Property transactions – whether from an acquisition or disposition standpoint – always place a spotlight on due diligence. It is a detailed and time-consuming process, but one that must be conducted thoroughly to ensure that the physical condition and financial position of a community are accurately described.
Unfortunately, the paper inspection forms historically used in multifamily are problematic because they make the inspection process subjective, and present too many opportunities for human error.
In order to maximize discovery during the due diligence window, inspection teams need the right tools to accurately and efficiently investigate properties and expedite reporting. Mobile digital platforms provide the consistency, accuracy and efficiency required to give multifamily owners an advantage in negotiations, and confidence in the knowledge that they’re either selling for the right price or getting the cash flow they paid for.
🏠 Acquisitions
Mobile-first inspection solutions utilize fully customizable templates, which establish a thorough and consistent inspection process. A comprehensive template looks at the property from floor to ceiling, pool to playground. It requires inspection teams to assess every aspect of apartment homes, common areas and amenity spaces, creating a net to accurately capture a physical picture of the property.
With a mobile-first system, problem areas and potential enhancements are identified prior to closing, rather than months into ownership. With an exhaustive overview of the property in hand, companies looking to deploy a value-add platform can start obtaining the necessary products and materials before they even own the units and come in on
Day 1 well ahead of the curve.
The real-time reporting capabilities of a mobile inspection system put acquisition teams firmly in the driver’s seat during negotiations. When concerns are identified, they can be immediately addressed, even mid-inspection, enabling buyers to quantify issues and adjust transactions on the fly. Real-time reporting also gives owners the option to preemptively back out of negotiations when necessary, rather than completing the inspection, saving time and expense.
Inspection teams readily embrace mobile due diligence platforms, because they eliminate much of the opportunity for human error – from unreadable handwriting to lost paperwork. Also, with automated tracking and report generation, teams aren’t saddled with data entry after the fact. Photos and comments are easily and automatically linked to ongoing inspection reports, enabling acquisition managers to access multimedia information throughout the process and in real-time.
✅ Disposition
Companies will often run audits on a quarterly basis but having the ability to run audits at any time – particularly when there is a personnel change, can yield significant benefits. Conducting proactive audits offers a bit of “insurance” for property management companies. By automating the lease file audit process, teams gain even greater tremendous visibility into any discrepancies in rent collection and ancillary fee collections, as well as resident demographics.
Proactive audits may indicate that the property could actually be generating more revenue and alert sellers to increase the asking price during disposition. For example, a resident may have requested that their “month’s free rent concession” be amortized across their entire lease. Without proactive audits it may appear that the community rent roll is not as high as projected.
Furthermore, by cross-referencing specific data points and demographic information, teams can strategically tailor their analysis to gain even greater transparency into a property’s financial standing.
Mobile-first platforms automate audit reporting during disposition, as well, providing real-time data to help illustrate the property’s potential and better position the asset.
Though full integrations with property management systems, mobile inspection and lease file audit platforms provide invaluable transparency across the board. Everyone from technicians to the C-suite has access to real-time data ¬¬throughout acquisition inspections and the disposition process, connecting decision-makers with the boots on the ground.
Due Diligence has always felt like an obligation, but the accuracy, accessibility and agility afforded by mobile-first technology weaponizes the process to provide a distinct advantage during property transactions.
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