Q&A with Nickalene Badalamenti-Kalas
Meeting Asset Management Needs in a Changing REI Market
As investors expand property portfolios across the United States, many are encountering new challenges in the administration of turns, make-ready, renovations, and ongoing property maintenance field services. REI INK spoke with Nickalene Badalamenti-Kalas, President and CEO of Five Brothers, the asset management service provider, to help unpack these trends and discover how Five Brothers is assisting property managers and owner-operated investors with the divergent realities they face from market to market.
You have led Five Brothers for eight years as President and CEO. Can you give us a short “2022 in Review” and provide some historical context as well?
Yes, I took over the company on the heels of the 2008 crash. That was a challenging time and, despite certain difficulties arising primarily from the pandemic, 2022 showed itself to be a good time for investors to seize opportunity. More properties emerged from forbearance allowing investors to expand their portfolios and turn more properties.
Are you optimistic about 2023?
The upswing in investor activity is definitely continuing and we expect 2023 to be a great market for the investor. We’re already seeing a steady increase in field service requests to conduct turn- and make-ready tasks. Our vendor network stands ready to provide these general repair, cleaning, painting, and ongoing maintenance services.
That said, we are increasingly engaged by investors to assist them with a range of developing challenges, particularly as they expand their portfolios to more distant, less familiar territories. With a nationwide field services vendor network, Five Brothers is well-positioned to help.
What are some of the other challenges?
Some additional challenges are the expected fallout of the last few years due to COVID, labor shortages, material and fuel price increases, and other factors that have resulted in a tight contractor market. Some investors are therefore having difficulty finding the right talent to provide timely turns, make-ready and ongoing maintenance services. And while we’ve been impacted as well, Five Brothers has the considerable advantage of a strong, stable, and mature relationship with our contractor partners. They’re remarkably committed and energized by the new investor market opportunities we’re seeing.
Additionally, we’ve been very successful in bringing on new, qualified field service talent — independent and insured painters, cleaning personnel, general contractors — who can deliver quality services cost-effectively with tight timelines and with full regulatory compliance. Through local referrals from our general contractors, we also hire qualified licensed professionals when the job requires their services.
Can you speak more about the compliance issues?
Well, compliance can really be a big challenge for rental properties. At Five Brothers, we’ve invested tremendous resources in infrastructure, technologies, and personnel to ensure the turns, make-ready, renovation, and regular maintenance activities our field staff conduct agree with every code. This job requires that investment because compliance varies not just from state to state, but often from neighborhood to neighborhood. And they’re fluid: they are in a continual state of flux, so we continuously update our code compliance database.
As an asset management company, our focus remains on the risk management associated with violations and mitigating extraneous fees. This is a major component to ensuring investors are maximizing their portfolio value. With our help, they focus their energies on their property assets, rather than its upkeep, or ever-changing compliance requirements.
What else does Five Brothers bring to the REI equation?
Other issues we see commonly involve exterior landscaping, general exterior structure repairs and seasonal maintenance. Within our tenant- and market-ready portfolio it is customary to complete cleaning, painting, and general repair services. We have the people and the quality control measures to carry out these jobs quickly and correctly on behalf of our clients. Our dedicated staff knows our vendor resources well and is particularly adept at dispatching the right talent for each job.
We are also making continual system and process updates in order to provide clients with maximum account transparency with respect to work completion status. Transparency is a high priority for our clients in the SFR space.
The bottom line: whether evaluating a potential investment property, bringing a property up to code, providing maintenance and/or refreshing between tenants, we are optimally equipped to assure that service requirements are completed quickly and effectively, every time.
What trends do you see developing in the SFR market?
One in particular is the increasing adoption of smart-home technologies. For example, our contractor network is conducting more and more smart lock and thermostat programming and installations. These smart devices allow investors to remotely control their assets such as manage energy use, administer access, prevent damage and monitor activity. Investors are looking to implement this technology in greater numbers, and Five Brothers is there to support the need.
Another trend we’re helping our investors manage is the standardization of contractor service pricing schedules, nationwide. This is a massive process change, and as investors expand to new markets, they are encountering eye-opening variances in pricing. With Five Brothers’ long-standing — more than 55 years now — partnership with our field service network, we’re helping to normalize fees such as these, so investors know what to expect across their entire portfolio, regardless of locale.
Finally, as weather events continue to intensify, investors are looking for ways to monitor and respond quickly to major storms like the recent hurricane Ian. We developed our proprietary CLADE resource specifically to address that need. CLADE merges weather/disaster reporting, asset location, and our FiveOnline asset-history database, into one easy-to-use platform. This keeps our clients informed about the status of their properties potentially in a storm path. They can take preemptive action to protect their properties, or more quickly identify damaged assets to accelerate claims.
Recent history shows us just how important weather and disaster reporting is to the real estate investor.
Do you have any final words for the real estate investor?
With investors no longer buying just in their own backyard, and with compliance requirements varying from city to city, it is imperative that they forge relationships with experienced asset management partners who have a national footprint. Now is not the time to go it alone.
For more information, visit https://www.fivebrms.com/
