Stewart Heath, CPA went into 2008 over-levered and under-reserved. He handed buildings back to the banks. He says that for want of roughly $300,000 in reserves he would still own them, and every rule he operates by now was built backward from that number. His book is called "Don't Do What I Did."

Stewart runs Harvard Grace Capital out of Spring Hill, Tennessee, buying stabilized commercial assets along the I-65 corridor from Nashville to Birmingham. Medical office, suburban office, storage, retail and warehouse. Eleven assets by the company's count and more than 300,000 square feet. Their tagline is boring is beautiful. It is printed on the banners.

"There's not a whole lot boring about 13% cash on cash returns."

What Ed and Stewart get into:

• The 12 months of mortgage reserves he sets aside on every deal, sized as if the property income goes to zero, and what holding that money costs him in returns
• Why medical office is his favorite asset class: hundreds of thousands of dollars of tenant build-out, 10 year leases, triple net with 3% bumps and tenants who treat rent as a line item instead of a negotiation
• Suburban office and service retail, the class B buildings where a business meets its customers rather than collects its employees
• Why he underwrites a geography and not an asset class
• Why he refused to run a fund for years, and what two independent RIA relationships changed
• Retail moving from 25% food and restaurants to almost 60%, with price per square foot almost doubling in three years
• Why he stopped doing single-tenant deals after watching a tenant walk out on 10 years of lease
• The contrarian office call: nobody can finance new office, the population is not shrinking and one of his buildings sits in a town under a two year sewer moratorium

Also in this episode, a new segment called Questions from the Underground. An investor owns 19 units two states away. His manager reports 95% occupancy every month and his distributions have shrunk four quarters in a row. Ed walks through the per unit profit and loss that tells him whether he has a building problem, a manager problem or one bad quarter.

Books mentioned:

• "Don't Do What I Did" by Stewart Heath. Free at harvardgrace.com for an email address.
• Who Not How by Dan Sullivan with Dr. Benjamin Hardy. Stewart is on his third read.
• The E-Myth Revisited by Michael E. Gerber
• Buy Back Your Time by Dan Martell
• Rich Dad Poor Dad by Robert Kiyosaki, the book his mentor handed him

Connect with Stewart Heath at harvardgrace.com, or on LinkedIn. The free book and his calendar are both on the site, and he will talk real estate with anyone.

Got a question you want answered on the show? Send it to ed@clarkst.com.

Recorded June 2026.

Real Estate Underground with Ed Mathews. Find us wherever you get your podcasts, at clarkst.com/podcast or elevista.com/podcast

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Social Media:

• LinkedIn -> Ed Mathews (President at Clark St and Elevista)

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