Sean Kia is certainly one of Insider’s Rising Stars of Actual Property for 2022.In two years, he is raked in lots of of thousands and thousands by flipping condo buildings within the Southwest.He applies the Ford manufacturing mannequin to actual property. This is how he constructed his empire.
This story initially appeared on Enterprise Insider.
Sean Kia through Enterprise Insider
Los Angeles-native Sean Kia, 31, has been a bit busy the previous couple of years.
Between 2019 and now, Tides Equities — the funding firm he based in 2016 and has run ever since — has constructed a small empire of condo complexes in Solar Belt cities like Las Vegas, Dallas, Houston, and Phoenix.
Simply three years in the past, Tides owned $2 billion within the condo properties. At present, that quantity has grown to $7.5 billion, in line with Kia.
In that timeframe, Kia stated Tides has grossed lots of of thousands and thousands of {dollars} for itself and its buyers by fixing up decades-old buildings and reselling them. Tides deployed $7 billion in 2021 and 2022 alone, making it one of many nation’s most prolific patrons at the same time as the general marketplace for multifamily properties was cooling, because of rising 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 akin to KKR. The corporate now has 31,000 items throughout its portfolio.
This was a imaginative and prescient that Kia had at simply 25.
An meeting line method to actual property funding
After a number of years within the enterprise of shopping for and promoting condo buildings for different corporations, Kia seen there have been methods to make the method extra environment friendly by decreasing renovation occasions.
After a number of years within the enterprise of shopping for and promoting condo buildings for different corporations, Kia seen there have been methods to make the method extra environment friendly by decreasing renovation occasions.
The Tides on seventh condo advanced in Phoenix was a latest acquisition. Tides Equities through Enterprise Insider
So, he began Tides and utilized the Ford mannequin of large-scale manufacturing to his offers. The assembly-line method was helpful for his main commerce, which was to renovate the properties and promote them at a revenue.
“Let’s create an assembly-line method to real-estate investing and do the very same factor on each single constructing that we purchase,” he stated, recalling the drive to start out his enterprise. “As a result of if you remove variables, you remove dangers.”
Kia reeled off a number of examples of Tides’ enterprise. In July of 2020, it purchased a 236-unit condo constructing in Phoenix for $27 million, spent $3 million on upgrades, and offered it simply over a yr later for $59 million. In one other deal, it paid $89.5 million for a 472-unit condo constructing in October of 2020, spent $4 million on renovations, and offered it for $137 million in November 2021.
As a result of Tides makes use of a lot the identical renovation plan for every acquisition, it might probably usually begin the work even earlier than the ink on the sale contract dries. That is potential as a result of the corporate sometimes secures its financing upfront.
The right spots
One other secret of Kia’s is his consideration to location. Cities have to be enjoyable, reasonably priced, ripe for in-migration and positioned for job and wage progress, he stated.
He is been checking these packing containers since he bought a begin in Phoenix, which turned dwelling to among the firm’s bread-and-butter investments. The standard renter had been paying solely 20% of their revenue on lease, which represented “actually good affordability,” Kia stated.
“It appeared prefer it had all the elemental type of tailwinds that might actually assist propel Phoenix to one of many main funding markets,” he stated. “Quick ahead a number of years later, we’re completely proper. Phoenix is within the high 5 markets within the nation.”
