Company: Integrity Asset Management LLC
Number of Units: 617
Place of Business: Houston and Stafford, Texas
Apartment Associations: Houston Apartment Association (HAA) and Texas Apartment Association (TAA)
Q:How long have you been an owner?
A: I purchased my first apartment community in April 2007.
Q: What is the greatest value that NAA and your local apartment association provide for your business?
A: In short, knowledge and connections. I’ve learned a tremendous amount by attending local HAA functions and I send my staff to training events sponsored by HAA. My senior staff attended the 2011 NAA Education Conference & Exposition, where they learned a lot based on attending education sessions. I greatly appreciate the contacts I’ve made and nurtured in all of my apartment associations and I can confidently say that there are few problems onsite now that
I cannot solve through the thoughtful and professional feedback from them and their staff. NAA, TAA and HAA are all a part of my safety net and the knowledge available to me through them has taken a lot of the sting out of working toward succeeding in a new business.
Q: Are there specific budgeting or operational strategies that you’ve employed during the current recession to offset the hike in vacancies due to the economy?
A:Surviving through the current economy has been painful to the wallet. It still makes sense to make available the best product at the best price. We’ve had to offer rent specials like everyone else in our sub-markets and we’re not making as much money as we used to at one of my properties, but our survival is all but assured thanks to my diligence in buying deals at the right price. The owners who are suffering the worst are the ones who paid too much for their properties or who financed with high leverage.
Q: What are some successful marketing strategies that you have used to promote your rental properties?
A: My two properties each take different approaches to marketing. The smaller one relies almost exclusively on word-of-mouth and resident referrals. This has proven to be enough to keep 175 units virtually full month after month, year after year. In cases when we did try to market this property through advertisements, the ads yielded almost no traffic. Filling the larger property has been more challenging. We have had to offer more aggressive specials there and have used the usual methods of print and Internet advertising, resident referrals and locators. We even hired a guy to stand on the street and wave a directional sign. In this economy, you have to pull out all the stops.
Q: Due to the current economic climate, there are great investment opportunities available. What would be your recommendations for owners who are interested in adding to their portfolio?
A: There are some great deals out there right now, especially in properties that were purchased before the economy went stale. I’m getting calls from brokers almost every day and a lot of the deals look pretty good. I wish I could buy them all. Unfortunately, there are a lot of buyers out there, too. The word seems to have gotten out that Houston is a hot market and a lot of individual and institutional buyers are looking for conservative investment opportunities and believe that apartments could be their key to making money in a down economy. Buyers should establish good relationships with a few brokers so that you can look at a lot of deals when they become available. When buyers are competing, you end up in and out of negotiations a lot before closing a deal. Being in and out of negotiations all the time and losing deals to others is frustrating, but persistence and a cool head pay off in the end.
Q: How are you managing key operational components such as maintenance and how are you controlling utility costs?
A: I still have a robust and well-paid maintenance staff at both of my properties and they are able to better serve my residents and to maintain the quality of my assets. Short-changing maintenance is not a part of my business model. Instead, I get personally involved in all maintenance product and service contract negotiations to get the best deal. I replace aging infrastructure, such as boilers and air conditioners, as soon as I can. I was quick to implement a water conservation program. This has trimmed 40 percent to 60 percent off my utility bills.