One of my favorite things about real estate is that each investment is backed by a real, tangible asset. There is something to see, touch and feel. I can go on site and see the property anytime. Being onsite and spending time touring assets, whether we’re on the hunt for a new acquisition, shopping competitive deals or visiting assets in our own portfolio, is my favorite part of this job.
Over the last couple of weeks, I’ve had the chance to tour over 10 deals. When you include walking our own deals that number increases to more than 15 apartment communities. That’s a little heavier than normal, but the team at Wildhorn is making sure that we see every potential deal right now as the market remains tight, in addition to checking on finished renovations at our own assets. As we reflect about all these visits and time spent on site, it’s a perfect opportunity to share why we like walking properties.
To be frank, there are some downsides to spending the better part of 2 weeks in the field. Between getting behind on emails and phone calls, the flurry of work created to underwrite the deals you’ve seen, and the sweaty shirts that come with touring deals this time of year in Texas it can be challenging. However, we operate our business (and life) from a place of positivity and gratitude, so today we’re focused on the things we love about sweating it out on site.
As a former advertising guy, I like to think I’m a creative left-brained thinker. In the world of Real Estate Investing there’s a balance of art and science required. I’m the Art (my business partner is the science). Spending time on new assets gets my creative juices flowing. We’ve written about some different creative strategies we’ve employed to add value (like filling in a swimming pool, repositioning a tennis court, and more)–but you can really only get that sort of inspiration by spending time on site. You need to see the layout of the property, the location of the amenities, the surrounding neighborhood, etc.
Identifying Problems & Opportunities
You can’t be a good owner and operator (in my opinion) if you’re not onsite regularly. We make sure to visit each of our assets at least once a month–and are usually there twice. While on site, you see things first hand that simply can’t be conveyed in emails and photos. Some of these are issues that need to be addressed, while others are opportunities you find. A couple of examples:
- The volume of packages arriving to the leasing office each day is not a unique problem to Wildhorn, but seeing the sheer amount of packages come in (via 2-3 deliveries per day) helps illuminate the problem. After seeing this a few times, we’ve installed a package room at one asset, and are investigating a new package delivery service for our other assets.
- While touring a new deal one day, we saw a resident driving very slowly through the parking lot with 4 bags of trash perilously balanced on the hood of her car. As she rounded a corner, they all fell off and sent trash everywhere. After helping her clean it up, we talked with her about the idea of a Trash Valet service which we added to our underwriting.
- Texas is famous for big thunderstorms, which can cause big problems–from roof leaks to run off issues. The day after a big storm, I drove down to San Antonio to see how the assets fared. During that visit I saw how the runoff was causing drainage issues that funneled water right into a unit that got flooded. After seeing it, we were able to devise a creative solution to redirect the water.
Getting Out From Behind The Desk
Plain and simple, I love being out and about and untethered from my desk. I used to love business travel in my early career simply for the variety it provided in breaking up the week or month. Today, in addition to getting out to meet with investors and partners, getting on site is a great excuse to leave the office see new things.
While I’d argue Strategic Thinking can (and should be) related to Creativity, they are still separate items. Strategic thinking is about making business decisions. Understanding what potential issues are, and then addressing them. On new and potential deals, these decisions are usually related to creating the business plan. Again, creativity is involved but we’re using our time on site to make decisions about what we can and should do–which impacts our underwriting and business plan. On existing deals, being onsite allows us to see first hand what is happening, and make adjustments and tweaks to the business plan we put in place at acquisition. It gets back to this being a tangible business with real hard assets. You have to spend time on them to be able to see issues and think critically about how to address them.
It wouldn’t be an article from us if we didn’t mention relationships, right? Seriously, one thing we love about walking property is the opportunity to create and build on existing relationships. Touring new deals allows us to spend time with brokers and equity partners. Touring our own portfolio allows us to get to know our staff better, and even meet our residents. The more often we are out seeing apartment communities, the better our relationships with all the constituents involved in our business.
Finally you know what else is cool about being on site? We have tons of opportunities to show our investors what’s going on with the assets they own. If you haven’t started following us on Facebook, Instagram and LinkedIn I highly recommend that you do so. You’ll be able to see the places and people that our business plans are based on.