Kevin and host Marcus Perleberg discuss how Multifamily Utility Solutions (MUS) has helped multifamily property owners across the country gain compensation from the internet & cable companies for services already provided to their tenants. MUS’s turkey process requires little time & effort from clients and can yield favorable results.
Kevin shares his secret to success–MUS’s service-oriented approach: “We get paid for some; We service all!!”
00:00:00 – 00:01:47
Early career in cable TV sales
00:00:00 – 00:01:47
The speaker recounts starting their career selling cable TV door-to-door after their college girlfriend became pregnant, choosing this over selling replacement windows. This initial job led to a long career with Comcast. Later, the speaker founded their own company, initially representing Comcast and Charter by securing agreements with apartment owners. Over time, these companies took responsibilities in-house, leading the speaker’s company to represent multi-family property owners. The conversation touches on how many people unexpectedly find themselves in real estate, despite not initially considering it.
00:01:16 – 00:02:54
Entrepreneurship and building business
00:01:16 – 00:02:54
The speaker discusses the entrepreneurial nature of sales roles, particularly in companies like Comcast. Salespeople often start without an existing client base and must generate their own leads and build relationships from scratch. This process resembles starting a small business, as they create and grow their own book of business. The speaker also describes the challenges of building a business when restricted by non-compete agreements, requiring a complete shift in strategy to develop new connections and expand the business independently.
00:02:19 – 00:04:34
Growing business through referrals
00:02:19 – 00:04:34
The discussion highlights the growth and success of a referral-based business serving the multi-family real estate sector, especially during challenging times like the COVID pandemic. Many new investors and professionals are unaware of such services, but word-of-mouth and conferences help spread awareness. Despite economic hardships and rent collection struggles, the company found alternative revenue streams and ways to save clients money, such as optimizing utility expenses, helping clients protect their cash flow and maintain stability in the multi-family market.
00:03:59 – 00:06:37
Increasing multi-family property revenue
00:03:59 – 00:06:37
The speaker discusses strategies to increase revenue in multi-family buildings beyond rent increases, highlighting opportunities such as renegotiating contracts for utilities, cable, garbage disposal, and laundry facilities to generate additional income. A story about negotiating corporate discounts with Comcast illustrates the importance of optimizing small revenue sources, emphasizing that accumulating many small gains can significantly impact overall profitability.
00:06:04 – 00:08:44
Cable and internet contract services
00:06:04 – 00:07:43
The speaker discusses their primary work with cable and internet contracts, noting that 90% of their business revolves around these services. They mention a recent FCC ruling that has impacted the market. Regarding utilities like electricity and gas, savings opportunities depend heavily on state deregulation, which currently applies in only 14 states. In regulated states, rates are controlled by the state, limiting savings via competitive offers. Property owners with 20 or more units are the main clients since smaller properties have fewer options. The speaker encourages property owners to review their current payments and services to explore potential savings.
00:07:09 – 00:08:44
The speaker elaborates on their service of analyzing existing agreements between property owners and service providers like cable and internet companies. Many agreements are either expired or in auto-renewal, presenting an opportunity to negotiate new or renewed contracts. By signing longer-term agreements, property owners can receive compensation. The speaker emphasizes that service providers require the property owner’s permission to operate on their property. For example, in Milwaukee, Spectrum holds a franchise to operate in the city, granting them rights to public easements.
00:08:13 – 00:10:46
Role as gatekeeper for property owners
00:08:13 – 00:09:41
The speaker explains the process of securing Spectrum service on private or multi-family properties, emphasizing that residents cannot independently negotiate with Spectrum without an agreement between the property owner and the company. Property owners act as gatekeepers and can negotiate terms such as marketing support or exclusive rights, though exclusive service rights are no longer allowed. These agreements hold value depending on the terms negotiated.
00:09:12 – 00:10:46
The speaker addresses the common question of why property owners need their services, comparing it to doing one’s own car maintenance versus hiring an expert. They highlight that while owners can handle negotiations themselves, expertise ensures the best outcome without unforeseen problems. The speaker also clarifies their compensation model, which is commission-only based on successful results, aligning their interests as true business partners with no upfront fees.
00:10:14 – 00:12:47
Compensation and client relationships
00:10:14 – 00:12:47
The discussion centers on the challenges and strategies involved in working within utility markets for cable and internet services. The speaker emphasizes the importance of long-term relationships and mutual financial benefit in their business approach. They explain limitations in working with electric and gas utilities but highlight opportunities in cable and internet, depending on market competitiveness. Rural areas often have only one provider, limiting compensation potential, whereas competitive markets like Dallas offer more options and incentives. The speaker stresses the value of industry experience and knowledge, including knowing the right contacts, which saves time and effort in navigating these complex markets.
00:12:18 – 00:14:14
Leveraging property portfolios
00:12:18 – 00:13:19
The speaker explains their proactive strategy in client acquisition by leveraging a database of property portfolios. They target properties nearing renewal and use collective bargaining power by grouping smaller portfolios together to negotiate better deals.
00:12:49 – 00:13:53
They discuss how combining different owners’ units can create leverage in negotiations, though success varies. This approach is more effective than contacting generic customer service, which lacks the authority to make such decisions.
00:13:21 – 00:14:14
The conversation highlights that only higher management can make decisions on proposals. The team reviews and presents various options to property owners, providing recommendations while leaving the final choice to the owners.
00:13:48 – 00:16:03
Internet as an amenity in multi-family
00:13:48 – 00:16:03
The discussion centers on offering internet service as an amenity in multi-family properties. Property owners can buy internet service in bulk at a discount and include it in the rent, making their units more competitive compared to nearby properties without such amenities. The approach varies depending on the market, property class, and competitiveness. Higher-end properties are more likely to offer it, while owners of lower-end properties may avoid the responsibility due to contractual and liability concerns. The conversation also touches on advising owners to consider these factors carefully before making business decisions. Additionally, the speaker reflects on the concept of leveraging buying power across multiple units to negotiate better rates, which was previously unconsidered.
00:15:28 – 00:17:00
Industry competition and growth
00:15:28 – 00:17:00
The speaker acknowledges the presence of other companies in the industry but focuses on serving their own clients well to ensure growth. They mention there are both larger and smaller competitors but emphasize concentrating on their own business and spreading the word about their services. The speaker highlights the vast market potential, noting that even with many companies, there would still be ample opportunity due to the large number of apartments nationwide. They also note that many people are unaware of this business opportunity and share experiences from industry conferences with newcomers.
00:16:29 – 00:19:51
Scaling from single-family to multi-family
00:16:29 – 00:17:51
The speaker shares a story about a man who started with a few small multi-family properties and, within five years, scaled up to owning over a thousand units. This rapid growth exemplifies the potential for scaling in multi-family real estate compared to residential single-family properties. The speaker emphasizes how multi-family investing can significantly accelerate income growth and asset accumulation.
00:17:24 – 00:18:58
At a recent multi-family conference, many attendees expressed a desire to transition from single-family homes to multi-family properties to scale their investments. The speaker explains the key advantage of multi-family buildings: when one unit is vacant, the rest still produce revenue, unlike single-family homes where vacancy means total income loss. Although single-family tenants tend to stay longer, the higher income potential from multi-family properties generally makes them more attractive for those seeking to scale.
00:18:25 – 00:19:51
The conversation shifts to personal experiences with multi-family investing. One participant explains that after owning single-family homes, they plan to purchase a duplex next to create multiple income streams. Managing a duplex is similar in effort to a single-family home but offers more rental income, making it a logical step toward multi-family investing while still staying within the residential property space.
00:19:23 – 00:21:30
Renovation and refinancing strategies
00:19:23 – 00:20:58
The speaker discusses a common strategy in real estate investing where buyers purchase C-Class properties with deferred maintenance, renovate them to upgrade to B-Class, and then refinance to use the increased property value to fund future investments. They mention that during renovations, typically one or two units in a 20-unit property can be kept unoccupied at a time. This process often takes about a year to complete and allows investors to pay back initial investors or reinvest proceeds to continue growing their portfolio.
00:20:26 – 00:21:30
The conversation shifts to the importance of gaining knowledge through conferences and networking. The speaker emphasizes that face-to-face interactions remain the most effective way to generate leads, despite advancements in technology. They acknowledge the challenges involved in real estate purchasing, noting that it is not as simple as approaching individual homeowners directly.
00:20:58 – 00:24:03
Finding and contacting property owners
00:20:58 – 00:22:01
The discussion begins with the challenge real estate investors face in contacting owners of buildings who do not live on-site. The speaker asks about strategies for finding and reaching these absentee owners, acknowledging that these owners often don’t occupy their properties.
00:22:01 – 00:22:56
It is explained that many smaller properties are self-managed by ‘mom and pop’ owners who may be complacent or ready to retire, making them potential sellers. These owners are often publicly recorded, and investors can sometimes reach them through intermediaries like on-site maintenance staff.
00:22:28 – 00:23:25
The conversation highlights technological advances that assist in tracing property ownership. An app called Deal Machine is mentioned, which uses tax records linked to a property’s address to identify and contact owners, even if they live in a different state from their property.
00:22:57 – 00:24:03
This technology allows investors to send targeted mailers directly to actual owners, facilitating outreach. The ease of contacting small, owner-managed properties is emphasized, with a personal example of how simply calling owners can uncover potential sales opportunities.
00:23:30 – 00:25:30
Using tech and outreach for leads
00:23:30 – 00:25:30
The speaker shares a story about how someone successfully purchased a duplex through a Facebook message by directly contacting the owners. They discuss the potential benefits of owner financing in real estate, especially for new investors who may struggle to secure traditional commercial loans. Owner financing can allow buyers to enter the market more easily, undertake renovations to improve the property, and eventually refinance with a bank once the property’s value has increased. This approach can be a valuable strategy for breaking into multi-family property investment.
00:25:00 – 00:27:20
Seller financing in multi-family
00:25:00 – 00:27:20
The discussion focuses on the use of seller financing in multi-family real estate, highlighting that while it is common in some regions like Utah, it is less accepted in the Milwaukee-Waukesha market. Sellers are often skeptical, fearing scams or losing their property due to unfamiliar financial arrangements. However, as seller financing becomes more widespread, it gains trust and becomes a standard practice. Additionally, seller financing can offer tax benefits and flexible exit strategies, which are especially relevant for property owners considering retirement and managing their financial wealth carefully through mechanisms like 1031 exchanges.
00:26:47 – 00:29:13
Exit strategies and retirement planning
00:26:47 – 00:28:52
The speakers discuss strategies for engaging multi-family property owners, emphasizing the value of sending letters to plant seeds for future sales. They share personal experiences where outreach letters led to unexpected interest months or even years later. One speaker recounts successfully initiating their first real estate deal through direct mail, highlighting the high response rate from a small batch of mailers. They note that persistence and patience are key, as potential sellers may reach out long after the initial contact.
00:28:22 – 00:29:13
The conversation continues around the delayed but effective impact of networking and outreach efforts in the multi-family real estate market. Clients and contacts often remember and follow up years after initial interactions, demonstrating the importance of maintaining connections and being prepared for opportunities that arise over time.
00:28:47 – 00:32:41
Utility contracts and property sales
00:28:47 – 00:30:50
The discussion addresses whether utility contracts, such as those with Spectrum or other service providers, remain with the property or the owner when a building is sold. It is explained that it is the seller’s responsibility to notify the utility companies of the ownership change to ensure that ongoing revenue or debt transfers to the new owner. The service provider assists clients with this transfer process, but their contractual relationship and compensation end with the original client, as contracts do not automatically transfer to new owners.
00:30:23 – 00:31:44
Although the contract ends with the original owner, the service provider uses the transfer process as an opportunity to establish relationships with the new owners, often leading to additional business and revenue. This goodwill approach helps open doors to further opportunities. The speaker shares their goal of building a company based on trust and respect, even mentioning that they have terminated relationships with clients who do not meet their standards or whose business practices are questionable.
00:31:18 – 00:32:41
The speaker emphasizes the importance of working with reliable clients and avoiding those who are slow to pay or unreliable. They prioritize partnerships with trustworthy businesses to maintain peace of mind. Additionally, the speaker highlights that new property owners benefit from contracts negotiated by the service provider on their behalf, often resulting in cost savings and a willingness to work together, even if the new owner has not directly engaged with the provider before.
00:32:13 – 00:36:33
Turnkey service and client support
00:32:13 – 00:33:43
The discussion focuses on how the service simplifies property management for buyers by handling tasks like contract renewals and utility management. They use automated systems like DocuSign and reminders to keep things organized, relieving buyers from tracking deadlines or contracts themselves. This proactive approach helps buyers manage their properties more efficiently without worrying about missing important details.
00:33:15 – 00:35:00
The speakers explain that property buyers often assume all contracts, such as utilities, are properly organized and transferred, but this is frequently not the case. The service helps clients during due diligence by investigating existing contracts to confirm their status. Sometimes deals fall through after this research, but the service maintains client relationships regardless, emphasizing value and support beyond immediate payment.
00:34:27 – 00:35:56
The service prioritizes long-term client relationships by assisting even when not directly compensated, believing that good work and goodwill lead to future opportunities. They highlight the importance of nurturing these relationships as part of a growth mindset similar to investing, where consistent effort yields eventual returns.
00:35:26 – 00:36:33
The final segment reflects on the realization that services exist to advocate for clients with large utility companies, which often seem too powerful to challenge. The speaker expresses surprise and interest in learning more about such services, noting that many others share this lack of awareness and could benefit from this support in managing utility contracts.
00:36:00 – 00:38:33
Shift to streaming and internet necessity
00:36:00 – 00:38:33
The discussion focuses on the shift from traditional cable providers like Time Warner and Spectrum to streaming services such as Netflix and Hulu. Despite this shift, the panel emphasizes that a reliable internet connection remains essential since streaming services require internet access. One participant shares personal experience using YouTube TV and Hulu, noting the importance of internet as a utility, especially in multi-family housing. The conversation also touches on regional sports viewing preferences, with mention of Northeast Ohio teams like the Browns, Blue Jackets, and Guardians, highlighting the value of streaming for local sports fans.
00:37:58 – 00:41:19
Sports talk and personal anecdotes
00:37:58 – 00:39:41
The speakers discuss Michigan State University and its sports teams, mentioning one speaker’s son who is a senior in high school and has chosen to attend Michigan State. Despite this, the speaker remains a loyal Ohio State Buckeyes fan and jokes about rooting against Michigan State in football. They touch on the rivalry between the schools and the mutual dislike they share for the opposing team.
00:39:08 – 00:40:16
The conversation shifts to Michigan State’s chocolate Buckeyes, a popular treat, with one speaker offering to send some. They discuss the flavors and mention personal connections to Ohio State, including a former spouse who was an alumni and part of the marching band, highlighting familiarity with Ohio State traditions like Script Ohio.
00:39:41 – 00:41:19
The speakers humorously transition into a sports podcast segment, praising the Ohio State Buckeyes football team and coach Urban Meyer for their success and national title. They compare the Buckeyes’ dominance in the Big Ten to other dominant sports teams like the New England Patriots and the New York Yankees, acknowledging both admiration and irritation from fans of rival teams, but stressing that the rivalry is all in good fun.
00:40:48 – 00:42:53
Contacting for multi-family utility help
00:40:48 – 00:42:46
The speaker discusses how those interested in multi-family investments can contact him, emphasizing that he doesn’t attend many conferences due to workload. He suggests emailing Kevin at multi-familyutilitiesolutions.com for questions or to schedule a brief, no-obligation introductory call. The conversation highlights the speaker’s willingness to share knowledge and support potential investors, with a positive outlook on future collaboration once certain investment thresholds are met.
00:42:50 – 00:42:53
The conversation concludes with brief goodbyes and well wishes.
