DGS 328: Why Property Managers Miss Millions in Syndication Deals

When your corporate job feels "secure" until it suddenly isn't, real estate can become the Plan B that turns into your best move…

In this episode of the #DoorGrowShow, DoorGrow founder Jason Hull sits down with John Casmon (multifamily syndicator, host of Multifamily Insights, and co-creator of the Midwest Real Estate Networking Summit) to break down how corporate professionals can transition into multifamily investing without becoming a stressed-out landlord. They dive into how John went from corporate bankruptcies to building a multifamily portfolio, what passive investors actually need to know before putting money into a deal, and why trust + clear expectations matter just as much as the numbers.

Jason and John also unpack what this means for property managers: how to align with investor goals, why the best operators project calm control (even in chaos), where syndicators hang out, and how PMs can position themselves to win more multifamily doors.

You'll Learn

(00:00) Transforming Property Management: An Introduction

(00:59) John Casmon's Entrepreneurial Journey

(02:56) Transitioning to Multifamily Investing

(04:33) Understanding Investor Types and Property Management

(05:48) The Role of Property Managers

(07:49) Investor Control vs. Trust in Management

(09:33) Challenges in Property Management

(11:17) Aligning Goals with Property Managers

(14:19) The Real Product of Property Management

(17:14) Managing Investor Expectations

(19:50) Syndication: A New Avenue for Property Managers

(23:44) Legal Considerations in Syndication

(26:41) Calmness in Chaos: The Key to Success

(31:40) Partnering with Syndications

(33:54 The Role of Property Management in Syndication

(38:29) Finding Syndicators and Building Relationships

(42:24) Understanding Passive Investment in Syndication

(47:45) Identifying Your Investment Goals

(51:54) Assessing Risk in Real Estate Investments

(55:15) Choosing the Right Market for Investment

(01:00:12) The Three C's of Raising Capital

Quotables

"The first C is confidence. Confidence comes from preparation."

"The investment itself, we got to go out there and execute. But that investor psyche is a completely different game."

"It is not your job to hope. Your job is to analyze the information in front of you and make an informed decision."

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

Transcript

Jason Hull (00:01)

All right, five, four, three, two, one. All right, I'm Jason Hull, the founder and CEO of DoorGrow, the world's leading and most comprehensive coaching and consulting firm for long-term residential property management entrepreneurs. And for over a decade and a half, we have brought innovative strategies and optimization to the property management industry. At DoorGrow, we are on a mission to transform property management business owners and their businesses.

We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market and help the best property management entrepreneurs win. Now let's get into the show. So my guest today, I'm hanging out here with John Casman, a multifamily syndicator, host of the multifamily insights podcast and the co-creator of the Midwest real estate networking summit. And in today's episode, John's going to break down how corporate professionals can transition.

into multifamily investing, how to find the best markets, how to raise capital effectively, and what separates successful operators from everyone else. John, welcome to the DoorGrowth Show.

John Casmon (01:10)

Yeah, Jason, thank you for having me. I'm really excited to be here. Love the intro, your intro, not my intro, ⁓ but excited to be here and share as much as we can on our journey to help all of your listeners reach their goals.

Jason Hull (01:22)

Cool. So John, ⁓ it's great to have you. I would love for people to hear about your entrepreneurial journey. How did you get to where you are now? And then we can get into your business.

John Casmon (01:34)

Well, the short answer is bankruptcy, right? I worked for a couple of different companies that went through bankruptcy and that really made me consider my other options. You know, I was at General Motors back in 2007, 2008, 2009 when we went through bankruptcy and I was there and I watched what that did to a lot of my peers. I one day in particular when we were going to have a lot of layoffs, I went to work as late as I could. But when I got there, I had a red message, a little red dial on your phone.

for anybody who's worked in corporate and remember voicemails. So I had a red dot on my phone, picked it up, pushed the play button and my heart skipped a beat because I thought maybe I was getting to the can, right? And it was actually a colleague of mine who sat kind of kitty corner in front of me and he had been let go. He, you know, was diabetic. He didn't know I was going to pay for his medication. He just was venting in his voicemail. And I just remember feeling empathy for him, but also

a sense of I just never wanted to be in that situation. So it made me really start to think about Plan B. Eventually I moved to Chicago, realized real estate was going to be that path and learned everything I could about investing. So it kind of took me down that pathway to say, you know what, I need a Plan B because no matter what you do, when you work in corporate America, you do not control your future. You know, there's politics, there's policy, there's a lot of different things involved that you do not control.

And sometimes it does just come down to someone not liking you for whatever reason, or they think you're a threat. And I didn't want to spend the rest of my career navigating those issues. So I figured I had to take more into my own hands.

Jason Hull (03:16)

got it. And so you start taking things in your own hands and what was the result?

John Casmon (03:20)

Yes. So we landed on multifamily investing, started with small multifamily. My first investment was a two unit building. We house hacked it, which is a common popular phrase now. But back then it wasn't quite as common. But we lived upstairs. We rented out the first floor unit and it worked great. You know, it worked so great that we went to refinance and we had created enough equity in that first investment to pull out a six figure line of credit and go out and buy another property. So.

Jason Hull (03:45)

Nice.

John Casmon (03:47)

That really got the ball rolling. bought a three unit building, we bought an eight unit building, and at this time I'm still working in advertising, still working in corporate America, and I enjoyed what I was doing, and I just had my second child, but the agency I was working for also went through bankruptcy right at this time. We had expanded, we were growing, and we had kind of combined with a few other agencies and kind of became this little conglomerate, and it just eroded just as quickly as it grew.

I remember again, just sitting there and I've got some real estate. I've got a little bit of cashflow, but not enough to pay all my bills. New baby. And I just realized this real estate thing is working, but the exact strategy I'm employing doesn't allow me to insulate myself from these economic changes and shifts. So I had to change my strategy and that led me to syndication. Since then, we've acquired over $150 million worth of apartments.

We've partnered with busy professionals to buy these properties and give them some passive income. And that's what we've been doing ever since.

Jason Hull (04:50)

Got it. So your area of genius really is helping these people that were similar to you, they're in the corporate environment transition into being an investor in real estate.

John Casmon (05:01)

Yeah, exactly. And I would say too, it doesn't have to be you're going to quit your job and do this full time. And in fact, most people don't, you know, but most people do want a little bit more control over their life. You want a little bit more flexibility. You want to earn and start building up, you know, your net worth. You want to have a little bit more liquidity. You have to look at your investments to say, what should you be doing? I think most people know that their 401k, their, you know, company issued life insurance.

probably not enough to really get you on the fast track to retirement. So what else could you do? Certainly you can invest in the stock market. Lots of folks do that. But real estate is a proven vehicle. The challenge is, I don't know anyone who really wants to be a landlord, right? ⁓ Certainly you want the benefits of real estate investing, but very few of us want to get those 2 a.m. phone calls. So the shortcut there is, ⁓ hire a property manager. Great solution. But now you have to be able to manage

property managers, right, which is this whole other business. And if you don't have enough scale, then it's hard to get that person really focused on your business. So we offer an alternative, right? You get all the benefits of real estate investing, all the ownership perks without any of the headaches of being the landlord yourself. So it really is a great marriage of being in real estate without having to do the heavy lifting yourself.

Jason Hull (06:15)

Okay.

Okay, so ⁓ the target audience of this show are property managers. So if they're not gonna use property managers, then what's the alternative? How does this work?

John Casmon (06:29)

Well,

first of all, what we do is not always for that individual. So I think that's the key, right? You've got to understand who you are from a psychological standpoint. So when it comes to investors, there's two types of investors. One wants control, right? They're not willing to be passive. And some people think they want to be passive until they're in a passive situation and then they're calling and they want to know why you did this and why you did that and how come you did do that. That's not a passive investor. And that's fun.

Jason Hull (06:45)

Yeah.

Yeah, they're anxious. Yeah. Yeah.

John Casmon (06:58)

And

if that's you, you should be active, right? And you should work with a property manager, but you also want to work with the property manager who is going to be right for you, right? Because sometimes that is not how they operate. So you want to understand that. And that's a process to understand who you are as an investor, what kind of investment strategy fits you and what's going to be right there. When it comes to property managers, though, I think there are a couple of things. And as a matter of fact, we just left out of meeting with

property management company yesterday. They have 2000 units. We talked about some other services that we offer. And one of things that stood out to me was just understanding some of the challenges that property managers face. And one of them is property managers are really in a position to think like everyone. They're supposed to think like an investor. They're supposed to understand maintenance and kind of the construction arm enough to understand what needs to happen at a property. But they are really little CEOs, right? Because for

Our stuff, the large apartment stuff, those are typically million dollar annual revenue businesses. And this person is in charge of that asset of that business. They are making the day to day decisions. They are the face for the residents, aka the customers of that business. They are the face and their experience with that individual is how they view that business. So it really is an important role. And if you're working with property managers, it's really important to understand how to find the right people.

to connect with them and have them represent your business, your brand, company in the right light.

Jason Hull (08:30)

So now you left an open loop that I want to close. So you said there's two types of investors, those that want control and maybe should go find a property manager, you said. And then what's the other type?

John Casmon (08:34)

Yeah.

The other type is those who don't want control and they trust someone else to handle that. And for them, there are a couple of different ways of investing. One is investing passively with a group like ours. The other is turnkey investing where again, you hire a property manager, but you really entrust them to manage the property. The only thing I would say for either one of those groups, myself included, is you want to trust but verify. Okay. You've got to do a lot of your due diligence upfront. You want to understand how they operate. You want to talk to

some of their other clients, some of their other investors, because you need to get a really good sense of what to expect. And a lot of people are great at selling themselves upfront, right? I can tell you everything you want to hear upfront. You want to know what is it like once you sign the paperwork? How often are we going to talk? How frequently am I going to get updates? And at what point am I able to weigh in and make decisions? Because if, if you are someone who wants to be more active or be heard, or you've got thoughts and opinions,

Jason Hull (09:18)

yeah.

John Casmon (09:35)

You want to make sure you have a voice in your investment. Otherwise you may get really disappointed or you may bring on someone who has a different perspective of what that relationship looks like and that never is going to work out.

Jason Hull (09:47)

Yeah, there's a big challenge in the industry and that's that most property management companies suck. so most investors that have dealt with property management to some degree are they have some scar tissue, they've been burned a little bit. They've a lot of property managers that started their businesses that come to me for help to grow their business. They started because they were investor and they couldn't find anyone else to manage the property good enough. And that's why they started their business, but it can be a difficult business to run. so none of them start their business saying, I want to suck.

But that's kind of the default unless they get some really good support or figure some things out through a lot of trial and error. And so that's where DoorGrow comes in. We help them with that. But one of the things I coach my clients on a lot is that they need to shift into being daddy over these rental properties. They need to like tell the owner, hey, you need to trust me. And they need to be able to have a really effective business so that they can lean into that trust.

because a lot of people are anxious. They'll come to them with concerns, but generally if a property manager is good, they're much better at this investing stuff than most investors. And they're much better at coordinating maintenance. They're much better at handling leasing. And so when an owner tries to micromanage a property manager, it kind of doesn't make sense to hire somebody to manage your asset just so you can manage them to do the job. And so I think the secret is finding a really good property manager that you can

let go of control because you can trust them. And but yes, you need to verify that they can do the job that you need them to do. And so a good property manager will take ownership of it and they'll take control and they will, they'll display a lot of certainty and confidence in how they communicate and they won't allow you to micromanage them is what I've seen. So.

John Casmon (11:37)

Yeah, Jason, and I'll add to it. There's a two way street there. And I think it's easy for people to say, ⁓ most property managers suck or they're not good or whatever. And listen, there's certainly a lot of challenges there. A lot of folks who are not living up to par to the standards. But I will go back to this. We ask property managers to do the work of generally like a CEO. Right. I mean, again, they're managing million dollar businesses in many cases, yet they don't have that training. They don't have that experience. They don't have the ability to navigate.

all of these various things. So part of what owners and investors need to also understand is that you play the role of asset manager. And that means giving clear direction of what success looks like so that that property manager has a framework to make decisions. It's not to micromanage those decisions, but to help them understand how their decisions impact the greater good. And part of that is like, again, just sitting down with annual goals. What are revenue goals? What are our goals on?

Occupancy, what are our goals on in a lot? And this may seem simple, but I promise you a lot of folks don't do this. And if you don't do that, then that property manager is going to default to, for instance, I'll give you a great example. I've got a property manager. She's awesome rock star. But she always gets nervous when occupancy is not at like 96 or 97 percent of this property. So she is, you she starts apologizing profusely and all I did this or done that and like.

Jason Hull (12:58)

Yeah.

John Casmon (13:04)

Occupancy is one of our KPIs for sure. It's important, but that is not the KPI. I am focused on my net operating income. And if we're going to push rents, the impact of that is you're going to have higher vacancy and she is not comfortable with that. And that's probably because she's used to working with owners who want that thing fully rented and they are comfortable having 100 % occupancy.

Jason Hull (13:13)

Yeah.

Hmm.

Yeah.

John Casmon (13:33)

if they're leaving 50 bucks, 75 bucks, whatever it is of rent on the table. And that's the part where you've got to really align with your vision versus their vision, because what they have in the back of their mind may not completely align with what you have. Or they have residents in their face who are coming into the office. They want something fixed. They want it done quickly. They want it done right. They want it done yesterday.

Jason Hull (13:49)

Right.

.

John Casmon (13:59)

So they've got that pressure of this person in their face. So they may go out there and spend the money or authorize the money to get spent. And maybe they're not picking the most cost effective measure. So you have that. And I'll give you one third one. A lot of times when you run into the flip side of that is maybe occupancy is low. They say, hey, we need to increase our marketing spend, right? We got to increase our marketing budget. know, ox is down to 88 or 90%. We got to spend more money. And we're not necessarily.

really zeroing in on what the specific issue or challenge is at that property. So for an owner, your job as an asset manager is to partner with them and to help them see what the options are, help them work through with some of those challenges and solutions are and partner with them to find success. It's not to micromanage them and tell them what to do, but it's really to understand the situation better and give them that perspective.

Jason Hull (14:49)

Yeah, that makes a lot of sense. think, you know, one of the things I've seen is that I've noticed a lot of property managers, they make the mistake of thinking that the goal or the product that people want to buy from them is property management. But investors don't wake up in the morning and go, man, I'm so excited to get property management today. The thing that they want. And so the way I describe it to them as they say, property management is like the flight to Hawaii. It's not Hawaii.

and you're trying to sell the flight. That's not the exciting part. You need to figure out what the investor wants, what their goal is. Where do they want to go? What's Hawaii for them, right? What's paradise? And then how do we optimize for that? And how do we help them create a path for that? Because the actual product that a property manager is selling is not what they do. It's not property management. The actual product is them. It's them and their values and their belief system and how they create trust and the team they build and the system and mechanism they build around them.

That's the actual product the property manager is selling. so a lot of property managers make that mistake. They sit there and talk to you about maintenance coordination and leasing and inspections. And meanwhile, you're just wondering as an investor, can I even trust this person? Like do our values align? Yeah. So I don't know what your thoughts are on that, but.

John Casmon (16:11)

I think you're spot on, right? Because, I mean, ultimately, as an investor, you are only as good as the team you can build. And that property manager is in charge of the day-to-day aspects of the business. especially when you, you know, I've heard horror stories of folks who have done like turnkey investing, right? Where the property manager, someone owns it, they buy it, they fix it up, and then they rent it back to...

an investor. And I've heard horror stories where that property was not being well managed. And that's the fear. If you're not in that marketing, you can't come and see it. So if you got an out of town investor, you really are trusting that property manager. So that is the most important thing, right? Everything else are tactical, daily situational things that can change. But it comes down to do I have the right people, people that I can trust, people who are going to make the right decision based on the information they have.

because they may not know what I know or maybe something shifted and changed where they would have made a different decision. We can't, you know, ache on that. It really comes down to are they doing their best? Are they making good decisions? If they're not making good decisions, is it because they didn't have the correct information, which again, could fall back on you as the investor to say, hey, are they aware of what your goals are? Are they aware of maybe this situation, these tools, these resources, whatever it is? And that's on you to sit and collaborate.

But trust is absolutely paramount because at end of the day, the thing that I think most of us are concerned with is who we partner with. And there's a great book I'm reading right now. And it gets into decision making and the fear of decision making for most of us and why deals stall. Why didn't you hire somebody? Why didn't you, you know, go with the vendor or go with the contractor or with the company? And the biggest thing is we are scared of making the wrong choice. All of us in decision and no action.

Jason Hull (17:43)

Absolutely.

John Casmon (18:04)

is better than the wrong action for many people because they once they take action. Well, now they're blaming themselves because you didn't pick the right person. Why did you hire that guy? You should have like now this starts to go on in their head versus doing nothing. Well, at least it's you know, it's not going to get worse, you know, it will in lot of cases get worse. So for a lot of people, that is the scariest thing. So if you can take that fear off the table as far as being the right person or being someone who is trustworthy.

Jason Hull (18:07)

Right, yeah.

John Casmon (18:32)

everything else gets easier. So if you can do that, that's, you know, the best thing you can do as an investor or as a property manager.

Jason Hull (18:38)

Yeah, I agree. think one of things that I talk about a lot is that clarity has to come before action because if you don't have clarity and you start taking a bunch of action, doing stuff, every action you take is a little bit wrong. Sometimes it's a lot wrong. so, yeah, we need to get that clarity first before we start ⁓ making moves. And you talked about, I love the example of your property manager that is trying to

optimize maybe for the wrong thing. They're like, want to optimize to the, making sure their vacancy is super low. But that might not be the goal. That's not the primary goal. The goal is money, you know, and there's a really good book is by Elihu Goldratt. It's a good book for operations people, but it's called The Goal. And spoiler alert, the guy's trying to figure out the goal through this whole book, the story and it's money. That's the secret. The goal is the of the business, should be making making money.

And what happens in this book is that people are over optimizing individual pieces in this flow at this warehouse. And it's actually not helping to make money. It's causing more constraint. And so if we over optimize at one stage, it actually creates waste, bloat, inventory, additional work for the next stage. And so sometimes the best thing certain departments can do is slow down and do less in order to get the outcome to be maximized outcome.

And there's some really great examples in that that I think are really powerful. But I think the if you're optimizing for the wrong thing, then you're not making it effective. So you want to make sure you're optimizing for the right thing. Otherwise. ensues. You get mad at somebody, but nobody understood what the goal was. And so I think, yeah, getting a greed upon set of criteria of what what the outcome is and asking the property manager, can you help me achieve this?

And they know, they know if they know what the problem is, usually they can, they know how to help you get whatever goal that you have. And they know whether your goal is probably realistic or not, because they've helped probably a lot of people do this similarly. And so, but yeah, I think it's very important. Make sure you know, where's Hawaii and maybe property management is the vehicle. Now you had mentioned like, I'm really curious about this idea of, you know, maybe creating syndications.

Some property managers are now starting to think, maybe I should create a syndication. What's your criteria for, what's a good syndication and what are some of the, I'd be really curious to get into if some of the property managers listening were wanting to do kind of a little bit of what you do, how they might be able to get started in that. Like what are the beginning steps to make sure they don't make the mistakes you probably already figured out in the beginning?

John Casmon (21:27)

Well, I think the first thing is, you really want to get into it? Right. Because for a lot of people, you got to understand it's a different business. Now you're not talking about real estate investing. You're not talking about property management. You're really talking more about, you know, investment management. You're talking about bringing on private investors who are looking for a return. That is communication skills. That's building up a network and a database of

Jason Hull (21:35)

Mm-hmm.

Right, returns.

John Casmon (21:54)

prospective investors, it's understanding the return projections that they're looking for. And it's really kind of managing the investor expectations, not necessarily the investment. And to give you a great example here, I had a deal where the investment went great, but it was slightly lower than what we initially projected. And I had an investor who was upset.

Jason Hull (22:07)

Yeah.

Yeah.

John Casmon (22:23)

about that. And we had communicated all throughout the entire process where things sat and he wasn't too upset, but he still made it a point to let me know, hey, well, this is less than what you initially thought. And that's challenging because the market shifts, right? Anybody who's bought properties in 2022 and beyond knows the market has shifted drastically over the last three or four years. So those projections made in a 2021-22 environment

Have a hard time standing up in a 25 26 environment We still make good money on that deals double-digit returns for investors ⁓ But you know there was that that was that feedback I got from one of the investors conversely We just exited deal a couple months ago, and we completely exceeded our return projections You know we delivered on a almost a 2.7 equity multiple Hit all you know mid 20s on the IRR completely unheard of stuff in this environment

And I have one investor call me and say, hey, John, I just checked my account. Is this right? And I'm like, yeah, it's it's right, man. He's like, my gosh, you guys killed it, man. my. Like, this is amazing. And it's great to hear. But again, that is separate from the investment. Right. Happy to manage the investor expectations and concerns. But that was an up and down investment where we had, you know, a moment where we actually had to put some of our general partner capital into the deal to keep it going.

Jason Hull (23:27)

Yeah.

Yeah.

John Casmon (23:48)

We have floating rate debt. had to refinance out of that. And we had to kind of rush to do that before rates started to go crazy. We had moments where our construction or renovation costs were much higher than we anticipated. So there are a lot of things that we had to navigate. And I think what happens for a lot of operators, a lot of people who get into syndication, they know the real estate and want to do the real estate, but they do not understand the perspective of the investor. And when you don't communicate to investors on a frequent basis and a clear, transparent nature,

Jason Hull (24:19)

Yeah. Yeah.

John Casmon (24:19)

They fill in the blanks and

the first concern every investor has and they won't say it. Most of time they don't say it, but I promise you they're thinking it after they make that investment. my gosh, did I make a mistake? Am I going to lose money? Is this person going to run off? Is this going to be some sort of fraudulent thing? Is this deal going to fail? These are all that we're wired like that. This is caveman stuff, right? We're wired to protect ourselves.

Jason Hull (24:36)

Hmm.

Right.

John Casmon (24:45)

And when you make an investment, and by the way, our investments are typically $50,000 and up, right? So these are not small investments. So when you make that investment, people start to second guess that decision. So my job when it comes to this side of the business is to keep them grounded that, hey, you've done your research, you've made an informed decision, you've picked a good partner, we've done this before. ⁓

Jason Hull (24:50)

Yeah. Right.

John Casmon (25:13)

And it's really to make sure that they feel comfortable with that decision. It has nothing to do with the investment, right? The investment itself, we got to go out there and execute. But that investor psyche is a completely different game. So first thing I would tell any of your property managers when they get into this business is understand, do you actually like people? Do you want to manage investors? Are you comfortable managing people's money? ⁓ And then beyond that, you have to do it the legal way. There are a lot of regulations around accepting capital from other people.

Jason Hull (25:31)

you

John Casmon (25:42)

So you can do it as a joint venture. The more common way of doing it, the more accepted way of doing this is by doing a formal syndication, which requires you to file SEC documentations. ⁓ know, there's regulation D and regulation A and there's some couple others, but typically it's going to be reg D 506 B or 506 C filing, which basically is the the structure that allows you to offer ⁓ passive investment opportunity or a security to investors. So again, for some people,

It's overwhelming. they're like, nope, never mind. But for some people, they love it. They want to get into it and they can learn more about that process.

Jason Hull (26:19)

Got it. Yeah. I think I love your idea that it's more about managing expectations rather than the investments. And I think, I think that's good advice for all the property managers listing. This is something we spend a lot of time coaching clients on because they think their job is to manage properties. But really, if they're not strong in managing expectations and managing the relationship, it's 10 times to 100 times harder to manage the properties.

their operational costs go through the roof because owners are getting anxious. They're asking more questions. They're getting all these interruptions and calls, tenants, owners constantly. And if they had just managed the relationship and expectations and set strong boundaries at the outset, everybody would feel calmer. And I think really for business owners, I think the thing that really stood out to me that I've been focused on, and this is I've done some personal coaching and this is just nervous system regulation.

If you can, and John, seem like you're pretty chill and pretty calm and I'm sure the investor feel safe with you, which is why you've had success. If you are a person that is anxious and you're running around like a chicken with your head cut off, you're going to have, you're going to struggle in leading anybody, especially in relationships to your spouse and like everybody else. so having a calm, regulated nervous system allows your investors.

to entrain to your nervous system and to feel safer and to calm down. And that's not something you can pretend or you can just fake. You have to be that and they can sense and they can feel that it'll come across in your tone and in your body language and how you communicate. But if you can make sure that you're in that space and that you're able to regulate your own system, you're able to stay calm when other people are coming at you.

and other people are angry and other people are emotionally heightened. And you recognize this isn't really you. It's just that's them. And you can maintain that calm. You will be able to create a lot more safety. And that's really what people want to buy. Most people out there, their primary basic need is safety and security. Most people. That's why they aren't entrepreneurs. That's why they don't go start jobs. That's why they aren't like you and me. And if you're a property management business owner listening to this,

Most people are not like you. They want safety and security. That's why they get a property manager. They want peace of mind. And so, and I'm sure investors in a syndication, they also want some peace of mind because this is a big chunk of change.

John Casmon (28:55)

They do. And I will say to most of the property managers I come across thrive in chaos. Right. They're used to stuff getting thrown at them. Right. And when you talk to them and get to know them, you learn very quickly. They like it. They do. They like the fact that they don't know what the day is going to bring. It could be a. Yeah, yeah. Could be a tenant coming with some crazy issue. It could be something from it's never boring and they thrive in it. However.

Jason Hull (29:00)

Yeah.

Yeah.

They like the variety and unique challenges that property management brings, for sure.

It's never boring.

John Casmon (29:25)

What happens then if you if they're going to look to work with investors and particularly raise capital and kind of do their own syndications, they have to understand that while they may thrive in chaos and uncertainty, most other people want organization. You want everything you said right. You want to have the calmness. You are looking for a captain to steer the ship. And for that part of the personality, they're going to have to tap into a different side of it to demonstrate how they handle chaos.

Jason Hull (29:37)

Hmm.

Yeah.

Yeah.

John Casmon (29:54)

not that they are chaotic. And I think what happens a lot of times when you're working with property managers is that they don't project that level of control. It just feels like they're reacting. So part of it is that, and they're really, really good ones. The ones who make it to that next level who are the regional managers and get those promotions, well, that's what they do. They manage the chaos and they manage up. They do a great job of telling the owners,

Jason Hull (30:06)

Yeah.

Mm.

John Casmon (30:23)

the leadership, whoever they need to talk to, they're telling them, hey, here's how here's our process. Here's how we're managing the situation. Here's what's going on. Here's what we're into. Hey, we had a water main burst here. Here's we bought. call three companies. We've got three quotes, but it's calm, right? It can be the worst. I'll give you a real example, right? At a fire, one of my properties and I was going to meet a property manager and I just happened to have a meeting with her that day at the property. She called me.

I was literally about to get in the car. She called me and said, Hey, I just want to let you know we've got a fire going on at the property. I'm not sure if you still want to meet. You're happy to come. We already have, you know, the fire department's here. They're they're putting the fire out right now. We already have another company that's coming in. They're going to walk through the damages once this is kind of settled. And I've already talked to the residents. Residents are good. We've got them hotels for the evening. We've checked with insurance. This is covered in your policy. So they're good to go. So you're happy to come down and talk and all of that if you want to.

Or we can let things settle down and maybe we can meet next week. This is a fire, right? This is like a scary situation. She called me.

Jason Hull (31:26)

Right. A literal fire. Yeah. And there's plenty of fires

in managing properties. The literal ones.

John Casmon (31:33)

Her calmness, she was so calm. Not only was

she calm, she had handled 90 % of it, right? It was the stuff you could handle in the moment. She handled it. So was like, hey, I don't think it makes sense for me to because I'm probably just going to add more anxiety to the situation at this point, right? It seems like you've got it under control. Why don't we let things settle, literally let the dust settle? And then once it's there, I'll come down. We can assess the damages, figure out what else needs to happen, what other next steps need to take place, right?

Jason Hull (31:41)

Yeah? huh.

question. Yeah.

John Casmon (32:03)

but had it handled like a rock star. Now, a lot of other folks would have saw the flames, called immediately, my God, there's a fire. ⁓ my God, what are we gonna do? So now you freaking out, everyone's freaking out, no one's controlling the situation, right? So now everyone's mind is just spinning and going. it does really take, kind of go back to where we started the conversation, that mindset of someone who was the boss, who was leading.

Jason Hull (32:05)

Yeah, I love that.

Yeah. Freaking out. Yeah.

Hmm. Yeah.

John Casmon (32:32)

who is going to take charge, even though it's not their property, they're going to take charge. Here's what needs to happen next. Maybe you have an emergency response plan already put in place, but you have these things already scheduled and ready to go. So when they happen, you're not shocked. You're not surprised. You're not asking questions that maybe you should have figured out upfront. And that's what a great property manager does. And if you convey that to owners, you're going to stand out above and beyond your competition because most people cannot convey that level of control, the level of

planning and the level of expertise that it takes to truly and effectively manage properties from the front, being proactive as opposed to just reacting to whatever the issue of the day is.

Jason Hull (33:13)

Got it, okay. So ⁓ I'm reading, I just read, well, I didn't just read. I read in the past a really great book called Extreme Ownership. Really good book. Yeah, phenomenal book. ⁓ I'm going through their newer book, which I think is even better, called The Dichotomy of Leadership. leadership is what we're talking about right now, is that that,

John Casmon (33:23)

Yeah, I think I got it like right here. It is right there.

Absolutely.

Jason Hull (33:38)

creates a huge impact and there's a lot of misunderstandings of what leadership is, like it's control or it's being aggressive or, but yeah, it's really that calm presence of letting people know I've got it. Like we can take care of this. We've got a plan and staying regulated and calm. So I love that. ⁓ have a, so another question I have is how can the property managers listen to this? How could they maybe target or partner

with, if possible, syndications like you, like people that are doing what you're doing. Is there a chance that they could be a resource or do most syndications just in-house and do, they are a property management business?

John Casmon (34:19)

No, no, most ⁓ most that I know work with third party manager companies. So I would say first and foremost, if you and syndications, I mean, it sounds like a big, huge, fancy word. But I mean, honestly, anytime you work with passive investors is technically a syndication. So it really comes down to figuring out who is looking for third party management and whether or not it's technically a syndication or not is really irrelevant. You want someone who is going to be managing or owning the property.

Jason Hull (34:24)

Okay.

Yeah.

John Casmon (34:49)

They want third party, but you have to understand their plan, going back to understanding the goals, right? Most syndications are looking to sell in a three to seven year timeframe, typically five to seven years. Most buy and hold owners have not decided or have not identified their exit strategy. So that's probably the biggest difference is when you have, let's just call it an individual investor or maybe it's a

Jason Hull (35:01)

Okay.

Right.

John Casmon (35:17)

a family or whatever that's buying and they want a third party manager, they don't know the exit. They haven't predetermined that they're going to sell in five years. So they are buying and holding it. And that goes back to the the I think the separation of understanding the objective, because for that person, having a full property is great. It means they're maximizing the revenue potential today. When you are syndicating.

most syndicators already assume 5 % vacancy. That's that's in everyone's underwriting. So you being at 100, they won't even give you credit banks don't even give you credit for it. So all of these things are already assumed. So for us to be above that is actually a miss, because it means we're not being as aggressive on the rent. So just understanding the mindset of a syndicator, which is they are looking to sell typically they're looking to double their money over a five or six year period. So how can you create value?

And that's something most property managers don't fully understand. But I would sit and I would talk to that syndicator. And if you want to be a syndicator or partners, not just be a third party vendor, but you actually want a partner, which we have seen a lot of folks look to do. You want to figure out how you can bring value to the table, because now we are aligning your interest with that syndicators interest. And now you've got a great partnership.

because every syndicator is going to need property management and they're going to need construction management to drive value. So if they can bring those people in as partners, that's a great opportunity for you. And if you're a property manager, you may have phenomenal relationships. You may already have contractor or the vendor partners that you trust in that marketplace. And if you could then take that and get a slice of the equity, that makes you very valuable for both sides.

Jason Hull (37:08)

Do syndications, do they also need investors in capital or do most of them have that, are they really good at that? Okay.

John Casmon (37:15)

Absolutely. Yeah. Yeah. Yeah.

mean, I mean, syndication at its core really just comes down to the need of capital. If someone had the capital themselves, they would probably just buy it directly and not go through the process of syndication. Because the syndication is literally just raising the money from passive investors. And in that scenario, again, being able to manage that, manage the communication, ⁓ that's really what a syndication truly is.

Jason Hull (37:42)

So a really good property management partner could bring property management, some of the construction elements and investors and capital to the table. So it could be a nice little.

John Casmon (37:51)

That would be amazing.

I'll be honest, man. That's because I don't want your listeners sitting here like, oh, I don't have one of those. I don't know if I've ever met one that had all of those. If you do have all of them, yes, you should consider syndicating yourself because you got all the pieces to the puzzle. Typically, what happens is a property manager has the property managers. I'll give you a great example. I got a 54 unit down in North Carolina. OK, so I came in as a key principal. I've got a.

Jason Hull (38:03)

Okay.

Okay.

John Casmon (38:20)

to my coaching clients. It's his property that he found. He asked me to come help him with the loan, which I did. One of the members, one of the partners is the property manager. So that's kind of their role to the table is they're managing the property. That's what they kind of came on. They had a couple of relationships, but their main role is the asset and property management side of it. So that's a great way to come to the table. But. Just like anything else in business.

Jason Hull (38:33)

Mm-hmm.

John Casmon (38:49)

It's very hard to find someone who checks every single box. I mean, that's like finding the marketer who's a CMO, who's also the CFO, who's also the COO, who's also the chief of human resource. very like no one, people don't really have like top notch excellent skills at every single one of those, right? Like you might be great at business, great at sales, great at marketing. You're probably terrible at finance, right? Like you just, you just forget to do your expense report type person, right? So it's hard to find someone who's

checks all those boxes. And I think typically when comes to property management, you want someone who's great with people, can resolve issues, but also has to be somewhat, you know, sufficient when it comes to the numbers, tracking all the data, tracking all the, you know, the rent roll, the leases, the income and expense statements, things like that. So usually they're not going to do every single box. But again, if you can find someone or that's where partnerships make sense.

Jason Hull (39:24)

Mm-hmm.

John Casmon (39:43)

If you've got that awesome. And again, I'm not saying a company doesn't have that. I'm just saying a single individual doesn't, which is why it's great to partner. If you can find someone who maybe brings a set of skills that you don't have, whether they're joining you in your property management business or they're partnering up where you're bringing your property management skills to the table with their investing or their networking skills, that makes for a good partnership.

Jason Hull (39:43)

Mm-hmm.

Yeah, I got it. Well, we've got several clients, you know, all over the U S that are really good at property management. They're really good at handling the maintenance stuff and they obviously have a pool of investors as clients and, and, know, and they know that they can't do everything. So we coach them in making sure that they would do time studies. They figure out which, what their purpose is. We start to align them towards more fulfillment, more freedom, more contribution and more support in their business.

John Casmon (40:32)

Yeah.

Jason Hull (40:38)

And they start to build the right team. So they're getting operators, they're getting BDMs, they're getting the things they're not like strong in. And so we just make healthier businesses. So for those of maybe my clients listening that have healthy property management companies. And, but they don't want to do syndication. They're just like, man, that's a whole nother business. If I stay in my lane, I can grow that faster. How do they find syndicates? Like, how do they find people like you? Cause you've got a lot of properties connected to you.

and they would probably love to chat with somebody like you. Where do you syndicate people hang out? What's the title? Who runs a syndicate? What are they called? Do they have a specific title?

John Casmon (41:15)

You

Yeah.

Yeah, great. Great question. Multifamily syndicator is is kind of the name just syndicator. We're all over. So I've got a podcast called Multifamily Insights. I interview like minded individuals. I've been doing that for a long time. We've done our seven hundred and seventy plus episode. So lots of people, lots of syndicators there. Definitely conferences. So if you look up any multifamily conference in your city.

Jason Hull (41:25)

Okay.

Nice.

Okay.

John Casmon (41:46)

meetups, lot of meetups in different cities as well. Those are great places to find syndicators. I think the biggest thing though is this.

Figure out who your avatar is. Because while we're talking about syndicators, ultimately, if you want to scale your property management business, I presume you're trying to scale with folks who are looking for third party management and the best option for that. OK, and let me back up. had one of the guests out of a podcast some years back, ⁓ Ashley Wilson. Love Ashley. As you said, something really changed when I thought about the business.

And she said the best way to find any vendor, any vendor is to figure out who relies on that vendor next and ask them for referral. So if you think about it, if you want a great drywall person, ask a painter. A painter is going to know who's great at drywall because they're going to know who makes their job easy and they can come in and just start painting versus a drywall guy who maybe doesn't, you know, you know.

Jason Hull (42:38)

I like it.

John Casmon (42:55)

mud the drywall properly or doesn't sand it down. So they got to do all this extra work before they start their process. Right. So a painter is going to know a great drywall guy. And in this case, it's really hard on ⁓ the property manager because you guys are the ones who do the work. But if you are looking for syndicators, OK, well syndicators, person who buys the deal. Well, who sells the deal? A broker. Find brokers. Go to a broker, commercial multifamily broker and ask them, hey,

Jason Hull (43:01)

I love this.

Yeah.

John Casmon (43:25)

Do you know some groups or you have properties that you're going to list? Here are the kind of deals we want to do now on the flip side of that. You got to be good at your job, right? You got to sell yourself and share what you do. So if you've got a great track record, a great resume, showcase that, bring that broker through and let them know, hey, we're looking to scale our property management business here. Here are the kind of assets that we want to manage. If you come across any of these that you're going to list, would you mind keeping our main name out there or referring us or giving us introductions to any of those buyers?

Jason Hull (43:53)

Yeah.

John Casmon (43:54)

so that we can throw our hat in the running to manage these properties. That's a phenomenal way to do that. And it allows you to shine and expand your relationships in your core networks and in your core markets.

Jason Hull (44:06)

Brilliant. think I love the, I love Ashley's idea that you shared, you know, the drywall. Yeah. The painters, like they don't want to be painting over a crappy drywall. They're like, this is a mess. Like this doesn't even look good in my job. Now I'm going to look bad. Yeah. So the brokers know who maybe those best syndicators are. And so they could just go to the brokers and say, Hey, who's, who's doing deals like this? Who who's got things going on? Like who could you connect me with?

And I avoid maybe.

John Casmon (44:36)

And on top of that, keep in mind, too, like what

are the times when? Yeah, but think about to like when is a property hiring or bringing on a new property manager? Right. So it's either a current owners firing the existing property manager or the property is being sold. Right. So, I mean, if you can get in during that transition phase, that's going to help you tremendously. And if even if they're firing their existing property manager, you can think through, OK, how do I?

Jason Hull (44:51)

Yeah. Yeah.

John Casmon (45:06)

work myself and get my name out there. And a lot of times, again, you're going to ask, right? You're going to ask other investors. If I were going through that process, I'm going to call my buddies into space, right? And say, hey, man, having a hard time, my current PM is not working out or we're not hitting our objectives, looking at some other options. Do you have any experience with these guys? What do you know about these guys? Or do you have anybody you could recommend? It's word of mouth, right? So that's what's going to start happening as well. So you kind of have to get out there and network and let folks know who you are, what you do. But you want to be someone who

people can say, yeah, these guys are amazing. You know, they, they only had an eight unit, but they crushed my eight unit for me. I'm sure they kill your 25 unit or your 50 unit. And you've got to start building that rapport and building your reputation in your market.

Jason Hull (45:44)

Yeah.

Nice. This is good advice, my friend. So, cool. For those that maybe are investors listening to this show, ⁓ I'd love to hear a little bit about what you do, how you do run your syndication, and how they can ⁓ make things more passive, if that's what they're looking

John Casmon (46:08)

Yeah, man. So there are lots of different ways to get in. If you are looking to be more passive, ⁓ high level, here's how it works. OK, so first and foremost, me and my team would go out. We look for the deals. We focus on a really tight radius. So we're in Cincinnati. We like Cincinnati, Columbus, Louisville, Kentucky. Really a two hour radius of the Cincinnati market is where we focus. And right now we actually think there's more opportunities locally. So we're really honed in on Cincinnati right now. But we focus on that once we find a deal.

We reach out to folks in our network. So we have folks in our investor list. ⁓ Once they're on our list, we kind of have a quick vetting process and then we can share opportunities with them. Once they see that opportunity, they get a chance to review it. We like to have a webinar where we answer any questions about the deal. I think for new investors, it's a great way to learn because we have a lot of experienced investors who ask very intelligent, thoughtful questions that

Many first time investors probably would not even think of. And that's a great way to learn, right? And ultimately when it comes to this space, it's really about education. know, it's educating yourself, understanding how you think about risk, how you mitigate risk in your investment choices. And those webinars are a great chance for you to learn about that the first time. Once you've done that, you can go ahead and fill out our official paperwork with our SEC documents.

Jason Hull (47:30)

Mm-hmm.

John Casmon (47:30)

And then

once you're through there, you can make the investment. But the first thing is just to get on our list, you can have access to the deals. And before you do that, we've actually put together a guide that can help people because I found that when I have these calls, people don't ask great questions. Sometimes they do. But I want to make sure that you are informed and well educated because this is a big investment. You know, this is not a 599 thing. And if it doesn't work out, OK, well, I just wasted six bucks. No.

Jason Hull (47:54)

.

John Casmon (47:59)

We're asking you to make a pretty large investment, whether it's with us or with others. If that's what you're looking to do, I want to make sure you're well informed. So we put together a guide. It's seven questions you must ask before investing in apartments. You can get that on our website. It's casmancapital.com slash seven questions, but it gets into questions around the market itself, the operating team, what you should be looking for, the deal. What is the story of this property? What's the business plan? And it helps you identify different levels of risk because the reality is

Anything can work, but you want to mitigate risk as much as possible, particularly when you're a passive investor, because you are basically saying, I'm trusting these people to find the right deal and execute. And you want to make sure that you are finding and identifying the right individuals who have a proven track record doing the thing that they are asking to do. When I hear about people losing money in real estate. At least 50, if not 70 % of the time.

Jason Hull (48:35)

Hmm.

John Casmon (48:57)

It is someone doing something for the first time. It is the first time in the market, first time doing this kind of deal, first time doing this kind of business plan. And. I can't tell you how frustrating it is because it's a big red flag, and it's not to say they can't do it and can't have success. But if it's your first time, I want to see how you're mitigating that right. You want to partner with someone who does have the experience you want. Like there are lot of things that you can do to put the odds in your favor. And when you're a passive investor.

Jason Hull (48:59)

Mm, yeah.

John Casmon (49:26)

It is not your job to hope. Your job is to analyze the information in front of you and make an informed decision. So this guide can help you do that.

Jason Hull (49:34)

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All right, so John, this is super helpful. love you've got your list. ⁓ You got your webinar, you've got your guide. I would recommend property managers listening to this. If they're curious about the world of syndication, that they start getting into your stuff and seeing how an expert like you is doing this and maybe even get involved in some of the deals with you or something might be a good idea. And they can kind of get a feel for how this works. And then maybe they'll say, I don't want to do what John does.

And I'll just find people that do, but they'll at least understand how they could partner with people like that. then, or they may decide, you know what? John's clever, but I'm clever too. I might be able to figure out how to do this too. And maybe they'll do it too. And, but I think there's a solid opportunity for property managers that want to be in the multifamily space and do multifamily management to find third party people that are doing these syndication deals. They need good property managers and property managers want more doors and they want to grow.

And if you don't, because your business sucks and it's uncomfortable, then reach out to me. I'll help you out. We'll get you dialed in. But ⁓ John, what else would you say to the investors that are maybe they're familiar with this and they've done some real estate investing and they've worked with some syndications ⁓ and they get on your list to do the webinar. What would you say to them next?

John Casmon (51:56)

Yeah, I think the biggest thing is understand what you're looking for. You know, I think one of the biggest challenges for investors is when you can't pull the trigger, it's typically because you haven't figured out what you're solving for. Are you looking for passive income? So you're just looking for a cash flow? Are you looking for long term wealth appreciation? Are you looking for tax benefits and to reduce kind of your tax liability? Do just want to diversify? Maybe you got feel like you have too much in a stock market, just like we put something somewhere else. So.

Figure out what you're actually solving for. Understand your risk tolerance, you know, because every deal is different. In our case, we do value add B class deals. That's a fancy way of just saying we like properties that already making money that are solid, solid tenant based. Think of when I say B class, I'm thinking of all stuff that was built maybe 30 years ago, maybe 40, maybe 20 years ago. Stuff that.

your teachers, your firefighters, your police officers, places where they might rent. So desirable locations, not luxury, not super high end, not, you know, super courts, everything. ⁓ But, you know, places that you would want your kid, your kid was in college, places you would be fine with your kid living, right? So you're thinking about that stuff. That's, you know, I don't say affordable stuff. That's not crazy price. So that's kind of what we focus on.

Jason Hull (53:15)

So would

that be like, is that how you find the best markets then?

John Casmon (53:21)

That's part of it. That's our strategy. There are different strategies that people utilize. I have found for us that is a sweet spot where we can take those kind of assets, modernize them and create value for potential renters. Some people like to focus only on they call it core plus right where they're buying newer stuff, stuff built five years ago or three years ago. And maybe it was, you know, leased up and they're just going to go in and hold it longer. You'll find other ways to add more money through amenities.

Jason Hull (53:35)

Okay.

John Casmon (53:50)

So some people do that strategy. Some people like older properties where they're buying more distressed or much older properties and are trying to fully renovate them and bring them up. There are strategies out there, something like new construction, stuff that doesn't exist. They want to build from the ground up. So it really comes down to you. Every investing strategy has a different level of risk. This has nothing to with real estate, right? This is investing in general. you're buying, you know, know, value stocks versus growth stocks versus Internet, it's the same stuff, right?

So you just have to figure out your level of risk. We like value at B-class multifamily deals. Once you understand your level of risk and balance that with your return expectations or projections, that's when you can figure out which investments actually make sense. You know, I have some folks who they like to invest in what we call trophy assets. And...

They may not know that right away, but when you send them a couple of deals and they look at the property like, ⁓ it's okay. They want something. They want something they can brag about. They want to drive you by like, see that building over there? That's me. And if that's fine, if that's what you want, understand what comes with that, right? That's going to be a lower term, right? Because these are, there's not much value to create, right? You've got a brand new property. It's A class, rents are $2,500. There's not a whole lot you can do there. And because of that,

Jason Hull (54:49)

Yeah, they don't want to show that off. Look what I'm connecting.

OK, right.

Thank

Yeah.

John Casmon (55:13)

There's not as much risk. So you're going to get less return because there's less risk. That's fun. Some people want to maximize their return, right? Hey, I don't need this money. I want to let it ride for 20 years. So they might want to do new construction or they might want to do a deep discount, highly distressed vacant property that needs, you know, $50,000 per unit to renovate it and turn around because the upside is there. So it just depends on that investor and your level of risk. Right. And most of us fall somewhere in the middle.

Jason Hull (55:27)

Thank

John Casmon (55:43)

which is kind of our strategy. figure out your level of risk tolerance, what you're looking for. And sometimes you don't know until you start looking at a Because you might think you're a cashflow person until I show you what cash flows. And you're like, oh, no, I don't want to be in that deal. Right. And there's like, OK, so you want a little bit more of a long term appreciation or a little bit of a nicer asset. That's fine. So once you kind of get in there and take a look at a couple of deals, I think you'll get a better sense of what your comfort level is.

Jason Hull (56:11)

on it. What would you say for people that are kind of assessing the spectrum, what would you say is like the riskiest looking sort of scenario and what is the least risky sort of scenario?

John Casmon (56:22)

So I think that's all relative. And I think that's a that's a very tricky question. It's a great question, but it's a tricky question because I think anybody who understands risk understands there's risk in everything. And I think there's more risk in the execution and the operator than the actual project. So inherently, inherently, development has more risk because it doesn't exist. Right. You're going to create something like

Jason Hull (56:42)

Yeah, good point.

Right.

John Casmon (56:52)

And when I think of risk, think of it this way. Think about two, you know, think about two main factors, right? Two scales. One is what would need to happen for me to lose money here, right? And then think about what's the likelihood of this happening. If I'm buying an asset that's already existing, it already is making money and I'm buying it based on the income it's producing today, it's not likely that it's going to go to zero tomorrow.

Jason Hull (57:08)

Hmm.

John Casmon (57:21)

It's not likely everyone's going to move out and stop paying rent the moment I sign the papers, right? Now, certainly it could go down over time, but if I'm buying something that's already making money, I'm buying a business that's already making money, it's less likely that it's going to fail immediately. If I'm buying something that doesn't exist, but I have a vision of, you know, creating something, there are a lot of things that could happen where my vision never comes to fruition.

Jason Hull (57:34)

Okay.

John Casmon (57:47)

You know, the city council could get involved or maybe the jurisdiction or the zoning changes. Maybe my development calls, maybe my lender pulls out, maybe my construction costs go up. Right. There are a lot of different factors at play there. So when you're thinking about risk, you need to now overemphasize that person's skill set and experience to overcompensate it. If I'm buying something that exists and is already making money and there's already professional team in place that's operating it.

It's going to be less risky inherently, assuming I buy it right and for the right, you know, the right amount of money or whatever, and I have the right business plan. That's going to be inherently less risky than buying something that doesn't exist. We're going to build it from scratch. So in that case, if I'm buying something that doesn't exist today, I want someone who has a proven track record of building things that don't exist today and making them make money. You know, so it's it's so it's a pendulum that you kind of have to look at on a scale to say, OK.

How much risk is there in this deal? How can I lose money? What needs to be true to lose money? If I can give you one metric, you want to know your break even occupancy. Okay. If you're buying an existing asset, that break even occupancy is going to tell you where occupancy needs to be in order to cover all of your bills. So you have to understand your income, your expenses, what the operating capital is, and then how many people need to be living at this property, paying their rent.

in order for you to cover all of your expenses. And when I'm evaluating a deal, that's a very important number we have to pay attention to based on our business plan, because we know if we drop below that, we're now in a negative, negative number. And that negative number is how you can lose. I actually just recorded an episode where all we talked about was how you can lose money in apartments. One of the quickest and easiest ways is having a negative cash flow. know, you have you have more more bill. You know, one of my buddies says I got more bill than month.

Jason Hull (59:31)

Yeah.

John Casmon (59:40)

Right. If you got more bills in month, that's a great way to lose money. Right. Like you got your monthly and you're sitting there and it's like, well, it's the 25th. We're out of money. Well, that's that's not a good feeling to have. Right. Whether it be personal finances or business. So you definitely want to make sure you're tracking all that.

Jason Hull (59:40)

Yeah.

Right.

Yeah.

Yeah, got it. So you're doing this largely in a geographic area, right? Like Ohio, Cincinnati area. ⁓ Is that typical for most syndicators? And if so, then how do you how would an investor pick the best markets to go look for?

John Casmon (1:00:01)

I am, yes.

Great question. The second question when I launched my podcast, that was the question I was trying to answer. I was in Chicago and Chicago no longer worked for me based on my investing criteria. And I was trying to figure out which market I should invest in. I'm from Cleveland. My wife is from Cincinnati. I had ties to some other markets. It ultimately landed on Cincinnati. And part of that came through a process where I started interviewing more and more other investors. I got some folks who are actually in Cincinnati and they kind of educated me more on the market.

And I really came down with a couple of things. So one, I put together a full guide. It's 35 hacks to find the best markets and sub markets so I can get you to link for that. But it's on our website if you want to check on that under our resources tab. But a couple of things stood out to me. First and foremost, you want to look at population. Generally speaking, you want to see population growth ⁓ that shows that the city is growing. And in theory, if a city is growing in population, there should be more demand for housing. Right. So that's good. You also look at jobs for the same exact reason.

jobs attract people. So if a city is growing jobs, and they have a diverse economy, that should be sustainable for the long haul. Think about it differently. If you are in a market where, let's just say tourism or manufacturing are the overwhelming majority of jobs. Well, if something happens to either one of those industries, a la COVID, then those jobs can be wiped out in a heartbeat, right? And now there's not as much demand for your housing because people are making money. I talked about

that bankruptcy at the beginning of our conversation. All of that General Motors in Detroit, the Motor City. The automotive industry took a massive hit, and it didn't matter if you had nothing to do with automotive. Doctors, dentists, school officials, everybody felt it because it impacted the entire city, because the automotive industry carried so much of it that everybody took a hit. You know, if you're a doctor, you didn't get to say.

⁓ I'm a doctor. So my housing value doesn't go down. No, there's less demand, right? That's how the economy works. So you want to be in markets where there's a diverse economy, because that's very helpful. Beyond that, when it comes to multifamily, I'm looking at the rent trends. Is multifamily rent going up? Is multifamily rent going down? Or is it stagnant? There are a lot of other factors in play, which you can get into a little bit later. But I think the biggest thing there is paying attention to the rent, because that's going to let you know

how much demand there actually is for that property. So for us, I mean, we're in our Cincinnati market. We know this market really well. We know the Midwest pretty well over the last couple of years. I know you're out near Austin. Well, Austin was a market that saw rents decline double digits. It was the leader of rent declines last year. And part of it is because it went up so much. It was going up 20, 25 percent the previous couple of years. So it shot up like a rocket.

Jason Hull (1:02:52)

Yeah.

John Casmon (1:03:04)

And there was so much new supply, so much new development, all these new apartments coming online. And it all came at the same time. And then demand just plummeted. It plummeted just like that. So you have some markets that, you know, we call like yo-yo markets, right, where they're all the way up, they're all the way down. Those are hard because depending on where you're at and what you're doing, you kind of want to time it right. And it's harder. So I like the Midwest because our highs are never as high or lows are never as low.

Jason Hull (1:03:13)

Mm-hmm.

Yeah.

John Casmon (1:03:34)

So

we have more stability in our projections. If I could bring it back to your property managers, I think this is something that's really important that most property managers don't understand. When you get into the economic cycle, you have to be for thinking if you want to grow and scale your business. again, with my property manager, one of the things we talked about was while we have been mostly insulated from these issues over the last few years, it is starting to impact us. Concessions are there and most of our competitors are doing concessions. So we have had this

talk about our strategy so we're not reacting. I want to be proactive. So we're looking at it to say, hey, are we seeing less applications? Are we seeing less traffic? Are we seeing our competitors that are doing concessions? Are we seeing folks who are really aggressive on rent pushes last year who are now doing concessions or starting to do something else? So we're monitoring and taking all this information in so we can make informed decisions and stay ahead of the market. A really good property manager.

is savvy and paying attention. They're talking to other property managers. They are looking at some of the data, know, in departments.com or some of these other companies come in, listen to them, take the meeting, get the understanding of what are you seeing as far as occupancy in the market? Because they will share that with you and they'll tell you, hey, occupancy is down 1%, which means people in general, maybe are to decide to stay at home or be in a roommate situation. So this is phenomenal information to have.

especially if you're a property manager because now you are the one making the informed decision on behalf of that property owner as opposed to being reactive.

Jason Hull (1:05:10)

In our original, what we were gonna talk about, we mentioned we would talk about what separates successful operators from everyone else. I think we covered that a bit. ⁓ I'm curious about this other piece of how to raise capital effectively.

John Casmon (1:05:20)

Yeah.

Yeah. Great question. Here's the deal. It really takes what I call the three C's to raise capital. The first C is confidence. Confidence comes from preparation. This is not faking it till you make it. This is not blind hubris. You have to be prepared. And prepared doesn't mean experienced. It just means you're putting in your reps. Everything we just talked about, right? When people are asking you, why do think you can get rents, you know, $50 higher?

You got to analyze the market. You have to take a look and see what other people are doing. You've got to lay all that out, right? You have to have a clear vision, a clear business plan. So confidence comes from being prepared. That is the first C to raise capital. Second C is credibility. Why you? I have people who believe they can go out there and raise money from doctors who don't know any doctors. They are, you know, ⁓ plumbers today or they're, you know, working, doing something completely different. And they're just not credible with that audience. So who are you credible with? What is your experience? What's your background?

For your property managers, you're already in this industry. So that's a huge credibility right there, right? So if you can lean on your credibility, that's awesome. For me, when I was doing, when I started doing this, my background was really in marketing and business. So I could lean on the results and the success that I've had in the business world, but I also started to invest myself as a multifamily investor. So I can lean on both that success from corporate America, but I can also lean on my success with my own personal portfolio before coming to these investors.

And if you don't have that credibility yourself, this is again where you can lean on someone else. So get a mentor, get a coach, get partners, have other people who have the experience because that's going to make people more comfortable. The last C that you need is connections. You got to have those relationships. We just talked about borrowing credibility from mentors, coaches, partners, but you have to know people. And if you don't know people, you got to get out there and meet people. One thing that I tell people to is we always tell people to start with friends and family.

Jason Hull (1:07:09)

Yeah.

John Casmon (1:07:18)

but understand that your friends and family are not your core investor because they love you. They want to see you succeed, but many of them don't have the psyche to be passive investors. Many of may not have the means to invest 50,000 or a hundred thousand dollars into your next deal, especially when you don't have a proven track record and they just see you as their little cousin, right? That's not who you want to get. What you want to do is treat this just like you were, you know, launching a bakery.

You want to go to your family and say, hey, guys, you guys know I love bacon. I've been baking for years. I'm launching a bakery. And I would love for you to connect with anyone who has a special need, anyone who has a wedding coming up, a graduation party, a birthday. I would love just to have the chance to get in front of them and share a little bit more about what we do from a bakery standpoint that may fit their needs. Right. So now you're asking for recommendations instead of asking them to invest with you or asking them to hire you for their business. Right.

People are way more comfortable connecting you than they are to invest their money with you, especially if you are not a proven commodity. But if you can build that credibility and demonstrate that credibility, you have your confidence because you know your stuff, you know why your stuff is good, you know why you're a better baker, and you can share that information with them, it makes it lot easier to build those connections.

Jason Hull (1:08:22)

Yeah.

Got it. mean, those are three C's we work on with all of our clients, helping them be better. ⁓ yeah, so that makes a ton of sense. ⁓ Cool. Well, John, this has been a really amazing episode. You have a lot of great ideas and knowledge. ⁓ I really found it fascinating to see how property managers could potentially partner or start or avoid doing syndications. ⁓

and how it's a mutually beneficial relationship if they do partner with somebody that's doing stuff like you. And for investors, is definitely a, ⁓ if they don't want to deal with the property, be completely passive, be hands off and not plays as big of Russian roulette and trying to do it all on their own. They can hire a property manager. They can get somebody like you that can do syndication stuff. Really, really ⁓ insightful.

enjoyed you being here on the DoorGrowth show. How can people get in touch with you? know you mentioned, ⁓ Kazmin Capital. It's C-A-S-M-O-N Capital.com is your website and, anything else you'd like to share in wrapping.

John Casmon (1:09:44)

Correct. Yep. That's right.

Yeah, I mean, listen,

check out those guys. You know, first of all, Jason, I appreciate you having me on the show today. I think one thing it's really important to understand is when you're listening to a show like this, it's great to get the information from the guests, from the host. But you've got to take some level of action, you know, and there's a ton of resources available. We put together a couple that I mentioned on this show, which I'm sure you'll link to in your show, those. you can go to our website and track them down there. Check it out, guys. Like it's free. Like

The goal here is to get you closer to where you want to go. If you are looking to grow your doors, listen. Jason's got some phenomenal content as well. Take him up on it. Like, don't just listen to him like, ⁓ listen to your show. I'll tell you what. What I love to hear, but also frustrates me is when someone tells me they've been listening to my show for like a year and a half, but then they're finally just not reaching out. Right. It's like, dude, you even listen to for a year and a half and you just just now got comfortable to email me.

Jason Hull (1:10:48)

Yeah.

Yeah.

John Casmon (1:10:51)

You could email

me a year and a half ago and I could have expedited this process, man. You might even have some more doors under your belt, right? So just take that step, man. If you're not ready, you're not ready. I get it. Like no one's asking you to, you know, pull out the credit card and all of that. But take it. Take the chance to let us know you like the show. Take the chance to let us know you're getting value. Download the free resources and just continue your process and your education to get to move forward in your business. So it shows us love, man. It's great for us to.

Jason Hull (1:10:57)

Yeah, yeah.

Right.

John Casmon (1:11:19)

hear it, to share this episode with someone else, to read those reviews. It helps us get going, man. And obviously, we take the time out of our busy days to record these episodes. So it's awesome for you guys as listeners to reciprocate that. Because while Jason and I are here, we really don't get to see who's consuming the content on the other end. So let us know you see it. Let us know you hear it. Let us know it helps you.

Jason Hull (1:11:40)

Right.

Perfect, I appreciate that. for those listening, if you've felt stuck or stagnant or you wanna take your property management business to the next level, reach out to us. You can get to us at doorgrow.com for free training on how to get unlimited leads for free. Just text the word leads to 512-648-4608. Also join our free Facebook community just for property management business owners at the DoorGrow. Just go to doorgrowclub.com.

That'll take you to it. And if you want tips, tricks, ideas to learn about our offers, subscribe to our newsletter by going to doorgrow.com slash subscribe. And if you just like John said, found this a little bit helpful, don't forget to subscribe, leave us a review. We'd really appreciate it. And yeah, reach out. I hear it all the time. We've been, I've been listening to your show for an hour. I'm a big, or for a year, I'm a big fan and, and I'm like, cool, you're ready to do something. They're like, finally. Yeah.

All right, so John, thanks for being here on the DoorGrafx Show.

John Casmon (1:12:45)

Absolutely, Jason. Hey, thanks for having me and good luck to all of your listeners. Take that next step, man. Grow your doors.

Jason Hull (1:12:51)

Awesome. Until next time, everybody, remember the slowest path to growth is to do it alone. So let's grow together. Bye, everyone.