How to Force Multifamily Appreciation Fast Without Major Renovations | Tiffany Mittal on Utility Billing

It wasn't until we went to go get that property refinanced that that property gave, or I think we did our loan through Fannie Mae. They valued the property at $1 million more just for that $36,000 increase of our net operating income.

Yeah.

So we were able to cash out refi $500,000 and use that money to buy another property. And I was like, whoa, light bulb. This wasn't just about utility billing.

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Hello everyone. Welcome to the Real Estate Pros Podcast. I'm your host, Micah Johnson, and today I'm joined by Tiffany, who's been making some serious moves in real estate investing now since 2008. Tiffany, welcome in. Glad to have you.

Thank you.

Absolutely. I'm excited for our talk today. Now, you were on with us, uh, not a little bit here in the recent past, and you were telling us about a product that you use, but now you're in a really unique time of life where the tool you created is helping you do the things that you've always wanted to do anyways. So not only do we get to talk about what it does, but I love hearing stories about how founders themselves use it and create the life they want. So let's dig in there. For our folks that aren't familiar with you yet, tell us some more about yourself and what your main focus is right now.

Oh, great. My name's Tiffany Mittal. I have been in real estate investing, like you mentioned, since 2008. With my husband. And, you know, probably in 2020, I pivoted to starting a software company that launched in 2023, which is really my main focus now, Utility Ranger. But we're still actively investing in multifamily and now transitioning our portfolio from California to Florida, which we actually get to utilize kind of our tool as our kind of buying acquisition strategy. So it's quite fun, but I've, been really kind of focused on growing my software company and continuing to grow our real estate portfolio.

Love that. One thing I love about real estate is it's a huge umbrella and most often the longer you stay in it, you just find yourself more and more in it, which is what I meet so many folks like yourself that got started and then you develop that tool and then you find that passion. Like, do we all love real estate investing? Yes. But it's all these little things that plug into it that make it like, Fulfilling. It gives you that finance, not just the financial paycheck, that emotional paycheck. I talk about it a lot. Real estate is incredible for that because it's so big. You can grow. It's not like you have to leave your industry to keep growing.

Totally. I actually know quite a few people who've pivoted and have like adjacent opportunities along with real estate. So it's, I think it's really common. You kind of try to solve your own problems and you end up being able to make a business out of it.

Exactly. And you, you're, it's not a mystery what we're doing. People have been doing what we're doing for a long time. So when you solve that problem for yourself at that level, you know what you're doing in real estate. That's how you realize you had the problem to begin with and then created something that we're all entrepreneurs. The chances of it being another business are pretty high because you're not the, we're not the only ones doing this.

Yeah.

And when we build a piece for the machine that trades in real estate, It's no wonder other professionals hop along because it's kind of a tight-knit group, quote unquote, at the top. There's not many people that do what we do at the highest levels. We've both been in some of the same groups together where you just kind of see the same sort of folks and then we all help each other out.

Yeah, for sure.

Now tell us a little bit about that transition. So you got into real estate 2008, buying and investing yourself, and then you said In a pre-call about 2011, PropTech is starting to come into your world, and then 2020, it's becoming a passion. Take us through that. What led there?

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It's really just kind of out of a need for solving your own problems. I think a lot of real estate people are problem solvers by nature, and it's, you know, we were having a problem with our utilities. Our portfolio was in San Diego at the time, and our water bills were crazy. I can remember the moment that we actually decided to do something about our water bills after we tried and pleaded with our tenants to conserve. And it was the day that one of the neighbors at the property called and said, hey, you know, my neighbor leaves her water on all day. And I said, there's no way. We sent an onsite manager in to go check it out. And it turns out she would leave her shower on all day while she was at work because her dog had anxiety and she wanted her dog to think she was home. So she would leave her water on. And so her dog thought she was in the shower all day. And that's when we were finally like, oh my God, there's nothing that we're going to do to change this behavior. Like, this is so crazy. So that's when I'd heard of this thing called RUBS or ratio utility billing. And it was a way to transition your landlord-paid utilities like water, sewer, trash to your residents and without a bunch of submeters or installation or hardware. And residents all had to pay their fair share based on the size of their unit and how many people were in their unit. So more people paid, more people in the unit paid a little bit more. The bigger units paid a little bit more than the smaller units. And I couldn't get anyone to help us. They all told me that our unit count was under 1,000 units at the time. I think we were around 65 units at the time. And they said, I'm sorry, you're too small. No one would help me. And so that's when I said, hey, how do I really solve this problem? So I decided to go work for one of these utility billing service companies, learn everything there was to learn on the backend. So not only could I bring it to our own portfolio, but my husband came from a family office as well. So I could help bring it to their portfolio as well and figure out, okay, what is going on here and how can we implement this on our properties? Which is what we did. We saw huge gains. We saw, you know, we learned way more than we thought we would. And then that ended up kind of pivoting into a passion to again, solve a problem within that industry. And I kind of said, how do I take the service company and the archaic processes and the issues that those service companies had and turn it into a software company?

Oh, I love that. And I, I couldn't agree more. Problem solving is in the real estate person's nature. Like it is. I, I say this a lot. If you love to learn, get in real estate cuz it doesn't stop. You never stop learning. Every day something new's gonna happen. You gotta keep up with things like the river is in motion. You just gotta learn how to swim with it, y'all. And it, it, it does, it, it just feeds that if you love to do that. Now, what was, What was something that surprised you most in when you went and joined? Just because I love the fact that you joined a company, you went and learned. It's something I encourage people to do. You don't, you can literally leverage your time for money and knowledge if you know what to do and, and, and are building it correctly and thinking. So you did that. What was some of those aha moments that hit you like, oh my God, we can do this?

You know, it's actually really funny. A lot of people think it's about utilities, right? Like, I wanna get my money back for my utilities. It's my third largest expense. How do I just recover this cost? And that's what we thought going into it. And I think my husband said, oh my gosh, I don't want to be the first one to implement this. I don't want all my tenants to leave. They're going to move out if I send them a water bill. And so that didn't happen. And I think that's a fear that most people have. And yes, we did recover our expenses. So that was a huge plus. The kind of secret behind it that we figured out along the way had nothing to do with the actual utility billing and the tenants and all of that, everything worked out as we had hoped for. We got about $36,000 back in utility income on our first 36-unit property. We did it. So about $1,000 a unit per year, or about $80 a month per unit. It wasn't until we went to go get that property refinanced that that property gave, or I think we did our loan through Fannie Mae. They valued the property at $1 million more Just for that $36,000 increase of our net operating income. Yeah. So we were able to cash out refi $500,000 and use that money to buy another property. And I was like, whoa, light bulb. This wasn't just about utility billing.

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And tenant accountability and all the conservation, all these things. It was really about forced appreciation. We were able to force the appreciation because of the net operating income. You know, that's how multifamily properties are valued is the net operating income divided by a cap rate. And so, you know, that has this kind of cap rate multiplier effect that I really didn't understand at the time and didn't realize that that $36,000, albeit somewhat small of an amount, I mean, not totally small, but a smaller amount.

Right.

Was going to Created a million-dollar increase of valuation. I mean, so this became now a mechanism to grow our portfolio, you know, similar to people who look at like the BRRRR strategy, right? You buy, you renovate, you rent, you refinance.

Right.

You repeat the process to try and use that same money over and over again. But sometimes you don't have a bunch of capital to dump into your properties to raise the rents. And so we really did nothing except for change our utilities from landlord-paid to tenant-paid. And we increased our property value by $1 million. It was bananas. So we rolled it out across our portfolio. We rolled it across my husband's family's portfolio and we saw astronomical gains. And so now this is what really led me to say that, and I worked, and this was probably the biggest, not surprise, but I kind of got to see the other side of it. These utility billing companies, they don't want to service the small mom-and-pop landlords like us.

Right.

They're really built and designed for the institutional capital, the institutional property management companies. You know, unless you have 10,000 units, 50,000 units, you're like a tier 3 customer service level. Like they don't really want to deal with you because you don't, it's too much time value money for how many people that they have working at that operations. And so really the small guys like us get left holding the bag. Like, hey, what are we supposed to do? So how do we have that same advantage that the big guys have had for 40 years? How do we grow as fast as the big guys have been doing for 40 years? And so no one was really addressing this market. My sister had a dozen units. She saw what we were doing. She's like, oh, help me do this for my properties. And I had to tell her the same thing. Like, we can't technically do it at my company. You're too small. But let me kind of create this Excel calculator. And I created an Excel calculator with a mail merge kind of format. I gave it to her and her husband. They started doing it. And I said, oh my gosh, there's so many people just like this. And so I started giving it to my, all my friends who had multifamily properties and everyone started using it. So I said, how do I take this and turn this kind of fancy Excel calculator into a software company? And that's how Utility Ranger was born.

Man, that's awesome. That's awesome because it did something you weren't even thinking about, right? And it's so, that's so often the case, especially when You're dealing in a world like multifamily where it's numbers, it's a math problem. That's how it all works. You gotta solve the math problem. And not many things are a force multiplier like that. Like that doesn't, that you don't hear that story often. And then that next piece, the majority of investors are mom-and-pop investors. They're not these huge things.

Mm-hmm.

And so now you're in a market where Really, the sky's the limit, honestly, because like you're saying, if you can't get into this other until you got thousands of units, then that person that's just struggling at home, like your sister, your friends, you just sitting there thinking, okay, how do I do this? One, for just my own sanity. So this lady ain't freaking taking a day-long shower for her dog. I love my dog. I care a lot about my dog's anxiety. I would not leave the shower on all day. That, that would not be the solution I think I would go with. But it kind of goes back in our conversation earlier about why real estate entrepreneurs create these vertical integrations basically into their business of, well, there was this problem and I needed it. And then when I did it, you even fulfilled the Gary Vee thing. You got to give it away before you can charge somebody for it. Like if you can't give it away, they're not paying for it. So you got that and then boom, now you're rolling out Utility Ranger and it's It went fully live in 2023, correct?

Correct.

Nice. So 3 years in, and now you're getting to use this as a buying strategy for transitioning your own portfolio. So let's dig into that story. Y'all are moving from California to Florida. What triggered that and how have you been leveraging this along the way?

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Learn more about investing You know, I think a lot of people post-COVID really took a chance to reanalyze their life to say, you know, is this where I want to be? Is this what I want to be doing? You know, my husband and I, we lived in Southern California in San Diego. I grew up there. My husband grew up in LA. Like we always been in California. But I think post-COVID, you know, we are homeschooling our kids. We just, we weren't happy with how the lockdowns happened. And we kind of looked around and said, these aren't our people anymore. And, you know, we thought at some point we'd retire in Florida. We love Florida. We'd been vacationing there for 20 years, but we'd never like considered living there during our active adult, you know, still working lifestyle.

Yeah.

But I think again, post-COVID, we looked at ourselves and said, why are we waiting for retirement to be happy? I want to be happy now. And so we were so disrupted. You know, I had just left my, I was working in fintech at the time as well, while still doing real estate investing with my husband. I'd left my fintech job and I felt like I wasn't providing any value that I was when I was in utility billing, because I was helping small owners all the time like me actually create massive value within their portfolio. And fintech, I just didn't care about so much. And so I, I left that job to start Utility Ranger. My husband had started to move away from his family business to focus on our own portfolio, and my kids were outta school. So I said, there's never gonna be a time that you've hit this somewhat of an inflection point in your life where everything is so disrupted that it doesn't matter if you take the X-axis or the Y-axis, that you, if you're gonna do it, you need to do it now.

Yeah.

And so we said, let's move to Florida. And so, You obviously can't manage your real estate portfolio in California from Florida. And it's really hard to be a landlord in California. They've made it so difficult, so many regulations, statewide rent control, you know, all these regulations on evictions. I mean, it's the writing's on the wall. It's going to get nothing but more and more difficult in California to be a landlord.

Right.

So we said, let's move our portfolio out to Florida where, you know, we can have it be an hour from our house. We had just moved from owner-operated to third-party management in California while we were gone, because you can't manage from there. And so we maintained third-party management because out in Florida, because it's given us kind of more time to focus on the growth of our business in other areas rather than being sucked into the day-to-day weeds of the property management side. And it gave us now a chance. I mean, how often do you get to reposition a portfolio?

Right.

Very few times in your life if you want it to be where you live. And so we have actually used this as part of our buying acquisition strategy. We're only buying properties that aren't billing for utilities to instantly not only implement, we're buying value add. So we're adding a little bit of value, but not a ton. We're doing 1031 exchanges, but buying properties that aren't billing to instantly implement a utility billing program, maybe with a little bit of rehab, drive up the values, be able to cash out, refinance, use that money, buy more properties. We've already done it on a property we bought here in 2023. We already did a cash-out refi and bought another property with that. And we bought 5 properties last year. We're actively in a 1031 exchange right now, swapping from a 36-unit property to a 60-unit property here. You get so much more for your money, so much more gains. I think Florida has in the future, there's so many people moving here. The kind of workforce housing is really exploding here because of how many people are living here full-time in Florida, right? Compared to how it used to be pre-COVID. I really think that it's like that, you know, moment in time that really changes those macroeconomic factors and what used to be is no longer anymore. And so being able to recognize those and take advantage of those opportunities has been quite fun since we've been out here.

I love that. I'm a lifelong Floridian, one of the few born and raised here. So welcome. You got a few more years, we'll I'll call you local. You're getting there. You're getting there. But it is, it's a, it's an interesting state to be in. There's, it's like 3 different states in one, in my opinion. I'm from the, I was born in Tampa, but I've lived in Northern Florida my whole life. So there's like the northern, the middle, and the southern section. And it's such a cool flavor. I enjoy being here.

Right.

And the fact that dialing back into the real estate part, knowing that you can go into a property and create Literally value against like bottom line with just the focus of they're not doing this one thing. Multifamily, I've heard people not having the success that you're having for the past couple years, like buying 5 properties in a year. I didn't hear many people doing that for 2025. Is that that big of a lever for y'all, for you to find these kind of properties and be able to switch 'em like your own version of the BRRRR for them.

Yeah, it's actually, it's surprising how many people are not doing utility billing out here in Florida. And I think for a long time, and I think it's also when you come from a state that's a really large state, has a lot of, the cost of utilities is astronomical. So everyone's doing it in California and the utilities, especially water, probably used to be a lot less expensive, but They over the time, over time, they just continue to increase. You know, part of our plan, timing isn't always in your favor. Definitely interest rates are not in our favor right now, but hopefully they'll be going down later this year. But our big thing was we need to get our properties out of California, right? So we were very motivated to get our properties out of California, and then we have to redeploy that capital in that short 1031 time window.

True.

So it wasn't like we had much of a choice. We knew we wanted to get our properties out of California because I kind of think like at some point no one's going to, I don't really think it's investible anymore. So I don't, it's going to be difficult to sell properties there at some point. So we were in a rush to get 'em out.

Right.

So we had to deploy capital out here somewhat in a quick manner. We've spent a lot of time since we got here really getting to know the market players, getting to know the brokers, getting good deal flow. A lot of our deals we bought off-market seller Just because we have great relationships with a lot of the brokers out here that we're sourcing good deals. So I think that's a big one is getting yourself into the market, into all the players and figuring out who your team is, right? Like you have to like rebuild a team because real estate's a team sport. So if you can get your team in order, you can find good deals for sure.

Love that. Real estate is a team sport and it's hyper nuanced to the local market. Like that, you nailed it. Like if you're going to go do what you're talking about, could you do it without being there? But yes, but it's going to take massive amounts of time, massive amounts of different ways of building relationships because the kind of deals, especially when you get into those multifamilies, commercial deals, will you find them online? Yeah. But the best ones don't trade online. No one ever knew they were for sale. That's the best ones. And you only find those by plugging into the market. Like y'all had it for life in California and then you pulled the roots up and go. Not many folks talk about that part of like, it's not that you lost your friends, you can call them, but your day-to-day life just changed drastically.

Mm-hmm.

Like who you're going to dinner with tomorrow night's different. Like you can't just run up the road. Like literally it all shifts and how important it is to plug in. That's one thing I love to push on this show because it's that important. It's a team sport. You're— nobody is good at all parts of the real estate problem. Because it's that big. You just won't like most of the parts. That's why you find other people that, that's the part that they like and you really layer around those strengths.

Yeah. We were really intentional when we first moved here about really making sure that we were going to every multifamily event that was a local event, really trying to understand which brokerages are out here, understand who to talk to. So I think you have to kind of really spend the time to To dig into the local market like you had mentioned before.

Right.

And be really intentional about who you're spending time with. Luckily, you don't have any friends when you move out to a new place where you don't know anybody. So a lot of these brokers actually become your friends as well. I talk to them quite often and your team players actually, they become friends as well. We went out to dinner the other night with our real estate attorney. That is something that's so interesting in Florida that's so different from California. There's no, I use the term escrow company out here and they're like, what are you talking about? There's no such thing as an escrow company in Cali or in Florida. In California, there's this like third-party, neutral third-party that, you know, holds the money, handles all the document transition. You know, out here everybody has their real estate attorney and your real estate attorney talks to their real estate attorney and there is no escrow company, which was so different than what we were used to. And one of those kind of unexpected learning curves we had to learn about.

For sure. Yeah. Our deals, it don't take much. I mean, it takes the fewest amount of people probably in Florida to get a deal done compared to other places. Because a lot of that stuff isn't there. You get things done in the same place. Tiffany, these are the kind of conversations I can have for hours because I just love hearing stories. I like meeting people. I like folks seeing that One, it's a lifelong career. It's continued problem solving. It's not a set it and forget it thing. And real estate really rewards the people that actively problem solve, that keep that engagement, that keep the relationships built, right? It's important to go out and eat with your real estate attorney if they're your friend like that. Those things keep the world turning for us. So I really appreciate you sharing that story. For those that are listening in and watching that are interested in learning more about you, following along, learning more about Utility Ranger, What's the best way for them to find you?

Um, they can either go to my website, utilityranger.com, or you can find me on all the social media. Probably Instagram is the one I use the most, um, for Utility Ranger or Tiffany, uh, Mittal.

Excellent. Well, thanks for sharing that. If you're view— uh, listening or watching, check our show notes. We'll have all of Tiffany's links there. Again, thanks for being here, Tiffany. I appreciate your time, your story, your perspective. I, I think we need more folks out there doing it like you're doing it. Which is intentional, solving problems, actually creating that life you want. Action's that key. So thank you so much. For those listening in and watching, thanks for being with us today. If you got value outta today's episode, please like this episode, share it with someone else you think you get value out of it. And if you don't subscribe to our podcast yet, click that button. We appreciate every single one of you that follows along with us on here. We've got more conversations coming up with operators just like Tiffany. out there building a real business in the industry. Thanks for being with us. We'll see you on the next episode.

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