May 2026 Meetup - Apartment Complexes & Passive Investors: Opportunities & Risks

All right, so I'm going to share my screen real quick. All right, welcome. We are going to be talking about apartment complexes and passive investor opportunities and risk. I'm excited tonight. Uh, it'll be the fourth Monday of every month where we get together and we're building relationships. Uh, last, uh, 15 minutes, um, We'll keep it up to networking, getting to know each other, and then we go into the topic, and then we open up for some Q&A and just casual conversation. We've been doing this for about 2 years now, and it's just been our way of giving back and educating people that are interested in the space, learning about passive investing. But what we try to do is cover, you know, what's working in today's markets, where operators are CM pressure, lessons learned from active deals, and obviously a key thing is protecting downside and shifting cycles. As shown on this slide here, 7 o'clock we start and we go into networking. 7:15 Central Time, we go right into the presentation, and then we have some open strategy Q&A discussions afterwards. A little bit about myself, I'm Wayne Courreges III. We have been growing CREI Partners since 2019. We've got $100 million assets under management and development, primarily in Texas, but we have some assets in Alabama and Louisiana. Our bread and butter is multifamily, value-add multifamily. I would say 80% or so is multifamily apartment communities. And then we have about 20% or so into other asset classes like RV, boat, and business storage. We have a build-to-rent community. We have an office retail. We're also doing developments in Bryan College Station with a multi-family, an office retail, and actually a hotel. So, but our bread and butter, as I say, is multi-family. Prior to CRI Partners, I worked with CBRE, a large commercial real estate company, for 16 years. And, um, yeah, just was eager to start my business and grow it. And, um, here we are today. Shelby, who's on this call as well, she leads our investor relations for our portfolio. She's been with us over a year now and, you know, really has picked up and enjoyed the aspect of getting to know our investors on an individual one-on-one basis, helping with K-1s and making opportunities come available for certain investment life cycles. So there's a few people that have joined this meetup for the first time. And so excited to connect with y'all afterwards and get to know. And also, this is going to be posted on YouTube and such. So there's going to be people who are maybe interested. So always like to introduce Shelby on our team. We have other team members, senior portfolio manager and institutional partnership. Person in marketing, and starting in July we'll be having an analyst on our team as well. So we're— we've built out a great company structure to take care of our investors and pipeline. So for those that are wanting to know exactly what we do, it's pretty— I try to make it very simple. I mean, we raise money to buy assets, we acquire those assets we execute the business plan, we distribute returns, and we implement exit strategy. So that's a very high level, very simple, but we do all the work. I know someone, uh, you know, on this call is, you know, has their own rental properties. And, you know, as someone who's had rental properties, you know, on my own before, it's like a lot of work. Um, and but, you know, we handle all the Triple Ts—tenants, termites,, and, and tenants. And so as we go, when we find opportunities, we implement the business plan, we distribute capital to investors, and exit when the time's right. So just a few slides, this is going to be pretty high level, and then I want to get off the slides and really just have further conversations. But we have really doubled down on apartment investing over the last several years. It was, well, Several years ago, I would say probably 2021, 2022, it was extremely hot asset class. Everybody was, you know, buying, focusing on it, um, and they were getting very frothy. A lot of people were overextending themselves on the debt, taking out bridge loans, a lot of variable rate loans, um, and it was just, you know, I was doing offers and people were outbidding me by, you know, a million, 2 million, or more to, to win the asset. And the whole idea was, you know, the market was just going to continue compressing with cap rates, interest rates, and all that. So what we have done always is been very strategic and conservative in buying properties, um, with the preface that like everybody needs a place to live. Like when I worked with CBRE, I dealt with office, retail, industrial. I like those asset classes, but from a multi-family standpoint, when things get tough in the markets, whether it was a, you know, COVID pandemic or recessions, you know, people always need a place to live. You know, they're, they're first to vacate their office or industrial space or retail, um, but at the end of the day, people need a place to live. So that was like why, number one, why I personally like apartment investing, because like no matter what the cycle is people need a place to live. The other thing is like there's a lot of supply in certain markets right now, you know. So as apartments, uh, as people were moving to Sunbelt states, you know, it really pushed the developers to start developing, you know, apartments. And so right now we're seeing a lot of supply in the market, but eventually over the next 2 to 3 years, if you believe that like these areas are going to continue growing, which we do, um, you know, that will also— the supply will be eaten up, right? And there's not going to be a lot of new supply coming on because a lot of things have tightened up. So personally, why apartment investing matters to me is it serves a need. You know, we have ability to take care of a community, people have a place to live. But on the financial side, it provides cash flow. And cash flow was what allowed me to go on a 9-month RV trip and just get back, you know, last week. And because we had the cash flow, you know, there's long-term equity growth, um, you know, it— there is diversification off Wall Street. Now a lot of people are doing extremely well, including myself, on stocks, and, you know, we're seeing those great returns, but we also know that that's not a forever thing and there will be a correction. And, you know, investors like myself who are long-term, like, I don't really worry about it as much. But reason I don't really worry it as much is because I have, um, cash flow from, you know, the properties that, you know, we own. So, um, but diversifying out of Wall Street I think is important, creating access to larger assets through syndications. A lot of people— I could tell my kids this, um, and we, we go up to— we were in Destin a few weeks ago, and I was telling, you know, I was taking my son out to Best Buy and explained to him, like, this retail— that retail center, you know, it's owned by, you know, a partnership that has multiple investors. Now, whether it's a REIT or an LP-type structure, whatever it is, it's likely not one person that owns that property. And so we can do that because they're syndications, right? And we can diversify. Even wealthy, wealthy people diversify their investments by not putting everything on one property, they spread it through other properties and, you know, do what's called a syndication. And that's really just pulling money together to buy properties, but, you know, it doesn't, you know, require understanding both upside and downside. And, you know, that's a big purpose of our meetup. So discussion points here, you know, why apartments attract investors, passive investing basics, income and cash flow potential, appreciation, equity growth, Risk in apartment investing, sponsor and operator importance, and what investors should evaluate. So this is a lot of discussion points. It's going to be very high level tonight, and then I'm going to get off the, the slides and we can, you know, have some really good discussions. But, you know, we talked about, you know, well, we didn't really define an apartment complex. So an apartment's anything like 4+ units. So, you know, what I love about, like, this is one of our properties in San Antonio, Stratton Park. You know, I can be, you know, 40% vacant and still be able to pay our debt service. You can't really say that, like, when I owned that rental property, um, a long time ago when I was in the Marine Corps. That rental property, when I didn't have a renter there for 6 months, like, that was a non-paying asset for 6 months. Where these apartments, you know, I could have 128 units, um, and of the 128 units, you know, I'm— no one wants to be 40% vacant, but you get the point where there's enough cash flow to pay debt service and all when you're buying right, and you don't really stress about that one-off person that, you know, when we have a vacancy. And that's a big part of this demand for housing. It remains consistent. It's, uh, we focus on growth markets, and so part of those growth markets do have a lot of supply. Like, that's I'm acknowledging that, but that supply will tighten up and it will turn into a— that demand will tighten, right? And there's— it's all because there's not as many new permits coming. We talked about multiple units, uh, reduced vacancy, uh, can produce both income and appreciation. I think this is a big piece here is, you know, as we push income Whether— if we think about every property as its own business, and you got income and expenses, net operating income, and this is before the debt service, but the net operating income, if you're able to increase expense or increase, uh, revenue, decrease expenses, or do a combination of both, like you're, you're increasing that operating income, which you're forcing the appreciation, which is you're forcing the value of the property. So the higher the income, the higher the value of the property. So this is one thing I really love, is that income approach. And it's not just buying a property and waiting 5 years and hopefully it, you know, has appreciation. So from a passive investing, you know, basic standpoint, you know, passive investing is those that are listening to this, to me right now, or a recording, like the passive investing, like a lot of that work happens before there's a deal. So if you're new to passive investing, or, you know, experience and just trying to meet good operators. What you're doing in that due diligence phase is like, that's the hardest part of your investment cycle, because once you've evaluated, you're educated, you're sophisticated on, you know, how to evaluate a deal and meet a sponsor, etc., then when the opportunity comes, either it works for you or you don't. From a timing standpoint, you're investing, and then from there you're doing what you enjoy on your day-to-day while we handle the day-to-day operations with our, you know, on-site management teams. So us as a sponsor, and there's, you know, a lot of other sponsors out there, but, you know, from us as sponsors, like, we have a senior portfolio manager, we'll have an analyst shortly, but we have on-site management team. And so we can execute the business plan for us so our investors don't have to. And then, you know, we all benefit from professional day-to-day management, and that's the onsite property manager. So we talked a little bit about this income and cash flow. But, you know, cash flow is the income remaining after property expenses. As I sort of illustrated earlier on a prior slide, income minus expenses is net operating income. And so what we're going to do is try to increase that net operating income by adjusting the levers, which is the income expenses, which will allow us to pay quarterly distributions on a, you know, as I mentioned, on a quarterly basis. But strong operations support stable income. So as, you know, occupancy strong, uh, cash flow, you know, people are paying their rents. I mean, this is— it's not— nothing of this is easy. So I'm not saying like, oh, we can just get the occupancy up to 95% and we're going to be cash flowing. Like, it's constant, you know, collecting rental income, etc. Like, it's— there's a lot of work to it, but through strong operations— and I like, um, that this is in here because it's, it's a really important aspect to passive investing— is just making sure your, your sponsor and your team has experience with, with this operations aspect. So occupancy and collections drive performance. Cash flow depends on disciplined asset management. So this is all part of the operations piece. Um, that's important. We've also talked about this a little bit. Appreciation is the increase in a property's value over time. I always like to say a forced appreciation is when we drive the net operating income as high as possible. And so we're not just waiting for the markets to, you know, increase over time, but it's more of that forced, um, appreciation. So there are risks in apartment investing, you know. A big risk that I've seen lately over the last few years is, you know, people investing, uh, with sponsors that just don't have the experience or the time to fully dedicate to the investment. Um, you know, sometimes they, you know, and I started, I had another job too, but I was in commercial real estate and I was, you know, juggling both my real estate investments and, you know, my day job with commercial real estate. But understanding like who the the person driving the day-to-day decisions, I think is extremely important. Majority of our staff at Sierra Partners, like, we are the decision maker, we are the ones driving the day-to-day operation. Um, but there's not a right or wrong to it, right? Um, there's great partners out there who have really great relationships with operators. It's just for you as a passive investor understanding, like, who really is making the decision, what experience, good or bad, do they have. And I think that will help you, you know, assess, you know, the risk on it, right? So don't assume that if somebody brings out a deal that they're really the decision maker, right? And again, there's not anything right or wrong to it. We have a lot of partners who join our team who are raising capital, assisting with asset management, etc. Um, but it's just understanding who really is making the day-to-day decisions, you know, looking at the underwriting and just treating— you know, most people that are investing in these deals are accredited high net worth individuals. Like, if you, if, if you're investing, you know, your last $50,000, like, this is good for you to learn, but this is not, this is not the asset class you should be investing in, right? This is, you know, over time you're getting into, into alternative investments, um, and you're looking at diversifying outside of, you know, Wall Street and your 401 and your Roth IRA. And you're looking to, um, to diversify out, um, because so at that point, I mean, you'll have a lot more understanding of a business, right? So income, expenses, profit. And just like with any business, if we have unexpected expenses, that can impact cash flow. And so understanding like the reserves, you know, what, what, um, happens if, you know, there's the one-off expense that, um, you know, that will happen because there's, there's always something that happens. These are, you know, '80s, '90s, you know, 2000s product. Something's gonna happen and they're being lived in, right? So understanding what the reserves, what their budget is— none of this is rocket science. It's really just understanding, uh, what the business plan is, what's their, you know, concerns on, you know, reserves or, uh, capital plan and just evaluating for yourself if it makes sense, like they have things covered. Not everything's going to go as planned either, so understand like what's their communication like. Are they, you know, providing, you know, at least quarterly updates, um, so that, you know, people know what's going on with their, their properties. So we talked about the sponsor and operator importance. I think this is huge. It's the jockey on the horse, um, understanding their experience, both good and bad. Like, if they haven't had a black eye, then they haven't been in real estate long enough. Like, this business is one that you will get hit multiple times, and that's okay. I mean, you get better and more sharper each and every time that you get hit. So, you know, having an operator or sponsor just share, you know, good and bad stories, like, I think that's just part of, um, you know, them opening up and being transparent about their experiences. So I think that's huge— communication during both strong and difficult times. You know, can they show you, you know, an investor portal and show, you know, the communication being sent on a regular basis? I mean, obviously downside protection is important too, that you want to hear. But ultimately, you know, the execution matters. So how do they How are they going to be able to execute? What team's in place? Um, if you're, if you're partnering with somebody who has another full-time job, that's fine, but understand like who on their team, on the general partner team, is, is really running, you know, day-to-day point with the management company. And so, you know, what investors should evaluate— just a couple more slides here— I think the first and foremost is, is the sponsor. Um, so I think that That is, you know, when things get tough, good or bad, you know, whatever, like the sponsor has got to have a lot of grit, a lot of communication, got to be able to trust that person. Um, the market, you know, a lot of times I just say, you know, look at the— look at your backyard. A lot of people live, you know, on these calls and all, in markets I wouldn't invest in, and that's okay. You know, you can be like, hey, I'm not going to invest in this market, so I'm going to learn about other markets, right? But, you know, if you are in, um, you know, areas like Texas, um, you know, Sunbelt area, like, I feel like those are pro-real estate, pro-landlord states with a lot of job growth and such. So maybe invest in your own backyard first, um, you know, understanding the business plan assumptions. And there's a lot of technology— we've talked about this on other, on other, um meetups where, you know, even like Google Earth, like going in and just scrolling in on the property. Are you seeing a lot of pawn shops? Any gas station with, you know, bars outside the window? You know, certain things, right, that can just give you an idea like, hey, is this a good area or not, without having to fly in and, and see. Um, but after you review the market, business plan assumptions, property, you know, understanding the fees, the debt hold period You know, if this again is, you know, your last $100,000, $50,000, and that's locked up for 5 to 7 years, like, is that, is that, um, gonna matter to you? You know, um, because it does. It— the days of like, you know, holding a real estate investment 2 years and getting back 100% return, I mean, that's, you know, that was just a short period of time. The reality is, you know, it's, it's a long game. It's, you know, a 5 to 7 year hold at least. And so you got to have patience with, you know, having your capital held up that long. And then what can go wrong and how risk is managed, you want to ask that from the sponsor and look at the deal. So I'm going to stop sharing my screen, but, um, you know, check us out at criapartners.com. There's a lot of information on there with podcasts, we've got monthly blogs, there's a lot of Q&A, um, so huge information, uh, and then check out Building Passive Income. This is a daily podcast, um, that we've, we've done, um, that's also added like an AI element to it. So it's a pretty cool podcast that's reviewed by us, and then C.R.A. Collin rolls with it. He's He's turning into a famous, um, investor education guy. It's pretty cool to see. And then of course, you know, Facebook, Instagram, YouTube. So I'm gonna stop sharing and really just see what questions, um, are from the group. And feel free to, like, you can put it in the chat box. Oh, I forgot toilets. You're right. So I— it was tenants, termites, and toilets. I think I said tenants twice. Okay. Great catch. Yeah, I was, um, so yeah, any questions? Uh, and if not, what I'm gonna do is I'll turn off the recording because some people just don't want to be recorded. Um, so you can either put, you know, message in, um, all right, so what I'm gonna do is I'm gonna stop recording. For those that are listening, if you want to email Wayne at CRIpartners.com again, Wayne@cirialpartners.com. We'd love to have the conversation and just build the relationship. And, you know, hopefully this sort of wets the mouth a little bit on, you know, investing passively. And then for those that are on the call, I'm gonna, you know, stop recording and then hopefully have some great conversations after.