UPCLOSE & PERSONAL
providers earn their way into a bigger footprint and more business, and that, in my opinion, is the best way to do it for their peace of mind and mine.
TRM What is the most common prob- lem you encounter in your business?
JW Many of the requests we receive are about HVAC issues. When HVAC compo- nents break, you have no choice but to address them. They’re a “non-negotiable” part of rental real estate no matter what type of properties are in your portfolio. At Motili, we perform diagnostics as well as repairs, replacements and preventative maintenance. Often, clients contact us reac- tively when a problem is discovered. We’ll get calls from clients saying, “The HVAC is out. Can you dispatch a technician to take a look? If the cost to fix it is below $X, pro- ceed. If it is above $X, send me an estimate to approve.” Clients often repeatedly repair a unit, making each decision in isolation rather than looking at asset metadata [all the information on the product they are repairing] and broader service history [of that product]. This drives up costs and leads to problems with tenant satisfaction. We try to get clients to think holistically. What service plan will minimize the total cost of ownership and maximize tenant satisfaction? When prior service data and asset data (such as date of manufacture or unit efficiency) are both analyzed, an optimal HVAC maintenance/repair/re- placement program can be designed. JeffWilkins is the CEO and director of Motili, a national company offering a network of repair andmainte- nance contractors on local levels. Motili works with real estate investors specializing in single- andmultifamily residential properties, commercial spaces including self-storage, senior living, hotels, and retail chains, and with banks on REO properties. Learnmore about Motili and its vast expertise at www.thinkrealty.com/benefits.
TRM Is finding that “magic” combi- nation an issue of trial-and-error?
Going Bigger Shouldn’t Mean Bigger Headaches INVESTORS SCALING UP OFTEN OVERLOOK THE BEST SUPPORT SYSTEMS.
Note: A good way to validate savings is to send the provider some sample jobs to work, or even have them price out some previously completed jobs and measure the savings.
JW Absolutely not. There are many specific things you should require. A good vendor should provide the 3Ss: simplicity, savings and strategic insights. Simplicity is provided by outsourcing the minutiae of project management to a trusted third party. It saves a lot of time and headaches versus creating and managing your own contractor net- works. It also provides accountability with a single throat to choke. Savings are achieved when providers aggregate buying power. For equipment and parts, it arises by sourcing directly from the manufacturer and avoiding all the mark-ups in a multi-step distribution model. A good vendor also provides access to premium contractors at discounted la- bor rates. Due to their higher volumes and greater buying power, national providers can typically extract larger discounts from their vendors and share those savings with the clients. In a major category like heating, ventilation and air conditioning (HVAC), costs from a national provider will often be 20-30 percent less than what an investor can achieve themselves work- ing with a local contractor.
Strategic insights, the third “S,” are all about the ideas and best practices to op- timize your spending. It is generated by benchmarking your approach and com- paring it against other companies like your own. Using analytics and reporting, it is also possible to model the impact of repair or replacement on lifetime costs. TRM Do you find most investors want to test you out first, or do most of them jump right in? JW In my own experience, I can only think of one or two real estate investors who called me up and immediately said, “Here’s 100 percent of my portfolio. You are our sole supplier and will handle everything starting now.” Nearly every real estate investor I’ve ever met likes to take things slow and test the waters. They prefer service
by Carole VanSickle Ellis
e’ve all heard the phrase, “bigger is better,” but many real estate
learned about how to vet these operators and what maintenance issue is most likely to affect your bottom line. If I’m a single-family investor who wants to expand into multifamily properties, do I really need a national service provider or property manager when I’m starting out? Obviously, every investor is different. Some come from a contrac- tor background or are strong operators better equipped to take on these service tasks. But even these investors can benefit from using a service provider delivering a good combination of people, processes, and technology to make that THINK REALTY MAGAZINE JEFF WILKINS
kind of portfolio work. The right combination is what will deliver the solution. That means that you do not just need a software platform; you also need a team or operations staff backing that platform up to ensure service-levels and response times are met. You need a robust supply chain and aggressive purchasing team to achieve the best pricing. These are all pieces of the puzzle that deliver outstanding performance and savings. Now how do you stitch together the right combination of people, process and technology? It’s virtually impossible for an investor to replicate [the variety of combi- nations] available through a national pro- vider. Given how easy and cost-effective it is to use one, there is no need to do so.
investors struggle with making sense of the notion that bigger can be simpler as well as more profitable. When it comes to managing large portfolios of single-family properties or handling the day-to-day operations of a multifamily portfolio, it can often feel as if bigger headaches are the main thing that comes with bigger real estate investing. Jeff Wilkins, CEO and director of Think Realty Benefits provider Motili, says if stress, headaches, and expense are keeping you from scaling up in your real estate business, the issue may well be that you’re simply trying to manage it yourself or leveraging a local resource. Think Realty Magazine sat down with Wilkins to dive into the idea that going bigger actually makes things easier. We
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