John Casmon - Growing A $100 Million Apartment Portfolio
LISTEN TO THE FULL EPISODE ON:
After buying a duplex, triplex, and an 8 unit property, John Casmon realized he was looking to scale bigger to where he didn't have to do his property management as a "side job" that took him away from his family. He was looking to scale large enough to have buildings that had a full-time manager on site. Hear John share his story of how he grew his portfolio to over $100 Million in apartments in multiple states. John is the founder of Casmon Capital Group, host to the Multifamily Insights Podcast, and the co-creator of the Midwest Real Estate Networking Summit.
In this episode, hosted by Mike Swenson, we discussed:
- John’s goal was to insulate himself from job loss.
- The beauty of real estate is you don't have to be in it full time, particularly at the beginning.
- The key in real estate is to understand the options in spite of any situation.
- Your network is your net worth
- Surround yourself with people who are playing the game at a higher level, which will help increase your level as well
- Know that there’s some gaps, what a property management company will do, won't do, or what's going to cost you extra, so know and understand what your property manager will do for you.
- In working with investors, you need to understand what people are looking for.
- When thinking about your investment strategy, think about the investment from a financial standpoint, but also from a time standpoint - how much time is it going to take to manage it.
- If you want to scale, look for people whom you can invest in.
Timestamps
0:00 – Intro to John’s Career
1:22 – From Corporate Space to Real Estate
7:25 – Strategic Steps in Scaling
13:23 – End Game
19:25 – Unit Counts Threshold
20:02 – Startup Pitch Deck
30:18 - Market Selection
33:11 – List of Focused Markets
33:50 - How to Find John
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Full transcript here:
Mike Swenson
Welcome to The REL freedom podcast where we inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate. I'm your host, Mike Swenson. Let's get some real freedom together. All right, welcome everybody to another episode of The Real freedom podcast where we talk about building time and financial freedom through opportunities in real estate.
Mike Swenson
And so today, we're going to be talking more about larger multifamily apartment space. And so we've got John Casmon here. And just a quick bio about John, he is a real estate entrepreneur that's partnered with folks to invest over $100 million into apartments balanced between Midwest and southeast for those folks that are kind of wondering where he's investing. And we'll talk about that today to also consult active multifamily investors to help them grow their business you host your own podcast, the multifamily insights podcast, and the CO creator of the Midwest real estate networking summit. Prior to being a full time investor, you worked in corporate America, overseeing marketing campaigns for General Motors, Nike, and Coors Light. So some of some of the big, big accounts. So welcome, John, we're so excited to have you on the show.
John Casmon
Hey, Mike , thanks for having me. Appreciate that warm introduction today.
Mike Swenson
Let's go ahead and get started. John. And maybe you just want to share how you moved from that corporate space into real estate? What were you looking for that made you want to make that leap?
John Casmon
Yeah, I mean, listen, my timeframe, you go back, I started in corporate America, you know, around 2004 is when I graduated. So I worked about 15 years in corporate America. And ultimately, what happened is, I worked at General Motors is one of my, you know, basically went through a couple of different agencies got hired at GM back in 2007. And I was super excited for this opportunity. And I worked with some great campaigns. But if you're looking at your calendar there 2007 to 2011 is when I was there. Well, that was the same time went through bankruptcy. And I remember distinctly watching some of my peers, and we had a round of layoffs. And one of the guys got let go. And I think he was called a little surprised by it.
John Casmon
And left a voicemail, he mentioned that he was at the company for 22 years, he was diabetic, wasn't sure I was going to pay for his insulin. And, you know, his plan was to retire from this company, this company that had supported him for 22 years. And he was a loyal employee. And he fell short term. Yeah, like Bill before he could even you know, take early retirement. So he just was flat out let go. He no plan B. And I just remember like that, running through my mind for like, weeks, if not months. And I had a lot of time going through bankruptcy coming out of bankruptcy, looking for jobs, trying to figure out my next move. And as I was thinking about this more, I realized that no matter what, if I just went from job to job, I was always going to be in the same position, worried about my future, worried about getting let go or fired or worried about politics, not being someone's guy worried about being passed on a promotion.
John Casmon
And I just realized that, you know, I don't want to live the next 2030 years, my corporate professional life, like that, you know, just worried and worried and anxious. And a lot of my peers, my, you know, my bosses, my bosses, bosses, like the directors, everybody was looking up to, they weren't happy. You know, they had that anxiety they had to deliver, everything was urgent, right? Everything was, if it didn't happen, there was going to be heads to roll. And it just felt like every day was like that. And I'm like, this can not be good for your health or your life. And that just made me think back to, you know, Rich Dad, Poor Dad and other skills. And I'm just like, you know, what I want to get in real estate. I don't know how I'm still in Detroit. I want to get in real estate.
John Casmon
So the first step was, I got to move out of Detroit, moved to Chicago, went to an agency. And then I bought a house hack. My wife and I, we bought a two unit building and lived in one unit rented out the other day, that went really well. So we bought a three unit building, you know, this is our first full rental property. So we had three units rented out did really well in that property, wanted to scale. You know, this was working this real estate thing was working. So I bought an eight unit building. The eight unit building did well now we're in commercial real estate, but I had spent a lot of money investing into that eight unit building. So at this point, I'm equity rich, cashflow poor. And I'm like, Alright, this is working, but it's not working.
John Casmon
Because my goal was to insulate myself from job loss in reality is I had equities projects, but I didn't have enough money coming in to stop me from or stop me from losing a job or insulate myself. So that's what I started to learn about other strategies and ultimately ended on apartment syndication. Fast forward, we've helped, you know, like you said, 100 million A little bit of apartment buildings, we've helped other people invest alongside of us. And that's exactly what we do today is we're busy professionals who want to ease their mind and what their options will be in the future, whether it be based on layoffs, or economic downturns or anything else, just give them some passive income, so they can really pursue their passions.
Mike Swenson
It's very interesting to hear your story. Because, yeah, it comes to finding some sort of plan B, you know, I've had people on in the past that have medical backgrounds, and it's like, Hey, I've got money, I don't have time, or I don't have that freedom piece. And so there's always something regardless of, you know, where you're at in your job, there's some piece of I don't control my own destiny, or what happens when the stock market goes down? What am I going to do, and so that plan B fuels a lot of people to at least get started. And then maybe it's a journey of, do I continue my full time job and do this, or to eventually make that transition into full time. And so it's a very natural evolution, and to go from two units to three units to eight units on up, you hear a lot of folks that do that, too.
Mike Swenson
So I think it just shows it's possible, you know, to go from no real estate background to where you're at today, you can do it. And I think that's the appeal to is anybody can do it. I've interviewed people from all sorts of backgrounds where life throws them something or they proactively decide to go pursue this. But yeah, you don't have to be full time in real estate to get into this. And that's the beauty of it.
John Casmon
Yeah, and I think the key there is just understanding the options, right? It doesn't matter what your situation is. And that is one of those limiting beliefs that holds so many people back because you're thinking like, oh, well, I only have so much money. So I can't really invest in that kind of property or Okay, based on what I have, maybe I can only wholesale, or I can only do a flip project or something. But the truth is, there are a lot of options, lots of different strategies in real estate has been around for a long time. And that means whatever challenges you're facing, somebody else has already faced that challenge and come up with the solution. So there are strategies from subject to deals to, again syndications to JV partnerships to you know, wholesaling, and all these other things. So it really just comes down to what are you trying to achieve? You know, what's your strength right now? Where are your challenges that? And are you willing to be a little creative and comfortable to figure out how to put a deal together, so you can actually start to reach your goals?
Mike Swenson
I'd love to hear John, that journey where you started to utilize other people's money to kind of get to that scaling point. So obviously, right now, you know, you're finding great investors that want to invest. So at that point, when you were, you know, either at the eight unit or starting to scale, how did that process work for you where it's like, okay, for me to continue to grow, I need to leverage other people. And I need to leverage other people's money to produce great returns. And so how did that come about for you? And what was your mindset at that time? And what were some of the strategic steps to get out of me as an individual or my family to let's try to scale this thing? That's a
John Casmon
Great question. So the very first step for me was surrounding myself with the right people. And this is a huge insight, okay. We always talk about networking. And there's a great quote, that's your net worth, your network is your net worth, right? Networking is key, because you have to surround yourself with people who are playing the game at a higher level, who are finding solutions to problems you don't even realize or problems yet. And for me, the first step was I had a friend person who became a friend and business partner or on an endeavor now. But when I first met her, she was the host of this meetup. And for me, I used to go to this meetup all the time, it was way for me to surround myself with other real estate investors, because none of my friends invest in real estate.
John Casmon
So this is a way for me to surround myself with other investors, and connect well as the host. She was always there. And I came, you know, pretty much every month. So we got to know each other started talking. When I first met her, she had three units. About me six months later, she went from three to nine units. And then about a year later, she went from nine to 90 units. And I said, Whoa, what kind of cheat code did you just unlock to go from nine to 90 units? And she started talking to me a little bit about it. I asked her if I could, you know, take her to breakfast, and just to learn more. And we had breakfast, and she said, Well, here's what I did. She said I had people reaching out to me who wanted to invest. I said no for a long time because I wasn't comfortable.
John Casmon
But finally we agreed to a partnership. And we structure the deal certain way that my job is to go out, find the properties, manage the properties handle everything there for that I get a portion of equity, and then they invest the capital, and that's our JV deal. And it it just clicked to me that if you really want to scale, you've got to be willing to partner with other people. And the reason is is my my drawback was the money in my account. So my limiting belief was you investing real estate by yourself. You save your money, you invest your money, partner with other people. Alright, so that was my mindset was like, Well, I only have $50,000 saved. So I guess a very rare look at properties with a $50,000 downpayment. Now we look for properties less because we need to have reserves. But that was the mindset. And when you have partners, well guess what, now not limited to just this $50,000 Down Payment property, you know, it's a matter of how much money can I attract to go into this deal.
John Casmon
And that just really start to open my mind. So that was the first step was seeing somebody who was doing it, in knowing them and talking to them and believing in them. If I want to just read this in a book or her some dude on a podcast or a video, like me right now, some guy named John Doe guy named John, right, I wouldn't believe it, I would not have believed it. Even if I did believe it, it wouldn't have touched me. The reason it touched me is I knew her, I knew her, she had three units, we set we talked, we spoke, and I watched your go from three to nine to 90. And that made this very, very real to me. And I think you have to surround yourself with people who can take these stories, and bring them to life in a vivid, imaginative, but also attainable measure, right. And that's what she did for me, she made it very, very real. And then she laid out how she knows other people are able to scale and she said two things.
John Casmon
One, you partner with other people, you know, or you can flip or do some other activity to generate income, and they use that to invest. The very next month, I met the guy who became my mentor. You know, as these thoughts were percolating in my head, I sit down with this guy, I'm realizing I need to scale in different markets. Because I'm in Chicago at the time, the numbers of Chicago were working as well, I wanted to start looking at Cincinnati, I started looking at Cincinnati, I want to network with people. And I said, I'll just talk to this guy, I sit down with this guy, Who knew he was going to, you know, end up becoming one of the biggest syndicators of all time. And we sit down, we have great lunch, become friends, he tells me he's got this coaching program. And I'm like, You know what, I feel like this is the missing piece that I didn't have.
John Casmon
So I agree and say, yep, let me join his coaching program. And then I watched him grow, and scale. And then I started incorporating some of those things. So networking is absolutely essential.
John Casmon
You know, if you're surround yourself with people who are playing the game at a high level, you will almost automatically start to do things at that level as well. Because it's not foreign to you, and that, the fear the trepidation, all that stuff goes out the window, because you're watching people do it. And it's like, okay, well, they're gonna tell you how to do it. It's like, oh, do it like this. And it's like, oh, okay, maybe it doesn't feel as complicated. Now, once you know where to go and get started and you got a blueprint, it makes it so much easier. So I would say, networking mentorships surround yourself with people who can help you elevate your game, that is the absolute key.
Mike Swenson
Walk me through a little bit of the the life stuff that changed in terms of like what you're physically working on. So when you're doing three units to three units, eight units, you're very actively involved in what's happening, whether it's you working on stuff, or whether you're hiring people, when you get into the larger scale stuff, you work through people like property managers on site. And so for those people that are listening to this podcast, that maybe they have a couple of units, maybe they're flipping in house hacking, and that sort of thing, and they're thinking, where's the end game here? Or kind of what's the next step from here? I'd be curious to know, kind of how your life changed in terms of what you were spending your time on, as you look to scale, you know, and working through others?
John Casmon
That's a great question. So when I had my 238 unit properties, first of all, the two and three are self managed. So I did everything there. Now, again, slightly two units, three units, but anytime there was a unit turn Well, every single step I had to handle right from making sure the previous tenant actually left she gave notice where he gave notice, making sure we walk through the apartment unit making sure that it's you know, broom ready cleaned properly. Making sure that contractors came through handyman fixed anything, they need to be fixed, painted, having a listing together. So I'm literally sitting there writing copy to post on the different websites to get the showings showing them showing the property myself having the lease agreements ready to go every single step me, okay. My wife was involved too.
John Casmon
So we tag team, everything, but a lot of it was me. So that was what we did on the two, three, the eighth unit, we made a conscious decision to hire third party management. I thought I was being smart in the mind lenders, like we're gonna force you to do that anyway. Okay. But I wanted to experience managing a manager. And what I found in that was, a lot of times people tell you all CZ, just hire a property management company. Well, there's some gaps. And it's really important to know that there's some gaps, what a property management company will do, won't do, or what's going to cost you extra. I'll give you one example. All my three unit Well, whenever I went to your property, I'd grabbed the mail, if there was, you know, junk mail, the circulars, that kind of stuff. I grow it I grab it out. Throw it out my eighth unit. Well, no one was really coming to the property that frequently.
John Casmon
So those circulars and stuff were just piling up. And nobody was there to throw it out. So I had to do it. I'm calling my property manager to be like, Hey, how come you guys aren't throwing this stuff out there as part of what you do? No, like, No, not really. It's not a part of the agreement. If we have to come to the facility or come to that property, there's actually a fee. Unlike what, I had no idea, my way. So to come to the property, you have to manage it. So what do you actually do? It's like, they just manage the paperwork. If they can't do it from their desktop, then it's an extra fee. So now I'm getting upset. I'm like, wow, I had no idea that this is how it worked. So in the smaller multifamily, you really have to understand like, what does that mean, when you bring in a third party management, you know, because some of that stuff, I'm like, Well, I feel like I could have just done some of this stuff, based on what you're charging me. And it doesn't really add the kind of value I thought it was going to add.
John Casmon
And then when you scale up, this is the big difference. So there's not a whole lot of money go round on a unit, let's just say rents are $1,000, for easy numbers, eight units, $8,000 rents, right, and let's just say we're charging, they're charging us 10%. So $800, is what they're making them off on this property. So decent money, but $800 not changing anybody's life. Right? Not not as a property management company. So you have to understand there's just not enough scale for it to be that profitable for them, for them to have someone dedicated to my property or showing it you know, once a week walk in the property, that is just not the it's not going to happen. Take that you put over 100 unit building at 100 unit building $1,000. Well, guess what, now we're talking about, you know, 10,000, we got $100,000, right? coming through here each month.
John Casmon
So way more money now. $200,000 10%, that's $10,000, what they're bringing in each month. Now, as a property management company. Well, now you can afford to pay someone full time to operate that property to be on site at that property to grab those circulars throw them out, you should do the showings to do all those different things. And that's really the difference between the small multifamily and the large multifamily. You can run it like a business versus a hobby or a part time job. In the small stuff, it was a part time job for me, right. And I still had to go show up at a figure out how to do everything and how to run it myself, how to screen the tenants, how to interview them, how to go through the applications, how to do all that stuff myself, even work at their property management company.
John Casmon
Yes, they did a lot of it, but I paid for it. And then stuff they didn't do, which is a small stuff that I think is still really important, right, making sure that when someone drives by the property, the front is clean, you know, grass has been cut properly, the you know, all that little stuff that gives the appearance of the care and nurture someone's gonna get from their new home, I still kind of make sure that was happening otherwise, you know, we would show if that didn't happen. Properties will sit, it'd be like two, three weeks. I'm like, How can we haven't gotten an application yet? Then I drive by just like, oh, well, no wonder like this lights broken right here and there's mail piled on the front. And so I think you really need to be kind of hands on. And the flip of that is skill up skilling up allows you to hire somebody and then oversee them. And that's their only job.
John Casmon
So now there really is no excuse for someone allowing that to happen. If mail is piling up in that person's working, they're either either not really working there, or they're not showing up every day. Or be you know, this person is really incompetent and doesn't know what they should be doing. So the scaling makes it easier. And it for me, now I'm an asset manager, which means I get to manage the manager. So going back to my corporate experience, that's really what I was doing, right? I'm not necessarily placing the mediawise myself, I was helping understand the strategy, and then letting the team members go out there and execute. Well, it's the same thing here. We're putting together a business plan. I'm talking to my team, making sure that they're they're able to execute that plan.
John Casmon
We're getting feedback from the marketplace, if components of that plan aren't working, or we're not getting the results we were looking for, we're able to step back, say, Okay, if we're not getting the $100 rent increase for this change, then why don't we reduce our expense? That's not, that's not put so much into it, if we're not going to recoup that. So we're able to sit there and manage it from that standpoint, which is more effective for me than my time than actually going into the property picking up trash and throwing it out.
Mike Swenson
And ballpark for you guys. Where is that threshold in terms of unit counts where it makes sense to bring on somebody in house
John Casmon
I would say between 75 units and 100 units, it really just depends on the price point as well. But I would say around 75 to 100 units is when you can have kind of an onsite manager. I know some people like to get to 150 units and up it really just comes down to the asset itself. Like how much hand holding do you need, you can get like a part time person as well. So there are different ways that you can do it. But I would say probably around 75 to 100 units is where you want to you know have someone more on site.
Mike Swenson
So then as you work to find investors now, what's your pitch to them? Or as you started to build your database of investors? How did that message go of like, Hey, we're identifying bigger buildings, we're trying to do bigger deals come along for the ride, here's how we do it. I'd love to hear your thoughts on how you how you made that presentation in those early scaling steps to to bring in more more investor partners?
John Casmon
Well, I think the first thing is understanding what are people looking for? Right? It's easy to tell you tell people what you want, right, I can definitely tell them, hey, we're buying these properties, and you have a chance to invest with me. But what works better is understanding what people are looking for. And our investors are some people are like I was at that time. And I just didn't know it. But I was busy professional at two young children. I had, you know, some investments, and I liked real estate and believed the real estate. But what I didn't have was the resources to scale my portfolio the way I want it. And what I ended up doing was learning the hard way, by trying to scale it that way, and took some lumps along the way, you know, I did some flip projects that did not pan out and lost money on those slip projects.
John Casmon
On the multifamily deals we've done, we had great success. But again, a lot of it was very hands on for me. So I spent a lot of time doing it, which meant a lot of time, away from my family and added on to the full time day job, it was a lot of work a lot of responsibility. If I could go back, what I would do is what I tell people to do now, invest passively. That way, you get all the benefits of investing in real estate, without the headaches of being a landlord. Now, there's still risk involved, but you're gonna invest with someone who has more experience than you do, you're gonna invest in someone who has resources has invested the time and energy to create team systems, processes, relationships, and the scale.
John Casmon
Again, if you're buying 102, or two unit building, well, now you have something large enough to have property management on staff, you buy a three unit building, you bought yourself a part time job. And for someone who is looking to get financial freedom or time flexibility, you really have to think about the investment and what that investment is going to cost you not just financially, but timewise. And most people don't and go back to me, it's like, when I started investing, I didn't really understand that concept and work with other people. And I really didn't think you had to do it all by yourself. And remember, there was a Saturday afternoon, we had a unit turned into a three unit property. And I got quoted like $800 to paint the unit. I'm like, yeah, so I'm on I'm not paying $100 to paint this unit. I'll do it myself, right. And I was like without the paint that was just like their labor. I'll go buy the paint myself and do it. Well,
John Casmon
I took a long time to paint. So I you know, from prime into walls, prep and washing them all that stuff. I mean, I think I started like 830, about two o'clock, my wife called me and said I'm taking I'm taking our son to the park, you know, when you think it'd be done, and I'm like, I just did the first coat. Like, I gotta wait for literally waiting for paint to dry. And then I got to do another coat. And I just had to like, do you spend a whole Saturday and this summer, you tell you tell yourself that you're doing all this for your family, right? But your family's going to the park and you've been at this apartment all day on a Saturday, for a busy professional works full time job, you only get two days to be with your family kind of create your life anyway. And you spent in one of those days, you know, doing a part time job. Stop lying to yourself, you got a part time job.
John Casmon
That's what you have, you know, you could pay somebody but you didn't want to pay the $100 because you didn't think it was worth it. So here you are sitting in a hot ass apartment, you know, waiting on paint to dry. And I just I just remember sitting in that room like, wow, this is crazy. Like I don't know what I'm doing. But we need to go back and look at the numbers. And I need to make sure this is included moving forward to like I'm planning on paying this kind of money for uniters. But that was my aha moment, right sitting there watching the paint dry. And recognizing that this really wasn't a passive investment. And if I would have known that I could have invested 50k or 100k with a group who had the resources to paint and I can spend my Saturday as my son and make those memories especially we talk about Chicago, you talk about Chicago summer, so 90 days, you know what you're talking 24 days, basically, of weekends, right?
John Casmon
Have warm weather weekends in Chicago. 24 days is what we got really 24 days, and that's been one of them. We don't paint the dry. It is like never again, like you have to really think about your time from that standpoint. And it's easy. I mean, we all want to save money, right? We're investors, we're entrepreneurs, we is part of it. But you also have to be very diligent on how you do it. And I think that was the mistake I made and tell everyone Hey, if you want to scale, look for people that you can invest in, because if you love it, then you can do more of that You know, you can scale you're going to gain more experience, you get a resource, you could talk to me, my investors call me all the time, Hey, man, I'm looking at this deal. It's, it's not even real estate sometimes.
John Casmon
But they just they want to bounce stuff off, because we now have that relationship. And they respect my opinion, right? And that's what I would strongly suggest them to do is like, invest passively with a group unless you want to just be a full time real estate investor. But most people don't. They just want the benefits real estate has to offer. So think about that. It just make sure you're investing your time and your money the way you want.
Mike Swenson
Yeah, yeah, it, it hits home for me, too. We had we had taken on a flip project. And we had two other people on my team that had done it. And, you know, we planned out, we hired out the things that we needed to the plumbing, the electrical, kind of the key stuff, I was a framer in college, so I could frame a basement, that was kind of my skill set. And we didn't plan ahead far enough for mudding and taping to have somebody do that for us. And so we got stuck mudding and taping and then painting. And man talk about one Saturday that was multiple Saturdays and Sundays, nights, you name it.
Mike Swenson
And like you said, the whole goal was we're doing this for our family, I spent more time away from my kids, I spent more time away from and even to just, you know, the household duties of, you know, keeping up on the house, now my wife has to do all that on the weekends that I'm gone, I would sometimes put the kids to bed at 9pm, go to the house and work till 2am Come home sleep till seven at best, and turn around and do it again. And it's like, what I realize is, I don't ever want to do this, again, I want to be able to do this passively versus, you know, and we just didn't plan ahead, and I'm sure you can get better as you flip homes, you know, and plan ahead on those things. But, you know, we that that to me was kind of the breaking point of let's let's do this more passively here versus, you know, I'm doing it for my family. And what's happening is I'm spending way more time away from my family than I thought I was gonna gain back, you know,
John Casmon
yeah. And to build on that, you know, we did some flip projects, and my flips went terribly bad, right. And part of it was, I was smart enough. And I had the foresight to recognize that I didn't want to be a flipper. So I partner with other flippers right partner with guys who are like quasi developers flippers. And the reality is, is that they just they didn't pan out. And on two of the projects, I ended up having to take over and finish the projects myself. And that causes a lot of money, because I pretty much had to start over on some of the work. But the bigger thing, though, in the lesson here for all your listeners, is the professionalism of the people you're working with. Because if you're flipping or can you get a two unit three unit, but you only have so much money, you can pay someone right to do a job, you got your margins, the margins gonna be kind of tight, you know.
John Casmon
So when you're flipping, you're racing o'clock, you're raising your budget. So you got to get people who are willing to do the work in those parameters. And those people tend to be less reliable. They have stuff just happened in their lives. Let me ask you this, anybody who's a flipper or owning real estate, in the last year or two, have you had contractors or vendors call you and cancel because of COVID Mom got COVID, or someone their family got COVID someone, someone passed away and had to go to a funeral. And I'm not saying things don't happen. But I've had my quote unquote, reliable guys hit me with, you know, four or five of these every single time. Car issues car breaking down, the trucks not working. I'm like one guy, I'm like, Dude, you hit that, excuse me two weeks ago, you're you've got to rotate. Like, they just keep rotating these excuses, right?
John Casmon
Now, if you go to the higher end companies, or you go to these bigger companies, I'm not. I'm not necessarily saying more more expensive, but companies that have you know, employees and a bigger, better track record, you don't have the same issues run up. Right. We're sitting there waiting on it, you don't have got call you while you're at the property waiting for him to tell you all I can make it today because of a car broke down or sorry, man, I got, you know, my wife got COVID. So we can't be there tomorrow. I was getting this over and over and over. Right? On my major stuff. We don't have that happen, right? Because guess what, if someone does have a life situation happen, there's someone else, right? Or the other professors will call to say, Hey, I can't be there today for this issue. I can't be there tomorrow.
John Casmon
You know, I'm going to come by tomorrow. Okay. So that communication is key. Again, I come from corporate America where if you say you're going to do something, you do it, right, like there's no back and forth. And the thing I've learned is, in the when you're flipping or you're, you know, buying small properties, you're really more to blue collar type areas. So it's not corporate, it's not white collar. In blue collar, you kind of have to force people to do it, you got to force them to show up, you got to almost be on the slight watching them work, or they will cut corners as much as they can. And it's a different mindset. And again, most business professionals don't really understand that aspect of it. So when they get into these deals, they think they're gonna make all this money and they think it's going to be easy, and it's passive.
John Casmon
And he realizes, not that a lot of hand holding, and they're not making the money they're going to make and these contractors are going slow and they're milking them and taking advantage of them. And it's not the outcome you're looking for. And unfortunately You know, they either lose money or they don't make what they thought they were going to make. And now real estate becomes kind of a bad investment to them or something they're less interested in, when in reality, they needed to partner with a group that could run in a more professional manner, and allow them to get the scale and resources that you really need to be successful.
Mike Swenson
So chatting quick then about market selection or, you know, state selection, you've got investments in multiple states, walk me through how you guys decided where you wanted to go. I mean, how much of it is driven by you? How much is driven by investors? Maybe their location or what's available, but but walk through? Because otherwise, you know, you can you can spend your time analyzing the whole United States. So walk me through, how do we how do we narrow it down to the best investments that you guys can find?
John Casmon
Yeah, listen, man, that's a great question. When I launched my podcast, it was called target market insights, it now is called multifamily insights. But it was born with the idea of this was going to show you how to find the best places to invest. Because I had that same question. And for me, I was living in Chicago, and I knew I wanted to invest outside of Chicago, because the numbers stopped working. And I landed kind of on Cincinnati, but I wasn't completely sold. And I was just trying to figure out okay, even if I pick Cincinnati, were in Cincinnati. Like, I don't know, the city that well, it for me, I would say it's combination of a couple things. One, you always want to understand where people are going. So you're looking at population, you're looking at jobs, you're trying to understand where the puck is going, right?
John Casmon
Where are the demographic trends headed. So that's something we're paying a lot of attention to something that is a little less stated, but kind of a hobbyist when you step back and think about it, where do you have a competitive advantage? You know, what, where does it make sense for you to invest? So I would go and look at these top 10 lists, right, like go and pull up. IRR has a great list, Marcus and Millichap does a great list every year. There's a few others that do a great list of like top places to invest where they rank cities. And I would go look at them. Well guess what some of these cities I've never even been to, like, there's no reason for me to invest in Utah, not a knock on Utah.
John Casmon
But John Cashman has no competitive advantage in Utah. I don't know, the broker's there. I've never traveled there. I don't know anything about Utah, that would make me a better Utah investor than someone else. But when you think about Ohio, well, I'm born and raised in Cleveland, I went to school in Dayton and I live in Cincinnati. Now, my wife is from Cincinnati. Okay, I might know a thing or two about this market, right? I can talk to people I can call speak, I've got some resources in the market. You know, I lived in Chicago for eight years, I lived in Detroit for four years, there are certain markets where I have a competitive advantage. So I try to take that, you know, markets I'm familiar with market has some knowledge with in other markets in the southeast that I've traveled to a lot and have some competitive advantages with as well.
John Casmon
I take that, and they combine it with what the data is telling me. But it really comes down to data and then also relationships. If I don't have key partners in these markets that I trust, and I know that they know the market really well, then we're not going to consider it. So for us it comes down to I want to look at the demographic information. I want to look at the partners relationships we have, and we'll use that to inform which markets we invest in.
Mike Swenson
And for you that now I think I listed a few early on, but where are you guys marketing to? Or where are you looking?
John Casmon
Yes, we have stuff in Kentucky. So we'd like Northern Kentucky a lot. Louisville, Indianapolis. So for me, we have a basically a two prong approach to markets where it's a two hour radius drive radius from where I'm at. So thing Indianapolis, Columbus, Louisville, Lexington, Kentucky, those are markets where I'm focused. But we also partner with other operators in the southeast region. So Atlanta, Georgia, Carolinas, parts of Florida. And then we we've also stuff in Texas as well. You want to take action no matter what if you're looking to scale your portfolio, figure out the next logical step to scale. What's holding you back. What's the issue you face? How do you overcome that obstacle?
John Casmon
If it helps, we do have a sample deal package on our website. And I think it's helpful if you are either looking to do your own syndication deals, or maybe raise capital and put stuff together if you want to figure out what you should be communicating. Or if you're on the other side of that, and you're interested in investing passively, but you don't know what to look for to deal yet or what a deal structure should be and what's a fair amount of equity. So take a look at that you can take a look at how the deal is structured and some of the information in there. And we'll get some follow up communications get you added to our email list and be happy to share more information from there casmoncapital.com/sampledeal.
Mike Swenson
Fantastic. Well, thanks so much, John, for coming on and sharing your wisdom. We covered a lot there's so much more we could have could have covered in the future. Thank you for sharing your wisdom and your experience with others is was fantastic.
John Casmon
Thanks for having me. Appreciate it.
