Asset Management for an Underperforming Asset

Case Topic: Stabilizing a multifamily asset that was underperforming due to poor management, high vacancy, and facing loan compliance risks.

Client Overview

My client was a seasoned real estate investor and developer with a strong business background. He had successfully managed and built multiple projects by assembling capable third-party teams, but in this case, the system had failed him. The developer originally responsible for managing his property was underperforming, allowing vacancy, delinquency, and deferred maintenance to grow out of control.

When the client decided to take the property back, it was in disarray. More than 30% of the building sat vacant, tenants were behind on rent, and the asset was out of compliance with its loan terms. Making matters worse, the asset was struggling to recover from one of the nation's longest eviction moratoriums. The client had changed out the property management team, but rent collection and leasing continued to struggle.

The Issue

How do you take an unstable, mismanaged asset and bring it back into compliance before the lender steps in?

A strong asset manager must have the leadership capacity to draw effectiveness out of the property management team. The new property management team implemented rent collection processes, but the tenants were not receptive. The lack of structure the property manager and I inherited had left us with low cash flow, and left the property in violation of its debt service coverage ratio, the key metric that measures whether the property's income can cover its loan payments. The property was technically in default when the coverage ratio fell below the contractual limit, putting the property at risk of foreclosure.

The lender was demanding monthly rent rolls and quarterly financials, while the insurance carrier began warning about coverage concerns tied to deferred maintenance. In short, the client was under pressure from every direction with too little time to manage the details personally and too much at stake to let the property continue sliding.

The Impact

If left unresolved, the bank could have accelerated the loan, demanding full repayment. The property might have been foreclosed on, and the investor's broader portfolio, built over decades, could have been exposed to unnecessary risk.

The client's attention was divided between multiple businesses and properties. Without someone capable and qualified on the ground to enforce accountability and structure, even well-meaning property managers and contractors struggled to stay aligned. What he needed wasn't just another asset manager, but an experienced strategist and leader who could bridge the gap between investor goals and on-the-ground execution.

My Approach

My first step was to immerse myself in the property and its people. The client had long-standing relationships with several team members, and his loyalty was both a strength and a weakness. Loyalty built trust, but sometimes at the expense of performance. I made it my goal to earn his confidence by staying consistent with communication: property inspections, leasing check ins, monthly financial reviews, and frequent strategy calls to align priorities.

Once I had clarity, I reset the asset management process from the ground up. I formally inserted myself between the owner and the property manager, ensuring everyone understood that I had the authority to make most financial decisions. This single adjustment brought quick order to a previously chaotic structure.

I then identified bottlenecks in the leasing and maintenance process. The owner's trusted contractor was spread too thin across multiple properties, causing turnover delays. I reorganized his workload, assigning him a smaller subset of units while bringing in an additional contractor to accelerate progress. My goal was to partner with the manager and leasing team to remove all obstacles to momentum by improving communication and holding vendors accountable to measurable outcomes.

Financial analysis played a key role throughout the process. Using my asset management playbook and Excel modeling, I evaluated many investment decisions by balancing cost, timing, and expected return. I also formalized a “delegation of authority” framework with the client, ensuring every dollar spent was transparent and strategically justified.

The Results

While I'd like to say the asset is now fully stabilized and performing at institutional levels, there is still more work to do. Real estate is a living business. We are still working through large balances and lingering vacancies in a pro-tenant market, but the property is now firmly on track.

Vacancy has dropped significantly and rent collection is now systematic. Most importantly, the property team has stabilized, creating the foundation for lasting performance. We also tightened the tenant application criteria, prioritizing stronger credit profiles and reducing future delinquency risk.

The client, meanwhile, gained the one thing every investor values most: peace of mind. He now knows his asset is led by a team that not only understands the numbers but also gets the people and pressures behind them. And by giving him that confidence, We've given him the freedom to focus on his broader portfolio without worrying that one underperforming property could unravel the rest.

Through this process, I was reminded that great asset management isn't just about spreadsheets and strategy. It's about empathy, leadership, and clarity. Pulling the property from the brink also helped the client uncover something deeper: a true business plan for his real estate. Not just how much it should make, but how it will make it. That clarity now guides every decision we make together moving forward.