REI INK

RCN Capital

Building Relationships Beyond the Loan By Carole VanSickle Ellis When Jeffrey Tesch, CEO Of RCN Capital, started his company in 2010, he did so with the knowledge that he was tackling a difficult project at a nearly impossible point in history. However, Tesch believed the service RCN could provide would not only be invaluable to the real estate investing community; it would be essential to the housing market recovery. With these ideals in mind, he dove into the private money sector headfirst. “We started RCN in 2010, smack-dab in the middle of the banking meltdown and foreclosure crisis,” Tesch recalled, adding, “The reason we started the company then was we believed there was an opportunity to deploy capital to investors who were buying properties, fixing them, and providing good, clean homes for families to live in. It was hard for many people to see it in the moment, but it was a great time to be involved in the financial side of the market.” Tesch said that although at the time starting a new lending company seemed like a nearly impossible task to those “outside” watching the process, his original team members, most of whom still work with RCN, held a firm belief that the complicated lending environment at that time was actually an environment in which investors would be desperate for workable options. “At that particular time, it looked like a real mess, but in hindsight, it was so clear,” Tesch said. “The banks did not want to own the houses; the investors had the opportunity to buy and fix them, and the only component missing was the capital that would enable these investors to buy those houses.” RCN filled that gap, and, 13 years later, continues to serve the real estate industry and identify new, creative ways in which to do so. Alan Johnson, director of originations at RCN, recalled a client for whom RCN’s creative thinking paid off in significant ways more recently. This client had been holding about a dozen properties in a rental portfolio and was looking for a way to boost his cash flow. Although many investors would consult a designated financial advisor in this situation, Johnson’s client asked RCN, and specifically Johnson, for advice as well. “At that time, rates were extremely low, even in the private-lending sector,” Johnson said. The client ultimately opted to refinance all of his properties, thereby increasing cash flow on every one of them. As a result, he was able to leave his traditional 8-to-5 job and begin investing full-time. Johnson said he recently heard from the investor, who reported that his entire family had been talking about RCN at the dinner table the previous night. “He said he was just calling to find out more about his [loan origination team] because of what that process had meant for his family,” Johnson said. “It was a ‘Wow’ kind of moment for all of us. That is the kind of thing you cannot put a price tag on.” A Strong Foundation of Thinking Forward Tesch and RCN started out with a strong sense of purpose, believing they were meant to support, fortify, and ultimately evolve with the private-money industry. “As private lenders, it is tempting to think of just ‘customers’ or ‘investors,’ but you really want to think about the customer of the customer as the person you are really serving,” Tesch said. The customer-of-the-customer, of course, is the end-buyer or resident of the property that a real estate investor has financed and renovated or rehabbed. Tesch believes that thinking of the wellbeing of that eventual permanent or semi-permanent resident creates a lending environment in which the best outcomes are achieved for everyone involved in the investment process from start to finish. “If you think about the resident, that leads you down a different path than you might otherwise follow,” Tesch said. “For example, if interest rates rise and we think about what that end customer needs (which also gives us insight into what our borrowers and investors really need), then we realize that the end customer needs an affordable mortgage so they can buy the property or an affordable monthly rental rate so they can rent it. That tells us that we need to lend in a way that enables the investor fixing up and selling or renting the home to provide that customer with the ability to pay those rents or get that mortgage. When we provide a product that will help them garner those results, we provide a product that is needed throughout the industry.” “It all comes down to understanding our perception of our space,” explained Erica LaCentra, RCN’s chief marketing officer. She said that Tesch, a real estate investor himself, had negative experiences in the private lending industry before becoming a private lender. “There was no consistency,” she said, “and some of those lenders in the early 2000s were not particularly interested in whether a borrower could pay off the loan because they were just as happy to take the property from the investor instead of getting the loan payments. From the beginning, RCN has been dedicated to the professionalization and legitimization of the space, so our company has stayed far away from those types of practices.” According to Johnson, a big part of thinking forward in lending is about relationship building, a passion to which he dedicates a great deal of time at RCN in his role as director of originations. As director, Johnson is heavily involved in training loan originations teams. “You cannot fake relationship building,” Johnson explained. “You will never build a good relationship by faking anything. When we bring people onto the RCN team, we look for people who listen, who can empathize, and who relate to our clients and the end customer, also. At the end of the day, a satisfied investor means repeat business because investors generally do not do just one loan every five or 10 years. They might do five, 10, or 20 loans a

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Washington, D.C.

“The District” Could Face Atypical Headwinds in the Coming Months By Carole VanSickle Ellis In 1783, a mutiny of Continental Army soldiers in the new United States’ then-capital city of Philadelphia, Pennsylvania, demonstrated to the Founding Fathers that their future nation’s capital city must not, as James Madison would argue roughly five years later, “rely on any state for its own security.” Just a few years later, Article One, Section Eight of the United States Constitution would permit the establishment of a “District (not exceeding 10 miles square) as may…become the seat of the government of the United States.” At that time, the Constitution did not designate a specific area for this district, but by 1790, it had been agreed that the new national capital would be located on the Potomac River. Eventually, President George Washington selected specific lands donated by Maryland and Virginia to create the District of Columbia, residents of the area lost their representation in Congress, and the region would go its own unique way from the rest of the nation from that point forward. True to its history, the D.C. housing market usually stands out from national market trends. Historically, it has been recession-resistant to downright recession-proof, and home prices have risen relatively steadily in the area since the 1980s, although there was a dip during 2008 and 2009. Even then, however, prices did not fall as substantially as in many other major markets, and the market reached bottom in March 2009. At that point, it began to climb rapidly, only recently showing indications that it may have peaked. In January of this year, there were 31% more active listings year-over-year, but much of the for-sale inventory was a result of longer times-on-market rather than a dramatic increase in active sellers. “We are in a very unusual market where we are seeing a pullback not only on the demand side, but on the supply side,” observed Bright MLS chief economist Lisa Sturtevant. She explained, “There are fewer sellers in the market, but inventory is growing…simply because homes are sitting on the market longer than they used to.” However, she added, “The underlying fundamentals in the D.C. area are quite strong. The economy is doing well, demographic fundamentals are good, [and] I expect we will see more buyers coming back to the market in the spring along with sellers.” D.C. realtor Susan Isaacs said although spring and summer markets could be relatively strong, her brokerage is expecting the second half of 2023 to “slow considerably due to looming recession combined with the start of the 2024 election cycle.” Isaacs added that if interest rates “unexpectedly” take an early drop at year-end, this could trigger a holiday rush on home purchases. She also noted that retail buyers are currently unwilling or unable to dedicate much of their budgets to improvements after closing, so fix-and-flip investors should expect these buyers to “exercise more caution with home inspection and careful evaluation of price.” The area is also expecting a series of school-zone boundary changes, which could affect which neighborhoods are “hot” by the fall. Isaacs observed, “Redrawing school boundaries affects D.C. real estate values in a significant way…. Take away the [advantageous] school assignment, and homeowners could potentially lose tens of thousands of dollars in home appreciation value.” Subject to the Political Winds & Ongoing Pandemic Policy It is no secret that the year leading up to a presidential election tends to be a slow one in D.C. real estate. In the immediate D.C. area, in particular, home sales growth may slow to zero or even drop into negative numbers, while the broader metro area slows less but still tends to experience healthy, outsized growth the year following the election. “From the buyer’s perspective, [the] housing hunting process is expected to be more competitive [in an election year], while sellers can benefit from the anticipated busier activity,” said National Association of Realtors (NAR) senior economist and director of real estate research Nadia Evangelou. In D.C., the 2024 elections could have a particularly outsized effect on the local housing market because President Biden’s remote-work policies have resulted in D.C. boasting one of the largest remote-working populations in the country in 2023. Three-term D.C. mayor Muriel Bowser used her inaugural speech this past January to warn the president that if he refused to end telework for federal employees, her administration would be forced to find other uses for the empty government office buildings currently populating the nation’s capital. The federal government currently owns about one-third of properties owned or leased in Washington, D.C., and, prior to the pandemic, was directly responsible for about one in four D.C. jobs. Unlike many of her peers on the left side of the aisle, Bowser is demanding “decisive action by the White House to…get most federal workers back to the office, most of the time.” She said one of her goals for her third term in office will be to add 15,000 residents to downtown D.C. over the next five years and implement policies that will result in about 100,000 new residents “before it’s all said and done.” This would require the conversion of large amounts of commercial office space, something Bowser said could be an option if remote work policies remain unchanged. In March of this year, the city’s chief financial officer, Glen Lee, warned that remote work represents a “serious, long-term risk to the District’s economy and its tax base.” In his revenue projections for the upcoming fiscal year, Lee estimated the city would generate revenue under $10 billion, reducing his forecasts by a total of $500 million between FY2024 and FY2026. These losses could result in the cancelation of ambitious city projects that investors might have expected to add value to residential properties, such as access to a fare-free bus system that was scheduled to debut in July of this year. At present, the project is considered “in jeopardy” because there are no longer funds to support it. Readers should note the

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The U.S. Housing Market – What Role will Private Lending Play?

It is Crucial to Have a Network You Can Rely on By Amy Kame As the U.S. housing market continues to navigate the complexities of supply and demand dynamics and interest rate hikes, the role of private lenders has become increasingly important. NPLA members provide leadership and education to an industry that contributes innovative solutions to increase the availability and affordability of homes in America. Leading economists from Zillow, the National Association of Realtors (NAR), John Burns Research and Consulting, Fannie Mae, and the National Association of Home Builders (NAHB) anticipate the housing market will continue to experience growth, albeit at a slower pace. The latest research estimates that the housing shortage in the U.S. ranges from 1.7 million to 7.3 million units. The National Low Income Housing Coalition cited a 7.3-million-unit shortage, Realtor.com at 6.5 million, Fannie Mae at 4.4 million, and John Burns Research & Consulting at 1.7 million. The disparity in these estimates diverges due to different definitions of “shortage” and methodologies in calculating the number of homes needed. Fannie Mae suggests that the U.S. should both build new units and preserve existing ones to tackle the housing shortage, as rehabilitating existing units can be cheaper than constructing new ones. According to a report from the Joint Center for Housing Studies of Harvard University, the U.S. has a significant number of older housing units, many of which require rehabilitation. In 2019, about 37% of the U.S. housing stock was at least 50 years old. Rehabilitating these units will help address the housing shortage. According to Lawrence Yun, NAR’s chief economist, “the market will continue to shift toward a more balanced state in 2023 and 2024, with inventory levels gradually increasing and price growth slowing down” (NAR, 2023). He mentioned that “new construction activity, especially for entry-level homes, will be key to addressing the ongoing housing shortage.” Products offered by private lenders help local communities repair unsafe or unhealthy housing, convert industrial and retail properties into residential properties, and rehabilitate outdated housing stock. Private lenders will continue to play a crucial role with their ability to strategically direct capital to areas in need of development and offer flexible financing and an accelerated funding process. Implications for Private Real Estate Lenders – Stay in the Know The factors discussed in this article indicate that private real estate lenders will encounter both opportunities and challenges in the near future. With the constant flow of information and different predictions from economists and research houses, it is crucial to have a network of professionals within the industry that you can rely on for guidance, advice, and leadership. Stay informed about all things private lending and consider joining the NPLA community. The NPLA Conference is Headed to the Tri-State Area June 19-21 Hard Rock Hotel & Casino, Atlantic City The National Private Lenders Conference is the premier Private Lending Conference in the country. We have served the private lending space for 21 years, and our success can be attributed to our track record of consistently producing premium events for industry professionals to network and grow their businesses. Our mission is to facilitate commerce between capital providers, lenders, investors, brokers, and service providers. At our conference, you can expect to hear from industry experts who will share their insights and experience on the latest trends and developments in private lending. We cover a wide range of topics, including risk management, deal structuring, market analysis, and legislative and regulatory compliance. As we move through 2023 and look ahead to 2024, private real estate lenders face a complex and evolving market. Taking part in the NPLA Conference and the Association allows you to access a network that has proven invaluable for sharing knowledge, receiving advice, and finding new opportunities. Being part of the NPLA means you can rely on industry leaders’ collective knowledge and expertise. What’s the Buzz About The National Private Lenders Conference in Atlantic City will showcase the biggest players in the Private Lending Industry, educational and motivational speakers, and newly added networking sessions with hundreds of local brokers. We welcome you to join our community and attend our upcoming conference. Register by visiting www.nplaconference.com. Monday, June 19 NPLA Charity Poker Tournament Supporting St. Jude St. Jude Children’s Research Hospital is a leading pediatric treatment and research facility focused on curing childhood diseases, including cancer. By participating in our poker tournament, you will be helping to support this incredible organization and its mission to advance cures and means of prevention for pediatric diseases. Let’s help support the amazing work of St. Jude Children’s Research Hospital together. Fee not included in registration. Tuesday, June 20 NPLA Conference — Networking Lounge and VIP Cocktail Party Building relationships is crucial in the lending industry. The NPLA conference provides ample networking opportunities for attendees. We facilitate numerous networking events throughout the conference to ensure that guests and sponsors can connect and build valuable partnerships. Wednesday, June 21 Conference Day Highlights State of the Industry — Devyn Bachman, Senior Vice President, Research & Operations, John Burns Research & Consulting Devyn will share JBREC’s macroeconomic outlook for housing. In addition, she will dive into quantitative and qualitative trends driving the current market conditions for investors and lenders in both the for-sale and for-rent sectors. Devyn monitors for-sale and for-rent housing markets nationwide, providing clients and associates with the most timely and accurate insights on housing market conditions. Panel Discussions and Presentations Economic Trends in Private Lending (Capital Markets Panel) Executives from the top capital-providing firms will discuss the current state of Private Lending, including trends and growth opportunities, strategies for managing risk and ensuring profitability, and predictions for the industry and the market in the short and long term. Unlocking the Potential of Private Lending: Best Practices in a Changing Market (Private Lender Forum) Changing markets can expose lenders to existential risks. Listen in as industry leaders discuss maximizing your balance sheet by utilizing various funding methods. Executives will discuss best practices for successful lending, such as tips for

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I Trust You and I Believe In You

The Role of Trust in Organizational Leadership By Ted Studdard, Colonel, USMC (Ret) I trust you and I believe in you…” Just minutes before, I thought I would be fired.  My fledging two-month career in the Fleet Marine Force was about to end before it ever really started. I had just violated one of the most critical safety rules that I, as a young artillery officer, was responsible for keeping.  The Story I had recently completed my initial Marine Officer training and joined my first unit. We were preparing for an upcoming deployment and were three weeks into our initial month-long, live-fire training exercise. For this training, we were allocated a special type of ammunition that was extremely lethal and thus had extremely specific safety parameters. The training areas where we could shoot this ammunition and the weather were never aligned, and we were in danger of not having the opportunity to train with this ammunition. A couple of days before the exercise was scheduled to end, the weather broke. We were in one of the few firing positions where we could shoot this ammunition.  Our commanding officer, Captain M. A. Singleton, left our position to go to the battalion headquarters to get our next mission, and I was left in charge of firing. I took the initiative and we fired the ammunition — the Marines executed perfectly. As the last round impacted, I could see Captain Singleton’s vehicle headed back to our firing position. As soon as he arrived, I told him about shooting the ammunition and how well the Marines executed the mission, fully expecting him to be pleased. He was not. In fact, he started asking me questions about how we executed the fire mission, specifically focusing on safety. He was most interested in finding out if I knew where all the other units were in the vast training area. When he asked if I knew where the mortars were, I knew I had failed. I could not account for their location. He told me that they were out of my line of sight but less than a kilometer in front of our gunline (roughly half a mile). This ammunition was so lethal and so sensitive that firing over the heads of friendly forces was strictly prohibited. I was responsible for violating this cardinal rule, and, even more importantly, my actions put lives at risk. Captain Singleton motioned for me to follow. We walked a short distance from the rest of the unit so we could have a bit of privacy.  I fully expected to be on the receiving end of a very unpleasant one-way conversation followed by being relieved of my duties, i.e., fired. For several very long minutes, Captain Singleton quizzed me on safety procedures, finally stopping when he knew that I understood what to do and that I had truly made a mistake in my haste to accomplish the mission. I braced myself for what would come next — relieving me of my duties. To my surprise, Captain Singleton said, “I trust you and I believe in you. Now go train your Marines.” I felt like I could run through a brick wall. I would get a second chance; my commanding officer told me he trusted me, and he showed that he trusted me through his actions. Creating Trust Up and Down the Chain How did this event impact our team? Personally, I knew that Captain Singleton had my back and there was no way that I would ever do anything to let him down. Many leaders think that, by virtue of their position, subordinates automatically trust them. This is not true, in fact, leaders often must give trust to get trust. In his book, The Leader as Coach, Richard C. Huseman, Ph.D. cites a Boston University Survey that found 80% of employees do not trust their leadership. On this day, Captain Singleton gave trust by the truckload. Our entire unit quickly realized what I had done, and all were watching to see how our leader responded. The way he handled this situation let all the Marines know that if we made a mistake that was not illegal, immoral, or unethical that he would support us. On this day, we all witnessed our leader trusting down the chain, which in turn, created trust back up the chain. The impact was far greater than any of us ever imagined.  Within a year we would be in combat together, and the foundation of trust Captain Singleton built that day would provide the footing that enabled our unit to execute at the highest level under extreme circumstances. Trust is the Key to Unlocking Your Team’s Potential After 25 years leading large, dispersed organizations around the world followed by nearly a decade in various leadership roles at the corporate headquarters of a Fortune 20 company, I am more convinced than ever that trust is the key to unlocking the tremendous potential that we all have in our current teams. Why is trust so important? Trust empowers your team. For starters, trust facilitates decisions at the point of action by the person closest to the issue, who, in many cases, has the best situational awareness. Trust also speeds the entire decision cycle by enabling your team to make decisions on the spot. Empowered people feel ownership and the team becomes “our” team rather than the boss’s team. Many people consider trust an intangible quality that cannot be measured, but an empowered team built on trust has lower turnover, lower hiring and onboarding costs, and improved connectivity and continuity both internally and externally. How can we build trust? Let’s focus on two ways any team can build trust: The first way is by developing your team deliberately, so you are comfortable placing your trust in them. The second involves incorporating your team into planning, thus demonstrating the trust and faith you have in their experience and their expertise. Building a team that you are comfortable trusting begins with onboarding.

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Hurricane Season Is Just Around the Corner

Are you Prepared? By Shawn Woedl AccuWeather recently released its 2023 Atlantic hurricane season forecast, and although predictions point towards a less active season, it will still bring certain dangers and the potential for property loss. Tropical weather forecasters at AccuWeather are projecting 11-15 named storms, with four to eight expected to reach hurricane strength. The Atlantic hurricane season begins June 1, so now is the time to prepare your properties and tenants in hurricane-prone areas. Catastrophic Losses Have Affected the Property Market The extreme weather events of 2022, Hurricanes Ian and Nicole especially, caused a significant shift in the insurance market. Many carriers in Florida have suspended writing new business to assess their financial situations and ability to stay afloat. Unfortunately, this also means that substantial rate increases are imminent as carriers attempt to keep pace with costly insurance losses. Although Hurricane Ian missed Louisiana, carriers are still feeling the impact of the 2020 and 2021 hurricanes. Properties in Louisiana have a high chance of incurring costly losses, making it difficult for carriers to maintain a healthy book of business. Many insurers have already canceled existing policies or announced they will not be renewed. Other parts of the country are also seeing changes in property insurance. Rates and losses are being evaluated across the board due to the increased severity of inclement weather. Stricter underwriting guidelines and higher standard deductibles will make it difficult to find coverage in states like Alabama, Florida, Louisiana, Mississippi, and Texas. Hurricane Mitigation Tips Natural disasters don’t wait on humans to be ready to respond. Preparing your properties and tenants well in advance of a hurricane risk can help save thousands of dollars and maybe even a life. Prepare your property »          Trim trees and shrubs well in advance of a storm so they can withstand higher winds. »          Secure loose gutters and clear debris to prevent water damage.  »          Reinforce security of the roof, windows, and doors. Brace garage doors. »          Move exterior furniture, yard ornaments, or play equipment indoors. »          Cover all windows — permanent storm shutters are best, or board windows with 5/8” marine plywood. Tape does not prevent windows from breaking. »          Ensure that the sump pump’s backup battery is working. »          Purchase a portable generator for use during outages. Store it outside, away from windows and doors, and protected from moisture. NEVER try to power the house wiring by plugging a generator into a wall outlet. Prepare your tenants Advise tenants to stay alert for updated emergency information and follow shelter-in-place guidelines: »          Close and lock all windows, doors, and storm shutters. »          If flood waters rise to dangerous levels, go to the highest level of the building, and call 911. Do not climb into a closed attic; individuals may become trapped. »          In case of high winds, go to a small, interior, windowless room on the lowest level. »          Have adequate supplies in an emergency go-bag; several days’ worth of water, non-perishable foods, medication, and pet supplies. »          Follow instructions from local authorities. »          If advised to evacuate, do so immediately. Do not drive around barricades. Do not walk, swim, or drive through flood waters. Stay off bridges over fast-moving water. Do not go back to the affected area until local authorities advise it is safe to return. The Differences Between Wind/Hail, Named Storm, and Flood Coverage Hurricanes and other severe storms may involve many causes of loss simultaneously, which might not all be covered by the same insurance policy. The following coverages, though not exhaustive, may kick in at various points during the hurricane season. Wind/Hail Most standard policies for investment properties include wind/hail coverage. Although, in some states, it may be excluded and needs to be purchased as an endorsement. Wind/hail primarily covers damage caused by heavy winds, tornadoes, and hailstorms. These weather phenomena can be common in coastal locations and Midwest areas and may lead to roof damage, broken windows, or damage to detached structures like garages or sheds. This cause of loss often carries a separate deductible from other perils, such as fire. This is typically a percentage of the insured value, which can differ based on the property’s distance to the coast. So, if your property deductible is $2,500 and you own a single-family insured to $200,000 with a 5% wind deductible, you are responsible for $10,000 before insurance payouts begin. Named Storm As soon as a storm is given a name by the National Weather Service, standard wind/hail coverage no longer applies. For damage caused by a named tropical storm or hurricane to be covered, your property policy must include Named Storm coverage. It is important to understand that damage caused by a rain or storm surge may or may not be covered depending on the situation. If a windstorm or hurricane is determined to have created a “storm-caused opening,” such as lifted roof shingles or a broken window allowing rainwater to enter the home and causing damage within the property, damage may be covered. However, if water enters the home due to a “storm surge” (an abnormal rise of water levels due to the presence of a storm) it would be considered a flood. Flood Flood coverage is almost always excluded from a property policy and must be purchased as a separate policy or endorsement to be covered. A flood occurs when two or more acres of dry land or two or more properties are overrun by water or mudflow. Flood coverage can be purchased through the National Flood Insurance Program (NFIP) offered by FEMA. Private options that typically waive the waiting period associated with NFIP are also available. A Flood policy will also come with its own deductible. Other Coverages to Consider If you own properties in a hurricane-prone area, you must discuss exposure with your agent to ensure you are comfortable with the coverage you have. Below are a few additional coverages you may want to consider. Other Structures Detached structures, such as a shed or garage, need

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From Portfolio Asset to a Rental Home

A New Perspective on SFR Management By Nickalene Badalamenti-Kalas The housing crisis of 2008 sent seismic waves through communities across the country and left a lasting impact on how investors and property management companies handle single-family rental property management. That event will not be the last of its type, and the lessons it imparted to investors, property managers, tenants, and their communities bear continual scrutiny as the housing market is buffeted by economic pressures both natural and manmade. The essential truth that should remain foremost in the minds of thoughtful investors and property managers is that people do not want a house. They want a home: a safe, sound, secure home they can make their own, within an attractive and economically stable community of like homes. Asset management strategies that proceed from this fact — with full transparency and regulatory compliance — will result in consistently satisfied stakeholders. All stakeholders. An Ounce of Prevention This shift in perspective — treating properties as private homes rather than numerical assets — is particularly critical when considering at-risk properties where occupancy is uncertain. Home deterioration is an exponentially accelerating process, and rapidly leads to plummeting home values and community blight. Timely and direct asset stabilization, as well as preventive and ongoing maintenance activities — utilizing experienced tradespeople with specific skillsets — can forestall this trend and stabilize properties and values. Here are important considerations in the process. Monitoring  Proper care and monitoring of at-risk homes are paramount. The recent popularity in single family rentals, pandemic protections, economic instability and severe weather events have created a perfect storm for homes that may be slipping through the cracks. Monitoring delinquency trends, resident and municipal concerns, and being proactive can directly stabilize homes and communities. Having an experienced asset management partner, with nationwide, dedicated, and expert field-service representatives on the ground, can help identify and alleviate these risks. Inspection  Once a home becomes at-risk, a proper and thorough review of assets should be made, within legal limits. Proper training, oversight, and support of the process is extremely important. Inspectors should understand the spirit of this often-delicate task, while still providing accurate and complete documentation of the property’s condition and occupancy. This is another area where expert asset management professionals can deliver a fast, technology-enabled inspection — fully documented with geo-tagged and time-stamped photos — that meets all code compliance regulations. Equally important is the process by which these data are processed. There are numerous indicators for a successful occupancy determination. Correct reporting of utility status, condition of home and grounds, postings on the home, presence of personal property, and in many cases neighbors can be helpful. Inspection reporting should have triggers that notify stakeholders of areas of concern. Negative utility status, signs of theft, vandalism or fire should be immediately reported to the client. Complete and prompt reporting are key to filing claims, chargebacks, and overall asset stabilization. In cases where eviction is unavoidable, the need for experts on the ground to manage protocols such as cash-for-keys — and to coordinate in full compliance with every agency – becomes clear. Be Proactive When legally possible, an investor or property manager should take all necessary steps to preserve and protect the asset. Homes are not designed to be left open to the elements with non-working utilities. Neglect and deferred maintenance come with telltale signs: overgrown lawns, debris and detritus accumulation, and excessive postings are indicators of vacancy, and can lead to further violations, theft, or vandalism. The condition of the home interior is equally important. Homes should be free of infestation and intrusion. Any signs of mold, mildew, or roof leaks should be reported with location, size of area, cause, and remediation plan. All physical hazards — broken steps, handrails, tripping hazards — should be proactively addressed. Exposed utilities including gas, water and electricity should be properly capped off, regardless of present utility status. Plumbing, electrical and HVAC should be in good working order and up to code  Communication Residents and municipalities are at ground zero for “keeping small fires from becoming large fires” and being proactive with residents when asset stabilization concerns arise. Being available, transparent, and providing effective violation resolutions with full code compliance will help prevent potential legal and reputational risks in the future. Right Vendor, Right Time, On Time  Third party partners range from general contractors, trade partners and handymen to licensed field service professionals, locksmiths, debris removal and storage companies. It is essential that the correct vendor partner be engaged for each required task. Again, we see the importance of utilizing an asset management partner who has established relationships with a seasoned service vendor network. They will be experts at their craft, with the experience to know the most efficient solution to any challenge, and the technology tools to accelerate the process. Market- and Tenant-Ready The considerations outlined above reflect a shift in perspective that leads not merely to new tenancy, but enduring tenancy that drives property preservation, increases value, and enhances communities.  But this is not a simple process, nor a responsibility to be lightly assumed. From the legally and emotionally charged eviction process, to the regulatory minefield that is home inspection, stabilization and preservation, moving a property to a market- and tenant-ready state requires expertise, on-the-ground experience, and resolute attention to detail at every stage of the process. An asset management partner that can deliver that level of end-to-end performance is the servicer’s strongest ally.

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