Home » Blog » How an Investment in Technology Can Help Future-Proof Your Multifamily Operations

How an Investment in Technology Can Help Future-Proof Your Multifamily Operations

Posted by Joseph Curd on Nov 2, 2022

Because crime doesn’t know a zip code, there is always a concern about security in multifamily. Even more so today as more people are working from home.  If there are persistent issues that make residents feel uncomfortable, then guess what? Those residents will probably leave. Not to mention, the opportunity to protect your reputation has passed you by because the behavior at your property becomes your brand.

So, what can you do? Tune in to this podcast from the Multifamily Innovation Show, featuring Stealth’s own Joe Curd, Director of Multifamily National Accounts at Stealth Monitoring to learn more!

 

How Can Live Video Monitoring Help Get the Best Revenue Per Square Foot?

Historically, security companies monitor based on something triggering an alarm. However, that can be challenging in multifamily. People are coming and going 24/7. Not to mention many communities have common area amenities where residents are allowed to be at certain times. Therefore, when securing a multifamily property, you need human discretion. The ability to discern between what activity is acceptable at certain times based on a set of rules and what is questionable behavior.

In this podcast, Joe Curd, Director of Multifamily National Accounts at Stealth Monitoring, discusses new issues concerning security in multifamily including:

  • What’s happening in surveillance today
  • New innovations around self-guided tours
  • Reputation management
  • Reducing labor with technology
  • How safety and amenities factor into resident retention

Tune in to the podcast to learn more about all of this plus more insights about technology, proactive security and the impact all of this has on your operations.

If you would like more information about live video monitoring for your multifamily community, contact us. 

 

Transcription Below

Announcer

You’re listening to the Multifamily Innovation Show with Patrick Antram, your source for innovative strategies for multifamily professionals, CEOs, executive leaders, and aspiring leaders that want to drive high performance results for their property or portfolio.

Patrick Antram

All right, in this episode I have Joe Curd. He’s the director of Multi-Family National Accounts with Stealth Monitoring, and we’re bringing him on the show today to talk about what’s happening with surveillance, the rise of concerns and issues around security.

You also have the addition and the new innovations around self-guided tours, more people coming on and off the properties, and what impact that has on your operations. So, with us today is Joe Curd. Joe, welcome in.

Joe Curd

Hey, Patrick, it’s great to reconnect with you. Been a few months. I’m, I’m happy to see you doing well.

Patrick Antram

Yes, and excited to hear what you are up to because there’s a lot of conversations right now around the innovations of multi-family properties, a lot of people coming in and out, the services, the home services, direct to consumer services, and then you just have the general idea, more people at home, working at home, and just changing the way that these communities are experienced.

And one of the things that we’ve been asked to go out and find issues on is what do we do to take care of this real estate with surveillance? Is it security? Is it, uh, how do we even talk about those things? So, let’s talk about what you’re working on and how you’re supporting multifamily operators.

Joe Curd

Sure. I appreciate it. I do think this is a really underserved discussion in multifamily, you know, people view security in those needs a lot like a necessary evil, and I don’t think we focus on security as an investment often enough. So, I, I really appreciate the space to have the conversation and to just jump right in.

I think it really falls into the, the conversation falls into really three big buckets. Let’s talk a little bit about what we’ve been experiencing in multifamily for a while, what we’re starting to see, what the day in the life looks like at a property. Second, I’d really like to touch on how we see that affect our financials and our bottom lines. And then finally, some ideas around prevention, right? To, to your point, I think that’s a really dynamic conversation just because it’s so many options out there and considerations.

But at a high level, right, security and multi-family for years, we screen our residents to make sure we right, let the right people in. We, we lock our doors, right? We put gates on communities. We start to see architecture styles align with that, with wraps and podiums that have a bit more maybe castle or moat-like infrastructure.

If you just think about how they’re, how they’re kind of wrapped by the sidewalk and everything else is access controlled, especially in dense urban markets, right? You’re just seeing lots of change in the last few years as we know. So, our business is, is booming candidly for a lot of reasons. You know, we’re, we’ve seen pretty dynamic shifts in law enforcement behavior, in prosecution behavior across the United States. We’ve seen a lot of repeat offenders in multifamily, and it’s the same things that have always played with crime, right?

They, they follow socioeconomic trends. And, and you know, I think there’s anecdotes in multifamily that I’ve heard tons of in, in the last 15 years around crime doesn’t know a zip code, and every, every zip code experiences poverty, right? And I think, you know, if we wash away a lot of the noise around it, that’s, that’s pretty obvious.

No matter where you’re at, you can be in the Hamptons or you can be, you know, in rough South Texas where, you know, I’m, I’m located here in Dallas. We see it everywhere, right?

So, I think fundamentally we all agree that preventing, I’ll just call it unwanted behavior. I don’t want to necessarily call it criminal behavior because there’s a lot of behavior that happens at the site that’s detrimental to operational expenses, ROI, the resident experience, branding. But it’s the usual suspect, right? It’s theft, it’s drugs, it’s damages, it’s violence, it’s littering, it’s vagrancy.

Seeing a lot of homeless impact on the west coast. And traditionally we’ve hired people to help solve the problem. I think that over the years, especially talking with more customers since I’ve been at Stealth, focused on what solutions they have in place today, we hear a lot about pre-apartments for courtesy officers or discounted rent. In some cases, we hear about armed or unarmed guards, which has its own set of liabilities, right?

We hear a lot about people using patrols, but I think the challenges there are pretty obvious, right? You’ve got people that are working the middle of the night at the, the pay scales are at, sometimes they may not take their duties and responsibilities as seriously as they should. You hear a lot of stories about, yeah, well, Netflix and YouTube, right? But I always hear about people listen to the podcast, funny, but just people distracted, right?

I think everybody’s got one of these smartphones in their pocket and everyone’s distracted all the time. So, it’s becoming more challenging to get quality service. And, and candidly, the, the feet on the ground solution, right? Is one set of eyes that has to be paying attention that can only be in one place on time.

So, we’ve seen customers that have invested in their own close circuit TV systems, right? So, they’ve got more eyes in the sky, they’re looking around the property more. And I’ve got video of those people on video watching video on their phone while we’re helping them catch incidents because they’re not paying attention to that, that closed circuit TV solution, right? It’s not their focus.

And, and at the end of the day, these derogatory incidents have a plethora of impact on, on multifamily, but they’re hard to solve for, right? Even if, even if you get to think about the multi-family in comparison to other businesses that you may secure with, with various security solutions.

So, I think historically, a lot of security providers, I won’t, I won’t name any names of course, but if you think about the services you’ve seen over the last 20 years, you see a lot around people that monitor based on an alarm. And alarm’s a bit of a catch all term in security space, an alarm to certain providers, meaning that someone entered a door where they weren’t supposed to be, right? It was after-hours. Let’s use the leasing office as a prime example. It’s closed blocked, right?

If we see someone in there, there’s no question that they’re in a no-go zone, right? They shouldn’t be there at all. So, when the alarm triggers, those providers look at the camera and they see someone’s where they shouldn’t be, and it’s very easy to escalate from there, right? Whether that’s an escalation to, you know, someone that’s, that’s on property or the police, it’s pretty straightforward.

Multifamily, so much more challenging than that though. We’ve got people that work second and third gift. So, you’ve got people coming and going from the property, literally 24 7 in, in many cases, especially our most expensive assets in high density areas, you’ve got places where there are certain hours, right? Common area amenities residents are allowed to be. So, it’s fine if there were 45 people having fun at the pool at 9:45 at night, but at 10:01, it’s not okay anymore, right?

So, the challenge with securing multifamily is you need human discretion at play. You need someone that knows what’s okay at what times based on a set of rules. And you also need people that are trained to look for very questionable behavior. So, I think one of the easiest examples to use, and you know, we’re starting to see a lot more parking garages in multifamily, even here in Texas where everybody builds wide, you know, where parking garages are becoming the norm.

So, in the parking garage space, that’s one of the most risky areas for community, right? We see a lot of vehicle theft as an example. We’ve unfortunately seen some, you know, person-on-person violence and, and attacks, but 99.3% of the time, and that statistic was made up on the spot. We, we really see people walking me from their car to an elevator, and that’s absolutely fine, that’s what they should be doing. But when we start seeing that person coming to the garage, and then they check the next car handle beside them, and they start going checking trunks and, and car handles, it’ll either look like a “W” pattern or, or an “S” shape, right? As they meander through vehicles, we immediately know that they’re up to no good.

Patrick Antram

And that’s the trained, I mean, if you had an onsite guard, right? Like they’re, that’s not going to reveal itself in the, they, they don’t have eyes everywhere, right? But then also having somebody that is A) paying attention, but highly trained to sense these types of scenarios.

Joe Curd

That’s right. And, you know, a lot of times our operators, uh, itself at least will, will be in a position where we’re watching a group of people that look tense, right? Maybe for 10, 15, 20 minutes, right? And then, then violence happens, right? We can, we can take action at that point. So, a lot of different scenarios, but I think that the, the is compounded with the fact that you’ve got a bunch of different architectural styles out there, right? Garden communities have very disparate changes from a, a low rise versus a high rise, right? High rise, we’re much more interested in the interior in many cases, right? Especially depending upon the asset type.

If you think about conventional, right? We, we know our typical problems in conventional, they change when you get to affordable housing. They do, you know. Socioeconomic shift, demographic shift, just time on property.

Even in the conventional space, we’re seeing that increased hourly occupancy, right? Not, not just our normal occupancy measures, but literally the amount of hours that the residents are on property, especially if they have a little bit too much time on their end, right? We’re, we’re seeing a lot of different changes in behavior. And there in the past, you know, it wasn’t uncommon for, for most people just to request our help in the evenings, right?

My, my father always joked that nothing good ever happens after dark. And you know, for the most part he’s right. But the, the daytime activity shifted. We’re seeing, I mean, it, it, some other rougher properties we’re seeing brazen gun fights in the middle of the afternoon, which is just, I mean, it’s, it’s mind boggling to watch things. We unfortunately, at Stealth, we see a few things that don’t make it on the news, right?

So, it’s, it’s pretty amazing the shift in behavior and how being multiple places at, at one time just, it lets you account for it. So, I, I, you know, I think it, the, the root of it, we talk about all these problems. We spend money to try to fix them, right? But we don’t often consider all the impact of this behavior against the, the true operating bottom line at the property. And I think that, I often joke that the two things Stealth really can help you with are getting the best revenue per square foot because I, I would never suggest we change price, right?

I think price and multifamily is the one lever that you should pull last as you try to create more NOI, increase revenue to decrease your expenses. But that behavior at the site becomes part of your brand. And for those of us that have studied multifamily operations and efficiency and asset valuation long enough, it makes a huge impact when your brand drops. I’ve seen people spend multimillion dollars per asset in some cases to rebrand, recolor and try to change that reputation after it’s been sung.

Patrick Antram

Um, can we dig into a little more on the impact to revenue if we are proactive? Maybe you have insights on that just ultimately and, and there’s more pressure than ever now to operate efficiently and to find value because yeah, you’re right. I mean, one incident can change the marketing world’s scenario too. So, let’s go into that a little more too.

Joe Curd

Yeah. Well, and I think that conversation is pretty well served. I’ve just started with some macro trends, right? I think that fundamentally in multifamily, we’re blessed when inflation curves hit us. Our rent normally adjusts and we future proof a bit, but we’re also seeing supply chain challenges right now. Because sometimes when things get damaged, you can’t repair them for a few weeks, and nobody likes that loss of curb appeal. So, at the high level, you are experiencing market conditions from inflation, from supply chain, from labor demand, right? That create this whole new bucket that we haven’t experienced in many years.

The second piece is really where people were trying to take the business innovatively, futuristically with technology. So, we’re seeing some really impressive change in multifamily. I remember when revenue management wasn’t really a thing, right? People weren’t sold on and they were convinced that they could price their units better than anyone else.

And then I think that the market’s proven that to be incorrect over time. Now I’m starting to see this dynamic, massive shift in the investment space where you’ve got some of the biggest global players right now looking to invest ample cash. They want to get that cash off the market right now, because it’s losing value every day. And they want to put it into something more tangible.

So, we’re seeing investment in capital outlay for, I’ll just call them generically, Internet of things, right? I think that gets into the self-guided tour trend, and we’ll talk about access control a little bit more later. But to do self-guided tools, what do you have to have, you have to have a robust online screening and online licensing solution. I think most people have that these days. You have to have them access controlled properties, which not many people have, not fully. Not the way you need to.

We’ll talk about the spheres of influence there towards the end. But I think the oversight, right? The goal for all these companies is not only to put sunk capital into things that go on your balance sheet in a positive way and increase the value of the property, but I, I’ll just call it out. They’re looking to reduce labor and they’re looking to aggressively reduce labor. It’s not so much a secret. It’s been a bit of a secret for a couple of years, but it’s, these days people are looking to do more with less than they ever had. We’re seeing interest rates go up. I think the transactions in multifamily are going to slow down a bit if I’m betting. So, you’re going to be stuck operating what you have for a while in, in some cases, right?

The cash on real estate acquisition and certain markets are starting to slow down. So, I think those things combined create this new atmosphere where people are trying to future proof. But let’s just talk about what crime’s been doing to us for, I don’t know, the last few hundred years. If people know that property’s a dangerous property, the first thing they’re not going to do is they’re not going to move children.

I think you see people that are willing to take more risks based on socioeconomic issues, but if they do have choice and your property happens to be laden with two injury bedrooms, you’re not going to get this filled in the right way. You’re going to get this filled with a bunch of roommate situations with maybe, let’s call entry-level employees, right? And they have other demographics, but I, I think it creates a situation where the property doesn’t have a family-oriented style, and it’s more transitional.

And those transitional properties, they have a lot of turn, right? That constant turn, we all know about our turn cost, and I’ve had many discussions over the years about it. I think in my mind turn cost to between five and $6,000, even with really tight vacancy windows these days, right? So, you’re seeing massive amounts of cash turn, you’re seeing the renewals. Renewals are bottomed out when there’s crime every time. So, we’re having to spend more dollars to get that next lease in there, or at least trade out values suffer. The cheapest lead you’ll ever get is the one you already have. We all say it all the time, right?

Patrick Antram

This is why I brought you on the show, because you’re talking about a product that really is innovating around surveillance and security into where everything is going, not where everything has been. And it’s interesting the way you’re speaking to the investor conversation, the operations conversation, the day in the life of the operators. I, that’s got to play an important role knowing like, if you’re protecting our asset, you kind of need to know how it all works.

Joe Curd

Yeah, I think so. And I think that’s where a lot of people struggle trying to provide solutions in multifamily, right? If you don’t understand multifamily, I mean, I, I met my wife, she was the resident and renewal specialist at a 1500-unit property, okay? So, the first couple years of us dating, not only did I dress up as the Easter bunny for resident events and go serve margaritas on taco night and all sorts of other unpaid labor, but I had a lot of fun just hearing all the crazy stories, right? Of things that she experienced firsthand. And at the time I was working for a really big tech provider in the multi-family space. I spent 12 years there deep in business intelligence and revenue management and asset optimization and the pretty sophisticated pool suite that, that showed you the big numbers. But I’ve always been an economics nerd.

So, I wanted to peel the layers of that onion and learn more. And I think that multifamily is so dynamic. I, I think it’s one of the reasons people get sucked in and we never leave, right? I love multifamily. I plan on working in the space forever, but there’s so many problems to solve for, and the challenges of the site staff.

You know, I talk to our team internally all the time to try to give them more perspective on, on what the experience is like. I’m like, guys, we’re just one of 200 vendors. They’re having to manage all the time for a plethora of different issues, concerns and needs that happen. And as time goes on, those needs are only speeding up. With residents more at home, like we talked about earlier, that just, you know, they’re blowing the phone up more often. So, the texture is changing.

I think over the last couple of years we’ve seen some pretty solid retention rates. We have seen some economic shifts out of certain areas based on crime and restrictions and legislation and other factors. But in other markets, we’re seeing people that just can’t afford to move anymore.

The housing markets have exploded. So, I think the opportunity for home ownership is decreasing, right? And in recent conversations with some of the bigger investment players, they are preparing the batten down the hatches and focus on retention in a big way. They’ve seen the wave coming and, and we’re just getting ready for it. So, the conversations I’ve had recently around in, in really the last six months have changed a lot on this. Patrick. People are starting to see that they’ve been spending money in places that are ineffective. The problems have gotten worse and not better.

And it’s really starting to affect them and they’re starting to see some caps on being able to get, easily get new residents in. And that’s really just the revenue side, right? We’re talking, how do we put heads in beds and collect rent. That doesn’t factor in the backside of all this. The backside of all this is all the unpaid expenses. And they come in a lot of forms.

So, I know we’ve talked about crime a fair amount in this discussion, but accidents, right? We, we promote renter’s insurance in our industry strongly these days because just stuff happens, right? But what happens when a, a resident says, “Well that wasn’t my dog that did the dog biting”, right? Or someone didn’t lock the pool gate, or someone’s kids were in the pool after hours. You’ve got these liability concerns that can lead to extravagant lawsuits.

I can tell you an anecdotal story of, I, I know of a provider here in Dallas that had, they hired a big rehab project, and they had a GC, and that GC used the sub, and that sub used the sub and they hired someone to do some painting. And the person was only supposed to paint the hallways somehow they ended up in electrical closet and they did some significant damage to their dominant hand and ended up on, on long-term disability. It was subrogated to the insurance chains. And the next thing you know, they lost the property. It’s a couple million-dollar loss, just wasn’t in the, the balance sheet to, to get there. So, the, obviously an extreme story, but you want that video evidence, right? As, as properties either become more expensive or more volatile, we see tons of incidents, it’ll probably shock you that criminals don’t pay for things, they break very often.

So, we see all these behaviors happen that just are constantly, we’re seeing copper theft on the rise. We’re seeing obviously catalytic converter theft is back in a big way. It’s probably in its biggest surge since the nineties when it first became a thing. Overall cleanliness, right? People were having trouble these days. Staffing properties and staffing porters and housekeepers. Your curb appeal suffers. And then ultimately, whether it’s resident-caused behavior or criminal-caused behavior, you just see people unsecure, right? And insecure, should I say, in their living situation. And that leads to some of the more colorful reviews.

I, I don’t know about you, but at least once a quarter I get on Apartment ratings.com and I spend a couple hours just reading the Jerry Frager stories, right? Seeing all sorts of crazy things that surprise me every time I read them. So, I do think it that oversight matters, but also the proactivity of it, right? We get into deeper reviews around surveys and a lot of times people just throw marketing money at it, Patrick. And I know the marketers love that, but it’s a very expensive Band-Aid and it’s always a Band-Aid Um, I’ll just out-spend the problem, right? There’s a certain point, there’s this inflection point of spin versus return that you just can’t come back from. So, I know that was long-winded, but there’s dozen in the areas that, that this, these unwanted behaviors have derogatory impact.

Patrick Antram

So, knowing all of that, knowing the impact financially and just kind of understanding when you’re bringing up points that I think people, we, we have the multifamily operators and owners, you know, they have so many things going on. They need to be experts in so many things today. Not just the deal, right? But also, all these technologies and all these services and the residents changing behaviors, the employees are expecting different expectations. I mean there’s a lot on the plate of these operators. And so, I like it when we can lean on teams like yours because it’s like you want to have experts in your corner, right? That can bring attention to things that you may think are… no one’s asking you to solve this problem right now, maybe, right? But it’s a looming problem. You don’t tackle it.

Joe Curd

I think what’s interesting about it people is know these problems have impact, but they don’t draw the necessarily direct correlations to them. Right? I think that any other way…

Patrick Antram

It’s the, it’s the vitamin painkiller thing, right? Like it’s, it’s that’s right. What you should be doing versus what we need to constantly be reacting to.

Joe Curd

Yeah. To your point, it’s a very challenging industry, right? It’s a challenging space to work at properties especially. And I think that what I see more often than not is we like to take that rose-colored glasses approach and we like to focus on the things that we feel like we can control fundamentally and fully. So, I’ll give you an easy example there. When you look at resident retention surveys or amenity criteria that people look for as they shop for a new home, they always focus on things that are very controllable by the investors, right? In the architecture or services or amenities they have provided those residents. So, we constantly see things like “The number-one renewal factor is how well my service tickets in my maintenance is handled.” Or we see things like “The number-one thing I look for as I lease a new apartment is a gym on site, right? A free gym. We don’t ever hear anyone say, “I moved out because I felt unsafe.” Because no one wants to say that out loud, right? No one wants that. The same people that “I don’t have D properties. They’re C’s, I promise.” We have this rose-colored video…

Patrick Antram

They feel that’s offensive maybe, right? Like that their night, everybody’s naturally wants to be a nice person, you know, So…

Joe Curd

That’s right. They don’t want to self-admit, right? We don’t want to say, you know, to your point, I’m having to take the blood pressure medication because of this thing. And I do think to be very fair, multifamily does have very limited impact that they can have on the crime in their area.

That’s a much bigger problem that no one multifamily operator, maybe in the 18 hundreds when they had a little bit different, uh, disposal at, at different avenues to, to handle those issues. But these days absolutely not, right? They’re limited by police response; they’re limited by physical security.

And that really takes us to just talking some about what can you do preventatively, right? What can we do as we look forward? The first thing that I would recommend to any multifamily operator that has any sort of security issues is actually not security cameras.

Joe Curd

I believe in access control. I’m going to be clear in this. I’m not talking about gates. I think gates are an illusion of security in many cases. They get broken and ran into a lot. They’re expensive to maintain. And someone that’s on foot can walk around them. So, I’m not talking about gates, I’m talking about R F I D access controls. And the number-one thing that I would recommend to multifamily operators is create a sequence, if you will, of airlocks, right?

If we think about the way, and this is a terrible analogy, but why not? Let’s be colorful. If you think about the way a prison’s oriented, but they’re the opposite, right? We’re trying to protect the people inside. So, what does that look like? Well, if you’re a guest, you can get to the lobby, right? And if you’re, you get access past the lobby, you can get to the elevator.

If you get to the elevator, you can get to a door. And if you can get to a door you could be let in, right? Those layers of security provide us the access to have packages delivered in the right way to where the person that delivers your packages can bring your packages in, put them in a safe location. We see tons of mailbox theft, an amazing amount of mailbox theft. And I’ve seen people, I didn’t even know this was possible, you can just break into ’em with your bare hands. Because they don’t even require a tool. You just stick figures in pull hard enough and they open up the whole door.

So, people are starting to future- proof more in the asset structure and design their architecture. Put your mailbox behind a locked door, right? That’s an easy way. Put your cars behind as much security as your team.

So, we mentioned the gates earlier, they’re problematic. You’d be amazed how many cameras we sell because people were sick of the residents coming home late and running into the gate. And they want to be able to go back and chase, chase them for those damages. So that’s the first thing. And I think that the access controls lead to the capacity then to do self-guided tours, right? I think self-guided tours are brilliant, emerging technology. I think in 10 years that will be the only way we do it, for the most part. There’ll probably be some exceptions. So, I think that’s a huge play. We’re starting to see people use phone apps instead of the RFID chips themselves. The fobs. I would strongly recommend that as well. Now I, I want to cage this. Let’s be very diplomatic as we, we look at both sides.

I don’t want to say that these aren’t without their faults. Phone solutions require networks. We need Wi-Fi at the property, or we need good cell service. If someone’s phone’s dead and they’ll have to call after hours to get key access and there’s a charge. So, there’s still challenges with using technology. There are challenges with using smart locks on doors, right? Smart locks. The batteries die in them. So, you’ve got this new avenue of preventative maintenance. If you go down this path that’s going to have a sunk cost, right? You’re going to have a maintenance cost on that. And we’re talking about access control. So, you can’t defer this maintenance. You have to have in your budget, right? We have to change batteries periodically. You have to be aware. But the problem with the fobs specifically is it’s not very hard for someone to take one of those fobs, if they know what they’re doing and go copy them.

The same reason we don’t do master keys are the same reasons you want to be smart about fobs. Cameras and recordings. Obviously we, we’ve started the conversation talking about that. The first sin if you have cameras is to have cameras that don’t work. Okay? So, it goes back to that preventative maintenance conversation. I’ve worked extensively with maintenance. My father runs a big H V A C company, serves multi-family over in Atlanta. Maintenance people are not focused on keeping cameras up, guys. I hate to tell you. It’s just not in their daily routine. It’s not in their technical wheelhouse. So, we’ve had a lot of customers buy a camera solution from us and not use our help to maintain it. Um, so I would strongly suggest that if you invest in cameras at all, that you invest in a provider that can provide you preventative and proactive diagnostics on those devices.

The ability to ping them and make sure they work. So, people have had cameras for eight, 10 years now. They’re all older analog technology. It’s just simply not there. You can’t tell unless you’re looking at the screen itself. And like a lot of things in life, we don’t look at a closed-circuit TV system unless we think there’s a problem.

When you’re having a problem, when you’re in duress or there’s a situation, that’s a really terrible time to figure out that the camera you need pointed at that problem was broken, was de-active. So, I think that the first sin of cameras is not making sure your cameras work. The second sin of cameras is why would you have cameras if no one’s actually watching them? If you have these problem areas. And that really comes down to the crew of the, of this discussion, right?

Cameras used in a traditional method are reactive. Someone uses that as a tool to go back, review video clips, provide evidence to their insurance company or the police. Historically that’s what we’ve used them for. Well, at Stealth Monitoring, live video monitoring, we add one thing to the situation that makes it much better. We add speakers and these speakers are bullhorns. Okay? They’re loud. We can control the volume on them so we can set them to what I call clubhouse level versus pool level and kind of everything in between. Parking lot level is really intense because we can see about a hundred feet generally depending on lighting conditions.

So other things we can see pretty far with the higher technology cameras that are at now. And that speaker, I’m sure none of your listeners have ever gone into an apartment where they flip the light switch on and see roaches run away. But I’ve had that experience and the speaker does the exact same thing to people that are, that are creating trouble, right? There’s a canned message? So, it’s legally safe. You don’t want anybody ad lib on a speaker and have a discussion with someone. But we have a, we use a canned message that effectively lets them know that they’re committing the wrong behavior in a protected area and the authorities have been alerted.

Patrick Antram

Deterrent. Yeah,

Joe Curd

Absolutely. And it, it’s vastly effective. It doesn’t deter everyone, people that are pretty intoxicated, right? We see a lot of very intoxicated people in high-density homeless areas. Um, but I’ll tell you, it keeps them from sleeping on the doorstep.

Patrick  Antram

So, you, I think of like Las Vegas and so much of what’s safe on that strip and what’s not, when you step off it, it’s when you step off it as when you’re absent from these preventative things. That’s exactly, everybody just knows that you’re seen, and you know, you’re, it deters I would suspect. I don’t have the data on that. I’m, I don’t talk about what I don’t know, but my gut feeling is that people are more careful and they…

Joe Curd

They are right littering

Patrick Antram

Especially, especially

Joe Curd 

If you put it out there. We’ve got some solutions that are lit up and they look like a big red shield, right? And it’s in your face that someone’s watching. We’ve got some communities that use pretty large posters and then we’ve got other communities that really want to downplay that they don’t have anything. It’s not obvious at all. They’ve installed things in such a way that it, you actually have to look pretty hard to find the devices. But on your point, Patrick, I want to touch on something. I think the Vegas analogy is perfect, but you know, Stealth Monitoring really got its start in, in the northern Dallas, far north Dallas area in Addison, Texas, many years ago. And I’ve lived in this area the entire time, right? Places that I’ve gone to eat, grocery stores I’ve shopped at. As I joined south, I learned pretty rapidly that they were covering all this places that if you look at national crime averages, Plano, Texas, Frisco, Texas into that Dallas corridor, some of the safest dense suburban markets in the U.S. as far as high ratings for low crime and good quality of life.

But it was amazing to me to go around and really see all these places that I’ve spent a lot of time that we’ve been protecting all these years when I thought there was no crime around here to start out with. Right? Right. But maybe there’s a correlation, I’m not going to say it’s all Stealth, but it’s futureproofing against things that eventually will happen. And we see it. We have another division that secures construction projects. So, we’re used by a lot of multifamily operators for new development where we protect their properties against vandalism as they’re being built. We, we modify the camera solution as they break ground and go vertical and make sure that we’ve got line-of-sight. So those are really adaptive. We call that our mobile division because they’re constantly moving devices around to, to provide security. But the same areas that have the construction issues and security concerns are the exact same properties that end up using our solution long term as well, right?

Because that crime that affects your construction’s going to affect your grocery store is going to affect your long-term residents. So, it, I think at the end of the day people do see this capital outlay and they get a little shocked by it and they’re like, “Oh, you know, I, I want to do a camera system, but I have these other things my, I need to resurface my pool. I need a couple coats of paint on the south side of my buildings.” I think there are these common trends and people will end up putting this off sometimes until the, even the local city council like, “Hey, we’re going to pull your certificate occupancy if you don’t cut down the crime at your property. You guys are doing literally nothing to try to prevent drug use and after-hours behavior.” And we’re getting a lot of police calls and they draw that local attention, which depend upon your asset strategy and what your investment structure is, can affect your tax credits and all sorts of things.

You mean stability of the deal; Stealth does a couple different things to make that easier. But I think that the number-one to thing to think of is put it in your capital budgets, right? If you put these solutions in your capital budget, you invest in that infrastructure, it goes on your balance sheet in a positive way and it cuts down on your monthly costs. The good news is for the audience is if you want…

Patrick Antram

And do you help them develop those budgets?

Joe Curd

Like Yeah, absolutely. Yeah. So, you know, the biggest investment players that our, some of our biggest customers aren’t actually operators, they’re the investment houses, right? So, I spend a lot of my time talking to portfolio managers and asset managers that are looking for out-of-the-box solutions, but they don’t want to hire Blackwater SWAT team types, right? They want something that’s a little more nuanced, something that’s a little more subtle unless it’s needed.

But they’re just like every one of their peers, they’re looking to cut down that bottom line. So, I think that the easiest part of this solution is if you’re currently buying or spending money on guards, courtesy officers or patrols, we can either augment that or in many cases replace it over time. I don’t recommend an immediate replacement. What I like to do is put the security solution in there and let it start creating an effect. Because believe it or not, the criminals talk to each other, and they know where the soft targets are and where they’re not. And it’s so funny. We’ll install at a downtown LA property, and it creates this ripple effect, and we create kind of this, this no-go zone that people say, oh, don’t mess with that property over there. The speakers get sounded and then the police come. And because we’re a registered security company, the police take us pretty seriously.

So, in a lot of places where property manager will call and maybe they’ve crawl cried wolf too many times, and police were a little reluctant to go show up, they know that we will only call them crime in progress, danger, weapons present, theft in progress. And they actually love our help. We’ll stay on the phone with them, and we’ll flip between our camera views and help them find either where someone went and hid or where someone has kind of gone around a dangerous corner. We’ve seen incidents where we’ve helped their safety. So not only can we direct them to, to where they can solve the problem and get the apprehension that looks good on their KPIs, right? But also, we’re a trust department. The evidence is there. So, I think that’s a big piece of it is, invest in the technology. If you’re going to go this route, my strong suggestion is to invest in it.

Now we have structures, I’m sure competitors have structures where you can do kind of a, just a rental lease the equipment over time. It’s pretty painful on the Opex. It’s still better than security guards, right? Still much better. But you’re effectively amortizing the cost of the hardware over a long-term period. And it hits your monthly budget in a way that I would strongly recommend CapEx investment. A lot of people have legacy solutions. So, I think that the number-one piece of advice I could give anyone looking at live video monitoring is don’t call a camera installation company because they’re incentivized to sell you a bulk of cameras, right? If you hire a monitoring company to help you with that, that surveillance consultation, we’re going to put cameras where they have impact. We have a laundry list of known usual suspects, right? Common areas and different spaces that we’ve learned over time are really where you want to invest your dollars for your resident safety and your avoiding expenses.

But at the same time, we can also take advantage of anything that’s already been invested in. So, if there are some systems there in place, we’ll use those as best we can. We’re at the mercy of camera quality and in bandwidth. So, a lot of our decisions as we do projects are based on, is the technology current enough? Is it providing a good enough view that our trained operators can see what’s happening with enough detail, right? We don’t want to; we don’t want to cry wolf. We don’t want false alarms to police. We really want to avoid those. Too many of those can turn into fees and we don’t want to pay those, right? Any more than the operator at the property does. So, we want that quality solution in there, but a lot of times we can take advantage of legacy equipment.

Patrick Antram

Yeah, and there’s certainly a lot to think through here and it’s helpful to have a good guide, a good person that’s seen a lot of different scenarios and cases. And as Joe mentioned, the different architectural setups. You know, you can be really efficient and have that alignment from not just having someone interested in selling you cameras, but actually helping you get to the impact of your business objective, which is A, again, you’re driving your net operating income, but also you want to provide the best experience you can for your residents. We’ll put in the show notes, all the information on how you can get in touch with Joe. But Joe, is there any final thoughts you want to leave our listeners with?

Joe Curd

Um, just one, one we haven’t touched on is, as we look to the future, my, my best piece of advice to help investors save money in this realm is to put these solutions in during development. Make ’em part of your architectural plans from an expense perspective, retrofits or more expensive. From an aesthetics perspective, which I’m pretty particular about, curb appeal in operations, you really do want plan for it because you can put hide all your wires, you can make it tidy, you can make sure that your network solutions are really robust, and you can usually do it for about half the cost of doing it later. For all of you merchant builders out there, pay attention because it’s a very easy way for you to double up on some of your capital expenses as you build your projects. Easy way to, to turn profit.

Patrick Antram

Yeah, solid advice. I mean, you have that expense in place anyway and you are looking in development into the future. So, planning ahead is definitely something you want to do.

All right, well this has been an exciting show. I know that there’s a lot more opportunity and more continued conversations that people will probably want to have with Joe. But you can go to Multifamily innovation.com, you see this episode and more. And listen, if you are a multifamily owner operator and you have a portfolio of 1500 or more units, you might want to see what we’re doing with the Multifamily Innovation Advisory Council. Go to multifamily innovation.com, click on council where you can learn more about that. Tell then we’ll see you guys in the next show.

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Thank you for listening. We hope you enjoy the Multifamily Innovation Show. For show notes at other resources, visit multifamily innovation.com.