Document Sample

Prepared by


September 20, 2006

I     Screening Potential Property Management Companies

II    Basic Property Management Functions

III   Negotiating Property Management Contract
      Sample Property Management Contract

IV    REMA Information

V     Institute of Real Estate Management

According to Utah Division of Real Estate, a Sales Agent or Broker license is required
for any individual who, for another and for valuable consideration, negotiates or
consummates the sale, lease, exchange or purchase of real estate.

A Sales Agent or Broker license is also required for any individual who, for another and
for valuable consideration, engages in property management including advertising real
estate for lease or rent, procuring prospective tenants or lessees, negotiating lease or
rental terms, executing lease or rental agreements. A licensed Sales Agent and Associate
Broker engaging in property management must be affiliated and supervised by a Principle
Broker. The licensing requirement does not apply to an owner who manages his or her
own property, an employee for one property owner, apartment managers who reside in
the apartments at reduced rent, full-time salaried employees of a Homeowners
Association, hotel or motel management, or management activities associated with rental
accommodations for a period of less than thirty consecutive days. Additionally, real
estate companies and branch offices must register with the Division of Real Estate prior
to operation.

In addition to real estate licenses, a property management company should have a
business license in their municipality.


The property liability insurance and associated umbrella policies cover risk on the
property first. A property management company is exposed to various risks as well as
the property owner. The following is an example of a comprehensive insurance program
for a property management company.

       Office Package Policy
               Equipment, tenant improvements within corporate office
               Valuable Papers Coverage and Inventory or Appraisal – Insurance
                  would pay up to the limit of liability should the company have to do an
                  inventory or appraisal connected with a loss
               Extra Expense Coverage – Expense incurred in order to continue
                  normal operations following damage or destruction of real or personal
               General Liability Coverage – Typically covers Management Company
                  ―negligence by commission‖

       Umbrella Liability Policies
              Additional Liability Coverage for incidents exceeding usual general
                 liability limits
       Errors and Omissions Liability Coverage
                Coverage for Property Management Company ―negligence by

       Workers Compensation Coverage
              Workers Compensation Coverage for all officers and employees of the
                Management Company

       Fidelity Bonding or Crime Insurance
                Coverage for the Property Management Company for the dishonest
                  acts of any employee including acts of forgery, theft and

You should learn the deductibles associated with each type of insurance and the company
financial stability to cover them.

                          CORPORATE ORGANIZATION

When interviewing property management companies, a solid understanding of their
corporate organization is necessary.

                 Who are the principles? How long has the company been in business?
                  How long have the current principles been involved? How close are
                  they to day-to-day business?
                 Discuss the Management Company Mission and Philosophy.
                  Ascertain if their approach to business reflects your own style and
                  preferences. Assure that the Management Company will match their
                  goals for property performance with your ownership strategies and
                 Ask who will report to you regarding your asset. Who will call you
                  with updates and whom do you call for information?
                       AGENCY / FIDUCIARY RELATIONSHIP

The agency agreement between the Management Company and Owner serves as the legal
foundation for recognizing and achieving objectives. Through the agency clause of the
management agreement, the owner gives the manager the authority to act on his or her
behalf. As agent or fiduciary for the owner, the real estate manager must remain loyal to
and honest with the owner. They must account for and maintain confidentiality in all
management transactions and financial records and take reasonable care and diligence in
performing their duties.

A fiduciary relationship is a relationship that true professionals have with their clients
and colleagues. It is held to a higher level of conduct than conventional business
relationships. It is a concept of acting in a reasonable and prudent manner for the benefit
of a client. A fiduciary relationship assures your clients and fellow professionals that they
can trust and depend on you whenever you conduct business together. Additionally, with
a fiduciary relationship, clients put their money, property, important records, and
reputation into your hands as a manager. The Property Management Company’s primary
duty is not to compromise that trust.


A key responsibility of any Property Management Company is the preparation of
financial reports designed to meet the accounting needs of the owner, the frequency,
format and detail required should be, to the extent possible, dictated by the owner, within
the confines of the management company. The importance of the Trust Fund accounting
function within the management of income property cannot be overemphasized. A
qualified controller must professionally and efficiently administer this function.


As an owner, you have an expectation of your Property Management Company to be
aware of operations on your property and to communicate that knowledge to you. The
frequency and detail of communication expected varies with each owner. In the
beginning of a contract the management company will have more questions for you and
will need as much information as you have in order to better understand the asset. As
time progresses, they will need less of your time. Excellent Management Companies
possess the ability to interact effectively with a diverse group of people, you as owner,
community staff, vendors and most importantly the residents of your property. They
resolve complex issues and unforeseen obstacles quickly and efficiently.

In addition to a monthly financial statement, you may receive weekly occupancy updates,
monthly or quarterly calls or visits discussing property performance and planning,
depending on owner proximity to the asset and Property Management Company, and
other non-planned reporting such as incident reports on the property. An annual budget
planning meeting in necessary as well, giving both you as owner and the Management
Company a chance to create a ―go forward plan‖ based on your goals. As trust and
confidence build between the owner and the Property Manager, the communication
requirements may decrease.

                                 LEGAL COMPLIANCE

Owners must rely on their Property Managers to adhere to any special legal requirements
arising from the type of property they own, its location, or its occupants. Owners expect
their managers to fulfill all legal requirements, federal, state, or local, for managing and
operating their property. The following include some key legal issues.
                 Landlord-tenant law - States use the National Conference of
                   Commissioners Uniform Residential Landlord and Tenant Act—or
                   some variation of it—to define the rights and responsibilities of
                   landlords and tenants. Owners expect real estate managers to know
                   and comply with the specific landlord-tenant laws for the area.
                       o Lease negotiation - Lease negotiation is an important part of a
                            real estate manager’s duties. Most leases contain clauses
                            covering many or all of the following.
                                  Lease initiation issues: Security deposit, delivery of
                                  Ongoing issues: Quiet enjoyment, maintenance,
                                     utilities, improvements and alterations
                                  Special situations: Assignment of subletting, default,
                                     hold harmless, right of re-entry, holdover tenancy,
                                     automatic renewal
                 Evictions - Eviction removes a resident from the leased premises. The
                   legalities of eviction may vary from state to state and city to city.
                   Guidelines for evicting residents of government-assisted housing are
                   different than for eviction of other types of residents. Managers should
                   always consult their legal counsel before proceeding with an eviction.
                   Reasons for eviction may include the following.
                       o Delinquency or nonpayment of rent
                       o Nonpayment of other fees
                       o Misuse of the property
                       o Destruction of the property
                       o Failure to maintain the premises
                       o Creating a nuisance
                       o No-cause action (landlord serving notice and calling an end to
                            the lease)
                       o Unlawful detainer action (evicting a resident who refuses to
                            move out at the end of the lease)
                 Abandonment - Default of the lease through voluntary removal from
                   the premises without naming a replacement. Tenants may leave behind
                   personal property, which requires strict adherence to legal guidelines
                   for removing, storing, and tagging items.
                  Collections - Managers have fiduciary responsibility to collect
                   delinquent rent. Collection agencies or small claims courts are two
                   options for recovering some or all of the back rent; however, each is
                   not without its costs.


Investors purchase income-producing real estate for two primary reasons – Speculation
and Investment
                Speculation offers investors an opportunity to take a high risk and
                  potentially receive a high reward from a relatively short-term holding
                  period. Their return is typically achieved at the time of sale and is
                  realized from the profit made on the sale of the property.
                Investment in real estate, on the other hand, typically extends for a
                  longer holding period and offers investors five fundamental
                      o Periodic return (cash flow) - Some owners use property
                          investment as their sole income. They seek to maximize
                          periodic returns rather than focus on long-term appreciation.
                          Periodic returns are derived from the cash flow remaining after
                          operating expenses and debt service payments are made. These
                          owners may be less willing and less able to reinvest the money
                          generated by the property into capital improvements.
                      o Capital preservation (safety) - Stocks and bonds have only
                          extrinsic value, but precious metals and real estate have
                          intrinsic value. Because property values typically rise with a
                          rate at least equal to that of inflation, real estate is a ―safe‖ way
                          to preserve capital. These owners are not likely to provide
                          additional resources to improve the property.
                      o Capital appreciation (hedge against inflation) - Most investors
                          not only want their capital preserved, they want it to appreciate.
                          Real estate investors realize this goal when they sell their
                          property for a price greater than that for which they purchased
                          it. This is usually a long-term investment, but under the right
                          conditions—such as local economic growth, an upswing in the
                          real estate market, rehab, or changes in the property’s use—it is
                          also achievable in the short term.
                      o Leverage (using other people’s money) - Financing allows an
                          investor the opportunity to use other people’s money to acquire
                          investment real estate. This may give the investor an
                          opportunity to diversify his or her portfolio or create an
                          opportunity to increase the rate of return on investment.
                        o Income tax advantage (tax shelter) - Real estate investment
                            offers a variety of income tax advantages. Deductions for
                            mortgage interest, operating expenses, and depreciation are tax
                            incentives that prompt some investors to purchase real estate.
In addition to the five fundamental financial reasons for investment, investors also enjoy
pride of ownership from owning income-producing property. While all investors have
these financial goals, the goal of an effective Property Management Company is to
understand the mix of the various elements as it relates to the individual investor’s risk

                        HUMAN RESOURCE MANAGEMENT

The Property Management Company should have a human resource management
program that will include the following areas.
               Local Employment Market
               Recruiting
               Job Applications
               Background and Reference Checks
               Selection Interviews
               Employment Testing
               Job Descriptions
               Employee Management

                           MAINTENANCE MANAGEMENT

Time and use take their toll on any property. Owners expect their Property Managers to
protect their investment by maintaining the physical aspects of the structure and common
areas. Because a carefully maintained property keeps residents happy and preserves the
property’s curb appeal, it is also critical to ensuring continued occupancy and, ultimately,
cash flow. Some objectives of maintenance include the following.
        Optimal functioning of the property
        Reduced operating costs
        Extension of useful life of equipment
        Resident satisfaction
        Increased resident retention
        Maximized property income and value
Using a reactive approach to maintenance—performing only corrective or emergency
maintenance—can cut immediate operating costs but has a financially catastrophic
impact on the long term. The level of involvement owners choose to have in the
management of their properties varies from owner to owner. You may carefully review
maintenance reports and choose to participate closely in all maintenance decisions.
Others will entrust their Managers with all maintenance responsibilities.
There are several things to keep in mind for establishing good property maintenance
procedures. The following are some general guidelines.
                Blueprints of the facility should be inventoried and readily accessible
                The property manager and maintenance personnel should know the
                   location of all water and gas shutoff valves
                The property manager and maintenance personnel should know the
                   location of all electrical circuit breakers and main breakers. The
                   breakers should be labeled.
                The property manager should have an elevator override key to be able
                   to call an elevator car to an emergency site.
                Safety should always be a priority
                Conduct regularly scheduled inspections
                Use personal protective equipment (PPE); refer to and follow
                   recommendations of material safety data sheets (MSDS). A MSDS is a
                   document provided by the manufacturer regarding the safety, handling
                   procedures, and precautions for materials used in the workplace.
                Using qualified, licensed, and insured contractors and consultants is a
                   good practice.


The Property Management Company will be responsible for assigning contracts for
services on your property. The management agreement will allow for a maximum term
of contract that the Company will have the authority to sign on your behalf. It will be
their duty to obtain and compare proposals, award the contract and to follow up on the
vendor to assure that goods or services are being supplied as provided in the contract.
Owners should take every precaution to assure that the Property Management Company
doesn’t have conflicts of interest such as ownership in companies providing services to
the properties they manage.

                                RISK MANAGEMENT

Property Managers deal with risk on a daily basis. While risk cannot be completely
avoided or eliminated, it can be managed. Risk management reduces the likelihood of
something occurring and the severity of its consequences. Developing a risk management
program and completing a property information report are important steps toward gaining
a knowledge and understanding of the risks that people and property face.

Developing a Risk Management Program is a demanding task that may take several
weeks or months to complete appropriately and often requires the use of consultants or
insurance agents who specialize in this type of work. Developing a risk management
program may involve these steps.
                  Acknowledge and Identify Risks - Some degree of risk or uncertainty
                   about the future is always present. The first step to managing it is
                   acknowledging that risk exists and identifying as many specific risks
                   as possible, and the likelihood of them occurring. The following are
                   some types of risks that should be identified for your properties.
                       o Personal Safety
                       o Property
                       o Financial
                       o Natural Disaster
                       o Mechanical
                       o Automobile
                  Evaluate and Prioritize Risks - The second step is to review all the
                   risks listed in the first step and decide the probability of the risk
                   occurring and how extensive the loss would be if it did occur. Your
                   Property Management Company should understand frequency and cost
                   estimates. Consideration of new risks such as terrorism is important.
                  Decide How to Manage Risks - Once the risks have been identified
                   and evaluated, your Management Company will develop a written plan
                   that outlines how they will be managed. The plan should include
                   which risks will be absorbed by the company and which will be
                   insured. The plan should also outline which processes or procedures
                   must be changed or eliminated to mitigate risk exposure.
                  Implement a Risk Plan
                       o Distribute and explain the plan to all affected
                       o Train those affected in the new processes immediately, and
                            eliminate old material and processes
                       o Install appropriate administrative controls for internal staff and
                            external suppliers
                       o Manage all claims when accidents do occur
                  Review, Evaluate and Adjust the Plan – Your Management Company
                   will find it necessary to adapt to the ongoing changes that occur in the
                   insurance industry and the legal system. Plans, processes, and risks
                   should be reviewed periodically. The plan should continue to be
                   relevant, comprehensive, and effective. Also, they should review the
                   previous plan to determine if risk management techniques have the
                   desired impact, i.e., decreased injuries or claims.

                             MARKETING AND LEASING

Occupancy levels of properties determine their income. With retaining residents and
obtaining residents at the top of the list of important management functions, it is obvious
that your Property Management Company must recognize the financial implications of
vacant space. Therefore, maximizing the occupancy of all properties remains a primary
goal of Property Managers. Unoccupied apartments means lost revenue. Property
Managers have two ways to maximize occupancy: retaining residents or obtaining new
residents. Because finding new residents is costly, the Property Manager should employ
creative methods for retaining existing ones.

Conducting a market analysis should be the first step performed by a Property
Management Company in any marketing and leasing activities. Based on facts rather than
opinions or assumptions, a market analysis helps Property Management answer some of
the following key questions.
                 What is the economic climate in the market?
                 What are the property’s region and neighborhood boundaries?
                 What is the demographic profile of the area?
Within a market analysis, the Property Manager will study the economic climate of the
area. In addition, they will identify the property’s region, neighborhood, and
demographic profile. The goal is to describe the market area as it relates physically and
economically to the property.

An analysis of the asset is an integral part of the marketing plan. When examining the
property, it is important for the Management Company to consider the strengths and
weaknesses of the property as they compare to other competing properties in the market.
       Location is one of the most important factors when assessing the property. A
       well-located property can command higher rents despite lack of amenities or other
       negative features, while a well-maintained but poorly located site may not
       generate the income necessary to operate efficiently. Of concern for any site is
       where it is located in relation to residential areas, schools and college campuses,
       offices, and neighboring industries. For commercial properties, location along a
       heavily traveled route—on the way to or from residential areas or major business
       sections—is important. The immediate surroundings of the property are also an
       issue; what is across the street and adjacent to the site will affect the image of the

       Property Appearance, including the average age and character of the property
       should be examined, including the building condition, grounds, landscaping, and
       signage. Curb appeal goes beyond the appearance of the exterior to include
       common areas and interiors. Prospects make judgments regarding the quality of
       the building based on their first impression of its appearance, which either
       motivates them to look into signing a lease in the building, or convinces them to
       look elsewhere for the qualities they are seeking.

       Space and Amenities, the square footage, layout, number of rooms, and amenities
       are other important site attributes. Amenities for residential properties include
       items such as parking, appliances, fireplaces, common area pools, hardwood
       floors, or anything else the resident finds valuable.

Property rehabilitation doesn’t consist simply of painting, doing a few needed repairs and
changing the name of a property. The Property Management Company that you choose
must possess the qualifications, expertise and experience to manage many components of
either asset preservation / preventative programs or rehabilitation and upgrade projects.
They must manage all aspects of these projects to include the following components.
                 Planning
                        o Feasibility
                        o Organization
                        o Preparation of Bidding Specification
                        o Budget Consideration
                        o Economics of Alternatives
                 Managing during Project
                        o Continued day-to-day property management
                        o Site staff / Subcontractors
                        o Policies and Procedures
                        o Resident Relations
                        o Construction Management
                        o Marketing
                 Evaluating Completed Project
                        o Market Analysis
                        o Operating Statement Analysis


Through discussions with the Property Management Company, gain a thorough
understanding of the terms listed below.

                  Responsibility of Owner and of Property Management Company
                      o Special requirements of Owner in order for Management
                          Company to meet identified goals
                  Proposed compensation, method it is charged, incentives if appropriate
                  Expense limit in regular operating expenses, capital expenses and
                   emergency situations
                  Understand and agree upon assignment of liability
                  Term of contract
                  Cancellation policies including possible sale of property

The performance of your real estate portfolio depends upon effective, results-oriented
management. You must secure the expertise, knowledge and information that will
enhance the value of your assets. Investigate Property Management Companies that have
extensive experience to build value for you.
               Management expertise, versatility and flexibility, skills hone over
                  many years in the profession, with a focus on streamlining operations
                  and managing your real estate assets as financial investments.
               Marketplace knowledge, knowledge of the industry, your market and
                  the ability to anticipate and take advantage of market conditions.
               Communication, problem-prevention and problem solving skills, the
                  ability to interact effectively with a diverse group of people, and
                  resolve complex issues and unforeseen obstacles quickly and
               Unquestionable ethics, a commitment to adhere to a stringent code of
                  ethics, which is an added value when entrusting someone with the
                  management of your real estate investment.

Real estate owners, developers and investors value results and should look for a Property
Management Company who can provide the following areas of expertise.
               Effectively operating properties of any type resulting in improved
               Adapting quickly to achieve your evolving goals
               Anticipating and taking advantage of market conditions
               Applying the body of knowledge, education and resources of their
                  profession to bringing leading-edge solutions to your property
               Committing to adhere to an enforced code of ethics, which is an added
                  value when trusting someone with your investments
                          MANAGEMENT PHILOSOPHY

REMA management philosophy is principally based on ―managing by results‖. Putting
forth an exceptional effort isn’t enough – we’re successful only when the properties we
manage are successful. REMA employees are expected to proactively manage and
maintain the assets in their portfolios and understand that they are individually
accountable for achieving results.

The following companies values help define our management philosophy.

We believe in:

                 •    Delighting our Residents, Employees, Owners/Clients and Vendors
                 •    Teamwork
                 •    Adhering to the Golden Rule
                 •    Professionalism
                 •    Having Fun
                 •    Management by Action not Reaction
                 •    Recognizing and Acknowledging Achievement
                 •    Keeping Policies and Procedures Reasonable
                 •    Complete Honesty
                 •    We Can Always Do Better

These beliefs and values represent what REMA stands for. Even if, at some point, this
becomes a competitive disadvantage, we would still hold them in the highest regard.

REMA Inc. (Real Estate Management Associates) is an independent property
management firm that has dedicated over 35 years to successfully serving its owners and
clients. We provide superior property management services due to our experience,
stability and knowledge. We have accomplished this by concentrating on doing this one

M. Ray Longhurst founded REMA INC. in 1973. Mr. Longhurst successfully built a
property management company by adhering to a consistent set of principals he applied to
property management. These principals included a hands-on approach that enabled him
to keep occupancies high on the properties and expenses low. Property visits were
strictly made and managers and leasing agents were taught a very defined set of basics,
which enabled them to succeed and excel on their properties. In addition, Ray displayed
a fierce honesty and loyalty to the owners of the properties he managed. He would not
enter into any conflicts of interest that would be a disservice to his clients. Mr. Longhurst
is now retired, but the principles he ingrained in the company still exist today. Many of
the same properties that Ray Longhurst started managing are still managed by REMA.
The clients of REMA have in return given their loyalty to the company because of our
dedication to the same tried and true principles and our ability to maximize income on
their properties in a manner congruent to their own goals and objectives.

In response to the growth in demand for professional property management in Utah,
REMA has since obtained the services of many seasoned property management experts.
Each has specialized in different segments of the multi-family property management
industry. The diversity of their experience adds depth to the services REMA provides to
its clients.

       Dale Longhurst joined REMA in December of 1986 to help with the continuing
       growth of the company. Dale worked for several prominent Salt Lake City
       apartment management companies gaining valuable experience and understanding
       of the property management industry in the Salt Lake market before taking over
       REMA. Having been in property management since 1980, Dale has collectively
       managed thousands of residential units in Memphis Tennessee, Miami Florida,
       Houston Texas and all along the Wasatch Front in Utah. He assisted in writing
       numerous due diligence and feasibility studies for properties throughout the
       United States. Dale holds a bachelors degree in business management-finance
       from Brigham Young University and holds the distinguished Certified Property
       Manager (CPM) designation through the Institute of Real Estate Management
       (IREM). He has taught Utah Apartment Association and IREM courses for many
       years and has also served as local president of each organization.

       Susan Cazier joined REMA Inc. in 1999 as a partner and serves as President of
       the company. Sue has managed large multi-family units as a site manager,
regional investment manager, and regional vice president for a large national
management company. She has extensive background in all facets of property
management having been in the business since 1985. She possesses strong
communication, organizational and leadership skills. Marketing is her forte and
she has an eye for detail. She possesses an artistic and creative personality that
enables her to excel in all areas of marketing, which helps increase revenues. Sue
has been responsible for the development and implementation of marketing and
management plans, including increasing cash flow, aggressive rent structuring
and effective collection programs and knows these procedures well. Sue holds a
CPM (Certified Property Manager) designation with the Institute of Real Estate

Robin Morris serves as Controller and Senior Investment Manager. She has
been in the property management industry since 1983 with emphasis in Davis
County multi family properties. Robin has been a regional investment manager at
national property management companies and has overseen the management of
many large and small apartment properties. She is a very detailed property
manager, has experience in bookkeeping and accounting and is especially
effective at controlling expenses. She has supervised the lease up of several large
apartment properties during construction to management transitions.

Becky Albiston started with REMA in 1998 as an onsite property manager and
quickly became one of the best in the company. Her conscientious and responsive
style pushed her property to the top of the list for performance. Becky was the
natural choice when REMA’s growth created the need for an additional Investment
Manager in 2003. She has taken hold of her responsibilities with an eye for detail
and excellent organizational skills. Her grasp of the importance of occupancy,
expense control and people skills are unparalleled. Under Becky’s direction her
portfolio consistently performs at above-market levels. She has assumed
additional responsibilities including employee hiring.

Debbee Harps has been with REMA as the Administrative Assistant and IT
Manager since 1997. She provides support for our managers and office staff by
using her strong administrative and computer skills and knowledge. Debbee
serves as site hardware and software technician, holding expenses down for our
properties. Every company appreciates the person who ―keeps the show going‖;
Debbee is our person. She keeps schedules straight, the office organized, projects
moving in the right direction and sees to it that our people are where they need to

Amy Cotter joined REMA in 2006 as Accounting Clerk. Amy is detailed and
organized and uses these skills to keep our accounting department running
smoothly. Her background in accounting provides a natural basis for handling the
payables and receivables precisely. Amy’s helpful and responsive personality
allows her to maintain a great rapport with managers while still being able to
insist that reports and payables be submitted correctly and in a timely manner.
       Mark Bosen is the company’s Corporate Maintenance Supervisor and has been
       with the company since 1994. He assists Site Managers and Investment
       Managers in every aspect of maintenance supervision and technical support. He
       is a certified air conditioner specialist, is pool certified, and is also skilled in all
       aspects of preventative maintenance, repair and turnover and project management.

       Clyde Kynaston has been with the company since 1986 as a Maintenance
       Supervisor. He is skilled in all aspects of maintenance and construction and is
       very knowledgeable in boiler repairs and maintenance. Having been in the
       business for so many years he has ―seen it all‖. His experience gives him an
       almost innate sense that facilitates excellent troubleshooting.

       Kevin Cazier has been a Maintenance Supervisor with REMA since 1999. He
       has worked in property management since 1990 on both residential and
       commercial projects and has been in construction since 1980. Kevin is our
       swimming pool expert and supervises the maintenance and compliance of our
       properties pools. He is proficient in carpentry and oversees rehab projects on all
       of our properties.

In addition to multifamily properties, REMA has valuable experience and proven ability
to manage other types of real estate investments including commercial office buildings,
condominium homeowners associations, the conversion of apartments to condominiums,
the conversion of hotels to apartments, and short-term rental facilities.
                                   WHY REMA?

When selecting a property management company, an owner or investor asks this vital
question: Who can maximize rental income and reduce operating expenses with the least
amount of risk?

The following are areas in which REMA has proven itself as a management company.
These strengths will facilitate a smooth transition on your property as you turn the
management over to REMA.

1) PERFORMANCE OF PROPERTIES - REMA has managed many properties for
more than twenty years. REMA managed properties have consistently performed better
than market averages regardless of market conditions. The long-term nature of REMA’s
clientele and the references given by them attest to this success.

2) STABILITY - At REMA, we strive to keep a stable environment. Several property
managers and maintenance staff, not to mention corporate employees have been working
with the company from six to ten years. All properties managed by REMA have had
stable and increasing cash flow for many years. REMA is able to provide growth
opportunities for its employees. REMA is able to obtain the services of many employees
because of the good reputation and potential growth that is available.

3) RELIABILITY OF PROJECTIONS - REMA takes pride in making reliable
forecasts and projections. Each year before budgets are prepared, the market conditions
are analyzed and recommendations concerning rent increases and marketing strategies are
presented to the owner.

involved in REMA are Dale Longhurst and Sue Cazier. Dale has been a Certified
Property Manager (CPM) since 1985 and has worked for Prowswood and Emerson
Realty and Management. Sue has been a CPM since 2002 and has worked with some of
the countries largest management companies including McDermott Stein and Ira (now
AIMCO), Sentinel Real Estate and Pinnacle Realty Management Company.

5) MARKETING AND ADVERTISING - Average occupancy on currently managed
properties is 97.5%. REMA has aggressively increased rental rates to create value for the
property owner. The principles at REMA meet with the owners and create a mission
statement and a list of objectives and priorities for each property. Each year,
management and marketing strategies are based on the owners’ goals and objectives.

6) CONTROL - Timely financial reports provide property managers with vital
information regarding the performance of the property. REMA provides rent rolls,
delinquency reports, vacancy reports, and income statements with budget comparisons,
balance sheets and a variety of cash disbursement reports. REMA property managers are
trained in integral financial matters.

7) CONFLICT OF INTEREST AND FEES - Many property management companies
boast low management fees but many times there are hidden costs charged through a
subsidiary of the management company. REMA does not have ownership or interest in
any vendor or supplier doing business on our properties. If there are any services that can
be combined to bring savings to the properties, these savings are passed through directly
to the property owners.

8) TRAINING AND HIRING MANAGERS - REMA carefully screens employees
before they are hired. All employees attend monthly training meetings during which they
set goals for their property, and are instructed in regard to important property
management principles.

strive to keep both our employees and residents satisfied. If either of these is discontent,
it will later become an additional cost to the property. Resident questionnaires that gauge
tenant satisfaction are distributed annually, and more often if needed, to help us keep
abreast of the quality of service we are providing through our on-site personnel.

10) REPORTING - We provide a complement of reports to keep you well informed of
all events occurring on your property. Weekly occupancy, traffic and delinquency
reports, monthly profit and loss statements, shopping reports, market surveys, resident
and employee questionnaires, are some of the reports sent to owners on a regular basis.
Constant follow up by Investment Managers keep the properties returning an optimal
return to our clients.

   With an annual operating budget we are continually tracking expenses and
    comparing to industry norms, and other REMA properties on per unit basis

   Specialized financial statements are management tools to track vacancy and
    delinquency and constantly allow the important industry-peculiar numbers to
    be reviewed

   Shopping of on-site managers motivates them to stay current in their leasing
    techniques and prevents them from developing bad habits

   An Accredited Management Organization (AMO) with a large portfolio of
    properties manages and controls both the property and the personnel on site.
    Many times an owner or manager of one or two small properties by default
    will allow the manager to control the process and make most of the decisions
    which might keep rents too low and may not maximize income.

   Market studies of comparable properties are completed on a monthly basis
    assuring rents are staying competitive.

   The combined property management experience of REMA partners is over 50
    years. This combined experience allows tremendously constructive
    ―brainstorming sessions‖ for any or all property needs.

   REMA Inc. and its employees are bonded and carry significant insurances
    which provide additional layers of protection for you in the ownership of
    dangerous assets. REMA is accredited by the Institute of Real Estate
    Management, which requires a company principal to have ten years
    experience in the industry and proper property management training through

   Training of employees is an integral part of the success of REMA. Our
    employees are encouraged to attend courses sponsored by IREM, seminars
    with the Utah Apartment Association and to take advantage of other
    opportunities that may occur. In addition REMA provides training through
    monthly manager and maintenance meetings.

REMA has been actively involved in multifamily organizations in Utah including the
Institute of Real Estate Management (IREM), Utah Apartment Association (UAA) and
the Board of Realtors, both locally and nationally. REMA Inc. is an Accredited
Management Organization (AMO) under the auspices of the Institute of Real Estate
Management and the National Association of Realtors. We are the oldest AMO in the
state, having held the designation continuously since 1979.

Dale has been a president for the local chapters of both IREM and the Utah Apartment
Association. He has been an instructor for IREM and has also taught UAA courses.
Dale is a Certified Property Manager (CPM).

Susan has been very involved in IREM and the Utah Apartment Association. She has
served on many committees within both organizations, and currently serves as President
of the IREM Utah Chapter. Susan holds the Certified Property Manager (CPM)

     We approach management decisions as if we owned the asset

     We’re focused on results - both financial performance and subsequent
      value appreciation

     We’re local - our base of operation and properties managed are in Utah

     We’re not faced with potential conflicts of interest

     Our accounting systems are flexible and can accommodate your needs

     We’re capable of managing assets from lease-up properties to value
      added properties to stable properties and more

     Our information processing is state-of-the-art and provides for
      effective proactive management solutions

     We have established relationships with the brokerage community - we
      can help you sell your assets at the appropriate time

     REMA’s identity as a fee manager of properties for many years speaks
      of our stability and experience, all of which will result in positive

                       REMA Inc.
           Real Estate Management Associates
Your Utah Property Management and Consultation Solution

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