How I Closed $20 Million in 100 Days, After Buying Nothing in 2020
In early November, we were able to close on our latest acquisition, 104 units in Louisville, KY. This marks our second acquisition within 100 days, after closing on 81 units in late July. Considering we did $0 in apartment acquisitions in 2020, it may be surprising that we were able to close $20 million worth of apartments within just over three months.
This was not by design, but we did make some key changes to start seeing more consistent results. We were intentional about the kind of deals we wanted to close moving forward and this required a revised approach along with a renewed strategy. As I look back on these changes, there were three things that were key to seeing better results as apartment investors.
Tom Brady has a throwing coach. Steph Curry has a shooting coach. Serena Williams has a swing coach. And while I’ve had a real estate coach and other advisors for over four years, I didn’t feel like I needed a coach. After all, I had been a general partner in close to $90 million in apartments, hosted a number-one rated multifamily podcast, and even coached other successful multifamily investors.
But I was missing something, and it showed in the results. It was easy to assume others were simply overpaying for deals. However, this would be equivalent to Brady relenting to Father Time, Curry submitting to double teams, or Serena caving to the pressures of motherhood. Just as these greats rely on their coaches to overcome these obstacles, I had to leverage my advisors to seek guidance.
It’s not enough to have a coach or mentor, but you actually have to engage them with your challenges. My advisors helped me identify holes in my game that allowed me to take corrective action.
It’s a cop-out to say the market is just too hot or too competitive. The truth is there are deals to be made in every market. Yes, it may be more competitive today than it was five years ago, but every market faces tough competition when it provides so many benefits.
Investors like myself have been preaching the perks of apartment investing and people have been listening. This has led to increased demand. Current owners have no real motivation to sell, and this led to limited supply. The result is higher prices that miss the return expectations for most investors — and a lot of frustration. Instead of blaming the market for a lack of deals, successful investors are finding problems and creating their own deals.
One way to create a deal is to find a property that is being mismanaged or mis-marketed. Mismanaged properties are easy to spot. These are the ones where rents and occupancy are well below market averages. Mis-marketed properties are harder to find. This can include properties that are unlisted, expired listings, or missing key details that would entice buyers.
There are mismanaged and mis-marketed properties in every market. These properties just need an investor to create a deal.
…with your actions — not with your underwriting. There’s a difference between being busy and being productive. We certainly had been busy over the last two years. We spent a lot of time talking to brokers, investors, and vendors. We analyzed deals each week and made offers when we felt we had a competitive bid. We made “best and final” multiple times, but there seemed to always be someone willing to pay more or offer better terms than us.
Instead of stretching on our offer, we decided to take a different approach. I call it being patiently aggressive.
Patient with the results. Aggressive with the actions.
We started by casting a wider net. This included an approach to expand our markets, see more properties, analyze more deals, and make more offers. We also connected with more investors and potential partners. And while we got aggressive with our daily actions, we didn’t force deals. Instead, we remained patient in the results.
With the insight from my advisors, a focus on creating (not finding) deals, and our patiently aggressive approach, we came across more opportunities. This ultimately led to the acquisition of our 81-unit and 104-unit properties within 100 days of each other. And this approach could help lead you to your next deal.
If you are looking to spark your apartment investing, review these factors and see where you might have blind spots. Comment below to tell us if this was helpful and share more about what’s holding you back on your investing journey.
About the Author:
John Casmon has helped families invest passively in over $90 million worth of apartments. He is also the host of the #1 rated multifamily podcast, Target Market Insights: Multifamily + Marketing. Prior to multifamily, John was a marketing executive overseeing campaigns for Buick, Nike, Coors Light, and Mtn Dew: casmoncapital.com
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.