Tiffany Mittal: The Secret Sauce to Growing Your Multifamily Portfolio

Welcome to the Business Credit and Financing Show. Each week we talk about the growth strategies that matter most to entrepreneurs. Listen in as we discuss the secrets to getting credit and money to start and grow your business, and enjoy as we talk with seasoned business owners, coaches, and industry leaders on a variety of topics from advertising and marketing to the nuts and bolts of running a highly successful business. And now, to introduce the host of our show, financial expert and award-winning author, Ty Crandall.

Hello, and thanks for joining us today. I'm super excited you could be here. Today, we're really going to be talking about the secret sauce to grow a multifamily portfolio. I mean, we are talking about some tech insights you more than likely have never heard before, that if you're thinking about getting into multifamily or already are, this could be something that takes you to a whole other level. And with us to have this conversation today is Tiffany Mittal. Now Tiffany is actually a multifamily real estate expert with over 13 years of experience in property management, ownership, and technology as well. She began her career as an owner-operator gaining hands-on experience that actually shaped her understanding of the industry's challenges and opportunities. Then back in 2020, Tiffany co-founded Utility Ranger, which is a tenant utility billing software designed to streamline operations and empower small to medium multifamily operations with a value-added tool that increases property value. Now partnering with 10 Incubator in 2021, boosted the company's visibility, and in 2023, she launched her later latest prop tech startup, further advancing innovations in the multifamily sector. So she's a lifelong leader and and also a learner. She earned a master's in global leadership from the University of San Diego, completed the Harvard Business School's General Management Program, and holds a certificate in real estate management. And she's now based in Stuart, Florida. She leads Utility Ranger alongside her husband while raising 4 children, inspiring the industry with her vision to transform property management through technology. Tiffany, you've done a lot of cool things. Welcome to the show.

Thank you so much.

So how are you enjoying Stuart, Florida? I'm glad you came over to the dark side here in Florida from California. How is it so far?

Well, it's definitely quite a bit different from San Diego. San Diego has some nice weather, but besides that, Actually, we love it. I was born and raised in California, in San Diego, so it was definitely a big change for me and my family, but I would say it's probably the best decision we ever made.

That's awesome. I'm glad you're enjoying it here. You've been in multifamily a long time, so what did you recognize was a problem that needed to be solved? And then what are you doing with Utility Ranger and then forward to be able to kind of solve that problem?

So I've been in multifamily— I kind of fell into it because my husband needed help with his apartments when I was in grad school, and I I really didn't like the apartment management side of it as much. It's just the operation side is really hard between bedbugs and maintenance issues and just the day-to-day. It wasn't something that was really my cup of tea. I was a little bit more interested in the financials and really how to optimize our properties. And that's when I noticed we had this big issue with utilities, especially being in California. We were kind of the bottom of the barrel when it comes to water. Our water costs were astronomical. Our tenants were super wasteful. We'd ask them all the time, like, hey, conserve, do everything you can to not use as much. And they didn't really listen at all. Our bills were ridiculous. And so it was actually, I think what really triggered me was one of our tenants actually called to say, I think my neighbor's leaving her shower on all the time. And we sent our onsite manager in there. Come to find out she was literally leaving her shower on when she'd go to work because her dog had anxiety and she didn't wanna upset the neighbors by her dog barking. So her dog would think she was home. And we were like, what? Is this so crazy? And so that was really what kind of got me looking into our utilities and our water issues and how to solve the problem. And so that's kind of the genesis of how Utility Ranger got started.

So what exactly does Utility Ranger— like, what is the solution?

So if you're in multifamily, there's this system called RUBS, or Ratio Utility Billing, which is basically a way to transition the Utility costs from landlord paid to tenant paid. It just makes tenants more accountable for their usage, things like that. And it also helps you kind of put that money back in your pocket as an owner. And so I called all these REBS companies. Nobody would take us cuz they all said we were too small. Unless you're really an institutional owner, a lot of these utility billing companies that help you do this won't work with you. And so that's when I decided, okay, how do I do this? I went to go work for these utility billing companies, tried to backdoor the system, learned everything I could learn about it. And that's when I actually discovered it's not just about the utility billing, it's really about forced appreciation. Taking your 3rd largest expense of utilities, having the tenants pay their fair share of it, and increasing your overall net operating income at the property increases your property value. So we saw this massive increase in property value. We saw a million-dollar increase on one property. Which we were able to cash out refi and use that money to buy another property. And that's when really the light bulb went off. It's like, whoa, this isn't about the utilities as much. This is really this forced appreciation play to grow our portfolio. And then I said, well, how do I take this service model and turn it into a software model so people like us could have access to it? Because the small guys don't have access to this type of technology for multifamily owners.

So then how does the software kind of help solve that problem?

It basically, you stick in your utility bills, it does all the backend calculations for you and sends bills to your tenants, and then your tenants pay those bills. And so it basically takes this big cost on your books each month and you get reimbursed back that money from your tenants each month. So it's a fairly simple model, but it's really about getting that money back in your pocket so then you can use that money to grow your portfolio.

Is that pretty common with multifamily? Is with multifamily, is it usually common for the tenant to pay the utilities, or does that only happen with bigger complexes where they can get somebody like the Rubbs to actually solve that problem?

Well, twofold. So it depends on the utility. So most of the time with electric, there was a law passed in the '70s that anybody who's building new apartments has a direct connection to the utility company, but they never did it for water. Because it's just how it's distributed from the local utility company that they're going to only really just come to the street. And water never used to be that expensive, and that's really changed a lot in the last 15, 20 years. And so that expense now you can't continue to absorb as a landlord. And so there's really, unless you're an institutional player, a lot of the big billing companies won't service you. So there wasn't really a lot of options for these mom-and-pop owners like us at the time we did this. We had about 65 units in San Diego, and unless we had 1,000 units, none of the billing companies would talk to us. And so that's when I said, how do people like, when we saw a million-dollar valuation increase on a 36-unit building, like, what does that look like across our portfolio? What if you have 500 units? What does that look like across your portfolio if no one's helping you?

Sure.

And so that's where you're like, how do I kind of give this same offering to other people like me? Because we saw such a big benefit out of it.

Yeah, and I can relate to that. I mean, where I live, we have chilled water, right? And chilled water is like power, is what keeps things cool. So like, it was shocking to me because my electric bill is like nothing and my water bill is outrageous because it's the water that actually is your AC in Florida, as you now can completely relate. It's not the electric. And I think that's becoming more and more common, although I do live in the middle of downtown. So that being said, is it— is Utility Ranger, is it just— is it water that you're primarily dealing with, or can it work with other utilities as well?

It can work with any utility and it can, it can even work with other fees. Let's say you have parking fees. It's really kind of an NOI hacking tool, right? So for every dollar that you actually bill back to your tenant adds about $20 of property value on your property. So it's, think about it like how different industries are affected by commoditization, right? Remember a few years ago it used to be what amenities are included in your apartment? That was the big driver. And that's really not like that anymore. Now it's really price Because it becomes so commoditized. It's like, I don't really care what the amenities are. Like, what's the price? Let's say I have a $2,000 apartment and I'm including utilities, and then my neighbor has a $2,000 apartment and he's not including utilities. For me to really be level, I probably have to charge $2,100, right? If I'm including utilities. But how much traffic am I going to get to my unit versus what my neighbor's going to get to their unit if they're showing an advertised price of $2,000? So you need the traffic. So really, like you look at airline industries, what do they do? They unbundled their baggage fees, right? Like hotels, they've unbundled their resort fees to make that sticker price as low as possible because things have become so commoditized. So think about it as like unbundling your rent, right? You're renting the airspace and everything else is extra. So here's your rent, but you may have to pay a parking fee. You may have to pay an amenity fee. You may have to pay your utilities. All of these things do cost money, but if you bundle them all on the sticker price, you're going to get a lot less traffic coming to your door. And so things have just become commoditized. So you kind of mirror what other industries are doing. So that's really what we're doing is we're unbundling the rent and you can add as many flat charges on there. If you have internet, there's a lot of people doing bundled or managed Wi-Fi where you get Wi-Fi for your building and then you give out Wi-Fi codes to your tenants. And you can get that at a cheaper rate than tenants going to get Wi-Fi themselves or laundry or whatever. You could add all those individually along with the utility. So it gives you ability to unbundle as many items as you want to on the bill while giving your tenants a consistent, here's your bill with all the charges on one comprehensive bill each month.

And that was my other question. So with Utility Ranger, then what, what it will allow me to do is put in parking, put in electric, put in water, and then it will send them one itemized bill for all of those things versus like separate bills for all those things. Correct. So why is it such an impact? Like $1 that you're charging them is worth $20 in property value. Like, what is it that creates that much of an impact, that 21 ratio?

Well, what's crazy is if you think about how commercial properties are valued or multifamily properties are valued, it's your net operating income, your NOI, divided by your cap rate. So you have this kind of compound effect. So every dollar, I mean, that's a direct impact to your NOI, right? Because you were paying that expense before and now you're not paying it or you're getting reimbursed from it. So it's a direct impact to your net operating income. If that amount goes up, divide that by your cap rate, that has a massive impact on the value of your property. And so it's just how properties are valued. So it's about how much can you increase your NOI? So if you can increase your NOI by $10 a month by adding managed wifi, by adding parking fees or $50 a month for water and sewer or trash or pest control, these kinds of things have already been done, especially in Class A real estate. They've been doing this game for a long time, right? It's just now finally trickling down to the mom-and-pop owners, but we never had really a platform to do this on. So it's not, it's not necessarily new. It's just finally now trickling down into the mom-and-pop owner who can now do this themselves rather than relying on a company to do it for them.

Sure. I'm interested, what does it do with consumption? Did you look at like one of your complexes before when you tackled the bill versus when they pay the bill? Like, how much did that really impact the consumption?

You'd be surprised. It's not just the consumption, it's kind of across the board. So You typically will see about a 15% to 20% change in your overall consumption, but that's not just consumption. So typically what you'll see is you'll definitely see probably about a 10% impact from consumption, just people being more conscientious about their use. They're like, oh, I'm going to turn off the sink while brushing my teeth, or maybe wait till I have a full dishwasher before I do a load, or wait till I have a full thing of laundry before I do a load of laundry. That's one piece of it. But the other piece of it is really accountability. So let's say I have a running toilet. I might just shut the door as a tenant because I don't want my landlord to come in my unit. And maybe I have a pet that I haven't had authorized, or I have extra tenants I haven't had authorized. I found grow houses in my closets that tenants have in there that they don't want you to see. I've seen almost everything. So they don't want you in your unit. And so all of a sudden when they get a bill in the mail for $40 or $50, they're like, oh, my toilet's running, or Oh, my faucet's leaking. And now you don't have this like secondary damage thing. If you have a leaky faucet, when that tenant moves out, you may have to rip the entire cabinet out to replace it rather than them telling you that you have a leak, going in there, fixing the problem, and not having that secondary damage caused. So you have water savings just from tenant accountability, water conservation just from acknowledgement of, okay, I'm getting a bill, I'm going to start using less water. So overall, those 2 combined, you typically see almost a 20% savings at the property level. So It's really a win-win-win. You get the conservation, you get the accountability, you get your money back really for the water that you're not using. You can take a portion, let's say if you have landscaping, you could take a portion out for landscaping or a portion out that you'll pay for if you have a pool, you take some of that common area usage out. And so everyone's just kind of paying their fair share. And that has a massive impact though to your NOI.

When you do that, do you put it on the same bill as the rent? Like, is it all due in one payment?

So some people, it depends on the sensitivity of your tenant. So every tenant demographic is different, right? So if you have a more sensitive or more price-conscious tenant demographic, maybe you have the utility bill due mid-month and then the rent due on the 1st. You can break it up to whatever cycle that you want it on. If your tenants are less sensitive to price, then you might have it all due at one time. It's really flexible, so you can really do whatever makes sense for your tenant base.

Is there a lot of multifamily owners out there that are still paying the utility? So they all are rolling it into price one way or the other. It's still being paid. They're either rolling it into price, they are. But if you're rolling it into price, I wonder, you probably would underestimate and then end up paying more money out of pocket that way than if you're doing it the way you're describing.

You would be surprised how many people are still footing the bill for this. I mean, sure, process of transitioning our portfolio from San Diego to Florida right now. And so we're constantly looking at new buildings. We bought a few buildings already this year, and I was surprised, like, even on the broker's pro forma, they're not even putting rubs or like a utility billing on their pro forma to show how much more improvement you can get, which is surprising to me because that seems like a simple answer.

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But they're not even putting it that way. So if you're not— everyone thinks, oh, I'm at market rate, right? And maybe I'm charging $2,000 a month, and I'm just using that number as a Easy number, but I'm at market rate and they're really doing price surveys. You'd literally have to be almost $100 more than market for you to be at market rate plus covering your utilities. So most people aren't going to be doing that. So they're going to be at market rate, which means you're eating that cost of the utilities, which is just kind of silly to do so because 80% of the big buildings are already doing it. So you're not really in line. A lot of the smaller guys aren't doing it because there hasn't been an option for them to do it yet, or no one will service them. So sometimes they'll do like flat fees or something to recover it. They'll say, oh, $25 for a 1-bedroom or $45 for a 2-bedroom. But that's really not covering the cost of it because, and it's really not doing what you're trying to do. Like you're trying to slightly modify the behavior of your tenant, right? You're using kind of this price elasticity model to slightly modify the behavior of your tenant. But when you give them a flat fee because you want to recover something rather than nothing, you actually reverse that incentive. Because now if I'm a tenant, I'm like, it doesn't matter how much water I use or whatever, I'm going to use as much as I want and it's never going to be more than $25, right? So in my mind, I'm going to say, well, I'm going to darn well get my money's worth and I'm going to probably use a lot more than I was before because I feel like I'm paying for water, even though I'm probably not covering the cost of my actual cost of water. So— Sure. It's, it kind of is the wrong incentive as far as wanting to get that cost recovered.

Yeah, I would act that way. Like every bit. Like if I could just have this place as cool as I want and not have to pay an extra bill for it, I'd be living like that.

You'd be like, I live at 68.

Yeah, yeah, I would be. I'd probably be at 68. It's exactly right.

You'd be taking longer showers.

Way longer showers.

Yeah.

Talking my language here. 68, long showers, not have to pay for it. Yeah, absolutely.

Also the hot water energy, right? Think of like if you have a big central boiler, if you don't have your own individual hot water heater, you're not only costing the community the cost of the water, but the cost of the central boiler. So those costs continue to go up. And so the flat fees actually disincentivize, you know, the purpose of utility billing, which is the conservation aspect, the accountability aspect, and recovering that money.

So what's the feedback from your clients? I'm interested, like when somebody comes in and they say, well, that sounds interesting and they do it, like what is the feedback, the testimonials? Like what do you hear from your clients in regard, in response to their response to the results?

I think everyone's always a little bit nervous if you haven't done it before. Everyone's nervous about how their tenants are going to react. Everyone thinks like, I'm going to get a flurry of move-outs. Even my husband, when we first implemented on our first property, he was like, I'm afraid I'm going to get a flurry of move-outs. And instead, we got a flurry of maintenance requests, which is kind of common because no one wants to tell you to come in their unit until all of a sudden they get a bill and then they want that bill to be lower. And then you get the maintenance request. So that's typical. I see that again with my clients as well. But I think most people are a little bit nervous, but then as it goes through within the first 2 months, they might have 1 or 2 people ask a question about it, but then it really stops at that. Hasn't really gone out to be the problem that they were anticipating it to be. And my clients have been super happy. We have almost zero attrition unless somebody sells a property. And my clients feel like they're now utility billing experts when they thought before it was too complicated. I always like to use the term of utility billing is about as sexy as doing your own taxes. Like nobody wants to do your own taxes. Like it's too complicated. I'm sure I'm going to mess it up. But then TurboTax came along and you realized, oh, the same numbers I'm giving my accountant, he's just like putting it in this software. Like I could just take that same number and put it into TurboTax. Maybe not if you're a real estate investor, but the average person with a W-2 could just stick that same number in TurboTax and And get done pretty quickly. And so we really took that same approach of it seems really complicated, but really it's not that complicated. We simplified it and made it so easy that anyone can do it.

Does Utility Ranger integrate with other softwares or does it even need to regarding to how people normally bill their tenants?

We do integrate with other softwares. So we are right in the process of finalizing our AppFolio integration, and then we're doing a bunch of other software integrations later this year. So That will be coming out later here in 2025.

Are there different sizes of multifamily that benefit more or less from what you have?

I would say it doesn't really matter. That's what software makes everything a lot easier. So if you're a service provider, it doesn't make sense to service the small guy. We have clients with duplexes, we have clients with quads, we have clients with 5,000 units. Really doesn't matter is because you essentially become your own utility billing provider. Because you're doing it yourself, typically somebody on your accounting team, but it's so simple that you just stick in your utility bill, click calculate, review 'em, and send 'em. It's really like 3-click, send your bills.

And if you look at like your packages, like Cadet versus Commander, for example, like what, what's the difference between the options or packages like that that are available?

It's just kind of how advanced you wanna bill. If you're just billing one utility, you can use our Cadet model, which is just one utility. You can pass through that fee. So our fee is basically a $2 or $3 per unit per month fee, and that's passed through to the tenant. So essentially it becomes free for our users because everything is a pass-through as an admin fee to your tenant. But the Commander one, the $3 option, you can actually increase that admin fee. So most of the billing companies out there, they're charging $6, $7 a month. They're charging you to bill your tenants. So there's no reason if you're doing it yourself that you can't bill $6 or $7 and actually make that additional money.

Sure.

Make the delta as additional income because you are the one doing the work. So why Why can't I make an extra $4 or $5 per unit per month as part of that pass-through?

So, if we go back, what you're saying is if I have a multifamily now, I'm not— I'm a flat rate and I'm not charging per utilities. Like, how hard is that to transition then? And you said, I think your husband had that same concern where he's like, we could lose tenants. How hard is that to transition from that kind of model? Because I can see if you just do it from the beginning, like if I do it from the beginning, I tell everybody upfront, That's probably the easiest path. But if I have a 100-unit complex and they're used to me doing it one way, like how difficult is that transition to be able to convert and then tell my tenants what's going on and explain it?

It's actually not that hard. So we kind of help our clients along the process, and this is kind of done pretty similarly throughout the industry. You want to give all your tenants a 30-day notice. You can't necessarily change them within their lease if they're in a lease agreement, but let's say you have somebody with A month to month so that you can change them in 30 days and you have somebody whose lease is expiring in 10 months. Well, you can change them the day after their lease expires. So you send out a 30-day bulk notice to everybody. Some people say it's okay in 30 days and some people's notices say the day after your lease expires, which is whatever date in the future. But you send that out with like an introductory letter. So you don't just blast them with a 30-day notice, but you say, hey, we're implementing this new program. We're all doing our part to conserve. So very conservation-heavy language in the intro. Letter, just kind of introducing them to the program. And then as those leases expire, our system is set up to kind of capture those at the same time. So you put in everybody's lease expiration date and it automatically makes them billable as soon as they're, the day after hits within the billing window. So you don't have to think about it and everything will just kind of roll on one by one as those leases expire. So it can take a few months to kind of get the whole property up and rolling. But you'll have the language in the new leases, you'll have it rolling over on the old leases, and once everyone's rolled over, it's pretty simple.

You provide the languaging, the letters of notification, all that stuff to make it easy.

Yeah.

Any other features that Utility Ranger provides that we maybe haven't dove into that you think are interesting that, that could also provide benefit?

Actually, we're just launching next week, we're launching our text billing. So Tenants can decide if they wanna get their invoices via text. We're actually, actually the beginning of next year, we're gonna be launching our new AI automation. So we're gonna have a bunch of AI automations built within the platform, not only to help our users with kind of how to respond to residents if they have questions with resident-facing responses, but also helping you kind of automate the entire process for you. So we also have property managers who use it. So let's say you're a property manager and maybe you're managing 800 units, 1,000 units. You can actually use this as an add-on service. So how do you differentiate yourself as a property management company when there's so many property management companies? Well, most property management companies want to outsource everything, so they might outsource to one of the billing companies for this and outsource to this. So they want to streamline their operations. But I have a lot of property managers who use this to say, well, we're going to differentiate ourselves. And rather than having them sign up with this other company that maybe they're charging $6 per unit, We're going to charge $6 per unit. We're going to do this in-house. So they have one person to go to rather than another third party that can kind of make things messy between everybody. And then they're making the delta between the $3 and $6. So they actually see it as an additional service offering. Like the one client I have that has the 5,000 units, they're seeing about $15,000 a month in additional service fees that they're bringing into the property management company. Just by offering this as an additional service. So there's a couple different ways that you can use the platform, whether you're using it for yourselves, your duplex, or using it as a service offering to your property owners as a property management company. So we've really made it flexible for a variety of users.

I love that. Where did you come up— I think your branding is so cool and the name is so cool. How'd you come up with that?

I actually had a great branding company in San Diego. We started it right in 2020 during, right before COVID we'd started, but COVID had just hit when they were presenting our branding and they had come up. We had Billable and we had Utility Ranger and they were showing us and everyone was home at that point. So we had kids and everybody, we're all deciding as a family which one to go to. And the Billable guy was really cool and it looked fun, but then the guy kind of looked like my accountant. I'm like, who do you want to hang out with? Do you want to hang out with the ranger or do you want to hang out with your accountant? And I said, I would much rather hang out with the ranger because utility billing is, it's kind of like taxes. It's a very dry industry. It's been around for quite a while now, but no one's really had fun with it. And so I thought if we're going to really switch it up and kind of be the first SaaS module of this, I wanted to have fun with it because you got to have somebody kind of show you the ropes and I'd rather hang out with the ranger.

Yeah, that's super cool. I love the whole family was involved.

Okay.

So if I'm, if I'm getting into multifamily, I'm already in multifamily. multifamily, this obviously is a no-brainer, it seems like to me. What are the next steps to be able to get started, to be able to talk to your team, to be able to learn more?

Well, one of the things that we offer, and I think because I am a multifamily owner and operator, I always have my operator hat on. The other billing companies out there, very few of them own any properties, and so I don't think that they think things through the same way. So they always have all these fees and they have all these long-term contracts that are terrible to get out of. So we actually offer a free 60-day trial. They can get 2 billing periods under their belt before they even have to pay our fees. They can still charge the fees to the tenants and make that as additional income. So we have free 60-day trials. We have no long-term contracts. All they have to do, they don't even have to wait for a proposal. They just have to go to the website, which is utilityranger.com, and sign up for a free account. And they won't get charged for 60 days and then we'll get them onboarded and make sure everything's set up the way they need to have it set up. And then we train them for the next couple of months to get them through their first few billing cycles to make sure they're comfortable using the software. We don't wanna just like let them go on their own without making sure that it's set up the way it should be set up. So they can just go to our website, sign up, no long-term contracts. If they decide they don't like it, they can just close their account at any time. They're not stuck with us and it's fairly simple.

I love it. Tiffany, thank you so much for coming on with us today.

Oh, absolutely. Thanks for having me.

Yeah, and there you have it, everyone. I mean, the secret sauce to growing your multifamily portfolio is no longer secret. It's Utility Ranger, and you should definitely check them out at utilityranger.com. Everything you need there, from pricing, more information about the products, everything is right there. They have a blog as well. And then if you go to the bottom right of their page, you can even find their social media channels. But, and right in the middle, you can see the 60-day free trial. So it's super easy to locate, super easy to be able to get started with them. And the pricing she's talking about, which is at the bottom of the page, You just can't beat it because the cost is like $2 versus $3 and you're passing that on to your tenants. So ultimately, it's kind of like a free way to be able to make your property worth a lot more money while saving you more money. I mean, you just, you just can't beat that. And they give you the support and the training. They're giving you the templates, everything you need to actually execute as well. So check out utilityranger.com. Thanks for tuning in. Take care. Have a great day.

You've been listening to the Business Credit and Financing Show with your host, Ty Crandall. Watch for our next episode to get even more insight on financing and growing your business. And don't forget to check us out online at creditsuite.com for even more business growth strategies.