Work Over Time: Let’s Talk About Asset Management…

“The role of the musician is to go from concept to full execution. Put another way, it's to go from understanding the content of something to really learning how to communicate it and make sure it's well-received and lives in somebody else.”  This quote by the famous musician, Yo-Yo Ma, resonates deeply with our team at CF Capital.

Though we do not think of ourselves as musicians nor are we particularly adept at creating original music, we do believe Yo-Yo Ma makes a point that is applicable to aspects of what we do everyday with CF Capital.  

Over the past weeks we have been speaking to many parts of our philosophy and process.  We discussed how we go from an idea to planning.  And how we go from planning to execution.  Although we believe our investment process is extremely important to setting the stage for a successful investment, ultimately none of it matters if we do not execute.

“Having a vision for what you want is not enough. Vision without execution is hallucination.” -Thomas A. Edison

Today we will discuss asset management, or what we would like to think of as the methods of execution.   What do we mean by this?  Simply stated, it is putting our business plan to action to deliver results for our investors, the community, and our residents.

At a fundamental level, outstanding asset management is effective management and leadership of our property management team. Asset management is also about communicating to help property managers make excellent decisions, while holding them accountable in an effort for all invested parties to achieve their goals.

At the end of the day, our goal has two explicit parts: 1) to protect investor capital; and 2) raising the value of the project, whether it is physically and/or operationally.

In order to achieve those goals we must “see things through” with a highly detailed lense with our property management team that is on the ground, taking care of the day-to-day with the property.  Our business plan is our guide for asset management.  Inside our ordinary expectations, we execute based on our business plan. 

However, if we have learned anything from real estate and in life, it is rare to have exact circumstances occur as planned.  Therefore, asset management isn’t just about managing the ordinary, it is also about recognizing problems and course-correcting when necessary.  Execution can only be successful if we manage the unforeseen things that occur within our communities, in addition to ensuring the collaborative team effort to accomplish our stated objectives.

We always “expect the unexpected,” and are ready to adapt when we are faced with a challenge.  This mindset serves us well as it prepares us for resiliency and ultimate success. 

The CF Capital team does everything to ensure that we are holding our own team accountable, acting as leaders, while focusing on the performance metrics in a detailed capacity.   The metrics reveal the effectiveness of our methods and show if we are gaining traction with income and expenses -- whether it is leasing or managing expenses or other income. We track key performance indicators, or KPIs, closely to ensure our efforts are ultimately being realized as results as expected in our business plan.

Another key part of asset management is implementing the capital expenditure plan as formulated in our business plan.

If we planned to make programmatic improvements to plumbing, for example, our team must coordinate with our property management company, subcontractors in the market, and the maintenance staff to ensure the successful implementation of this investment.  We also must make sure that the plumbing installation project goes as smoothly as possible with minimal cost and time overruns, and minimizing resident disruption.  If a problem comes up, we must provide guidance in the best way to solve the problem and further give our team the tools to make the best time sensitive decisions where appropriate.

For the sake of simplicity, we want our readers to take away that asset management may seem quite simple, but there are many variables that come into play. Our team is dedicated to being detailed, diligent and focused to execute in the long run through asset management. We believe this persistence offers peace of mind to our investors, employees, and residents of the communities in which we invest. 

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