How Real Estate General Partners Can Turn Market Threats Into Opportunity With Operational Efficiency

By Mike Sebastian May 17 2023 min read
2023 06 IM Blog SMB Operational Efficiency 1297x485 1

Many current changes have rocked economic stability and created future uncertainty that leaves many industries on the defensive.

Commercial real estate is no exception — interest rate hikes, tightening lending environment, bank sector turmoil, holding patterns of investors, and underwriting assumptions in multi-family deals are among some of the issues impacting real estate. As a result, transaction volume has significantly decreased, with 66% of surveyed investors in WMRE identifying a lack of quality deals as the primary obstacle to investing.

Deals are still happening — but at a lower frequency and primarily among institutional investors.

While capital raises are slowing down, and investors are biding time until the volatility of the market stabilizes, investment managers have a unique opportunity to capitalize on the industry lag.

Operational Efficiency Reduces Costs While Increasing ROI

To overcome the lack of capital flow, real estate investment managers need to proactively manage internal costs and maximize the return on assets. This requires a focus on operational efficiency, including optimizing workflows, expanding asset management operations, and leveraging data to identify opportunities for increased ROI.

  • Streamlining your processes helps improve your bottom line and boost profits by speeding up tasks, reducing waste, and optimizing resource allocation.
  • Meeting investor demands for transparency, performance, and reporting is crucial in today’s market.
  • Scaling operations in a cost-efficient manner lays the groundwork for effectively addressing these demands and preparing for challenges that arise.

It’s important to be ready for anything the market throws at you.

How can your team achieve operational excellence? Consider outsourcing tedious tasks to an investment management partner. This allows your team to prioritize what matters most — impressing investors, building relationships, and maximizing returns.

“Excel and Word aren’t what we’re doing anymore. We need a platform.” – Morris Groberman, Principal at North West Commercial Real Estate Investments.

How to Achieve Operational Efficiency and Boost Profitability

By partnering with a reputable CRE partner like AppFolio Investment Manager, you can streamline your primary operational workflows with proactive insights and strategies that unlock value and enhance outcomes for your real estate investments. Investment managers are turning away from tedious, manual processes and opting for increased end-to-end visibility with automated features.

Optimize Internal Workflows

AppFolio Investment Manager revolutionizes time-consuming tasks, transforming processes that used to take weeks into tasks that can now be accomplished in minutes. Tasks such as collecting and distributing K-1s during tax season, creating and delivering error-free reports, and marketing new offerings to investors are streamlined through the efficient tools provided by AppFolio.

“It’s reduced my staff. With over 600 investors, that takes a lot of work. I am able to run acquisitions and fundraising myself.” Morris Groberman, Principal at North West Commercial Real Estate Investments.

By reducing the time spent on these administrative tasks, AppFolio enables professionals to allocate their time and energy towards high-value activities, such as engaging in meaningful interactions with investors and devising strategies to maximize investment performance. This shift in focus helps optimize operations and enhances overall investment outcomes.

While there is an initial investment involved in partnering with AppFolio Investment Manager, the long-term benefits far outweigh the costs. Customers who have adopted AppFolio have experienced substantial returns, including the ability to adapt to the changing market demands and reduce operational expenses.

A survey conducted among AppFolio Investment Manager customers revealed that 100% of respondents agreed that their businesses were able to scale and grow more effectively with less overhead cost. This underscores the significant impact that AppFolio has in maximizing operational efficiency and driving success in the investment management industry.

Surface Actionable Asset Management Data

Data is your best tool for clarity, focus, and control when it comes to operational success. Data transparency can unlock opportunities within your business and uncover blind spots that are holding you back.

Efficiently optimizing your portfolio with an asset management solution can eliminate hours spent in spreadsheets. Think data aggregation, error-free asset performance tracking, and on-demand data visualization for essential KPIs like net operating income (NOI).

“AppFolio Investment Manager took us from doing everything by hand to streamlining all of our processes.” – Brooke Herman Controller, Pacific Apartment Homes

For example, you could compare capital expenditures (CapEx) actuals to budget over time and assess where and why your budget might have been over or under. These learnings can help you create a more accurate forecast and even apply to future years with other assets.

Plus, there is a reduced risk of impacted revenue when you have visibility into lease expiration spikes over time. Instead of being caught off guard by tenants moving off property, you can work with your property manager to plan ahead to ensure there is no lost revenue.

Identify Opportunities to Increase ROI

It’s easy to miss opportunities to boost profits if you don’t have the right data in front of you. Beyond efficiency within your daily operations, a scalable, an end-to-end platform helps power front-office interactions for a high-class investor experience that contributes to an ROI increase.

Investment managers can quickly access data when interfacing with investor inquiries. AppFolio helps you find information faster and increase overall satisfaction with investors.

“Our returns are more favorable than market returns because we can quickly execute, and that is because we use AppFolio Investment Manager to maximize operations and minimize cost.” – Ricky Flandez, Winstar Properties LLC

Since investor portals are becoming a non-negotiable for investors with usage on the rise, every GP needs an investor portal that provides a professional digital storefront as well as analytics on portal performance. This helps you:

  • Understand the health of your investor base, allowing you to create catered experiences for each investor at scale.
  • Identify high-net-worth people that have contributed $10 million or more to a fund and create personalized outreach on capital raises most relevant to them.
  • Access investor engagement analytics to prioritize outreach and execute faster fundraisers.

Turn Market Threats Into Opportunity

In an environment characterized by slower deal movement, you invest in back- and front-office operational efficiency. By streamlining processes, optimizing workflows, and leveraging technology, investment managers can gain a competitive edge and maximize their operational effectiveness.

With its robust platform and comprehensive suite of tools, AppFolio empowers investment managers to automate and simplify time-consuming tasks, enhance data accuracy, and improve overall operational performance. Harness the capabilities of AppFolio Investment Manager to unlock valuable resources, access data for strategic decision-making, improve investor relations, and drive superior returns.

To learn more about what the AppFolio platform can do for you, book your demo today.