An Asset Manager’s Take On Real Estate (And Lessons Learned Over The Last 15 Years)
In this episode, we interview Roofstock's Director of Asset Management, Caroline Parker, about her diverse career path and the what she has learned about real estate along the way.
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Transcript
Tom:
Greetings, and welcome to the remote real estate investor. I'm joined in this interview with,
Michael:
Michael Albaum.
Tom:
On this episode, we have Caroline Parker, who is the director of asset management Roofstock. And with Carolina, we're gonna be talking about asset management. What is it, we're also going to spend quite a bit of time going through Caroline's history and her all the different jobs that she's had super interesting working at student housing, working at big asset management companies working at John Burns. So let's get into it. Caroline Parker, welcome to the show. Thank you so much for joining us.
Caroline:
Nice to be here. Thanks for having me.
Tom:
So we before we get into the meat of discussion, let's go ahead and talk about your background. We've had john burns on the episode on the show before we've you know, touched on some other places in your history. So why don't you take us back from the beginning?
Caroline
Okay, great. Well, I have a bit of a unique background. I started in banking for four and a half years in Charlotte, North Carolina. I was an analyst in the investment banking division at Wachovia when it became insolvent. Then I worked through the merger with Wells Fargo, and eventually made my foray into real estate by joining Greystar Real Estate partners at their headquarters in Charleston, South Carolina, they're already became an asset manager and REO portfolio, and eventually moved into a unique role where I got to support the C suite, helping them with projects and being their ears and eyes of the organization and getting to participate in the things like investment committee and executive.
Tom:
So that was the heat of everything. Right, right in 2009, as a Wachovia got purchased, am I going back in time and thinking of that correctly?
Caroline:
Yeah. Yeah. The big downturn, so it was a crazy time to be in banking analyst, so I got to watch everything feel relatively less impacted in some of my work senior colleagues.
Tom:
Awesome. Cool. So you merge into this new position supporting the C suite?
Caroline:
Yeah. So that's where I really got to learn the housing industry. From a very high level strategic standpoint, I really understand, you know, the different facets of real estate or multifamily world from development and acquisitions to property manage. And so it was a really amazing experience. And I fell in love with, with rental and investment in the housing industry from that point on. So from there, I moved out to California for personal reasons. And I thought, well, how am I going to combine my experience from with greystar Real Estate partners and banking, I thought, Hey, I'll go into multifamily capital.
So from there, I was helping underwrite loans, multi, like from Fannie and Freddie to on balance sheet loans. And I really learned how to pick out outliers, how to ask critical questions about you know, asset performance, but what I really wanted to know and what's really driving those numbers, you know, how to, how do you really ask critical questions? And how do you really ascertain what is a good investment and what not. So from there, I knew that I needed to go back to the owner operator side.
So I decided to join the Irvine company and their apartments division, and I joined their new asset management team, they hired a whole new team of people to come in and really dive into their database and kind of change the way that division with making decisions truly using data collectively across all the cross functional silos and the division. So that was a really exciting experience where I really got my arms around operation, and how do those decisions each individual decision made on site? How does it really change the financial performance of the asset? So we started from the ground up and really analyzing data quality, putting in controls, and then from there creating new tools so that our counterparts can help make district strategic decision.
Michael:
That is so great.
Tom:
To paraphrase a little is you within that multifamily team, you basically were looking at all the data coming in from operations, analyzing that data and going back to them saying like, Hey, we're spending most of our money on XYZ, we should be doing this because it's is that it's sort of a rough synthesis of that role or filling in whatever gaps or whatever place I'm missing,
Caroline:
I would say it absolutely includes looking at where we're spending the money most frequently, but also a strategic decision that happened on site from pricing. You were helping create an in house proprietary pricing model akin to other multifamily operators are using but but based on the airline model, where you're constantly analyzing supply and demand. The unique aspect to the Irvine company is they have a highly concentrated high quality portfolio. So to use an out of the box solution would be cannibalistic. And you would incrementally like drive prices up or down depending upon you know what your competitors are in your market which are all your property.
So we were building one in house for example, or we were helping team make strategic decisions on allowing people to stay longer and their leave for asking them to move out early? Or maybe how can we make a turn more efficient so that we minimize the number of days that the property or the unit is vacant, things like that anything that can impact financial performance, which is everything we were getting under the hood on and having an opinion.
Michael:
Awesome. So as a multifamily guy myself, I'm curious to know, what were some of the biggest drivers of the financial performance that you were seeing?
Caroline:
I would say by and large, occupancy is the biggest driver of financial performance, you could raise your rent all day long. But if it takes you a home, but to to get a new tenant, then you essentially washed any returns that you would have gained from the incremental increase. So we were always scrutinizing How can we save a day here? How can we save a day there? Is it marketing a property before it's actually vacant and ready to be leased? Or is it using different channels? Is that targeting different people? You know, we're always just looking for ways to get that incremental dig occupancy, just one extra day of revenue.
Michael:
Yeah, makes total sense. As a total aside, the last company I worked for was a commercial property insurance we used to insure the Irvine company.
Caroline:
Oh, cool. And so I visited tons of their campuses up in the northern California area, and I was always blown away. It's like a resort. Like all their properties, like resort style living,
Caroline:
They are really beautiful. And Irvine company is very unique in the way that they care desperately about the aesthetic properties,
Tom:
Probably funny you in a position thinking of like, wow, how do we optimize the financials, when we're building a four seasons that you can just nod you don't have to? Okay, so you worked at the Irvine company, building those muscles and optimizing, you know, financial properties. What's next after the Irvine company?
Caroline:
Then after the Irvine company, I did join john Byrne's real estate consulting, I got to work very closely with john. And it was an amazing opportunity to get a macroeconomic perspective of the housing industry and all the different players and what keeps them up at night. So, you know, coming from being an asset manager, the Irvine company that's very in the weeds on day to day operations and execution, how that drives financial performance to going to like a very, very high level overview of, you know, demographic shifts and supply and demand. And, you know, where are people building? Where's their shortage…