FUNDAMENTALS
OPERATIONS
Building an Elite Organization
ENSURE YOUR BUSINESS THRIVES IN A POST-COVID WORLD
by Don Wenner
It may be tempting to think the post-COVID world will look much like the pre-COVID one. The reality is the landscape has changed. That’s why experts list COVID-19 as the top issue affecting real estate going forward. Uncertainty remains, and the after- math of the pandemic will test our priorities, resilience, and ability to execute. Most of all, the Coronavirus pandemic has helped us realize that, when volatility and turbulence hit, only the strongest survive and thrive. Yes, the best real estate investors have cash on hand and own properties that deliver cash flow. But there’s more to it. Businesses were profitable before the pandemic be - cause they executed very well and operated efficiently. In a post-COVID world, they’ll be successful for the same reasons. If you built your company with a focus on having great people and consistent execution, you can weather this storm. So, as much as success in the post-COVID world is about a smart investment strategy, it’s also about having a strong company culture. In this article, we’ll look at why that is and how having the right operations and right people can enable you to fight through challenges and emerge prosperous.
cies hit 4.3 million in May 2020, many began to worry about another housing crash. Meanwhile, concerns about future waves of Coronavirus cases have led hospitals to stock up on supplies. It’s hard to predict what the future holds. Real estate investors should take a conservative approach, one that will help mitigate the risk of uncertainty. Because in the post-COVID world, additional precautions are essential. Given how lenders have changed their lending strategies to mitigate risk, real estate investors should: • Prepare more cash out-of-pocket so that they’re less leveraged
• Calculate a higher cost of capital and higher interest rates into their deals • Have more reserves, enough to cover at least six months of payments (principal, interest, taxes, and insurance) • Focus on building relationships with lenders who have control of capital and you are confident will still be standing if we have another government shutdown.
Having a more conservative approach is key to success- fully navigating uncertainty, but it’s only half the battle. You have to execute. It sounds easy, but this is where many real estate entrepreneurs fail. They take their eye off their discipline and their lack of consistency leads to pitfalls, such as insufficient capital and not doing due diligence properly. This is why I stress having disciplined thought, disci-
HAVE THE RIGHT STRATEGY, THE RIGHT PEOPLE, AND THE RIGHT OPERATIONS COVID-19 has created uncertainty in ways we’ve never seen before. When the number of mortgage delinquen-
64 | think realty magazine :: september 2020
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