One of the great features of the private real estate business is that insider trading is legal. Those who can uncover and act on private information have a real edge.

Although the industry will continue to institutionalize, with the big getting bigger, there will always be a place for the hungry, local sharpshooter.

That’s where I’m putting my money.

In my recent post on why I’m getting excited about the multifamily business again, I included a quote about the unique opportunity for multifamily sharpshooters:

“Scale is not the only path to winning. The market has always had room for the sniper shop: hyper-focused operators who know exactly which submarket they want to be in and why, and who are right more often than they are big. That model can still work. It just requires you to actually be a sniper and not merely a small fund with sniper aspirations.”

That line has been rattling around in my head for weeks. The industry uses “sharpshooter” to mean roughly “any shop with fewer than ten employees.” Being small is not a strategy. Local is not a strategy.

So what does a real sharpshooter look like?

First, why does this matter? As I described in the post, the easy money in multifamily is gone, and returns over this next cycle need to be earned.

With no cap rate compression and materially higher borrowing costs, the only lever left is NOI growth. This comes from buying the right asset at the right basis at the right time with the right business plan, and executing on it.

In the previous cycle, beta paid. Today, alpha is the only source of return left.

The Definition

A multifamily sharpshooter is a hyper-local, specialized owner-operator whose proprietary insight and relationships uncover opportunities before the broader market sees them, and who is attuned enough to local resident demand to build a business plan the out-of-towner can't underwrite. Together, those advantages compound into outperformance over a long hold.

Proprietary Information

The sharpshooter knows the ownership history of every asset in the submarket: who owns it, what they paid, when they bought it, how they've operated it, where the upside sits, and what it would take to get them to transact. While the out-of-towner is seeing the deal for the first time in a broker blast, the sharpshooter submitted an LOI three weeks ago to pre-empt the process entirely.

This knowledge is earned over time. It comes from walking the asset. It comes from a decade of conversations that went nowhere. It comes from scouring the neighborhood Facebook groups and the local subreddit to understand what residents actually care about.

Relationships

The sharpshooter knows every broker, owner, lender, and equity source in the market. They bring them deals first. They put them on the short buyer list. They tell them things they wouldn't put in an OM. Most of a sharpshooter's day is spent on the phone or across a table, and that looks unproductive right up until the moment it's the only reason a deal happened.

An important aspect of this is likeability. A broker would rather transact with the local operator he's known personally for fifteen years than with a faceless acquisitions associate at a corporate behemoth who might not be there in a year.

Research-Driven & Disciplined

What separates a sharpshooter from an operator who's simply bullish on the neighborhood he lives in is the ability to step back and assess the big picture.

When you've watched a submarket for fifteen years and know every asset personally, that intimacy makes it hard to see when the story has changed. The sharpshooter runs on qualitative insight and anecdotes but validates them against hard data including the supply pipeline, absorption, new-lease versus renewal rent growth, expense trends etc. and is willing to conclude that the market he loves is a market he shouldn't buy in today.

The Limits

The challenge is that sharpshooting is hard to scale. The edge is a function of depth in a market. It’s difficult to be a sharpshooter across multiple markets.

It also concentrates risk. Your entire thesis lives in betting on a handful of submarkets. Local conviction is a levered bet on being right about one place.

The industry is institutionalizing, and every consolidation of a competitor is converting a group that used to bid on mid-sized deals into a platform that structurally can't anymore. Nobody who just raised a multi-billion-dollar vehicle is spending a Tuesday chasing an off-market 200-unit deal from a tired local owner who won't return a call.

That's a gap in the market only the sharpshooter can fill.

The big will keep getting bigger. That's fine. It's exactly what is creating the opportunity.

That's where I'm putting my money.

This is my first post since February – I haven’t gone that long without posting since I started this blog in January 2009.

This is telling and highlights my general lack of excitement for the real estate business over the past few years.

Correction, the last 3+ years have flat out sucked.

Everyone in multifamily wanted to believe in a quick V-shaped recovery and some sort of mythical return to the post-GFC goldilocks period, but no one really thought that would happen.

I even started to question whether or not the multifamily business, where I’ve spent my entire career, was a good business. It is.

It’s actually a great business, and slowly but surely, things are starting to change. We’re beginning to revert to how the business was always meant to operate.

The surest sign of this reversion is the number of post-mortems that have been published.

Here are a few of the best.

• Housing + Markets — The Apartment Trade Is Over. Back to Apartment Investing.
• CRE Analyst — It Sounded Like a Good Idea at the Time (paywall)
• Reset Basis – Mmmmm…. Great Vintage
• The Promote Newsletter — Diary of a MF Operator: What Happens When Things Stop Being Easy (Insider)
• CRE Analyst – You’re Probably a Zoo Bear (paywall)

The common thread is acceptance. The 2010–2022 period was the anomaly, not the norm we're going to revert to.

As CRE Analyst put it, “before the money got easy, real estate was a hunt. It was a hyper-competitive, winner-take-most business where growth was never evenly distributed and most operators got eaten.”

We’re getting back to the hunt. Which is fun.

Starting in 2023, every value-add operator was making the same pitch to buy distressed high-quality assets at core-plus risk, which is a trade that never really materialized.

3+ years later and (most of) the market is finally realistic about the opportunity set in front of us.

Let’s dig in.

The Opportunity Set Is Becoming Real

The pricing reset has already happened. Cap rates have reverted and operating fundamentals have largely bottomed (Jay Parsons – Is Multifamily Finally Turning a Corner), meaning prices have generally bottomed as well.

Housing + Markets lays out the simple math: apartment cap rates went from ~3% in mid-2022 to ~5% by the end of 2025. That move alone erased something like 30% of value from peak basis. On top of that, operating fundamentals deteriorated, dragging values down further.

With NOIs down ~10%-15%+, many deals in highly supplied submarkets are down ~50% in value, which is mind-blowing for a historically stable asset class and highlights just how crazy the 2021-22 peak was.

Take, for example, this '90s commodity deal in Fort Myers, where operations have gotten crushed.

It’s worth ~$75M today, which is ~50% of the seller’s basis.

There are tons of similar stories out there.

So while the pricing reset has happened, it’s going to take time for deals to wind their way through the system, meaning these opportunities should surface over the next ~12-24 months.

The Forward Outlook Is (Generally) More Realistic

The multifamily “trade” is over — the tailwinds that powered the last cycle have all reversed: cap rate compression is gone, we’re unable to flood the system with credit to the same relative degree, demographic trends are less favorable, and the underbuilding we saw post-GFC is long gone.

We’re now in a normalized environment where deals have to cashflow and operators need to create real value to achieve value-add returns. It's an environment where a disciplined operator can actually win on sharp-shooting and flawless execution.

It’s taken longer than expected, but supply is being absorbed, deals are clearing, and owners/lenders/investors are accepting the reality.

The Unsophisticated Buyers Have Been Weeded Out of the Market

Real estate is not a zero-sum game, and I root for risk-takers to be rewarded, but in order to restart the cycle and bring us all down to reality, there have to be some losers.

The groups that grew fastest on high-leverage floating-rate debt and a view that trees can grow to the sky have largely exited the market or restructured (everyone loves a comeback).

Multifamily was never meant to generate 2.0x returns over 3 years and the market has to accept that.

There’s a lot of pain and it’s a horrible situation for many LPs, but the de-levering is vital to re-setting the cycle.

The Market Should Reward Sharp-Shooter Operators

With the glory days well behind us, the industry at the institutional level is now re-structuring around two mega-trends: scale and cheaper cost of capital.

The Promote's "hard mode" newsletter details these trends.

A series of acquisitions highlight the focus on scale. Sun Life's $350M acquisition of Bell Partners (70K units and $10B in AUM) which is being folded into the Canadian insurer's platform. Apollo acquired Bridge Investment Group ($50B AUM, 55K units). Toll Brothers sold its apartment platform to Kennedy Wilson. Lennar offloaded most of Quarterra to TPG. Bluerock and Preferred Apartment Communities both got absorbed into BREIT. Blackstone's LivCor is already at 150K+ units and pulling property management in-house.

These acquisitions are about scale, which leads to cost efficiencies that firms start to realize at 50K+ units and that become a moat at 150K+ units.

The capital story is just as important: LP capital demanding 17% net returns can't fund an asset class generating modest NOI growth. So the entire institutional multifamily market is targeting cheaper money such as insurance balance sheets, retail, 401(k) access, and perpetual vehicles.

For these firms, the math works when their cost of equity drops and they decrease expenses through centralized operations and real tech via massive scale.

This is great for institutional owners who are buying beta and letting compounding do its thing.

At the same time, I also think it’s great for sharp-shooter operators like us who are working like hell to find/create value.

This quote from the Promote says it better than I could:

“Scale is not the only path to winning. The market has always had room for the sniper shop: hyper-focused operators who know exactly which submarket they want to be in and why, and who are right more often than they are big. That model can still work. It just requires you to actually be a sniper and not merely a small fund with sniper aspirations.”

Being small is not the advantage — the advantage is being a hands-on owner/operator who knows their market inside and out.

Despite all the advantages the big guys have, I believe the local owner, with true skin in the game, is going to outwork and be more creative than the associate at Blackstone who is merely doing his job (no offense).

In fact, I’m betting my career on it.

It’s an Incredible Time to Be an Entrepreneur

(Almost) everyone gets into acquisitions to do their own deals one day. It's what makes this industry special. There’s a whole ecosystem of aspiring entrepreneurs working inside shops.

The problem with a 15-year bull market is that it never gave talented people a clear opportunity to jump.

Atlas was founded in 2010, and the firm would not have survived if it was founded in 2016, 2019, or god forbid 2020.

Timing was the key to our early success.

2026 feels like the first real window since the years after the GFC to start a firm.

Promote is cooked (sucks, but it’s true), it's the start of a new cycle, and tech/AI have collapsed startup costs and amplified talent.

It’s insane what a talented team of 2-4 people can do today.

The Anti-Institutional Advantage

This is the part that matters most to me, so I'll end here.

Atlas doesn’t sit inside a bank, an insurer, or a REIT. We aren't governed by risk limits, quarterly EPS targets, or a governance committee.

We don't have a CIO who needs the deal to be defensible to a board that's never visited the submarket.

Every structural feature that makes scale a moat also makes it a drag on decision-making.

Multifamily was always a get-rich-slow business, but for 15 years (my entire career) it was a trading asset.

It’s time to get back to basics and back to the hunt.

Let’s go!

The story of multifamily housing in America isn't just a story about units built. It's a story about who rents, why they rent, and what "apartment living" actually means — and how all three have fundamentally changed.

Between 1970 and 2024, developers started construction on roughly 19 million apartment units in buildings with 5 or more units across the United States. But if you walked through a typical community built in 1975 and one built in 2022, you'd think you were looking at two entirely different asset classes — because you are.

Here's what actually happened, decade by decade.

*This post was drafted in part with AI using my prompts and thesis. What AI can do today genuinely blows my mind, and I am focused on active experimentation. Drafting this post is one such experiment.

The 1970s: Volume Over Everything (Average: 495K units/year)

The 1970s were the single most prolific decade for multifamily construction in American history. In 1972 alone, developers started 906,000 apartment units — a record that still stands today, more than 50 years later.

The driver was simple demographics. The Baby Boom generation — 76 million strong — was leaving home. The median age at first marriage was just 21 for women and 23 for men. Millions of young adults needed somewhere to live between leaving their parents' house and buying their first home. The apartment was a waystation, not a destination.

And the product reflected that mindset.

The dominant format was the garden-style apartment complex: two- and three-story wood-framed walkups, spread across suburban land that was cheap and abundant. These were cookie-cutter developments — simple rectangular buildings with surface parking, basic clubhouses, maybe a pool. Flat roofs, exterior corridors, aluminum windows, carpet over concrete slab. Units were functional but spartan: laminate counters, basic appliances, hollow-core doors, minimal soundproofing (single-layer half-inch drywall was standard).

These communities weren't built in desirable neighborhoods. They were built where land was cheapest — along highway corridors, near commercial strips, in unincorporated areas outside city limits. The operating assumption was clear: nobody aspires to live here permanently. Renting was what you did before you could afford to buy. The apartment industry's job was to provide affordable, temporary shelter — and in the 1970s, it did that at unprecedented scale.

The construction boom was also supercharged by favorable tax policy. Accelerated depreciation schedules made apartment development an attractive tax shelter, drawing capital from investors who cared more about write-offs than operations. The result: a lot of units got built, but not with any particular attention to quality, design, or long-term durability. Many of these 1970s-vintage communities are the Class C value-add targets that investors were buying at 3 caps at the top of the market.

The 1980s: Tax-Fueled Boom and Bust (Average: 379K units/year)

The early-to-mid 1980s saw a second wave of apartment construction, peaking at 576,000 starts in 1985. But the motivation was different from the 70s. While some demographic demand remained, much of the 80s construction was driven by tax shelter incentives that made multifamily development irresistible to passive investors.

The product was marginally better than the 70s — you started seeing more attention to curb appeal, better landscaping, slightly upgraded finishes. But the fundamental template was the same: garden-style, suburban, 2-3 stories, surface-parked, built to a price point. Average apartment sizes actually grew somewhat as developers competed for tenants, but the target renter was still the same: a young person or couple marking time before homeownership.

Then came the Tax Reform Act of 1986, which eliminated the passive loss deductions that had fueled apartment investment. Overnight, the economic rationale for building changed. Combined with the S&L crisis that wiped out the thrift institutions that had financed much of this construction, multifamily starts collapsed — falling from 576K in 1985 to just 138K by 1991, a 76% decline.

The late 80s also marked the beginning of a profound stigma shift. Renting was still widely viewed as inferior to owning. "Apartment complex" conjured images of transient populations, thin walls, and generic locations. The industry had built a massive stock of essentially commoditized housing, and it would take years — and an entirely new generation of renters — to change that perception.

The 1990s: The Slow Rebuild and the Seeds of Change (Average: 235K units/year)

The 1990s were the quietest decade for apartment construction since the data series began. After the S&L collapse and tax reform, development capital was scarce and apartment demand was muted. Starts averaged just 235K per year — less than half the 70s pace.

But beneath the surface, something important was happening. The stigma around renting was starting to crack.

Several forces converged. Urbanization accelerated as young professionals were drawn to revitalizing downtown cores in cities like Chicago, Denver, and Charlotte. The first wave of "urban renaissance" projects began appearing — loft conversions in old industrial buildings, mixed-use developments with ground-floor retail, mid-rise projects in walkable neighborhoods that bore no resemblance to the garden-style complexes of the prior decades.

These weren't being built on leftover land along highway frontage roads. They were being built in real neighborhoods — places with restaurants, cultural amenities, and proximity to employment centers. And they weren't basic product. Developers began introducing granite countertops, stainless appliances, fitness centers, and concierge services that would have been laughable in a 1970s apartment community.

The tenant profile was evolving too. Median age at first marriage climbed from 23.3/25.5 (women/men) in 1985 to 25.1/26.8 by 2000. More young professionals were spending their 20s — and increasingly their early 30s — as renters, and they had rising incomes and higher expectations for their living environment. The apartment wasn't just a waystation anymore. For a growing share of the population, it was becoming a lifestyle choice.

The 2000s: Bifurcation Begins (Average: 291K units/year)

The 2000s saw moderate apartment construction — starts averaged around 291K annually — but the type of product being built changed dramatically.

The decade was defined by bifurcation. On one end, the existing stock of 70s and 80s vintage garden apartments continued to age and filter down the quality spectrum. On the other end, new construction increasingly skewed luxury. Developers responded to the "renter by choice" demographic with resort-style amenity packages, architectural design that rivaled for-sale condominiums, and locations in A-grade submarkets that previous generations of apartment developers never would have considered.

The wrap-around (or "Texas Donut") construction type became prevalent — wood-framed units wrapped around a structured parking garage, typically 4-5 stories, in urban infill and suburban town center locations. Podium construction — residential units built atop a concrete parking structure — emerged in higher-cost markets. Both formats represented a quantum leap in construction quality, cost, and renter experience from the garden-style template.

Meanwhile, the homeownership boom of 2003-2006 temporarily suppressed renter demand, as loose credit standards allowed millions of households to buy homes. But the collapse of that bubble in 2008-2009 would permanently reshape the relationship between Americans and homeownership. Starts cratered to just 97K in 2009 — the lowest level since FRED began tracking the data.

The 2010s: The Renter-by-Choice Revolution (Average: 292K units/year)

The 2010s are where my thesis really comes into focus. Coming out of the Great Recession, multifamily construction surged — but the product being delivered was overwhelmingly Class A.

Consider the numbers: approximately 80% of new apartments built during the 2010s were classified as Class A or B by CoStar. RentCafe's analysis of buildings with 50+ units found that the decade delivered 2.4 million new apartments — a construction boom unseen since the 1980s — and an outsized share were high-end.

Why? Three reinforcing trends:

1. Demographics shifted permanently. Millennials — 72 million strong and the largest generation in American history until Gen Z — entered their prime renting years. But unlike the Boomers of the 1970s, they weren't rushing to get married and buy houses. Median age at first marriage climbed to 27.8/29.8 (women/men) by 2018. Student debt loads ($1.7 trillion nationally) made saving for down payments difficult. Many simply chose to rent longer — and expected their rental housing to reflect their income and lifestyle aspirations.

2. Renter incomes rose dramatically. Nationally, the number of households earning more than $150K/year who rent increased 157% between 2010 and 2018, growing two times faster than high-earning homeowner households. This wasn't a population that wanted laminate counters and aluminum windows. They wanted quartz, stainless steel, smart home technology, rooftop decks, co-working spaces, and pet spas.

3. The homeownership stigma fully inverted. For the first time in American history, renting wasn't just accepted — it was aspirational for a significant segment of the population. The Great Recession had shattered the notion that homeownership was a guaranteed path to wealth. Meanwhile, the rise of the experience economy, remote work, and urban living made the flexibility and amenity-rich lifestyle of luxury apartments genuinely appealing. 74% of Millennials rent rather than own — and many do so by choice, not necessity.

The locations reflected this shift. New construction migrated from the suburban periphery to prime infill locations — urban cores, transit-oriented sites, and high-end suburban submarkets near top-rated schools, retail corridors, and employment centers. These weren't the "average or below-average locations" that characterized 70s and 80s construction. These were A-locations commanding A-rents.

The 2020s: Peak Supply Meets Peak Expectations (Average: 433K units/year, 2020-2022)

The post-COVID period produced the most dramatic multifamily construction surge in 35 years. Starts hit 531K in 2022 — the highest since 1987 — driven by pandemic-era rent growth, migration to Sunbelt markets, and historically low interest rates in 2020-2021.

The product being built today represents the ultimate expression of the "renter by choice" thesis. Modern Class A communities feature:

• Construction quality that rivals or exceeds single-family homes: double-layer 5/8" drywall, offset studs for sound isolation, luxury vinyl plank, quartz surfaces, smart-home integration as standard.
• Amenity packages that read like boutique hotels: resort pools, demonstration kitchens, co-working suites, package lockers, pet spas, cold plunge and sauna facilities, pickleball courts.
• Unit mixes calibrated for the new renter: larger one-bedrooms with dedicated home offices, "roommate-friendly" two-bedroom layouts, and even three-bedroom units targeting families who rent by choice in high-cost markets.

And the demographic forces keep accelerating. The median age at first marriage has hit an all-time record: 28.6 for women and 30.2 for men as of 2024. Nearly three in four Gen Z renters view renting as a smarter option than buying, per Entrata's survey data. 59% see it as a long-term choice, not a stepping stone. Home prices remain 40%+ above pre-pandemic levels in most markets, and mortgage rates above 6% have locked out a generation of would-be first-time buyers.

But 2024 brought a reality check. The supply wave hit, vacancy rates climbed to 15-year highs (6.3%), and rents declined roughly 3.5% from their 2022 peak. Starts plunged to 336K — down 37% from the 2022 peak — as the economics of new development deteriorated. The pipeline is contracting sharply, which sets up an interesting dynamic for the back half of the decade.

The Investment Implication

Here's the punchline for anyone in the multifamily investment business:

The 1970s and 1980s produced an enormous stock of basic-quality apartments in average-to-below-average locations. These communities — now 40 to 55 years old — are the backbone of America's naturally occurring affordable housing. They are also, by definition, the oldest and most capital-starved segment of the rental market.

The 2010s and 2020s produced a massive stock of luxury apartments in A-locations. As these units age, they'll filter down and compete more directly with the renovated Class B product that sits between them.

The communities caught in the middle — 1990s and 2000s vintage B-quality product in decent locations — represent a narrowing band of "investable" multifamily. Understanding this secular evolution in what was built, where it was built, and why it was built isn't just interesting history. It's the foundation for making better investment decisions today.

Data sourced from U.S. Census Bureau/HUD New Residential Construction reports, FRED (Series HOUST5F), NAHB, RentCafe/Yardi Matrix, Harvard Joint Center for Housing Studies, CoStar, and the American Community Survey.

More than any other post, this one is for me.

Writing has always been how I solve problems—taking something complex and distilling it into its simplest form. "Writing is thinking. You cannot write clearly if you aren't thinking clearly."

For me, AI is a complex topic I need to write about to understand.

Everyone's racing to implement it. But most private real estate firms, Atlas included, are lost. We know AI is a massive paradigm shift that will change the way we work, how we spend our time, and what skills are most valued. We know it will require us to rethink our structure and culture.

What we don't know is exactly how it all shakes out. But we're taking proactive steps to prepare.

The first thing we’ve done is consolidate and organize our data. OMs, PSAs, PPMs, OAs, side letters, loan docs, property-level reporting, investor reporting, market data, SOPs, etc. etc.— all the document chaos that defines private real estate. The backbone of unlocking these powerful AI tools is organized data and standardized processes.

As Alex Robinson from Juniper Square put it: "You can't automate chaos. If ownership, definitions, access, and change management are broken, AI initiatives fall back into shadow spreadsheets and mistrust. Being AI-ready is less about the tech stack and more about whether the organization can absorb a new way of working."

This process reinforces the value of adaptability:

With our data is organized, we're mapping out all the work we do as a firm, understanding which tasks can and will be done by AI and which are better done by people. This includes creating process maps and SOPs for each individual task, from underwriting a new deal, to negotiating a PSA, to preparing a quarterly investor letter, to prepping an asset for a refi or sale.

It quickly becomes clear which tasks will be done by AI.

Take underwriting, for example. The initial BOE can be auto populated using AI tools and data from the T12, rent roll, comps, tax research, and market data. Tools like Shortcut are doing this today. Models that took hours can now be completed in minutes.

But these tools won't replace our analyst. Team members should stay flexible about their roles and embrace opportunities to adapt and grow. Think about who you are in a world where AI can do the technical work. No matter where AI goes, there's always going to be a role for humans.

AI doesn't replace people. It makes their domain expertise and what I like to call “shoe leather experience” more valuable.

Here's what I mean.

An AI agent can process every line in a document. It can build spreadsheets, extract data, and summarize information faster than any analyst. That's table stakes now.

But it can't answer the questions that actually matter and ultimately drive returns. Take acquisitions: AI can't build a reputation where unique opportunities come your way. AI doesn’t have the deep domain expertise and experience to read the seller's motivation, understand why you should be confident in the upside, know why you're positioned to execute, and recognize why this opportunity fell into your lap in the first place.

AI can’t visit an equity partner and clearly tell the story behind the deal. And the story is where the value lives.

AI can pull comp data, summarize rent rolls, and track absorption trends. But it can't tell you why residents will choose this property over the comps.

You get the point.

Expertise is earned from years of walking properties, talking to onsite teams and residents, and understanding what actually drives value.

One of the advantages of being a relatively small organization is that it's easier to be nimble, to rework infrastructure from the ground up without layers of bureaucracy slowing things down.

On a personal level, we all have a choice. You can fear that AI will do what you get paid to do, performing the skills you spent your career honing better than you ever could. Or you can use the additional time and support to explore areas of curiosity.

An acquisitions analyst doesn't have to be constrained to inputting data and underwriting deals. They can spend time in markets uncovering untapped areas. They can cultivate broker relationships through in-person events. They can explore the merits of alternative investment strategies. They can build a personal brand through writing on Twitter and LinkedIn.

Real estate has always been document-heavy but data-poor. AI is changing the data part. But the judgment, the pattern recognition built from doing deals over many years, that's becoming the differentiator.

The tools are getting smarter. The question is how do we get smarter about using them.

Charlie Munger often said the easiest way to succeed is to avoid stupidity rather than chase brilliance. In investing, that means sticking to a few core principles and avoiding big mistakes.

Nowhere is this truer than in real estate.

Real estate is a relationship business where success is based on taking smart risks, maintaining long-term optimism, and, most importantly, staying in the game.

Amateur tennis is a perfect analogy. At the amateur level, most points aren’t won, they’re lost through unforced errors. The players who succeed aren’t the flashiest or most talented, they’re the ones who keep the ball in play and let their opponents make the mistakes.

Real estate investing works the same way. Long-term success comes not from brilliance, but from consistently avoiding errors.

However, as the industry has become more institutionalized, with more data and technology at our fingertips, there’s been a trend toward adding complexity to seek alpha.

This shift has led to the development of complex investment theses, niche asset classes, shorter-term hold strategies, over financialization, operational intensity, and technology embedded in all facets of the business, etc.

We’ve managed to take a business that is inherently simple and should be relatively low risk and make it unnecessarily complex and risky.

As a multifamily owner-operator, I constantly have to remind myself to keep things simple.

Here are a few of my core principles for multifamily investing:

• Every good deal starts with a motivated seller
• Your investment thesis should be comprised of the 2-3 levers which drive all the value – everything else is noise
• Deals can be underwritten on the back of a napkin
• Buy deals that have a clear, supportable path to NOI growth
• Don’t buy the value created, create value
• Buy below replacement cost
• It all comes down to supply/demand
• Don’t over-lever the deal and use fixed-rate debt whenever possible
• Maintain hold period flexibility
• Match the capital with the intended business plan
• The stabilized yield should be at least 150 bps spread to market cap rates
• Buy in good to great locations in markets with job, population, and wage growth
• Avoid big mistakes – survive and let time & compounding do its thing
• Understand capital flows and how multifamily investing compares to alternative investment options
• Be an expert in your space
• Buy deals with a strong product-market fit
• Don’t let the tax benefits wag the dog
• Know why people live there – it may just be price and that’s ok
• People want to do business with people they like. Relationships first – deals later

All of these investing rules are simple, but the reality is that being a multifamily owner-operator is hard.

With so much information available, it’s easy to overanalyze and build complex investment theses.

With heavy competition for capital, it’s tempting to over-engineer differentiation.

With endless performance data, it’s natural to want more reporting.

With new software, it’s enticing to keep layering onto your tech stack.

With AI, it’s easy to expect everyone to be faster and cheaper.

Running a multifamily investment platform is hard, but it doesn’t have to be complicated. The key is to break the business into its component parts, strip away unnecessary complexity, and focus on making small, consistent improvements over time.

There’s a story in James Clear’s Atomic Habits that captures this idea perfectly.

“After World War II, Japanese manufacturing was struggling. Their products were seen as low-quality compared to American goods. But instead of trying to make big, dramatic changes, Japanese companies — most famously Toyota — adopted a philosophy of continuous, incremental improvement, known as Kaizen.

Workers at every level were encouraged to identify tiny inefficiencies and suggest ways to improve them — even small things like rearranging a tool station to save a few seconds. Over time, these 1% improvements compounded, transforming Japan’s manufacturing reputation. Within a few decades, Japanese electronics and automobiles (like Sony, Toyota, and Honda) became synonymous with excellence and reliability, surpassing many American competitors.”

As a multifamily owner-operator, we only need to do a few things:

• Find good deals, finance them appropriately, and execute them well  
• Provide quality/transparent reporting and be a fiduciary to your investors
• Build a team, culture, and infrastructure designed to scale

That’s it. If we do each of these things well, we’ll build a highly successful and profitable company.

One of my favorite things to do is collect quotes which I reference often (organized in Sublime).

Here are a few that resonate with me and serve as daily inspiration for keeping things simple in investing and business.

“A novice is easily spotted because they do too much. Too many ingredients. Too many movements. Too much explanation. A master uses the fewest motions required to fulfill their intention.” - James Clear

“The highest level of mastery is simplicity. Most information is irrelevant and most effort is wasted, but only the expert knows what to ignore." - James Clear

“Get rid of irrelevant details so that the essential things and the relationships between them stand out. As the saying goes, Any damn fool can make it complex. It takes a genius to make it simple.” - Ray Dalio

“Most complexity is unnecessary, but we manage it instead of removing it because deletion requires courage that addition doesn't.” - James Clear

“We avoid doing simple things that work because they don't make us look smart.” - James Clear

“Smart people feel stupid doing simple things, so we invent complicated alternatives that accomplish less but feel more intellectually satisfying.

Meanwhile, the people who dominate their fields are doing embarrassingly basic things, but they do them better than everyone else.” - James Clear