From Corporate Setbacks to Real Estate Success: John Casmon's $125 Million Journey

Are you one of the many busy professionals working in offices day in and day out? Do you wonder how some people grow their wealth fast, retire early and play on work days? Well, you're in luck because Ginny Bolling hosts this show Pivots of Prosperity where she interviews people that can do just that play on work days. Many guests have become financially free. She also interviews people that are on their journey and people that are in support roles like attorneys, contractors, brain brokers and others. Commercial real estate is the common element. She is on a mission to be sure. Busy professionals know they can own substantial commercial properties too, like apartments, self storage facilities and others, and not have to do the work managing them. Passive investing is the key. Syndications are the typical method. Tax write offs are some of the biggest rewards. Ginny and partners find the deals, build a strong team and business plan, then offer the investment opportunities to passive investors. New episodes are released every Tuesday at 12, so watch for new releases. If you want to get involved, let us know. You need to get pre qualified to hear about most deals. See the show notes for contact information.

This is Ginny Bowling with Pivot to Prosperity, the podcast brought to you by Pivotal Real Estate Investments, where we help investors build wealth and income through commercial real estate that also improves communities. And today we have. John, did you say you pronounce it Kasman?

Kasman, yeah.

Yasmine. Okay, here and I should have verified that first, but yes, thank you John. I'm glad you have connected and we want to hear all about your background if you would take it away.

Absolutely. Gen. Well thank you for having me on to give a little bit of background on me. I'm really a guy who started with a two unit building. You know, I was one of those people who read books and you know, listen to different podcasts and things like that and really knew real estate could, could help me but didn't really know where to start. And the one thing that was true for me is I was renting at the time. So you know, being a real estate investor was something that was important. So my wife and I, we bought a two unit building. We lived in one unit, rented out the other. We had left Chicago or Detroit. I was living in Detroit, working at gm. We moved to Chicago, bought this property and I was working in advertising. So I was in corporate America and slowly starting to build up. You know, my, my real estate portfolio went from that two unit building to a three unit building. And then I really saw that there was an opportunity to scale. So my wife and I talked more about it and tried to figure out how to scale this portfolio. And the next move I did was buying, I bought an eight unit building. Now the thing that happened there though was I had these big grandiose visions of building this huge real estate portfolio and leaving my, my W2 job at some point. But some point came a little quicker because my company I was working for ended up going bankrupt. So I found myself looking at my portfolio.

Are you talking gm?

Well, GM went through bankruptcy when I was there as well. So this is the second company that I was at that went through bankruptcy. So I realized, and that's what got me into real estate in the first place. And I just realized that, okay, real estate is the answer, but what I'm doing is not it. And eventually I stepped back, I tried to learn some more about different real estate strategies. And ultimately I came across a strategy which you're familiar with, which is real estate syndication. So since then we've invested over $125 million worth of apartments. We worked with hundreds of investors on those deals and we try to find cash flowing assets that have appreciation potential and try to continue to grow and scale and help other people in the process.

Great, great. Well, that's, that's the name of the game really, because there's so many people that don't realize that they can participate.

Right.

We were just talking about that before we came on. It's like deer in headlights when you tell them it's only like $50,000, right? Jump on, bet on board and you don't have to do anything.

Well, and it's crazy, right? You think about these large apartment buildings or even large hotels, and most of us, like you said, we would never even think about owning something like that. It's so far out of the realm of possibilities from what we have, right? Maybe you can buy a house, be a rental. You know, you could be a landlord, you could be a flipper. But to think about buying and investing in, you know, tens of millions of dollars of apartments just seems like a far, far, far object for people, right? So when you really understand how people are investing in these deals and how people, everyday investors like you, and I like the folks listening here, are investing in these deals now, it becomes very tangible. And when you understand that it's not just like shares of a company, like buying Apple shares, you actually are truly an investor, right? There's a private placement process you have to go through. You got to sign subscription documents, but you get all the perks of being an owner. And I tell you, all the time, like, you get to have all the benefits of being a real estate investor or real estate owner without the headaches of being a landlord. And that's really attractive for a lot of people because no one wants to really sit there and take those 2am phone calls about, you know, there's a water leak or any of those mishaps that take place. So there is a better way to invest, as long as you understand the right questions to ask and what to look for.

Absolutely. And there's so many people that, like myself, that have been in real estate for decades and. And never thought about doing it for yourself even. It's very embarrassing, actually, to realize that I wasn't buying at the level I should have been for my knowledge and background. So it's the same for the people that I, you know, my peers, when I explained to them how easy it is to get into, they're like, holy crap, I had no idea. And so it's still in its infancy. I explained it as like a new product going through that adoption curve, and it was really taken off with COVID and all because the performance of assets at that time was phenomenal. But. And it's hit the skids a bit with the interest rates and insurance rates, but it is, I call it the best thing since sliced bread because it's really easy to participate in phenomenal properties and you can. You can benefit so many ways with tax benefits and all. And. Yeah, so we're, We're. Our role is to get the message out, obviously. Right?

Yeah, that's it. Right. You got to let people know that this exists. You know, I am a firm believer of educating yourself. Right. So don't just listen to Jenny and I talk about this. But there's definitely some pros, but there are also cons. And I tell people all the time, like, for me, when I'm talking to potential investors, I also want to make sure this is right for you. And I'll tell you, one person is absolutely not right for. It's somebody who wants to be fully in control. If you want to make all the decisions, you want to be in control. You want to talk to the contractors, you want to know, you know, how much money we're spending on, you know, flooring and the cost per square foot. And you need to do your own thing because you're going to hate investing passively. Right. Because you want to take that control. And there are a lot of people who invest in real estate who enjoy the control aspect. So it makes sense. But it's really Important to be mindful of who you are as a person. Where's your comfort level? What do you enjoy? You know, can you build trust and, and work with someone else who has more experience and more knowledge than you? Or do you really want to be in control and kind of learn for yourself? But if you're not that person and you can learn more about real estate investing department syndications understand the right questions to ask. What to look for in these deals, what to look for in potential partners, then you're going to set yourself up for success. And it's a long game too, you know, it's not about one home run deal. The goal here is to help you build a portfolio that, that allows you more flexibility, more passive income and more time to do the things you enjoy doing.

Well said. I couldn't say it better myself. And, and, and, and, and especially the fact that it's the long game too because some people are all gung ho, they want to have all this influence to start with but they don't realize, you know, this is not just a few months, it's and key is the property management folks, right. And the asset management depending on your strategy. I mean, you know, if it's not turnkey, but yeah, yeah, there's some exciting assets out there.

Yeah. Well, I mean to your point, operations are key, you know, I mean at the end of the day any business comes down to operations. You can have a great idea, great product, great marketing plan, but you still got to go out there and execute. You got to be able to fulfill. You have to have solid operations. So having the property management team, having the asset management team in place who are knowledgeable, experienced, they know what they're doing, that's going to be the difference in having success and quite frankly coming up short. So you definitely want to make sure that you're finding folks who are both experienced and they're not experienced themselves, they're surrounding themselves with other experienced people. And it's not just the experience, it's also the aptitude. Right. Understanding how to navigate different situations, having a clear business plan, being able to identify and project challenges that may come up and how you're going to deal with those challenges. So if you are focused on those things and finding the right people, it becomes a lot easier. And going back to that person who's doing it by themselves. Part of the, part of what happens is people want to do it themselves but they're not running it like a business. So they're not pressure testing some of these thesis. Right. They're going in and saying, all right, hey, we're going to do X, Y, Z. But they're not bouncing that off of other people. So they're not getting feedback or other opinions. They're not getting different perspectives from other investors in the marketplace or other team members. So they're not being challenged. And then if something goes awry, or maybe they're just busy, they're on vacation, you know, they're not there to handle the issue that comes up. So there's definitely some risk when you try to go at it alone. But when you invest with others, especially others who have more experience, more. More knowledge of how to handle situations, that's going to set you up for success.

Agreed, Totally. So as far as a good example of something that might come up on one of your properties, can you describe how you were able to handle it as a team?

Yeah, absolutely. So, you know, we have invested in probably over a dozen syndication deals. Our very first deal we did back In, I think, 2017 on San Antonio, Texas. And this is a deal that I was not the lead. I actually partnered with the group. And this was great because I met these group, this. These folks at an event, at a conference. My wife really connected with one of the guys. We sat, we had dinner, talk. She's like, yep, I think they're great. Fast forward six or seven months and I'm talking to them. And they had a deal under contract, so we ended up partnering together. So we partnered with them on that deal. And I was able to come in and get some experience and be able to grow and scale and bring some of my investors into this deal. And we talk about challenges that come up. Well, that was my first syndication deal, so I didn't know what to expect and what not to expect. So there were things that came up in that process that were kind of surprising to me. So one of the first things is we didn't get the loan that we thought we were going to get. You know, we got a. We got a pretty good loan term, but it was just a little different. It changed a little bit later in the process. So that was one of the things for me to understand, okay, hey, we've got to recognize and communicate how these variables may impact returns. In that case, it actually made it better. But it was just important to know. We also had some things pop up on that where we had a fire in one of the units. So that took out, I think, that unit, and then the smoke actually impacted two other units. So we had three units that went down. So we had to learn what does that look like? You know, what does that mean from a safety standpoint with the residents? Do we do from a communication standpoint, filing an insurance claim? So there's a whole process of things that we had to go through there to make sure everything was, was taken care of. All the residents were fine, but also the investment was solid. And I'll give one great tip here for all of the investors listening. And this is true, whether you just have your single family house, your home that you live in, or investment property, make sure you have the right coverage. So many investors don't understand what their policies cover. And it's really, really important. As you know, you're in Florida. When we talk about insurance earlier, insurance costs, insurance premiums are going through the roof because there are a lot of claims. So you want to make sure you're not just skimping on that and trying to get your premiums low, make sure the proper coverage. In my case, we're looking at replacement cost, not replacement value. Okay, I'm going to say that again because some folks may not fully understand replacement costs, not replacement value. What I'm saying there is that if you go with the value, they're going to look at the property and say, okay, you, you know, this Property is worth $10 million. We're going to give you $10 million. If there's a tragic claim, you have to, you know, you have to rebuild it, that's great. But if it costs you $16 million to rebuild today, you're $6 million short. Right. So if you have replacement cost, in that case they're going to say, hey, the property may be worth 10 million, but in order to rebuild this, you need 16 million. So your coverage is going to be 16 million. That's a really big difference that folks don't understand and one that we've had to, you know, we have proper coverage on our properties. But that's a little detail that I think sometimes people may miss. Same thing with loss of business income. That's another thing you want to make sure if your property is down for six months due to a fire or anything like that, that you're getting, you know, payment or you're getting coverage for the loss of the rent that you would have collected over that six month time frame. So these are things that are really important to understand in your policies. And again, it's why you want to work with folks who have that experience and knowledge because they're going to know questions to ask that you might not even think about.

Absolutely One of the big things right now going on in Florida, especially after all these hurricanes, is there's a rider for. I forgot what they call it. Exactly. It's a difference in building code, though, because they might have a cost now based on that, but the code's changing, so it covers any gap so that by the time you roll around to pulling permits, it will cover that gap. Because now we're going by southern building code instead of Florida building code. Because now it's all the devastation in the whole Southeast, you know, the experiences grant from all of them. And anyway, so, yeah, that you're so right. That's. There's a lot to that there. And so to that end, maybe it's important to get at least one quote and advice. Know, talk to the insurance agent in that state, you know.

Yeah, yeah, I, I would go further and say you really want to have an insurance broker on your team so you can ask them specific questions to understand, you know, quotes and to help them understand the different coverage options. But also, just as you're looking at deals and opportunities, they, they're going to go out there and be able to tell you, hey, you know, with this kind of property, here are the concerns they're going to have. With that kind of property, they are their concerns. You can mediate, you can remediate this. You can't really do anything with this one. So you want to have some people on your team that have that knowledge. Because the thing, the truth is, you can learn as much as you want, but you're never going to be an expert at everything. So find those partners who do have that expertise and lean on them. Trust them to be the expert in that space. Take your time vetting people to make sure you got the right people and then trust their knowledge and expertise to help guide you along that way.

That's the book. Who, not how. Right.

That's it. That's exactly it. Right.

It's so important. Yeah, yeah. Well, great. And so you invest in different areas. Tell, tell where you like to buy.

Yes. We have really two pillars to how we invest. The first pillar is deals where we're going to be one of the operators. Those are going to be in the Midwest. Think Cincinnati, where I'm located. Columbus, Louisville, Kentucky, Indianapolis. Those are markets that we're focused on. I'm born and raised in Cleveland, so that's a market we're starting to warm up to as well, especially with a lot going on with, you know, supply coming online. We like the Cleveland market from that standpoint, but then we also have a second pillar where we partner with other operators that we've built these relationships with. Those are typically going to be the southeast region. So again, Atlanta, Georgia, Carolina markets. Sometimes we, we do look at stuff in Florida, but we, we, we've, we've only done one deal in Florida. We may or may not do more there. But I, I do like the Florida market and we've done a couple deals in te. So there we're again aligning ourselves with another operator that's experienced, that has the knowledge in the market. But we're going to come in and add value both from a capital perspective, marketing, market selection, also helping out with just back end operations and asset management.

Great, great. Well, I will tell you also I'm very connected with the apartment association in Florida and lobbying for different things and monitoring what's going on. We are getting some relief, we believe in this next year on insurance. So hopefully rates come down over the next year or two. But it is, it's slow incoming, it's make it, it's hard to make things pencil between our real estate taxes and that. But we don't have state income tax. So you know, it's kind of a, kind of a difference there.

But somebody's got to foot the bill, right?

Yeah. Right. Well, so we are at that point. I need to ask you, is there a pivotal person or event that has brought you either to where you are today or pushing you forward to some something?

Yeah, absolutely. So when I was in corporate America, I mentioned working at a job and having that job going to bankruptcy. The fortunate thing is I did not lose that job. The owners actually paid me out of pocket while they created a new company. But that experience coupled with the time when I was at GM and they also went through bankruptcy, it really forced me to say, you know what, I need to make this real estate thing real. And now. So I doubled down on it, did a lot of research. I ended up trying to do a flip project. That flip project did not go as well. But the pivotal moment that happened to me was I actually started spending more time online. I posted that I was trying to meet people who were in Cincinnati and they all tagged this guy named Joe fearless. So I was coming to Cincinnati because my, my wife's from here. I knew I'd move here at some point and I met up with Joe and had a great connection with him and he ended up becoming my mentor. Now this was back in 2000, what 16 or 17. So he bec my mentor and Joe went on to build a $2.7 billion portfolio. At that time, he had one property, he had one property that was a, a $7 million property. But I hired him to be my culture mentor because he clearly had a vision for what he was building. And I didn't even know what syndication was. I just knew that I couldn't keep waiting to save the money. I had to invest. And if I was going to partner with other people, particularly people that I knew, friends and family, I wanted to do everything I could to make sure I was removing as much, you know, knowledge gaps or as much risk as possible. And that meant bringing on a mentor. So hiring that mentor, particularly Joe Farles, was a key step for me. And I push people all the time to say you've got to have people like that in your life. You know, Joel isn't doing as much coaching now, but you know, when we talk to folks, we coach people as well. And that's one of the things you want to have someone who can look over your shoulder, help you avoid the big mistakes, but also reinforce that certain things are common. It's going to happen. Like you don't have to put your self worth in an investor's response. You know, if you call your brother and his brother says, oh man, I don't think you should do that. Not only am I not interested, I don't think you should do that. That could really crush somebody's, you know, self esteem and confidence. So you have to understand that hey, that person is not your investor. And that's okay. But that's why we also have a process to, to talk to people and try to find who we're looking to work with. So having that mentor I think is absolutely key for me. Joe Fearless played that role and he's a friend today. And I think it was really, really pivotal because I got to watch him build that, you know, he was guy who had one, he had one building, you know, himself. And I watched him go from one to the second building to the third building. And you know, fast forward, this guy's built a, almost 3 billion dollar portfolio. So that really made me challenge myself to say, okay, I just really wanted to, you know, I had an 8 unit. I was just trying to buy a 12 or a 20 and have a partner on that. That was my vision. And then I'm watching this guy building his huge portfolio. I'm like, wait a minute, you could do that? And in fact that led me to the conference, his conference where I met those partners and they were buying this 192 unit. And when I decided to partner, I went from an eight unit deal. The very next deal I did was 192 units. So it forces you to think bigger, to expand your possibilities. And when you do that, you truly start to embrace an abundance mindset. Anything can become possible. So for me, that was really pivotal.

That's terrific. Very well said. And, yeah, that's. That's Joe Fairless for mentor. Wow. I think it was 2018. I was at the beach with some girls, and I kept putting on my. My audiobook, and I think that was his book. In 2018, that was the first syndication. I'm like, holy crap, I need to be doing this.

Yeah. If you. If you have that book, I don't know if the audio version has it, but the print version, I have a. A testimonial in the beginning. So if you pull that book out, you'll see a testimonial for me in there.

Oh, nice. Okay, good to know that. Yes. Fantastic. Okay, well, so tell people how they can get in touch with you.

Well, we're. If you like podcasts, what you do, you're listening to this, right? Or at least YouTube videos or however you're watching this. We've got a show as well called Multifamily Insights, so you can check that out wherever you listen to your shows. And on top of that, you can check out our website. We have some great free resources on our website, including a sample deal package, 35 hacks to find the best places to invest, and some other tips on finding and vetting operators. So go to kasman capital.com and you can check out our resource tab.

So spell that.

Kasman is C A S M O N capital. So kasman capital.com.

Great. Okay, very good. And we'll put that in the show notes, of course. And great. Well, thank you so much for coming on. It's been fun.

Jenny, thank you for having me today.