Three Important Ways Asset Management Adds Value
At Discover Multifamily, our mission is to acquire and reposition underperforming real estate assets to create high risk-adjusted returns for our investors. We source, underwrite, acquire, and diligently manage the properties in our portfolio with an unwavering focus on performance.
As an asset manager for Discover Multifamily – and by extension for our investor-partners – the asset management team is responsible for overseeing all aspects of our portfolio properties to maximize value and mitigate avoidable risk from acquisition to disposition of the asset.
The asset manager’s role is to leverage the extensive data at our disposal, along with industry experience, to ensure operational excellence and deliver the best possible ROI on each deal.
This disciplined approach to management includes several areas of oversight and continuous improvement of processes in three main categories:
1. Revenue Optimization
Weekly, our asset management team reviews each property’s performance and financials to identify ways to drive revenue for our capital partners. This includes:
Rent pricing, concessions, vacancy, etc.:
- Daily review of occupancy, pre-leased, and leasing trends
- Weekly review of market conditions and competitors
- Adjust to market conditions quickly; minimize spend on concessions
- Increase rates as needed to achieve and exceed pro forma
Pricing guidance for all on-site team members:
- Example: If the property is occupied at 90%, all renewals must be offered within $50 of market rate. If occupied at 95%, all renewals must be offered at market rate.
- Weekly review of leasing activities (calls, emails, texts) to ensure compliance
Managing renovations:
- Providing a detailed scope of work and timeline prior to start
- Minimizing vacancy loss due to renovations
- Ensuring consistent updates with sub-contractors
- Identifying units that offer the highest ROI and anticipating when these units will be available for renovation
- Coordinating with vendors to ensure the renovation timeline is on schedule
Reviewing ancillary income opportunities:
- Utility billbacks
- Laundry
- Parking
- Trash
- Pet fees
2. Expense Management
Discover Multifamily prioritizes performing at or below budget to maximize the benefit of revenue growth. We take the careful and transparent management of our budget and expenses seriously on behalf of our investor-partners. This includes:
Developing controls for the on-site team to maintain budget:
- Limiting vendor involvement over in-house staff
- Garnering multiple bids for each project to save thousands of dollars
- Regularly reviewing income statements: actual vs. budget
- Directly coordinating with vendors to secure the best pricing
- Regularly auditing AP for invoice accuracy and charges
- Monitoring taxes and taking action when necessary to submit protest/litigation
- Shopping annually for insurance to ensure premiums and coverage are within projections
- Ensuring sites are properly staffed and following policies regarding overtime
- Annually reviewing contracted services to maintain competitive pricing
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3. Financial Reporting
Investors choose to work with us because of our track record of value creation, best-in-class reporting, and honest communication. We provide our investor-partners with data that allows them to monitor the progress of their DMF properties – the same data we review regularly. This includes:
Reviewing monthly financials for each asset:
- Identifying variances and deploying solutions to improve them
- Identifying trends for revenue concessions and CapEx spend
- Identifying major issues through trends in Repairs & Maintenance
- Ensuring all monthly costs are accounted for or accrued
- Managing accounting team to ensure accuracy
Monitoring delinquency and ensuring best practices are being utilized:
- Notices going out on the 25th, the night before rent is due, and on the 1st, 3rd, and day of late fee assessment
- Confirming notes are updated in a timely manner within reporting software
Reviewing all CapEx projects for accuracy and budget alignment:
- Reviewing lender draw requests based on needs and remaining budget
- Ensuring timelines/budgets are being met/exceeded for all projects
- Preparing internal reports
- Generating reports to be reviewed monthly by partners to discuss strategy and process improvement
It’s no secret that multifamily real estate is a complex business. A disciplined approach is required to manage each property to the highest standards and drive ROI. This is why the team at Discover Multifamily remains diligent in our strict operational approach when selecting and managing portfolio assets, staying true to our commitment to our investor-partners.
Why Invest with Discover Multifamily?
Our approach to investing is to carefully consider all potential elements of risk through rigorous stress testing, ensuring we deploy our investor-partners’ capital with confidence. We allow data and insights to drive our decision making, not emotions. The properties that we acquire in our portfolio have passed rigorous due diligence requirements and have been extensively stress-tested through our proprietary modeling/systems. We are value investors, not speculators.
To align interests, Discover Multifamily invests significant amounts of capital directly alongside our capital partners to form a true partnership.
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