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Zach Haptonstall, is the Chief Executive Officer and Co-Founder of Rise48 Equity, which has completed over $1.5 Billion dollars in transactions in just 3 years since it was founded in 2019. Rise48 Equity now has over 100 full-time employees in Phoenix.
Zach has been a licensed Real Estate Agent in Arizona since 2016. He is also an official member of the Forbes Real Estate Council, a Directors Council Member of GPEC, and is a #1 Best Selling Co-Author of “Success Habits of Super Achievers.
Zach talks about his journey and his initial necessity to pay off his bills which led him into work that wasn’t satisfying or rewarding. He aspired to have freedom from time constraints which seemed hopeless until a lightbulb went off – building wealth through passive income!
Today Zach is on fire with his entrepreneurial journey and shares his successful strategy to getting to $1.5B in assets under management. diversifying his wealth and uncovers the current market. He also shares insights on the current market trends in the Phoenix market for multifamily and how they are adjusting to preserve strong returns for investors.
Meet Zach and learn how the real estate industry led him to develop skills while building confidence in himself as well! You’ll be able to learn some of the secrets behind his success and his market predictions for 2023!
In This Episode
- Zach’s background and his inspiring story.
- Zach’s inspiring Billion Dollar by 40 goal and comprehensive wealth strategy.
- What Zach is doing with Rise48 Equity today.
- The current market and 2023 predictions.
- Biggest insights from Zach’s book and his piece of advice!
Hey everyone, and welcome to today’s show on Wealth Strategy Secrets. Today, we’re joined by Zach Haptenstahl. Zach is the CEO and co-founder of Rise 48 Equity, which has completed over one and a half billion in transactions in just three years since it was founded in 2019.
Rise 48 Equity now has over 100 full-time employees in Phoenix. Zach’s previous professional background includes healthcare sales and administration. He’s the former president and co-owner of a hospice organization in Phoenix with over 110 employees and over 9 million in revenue. He’s also a former live television news anchor and sports reporter for Arizona PBS and co-hosted a show on Fox Sports.
Zach holds an MBA from Grand Canyon University and received his bachelor’s in journalism from Arizona State. He’s been a licensed real estate agent in Arizona since 2016, is an official member of the Forbes Real Estate Council, and is also a best-selling co-author of Success Habits of Super Achievers.
Zach, my friend, welcome to the show.
Yeah, no, thanks so much, Dave. Really appreciate it, man. I know we’ve known each other for a couple of years now, so thanks for having us on and making time. Really appreciate it. Look forward to hopefully providing some value for the listeners today.
Absolutely. I did not know that you were in the field of journalism and were actually an anchor, so I’ve got some good competition to really keep up with here.
Yeah, no, that’s actually what I wanted to do initially. I went into it and then realized, man, you can’t really make much money in journalism, and it’s a lot of crazy hours, crazy work. So I kind of pivoted out of it. But yeah, that is a little fun fact about my past.
Yeah, it’s interesting how certain things in your past really help develop your future. I try to tell that to my kids right now. It’s all about learning, right? It’s all about the process. Sometimes you discover what you like to do from what you don’t like to do, and those experiences shape you.
No, it’s a great point, Dave. They shape you, like you said, and you develop skill sets that can be very valuable when you apply them to other types of businesses. A lot of the skills I developed by doing that, and the confidence I gained from it, I can apply to multifamily. I think it was a great part of my development as a person.
Yeah, that’s awesome. Why don’t we jump in there, Zach, and really talk about your background? We have a large audience of entrepreneurs, and completing over one and a half billion in transactions in three years is just really inspiring. I know you have a great story, so why don’t we kick off with a little bit of your background? How did that transpire for you?
Yeah, yeah, of course, Dave.
So real quick on me—I was born and raised here in Phoenix, so I’ve lived here my entire life. I grew up in a lower-middle-class family, so no real estate connections, no rich uncle or anything like that. I didn’t know anything about real estate. I wanted to be a football player, so I had a Division II scholarship to a small school playing football. I realized I wasn’t big enough or good enough to go to the NFL, so I thought, “You know what? I really like sports. I want to be a sports reporter.”
That’s when I got that journalism degree and was a live news anchor and sports reporter. Then, like I said, I quickly realized this wasn’t what I thought it was going to be. It’s one thing to be a fan, but when that’s your job and you’re working crazy hours, you really can’t make a lot of money. Then you realize, “This is not what I want to do long-term.”
At that point, Dave, I had a lot of school debt. My parents could never afford to pay for school, so I was taking out loans myself. I was working full-time nights and weekends while going to school, delivering medical equipment—just an odd job I got through a girlfriend’s dad who owned the company.
After deciding I didn’t want to do journalism, I needed to make money so I could pay off my debt and build a financial foundation. So I went into healthcare marketing, working for a hospice organization. I would wake up in the morning, drive all around Phoenix, walk into hospitals, doctors’ offices, and assisted living facilities, build relationships with physicians and nurses, and when someone needed hospice services, they would call me. I’d meet with the family, educate them, and get them signed up. Medicare pays for all of this 100%.
It sounds kind of weird, but it is a very lucrative and competitive private business industry, and it’s all reimbursed by Medicare. Phoenix is the number one market in the country for it. I was fortunate to do very well at a young age. By the time I was 22 or 23, I was making six figures—$150K a year. I bought my first house when I was 23, got my MBA, and paid for it in cash by the time I was 24.
I did that for about four years, and I was making $200K a year. I paid off my debt, had good savings, and owned a house, but I felt empty. I wasn’t satisfied. That was never my passion—I was just trying to find an avenue to make money, pay off debt, and get stabilized financially.
Through that process, I became the Director of Marketing, then later the President and co-owner of a hospice company. But in January 2018, I resigned and sold my equity in that company because I was very unhappy and unfulfilled. I didn’t know what I wanted to do, but I didn’t have time to figure it out because I was constantly on call seven days a week.
I knew I wanted to somehow create passive income through real estate because I wanted to gain control of my time. I knew nothing about real estate investing. I had gotten my real estate license in 2016 as a backup plan after my MBA, but I never used it. So I quit my job.
At first, I looked at flipping homes but quickly realized that was transactional—it was the same thing I had just left. Then I learned a little about investing in mobile home parks. I tried to buy a mobile home park on a seller carry with my own cash. When I quit my job, I had relentlessly saved my money for four to five years and got a little pop from selling my equity in that company, so I had almost $300K in cash. The plan was to live off those savings and figure things out.
Long story short, it took me over a year to even buy my first deal. I was just blowing through savings the entire time. Three or four months into that process in 2018, I discovered multifamily and syndication by listening to a podcast like yours. That’s when it clicked for me. I was looking at all these different things—mobile home parks, single-family homes—and I realized I needed to stay laser-focused.
During that period, I faced a lot of personal and mental adversity. I don’t want to be dramatic—it’s not like I was addicted to drugs or depressed—but when you go from making a lot of money, getting fat paychecks every two weeks, to waking up with no idea what to do and burning through cash, it’s tough. You don’t have any tangible evidence to show you’re making progress. Nobody’s there to tell you what to do or hold you accountable. I felt kind of hopeless because I was trying to pursue multifamily syndication, which seemed so big and intimidating. I knew nobody in this space.
I started going to conferences, attending meetups, reaching out to brokers, cold-calling lenders, and setting up meetings with property managers. Long story short, 14 months after quitting my job—so I quit in January 2018, and by February 2019—I finally closed on my first property.
It was a 36-unit, $3.5 million deal. I put pretty much all the cash I had left into it. I found a few business partners, and we bootstrapped that thing. We didn’t syndicate it—we just put in big chunks of our own money to get it closed.
That first 36-unit deal in 2019 gave us a lot of experience in executing a value-add plan. Since then, we’ve gained momentum, started syndicating deals, and began raising money from passive investors. Since then, we’ve acquired 35 properties—over $1.3 billion in assets and 6,100 units—all here in the Phoenix market.
We’ve now become vertically integrated with our own property management company. We have over 140 full-time employees on full benefits. There was a lot of adversity at the beginning, but we were very blessed and fortunate to catch momentum, keep growing, and keep scaling from there.
So that’s kind of how we got to this point.
Yeah, no, really awesome story, Zach. Do you think for you, what was driving you—was it really about time for you? Was it about control? Was it about building wealth during those early years?
Yeah, it’s a great question, Dave. So initially, I thought it was about time, honestly, because I felt like I was just in this rat race job that I had—like golden handcuffs, right? It’s like, well, if I quit, then I’m not going to make this money anywhere else, but I’m so unhappy. What’s the point?
I would say the majority of people in America probably feel this way, where you just kind of feel hopeless. You’re looking forward to the weekend, then the weekend doesn’t meet your expectations, and it’s back to the job on Monday. So I was trying to gain control of my time, but then I realized very quickly I was going crazy, Dave. I had all this extra time, but I wanted to be busy, stressed, and under pressure. I wanted to be grinding, and I almost missed my old job at that point.
It wasn’t even just the money. I mean, the money is nice because it gives you a sense of security and comfort. Also, it’s kind of an indicator that you’re one of the top in your industry, right? If you’re making good money, that was my self-concept. That was my identity. I was the hospice guy. In all humility, I was probably the best in that industry.
Then you go into a different industry where you’re nothing, and I lost all my confidence. You go through that adversity, and so I kind of evolved through that process. At first, I was looking for control of my time, and then I almost started to develop a chip on my shoulder because so many people I knew, including my own family, were like, “What are you doing? You just left $200K a year!”
You go to family events, and people ask, “What do you do?” and you say, “I’m a real estate investor.” Then they ask, “Oh, what do you own?” and you say, “Well, nothing.” It’s embarrassing. I got to the point where I thought, “You know what? I don’t even care anymore what people think. I’m going to do this no matter what.” It was like digging a hole—I was already this deep into it, so I needed to at least buy one deal just to prove to myself that I overcame the challenge. After that, I could always go back to my old thing.
So that’s what it was. It wasn’t really about building wealth. Through that process, I started telling myself, “You know what? To start a company is so hard, whether small or big.” That’s why I really liked multifamily and syndication. As I was trying to discover what I wanted to do—whether it was mobile home parks or something else in real estate—I realized that if I was going to do this, I wanted to have so much upside that it could be enormous.
When I learned about multifamily syndication, I saw that there was no ceiling to how big you could be. When you’re raising capital from other people, you’re benefiting them while growing an unlimited-size portfolio. That’s what really drove me. You go through different stages—mental, emotional, and psychological.
At first, it’s just about getting the first deal. After that, it’s about getting the next deal. Then it’s about scaling, building infrastructure. I think the common thread is the challenge. The competition is really fun. Building wealth is obviously everyone’s goal—we all want financial freedom and a lot of money. It’s human nature.
But when I was in healthcare marketing, I would try to get motivated by my bonuses. I would envision, “Okay, I’m going to do really well this month to make this much money.” During that time, I found that was very empty. I could not get motivated by money. You just can’t. The money has to be a residual, nice thing that you know is coming. Obviously, you’re going to take it, and it’s great, but it cannot be the sole focus because you won’t stay passionate about it.
Right now, for me, where we are as a company, it’s about the competition, the challenge, and being the best in our industry. In the beginning, people doubt you, and you want to prove them wrong. Now, it’s like, “Well, you guys are in a strong market. You got lucky.” So we want to build operational infrastructure and show that we’re a real company.
You go through different stages of it, but yeah, I think it’s the competition and pushing your comfort zone.
Right, no, I find really the psychology of money fascinating, and I think a lot of times people don’t really give enough thought to it. Because really, I think it boils down, especially for entrepreneurs, into four freedoms, right?
You have freedom of money as one, but you also have freedom of time, you have freedom of location, and then you also have freedom of purpose. So, you know, initially, when you’re starting off your career, freedom of money is like the most important thing. You’re trying to drive for that—to have financial security, provide for your family—and it really overshadows other things. But as you start to get freedom of money, you know, you realize how important freedom of purpose is, right? And doing the right thing. And that’s how a lot of people really evolve, you know, in their careers and everything. And, you know, sounds like you were on a super fast track in terms of your trajectory.
Yeah, no, I—yeah, I agree. I think that’s a great point that you make, Dave, because, yeah, it does represent freedom. Because you can do what you need to do, and when you, you know, when you’re deficient, or you don’t have enough money to do what you want to do, then you have to compromise, right, with different things. And nobody wants to feel that way.
That’s why, you know, we love the United States of America, because we have freedoms. And, you know, the more, you know, wealth you can build, you know, for your family, the more freedoms you really do get, and be able to enjoy the things you want to do.
And so—and for me too, it’s like, you know, I like to—I like to just set really big goals so that I don’t get complacent. Like, my goal is to become a billionaire by age 40, right? And a lot of people be like, “Wow, he’s greedy. He wants money. Who wants to be a billionaire?”
And it’s not to just have money and spend it on stupid stuff. It’s just because it’s such a big, lofty goal that I know all the work that will have to go into that. And for me, it’s kind of like a benchmark. Like, it’s—it’s just like—it shows that if you reach that stage, then you reach an elite status of your work ethic and of overcoming different challenges.
And it’s a big, lofty goal, because you always hear stories about people who retire, then they become depressed, right? Or somebody hits a goal, they achieve it, they become complacent, then they’re not happy. And so, you know, I’ve kind of just internally told myself years ago, even when I was going to school and getting my—when I was getting my master’s degree, I was like, “Man, I’m working like 50, 60 hours a week, and then I’m doing this at night. Why am I doing this?”
And I started to realize—because I think, myself and humans, we need to always have a sense of progress, right? We always want to feel like we’re progressing. We don’t always want to feel like we’re staying. And that’s different things for different people, you know what I mean? But we want to have hope for the future. We want to have hope that we’re going to—it’s going to be better in the future. We’re progressing and working towards something.
And so, I think, you know, that’s the power of setting goals, is that you’re always kind of pursuing that and chasing that.
Yeah, 100%. That’s exactly how we’re wired—always trying to drive for more. Super inspiring goal, Zack.
I mean, if you were to—We talk a lot about wealth strategy with our community because we believe it’s not just one particular investment. It’s really about setting up a comprehensive strategy to protect and multiply your wealth.
Especially with that lofty of a goal, do you have a particular wealth strategy that you’re focused on today?
It’s a good question. Yeah, so I’m kind of mixed on diversification. I support different philosophies.
I think in the beginning—I’m a big fan of Andrew Carnegie, the steel maven, and his philosophy. He said, “Put all your eggs in one basket, protect that basket, and grow that basket.” If you don’t have enough resources initially, I personally don’t think you should diversify because you’re never going to hit a big turning point or reach that trajectory to grow exponentially.
For me, right now, 100% of my net worth is in our properties. I’ve never invested passively in any other deal. My dad is a financial advisor, director at Edward Jones, and has been in the industry for 20+ years at Charles Schwab and Edward Jones. I used to have brokerage accounts and money in the stock market, but about four years ago, when I started doing this, I closed all of that. I felt enlightened by learning about real estate, and I don’t believe in the stock market philosophically.
I’m not saying you can’t make money or do well in the stock market—you can—but I believe in what we’re doing. Right now, all my money is invested in this. As you build more wealth, you obviously want to protect it. You can diversify, putting a percentage in a more conservative option and another percentage in something with more risk for a higher yield.
That was one of the things I really liked about multifamily, Dave. What’s the statistic people say—90% of all millionaires made their money through real estate or something like that? For me, I thought, okay, you look at billionaires—I’m not Elon Musk. I’m not going to invent something. The chances of that happening are rare, and I’m not nearly as intelligent as someone like that.
So what can I do? If there’s already a blueprint, I can work really hard. With my focus, discipline, and work ethic, I can just do what other people have done. That’s the beauty of real estate. There are different skill sets and advantages you can use to gain an edge in this industry. Once you start building wealth, then you can start branching into different companies.
If you look at people who have been very successful, they typically had one big company at first that took them to the next level. Then they could start investing elsewhere, but they always kept their main focus on that one business.
I’m a big fan of a book called How to Own Your Own Mind by Napoleon Hill. He’s the same guy who wrote Think and Grow Rich. If you like Think and Grow Rich, I’d recommend How to Own Your Own Mind. It builds on the original and goes more in-depth. He interviews Andrew Carnegie, and this was written in the 1920s or 1930s.
Carnegie’s philosophy is that you need to stay laser-focused on one thing and not get distracted. If you pound away at one thing, you can become elite and reach exponential heights. A lot of people try to do multiple things initially and never become truly elite in any of them. They stay mid-level or average in several different areas instead.
That’s my personal philosophy. I’m not saying it’s right or wrong—plenty of people have made a lot of money and found success through different approaches. But that’s our philosophy, and we’ve maintained that for our company. We’ve intentionally stayed focused on value-add multifamily in the Phoenix market.
We don’t want to get distracted. We want to be hyper-concentrated. We have a lot of equity demand and could easily expand to other markets, but we have our infrastructure here, and we believe we can scale here. I think that’s been a big part of our rapid growth. We keep rinsing and repeating the same thing—using the same materials, the same labor, talking to the same brokers. That’s how we’ve been able to scale without spreading ourselves too thin in different markets.
Yeah, 100%, Zac. I mean, I think focus is really underrated, especially when it comes to growing a business as well as investing. Because, you know, we’re all taught from Wall Street—they throw this word around, “diversification.” And all that really means is, you know, you’re hedging everything. You’ve got some bonds, you have some blue chips, and then you have higher-growth stocks, all mixed together in the pot. But at the end of the day, you can’t really beat the indices.
Maybe 7% over the long haul is really all that diversification means. So if you can have focus within a particular investment class and a particular investment thesis, you’re absolutely right—the results are going to be exponential. So tell us a little bit more about what you’re doing with Rise today. Tell us about the market there in Phoenix, especially in this current environment with interest rates and everything, for people who aren’t familiar with the market.
Yeah, great question, Dave, and very relevant, obviously. So, as we record this in the last week of July 2022, what we’ve seen in Phoenix over the last three, maybe four months now, is a significant slowdown in transaction activity and deal flow. And this is just a microcosm of what’s happening across the country—this is happening everywhere in the U.S. for multifamily.
Because interest rates have gone up so significantly in such a short amount of time, from an underwriting perspective, values are down 10% to 20% from where they were even in March of this year, February or March of 2022. And that’s just from an underwriting perspective—it’s not even necessarily that these deals are selling for 10% to 20% less. They’re not even selling.
Basically, because debt is more expensive on the front end, buyers cannot get to the same prices they could earlier this year. So they’re making lower offers, but sellers’ expectations haven’t adjusted. As a whole—obviously, there are exceptions—most sellers here in Phoenix are now just pulling their deals off the market. They’re not selling because they don’t want to give a discount in the short term due to this volatility.
We’ve seen a significant slowdown in transaction activity. To give some context, we’ve had a deal in escrow to buy at all times for 24 consecutive months. The last time we didn’t have a deal in escrow was July 2020. And right now, we don’t have a deal under escrow. It feels kind of weird for us, honestly, because we’ve always just been on to the next one. I mean, in February and March of this year, we had 10 different deals under contract at one time, which sounds crazy to say. We’ve now closed all of those and haven’t had anything else under contract since.
So, to answer your question about our strategy at Rise48, we’re active buyers and active sellers in this market. We’ve purchased 13 deals this year worth about $760 million. We’ve sold six deals since January 2022, totaling about $170 million. We’re trying to be strategic on both sides of the transaction—as buyers and as sellers.
As sellers, we are not listing any new deals for sale. We just sold our last deal a couple of weeks ago, and we’re not listing anything new for the next two to three months. Like I said, we don’t want to give a discount to buyers in the short term due to volatility. There were a few deals we bought last summer in 2021 that we were fully planning on listing for sale in June, July, or August of 2022 because we had cranked through the business plan and increased the value.
But now, because interest rates have gone up so quickly and buyer demand has slowed, prices are down in the short term. We don’t want to sell a deal early and give a discount, so we’ll probably wait until Q4 to reassess. We want to see if there’s more buyer demand so we can maximize our sales price and returns for investors.
For the last five years across the country, as you know, Dave, multifamily has been a seller’s market—sellers have had the advantage. But now, in the last two to three months, that’s completely shifted. It’s now a buyer’s market because a lot of buyers are on the sidelines. Debt is volatile, and we’re not seeing hard money day one anymore.
Every offer we were making the last several years, we were going non-refundable day one with earnest money. Well, now we have financing contingencies—30 days where your money is refundable. You’re not seeing a lot of that anymore.
As a buyer, we’re actually very bullish on the Phoenix market and value-add multifamily. I know when you look at the mainstream media and see the stock market continuing to decline over the last three months, it feels like we’re heading into a recession. But the good thing is, fundamentally, nothing has changed in Phoenix.
Population growth, job growth, and rent growth continue to remain extremely strong. Over the past few months, even as the stock market declines, we’re having no issues renovating units and leasing them above our projected rents. Everything is going really well. That’s why we’ve focused specifically on affordable workforce housing and value-add multifamily—because it’s very insulated.
This is where the majority of the demographic lives. When there’s an economic downturn or recession, people lose their single-family homes, or they can’t afford luxury apartments, so they all trickle down into this B-class housing.
Looking at our portfolio right now, it’s kind of reminding us of COVID, Dave. We froze during the first few months of COVID in 2020, thinking, What’s going to happen? The world is ending. Then we looked at our portfolio and realized, Wait a second—we’re actually growing our rents. Everything’s going really well.
We’re seeing strong performance right now and are actively making offers on deals, but we have to use very conservative debt assumptions. We have to assume much higher interest rates from a financing perspective.
To give some context, when we started, the first seven deals we bought were Freddie Mac agency loans—typically at 70% to 75% loan-to-value. Over the last two years, the last 25+ deals we’ve bought have been debt fund bridge loans, typically at 65% to 70% loan-to-value. We’ve always been lower leverage—we don’t like taking on a lot of debt.
But now, for every offer we’re making—whether it’s in best and final or off-market—we’re going back to Freddie Mac agency debt. The reason for that is we’re hearing from all different sources that debt funds and banks are retrading terms, backing out, and blowing up deals. People are losing their earnest money.
Freddie Mac, if you get a debt quote, is about as close to a sure thing as you’re going to get. They’re going to execute. The only difference now, Dave, is that because interest rates have gone up so quickly, Freddie Mac has a debt service coverage requirement (DSCR) of 1.25.
So we’re underwriting deals at 45% to 55% loan-to-value—very low leverage. Some of these deals still work, but we’re offering lower prices than we were a few months ago.
Cap rates have gone up in the short term for the offers we’re making. It’ll be interesting to see how many deals in Phoenix and across the country actually trade and sell at these higher cap rates—or if most sellers will just wait until Q4 or Q1 next year if interest rates stabilize.
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Very interesting, Zach. And then, how about in terms of what is the impact of that on investor returns?
Yeah, good question. So, you know, we’re still trying to solve for the same returns. I mean, we’re typically trying to solve between a 1.9 to 2x multiple over five years to the LP and a six to seven percent average cash flow. I think that’s why cap rates are going up, at least for our underwriting. Obviously, we don’t represent the market, but we have been very active in Arizona.
I mean, we’re the number one buyer of apartments in Arizona over the last 12 months, and we do see most of the deals from these top brokers. A lot of them are saying the same things we’re seeing—that we don’t know how investors are going to respond to lowering the projected return. This has all happened so quickly. We would rather conservatively underwrite a deal and make an offer at a price where we can still hit the same projected return.
It’s going to be a higher cap rate, we’re taking lower leverage, and we’re still trying to solve for the same returns with the same conservative assumptions we were using before—actually, even more conservative now. We’re reducing organic rent growth assumptions and taking much lower leverage with higher interest rates, but we’re still trying to solve for the same returns.
We have not yet launched a deal to investors in this new climate because we closed a deal a couple of weeks ago, but we had that deal under contract since the end of February or early March. We had locked in our loan terms a couple of months before we closed it, before things really shot up. We have not yet launched a deal for investors in this new climate.
That’s going to be interesting to see. What’s the demand going to be like? We launched the deal we just closed at the end of June. We actually launched it the day I got to that conference where you and I met up in Charlotte.
I was nervous, honestly. I thought this was probably the deal where we lose our earnest money because everybody’s freaking out, the sky is falling. But we raised a lot of money. That was one of our biggest raises ever, and the exact opposite happened—we had the strongest demand ever. We were just shocked. We blew the top off with so many people wanting to invest.
I think it’s because a lot of retail investors don’t know where else to go. They don’t trust the stock market. Crypto makes no sense. Even if you’re not a very sophisticated real estate person, the mainstream narrative that inflation is bad and keeping your money in the bank is a losing strategy—that’s something people understand.
It’ll be interesting to see how things go moving forward. Just yesterday, as you know, there was a 75-basis-point increase from the Fed. We’ll see what happens next.
Yeah, for sure. If you had your crystal ball and we’re sitting here this time next year, how do you think things are going to play out in 2023?
Yeah, good question. Again, I don’t have a crystal ball, but if you want to play crystal ball, what we think will happen is that in the fourth quarter of 2022 or the first quarter of 2023, you’re going to start to see indications that inflation is slowing.
Once you get indications that inflation is slowing, a lot of these lenders are going to start decreasing their spreads. For example, most of the loans that have been done for value-add multifamily in the last two years have been debt fund bridge loans across the country. These debt funds, for the most part, are publicly traded companies. They’re REITs, mostly based out of New York City, and they have to provide quarterly dividends to their investors—thousands of investors. The only way for them to generate a yield and pay those dividends is to deploy capital. They have to lend money.
What’s been happening over the last several months is that a lot of these debt funds are just not deploying capital because there’s too much volatility. As the Fed has increased the Fed funds rate, that affects the SOFR index, which is what all of these lenders for multifamily are using. Your interest rate is made up of two things—your index and the interest rate spread or the profit margin the lender takes.
Because of speculation about several rate hikes in the future, lenders have to protect themselves against the unknown and volatility. They’re baking in these increases at least three to four weeks before they’re even announced, which makes the spread go up. The spread is going up, the index is going up, and you end up with a much higher all-in interest rate—moving in the wrong direction on both ends.
Once there’s some indication of stability, even if interest rates settle at 6% and stay there or decline, lenders can stop increasing their spreads so much. They’ll want to start decreasing spreads to incentivize borrowers to take loans, so they can deploy capital. We think that either in the fourth quarter or the first quarter, you could see a surge of lenders cutting their spreads because they have to put capital out—similar to what we saw in 2021. In 2020, things froze, there was pent-up demand, and then equity and debt needed to catch up.
We’re hopeful that’s what will happen. A lot of people have talked about a “bullwhip effect” where the Fed has overcompensated by raising rates too quickly. They’re obviously trying to cause a recession to bring inflation down and increase unemployment. But many believe that by the fourth quarter or first quarter, they’ll have to slow down or decrease interest rates.
If you look at Chatham Financial and some forward-looking interest rate curves, they’re projecting rates to go down significantly next year. It’ll be interesting to see how things play out. In the short term, we’re not selling anything. We’re looking for opportunistic buys—maybe a distressed asset or a seller willing to accept a lower purchase price. We’re gearing up in hopes that by the first quarter, things will stabilize.
Great insight, Zach. Let’s transition for a minute. I know you co-authored the book Success Habits of Super Achievers, and I’m a personal productivity junkie—as I know most of our listeners are. Tell us, what was your biggest insight from writing that book, and what takeaways can you share?
Yeah, so to be 100% honest with you, I didn’t really feel like a real author of that book. It was one of those things where a bunch of people submit a chapter or passage. I was basically just sharing my story and the things I do to be successful.
I’ve tried a lot of different things, and I think you had a good point earlier, Dave—focus is so overlooked in being successful. If you can be one of the most focused, disciplined, hardest-working, and consistent people over time, you can achieve massive success, even if you’re not the smartest or most talented.
That’s kind of the role I’ve always assumed—this underdog mentality. I don’t think I’m the smartest or most talented, but the things I can control are focus, discipline, and hard work. I think that starts with personal habits. For me, being a college athlete helped build that mindset. It was tough—I’d wake up at 5 a.m., do sprints, work out, and follow a strict schedule. I was always working full-time while going to school and playing football.
I’ve tried different approaches. I did the whole “wake up at 4 a.m.” routine for over a year—the Miracle Morning Millionaire approach. It worked well for a while, but as my business got busier, I had to stay up late catching up on work. Now, I wake up around 6:30 or 7, and I don’t work out in the morning anymore—I work out at night.
Some of the things I do daily include drinking two gallons of water. It sounds crazy to some people, but it gives me a lot of energy, and I’ve done it for years. Every weekend since 2015, I’ve meal-prepped my breakfasts for the entire week. Every morning, I have four eggs, two egg whites, three slices of turkey bacon, a piece of toast with almond butter, and an espresso with coconut milk from a cheap $40 machine. Hydration and a good breakfast are key for me.
I work out four times a week and always stay consistent. For me, it’s about mindset. I do a lot of deep stretching to relieve toxins and reflect. On weekends, I work out a lot—four and a half to five hours on Saturday and a couple of hours on Sunday. It sucks when I wake up, and I don’t want to do it, but I know I’ll regret it if I skip it. As I push through the workout, I envision the challenges I’ll face during the week—the stress and anxiety—and it prepares me.
I focus on hydration, eating healthy, and discipline. I don’t really drink—not because I had a problem, but because it dehydrates me. I don’t do drugs or smoke weed like a lot of people do because I always want to stay sharp. Staying disciplined in my personal life helps clear my mind and prepares me professionally.
I hardly watch TV. My wife, Grace, and I watch a movie on Friday night and UFC on Saturday—that’s it. These are just some of the things that work for me. I’ve adjusted my schedule over time depending on what I need to do.
Right, no, you’re definitely speaking my language. What’s interesting is that the brain is actually a muscle, and people often approach exercise just from a physical perspective. Some stretch or do yoga because something hurts, but when you go deeper, it’s really about mental performance—reducing stress and anxiety so you can be healthier and more present for work, family, and life. That’s what sports and training have done for me over the years—it gives you that spark, that energy.
You’re a former military veteran, Dave, so for you, it’s about getting the plan in focus and grinding it out.
Yeah, absolutely. It shapes you. When I talk to my kids and others, I emphasize that creating strong habits is critical to success. Whatever you do in life, if you want to be fulfilled, you need discipline. There’s a bit of a yin and yang to it—you can’t experience high highs unless you’ve had some really low lows. That’s just how life works. The more you understand that, the more comfortable you become with adversity and working through it.
That’s really awesome, Zach. Just one last question—if you could share just one piece of advice for accelerating wealth trajectory, what would it be?
Yeah, I think when it comes to accelerating your wealth trajectory—or even just pursuing your goals—my advice is simple: don’t listen to anyone who tells you that you can’t do it. And don’t take crap from people who aren’t there to support you.
One of my biggest challenges when I started was that I already lacked confidence and felt insecure about whether I could succeed. On top of that, I’d meet people—some I knew, some I didn’t—who would say negative or discouraging things, and it would crush me mentally and emotionally. There were several times when I just quit on myself, thinking, I can’t do this.
But you can’t let that stuff get to you because, at the end of the day, if you have a goal, you are the only person who can put in the work and push through the adversity to achieve it. Nobody else can do that for you. So why would you listen to someone who says you can’t do it? They have no idea what you’re willing to sacrifice or how hard you’re willing to work.
Even when you get advice from people who have done what you’re trying to do, if they tell you it’s not possible, sometimes they’re just projecting their own insecurities. Maybe they feel threatened because your ambitions are bigger than theirs. Maybe you’re younger, older, or coming from a different background, and that challenges their perspective.
So my biggest advice? Stay laser-focused on your goal. See it through. Don’t let outside opinions distract you. It’s tough, especially in a world where we’re constantly bombarded with social media, text messages, and opinions from everywhere. But you have to get to a place where you don’t care what people think. At the end of the day, your results will speak for themselves.
Yeah, that’s great. It really all starts inside, doesn’t it?
It does. Like we talked about earlier—it’s all mindset.
Yeah, Zach, I can’t thank you enough for coming on the show today and spending time with us. I know how much you have on your plate, but I think this is going to be a fantastic story with lots of great lessons for our listeners. We hope to keep tracking your success and maybe partner on future opportunities.
Yeah, of course. Thanks so much, Dave—really appreciate the time and for having me on today.
Sure! And Zach, if people want to reach out and connect with you, where’s the best place to do that?
Yeah, thanks, Dave. You can visit our website at rise48equity.com—that’s Rise Four Eight Equity. You can also set up a call with me if you want to learn more about what we’re doing. Or you can email me directly at [email protected]. We’re also active on LinkedIn and other social media, so feel free to connect. Looking forward to chatting with anyone who’s interested!
Awesome. Thanks again, Zach!
Thanks so much, Dave.