How Real Estate Investors Can Benefit from an Experienced Asset Management Team

By The ArborCrowd Team
Mar 10, 2022

One of the key advantages of investing with a real estate institution is having a seasoned asset management team oversee the deal’s progress. These professionals understand the ins and outs of the properties and business plans and have experience with overseeing deals through their lifecycles until realization.

They are tasked with monitoring that initial objectives in the business plan are met through completion of the deal, and if things don’t go as planned, they can evaluate the available options to help see the best path forward. To accomplish this, asset managers keep a watchful eye on the performance of deals and flag any potential meaningful variances in schedules or budgets that could materially affect the deal.

Ultimately, an experienced asset management team promotes accountability of the sponsor as their actions are closely watched, benefitting investors’ interests.

Why Are Asset Managers Integral to Real Estate Investments and Does Everyone Have them?

Not all real estate investment platforms have dedicated asset managers. For example, some real estate crowdfunding platforms are marketplace sites that connect investors and sponsors, but do not perform traditional asset management of deals. They may track high level information about deals, but are not closely following the performance of the transactions over their lifecycles. The traditional asset management function is instead left to the deal sponsor.

This creates a potentially challenging situation for investors, because without a proper asset management team, investors must rely on the sponsor’s communications to obtain pertinent updates about the performance of their deals. However, sponsors may not be as forthcoming in every situation as they may seek to abate investors’ concerns.

With a platform that has an asset management team, the team tracks the performance of the deal and can flag issues to mitigate risk. They can also provide transparent updates to investors, keeping them informed of the performance of the deal, especially if things aren’t going as planned.

How ArborCrowd’s Asset Management Team Benefits Investors

ArborCrowd prefunds each of its deals with affiliate capital before they close — as is the case in the Selby Ranch SFR Community. Therefore, its interests are aligned with investors as its capital is on the line.

The ArborCrowd Asset Management Team works closely with the underwriters prior to the launch of a new deal, so they are fully apprised on the deal details and are already monitoring the transaction even before ArborCrowd’s investors enter the deal.

During the deal hold period, they oversee the project’s progress and whether the investment is proceeding as expected. Some key performance metrics they’ll track include:

  • Construction or renovation timelines, progress, and budgets
  • Occupancy and leasing trends
  • Rent rates, collections, and concessions
  • Gross revenue, expenses, net operating income, and cash flow of a property compared to budgeted/projected expectations

ArborCrowd asset managers may make property visits so they can ascertain the progress of construction or renovation, interview site staff, and inspect the property and units to identify areas that need attention.

Additionally, the ArborCrowd Asset Management Team aggregates property financial and operational reports and issues quarterly reports to investors, and a member of the asset management team is available to speak directly with investors and answer their questions about the transaction. Furthermore, they monitor capital events and distributions to investors whether it be through a refinance of the loan or a sale of the property, and ensure investors receive the correct amounts.

Asset management teams are an essential part of successful real estate transactions. Without seasoned real estate asset managers involved in a deal, investors would need to rely solely on sponsors for information about the deal’s progress, meaning they could be left in the dark if there are possible concerns and the sponsor isn’t transparent. However, the asset management team benefits investors as they oversee the progression of deals, make suggestions to mitigate obstacles and stay in-line with the initial business plan objectives, and inform investors about the deals’ performance until completion.

Sign up to receive more useful insights from our seasoned professionals and in-depth deal information.

Stay informed about the latest trends and new investment opportunities.