Chasing Consistent Predictable Cashflow w/Jered Sturm
Watch on YouTube!
Or listen wherever you podcast!
Episode Description
Welcome to the Freedom Point Real Estate podcast! Jeremy Dyer welcomes Jered Sturm to today's episode on vertically integration, property management, cashflow vs equity, and more.
Jered Sturm is the Founder and CEO of SNS Capital Group, a leading multifamily investment firm in Cincinnati, Ohio. With over 18 years in the industry, Jered transitioned from an apartment maintenance technician to a prominent multifamily owner/operator. He has built SNS Capital Group into a vertically integrated firm with over $150 million in assets. Known for adding value and operating efficiently for long-term cash flow, Jered frequently shares his expertise at conferences and on the BiggerPockets podcast. Despite his success, he remains grounded, living in Cincinnati with his wife and two young children.
CONNECT WITH JARED STURM!
SNS Management Website: https://www.sns-management.com/
SNS Capital Group Website: https://www.snscapitalgroup.com/
SNS Management LinkedIn: https://www.linkedin.com/company/sns-management/?viewAsMember=true
SNS Capital Group LinkedIn: https://www.linkedin.com/company/snscapitalgroup/
SNS Management Facebook: https://www.facebook.com/SNSmanagementLLC
SNS Capital Group Facebook: https://www.facebook.com/snscapitalgroup
SNS Management Instagram: https://www.instagram.com/snsmanagement_/
SNS Capital Group Instagram: https://www.instagram.com/snscapitalgroup/
CONNECT WITH JEREMY DYER!
Website: https://startingpointcapital.com/
Instagram: https://www.instagram.com/startingpointcapital/
LinkedIn: https://www.linkedin.com/in/jeremydyer
Facebook: https://www.facebook.com/startingpointcapital
Book a Call! https://calendly.com/startingpointcapital/discuss-investing-with-jeremy-dyer?month=2023-12
Summary
Tip #1: Break Down Key Performance Indicators (KPIs) for Better Insights
"Rather than say why are you a best-in-class sponsor, the simple question you need to ask is, what are your KPIs?"
Focusing on KPIs helps break down operations into measurable components that can be optimized for success. Jared highlights the importance of tracking specific metrics like vacancy rates but emphasizes breaking down those metrics into smaller, manageable parts. This level of precision ensures each aspect of the business is accounted for and continuously improved, leading to better overall performance.
Tip #2: Decompose Vacancy to Improve Occupancy Rates
"We break vacancy down into components, like the time from the resident moving out to the time construction starts, and so on."
Instead of looking at vacancy as a single metric, Jared’s team dissects it into actionable phases involving property managers, construction teams, and leasing teams. This approach allows SNS Capital Group to optimize each step and reduce overall vacancy times. By tracking and optimizing these smaller processes, they achieve higher economic occupancy, ensuring profitability even in transitional periods.
Tip #3: Focus on Economic Occupancy, Not Just Physical
"Just because you’re saying your occupancy is at 92% doesn’t mean it’s economic occupancy."
It's crucial for real estate investors to differentiate between physical and economic occupancy. The former refers to how many units are filled, but the latter tells the real financial story by considering rent collection and concessions. By tracking economic occupancy, investors get a clearer picture of the property’s actual revenue-generating potential, which is key for long-term profitability.
Tip #4: Consistency in Action is More Important Than Growth Targets
"If we do all of those things and don’t buy a single deal, I’m completely content with it."
Jared emphasizes that growing the business for the sake of growth is not his priority. Instead, he focuses on consistent action, such as making broker calls and underwriting deals. This approach ensures that the foundation of the business remains strong, allowing for sustainable growth rather than pushing for expansion at the expense of quality.
Tip #5: Rebalancing Work and Life Is a Continuous Process
"There’s a constant rebalancing... some weeks, work just needs my attention, and other weeks, family does."
Achieving work-life balance is not a one-time task but an ongoing adjustment. Jared mentions how different buckets—work, family, personal health—require attention at different times. Entrepreneurs and business leaders must accept that priorities shift, and the goal is not perfection but awareness and intentionality in balancing different aspects of life.
Tip #6: Hold Every Team Member Accountable for Specific KPIs
"Every role in our company has two to three KPIs that we hold those individuals accountable to."
Accountability is crucial for a high-performing organization. At SNS Capital Group, every employee is responsible for specific KPIs, which are tied to the overall success of the business. This system not only ensures that everyone is contributing to the company’s goals but also allows leaders to identify areas where teams may need more support or improvement.
Tip #7: Understand the Difference Between Best-in-Class and Average Operators
"There’s a huge difference between a best-in-class sponsor and a not-best-in-class sponsor."
Being "best-in-class" is not just a title but a result of diligent processes, robust systems, and a deep understanding of KPIs. Jared encourages investors to thoroughly vet their sponsors by asking for specific KPIs and performance data. This distinction is vital, as investing with a top-tier operator can mean the difference between success and failure, particularly during economic downturns.
Tip #8: Build a Solid Foundation Before Scaling
"I’ve been working very hard for 16 years to build rock-solid processes and an operational business."
Long-term success in real estate comes from a strong foundation. Jared’s 16-year journey has been focused on building systems that can withstand economic cycles, rather than just focusing on rapid expansion. His advice to investors and business owners is to prioritize stability and process optimization before considering aggressive growth strategies.
Tip #9: Don’t Fear Tough Economic Times, Be Prepared for Them
"I think one day we’ll get to see that [our strong foundation] realized. I’m looking forward to it."
Jared sees economic downturns not as obstacles, but as opportunities to showcase the strength of his business. Preparing for challenging times with solid processes and financial structures allows businesses to survive and even thrive when others may falter. His positive outlook on potential recessions serves as a reminder that preparation is key to enduring market shifts.
Tip #10: Progress Is Defined by Actions, Not Outcomes
"Success is: did we take those actions?"
For Jared, success is not solely defined by the end result but by whether the necessary actions were taken along the way. By focusing on the day-to-day processes—making calls, analyzing deals, attending meetings—he ensures that his company is always progressing, regardless of whether they close new deals. This mindset promotes consistency and keeps the business moving forward.
