The Importance of Scale to be Successful in Apartment Real Estate Investing

One of my guiding principles is any kind of real estate, even when it was single family, if you're getting into a new asset class, I don't like to pull the trigger on it until I've analyzed at least a hundred deals. Look at all these different financials from different opportunities; look through them. Once you start doing that, you start getting a sense of what ... You can pick out the ones that stand out; the diamonds in the rough, so to speak, become a little more apparent.

The one trend I was seeing is the people who were struggling with deferred maintenance or struggling with the NOI, or net operating income were the ones that were the smaller property types, especially if they were older vintages. We said, okay, how do some of these other players do this? When we started to go into 100-plus units, it was apparent that they had teams dedicated for leasing so that they could keep the properties rented. They had teams focused on maintenance of the property; upkeep was kept up. It just seemed like the right thing to do. Our first property, actually, the first two properties was a 124-unit property, and then a 101-unit property. Then, we've been buying more larger since then. We've been buying 300-, 400-unit properties.