Podcast Episode 108 Transcript

Episode 108: Identifying The Best Multifamily Deals with John Casmon

Are you ready to bring your real estate game to the next level? My name is James Prendamano. I'm the CEO and founder of PreReal. And over the past 25 years, I've closed over a billion dollars in transactional real estate. Each week I'm meeting with outstanding investors, high performing individuals, and visionaries operating in the real estate space. These are the people that are actually out there in the real estate game right now getting it done. This podcast aims at bringing anyone's game to the next level. This is the PreReal podcast.

Welcome, everyone, to the Prereal podcast. We got a treat for you today, folks. We've got a multifamily syndicator podcast host, marketing consultant, unbelievable, heck of a guy. We had a little background chat that maybe we'll touch on as we get rolling here, but we've got John Casmon, he's the managing partner of Casmon Capital Group. John, thank you so much for taking the time out today.

Absolutely, thank you for having me. I'm really excited to be here and to talk about real estate, real estate investing and all that we got in store. So I'm excited for this. Absolutely. So folks, as they used to say, right, when EF. Hutton speaks, people listen. John's got over 100 million dollar portfolio worth of apartments as a general partner, as a GP, he's the host of the Multifamily Insights Podcast and the creator or co creator of the Midwest Real Estate Networking Summit. A hell of a resume.

So we're going to get in the weeds here and cover some of the traditional things, John, if we can. But I'd also like to talk a little bit about the moments and time that we happen to be in the market. A lot of interesting happening on the horizon before we jump in. I thought it was really interesting when we were hoping you were going to join us on the show and we were doing our homework. You've got a heck of a marketing background, right? Yeah, man, yeah. Marketing. For 15 years, marketing was my dream. I was a kid who was undecided on what I wanted to study and all that stuff. No one in my family went to college. I was the first one to really go to college. And over my senior year I had a class on communications, I think it was. And I just remember sitting in that class and there was a question asked me by my teacher and he said, why do you think we have TV and radio? Why is it free? I was like, well, so they can communicate to us who is they had to think, well, the government, of course. Wrong. He said advertisers. And I was like, now again, this is maybe 2025 years ago. So this is a time where you have free TV, free radio, right? So when you think about that programming, what's like, well, someone's paying for it, right? It's going out to all these people for free because the people are paying for it are the advertisers. And that took me down this rabbit hole of learning about public relations and marketing and communications and crafting a narrative and all of these different things and why it's important to have a voice and why it's important to have representation of that voice.

Because otherwise other people get to craft this narrative and you don't get a chance to really understand that. So that got me into the space while I was in love with it. Loves marketing, loves learning about products and services and how to convey the right benefits to the right people at the right time. And I did that for companies like General Motors, Nike, Course, like Mountain Dew and other big brands like that. But the challenge was, I realized in the corporate world, I couldn't dictate what my career is going to be. It didn't matter how good I was, someone else always had a say on who got that promotion. I remember in particular, my boss ran into some issues, and they were going to move from out of that role, and they wanted to promote me. But I was actually two levels beneath the level of that job because of where they hired me. So they couldn't promote me because I would have had to jump up two levels. So instead, they brought in someone else. And I was running circles around this person in that marketing space, and it frustrated me so much. And I finally went to my boss and said, you wanted to give me this job, I get it. You couldn't give it to me. But now I'm not even learning or growing. I feel like basically teaching my boss how to do their job. And it just it made me step back, too, because I learned a lot about corporate and how to navigate that. And she actually built a great relationship after that and realized she was not trying to hold me back.

But I did. Honestly, I felt like she was at that moment because I'm like, in my head, she had the seat. I want it. She's like, John, I don't want the seat, but we need to work together so I can keep the seat warm so you could take it. But anyway, I enjoyed marketing, but I also got to a point where I realized being incorporated, no matter how much you enjoy it, it didn't align with my real life goals. And for me, my real life goals are more about being a present father. And that was top of the list, and I had to kind of make some changes in order for me to really fulfill that portion of what I was looking to get out of life. So those are some profound statements there, right? Being a present father and recognizing that the corporate structure was not going to align with your values, it wasn't going to align with your passion. I would suspect more than anything. So many folks, and we talk about this a lot on the show never get there. They never have the moment where they marry up that clarity with intention, right? They have moments of clarity. They have moments of intention, but so many folks never get out of that pathway. And look, corporate America provides a wonderful, wonderful way to build a career for a lot of people. But it also provides just for me, it was crippling. It was so suffocating for me in my journey.

I was much younger. I was in my early, early 20s with a very large company that will remain unnamed. But it was so suffocating for me and great people, great structure, wonderful company to be a part of. But I just couldn't understand a lot of it was immaturity, but I couldn't understand why things like that would happen just because it says it somewhere in a book. Well, let's change the book, right? How do we do that? What was it for you? Was it mentorship? Or what was it for you that allowed you to have the confidence? Because, man, it takes a lot of confidence to step out and say, this world is not for me anymore. It does and it doesn't, right? So we are all a product of our circumstances. And in a way, I've kind of always felt a bit alone. From the time I was basically entering my junior senior year of high school, I was kind of beyond the point where the people around me could really give me clear guidance. Again. If no one around you has gone to college, they can't really help you through that process and help you cut down.

Here's what you want to look for in the school and make sure you pay attention to these programs. There was none of that guidance, right? So I kind of was figuring out life on my own around 1617 years old. I say all that to just illustrate that I've kind of always been a bit of an independent thinker based on that. I've kind of read books and looked at other people and said, okay, I like what this person has. I like what this person is doing. How did they get there? Okay. What did they do to get there? Okay, I want to do that. That's kind of the way I thought, and I looked at it and what really happened for me. Let me say this very quickly. I don't have any problems with corporate America, and I think that working in corporate is a great way to get ahead, if that's what you want to do. You can absolutely craft a career where you have either the family time, sure, you might have to make some sacrifices, and maybe you don't get that promotion, but you can craft that. So I don't want people to feel I hear people all the time talking. It's like, why are you all bashing corporate life? Like, if it's not for you, that's fine. I thrived in corporate life. I was really good at it. Okay. What happened for me is you have to understand two big things. One, I worked at a company that was basically the face of the last economic downturn. And I watched my boss's boss on TV, on CNN and cable news talking about the state of the business when I just saw her in the office 3 hours earlier telling me to keep my head down. And when you're watching that, the panic, the fear, the anxiety that everyone has.

I work at this big, huge corporation that was too big to fail, and it's failing. And I'm watching the impact it has on me and all of my peers. And at this time, I'm single. I don't have kids. But I'm watching the ones who do have kids and do have families, and none of them look happy. And I don't know what everybody is making. I assume everybody is making at least six figures, but none of them looked happy, right? If you're miserable every day you come to work, does it really matter how much money you're making, right? So for me, they didn't feel happy. They didn't look fulfilled. And there was one guy who was happy. There was another guy named Jack. And Jack was getting close to retirement age, but Jack was happy. We come in, we talk about how was your weekend? Jack was like, oh, man, I went and got my snowmobile, went up to the mountains. I did this. And Jack was always happy. And I love talking to Jack. And I started to lean more. Now, what is Jack doing that the rest of these people are not doing? Well, jack built an independent portfolio. That's what Jack did. Jack was investing in real estate and other things. So Jack had what they call fu money. So he really didn't care. And that kind of helped me realize, you know what? If you're going to do this, do it, but make sure you don't have to do this.

And that's when I started to develop a passion for something else. And I Rich Dad Poor Dad earlier. And I went back, reread that book, and it all kind of clicked. And it was like, you know what? I'm working here. I'm developing some great marketing skills. How can I leverage these skills to help me do other things? And eventually, I left that job when my dad and a lot of other people thought I shouldn't. My friends like you crazy. And by the way, I was going to the Super Bowl and maximize 100 parties and NCAA Final Fours and all these other cool little things. But I left all that and went to an advertising agency. And I went to an agency because I want to work for a smaller organization. I want to be able to work closely with the CEO and the founder. And I really want to grow my entrepreneurial skills, and I want to work on different brands so I can understand how different industries work and what's true across the board and what's different and how to see them really work and what's point of sale. I wanted to develop my skills as a marketer.

People always talk about reached out poor dad, and they talk about it from the sense of real estate investing. My biggest takeaway, though, was actually about working to develop skills. And he talks about you should work to develop skills. Once you've developed those skills, move on. And that was kind of the trigger for me when I left that big corporation to go to an agency. I feel like I've done what I can do with this skill here. Let me go develop this skill somewhere else, so then I can really use it for my own personal gain moving forward. And then that company ended up going into bankruptcy as well at one point. So now I work for two companies that have gone into bankruptcy. So, in essence, those experiences taught me that the risky thing was actually relying on the job. That was the risky thing. When you sitting there and you think it's a normal Tuesday and you're hearing stories that the company is about to go under and you have no clue what to do, and now I have kids. I didn't have kids the first time. Now I have kids. And I started investing in real estate at that point, but my portfolio wasn't at a place to just take care of me. So at that point, it was like, oh, okay, you know what? If I fail, I go back and get a job again, right? If I fail, I'm back where I'm at today. That's not really a risk. And if you look at it from the lens, I'm sharp enough and I believed in myself enough to say the worst case scenario is I'll get another job, and I know how to hustle enough to get a job.

One of the books I read and I'm sorry if I'm rambling here. No, I got a book. I've had this book with me for over 20 years. It's a book called How to Sell Yourself by Joe Girard. I've had this book for at least 20 years, and I read this book as an intern. And the short story. Joe Girard was the world's greatest salesman. He used to sell cars. And part of the reason he obtained that title is he really figured out how to be efficient with his time and his communications and building relationships with people. And there's a point in there where he talks about they cut out the weekends. So he had to figure out how to sell what he was doing the previous year in five days, which he used to do in six days. And he figured out a way to do it and continue to hold that record. But he talked about little different things in here. And the reason this book is so important I want to kind of pause to get this is as an intern, I did not believe in myself.

You got to understand, I went to a state college. Again, didn't have people guiding me really long that process, and it's not their fault, right? But I went to a state college. I got the last internship spot out of, like, 80 internships. I was, like, 83. They asked, like, three other people said, no. I know it for a fact, because the day I was supposed to get the call, I didn't get the call. I was waiting for the phone. My phone did not ring. So when you are passed over and you get a chip on your shoulder and you know you got to work a little bit harder, I attack that internship with the ferocity of someone who would not eat if they didn't go out there and kill that night, because there was nothing else guaranteed to me. I was about to get out of school. Everything else that I knew was about to end, and I had to get a job after this internship. So I approached it with that mentality, and this book taught me also how to get a job after that. And one of the things this book says, the story I remember very clearly. It's like there's a story about a guy who goes on to the shipyard every day, same time, and they tell him, hey, no jobs. Go away. He does this, like, eight weeks straight. And most guys, you go for a week or two, and it's like, okay, they hired this dude, went eight weeks straight. They finally said, you come here. We don't have a job, but we'll make something for you. If you are that committed, we'll figure it out. And for me, it's like if my worst case scenario happened and I got to find a job, I'll make somebody hire me. I'll show up every day. So you either going to get a restraining order on me, or you won't give me a project, but I'll make you hire me if it comes to that. So I think with that mentality, it's like, all right, then why don't we try to fly then?

We can try to fly. If you know where you know your basement is, right, you know your floor is why do we see where the ceiling is at this point? I love it. The marketing background, the real estate industry has changed so much that one of the core principles here in my company is you've got to be a marketer today as well as a deal maker. It's not enough anymore to be an outstanding deal maker. You got to be able to market yourself. And when you can mark it yourself and you believe in yourself and you believe in the product, man, oh, man, sky's the limit. Really, truly, sky's the limit, you can't fake it. But when you have that skill set and you learn how to market in today's world, there's not much you can't do. How do we go from that point to $100 million portfolio as a GP in multifamily? What was the first step? Talk to me about that. Yeah, everything we just talked about was marketing. Right. And I believe in the training I had done up to that point. Right. I was in the New York Times at one point. I was in Black Enterprise Magazine as one of the top advertising marketing professionals. So I had a lot of confidence and a track record in the marketing world. Real estate, whole other story. Right. So real estate, I started brick by brick, man. I started with a Duplex and that was my a necessity. So we lived in one unit, we rented out the other unit, then we bought a three unit building. So this is now we're going to push this on our first true rental property. Right now we got a three unit. And I surrounded myself with other people, and that's really one of my biggest hacks. Surround yourself with people who are doing whatever it is you want to do. They don't have to be your best friend. I'm not saying replace your friends, but I am saying you need to make sure you have a safe space around these people so that you can feel nourished in the vision of what you're trying to create. Because if you're the only person in your friend group who's looking to invest in real estate or do something that other folks aren't trying to do, you might start to question yourself. Maybe this is riskier than I thought, or maybe this isn't the right way. Maybe I'm overthinking this, or maybe I'm too optimistic here. So you've got to surround yourself with people who are actually doing this so that you can get that affirmation of, hey, you know what? No, you're actually doing greater.

This is exactly how I did it. Or, you know what, I talked to my mom. She told me I was going to lose everything and be homeless and move in with her. Whatever. Right. Figure out who are those people just to get that gut check in at pattern it back and say, you're on the right path. And that was critical for me. So I got that once a month. I used to go to REIA - The Real Estate Investment Association, and it was like 45 minutes away from us. It was out in the Chicago suburbs. I had to go all the way out there for this, but I went because it's how I got my confidence and kept my confidence high. But doing that also met a young lady who did her own meet up. So I started going to her meet up as well. And I watched her go from a three unit property to a nine unit property to a 90 unit portfolio, all within about 18 months. And when she went from the three to nine, it showed me this was possible, because this is the first real person I've met who has actually grown a portfolio. I've met a couple of people at a property, but I've actually, up to that point, I didn't know anyone who was growing their portfolio, because it's just not something people openly talk about, right? And at that time, it's their social media, obviously, but Facebook was fairly new. Still. People are using it, but it's not like, now where your grandma's on Facebook, right? So you just didn't know. And just knowing this person who was growing a portfolio, it made it real to me. It made a tangible. It wasn't just these people in the books. It wasn't just these random people on a podcast. It wasn't just these random avatars on some bigger pockets or some other forum. This is a real life person who I talked to six months ago, and she told me about her three unit and the concerns she had and the challenges she was facing. And boom, now she's got nine. And boom, now she's got 90. And I'm like, wait a minute, from nine to 15 might make sense. Nine to 20, maybe nine to 90. And I said, can I buy your breakfast? I just need to understand how you did it.

She's the first person who really helped me understand what it means or what it's like to work with other investors. I obviously had thought about that or knew about that, but I hadn't really considered it for myself. And she made me think about that in a way that I had never even considered before. I never thought about raising a dollar for real estate before. I thought, you went out there, you saved your money, you bought what you could buy with the money in your bank account. And that's what we were doing. And having people like that in your network, it helps you expand what's possible. And that's why I say you have to surround yourself with the right people, because it changes what you see. And then I can take that, and then I can look back at the experiences I had in corporate America and the wins I had. And sometimes you just got to give yourself a pep talk. We forget how great we are. We always want to be humble and all that. That's cool. But sometimes you need to pull off that resume and remind yourself who you are, what you can do, and what you can accomplish. So you can shoot for the moon and not just play small. You playing small helps nobody, right? So you have to understand that if me having that reassurance from someone telling me how to do it, telling me how other people in their network have done it, that opened the door. And what literally happened next is about 30 days after that meeting, I met the person who became my mentor, and my mentor ended up growing a crazy portfolio. He's got like a $2 billion portfolio right now, probably like two and a half billion at this point, but he grew that. And then this is now another person, my network. Well, I'm watching this person grow from a $7 million portfolio from seven to 20, 2030 to 60, and it's like, wait a minute, what are you doing? Huh? So what is this syndication? How does this stuff work? So now these are the people I'm surrounded myself with. So when these are your friends and these are people you're working with, you expand. So for me, on a tactical level, what happened is learned about apartment syndication, working with other investors and a lot of apartments, indication is finding a good deal, being able to operate it, but also being able to raise and attract capital for these deals. And that's really where some of the marketing background was able to come into play to help me be effective and successful there. So I assume that part of this journey was the inspiration for the midwest real estate networking summit. Part of it, yeah. So the woman I was just talking about is the partner on the summit. So she and I, we were out at and we've become really good friends, and we were out at another conference in san Francisco. Great conference, but we never got conferences in the midwest. Everything in the midwest is some dude on h UTV trying to sell you some crazy expensive coaching program, right? Come here. Free 1 hour thing or free two hour thing, then you sign up for the three day $97 or $197 thing just so they can try to sell you the $40,000 thing, right? And we were like, we had a great time at this networking event out in san Francisco. And we're like, you know what, I had launched the podcast at this point. I had some connections, she had a lot of connections. She's really active on bigger pockets and said, I think we should try to create something like this. She's crazy enough to just make it happen. We had a conversation probably at two in the morning, maybe after a couple of drinks, and threw around this idea. And within about 48 hours, we had the framework for the conference and we did it six months later. So we put it all together in about five to six months. But yeah, but that's key if you're going to go out there and create it, create it. Now, let's say that's the second thing. You can't be afraid to create something that doesn't exist today, right? You've got to make it. And this is the other thing I've learned from my mentors, my friends. She had a meet up. Well, guess what? Part of the reason she and I were even close is because I was committed to going to these meetups a lot of people I would see at these meetups, they would come to one or two in a row and then not the third one, but she was the host, so she was there every meetup. So I saw her every single time. So we spoke every single time, so we got to know each other. And when you're in that position, we call it thought leadership, just like you and I are doing right now. When you have a thought leadership position, you get a chance to connect with more people. You get a chance to talk to them, you get a chance to build relationships with people. And that's a very powerful thing to do. And for us, with that conference, it wasn't necessarily like, okay, I'm going to build this huge brand or whatever. It was just like, you know what, if we don't do this, who will? No one has done it yet. And why not us? We're probably more qualified than anyone else we can think of. You got a good meet up at that point. I had launched a meetup as well. I had my podcast and I had some pretty good relationships as well. And it made sense for us to try out and go out there and do something. And I had an events background. Again. I was a market. I did events like the ones I mentioned before, but I've done events for ten to twelve years, so hosting a conference was kind of just another event to me. So again, when we sat and talked about it like, oh, we can absolutely do this, and it made sense. The tools that are available to us today, my Lord, what a blessing. I mean, it has become easy, honestly, to connect and to build a network if you're intentional in your purpose, right? So here you are, you're building out this network and that's one thing, right? 100 million dollar portfolio, raising capital, operating as a GP is something entirely different. So I guess when you first really made the commitment that this is what I'm going to do and this is where I'm going to go, did you have a set of goals I want to hit X in, portfolio I want to invest in? Did you go right to multifamily? Did you consider other asset classes? What was that piece of this like? Yeah, I've only invested in multifamily.

Even going back to that duplex two, unit three, unit eight, unit 192, we've only really done multifamily because as I read all the books and all the research that I did, the people who built single family portfolios and then went to multifamily, they all consistently said, I wish I would have went to multifamily first, or at least wish I would have went sooner. So I'm like, well, why don't you just get that step, go straight to multifamily, even if it's smaller, multifamily. So that's what we did. I would say that on the size I. Don't like to get caught up in unit count and all of that stuff because it doesn't necessarily tell the full story. But here's what I will say. I think it's really important to have clear goals. And those goals need to be based on the lifestyle you want to create and the lifestyle you want to live. And then I think you have to figure out what are the numbers that support that? So for me, it was like, okay, how to replace my income? If I could replace my income, then I have more control over my time. I can have all the flexibility I need to be a present father or just run my own schedule, basically, right? So that was really the goal. I didn't go beyond that because I couldn't quite see beyond that, to be honest with you. When I started out, it was like, hey, if I can replace my income through real estate, that would be amazing. That's where the goal started. So part of the way we found a great solution is I didn't have to get it all at once. And initially I did. I felt like, oh, I can't do anything until I have X amount of dollars in the bank from real estate or coming in from real estate. But when you understand this business, you understand there are multiple ways to make money in real estate. There are multiple ways to structure deals. We just sold a property last week. I got a nice mid six figure check coming back to me, right? So there's different things like that that you can stagger if you start to build a portfolio and get some momentum. But part of it is understanding the bigger picture of it and being patient and not knowing how to manage your expenses as well. So it's like, okay, can we live off of one income? What if we cut out these expenses? What if we did this, what if we did that? So we got to build it up to shape the lifestyle, but then we can run and kind of grow the portfolio as well. I would also say it helps tremendously for me at least, to have a greater purpose. Because if it just came down to, if I can make enough money for my job, well, then what? I'm probably not sitting here talking to you, right? All right, cool. I'm going to go hide in shadows.

To me, that purpose means I remember what it was like being at GM. I don't think I said, you have a GM, and looking at my peers and looking at folks who had put their careers into that company, and many of them are there and doing well. But point is that there are a lot of people who don't have a plan B, who want to be present parents who want to have flexibility in their careers and all those kinds of things, and they don't have another option. And they've done everything, right? They've done everything that we are told to do. So what about them? How can we help them? And then in particular for black Americans and black working professionals, particularly black white collar professionals, where if you like me, pull yourself up first one and family, go to college, got a white collar job, corporate career. Well, guess what? i was making less money than my peers i had less net worth than my peers. Nothing do with them. It's nothing about inequality because I'm talking about net worth, but also about wealth. And we found this tool in real estate as a great equalizer. And it's something that I think more and more people need to understand because you can't just work your way to wealth. You have to invest in income producing assets that have tax benefits, that have all the great benefits we love about real estate. And for most of our busy professionals who are diverse individuals, you busted your tail, you got a great job, you're climbing the corporate ladder. You don't have the time to go and learn all the stuff I've learned over the last 15 years about real estate. You just don't. I mean, it took me five years before I did my first deal from my education process, and it took another five years before I ever raised a dollar from someone. So it just takes time.

So for someone else to go out and try to do it themselves, well, what if they make a mistake? I've made plenty of mistakes. I've made six figure mistakes, right? But I'm committed to the journey. Someone else that may wipe it out for them, they may look at it and say, oh, this real estate thing doesn't work. So it's better for me to be able to have a platform to teach other people how to do it or invite them to join me on some of the deals that we're doing. And that's a greater purpose because now I can help other people get the same benefits that the wealthy get from real estate investing without them becoming a landlord or without them having to become a real estate expert themselves. And I think that's critical because now I have a purpose that drives me. I have a purpose that can keep us going. A purpose to go out there and create this kind of content that is beyond what John can do by himself and has nothing to do with what's in my bank account. Yes, I'm going to benefit. Of course I'm going to benefit. I'll make money on that. But the real impact is when you can help other people. That's when you know you're really doing something of value. And it's funny. I'm coaching my son's football team to make us go through all this training, and one of them is on transformational coaching. And one of the things that they said that really stood out to me was a great transformational coach has an impact on his student athletes well beyond the football field. Right. And that's what purpose is. Purpose is about the impact you have on other people, not the benefit that you receive. So what is your purpose? Right. And they were breaking on the different goal and purpose. Right. Goal is what you want to accomplish.

Purpose is the impact you have on other people and helping them accomplish what they were looking to get. So it's one of those things where if you can understand your purpose, not necessarily just your goal, but your purpose, now you've got a higher calling as far as what you're trying to set out to do. No question about it. For me, money itself was never the driving force behind it. And I only really started to excel in my career when an amazing coach had framed for me that the money is an important part in you getting the message out. The ability that I have and I have cultivated over 27 years now in the commercial sector of real estate, if I'm able to focus that message and get it out to the masses, think of the people that you can help to accomplish their goals. Right. And for me, that's where the connection came that you're talking about the difference between goals and purpose. So multifamily investing as a GP, which is where you're operating, is a complicated and a competitive space. Right. And it's not for everybody. You see quite often people on social media talking about how they've traded in their nine to five and now they're doing whatever it is that they're doing and it doesn't quite go that way. Being aligned with the right GP is everything if you're going to be a passive investor. So I was wondering if you could spend a few minutes, John, talking about some of the nuts and bolts of how you're identifying deals. What are the metrics you're looking for? Is it straight cap rate return? Are you looking for upside? What hits the sweet spot for John? Yeah. Our philosophy has not changed and probably will not change very much. But we look for value add deals. Right. When I say value add, what I mean is we're looking for properties that are already making money where we can come in with our business plan. That might include renovating some units or lowering expenses or adding some amenities. But with our business plan, we can generate more profit. And based on those things, we can deliver a solid return for investors, usually looking at double investors return over the course of five to seven years. So we are typically taking a longer view. Five to seven year old. If we can exit earlier, we certainly will consider that. But we tell everybody all the time, plan on being in a little bit longer. These are illiquid assets, which means you can't come in, invest, and then four months later decide you want to buy something completely different. You need your money back. It just doesn't work that way. So for us, we like stability. We like predictability. And this is where really my background in corporate America comes in handy, right? We do a lot of sales charts, a lot of financial projections, a lot of, hey, here's what we're on the trajectory to hit this month or for this quarter, how do we adjust it or what sales can we implement or whatever the case may be. And that's really what a lot of this is. We're taking a look at it. We're looking at what the current financials are, okay? If we change X-Y-Z or we did this, this here's where we think we can get the revenues or here's where we can get the net operating income. And based on that, the property would be worth this. And we want to build in kind of our conservative approach. So what if we're wrong? What if we're wrong up? What if we're wrong down? How do we make sure we put some cushion in there so we can protect ourselves and protect our investors? We like B class properties. And by B class, what I really mean are good properties that are in demand. These aren't necessarily luxury class A beautiful high end apartments, but they're also not really rough, beat up, tough neighborhood apartments either. We like affordable places where people want to live, where they can't live decent to good schools, nice amenities, good attractive location, accessible to other places. Places where people want to rent or can rent, are happy to rent. You don't want to be in a place where people, the only people are going to rent. There are people who have no other options, right? Because what does that mean for us as investors? Well, these are the people we can rent to. So everything now has to be based on cost and being cheap, as opposed to creating a comforting home where someone can be proud about where they live. On the flip side, we're not developers. We're not doing Class A, luxury, super nice everything. We just don't know if those people always want to rent. Some of them choose to rent right now, but the market changes. There's a lot of competition from other developers. But the B class space, that B class space is nice because you have the widest range of potential renters. And if you're thinking about it from a single family, think about if you are a flipper, you want to flip kind of the house that is the bread and butter of a city or neighborhood. When I flipped, I was a terrible flipper, by the way. But when we flipped, we were set in the market with our flips. That was a terrible strategy because we were the first ones to find out the market had softened up, right? But if you've got that bread and butter product, you have the widest range of potential buyers so you can how to navigate it. You know what to do, you know what levers to pull, you know what range to stay in. And that's the way we think about it.

For declass apartments. Right. Let's take out some of the mystery. Let's not assume that we are the greatest developers and rehabilitation in the world. Let's give ourselves some cushion. Let's mitigate some of those risks and have a product that the masses are able to take on. And if we could do that, do we give ourselves a lot of chances to be correct? Yeah, no doubt. Meat and potato investing, I love it. It's always proven for me, being through three full economic cycles now to be Steady Freddy baby. And in real estate, that's the name of the game. So geographically, are you investing in across the country? What is the focus for you? Yeah, we like growing parts of the Midwest and the Southeast region. So we do like to pay attention to population growth industries that are diverse as well as kind of the political climate. Less about red and blue states and more just ease of doing business. What are the landlord laws? Is it landlord tenant friendly? Just trying to understand some of those things. Why? Because we want to make projections. We want to be able to understand how our business is going to operate in that particular market. Our new business is going to set up shop. New businesses want to grow their existing businesses there. They want to add employees. Will they attract more people to the area? But we're always trying to look at demand. Where is demand at today and where is demand heading? So to that end, 1015 years ago, political threats in your analysis were almost never accounted for. Those legislative threats, now they come up just about with everybody I speak with. That's a really important piece of weighing the potential and determining growth in the markets. I'm curious if there's this confluence of so many factors now. Right? There's decentralizations of some of the cities, and there seems to be a buy in from corporate America for the first time. That remote working and not being in the office, which was so funny that some of the younger folks that work with me don't understand how frowned upon that was not too long ago. Right?

It just wasn't an option just a few years ago. Yeah, you were in six days, sometimes seven days a week. And as you had said earlier, you put in the grind and you kind of climb the ladder, and that was it. Now it seems that corporate America is starting to embrace this and say, hey, we can cut salaries. We can really slash expenses and decentralize. And I'm seeing a lot of companies now opt for trading in those super expensive digs in Midtown and locating in outer boroughs and beyond these markets as the look, this is a cycle and never ceases to amaze me how people forget that this is a cycle, it's going to go up, it's going to come down, it's going to go back up again. Typically in the secondary markets, these tertiary markets, they're the first to get hit with the luxury, right? Those are the first markets where last go around Florida in 2008. It was red hot one day and then for two years you couldn't give something away. I'm wondering what your insight is. What's your perspective now? Has there been enough decentralization? Is there enough of a shift now in people's habits where those secondary markets have now become primary markets? Is that what we're seeing here? Well, I think everyone's got to look at the factors they look for and make that determination. For us, we think about primary, secondary and tertiary. Typically people are looking at population and MSA to help make those decisions. It's funny because from a multifamily standpoint, if you ask me, like a top multi family market, for my peers, I would tell you it's DFW. If you look at population, DFW should technically be a secondary market. So it just kind of depends on how you look at it. Here's what I would say though, to answer your question, everything is cyclical and you have to understand the different levers that impact. For us, we're always looking at rent and rent growth. So rent is going to be a reflection of demand. It's going to be a reflection of Occupancy. It's going to be a reflection of something that they call absorption rate, which is essentially what they're building new apartment buildings. How quickly do they get rented? Are they building enough apartment buildings or are they over building the apartment buildings? Are they under building apartment buildings? So that absorption rate lets us understand where they're at in that development cycle. So when you get into some of these secondary and tertiary markets where they're not building very much, you're not as exposed because the demand is so high. So the key for us is paying attention to the underlying metrics, not necessarily just the results, right? If you only look at rent and rent grove, you can make some big mistakes. I'll take a look at work like Phoenix, Arizona, and Phoenix is one where I've talked to some folks who are active in Phoenix. It's one that I don't know as well. But I'll tell you, when I looked at the historicals, it's a market, and a lot of West Coast markets do this. They're very cyclical. When the market is up, they are hot, they're exploding double digit growth on fire. But when the market goes down, they plunge and they take a hit and they take a while to recover.

And that's one thing just to look at. Again. I'm not picking on Phoenix. I don't know the markets. And what I have talked to people about is what's driving Phoenix right now is more fundamental growth because you have jobs and employers moving there. So I do think it'll be more sustained, but those are the things you want to look at. I want to look beneath the numbers. They'll just look at population growth and rent growth and say, okay, cool, this market grew 12%. Let's go there. Why is it growing 12%? Is that continuing to happen? I might look, if it's let's say it's job growth, right? Let's say there's a couple of big employers, amazon's Movie Shop. All right, go read Amazon's report, the quarterly reports. What's going on in the business? Are they planning on opening up more locations? There are more warehouses, more facilities? Or are they cutting back? They have a surplus, they beat their estimates, their expectations, or did they come up a little short and they're a little surprised that things softened up? I want to understand again, am I expecting these things to continue, or am I going to expect change? And I'm also not trying to do this quarterly because when we're investing, we're going to be in for what, five to seven years? So I need to pick something that's fairly stable. I don't want something that's hot today or these last two quarters, but stunk it up last year. Right. I want something that is on a nice, steady growth metric. And for the foreseeable future, the underlying metrics that are driving that growth should continue to be there and should continue to drive it. So that's what I'm looking for. I try not to get too caught up in the cycles of it, and that's why I like multifamily. That's the reason I'm not really in office. And some of these other things, it's not that I don't like them. It's just that there are a lot of other factors that come into play, and maybe understanding whether or not the time is right is there. With multi family, it's really straightforward. We have a shortage of housing. It won't get fixed until at least 2030. And most people need a place to live in a rising interest rate environment. You're going to have less homeowners and home buyers. What are they going to do? They're going to rent. Rents are going up all across this country. It's almost impossible to build affordable housing without government support. So you're not building apartment buildings and then renting them out for $600. It's not happening. So there's plenty of opportunity in many markets. That doesn't mean that you can't have good underlying fundamentals driving your decisions. I love it. So before I let you go, can you speak a little bit about the capital markets? What's the strategy been, and has it evolved with securing debt in these transactions? What does that look like for you now? Yeah, I tell everybody the loan should match the business plan. So what are you trying to do for the property? Get a loan that matches the business plan. If it's a value add deal, when do you plan on exiting? Make sure that the loan you have gives you flexibility to exit at that time, but also doesn't force you to exit prematurely. So there's an interesting balance there that someone has to figure out to select a loan. I hear arguments all the time about fixed versus variable financing, bridge loans versus agency loans or versus other bank loans and stuff like that. Right now, I think it comes down to the business plan. What state is the property in? Is it a light value add? Is it a heavy value add? What are you actually doing? What market are you in? There are a lot of different variables that that you have to come into play. For me, I would say that we are always looking at mitigating risk as much as we can while also getting the right loan for the right business plan on that property. I love it. John, what's the best way for folks to find you? The best thing really is I'm on LinkedIn, so you can text me on LinkedIn. The other thing is we have a sample deal package on our website. So if you're curious about apartment investing, whether you want to be in the active side or you just want to be passive and put your money to work, it's a good way to wrap your head around some of the terms, the way the deal structures, just some of the things you should be looking for. You can check that out at kasmincapital. Comsampled. I love it. I think when selecting GPS folks, and we look at those cut sheets in those decks, right? I always remind people that those decks are made to look a certain way for a reason, right? Like, I've never seen a deck ever that didn't work. And there's a reason for that. At the end of the day, a lot of them don't work.

This is invaluable insight. I love what you got going on, John. Best of luck. Can I throw one thing in before we wrap? Because I think that's a really good point. One question that I think every passive investor should ask, and quite frankly, any investors looking to partner with someone else or even hire contractors or other potential partners, ask someone about a deal that did not work out. Okay? And you can even say did not work as planned. But the reason you want to do that is, to your point, we all have nicely marketing packages. I'm a marketing guy. I get it. But to really understand someone in their character and how they operate and what they've learned, you have to ask about some of the challenges. And I don't care quite as much about the fact that there's a deal that didn't work out. What I'm listening for is how this person talks about it. Did they take ownership? Did they learn from it? Did they grow from it? Are they in this deal right now or was this ten years ago? I'm trying to understand and learn a little bit about who this person is based on that experience. And what I'm really looking for is someone who is accountable. I'm looking for a leader. I'm looking for someone who is going to help lead through whatever situations we may come up with. That's me as a GP, if I'm part of another operator, I want to hear that. Somebody who's going to roll their sleeves, going to trenches, be accountable, hey, guys, we didn't account for this. This thing happened, tried to fix it, right? Now here's what we're going to do. I want that person, right? I don't want the guy that's going to point the finger and say, well, John, you were supposed to do this, right? Even if I was, I'd rather have the person who says, hey, you know what? This got missed. Let's try to figure out a solution so we can fix it. A lot of people you want to partner with, right?

So I would ask that because you are going to be in partnership with these people for, again, five to seven years on our deals. So you want to make sure you're partnering with the right people who at least will do everything they can to solve the situation. And I think for vendor selection partners, anybody in your business, I just think that's a great way to start to get a sense of the character of the people. And all I'm looking for is this person accountable for their role and what they could have done? Or do they just blame that contractor who did XYZ? Well, who hired that contractor? Right? I mean, at some point, you still got to take on that ultimate responsibility and whether it's extreme ownership and that kind of mentality. But the reality is I want someone who I feel I'm going to be able to trust to do well as a partner, as opposed to just blindly hoping this person knows what they're doing. Yeah, no question about it. That's a brilliant point. And I don't care who you are, we've all had deals in real estate that don't go as scripted. That's what makes exceptional investment partners, that's what makes exceptional deal makers is where problem solvers at our core. And if you can't take accountability for the problem, you're not looking for the solution. We've all had them. And to John's point, those that take ownership for it and demonstrate leadership, that's who you want leading you out of it, because it's all about solving problems. We've all had them and that's what separates the great operators from the not so great operators. So great point, John. I really appreciate the time today. John Casmon, managing Partner, Casmon Capital Group. Tremendous. Tremendous. All the best of luck to you as you continue forward. Really enjoyed our time together today, John. Best of luck. Thank you. Take care. I appreciate your time as well. Absolutely. As always, everyone out there, please stay safe.