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In our latest episode, we had the pleasure of hosting John Casmon, a distinguished real estate entrepreneur with an impressive track record of partnering with busy professionals to invest in over $100 million worth of apartments. He Co-Founded MidWest Real Estate Networking Summit, a must-attend event for anyone serious about multifamily real estate.
John’s journey into multifamily real estate is nothing short of remarkable, and during the show, he shared invaluable insights into how anyone can leverage this investment strategy to build wealth while pursuing your passions. His podcast, Multifamily Insights, has become a valuable resource for those looking to delve deeper into multifamily real estate.
In our engaging conversation, John walked us through his transition from the corporate world to becoming a full-time real estate investor, shedding light on the challenges he faced and the strategies he employed to overcome them.
One of the key takeaways from this episode was John’s role as a consultant for active multifamily investors, where he helps them start or grow their businesses. He generously shared some of his most effective techniques for scaling up a real estate investment business, and how to identify and capitalize on opportunities in the multifamily market.
John Casmon’s journey from marketing guru to multifamily real estate magnate was a true inspiration for anyone looking to explore this investment avenue!
In This Episode
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His transition from a career in corporate America to becoming a full-time real estate investor
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The power of multifamily real estate as an investment strategy and wealth-building tool
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Targeting the midwest market and it’s current demographic
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Strategies and tips for identifying and capitalizing on multifamily investment opportunities
Welcome to another episode on Wealth Strategy Secrets. Our next guest is John Casmon. John is a distinguished real estate entrepreneur with an impressive track record of partnering with busy professionals to invest in over 100 million worth of apartments.
He co-founded Midwest Real Estate Networking Summit a must-attend event for anyone serious about multi-family. He’s also the host of the multi-family insights podcast and has become a valuable resource for those looking to delve deeper into multi-family real estate.
In this episode, we discuss his transition from a career in Corporate America to becoming a full-time real estate investor, as well as the power of multi-family real estate as an investment strategy and wealth-building tool targeting the Midwest market and its current demographic. I hope you enjoy the episode.
John, welcome to the show.
Dave, thanks for having me today.
You bet. It’s great to have you on the show. And I know listeners are going to enjoy the discussion. So why don’t we get started and talk about your journey? I know you transitioned from Corporate America and got into real estate, and I’m interested to hear how you made that transition for yourself.
So I spent 15 years in corporate America doing marketing and advertising. So I worked at General Motors at one point. I worked for different advertising agencies and loved what I was doing, but I kept running into this issue where job security was a concern of mine. So I was at GM when we went through bankruptcy.
So I saw that firsthand and that was, I’ve had some, I had a fellowship program before out of college, but that was my first like real like corporate job, Settled in. I’m working with a bunch of lifers. So like for me being at that kind of that company at that time, it was important because you didn’t see a lot of young people period, and especially someone who looked like me. So I enjoyed my time there and enjoyed working at the company.
But I watched us go through rounds and rounds of layoffs and My father was blue collars. They come right. He worked two jobs in his life, He’s, he worked for a Buick dealership. Ironically, I ended up working, on the Buick advertising team. He worked at a Buick dealership in the parts department. And then he worked for a steel company. So he’s had two jobs. He’s that’s what he instilled in me. It’s hard work. You get a good job. You keep it, you work it until you retire. They get to go watch. That’s the mentality. So when I’m watching all these people get let go prematurely or being forced to retire early.
They didn’t have a plan B and that made me realize that as much as I liked stability, the only way to truly create stability was to take control completely over your financial future. So that got me interested in real estate. I would say I was already interested. That forced me to say you better figure out something else. So I started learning about real estate. I was still in Detroit at the time, so Detroit was not the best market, or depending on how you look at it, it was a great market to invest in back in 2009, and 2010, but I certainly didn’t have the confidence to think that I was going to go out there and do well investing in Detroit. So I moved to Chicago, in 2011, and got a job at a small advertising agency. That company grew and I was a part of the growth of that company.
The only way to truly create stability is to take control completely over your own financial future.
And then I started investing on the side and I slowly started building up my portfolio. And then right around the time when I was ready to scale and started working with investors and grew on this business, the company I was working for also went through bankruptcy. And that was scary. But it also pushed me to say, you were on the right path. This is the conviction you need to continue to pursue what you’re doing. That got me uncomfortable, but helped me focus on not investing in real estate and apartments, but going larger into apartment syndications and doing larger deals.
What an interesting story. I know for most people, there’s always some right epiphany that you have along the way that gives you that insight to say, hey, I’ve got to move forward, I’ve got to take action. And that resonates with me, John I came out of corporate America, after the Marine Corps, and had similar frustrations, right in terms of being in this massive machine that you didn’t have all that much control over.
And we think, we falsely think that we have this job security, but in reality, there’s a lot less, and so when you can make that paradigm shift and transition over to having more control over your destiny through entrepreneurship as well as passive investing, it’s a massive shift.
David, I think too, like even if you, like I loved my job I know some people, they want to quit their job and they’re miserable. That wasn’t me, man. I had a great job. I was doing fun stuff, great activities. I enjoyed what I was doing, but I also was very conscious of the fact that at any moment that job could be taken away. Or even if it wasn’t taken away, they may ask me to do something that I don’t enjoy doing.
And in corporate especially at a big company like GM, you have to sometimes check a box and make lateral moves to move forward. So I might have to go into the field and be a sales rep or things that I didn’t enjoy. I didn’t go to school for that. I didn’t I wasn’t passionate about that. And I started to realize, like, oh, like now I have to play the game and do certain things that I don’t want to do and do them for two years or whatever it is.
And that started to weigh on me, And I think that’s the important thing too, is that you can love your job, but at any moment you may not love it, or you may be pushed to do something else, and you want to have that flexibility.
As you stated, passive investing, passive income, doesn’t mean you gotta quit your job tomorrow, but it does give you options, and it does allow you to focus on the things that are important to you, and get that clarity that you need, so you can build a whole life not Real estate, I know you talk a lot about the holistic investment strategy and the holistic self, but that’s what you’re targeting, You want to be a great father, you want to be a great husband, you want to be a great son.
All these different assets or facets of who you are. It’s hard if you’re focused on the W-2, which is grinding and grinding. So for me, I think it was really important to create options to be the best version of myself or at least a better version of myself or at least better version of myself.
John, I think you created this it’s this freedom of purpose that we’re after and having that purpose in your life. Because when you have a purpose, you’re not working. And you can have a purpose in corporate, but you have to be careful as you do it. And then as you say, if you can create this passive income that’s coming in, it changes how you think about things, you may not necessarily have to be forced into doing something by knowing what you have options as you say. So it’s powerful.
If I could share a quick little story, there’s when I was at GM and we were going through bankruptcy, everyone had high anxiety, all of us from the leader of the brands that I was working on to the junior analyst every day. It was just it was tense everyone was on eggshells except one guy. There was one guy who every day this guy had a smile on his face. He came in. He worked from 7:30 to 4:30. He did a good job, but he wasn’t trying to get promoted.
He wasn’t worried about any of the political stuff. He came in, did his job, and had a smile on his face. And he was one of my favorite people at the company. His name was Jack. And I remember talking to Jack and kind of off to the side. I was a young guy, I was in my mid-20s. So they, when you’re young like that, the older guys, they, they’re happy to pull you to the side and mentor you a little bit. And we would chat and have good conversations. And the one thing Jack told where I learned about Jack, is Jack had other investments. You know, he had property in Utah. He had other things that he did. He had a snowmobile, so he would take his family out and spend a couple of weeks a year skiing and on a snowmobile.
And real estate was the thing that gave him that flexibility. So the reason he could come to work happy every day is because he didn’t need it. He was there because he enjoyed the work he was doing. But if they told him, hey, your time’s up, he’d be like, all cool, I’ll go do the other stuff I want to. That was the thing that struck me.
It wasn’t his boss, his boss’s boss, the people who were making the big salaries, the big bucks, because they had all the stress of this house crumbling down. If something happened. And I watched that happen to a senior executive who moved from California to Detroit, and then within a year or a year and a half, they moved her and her family to Shanghai and she had high school kids.
And I’m picturing like man, do I want to reach that level where my kids may be forced to move states or countries and not be able to make friends because I’m chasing a promotion or a dream?
And you can say no and all of that, but it made me come to grips with like, which path do you want? You want to live like Jack, or do you want to live like this person who makes more money and has maybe the nicer things, but you know, doesn’t have that control of the time, the financial freedom, the flexibility that they’re looking for. And that put me on that path to say Let’s try to see how real estate can help us live the life we want to live.
100%. And did you develop a particular investment thesis or a wealth strategy as you transitioned into the investing world?
I did. So I studied a lot. And when you don’t come from that place, you don’t have a lot of folks who can teach you early on. You have to use all the resources available. And for anyone listening now, I mean, we’re blessed because you can Google pretty much anything you want to know. You may need to double-check sources, but the information is abundant. I mean, back in that time, man, I’m sounding like the old guy back in my day.
But it’s not that long. It was like 15, 20 years ago, So there, you can still Google, but you know, it wasn’t like everything was out there. But you know, at that time we still went to the library, to go get information. So I would, I would get books and I would check out books and I would buy some books, but sometimes I would go to the library and check on a book and read it and it was from personal investments or personal development, budgeting, like all these kinds of things. Because first I had to figure out how to make the money I had to work.
Then how do I grow the money I have, and then ultimately how to invest? And that was a path that I had to go on and it was very helpful for me. But from an investment standpoint, real estate made sense to me. I thought about the people who I thought had money and all of them had real estate and there’s that famous quote that 90 percent of the world’s billionaires at least either make it through real estate or hold some of their investments in real estate.
So real estate was something I wanted to learn early on. And once I got into real estate and started learning more about that everyone I read or at least talked to, talked about commercial real estate and multifamily. So I knew multifamily was where I wanted to go and that’s why we started with a duplex and not the biggest, but it worked because, like a house hack, I lived in one unit, I rented out the other unit, then we bought a three-unit building.
Then we bought an eight-unit building and each investment was continued to test this theory, The two-unit, okay, I was living in one, renting out the other. For me, if I could have someone pay the bulk of my rent because that’s how I looked at it, I was renting before, well, someone else is paying the bulk of my rent, I’m up, I was paying $1,500 in rent, I bought this two-unit, the person on the first floor paid $1,400 in rent, my note was around $2,000, so my portion of the rent was $600.
So in my mind, I saved 900 bucks, with this investment even if it didn’t appreciate anything else, I cut my rent down by $600. It did appreciate and go up in value. And at that point I’m like, oh, this thing works. So then I did it with the three units. Now I’m cash-flowing. So I’m not getting my rent cut down. I’m getting money and making money every month off of this. Then with the eighth unit, it was a matter of being professional and seeing if I could make this a real business. Right now it’s commercial multifamily.
I have a professional property management company, which was mandated by the lender, by the way. But I have this professional property management company. So now I’m testing out these theories. I want to make sure it’s not luck. I want to see like, OK, is this repeatable? And that was when we ran into a few more issues, but it was great because I was able to confirm the things that I believed in. And at that point, that’s when I decided to start scaling into much larger apartment deals.
And you’ve got quite a portfolio today, correct?
I think our current portfolio is around 400 or 500 units. We’ve been invested in over 1200 units and over a hundred million dollars worth of apartments. Again, we’ve gone full cycle on a number of those assets. But the stuff we have in our portfolios is doing well. We’re excited to expand. I know a lot of folks are nervous about the current market cycle, but we’re pretty excited and cautiously optimistic. But we’re excited because we felt like.
The pricing guidance is coming back down to where our underwriting naturally fits. We think this is a great time to add to the portfolio, especially as some folks are sitting on the sidelines. This is a great time for some of the, I’m going to say smaller, quote-unquote, smaller players, but this is a great time for some of us to get in there and add to our portfolio.
Nice. And are you seeing increased deal flow right now?
We are and the incredible thing is that conversations we’re having with brokers are almost 180 from the conversations we were having 12 to 18 months ago, 18 months ago they had all the juice I mean, they had all the power. They had 20 offers on a deal. They didn’t need you you were going to have to jump your number to make something happen. And now I think both brokers as well as owners recognize where the market is.
And we were waiting on this realization to catch up, I mean, for the last year, at least the last six to nine months, we’ve all been like, there’s still this imbalance of where sellers think the market is and where their prices are and where buyers think the market is.
And now we’re seeing that come a little bit more in line. And the reality is if you don’t have to sell today, you’re probably not selling. It’s not an ideal time to be a seller. But there are a lot of people who have to sell. We’re seeing stuff where people maybe came in a couple of years ago with their deals, they’ve got a rate that’s expiring.
So the loan’s maturing, they’ve got to do something. The new loan won’t match. Interest rates over the last two years have hurt their ability to implement their value-add strategy. So we’re seeing opportunities now that we probably would not have seen at all over the last 12 to 24 months. So we’re seeing more deal flow. We’re excited about that deal flow. But we also want to make sure that we’re being conservative and taking a look at the market and understand the worst-case scenario as well as what the upside could be.
Sure. And are you doing anything to mitigate risk in this environment?
The biggest thing for us is making sure we focus on cash flow first. I think for us, that’s never changed. That’s been one of the challenges we faced is a lot of groups will go in and even if a deal has a negative cash flow out of the gate, they believe they can create the value over time, to make that up. We’ve never really looked at it that way. We always want to find deals that have positive cash flow where there is a clear path.
For us to add more value to that property and extract that value either through a refinance, a sale, or simply have that equity built into the project and then sell whenever it makes sense. So for us, that hasn’t changed, but I think that philosophy and that approach are becoming more and more popular. And I think not everyone, but a lot of people are thinking about it that way now. So we’re seeing that where we’re coming in on some of these deals is more in line with the market. I think in the past, people are treating it almost like flipping a house, whereas who cares what I pay for today as long as I can make some money, I’m good.
And now people are saying, wait, what’s the going in cash flow? What’s going on in DSCR? So we’re spending more time to make sure the going in DSCR is positive. It’s going to be cash flow day one, but we still want that path to create value for our investors. Because to me, that mitigates the risk, especially if you’re buying these assets at a higher interest rate, because if it works today and rates stay high, well, you still got good cash on the project, especially if you’re going to add value. But if rates come down, well, you’ve built even more equity for that next for yourself. And then obviously an opportunity for that next buyer.
We’re seeing the same thing, where operators, if they’re focused on actually doing that value add, and you can start driving up that value as soon as you take over, ownership of the property, it increases the value of the asset. But I think in the past five years, I mean since the market was so strong, there were a lot of people probably betting on appreciation.
But some of those people, as you say, are now upside down right now, or it doesn’t make sense based on the underwriting that they put in place three years ago. What do you, from a debt perspective, how are you approaching the debt markets right now? Rate caps are very expensive in terms of the acquisition, so how are you playing that out right now?
That’s a great question. I think it’s really important to select the right loan based on the business plan for that product. I know a lot of people are of the mindset of we only want to use fixed rate or Hey, we you know, you don’t hear as much today, but some people, want flexibility. So they’re only using bridge debt. I would say that for us, we want to understand what the business plan is for that property. And I’ll give you a clear example.
If you have a clear path to add value and a substantial amount of value, and you can validate that based on comps in the marketplace, then there’s still an opportunity to use Bridge because you don’t want to lock in a 7% interest rate for 10 years where you’re going to create a ton of value and you can do nothing about it for 10 years. So in that scenario, I think Bridge may play a role. I would push to say You have to be able to validate that you can create that value.
So it’s not 50 rent $50 rent bumps. It’s got to be substantial, It’s got to be a substantial amount of value that you’re going to create. If you’re not going to create that level of value, then I do think fixed financing makes sense and gives you some flexibility. Maybe you pay down the prepayment penalty. Maybe there are things you can do where if the market does heat up and you want that flexibility to sell early. You have that ability even to add a supplemental or to have an assumable loan.
So there are things that you can do there that give you some flexibility. But I would say for us, Elise, we’re trying to make sure that we understand what the business plan is for that product. And then we want to match the loan with that business plan.
That makes sense. And what would you say, John, is your philosophy around the hold period? Because it is interesting. Some operators have different models where some will exit, say a three to five-year exit, and build the value, but others are really in it for the long term, they might do a refinance in the future to get some of the investor capital back out. But they go in with a lower LTV, and they look to just cash flow in the long term.
It’s a great point and a great question there. So for us, I go back to the business plan. If you’re looking at a particular property, I would say generally speaking, newer, nicer assets, we are comfortable holding longer term. For older assets, we are typically looking to exit those deals a little bit earlier. If for us, a five-year hold is our standard. And then we add accordingly. There’s a deal that we’re getting ready to do.
And on that deal, we have an eight-year loan, which is unique. This entire loan is unique, but it’s an eight-year loan. It’s similar, it’s a crazy low interest rate. But on that deal, we are projecting a five-year hold. But at the back of our minds, we’re going to explore a sale in year three, because we want the next buyer to have the ability to come in, assume this loan, and have five full years to keep this really low interest rate loan for themselves.
So stuff like that, I think comes down to it. And I think you’ve got to factor that into your plans as far as the length of the holds, and how much upside you have. It’s also for us, we try to take the long view and then we want to be opportunistic if the market affords us that.
So we don’t want to sell so we can say, oh, we got a 20% IRR for investors. Like we’re not trying to play into the vanity metrics or check the boxes to say we did something. Um, if we’ve got a deal that’s performing and we don’t have another deal or a better solution or another opportunity, we’re going to keep our investors in that deal.
If we’ve got a deal that maybe it’s not performing as well, for whatever reason, then yet we may decide Hey, this is It’s performing, but it’s not maybe achieving the standards that we’ve set. Then we may say, hey, maybe we trade this one out and see if we can find a deal that better suits our investors’ needs.
So I think some of that comes into play as well. But generally speaking, we try to take a little bit more of a longer-term view and then be opportunistic if the market’s in our favor versus going in and assuming we’re going to be in for two or three years. Because I think that’s I think that’s fairly risky, because who knows where the market’s going to be in two to three years. I’d rather have the ability to be flexible and let’s see where it makes sense for us to sell.
Agreed. I think there are pros and cons to both scenarios. And looking at it from the investor perspective sometimes if you have to redeploy capital, you’ve got to go find another deal, and get that capital to work for you. And if it’s been performing well in an asset, why do you want to disturb that? But on the flip side, one thing I think a lot of people don’t think about from that investor perspective is that If you transition in five years, you start the clock again on your bonus depreciation. From a tax standpoint, it can be better to turn that capital versus holding on to it longer term.
Yep, absolutely. And the other thing that is something that a lot of you don’t think about, is what you said about being able to start the clock on bonus depreciation. Well, for a lot of the depreciation, it’s a five-year depreciation. So if you wait five years, you don’t have to recapture that portion. And a lot of folks don’t think about that. So if you sell in two years, you’ve got to recapture a lot of that depreciation.
But if you sell it five or you’re six, a good chunk of that, you won’t have to recapture. So there are some perks in doing that and not getting into the loan pay down, If you’re not an IO-only loan and you are making the principal payments, well, you’re also building equity from operations. So there’s I want to say safety, but there’s some security in having an asset that is building equity from making the monthly mortgage payments because now you have that paydown on the principal, so whenever you do go to sell.
There’s more value there for the investor. So there’s some perks in holding on longer, but I think to your point some investors certainly want to rinse and repeat and there’s the time value of money and that’s what IRR is calculating. So we certainly want to make sure that we are keeping all of that in mind and being, like I said, opportunistic, taking all those inputs and then deciding when it makes sense to either exit or roll into a new investment.
Yep. John, tell us a little bit about your market. You know, typically the sunbelt gets all of the noise. Everyone’s in the southeast, southwest. So tell us a little bit about your market.
So I’m based in the Midwest and I’ve got a lot of love for the Midwest, The Midwest is misunderstood. People don’t understand it. You know, I talk to people all the time, your friends friends that I know. And they think the Midwest is only cash flow and there’s no appreciation. And I think some folks, when they hear Midwest, they think Toledo or Detroit or accurate or these places where all you can get is a 10 percent cash or cash return. And that’s what they’re looking for.
Certainly, there are markets like that, but I would argue of markets like that in every major metro. The Midwest has some of the strongest growth markets in the country. Columbus is a very strong market. Indianapolis is a very strong market. Louisville is good. Cincinnati is good. What I would implore people to think about is the balance of cash flow and appreciation, particularly at a time like this. You know, some markets are boom or bust. You know, we talk about some of those coastal markets.
Phoenix, their markets are not Pickle Phoenix, but Phoenix, Vegas. Some of these markets are very cyclical. And when the market is doing well, we saw 20% rate growth in some of these markets, I think 24% of some markets. That’s amazing. It’s not sustainable, though. And if you go up 24% and then come down 10 or 15% the next year, how valuable is that for you as an investor to be able to predict the future growth?
So one thing I like about the Midwest is it’s very sustainable. It is I don’t want to say predictable, but you can project with some accuracy what the growth rate is going to be, and what the demand is going to be. There’s not as much new development, which as an investor is good because that’s less competition from new housing stock. If you buy a 1980s building, but every year brand new class-A buildings are going up around you. Well, your property is not going to be as attractive.
You know, you won’t be able to compete in a lot of art markets. They build class A buildings, but for the B-class area where we invest in, it’s really difficult to build B-class products in the Midwest that are going to be comparable. So typically speaking, if we’re going in with a value-added strategy, we’re going to have a fairly nice product that can compete with some of the newer, nicer stuff. Not exactly, but it’s a nice compliment or a nice alternative to those assets. So I love the Midwest. We still stick to the fundamentals.
Again, we want to invest in markets where we’re seeing population growth. I still want job growth. I still want to see rent growth. I want to see overall appreciation. I want to see demand growing. I want to see which employers are coming into the market. What thing that I love about the Midwest is the growth is usually in sectors like logistics and healthcare and things that tend to be recession-resistant.
You juxtapose that with maybe some markets that are driven by technology or driven by hospitality and travel and leisure. Those markets tend to suffer more during a recession. So I like the fact that you know, if you think about it more plainly, people in the Midwest live in the Midwest because that’s where they’re from. They have family there. They’re comfortable there. You’re typically not, I mean, Chicago is different, but people typically aren’t waking up and deciding they want to live in Louisville, If you’re not moving from California to Louisville because you want a culture change, You’re probably going back to Louisville. Maybe that’s where you grew up. Maybe you’ve got family nearby. So those people are staying for reasons that economics won’t impact. Again, when I look at Vegas or Phoenix, there isn’t a pick on those markets. But those people are typically going because they have a high-priced job there.
There’s a tech company there. They graduated. I’m going to move and go live there. Same with Chicago and New York and these cities, too. But they’re moving for that. But as they start to settle down, have a family jobs disappear or whatever their layoffs. Well, there’s no reason for them to be in those cities anymore. So I like the Midwest for the stability of those markets. And a lot of it is with that underlying understanding of why people live in those markets and why they choose to call it home.
That’s a good breakdown. I was going to ask you about the demographics, Because we all hear about people moving to Texas, moving to Florida, the Carolinas, But what is the actual population growth in the Midwest? I mean, generally speaking, Is it growing or is it maybe at a slower growth rate or what does it equate to?
it’s growing. It’s at a slow, a little bit of a slower growth rate. And again, the Midwest is not a one single market. So I would say when I’m looking at it, I’m looking at again, the Columbus, Indianapolis, Louisville, Cincinnati, those markets are seeing really good sustainable growth. They’ve got different jobs there, different industries that are driving it. I’ll take Louisville as an example. Health care, logistics, and UPS are there. FedEx has a a big footprint there as well. They’ve got some automotive manufacturing in that market.
So if you think geographically, look at it on a map. Well, it makes sense for logistics to be there because it’s an easy way to access the Northeast, the Southeast, the West, You can get to a lot of the parts of the country in those areas. Cincinnati, Amazon built a one-and-a-half billion dollar airport hub, An air cargo hub of their own so that they could get in and out and do same-day shipping.
So these are the things that are driving the parts of the Midwest, not to mention health care and some of the other industries there. Eli Lilly’s in Indianapolis. So we have a lot of those kinds of things that are that are sparking growth. But again, it’s not unilateral. So while I was born and raised in Cleveland, I love Cleveland. You’ll never hear me say anything negative about Cleveland. Unfortunately, Cleveland is a macro market, and the metro itself is not growing. OK, it’s stable but it’s not growing.
So that’s one of the things that we have slight concerns about Cleveland, Then you get into the ease of doing business and all the policies. So there are some markets where we don’t focus on those markets for reasons like that, but the markets that I mentioned, I would match them up with some of the more popular markets in Texas and Southeast region. And again, they’re not, it’s not Dallas. No one’s trying to say that it’s Dallas.
But I think too, when you look at the competition, when you look at the new development, I think it stacks up, most of those markets stack up very nicely with what you’re seeing in some of these other metros.
What are you thinking about 2024 right now in terms of where is the market going to be? Where are the opportunities going to be?
You know, there’s a mantra you hear from a lot of people, which is to survive till 25. What I would say is I think is going to be a great opportunity for those who are looking for deals and looking for opportunities. But you’re probably you probably don’t want to sell in 24. You know, you probably want to wait until the market settles down where interest rates are going to be in a place where people know what some level of certainty what to expect in the next 12 to 24 months. You know, you can read every report on where rates are going to be, one more rate hike and rate hikes have stopped. Who knows? For me as an investor, I go back to where we were before have a longer-term view.
You know, let’s make sure we have deals that cash flow, we have deals that we have a business plan that we believe in, deals that we have a business plan that has flexibility built into it. And if you’re doing it that way, you’re a little less concerned about
Trying to time the market and where things are going to be at 24. It doesn’t mean that you’re put your head in the sand. But on the same note, people there have been people waiting on a sideline since 2018. Right? I mean, in 2018 everyone told me that the market was going to collapse. You want to sell all your stuff, Rates are going to go and then COVID hit 2020.
Okay. Well now it’s going to hit right now is the time everything is going to crash. You got to sell your stuff and wait and we saw everything go up. So I’ve been hearing this for years and years and years, and it’s not to say that I want to dismiss it. I believe it.
However, I think the key here is to find the solution. The solution is don’t worry about selling in 2024. Figure out deals that give you flexibility. If you have deals in your portfolio now that don’t have that flexibility, you need to be pushing it now, either refinancing or looking to sell or rearrange your portfolio. But now is the time to have flexibility with every single asset in your portfolio.
So that you can take control over whatever happens in the market. And you’re not worried about where things are going to be in 2024. And more specifically, like all we got to refinance by May or whatever the time frame is. You want to have that control so you can sleep at night and make some business decisions with the assets in your portfolio.
Absolutely. I think that’s the beauty of the real estate, If you have that three to five-year window that hold period, you’re able to have the flexibility with the asset to plan long term. And especially when you compare that against the equities markets, which most people are always trying to react to.
And you look at investor psychology and that’s how investors are losing Because they’re getting emotionally involved and this went up, this impacted this, I got to change, I got to move, But with real estate, it’s a much more, it’s slower, it’s a more systematic type of approach. And I think it’s more of an all-weather approach as well.
Dave, there’s a quote that I love and I have stolen it. But in real estate, the values only matter on two days. The day you buy it, the day you sell it. And if you could control that second day, you’ve got all the power. The problem is if you don’t have good cash flow or you’re in a situation where your loan comes to where you don’t get to control that second day. So for us, our whole philosophy is to control the day we sell. And if you do that, you’ll be OK.
Love it. John, if you could give our listeners one piece of advice about how they could accelerate their wealth trajectories, what would it be?
I would tell them to figure out what their biggest challenge is and then think about a solution. Set differently, not to get into mindset too deep, but it’s really important to ask yourself how can I do this? How can I save a million dollars? How can I add $10,000 a month in passive income? If you say how can I, You’re setting up the solution and the answers. Too many people, I think, start with, oh, I can’t do that, or I don’t have that, or, oh, it’s easy for John to do it, or it’s easy for Dave to do it. And they dismiss it and they cut it off before they have a chance to brainstorm potential solutions.
So I would urge them to ask themselves, how can I, and then you fill in the blank with whatever it is, how can I invest in real estate? How can I? Add $10,000 of passive income in most of my portfolio. How can I add a million dollars in assets? And if you start asking yourself, how can I, now you can start to understand what those potential solutions are?
Sage advice. It’s been a pleasure having you on the show, John. Appreciate all the insights and wisdom. And if folks would like to reach out and learn more about what you’re up to, where’s the best place?
Listen to our website we have a bunch of different resources including a sample deal package for anyone who’s looking to invest passively, and maybe wrap your head around what to look for in a deal package But you can go to https://casmoncapital.com/sampledeal/ and then also on casmoncapital.com we have our podcast multifamily insights, which Dave has been a great guest So be sure to check that out whenever you can with casmoncapital.com
Awesome, thanks again, John, really appreciate it.
Thank you, Dave.