After the Purchase: Multifamily Asset Management

Asset management is all about having systems in place ready to roll before you close on an apartment investment property. If things are not running right at your multifamily property, it is likely that one of these four fundamentals of asset management are being neglected.

We recommend involving your property management team early and often. We do not self-manage our properties, and neither do our clients. We are investors, not landlords. We view our time as best used finding our next deal, not banging on doors collecting rents. Not only will engaging your property manager from the onset give you excellent sub-market info, but bringing them in as part of your team prior to purchase will make the management transition that much smoother.

Management – When you buy an apartment building, your job is not being on-site and dealing with the property day-to-day, it is managing your management team. Make sure that systems are in place prior to taking over the property.

• How often will you get a status report of collections and delinquencies?
• When will you receive your monthly financials?
• What is your communication process?
• Setting up those expectations with your property management team before you close will eliminate many of these issues.

Maintenance – Make sure that your team is handling the process of maintenance requests quickly. This has multiple beneficial effects: making current tenants maintenance requests a priority will create goodwill with your current tenants through your takeover of the property; happy tenants send you referrals ?; and they are less likely to balk at a rent increase come renewal time.

Marketing – If your management team is not posting daily in Craig’s List, find a new manager. Make sure that all marketing avenues are properly tracked so that you will know where to spend additional dollars. Depending on your property’s visibility, don’t overlook leasing signs. You should be continuously marketing your property. Nothing is better than a waiting list!

Leasing – Make sure that the leasing person has a clear procedure for prospective tenants.

• Have you called your property as a potential tenant?
• Was the person who answered the phone courteous and clear?
• What is the follow-up policy for prospective tenants?
• *Did they ask where they found out about the property? This is essential so that you can keep track of what marketing efforts are paying off.
• Investing in apartments is based in fundamentals; asset managing that property is as well. Examine the problems that you may be having at your property, they are likely to be based in on of these four areas.

Make sure that prior to purchase you have systems in place that will allow you to manage your property management team remotely. Hammering out these systems now are the secret to scaling your real estate business quickly.