Here comes 2024 - How about Setting New Goals and Tracking their Progress?

[Jorge Abreu]

In my opinion, setting specific goals and evaluating progress are critical elements in developing a profitable real estate investing firm! 🙌

There are various levels of goals, and here are some examples:

Company Objectives: These are the big-picture aims that set the course and vision for the entire organization. They could include achieving a certain portfolio size, increasing investor returns, expanding into new areas, and developing a strong image and brand for your organization.

Department Goals: Each department within the organization has its own set of goals, such as property management, leasing, maintenance, or finance. They are aligned with the company's aims and concentrate on department-specific objectives such as boosting resident happiness, optimizing operational efficiency, introducing cost-cutting initiatives, and streamlining financial operations.

Individual Position Goals: Each employee has individual position goals that are tailored to their specific tasks and responsibilities within the firm. These aims may include targets such as boosting lease conversions, minimizing maintenance response times, achieving a specific occupancy rate, or improving financial reporting accuracy.

As a real estate investor and coach, I've discovered the value of using key performance indicators (KPIs) to drive success in properties and business schools. Weekly KPI checks allow us to make timely modifications and guarantee that we are genuinely making an impact. These KPIs function as vital measurements, tracking our progress and highlighting areas where we may improve.

Keep an eye on the following KPIs:

Leads and Leases: Tracking the number of leads generated and the conversion rate into signed leases allows you to evaluate the effectiveness of your marketing and leasing tactics, assuring a continual supply of new residents.

Renewal Rates and Lease Trade Out: Monitoring the percentage of lease renewals and lease trade-outs (residents upgrading or downgrading units) provides insight into resident satisfaction as well as the opportunity to maximize rental income through optimal lease terms.

Occupancy - Physical & Economic: Tracking both physical (actually occupied units) and economic occupancy (rental income collected) helps monitor general demand, pricing strategy, and the property's financial health.

Current and Past Due Delinquency: Tracking the percentage of current and past due rent payments is critical for cash flow management and spotting potential collection issues or the need for lease enforcement.

Work Orders and Reviews: Tracking the volume and timeliness of work orders, as well as resident reviews and satisfaction ratings, assists in determining the quality of property management and maintenance services offered.

Actual vs. Budgeted Capital Expenditures (Capex): Comparing actual capital expenditures (Capex) with budgeted amounts enables effective cost control and appraisal of the property's long-term maintenance and upgrade needs.

Units Renovated Per Month & rentals on Renovated apartments: Tracking the number of units renovated each month and comparing rentals on those apartments to non-renovated units aids in determining the return on investment for renovation projects and directs future capital allocation.

NOI Pro Forma vs Actual: Comparing the predicted Net Operating Income (NOI) to the actual results allows you to assess the property's financial performance, including income production, expense management, and the accuracy of early estimates.

Monitoring these key performance indicators (KPIs) for your multifamily real estate assets provides significant insights into their operational efficiency, financial performance, and resident satisfaction, allowing you to make informed decisions and drive the success of their properties.📈

➡️ What you don't measure, you can't manage.⬅️

I also believe strongly in the potential of backward engineering goals. It all comes down to breaking down our annual goals into manageable phases and targets. Assume we want to close 12 agreements this year. We know that in order to close one contract, we'll need to underwrite approximately 100 deals. We can better manage our goals and focus on consistent action by dividing them down into smaller activities.

Tracking the number of deals underwritten and submitted is a weekly ritual you don't want to miss. It's essentially putting our progress under the microscope in order to make those all-important tweaks to our tactics. You've heard the expression "knowledge is power," and when it comes to real estate investing, you need to know your figures. It all comes down to accountability and keeping our eyes on the prize.

Not to mention our dependable project management software. This provides us with a consolidated platform for tracking tasks and communicating with team members. It assists us in being organized, holding ourselves accountable, and keeping everyone on track with our objectives. Soon, I'll tell you more about this software.

We can build a solid basis for our real estate investing business by creating clear goals, tracking success with KPIs, and utilizing effective tools. It's not just about closing sales; it's about taking constant action, assessing our progress, and making modifications along the road.

Action is key, and knowing your numbers is the path to success.💥

Wishing you all a Happy New Year!!✨