Re.ceiv.er.ship (noun): the process of appointment by a Court of Receivership to take custody of the operations, rents, and profits of a property pending a final disbursement for the benefit of creditors.
Over the past three years, Borror Properties has operated 15 Receivership properties for Gryphon Asset Management. In every case, there was a tenant base to manage and serve, a facility in need of attention, and more often than not, a staff that required guidance and nurturing.
Week 1: We blitz the project with an experienced team from all areas of our company – from leasing to maintenance to construction to accounting.
First tasks include:
- Assessing and realigning the staff needs, and then announcing the ground rules with which we (and they) will operate: respect, honesty, and shared information.
- We begin to locate and analyze all relevant data – bank accounts, budgets, rent rolls, leases, tenant information, receivables, vendor lists, available units, payroll records, code violation correspondence, etc. (In most cases, very little, if any, information and operating funding is provided from the previous manager.)
- Every unoccupied unit is inspected by a team and an initial assessment of condition is conducted.
- All furnishings, equipment, office supplies, and tools are inventoried.
- Key vendors are contacted to share the news that there is a new management company, and switch over accounts – utilities, cable, phones, trash, pest control, laundry equipment, and others.
- Tenants are given a friendly notice 24-hour notice that units will be inspected.
Week 2: Business as usual. This week’s goal is to set a tone of positive change and “business as usual” for the tenants and the staff.
- Occupied units are entered and documented.
- Immediate safety and security concerns are noted.
- The leasing office gets a low-budget makeover and a deep cleaning.
- Weeding, mowing, and sweeping commence.
- Leasing forms are updated.
- Computer system training begins.
- A turn schedule is put into place, as are rules for how we conduct business and what a market ready unit will look like.
- Marketing materials and a media plan are established.
- Safety issues are addressed.
- Pest control begins in earnest.
This is just the beginning. In the coming weeks, we will continue sharing our method of successfully converting these failing projects into successful, rented communities.