Multifamily Mastery: Winning 2025–2026’s Tough Market

Mike Hambright (00:33)
Hey everybody, welcome back to the show. Today I’m here with Tyler Harding from High Caliber Multifamily. We’re gonna be talking about like best practices, what’s working in multifamily. They have a lot of things that are going right in a season where a lot of things have gone wrong and members of the Investor Fuel mastermind as well, great family run business. And we’re gonna be talking about some things that are important to you if you invest in multifamily or if you’re thinking about it. So Tyler, welcome to the show.

Tyler Harding (00:56)
Thanks for having me on, really appreciate it.

Mike Hambright (00:58)
Yeah, excited to kind of talk about this today. And as a multifamily investor right now where not everything is going well or not, I know it’s a challenging time for a lot of investors, especially multifamily right now. But I’m excited to kind of dig in. You guys are doing a lot of things right. And I know that it’s going to be a good discussion here. So, hey, before we jump in, can you tell us a little bit about your business, your family business, a little bit about your background?

Tyler Harding (01:19)
Yeah, of course. So we are a family owned and operated business, High Caliber Multifamily. We’ve been in the game since about 2018. A little bit about kind of everybody on the team, right? So myself, I’m part of the acquisitions, underwriting and investor relations side. One of the best things about creating this family business is that no one was kind of given their role. Everybody had to go out, earn.

their own skills and talents and then come back and find a way to use it within the business. And so a lot of my background is actually in retail and I was a multi-unit manager for them. So basically they would send me out to places that were not doing super well. I would look at their P &L and quite a bit of the other paperwork that they had, see inefficiencies within the stores and fix them, which is why I really like underwriting.

It’s all about finding inefficiencies in how the operation is going and how can we improve upon those and make it more profitable. So that’s myself. My mother, Cyndee Harding, most people know Cyndee. Not a lot of people know me and Loric, but yeah, Cyndee, she had an accounting business for about 30 years. It was all about small businesses. So she would help small businesses with their taxes and how to increase.

their profitability and what ways they could shave off some expenses. And it was all about that forensic accounting. And so that’s her specialty is the asset management side. And my brother, he worked for a large transportation company and he worked in their credit department and he did exactly the same thing that my mother does. So his was all about forensic accounting and figuring out ways to improve efficiencies within their operation.

And so he is helping with the asset management side. Currently we have eight properties across three different states, about 740 doors. And that’s a day-to-day operations is really what Loric works on.

Mike Hambright (03:05)
That’s great. Yeah. And the truth is, is I think people are realizing it more than ever right now is the operations of a multifamily business, like being buttoned up, being super detail oriented is what’s allowing people to be successful. And for those that don’t run an operation like that, they’re having a struggle because there was a time where prices are, you know, basically inflation was pushing everything up. Everything was great. If you could raise money and you could find deals, you could make it work. But then when things kind

to get to a point where they’ve been in the last few years. I like to say accounting, well it’s not that I said this, but I believe that accounting is the language of business and ⁓ being very buttoned up on KPIs and operations is making a massive difference for operators right now for sure.

Tyler Harding (03:50)
Yeah, that’s honestly one of the biggest differences that we’ve seen just in the market in multifamily in general is back in 2008 through like 2015 and then 2019 to basically almost 2023, 2024, if you bought a multifamily property, you couldn’t lose. A lot of things just kind of the market pushed it. Everything was going in the right direction. Everything fed into it. And it was, was

performing the way that it should no matter who was running it. And so a lot of the times asset managers, it was the short straw of the general partners. Like, dude, that sucks. You have to be the asset manager. Congratulations. And then they just didn’t do anything and they didn’t have to. And now everybody’s finding out really quickly how important asset management is because you have to have somebody at the head steering this thing because it’s not going to steer itself anymore. It’s not the same as it was in 2021.

Mike Hambright (04:30)
Hahaha

Yeah, how do you define asset management as compared to property management? Most people would think of property management, but they’re not the same. So how do you define those?

Tyler Harding (04:54)
Yeah, well that’s a great question and something that a lot of people do have a hard time splitting the hairs on. But your property manager is exactly what that is, right? They’re there to manage the property. Their biggest thing is go out and get leases. And we need them to go out and get leases. And so what an asset manager does is we manage the property managers. So we want to make sure that we are helping them in every way possible. But we also want to take

every task off of their plate that’s not going out and getting leases and help them with that process. And a lot of what we do is give them ideas like, hey, we want to do a back to school giveaway backpacks, you know, type of thing. People pay rent on time. We give them a backpack for their kid with all their school supplies in it, a way to give back to the community, but also drive that community engagement.

And so whatever we can do to take stuff off of their plate, that’s really where we thrive.

Mike Hambright (05:48)
Yeah, but you’re also tend to be more centrally kind of managing the numbers, right? Because a lot of things that are happening at the property are, you look at it through a different lens, right? You’re more analytical, I would say, than what’s happening at the property management level.

Tyler Harding (06:04)
Yeah, and that’s really where the forensic accounting part comes in, right? Like, unfortunately, when you’re running multi-million dollar operations, a lot of people are like, a couple thousand dollars, $10,000 here slips through the cracks, accidentally double paying on an invoice or something like that. It happens all of the time. And so if you don’t have somebody going back through and double checking that work to make sure that that doesn’t happen,

Mike Hambright (06:22)
Mm-hmm.

Tyler Harding (06:28)
No one’s going to notice, unfortunately, because you’re working with such large numbers. But in the end, tens of thousands add up real quick to your investors, and we want to make sure that we’re protecting our investors.

Mike Hambright (06:38)
Yeah.

And talk a little bit about the difference. Like there are some, I would say the majority of larger operators outsource their property management to somebody else because there’s always, there’s massive property managers that have, do a lot of things really well because that’s their area of expertise. There’s some people that kind of bring it in house to try to manage it themselves. And it’s usually a lot harder than what they thought. You guys do manage your own, but you’re very buttoned up on the operating side. So just talk about like when it makes sense to outsource property management.

versus keep it in-house.

Tyler Harding (07:08)
Well, so we don’t have an in-house property management company and arm yet, yet it’s coming. We’re gonna do that eventually. But as of right now, really the process that we go through for property managers is more about a vetting process than anything else. when we’re looking at, sorry, did you have something? Okay, yeah, so when we’re looking at property management companies,

Really, we interview three to five property management companies per property that we’re looking at. And a lot of the times, we’ll do like one or two national companies that we worked with before. And then we’ll ⁓ interview smaller, more local property management companies depending on what fits the need of the property. But in the end, even if you’ve worked with a national property management company and you’re really happy with them, you’re actually happy with the regional.

And this regional is a different regional and you need to make sure that you’re going to be happy with that regional because they’re going to change everything on your experience. And so you want to make sure that they’re good also.

Mike Hambright (08:05)
Yeah.

So let’s talk about the current state of the market. obviously, I think one of the things that benefited a lot of people in the past was obviously low interest rates, inflation was going on. basically rents were going up, expenses were staying, I mean, ⁓ certainly financing expenses were staying low because of interest rates, which is a big part of the expense of running property, proper multifamily outfit. like, how would you explain the current state as compared to maybe where

was and where you think it’s going over the next year or two. know nobody has a crystal ball, but what are your thoughts?

Tyler Harding (08:37)
Yeah, I was going to say, let me grab my magic A-ball and shake it real quick. No, I mean, honestly, I think people got numb to interest rates, right? In 2020, interest rates dipped so low. And it was awful for our country. Like, we really shot ourselves in the foot when we did that. A lot of people don’t realize that where we’re at right now is normal. Like, this is where interest rates should be.

Mike Hambright (08:39)
That’s right.

Tyler Harding (09:03)
and probably will stay. A lot of people forget that in the 1980s, interest rates were in the teens. That’s high. That’s called high interest, you know? Not 7%. ⁓ And so I think a lot of people just need to be okay with interest rates staying around 5%, 6%, 7%. Like that’s the national average over the course of the history of the country. And never expect 3 to 4 % again. And that’s why…

Mike Hambright (09:12)
Yeah.

Tyler Harding (09:28)
Like we never do variable interest rates. We’re very, very boring and predictable on our loans. We get 30 year amortized agency debt, fixed rates, and just move forward with it.

Mike Hambright (09:40)
So to get that though, most value add buyers don’t get that agency debt upfront because historically vacancies might be a little bit high, but they’re gonna get it buttoned up. They need to get their rents up a little bit higher to justify that long-term fixed interest. So how do you go in with agency debt from the beginning? What’s kind of allowed you to get that and lock it in?

Tyler Harding (10:01)
Yeah, I’ll be honest, anytime I’m talking to my brokers, I do let them know that I’m looking for a unicorn because of the type of returns that we’re looking for and the type of work that we do. Because if it has, if it doesn’t qualify for agency debt, so it needs to be above 90 % occupancy for 90 days, otherwise you can’t do it. Now you can cherry pick what you send to Fanny Freddie to show 90 over 90.

Mike Hambright (10:07)
Yeah.

Tyler Harding (10:23)
⁓ And so as long as it’s historically been there, but right now it’s not, you can still get that financing. But if it’s historically been below that 90 % occupancy, honestly, we just wouldn’t chase it. That’s a lease up play and that’s, you you got to get bridge debt. And with bridge debt comes variables. And as an underwriter, I don’t like variables. We need to get rid of those and we need to be boring. And that’s what our investors really want is a garin-

Mike Hambright (10:30)
Okay.

Tyler Harding (10:50)
Well, you can’t guarantee anything, but they want a more stable return and that’s why they’re looking to you rather than the stock.

Mike Hambright (10:57)
Yeah, so let’s talk about kind of, you know, who’s winning and who’s losing right now. We’re not gonna call out specific people, but obviously it’s been a challenging time. There’s some people that are losing properties. There’s definitely, you know, probably a lot more foreclosures kind of coming one way or another. And banks and lenders are quick to pull that lever too, seemingly quick to pull that lever these days. But let’s talk about like, who is doing well right now? Just like, what do they do differently versus maybe those that didn’t?

Tyler Harding (11:22)
Yeah, and that’s an interesting question, right? And if anybody’s ever lost money in a syndication, it’s awful. And I’m sorry that that happened to you, because that would really hurt. And that’s why everything that we do is focused on protecting our investors. And so really, the people that we see that are not being successful right now still think it’s 2020, and that you can just buy pretty much any property. You can underwrite it sloppy.

And then in the end, you really can’t lose because it’s real estate and it’s going to go up and then we’re going to sell for a profit and then we’re going to be all hunky dory. And really the thing that kind of separates us from a lot of syndicators is our underwriting process. Like we are extremely and everybody says this, right? We’re extremely conservative on our underwriting, but we really are. Like we are not going to submit an LOI unless we are cashflow positive day one. And you know that a lot of our

Agency debt that we get has 24 months of interest only, which is important because you are doing a lease up play to a certain extent. You are bringing things to market value and that takes time. You can’t just kick in the door of somebody and be like, I’m going to raise your rent $400. But what you can do is when their lease comes up, you can say, hey, market rent is this. So we’re increasing your rent to $200 or by $200. And then next year we do have a plan to increase it by $200 more.

And then through attrition, if they decide to leave, then that’s fine. And we can lease it back up at market rents. but if they choose to stay, that’s great. We want tenants to stay in there. That’s why we primarily focus on a two bedroom or more, in our, in our complexes, because we do want people to have a more community driven thing. We want them to have, you know, good schools in the area. There’s a lot of factors that we look at, ⁓ when we’re underwriting that drive that.

community sense and ⁓ schools, crime rates, things like that. We need to make sure those are all great before we buy it. And I think a lot of syndicators start underwriting the deal and they’re like, hey, this looks great on paper. It’s good. But then when they look at the crime statistics, it could be the murder capital of the United States. And they’re like, ⁓ well, that’s great. And unfortunately, it’s just something that they didn’t look at.

And that’s something that we heavily focus on is the crime rate, schools, community driven things.

Mike Hambright (13:39)
Yeah, I think there’s always been people that are willing to kind of buy.

cash flow, they’re willing to buy like a class A property that’s performing really well and they’re just basically buying something that’s working well. then there’s the other class of people that are, truthfully, probably people more like me that I’ve flipped like hundreds of houses so I’m always looking for the distress stuff that is the phoenix rising from the ashes or could be, right? And we see the upside potential. And by the way, I think that’s fine, especially for single family houses.

because you have so much more control over that. But in multifamily, the operating costs will eat you up if the property’s not doing well or doesn’t come even close to your underwriting expectations. So talk about when you guys go in, and maybe what some others do too, of looking for a high quality property, but also still wanting some value add. You have to be able to add value to make more money for your investors. How do you balance not buying

a

turd with a lot of potential versus buying something that’s running so well that you have no opportunity to even improve it.

Tyler Harding (14:42)
That’s also a good question, right? Because if it’s running super smoothly, and man if the returns are good, I’m gonna buy it anyways. But yeah, a lot of the times if it’s a very, very good operating property and everything is up to market, there’s not a whole lot that you can do in order to improve it. And at that point you would have to buy it, hope that you can make the mortgage and then make money on the sale on the equity that you built on the back end.

And so really what the way that our process works is it takes me about a hundred properties to come through my inbox before I find like one or two that we’re going to even put pen to paper on. And then out of those one or two, it takes me about 10 to find one that we’re like, Hey, this is a really good property. want to submit an LOI on. We’re just extremely picky about what we do and how we move forward with it.

because it does need to be that unicorn that I said. So we need to see where we can come in and add value right away. And a lot of the times that is a loss to lease. They’re not up to market. And that’s something that we can do is come in right away, bring them up to market. Sometimes it’s a reno play where we want to go in and renovate about 50 % of the units. And the reason that we do 50 % of the units is because we want to leave 50 % for the next guy.

that’s going to come in and buy it from us. We have to have some kind of exit strategy and we’re going to bring them all to market rent. So we need to make sure that we leave some meat on the bones to say, hey, you guys do have room to increase using renovations. And here’s the proven track record of that. Another thing that really separates us from everybody else is our due diligence process.

Mike Hambright (16:01)
Yeah.

Tyler Harding (16:17)
We are extremely thorough in our due diligence process. So most of the time when people go out and do a physical due diligence They go out and they look at a percentage of the units 10 20 if you find somebody really aggressive, they’ll look at 33 % of the units our team is Committed again to protecting our investors. So we look at 100 % of the units and We have a tracker that we’ve built and we can tell you

Hey, in apartment six, I know what color their washer and dryer are. And they’re, you I know that they have stainless steel fridge and I know that they have carpet in these rooms and LPV flooring and the other ones. It’s something that we find important again for asset management because as we go through and upgrade these units, we want a very thorough tracking of how much money we’ve spent per unit.

how much we’re getting on our return ⁓ for our investment on reno-ing those units. And then when we go to sell, we can show them exactly what we’ve done to every single unit. And there’s almost no syndicator that I know of that can do that.

Mike Hambright (17:19)
Yeah, that’s great. when you’re buying, it wouldn’t be uncommon that a seller could handpick certain units to show you that are not necessarily representative of all the units,

Tyler Harding (17:30)
Yep,

absolutely. And that’s something that I warn people about all the time. Sorry, all the brokers out there. But the broker works for the seller. They do not work for you. As good of a relationship as you might have as somebody who goes out and talks to brokers all the time, in the end, they do work for the seller.

Mike Hambright (17:48)
Yeah. So obviously a lot of the value add players, which is a lot of the people that have been around for a while, always plan on raising the rent. Are you seeing decreasing rents anywhere right now? I I know that some of that’s happening on the single family side. It’s very market specific, but are you seeing decreasing rents anywhere right now?

Tyler Harding (18:07)
Yes, a lot of places actually, I’d say probably 50 % of the United States is on a decline on that. And that’s again, when we’re doing our market research, it’s very important for us to go out and look at historic trends for year over year market growth. And we’re only buying things that are in the path of progress. And so we are buying things in growing cities and growing cities for the most part.

are not seeing those decrease in rents. Stagnant or decreasing cities are definitely seeing a huge drop right now. And as single family homes switch to a buyer’s market instead of a seller’s market, which I just read an article yesterday about the gaps never been larger than it is right now, we start to see those trends move into the multifamily space too.

Mike Hambright (18:53)
Yeah, yeah, that’s great. Yeah, talk about that a Talk about markets that you’re looking at. You said you’re in the path of growth. So talk about that a little bit. you know, a lot of people, like I’ll say, I’m in Dallas, so it’s been challenging to find, I mean, I’m in quite a few deals. None of them are in Dallas because it was so hard to get deals here. Like, people were just overpaying. You pretty much had to…

Be okay with the assumption that values were gonna go up quite a bit just based on being in Dallas. So you had to of model out something that would not be typical. It’s hard to be conservative and buy here, right? But talk about like what you look for. Is it kind of outlying markets that are outside of a major metropolitan area or what are you typically looking for?

Tyler Harding (19:34)
Yeah, you tell me to spill all my secrets right now. Yeah, honestly, ⁓ we don’t really buy in major metropolitan areas. Just like you said, ⁓ Dallas is saturated. And a lot of people are willing to overpay because Dallas is growing and it will probably continue to grow for a very long time. so,

Mike Hambright (19:50)
Yeah.

Tyler Harding (19:52)
It’s just not one that would pencil for us the way that we want it to write a lot of people are willing to overpay because they will sacrifice the cash flow for a potential increase on the exit and So really like the areas that we’re looking in ⁓ number one has to be a landlord friendly state we have to be able to have some kind of say over what happens on our community grounds and So no, California for us

And then the other thing is, is we again, we look at markets, right? So there’s lots of different websites that’ll show you the trends of those areas. So like for instance, Tyler, Texas is our most recent acquisition. Tyler, Texas is the fastest growing city in the fastest growing state. And it’s the most slept on probably. And so now all you guys are going to go out and buy stuff in Tyler and you’re to be my competition.

Mike Hambright (20:40)
Yeah. Yeah.

Tyler Harding (20:42)
But ⁓ that’s really what we’re looking for is, you know, where are people migrating? And Tyler, is a really great example, right? Like a lot of people don’t want to be in Dallas. They want to be kind of close to a big city or in a tertiary or secondary market that can support a larger population, but not have to deal with the headaches of the traffic and all the other fun stuff that comes along with that.

But with that being said, we do look at a lot of outskirts of major metropolitan areas. So we’ve even looked in the Dallas-Fort Worth area. It’s just outside. So we make sure that we’re within about a 30-minute drive maximum from a major metropolitan area if we are looking in secondary and tertiary markets.

Mike Hambright (21:25)
Yeah, having been here for 20, 26 years now, it’s kind of funny like what the outskirts are now compared to what they were when I first moved here. you know, now where I live now used to be like on the outskirts, but now it’s 20 miles from the outskirts now, you know, it just keeps kind of growing and growing. yeah. ⁓

Tyler Harding (21:44)
Yep. And that’s

other hope of buying something on the outskirts of a major metropolitan area is that there is expansion, and now we’re in the center of it, and we get to take advantage of all the people that want to overpay and take the risk on the exit.

Mike Hambright (21:50)
Sure.

That’s right, yep, yep. So let’s talk about investor relations a little bit. mean, there’s an important, I think everybody that’s ever raised money would say that building powerful relationships are really important, but talk about maybe some kind of best practices for.

building relationships with investors, especially in light of the last couple of years where some people have lost money or they’re not getting paid or their properties in cash management or whatever. I think probably some investors that were in deals that were purchased in the past five years or more maybe are a little dismayed with multifamily as an asset class. But a lot of it comes down to the communication and the relationship you have with that person. So kind of share some best practices for investor relations.

Tyler Harding (22:38)
Yeah. so that’s something that we’re relatively new at, at High Caliber Multifamily is really the investor relations side. but I will tell you what I know, right? Like I am definitely a student of this craft currently. and you know, of all my crafts, I think we’re all students, but this one specifically more so than others. but yeah, some best practices with, with investor relations is, number one under promise over deliver.

I know it’s really tempting to come out and tell your investors, you know, we are projecting a 22 % ARR on this property. It’s going to absolutely crush it for you and get them excited about it because there needs to be that excitement for them to, you know, want to take your, take their money and trust you with it. But at the same time, if you do come back and pay them a 22 % ARR, you’ve met the goal.

And it’s a weird thing to think about, right? But they’re not excited because all you did was hit what you told them you were going to hit. It needs to outperform what you even tell them it’s going to do. If you give them more back in their pockets than they even thought was going to be a great deal, they’re going to come ask you, hey, when’s your next one? And that’s how we like to have our investors really talk to us. We like them to come to us and be like, I’m excited about investing in your next deal.

So that’s number one, under promise, over delivered. Number two, honestly, is having some kind of constant source of communication, right? Whether that’s a phone call, an email, a webinar that you put on. We do a newsletter every single month for all of our properties and all of our investors in those properties to let them know, hey, this is the cool stuff that’s going on at your apartment complex.

you should be excited about it too because you’re part of the reason that we’re able to do these cool things. And so that’s really been important to us also. And then my last tidbit, I would say, is ⁓ be honest. If something is not living up to the expectation, don’t sweep it under the rug. Don’t hide it. Be very transparent with your investors.

Mike Hambright (24:22)
Yeah.

Tyler Harding (24:39)
The moment that they sniff out the fact that you’re being sketchy or shady in any way, they’re never going to invest with you again. But if you’re just honest with them of like, Hey, this quarter came out a little light, but it’s because of these factors and next quarter is going to come out significantly larger because we did it here. They’re much more likely to be okay with a small dip in their mailbox money because they know around the corner, it’s going to be larger. And you’ve always been honest with.

And so be honest. It’s not too hard to be honest.

Mike Hambright (25:10)
Yeah, yeah, for sure. Yep, awesome. Well, Tyler, if folks want to learn more about you and High Caliber, where should they go?

Tyler Harding (25:18)
Yeah, you can always visit us on all of our socials. We’re on Facebook, we’re on Instagram, High Caliber Multifamily. And then also we have a website, so feel free to go there, highcalibremultifamily.com. Or if you can’t spell super well, like myself, it is hcmfllc.com. And you can even go to the Contact Us page. You can book a call.

Zoom call with myself, with Cyndee, with Loric, even with Lynn. So take your pick.

Mike Hambright (25:46)
Awesome. Well, thanks for joining us today. Thanks for sharing some insights of what’s going on in the world of multifamily.

Tyler Harding (25:50)
Yeah, thanks again for having me, Mike. I really appreciate it.

Mike Hambright (25:53)
Yeah, Tyler, great to see you, thanks so much. Everybody, hope you got some value from today. Multifamily’s been a great asset class for a long time, but it’s been a bumpy road too. So make sure you’re working with people that you trust, that communicate clearly, that have a proven track record as well. So, appreciate you guys for joining us. We’ll see you on the next show.