Let’s talk about a topic that doesn’t get enough press. While there have been tons of books, videos, webinars, boot camps, and more all highlighting and glamorizing the finding, funding, and closing of real estate deals, there is the behind the scenes part of the apartment building team that hardly ever gets mentioned: the asset manager. After the champagne is poured, it’s the asset manager that rolls up his or her sleeves and begins the implementation of the business plan.
In truth, it’s long before the sale is finalized that the asset manager is working behind the scenes, making sure that the plan is ready to go on the first day of ownership. “Time is money” is an understatement in the multifamily space, and it’s the asset manager that makes sure time is on your side.
Let’s discuss the three things you must do after the closing (and the champagne, of course!). And to find out even more details, be sure to watch the video below.
1. Walk the Property
The first thing you must do regardless of the property size is to walk the property. It honestly does not matter if you walked it the day before or even the day of. You never know when a leak sprung up or a tree fell down.
If it’s a big apartment complex, we’re going to focus on the common areas and sweep the roofs. We want to make sure there haven’t been any changes since we last saw the property since we now own it. It’s a good idea not to outsource this part of the to–do list. The larger the property, the more important it is not to rely on anyone else but your asset manager to walk the property.
2. Communicate With Tenants
The second must–do item is to communicate with the tenants. We usually have letters introducing our team ready to go at the time of closing. We want them to know that there is a new sheriff in town. Usually, we let our property manager send out this letter. But if you are self–managing, make sure you don’t skip this step.
This is your chance to make a good first impression and introduce yourself. Also, you want to let the tenant know where they can pay rent and more importantly to whom. There have been incidents where the previous property manager was paid because the tenant was not aware of the change in management.
The last part of the second step is educating the tenant on how to submit work orders. This is a critical step that should not be overlooked. While in step 1, you walked and familiarized yourself with the common areas, it is the tenant who is your eyes and ears in and around their units. You will never know what was said to the previous owner/management company, but you want to make sure you are in the know going forward.
Just be prepared. If you are purchasing from a tired owner or a property manager who skimped on expenses, you may be bombarded your first few weeks with work orders that were never fulfilled. It’s critical to have the right mindset and approach the situation as an opportunity to improve your investment, not as a hassle.
This distinction in mentality goes a long way. It often amounts to what I commonly refer to as the “home effect.” You know you are accomplishing the second step when you start seeing small gardens outside your tenants’ apartments. Just remember, tenants are quick to leave apartments but not their home. When you take their feedback seriously, you create a home for them—that’s when the stickiness occurs.
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