EP. 57 // Alternative Investing, Distressed Real Estate, and Navigating Market Cycles w/ Jack Krupey
On today’s show we have our very first repeat guest; CEO and Founder of JKAM Alternative Investments, real estate investor Jack Krupey.
What if you could unlock the secrets to making a fortune in real estate during times of crisis through alternative investing? That's exactly what we explore in this captivating episode with our insightful guest, Jack Krupey, a seasoned real estate and finance expert. Together, we delve into Jack's fascinating journey from the IT industry to the world of real estate, and how he navigated the challenges of the dot com crash and COVID-19 to build a successful career.
Join us as we discuss the intricacies of buying and modifying non-performing loans, and how Jack's unique strategies helped people who were underwater on their mortgages. We also venture into the realm of entrepreneurship in Puerto Rico, as Jack shares his experiences taking advantage of incredible tax incentives and joining the vibrant entrepreneur community on the island.
Lastly, we uncover the amazing opportunities available for private equity firms and investors in the distressed real estate market, such as bridge loans, Fannie and Freddie loans, and repositioning strategies for maximum profit. Don't miss this enthralling episode filled with valuable insights and inspiration from a true real estate expert.
In this episode:
Real Estate Executives Talk Investing
12:52 Navigating Financial Challenges in Real Estate
17:56 Buying and Modifying Non-Performing Loans
29:07 Entrepreneurship in Puerto Rico
38:26 Private Real Estate Investing Opportunities
42:47 Opportunities in Distressed Real Estate Market
-
Eric Panecki: 0:06
How's it going everybody? I'm Eric Panecki, i'm David Choi and I'm John Libretti, and welcome to the Deals and Dollars podcast.
David Choi: 0:13
The three of us are real estate executives in the New York City metro area. Every week, we bring on the best real estate investors and entrepreneurs we know to talk about how they made it in the business, how they sourced their deals and, most importantly, how they make their dollars.
John Libretti: 0:28
Quick disclaimer the views and opinions expressed on this podcast are for informational purposes only. It should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action. All right, let's get into it All right, all right, all right.
David Choi: 0:46
Today we have an awesome guest, a repeat guest, jack Krupey, in the house. How are you doing today, man? I'm doing great. It's great to be back.
Eric Panecki: 0:55
Jacky boy, let's go. I'm excited to have you on. I wasn't here for the first time you were on. I'm excited to hear your story. I've heard amazing things from Dave. I think Dave probably could do a great intro on how you guys got linked up, but I'm personally excited for this one.
David Choi: 1:12
Yeah, i'm going to be honest, jack had a major impact on where we are today And I don't think Jack gets any credit for that. I don't think I've ever told you, but we were at CG. I did a presentation on social media branding. And he pulls me aside and he's like, have you ever thought about just raising money? I'm like, well, maybe, i mean, that's not really necessarily my forte, i'm really a deals guy. And he's like, listen, there is a whole world of finance out here that you're not monetizing And it's actually significantly more lucrative and less of a headache. And so he introduced me to the fund, to funds world right, how to basically find great deals, great operators better than yourself and invest directly into their assets and their projects and helping your investors achieve really solid risk adjusted returns and really creating a win-win for everyone involved The sponsor, your investors and yourself. And so that opened up a whole world for me, and since then I've done a ton of research on it And we're actually doing two deals just like that. And so, jack, thank you for making us millions and millions of dollars, man.
Eric Panecki: 2:32
Jack is probably waiting for that referral fee.
David Choi: 2:53
You got it. You know it turns out I actually have a dinner to attend after this podcast. So I'm just kidding, no, we'll get some scotches man. So so, jack, what we didn't get to do on the first podcast is really get to know your background story and what makes you take. Can you kind of share, share with the audience?
Jack Krupey: 3:09
Yeah, absolutely So. it's actually a good timing to be telling the story, because I got out during the dot com crash. You know I've been through three or four recessions already and, you know, making me feel a little bit old, But I thought I was going to be in the IT industry. It was, you know, the late 90s. I got into the internet early on with like AOL and Prodigy. This is probably way before. you know you're all's times here.
Eric Panecki: 3:32
I am instant messaging.
Jack Krupey: 3:34
I get away messages.
David Choi: 3:35
Yeah, i had AOL with the.
Eric Panecki: 3:37
you could even answer the phone, you know I actually got broken up with on a girl's like the status the status my name in a heart And I said Eric in a heart, and then one day I had like someone else's name.
Jack Krupey: 3:49
So I was helping my real quick aside I was helping my mom a couple years ago with her computer and she was the last paying customer for AOL. She had just never canceled it. They were still billing her like 995 a month. So I'd ever cancel AOL. I think this is like 2019. It was embarrassing, holy moly. So, yeah, so I basically, you know, i went up to college in Rochester, new York. I was really into the internet. I was just fascinated how everything just connected together and thought I was going to be some high tech computer consultant. To then 2001 happens And luckily I had a job. There was a, i had an internship in New York City, then there was a consulting firm in Rochester. So I had a job, but it wasn't really as exciting as I thought it would be And I was making 50 grand a year in 2001 in Rochester, which was actually pretty good money. You know, with inflation it's probably, you know, like a low six figure job. And you know, i think my house, i had a, i had two roommates, so I was paying like 250 bucks rent, lived behind the bars in Rochester And I was living like a king And yeah, with that said, i wasn't really fulfilled with my career And it was a couple months after September 11. So airfares were like $100. And me and my buddy Steve went to Vegas for like a four day weekend And I saw the glitz and the glamour there And I'm playing like with $50 at $5 hand blackjack And I just see people throw throwing around money And I was like I need to do something more. I just sensed I wasn't going to have any immediate path to make additional money. So, and before that my aunt had bought me Rich Dad, poor Dad. So I read that book for my high school graduation. So I had some familiarity with, you know, assets and liabilities And that real estate was one of the ways. And I bought this book at Hudson News. It was one of those paperbacks like how to make a million dollars in real estate. It was. It was like a Grant Cardone book before Grant Cardone was in the business basically. And I get back to Rochester and was all fired up and called my landlord And he was a real estate broker who owned about 15 buildings in and around Rochester, mostly in the college areas, and this was 2001, 2002. So if you could fog a mirror you could get a mortgage. And you know, 60 days later I've got a house, almost no money down. It's like a $60,000. Two family rented for 1100 a month and just jumped right in And within a year after that I had four of them, did a lot of creative financing, had a couple of assumable loans. There was still FHA assumable act then where I was able to. Basically, i think I bought one house for $384 down And yeah, it was. It was underwater too, not not physically underwater, but Rochester.
Eric Panecki: 6:13
Mortgage was more than the value.
Jack Krupey: 6:15
Yeah, this was Rochester and they hadn't really recovered from, you know, kodak and Xerox. It was kind of it's not quite a Rust Belt town like some of the others, but you know it was not exactly a booming economy at the time. So it was a really good place to get started. It was cheap And, you know, on a $50,000 salary I could get into a few houses. Then we started doing.
Eric Panecki: 6:33
Sorry I cut you off. You were still working your, your your nine to five at the time.
Jack Krupey: 6:36
Yeah, for about a year, year and a half. Then I think I got I picked up a first investor that had a few hundred thousand of private money And then that was really when I made the jump to go on my own And then started a, got my broker's license, did some wholesaling, We sent postcard. This was well before the era of texting and all that stuff. But we bought these little yellow postcards how to you know that we buy houses type cards And it was $700 of investment. I was afraid to do it And I think we made a hundred thousand on that mailing We were sending to landlords just absentee owners and uh, that's some good ROI. Yeah, yeah, it's one of those lessons I sort of try to remind people now is that you can't be afraid to spend money on marketing. You know, nowadays it's Facebook and other things, or you know, i don't know if direct mail still works. Do you guys even bother with direct mail, or?
Eric Panecki: 7:23
It works We don't really do a lot of it, but it definitely it's like a.
David Choi: 7:26
It's like a one 1.7 ROAS it's. You got to and you have to wait like six months to get to get your money back. It's just. It just doesn't work in North Jersey. Some other people in different parts of the country still make a killing on it, but we just haven't had much success in recent years.
Eric Panecki: 7:44
I think definitely it still works, though people do, i mean people definitely do, yeah, no, people crush it.
David Choi: 7:48
I just think that we're in a really saturated market, so anyway, please continue, sure.
Jack Krupey: 7:53
So, yeah, from this was, you know, oh one to oh three, oh four. You know we're, we're booming. We were still figuring things out, but we were making good money. We had a lot of people coming in from California and New York to buy cheap properties up in Rochester. So I would put things on loop net at a 18% cap rate, when you know New York is four or five or three or you know, zero practically, and so people were flying in buying houses. They're taking their equity from New York and California and buying properties up in Rochester. So you know we were, we had a really good run. One of the challenges, though, this was the turnkey model, and there was really not a lot of good property management companies, and and you know, these were, you know C neighborhoods. In many cases, that's where we're able to find. Sometimes we find houses for $10-12,000, fix them up, sell them for 50, and You know we wanted to do well by our investors. So we ended up creating our own management company, which is definitely a money pit and it's also just, it's a thankless, a Thankless job. And you know, since we were the ones that sold them the houses to we, you know we would eat repairs, you know, whenever possible. And it, you know It was. It was meant to be a loss leader but it became a real, a real loss leader And you know we certainly, you know, gave back a good chunk of the profits We were making on many deals and just creating a headache and creating myself a job. I hated, yeah, and you know, fast forward around 2006. I mean we saw the writing on the wall early for you know, we just it was starting to take longer to get loans done. You know we had a lot of people using countrywide in DMACC first, franklin, basically every mortgage company that went out of business. Those are the ones that were generally doing cash out, refinances and or investment property purchases. So eventually the business just kind of came to, came to a stall.
Eric Panecki: 9:29
So so your buying houses, you're fixing them up, and then you have guys looking for, like turnkey, you know the 18% on their money kind of thing, and then you're managing him for the investor.
Jack Krupey: 9:40
Exactly, yeah, yeah it was. It was a bulk. Probably 80% of our business was turnkey out of town investors. And we did do some, some wholesale locally. If it was a more of a suburban property or if it was something that was a real heavy Lift, that was better for a general contractor. Yeah, we would lay those deals off and in hindsight we did better. Yeah, those deals where it was a pure wholesale to, you know, a proper general contractor, we did better, made a much higher return than trying to do it ourselves, because because then you were stuck managing it after a fight. Exactly, you didn't own it, exactly, yeah but it's what you do when you're you know we don't like managing our own property, Managing someone else's that we don't own? I can't yeah the downside to is this is Rochester money, not New York City metro area North Jersey money, so the margins were a lot thinner as well.
Eric Panecki: 10:23
Got it Okay. so you're buying properties, you're you fix them up, you're selling turnkey to investors in New York, and then you see the writing on the wall in 06 and you start slowing down is that I mean, some of that is in hindsight.
Jack Krupey: 10:36
I saw there. Yeah, we saw some of it on the wall but you know it's certainly didn't get out fully unscathed. You know we had a team of people and I didn't have a mortgage company and I didn't see that There was actually people from Rochester that were doing loans in California. I think there's coming called mortgage IT. So there's a bunch of people sitting in Rochester just doing direct mail to California and, yeah, phoenix and making a hundred grand a month from Rochester. But I just never thought there was money in mortgages because I saw these hundred thousand, two hundred thousand dollar houses in Rochester. It's like not worth the paperwork. So yeah, the business kind of just froze up. It was harder to get deals done and you know It was a pretty scary time. You know it was. Fortunately most of my properties weren't really underwater, but it was really tough to get deals done and we had more overhead than you know then the typical rental rental supported at the time. So we really needed to make money on flipping and having the extra income come in. So Yeah, it was. It was a grind. I didn't didn't go fully broke, but pretty close and actually had a couple properties that You know just kind of got caught in, so I ended up having to walk from a few properties in in 08, and Most of the rest of them were able to sell. Or, you know, i gave them to a business partner when I moved out, moved down to New York City, just because they, you know, they were basically break-even. There's no equity, and, yeah, you really had to kind of just be there on site to manage them yourself. So it was a tough time, and it was. It was one of those things where I was 28, 29 years old, i thought I was gonna be retired by 30 31, and, you know, all the sudden, i was really just kind of a, you know, internal crisis of confidence as well. I remember that being, you know, worried, that it was just, was I naive to think I could make it, you know, grown up in Jackson, new Jersey, just like a, you know, working-class, middle-class family. I, you know it was really an ego check for sure, and you know, took me, you know took me a few months to really, you know, get my wits about me, but ultimately, that crash was probably the best thing that happened to me, though, because I ended up at a private equity fund in New York that needed real estate people because they were buying the non-performing mortgages. So I ended up coming down in New York City and December 2008 I'm working on Wall Street at a fund buying non-performing mortgages And they needed somebody that could kind of review short sales. They were actually selling loans to investors. So the fact that I had turnkey experience was great, because they were creating a new market of selling loans And a lot of real estate investors at the time were were moving into buying the debt on it. So it was certainly a great, a great pivot. That would have never happened without a little bit of pain From from the financial crisis.
Eric Panecki: 13:00
That's amazing, i mean. I feel like we kind of went through that a little bit right For a little while. We were, you know, we're just straight-hole sailing right and you're buying some properties here and there And then, and then COVID happened and that was like kind of like a gut check. It's like, i mean, i was what, 20, 27 at the time, you're 24, 25 And we had just went from making like more money than we ever thought we'd be making, and then you know, we get COVID goes away and we're stuck back to making money. We're killing it again, and then all the rate hikes happen and everything, everything slows down. It's just, and I think for us It was the same thing. It's like, like, like, are we, are we actually good at this or we just got lucky before? And then you know we had a pivot and and now we figured out you know a lot of other ways to make money And for us it's been probably the best thing that could have happened to us is because, you know, we didn't, otherwise we'd just be cocky, blowing money every, everywhere, right. So I think that's, you know, for a lot of people, you know that gut check, you know, and that in the moment seems probably like the worst possible thing that could happen, but then always looking back It's like, wow, i've really needed that right.
Jack Krupey: 14:03
Absolutely. And the one thing I've taken away from that when I look at businesses now is is it a trade or a business? and To some extent what we were in at the time was that was a bit of a trade Because we were, you know, we were managing these properties for thin margin. We were making money one time, as opposed to, you know, some of them. If we would have bought low, kept our basis low, just rented, you know, done the renovations and and just lived off that cash flow, we would have been in a different position. But you know, it's also the challenge of being young and under capitalized. And you know one of my mentors and he was actually he had semi retired and moved up to Rochester And he, when things were getting tough you know, was was one of the lifelines, you know provided some capital and was, you know, really just kind of bought, almost came in as a new partner In the in the business and you know he said there's nothing. You know he's really nothing. You really did wrong other than you're under capitalized And that's why a majority of businesses fail is you're under capitalized and ultimately you run out of money. You fail.
David Choi: 14:59
Yeah, that's a good point. I mean, i sometimes think that if we had bought the properties that we wholesaled, i mean we would be loaded.
Eric Panecki: 15:08
Yeah.
David Choi: 15:09
Okay, if we just raised a couple bucks instead of gotten, you know, got greedy on on making that 40, 50, 60 thousand dollar wholesale fee And just took a smaller bite up front, maybe an act fee, and just kept that.
Eric Panecki: 15:21
I mean, dude, we, we, you know we'd be sitting really really really pretty, yeah, but definitely would have required some investment at some point, right.
Jack Krupey: 15:28
Yeah, absolutely, and you got it. You know it's, you know Somebody. Maybe you have a rich uncle and you're able to just just do it, or maybe you you've got the right connections. But, yeah, most people, at least your your first time through, you end up bird dogging and, and you know, just generating. You got to generate your initial million. They say the first million is the hardest, yeah, and so I think it's something that I think most people go through. I think back to Rochester now and I have mortgages that would have been paid off. You know, i assumed a 15 year. One of the loans I assumed is a 15 year loan that would have definitely been paid off. There were in others that, yeah, would be so far down and probably be close to paid off at this point. Now, great, i'm knowing me. I probably would have refied them all when rates were 3%, but that's a whole different story. Well, you were refied them at like 4 and then again at 3 2, 1, 1, 2 and a half, again paying hundred thousand dollars in points. By the time we're all said and done.
Eric Panecki: 16:17
John, you probably see that right. Yeah, people were constantly refinancing. Oh yeah, people were trying to win down.
John Libretti: 16:23
When rates were at their lowest, i was closing some deals at like 2.75 2.8. Yeah, people were refinancing. As you know, they were just trying to refi as much as humanly possible.
David Choi: 16:32
I got into the game with the dream that you know financial freedom. You know by properties Keep them low, low leverage, really. Milk the coupon clippers, get the cash flow going and then you have an opportunity to pull out like $600,000 on a refi and it put 600 grand in your pocket and it's really, really Hard to say no to six hundred thousand dollars at 3%. You know, but it's the people that do, you know the people that have been in the game a long, long time, that that they'll all tell you Low leverage, you know if you can pay off as much of them workers as you can. I mean, it's like old wisdom that is really hard to listen to yeah, it's.
Jack Krupey: 17:09
It's depends on your situation. I mean you're, you're an active investor, you have plenty of places to deploy that capital. The guy who takes that 600 grand and buys a boat, yeah that's, that's not a good use of the capital.
David Choi: 17:21
That's true. Yeah, we did take that six hundred thousand dollars and dump it back into this Yeah, definitely.
Jack Krupey: 17:26
As long as you avoided the 3f's when you made your first million or those. Anything that flies, floats or you. And that's not even a sexist comic, because I could go both ways. We know some lady bosses in CG.
John Libretti: 17:39
Yeah and they Flies floats. Oh some do all three.
Jack Krupey: 17:47
Let's move on that make it edit it out?
Eric Panecki: 17:49
Yeah it might all right. So all right, you're. Now you're, you're at a private equity company, you're doing. I guess are you doing like workouts, or?
Jack Krupey: 17:56
yeah, it was a combination of analyzing, you know, valuations of properties, figure out which ones had equity really. Just we had. We would buy a thousand loans at a time and most of them were Nonperforming second mortgage home equity lines of credit. So when national city failed, pnc took over. Then PNC sold a hundred, couple hundred million dollars of non performing seconds, for I think the entire portfolio was three cents on the dollar. I mean, this is 2009, three cents on the dollar. And they were California 400,000 $500,000 home equity lines of credit on there. But at the time there there was no modification programs formally. I mean we didn't know if half the portfolio would get foreclosed out, 80% of it. It was really difficult to model that and Really you didn't even know what had equity or what didn't, because when you're buying a thousand loans You know you're not gonna do a thousand appraisals or even a thousand brokers price opinions. You're trying your best to use whatever you know Zillow or realty, try whatever was around at the time And you just know that sort of the law of large numbers will work out and a certain percentage are still gonna have equity, cause there were people that had really low first and just took a large Halock out and maxed it just because it was. I mean, most of the banks then had no closing cost Halocks. So there were definitely deals that had equity. And so, yeah, i was doing a combination of just doing a deeper dive in the valuations of deals to figure out, yeah, which ones could we foreclose from second position And I'm sure everyone in this room probably knows this. But you could foreclose from second position. You don't have to pay off the first, you can reinstate the first And the first it's usually going to some lock box like a PO box. So if you send in a check of the person's 15, if you foreclose from second position and that person's $15,000, $20,000 behind in their first mortgage, you just send in 20 grand to the you know the address on the statement And, yeah, that loan's current, and you just send in a check every month and you have non-recourse financing now. So it was a combination of figuring out which deals do we foreclose, which deals would you be modifications on? And we did a ton of modifications at the time because there were a lot of properties that were, you know, close to underwater. But you know, we learned that there's a lot of emotional equity too. You know there were people that were, you know, if you look at Zillow 100,000 underwater, they didn't want to move. And if their credit was already messed up maybe because they were behind on their second already, so they couldn't go buy something else cheap And as the modification started happening and the government started forcing modifications, it was really a gold mine because the first liens got modified, often at 3%. They, you know they would take any past few payments, put it on the end of the loan and we would do a lot of the same thing or we'd offer discounted settlements. Some people had some money saved and they, you know they were strategically defaulting because they thought the loan was just gonna get wiped out. And when they realized we were there, we own it and we could foreclose if we wanted to, but that we were also willing to make a deal. You know we had loans we paid $5,000 for and would settle for 30, and they had a $100,000 balance. So it was a really, really cool time because, you know, it was really the first time that banks didn't know the loans and people were shocked that they're dealing with this small company that could really make a deal with them if they wanted to, and a majority of people were, you know, honest people that just ran into a tough time. And if they lost their job and got a new job and we didn't need 55 pieces of information, it's like send us, you know, send us your pay stub, show us what you make, fill out a one page modification form. And we just made smart decisions where some of the big banks you know if you're missing your third year of tax returns, they just wouldn't, they would just automatically deny it. So we would even pick up applications that were denied previously and we just look at them and it's like, hey, this person could pay, let's make a deal. So yeah, learned a lot there. And then I also started selling loans. So I had a lot of other investors that were buying performing loans. We would modify loans and sell them to investors for cash flow. It was great business. The problem is, you know, the owner of this company is kind of infamous in the space and I was there about a year and a half and just didn't really see any path to make real money. There was a lot of promises but ultimately I saw how much money a lot of the clients were making in the business and I'd been an entrepreneur myself and it's like, yeah, this is not the spot where I'm gonna grind and make millions of dollars. I'm not gonna make it working for not that you can't do it working for someone else, that's a good partner. But in this case I didn't think I was gonna make any money staying. So I ended up leaving and then doing some brokering for a few of my clients and eventually linked up with just a guy in New York who owned a couple office buildings. We met at New York real estate conferences and at the time I also put my license for the commercial brokerage. The thought was I would go to New York Community Bank and a lot of the community banks and maybe find some non-performing loans and broker on the commercial side and was close on a couple deals but never quite got that big. Never got that big six, seven figure commission for doing a large deal in New York. It's a tough business but because of that I met this guy and he put up a few million dollars and we just started buying residential loans again And that was about two years of just using a few million dollars buying and selling loans. It was a good lifestyle business. We wanted to purposely wait two years to build a track record And we were making enough that it was a comfortable living. I was personally very happy because, after all the stress of all those years and grinding for a couple years on Wall Street, if a conference started in Vegas on a Thursday, i'd be going out the prior Thursday, have the weekend in Vegas, work remote. It was a great time. And just about two years in, though, somebody hit me up on LinkedIn. They wanted to talk about buying non-performing loans, and we meet at the Loose Hotel in Manhattan I think it's like fifth and 50 something, and I think it's like a couple guys from Long Island that maybe have a few hundred thousand dollars, and I'd get a lot of those calls, and it turned out it was a couple of ex-Bear Stearns guys that had 140 million dollars and were relaunching their fund that they used to run inside Bear Stearns as a prop desk And took this meeting, and It was a good meeting, but I didn't leave it saying like, oh, they're going to give me money. It was really like an exploratory meeting. It was like, hey, we'll stay in touch and see what could happen That night, though the old partner that gave me a few million dollars he was a member of the club called the University Club, which is not the kind of club I can get a membership to myself in general. But yeah, we go there for dinner and then we go into the tap room after for a drink And the CEO is there with the CIO. So it's one of those feet luck. I think just seeing them again that night probably had something to do with getting the relationship further. It's like, ok, this guy is, he can get into the University Club. This can't be a complete screw up. And yeah, about a month later I had a portfolio that we saw. I sent it to them And they wanted to start a test fund. So I started with a $10 million science experiment, as they called it, and we helped them deploy $10 million and then did another 10. And then you deploy into notes. Yeah, to buy portfolios. So I was buying smaller. We had $2, $3 million. We were buying 5, 10, 15, 20 loans at a time. Once we had real money behind us, i went to Fortress Nomura. We were going to the bigger guys and we were able to get some portfolios off of them as well And all of a sudden we had about $100 million purchased And we had to co-invest 1% of that. So we have a million bucks into deals And we had a carried interest on top of that. But we're eventually going to run out of co-investment money because they wanted to go bigger. So they ended up partially acquiring us and said, ok, you don't have to co-invest anymore, but we're starting a new entity, you'll own a smaller piece of it And this entity gets a piece of carried interest on a much larger number. So it was amazing. But I also didn't know what I didn't know at the time And that led to some of the future stresses I had, because I thought, oh, it's carried interest, if you have to beat a certain return and you do it, it's going to be taxed at 20%. But because we weren't the owner of the big fund, we weren't technically a GP, we were technically a subsidiary that was receiving fees. So I had eventually built up all this money that was going to get taxed at 50% like a Wall Street bonus And it completely changed the math on my thoughts on hitting my number and slowing down Because I got into real estate to not that I'm afraid to work, but I got into real estate because I wanted to control my time And unfortunately this was that Wall Street culture. And even another business partner where I brought in who I worked with at that original firm just kind of grew up in that Wall Street culture. It's like grind, grind, grind. I heard more than once it was sort of a badge of honor that wake up before your kids are awake. You don't get home until after it's dark and your kids are asleep. And it was like a badge of honor that you don't see your kids during the week And as, like being an entrepreneur like I know you can do better than that. I know that there's better out there. So it was something I kind of battled with And there were some political things that came from that, just because if something goes wrong, it's like well, jack's not in the office 90 hours a week. So this went wrong And it would have went wrong anyway. We were in transitions for things, so you just have growing pains when you buy 30,000 loans in a bunch of years. So it created some stress. I ended up I became a proper New Yorker. I went to see a shrink It's like the other badge of honor for New York City And the thing was I couldn't sleep And I couldn't open my mouth all the way. The stress was causing TMJ in my jaw, oh jeez. So yeah, i ended up going to see somebody, got some anxiety And once I made the decision to leave, everything went away. So look, at the end of the day, they treated me all right. The other crazy thing is taxes. When you're a real estate professional and you're in the business, it's usually not as much of an issue because you get a lot of depreciation. But on the debt side of it, there's really not tax benefits for being a mortgage lender or buying loans and hedge funds. So everything was at 50% And I owned a piece of the company. So while I was working as an employee, it was all active income And I was literally making more from owning the company than my salary. So it's like why am I going through all this when I'm only literally keep. I'm basically working for half of every dollar. I work for a salary. Once I left as an employee, it became passive income, so I technically made money by quitting and leaving, because now it was all passive And I could use those investments to invest in things passively. So it's just a really weird math when, if you're a business owner and also an employee and it's something that a lot of entrepreneurs who are still working full time in their business it's an interesting calculation you need to make on. Is it worth still running your business Or do you take on a partner, bring in a CEO? How do you figure out how to transition when you're at a point where your business is mature enough that you may either be able to sell it or have it run without you grinding day to day?
David Choi: 28:57
That's pretty amazing, man. So you actually ended up leaving the company on passive income, net of tax has made more money.
Jack Krupey: 29:05
Yeah, at the time, yeah, it worked out better. Now, the moment I wasn't there working as an employee, i wanted to get bought out. They somewhat wanted to buy me out. I was just because of some of the things that happened. I was a bit afraid that they were going to give everyone big raises and all of a sudden take away some of my just because some of the butting heads and bad blood, and ultimately they took, i think, reasonable care of me. I also moved to Puerto Rico, so by getting bought out, it ended up being pretty efficient because I moved and it was a couple of years later. I finally got bought out, but it became apparent that a buyout might be a better, more efficient way to go so I could have more money in my pocket and it gave them a slightly better deal. So ultimately it all worked out and now I live in Puerto Rico. I'm a block from the beach. There's incredible tax incentives down there and there's about 10,000 people who've moved in the last eight years that are entrepreneurs. So the scene down there is incredible. There's everything from stock traders, options traders, crypto guys like Peter Schiff moved down there and just a lot of just random people who just have random businesses, really anything you could do remote, where you don't have to physically be on site including a lot of internet marketing people, some podcasts, so John Dumas, entrepreneurs on fires down there. It's a really interesting collection of people and that's what's keeping me there. Is any day you could be in a meeting like this with a couple successful entrepreneurs that are just good guys that wanna come out and talk business. So it's been great. It's like joining a country club, but instead of paying your dues, you save 90% of your taxes.
Eric Panecki: 30:41
I love that.
John Libretti: 30:41
And we were talking about this before. You said the capital gains tax. There is no capital gains tax in Puerto Rico, is that correct?
Jack Krupey: 30:47
Yeah, so as part of the tax decree and this is the one part that's a little more controversial to the locals when you move there and get it's now filed under Act 60,. There's no short term or long term capital gains tax for, i believe, 20 years And that's on Puerto Rico sourced income. So that's stocks, options, that type of stuff. Real estate is still taxed where the properties are, so real estate would still be US sourced, but for active stock traders and for options there's a lot of options traders, a lot of crypto traders down there completely tax free, whereas in the States it would be short term. So they're gonna be paying, you know, likely 50% tax rate if they're a good trader. So that's that. That part's lured a lot of people. The other part of it is the Export Services Act. So it includes fund managers. I know there's some lawyers down there, there's radiologists, even where any. Essentially, if you have a business and you make money from off island, the island only charges you a 4% tax And then there's no tax on the dividends you pay yourself from the profits from the company And you don't pay federal income tax. If you're a bona fide resident of Puerto Rico, so it's an incredible opportunity And that's open to locals as well. But if you're just like a standard lawyer or somebody who makes money just on the island of Puerto Rico, generally the tax rate is 33%. So without the incentives, you know, it doesn't make sense financially to go there. But the Puerto Rican population had been in decline for about 20 years. It had been a long recession. So you know it's it's an aging population and they needed to do something to recruit more people to the island. I love it there but it was not on my radar. I wouldn't have just picked up and moved there randomly. You know, maybe Florida I think most people. The typical thing to do is you go to Florida because you save on the state tax And you know the where the awareness still isn't there I think. I think a lot of people that move to Florida if they really knew they'd probably go further down to Puerto Rico. And you know, i know we've, you know I've paid a fair amount of tax to the island and I spend a lot of money down there, so I think it's been good for the island. There is a little bit of a vocal minority, there's a gringo go home movement, so there's a little bit of noise from people who just disagree or don't. But you know, nothing that's caused any. You know I've never had any, any issues myself. Everyone's been super friendly to me down there and you know very happy down there And it's still. I still get to come up to Jersey and to hang out and have meetings and and you know, but ultimately after that you know I void the winter here for sure.
Eric Panecki: 33:10
You know, you do have people in New York bragging about having a therapist Right, like that's like a thing, like oh, i spoke to my there.
John Libretti: 33:16
Definitely in Puerto Rico they're not bragging about having therapists, i don't think you just walk half a block to the beach and you know like that is your therapist. Yeah, That's.
Eric Panecki: 33:24
That's kind of crazy that the job can can put you in that position. But I mean, i mean you're still, you're still obviously working right, i mean yeah, yeah, so yeah.
Jack Krupey: 33:35
I guess to finish the the long winded, this is my life story. So yeah. So it was down in Puerto Rico. I took twenty nineteen and I have a non-compete anyway. So I took twenty nineteen and I did this executive MBA program through Kellogg School of Management, northwestern in Chicago. They have a global MBA program where you basically travel to a bunch of sister campuses in different parts of the world, and Hong Kong being one of the biggest, their biggest partner. So, twenty nineteen, i was back and forth to Asia. I think six or seven times We had classes in Tel Aviv, israel, so got to do Jordan, did Petra and Wadi Rum Yeah, there's also a campus in Miami and you know spent the year, you know basically traveling and what you do is you spend a week and a time in class. So it wasn't like this Friday, saturday program where you know you show up, maybe you have a beer here and there with your classmates. This is like you're living in a hotel together for a week and people are flying in from you know, there's people flying for Singapore. One of the guys was flying in from Israel. One of our friends flew in from Moscow. I hope he's doing OK Right now one of the guys was flying from Australia And I was like once a month you fly in for for about a week And you know it was an amazing cohort, made a lot of friends And I realized a lot of people were in that same boat. I was, you know, it was like 40. So a lot of people were kind of going through that midlife, midcareer crisis trying to figure out what's next And they were doing this MBA program to try to just figure that out. So it's a great time to clear my head because you know I'd been kind of heads down in real estate for close to 20 years And the last 10 certainly, you know, just really, you know, at a very specific niche of mortgages And you know I was still doing a little real estate on the side. So, to get to what I'm doing now, i'd been passively investing into some multifamily syndication deals just because I wasn't allowed to buy loans And I don't really trust the stock market. So I really wanted to have money into, you know, passive income secured by real estate. And you know there were some tax advantages, even with the W2, you know, rather than owning a REIT that was going to get taxed at 29% for dividends. I was getting cash flow, getting positive cash flow, from these syndications, but showing a loss on my taxes, so it was tax deferred income. So you know I was already familiar with that business And once I was looking into figuring out what to do next and I, you know, had some money saved up And once I got bought out I actually had a pile of money to deploy, which is also a scary thing. Yeah, it's one thing when you're making 100 grand here, 200 grand here on a deal, but you know, when you get multiple seven figures thrown in your bank account at once and you're worried about inflation, it was and you don't want to do anything. Stupid too, because you know I was already married, so avoid the. At least one of the three F's was set. But you know the boats and the airplanes. You know, actually I didn't have airplane money anyway, but I could have certainly wasted it on a boat. And but yeah, as I was figuring out with a due, a few of the groups I'd invested with came to me, similar to David how I came to you. And you know they said if you thought about capital raising, you know we have got a great base of investors, but when we have to raise $10 million in 30 or 60 days, we need partners that can, you know, can help and want to partner with us. Because, you know, often just people, even great operators, will exhaust their network of friends and family. And, and even better, there's some great operators who are just not good marketers. They're there, they want to focus on, you know, just being really efficient with building. You know, raising rents and renovating apartments, and they don't want to be on the phone all day, you know, telling the same story And, and fortunately for me, it's like I love that stuff. I've always been an evangelist for getting into real estate at whatever angle makes sense, and I'm getting that age as well, where you know I want to be, i focus more on lifestyle and a lot of my, my counterparts, you know, in their 40s are starting to think about their you know, their kid's college and their own retirement. So it's a logical time for me to help sort of them accomplish their goals, because when I was in my 20s I'd be like, oh, buy a two family house, live in half of it. You know my friends are in their 40s, they've got their you know their house on a cul-de-sac. They're, you know their kid's soccer games. They don't have the time to do the do the same, the same hustle that you do when you're, when you're 10, 15 years younger. So, and they're also a lot of them are paying a lot in taxes too. So my two favorite things are to help advise them on how to do things passively and how to save money on taxes. So it's, it's great. I'm happy It's. It's a. It's a great, it's a. It's a. It's a lifestyle business to some extent, just because it doesn't really feel like work.
Eric Panecki: 37:53
So so now you're you're I guess you're helping raise money, but it started with you know your investing alongside operators and syndications, or in funds. I mean you, you touched on something that I think everybody in this room knows, but maybe not everybody listening knows and the advantages of investing in syndication versus you know stocks or re or something else that you know doesn't you can't defer taxes, or just. Can you explain why that's an advantageous, or at least in your eyes?
Jack Krupey: 38:19
Uh, yeah, so, uh, you know. Look, i think this is, you know, something that I think a lot more people should know about, of people that are. You know you need to be an accredited investor for majority of these deals. So that means you need to have either a million dollar net worth or make 200,000 a year if you're single, or 300,000 if you're married, and these have been the same rules for 20 or 30 years. So it used to be, you know, country club type deals, but now it's open. There's a lot of people that are worth a million dollars, and it also can be include your retirement account. So, you know, even if you've never made 300,000 a year in your life, but, yeah, you've been at the same company 20 years and you've got 2 million in your 401k. That counts, So your net worth is there. So, you know, these deals are, you know, somewhat under the radar. But with the, the change in the laws I think it was 2017, with the thing called the jobs act and with just the way the internet is, now they change the rules to make it easier to advertise these deals, because there used to be, you know, very regulated where, if you didn't have a preexisting relationship, you can get slapped by the SEC. So these were kind of secret country club type deals And now they're open to more, you know, just more investors. So the reason they're? there's a couple of reasons or advantage. Number one is you know they're not, it's not like it's traded on the stock exchange. If you have a publicly traded re, you could click a button and and buy or sell it. There's institutions investing in these firms So they're just going to take a lower return. When you are in these private deals Like it's, you just need to offer a higher return to investors in general to get their attention, because they're going to say well, why would I and I've gotten this question from an investor why would I invest with you instead of just putting money into, like VNQ, the read index that pays a 5% dividend? I was like well, a, we'll pay an 8% preferred return, not a five and B. Ultimately, over three to five years, your total return, you know, could be 15 to 20% annualized, or IRR, which you know I've realized a lot of people just don't really understand IRR And it's ultimately you need to put it in Excel, but it's it's loosely associated, loosely correlated to an average annual return. But you know, if you get your money back a month earlier, the number will change a lot more in IRRs, more exact number, and ultimately it's just it's your over time going to get a higher return to the stock market. And you know, it seems too good to be true. But if you think about Even if you own a business, whether you own a restaurant or a laundromat many businesses have 20, 30, 40% profit margins. So if you think about these real estate indications as buying into a business, it's feasible to make 20, 30% profit margin. So it's feasible to make 15, 20% return, especially when the operating partners, the general partner, the one that's doing all the sweat equity they're incentivized to get you all your money back plus return, and that's how they make the rest of the return. So even if the deal makes a 30%, you're getting 15, maybe they're getting 10 to 15 on the end of the day for executing it profitably. So it's a great business model. I think the percentage of millionaires worth one to 10 million that have money in private deals or real estate is way lower than it should be. The family offices, the people that are worth 50, 100, 200 million dollars. Most of them have over half of their wealth into real estate and private equity versus that one to five, one to 10 million. Often they have 80, 90% of their money just in the traditional financial system of stocks and bonds. And to remind, on the tax side of it, most of these deals, because of depreciation, will actually spit off tax deferred income and the only time you'll pay taxes is when the properties sell, and it's often between three and seven years. And if structured the right way, there's often an opportunity to do what's called the 1031 exchange. Even if you're in a syndication, i've been in multiple deals where they gave people the option to sort of flip into another property if they want to and those that wanted their money back. They're able to do something like an internal transfer and give the investors their money back. It's certainly not a guarantee when you're in a syndication, but there's plenty of ways to be tax efficient.
David Choi: 42:09
I got a question for you, jack. I think I was excited to ask you this question, since I found that you were gonna be here. You've been able to. In the last downturn, you were able to make a killing right. You saw an opportunity, you jumped and you made a couple million dollars through it. I think we're kind of coming to I don't know if it's necessarily gonna be that bad like 0.8, because for houses at least, there is no inventory, right. People are locked in at a 3% interest rate. They're not gonna sell their property to basically borrow at 7% and pay significantly more on their monthly payments, right? So there's a lack of inventory. I think that's kind of holding up house prices. On the commercial side multi-family office, industrial, retail I think that we're gonna definitely. We're already seeing some adjustments in pricing and there's a lot of maturing loans coming due. I just feel like it's a ginormous opportunity for the right private equity firm, the right investor. Where are you seeing the market going and how are you gonna monetize on this opportunity?
Jack Krupey: 43:09
Sure, so yeah, great question. And it's a good timing too, because I've gotten sent three deals in the last week that are in some level of distress, because in these were multi-family deals. They had bridge loans that had variable interest rates and generally had interest rate caps. One of the other deals is actually a 10-year loan, but the first three years was interest only and they're coming up to that three-year horizon where it's gonna be amortizing and that's gonna put them in a negative cash flow situation and they were behind on their renovation plans so they need an influx of cash. So I agree it's not gonna be 2008. I think that the percentage of people in bridge loans is still relatively. It's a vocal minority of the loans. In this space. There's still a great majority of people did Fannie or Freddie fixed rate loans, but the fact is rates are higher and it's gonna put pressure on a number of operators and I think there's a great opportunity to be a bailout on those types of deals, whether it's coming in for pre-equity to be in a senior position and just have a solid risk adjusted return, or to either just acquire the building at a reasonable discount to the top end value or even just be a bailout partner, and some of the current investors may get diluted. But if you're coming in for that extra $2, $3 million to get the property over the hump, finish renovations and get to the point where it can sell as a completed value add and with a much higher net operating income, there's gonna be opportunities to make, i think, 30, 40, 50% type IRRs on those deals. Office retail I think the real money in this cycle is gonna be in those types of it's the blood in the streets type of assets the office building that was bought 100% occupied with much higher rents and is now 50% occupied with 50% lower rents or 40% lower rents in some cases. So those are gonna be interesting opportunities to, in some cases, just take advantage of an economic situation and a building that was a five cap a couple of years ago might be a 10 cap at a much lower price down. So sometimes it could just be buy and hold. But I think the repositioning I was in the financial district in 2008, nine 10 and there were class B office buildings that were renting for $35 a square foot that when converted to residential, were $70 a square foot. So I think there's gonna be a lot of opportunity to turn mixed use in office into apartments. The random suburban office park that's gonna be a much heavier lift but there's still a housing shortage. So maybe some of those get torn down, maybe some of them can be converted to apartments. The struggling retail It's a great spot to build apartments around retail. You know a strip mall you still need grocery stores, you still need some of the stores in there, so maybe they I've seen these in plenty, we've all seen them in plenty of towns. So I think you know it's gonna be a roll your sleeves up and be a little bit more creative. You know on the repositioning and potential development as well. You know self storage still in growth markets. I know people buy self storage and build another building next door And that's the next level And I think you know you guys have. You know you've got a great business going already, but you know, as you're expanding, you know you've got that multifamily building. I think you're gonna see some interesting opportunities because of what you're already doing and deals are gonna come to you And the next step is to capitalize on the deals that. You know take a lot more work, that you need to figure out the zoning and entitlements, and you know it's fun too, and I'm looking forward more to diving into some of that stuff as well, because I've never actually built something ground up. And you know, even though I talk about not creating myself extra work or stress, i think you know building something would be kind of fun, and I-.
Eric Panecki: 46:49
Billing buildings, billing buildings. So I mean you have a ton of investors that work with you. I guess you know technically clients right And you're deploying their capital into different investment opportunities And I'm assuming most are real estate related. You know, with everything going on, you know Elon Musk came out what was it like a couple of days ago and said you know, commercial real estate is dying and the housing market's next. It's gotta strike some fear into some investors. I would think. Have your investors approached you about you know what's going on? And if they you know? if so, what are you telling them?
Jack Krupey: 47:23
Yeah, i mean, that's been a pretty constant thing over the last year. You know I get calls practically. you know I talk to. you know I talk to usually talk to at least one or two investors daily And you know, as soon as interest rates started moving as soon as you'd see the articles on CNBC or the Wall Street Journal it's you know it's weekly there's some negative headline out there. So a lot of discussion about what you see for the residential side of the housing sector does not necessarily mean it's bad for the commercial side And especially the apartment side of things. When you have interest rates that are the highest they've been in 20 years, you know you've got a generation of people that are priced out of buying a single family home right now. for the most part That's a good point. So you know, seeing that housing prices are declining 5% is not gonna make the difference for somebody who makes 70 grand a year And you know the average cost of a house in this part of you know. just use yours for example. was it 500, 600? Yeah, it's hard to get into. you know something for less than three 4,000 a month And if you could rent for 2,500 a month, it's the affordability index. right now, i think it's basically, i think, all but two states it's cheaper to rent than to buy right now, which you know there's many, you know, for years it was the other way around where you could actually save money by buying a house. You know, i know some crypto people that really think that and maybe this is something with Elon as well. You know there's a couple of crypto people who really just think that the efficiency eventually, of the blockchain is gonna kind of suck a lot of money out of the real estate market into the crypto market. And you know, i want a little bit of crypto. I keep an eye on a space, but I'm certainly not, you know, i just maybe they're right, i'm just missing something, but I just don't see that. I think that's a little bit of that utopian blockchain libertarian leaning, you know, new world order type thing. So to me, if that happens, it's like probably multiple cycles away from now. Yeah, I do have moments where I worry about the US dollar. That was part of the reason of going to Hong Kong. I just wanted to get out of the bubble, i wanted to have connections in different parts of the world And you know we've got about 30 trillion in debt right now. So I mean at some point the debt's gonna be an issue. But you know we're still to some extent too big to fail And it doesn't seem like the. You know the world trusts. You know China is not even a they call it a capital account convertible. I mean because there's current, there's capital controls there. You can't be a reserve currency if you're not able to freely move money in and out of the country. So you know, at least for the. You know the short term I don't really worry about the. You know the US dollar collapsing. But you know I think it's also feasible that we have prolonged inflation and the Fed basically moves the goalposts and says, okay, we're just going to accept 5% inflation And in reality it's 10 when you look at how they calculated it 20 years ago, through shadow stats. So you know when I, when I look at real estate and having reasonable leverage, you know it is a hedge against inflation And as someone who's essentially living off his investments for the most part at this point, because, you know, j cam, we don't really, we don't. We don't live off of our fees, we live off of the, the rents and the distributions and you know, my largest investments in my own fund. So inflation is a is a bigger risk for me too, because I'm essentially on on on an income of investments and I need to spit off enough to, you know, pay rent and spend 10 bucks for eggs. So yeah, that's a concern, but I do. I do worry a bit about inflation and just being positioned to hedge properly against it.
Eric Panecki: 50:49
And you still feel like real estate. You know at least multifamily real estate is is a good spot to be placing your capital.
Jack Krupey: 50:56
Yeah, i mean for me. I love all of the kind of syndicated assets You got. You have multifamily, self storage, mobile home, parks, student housing, senior living, ground up, development, build a rent. You know all of them have have, you know, some, some benefits. But multifamily to me is is the, is the core, you know, and I and I'm expecting to have, you know, 50 to 70% of of my investments into, into multifamily housing. You know, specifically on the value add, it's, it's a, it's a pretty basic business model. You buy an old entire department building where the prior ownership wasn't either, wasn't renovating apartments, they were just throwing us coat of paint on it. You know, and they've still got the Firmica countertops from the 80s. And you know, when you buy one of those buildings and you can put 10,000, 15,000 into a unit and it raises the rent three to $400. That's worth 80 to 100,000 in increased increased value just on one unit. So that math works in any market, if rates go to 9%, if rates dropped to zero, you know when you could create that much value. You're, you're, you're going to be okay.
Eric Panecki: 51:59
You guys have seen that chart. It's the affordability of of renting versus buying, and it's like it's so much larger now than it's ever been ever. It's. It's kind of crazy, it's it. It crossed like two years ago and now it's just like I mean it's so much cheaper to rent than to buy right now.
Jack Krupey: 52:17
So yeah, And this is drastically different than like most of the prior cycles. It's a. I keep quoting Howard Marks. He has this line history may not repeat itself, but it does rhyme. And you know we're going into a recession, probably. But what's different this time around is, you know, the average baby boomer. You know baby boomers are between 62 and 70 something. So most of them are retiring. And you know the feds. You know it's old playbook is raise rates to unemployment, shoots up. But right now there's still a shortage of workers and there probably will be for a number of years. So you know the same playbook that worked in prior cycles may not work this time around. So you know you can, you can planned to some extent, but it's not. You know history. It's not going to be the same exactly each time around. So still figuring, still always figuring something out.
David Choi: 53:04
I guess the bottom line is this like when you're investing, you can't protect the future, but you could certainly buy right. Right, so long as you buy the asset at an attractive going and cap rate, it's going to cash flow. With conservative, i mean now more than ever. We used to be heavy, we used to borrow money from a lot of bridge lenders. But if possible now, even if it's going to reduce IRR by 4% or reduce our ARR by 5%, 6%, we would rather go the more conservative route and take out a seven year fixed rate interest, you know, you know an 30 year amortizing loan from Fannie Mae. Then buying with the right debt, long-term debt, even if you have to raise a little bit more money, even if your IRRs and your equity multiples might get hurt. Now's the time to play it safe Right. And so I do agree with you that multi families and asset class that's going to be resilient overall. Well, jack, it's been a pleasure to have you on the show man. Thank you so much for just sharing your story. I got a lot out of it. I'm sure that the guests did too.
Eric Panecki: 54:07
I mean your world of information. we appreciate it. I mean, where can people find you, Right, If they're interested in hearing more about your story or just want to ask you questions, want to invest with you, whatever?
Jack Krupey: 54:17
Sure, so yeah, our website is jkabinvestmentscom. That's JKAM for JK asset management, jkmanvestmentscom. We're also on Facebook, twitter, linkedin, even TikTok now So, and we have a podcast ourselves called the alternative investor mastermind. David, you're long overdue to get on the show as well. We don't have a school.
Eric Panecki: 54:37
That was set up, but you can use our set up.
Jack Krupey: 54:41
Actually, maybe we'll do a pod swap next time. But yeah, I really appreciate the chat with the guys. It's kind of therapeutic for me as well.
John Libretti: 54:51
It's almost like a therapy session. You are close to New York. Go brag about it.
Eric Panecki: 54:56
All right, well, we appreciate it. Thanks so much. It's a wrap.
Speaker 5: 55:03
All right, everybody. That's our show. If you like what you heard, do us a huge favor and give us a five star rating and subscribe wherever you listen to podcasts. If you're a generous, maybe even tell a friend word of mouth helps a lot. If you're interested in being on the show or getting exclusive invites toward deals and dollars networking events, you can fill out a form at dealsanddollarscom. That's deals, the letter N dollarscom. Your hosts were David Choi, eric Ponecki and John LaBretti. The podcast was produced by me, joshua Perna, with additional editing by Jonas Tejuse and Arwin Castillo. Thanks for listening. See you next time.
RELEVANT LINKS
JKAM Investments Official Website
ABOUT JACK KRUPEY
Jack Krupey has been investing in both real estate and distressed debt since 2001. He has built long term relationships with experienced real estate developers, sponsors, and syndicators over his 20+ year career. Jack leveraged the 2008 financial crisis as part of a private equity fund that yielded impressive returns off of distressed and restructured debt. He repositioned properties as well as modified and restructured loans for borrowers.
In 2014, Jack entered into a partnership with a large private equity fund and led the asset management arm of the firm that made over 3 billion dollars in purchases of non-performing and re-performing mortgage debt between 2015 and 2019.
An entrepreneur by nature, Jack decided to start JK Asset Management to focus on alternative assets such as value-add multifamily real estate. He then launched the JKAM Diversified Real Estate Fund in September 2020 and is launching a 2nd Diversified Fund in 2022.
