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Dwellsy

A Functional Marketplace on Multiple Levels By Carole VanSickle Ellis Renting has been difficult in the 2020s, and that goes for all parties involved. While residents tend to make the headlines most frequently due to housing shortages and skyrocketing rent rates, landlords and institutional property owners have struggled as well with the emergence of astounding levels of fraudulent rental-related activity, confusing pandemic-related regulations, and rising demand for bigger, remote-work-friendly single family rental (SFR) properties. At the same time, “traditional” methods of connecting potential residents and property owners have become more treacherous, with online platforms like Craigslist and even Zillow falling prey to bad actors who use publicly available information to create fake listings, misdirect security deposits and rent payments, and sometimes “squat” in properties for months while the owners struggle with the legalities of evicting someone who was never a tenant in the first place. Fortunately for all parties, in 2019, Dwellsy co-founders Jonas and Rosalind Bordo debuted their game-changing “rental search experience” platform that is, the company states, “a new paradigm of genuine empathy for renter experience.” This empathy combined with a practical approach to the entire rental process is helping to fill what Jonas Bordo calls a “gap in the market” that was putting both residents and landlords at ongoing risk. “When we first started thinking about Dwellsy, it was because we realized that there was a real need to solve the problem that there really was no functional marketplace for renters,” Bordo explained. “Craigslist had been an amazing tool, but by the end of 2018, the majority of listings contained some element of fraud.” That is not just Bordo slamming the competition; just last year the FBI released a public statement warning that real estate fraud had risen 64% year-over-year and citing Craigslist by name. “There was a huge need for a new marketplace and, at the same time, there was a huge need for high quality rent data throughout the industry.” Prior to founding Dwellsy, Bordo had spent more than a decade working in the real estate industry at large real estate investment firms and handling operational services for a publicly traded real estate investment trust (REIT) with ownership interest in tens of thousands of residential units primarily on the west coast. In this position, Bordo often found he needed timely, accurate, high-quality data about rental trends in different markets around the country but, despite the vast resources at his fingertips, was unable to find it. “It just was not available,” he recalled. “I would talk to every vendor I could find in the [data space], and even when you could get access, it was often aggregated in ways that made the information challenging to use or the timeliness was lacking.” In 2018, Bordo and his co-founder realized that meeting the need for a new way to for landlords and tenants to connect would also enable them to create a veritable fount of real-time real estate and rental data. Shortly thereafter, they founded Dwellsy and took the platform live. “I saw that if we could create a marketplace where we could, first and foremost, do a great job of serving renters and landlords, helping renters find their next home and helping landlords get their places rented, we would be providing a truly valuable and in-demand service,” Bordo said. He continued, “In the process of creating that platform, we would gain access to marketing feeds, data streams, and, if we were successful in our primary goal, large volumes of relevant and timely information about the market that we could provide to landlords and others who needed that information to run their businesses more effectively.” The co-founders agreed there was no need to ever place a “toll” on tenants or property owners using the platform to find a home or fill a vacancy because the value of the data pool would far outweigh any listing fees they could possibly charge. “That was the opportunity, and it really took off quickly,” Bordo said. In fact, in just under four years, the company has expanded to offer listing access anywhere in the United States and offers data coverage for about 800 metropolitan statistical areas (MSAs) nationwide. They only claim data coverage for areas with substantial enough listing populations that true trend identification and analysis may be performed; if the data volume is too small and “choppy” to draw statistically valid conclusions then Dwellsy does not claim that market as covered. “We do not create data or do aggregation to create numbers or statistics where otherwise that information would not exist,” Bordo said proudly. “Our analysis is straightforward and transparent with our primary focus on getting the data points to meet our clients’ needs.” How & Why Dwellsy Works As any analyst will tell you, often the most groundbreaking insights come from the most straightforward of data sets. Similarly, any landlord will tell you that the best policy for rentals is to keep things simple (and easy) for residents. With that in mind, Dwellsy accomplishes one simple thing: making it easier for renters to find “hard-to-find” rentals. As the company’s website observes, “Right now, all rentals are ‘hard-to-find’ because properties exist across disparate inventories…paid placement interferes with organic search results… [and] amenity tagging and searching is limited.” Furthermore, the entire process has been clouded by fraud and is plagued by mistrust and uncertainty for all parties. Dwellsy tackles these issues with a direct, take-no-prisoners strategy that includes eliminating “pay-to-play” listings, offering early access contact services that alert would-be renters when a property that meets their predetermined parameters becomes available, and providing a fraud-detection framework under their Dwellsy Edge program that uses artificial intelligence and proprietary algorithms to identify fraudulent listings before they ever go live. “One of the biggest challenges in this business is the level of fraud,” Bordo said. “We apply a variety of algorithms to every incoming listing to keep things as safe as they can possibly be, and we offer a $2,000 warranty to renters as part

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Market Report

How Real Estate Will Surprise Us in 2024 By Carole VanSickle Ellis At the start of 2023, many real estate analysts expected the year to bring a “return to normal” for real estate the same way many Americans had hoped for a “return to normal” following the COVID-19 pandemic lockdowns in previous years. However, as the year progressed, real estate trends clearly showed “normal” might not look quite the way it used to, and many predictions fell short or completely awry of reality by the fourth quarter of the year. For example, in February 2023, the industry was rife with predictions that the number of homes for sale nationally would rise by nearly 23% by the end of this year due to longer times on market, but instead, home sales fell by just over 22% during the first half of the year; inventory remained incredibly tight in most markets, and properties listed continued to sell within about 20 days (national average). Only about a quarter of listed real estate remained on the market for more than a month. In 2023, the only truly predictable element about the market remained, as always, that real estate investors would figure out new and innovative ways to generate returns in the sector and that the post-pandemic world would be largely unpredictable. “Investors have to remember that the real estate market is a dynamic entity that is constantly evolving in response to economic, social, and environmental factors,” said Gary Harper, CEO of business coaching and consulting firm Sharper Business Solutions. “Adapting to change is crucial for success,” said Harper, who specializes in in systems and process management and has been investing in real estate since 2004. “People kept using the word ‘reset’ [in 2022], and it was a good word but it does not mean exactly what it used to,” said Bruce McNeilage, co-founder and CEO of Kinloch Partners and Kinloch Homes. “Things can turn extremely quickly, and investors have to always be on the lookout for the next market where their numbers make sense and where you can get the best margins.” At the start of 2023, McNeilage’s build-to-rent (BTR) development company was moving into tertiary markets where the competition was not quite as steep and land and labor remained relatively affordable. He expects to see most of his inventory sell to other investors in these markets within five years due to an ongoing lack of attractive housing inventory. “The market for renters and homeowners has changed,” he explained. “People want larger homes with five bedrooms so there is room for remote work and other things that they did not require in a home pre-pandemic. Today, we are almost exclusively building four- and five-bedroom properties in our neighborhoods because that is what people want to rent.” Rising Interest Rates & a Noncommittal Fed Make Traditional Homebuying Difficult In November 2023, many experts happily predicted that two interest-rate-hike pauses in a row from the Federal Reserve could mean that rising interest rates could finally be at an end. If this were the case, many homebuyers hope interest rates might start to fall again soon in order to render homes more affordable. In reality, however, a pause in rate hikes does not mean a return to affordability any time in the near future. As Keith Gumbinger, vice president at mortgage website HSH.com, told Forbes in November, “While not meaningless, another quarter-point hike at this point will not change the big picture much as a lot of the ‘damage’ from higher interest rates is either done or already in process.” He emphasized rate cuts are the key to substantial reversals in problematic trends in housing affordability for buyers. As usual, the Fed remains relatively tight-lipped about its plans for 2024, although many policy-trackers say they believe further tightening is probable in the coming year. Mary Daly, president of the San Francisco Fed, described the process of deciding what to announce or “telegraph” to the public about Fed plans and policies “the hardest phase of policymaking” because, as she described it, “When you do not know exactly what will be needed, it is not actually a terrific idea to telegraph one thing or the other…. I don’t want to be in a position where we have said definitively we are not going to do X, and then X is needed.” “We anticipate that rate decreases could encourage buyers who have been sitting on the sidelines to enter the market because they are attracted by the idea of lower interest rates,” Harper chimed in. However, he noted, more buyers will certainly create even tighter inventory environments in many markets. At present, the Fed does not appear likely to lower interest rates even if it continues to hold on raising them, and investors implementing creative financing strategies that enable them to make higher offers, close quickly, or offer accessible borrowing terms to would-be retail buyers will likely find themselves in high demand in 2024 regardless of how the interest-rate conundrum resolves. Dennis Cisterna, co-founder and CIO of Sentinel Net Lease, believes interest rates will remain firmly in place in 2024 despite other analysts’ predictions to the contrary. “It is going to make 2024 an incredibly slow year,” he said. “There is just too much demand and not enough product.” Christopher O’Neal, an investor, coach, and agent based in Virginia, warned that devaluation of the dollar in 2024 could also represent a curveball for every facet of the market. Since the end of World War II, the U.S. dollar has been the world’s principal reserve currency, but ongoing global conflicts in which the United States has played a role via sanctions, financial and military support, diplomacy, or some combination of these has led some countries to begin what the Council on Foreign Relations (CFR), a nonpartisan think tank and publishing house founded in 1921, described in a July 2023 report as “de-dollarization” in order to preemptively counteract sanctions and their indirect fallout. Although CFR analysts stated firmly they believe it

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Maximize The Profits on Your Renovations

Take a True Look at Each Deal in Front of You By Rodney Mollen Renovating properties has been a tried-and-true method of creating investment value in real estate for decades. During up markets and down markets alike, there are always opportunities to create value-add profitability with a good renovation strategy. Finding the right deals presents one challenge for investors, while another key factor is identifying the best renovation for each property.  During the downturn of 2008, I helped build and manage an investment firm that acquired over $1B in REO and NPL and generated a 29% compound rate of return on our REO deals over a 3–5-year period (do the math… that’s some serious lift in value). During those years, we would interact with other various investment institutions, most of whom held a different approach to creating efficiencies in their “scaled models” of renovations by attempting to save money by purchasing materials in bulk at wholesale rates and installing them in every one of their homes.  In our view, these institutions were clearly focused on the wrong things … saving costs on elements of their renovations which were not actually providing a return on their renovation dollars in the form of increased property value or rental value. In our view, it was critical to identify how an investor would generate the optimal profits on each deal. Every property and every neighborhood face different dynamics, including supply/demand, buyer preferences, and architectural trends. Therefore, a universal approach to enhancing investment gains through renovations is ineffective. Instead, we believe in collaborating to enhance our collective expertise and elevate our industry’s profit-making potential. A Review of the Data On a recent analysis of 3,000+ Renovation Analysis reports by RicherValues, we found that borrowers were missing the mark on over half of all projects, overspending on 45% of their projects, underspending on 10%, and hitting the optimal strategy on the other 45% of their deals.  How do we know? We quantify the economics for multiple renovation strategies side-by-side on every property we analyze, whether it’s our software clients who conduct analysis on their deals in real-time or it’s our FIRREA-compliant reports for our lenders. For each renovation strategy (min, partial, and full remodel, plus value-add expansions as applicable), we provide a powerful look into the dynamics of each deal to empower the investor to make decisions that will generate the best return rather than solely relying upon the advice of a contractor, realtor, or other potentially biased party. Once these metrics are in place, the optimal strategy is defined as the renovation that will produce the highest annualized return, and above a certain return threshold to offset risk.  In our analysis of the 3,000+ loans, we compared the proposed budget that was submitted by the investor/borrower during the loan application to the hyperlocal data and analysis for their subject property. If the investor’s budget came in materially higher in scope and cost compared to the optimal strategy, then this loan was marked as overspending. If it came in at a materially lower level of renovation than the optimal strategy, this would be marked as underspending. And if the investor’s budget was within range of the optimal strategy, then we marked this loan as “they nailed it.” On 45% of loans (roughly 1,350+ investor loans), the borrower was targeting a higher level of renovation than the numbers recommended, and they were experiencing what is called “diminishing returns.” The additional “value-lift” they were achieving for the additional renovation dollars being spent began to decrease and, in some cases, turn negative. This means that in many instances, investors were spending more in renovation dollars than they were actually achieving in increased sale price. Not an ideal spot. The great news is that as an investor, you can perform this straightforward analysis on any one of your deals. It might take some work (or some good software) beyond what your realtor/contractor might submit, but if you follow this same approach, you can evaluate your deals to a deeper degree and start making the decisions that will put greater profits in your pocket. Why Conduct an Analysis The benefits of conducting an analysis include higher profits, faster projects and better returns, and faster loan approvals. Higher Profits As we explained earlier, the core benefit of this analysis is that it will help you understand where the “sweet spot” lies and how to unlock the highest profitability for each deal you pursue. You would be surprised. We have case studies where our investor clients at RicherValues found that a trash-out / clean-up with an As-Is Sale was actually going to be the most profitable strategy. While the investor was skeptical at first, they were thrilled when they made $30k more profit on their deal than they thought they would have made had they spent the time and money to complete a full renovation … and instead, they were in and out of their deal 3-6 months faster. More money, and in less time? Now that’s a win. Faster Projects and Better Returns Reducing the renovation scope of a project will almost always reduce the amount of time it takes to renovate. However, if a less-renovated property takes longer to sell in that hyperlocal area, then this does not always translate to a faster project. Both timelines (renovation duration and listing time) must be considered together to evaluate this. Nevertheless, savvy investors understand that faster turns of their capital translate to lower carrying costs and greater take-home pay. Faster Loan Approvals With the continued growth and improvement in quality and service across the private lending space, lenders who receive higher quality deals backed by deeper analytics and intelligence are much more likely to respond with excitement and approval as compared to investment deals that are poorly underwritten or might be based on overestimated ARV’s or incorrect renovation budgets. Put simply, higher deal quality can lead to closing more deals, with faster loan approvals and closing times. And as they say, time

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From Appraiser to CEO And Everything In Between

Larry Goodman, CEO, HomeVestors of America By Carole VanSickle Ellis When Larry Goodman, CEO of HomeVestors of America, graduated from the University of Alabama with a real estate finance degree in 1987, he dove right into the industry as a real estate appraiser in Miami, Florida. It was not long before Goodman expanded his area of expertise, branching out from residential real estate into commercial properties. “That was a great thing for me because I learned these really good observational skills,” he recalled. “When you are an appraiser, you are really looking at everything with a fine-toothed comb. It opened my eyes to all the things that I did not see [before].” Goodman’s eyes were opened to more than just the vitally important details of buildings and construction, however. He began to see just how big the opportunities in real estate really could be. After several years as an appraiser, he moved to Atlanta, Georgia, and began working in the real estate investment management space with a firm specializing in real estate investments on behalf of institutional investors. He remained with that firm through thick and thin, staying on board for 15 years and working in myriad positions during that time. “I did everything from acquisitions to asset management to portfolio management,” Goodman said. He also gained valuable experience and excelled in working with myriad forms of institutional capital, multifamily and single-family properties, hotels, industrial properties, office space, and retail space. “It was a very broad, well-rounded experience in all facets of real estate,” he concluded, “and I worked with pension funds, insurance companies, high-net-worth individuals, and other various comingled funds and individual accounts.” While he was in Atlanta, Goodman branched out personally as well. He started a family, marrying his wife, Marge, of 28 years and eventually having three daughters: Nicole, Brittany, and Madison. “Family comes first. They are my top priority. It is not even a question,” Goodman said firmly. “I have learned over the years that it is important to have a good work-life balance. We are a close-knit family and I am very proud of my girls and what they have done so far in their lives.” His oldest daughter ultimately chose a career path in real estate finance, a choice Goodman describes as “very interesting.” He added, “There are so many areas of real estate you can go into; it is such an interesting business and has changed so much over the years and there are so many ways that people can have success and generate returns just by owning real estate.” When he finally opted to leave the Atlanta firm, Goodman moved to Dallas, Texas, where he worked with a national multifamily management company before ultimately branching out once again into the startup world, where he (and the PropTech company he led as COO) flourished together until HomeVestors brought him on in October 2022 as chief operating officer (COO). Upon the retirement of former HomeVestors CEO David Hicks in August of this year, Goodman assumed the role and has been hard at work applying his more-than-three-dozen years of diverse work in real estate to one of the most famous companies in the industry, the “We Buy Ugly Houses people.” An Intriguing Growth Opportunity Paired with “Incredible Culture” If it is not already apparent from his storied work history, Goodman will tell you in no uncertain terms that growth and opportunity are non-negotiable when it comes to where he wants to work. HomeVestors, which bills itself as “America’s #1 home buyer,” has been an industry leader since 1996 and has been ranked in the Franchise 500’s top 100 companies since 2015. For someone who values the opportunity to be a part of huge growth, moving into a position, however prestigious, with a national company with more than 1,100 existing franchises throughout the continental United States might seem like moving into a peak position rather than a growth-oriented one. Not so, said Goodman. In fact, if you believe that HomeVestors is approaching or has reached its peak, Goodman suggests you take a second look. “What intrigued me so much about working with HomeVestors was that it is a sophisticated, mature company that has retained many of the elements that make startups so exciting,” he explained. “That there is still great opportunity in a mature company and that I can be a part of that growth is really, really interesting because I really love to grow. I cannot be stagnant.” Goodman added, “At HomeVestors, it is really exciting to me that I will get to be a part of the next phase of change and growth in the company.” Goodman said his focus as CEO will be on enhancement of HomeVestors resources, culture, and value because the company already has a firmly established foundation upon which to build. “We are really excited about enhancing the entire structure,” he said. “For instance,” he added, “we will enhance training, technology, deliverables, and all the related services that we offer to help potential applicants and franchisees succeed.” Goodman is already planning substantial growth in advertising and marketing strategies in the coming year to support both new and existing franchisees. “This will really level us up because we are partnering with a very sophisticated marketing agency focused on franchise sales,” Goodman said. He added, “We are also going to dramatically increase our content volume and trainings so we have a better repository for our franchisees than we have ever had before.” Completing the Mission By Staying on Message Goodman recalled that when he was working with the startup just before joining HomeVestors, the company was very focused on delivering a clear, strong message to its potential customers and clients. He explained that when a company is young, keeping things consistent throughout the entire infrastructure as well as with customers is imperative to growth and success. Because of this experience, he said, he headed up an update of the mission, vision, and core values at HomeVestors. “Everything is focused on our

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Unlocking the Potential of AI in Mortgage Marketing

Balancing Automation & the Human Touch By Erica LaCentra Artificial intelligence (AI) is rapidly transforming the real estate and mortgage industries, revolutionizing tasks from routine data processing to customer service interactions. However, while AI has found its place in various facets of these spaces, its integration into marketing strategies remains relatively unexplored although, that is quickly changing. As marketers in this space as well as other industries, begin to identify more uses for AI, this raises the crucial question, where can AI seamlessly complement marketing efforts, and where is the human touch irreplaceable? The Future of Content Creation As technology and artificial intelligence become more widely accepted in organizations, there is always the concern that tech may ultimately replace the individuals currently tasked with these job functions. With the idea of utilizing AI for content creation becoming more prevalent, content marketers may resist using AI in these areas for fear that their role will become obsolete. However, the potential benefits of AI in content creation cannot be overstated. AI has the capacity to enhance content quality, boost efficiency, and enable marketers to accomplish more, faster. Artificial intelligence has the potential to shape the future of content creation. It can not only improve the quality of content and make marketers more efficient, but with the use of AI tools, marketers will simply be able to do more on the content front. For example, many notable organizations like The New York Times and Reuters have embraced using Natural Language Generation (NLG) tools, like Acrolinx, Article Forge, and QuillBot AI, which allows AI to “learn” from provided data. As these AI tools process and learn the data sets and content that is provided, these tools can generate content that mirrors human-authored text. Marketers can leverage these tools for improved program descriptions, ad copy suggestions, and data reports, streamlining their content creation processes. Marketers simply need to provide the appropriate parameters and general guidelines for what they are looking for, and AI can assist with the rest. AI in Social Media and Email Marketing Another example of where AI tools could assist with marketing is by creating more personalized content for platforms like social media and email marketing. Think of the enormous amount of time that could be saved on efforts like daily social media post creation. Tools powered by artificial intelligence can analyze customer demographics, behaviors, and sentiments about your brand from real customers and ultimately craft more targeted content and messaging that resonates with the core audience. Marketers will no longer need to pour over analytics to craft the perfect campaign. Plus, with machine learning, AI can continue to track what campaigns have been the most successful and adjust overtime to ensure your content is driving sales. Finally, in the same vein as analyzing customer behaviors for application for social media marketing and email marketing, AI can assist with developing content to help organizations meet their SEO (search engine optimization) goals. AI tools for keyword research can help provide a better understanding of what your audience is searching for that ultimately brings them to your company’s website or your competitor’s website. Tools like SEMrush facilitate effortless keyword research, helping marketers understand customer search trends and competitor rankings. Combining this data with AI tools like ChatGPT enables the creation of article topics that enhance visibility online and resonate with the target audience. Ultimately, when used properly, AI tools will allow marketers to reach their core customers with ease. AI Can’t Do It All, Yet While AI holds immense promise in content creation, it is not without its limitations. More often than not, AI generated content still requires human intervention as it can often miss the mark of what an organization may be driving at with its content. Full articles or blog posts may be nonsensical in places or go beyond the scope of what a company wants a piece to focus on. This is because AI is currently unable to use reasoning like a human can, and it cannot create any original insights. It simply creates based on what its given and in a lot of cases, content may be incorrect or piecemealed in a way that does not make sense. That being said, utilizing AI for content creation has tremendous value and its use will likely grow as advancements are made in technology. However, it is important for marketers to remember that as of right now, AI should be viewed as a tool to assist rather than replace human creativity in content creation. The integration of AI into mortgage and real estate marketing is evolving rapidly, presenting both opportunities and challenges. As AI continues to advance, marketers must strike a balance between leveraging its capabilities for efficiency and preserving the irreplaceable human touch in content creation. The journey towards maximizing AI’s potential in marketing is underway, promising a futurewhere automation and human creativity coexist harmoniously.

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The Business Case for Centralized Services

Reduce the Complexity of Managing Multiple Services By Jason Myers Single-family rental (SFR) property owners and operators of all sizes face a similar challenge when it comes to working with multiple vendors for different required services, and that is hoping that those providers can get the job done efficiently and on time. Regardless of portfolio size, SFR investors, institutional owners and property managers commonly rely on their local or regional employees to farm out the services, often with many different providers. Navigating this maze of vendors, service providers, contacts, services, and schedules frequently becomes more complicated—and more costly—than it needs to be. Additionally, many smaller providers often lack the technology, processes and redundancy that larger, more established players can offer. How are we defining centralized property services? When you contract and manage a reduced number of services partners, you’re centralizing (or consolidating) services. That can mean working with a single partner nationwide or a select few providers in each region or market. Many of our SFR clients are making a strategic shift to adopt a centralized approach. Centralizing property services such as inspections, lawn care and preventative maintenance can help eliminate hassles and even yield cost savings. So, why are SFR companies making this shift, and why does it make so much sense? Saving time and hassle // Centralizing core property services can offer a one-stop solution, allowing the provider to handle the service, back-office support and logistics, while enabling you to maximize efficiencies and shift talented staff to revenue-generating roles. And if the same partner is already handling other tasks at your properties, you can reduce the number of touches required to complete projects within a single group and minimize the staff required for oversight. Redundancy // Working with individual service providers not only creates more complexity, but it also leaves you more vulnerable if something goes wrong. For example, if a truck breaks down, equipment isn’t working or a contractor doesn’t show, there’s no redundancy in your system to deliver a backup plan. The key is choosing a single source with access to multiple service providers, whether they are self-performing or outsourced, so you know you’re always covered. Consistency // Working with a larger, established provider yields both efficiencies and consistency in the work they deliver. You know you can count on them to be there when scheduled, as well as the next time you need services performed. And one key benefit is their services will be performed in the same manner—and to the same standards—across all of your properties. Protection // Managing multiple services vendors also can lead to other headaches—for example, increased exposure to risks, such as uninsured or underinsured contractors. Working with a single company with a large footprint ensures you’re covered, from background checks and licensing to insurance, safety training and more. Technology // The technology capabilities that a larger company can deliver offer a better line of sight and peace of mind. When their portal connects to your platform, you can add, track, and confirm jobs (with before-and-after and check-in/out photos) without leaving your desk. This furthers the time savings for your team, allowing a smaller group in your vendor management department to be more effective. Financial savings // Working with a larger company may even yield financial savings due to their buying power, but it requires looking at the complete picture. For example, you might be paying $5 more per service, but if you’re able to reduce headcount (or shift it back where it needs to be), you can still end up with overall savings and improved efficiencies. MCS has seen centralized programs priced competitively with local crews based on the total number of assets being serviced in a market. How Do You Get Started? Moving to a centralized service model requires careful planning and leadership on the front end as well as time to evaluate and recalibrate as the program gets up and running. Here are a few key things to keep in mind to help ensure the success of a centralized model. A thorough and realistic definition of the scope of work Work with your service partner to define the scope of work so it’s mutually understood and agreed on. Clarity is key: A detailed scope should list and describe the services you expect a potential partner to complete and when and how you expect them to be completed, so there are no surprises in the ultimate results or costs. Communication from the executive level to local managers Just as frequent and clear communication between you and your provider is essential, how you communicate this substantial business shift within your organization will be critical to its success. How will you roll out this new model (and new partner relationship) to your local leaders? Many may have long-term relationships with current providers, so your messaging will need to address an understanding of their situation and also provide the reasoning behind the decision and facts to support the shift. Easing into the relationship with your provider Going from numerous services providers to a single source may be a bigger shift than you’re ready to make. The good news is you won’t have to start with an exclusive partnership to see success. A centralized program can be phased in over time to help foster a smooth transition. You may also consider starting out with two or three providers so quality work can be rewarded with increases in property share, and it provides redundancies as the program starts. Technology integration to easily turn on and off You need to be able to shift services as properties enter or exit your management portfolio, and relying on regional managers to communicate this for each property can lead to missed or duplicated services. A robust technology platform can help track this information and prevent missed services and duplication of work. Consolidating your service partner list can reduce the headaches and complexity of managing multiple services for your SFRs. When you select an experienced company with a

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