Multifamily Operational Efficiencies

This is a great question! Frankly- this is a sales tactic. Areas you may see some true efficiency is when utilizing scale savings with contracts servicing multiple properties, grouped insurance (but less relevant as this category experiences unprecedented growth in premiums), and strategic Capex. Capex is capital efficient, so you can improve consistent operational income at properties by reducing recurring expenses (old HVAC system that requires a lot of routine repairs, etc). Solar to reduce utilities? But then again this expense is passed on to tenants so are you really experiencing savings as an owner?

This statement can be true, and a source of derived value, but a blanket assumption that there are operational efficiencies to be found at every property is false, and a bias that will impact returns.

I like to consider who the previous owner is, and why they’re selling and how they’ve managed the asset. If it’s an institutional player you better bet they juiced out every inch of NOI; if it’s a mom and pop that’s owned something for 20 years? Theres likely to be some savings there, but it’s important to identify that and not pay for the proforma value of the savings, but rather pay for the historical operations. This is a change from the last 10-13 years IMO as everyone was competing to buy every single and willing to pay for that proforma value assuming that growth would be a constant.