The Risk Most Syndicators Didn’t See Coming with Mark Kenney

The deals didn’t fail because of the market—they failed because of decisions most investors thought were safe.

Most investors focus on finding deals and raising capital, but overlook the one variable that can quietly take everything down. When conditions change, the assumptions behind those decisions get exposed—and the consequences show up fast.

If you’re serious about building a multifamily business that actually holds up under pressure, join the Tribe of Titans: www.thetribeoftitans.com

This conversation goes beyond surface-level strategy and into what actually happens when deals start slipping. From loan structures to lender behavior to decision-making under pressure, this is a look at what experienced operators learned the hard way—and what newer investors need to understand before they’re in the same position.

What You’ll Learn

• Why “non-recourse” doesn’t mean what most investors think
 • The hidden risk in doing more deals too quickly
 • What really happens when lenders stop cooperating
 • Why putting more money into a deal can backfire
 • The decision point every operator eventually faces

About the Guest

Mark is a seasoned real estate investor, coach, two-time best-selling author, and co-founder of Think Multifamily. He began his apartment investing journey over 25 years ago as a side hustle while working 80+ hours per week in the corporate world.

Since then, Mark has acquired over 18,000 units totaling more than $1.5 billion in assets across 15 states. Today, he is passionate about helping others get started and scale their apartment investing businesses.

A graduate of Michigan State University with a degree in Accounting, Mark is also a CPA. He spent 20 years in IT consulting, working with firms such as KPMG Consulting, EDS, SAP, and HP, and founded Simplifying-IT, a company providing services to Fortune 500 organizations. He now leverages his extensive IT background to bring innovative technology solutions to the multifamily investing space.

Learn more about him at: https://thinkmultifamily.com/, or email Info@thinkmultifamily.com

About the Host:

Brian Briscoe is an apartment operator and founder of Streamline Capital, focused on acquiring and operating multifamily properties in the greater Salt Lake City metro. He hosts the Diary of an Apartment Investor podcast, where he shares real-world operator insights and decision frameworks for aspiring multifamily investors.

If this conversation resonated, there’s more happening inside the Tribe of Titans. It’s where serious investors move beyond surface-level content and into real discussions that drive action. Visit https://www.thetribeoftitans.com/ to learn more.

Transcript

Welcome And Podcast Mission

Brian Briscoe 0:06

Welcome to the Diary of an Apartment Investor Podcast, the show where we cut through the noise and talk about what it actually takes to build a real multifamily investing business. I'm Brian Briscoe, apartment investor, operator, and founder of Streamline Capital. And this podcast is built for the aspiring apartment investor who wants more than just theory. We talk about raising capital, closing deals, managing assets, and making the decisions that separate dabbling from building something that lasts. Now, if you're serious about taking the next step, this conversation continues inside of the Tribe of Titans multifamily investing community where investors work through real deals together with live discussions and direct support. So let's get into today's episode.

From CPA To Full-Time Multifamily

Mark Kenney 0:47

Welcome to the Diary of an Apartment Investor Podcast. I'm your host, Brian Briscoe with Streamline Capital. Really excited for today's show. And I, you know, I probably haven't been more excited for a show in a long time. But we've got Mark Kenny on the line with us today. So, Mark, welcome to the show. Thanks for having me, Brian. Good to see you. Good to see you too. Now, you probably don't remember this, but five or six years ago, when I was like a brand new syndicator, I had closed like two deals, someone put us on a panel together, right? You do remember. You do remember that, okay? Now, I remember thinking I was hot stuffed, and I get on the panel, and I gotta say, you know, just be standing next to you was a little bit intimidating for me at the time. You had many, many units, and you know, I walked away with a whole lot of respect for you. I mean, the amount of value you gave in a very short time on that panel was absolutely incredible. I learned a lot. You know, I thought I was gonna go out on that panel and teach and preach, and I I think I learned more from you than anything else that month, probably. So, anyway, thanks for that. Anyway, that said, let's talk about you here. So, do us a favor and tell us what life looked like for you before multifamily. Yeah, uh, I started buying real estate over 30 years ago in college with a twin brother and got married pretty young as well. Started buying two to four units typically. But as far as corporate world, I was a CPA financial accountant for a while, then I transitioned into management consulting for the big four and kind of always kind of skirted around business and IT. And then I worked for a software company named SAP, which is a pretty large uh German-based company. Started my own IT company in 2008. That's pretty much what it looked like for me from my and it was more of a 80 to 100 hours a week, pretty much every week working. Any project that came up, I wouldn't turn it down.

Brian Briscoe 2:40

Okay, good, good. But but it's your own company. So so you're working for yourself at this time and a little bit different than working for somebody else 80 to 100 hours a week.

Mark Kenney 2:48

Oh, I did that for myself too.

Brian Briscoe 2:50

Yeah, okay, got it, got it, got it. So, why did you transition into multifamily to begin with? It sounds like you had a bunch of smaller properties first, but you know, why the larger multifamily, why the syndication?

Mark Kenney 3:03

Yeah, so I had a a friend that was syndicating a deal, and I'm like, it makes sense. So I invested in his deal and then a couple other deals. And even though IT wise was going you know relatively well from an overall financial perspective, things like that, just the the balance, life work balance was not working for my wife. Yep. And she's like, you need to do something different, and I'm like, yeah, my spare time, let me go figure out something else. So, long story short, we both liked real estate and we ended up going to it to an event and separately, actually, just because of schedules, and we're like, we can do this too. So my goal was to stop doing IT. And I was to the point where I'm like, I don't necessarily have to replace all my income to stop. I just need enough to, you know, cushion as well to live and things like that. And we were able to do it relatively quickly within I think less than two years or so, I was able to stop working my IT job.

Brian Briscoe 4:04

Nice, nice. So you were working, presumably you were working full-time IT for the full two years and syndicating at the same time. Correct. Okay, got it, got it. I did something similar, and for me, you know, people ask me what it looked like, and I always say it was like working two full-time jobs at the same time, right? So, yeah, absolutely.

Mark Kenney 4:25

But you figure out how little you actually have to sleep and live.

Brian Briscoe 4:31

Yeah, and you figure out how many things you don't have to do that you normally do, too.

Mark Kenney 4:35

Like I figured out it's about three hours a night.

Brian Briscoe 4:38

Yeah, yeah. I mean, I stopped watching Netflix, I stopped doing like anything, you know, that a lot of my hobbies went to the wayside, right? I was either working, I put fences around you know, certain family time things, and then everything else was multi-family, you know.

Mark Kenney 4:54

Right.

Building Think Multifamily Community

Brian Briscoe 4:55

Wake up Saturday morning, four to five hours of multi-family before the kids get up, you know. So yeah, so sounds like that hasn't changed in a while, but uh about what year uh was this when you went full-time multifamily? 2016. 2016. Okay, got it, got it. That helps. You've also built a coaching program, Think Multifamily. How did that start and why did that start?

Mark Kenney 5:19

I had no ambitions to do coaching or anything like that. If someone would have said, Hey, you're gonna do this, I would say, no, I'm not. But reality was we were you know part of another you know group and we just felt like there were certain things that maybe could be done differently. And we had a number of people asking us to to do stuff, and we started doing meetups initially and then some webinars once in a while, and then kind of just realized that there were, in our opinion, a lot of things that really weren't discussed on the multifamily side, you know, kind of maybe more the the harder part or the more detailed pieces. You know, everyone's just like it's easy, anybody can do it. It's not true, you can't just do anything you want to do. I can't go dunk a basketball, no matter how much I practice, I'll never do it my entire life. Give you a little trampoline, I'm sure you can get it. I don't mean if it's short enough.

Brian Briscoe 6:06

Uh hoop but six-foot hoop, I can dunk all day.

Mark Kenney 6:09

That's right. So um it was kind of more, I just felt like more things could be shared. Um, and then just the culture we wanted more. Our group was called Family Syndication Group. We wanted to build more of a fab family atmosphere. It was just something with the community, and we built like a lot of really, really good friendships from doing that. And during my IT days, I really didn't have that and frankly didn't really care about it. I didn't. My wife was really the one more driving around the community, and I downplayed that a lot initially because I'm just like it's all business, who cares? Just go out and do deals. But um, that was what really was uh very attractive to a lot of people was a community aspect of it and how people built lifelong relationships.

Brian Briscoe 6:53

Yeah. So you started out building a community, you know, uh, and eventually it seemed like you scaled and you had a a pretty sizable community and kind of I'd call it more of an ecosystem uh based on talking with the people that were in the program. What did that look like at like the peak of you know your business?

Mark Kenney 7:12

Yeah, we were doing live events a couple times a year, some were more just general multifamily. And then we did uh, I think it ended up turned into a three and a half day deal analysis workshop where you bring your computers and literally all you're doing is working through deals. It's like if you don't like numbers, you're gonna go crazy, but it's very, very detailed, technical. And I kind of lean more towards that way, and sometimes I have to kind of scale back a little bit to be like, okay, people are at different levels, right? And not everyone likes numbers and things like that. And then it was really one-on-one coaching. So I did all the one-on-one coaching. We didn't have like subcoach model or anything like that, structured a little differently. And we had group that in that one-on-one coaching, we would do group stuff as well. Like we'd have training just for the group, and then we'd have calls like twice a month as well with that group.

Brian Briscoe 7:58

Okay, awesome, awesome, interesting. Now, you're one of a couple of different coaches that would partner with the students. So I've heard that from a lot of the students that have been on this podcast talking about deals they've done. But uh, I want to get your perspective. What led you to start doing that? And how often and how many times did you do that?

Partnering With Students And Key Roles

Mark Kenney 8:17

Uh, really kind of led to it was most people starting out, even if they were experienced in the business world and things like that, you know, you need certain things, right, to be able to do a loan and three main things. You're gonna need net worth, you know, typically 100% or more of the loan amount, and liquidity after closing needs to be 10% or higher of the loan amount, which a lot of people just didn't have. Yeah, and then the third piece, which is even getting more stringent now, is you need to have experience. So it's kind of like when you go graduate from college and everything you look at says you need two or more years experience. You're like, well, how do I get that if I can never get a job? Right. So it's kind of the same thing, and and loans, right? We had some, you know, and have some really good relationships with brokers and we're like, hey, we'll we'll make introductions to brokers. You can kind of like hunt deals. I did it a lot, a lot of deals. Yeah, looking back at it, I should not have done as many deals. Yeah, I downplayed just by being, you know, not as experienced, the the whole concept of non-recourse loans with no personal liability is a complete, I'll just call it complete lie. It's a complete lie for some lenders, uh, because you still have what's called car balls and things like that. And some lenders will just make up stuff too. It's just reality. And some people are like, I don't think all lenders are like that. Well, I'm not saying all of them like that, but there are enough of them out there that put a bad taste in your mouth. You know, you have the concept of let's say you and I are partners, and I would say, well, hey, Brian, you're you're newer too, but you can sign on a loan too to get experience, and then you know, I'm gonna throw you under the bus for a second. You go off and go see a bunch of money and do all these fraudulent things. I don't I know nothing about it, I'm not involved in it or anything like that. Well, there's something called joint and several terms you should know if you're gonna sign up a loan document or some other agreements as well. So, whatever Brian does, I'm 100% liable whether I know about it, participate or not. And whatever I do, Brian's a hundred percent liable whether he knows about it, participates or not. So I just didn't really know enough back then. I'm like, now recourse, what's the worst thing that could happen? Well, the worst thing could happen is a lender could, you know, try to sue you, yeah, and try to sue you for full recourse, the full loan amount. That's reality. That's what can happen.

Brian Briscoe 10:25

Yeah, yeah. And I mean, in your defense, I mean, nobody was losing properties that wasn't happening at the time, right? So it had been probably 10 or 12 years. Well, since like 2008, 2009, you're right. That happened, you know, and so nobody understood those risks. We were so far removed from the last time the lenders did that that a lot of people glossed over that, right?

Mark Kenney 10:46

So going forward, just you know, kind of a comment is that you you know you can negotiate all those things more than we never thought just say, Hey, it is what it is. I just did a refi in January and I redlined the heck out of the the loan dogs. I have an attorney involved too, but I'm the one to redline the heck out of them. Like, nope, nope, nope, nope, not doing that. Nope. And you want to be able to limit your liability, right? Yeah, as far as to some sort of infraction, you're never gonna get avoided like if you go out and want to commit fraud and steal money, you should get in trouble. Like, nobody should argue that. So you're not gonna get that out of there. And then the other piece is you don't want anything to be like unquantified, like what is a risk? Well, yeah, to be determined, that's not a good thing.

Brian Briscoe 11:27

Yeah, absolutely, absolutely. And well, just more for people listening than you, Mark, but but uh a lot of people are going through struggles with lenders. It is real, it is absolutely real here. So let's talk about like the partnership structure that you had with your students. You know, how would you line those up? You know, what were your responsibilities, their responsibilities, and so forth?

Mark Kenney 11:46

It would vary a little bit depending on who the person was. So, in some cases, someone might be more of like a deal finder, right? Yeah, but they don't want to necessarily operate and run the property as an asset manager. So it would kind of depend, but the different pieces of it would a lot of people are like good at underwriting. They have an IT background or where it might be good in math. And other people are like, I'm really good at dealing with people, so I want to go talk to brokers and try to bring capital. Uh, the deals that I would, you know, participate in, uh, at a minimum, I was signing the loans and I was making an introduction to brokers and things like that, helping them underwrite the deals. Some cases we would provide the asset management piece of it, and then it just would depend on the other components of what you know, raise capital from investors. It was always like, you know, a hot ticket for a lot of people that were new, like, hey, we can't raise money, haven't done it before. And we're always like, well, at least try. Worst thing is you get to zero, but at least you learn something from doing that. And then we would raise, you know, capital. We did quite a bit. I mean, we did like, you know, maybe about a 1.5 billion in transactions in a pretty short period of time. That's that's quite a bit, yes. Uh well, you know, it's probably 500 million more than I wish I would have done, but uh yeah, high hindsight's 2020, though.

Brian Briscoe 12:59

I mean, the reality is, you know, if if things would have turned out a little bit differently in the last couple of years, you know, you'd be sitting on top of a mountain of gold, you know. And I mean, but yeah, so bottom line, different coaching, different structures with different people, that that makes sense. That makes sense. And you did raise capital. Were you providing earnest money for some of these deals?

Mark Kenney 13:18

Or also I wasn't the only one. I did have a number of deals. I mean, at that point in time during the you know, kind of the heydays. I mean, we'd have times where we have you know a million dollars of money out on earnest money hard on deals. I would, and then some point in time you, you know, you kind of you get tapped out. I mean, we did 120 deals. People are like, Oh, why don't you put I'm like, okay, I have 120 deals. Like, what do you what what do you want me to do? Like, there's only so much money to go around, and it's like, and you're waiting for some deals to sell, and you know, some of the deals, a lot of them, you know, didn't make any money. So, but I would. It was in the the good thing about the community was I might have had net worth, for example, on the deal, but I'm like, I'm not liquid right now. I don't I put money out. So somebody else would come on and sign as a KP as well, yeah, provide liquidity, earnest money. It was very common where there could be, you know, up to maybe five people putting earnest money in, and then get some part of the deal uh for doing that because they're putting money at risk. And we would distinguish between whether it was hard, meaning it's you know at risk, really, or not, and then the percentages would change based on that. But we split up each piece of the deal, whether finding the deal, earnest money, signing the loan, asset managing, and all those components, and people just generally will navigate to certain, usually one, maybe two areas. Very few people would be like, I'm doing it all. I mean, I've worked on all the areas like multiple times, but it's not like I like all the areas equivalently, you know, or that I'm even uh as good in all the areas. And somebody else could be way better than me in a certain area. I did out of necessity. First time I started syndicating, it was just one of the guys, me. Yeah, and that was it.

Brian Briscoe 14:54

Yeah, yeah. And by the way, um, when I would do podcast episodes, you know, it was part of the reason I started the podcast is to find potential partners, right? And one thing I hated about your program, and this is gonna be a compliment when I finish, right? Was that everybody in your program, when I, you know, when we closed down the show and I started asking questions, hey, are you open to partnerships with us? Are you open to this? Are you open to that? Almost every single one of them said, No, we're I'm good. I'm good. We got a lot of, we got a great community with Think Multifamily, a lot of things are going well. We're gonna stay over there, right? So, I mean, you're you're definitely doing something right as far as that that community ecosystem goes.

Mark Kenney 15:34

You just to clarify, we didn't drive that, we really didn't. I was always like, hey, whatever you want to do. The only thing I would say, and it happened on a couple deals where I said, if you want me to partner in the deal, I need to know who the other partner's gonna be. And it happened at one deal where I knew the other guy, and uh, this person didn't, you know, and I'm like, I'm not partying on the deal. Like, I know some stuff, I'm not gonna go into details, I'm not partnering with that guy. So, but if they wanted to go partner, which happened a number of times, people would go partner outside the group, and I'd still coach them, you know, totally fine. I just said, you know, I'm not gonna coach your other guy that's not the group. We had a pretty tight community. For somebody who built a podcast to look for partners, everything multifamily, the community was just it sounded from from outside looking in like it was just completely awesome for the time. All right. So you have the community going, you've got students looking for deals, you're partnering. Are you doing deals over your own at this time or are you completely doing you are okay? Yeah, you know, it transparently caused some issues too, because some of the people are like, Well, you're doing your own deals and you're raising capital. I'm like, uh, yeah, I am, yeah. And uh I get it from some because they're like, Man, we're trying to do a deal too, and you're helping us on your deal, and you're gonna and you know, you're raising money on your own deal. I'm like, Yeah, but I'm uh I'm not gonna stop doing deals.

Brian Briscoe 16:49

And uh yeah, I have a handful of coaching clients and nowhere near where you're at, but uh, you know, my my partner and I talk about this a lot, you know, where to focus. And my opinion is if you wouldn't if you're gonna be a good coach, you have to be doing the deals, you have to be doing both sides. So when you said that, my immediate response was, of course, you're doing your own deals, right?

Mark Kenney 17:10

You know, that's what that was my response that people are like literally getting there, it costs some tension, you know. Yeah, yeah. I mean, it's very stressful to go try to raise money in your first deal, and you're trying to raise, we're doing big deals at the time. Some people were doing too big of deals uh for their first deal. But I mean, you know, we would have certain points in time, we would have five to seven deals all going on at once.

Brian Briscoe 17:29

And I mean, 120 over a certain period of time, that's a lot. If I do 120 in the next 15 years, you know, I think I'm gonna be happy.

Mark Kenney 17:36

So not an issue. Uh as long as you're going, you know.

Rate Hikes Expose Debt Risk

Brian Briscoe 17:42

Yeah, yeah, exactly. Exactly. 2022 rates started going up. Let's you know, look right before that. You know, where where were you sitting? How many deals, you know, ballpark numbers, you know, what percentage were like variable rate loans versus fixed rate loans and and and things like that.

Mark Kenney 18:00

Before 2022, we had done 95, maybe this, maybe a little higher than that. Because we uh we stopped buying, you know, in 2022. We did one deal in 2023 as a fixed deal, but so 2022 we ended up buying like 2022 deals on you know, just happen to match to the year. So about a hundred deals prior to that. We had done 85 percent fridge debt, yeah. Other ones we were buying, some were you know, Fannie Freddie right out of the gate. Uh, most of the deals that we bought in the you know early days, we were able to either sell or refinance into Fanny or Freddie, really, with no issue at all. I mean, even after two years or less uh the deals, and so but we had bought a lot of you know value add gets thrown out there, which I understand. But I would call we bought a lot of distress deals. We bought properties that were zero percent occupied, 30, 50, and properties that were 95 occupied and kind of everything in between. But in those days, even with uh the bridge debt, you didn't really have the the interest rate fluctuation that happened starting in 2022.

Brian Briscoe 19:04

Yeah, like the federal funds rate was zero is that and then it then it went up 11, 11. I'm gonna say from like 2019 to 2022, you know, most of your like your Fannie and Freddie's were mid-three for that entire.

Mark Kenney 19:18

Yeah, and though they were, yeah, yeah. We have I think the lowest we have is like maybe three, three, two. Just as a side comment, because I think it is relevant, is that people are like, well, why you know, why didn't everyone just do fixed agency debt? Well, a lot of properties didn't qualify for a prolong. Exactly. And even if they did, and you're like syndicating and saying, I'm gonna sell this after like three, four years, and if you would have gotten into like, let's say a fanny that has yield maintenance, you don't even know necessarily go look it up, but it's basically a bad prepayment penalty. So to put that in perspective, if we had the same deal on a bridge loan, we would pay usually between zero and one percent prepayment penalty. Yeah, well, on a Fanny loan, we sold this deal, I think it would have been in 2021, 2020, I don't remember. But anyways, like $8.25 uh $5 million loan, but our prepayment penalty was $2.4 million on that. You know, reality, I'm not, you know, not diminishing the idea of having fixed, but you also have to consider the whole aspect of defeasance, yield maintenance, and then other prepays, they're known. Like on a Friday, you might do step down. So at least you know what that is versus getting to something like, well, I don't know what it's going to be three years from now. You're not mitigating your risk.

Brian Briscoe 20:29

Yeah. The very first loan that I got, first two loans that I got were Fannie Mae. And I've said this hundreds of times. I didn't understand yield maintenance because you know, two years later, we were trying to set we bought it in 2019, and two years later it probably doubled in value, you know. But a three million dollar loan with more than a million dollar prepayment.

Mark Kenney 20:48

Yeah, you know. So that's the thing where people, I mean, it's easy, like you said, to go look back, and people are like, Why is everyone so stupid? Why were they such idiots? Why did they do this? Why did they do that? Well, the people that were making, you know, 300% in three years, yeah. That's how they were doing it. That's reality, right?

Brian Briscoe 21:03

So that is how they were doing it, you know, is is yeah, the more the the higher you leverage, the better your returns. And talking about the the rates going up and the bridge loans, and you had you had some exposure to obviously the the the rates going up. Were you doing rate caps at the time? Were were lenders requiring rate caps at the time, too?

Mark Kenney 21:22

So some lenders were not requiring rate caps, and just to clarify, rate cap is not cap rate for people listening, but it's a rate cap it's interest rate protection, like an insurance hedge. How high can your rate go up? So, yes, we did on some. In general, if the lender didn't require it, we didn't necessarily do it. And people are like, Why didn't you do it? Well, okay, do you think lenders didn't require it? So, what do they think was gonna happen to rate? Nothing, yeah.

Brian Briscoe 21:47

Yeah, most people were saying the federal funds rate might go from zero to two. That's right.

Mark Kenney 21:53

And if you look at it and say, even if you had a rate cap and you fast forward, so 2021 to 2023. Basically, in an 18-month period, the rate caps went up like 3,400%. Meaning ridiculous. You know, if you had a hundred million dollar loan, it was $98,000 to buy rate cap in 2021. Fast forward, like you know, a year and a half. Now when you have to go renew, you're like, okay, here you're $3.4 million. And to make matters worse, some lenders would say, Well, we don't think your deal's worth as much anymore. So we're going to do like a loan rebalance on you. We want $5 million from you as well. So the rate cap definitely can help you protect, provided it's enough protection because it only protects you so much. If you had the option to buy, like, let's say a three-year rate cap, even though your loan is like a two plus one, so a two-year extension, you're probably better off buying it. You could look back and say, Oh, I wish we wouldn't have done that. One, you can sell the rate cap. We've sold some of them for like a lot of money. And you're at least putting garb around how much is this going to cost? If you wait two years down the road and it goes up 3400%, you're screwed. You know? Yeah.

Brian Briscoe 23:00

Now, more for people listening, if rates look like they're going up, rate caps are ridiculously expensive because the insurance companies are expecting rates to go up and so they're going to charge you a lot more. If rates are coming down, rate chat rate cap are expected to come down, rate caps are going to be pretty cheap. In the middle of rates going up, I was an LP on a property where they got a one-year rate cap um when they purchased the property. They paid over a million dollars for the rate cap, but when that expired and they tried to put another rate cap on it, it was almost like we'd rather foreclose on the property than pay this fee, right? So going back, I mean, I remember sitting at the best ever conference in like early 2022 before the rate cap cycle. And all these economists are sitting on stage and saying, Yeah, we'll probably see the federal funds rate hit two. You know, we're we're everybody's gonna be doing things, it's gonna go up to two, and before prices start adjusting, it's gonna come back down, you know. And that was what everybody was saying. And I hate to say I drunk the Kool-Aid on that one. No, 100%.

Mark Kenney 24:04

And other people are like, well, how could you do this? Like, okay, you're using information. I mean, that's that's a lesson learned, too. It's like you need to make your decision based on the information you have today, whether you're looking at a new deal. I I consult and you know, coach people that have a lot of distress deals, people that everybody on listening would know. And I'm like, you need to make your decision, it's a tough decision to get to the point where you're like, I failed, which you actually did. You failed in the project, right? But it's much different when you're like, all I'm doing is dumping money, and I talked to a guy, I guess maybe like nine days ago, and you know, he's dumping you know 50 grand a month into one deal and money another day. I'm like, dude, I did I did all that. I ended up putting in millions of dollars trying to save these deals, survived the 2025. You know what happened? I ended up the exact same spot. The only difference was that the investors lost more money and I lost more money. Okay, and it was a dumb decision to do it. So at some point in time, you need to make a really, really hard decision. It's like the better of the bad decisions, and you either save it, sell it, or surrender.

Brian Briscoe 25:06

Yeah, now pure dumb luck for me. We we had a local credit union where we were buying properties that gave us bridge-like terms with a fixed rate. I've still got one loan fixed 3.7 percent. Nice, yeah. And to be quite frank, if it wasn't for that credit union, I probably would have lost a couple properties. We liked their product, we got in good with them, and we we we I think at one point we had four loans with the same credit union.

Mark Kenney 25:32

Yeah, I mean, are those full recourse loans? Just curiosity. They are they are full recourse. That's one of the differences. Don't get me wrong. I I still, you know, the non-recourse is a little bit misnomer. If you're doing ADC, you're a lot better off on the non-recourse, but a pure bridge lender. So that's it, that is a trade-off, right? You're like, well, hey, you go to a bank or credit union, typically it's gonna be full recourse, which means you can you have personal liability if something doesn't perform on some of the other deals with non-recourse, even if you have car ballots. I mean, these lenders are gonna have a hard time proving that you know these car ballots were triggered.

What Lenders Do In Distress

Brian Briscoe 26:03

Yeah, let's talk about lenders. Let's talk about loans. You know, what what typically happens, you know, when a property starts sliding before the loan goes bad, and then what starts happening, you know, when you start missing payments.

Mark Kenney 26:15

Yeah, so first, I mean, understanding before you get a loan, understanding who your lender is, which I really didn't care, whoever gave the best terms, right? So if your lender's an operator, meaning they run properties themselves and and or they sell their loan off to investors and things like that, they're gonna be a lot less likely to help you. Doesn't mean that they're all that way. So I've been on calls personally, you know, the calls with lenders, and it's uh they're like, we're an operator, we're just foreclosing the property and take it. We can operate ourselves. And then calls with lenders that are like, we're not operators, we don't want the property, let's work something out. So a completely different perspective on how they do it. If you want to go back to your lender and do like a loan modification and you say, Well, hey, I need some help. I haven't seen, I'm sure there are. I haven't seen a loan modification yet that didn't require the borrower to bring some new money to the deal. Like so, you need if your solution is to like, we just want to go with a lender and ask for like a lower rate and this and that, you can do that if you want, but they're gonna be like, Have you got my career investors? Have you do you have money to bring in? We're willing to work with you, but we want some money from you guys. I mean, it's just they're trying to mitigate their risk as much as possible. Communication is key, it is keeping them up to date. I mean, who wants to have a conversation with a lender that you're you're you know can't pay your mortgage? Nobody's not fun for either either party, not fun. Yeah, but you don't want to be the guy that's like you know ghosting them, not returning calls, things like that. You want to just have those tough, tough conversations to compete with them in person, that's probably even better, and try to work something out and say, here's where we're at. But you want you want to have intel too. Like, what's the property worth today if we try to sell it and you get broker opinion values, which really for a long period of time there, they were completely useless. Garbage absolutely. But at least you have the data point, you know, what's your cast position? And then if you're gonna do a low mod, there's a lot of things you can look at, whether it's interest rate, pushing the timeline out, maybe doing partly current pay, like maybe it's you know, people are doing six and three, which is still bad in my mind, but six percent current and three on the back end for interest rate. Kicks the can down the road down the road, and it's and so say you're in default, so now you're like man or in default. Uh, typically you're gonna get called from the lender for one, and be threatening you. You better put the money in, we're gonna come after you, depending on who the lender is, right? And you're like, Well, we don't have it, we can't put it in. We're trying to raise money, and you say, Well, you know what, we can go back to investors, try to get money if you guys, the lender can do a loan modification. Most lenders, my experience, has been, well, we're not gonna do loan modification until you bring the loan current. You're like, Well, we're not putting more money into the deal until we know what you're gonna do a loan mod. Well, that's not the way it works. Bring a current, then we'll talk to you. I mean, it's completely asinine. I mean, anyone who thinks this makes sense is completely all they're trying to do is piece money out of you, right? And I get your position. I'm not, I'm not suggesting that I wouldn't be upset if I was a lender either. So then they're gonna say, let's say you kind of agree to stuff, you say, Hey, I'm gonna put a I'm gonna do something on a pre-negotiation agreement, right? So it's called a PNA. And the PA is, you know, but it's typically a document the lender says, we the lender and you the borrower are gonna sign this document, and it's it says we can negotiate with each other. No details on what it's gonna negotiation will be. In that, as a borrower, typically you're going to you know admit to everything you did wrong, everything you're gonna do wrong, and you're gonna release us as a lender anything we did wrong in the past and anything we're gonna do wrong in the future. Sign this, please. Yeah, no, uh, so yeah, you get to the point first, you're just like freaking, oh yeah, whatever here. And you're like, no, I'm not doing that. And then if I'm gonna be doing stuff and doing they're gonna work other things in there on the loan mod, like trying to get you even more on the hook, more things on the hook. So you you really have to come to the decision and say, well, okay, nobody wants like you say, no one wants to get property foreclosed on, nobody wants to go through like litigation and things like that. But at some point in time, if all you're doing is dumping money into a deal, dumping, dumping, dumping, and all you're like is like your investors dumping money in the deal, and there's really no end in sight, what do you what are you doing? Right, and then you're like signing up to like take on more liability than you had before, it's tough, but you're gonna be like, hey, we just can't make it work, and then you're in a really tough you know decision, and you had need and lose versus foreclosure and things like that, and depending whether it's foreclosure like in judicial, which means it has to go through the courts or not on the timeline, and then you're dealing with stuff like they call it deficiency judgment, where maybe they the lender typically buys it themselves and then says, Oh, Brian, we bought this for like whatever, and now you we were gonna come after you for the difference, yeah. So, you know, you're usually gonna be served, right? So, yeah, you're gonna have someone knock on your door with a you know 300-page document serving you, and you know, if people say, Well, it should just hide. No, don't hide, just take it. I mean, you know, at some point in time, it's they don't have they can go and go through so many things and like, hey, we tried everything, and just a side thing because really important, your registered agent is who the LLC, the address, basically, where legal documents and tax documents, things like that will go. Yeah, so Brian and I are partners, I'm the registered agent, and I move, and I'm just like, I'm off. Like Brian's running the deal, and and we're getting liens sent to my property, we're getting lender lawsuit, blah blah blah. Brian knows nothing about it, yeah, right. And so you want to use a registered agent that is not your home address, not your partner's home address, it's a third party. You want to make sure that both people are on there, that you're getting email notifications for this stuff because I can tell you personally there have been liens on properties that no clue existed because of that.

Brian Briscoe 31:43

That's a good tip, that's a really good tip. And I mean, I I know some people choose not to do registered agents because it's an extra expense every year, but uh completely to do that.

Mark Kenney 31:56

Spend a little, I mean, yeah, I mean, who wants to spend extra money? Well, you're not believing me, it's just you, no other partners, you want to do it, and you're having like an address that never changes, but it depends on the property. You have one property, okay. You probably can contend with it, right?

2026 Outlook And Deal Sourcing

Brian Briscoe 32:08

Yeah, yeah. Okay, we're low on time, and I wanna we probably need to start wrapping things up right now. I I think we could probably talk for like two hours, but I'm not gonna I'm not gonna do that to you. Let's kind of look, you know, forward looking. Okay, right now we're sitting it's April 2026. You know, what do you think the next couple years are gonna look like for multifamily?

Mark Kenney 32:29

Yeah, I mean, you know, it's been rough for the last few years. I think that, and you know, frankly, you talked to me like a year and a half ago. I probably wouldn't talk to you, probably. But curl up in a little ball, you know, and yeah, position. I am excited again, really for the first time in you know, probably last you know, six months here. And I think some reasons why some of the uncertainty is gone. I mean, it just is. It doesn't mean that the risk is gone, but the some of the uncertainty, even with interest rates, I know they're fluctuating here or there, but you know, not 11 rate hikes in a row. Um that part's gone. Some of the insurance stuff is cooled down, but I say be careful of that because you know, next for a king can can change that depending on where you're buying. I believe that um, you know, a lot of people got out of the market completely, which is good. And a lot of the markets are are down. I mean, you know, 10 to 40 percent, depending where you're at across the country. So the the deals right now, in my mind, are gonna be either discounted by the lender because lenders, you know, two years ago, most lenders weren't really negotiating. They certainly weren't discounting deals, they weren't taking like a haircut on deals. Now they are. So those are pretty good deals, you know, and that's gonna, you know, that's gonna make people a lot of money potentially on those deals. And then some of these deals, I think, where people are doing like a cash-in refi, you know, maybe they're short a little bit, they're moving, they were unbridged, stabilized, and now they're going, you know, to like a fixed rate environment from like 11 down to six, you need a million dollars. Okay, you come in as a new investor, sit in front of everybody, high returns, things like that. I still think this year's gonna be pretty darn rough. I do, and I think buying like like if you let's say you have a property you're you're listing, going to buy a deal that's listed, I just don't see it happening right now. I mean, I'm not saying like anyone buying a deal isn't getting a good deal, I'm not saying that, but as a general statement, it's I mean, I we're pretty in tune with the markets and what's happening in the market. And yeah, there are deals we sold where I'm like, I don't know why anybody would buy this deal. Like I never would have re-bought that deal.

Brian Briscoe 34:27

Yeah. First of all, yeah, sellers who don't have to sell this year, there's no reason to sell. You know, it's like you're supposed to buy the dip, not sell the dip. But uh, so so yeah, what what we're seeing on the market is people who are only selling if they have to sell. And unfortunately, I'm in a couple of spots, you know, where we're selling properties because there's there's no other option. You know, it's millions of dollars in or sell and take the haircut right now. But you know, people who are buying in the last couple of years, me included, you know, if we made a mistake, it was hey, it looks like we bottomed out, and we hadn't quite bottomed out yet. But uh, yeah, hindsight, man, gets yellow.

Mark Kenney 35:05

Yeah, oh yeah, yeah, yeah. And I think that uh, you know, I mean, it's it's it's hard to say because of you know inflation, the war and things like that, but at the end of the day, supply is way down from where it was, you know, and you know, a lot of these markets got way oversupplied. So there are a number of things going for multifamily, but I do think this this particular year, I think it's gonna be pretty darn tough.

Brian Briscoe 35:27

Yeah, yeah.

Mark Kenney 35:28

Awesome. Well, uh closing up here, what's next for you? So we're coaching again, which I'm super excited. Again, if you would ask me a year and a half ago, I said I'm done, I'm not doing it. And then I'm like, you know what, I've learned. I mean, what I've learned is just really expensive, hard, tough, tough lessons. And I'm willing to share them. And I can tell you they're they're not like uh lessons that cost like $10,000, $20,000 of savings. I like they cost like millions and millions of dollars and can save millions and millions of dollars. So kicking that back up with the group and in the one-on-one coaching, we have an event we're gonna do. It's not scheduled yet, but it's gonna be sometime in the summer.

Brian Briscoe 36:04

Okay.

Mark Kenney 36:04

Uh, it's gonna be real around like, you know, yeah, what kind of went wrong, but more importantly, what can you do to get new deals going forward and find them on a discount and things like that, how to structure deals differently than we had before. And then you I am looking at deals, but very it's really more on the mostly on the cash refi. And then I have I get contacted two times a week for sure. Mother syndicators, one guy just sent me a deal today. It's a um a Friday loan fixed rate, but just kind of need to get out of it because you know occupancy has dropped, things like that. So those type of deals, pretty selective, but I'm not really actively looking at like you know, listed deals that much. It's all kind of behind the scene type deals, and probably would do deals with with less partners than we had before, frankly, and structured deals differently. But it's yeah, I mean, I'm still I still like multifamily for sure, just a lot smarter about how I'm gonna structure things in the future, make less mistakes and hopefully make a lot more money.

Starter Advice On Risk Control

Brian Briscoe 37:02

Yeah, yeah. I mean, re-rebuilding, you know, after after a crash. So yeah, a lot of people are in a similar situation right now. And all right, next question. If you had to give advice to somebody who's just starting, even though the last 40 minutes or so is you know, pretty much that, but if you had to distill everything down to you know 30 seconds or less, what would that advice be?

Mark Kenney 37:23

Make sure you understand the debt and you need to eliminate as much risk as you possibly can. Like if you get, for example, 35-year loan, you're gonna eliminate your risk, you know, what your rate's gonna be for that period of time. You get a floating rate, you have no idea what's gonna happen. So, you know, eliminate your risk if you can eliminate it, mitigate it if you can, but focus more on your debt location, make sure you understand taxes for you personally, because that's a big thing we didn't get into. The location is huge, you know, as far as evictions and then you know, the type of deal, making sure you're using information based on today to make your decision, not based on what the future is gonna look like.

Brian Briscoe 37:58

Okay, awesome. And last question how can listeners learn more about you?

Mark Kenney 38:03

Uh, you can reach out to our website, think multifamily.com. We have a form out there as well. Um, or we're on social as well. And then email you could do info at thinkmultifamily.com.

Brian Briscoe 38:16

Awesome, awesome. And I was gonna say something about your guide, but I just typed in think multifamily, and the free guide pops up. So for everybody there, he he does have a free uh guide on his website. He posted something about it on LinkedIn. I got it. It's it's a really, really good guide. So head on over to his website, pick at least pick up that free guide. It will cost you an email address, but uh, you know, it's definitely worth it. So well, Mark, thank you very much for for talking as openly as you have. I don't remember if I had hit the record button when I said this earlier, but you know, a lot of people aren't talking about it. And so, you know, very much appreciate you actually talking about you know the reality here. And, you know, hopefully, you know, we talk a year or two from now and you're back on top of the world.

Mark Kenney 39:02

But yeah, for sure.

Brian Briscoe 39:03

Yeah, very much appreciate you.

Mark Kenney 39:05

Thank you, Brian.

Where To Learn More And Closing

Brian Briscoe 39:07

Hey, I hope you got a lot from today's conversation. Uh, if you did, make sure to subscribe so you don't miss future episodes. We're on all major podcast platforms and YouTube as well. Now, if you're ready to move from listening to actually doing, check out the Tribe of Titans multifamily investing community. That's where investors go deeper with live discussions, real time QA, and practical support around capital raising, finding deals, asset management, all of it. All right, you'll find everything you need at thetribe of titans.com. That link's in the show notes, tap it, and we'll see you there.