Acquiring Commercial Multifamily Complexes with Positive Growth Trends
Chris Lento is the managing member of EM Capital LLC and has over 16 years of experience in multifamily real estate investing. Chris is focused on acquiring commercial multifamily apartment complexes in markets across the country that exhibit positive growth trends.
He is passionate about the role that well-managed, well-maintained economic housing can play in helping to alleviate the current housing crises for middle and low-income families.
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Brett:
I’m excited about our next guest. He is with EM Capital. And he’s focused on all things multifamily, and he’s the managing member of em capital and has over 16 years of experience in multifamily real estate investing. He has focused on acquiring commercial multifamily apartment complexes and markets across the country that exhibit positive growth trends. He is passionate about the role that well-managed, well-maintained economic housing can play in helping to alleviate the current housing crisis for middle and low-income families. Please welcome to the show with me, Chris Lento. Hey, Chris, how are you doing?
Chris:
Good, good. Great. Happy to be here.
Brett:
Absolutely excited to have you on the show. For our listeners get to know you for the first time. Would you give us a little bit more about your story and your current focus?
Chris:
So I’ve been doing multifamily investing for the past 16 years, I started doing small three-family housing in the Boston area, while I still had a full-time job, and then grew that into a full-time career. So I do full-time investing in multifamily or apartment buildings, which is what most people call them. So what I do is, I kind of have to track investment philosophy right now. So what I, I constantly sort of selling my properties, and 1031 exchange them into larger properties. And those are properties that I personally own, and then get the cash flow from and, and proceeds from at the sale. And then in parallel, I acquire larger properties, say 100 plus unit properties, mainly in the southeastern us. So North and South Carolina and northern Florida, I have some properties in Kentucky. And I partner with investors to buy those properties. So I do what’s called a real estate syndication, which means that there’s a number of passive investors, usually with a $50,000 minimum, who contribute to the downpayment of the property and the capital expenses needed to renovate the property. And then we partner together, I’m the Managing member there, the limited partners, buy the property, do renovations, upgrades, increase rents, and then usually sell it between three to seven years depending on market conditions, or return for the investors.
Brett:
And we’ll dive into that and what you’re seeing in today’s multifamily marketplace right now, by the way, you can learn more about Chris Lento at EMCapitalGroup.com. But before we dive into the multifamily world, and what’s going on, I want to take us back, perhaps up to earlier days, I want help to help to see help me and listeners get to know a little bit more. And I believe Chris, we’ve all been given certain gifts in this life. And these gifts have been given to us to be a blessing to others. Some people call them superpowers, some people call them strengths so maybe it’s the high school days college days, I’m curious, what is maybe one or two gifts that you believe you are given? And how does it help how you help and bless people today?
Chris:
I think two things that I’m particularly good at are figuring out how things work and having a curiosity to figure out how things work. So kind of in a real estate context, how I got into real estate in the first place was out of college, I, you know, living in an apartment building or small apartment building in Boston. And I’m kind of looking around saying, like, you know, who owns this thing, you know, me and three of my friends live here, we all pay $500 each, that’s 2000 a month and there are three apartments, like how does this work? And I just sort of like figured it out, like God, you know, what the library actually at the time, pre-Amazon, got some books out and just figured it out. And I guess another thing that um, that I think is one of my skills is I’m good at bridging people of different disciplines. So I have a talent for kind of understanding enough about many areas that I can bridge kind of communication gaps between them and help bring people together. And that’s been valuable in my kind of pre-real estate career and now, so I’m not really an expert at much but I can kind of bridge a lot of gaps.
Brett:
Excellent. I love those two gifts. It’s really a unique curiosity to figure out how things work right and then going in and doing those things. And then the second discipline of bridging multiple disciplines and communication and kind of clean, getting all the I guess the wires to align, is that a fair summary?
Chris:
Exactly right. Yeah.
Brett:
Excellent. Well, then let’s dive right into the multifamily world and we’ll try to apply some of those things with the ways that maybe you see or find deals. So what’s the number one secret in today’s marketplace to find? deals that actually make sense. When it comes to value, add force appreciation, multifamily properties? Where are you finding them? How are you finding them? And maybe you can give us a live deal that you recently closed that you’re closing?
Chris:
So I mean right now, multifamily is extremely popular. demand is high all across the country. And for the type of deals that I’m looking for, which are really, I’ll say, three to $25 million properties. It’s, it’s all about brokers. It’s brokers, broker relationships, knowing, knowledge brokers at a personal level, communicating with them often haven’t been clear with them on what you’re looking for, why you’re looking for it, what your plan is, and then having them trust you and believe that you can close. So certainty of clothes is huge, you know, it’s not always the highest price that gets the, you know, that gets the contract signed, it’s the best value, which is a, you know, a combination of price and certainty of clothes and terms of the contract, as far as how much money you’re putting hard when, so all those factors, but I know there are some people out there, cold calling seller sellers, or potential sellers. But that’s a tough road. And I’ve never had success at it personally.
Brett:
Absolutely do. It’s working right, do what works for your strengths and what’s worked so far, you got something else to add to that?
Chris:
You asked for an example. So there’s a broker that I sold a property through in Boston, about, probably four years ago. And we’ve, and I’m not really looking to acquire in Boston. Price on a primary, I would for a good deal. But I still keep in touch with them. And we’re friends. And we sort of talk maybe every two weeks, or once a month about the market about interest rates just about how his property is doing. But our kids, and he heard that I was selling one of my properties in Boston and looking in North Carolina, and he had a business contact, who was selling something in North Carolina, he acted as the intermediary I got in an offer in before it went to market. And kind of putting everything together now, and we’re closing in 30 days. So I would never have got that property if I waited for it to go to market. And just was one of who knows, a half a dozen people that were, offering asking prices, which is what I did I offered asking price, and it was the relationship. I mean 100%.
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