If you’ve come to this post, chances are you’re curious about what it’s like to be a real estate asset manager, or you’re about to start working with one. Asset management is a key component of multifamily investing. An asset manager can mean the difference between a smooth process and a bumpy ride.  

Whether you’re considering a future in real estate asset management, or want to know more about what one can do for you, understanding the scope of work is important.  

We’ll talk about what asset management is, what an asset manager does, the experience required to fulfill the role, and what sets asset management apart from property management.  

What does a real estate asset manager do?  

In the real estate industry, an asset manager’s goal is to maximize the return on investment of the properties they manage. In the case of multifamily asset management, the goal is to help investors who have shared ownership of the property increase their returns.  

Roles and responsibilities for multifamily asset managers  

Multifamily asset managers are responsible for choosing the ideal property in the right location to maximize returns by understanding trends in the market and the industry. They serve as fiduciaries for real estate investors and figure out property management.  

The full list of responsibilities for asset managers includes:  

Finding properties 

This can include performing market research to figure out which areas are best to buy properties, touring different buildings, and deciding which classes of properties to invest in (for example, multifamily).  

Underwriting projects 

Underwriting is an analysis process that involves examining the potential returns, as well as the risks, from a real estate investment or loan. In underwriting, an asset manager wants to consider the condition of the property, where it’s located, its current value, and the potential rental income that will come from it. If there’s too much identified risk, the property isn’t worth the trouble.  

Making offers 

Once the asset manager weighs the pros and cons, it’s time to make an offer on the property. Depending on how hot the market is, there can be a lot of back and forth involved.  

Putting properties under contract 

You’ve got an accepted offer! Now what? It’s time to put the properties under contract. The asset manager will sign a contract with the seller, giving them the exclusive right to buy the property at the price that was agreed upon during the offer.  

Putting in risk money 

With the contract, the asset manager also needs to take on financial risk in the form of a down payment. They might also take on other out-of-pocket expenses.  

Doing due diligence 

Due diligence can include a physical inspection, contractual inspection, reviewing the books, and making sure nothing feels like fluff – essentially, ensuring the business will run the way it is expected to run.  

Raising funds 

Now that the property is under contract and due diligence is complete, it’s time to raise funds. In addition, asset managers also put in their own money, which is typically up to 10%.  

Hiring a property management team 

One person can’t manage an apartment complex alone – they need to have a team. Asset managers are concerned with securing the asset, but to get the day-to-day operations off their plate, they need to hire a property management team to take care of maintenance, tenants, and repairs.  

After the real estate asset manager has closed and taken over the property, they move into the actual asset management piece of their work: 

Managing the financial performance of the property 

It’s the multifamily asset manager’s job to ensure the property is performing as projected. This requires regular interfacing with the property management company, including: 

• Weekly KPIs calls 
• Frequent inspections 
• Monthly reports to investors 
• Financial reporting to lenders 
• Vendor selection & optimization 

The asset manager also oversees more strategic decisions that will lead to further success for the property:  

• Controlling budget
• Marketing
• Staffing  
• Taxes
• Delivering quarterly distributions & yearly tax documents to investors 

Selling (or refinancing) the property

The final phase comes when it’s time to sell (or refinance) the property. The asset manager either gives the returns back to investors and continues to operate it or works on the disposition (sale) of the property. This involves preparing the property and financials, listing it with a professional broker, screening and selecting the buyer(s), negotiating, and working to get the maximum return for investors.  

Clean up 

When all is said and done, the multifamily asset manager will clean up, close the property, make final tax preparations, document everything, finalize any necessary legal matters (contracts and terms), and close the LLC. 

What sets asset management apart from property management?  

As you can see from the laundry list of tasks on the asset manager’s plate, property management is a subsection of the entire multifamily property process. While an asset manager might choose to take on property management on top of all their other duties, this would mean getting bogged down in daily tasks that could keep them from exploring other opportunities or focusing on optimizing revenue and costs.  

An effective asset manager should be focused on high-level, long-term financial objectives – where are we trying to go and how will we get there? They should be concerned with real estate portfolio management, cash flow, and how they can secure a strong return on investment on the property, among other things.  

Conversely, property managers solve short-term concerns: How can we attract new tenants for our vacancies? Which apartments need repairs? How can we work on capital improvements with the asset manager? What can we do to keep our tenants happy? How can we make it easier for tenants to pay rent and on-time?  

What experience is required to be a multifamily asset manager?  

While there aren’t requirements that are set in stone to be an asset manager, the role requires an ultra-organized person who can wear many hats, is knowledgeable about the real estate market, and likely has some business or finance background.  Ideally, someone who has managed a Profit and Loss  (P&L) before.

Asset managers tend to have a bachelor’s degree in business administration or something similar and may also have some certification – they may be a licensed real estate agent, a Certified Facilities Manager (CFM), or Certified Property Manager (CPM). The more asset managers know and can educate themselves about their area of focus, such as multifamily real estate, the more successful they are likely to be.

What sets a great asset manager apart?

 A great asset manager can make a bad deal flourish, and a bad asset manager can ruin an amazing deal. It’s important to select strong asset managers for your assets. Here’s what you should look for before you work with an asset manager: 

Track record 

An asset manager should have relevant experience in the market and asset classes. They should have the ability, experience, and skills to meet or exceed investment projections.

Team player

Great asset managers should work hand-in-hand with the property management team. They should communicate and share goals, adjust plans, and be proactive in offering help, resources, and setting clear priorities.

Effective delegation

Delegation is so important – asset managers should interfere with property management staff duties. Instead, they should let the best people do their jobs accordingly. The best approach is to work with the lead property manager to assign the proper responsibilities and grant them the decision-making authority, while maintaining a culture of accountability at all levels.

What are alternatives to real estate asset management?  

If you feel energized and inspired after reading this post, congratulations! You might have what it takes to be a real estate asset manager.  

However, if you’re feeling overwhelmed by the prospect of managing it all, don’t worry! There are alternatives to asset management, where you can reap the benefits of multifamily investments without making huge financial and time commitments.  

Passive multifamily investing is a great way to work with a trusted asset manager, who will handpick properties that are ready to grow. Passive investors can benefit from the knowledge and experience an asset manager brings to the table, while being hands-off and removed from the daily grind.  

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