How We Started our Small Corporate Apartment Company
How we got started was a rewarding but painful ordeal. My father found 3 buildings with the same owner/manager. They were built in the 1970’s and were roughly new but the biggest attraction was that the location was perfect. It was in walking distance to the Grove which is a big deal here and centrally located to everything. Regrettably there was an immediate conflict between the owner’s attitudes and ours. They had a hard and old Russian-Survivor attitude and my parents have salt of the earth Minnesota “let me fix you a little-lunch” mentalities.
Being new in the corporate housing biz in 2003 and having landlords actually rent to us back then before short term rentals were recognized and understood was a goldmine. Within one year we had 30 units in all three buildings during the 2nd great bull market of my lifetime. We took all of their vacancies immediately upon offering, and we always paid on time. They must have loved us as many landlords love us now because 90% of the physical damage to units comes from moving furniture in and out but with us, once we’re in, that’s all the moving we do and they now realize the caliber of our tenants.
Rents were ridiculously low in those 3 buildings. This was possibly due to mismanagement, a lack of caring, or a combination of the two. Once the neighboring buildings saw what we were doing and how much of an asset we were, they welcomed us with open arms when a year before had literally hung up on us no matter how many vacancies they had. We got our foot in the door and we started building our business across the street, down the street and up the street as well. I instituted a lower and separate tier to make up for the inadequacies of the initial buildings themselves –regardless of how nice they were inside with our furnishings. At the time, I figured we could give our tenants more of a choice with 2 price points.
During our expansion and dealing with other management companies, my parents started to realize just how poor the management was at the original 3 locations. The Russian couple had become completely reliant on our business but had not bent an inch since we had started with them. We were still paying for their repairs, we were fixing up their lobby, and we had to have our own handyman on call because they refused to fix the most basic things. Whatever poor management had been going on before ceased entirely when we picked up the slack, until we stopped that is. In the 4 years we had been with them, they were greeted in the hallway at every instance with an unreciprocated smile, and not even a ‘thank you’ for the years of presents at all the holidays. We had had enough. They had not. They continued to make my parents miserable about the most inconsequential things. So much so that when the housing bubble burst and I came on, we cut them loose, and I was happy to do it.
We lost a massive amount of money during the downturn of our economy. We went from 45 units to 14 and even had vacancies then. That was a year and a half ago. We completely eliminated the lower tier of apartments we had at that time and focused on quality and exclusivity. While we have built up in this market, we aren’t going away even though sometimes it’s a fight every step of the way. We are constantly exploring new opportunities, taking on new modern contemporary furniture and upgrading inventory like the 42” HDTV’s, Unlimited Nationwide Calling, all in beautiful buildings and of course all inclusive. We have learned a thing or 20 along the way but one of the things that we have never changed is that to be successful, your clients always come first, no matter what. Whatever nonsense was or is going on behind the scenes, we never let our tenants know it and we never let anyone see us sweat. We’re a small business that is here to stay and we’re not going anywhere.