August 25, 2015 10:41AM

Is It Time to Invest in a Specialized Software Solution? Three Questions for Real Estate Investment Managers

Excel or generic General Ledger software such as QuickBooks worked great for your real estate investment management firm back when you first started. It allowed you to easily keep track of your first few assets, calculate your capital gains and losses, and report to your investors.

But with the rise of specialized technology solutions like Yardi and MRI, you may be thinking that its time for a more comprehensive software solution system customized for your—and your investors’—needs. Real estate software solutions like Yardi and MRI, or even more sophisticated investment software systems like InvesTran, are undoubtedly at the cutting edge of the industry, and often provide those who effectively wield them with the type of speed and accuracy that turns them into investment powerhouses.

But since these software systems are costly—both in terms of financial capital and in the human capital that is required to customize, implement, and learn to use it—many companies hold off on investing in one for as long as possible.

In order to find out if an investment in a software solution is right for your company, ask yourself these three questions:

1) Do we want to grow our company?

Excel or QuickBooks likely did a perfectly sufficient job managing your first one or two funds under management. But, if you have dreams of growing your portfolio further, or, if you’re trying to gain the confidence of an institutional investor, out-of-the-box ledger software will simply not cut it.

Once you expand your portfolio beyond two funds, the complexity and sheer number of your financial reporting responsibilities officially surpass Excel’s capabilities. Meeting these new and volatile demands requires a database-driven system that is as dynamic and responsive as your financial reporting demands.

Customized technology solutions are scalable as your company continues its upward trajectory: they allow you to increase your assets under management without increasing your headcount—a major benefit to any Investment Management firm.

2) Are we spending more time creating a reforecast/valuation than we are evaluating it?

The financial modeling that is required of an investment manager dealing with just one or two funds is a relatively straightforward task. But as you encounter the need to reforecast more frequently—sometimes even monthly—and as your modeling requirements begin to account for complex investment structures, reforecasting can begin to chew up an intolerable amount of time—especially if you’re still using Excel or generic ledger software. Even worse, dealing with the hundreds (or thousands) of spreadsheets during each reforecast increases the potential for errors, which means you are not delivering the most accurate and timely decision-making tools to your investors that you could be.

Systems like MRI’s Cougar or Yardi’s Advanced Budgeting & Forecasting module automate these processes for you, providing you with far greater agility and speed, and allowing you to spend more time evaluating the data to provide the best possible advice to your investors.

3) Do we think of “transparency” as a burden?

In the post-2008-economic-meltdown-world, transparency has become a lynchpin phrase, both for investors and for government regulators. If you view this trend toward greater transparency as a burden rather than as an opportunity to demonstrate your business acumen and agility, it might be because you don’t have the right tools to make it easy.

Investors are no longer satisfied with a bunch of Excel models thrown together in a haphazard “report”; they don’t just want data, they want business intelligence, and they want it from an auditable system. The current best-of-breed software solutions out there make it easy to adhere to the strictest security and transparency requirements; each record has an “audit stamp”—illustrating every change that has been made to the data, who made the change, and when. Such ingrained, automated features make transparency a snap.

In addition to these back-end office features, these best-of-breed software solutions are integrated with front-end office tools like investor portals, which provide investors with “self-service” access to the business intelligence that they need—as well as the chance to demonstrate that your firm is organized, knowledgeable, and at the cutting edge. In this way, these software solutions help you meet transparency requirements, save the fund managers tons of time otherwise spent wrangling together less-than-intelligent spreadsheets, and make you look good, too.


If you’ve answered yes to any—or all—of these questions, it is time that you speak to a trusted advisor about finding a real estate investment software solution that is right for you.

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Josh Malinoff
About the Author

Josh Malinoff

Josh joined the REdirect team as a Principal in 2007. He brings over 28 years of real estate technology expertise to REdirect and is often a go-to source for any complex projects.  


Josh spearheaded REdirect’s involvement in Investment Management software, creating a dedicated practice group focusing on the growing …