SS126: Real Estate Asset Management

SS126: Real Estate Asset Management

Welcome to Strategy Saturday; I’m Charles Carillo and today we’re going to be discussing Real Estate Asset Management. In the world of real estate investing, there are a number of different roles and responsibilities required for the successful operation of a commercial property. In this episode, Charles discusses what real estate asset management is, and how why it is important to the overall success of an investment.

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Talking Points:

  • Real estate asset management is an essential part of every real estate investment company.
  • Many people will confuse asset management with property management but each has their own specific roles and responsibilities.
  • What is Real Estate Asset Management?
    • Real estate asset management is the process of maximizing a property’s value and returns on investment. This is normally achieved by strategically reducing expenses, and increasing all income streams at a property while reducing potential risks and liabilities for the owners.
    • While the property manager is mainly handling the day-to-day (on the ground) operations of a property, the asset manager is consistently speaking with the manager, reviews the property’s performance, and making changes to further increase the value of a property.
    • In the realm of syndications, asset management is handled by the general partners. A small landlord who has contracted a third-party property management company is usually handling the asset managers themselves. Wealthy investors or family offices may hire a third-party asset management firm to oversee their real estate investments. Many private banks for high-net-worth individuals, will offer real estate asset management services as well.
  • Real estate asset managers assist the owners throughout all 3 phases of property ownership; acquisition, holding, and disposition. A good asset manager knows the asset class and understands the geographic market and the tenant base that will be occupying the property.
  • Responsibilities of the Asset Manager
    • Making sure that property returns are maximized
    • Reducing expenses
    • Hiring key people; including the property management firm
    • Working with the property manager to correct current issues, while preventing future issues
    • Hiring contractors for large capital expenditures projects (roofs, porches, amenities, parking lots, etc.)
    • Reviewing the progress of large capital expenditure projects
    • Negotiating contracts with contractors, vendors, etc.
    • Working with leasing agents; reviewing rental prices
    • Performing market research
    • Minimizing unit vacancy
    • Risk Management
    • Adding additional income streams to properties (storage, laundry, meter utilities, etc.)
    • Reviewing marketing and marketing campaigns
    • Communicating with investors and preparing long-term financial projections
    • Creating capital and operating expenditure budgets.
    • Reviewing key performance indicators
    • Allocating capital and investment resources to add the most property value
    • Continually evaluating, monitoring, and updating the property’s financial strategy
    • Reviewing offers from interested buyers and reporting back to owners
    • Finding lenders and reviewing their proposals
    • Assisting with property transactions
  • Real estate asset management is focused on maximizing property value. They work with the property manager to achieve this goal, while assisting the owners with the operations of the property.

Transcript:

Charles:
Welcome to Strategy Saturday; I’m Charles Carillo and today we’re going to be discussing real estate asset management.

Charles:
Have you always wanted to invest in real estate but didn’t have the time, didn’t know where to find the deals, couldn’t get the funding, and didn’t want tenants calling you? Since 2006, I’ve been buying incomed producing properties in great locations that provide us with consistent passive income while we wait for appreciation in the future and take advantage of tax laws while we’re waiting. And unlike your financial advisor, we invest alongside our investors in every property we purchase. Check out and invest with harborside.com. If you like the idea of investing real estate, if you like the idea of passive income, partner with us at an invest with harborside.com. That’s invest with harborside.com.

Charles:
Real estate asset management is an essential part of every real estate investment company. Many people will confuse asset management with property management, but each has their own specific roles and responsibilities.

Charles:
What is real estate asset management? Well, real estate asset management is a process of maximizing a property’s value and return on investment for the owners. This is normally achieved by strategically reducing expenses, increasing all income streams outta property, while reducing potential risks and liabilities for the owners. Now, while the property manager is mainly handling the day-to-day on the ground operations of a property, the asset manager is consistently speaking with the manager, reviewing the property’s performance, and making changes to further increase the value of a property in the realm of syndications. Asset management is handled by the general partners. A small landlord who has contracted a third party property management company is usually handing the asset management themselves. Wealthy investors or family offices may hire a third party asset management firm to oversee their real estate investments. Many private banks for high net worth individuals will offer real estate asset management services as well.

Charles:
So real estate asset managers assist the owners throughout all three phases of the property ownership cycle, acquisition, holding, and disposition. A good asset manager knows the asset class, understands the geographic market and the tenant base, they’ll be occupying the property. Now, some of the responsibilities of the asset manager include making sure that the property returns are maximized, and that’s number one, reducing expenses, hiring key people, including the property management firm, working with the property manager to correct current issues while preventing future issues. Hiring contractors for large capital expenditure projects such as roofs, porches amenities, being renovated or being added parking lots. Reviewing the progress of large capital expenditure projects. So really managing those and not leaving that management to the property managers that, as a manager, is really taking control of that. Negotiating contracts with contractors, vendors working with leasing agents, reviewing rental prices and setting the price for the units with the property manager.

Charles:
Performing market research, minimizing unit vacancy risk management. So making sure that the correct insurance policies are in place and that when touring the property, there’s nothing that’s unsafe that could be a an issue or a risk to tenants that could end up costing the owner’s money. Adding additional income streams to the properties such as storage, laundry meter, utilities reviewing marketing and marketing campaigns, communicating with investors owners, and preparing long-term financial projections. Creating capital and operating expenditure budgets. Reviewing key performance indicators, KPIs, allocating capital and investment resources to add the most property value and continually evaluating, monitoring, updating the property’s financial strategy reviewing offers from interested buyers and reporting back to owners, finding lenders and reviewing their proposals and assisting with property transactions. Now, real Estate asset Manager is really focused around maximizing the property value. They work with the property managers to achieve the goal while assisting owners with the operations of the property. So I hope you enjoyed. Please remember to rate, review, subscribe, submit comments and potential show topics@globalinvestorspodcast.com. Look forward to two episodes next week. See you then.

Announcer:
Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Syndication Superstar, LLC, exclusively.

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