Ensuring Success of a Property Acquisition within the first 90 days

The first 90 days of any acquisition are crucial to the success of the investment. Turning the purchase of a property into a success requires not just tremendous skill but also a culture of agility and learning on the ground. The pandemic has created a growing appetite for Value Add strategies as more operators are needed to help capture the inflationary benefits of the growing rental market. This poses the traditional industry problem – how do I scale.

Defining the challenge

Most operators struggle to deal with the change management of taking over a new property despite having done it multiple times. The challenges usually are linked to communication to residents and training of on-site staff. More often than not, the asset is purchased with the onsite team in place. You have both new customers and team members to adopt new processes and absorb into your “way of doing things” while physical changes are mostly minor with signage changes and evaluation of future renovation pipelines.

The acquisition period is one of additional support with phones ringing off the hook while the staff is being trained by the new management company. The data collected with Adam shows that the resident support requests double in the first month of acquisition. The operating team needs to hit the ground running while maintaining their brand value by providing a good first experience to their newly acquired renters.

Prioritizing Frontline Intelligence

The first few months can produce the platform for a very successful value add strategy by doing one very important task – listening. If you are entering a new market with the acquisition or have been purchasing the whole street, every community is unique. It has its own challenges which may be linked to the physical condition of a property, the service offering, or resident needs. The exercise of engaging in gathering field intelligence is often missed in the chaos of management take over. It is critical to learn about the new asset as quickly as possible by using all tools necessary to pick up trends. Operators who focus on a data-first approach to strategy are agile in prioritizing the pain points first and build trust from day one.

“We recruited ADAM within the first month of acquiring our largest asset in Denver with the only purpose of learning more about our new property and residents. We were able to take stock of the situation within days instead of waiting for months of settling in.”

Making changes fast

Most operators try to continue operating with the status quo and trickle-down change over months. Any changes including the addition of technology or reorganizing of teams should be done early on in the acquisition. The changes in personnel or service offerings should be introduced within the first 90 days in order to get buy into integration objections of the operating platform. When every property is managed in its own inherited format, it only creates a burden on the operating platform it is now a part of. Properties which integrate into the new owner’s platform within the first 90 days are able to benefit and contribute to the overall fund or platform return quickly.

“When we purchased this portfolio, we wanted to minimize change and yet bring improvements. Adam was an easy decision because it helped us bring a lot of change without it impacting the status quo for the residents or the teams.”

Managing Recruiting and Talent Retention

The first few weeks of an acquisition can stress the inherited staff. They are meeting a new employer and at the same time dealing with additional support with phones ringing off the hook with residents asking about the changes they should expect. It is also a time when they are booked into training sessions with their new employer and are unable to focus on their day-to-day operations.  Over 40% of new operators see staff turnover within the first 90 days of an acquisition. As of July 2021, there are 70,000 active online job openings in property management in the United States. It is important that the new operator comes to their new acquisition with a set of tools that can impact the team’s productivity without additional chaos and pressures of training.

“The day of the first rent payment after we took over the property was hell. We had so many calls asking about how to make the payment and what payment types we would accept. Having Adam handle these in that week was like having extra help in the office. ”

Productivity, people & profit is a value add strategy

An acquisition is a time of great celebration although it usually has a very little instant pay-off. By focusing on field intelligence, talent retention, and effective change management, each acquisition can bring value that can position an organization for further growth. However, an acquisition that is operated in a reactive way will be a drain on the resources of the larger organization and hold back its growth.