💰 How this $2.7B investor is buying deals

👋 Hello, Best Ever readers! We just wrapped the Best Ever Conference in Salt Lake City, and it may have been the best one yet. If you weren’t there, you missed out … and we missed YOU!

Stay tuned for a special conference wrap-up edition of the newsletter in the next few days, and we’ll see you at BEC X in February 2026!

Until then, in this week’s newsletter, Joe Fairless finds off-market deals, tariffs arrive, deal volume rises, and community banks suffer.

Let’s CRE!

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CRE HEADLINES

💰 Trade Wars: President Trump’s 25% tariffs on Canada and Mexico went into effect Tuesday, with Canada announcing it will impose 25% tariffs on $100B of U.S. goods in retaliation. Trump also plans an additional 10% tariff on China on top of February’s 10%. China said it would take unspecified countermeasures. 

• 🚨 UPDATE: In the wake of threats of retaliation, President Trump exempted goods from both Canada and Mexico Thursday from the 25% tariffs. The exemption will expire on April 2, effectively delaying the tariffs one month.

📈 Multifamily Momentum: Apartment deal volume rose 9% YoY to $8.1 billion in January, breaking a three-year trend. Price declines moderated to just 1.6% YoY, with average cap rates at 5.6%. Individual asset sales grew 7%, while garden properties saw a 19% increase in transactions.

💸 Lenders ‘Converting’: Lenders are showing growing confidence in Manhattan office conversions, now viewed as viable solutions in an evolving landscape rather than pipe-dream proposals. This comes on the heels of new legislation that has sparked increased interest in conversion funding.

💥 Industrial Boom: Manufacturing expansion in the U.S. continues to drive industrial growth, with 100 MSF delivered since 2022 and another 100 million in development. Construction spending has tripled since 2021, fueled by supply chain concerns and federal incentives for domestic EV, semiconductor, and clean energy production.

🥇 Rental Rankings: Washington, D.C. was January's most in-demand city for renters, according to RentCafe. The South dominated the rankings with 14 of the top 30 cities, while Las Vegas surged 69 spots to nearly reach the top 10.

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JOE FAIRLESS’S STRATEGY TO FIND OFF-MARKET DEALS

Joe Fairless, co-founder of Ashcroft Capital with over $2.7B AUM, gave a keynote speech at this week’s Best Ever Conference, which wrapped up yesterday. In his talk, he shared how his firm is attracting off-market deals in a low-deal-flow environment.

Banks are foreclosing on properties, Fairless said. When they do that, it creates a problem for them, because now they own an asset they didn’t plan on owning. And before they foreclose, they must have management in place. If they don’t, their asset is going to keep tanking.

The solution, Fairless says, is you, the investor — if you get creative.

• What Joe Did: “We reached out to our lenders and we said, ‘Hey, we know that you might be taking over some deals from operators. We have a property management company and we'd like to manage those deals for you — and, oh, by the way, if you can show us the numbers, we'd take a look at buying them too.’”

• The Result: “They sent us six deals,” he said. “All six deals were an opportunity to buy the deal at the debt amount. Five out of six still didn't make sense, even at the debt amount. But one did, and we got [what amounted to] a 4.5% fixed interest rate for five years.”

If you’re not vertically integrated, Fairless said, you can still steal this strategy by partnering with a property management company and approaching the bank as a united front. You pitch the property management firm as a solution for the bank, and — like Fairless did — position yourself as a motivated buyer for the banks’ off-market deals. They’re much more likely to share their deals with you — someone they now know and possibly even trust because you’ve helped them solve their management issue — than an otherwise cold buyer.

WHAT IT ALL MEANS

📣 ”The opportunity to make deals happen in this environment is there,” Fairless said. “It's just a matter of being creative enough and leveraging the relationships that you have and being a solution to the challenges that, in this case, lenders might have. So that is a proven way to get an off-market deal.”

🎙️ Joe also discussed this strategy in further detail on the Best Ever CRE Show. You can listen to the full episode here.

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COMMUNITY BANK DELINQUENCIES SOAR

Community banks' multifamily portfolios have hit a 12-year high of $6.1 billion in delinquencies, according to CRED iQ, representing a 0.97% delinquency rate within a $629.7B loan pool. The last time delinquent multifamily loans exceeded $6B was in March 2012, with peak delinquency rates during the 2008-2010 financial crisis.

• Rising Realized Losses: As of September 2024, realized losses in apartment loans reached $504M, the highest since 2013, marking eight consecutive quarters of increasing losses.

• CMBS Sector Troubles: The distress rate for multifamily CMBS loans surged to 12.9% in January 2025, up dramatically from 2.6% a year earlier, combining both delinquent loans and those under special servicing.

• Interest Rate Impact: Multifamily owners who previously secured loans at low interest rates (2-3%) now face refinancing at higher rates (5-6%), severely straining cash flows, especially for properties with high leverage or slim margins.

With $500B in multifamily loans maturing in 2025, the sector faces a "refinancing cliff." A potential mid-year rate cut offers minimal relief against persistent oversupply and unresolved distressed loans. Without significant improvement, community bank delinquency rates could reach 14-15% by year-end.

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$2 MILLION VALUE INCREASE, 38.8% IRR, AND 62% ROI IN 1.5 YEARS

Joe Downs and the team at Belrose Storage Group increased this property’s value by nearly $2 million and returned a 38.8% IRR and 62% ROI to investors in just one year.

Here's how they did it 👇

🏢 Property Details: This 55,000 sq ft self-storage property is made up of 402 units. It’s located in Mt. Airy, North Carolina, and was purchased in January 2021.

💸 Finances: The property was purchased for $3 million. Joe and the team raised $1,025,000 in capital and secured a $725,000 loan at 3.95% interest.

💼 Business Plan: The plan was to take this property from a dated mom-and-pop operation to one that could be taken over by a large institution in the future. This included regraveling, upgrading the gate, adding a website with a digital platform for customers to pay online, adding tenant insurance, charging an administration fee, installing security cameras, implementing revenue management, and setting/holding a late-to-lien process.

🍾 Results: The property sold for $4.795 million in July 2022. Investors realized a 38.8% IRR, 1.6X equity multiple, 41.3% annualized cash, and 62% ROI in just over one year.

💪 Biggest Challenge: The biggest challenge was having to explain what was happening to the customers after the repairs and upgrades. Some issues included explaining auto pay, why they were raising rates, and going more to a digital platform.

If you have a deal you'd like us to feature, share it with us!

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FREE DOCUMENT DOWNLOAD

The Ultimate Success Formula for Finding Deals and Private Money

This document outlines the five-step Ultimate Success Formula (originally developed by Tony Robbins) and how to use it to find deals and private money as well as apply it to any business, personal, relationship, fitness, or overall lifestyle goal you pursue.