It was coined by former Navy Seal Officer Jocko Willink (made popular in his recent book, Extreme Ownership). It means that if anything goes wrong on a property, it’s the general partner’s fault. As the general partner, the PassiveInvesting.com team believes in an “extreme ownership mentality” when it comes to asset management. If something goes wrong (we made an error or did not provide proper instructions to the team), we take ownership of it.
An example of our process and how it’s been successful happened recently at our Willowbrook asset. During a property call, we were reviewing monthly expenses and noticed one resident building had a water bill four times higher versus the other buildings and no residents had reported an in-unit water leak. We entered a task into Asana, our project management software, and created a game plan to identify what was occurring. The first step was to send out a professional plumber to scope drain lines and see if there was a major leak or break outside of the building. They found nothing wrong. Next, we had our on-site maintenance team walk all units to check toilet flappers, sinks, and hot water tanks. This amounted to a couple of small repairs. Finally, we had Greenville water investigate and analyze usage to see what they could uncover. The outcome? Greenville water issued us a refund.
Now, this might not seem like a big deal in the grand scheme of things, but as Benjamin Franklin once said, “A small leak will sink a great ship.” We take this approach with every aspect, large or small, that could throw off our projections and eat into the overall profitability of our investment opportunities.
By following what we call our asset management “people, process, and technology” approach, we were able to stay on top of every issue while keeping everyone in the loop about what’s going on to resolve it. The people component begins each week with an individual property call that includes on-site staff, the regional property manager, and our team to discuss physical performance (i.e. renovations or required repairs), financial performance, and other key issues. Before our weekly call, the property manager sends a Key Performance Indicator (KPI) report that includes statistics like occupancy, the number of tours, prospective leads, new leases, declined leases and why they were declined, property reviews, maintenance requests, completed and upcoming resident events, and any market changes. The process component brings everyone together on a regular basis which keeps us up to
date on performance and enables us to be proactive.
Throughout the week our management teams communicate over the phone and via email. If there are any deviations from the budget or property performance we can make real-time adjustments and avoid any month-end surprises. The technology component allows us to track our discussions and action items by, as mentioned, using the collaborative cloud-based software, Asana. This technology allows our Passive Investing team to enter tasks, follow-ups, and questions we need answered. It also allows other team members to make comments and collaborate on issues. With Asana we can track and store all activities in one place, so everyone is knowledgeable of what’s happened in the past, what’s being discussed, and what’s occurring at each property in real-time.
We take asset management very seriously. It’s one of the most important activities we do to ensure our business plan is being met and (ideally) exceeded. Using the same stringent parameters of an American hero such as Jocko Willink puts us (and you) on the winning side every time.