Welcome!

Posted: 4th January 2012 by Melissa in Uncategorized
 

Welcome to the FBS Rent Sense Blog. We will be posting weekly Rent Sense Articles written by Neil and Chris. These articles can also be seen in major publications such as the San Diego Union Tribune. Our goal is to bring quality information to help counsel those already in or interested in the industry. Check back each week to see what is new and exciting in the Property Management world.

“Nearly half of all the housing in San Diego is offered for rent. This condition has existed locally for decades and will continue for the foreseeable future. It is imperative that rental owners and rental residents respect the other for their important role in the essential segment of our local economy. The more informed each are about their respective rights and responsibilities as well as changes in the marketplace the more realistic are the expectations. That just makes good sense; Rent Sense.” – Neil,  2008

Where your home matters…

FBS wins Best Property Management Company!

Posted: 24th April 2015 by Melissa in Property Feature
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To see the full coverage pick up the latest issue of the La Mesa Courier, or view online here!

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FBS goes to Sacramento!

Posted: 23rd April 2015 by Melissa in Rent Sense
 

In mid-April, 2015, two of our executive team, Lucinda Lilley, Vice President and Melissa DeMarco, Director of Operations and Marketing, traveled to Sacramento with the San Diego County Apartment Association (SDCAA) and the California Rental Housing Association (CalRHA) to meet with our State Legislators and discuss important bills that affect the rental housing industry. Along with leadership from seven other major local associations, we were joined in Sacramento by two executive officers of the National Apartment Association (NAA) with which the SDCAA is also affiliated.

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The California Rental Housing Association (CalRHA) represents over 18,000 members made up of small, medium and large rental housing owners throughout the State of California. CalRHA provides timely grassroots mobilization for the purpose of advocating at the state level and contributing to change in the rental housing industry. NAA represents 67,000 members.

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The San Diego County Apartment Association (SDCAA) is Southern California’s leading trade Association. SDCAA is the #1 source for rental housing in California, serving the needs of individuals and companies who own, manage, or provide services and products to what amounts to more than 40% of all households throughout San Diego County and our affiliated areas of Imperial and Riverside Counties. For more than 95 years, the SDCAA has been one of the nation’s leading rental housing authorities providing members and the industry with ongoing education, business networking opportunities and important legislative advocacy.

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At FBS we have lent volunteer energy to this important organization since 1978. FBS Property Management remains committed to the value of rental ownership and protecting the rights of real property investors. Our “behind the scene” legislative work at the local, state and federal level is only one way we invest in the industry.

Rent Sense: What Does 2015 Mean to Me? (Part 2)

Posted: 21st April 2015 by Melissa in Rent Sense
 

Rent Sense: What Does 2015 Mean to Me? (Part 2)

By Neil Fjellestad and Chris DeMarco

Last month we shared some data that is extremely promising for independent rental ownership. We connected data points that clearly predict a flood of new potential renters in high employment centers with full economic support for this primarily young adult demographic with fun-loving boomers in the mix; such as many California regions. Let’s continue with a more precise understanding of this modern rental customer.

The new millennial renters (all ages and situations) should be addressed as “renters by choice” because that’s exactly what they are.  Their personal priorities include: lifestyle, safety, and convenience. Much more detail can be added to these priorities. You might be surprised to find that within sections of the U.S. and abroad individuals often own a rental as a landlord and live in another rental as a tenant simultaneously. These renters by choice are “demanding” and “discriminating” customers by nature and/or circumstance. They are educated to understand that they live in a renter nation, at least for now. And they are the rental generation – “large and in charge”. They collaborate with each other constantly in person and online. They add technologies to this collaborative effort so they know everything the typical rental owner knows about competitive rental rates, popular floorplans, and livable neighborhoods including walkability, police and school stats.

Our first tenants paid rent equaling 15-18% of their household income, most households had one income earner. Some of you might have owned property as long, so you remember. Today, the rent represents between one-third and one-half of household income. A substantial number of rental households pay more than 50% of income.  Other differences: most rental households have multiple income earners and good credit is extremely important to them.  Additionally, since the millennial renter has often lived in rental housing as a student and/or roommate they understand “splitting” household costs in order to avoid compromising on location, floorplan, common areas, neighborhood walkability or whatever they deem most important.  Here we will rely on our history over the last two decades. We have advised residential developers and operators in no fewer than 60 metro markets throughout 29 states.  It was initially surprising to us that much of the “high-end multifamily” was readily rented by this demographic especially during the recession. Often, they stayed within their respective budgets by curtailing other expenses: offsite health clubs, eating, entertainment and choosing shared and/or public transportation. Of course, in many cases their housing budgets were split between roommates and subsidized by parents. The point is this. These are renters that demand a particular lifestyle that they have become accustomed to as formative adults.

Where does the necessary supply of quality rental housing come from now remembering that we have generally run deficits on creating any housing supply during the last 5-7 years? In most regions of California land acquisition is difficult and developing any acquisition for building generally meets resistance. The building process is becoming elongated due to a variety of delays; labor and materials.   Logically, we might believe that supplying multifamily will move faster. So, even though the estimates are that the current supply coming to market must double this should be doable. In California, most of the land acquisition expertise, residential development and construction expertise are versed in and comfortable with “for sale” subdivision construction. In addition, they usually lean toward higher-end housing. Multifamily construction is enticing but the risks, systems and timely performance all must become acquired skills.  The “high barrier” California markets include dealing with local planning professionals being pressured by NIMBY attitudes that envision more traffic along with competition for existing services typically coming from single dwelling households. Then there are specialized lenders and asset managers found on the “multifamily” side. All these interactions are pretty unforgiving for the inexperienced. Therefore, for the near future any pipeline providing this supply is tentative at best.

How about all the single homes and individual condos that got caught up as rentals during the recession? Will these be sold to owner occupants? Will they be sold to investors and/or held as rentals? The answer is ‘yes’ to all of the above. The net effect will probably trend toward more individual rental homes held by enlightened investors that realize even a couple of houses can build their net worth and provide additional tax-favored income during retirement far better than the stock market.

So, there is no better time to be in the rental property business if you are willing to professionally manage your business. This means active “customer relationship management” CRM, RPM “residential property management” best practices and assertive marketing and branding.  This will require external interaction: asking, listening, timely responses, transparent communication that anticipates renter customer preferences. We need to prove to our customers that our internal credentials, training, technological integration, oversight and offsite support are in place giving them confidence that “their home which is central to their lifestyle” is at the core of our “business plan.” We realize we might have introduced more questions. That’s okay. In forthcoming issues of this publication we will fill in the details.

Ms Management

Posted: 14th April 2015 by Melissa in Ms. Management
 

Q- I’m a property manager operating a larger apartment community with a solid team in place for about 2 years. I mention all this because I’ve recently been put into an awkward situation with my company. One of the executives has a favorite niece that has been assigned to me as a leasing specialist. Don’t get me wrong, I like the young lady and she has some people skills but she seems to think that our rules don’t apply to her. She’s been late several times, has left for personal appointments in the middle of her leasing shift, and during an average work week she’s not in company attire and/or in team colors at least twice. When my regional introduced the idea of the “niece” I got the definite impression that regardless of my opinion, I needed to adjust to the idea. I don’t want to misstep here. I love my job and my company but her behavior is not good for my team or my leadership.  Do you have any ideas?

A- Hmm. First, let me ask. Do you believe that your company leader cares about his niece? Of course he does. If this is true then it also would be true that your property, your team and especially you were chosen because of his caring, not in spite of it. I have a granddaughter that was given an opportunity to work at a property on the east coast belonging to a client. The opportunity was subject to my approval. My enthusiastic approval was based upon the great example, learning experience and career potential this team and its leader could bring to my loved one.

My point is simple. Unless, and until you are expressly told by this uncle that his niece should be given preference over the rest of the team and is approved to disregard company policy including your leadership and his, you should represent your property, team, company, yourself and her uncle with uncompromised “best practices” from day one and throughout this young lady’s employment.

This is your normal commitment will would include definite and transparent communication about existing policies explaining the importance of each; and the discipline that supports these policies. She will, or not, become a valuable member of your team. Either way she will learn valuable lessons from the experience. As you report to your regional that you are on track with “the niece” you will be able to provide details of how your leadership has positively developed under these circumstances.

 

mdSan Diego, CA (March 2015) - FBS Property Management recently appointed Melissa DeMarco as its Director of Operations and Marketing.  In her new role, Ms. DeMarco will help design, revise and shape many of the best practices and standards utilized at FBS.  Her role continues to uphold FBS standards in regards to: leasing, marketing, employee training, customer care, client relations, and internal operations. She is responsible for all company media including:  FBS website, blog site, video promotion, social media, print advertising and all community events in which FBS participates.

Ms. DeMarco has been with FBS for 8 years (2007).  During her tenure at the company she has acted in the capacity of operations and marketing, executive utility player; serving as a property supervisor and property coordinator as circumstances required. She has also been a leasing and new account specialist. She has even served as a teaching assistant (TA) for Neil Fjellestad working together to bring a fully accredited “Principles of Residential Property Management” to San Diego State University College of Business Administration in 2014.

 “Ms. De Marco is an excellent leader within her millennial generation. Her work ethic is exemplary; being driven to initiate change, detail implementation, honest evaluation of what works and where improvement is still needed. She has already laid the groundwork for this new assignment which allows her greater impact inside FBS and within the industry” Neil Fjellestad- President.

Melissa has helped grow FBS through involvement in the Better Business Bureau (BBB) and local Chambers including being a facilitator for Ethics in Business within the East County Chamber. Melissa has continued her industry experience by participating in National Association of Residential Property Manager meetings and conferences. Melissa has also stayed very active at the San Diego County Apartment Association: sitting on the Golf Committee, Editorial Advisory Committee and Co-Chairing the Education Conference and Expo.

Melissa, a Patrick Henry High School standout, was recruited to play softball at Long Beach State. While at Long Beach State, she occupied a seat on the Student Athlete Advisory Committee (SAAC).  She was also named a Scholar Athlete.  Melissa finished her college career locally at California State University San Marcos, graduating with a Psychology degree. She also recently sat on the Board for the Lake Murray Playground Project, helping raise money and completing the three-year dream to rebuild her neighborhood playground.

About FBS Property Management

FBS is an award winning Management Company, based in San Diego, currently operating rental property in 69 zip codes throughout southern California. At FBS, we are accountable to our rental owners while rendering complete customer service to our residents.  Now in our 5th decade of providing management services in San Diego, our tailored and systematic “best practices” approach to real estate investment and management has successfully kept us at the forefront as an industry leader in the market place.  

In 2014, FBS team members were awarded  the CPM® of the Year through the Institute of Real Estate Management, Leasing Professional of the Year and a finalist for Property Management of the Year through the San Diego County Apartment Association.  For more information about FBS, please visit us at www.fbs-pm.com.

KTS Legal Questions

Posted: 1st April 2015 by Melissa in Legal Questions
 

FBS Apartments, Condos and Homes For Rent in 69 zip codes throughout the S.D. Region

FBS operates Rental Properties for Independent Owners utilizing Industry Best Practices which creates direct benefits to our Rental Customers. We have provided Superior Housing Alternatives now in our 5th Decade. Our available rental inventory changes daily. www.fbs-pm.com

As professional managers we must stay on top of local, state and federal laws, regulations and housing codes that are imperative to our clients and rental customers. We review and update our contracts, policies, forms and routines with the help of KTS (Kimball, Tirey and St. John).

Here are some situations we have asked Ted Kimball, Lynn Dover and others to weigh in on -
1.    Question:
What is the difference between a companion animal and a service animal?

Answer:
There is no difference. In the eyes of the law, they are both types of assistive animals for persons with disabilities.

2.    Question:
I have an applicant who uses a wheelchair. She wants me to put a ramp into her unit, widen her doorways and install a roll-in shower for her. Do I have to do this? My property was built in 1972.

Answer:
As long as your property is not federally funded, you do not have make these modifications for the applicant. However, you do have to allow the applicant to make the modifications herself, at her own expense (assuming she rents the unit from you). The work must be done in a workmanlike manner and if the cost of the labor and materials would exceed $500, California law requires it be done or supervised by a licensed contractor.

3.    Question:
Can I prohibit a resident from having a Pit Bull as an assistive animal?

Answer:
No. You cannot impose breed restrictions on assistive animals. If a particular animal (regardless of breed) has a history of biting or other dangerous behavior, that animal should be able to be denied (although the resident could get a different animal).

4.    Question:
My resident has asked for an accommodation and I don’t think they’re disabled. Can I force them to get a note from their doctor?

Answer:
No. While you are entitled to written verification that a resident’s condition meets the definition of disability under California law and to verify there is a disability related need for the accommodation, you may not require this note to only come from a doctor.  Any sufficiently reliable third party, which would include a doctor, may provide verification.

5.    Question:
Can I require an applicant who uses a wheelchair to live on the first floor? We don’t have an elevator and I’m worried he couldn’t get out if there was a fire or other emergency.

Answer:
No.  This practice would be considered “steering”, or trying to control where the applicant lives on the property based on his protected class (disability).  An applicant with a disability has the right to live in any apartment he chooses, assuming he meets your property’s screening criteria.

6.    Question:
I am trying to evict a resident for his conduct on the property. He has indicated that his conduct is due to his current drug use and he asked me to give him another chance claiming his ongoing drug use makes him disabled. Can I continue with the eviction?

Answer:
Yes.  Although recovered drug addicts are considered to be disabled, someone who is currently engaged in the illegal use of controlled substances is not covered under federal or state fair housing law.

7.    Question:
I entered my resident’s unit yesterday to check the smoke detectors and found that she is hoarding. I couldn’t even walk into a few of the rooms because of there was so much personal property inside. Can I serve her a 3-Day Notice to Quit?

Answer:
No. Hoarding is recognized as a mental disability. Before you can evict, you generally must give the resident an opportunity to bring her unit into a safe and sanitary condition. If the resident refuses to take steps to remedy the condition of the unit after you have given her a reasonable amount of time to do so, then you should be able to terminate the tenancy.

8.    Question:
I had an applicant who applied for an apartment today. She said she has two assistive dogs. Can I limit the number of assistive dogs to one?

Answer:
No, you can’t limit the number of animals to one. However, you can require verification that because of the resident’s disability (or disability of other household members), two assistive animals are necessary.

9.    Question:
My resident has an unauthorized dog in her unit. When I sent her a lease violation notice, she told me that her dog was an assistive animal. A few days later she brought in a Service Animal Certificate which she obtained from a website. Do I have to accept that as valid verification?

Answer:
No. The websites that issue those types of certificates generally do not require proof of disability or disability-related need for the animal. Anyone can register their dog as a service animal by simply paying a fee to the website. Landlords are entitled to written verification that the resident has a disability and a disability-related need for the dog.

10.    Question:
My resident is requesting a handicapped parking space. She has a handicapped license plate. But the space she is asking for is only about 25 feet away from her current parking space. Do I need to allow her to change spaces? I think her current space is already close enough to her unit.

Answer:
Yes. If the resident is requesting a certain parking space and that space is available then you should allow the resident to change spaces. Landlords are not allowed to decide what the resident needs or doesn’t need because of her disability. The resident is in the best position to determine what is necessary for her disability.

This article is for general information purposes only. Laws may have changed since this article was published. Before acting, be sure to receive legal advice from our office. The law firm specializes in landlord/tenant, collections, fair housing and business and real estate, with offices throughout California. Property owner’s and manager’s with questions regarding the contents of this article, please call 800.338.6039.

FBS Hosts first Educational Open House!

Posted: 27th March 2015 by Melissa in Education
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Our first open house last night was a great success! Thank you to those that attended! We hope you walked away with some new and valuable information!

For more information about future events email melissa@fbs-pm.com

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Rent Sense: What Does 2015 Mean to Me?

By Neil Fjellestad and Chris DeMarco

We want to share some data points that might be great news for your independent rental ownership, in 2015 and for several years to come. Because these are often shared separately over several years and not always presented within your context these data points and/or factoids remain undiscovered to our rental business. Let’s connect some dots.

Let’s consider this demographic fact. In the last U.S. century 1965 was the largest national high school graduating class. In this century we have matched or exceeded this national class size several times so far in the initial 15 years. This group of millennials is primarily renters that have been held captive during the recessionary lag in job creation and employment upward mobility. With the recovery maturing, so will their rental requirements. Trading up among renters will happen more readily than in the “for sale” segment. Floorplans, feature-benefits, common areas, neighborhoods, walkability, public transportation and drive times are all up for review.

Let’s look at the other end of the demographic spectrum. The age of the typical first home buyer is currently 31 years. The age of the typical repeat or trade-up home buyer is 52 years. Many of these potential repeat buyers do not physically need bigger homes and are not sufficiently motivated by perceived financial benefits to tie themselves to more real estate. Their primary financial goal is having enough income to retire within a reasonable timeframe. In more cases, they might be motivated to sell as the market comes back but then take other steps to invest toward retirement goals. In a separate lifestyle decision more boomers are becoming “renters by choice.” In other households, finances and/or credit circumstances that were created or exacerbated by the “great recession” require them to tailor their housing requirements and convert to rental alternatives.

Now, let’s complicate this picture with a surge of immigrants that generally start as renters in our communities. Regardless of how this “immigration” political football rolls you can be sure that certain employment facts will play out: a) most surviving employers have held back employment growth until they feel the confidence of several years of recovery b) pending ideas and entrepreneurs to drive them will create another generation of companies requiring new employees and generating a new source of competition for wages and benefits c) segments that were damaged in the recession like construction will come back and will compete with a continued surge in infrastructure repair and build out d) we need all the employable workers inside our borders whether “legal” or “illegal” e) we will probably continue to bring a growing percentage of our manufacturing and energy exploration back home f) in addition, we will need a steady flow of young people that like math and science which we need to import g) there are “hot spots” all over the world where young people that want to live and/or get ahead need to get out of where they are while back in the U.S. we often have not naturally produced sufficient and/or sufficiently motivated workers.

These and other data points will result in a flood of new potential renters in high employment centers that provide full economic support for this primarily young adult demographic with fun-loving boomers in the mix; such as southern California regions.
To be continued….. There’s more to consider, including the current and future supply of rental housing. Will existing single homes recently added to the rental inventory stay as rentals or will these be converted back to the “for sale” inventory? How about rental housing developers, will they anticipate and supply the rental stock necessary? How about the attitude of the” post-recession new generation” of renters? How much can they afford? What will be expected from their landlord? These are questions to be considered in a sequel.

KTS Legal Update March 2015

Posted: 13th March 2015 by Melissa in Legal Questions
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Kimball,Tirey&St.JohnLLP

Landlord/Tenant Questions & Answers
Ted Kimball, Esq. March, 2015

1. Question:
Our tenant owes us back rent and is stating that he is probably going to file bankruptcy. We’ve been trying to work with him but are getting nervous now. Do we lose all the back rent if he files bankruptcy?

Answer:
It depends. If he files a Chapter 7, there is little hope. If he files a Chapter 13, you may receive all or a portion of the back rent.

2. Question:
If a tenant’s rent is due on the first day of the month and there is no grace period, what is the earliest date I can serve a 3-day notice to pay rent or quit?

Answer:
You can serve a 3-day notice to pay rent or quit when the rent is legally delinquent. California law requires that one business day must expire before the rent is considered delinquent. So, if the first day of the month falls on a weekend or holiday, you must wait until the day after the first business day expires before serving the notice. If the first day falls on a business day, the notice can be served on the second of the month.

3. Question:
If the landlord accepts a rent payment from someone other than the lessee, does that give them any rights?

Answer:
It could if they are occupants of the property. This could convince a court that they are now tenants under a verbal agreement.

4. Question:
There was a grease fire in one of our rental units due to a tenant’s lack of knowledge of cooking. What is my obligation to provide alternate accommodations for this tenant? Am I required to keep her as a renter?

Answer:
You are not obligated to put the tenant up. You may have a right to evict her based upon waste of the unit, which requires a 3-day notice to quit.

5. Question:
The tenants living in one of our apartments signed a one-year lease which states that there will be no pets allowed. They now have two cats in the apartment and are only in the second month of the lease. We served a 3-day notice to perform covenant or quit. They have chosen to leave. The rent for the entire month was paid. Are they entitled to the prorated amount of rent for the unused portion of the month?

Answer:
No, they are liable for the remainder of the lease or up to the time you relet the premises, whichever occurs first.

6. Question:
My tenants paid an extra deposit for a pet. They gave away the dog after 2 months. Now they are asking if the pet deposit could be returned.

Answer:
You do not have to account for the use of the deposit until 21 days from the date they return possession of the premises, so don’t refund any of the deposit.

7. Question:
I rented an apartment to a young man; he signed a one-year lease and paid the deposit and first month’s rent in full. He moved in today and less than 24 hours later, he is requesting to get out of his lease because another apartment that he prefers became available. Is there any kind of buyer’s remorse on signing a lease?

Answer:
Your tenant is obligated to pay rent through the lease term or until the time the premises are relet, whichever occurs first. There is no buyer’s remorse.

8. Question:
In one of my books on landlord/tenant law, it says I can require the tenant to keep up with all building and health codes instead of me in exchange for
lower rent. Does this mean I would not be liable for any habitability defects?

Answer:
California law requires that all residential landlords have given an implied warranty of habitability of the premises that cannot be waived by the tenant. The only exception is if the tenant agrees to make necessary repairs to render the property habitable in exchange for a rent reduction during the time of uninhabitability.

9. Question:
My tenant claims he paid the rent by mailing us a money order. We never received it and he says we should have received it. Who would bear the loss if we do not find the missing payment?

Answer:
Under most leases, it is normally the responsibility of the tenant to ensure the landlord receives payment. Since it is up to the tenant to choose the method of delivery, he or she bears the risk that the payment is in fact made. However, some landlords will determine the method of delivery. In those cases, the landlord may bear the risk that the payment reaches the landlord.

10. Question:
One of the recent applicants to our apartment community claims he is paid “under the table”. How do I verify his income?

Answer:
You really can’t, and because he is committing fraud, you should not consider this a legal source of income. If they fail to otherwise qualify, deny his rental application.

11. Question:
One of our tenants was recently arrested and has not paid the rent. We served a notice by “nail and mail” and it has been over three days. How do we serve the unlawful detainer (eviction) on the tenant while in jail?

Answer:
Most jails will allow your process server to serve the tenant while in jail. It can take several hours before they are able to pull the inmate up, but your process server can be waiting for him or her and legally serve them while incarcerated.

12. Question:
One of our residents served us with a written 30-day notice and has failed to vacate after 30 days. Can I start the eviction process or must I serve a 30-day notice first?

Answer:
If a residential tenant serves the landlord with a written 30-day notice and the rental term is month-to-month, the landlord may immediately file an unlawful detainer (eviction) action in court on the 31st day, providing the 30th day fell on a business day.

Ms. Management

Posted: 20th February 2015 by Melissa in Ms. Management
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Ms Mgmt,

Q- Here’s my situation. I’ve been hired by a start-up PM Company that is going to go from 0 to 2500 apartment homes in the next 3 months. My task is to efficiently transfer this portfolio and bring these communities into a normal operating region. Obviously, this was presented to me as a unique career opportunity. I’m excited and prepared. However, any help you could provide is appreciated.

A – I’m pleased for you. This is definitely a challenge that will test your leadership and management skill set. Let’s break it down. Your ability to plan needs a complete inventory of resources and challenges. This means that each community has a thorough review of the financials, a detailed property walk and conversations with key people. From these inputs you will get a sense of the resources and challenges you can count on for an initial 90-day plan. Now organize the initial 90 days with an experiential checklist that you can utilize for orientation, communicating expectations, and evaluating results.
Since I don’t know the people or resources available to you I can’t predict how much hiring will be needed but I can predict that well designed job descriptions and performance standards for all your key employees at each community level is an important initial priority.

These documents will give structure to your expectations. If you utilize these consistently in your initial conversations with existing staff at each community you can discover the culture that is in place and how to respond to people and circumstances. In your hiring interviews you can design and ask experience based questions that reveal your needs as well as the skills and attitudes of each candidate. Your orientation and ongoing coaching communication will be direct and your intentions will be transparent. Quality verbal and written communication gets you a quick start to realistic goals and objectives for the initial 90-day program and becomes the basis for goal selection and performance review for each 90 days thereafter. You need to build a defined reputation for your region to insure your leadership is followed. Hope this helps and enjoy this unique opportunity to excel.