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Real Estate Investing Abundance

REIA 193 Dave Sherbal: Everything to know about Asset Management

Dave Sherbal has over thirty years experience in all real estate product types, with a specialty in multifamily product and has been involved in all phases in the life cycle of an investment. He holds a M.B.A. , State University of New York (SUNY) at Buffalo, NY. B.S. Accounting, Magma Cum Laude, (SUNY) at Buffalo, NY and is affiliated with the American Institute of Certified Public Accountants.

Listen to the podcast here or on your favorite podcast app:

Watch the Episode here:

Main Points:

  • How to do a proper due diligence
  • How to perform due diligence on property management firms
  • What reports and information to review weekly

Contact:

Biography of Dave Sherbal:

Heschel Asset Management LLC, Coral Springs, Florida

Principal (November 2014 – Present)

Heschel Asset Management is a full service real estate advisory firm. The Principal of Heschel Asset Management have over twenty – five years experience in all real estate product types, with a specialty in multifamily investments. Heschel Asset Management provides the following advisory services;

  • Acquisition underwriting and due diligence
  • Rehabilitation budgeting and oversight
  • Property and asset management, lease ups, turnarounds and re-positioning
  • Capital transactions, Re-financings and dispositions
  • Corporate support services, accounting, risk management, purchasing and negotiating ancillary income contracts

Fifteen Group (FG), Miami, Florida

Principal, Chief Financial Officer and Director of Asset Management (2001 to November 2014), Chief Operating Officer (2002- 2003)

FG is a real estate focused private investment firm specializing in the acquisition and development of opportunity- driven, value–add residential and commercial real estate projects. FG has owned over 45 apartment communities with 14,000 units geographically dispersed in ten states on both coasts. The portfolio consisted of both B/C-grade garden and mid-rise apartment communities. FG’s portfolio has also included office, retail, industrial, marina, land and single home development.

Major Responsibilities:

Direct team of asset managers in a “Cradle to Grave” approach to hands on asset management for all investments. Oversight in the underwriting and acquisition due diligence process (Member of FG investment committee), Selection and oversight of third party property managers. Development and implementation of investment strategy to optimize portfolio performance and value. Develop and implement asset disposition plan for investments.

Review and approve property operating budgets and capital expenditure plans. Developed local and national vendor strategic relationships. Oversee negotiations of ancillary income (Cable, Internet, Phone, Gas, Laundry, and Signage) contracts. Oversee risk management function including establishing portfolio insurance vehicle, negotiating of premiums and oversight on claims management & strategy.

Achievements:

Deal lead on $12MM acquisition of a 268 apartment unit investment in Naples, Florida. In a fifteen month period, installed new management, implemented a value – add program consisting of extensive exterior and common area renovation as well as individual unit upgrades that allowed for rent increases from $599 to $849/month.

Occupancy increased from roughly 50% at takeover to 94% upon disposition at $22MM, resulting in a 40%+ investment IRR.

Directed the transition of 14,000-unit portfolio from prior external management company to be internally managed by Fifteen Asset Management on November 1, 2002. This transition included the hiring of regional managers, development of corporate accounting department, human resources, construction management, information technology and asset management. The transition included the integration of 300+ site level employees to FAM.

Oversaw the accounting and reporting process for over $100MM in revenues per annum. Established the cash management system utilized by FAM and monitoring of the compliance with cash management agreements with lenders. Developed monthly owners reporting package and daily property informational reporting system.

JPI DEVELOPMENT CORPORATION, Boca Raton, Florida

Vice President – Asset Management (1999 to 2001)

JPI is a national merchant builder of luxury multi-family apartment complexes. JPI builds $1B of new construction each year.

Major Responsibilities:

Development and implementation of asset disposition strategy for JPI’s operations in the state of Florida. This includes selection of third party brokerage firm, oversight over buyers bidding process, buyer due diligence/selection and negotiation of purchase and sales agreements. Closed three transactions with a gross sales price of $87MM.

Development of investment strategy for real estate investments which consists of 8 assets with a market value of

$200MM. Communicating to management these ownership objectives and monitoring the success of the operating goals. Final approval on annual operating budget.

Prepare monthly property cash-flow projections, valuation models and partnership distribution summaries. EISENBERG PARTNERS, L.L.C., Chicago, Illinois

Chief Financial Officer (1998 to 1999)

Eisenberg Partners, L.L.C. was an Investment Manager for three privately held investment funds. The three funds include EP Opportunity Fund, L.L.C., EP Opportunity Fund International, Ltd. and EP. COM Fund L.L.C.

Major Responsibilities:
  • Perform due diligence on prospective investments which includes reviewing financial statements; meeting with CEO’s/CFO’s of target companies regarding products, competition and future business plans; and reviewing investment documentation.
  • Provide follow-up “Asset Management” oversight on completed investments. Review quarterly and annual reports, update net asset valuations, and maintain periodic conversations with portfolio company senior management in regards to future prospects and cash management.
  • Prepare quarterly performance reports for funds, investor correspondence, coordination and interaction with outside auditors in the preparation of annual reports.
  • Daily supervision of and interaction with firm’s Prime Brokerage representatives. Review daily accounting of trades and prepare month end valuations for “Private” investments.

INSIGNIA PROPERTIES TRUST, Greenville, South Carolina

Portfolio Manager (1997 – 1998)

Insignia Properties Trust (IPT) was a publicly traded Real Estate Investment Trust consisting of Insignia Financial Group’s interest in twenty-six public real estate limited partnerships. IPT holds interest in over 136 multi-family complexes with a total book value of approximately $1.2B.

Major Responsibilities:
  • Portfolio Manager for 13 publicly traded real estate limited partnerships. These partnerships contain 50 assets with 15,000 units and with a combined book value of approximately $500MM.

Responsible for quarterly partnership distributions recommendations, asset disposition and refinancing activities including debt modifications and lender workout negotiations.

  • Development of both short and long term investment strategy for real estate investments. Communicating to management these ownership objectives and monitoring the success of the operating goals. Final approval on annual operating budgets including capital expenditures.

IFGP Corporation, Greenville, South Carolina

Asset Manager (1995 – 1997)

  • Partnership Fund Manager for eight publicly traded real estate limited partnerships.
  • Asset Manager for 47 assets with a combined book value of approximately $500MM.
  • Portfolio consisted of 30 apartment complexes with 7,800 units, 14 limited service hotels with 1,700 rooms, two commercial office buildings with 300,000 square feet and one mobile home park.

ZELLER REAL ESTATE GROUP (ZREG), Miami, Florida

Treasurer/Controller (1991 – 1995)

A company structured to provide consulting and asset management services for troubled real estate situations. ZREG is involved in the workout of over $250MM in troubled assets for the Resolution Trust Corporation, Bay Financial Corporation (BFC), Cobb’s Pond Development Corporation (CPDC) and major financial institutions throughout the U.S.

Corporate Controller/Treasurer – BFC: ZREG was hired by major unsecured creditors of the then publicly traded real estate development company to bring it out of bankruptcy as a reorganized entity. ZREG Officers were appointed officers of BFC.

Major Responsibilities:
  • Oversight of corporate cash flow analysis and investment decision making, project budgeting, which included interacting with property managers (includes resorts, motels, office buildings, apartment complexes, shopping centers) and investment due diligence.
  • Preparation of operating budgets and monthly performance analysis and review, construction funding and variance reporting.
  • Responsible for the coordination of BFC’s annual audit and for the reporting of the monthly operational results to the Board of Directors of Bay Financial Corporation.

Vice President – CPDC: ZREG was hired to develop waterfront property in the Northeast U.S. into a 32-unit single-family townhouse community.

Major Responsibilities:
  • Preparation of a project feasibility study, operating pro-forma budgeting model and financial statement reporting package.
  • Implementation of accounting & operational controls, cost accounting and construction funding reporting.
  • Coordination and interaction with construction lenders, building contractor, project manager, vendors and on- site sales staff

EDUCATION: M.B.A. 1988, State University of New York (SUNY) at Buffalo, NY

B.S.  Accounting 1988, Magma Cum Laude, (SUNY) at Buffalo, NY

PROFESSIONAL

DESIGNATION: American Institute of Certified Public Accountants

OTHER: Member of Advisory Board – Neighborhood Pay Services

April 2014 – Present www.npsrentassurance.com

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