Proper planning is as critical as proper execution. CONTI, with over 10 years of multifamily experience and over $1B executed in multifamily transactions, understands this. We approach every project with a strategic process designed to maximize the value of the property. It is a process that begins before we even set sight on an acquisition and continues throughout our long-term investment in the asset. Most importantly, every step along the way is overseen and evaluated by a diverse leadership team. This assures every aspect of the business has an equal voice throughout our ownership of the investment.
During the criteria stage, we identify potentially viable properties and measure them against our strict acquisition criteria. Once assured of this, we assess opportunities the property presents that would make it appealing to renters. This is followed by a “drive by” which lets us see first hand the quality and potential of each property. The last step in the criteria stage is tracking the potential acquisition. In many cases, deals that may not work initially, return to us under different terms.
The analysis stage of the life cycle is where we begin our evaluation of determining the best use and highest potential of each property. We do this through reviewing detailed market research and shopping rental comps in the area of the subject property. At this point, we begin the underwriting process and the development of our “Dashboard” underwriting analysis. All of this is geared towards helping us assess the hidden, value added potential of a given property.
3. Due Diligence
Our goal with the due diligence process is to have a thorough understanding of all material risks that could significantly impact the returns during our ownership. Once under contract, we dive deep, digging up all pertinent information. To get the best results, we conduct a thorough physical inspection of the property, walk each unit and audit all leases. Then, we scrutinize historical financial statements and interview the in-place property staff. In all, we have a 200+ point checklist, which is scrutinized by a dedicated team to assure we have all our checks and balances in place.
Based on our findings, we work closely with our lender partners to obtain term sheets to help structure the deal to maximize reward vs. risk. Our Deal Committee review is the final step where a go/no-go decision is made – this is where our 125+ years of collective experience helps ensure all significant risks are adequately addressed. If a “go” decision has been made and our negotiated terms have been agreed upon, we proceed to the next phase: Acquisition.
Less than 4% of the properties we screen become CONTI-owned assets. But, once the decision is made to acquire a property, there are critical steps to close on it. We prepare and deliver a business plan, finalize debt terms, form an entity and finalize our underwriting. We meet with our investor partners to help them understand the project. We have a series of meetings to develop our value added scope for the property, which includes meetings with our vendor partners to obtain bids to assemble our renovation budget and re-shopping the rental sub-market to verify and update assumptions. Prior to closing, we’re making property staffing decisions and preparing for takeover of the property.
CONTI has fine-tuned its integration process over dozens of acquisitions and our ability to leverage that expertise affords us a significant advantage when it comes to a smooth transition of ownership. In the integration stage, CONTI is screening staff and laying the foundation for our process improvements. The renovation plan is being finalized and our accounting system is being incorporated. Leasing materials as well as the resident payment portal are being readied.
Our goal is that residents, prospects, and the on-site team can feel the difference that we bring to the table right from the beginning of our ownership.
Renovations is where CONTI’s plan for the property begins to take shape and it represents the most visible aspect of the value added process. Since the early stage of the process, our dedicated team has been focused on spending dollars strategically, ensuring we don’t over improve, while remaining aware of market trends so that we are positioning ourselves for the future.
7. On-Site Operations
On-site operations is the core of our long-term success at each property. As a vertically integrated company, we have an experienced group of dedicated team members responsible for day-to-day management and monthly performance. From the moment a potential renter arrives on property, our on-site team’s presence is felt. Some of Operations’ responsibilities include leasing, occupancy, rents, reporting, advertising, staffing, training, payroll and resident satisfaction.
8. Performance Management
Our Asset & Property Management teams take a continuous improvement (kaizen) approach, where we focus on continuously optimizing the performance of the property and our portfolio. We initiate asset improvements through comprehensive strategies that enhance the resident experience through renovations, rebranding and resident services. From negotiating property taxes to monitoring key performance indicators and making strategic decisions, our goal is to maximize cash flow to investors while balancing the needs of each property for the long term.