Professional 3rd party management companies manage the day-to-day operations of these properties. Moreover these investments are run as real businesses and are valued financially based on the typical financial statements such as income statement, rent rolls etc.

3rd Party Property Management: 3rd Party property management companies are engaged to manage the day-to-day operations of the property such as leasing, make ready, repairs and work orders etc. Typically, properties need to have more than 60 units to make financial sense to have onsite property management. One way to mitigate the higher overhead costs for properties with fewer units is to have multiple such properties closer to each other so the same crew can split their time across them.

Asset Management: Sponsors take on the role of asset managers that manage the property managers, investor relations and execute the business plan for this investment. Having property management company taking care of broken toilets, leaky faucets and other such operational issues frees up the time for sponsors to focus their efforts on maximizing the returns for investors.

Investor Relations: Investor relations is a key role for the sponsors. Communicating the performance of the property and the investment and progress of the execution of the business plan are critical in keeping the trust imposed by the investors in the sponsorship team. Transparent and consistent communications periodically are paramount to that. Sponsors, aided by property management typically, share the progress with investors on a monthly basis along with the financials of the property

Distributions & Disposition Decisions: Another key role the sponsors play is deciding on distributions and eventually when to sell this asset and realize the gains.