As a developer, do you know how your properties are doing? Literally, right now?
How long would it take you to compile the occupancy level of all your apartments? What about re-certifications that are overdue or upcoming? How about profitability ratios and delinquency levels?
A minority of industry leaders knows the current status of their properties and can retrieve that information in minutes. However, the majority of owners are only notified of problems well after their onset. This creates an environment which is endlessly reactive, rather than proactive.
The problem is not with any one particular business or group of businesses; it results from the structure of the industry itself. Partnerships of typical low-income housing projects consist of two entities, the MGP/GP and the LP. The developer first conceives of the community and usually becomes the Managing General Partner or the General Partner, and selects the Limited Partner, who provides the required funding.
The Developer, or GP, is the most involved party while the property is being developed. But once the community is in service, the developer’s focus shifts to the next development, which is more in need of the developer’s attention. There remains an ongoing problem: the developer is still responsible for their historical properties. However, the developer has minimal time to dedicate to ongoing supervision—and, in truth, their core value lies in creating new developments, rather than routine maintenance of existing properties.
The challenge of every developer is balancing their responsibilities to manage existing properties while continuing to develop. The developer’s success lies in their ability to accurately and efficiently gather, process, analyze, and distribute information. The developer must determine which data points most accurately relay the underlying reality of the status of their properties. He or she must decide how to transform that information into value-adding knowledge, and how to distribute this value those who can best use it to drive profitability.
The average human mind can comprehend no more than seven data points at once. This was discovered when the original Bell Companies were determining how many digits to use within a phone number. They wanted to allow for as many possible combinations of numbers while remaining within the practical limits of our memory. Therefore, to be most effective, the developer must determine what information can be collected that can be condensed into seven or less resultant data points that present the true standing of all their communities—while maintaining the ability to dive deeper into the data when a problem arises, of course.
The specific data points chosen will vary from developer to developer, based on the values of the organization and the types of communities. Every development organization is unique, even more so than organizations in other industries. With the hundreds of events that occurring within communities every day, it can be extremely difficult to sort through the clutter to find the information that really matters. The same is true with the human body itself: although there are thousands of measurable facts about bodily organs and systems, the general well being of a human can be accurately measured by watching a few simple key indicators such as temperature, blood pressure, cholesterol levels, and weight. Properties might consider income, occupancy, re-certification levels, and delinquencies to be of similar value.
Once a developer determines the information that they to know, the data must be efficiently obtained and managed. The property managers are the only participants that have first-hand knowledge of the current status of a property, and therefore they are the most valuable asset in data gathering exercise. To achieve the long-term goal of maintaining a reliable, ongoing collection of data, the demands on the managers must be limited and the process must be fast. Owners must request only the information that is actually relevant to their decisions, and make this information very simple to report.
Starta Development, Inc. assists owners in this with an Internet-based system that effectively engages the manager in filling out a small series of owner-configurable, easy-to-use forms. The service delivers these forms to the site manager on daily, weekly, monthly, or even annual intervals. Starta recommends that each form contain 10 fields or less to demand no more than a few minutes at the end of each day. The Starta Enterprise Service automatically sends Will-Call email messages as a reminder to the site manager with a one-click link to the input form. The information, which can be reported daily, weekly, monthly or annually, may be approved by the manager’s corporate office before being accessible to outside parties. The service also allows owners to design custom dashboards and reports to transform the raw data into valuable knowledge that gives a current status of the property, as well as historical snapshots and trends.
In a future release, the Starta Enterprise System will also include a rules-based engine that allows owners to define specific thresholds of comfort for each community. The system will then alert owners and corporate property managers when these thresholds are exceeded. For example, an owner may want to be alerted when occupancy drops below 92%, or when expenses exceed 110% of the average. This automation allows developers to more effectively maintain their current commitments while continuing to focus their efforts where they are most valuable to the community and to their own business: developing.
The most successful developers will implement a system that limits distractions while revealing the key, actionable data that can be used in the decision-making process. Every decision an owner makes is entirely dependent their present knowledge and awareness, and thus must be confident they have the most current and accurate information about all their communities to make the proper decisions.
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