_edited.jpg){kind=small}
As I reflect on my journey in multifamily real estate, I’m reminded of the countless lessons I’ve learned along the way. In a recent episode of my podcast, "The Good, The Bad, and the Wild Card," I shared some of the experiences that have shaped my approach to investing. Today, I’d like to take you through those stories—moments that define not just my career but the very essence of what it means to be a passive multifamily investor.
The Good: Celebrating Growth and Hard-Earned Success
Let me start with the good—something I always strive to focus on. For the second year in a row, Blue Lake Capital was recognized as one of the fastest-growing private companies in the U.S. by Inc. Magazine and the Financial Times. This recognition means a great deal to me personally, as it reflects the hard work and determination that have fueled my journey from humble beginnings to where I am today.
When I first arrived in the U.S. about a decade ago, I came with little more than a dream and a commitment to change my life. I grew up in a very modest environment, where financial struggles were a daily reality. I remember cleaning buildings as a child to help my family make ends meet, and as a young adult, I had to borrow money just to buy food. But I always knew deep down that I wouldn’t let my circumstances define my future.
Today, as I look back on those early struggles, I’m filled with gratitude for how far we’ve come. Blue Lake Capital’s growth is not just a testament to our business success but a validation of the belief that with hard work, perseverance, and the right mindset, anything is possible. This recognition is also a reminder of why I do what I do—so that I can provide security for my family and help others achieve financial freedom through real estate investing.
The Bad: Adapting to a Changing Market in Multifamily Real Estate
Of course, not everything in real estate is smooth sailing. One of the challenges we’re facing today in the multifamily sector is the slowdown in rent growth. A few years ago, we were seeing rent increases of 40-60%, which, frankly, were unsustainable in the long run. Today, rent growth has normalized to around 1-5%, which is more in line with historical trends.
While this shift might be categorized as "bad," I see it as part of the natural ebb and flow of the real estate market. It’s important for investors to adjust their expectations accordingly. Gone are the days when you could count on double-digit rent increases year after year. Instead, we need to focus on deals that offer reasonable, achievable returns. This requires careful underwriting and a realistic approach to projections.
For those of you investing passively, my advice is to partner with sponsors who are transparent about their assumptions and who aren’t relying on overly aggressive rent growth to make a deal work. Real estate is cyclical, and understanding where we are in the cycle is crucial to making informed investment decisions.
The Wild Card: Embracing the Unexpected
Real estate is full of surprises—some good, some challenging. One of the most memorable wild cards I’ve encountered involved a deal we did in Atlanta several years ago. We had a 250-unit portfolio under contract, and everything was on track for a smooth closing. But just days before we were supposed to finalize the purchase, we discovered that occupancy had dropped below 80%.
This was a major problem because the lender, who had approved our loan, now considered the property "unstabilized" and was threatening to pull the financing. We were faced with a tough decision: walk away from the deal or dig in and turn things around.
I chose the latter. I spent a week on-site, working closely with the property management team to increase occupancy. It was hard work, but within 45 days, we were back above 90% occupancy, and we were able to close the deal. Fast forward 18 months, and we exited with over a 20% IRR, delivering strong profits to our investors.
This experience reinforced a critical lesson: in real estate, wild cards are inevitable, but they don’t have to derail your success. With the right team, a solid plan, and a commitment to seeing things through, you can navigate even the most unexpected challenges.
Final Thoughts: Lessons for Passive Investors
As I continue to build and grow Blue Lake Capital, I’m constantly reminded that real estate investing is a journey filled with highs and lows. The key to success lies in how you respond to each situation. Whether it’s celebrating the wins, adapting to market changes, or navigating wild cards, the journey is what makes this business so rewarding.
For those of you investing passively, my hope is that by sharing these experiences, you can better understand the dynamics of the multifamily market and feel more confident in your investment decisions. Remember, success in real estate is not just about the deals you do but about the lessons you learn along the way.
Thank you for being part of this journey with me. Together, we can continue to build wealth and create a brighter future through multifamily investing.
P.S. If one of your priorities, like mine, is building and preserving your wealth through multifamily real estate investments, click here to download my new eBook: The Ultimate Guide to Creating & Preserving Your Wealth.
---
Invest With Blue Lake Capital
If you are an accredited investor interested in learning more about passively investing in multifamily properties, click here to complete our investor form and schedule a call with our Investor Relations team.
About Ellie Perlman
Ellie Perlman is the founder of Blue Lake Capital, a commercial real estate investment firm specializing in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.
A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.
Ellie is the founding host of REady2Scale, a podcast that highlights the assets, processes, and strategies for the multiple approaches to successful real estate investing.
She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.
Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can read more about Blue Lake Capital and Ellie Perlman at www.bluelake-capital.com.
*The content provided on this website, including all downloadable resources, is for informational purposes only and should not be interpreted as financial advice. Furthermore, this material does not constitute an offer to sell or a solicitation of an offer to buy any securities.
Comentários