BOUGHT YOUR FIRST DEAL, SO WHAT’S NEXT?
Finally 🙌! It seems as though all your hard work, long hours, and endless negotiations have finally come to an end. You’ve found a property with excellent investment potential, pooled together your investors, and now you’ve closed on your new apartment complex. You have drastically expanded your real estate portfolio and the rest should be a piece of cake, right?
Well, that all comes down to how well you and your team can jump into the day-to-day management of the newly-acquired asset. You’ve successfully convinced a group of people to give you their money to make them more money, and now it’s time to start using your knowledge and resources to bring the results (and the money) to the table.
You look up and all of a sudden you have multiple units and tenants to manage, and it’s new and exciting, but it may also seem slightly overwhelming. You’ve successfully planned this deal from top to bottom, and it’s all coming together. You’ve made it this far and now is not the time to get intimidated. So once the property keys have been handed over, what’s next?
Check out these 5 quick tips to jump start your new real estate asset management position:
1) Numbers Talk, So What Does the Budget Say?
You’re no rookie to the numbers game. You analyzed this property’s projections forwards and backwards, but the analyzing is a never-ending job. Your main job is to protect your financial investment, as well as your investors’ financial investments.
This requires you to constantly be aware of the budget and performance of your property to ensure its financial success. You need to continuously compare your projected rental income with the projected monthly rental expenses, as well as your realized rental income and expenses.
Your expenses should not only include a mortgage payment (if applicable), taxes, utilities, and insurance, it should also include potential expenses for costs related to the property such as maintenance, emergency reserves, vacancy reserves, and a property management company fees.
2) Put Your Property Manager In Place?
Part of your deal package and presentation should have outlined who will manage the tenants and units, whether you will take on this role, or if you’ve chosen a property management company to assume these responsibilities.
If you’ve already put a property manager in place, you should establish a process to get updates on a consistent basis in regards to the performance of the property and any issues that need to be addressed. These updates should be passed along to your investors as well.
If you have not chosen a property management company yet, you should consider the benefits of hiring a property management company that can find and retain tenants, maintain the property, execute leases, and collect rent, amongst other things. When choosing a property management company, you should make sure they have experience managing properties similar to yours and ask for references to get a better idea of the quality of their services.
3) Inspections Never End
You may think that once you’ve closed on your property that all the inspections have ended, however, they’ve only just begun. Delegating tasks to your property management company will, undoubtedly, allow you to play a more passive role, but care should be taken to follow up on the tasks that you delegated to the management company to ensure that they are completing the tasks in a timely, efficient, and satisfactory manner.
Walking through apartments and doing property inspections during turnover periods can help you gauge how well your property management is maintaining the units and if there’s any deferred maintenance that is not being addressed.
4) First Impressions Only Happen Once
When you and your investors acquire your new apartment complex, it’s time to let everyone know that the complex is now under new and improved management and that things will soon be changing for the better. You will want to change the community’s opinion of the complex by advertising the new management and the improvements that will soon take place.
It’s important to have a new sign that announces the new management, as well as immediately focusing on improving and maintaining the exterior of the property with improved landscaping, lighting, etc. You and your investors will be aiming to raise the rents of your units to increase your overall bottom line, Net Operating Income (NOI).
5) Make A Dollar Go A Long Way
Just as important as raising rent, reducing unnecessary expenses and costs will also lead to higher cash flow. You will want to make sure you and your property management team is consistently evaluating the expenses and finding ways to reduce expenses and hidden costs, without impacting the quality of the operations.
Attention should also go towards finding other services to provide your tenants at additional costs to also increase cash flow. This could include offering rental insurance, valet trash service, or installing vending machines throughout the property.
Watch the Best and Learn From the Best
Even though these are some important aspects to address when acting as a syndicator, or things to expect from your syndicator if you are acting as an investor, this is by far, not an exhaustive list of all the duties and responsibilities of asset management in apartment syndication.
It is recommended that first-time apartment syndicators gain the necessary knowledge and experience by working their first deal with an experienced apartment syndicator, who can provide resources, credibility and inspire confidence in the deal’s investors.
Dwellynn is a multifamily syndication firm with experience in acquiring, repositioning, developing, and managing affordable, quality multifamily residential properties.
Here at Dwellynn, our reputation proceeds us, and we are recognized as a fast-growing firm that provides our capital partners with the opportunity to invest in real estate on a larger scale, while also providing better than market returns.
Click here to Get in touch with us today to become a capital investor in one of our upcoming projects, securing great returns and the necessary experience in multifamily syndication.