Subscribe via:
Show Summary
In this episode of the Real Estate Pros podcast, host Erika speaks with Rachael Munkwitz, a leader in the multifamily real estate space. Rachael shares her journey from teaching to real estate, the growth of Palm Communities, and the importance of leadership and team development. She discusses the opportunities in the multifamily market, the challenges faced during hurricanes, and her vision for the future of Palm Communities.
Resources and Links from this show:
-
Listen to the Audio Version of this Episode
Investor Fuel Show Transcript:
Rachael Munkwitz (00:00)
my goodness, so many, so many. Well, we did get hit with back to back devastating hurricanes exactly one year ago.we had over 100 units taken offline overnight last year, which is a lot for us. It’s devastating. I mean, we had people.
who literally lost everything. They didn’t even have the clothes on their back. And I’m talking about our tenants.
my team mobilized, like I have never seen before. I didn’t even need to ask them. They just stepped up and
We were able to relocate 60 of those 100 families like immediately within within two days to other units we had available.
Erika (02:15)
Hey everyone, welcome to the Real Estate Pros podcast. I’m your host, Erika. And today I’m excited to be chatting with Rachael Munkwitz. She’s been shaking things up in the multifamily space with Palm communities. Rachael, I’m glad to have you on the show today.Rachael Munkwitz (02:33)
Thank you, Erika. I’m excited to be here.Erika (02:36)
Yeah, yeah. So, you know, let’s jump on in for our listeners who aren’t familiar with your world or your story. Can you tell us how you got in the real estate?Rachael Munkwitz (02:48)
Yeah, absolutely. So I actually come from a teaching background. I was an inner city teacher with Teach for America recruited fresh out of college. had a politics degree, which was ⁓ less than useless in the economic climate back then. I always kind of wanted to go into real estate, but I got offered this teaching job and it was guaranteed. So I did that for five years. And then ⁓when I decided I didn’t want to be a teacher long term, I went to study to be an appraiser because I love numbers, I love the analysis, I love looking at whether or not an asset is going to be profitable or a good investment. Loved, loved, loved that, did all the training and worked under an appraiser short term. And then I got this part-time leasing gig with the startup, startup management company called Palm Communities.
and was hired on as the very first employee. And it was just 16 units, one building on Davis Island here in Tampa. And ⁓ there was no one else, it was just me. So I helped to create, I was everything. I was the maintenance person, I was the leasing agent, I was the property manager. And slowly, I built all the procedures, I ⁓ built all of the policies.
and kind of was able to create a structure that allowed us to take on more assignments. And slowly, we just kept getting more more client referrals, we got larger, we were able to hire more people. And I kind of just moved up as we got more assignments. And fast forward to 2020, I became a full partner and I now own the company.
Erika (05:25)
Yeah, wow, that is so exciting and what a journey. got to be, you know, that in itself is an awesome achievement, but I’m just thinking about people who are getting, you know, started and how, you know, exciting it is to hear your story. Rachael, when it came to building up the company, scaling it, were there systems or tools that you found to be a game changer that, you know, allowed that growth to happen?Rachael Munkwitz (05:54)
Yes, absolutely. ⁓ coming again, coming from a teaching background, I owe it all to my time with Teach for America because they really ⁓ just really change your mindset. A lot of times we think we’re being clear and we think we’ve trained someone on how to do something well. And then you turn around and you realize they have no clue what you just said or how to do it. So really clear training isprobably the most important system that we have. We do, I mean, not to sound like an elementary school teacher, but we do the I do, we do, you do method, which means I model what it is that I want you to do, and then we do it together, and then I watch you do it solo. So that’s a very important training technique that we have here, and that is a game changer. Like we do not hand over any tasks to new people that haven’t done it before without walking through that process.
So that’s the biggest one. Another one that’s kind of a game changer is we make sure all of our pay bonus and incentives are aligned with our clients’ interests. So we’re third party property management, meaning we work on behalf of our clients who own the assets that we manage. So we make sure the way we pay and compensate our team incentivizes them to have the owner’s best interest at heart. So I’ll give you an example.
We make sure we have key pads on every single door. Why do we have key pads? They’re expensive. Well, we have key pads because it saves the owners a lot of money. We don’t have to pay to rekey locks when tenants move out. We don’t have to pay maintenance to go out there to change a lock or to issue a new key if the tenant loses their key. And a lot of our competitors, they hate the locks because they can charge a rekey fee.
and they can charge lockout fees. And that’s just not something we do here. There’s a very easy fix to save the owner’s money. We’re going to implement that fix because we need our interests to be aligned. ⁓ All of our bonuses and pay structure are tied to performance that are directly aligned with our client’s interests. So we do a quarterly bonus structure ⁓ with our team that is based on meeting certain goals that are in the client’s best interest. Sometimes it’s retention.
Sometimes it’s ⁓ occupancy, sometimes it’s increasing NOI, whatever it is, everyone’s pay is directly tied to winning on behalf of our clients. And that is extremely, extremely important. ⁓ I’ve seen other operators that are completely the opposite. For example, some operators charge a larger fee to ⁓ lease a unit to a new tenant.
and they charge a lower fee for renewal, which makes sense, right? If you’re just renewing for a current tenant, it’s not a lot of work. It’s only, you know, all you do is send the lease, whereas it’s a lot more work to go out and find another tenant so you can charge more. We don’t do that. We charge the same and we pay our staff the same because we don’t want to incentivize them to go get another tenant. It costs the owner a lot of money. There’s downtime, there’s turn costs.
and it just doesn’t make sense to pay us or the team more for something that is against our client’s interest. So those are just two examples. We always kind of have that ownership mindset and make sure that we’re aligned in every single thing that we do.
Erika (09:26)
Absolutely, you know some of those examples that you gave there, you know, it’s the win-win-win type setup and that’s what you want in this industry.Rachael Munkwitz (10:11)
100 % has to be win-win. And we have to gain the trust of our clients. At the end of the day, they’re giving us most of the time the biggest asset they have, and they’re entrusting us to be their principal and to treat it like our own. So we have to have that ownership mindset because we have to think like them and we have to make decisions based on what they would want.Yeah, we look for alignment in every single thing that we do.
Erika (10:43)
Yeah, yeah. And so much of what you talked about, Rachael, the importance of leadership comes up. Can you share what being a good leader means to you and what that looks like?Rachael Munkwitz (10:55)
yes, I’m so glad you asked that. so passionate about this. ⁓ leadership makes or breaks every single institution, industry, it doesn’t matter what it is, it doesn’t matter if it’s government, a classroom, or a private business, you must have strong leadership or you’re not going to be able to do big things. It’s just not possible. So this starts grassroots at the hiring process. One of the things we look at and we have aWe have a seven step hiring process with a minimum of five interviews, which I know sounds grueling, but it saves us a lot of time and heartache after hiring if we find out a month in that the person we only interviewed one time is not a great fit. So we do have a pretty grueling hiring process. We try to make it fun and engaging, but one of the things that we look at is leadership potential. Every single person we hire here has to have leadership potential.
We, like our structure is not to keep anyone in the same role for years and years and years on end. Every role is a training role for the next role. And if the potential is not there to move that person up eventually, they’re not a good fit. This is not a company where you can just kind of dial it in and get comfortable. We’re constantly pushing you, exposing you to new tasks and new ideas.
that aren’t necessarily part of your role, but we still want you to experience them so that we can better prepare you for what’s ahead. So that’s the first thing is to always have advancement in mind. The second thing is we have a bi-weekly leadership book club that everyone is invited to. It’s completely voluntary. It’s before work starts. And we read through leadership books and we talk about them.
⁓ That has been a huge game changer here. People that I didn’t see as much leadership potential in them have shown up and been able to give input and ideas and also grow. And ⁓ it’s been huge. on our surveys, that’s one of the things that our team mentions as one of their favorite things about working with Palm is that they see we are interested in investing in them, not just career-wise, but personally. We want everyone to grow as a person.
and their future leadership potential. So those off the bat have been extremely influential here at Palm. I am proud to say that we are definitely raising up the next generation of leaders in this multifamily industry.
Erika (13:34)
That’s really exciting and I know that you see a lot of opportunity out there so it’s important that you are building up this team and preparing them for the next level. Rachael, in your area, what specific opportunities are you seeing in the multi-family space?Rachael Munkwitz (13:53)
I am seeing a lot more institutional buyers, REITs, and private equity looking to invest in Greater Tampa Bay. They’ve always been there, ⁓ but a big percentage of the market has typically been local, high net worth individuals, and we’re actually seeing a lot more external buyers come in. ⁓ I’ve had a lot more consultations in the last year from peoplenot even with a deal in mind yet, that just want to talk to us to see what we think about the market, to kind of pick our brain for data trends and rental trends and occupancy trends because they want to invest here in Florida and
none of them are local. So I think ⁓ the external competition is about to get even more fierce than it has been.
Erika (15:32)
in mind, how do you navigate that in your position?Rachael Munkwitz (15:38)
you know, property management is a all it’s a relationship business, right? It’s it’s it’s a relationship. So we just give away a lot of free advice to be candid. People call and it might not ever amount to anything giving them an hour of my time to look at their data or to look at a deal and give them my opinion from an operations standpoint. But a lot of them come back around, you know, and I’m a firm believer in you get what you give.So just making ourselves available as the local experts to those who are looking to get into this space has been tremendous. It’s taking up a lot more of my time, but it’s also really fun and very rewarding and I enjoy it. But I think that’s gonna be the ⁓ most important way that we grow in terms of number of units and assignments in the future.
Erika (16:35)
Absolutely. And being an expert usually also means that you’ve seen a thing or two. Maybe a deal has gone sideways. Maybe there’s been an issue with the tenant or you know, maybe you have a story with your own investment experience. Can you share one of those moments on your journey and what you learned from it, Rachael?Rachael Munkwitz (16:41)
Thank you.my goodness, so many, so many. Well, we did get hit with back to back devastating hurricanes exactly one year ago. And if you know anything about Tampa Bay, ⁓ we have a lot of flood zones here. And so we had over 100 units taken offline overnight last year, which is a lot for us. It’s devastating. I mean, we had people.
who literally lost everything. They didn’t even have the clothes on their back. And I’m talking about our tenants. They didn’t even have their cars, because their cars all flooded out and they couldn’t leave. They couldn’t go anywhere. FEMA was backed up. It takes weeks, if not months to get insurance payouts. But my team mobilized, like I have never seen before. I didn’t even need to ask them. They just stepped up and
We were able to relocate 60 of those 100 families like immediately within within two days to other units we had available.
We got them whatever we could. We partnered with my church. We partnered with some other local charities to get them air mattresses, sheets, whatever we could scrounge together for them to at least get them off the street and somewhere safe.
And then we partnered with FEMA and all of their rental insurance companies to ⁓ get their claims submitted very quickly. And then we partnered with any rental assistance agencies we could to get their rent covered. And every single person that was displaced, we were able to offer them somewhere else. Now, some of them chose to do something else. Like some of them chose to go move in with family or relocate somewhere else.
everyone that needed a place, we were able to get off the streets and into a unit almost overnight. So I’m extremely proud of that. That was definitely one of the highlights of my career. And I didn’t do that. I mean, I was there like leading the charge, but that was all my team. mean, they till 11 PM. We’re coming in at five in the morning. Over weekends, holidays, it didn’t matter to get it done. And I’m just, I’m so proud.
Erika (19:16)
Yeah, and that is a testament right there to the leadership and how you are helping everyone at your company grow. That’s amazing.Rachael Munkwitz (19:27)
They’re incredible. I have the best team in the whole wide world. They’re incredible.Erika (19:33)
So Rachael, what would you say is next on the horizon with Palm communities?Rachael Munkwitz (19:39)
Well, that’s a great question, Erika. ⁓ You know, I don’t have any huge, big restructuring plans ahead. I kind of want to just, and this is a boring answer, but I kind of want to just be even more excellent in what we’re already doing. I want to continue to invest in our leaders. I want to grow slowly, get more units year over year and just have consistent growth and be able to offer more jobs to people.I love what we do. I love the third party management space. We are in a great position to take on some larger assignments. So historically our average unit count per site is right around 30 units per site. This year, and this is actually a fun story. So we started with a client back in, I believe it was, I’m gonna say 2019. And we started with one seven unit building.
with this client and we managed it well here in Tampa. They also bought a 24 unit and another 14 unit in that time. And this year in January, that same client, we did a great job as operators. told us, Rachael, you guys are doing so amazing at Palm. I’m gonna keep investing here in Tampa because I finally found a great operator. In January, he closed on a 189 unit property.
which is more than double any assignment we’ve ever taken over. And I’m proud to say we are an operator of a large apartment complex in St. Petersburg, where we actually have our St. Pete office located out of. So that was huge and amazing. And we are actually in a position now to take on larger assignments because we have the leadership, we have the structure.
and we have the capacity to grow. So I’m very excited for more assignments like that.
Erika (21:39)
Yeah, wow, absolutely. And you’ve got the foundation in place for that to be a game changer.Rachael Munkwitz (21:46)
Yeah, yeah, very excited.Erika (21:49)
And Rachael, for our listeners here, if they want to connect or learn more about Palm communities, how can they reach you?Rachael Munkwitz (21:57)
Yeah, absolutely, you can go to our website, rentpalm.com forward slash y and you can read my bio and all about POM. You can also email me, Rachael, R-A-C-H-A-E-L at rentpalm.com and I would love to hear from you.Erika (22:14)
Excellent. Well, Rachael, I appreciate you coming on the podcast here, sharing your story, your journey and everything going on at Palm communities. It really is something to be proud of.Rachael Munkwitz (22:26)
Thank you so much, Erika. I really appreciate it.Erika (22:29)
Thanks again for being here. And for our listeners, if you got value from this episode, make sure that you’re subscribed to the real estate pros podcast. We’ve got more conversations lined up with pros like Rachael, who are out there building fantastic real estate businesses. We’ll see you on the next episode.
