Interview with Russ Haims May 2016

This is part of the Worcester Rental Real Estate Networking and Training series.

30 Years of Experience: Russ Haims

 

[Start 0:00:00]

 

Rich: Russ, thank you very much for joining us again.

 

Russ: My pleasure. Thank you for having me.

 

Rich: For everybody who wasn’t here just to refresh everyone’s memory, let’s introduce you. Let’s talk a little bit about you. Your company is Hampton Properties, LLC, right. Can you tell us a little bit about Hampton Properties, how that got started, and how long have you been up?

 

Russ: Sure. Well that’s actually an interesting clarification because the email blurbs keep calling out as 40 years’ experience. I was not a real estate investment prodigy at age 14.

 

Rich: I was wrong about that myself.

 

Russ: Thirty years’ experience; this week actually makes 31 years, so I started when I was 24. I never had a real job. This is all I know. I started Fitchburg, Leominster, Gardner; I carried a gun fulltime, no surprise. Since I became a husband and father, I decided that carrying the gun everyday wasn’t the route, so I concentrated more on Worcester, got us geographically spread out in different cities, as I don’t live in the area. I manage properties, and they are quite a few. We got some big ones going on in Elm Street right now. You probably see behind the Greek Church, two four-storey buildings being totally ripped apart.

My specialty is I tend to seek out the worst properties in the neighborhood that I think has a long-term potential stability.

 

Rich: Do you have pictures then on your website?

 

Russ: Yes, I do.

 

Rich: You have an awesome website, by the way.

 

Russ: Thank you. It’s about to be modernized and completely redone.

 

Rich: I thought it was [crosstalk 0:01:40] already.

 

Russ: Got to stay relevant.

 

Rich: Oh, my lord. Okay, so you’ve been in the business for 30 years.

 

Russ: Thirty-one this week.

 

Rich: All right, happy anniversary. How many units have you acquired, career to date, and how many do you handle now?

 

Russ: Career to date, I don't know. I’ve just really been keeping track since 2000 and that’s 358 in Worcester just since 2000.

 

Rich: Okay.

 

Russ: Renovated them, sold some. I’ve got 143 now.

 

Rich: Oh, my lord. Do you have a business philosophy that you can summarize for us and what would it be?

 

Russ: My philosophy is to improve neighborhoods, improve quality of life by improving neighborhoods one property at a time. That’s pretty much the core value. A lot of our properties are done in a sustainable way, meaning we don’t just take Band-Aids and do a temporary fix, put the lipstick on the pig as the picture showed and try to sell it.

Most of what I do is I try to do everything from the inside out if the budget warrants it and/or justifies it. I have some examples of historic properties on Main Street by Clark University that are just pumped and really turned around that block, which is satisfying to the neighborhood as well not just to me.

 

Rich: Where were you when I lived in the neighborhood [laughter]? What we’re going to do is we’re going to pick up where we left off because Mike and Russ shared so much awesome information last time. We didn’t actually make it through the original Worcester questions, so we’re just going to have to start from where that was.

We’re starting to talk about how often do you find yourself in court.

 

Russ: Rarely, currently but I would say in the last 10 years, I’ve been in court maybe 6 times.

 

Rich: That’s a pretty good track record. I think any of us could live with that. We’d be pretty pleased if that was the case, right?

 

Russ: Yeah. I’ve just been reeducated that I’ve actually filed more summary processes in that quite a few, but it turns out those were negotiated or worked out prior to an actual hearing and trial date. Nine times out of ten those are not people I have rented to in my renovated properties. They’re usually properties that I acquired, some are still living their rent-free for quite some time after I moved them. That’s the recourse.

 

Rich: Got you. What are some of the ways that you’ve been able to stay out of court in all the half dozen times in a decade?

 

Russ: When I purchase a property, someone has been there. They don’t pay rent for a year or two. I make no judgments usually, and I make them an offer, find each other ‑

 

Rich: I’ll judge enough for the both of us. Not paying rent for 1 or 2 years, this is something that happens at places you pick up?

 

Russ: Ultimately if the goal is to get possession of the apartment, to renovate it, and transform the property, I can’t hold a grievance. Typically that’s what the prior landlord did and lost, that’s why they’re no longer the landlord. They gave up. I don’t want to get into battles. I would rather negotiate a settlement and just have someone find something alternative later they can live in because now as I once had an exchange with someone. She said, “What about all the problems here?”

I said, “You don’t mind them for free, do you?”

She said, “Wow!”

I said, “I’ll tell you what, I have a select team of people here tomorrow and fix absolutely everything that I’m concerned with or you can have your rent.” I said, “Look, the game is over. You lived nicely for a year. It’s time to change.” And that worked. I don’t want to spend a lot of time in the eviction stuff as I know you’ve covered it here, but it’s not my forte. But I know I avoid it because I’d just rather deal with the people. Regardless of their past with the landlord, I start them with a clean slate as best I can. Sometimes circumstances are different, but…

[0:05:16]

 

Rich: Sure. You focus on it sounds like expressing to them in as nice way as possible that the game is over and trying to find a way for them to move on from here without going to court.

 

Russ: Exactly, exactly. If they need financial assistance, I pay people relocation funds. That makes these things happen a lot more quickly by doing it that way. If the end goal is to renovate the property, it’s not safe to renovate it around them. They’re not going to continue to pay the rent after you fix whatever their grievances are and that they have to leave as a result. You try to find a way to make it happen for them and find out what their needs are. It works for most.

 

Rich: Sure. Then nothing is 100 percent, right? You have a lot of personal guarantors, right, because you have some student housing and people co-sign, is that right.

 

Russ: Uh-huh. Yeah.

 

Rich: For those of us like myself who have not done that probably as much as you have, can you tell us what that process is like? Is there is any difference if they’re in-state or out of state?

 

Russ: Sure. Just out of curiosity, how many people here rent to students? [unintelligible 0:06:21].

 

Rich: Wow.

 

Russ: How many people do not get parent guarantor signatures? Don’t be bashful. Not everybody does. It works if the parents live in this country. If the parent is in China, it really does no good.

 

Rich: Okay.

 

Russ: But I find it’s the American ones that need to be corralled and made to behave because they tend to be the more entitled spoiled brat type – I’m sorry I’ll say it – and I find that the foreign students tend to take things a little more seriously. They don’t tend to party as much or they have as much the American kids and I’m American and I don’t judge, but that tends to be a behavioral observation.

 

Rich: Interesting. Okay, so as long as they’re in the US, if they’re out of state, you’d still get the parent guarantee?

 

Russ: Yes, and I often will get someone who had their parents maybe an attorney, “Well, I’m of age. I can legally sign this. I don’t need to sign a guarantor from a juvenile.”

I go, “Yes, are you paying the rent?” Silence, of course [laughter]. I said, “If you were just to apply on the merits of you alone, obviously you won’t qualify. You need your parents to pay, meet with us directly or through themselves. It’s required.

 

Rich: I’m starting to get a feel for how you communicate with people. It sounds like you don’t bark orders to people as much as you ask a question and leads them to understand the situation.

 

Russ: Absolutely. I have to say regardless of how long I’ve been doing this, ego has no place in this business. If someone has possession of your apartment and you are condescending, if you have a little, it can really backfire. I have learned that by treating everyone equally with a certain amount of respect, before they don’t deserve respect, just assume that they do and treat them that way. It’s amazing the type of cooperation and open communication, less adversarial, and I find that most landlords that run into trouble is because they just “Well, I said so,” and that just becomes a whole difficult relationship that just gets into a more progressive problem.

 

Rich: It’s very easy to get into that kind of‑

 

Russ: Absolutely.

 

Rich: Relationship. With the cosigners and the guarantors, do you find that you have to call them up? Do you find that you have to enforce it, or?

 

Russ: It’s rare. I rarely don’t need it for guaranteeing payments. Students don’t tend to skip out of their obligations. It’s when some tend to violate our open party rules, damage, things like that, I have the right to send an eviction notice, which I do if someone has an open keg party, and I see those telltale red soda cups littering the front lawn that they’re not smart enough to pick up after the keg party, they get a 30-day notice and so the parents because they are the guarantor of the lease. That behavior comes to a grinding halt as possible.

 

Rich: All right. Got you! You have international students.

 

Russ: Yes.

 

Rich: And I know that you like to take security deposits, right?

 

Russ: Yes.

 

Rich: do you take security deposits for your international students?

 

Russ: Absolutely.

 

Rich: Okay. Realistically how do you do that that because that was actually a question last month that we didn’t get to answer.

 

Russ: Realistically how so?

 

Rich: Well, without giving away the answer, you need a tax ID number to set up the account.

 

Russ: Right.

 

Rich: And the question that we had last month when the housing court judge was here is well what we do if somebody doesn’t have a tax ID number, and then you can’t set up a security deposit account The answer is you give them a tax ID number, right, or you tell them to do it. Has anybody ever said you got a tax ID number from the IRS to set up any kind of business?

[0:10:08]

 

Russ: Yes.

 

Rich: Yeah. You can do it like 10 minutes. One thing the IRS loves to do is to give you a number so you can pay them taxes, right? They give you zero resistance. Is that true?

 

Russ: Right, right [laughter].

 

Rich: I assume that’s the answer. You just have them get one of those?

 

Russ: That’s one of the answers.

 

Rich: Okay.

 

Russ: I have also been told – well, I don’t want to slip into some deeper water there, but a prior housing court judge said you could handle it differently but I don’t want to get into any conflict with that, so I’ll save my answer.

 

Rich: Fair enough.

 

Russ: Yeah.

 

Rich: You had mentioned encouraging good tenant behavior, one of the ways you do that is to involve the parents if they go astray.

 

Russ: Uh-huh.

 

Rich: What other sort of ways you go about this? Medieval torture devices, do you threaten their family, what do you do?

 

Russ: [laughter] The first one I think is it starts with the right example by the property owner. If you don’t take care of your property, why should the tenant take care of their apartment? It starts with me, and it starts with my staff, and if we’re not cutting the grass, we’re not cutting loose trash even if someone else should have picked it up, we take a picture of the mailing labels, we look for the label of mail or something, and we photograph it and we charge the tenant, we warn them. We say, “Either you pick it up or you’re going to get a $100 charge for us picking up your trash.” We’re on it.

The properties that have the most chronic problems are the ones where the landlords are either absent or just permissive. They look the other way because they get their rent and once there’s a party, then there’s a bigger party, a bigger party, the damage, and it just escalates. So it requires like being a parent, you have to be consistent, you have to be strict, and it winds up being an easier relationship when you set the tone immediately because the moment you see signs of bad behavior, you nip it; otherwise it spoils other tenants, feeling that they can get away with things. It just escalates, so you have to know the signs.

 

Rich: Got you. So how does one cultivate an environment of on-time rent payments because behavior is a big thing, getting paid is another one? I mean aside from water boarding, That one is obvious.

 

Russ: [laughter] You know first of all diligence and setting up your expectations, we have an extensive lease, but we also have an addendum that seems like it’s a bit redundant but it clearly specifies besides open parties that’s forbidden but also that rent is due on the 1st. You’d be surprised many people sign a rental agreement and we call them on the 10th and they go, “Oh.”

I’m like, “You signed this. You signed that.” What we started doing to sort of mitigate the roommates because it’s not always all the rent that is outstanding. It can be a roommate. We’ve started converting most of our payments to go online, so they can just set it up a repetitive thing every month and then they don’t have to actively do it.

 

Rich: But if they do want to actively do it, it’s very easy to click that spot and perpetuate your website.

 

Russ: Exactly, exactly. Because we’re doing with – not all students. We have people whom I have inherited in buildings that are working adults who are responsible and they’re fine. I don’t just exclude everyone for the sake of students. But we have mixed population, but because everyone is tech-savvy, email and remainders is just the way to do it. But if someone is late, one roommate, I send an eviction notice to the entire apartment, and all the good payers put pressure on the one laggard because we don’t want to be babysitting that individual every month. We let them self-police. It’s not a rooming house. It’s an apartment. It’s collective responsibility. That’s everything we stress. This is not an individual effort. It is all of you, and I don’t want to be the babysitter. you have to learn to self-police. You’re adults or you want to become adults. This is part of the process.

 

Rich: And nobody likes that part of the process. But that’s a big thing with roommates. I think a lot of us have probably experienced that, you know there are two roommates and one of them pays half. “Well, I paid my half.” Right? Has anybody ever experienced that?

 

Russ: Uh-huh.

 

Rich: Sure, right. It sounds like you take pains to put it in an addendum and you have a conversation with them and kind of educate them about it a couple of different ways.

 

Russ: Uh-huh. We’ve actually gone so far when there have been chronic problem roommates. I can only think of a couple over the last 5 years. It is required the other roommates to finally act and oust that roommate that was clearly not up to the same level of responsibility as the rest of the house, so they replace them. I said, “This person will be a chronic hindrance to you and your ability to stay in the right apartment if you keep continually doing that,” so.

 

Rich: So they get voted off the island.

 

Russ: Exactly.

 

Rich: Okay [laughter]. Got you. I’m starting to get an idea of what communication is like with your tenants.

 

Russ: Uh-huh.

 

Rich: You mentioned sending out emails. What other advice would you have about communication in general?

 

Russ: Well for starters, I try not to refer them as my tenants. They’re my residents. They’re my clients. They’re the ones paying my bills. They’re the ones that hopefully are giving me positive cash flow, so I treat every single one of them with a level of respect that I need to make sure their experience is happy, and not just that they comply, that they keep it clean. I’m also appreciative of the fact that when they come in and pay rent, what I do is say, , “Thank you. We appreciate it. Is everything alright?”

[0:15:20]

It’s got to be a good experience. If it’s not, then they’re not likely to stay, they’re not likely to renew. Turnover is a killer. We all know that. I just heard. I went to a training at the Ritz-Carlton about customer service actually. That can be waiting tables or making up beds, but it talks about you have an opportunity with every time your maintenance person sees a tenant, you see a tenant to make sure that they’re happy because the people who aren’t, they said are nine times more likely to badmouth you to other people and that 66 percent of people who don’t stay for example in the Ritz-Carlton after having stayed there is not because of poor quality. It’s because of the attitude of an employee that turned them off.

 

Rich: That’s huge.

 

Russ: That’s a big one. How many of you would be happy if you never had turnover?

 

Audience: Yeah.

 

Russ: Right, so it’s a given, so what can you do to minimize it. It has all to do with them being happy, being satisfied not just living under your rule and taking it.

 

Rich: Got you.

 

Russ: Yeah.

 

Rich: So they’re not peasants in your manor?

 

Russ: They’re customers, right? You have to treat them that way.

 

Rich: Sure. You have mentioned one of the ways to do that is to take care of the place and be on top of repairs and maintenance. Can you tell us a little bit about how not everything is an urgent matter but some things are, so you got urgent matters. You’ve got things or upgrades that you might make down the line.

 

Russ: Correct.

 

Rich: And there are things sort of in-between, so can you tell us a little bit about your practices with that?

 

Russ: Absolutely. We have 24-hour answering service. I choose not to get phone calls personally. We’d rather have a systemized process in which a call might come in after hours. It comes to an email to me, my property manager, and if it’s an emergency, it goes to my maintenance staff, 2:00 AM. He determines if it’s actually an emergency. If there is a clogged sink at midnight because they’re cooking, it can wait until the morning. You don't have to jump out of bed to do that.

But the key here is having a mechanism so that you’re not necessarily disturbed at 10 o'clock, 11 o'clock at night. How many people have been interrupted in a family dinner or family affair because tenants called – I know you have, right? You get bothered on vacation. But something as simple as an answering service for $100, $120 a month, they will take the call. They will give you emails. They will call your maintenance person if it’s an emergency and not you. That’s something I chose to separate from my day-to-day. But it also gives a sense of reliability, so with the phone off, it’s always there, and it always works.

 

Rich: I think you mentioned last time something about having a consistent staff so people see the same faces all the time.

 

Russ: Yes.

 

Rich: Which means part of taking care of your customers is also taking care of your employees so they hang around for a while and they want to do a good job with folks.

 

Russ: Yes, yeah. Turnover is a problem. Look. I’ve run the gamut. Believe it or not, I can swipe a pipe. I can change a toilet. I can do a door locked. I can do almost anything except framing and stuff like that. I’m not the best at it, but I learned way back. When I was 24 years old, I said, “I don’t want to be dependent on anyone if I needed to jump in and do it.” But I’m not the best person to do it. It’s not the best use of my time and I’ve hired people at the lowest possible medium range. I’m hiring somebody now who’s at the right level, full time with benefits because I finally got the kind of quality of a person who gets it, communicates well with the resident, and communicates back to us properly. Is it complete? Is it finished? Are they satisfied? Was there anything else? Was there any other thing while you’re in there that they’re not going to call about in a week because you didn’t happen to notice it? Fix it. Take care of it. Do it.

The biggest mistake landlords make is putting off a tenant’s needs. It doesn’t have to be immediate. If it’s not urgent but a failing light or something like that, just take care of it because it’s like a thorn in their sides, and they don’t forget it when it comes time for rent payment or renewal.

 

Rich: Their memories seem to be excellent around those times.

 

Russ: Absolutely.

 

Rich: Yeah. So you were referencing Mike taking phone calls. Last time you guys were here, you and Mike O’Rourke agreed to wrestle each other in front of the room [laughter]. Is that correct?

 

Russ: [laughter] I can see it. Very good.

 

Rich: All right, so that’s not correct. All right, so in what ways have you adapted your business practices and strategies over the course of time? I’m sure you do things differently now than when you started.

 

Russ: Yes, and I think the single biggest thing that hits me when you say that, I look at my first answers, so like the SAT, stick with your first answer, is learning to rely on and delegate to other people. I tried to do it all. I tried to save money and these gray hairs came at a very young age. I don't know if it’s genetics or it’s just my stress level for trying to do it all. But I realized when I finally started hiring the right people to do what they do best, so I could sort of manage above and look at the strategy. Instead of working in my business, I was working on my business on a higher level to sort of do it right. That’s the hardest part is to let go.

[0:20:23]

In order for that to happen, you have to be willing to tolerate some percentage of mistakes. If you want perfection, you’re going to do it all yourself and you get nothing done because life happens. If you have a family, which I do, that’s more important to me than my business, and how to balance life and business and work is a tough one, but I’ve sort of found the equilibrium that works for me.

 

Rich: Delegating a lot and not just trying to be a one-man show, delegating things to other people has been the biggest thing?

 

Russ: Well, yes, because I’ve been a one-man show for the first 15 or so years doing it, and my banker said something very pointed to me. I mean we all have mortgage debt, I’m sure or some of us don’t. My banker said, “If you get sick or disabled, what happens to your business?”

I go, “I’m screwed.”

He said, “You’re right.” He said, “Do you have somebody who knows how to pay the bills so you don’t start having things shut off and your tenants getting pissed off? Do you have somebody that knows the books? Do you have somebody that can collect the rents? Do you have, do you have, do you have?”

The more I realized it, it made my business extremely vulnerable, and that is when I realized I had to start trusting and bringing in and training. Let me tell you, it’s the part I hate the most about this business is managing other people, not my tenants. Infrastructure, management and all that stuff is tedious because it’s never a perfect science. You just have to train people properly and hope that they perform in good will.

 

Rich: The kind of concept you’re talking about – have you ever read the book, The E-Myth?

 

Audience: Yeah, yeah.

 

Russ: No.

 

Rich: Some people have said yes. Well, you basically just summarized the book so thank you [laughter].

 

Russ: It’s not [crosstalk 0:22:01].

 

Rich: Is the author’s name Michael Gerber?

 

Audience: Yes.

 

Rich: Is that right? Yes. Okay. If what Russ is talking about is resonating with you right now, that is an excellent book to focus on, that concept, so you mentioned ‑

 

Russ: Let me just answer. Well the counterpart is well then I won’t make as much money. True! But you may because you may make more strategic decisions to grow your business to optimize income on that property or several other properties if you’re not so busy fixing toilets, answering emails, making notices, doing the books. You might be able to clear your head and say, “Wow! If I just did this, I could make more.” And be more relaxed, too, so it is a tradeoff and I decided I would rather do it that way just for my personal lifestyle.

 

Rich: If you’re more relaxed, it’s a little bit easier to take the diplomatic approach with residents who may have a certain attitude?

 

Russ: That’s true. That’s true.

 

Rich: If you’re stressed out, it’s probably little tougher to do.

 

Russ: I tell you. I just had a very important experience about that with a tenant who I believe her parents are lawyers and so she had this very – I don’t want to get into the details of what she demanded compensation. She was about to get nasal surgery. She believed it was to the mold in her apartment. Where was the mold? In the caulking at the bottom of her tub that she wasn’t drying and that’s why it’s there but I said, “Look, unless you’re licking it and sleeping in the tub, I’m sure it’s not affecting you and I’m sure you have some preexisting condition,” which she admitted. Nonetheless, I was getting pissed. She wanted to hear from the boss, and I finally gave it to my property manager.

He said, “I’ll tell you what, Russ, you’re emotionally charged over this. Let me deal with it.” And he did. It resolved. She’s done happily ever after and I’m no longer aggravated, but sometimes a tenant can get into your skin, and at the end of the day, you’re going to lose because it’s going to be such a distraction that for me I have too much to do. If you have a property or two and you got all the time to deal with it, that’s different. But I kind of have to fix and go, move and go. I can’t just dwell too much on any one individual.

 

Rich: Well, it sounds like it’s all your fault. You failed to educate her about not licking the caulking underneath the tub.

 

Russ: [laughter] Exactly.

 

Rich: You neglected to cover that at move-in time.

 

Russ: Yeah, I actually said that to her [laughter].

 

Rich: [laughter] It drives the point home. As far as delegating things to other people, what are some things that you’ve been able to, a process that you’ve been able to put in place to save them time and energy and streamline things because I get the impression that’s something you’re really good in your business.

 

Russ: You know what, I was not great with it. I hire someone younger. That’s not hard and – not 64, 54. He was a process junkie. He was go paperless, so now renewals are not done with four roommates circulating a renewal form in triplicate and then getting it back to us. Now it’s docu signed. They just email it around, docu sign it, done. No paper, efficient, things like that. We’ve done most of our stuff are now online. All our leases are online. Docu sign it. It’s in a PDF. It’s no longer consuming huge drawers year after year after year. We have had that, but we’re morphing out of that to more of a paperless system that’s him. That’s him saying, “Look. This is where we should go.”

[0:25:24]

I said, “I gave him the authority to do it and trust.”

 

Rich: Was that scary?

 

Russ: A little bit, but I realized it was necessary. The last thing, I was ready to get out of my comfort zone, but I just have to give it over and they’re doing it flawlessly.

 

Rich: You’re doing your files digitally. I don't know. Do you really think these computers are going to stick around, Russ?

 

Russ: [laughter] It could be a fad. I don't know.

 

Rich: All right, so when Mike is up here in September, we’re going to ask him from his view the pros and cons of student housing. But let me ask you what are the pros and cons of receivership from your perspective because that’s his bread and butter?

 

Russ: So you want me to talk about the pros and cons of student housing just to ‑

 

Rich: No, no. Just receivership, yeah.

 

Russ: Okay. I’ve only done one, so my experience is very limited. Mike has done dozens I think and all over Worcester County, so he has obviously much more experience. I found out it was a huge learning curve because it was so such oversight, so much reporting, so many visits to court, lawyers, and at the end of the day, you are scrutinized on what you can charge and there are I’m sure better ways of doing it. Probably the more you do it, the easier it becomes, the more routine it becomes.

For me, I said, “Wow! This is way outside of my business model and relied too much on other people for just tons of financial reporting.” I said, “You know, the finished product was great. It was beautiful. It got finished. It’s great. It’s occupied.” I sold it eventually because no one bid it at the auction for the right number. Mike knows how that works.

But I said, “I’ll only take what was in close geographic proximity to all my other properties, so I wasn’t traveling to do it.” I said, “That’s the only time I would do it.” If you sign up to be a receiver, you can say pass because they’re going to go down the list and say do you want this, you say yes or no. I was very selective and I did one that was within the same area as all my other properties, so it wasn’t a huge incremental distance effort but the time commitment was huge.

 

Rich: Yeah, it doesn’t sound easy.

 

Russ: No.

 

Rich: It’s not for everybody.

 

Russ: Remember this was a property that was vacant, condemned, and needed complete renovation to the point of getting it to be occupied. Not all receiverships, some are city ordered; others are through the attorney general, which was mine, which was much more extensive in renovation, not just lock it up, clean it up, and sell it.

 

Rich: Got you.

 

Russ: Yeah.

 

Rich: It sounds like one of the struggles you’ve had in the last phase of your business has been sort of relinquishing things to others. When you were just a one-man show, what was one struggle you had to overcome to kind of get to the next level from there, you know to get from where you were 5 years in to where you were in 10 in, to where you were 15 years in?

 

Russ: Well the hardest part was not wanting to go to Home Depot to chase materials because I could do it better and me being the [unintelligible 0:28:19] to keep people working, that was the transitional part. I was getting people working but then I was running in and how many times have you started a simple project and they can’t continue because you forgot one thing, one thing? It’s tedious and when you look back at the end of the day like, “My gosh! We can’t get it done.” And I spent back and back and forth and I got none of my own personal things done, so that was the hardest transition part was letting go completely but overseeing it.

 

Rich: Got you. What’s the next phase of your business from here?

 

Russ: Well, because my oldest is only 13, I don’t picture retirement anytime soon, so ‑

 

Rich: There are plenty of alternatives to college [laughter]. I mean like prison.

 

Russ: Cheap labor.

 

Rich: Yeah.

 

Russ: Getting him in the way I started.

 

Rich: You get him to join a gang.

 

Russ: [laughter] We have a few here. I think as I look forward, I’m trying to think what are the things that annoy me most about this business, there’s always the cycle. We know that every time that there’s a crash, then when it peaks, it’s higher than the last peak, and I think prices have gone very high. At some point, there will be a correction. I’m still kind of a deal junkie. I enjoy finding a project and taking a project and taking it from what it is, board it up, and dilapidate it to a new one. I don't think that will ever be lost. I love that: transforming properties.

I don’t like being a property manager, I have to be honest. That’s running a business. I like selectively seeing properties and seeing it come to fruition with my sort of a vision in my head. I like seeing it happen and then it stays that way hopefully if you do it right. That’s what I enjoy, so that’s my passion and that’s what I want to continue to do whether I still want to own a whole stable of staff, I’m not sure. I think I may want to consolidate fewer locations, more units for better economies of scale.

[0:30:12]

 

Rich: Got you! That’s why you haven’t cashed out of real estate and gotten into another business because there is still part of it that you’re still passionate about that you like?

 

Russ: I still, still love it because that’s the part I enjoy. I get to work what I like and let some of the more I have to say it mundane stuff, day-to-day, communicating, collecting rents, that’s tedious. After 30 years, I really don’t want to do that. But I enjoy the projects. It’s stressful. We have cost overruns. It’s not a perfect world or system, and we have surprises occasionally. But when you see it come to life and you’ll just say, “Wow! Look at the before and after picture. This was a dump and now it’s awesome, and I have great people living in there.” It’s very rewarding to me and I don’t see that ever changing.

 

Rich: It’s not just something that just affects your business and the people who live there. I mean if you renovated 300 something properties.

 

Russ: Uh-huh.

 

Rich: You’ve really made a different in the city.

 

Russ: Yeah.

 

Rich: You drive around and see people who do what Russ does on a large scale. It really makes a difference in the community, so that kind of feels pretty good, too.

 

Russ: It does because what it’s done is it’s raised the bar. For example, at Clark University 10 years ago when I really started doing this and seeing there are a lot of properties there that people are just hitting the minimum required level of habitation requirements and not really putting in landscaping and not really putting shutters on their house, when they do vinyl siding, not doing nice trim, instead just jumping the casings. You know what I mean sort of that the shortcuts. I started doing something nice, putting in nicer bathrooms, and nicer kitchens. I mean a lot of my kitchens have granite.

And they’re students, it started raising the bar for other landlords to keep up and rent their stuff. It didn’t appear to be such a big disparity between quality; others starting doing the very same thing, so it really did sort of set up pace. I’m not saying I’m the only one. There are a lot of other people who do a lot privately. They’re not taking government money and they’re not looking on tax deals, the smaller properties, doing the same good work in the neighborhood that I do. I see some in this room right now, and just raising the game so that the people who don’t want to do anything, they’re having a harder time filling their units or they get the type of tenants that don’t care because it’s cheap. They just get a vicious cycle with those properties, and there are some more of the holdouts that have to be turned over and cleaned up because it’s sort of stymieing neighborhood revitalization by those few problem properties. We know what they are, which ones they are.

 

Rich: The quality of the residents that you attract is in direct proportion to the quality of the units that you have?

 

Russ: I would like to think so, and what resonates with me especially in the student population you have a lot of parents that get involved and that’s sometimes a good or a bad thing. The child should not be treated as a child but some are reluctant to snip the umbilical cord to make decisions for themselves. When I hear a parent saying, “This is where I want my son or daughter to live,” that is the standard to which I really want to appeal to. We appeal at the safety issues, lighting, and all those types of things we know a parent will be concerned about.

 

Rich: Well that’s a double-edged sword because you don’t want the helicopter parents who are involved in every little thing with them, but it’s nice to have them there as a backup if they misbehave.

 

Russ: We do. We do.

 

Rich: Yeah.

 

Russ: While I’ve been stressing student properties, we have a lot of people who have been in the building years before I bought them, and we renovated the building and moved them to a new apartment in the same building and they keep to themselves, but those are not – because I don’t have parties, there is not this clash between those that have to get up for work and those that don’t have classes and can party. I sort of contain it, so it’s in a way cohabitation situation, easily managed.

 

Rich: That’s cool.

 

Russ: Yeah.

 

Rich: My best friend from high school is from Jamaica and he ever screwed up when he lived in Jamaica, before he got home to his parents, three other people in town had beat him, so I kind of wished sometimes that some of our residents did have that sort of family and support structure to keep them in line. It wasn’t just us [laughter]. That’s true. Is anybody from Jamaica? Is that true? Okay. She’s saying yes.

He said on his way home from school like the butcher would come outside and say, “I heard you got in trouble,” and give him crap about it. That has nothing to do with what we are talking about, ladies and gentlemen.

 

Russ: [laughter] But I enjoyed the distraction.

 

Rich: You mentioned treating residents as customers. You mentioned being stress-free and diplomatic. Aside from some of those things, is there anything else that you would say set successful landlords apart from those that seem to experience nothing but headaches?

 

Russ: Replace versus patch and that attitude. I had seen – no landlord in here. I’m specifically referring to someone, I’m thinking about on the West Side, who will pay a plumber to rebuild a 30-year-old faucet than just pick up a new one.

[0:35:14]

 

Rich: That’s fascinating.

 

Russ: It just seems that they’re thinking they’re doing a good thing but they have people just reworking all this old junk. It’s still old junk, and to stay relevant these days, you kind of need better stuff. When I see filching light fixtures, they have a tendency to break. They tend to be a little archaic.

 

Rich: We probably don’t have them in our houses, which means our residents probably would prefer not to have them.

 

Russ: Yeah, so that’s one of the things I see, and I also just see for example when the winter comes and it’s burdensome, not this past winter but the one before where it was just ‑ how many people get a second job just to pay to remove the snow? It was ridiculous. I had to get a Bobcat. It’s the landlord that doesn’t take care of the residents when they really need it, that there’s an issue with the tenant, they don’t forget that, and it becomes a blistered relationship. I find if a landlord who doesn’t take their tenants’ concerns seriously and either belittles it or just doesn’t fix what seems to be a nuisance item. They just don’t do it in a reasonable period of time. that’s a whole another discussion. Those people, it’s an attitude thing on the landlord’s part. They don’t care. They have other priorities, and/or they don’t want to spend the money and I think that’s shortsighted.

 

Rich: I’m reading a book right now called, Thank You for Arguing, and there’s a section on belittlement. It said, “Of the things that you can do to arouse anger in people, that is like one of the top three ways to do it, is to belittle something that’s important to them.” That’s really interesting that you brought that up, and as far as keeping people happy, it sounds like and also minimizing your faucet replacements and things like that, it sounds like you do a lot of work upfront to put the units in a type of condition that you don't have to be in there all the time fixing stuff.

 

Russ: Well, that’s it and I covered this the last time, too. Now when we go through, we’re going to go through a lot of turnovers. We’re putting in all-LED bulbs, how many times you get called that you got higher ceilings and people can’t change the light bulb. I don’t necessarily want my students on ladders or standing on a chair to take the globe off a ceiling fan.

 

Rich: So you only rent to NBA players?

 

Russ: Believe it or not, I have the tallest kid at WPI, 7’1”.

 

Rich: Okay.

 

Russ: I don't know how he uses the standard toilet.

 

Rich: Okay. You put him on the payroll to ‑

 

Russ: Yeah.

 

Rich: Handle light bulbs.

 

Russ: He’s been there 3 years. it’s awesome. But I’ve never met him. I’ve only seen his shoes outside and I went dwarves [laughter]. It’s funny. But the other thing is how many people have come in to their apartments and found the smoke detectors pulled off and missing or thrown around? We all do.

 

Rich: That doesn’t happen.

 

Russ: It’s not because they’re chronically going off, because their cooking methods are awful and they don’t use the exhaust fan hopefully that you provide. It’s because of that reminder beep of the backup battery, and they’re annoyed, so I get 10-year lithium batteries now to diminish that idea. It’s an expensive idea upfront but you’re not going to get called about it, you’re not to have destroyed or more importantly lost expensive equipment. Just do it on turnover. I came to a property that I did last year and I got – I’ll be honest pissed at the contractor who put in all the brand-new high-wired stuff of the backup batteries that came from the factory. How long do factory batteries last?

 

Audience: [unintelligible 0:00:00].

 

Russ: That’s why it was ripped down. Even if I install new stuff, I take out the junk that comes with it and put in the 10-year stuff. Just a little trick so it [unintelligible 0:38:41] nuisance items.

 

Rich: Sure, sure.

 

Russ: Yeah.

 

Rich: What’s one thing that others would say that you are particularly good at like I can do this thing with my tongue [laughter] relative to property management like what’s your strength?

 

Russ: Curb appeal. Curb appeal. I go the extra mile on if you go to 904 Main Street, there’s a wall in the front. I built a wall up the side. We put ornamental fences. I put all kinds of extensive landscaping in there. Do any of you know like you see those extensive gardens they have on the parking lot at The Sole Proprietor, has some tropical stuff and all kinds of color? That gardener, I said I want that at some of my properties. I don’t need it there but it’s a very visible place. It’s amongst four of my Victorians that kind of set the stage.

 

Rich: Is the whole neighborhood? I mean that’s right on Main Street. That’s very visible.

 

Russ: But here’s also what I did is I put the fence right through the wall, right through the center granite so that people could no longer sit on there. I tend to do that myself [laughter]. I put that there so they can no longer loiter on my property. One thing is curb appeal. When I do railings, I’ll take off the pressure treated and have custom wrought-iron railings made that look outstanding. A&G Welding on Lewis Street right across Sclamos, the best bargain in high-value improvement forever, permanent, not pressure treated, none of these other junk we put up. My first set of gorgeous railings went up on a building for $650 on both sides of the stairs and they are like an attribute that people notice.

[0:40:21]

 

Rich: No kidding.

 

Russ: Detail.

 

Rich: That’s cool.

 

Russ: Yeah. I mean it’s just the little things make the difference, and again I attract the kind of people that like that, that notice that, that appreciate that. That’s what I want.

 

Rich: Right.

 

Russ: I’m sort of dangling out the shiny objects on the outside to say, “This one is different.”

 

Rich: Sure, sure. What keeps you up at night other than reggae tone music blaring out of a ’95 Honda Civic with 22-inch spinners on it because you’re on Main South.

 

Russ: I’m not sleeping in Main South, so that’s not ‑

 

Rich: Well, I used to sleep in Main South and that was the basic soundtrack [laughter].

 

Russ: I know.

 

Rich: Yeah.

 

Russ: What keeps me up at night? Projects not going on time, contractors who are not getting it and forever messing things up, and I’m sort of – this is recurrent. I have many other issues that may have kept me up at night, but this one in particular is an aha moment for me. I said everyone else in my team is excellent. I finally weeded out the tough ones, the mediocre ones. The only way I get peace of mind is to have a consistent team where everyone has common sense, intelligence, and the need to be top notch. My contractor, I’ve finally met a good one, who’s doing a big job for me is a more expensive yes but there is zero babysitting on my part.

 

Rich: That’s awesome.

 

Russ: I don't have to go in.

 

Rich: I don’t believe you but it sounds awesome.

 

Russ: He’s probably 20 percent higher than I might have done myself. But I got to tell you something when I first go and do it and act as the GC, I’m a general contractor, the time, the aggravation and still the subpar results that if I don’t catch stuff, it doesn’t get done right and they either got to redo it or I have to live with it. It’s tough.

 

Rich: It makes [unintelligible 0:42:11].

 

Russ: That’s what keeps me up at night.

 

Rich: Yeah.

 

Russ: It’s realizing I have to keep telling a certain group of individuals this isn’t right and they log out at 4 o'clock. I’m sorry. The sun is still out.

 

Rich: Yeah.

 

Russ: It’s only Thursday. It’s the same people who [unintelligible 0:42:29] different lengths all week but when it comes to weekends, they say, “I can’t work on a weekend.” It’s the mentality of certain people that just drives me nuts.

 

Rich: Sure.

 

Russ: I like people – construction is a seasonable business and when you got to do it, you just got to get it done.

 

Rich: What advice would you have for others who might want to get to your level like how many units do I have to have before I’m as tanned and good-looking as you? [laughter] Seriously. That’s really the only thing I want to know.

 

Russ: [laughter] That throws off my answer. I don't know if anybody wants to have this as a fulltime occupation. I mean there are some that are here that this is their fulltime occupation.

 

Rich: Sure.

 

Russ: I don't know if it’s something necessarily you want to aspire to. I’ve been approached by a lot of people that say, “I want to drop the day job and have enough units that I can just sustain myself, create wealth, independence, etc., etc.”

It’s a lot harder than it looks and it requires a commitment on how you want your life to be. It’s not just about the pot of gold at the end of the rainbow. It’s what commitments are you willing to take or make to get there, and it just required a vision. I envision what my life would be like and it took me awhile to meet my wife and have children. I got married at 39. I don’t regret a thing because I have a wonderful family and I said, “Someday, when I have a family, I want to be in a position where I don't have to work. I don't have to business travel. I don't have to if I don’t want to….” because the wonderful thing about this business is it’s recurring income. You don't have to keep selling something to make money. Corporate jobs are not necessarily safe. People get laid off all the time.

 

Rich: Sure.

 

Russ: I’m coming from an entrepreneurial family, and my family owned their own business while I was growing up. That’s kind of the mindset I always had anyway. I don't think I was ever get-a-job kind of guy. But besides to think you have the right balance and if you do it right, depending on what you’re aspiring to, as far as level of lifestyle, how much you need to spend to stay happy, and that’s a whole another discussion.

You can set a target and say, I want to need this and no debt if I work it off in 10 years, I’m done. I’ll put my kids through college, so it doesn’t have to be 100 plus units. It can be 20. It can be 10.

 

Rich: That’s awesome.

 

Russ: Just well selected investments though.

 

Rich: Sure.

 

Russ: Yeah.

 

Rich: That’s inspirational. That really cool. I’d love to be able to do something like that myself. You had mentioned not being the type of person to get a job because of how you came up. I’ve met a lot of folks who are not interested in getting a job but they don’t necessarily build a real estate empire [laughter]. That’s cool that you decided to go that route.

[0:45:02]

 

Russ: Okay.

 

Rich: We have one other question left from the folks that submitted questions back in January.

 

Russ: Uh-huh.

 

Rich: That was, “If there were one law, ordinance, or something that MassLandlords should focus on, what should that be?”

 

Russ: Student occupancy limits, no more than three unrelated people in an apartment. I am fighting this. I am speaking to politicians. We’re going to try and bring it to the city council, but if it fails, then it fails for a couple of years. The argument is three people is okay, four is chaos. It’s unsafe. I’ve tested this theory. There are some of the major opponents of it changing like, well I won’t say, are very vocal about it on paper all the time. I’ve said to these very people, “Okay, four adult students in a 1,600-square foot four-bedroom, two-bathroom, which I have, I have them, I’ve shown them versus a family of eight. Should the lights go out because there’s a fire, which is more hazardous? So the public safety is kind of just a fallacy, but the city councilors tend to be afraid of it because some of their constituents believe it’s been the enforcement of that that’s kept the party house down.

I was once the subject of an ordinance letter from the police department saying, “You own an unruly house.” I just bought a party house near Becker ‑ Becker hockey players on the first floor, Becker football players on the second. There were more empty beer bottles and alcohol bottles than a redemption center. It was disgusting. The police visits were awful.

I said to city council, “Three people in each unit, not four, three. But what was the difference? Management.” I said, “Permissive landlord who just got the rent, looked the other way and allowed it. Occupancy has nothing to do this. It’s all management. The people that are barking about this have never owned rental properties, so they don’t really get it.”

But no landlords are going to stick their neck out and really talk about it because they’ll say, “I’ll have exposure here.” But the funny part is all the city heads of departments, even a lot of politicians get it: the laws are archaic because you might see the article in the New York Times, that was also reprinted in The Telegram that, “Worcester finally is a collegiate city and finally looks like it.”

I had a meeting with people. I said, “No, it doesn’t because it doesn’t support the businesses that support that community.” I said, “The downtown projects are nice but what about all the three-deckers that make up 60 percent of the housing in the city?” I said, “You have four and five bedrooms as they were built, not chopped into rooms into tiny little cubicles.” I said, “These are vacuous apartments.” They all wanted to see a change to support the people who do the right thing and isolate those that are landlords and packing in a ton of people.”

Boston did it and they have a method to how to do it safely, inspect it, make sure all the code is up to date, pay a fee, call it a day, and support it. But all the students would rather have more than a couple in there. It’s less expensive, more affordable.

That’s my pet peeve because I’ll tell you what’s happening as the economic downturn of this, people like myself who specialize in college housing are limiting how much they’re going to buy and not expose themselves to these high-occupancy properties or under rent. Have a four- or five-bedroom but only rent to three people, losing rent because they’re afraid of being cited.

What’s happening is when a dump comes up that has 4,500-square foot three-decker with seven rooms per floor, five bedrooms all day long without putting up the wall a piece of sheetrock, you don’t buy it because you’re like, “Well, I can’t make the numbers work at this asking price.”

But you have a Boston investor, an out-of-state investor that doesn’t care about this community, doesn’t care about rules, pays cash, rents to whoever the hell they want, and it’s not able to be purchased by someone who has a budget to renovate, again not just me, many. A lot of these properties are being snapped up by others, being forced up the Boston market, grabbing these things and so guys like me and others in the group that want to renovate these things were afraid of this rule because the numbers won’t work if you can only rent to three.

 

Rich: Because the city wants to address the problem but they didn’t address it in the right way?

 

Russ: Correct. Well, it’s an important point you said that. If we still have Michael O’Brien as the city manager, we would not be talking about this. He once asked me. He said, “Russ, take me around your properties. I want to see what you do because if we’re doing something wrong, the city wants to see how you do it.” I had him stand in my illegal lodging house basically four bedrooms, two full baths, 1,800 square feet. It had just been cited. No parties, no noise, but they were Chinese students basically accused of excessive cooking [laughter]. I said –

[0:50:02]

 

Rich: It might have been quite serious.

 

Russ: I said to Mike O’Brien, who stood in there, I said, “What’s the problem?”

He said, “I get it.” He said, “You’re right. What can the city do to encourage guys like you, women like you to make the city better?” He said, “Because the rules that was enforced had unintended consequences. We were going after some of the real bad ones and swept up everybody.” Now it only takes a finger point or a whistleblower to shut down a house, not that it was a nuisance.” It’s a big financial risk. It’s a big nuisance, and it’s not catering to the community but where would Worcester be without 10 colleges? It’s the lifeblood – and the hospitals – of the city. It really makes the city hum. It’s getting even better. This is a support business that’s being shuttered.

 

Rich: So it sounds like ‑

 

Russ: A little passionate about this topic.

 

Rich: Yeah. It sounds like what you’re saying the solution is to get everybody to lie and to say they’re all brothers [laughter].

 

Russ: Sometimes that’s easier than said. Yeah.

 

Rich: How do you prove that you’re all related. Okay, so in our last few minutes we are going to open up to – does anybody have questions for Russ? I see some hands going up. While I’m making my way to the back of the room, don’t forget to fill out your comment cards. We always have like 100 of them go out and like 16 of them come back, so we really appreciate the 16 people but your feedback does make a difference. Brian Lucier has a question.

 

Brian: First, thank you, Russ. Fantastic presentation. I have two questions: one is for me and one is for my wife who insists that I ask the question for her.

 

Russ: [unintelligible 0:51:47].

 

Brian: Sure, she’s shy [laughter]. Okay, so her question is, “How do you structure the purchase funding carrying costs in rehabs of your projects? Is this a cookie-cutter system you use or are you creatively flexible on a deal-to-deal basis?”

 

Russ: I’m not really sure what you mean by creatively flexible? What does that mean?

 

Brian: Do you have a cookie-cutter system that you look at it and always do it the same way or does it depend on the deal?

 

Russ: It does depend on the deals. Some properties – it also depends on what you pay for a property. If there is room in it to improve the value and at the end of the day does the final appraised value, what I bring to the bank eventually to get permanent financing, I strive to between acquisition, rehab, and whatever else I do, roll that finished value, equate to with 80 percent, takeout most of my money, the acquisition rehab and so forth, so that I basically recycle some of the money that I used.

Do I leave money in deals? Absolutely. But I’m saying if the numbers are too tight and I can’t see that it needs $200,000 and it will be underwater because I’ve improved it too much and I know the appraisal. I mean right now basic values are up there, so you have generous appraised values in many instances. But we all know when there have been markets where it’s hard to find comps that are of decent properties. Four years ago, it was all bank on junk that just needed to be ripped apart, so it wasn’t really a fair comparison to a finished rehabbed property, but that’s one of my things I look at and I say, “How much money do I have to leave in a deal and what’s the cash flow going to be? Is it worthwhile?”

Sometimes I pay a lot more for a property if the location is a premium, if I just bought properties next to Becker, and it’s literally a lot closer to that property than I am to you. it’s like half the distance right there. Location wise, you might want to pay a premium, but in most instances, I try and build in value and hopefully it sustains itself by the final value.

 

Brian: It sounds like it currently depends on where you are in the market.

 

Russ: Yes.

 

Brian: Yeah.

 

Russ: It helps. There are some I just did a 1031 exchange. I sold some properties, took some profit off the table, but I rolled the proceeds right into this acquisition where I paid a premium so it didn’t hurt as much. I had the proceeds from another and also the tax savings, which were huge. It kind of helped me justify paying a premium. I don't have to steal everything. Sometimes it’s just worthwhile. You got to just make the right location decisions.

 

Brian: I have a simple question for you. What’s the online rent service you currently use and how does it work?

 

Russ: It’s very simple. I have a website, for starters. On the website, there’s a button that says, “Pay your rent online.” We subscribe to a third-party service. We’ve interviewed a number of them. This one is called PayLease, one word I believe PayLease, and they just make it an easy process. When you define your properties, you link it to your bank account, and they charge you a monthly fee depending on the number of units you have. For me, it’s $120 a month and that’s what happened. That’s what you do.

[0:55:00]

It’s not like the tenants don't have to fill out forms and ACH authorizations. It’s sort of like PayPal. You just link it to either their credit card their account and they just do one-time log-in. Boom! They’ve got their password and they do either on a recurring basis or on an as-needed basis.

 

Female Audience: We need to know how many employees?

 

Brian: Okay, one more from the peanut gallery.

 

Russ: I saw that.

 

Brian: Yeah, you have I know you said 143 units and how many people are on fulltime payroll?

 

Russ: Fulltime? Only one, as a property manager; I have two other people that help with the management team that are on 30 hours a week, three days a week financial, payables, receivables, and the books. But this business obviously because of construction and repair, most of those people are subcontractors, 1099 that sort of thing, so I’m going to hold many of those, but that’s more out in the field.

 

Brian: Thank you very much. I’m going to relinquish the mike and it’s great to be an investor with a tan [laughter].

 

Russ: By the way, too, I’m just taking on a new employee for the first time, a fulltime salaried maintenance person. That’s how I’m finding the talent. I was always going at the $15 an hour guy or the $20 an hour guy that could give me 10 hours, but he has other clients, so he wasn’t getting to me and I’m just like, “He’s driving me nuts.” Or pulling my rehab guy on to do repairs; therefore, he’s leaving his job, leaving his crew. It wasn’t efficient. I finally said, “Enough! This is my aggravation and my weakness. I’m hiring a fulltime guy. That’s all he does.” If he’s not buys with repairs, we’ll put him on painting job or something or a rehab to keep him busy.

 

Male Audience: Russ, thanks. Just a couple of quick questions. On your multi-families, what do you typically do on the laundry facilities and also parlor heaters that you inherit?

 

Rich: Oh, boy!

 

Russ: Parlor heaters, gas-on-gas stoves, get rid of them. That means putting in a heating system. Again I find the tenants are willing to accept that archaic means of heat, they got to keep it 90 degrees in the living room and the kitchen, leave their bedroom doors open to sleep to get even heat. It just doesn’t work for me. I certainly wouldn’t be tolerated by my demographic or anyone. Even before I got into students, I just got rid of that junk because it’s hard to get reliable appliances when you get these old guys. You tend to fix it. It’s tedious. What was the other part of your question? Parlor heaters?

 

Male Audience: Laundry.

 

Russ: Laundry! That’s a perk that I try and give. It depends on how nasty the basement is. You have some that have low ceilings. You shouldn’t have asked your tenants to start going in there and get the webs and you know. Those are ones, which I put laundry in the unit, not coin operated. To me, they say, “Oh, my gosh! Your water bill must be crazy!” I don’t really know the answer to that. It may have gone crazy in some buildings. But I find that is the difference between a tenant taking my apartment over competitors – we’re all competitors in some respects ‑ or staying in that apartment, especially if you have multiple roommates lugging their laundry or rather staying in the Laundromat if it’s not convenient to that specific house. You got to do it. You got to provide it.

If I don't have coin-operated laundries, it’s in those buildings where I can’t sacrifice the space because the units are smaller and the basement again is not creepy. People are not going to use it if it’s dark and dreary, and otherwise you have spruce it up and I do that. it’s really a mix and it’s property by property different. It differentiates between the conditions.

 

Rich: Okay, we are almost out of time. Do we have any final questions for Russ? We’ve covered a lot of stuff. Let’s give Russ Haims a round of applause [applause].

 

[End 0:59:26]

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