144. Focusing on Operations: Jered Sturm’s Approach to Value Creation

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This is an LFI episode and LFI is now part of PassivePockets.

Discover the secrets of multifamily investing with SNS Capital Group’s Jered Sturm. Gain valuable insights into their hands-on approach to property management and increasing NOI. Jered also shares tips for passive investors on evaluating sponsors and navigating economic changes. 

About Jered Sturm

Jered Sturm is the CEO and co-founder of SNS Capital Group, a multifamily owner, operator, and syndicator focused on the Cincinnati, Ohio market. Over the past 16 years, Jered and SNS Capital Group have acquired over 1,300 multifamily units in Cincinnati through syndication and value-add investing in distressed properties.

Here are some power takeaways from today’s conversation:

[04:36] Real estate investing journey from maintenance tech to multifamily syndicator

[08:57] Understanding the core competencies of syndication sponsors

[13:30] How to figure out the sponsor’s core competency

[15:24] What it means to be a good operator

[18:28] The pros and cons of being in on Emarket and one asset class

[19:48] The importance of effective quality property management

[21:03] The concept of forced value

[27:13] Handling poor management issues

[33:47] Investment strategies and debt management

Episode Highlights:

[08:57] Understanding a Sponsor’s Core Competency: Keys to Evaluating a Syndication Firm’s True Strengths

When evaluating a syndication sponsor, it’s important to understand their core competencies – what they are truly best at. Some key things discussed in this episode include:


  • Operations vs sales/marketing 
    – The sponsor’s background can provide clues. For example, experience in property management vs capital raising firms.
  • Track record of performance – Has the sponsor proven success creating value through their claimed core competency over multiple deals and market cycles?
  • Culture and people – Are employees happy and retained long-term, indicating a strong operational culture? Google reviews can provide insights.
  • Debt strategy – How the sponsor finances deals reveals their risk tolerance and ability to weather downturns. Fixed-rate debt provides more predictable cash flows.
  • Market focus – Narrow geographic and asset class focus allows deep local expertise but lacks diversification.

The best way for passive investors to evaluate a sponsor’s core competency is by verifying their claims – speaking to previous investors, reviewing property performance, and ensuring philosophies align. This due diligence helps identify sponsors truly skilled in value creation versus those relying on sales/marketing abilities.

[15:25] What Makes a Good Operator

A good multifamily operator has a proven ability to maximize property performance through hands-on management focused on tenant satisfaction, continuous expense optimization, and value-added renovations. They leverage deep local market expertise, a results-oriented culture, and data-driven methods to consistently drive occupancy, rents and NOI higher than industry peers. This hands-on, performance-focused approach is demonstrated through a track record of acquiring distressed assets and creating significant forced appreciation through superior property management and operational efficiencies.

This show is for entertainment purposes only. Nothing said on the show should be considered financial advice. Before making any decisions, consult a professional. This show is copyrighted by Passive Investing from Left Field and Left Field Investors. Written permissions must be granted before syndication or rebroadcasting.

Resources Mentioned:

www.snscapitalgroup.com

Avoiding Rookie Errors as a Left Field Investor: 20 Lessons Learned From 14 Years of Passive Investing in Private Syndications by Steve Suh

Use this for book links: https://www.leftfieldinvestors.com/books/

Podcast Recommendations:

Huberman Lab Podcast

Advertising Partners:

Left Field Investors – BEC

Tribevest

Aspen Funds

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