SS190: Mastering Real Estate Asset Management Techniques

SS190: Mastering Real Estate Asset Management Techniques

Mastering real estate asset management involves implementing a range of techniques to maximize the value and profitability of your properties. In this episode, Charles discusses some of those key strategies and best practices.

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Talking Points:

  • Real estate asset managers focus on improving the property’s financial performance, thus maximizing the property’s value. The asset manager is not to be confused with a property management company that focuses on the day-to-day duties of operating the property. In contrast, the asset manager works alongside the property manager and oversees them as they both work towards executing the owner’s business plan.
  • The asset manager may be the owner of the property, maybe an employee of the owner, or a 3rd party company hired by the owner.
  • Asset managers have several roles and responsibilities:
    • Property Management Oversight: Reviewing property management activities, including leasing activities, maintenance, tenants, and capital expenditure projects. Asset managers regularly visit properties to inspect operations first-hand.
    • Tenant Management: Asset managers continually review occupancy rates, lease renewals, tenant satisfaction, collections, lease negotiations, and tenant problems.
    • Strategic Planning: Asset managers create short-term and long-term strategies around the current market dynamics and financials to create performance goals for the property management team.
    • Risk Management: Managing the property’s risk exposure. This includes economic risks, market risks, operational risks, financial risks, and legal risks.
    • Monitoring Asset Performance: Consistently monitoring the performance of assets against industry benchmarks and the property’s business plan. This entails reviewing performance metrics and key performance indicators (KPIs) regularly.
    • Portfolio Management: Asset managers might be hired to oversee an entire portfolio of properties for owners and investors with multiple properties.
  • Mastering real estate asset management involves being knowledgeable and experienced in the type and class of property and the specific market. Asset managers must be well-versed than other team members since they wear many hats.
    • Understanding Financials: Asset managers need to be able to read and understand financial statements, including trailing 12-month financials, rent rolls, and tenant analyses. Cash flow management, creating budgets and forecasts to plan for future income and expenses.
    • Market Knowledge: Understanding the market is paramount to recognizing market trends, economic indicators, and demographic shifts affecting their tenant base and the property’s value. Knowing current rents, current sales, and recently proposed and approved projects.
    • Team Building: During the property hold period, different events and projects will require new people to handle them. If the property manager does not meet expectations, they might be changed. A good asset manager will have the relationships to find another property manager better suited for the property. Large capital expenditure projects might require new contractors to be found and vetted. Your property manager’s chosen eviction attorney is dragging their feet; a good asset manager will recognize this, speak to the current attorney, and possibly find another.
    • Construction Knowledge: One asset management trait that is not discussed much is having asset managers with construction knowledge. I am not saying that they may need to start soldering pipes at the property, but having construction knowledge will put them further ahead of other asset managers. Recognizing different property components, understanding what normally goes wrong with them, their lifespan, signals that they might be failing, and general knowledge of what it might cost to replace them.

Real estate asset managers work closely with property managers, financial analysts, leasing agents, and other professionals to ensure that the properties are performing optimally and meeting the strategic goals of the owners or investors (678). Their ultimate goal is to maximize the value and return on investment of the real estate assets under their management.

Transcript:

Charles:
Prepare to be amazed as I reveal the shocking truth about real estate asset management. This episode will completely change your perspective on maximizing property value.

New Speaker:
Having turned around multiple underperforming properties myself, I can tell you what really works from firsthand experience. Now, what are the things that successful asset managers do while others overlook? I’ll share this crucial insight with you.

New Speaker:
Welcome to Strategy Saturday; I’m Charles Carillo, and today we’re gonna be diving deep into mastering real estate asset management techniques. Now, if you’re looking to maximize your property value and improve its financial performance, you’re in the right place.

New Speaker:
Real estate asset managers focused on improving the property’s financial performance, thus maximizing the property’s value. Now, the asset manager is not to be confused with the property management company that focuses on the day-to-day duties of operating the property. In contrast, the asset manager works alongside the property manager and oversees them as they both work towards executing the owner’s business plan.

Charles:
Now, the asset manager may be the owner of the property. They may be an employee of the owner or a third party company hired by the owner. Asset managers have several roles and responsibilities. First off property manager oversight. So reviewing property management activities including leasing activities maintenance tenants and capital expenditure projects. So large projects, asset managers regularly visit the properties to inspect operations firsthand. Next is tenant management. So asset managers continually review occupancy rates, lease renewals, tenant satisfaction collections, lease negotiations, and tenant problems. Third is strategic planning. So asset managers create short-term and long-term strategies around the current market dynamics and financials to create performance goals for the property management team. Next would be risk management. So managing the property’s risk exposure, and this includes economic risks, market risks, operational risks, financial risks and legal risks. Additionally, monitoring asset performance, so consistently monitoring the asset and the performance of the assets against industry benchmarks and the properties business plan.

Charles:
And this entails reviewing performance metrics and key performance indicators, KPIs regularly. Lastly would be portfolio management. So asset managers might be hired to oversee an entire portfolio of properties for owners and investors with multiple properties. So mastering real estate asset management involves being knowledgeable and experienced in the type and class of property and the specific market. Those both are very important. Asset managers must be well-versed than other team members since they wear many hats. It’s kind of like an entrepreneur where they have to, if you’re starting your own business, you have to know a little bit about sales and marketing or a lot about that. A little bit about accounting, a little bit about legal, stuff like that. And every time you speak to an entrepreneur, they really know all these different businesses. Maybe not really in depth, but they know it enough.

Charles:
So when they’re working with people, they understand them. They’re not just narrow in what they do. And this is how an asset manager is. So first off, they have to understand the financials. Now, asset managers need to be able to read and understand financial statements, including trailing 12 month financials, rent rolls, and tenant analysis, cashflow management, creating budgets and forecast to plan for future income and expenses. Next is market knowledge. Now this is extremely important because real estate is hyper hyperlocal. Understanding the market is paramount to recognizing market trends, economic indicators and demographic shifts affecting their tenant base and the property’s value. Now, knowing current rents, current sales, and recently proposed and approved projects throughout the municipality are super important. Next would be team building. So during the property hold period, different events and projects will require new people to handle ’em.

Charles:
If the property manager does not meet expectations, they might be changed. A good asset manager will have the relationships to find another property manager better suited for the property. Large capital expenditure projects might require new contractors to be found and vetted. And your property manager’s chosen eviction attorney is dragging their feet. A good asset manager will recognize this, speak to a, their current attorney and possibly find another one to replace them. Next is construction knowledge. Now, one asset management tree that is not discussed much is having asset managers with construction experience or knowledge. And I’m not saying that they may need to start soldering pipes of the property, but having construction knowledge will put them further ahead of other asset managers. And this is really all around recognizing different property components, understanding what normally goes wrong with them their lifespan signals that they might be failing, and a general knowledge of what it might cost to replace them is very important as an asset manager.

Charles:
Real estate asset managers work closely, property managers, financial analysts, leasing agents and other professionals to ensure that the properties are performing optimally and meeting the strategic goals of the owners or investors. Their ultimate goal is to maximize the value and the return on investment of the real estate assets under their management. So I hope you enjoyed. Please remember to rate, review, subscribe. If you wanna learn more about asset management, make sure you check out an interview I did with Gary Lipsky, where we talked about all things 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 income producing properties and 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 to investwithharborside.com. If you like the idea of investing real estate, if you like the idea of passive income partner with us at investwithharborside.com, that’s investwithharborside.com.

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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