MReport March 2020

TheMReport — News and strategies for the evolving mortgage marketplace.

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26 | M R EP O RT FEATURE tion here would seem obvious. It's a retention issue, so your job as the entrepreneur is to fix reten- tion. In the real estate business, most investors don't think this way—or rather, they understand the prob- lem, but they can't come up with any actionable way to solve it. Again, put yourself in the customer's shoes. What are the things that would make someone fall in love with living some- where? Convenience is always at the top of that list. If, every time they have a repair request, it takes you a week to get back to them, they aren't going to like being your tenant very much. Or, if you aren't proactively improving the property and increasing the value they're getting, they're going to feel like you don't care about the place—which they may assume means you don't care about them. These are the same judgments people make when assessing whether or not they want to continue living in a 16- or 32- or 64-unit apartment building. Why treat the customer differently just because they're living in a home? 03 Continue to Add Value L ittle tweaks and renovations can go a long way. When I was running Crestar Homes, we used to always look for ways to make our properties look more modern and appealing. Especially when it comes to SFRs, your customers aren't looking for a college apartment—they're looking for somewhere they can settle down, even if it's only for two to five years. When they are comparing your properties to other options in the market, they are paying attention to every little detail. • How new are the appliances? • Are the walls pure white or light beige? • Where are the outlets in the living room? • Does this place have carpet or is it all hardwood flooring? As an entrepreneur, it's your job to stay on top of what people are looking for, and then make adjustments as needed to increase the value of your property. For example, we found that people didn't like pure white walls; they much preferred off-white or beige. We also saw that kitchens without tiling around the cooking area required significantly more cleaning, so installing tile on the walls behind the stove and sink was a minimal investment that made the kitchen feel much more elegant. These small efforts were cost- effective but made a world of difference in terms of attracting and keeping tenants. 04 Build Relationships With Your Tenants W hether you are an aspiring real estate entrepreneur or you are looking to scale your exist- ing business, you should always be thinking about how you can build better relationships with your customers. How often do you check in with them to see if they need anything? How do you (or how does your company) interact with them via calls and emails? Are you friendly? Do you find little ways to go above and beyond if they let you know the dishwasher is broken or the toilet won't flush? When a customer starts thinking about moving, all these little mo- ments are going to flood into their mind. If they can recall positive, warm experiences, they are much more likely to stay. But if they have a laundry list of all the times you let them down, you better believe they are going to start looking at your competitors. Some of the ways you can show tenants you care are: • Make a positive first impression as soon as they move in • Communicate openly about repairs or minor inconveniences that may impact their day-to- day living • Make cost-effective upgrades to ensure the home continues to feel "like new" • Resolve complaints quickly and effectively • Get regular feedback from ten- ants on ways the property can be improved You don't need to reinvent the wheel in order to be a successful real estate entrepreneur. In all of my businesses, I never invented anything. I just took existing businesses and executed better than the competition. In real estate, most people rarely think about customer service. They just think about how to acquire a property for the cheap- est cost and how to charge the highest rent—when in reality, if customer service is a core prin- ciple of your business, that's what is ultimately going to differentiate you from the competition. The customer has to come first. And the more you can make them feel at home, the longer they'll stay. . BILL GREEN is the CEO of LendingOne which he co-founded in 2014. LendingOne provides real estate investors financing for single family and multifamily bridge loans as well as rental term loans. Bill is also the Managing Director of Crestar Partners which is currently comprised of a portfolio of private equity and debt investments. Prior to forming Crestar, Bill was the CEO of Interline Brands (aka Wilmar) after founding the company in 1977. Running a single- family rental business should be viewed like any other business. Your renters are your customers, and your customers deserve special attention. To you, this might just be a property in your real estate portfolio, but to the customer, this is their home—so, make them feel like it.

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