396. Innovating Real Estate Investments in Challenging Times with Tom Tom Higgins

May 29, 2023

How can investors mitigate risks and seize opportunities in challenging times?

Today, we'll learn about Tom Higgins's journey from an early passion for real estate to becoming a successful investor. He discusses his experience with commercial conversion projects and why he decided to go out on his own and start a real estate investment company. Tom stresses Terra Capital's strategy of investing in markets with strong underlying fundamentals and advises how to approach real estate investments during a credit crisis. Take advantage of this insightful conversation!

Tom Higgins is the Co-Founder and Managing Partner of Terra Capital. Tom has developed and renovated over 2,000 multifamily units throughout the United States. As Co-Founder of Terra Capital, Tom has played a vital role in creating Terra’s innovative real estate investment strategies.

[00:01 - 07:33] Opening Segment

• Tom shares his journey growing up in New York City around real estate

• His experience working for large national developers

• Tom has developed and renovated nearly 2,500 units to date

• He started his career by doing commercial conversions of pre-war buildings

[07:34 - 16:09] Exploring the Benefits of Investing in Recession-Resistant Mini Multis

• Commercial buildings are challenging to convert into apartments

• How Tom started his own real estate investment company with a business partner

• Acquiring 2-15 unit multi-family properties off-market and renovating them to top-of-market standards

• The bulletproof strategy

[16:10 - 24:00] Investing in Recession-Resistant Markets

• The benefits of vertical integration and pre-vetted investment opportunities

• The mini multi-strategy would not be nearly as effective without innovation and property technology

• The firm is vertically integrated, providing its own property management services

• The focus is on investing in affordable/healthy markets and recession-resistant asset classes

[24:01 - 31:31] Tips for Real Estate Operators on How to Protect Their Investments

• Why Terra Capital invests in markets that are over-index in healthcare and education

• Midwest has access to the highest multi-family yields

• Fed bailed out banks, but still risk with a long tail of retail banks and consumer confidence

• Why real estate operators should take a conservative approach

[31:32 - 39:35] Closing Segment

• Uncovering the levers operators can pull to bridge the gap in real estate investing

• Is multi-family less recession-resistant than other sectors?

• Ask your operators what they expect in terms of stabilized debt

 

Connect with Tom:

Website: Usaterra

Twitter: @tomchiggins

Bigger Pockets: Thomas Higgins

 

Key Quotes:

“When it comes to property management, we like to hire internally and really handle tenant communications to make sure that people are treated fairly.” - Tom Higgins

“We want to build a really deep foundation, and it's important for us to pick markets that have done well historically during the recession.” - Tom Higgins

 

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