When a Bay Area property developer first approached us, they were facing a litany of problems in their 3-building community called Diamond Creek Apartments in Morgan Hill, California.
Positioned as luxury homes, this Class A real estate community was constructed in 2015-2018 and managed by one of the largest traditional multifamily property managers in the region, with three full-time staff and a maintenance team on-site.
But the company soon found itself struggling to properly manage the 102 units it runs and leases, beleaguered by many issues that also stunted its revenue growth.
Unmasking the challenges
In its first five years, Diamond Creek’s property manager went through a costly cycle of staff turnover. management issues, and legal liabilities caused by its violation of fair housing rules, delayed bills payment, and negligence in property maintenance.
Diamond Creek owners faced stiff fines due to unpaid bills and overdue inspection requirements. They also incurred huge costs as the property manager allowed unnecessary daily on-site maintenance visits and avoided or neglected maintenance requests. The latter, as well as some residents, also outsourced all of their maintenance to 3rd-party companies that had hefty price tags.
Diamond Creek apartments were also rented out at 5 to 10 percent below market due to a lack of insight into current market rates, which negatively impacts its profit margin.
The property manager’s outdated pen-and-paper system also did nothing to help them, aggravating their problematic operating procedures that lacked transparency on where they were bleeding money, resulting in rising leasing and management costs.
Taking over with tech and expertise
As insurmountable as these problems sound, we were excited to jump in knowing that our tech-enabled business model was exactly what the property owner needed to help put order into their property’s operations and give them better financial outcomes.
The owner partnered with us to take over the management of Diamond Creek in December 2020. They wanted to achieve transparency and efficiency, reduce maintenance costs and staffing needs, as well as to attain better ROI.
With our robust technology infrastructure and modern cloud-based model powered by Al, they knew they could achieve all that.
Creating unprecedented results
In the first 30 days, our team and technology provided the owner with real-time market analysis and opportunities that would maximize revenue. We brought below-market units up to the most competitive rates for new leases. This resulted in a 3-5% increase in rental rates for units turned over or with renewed leases.
Within 60 days, we’ve helped the owners reduce management costs by 30%. We placed an on-site Resident Manager and provided in-person executive sponsorship during the transition (at no additional cost).
We digitized all their operating processes and systems, creating transparency for the owners and reducing staffing needs from three persons to only one (required by CA law).
We also reduced maintenance costs by 30%. Using our technology, residents were able to submit maintenance requests online through their renter portal. Maintenance work that used to be done sporadically in days or weeks, was consolidated into a once-a-week collection of work orders and tasks.
The tech-based system provided the owners with more transparency and allowed maintenance work to be completed in a cost-effective manner.
Home Services Team to the rescue
Our in-house Home Services Team attends to 85-90% of all work orders for reported maintenance issues in Diamond Creek, while the rest goes to licensed vendors within our Prime Service Provider Network.
We helped the owners overcome previous maintenance issues and repairs that were promised but never delivered.
All these significantly reduced the $8000 a month paid by the former property manager for the on-site 3rd party maintenance, which did not include cleaning of common areas, billed repairs, and overtime.
Achieving goals, reaping rewards
It was rewarding to witness Diamond Creek turn around for the better. and deliver true value and freedom to the owner as they achieve better financial outcomes.
As we set out to provide the most innovative. painless. and accessible full-service real estate experience to our customers and partners. we’re heartened by the feedback the property owner was kind enough to give us.
Recent Comments