Do you feel confident that your new apartment complex is turning a profit? I mean, do you feel really confident?
You can’t tell when you start moving into the black if you’re still piling receipts and bills into a folder and stuffing them into a filing cabinet. Google docs and Excel spreadsheets can only take you so far. And you definitely shouldn’t wait until you’re managing three hundred units before you start digitizing your finances.
If you’re thinking about scaling up your real estate business this year, now is the time to do it! Don’t drag your feet waiting until you’re losing money before you convert to the digital world.
I talked with Heath Silverman, the CEO of Stessa a real estate app, about the merging of his two passions: real estate and tech. Heath has personally bought and sold multi-family units and single family residences, while also working as a software developer in Silicon Valley. With a foot in both worlds, he knows what kind of information real estate investors need to make their properties profitable.
With over twenty years of personal experience in the real estate industry, Heath knew he could find a better way to track his expenses, and he made it his mission to build an app that was accessible to the beginning investor.
I’ve always said that your decisions are only as good as the information you’re provided. Because your financial information can change as quickly as an expensive HVAC repair, having real time information for all of your properties can literally change your overall view of your portfolio.
Heath shares about a multi-family unit in Oakland that, with a few tweaks, he was able to literally double the value of the building! The Stessa app let him see where the money was going, so he could swap out the property manager, the landscaper, the gardner, and then address a water leak, and suddenly everything on the property was twice as profitable.
After speaking with a couple of hundred investors, Heath realized that most investors are updating their Excel spreadsheets weekly, and they don’t even know if they’re making a profit until they sit down and reconcile everything with their accountant at the end of the year.
By taking into account a property’s assessment, public records data, and photos, and combining it with your AppFolio account or even your bank account, you can put all your information out in front of you in a big, beautiful KPI dashboard. You can make adjustments daily or weekly when a property’s value starts sliding, without waiting until you’ve taken a bath in lost revenue.
Heath built his app for the accidental landlords, the part-time investors, and small multi-family investors, so that they could understand their portfolios. If this is you, don’t wait to move into the new decade!
Never Lose a Lease Again
With only a property or two, keeping leases or titles or seller’s disclosures isn’t such a big deal. But as you begin to grow, keeping track of all of the legal papers connected to your properties can start to become a big pile of craziness. Eventually you’re going to reach a ceiling where you can’t grow anymore because you’re using these archaic methods of tracking your money.
One of the really cool parts about using real estate apps and cloud-based storage systems is that you can never lose the information, or accidentally misfile it. And if you switch over to digital now, before you start getting really big, it’ll be a lot easier to grow and scale when you finally decide to level up your REI business.
Heath shared a great story that really illustrates my point that keeping track of your papers can make a huge difference in your bottom line.
He had a chance to buy a foreclosed property in Oakland that he’d looked at before the crash, and because he’d kept all of the information about the property, he knew when he was looking at a great deal. He had the hard numbers to back up his hunch that this property would be a great addition to his portfolio. He even had copies of the original tenant leases, so he knew the potential cash flow.
Stop operating with fuzzy ideas about your real estate investments. The Stessa app is ideal for small mom and pop investors who need the tools that deliver hard data to them.
Finding the Perfect REI Partners
I’ve founded three big partnerships over the course of my real estate investing journey, and I really believe that finding the right partner is one of the most important decisions you’ll make. That right partner will complement your own strengths and weaknesses, and build on your skillset.
Whether you partner with a friend, investor, or fellow entrepreneur, ask yourself honestly how you’d like to divvy up the responsibilities. Maybe one of you is a back-of-the-house kind of guy who likes bookkeeping or running the operational systems. Maybe one of you is all about the front end and chasing down investors, working on strategy and vision, or doing the digital marketing.
A partnership can really put your REI business in an accelerated growth stage when two people put their brains together and just start pulling in leads and deals all over the place.
Heath used his business partnership to build an app that marries his love of tech and real estate, and he made the Stessa app free so that it could be accessible to the beginning investor.
Don’t wait another year to find out that you’ve lost money. Get all of your information in one place in the digital world, and scale up your REI with technology.