Stonemark Property Management

Stonemark Management’s property management accounting system is made up of multiple on-site systems located in the home office. While the company does use more than one brand of software, the preferred software packages are provided by RealPage. For the properties, the company uses the OneSite system from RealPage. The OneSite system generates the Rentroll, billing and cash receipts functions. In the home office the company uses Great Plains Ledger System, and MICR check writing system. Information from OneSite is transferred to the General Ledger. The financial statements are then generated from the combination of this information. Reports available from these systems are numerous. They include, but are not limited to, the following:

General Ledger Statements
Income and Expense Statements
Cash flow Reports
Balance Sheets
Trail Balances
Cash Disbursements Reports
Check Registers
Rent Rolls
Aged Delinquency / Pre-Paid Reports
Cash Receipts Summaries
Unit Availability Reports
Unit Status Reports
Lease Expiration Reports
Rent Increase Eligibility Reports
Rent Forecasts
Traffic Reports
Waiting Lists
Security Deposit Reports
Lost Rent Reports
Security Deposit Interest Reports
Resident Profiles

The above is just a sample of the many reports that are available from the company’s systems. When all reports are taken into consideration, the company has always been able to meet the needs of our clients.

The accounting staff currently maintains the accounting for our 50+ apartment communities. The accounts receivable function is supported by each property’s OneSite property accounting system that maintains the Rent Roll, resident ledgers and all other accounts receivable information. This system generates delinquency reports on a daily basis.

All vendor payments, payroll, real estate taxes, insurance payments, management fees, and all capital improvements are paid from the home office in Atlanta, Georgia on a weekly basis. Expenses are classified in accordance with the approved chart of accounts.

It is the responsibility of each Community Manager to obtain bids in order to get the best price for goods or services purchased.

Stonemark Management maintains a set of procedures designed to minimize the chance of theft or fraud. By not accepting cash payments, the chance of direct theft is reduced. The company also utilizes an internal audit function to minimize the possibility of fraud, with periodic audits conducted.

All bank statements on all bank accounts are received and reconciled by home office accounting personnel who are not check signers and do not have access to any check stock. All bank reconciliations are reviewed by Stonemark Management’s controller and approved on a monthly basis. Home office accounting personnel handle all transactions involving the release of security deposit funds.

The company prepares an annual budget for each property. The Regional Manager prepares budgets with the Community Manager on an annual basis. These budgets are intended to be reasonable and at the same time maximize the performance capabilities of each property and its staff. Budgets are an integral part of Stonemark’s financial reporting function.

An analysis of budget variances is reported to the owner as part of the monthly owner’s reports.

On a monthly basis, senior management reviews progress and attainment of budget goals. Reforecasts are performed on an as needed basis, at the direction of senior management and owners.

In summary, Stonemark Management has the in-house accounting capabilities to handle both the day-to-day management of properties and meet the needs of various types of investors.

Stonemark Management develops a marketing plan for each community at the time of takeover. The plan allows for communication and goal setting with the owners of each property. In order to be successful in extremely competitive markets, ownership and management will need to focus on the following ten items:

Physical Appearance of Property
Professional and Knowledgeable Staff
Resident Qualification Standards
Customer Service/Resident Retention
Outreach Marketing and Implementation of Marketing Action Plan
Lease Expiration Management
Optimal Price Strategy
Budget and Cash Flow Management minimizing delinquent rent and managing the Approved Capital Improvement Plan
Appropriate Expense Control Plan
Effective Management of Vacant Unit Inventory

In addition to making any necessary capital improvements, Stonemark Management will ensure that the staff is walking the property daily and addressing any issues that affect curb appeal. The Community Manager will perform informal property inspections on an on-going basis and a formal property inspection on a monthly basis. The Regional Manager will perform the same property inspection on a quarterly basis. Quarterly staff bonuses are dependent upon successful property inspections.

To ensure the professional appearance of the staff-members, Stonemark has a written dress code. To ensure professional behavior of the staff, Stonemark provides formal training for all associates.

Some of the classes for office associates include Leasing for a Living; Fair Housing; Operations Training and One-Site Training. Our maintenance teams are also instructed in OSHA Regulations, HAZCOM, Mold, Mildew and Fungi Remediation, and essential asset maintenance. In addition to these training classes, our Community Managers and Maintenance Supervisors attend an Annual Leadership Conference. This conference is an educational event with seminars that address issues relevant to the Multi-family Industry.

Stonemark’s Resident Qualification Standards will be consistently applied when processing applications for residency. Real Page’s OneSite Screening, an on-line resident screening program utilized by Stonemark, will evaluate the applications. Assuming the applicant qualifies based upon credit, a Criminal History will be run. Applicants must qualify based upon the full market rent of the apartment, and not based upon any discounted rent. This will ensure a more credit-worthy renter who is less likely to be evicted or skip.

The primary focus will be to educate associates on Stonemark standards of customer service and resident retention. Associates will be secretly audio and video “shopped” to ensure that they are applying the principles of leasing and customer service that they learned in class. Upon hiring, Associates sign a release authorizing us to have them audio and video shopped. The Community Manager will be expected to submit an annual marketing calendar that will outline the promotions and resident activities for the year. The staff will also follow up on all service requests to ensure completion and satisfaction. In summary, the staff will learn how to provide better customer service, which will translate into more leases and better resident retention.

Outreach Marketing is critical to the communities in a competitive market. By nurturing relationships with locators, corporate housing vendors, and local corporations, properties have been able to increase qualified traffic to maximize occupancy. The staff will be introduced to several programs such as The Stonemark Referral Program, Preferred Employers Program, and Traveling Nurses Program. These programs are designed to offer incentives to external influencers by referring individuals to our Stonemark managed communities.

By analyzing traffic patters, closing ratios and historical move-ins and move-outs, the Community Manger and Regional Manager will determine the maximum allowable lease expirations for each month of the year. By matching the lease expirations to the traffic patterns, a manager can more easily control occupancy. Lease expiration management is essential in achieving optimum rent as discussed in the next paragraph.

Based on our analysis, we expect softness and offering concessions will be necessary in certain markets from time to time. In these softer markets, we feel that constantly offering large periods of free rent (2 month free) is a losing strategy, in that it encourages unqualified traffic and leads to higher turnover. It is our experience that in order to achieve the highest possible revenue for the property, we will need to focus on both achieving the highest possible rent per lease and minimizing vacancy loss. The first step in this is to identify the property’s true price point in the market (net price after concessions). We then apply a price strategy for quoting rents, as opposed to quoting abnormally high rents with large free rent periods. The effect of this is to stabilize the income stream of the property and focus on real rent growth by steadily raising rents as market conditions improve or exposure decreases.

By focusing on real rent and lease expiration management, the staff can increase rents on more desirable unit types. The result of this plan is minimized vacancy loss by operating the property at sustainable rents.