Yoso Properties on Multifamily and Mixed-Use Acquisitions in 2022

By Published On: August 23, 20223.9 min read

Yoso Properties launched in 2019 and has since carved out a unique space in the CRE market focusing on acquiring a large number of smaller multifamily and mixed-used distressed properties. The company is growing fast, with the number of deals tripling in 2022 compared to the year before.

“Not too many people play the volume game in this business,” Avi Yosopov, President at Yoso Properties, said. “Most people go for bigger deals with lower returns and do a handful of them a year. We aim for the exact opposite.” Yosopov described the company’s strategy as the happy median between multifamily investing and single-family investing.

Some recent acquisitions include four buildings consisting of 25 units in Yonkers, NY, a mixed-use eight-unit multifamily building in Bridgeport, CT and a four-unit mixed-use property in Nodine Hill, Yonkers.

Yosopov spoke to Leverage.com about Yoso Properties, what going against the grain in CRE looks like and the state of multifamily properties right now.

A small kitchen has no window.

Image provided by Avi Yosopov

Why do you think playing a volume game is an uncommon approach in CRE?

It’s an uncommon approach because it’s a lot easier to manage one building with 40 units than it is to manage 10 properties with four units in each. It’s just a lot more roofs, boilers, sidewalks and more to have to worry about. Larger buildings tend to have a superintendent on staff, but it’s not common to have one for a smaller property. These factors make management a lot tougher for scaling smaller deals, so our team focuses a lot on optimizing our workflow so we can handle these obstacles a lot more smoothly.

Can you talk about the growth process for the company?

Our first 10 deals were the hardest, but we were able to build out relationships with lenders, contractors, brokers, vendors and more. The next 10 deals were a lot easier since we already had systems and processes built out that allowed us to begin our scaling phase. 2022 has been a big year for us. We’re a bit more than halfway through the year and have already done triple the deals than in 2021. Our financing partners have allowed us to scale a lot faster this year by allowing us to get higher leverage on deals due to our track record.

How did you decide to focus on the Westchester area?

Our first deal was actually in the Bronx. We started noticing that the Bronx was getting very saturated with investors and decided to start looking a little further out. As of today, we play in Queens, Bronx, Westchester County and Connecticut. The more markets we play in, the more deals come our way.

Are there any trends in small multifamily you’re looking out for that are happening now or would be coming up in 2022?

We’re starting to see the banks starting to slowly release more and more foreclosures into the market. Covid put a halt on foreclosures, and the banks are sitting on nice inventory which they’re now starting to slowly release. I think 2022 and 2023 will be filled with a surplus of deals.

A living room is filled with red and black curtains.

Image provided by Avi Yosopov

What has been the key to your success?

We work relentlessly on optimizing all departments of our business on a daily basis. Quite often I sit back after a long day of work and ask myself the basic question of “What did I do today?,” followed by “How much of that could I have allocated?,” followed by “How do I build a system or process around not having to deal with this task again so I can focus on growing the company?”

With that mindset every day, our team has grown, our workflow has gotten smoother, and we’re able to efficiently scale while being able to manage everything that comes our way each day. Our team is great, and we invest a lot into allowing them to grow to their fullest potential. We’re also very good at executing deals with speed. We’ve built the reputation in our markets as the guys who execute and deliver without any headaches.

What’s next for you?

We started doing a few larger portfolio deals in 2021 and 2022. They still fall within the two to eight-unit-per-property niche but it’s a higher quantity of units in one shot. I forecast us to eventually start getting into larger complexes in the near future. I also see our company branching into the short-term rental business model. We’ve tested it out and see great potential in this space. We have some exciting plans in the coming months, and we just want to continue growing our organization to its fullest potential.

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