By Stan Phelps, Project Manager with Nexus 5 Group
Multifamily ownership often consists of investment groups that don't live in the same city as their assets. Sometimes ownership just doesn't have the time to devote the needed attention to projects happening with their assets. Many times, they rely on on-site staff for project management and supervision. I know a few supervisors and managers that can do these things, but the majority are not qualified.
So many times, I've seen ownership get taken advantage of by contractors who are there for the quick buck or flat out don’t know what the hell they're doing. These contractors can cost ownerships thousands of dollars... not to mention unknown liability that could eventually cost millions.
The answer to this problem is to have someone on your side that has a vast array of construction knowledge as well as experience in the multifamily industry. The question is often where can you find someone with those kinds of credentials these days? (They're somewhat of a unicorn.)
25 years plus in the multifamily business ranging from maintenance to management on the property side and project management to owners’ representation on the vendor side has rounded my experience into the perfect fit for multifamily owners’ rep property acquisition and renovation. Nexus 5 Group has enabled me to direct a division of our company to concentrate on multifamily owners’ rep work because they've seen the value and positive response creating a stable of loyal clients.
Matthew R. von Ende, Cohen Esrey Vice President of acquisitions had this to say about Nexus 5 Group owners representation projects:
“Nexus 5 Group bring decades of experience to the table. They have been our go-to and trusted source for exterior renovation projects across our portfolio. Cohen-Esrey Apartment Investors has benefitted tremendously from the depth of Nexus 5 Group’s experience and expertise.”
Managing the Budget
The big advantage of owners’ rep work is that we take care of the entire renovation budget from start to finish. This means being a part of due diligence to inspect the property for repairs and renovations, meeting with ownership to establish the renovation and repair budget and then executing the plan at property takeover.
These projects include everything from site amenity areas such as pools, fitness centers, clubhouses, outdoor kitchens, dog parks, package centers and even blogging rooms. Also included are the repairs and or esthetical improvements such as façade renovations, concrete, asphalt etc. We coordinate any project on the property.
Of course, there is a process to all of this. We hire qualified people. We put together budget spreadsheets with financials as well as get three estimates for every project and submit the project to an asset manager and or ownership for approval before starting projects. All of this is time consuming, and with staff shortages across the nation, it can be a huge burden on the property staff, ownership and investors.
Twenty-five projects can mean seventy-five estimates. Seventy-five estimates can mean over a thousand phone calls. This process can be overwhelming to management and ownership which can lead to quick decisions and not enough research that ultimately results in shoddy, overpriced work.
We have a proven track record that owners’ representation works. Several properties that the Nexus 5 Group has provided owner’s representation services have sold for a profit margin ranging from 12 to 25 percent. This profit alone is great, but having Nexus 5 Group thinking and working as if they are ownership partners of the asset is where the benefit of owner’s representation is realized. After completion of the renovation, we stay in constant contact throughout the ownership of the property to offer assistance and guidance.
If you need owner representation for renovation work on one of your properties, please give us a call!