RHA Calendar of Events

Dear Maintenance Men

by Jerry L’Ecuyer & Frank Alvarez Dear Maintenance Men: I am interested in becoming a Maintenance Mechanic or tech. What skills should I hone or include in my “Tool Box”? Robin

Dear Robin: That is a very good questions. The list below should be considered as the minimum needed to be a well-rounded maintenance technician that wants to be excellent at their job.

1: We believe a good maintenance mechanic needs a bit of “Detective” in them or have Problem Solving Abilities. In other words; getting to the root of the problem and not just fixing the issue at hand. Find out what caused the issue in the first place.

2: Care about the details. The details can including anything from noticing something out of place to having the right tools for the job at hand. Detail oriented means having a keen eye on what is going on around you and making sure “good enough” is NOT Good Enough. An often forgotten detail is the importance of being on time & clean up after the job.

3: Technical aptitude or technical abilities. Learn the system you are working on. Become proficient, get hands on training on systems you are unfamiliar with. Attend training programs etc.

4: Learn organizational skills. Being organized will save time, money and will create efficiency to get more out of each day.

5: Ability to work under pressure. In other words; get in, get out and get the job done quickly and correctly the first time.

6: Be versatile. Don’t be scared to try something new. Don’t get bogged down; learn to think outside the box to find solutions. Not everything is black and white.

Dear Maintenance Men: We tried to replace an angle stop valve under the kitchen sink, but found a brass collar around the copper pipe, which traps the nut behind it. The new angle stop threads are not compatible with the old nut. What can I do? Also, how often should I routinely replace my under sink water flex lines? Roland

Dear Roland: On the first question; it is always best to remove the old collar. That is easier said than done. You cannot pull off the collar with your fingers, it is too tight. Pliers will damage your soft copper pipe and cutting the line behind the collar is OK if you have enough pipe to spare. But, in most cases the space is limited and cutting the line won’t work. The hardware or plumbing store sells a compression Sleeve Puller (approx. $20.00) designed for this job and it will not damage your pipe. You can now install your new angle stop valve. An alternative once you remove the collar is to solder a male or female ½” fitting to the end of the copper pipe. Install a male or female angle stop valve and never again deal with a stubborn brass collar. If you ever need to replace the valve, just twist it off and install a new one. On your second question about replacing under sink water lines; if any of your lines are the white plastic lines, replace them immediately, they are a flood waiting to happen. We like using the stainless steel braided flex lines. They last a long time, don’t seem as susceptible to fatigue or abuse. A way to spot a bad flex line before they leak or burst, it to look for telltale signs of rust, calcium build-up, loose or broken braids, tight kinks, brown spots or they just look bad. While you are replacing those water lines, be sure to replace the angle stop valve also.

Dear Maintenance Men: How do I get oil or grease stains out of concrete? I have both a concrete patio and a parking area with grease stains and soap and water does not get them clean. Brenda

Dear Brenda: Go to your local grocery store and pick up the cheapest brand of cat litter you can find. Spread the cat litter over the oil stained concrete and grind it in with your shoes. Leave the litter in place for a minimum of an hour or best for 24 hours. Then sweep up the cat litter and the stain should be gone. Cat litter is an absorbent that helps draw out the oil or grease. If you have a large area to clean, you may want to go to the hardware store or industrial supply house and purchase 50 pound bags of Absorbent. The cost is a little bit more than a regular sized bag of cat litter at the supermarket.

WE NEED Maintenance Questions!!! If you would like to see your maintenance question in the “Dear Maintenance Men:” column, please send in your questions to: DearMaintenanceMen@gmail.com

Bio: If you need maintenance work or consultation for your building or project, please feel free to contact us. We are available throughout Southern California. For an appointment please call Buffalo Maintenance, Inc. at 714 956-8371 Frank Alvarez is licensed contractor and the Operations Director and co-owner of Buffalo Maintenance, Inc. He has been involved with apartment maintenance & construction for over 30 years. Frankie is President of the Apartment Association of Orange County and a lecturer, educational instructor and Chair of the Education Committee of the AAOC. He is also Chairman of the Product Service Counsel. Frank can be reached at (714) 956-8371 Frankie@BuffaloMaintenance.com For more info please go to: www. BuffaloMaintenance.com Jerry L'Ecuyer is a real estate broker. He is currently a Director Emeritus and Past President of the Apartment Association of Orange County and past Chairman of the association’s Education Committee. Jerry has been involved with apartments as a professional since 1988.

What deals can be made during COVID?

By Clifford A. Hockley, President at Bluestone and Hockley Real Estate Services

We are all wondering if brokers and investors can find deals during the pandemic. The answer is a resounding yes!!! Investors, appraisers, and financial institutions are resetting their vision and policies to adjust to our new reality. Consensus is this current environment is not going away anytime soon so we need to adjust. In addition, 1031 pressure has not abated, especially given the likelihood it might be done away with if Joe Biden gets elected. Many investors have stored up financial resources before the COVID – 19 downturn looking for a recession to profit from.

•Apartments – Especially those properties where tenants have consistently paid current rents over the last “COVID” months. •Other apartment related considerations to consider: •Very low-income market properties are finding high rates (30-40%) of delinquency. •Middle income units rented by predominantly white-collar tenants are seeing closer to 10% COVID-related delinquency rates. (Not as risky) •Newly constructed high-end properties may have trouble getting financing, due to high vacancy rates. •Mid-market properties appear to be attracting more attention that those in Global Gateway markets •Tertiary market apartment properties that benefit from local diverse economies (i.e., not in college or single-employer towns) are also desirable. •Affordable housing – where the government pays the rent – also remains desirable in present market conditions.

•Industrial •Urban -infill properties that serve last-mile delivery applications •Retail buildings where tenants have paid the rent •Fully leased Medical Buildings •NNN buildings where the tenants have paid rents •Mobile Home Parks •Owner user buildings using SBA loans – many businesses are choosing to take advantage of a buyer-friendly transaction environment coupled with a relatively borrower-friendly interest rate environment and fine print language in the CARES act , where the SBA will cover all loan payments and fees . This relief is available to new borrowers who take out loans within six months of the President signing the bill into law.

Appraisers are making adjustments

Appraisers are getting guidance from the Appraisal Institute. As a result, they are making significant edits to their appraisals. For example, appraisers are:

1.Increasing CAP rate estimates (due to estimated lack of rental income or lack of buyer demand) which inevitably reduces property valuations 2.Adjusting income estimates for properties and adjusting vacancy rates to allow for tenants that are not paying rent given COVID conditions. (Remember that the Federal and State governments have frozen evictions during the COVID pandemic). 3.NOI adjustments (Both by estimating increased expenses and lowered income) 4.Using verbal quotes from real estate brokers that reflect a slowed real estate marketplace 1.This then gives shelter to appraisers to make additional “adjustments to lower the appraisal value” 5.Often deleting the cost approach from appraisals as not being relevant for the time being. This limits value calculations to the income approach and the comparable approach 6.Ignoring relevant near-term sale comps (with high CAP rates) 7.Increase the weighting of appraisals to the low end of the income approach To get deals done, investors and real estate brokers need to understand the current appraisal reality and adjust their deals to get them closed.

Financial institutions are making adjustments

Financial institutions are asking for the following deal alterations as part of their underwriting, to make loans:

•Higher down payments with loan to value adjustments •Higher interest rates •Larger prepayment penalties •Lending is limited to investors with significant global net worth •Lending to well-established investors with 10 + years of experience •Asking Borrower for 40% or 50% down payments

•Lending only to those with existing relationships or those that are willing to bring a relationship to the bank •Asking Borrower to leave 6 – 12 months of P and I loan payments in the bank as security that can then be applied to the first set of payments

Recovery

Brokers and investors cannot wait for a recovery. They need to complete transactions now. There is an inherent demand in the marketplace driven by aging Baby Boomers who are trying to reposition their assets. This adds to the pressure of deals that were in the hopper when COVID arrived. “When we look back on COVID, what we will see is not a wholesale change in how we live and how we do business. Instead, we’ll see that already extant trends sped up,” explains Solomon Poretsky, Chief Development Officer of SVN International. He continues, “while we’ve seen some short-term change in the market in the longterm, the fundamental reasons that people do transactions will not change.”

The CARES Act and government support for business through SBA loans, PPP loans/grants, and extended unemployment benefits have been instrumental in supporting the economy. There is not an American who does not know that we all need to open businesses and get employees back to work.

The Fed has warned that the economy cannot fully recover until the labor market gains momentum. It may be likely that economic activity will not fully pick up until a vaccine is shared with all working Americans. “For the economy to fully recover, people will have to be fully confident, and that may have to await the arrival of a vaccine,” said Fed Chair Jerome H. Powell during a 60 Minutes Interview. He believes the economic recovery may extend through the end of 2021.

https://www.forbes.com/sites/reneemorad/2020/06/12/5signs-that-suggest-another-stimulus-check-iscoming/#49031de9ce91

COVID-19 is creating a challenging environment to operate in. Buyers with cash or Sellers that can carry paper will be in high demand, to help brokers close deals. Sellers may need to make some limited concessions if they sell now, depending on the supply/demand characteristics of their marketplace. This being driven by marketplace valuation adjustments demanded by the financial industries.

Challenging environments are ones where competent real estate brokers truly prove their value. COVID has not changed the inventory – it is still there and, to a large extent, is still occupied and generating rent. Where the change has occurred is in how lenders, sellers, and buyers come together and craft terms that work for all of them. The assets are the same, but the market is different, and that change is affecting the deal risk and volume in the

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This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum paying special attention to the risk section prior investing. IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax and legal professional for details regarding your situation. This material is not intended as tax or legal advice. There are material risks associated with investing in real estate, Delaware Statutory Trust (DST) properties and real estate securities including illiquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, potential returns and potential appreciation are not guaranteed. Securities offered through WealthForge Securities, LLC. Member FINRA/SIPC. Kay Properties and Investments, LLC and WealthForge Securities, LLC are separate entities. Preferred return is not guaranteed, and subject to available cash flow.