#18: Real Estate Investing 101 - What to look for in a multifamily investment (w/ Emeline Fox of Elmington Property Management)

I do not trust an apartment community that is at 100% occupied because there's always room for improvement. And I say that jokingly. I've had a property that's 100% occupied and it's the easiest property I have, right? Because I can just kind of be like, well, everything else is good for now, but I would not like to see a property at 100% if I was going to invest in it personally because that means that when I hide those rents that I have little to no wiggle room.

On this episode of Heading west, we have Emmaline Fox from Elmington Property Management. Steve We've had the pleasure of working with Emmaline for a while now, and she's a rock star. She's been on a couple of our properties in the past and it was such a blast to have her on the podcast today because we're doing a new series where we're, let's call it Real Estate One on One Real Estate Investing, One on One where we're breaking down what passive real estate investors need to look for in a good syndication partner the property, how to set up the llc, all the really the basics. And Emmeline tackles one of the first and most important topics, which is how do you find a good property? What should you be looking for? And she did not disappoint. She really hit the nail on the head with this one.

Emeline did a great job in describing what it means to find a property if you're going to want to be a passive investor. But the neat thing about Emmaline as a property, as a regional for a property management company, she sees all these different properties, she lives them. And one of Emeline's core strengths is she knows how to communicate with the owners of the property, how to communicate with the property manager, and she really gets in and makes that apartment and that property come to life. And it's been a joy working with her as an owner.

If you're thinking about getting into real estate passively and you want to learn how to even get started, this is a great place to start. We're going to break down over this next 20, 30 minutes of what you should look for in your first apartment complex. Stay tuned as we discuss what to look for in your first multifamily property with our guest, Emmaline Fox. This episode is brought to you by Skyline Point Capital. If you're anything like me, you're always considering where to invest your money. Stocks, bonds, crypto and rental home. The list is literally endless as we've all seen over the past year. The stock market is unstable, the housing market is just weird, and inflation is on the rise. In times like these, the clear place to invest my money is in multifamily real estate, AKA apartment complexes. Here's why. Returns on real estate investments have little to no correlation with the stock market. There's lower volatility, stable income streams, and the tax benefits are insane. And let's not forget that the apartments will typically appreciate in value over time, which means you can walk away with a pretty nice return when the complex is sold in three to five years. Best of all, multifamily investing is passive, so you get all the benefits without the hassle and headache of your typical rental home investment. Getting started has never been easier. Head to skylinepointcapital.com to learn how you can start investing today. Well, Emma Line, we're so excited to have you on the show. Thanks for joining us today.

Thank you for having me.

Yeah. Well, I know you've watched a few episodes, so, you know, we typically are interviewing people about their, their stories that they head west through life and through business. As we really take a different approach to heading west, we're really going to really talk about how people can get started investing in real estate. And so over the next few weeks, we're going to be breaking down really high level of what you should look for in a good property, what you should look for in a good syndication partner. All the things, the nuts and bolts. We're kind of calling it Real Estate Investing 101. And you're our inaugural guest and so you're essentially our guinea pig. So I'm sorry in advance for being our guinea pig today, but we're so excited to have you because you've got such a great background in property management. And so today's topic we're gonna be looking into is what to look for in a good property as a passive investor, somebody who, who wants to invest in real estate, but I really don't want to buy anything. Like, I don't want another house. I don't want to buy myself a new job. I'd rather do some passive investing. What should I be looking for when investing with a syndicator like Skyline Point Capital in an apartment complex? And so we want to pick your brain today on all the things that you think about and you see with what a good property actually looks like. So does that sound good?

Absolutely perfect.

All right, this is a question for both you. I'm going to act as the person who knows the least, which Is true. Between the three of us, I know the least. And so I'm going to act as if I'm the passive investor. But this is a question for both of you. Are all properties the same? Is there sort of like a ranking system? And I'm asking that knowing half part of the part of the answer. You know, there's A, there's B, there's C, there's this thing called core, core plus value add. Can you kind of walk us through what are the difference in property? Let's call them rankings or tiers.

Yeah. So we have A, B and C is the most common terminology that you'll hear. I like to give the example of the Marriott company. They have different levels of their hotels. They have the Ritz Carlton, which is their A class, which is the top of the top is your dream vacation. You had your B class, which is just your basic Marriott. Very nice, very clean, very comfortable, but doesn't have the thrills of a Ritz Carlton. And then you have the residence innovation. It's simple, it's still nice, but there's no thrills there. And it is for a faster pace or lower, you know, income, maybe lower spend than you need there. So that's how I see A B and C. There, there's these, there's F. Those are your hotel, Motel 6, things like that. But we really want to focus on A, B and C because there are many, many changes that you can make to make that C class a B class fast and that B class A class. So. And depending on who's running it, that B class can become a C class fast. So that's how I organize them in my brain and you'll hear a lot faster.

Gotcha. Okay. So they can move between B and C or B to A. So there's some upward or downward mobility there.

Emmaline, when somebody wants to go from a C class to a B class, what does that usually entail? What it from a property management side and from a renovation side. What's that way to move up to the Ritz.

Yes. So moving from a C class to a B class, in my opinion is a lot easier than moving from a B class to an A class. It's still doable. But that B class to A class jump is very expensive. It's putting more into the details of things versus just the value add points. So with a C class to a B class, that is going to be going into every apartment, home and renovating it top to bottom. Flooring, counters, cabinets, paint, all of the things A New appliances, all the things that are going to bring that apartment to life and up to today's standards. You start to see apartments go into those lower class as they age because their feel or their aesthetic is falling behind the curve. But you also want to see the amenities up to par. Today, amenities are so competitive that you have to bring in something that makes it to the next level. So putting in a nice pool, if there's not a pool. A lot of these older communities don't have pools. A fitness center, taking maybe some old space that wasn't used as a communal space and turning that into something that is more of a luxury. That is what's needed to kind of elevate the property that you currently have into the next class.

I've even seen on some of our properties where you just take a green space and put a fence around it and call it a dog park.

Yes.

Yeah.

Yeah. I am from the millennial group and our pets are our babies. And you know, that is something that people look for in apartments if you're not pet friendly or if you don't have the amenities to serve their pets. That's just like not having kid friendly options as well for those parents that want that. So my generation, my group are really heavy in those pet strong amenities.

What is your group look for an apartment complex because whether it's A, B or C. And then we'll get into location because you could have a C location, a C property in a. A very up and coming location, and in a not a very up and coming location. And even though they're Cs, but they're totally, could be totally two different outcomes. Is that right, Emma? Line?

Yeah, absolutely. Absolutely. Location matters, but I guess it doesn't matter as much as the demographic of serving. So what my. And I hate to even claim that I'm a millennial. I don't.

We get a bad rap.

Yeah, we get a bad rap. And so I think, you know, my generation's a little different because we are a part of the influencer phase. Right. We're at the beginning of that whole movement. So everybody wants to see something that's aesthetically pleasing, something that they want to show off, that they want to post about. And, you know, that is a really great advertising tool for, you know, syndicators and. And property managers, is advertising in social media. But I feel like it's not necessarily function anymore. It's flare. You have to have the function for the flare to matter. But something that I feel like the older resident might care about is not as exciting as something that the newer younger resident might care about.

That makes sense. You almost have to tailor it to both. Right? Like you got to have that function and flare so you get the function for maybe the older generations and then the flare for again millennial, Gen Y, Gen, Gen X, Gen Z, whatever other gens are out there these days. That makes sense. So then how then does core or Core plus so a passive investor is, is getting presented an opportunity to invest. Now we understand ABC and where we might want to invest and I'm sure there's some monetary or some even risk that's assigned to each. A, B and C. Where does core and Core plus and value add and anything else like that play into these A, B and C properties?

There's a couple of terms that are thrown around in the real estate environment and one is called core or Core plus. And core investments are usually the less risky type. They have stable returns. Typically involves a newer property in a, in the better or best locations. Core plus investments involve good, not great properties with a chance to increase the return by increasing the income in the growth of the apartment and doing, doing those upgradings, upgrades that are necessary to make it a much better property. And Emmaline, from the ones that you guys with, with Elmin and the properties, how many, what do you guys find in the core and Core plus properties that you manage? You find more of that or more of the value add side of it?

We have a good mix being that we are Nashville based apartment community property management company. We are across 13 states currently. But our home base is in Nashville and our largest market is in Nashville and Nashville is one of the largest growing, you know, cities in the country right now. And so we are getting more core Core plus business. But we have had more of a mix in the past. So we also have, you know, partnerships with local developers where we bring them on, we lease them up and then they sell them and then that is just another opportunity for us to obtain management or retain management. But we really truly have a good mix. I think we would like to be more in the core Core plus market. That is what we thrive in and that's what we enjoy is lease ups and these high end class days. But we also really appreciate our value adds and our other partners because they allow us for new opportunities as well.

So Emmeline, when, when an investor like Sky Point Capital buys a property, we bring in someone like you Ellington to manage the property and make sure that, you know, the business plan that we put into place is actually executed upon that Rents are being collected and increased value of the property is being increased. So you're usually coming in, not always, but usually coming in when a property has been turned over from, you know, from one investment group to the other. So you oftentimes are getting to come in after the sale's done. What are some of the things that you first notice when you're, let's say, assigned to a new property or you or Elmington is brought in to take it over? Are there some things that right away you're looking for or noticing about whether this is a great investment or this was a great purchase, great investment, great property? Like what are those things that you're looking for?

Sure, yeah. So there's two parts of it. When you do like a due diligence, there's three or four people that have got the files and they're auditing those files and that's a part. And then there's people that are walking in the community and noticing all the things that need to happen on the site. And that's the part. And so I. There's again, there's two parts of saying when I walk on a community, there's things that I absolutely noticed the first time. I would like to blind shop a property before I'm ever introduced. I'd like to go there and act like I am ready to rent an apartment and see how they are treating me. I like to walk in the door knowing that nobody knows that I'm coming because that's the true feeling of an apartment shop. I want to know how the grounds look. I want to know how the club room smells. I'm huge, huge, huge on smells. Our, you know, our top memory trigger sensor is our smell. And so if you smell a good smell, it's going to bring things more alive into you. And then also I want to know how I'm being greeted. I want to know, yes, the teens there and the team normally likes to stay with the apartment community that they're at. They know their residents, they know their community well, but sometimes they're not the best fit and this is a good time to move them along and to find somebody else. And so I love a blind shop that, that would be the first thing that I would recommend. Now they know I tell them at the end, hey, I'm Emline with Elmin Property Management. I was a regional, things like that. And they either shock up and realize, oh, darn, what have I said? Or they're like, great, it's nice to meet you. You know, I figured something was Going on. We get that a lot. And so that would be, that would be my first suggestion. But really putting yourself in the shoes of the resident of the prospect, what's your senses tell you? Is there trash on the ground? Can you not find anybody when you walk into the maintenance room, all those things show you how well kept that property is. I can guarantee you that there's not a well kept property with trash all over the ground whose files look perfect.

Yeah.

Or I can't tell you who. You know that the vice versa. I can't tell you that it's pristine. That means their files are going to be pristine. But most of the time a manager that has a higher standard for their on site and grounds are also going to have that standard for their file keeping.

Yep.

Emmeline, you talk so much about what the upkeep is and in looking at properties, I was in, in one of our properties yesterday and there were, there were cans in the parking lot, smashed pop cans and etc. And so you quickly, you see that as one of the owners you pick it up and put it in the trash can. But you can go to a lot of properties where you will see things all over the place, like nobody's been walking outside the apartments to click, pick up paper or trash and etc. And that falls back to the property management company. Is that correct?

Yes, yes and no. I mean as a regional, I cannot be at a property every day. I cannot make sure that that can is being picked up every day. But it is my responsibility to hire and train people who are looking for those things and passing down their expectations to their team. One thing, property management. I would say the hardest thing in property management right now is finding people for our team. Well trained, well communicative, well presenting people. And it's just not a industry that has a lot of stock and backstock and people wanting to become in property management. And so that is something that is harder these days than it ever has been. But yes, it is our job, it is our job to make sure that we are managing that property.

Well. Yeah, I'd say.

I was gonna say it's so important. And it's like whether you're a manufacturing service or any business, the people on your team make the difference. And if you can find that right key person that feels like an owner and is part of the owner and part of the team building, that's really some secret sauce and magic when you find that person and, and, and it's ingrained to them to they're walking the Property. Picking things up and making sure that property looks pristine. Boy, when you find that person, that's a. That's a gold mine. If you can find that person. And Emmeline, you've. You guys have found some of those people, so well done.

Yeah, well, thank you. But it does take trial and error. I mean, you have a property in Nashville. We hired somebody for. It wasn't the right fit. They still work with Armington, but that's just something that we had to assess. Is this the right person for the right property? The answer was no. And we got somebody in and we were able to, you know, increase so much of that property. So much has happened and that change. And so it is sometimes trial and error, and we. I just ask for patience and. Because as much as I would like to say that somebody looks good on their resume and they interview well and they have good experience, that does not always translate over to that certain property. So. But you're right. The team is everything. The team, the regional and the partnership that they have with the owners is absolutely critical.

Yeah, I think a part of it comes back to. Yeah, it's the. It's the property manager's responsibility at the end of the day. But I think there's a good. That's a good sort of test for these passive investors is, well, if there's trash on the ground, that's either pointing to the property manager pointing, but it's also sort of pointing to the. The tenants that live there. Do they. Do they like this place enough? Do they appreciate it enough to. When they're walking by, like Steve said, you pick up trash that you see whether or not you. The one who dropped it there. And. And I think for passive investors. So I think this is a great takeaway that you're talking about. Emmeline, is if you're thinking about investing in a property and it's local, go walk through it. That's a great way to test if this is something you should be investing in. And, you know, do like the Undercover boss like Emma line is talking about, or walk through and act like you rent there. And it's a really good. Gives you really good idea of what to expect and what other tenants you're expecting. But let's say you're renting a place in Nashville where Emma lines at, and you live in Omaha, where we are. Well, go to Google Maps. Go to Google Maps, do the street views. A lot of times they'll drive into, you know, buy or into that property, and you can see how does the landscaping look, how does the trash look? What type of cars are parked there? I mean, you can learn a lot just from those, those aerial views and those street views. And then look at the reviews. The reviews will tell you a lot about do tenants really love where they live? Is the owners very respondent to issues they have with their property? And so there's a lot of things you can do as a passive investor to kind of vet out if this is a good property to invest in.

And pick up the phone, pick up the phone and call them and ask them for an apartment. That's another thing. If you're not available to go, but just are they answering the phone? If you put in the online request, are they calling you back and not saying that if they don't, that you shouldn't invest in that property? But that also gives you a added item to an item to add to your changes list. Right. So, okay. I really love this property. The numbers look great. It's in a great spot. But they don't answer when I call. And you know, the reviews aren't applied to. That might just be a management issue. That's not a property issue. And yes, they are one in the same. But that doesn't mean that those things count you out. I would just say that you need to be prepared to make a management change if you decide that that's a property that you wanted to be involved in.

When we're talking. Jake, you were talking about the passive investors when they look at a property. One of the things we do at Skyline Point Capital is we highly encourage our investors to go visit the property. A lot of our investors from Omaha fly to Nashville for the weekend. We want them to go visit the property because they're, they're an owner. They're, they're the owner of that. And we want them to feel part of the team and, and they really appreciate that.

Yeah.

From that side, Similan, you talked about.

The things that you look for. So when you're coming on a property for the first time, you're obviously looking at curb appeal, you're looking at landscaping, you're engaging with the on site manager, you're looking at the tenant. I mean, there's a lot of things that you're looking for. Conversely, what are some things that most passive investors don't consider that they probably should when they're looking or evaluating a property if they should invest in it?

I know that we consider it, but I think that something that really needs to be dived deep into is the demographic of who currently lives There and compare that to who would you like to live there? It is okay to want to change your demographic. That's an okay want for your property. And a lot of times that's can help you push from that B C class to B class. But we also need to make sure that our leasing expiration exposure and things like that align with our goals. So if you have 60% of your property is seniors, most seniors are on a fixed income. So it doesn't matter if you go in and you upgrade all the amenities and you change their countertop, things like that, their fixed income is not increasing just because you did that. And so you have to understand that, okay, that's fine. But when it comes time for renewal and you increase them due to your improvement, you're going to lose more than the national average of renewal rate. And national average used to be around 40%. It's increased where most 60% of people move out. And that's because we've really been in a concession driven market and people want that next sale, they want the next deal. And but if you have people who cannot afford, no matter if you add value to their home or not, they're at the end of their paycheck, which 60% of Americans live paycheck to paycheck, then it doesn't matter. And so not that you can't get somebody in that's going to pay, that you absolutely can, but you just have to understand that your performer and your lease expirations, all those goals have to align with who you currently have. So pay more attention to who your demographic is, who are they paid by, you know, how much are they getting paid? You can do the calculation really fast. We require three times the rent for income. So if you see that somebody is getting paid, you know, $30,000 a year, why are they living there? They're obviously not going to be able to do any more past that. Right? So demographic is super, super important because it sets you up with putting your expectations and your goals in line with what's coming to the future. Because the worst thing is putting in all this money and then having a mass exodus because nobody can afford it. There's got to be this balance there. And that's something that people have to really pay attention to is yes, you want to get your return investment, you want hike up those rents because you put in so much money. But who do you have now and how much is it going to cost you to get the right person in there?

Emma Line when you're looking at where the rents need to go. Or the amenities. How do you compare your properties with the competition that's down the street? Do you call them up on the phone? Do you do secret shopping? How do you make sure that you're. You're very competitive? You have a very competitive property with all the other choices someone has in the. In your area?

I love a secret shop. Again, I love calling them and seeing what I'm getting. If I'm calling, you know, ABC Apartments on 123 street, and I get, hello, how can I help you? But then I call my property and I get, hi, how can I help you? There's a big change already there. But I also want to see what they're advertising. What. How are they showing up online? I want to know what they show, how they're showing up in person, and what can I do to be one step ahead of that? If that's replacing patio furniture, you know, just to give it a fresher look, is that replacing the team? Is that adding a wow fridge inside the model to people can get refreshments? As you're looking at something as that model, what is the next step? What are they doing? And putting that as your baseline and always achieving the next step. That that's to beat your competition. And sometimes that's price, sometimes that details and sometimes that people. It's kind of a, you know, a balance of all those things.

You know, Emily, I'm listening to you say all these, the different characteristics you have to be thinking about and what it takes to run a property. And I keep telling people and syndicators and people that want to get involved with syndicators and general partners that you're basically running a business. When you buy an apartment complex, you are running a business. And some people get really excited about, oh, I bought the property, and that's great, now I'll go on to buy the next one. But you can make or break a property by the way you operate it. And it's. There's so many moving factors, and it's critical to be teaming up with syndicators that are running and think and have run businesses before, and not just in the acquisition phase. That's all the fun. As they say in golf, you drive for show and putt for dough. Operating an apartment complex efficiently, that's the putting for dough.

Yeah.

Acquiring it is like driving it is great. It's. I see so many guys that love to acquire, but don't. That don't want to operate it.

And in my experience, I, you know, I was a regional at Elmington I just transitioned out of that position. But in my regional position, I had six different properties with four different ownership groups. So I've had a wide range. And I can tell you that the way that you and the other team members have operated that property is the reason that you are successful in those properties. I had other properties that were not boots on the ground, hadn't come to the property in three years. And then when we send them bills for things, they're like, why does this need to be done? And you're like, well, come on, come take a look. I'll, I'll be happy to show your around. You know, there, there are, there's importance in putting your hands in it. It's okay to be passive and not want to be a part of the weekly calls and, you know, getting all of the minute by minute updates. There's levels to that for sure. But just understanding that you are more successful the more you relate to the property, the more that you know what's going on is, is truly an asset to yourself and creating, you know, wealth and knowledge on yourself, but also giving your team and your, your property managers the option to lean on you a little bit. I learned so much from you all because you're so involved, but I would have not had those opportunities and I did not have those opportunities with other ownerships because they were so hands off. So that matters.

It is crucial from our perspective that the property management company, the property manager are an extension of our company and we want to empower them to make decisions and help them when things may go awry from that place. But it's a team, it is a team effort. Everybody's involved. And when you find a high performing team and you get one put together, it works really well, right?

And we're all people too. So if I know that I'm going to make a decision that's going to positively or negatively impact Steve Navity, because I enjoy Steve Navity where I enjoy Jake, I am going to make those best decisions because of who it affects. But if there's just a name on the door or name at the bottom of your financials every month that you don't know, it becomes a little bit more hands off and it becomes a little bit more sterile. And putting your face with a name or face as a number is super, super important too for just the personality of your apartment community, I think that.

Really touches in too on, you know, we're gonna have a future episode on, on how to choose the right syndication partner. So we'll go on a deep dive on that. But thankfully for the passive investor, they don't need to do the groundwork and the research for is this the right tenant mix? Who's the who who should be in here? That's the syndicator's job. Your job as the investor though, as a past investor is to ask that question. What's the type of person that currently lives here and what's your guys business plan or what do you, what kind of tenant do you want in there and how do you plan to get there? And so for those listening, that's, that's. You should be thinking about asking these types of questions to your syndicator. I want to come back and like we're running short on time, but I want to come back to a question or something you touched on which is occupancy rate. You know, if you're, if you're, if your current tenant base is an older demographic and they have a fixed income and you're trying to raise rents, you're going to lose quite a bit of them pretty quickly. So the question for you is, is there an ideal occupancy rate for an investment? As a past investor, if I want to invest in something, should I look for something that's 100% occupied because I know that people want to stay there, that shows that's a good, you know, good property or do I want something a little less like 90% where it shows, hey, there's, as an investor there's opportunity here to grow this thing and to, and to increase my, the revenue. Where do you stand on that?

I do not trust an apartment community that is 100% occupied because there is always room, room for improvement. And I say that jokingly. I've had a property that's 100% occupied and it's the easiest property I have, right? Because I can just kind of be like, well, everything else is good for now. But I would not like to see a property at 100% if I was going to invest in it personally because that means that when I hide those rents that I have little to no wiggle room. And also if you are at 100% occupied, you should be pushing your rent more aggressively than you are normally. And so there should always be room for occupancy growth, always without whether it's your renewals or your new leases. I don't like to see somebody sitting at 100% for longer than 30 days. But I would love if I could pick my perfect number. I would put you at depending on the unit count, obviously, but I put you at like 93 and a half. Right. Healthy. That strong. NOI but that gives you that 7ish percent to make those changes to the, to the vacant unit. Right. You can take those vacant units, upgrade those and then have those ready and those can be at a greater price. See how that works? Right? You're already getting that vacancy loss so you're not getting any more vacancy loss. See how that works. And if it doesn't work well, then you don't move on for the next seven. And so kind of, I like having play there. It's all about an experiment, trial and error. If you had 100%, you're kind of making jump decisions before you even know what the property actually wants.

That's so good. All right, I got one last question, Steve, and I'll let you jump into if you got any more. But okay, so let's. I'm going to put my passive investor hat on again. I want, I have cash, I want to invest and I'm probably going to be searching out numerous properties and so it's going to take a, it could take a lot of time if I really wanted to, if I want just to do a quick sniff test on a property where a syndicator like Skyland Point Capital is saying, hey, here's our opportunity, let us know if you want to invest and I want to do a quick once over on their property. What are some of the non negotiables, whether it's, whether it's amenities or location, whatever you suggest. What are some of the non negotiables that if you see this, you should run as an investor to kind of help them do like a quick once over on a property.

Jake, One of the acronyms we use at Skyline Point Capital is called the real Deal and D deal stands for debt executives asset location. And what that means is that with any property you've got to have your debt right? You could have a great property and the debt's wrong, whether it's a bridge or fixed. But the debt has got to be right. And this is what I said earlier about the E. When you buy an apartment complex or a commercial property, you are running a business and your team or executives, you must think like an executive, think like an owner and the team has to be absolutely aligned to make this property work. A stands for asset. You've got to make sure you have the right asset white asset class that you're looking for and what you're really good at. If you're not good at doing A heavy lift. Don't buy a heavy lift asset. Look at the strengths of your team, your strengths of your skillset and buy the right asset where you can be really, really successful. And L stands for location. And what I mean by that is that the. You have to find a property that's in the right location with the right demographics that can pay the rent for the plan you have for that property. And you have. Location is so, so, so important. I don't mean just in a sub market, but you could do you have a property in a great sub market but the demographics around it don't support that property. It's going to be a heavy, it's going to be a tough time. So think about what we tell our passive investors and what we do at Skyline Point Capital is we pick the right deal and that's the debt, that's the executives, that's the asset and the location. D, E, A, L. That's good.

Yeah, I mean he hit the nail right on the head. But I also like to include crime. Crime, crime, crime, crime, crime. Crime is such a big deterrent for me. Interior crime is fixable. You can evict people and you can get them out. But if, like you saying, if your location, if your sub market, your neighborhood around is influencing the crime inside of your community, that is so, so hard, not impossible, but close to it to overcome that without time and resources and making sure that your local police department is involved or if they can be involved, things like that. So crime was my biggest one on the asset side about what the property actually looks like. Two things that are super hard as well is mold issues, moisture issues. You probably have really kicked off residents and they, those can be lawsuits. Right? Mold can be lawsuits. The other thing is pet pests. Normally pest issues are normally because of cleanliness issues, not always, but a lot of the time. And so if your residents are bringing in cleanliness issues, they don't value the property. And those are. Even if you get somebody else in, those are so, so hard to overcome and going to be an uphill climb. So those are things that you have to again evaluate. Is it worth it? Crime mold test are my three probably hold off. Yeah, yeah, that's good.

And you have to see if you're going to be a passive investor and think about the criteria that you want to be as an investor and what type of properties from the A down, all the way down to the C's and Emmaline. You're absolutely right. I've seen properties where there's been one major crime happen in that property and it gets tainted. And even if they fix it, people don't want to live there because they think it's going to happen to them. And it makes it really tough.

Yeah, absolutely.

Well, Emma Line, thank you so much for joining us today on this brand new podcast series. And if you're a passive investor and you're thinking about investing in multifamily real estate, go to skylinepointcapital.com we have tons of assets there. For you to learn more. And stay tuned for this year, Serious, because we're going to have a handful more of podcast episodes with experts like Emmaline who can help you learn about real estate investing. But, Emmeline, again, thank you so much for joining us.

Thank you so much for having me. Yeah. Thank you for having me.