In many ways, Inman Equities is a reflection of the personality and experiences of its founder, Ben Inman. As he likes to say, he has worked in the multifamily business from the ground up, starting as a landscape architect. Over time, he has moved through a series of positions that included renovations, marketing, sales and leasing, brokerage, and raising capital. “Because of my background, we’re both hands-on and well-rounded as a company,” he says. “I believe that’s one of the reasons we have so many repeat investors. They know that when they call us with a question, they are most likely going to get an immediate answer.”
Inman started the company a little more than three years ago — and today Inman Equities has assets valued at $238 million with another $62 million in the closing process. It currently owns 2,800 units divided among 24 communities in 11 markets across the Southeast — and there is more in the pipeline. The company now has offices in Nashville and Atlanta.
In retrospect, we tend to treat our careers as a series of linear moves that progressively lead toward a goal. Your career hasn’t exactly followed that pattern, but you reached your objective of creating a company to invest in multifamily properties, nonetheless. How do you account for that?
From when I was very young, I had this vision of being in the multifamily space, and I stuck to that. Whatever job I took, I knew there would be at least something that would help move me closer to that goal. At the same time, I was constantly reading and listening to real estate-related books, audiobooks, and podcasts. I would sit on my balcony every night to read and study, even on weekends. It all makes a difference. The experience and knowledge I put together gave me the basis for moving forward.
Let me give an example. I landed a job acquiring multifamily properties for an entrepreneur and motivational speaker, by accident. I was working as a broker and called about a property he had in Nashville. When his secretary picked up, she asked me if I was calling about the job or the property. I said both. One thing led to another, and I got the job by leveraging every bit of knowledge I had gained along the way — my understanding of brokerage, marketing, renovations, and more.
Oftentimes, we learn from the example of others. Was there anyone you worked with that really made an impression?
Early in my career, I worked for a family office in Miami. The owner of the firm had an incredible work ethic: he was always the first to arrive at the office and the last to leave. He came from Cuba with nothing, but though he was easily worth $1 billion, he still put in long hours. There’s no guarantee that working so hard will be rewarded, but if you don’t, you’ll never get anywhere.
I also learned a lot from listening to that entrepreneur. He would be the first person to tell you that he is not the smartest guy when it comes to real estate. What I learned from him is that you don’t have to be the smartest guy to succeed. You just have to be ready to execute and comfortable enough in your knowledge and experience to pivot and make decisions on the fly.
Inman Equities has continued to evolve since you started. Where are you now?
We remain value-add investors. We focus on meaningful renovations, operational improvements, and ancillary income development. Since we opened our doors, we’ve moved through a number of phases. When we started, we began with smaller properties, 50 to 75 units or so. It was a good way to get into the business because these properties weren’t on the radar of larger groups. In addition, these deals typically cash flow better because you’re buying at a different cap rate, and you don’t have to worry about an amenity package. If one of these came up now across the street from another one of our assets, we would consider it – but we’ve mostly moved up. We started buying larger properties, like a 475-unit community we partnered with a family office partner in Charlotte to acquire. This property is typical. Although the initial cash flow was not spectacular, everyone understood that it would have a higher cash flow at the end of the hold period.
What is your strategy for repositioning your properties?
We typically act as our own general contractor, which helps us save on costs and push the project forward on our own timetable. In some cases, we use a third-party management company, but we made a decision six months ago to bring management in house on more assets. This will also give us a better handle on costs.
One of the things we have been emphasizing post pandemic is converting unused clubhouse space into business centers. This is a selling point for two-income couples working at home. One partner can get out of the apartment, go to the business center, and work without distraction. For similar reasons, we’re building out high-quality gyms at some of our communities. With the trend to working remotely, these amenities will make a property more attractive.
Are there aspects of work-from-home that are changing your investment approach?
There are. One of the reasons that we’re bullish on places like Florida and Texas is that many snowbirds, who were planning to move full-time to a sunnier location when they retire, have realized that they can make the move right now. They can work from anywhere.
The migration pattern can be complicated. We’re seeing people from places like New York or New Jersey move down to South Florida, driving up prices there. These higher prices are leading people to move up the coast to places like Daytona Beach and Jacksonville where they can have the beach lifestyle they like without the additional costs.
The pandemic has also highlighted the value of renting to essential workers. We’re in the process of buying a property in Jacksonville with a high percentage of tenants employed by Amazon. In the past, that might have made me nervous, but not anymore. We know that regardless of what happens, they will have a high probability of keeping their jobs.
When you put a deal together, how does debt figure into your calculations?
Getting a reliable preliminary quote is the first thing I do. At this point, I’ve enough experience to know in most cases how it will shake out, but there is nothing wrong with putting a fresh set of eyes on the process. If the numbers work out, I’ll pursue it.
That’s why it’s really important to me that the quote is accurate. I’ve worked with Trey Palmedo from Lument’s Nashville office on a number of deals, and his numbers are always close to what the end quote will be. This saves us a lot of back and forth, which ultimately translates into time. You can never get that back.
I’m also looking for a lender who is extremely responsive, who can turn around a quote quickly and is available to respond to my questions. Lument’s quoting system is amazing. With Lument, we can sometimes get a quote in a matter of hours. With the speed deals need to be done these days, every second counts.
Ultimately, I’m looking for a lender who has made an investment in our team and in our future. In a lot of ways, debt is somewhat of a commodity, and the big difference between one lender and another is a willingness to be part of the team, lend a helping hand when needed, and add value. Trey really fits that description.