5 reliable best practices for real estate acquisition

5 reliable best practices for real estate acquisition Acquisitions, that dark phase between budget and construction, somehow remain the red-haired stepson of the real estate process. While real estate owners and operators have modernized their leasing, fundraising and marketing strategies with technologies such as VTS, Hightower, Fundrise and Floored, they are just beginning to address inefficiencies in supplier management and management processes. offers.

The good news is that these efforts will be well rewarded since, according to CBRE:

"80% of savings result from stages prior to construction."

Why did real estate professionals not rush to renew their acquisitions in light of the cost savings that can be discovered? Probably because procurement practices are rarely standardized within an organization

and it is difficult to know where to start. The methods vary from one building to another and from one project manager to another. # 1: Automate your bid leveling workflow Oh, leveling offers. You really deserve your unfavorable reputation.

From eating hours combining multiple spreadsheets to triggering migraines trying to figure out which cell has the wrong formula, leveling up can be a nightmare. Project managers become data entry groups and are excluded from value-added activities. In addition, the teams that level the bids manually do not receive incentives from triple bid projects, a proven path to cost reduction.

There is light at the end of the tunnel, and it is powered by modern technology. An automated bidleveling tool can manage the administrative work of adding, organizing and, to some extent, analyzing the data entry of suppliers.

With an automated bid-matching tool, your cost-saving goals will align with the limited ability your team has to manage the process.

You will want:

The ability to create and save customized offer leveling templates.

An "intelligent" system that highlights the deviations in the bid entries. # 2: Consistent compatibility with your projects According to a study published in the Journal of Construction Engineering and Management, the triple bidding results in an 8% reduction in the "low bid price". This cost reduction increases as the number of participating bidders increases.

Competitive offers will push suppliers to be diligent with their quotes, negotiate better costs with their suppliers and continuously modernize their operations to be as efficient as possible. The objective is not to squeeze the suppliers for the lowest price, but to reinforce the diligence.

Inviting new suppliers regularly for you will also deepen your list of offers so that you will never be caught without a qualified team to take on your new project.

You will want:

Access to a complete group of suppliers with relevant experience. # 3: Ensure easy visibility of the entire process.

Real estate cycles are long, but many decisions related to projects must happen quickly. If you wait for weekly reports from your project managers or track them over the phone to get bid updates, you're wasting valuable time.

With transparency from top to bottom, a series of important objectives are achieved:

Top management has full visibility of the status of all projects at all times, from a general perspective to specific details of the offer.

Regional managers can easily identify price trends, workflow cycles and supplier talent gaps.

Property managers can communicate efficiently with suppliers and manage relationships.

The accounting team can quickly track and report capital expenditures and verify that projects were competitively tendered in accordance with company policies.

The ideal scenario allows users to easily delve from the macro view of the projects to the specific documentation of the offer, the conversation of the team, the internal reviews of the suppliers and more.

You will want:

A tool that provides quick access to data points in your portfolio, including offers received, budget delta offer, key delivery dates and information on the workload of the project manager. # 4: Centralize your documents and messages.

The cornerstone for a solid acquisition process is an easily accessible central location for spreading documents and tracking relevant conversations. This is why:

The use of a repository helps to protect against the multiple versions of the same document that are generated involuntarily.

A tool that integrates communication functions by email as a registration system that all the team can extract to obtain important information.

If a project manager leaves, the supplier's contact information, price data and project history that he accumulated will not go with him.

A word for the wise: do not centralize the process on the laptop of a project manager who could get lost at JFK airport. (Yes, that happened ... No, we're not naming names.) Look for a cloud-based solution that provides redundant data backups and access from any device. # 5: Take advantage of historical data to inform current decisions If you can not measure it, you can not manage it. We all know that rule. Here is another that everyone in real estate knows intrinsically: if you can not find it, you can not use it.

Spreadsheets are robust at the individual file level and cumbersome at the macro level. To discover a meaningful acquisition intelligence, many data points must be compiled and aggregated. Spreadsheets eliminate the data of their power by isolating them in digital silos.

You will want:

A dashboard that shows high level trends.

The ability to categorize, sort and filter groups of data points.

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