July 11, 2025 • 35 mins
I spoke with Amy Rubenstein, CEO of Clear Investment Group, about how she built a thriving real estate platform by focusing on one of the most overlooked areas of the market: distressed C-class multifamily housing.
Amy didn’t come from institutional real estate — she taught herself everything from Excel to underwriting by reverse-engineering models, and built a company that now serves both high-net-worth and institutional LPs. Today, her firm consistently delivers 30%+ IRRs by stabilizing mismanaged assets and restoring them to market performance.
We talk about her journey from buying a single six-unit property to leading a vertically integrated investment platform, her thoughts on risk and inflation, why C-class housing remains resilient, and how she thinks about scaling her team and her impact.
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Transcript
Episode Transcript
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(00:00):
So tell me about the strategy for CLEARInvestment Group.
(00:03):
Alright.
So we buy very distressed, large multifamilyworkforce housing assets across the country.
So when I say distressed, I mean from amanagement standpoint.
So things like high vacancies, highdelinquencies, we stabilize those assets,
return the value or restore that value back tothose assets.
(00:25):
After we're stabilized, then we go out andresell the properties back again.
Presumably, nobody wants high vacancy rates andeverybody wants a stabilized property.
What does it mean that you guys go in andstabilize the property?
So for us, stabilization is literally fill upthat occupancy with viable tenants who are able
(00:46):
to pay their rent and get the property back tothe way that it was before it started to
deteriorate.
So we're trying to stabilize back to currentsubmarket economics.
So if the average occupancy rate in thatparticular submarket is 91%, then we're aiming
for 91%.
If average rents for C class workforce housingin that particular neighborhood is $850 and
(01:12):
we're trying to get to that approximate $850 Sowe're not trying to max out rent rolls, we're
not trying to exceed the market, we're justtrying to fit in with everyone else.
And how do you go about doing that?
So there are lots of ways.
Usually the property has become distressedbecause the management has fallen apart for
(01:33):
whatever reason.
So it starts with the staffing and themanagement and communication back to the
tenants.
Most of the time tenants have stopped payingrent because management has stopped
communicating with them or they're not gettingtheir basic needs met.
So we're going to get those lines ofcommunication functioning again.
We're going to start taking maintenancerequests, start to send out notices to tenants,
(01:57):
really just let people know that we're thereagain, that we have a staff, we start to staff
and hire people.
And then we start to clean up deferredmaintenance.
And we're gonna start with anything that islife safety issues.
Then we're gonna start with a little bit ofcleaning up and beautifying so things don't
look like they're falling apart again.
And then we're gonna get into some unit turns.
(02:19):
And then we're basically looking at how can westart to occupy these units and getting those
up to speed.
From a psychological perspective, it's likereciprocity.
You're not taking care of your part of thedeal, so I'm not going to pay my rent,
essentially.
Absolutely.
Yeah, we get that from a lot of tenants.
And there's various reasons as to why peoplearen't paying rent.
Part of when we're doing our due diligence iswe're talking to the tenants and finding out
(02:41):
why they're not paying their rent.
And a lot of people stop paying rent becausepeople stop asking for rent.
A lot of people stop paying rent because theirneighbor stopped paying rent and nothing
happened to them.
They didn't get evicted or anything, so theyjust stopped paying their rent.
And a lot of people stopped paying their rentbecause nobody's fixed their toilet for six
months.
So things like taking a step back, how did youget into this industry?
(03:02):
I started in this industry about twenty threeyears ago.
I fell into it by accident, which I feel like alot of real estate people do.
I bought a house and I'd appreciate it invalue, and I didn't understand what I was
doing, but I understood that there was valueadded to the house.
And so I did it again and I bought a condo,value was added again.
And then I thought, well, I should figure outwhy value is being added.
(03:24):
So I started to study real estate a little bitto try to understand what it was and I ended up
syndicating my first deal, which was six studioapartments in Hollywood, California.
Bought my first deal, fixed it up, occupied it.
Six months later, I sold it and bought twodeals.
And this was 02/2003, so the market was goingup.
(03:47):
I wasn't the most brilliant person.
It was literally I was riding an upward market.
Sometimes these up markets for a manager, maybeyou weren't as experienced as you are today,
but they provide that buffer of protection soyou can make some mistakes, still make money,
and as the market continues to go up, yourskills go up.
So by the time, you know, it might go down andis flat, you now have alpha in the trade via
(04:10):
your skill set.
Yes.
Learned in the market between the years of 2003to 2008 was a very forgiving time period.
And so that was really nice to be able to havethat.
So you're in the C class real estate asset.
Tell me about the historic performance of theSaaS class.
The historic performance has been very, verystrong, which is why we ended up in this
(04:32):
particular class.
So when I started in 02/2003, it happened to bea somewhat distressed property.
It was fully vacant when I bought my firstproperty, but I started dabbling in all sorts
of real estate, mostly multifamily, but I wouldsay I was in Cs and Bs and then some office,
some retail, some industrial.
(04:53):
And after having gone through some uptimes,some downtimes, what I really found stayed
strongest, it was affordable housing, was thatC class asset.
We're our tenant base, our renters bynecessity.
We're not fighting against the housing market.
You get B class or A class and those arelifestyle renters.
(05:14):
They're choosing to rent or to go buy homes.
There's always going to be a need foraffordable housing.
There are always going to be people that haveto live somewhere and don't have another option
other than renting.
And so therefore it really does stay strong inups and downs.
And historically it's performed very steadyover the years.
And so it is really what I like the most.
(05:36):
That's not to say that there aren't downturnsthat have hurt us or caused pain or caused, you
know, the market to deteriorate a bit.
There certainly are, but I still think that itstays the strongest.
As part of your strategy, are you somehowtrying to predict interest rates and market
conditions, or are you always leaving yourselfenough of a margin to make sure that no matter
(05:56):
what happens, you have an embedded return inyour investment?
We don't like to speculate on any macro changesthat are going to occur.
Interest rates are the most common thing thatpeople talk about, trying to kind of time
interest rates or time the market as far aswhere are you at in the market up and down.
We're looking at each and every variable, andwe're making sure that we're conservative in
(06:21):
each of those variables.
And so when we're underwriting, we are stresstesting for interest rates to go up.
We will never speculate that interest rates aregoing to go down.
Even when everybody's saying you're gonna getcuts, we're gonna ignore that.
We're gonna look at how does a deal look withinterest rates today and what were to happen if
interest rates go up 100 basis points or 200basis points?
(06:42):
Can we sustain ourselves through that time?
We find ourselves to be somewhat insulated frommacroeconomics because what we're doing is
increasing NOI so much that we have thewherewithal to be able to sustain ourselves
through some turbulent times.
We're taking what is usually negative cashflowing assets and we're turning them into
(07:06):
positive cash flowing assets.
And we had a huge Delta in that NOI that we'rerestoring.
I say restore because it did exist at somepoint.
This is a hard asset.
You have units that are already built.
There are places for people to live, but it'sgetting them back to market terms.
Where is that today?
And it's bringing back that asset to whateverthe market is right now.
(07:27):
So we do try to stay away from speculations asto what's going on as far as appreciation, as
far as interest rates, as far as, you know,we're gonna underwrite some natural inflation,
but we're underwriting things to get a littlebit worse, but to kind of stay the course.
And if we're buying in a downtime, we'reunderwriting to sell in that downtime.
And if we're buying in a good time, we'reunderwriting to sell in the downtime.
(07:49):
So we're trying to ignore as much as we can thebenefits of what's going on in the marketplace
and then underwrite for things that could tearus down.
Tell me about your LP base.
We have a range of investors from high networth individuals up to institutional
investors, pension funds.
We started with just high net worthindividuals.
(08:12):
So, the first deals were started with friends,family, and then friends of family, family of
friends, and so on and so forth until we nolonger knew all of our investors.
And then we had a lot of high net worthindividuals that we didn't necessarily know,
but that would join along with us.
And then as we started to build and grow as afund, as opposed to deal by deal structure,
(08:32):
then we have the ability to bring in largerinvestors, hedge funds, pension funds, and so
on.
And and you've gone the full life cycle.
You even had your first your your own money,then you had a syndicated deal, then you had
high net worth friends of high net worthinstitutions.
When it comes to institutional investors, tellme about the sales cycle.
How long does it take for you to get a checkfrom an institutional investor from the first
(08:55):
time that you meet?
I would say nine to eighteen months.
It's a long process.
People have to get to know us and feelcomfortable with us, and then there's
underwriting that just takes time.
It passes through a lot of people, a lot ofdepartments.
We get people to come out to our offices,visiting us, interviewing our staff, looking
(09:19):
through our audits, looking through, we had aninvestor that pulled the deed of every purchase
and sale of assets we'd bought from thebeginning of time.
And then laying it out against our trackrecord, against what we had submitted as our
record.
So it's like very, very tedious stuff.
We've gotten used to it now, so nothing reallyshocks us anymore and we've got a huge database
(09:44):
of information and due diligence on us, butpeople ask us new questions all the time and
we're just used to producing back the answers.
And it's easy if you can be an open book, andit's easy to respond to those answers.
I remember the first time I got aninstitutional investor, it could be a brutal
process, especially in the beginning.
Absolutely.
I stayed away from it for a really long timebecause I felt like, you know, in my earlier
(10:09):
years, I didn't want to give up any control oneverything I was doing.
And it felt like very constricting.
It felt like all of a sudden you had a bossagain.
And then I kind of gave into it because at somepoint there's only so much you could grow.
And you can certainly have a model that is allhigh net worth individuals, but it is very
(10:30):
helpful to have some of those larger checks.
And so at some point I sort of gave into it,but it's easier when you have a larger staff,
when you have people to handle those kinds ofquestions and that kind of due diligence and
the kind of communication that it takes.
And if you're, you know, if you're only acouple people in an office, you just can't take
it on.
Was it easier after the first institutionalinvestor you could kind of point to them and
(10:52):
other people got much more peace of mind andyou kind of started with this, benefit of
doubt?
Absolutely.
Because people then get that confidence.
Someone else did their due diligence.
They had the confidence to come into this.
Nobody wants to be the first.
It's very, very hard to get your first.
So now putting on the hat of an institutionalinvestor, why would they be interested in C
(11:16):
class real estate?
Because it's where the pure alpha is.
You know, when we're taking NOI and growing itso greatly, it's such a different model than a
traditional value add model where you're tryingto tack on a little bit of rent, you're
maximizing that rent roll.
You know, we're producing returns that arelarge enough that it's hard to ignore it.
(11:40):
If you have a lot of very stable A classassets, you're producing single digit returns.
And probably on the lower end, the nicer thoseassets are and the more stable they are, the
lower your returns are gonna be.
And when you take deals that have so much roomin NOI, our average return to investors is over
(12:06):
37% IRR over the years.
That's because we're taking things that are sobroken and bringing them back.
On the other hand, you know, one might look atthis and say, well, then it's super high risk
and we don't see this particular strategy ashigh risk.
And the reason is we're sitting on hard assets.
We're sitting on hard assets that had realvalue that could be proved out just a couple of
(12:31):
years prior.
As soon as those assets are filled into marketconditions, those assets are producing very
significant cash flow.
And so for us, we don't look at them asparticularly risky investments.
Now there is a lot of work that has to be doneto get from point A to point Z, where we're
(12:51):
going to end.
Tons has to happen, but the asset's going tostand, it's already there.
And we are buying these assets so far below thecost of replacement that we're very comfortable
about the of them.
Real estate's known for 1031s for taxadvantaged structures.
Are there any tax advantaged aspects to thistype of strategy?
(13:11):
Absolutely.
We produce lots of losses in the very beginningof our holds.
So first couple of years, investors get tobenefit from those losses and those write offs.
And then we use cost segregations to alsoaccelerate those losses.
We've been benefiting off of bonusdepreciation, which may or may not disappear in
(13:34):
the next couple of years.
Ten thirty one exchanges are absolutely a greatway to be able to defer taxes.
It's hard to take advantage of all the time ina fund structure, but we have the ability to in
the very beginning of the fund.
And then, you know, our gains at the end arelong term capital gains, so different than
(13:55):
getting ordinary income.
So you're a solo GP in a difficult tounderstand asset class.
How did you go about learning what it took tobe successful?
It's trial and error, a lot of it.
You know, I taught myself a lot of what I didin the beginning, but there were lots of
(14:16):
helpful people along the way.
And I think I'm not a person that's afraid toever ask for help or to tell someone I don't
understand something.
It's something I tell my team all the time.
I learn every day.
We're very good at this office at doing onething.
We're very, very specific in what we do.
But even within that, we come across new thingsall the time.
(14:37):
And I have no issues in the middle of a callwith someone saying, have no idea what saying,
or I don't understand that term, or I've neverheard of that before, can you explain that?
And I think that that is very helpful.
There are things we try to do every day thatare new because it comes up and it happens.
We're gonna buy something where something hashappened that we've never experienced before.
And we'll learn from that.
And a lot of it is continuing to build anetwork so that I have people to to call on.
(15:03):
That's interesting because a lot of these quoteunquote dumb questions are simple questions.
Actually, most of them are not dumb.
I asked you, for example, about tax advantages,and, of course, I've heard about ten thirty one
exchanges, but you talked about costsegregation studies, which I've heard about.
I haven't done deep dive.
You talked about bonus depreciation.
So something that sounds like a very obvioustopic that you should know, you should know ten
(15:27):
thirty one exchanges and and real estate.
There's actually more to it oftentimes thanwhat we saw.
Yes.
The wonderful thing about real estate is thebasics of real estate are very simple.
And then you can layer on all thesecomplications, but it's easy to start to get a
grasp of it, to start to understand what it is,it's very tangible, so the concepts are simple,
(15:49):
it's just laying on the many, many layers ofcomplications that sort of start to add to the
complexity of a deal.
And you mentioned you have mentors in theindustry.
How did you cultivate those relationships?
I've always been great at keeping uprelationships with people that I buy from or
people that I sell to or brokers in theindustry or lenders industry.
(16:11):
And I use that the network of those people thatI come across all the time to ask questions to.
There's a guy who bought a portfolio from usonce and then I ended up buying a portfolio
from him once and he's someone I'll like everyonce in a while, I'll text him and say, Hey,
have you been in this market before?
(16:31):
What do you think about that market?
Or, you know, I have other friends who'vebought or sold in areas that I hadn't bought or
sold in or it's constantly sort of keeping up anetwork through working and then also through
business organizations or people you meet atconferences and stuff like that.
(16:51):
I'm actually not the most extroverted person,but I think it's important to constantly be
networking to be able to have that library ofinformation.
So there's a real estate aspect to what you do,but there's also the part of being a GP,
(17:15):
fundraising, investing, learning the fund side.
How have you become better at being a betterinvestor?
The hardest part of running a company isfiguring out your team.
How do you maximize your team's potential?
How do you get your team running at allcylinders?
(17:36):
And I think it's the people part that's thehardest.
The buildings are gonna throw you curveballsall the time.
You're gonna have a fire, you're gonna have acode enforcement come in, you're gonna have
problems that happen, but you have to have theteam that's able to take on those problems,
that's nimble enough to pivot and come up withnew ideas, but there's only so much you can do
on your own.
(17:56):
And so I think for me, the biggest learningcurve is always about the people.
How do I help foster our team?
What's been the biggest lessons about what kindof people you should work with, how to manage
those people, any people issues?
I read a lot about business management,teamwork, unlocking potential, and there is
(18:26):
Patrick Lencioni book about the ideal teamplayer and it talks about how people, the ideal
team player is someone who is hungry, humble,and people smart.
And for me, that is something that I would haveloved to have learned earlier because I can't
agree with it more.
(18:47):
I can't work with a team that is not hungry andhumble and PeopleSmart.
PeopleSmart cuts out the drama, but the humbleand hungry is so crucial.
We all have to just be ready to hear someoneelse's ideas.
And when I was younger, I thought that I shouldtry to be the smartest person.
(19:11):
And then as I got older, I realized it's waybetter if I'm not the smartest person.
I need to have people that are way smarter thanme in my office.
And I do, I have teammates here that are waysmarter than me in each of the divisions that
they work in.
And that's such a gift.
(19:34):
But when that comes with, when you get thosesmart people and that comes with people who are
humble so that you can have conversations andhave disagreements and be able to come up with
which strategy is the best and not care whosestrategy it was.
We're just looking for what is the beststrategy, what is the best answer and I don't
care if it's never my answer.
(19:55):
And I want all of our team to feel that sameway where, you know, we have a policy here in
the office that if two people disagree onsomething, they have to sit and take the time
to communicate to each other what they disagreeon and state their case, and then listen and
try to get the other person to understand themand try to understand the other person's side.
(20:16):
And if they do it well, without ego, almostalways, both of them will agree on one of the
ways that is better and that is the waydecisions should be made as opposed to the
person in the highest position gets to make thedecision.
Yeah.
There does seem to be a right answer for a lotof questions.
It's a little bit paradoxical to say that, butin terms of strategy or micro things, there
(20:39):
does seem to be a right answer in that if twopeople without an ego put all the facts on the
board, the answer most of the time, 90 pluspercent of the time is obvious.
Me and my partner Curtis, we we almostannoyingly get the same answer, and we've
wondered, do we both have the same blindside?
Are we basically systematically, like, foolingourselves?
We almost have a paranoia about why do we keepon coming up with the same answers?
(21:03):
Do we have groupthink?
Do we access the same information?
So we kind of live in this paranoia, but I dothink that for most topics, you take away the
ego, the answer starts to present itself.
Absolutely.
And when you and your partner are speaking oranalyzing the problem, do you both analyze it
in different ways and get to the same end?
For sure.
(21:23):
He'll say something like really brilliant,orthogonal that I never thought about, and then
sometimes I could add to that.
Or I might say something and as I'm saying it,I'm like, no, that's not true.
And then we both kind of laugh and I correctmyself.
So there's this kind of discovery and two mindswith different kind of data sets evolving on
(21:44):
this topic together.
Yeah.
That's the best way.
It's great when you're coming across it fromdifferent mindsets and still can get to the
same answer.
It's Another thing that I've started toimplement this kind of form of delegation where
if somebody is responsible for some somethinglike the editor of the podcast, I tell Wellrose
(22:04):
who runs the podcast, basically, I work foryou.
So you have a schedule.
You need to do three episodes a week.
You tell me what I need to do.
And it's a powerful frame both for Wellrose,but also for me because I don't have to be
doing somebody else's job.
I kind of think about it like I work for her.
I'm like the on air talent.
You tell me where to show up, you know, who I'minterviewing, and it's a it's a beautiful kind
(22:29):
of symbiotic way, and it's a very scalable wayto build an organization.
It's not something that you see that much inorganizations.
Absolutely.
It's so important to do that because if youdon't give someone ownership, then you end up
taking it back on yourself, or if you don'thave buy in from someone else and they don't
have their heart in it.
And it's something to constantly be remindingourselves as managers or leaders, but you have
(22:53):
to give that power to the other person to runtheir own show.
I literally in this situation to run their ownshow, but to run their own division, their own
ideas, their own projects.
And then you step in to, they get to ask youwhat they need and you step in to assist them.
I agree with you.
It was a way more productive method of gettingpeople to really rise to their full potential.
(23:18):
A lot of high achievers, they think they're,you know, control freaks and all these things.
But what I like to point out to them is theyhave somebody on their team that's really top
notch, and they have no issues delegating tothat person.
So the issue is not actually them or theircontrolling or their, quote, unquote, high
standards, which are an asset.
It's actually they don't have the right peoplein the seats in order to give up control to
(23:41):
them so that they could carry on that standard.
And ideally, you have people that have even ahigher standard in this specific domain.
And that's a really, really hard balance to getto that point where you figure you can trust
that person to lay everything off and delegateeverything off and know that it's gonna come
back the right way or that they're gonna takeit on the right way.
(24:02):
But if you don't give it off in full anddelegate it in full, then you're never gonna
see what can come back at you.
So it is a hard balance in the beginning whenyou're first starting to work with someone to
figure out what can they do and what is theirpotential and how do you take those risks with
them to delegate out and know that it's okay tolet go.
Where do you see your business in five, tenyears and how do you think about the
(24:22):
opportunity set and also organizationally howyou expand?
There is so much wonderful distressed realestate out there.
And so we have a lot of room to grow within theexact asset class that we're in right now.
We're doing exactly what we do.
And we love that.
In that sense, that growth is just more of thesame.
(24:45):
It's scaling what we already do.
And then when you ask about years out, what areour goals?
There are other things that we would like to doat some point.
So I think in the next five years, what wewould like to do is have a parallel fund that's
a debt fund that operates off of the same assetclass.
So it would be the same process up to thepurchase.
(25:07):
And at that point, someone else takes it onbecause you're just providing the debt.
So being the debt instead of the equity withinthat same C class distressed real estate.
And then there are a lot of deals that aregreat deals that we pass on because they're
just not distressed enough for us, that we'renot seeing those 30 IRRs, we're seeing 22%
(25:30):
IRRs.
And we would like the opportunity not to haveto pass on some of those.
And so in that ten year range, we would love tobe a one stop shop for multifamily investing.
I don't know that we're ever gonna be A classowners because I struggle to wrap my head
around concept.
(25:51):
D class is a whole another thing too, but thatmiddle range of multifamily, I think it's a
great place to be.
And I think we'd like to be even more wellrounded in that era, in that arena over the
next ten years.
We'll get right back to interview.
But first, we're looking for the next greatguest.
(26:11):
If you or someone you know is a capitalallocator and would make for a great guest,
please reach out to me directly atdavid@whispercapital.com.
What is c class real estate correlated with andwhat is it negatively correlated with?
Multifamily real estate's a really great hedgeagainst inflation, and so it fits really nicely
in the portfolio in that period of time forsure.
(26:35):
We have assets that, you know, the individualrents are about twelve months in length, your
rental period or lease period is twelve months.
So you can adjust to inflation really quickly.
Now, of course, the market is adjusting withyou, right?
You're not raising rents when everything elseis going down, but it typically when you're in
(26:56):
inflationary periods of time, you're gonna alsosee those rents go up as well.
And so you're in an asset class that can reacta little bit faster to something like inflation
than other asset classes.
So I think multifamily is a really strong pieceof a portfolio.
You also are sitting with a hard asset that hastangible value regardless of what's going on
(27:21):
with rents.
There is some inherent value in just the assetitself.
So you've got some stability in that.
But right now, I can't imagine a better placeto put my money than in, I mean, of course,
it's easy for me to say that when it's the oneasset class that I understand the best, but
(27:43):
when you see the market volatility that hasbeen happening, you know, year to date, and
we've seen our ups and downs and sure it's in agood place right now, but the market's been
unpredictable and you don't get thatunpredictability in multifamily real estate and
especially in multifamily real estate that's Cclass.
(28:05):
And the reason being is we're not fightingagainst the housing market.
We're renting to renters by necessity asopposed to lifestyle renters.
So there's always gonna be a need foraffordable housing no matter what.
It doesn't matter what happens to interestrates with the housing market because our
renters are not gonna go buy homes.
There are always going to be people that areworking class people that need a place to live.
(28:30):
And right now also when you do have inflation,when we do have tariffs, what happens is
construction becomes very difficult to put outnew construction because there's costs that are
unpredictable right now and very high rightnow.
And so low income housing is not being built.
And so it makes our asset class even moreimportant and even stronger at a time now.
(28:53):
So I'm a huge advocate of C class assets.
It's kind of like a staple good, like milk andeggs.
Exactly.
It's almost inherently a a hedge against a adownward economy.
What do you wish you knew before starting as areal estate investor twenty two years ago?
Oh, my gosh.
(29:14):
In some ways, was very lucky that I didn't knowanything or I probably wouldn't have done it.
So in some ways that allowed me to grow.
I just didn't know all the things that I shouldhave been scared of.
Ridley, I did take risks that were that I wouldnot take today, and they worked out well for
me.
(29:34):
So I wouldn't suggest that you take risksbecause you don't understand them.
So you might have not known all the challenges,call it, like, the hundreds of challenges, but
you also probably underestimated yourperseverance and your ability to go through
those challenges.
So the reason you may have not done it isbecause your brain would only see those
(29:55):
hundreds of challenges, and it it wouldn'tprice in your perseverance.
And as you went after these challenges, yourperseverance kept on going up, so you solved
these issues sequentially.
So if you had really understood your humanmind, you might have actually went through it.
But if you were just looking at this mountainof challenges without knowing that you'd grow
on that journey, it would seem insurmountable.
(30:17):
Absolutely.
So we got through 02/2010, we didn't lose anymoney for any investors ever.
We did fine through that period of time, but itwas so painful and it was very physically
painful too.
I no longer feel the physical pain of stressand I think that the reason for that is that I
(30:40):
have this intense faith that we will getthrough it.
Just like put your head down and keep workinglike you just said.
You know that perseverance gets you to theother side of it.
And having, if I would have had that faith backthen or that understanding that we're gonna
make through this, maybe that time would havebeen less painful.
I grew so much from that stuff too.
(31:01):
I'll tell you what I should have, what I wouldhave liked to account.
I studied economics, but it wasn't my major, incollege.
And so I came out of school without all of thetools I needed.
And so if I were to go back, I would havelearned Excel better, and I would have learned
finance better, and I would have, you know,taken different classes in college that would
(31:21):
have gotten me, that would've helped me learnin a more productive way, as opposed to the
remedial ways that I taught myself.
And I could be smarter today and I could bebetter at math and I could be better at Excel
and I could be better at these things.
So maybe that would be something that I wouldgo back and change.
Dare I ask, what are these remedial ways thatyou taught yourself these skills?
(31:45):
I didn't even know what Excel was, and I wassent an Excel sheet when I was trying to
understand what real estate was.
And I had this Excel sheet and I was likecopying, like looking in the cells at what the
formula was and then like copying it intoanother cell, into another sheet to try to
teach myself what Excel was.
(32:07):
It wasn't even a class.
I didn't even take a class on it.
I literally took a model and copied everything.
You're recreating the model.
So, yes.
And that was how I taught myself Excel.
So that's pretty remedial.
There had to have been a better way to do that.
I did the same thing with teaching myselfQuickBooks.
There was one night when I had a very smallstaff.
(32:31):
I was a couple years into it.
I had a bookkeeper who worked for me and onenight she just left and I thought, what am I
going to do?
I don't know what QuickBooks is.
At that time we were on QuickBooks.
I took one accounting class in college, I knownothing.
And I literally spent the night teaching myselfQuickBooks so I could run my own books the next
(32:53):
day.
And I did, but there's better ways to do thesethings, you know?
We don't have to do it that way.
We could take classes and learn things in adifferent way.
You know, I didn't have those luxuries.
What would you like our listeners to know aboutyou, Clear Investment Group, or anything else
you'd like to share?
We're super passionate about what we do.
The thing that I feel the luckiest, I guess,about my career in general and about our
(33:17):
company in general is we are able to creategreat returns for our investors, but naturally
we're impact investors.
And we didn't set out to be impact investors,but we are.
And it is, I would say the one thing that makesme always happy to come to work.
(33:41):
So I feel really good about what we do.
We change communities for the betterconstantly.
We support our tenants and the communities thatour tenants live in.
And that's without sacrificing any of ourprofits.
And I think that that is the most sustainableway to make a difference in the world.
When you get to do your job every day and youfeel like you're making a positive impact on
(34:05):
the world, it's it just feels great.
And so we love what we do.
It's like the opposite of traditional virtuesignaling, where you're signaling that you're
virtuous and you might be hurting somebody.
You're actually signaling that you'recapitalist and you're actually helping
somebody.
Yeah.
Yes.
We never talked about it or advertised itbefore until this thing called ESG became very
(34:29):
popular for a very short period of time.
I think now That's rebranded.
To the other side again, so we don't talk aboutit again.
But there was this like teeny little windowwhere some people would be interested.
I, you know, we would get on calls sometimeswith investors and, we'll go through our whole
pitch and our pitch never has anything to dowith ESG or impact or like, I would never until
(34:53):
two years ago have said that we're a womenowned business.
It's just that to me that was only going to bea negative, not a positive.
And so then like at the end of all of ourpitches, we'd say to people, you want us to
talk about impact investing?
Do you guys care about that at all?
And most of the time people say, no.
I would say, okay, no problem.
You know, it's very rare that anyone caresabout it, but it's not for anyone else that we
(35:17):
do it.
It's, you know, it just is what we do, andwe're proud of it and happy about it, but sort
of like the silver lining for us.
Well, Amy, it's been a pleasure to chat, andlook forward to sitting down very soon.
Likewise.
Thanks so much.
Thank you for listening.
To join our community and to make sure you donot miss any future episodes, please click the
follow button above to subscribe.
So tell me about the strategy for CLEARInvestment Group.
(00:03):
Alright.
So we buy very distressed, large multifamilyworkforce housing assets across the country.
So when I say distressed, I mean from amanagement standpoint.
So things like high vacancies, highdelinquencies, we stabilize those assets,
return the value or restore that value back tothose assets.
(00:25):
After we're stabilized, then we go out andresell the properties back again.
Presumably, nobody wants high vacancy rates andeverybody wants a stabilized property.
What does it mean that you guys go in andstabilize the property?
So for us, stabilization is literally fill upthat occupancy with viable tenants who are able
(00:46):
to pay their rent and get the property back tothe way that it was before it started to
deteriorate.
So we're trying to stabilize back to currentsubmarket economics.
So if the average occupancy rate in thatparticular submarket is 91%, then we're aiming
for 91%.
If average rents for C class workforce housingin that particular neighborhood is $850 and
(01:12):
we're trying to get to that approximate $850 Sowe're not trying to max out rent rolls, we're
not trying to exceed the market, we're justtrying to fit in with everyone else.
And how do you go about doing that?
So there are lots of ways.
Usually the property has become distressedbecause the management has fallen apart for
(01:33):
whatever reason.
So it starts with the staffing and themanagement and communication back to the
tenants.
Most of the time tenants have stopped payingrent because management has stopped
communicating with them or they're not gettingtheir basic needs met.
So we're going to get those lines ofcommunication functioning again.
We're going to start taking maintenancerequests, start to send out notices to tenants,
(01:57):
really just let people know that we're thereagain, that we have a staff, we start to staff
and hire people.
And then we start to clean up deferredmaintenance.
And we're gonna start with anything that islife safety issues.
Then we're gonna start with a little bit ofcleaning up and beautifying so things don't
look like they're falling apart again.
And then we're gonna get into some unit turns.
(02:19):
And then we're basically looking at how can westart to occupy these units and getting those
up to speed.
From a psychological perspective, it's likereciprocity.
You're not taking care of your part of thedeal, so I'm not going to pay my rent,
essentially.
Absolutely.
Yeah, we get that from a lot of tenants.
And there's various reasons as to why peoplearen't paying rent.
Part of when we're doing our due diligence iswe're talking to the tenants and finding out
(02:41):
why they're not paying their rent.
And a lot of people stop paying rent becausepeople stop asking for rent.
A lot of people stop paying rent because theirneighbor stopped paying rent and nothing
happened to them.
They didn't get evicted or anything, so theyjust stopped paying their rent.
And a lot of people stopped paying their rentbecause nobody's fixed their toilet for six
months.
So things like taking a step back, how did youget into this industry?
(03:02):
I started in this industry about twenty threeyears ago.
I fell into it by accident, which I feel like alot of real estate people do.
I bought a house and I'd appreciate it invalue, and I didn't understand what I was
doing, but I understood that there was valueadded to the house.
And so I did it again and I bought a condo,value was added again.
And then I thought, well, I should figure outwhy value is being added.
(03:24):
So I started to study real estate a little bitto try to understand what it was and I ended up
syndicating my first deal, which was six studioapartments in Hollywood, California.
Bought my first deal, fixed it up, occupied it.
Six months later, I sold it and bought twodeals.
And this was 02/2003, so the market was goingup.
(03:47):
I wasn't the most brilliant person.
It was literally I was riding an upward market.
Sometimes these up markets for a manager, maybeyou weren't as experienced as you are today,
but they provide that buffer of protection soyou can make some mistakes, still make money,
and as the market continues to go up, yourskills go up.
So by the time, you know, it might go down andis flat, you now have alpha in the trade via
(04:10):
your skill set.
Yes.
Learned in the market between the years of 2003to 2008 was a very forgiving time period.
And so that was really nice to be able to havethat.
So you're in the C class real estate asset.
Tell me about the historic performance of theSaaS class.
The historic performance has been very, verystrong, which is why we ended up in this
(04:32):
particular class.
So when I started in 02/2003, it happened to bea somewhat distressed property.
It was fully vacant when I bought my firstproperty, but I started dabbling in all sorts
of real estate, mostly multifamily, but I wouldsay I was in Cs and Bs and then some office,
some retail, some industrial.
(04:53):
And after having gone through some uptimes,some downtimes, what I really found stayed
strongest, it was affordable housing, was thatC class asset.
We're our tenant base, our renters bynecessity.
We're not fighting against the housing market.
You get B class or A class and those arelifestyle renters.
(05:14):
They're choosing to rent or to go buy homes.
There's always going to be a need foraffordable housing.
There are always going to be people that haveto live somewhere and don't have another option
other than renting.
And so therefore it really does stay strong inups and downs.
And historically it's performed very steadyover the years.
And so it is really what I like the most.
(05:36):
That's not to say that there aren't downturnsthat have hurt us or caused pain or caused, you
know, the market to deteriorate a bit.
There certainly are, but I still think that itstays the strongest.
As part of your strategy, are you somehowtrying to predict interest rates and market
conditions, or are you always leaving yourselfenough of a margin to make sure that no matter
(05:56):
what happens, you have an embedded return inyour investment?
We don't like to speculate on any macro changesthat are going to occur.
Interest rates are the most common thing thatpeople talk about, trying to kind of time
interest rates or time the market as far aswhere are you at in the market up and down.
We're looking at each and every variable, andwe're making sure that we're conservative in
(06:21):
each of those variables.
And so when we're underwriting, we are stresstesting for interest rates to go up.
We will never speculate that interest rates aregoing to go down.
Even when everybody's saying you're gonna getcuts, we're gonna ignore that.
We're gonna look at how does a deal look withinterest rates today and what were to happen if
interest rates go up 100 basis points or 200basis points?
(06:42):
Can we sustain ourselves through that time?
We find ourselves to be somewhat insulated frommacroeconomics because what we're doing is
increasing NOI so much that we have thewherewithal to be able to sustain ourselves
through some turbulent times.
We're taking what is usually negative cashflowing assets and we're turning them into
(07:06):
positive cash flowing assets.
And we had a huge Delta in that NOI that we'rerestoring.
I say restore because it did exist at somepoint.
This is a hard asset.
You have units that are already built.
There are places for people to live, but it'sgetting them back to market terms.
Where is that today?
And it's bringing back that asset to whateverthe market is right now.
(07:27):
So we do try to stay away from speculations asto what's going on as far as appreciation, as
far as interest rates, as far as, you know,we're gonna underwrite some natural inflation,
but we're underwriting things to get a littlebit worse, but to kind of stay the course.
And if we're buying in a downtime, we'reunderwriting to sell in that downtime.
And if we're buying in a good time, we'reunderwriting to sell in the downtime.
(07:49):
So we're trying to ignore as much as we can thebenefits of what's going on in the marketplace
and then underwrite for things that could tearus down.
Tell me about your LP base.
We have a range of investors from high networth individuals up to institutional
investors, pension funds.
We started with just high net worthindividuals.
(08:12):
So, the first deals were started with friends,family, and then friends of family, family of
friends, and so on and so forth until we nolonger knew all of our investors.
And then we had a lot of high net worthindividuals that we didn't necessarily know,
but that would join along with us.
And then as we started to build and grow as afund, as opposed to deal by deal structure,
(08:32):
then we have the ability to bring in largerinvestors, hedge funds, pension funds, and so
on.
And and you've gone the full life cycle.
You even had your first your your own money,then you had a syndicated deal, then you had
high net worth friends of high net worthinstitutions.
When it comes to institutional investors, tellme about the sales cycle.
How long does it take for you to get a checkfrom an institutional investor from the first
(08:55):
time that you meet?
I would say nine to eighteen months.
It's a long process.
People have to get to know us and feelcomfortable with us, and then there's
underwriting that just takes time.
It passes through a lot of people, a lot ofdepartments.
We get people to come out to our offices,visiting us, interviewing our staff, looking
(09:19):
through our audits, looking through, we had aninvestor that pulled the deed of every purchase
and sale of assets we'd bought from thebeginning of time.
And then laying it out against our trackrecord, against what we had submitted as our
record.
So it's like very, very tedious stuff.
We've gotten used to it now, so nothing reallyshocks us anymore and we've got a huge database
(09:44):
of information and due diligence on us, butpeople ask us new questions all the time and
we're just used to producing back the answers.
And it's easy if you can be an open book, andit's easy to respond to those answers.
I remember the first time I got aninstitutional investor, it could be a brutal
process, especially in the beginning.
Absolutely.
I stayed away from it for a really long timebecause I felt like, you know, in my earlier
(10:09):
years, I didn't want to give up any control oneverything I was doing.
And it felt like very constricting.
It felt like all of a sudden you had a bossagain.
And then I kind of gave into it because at somepoint there's only so much you could grow.
And you can certainly have a model that is allhigh net worth individuals, but it is very
(10:30):
helpful to have some of those larger checks.
And so at some point I sort of gave into it,but it's easier when you have a larger staff,
when you have people to handle those kinds ofquestions and that kind of due diligence and
the kind of communication that it takes.
And if you're, you know, if you're only acouple people in an office, you just can't take
it on.
Was it easier after the first institutionalinvestor you could kind of point to them and
(10:52):
other people got much more peace of mind andyou kind of started with this, benefit of
doubt?
Absolutely.
Because people then get that confidence.
Someone else did their due diligence.
They had the confidence to come into this.
Nobody wants to be the first.
It's very, very hard to get your first.
So now putting on the hat of an institutionalinvestor, why would they be interested in C
(11:16):
class real estate?
Because it's where the pure alpha is.
You know, when we're taking NOI and growing itso greatly, it's such a different model than a
traditional value add model where you're tryingto tack on a little bit of rent, you're
maximizing that rent roll.
You know, we're producing returns that arelarge enough that it's hard to ignore it.
(11:40):
If you have a lot of very stable A classassets, you're producing single digit returns.
And probably on the lower end, the nicer thoseassets are and the more stable they are, the
lower your returns are gonna be.
And when you take deals that have so much roomin NOI, our average return to investors is over
(12:06):
37% IRR over the years.
That's because we're taking things that are sobroken and bringing them back.
On the other hand, you know, one might look atthis and say, well, then it's super high risk
and we don't see this particular strategy ashigh risk.
And the reason is we're sitting on hard assets.
We're sitting on hard assets that had realvalue that could be proved out just a couple of
(12:31):
years prior.
As soon as those assets are filled into marketconditions, those assets are producing very
significant cash flow.
And so for us, we don't look at them asparticularly risky investments.
Now there is a lot of work that has to be doneto get from point A to point Z, where we're
(12:51):
going to end.
Tons has to happen, but the asset's going tostand, it's already there.
And we are buying these assets so far below thecost of replacement that we're very comfortable
about the of them.
Real estate's known for 1031s for taxadvantaged structures.
Are there any tax advantaged aspects to thistype of strategy?
(13:11):
Absolutely.
We produce lots of losses in the very beginningof our holds.
So first couple of years, investors get tobenefit from those losses and those write offs.
And then we use cost segregations to alsoaccelerate those losses.
We've been benefiting off of bonusdepreciation, which may or may not disappear in
(13:34):
the next couple of years.
Ten thirty one exchanges are absolutely a greatway to be able to defer taxes.
It's hard to take advantage of all the time ina fund structure, but we have the ability to in
the very beginning of the fund.
And then, you know, our gains at the end arelong term capital gains, so different than
(13:55):
getting ordinary income.
So you're a solo GP in a difficult tounderstand asset class.
How did you go about learning what it took tobe successful?
It's trial and error, a lot of it.
You know, I taught myself a lot of what I didin the beginning, but there were lots of
(14:16):
helpful people along the way.
And I think I'm not a person that's afraid toever ask for help or to tell someone I don't
understand something.
It's something I tell my team all the time.
I learn every day.
We're very good at this office at doing onething.
We're very, very specific in what we do.
But even within that, we come across new thingsall the time.
(14:37):
And I have no issues in the middle of a callwith someone saying, have no idea what saying,
or I don't understand that term, or I've neverheard of that before, can you explain that?
And I think that that is very helpful.
There are things we try to do every day thatare new because it comes up and it happens.
We're gonna buy something where something hashappened that we've never experienced before.
And we'll learn from that.
And a lot of it is continuing to build anetwork so that I have people to to call on.
(15:03):
That's interesting because a lot of these quoteunquote dumb questions are simple questions.
Actually, most of them are not dumb.
I asked you, for example, about tax advantages,and, of course, I've heard about ten thirty one
exchanges, but you talked about costsegregation studies, which I've heard about.
I haven't done deep dive.
You talked about bonus depreciation.
So something that sounds like a very obvioustopic that you should know, you should know ten
(15:27):
thirty one exchanges and and real estate.
There's actually more to it oftentimes thanwhat we saw.
Yes.
The wonderful thing about real estate is thebasics of real estate are very simple.
And then you can layer on all thesecomplications, but it's easy to start to get a
grasp of it, to start to understand what it is,it's very tangible, so the concepts are simple,
(15:49):
it's just laying on the many, many layers ofcomplications that sort of start to add to the
complexity of a deal.
And you mentioned you have mentors in theindustry.
How did you cultivate those relationships?
I've always been great at keeping uprelationships with people that I buy from or
people that I sell to or brokers in theindustry or lenders industry.
(16:11):
And I use that the network of those people thatI come across all the time to ask questions to.
There's a guy who bought a portfolio from usonce and then I ended up buying a portfolio
from him once and he's someone I'll like everyonce in a while, I'll text him and say, Hey,
have you been in this market before?
(16:31):
What do you think about that market?
Or, you know, I have other friends who'vebought or sold in areas that I hadn't bought or
sold in or it's constantly sort of keeping up anetwork through working and then also through
business organizations or people you meet atconferences and stuff like that.
(16:51):
I'm actually not the most extroverted person,but I think it's important to constantly be
networking to be able to have that library ofinformation.
So there's a real estate aspect to what you do,but there's also the part of being a GP,
(17:15):
fundraising, investing, learning the fund side.
How have you become better at being a betterinvestor?
The hardest part of running a company isfiguring out your team.
How do you maximize your team's potential?
How do you get your team running at allcylinders?
(17:36):
And I think it's the people part that's thehardest.
The buildings are gonna throw you curveballsall the time.
You're gonna have a fire, you're gonna have acode enforcement come in, you're gonna have
problems that happen, but you have to have theteam that's able to take on those problems,
that's nimble enough to pivot and come up withnew ideas, but there's only so much you can do
on your own.
(17:56):
And so I think for me, the biggest learningcurve is always about the people.
How do I help foster our team?
What's been the biggest lessons about what kindof people you should work with, how to manage
those people, any people issues?
I read a lot about business management,teamwork, unlocking potential, and there is
(18:26):
Patrick Lencioni book about the ideal teamplayer and it talks about how people, the ideal
team player is someone who is hungry, humble,and people smart.
And for me, that is something that I would haveloved to have learned earlier because I can't
agree with it more.
(18:47):
I can't work with a team that is not hungry andhumble and PeopleSmart.
PeopleSmart cuts out the drama, but the humbleand hungry is so crucial.
We all have to just be ready to hear someoneelse's ideas.
And when I was younger, I thought that I shouldtry to be the smartest person.
(19:11):
And then as I got older, I realized it's waybetter if I'm not the smartest person.
I need to have people that are way smarter thanme in my office.
And I do, I have teammates here that are waysmarter than me in each of the divisions that
they work in.
And that's such a gift.
(19:34):
But when that comes with, when you get thosesmart people and that comes with people who are
humble so that you can have conversations andhave disagreements and be able to come up with
which strategy is the best and not care whosestrategy it was.
We're just looking for what is the beststrategy, what is the best answer and I don't
care if it's never my answer.
(19:55):
And I want all of our team to feel that sameway where, you know, we have a policy here in
the office that if two people disagree onsomething, they have to sit and take the time
to communicate to each other what they disagreeon and state their case, and then listen and
try to get the other person to understand themand try to understand the other person's side.
(20:16):
And if they do it well, without ego, almostalways, both of them will agree on one of the
ways that is better and that is the waydecisions should be made as opposed to the
person in the highest position gets to make thedecision.
Yeah.
There does seem to be a right answer for a lotof questions.
It's a little bit paradoxical to say that, butin terms of strategy or micro things, there
(20:39):
does seem to be a right answer in that if twopeople without an ego put all the facts on the
board, the answer most of the time, 90 pluspercent of the time is obvious.
Me and my partner Curtis, we we almostannoyingly get the same answer, and we've
wondered, do we both have the same blindside?
Are we basically systematically, like, foolingourselves?
We almost have a paranoia about why do we keepon coming up with the same answers?
(21:03):
Do we have groupthink?
Do we access the same information?
So we kind of live in this paranoia, but I dothink that for most topics, you take away the
ego, the answer starts to present itself.
Absolutely.
And when you and your partner are speaking oranalyzing the problem, do you both analyze it
in different ways and get to the same end?
For sure.
(21:23):
He'll say something like really brilliant,orthogonal that I never thought about, and then
sometimes I could add to that.
Or I might say something and as I'm saying it,I'm like, no, that's not true.
And then we both kind of laugh and I correctmyself.
So there's this kind of discovery and two mindswith different kind of data sets evolving on
(21:44):
this topic together.
Yeah.
That's the best way.
It's great when you're coming across it fromdifferent mindsets and still can get to the
same answer.
It's Another thing that I've started toimplement this kind of form of delegation where
if somebody is responsible for some somethinglike the editor of the podcast, I tell Wellrose
(22:04):
who runs the podcast, basically, I work foryou.
So you have a schedule.
You need to do three episodes a week.
You tell me what I need to do.
And it's a powerful frame both for Wellrose,but also for me because I don't have to be
doing somebody else's job.
I kind of think about it like I work for her.
I'm like the on air talent.
You tell me where to show up, you know, who I'minterviewing, and it's a it's a beautiful kind
(22:29):
of symbiotic way, and it's a very scalable wayto build an organization.
It's not something that you see that much inorganizations.
Absolutely.
It's so important to do that because if youdon't give someone ownership, then you end up
taking it back on yourself, or if you don'thave buy in from someone else and they don't
have their heart in it.
And it's something to constantly be remindingourselves as managers or leaders, but you have
(22:53):
to give that power to the other person to runtheir own show.
I literally in this situation to run their ownshow, but to run their own division, their own
ideas, their own projects.
And then you step in to, they get to ask youwhat they need and you step in to assist them.
I agree with you.
It was a way more productive method of gettingpeople to really rise to their full potential.
(23:18):
A lot of high achievers, they think they're,you know, control freaks and all these things.
But what I like to point out to them is theyhave somebody on their team that's really top
notch, and they have no issues delegating tothat person.
So the issue is not actually them or theircontrolling or their, quote, unquote, high
standards, which are an asset.
It's actually they don't have the right peoplein the seats in order to give up control to
(23:41):
them so that they could carry on that standard.
And ideally, you have people that have even ahigher standard in this specific domain.
And that's a really, really hard balance to getto that point where you figure you can trust
that person to lay everything off and delegateeverything off and know that it's gonna come
back the right way or that they're gonna takeit on the right way.
(24:02):
But if you don't give it off in full anddelegate it in full, then you're never gonna
see what can come back at you.
So it is a hard balance in the beginning whenyou're first starting to work with someone to
figure out what can they do and what is theirpotential and how do you take those risks with
them to delegate out and know that it's okay tolet go.
Where do you see your business in five, tenyears and how do you think about the
(24:22):
opportunity set and also organizationally howyou expand?
There is so much wonderful distressed realestate out there.
And so we have a lot of room to grow within theexact asset class that we're in right now.
We're doing exactly what we do.
And we love that.
In that sense, that growth is just more of thesame.
(24:45):
It's scaling what we already do.
And then when you ask about years out, what areour goals?
There are other things that we would like to doat some point.
So I think in the next five years, what wewould like to do is have a parallel fund that's
a debt fund that operates off of the same assetclass.
So it would be the same process up to thepurchase.
(25:07):
And at that point, someone else takes it onbecause you're just providing the debt.
So being the debt instead of the equity withinthat same C class distressed real estate.
And then there are a lot of deals that aregreat deals that we pass on because they're
just not distressed enough for us, that we'renot seeing those 30 IRRs, we're seeing 22%
(25:30):
IRRs.
And we would like the opportunity not to haveto pass on some of those.
And so in that ten year range, we would love tobe a one stop shop for multifamily investing.
I don't know that we're ever gonna be A classowners because I struggle to wrap my head
around concept.
(25:51):
D class is a whole another thing too, but thatmiddle range of multifamily, I think it's a
great place to be.
And I think we'd like to be even more wellrounded in that era, in that arena over the
next ten years.
We'll get right back to interview.
But first, we're looking for the next greatguest.
(26:11):
If you or someone you know is a capitalallocator and would make for a great guest,
please reach out to me directly atdavid@whispercapital.com.
What is c class real estate correlated with andwhat is it negatively correlated with?
Multifamily real estate's a really great hedgeagainst inflation, and so it fits really nicely
in the portfolio in that period of time forsure.
(26:35):
We have assets that, you know, the individualrents are about twelve months in length, your
rental period or lease period is twelve months.
So you can adjust to inflation really quickly.
Now, of course, the market is adjusting withyou, right?
You're not raising rents when everything elseis going down, but it typically when you're in
(26:56):
inflationary periods of time, you're gonna alsosee those rents go up as well.
And so you're in an asset class that can reacta little bit faster to something like inflation
than other asset classes.
So I think multifamily is a really strong pieceof a portfolio.
You also are sitting with a hard asset that hastangible value regardless of what's going on
(27:21):
with rents.
There is some inherent value in just the assetitself.
So you've got some stability in that.
But right now, I can't imagine a better placeto put my money than in, I mean, of course,
it's easy for me to say that when it's the oneasset class that I understand the best, but
(27:43):
when you see the market volatility that hasbeen happening, you know, year to date, and
we've seen our ups and downs and sure it's in agood place right now, but the market's been
unpredictable and you don't get thatunpredictability in multifamily real estate and
especially in multifamily real estate that's Cclass.
(28:05):
And the reason being is we're not fightingagainst the housing market.
We're renting to renters by necessity asopposed to lifestyle renters.
So there's always gonna be a need foraffordable housing no matter what.
It doesn't matter what happens to interestrates with the housing market because our
renters are not gonna go buy homes.
There are always going to be people that areworking class people that need a place to live.
(28:30):
And right now also when you do have inflation,when we do have tariffs, what happens is
construction becomes very difficult to put outnew construction because there's costs that are
unpredictable right now and very high rightnow.
And so low income housing is not being built.
And so it makes our asset class even moreimportant and even stronger at a time now.
(28:53):
So I'm a huge advocate of C class assets.
It's kind of like a staple good, like milk andeggs.
Exactly.
It's almost inherently a a hedge against a adownward economy.
What do you wish you knew before starting as areal estate investor twenty two years ago?
Oh, my gosh.
(29:14):
In some ways, was very lucky that I didn't knowanything or I probably wouldn't have done it.
So in some ways that allowed me to grow.
I just didn't know all the things that I shouldhave been scared of.
Ridley, I did take risks that were that I wouldnot take today, and they worked out well for
me.
(29:34):
So I wouldn't suggest that you take risksbecause you don't understand them.
So you might have not known all the challenges,call it, like, the hundreds of challenges, but
you also probably underestimated yourperseverance and your ability to go through
those challenges.
So the reason you may have not done it isbecause your brain would only see those
(29:55):
hundreds of challenges, and it it wouldn'tprice in your perseverance.
And as you went after these challenges, yourperseverance kept on going up, so you solved
these issues sequentially.
So if you had really understood your humanmind, you might have actually went through it.
But if you were just looking at this mountainof challenges without knowing that you'd grow
on that journey, it would seem insurmountable.
(30:17):
Absolutely.
So we got through 02/2010, we didn't lose anymoney for any investors ever.
We did fine through that period of time, but itwas so painful and it was very physically
painful too.
I no longer feel the physical pain of stressand I think that the reason for that is that I
(30:40):
have this intense faith that we will getthrough it.
Just like put your head down and keep workinglike you just said.
You know that perseverance gets you to theother side of it.
And having, if I would have had that faith backthen or that understanding that we're gonna
make through this, maybe that time would havebeen less painful.
I grew so much from that stuff too.
(31:01):
I'll tell you what I should have, what I wouldhave liked to account.
I studied economics, but it wasn't my major, incollege.
And so I came out of school without all of thetools I needed.
And so if I were to go back, I would havelearned Excel better, and I would have learned
finance better, and I would have, you know,taken different classes in college that would
(31:21):
have gotten me, that would've helped me learnin a more productive way, as opposed to the
remedial ways that I taught myself.
And I could be smarter today and I could bebetter at math and I could be better at Excel
and I could be better at these things.
So maybe that would be something that I wouldgo back and change.
Dare I ask, what are these remedial ways thatyou taught yourself these skills?
(31:45):
I didn't even know what Excel was, and I wassent an Excel sheet when I was trying to
understand what real estate was.
And I had this Excel sheet and I was likecopying, like looking in the cells at what the
formula was and then like copying it intoanother cell, into another sheet to try to
teach myself what Excel was.
(32:07):
It wasn't even a class.
I didn't even take a class on it.
I literally took a model and copied everything.
You're recreating the model.
So, yes.
And that was how I taught myself Excel.
So that's pretty remedial.
There had to have been a better way to do that.
I did the same thing with teaching myselfQuickBooks.
There was one night when I had a very smallstaff.
(32:31):
I was a couple years into it.
I had a bookkeeper who worked for me and onenight she just left and I thought, what am I
going to do?
I don't know what QuickBooks is.
At that time we were on QuickBooks.
I took one accounting class in college, I knownothing.
And I literally spent the night teaching myselfQuickBooks so I could run my own books the next
(32:53):
day.
And I did, but there's better ways to do thesethings, you know?
We don't have to do it that way.
We could take classes and learn things in adifferent way.
You know, I didn't have those luxuries.
What would you like our listeners to know aboutyou, Clear Investment Group, or anything else
you'd like to share?
We're super passionate about what we do.
The thing that I feel the luckiest, I guess,about my career in general and about our
(33:17):
company in general is we are able to creategreat returns for our investors, but naturally
we're impact investors.
And we didn't set out to be impact investors,but we are.
And it is, I would say the one thing that makesme always happy to come to work.
(33:41):
So I feel really good about what we do.
We change communities for the betterconstantly.
We support our tenants and the communities thatour tenants live in.
And that's without sacrificing any of ourprofits.
And I think that that is the most sustainableway to make a difference in the world.
When you get to do your job every day and youfeel like you're making a positive impact on
(34:05):
the world, it's it just feels great.
And so we love what we do.
It's like the opposite of traditional virtuesignaling, where you're signaling that you're
virtuous and you might be hurting somebody.
You're actually signaling that you'recapitalist and you're actually helping
somebody.
Yeah.
Yes.
We never talked about it or advertised itbefore until this thing called ESG became very
(34:29):
popular for a very short period of time.
I think now That's rebranded.
To the other side again, so we don't talk aboutit again.
But there was this like teeny little windowwhere some people would be interested.
I, you know, we would get on calls sometimeswith investors and, we'll go through our whole
pitch and our pitch never has anything to dowith ESG or impact or like, I would never until
(34:53):
two years ago have said that we're a womenowned business.
It's just that to me that was only going to bea negative, not a positive.
And so then like at the end of all of ourpitches, we'd say to people, you want us to
talk about impact investing?
Do you guys care about that at all?
And most of the time people say, no.
I would say, okay, no problem.
You know, it's very rare that anyone caresabout it, but it's not for anyone else that we
(35:17):
do it.
It's, you know, it just is what we do, andwe're proud of it and happy about it, but sort
of like the silver lining for us.
Well, Amy, it's been a pleasure to chat, andlook forward to sitting down very soon.
Likewise.
Thanks so much.
Thank you for listening.
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