When selecting an investment management firm, bigger isn’t always better, according to a recent study by McKinsey.
Investors looking to earn higher returns on multifamily real estate investments should consider several criteria when choosing an investment management firm, including size, strategy, and communication.
Perhaps the most important factors in choosing a real estate investment firm are strategy and risk alignment. If you’re an investor seeking value-add returns, for example, you may not achieve those goals if you choose a firm focused on core or core-plus holdings.
Here are eight questions to answer to help you choose the appropriate real estate investment company to serve your needs:
- Do they have expertise in the type of asset you’re investing in?
- Do they have a proven track record of success?
- What is their target IRR, and have they consistently achieved it?
- Does their target hold period align with your investment goals?
- Do they have a clear vision for acquisition, repositioning and disposition?
- Do they invest in workforce housing or other sectors that are recession proof?
- Is their focus on major metro and suburban areas that are steady?
- Do they maintain appropriate insurance on each property?
For multifamily investing, you want to ensure the real estate investment companies you’re considering have a solid plan for professional property management. Effective value-add property repositioning is predicated on skillful property management. But even new multifamily properties must have skilled property management in place to ensure operations, marketing, leasing and maintenance responsibilities are carried out successfully.
Clear communication and transparency is also crucial when selecting the right firm. Small and medium-sized companies often provide a more nimble, opportunistic and responsive approach than larger ones. Nevertheless, senior leaders at any size firm should provide detailed financial updates regularly, and be responsive whenever questions arise.
The firm should offer a secure investment portal, like Juniper Square, Zevulon’s all-in-one investment management platform, with dashboarding features that display easy-to-understand information about the performance of the investor’s entire portfolio and breakdowns by asset, as well as details on new investment opportunities.
Zevulon Capital is led by a team of conservative investment management professionals who use local market knowledge and established relationships to source and pursue value-add investment opportunities that provide leveraged returns for private investors.
We have multiple investment opportunities available. Let our team help you structure a smart multifamily investment real estate portfolio.