Subscribe via:
Show Summary
In this conversation, Percy Nikora discusses his journey in multifamily real estate investments, focusing on strategies, market dynamics, and the importance of building relationships. He shares insights on navigating challenges, the significance of secondary markets, and the long-term perspective needed for success in the industry.
Resources and Links from this show:
-
Listen to the Audio Version of this Episode
Investor Fuel Show Transcript:
Percy (00:00)
You know, so if I think back to when we were getting started in multifamily and also, you know, when folks approach us, I always tell them it’s not it’s not a sprint, it’s a marathon. Right. In this sort of space. ⁓ If you if you try to move too fast ⁓ or, you know, I’m not discouraging people to take action, you definitely should take action.But if you try to move too fast or you say, I’m going to give it six months. Well, don’t expect the whole world to change in six months, right? Make sure that you can take steps towards a longer term goal.
Quentin (02:10)
Hello everyone. Welcome to the Real Estate Pros podcast. I am your host Q Edmonds and I’m happy to be here. Happy to ⁓ have another fantastic guest that’s going to allow us to peek through things from his lens in the multifamily space. I’m really focusing on like the secondary markets, but I’m gonna let him, you know, kind of dive into that, but I’m so excited. Listen, just because multifamily viewing for 10 years don’t mean this person ain’t been in the game.He’s experienced, knows what he’s doing. He’s been over 20 years in the business, so he knows what he’s doing. So I’m so excited to introduce you all to Mr. Percy Nikora. Mr. Percy, how you doing today,
Percy (02:50)
I’m welcome to thanks for having me.Quentin (02:53)
Absolutely, man. So glad to have you on. And Mr. Percy I’ll be honest, I kind of want to dive in. I would love for you to tell the people what’s your main focus these days. Tell people, guest, maybe a little bit of an origin story about how you got started in the business. And also if you can tell us what markets you’re operating in. I would love to hear that as well. So Mr. Percy, you had the floor.Percy (03:18)
All right, thank you. So at Penn Capital, you know, we’ve been around for around nine and a half years. And before that, as you alluded to, we’ve been personally investing in different types of real estate for over 25 years, I guess, getting old. ⁓ But, you know, as Penn Capital, about nine and a half years ago, some folks came to us and they want to invest alongside us. So we created Penn Capital as a vehicle to do that.We strictly focus on multifamily. We’ve done 15 syndications. We also have a $50 million fund. And our main focus is in secondary markets that have good job growth and good population growth. So those are the foundation elements that we look for. ⁓ And so, you our properties today are in Huntsville, Alabama, in North Carolina, between Raleigh Durham and Greensboro, and West Texas as well. We had initially started ⁓
investing outside Houston, but we saw those prices go up. So we sold that portfolio, gave a good return to our investors. So these are the markets. We also look at other markets on a regular basis, ⁓ Tennessee, Kentucky, where we find, again, secondary markets with not a lot of excess inventory.
Quentin (04:38)
I love it, love it, love it, love it. Thank you for explaining that. I really want to kind of dive into a little bit about strategies. ⁓ Now I would love for you to answer this two ways. I would love to know some business strategies that you use, core business strategies that you know is working for you. I would also love to know some personal strategies that’s working for you. You know, some people do meditation, gym, different things like that. But I know sometimes you need a little bit of somethingto ground you and kind of bring you back when things get a little hectic. So I would love to know some core business strategies and some core personal strategies that you feel like help you along the way.
Percy (06:04)
Sure. So on the business strategy side, you know, there’s a lot of different frameworks out there that you can adopt. We still view ourselves as a growing company, so you can almost view it as a startup, if you will. So some of your ⁓ folks who are listening may be familiar with EOS, so entrepreneurial operating system. So we did adopt that a few years ago. You know, so we use some of the key principles from that.There are other frameworks you can use in a similar fashion that allows you to take the limited resources that a small company would have and focus them and make sure that the things that you’re working on are not just the urgent things, but the important things. ⁓ And also, nobody has an infinite budget, ⁓ so making sure that you spend your dollar and your time in a wise fashion. So that’s what we implement on the business side.
On the personal side, I’d like to say I work out in the gym every day. You can see that’s not the case. That’s more aspirational, let’s say. used to, I had a back injury, so that’s my excuse. ⁓ But I do intend to get back in there. Mentally, yeah, I guess everybody has a slightly different morning routine, but I do like to wake up a little bit on the early side, just go through the list of things that I need to do.
Focus on what needs to happen. Again, identify the urgent from the important and sort of create your to do list for that day and maybe for the week.
Quentin (07:43)
Yeah, yeah. No, thank you. I appreciate that. And listen, I’m with you. You know, my birthday was last week and I’m just starting to get back at it, man. You know, like you said, you that’s what I’m trying to do. I’m trying to up routine, build up a routine. So trust me, I hear you, man. I’m right along with you, sir. Right along with you, I love it, man. So let me ask you, as you was building your business, have you faced any type of adversity, right? When you was building thepin capital? you, because things, deals go sideways sometimes, some things, sometimes things don’t go the way we expected. So as you was building, have you bumped up against some adversity over the years?
Percy (08:24)
I mean, you wouldn’t be running a business, especially a small business, you didn’t, right? And that’s really what, I guess, makes it fun too or challenging. And it’s not all about the money, right? It’s about being able to solve ⁓ challenges that come up. So I’d say on any given day, there could be a whole set of challenges. ⁓ Some of the things that come to mind, one of our first deals that we… ⁓that we had taken on as a multi-family. As we were under contract, there was a fire and about a third of the property burned down. So we had to work through that. So that was ⁓ quite literally a baptism by fire, I like to call it, ⁓ Where we went through that. We actually went through the purchase. That’s one of the properties that I said ⁓ we give a decent return to our investors even with that fire. And after that, we’ve had
multiple investors follow us. have repeat investors in different deals. Some markets always have their cycle, right, ups and downs. So we’ve had some really good deals. And when the market goes down, obviously right now we’re not selling the properties because we want to make sure that we, in our opinion, we’re just starting to come off the bottom of the market. So we want to get to a point where ⁓ we get
a good return for our investors and we maximize the return that the things do look good in 26, maybe 27. So we want to make sure we continue to operate the properties for that. And right now, since we’re at the bottom, we want to buy these high quality assets.
So right there, that’s another struggle finding good deals in the good markets. And we are buying things straight from the builders as well as newly developed properties. And one of the
properties we closed, ⁓ I guess about a year ago now, ⁓ it turned out the owners were a group of lawyers. we had those lawyers trying to sort of compete, if you will, ⁓ with our lawyers, with the lender’s lawyer. So you have a group of five, six different law firms in there. It’s not fun to negotiate with that.
But we were able to close that. was 192 unit deal in North Carolina. So we were able to get that through the finish line. So there are always these challenges that come up, but it’s really, do you have the right team in place? Do you have the right relationships in place to be able to execute and bring it to the finish line? I think that’s really what it comes down to, right? And if it’s a small group, you gotta be scrappy. Your advantage is your ability to pivot and react.
to these things that come up as opposed to a large organization might have a lot more resources, but their ability to sort of turn on a dime is limited.
Quentin (11:55)
man, I love that. I love that perspective, being able to pivot and react on a dime. And it’s funny because I was talking to somebody and he said, listen, he said, I’m not trying to be a big Titanic. He said, I like to be a jet ski. He said, because I want to be able to turn and pivot when I need to. And when you got this big Titanic, sometimes it’s hard to turn that ship. It turns very, very slow. When you got that jet ski, you can pivot in and out and react. And so I think that’sactually to your advantage and I think you know sometimes people have to understand that is that you know having your foundation knowing what you get control not getting in over your head sometimes that’s the best thing for you because like you said you can pivot and react and still be successful and so I love that perspective from me absolutely um Mr. Percy let me ask you sir what’s the next real goal for you man
Percy (12:44)
⁓ So like I said, we do think this is the right time to be buying some high quality assets. We don’t know how long that window is going to be open. So we are looking for ⁓ some deals. We just closed one in West Texas in Lubbock. three weeks ago, it was a 204 unit property. So we’re looking at some other stuff in that area as well as North Carolina, South Carolina. ⁓So we continue to do our due diligence on the right of properties. We also work with other sponsors. So a sponsor has a good deal, but they want to ⁓ have a more experienced team to maybe partner with them on the property.
Quentin (13:26)
Gotcha. Absolutely. I love how you talk about talking with people. I know you mentioned the story was funny story about the lawyers, kind of going in at it, but it seems like you surround yourself with good relationships. That’s what it seems like to me when I listen to you. So I would love to know your perspective when it comes to relationships. Do you work on building healthy relationships? Have healthy relationship impacted you in a positive way? What’s your perspective when it comes to relationship building?Percy (13:55)
Yeah, absolutely. mean, it takes time, right, to build relationships with not just when if you look at it from the entire lifecycle of the deal, obviously, you need relationships with brokers in the markets you’re working with. We also have good relationships with ⁓ government officials and other service providers like third party property managers in that market, even though we manage our own properties, we like to understand the perspective of the othervendors in that market. ⁓ Then, you know, when it comes to obviously lenders, have good direct relationships with lenders, as well as brokers, lending brokers. And then ⁓ obviously, investors, right, we have several hundred investors, we continue to build that investor base. ⁓ And then even institutional investors, so we work on the larger projects, we have some institutions that we work with.
who partner with us on the project. it’s about understanding ⁓ which partner you need
and what role they’re going to fill. So it’s almost like a puzzle, right? You just have to bring the pieces of the puzzle together. And even the institutional folks, some of them may like a certain type of project, others might like a different type of project. So you have to understand what their buy boxes or investment boxes and
based on the opportunity in front of us, we then take it to our other partners and say, hey, this is something that interests you. And ⁓ luckily, we’ve been able to make those connections.
Quentin (16:14)
Yeah, no, so then relationships are definitely very important, like you said, because you got to speak different, like different languages and nuances to different people to develop these relationships. And so, no, I hear that. So definitely thank you for talking about relationships because relationships is definitely everything in this space. And I think you so just so eloquently show why building the right relationship with the right person is so important. I love how you say even like a government official, right? Being active in the community, knowingwith demographic is serving and I love it. Now I think all of that sounds absolutely incredible. ⁓ Listen, Mr. Percy, is there anything that you want to say that we have not covered? Is there any kind of message that maybe you want to give that inspirational, educational, motivational? Like, is there anything that you feel like our audience could benefit from? I believe now is the time to say that.
Percy (17:05)
You know, so if I think back to when we were getting started in multifamily and also, you know, when folks approach us, I always tell them it’s not it’s not a sprint, it’s a marathon. Right. In this sort of space. ⁓ If you if you try to move too fast ⁓ or, you know, I’m not discouraging people to take action, you definitely should take action.But if you try to move too fast or you say, I’m going to give it six months. Well, don’t expect the whole world to change in six months, right? Make sure that you can take steps towards a longer term goal.
And then you’ll build on success, right? Once you start going, it’s like you’ll have that snowball effect, if you will. So don’t let the lack of immediate success discourage you. Just have a mindset that this is a long term game. I’m going to play that long term game. And I’m going to take some steps.
in the right direction. It might take a year or two before you see the fruits of those steps, but that’s the nature of the game. And in the meantime, what I would also suggest is partner with somebody who has that experience. That is probably the fastest way for you to get experience and get visibility behind the scenes. And it’s OK to tell folks, look, this is the value I’m bringing on the team or can bring to the team. I’d like to participate. ⁓
And initially don’t focus as much on what is your share of the GP, but more so what experience and what education can I get out of this? Right? Because think of that as your investment in time and effort, which will then be a dividends.
Quentin (18:44)
Yeah, I love it. Partnering with somebody to have the experience. I absolutely love it. I think that was a great message that you just said. And I thank you for giving it. I think it was just enough to maybe give somebody, kind of like a mind shift, you know, that’s listening to this, enough to see to say, Hey, maybe I can think about this a little bit differently. And so I appreciate you and thank you for sharing. Listen, if someone wanted to reach out to you, connect with you, learn more about what you’re doing,How can I reach out to user?
Percy (19:16)
Yeah, I mean, you know, the typical ways, mean, there’s LinkedIn, but probably the more direct way is if you go to our website, which is Penn Capital Group, that’s P-E-N-N-C-A-P-I-T-A-L group, g-r-o-u-p.com. And, you know, you’ll see some of our projects there. There’s a form you can fill out and get in touch with me. My email is [email protected], so feel free to email me as well. But any of those…You
Quentin (19:47)
Beautiful,beautiful. Well, listen, y’all heard Mr. Percy, you’ve gotten the value. Like I said, he’s giving you just enough to sprinkle and change your mindset. So Mr. Percy, want to thank you for dropping those nuggets. I want to personally thank you for your time. This time is definitely valuable. Thank you for your story. I greatly appreciate it. believe everybody has a story and I love when I get a chance to listen to other people’s story and let them shine that light, you know, like to our audience. I appreciate that.
I definitely appreciate your perspective, appreciate the way you think. Like I said, your nuggets was valuable and I thank you for sharing it.
Percy (20:23)
Well, thank you for this opportunity to share whatever little bit of information I can with your audience and keep them from making the mistakes that IQuentin (20:32)
There you go. See, you go. So listen, Mr. Percy, I thank you. And listen, y’all heard Mr. Percy, you can’t tell me you did not get the value from what he said and the message that he brought. So definitely connect with him, but you have to definitely make sure you are subscribed. You do not want to miss out on these amazing conversations that we are going to continue to foster from amazing people, just like Mr. Percy. So Mr. Percy, I thank you again.and everyone else, we will see you on the next time.
