Unlocking Multifamily Success: Robs Proven Strategies for Investors

Christian (00:00.878)
Hey everybody, welcome back to the show. Today we have a special guest, my friend Rob. He’s a multifamily investor based in Virginia. Rob and his team recently acquired and now manage a 24 unit property, a deal that closed in the summer of 2024. He is the capital raiser. Rob has personally secured over half of a $1.1 million needed to make this investment happen, but I’ll let him explain all the fun stuff. Rob, welcome to the show, my friend. Super excited to have you on.

Why don’t you just introduce yourself to the audience, how you got here and just your background,

Robert Pekarek (00:34.163)
Yeah, sure. Super excited to be here, Christian. Thank you so much for having me on the show today. My background, I’m a 2021 graduate of the United States Naval Academy. So just finished college about four years ago. Right after that, I went to graduate school out at Purdue University for two years. I’m a data scientist or industrial engineer by trade. And while I was out there, I was really into maxing out my retirement accounts. I had hit a point where I had already started maxing out my retirement accounts. And I was like,

how else can I invest in a way that’s tax advantaged? One of my buddies was like, hey, you need to start looking into buying real estate. So I ended up performing a house hack, I guess, while I was out there. So I bought a property and then rented out the rooms to my roommates. And then ended up graduating, getting my master’s degree in May of 2023 and moved to Hampton Roads, Virginia to start my job. And…

Christian (01:05.518)
Yes sir.

Robert Pekarek (01:30.065)
I rented out the property back in Indiana and I realized, actually wait, this is a brief intro. I’ll get into this later. Brief intro, I’m a multifamily investor, capital raiser on a 24 unit deal, which we closed on last summer and 27 unit deal out in Salt Lake City, which just closed a couple of weeks ago.

Christian (01:56.76)
Very cool, very cool, man. So, you know, my thing is like, why commercial investing? Like what really kind of just perched your ear? Because obviously, you know, there’s so many different sectors in real estate, so many ways to skin a cat, right? Is what I call it. Single family, whether you wanna go in section A, you wanna go into marinas, you wanna invest in the storage units, facilities. So I’m curious, I mean, what really, you know, sparked the interest to go all on this? And do you honestly, you know, with that,

Do you feel like the military, your background with that, really shaped you being able to come in, build strategic relationships with people that set you up for success?

Robert Pekarek (02:35.209)
Okay, so yes, two parts of the question here. I’m gonna address the first part first, which is multifamily. And the reason why I got into multifamily is because I bought this condo out in Indiana. And my plan originally was to buy a single family home every duty station I went to. So buy every couple of years. And then by the time I’m 15, 20 years in, I’ve got 10 houses under my belt. What I didn’t account for was the fact that even with a property manager,

you still have, real estate is not a passive investment. There’s still some active management involved in terms of managing the property manager. And then in my case, I currently don’t have a property manager. And I started getting, you know, tenant calls about the dryer being broken or, you know, having to replace the water heater. And then I’m scheduling people to come out to the property. And it’s like, I’m working a full-time job at the same time. So I was trying to figure out, I knew that if I continued buying single family properties, it would turn into

more work over time. So I tried to figure out how can I achieve the incredible returns that real estate offers while also not having to be actively involved every waking hour as a landlord. So that is kind of how I got interested in multifamily, was just, it’s an avenue to get those high returns while not having to worry about getting a call.

Christian (03:34.968)
and.

Robert Pekarek (04:02.198)
about water leaking from the toilet or something at 2 a.m. And then the networking piece was, would you remind me that question, Christian?

Christian (04:06.024)
Yeah, yeah

Christian (04:13.228)
Yeah, basically, how did you, do you feel like the military really propelled you as far as a benefit to be able to create strategic relationships just like you’re utilizing right now? Because obviously the military really fosters that right to build you up into that person, right? So do you feel like that had a huge help into you with your success in multifamily?

Robert Pekarek (04:32.327)
Yes, I definitely would say, so actually my buddy who got me interested in real estate at the beginning, him and I were very close friends while we were at the Naval Academy. And then he started using his VA loan and he started experiencing these great returns from real estate. So talking with him, that spurred me to get started. But what really helped was, there’s a podcast called, I think the active duty passive income podcast that I started listening to. And I started listening to another podcast called the, blue and gold, podcast, which is some real estate, some other things it’s about Naval Academy grads.

Christian (04:42.264)
Cool.

Robert Pekarek (05:01.801)
And then that got introduced to a group called the U.S. property network. And on there, there’s just a lot of people, thousands of people, mostly Annapolis or Naval Academy grads who are interested in real estate and learning more about real estate and who also are just passionate about helping other grads or other people just get involved in the space. And the thing that I’ve realized while working in real estate is this game is kind of all about networking. It’s all about who you know. I’m sure you’ve heard the saying.

Your network is your net worth. And I talk to a lot of people and I think that being in the military adds like a baseline level of camaraderie because you have some level of shared experiences between you and everyone else who’s in the military.

Christian (05:32.91)
That’s right.

Christian (05:43.278)
100%, 100%, I couldn’t agree anymore. Awesome, so what markets are you currently investing in and finding your acquisitions in?

Robert Pekarek (05:50.791)
Yeah, so my condo, that’s out in Indiana. And then last summer, myself and another team of Naval Academy and West Point graduates, we closed on a 24 unit property out here in Norfolk, Virginia. And then currently I’m on a deal, which is a 27 unit bunch of townhomes. It’s a townhome community out in Salt Lake City, Utah. So currently, I would say my focus right now is in the Salt Lake City metro area of Utah.

Christian (06:17.038)
Very cool, very cool. So how do you assess whether you have a certain buy box criteria, right? How do you really just review and see what multifamily deal is a good investment, right? mean, what key metrics do you kind of focus on when you’re analyzing a deal, you and your team?

Robert Pekarek (06:34.075)
Yeah, okay, so there’s a couple different things we’re looking at here. Obviously, most important is cap rates, right? Looking at those cap rates, how are those gonna change over the coming years? Because a lot of our projections are based on cap rates, and if cap rates fluctuate, that’s really where the largest amount of risk goes into a deal. So somewhere like, let’s say the Salt Lake City area, population growth is another huge metric.

the state with the most population growth over the last 20 years, the highest percentage of population growth, Utah. The state with the highest projected job growth over the next 10 years, Utah. The state that’s ranked number one by US News and World Report as number one best state to live, Utah. So looking at those factors and the fact that there’s just a housing shortage slash crisis in Utah, and then also if you look back,

the past two years because multifamily deals, right? We know there needs to be more housing in Utah. Multifamily deals like building those properties takes a period of years. And over the course of 2023 and 2024, there were not a lot of new construction projects started because interest rates were so high. So when you look at that, you realize there’s, I mean, there’s already a shortage and the shortage of multifamily properties in Utah.

is going to get worse over the next couple of years. We don’t have that baked into our assumptions on cap rates for the deal, but that is something that we believe is going to add significant value to any investment we’re purchasing in Utah right now. And it’s going to add value over the next couple of years. I’d say, yeah, population trends, which also, you know, job market trends, making sure that there’s enough, you know, jobs in the area for tenants to be able to afford the rents you’re trying to charge. So yeah, I think those are two really important factors.

Christian (08:25.614)
That’s awesome. Yeah, it sounds like there’s a ton of variables inside of this specific niche in real estate, right, and multifamily. So I’m curious, I mean, what do you see as are some common pitfalls that people are running into in the multifamily space right now? like, you can even talk about your own experiences as well. Maybe just some losses that you’ve had in the past or just some hard lessons that you had to learn. And ultimately, how did you navigate through those lessons?

Robert Pekarek (08:50.921)
Yeah, so I’m lucky in that I haven’t had a deal go bad yet, right? But I know that there are operators out there who have had troubles, especially because there are a lot of operators buying in 2022 when interest rates were low with the assumption that interest rates would remain low. And then when those interest rates bumped up and people were on bridge loans with the plan to refinance after two or three years, they couldn’t refinance into a loan at the same rate.

it broke all their financing and people are getting foreclosed on. So I know multiple operators that this is happening to. So definitely be very conservative with your underwriting and especially your interest rate projections and cap rate projections. Definitely very important.

Christian (09:38.158)
That’s great information. So I’m curious to know, mean, how did you build your skills to really be able to analyze your deals, know your numbers, right, and make smart decisions, right? I mean, obviously I know you, for those that don’t know, you do have some team members that you work with as well in your company, but I’m curious, did you seek mentorship to obviously get better at your craft with this, or why don’t you walk us through that?

Robert Pekarek (10:01.779)
Yeah, I would say for analyzing the deals, lot of the way I believe that you build success is by surrounding yourself with those who are more successful than you. So I just have a lot of people in my corner who know this stuff. I’ve listened to podcasts, I’ve taken courses, all of that. I’ve done my own due diligence, but I also always make sure to get second set of eyes on a deal. Get a third set of eyes on a deal, get a fourth set of eyes on a deal.

And if you’ve got four people who all are relatively well studied on this stuff all saying the same thing like hey that looks good Then you’re generally good. And another thing I would say is I have some extreme attention to detail because my thesis my master’s thesis was on Decision-making under deep uncertainty which is forecasting the chances of extreme events that can cause Risk, I guess is how I’m gonna simplify it. But so I have I have extensive experience from my graduate degree

in that specific field, I guess. So that has made me a little bit risk averse and very willing to model even unlikely tail end scenarios that could lead to a bad outcome. And I don’t want to underestimate the chances of those risks.

Christian (11:16.43)
100%.

Christian (11:22.062)
And I think that’s super important too. And I think that’s great, how you have it set up too is also even when you’re, obviously you do take on the credit of investors, you and I were speaking offline before we started recording. And I think it’s really just important to really set the right expectations upfront, right? And also know your numbers and be fully confident in that because as you know, especially what you’re doing inside of your industry, it is a relationship business, man. And your name is on the line.

everything’s on the line. it’s really important to make sure you’re fully confident and just doing the right thing day in and day out. So I’m curious, I mean, what kind of returns and incentives do you offer to your investors with your certain deals, you know, that you’re looking for funding on? You know, what makes things like that attractive to them? Like, what do you offer?

Robert Pekarek (12:07.849)
Yeah, okay, so the deal I’m currently capital raising for, every deal is different, right? But the deal I’m currently raising capital for, the 27 unit out in Salt Lake City, we have a couple different tiers. So it kind of depends on how much you invest. Minimum investment is 50K. That will get you, our projection is about a 16.5 % internal rate of return over a five year hold. For somebody who invests a minimum of 100K, I think our projection is about 17.5%.

Christian (12:13.292)
Mm-hmm.

Robert Pekarek (12:37.801)
projected internal rate of return over the course of a five-year hold with a 5 % preff built into that as well. And then for our Class A investors who invest 250k or more, they have an 8 % preff and they have a, I want to say it’s a 19 % internal rate of return projection. And the profit share, by the way, for those Class A investors is, after that preff is 80 % to the LPs, like to the investors.

20 % to the GP team. And then for the other two levels, it’s 75 % to the limited partners and 25 % to the GP team after those prefs are paid out. So the preff, for somebody invests 250K, that’s 8 % per year pretty much guaranteed. And then whatever on top of that is gravy. And those do per… Oh, was going to say those do… That is factoring in a…

Christian (13:26.382)
I like it. Cool man. go ahead.

Robert Pekarek (13:35.791)
worse cap rate at refinance slash at sale than we have now. So that’s with some brisk baked in. If cap rates are about the same, then we actually would be projecting higher returns than that.

Christian (13:49.486)
Very cool, very cool. what are maybe some things you look for also maybe in the due diligence phase, right? When you’re obviously taking down these deals to ensure it’s the investment that you’re looking for and this is what you’re looking to take on. Can you walk us through maybe your due diligence process?

Robert Pekarek (14:08.049)
Yeah, absolutely. So I do think that the most important part of due diligence is due diligence on who you partner with, who you choose to partner with. So how many deals have they done before? What were the exits on those deals? What rates were those at? And how much were they able to return to investors? Do they have a great reputation in the community? I think that is the most important due diligence is to make sure that if things hit the fan,

Will the other general partners in the deal step up and, you know, will everybody be like dig in or will some people give up? so that’s the most important due diligence is choosing who to partner with. outside of that, obviously, you know, you take pictures of every unit, you check with, you know, local zoning boards, see what’s permitted. And then also, obviously having a great, partner to do the construction and renovation work and getting all of that priced out beforehand, get your estimates.

Christian (14:40.547)
Yeah.

Robert Pekarek (15:06.517)
before you know closing on the property is then that mitigates the risk of you we close on the property and hate the construction cost double what we thought it was going to be because he’s in the back of the envelope cop calculation instead of talking with with someone about it forgetting actualistic

Christian (15:22.862)
Makes sense. Makes sense. Makes sense. So what is your approach to tenant screening, right? And ensuring you’re looking to get your best high quality renters. What’s your approach to that?

Robert Pekarek (15:35.973)
Okay. So to be fair on the deals I’m on, I do not deal directly with tenants. I’m not part of the tenant screening process, but I can talk for my single family property and my qualifications there are kind of what everybody else’s qualifications are. You check the credit score and have it over the phone or in person sort of interview, just to get a sense of the person’s character. And then yeah, you have a credit score requirement for sure. And just also see how they’re responding to emails.

when you’re asking for information. For our multifamily properties, I kind of leave that up to our property managers. They have their own system in place for that, and I trust them to operate that effectively.

Christian (16:18.778)
Yeah, that makes sense, mean, outsource that especially, you know, they’re the professionals as far as their realm, so this makes sense to optimize it that way. Very cool, man. What is one thing you wish you had known before, you know, your first property? Any lessons from that? Obviously, it’s worked out very well for you, clearly, but maybe, you know, is there one thing in particular that you wish you would have known before, you know, getting your first property?

Robert Pekarek (16:43.401)
Yeah. Okay. So I’ll talk a little bit about my first single family property. And I wish that I’d known a little bit more about the VA lending process for all my active duty military folks out there. It’s such a great benefit. My VA lender was, or not my VA lender. I reached out to a VA lender. They weren’t as familiar with the process perhaps, but what I would say actually is to shop around to different lenders. See where you can get the best rate.

Christian (16:49.102)
Mm-hmm.

Robert Pekarek (17:11.933)
But then also, I’m going to give my man JD Modrak a shout out. He’s based in Chicago. He’s a loan officer out there. So if you’re a veteran or active duty military, you need to use your VA loan. JD Modrak, I know he’s really skilled at that. And also JD Camin out in Charleston, South Carolina. But talk to somebody who understands the VA loan and can help you get set up. Because having a lender who’s kind of in your corner and also comparing different lenders to make sure you’re getting the best rate, super, super important.

Yeah, the other thing I would actually think about, this is for single family property as well. You know, I’m all for partnering with a great realtor. But if you do have the experience to do a deal without maybe all of the necessary handholding from a realtor, there’s great company out there. know the CEO, that company is called Vroom Brick, V-R-O-O-M and then Brick, B-R-I-C-K. And they offer

they’ll take the role of either the buyer’s agent or the seller’s agent for a flat 1 % fee instead of the typical 2.5 % to 3 % fees that most realtors charge. So I probably do that for my next single family deal as well.

Christian (18:22.766)
That’s awesome. It’s golden information, my friend. What would you say to somebody out there right now that is paying attention to too much of the news? Because obviously there’s so much stuff going on right now in the world, the economy, and things like that. they’re thinking, I don’t know if right now is the best time to invest in a multifamily. What would you say to that person to get them to ultimately change their mind and give them a new perspective on why right now is definitely always the best time to invest, in your opinion?

Robert Pekarek (18:51.337)
So I’m gonna push back on that a little Christian. I think that different people have different risk tolerances. And if for somebody, their risk tolerance is too low, then I would say, yeah, mean, maybe multifamily isn’t the choice for you. In order to get increased levels of returns, there are increased levels of risk and market forces certainly come into effect. However, what I would say is you’re very right that the best time to buy real estate, the best time I guess was 30 years ago, but you know what the second best time is? It’s right now.

Christian (18:56.632)
Mm-hmm.

Robert Pekarek (19:19.913)
Because it’s not like this housing shortage in America is getting any better There’s definitely a housing shortage and we’re not approving enough new permits not of new builds are happening So the increase in property values is going to continue and I wouldn’t say that you know It’s kind of a lot like the stock market, you know It’s not about timing the market and getting in and out at the right time. It’s about time in the market So getting into the market buying real estate and then giving it time to appreciate and grow and if you’re in something for the long term You’re gonna turn out a winner

Christian (19:21.047)
day.

Robert Pekarek (19:49.747)
The short term, maybe not so, but yeah, long term, pretty much everything goes up.

Christian (19:55.758)
That’s awesome, man. That’s awesome. I honestly wish we had more time because there’s so much more I want to ask you, my friend. for those that want to work with you, man, people that want to find you, where do they need to go? Where do they need to reach out to?

Robert Pekarek (20:07.389)
Yeah, sure thing. So I’m on Instagram at robthepeck. So that’s R-O-B-T-H-E-P-E-K. I’m at most platforms like that. If you want to reach out to me via phone, my phone number is 443-738-4929. I’ll that one more time, 443-738-4929. You can also send me an email. My email address is robert, R-O-B-E-R-T, and then peckpeck56 at gmail.com. Yeah, but those are good places to find me.

Send me a call or shoot me a text, send me an email or connect with me on social media.

Christian (20:43.726)
Beautiful. Well, you heard it here first, ladies and gentlemen. Be sure to reach out to Rob. It was a pleasure having you all, my friend. Just wish you nothing but the best in your future endeavors, and man, I really enjoyed our conversation today.

Robert Pekarek (20:54.823)
was awesome. Thank you so much for having me on Christian. Really appreciate it.

Christian (20:57.238)
Absolutely my friend all the best to you all the best. Well guys. Hope you enjoyed today’s show as always my friends I will see you on the next episode be sure to tune in take care