If you’re looking at this picture and wondering what the heck is it and why does Bethany have it on her blog? Then it did its job. There are so many things that happen day to day in all of our lives, that what we take for everyday things and nominal occurrences, can be extraordinary to other folks who’s days look much different than ours.

As multifamily syndicators and operators, we encounter quite a large amount of things that many folks would think extraordinary and we have just learned it goes with the territory so we glaze over it. Part of our tasks is to be able to be mindful of those things and remember to convey them to all of our team including investors who are limited partners, LPs, and not actively doing the work.  

You see our LP, limited partners, come into our deal by investing their hard earned capital, expecting a good return on our work and their investment.  But really they are investing in us.  So they in many ways have a much more active role like a boss would. No one wants to go talk to their boss and tell them how badly they are doing their job, or why they didn’t hit their goals, yet good operators are honest about their strengths and their weaknesses and honest with their investors.

With the market where it is at now in the cycle, the markets are always cyclical, so those of us who have been in it for a couple cycles have been through this before and hopefully learned from it. If the operator has learned through the previous cycles they have developed either better systems, or recognized the need for say stronger reserves, or whatever those lessons taught them, and they are not shying away from this market, but are just moving forward with that learned wisdom in place.  

A good friend and fellow investor learned to instead only get bank loans at 50-60% LTV and raise the rest in equity to ensure success and they have been very successful through multiple market cycles and honesty with their investors. Folks always want perfection, but when reality steps in, being honest truly is the best policy.

So what does that have to do with this picture? Well in walking one of our Build to Rent communities, we came across this. Clearly the landscaper we had hired was paying no attention to the brand new water shut offs that had been placed and they trashed them on several of the units. Since these were newly put in, whoever showed up probably just took it for granted that they were never there before, instead of being diligent and watchful. But since they trashed them, we needed to have a talk with them, bill them for the damages and make sure it does not get repeated, otherwise as our project moves along, the costs will get out of control, and that is one thing we have learned from in our many years, stay on top of the costs when they are little, so they don’t snowball into giant things. 

This is only a $300 repair for 1 unit, in this case it was only 2 units so a $600 total. Now times that by 100 units and you have $6,000 in unnecessary costs and time lost. Not to mention next time, it could be other items included, like water damage, broken pipes, etc. There needs to be accountability in all levels so that what the landscaper is taking for granted doesn’t hurt our companies goals or progress and ultimately hurt our investors.  

Our investors are our top priority and we want to continue to have open and honest communication even when we may not be hitting our goals, so that we can all work together to learn and grow and keep moving forward. Our investors help us stay accountable and make us better. It is a team effort and they are just as much a part of our team.  If you are interested in learning how to become a part of our team, even if it is only as a LP investor who lets us do all the work, schedule a time to get on a quick 20 minute call so we can see what your goals are and if we might be a good fit for you.

Until the next adventure…..