When multifamily investors think of value-add strategies, typically they are looking at interior improvements or new amenities. However, energy costs can be significant and is another area where expenses can be reduced, driving profits while helping the planet in the process. Investors can increase their NOI by using energy-efficient and sustainable materials.

"Heat pumps mitigate risk, cost the same as a gas or oil boiler, and give you the opportunity to transfer payment to the tenant," says Dave Holman.

Dave is an investor, author, and environmentalist. His first major investment took place right out of college when he co-founded a multilingual retail chain in Bolivia, The Spitting Llama Bookstore and Outfitter, with the hope of improving the country's social environment and ecology. Five years later, he entered the world of real estate investing with a mission to help residents, investors, and the planet.

Dave now co-owns 94 rental units in Southern Maine, working with investors, owners, residents, and contractors to help with energy efficiency, syndications, and property management. In addition to investing and brokering, Dave is the author of three books: Youth Renewing the Countryside, Coffee Smuggler, and Cyber Fire.

In this episode, we talk about why Dave started as a passive investor and lessons learned, why he moved into multifamily from single-family, and the benefits of incorporating sustainability into your multifamily business plan.

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Key Insights on the Value-Add of Sustainability for Multifamily

• After college spent 4 years in Bolivia and started a chain of camping and book stores, The Sitting Llama

• Getting serious about supplementing his non-profit salary with real estate. Started passive investing in 2011 and active in 2013 with single-family rentals

• Running and operating a retail store in another country

• Why Dave started as a passive investor and how it benefited him

The keyword, to summarize how to do passive investing, is relationships.

• Why you should worry less about IRR and think more about the track record and trust in the operators involved

• Triple Net Lease was the clincher for Dave choosing multifamily investing opportunities

You will encounter the most competition in the single-family rental (SFR) space

• The steps dave has taken with his properties during the pandemic to keep tenant retention high and COVID19 down

• What asset classes and markets are thriving and which are struggling during COVID19

• Maine real estate market update (Properties are going 20% - 30% over asking, especially in residential multifamily)

• The retail and commercial real estate market (Still in the honeymoon phase as the fed and government have propped things up)

20% of all residential mortgages have had payments deferred or reduced by banks, yet eviction rates are low, which results in a total imbalance that can't stand forever.

• What the 2021 real estate market may look like and what you can do now to strengthen your assets

• How to make your properties energy efficient as well as more profitable

• The benefits of using heat pumps in your apartment buildings

Heat pumps mitigate risk, cost the same as a gas or oil boiler, and give you the opportunity to transfer payment to the tenant

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Bullseye Tips:

Apparent Failure:

Under contract for a $1MM building but with $5MM worth of renovations. I was ready to pull the trigger but realized everything would have to go perfectly to make any money, so I pulled out of the deal. That decision resulted in strong relationships with partners.

Digital Resource:

Genius Scan (scan any document with phone)

Most Recommended Book:

Investment Biker (Jim Rogers)

Daily Habit:

Play with my kids in the morning. Networking with smart people. Task delegation.

Wish I Knew When I Was Starting Out:

You can do tremendous things in the world by being a good landlord

Curious About Right Now:

Macroeconomics

Best Place to Grab a Bite in Brunswick, Maine

Little Tokyo

Contact Dave:

[email protected]

Dave's Books:

Youth Renewing the Countryside

Coffee Smuggler

Cyber FIre