Talk #18: Working With Institutional Investors: Lessons From The …€¦ · o NARPM This is where...
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Talk #18: Working With Institutional Investors: Lessons From The Front Lines Socrate Exantus, Owner, All County Property Management: CFL, Professional & Complete Talk Overview: In 2012, Socrate Exantus’ team managed 750 properties in two locations. Three years later they grew to 2,200 homes by managing for institutional investors. His session covers what you should know about institutional investors and what he has learned by working on the front lines over the last four years. Talk Notes: What you should know about institutional investors o Less than 1% of all SFHs are owned by “institutional investors” o The business has a life cycle o It’s not about if they will internalize, it’s when they will internalize o The pressure and demand only increase over time o Many oen want to, and have a define timeline to internalize o Usually want a PM to stabilize a challenging portfolio o Many want a PM to help simply help them launch in a targeted expansion market 73 O쓂icial Scribe sponsored by The Property Management Coach.
Transcript of Talk #18: Working With Institutional Investors: Lessons From The …€¦ · o NARPM This is where...
Talk #18: Working With Institutional Investors: Lessons From The Front Lines
Socrate Exantus, Owner, All County Property Management: CFL, Professional & Complete Talk Overview: In 2012, Socrate Exantus’ team managed 750 properties in two locations. Three years later they grew to 2,200 homes by managing for institutional investors. His session covers what you should know about institutional investors and what he has learned by working on the front lines over the last four years. Talk Notes: What you should know about institutional investors
o Less than 1% of all SFHs are owned by “institutional investors” o The business has a life cycle
o It’s not about if they will internalize, it’s when they will internalize o The pressure and demand only increase over time o Many o埔�en want to, and have a define timeline to internalize o Usually want a PM to stabilize a challenging portfolio o Many want a PM to help simply help them launch in a targeted expansion market
73 O쓂icial Scribe sponsored by The Property Management Coach.
Where do you find them?
o National and Regional Investor conferences o IMN o Five Star
o NARPM This is where Socrate’s first investor found him
o Google Search Ensure that your google reviews are high, so investors searching
o Investor referrals o Managing the lead via LeadSimple
Navigating the bidding process
o Understand and responding to RFPs Respond quickly!
o Presentation to Institutional Investors o Research the company and its strategy o Research decision makers o Differentiate yourself from competitors o Understand how they measure success
Example: make sure you understand the system requirements. A lot of mom and pop companies don’t have good systems in place, so this can set you apart.
o What are their Key Performance Indicators (KPIs)
Most important: Be sure that your business is setup to self-sustain before you go for the big fish! A埔�er the deal is closed:
o Be Proactive o Manage the key personnel o Keep your team aware and motivated
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o Link your team’s performance to your investors Key Metrics.
Managing the growth
o Is your system scalable? o Ensure that your organic business does not suffer as a result o Hire Just-In-Time (JIT) o Can your office space support the growth? o Maintain the culture of the team
Don’t grow so fast that you lose your culture. o Some companies lose their culture when they grow too fast o Be slow to hire and quick to part ways o Ensure that your team members who are not working on the investor account are not forgotten
Economies Of Scale
o Economies of scale is a proportionate saving in costs gained by an increased level of production o As we scaled up, we began transitioning the business operations to improve the support without
increasing headcount o PMs manage 100-200 properties with dedicated resources to perform operational tasks: Renewals,
Listings, Maintenance, Other Admin tasks o Negotiate you fees early & renegotiate when ready
How to cope when they internalize
o Communicate with the clients to understand their plans o Anticipate their strategy and timeline for internationalizing o Prepare your team and communicate what options they will have
You can even partner with your institutional investor to see if people from your team can go work with them when they internalize.
o Work with investor to discuss their staffing needs to minimize unemployment of those impacted o Investors typically do not want to start with a whole new team o Work together to see if any PM employees are interested in working for the investors o Keep core team intact and prepare for life without the large investors o Notify impacted vendors of the change o Recommend key vendors to investor to minimize their losses
Sample Vital Signs report
o Lease-Ups o Renewals o Move-Out o DQ – Delinquency o Market Assessment
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Conclusion: o Negotiate fees in the beginning and throughout
If you don’t have the right fee structure, negotiate! o Do not over staff
When you’re overstaffed you run your salary expenses way to high o Do not over build
Knock down walls before moving to a bigger space o Be prepared for the relationship to end
It’s not about if, it’s about when the relationship will end. o End it amicably; this is small industry o Do not lose your business or company identity because of a single client o Have an exit strategy
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