Did you know that Huntsville, Alabama, is emerging as a hot spot for real estate investors? In today's episode, Chad Sutton meets Percy Nikora, the Managing Partner of Penn Capital Group. Percy keenly understands what it takes to perform due diligence while effectively raising capital for new projects, with a wide network in the investor community. He will reveal nuggets to successful multifamily real estate investing, the advantages of vertical integration, and a winning investment thesis focusing on growth markets. Learn about his strategy, fast cash...
Did you know that Huntsville, Alabama, is emerging as a hot spot for real estate investors?
In today's episode, Chad Sutton meets Percy Nikora, the Managing Partner of Penn Capital Group. Percy keenly understands what it takes to perform due diligence while effectively raising capital for new projects, with a wide network in the investor community. He will reveal nuggets to successful multifamily real estate investing, the advantages of vertical integration, and a winning investment thesis focusing on growth markets. Learn about his strategy, fast cash flow-based financing, and the importance of a diversified team.
Tune in now and contact Percy at Penn Capital Group for a free investing guide!
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[00:00 - 08:43] Percy's Journey to Founding Penn Capital, a Vertically Integrated Multifamily Operator
- Percy's journey includes technology, financial services, and real estate, culminating in Penn Capital's success as a multifamily property operator
- He founded Penn Capital as a vertically integrated owner-operator of multifamily properties in the Sunbelt region
- The decision to become vertically integrated was driven by the goal of maximizing returns and closely monitoring net operating income
- Penn Capital focuses on three or four markets, with a strong emphasis on one currently, while considering expansion into other markets
[08:44 - 15:29] Strategic Investments in Growing Markets
- Penn Capital's investment thesis focuses on staying ahead of the institutional competition by strategically deploying capital
- They shifted their attention from hot markets to areas with good jobs and population growth, and less compressed cap rates
- Huntsville, Alabama, emerged as one of their main markets due to its growth potential and affordability
- The company utilizes a mix of proprietary and public data sources, including CoStar and the US Census Bureau, to analyze market trends
- Consideration of rent-to-income ratios is crucial when assessing market viability and sustainability
[15:30 - 24:20] Investment Focus and Opportunities
- Percy said they focus on acquiring B and A-class properties built in 2000 or later, with a preference for properties built in 2014 and newer
- They focus on built-to-rent communities, considering them a sub-asset class within multifamily properties, while also seeking properties with assumable debt and low-interest agency loans to optimize investor returns
- Upgrades and amenities like discounted Google Fiber and virtual concierge services enhance property value
- They offer investment opportunities through their fund, enabling diversification and direct deals
[24:21 - 34:05] Insights on Fund Structure, Investing, and Philanthropy
- Percy shares insights on fund structure and addresses the concept of rebalancing within the fund
- The fund follows a closed-ended structure with a preferred return and a profit split to incentivize investors
- Philanthropy is an integral part of Penn Capital's values, with plans to establish its own foundation and support multiple nonprofit organizations
- A free guide on commercial real estate and multifamily investing is available to help newcomers understand different asset classes and industry terms
Quote:
"I would say building excellent teams is absolutely a superpower and essential to running a business." - Percy Nikora
Connect with Percy through
LinkedIn or visit https://penncapitalgroup.com/meet-our-team/
You can get a free guide to investing in commercial real estate at https://penncapitalgroup.com/investment-guide/ or email percy@penncapitalgroup.com and mention this podcast.
LEAVE A 5-STAR REVIEW + help someone who wants to explode their business growth by sharing this episode. Find out how team Quattro can help you by visiting www.TheQuattroWay.com.
Real Estate Runway Podcast is all about alternative business and investment strategies to help you amplify life, and maximize wealth! Click here to find out more about the host, Chad Sutton.
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