May 24, 2023

When To Hire A Real Estate Fund Manager?

Megan Lamke
When To Hire A Real Estate Fund Manager?

When To Hire A Real Estate Fund Manager (& Do You Need To?)

Do you ever feel like you're spending too much time managing your real estate property investments? Like there's just too much to keep track of, and you're never quite sure if you're doing everything right?

If so, you're not alone.

Managing a diverse portfolio of real estate syndications and investment accounts can be a lot of work, and it's easy to get overwhelmed. But what if there was a way to make it easier?

Well, there is. The way we see it, you have three options:

1) Hire a real estate asset manager

2) Implement software that will ensure the most efficient use of investor capital

3) Do nothing and attempt to manage your real estate yourself

First, let's crack the code on what a real estate fund manager actually does and how one might be useful to your growing business. Then we'll help you decide how to approach your real estate portfolio management - for your benefit AND for the benefit of your investors.

What Is a Real Estate Asset Manager?

A real estate fund manager is different from someone who manages bonds or mutual funds; neither are they a real estate property manager. The role of a fund manager is primarily to take charge of risk management and asset allocation. Real estate asset management is all about optimizing the value of your investment properties.

Often interchanged with the term real estate asset manager, they are primarily responsible for researching and providing a path toward the most efficient use of investor funds based on property management and investment strategies. This can include identifying performance trends, making recommendations to buy or sell properties, and defining and taking opportunities on the property level.

Real estate portfolio managers should identify the most consistent revenue sources, recommend expense reduction, and ensure appropriate risk-adjusted returns across a diversified real estate investment portfolio.

When Should Real Estate Investors Hire an Asset Manager?

When your real estate investment portfolio is small and contains perhaps one commercial property plus a few residential rentals, it may seem easy to manage the moving parts. You can probably handle it even if you have a partner or two on each investment property.

However, when it comes to managing 20+ investors on two or three commercial properties, remaining in compliance, forecasting revenue, and dealing with various property managers, it's high time you build an infrastructure to support your growing real estate investing business.

If you're experiencing the following, you need an asset manager:

  • Administrative tasks are done late or aren't being done at all
  • Investor contributions and distributions are being tracked in a spreadsheet and it's getting confusing
  • Cost segregation is something you're really interested in and you know it would be beneficial, but you don't have the capacity to deal with it
  • Tax forms are perpetually an issue
  • Financial reports, forecasting, and investor returns schedules require too much of your time and are a huge distraction from what you want to be doing

Ideally, you want a real estate asset manager on board before things get out of control and you begin to feel overwhelmed or "behind." Remember you promised your investors returns, efficiency, cash flow, and hands-off property management?

What to Look for in A Fund Manager

An asset manager generally specializes in a particular asset type, region, or asset size. Ask about their exposure to diversified investment portfolios and what types of real estate investments they've managed inside them.

While a real estate portfolio manager may not have dealt with a property management company directly (they usually don't), ask what types of property transactions they've influenced and what the result of their recommendations was.

Real estate fund managers should be primarily concerned with risk management and the efficiency and performance of the real estate investments you're holding for your limited partners. From a real estate syndication investor's perspective, a sponsor with solid processes and efficiency reviews in place is much more appealing than one who's DIYing the real estate asset management themselves.

How SponsorAdmin Alleviates the Need for Asset Managers

SponsorAdmin is a cloud-based platform that provides everything you need to manage your real estate syndications in one place. It's specifically designed to be a one-stop-shop for syndicators in the real estate market, which allows you to:

  • Track investment performance - real-time performance data to help you make informed decisions about when to sell, hold, offer lease discounts, etc.
  • Manage your investors - easily keep track of contact info, investment amounts, and performance data so communication and profit reports are easy to produce.
  • Distribute investor funds - issuing distributions and tax forms are simple, ensuring investors are happy with timely funds and documents.
  • Pay your bills - track invoices, make payments, and avoid late fees and penalties. Efficiency is the name of the game!

As a real estate syndicator, you understand your investors count on you to make sound financial decisions and manage their investments wisely. That's a lot of pressure! But it doesn't have to be, especially if you're using SponsorAdmin to handle fund administration, investor relations, treasury services, and accounting pertaining to your real estate assets. It lets you focus on what you do best: finding great deals and making money for your real estate investors.

Finding Solid Real Estate Portfolio Management Help

In summary, onboarding real estate asset management help can provide various benefits, including access to expertise and resources, reduced risk, and improved investment returns. As your online presence, the number of interested real estate investors, and your real estate portfolio grow, it will become imperative that you have another set of eyes with asset management experience on your business plan.

You'll need advice on the real estate market, plans to generate long and short-term profits, and portfolio diversification recommendations - for your benefit AND the benefit of your general and limited partners who trust you.

By selecting a manager with a proven track record, strong industry relationships, and a clear investment strategy, you can feel confident in your investment and enjoy the potential benefits of a well-managed real estate portfolio.

Rather than pay the high salary experienced real estate asset managers demand, you can take advantage of the power of financial technology. With SponsorAdmin, you can save time, reduce costs, increase revenue, and improve efficiency to help deliver your real estate investors an A+ experience. Leaving you to focus on what you do best: finding great deals and making money for your investors. Schedule a free call to find out if SponsorAdmin is your solution.

Ready to get started? Contact us today.