NATURE OF ASSIGNMENT:
Primary: Lender Services / Cash Flow Management
Primary Industry: Real Estate & Construction
Company: Residential Property with Six Locations
Situation: The properties, which consisted of six multi-family communities totaling over 2,100 units, were in decline due to a severe lack of regular maintenance and failure to make capital improvements. The owners of the communities diverted excessive amounts of cash from the company for personal use. Lack of security inspired increased crime and higher vacancy rates.
Focus Scope: At the recommendation of the secured lender, Focus was retained by the owner and was tasked to review and stabilize cash flows as well as to establish process and procedures to increase occupancy rates.
Tasks Performed:
- Reviewed all properties on both an individual and consolidated basis regarding revenue streams, expenses, AP aging and assessment of past due creditors and review of debt burden for each level of debt
- Cash flow budgets were created for 13 weeks, 12 months and 18 months
- Outlined a plan stabilize properties and bring them back into compliance with lenders
- Established improved security, maintenance schedules, policies and procedures and initiatives designed to improve community standards of living
- Assessed the efficiency and cost effectiveness of property managers for each location and made recommendations to change out two underperforming managers
- Regular property maintenance schedules were developed as well those for longer term capital expenditure replacement
Results: In light of deteriorating market conditions, cash budget goals were achieved, proper financial reporting was implemented and occupancy was stabilized.