Property operations
The Maintenance Systems That Add Millions to a Multifamily Portfolio
Standardized supplies, bulk buying, matched appliances, and water savings: practical operations that can improve income across an apartment portfolio.
Most investors spend all of their energy on the buy. They obsess over the offer, the structure, the seller conversation, and then, once the building is theirs, they stop paying attention. That's backwards. Some of the most valuable things I know in real estate happen after closing, in the operations, in the boring rooms nobody films.
Our 144-unit and 80-unit apartment communities offer concrete examples of the maintenance systems we use. Small recurring costs matter at portfolio scale. Saving $10, $20, or $30 per unit each month can materially improve net operating income, provided the savings don't come at the expense of necessary work.
Related reading: Why $50 Per Unit in Savings Is Worth $5 Million to Me
Here's what those little things look like in the field.
Standardize Everything, Buy It in Bulk
One of the biggest savings available to you is standardizing every item across every property in the portfolio.
Every storage room in our portfolio should be organized, inventoried, and stocked. We keep replacement toilet valves, sink components, countertops, smoke detectors, and other recurring supplies available. Buying commonly used items in bulk helps the team complete repairs without starting a new shopping trip each time.
That matters for two reasons. First, the per-unit cost of a part you buy 200 of is not the per-unit cost of a part your maintenance tech grabs at a hardware store on a Tuesday. Second, when your buildings all use the same valve, the same faucet, the same smoke detector, your team never has to diagnose a new system. They already know what's behind the wall and they already have the replacement on the shelf.
Here's the math I run on it. Across over 600 units, our overall goal is to save $50 per month per tenant by buying things in bulk and staying on top of maintenance. That's $360,000 a year. In the seven cap markets we invest in, that's over $5 million of value added through good operations.
Related reading: Why I Started My Own Property Management Company Across 600 Units
Five million dollars of value, created in a storage room. That's the whole argument for taking operations seriously.
How We Actually Update a Unit
A common question I get is how we update units: how do we know what to do when we walk into one?
The biggest thing people notice is how clean a unit feels. So we almost always come in and touch up all the paint. In the unit I walked through, the walls were all freshly painted, and we go with the same neutral color on every single property in the portfolio. Exact same paint job, portfolio-wide. That's standardization again: one color, bought in volume, no decisions to make.
Cabinets are the other good example. We don't replace them if they don't need to be replaced. For a property like the one I was standing in (low income, workforce housing) we still want it to feel really nice, and cabinets like those are going to be perfectly fine. We may come in and add handles to more of them, because I do like that. Once they get a little beat up, if they're looking worn or tired, we have a darker paint that will cover them. They'll all look beautiful, we renew them, and we get a lot of these things to last and look good for a really long time.
Replacing what doesn't need replacing is one of the fastest ways to burn a renovation budget.
Match the Appliances (and Skip the Stainless)
If you've watched this channel for any amount of time, you know I love it when all the appliances match. It's the most important thing.
When I update a unit: white dishwasher, white fridge, white range, white microwave. That's correct.
Don't do stainless steel in a base level property. If it's entry level or workforce housing, go white or black, uniform all the way through. A mismatched kitchen reads as neglected no matter how clean it is. A matched kitchen in a modest finish reads as cared for. Same money, different perception, and perception is what a resident is paying rent against.
The little things really matter.
Water: The Expense You Can Actually Engineer Down
Water is where a lot of the savings live, and it's also where a lot of investors accidentally wreck their tenant experience.
Part of my project on that visit was going through all of our toilets. We want to make sure we don't have really high flow toilets: when you have hundreds and hundreds of toilets across your units, the 3-gallon flush adds up. But I also don't want crappy low-flow toilets, because then people flush multiple times and it ruins the tenant experience, and you don't even save the water.
What we want is a pressurized 1.28-gallon flush. It feels like a normal toilet, and it uses a lot less water. So the work that day was verifying all of our toilet models against that standard.
Bathroom sinks are the same idea. A small pressurized aerator added to a unit lowers the actual amount of water used while increasing the perceived pressure. The little things you add unit by unit make the unit feel better and cost a lot less at the same time.
That's the test I apply to every water upgrade: does it cut the bill without the resident noticing a downgrade? If it cuts the bill and the resident notices, you didn't save money: you traded a utility line item for turnover.
When you're billing utilities back to tenants, this compounds. Lower bills for them means they can keep paying higher rent and stay around longer.
The $10 Tool That Protects Your Plumbing
The last thing I showed on that walkthrough is a little PSI tester (about $10 on Amazon) and this thing can make you a ton of money on any of your buildings.
It tests the water pressure for the whole building. I've had buildings where the pressure runs 100 to 110 PSI. What happens then is that you shut the water off, turn it back on, and it blows pipes at any right angle turn in the pipe.
What I'm looking for is 55 to 60 PSI. If you're over that, what you install is a pressure release valve. You do need a license to do that, and the valves run around $300: against a $10 tester. On the building I tested, we were sitting at exactly 60 PSI, right where we want to be, which told me I didn't need to do that project there.
When you do need it and you install it, all of your appliances work better, your building uses less water, and you have significantly less plumbing maintenance. That's a $10 diagnostic standing between you and a flooded stack.
Why Proximity Still Wins
The reason I can do any of this is that I get on site.
This is why I'm such a huge fan of buying within driving distance. Abilene, Texas is about two and a half hours from me. Is that in my backyard? Not really. But is it something I can get out and touch, get my hands on, and generate outsized returns for my investors because of my proximity? Yes.
It's the little things that make the big money, and at scale the numbers genuinely get ridiculous.
Key Takeaways
- Standardize parts, paint and appliances across the whole portfolio and buy in bulk. Across 600+ units, saving $50 per tenant per month is $360,000 a year: over $5 million of value in a seven cap market.
- Don't replace what you can renew. Fresh neutral paint, touched-up cabinets and added handles do more for how a unit feels than a gut kitchen.
- Match every appliance. White or black, uniform, in entry level and workforce housing. No stainless in a base level property.
- Target a pressurized 1.28-gallon flush and add pressurized aerators. Low water use, normal-feeling pressure, no hit to resident experience.
- Test building water pressure with a $10 PSI gauge. Anything above 55 to 60 PSI calls for a pressure release valve (around $300, licensed install) and saves you blown pipes.
- Buy where you can drive. Proximity is what makes hands-on operations possible in the first place.
Watch the full walkthrough above to see the storage room, the unit standards, the toilet spec and the PSI test done live at the 144-unit and the 80-unit. If you want the acquisition side of this (the real structures behind deals like the ones in this video) "The Book on Creative Real Estate" is out now. There's a free course on getting started in multifamily investing, a free community that includes a deal calculator, and details on the mentorship if you'd rather work through this with me directly. More operations videos in this series are on the way.
Read the episode transcript
0:00 Hello and welcome back to multif family 0:02 strategy. I am going to be sharing a ton 0:04 on how you make [music] money in the 0:06 operations. This is some of the most 0:07 valuable things that I know in real 0:09 estate. I'm going to do my best [music] 0:10 to do it from the field. Today you're 0:12 going to join me at the 144 unit [music] 0:15 and at my 80un apartment building. We're 0:17 talking about maintenance. We're talking 0:18 about the actual strategies [music] 0:20 that we implement in my PM company and 0:22 in my portfolio that make [music] us 0:24 millions of dollars. And I actually do 0:26 mean these make millions of dollars. If 0:28 you can save 10, 20, [music] $30 per 0:31 month per tenant as you're building your 0:32 portfolio, the numbers get ridiculous 0:35 and it's the little things. So, today I 0:37 actually go through and I talk about 0:38 some of the water conservation methods 0:41 that we use that cut down on our bills 0:43 or when we're building back to tenants, 0:45 cut down on our tenants bills, [music] 0:46 which keeps tenants paying higher rent 0:48 and staying around longer. Check it out. 0:55 [music] 0:57 So, one of the biggest savings you can 0:58 do is actually standardizing all of your 1:00 items across every property in the 1:02 portfolio. We're in one of our storage 1:04 rooms. Everyone should look more or less 1:06 like this, but you want to keep 1:07 everything very organized and go through 1:09 [music] and keep all of your stuff on 1:10 inventory. So, in here we have our 1:13 different toilet valves. I maintain, 1:15 [music] you know, different pieces for 1:17 sinks, countertops, smoke detectors, but 1:20 everything is always kept [music] in 1:22 stock. We buy everything in bulk. It's 1:24 the little savings that allow you as a 1:26 larger investor [music] to save a lot of 1:28 money. Our overall goal is over 600 1:30 units, save $50 per month per tenant by 1:33 [music] buying things in bulk, staying 1:34 on top of maintenance. Ultimately, that 1:37 equals $360,000 a year. Or in the seven 1:40 [music] cap markets we invest in, over 1:42 $5 million of value added through good 1:45 operations. [music] But it's the little 1:46 things like rooms like this where you 1:48 make the $5 million. 1:52 [music] 1:53 Common question is how do we update 1:55 units? How do we know what to do when we 1:57 enter a unit? The biggest things that 1:59 people notice is [music] how clean it 2:00 feels. So, we almost always will come in 2:02 and touch up all the paint. I don't know 2:03 if you can tell in this video, but the 2:04 walls are all freshly painted. We go 2:06 with the [music] same neutral color. 2:07 Every single property in the portfolio, 2:10 exact same paint job. This is another 2:12 fantastic example. Cabinets. We don't 2:14 replace them if they don't need to be 2:15 replaced. Especially for a property like 2:16 this, it's low income. We still [music] 2:17 want it to feel really nice. Cabinets 2:19 like these are going to be perfectly 2:20 fine. We may come in [music] and add 2:22 handles to more of them cuz I do like 2:24 that. But once these get a little bit 2:26 beat up, if they were looking worn or 2:28 tired, obviously these [music] look just 2:29 fine. We have a darker paint that will 2:32 paint them up. They'll all look 2:33 beautiful. We'll renew them. We can get 2:35 a lot of these things to last and look 2:37 good for a really long time. And [music] 2:39 if you watch this channel for any amount 2:40 of time, you know I love it when all the 2:42 appliances match. It's the most 2:44 important thing. So when I update a 2:45 unit, white dishwasher, white fridge, 2:49 white range, white microwave, this is 2:51 [music] correct. Don't do stainless 2:53 steel in base level property. So if it's 2:55 entry level [music] or workforce 2:56 housing, white or black, uniform all the 2:59 way throughout. The little things really 3:01 matter. By the way, it is finally out. 3:03 The book on creative real estate. The 3:05 link is below. You can actually pick 3:06 this up right now, but it's how I bought 3:07 deals like this one and deals all over 3:09 the country. I go through the actual 3:11 stories, the structures, but this isn't 3:14 theory. This isn't some [music] gimmick 3:15 or a one-sizefits-all strategy. It's the 3:17 actual strategies that I utilized and 3:19 how they were implemented to close every 3:21 single deal. You can check it out on 3:23 Amazon right now. Links below. All 3:25 right. Well, welcome to the bathroom. 3:27 Part of my project today is I'm actually 3:28 going through all of our toilets. We 3:29 want to make sure that we don't have 3:30 really high flow toilets. When you have 3:33 hundreds and hundreds of toilets in all 3:35 of your units, [music] the 3gallon flush 3:37 is not always awful. also don't want to 3:39 have crappy lowflow toilets cuz then 3:42 people would flush multiple times and it 3:43 ruins your tenant [music] experience. 3:44 What we're doing today is verifying all 3:46 of our toilet models. What we want is a 3:48 pressurized 1.28 [music] 3:51 gallon flush, which means it will feel 3:52 like a normal toilet. However, it will 3:55 use a lot less water. If you get 3:57 substantially cut down on water, which 3:59 we'll be testing water pressure and 4:01 appliances today [music] is bathroom 4:03 sinks. A small little pressurized air 4:05 raator added to a unit like this one 4:08 right here will actually lower the 4:09 actual amount of water while increasing 4:12 the perceived pressure. So the little 4:14 things that you add unit by unit will 4:16 actually make them one feel better but 4:19 two cost a lot less. Huge savings 4:22 available if you do this right. 4:31 This is a little PSI tester. I'll 4:33 actually link this below on Amazon. This 4:34 thing can make you a ton of money on any 4:36 of your buildings. [music] So, what this 4:37 is doing is testing the pressure for the 4:39 whole building. I've had some buildings 4:40 where the pressure is 100 to 110 PSI. 4:42 [music] We shut off the water, we turn 4:44 it back on, blows pipes at any right 4:47 angle turn in the pipe. [music] What I'm 4:48 looking for is 55 to 60 PSI. If you're 4:51 over that, what you install is called a 4:54 pressure release valve, which we would 4:56 add right in here. You do need a license 4:58 to do that, but the valves are like 300 5:00 bucks. This tester is like $10 on 5:03 Amazon. Now, what I'm seeing here is we 5:04 are exactly at 60 PSI, which is where we 5:07 want to be. So, that's telling me that I 5:08 do not need to do this project here. 5:10 But, if you implement [music] that on 5:11 these buildings and they need it, all of 5:13 your appliances will work better. Your 5:15 buildings will use less water and you'll 5:17 have significantly less plumbing 5:18 maintenance. 5:22 [music] 5:23 So, in conclusion, to kick off our 5:25 maintenance series, it's getting on site 5:27 and doing the little things. This is why 5:29 I'm such a huge fan of buying within 5:30 driving distance. Now, Abalene, Texas is 5:32 about 2 and a half hours away. So, is 5:34 this in my backyard? Not really. But is 5:36 this something that I can get out and 5:37 touch, get my hands on, and get [music] 5:39 outsized returns for my investors 5:40 because of my proximity? Yes. It's the 5:43 little things that make the big money. 5:45 And at scale, the numbers do actually 5:48 get ridiculous. So, check it out. We'll 5:50 be doing more series exactly like this 5:52 on how to optimize your portfolio. 5:53 [music] 5:54 If you're going to be playing the game, 5:55 if you're buying real estate, we've had 5:57 thousands of videos on this channel on 5:58 how to buy the real estate. How do you 6:01 make that real estate make the highest 6:03 possible return? It's some of the little 6:05 blocking and tackling like we do in 6:07 today's video. Uh, by the way, book is 6:09 out the book on creative real estate. 6:11 So, if you want to [music] learn more 6:12 about the acquisition methods, this is 6:14 real structures, real deals, some of 6:16 them from the properties that we visited 6:17 today. Uh, but these strategies are here 6:19 documented a practical application on 6:21 how to get creative on the deal, the 6:23 debt, and the equity. [music] I'll see 6:25 you on the next episode.
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