AppFolio News

Finding your competitive edge in the real estate investing industry

By Nat Kunes July 30 2021 15 min read

Success in the real estate industry isn’t always going to be a smooth ride. Just ask Peter Guber, the Chairman of Mandalay Entertainment and Owner of the Los Angeles Dodgers, Golden State Warriors, and Los Angeles Football Club.

In a recent webinar hosted by AppFolio Investment Management, the multi-industry mogul explained his approach to leading a winning team that can navigate uncertain times — and face today’s challenges with a resilience that reveals new opportunities.

So, what’s Guber’s secret sauce to acquiring, developing, and running four professional organizations while continuing to manage a global media company?

“Relationship capital is the gift that keeps on giving,” he says. In today’s real estate environment, it’s critical to cultivate a team that can recognize and respond to your customers’ shifting needs, from their geography to desires, wants, and fears.

In his keynote address, Guber highlights the three core pillars that encourage this effort:

  • Develop a robust organizational culture
  • Embrace and harness risk
  • Ensure consistency in your organization’s promise, process, and product

Along with Guber, a panel of leading industry experts discussed the importance of this client-centric framework — and how technology like real estate investment management software can help facilitate success at scale.

Building a client-focused culture

When Guber and his partner first invested in the Golden State Warriors, he knew they faced an uphill battle. Oakland, he says, was not a major market, and:

  • The arena purchased was old was outdated
  • They’d paid a record-setting price for the organization
  • The investment project was shrouded in public ridicule, with the team not having won a championship in 40 years

But by 2020, the Golden State Warriors became the top revenue producer in the National Basketball Association (NBA).

Guber says this success stemmed from building a cultural narrative among all enterprise stakeholders. This required intimately understanding their disparate goals and challenges — and joining them under a shared, audience-centric vision.

Carrie Stumfall, the Director of Asset Management at International Capital, LLC, says that her team relied on this same, stakeholder-oriented culture to successfully weather the pandemic’s obstacles. She explains that the majority of her firm’s investors are international clients — and that last year’s travel restrictions significantly interrupted their normal workflow.

But by implementing AppFolio Investment Management’s online investor portal, Stumfall’s organization prioritized and improved its transparency and communication. Her team not only continued moving forward with deals. They advanced the largest capital placement in the company’s 40-year history.

“You have to connect with your clients and your customers the way they connect,” she says. “That’s how you engage them, and that’s what technology did for us — allow us to enhance our client relationships.”

Mitigating — not avoiding — risk

“In today’s world, your level of success is directly proportional to the amount of uncertainty you can reasonably handle,” Guber says.

Over the past few decades, few things have caused more uncertainty than the evolution of modern technology. Its development has accelerated at a blistering pace and intricately impacted the real estate ecosystem, reshaping investors’ priorities, goals, and of course, their fears.

But it’s a fool’s errand to try and stem the stream of innovation, Guber says. Instead, real estate investment management leaders need to harness today’s technological tools to keep their organizations agile, responsive, and attuned to client needs.

Mike Sebastian, the Industry Principal at AppFolio Investment Management, illustrated this intersection between technology and real estate investment at play. He explains how leading organizations rely on real estate investment management software to mitigate their:

  • Hacking risk by holding sensitive client data in a modern system backed by serious security measures
  • Calculation risk through software that helps their operations scale faster while reducing inaccuracies in distribution models
  • Inefficiency risk by leveraging digital tools that streamline investor fundraising and reporting — helping clients move on deals quickly

Staying consistent but agile as an organization

Technology favors change across any industry. But the challenge for many real estate leaders is adopting and adapting to this change without deviating from their organization’s true north.

The panel experts all agree — this success comes down to maintaining a cohesive, integrated culture and identity through strong client relationships.

Guber emphasizes how investment managers are in the business of earning their clients’ trust, not just their financial capital. He says that forming these connections is about deeply understanding your clients’ problems, how they think about their goals and fears, and leading them past their most pressing obstacles.

“The solution is simplicity,” Sebastian says. By having one system that keeps all investor data, CAP tables, contacts, history, investments, tasks — everything — all in one place that’s easy to use, investment teams don’t just stay organized. They keep ahead of the curve, fueling forward-thinking strategies for their clients while quickly and accurately responding to their changing needs.
Then there are the efficiency gains.

“A technology-boosted fundraise workflow can significantly reduce the amount of time it takes to fundraise and close a deal,” Sebastian says. ”That’s fees in your pocket.” He explains how using a comprehensive investor portal also helps companies earn back more time to spend on value-adding activities, keeping clients happy and reinvesting.

Leverage technology to capture more investment opportunities

The experts share an optimistic outlook of what’s in store for the real estate landscape in the coming years.

Morris Groberman, Principal at Northwest Commercial Real Estate, says that given the industry’s recent downturn, there’s actually less risk in this market than ever before. He predicts that asset classes like industrial and affordable housing stand to perform particularly well in the next 6-12 months.

Sebastian adds that some retail strategies make a lot of sense right now as well, from Class A malls and strip malls to Class B and C malls being repurposed for industrial or eCommerce use.

But as a range of sectors continue to heat up, it’s essential for investment managers to know their markets and clients’ needs inside and out. Through this approach, you can align clients with the right opportunities while the iron’s still hot — and empower those investors with digital tools that raise funds and close deals fast.

“It really is about that relationship capital,” says Josh Childress, CEO and co-founder of the LandSpire Group. “How you can leverage the relationships you gain — and attain and nurture those relationships to create value and unlock opportunities.”

AppFolio Investment Management helps firms today capture those opportunities. This all in one-solution:

  • Impresses investors with a portal that keeps them updated, informed, and engaged
  • Manages the fundraising lifecycle, so you can promote new opportunities and track the interest of prospective investors
  • Organizes all of your assets in one central hub to increase efficiency and mitigate risk

Get in touch with our team to learn more about how AppFolio Investment Management Software can help you build and maintain strong, profitable client relationships — all while streamlining efficiency in your workflow.