• Having the right management system: Set responsibilities, define expectations, and establish methods to review work. Also, eliminate waste wherever possible • Being data-driven: Don’t let emotions drive decisions! Let the data lead you to opportunities. • Knowing when and how to downsize assets: When it comes to properties, have a laser focus on profitability. It makes sense to sell assets that your research predicts won’t perform well in the post- COVID world. Having that cash on hand will put you in a position to capitalize on opportunities that arise. • Knowing when and how to downsize personnel: Human capital is your biggest asset, but also one of your biggest expenses. When it comes to personnel, downsizing gets complicated. University of Colorado-Denver research shows that proactive downsizing, or cutting people before revenue suffers, doesn’t necessarily work. Companies that conserve resources through pay cuts, furloughs, and other methods perform better during the recovery and are more profitable over the long run.
failures. Track those metrics, such as your break-even number, conversion rates, and return on investment. And hold yourself accountable. 4. Stay consistent Test and implement the best practices for your business. This includes all internal processes, from how you ensure people are in the right positions to how your research deals. This also involves doing your due diligence and thoroughly planning for all phases of the investment, from acquisition to repositioning to disposition. Now more than ever, you need proper due diligence to ensure you don’t enter bad deals. This takes discipline and hard work, so don’t cut cor- ners. Consistency in operations is vital to succeeding in the post-COVID world. At DLP Real Estate Capital, we adhere to the 20-Mile March philosophy. This comes from Jim Collins’ book, Great by Choice. The idea is that you march 20 miles every day towards your destination, regardless of outside con- ditions. You don’t march 60 miles one day, then zero the next because of bad weather. That’s how you perish. 5. Have a good capital plan One reason there’s less competition for deals is because of financing hurdles. Many real estate investors simply don’t have access to debt funding. This tightening of credit has created great opportunities for those operators who’ve built deep relationships with lenders, as they’re in a position to buy. Conversely, those without lender rela- tionships have experienced trouble finding funding. The lesson here is to work on building relationships with lenders. It will help you access debt and win deals. 6. Mitigate internal risks To win in the post-COVID world, you have to focus your resources on long-term sustainability. That doesn’t nec- essarily entail cutting costs and laying off people, though downsizing could be a part of it. Real estate investors should prioritize: • Getting the most out of everyone on their team: This requires you to get the right people in the right seat. Make sure team members are where
NOWIS THE TIME TO BUILDAN ELITE ORGANIZATION
Too many real estate investment firms weren’t pre - pared for COVID. When the pandemic put stress on the market, we saw many competitors stop acquiring prop- erties. They got into defense mode. They shed proper- ties, laid off key employees, and some even went out of business. If you’re still standing, know the fundamentals you need to succeed remain the same. And you still possess the power to grow and scale your real estate business—even in this volatile landscape. Ultimately, your success depends on much more than having an intelligent, cautious strategy. You need to do everything possible to get the right people in the right seat, implement operational best practices, and establish a proven system for winning deals. That’s how you build an elite organization. Now’s the time to get your real estate business to be the best you can be. Because if not now, what happens the next time the market takes an unexpected turn? •
they can be doing the most for the company. Engagement should be a key focus here too, as companies with high employee engagement are 21% more profitable. Keep team members engaged by clearly setting responsibilities and defining expectations, and giving them the autonomy and resources to reach their goals.
DonWenner is Founder and CEO of DLP Real Estate Capital.
66 | think realty magazine :: september 2020
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