Commercial real estate investing is complicated. It involves many moving parts and relies on dozens of people to make a project succeed. The best investors lean on the best project management frameworks to keep all these things organized.
The sampling below contains the most effective methodologies that I use. I rarely implement one with full fidelity. Rather, I take a sampling from each to create the best tools for the job at hand.
Waterfall
Waterfall is the most traditional project management methodology. As the name implies, this process stacks requirements one after the other such that finishing one task leads to the next.
A waterfall workflow defines all requirements at the beginning of the project along with a defined sequence. The project manager owns the entire workflow and assigns tasks as needed to stakeholders.
This framework is helpful for projects that have a clear and predictable set of requirements. You may use this for routine tasks, like monthly reporting, or one-off projects, like obtaining entitlements.
Critical Path
Critical path is a lot like the waterfall framework in that it works from a clearly defined sequence. However, this workflow focuses more on resource management.
In an environment with limited resources – primarily time – you need to identify when and how a task gets done. You don’t have the staffing or personal bandwidth to complete all tasks in a one-off project simultaneously. Therefore, you need to strategically align all your resources to come in and out on an as-needed basis.
This framework is ideal for one-off projects with tight deadlines. For example, acquisitions are often unpredictable and must meet a clear set of milestones to be most effective. However, most investors rely on resources at hand rather than bring in outside help. Critical path helps your team juggle normal tasks with the additional load of due diligence and closing.
Agile
Agile is a very popular software development framework. It became even more popular when the guts of your software moved from the desktop into the cloud. In this setting, developers can quickly identify improvements and deploy them without user interference.
This framework follows an iterative workflow. Teams work in short project cycles called sprints. They define a set of requirements, execute in a one to two-week cycle, report back, and redefine for the next sprint.
I love this project management methodology for operational teams. It contains a natural feedback loop that allows for constant learning and improvement.
Tools
Two tools will quickly become important parts of your workflow regardless of the framework – RACI and Gantt. These help you visualize the workflow and keep your team accountable.
RACI
RACI is an accountability system to assign stakeholders to different tasks in the project. The acronym stands for:
- Responsible – people doing the tasks
- Accountable – owner and approver
- Consulted – subject-matter expert
- Informed – people kept up-to-date on the progress
As you can tell, the real work gets done by the responsible and accountable parties. These may be the same person in a small team. The latter two – consulted and informed – play a passive role, but it’s important to identify them early on. This will prepare them to contribute when and if needed.
Gantt Chart
A Gantt chart is a bar chart that plots each task against a timeline. This allows you to visually see where the project stands against the proposed schedule.
Gantt charts are common in every project management software. Waterfall and critical path frameworks rely heavily on this tool.
This tool is most effective when you can clearly differentiate between the proposed and actual timeline. You get a sense of whether you’re on track when you see that a deadline is approaching and completion is far off. This allows you to pivot if necessary or dedicate more resources to a particular task.