In this episode of the LSCRE Podcast, Craig McGrouther and I tackle whether alpha is dead in multifamily real estate.

I explain how institutionalization has compressed returns across the board, but opportunities still exist through vertical integration, market expertise, and innovative strategies. We break down what true vertical integration actually means and how these "one percenters" create the actual value add that generates alpha in today's competitive market.

The discussion also covers the disconnect between official job reports and economic reality, with persistent data revisions revealing a weaker labor market than reported. Craig and I explore the three critical components of real estate value, including land, structure, and finishes, explaining why location is the only appreciating asset and should be the primary focus for long-term investors seeking stable returns and strong exit liquidity.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther sits down with Joe Downs, CEO of Belrose Group, who shares his journey from financial advisor to bar owner to self-storage operator. After multiple career reinventions, Joe discovered that 80% of self-storage facilities are owned by mom & pop operators – creating a massive opportunity for professional operators who can bring modern technology, dynamic pricing, and professional management to an outdated industry.

Joe explains his investment thesis for self-storage, including why he focuses on the Southeast, and the surprising data showing millennials use storage 3x more than Gen X. He breaks down how to evaluate markets using supply-per-capita metrics, why median household income matters, and how to avoid oversupplied markets. Whether you're looking to diversify beyond multifamily or curious about alternative commercial real estate, this episode reveals the opportunities in an often-overlooked asset class.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther sits down with Gino Barbaro of Jake and Gino, who shares his 20-year journey from running a restaurant to owning 1,800+ multifamily units. After spending 18 months finding their first 25-unit deal for $675K (now worth $2.5M), Gino explains how he worked full-time while building his portfolio – dedicating 15-20 hours weekly to real estate until 2015.

He emphasizes the importance of limiting downside risk and following foundational principles: "buy right, manage right, finance right." Gino warns against rosy rent projections in today's market, noting that properties advertising $1,500 rents with concessions really rent for $1,400. His key insight: in periods of stagnant rent growth and rising expenses, investors need 5-7 year horizons, not the 24-36 month exits that spoiled the market during 2020-2022's "sugar high."

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther sits down with Casey Stratton, who shares his journey from corporate layoffs during the GFC to building a real estate portfolio using the 1% rule – buying duplexes for $100K that rented for $1K/month. Now focused on Eastern Washington's Tri-Cities (one of the top 20 fastest-growing MSAs), Casey discusses how they're navigating today's 0.75% reality by pursuing true off-market deals and pivoting to development.

After securing a 33-unit property from an 86-year-old seller below market rents, they're launching their first ground-up development of 140 units. Casey reveals how Washington's new rent control (7% + CPI cap) changes the value-add playbook, requiring 2+ years just to reach market rents.

His key insight: sub-50 unit deals remain inefficient enough for arbitrage opportunities while institutional capital chases larger assets.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig Mcgrouther sits down with Axel Ragnarsson of Aligned Real Estate Partners, who's carved out a unique niche buying 5-20 unit properties direct from sellers in Southern New Hampshire. Since 2016, Axel has built a 525-unit portfolio by maintaining long-term follow-up with sellers, often nurturing relationships for 12-18 months before closing. 

He explains how 75% of his deals bypass brokers entirely, capturing inefficiencies in the $1-5M deal range where 15-20% discounts are still possible. With New Hampshire being the only Northeast state with positive population growth and minimal new supply, Axel's market has avoided the operational distress plaguing sunbelt markets. 

Learn more about LSCRE:
www.lscre.com 

In this post-LSC Summit episode recorded in NYC, Craig McGrouther and I reflect on another successful investor event and dive deep into current market opportunities. We share behind-the-scenes insight on why our summit is designed to break even, the power of curated in-person networking, and the culture of accessibility that sets our events apart.

We break down why 1970s-80s vintage multifamily is becoming the sweet spot – institutional capital is chasing 2000s and newer assets while retail syndicators who dominated older stock have retreated after losses.

I explain how concessions persist in Class A despite predictions they'd burn off, while the "Goldilocks" 2005-vintage market is now overpriced.

The key insight: older assets in prime locations offer the best risk-adjusted returns if you have the operational expertise to handle deferred maintenance. We also dissect why traditional value-add strategies often fail when brokers pitch replacing perfectly good countertops.

Our contrarian view: the best time to spend CapEx is when nobody else wants to.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther sits down with Andrew McNair, founder of SWAN Capital, who shares his remarkable journey from saving $62K working at McDonald's and Denny's as a teenager to losing it all in the stock market at 19. After reading Rich Dad Poor Dad at 14, Andrew worked for free at a wealth management firm while maintaining jobs, eventually building a portfolio of 54 rental properties by age 30.

The stress of hands-on management led him to pivot toward syndications through Cygnet, targeting geographic diversification across multifamily, storage, medical office, and flex industrial. Now managing $20M+ annually for retirees, Andrew emphasizes the importance of having "skin in the game". All SWAN employees invest 100% of their retirement funds in their own portfolios.

His key insight: business owners need both active and passive real estate exposure to truly understand what they're solving for.

Learn more about LSCRE:
www.lscre.com 

In this episode of the LSCRE podcast, Craig McGrouther, Sam Morris, and I tackle the "hackneyed" concept of value-add investing and why it's been reduced to a one-trick pony of kitchen renovations. We explain how value-add became overused to the point of losing meaning, with sponsors pitching newer construction as "value-add opportunities".

We explore alternative value-add strategies: operational improvements, financial restructuring, and amenity additions like in-unit washers that can generate $50/month on a $1,200 investment. Rob shares his contrarian view that many value-add success stories from 2015-2022 were simply riding a bull market, not brilliant execution. 

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther sits down with Marcin Drozdz of M1 Capital, who shares his 20-year journey from buying his first property at 19 to raising $300M for Ken McElroy during the 2008 crisis. Marcin reveals how he bought medical amd dental plazas for 20-30 cents on the dollar during the GFC, targeting insurance-backed tenants that remained recession-proof.

He breaks down the "3 P's" of fund raising: People, Process, then Property – inverting the typical syndication approach. Recently closing a Houston deal at $77K/door with discretionary capital, Marcin explains why having "money in the bank" creates massive negotiating leverage.

Looking ahead, he warns of potential credit tightening that could force a pure equity environment, fundamentally changing how deals get done. His contrarian take: we may be heading into stagflation where assets collapse in real value while appearing to rise on paper.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther and I dive deep into the nuances of "above the line" and "below the line" expenses in multifamily underwriting. We explain how the "line" is Net Operating Income (NOI), with operating expenses like payroll and insurance sitting above, while CapEx and debt service fall below. I reveal the art behind these classifications and how a unit renovation could be coded as either R&M (above) or CapEx (below) depending on interpretation, affecting the property's apparent NOI and cap rate.

Using their current deal as an example, they show why contract services dropped from $127K to $57K and how they're handling bulk WiFi implementation.

The key insight: every sponsor underwrites differently, and sophisticated buyers/lenders understand these financials are normalized to each party's standards. This is essential knowledge for anyone evaluating multifamily investments.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther sits down with Bernard Pierson, co-founder of EHP Capital, who's been LP investing since 2012 and now focuses on value-add multifamily in Kansas City. Bernard reveals a counterintuitive insight from his 50+ LP investments: deals projecting 15-17% IRRs often outperformed those advertising 30%+ returns.

He shares how Kansas City has consistently ranked in the top 5 U.S. markets for rent growth over the past 3 years while avoiding the supply issues plaguing gateway markets. Bernard breaks down their operational value-add approach, including discovering 200 unchecked voicemails on a property's leasing line that no one was monitoring. With family office investors from Latin America, EHP targets 17-18% IRRs, 5-7% cash-on-cash, and 2x equity multiples using conservative 60% LTV agency debt. His key lesson: the boring, down-the-fairway deals often deliver the best risk-adjusted returns.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther and I tackle two of the most frequently asked questions from investors: bonus depreciation and 1031 exchanges. With 100% bonus depreciation returning, they explain why this doesn't automatically mean 1:1 depreciation for investors, breaking down how leverage, CapEx, and land allocation affect your actual depreciation ratio. Using our current deal as an example, we can show why conservative 65% leverage yields ~45% depreciation rather than the 90% you'd get at 80% leverage, but creates a much safer investment.

We also demystify 1031 exchanges, clarifying the crucial difference between exchanging INTO a deal (minimum $1M via tenancy-in-common) versus exchanging OUT at the partnership level after exit. I emphasizes the "magic" of syndications: allowing everyday investors to compound wealth tax-free through partnership-level 1031 exchanges without needing millions upfront.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther sits down with Bryan Morris, co-founder of Seven Peak Capital, who shares his journey from earning $50K at Pepsi to building a successful fund management firm serving tech sales professionals. Bryan reveals how Rich Dad Poor Dad at age 22 changed his trajectory, leading him to buy his first rental property for $88K with just $17K saved. After relocating to NYC and completing Wharton's real estate certificate, he discovered the power of syndications for high-earning tech professionals stuck in expensive markets. 

He breaks down Seven Peak Capital's dual strategy: multifamily equity plays and private credit opportunities, focusing on 2000+ vintage properties with 5%+ year-one cash flow. 

His key insight: tech professionals need diversification beyond company stock and market exposure.

Learn more about LSCRE:
www.lscre.com

In this episode, Craig McGrouther sits down with Joey Mure from Wealth Without Wall Street, who shares his transformation from earning $300K+ in the mortgage business to building $50K/month in passive income. Joey reveals why traditional financial advice kept him trapped in the "never enough syndrome" despite high earnings, and how a beach vacation where he missed family time for work calls became his wake-up call.

He challenges conventional wisdom by explaining why 401(k)s and home equity are "money traps" that don't create financial freedom today. His formula for freedom: passive income must exceed monthly expenses TODAY, not in 40 years. This is a masterclass in rethinking wealth building from someone who learned the hard way that high income doesn't equal freedom.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther and I discuss the upcoming Lone Star Capital Summit and why this curated event stands apart from typical real estate conferences.

We then shift to market analysis, discussing why Class C properties and 1970s vintage assets are facing extreme pessimism, creating potential contrarian opportunities where capital isn't flowing.We also touch on the dramatic market reaction to weak jobs data on August 1st, which flipped the probability of a September Fed rate cut from 50% to 80% in a single day.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther sits down with Derek Dombeck, host of Generations of Wealth podcast and veteran real estate entrepreneur with 23 years of experience. Derek shares his story of losing everything in the 2007-2009 crash. Instead of playing victim, he learned to negotiate his own short sales and transformed his approach to real estate, swearing off institutional financing in favor of creative deal structuring.

Derek breaks down recent deals including a subject-to purchase at 3.15% interest with seller financing at 0%, and explains how he structures participating notes with IRA investors to create win-win scenarios. His philosophy: "You don't find creative deals, you build them through conversations." This is a masterclass in resilience and creative financing from someone who turned disaster into opportunity.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther, Sam Morris and I break down Trump's "Big Beautiful Bill" and its massive implications for real estate investors. The return of 100% bonus depreciation is a game-changer, allowing investors to front-load tax benefits in year one of ownership. We discuss how wage growth has outpaced rent growth for 31 consecutive months (per Jay Parsons), creating a healthier rent-to-income ratio and setting up potential for future rent increases as new supply dwindles.

We also address recent Houston foreclosure headlines, explaining how their focus on workforce housing in desirable locations differs fundamentally from distressed investment strategies. Key tax updates include no tax on tips (first $25K), overtime tax deductions, increased standard deductions, and permanent QBI benefits. For investors, these changes make cash-flowing real estate even more compelling versus taxable debt investments.

Learn more about LSCRE:
www.lscre.com 

In this episode of Fund Friday, Craig McGrouther sits down with David Thompson, founder of Thompson Investing, who shares his journey from corporate executive to full-time real estate investor and capital raiser. David reveals how he pivoted into real estate syndication, what he learned from investing across economic cycles, and why diversification is critical in today’s environment.

He discusses timing the market, the role of alternative investments like dental funds, and the importance of building strong relationships with operators. You’ll also learn why patience, education, and long-term thinking are key to navigating real estate and private investments especially in uncertain times.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig and I tackle the controversial topic of promote structures and fund manager compensation. We break down the double waterfall structure for fund managers and why projected compensation is never guaranteed.

I share the framework for evaluating deal quality across four key factors: location, vintage, leverage, and business plan. We explain why chasing deals with sky-high projected returns often leads to disappointed fund managers earning zero when aggressive underwriting meets reality. We also emphasize that sustainable success comes from serving tenants and investors first, not chasing the highest projected compensation.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther sits down with Hannah Wyatt, LSCRE's Director of HR, who shares her remarkable journey from Executive Assistant to building our HR infrastructure. Hannah reveals how she absorbed HR operations when they brought everything in-house, creating systems that now support over 5,000 units across our portfolio.

She breaks down their innovative hiring pipeline using AI-powered resume screening and Culture Index personality assessments to match candidates with the right roles. Hannah explains their unique position structure, including the Community Relations Representative role they created for highly sociable candidates who might not fit traditional property management positions.

Her philosophy: "You're not just completing tasks, you're building solutions" that impact everyone in the organization.

Learn more about LSCRE:
www.lscre.com 

In this episode of Fund Friday, Craig McGrouther interviews Sarah Miskelly, founder of Hylee Capital, who shares her inspiring journey from growing up in multifamily property management in Toronto to becoming a location-independent fund manager living between Costa Rica and Canada.

Sarah reveals how real estate created lifestyle freedom for her family and why she pivoted from being a top-producing real estate broker to launching her own investment fund. She explains the disciplined due diligence process she uses today to vet institutional-grade deals and protect investor capital.

You’ll learn:

• Why DSCR at 1.0 is a red flag
• How she evaluates cap rate assumptions for risk
• The power of private credit and diversification across multifamily, triple-net, and energy assets
• How she built sustainable income beyond back-end equity
• Candid advice for aspiring fund managers and capital raisers

If you're raising capital, evaluating deals, or designing a lifestyle around real estate investing, this episode is packed with actionable insight.

Learn more about LSCRE:
www.lscre.com 

In this milestone 100th episode, Craig McGrouther and I share an incredible news: Preserve at Copperleaf, a 240-unit, 2003-vintage apartment community LSCRE acquired in May 2024, just closed on a hugely successful 45% cash out refinance! We acquired this property for $34M and it appraised at $53.7M, allowing investors to receive 45% of their investment back while the remaining equity continues earning 8% cash flow.

We break down how we achieved this through strategic timing, tax exemptions, and securing a 7-year full-term interest-only Freddie Mac loan at 65% LTV. We also dive deep into our unique anniversary-based budgeting system that keeps us accountable year-round rather than scrambling during "budget season," plus how our operations team earns bonuses based on actual performance versus budget across revenue, R&M, payroll, and expenses.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther sits down with Scott Croul of George Smith Partners to discuss navigating the longest multifamily downturn in recent memory at 36 months and counting. Scott breaks down the current capital stack dynamics, revealing that preferred equity is now pricing at 12-14% with roughly 50% current pay, making it surprisingly competitive for sponsors.

They dive into why bridge-to-bridge financing went from "bad word" to standard practice, and how sponsors are focusing on capital preservation rather than chasing returns. Scott also highlights the market bifurcation: institutional investors are flooding into 2000+ vintage properties with all-cash offers while pre-90s assets struggle to find any buyers. Despite the challenges, Scott sees light at the end of the tunnel with supply chains frozen and absorption remaining strong across major Texas markets.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther welcomes Pascal Wagner, founder of Grow Your Cashflow. Pascal shares his journey from managing a $150M venture capital fund at Techstars to becoming an LP investor with $250K+ in annual passive income across 23 investments. He reveals how his Venture Capital background shaped his investment thesis approach and why he shifted focus to debt funds in 2022, perfect timing to avoid the multifamily distress.

Pascal breaks down his three pillar framework for LP success: having a clear investment plan, comparing deals with proper context not in isolation, and mastering due diligence with his 100 point checklist. Plus, he explains the "money pie" concept, how to balance investments between cash flow, equity growth, and tax benefits to build sustainable six figure passive income.

Learn more about LSCRE:
www.lscre.com 

In this episode, Craig McGrouther sits down with Sawyer Zimmerman from our asset management team to discuss what really drives property performance in today's challenging market. Sawyer manages over 2,000 units across our portfolio and shares how we've revolutionized our hiring process using Culture Index assessments to find the right talent for each role.

We dive into why curb appeal and maintenance teams are critical for resident retention, how our new community admin onboarding program reduces turnover, and why renewals (not new leases) are where you actually make money in multifamily. Sawyer also reveals how proper staffing can be more cost-effective than vendoring out services, and why having people "act like owners" makes all the difference in property performance.

Learn more about LSCRE:
www.lscre.com