How a Virtual CFO Can Grow Your Real Estate FirmSadaf Abbas
How a Virtual CFO Can Grow Your Real Estate Firm
CFO services for real estate firms and developers become inevitable when a company expands and has to become more strategic with its financial planning. If your real estate business is not yet prepared to incur the cost of hiring an internal CFO, you might want to think about hiring a virtual real estate CFO.
Real estate CFO services can assist you in realizing your real estate business’s full potential since financial experts in the sector provide these services. A virtual CFO for real estate deals with a variety of challenges specific to the industry. They guide the real estate businesses on where to put their finances, how to increase the value of the properties in their portfolio, and what to do with historical assets they may have inherited.
Read some valuable details below to discover how hiring a virtual CFO might aid in expanding your real estate company.
Financial strategy is important for every real estate business that considers its budgeting, cash management, investment decisions, costs, and income. Your real estate business may advance and acquire a competitive edge with the help of a well-designed financial strategy. It can specifically aid in goal-setting, debt reduction, and profit-boosting.
Using an effective financial plan, you may adequately deploy resources and reduce pointless business expenditures. Therefore, if your real estate company can’t afford a full-time CFO, then consider hiring a qualified virtual CFO who can assist with your financial plan.
While your accountant keeps track of your present financial transactions, they might not be enough to support your company’s growth. But thankfully, your real estate business may have thorough short and long-term financial planning with the virtual CFOs. To achieve your financial objectives, they may assist you in creating a financial plan that considers your business’s demands.
Forecasting And Budgeting
Business forecasting is the process of using tools and techniques to predict changes in a company’s revenue, expenses, and profit. You may use it to determine the steps your real estate company has to achieve success. Additionally, budgeting helps ensure your real estate firm has enough money to pay for scheduled business activities. Finally, you may decide which areas of your company to receive your spending priority.
In order to assist your real estate business in achieving short and long-term objectives, a virtual CFO does forecasting and budgeting. If your real estate business is having trouble increasing earnings, hiring a real estate CFO services is something to consider. This financial expert can assist you in identifying and seizing fresh company prospects as well as in making wise financial decisions during uncertain economic situations. To make precise estimates, virtual CFOs examine your real estate business’s present and foreseeable capabilities. They also assist you in running your business to meet short-term financial objectives.
Help Raise Capital
Your firm requires capituyal as a source of cash to keep running on a daily basis. Before raising money, you must create a long-term business plan that identifies your funding requirements. Additionally, you may make a financial strategy and decide how to raise funds for your real estate company with the aid of a virtual CFO. With their real estate knowledge, they can make insightful recommendations about what would be best for you, given the size and kind of your company.
Virtual CFOs have relationships with a number of investors since they deal with various businesses, and they can introduce you to these people. Moreover, working with a virtual CFO is helpful because they can guide you in choosing the best valuation technique.
For your real estate firm to be successful, risk management is essential. It involves detecting possible hazards and taking action to reduce or control them. Be aware that operating your firm will probably still include certain financial risks, even in an environment where the real estate market is strong and booming. Compliance, Debt, liquidity, and merger and acquisition risk are just a few of the financial dangers a company might encounter.
You may engage with a virtual CFO to assist you in managing those financial risks, protecting your company’s bottom line, and fostering business expansion. The top virtual CFOs can see possible hazards in your real estate business and provide workable mitigation or control measures.
When to Consider a Real Estate CFO Services?
Many prosperous business owners and managers lack a degree in finance and accounting but possess outstanding entrepreneurial, sales, and customer service abilities. Additionally, expanding enterprises frequently reach a point where their financial demands become more complex and call for expert financial assistance, even if the business owner has a sense of the financial elements. However, employing a full-time CFO or controller can be expensive when factoring in full-time pay, incentives, and perks.
When contrasting a full-time post with a virtual CFO, consider that the latter often executes at a similar competency level to a full-time position for a fraction of the price. Moreover, virtual CFOs:
- Work only when you need them, but still provide similar timely, accurate, and insightful financial reporting.
- Provide a depth of knowledge in finance and accounting
- Assess the company’s efficiency and provide recommendations for improvement.
- Provide professional insights regarding financial performance.
- Assist with strategic transactions, financial processes, business plans, and budgeting.
How do Commercial Real Estate Investors Benefit from Real Estate CFOs?
As a commercial real estate investor, you must understand your current cash flow and cash needs, your property portfolio, and whether it will meet the financial hurdle rates that contribute to the portfolio’s overall return on investment.
You need a view of each property’s performance as well as a consolidated view of your entire portfolio. This is where real estate CFO services can help. They will set up and manage your properties in an accounting system so you can view them with the click of your mouse.
Real estate CFO services will:
- Track your return on investment on both a per-property and portfolio-wide basis.
- Review your investment activity and manage your expected cash flow.
- Use the financial data to guide your decisions to build your portfolio’s value.
Other Outsourced Real Estate CFO Services
- Complex transaction structuring – debt & equity
- Loan financing, refinancing & restructuring
- Debt covenant compliance
- Operational reviews
- Operating cost analysis
- Revenue analysis / evaluate new opportunities
- Contract review & compliance
- Choice of entity guidance
- Loan draw reviews
- Audit preparation assistance
- Tax filing
- Staff management
The unavoidable fact is that a virtual CFO with knowledge of the real estate sector is a crucial member of your professional team, ensuring that the business’s finances are in order.
OAK Business Consultant knows what to look for to ensure that your real estate portfolio is operating at maximum financial capacity. We provide the benefit of a financial expert at a fraction of the price of hiring an in-house employee. In addition, you will not need to add to your company’s headcount or take up additional office space when you engage a virtual CFO. We offer expert advice on financial management, accurate financial reporting, KPI monitoring, and much more.