By D. Michael Trainotti

Over years, I have had the experience of converting corporations (either S Corps or Corps) to a limited liability company (LLC).  The reasons are to achieve better asset protection from outside creditors and have less ongoing documentation (avoiding corporate minutes) but not to be considered to have liquidated for income tax purposes.

I have also converted general and limited partnerships to LLCs.  Conversion is a formless matter under California law that does not impact your business operations or how you hold your assets, if you still want to be tax as you currently are.

Some of my clients decided during the formation of a new business venture to be taxed as an S Corporation in order to take care of favorable tax treatment, but want from an operational standpoint to be an LLC compared to operating as a corporation as mentioned above.  Generally, LLCs are taxed as partnerships and more often than not that is the preferable choice, especially if you own real estate.
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By Raider Painting & Coating

If a routine inspection of the facility shows disturbing signs of water intrusion, facility managers must take the necessary steps to mitigate the problem.  Water damage can weaken the structural integrity of the building, threaten the health and safety of building occupants, and expose the facility to the risk of building code violations.

Signs of Waterproofing Problems

Commercial building waterproofing contractors can accurately detect waterproofing system failures through a comprehensive inspection.  But facility managers will be able to spot waterproofing problems through these visible signs:

1.  Wet basement walls and floors.  A sign of continuous moisture seepage coming from above or below ground.

2.  Molds and fungi growth.  Microorganism colonies in certain areas of the building mean a source of moisture is feeding their growth.

3.  Rot.  Wooden or concrete materials are decaying, a sign that the presence of moisture is changing the room temperature and humidity.

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By Craig Sunada, Esq

It is common for a tenant to leave personal property in the premises after vacating.  Depending on the facts of the situation, the landlord must follow one of three procedures in order to avoid potential liability to the former tenant or owner of the property.  This article will provide a brief overview of California law governing disposition of such property.

In all situations, the landlord must act reasonably. This means that the landlord should store the property safely until its final disposition.  At all times, the landlord must also act based on his or her “reasonable belief”.  “Reasonable belief” is as the actual knowledge or belief that a prudent person would have, given the facts then known by that person.  Generally, the landlord need not make an investigation to determine the owner of abandoned property unless he or she has specific information indicating that such investigation would “more probably than not reveal pertinent information” and the cost of the investigation is reasonable in light of the value of the property.  Also, “self-help” should be avoided, meaning that the landlord should not take or convert the property without following the applicable procedure.

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By Mike Corbera

Welcome

Greetings Readers!  This is the first article of an ongoing series on technology and how it impacts your property management business.   The goal of this recurring column will be to explore new technologies, products and services that can increase efficiency and profits – ultimately helping to improve your business.  We will also explore the tenant perspective on new technologies to help understand and improve the customer experience in your property business.  Some anticipated topics will include: Social Media, Internet Services, and Property Management Software.  I encourage all readers to submit ideas or suggestions for future topics to me at mcorbera@revopayments.com.  By way of brief background, I am a former business lawyer (don’t hold it against me) turned technology geek and internet entrepreneur.  Over the past 15 years I have focused on building companies that focus on using the internet and other technologies to grow and improve the way organizations operate.  I am currently CEO at Revo Payments, a company that builds software for a variety of industries, including property management.  I look forward to sharing information and establishing a forum for learning together.   So without further ado, let’s get started with our first topic:  Exploring e-Payments for Your Property.

Just as in other competitive industries, property management firms employ new technologies with the goal of saving money, increasing cash flow, and improving customer service.  Forward-thinking property management firms have embraced electronic payment systems for security deposits, special fees, and rent payments with great success.   The benefits are many, including:  faster cash flow, lower payment handling expenses, increased reporting accuracy, reduced delinquencies, and happier customers.

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By: Houston Neal

In the latest of our Expert Roundtable Series, we report on best practices for managing leads. We interviewed three experts in the multifamily housing market to learn about the technologies and procedures they use for successful lead management. Among our experts are executives from Gables Residential and Archstone – both are ranked in the Top 50 Apartment Managers report from the National Multifamily Housing Council. Let’s meet our experts:

Donald Davidoff is Group Vice President, Strategic Systems for Archstone, a large privately held multi-family housing developer and operator. His teams manage Archstone’s entire marketing platform, which includes ecommerce, field marketing, creative services and corporate communication. He also pioneered Archstone’s industry-leading business process management solution to automate key forms and processes resulting in a “less paper-full” office.

Lynette Hegeman is Vice President of Marketing for Gables Residential. In this role, Hegeman oversees the development and execution of general marketing, internet marketing, public relations and advertising. With 19 years of experience in marketing, sales management and real estate development with companies such as Intrawest, Hilton Hotels Corporation and Preferred Hotels and Resorts Worldwide, she leverages her experience to further establish Gables as a leader in the multi-family industry.

Tracy Guillen is the owner of Esquire Property Management. She has many years of experience providing Ventura County property management services to real estate investors in Ventura County. Tracy is passionate about the real estate business and takes a personal interest in this field as she actively owns, sells, buys, and manages her own property management portfolio in Ventura, Oxnard, & Camarillo. Her affiliations include: California Broker’s License, California State Bar Association and the California Apartment Association.

Lead management is a critical component for any property management company serious about marketing. In a study from the Aberdeen Group, 90% of companies using automated lead management had average yearly revenue growth of 59%. So without a strategic and organized process for vetting prospective tenants, you may be leaving money at the curb.

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By: Bradley A. Luster

The early 1990′s near economic implosion had a deleterious effect on the Southern California residential, commercial and industrial real estate sectors.

The downturn was so severe that the greater Los Angeles real estate markets for all sectors got slammed.

Riots, earthquakes, floods, the near disintegration of the Southern California aero space industry following the end of the cold war helped fuel a near housing depression and the major downturn in the commercial and industrial sectors. Jobs lost, and large segments of our workforce wiped out of jobs, hitched U-Hauls to their cars and headed toward Arizona, Seattle and Las Vegas for better opportunities. Added to the economic disaster was the RTC and Mexico defaulting on their loans to the International Monetary Fund. For a short period of time, trade between California and Mexico was frozen. Tens of thousands of jobs were at risk, again!

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By Don Logay

On February 1st, 2009, ELAN General Contracting Inc., headquartered in San Diego, California, began a unique commercial retail design/build project 2,800 miles away in the fashionable SoHo district of Manhattan in New York City.

The challenge was to create a contemporary flagship retail store for Crocs, Inc. footwear in what was originally an 1818 Federal-style house. The three-story structure located at 143 Spring Street (at the corner of Wooster) had a rich 192-year history. Originally built as a single-family residence, it underwent substantial changes in form, use and occupancy over the years and in 1850 was expanded and converted to a commercial structure. The building underwent six renovations in all, with the most recent tenant being a neighborhood Bar-B-Q restaurant.

Two years of pre-planning and preparation by designers, architects and project managers had already taken place since lease signing to ensure transforming such an aged building into a basically new structure would blend both new and old in a look and manner that was suitable to the historic SoHo “Cast-Iron” District, which is now closely governed by the NYC Landmarks Preservation Commission.

Note the key word: “Suitable.” This is a primary consideration that any contractor, owner or tenant must be aware of, and must keep in mind, and will have to deal with when considering, planning or completing a commercial retail design/build project that falls under the classification of “Historic Restoration.”

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The commercial real estate industry honored 14 commercial properties with The Outstanding Building of the Year (TOBY) Award yesterday at the Building Owners and Managers Association (BOMA) International’s annual conference, held June 27–29 in Long Beach, Calif. This year, a record 94 buildings competed for an International TOBY award.

The TOBY winners were recognized for excellence in office building management and operations in specific categories of building size or type. To win the international award, the office buildings first won both local and regional competitions. Judging was based on community impact, tenant/employee relations programs, energy management systems, accessibility for disabled people, emergency evacuation procedures, building personnel training programs and overall quality indicators. A team of expert industry professionals also conducted a comprehensive building inspection.

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Delinquency rates continued to increase in the first quarter for all commercial/multifamily mortgage investor groups, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report.

The delinquency rate for loans held in CMBS is the highest since the series began in 1997.  Delinquency rates for other groups remain below levels seen in the early 1990′s, some by large margins.

Between the fourth quarter 2009 and first quarter 2010, the 30+ day delinquency rate on loans held in commercial mortgage-backed securities (CMBS) rose 1.54 percentage points to 7.24 percent.  The 60+ day delinquency rate on loans held in life company portfolios increased 0.12 percentage points to 0.31 percent.  The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.16 percentage points to 0.79 percent.  The 60+ day delinquency rate on multifamily loans held or insured by Freddie Mac increased 0.05 percentage points to 0.24 percent.  The 90+ day delinquency rate on loans held by FDIC-insured banks and thrifts rose 0.32 percentage points to 4.24 percent.

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