Kevin Hemstreet, co-owner of South Coast Commercial Inc. and Rent Ready Inc., discussed the current San Diego multifamily market, highlighting the disconnect between perceived property values and actual values due to interest rates. He noted the impact of political challenges, such as tenant rights and Assembly Bill SB 721, on the industry. Kevin emphasized the importance of proper asset management and property management for long-term success. South Coast Commercial offers a three-pronged approach: property management, construction management, and brokerage. They also partner with Corefac International for national and international brokerage opportunities. Kevin shared his experience in commercial fishing in Alaska, which taught him discipline and work ethic.
Kevin Hemstreet's Real Estate Journey and Market Overview
Alexio introduces Kevin Hemstreet, owner of South Coast Commercial Inc., managing 1500 units in San Diego and co-owner of Rent Ready Inc.
Kevin shares his humble beginnings in real estate, starting with no intention of becoming an apartment broker but landing in San Diego, one of the best multifamily markets.
Kevin discusses the market conditions in San Diego, comparing it to the previous downturn and highlighting the disconnect between buyers, sellers, and perceived values due to interest rate climate.
Alexio and Kevin discuss the impact of interest rates on cap rates and the challenges buyers face in the current market.
Challenges in the Multifamily Industry
Kevin and Alexio discuss the political challenges in the multifamily industry, including tenant rights and the repeal of Costa Hawkins.
They highlight the impact of Assembly Bill SB 721 and the lack of rent growth during COVID, creating a challenging environment for entry-level investors and syndication players.
Kevin mentions the consideration of leaving California due to unfavorable returns and the liability of owning apartments.
They discuss the importance of property management and the need for a strategic partner to manage expenses and run apartments efficiently.
South Coast Commercial's Position in the Market
Kevin explains how South Coast Commercial is well-positioned to support clients in multifamily investments, offering property management, construction management, and brokerage services.
He emphasizes the importance of having a competent property management component to run apartments efficiently and the talent within their brokerage firm to help clients transition out of the market at peak pricing.
Kevin mentions Rent Ready Inc., which provides services to add value to properties and help sellers recognize the highest price possible.
He highlights the three-pronged approach of management, construction management, and brokerage to support clients in various investment endeavors.
Networking and Brokerage Services
Kevin discusses the importance of having strategic partners in other markets and South Coast Commercial's partnership with Corfac International.
He explains the benefits of having boots on the ground in other markets to offer off-market opportunities and real intel on local conditions.
Kevin emphasizes the competitive advantage of having a network of competent brokers to help clients establish a foothold in other markets.
He shares the success of their national and international platform in offering clients outlets in any market with absolute competency.
Advice for Aspiring Real Estate Investors
Kevin discusses the potential of part-time real estate investment and the importance of having a willingness to engage and get involved in the business.
Alexio shares his personal experience of using FHA loans to start with a duplex and later expanding to a portfolio of over 10 units.
He emphasizes the importance of a slow and steady approach and the availability of various lenders and resources to help entry-level investors.
Kevin advises aspiring real estate investors to start small, leverage government-subsidized financing like FHA loans, and build equity through capital improvements and raising rents.
Career Opportunities at South Coast Commercial
He emphasizes the importance of doing business with integrity and the foundation of success built on trust and respect within the company.
Kevin mentions the synergistic interaction within the company, allowing entry-level agents to participate in daily transactions and learn from experienced brokers.
He highlights the importance of being a practitioner and learning from the mistakes of senior-level brokers.
Kevin explains the nurturing environment at South Coast Commercial for entry-level agents, offering exposure to the business and a platform for success.
Challenges in Running a Brokerage Firm
He emphasizes the need for experienced teams to navigate the business and the importance of having a good advisor for guidance.
Kevin mentions the use of creative financing techniques like assumable financing and seller financing to get deals done in challenging times.
He highlights the importance of being persistent, knowing market trends, and having access to data to provide service to clients.
Kevin discusses the challenges of managing a brokerage firm, including the impact of market conditions and the need to stay agile and nimble.
Investment Strategies and Market Conditions
He discusses the importance of being in the know and having a trusted advisor to understand market conditions and exit strategies.
Kevin shares his experience of consistently investing over a 20-year period and the wealth generated from it.
He emphasizes the importance of having good guidance and understanding what constitutes a good deal in the short and long term.
Kevin advises that there is no perfect time to invest but that consistent investment is key to success.
Balancing Work and Family Life
He mentions the importance of having a supportive environment and the benefits of team-building activities like trips and outings.
Kevin discusses the importance of time allocation and balancing work and family time to avoid sacrificing family for work.
He highlights the need for a clear regimen and setting parameters on limitations to accomplish goals.
Kevin shares his approach to managing time with family and running two companies, emphasizing the importance of discipline and goal-setting.
Personal Background and Ethic
He shares his love for San Diego and the reasons why he considers it one of the greatest places in the world for multifamily investing and personal growth.
Kevin emphasizes the importance of the experience in shaping his work ethic and appreciation for the current opportunities in brokerage.
He discusses the lucrative nature of commercial fishing and the long hours and physical demands of the job.
Kevin shares his experience of commercial fishing in Alaska, which taught him valuable lessons about pushing limits and excelling under pressure.
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