Craig Berger 0:00
Since 90% of hedge fund managers do not outperform the s&p 500 on a net of fee basis, it probably just makes sense to own s&p 500 index fund and other other index funds for your equity exposure unless you’re really good at picking hedge fund and investment managers that outperform. So, stocks I don’t view as being particularly controllable, you’re just sort of riding the market. And that’s fine. On the real estate side, I think it’s totally different real estate sponsors have the ability to make their money going in buying value. A lot of the process of owning a multifamily apartment investment is controllable expenses are more or less known. You know, debt is forecast suitable within a range there’s really only a few things we don’t know as multifamily operators and that’s, you know, sort of what is top line growth really look like and what sort of multiple can we achieve on the property when we sell it? What kind of cap rate or selling price can we achieve down the road?
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J Darrin Gross 1:39
Welcome to Commercial Real Estate Pro Networks CRE PN Radio. Thanks for joining us. My name is J. Darrin Gross. This is the podcast focused on commercial real estate investment and risk management strategies. Weekly we have conversations with commercial real estate investors and professionals who provide their experience and insight to help you grow your real estate portfolio.
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Today, my guest is Craig Berger. Craig founded Avid Realty Partners in 2015. After spending more than a decade on Wall Street as a multi award winning equity research analyst. The firm’s portfolio has grown meaningfully in recent years, and includes acquisitions and operations of over 14 150 units in secondary and tertiary markets throughout the United States.
And in just a minute, we’re going to speak with Craig about Wall Street versus real estate. But first a quick reminder, if you like our show, CRE PN Radio, there are a couple things you can do to help us out. You can like share and subscribe. And as always, we encourage you to leave a comment. We’d love to hear from our listeners. Also, if you want to see how handsome Our guests are, be sure to check out our YouTube channel. You can find us on YouTube at commercial real estate pro network. And while you’re there, please subscribe. With that I want to welcome my guest, Craig Berger. Welcome to CRE PN Radio.
Craig Berger 3:30
Darrin, thanks so much for having me. Really excited to be here.
J Darrin Gross 3:34
I’m looking forward to our conversation today. But before we get started, if you could take just a minute and share with the listeners a little bit about your background.
Craig Berger 3:44
Sure, yeah, I studied I studied accounting in school went into went into corporate finance and Intel Corp out of school did a few years working at Intel Corp, sort of learning how to run a large business learning a lot about semiconductors. I had always been interested in Wall Street. So I went to go work for Citigroup, Smith Barney to go right equity research for their semiconductor analyst. And that sort of launched me on a 12 year career in, in research on Wall Street. That was a good run, but my portion of Wall Street was shrinking. And I really wanted to roll up my sleeves and do something entrepreneurial. And so at the age of 37, I walked away from my desk job and said about to build something meaningful and found my way to multifamily and commercial real estate is a way where I could deliver investor returns and hopefully do good things for our residents and the community at large and be a more active entrepreneur than I was able to be working working for large investment bank brokerage firms. And so that was sort of my my My journey.
J Darrin Gross 5:02
Got it as a research analyst where you, you, I guess I want to things I think, excuse me on on Wall Street I usually think a lot, a lot of excitement, you know, big, big trades and stress and all that kind of thing. As an analyst. Can you describe kind of what what your role is in that or whatever what it was?
Craig Berger 5:26
Sure. So, we, we sell side equity analysts typically cover one sector and have expertise in one sector I covered semiconductors, we formally cover 10 to 20. Companies in that sector rate those stocks a buy, hold or sell, published formal research with earnings estimates that all gets sent to Thomson Reuters and get aggregated among all of the analysts that cover Nvidia, for example, so the street expects 78 cents of earnings this quarter. Well, I was one of the analysts that helped to comprise the street. But essentially, we would perform analysis, make stock picks provide recommendations and advice to our hedge fund and mutual fund clients, as well as to our banks, internal traders, and our clients, our hedge funds and mutual fund clients would typically pay the firm for the research by executing trades. I believe that executing trades for research is no longer allowed. But that’s basically the role back in the 80s and 90s, there was no regulation, fair disclosure, the information flowed more freely between the C level executives of the companies and the research analysts. But now information is supposed to be disseminated all at the same time. The the, the hedge funds can’t pay for research and trades. And so frankly, the role of the research analyst has sort of continued to shrink, there’s always a place for it for deep analysis and expertise. But it’s not as large of a role as I think existed in the 80s. And 90s. I myself was not making trades, there was definitely an opportunity to move over to hedge funds, or mutual fund companies for employment and to work on that side. That’s the buy side, they’re buying the research ideas that the trading execution, the sell side is selling the research ideas and the trading execution. And so that’s sort of the background on sell side versus buy side by side is definitely more of a world of, of actual practice and implementing real trades. And a real real risk management sell side is a little bit more of a world of theory. Hopefully, that background is is helpful.
J Darrin Gross 8:00
I appreciate you sharing that, because like I said, the the analyst. I don’t know of any movies really show that the analysts, you know, hard work kind of reading and talking with, you know, people and trying to come up with a conclusion is usually the buy, buy, sell, sell kind of a reference point when I think of you know, Wall Street or the floor, the trading floor kind of thing. But I’m curious, given that that was your your position. As an analyst, it sounds a lot like an underwriting position. You know, that would be a good fit for real estate when you’re looking at assets, either to buy and or to liquidate. Do you find that that? That training, transferred, the skill set transfer? And did it help you with when you got into real estate?
Craig Berger 8:53
Great question, a lot of the skills do transfer and then I’ve had to build and learn a whole new arsenal of additional skills. But certainly being on the sell side coming coming from that Wall Street world gave me the good fortune of underwriting companies and their financial futures on a very regular basis tracking actual results versus plan or budget or forecast, living and breathing the stock market, the ups and downs sort of riding the economic cycles, which is particularly relevant today. And and where we are, with a don’t fight the Fed and type of type of mentality. We’ve learned, you know, risk management, I got to spend time with C level executives that were doing, they were executing at a very high level or perhaps folks that were executing at a lesser level and so that was a great training ground. Obviously, it is a very theoretical kind of thing. And so when I cut over to Real Estate and really started over started from scratch, you know it It didn’t require learning a whole bunch of operational, entrepreneurial, and sort of in the weeds, skills that are that are particular to real estate. But I brought all those other read, you know, research related skills with me and importantly, developing an institutional mindset as we approach our assets and growing our business.
J Darrin Gross 10:26
I would think that’s, that’s a, again, an interesting transition. And like said, there’s more to learn. But just kind of background, as you mentioned, you know, having had that, that I guess, the publication side as an analyst, where you are publishing your, your expectations, and then I’m assuming you’re in you tell me Does that, does that help you when when attracting capital are presenting the prospectus? Or preparedness prospectus for investors? Or I mean, seems like they’d be somewhat similar in the structure and what you’re trying to convey or just that that speak is that, is there any transfer there?
Craig Berger 11:13
Our investor pitch decks are very thorough, and I think they they look good. I’ve been told that there’s as much good information and our pitch decks as folks have seen, a lot of times I’m putting that information together for myself and my own analytic curiosity. So yeah, I think it helps, right, we also, of course, write quarterly investor updates, that tend to be pretty thorough, other original content at a certain point, and running and founding this business, I can’t write every investor update myself. I can’t write every every bit of sort of engagement content myself anymore. So it does help and also, you know, doesn’t scale perfectly.
J Darrin Gross 12:05
Yeah, I get it. So real estate a, you mentioned, you’re ready to leave Wall Street, what was the attraction to wall to real estate.
Craig Berger 12:19
So my Wall Street career was great. But I really wanted to set out on a path of independence, I wanted to set out on a path of self control, and self determination, where I could take control of my life, my career, my future, and not be dependent on other others and and I wanted to build a business that had the corporate culture that I want. That treats people the way that I think they should be treated. And where we can build meaningful wealth for ourselves, our employee, team members, our partners, and be in a position to do great things for our customers in need, or the community at large. It’s a long journey, it’s not something that happens quickly, there is no such thing as get rich, quick. Real estate is if you work hard, and are smart, you hopefully can get rich slowly. But you know, there’s no shortcut around time persistence, smart decision making, value identification, or really, I set about on this journey, this long, long journey to build something meaningful and have control over my own destiny.
J Darrin Gross 13:44
No, I like it. When you first started it, did you start with the creating the firm, or did you start investing on your own? Or how did that look?
Craig Berger 13:59
Well, I didn’t know what I wanted to be when I grew up. It’s still a period of, of self discovery, and, and I creating an identity. I know a lot more now than I did back in early 2015. So we had to throw spaghetti at the wall, try a bunch of different things and see what worked what didn’t work, what we like what’s good for me what, what I’m good for, with projects and so on. So it’s, it’s been a journey of self discovery and growth and learning. I did buy my first deal in 2015. It was a total of $375,000 of equity for a 95 unit apartment building. You know, in a demographically, ciao challenge to location. You can imagine that we didn’t fully Um, capitalize the project as much as it probably needs 95 units 375,000 of equity. But we we did well and and, you know, we did a value add program at that property we focused on improving safety and security then we started upgrading units and common areas and, and writing the journey. I bought and sold a couple hotel properties one sort of value add exterior corridor property was particularly challenging, but that was a similar value add type of deal are total project on 110 doors you know, I bought one and that leased property. So I’ve I’ve dabbled in various food groups and, and explored and discovered and, you know, really multifamily is our main business, our only business today. But there is this period of self discovery I think, you know, had I gone back and done it differently. Maybe I would have gone to work for an Angelo Gordon or a Blackstone or, you know, a real estate investment firm and learn the business and gotten some credentials. Maybe that would have been easier, maybe that would have been smarter or more risk managed. But that’s not my journey. That’s that’s not what I did. That’s not who I am. And so I’ve sort of done this my way. And, you know, I’m not sure if I have regrets or don’t have regrets, but it is, it just is what it is. This is my path. And I’m not going to pretend to have been on any other journey than what I was actually on.
J Darrin Gross 16:47
No, I’m still curious to learn more about the 95 units for 375,000 in equity, that sounds like a pretty I’m guessing there’s a lot more to that story there.
Craig Berger 17:00
Well, we bought it on an auction site, we got a great basis, we didn’t find any of the any of the capital improvements, we took that all from cash flow, you know, when my property manager by the one that I that I inherited when I bought the deal when when she quit on the first of the month, you know, I flew into town to go be the property manager myself for six weeks, it was my only asset. And failure was not an option. So, you know, I learned a lot about property management and asset management and dealing with with residents dealing with issues that come up and learn sort of empathy for what property managers face on a day in and day out basis. And so now when I now when I go and see my property managers, I have unlimited gratitude and appreciation, love, respect, admiration for all that they bring to the table, you know, sort of a formative experience. And, you know, I’m thankful that I didn’t, didn’t, didn’t avoid.
J Darrin Gross 18:07
Yeah, now it sounds like a rich learning environment there to, you know, jump in feet first like that. And and it sounds like there was some opportunity to improve the property there. So, just out of curiosity, it sounds like it’s a value add opportunity. How long did you keep it before you guys exited that?
Craig Berger 18:33
So we’ve, we’ve about seven years. Okay.
J Darrin Gross 18:40
So just just recently, then you
Craig Berger 18:42
I actually, just to be clear, I still own that asset. One other asset, and they are being marketed right now for sale. And I’m sort of attached emotionally attached to that asset, which is never a good thing. But you know, it’s, it’s my first deal. It sort of holds a special place in my heart. And the staff that have been there with me for seven years are like family and, and, you know, we’ve, we’ve done well, so we refinanced the deal back in 2018. And we sort of had a 3x of our capital on a refi. So we’re sort of already playing with house chips on that asset and, you know, the environments a little more challenging right now to sell any asset. I think it’s a I think it’s a home run basis for the next owner. And we’re sort of working through the details of that and one of our other legacy assets, it’s about a mile away. It’s sort of a two pack 240 units, and I still think a great basis for that for that Tupac got it. And we’ve we’ve owned it for seven years and and I’m considering parting ways.
J Darrin Gross 20:01
Gotcha. Well, that sounds like a, again, a great starting point sounds like it’s done well and and wish well with the your exit on that. If he if he ended up selling it sounds like that’s that’s always a possibility might not. So you got the first property was that? Did you do that as a syndication? Did you have partners? How did you go about snow because
Craig Berger 20:32
it was a very small amount of equity I put in about half of the capital personally and then I had two partners put in the other half of the capital.
J Darrin Gross 20:41
Craig Berger 20:44
I had no experience or track record to go out and syndicate. And then second deal, I was able to convince a few friends and family to support me on the value add hotel deal. We did that that was successful. You know, obviously, these play out over a period of years. And then I bought a few other, you know, smaller deals about my first institutional asset in early 2018. So it did take about sort of three years to work into what I’d call my first institutional asset. And, you know, thankful for the, for the institution that invested in a roughly roughly $5 million of equity into that deal for us to buy that and you know, have a great relationship with those folks and gratitude for, for them giving me an opportunity. And I think ultimately we we delivered for them on that asset counted.
J Darrin Gross 21:46
You mentioned the hotels, and I know that currently you guys are focused on multifamily. Were you actually operating the hotels then as well? Or were you was just just a property acquisition you lease on? Or how did that work?
Craig Berger 22:01
So we so I had a partner on the deals sort of a junior equity partner on the deal who had hotel experience hotel operations experience, we did self manage, I’ve sort of been through this self managed versus third party manage debate in my head on a number of assets over and over. But we did self manage, and again, sort of another rich learning and learning experience and, you know, a sort of a night and day change from, you know, working, working, working for investment bank firms. And then and then moving over to this in the weeds, you know, series of experiences. But, you know, adversity makes people strong and doing a variety of different things sort of has given me perspective. So we did, we did self manage, and that was challenging, and I did have a partner that helped me on that front.
J Darrin Gross 23:02
Gotcha. So, you moved from Wall Street, you’re into a real estate. If you were to compare the two as far as, like an investment opportunity, how do you how do you position or how would you compare, like a stock as opposed to real estate? What are what are the things that you you see, or that your investors are, are appealing to your investors?
Craig Berger 23:36
Well, it’s a fantastic question. I think there’s a place for equities and a balanced and diversified investment portfolio. I think there’s a place for real estate and hard assets in a balanced and diversified investment portfolio, as well as depending on your age bonds, other alternative investments, private equity, and potentially some modest exposure to crypto. But you know, here’s how I think about stocks. You’re kind of writing the market. And if the market goes up, your portfolio’s up, the market goes down, your portfolio is down. You know, back in the day, hedge funds were actually hedged. They would be, you know, long Google short Facebook. And if the market went up or down, it didn’t matter. And if Google outperformed, it did matter. And they were protected against market moves and hedged. Very few hedge funds or investment managers on the equity side are really hedged today, and so you’re really just writing the market wave. And so, you know, since 90% of hedge fund managers do not outperform the s&p 500 on a net At a fee basis, it probably just makes sense to own s&p 500 index fund and other other index funds for your equity exposure. Unless you’re really good at picking hedge fund and investment managers that outperform. So, stocks, I don’t view as being particularly controllable, you’re just sort of riding the market. And that’s fine. On the real estate side, I think it’s it’s totally different real estate sponsors have the ability to make their money going in buying value. A lot of the process of owning a multifamily apartment investment is controllable. Expenses are more or less known. You know, debt is forecast to fall within a range, there’s really only a few things we don’t know, as multifamily operators, and that’s, you know, sort of what is top line growth really look like? And what sort of multiple can we achieve on the property when we sell it? What kind of cap rate or selling price can we achieve down the road? So a lot of it is known. And controllable. I don’t want to say it’s formulaic at all, because it’s not, but I feel like I have more control over multifamily investment than I do over my my stock portfolio. So that’s sort of how I think about it. You know, there’s obviously some well known and well discussed benefits to real estate investing, you’ve got ongoing cashflow. Yes, you have appreciations. You’ve got tax favored and tax advantaged status, you get cash flow distributions that are typically not cash not not not treated as income because of the depreciation protection. Your income or gains down the road are treated as capital gains later, instead of income tax rates in today, dollars. And importantly, real estate, while slow, can be non correlated, or less correlated with the global moves in the equity markets and whatnot. And so it’s a good balance, and I think it’s controllable. Obviously, you have to pick great sponsors, or participate in some other way. So that’s sort of how I how I think about stocks versus versus real estate.
J Darrin Gross 27:38
I appreciate you doing the comparison there. As far as a real estate investment philosophy, can you provide kind of some what your guys’s how you operate? or particular markets you look for size? Or? Or sounds like value add is kind of a strategy, but just a little bit of what you’re looking for and properties that you’re acquiring?
Craig Berger 28:09
Sure, yeah. So in terms of markets, we like markets that are growing, we like in migration, growth markets, most of the most of the units that we’ve bought have been in Texas, I think Texas is a great market, sort of a business friendly environment, you got a lot of fortune 502,000 companies that are moving there. Obviously, we want to invest where people want to live. And where, where it’s easy to operate. I’m in New York, I live in New York, I’ve never done an investment in New York, because there’s so many rules and laws and regulations and complications. And I just, you know, I don’t know what I can or can’t do here. And I don’t really feel comfortable putting my own or other people’s money to work in an environment where I don’t know what I can or can’t do and what’s legal or not legal, and it’s just too complicated. And I’d rather be simple. You know, to me simple is places like Texas, Florida, the Carolinas. You know, Nashville is a good market. I do like some of the markets in the Midwest where you get a little more value for your money. Maybe you get less appreciation, less job growth, less rent growth, but a friendlier entry cap rate and purchase price places like Columbus, you know, Cincinnati. Indianapolis has been pretty good and Kansas City has been pretty good. You know, so it’d be sort of a complement to some of the faster growing markets in Texas and Florida. When I do like Vegas a lot and Phoenix a lot. Those are two markets that I’ve never been able to make the cashflow work I’ve never been able to make the numbers work so I’ve never bought anything there. But I’ve lost because those markets have gone up. Among the most of any, you know, it’s a tough pitch to buy it a three, two cap and improve it to a four cap and sell it again, for three, three cap. It’s, you know, I haven’t been able to get on board with that, but but again, my loss. So we like to buy in growth markets, we’re building a diversified footprint across markets. In terms of asset class, we, we, you know, we buy A’s, B’s and C’s, I’ve obviously come up in the seas, but I think it’s, I think it’s helpful to have a diversified footprint of newer assets at higher prices and older assets at lower prices, and a mix of demographic exposures. So, you know, we’re not getting negatively impacted by any one trend at any one point in time. That’s sort of a longer term vision, I don’t necessarily have enough scale today, we bought roughly 2000 units total over our history. So I wouldn’t say have enough scale to have fully executed that plan. But that’s sort of a longer term vision. Does that answer your question?
J Darrin Gross 31:20
Yeah. No, I appreciate that. Do you guys operate in a syndication model now? Or do you have a fund? Or how are you?
Craig Berger 31:28
So we’re in the final stages of forming our first fund, one of the reasons that we’re forming a fund is that we can take investor dollars 24/7, at any point in time, rather than sort of racing the clock and saying, Hey, we have 40 days to fund this deal, here’s the deal, do you want to see the deal? Are you ready to invest and get your checkbook out rapidly and come out really into the, I’m not really into the whole pressure sell thing. So I’m trying to get out of the Purgatory of racing a 40 day or 60 day clock to, you know, as fast as possible, raise money and get the deal done, and, and so on. But, you know, I have lived in that zone, that’s still where I’m living, and we hope to hire and scale and grow, we’re hiring a lot right now. And we’re, we’ve sold some deals early this year, late last year, and we’re taking those resources and, and, and redeploying into into people processes and systems right now to build out every facet of the of the company and building out means hiring folks to handle our capital markets and and capital raising efforts and handling people to source more and better products and handling, you know, corporate type of folks to handle the back office infrastructure and, and management of the investors and the product. And so we have been in the syndication model, sometimes will, will work with an institutional investor who comes in for 6070 80% of the deal, and then we syndicate out the rest of the deal. So it’s sort of a mix. And, you know, we’re deal by deal today, but but looking to, to move more towards, you know, a dry powder, you know, on balance sheet capital type of model in the future.
J Darrin Gross 33:29
I think that’s kind of the progression I hear, you know, firms, as you get experienced and have a track record of with investors and stuff that the fund model gives you on more flexibility. So I appreciate that. As far as managing your your assets, do you guys, do you have a in house management? Or do you do sub up to management, and all your other services.
Craig Berger 34:01
So on our two legacy assets in St. Louis, that I talked about earlier, we do self manage, and that’s because they require will require a great amount of care. There’s not really that much scale. And you have to be really committed to managing those locations. So we do it ourselves. And I have a full time partner on the ground in St. Louis, who, who takes a leadership role and allowing us to self manage those assets. And it’s been again a great learning experience. On the institutional assets. We do utilize third party, we’ve typically used Roscoe properties, RPM living in in Texas for our Texas based properties they they’ve executed at a high level for us. There’s other great management providers out there as well. But we take a very hands on role with the asset management work that we do. We have a bunch of sort of key performance indicators and spreadsheet trackers that we’re we’re tracking our properties on on a weekly basis, to make sure we’re getting maximum performance out of the properties, and maximum engagement with the third party property management providers, and getting the most work and effort and results out of out of any third party provider. You know, it’s, it’s usually a positive attitude, we’re one team one dream, we all want the same thing, we want to make the asset perform of peak levels. But we do, you know, take a very sort of focused approach on, on ensuring that these assets perform, and we’re very hands on at every facet of owning these assets. So it’s not really a casual process. It’s a very engaged and focused process. And, you know, I have so much gratitude for the hard work that the third party folks put into these properties. It’s not an easy business, it’s a very hard business, you’re dealing with people’s lives, people’s homes, it can occasionally get messy. And, you know, I try to keep that in mind. And every time that I’m dealing with folks from from, you know, maintenance, maintenance people on up through regional DPS are the owners of these third party management companies.
J Darrin Gross 36:30
Well said, as far as you know, the multifamily marketplace right now, you’ve you’ve been doing this long enough to see kind of the the trend for the last five or six years. And now we’re entering into kind of a, a new phase or a different phase with interest rates. Do you have any kind of expectations or, you know, a sense as the former analysts do any kind of future view to what you’re expecting? The market to do? Or do you have any kind of thoughts based on what you’re seeing in the market right now?
Craig Berger 37:12
Wonderful question. Everybody has views, thoughts and opinions, mine isn’t any more important than anyone, anyone elses. But look, half the country rents. And, and, you know, there’s always going to be demand for apartments so that that’s good. That’s good from an ownership perspective. Prices have definitely come down quite a bit and multi over the last six months. It’s still hard to make these deals work, there’s still properties most properties selling at a four cap. And we’re now out borrowing at five and a half fixed and six and a half or 7%. Bridge. So it’s still hard to make these deals work. rents have obviously gone up a lot, I think there’s still some ketchup to be had for a lot of properties. But this inflationary period is mostly behind us at this point. And I think that’s true for the broader economy. I think we’re past the worst of the inflation. I know. The market has sold off on the August inflation numbers a lot yesterday. But you know, July, inflation was more or less flat month on month, I think August was up point one or point 2% month over month. If you carry that forward for the next year, if we get 10 more months like that will be on a inflation that’s up, you know, one or 2% year over year, which is great. So I mean, I saw a lot of inflation in early and mid 2001. And on all the way through 21 and early into 22. But I feel like prices have more or less stopped going up, at least based on what I can see. You know, prices have come down so it should be easier to buy multifamily. But the reality is a lot of the capital on the sidelines, has evaporated stock markets down 25% Kryptos down. The Fed is sucking liquidity out of every market, the bond markets and so on. There’s they’re shrinking their balance sheet, you know. So, it’s a lot harder to get people to part with their cash right now in this environment. It’s true of institutional investors. And it’s true of of individual investors. If you’re a large institution that has a lot of on balance sheet dry powder, it’s an amazing opportunity to go out and scoop up assets on the cheap and I think Two or three years from now, those folks will have done very, very well. If you don’t have on balance sheet capital, and you’d have to go convince people to give you capital, it’s a very scary, risky time to go out and take risk and try to convince people of such, which is why a lot of operators and investors are on the sidelines right now. But I do think it’s a great buying opportunity prices have come down, this business is not going away. And one thing that we’ve learned from being in the apartment business or from watching this business, is that it’s very rare for rents to go down. In periods of weakness, they flatten out, you get concessions, maybe you get more vacancy or non collection. But rate really doesn’t contract or doesn’t contract for any meaningful period of time. And so if you can buy cheap now and write out the near term, choppiness, I think in three, four years, you’re gonna, you’re going to be thankful for taking the risk and doing the work, which is why we’re still out in the marketplace, buying deals and trying to negotiate the very best entry points that we can on any assets so we can deliver outsized returns, for our investors, while continuing to grow the platform.
J Darrin Gross 41:21
I think the legs of the marketplace and demand while the housing demand is strong, the the uncertainty, keeping some of the investors on the sideline, but sounds like you know, is we kind of sorted out there are going to be some opportunities and and for those with capital should do well. So that’s good. If we could Craig, I’d like to shift gears here for a second. By day, I’m an insurance broker. And as such, I work with my clients to assess risk, and determine what to do with the risk. And there’s three strategies we typically consider, we first look to see if we can avoid the risk. When that’s not an option, we look to see if there’s a way we can minimize the risk. And when we cannot avoid nor minimize the risk, then we look to see if we can transfer the risk. And that’s what an insurance policy is. And as such, I like to ask my guests, if they can look at their own situation. Could be your clients, investors, tenants market political landscape, however you would like to frame the question with regards to the biggest risk is for you to to determine. But for clarification, while I am an insurance broker, I’m not necessarily looking for an insurance related answer. And so if you’re willing, I’d like to ask you, Craig Berger, what is the biggest risk?
Craig Berger 42:57
Darrin, you’re really good interviewer, you’re asked some great questions, and you’re really smart. Our biggest risk, my biggest risk is taking a finite amount of personal resources and growing a business. I’m hiring I’m buying deals and having the investor of last resort or the backstop in any of my deals if if a deal needs more money, I really don’t do capital calls. I’ve I’ve always invested out of my own pocket and the very few limited cases where one of our deals or properties is needed more money. So I’ve got a number of demands on my personal resources, most of which revolve around growing a business. So that’s my biggest risk. How do I hire top flight and top quality, talented sea level executives, investor management, personnel, acquisition personnel, back office personnel, with my resources, how do I go out and buy quality deals when when I have to raise the money in a finite period of time. And so those are those are some of the biggest risks on our assets, we’ve really paid mostly prices that I feel really good about. So I don’t feel like any of our projects are a risk. You know, again, that’s one of the great things about multifamily. We’re buying below replacement cost we’re buying into a business that is fairly stable overall so I like the the multifamily and commercial real estate business. And we’ve never lost money on any deal yet knock on wood. And hopefully, hopefully we won’t. So you know, my risks are more around corporate level. risks and how to scale a business with, you know, limited limited personal resources. We have exited, you know, a number of properties over the last year. So my resources are a lot less limited than they were a year or two ago. But they’re still limited in terms of growing the business and hiring talented people that need and deserve to make, make a make a living.
J Darrin Gross 45:30
No, I appreciate all the hats you wear. That’s, you know, it’s one thing to to invest but it’s an entire different thing or a whole nother level is to be you know, operating as the leader of a company and, and trying to balance and, you know, compensate those that are helping you grow. You and your your investors portfolio there. So I applaud you for that. Hey, Craig, where can listeners go? If they would like to learn more connect with you?
Craig Berger 46:06
Sure. You can email me Craig at Avid Realty partners.com. You can go to our website, Avid Realty partners.com, you can find me on LinkedIn. All my contact information is there. And this has been fantastic. I really appreciate the opportunity to be on your podcast and have this conversation with you.
J Darrin Gross 46:30
Likewise, Craig, I appreciate that. And, Craig, I do want to say thanks for taking the time today to talk it’s it’s been a good one. And I’ve learned a lot and enjoyed it. And I look forward to doing it again soon.
Craig Berger 46:45
Awesome. Thank you so much.
J Darrin Gross 46:48
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