The FORT Podcast: Zamir Kazi – Founder & CEO of ZMR Capital – $0 to 1.7B of Multifamily Assets in 9 Years
Zamir Kazi started his career in Real Estate in 2013 after attending Florida State University buying and flipping duplexes. He formed Berkshire Property Holdings in 2014 (later rebranded to ZMR Capital) to acquire and redevelop multifamily Real Estate. In the past 9 years, as CEO of ZMR Capital, Zamir has acquired over $1.5B of multifamily assets.
He has been the recipient of Globe Streets 50 under 40 and is an active investor and board member of multiple early-stage companies. Zamir also contributes significant time and resources to several charities.
On this episode Chris and Zamir discuss:
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- How he started his career in real estate.
- How ZMR Capital creates value in the assets they acquire.
- How ZMR selects markets to invest in.
- Current state of the multi-family market.
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Topics:
(3:52) – Zamir’s background and career
(7:05) – What is it about Indian culture that wants their children to become doctors?
(9:17) – How were you financing as you began to do bigger deals and turn this into a firm with employees?
(11:22) – Did you manage properties yourself?
(12:12) – How did you convince people to give you a deal without a track record?
(15:09) – How were sourcing deals and why did you choose the markets you’re in?
(16:40) – Have you stayed 3rd party on Property Management?
(22:47) – What is an ideal Class A or B deal and how do you add value?
(26:02) – Do you outsource construction & asset management?
(27:24) – Do you send PM’s the same chart of accounts or do they each account differently?
(28:15) – Do you have a 90-day game plan after closing a deal?
(29:29) – How do you raise capital today?
(30:25) – How are you thinking about the market right now?
(32:52) – Is bridge debt still in the mix for you on deals you’re doing right now?
(34:29) – Are rents still moving fast?
(37:08) – Is there anything you’re seeing that could cause a major correction in MF pricing?
(41:10) – Why are people selling right now given market conditions?
(42:30) – How are you thinking about the tailwind given to MF by high mortgage interest rates?
(43:50) – What do you see for your business over the next decade?
Episode Summary
Zamir Kazi, celebrated for his meteoric rise in the multifamily real estate sector, joined Chris Powers on his esteemed podcast to dissect the intricacies of today’s real estate panorama. With an impressive portfolio boasting over 8,000 units valued at $1.7 billion, Kazi’s journey from a humble duplex in 2013 to a real estate magnate is nothing short of remarkable.
Challenging cultural expectations, Kazi, hailing from an Indian lineage, ventured into the world of real estate, lured by the promise of passive income. His initiation into the industry was marked by hurdles, particularly in securing financing due to a tainted credit history. However, resilience and astute strategies led him to leverage blanket loans, propelling him into the institutional realm in 2018.
Diving into his firm’s growth trajectory between 2018 and 2021, Kazi elucidated on their investment stratagem. Guided by demographic indicators, they concentrated on markets showcasing robust population, job, and rent growth. The Southern Belt, encompassing states like Florida, Texas, Georgia, and Arizona, emerged as their primary focus.
Property management, with its myriad challenges, formed a significant part of the discourse. Kazi candidly shared his experiences, emphasizing the pivotal role of third-party management in his operations. While the strategic direction is steered by Kazi’s team, daily operations, staffing, and accounting lie in the hands of third-party entities.
The post-acquisition strategies, especially for B-class properties, were meticulously dissected. Kazi underscored the imperative of augmenting exteriors and amenities, painting a vivid picture of rapid enhancements carried out within the first 30 days of acquisition. Renovations, aimed at justifying increased rents, are pivotal in offering tenants an elevated living experience.
Transitioning to the ever-evolving financing landscape, the dialogue underscored the challenges posed by rising interest rates. Bridge debt, once a popular financing mechanism, now stands diminished. Despite these hurdles, institutions like Fannie Mae and Freddie Mac have emerged as reliable financiers, albeit with capped loan-to-value ratios.
Rents, particularly in the industrial sector, continue their upward trajectory, albeit with market-specific variations. The conversation hinted at the resilience of multifamily and industrial sectors, particularly in the face of inflation. However, the unpredictability surrounding the Federal Reserve’s actions and the cap rate movements cast a shadow of uncertainty on the horizon.
In conclusion, this enlightening conversation with Zamir Kazi offered listeners a panoramic view of the multifamily real estate sector. From the nuances of property management to the challenges of financing in an uncertain climate, the episode stands as a repository of invaluable industry insights. For those eager to navigate the multifaceted terrains of real estate, Kazi’s expert reflections serve as a beacon, illuminating the path ahead.
The Fort is produced by Johnny Podcasts