the more stringent and seemingly asinine requirements put forth by their commercial lending department and their misguided team of experts who survey properties and cite items for repair (that they deem necessary) when in reality they are no more qualified for their position than an elementary school crossing guard.

Convenience and service that was previously sought and received through the large institution no longer exists. For that, we now go through the boutique outfit: Farmer’s & Merchant’s Bank. F&M is a local, conservative financial institution that knows us and takes care of us, which leads me to my point. Shouldn’t we expect more from one of the big four? Bank of America, Wells Fargo and Citibank are not much better in terms of Business Banking, lending I cannot speak for.

Some of us look for service, convenience and expertise, not for iphone apps. In previous blogs I have discussed the decline in service from our Public or Civil Sector, but in recent experiences with Chase Bank’s Commercial & Residential lending departments, it is apparent that they are not far behind.

Why the Estate Tax Sucks

2011-01-06T09:14:00.000-08:00

Why the Estate Tax Sucks
By: Nicholas A. Dunlap, CPM

If you think it’s bad now, just wait until 2013. When Obama signed H.R. 4853 last month, he agreed to increase the Estate Tax from 0 to 35% in less than two years on individuals with an estate value of $5 million and couples with an estate value of $10 million. When you hear the next part, you will think the first bit was generous. In 2013, the estate tax will automatically increase to 55% on estates with assets totaling just $1 million dollars.

So what is the estate tax? The estate tax is the tax imposed on the transfer of the estate of a deceased person. Of course, it’s much more correct to use the term “estate tax” than “death tax” which tends to describe more accurately what the tax is. Someone dies, leaves property to relatives and grieving relatives get hosed by the tax man.

The numbers are astonishing. Over 170,000 households, 29,000 privately held corporations, 22,000 farms & 14,000 real estate investment partnerships will be subject to the tax in 2011 alone. Based on today’s numbers, over 50% of all households in the United States will be subject to the estate tax by 2048, which is when today’s twenty somethings are of retirement age.

The best estate tax? No estate tax.

*Please read the report here: http://www.nodeathtax.org/uploads/view/2325/cost_of_compromise.pdf

Coming Soon...The Four Benefits!

2011-01-05T08:27:00.000-08:00

After a lot of coffee, hard work and dedication, my book is almost done. I am putting the finishing touches on it and should have it fully edited, revised and published by the end of the month. I am going to sell it out of my trunk, in the office and through my blog at http://www.nicholasdunlap.com/ . More to come soon. In the meantime, check out the cover and the copy that is currently being edited.

A Word on Redevelopment

2011-01-04T14:07:00.000-08:00

A Word on Redvelopment
By: Nicholas A. Dunlap, CPM

Redevelopment has helped keep cities thriving and local economies churning for decades. Through recognizing and understanding the fundamentals of a neighborhood, local CRA or Community Redevelopment Agencies have helped bring new life to blocks, neighborhoods and communities that have become blighted or forgotten over time. A partnership is created through the bond of the public’s needs & wants represented by the CRA and the financial interest & vision of a private entity. CRA has worked beautifully in Downtown Fullerton, Santa Monica, Old Town Brea, Hollywood, parts of Anaheim and Costa Mesa.

Redevelopment is an imperative part of local growth and forward movement. Completed redevelopment projects bring in additional sales and property tax revenue for the cities and even districts that specific properties operate in. All this and for some reason, Jerry Brown has stated he intends to eliminate Community Redevelopment Agencies statewide and use the money for Schools and Counties in need. In November, California voted to pass Proposition 22 to ensure that control over local funds remained at the local level. His attempt to cut the budget includes massive cuts to important offices such as the CRA.

Someone needs to remind Jerry that if it weren’t for CRA in Sacramento, he would not be able to live in his trendy loft and might have to live in a place as unkempt as the Governor’s Mansion.

Ripe For the Picking

2011-01-03T15:05:00.000-08:00

Ripe For The Picking

By: Nicholas A. Dunlap, CPM

A new year brings new resolutions both in our personal and professional lives and something about 2011 just feels better. The way our economy has been functioning of late, the generally upbeat and optimistic consumer outlook and the fact jobs are being added to the marketplace signify that we are starting off on the right foot for the first time in recent years. And although things are not perfect, we at least know that we are headed in the right direction.

While it might not be the case in California, economic growth is occurring elsewhere in the Southwest Region. For those with equity to deploy, now is an excellent time to capitalize on the opportunities in the SFR to 2, 3 or 4-plex market in the Southern California area where there is still an excess of lender owned assets available at significant discounts. For those looking for greater returns through group investments or equity partnerships, Arizona, Texas and Nevada have become ripe for the picking.

To read some of the great news out of Texas, click here: http://www.tcjl.com/blog/texas-projected-to-lead-nation-in-economic-growth

2011: Is It Getting Better?

2010-12-28T09:31:00.000-08:00

2011: Is It Getting Better? My Answer to The National Apartment Association's Question
By: Nicholas A. Dunlap, CPM

Whether you are an investor, owner/operator, manager or broker, the 2011 forecast for the apartment industry is something to smile about. Depending on your market, property values are likely trending upward toward more attractive sales prices, interest rates have decreased and held steady & both new and old players alike are abound in the marketplace creating a surge in energy we have not seen in years. Consider the aforementioned along with the fact that rents are increasing, move-in specials disappearing and we have the perfect climate for investment and expansion. The better question for 2011 is not is it getting better, but how much better will it get?

An Investor's Thoughts On the Census

2010-12-21T18:04:00.000-08:00

An Investor's Thoughts On the Census
By: Nicholas A. Dunlap, CPM

Property owners should marvel over the recently released 2010 US Census data. The United States now has over 308,745,538 residents. Additionally, the South and West were the strongest geographical areas in terms of overall percentage growth at 14.3% and 13.8% since 2000. Texas has grown 20.4% since 2000. California has grown 10% in the same time. Arizona and Nevada were also strong at 24% & 35% respectively, although they have trended downward from previous highs in recent years. The data can be viewed and interpreted here: http://2010.census.gov/2010census/data/.

With the strong population growth in the Southwest, investors should next look to the local markets that have added or will add the most jobs in the short-term. While this information was not monitored by the Census, I discussed this in my December 14th blog here: Property Lines: The Texas Two Step Texas is especially looking to attract California businesses. Additionally, Texas' statewide unemployment rate is projected to drop from near 8% to 6% by the end of 2011, with market-specific unemployment rates lower in select primary markets.

If you are considering investing in commercial real estate or expanding your investment portfolio to include positive cash flow, tax sheltered investments, please contact me directly at: ndunlap@dpgre.com to discuss how we can make your new year a fruitful one.

The Age of Value

2010-12-17T10:14:00.000-08:00

The Age of Value
By: Nicholas A. Dunlap, CPM

As perplexing as it may seem, it took the multifamily industry a great while to adapt to the ways of the American consumer. It was as if landlords felt that their product was different than other commodities that are purchased and sold. Although housing provides warmth, comfort and a privacy non-existent in many other items available for purchase, the physical, mental and emotional acts of buying and selling are identical whether you are looking for the best move-in special or the slickest flat screen television you can find.

Americans want value. With the recession behind us, current retail sales statistics show us that Americans are again spending money on high-end, big ticket items that they perceive to represent value. We are now in the age of value. Smart landlords are playing to the retail consumer in everyone.

View some of the recent sales data here: http://mashable.com/2010/11/27/black-friday-retail/

The Texas Two Step

2010-12-14T08:44:00.001-08:00

The Texas Two-Step
By: Nicholas A. Dunlap, CPM

Disgruntled public employees in California must love the headline in today’s Orange County Register. Often behind the times and trends of Business and Real Estate, the Register today proclaimed that Texas has begun to “Lasso California Businesses”. Essentially what the state of Texas has begun to do is send out invitational letters to businesses encouraging them to explore the pro-business climate that Texas has to offer. Yes, public employees and civil servants, that means that the tax dollars and activity that pays your salary is leaving this unionized, California king-sized pension mess of a state and heading southwest. There’s a lot to be said about a balanced budget, no state income tax and the fact that are actually thousands of jobs being added each month. Current and future population and job growth is paramount to commercial real estate investors who are looking for returns unsatisfied in primary California markets.

UCLA’s Anderson School of Business announced last week although Texas might have the appeal, California performed better than much of the nation this year, seeing a 2.7% rise in personal income and projecting a 3% increase next year. And while California’s unemployment levels are projected to drop from 10.9% to around or under 10%, over 5 million jobs in the construction, manufacturing and retail industries that were lost are unlikely to return. For those keeping score at home. Texas unemployment rate is 7.9% and is projected to drop to 6% by late 2011 due to the number of technology, manufacturing and engineering jobs being added.

To read the Register’s bit on Texas, click here:
http://jan.ocregister.com/2010/12/14/texas-trying-to-lasso-calif-businesses/51006/

To read the statistics from UCLA Anderson’s Release, click here:
http://www.latimes.com/business/la-fi-1207-econ-forecast-20101207,0,226435.story

The Blind Side

2010-12-13T09:01:00.000-08:00

The Blind Side
By: Nicholas A. Dunlap, CPM

Clinton had 35%, Bush and Reagan over 50%, now at just 10%, Barack Obama has become the US President with the least private sector experience in his cabinet since JFK had 28% in 1963. Clearly, these significant differences also illustrate the growing ineptitude of the Government towards fiscal and economic policies relating to businesses both big and small. California will soon realize a similar crisis at the State level with Jerry Brown at the helm. In order for both Jerry and Barack to proceed with the handouts, they must first maintain and promote an environment conducive to business. Yes, this means tax breaks and credits. Yes, this means alluring and enticing businesses to house and operate their daily operations within a specific geographic area on a local or national basis.

Review the stats here: http://washingtonexaminer.com/blogs/beltway-confidential/less-10-percent-obama-cabinet-has-private-sector-experience

When Obama Gives You Lemons, Make Lemonade

2010-12-10T10:07:00.000-08:00

When Obama Gives You Lemons, Make Lemonade
By: Nicholas A. Dunlap, CPM

Newspaper headlines can almost be read as sarcastic when they proclaim that mortgage rates have reached 6 month highs at a whopping 4.87%. However, the slight increase represents a .5% bump in just two weeks. While the Federal Reserve appears to understand the dire straits of our country’s economic climate, it is imperative they continue to act accordingly. In this case, the appropriate response is to, in the words of John Lennon: “let it be”. Leave rates low, make permanent the first-time homebuyer tax credits and keep Obama’s meddling in financial policy to a minimum. Yes, this also means continuing to allow the deduction of Mortgage Interest for homeowners/taxpayers. Nightmarish headlines in the Washington Post announced that the need to cut the deficit will “transform home financing”. That’s great, isn’t it?

So while I am certainly not panicked, I think that if you have recently tested the waters and considered refinancing or repositioning the debt on your property, now would be a good time to lock in attractive rates for the long-term. And while you’re at it, take some of that equity and put it back into some of the better-performing product types and marketplaces. There are great values out there. Transactions equal activity in the marketplace which equals jobs, growth and expansion. It’s an easy cycle to follow. Keep things churning!

The Hollywood Farmer's Market Fiasco

2010-12-08T08:38:00.001-08:00

The Hollywood Farmer's Market Fiasco (From a Property Owner's Point of View)By: Nicholas A. Dunlap, CPM

I love a farmer's market as much as the next guy. In fact, I frequent the two here in Fullerton and try to support the small businesses who participate in these weekly events as much as possible. But what right do a City and it's residents have to restrict a property owner access to his/her property simply because they have been allowed to for nearly 20 years? I would hope you'll answer none, but that's not the case if you have been following what is going on in Hollywood.

The City of Los Angeles and the hundreds of people who have begun to protest the private property owner's rights to access their property during a certain time so that the Farmer's Market can continue to be held in the same location feel that the property owner (in this case a Film School) should not have the right to relinquish the courtesy that had been extended to the public for nearly two decades.

Hopefully the City of Los Angeles will realize that while it is the public who enjoys the event, it is the private property owner and his/her taxes and fees that foot the bill for the public services that allow these events to go on. The Market will go on, but hopefully in a different location and not at the expense of the property owner.

The Real Reason California is Broke

2010-11-19T15:41:00.001-08:00

The Real Reason California is Broke
By: Nicholas A. Dunlap, CPM

I received this by way of email and do not know who to give credit to for compiling a list of State Run agencies in California. I found it too good to not share.

The Reason California is and will remain broke...

California Academic Performance Index (API) * California Access for Infants and Mothers * California Acupuncture Board * California Administrative Office of the Courts * California Adoptions Branch * California African American Museum * California Agricultural Export Program * California Agricultural Labor Relations Board * California Agricultural Statistics Service * California Air Resources Board (CARB) * California Allocation Board * California Alternative Energy and Advanced Transportation Financing Authority * California Animal Health and Food Safety Services * California Anti-Terrorism Information Center * California Apprenticeship Council * California Arbitration Certification Program * California Architects Board * California Area VI Developmental Disabilities Board * California Arts Council * California Asian Pacific Islander Legislative Caucus* California Assembly Democratic Caucus * California Assembly Republican Caucus * California Athletic Commission * California Attorney General * California Bay Conservation and Development Commission * California Bay-Delta Authority * California Bay-Delta Office * California Biodiversity Council * California Board for Geologists and Geophysicists * California Board for Professional Engineers and Land Surveyors * California Board of Accountancy * California Board of Barbering and Cosmetology * California Board of Behavioral Sciences * California Board of Chiropractic Examiners * California Board of Equalization (BOE) * California Board of Forestry and Fire Protection * California Board of Guide Dogs for the Blind * California Board of Occupational Therapy * California Board of Optometry * California Board of Pharmacy * California Board of Podiatric Medicine * California Board of Prison Terms * California Board of Psychology * California Board of Registered Nursing * California Board of Trustees * California Board of Vocational Nursing and Psychiatric Technicians * California Braille and Talking Book Library * California Building Standards Commission *California Bureau for Private Postsecondary and Vocational Education * California Bureau of Automotive Repair * California Bureau of Electronic and Appliance Repair * California Bureau of Home Furnishings and Thermal Insulation * California Bureau of Naturopathic Medicine * California Bureau of Security and Investigative Services * California Bureau of State Audits * California Business Agency * California Business Investment Services (CalBIS) * California Business Permit Information (CalGOLD) * California Business Portal * California Business, Transportation and Housing Agency * California Cal Grants * California CalJOBS * California Cal-Learn Program * California CalVet Home Loan Program * California Career Resource Network * California Cemetery and Funeral Bureau * California Center for Analytical Chemistry * California Center for Distributed Learning * California Center for Teaching Careers (Teach California) * California Chancellors Office * California Charter Schools * California Children and Families Commission * California Children and Family Services Division * California Citizens Compensation Commission * California Civil Rights Bureau * California Coastal Commission * California Coastal Conservancy * California Code of Regulations * California Collaborative Projects with UC Davis * California Commission for Jobs and Economic Growth * California Commission on Aging * California Commission on Health and Safety and Workers Compensation * California Commission on Judicial Performance * California Commission on State Mandates * California Commission on Status of Women * California Commission on Teacher Credentialing * California Commission on the Status of Women * California Committee on Dental Auxiliaries * California Community Colleges Chancellors Office, Junior Colleges * California Community Colleges Chancellors Office * California Complaint Mediation Program * California Conservation Corps * California Constitution Revision Commission * California Consumer Hotline * California Consumer Information Center * California Consumer Information * California Consumer Services Division * California Consumers and Families Agency * California Contractors State License Board * California Corrections Standards Authority * California Council for the Humanities * California Council on Criminal Justice * California Council on Developmental Disabilities * California Court Reporters Board * California Courts of Appeal * California Crime and Violence Prevention Center * California Criminal Justice Statistics Center * California Criminalist Institute Forensic Library * California CSGnet Network Management * California Cultural and Historical Endowment * California Cultural Resources Division * California Curriculum and Instructional Leadership Branch * California Data Exchange Center * California Data Management Division * California Debt and Investment Advisory Commission * California Delta Protection Commission * California Democratic Caucus * California Demographic Research Unit * California Dental Auxiliaries * California Department of Aging * California Department of Alcohol and Drug Programs * California Department of Alcoholic Beverage Control Appeals Board * California Department of Alcoholic Beverage Control * California Department of Boating and Waterways (Cal Boating) * California Department of Child Support Services (CDCSS) * California Department of Community Services and Development * California Department of Conservation * California Department of Consumer Affairs * California Department of Corporations * California Department of Corrections and Rehabilitation * California Department of Developmental Services * California Department of Education * California Department of Fair Employment and Housing * California Department of Finance * California Department of Financial Institutions * California Department of Fish and Game * California Department of Food and Agriculture * California Department of Forestry and Fire Protection (CDF) * California Department of General Services * California Department of General Services, Office of State Publishing * California Department of Health Care Services * California Department of Housing and Community Development * California Department of Industrial Relations (DIR) * California Department of Insurance * California Department of Justice Firearms Division * California Department of Justice Opinion Unit * California Department of Justice, Consumer Information, Public Inquiry Unit * California Department of Justice * California Department of Managed Health Care * California Department of Mental Health * California Department of Motor Vehicles (DMV) * California Department of Personnel Administration * California Department of Pesticide Regulation * California Department of Public Health * California Department of Real Estate * California Department of Rehabilitation * California Department of Social Services Adoptions Branch * California Department of Social Services * California Department of Technology Services Training Center (DTSTC) * California Department of Technology Services (DTS) * California Department of Toxic Substances Control * California Department of Transportation (Caltrans) * California Department of Veterans Affairs (CalVets) * California Department of Water Resources * California Departmento de Vehiculos Motorizados * California Digital Library * California Disabled Veteran Business Enterprise Certification Program * California Division of Apprenticeship Standards * California Division of Codes and Standards * California Division of Communicable Disease Control * California Division of Engineering * California Division of Environmental and Occupational Disease Control * California Division of Gambling Control * California Division of Housing Policy Development * California Division of Labor Standards Enforcement * California Division of Labor Statistics and Research * California Division of Land and Right of Way * California Division of Land Resource Protection * California Division of Law Enforcement General Library * California Division of Measurement Standards * California Division of Mines and Geology * California Division of Occupational Safety and Health (Cal/OSHA) * California Division of Oil, Gas and Geothermal Resources * California Division of Planning and Local Assistance * California Division of Recycling * California Division of Safety of Dams * California Division of the State Architect * California Division of Tourism * California Division of Workers Compensation Medical Unit * California Division of Workers Compensation * California Economic Assistance, Business and Community Resources * California Economic Strategy Panel * California Education and Training Agency * California Education Audit Appeals Panel * California Educational Facilities Authority * California Elections Division * California Electricity Oversight Board * California Emergency Management Agency * California Emergency Medical Services Authority * California Employment Development Department (EDD) * California Employment Information State Jobs * California Employment Training Panel * California Energy Commission * California Environment and Natural Resources Agency * California Environmental Protection Agency (Cal/EPA) * California Environmental Resources Evaluation System (CERES) * California Executive Office * California Export Laboratory Services * California Exposition and State Fair (Cal Expo) * California Fair Political Practices Commission * California Fairs and Expositions Division * California Film Commission * California Fire and Resource Assessment Program * California Firearms Division * California Fiscal Services * California Fish and Game Commission * California Fisheries Program Branch * California Floodplain Management * California Foster Youth Help * California Franchise Tax Board (FTB) * California Fraud Division * California Gambling Control Commission * California Geographic Information Systems Council (GIS) * California Geological Survey * California Government Claims and Victim Compensation Board * California Governors Committee for Employment of Disabled Persons *California Governors Mentoring Partnership * California Governors Office of Emergency Services * California Governors Office of Homeland Security * California Governors Office of Planning and Research * California Governors Office * California Grant and Enterprise Zone Programs HCD Loan * California Health and Human Services Agency * California Health and Safety Agency * California Healthy Families Program * California Hearing Aid Dispensers Bureau * California High-Speed Rail Authority * California Highway Patrol (CHP) *California History and Culture Agency * California Horse Racing Board * California Housing Finance Agency * California Indoor Air Quality Program * California Industrial Development Financing Advisory Commission * California Industrial Welfare Commission * California InFoPeople * California Information Center for the Environment * California Infrastructure and Economic Development Bank (I-Bank) * California Inspection Services * California Institute for County Government * California Institute for Education Reform * California Integrated Waste Management Board * California Interagency Ecological Program * California Job Service *California Junta Estatal de Personal * California Labor and Employment Agency * California Labor and Workforce Development Agency * California Labor Market Information Division * California Land Use Planning Information Network (LUPIN) * California Lands Commission * California Landscape Architects Technical Committee * California Latino Legislative Caucus * California Law Enforcement Branch * California Law Enforcement General Library * California Law Revision Commission * California Legislative Analyst's Office *California Legislative Black Caucus * California Legislative Counsel * California Legislative Division * California Legislative Information * California Legislative Lesbian, Gay, Bisexual, and Transgender (LGBT) Caucus * California Legislature Internet Caucus * California Library De velopment Services * California License and Revenue Branch * California Major Risk Medical Insurance Program * California Managed Risk Medical Insurance Board * California Maritime Academy * California Marketing Services * California Measurement Standards * California Medical Assistance Commission * California Medical Care Services * California Military Department * California Mining and Geology Board * California Museum for History, Women, and the Arts * California Museum Resource Center * California National Guard * California Native American Heritage Commission * California Natural Community Conservation Planning Program * California New Motor Vehicle Board * California Nursing Home Administrator Program * California Occupational Safety and Health Appeals Board * California Occupational Safety and Health Standards Board * California Ocean Resources Management Program * California Office of Administrative Hearings * California Office of Administrative Law * California Office of AIDS * California Office of Binational Border Health * California Office of Child Abuse Prevention * California Office of Deaf Access * California Office of Emergency Services (OES) * California Office of Environmental Health Hazard Assessment * California Office of Fiscal Services * California Office of Fleet Administration * California Office of Health Insurance Portability and Accountability Act (HIPAA) Implementation (CalOHI) * California Office of Historic Preservation * California Office of Homeland Security * California Office of Human Resources * California Office of Legal Services * California Office of Legislation * California Office of Lieutenant Governor * California Office of Military and Aerospace Support * California Office of Mine Reclamation * California Office of Natural Resource Education * California Office of Privacy Protection * California Office of Public School Construction * California Office of Real Estate Appraisers * California Office of Risk and Insurance Management * California Office of Services to the Blind * California Office of Spill Prevention and Response * California Office of State Publishing (OSP) * California Office of Statewide Health Planning and Development * California Office of Systems Integration * California Office of the Inspector General * California Office of the Ombudsman * California Office of the Patient Advocate * California Office of the President * California Office of the Secretary for Education * California Office of the State Fire Marshal * California Office of the State Public Defender * California Office of Traffic Safety * California Office of Vital Records * California Online Directory * California Operations Control Office * California Opinion Unit * California Outreach and Technical Assistance Network (OTAN) * California Park and Recreation Commission * California Peace Officer Standards and Training (POST) * California Performance Review (CPR) * California Permit Information for Business (CalGOLD) * California Physical Therapy Board * California Physician Assistant Committee * California Plant Health and Pest Prevention Services * California Policy and Evaluation Division *California Political Reform Division * California Pollution Control Financing Authority * California Polytechnic State University, San Luis Obispo * California Postsecondary Education Commission * California Prevention Services * California Primary Care and Family Health * California Prison Industry Authority * California Procurement Division * California Public Employees Retirement System (CalPERS) * California Public Employment Relations Board (PERB) * California Public Utilities Commission (PUC) * California Real Estate Services Division * California Refugee Programs Branch * California Regional Water Quality Control Boards * California Registered Veterinary Technician Committee * California Registrar of Charitable Trusts * California Republican Caucus * California Research and Development Division * California Research Bureau * California Resources Agency * California Respiratory Care Board * California Rivers Assessment * California Rural Health Policy Council * California Safe Schools * California San Francisco Bay Conservation and Development Commission * California San Gabriel and Lower Los Angeles Rivers and Mountains Conservancy * California San Joaquin River Conservancy * California School to Career * California Science Center * California Scripps Institution of Oceanography * California Secretary of State Business Portal * California Secretary of State * California Seismic Safety Commission * California Self Insurance Plans (SIP) * California Senate Office of Research * California Small Business and Disabled Veteran Business Enterprise Certification Program * California Small Business Development Center Program * California Smart Growth Caucus * California Smog Check Information Center * California Spatial Information Library * California Special Education Division *California Speech-Language Pathology and Audiology Board * California Standardized Testing and Reporting (STAR) * California Standards and Assessment Division * California State Administrative Manual (SAM) * California State Allocation Board * California State and Consumer Services Agency * California State Architect * California State Archives * California State Assembly * California State Association of Counties (CSAC) * California State Board of Education * California State Board of Food and Agriculture *California Office of the Chief Information Officer (OCIO) * California State Children's Trust Fund * California State Compensation Insurance Fund * California State Contracts Register Program * California State Contracts Register * California State Controller * California State Council on Developmental Disabilities (SCDD) * California State Disability Insurance (SDI) * California State Fair (Cal Expo) * California State Jobs Employment Information * California State Lands Commission * California State Legislative Portal * California State Legislature * California State Library Catalog * California State Library Services Bureau * California State Library * California State Lottery * California State Mediation and Conciliation Service * California State Mining and Geology Board * California State Park and Recreation Commission * California State Parks * California State Personnel Board * California State Polytechnic University, Pomona * California State Railroad Museum * California State Science Fair * California State Senate * California State Summer School for Mathematics and Science (COSMOS) *California State Summer School for the Arts * California State Superintendent of Public Instruction * California State Teachers Retirement System (CalSTRS) * California State Treasurer * California State University Center for Distributed Learning * California State University, Bakersfield * California State University, Channel Islands * California State University, Chico * California State University, Dominguez Hills * California State University, East Bay * California State University, Fresno * California State University, Fullerton * California State University, Long Beach * California State University, Los Angeles * California State University, Monterey Bay * California State University, Northridge * California State University, Sacramento * California State University, San Bernardino * California State University, San Marcos * California State University, Stanislaus * California State University (CSU) * California State Water Project Analysis Office * California State Water Project * California State Water Resources Control Board * California Structural Pest Control Board * California Student Aid Commission * California Superintendent of Public Instruction * California Superior Courts * California Tahoe Conservancy * California Task Force on Culturally and Linguistically Competent Physicians and Dentists * California Tax Information Center * California Technology and Administration Branch Finance * California Telecommunications Division * California Telephone Medical Advice Services (TAMS) * California Transportation Commission * California Travel and Transportation Agency * California Unclaimed Property Program * California Unemployment Insurance Appeals Board * California Unemployment Insurance Program *California Uniform Construction Cost Accounting Commission * California Veterans Board * California Veterans Memorial * California Veterinary Medical Board and Registered Veterinary Technician Examining Committee * California Veterinary Medical Board * California Victim Compensation and Government Claims Board * California Volunteers * California Voter Registration * California Water Commission * California Water Environment Association (COWPEA) * California Water Resources Control Board * California Welfare to Work Division * California Wetlands Information System * California Wildlife and Habitat Data Analysis Branch * California Wildlife Conservation Board * California Wildlife Programs Branch * California Work Opportunity and Responsibility to Kids (CalWORKs) * California Workers Compensation Appeals Board * California Workforce and Labor Development Agency * California Workforce Investment Board * California Youth Authority (CYA) * Central Valley Flood Protection Board * Center for California Studies * Colorado River Board of California *Counting California * Dental Board of California * Health Insurance Plan of California (PacAdvantage) * Humboldt State University * Jobs with the State of California * Judicial Council of California * Learn California* Library of California * Lieutenant Governors Commission for One California * Little Hoover Commission (on California State Government Organization and Economy) * Medical Board of California * Medi-Cal * Osteopathic Medical Board of California * Physical Therapy Board of California * Regents of the University of California * San Diego State University * San Francisco State University * San Jose State University * Santa Monica Mountains Conservancy * State Bar of California * Supreme Court of California * Teach California * University of California * University of California, Berkeley * University of California, Davis * University of California, Hastings College of the Law * University of California, Irvine * University of California, Los Angeles * University of California, Merced * University of California, Riverside * University of California, San Diego * University of California, San Francisco * University of California, Santa Barbara * University of California, Santa Cruz * Veterans Home of California

Of course, there are generous pensions that go along with them. Not to mention, 1/3 of all state taxes collected in 2009 will go to the payment of pensions. By 2020 it'll be 2/3rds of all state taxes.

Penalties Disguised as Fees

2010-11-18T08:55:00.000-08:00

Penalties Disguised as Fees
By: Nicholas A. Dunlap, CPM

Good to know we're not alone. Today's HBR Daily Stat pointed out that in Zimbabwe, a start-up company faces penalties (disguised as fees) of up to 500% of the country's annual per capita income. For those comparing at home, the US figure is closer to 0.7%. One can only hope that those fees somehow help expedite things and eliminate the lengthy waiting periods associated with getting anything started or approved in the US.

Help Is On The Way

2010-11-13T07:34:00.000-08:00

Help Is On The Way
By: Nicholas A. Dunlap, CPM

Just two weeks after the election and while our home state of California got rocked, there is sunshine on the horizon with the help of a Republican congress. Even better news is the sign that Democrats are now starting to realize some of the flaws in the dream that is Obamacare. Senate Democrat Max Baucus of Montana announced yesterday that legislation will be introduced to repeal the previous Obamacare requirement that businesses report to the IRS any vendor or service person that they pay more than $600 per year to. Of course, in the Real Estate Management business, this would have been time consuming and costly. To first learn, then obtain and ultimately report to the IRS the amounts we pay the countless vendors we utilize on a consistent basis would have been a nuisance at best.

Originally, this was meant to help the IRS detect business owners who were not paying their fair share of taxes. So, the idea was hatched to impose the burden onto business owners who would then have to, in addition to documenting their own finances, itemize and report to the IRS the costs paid to outside vendors. If that's not a liberal ideal, what is? For us, that would have meant every: accountant, architect, attorney, carpet/flooring installer, contractor, designer, furniture provider, landscaper, painter, plumber, security guard, etc. While there are a number of other items in the Obamacare package that also need revision, the fact that Democrats are now starting to see some of the flaws in their own thought process and belief system is a great sign.

Maybe while they're at it, they can let Barack know that he is no Bill Clinton or Ronald Reagan, contrary to his beliefs.

Different Date, Same Story

2010-10-31T10:08:00.000-07:00

Different Date, Same Story
By: Nicholas A. Dunlap, CPM

Today's register reveals what many in the industry know and have seen for quite sometime: one-time homeowners who have lost their homes through foreclosure or have been forced to sell-short their homes are in need of a place to live. For landlords, this relatively new class of renter, a "born-again" renter if you will, has been increasingly prevalent in the marketplace over the past 3 years. Essentially, these renters are a godsend for landlords who had previously experienced increased vacancy levels and heightened expenses as a result of job losses and brief forays into homeownership.

Having gone through a foreclosure, it is important to understand that their credit will most likely be shot. With that, it is important to consider not just the FICO score, but their history of paid vs. unpaid accounts and good vs. bad accounts. Unlike some of the more traditional credit criminals or walking wounded who apply, the born-again renter is looking to improve their credit and own again in the future.

What struck me as odd about this article is that it is relatively old news. In fact, I blogged about this trend in March of 2009 here: Property Lines: Ushering In A New Wave of Renters

You can read the OC Register's article here: http://www.ocregister.com/articles/rent-273498-county-apartment.html

And remember, when you want to know something specific and industry related: ask a professional, not the press.

The Dollars & Sense of Social Media

2010-10-06T00:07:00.000-07:00

The Dollars and Sense of Social Media
By: Nicholas A. Dunlap, CPM

Social Media has become an integral part of our daily lives. As friends, family members, consumers or professionals, there is an aspect of Social Media that appeals to each of our interests. At the forefront of these interests is the ability to communicate and connect with others. Viewing photos, understanding the daily (sometimes hourly) happenings of our friends’ lives, finding new places to shop or dine based on peer ratings and reviews, has never been easier, or for that matter more popular.

According to official statistics, Facebook now has over 500 million users worldwide with over 150 million in the United States alone. Twitter has over 190 million users sending 50 million plus Tweets per day, while Youtube has 139 million official users with a video being shown almost every second of the day. Newcomer Foursquare has approximately

3.5 million people checking in daily and Yelp receives over 31 million unique views each month. While you might be more aware of Social Media giants such as Facebook, Youtube and Twitter, Yelp and Foursquare might very well be the future of your Social Media platform.

While all five of these sites can potentially work wonders for your business, absent the right message or the right campaign, Social Media is nothing more than a waste of time.

Consider the 3 Cs of Social Media Marketing when developing your campaign.

1. Content- In addition to property/unit photos, pricing and specials, exclusive
deals and other such promotional items are demonstrated in a clever, unique
manner that encourages people to continue reading.

2. Creativity- Be creative. This is online advertising and marketing. The people reading these ads or posts are looking to be amused. Social Media viewers look for stimulation and motivation. Lure them to your business.

3. Consistency- Ensure that your Facebook, Twitter, Youtube, Blog, Foursquare, Myspace and other such pages are updated frequently and consistently. With Social Media, more is better.

Knowing the three c’s and the statistics behind these Social Media outlets helps us to better understand their significance. With a cleverly crafted campaign, you can strategically reach the masses. While there is both free and paid advertising available on these sites, there is a growing debate not just amongst the apartment industry but the business industry at large over who should be the voice of a Social Media platform. Of course it is this “who” that incurs the cost.

Rather than create new positions, combining the brand-familiar savvy of a marketing department with the localized personalities within a Leasing office will suffice. Having your Marketing Department create an expansive array of templates that Leasing Agents or Resident Managers can customize to fit their properties will not only save money, but save time as well. Your Marketing Department is the expert in this arena, but the Leasing Office can facilitate the work. Establishing these policies up front can be one of the best ways to ensure the most professional representation in all of your Social Media efforts. Costs will vary based on the personnel involved, but the Social Media outlets themselves offer free advertising.

Having reviewed the statistics, the costs and the personnel involved, let’s now review some additional Social Media sites that will help you maximize your marketing efforts without maximizing your costs. Foursquare is one of the newest and possibly the most beneficial Social Media sites for Property Owners and Managers. Location based, Foursquare offers it’s users the ability to check-in from their smart phone and earn points or win prizes as they compete with friends. When someone checks in at a location, a list of all nearby check-in points appears. Consider waiving the application fee, offering a Starbucks card or even a free rent special for someone who finds you and checks into your Leasing Office on Foursquare.

Using a similar “check-in” format is Yelp! Yelp is a hip and highly interactive, consumer review site where patrons of business publish their own reviews. If you haven’t already, you should check now. Your properties are probably on Yelp. Use it to your advantage. Business owners can establish accounts to market directly to the consumer using specials and promotions.

Advertising in Social Media is the new and the now. Growing your Marketing campaigns to create and manage such Social Media platforms will not only ensure you maximum exposure, but allow you the ability to reach thousands of new prospects based on interest and on location, potentially bringing you qualified leads. But before you prepare for the influx of new leads, be sure you have effectively prepared your advertising to attract them.

Notes From the Debate

2010-09-29T09:03:00.000-07:00

Notes From the Debate
By: Nicholas A. Dunlap, CPM

Union Puppet and Special Interests’ Magnate Jerry Brown is pulling out all the stops in his current campaign for Governor of California. In reality, he is putting all residents, at least those with the hopes for jobs and a more pro-business climate in the near future at risk. Yes, that’s right, good old Governor Moonbeam, back to further batter the California economy. In last night’s debate, he suggested several times that Meg Whitman was not out for the average Californian, but for the Billionaire or Millionaire, a tactic that seems right out of the Obama playbook.

While there are a number of things wrong with the Republican Party’s campaign, most notably their tendency to dabble in Social policies and personal beliefs instead of sticking just to politics, one comes to wonder just how pedestrian Jerry Brown actually is when it comes to fiscal and economic policies. He illustrated to us all what a poor manager he was through the City of Bell scandal. Now, he has tried to position himself as the people’s champ, the one who indicted and charged these individuals with crimes, but in reality as the Attorney General, he was a witness to everything and made no moves until the Los Angeles Times brought the information to him.

Jerry and all the other Democrats in office need to realize that the Billionaires and Millionaires they vilify are the one’s who are employing the masses and creating or in our current climate: cutting jobs. Bolster our economy, keep the money changing hands and let’s get the economy churning again.

When Civil Servants Attack

2010-08-30T14:27:00.000-07:00

When Civil Servants Attack
By: Nicholas A. Dunlap, CPM

You never know when to expect it, possibly because you hope to be proved wrong. And yet the moment you enter the imposing mid-century complexes and approach the counterperson for your appointment, the feeling strikes quick and strikes deep. This is no private, service driven enterprise you find yourself in, not here my friend. This is your tax dollars: miserable at work, festering behind a counter and they’re ready to make your life a living hell.

As opposed to a thriving business where there is a direct correlation between exceptional service and booming profits, most Civil Servants realize or simply embody the opposite: negativity and misguidance equals citizens or residents less likely to return, equals sitting behind a counter doing nothing equals getting paid for nothing. At what point do the Managers or higher-ups at the City get involved with this old, broken model? In our current economy, there is no reason that Civil Servants should not be as sharp or pleasant than their lower paid counterparts from the other side of the counter.

What if cities were forced to implement Car Dealership type service platforms in which they fought to serve the prospective customers the second they entered the complex? Imagine the convenience of having someone run to you, remove the blueprints from your arms, walk you to a counter and show you how to proceed. Wouldn’t you feel so, oh I don’t know, like you could actually see your property taxes working in front of your eyes for a change?

Or maybe the approach isn’t this Car Dealership format, maybe it is that of a successful Carpenter’s model where one is “paid by the piece”. From a management standpoint, wouldn’t it be great if the Civil Servant got paid per project? Maybe then they would actually help us achieve our goals. Be it a new project, addition, remodel or other; pay them for completing tasks, not simply for keeping a chair or counter space warm.

On a bad day, it makes you wonder how anything ever got built in the first place. Or maybe it just goes to show how far the level of customer service in the public sector has deteriorated to in this great country. At one point in time, great minds were able to create and compose great buildings, now, through red tape and bureaucracy, greatness has all but subsided in the arena of Civil service.

*To show that I am not issuing a blanket complaint, I would like to recognize the cities of Anaheim and Orange for knowing how to take care of business. Dealings with your Building, Planning, Redevelopment, Traffic, Fire and Code Enforcements departments have been head and shoulders above my experiences with the rest of Orange County’s Departments of Public Work.

Non-Recourse No Brainer

2010-08-24T20:22:00.000-07:00

Non-Recourse No Brainer

By: Nicholas A. Dunlap, CPM

Commercial property owners defaulting on non-recourse loans? Say it ain’t so. Today’s Wall Street Journal highlighted a growing trend amongst over-leveraged Commercial Property Owners who seek to renegotiate or restructure their loans with banks by first stopping payment. Apparently halting payments on a $135 million dollar mortgage is enough to warrant the attention of the lending institution who holds the note, however, the trend shows that note holders are more likely to foreclose than renegotiate. Sophisticated property owners are doing what is known in the Real Estate world as a “Strategic Default.” In a strategic default, mortgagors often have the money to pay the loan but choose not to. Without a personal guarantee, there is little reason for these owners to honor their obligations as the market values on many of these properties have plummeted far below the value of the loan. In tough times, established relationships or the prospect for future credit or financing mean little to the borrowers who are concerned about now, not the past or future.

In one instance, the debt on a luxury mall in New Jersey was over $135 million and the estimated market value of the property was just $52 million. Strategy in this case simply meant knowing when to walk away. The buyer stopped making payments and gave back the property. The upside to this scenario is that there is over $1.4 trillion dollars in commercial real estate debt coming due prior to 2014, of which over 50% is attached to commercial properties where the loan exceeds the current market value of the property. Of course, this is upside not to mortgagors but to investors. If this were to play out as some have projected, there could be a number of opportunities to purchase deeply discounted notes from mortgagees. As of right now, these opportunities have been minimal.

Books Coming Soon

2010-08-08T16:56:00.001-07:00

There is a lot going on in the world around us. The job market, the economy, real estate, the upcoming state election and the many unique trends and indicators that help us model, project, acquire and manage assets seem to find their way into our newspaper headlines on a daily basis. With that, there are a number of valid points to consider and analyze. However, lately my efforts have been geared not towards writing Blog posts, but editing a beginner's book on investing in commercial real estate I recently completed as well as writing a new book on using Social Media to market your business. Once the editing is complete, I look to return to a more frequent schedule of blog posting. Please stay tuned for more information. And as always, stay informed!

Rental Rock 'em, Sock 'em

2010-07-31T14:29:00.000-07:00

Rental Rock ‘em, Sock ‘em

By: Nicholas A. Dunlap, CPM

According to this morning’s OC Register, Apartment rents are now hitting bottom. Funny, they said the same thing a few months ago. Truth is, rents at B and C Class Properties in Orange County are now on the rise, up from where they were last year at this time. A Class properties are a different story. The influx of high-end development and failed condo projects in Anaheim, Orange and a handful of South Coast Metro locations that are now operated as rentals have increased competition amongst landlords. With that, the bare-knuckle, rock ‘em, sock ‘em type combat remains in place.

Rock ‘em, sock ‘em is the perfect parallel to the buffoonery that occurs at the helm of some of these properties. To start with, a barrage of soft, short and uneffective punches, the equivalent to a dismal jab would be reflected in the initial offering of 2007 prices in the 2010 market. Then, the jabbing would escalate into a more serious exchange of powerful jolts. These punches, more aggressive in nature, are more serious and effective, liken them to the offering of 2 or 3 months free on a 2 year lease. Yes. That’s correct. Commercial lease terms and incentives finding their way into Residential operations. This is when the robots really begin to rattle. Right now, in A Class multi-family, the robots are rattling. Not just in Orange County, but nationwide.

And thus, we stand and observe: waiting for heads to pop off.

Thoughts On the Newest 2011 Economic Outlook

2010-07-21T09:17:00.000-07:00

Thoughts On the Newest 2011 Economic Outlook
By: Nicholas A. Dunlap, CPM

Orange County will lead the Southern California economy out of the recession next year, at least according to an outlook published yesterday by the Los Angeles Economic Development Corporation. Job losses, though down, will continue through the end of the year and firms small to large will generally refrain from hiring through the end of the year unless absolutely necessary. 2011 is officially predicted by UCLA Anderson, CSUF Mihaylo and now: The LAEDC, as a turning point in our recessionary slump. Yes, 2011 is predicted by The LAEDC to welcome the addition of 18,400 jobs, up 1.3% from the previous 3 years. Tourism, manufacturing and infrastructure related jobs will generate the most positions.

For landlords, this could mean an increase in occupancy rates at office, multi-family, industrial and retail properties; as companies grow and need more space and as people begin to earn more money and decide to pair down from doubling up. With these new jobs, unemployment figures will inch downward from 9.5% countywide to 8.3% by year’s end 2011. Will this be a strong enough decline to impact property owners? We shall see.

Of course, none of this growth will occur unless the statewide economic climate is more conducive to owning and operating a business. November will be key in restoring order to the state. Jerry Brown’s track record of destroying and doing away with tax breaks and benefits for businesses is not what California needs now or ever for that matter. Having a business-minded Governor such as Meg Whitman could be all the difference that we Californians need to succeed.

Indecisiveness Shared Amongst Multifamily Investors

2010-07-08T10:21:00.001-07:00

Indecisiveness Shared Amongst Multifamily Investors
By: Nicholas A. Dunlap, CPM

Shared sentiments in recent studies published by The Wall Street Journal and Apartment Finance Magazine demonstrate high levels of indecisiveness amongst multifamily investors. Interest rates are down, as are property values but so is transaction volume. Then what gives? Fear of a double-dip recession leads some investors to believe that although we are seeing some of the best investment fundamentals in years, there may still be another hit coming.

That hit, depending on how significant, could have a large impact on an investor’s going-in cash flow. Maneuvering an asset through turbulent economic times is certainly a skill, however, the actual numbers at the time of acquisition are paramount to the property’s potential for success. So while the current climate might be the best in years, hopes that there is better weather around the corner is keeping a number of big players out of the market.

Don't Believe the Hype

2010-06-24T17:38:00.000-07:00

Don’t Believe the Hype
By: Nicholas A. Dunlap, CPM

For as much speculation as there has been on the looming Commercial Real Estate bust, the opportunities to acquire distressed assets in the Southern California area are minimal at best. What’s more, the fundamentals are now comprised of flat rents (somewhat stable in comparison to 2008 & 2009), (even) lower interest rates and increasing capitalization rates that suggest this should be a great time to buy. Of course, that is, if there were any quality product available. An article in today’s Dow Jones Newswire suggested that many opportunity funds seeking to acquire distressed assets have been disappointed in their efforts. Lenders are not forcing borrowers into foreclosure and as a result, efforts are being made to either restructure debt or unload individual assets through what is known as a 363 sale as opposed to a good old Chapter 11 Bankruptcy filing where assets and portfolios are unloaded.

This is right in line with what we see on a daily basis. Typically, distressed assets of various product types appear by way of Broker or Receiver and then there are a procession of offers and the investment opportunity disappears. We see these opportunities in the Inland Empire, various markets in Arizona and Texas and across the mid-west on a frequent basis, though rarely in prime Southern California markets such as Los Angeles or Orange County. When true value appears in areas such as Orange or Los Angeles counties, it is almost as though there is a clash of the titans amongst the real estate elite and yet similarly, the opportunity quickly disappears. By no means are there an abundance of opportunities for investors. Right now, it takes personal relationships, perfect timing and cash-in-hand to make it happen.

Three Steps to Successful Advertising

2010-06-09T16:21:00.000-07:00

Three Steps to Successful Advertising
By: Nicholas A. Dunlap, CPM

Last month I was featured as a panelist at the Apartment Association of Orange County’s informational luncheon covering a topic I am quite familiar with: internet advertising. While advertising on the internet is a relatively simple task, it is difficult to do correctly. In fact, many people feel they have the knack to creating effective ads and yet they have nothing to show for their efforts. When creating your advertising, envision your customer-base or clientele. In the housing industry, this is either the renter of an apartment home or the buyer of a home. Have you created advertising that directly appeals to and encourages the prospect to click, look and call? If your phone is not ringing, the chances are you have not.

The three most important steps to successful advertising include: consistency, clarity and quality. Thus, create informative marketing pieces that present information clearly and concisely and continue to market your product on a consistent basis. Remember, content is key. Be sure that your narrative is on point and that the featured photos showcase the most visually appealing aspects of your property. You will know you have succeeded when the phone proceeds to ring.

Defeated! Proposed Moratorium on Rental Increases in the City of Los Angeles Goes Down!

2010-06-02T11:55:00.000-07:00

Defeated! Proposed Moratorium on Rental Increases in the City of Los Angeles Goes Down!
By: Nicholas A. Dunlap, CPM

Let freedom ring! In a battle of principles, apartment owners in the City of Los Angeles won big last week. In a battle of hard number financials, the victory remains dismal. The allowable 3% increase in rents of existing residents at apartment communities covered under the Los Angeles Rent Stabilization Ordinance at least allows owners an attempt to recover a portion of the ever-increasing utility and wage expenses associated with owning and managing apartments. Rent control is a nightmare and truly something that apartment owners in other areas must remain cognizant of and be willing to fight, along with other issues such as eminent domain. Congratulations to the Apartment Association of Greater Los Angeles who worked hard to defeat the moratorium proposed by Councilman Richard Alarcon.

Business Practices That Amaze (and not in a good way), Part I

2010-06-01T15:07:00.000-07:00

Business Practices That Amaze (and not in a good way), Part I
By: Nicholas A. Dunlap, CPM

This week’s “it amazes me that people like this are in business” thought came to me while reading an article published in Realtor Magazine. The article referred to or suggested that in the years 2002-2008, otherwise known as an economic upturn, commercial property owners became more interested in the rapidly increasing revenue streams associated to their properties than the actual management and maintenance of their properties. More important than the focus of the article is what went unmentioned.

The flipside to this equation is that we have now reached a plateau following a downturn. Owners are not seeing rent growth and thus are cutting key operational expenses to improve their income. It’s all around you: shopping centers, commercial centers and especially the “mom and pop” owned apartment houses. From dirty windows to busted stucco, from potholes and faded striping in a parking lot to broken, half-lit luminescent signage, you are reminded of just how tightly some owners are choosing to operate, failing to realize the cosmetic appeal of adages such as “like attracts like”.

Mind your operating expenses, but be more mindful of the curb appeal associated with your property. Vendors and service persons are eager to bid for your business and you can likely find yourself new quality vendors, thus improving your property and saving money at the same time. Succeeding in a downturn is about maintaining and creating, not cutting back and retracting.

Believable Hype Or Just the Same Old Smoke & Mirrors?

2010-05-30T09:05:00.000-07:00

Believable Hype Or Just the Same Old Smoke & Mirrors?
By: Nicholas A. Dunlap, CPM

Could it be that all this talk about a Commercial Real Estate bust is just that? Outlook and Statistics released this week by a number of sources, including TD Bank, the National Association of Realtors and CSUF’s School of Economics certainly bode well for property owners and real estate investors nationwide approaching a future that is rumored to have more than $1.4 trillion dollars in debt coming due prior to 2014.

The Financial Institution’s Perspective

Sure, TD Bank is one of many banks that issued Commercial loans, however, the model that TD followed, according to TD Bank CEO Bharat Masrani is a conservative one that will keep them out of trouble. Anyone who has applied for financing in the past two years certainly notices an increase in regulation, however, Masrani feels that his firms conservative lending practices will deliver them from evil, or in this case, distress. In a business built on risk taking, Masrani said that TD stuck to their footprint and did not meddle in property types they were unfamiliar with. Based on their practices, he feels that a Commercial Real Estate bust is not in our near future, although specific property types in a number of local markets may be hit hard.

The Economist’s Outlook

Although it has at times been nasty, multifamily has outperformed other product types through the downturn and will continue to do so through 2011. Jobs are slowly being created and bringing with them the need for workforce housing. Additionally, California State University Fullerton released their first quarter Southern California Economic Indicator and cited a 0.87% increase in economic activity. CSUF Economist Adrian Fleissig feels this will also result in an additional increase over the next 6 months and that we are on the road to recovery so long as the number of jobs continues to increase as well.

The Industry Watchdog’s Outlook

Financial performance of these (property types) assets is bolstered by improving rental figures and occupancy rates. According to Lawrence Yun, Chief Economist for the National Association of Realtors, multifamily is the strongest sector of the marketplace. While there have been a number of new projects introduced to the market, Yun feels that rents may decline by as much as 1.5% through the end of 2010, but will climb back 1.2% in 2011. Nationwide, the vacancy rate is expected to decline from 7.3% to 6.3%.

The Boots On the Ground Outlook

Marketing and leasing activity has picked up tremendously on the two major product types we own and operate: office and multi-family. In fact, last week was a record week for us in which we processed and approved 15 rental applications, both for residential and office. A typical week consists of half that amount, and until late, the only calls for office space were “wheeler-dealer”, promo seekers with no true concept of rental rates, concessions or value. Now, we are seeing multiple-year lease terms taken with fair concessions for both parties.

With the increase in activity, we have seen a slight increase in market rates. In most residential rental markets, with the exception of new class A product, the days of paying and begging for move-ins are over.

The Wrap-up

While the data and statistics certainly bode well for real estate investors and operators, I feel that we will still see some sort of market correction. It is important to remember that not all financial institutions were as prudent or conservative in their commercial lending practices as TD Bank was. We know what happened with the residential market, so unless the Federal Government issues a mandate of sorts to extend in-place financing on performing assets when the loans come due, this $1.4 trillion dollar amount will become a huge factor.

For those of us who are not highly leveraged, cash flow will continue to improve and a sense of normalcy should return to the market. In Orange County, I feel it has already.

Go Go Gourmet! Tickets On Sale Now at DPG Headquarters!

2010-05-27T16:30:00.001-07:00

The Gourmet food truck is the hottest food trend around. Known widely throughout the streets of Los Angeles, these trucks do not often serve the Orange County area. Until now...

Providing a prix fixe menu, we have:

Louks- Gourmet Greek Food (www.LoukstoGo.com)
Crepes Bonaparte- Crepes and More (www.CrepesBonaparte.com)
Barcelona on the Go- Spanish & Argentinian fare (www.Barcelonaonthego.com)
Taco Dawg- Need we say more? (www.twitter.com/tacodawg)

Tequila Tasting and Sampling provided by Azunia Tequila.
Hosted Bar AND MORE. Music provided by Dubgypsy Entertainment.

This event will sell out. Tickets are $50 pre-sale and $60 at the door. Pre-purchasing of tickets is strongly encouraged. Contact me directly by email to arrange your purchase.

ALL PROCEEDS benefit Childshare, a non-profit organization placing children from troubled homes in temporary and permanent care. This is a great party for a great cause! Do not miss it!

Avoid the Summertime Vacancy Blues

2010-05-24T17:44:00.000-07:00

Avoid the Summertime Vacancy Blues
By: Nicholas A. Dunlap, CPM

Graduation time, kids are out of school, family vacations and three day weekends are here, you guessed it, summertime is upon us. Even the best apartment communities experience turnover in the summertime. Follow these 3 secrets to make sure you fill your vacancies before Independence Day as opposed to after Labor Day.

1.Know Your Market- Conduct a rental survey to understand where your proposed asking rent fits within your market. Identify a competitive rate based on the location of your property and the specific makeup of the unit and proceed accordingly. Be sure to price yourself for activity: not too high, not too low.

2. Respond Quickly- Whether it is a first showing, verifying a completed application or responding to an applicant on whether or not they have been approved for move-in, time is of the essence. Respond promptly to ensure your prospects do not look elsewhere.

3. Customer Service- Realize that the key to your success is serving your customers. Be hospitable, cheery and professional in your presentation.

Right now, the rental market is hot. The up-tick in consumer confidence reflected in recent Retail statistics has certainly found it’s way into the marketing and leasing sector of apartment homes. Just today, we processed 7 applications to rent our apartment homes and better yet, 6 of 7 were accepted outright without a co-signer! If this is a sign of things to come, we are in for a great summer.

Consumer Spending On The Rise

2010-05-11T14:48:00.001-07:00

Consumer Spending On The Rise
By: Nicholas A. Dunlap, CPM

Screw the banks, feed the economy…or so the actions of our nations consumers most currently suggest. Data released today by Morgan Stanley shows that mortgage delinquencies are up 8% from mid-2007, but that consumer spending rose 3.6% in the United States last quarter. So instead of robbing Peter to pay Paul, we are not paying Peter to pay Paul. Same difference? Not necessarily.

We are experiencing an increase in “Strategic Defaults”, which sounds quite complex and sophisticated despite the fact that it is nothing more than realizing that the market value of your home is dramatically lower than the value of your loan and deciding to walk away from the property. This works for apartment owners and managers who will continue to welcome new renters into the marketplace. Statistics show that these consumers are paying other bills and satisfying their other obligations, but have simply stopped paying their mortgages. That said, they should be able to pony up the extra cash for a solid security deposit upon moving into an apartment home.

It’s no wonder REITs and other apartment owners are doing so well at present. Rents are down from recent years past, but occupancy is up from last year and there are a number of new renters in the marketplace to replace those who have left and continue to leave to become first-time homeowners.

My Plea To Congress

2010-05-05T18:50:00.000-07:00

My Plea To Congress
By: Nicholas A. Dunlap, CPM

Recently, I was selected by the Institute of Real Estate Management to join them in Washington, DC to lobby our state and district politicians on behalf of the interests of Commercial Real Estate owners locally and nationwide. Our interests include but are not limited to: preserving the flow of capital into the Commercial Real Estate market, maintaining the current Capital Gains taxation rate of 15%, increasing the Savings and Loan lending caps from approximately 12% to 25%, introducing a sort of Commercial Mortgage insurance to protect the equity gap (difference between market value of a property and the value of the current loan) on performing loans only as well as accelerating depreciation from 39 years to 15 years on leasehold improvements and lastly, extending the terms of currently performing loans so as not to require a balloon payment or “fire” sale type of action.

This event marked my first trip to Washington, DC and clearly illustrated to me the need for Commercial Real Estate professionals to make known the ongoing issues we are facing in our industry. Of the 7 politicians we visited, it was somewhat disheartening to see that a mere 2 of them were aware of the issues. Apparently, the other 5 felt that the issues were not as severe as the residential market and that the market was actually showing signs of improvement. On the contrary, the 2 who were aware of the issues still saw the foreboding shadows ahead. I would like to commend Ken Calvert, a Republican from Corona, California, who was extremely aware of the issues and has been extremely proactive in supporting our causes. For your reference, I have included below a copy of the “canned” speech I was delivering to our Representatives.

“In today’s economic climate, we are seeing performing loans come due on properties where the borrowers have no means of paying the full balance due. Contrary to non-performing loans, these loans are paid on time and the borrowers are not behind in payments. By extending the life of the loan, banks can avoid having to foreclose on these properties, as well as the costly, lengthy, legal battle should the buyer be forced into a Chapter 11 bankruptcy merely to obtain a loan extension.

Further constricting this process is the lack of available credit to re-finance the debt on the property. WIth over 6% of all Commercial Real Estate loans underwater, where the loan amount exceeds the market value of the property, it is prudent for our lending institutions to extend the length of time that borrowers have to pay their loans in full, rather than require a re-finance.

Understand that these performing loans are loans that are supported by the property, where the income generated by the property is sufficient to pay the loan. I ask you, on behalf of the Institute of Real Estate Management, to urge the Federal Reserve and Treasury to provide greater guidance to the holders of Commercial debt. A simple term extension for performing loans could prevent many properties from going into default or foreclosure.

There is no cost to tax payers and simple guidance from our Reserve and Treasury can help the many borrowers who are teetering on the brink of bankruptcy.”

Socialism Finds It's Way to Los Angeles

2010-04-27T09:28:00.000-07:00

Socialism Finds It’s Way to Los Angeles
By: Nicholas A. Dunlap, CPM

Aside from the unfortunate circumstances many property owners are facing, now, the owners of multifamily properties in Los Angeles city are facing what could be a moratorium on the dismal increase of 3 to 5% they were once allowed by the city on rent controlled buildings. Citing that many of the residents of these rent controlled apartments had been effected by the economic downturn, Alarcon stated that it was not right for the apartment owners to raise their rent by 3%. So, let’s get this straight: the residents were negatively affected, but the apartment owners who have seen rents decline, expenses increase and elevated vacancy rates over the past 3 years, have emerged from the battlegrounds unwounded? Au contrare, Mr. Alarcon.

The appropriate solution to this issue is not at the expense of the apartment owner. Drive through Hollywood, Mid-Wilshire, Koreatown or Arlington Heights and experience first hand the compromise of someone’s financial return on their investment. Beautiful and historically significant apartment houses, reminiscent of the many stories that Old Hollywood has to tell, and yet you see dilapidated buildings that look bombed out and not maintained. So again, I ask: Why at the expense of the apartment owner? Frustrated over the inability to raise their rents to anywhere near market level and typically resigned to a whopping 5% annual increase, many of these apartment owners avoid improvement projects and maintenance that could make the property more appealing. This does us all a disservice, polluting the hardscape of our city with rundown, brick and mortar ruins.

Using the logic of Mr. Alarcon and other rent control proponents, doesn’t it make equally good sense to approach the residents’ employer and mandate a wage increase so that they can afford to pay higher rent, or, maybe we should approach oil companies and ask them to drop their prices per barrel so that gasoline would be cheaper and maybe, just maybe with those few extra bucks, residents could pay their rent. No, I’ve got it: we demand that restaurants and grocery stores drop their prices on food so that people can eat whatever they want, whenever they want and not worry about what is being spent on food and be able to pay rent? Or maybe DIRECTV will cut their rates or provide discounted cable so that people can still get the Extra Innings MLB package and afford to pay increased rent? See how ridiculous it seems to suggest that a third party pay part of someone’s rent? The apartment business is a for-profit industry, not a social service that subsidizes one of life’s luxuries.

The way our country and California is heading, I should avoid such suggestions. Hopefully Antonio Villaraigosa will be able to talk some sense into him or simply dismiss his notion.

Building Your E-Curb Appeal

2010-04-23T09:57:00.000-07:00

Building Your E-Curb Appeal
By: Nicholas A. Dunlap, CPM

The apartment industry has become increasingly reliant on technology. With owners accessing financial information and records from abroad, managers logging details on property inspections and operation from the field and residents scouring the web for move-in specials on their I-Phone and Blackberry devices, it’s safe to say that our performance based, financially driven industry has the tech bug, bad. While there are different levels of sophistication in terms of technological infrastructure, at the bare minimum there are minimal steps you can take to emerge from the darkness and embrace the technological advancement that has, well, dare we say, made our jobs easier? Find these tips and suggestions below.

The Property Portal

If you choose to avoid all other technological advancement in the apartment industry, you should at the very least embrace the property portal. Talk about leveraging your time and effort, a portal is essentially an online look at and into the property that includes specific information on the site and location, professional photos, current rates, leasing information, specials, contact information and forms, maintenance request forms, payment options, etc. The portal serves both current and prospective residents and functions as a retention and marketing tool.

Search engines like it when you include “apartments” in your website name, so, if you own a building named “Palm Villas”, try “PalmVillasApartments.com”. You will rank higher in searches and be picked up by more search engines. In plain English, this means your property is more likely to show up when someone types in “apartments” in a Google search.

E-Analytics

Just like you monitor the ads you place in the newspaper or classifieds, track the overall effectiveness of your online presence by subscribing to services like Google Analytic. Google Analytic will tell you everything you could possibly want to know about the people who access your website, including: location, time spent on site, how they accessed your site (directly or from a link), what they typed into the search engine, etc. Knowing what your viewers input to access your site can help you maximize your marketing dollars by increasing keywords and code in one area and adding less emphasis to the other. Reports can be easily configured so that they can be emailed daily, weekly or monthly depending on the number of websites and advertising campaigns that are active.

Financial Reporting...Reloaded

Let’s face it: money never sleeps! Why not have access to it whenever, wherever you are? Whether it’s an iphone, blackberry or a laptop with web access from out of the office, programs such as Yardi, Quick Books and other Property Management programs are now equipped with modules that allow them to be easily accessed, securely and online. Financial management is the fun part of the business, why not do it at your leisure in your preferred location: yacht, motor home, cafe, plane, you get the picture.

In closing, I should add that I hope to soon be utilizing an Ipad to neatly and efficiently log notes, photos and other details on weekly property walks. More on that, soon.

Wall Street on Contrarians & Commercial Real Estate

2010-04-15T12:16:00.000-07:00

Wall Street on Contrarians and Commercial Real Estate
By: Nicholas A. Dunlap, CPM

The Real Estate section of yesterday's Wall Street Journal boasted an interesting headline that fitly described the current real estate investment climate. “Beaten down and bid up” it proclaimed, in reference to the Commercial Real Estate market and specifically the Real Estate Investment Trusts who have been acquiring Commercial assets. Occupancy rates and gross income are down, however, investor demand for these assets typically generates multiple offers and quick sales. As a firm we share this contrarian approach to real estate investment, that is, to buy or invest when no one else is buying.

With interest rates remaining low and capitalization rates on the rise, if you plan to purchase for cash flow and can acquire an asset with cash flow sufficient to your standards, right now is the time to buy. If you are considering an asset that requires a significant increase in gross income to generate your desired cash flow, hold off on the acquisition; true sellers will eventually adjust their expectations.

Read the article in its entirety by clicking here: http://online.wsj.com/article/SB10001424052702304604204575182341492138752.html?mod=WSJ_Commercial_LEFTTopNews

3 Steps to Better Resident Screening

2010-04-02T15:48:00.000-07:00

3 Steps to Better Resident Screening
By: Nicholas A. Dunlap, CPM

As a landlord, there are few things worse than preparing a unit for rent, marketing it and ultimately renting it to what turns out to be a problem tenant. However, thanks in part to technology and comprehensive criminal record, credit bureau and other such databases, landlords can take simple steps to protect themselves and their investments, before problems arise. Although no screening procedure is 100% fool proof, meaning that even the strongest applicant can become the worst tenant (unfortunately, I have seen this happen on several occasions) take the following 3 steps to ensure you are making the best effort to protect yourself up front.

1. Do not process incomplete applications. Every one of our resident managers knows that an application lacking previous addresses, account numbers, yes/no answers will be returned to them, or will be denied for being incomplete. The reason? When someone shows you who they are the first time, believe it! If you do not follow simple directions such as “fill out the following application in its entirety leaving no blank spaces or sections unacknowledged”, how will you react when we have to post a notice to perform or quit regarding conditions of the lease agreement. NEXT!

2. Conduct a comprehensive background check that includes credit, rental history, bad check and criminal background details. More importantly, develop a policy that allows you to screen effectively and appropriately in accordance with these background checks. As it reads in our rental criteria, we will not rent to those with a history of crimes against persons, property or involving drugs.

3. Equality and consistency are your best friends. Do not stray from your screening requirements and standards. Refrain from making exceptions. Remember, if you do something for Applicant A, you must do the same for Applicant B. Avoid the personal feelings that can sometimes cloud your thought process. Yes, that means you should not rent to someone simply because “they seem like nice people”. Ted Bundy and Jeffrey Dahmer seemed like nice people at one point or another, I’m sure.

All in all, effective resident screening means having a thorough process in place, complete with pre-established criteria. Local associations such as the Apartment Association of Orange County (http://www.aaoc.com/) can assist with conducting a thorough, comprehensive background check. Be sure that you and your staff are consistent in your business practices and you will be fine. If you have any questions or concerns, there are a number of local law firms to contact, including Landlord/Tenant experts Kimball, Tirey & St. John (http://www.kts-law.com).

Three Ways to Minimize Your Maintenance Expense - Blog

2010-03-31T09:42:00.000-07:00

Three Ways to Minimize Your Maintenance Expense - Blog

April 22nd: Judgement Day?

2010-03-27T11:35:00.000-07:00

April 22nd: Judgement Day?
By: Nicholas A. Dunlap, CPM

This week in California there were over 131 arrests made of contractors who are accused of operating without the appropriate licenses for their trade. The arrests were made in conjunction with Contractors State Licensing Board investigators who suspected that these individuals had either been using someone else’s license to operate their business or fraudulently posing as licensed contractors. With that, one can begin to speculate that the EPA’s recent hiring efforts in a number of states including California and Texas to “perform oversight of licensing requirements and program audits” will result in similar enforcement, fines and penalties of the EPA’s Renovation, Repair and Remodeling rules that will be in affect as of April 22nd.

With cutbacks, setbacks and yes, even the proven incompetence of our elected officials with regard to monetary budgets and spending in relation to our current economic crisis, it appears that the idea is somewhat of a “Robin Hood” employment opportunity in which we penalize the small business owners, hardworking contractors and rental property owners to pay the salaries of the EPA inspectors and officials. The cycle: hire new employees, spend money on training and salaries, lack the money to pay, punish small businesses, contractors and rental property owners. The punishment is steep; fines can exceed $35,000 per day for not obtaining the appropriate licenses and training! Yes, per day!

We have applied for our licensing and have made it mandatory for all of our maintenance staff to attend. This is not to be taken lightly. For additional information, please visit the site put together by the Institute of Real Estate Management:
http://www.iremfirst.org/if/whatsHappening/EPA%20RRP%20Rule

The Lights Are On, But Nobody’s Home

2010-03-25T10:17:00.000-07:00

The Lights Are On, But Nobody’s Home
By: Nicholas A. Dunlap, CPM

Skyline Towers, the beautiful twin set of 25 story, high rise apartment homes located just off of the 55 freeway at Macarthur is now open and available for rent. Acquired earlier in March by Essex Property Trust in a JV effort, the firm purchased the 349 unit complex for $128,000,000, or $366,000 per door. The uber-luxurious complex was originally built as condominiums, but anyone who drove the 55 freeway on a regular basis over the past year and a half noticed that until recently, the construction had all but come to a stand still.

Floor to ceiling windows, Viking stainless steel appliances, expansive floor plans and 11 foot ceilings are just some of the interior amenities future residents can expect. Exterior amenities include a pool, party room, lounge and more. The catch? Rents start at $3,000 per month. While this is what they are asking, I would anticipate they will achieve an effective rent far lower, closer to $2,200. Why? We have luxurious 2 Bed 2 Bath apartment homes of our own in the same market area, albeit without the same exterior/interior amenities, but even with designer upgrades, we are having difficulty getting $1,395 for ours.

So, to achieve the $3,000 per month starting price for their rentals, I would recommend one of two things: free rent for several months an a sufficient fixed-term lease so that the contract rent is $3,000 but in reality costs the tenant less, or, pursue corporate housing contracts and opportunities with some of the larger legal/accounting/professional firms in that area.

Either way, it will be interesting to observe just how long those lights stay on inside vacant apartment homes.

Good News From Westwood

2010-03-24T11:04:00.000-07:00

Good News From Westwood
By: Nicholas A. Dunlap, CPM

UCLA’s School of Economics announced today its beliefs that the State of California is just a year away from economic recovery. Though unemployment will remain in the double digits through the end of 2011, by 2012 UCLA projects the unemployment rate at just below 10%. While there was little activity anticipated for the remainder of 2010, it was suggested that by 2011, things will pick up. Could this be UCLA factoring in the potential election of a business minded professional (Yes, a Meg Whitman endorsement) to turn things around for the State of California? After all, our gubernatorial election is being held in November.

The school went on to state that while Green or environmentally efficient jobs will be added, they will not be a significant source of growth. That said, California is predicted to remain slightly above the national unemployment average of 9.3% in 2011. What’s more, come 2011, UCLA predicts that personal income levels will begin to grow at a more consistent, shall we say “normal” pace. The growth rate? 3.7% per year.

The forecast released by UCLA today seems to slightly echo what Anil Puri of the CSUF School of Economics said last October. Puri projected that 2010 would remain somewhat flat, but that the end of the year and beginning of 2011 should begin to welcome an increase in job opportunities. As income property owners and operators, we understand that jobs and rising income levels are synonymous with rent growth. After a down year and a flat year, will 2011 be the year of the increase? We shall see.

In Advertising It’s What You Say, Not How You Say It

2010-03-19T08:49:00.000-07:00

In Advertising It’s What You Say, Not How You Say It
By: Nicholas A. Dunlap, CPM

The New York Post ran an article the other day that summarized a recent list of words a busy Real Estate brokerage (The Corcoran Group) will no longer use in their advertising. Among the words: exclusive, quiet, private, kids, walking, playroom and more. Throughout the article, there was a continued reference to the duties of real estate owners, managers and brokers to abide by Fair Housing Guidelines that prohibit discrimination against prospective buyers or renters.

While I certainly understand and appreciate the need for equality and fairness within the advertising of for sale and for rent housing, at what point does it not become excessive? The need to re-word ads simply to tip-toe around what could potentially be one of the best selling points of a property is overkill, is it not? Could it not possibly prohibit a property owner from achieving the highest and best value for his or her property at market?

We attend the mandatory training once a year as put on by the Fair Housing Association. After listening to some of their in-depth and yet uninformed lectures on how to operate a property, I would much rather have their input on my advertising than on how to sell or manage a building. Before too long, ads might need to be pictorial only and completely free of text to avoid some sort of recourse or reprimand.

Vacancy Rates On the Decline?

2010-03-16T09:44:00.001-07:00

Vacancy Rates On the Decline?
By: Nicholas A. Dunlap, CPM

CB Richard Ellis reported today that multi-family vacancy rates in the United States will decline from their all-time high of 7.4% in 2009. While rents are down approximately 1% from the fourth quarter of 2009, job losses have slowed and thus, occupancy rates are increasing, pushing vacancy rates downward. At DPG, our activity has increased and as far as occupancy goes, we are in a much better position now than we were last year at this time. A snapshot comparison of April 2009 to March 2010 shows that our loss to vacancy is down 40%. This number reflects skillful guidance and responsiveness. In a market that is constantly changing, it is imperative to be able to adapt and pair your product with specials that will attract the market.

The stats published by CBRE cite that the 20 to 30 “Gen Y” age group will spark the increase in occupancy rates as they begin to find jobs and are able to again move out of parents’ houses and roommate situations. You might recall, this doubling up originally occurred when the economy soured and these new renters were forced to move-out. Realizing the return of these renters to the marketplace could result in a very full summertime through fall/winter season.

My fingers are crossed.

Undercover CPM

2010-03-08T09:23:00.001-08:00

Undercover CPM
By: Nicholas A. Dunlap, CPM

I am not much of a TV watcher outside of sports, news and other documentary type programming, but recently I have taken a liking to a show on CBS named “Undercover Boss”. In the show, an Upper Level Executive hits the streets and visits the various locations in their firms operations. Along the way, the Executive interfaces with employees, customers and others as they relate to the various duties and tasks that function within their company. Of course, the Executive goes undercover and uses a fake name to mask their true identity, but in the end, the Executive comes away with a wealth of knowledge, a new understanding and appreciation for the way things work and most importantly, ideas on what to strengthen and how to improve.

As a Supervisor, I am at all of our properties at least once per week, speaking with the managers regarding pressing issues at the property and in the neighborhood, talking to maintenance personnel, checking on the progress of work and other projects, making sure the property looks, feels and operates to the company’s high standards of the quality of living experience. What’s more, I take pride in the fact that I have held EVERY position at our firm, from Janitor to Maintenance Tech to Leasing Agent to Resident Manager to now Property Supervisor. Not only do I know how long things should take, I know what they should cost, where someone might be cutting corners and as a result, I know how to lead them in the right direction.

It seems that somewhere along the line of progression from lower level to upper level in most companies there is a breakdown in customer service. Our leasing agents and resident managers stay sharp as they are trying to lease apartment homes and are constantly reminded to smile and stay positive. Yet this does not always translate into the administrational world of “that’s not my job” or “I didn’t know I needed to”. Customer service is a great tool to utilize in managing accountability and productivity. Consider the essence of customer service: assisting someone interested in your firm or your firm’s services. Regardless of your position in the company you work for, your actions directly represent the company. Would you not want to help someone interested in your firm or a service they provide? Are you more concerned with what is in your job description than what can be done to help those you work with?

Realize that some items are not recognized until they are forgotten or someone has dropped the ball. From here, understand that it is better to not be recognized for going above and beyond than to be recognized for underachieving, which typically results in a reprimand of sorts. There is not always a balance between the two and that is just the way life works sometimes. My tip for success at any level of an organization is simply to strive for excellence and to go above and beyond while always following the rules. Not only will you be satisfied with your own efforts, but you will feel rewarded in knowing that you gave it your best shot. True empowerment begins within. Encouragement from others is, like the age old idiom, icing on the cake.

Who, What & Why On Gen Y

2010-03-02T16:45:00.000-08:00

Who, What & Why On Gen Y
By: Nicholas A. Dunlap, CPM

Generation Y has officially become the newest courted renter. Described as individuals born between the years of 1982 and 2000, there are 78 million Gen Y’ers in the world and roughly 25% of the US population is comprised of the demographic. Of course, Gen X, or those born between the years 1961 and 1981 far outnumber the Gen Y population, but the numbers and data available on Gen Y has everyone from marketers to managers screaming with glee. Easy to predict and easy to reach, this upwardly mobile, tech savvy group is fond of the uber hip and urban locale. Multifamily owners stand to greatly benefit from this new wave of renters.

Over 90% of Generation Y owns PCs and use them on routine basis. As such, they are looking for quick responses and quicker solutions. Therefore, utilizing tenant portals and other online methods of correspondence with up to the minute availability and real time pricing and specials is key. At our firm, we utilize Twitter, Wordpad and creative Craigslist Ad campaigns to consistently appeal to, attract and retain these residents. Through utilizing these advertising tactics, we are showing not only that we care for and understand the unique needs of Gen Y, but that we are ready to provide this elevated level of service and accommodation to everyone who walks through the doors of one of our leasing offices.

Within the past 3 weeks, 60% of the applications we have received and processed here at DPG have been from Gen Y’ers. Of our total applications received, we know that 30% have come from Craigslist, 50% have come from Drive Bys and 20% from Resident Referrals. From these numbers, we know that 100% of the Craigslist applicants have been Gen Y’ers. Perhaps online marketing to this demographic is so effective because they prefer online time over television and are more inclined to be in front of a computer, online and browsing the internet. In any case, we will continue to focus our efforts where we see the greatest results and greatest return on investment. The way I see it, it’s pretty hard to top cost free, effective advertising.

To Respond or Not To Respond? That Is the Question.

2010-03-01T17:29:00.001-08:00

To Respond or Not to Respond? That Is the Question.
By: Nicholas A. Dunlap, CPM

With the array of social media and review type sites that now focus on the multi-family industry, it is important to consider the ramifications that these sites can have both on your firm and your property’s reputation. While it is important to closely monitor what these sites have to say, it is even more important to consider if, when and where to respond to what can sometimes be exaggerated and inflammatory remarks about you and your property.

Start off by establishing a Google Alert (a saved search on Google that will notify you anytime information matching your inquiry goes live) with your property names and addresses. Then, once you receive a review or comment, save a copy for your records and take the issue up with the personnel who are associated with that property, be it a maintenance technician, leasing agent or resident manager. After hearing their side of the story, you can determine whether or not the issue is worth responding to.

More often than not it is the hostile, irritated former resident who trashed the apartment home and is not happy with their security deposit, or the resident who did not pay rent and was evicted, or even the residents who parked where they knew they shouldn’t have and were towed as a result that take to the internet to complain. With that, I live by the old adage, “Never argue with a fool, onlookers may not be able to tell the difference.”

Through it all, if you see something that is in fact damaging to your reputation and you feel it could jeopardize your ability to rent apartment homes, take action! If there is any merit of truth to the matter: a tow happy former manager, an issue with bees or spiders, water temperature inconsistencies, whatever it might be, respond to the complainant that you have remedied the issue and invite them back to experience the new and improved multifamily community. Kindness is not forgotten and courtesy is always appreciated.

New EPA Incoven…Regulation Soon To Be Upon Us

2010-02-25T16:11:00.000-08:00

New EPA Incoven…Regulation Soon To Be Upon Us
By: Nicholas A. Dunlap, CPM

Okay, I will comment on the frustrations of property owners, service providers and others who are subject to new EPA Regulations coming into effect at the end of April. Under the guise of safety precautions, the EPA is punishing commercial property owners, painters, contractors, construction workers and just about anyone who works on a piece of property more than six square feet in diameter by subjecting them to a host of licensing fees, training classes (which incur additional fees) and the additional fees associated with licensing and training those who will actually be doing the work.

You see, it is not just the firm that must be EPA certified, it is also the director and the immediate supervisor of the work. If you have a staff that usually works in pairs, you will suffice in having one of the two workers certified. Let’s take account of the expenses incurred at this point: the firm certification for lead based paint remediation and renovation is $550. The course fee can cost around $255 per person (in this case it’s 3 people (manager, supervisor and worker). So now, we’ve spent $1,315 just to be in compliance. Add $255 for every maintenance technician or superintendent who will be licensed and you will see that the cost can quickly get out of hand.

That is, until you see the dollar amount of the fines that the EPA is imposing on anyone who is not in compliance with the new requirements. The fine, hold your breath, $37,500 for any minor infraction. And the rules, they are a plentiful. All complaints aside, don’t leave yourself vulnerable to fines or punishment from the EPA. Fill out the application on their website, include a check, send in the paperwork and get ready to spend 8 hours in a training course. You could be saving yourself a lot of money.

Knowledge Is the Key to Survival

2010-02-23T08:52:00.001-08:00

Knowledge Is the Key to Survival
By: Nicholas A. Dunlap, CPM

Anyone who has been inside of my office has seen the large stack of real estate related journals, newspapers and magazines that I keep on-hand to refer to for statistics and data. With that, I was drawn to the December 2009 edition of the Multifamily Executive, a publication that offered a “2010 Survival Guide”, listing 20 points that apartment owners and managers should follow to ensure a successful 2010. While I found a number of the items to be filler-type material, the most important item was all the way at number 17. The advice offered: “Push Rents Wherever You Can.” This is of the utmost importance in a time where one month the street rent is up $40 and the next it might be down $20, depending on vacancy rates and lease terms, a sizable dollar amount stands to be lost if you do not stay aggressive with rents and familiar with your market.

Know where your product fits in the marketplace. Know the rates and specials being offered by your competitors. This knowledge will give you the edge you need to succeed and strengthen your bottom line.

The Asking Price Is Just That

2010-02-19T08:18:00.001-08:00

The Asking Price Is Just That
By: Nicholas A. Dunlap, CPM

Yesterday I received an email from Loopnet, a commercial Real Estate listing and data service that we subscribe to, that I found to be of interest. The email furnished a statistical run of the 4th Quarter of 2009 and pointed out that while sales activity is in fact down in the Orange and Los Angeles county commercial markets, asking prices are up approximately 3.7% per square foot over last year. Talk about pie in the sky, our economy has deteriorated, rental rates have declined and for some reason, investors should want to pay more for an asset? Explain that one to me.

When you do not sell your property, or you receive offers that you feel are insulting, it is likely due to the fact that you are delusional and need to realize that you are not in tune with today’s market. Due to the overwhelming amount of distressed product in certain sub-markets, prospective buyers are treating every asset as though it is distressed and or should be priced accordingly. With that, I will spare you the statistics and make it easy for you to understand. If you have to sell, you are picking one of the worst times in recent years to do so. If you are not highly-leveraged, you might still be able to reap some financial benefit as there are a plethora of buyers and not a lot of quality product. So you can sell, not for prices of 3 to 5 years ago and certainly not at the attractive price you were hoping for. But, the problem with the latter of course is that you will have difficulty finding a 1031 Exchange scenario that will allow you any sort of pride-of-ownership on the acquisition side.

It is good to see that there are optimists, even in today’s economy. On one hand we have the anxious, cash-in-hand buyers ready to pounce and on the other, we have the quixotic sellers looking for top dollar. In between, we have a large gap.

Function & Value Vs. The Bells & Whistles

2010-02-15T10:14:00.000-08:00

Function & Value Vs. The Bells & Whistles
By: Nicholas A. Dunlap, CPM

Each day, the Harvard Business Review publishes a “Stat of the Day”. Today’s stat reflects the attitudes of consumers in relation to the purchases they are making in today’s economy. With that, approximately 60% of consumers today are more concerned with a product’s core function and price than its added benefits or amenities. This attitude certainly transcends into the rental market and can be seen in prospective renters who are looking for the best value or best deal for their dollar. Not only are prospects looking at more apartment homes than before, they are looking at upgraded vs. non-upgraded, specials vs. free rent, location vs. upgrades and more. At the end of the day, the decision is made based on price and functionality. To those who are home more often, the upgraded apartment home might better suit their needs. To those who work long hours and are seldom home, the ability to be a quick drive or bus ride to work can be the difference.

Understand where your market is and analyze where your most recent customers have come from. When you can better recognize these nuances within your business, it is easier to seek out your prospects and succeed, even in a down economy.