Show Notes

In this episode, I sit down with Steeve Breton, president of Velocity Capital, to talk about what he has learned as an LP, GP, fund manager, and capital raiser. Steeve has sponsored investments in over 3,500 apartment units, and we talk through how the last few years have changed the way he looks at underwriting, control, operator risk, preferred equity, and the multifamily market.

We also talk about the mistakes investors make before they lose money, especially when they assume a deal is safe just because it looks conservative on paper. Steeve shares how he thinks about control rights, partnering with operators, pausing distributions, opportunity zones, and why asset management matters more now than it did when the market was easier.

If you are investing passively, raising capital, or trying to buy your next multifamily deal, this episode gives you a clear look at what to watch for. The market may be near the bottom, but that does not mean every deal is good, and it definitely does not mean you can ignore operations, debt, supply, or the people running the deal.

Key Takeaways

The last few years exposed weak assumptions

• A lot of deals looked conservative when rents were rising and debt was cheap.

• Rising rates, new supply, and higher costs changed the math quickly.

• Even good operators were hit hard in markets with falling rents.

• The lesson is that assumptions matter.

Control matters more than people think

• Steeve learned that raising capital without control can create major problems.

• If a deal goes sideways, minority partners may not be able to take action.

• Control rights and step-in rights can protect investors when the operator underperforms.

• Investors should understand who actually has decision-making power before they invest.

Asset management is not optional anymore

• In a strong market, average operators could still survive.

• In today’s market, every expense, rent trend, and management decision matters.

• Weekly calls with property managers help catch problems before they get worse.

• Strong asset management means knowing the numbers and acting quickly.

Opportunity zones still have strong tax benefits

• Opportunity zones were created to encourage investment in underdeveloped areas.

• Investors can defer capital gains by reinvesting into qualified opportunity zone deals.

• If held long enough, the new gain on the opportunity zone investment may avoid long-term capital gains tax.

• The challenge is that good opportunity zone deals are hard to find.

Conservative underwriting still has limits

• If you are too aggressive, you can get hurt when the market changes.

• If you are too conservative, you may never actually buy anything.

• Good underwriting means stress-testing the deal without making it impossible to win.

• Investors need to understand rent growth assumptions, debt terms, and local supply trends before investing.