The real estate investment market is a highly competitive space. Deal teams are always looking for better ways to find and close good opportunities. In a market where demand exceeds supply, losing a good deal can be painful. So how can your team avoid that? Start by understanding why deals are lost and then focus on improving your process where it matters. Here are a few factors to consider.
If you are able to identify good opportunities but are often outbid, this merits investigation. What did the other team know that you didn’t? Why were they able to bid with conviction at a higher price? What data did they leverage to forecast higher returns that would justify a higher bid?
First look at your data—Were you able to reference a robust set of proprietary and market data to back up your underwriting assumptions? Did you have the data, but not in a format that was easy to find and use? Does the information that might have made a difference exist somewhere else in the organization?
Using a data-driven deal management platform can help you keep the information you need to underwrite quickly and confidently at your fingertips. Eliminating silos and gathering together all of the deal and market information that exists across your organization can help you better leverage your knowledge to gain conviction that others may lack when bidding for investments.
Many factors can slow your team down and get in the way of success. Ask yourself: Are you seeing the right opportunities but not able to screen deals fast enough? Are deals getting stuck in a particular stage in your process? Is your screening process inconsistent between team members? Are you spending too much time on the wrong deals?
If your team can’t screen deals fast enough, it’s time to re-evaluate your approach. Make sure every team member is following a consistent set of steps. Tracking your process from end-to-end will also allow you to quickly assess what’s working and where you can make improvements.
Once you’ve started tracking your process, you can identify bottlenecks that are slowing it down. One potential issue to look for is tasks that are simple but time-consuming. Consider implementing technology to automate the easy tasks that take your people hours or days to complete.
Dealmakers understand the value of strong relationships with partners in the market. If your team is consistently losing deals because one or more partners or brokers are favoring other investors you have two options: invest in stronger relationships with existing partners or expand your sourcing pool.
To identify the problem areas, make sure you are tracking the balance of trade from brokers and partners in the market. This will shine a light on trends between lost and done deals and the related brokers and partners. Identify the brokers who bring in the highest volume of good dealflow and invest time into nurturing those relationships with key stakeholders on your team.
If you are finding that the quality and/or quantity of deal flow from your main relationships is waning, increasing your inbound sources is the best way to ensure you maintain a high flow of quality opportunities. In order to expand on your inbound deal volume, you need to be able to quickly and efficiently screen all new opportunities without dramatically increasing your headcount.
Introducing automation into the process of collecting initial materials, pulling out key data, and screening new deals will enable even small teams to dramatically increase the number of relationships they can manage at one time. Focus on finding a solution that enables you to quickly aggregate all new opportunities in one place, extract meaningful data about each deal, and automatically filter between the deals worth moving forward and those to pass on. By reducing the manual effort required to simply collect broker info and conduct an initial screening, you can dramatically increase the number of partners to source good deals.
Tap into valuable insight
In a competitive market, being able to quickly assess areas for improvement and implement changes can make a big impact on your portfolio’s performance. The common thread between each of these challenges comes down to a lack of data and automation to streamline efforts and make the most informed decisions quickly. This is where Origin gives dealmakers a massive advantage. To see how Origin can help you stop missing out on the good deals, schedule a demo now.