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Show Summary
In this conversation, Matthew Karam discusses his investment strategy focused on multi-family apartments, emphasizing the importance of asset management and targeting physician investors. He outlines the role of a management team in property upgrades and the significance of investor education to attract more physicians to real estate investments. Matthew also shares insights into his dual role in acquisitions and building relationships with potential investors through webinars and personal connections.
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Investor Fuel Show Transcript:
Matthew Karam (00:00)
And so you really want to make sure that the maintenance team not only understands the request of the clients.goes to see them very quickly and actually works on them. We understand sometimes it takes a little time to do what maybe a tenant would want, but at least the tenant knows we’re working on it and they understand the hurdles we’re facing to maybe get that done for them. But they don’t feel like we didn’t hear them. And so really those two things, screening the tenants up front and handling the service requests from the tenants are really big important drivers in the operating
of the property.
Michelle Kesil (02:09)
Hey everybody, welcome to the Investor Fuel Podcast. I’m your host, Michelle Kesil, and today I’m joined by someone that I’m looking forward to chatting with, Matthew Karam, who’s been making serious moves as a multifamily apartment investor. So, excited to have you on the show today, Matthew.Matthew Karam (02:32)
Thank you for having me. I was looking forward to coming.Michelle Kesil (02:35)
Yes, absolutely. I think our listeners are really going to take away how you’re operating and identifying opportunities in your business. let’s dive in first off for those that are not familiar with you and your world. Can you give this short version of what your main focus is?Matthew Karam (02:56)
Sure. So we are focused on investing in multi-family apartments, as you indicated earlier. We focus on 100 units and up. And we really want to find value-add opportunities that allow our investment to earn a good return and be able to justify increased rents for not only our property, but they’re supported by the local market for those increases.So that’s what we focus on generally.
Michelle Kesil (03:32)
Awesome. And what markets are you operating in?Matthew Karam (03:36)
So we have a couple markets that we like. One is ⁓ Columbus, Ohio. That’s a great, it’s been a tremendous market for us ⁓ in growth. And we have some other outlying markets ⁓ that we look at, sometimes choose to get and participate in, such as Indianapolis. ⁓and some other areas like that that are smaller. But if the right opportunity presents itself, then we like to participate. But we try to stay primarily in the Columbus, Ohio area.
Michelle Kesil (04:13)
Awesome. What are some of the main keys that have been instrumental in allowing your business to run smoothly?Matthew Karam (04:28)
Well, there’s a lot of factors, ⁓ primarily. Number one, operators. ⁓ We really pride ourselves on doing a great job operating what we do acquire. And the importance of that is ⁓ properties can be mismanaged very quickly.whether it’s not screening the tenants properly. ⁓ Some asset managers ⁓ feel that it’s so important to have
a high occupancy rate that they really reduce that screening standard. And then they put in people that are really not the right fit for the property. And so consequently, then you have people that are not paying, you have an increased cost for evictions, you have an increased cost for attorneys to do that.
⁓ while you’re going through that process depending on the state you’re in, then you’re also losing rent. And when those people do get evicted, even though you do get some kind of judgment, nine times out of ten, those judgments are very hard to collect from. So we focus on making sure that we screen the tenants ⁓ right up front. And that’s so important. ⁓
And then secondarily, ⁓ one of the main reasons that tenants want to move out of an existing property is generally not because of the rent, ⁓ it’s because of repairs not being completed in their units. so they, ⁓ individuals that have an issue, the front door’s not closed or the screens broke out of the window or anything of those type of things,
your maintenance staff has to ⁓ jump on those quickly, in our opinion, or the current folks, when it comes to renewal time, they start looking at other properties and other opportunities because their needs are not being met. So for retention and for keeping people in your units, your maintenance team is critical.
And so you really want to make sure that the maintenance team not only understands the request of the clients.
goes to see them very quickly and actually works on them. We understand sometimes it takes a little time to do what maybe a tenant would want, but at least the tenant knows we’re working on it and they understand the hurdles we’re facing to maybe get that done for them. But they don’t feel like we didn’t hear them. And so really those two things, screening the tenants up front and handling the service requests from the tenants are really big important drivers in the
of the property.
Michelle Kesil (08:13)
Yeah, absolutely. The tenant level of satisfaction is so important. Are you personally managing the properties that you own?Matthew Karam (08:24)
⁓ We do hire a management team to do that. ⁓ We are very fond of a company generally called AMC Management and they’re a nationwide management company and they do a tremendous job in our opinion. ⁓we’re able to not only have AMC forecast what their expenses and what their income would be on a subject property before we buy it, ⁓ and then we also, after we acquire it, then the plan that we put together, pre-purchase, such as putting in new windows, putting in new refrigerators or…
kitchen appliances or cabinets or countertops or ⁓ any of the things that we decide that we need to do to upgrade the property. It’s so important that the asset manager is on board. That schedule of assets and replacement ⁓ has to be understood, number one. And number two has to be carried out with good efficiency. So not only do they have to carry it out under a certain timeline, but we need them to carry it out under a certain budget.
Okay, and they historically, they’ve done a tremendous job for us in those properties. And so, but it’s real important that when you do have, ⁓ when you hire asset management team, like them or others, that you outline exactly what repairs you anticipate being done in the property.
When those need done, what the budget is to get those done.
We also ask the asset manager to go out into the marketplace and actually get bids to do those repairs so that we have a very ⁓ good budget before the purchase. So if we are replacing ⁓ kitchen appliances, countertops, the cabinets in a third of the units as an example, we want not only ⁓ estimates from two or three contractors to do that, but we also want the timeline.
And we need that to be incorporated in the asset manager’s plans. And in meeting with the asset manager like that, that they have one individual that’s dedicated to make sure that plan is implemented and carried out. And so generally, we have a weekly meeting with that team.
⁓ in the beginning to make sure that the progress is being handled, that it’s in budget, and that the timeline is still working. ⁓ And if we see a problem, then we address it with them very quickly. ⁓ And if we have to send in a team of people, we will, just because that’s critical for our investors’ return, not only in the spend side.
but also the return side so that we meet our investment goals for the investors. So no, we use a third party management company and we have vetted them very well and they’ve done super for us over years.
Michelle Kesil (12:16)
That’s great. Sounds like you guys have, yeah, such a good support system. So you mentioned the investors that you work with. What does that look like for you? Are you partnering with other investors for the multifamily units? Would love for you to expand on what this partnership looks like.Matthew Karam (12:18)
Yeah.Sure, yeah. So in our particular case, ⁓ I used to own and still do.
⁓ medical malpractice insurance agency, where we focused on servicing doctors and hospitals for their malpractice insurance. So consequently, the investors that we reach out to are generally physicians and medical type personnel, maybe nurses and that type area. ⁓
to help give them ⁓ an alternative to the stock market, right? So many people, ⁓ the stock market liquidity is tremendous ⁓ and the stock market offers a lot of upsides, but it doesn’t make sense generally to put all your eggs in one basket. You really do want to diversify. so, and if you can diversify into real estate,
where it’s an asset-backed class. And it’s clear that many millionaires in history have all had real estate in their portfolio to make those retirement goals and aspirations attainable. Many of our physicians that we approach as investors have already owned some type of rental properties themselves.
Many times they have a duplex or a quadplex or a single family home and they’ve rented it out and they start to see some of the difficulties in managing it. ⁓
These docs do not want to take calls at midnight because the toilet didn’t work. They don’t want to get a call about this or that and the siding is this or my front door’s not latching or all those things that a manager does. And depending on the size of the investment, if you own a duplex as a doctor, you have to manage it. There really is not enough profit.
to go to an asset manager to have them manage it, and then you really make much of a return. So that’s part of our criteria by being over 100 units, we can hire one dedicated repair person to maintain that property.
We could hire one dedicated ⁓ leasing agent so that they can rent the properties out and have them on property. So when you start hitting 100 and up, there’s big economies of scale. ⁓ And so what we try to have our investors understand is that this is a passive investment for you. You don’t have to actively manage it. You’re not going to get calls at night.
This is what you like the asset class of being backed by real estate. Let us do the hard work. Let us do the heavy lift. And you just collect the checks. And so that’s what we want to do is offer to physicians that are interested in developing a ⁓ steady stream of income that allows them to contribute to that retirement.
build that nest egg up, but not have to actively do the renting and turning over units and painting walls when tenants leave and screening tenants and doing all those things. So the investors that we ⁓ go after or seek are physicians that generally have had rentals in their portfolio in the past.
And then they understand what we’re doing, they understand the service we’re offering. So that’s the clientele that we look for as investors.
Michelle Kesil (17:19)
Awesome, that is super cool. So you’re only working with physicians you’re not working with, other real estate investors.Matthew Karam (17:27)
No, we really just focus on physicians. Yeah.Michelle Kesil (17:31)
Cool. So what are you most focused on solving or scaling to next?Matthew Karam (17:40)
⁓ Well, our goal is to put in a investor education system to get more physicians to invest with us. Because we find some opportunities that unfortunately at times we can’t take advantage of them because we don’t have the investors. So…The biggest area we need to grow in is a good investor, not only awareness program, but an education program that allows them to understand why we selected this asset class, why it’s a great way to earn passive income, why it’s so important to get some, let’s say, passive tax ⁓ write-offs in the same breath. ⁓
and earn that good return, but without any active participation. And so we need to work on a system to better attract interest and educate those physicians of what we’re doing. So when an opportunity does come up, that we can go to them and say, hey, we found a good one. We have to screen about 200 to 300 properties.
before we find one that will really meet our needs and the needs of the investors. So it takes time.
Michelle Kesil (19:18)
Wow, yeah, absolutely. Sounds like a lot of work. So to understand your role better, are you just involved in the acquisition of the properties and the operations while the investors, ⁓ you know, work on the investing piece?Matthew Karam (19:24)
It is.Sure, so my background is in the past, was, we owned a registered investment advisory firm. Excuse me. And for our wealthy, we used to manage about $1 billion in our RIA. And so,
I have considerable experience in investing for wealthy clients in assets. And so what I try to work on, and specifically for me, is designing that investor scenario that works for them, makes it attractive for them, and educate them, ⁓ and try to bring that front end of the business in. ⁓ And my second role…
is really reaching out to potential sellers to see if they would have an interest in selling to us and working through them. And so primarily those are the two functions I serve daily. ⁓ And so that’s the investor side and on the acquisition side, identifying properties. ⁓ We have a team that does underwrite our properties. ⁓
and comes back and gives us an idea of how we value them, how we see them. Other investors also do. They have different criteria than we do. So even though one investor may look at a property and say it’s not a good opportunity, we could look at it and say it’s a fabulous one or vice versa.
we could look at it and say, no, we don’t like the numbers, we don’t like the age, we don’t like some of the other components, but another investor would. So that’s what makes all of the investments unique. So, but my role is in the investors and the acquisition introduction of the properties.
Michelle Kesil (21:38)
Awesome, got it. So when it comes to creating new relationships, growing your network, what are some things that have made the biggest difference for you?Matthew Karam (21:48)
Yes.So that’s what we’re, you know, I’m glad you asked that question, Michelle. ⁓ We’re still trying to figure that out, to be honest with you. ⁓ We have started originally with physicians that we wrote their medical malpractice insurance.
And we gave them opportunities just to participate in the financial side. And so we already had a relationship. They already trusted us. And so it was a good base to start and grow. ⁓ And so now what we’re trying to work on and figure out is, how do we make those relationships with the physicians that don’t know us yet and don’t trust us? And so we’ve researched, doing some webinars. ⁓
been effective at, we have a webinar that we host every Tuesday, ⁓ one time a month for new people. And we’ve had great attendance of those. ⁓ And so that’s one tool that we’ve been doing that has really turned out to be significant. ⁓ And so just this year as an example, ⁓ in those, ⁓
We’ve done nine webinars this year for 2025. And we’ve had about 540 physicians attend those to at least learn more about our opportunity. But we’re still trying to improve that process.
Michelle Kesil (23:33)
Awesome, I love that webinar piece, I think that’s such a good way to get the word out.Matthew Karam (23:39)
Yeah.Michelle Kesil (23:41)
Great. So before we wrap up here, if someone wants to reach out, connect, learn more from you, where can people find you and connect with you?Matthew Karam (23:51)
Sure. So our website is KMAcapital.com. ⁓And you can see some of the events we’ve hosted. We try to record some of them. If they’re really good, we put them up there. And there’s an email in there and a contact form and a phone number. And so if anyone’s interested or if anyone has a property they want to sell, it’s over 100 units ⁓ in our territory, we’d love to speak to them. So either through the website, ⁓ email, or phone call.
Michelle Kesil (24:28)
Awesome. Well, listen, I really appreciate your time, your story, and your perspective. So thank you for being here.Matthew Karam (24:37)
Sure. Thank you for having us and we really appreciate it and enjoyed it. Thank you.Michelle Kesil (24:43)
And for those listeners tuning in, you got value from this, make sure you’ve subscribed. We’ve got more conversations coming with operators just like Matthew who are building real businesses. We’ll see you on our next episode.
