January 19, 2016
6 Minute Read
Prior to its 2014 acquisition, Northpointe Apartments, a 528-unit affordable apartment community in Long Beach, California, looked like a low-income property: peeling paint, shabby landscaping and run-down, empty spaces. Then Avanath Capital Management purchased it and started a $1.1 million capital improvement plan that culminated in December last year.
While news of large capital expenditure upgrades is common in the conventional apartment market, especially at the higher end of the spectrum, it’s not something you often hear about in the affordable housing space. But, Avanath is not your typical owner or manager of affordable housing communities, nor is its director of property management, Nicholas Dunlap, your run-of-the-mill multifamily executive and marketer. In addition to his role with Avanath, Nicholas is the president of the Apartment Association of Orange County, authors a blog focused on housing issues and has published two books on real estate investing.
Nicholas has been with Avanath for two years, but the multifamily business is in his DNA. Throughout his youth, he worked for his father in his apartment syndication business. Then, after graduating from UCLA, Nicholas began his professional career in real estate, first on the brokerage side and then going back to work for his dad. His father’s company, Dunlap Property Management, owned approximately 28 buildings and managed more. While working for his father, Nicholas learned how to use cutting edge marketing to maximize revenue and occupancy.
“I understood the importance of professional property management in making real estate investments succeed,” he said. “I developed that part of the business and helped grow the fee-management business. Operationally, I also created and implemented a pretty robust marketing suite for a company that size. We had a tenant portal before everyone had one, and we used online advertising sites like Postlets and social media marketing in its infancy stages. We knew our renters were online. We saw where consumer trends were headed. That decision paid off significantly.”
Nicholas brings that marketing and investment acumen to his position at Avanath, where he and the senior leadership share a deep-rooted vision about what affordable housing is and should be. Their business model is centered on holistically creating a better community. That includes improving the properties’ physical appearance and service programs, along with improving the marketing, occupancy and returns, all of which Nicholas is responsible for. Currently, all but one property is low-income housing, and there are several senior housing properties in the mix. The average rent across the portfolio is $1,100 per month. Nationally, median rent is $1,381.
“We have a unique approach to affordable housing communities that starts with our CEO, Daryl Carter,” Nicholas said. “We buy workforce, affordable, tax credit and low-income housing communities, but we don’t treat them any differently than you would treat a conventional property. When you drive by our communities, you can’t tell the difference between ours and the market-rate property next door.”
This is evidenced by the turnaround at Northpointe, which Nicholas managed, overseeing every detail from new paint to new parking, and the the addition of a large, multipurpose sports court.
“Now you visit and it looks like a resort,” he said.
Nicholas incorporates Avanath’s unorthodox investment philosophy into his marketing programs. He couples an elevated level of care and community commitment with bold digital savvy. He recently took time out of his busy schedule to share some of his digital marketing insights.
Zillow: Having managed and invested in both conventional properties and affordable housing, what is the difference?
Nicholas: There isn’t one, from a marketing perspective. I started out on conventional, and then went to affordable. There are certain things that are a little more complicated in the affordable market, such as the amount of paperwork needed to move someone in. But, in a sense, it’s a lot more stable, and there’s less turnover.
Zillow: Given that, tell us about your approach to marketing, and how you tie that to property performance.
Nicholas: People don’t want to be marketed to. People want to look for information, satisfy their questions and concerns and find a place to live. The more information that a prospect has, and the fewer ads they are subjected to, the better their experience. It’s like shopping for a car — sometimes you just want to go walk the lot and see what piques your interest. You don’t want someone constantly trying to sell you. That’s what we try to do: give our customers useful information. That makes us successful. It's why I like the new affordable housing feature on Zillow. My customers can look at apartments on a map, then determine which ones are affordable, what the affordability requirements are and what the limits are. I think that’s immensely helpful.
Zillow: Can you talk a little more about your digital marketing mix? What are you using and why?
Nicholas: For our 2016 budgets, we’ve gone 100 percent online, and we use Zillow and Craigslist almost exclusively. Our occupancy is continuing to climb and we’re continuing to grow revenue. At the end of the day, what matters is that leads are translating to leases. If you’re just getting a lot of people looking at your ads, that’s not going to help your bottom line.
Aside from the 'active' advertising, we also have property websites set up and use social media marketing consistently, mostly with Facebook and Google Plus. And we’re doing a lot of work focused on SEO. Those are managed together by Apartment SEO, an outside firm that we have a great relationship with. We are also focused on reviews through Google and Yelp.
Zillow: How important is mobile for your audience?
Nicholas: You can’t just be online. You have to be mobile. And you have to provide a product that is designed for mobile devices. I get a kick out of all the people on their phones looking at our sites and looking for information. They come into our leasing office, and if they don’t like what they hear, they are on their phones looking for another property.
I had this debate the other day: Someone said that when you deal with low-income or senior housing, you don’t need a Web presence. My immediate thought was, ‘It's a good thing you're not in marketing.’ We’re seeing over 96 percent of our traffic come from online, and a lot of that is from handheld devices. The idea that seniors don’t do digital is nuts. I get six-page emails from some of our senior residents — sometimes complaints and sometimes thanking us for an ice cream social. But they're online and so are we.
Zillow: How do events factor into your marketing?
Nicholas: We are big on social programming, services and content. And not just because they are required in some cases (some of these properties have a land-use restriction agreement, which means that the property owner, in order to receive a subsidy or certain credits, must provide social services for the residents.)
We do a number of things across our portfolio. We do everything from holiday events and functions to mentorship programs, homework help and tutoring. At our Northpointe property we have a program where retired NFL players come in and mentor the children. They get help with their homework and join in mentorship programs with other young professionals as well. Under the previous owners, 50 kids participated in the after-school program. Now, we routinely have between 150 and 200 kids. Being able to provide programs like this makes you feel realize that you're more than a landlord or apartment owner. You are fundamentally changing people's lives. That’s big to me.
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