Underwriting King Shares His Secrets to Conquering $400MM in Multifamily
Tejas Gosai
RE Fund Manager | LVPEFUND.COM | $400MM/3000+ Units Closed | REI.MBA Podcast Host
In this episode, i had the pleasure of speaking with Rob Beardsley, the founder of Lonestar Capital, a real estate investment firm specializing in multifamily assets. Rob has acquired over $350 million worth of multifamily real estate and is known for his expertise in underwriting and capital markets. In this interview, he shares his journey in the real estate industry, the challenges he has faced, and his strategies for success. Listen In.
Building a Strong Foundation
Rob's journey in real estate began when he met his business partner through a mastermind group. Despite being in college at the time, Rob and his partner shared a passion for entrepreneurship and saw multifamily real estate as a significant opportunity. Their first deal was a nearly $20 million project in Houston, Texas, which was an ambitious start.
Rob acknowledges that they underestimated the challenges of raising capital and the complexity of the real estate market. However, they learned valuable lessons and gained experience along the way. One key takeaway was the importance of building relationships with investors and delivering on promises. Raising capital became a central focus for their business, and their track record and reputation grew over time.
Challenges Amidst Market Volatility
The interview delves into the challenges posed by the unexpected rise in interest rates and the impact of COVID-19 on the real estate market. Rob explains how this volatile period led to a cautious approach, including pausing deals that were under contract to mitigate potential risks.
One of the significant challenges during this time was managing the disparity between permanent debt and bridge debt, which led to reduced cash flows and the need to pause distributions to investors. Rob emphasizes the importance of transparent communication with investors during such challenging times.
Vertical Integration and Market Focus
Rob shares the importance of focus in real estate, both in terms of market selection and operational strategy. Lonestar Capital concentrated its efforts primarily in Houston and later expanded to Dallas. This focus allowed them to build strong relationships, source quality deal flow, and establish an in-house property management team, which is key to their success.
Vertical integration was a critical component of their strategy. Rob explains how having an in-house management team provided greater control and transparency, enabling them to scale efficiently. Despite incurring initial losses on the management side, it allowed them to optimize property performance and build a stronger business foundation.
Balancing Work and Life
When it comes to work-life balance, Rob shares his simple yet effective routine. He wakes up around 8:00 AM and often works late into the night. However, he values having a routine that includes meditation, exercise, and social activities when possible. His motivation stems from building something larger than himself and creating a vision that inspires his team.
Rob's journey in real estate exemplifies the dedication and determination required to navigate challenges and build a successful business. His commitment to affordable housing initiatives also reflects the positive impact that real estate investors can have on communities.
In conclusion, Rob Beardsley's story serves as an inspiration to aspiring real estate investors and entrepreneurs. It highlights the importance of focus, building strong relationships, and adapting to market conditions while staying true to one's mission and vision. Click here to listen
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1yRob Beardsley 🔥