Running a Remote Real Estate Business & Traveling During a Pandemic


Have you ever wondered what it’s like to own and run a business that provides you with the opportunity to live anywhere you choose? Well, I can tell you from personal experience that it’s the optimal way to enjoy managing your business while having the ability to live in a place of your choosing.


While the title of this article includes the wording, “traveling during a pandemic,” I have been running my company remotely even before the pandemic came on the scene. I did this for two reasons: first, while studying for my master’s degree at MIT School of Business, I was taught how to run a lean operation, and running a remote business is one way of achieving that goal.


The second reason is that my business model includes purchasing value-add multifamily properties in states that include Texas, Georgia, and Florida. These are landlord-friendly states with strong real estate markets, but I don’t necessarily want to live in those states. Prior to a recent relocation to Rhode Island, I was living in southern California, an area that I truly enjoyed. In both cases, I was able to run my business successfully even though I’m living thousands of miles from my properties.


Now that my company is growing, I am actually looking to open a physical office in the Providence/Boston area, and will start shifting my company from remote to an on-site company once it’s safe to go back to the office.


Examples of Successful Remote-Run Companies


I’m fortunate to have a successful operation that I run remotely, but there are many examples of companies that are thriving even though they’re run remotely. Automatic, which is the parent company of WordPress, operates the world’s most popular blog and website creation tool. The company was created using a totally virtual workplace, and many others are now doing the same.


The key to their success is using communication tools like video conferencing, instant chat, and email. They also use various social media channels to keep employees connected with the public and with each other. One of the company’s unique features is having shared virtual activities for their employees, including chair yoga, book clubs, open mic night, and others.


Other companies that have achieved huge success working remotely include product design and prototyping app developer InVision. They invest heavily in employee benefits, including health insurance, gym memberships, and a substantial travel allowance. Buffer, which develops tools that make social media management much easier, was fully remote from its inception. Part of their success is based on giving employees complete autonomy on their own projects and hours, which helps them reach their full potential.


These are just a few examples, but there are many other companies successfully operating remotely. With the communication technology that’s available today, it’s a lot easier to do.


Understanding the Purchasing Process


When looking to purchase a multifamily property, there are some key steps that you have to take before you have an opportunity to actually acquire the asset. The pandemic has changed some of the ways we approach these steps, but for the most part they’re same as they were pre-pandemic. We submit an LOI - a “letter of intent,” and if the seller is interested, he or she will ask several potential buyers to resubmit a final LOI. We also have a conference with the seller to discuss or experience and our track record. It’s all part of the acquisition process, and up to this point, everything can be done remotely. However, prior to submitting a “best and final offer,” I always travel to walk the property.


Walking the Property


There is simply no substitute for viewing the property firsthand, regardless of the risks associated with traveling during a pandemic. Part of the reason is that as a sponsor, investors’ money is involved, and I invest my own money in every deal as well. Walking the property with my property manager, the current property manager, the maintenance team, and the broker provide me with the information I need in order to determine whether to move forward with the deal or not.


I’m looking for some key specifics. First, I’m trying to assess the current tenant mix, because this will determine what type of renovations and amenities will appeal to them. I also want to see if the property was properly maintained, and how much it will cost to increase the curb appeal of the asset. This amount can also impact our offer.


Most importantly, as our business model is to purchase properties in good condition and then do value-add improvements in order to boost rents, and profits, I’m looking at potential additions. The goal is to add key amenities that generate increased rents, fees, or both, and by walking the property and gathering input from my team I have a good idea of what can be done.


I also evaluate potential expenses due to deferred maintenance. These are one-time expenses that can be costly, including HVAC units, siding, a new roof and others. Depending on what we discover, the amount can impact our best and final offer. This evaluation is done the same way it was performed before the pandemic.


Prior to COVID, I would fly to each property every 1 to 2 months. Now, I drive every 2 to 3 months to visit my properties, unless there’s an urgent need to visit. Until the pandemic is under control, I’ll continue to drive to the properties instead of flying.


Summary


When I started my company, I knew I wanted to operate it remotely, because I wanted to be able to live wherever I wanted. In addition, running a remote company allows me to run a lean operation. Prior to relocating to Rhode Island, I was living in southern California and in both instances, I was able to achieve success even though I’m living thousands of miles from my properties.


When purchasing multifamily properties there are several steps that you have to go through before actually acquiring the asset. We start by submitting an LOI (letter of intent), and if the seller is interested in pursuing the offer, we have a conference to discuss our track record and experience. If the seller likes what she or he hears, we’re asked to submit a “best and final offer.” Prior to doing that, I walk the property to help assess the best possible price we’re willing to pay. This is done despite any risks due to the pandemic.


Several key areas I look for when visiting the property include assessing the tenant mix, determining what amenities to add to increase the rent, add fees or both, what potential renovations can be done, and what deferred maintenance we can expect to encounter and how much it might cost. All of these factors play into what we submit as our best and final offer.


While I used to travel to my properties once every 1 to 2 months, I now only travel once per quarter, unless I need to visit sooner. I now drive to the properties instead of flying.


Want to Invest with Ellie Perlman?

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About the Author

Ellie is the founder of Blue Lake Capital, a commercial real estate investment firm specialized in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.

A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.


Ellie is the host of REady2Scale , a podcast that highlights honest, insightful, and thought-provoking discussions on the multiple approaches for successful real estate investing.


She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.


Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.


You can read more about Blue Lake Capital at www.bluelake-capital.com and learn more about Ellie at www.ellieperlman.com.

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