The Overlooked Design Decisions That Drive NOI With Marcy Sagel, Ep. 795

The Real Lesson Behind Brandon Turner's $15 Million Loss, Ep. 797

This week, John Casmon breaks down the lessons behind Brandon Turner reportedly losing $15 million of investor capital, and why the headline misses the point. Rather than pile on or use the story as fuel for fear, John makes the case that apartments and syndications are not the problem. The real issue is understanding how to identify and manage risk. In this episode, John walks through the factors that actually sink deals, the questions every investor must ask before investing, and how to mitigate risk on both the active and passive side. Make sure to download our free guide, 7 Questions Every Passive Investor Should Ask, here [https://casmoncapital.com/7questions/]. Key Takeaways * Apartments and syndications are not the problem. The skill that protects you is knowing how to identify and manage risk, which is different for every deal * The first question every investor must ask is "How can I lose money on this deal?" so you can uncover, mitigate, and get ahead of risk * Interest rates were only part of the story. Insurance and tax increases, especially in Texas and Florida, did just as much damage * The loan product has to match the business plan. Bridge debt itself was not the core issue * You lose money when cash flow can't cover debt service, so underwrite conservatively and balance aggressive financing with lower leverage * Don't assume the environment you buy in is the environment you'll sell in. Cap rates moved far more than the old rules of thumb accounted for * Use a tough outcome as a lesson to sharpen your own investing philosophy, not as a reason to sit out Topics Why the $15 Million Headline Misses the Point * John opens on the commentary around Brandon Turner reportedly losing $15 million of investor capital, and rejects the "I told you so" victory-lap energy as a loser mentality * He acknowledges how hard this is for investors, who put money to work to help their families and reach their financial goals * Real estate remains a tried and true wealth vehicle, proven over the last 80 to 100 years and second only to the stock market, with apartments offering scale that's hard to find in single family * Apartment syndication as we know it is still relatively new, and the last four to five years brought historic low rates and a wave of new supply, creating a lot of moving pieces The Factors You Can't Control * You can't control interest rates or supply, and several forces hit at once that few investors could have predicted * Interest rates shot up faster and further than ever in the shortest window on record * More supply came online in the last two years than in the previous 40 to 45 years * The takeaway is not that apartments or syndications failed, but that investors have to understand the fundamentals well enough to identify and navigate risk, which looks different on every deal The First Question Every Investor Must Ask * Before any investment, particularly for passive investors, ask "How can I lose money on this deal?" * Asking it is how you uncover where the risk lives, how to mitigate it, how to recognize when things go awry, and how to cut bait if you absolutely have to * This is one of the core questions in John's guide, 7 Questions You Must Ask Before Investing in Apartments * If you skip this question, you leave yourself blind to the very exposure that takes deals down Why the Loan Has to Match the Business Plan * Many of these deals were bought at low rates on variable-rate debt, and those loans repriced coming out of 2021 and 2022 * A rate cap is one tool to soften that risk, and John's team used one, but caps got more expensive as rates rose and are not a cure-all * John's contrarian take is that bridge debt itself was not the primary problem. The loan product simply has to match the business plan * A value-add plan needs the option to refinance or exit, which is why bridge terms are attractive: there's no prepayment penalty, unlike fixed debt where a 2% prepay fee on an early sale could cost hundreds of thousands or millions Where the Real Damage Came From * The business plan has to account for variable factors like tax increases, insurance increases, and rent growth, some of which investors could anticipate and some they could not * Insurance and taxes spiked alongside rates, especially in markets like Texas and Florida, and likely did as much or more damage than interest rates alone * Every investment carries risk, even bonds, and investors are always weighing what's likely against what's not * This cycle delivered the unlikely, and that combination is what made these deals so difficult to navigate The Two Ways You Lose Money and How to Mitigate * You lose money when there isn't enough cash flow to cover debt service, so build reserves and underwrite conservatively on tax reassessments, insurance, and rental income * If you take on bridge debt, offset it by being conservative elsewhere, such as limiting leverage to 60% or even 50% loan to value instead of 80% * Don't assume the environment you bought in will be the environment you sell in. The old habit of adding ten basis points to the exit cap broke when cap rates moved 100 to 200 basis points * John's team favors markets like the Midwest where taxes, insurance, and claims risk are more predictable, and structures deals so the loan, the operations, and the exit all line up Don't Let One Deal Rewrite Your Game Plan * Using a tough outcome to scare people away from passive investing is the wrong response, because for many it's the only practical path to real estate income * The better move is to educate, learn from what went sideways, and become a better investor * Every entrepreneur experiments, fails, adjusts, and comes back stronger, so define your own investing philosophy rather than abandoning the goal * The end game for most people is financial freedom and the flexibility to spend time with the people they love, and the right lessons keep you moving toward it 📢 Announcement: Learn about our Apartment Investing Mastermind here [https://casmoncapital.com/coaching/]. Next Steps * Before any deal, ask "How can I lose money on this?" and map out where the risk actually sits * Download 7 Questions You Must Ask Before Investing in Apartments and use it to pressure-test sponsors and assumptions * Review how each deal's loan product matches its business plan, including the path to refinance or exit * Stress-test underwriting for tax reassessments, insurance increases, and a tougher exit environment than the one you bought in * Balance aggressive financing with conservative leverage so cash flow can always cover debt service * Treat setbacks as lessons that sharpen your investing philosophy, and explore the Apartment Investing Mastermind here [https://casmoncapital.com/coaching/] Thank you for joining us for another great episode! If you're enjoying the show, please LEAVE A RATING OR REVIEW [https://podcasts.apple.com/us/podcast/multifamily-insights/id1269346577], and be sure to hit that subscribe button so you don't miss an episode.

Why Doing Everything Yourself Is Costing You with John Gravelyn, Ep. 796

John Gravelyn spent most of his career in engineering, managing technical launches at Ford and then Rivian. He grew up wanting to work on cars, but after buying his first house he realized he loved ownership more than the cars themselves. After succeeding at Rivian and later being laid off, he launched his own company, First Principles Partners, where he helps engineers and other analytical professionals approach real estate the way they approach engineering problems. Based in central Michigan, John builds deal-analysis tools and calculators that help investors evaluate properties, and he coaches clients to stay in their analytical strengths while partnering out negotiation and management. Make sure to download our free guide, 7 Questions Every Passive Investor Should Ask, here [https://casmoncapital.com/7questions/]. Key Takeaways * Treat real estate like an engineering problem, then partner out the rest * Stay in your strongest lane and let others negotiate and manage * Learn to delegate early, because leverage beats doing everything yourself * Hire fast, fire fast, and keep working the relationship after the hire * Get comfortable operating in the gray areas of deals Topics From Automotive Engineering to Real Estate * John spent his career in engineering, working at Ford and then Rivian * Buying his first house showed him he loved ownership more than the cars Why an Engineering Mind Is Drawn to Real Estate * Every property is variable, unlike automotive work built to cut variability * That uncertainty makes real estate a bigger, more interesting problem to solve Building First Principles Partners * After Rivian, John got his real estate license to help analytical people invest * He helps engineers buy a first home, then scale into owning more property * Growth turned out to be more of a marketing challenge than he expected Shifting from Engineering Rules to Investing Reality * In engineering a number is fixed, but in deals terms are negotiable * Showing clients the numbers and probabilities helps them act in the gray areas Analysis, Acquisition, and Management * Analytical investors should own the analysis and avoid negotiating emotionally * Partnering with an agent and operators keeps their time on their strengths Learning to Delegate and Leverage * Moving into engineering management forced John to delegate and influence * Being the central point of a vision creates more leverage than doing it all * He frames this as the who not how principle Vetting and Working with Partners * John runs an initial vetting, then relies on hiring fast and firing fast * He treats partnerships as dynamic and keeps improving the relationship * He has been burned, but believes most people want to work with good people 📢 Announcement: Learn about our Apartment Investing Mastermind here [https://casmoncapital.com/coaching/]. Round of Insights Failure that set John up for success: His layoff. Depending on his mindset on a given day it felt like the best or worst thing, but he ultimately sees it as the greatest thing that happened to him. Digital or mobile resource: Google Gemini [https://gemini.google.com/]. Book recommendation: How to Win Friends and Influence People [https://a.co/d/00AMbGPZ] by Dale Carnegie. Daily habit: Getting up and playing with his two and a half year old twin boys first thing in the morning. #1 insight for finding great partners: Listen, and pay attention to how the other person listens. It is a two way street that works both ways. Favorite restaurant in Lansing, MI: Leo's Lodge [https://leoslodge.com/]. Next Steps * Learn more about First Principles Partners here: thefppartners.com [https://thefppartners.com/] * Decide whether you want control or scale, then build around that choice * Stay in your strongest lane and partner out negotiation and management * Practice delegating so you become the central point of your vision * Vet partners up front, then keep investing in the relationship after you hire Thank you for joining us for another great episode! If you're enjoying the show, please LEAVE A RATING OR REVIEW [https://podcasts.apple.com/us/podcast/multifamily-insights/id1269346577], and be sure to hit that subscribe button so you don't miss an episode.

The Overlooked Design Decisions That Drive NOI With Marcy Sagel, Ep. 795

Marcy Sagel is the founder and principal of MSA Interiors, a commercial interior design firm specializing in multifamily housing, student housing, senior living, affordable housing, and other complex commercial projects. With over 30 years of industry experience, Marcy has built a reputation for creating innovative, functional spaces that align with her clients' strategic and financial goals. She also co-founded Designer Bank, an online education platform that teaches design skills, space planning, software, and product knowledge to developers, investors, and aspiring designers. Make sure to download our free guide, 7 Questions Every Passive Investor Should Ask, here [https://casmoncapital.com/7questions/]. Key Takeaways * Audit your top ten competitors before making a single design decision * Prioritize closet space, in-unit laundry, lighting, and cabinetry in unit renovations * Full-size stackable washers and dryers outperform compact units in resident satisfaction * Furniture layout planning, including TV placement and door positioning, directly affects rentability * Looking high-end and being expensive are not the same thing * Cheap materials that fail early cost more over time than durable materials installed once * Differentiate from the competition rather than replicate it Topics What Residents Actually Want in a Unit * Walk-in or large closets are now a baseline expectation, not a premium feature * In-unit full-size stackable laundry is the preferred standard for most unit types * Updated lighting, countertops, and kitchen cabinetry signal value to prospective residents Common Design Mistakes in Multifamily * Layouts are not evaluated for furniture placement before construction or renovation * TV placement and couch space are often afterthought considerations * Excessive interior doors fragment rooms and reduce usable wall space * Simple layout adjustments, such as moving a door 12 inches, can unlock meaningfully higher rents How to Stand Out Against the Competition * List every competitor, their amenities, finishes, unit quality, and rents before setting a design direction * Identify what the market is missing, then build toward that gap * Boutique, differentiated spaces lease faster than properties that blend in * Marcy cites a university-area project where a speakeasy-style hangout space and boutique design drove strong lease-up against large institutional competitors Looking Premium Without Overspending * A $1.50 tile can look high-end with the right design approach * Affordable housing projects should look as good as the budget allows, not be deliberately toned down * Cheap, low-durability materials often require costly mid-cycle replacements that eliminate any initial savings * Work with established vendors who can offer warranties and guarantee product longevity Designer Bank: Design Education for Developers * Designer Bank is an online platform offering modules on Revit, rendering, space planning, lighting, flooring, and tile * Modules are taught by industry practitioners with deep product knowledge * Targeted at developers, investors, and anyone who wants to make better-informed design decisions 📢 Announcement: Learn about our Apartment Investing Mastermind here [https://casmoncapital.com/coaching/]. Round of Insights Failure that set Marcy up for success: A 300-unit DC project where the flooring subcontractor installed real wood floors without taking proper moisture readings or leaving adequate expansion gaps. The floors buckled across the building. Multiple independent inspectors confirmed installer error, not product failure. The subcontractor had to replace the floors across all affected units. Marcy had flagged the gap issue in writing to the GC and client during installation, but the process was not stopped early enough. Digital or mobile resource: A digital laser measurement tool. Marcy carries one on every job site to verify measurements before built-ins, furniture, or installations are confirmed. Book recommendation: Profit First [https://a.co/d/0gPrzcAc] by Mike Michalowicz. Daily habit: Pilates for physical and mental focus, paired with morning journaling to set intentions and map out priorities for the day. Number one insight for great interior design: Designers work for you. Listen to their recommendations, but insist on multiple options and make the final call yourself. No designer should be dictating every decision. Next Steps * Learn more about MSA Interiors: https://msainteriors.com/ [https://msainteriors.com/] * Learn more about Designer Bank at https://designerbank.comhttps://designerbank.com/ [https://designerbank.com/] * Follow Marcy Sagel on LinkedIn: https://www.linkedin.com/in/marcysagel/ [https://www.linkedin.com/in/marcysagel/] * Audit your top ten competitors before your next renovation or development decision * Map furniture layout in every unit type to confirm TV placement, couch space, and door positioning * Evaluate whether your current material selections prioritize upfront cost over durability and lifecycle cost Thank you for joining us for another great episode! If you're enjoying the show, please LEAVE A RATING OR REVIEW [https://podcasts.apple.com/us/podcast/multifamily-insights/id1269346577], and be sure to hit that subscribe button so you don't miss an episode.

The $100K Risk Most Multifamily Owners Overlook with Kevin Jacobson, Ep. 794

Kevin Jacobson is the CEO of Foxen, a proptech company modernizing multifamily operations with value-add compliance and financial wellness solutions. A former investment banker and private equity professional, Kevin built his career working on technology M&A transactions, IPOs, and capital allocation before moving into operating roles at high-growth SaaS companies. He previously served as CEO of LogicGate and CFO at Kapow. At Foxen, Kevin leads a platform that has served approximately 3 million residential units across the country, offering renters insurance compliance, resident rent reporting, and pet compliance solutions to multifamily owners and operators. Make sure to download our free guide, 7 Questions Every Passive Investor Should Ask, here [https://casmoncapital.com/7questions/]. Key Takeaways * Around 40% of residents required to carry renters insurance don't have active coverage, creating real exposure for operators * Without resident coverage, a claim defaults to the property policy, which can carry a $50,000 to $100,000+ deductible * Renters pay 25 to 35% of after-tax income on rent but receive no credit benefit from on-time payments * 85% of renters say they want rent reporting; only about 10% currently have access to it * Proptech companies thrive by staying specialized rather than spreading thin across too many solutions * When evaluating a deal or operator, trust is the primary filter: if something feels too good to be true, dig harder Topics From Investment Banking to Multifamily Proptech * Kevin started in investment banking after college, working on technology M&A, IPOs, and capital allocation * He moved into private equity before finding his footing as an operator of high-growth technology companies * He joined Foxen as CEO four years ago and has been focused on building the company's presence across the multifamily industry The Three Core Solutions Foxen Offers * Renters insurance compliance ensures all residents maintain active coverage as required by their lease * Rent reporting (branded as Rent Street) reports on-time rent payments to credit agencies so residents can build a credit profile * Pet compliance manages documentation collection, emotional support animal verification, and HUD-related regulatory requirements The Renters Insurance Compliance Problem * Roughly 40% of residents who are required to carry coverage do not have an active policy, either due to lapsed payments or intentional cancellation * Property management teams have historically had no scalable way to track and enforce this in real time * Foxen tracks compliance and gives residents a choice: maintain their own policy or enroll in a waiver program with no deductible exposure The Financial Wellness Gap in Rental Housing * Mortgage payments are automatically reported to credit agencies; rent payments are not, leaving a major gap in the financial reporting ecosystem * Renters pay a significant share of their income on rent and build no credit history from it * California recently passed a law requiring property management companies to offer rent reporting; other states are evaluating similar legislation How Foxen Thinks About Product Growth * There are approximately 50 million rental units in the US; Foxen has served roughly 3 million, signaling significant runway * The company focuses on specialized, complex functions that property managers do not want to own in-house * Clients increasingly want fewer vendors, not more, which creates a clear opportunity for companies that can deliver multiple services reliably through a single integration 📢 Announcement: Learn about our Apartment Investing Mastermind here [https://casmoncapital.com/coaching/]. Round of Insights Failure that set Kevin up for success: Kevin points to multiple moments across his career, from competitive sports to his first year as an analyst in a demanding investment banking program, where reality fell short of expectations. Each time, he did a quick retrospective and got back to work. He notes that even apparent successes don't last long before the next challenge arrives, which helped him stay grounded in both directions. Digital or mobile resource: AI tools to develop a working understanding of what's currently possible. Book recommendation: Never Split the Difference [https://a.co/d/0cHoia4j] by Chris Voss. Daily habit: Prioritizing time with his kids, some form of exercise, and completing one to three high-priority tasks before meetings and reactive demands take over. His goal is to have a meaningful win on the board by 10:30 AM. #1 insight for evaluating a deal or operator: Trust is the primary filter. If something feels too good to be true, dig harder. When evaluating people directly, focus on whether you genuinely believe in their ability to deliver. Good operators find a way to make things work even when a specific idea does not pan out. Favorite restaurant in Columbus, OH: Cameron Mitchell restaurants, including The Avenue [https://theavenuesteaktavern.com/] and The Pearl [https://thepearlrestaurant.com/]. Next Steps * Learn more about Foxen at foxen.com [https://foxen.com] * Connect with Kevin Jacobson on LinkedIn [https://www.linkedin.com/in/kevin-b-jacobson/] * Review your current renters insurance compliance rate and identify active coverage gaps * Evaluate rent reporting as a resident benefit and potential retention tool * Assess whether your current vendor stack can be consolidated without sacrificing service quality Thank you for joining us for another great episode! If you're enjoying the show, please LEAVE A RATING OR REVIEW [https://podcasts.apple.com/us/podcast/multifamily-insights/id1269346577], and be sure to hit that subscribe button so you don't miss an episode.

Why Insurance Costs Keep Rising With Nicholas Lares, Ep. 793

Nicholas Lares is the founder of Insur3Tech [https://www.insur3tech.com/], a syndicated insurance group built for real estate owners and operators. Before entering real estate insurance, Nicholas was one of the largest brokers for Amazon's logistics network. When carrier exits threatened his clients' ability to operate, he helped them build a collective, self-insured alternative rather than accept the market's terms. That same model now powers Insurer Tech, which enables property owners, operators, and investors to retain the profits traditional insurers keep, averaging $28 million in annual distributions per 100,000 units. Make sure to download our free guide, 7 Questions Every Passive Investor Should Ask, here [https://casmoncapital.com/7questions/]. Key Takeaways * The traditional insurance market is a negative feedback loop: rising premiums drive more claims, which drive premiums higher * Every premium you pay includes broker commissions, administrative overhead, and margin that never comes back to you * Good-risk operators are pooled with bad-risk ones and effectively subsidize the market's worst performers * Captive insurance gives participants a co-ownership stake and returns annual profits when the pool performs well * Residents can be enrolled in the same captive, turning renters insurance into a separate profit center * Getting into a captive earlier compounds the financial benefit significantly over 5 to 10 years Topics Why Insurance Costs Keep Rising * Pre-2020, insurance was a manageable expense; post-Covid, premiums surged to the point where operators began questioning the ROI * Policyholders started filing more claims to justify rising costs, which accelerated the cycle further * Carriers facing unsustainable losses began exiting markets entirely, most visibly in Florida, California, and Texas How Traditional Insurance Actually Works * Premiums are priced on pooled risk across millions of policies, not based on your individual property's claims history * Every premium includes roughly 30% in administrative costs, 10-15% in broker commissions, projected claims, and a margin buffer on top * When the pool outperforms projections, the surplus flows to carrier shareholders, not policyholders The Captive Insurance Model * Captive programs have existed for decades, originally built for Fortune 500 companies and large industrial operators * A captive functions like a controlled bank account, backed by a reinsurance program, where unused premium returns to the owner * Insurer Tech builds group cell captives, making co-ownership accessible to operators who cannot support a standalone captive independently How Insurer Tech Works * Unnecessary margin layers, including excess broker commissions and profit buffers, are removed and redirected to members * Year-end surplus is distributed to participants; there are no external shareholders * Members choose their risk level: with or without reinsurance backing, depending on portfolio size and claims history The Leverage Problem in Traditional Insurance * Clean-record operators have almost no meaningful leverage to negotiate premiums because pricing is determined by pooled market behavior * Captives realign incentives: when participants think like owners, they manage risk more carefully and file fewer claims * Moving good-risk operators out of the traditional pool separates them from the bad actors they were subsidizing Who Qualifies * Insurer Tech works across all real estate types, including multifamily, single-family, self-storage, and commercial, as long as a lease agreement is in place * The resident piece (renters insurance) typically targets 50+ units to generate a net surplus for the captive * Operators with fewer units can pool with other investors in their market to meet the threshold A Real-World Example * An 80-unit multifamily property in Georgia: total property insurance cost was $14,000 per year * After captive returns, the net cost dropped to approximately $11,500 per year * Resident renters insurance through the same captive generated roughly $20,000 in annual profit * The result: the owner's insurance cost is fully offset, with a net surplus of approximately $9,000 per year 📢 Announcement: Learn about our Apartment Investing Mastermind here [https://casmoncapital.com/coaching/]. Round of Insights Failure that set Nicholas up for success: Nicholas does not point to one defining failure. He credits baseball with training him early to reframe failure as iteration rather than a verdict. In a sport where failing seven times out of ten still makes you elite, he built a mindset where setbacks are adjustments in the process, not signals to stop. Digital or mobile resource: Claude [https://claude.ai/] Book recommendation: Love Does [https://a.co/d/0ewDo9OR] by Bob Goff; The 7 Habits of Highly Effective People [https://a.co/d/07Xdem7Y] by Stephen Covey; Atomic Habits [https://a.co/d/0fQ7mmRu] by James Clear Daily habit: Morning Bible reading, followed by a workout (cardio or HIIT). Nicholas says days that include both are dramatically better than days that don't. #1 insight for reducing insurance costs: Get into a captive program as soon as possible. The compounding effect over 5 to 10 years can materially change the size and profitability of your portfolio. Reach out to Insurer Tech or ask your broker to find a captive structure that fits your portfolio. Favorite restaurant in Chicago, IL: Tre Dita [https://www.treditarestaurant.com/]. Next Steps * Learn more about Insur3Tech at insur3tech.com [http://insur3tech.com] and follow Nicholas Lares on LinkedIn [https://www.linkedin.com/in/nicolas-lares-77a328169/] for daily insurance insights and case studies * Evaluate whether your current premiums are returning any value or simply subsidizing pooled risk * Assess whether your portfolio qualifies for a captive (50+ units is a solid baseline for the resident piece) * Request a captive analysis from Insurer Tech or ask your current broker to explore available structures * If you have residents, explore enrolling them in the same program to create an additional annual profit center Thank you for joining us for another great episode! If you're enjoying the show, please LEAVE A RATING OR REVIEW [https://podcasts.apple.com/us/podcast/multifamily-insights/id1269346577], and be sure to hit that subscribe button so you don't miss an episode.