Betting the Urban Pharm

As property managers of rental properties in the core of Grand Rapids, Ryan VanderMeer and Pat Coffin may be just about as far from the description "slumlord" as you can get.
At the end of July, VanderMeer and Coffin will be wrapping up their first Urban Farm garden competition where they have encouraged tenants in any of the 225 single-family homes and small multi-family units that they manage to plant vegetable, flowers or "some type of cool garden that we don’t even know about" for cash prizes.
In his blog, VanderMeer details how he once tried to protect himself from a threatening ghost at the company's 100-year-old office using a stapler, gives tips on being a good neighbor, or just encourages the planting of tress with the simple statement: "Earth, we love you."

But most importantly, boyhood friends Coffin and VanderMeer, both 24, seek to revitalize local housing in Grand Rapids by cultivating a sense of neighborhood.

Good Conscience and Good Business
Judging from their success over the past two years, the concept can be profitable for investors as well.

“From day one, we wanted to challenge the common belief that landlords didn’t care about tenants or their neighborhoods,” says VanderMeer, who formed the Urban Pharm firm about two years ago.  And the name? "A pharm is an urban home in a neighborhood where new life is growing from the ancient soil for the benefit of the resident and community as a whole,"  VanderMeer writes in his blog.

Urban Pharm has five full-time employees managing properties, about 90 percent of which are in Grand Rapids and the balance in Wyoming and Kentwood.  The company has management contracts with investors from around the country who support their approach. 

“Ryan and Pat genuinely care about their investor’s and tenants, and much more than the bottom-line,” says Derek Coppess, principal and founder of The Coppess Group, a Grand Rapids-based real estate company formed in late 2003 to identify and acquire undervalued real estate in metro Grand Rapids. Coppess says he has acquired and rehabbed more than 150 units in the Grand Rapids area.
He became acquainted with Urban Pharm in 2006 when he purchased a blighted property in the 300 block of Prospect NE that had suffered through years of neglect and had a host of code violations. “It was an ugly house on an otherwise beautiful street filled with very proud homeowners,” Coppess recalls.
“The previous owners paid little attention to who was renting the property,” says Barbara Lester, executive director of Heritage Hill Association, an organization serving the residential neighborhood just east of downtown Grand Rapids. The association received a number of calls about fighting, prostitution, and suspected drug use at the four-unit dwelling. “It was very disruptive to the neighbors,” Lester says. Eventually, the property fell into forclosure and was vacated before it was purchased by The Coppess Group. 
After performing a major renovation on the house, Coppess sought out a firm that understood the value of strengthening a neighborhood along with managing a property.
True to form, VanderMeer and Coffin joined a meeting of block club homeowners when they were tapped to manage the rental and “neighbors shared concerns about the property,” Lester says.  Urban Pharm managers made it clear at the meeting that they believe property and neighborhood rely on one another for strength.
 “We believed we could do this without sacrificing profits for ourselves or property owners,” says VanderMeer, highlighting the fact that the residence has maintained 100% occupancy since March when the remodeling was finished. “It’s now a beautiful investment property that we’ll hang on to for a long time,” Coppess says, adding that he has turned over management of more than 50 other properties to the company. “Urban Pharm is way above average.”  

An Early Partnership
Coffin, a Grand Rapids native and 2003 graduate of East Kentwood High School, was employed with Gulfstream Financial prior to starting Urban Pharm.  He manages all sales and marketing tasks, including property showings and advertising. His experience managing rental properties provides Urban Pharm with the expertise to carry out their tenant-focused philosophy, which in turn, improves tenant retention.
VanderMeer, also a native of the area and graduate of East Kentwood, worked with Coffin at Gulfstream Financial.  VanderMeer is the main point of contact for all property owners and new investors. 
Lester explains that strengthening the livability and improving the appearance of a neighborhood relies on investors to make necessary improvements on the interior and exterior and ensure this care continues.  “Flipping properties for quick profits can be damaging to the vibrancy of neighborhoods,” she says.  In many cases, the new buyer of refurbished property lacks the interest, resources, or skill to keep up the property’s appearance.

Urban Pharm has taken the role of a property manager another step; doing more than approving tenants, collecting rent and fixing leaky faucets.  They also reach out to engage their tenants and neighborhoods in creative ways to instill a sense of ownership and pride by providing opportunities to connect with neighbors and improve their neighborhood’s appearance.

Andrew Madge has rented from Urban Pharm for nearly two years and finds their management style refreshing after experiences with other firms in the nation and the United Kingdom.  “They really care about their tenants and they work hard to ensure everyone is comfortable and safe,” Madge says.

Cultivating the Urban Pharm
For Tanya Walker, it's remarkable that the property managers would encourage single-home renters and small apartment complexes to take up gardening. “When I started, the yard was mostly dirt and now I have some grass, flowers, and a garden," Walker says.  "It’s a great feeling.” Tenants are welcome to enter the competition with a garden of any kind.  Smaller apartment complexes are provided a piece of land and encouraged to partner with other tenants to share the labor and care for the growing crop.  
Urban Pharm staff will come to evaluate each garden on overall appearance, creativity, crop yield if applicable, and the garden’s compliment to the property and neighborhood.  “It’s a way to encourage our tenants to get to know each other and develop a sense of pride in the neighborhood,” VanderMeer says.  His company has made arrangements with local food pantries to receive donated items providing tenants the opportunity to donate a portion of their harvest for those in need of fresh vegetables.   
Urban Pharm takes as much care in selecting their property owners as they do their tenants.  “We look for investors who show a commitment and ability to finance the maintenance of the property, VanderMeer says.  Keeping everything up to code and making other investment to improve the curbside appeal of the home strengthens the appeal of the property, and “improves retention periods among tenants.”
Necessary upkeep can mean one thing to a property owner and quite another to a property management firm like Urban Pharm.  Finding investors who value the upkeep and quality of their dwelling is a coveted client because, VanderMeer adds, “it allows us to offer the best service to tenants and lowest vacancy rates for property owners.”  
Randy Creswell, a private investor, has turned over eight properties to Urban Pharm.  After researching multiple firms in the area, he was less than enthused about their concern for tenants and neighborhoods. Turnover of tenants can be cumbersome and costly for property owners and disruptive to the quality and appearance of neighborhoods, Creswell says.
Typically property management firms move quickly to begin eviction proceedings and add late fees when tenants don’t pay on time.  “Urban Pharm has the right idea – I’d rather them use judgment when addressing tenant issues rather than punitive fees and threats of eviction,” he says.

Tom Mulligan is a freelance writer in Grand Rapids, and a board of the Grand
Rapids Community Media Center.  He can be reached at [email protected]

Photographs by Brian Kelly - All Rights Reserved

Brian Kelly is Rapid Growth's managing photographer. He makes images...both still and moving. You can follow his adventures here on his blog.