Innovating within tried-and-true businesses, though often subtle, can be as effective as developing an unexpected specialty or dramatically improving a new process. See how Jeffrey Goldstein, of Multifamily Management Services (MMS) and GoldOller Real Estate Investments (GO), has found success by embracing different markets and fresh technologies.
If you were to compile a list of basic human needs, having a roof over your head is likely to land in the top three. Real estate and property management industries have most often responded to that need by taking the path of least resistance. When it comes to fostering innovation in such a seemingly changeless industry, the way forward is, at best, difficult.
Yet Jeffrey Goldstein has found a way—by delving into areas few people wanted to touch and embracing society’s new expectations. A business owner who grew his first business’ property holdings from 400 to 32,000, he’s familiar with implementing change in order to drive success.
Growth Into Full-Service
MMS originated in New York and now manages properties from Maine to Florida, and as far west as Kansas City. Beginning as a local family business, the firm now employs more than 700 employees nationwide and about 100 in the Hudson Valley alone. Specializing in property management, development, construction, and subsidized management services, Goldstein’s firm is widely recognized as a full-service real-estate business.
Under this full-service umbrella, it covers the three main aspects of property management:
> building a new property to own and manage,
> purchasing an existing building to own and manage, or
> managing an existing building as a third party.
From closing on a new building in Atlanta with 2,500 units by the end of the month to managing a senior-citizen facility with 100 units as a third party for a not-for-profit company, Goldstein can readily name a number of projects across each of these categories.
Shifting Focus to Technology
After decades of continuous business growth, Goldstein began to notice a change in industry technology. With the emergence of online banking and the ease and security that it offers to consumers, demand for real-estate businesses to offer mobile-ready services to tenants greatly increased.
In fact, just last year the Federal Reserve found that 52% of smartphone owners with a bank account used mobile banking, with 75% of bank customers considering online banking the preferred means of banking interaction.
With access to resources like Sterling National Bank’s business banking and online banking reference guides, Goldstein embraced the new technology, armed with a growing online preference.
“We realized technology was going to be the forefront of our industry,” he says.
Being in real estate, the shift to online payments also meant a herculean effort in order to go completely paperless. To update their accounts and processes, MMS worked closely with Sterling to update their transactional abilities.
“In an industry where paper can fill an entire office building, we became paperless five years ago. We pay our bills online. We send money online. Sterling was very helpful when it came to that ... they were very supportive in helping us through the technology growth.”
Over the last five years, MMS spent more than $1 million to change their internal office systems to keep up.
With the help of an outside developer, they were also able to rewrite internal programs and receive assistance with government regulations on the subsidized management side of their business. These advancements streamlined internal systems, creating greater usage efficiencies and effectiveness.
Goldstein credits technology advancement as one of the ways the firm has beat out its competition and fostered growth, seeing these internal system upgrades as an investment that will take MMS through the next 20 years.
Taking the Road Less Traveled
In 2014, subsidized housing offered assistance to approximately five million households nationwide. Despite that help, there remains a large demand for affordable housing without a substantial supply.
Property management business owners like Goldstein recognized this need long ago and began acquiring property and working with government institutions to provide affordable housing to the masses. In order to do so, property managers are given subsidies in return for offering housing at low, inexpensive rates.
Exploring and developing the subsidized side of the business gave this longtime Sterling client an edge in company growth, Goldstein says.
“In the Hudson Valley, we’re the largest real-estate firm in the subsidized housing market,” explains Goldstein, highlighting that many new companies have decided not to get involved in the subsidized part of the industry due to the red-tape and intricacies of government regulations.
“We’ve had growth because we made certain changes—technology-wise—to keep up with the regulatory side of business.” Currently, about half of MMS’ portfolio consists of affordable housing properties.
Operating under the belief that there are fewer areas of residential real estate more complex than affordable, subsidized housing, MMS has taken the time and effort to focus on compliance and regulatory expertise. This includes making use of different federal and state programs to subsidize tenant properties.
Thanks to this effort, the firm has experienced little to no local competition in the affordable real-estate market. “We have basically focused on the subsidized side of business here,” Goldstein says. Without any real competition, MMS offices in D.C., Florida, Atlanta, Kansas City, New York and Philadelphia have recently undergone large expansions.
Day-to-day, Goldstein feels the firm has reached a point where it’s basically running itself. In the short-term view, he’ll continue to focus on growth and property management. Long-term, he says he’ll work to help employees reach their potential through improved technology.
“Yesterday there was an iPhone® 6, today there’s an iPhone® 7. As technology gets more innovative, we’ll have to continue to follow suit.”