In this blog post, discover how investing in early childhood education not only addresses the persistent issue of preschool waitlist times but also offers a lucrative and socially impactful opportunity for investors.
I first started investing in real estate because I loved the idea of passive income. Making money while you sleep, “mailbox money.” I grew up around construction and real estate, and it became my passion. It’s what I’ve done my entire professional life.
What started as a personal passion project turned into a thriving commercial development business with a team of experienced partners. To help you better understand who CMK Properties is and how we approach real estate investing, here’s some of my story.
From Duplex Renovator to Commercial Developer
When I started my real estate investing journey, I focused on buying fixer-upper duplexes and apartment buildings to rent and later sell.
As I built my portfolio and expertise, I started exploring other assets like commercial buildings and mixed-use projects including condominiums. This brought me to Nashville, which is where I was working when the housing crash occurred.
The significant losses I incurred from the residential crash were very formative, and I was determined to make sure something like this never happened again.
Solid, stable, and predictable investments became my top priority.
Moving forward, I was much more risk averse and also more strategic about eliminating as many variables as possible. This eventually led me to shift away from large-scale condominium and mixed-use projects and toward commercial developments, where we had long term leases with strong credit rated tenants.
Building a Scalable Model
One of the reasons why I love working in real estate is because I have a deep appreciation for design and architecture. When I was working on the renovation of warehouses and factories into lofts and offices, I focused heavily on this, with a special interest in historical preservation — and the tax credits that came with it.
But after the crash, I realized that I wanted to scale more efficiently, and that would require a process that was less custom and more duplicative.
It’s taken time, but today we’re proud to have built a process that combines the best of both worlds: incorporating my appreciation for design into a scalable, process-driven model.
With our preschools and other build-to-suit tenants, we focus on designing prototypes that have great character and don’t require a redesign for each site. That way, we don’t have to do a custom build, but each of our properties is still beautiful and unique. This simplifies our underwriting, reduces costs, and increases returns for our investors.
Development vs. Acquisition
People often ask us why CMK has shifted away from acquisition to focus primarily on development deals.
To put it simply, we saw that it was becoming more and more difficult to generate returns from acquisitions. And because our team has extensive experience in commercial real estate development — from childcare to medical to multifamily to retail to senior living — we felt confident we could handle the additional complexities of development.
When you do acquisition deals in the current economy, you typically can expect to see around 4-5% preferred return and 10% IRR. By doing development, you can increase your return to 7-9% and see an IRR in the mid to upper teens.
Essentially, development allows us to double our returns without doubling our risk, thanks to the methodical process we’ve ironed out over years of investing.
To date, we’ve invested meaningfully and developed projects in nine real estate sectors, totaling $385 million. In seven of those sectors, we’ve had successful exits, and we anticipate successful exits from the other two in the coming three years. We’re proud of the diversification we’ve achieved and are excited to continue growing.
CMK Properties and its affiliates’ use of social media is for informational purposes only. No post, tweet, retweet, like, or any other interaction is a recommendation to buy or sell securities or an offer, or a solicitation to make an offer, to participate in any investment strategy managed by CMK Properties or its affiliates, and no such interaction may be construed as a recommendation by CMK Properties or its affiliates regarding any investment opportunity or as personalized investment advice.
Information that CMK Properties posts on any social media site is taken from sources that CMK Properties believes to be reliable, but is not guaranteed by CMK Properties for accuracy or completeness. CMK Properties does not endorse or accept responsibility for the content, use, or reliability of such sites. CMK Properties assumes no liability for any inaccuracies, errors or omissions in or from any data or other information provided on third party pages. Any opinions or statements posted by third parties are their own and may not be representative of the experience of others or indicative of future performance or success.
Any opinions expressed by CMK Properties or its employees on such social media sites are as of the date of publication and may change at any time without notice to you. Investments in securities involve risk, including the potential loss of principal invested. Past performance is not a guarantee of future results.