Street Smart Success

Buying sub-institutional size deals entails less competition, and therefore lower prices. In the $3 - $10 million dollar range, competition is mostly local to a specific market with a buyer pool that generally doesn't include national or regional players. David Hrizak, CEO of The Streamline Companies, buys, builds and manages across various asset classes in Phoenix, the 5th largest market in the country. Over the past three years, David has focused on Class B office and Medical Office. Class B office has been a great category because most tenants can't afford Class A and don't require extravagant amenities. Medical Office is a sweet spot that correlates to the aging of our population and the growth of Health Care.

Finding an avenue to high returns can be difficult in saturated markets. Certain markets outside of major metros, however, can provide a unique opportunity for great returns as major metros have become exorbitant for large swaths of owners and renters. Colby Swarz, Vice President of Capital Markets & Investment Strategy of Burkentine Real Estate, builds Planned Urban Development communities with garden style apartments and townhomes that appeal to residents who are looking for a higher quality of life with more space at a lower cost.

Although retail has been out of favor over the past several years with the threat of ecommerce, it's gained traction more recently. As opposed to being venues for traditional soft goods stores, retail space is becoming utilized for other purposes such as medical services, boutique gyms, and restaurants. There's also been negligible new construction since 2008, so demand for space has outgrown supply, which has resulted in mid-90% occupancy rates nationally.  Alex Smith, Co-founder and Managing Partner of  Regal Ventures, acquires retail, mixed use, and small bay industrial mostly in New York and the greater Tri-State area.

It's always difficult finding a deal, even in down markets, but if you're willing to be contrarian, there may be lucrative opportunities that present themselves. One example is vintage 100+ year old multifamily properties in downtown Portland, Oregon. These properties are trading at 300-400 basis points higher than suburban value-add properties that hardly cash flow, and appeal to a large subset of urban renters. Paul Del Vecchio, CEO and Founder of Ethos Companies, is investing in these high-yielding properties. Ethos has developed, manages, and invests in several thousand multifamily units. They also own and manage industrial, retail and office buildings.

Sometimes the best ideas are the simplest and seem the most obvious in hindsight. Co-warehousing is one of these ideas. Co-warehousing was created for small, often start-up businesses to rent smaller spaces for shorter periods of time. These spaces are typically sub-1000 s/ft, as small as 250 s/ft, which are desirable to entrepreneurs who can be moving out of a home office or storage space, or just starting out. Co-warehousing also offers these tenants shared amenities. Jeff Jenkins, Vice President of Acquisitions for WareSpace, was the second employee back in 2021 and is responsible for expanding the company's footprint nationwide.

One strategy to get big discounts on multifamily properties is to buy the loans from current lenders at below par. Once a mortgage becomes 60-90 days late, lenders will consider selling the note to de-risk their position and redeploy the capital into other loans. Buying pools of these notes is a strategy deployed by larger funds but can also be used by smaller investors to acquire buildings in smaller to midsize markets for short or long-term holds. Chris Zona, litigation attorney, helps clients navigate this sometimes-complex process in order to expand their portfolios for short-term gain or longer-term appreciation.

The single-family housing asset class is the largest in the U.S, valued at $70 billion. In the past few years, however, this asset class has seen some of the same challenges of other commercial real estate classes, such as overleverage, increased interest rates and escalating expenses. As a result, attractive opportunities are starting to emerge that translate into solid investments that can generate a 7% yield. Noel Christopher, Managing Director of Strategy & Growth at Genstone Financial and Property Services, leads the strategic vision and execution for Genstone's national single-family rental property management business and associated services, including real estate brokerage, construction, insurance, lending, and title offerings. Noel also owns his own portfolio of 50 single family rentals.

Although prices on multifamily have come down, the market still hasn't stabilized. Rents have come down in many markets and expenses have increased, but prices have still not adjusted accordingly. Additionally, cap rates are still often lower than interest rates. Brian Burke, President and CEO of Praxis Capital, a multi-decade multifamily investor, has transitioned from multifamily to investing in senior living facilities. Brian is buying distressed senior living facilities and renting them out to professional operators on a NNN basis. The tenants are responsible for all expenses and sign 15-year leases with built-in rent increases. Brian is buying these facilities at huge discounts to replacement cost with high cash-on-cash returns. 

As major metros have become too expensive, investors are moving to tertiary markets in order to improve yield, thereby driving up prices in these markets. Smaller markets can be attractive because prices can be 50% less and rents not that much lower. Southern New Hampshire is a great example, as buyers from Boston and other markets are entering this market and paying record prices. Axel Ragnarsson, founder of Aligned Real Estate Partners, buys 10–50-unit value-add apartment buildings in Southern New Hampshire directly from sellers. Southern New Hampshire is a supply constrained, stable market with population and rent growth as residents are moving there from more expensive markets in the Northeast.

In today's market, investors are finding it difficult to achieve strong, reliable returns. That's why more investors are acting as the bank, making loans directly to other investors who don't qualify for shorter-term bank loans despite having excellent borrower qualifications. These loans are shorter-term, real estate-backed loans that often generate low double-digit returns. Fred SaintAmour, Owner and Managing Partner of Boathouse Commercial Funding Group, has closed over 200 hard money loans with no losses. Fred does one-off deals versus a fund that puts pressure on him to deploy investor capital and risk compromising his lending standards.

As a passive investor, one way to reduce risk and also participate in the upside usually reserved for General Partners, is to invest in a GP fund. By investing in a GP fund, you get to participate in the fee income generated by the fund while also sharing in the upside economics of the individual deals. Instead of achieving mid-teen returns, you can potentially do considerably better, even as high as mid 20's. John Azar, Founder, CEO, and Fund Manager of Peak 15 Capital, is a Private Equity expert and capital allocator who provides investors access to these attractive economics through his multi-asset class alpha fund.

One of the most resilient asset classes in commercial real estate is Mobile Home Parks. Almost no new parks have been built in the last couple decades, and many parks are being repurposed for higher and better use. Mobile Home Parks are the most affordable housing option that has wide appeal to renters getting squeezed by inflation. Patrick McDonald, Principal of Community Management Group, owns and operates 26 parks, mostly in the Northwest. He is fully vertically integrated and has occupancy of 98% across his parks. Given the scarcity of these parks, Patrick is a long-term holder and targets a return of capital via refinance within five to six years.

After many years of peak prices, distress is starting to appear in multifamily apartments, including newer properties. As debt maturities are looming, operators aren't able to absorb the new debt costs plus all the other increased costs of the past few years including taxes, insurance, and other operating expenses. As a result, properties are now selling at prices at significant discount to replacement costs, thereby offering a once in a decade buying opportunity. Alex Roudi, CEO and Chairman at Interwest Capital, is buying newer properties at significant discounts. His latest deal is a 2022 build in Milwaukee with an in place 9.5% cash-on-cash return.

Investing in older, infill markets that are being repositioned and growing can be a recipe for huge appreciation. Over the past decade, several cities in Northern New Jersey with easy access to transportation have seen explosive growth in values. Gentrification has led to changes that have made these areas desirable to live in for upscale demographics. Aaron Fragnito, Co-founder of People's Capital Group, is an apartment syndicator who invests in smaller apartment buildings in Northern New Jersey and rehabs them to optimize their full potential. Aaron is a buy and hold operator who achieves return-of-capital via refinances. 

There are over 20 million rental homes in the U.S. Because of the higher prices of these homes, however, investors are making less on them than they have in decades. These days, investors are making more money by financing the homes than owning and operating them. When you're the lender, you get monthly payments without having to manage the properties, and you generate higher returns. Eddie Speed, President and Founder of Note School, Coach, Discount Note Expert, and Author, has over 40 year's experience helping diversity investor portfolios with investments in first position mortgages. 

Single family homes have always been a great way to invest in real estate if you buy them at the right discounted price. If they're in the right neighborhood in a stable or growing market, you will have no problem renting them, and they have historically appreciated over time. You also can use other people's money to acquire them. Jay Conner, The Private Money Authority, has flipped over 500 houses using other people's money with no origination fees and low rates. Jay teaches real estate investors how to skip the banks and get better rates, better terms and faster money for their deals.

An often overlooked and misunderstood category of Real Estate investing is tax liens. 2% of property taxes annually don't get paid, which presents an opportunity for investors to invest in tax liens or tax deeds. With tax liens, you can earn interest when the property owner pays off the delinquent taxes up to 18–36% annually, depending on the state. In tax deed sales, you can acquire properties at a heavy discount. Brian Seidensticker, CEO of Tax Sale Resources, has built a SAAS platform that provides insight into over 8,000 annual auctions nationwide. Brian also has a successful fund where you can invest passively in tax deeds.

The largest asset class in the world is single family houses in the U.S., worth a total of $35 trillion. Not only is it the largest asset class, it's the least risky if you invest with low leverage. One way to participate in the appreciation of this asset class without the potential downside is with Home Equity Agreements. Home Equity Agreements are contracts between investors and homeowners where investors get a percentage of the upside of the home in exchange for a lump sum of capital. Jesse Stein, Chief Investment Officer of Homeshares, has launched a fund of Home Equity Agreements where investors can generate a conservative, high risk-adjusted return.

In order to become an expert in multifamily takes decades. From knowing all aspects of the physical properties and maintenance, to the nuances of property management, and how to buy properties at the right price, requires a lifetime of knowledge. Paul Carassone, The Property Boss, has been acquiring and managing properties in New York for over the past 25 years. Paul started with his father and brother in the Bronx and transitioned into the Hudson Valley over twenty years ago where there was no rent control and less competition. Paul buys C Class properties inexpensively and creates immense value by improving them into B properties. All his buildings are w/in 25 min of where he lives and works

Smaller industrial buildings are seeing high occupancy levels and strong buyer demand. Even in slow growth, or slightly declining markets, the demand for industrial space is increasing because of limited inventory. Kip Northrup, a small business entrepreneur, started out by acquiring his first property to locate his pond and aquarium business, but has gradually expanded to 14 industrial properties from 5,000-25,000 s/ft.  Kip loves the process of improving properties with great design and aesthetics and finding new tenants. Kip wants to expand to 50 properties and is also searching for retail strip centers. 

Many long-term real estate owners have experienced tremendous appreciation and consequential equity in their properties. This is a great boon, but as a result, they are generating very small returns on their equity, sometimes as little as 2%. For these people, exchanging their properties via 1031 exchanges is a great way to improve cash flow and to no longer have to manage day-to-day operations. Benjamin Carmona, Managing Partner at Perch Wealth, helps clients find upstream properties to exchange into in order to generate more income, defer taxes, and exit day-to-day real estate operations. 

One area of the economy and commercial real estate that's flourishing is luxury travel. Well located, well managed hotels are unique assets that retain their value irrespective of the macroeconomic environment. In the past few years, this trend has been amplified because of the cost to build and resulting limited new supply. People who have the economic wherewithal will always prioritize upscale experiences and be willing to pay for them. Since founding Dovehill Capital Management in 2011, Jake Wurzak has led the investment of over $1.5 billion in hospitality projects, mostly in Florida where he resides. Currently, Jake is mostly investing in pref equity deals with other experienced operators.

Despite the common convention, you can buy homes without cash or banks. You can use seller financing, subject-to existing loans, or lease purchases, allowing you to control properties without personal guarantees or large down payments. There are many reasons sellers will sell on these terms, among them because they can command a price they didn't get on the open market, they don't want to pay fees, and other reasons. Chris Prefontaine, Chairman and Founder of the Smart Real Estate Coach company, coaches students how to acquire houses with creative financing. Chris is a four-time best-selling author of "Real Estate On Your Terms," a Forbes Business Council Member, and hosts a top 0.5% podcast.

When it comes to Real Estate investing, you can be a borrower, or you can be a lender. When you're the lender, you get monthly payments without having to manage the properties, and you can generate the same or higher returns. There's a secondary market for buying loans from original note holders at a discount. Fred Moskowitz, Fund Manager and Investor, quit his job in 2015 to become a full-time note investor and has turned it into a great business. Fred is an Alternative Investment Expert and the Author of The Little Green Book of note investing.

Over the past few decades, there's been a trend towards renting apartments versus home ownership, especially in the past five years. Home ownership has grown increasingly out of reach, and apartment amenities and living spaces have improved dramatically. Additionally, people are becoming more reluctant to make long-term commitments to any given location and want to avoid the responsibility of owning a home. Mike Kron, COO of Management Support, has been developing and acquiring apartments for several decades. Since 2024, Mike has been raising a fund which is acquiring Single Tenant Net Lease properties with national credit Fortune 350 tenants.  

Because of increased regulations that have resulted in tighter lending standards, banks aren't making a lot of smaller loans against properties that aren't stabilized. This has created a sizeable gap in the market for “Micro balance” short-term bridge loans to operators borrowing $200,000 - $1,500,000 with value-add business plans, especially in secondary and tertiary markets. Brock Freeman, Managing Partner and COO of Kirkland Capital Group, provides loans to this segment of the market where there's far less competition, and therefore better returns for investors.

As word got out about Mobile Home Parks over the past five+ years, many new players emerged in the space. The fundamentals were appealing, but many underestimated the capital expenditures required and the multitude of operational challenges. Mobile Home Parks can be lucrative, but there are a ton of nuances and speed bumps on the way to stabilization. As many of these players have been unable to achieve their business plans, they're starting to exit their properties. Pasha Esfandiary, Managing Partner and CEO of Evoke Capital, is acquiring parks from these sellers and completing their value-add plans and achieving operational maximization.

Ecommerce has plateaued at 16% of total retail sales. Concurrently, the cost of land, borrowing, and construction has made it prohibitive to build new neighborhood retail centers. As a result, occupancy at existing properties in many markets is in the mid-high 90's and sometimes even 100%. There's a huge demand for space from restaurants, yoga and Pilates studios, gyms, massage clinics, plus other medical providers like dentists, chiropractors and joint clinics.  Todd Nepola, President of Current Capital Real Estate Group, has been buying retail centers in South Florida for 25 years and has generated great wealth for investors. 

It's easy to oversimplify multifamily operations, and to make assumptions about how a property will perform. Countless nuances and details impact property performance, some are controllable, others aren't. Many operators get this wrong, and it costs them dearly. There are hundreds of details that impact how financially successful a property will be. Stacey Hampton, Founder of Asset NOI Consulting, helps multifamily owners achieve greater financial prosperity through evaluating acquisitions and consulting on operations. Stacey helps her clients enhance NOI through increased revenue, lower expenses, and overall optimization.

In some markets, you can buy suburban office property for as low as $10/ft where it costs $200/ft to build. What's more, you don't have to find off-market deals, they're listed publicly on LoopNet, Crexi, and other prominent sites. As workers have moved to the suburbs and left downtown offices, they've chosen to work closer to home. Suburban buildings with one to three person offices in particular are seeing strong tenant demand. As a result, many suburban office buildings are at 90% occupancy.  Ash Patel, a successful discount Value-Add investor, invests in office buildings, flex Industrial, strip retail, and ground up construction. Ash doubles his money on most deals in three to five years. 

In order for a larger multifamily dwelling to perform at its peak, it needs the right leasing personnel and the right maintenance team. The leasing agent creates the first impression of the property and influences the prospective tenant decision to rent at the property. This can make or break the deal out of the gate. On the maintenance side, an ornery repairman can alienate existing tenants and cause them to leave. Andrew Cushman, Founder and Principal of Vantage Point Acquisitions, operates a portfolio of multifamily assets in the Southeast. Andrew has prioritized working hard to optimize daily operations in order to achieve maximum performance of his existing assets.

Most real estate classes require a lot of hands-on daily management that makes or breaks the success of the investments. Nowhere is this more true than multifamily apartment communities. When you're dealing with tenants 24/7, there's always things that need prompt attention.  Ryan Weiss, Principal Broker and Managing Partner at Blue Door Living, has gone from managing 40 units to over 700 units in the past five years and has gotten his clients by word-of-mouth. Ryan is based in Manchester, New Hampshire, an under-supplied market an hour north of Boston. New Hampshire is growing as transplants move there from more expensive Northeastern cities.

Investing in newer multifamily assets is a long-term conservative investment, but returns are low. There's too much money chasing these deals, therefore the market is efficient. If you invest in heavy lift C Class properties, however, the returns are significantly higher. There's far less competition to acquire these assets, and therefor better deals. Amy Rubenstein, CEO of Clear Investment Group, has an incredible track record acquiring and turning around distressed C class properties 300+ units in secondary and tertiary markets and achieving consistent double digit and even triple digit returns for investors. 

3rd party property management can be notoriously difficult and aggravating, but it can be successful if you manage it properly. To make it work, you need rigid processes, actionable metrics, and weekly meetings to hold property managers accountable. Chris Lento, Founder and CEO of EM Capital, has been successful managing properties in other states by finding great property managers that help him execute on his business plans. Chris acquires B Class multifamily properties across emerging markets in the Southeast. More recently, he's begun to focus on newer properties starting with an acquisition of a 2022 build property.

As urban port neighborhoods have been redeveloped over the past few decades into residential and other uses, warehouse developers and tenants have moved to more inland locations. At the same time, ecommerce has created a need for tenants to be closer to their customer bases. These changes, which have created a high demand for inland urban infill spaces, has resulted in great opportunities for investors. Brian Ker, President of Snowball Investments, has built a portfolio of industrial properties in the Tri-State region of New York, Connecticut and New Jersey with proximity and ease of public transportation into Manhattan.

Even in challenging markets, it's hard to find great real estate deals because sellers are always slow to capitulate on price. One asset class, however, that promises steady cash flowing deals is sub-institutional industrial. These properties don't have as large a buyer pool as multifamily or larger properties across other asset classes in general. Jonathan Hayek, Founder of Endurance Properties, has recently acquired cash flowing NNN industrial properties where the tenant is responsible for everything except for the roof and structure. On his most recent deal near Des Moines, it's an Absolute NNN lease where he doesn't even pay for the roof any other expenses.  

The multifamily market has faced major headwinds in many growth markets, but is gradually stabilizing. Occupancy levels are starting to rebound as there's been absorption of new units, although rents are still largely suppressed. Phoenix, one of the country's top growth markets, is finally coming off the bottom with record absorption levels. Jeff Sherman, Principal at FSO Capital Partners, oversees 2500 in Phoenix and other markets in Arizona. Over the past few years, Jeff has been hyper-focused on operations to maximize investor returns. Currently, he's starting to see more opportunities as floating rate maturities are coming due. 

Fundraising for Private Equity and Venture funds has slowed as interest rate have climbed. Stalled exits and reduced distributions have followed. There are 50% fewer venture companies today than just a few years ago. As a result, multiples for acquisition targets have decreased, thereby presenting an opportune time for active funds with capital to acquire companies at attractive prices. Companies in secondary and tertiary markets, in particular, can be very attractive. Mark Flickinger is General Partner and COO of BIP Capital. BIP invests in mid-market early stage companies in the Southeast and Midwest.

Most new businesses fail within their first five years, but investing in a strong franchise system can enhance your odds of success. There are great, recession resistant franchise categories to invest in such as Home Services, Pets, Beauty, Kids, and many others. Investing in a successful franchise mitigates a lot of risk by aligning yourself with a proven concept and a leadership team that teaches you the critical components of a business and how to become successful. Kim Daly, the top franchise consultant in the country for a decade, helps match candidates with vetted franchises that fit their strengths, experience, and personalities.

Although Mobile Home Parks have been great investments over the past couple decades, they have not been immune to the same challenges that other asset classes have faced. These include interest rate escalations plus operating costs such as labor, supplies, and insurance. Despite these headwinds, however, prices have mostly held firm although imminent loan maturities may yield attractive buying opportunities. Jeff Cook, CEO of Cook Properties, is the largest Mobile Home Park operator in the state of New York. Jeff has enjoyed amazing success but has experienced growing pains over the past couple years that have impacted his latest fund. 

Even though prices on multifamily properties have come down 20%-30%, most of these still don't make sense because higher interest rates and increased expenses have more than offset the price decreases. As a result, transaction volume for quality properties in great markets is still low. Brooks Mosier, Principal and co-founder of United Point Capital, is one of the largest buyers of single-family homes in Kansas City and has leveraged these profits into the acquisition of multifamily properties for his own portfolio. Brooks has syndicated his larger deals that require more equity.

To be successful in any niche, you need to find a market inefficiency and a discernible differentiator. Too many sectors within commercial real estate have become commodities as unprecedented volumes of capital have been deployed. One sector that remains relatively inefficient is small balance lending, or “Micro balance loans,” to smaller operators borrowing $200,000 - $1,500,000. Chris Carley, Managing Partner of Kirkland Capital Group, provides loans to this segment of the market where there's far less competition and better returns.

With so much information available, it's easy to get educated on an asset class or an opportunity before investing. Although there's no substitute for hands-on experience, you can still reduce risk through education. Steffany Boldrini, Principal at Monte Carlo Real Estate Investments, invested in car washes in North Texas and learned the hard way that she didn't know what she didn't know. Six years later, Steffany is recouping her investment, but wishes she would have learned more about the asset class before jumping in. More recently, Steffany has invested in a 19 unit condo conversion in Dallas and a ground-up Self Storage development in Stockton, CA.

Despite some of the challenges that have faced multifamily in the past few years, some markets have been affected less than others. The Midwest in particular has fared better than most other parts of the country. There are many markets like Cincinnati, Cleveland, Louisville, and many others that have experienced minimal new construction combined with consistent renter demand. As a result, these markets have maintained high occupancy rates and fewer issues finding quality tenants. John Casmon, Managing Partner at Casmon Capital Group, focuses on buying and operating workforce multifamily within a two-hour radius of his home in Cincinnati.

Over the past several years, most of the returns in real estate have been generated because of declining interest rates and cap rates. If you just held on to properties long enough, even without successfully executing on a business plan, you fared well. However, an oversupply of capital resulted in overly unrealistic underwriting for both lenders and operators, and distress has ensued. In more recent years, the tide has changed, and a much higher degree of expertise is required to be successful. Jack Cohen, Managing Director of ArrowMark Partners, and prior owner of Cohen Financial, has a 40+ career in commercial real estate lending and investing, and was one of the largest commercial real estate lenders in the nation. 

Not only has commercial real estate been faced with escalating borrowing costs and lower rents, but it has also been challenged by rising expenses, especially taxes and insurance. In this environment, it's become essential for survival to aggressively manage these expenses. Matt Buchalski, Head of Sales for Ownwell, helps property owners lower these costly line items in order to protect and increase their NOI and valuations. Ownwell serves both commercial property owners across all asset classes plus hundreds of thousands of individual homeowners.

The world of alternative investing can generate diversification, cash flow and tax efficiency. It can also be opaque and risky and has created massive losses for uninitiated investors. Unlike public companies, there's a far lower regulatory threshold for private companies to provide transparency to investors. The key to being successful in this world is being able to assess risk quantitatively and qualitatively. Leyla Kunimoto, Co-founder of Accredited Investor Insights, is a successful investor in both the public and private markets and creates valuable content for passive retail investors.

One asset class that still has great deals on sub-institutional properties is Mobile Home Parks. Although larger parks near major metros are being acquired by REITs, Private Equity, and other institutions, parks with fewer than 100 sites are being acquired by smaller investors with far less competition. Smaller parks in secondary and tertiary markets offer great buying opportunities with value-add components that result in tremendous value and cash flow. Ferd Niemann IV, Mobile Home Park lawyer and investor, has acquired 25 parks in mostly small markets across five Midwestern states. 

Although the margins are thin in Multifamily, there are niches that provide outsized returns without undue risk. One example is government-sponsored affordable housing. By creating public-private partnerships, it takes a lot of risk off the table, Jesse Sells, Co-Founder and COO of Impact Growth Capital, recently began a partnership with the Southern Nevada Regional Housing Authority for a $300 million development to develop 600 new Multifamily units in Las Vagas. Jesse, with his brother Sam, are raising a $300 million fund to create similar opportunities in other similarly growing MSA's.

Real Estate is a block-to-block business, especially multifamily. There are too many nuances involved to manage multifamily without boots on the ground. This is where a lot of operators went wrong over the past several years. In addition to buying in markets they didn't know, many inexperienced operators followed the herd by overbidding on properties and used risky debt to make deals pencil. Most of these operators and their investors are now in a world of hurt. Bruce Fraser, Managing Partner of Elkhorn Capital Partners, avoided these overpriced assets and created a smart niche of buying highly distressed properties at deep discounts. As a result, his properties are doing extremely well. Elkhorn Capital oversees over 2000 units across Tulsa and Oklahoma City and plans on further expansion into these markets.

Like many other markets, the Dallas-Ft Worth market got oversaturated with new apartments over the last couple years. As the torrent job and population growth continues to flourish, however, new supply is getting absorbed, even C Class properties. Occupancy in these buildings is increasing because there's a shortage of workforce housing. The key is being able to manage these properties effectively. Jimmy Edwards, Founder and Director of Acquisitions at High Five Group, has excelled at repositioning Class C assets.