From July 2018 to September 2018 I was a summer analyst for Hilltop Residential. Hilltop Residential is a multifamily real estate investment company that focuses on acquiring and renovating underperforming, undervalued multi-family properties located in the southern United States. Since 2001, Hilltop’s team has collectively completed over $4 Billion in multi-family transactions. They have purchased over 100 properties and 25,000 apartment units in Texas and the southern United States.

What Roles I Played

I focused on the acquisition and asset management of multifamily assets in Houston, Dallas, Austin, and San Antonio. My experience with Hilltop built my foundation of understanding the life of a real estate deal, underwriting a deal, how to capture value through superb asset management, building a property management business, and understanding the business structure of a real estate investment firm. One of the most important aspects of my internship with Hilltop was understanding the components of the business and the different profit centers Hilltop has. Thus, later on in this article, I discuss what I learned from the business side of a real estate investment company and things you could apply when starting your own real estate business.

Acquisitions

• Participated in weekly acquisition meeting to discuss deals in the pipeline
• Worked with the acquisition team on underwriting/organizing potential deal’s rent roll and trailing-12
• Underwrote potential investments in Excel and evaluated if the property could meet Hilltop’s IRR requirement
• Went on due diligent walks of properties Hilltop had under contract
• Reviewed offering memorandums and took notes for the acquisition team
• Conducted county tax research on prospective deals
• Reviewed Hilltop’s acquisition model and waterfall structure

Things I Learned- Acquisitions 

• Understood Hilltop’s desired underwiring inputs for insurance, payroll, RUBS, etc
• Leaned how Hilltop underwrote deals and what were their desired return metrics
• Understanding the life of a deal and what are the different roles in the deal (Investment sales broker, mortgage broker, equity partners, etc)
• How the bidding process works to get a deal under contract
• Hilltop’s asset and location criteria to consider investing in a deal
• Learned Hilltop’s acquisition model

Asset Management 

• Orchestrated weekly asset management calls where we strived to maximize NOI and push occupancy levels to 94%
• Reported monthly portfolio performance and fund strategy to Hilltop’s investors
• Created a rent comp model to track Hilltop’s competing properties rent change and updated them weekly
• Worked on the implementation of Hilltop’s in-house property management company
• Contacted property managers weekly to discuss property leasing metrics
• Dealt with tenant complaints/issues
• Worked on value-add capital projects
• Planned site inspections and walked the properties

Things I Learned- Asset Management

• The importance of asset management when it comes to capturing as much value for your investors as possible
• The components of asset managing properties and property managers
• What are the important leasing metrics to evaluate how the property is truly performing
• Taking a one time expense on something is much better than having a monthly recurring cost
• What are the best 3rd party property management companies in Texas

Things I Learned From Hilltop’s Business

• How to develop an in-house property management company
• Understanding the external connections you need to start a successful real estate investment company
• When to decide to change from 3rd party property management company to an in-house property management company
• Understanding Hilltop’s fund structure and how to find equity
• Knowing Hilltop’s current and possible future profit centers
• Bringing in employees you have some connection to can be valuable in the long term
• The natural process of hiring specific roles to your team (Someone that specializes in acquisitions, asset management, accounting, etc)