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How Your Co-Op or Condo Can Weather The Gathering Economic Storm Never Write Another Monthly Check Again! Board To Board |
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Dear Reader:
At Impact, we recognize the critical importance of the services we provide to the properties and people who have put their trust in us. We understand that we are managing people's homes and, in most cases, their biggest single investment, and we take our responsibilities very seriously. That's why we cultivate uncommonly productive relationships with the boards and staff members of the buildings we manage, why we take extra care to make certain that every Impact professional is thoroughly knowledgeable and responsive, and why we continue to invest in the technology that enables us to deliver the highest level of service. If your Brooklyn, Queens, Bronx, or Staten Island co-op, condo, or rental property is in need of professional management, I would welcome the chance to discuss how Impact can be of service. Please feel free to call me at (718) 898-0190. I'll also be happy to you at the Impact booth at the March 6, 2003 Cooperator Expo. I look forward to speaking with you soon. Very truly yours,
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How Your Co-Op or Condo Can Weather the Gathering Economic Storm
Navigating the finances and ensuring the fiscal stability of a cooperative corporation or condominium association has never been an easy task. Certainly, New York’s residential community has been through some challenging times. But looking immediately ahead, the coming 12 to 18 months are likely to be among the most challenging for the city as a whole and for residential co-ops and condos in particular. This is especially true in light of the recent historic increases in insurance premiums and real estate taxes, the upcoming Building Workers Union contract negotiation (in April), and the erratic nature of fuel costs, which are likely to rise should the prospect of war materialize. It is therefore prudent to anticipate that, moving forward, co-ops and condos will require more operating capital than they ever have before. Where to find the additional funds to meet a co-op’s or condo’s increased operating costs and maintain a certain quality of life is, literally, the million dollar question. While Impact works on an individual basis to chart the best course for each property we manage, we offer the following generic suggestions that all properties may find helpful. •Make sure your property is getting the highest return on its invested funds. Boards must be constantly alert to changing interest rates and the availability of various instruments in order to ensure the highest rate of return on the property’s investment funds. •Investigate means of generating ancillary revenue. Co-ops and condos that do not have storage lockers, bicycle racks, on-premise gyms or fitness clubs, social rooms, or other such revenue generators, can investigate the viability of installing one or more. Buildings with these revenue-generators can consider raising the fees charged for their use. Boards also can look into renting roof space to telecommunications companies for their antennas and/or renting the building lobby to production studios for use as a scene location. •Investigate ways to shift the property's carrying costs. For example, properties that are master-metered for electricity can investigate the advisability of sub-metering and charging residents for their actual individual electric use. •Apply the city real estate tax abatement to the co-op's operating account. This strategy, which has been used by co-ops throughout New York since the city began issuing real estate tax abatements, requires a vote by the board and the levying of a corresponding assessment in order for the cooperative corporation to receive the full benefit. Call me or speak with your corporate counsel to learn how to go about this. (Note: This strategy applies to co-ops only.) •Increase the building’s transfer fee (‘flip tax’) and sublet fee. With the real estate market still hot, buildings may benefit by increasing transfer and/or sublet fees, as appropriate. Boards of buildings without such fees may consider instituting them. •Increase maintenance/common charges, and levy assessments, as necessary. While raising maintenance/common charges and/or levying assessments is rarely a popular move, there may be no other way for a co-op or condo to generate the monies necessary to maintain operations. When such an increase and/or assessment is required, the board must be sensitive to shareholders/unit owners and inform them directly and candidly about the reasons for the increase and/or assessment and how the funds are going to be used. Such open communication goes a long way toward preserving good relations and helps to encourage timely and complete payment by shareholders/unit owners.
Impact Real Estate Management, Inc., Principal Stuart Halper,Esq., is a residential management authority and an attorney with extensive experience in residential real estate law. Immediate access to Mr. Halper’s expertise is just one of the many value-added services Impact provides to our client.
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Never
Write Another Monthly Check Again!
No more. With Klik-n-Pay, residents of every Impact-managed building can pay service bills automatically and can be assured of on-time delivery each and every time. Here's how it works. Each month the Klik-n-Pay system automatically debits the shareholder's or unit owner's designated checking or savings account via EFT (electronic funds transfer). The automatic debit system avoids any chance of late or non-payment. What's more, Klik-n-Pay users can schedule a one-time payment, a recurring payment with a fixed amount, or a recurring payment with a variable amount (within limits). The system automatically deposits all collected funds into the right account and also enables fast processing of reversals and adjustments. And best of all, not only does the system save the cost of postage, but the Impact Klik-n-Pay system is absolutely free. Residents of Impact-managed properties can register to participate in the Klik-n-Pay system two ways.
Klik-n-Pay is the service payment technology of the future. Impact has it today!
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BOARD
TO BOARD The Berkeley is a 59-unit cooperative corporation at 25 Plaza Street West in Park Slope, Brooklyn. A six-story, double-wing, pre-war building, the co-op overlooks Grand Army Plaza, is just steps from the Brooklyn Museum, the Brooklyn Public library, and Prospect Park, and provides such amenities as a live-in superintendent, doorman, porter, roof deck, parking garage, storage room and laundry facilities. In the Spring of 2001, the co-op undertook a complete interior aesthetic refurbishment. The project included the replacement of all carpeting, wall coverings, and lighting fixtures; re-painting of all surfaces, including doorways, doorframes, ceilings, trim, and moldings; and refurbishment of the lobby and mailroom. Thanks to the hands-on involvement of the Board of Directors, the project was completed by December 2001 at a cost remarkably close to budget. Below, Board president Stephen Mittman shares some thoughts on how other buildings can emulate The Berkeley's success. On selecting a design concept "Working with the decorator, our sub-committee defined four color palettes and design concepts, which were then presented to the Board at-large for consideration," says Mr. Mittman. "Of those, two were presented to the shareholders through the display of renderings and color palettes in the lobby. We then polled the shareholders and settled on one design." Mr. Mittman emphasizes the importance of choosing a neutral color palette conducive to easy repair, selecting materials that lend themselves to longevity, and committing to a maintenance program of carpet cleaning, paint touch-ups, etc., to keep the installations looking new for as long as possible. On project supervision "Our Board met weekly, sometimes twice a week, at the outset of the project. Throughout the project, our decorator was at every meeting and I met with the committee, the contractors, and the painters, to make sure that everything was being clearly communicated. Our superintendent supervised the contractors and was an invaluable member of our team." Mr. Mittman says that shareholders were kept involved through the encouragement that they serve as the Board's "eyes and ears" with regard to how contractors were performing. In this way, shareholders felt they were participating in the project, and contractors knew that their work had to be up to standard. On adhering to the project budget "Our Board carefully monitored all expenditures," says Mr. Mittman. "Our contractor payments were made in phased installments, and we held back as much as possible until the final punch lists had been satisfactorily addressed." Mr. Mittman advises that a cushion be factored into the budget because, "as any Board that has ever done a project of this nature knows, you're going to run over." On getting the job done "The most important things in any major project are focus, direction, establishing and maintaining a time line, and constantly monitoring the budget," says Mr. Mittman. "You have to realize that you can't do it all unilaterally, and you have to develop the spirit of teamwork among the Board and shareholders." Mr. Mittman especially acknowledges his colleague Board members Philomena Bongiorno, Ronald Clokke, and Catherine Henihan, who served with him on the project sub-committee; Terry Weiss, Bari McNulty, and Todd Hedgepeth, who round out the Board of Directors; and building superintendent Burim Gega, all of whom, says Mr. Mittman, “worked cohesively, were focused on task, and without whom this job could not have been done." He also underscores the importance of including shareholders in the decision-making process so that, as he puts it, "there is a feeling of inclusion. Because in the end, it's their investment after all.”
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Impact
Real Estate Management By Shannon Terrell-Ernest Going solo, doing It your own way, the right way. That's what the three principals of Impact Real Estate Management decided to do. When the three met five years ago, they all had the same Idea. They agreed many in the management business were providing consumers with Inferior service; not to mention the indictments for corruption that had recently rocked the Industry. Mismanagement was running rampant; they decided to do something about it.
Impact Real Estate Management Inc. opened its doors for business In April 1997. Gregory Cohen, Andrew Posner and Stuart Halper, who prior to this had worked together in another management firm, felt that they could provide better service than was being offered at existing real estate management companies. Posner and Cohen, who happen to be In-laws, joined with Halper who was an attorney working with the firm, to create Impact. "We knew we could do a much better job," Halper says. Currently located in Flushing, Queens, Impact currently manages 25 cooperatives, condominiums and a few rentals. They manage properties In Brooklyn, Queens and Staten Island averaging 70 units although they have managed as many as 140 units. The buildings range from walk-ups to high-rises to garden style dwellings. At present, they are pursuing Registered Apartment Manager (RAM) certification. Lessons Learned To create a firm that would provide quality service, the principals of Impact drew on both positive and negative experiences. Cohen says that as a managing agent he had the opportunity to deal with clients directly and hear their complaints and concerns. A consistent problem was that “agents were switched from one building to another just as they became familiar with it,” Cohen says. He recalls one building that had five managing agents in two years. He believes the constant transfer of managers from one complex to the next was unfair to clients. "They didn't have time to become familiar with the agent. Also just as the manager familiarizes himself with a building, he is reassigned to another one." Recognizing such faults has allowed Impact to provide a higher level of service, much to the satisfaction of their clientele. At Impact, the clients deal directly with the principals. "They're right on the ball," says Joseph A. Merica, board president of a 112-unlt Staten Island condominium that Impact manages. "They are always available to the board when necessary. " Merica claims he can not say enough about how well Impact handles his building's affairs. During the three years they've been with Impact, they say they have had no problems with their management policies and procedures. One feature that Merica says he likes about Impact is that they are very attentive and aware of their clients' needs. They tour Merica's condo monthly, an Impact representative always attends their board meetings, and they conduct inspections when the board requests It. "They are sharp guys," says Merica who also credits Impact with assisting their condo in becoming more technologically adept and up-to-date. He believes that a major factor of their success is due to their small staff (which consists of ten people Including the three principals). "The office support staff, as well as the principals, keep things running smoothly," he states. Facing Problem. Head-On One problem that Merica's Staten Island condo faced was in transferring banks that held their accounts. "They jumped in and handled it well," he says. Impact worked with the bank to ensure a smooth transfer and made it possible for the condo's auditors to complete their reports. They also have maintained a good rapport with the contractors the condo deals with regularly, such as landscapers, maintenance professionals, and utility companies so that any problems can be alleviated. Merica also compliments the way Impact handles arrears. "They send out notices to those who are behind in a timely fashion." He says their persistence and distribution of notices has eliminated arrears as a serious problem by addressing it before it is blown out of proportion. "Impact is available around the clock and on weekends and this is something I really appreciate." He also likes the fact that Impact has an attorney on staff. "That's been a plus," he says. Another satisfied customer is Ashok Mathias, a CPA who has been president of his 75-unit, Elmhurst, Queens co-op for over seven years. In those years he's worked with a few management companies and he says he's had experience with different management styles and considers Impact Real Estate Management the best so far. "They're more hands on," Mathias says. "There's more of a personal Interest on their side." When It comes to getting things done, Mathias adds that Impact personally ensures that the building's best interests are always served. He says that since Impact took over, their water bill has decreased. "They called the water company and renegotiated the water contract to get a cheaper rate." In addition, he says they have been able to cut other costs including repair expenses. "They shopped around to get a good deal on some roofing work." One of their most monumental improvements Impact has helped with Is creating a reserve fund In the building. "We were always running at a deficit," Mathias says. For the first time in 20 years the building has a reserve of almost $150,000. Mathias contributes that to Impact Real Estate Management. When asked to describe Impact, Ronald Levine, board president of the Fountain Terrace Owners in the Gravesend area of Brooklyn, uses the words "excellent" and "the best." Having worked with Impact for close to a year he says, "They're honest and the response is fantastic. I can call them at 2am and they will respond immedidately. These are the things that count." Impact's web site, www.lmpact-management.com, provides current and potential clients with information about the company's background and current operation procedures. "Clients can e-mall us with their concerns and view the services we have to offer,” says Cohen. The site also has information about New York City and has a monthly topics section that is still being developed. One visit to the web site will give a detailed description of what Impact Real Estate Management offer’s its customers. Cooperator: What do you think sets Impact Management apart from the rest of your competition? Andrew Posner: What makes us different Is the team effort. Everyone in the office works on all of the accounts. If you call the office, anyone can assist you because we're all familiar with the buildings. And, although you may not like It, we tell you the truth. That's what we saw lacking in the management community. Stuart Halper: We're hands on. Essentially, everyone in the office gets involved. There's a collective effort. Gregory Cohen: When a client calls they deal directly with a person not voice mall. We have an attorney on staff and our clients get to deal with the principals directly. We're large enough to handle our client's needs and small enough to know what’s going on in every single building. Every client has different needs. By being hands on we are able to tailor our programs to meet their individual needs. C. What led you to management? AP: It was a natural progression; Greg and I own property together. GC: I initially worked for private owners, then I worked for few management companies. Most clients In the companies I worked for didn't get to deal with the principals directly. When I was a managing agent I was switched from building to building, which Is unfair to the client. SH: I had a client with a dishonest manager. He was later convicted. We knew we could do a much better job. C: What obstacles have you overcome? SH: One condo we took over was in deep straits. They had a negative reserve. Their liabilities outweighed their assets. Now they have a $200,000 to $300,000 reserve fund-we were behind that. C: How did you turn it around? What actions did you take to resolve the problem? SH: They had two units in foreclosure. We bought the two units and sold them for a $30,000 to $40,000 profit each. We also properly negotiated cellular antennas for them, which brings in a profit of $25,000 yearly. They have not had a maintenance increase in four years. They are flush with cash. C: What are your major accomplishments? SH: Seeing buildings come back to health. GC: Taking properties in financial turmoil and turning them around. C: What are some of the future goals of Impact Management? AP: We've recently expanded our Flushing office and In the next three to six months, we will be opening an office in Manhattan. GC: We're looking to expand without losing site of the client's needs. We want to interact with the clients on a web base. We'll also be adding a brokerage division In the future. SH: It's been a spectacular ride. Ms. Terrell-Ernest is a freelance writer living in Queens, New York. |
Welcome
to Impact NY. For your consideration in this issue,
Impact Principal and attorney, Stuart Halper, shares several practical
solutions that co-ops and condos can use to get through the economically
challenging times ahead. Also in this issue, company principal
Gus DiBiasi introduces Klik-n-Pay, Impact’s automatic service
payment technology that offers tremendous convenience to the residents
of our client properties. And we are pleased that board president
Stephen Mittman has agreed to share the success of his co-op’s
lobby and hallways refurbishment project with you.
Expert advice from Impact Principal
As any co-op shareholder or condo unit owner knows, writing monthly
maintenance or common charges checks can be a great bif pain. Not
only do you have to set aside the time to actually write and mail
the check, but penalties can occur if the check is just a day late.
Sometimes, it doesn't even get there at all.
