The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.
It’s important to establish your processes for each investment before it comes time to close that investment. In this Covid era, this means collaborating via Zoom or Skype or any other meeting platform and getting together to establish these processes early and completely. Additionally, choosing management firms, contractors, and other professionals to establish important relationships with is critical, as well as collaborations within teams as necessary depending on the investment at hand.
Richard Wilson: What have been the big three lessons you’ve learned while building a new line of business that you can share with others that are just starting out?
Teddy Hendricks: Absolutely, thank you Richard, I’ll tell you the first lesson learned on my end throughout my tenure at the Beach Company has been really setting up and establishing processes early and up front. And giving those processes the credence to scale and scale them quickly. So whether it be a various proprietary model that we’ve established, or a KPI measuring tool of some sort, or if it’s actually setting up the renovation process that we’re going to deploy on that particular investment – setting that process up early, well before we close, is critical. And I’d also say that Covid, and the environment that we’re in today, has really amplified the need to dial in those systems even furthermore. So as we continue working remotely in collaborating via Zoom and Skype and everything in between, it’s that much more critical to establish that on the onset.
The second, I would say, from my perspective as the asset manager for our fund, it’s really picking property management firms, and contractors, and establishing those relationships as early and as often as possible as well. You know, real estate is an extremely relationships people driven business, my role in particular in asset management is even more so and I’d argue oftentimes the most personal side of real estate, so having the right people in place, the right team in place, for each individual investment is critical. We don’t subscribe to the one size fits all methodology for every investment. We really try to set up the correct team and their correct partners on each side of the asset management platform that we’re going to deploy. So that’d be number two.
Number three I’d also say the importance of collaborating with our acquisitions team early and often in the underwriting process is very key to what we do. Some firms often separate these roles completely, like bifurcate those two sides of the investment platform, we don’t do that on our team. We work together as much as possible on the front end, so that when asset management takes over the investment upon closing it’s that much more further along in the process of all the assumptions are understood and asset management is very comfortable with those assumptions on the front end before takeover.
Richard: Right, okay. Makes sense.