The Multifamily Strategy That Wins in 2026 (Case Study Breakdown)

Small Multifamily Asset Management Strategies Explained

Small multifamily asset management strategies play a critical role in creating stable cash flow and long term value, especially for investors operating two to fifty unit properties. In this episode of Multifamily Rockstars, Cody Journell explains how hands on management, operational discipline, and local market expertise allow owners to outperform passive ownership models. Rather than relying on appreciation alone, effective asset management focuses on daily execution that compounds over time.

Cody emphasizes that small multifamily properties require a different mindset than large institutional assets. Owners must understand tenant behavior, unit level expenses, and maintenance patterns while maintaining strong communication with on site teams. When done correctly, small multifamily asset management strategies can deliver predictable income while protecting downside risk.

Operational Levers That Drive Performance

A major theme of the conversation centers on identifying operational inefficiencies that suppress net operating income. Cody outlines how disciplined expense control, proactive maintenance, and professional property management systems can dramatically improve performance without aggressive rent hikes. Many underperforming properties suffer from mismanaged utilities, poor vendor oversight, or inconsistent rent collection policies.

Key operational focus areas include:

• Implementing standardized maintenance processes to reduce long term capital expenses

• Improving tenant screening and lease enforcement to stabilize occupancy

• Tracking financial metrics monthly to identify issues early

These small adjustments, when executed consistently, form the backbone of successful small multifamily asset management strategies.

Creating Value Without Overleveraging Risk

Cody also discusses the importance of conservative underwriting and realistic business plans. He stresses that value creation should come from execution rather than speculation. Investors who rely on aggressive rent growth or short term market shifts expose themselves to unnecessary risk, especially in smaller properties where margins are tighter.

By focusing on operational improvements, market appropriate rent adjustments, and long term ownership horizons, investors can build durable portfolios that perform across market cycles. Small multifamily assets reward discipline and patience more than speed.

About Cody Journell

Cody Journell is a vertically integrated real estate operator based in Southwest Virginia and the founder of Haven Management Group. His firm specializes in property management, brokerage, construction, and asset management with a focus on stabilizing underperforming small to mid sized multifamily properties. As a former Division I athlete and Sports Illustrated All American, Cody brings a performance driven approach to operations and execution.

If you want to hear the full conversation and detailed insights, watch the podcast video or read the complete transcript below.

Small Multifamily Asset Management Strategies FAQ

What are small multifamily asset management strategies?
Small multifamily asset management strategies are the systems and processes used to operate, optimize, and grow apartment properties with typically two to fifty units. These strategies focus on day to day execution, expense control, tenant management, and long term value creation rather than relying solely on market appreciation.

Why are small multifamily asset management strategies important for investors?
Strong asset management strategies help investors protect cash flow and reduce operational risk. Smaller properties have tighter margins, so disciplined oversight of expenses, maintenance, and leasing directly impacts performance. Consistent execution allows investors to stabilize returns across market cycles.

How do small multifamily asset management strategies differ from large multifamily management?
Small multifamily asset management strategies are more hands on and localized than institutional multifamily operations. Owners must pay closer attention to unit level expenses, vendor relationships, and tenant behavior. Unlike large assets, operational mistakes in small properties can quickly erode returns.

What operational areas matter most in small multifamily asset management strategies?
Key areas include expense management, maintenance systems, rent collection, and tenant screening. Investors also focus heavily on utility usage, staffing efficiency, and vendor oversight. Small improvements across these areas often produce meaningful increases in net operating income.

How do investors improve cash flow using small multifamily asset management strategies?
Cash flow is improved by tightening expense controls, professionalizing management practices, and making gradual rent adjustments aligned with the local market. Investors also enhance income through better lease enforcement and reduced vacancy. Stable operations often outperform aggressive renovation based strategies.

What mistakes should investors avoid with small multifamily asset management strategies?
Common mistakes include underestimating operating expenses, neglecting property management oversight, and relying on optimistic rent growth assumptions. Failing to track performance metrics regularly can also lead to missed warning signs. Conservative planning and consistent review reduce these risks.

Can small multifamily asset management strategies work for passive investors?
Yes, passive investors can benefit by partnering with experienced operators who specialize in small multifamily assets. Clear reporting, defined business plans, and aligned incentives are essential. Passive investors should still understand the asset management approach to evaluate risk properly.

How long does it take to see results from small multifamily asset management strategies?
Many operational improvements show results within six to twelve months. Expense reductions and management efficiencies often stabilize cash flow quickly, while rent optimization and long term value creation take more time. Patience and consistency are key to sustained performance.

Are small multifamily asset management strategies effective during market downturns?
These strategies tend to perform well during downturns because they emphasize affordability, stable occupancy, and disciplined operations. Smaller multifamily properties often serve essential housing needs. Strong asset management helps maintain income even when market conditions soften.

Disclaimer: This summary was written with the help of AI and reviewed by Rod’s Team.

00:00:28:23 – 00:00:49:23
Rod Khleif
Welcome back to multifamily Rock star. So as you guys know, this is where we interview people that are flat out killing it in this business. And, we talk about their deals, we deep dive into their deals more so than in my other episodes. And, you know, we show you how you can get started in this business, give you, give you some actionable and practical tips on how to actually get started.

00:00:50:00 – 00:00:57:12
Rod Khleif
And so today I’m interviewing Cody. Janelle, Mark and I are sorry. Marcus here. My co-host. Hey, buddy. Yeah.

00:00:57:12 – 00:01:04:21
Mark Nagy
What’s going on now? I’m excited for this one because, we’re going to talk about some smaller deals, which is the stuff that I like as well. So I’m I’m excited for this one.

00:01:04:23 – 00:01:23:01
Rod Khleif
Yeah. So we got Cody, Janelle. And, he’s with Haven Management Group, former D1 athlete in football. We were chatting about that briefly. He was an All-American at Virginia Tech. And, now he’s in real estate. So go figure. Well, what were you thinking? Why don’t you stay in football, Cody?

00:01:23:03 – 00:01:24:04
Cody Journell
I tried, man.

00:01:24:06 – 00:01:31:05
Rod Khleif
To tackle. Yeah. I’m just. I’m just messing with you. So. So, Well, welcome to the show, brother.

00:01:31:07 – 00:01:38:03
Cody Journell
I appreciate it. I’ve, it’s definitely a milestone for me in the business because we’ve been watching you guys for a long time, so.

00:01:38:05 – 00:01:46:07
Rod Khleif
That’s nice of you to say that, but. Well, why don’t you give us a little more background on who you are, and and, you know, where you came from and what you’re up to.

00:01:46:09 – 00:02:06:00
Cody Journell
Yeah. I’ll try to give you a Cliff notes version. Kind of grew up here in rural Virginia and, you know, very small town kid. You mentioned I played, you know, Division one football at Virginia Tech, had some highs and lows there, was a place kicker, but, you know, really got me in the. You can pretty much do anything you set your mind to, mindset.

00:02:06:00 – 00:02:23:04
Cody Journell
You know, coming from the a very small single high school, I was like the, I think the first, full ride scholarship football player to come out of our high school. So, you know, that kind of like, opened my eyes to, hey, you got a goal, and and you want to work towards it. You know, anything’s possible.

00:02:23:04 – 00:02:55:11
Cody Journell
And achievable. So. So that was, you know, kind of the start of it went through that whole progression, you know, try to get an NFL played in Germany. Semi-pro league for a few years and then move back and, you know, really wanted to kind of spread my entrepreneurial wings in the real estate space, wanted to get into investing right off the bat, but quickly realized, luckily, took like a humble moment for myself and said, hey, one, you probably don’t know quite as much as you think you know about real estate investing.

00:02:55:11 – 00:03:29:22
Cody Journell
You’ve read, you know, two books at this point. And, second thing is you really don’t have a lot of disposable capital to just jump into this thing. So, that figured I would. Hey, what can I do to learn on the job? So I got my real estate license back in 2016, 2017, and, it’s a good time to kind of get my feet wet before the crazy Covid years and, just started picking up investments, you know, through that, I actually started, you know, making a decent income and, would get kind of first hand stab at I had a lot of off market stuff because they were coming to me in the

00:03:29:22 – 00:03:47:14
Cody Journell
form of listings or, or people that knew that, you know, we were in the real estate game and then kind of followed in some of your footsteps and picked up some a lot of single family units and realized what our capacity was there and that we felt like we were, you know, leaving some money on the table and in that sector.

00:03:47:14 – 00:04:14:14
Cody Journell
So started to, get into bigger deals. You know, they were still smaller multifamily, kind of 10 to 60 or 10 to 100 units. And, and really kind of kind of hit the ground running with those in that sector. And that’s that’s led us to now having our, you know, our, our management group, which is a brokerage that does sales management and construction for small to midsize, multifamily.

00:04:14:14 – 00:04:24:02
Cody Journell
And a lot of those are our turnaround projects. So a lot of value add in there. You know, doing the BR method on, on small to medium size multifamily type deals.

00:04:24:02 – 00:04:26:02
Rod Khleif
So nice.

00:04:26:04 – 00:04:40:14
Mark Nagy
And then talk about that the size of deals real quick because like I said, I personally like the small to medium stuff because I think it has more flexible debt and you can just turn them around a lot quicker and move on to the next deal rather than the massive deals. But why? Why do you like these smaller deals?

00:04:40:14 – 00:04:45:03
Mark Nagy
Let’s, you know, let’s call it 5 to 50 units. What what benefits do you think they bring? Yeah, I.

00:04:45:03 – 00:05:06:04
Cody Journell
Mean, I think, you know, one of the reasons right off the bat was we just didn’t want to get into the syndication model. You know, we had kind of limited, limited resources when it came to capital, like to a certain degree, you know, so we weren’t looking at taking down ten, $15 million. You know, complexes. We were like, hey, what’s in our backyard?

00:05:06:06 – 00:05:31:08
Cody Journell
What can we touch be boots on the ground? You know, it’s super accessible. We know the market. And it just made us comfortable getting from that single family stage into the multifamily stage. So I think our first our first deal was a six unit deal. Right near Radford University campus. And it was a it was a full gut job turnaround, you know, take it down to the studs completely come back and, and then had the management company release it.

00:05:31:08 – 00:05:55:13
Cody Journell
But yeah, there’s just in our area, there’s more of that available. And a lot of times those properties have been either inherited or run by, small like mom and pop operation. So, you know, those, those instances, a lot of times there’s a lot of value that can be added, whether it’s renovations or management or just efficiencies or, you know, whatever that lends.

00:05:55:13 – 00:06:15:13
Cody Journell
So there’s there’s this bucket over the sandbox, if you will, that properties are a little bit too big for the small mom and pop investors to want a full with, or they don’t have the team, but then the larger syndicators, institutional private equity companies, they’re too small for them to want to deal with. So we kind of play in that middle ground.

00:06:15:15 – 00:06:26:13
Rod Khleif
No, that’s a great that’s a great niche. And I’ll tell you. So let me ask you this. Are you a GC or how are you accomplishing the construction work? Because if you take something down to the studs, that’s some serious work.

00:06:26:15 – 00:06:43:11
Cody Journell
It does. And my dad was a contractor growing up, so I had a little bit background there. Dad was a CPA or I’m sorry, dad was a contractor. Mom was a CPA. So I kind of got to see both sides of, you know, I did a lot of drywall growing up, and I don’t want to touch it ever again just because of that.

00:06:43:11 – 00:07:00:10
Cody Journell
But, I was his drywall guy, and, so I got to see how projects were managed and things along those lines. So when we started this out, you know, we have the, the vertical service based business now, but, originally we were just doing our own deals. So, you know, I was kind of the the spot.

00:07:00:11 – 00:07:05:03
Rod Khleif
You learned on single family. Basically, you turn some single family, some small stuff, and you got to.

00:07:05:05 – 00:07:27:01
Cody Journell
Exactly. Yeah. So we started the single family and then, you know, this first six unit and the one we did after that, you know, I was still kind of the lead, I worked with a class a contractor on these and, partnered with him, but we’re still kind of doing the project management side of things. Now that we’ve gotten bigger and we’re actually doing these turnarounds for clients.

00:07:27:03 – 00:07:41:20
Cody Journell
You know, we have a GC that we work with on staff, and then we’ve got our you know, our maintenance and subcontractors and things along those lines. So it’s good to have that kind of like hands on knowledge so that now I can I can oversee the guy that’s doing that.

00:07:41:22 – 00:07:49:16
Rod Khleif
So so did you just bring a GC on basically to qualify the construction company and or is he actually working at full time?

00:07:49:18 – 00:08:11:06
Cody Journell
Yeah, he’s so he does some of his own projects still, but okay. Predominantly he’s working with us. Okay. And you know, it really came down to like, a capacity thing. So obviously you know, we need the license for certain for certain aspects of the, the deals that and turnarounds that we’re doing. So that was a big thing, but also just my capacity in general was like, hey, I want to grow this business.

00:08:11:06 – 00:08:17:23
Cody Journell
I want to help out as many multifamily owners as we possibly can, and I’m the constraint or the bottleneck right now.

00:08:17:23 – 00:08:21:04
Rod Khleif
And that was always the bottleneck. Yep. Okay.

00:08:21:06 – 00:08:27:15
Cody Journell
So I’m constantly looking at what I’m doing and how I’m holding us back and trying to trying to leverage that.

00:08:27:19 – 00:08:37:00
Rod Khleif
That’s very that’s very smart that you that you picked up on that because that’s that’s always the case. You know, I mean, in my case as well, I’m always the frickin bottleneck. So that’s good.

00:08:37:02 – 00:09:01:09
Mark Nagy
So what are some of those things where you saw those things that you’re looking for on these properties? Obviously renovations. That’s the obvious one. But I know your superpower here is in management. Right. And you talked about like, mismanagement and looking for that. What are some of those inefficiencies that you see people doing that you’re coming in and fixing to turn these properties around just so our listeners can kind of know maybe what to look for when they’re looking at deals.

00:09:01:11 – 00:09:33:05
Cody Journell
Sure. Yeah. Yeah. One thing that we’ve done a little bit differently than I think most like, you know, property managers do in our area is, we kind of have that asset management layer over top of the property management. So, when, when somebody brings us a deal or they’ve got a property that they’re having problems with, I actually will sit down and we’ll do like a full two week audit on that property and we’ll get all the financials, you know, where what’s the the rents compared to market rents look like, how are your expenses being billed?

00:09:33:07 – 00:10:02:05
Cody Journell
What are you paying for versus what the tenants are paying for? You know, and then just efficiencies when it comes to doing turns, how long does it take you to turn a unit? How long is it taking you to lease out a unit? And especially with the, you know, local run, self-managed mom and pop multifamily investors, like, they don’t realize a lot of times how much money they’re actually leaving on the table and how much value is attached to that, that in a way that’s being left or that’s leaking.

00:10:02:07 – 00:10:23:17
Cody Journell
So, you know, obviously a lot of things that we look for, when it’s something that we’re purchasing, we’re like, hey, are all the meters installed on the side of the building like there are there five missing meters on this building that tells us there’s probably five units that are, you know, sitting vacant in there. You can do your drive by, you know, grass as high cars on, chop blocks in the, in the parking lot type of thing.

00:10:23:17 – 00:10:50:17
Cody Journell
But when we really dig into the audit that we run, prior to kind of providing our services, a lot of the times it comes down to, you know, are you being kind of overbuild by contractors on certain things like if, if you don’t have those internal, vendors and contractors that you work with all the time, like you’re paying market rates for every single maintenance item that you have to, to, to have done.

00:10:50:19 – 00:11:11:10
Cody Journell
And then a lot of times, you know, they’re, they’re paying utilities that the tenant should be responsible for. So that’s obviously really killing your in a way at the end of the day. And then again, you know, it comes to like the turns and your vacancy process. You know, is it taking you nine weeks to do a simple paint job and, you know, patch some holes and do some new fixtures and then get at least out?

00:11:11:12 – 00:11:22:20
Cody Journell
Or are you able to get that done in two weeks and then have it on the market and ready for lease between the next 2 to 3 weeks after that? And that, you know, that translates a lot to, in a way, at the end of the year. So, by the.

00:11:22:20 – 00:11:39:11
Rod Khleif
Way, a way, guys, is net operating income. It’s the net income on a property outside of the debt. But well, that’s all really good stuff. I mean, you know, the faster you can do a turn, the better. And yeah, there’s something called vendor creep with, contractors and vendors where they where the price just seems to go up every few months.

00:11:39:11 – 00:11:57:19
Rod Khleif
And so, so, so you basically, you know, when you’re, when you’re helping another owner out, you do this audit and you really look into all these things, which is which is great because most mom and pops just aren’t that sophisticated. I mean, this is the stuff I teach in my bootcamps, as you know, but, you know, somebody that buys a five unit, ten unit, 20 unit, and that’s all they do.

00:11:57:21 – 00:12:18:15
Rod Khleif
They just don’t have that skill set. And so, yeah, and they don’t realize that every increase to the net income is an exponential increase to the value. I mean, it’s like 17 to $20 in value increase for every dollar of NOI increase. So yeah, that’s really valuable. So, so so you do this operational audit, and you’ve done this for a while.

00:12:18:15 – 00:12:21:01
Rod Khleif
Why did you, during the warrior program, brother?

00:12:21:03 – 00:12:36:24
Cody Journell
Yeah. So, you know, originally when we joined the warrior program, set down, my wife and I was like, hey, we’re, you know, we’re doing a good, good amount of deals. We get, you know, we’re having a pretty decent amount brought to us now because, you know, I’ve been a broker for a while and, you know, we’re a management company that wants to fix them.

00:12:36:24 – 00:12:53:07
Cody Journell
And, you know, originally it was it was really based on capital. I, I’d listen to your podcast a ton. I could see the other warriors that were involved. And I was like, man, I can learn from these guys. They’re, you know, I aspire to be where where a lot of these investors are at this point.

00:12:53:09 – 00:13:13:21
Cody Journell
And then I got in the group, I came to some of your boot camps. I think the most recent one was down and down in Florida and got to, you know, really kind of meet, and greet and talk to other, like, like minded investors and, and a lot of the things we were doing, I realized that could be a benefit to, to people that were in the group as well.

00:13:13:23 – 00:13:22:09
Cody Journell
And I saw, you know, as you know, almost every conversation that comes up about property managers is not a, not a good one.

00:13:22:11 – 00:13:24:24
Rod Khleif
So, no, it’s not very honestly.

00:13:24:24 – 00:13:31:23
Cody Journell
You look at it and there’s definitely a gap between, you know, the property management layer and the asset management layer.

00:13:32:00 – 00:13:51:12
Rod Khleif
There’s also by the way, there’s a huge difference between managing the size of assets that you manage and the size of assets that I purchase. And, you know, and a lot of the management companies that manage smaller stuff are, you know, it’s like you it’s a brokerage that does management as well. And now I can tell you do a fantastic job.

00:13:51:14 – 00:14:09:03
Rod Khleif
And very many people don’t, and in the smaller stuff as well. And so, you know, by the way, guys, if you’re listening and you do have an asset, I’ve got a book about how to hire a third party property management company at my link tree at Rob’s links.com. It’s one of my free books. It’s a really valuable, really valuable book.

00:14:09:03 – 00:14:16:12
Rod Khleif
I think it’s the best on the topic and it’s free. So the price is right. Well, let’s, let’s let’s shift gears. I know you had a question. Go ahead. Yeah, I’m.

00:14:16:12 – 00:14:33:19
Mark Nagy
I’m curious on that because I’ve, I’ve done both to where, you know, from 30 to 40 units. We’ve had third party property managers that are kind of in the town and they’re off site obviously, because it’s too small. And then we’ve also done self-management just because the town was too small. They didn’t have any really good property managers.

00:14:33:23 – 00:14:46:20
Mark Nagy
What what are you typically doing when you say management? Are you managing a third party offsite manager, or are you actually doing the onsite stuff and you hire a person? Or are you the person? Or give us kind of the nitty gritty on that exactly how it works. Yeah.

00:14:46:20 – 00:15:08:07
Cody Journell
So, you know, we’re still we’re still a couple of years into this business. As far as structuring it this way, you know, we’ve been doing management for ten, 12 years now. But, basically, and that’s a reason why we have stuck with investing in our backyard for the most part so far. So we kind of have like these two, two separate flywheels in the business.

00:15:08:07 – 00:15:25:07
Cody Journell
One is like our core services and that’s, you know, an investor comes to us, we can do the brokerage sales portion of it, we can do the property management, and we can do all the maintenance on boots on the ground stuff that you you would typically have a third party manager do. And then there’s the asset management or like our turnaround team.

00:15:25:09 – 00:15:50:10
Cody Journell
And that’s where the asset manager and the GC kind of sit. So you know they’re they’re managing the construction project. They’re doing you know figuring out what the the game plan is for the property making sure that the core service team is actually hitting the milestones that we have projected and talked about. But we do have some clients where, you know, they have they have outsourced to us just to do the asset management piece.

00:15:50:10 – 00:16:13:17
Cody Journell
So maybe they’re two hours away and our core service team can’t handle, like realistically getting maintenance guys back and forth and doing things along those lines. So I’ll kind of partner with them on the asset management side, our GC will oversee any projects that they do and things along those lines. So kind of had to like, to your point, had to make a distinction between those two pieces.

00:16:13:17 – 00:16:17:13
Cody Journell
But they all function together if you really want. And to maximize.

00:16:17:14 – 00:16:34:24
Rod Khleif
A very interesting way you’ve laid that out, it’s very unusual. Candidly, you know, most property management companies, they really don’t have an asset management component. Now, they may have a construction arm, but but the whole asset management, they really doesn’t come into play. You know, typically the owner sits in that seat. So that’s a real valuable service you’re providing.

00:16:35:01 – 00:16:45:22
Rod Khleif
You know, and I’ll tell you, you know, the, the, the, the oversight is, is really pretty pretty unusual and pretty amazing. Candidly, I really like hearing that.

00:16:45:24 – 00:16:50:07
Cody Journell
Well, you know, it all came from me being an investor to start.

00:16:50:10 – 00:16:51:14
Rod Khleif
Oh, sure. Oh, sure.

00:16:51:15 – 00:17:07:15
Cody Journell
That’s how you know, I think that’s where the the divide is a lot of times between like, what you want as an owner to accomplish with your asset versus the property manager who may not even own any rental units themselves. I mean, how how are they going to, you know, move the needle.

00:17:07:17 – 00:17:31:02
Rod Khleif
Very often, very often it’s a broker again, doing it on the side. Which, you know, but but especially on the small stuff. Now, of course, you’ve probably got some assets where there’s a person on site doing some of the work. You probably got some assets where there really isn’t anybody on site. So you’ve got leasing agents doing the leasing, you’ve got maintenance guys doing the maintenance, and you’re literally, you know, full on management.

00:17:31:02 – 00:17:33:15
Rod Khleif
I’m guessing you have both those scenarios. Is that an accurate statement?

00:17:33:15 – 00:17:35:02
Cody Journell
Yeah. That’s correct. Absolutely. Yeah.

00:17:35:08 – 00:17:53:18
Rod Khleif
Yeah. And and so, you know and and I and I’ll tell you, you know, you’ve got, you’ve got several profit centers with that maintenance as a profit center, for sure. And, and, and of course, the management as well. Now you’re going to charge more for one of those that doesn’t have anybody on site. Of course, because you’re doing all the work.

00:17:53:20 – 00:18:10:01
Rod Khleif
But, yeah. Again, you know, if you guys are listening and you want to get a real overview on this, this is the stuff I go into a great length at my boot camps, but, so, so, let’s talk about your first deal as a warrior. Talk about that. Where was it? What was it?

00:18:10:01 – 00:18:10:17
Rod Khleif
Let’s let’s go ahead.

00:18:10:17 – 00:18:30:13
Cody Journell
So, like I mentioned, we had done some some smaller deals, you know, before joining the warrior program, but it kind of opened my eyes to I need to get in the room with some like minded individuals. And that’s really what. That’s what took me to the point to pull the trigger on joining the warrior group. I can’t can’t say enough good things about it.

00:18:30:13 – 00:18:44:21
Cody Journell
You know, getting an ax, getting into those boot camps, you know, having a weekend with other, you know, real estate investors and, and people that are driven like, you are like that. That’s a complete game changer. Just with the mental side of things. Not even capital or, you know, the.

00:18:44:22 – 00:18:59:10
Rod Khleif
Proximity is power, baby. You want to be around people. Yeah, we do the warrior events too, is, you know, I don’t know if you’re in Phoenix or not, but we we do and send and you know, when you meet people that are doing this day in and day out and you’re around people that think what you think is hard, is easy, it makes life a hell of a lot easier.

00:18:59:10 – 00:19:22:01
Rod Khleif
You know that rising tide lifts all ships, by the way, if you’re interested in applying to the warrior program, text the word crush to seven, two, three, four, or five. That’s how you apply. We look you over, you look us over. We don’t take everybody. But, you know, I mean, I just brag for a minute, I we’re doing a countdown on our, our program, and we’re over 275,000 unit, just multifamily units owned by the Warriors.

00:19:22:01 – 00:19:40:17
Rod Khleif
I think it’s closer to 300,000, candidly, because there’s so many people don’t even tell us anymore. And, you know, I’m very proud of that. But it’s not just multifamily either. At this point. Tons of senior housing, tons of self-storage, tons of industrial flex space, mixed use retail development, building, you name it, it’s senior housing. It’s crazy. It’s just kind of got a life of its own.

00:19:40:17 – 00:19:54:22
Rod Khleif
You see that right in the in the Facebook group, like almost every day something hey, it’s crazy, but it’s not a way to text the word crush if you’re interested to 72345 and we’ll, we’ll, you’ll, you’ll get on a call and we’ll be talking soon. What were you going to say, Cody?

00:19:55:00 – 00:20:11:24
Cody Journell
Well, I was going to say to get back to the first deal after jumping in the warrior group. So I set a goal for myself when I was going through the process with, with Mark to purchase a 25 unit building, my first year and, we bought a 26 unit. So again, power.

00:20:11:24 – 00:20:22:23
Rod Khleif
Lines for you, you just you made that declaration and it’s the guys. This is how this shit works. You got to decide. You make that decision. God of the universe. Whatever you believe conspires to make it happen. I love it.

00:20:23:00 – 00:20:28:17
Mark Nagy
It’s inspired you find it, find it. Why was it a deal? What are you guys doing to give us a whole A to Z? So?

00:20:28:17 – 00:20:51:19
Cody Journell
So this is where it gets interesting with what we’re doing with the business side and still investing. So we had a we had a referral from a client that had this building and it was underperforming. And they were losing money hand over fist. I think it was like close to $100,000 a year at this point. And they brought it to us and they were like, we’re looking down the barrel of foreclosure.

00:20:51:21 – 00:21:11:18
Cody Journell
If we sell it, we’re going to sell it at a huge loss. We’ve got tax implications, you know, like we just need help. And so they brought it to us as like the asset property manager side of things. And I, I did the audit with them. I sat down I walked every unit. You know we did the two week process and we looked at it and we said hey, you know, this is where it’s at now.

00:21:11:19 – 00:21:27:07
Cody Journell
Here’s here’s where we’ve identified that there are leaks and why you’re losing money. This property specifically only had nine out of the 26 units leased out. So wow, it’s pretty easy to fix that. Why? They don’t have any income.

00:21:27:09 – 00:21:28:11
Mark Nagy
But, the.

00:21:28:11 – 00:21:43:18
Cody Journell
Property like that. So we put the audit together and we, we put the game plan together. We said, this is what it’s going to cost to get the units back to the point where we can rent them at market rents. This is the timeline. This is the budget. This is kind of the full scope of what we’re looking at.

00:21:43:20 – 00:22:09:03
Cody Journell
And they said, this is great. We could probably do the first 10% of this, but we’re we’re tapped out. We’re out of capital. Like, you know what? What do we do from this point? And I said, well, you know, we’ve done some investments. We still believe in this, this property. It’s got a lot of upside. Why don’t we bring our group in to infuse capital into the project for, you know, majority equity in the property.

00:22:09:03 – 00:22:12:13
Cody Journell
So we really kind of partnered with the current. Oh, you.

00:22:12:13 – 00:22:14:08
Rod Khleif
Kept them in it. You kept them in it.

00:22:14:10 – 00:22:34:06
Cody Journell
So, you know, their goal when I sat down, another thing we do is go through what the goal is from then, you know, is it a successful exit? Do they want cash flow? Like and they really wanted this to help fund part of their retirement. So you know, looking at that, looking at the property and we said, well, maybe we can we can all win at this.

00:22:34:08 – 00:22:46:06
Rod Khleif
Thought of Fox brother. And guys listen, that’s you know, a lot of that is, is is it’s common. You know, when you see a deal you know look for a win win solution I love it man. So please continue.

00:22:46:08 – 00:22:53:10
Cody Journell
Yeah. So we they agreed we took over majority ownership. You know we became the the managing members of.

00:22:53:13 – 00:22:55:12
Rod Khleif
How much money did you put into it?

00:22:55:14 – 00:23:01:00
Cody Journell
So we put in about I think it was close to, 200,000.

00:23:01:02 – 00:23:03:18
Rod Khleif
Out of pocket. Or did you raise some money or how’d you do it?

00:23:03:24 – 00:23:08:07
Cody Journell
It was between me and two other investors that we’ve done some deals with in the past.

00:23:08:12 – 00:23:09:01
Rod Khleif
Okay.

00:23:09:03 – 00:23:25:05
Cody Journell
Okay, so we brought the money. We took over majority ownership. We kind of valued the property at that point in time. Around, like 1.2, 1.3 million. And that was put on based on the cash flow. It was more like replacement value, you know.

00:23:25:05 – 00:23:29:24
Rod Khleif
By the way, what asset? What asset class would you say it is, A, B, C or D?

00:23:30:01 – 00:23:33:06
Cody Journell
It was probably it was between A, C and D at that point.

00:23:33:06 – 00:23:35:09
Rod Khleif
Okay. So it was rough. What about here.

00:23:35:09 – 00:23:40:18
Cody Journell
We got it. We brought it back up to a B now. But it was in a good area a great area okay okay.

00:23:40:18 – 00:23:54:01
Rod Khleif
So that’s you guys. That’s the thing. When you can find out a property that’s that’s you know like my model is look for a C class asset in a B area or B class asset in an area. So that’s fantastic. That’s the perfect scenario okay. Please.

00:23:54:05 – 00:24:04:08
Cody Journell
Where we’re position right between two pretty major universities in Virginia. So there’s the student population. It’s a growing kind of metropolitan area. So, you know.

00:24:04:14 – 00:24:07:12
Rod Khleif
It’s a you built on the asset. What was it your built?

00:24:07:14 – 00:24:11:12
Cody Journell
It was, it’s c a late 80s.

00:24:11:14 – 00:24:12:12
Rod Khleif
Oh, that’s not bad.

00:24:12:12 – 00:24:13:12
Mark Nagy
So. Yeah.

00:24:13:14 – 00:24:16:18
Rod Khleif
Wow. Okay. So that’s not bad at all. Good.

00:24:16:20 – 00:24:22:21
Cody Journell
Yeah. So it was a, you know, it was a diamond in the rough for sure. And mismanaged and maintenance had had gone.

00:24:22:22 – 00:24:35:20
Rod Khleif
So how did these people find you? I mean I’d like to give I’d like to give advice to, you know, people listening. I mean, how, how, how, how did this deal. It was just from being known in the area. Did you market for it? How do you how did they find you?

00:24:35:22 – 00:24:45:06
Cody Journell
It was a little bit of that. So, you know, a lot of it had to do with, documenting what we’d done on previous properties and making that known to the world, whether.

00:24:45:08 – 00:24:46:20
Rod Khleif
Like Facebook or whatever.

00:24:46:24 – 00:24:58:05
Cody Journell
So, you know, all that we do content on LinkedIn, Instagram, Facebook, mostly profile. And then, you know, I ran a, like a small investor meetup group here in this area.

00:24:58:06 – 00:25:00:00
Rod Khleif
Oh, there you go. There you go.

00:25:00:02 – 00:25:11:20
Cody Journell
So it it actually came from a referral, from a guy that was in our investor group, essentially perfect was his parents, and he knew they were struggling and and he was like.

00:25:11:22 – 00:25:26:13
Rod Khleif
Oh, guys, this is so valuable for you to hear this. Those of you listening, I mean, I can’t tell you how many warriors have meetup groups. I just spoke at one of my warriors and in Vegas. He asked me to come and I, I agreed and I flew my horse out there for it. But I do speak sometimes.

00:25:26:13 – 00:25:54:18
Rod Khleif
My warrior, meetup groups. We’ve got dozens. I’m not exaggerating. Literally dozens. And that’s the value of it. You get, you don’t just get. You don’t just build trust with people to raise money, which you absolutely have to have that ability with your meetup group as your host. But but you find deals and and you know, and I honestly, you’re basically I call it acting as if because if you host a meetup group, even if you’re not an expert yet, just the very fact that you’re hosting it gives you instant credibility.

00:25:54:18 – 00:26:07:16
Rod Khleif
And you bring in people like me or experts to talk, and and you’re perceived as one. So you’re basically you’re fake it till you make it even, in some capacity. So anyway, I’m like, I keep digressing, but you’re bringing up some really good stuff.

00:26:07:18 – 00:26:25:02
Mark Nagy
So I added one more. I want to added one more real quick because like, the whole point of this conversation is you’re just, you’re you’re building a relationship with these mom and pop owners, right? Whether it’s knowing about management. So you could take them to coffee. One thing that we’ve done that we found deals with is we just got an email list from people at our areas.

00:26:25:02 – 00:26:42:01
Mark Nagy
And, and we just send email updates of like what the market is doing in that area. And you can just use like ChatGPT that can put all this stuff together. So I think value. Yeah, added value to these mom and pop because I get asked all the time, like how do you find deals? This is such an underutilized way to find deals.

00:26:42:01 – 00:26:45:06
Mark Nagy
It’s just building relationships. And the deals come to you so often.

00:26:45:06 – 00:26:59:22
Rod Khleif
Yeah, I listen, I tell people, you know, there’s two things if you’re going to do this and you do it on LinkedIn, you do it on Facebook. I don’t care where you do it to create, reach and do a meta group, podcast, whatever. Two pieces, one, you have to be consistent and two, you have to add value, period.

00:27:00:02 – 00:27:16:17
Rod Khleif
You do that and you may start with 3 or 4 people. It’s you know, I started my podcast with, I don’t know, 100 downloads and now we’re the largest in the world, for what we do. And it just again, just from being consistent bottom line and adding value I love it. Yeah. So yeah. So there’s also.

00:27:16:17 – 00:27:43:07
Cody Journell
Family. What’s that I was going to add to. That was one thing that we’ve realized with multifamily owners. It’s you know I came from a real estate sales background. So it was easy to just kind of like spray out content on social and like, you know, hit the broad market of, of homeowners. But when you start looking at multifamily investors, they’re a little bit different breed than, you know, you’re the normal Instagram scroller.

00:27:43:09 – 00:28:02:07
Rod Khleif
Let me let me in here. Let me I’m sorry to interrupt, but I this is important because I get a lot of people ask me, should I get my real estate license? And I typically say no. And here’s why. I tell them, if yes, if you’re going to sell real estate as a living, sure, but don’t do it to become an investor, typically.

00:28:02:10 – 00:28:18:03
Rod Khleif
And here’s why. Because you’re held to a higher standard. Okay. As you know. Right, Cody? I mean you’re held to a higher standard. So you you’re bringing on some liability. Now if you’re buying commercial real estate it doesn’t apply as much. But but no, I mean, in your situation, it’s perfect because you started out selling you.

00:28:18:03 – 00:28:27:24
Rod Khleif
But I imagine you, you kind of earmarked, you know, your football career and use that a little bit and got out there in front of people. Is that an accurate statement? And, you know, whatever.

00:28:28:01 – 00:28:29:23
Cody Journell
Whatever. Yeah, yeah, yeah, yeah.

00:28:30:00 – 00:28:38:12
Rod Khleif
Exactly. You can use anything you can is right. And then and then it just morphed into this. That’s what do you agree with what I said by the way. Yeah.

00:28:38:13 – 00:28:50:15
Cody Journell
That’s a that’s a great point, especially when you’re looking at like a residential license because it just it’s become more and more clear that like that is a completely different market and client. Then then trying to get in front of multiple multifamily.

00:28:50:17 – 00:29:11:20
Rod Khleif
Yeah. You know, I tell people at my bootcamps, if you’ve heard me say this little ninja trick is, is to align yourself with a residential agent or broker that’s got access to the MLS, because very often in a lot of geographic locations, you know, let’s say, let’s say a mom and pop has a five unit, ten unit, 20 unit, but they bought their house through a residential broker.

00:29:11:22 – 00:29:28:01
Rod Khleif
When they go to sell that five, 10 or 20 unit, they’re going to go to that residential broker who hasn’t got a freaking clue what to do with it. They don’t know how to price it. They don’t know how to, you know, put a value to it and you get some phenomenal deals telling a residential agent or broker to put an alert in if a multifamily hits.

00:29:28:01 – 00:29:29:03
Rod Khleif
Would you agree with that?

00:29:29:05 – 00:29:39:19
Cody Journell
Oh yeah. We I have probably three coffees or lunches a week with, with residential real estate agents and brokers and, and for that reason, you know, and they’ve got clients that buy stuff too.

00:29:39:19 – 00:29:40:24
Rod Khleif
And that’s right.

00:29:41:01 – 00:29:45:01
Cody Journell
They need somebody that they can trust to refer business.

00:29:45:03 – 00:29:55:15
Rod Khleif
Beautiful, beautiful. So, talk about that, talk about this deal. You, you, how did you oh, you took care. I got the financing piece is really what happened.

00:29:55:15 – 00:30:21:17
Cody Journell
So we we kind of, you know, we partnered with these owners, took over majority ownership, infused capital to kind of buffer the construction and the, the negative operating costs. And then over the next, like, 8 to 12 months, we came in and we did our turns. We, you know, managed the construction project and we went from about 70% vacancy, took it all the way up to I think we’re sitting right around 90 at this point.

00:30:21:17 – 00:30:22:03
Cody Journell
We’ve got to.

00:30:22:04 – 00:30:23:14
Rod Khleif
Occupancy or.

00:30:23:16 – 00:30:44:16
Cody Journell
This is super recent, but we’ve got a few more units to, to renovate and lease out. But we just we just got our debt restructured, did a cash bail refinance, and, returned about 90% of the investors capital and was also a big chunk of that to the the previous owners.

00:30:44:18 – 00:30:46:17
Rod Khleif
Oh, nice. Nice. That’s awesome.

00:30:46:17 – 00:30:55:17
Mark Nagy
So is it what’s the exit plan or are you keeping the owners in. Are you buying them out. And then you guys in a long term what’s what’s the plan with the, original owners?

00:30:55:17 – 00:31:22:16
Cody Journell
Yeah, we did our 8 to 12 month turnaround plan, you know, manage the construction, turned all the units that needed updates. The, the leasing company came in behind us and leased it all out. We got it up to about 90% occupancy and then restructured the debt with a cash out refi. And we were able to return just about 9,090% of the invested capital to my group, as well as the owners, that were on the property.

00:31:22:16 – 00:31:40:09
Cody Journell
So we kept them on, you know, keeping their long term goal in mind of wanting some cash flow with the deal. We kept them on as equity partners. You know, it’s a minority stake, but they still get the benefit. And then, you know, we’re going to we’re going to manage the property and get the, the vacancy, you know, even lower.

00:31:40:11 – 00:31:53:11
Cody Journell
And, I think when we refi it, it was about a 1.4, debt service ratio. So when we add these, these last couple units and, and, you know, keep the management rolling. I mean, we were even a little bit under market rents.

00:31:53:13 – 00:32:13:06
Rod Khleif
Whoa. Hold on one second. What are you talking about? He said debt service ratio. Debt service coverage ratio. DSR is when you’re dealing with commercial property. The the lenders look at the property’s ability to service the debt. They don’t care what your debt to income is like a single family. So what he’s saying is, is his example.

00:32:13:06 – 00:32:36:10
Rod Khleif
1.4 an example of that example would be, let’s say the property’s bringing in 140,000, a year in net income, and his debt is 100,000 a year. That’s a 1.4. So again, 140,000 to 100,000. So 1.4 debt service coverage ratio, which is fantastic. Banks want to see at least a 1.25. So anyway, I just want to explain that, hopefully I didn’t.

00:32:36:12 – 00:32:54:18
Cody Journell
Totally know that’s perfect. So, you know, we kept a little bit of meat on the bone there, for cash flow and any, any unforeseen circumstances. But, you know, being able to return investor capital within 12 months, or at least the majority of it, and, and keep the asset and, you know, kind of cash flow it long term.

00:32:54:18 – 00:33:10:12
Cody Journell
That was the goal of the project. So, you know, we’ve got some a little bit of work to do still at this one. And then we’ll there’s still room to, to bring those rents up to market. We kind of purposefully under rented them to a certain degree just to accelerate how quickly we could get.

00:33:10:12 – 00:33:14:20
Rod Khleif
Very smart. Get your occupancy up. You can always raise the rents after year one. No. Absolutely.

00:33:14:22 – 00:33:23:03
Cody Journell
Yeah. And the biggest thing, honestly, the biggest thing that that changed the NOI situation was the the owners were paying all the utilities. So. Oh wow.

00:33:23:05 – 00:33:25:05
Rod Khleif
So you build that utilities right.

00:33:25:05 – 00:33:29:10
Cody Journell
Install a rub system. You know, took that off the off the plate of the owners.

00:33:29:10 – 00:33:45:11
Rod Khleif
And okay. Let me stop you again. Let me stop you again. That’s something they haven’t heard before. So rub this ratio utility billing system. And it’s just a way to build back utilities. And you want to make sure you do it properly. Because if you, it’s a, it’s I think it’s even a felony if you overbuilt when you build back.

00:33:45:11 – 00:34:04:03
Rod Khleif
So you want to make sure you’re building the correct amounts. And there are companies that do this, management companies that actually do it in-house sometimes. But you can use an outside provider, but that’s rubs and that’s where you build back utilities, which is fantastic because that instantly goes to the bottom line and instantly increases your NOI. So all right, all right.

00:34:04:05 – 00:34:14:22
Mark Nagy
And last question here, Cody, before we maybe end is knowing what you know. Now all this experience, do you want to go into bigger properties or do you want to stick with the smaller ones? I know my opinion, but I want to ask you.

00:34:14:24 – 00:34:16:20
Cody Journell
Yeah, I think I think our.

00:34:16:21 – 00:34:17:05
Mark Nagy
Biggest.

00:34:17:05 – 00:34:48:15
Cody Journell
Thing is, you know, there’s definitely some opportunity in the sales. But for us it’s really like we want to keep more of the pie. You know, smaller deals kind of lend themselves to that. And, you know, we really like being able to see a project like that was a blight in a local area and do a full turn around and, and create this asset for the local community that, you know, was was currently like, you know, lowering property values and increasing crime things along those lines.

00:34:48:15 – 00:35:05:10
Cody Journell
So there is this there is this kind of in your backyard, like turning things around aspect to the smaller deals that we really like. But from a company’s perspective, I think there’s some opportunity for us to, to help out in these larger assets and, and, you know, be able to use our expertise and those as well.

00:35:05:11 – 00:35:07:01
Rod Khleif
Oh, for sure, for sure.

00:35:07:05 – 00:35:15:16
Mark Nagy
So, Cody, where can people the like your story, like what you talked about today, maybe they just want to chat about whatever where what’s the best place that they can, reach you and chat. Yeah.

00:35:15:16 – 00:35:31:04
Cody Journell
So we’re really active on LinkedIn now, so just my name, Cody Jr at LinkedIn. And then, you know, anybody that wants us to that might have a struggling property or even it’s looking to purchase a property, that might need a turn around, you know, send me an email.

00:35:31:06 – 00:35:32:05
Mark Nagy
What city? In what.

00:35:32:05 – 00:35:52:19
Cody Journell
City? We’re in Virginia, but, you know, we can we can handle pretty much anything on the turnaround side in Virginia. Anything outside of that and would be, you know, strictly kind of asset management, like planning. But, you know, if you’re doing if you’re looking at a project and you want to see if there’s any opportunity there for value add, we’re more than happy to help you take a look at it.

00:35:52:19 – 00:35:58:18
Cody Journell
Am I emails Cody Cody at Haven pm.us love it.

00:35:58:20 – 00:36:12:10
Rod Khleif
Well I appreciate you coming on brother. You added a ton of value again guys, if you’re interested in the warrior program, text the word crush to 72345. And, Cody, it’s it’s good to see you. And, we’ll see you at the next warrior van, brother.

00:36:12:12 – 00:36:16:18
Cody Journell
Yeah, I appreciate it, guys. Rod, keep doing it. You’re doing. Mark. Good seeing you again, man.

00:36:16:21 – 00:36:18:10
Mark Nagy
Absolutely. Thanks, guys.

00:36:18:12 – 00:36:25:07
Rod Khleif
Happy to have. Never mind. I was going to say Happy New Year, but we don’t know if they’re bad. Yeah, we’ll leave that up. See you later, brother.