On the Real Estate Underground podcast with host Ed Mathews, EM Capital’s founder, Chris Lento, shared actionable insights on scaling multifamily in the Southeast covering market selection, realistic underwriting, operations, and today’s capital stacks.
Key Highlights:
- Why we pivoted from Boston small multis to 100+ unit assets across Charlotte, Raleigh, Columbia, and Atlanta:
- Scale drives efficiency through professional management, vendor leverage, and KPI-driven execution.
- Bigger, better markets with population and job growth and enough deal volume to sustain disciplined acquisition.
- Focused footprint with enough metros for pipeline and few enough to know submarkets and teams deeply.
- How we underwrite “realistically” (not just “conservatively”) and stay $200 under true Class A while delivering an A– experience:
- Base case reflects what we actually expect with a factor of safety rather than wishful thinking.
- Favor functional layouts (2BR/2BA) for durable demand and NOI over time.
- A– positioning with renovated finishes and amenities without chasing top-of-market rents.
- Navigating insurance and legal nuances market-by-market—especially Atlanta’s liability dynamics:
- Underwrite true premiums up front without using “average” plug numbers across states.
- Specialized brokers with local liability expertise drive better outcomes.
- Prioritize inland Southeast markets to avoid coastal wind and hurricane risk
- The capital stack today: lower LTVs, more pref equity, and less reliance on bridge debt:
- Senior debt typically 60–65% LTV with fixed-rate where possible.
- Selective preferred equity to approximately 80–85% effective leverage with institutional or family office partners.
- Minimal bridge exposure in this rate environment using creativity without overleverage.
- Culture-first operations: weekly bad-debt sprints with aligned third-party managers:
- Weekly KPI cadence tracking AR 30/60/90 line-by-line with clear action owners and timelines.
- Incentives aligned to collections, occupancy quality, and resident experience.
- Boots on the ground plus smart tech with verification using smart locks and thermostats for execution.
Chris Lento’s insights highlight realistic, factor-of-safety underwriting, scale-driven operations with tech-enabled property management, and a capital strategy that favors lower leverage and trusted partnerships to build durable value.
For more insights, visit our website.
Connect with Chris Lento: LinkedIn.
Listen to the Full Episode: Available on YouTube.
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