How to Renovate an Apartment While Maintaining Occupancy
Roan Yarn has over 15 years of real estate experience, which began as project manager for a 46-unit building in Miami. In our recent conversation, I learned that on his first project, he was instantly met with a HUGE challenge – the 46-unit was on the brink of being condemned and had a horrendous reputation in the community. Roan explained how he was able to salvage the situation and renovate the building while the tenants were still occupying the units!
46-Unit: Addressing Concerns
When Roan came on as the project manager for a 46-unit building in Miami, his main hurdle to overcome was addressing the community’s concerns, which were three-fold:
- Some of the tenants were afraid that the building was going to be condemned and that they would become homeless
- All of the tenants were living in substandard conditions.
- The local news had representatives at the property trying to get the scoop on the property’s situation.
Needless to say, Roan had his hands full. However, he understood that the community, and especially the tenants, simply needed to vent to someone. Sometimes you have to just stand in the line of fire, and that is how Roan approached the situation. He recognized that there was a lot of displaced anger. The best way to dissolve the frustration was to let them talk it out, take the heat – even though it was the fault of the previous owner and not him – while offering constructive solutions to their concerns.
The Importance of Communication
Aside from wanting to be heard, the tenants also wanted to see action taken towards addressing their concerns. Therefore, Roan would show each of the tenants his plan of attack. The tenants were provided bullet points with a couple of steps on what the process would be. Once they saw that, Roan could tell that the tenants comfort levels shifted completely.
Communicating the plan of attack with the tenants only addressed the tenant and community’s concerns. Roan’s next obstacle was to figure out how he was going to repair all the units while the tenants were still living there. Even though the property was almost condemnable, it had 60% occupancy. People were living in terrible conditions. But, terrible conditions are better than being homeless. Therefore, Roan didn’t want to unnecessarily displace families from their units. Also, this is a business, so he couldn’t cut off the properties income stream either.
Roan had to communicate with the tenants and be sensible to the fact that they would be living on a construction site. He accomplished this in similar fashion to how he addressed their initial concerns – open communication and dialogue, being respectful, and standing in the line of fire. More specifically, Roan’s plan of attack was a simple three-step process.
Three-Step Plan of Attack
First, he had to assess the condition of the units. Ideally, a property that is in condemnable condition is completely vacant. All you have to do is go in, gut everything, and start all over. But, we don’t live in an ideal world! So instead, Roan had to conduct a unit-by-unit assessment for what repairs were needed with tenants still in place.
Next, which was the most difficult part, was conveying that information to the tenant that was living there. Contractors advised Roan on how bad things were during the assessment. But, it was his job to translate that into laymen’s terms and communicate the situation to the tenants. For the majority of the units, the tenants were required to “move-out” for 24 to 48 hours. In some instances, Roan had the tenants move all of their belongings to the curb and then have them bring it all back in after repairs were completed.
Finally, the last step was to make the required repairs.
All in all, this was a great lesson in the power and importance of open and honest communication.
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.