Host Tim Little and guest Kevin Gardner discuss how his company works on behalf of property owners & their management companies by negotiating with utility providers to enhance revenue and reduce expenses. Kevin spent nearly 20 years with Comcast, beginning with door-to-door sales to Vice President of Marketing and Operations. He shares his journey which lead him to starting Mulitfamily Utility Solutions where he now works on behalf of multifamily property owners to negotiate lucrative telecommunications access agreements with major providers across the country. Kevin shares his extense knowledge of the varying types of agreements and key information property owners should look for when buying multifamily assets.
00:00:00 – 00:01:57
Negotiating agreements with property owners
00:00:00 – 00:01:57
The speaker describes how they initially negotiated agreements with multi-family property owners regarding utilities, eventually encouraging owners to take these roles in-house and reduce reliance on third-party vendors. They discovered many property owners were unaware they could generate additional revenue from such contracts. The segment concludes with an introduction to the show ‘Journey to Multi-Family Millions’ and its host, Tim Little, who introduces guest Kevin Gardner, founder and president of Multi-Family Utility Solutions, a company that assists property owners in increasing revenue and cutting expenses through utility contract negotiations.
00:01:16 – 00:02:57
Introduction of guest Kevin Gardner
00:01:16 – 00:02:57
The discussion begins with an introduction to the book ‘Change Your Thinking Ignite Your Life,’ which focuses on the power of positive self-talk. Kevin, the guest, is welcomed and shares a brief overview of his background. He recounts a pivotal moment early in his career when he was choosing between two job offers after college, highlighting how that decision shaped his current company and journey.
00:02:22 – 00:04:42
Kevin’s career background and company start
00:02:22 – 00:04:42
The speaker describes their career path starting with selling cable TV door-to-door, eventually advancing to a VP of operations role at Comcast. Seeking an entrepreneurial spirit, they started their own company, initially acting as a third-party vendor for Charter and Comcast, negotiating agreements with multi-family property owners. Over time, as cable operators limited third-party vendors, the company shifted focus to representing property owners directly. They discovered many owners were unaware they could generate additional revenue from these contracts, leading to a rebranding as Multi-Family Utility Solutions, a company dedicated to helping property owners increase asset value.
00:04:09 – 00:08:13
Value of door-to-door sales experience
00:04:09 – 00:06:34
The speaker highlights the value of door-to-door sales as a fundamental learning experience in sales. Selling low-priced items door-to-door requires completing the entire sales process quickly, from introduction to closing, and teaches key skills such as overcoming objections, recognizing buying signals, handling rejection, and continuous self-improvement. Despite the hard work and challenging conditions, including starting in a difficult location like Fort Wayne, Indiana in winter, this experience proved pivotal for sales growth.
00:06:00 – 00:07:32
A personal story is shared about selling expensive Kirby vacuum cleaners door-to-door in rural West Virginia, illustrating the difficulty of selling high-priced products to low-income communities. Although the sales attempt was not successful, it provided insight into the challenges of direct selling and the importance of resilience. The experience also emphasized the social growth that comes from engaging regularly with different people.
00:07:03 – 00:08:13
Despite being naturally introverted, the speaker had to adopt extroverted behaviors during door-to-door sales, including being observant and reading social cues within customers’ homes. Noticing details like hobbies, pets, or pictures helped create rapport and find common ground, which are crucial skills for successful personal selling and building connections.
00:07:38 – 00:09:06
Shift to representing property owners
00:07:38 – 00:09:06
The speaker explains their transition from acting as a broker between cable companies and multi-family property owners to representing the property owners directly. They discuss the nature of negotiations over cable contracts and what benefits multi-family owners can achieve through these negotiations.
00:08:22 – 00:12:33
Importance of agreements for property access
00:08:22 – 00:10:06
The speaker explains a common misconception in multi-family property management regarding service providers like Comcast. While Comcast has the right to operate in public easements, they do not automatically have the right to access private multi-family properties. Property owners must grant permission through an agreement for providers to offer services to residents, even though the owner doesn’t pay the bill. This highlights the importance of owners understanding their role in granting access to service providers.
00:09:33 – 00:12:33
The discussion clarifies that tenants cannot unilaterally choose any service provider; they are limited to those approved by the property owner. Owners control which companies can physically access their property to provide services like cable or internet through hardwired connections. Multiple providers like Comcast and AT&T may have agreements allowing them to offer service, giving residents options. However, wireless services such as mobile internet or satellite are not restricted by property owners since they don’t require physical access to the property. Consequently, owners cannot demand compensation from satellite or wireless providers because those services do not use the owner’s facilities.
00:11:56 – 00:15:08
Lease rules on satellite dishes
00:11:56 – 00:15:08
The discussion focuses on whether a property owner can restrict tenants from installing satellite dishes like DirecTV on the building. It is advised that leases can prohibit tenants from affixing any structure to the property to protect the asset, rather than limiting tenant choice. This prevents potential damage such as roof leaks caused by improper installations. The conversation highlights the importance of clear lease terms to avoid costly repairs after acquisition. It then shifts to exploring how property owners can monetize negotiated contracts with service providers, using a hypothetical example of a 100-unit building.
00:14:26 – 00:16:53
Benefits of negotiated contracts for owners
00:14:26 – 00:16:53
The speaker discusses the concept of ‘provider of choice’ as a way to frame agreements that allow multiple service providers, like Comcast and AT&T, access without limiting choice. They explain that many older agreements from the 1980s and 1990s in telecommunications were often informal, unregistered, or unrecorded, especially as companies changed hands. If no current agreement can be found, the approach is to establish a new agreement rather than accuse anyone of unauthorized presence. Most of these agreements typically last about 10 years, so if a property is older, the original agreement may have expired, creating an opportunity to negotiate new terms.
00:16:14 – 00:20:51
Exclusive vs non-exclusive marketing agreements
00:16:14 – 00:18:10
In 2022, a ruling was passed emphasizing resident choice by prohibiting exclusive agreements that block other providers from a property. Instead, exclusive marketing agreements are allowed, where a provider like Comcast can be promoted as the preferred service in exchange for compensation. This includes a one-time lump sum payment and ongoing revenue share paid quarterly based on the revenue generated from residents who pay for their own service.
00:17:32 – 00:19:09
The revenue share payments continue even if the property is sold, transferring to the new owner. The service provider offers assistance in transferring these agreements seamlessly during property sales. Additionally, non-exclusive marketing agreements are an option, allowing multiple providers to pay for marketing presence on the property, giving residents more choices without exclusive promotion.
00:18:38 – 00:20:25
Non-exclusive agreements may involve multiple providers like Comcast and AT&T, promoting choice without exclusive positioning, which results in lower payments to the property. However, if residents are already split between providers, continuing non-exclusive agreements can be more beneficial than attempting to convert everyone to a single exclusive provider due to lower turnover and steady revenue from multiple sources.
00:19:47 – 00:20:51
Exclusive marketing efforts typically focus on times of tenant turnover, using promotional materials from only the exclusive provider in the leasing office. This strategy maximizes impact during move-ins, reinforcing the exclusive marketing agreement’s value when units are turned over.
00:20:18 – 00:23:41
Marketing support from providers
00:20:18 – 00:21:56
The discussion focuses on supporting marketing efforts for property owners beyond just negotiating rates. It emphasizes tracking revenue share payments to evaluate marketing effectiveness. Larger providers often assign sales representatives to regularly visit properties, ensuring marketing materials and product availability are up-to-date, which helps maintain and grow revenue share.
00:21:23 – 00:23:41
Sales reps from providers like Quantum Fiber visit partner offices to ensure proper information distribution and address questions, aiding revenue growth. Property management may also hold events with booths dedicated to exclusive providers to promote their services. While leasing agents help revenue share growth, maintaining high occupancy is prioritized since it directly impacts revenue share. The conversation concludes by questioning the minimum property size where pursuing these strategies becomes beneficial.
00:23:04 – 00:25:15
Property size and opportunity for savings
00:23:04 – 00:25:15
The speaker discusses the importance of having at least 20 units to create buying opportunities, with 100 units or more considered the ideal ‘sweet spot’ for negotiating better deals. They explain that smaller properties may not receive as much attention, but combining smaller portfolios can increase buying power by leveraging a larger collective number of units. Additionally, the speaker highlights their service’s ability to help reduce expenses, not only for property owners but also potentially for tenants, through negotiated rates.
00:24:42 – 00:29:58
Bulk contracts and expense savings
00:24:42 – 00:27:16
The discussion covers two types of contracts for cable and internet services in residential properties. The first type is where residents pay individually and the owner only helps with marketing, bearing no financial liability. The second type is a bulk contract, where the property owner purchases services in bulk and provides them as an amenity, often at a discounted rate to residents. This can generate some profit for the owner but also involves financial risk as they are responsible for all units regardless of occupancy. Bulk contracts are more common in A-Class properties where residents expect more amenities and price sensitivity is lower.
00:26:38 – 00:28:32
The conversation shifts to potential savings in other utilities such as electric, gas, and trash removal, which depend heavily on the property’s market and size. Larger properties in deregulated energy markets, especially those with higher electric usage due to amenities like common areas and workout facilities, may achieve noticeable savings. However, smaller properties typically see less benefit. The approach involves evaluating each property individually to identify possible revenue or expense savings.
00:27:54 – 00:29:20
Each property is unique, influenced by market conditions, nearby employers, and other factors, affecting utility savings potential. The speaker mentions a recent example of a 29-unit property in Cleveland, Ohio, where they systematically assess possible savings opportunities. They offer a no-obligation, free initial assessment where property details are reviewed to recommend actionable solutions, helping owners understand what might work best for their specific circumstances.
00:28:54 – 00:29:58
The final segment reiterates that not all cost-saving solutions apply to every property type. Bulk contracts carry risk as owners must cover all units, including vacant ones, potentially impacting net operating income. The suitability of such contracts varies by property class, with A-Class properties being better candidates due to lower vacancy risk and higher demand for amenities. The discussion emphasizes careful evaluation before implementation.
00:29:26 – 00:34:36
When to engage for assessments
00:29:26 – 00:31:26
The discussion emphasizes the importance of engaging early in the property acquisition process to identify opportunities and potential issues. Early involvement allows advisors to influence decisions before contracts are finalized, potentially improving deal outcomes. The conversation highlights how due diligence can uncover significant factors affecting income, such as existing service agreements, which many investors might overlook.
00:30:54 – 00:32:29
The speaker explains the risks of not reviewing existing bulk service agreements like cable or Internet contracts during property purchases. Buyers may unknowingly inherit these liabilities, which could have financial implications. However, if caught early, buyers can negotiate to have the prior owner buy out or terminate such agreements, mitigating future costs.
00:31:55 – 00:34:03
The conversation continues with examples of how knowledge of existing agreements can provide leverage in negotiations, such as claiming a prorated portion of upfront payments made by previous owners. Even if the seller refuses, having this information offers bargaining power. Identifying such details is crucial because they affect underwriting and the financial viability of a deal, either by revealing hidden expenses or uncovering missed benefits.
00:33:32 – 00:34:36
The segment concludes with the host acknowledging the valuable insights shared and transitions to a rapid-fire question round. The first question posed is about identifying a key red flag investors should watch for when told there is no contract, setting the stage for practical advice in the following discussion.
00:34:04 – 00:35:35
Red flags and myths in contracts
00:34:04 – 00:35:35
The speaker emphasizes the importance of thoroughly investigating contracts, noting that many contracts might be overlooked, especially if previous owners did not uncover them during due diligence. They highlight the misconception that if a service is free, a contract is unnecessary, stressing that having a contract is valuable and important. The discussion concludes with a question about the speaker’s definition of success.
00:35:04 – 00:37:48
Kevin’s view on success and contact info
00:35:04 – 00:37:04
The speaker discusses success as an ongoing development process rather than a fixed achievement. They emphasize that success is a continuous journey tied to learning, growing, and helping others. Drawing inspiration from a Dave Matthews song, the speaker highlights the importance of understanding one’s purpose in life and finds success in educating new investors about opportunities.
00:37:04 – 00:37:51
The conversation continues on the theme that success involves continuous growth and never-ending learning. Kevin shares his contact information and explains that his company, Multi-Family Utility Solutions, operates on a commission basis, ensuring no upfront costs for clients. He invites listeners to reach out for assistance and evaluate if their services are a good fit.
00:37:23 – 00:37:48
The host thanks Kevin for his participation and expresses excitement about his future success in the multi-family investment space, concluding the segment with positive encouragement.
