Welcome to another enlightening episode of the Raising Private Money podcast! Today Jay Conner sits down with Jered Sturm, CEO of S&S Capital Group. Jered has transformed his journey from a humble apartment maintenance technician to managing a multi-million dollar portfolio in the real estate multifamily sector. Jered shares invaluable insights about investment strategies, raising private capital, and maintaining a balanced lifestyle amidst the challenges of entrepreneurship.
The Early Days: From Maintenance Technician to Real Estate Mogul
Jered’s journey began 18 years ago in Cincinnati, Ohio, where he worked as an apartment maintenance technician. Fresh out of high school, he and his brother purchased a six-bedroom house and launched a construction company, leveraging their skills in the trades. Initially, they utilized their resources to acquire and improve properties, building a solid portfolio without raising outside capital.
Their business model focused primarily on the advantages of compounding interest and long-term investments. A significant milestone was reached when they secured a cash-out refinance loan on eight of their houses, allowing them to reinvest in additional properties, setting the stage for their success today.
From Small Beginnings to Syndication: The Power of Networking
For the first eight years, Jered and his brother operated without external investors, relying on their resources and grit. However, a pivotal shift occurred seven years into their career when Jered recognized the potential of syndication. Encouraged by exceptional investment results that outperformed traditional retirement funds, they decided to share these opportunities with others.
Jered emphasizes the importance of treating borrowed money with the utmost care, viewing it as a representation of the time and effort invested by the lenders. This philosophy has earned the trust and commitment of investors, with 60% repeatedly participating in multiple deals.
Syndication has allowed Jered’s company to scale significantly, leveraging both personal networks and word-of-mouth to attract investors. Their approach involves contracting specific deals and presenting a comprehensive offering memorandum to investors, detailing the business plan, projected returns, and more.
Infinite Return Model: Forced Appreciation and Long-term Hold Strategy
A key strategy at S&S Capital Group is the infinite return model. Typically, projects are held for an extended period, around ten years, but investors often see their principal returned within 2-3 years due to forced appreciation. This involves modernizing units and executing strategic property management improvements. By doing so, the company can return 100% of the initial investment while maintaining ownership, creating a cycle of continuous, passive income.
The benefits are twofold: investors receive predictable cash flow and returns without actively managing properties, and the company gains financial advantages through economies of scale and operational efficiencies.
Balancing Business and Personal Life: An Entrepreneur’s Guide
Maintaining a balance between personal and professional commitments is a recurrent theme throughout the interview. Jered underscores the importance of intentionality in staying balanced across personal, professional, and spiritual life. He acknowledges that perfect balance is an elusive goal, but the continuous effort towards achieving it is essential for personal growth.
He advises entrepreneurs to leverage their strengths, whether in construction, sales, or analytics, as their unique competitive advantage in the multifamily space. Jay Conner complements this with his father’s philosophy of ‘dictate, delegate, and disappear,’ underscoring the significance of knowing one’s strengths and delegating tasks to maintain focus.
Contact Information and Additional Resources
For those interested in learning more about S&S Capital Group and connecting with Jered Sturm, visit their website at www.snscapitalgroup.com. Jay Conner also offers a free guide on private money in real estate, available at jconner.com/moneyguide, providing further insights into raising private capital.
Conclusion: A Testament to Patience and Strategic Reinvestment
Jered’s story is a testament to the power of patience, strategic reinvestment, and leveraging personal strengths to achieve business success. From humble beginnings to managing $200 million in assets, his journey provides invaluable lessons for aspiring real estate investors. Catch the full episode for detailed insights into multifamily investments and practical advice on balancing life’s multifaceted challenges.
10 Discussion Questions from this Episode:
- Investment Approach:
- Jered Sturm describes his investment approach as involving the presentation of an offering memorandum to investors. How does this method facilitate investor understanding and confidence in individual assets?
- Infinite Return Model:
- Jered’s strategy often returns the principal to investors within 2-3 years while maintaining ownership. Can you discuss the benefits and potential risks of the infinite return model?
- Investor Retention:
- With 60% of investors participating in multiple deals, what factors do you think contribute most to this high level of investor retention?
- Transition to Syndication:
- How did Jered and his brother’s initial 8-year period without raising capital set the foundation for their successful transition to syndication through personal networking and word-of-mouth?
- Leveraging Personal Strengths:
- Jered advises investors to leverage their strengths in the multifamily space. What are some examples of strengths in sales, construction, and analytics, and how can they be used as competitive advantages?
- Balancing Priorities:
- Jered emphasizes the importance of maintaining a balance between personal, professional, and spiritual life. Can you discuss the strategies and challenges involved in achieving this balance?
- Delayed Gratification:
- How did practicing delayed gratification, as explained by Jered, contribute to the long-term success of their investment portfolio?
- Economies of Scale:
- Jered’s focus on being owner-operators of multifamily assets underlines the importance of economies of scale. Can you explore the benefits and challenges of achieving these operational efficiencies?
- Mindset Shift in Raising Capital:
- What significant experiences shaped Jered’s mindset about raising outside capital, and how does this mindset influence his current strategies and investor relationships?
- Private Money Lending:
- Jay Conner offers a free guide on private money in real estate. How do private money strategies complement Jered’s investment approach, and what can new investors learn from integrating these methods?
Fun facts that were revealed in the episode:
- Jered Sturm and his brother bought a six-bedroom house straight out of high school, leveraging their skills in trades to kickstart their real estate journey.
- Initially, they didn’t use any investor funding for 8 years, relying on their construction skills to build a strong portfolio.
- They returned 100% of investor capital in 2-3 years while maintaining ownership, a strategy known as the infinite return model.
Timestamps:
00:01 Raising Private Money Without Asking For It
05:13 Small actions daily define pivotal life moments.
09:26 Found opportunity in multifamily real estate investment.
10:32 Respect capital as exchanged time and life.
15:29 Vertical integration boosts efficiency and investor returns.
17:15 10-year hold, force appreciation, refinance, predictable cash flow.
22:06 Tracking potential investors from experience.
23:53 Identify and leverage personal competitive advantages.
26:39 Entrepreneurs must adapt to maintain life balance.
29:44 Jay’s Free Money Guide: https://www.JayConner.com/MoneyGuide
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