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Asset Management with Kyle Mitchell

Asset Management with Kyle Mitchell
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Dave Debeau [00:00:09] Hi everyone, Dave Debeau here with another episode of the Property Profits Real Estate podcast today, zooming in from beautiful Scottsdale, Arizona, are my favorite places in Arizona. It's a lovely town. We've got Kyle Mitchell. Kyle, how are you doing today?

Kyle Mitchell [00:00:23] I'm doing great, Dave. Thanks for having me on.

Dave Debeau [00:00:26] Well, it's my pleasure. I had the pleasure of being on Kyle's podcast a few weeks ago. Kyle's a very accomplished not just a real estate entrepreneur, but an entrepreneur and multifamily syndicator is a podcast host. He's a busy, busy guy, over 40 million dollars worth of real estate under management. So it's a pleasure to have you here today. And today we're going to be talking about asset management. And I noticed you got a nice logo there right behind you. So, I mean, before we jump right in, we've got listeners from all sorts of different backgrounds, experience levels, real estate, investing styles, locations. What does asset management mean to you?

Kyle Mitchell [00:01:07] Yeah, a lot of people get asset management confused with property management, actually, and they are certainly two different things. Asset management is essentially the owner or the manager of the company or the person looking after the actual investment, that person managing the manager, putting systems in place to make sure that your business plan is being executed, staying within budget. And like I said, holding a property management company accountable. You're buying a multimillion dollar business here and buying apartments. If you're just going to hand the keys over and all your money over to the property management company and say, hey, do your best to manage this property, you're probably going to be in trouble. Maybe the last 10 years you could have gotten away with it with the market being so strong. But we're now in uncertain times and you definitely need to have someone on your team. Maybe it's not you, but someone on your team that's able to manage the business plan and manage the manager.

Dave Debeau [00:01:58] So what would be the difference between asset management and somebody who's kind of like the general partner on a deal that's kind of the person that everybody has or the syndicator or the person that's, you know, everybody's kind of seeing as the main guy or gal in charge of the deal?

Kyle Mitchell [00:02:15] Yeah, I think it depends on how your company is structured. We manage our own deals and so we asset manage our own deals as well. But there's other people who maybe have a staff of people of five or 10 people in one of those people may be an asset manager that can focus on that property or your whole portfolio properties. But essentially someone on that general partnership team is going to be in charge of managing the manager, managing the business plan, know a lot of general partners out there will buy the property and not pay too much attention to the property. And the more you pay attention, the faster you can get things done, the more efficient you are and really the more money you can make and drive that in a while. I think most of the money in the syndication where we're which is the space that we're in, you make money in that ninety to ninety eight percent occupancy, that's where the big bucks start to come in. And so even just a half a percent of occupancy or one percent of occupancy can really boost your profits and your investor's profits greatly. So it's really important to have someone on your team, again, doesn't have to be you, but someone on the general partnership team really keeping a close eye on those things, even down to the point where it comes to budgeting and construction management, how much you're spending on supplies and how quickly you're doing turns and full renovations, all those things. If you can trim a day, two days a week off of them, it grows exponentially on the bottom line.

Dave Debeau [00:03:33] Yeah, well, that makes a lot of sense. So it kind of sounds like you've got a background in this in this kind of in this kind of thing. Your detail focused kind of person might tell us a little bit about that. Now, you came to understand the importance of asset management.

Kyle Mitchell [00:03:48] Yeah. Before I started in multifamily, which is over three years ago now, I was in the Gulf business for about 16 years. And a lot of people say, oh, golf compared to real estate, there's no correlation there. And I always disagree with people. There's always something you can take from your past experience and translated into applying it into real estate or whatever you're going to do in the future. So I was a regional manager for golf management company. And so what that was is essentially property management, but for golf courses. And so I understand a lot of the operations pieces for property management on the apartment side because I did that on the golf side. So managing people, hiring, firing building systems, holding people accountable, driving the bottom line and working within margins. To be honest with you, the golf industry and property management is very it's a very thankless kind of job. And you run with very thin margins. You've got to understand how to make things work and be efficient. So that's what I did for sixteen years. And that's why I'm so passionate about bringing outside over to multifamily. And there's a lot of great operators out there. But I think a lot of the education out there starts with, hey, how do you get your first deal done or how do you raise millions of dollars of capital, which all those things you have to learn? They're necessary and they're great. There's not a lot of people out there talking about. After we close on the deal, how do you run this thing, how do you make sure it runs efficiently and how do you get it to the point where you're exiting the property, which is where everyone basically gets their return and makes their money? So that is just as important, if not as important than getting your first deal?

Dave Debeau [00:05:22] Yeah, definitely. So what's kind of the the size of a portfolio a person has to have where asset management becomes something really to be concerned about? Obviously, it's a concern for any size portfolio, but where does it really kind of kick in?

Kyle Mitchell [00:05:39] I'll be honest. I will say any size portfolio. I mean, if you have a single family home, are you going to asset manage it? Probably not. But in multifamily five plus units, there's definitely ways that a good asset manager can make that property much more profitable than someone that doesn't know what they're doing. I go back to saying you're buying multimillion dollar businesses here and multifamily is a business. And if you're buying a business, you should have someone that is in charge of managing it. Right. Whether it's an operations manager or yourself or an asset manager, you need someone keeping an eye on the business.

Dave Debeau [00:06:15] OK, well, let's say let's say I'm a mom and pop real estate, OK? There are a lot of folks watching this podcast. Probably fit that category. I've got maybe I've got a few small multifamily properties in the portfolio, maybe not at the at the profitability level to be able to hire somebody as an asset manager right off the get go. What kind of what kind of skills do I need to be focusing on if I want to do my own asset management?

Kyle Mitchell [00:06:44] Yeah, essentially it's setting up systems to identify bottlenecks is what I call it. And by identifying those bottlenecks, you're able to ask the right questions, right? You're not asking things like what is our occupancy and how many leases do we get this week? You're asking why we didn't get the lease from the 10 leads that came in yesterday or whatever it is, you're asking the right questions, but essentially it's working with your property management company. It's not micromanaging, but it's working with your property management company to improve on the systems, to become more efficient, identify the things that are challenges quicker, and then attending to those things. So you don't have to be a professional asset manager, have a huge background in management operations to do well. But it's about paying attention to these things, you know, peeling back the onion a layer deeper, asking questions instead of just trusting your property management company with everything that they say you've always got to trust but verify.

Dave Debeau [00:07:41] It makes a lot of sense. So in your experience and I know you do this with your own portfolio and you're you're working a lot of other people that are learning about asset management. Where are the biggest bottlenecks? Usually, like where are the biggest challenges that you just see over and over and over and over again that we just don't clue into as people that are delegating all of this to your property management?

Kyle Mitchell [00:08:07] Yeah, I'll name two. And they come back to really people. Right. When you have businesses, you have to manage people and managing people is difficult. It's just a never ending cycle, unfortunately. And you manage different personalities and different ages and all sorts of different things. But the two areas where I think the biggest bottlenecks come into play is in the leasing side of things. How many leads are coming in? How many are you converting? Are we getting back to those leads quick enough? Are we professional? Are we really selling the property? And then the second part of it is renovation management, where I think a lot of people miss the ball is just budgeting. How much are you spending? How quickly are you making those turns? Is the communication between the management team and the renovation team quick enough to where you can make a turn in twenty one days for full rehab versus thirty days now that's nine days a vacant unit that you're saving there. So I think those are the two areas that we really focus hard on making sure we're as efficient as possible.

Dave Debeau [00:09:06] Yeah, that makes a lot of sense. So it sounds like you've got a whole kind of program or some sort of training around asset management. You can kind of give us the gist of what that's all about.

Kyle Mitchell [00:09:19] Yeah, essentially, we've got a summit that we have every year and it's a free summit. We're just trying to get people to learn more about the asset management side and understand that when you're buying apartment buildings, it's really important to go in there knowing how to implement some systems and hold people accountable. So we just train people on things like KPIs, how to track the KPIs, how to measure them, what what are the right things to look for?

Dave Debeau [00:09:41] What is a KPI for them?

Kyle Mitchell [00:09:43] Yeah, sorry. It's a key performance indicator and it's just basically you're taking data. And what we do is we have a software that moves it into charts and graphs so we can see trends. And you're tracking trends to be able to ask the right questions on is your occupancy, which is an easy one. How is that track over the last six months? How have your collections tracked over the last six months? How many leads are you getting in and converting them to? Lisa's things like that, and so we teach people what those are, but how to use them to ask the right questions, how to track renovation's, how to manage your manager, how to build your team out, who do you want on your team to be efficient? Things like that, all on the side of running a business versus just going out and getting a deal.

Dave Debeau [00:10:26] Yeah, well, that's that's awesome. Well, this is kind of really reinforces the importance of asset management. I appreciate this because I wasn't completely up to speed on on the difference between asset management and property management myself. Now now I get it. I understand the the importance, even if you've if you're doing this yourself, to kind of separate the property management from the asset management and to really start crunching those numbers. So, again, if people want to find out more and perhaps attend your summit, what should they do?

Kyle Mitchell [00:10:58] Yeah, absolutely. Our summit is a summit. Twenty, twenty one dotcom, and that's completely free. That'll be June. Twenty first, the twenty seventh. We actually have a book coming out on June twenty ninth and it's solely focused on asset management and it'll be a great book. It's called Best in Class and it's really to help you become the best in class operator. So that won't be coming until June. But definitely check that as well.

Dave Debeau [00:11:19] All right, fantastic. There's been a lot of fun. So again, if people want to reach out to you, they want to find out more. Would you what would you do?

Kyle Mitchell [00:11:26] Yep. Either go to AMM Summit twenty twenty one dotcom or reach out to us on our website where there's a free passive investors guy that we give out at Apte Capital Group Dotcom.

Dave Debeau [00:11:36] All right. We'll make sure I've got those in the shadows. Thank you very much.

Kyle Mitchell [00:11:39] Yeah. Thanks, Dave. Appreciate it.

Dave Debeau [00:11:41] All right. Take care. Talk to you soon. See on the next episode. Bye bye. Well, hey there. Thanks for tuning into the property profits podcast. If you like this episode, that's great. Please go ahead and subscribe on iTunes. Give us a good review. That would be awesome. I appreciate that. And if you're looking to attract investors and raise capital for your deals, that may invite you to get a complimentary copy of my newest book right back there. There it is, the money partner formula. You got a PDF version at Investor Attraction book, dot com again, investor attraction book, dot com ticker.

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