Tallards carve out their niche in tough rental market

Brothers Jeff and Ed Tallard, owners of Tallard Apartments, are making their family partnership work despite today's tough rental market.

Their company office � at 1445 Regent St. � is close to college student housing, a niche that has taken a hit in recent years with the boom of new high-rise buildings.

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Their success was built partly on learning to recognize a profitable rental.

"Ed always had a very good idea of what a property would rent for," Jeff Tallard said. "Once you know that and you look at enough property, you learn to recognize value."

He thinks some make the mistake of paying too much for a property without understanding the cost of maintaining older buildings.

"That, coupled with the extra wear and tear caused by parties hosted by college students, can catch some first-time investors by surprise," he said.

The Tallards also learned that a few sacrifices and living frugally can pay off.

Jeff Tallard was selling paper and packaging for Harder Paper of Madison when he and his wife, Karen, bought their first campus rental property in 1985 with his sister, Sue Tallard Sklare, and her husband, Scott.

The house at 115 N. Bedford St. was owned by the Tallards' great-grandmother and then their great-aunt, who was born there. It was purchased from her estate and Ed Tallard, who was studying economics at UW-Madison, helped with restoration.

The home, which the Tallards still own, was the start of the partnership that lasted about four years. Then around 1987, the two couples amicably decided to go their own ways and equally divided the eight properties they had acquired. The Sklares continue to maintain and grow their own company, S&S Properties.

Eventually, Karen Tallard quit her job selling real estate to manage the properties that the couple continued to buy. The Tallards sold their home and moved to a rental home they owned near other properties in a student neighborhood. Their two boys helped mow the lawns.

Jeff and Karen moved 14 times in 30 years of marriage, each time using the profits from the sale to buy more apartments near campus.

When Jeff Tallard's mother, who had raised eight children, became ill with cancer in 1992, it prompted him to evaluate his life and pursue his dream of working full time for himself. Jeff Tallard, 50, is the second oldest.

At the same time, Ed Tallard, who had made the legendary moving displays for the East Side Ella's Deli and Ice Cream Parlor, had started a company with deli owner Ken Balkin to make and sell custom displays to other businesses.

After discussion, the Tallard brothers decided the time was right to go into business together, and Karen Tallard chose to give up managing properties.

In 1991, the brothers purchased their first property, a two-bedroom home that a man had been remodeling slowly for 25 years near Old Middleton Road. It was filled with empty beer cases and lumber and had no plumbing fixtures. Squirrels lived in the attic.

Ed Tallard, 40, second youngest in the family, slept on the plywood floor while fixing up the house, which the brothers sold a couple of years later. They invested the money in campus property.

At the same time, they came up with a game plan and purchased a computer.

When they had grown to about 28 properties, they realized they needed to hire people who possessed the skills they didn't have. They hired Peter Lemberger as a manager and he became a partner of some newly acquired properties soon after.

"We never could have experienced the growth we have had without Pete. He has great foresight and common sense," Jeff Tallard said.

Lemberger now runs the day-to-day operations of the company along with office manager Matt McGrady. The Tallards have hired others and now have seven full-time and about seven part-time service workers. They get occasional help from other family members and annually hire a crew to help with the Aug. 15 turnover.

Ed Tallard also has created an elaborate Web site, which includes layouts of most of their properties.

The company has purchased about 150 properties but now has about 110 in three partnerships. They are selling a few properties so what they own is closer to their office, reducing the amount of overhead because maintenance workers will be driving less.

Both Tallards have purchased other properties as investments and have other projects they are involved in. They both play in bands and have other outside interests. For example, Jeff Tallard is helping the East Madison Community Center raise money for a new facility, and Ed Tallard was a Big Brother for six years.

The Tallards said they found some good buys in the early years when the rental market was strong, and that helped the cash flow.

After they bought a property, they would look for ways to add value with items such as dishwashers, new paint or new flooring.

"Part of our philosophy is 'do the worst first,'" Jeff Tallard said. "It has such a dramatic impact."

After a year or two, they would refinance and buy another property, a system that works great when rents are going up and interest rates are going down, said Jeff Tallard, who noted that bankers play a huge role in the success of a rental property business.

Then they began to grow rapidly, buying 20 properties in one year.

The Tallards found that getting good advice from a good commercial real estate broker is helpful and they got good advice from Greg Shimanski. Jeff Tallard said he also has read some helpful books.

The brothers have gotten good at quickly assessing whether a property is a good deal and then moving on it quickly. They also have learned not to nitpick every flaw to make the sale and in turn it has created good will for the next one.

In the early days, the Tallards did much of the physical work themselves, cleaning and sprucing up their properties.

"We spent a lot of time taking stuff to the dump," Ed Tallard said.