It’s possible you’ve spotted the name ‘Horizon’ in the press recently.

We would like to confirm that MRI Horizon, our enterprise real estate management and investment software solution, IS NOT the system which has been the subject of recent news stories relating to the UK Post Office.

Articles, such as this one on the Independent, refer to a Horizon IT system. To reiterate, and to reassure our many existing clients and potential users, the Horizon in question is in no way connected to MRI Software.

Hopefully, this allays any concerns that may have arisen.

Thanks, and season’s greetings!

As a multifamily owner or operator, you know it’s a problem that all your property data exists in filing cabinets, desk drawers or spreadsheets – or worse, hidden in people’s emails or just in their heads! The information that forms the lifeblood of your business is far too important and complex to be sitting in a binder, but the thought of changing to a new asset management system is daunting.

The answer is clear: you likely realize that you need to invest in asset management software – badly. But implementing and utilizing a solution is such a massive undertaking, and you’re not even sure exactly where to begin. What can asset management software do for your organization? What sort of information should you even be tracking? Will any of this actually be useful?

If these questions resonate with you, fear not. All of your concerns are valid, and there are answers to all of your questions.

Understanding how your organization uses asset data

Before taking on asset management software, it’s important to think about how your organization uses the asset data that it keeps. Are there metrics you’re currently tracking? Is your organization leveraging the data that it tracks to make better business decisions? If you’re still using basic, unwieldy spreadsheets to manage your asset data, the answer to that question is likely “no.” Establishing asset management software, however, allows you to track more data points, focus on the meaningful data, and access them more easily.

Even if you’re not entirely sure what kind of data your multifamily organization needs to be tracking, MRI Software has a solution that can help owners and operators who feel overwhelmed by the questions that would naturally accompany the introduction of a new asset management solution. Through TCAM advisory services, MRI can work with owners and operators to translate whatever unformed thoughts are in their head about what’s important to them and what’s been pushing them to consider implementing new software.

What data should you be tracking?

While this is a question you’ll need to know the answer to before moving forward with asset management software, it’s okay if you don’t know how to respond right away! An easy way to find out what data you want to track is to ask yourself about the needs of the end user. What can technology provide to the end user? What goals are they trying to accomplish, and how do you think inefficient processes are standing in the way of that?

You’ll also want to spend time thinking about what teams within your organization will benefit from a new system. A good way to assess this would be to gather one member from each team and get their feedback on some of the most difficult parts of their job and what kind of functionality would make it easier. Which aspects of the business would they like to know better? If this still feels overwhelming, TCAM has extensive experience working with owners and operators of multifamily housing to help really delineate where pain points are, what the actual drivers of value are, and what information would be most helpful to enable smarter decision-making.

The process is worth it

You might be thinking about how many questions you should be asking in order to switch over to new software. No matter how daunting the process may seem, asset management services can help you break down each step and stay focused on where you want to go. Get a better understanding of what your business needs, and see how an asset management solution can help each team across your organization make better decisions.

To learn more about asset management software, watch this webinar and see what a solution can do for you.

This blog was written by Itzik Spitzen, co-founder and CTO of LeasePilot. LeasePilot, an MRI partner, is a context-aware lease automation platform. As the architect of the company’s software framework, Itzik takes a hands-on approach to managing the company’s technology strategy and software engineering teams. Itzik holds a Master’s Degree in Computer Science as well as Practical Software Engineering diplomas from premier academic institutions in Israel.

Of all the things that need to be done during a leasing lifecycle, creating an abstract is far and away the most dreaded task. But because of the abstract’s centralized importance to the daily operations of every real estate business, it’s a necessity. And until recently, it has been a necessity with no shortcuts. But emerging technologies are finally providing viable alternatives to the traditional process.

At a conceptual level, there are only two possible ways that a lease abstract can be automated. But before I can talk about and compare each method, there’s some important background I need to cover first.

Making Breakfast with Structured Data

Computers and the software that runs on them — including the so-called “artificial intelligence” software — are dumb.

Coming from the CTO of a software company, that might sound like a provocative statement. But I don’t believe that it is. In fact, I think most of my peers would agree with me. If you’re skeptical, here’s an experiment you can try right now:

Step 1: Unlock your smartphone and open the Calculator app.
Step 2: Tap the following buttons: 2 + 2 =
Step 3: Observe the result

Hopefully your calculator produced an output of 4. Everything is working as it should. Go ahead and clear that result so we can continue. This time, let’s throw your calculator a proverbial curveball:

Step 4: Type the following sequence: 🥓 + 🍳 + 🍞 =
Step 5: Observe the result

At this point, astute readers may have noticed that Step 4 is impossible. Even WolframAlpha, the most advanced AI-powered calculator available to the public, can’t make sense of the emoji math above. But you probably figured it out instantly. The answer to 🥓 + 🍳 + 🍞 is, quite obviously, breakfast.

The reason why your Calculator app can’t handle EmojiMath is obvious enough: it wasn’t designed to understand emoji-based inputs. To enable a computer to understand EmojiMath, an engineer would need to add new rules to the calculator software specifying the meaning of each new emoji. The important takeaway here is that computers don’t have general intelligence in the same way that human beings do. Even so-called artificial ‘intelligence’ is task-specific; you can’t use a self-driving car’s AI to trade stock on the NYSE.

So what does all of this have to do with lease abstracts? Everything, actually. The purpose behind this exercise is to introduce the concept of structured data as the essential and fundamental prerequisite for software-based automation of any kind. Structured data describes information that is indexed and formatted in a way that a computer can understand. When you and I look at a lease, we see and understand the structure. But a computer does not. To a computer, there’s no structure to a lease beyond the string of words, punctuation, and line breaks that the document contains.

So when we’re talking about how a computer can automate a lease abstract, what we’re really talking about is how we can convert the raw, unstructured data in a commercial lease into structured data that a computer can understand. And there are only two ways that can be done:

1. Machine Learning Analysis
2. Context-aware ‘Snapshot’

The rest of this piece will discuss how each method works and when to use it. Note that these methods are complementary and have very different use cases. A cutting-edge leasing team will be able to use both in its workflow.

Method 1: Machine Learning Analysis

In a nutshell, the Machine Learning Analysis method uses advanced software to “read” a lease and convert it into structured data that a computer can understand. This process requires a lot of time and computing power, and as a result, a Machine Learning Analysis is typically only run after the final version of a lease is signed and executed. There are a handful of different technologies that a Machine Learning Analysis uses, but for the sake of brevity I’ll focus on the most crucial: Natural Language Processing.

Natural Language Processing (NLP) uses an algorithm to convert the unstructured human language in a commercial lease into a structured dataset that computers can work with. The algorithm works by comparing the unstructured language in the lease to a large sample dataset of pre-structured leasing language. Over time, the algorithm “understands” the meaning of the content in the new lease and builds a logical data structure around its findings.

Although these algorithms aren’t perfect—a human still needs to review the results and correct any mistakes—they “learn” more with each new lease and grow more accurate over time. With all of the grammatical oddities and complexities implicit in human language, this feat is nothing short of amazing.

Method 2: Context-aware ‘Snapshot’

Lease abstraction using the ‘Snapshot’ method is relatively new on the CRE scene. This method doesn’t require a complicated NLP algorithm, uses minimal processing power, and can produce an error-free abstract instantaneously (no human review required). Given all of these advantages over the Machine Learning Analysis method, you’re probably wondering why the Snapshot method isn’t common practice. Here’s the catch: a Realtime Database Snapshot can only produce an abstract from a lease that is drafted and revised using software built specifically for creating commercial lease documents.

Although specialized leasing software is relatively new, it operates on the same principles that every real estate lawyer and paralegal already knows reflexively: commercial leases have a logical structure with a predictable framework. For example, when an extension option is added to a base lease form, the lawyer drafting the lease automatically knows that s/he will need to update the term, rent tables, and assignment provisions accordingly. The lawyer knows the broader implications a single change can have because s/he is aware of the larger context.

Specialized leasing software operates on the same idea of contextual-awareness. It’s the equivalent of giving your computer a comprehensive ‘map’ of your base forms and option language before a lease is drafted. When it’s time to draft a new lease, the software uses the ‘map’ to build your lease with data that’s already structured. As default option language is added, removed, or manually modified during the negotiation process, the underlying data is continually updated in real time. With this approach to lease-drafting, creating an abstract is as simple as a ‘snapshot’.

Context-aware lease-drafting tools are relatively new to the industry, and as such the snapshot method isn’t as well known as Machine Learning Analysis. But as more and more landlords begin to take advantage of context-aware drafting tools, there’s no doubt that this type of software—and abstracts created with the Snapshot method—will be the industry standard in the next 5-7 years.

Use the Right Method

Now that you have a better understanding of both abstracting methods, the reasons why these methods are complementary are easier to understand. Let’s bring them into view more clearly.

When to use a Machine Learning Abstract

The primary advantage of Post-Lease Analysis is its flexibility. It can be used to create an abstract for almost any lease, which makes it particularly useful when landlords acquire new assets or wish to gather historical leasing data from their portfolio.

The downside of the Post-Lease Analysis method is accuracy and consistency. After the analysis is run, the abstract still requires human review and correction which limits the scalability of the method and eliminates the feasibility of abstracting each iteration of a lease draft during negotiation.

For these reasons, the general rule-of-thumb is that landlords should use the Post-Lease Analysis method for leases on tenant paper or legacy leases.

When to use a Data Snapshot Abstract

Producing an abstract using the Snapshot method is the future of leasing. Its advantages over Post-Lease Analysis are clear: It’s instant, it can be run with each draft to speed up negotiation, and it’s 100% accurate every time.

The obvious downside is that a Snapshot is only possible with leases that are created with specialized lease-drafting software on the landlord’s forms. But as context-aware lease-drafting software becomes the industry norm, this drawback is becoming less important every day.

The people you hire to operate, manage, and work for your multifamily property business are equally as important as those you choose as residents for your properties. Having the right pre-employment screening process means utilizing a service that enables you to hire as quickly as possible, validate all licenses or degrees, and adapt the criteria for different roles.

In order to get the most out of your pre-employment screening service, you’ve got to make sure that you choose a provider that meets the needs of your multifamily business, offers a quality screening service, and complies with state and federal regulations.

1) Choosing the right employment screening provider

When you choose a pre-employment screening vendor, you’re not just buying a product; you’re choosing to trust someone with one of the most foundational aspects of your business.

Many aspects of the new hire process rely on communication, and as a multifamily property manager, there will be times when you need to fast-track the hiring process. Maybe you’ll need to fill an unexpected vacant position, or perhaps you need to get someone hired before a seasonal influx of move-ins/move-outs. For these reasons, it’s important to have several different lines of communication between you and your employment screening provider.

Of course, none of the many channels of communication will do any good if your screening provider doesn’t offer timely or thorough responses to your inquiries. When the speed of your new hire process relies on a third party, you’ve got to be sure your provider responds quickly, and that they set aside ample to answer any questions you may have.

Depending on the position you’re looking to hire, you will likely need access to different sets of criteria for different job roles. For example, perhaps you’re looking for applicants that will be working with your organization’s financials, and you need to see which candidates have the proper training and certifications. When you’re choosing a screening tool, you should ask questions like, “Do they offer all of the different background checks we need?” and “Can we screen for the right standards on a case-by-case basis?”

2) Using a thorough screening service

The reason employment screening is so foundational to your organization is because it lays the groundwork for good business interactions, both internally and externally. Using the proper screening service enables you to improve the quality of your hires, protect your company’s reputation, and reduce the risk of legal or criminal exposure. In short, your employment screening service should be serving the same ultimate purpose of minimizing risk that your resident screening does.

Any discussion around a pre-employment screening service would be incomplete without of course mentioning the primary goal of said screening: improving the quality of new hires. One new employee can act as a morale boost among your current employees, especially if this hire has the skills and abilities to do the job well. A bad hire can have an impact on company culture and the overall reputation of your organization.

Making the right hire also helps to protect the reputation of your multifamily property. In the same way that flaws in your resident screening can be felt throughout the organization’s back office, flaws in your employment screening can cause problems that reverberate into the resident experience. The right hire can help keep your operations moving at an efficient pace.

Finally, utilizing the best employment screening service means running the proper criminal background checks. This aspect might seem fairly straightforward to the untrained eye, but as property managers know from their resident screening experiences, background checks can be a legal minefield. The same applies for your pre-employment screening service. Running new hires through the right background checks doesn’t mean rejecting applicants with a criminal history – you’ve got to remain in compliance with local and federal laws.

3) Complying with state and federal laws

The screening service you choose needs to be in compliance with the Fair Credit Reporting Act (FCRA). Enacted in 1970, the FCRA was aimed at protecting the rights of applicants and new hires. This law determines what personal information can be considered in a background check, and it allows applicants to review that information and contest any details they feel are inaccurate.

When it comes to background checks, there are steps that you as the property manager can take in order to remain compliant. By using all of the proper forms, keeping your applicants adequately updated, and allowing applicants to review their own data, you can ensure that your organization keeps up with the background check process in a fair and legal manner.

Like your resident screening, your pre-employment screening can have a vast impact on every part of your business, so it’s important to use a service and provider that works for you. MRI Software offers both resident screening and pre-employment screening, making the onboarding process as easy as your lead-to-lease operations. Learn more about our pre-employment screening service in this webinar.

Budgeting and forecasting can be a long, painful process that hinges on an organization’s ability to make accurate assumptions in order to balance the long term planning and short term management of the business.

It’s possible to simplify this process, but like all good things, it will take some work! When dealing with such a complex process, it’s not enough to simply try to do everything faster. You’ve got to break down each level of your budgeting and forecasting and look at how to improve each moving piece, which will then affect the larger whole. Increasing efficiency and accuracy starts by evaluating how you make assumptions and continues by balancing your short term management vs. your long term strategy.

The need for assumptions

The first step of improving your budgeting and forecasting is asking yourself how you can start with better assumptions and end at more accurate budgets, forecasts or strategic models.

In many ways, the old adage about assumptions still rings true. After all, making assumptions revolves around guessing, and guessing is often risky. There are always going to be some gaps in your data, whether you’re simply trying to estimate future events and performance or if you’re simply not able to find certain concrete data.

Making more accurate assumptions

Improving your assumptions is all about testing to see what works and what doesn’t work. Before you get to short term and long term planning, you start only with what you know and what you don’t know. By grouping together what you know and what you don’t know, you can pull different levers and see how one outcome can affect the other.

For example, you can creating speculative leases. By assigning probabilities and adjusting lease terms, you can see how making adjustments to the things you don’t know might impact the things you do. What does your projected rent look like when adjusted against market rent? What kind of effect will tenant exposure have on tenant mix? By tooling around with these different metrics, you can get a better sense of what might work for your budget.

Short term management vs long term strategy

Management consultant and author, John Hagel, advocates an approach for tech companies called the zoom out, zoom in strategy. If you “zoom out” on your industry and think about the next 10 to 20 years, what do you see? Where are market trends leading you? How do you think the industry is going to change in that time horizon, and how do you want to fit into it all?

Now zoom In. Plan out your next 12-24 months by building budgets and crafting forecasts. What do your short term metrics look like? Are they pulling you towards or away from your long term goals?

How to align the short term and long term

How you manage your organization in the short term will inevitably have an effect on the long term strategy. To properly align the activities in the Zoom In/Zoom Out approach, you’ve got to make sure that the teams who are producing these two outputs (long term and short term) are consuming the same, reliable data. Furthermore, you’ve got to be thinking about these key questions:

1) Does the short term annual budget support the long term strategic plan?
2) Are we using the assumptions from the long term plan in the budget?
3) Does performance against the budget suggest altering the long term plan?

The two teams must be agile enough to respond to volatility while at the same time drive the business forward against a long term strategy. Establishing a single source for all your data, making that information available across all teams, and delivering relevant and personalized reporting can go a long way in enabling the two teams to join together.

Budgeting and forecasting is a grueling process for every organization, and the best way to simplify it is to improve every individual step of the greater whole. By taking a critical standpoint and committing the proper time and resources, you can get the full potential out of your budgeting and forecasting.

Learn more about how best to reinforce your budgeting and forecasting operations from subject experts in this webinar.

Like the best authors who create pictures and stoke our emotions with the turn of a phrase, the best data can show us how the fabric of business is woven together. Using the entry points of reporting, dashboards, and analytics, real estate professionals can view the data in a way that suits their needs and helps them better understand the story their raw metrics are telling.

In The Wizard of Oz, Dorothy, Scarecrow and Tin Man consider the obstacles that they will face on their journey and soon recite the famous line, “Lions and Tigers and Bears, Oh My!” in unison at an escalating pitch. The audience is captivated by the rhythm of the phrase and instantly identifies with their plight, a plight based on the uncertainty of what they will face along the way.

Modern real estate professionals often face similar uncertainty as they attempt to extract information from the mountain of data that their businesses create. Questions about data abound as teams consider the accuracy of their data, how best to organize and extract it, and if it delivers the information the business needs to make crucial decisions. Often times, it can feel like there is a “man behind the curtain” operating with smoke and mirrors.

But reporting, dashboards, and analytics can help solve your data problems!

If we consider the way in which the information will be consumed and the objective of the recipient, it is much easier to organize the information using three basic approaches: Reporting, Dashboards and Analytics or Business Intelligence. Each provides a specific entry into the data and enables the producer to tell the data’s story in a relevant and personalized way.

Reporting: How can it track performance?

Reports are grids full of raw metrics that are produced by extracting data from across your business.

At a basic level, data must be extracted from wherever it is maintained in a format that can be easily consumed by the audience, or to whom it is distributed. Over time, standardized reports have developed the present information that is generally agreed upon by industry professionals. These reports include commonly used financial statements, variance reports and rent rolls.

Practitioners become adept at identifying critical information in these reports that are generally produced on a regular cadence. Reporting will sometimes contain commentary, but typically, this information is presented without commentary or context and it’s left to the recipient to apply a lens of experience to use the information in these reports to drive action. Other ad hoc reports are also generated to identify additional critical or unique metrics within an organization.

The danger here is that these reports often stray from their original scope and become a “data roster” of sorts, without the personalization or context needed to effectively deliver actionable information. Well-thought-out reporting is an exercise in extracting relevant information to track performance so that productive business decisions can be made.

Dashboards: How are they different from reports?

In contrast to standard reporting, dashboards offer users the opportunity to focus on selected key performance indicators (KPIs) that drive a business and represent them in a graphical or visual format.

The visual approach to presenting information gives the user “at-a-glance” access to the information so that they are quickly able to focus on patterns or changes over time as well as outlying data points. Dashboards are often customized by role, ensuring that the business drives that impact that role are captured and presented for that user.

If there are specifics that merit deeper discovery, the user can drill into the data from the dashboard and gain insight into that KPI, insight that will enable that person to take action to impact that business driver positively.

Analytics: What separates them from reporting and dashboards?

Analytics (aka data visualization) is one of the hottest topics across a variety of industries today. As evidenced by Salesforce’s recent acquisition of Tableau Software, the need for companies to “see and understand their data” is critical in today’s hyper-competitive environment.

A data visualization tool enables users to flex their data and evaluate it from a variety of perspectives. With the ability to quickly identify trends in large amounts of data or overlay one data set over another, it is this dynamic interaction with data that uncovers trends or even relationships between seemingly disparate data sets. With the ability to explore the data and arrive at a data-driven conclusion, this business intelligence approach improves the speed and accuracy of business decisions that can impact an entire portfolio.

Today’s decision makers need the most accurate and relevant information possible, and they need it delivered in a personalized fashion to drive the business forward. With the volume of data that businesses are collecting today, these professionals need a variety of tools to extract the information, insights and intelligence they need. When harnessed properly, these tools provide the shortest distance between the data and the decision.

To learn how you can make better use of business intelligence for your organization, watch our webinar about self-service analytics.