RealPage’s Property Management Software Positions Ferndale Realty Group for Growth
Still processing on-site transactions at the home office, Ferndale was concerned that they were close to reaching the limit of properties they could handle without financial performance at individual assets suffering. RealPage software’s ease of use convinced them to push transactions out to the properties—and set their sights on expansion.
Based in Illinois and managing properties across multiple states, Ferndale Realty Group has become known for its superior operational skills and resident-pleasing on-site operations. Typically this would be the recipe for steady growth. But as of 2016, Ferndale found itself questioning its ability to continue to scale.
“We were concerned we wouldn’t be able to continue producing the same financial results as we added additional properties unless we improved some of our internal processes,” says Steve Schwinger, the company’s controller. That’s because Ferndale was still processing many site-level transactions such as rent payments, move-ins and move-outs at the home office. And most of it happened in the first few days of the month, overwhelming the accounting staff. This practice went back to the company’s early years, when central processing gave Ferndale’s founder a level of control he felt he couldn’t get if transactions were being processed at the properties themselves.
“Our founder is a careful businessman who wants things done right, and he simply felt better having more transactions handled by our accountants centrally rather than by individual site personnel,” explains Schwinger. “The system we were using had limitations relating to its ability to define user rights and roles, approvals and alerts, and overall controls to ensure accurate processing.
“He also didn’t want site staff’s time taken away from customer service, which we’re big on. But eventually we realized we wouldn’t be able to scale without hiring more and more expensive accountants to help handle the processing load centrally during the first few days of each month.”
The situation was complicated by the fact that the software Ferndale was using at the time was not particularly easy to use, making the owner doubtful that it could be used effectively by on-site personnel for transactions without consuming too much of their time and inducing errors.
And there was a price to pay for centralized transactions beyond the barrier to growth. The cumbersome flow of information between sites and home office slowed down transaction processing. Further, accountants at the home office didn’t understand all the processes associated with things like move-ins and move-outs—after all, they were accountants, not leasing professionals—so they didn’t always have the proper procedures in place.
There were even direct financial costs, says Schwinger: “By processing the receipts in a more timely manner, charging late fees accurately and processing renewals more effectively, we’d be able to enhance our ability to generate additional income.”
Looking for an answer
Fortunately, by this time, several professionals had joined Ferndale at the executive level who had experience with RealPage’s software. They had seen how the software eliminated barriers to handling transactions at the property level, with on-site staff able to execute at least as efficiently as centralized corporate staff.
Schwinger credits the step-by-step, foolproof procedures built into RealPage software for eliminating the type of errors and oversights that Ferndale’s founder wanted to prevent. “You just don’t have to be an accountant to use this software effectively and accurately,” says Schwinger.
There was another big benefit Ferndale’s executives were looking for: integration. By moving to RealPage, Ferndale would have a fully-integrated, end-to-end property management system with all parts working seamlessly together. “Our system comprised disparate products with very little integration and required a lot of manual processes,” says Schwinger. “This limited our ability to implement best practices to maximize revenue and manage expenses.”
By the fall of 2016, Ferndale management was sufficiently persuaded that certain processes could move to the sites that they made the decision to jettison their existing software and sign a contract with RealPage. The choice was made easier by the company’s conviction that without the change its potential to grow would be hampered. “We really didn’t have much of a choice if we were to scale the way we wanted to,” Schwinger says.
“The RealPage team was incredible during the sales process,” recalls Schwinger. “They listened to our challenges, then showed us their solutions and how easy they are to use, and how they enable best practices. They also discussed the resources they offer as a software solutions partner, including products we could grow into as well as R&D and product support.”
The decision having been made, the rollout of the core RealPage suite was rapid and aggressive, helped along by three key executives with backgrounds in using RealPage software.
“It was extremely helpful to have individual product consultants for each solution implementation,” Schwinger remembers. “Also, the RealPage Engagement Manager helped oversee the entire conversion and ensured that the conversion stayed on schedule.”
A happy surprise
One of management’s biggest concerns about moving transactions to the site had been an increased time burden placed on on-site staff. But they were in for a nice surprise.
“It turns out that it had been taking just as much time for the site staff to go back and forth with the home office to enable centralized transactions as it now takes them to just do it themselves!” explains Schwinger. “So even though a big burden is now off the home office, there’s been no net addition to the site staff’s workload. It’s a total win.”
And there was another big win: more timely data, resulting in much more up-to-date accuracy in ledgers, balances and metrics such as occupancy rates. Today, site personnel and corporate professionals have access to more real-time information than was previously available because the delays inherent in centralized transaction processing have vanished. The document management system helps keep everything in its proper place and easy to access.
“Corporate is now able to access more accurate and timely information, so they can handle accounts payable, cash management and financial reporting more efficiently,” says Schwinger. “We use dashboards in both the front and back-end systems to access data and process information easily.”
He adds: “Easy access to operational and financial reports lets us easily measure results across the portfolio, and managing accounting processes in a shared environment has made ownership and portfolio reporting much more simple and efficient.”
At the sites, data entry oversights are kept to a minimum by built-in enforcement of required tasks and approvals before moving on to next steps, eliminating earlier management concerns.
Getting it together
The tight integration of RealPage solutions is paying off as well. Schwinger provides examples: “The Ops Technology platform and Compliance Depot system is fully integrated with our accounting system and automates the accounts payable process,” he says. “And RealPage’s resident screening and renters insurance is now fully integrated with the core property management system.”
Ferndale plans to also tie in resident portals and other amenities to automate payments and service requests and improve resident retention.
“With the new software in place, we’re more confident in our ability to continue to execute on our ongoing acquisition plans, with confidence that we can grow while maintaining our high property management standards,” concludes Schwinger. “This is a big and very exciting chapter in our history, and it really comes down to the availability of good software.”
The Ferndale Realty Group is a highly-regarded real estate investment company focused on the acquisition and ongoing operations (through a licensed real estate company) of multifamily properties across the country. For more than a decade, the company and its affiliated companies have established a strong track record of maintaining high occupancy levels and efficiently operating and/or asset managing apartment communities in Illinois, Indiana, Ohio, Wisconsin, Colorado and South Carolina.