REI INK

Asset Management

Implementing Innovative Technology for Asset Management

What to Look for in Field Documentation Software By Nicole Henry Maximizing value while minimizing risk is key when it comes to asset management. However, finding that sweet spot between too much risk and too little return is a cumbersome task. It requires extensive time, effort, and may end up tipping the scales out of your favor. If you are unable to be on site while your property is being renovated and made ready for market, that thin line you walk between risk and return can shrink even further. When time and money have been invested, ensuring mistakes and excess costs are minimized while keeping stakeholders happy is essential. This is where innovative technology comes into play. What is Technology? It might seem obvious to most what the definition of “technology” is, however it may not be so cut and dry. Merriam-Webster’s dictionary defines technology as “the science of the application of knowledge to practical purposes” or in layman’s terms: to use information to achieve an end result. This means using a pencil to check off a box on a punch list after completing a task is technically considered a technological function. Taking it a step further, using your camera phone to take photos of the property for documentation purposes is also considered a technological function. Some questions to consider when technology is in use:  »         Am I completing a task in the most effective way I know how?  »         Is the information I am using up to date?  »         How do I know if what I am using is the best option?  »         How can I effectively manage my assets if my tools are wrong? Let’s look at the current processes in place and the gaps that could be affecting your asset management. Location Depending on your business, your portfolio will have properties in different areas of a city, state, or country. Regardless of the location, one thing is certain: you cannot physically be in multiple places at one time. With the evolution of technology, tools can be deeply connected to each other. A small, portable computer capable of endless possibilities, aka a cellphone, has made it possible for us to stay in contact with one another. This handy device can keep our contractors, investors, and other stakeholders up to date while also providing a basic solution for documentation thanks to the camera located on nearly every device. One thing our phones cannot do is connect all parties in one central location instantaneously and retain that information. Those photos your contractors took are most likely stuck in their camera roll or a long-lost text message. What about the other contractors working on that same project? How will they know if the job is finished early or hits a snag, pushing back their start date? And what if that device is broken or stolen or that contractor leaves your employ? That documentation is gone, potentially forever. Accessibility Being able to get in touch with your contractors, clients, investors, or any other stakeholder is essential when ensuring that your assets are being managed appropriately. This is especially true when all who need to be in communication can be easily and effectively reached. Current processes may include communication software like Whatsapp, text messaging, emailing, or sharing cloud storage platforms. While these platforms are effective at connecting people to documentation, there is an investment and recurring cost in time that must be spent. This recurring cost may come in the form of uploading and downloading (or reminding others to do so), sharing folders, granting access, repeating information in multiple channels (text messaging, emails, etc.) and keeping track of said information that has been shared and with whom. Overall, it is an organizational nightmare and cause for potential liability concerns. Liability When managing your assets, there are a lot of moving parts, some of which can be harmful and dangerous, even deadly. Ensuring that those on your property sites are following safety procedures and using methods that will in turn result in a safe end product ready for market is imperative. Being reliant on those you are working with to document safety procedures because you are unable to oversee processes in person requires a lot of trust. Keeping quality standards high without your direct oversight creates additional room for transparency issues, not to mention instances where the only answer is “I don’t know.” Those unknown factors can put a dent in your finished product, not to mention how potential investors and other stakeholders view your company. Enter Innovation Punch lists, camera phones, and other solutions may sound familiar to you or may be currently implemented in your process of managing your assets. The real question is, are the processes you are using the most effective for what you are trying to accomplish? If there is a risk of losing documentation due to storage issues, device security, or manual work that can be hindered by human error, there may be alternatives to better protect your assets and increase your ability to enhance your portfolio. Innovative technology can give you access to your properties, employees, partners, and clients all at the touch of a button. So why dip into your resource pool to continue upholding systems that are not working as effectively and efficiently for you if there is a better option? When looking to innovate your current systems, you will want to ask yourself the following questions:  »         Am I able to easily access the documentation of my portfolio assets and oversee job progress easily without being impeded by others?  »         Am I able to communicate with my contractors, partners, investors, and other stakeholders easily and efficiently?  »         Am I able to keep my documentation and communication records organized with little to no time spent? If the answer to any of these questions was “no,” you may be a good candidate to start looking for improved field documentation software to ensure everyone is on the same page with information accessible to all. How Do

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What Your Networking Strategy is Missing

Build Relationships with Trustworthy Suppliers for Operational Efficiency By Fred Harris Networking is quite the buzzword these days. You have probably watched the TED Talks, read the articles, and seen all the research and statistics. And you have experienced firsthand the value that connections make to support solid real estate portfolio investments. But what if your networking strategy is still missing something important, such as direct relationships with your building material suppliers? The challenges of the past few years have made this gap financially painful for many investors. Project delays, missed opportunities, frustrated tenants, and slow turns are not the hallmarks of growth for a portfolio. Partnering with a trustworthy supplier can ease and potentially eliminate these problems in the most challenging market conditions. But even more important than reduced costs, a strong relationship with a dependable supplier can have a meaningful impact on the ongoing increase in value for your investments. Here are some key points to consider: Negotiate Pricing Directly Times have changed, and new lines of communication have opened up. More than ever, manufacturers and suppliers are open to direct conversations. Previously, access was only given to contractors, installers, or developers. The agreements were guarded and exclusive. Now, suppliers are not just open to direct communication, but eager to establish good relationships. This opens up significant opportunities for real estate investors and asset managers. Leverage Your Buying Power You have a lot of leverage and buying power when you walk into a negotiation armed with information about the number of units and turn rates across your properties. That is not the time to hand over the reins to someone less experienced, knowledgeable, or persuasive. That is the time to send in your expert negotiator to secure the best deal for your building materials. Discover Your Actual Costs for Labor and Materials Recent years have seen an unprecedented fluctuation in costs across all categories, including labor and building materials. The constant change has increased the risk of blind spots and potential vulnerabilities when contracting with one company to provide both labor and materials. Markup is a standard practice and can be handled in a manner that is fair to both parties, but how do you really know if you are paying a fair price? You cannot know unless you negotiate the price directly with the supplier. Removing layers of obscurity provides valuable insights about your true costs, increases your ability to forecast, and helps protect you from being taken advantage of in a volatile economy. Protect Your Day-To-Day Operations Good relationships with building material suppliers also provide tremendous benefits for ongoing operations. Teams working on-site deserve a lot of credit for the complexities and frustrations they deal with through the maintenance requests and unit turnover process. When disruptions happen, it quickly becomes like a train of dominoes. How can a direct relationship with suppliers help with any of that? Consistent Materials Improve Efficiency Nothing burns time and money like trips to the hardware store. By working directly with suppliers, you can standardize the parts and materials used across properties. This may sound like a minor benefit, but it compounds and grows with time. Six months down the road, maintenance crews know exactly which parts they need, which tools to use, and have experience to do the work quickly. This should be in the top ten of things you do not want to hear: “Well the last time work was done in that unit they used a different type of [insert-building-material-here] which is a different size so our [insert-normal-part-here] does not fit and we have to special order the part or redo the whole thing.” Consistently sourcing materials from manufacturers provides efficiency in supply, storage, labor, and training. Consistent Materials Ensure Quality Roughly 30% of all traffic accidents occur during a lane change. These accidents happen between vehicles driving the same road in the same direction at similar speeds. That is a good analogy for the increase in risk when changing the source of building materials. Manufacturers use different standards, material quality and testing tolerances, so even products that look identical cannot be trusted to be identical in performance and quality. Luxury vinyl plank flooring is the fastest growing category in flooring and has caused a flood of many similar products into the market. Yet each is designed, engineered, and manufactured differently. You will experience an unpredictable range of issues if your units have flooring from different sources. Some products will expand and contract more than others. Some will last longer and can be preserved across multiple tenants. Some products will transfer more sound and annoy occupants of lower units. Consistent Materials Stabilize Operations Asset management is like a box of chocolates; you never know what you’re going to get. That is true, unless you develop a solid relationship with building material suppliers that you can rely on to get the right products for your properties. Avoid the perfect storm of empty units, upset tenants, unpredictable products, and unreliable suppliers. Level Up Your Strategic Planning Negotiating pricing directly affects the bottom line. Consistent sourcing protects the day-to-day operations. Now you are set up to score real growth for the future. As you set your eyes on the horizon, make sure these additional elements are included in your supplier agreements. Predictable Timelines Do not make the mistake of only negotiating price. The best price on the market does not mean much when delivery will be four weeks too late. One major advantage of a direct relationship with the supplier is that you can work together to ensure project timelines include the appropriate lead time. An excellent supplier will also keep you in the loop for any timeframe changes. Secured Inventory There may not be a bigger travel-related frustration than arriving at the airport and discovering that the airline oversold your flight, and your spot is in jeopardy. Unreliable suppliers have no problem selling to others the stock reserved for you. That terrible approach to business forces you to delay

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Adopting A Strategic Asset Management Philosophy

Achieving Optimal Execution on Investment Return or Recovery By Ryan Hennessy Success in managing a real estate portfolio is traditionally measured by return on investment or loss recovery. While these measurements can be easily calculated, to truly maximize them requires a comprehensive understanding of critical inputs, the impact of controllable and uncontrollable variables, and prioritizing the decisions that are more crucial to the management or liquidation strategy. Recent history has shown that interest rates hit modern lows and property values rapidly appreciate driven by an extremely aggressive buyer’s pool, amidst a global health pandemic. As we enter a new real estate cycle, we are currently experiencing a cooler real estate market impacted by declines in new purchase loan originations and refinances, and inflation, as the word “recession” continues to be utilized when classifying the state of the economy. As these trends often align with additional opportunity within the real estate owned (REO) and distressed real estate asset classes, adopting a strategic asset management philosophy is imperative. Two Types of Portfolio Owners Portfolio owners can often be classified into one of two categories: those where their strategy dictates their portfolio and those where their portfolio dictates their strategy. The former is often comprised of those with a hyper-focused management strategy within a few key market areas. The strategy box dictates the portfolio as very rarely will an asset be acquired that falls outside of the investment objective. The latter to the aforementioned is often comprised of those with a more global strategy, either investing in national pools of assets or mortgage debt, or financial institutions servicing mortgage debt related to delinquent loans. In this instance, assets will enter the portfolio in various markets with diverse property specifications, condition, and risk or opportunity, requiring a strategy to be determined while the asset is under management and not determined prior to it entering a management or owned status. The paradox of these types of portfolio owners is that they each strive to be the other. Those with a more concentrated strategy often aspire to expand, be it geography, property type or both, while those with a more global approach aspire to have a more local approach as to further maximize opportunity. The Critical Inputs While advancements in technology have made data more attainable and resources more tangible, identifying strategies at an asset level, as well as key drivers that may require a pivot, is not an automated process. As such, maximizing opportunity or mitigating risk requires a flexible process driven by four critical property-level inputs: occupancy, value, intangibles, and geography. Occupancy While the essential data point is tied to status – occupied, occupied by possession, or vacant – leveraging data to better assess the cost implications is a key component of a strategic approach. Through example, a best practice approach when geographically applicable, is to understand projected costs that may be incurred when considering an eviction as this will help determine a breakeven amount to leverage as an offering for relocation assistance (cash for keys). This can be determined by aggregating cost data surrounding state-based attorney fees, trash out/debris removal probability costs, and property taxes incurred during the eviction process based on state-driven timelines. The sum will help determine the relocation assistance vs. eviction breakeven cost to consider within the overall management strategy. Value While value is often analyzed during the acquisition due diligence or mortgage servicing phase, valuation tools that are leveraged are derived from a more cost-effective approach, therefore reliant on general market data, or are assigned to a local professional without sharing insight into the use case of the valuation. In both instances, the impact of a property’s condition on current and potential value is often either unable to be determined or overlooked. Properly assessing all elements that go into determining value, with emphasis on those that can be aggregated through data resources, such as multiple listing service market data, provides the required resource within this variable. Intangibles A component often overlooked are the intangible inputs associated with asset management, namely title, taxes and liens. While a property might be in a marketable state desired by targeted buyers, failure to analyze these items can hinder or prevent a sale to a prospective buyer, especially if the buyer is obtaining financing. Properties acquired via foreclosure sale or assets that migrate to an REO status via foreclosure often have delinquencies or defects associated with them. Building taskings or triggers to obtain title or tax and municipal lien reports will drastically impact management strategy. Geography Diversity in geography causes different considerations in asset management, from the impact weather can cause to the prime windows for “selling seasons.” An additional consideration is the velocity geography can bring when leveraging both rental and liquidation strategies. Understanding the forecast of a portfolio, especially those across diverse geographies, will assist in either expanding or narrowing down management options. As an example, a property located in a one-off market may be ideal for a rental, however, this strategy may not be logical without additional opportunities to bring assets under management in that same geographic. Effectively aggregating data on the above better supports an asset-level decision, which can include repaired sales, as-is sales, auction, conversion to rental, or alternative disposition methods (deed-away, donation, pools sale, etc.). When managing a real estate portfolio, management strategy determination is the tier-one driver that all other supplemental decisions will be made from. For example, if marketing a property, determining an initial list price is a crucial decision but determining this is subsequential to the strategy. While the decision to be aggressive or conservative with pricing will impact projecting marketing time, the variance in price between an aggressive and conservative strategy is nominal given the strategy was already determined. As we enter changes within the real estate market and overall economy, the availability of data, technology platforms and integration with various providers provides information to investors which allows them to make better decision on their portfolio assets while also creating a more competitive

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HVAC Preventative Maintenance

Identify Problems Before They Become Costly Emergencies By Ray Hespen The extreme swings of cold, heat, and humidity can cause stress to heat and cooling equipment. Preventative maintenance on your HVAC systems is often held off for the summer months when residents turn off their A/C unit for the winter. However, there is a better way to protect your investment in equipment. What is HVAC preventative maintenance? HVAC, which means “heating, ventilation, and air conditioning,” is the system that keeps your home and rental units at optimal temperatures. It keeps your home warm in the brutal winters and cool in the sweltering summer months. HVAC preventative maintenance is cleaning and assessing the system’s components to ensure it is operating correctly to avoid future problems. For example, not changing HVAC filters or coils regularly can lead to leaks that will wreak havoc on your HVAC system. Why is HVAC preventative maintenance essential? Improves the overall health of the home Consider your HVAC equipment as the main artery that keeps the heart of a home beating. When the cooling and heating system operates efficiently, the entire home benefits. Alternatively, poor equipment can result in increased negative impacts. For example, if your heater is not running correctly in cold temperatures, you risk other major, costly home issues. So why can’t you turn it off once in a while to prolong its life? There is a high chance that when you turn off your heater, the temperature can dramaticallydrop and ultimately freeze your pipes. How is that possible? According to Mid Atlantic HVAC, the frozen water in the pipes can expand, burst, and even flood the home. Water damage will cost you more than paying the heating bill. Preventative maintenance routines can reduce the risk of costly maintenance issues by 95%. Imagine being able to tell your property owner that you are extending the life of their assets while saving them money. Improves owner satisfaction and retention Speaking of property owners, keeping their property in optimal shape is essential to owner satisfaction and retention. Your owner’s property is an investment, and they trust you to ensure that their investment is maintained. Save thousands of dollars lost in HVAC repairs and avoid owner churn by spending a little time and money to do routine inspections. Improves resident satisfaction and happiness It is no secret that a smooth-running HVAC system keeps your residents happy. At Property Meld, data shows that satisfaction ratings and maintenance issues are inversely related; when problems arise, ratings drop, and when issues drop, ratings rise. The length of time you have to repair an HVAC issue before a resident becomes disgruntled — and leaves a negative review — is shorter than with any other common maintenance issue. Our data shows that property management companies have just 72 hours to fix an HVAC issue. If it takes any longer to repair, the chances of a resident writing a negative review skyrocket. Regular preventative maintenance ensures that everything will run smoothly, reducing the chance of resident churn and negative reviews. Decreases cost of repair in high demand seasons If you want to keep your maintenance costs down, your best bet is to avoid emergency repairs in high-demand seasons. When there is high demand for a vendor or technician, the price of their work will likely increase as well. In addition, if a priority maintenance issue occurs, you have little choice but to hire a technician regardless of the timing or price. Implementing regular check-ups for your equipment will save you hundreds and thousands of dollars from emergency repairs during peak seasons. Less stress on internal staff Many businesses are experiencing inadequate staffing levels. The last thing your property management company needs is a flood of residents calling simultaneously about their AC unit breaking down. By simply taking preventative measures with regular inspections, your staff can put their efforts and time towards tasks that profit your company. HVAC Issues by Season and Region HVAC issues by season When you think of the worst time for HVAC repairs, you probably imagine a sweltering early June day when thousands of air conditioners kick on for the first time of the year. However, according to our data, the most expensive month for maintenance repairs is September. The average HVAC repair invoice is $435 — 21% higher than the average repair cost. The second most expensive month is February, where the average invoice is $416 — 15% higher than the average cost. That sweltering June day? It comes in at third, with an average invoice equaling $407. HVAC issues by region In addition to seasonal issues, each region is unique and can experience different fluctuations in repair costs depending on HVAC vendor demand. Southern United States: 50% of all HVAC service issues in the south happen during the summer. In addition, the monthly repair request invoice is 123% higher than off-season invoices! Northern United States: The monthly average repair request invoice is 61% higher than an off-season invoice during the winter months. HVAC Preventative Maintenance Tips and Checklist Preventative programs emphasizing routine inspections are a great place to start. When you create a system of regular check-ups for your property and assets, you are able to identify problems before they become costly emergencies.  »         Perform spring cleaning. We recommend cleaning the HVAC system’s air condensers and filters. This work will come at a cost to your company. Still, it will avoid expensive emergency repairs duringthe peak season.  »         Consider charging an administration fee for preventive maintenance. It is reasonable and fair to charge an annual administration fee for HVAC preventative maintenance. The additional revenue will come in handy to invest in replacing new units down the road.  »         Perform an inspection during a resident turnover. Another tip is to integrate HVAC inspections into your resident turnover program.

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Now Is the Time to Winterize REO Properties

Expert advice to get ready for winter by Andrew Oliverson The enormous demand for rental housing and the scarce supply of new properties has created white-hot conditions for those with inventories of well-kept, salable assets. But cold weather comes to even the hottest markets and as winter approaches, it is wise to take actions now to keep those properties ready for the sunnier days ahead. The timing is critical as acting now to winterize assets is the best way to avoid having an otherwise valuable home fall into disrepair. There are several steps to take when preparing a vacant property for the winter. Ideally, to ensure the protection of assets from the seasonal elements and to help identify and address any potential maintenance issues before cold weather sets in, properties should be spruced up in the early fall and winterized soon after. Winterization should be thorough enough to maintain the property in good order from early October until the end of March or longer, depending on the local weather and temperatures. In addition to identifying and addressing any urgent interior maintenance issues, a decent fall spruce-up should include a focus on exterior conditions: Remove all exterior debris. Perform a final lawn cut and remove all grass clippings, leaves, limbs and debris from the property. Leaves, pine needles and twigs should be removed and disposed of offsite in an appropriate manner. Flowerbeds, driveways and sidewalks should be edged. Remove all weeds and saplings from flowerbeds and around shrubs and fence lines. Weed-wack around the house, fences, and trees, and remove dead vines from fences, latticework, etc. Remove all fallen limbs and excessive leaves from the roof. Clean out gutters and remove all holiday lights. If there is a gutter guard, replace it after cleaning out the gutters. Prune branches from trees and shrubs that encroach on entryways, walkways, or sidewalks and trim at least four to six inches from the house or roof. With the property looking well-kept on the outside and in good working order on the inside, listing brokers should turn their attention to winterization and consider some of these best practices:  Electrical and heating services should be up and running and must remain on. The temperature within the home should be set at a reasonable temperature to prevent interior freezing (usually above 50 degrees).  If the property requires significant plumbing repairs or when a boiler is involved, a general contractor, licensed plumber or an accredited entity with the professional expertise should complete the winterization. If the property was winterized prior to your adding it to your inventory, it should be re-winterized to ensure that every step has been taken properly.  If the property is frozen when it comes into inventory, obtain bids to thaw the pipes prior to winterizing. The year 2020 has been a roller coaster for all of us. The pandemic and the responses to it have contributed to distortions in the real estate market. In our industry we’ve seen glutted real estate markets suddenly heat up and clear in a matter of weeks. But until conditions improve, the market for real estate will continue to experience extraordinary market-to-market fluctuations. Taking basic tried-and-true winterization steps will protect homes well into the cold winter months and bring a level of certainty into uncertain times.

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Acquisition and Asset Management Strategies for Bulk SFR Portfolios

The maturing of the SFR asset class by Russell Schmidt The Single Family Rental industry continues to mature into a standalone subsector of the commercial real estate space. As the space gets more crowded and competitive, SFR investors will need to adapt and develop advanced acquisition and asset management strategies compared to the previous “buy everything and figure out operations later” strategy. Early movers such as Invitation Homes and American Homes 4 Rent were able to amass large portfolios of SFR’s at steep discounts beginning in 2012 due to a massive supply of distressed properties. Homes were repaired and turned into cash flowing assets and investors saw huge gains as housing values steadily rebounded over the following years. Today’s SFR landscape is shifting into the next phase, as the initial entrants that (correctly) bet on a sharp and quick rebound in values are now being joined by new capital willing to acquire at elevated price levels, sometimes even matching ‘market’ prices, to satisfy their yield and capital deployment requirements. The original SFR operators successfully demonstrated that capital can be deployed into the space at institutional-quality scale and efficiency, bringing in other institutional investors eager to match the strong historical proven returns the space can offer. Simultaneously, the rapid growth of SFR-specific debt lenders and tech-smart service providers have made it easier for new investors of any size to gain exposure to the asset class. Couple this with record-low mortgage rates, strong home buying demand from owner-occupants, and an already-constrained supply of houses, and the result is a strong downward pressure on cap rates and a lack of deals appealing to investors. Moving Forward What does this mean for SFR operators going forward? Those who bought 5+ years ago were able to acquire at such significant discounts that any operational inefficiencies had little effect in their total returns; asset appreciation has been so significant that marginal differences in collected rent or reduced operating expenses were dwarfed by approximately 300% increases in asset value. But as the SFR industry transitions from being a simple trade on undervalued assets into a long term buy-and-hold investment, investors looking to acquire today don’t have the same luxury of buying anything and letting appreciation cover up potential flaws in their acquisition and management systems. New and more nuanced strategies must be implemented in order to succeed in today’s more crowded and competitive SFR landscape. As one example, there is more attention on implementing consistent rent increases, even if nominal. A common school of thought among mom-and-pop landlords is that aggressively pushing rents leads to vacancies and costly turns, so therefore it’s financially smarter (and less of a hassle) to simply not increase rents and keep tenants for as long as possible. However, issues arise when after several years of no rent increases, landlords then attempt to increase rents now that they are 20% or 30% below market levels. The probability of having a tenant accept such a steep increase is slim, so the landlord is faced with either accepting a vacancy (which they were trying to avoid in the first place) or keeping the tenant and continuing to lag market rents at a significant discount. In contrast, large institutional operators have explicitly stated their intent to consistently increase rents, not only to continue growing cash flows but also to instill an expectation that rent increases are a normal and regular event. Acquisition Channels From an acquisitions standpoint, the state of the housing market has made it significantly more difficult to acquire properties with attractive yields on the MLS, especially in scale. Institutional investors have responded to this by looking elsewhere for volume. These new acquisition channels require new ways of thinking when it comes to stabilization and asset management strategies. One increasingly prominent acquisition channel is sourcing off-market portfolios directly from mom-and-pop landlords. While these deals offer immediate scale and pricing typically below market, they also present challenges of their own compared with MLS acquisitions. Unlike the acquisition of a multifamily building with 100 relatively homogeneous units, bulk SFR portfolios typically have a wide range of assets in different neighborhoods and with different styles and finishes. Owners usually aren’t interested in only selling a portion of their portfolios, so the buyer must be equipped to repair, stabilize, and manage the entire bulk even if some or most of the assets don’t fit within their typical management or buy-box strategy. As bulk acquisitions become a more important piece of the SFR space, it is important that buyers can optimize different strategies within one bulk rather than the singular viewpoint applied to MLS transactions. Implementing a multi-faceted acquisition and asset management strategy will result in more efficient management and greater total returns. Varying Strategies As an example, assume a portfolio of SFRs evenly distributed between Class A, B, and C. Rather than applying a single strategy for repairs (e.g. granite countertops in all units) and asset management (e.g. aggressively increase rents in order to maximize pro forma NOI prior to a sale to an investor in 5 years), applying several different strategies across the different buckets can result in a more optimized approach:  Class A: Definition: Higher end homes all located in gentrifying neighborhoods with low existing cap rates Strategy: Continued appreciation / cap rate compression likely means that it will become too expensive for an investor to acquire in the future, so the likely exit will be to an owner-occupant. Less emphasis is needed on maximizing NOI growth, so focus can instead be placed on maximizing occupancy until value has appreciated enough for a sale.  Class B: Definition: Institutional quality rental homes in neighborhoods where the rate of appreciation is unlikely to significantly outpace NOI growth, resulting in the asset remaining an attractive target for another investor Strategy: Optimize as a rental asset with focus towards maximizing NOI growth prior to selling as a package to another investor  Class C: Definition: Lower end assets and/or outside of the typical institutional buy box Strategy: Optimize as a

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