Triplex to $100M: Zach Rucker’s Blueprint for Multifamily Mastery w/ Will Mussack

Zach Rucker shares his journey, $100M strategy, capital challenges, AI tools, daily habits, and Midwest deal focus—offering a sharp playbook for real estate investors seeking clarity and scale.

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►Tyler Deveraux (@tyler_deveraux), CEO of Multifamily Mindset & Managing Partner of Multifamily Capital Partners
►Cyndi Maguire (@cyndigap), Real Estate Investor & Consultant at the Multifamily Mindset
►Zach Rucker (@zachrucker), Underwriting Mentor at the Multifamily Mindset

Transcript

A multifamily mindset podcast. Think bigger. All right. Welcome back to the multifamily mindset podcast. I'm your host today, will Musa, usually I'm behind the camera, but today I'm in the interview, Interviewer seat, and I'm interviewing someone you know very well, Zach Rucker, and Zach, I wanted to get straight into it, man, just I want to see you humble, brag about yourself, and can you tell me about the deals that you're currently under management they have under management, and what's what's coming down the pipeline?
Yeah, well, it's a long story with that, but super excited to be on this deals. You know, I've currently worked through three deals with the previous partnership, and now I'm, I'm working with ephes capital, if anyone knows them, jumped on and partnered with them, actually, earlier this year. So six months in, and we've been, we've been crushing it and working on deals. Got two deals in the pipeline that we're closing here, one in June, one in July, and now looking, looking for the next one, got a handful of deals, you know, that we're just analyzing and looking through to get the next one closed.
That's awesome. Deals, deals, deals. What it sounds like. That's right, yeah, yeah. So well, so how many units do you have under management right now? And can you give us? Can you quantify this? Quantify that for us in units and dollars? Yeah.
So let me Yeah. So on the dollars in previous partnership, it was about 33 million assets under management, which was close to 400 units. And then Evis capital has about 60 million assets under management, but moving up to what those under contract will be up at 80, 80 million assets under management there. So combined of just what I've been working on will be just surpassing 100 million that I get to work with, and getting close to 1000 units with that as well. So kind of exciting working with that.
That is super exciting. I I had no idea that that was the number. I'm glad I'm asked and talk about a humble brag. So moving on from that, you've helped place 10s of millions in capital and evaluate 1000s of units. But when you zoom out, what's the part of the journey that you're most proud of?
I mean just, I mean just making it happen. I love real estate, and those that know me from the coaching side, like, I love coaching, I love the fulfillment of it, like, you know, creating an impact. And so that the best part about all of it is being able to change communities and help change people's lives. So that's from the tenants that we get to go on to these communities, these apartment complexes, and improve their units, the environment, the tenant base, so that they can really enjoy that space and call it home. That's a huge impact that I love to see that change, and then our investors to see people learn about real estate, that they can invest in this and own a piece of apartment complex, and then start to receive distributions and returns, the impact that's going to have on their investment in their life. And then, you know, just the people I get to interact with, partners, potential partners, new, new people jumping into the space, kind of all of it. I love just being in a position to create that impact.
Yeah, that's awesome. Impact Investing is something that I've been really talking about with me and my partners, and it's just, it's a it's a great way to view this space, right? So, but thanks for sharing all of that. I know we kind of just started right out the gates and just kind of some heavy hitting questions. But you guys, you know, you hit it back with some heavy hitting answers. But as far as the podcast today, you know, I wanted to dive into what makes an elite underwriter and investor thrive, not just in today's market, but any market. And Zach, I've always known you as, like, the numbers guy. It's just since I've been working at MFM, and they refer to Zach like he's numbers guy underwriting. Talk to Zach, yeah, but he's a compass of what makes what makes a great investor succeed. So if we can, kind of like, bring it back a little bit. Zach, and can you kind of explain to us your role at MFN,
yeah, so my role, it's been changing forever, changing over the last four years, from being a coach to growing the. The coaching department and bringing in coaches to help teach and then develop the curriculum to then being put into a mentor role. My role is switched or worn a lot of hats as we've grown with an MFM, and it's been so fun to see that that growth again, it's the impact we get to create. And at this moment, I'm more in a mentor role as I'm diving in full time on the investment side. And so my, you know, I put a mentor role, so doing some webinars, doing some one on ones, with students and helping just them understand the process of acquisitions and underwriting,
nice and then what led you to MFM originally?
Yeah, so, you know, super grateful for Tyler and starting MFM. The timing of it really just aligned. And I believe things happen for a reason. I was working for another multifamily company at the time, but we were looking to relocate. And at the time that we were relocating, we're in Colorado, and relocating to Utah was the time that MFM was out to be able to join on and help coach and also help on the acquisition side. So it was getting involved from a coaching standpoint, and also acquisitions and and helping from from that. And so it's been, it's been a journey the past four years, growing with them, meeting different partners that have been able to join and work with and continue to grow
nice, love that. And just to kind of, I want to shed a peek behind the curtain just a little bit. And you're earlier, you had mentioned that, you know, you're kind of shifting your roles and what you're doing in life as a professional, and you said that you're, you know, shifting to become a full time on the investor side of things, right? But also, when you think of full time, I want to be transparent, I'm like, You're not just a full time underwriter, a multifamily investor, you're also a full time family man, right? So can you just kind of, just give us a little backstory and who you are to say just quickly to kind of to share us where your time is going.
Yeah. So I have my whole family. We got two two boys, one's four, and other one is nine months old, and that's, that's where a lot of my time is spent. We were very fortunate to build a home recently and be involved in that process. We're very hands on, getting involved in actually building the house and in all that sorts and and now, now my time is spent with my boys and, you know, creating our little our little oasis and yard work gardening. My wife's a huge gardener, and so we've been putting a lot work into our yard, and, you know, creating that little homestead for us. So we have a, I can look out to a little little slice of a little pasture out here that we have three, three cows on, and we got some chickens in the backyard, and it's just the start of it. So, a little bit everywhere. You know, grew up a city boy in the suburbs of Colorado and married a country girl in a small town in Utah. And that's, that's where I'm at now, is small town Utah and and trying to be, trying to be a little bit of a country boy. So not sure how well I'm fitting into the mold, but I enjoy it. So a lot of my time on that side. Yeah,
man, again, like, I didn't even know that that part of your life. So that's, that's really cool to hear. So that's a great use of all your time. So that's great. So kind of shifting back into what we're talking about. I wanted to know if you could take us back to one of your first deals and what almost went sideways, and what did it teach you about staying grounded?
Yeah, so my first deal was actually a triplex. It was my very first hill. I was actually in college in northern Utah, Utah State, and just getting into the real estate space. Was figuring out what I wanted to do as a career. I came across real estate, and I just dove in self educated myself, YouTube videos, podcasts, whatever I could get my hands on, even into a mentorship group, and was just trying to find a deal to do. I knew I didn't want to do single family fix and flips just wasn't the route I wanted to go. When I learned about multifamily, I just the scale made sense to me. It clicked. And so. Uh, my first still being that a triplex was was really interesting, because a lot it was, it was on the market. It was listed. However, it was a duplex with a old, vacant house attached to it, and the city wouldn't allow it to be a triplex. Many investors were trying to buy it and turn into a triplex. The city said, No, it's not zoned for that. It's owned for a duplex, and that's it. Where I brought in, you know, that roadblock came up, so I brought in a partner, which was my dad. At the time, being in college, he had experience working with cities. He's an architect, so he's done it. He's worked with cities zoning and all that. He came to the table, just talked to the city. There was this roadblock here, of, hey, we want to make improvement to this, to this town and this property, I know it's an eyesore. They wanted to tear it down. Said, hey, just allow us, Grandfather us in. Allow us to be a triplex. And you know, we can, you know, make this work. And so we did. We made that work and renovated it. I even lived in. We lived in the My wife and I lived in the house and helped finish renovations. That the hard part, what for me was managing the tenants and the duplex that I did not enjoy, and that was a struggle I had. Was trying to, you know, manage those tenants, those expectations. We inherited those tenants, and looking back, you know, we probably should have replaced and put new tenants in there to reset expectations. And what we wanted. And so I was a struggle. I was a struggle working with the tenants in that from that moment on, I said, Okay, I'm going bigger, and I'm bringing property management company, they're going to handle the tenants on a day to day. I'm going to handle the investment side of it and oversee that process. And that was, that was a struggle. Was, was dealing with those, those tenants for for a year, and then that, at that point, when I graduated college, decided to move out and sell it the time that was the market was, was pretty hot, and we're going to be able to get, we got 100% return on on our investment there. So it was definitely well worth it. But that was, that was the part that kind of went sideways, was interacting with tenants and and that was not my, my specialty there. So, yeah,
you're like people, no numbers. Those are fun. They don't change. Yeah, love people,
but yeah, when it came down to to laying the laying the law down, or, you know, resetting expectations with these people have lived there for years, was, was a difficulty on my own. So definitely not a property manager. That's, that's not what I am. But yeah, on the investment side, for sure, I can, I can, I can do things there,
yeah, no. I mean, that kind of like, that's, that's a great segues like this, where you started with three, how you ended that, you said, you know, that's the last time I'm doing a small number, we're going big. And that's what MFM is all about. Is thinking bigger, you know, the the higher the the number, the door count, the better. Or the more simple, you know, you get, the bigger the team, the better the team. Of course, there's much more that goes into it, but you know, you're not dealing with two tenants. You're you know, potentially hundreds of tenants you know. And it doesn't help, doesn't hurt all that much. Whenever someone decides to leave, you're like, Okay, that's fine. We leave, as opposed to in your position if someone left, and it's like, now we gotta scramble figure it out. So that's awesome. That's a great story. And how you've kind of taken that forward is is almost like you didn't stay grounded. You elevated yourself to a whole new platform. That's really cool. So I want to shift gears into talking about the mindset of a high level underwriter. I think underwriting, I think other people can probably feel me in saying that it can be daunting to think about. It's a pretty tough task. It's a lot of numbers, spreadsheets. You know, it's tough. You know, a mentor of mine, he always says, look at it like the gym. You know, I think for someone who doesn't go to the gym all the time as well, like they don't want to go to the gym, there's heavy weights, and there's people who might be judging them and etc. So I want to talk about the high the mindset of a high level underwriter. So with that, what's the difference of what's the mindset difference between someone who underwrites a deal and someone who understands it?
Yeah, that's a great question. I mean, just the you know going to answer first of just like the mindset of an underwriter, it can be tough. It can be tough to be an underwriter, and the amount of deals you got to look through, and the big key is, yeah, who under. Underwriting deal versus understanding it. A lot of that comes to, really what I tell a lot of people that I think don't take advantage of this, but like, utilize your resources. You know, anyone can underwrite a deal by because underwriting is is data entry. To an extent, it really is that entry, anyone can put numbers into a spreadsheet. You take numbers from a t 12, a rent roll, and you plug it into a spreadsheet, and it, you know, comes out with the returns and what it looks like, right? So anyone can do that part. The difficulty is really understanding it. And so that's understanding your market, understanding what rent can grow to what, what's the capex, capital improvements that you can put into the property? How much is that going to cost you? Yeah, how much can you can you raise rents? Can you be more efficient with your expenses? Or, I see a lot of people put in a lot. Hey, there. We're going to cut expenses when they don't really look at the line items and the T 12 and say, Okay, that's a contract, or that's an expense I can't ignore, and we're going to have to assume that for this property, or I have to take that on. So yeah, there's, there's a lot of things you gotta look into, but the way to understand those things is utilizing your resources. And what I mean by that is you talk to your brokers that have the deals that are listing the deals that are posting them on. Have conversation with them. Understand the market a little bit. What are things trading for? What are rents? Are they seeing rents at? Where are they seeing movement? What are they seeing from the sellers and what they're wanting to sell the properties for, and the whys there. And then the other piece is the property management companies. This is one that a lot of people, you know, new people, jump into the space don't utilize, is build a relationship with a good property management company. They are going to help you on the expenses, on the value add, on the renovations. They're going to help you with all that. You don't have to. I mean, one, it's good. You got to do the research, but it's more verifying. The property management company, they do this day to day, if they're a good one and they are in the multifamily value add kind of space they're managing these properties every single day. They know what their expenses are. They know where they're pushing rents to. They know the level of renovations that they're doing in the areas and those costs like they're so valuable, you don't have to understand all this information. You utilize your resources, and so I use the heck out of our property management company to help me verify those numbers. Now I get to a point where I understand where they're looking at in a market, how they're how they're underwriting things, their expenses, the capex, to a point where I don't have to bug them every single deal I'm looking at, because now I know. Now I'm educated. After I've done three or four deals with them, I know what that rules of thumb would be, for example, and I follow that suit, and then I and then I verify it with them when the deal is looking good, and most of the time now, my underwriting is lining up with the property management company, and so now we're in line on how to operate the property. But those initial deals like I utilize them, especially when I'm going into a new market. I utilize them. They help me understand how to underwrite a little bit better, so you don't have to know all the information.
Yeah, that's so great. That's such a great everything you said, there was so great. There's two things that I that really stuck out to me. And one of them was, you know, that I just didn't think about was contracts. You know, you look at a deal, and there might be contracts that are written prior to you owning but, you know, like you said, you still assume those, those contracts, or whatever it may be, and it's just, it's easy to think, look at the numbers like, Okay, we just take everything out and look at it this way. Things are going to be this way. But don't forget that you might have some extra bags there. And the other piece was collaboration with your property management group. You know, I think you hit the nail on the head, on finding a good one, but then it's maintaining a great, positive, collaborative effort between the two, because now your underwriting is the same. It's like, okay, we're right. We're moving together. So that's awesome. And one thing I'm very I'm very curious. I want to shift to you just slightly here. Still going to keep it on the underwriting thing, but leveraging, AI and underwriting. Do you do it? What do you think about it? Do you think it's going to replace any, anybody, anything? What's your thoughts?
Yeah, so underwriting with AI, it's still not quite there. Ao doesn't have the biggest grasp on on financials, and on the number side of. Things, and so it can't do the underwriting for you. Some people will try, but it's just not, it's not there yet where you can utilize AI is helping with parsing. Which parsing is where you take like your T 12 and your rent roll, and it will look at those documents and be able to sort them out, and then take those numbers and input it into your your underwriting template for you. So that's one way of kind of usually utilizing it. It's more data parsing, but AI is definitely helping speed that process up of inputting that data input into your template, and then the other piece that that AI is helping us is finding rent comps and usually utilizing that piece. So someone that I utilize is real estate labs with David, David tupin. He's the founder of of real estate labs. He's very successful in the multifamily space. I've met with him a lot, and super, super knowledgeable in underwriting. And what he's done is created the software, this product that can do that for you. It can parse that data for you, so it speeds up your underwriting process by taking your T 12 and rent roll, putting into the template, and then also his software can pull rent comps for you. So it's not only like relying on co star, but finding rent comps that have a lot of similarities. And so they have this, this feature that can do that, and it's very helpful in speeding that. That's the extent of what I use AI for on the underwriting side. From then on, it's it's up to you to to put your business plan together. Ai is not going to do that for you. That's things that really take that you know, that person has to have that knowledge in the market, of of understanding the comps, whether that's your in person, driving the property, touring the property, touring other properties, and seeing what you can do this property. Ai can't do that for you. That's something that, like, you know, human has to do still, and so AI won't replace you on underwriting, but it can help speed up that process for the data entry in helping analyze some of that information. Nice.
So what I'm hearing is, if you're an underwriter out there, you're trying to leverage. AI is, don't be Don't fret. It's not taking over, but it is. It is a weapon that you can learn how to yield, and you can become such a better underwriter and more efficient, more swift underwriter because of that cool. Last question on this high level underwriting mindset is, I kind of want you to answer this pretty, like, like, quick and just direct to the point, you know, because I think for new people, new people, new students, new people, in this space, it's best to hear things quick and to the point, right? So, where do you where do most students struggle early on when learning under underwriting? And what's that? Quick, simple, do this instead,
utilize your resources. Property Management brokers, co star like utilize those resources that will speed your process up.
Love it. That's awesome. Yeah, yeah. Well, I think of that as well as like you have your property managers, your brokers, everyone else you're telling me to leverage is because intimidate a wall in this to make money. And if we ever see a nice big deal and they want to take it down, everyone's going to win. So collaborate and leverage the other people and your AI learn how to yield it first, but then use all those, all these weapons and all these people who are going to stand behind you and with you in this process, and success will be found. Cool. So moving on. It's something we talked about the last time we spoke. And we talked about, like, the the evolution of your story. And I think where most people start, you know, jump into the space, and we're thinking, Okay, we got to raise capital for these million dollar sales, right? But I think in your evolution, you were telling me is like, Okay, now we need more deals, because we have the capital now we need the deals, which I thought was an interesting evolution. So I want to kind of talk about that, the evolution of investor challenges. So let's talk about the market evolution, what used to be the number one struggle, I think, for new investors. And what do you think it is now? And I want to take this from your perspective. So what is one of your first struggles? And what is that now?
Yeah, I mean, I think it ebbs and flows, the struggles. You know, sometimes the struggle is being able to raise the capital, and other times the struggle is to find the deal. I think. We're in an interesting spot in the market that we're kind of in between. Some people are finding it pretty easy to bring capital, so a lot of capital is coming. But the deals, the margin on the deals, have have shrunk, and expectations from the seller's end to the buyer's end are still aren't aligned. However, there are some deals that the this the owners, the sellers are are struggling. They're in a position where they're kind of struggling. They need to offload the property. Those are the deals that are aligning from a buyer standpoint. But the sellers come with a loss. They lose investor capital in that equity in that deal, but those, those are the deals that are starting online. So there's this struggle. Like I said, we're trying to find the next deal, because the capital is coming. But I think it all depends on how you approach that avenue as well. Some people struggle with raising capital. I think it's just, it's it's not just the market itself too. It's also like you, you run your own cycle, and ebb and flow in your own cycle. What, what you're doing on my wall, like I'm not I have raised capital before. That's not my strong suit, and my strong suit is on the acquisition side in asset management. I enjoy those pieces, and so I I spent a lot more time there, and I'm really grateful I have a team that's excels on the investor relations side in bringing bringing investors in the fold. So I don't know if that helps kind of answer that of what people are struggling with now, I think it just, it really just depends on where you're at in your journey and your positioning to what you're able to do. But in the market right now, yeah, deals are starting to pencil out a little bit better. They're still off some but some investors are being really, really aggressive, thinking the market's gonna really go up again. So some are being aggressive with their underwriting.
Yeah, I think that does answer my question pretty well. It's, it's dependent on your journey. It's not, this is the you know, it's not going to be 12345, it's going to be 153, 77, it's gonna go back and forth, right? So that definitely does answer that question. And so now that you're kind of working at a different level, right? Like we talked about you, you know, being grounded, we've elevated to a whole new level, even from MFM, right? So from what you're seeing, how are LPS evaluating deals differently now than they were two to three years
ago? Yeah, that's a great question, because two to three years ago, things were going south. A lot of deals were struggling. That's where interest rates jumped up. That's where insurance doubled or even tripled in some markets, that's where, you know, taxes jumped up as well. It was, it was a rough market, and a lot of deals struggled. A lot deals failed. So there was a lot of investors actually lost money two to three years ago. So you'll find that a lot of investors these LPs, they're being very, you know, strict on how they're analyzing deals. Part of that is the deal itself. The other part is the operators, and really the best way is to build able to do your due diligence on the operators. What's their track record, how they performed now, they're still really great operators that lost some deals two, three years ago. It's just, it's the risk you play with with real estate, is you have that risk, and it's understanding what that team is doing to mitigate those risks. And so LPs are starting to look at that and understand, and try to spend more time understanding the deals in operators. Then I think some kind of just blindly jumped in of, yeah, let me test out, you know, syndicating, investing in a syndication and what these operators now, they're being a little bit more hesitant with how things have happened the past couple years, and are looking at Yeah, things a little bit more in detail,
yeah. So something there you're saying about two three years ago is when you know the deals came through and you know some of them failed, are you seeing any opportunities through those failures? You know that some of these other operators failed, and now it's they're trying to trying to offload. So are you seeing any of that in the market? Yeah.
I mean, definitely one that we're closing right now here in July, I'll be closing that one. I know the sellers are selling for actually, both deals that we're closing right now came because the operators bought it at the wrong time for the wrong price. They overpaid for it, and they haven't been operating it well. So one, it's from an operation standpoint, they haven't operated well. But two, it's they bought it at the wrong time for the wrong price. They bought at the top of the market, and now they're paying for as the market's corrected and prices pricing cash dropped, and these two deals were buying basically close to what they bought it for five years ago. And