Nov. 23, 2020

MB 241: What to Say to Potential Multifamily Investors – With David Kamara

MB 241: What to Say to Potential Multifamily Investors – With David Kamara

What is the best way to approach the conversation with potential multifamily investors? How do you communicate the benefits of investing in apartment buildings over other asset classes and assure them that their money is safe with you—even if...

What is the best way to approach the conversation with potential multifamily investors? How do you communicate the benefits of investing in apartment buildings over other asset classes and assure them that their money is safe with you—even if you’re new to the space?

David Kamara is the Founder and Managing Director of Cape Sierra Capital, a multifamily syndication firm out of Ann Arbor, Michigan. He has 15 years of investing experience in the real estate space, getting his start with a portfolio of residential single family and duplex units before transitioning to apartment buildings and townhome communities. Today, David owns 200-plus units and serves as a mentor on the Michael Blank team.

On this episode of Apartment Building Investing, David joins cohost Drew Whitson and I to explain how he coaches his mentoring students to approach the conversation with potential investors, describing how multifamily isn’t subject to the same risks as single family rentals. He weighs in on what helps aspiring syndicators believe in their ability to succeed, exploring how knowledge helps us visualize what’s possible but action is key in making it real. Listen in for David’s insight on getting your priorities straight and learn how underwriting to cashflow makes multifamily a good investment no matter what’s going on in the world.

Key Takeaways

What David’s been up to since his last appearance

  • Find competitive deals with good return for investors
  • Develop personal cashflow formula (free eBook)
  • Share knowledge through platform, mentoring

What helps aspiring multifamily investors believe it’s possible

  • Knowledge (i.e.: understanding of loans, taxes)
  • Personality open to learning new things

How COVID changed the way David talks to investors

  • Proactive in reaching out to investors
  • Open about potential for no distributions

How COVID has impacted David’s underwriting

  • Assume minimal rent increases for next 3 years
  • Take on longer, fixed-rate debt (HUD loans)
  • Prepare investors for longer hold periods

David’s advice around market timing

  • Don’t worry about things can’t control
  • Plan for same cap rate at sale, focus on cashflow
  • Choose markets with job diversity

How David coaches his students on talking to investors

  • Explain cash-on-cash return and appreciation
  • In control of both factors with multifamily

Why David invested in the Platform Builder Incubator

  • Eventually run out of investors as business scales
  • Attract high-income earners, serve more people
  • Accelerate growth (program tailored to syndicators)

David’s plan to produce content consistently

  • Write blogs on common questions
  • Considering podcast as medium

David’s advice for aspiring multifamily syndicators

  1. You have to start (buy something)
  2. Prioritize what’s important in life
  3. Hustle to find deals

Connect with David Kamara

Cape Sierra Capital

David’s Free eBook: Personal Cashflow Formula

Resources

Learn More About Michael’s Mentoring Program 

Register for Michael’s Platform Builder Incubator

Join the Nighthawk Equity Investor Club

David Karmara on Apartment Building Investing EP182

HUD Loans

HubSpot

Michael’s Health Crisis on Apartment Building Investing EP230

LoopNet

Realtor.com

Podcast Show Notes

Michael’s Website

Michael on Facebook

Michael on Instagram

Michael on YouTube

Apartment Investor Network Facebook Group