What Is Asset Management?

Best In Class

We once found a $10,000 charge for a plumbing expense that was not for our property (even our manager missed it). Had we not audited our financials on a monthly basis, we would have been responsible for that expense.

-From the book Best in Class
by Kyle Mitchell and Gary Lipsky

A successful commercial real estate syndication firm will build a team to handle the three main segments of the business:

The book Best In Class focuses on asset management.

About Best In Class

Mitchell and Lipsky are experienced and effective asset managers. Full disclosure: I have partnered with Kyle and Gary on multifamily real estate in Arizona. Even with their level of expertise, they went out and gathered data and experiences from other successful real estate operators (150+) while writing this book.

The average person learns from their own experience, while the wise person also learns from the experience of others.

Asset Management and Rocket Science

We believe that good asset management is not rocket science. You have to be consistent. You have to pay attention to the details. You have to implement systems and processes to identify bottlenecks and not be afraid to ask a lot of questions. Mistakes happen, but they can be fixed if you pay attention.

Reading this book and observing these authors in person has taught me that asset management is largely about proactive self-discipline. Yes, it’s important to be smart. Beyond intelligence, the effective asset manager identifies and solves issues early, before they fester into something big and expensive.

For example, at one property where I have an ownership interest, we observed rusted metal stairs. The rust was not yet bad enough to cause injury to the residents. But our team moved forward with repairs anyway (proactively) because it’s the right thing to do. Result: Residents have a safer and nicer place to live. Everybody wins.

Working With Property Management

The Best In Class chapter dealing with property management is titled “Managing the Manager” for good reason. The asset manager sets the big picture direction for the property. For implementation, the asset manager will typically hire a property management firm.

Property management is a highly specialized profession. For larger communities of apartments (50 units, 100 units, or larger) the lender will require the syndicator to hire a professional property management firm as a pre-condition for the mortgage. Owners who want to self-manage must establish a true property management firm, complete with systems and practices on the level with the best professional firms.

The property management team manages the property day to day, screening new tenants, collecting rent, handling repair requests, fielding emergency calls, and other daily tasks. The property manager and asset manager will typically meet once per week to review the business plan and to make decisions on any issues that have arisen since the previous meeting.

The book makes an important point about decision making. Property managers have professional expertise, but final decisions rest with the asset manager. The asset manager (as an extension of the general partnership team) represents the best interest of the investors.

A good asset manager will visit the property and check in on the on-site management, sometimes unannounced. Pro tip from the book: Any time a unit is vacant, go on-site and walk it. That’s a way to get a feel for the property without disturbing residents.

In the language of the book Traction, one might think of the asset manager as the visionary and the property manager as the integrator. Both roles are vital to the successful execution of the business plan.

Weekly Calls + Reports

The devil is in the details: We have seen far too many operators not pay attention to the details, and their investors have suffered.

The book contains a list of reports that the asset manager should expect to receive from the property management firm: Weekly, monthly, quarterly, annually. Some of the reports will need to be shared with the mortgage company as specified in the loan documents.


Best In Class is a sold book for anyone who wants an inside look at asset management. Other areas covered by the book, and not mentioned above, include key performance indicators (KPIs), Setting expectations with contractors and vendors, marketing (attracting new tenants), and investor relations. Well worth the time required to read it.

Every asset management meeting is a learning experience for me. I’m grateful to my fellow syndicators, partners, investors, and related professionals. Grateful for the chance to learn from their experiences as well as my own.

Throughout the ownership cycle, the asset manager will compare the performance of the property against the original underwriting. The article What is Underwriting? provides useful info on the subject.