If you have spent any time at all investing with, talking to, or just checking out Wildhorn Capital, you’ll know that we pride ourselves on being local. Our whole business is focused on multifamily assets in the Austin and San Antonio corridor. We were born and raised here, and we have life-long knowledge and relationships that tend to give us some informational advantages and added conviction about the assets we pursue and own. That gives us more certainty on the opportunities we invest in, and we think protects our investor interests in the best way possible.
Another reason we stay local lies in our belief that operating multifamily assets is a full-time job—one that requires a lot of TLC. To do it correctly, in our humble opinion, requires proximity to our assets so we can regularly visit them—checking in on the progress of renovations, coming up with new ideas, and most importantly spending time with our onsite teams.
Multifamily is a hand-to-hand combat sport. Every day leases are being signed, residents are moving in and out and work orders are being logged. The key to making all of that work is a top notch and engaged onsite team—starting with your manager and service manager. In our experience it is very easy to see and feel when your onsite team is fully present and bought in vs just punching the clock. You notice it when you walk into the leasing center and the energy isn’t there; the property is just a little bit dirty and out of sorts; maintenance requests are taking slightly longer to get closed; occupancy and renewals are sluggish; and most importantly the financials start to dip.
Market dynamics can certainly play a part in some of this, but time and again we’ve been able to notice one or more of these issues pop up, and after some quick investigation realize our team is a bit out of sorts. The dirty little secret is that you can’t execute your business plan—no matter how great it might be—with an onsite team who isn’t bought in and engaged.
Which brings us back to why we spend so much time in our assets. We want our teams to know we are there to support them. That we care. And that they can bring the good, the bad, and the ugly to us—and we’ll work together to find a solution. If you walk into one of our assets with anyone from our team, you’ll notice the air of familiarity that exists. We’re not strangers to our teams—far from it. You’d be most liable to witness us hugging them as we entered.
Previously in this space, we’ve talked about the fact we employ a 3rd party management company to help oversee our assets. That hasn’t changed—and we don’t think it likely every will. In that article we highlighted the main reasons why. But please don’t take that to think we don’t care about our teams or don’t want to invest the time or energy into “someone else’s employees”. In fact, it’s quite the opposite. The primary reason we don’t bring management in-house is because we do care so much for our teams. And we recognize that having the best teams onsite produces the best performance for our assets, and the best results for our investors.
To have the best of the best teams, you must recruit and train the best of the best people. And then you must provide them advancement opportunities and growth, great salaries, benefits, insurance and 401k. While a 4,000-unit portfolio is nothing to sneeze at, it’s hard to always compete and provide those tangible competitive benefits, or the growth opportunities that superstars crave. So we continue to leave the hiring and training to the experts, and leverage their benefits package. But once someone is part of our team and working within the Wildhorn portfolio, we do everything we can to instill a sense of camaraderie and teamwork so they know they work with Wildhorn and not just the management company.
Beyond just showing up, being kind, and asking about their families, we also recognize that financial incentives are usually the most influential. And we’re putting our money where our mouth is. Wildhorn recently launched a bonus program for our teams—and we’re hearing it may be the first of its kind.
This is a program that our Community Managers and Service Managers are eligible to participate in. It’s paid out of our own pockets, and it sits on top of their already existing bonus program from the management company. We created a simple formula to look at our NOI—both revenues and expenses—and reward the senior folks working on our assets for outperforming our plans.
Our thinking is that if we beat our NOI projections for the year, then the asset is worth more than we anticipated it would be. And that we want to share that success and added value with the folks most responsible for making that happen. Our Community Managers and Service Managers. They are the captains of our ships, and we’re thrilled to reward them for their hard work.
Along the way, we hope it will increase the retention for our most important people and create loyalty that allows us to grow with them across multiple Wildhorn-owned assets. It’s a relatively simple concept, and we’re still in the early days of seeing how much of an impact it makes. But the feedback from the teams—and the corporate staff—has been incredible. And if the excitement translates at all into asset performance, we’re going to be excited to pay out some big bonuses to our teams.
After all, if the Captains of our ships are doing their best then the whole fleet will be headed right where we want them to be—profitable ventures for our investors.