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Transcript:
Chris Bounds 14:19
Love it. So, in multifamily, how did you get your first deal? What did that look like?
Chris Salerno 14:28
Excuse me, first deal? The best thing I can say is that, utilizing my ability as a broker, or previous broker at that time, really connected with the commercial brokers. I was fortunate to really get close with the commercial brokers in the Carolinas, and I started networking with them, building relationships. It’s all about relationships in this business, building relationships with the commercial brokers. Once I started building those relationships, I was able to then secure the first deal, and from there, it kind of snowballed. So…
Chris Bounds 15:04
it’s very important because relationship is very key in real estate, especially, actually, on both sides of the aisle, on production and investing. From a multifamily standpoint, it’s very much a team sport. So, was this a deal that you went in and you were the lead? Or did you partner with another operator to take it down? How many units was it? What did that look like? Yeah, so…
Chris Salerno 15:31
The first ever deal was actually here in Charlotte, North Carolina, here in our backyard. And that was a partnership. We were lead on it. That was a partnership. It was a 44-unit property. We bought it for $44.4 million, and it was definitely very difficult for the first deal to raise capital. From there, once we acquired that, we then partnered, learned, and really grew, progressed, and perfected the art of raising capital. And then from there, we raised capital for a couple of groups. And then we started solely focusing on our own deals. That’s all we focus on right now, acquiring our own assets or JV opportunities.
Chris Bounds 16:12
Yeah, and I think that’s really important. I made the mistake on my first multifamily, a 29-unit property. And I’ve told this story before that I was going in lone gunman. Now, I bought it at such a ridiculous price that I knew I could afford to make mistakes and still make money. Fortunately, I made a lot of mistakes until I made money. But had I not partnered, yeah, it would have been a lot more challenging. I mean, we bought the same property, and this sounds insane today, for like $17,000 a door. It was in pretty rough shape. But yeah, by partnering, not only are you leveraging their success, their Rolodex, their experience, their balance sheet, it helps fast track your education. Maybe you make a little less, but quite honestly, you probably actually make more because half of a lot is much better than zero of not 100% of nothing. But really, they’re going to be able to help fast track your success, not only on that deal but on subsequent deals, right?
Chris Salerno 17:13
Yes, very much. So, very, very much. So, it’s a team sport. We all have to work together to acquire these types of assets. It’s very difficult to just do it on your own, unless you’re a billionaire. If you have the capital, you can just do it on your own.
Chris Bounds 17:28
So how many deals? How many units? Have you closed? Over the years?
Chris Salerno 17:33
We have closed over the years over 1500.
Chris Bounds 17:37
Okay, so, yeah. Okay, so quite a bit of units in one on your, are you still partnering and collaborating with other other operators?
Chris Salerno 17:48
We are we’re only doing JV opportunities or doing our own deals. And that’s with partnering as well, co sponsors and things like that.
Chris Bounds 17:54
Yeah, because that’s another thing that I noticed. Um, so with single family, it’s, it’s very easy just to be a lone gunman. Most single family investors are like, there’s not a lot of need to partner, except for maybe your first deal or whatever. But in multifamily, especially large multifamily, it’s a completely different game, you typically see one to three operating partners, which with their own teams, all performing various different aspects, whether it’s the asset management, property, property management, construction management, acquisitions, finance, KP, there’s, there’s just a lot of very crucial jobs that you screw up one of those, and it can really, really mess up a deal for everyone.
Chris Salerno 18:45
Oh, it can? Most definitely, it can mess up everything.