During our meeting Monday June 3, 2019, Eric S. Silverman told us about multi-family real estate investment strategies and methods used by Eastman Capital.  Eric founded Eastman Capital about 12 years ago and mentioned that the business has successfully invested a hundred properties during that time.  
 
One key element in the investment methodology anticipates investment turnover of about five years and an investment evaluation based on five key guidelines:
 
  1. Manager/Developers must be local to the market – They must have significant knowledge and prior experience operating in their local real estate markets. We also look for a proven track record of delivering superior investment results by acquiring, repositioning, managing and selling apartment properties.
  2. Manager/Developers must have “skin in the game” – Eastham Capital requires the M/D to make a significant cash investment into each deal; however, we will provide the majority of the equity. 
  3. Manager/Developers must be involved in the management of the real estate – Principals must self-manage (preferred) or actively supervise third party property management.  
  4. We fix properties, not neighborhoods TM – We target B&C properties in A&B locations. 
  5. Post-Renovation, the project should achieve a 10% cash-on-cash yield- On a pro-forma basis, after a renovation period of 6 to 36 months (dependent on the scope of the rehab), a project should cash flow 10+% per annum on the equity invested.
Eric told us that he is an active entrepreneur and investor in a number of businesses, but the real estate investment business is sort of in his blood because his father introduced him more than 30 years ago.  As Founder and Managing Partner of Eastham Capital, a private real estate investment business based in Boca Raton, FL, he told us that the business has launched its fifth fund in 2017. 
 
Over the years Eric noted several changes is trends for multi-family real estate. He cited the depressed properties a bargain prices in the 90's an turn of the century, but now he sees steady property prices with under occupancy resulting from poor management.  Eric mentioned that is why Eastman Capital insists on local partners for each investment project.
 
When asked about favorite localities, he mentioned Florida, Texas, and Tennessee because they have no state taxes.  More information is available on the Eastman Capital website.  Our club President Susan Meister thanked Eric for this presentation and when he indicated he had another segment available, club response suggested that we ask him to return for the second of the series.  This was a very much appreciated presentation with impressive introduction to the business of multi-family real estate investment.
 
Eric topped off his visit by introducing his friend and fellow real estate investor Tom Grant.  Tom is currently completing his MBA at FAU and briefly told us of his background in TV broadcast technology.  We may be seeing Tom again, perhaps with another program.  We enjoyed getting know both Eric and Tom and hope to see them again soon.