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Case Study: Kansas City Value-Add Dilemma



Case Study: Kansas City Value-Add Dilemma


Scenario

The ownership of a 150-site community, located in the Kansas City area, hired Blank Family Communities to take over management of the property.


Challenge

The community was in the process of a value-add through occupancy program and while occupancy had increased, delinquencies were very high. Ownership also acknowledged a lack of insight, processes and organization at the property.


Action Steps

Blank set up a 90-day timeline to take corrective actions.

Our initial review discovered a major disconnect at the staff-level with information being reported to management not matching up when a deeper look at collections/delinquency was taken. We also noted inefficiencies in the area of community maintenance. We took immediate corrective action that included re-staffing the community manager position as well as members of the maintenance team. At all levels, we implemented Blank Operating Methodology.


Among those steps:

· Examining and updating all resident information, integrating it into more robust and detailed management reporting systems. This provided us with a better understanding of collections dynamics and, in turn, the information we needed to put more effective procedures in place moving forward

· Sending Notice of Demand letters to all residents with a delinquent balance of over $100

· Increasing collection calls and door knocking efforts to twice per week

· Increasing our underwriting qualification standards- ensuring only qualified renters were approved for occupancy


Results

At the end of the 90-day program, we had increased collections by 100% and decreased delinquency to below 7%. We also filled the remaining inventory homes and cut renovation costs with a new maintenance team able to handle in-house what was previously contracted out. The bottom line increased tremendously.


Final Takeaways

On-site staffing is the lifeline of our business. Hiring capable professionals and providing them with appropriate training and oversight was key to turning around this community. We have a set schedule for regular reporting and meetings with ownership, which gives them the insights and information they need to feel comfortable with to ensure the ongoing health and profitability of their asset.

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