He Walked Away Mid-Deal. It Cost Him $100,000 (But Saved His Investors)

Real estate investing demands conviction, but when market conditions shift—sometimes even mid-deal—do you stick to your guns or walk away?   August Biniaz, CIO and co-founder of CPI Capital, found himself toeing this exact line shortly after underwriting and raising capital for a large, build-to-rent community in Tucson, Arizona.   When interest rates spiked, the deal no longer penciled, but exiting meant sacrificing significant time and over $100,000 in sweat equity. On the other hand, moving forward meant potentially putting investor capital, and their reputation, at risk.   Rather than rationalizing what had become a “bad” deal, August and his team made the difficult decision to change course and abandon the deal. Had they not, the fund would likely have been wiped out. Instead, CPI Capital has grown to well over $225 million in value-add multifamily and built-to-rent, single-family assets under management in the last several years.   In today’s conversation, August shares how these early lessons shaped the way they approach risk and opened the door for even greater investing opportunities. Insights from today’s episode: When to walk away from a deal when the numbers no longer work Why August and his team opted for a co-GP approach on their first few deals How to stay competitive in large markets as a middle-market operator How to properly structure a cross-border investment The main differences between built-to-rent tenants and other renters — CPI Capital   Connect with August on LinkedIn Recommended Resources: If you’re a high-net-worth investor with capital to deploy in the next 12 months and you want to build passive income and wealth with a trusted partner, click here for opportunities to invest in real estate projects alongside Kevin and his team.  Accredited Investors, you’re invited to Join the Cash Flow Investor Club to learn how you can partner with Kevin Bupp on current and upcoming opportunities to create passive cash flow and build wealth. Join the Club! Looking for the ultimate guide to passive investing? Grab a copy of my latest book, The Cash Flow Investor at KevinBupp.com.  Tap into a wealth of free information on Commercial Real Estate Investing by listening to past podcast episodes at KevinBupp.com/Podcast. Chapters:  00:00 Intro 00:47 Pivoting to US Real Estate 10:20 Cross-Border Complexity 15:05 The Co-GP Approach 19:37 Finding Opportunity in Big Markets 25:25 How to Stay Competitive 28:37 The Build-to-Rent Model 34:17 Walking Away (And Losing $100K) 41:41 Advice for New Investors 46:57 What Has Changed? Disclaimer: This podcast is for educational purposes only and does not constitute financial, tax, or legal advice. Consult with a qualified professional before making any investment decisions.