3 Tips on Leadership (in Real Estate)

Real estate investing, which we love to do, is based on simple concepts.  That doesn’t make it easy.

The biggest challenge by far is that it involves SO MANY PEOPLE with competing incentives, varied backgrounds, and often big personalities.


How do you get them to all work together to achieve the business plan on a particular property over a particular time?

1. Listen more than you talk.

Yes, you are the leader so get final decision and to say when there is enough information to make that decision.  However – you hired (or teamed up with) these people for a reason.  They know something you don’t whether through background or perspective.  Ordering people to do things without listening carefully each time is a sure way to end up with mediocre talent and compiled mistakes that lead to an average or below average result.


2. Focus on clear & consistent communication processes

Communication drives the team.  As the leader, you set the communication expectations as well as the process.  It’s one of the first and most critical things to establish in any team.  What platform(s) do we use and for what? How often do we communicate? How do decisions get made and documented?  Once established, it is also the leader’s job to enforce it.  Just because Jack decides he likes Teams better than WhatsApp doesn’t mean he gets to switch if everyone else is on the latter already.  Unless the whole team makes that move together of course.  Disparate communication systems can wreak havoc on any team.

3. Establish a culture of doing the right thing

This sounds complicated, but it really isn’t.  You’re the leader.  Do the right thing.  When you talk with your team about decisions they are making, encourage them to do the right thing. If someone does the right thing but it backfires, praise them for doing the right thing and figure out how to pivot from the backfire together. 

After doing this even for a short time, the people who work with you (always “with”, never “for”, even if they are direct reports) will get the message.  Then all those little decisions people who are not you make about types of plumbing fittings to use and contractor grade vs residential grade outlets, will add up to a much more robust portfolio of investments.  This is preferably to a ticking time bomb that happens if the culture is about cutting corners.  Like draws like – be the person you want your teammates to be.


Ensuring you have an outstanding leadership team is a great way to #buildyourownluck!

Want to use real estate to build your own luck, but need more time/money/education?

We’re here to help.

You can start making an impact  sooner than you think.

Join Club Clover and start building your own luck today!


Stabilization is A Process, Not An Endpoint


That’s what our partners at Voyage Holdings celebrated with us in January for our MHP.

 It was a great moment to enjoy all the hard work of the past year. 

But what does “achieving stabilization” really mean? 

Stabilization is a Process, not an Endpoint

When first looking at a property, a lot of the business cases are centered around what will happen after it is “stabilized”.  

What the asset managers and general partners are really looking at is property performance after the first stage (Stage 1) in the business plan is complete.

Stage 1 for a B/C class property acquisition (the ones Clover focuses on) is almost always a big-shift value-add. Think renovations, exterior updating/design, adding new property features, and more – all to allow a quick increase in rental income and resident expectations.

For the MHP, stabilization was initially defined as all lots having resident owned homes at market lot rents. 

Detailed work included:

    • Increasing current resident rent to market
    • Infrastructure maintenance
    • Clearing and prepping unused lots for hookups
    • Acquiring homes to place on vacant lots
    • Getting those homes through inspections
    • Selling those homes to new residents

All that in year!  That’s a lot of change in a short period of time.  We completed the initial business plan.  But that doesn’t mean we’re done…

Enter Stage 2 – Additional value add and operations

Now that we finished the initial business plan successfully, spotify music promotion we are looking at other ways to increase the property value. For instance:

    • Discuss with the city to let us have more lots since we have additional land (now that we did a good job on the others)
    • At what rate can we continue increasing lot rents to keep pace with the local growing economy?
    • Are there nearby potential acquisitions that would reduce operations costs or increase the land value?
    • What other amenities could we offer residents to drive up their happiness enough to pay more than average rent?
    • Are there other financing options that would better position the property financial performance?

There are many more questions like this which can (and should!) be asked by an asset management/ownership team after the initial stabilization is complete.   

After Stage 2 is complete?  Repeat Stage 2. 

And keep repeating until the best financial decision to make is a sale.  Sometimes in this cycle the Stage 2 business plan value-add will be small (3% rent increase), CoinPal and sometimes it will be big (need to upgrade to new fixtures to keep up with competition). 

The point is to not get complacent and think “this property is performing the best it ever will”.  Once you start thinking that, it’s probably time to sell to someone who sees opportunity where you see stagnation.  

Stabilization is a process where you are constantly reassessing and adjusting property operations to achieve the best and highest use in the ever-changing local/macro environment.  Aka – investment optimization!


Want to use real estate to build your own luck, but need more time/money/education?

No problem! 

Clover can help.  

You can start making an impact  sooner than you think.

Join Club Clover and start building your own luck today!


Step 3: Communicate and Operate

Based on the team’s answers to the questions from Step 2, we now dig into the nitty-gritty of asset and property management.  

If you hire a great property manager (PM), this section will be easy because they already have the knowledge and robust processes for it all.


If you instead have a good PM, an ok one, or are self-managing then you’ll need to check and/or develop the processes and measurement systems to keep the property (and your business) on track.


This boils down to one question:

How will the team communicate?


The more time you spend on how, where and what will be communicated by who up front the smoother the whole business plan will run.

What communication platform works best for your team?  

For us, we use a combination of Asana, regular meetings, email and (for time sensitive issues only) text messages.  This way we drive as much as possible communication in written form.  This helps avoid confusion and can be referred back to over and over.

The Asana platform also automates a number of great things like:

    • Recurring maintenance task reminders
    • Recurring CAPEX reminders (inspections needed for roof, HVACs, water heaters, sewer pipes, etc)
    • Recurring asset/property management task reminders (taxes, insurance, filings, 1099s, K-1s, etc)
    • Alignment between vacancies, turn work and up coming move-ins
    • Documents/photos embedded right in the tasks
    • Email reminders to the people for that task when the due date is coming up
    • You can even get fancy and use workflows, templates, goal trackers etc all in one place.
[We have no affiliation with Asana, we just like it a lot]

Other teams use Notion, Google Tasks, spreadsheets or really anything that works consistently where communication can be as centralized and standardized as possible.    The point here is to DECIDE on something and get your team on board with it.  

Don’t take this part for granted.  It makes keeping everyone rowing in the same direction much easier.


Once you have a platform, now you (preferably with your PM) has to fill out all the process and decisions that can be made ahead of time.

This way, the team can act more independently (no one wants to be micromanaged).  Even better, if someone has a question, they can write it down in the platform.  Then everyone sees it, you can update the standard process, and now it doesn’t come up again!

Here are a few ideas for standard processes to develop up front – even if you change them later after operating for a while:

  • How “Market Rent” is calculated
  • How often to calculate key metrics (also called key process indicators or KPIs), and what those are
  • What items are covered by Property Maintenance (very specifically) and what items are considered tenant responsibility
  • How will emergency situations be handled, and what phone numbers are to be called?
  • How to do a property inspection (checklist of items, what to take photos of, where to store the report, how to report issues so they get to maintenance, etc)
  • Script/QA resource for people speaking with tenants/potential tenants so all the answers are the same (or refer to the right person)
  • Which items are categorized CAPEX and which OPEX (yes, this is done wrong all the time by PMs who just don’t pay attention to it)

Hopefully, you’re beginning to see why setting up the right communication platform and process at the beginning is so important.  

Having a plan and the milestones to get there are necessary first steps, but the work to do it comes down to communication and standard processes.  The better you do those, the closer you come to your plan with less stress from the whole team.


How well is the team sticking to the processes?

How will you know this?

Measuring is very helpful, IF the right things are measured. 

Successful business plans and operations plans include key metrics, otherwise known as Key Process Indicators or KPIs.  These give insight into how well the team is working together and progressing towards the business plan goals.

If you can integrate these measurements into your processes, that’s ideal.

For example, lease-up time depends heavily on marketing and traffic.  Measuring how many people are seeing the listing, doing shows and ultimately converting gives you an idea of how effective the lease-up process and team are.  This can be done automatically with digital tools (Rently and Apartments.com both offer data), but also needs to be recorded by on-site PMs (how many people just dropped in, how many phone calls were taken and resulted in an application, etc).  Coming up with a few metrics that encompass all that data is really helpful.  In this example, we use conversion rate to help us see how many people have to be interested for a unit to ultimately rent.



Finally, have a team review.  

Go over the strategy, processes and communication initially and often.   It doesn’t have to be every aspect, every time.  However a stale process almost certainly isn’t helping the team perform at its best. 


You joined with this team because they are smart and capable.  Let them influence the processes and listen to them.  Your business will be better for it and your investors will thank you.

Now you know the process for success – 


Let’s get to work building our own luck!

Enjoy being part of the team but don’t have the time?

No problem! 

Let’s talk about how you can make an impact – both in your life and the lives of others.



Step 2: Identify the Milestones

This part I really enjoy.

A business plan is just the path from today to the goal you identified from this post.


Once you know your destination, you can start filling in the big steps and milestones along the way.


Keep in mind – the only thing guaranteed is change. This will not be perfect!


At this point we’re not getting very detailed, but a clear path from today to your goals laid out for the different aspects of the project keeps your team all rowing in the same direction.


Questions we answer with the team at this stage:

What maintenance/upgrades are required (either for safety, habitability or insurance)?

Which of the pieces in our goal are the biggest levers to achieving returns?

What level of operational changes are needed?

What level of interior finish best supports our end goal?

How much up-front capital do we have to work with?

What timeline are we on to achieve the target market rents?

Once you have these pieces agreed to with your team, you can see much farther ahead to where you want to end up, like viewing the rest of the trail from the top of a mountain.

Next we’ll cover how to enact your plan with your team so that it is both robust AND flexible to big picture (macro) changes.

Love being part of the transformations but not the time and process?

No problem! 

Let’s talk about how you can make an impact – both in your life and the lives of others.



Step 1: Defining A Property’s Goals

How do you create a business plan before you’ve even under contract?

First – a business plan is a living thing.  It changes constantly, especially in the early stages of evaluation.




Without it, you’re going on a journey with no destination or idea of what supplies you need.  


Could you make it to an amazing place? 



Is it more likely you’ll end up lost, hungry, covered with insect bites and wishing you’d packed sunscreen?

Also Yes.


Most multifamily properties fall into one of these categories:

  • Fully Stabilized – This is what all other categories have business plans to achieve.  These typically >90% occupied for the past 3 months at market rates, are being used to their highest potential and have no significant issues.
  • Light Value Add – Small improvements (think lighting, paint, cabinet hardware, minor exterior improvements, etc) changes only needed to bring property up to market rates and be Fully Stabilized.
  • Heavy Value Add – Lots of issues and investment needed (think plumbing, electrical, mold remediation, structural fixes, significant upgrades, etc) to get to Fully Stabilized. However that investment is still worth it because the best use of the building/land is to get it back to former glory.
  • Redevelopment Opportunity – Property is not being used to its full investment potential.  For example, a single family home in the middle of a fast-growing market could offer much higher returns if it was torn down and a commercial building took its place.  This takes the most investment and risk, but also can provide very good returns.


Spotting which one of these you (1) are interested in and (2) have the network/resources to pull off is the first key piece of developing a good business plan on a particular property.  


The good news is that if you don’t have (2) yet, there’s a ton of free resources, groups, and mentors out there to help you get to what you are interested in.  I’m happy to help!


Or if (1) doesn’t sound so fun, let’s talk through how you can make an impact – both in your life and the lives of others. 

Finding the “Just right” Renovation Plan

Renovation projects on income producing properties are a bit tricky.  Smaller operators tend to either over- or under- finish, and this leads to challenges getting that target return on investment (ROI).  


Below are the steps we use to figure out the best game plan on a specific properties, with examples from our own portfolio.

  1. Research. Research. Research.

Each property is in a different market, unless they are literally right next to each other.  Even then differences are possible.  Knowing that local market and how it is being impacted by growth patterns, local development plans and business investments is the most important thing in developing your renovation plan.  Ask yourself:

  • What are my exit strategies?  If you’re buying to hold or have a multifamily building then the finishes are different than someone planning to sell a SFH in a few years to an owner-occupier and are using the rents to ride out the market volatility. Know who you are and will be compared to at exit.


  • What does my competition currently look like?  Do they have granite, washer/dryer connections, dishwashers, microwaves, and modern finishes? Or are they leasing up with threadbare carpets, poorly patched drywall, doors that don’t properly latch, and minimal used appliances?  Knowing this will allow you to position your property for minimum updating while attracting the best of the tenant base looking in that market.  You can find this out by checking websites and photos of properties for sale, but even better is to do some mystery shopping.  Drive around (or hire someone to) and gather photos and data on your own.  Marketing does not always match real life.

2. Decide on the target market

A renovation is not done on a whim.  For some reason, this unit isn’t performing to the business plan and needs some kind of change.  Assuming from the research in step (1) you found some differences between this property and the competition, now we need to decide what the goal of the renovation is.  Ask yourself:

  • What is the target tenant profile?  Do you want to position the property with lower than average rent to fill vacancies quickly and keep occupancy high or higher than average rent to attract higher income earners? Do you expect high turnover in the market or is the tenant base sticky? While it is great if you can attract multiple types, picking one tenant profile that best fits the business case helps to guide the property design.
  • What rent level matches your target tenant profile relative to the competition?  Is the larger market generally growing so pushing rents could work or is it stagnant/shrinking so that staying at or below average would get the unit filled faster?

3. Decide on a target finish level

Based on the information from (1) and (2), you can match the chosen rent and tenant profile with what other local properties are offering.  That gives you a starting point for developing your own target finish level.  After you have this starting point, ask yourself:

  • Do I need to do all of these changes?  If not what are the changes that will yield most of the return with the lease investment?  If you’ve heard of the 80/20 rule, it applies here as well.  Sometimes a simple face lift is enough to get to the target rent levels.
  • How long do I plan to hold the property for? If you’re doing a quick 1-5yr hold, putting in very robust finishes to minimize ongoing maintenance may not provide a strong ROI.  That’s not to say buy the cheapest possible finishes (most of those fail in a year or two).  For example, you may need to chose between installing tile floors in kitchens/baths (almost never replaced) vs high end wood-look sheet vinyl (5-10 yr replacement) vs laminate vinyl plank (LVP) (20-25 yr replacement).  These choices are unlikely to impact rent significantly, but they do impact maintenance and operation reserves so it is important to weigh the choice against the business plan.
  • How long can the property be vacant for? This is an often overlooked cost of renovations.  Every day someone isn’t paying rent that counts as a loss of income. If you are tight on money and reserves, you need to consider this loss of income in your business plan. If you can’t find quality people to do the bigger lift work quickly and in your budget, doing a smaller but faster face lift may work best.  Changing out cabinet and door knobs, bath hardware and a fresh coat of paint can work wonders and can be done in a few days.
  • What finishes are readily available?  With the supply chain issues, sometimes the finish we want is not there.  Or consider that picking a specialized light fixture that then gets broken can delay a later turnover.  Picking from finishes that are readily available in your market and likely to continue to be helps source materials quickly even after the project is done.

4. Review the plan and get feedback

Steps 1-3 guide you to a solid plan for your property renovation.  If you’re relatively new to the market, now is a good time to ask for feedback on the plan before you execute it.  A property manager (or a few) are best if you have developed those relationships already.  If not brokers are another good source because they see sales and comps all day and generally want to get on your good side for when you go to sell (or buy a new property) at some point.  Use this time to cross-check your research data as well.


Deciding to do an interior renovation can have a very positive impact on a properties return on investment, often called “forced appreciation” because they can lead to higher income which increase the overall property value.  

To avoid spending more than needed or spending to little and not getting the right impact, ensure you have a solid plan by following the steps above.


Have questions?  Want to talk about renovations more?  

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