Real Estate Funds: Diversification & Risk Mitigation with Mark Khuri Episode #148

This week in the lab we have California real estate broker Mark Khuri who has been a real estate investor since 2005. In addition to being a co-founder of SMK Capital Management, Mark has been involved in sourcing, underwriting, acquiring, raising capital, rehabilitating, managing and selling both residential and commercial investments throughout multiple markets in the US. Mr. Khuri has analyzed hundreds of investment opportunities and has successfully bought, renovated, sold and invested in over 120 properties with a combined value over $1 billion and created and managed over 40 real estate partnerships with investors. As a co-founder of SMK, Mark and his partners believe that diversification and risk management is achieved through ownership of multiple properties in multiple regions. So in the last decade, Mr. Khuri and affiliates of SMK have invested in over 45 commercial real estate opportunities across numerous asset classes including mobile home parks, self-storage facilities, multi-family communities, retail shopping centers, oil wells, student housing, vacant land, short-term debt and ATM’s. Don’t miss out on Mark’s strategies to effectively broaden the range of your investment opportunities specifically in residential and commercial properties. HIGHLIGHTS OF THE EPISODE 01:06 - Background of the guest 02:12 - How was SMK Capital founded? 04:45 - The backbone and core pillars of SMK Capital 15:37 - What are the Pros and Cons of investing in funds? 19:20 - Physical occupancy and Economic occupancy 31:17 - Most reliable strategies to increase value in real estate 43:44 - Which asset class is better in the market? KEEPING IT REAL 08:14 - What is the investor trying to achieve? 10:20 - What is it like to work in SMK? 23:19 - When is the right time to risk funds when hitting the project returns? 26:49 - What strategy do you use in investing in real estate? 39:30 - How does ATM space help with investors? 47:07 - Where does Mark Khuri focus on more? 51:57 - Why wouldn’t you go into developing Multifamily apartments? NOTABLE QUOTES (KEY LESSONS): “It is really two things lower risk and diversification that is the main purpose of a fund and assuming you have let’s say 20 properties in the portfolio or fund, the downside of that is if one of them does very well or two or three do very well, your overall return isn’t gonna skyrocket because it’s the smaller percent of the total versus an individual deal”  “Why we may have move forward if we think the price is not as competitive as maybe five years ago, which is often the case these days with deals there’s a lot of eyes on them, cap rates are going down and so you know that’s just nature of the market, if you don’t get used to that and comfortable seeing it then you’re probably not going to invest in a lot of deals for the next few years.”  CONNECTING WITH THE GUEST Website LinkedIn