Cameron Pimm: The Secret to Scaling to 4,000+ Apartment Doors

Real Estate Maverick Unveils Multifamily Investing Mastery Secrets: Dive into this episode of The Real Estate Entrepreneur Podcast where we meet Cameron Pimm, a visionary investor who has navigated the complex world of real estate and scaled his investment portfolio to over 4,000 doors. His journey is a masterclass on how to capitalize on potential opportunities and navigate through market corrections with confidence. Discover Cameron's secrets to building and financing future-proof investments... Welcome Cameron, to The Gould Mine...

In this episode of "The Gould Mine," Cameron Pimm shares insights on achieving success through conservative underwriting and effective property management. Starting in Atlanta, Cameron learned the importance of underpromising and overdelivering to investors, focusing on the worst-case scenarios to ensure model returns.

He highlights the potential in repositioning distressed multifamily properties for workforce housing, utilizing design-focused renovations to create value. With a cautious eye on market trends, Cameron discusses preparing for possible corrections and the importance of building and financing now for future gains.

The key to Cameron’s strategy is hands-on management, leveraging strong team communication, and using metrics to guide business decisions. He emphasizes the importance of regular site visits and employee empowerment for property value improvement. Cameron also touches on investing in landlord-friendly markets and the critical role of building trust with investors to navigate the competitive landscape of multifamily housing.

Cameron's approach underlines the necessity of strategic planning, conservative investment practices, and the value of personal involvement in property management for long-term real estate success.


Follow Cameron:
LinkedIn: https://bit.ly/3UG25UO
Facebook: https://bit.ly/3UEghOc

Follow Me:
LinkedIn: https://bit.ly/3L2sTc7
Instagram: https://bit.ly/3soYxtW

Transcript

•  What's up gold miners in today's episode. We welcome to the show Cameron Pimm a principal at ston Mark Landings a value ad multif Family Investment Group located in Las Vegas and Cameron and I geek out a little bit at the beginning and then right after geeking out a little bit we Dive Right into Cameron's practices and managing investor expectations through conservative underwriting practices as well as Hands-On management what all does that entail well. Cameron breaks it down for us step by step. No stone is left unturned in the details in this episode. Later on in the episode. Cameron shares what to look for as an investor in the different areas that you're potentially going to be investing in and then finally Cameron covers what he expects to see in 2024 and how he is positioning his company to capture the potential upcoming opportunities. Cameron brings a wealth of knowledge experience and wisdom to this episode so without further Ado everyone. Let's welcome to the show Cameron Pim Cameron welcome to the gold mine thank you. Danny happy to be here appreciate. The invite absolutely man well you know I I I've been I've been seeing some of the stuff online. Obviously you've been on. Some shows had a chance to look at your Linked In and and kind of get caught up so it. It looks like a you've been doing this. For a long time B it looks like you've had quite the path into what you're doing right now and so I'd love for you to kind of take us on the jury you know where where it all began and how you got to where you are today because obviously like one doesn't get to where you are without. Uh. You know a lot of steps so I'd love to hear the journey uh for for myself and for everyone back at home. Sure. Uh my real estate Journey started working with local investors and developers in Atlanta. Uh really got a a great education. I' I'd say a Masters or PhD from uh you know the leaders in in those local Industries. Uh learn the ins and outs of how they structured deals how they operated them post closing and you know and in working with them. I started thinking well you know I I I understand this. I think I can go out and put some deals together of my own and make them work and so I started doing that and it was uh you know. It was like pushing a boulder up a hill for a long time trying to get your first deal done. That was just it was. It took years and finally we got our first deal done. We had a single in investor. The deal went well. Uh we exited within a year turned that into our next deal that had two investors uh turned that in about a year and a half and it it snowballed from there uh as as you know communicating to my network of the successes. We were having uh not only with my day job but with with these Investments and you know what was interesting is everybody wants to invest in real estate because they they've been told. It is such a safe place for your money. It's the best place to invest but most of them don't want the headache of dealing with actually owning the asset or being the landlord themselves. The late night calls you know along the line of late night calls even as a you know a more professional and established job. Now we all know that the issues that are coming up are not coming up 9 to5 when you have on-site staff. The issues come up after everybody's gone home for the evening or the weekend and those are the calls where you're trying to bring your team in uh on call staff to resolve the issue. So you know we. We took that on for our friends and family and then scaled that up into the next step was working with some family offices and uh local family offices and then doing joint ventures with some local groups that were established and uh you know we we had great success continued success um one of the secrets to that I think was one under promising on returns and expectations. You know having enough that people are excited to invest and want to do it yeah but then exceeding their expectations so that you are the uh the positive topic of conversation at dinner or cocktail parties and so you know we've we've certainly done that we've also we're very proud that we've never lost investor money and I think that goes to our conservative underwriting nature uh as well as our Hands-On Asset Management approach so let's talk. Let's let's just dive right into it. You know um when you talk about conservative underwriting because here's the thing right like dude. I can't tell you how many times I've heard that right. It's like oh we you know we have a conservative underwriting and like we're super Hands-On. Everyone says that let's talk details here right so conservative underwriting. What is it about your underwriting or what do you do specifically when you're analyzing these properties to to hedge and to and to create a conservative um. Uh output yeah. You know there's there's a number of inputs to a Prof Forma that drastically influence the outcome of an investment. It's your purchase price. It's your cost of capex. It's the time frame it takes to do capex. It's your projected stabilized rents uh your Opex um and then your exit cap and So within all of those inputs we can influence pretty much all of those with the exception of your exit cap and so what we want to do is pad those that we have control over and even pad the exit cap uh which I'll talk about in a second. But for example if I think that our stabilized renovated rents are $1,500 a month I'm probably going to model 1,400 um on the capex side of things we're going to take the highest bid. We're also going to add a contingency to it um and then we're also going to add time to the to the timeline that was proposed or or uh in the bid because when has a construction project ever actually delivered on time right and so your delivery of things how long it takes how long you're you're floating in a in construction debt um. All of those things have a have a significant impact into available cash and the success of your project uh and then as you're looking at your your liquidity event. Whether that's a you know the plan is to refinance or to sell that exit. Cap is a huge influence on the success of a deal and so we typically like to underwrite for the worst case scenario and show an expansion in cap rate. Even if for example. Nowadays maybe cap rates come down if interest rates come down but I still think it's prudent to show that uh an expanding cap rate and if it doesn't and the deal still works and cap rates are either at stay. The same or compress you you've really done well and your investors are going to be very happy. You've hit a home run on that one right but you know the reality is is that nothing ever goes to plan particularly with real estate and value ad real estate at that so having all of these conservative estimates in in place kind of give you. A margin of error that allows you to still achieve your you know model returns. So when we talk about conservative underwriting we talk about like the the projections that you're and and by the way I totally agree like especially on the exit cap. I mean that can make or break a deal right like uh you you you underwrite too aggressively there and all of a sudden you know you you're losing money right so because that's yeah exactly you're riding a check to get out of the deal yeah. So with with the conservative underwriting are you basing your lpir off of the conservative underwriting models or are you using like a blend of like conservative and like best case scenario or what are you using the conservative model. For is it is it mostly to hedge and make sure like hey. If if if we if if hit really hits the fan are we still like in the green is it like for that or is it to like kind of walk me through what the what the thought process is there yeah. There's certainly that um what's what's the worst case scenario that you know what are your break even scenarios and we have sensitivities built into our model uh between occupancy. Cap rates Etc um but what we are showing. Investors is a conservative estimate of what we think you know really. We think it's going to be. You call it a a project level IR of 25% but what we're showing our investors and we know that it'll still hit their return. Criteria is probably a 20 to 22 project level ir and so that creates an added cushion uh for things to go wrong whether they are within or out of our control yeah.
•  That makes uh that makes sense so. That's I really highle stuff right so there might be someone that's like sitting back and I'm like what is going on here. What are they talking about well. You know this is what happens when you get two guys that enjoy this and we're going to nerd out for a little bit. Here all right me and you C we're gonna have some fun today. That's right I love it and uh we'll keep we'll keep it high level. So I I I really I'm curious right because I know that like your your target asset class right now and correct me if I'm wrong by the way but the Target. Uh investment that you're looking for is some sort of distressed uh multif family that you can reposition in the marketplace yeah that's right um and and in the past what it's been has been a maybe. It's a c to B minus asset that we can reposition to a bb+ with an eye towards what we call working class achievable um. A lot of others may just call that Workforce housing but really um. We're we're serving the the backbones of our community. Those that were working in health care Education Service Providers um some of which are renters by choice and we tend to you know we want to be very close to employment and entertainment hubs. We buy an underp positioned asset and then bring it up to its potential where people feel proud to live there and there's a stickiness for those whether they're renters you know there's plenty of other options in many markets or uh you know maybe maybe they are looking at a home but they're happy with where they're living and then you know. Maybe they put that purchase off for a little bit. Just wait to see what happens right. So we tend to do a design focused renovation that looks a little different than kind of the standard that everybody else is doing um and it it it. It tends to have the same finishes as an a class highrise perhaps even down the street. It's just several hundred dollar or more less a month to the to the renter. So I think the the other potential opportunity that's coming up and it. It depends on what happens with all these maturing loans and how the banks handle it and and their ability to be forgiving is to buy some really high quality assets um way below replacement cost um that maybe a lighter value ad or it or there's a Val. There's a value add component but perhaps we're stepping up into the B+ a minus uh class uh given given opportunities. But we'll see what what makes its way uh to Market I uh that is I guess. That's the the 2024 burning question. Right is is how are the banks GNA handle the loan maturities. What's gonna happen with you know the owners that are faced with having to pay the piper in some way shape or form and it's um I've heard a variety of different opinions on this. Let's say that let's go to the extreme let's say that the banks handle it. I guess uh in a way in which buyers would be the beneficiaries um. What what's the game plan there right like how how are you approaching that are you going straight to to the banks. Uh you have relationships obviously um with with. Some banks are you or you um. How are you going to navigate that to to put yourself in the best position. To get these deals yeah. It's a mixed bag. It. It's definitely going to the lenders. But it's also going to sellers that we think may have uh an issue achieving a refinance without having to put equity in. So we're we're kind of hitting it from both ends and how we're sourcing that is also mixed bag. It's through our existing relationships with lenders servicers. Other sponsors perhaps investors that have told us there's some some distressed assets out there or the sponsors themselves. Uh we're also leveraging online databases to identify loans coming due that uh are not within the next call. It 12 months that are are not achieving a 1.0 debt service coverage ratio um that's going to be that's looking at a cash and refi at best or it could be looking at a a bank taking it back. I guess the best case. Scenario would actually be that the bank works with them if they're getting close and they see a path to profitability or or neut neutrality uh. It seems that the banks don't really want a ton of these assets they don't want to take them back like they did the last cycle so what we've seen so far has been a very Cooperative nature and it's prevented further value erosion and there has been value erosion simply from interest rates blowing out so quickly and cap rates following suit. But you know the next big threat to valuations would be if there is a big wave of deals taken back and at that point everybody's buying at the loan balance or perhaps below that and that's another if you think about it. It's a 20 25% plus uh discount from what a sponsor bought it for and and then if it's below the lending the loan amount. That's that's a significant discount that those are now the new comps right. So it's bringing prices back down um. I I can think of a couple assets that we've been watching that have been taken back by Banks and the banks are upside down by 5 million plus really and they're trying to solve it for themselves. But I'm I'm just not sure that those are that they're up for the task. It's going to take quite some time and I don't know how much time they have so you know we're waiting the wing saying hi. We're we're still here. We're the right buyer for you you know us. This is this is our bread and butter and we'd love to take it off your hands. But it's got to be at the right price. Sure there's been a lot of specula. I mean this whole last year. You know I I I kept saying it. It's like almost every week.
•  It's like the next 18 to 24 months the next 18 to 24 months the next 18 to 24 months that was six months ago and it still feels like I'm seeing the next 18 to 24 months. So it just feels like we're just delaying the inevitable. Are we very well could be or you know there's two scenarios I was thinking of that fixes. This one is if given enough time. Then the values do catch up with these aggressive underwriting but it's going to take more time years. The other is a wave of foreclosures that resets values. I mean pricing got very frothy when money was free and how do you justify you know 300,000 Plus for a 60s vintage asset in Salt Lake or in Atlanta. Um you know those just it's just not the pricing of them current day. Or even so I think those are the two scenarios for or getting back to a a market at equilibrium where we can transact in a normal uh yeah normal Pace yeah no I I um I think it's going to be super fascinating to see what happens man. I mean look. We're I'm kind of preparing for any of the above look at the end of the day. Like the all this could blow over. We could end up just in two years having never really truly experienced like any sort of like major commercial crash or re you know correction. I feel like it's. It's already been happening. You know uh read the Tre reports and everything you start to see. Like there are you know a lot more people uh you know going into special servicing. There's a lot more defaults and everything that are happening right now. So it's happening. The question is as to your points like how are the banks going to handle it and I think that that's kind of like the million-dollar question because you're right like no like no one wants to no one wants to like foreclose on a bunch of these that's just going that's just going to ruin them right. This is going to ruin the bank and and um so it it will be interesting to see how everything shakes out and um I guess it'll be a fun ride. However yeah you you know the other thing that you got me thinking where you said by 2025. 2026. Maybe this All Passes without Calamity and I honestly think call at late 25 26 27 I think there's a great opportunity for appreciation again and the reason for that is we already short in housing right. There's been a big wave the last couple of years that got financed a couple years ago when when land was cheaper uh construction costs were cheaper. Materials were cheaper and interest. Rates were lower that for the most part there are very few development deals that are getting done now and so the wave of Supply that is holding back rents and value values will have pretty much delivered and been absorbed by renters. By the end of 25 26 and so I I see an uptick in demand again. Um I see concessions probably uh going away or being drastically reduced and I think you get back to you know a a good period for landlords where there's value creation. There's rent appreciation Etc. What do you have to say that people that say multif family is oversaturated. I think it is in certain ways and in certain markets. Uh I think a lot of a class has been built in desirable sunb belt markets and it I think it's going to take a little while for those to be absorbed um. But I think they will they're growing markets because there's jobs there's higher education. There's a an appealing lifestyle. There's a lower cost of living so it's just this giant wave of Supply. That's making it look saturated um and you know time time will take care of that as more more people move to you know Phoenix and Nashville and Austin and Atlanta you touched on something right now that I think is worth like re-exploring and it it's funny because like everyone says now is a horrible time to build and and I've been doing a lot of like deep like thought about this like a like just brain exercise wouldn't now be the best time to start developing property. I think so because you're not going to have a lot of new A-Class product that you're competing against uh in 26 or 27 now is a difficult time to build and and what I mean by that. It's difficult to get a project financed and off the ground or shovels in the ground um but yeah there's a lot of people that there's a whole strategy of building into either a recession or you know a downtime and in construction uh and and there's a lot of favorable variables that come with that um to Circle. Back on your your question. About is the multif family space saturated I touched on it. It's a class that's all you can build. It's very difficult to build Workforce housing so what you're really doing. It's a competitive space but what you're doing is in order to create Workforce housing you're just waiting for newer product to age to a point that it now becomes affordable for many. So I I think there's plenty of demand in the C and b space. Uh particularly B you know cuz B is a little more uh quality renter quality housing. It's just not your either brand new uh WAP product or or high-rise product. That's highly amenitized yeah. You still have amenities. They're just perhaps older and need a refresh or perhaps they've recently been refreshed but they're still at a disc to the a class yeah because you know as as as I was you know just kind of putting a bow on this conversation. Here I um as you might know might not know I I focus on the hotels uh on the hotel sector and you know there's there's so like everyone said don't don't build. Don't build don't build and I'm like hold on a second everyone saying don't build.
•  So I'm thinking now should be the time to build because if we build now then that means we should be uh up and running by 26 27 and at that point we'll have an entire cycle you get to ride the asset one entire like a brand new asset for an entire cycle and I was like that seems pretty lucrative if you can get the financing in order and if you can as you said get it off the ground because that's obviously the most difficult part right now right. But it's a it's an interesting thought um and and you know even just talking with you. Now. I'm like wow that seems like almost painfully like too obvious it's like painfully obvious but like I think the fin I think the bit financing is the biggest hurdle for people right now when you know in trying to you know turn that into a reality yeah that and and Equity is equally cautious as well. So you know if you have great Equity relationships um then. Perhaps you can get that done I think it's the really established sponsors that have the relationships with lenders and Equity that that will be able to build during this time and they will reap the benefits of it um. I always say to to uh our investors is I I look at this period as we are we are catching the wave as it crashes and investing now and going forward for the next couple of years is allowing us to kind of ride that wave back up the next cycle and so whether that's through development or buying existing assets you know you still have to buy at the right basis. But that's where I think we are. I want to go back to to your Hands-On management right because we talked about conservative underwriting Hands-On management what does that mean right in terms of like like daily. Operational um habits and tendencies we the the principles at Stow Mark Landing. We have two weekly calls with our sight level teams. Uh one is related to overall operations challenges they're seeing how are we doing with turning units. Where are we with Staffing um are we having any issues with delinquency Etc. It also creates a relationship with our site level staff and we always tell them like the property manager. Hey you're you're the CEO of a multi-million dollar asset and treated as such you're. You're the leader here oh yeah you're leading a team and and you know your property manager and your maintenance supervisor. They drive a lot of value for for an apartment asset um you can have an exceptional Buy but if you have a subpar team that asset quickly follows suit so you know we do that we also have a weekly pricing call where we're we're talking with our property manager and leasing team as well as the the pricing uh Team where we're understanding our comps. We're understanding where where which way is pricing. Going are there concessions creeping in the market. What are what's overall Market occupancy and and what does this tool say to do with pricing and we're not just blindly following that tool. We're following our own intuition. We're we're we're taking cues from our sight level team who's giving us feedback on what they're seeing in the market. What prospects are are saying uh as it relates to pricing or concessions or perhaps the product as a whole and and things that could be improved um and we take we take action with that. You know the other thing I think with Hands-On management is there there's a lot of metrics that can tell you if the business plan is working like your return on renovation do you need to tweak it uh because you're not hitting the ROI that you thought you would in your pro forma or could we still hit that Roi but by you know maybe we don't need a certain feature that costs more there's a more cost-effective way of doing that that maybe maybe it just wasn't valued in the market and you don't need to spend that money to get that rent um. It will also tell you if you have the right team in place are turns happening within the prescribed time frame. How quickly are you turning renovation units do those units look presentable when prospects come through uh what is your lead to. Lease ratio so you're spending all this money. Marketing is it hitting the right target market or is the market not getting what they expected from what they saw online when they meet the on-site or when they see. The product is it not clean uh. You know there's there's a lot of things that can tell you from afar if things are working well or if they're not and those are the things that we focus on to ensure that our assets are running. Smoothly makes a lot of sense and one thing that I want to highlight. There you know that the the the by weekly calls to uh on-site staff. You know it's. It's. It's funny how like the like tiny hinges. My coach says this tiny hinges swing big doors you. It's like this like the the simple things that kind of you know create the the most return and um I would have to imagine that even that consistent presence just keeps everyone on task right like if if you. If you're far.
•  If absent owner is gonna you know if if you do a once a month kind of call like they're going to show up once a month right. But if you're showing up every week twice a week like it keeps the train moving I would have to imagine yeah right and having regular site visits where you know sometimes people have been there a long time they turn a blind eye to certain things and so you're saying oh what what's going on with this dead plant material in the Planters or the you know. When's the last time the the grass was cut are we on top of our landscaper um. One of the most recent acquisition we bought be it 14 16 months ago. Those were the opportunities that we saw they were operational opportuni ities because the presentation that if I showed up as a prospective renter I would immediately think that this place has run down and it isn't warranted for the price that they were asking and it was. Those are the things that we love to buy the assets the deals that are underp positioned and it doesn't take a huge investment on in some of those things to move the needle. It's just paying attention and holding teams accountable also training your team to look through your eyes and explaining to them how saving $2,000 a month how that affects the value you know a lot of times site teams. Property managers aren't necessarily aware as to how a a $24,000 a year savings at at a six cap affects your overall value and it's eye opening to them and they're going wow I can really affect value here very um so interesting. I you know I I I think there's just a lot of collaboration that can be done to ensure success. That's a really good point and actually I I I think for anyone. Who's you know either a sponsor GP or you're you just manage or own your own properties like I think that is a really great nugget there that she kind of Tu away. It's interesting you know one of my uh one of my business coaches uh in encouraged me to open up my p&l to my employees CU. For years I I like literally what would just kind of you know the kimono right. Like no one could see underneath the kimono. It's weird what happens right when you let people see inside the Comm because all of a sudden you can start you actually you can have more transparent conversations with them you you can keep it. You can keep it real right and and when you can keep it real and then also point to point to things in the p&l like hey. This is what you know you influence this this this and this and that's what impacts our bottom line whether it be on you know on the revenue side of things or on the expense side of things. The truth is is that a lot of these PE you know a lot of employees we know but they don't know and if we don't tell them so that makes a lot of sense to me man that makes that makes a lot of sense to me. And I think that's Spar yeah well. It also aligns you as to the why right. It's not just do it because I say so it's do it because this is why this is how we extract value. This is why noi is so important. This is why we tie your bonus to no. It's not just being. You know a greedy landlord as some people like to label landlords. It's this is how you affect value for your investors 100%. And when your bonus is TI why it affects value for yourself too yeah well. Also I think like an added thing there that that might not be so obvious to people is that you know when when you're running whether it be a multif family or you know hotels or or whatever you're running uh and you have employees that are directly responsible for the management and and for the the you know the operation of of the asset. It's like if you do a good job. You're not just you know if you do a good job as a leader. You're actually not just like helping them understand like how they're driving revenue or how they're driving like uh the value of the property. You're also teaching them like basic business principles that maybe a lot of them don't like have no awareness of beforehand you know and like that translates like I would imagine I don't know I'm just like spitballing with you here Cameron but like I would imagine that like some of your people have have gone off and like you know bought their own investor properties and things like that probably because of the Hands-On like direct mentorship that you gave them that like got them to understand and think about things in a different way yeah and I mean that's the best compliment right is that you've actually been able to launch somebody else's career different than they thought they were doing or maybe they wanted to. But you were able to contribute to their success uh and and their growth as a professional and potentially a person as well. I love that and on that same topic you know let's talk about you know people who that kind of transitioning into investing or people that want to get involved and and have not done it before how would you recommend that someone get their start you know if they're newer to real estate investing in general what would what would your recommendation be I would consume all information you can and there is so much information now whether that's podcasts like this um courses on YouTube as far as you know how do you underwrite a deal. How do you Val evaluate that what are valuations um I would read investment books I would go to meetups would find mentors in the space that of where I want to be and ask them if I could buy them lunch and before you step into investing. I think you really need to understand what you're getting into and be able to ask the right questions. I think you want to be able to whether you're the sponsor or just an LP I think you've got to be able to underwrite the deal yourself and understand it. Do. These rent comps make sense do the sales. Comps make sense not just the sales comp at acquisition but where are we trying to get to are there comps that support that um. So I I think you know education is key um and then taking action. You cannot wait for the right time CU. There's never the right time it is never convenient to start a business or start investing on your own. It just it's just either you want to do it or you don't I I can tell you I wish I figured out how to get it done sooner I certainly tried to uh you know like I said I was pushing that Boulder a hill to get my first deal done. But there are great benefits to being a real estate investor um from a from professional standpoint from a tax benefit standpoint and from just uh the freedom within your personal life and and flexibility. You have Investments all over the US yeah. Yes well. We have we've invested uh from the east coast to the West Coast out to uh Las Vegas. Our current Holdings are in Atlanta and Charleston okay so we saw we recently got sold a number of our Assets in kind of preparation for potential opportunity and that not only freed up Capital but it also freed up our time to focus on the Acquisitions of new great assets love it thinking ahead. I love it um yeah. If you're a new investor if you were a new investor where would you invest today would it be. Atlanta would it be Charleston or would be somewhere else um you know I think you have to invest in a market that you understand so maybe that's geographically or maybe you've taken the time to research a market that you perhaps don't live in. But you like you know all the metrics that make sense for you right but Sunbelt both Atlanta and Charleston are great markets to be in um. I would tell you you need to understand processes. There too for example in in a couple Metro counties that make up kind of in town Atlanta ulton and deab. It's really difficult to evict right. Now I mean you're talking 12 months plus not because of a change in law but just because of how backed up. These courts are and so you have to approach a deal with caution knowing that that debt is not going to get that much better because these tenants know it as well on the flip side. If you go to Charleston somebody doesn't pay rent. It takes 30 45 days right so that's one metric that can significantly impact the value of your asset. Particularly if you're doing a value ad where you're starting to non-renew older tenants or or what would I call it. Uh you know the the previous tenants where you know maybe Legacy tenants that may not fit the profile for the next refinance or or for the next positioning of an asset right like they're not going to be able to afford it um or perhaps. Their behaviors on on site are also not going to fit where you're going with that asset M um and that's the reality for some of the assets that we buy so and that's part of our repositioning. But if you can't get. Bad actors out that's going to slow down your your entire process and it could become a challenge because you could get some sort of rent strike.
•  Like you see in some of these other uh in in some Western markets like in California what are you trying to say Cameron no um. So. I think so I think it's I think it's a. It's a it's a market knowledge thing and a comfortability. But I do think investing in sunb and Mountain West markets where you have positive immigration driven by job growth and quality of life also affordability. That's a great start um. A lot of people are finding yield in the Midwest and maybe you don't get those huge. Swings from Wild rent increases or C rate compression but it is steady and predictable um. It's we're not in midwestern markets. We focus on Sun Belt and Mountain West but you know I've talked to a lot of people with that strategy and they like it the Midwest for that reason and it makes sense yeah kind of add to that I mean whenever anyone ask me like where do you want to buy your hotels and I said anywhere but California just like put me anywhere except for California and you know politics aside. It's just um to your point right like uh landlord. Friendly. Policies are uh essential if you're going to be investing in real estate. Like you know significant amounts of real estate if a primary residence that you turn into an investment property all right whatever like go live your life. But I think it's a very real a very real uh I think social issue that we're going to be faced with over the next decade. Uh plus maybe of how do we strike this balance where you know like you said before like landlords are like like how do we like rid ourselves of like this like uh like oh word like demons and we're like we're bad people and everything. It's just like okay well without us how you know how else anyways. We're not even G gonna go down that road Cameron yeah that's the version of this podcast buddy exactly oh man um you talked about Equity being hard to come by nowadays. I'm curious you know when you are getting started on sure on the come up. Equity was also hard to come by and for different reasons obviously um. So when you're just getting started you know hard to get people to investors to trust you how did you you said the first couple deals you did with like one two investors. So how did you overcome those initial hurdles and and and what were the strategies that you used to to get investors to believe in Cameron pin yeah. You know I was kind of sharing our successes with our friends family. Our Network colleagues Etc. Um and then once we started getting more and more investors we treated them like gold. You have a question please call me anytime call me on the weekend I love to talk shop. So anytime you want to talk about it. I'm happy to pick up the phone um. You know. I think it's having regular communication monthly updates as to where you are showing the progress if you're doing renovations. Photo progress um having more robust quarterly updates but a lot of it is communication and building trust and a willingness to listen and answer questions. I mean it it. I've had people approach me to invest and it's scary when it's not in my control right and I do that plenty of times. But it's a really nice reminder for me that this may not be every day for somebody. And it's it's a big step to write somebody a check whether that's 25,000 or right that's they're putting a lot of trust in you. So I think you need to to always remember that somebody has believed in you they're investing just as much in you as they're investing in the asset yeah and and that's that's that's true for retail investors like a a friend or a family member and it's also true for private Equity firms. They want to see your track record who you are they want to talk to you they want understand if not if but when something doesn't go to plan are you the type of person that can solve it. Do you have the experience do you have the mentality to do that and they right to do that when you're having those initial conversations because obviously like. At first well let's back up for a second so from what I'm hearing or for what I'm gathering is that you had done a certain amount of deals before you went out and and looked for investors correct we looked for investors from the start. We just didn't have money um you know we were young didn't have much of our own Capital but we had um you know we. We certainly had plenty of Sweat Equity to offer um and since then you know we've grown and we we invest our. We always invest alongside our investors so if it hurts for us. If it hurts for our investors. It's going to hurt for us too but um yeah. You know now it's investing alongside them and now the challenge is. It's not so much finding the investors anymore. Uh I think there's plenty of dry powder on the sidelines uh with private equity and family offes. It's finding the right deals now because now those are few and far between yeah. It's true. It's when there's when there's plenty of deals not a lot of capital when there's not a lot of capital. There's plenty of deals yeah makes sense so uh just a quick uh side. Note here a question is are you mainly primarily running uh a fund model now uh at your firm or is it. Now more are you doing like more syndicated deals uh versus F like how do you how do you structure your deals yeah. We raised a cgp fund to kind of keep our retail investors uh involved with us and growing with us. It also allows us to scale up if there's a huge wave of um of opportunities that come up due to debt maturities like we had been talking about um but uh and then we're going to pair that with family office private equity and the lp position gotcha and what we realize you know we we had the realization at nmhc. The start of 2023 is there's a lot of money on the sidelines waiting for the right opportunity. So how do we scale up and be prepared to take advantage of that because being a sponsor is also expensive. You know we're investing alongside in the KB fund. We have our own money in there. We'll also have our own money if we do a deal outside of that fund too. So it's we're really looking at two different Vehicles. So it would be one off deals where it's just the GPS within our group and then the other one that'll fit within that fund that CP fund structure fit the parameters of those yeah that's actually really interesting um. I haven't heard of a lot of people doing that. But I think that's a great way to kind of involve everyone that you now have access to because yeah you know like I think one of the things that one of the challenges that I'm sure that you ran into at some point was like man. These deals are so big that like the guys that got us here really aren't going to get us there right and uh yeah yeah it it. It's a way to keep them investing with somebody that they know and trust and um I I yeah. I wouldn't want to outgrow them yeah right that that's um that's brilliant man I I really like that idea and it's actually something that I had been thinking about too is like hey like when this happens right um. How are you going to keep people involved uh that that's actually a really awesome ideas so um that's great well. If if you ever need a road map for that feel free to call me. We we've done the brain damage on it so happy to be apprciate that brother appreciate that you know we're coming up on time here. So I want to make sure that uh we we touch on on some uh a couple of you know last minute points here correct me. If I'm wrong I could be totally off base here.
•  But I recall you saying on a podcast um or remember hearing you on a podcast saying that you you you properties that you can buy at a 20% discount am I wrong or is that something that you said we we certainly do that. But we also look for rents to be about the in place rents to be 20 at a 20% discount to where we think we can get our renovated rents okay. In addition to that in our workingclass achievable model we're looking to get those renovated or stabilized rents. We're very mindful of what the median household income is for the area and so we want it to be within what the realm of just General Financial Planning affordability is so rent should your cost of housing should not exceed 30% of your household income. So we we're mindful about that our rents in there and that they're also at a 25% discount to what a monthly mortgage cost would be and so that's proven to be robust for us where there's there's plenty of demand and we're getting quality tenants um and there's a stickiness to it yeah that's great and and that makes a lot of sense right cuz. You're you're kind of you're you're baking in the upside by making sure like hey like do. We you're you're you're baking in the returns by making sure that there's enough upside on the deal so that makes a lot of sense to me and how would you like how have you sourced. These deals in the past you know like. Maybe the last few years have been difficult but like before that how are you sourcing these types of deals. Uh real estate is a contact sport and what what I mean by that is you need to be contacting your network and that's local Brokers local sponsors property management companies investors lenders you never know where somebody's going to find a deal for you you know hey this guy's looking at selling it wants to move off of it quickly um. You know we've also leveraged online platforms you mentioned. Tre earlier we're we're identifying those that probably need to sell before their debt comes due or seriously considering it right. Now. They're staring it down because the debt service coverage ratio is below one or they have or they have a rate cap expiring which is going to be very expensive. So uh it's it's all of that yeah makes sense and and and yeah I mean like. It's. It's funny I was was talking to. I was at a hotel conference earlier this week and I was talking to one of um one of the Brokers and and she's doing a lot of deals and I asked her was like Hey like how are you finding these deals and she's like literally like just cold calling all day. And I was like you guys still do that like it's 2024 dude. You still you still coold call but yeah you're. I she's like yeah of course like how else are you going to build a relationship makes sense you know makes sense exactly yeah um. That's that's how you get directly to the source or if somebody's on the fence. Like there you go right and another interesting thought there too is like at least for her is hey. The sellers are buyers too so you know there. There's always there's always multiple ways to look at it and um yeah. I I think that's she's Dialing for Dollars. She sure is. She sure is so what are your plans for 2024 what what are you seeing in the market right now Cam and and and and what are you what are your plans uh to take advantage of the opportunities that 24 presents yeah you know I think there's a renewed optimism whether that's some of these maturities come on maybe. There's some rate Cuts. Maybe people are ready to transact because that bid ask sprad has compressed. But I think I'm not alone in saying this that there's a more optimism this year that some some more deals will get done. I think people are looking towards the second half of the year for that to happen uh just to see how things play out um and also that's when a lot of debt matur from the first wave of cheap money come up um. So we're we're constantly looking for. The right deals um and you know for. We're fortunate that we are not in any bad deals where we're trying to plug holes right. Now so we can really focus on our acquisition strategy finding the right deals um and uh you know building the right relationships to get those done yeah that that that's awesome man and um it's interesting to hear. You say that like you know the second half of this year. I'm just you know. Playing devil's advoc here. It's an election year and typically you know second half of the year. We start to see people pump the brakes on on everything because they don't know what's going on so so um yeah. How do you see that playing into the mix you know with like politics aside right like how do you see all that playing into the mix yeah that could certainly throw a wrench into things and I had a have a buddy who kind of gave him the same Spiel and that was his response is yeah. But there's a there's an election and if that's the case you know I guess. We just keep keep turning over stones and hope that we find something great within it um if not you know we'll be patient. So you don't ever want to be stuck in a bad deal and I think that's very important to remember as as antsy as we may get I'm a deal guy. So I've been a little bit bored with the lack of activity going on um. But you know. It's been a great opportunity to be a a a good father and husband. So I I have some more time to spend at home.
•  Hey man I love that I I I love that so well in traditional Goldmine fashion Cameron. Let's have you lead the audience with one final gold nugget yeah. It's along the lines of what I just said the best deal is the bad deal. You didn't do o that's a good one Mike drop yeah. Mike drop I love that man yeah thank you oh gosh well. Hey. It's been a pleasure Cameron uh lots of uh really in uh insightful information that you shared so thanks very much for uh stopping by and uh next time I'm in Vegas. I'm GNA stop by and see you please do thank you for having me take care.