How a 31-Yr-Previous Constructed a $7.5 Billion Multifamily Actual Property Empire

This tale at the start seemed on Trade Insider.



Sean Kia by way of Trade Insider

Sean Kia

Los Angeles-native Sean Kia, 31, has been a little busy the previous couple of years.

Between 2019 and now, Tides Equities — the funding corporate he based in 2016 and has run ever since — has constructed a small empire of condominium complexes in Solar Belt towns like Las Vegas, Dallas, Houston, and Phoenix.

Simply 3 years in the past, Tides owned $2 billion within the condominium houses. Nowadays, that quantity has grown to $7.5 billion, in step with Kia.

In that period of time, Kia mentioned Tides has grossed masses of hundreds of thousands of greenbacks for itself and its buyers via solving up decades-old constructions and reselling them. Tides deployed $7 billion in 2021 and 2022 on my own, making it one of the vital nation’s maximum prolific consumers at the same time as the whole marketplace for multifamily houses was once cooling, because of emerging rates of interest.

With Kia on the helm, Tides counts greater than 600 people as his buyers along with family-office and private-equity capital, together with main companies equivalent to KKR. The corporate now has 31,000 devices throughout its portfolio.

This was once a imaginative and prescient that Kia had at simply 25.

An meeting line method to genuine property funding

After a number of years within the trade of shopping for and promoting condominium constructions for different firms, Kia spotted there have been techniques to make the method extra environment friendly via decreasing renovation instances.

After a number of years within the trade of shopping for and promoting condominium constructions for different firms, Kia spotted there have been techniques to make the method extra environment friendly via decreasing renovation instances.

The Tides on seventh condominium complicated in Phoenix was once a up to date acquisition. Tides Equities by way of Trade Insider

So, he began Tides and implemented the Ford style of large-scale manufacturing to his offers. The assembly-line method was once helpful for his number one industry, which was once to renovate the houses and promote them at a benefit.

“Let’s create an assembly-line method to real-estate making an investment and do the very same factor on each unmarried construction that we purchase,” he mentioned, recalling the power to begin his trade. “As a result of while you do away with variables, you do away with dangers.”

Kia reeled off a couple of examples of Tides’ trade. In July of 2020, it purchased a 236-unit condominium construction in Phoenix for $27 million, spent $3 million on upgrades, and bought it simply over a yr later for $59 million. In any other deal, it paid $89.5 million for a 472-unit condominium construction in October of 2020, spent $4 million on renovations, and bought it for $137 million in November 2021.

As a result of Tides makes use of a lot the similar renovation plan for every acquisition, it will probably ceaselessly get started the paintings even earlier than the ink at the sale contract dries. That is imaginable for the reason that corporate usually secures its financing prematurely.

The very best spots

Any other secret of Kia’s is his consideration to location. Towns should be a laugh, inexpensive, ripe for in-migration and situated for task and salary expansion, he mentioned.

He is been checking the ones bins since he were given a get started in Phoenix, which turned into house to probably the most corporate’s bread-and-butter investments. The everyday renter were paying best 20% in their source of revenue on hire, which represented “in point of fact excellent affordability,” Kia mentioned.

“It appeared find it irresistible had the entire elementary form of tailwinds that would in point of fact lend a hand propel Phoenix to one of the vital main funding markets,” he mentioned. “Rapid ahead a couple of years later, we are completely proper. Phoenix is within the best 5 markets within the nation.”