I’ve had massive learnings from 15 years of owning multifamily assets, 10 years of syndicating. Anyone who sticks it out for more than a few years does.
But the learnings that have brought me the best outcomes weren’t the how-to’s, they were the experiences with people. Will this person do what I need them to do. Will I be happy with our relationship one year from now. Do they have the right qualities.
We obsess over so many different details about the purchase and operations of our investments and we become experts. Experience drives expertise. Thousands of hours, successes and failures, and if we’re still at it after all of that, we can say we’re experts.
Our expertise, though, is not so much with a specific skill like underwriting or investor reporting, but with knowing who is going to get us to the finish line, who is going to create solutions, who has our best interests at heart.
This is the most important skill. Understanding people.
It is for this reason that I’m shifting my multifamily investing focus from sourcing and leading my own deals to working with other experienced investor groups. They see more opportunities than I can. They’ve proven their success with a track record that includes full cycles with positive outcomes. They have scaled.
I still love doing deals with small teams and will continue that but if you’re an investor, look for opportunities from teams I’ve partnered with, teams that I’ve known for a long time and built trust with, teams that I’ve qualified through extensive research and experience.
Teams who deliver income and appreciation, reliably.
Market update
Murfreesboro, TN – Very few cities in any state have as many key metrics which have risen as sharply as Murfreesboro’s. For so many decades the city has been just an outpost of Nashville – a sleepy agricultural community but comfortable. A vibrant university, Middle Tennessee State University, now one of the largest universities in Tennessee with a student population of 20,000, helped foster growth through the late 20th century.
Start with its location. Although technically part of the Nashville MSA, there’s enough distance to Nashville, 34 miles, to help it develop a culture of its own. It’s not the urban metropolis that Nashville has become. It’s not the country music capital either. But if you live there, it’s a short drive to all of the riches that Nashville offers.
This is why its population has grown 93% over the last 20 years, to 168,000. Unemployment remains an incredibly low 2.5% as of March, 2025, compared to 3.6% for the state and 4.3% for the U.S. Jobs growth, including the Nashville MSA, has not been quite so robust over the last two years but that has been attributed to anemic growth in the U.S. economy as well as slower than expected growth in commercial sectors.
We generally like to see a good blend of public and private sector employers in a metro area to ensure diversity and for the opportunity to see outsized growth. We love to have universities, extensive health care organizations, strong schools, stable government employers, even a federal facility or two such as a military base, but when an area has healthy private sector industries, those help to attract others and build the growth momentum that bring investors.
Murfreesboro is succeeding in building this momentum, which can be clearly seen with its population growth. Employers like Nissan, Amazon, and Taylor Farms are here for the long term. Their industries are healthy and the employment base is building skilled workers that perpetuate growth.
Don’t look for the stats to show rent growth, though. Rent growth is a lagging indicator that leads to bad decisions. When we see it, builders see it too and with over-supply comes rent stagnation. Look around. We have just experienced it in some of the most robust metro economies in the U.S. People moving to the area from all around the U.S. but can’t keep the property full, can’t get a rent increase to stick. Thank builders who saw an opportunity with low interest rates and high growth. Those are all very unmistakable positive changes for a city, though, but they make life difficult for someone who invested in multifamily.
Median household income of $78,000 is very healthy, up 2X from $39,000 in 2000, as is home values averaging $419,000, up 3.5X from $118,000 in 2000.
Rent growth will catch up if population growth is strong, employers are healthy, and the city and state’s regulatory structure encourages investment. Like Murfreesboro.
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Finer Points of Multifamily Properties Should you hire a tenant
My rule has been No. The tenant doesn’t do the job well and you have to get someone else to do it. Then you have an unhappy tenant and unhappy tenants say malicious things to other tenants.
It’s never that simple, though, and there could be several advantages to hiring someone already living in your apartments. They know the property, they become a familiar face who is there nearly all the time, they become an evangelist, they are an example for other tenants who might want to take on an on-site job, and they have a personal interest in improving their quality of life.
You first have to define what you need. Don’t offer them a make-work job because they’re having a hardship. Their job should be a solution to your problem, not theirs.
What is not getting done well at the property that needs to be improved? Is there trash on the property? Are windows or blinds broken? Do you have flowers or bushes that need to be watered or groomed? Do you need an ambassador or concierge or ombudsman, someone who helps other tenants with minor tasks like taking out the trash?
Those are all worthy jobs at an apartment, depending on the size of the apartment.
If the apartment complex is large, it might be confusing for tenants to know who to call for what they need. If they have a fellow tenant, they can relate to that person, knock on their door, and get a question answered. They like that.
What about letting a maintenance person or an on-site manager live on site? That’s a bigger risk. Those employer-employee relationships have a way of falling apart. You might have a high degree of confidence that you’ll get along great with this person, but think of what happens when they’re not doing a good job.
Mitigate that risk by having a tough conversation with them up front. Tell them jobs like these sometimes don’t work out because expectations are misaligned or something changes in their life, and then you would need to make the very difficult decision to not continue to employ them. Maybe you continue to have your rent discount or waiver agreement with them in place for a period of time but it won’t last forever. And then – tenant – how would you respond to that? Look at their reaction. If they’re shocked that you might ever consider letting them go, it’s not a good fit. Have the hard conversations up front, and use your judgment.
Anytime you hire a tenant, you have to have that conversation. The more their compensation is just dollars and not rent discounts, the easier it will be to manage the relationship.
If this still sounds good to you, think of all the ways you can improve your community. How many tenants want their trash taken to the dumpster? How many would like their dog walked? How much better would they feel if someone who they know is walking the property in the evenings and reporting strangers and unwelcome behavior? How cool would it be to have monthly socials organized and run by one of your tenants? These jobs require some training but not much.
My answer to the question isn’t No any more. I like the idea of hiring tenants but understand that it should require careful planning and takes deliberate management oversight.
“Everyone should get sacked at least once.
It forces you to look at yourself.
It is important to have setbacks, because that is the reality of life.”
― Anna Wintour, former (unceremoniously sacked) Editor in Chief, Vogue
Who We Are
Cardinal Oak Investments acquires, improves, and manages under-valued commercial apartments. We buy B and C class properties of around 100 units in the Southeast and Midwest.
We look for properties whose amenities, aesthetics, and appeal have fallen into obsolescence, whose care reflects tired management, and whose location is where a stable workforce wants to live.
And we partner with like-minded investors looking for stable assets that produce good cash flow and strong appreciation.
Founded and managed by John Todderud, Cardinal Oak Investments has acquired properties on both coasts and in between creating annual double-digit returns.
For more information, schedule time with me or send an email to john@cardinaloak.com.
Please note: Past performance is no indication of future performance.