“The housing market has experienced new highs in the last year. People are investing more on their homes, and I am excited to build the next dream home for them.”
Poan is the Principal at CSM Partners, a real estate investment, development and management firm with focus in the San Francisco Bay Area and Los Angeles. Spanning 40 years of experience and 4 countries, CSM Partners leverages global knowledge into a unique position in the industry and maximizes returns for the investors.
Q.1. Tell us your life story, how did you go from University of California Berkeley to CSM Partners?
I feel like everything I’ve done in my life is connected to buildings, and along the way I collected the necessary tools for what I do now. When I majored in Architecture at UC Berkeley, I learned how to think critically. When I became an architect in my 20’s, working at prestigious firms SB Architects and Arup, I learned real life experience in how buildings are put together. When I worked at CapitaLand, a global leading real estate firm in my 30’s, I learned how capital is invested and structured in real estate. Now at my own shop, CSM Partners, I use all these skills on a daily basis. Everything seems to be connected.
Q.2. What are some key learnings from your multiple pursuits as a Real Estate Developer, Investor, Architect and Entrepreneur?
That there is a relationship between all the goals you are targeting. Find this and you will achieve more in less time. Whether I am developing a condominium building or investing in an education startup, there are common skills in analyzing each investment.
Q.3. Tell us more about CSM Partners and how they help investors?
CSM Partners is a value-driven investment, development and management firm. We believe there is hidden value in every deal, whether it’s increasing saleable square footage or lowering operating costs. With our unique background in finance and architecture, we help investors unlock that hidden value and maximize returns.
Q.4. In what real estate asset classes does CSM Partners manage and invest?
Single family and multifamily.
Q.5. What excites you about your work right now?
The housing market has experienced new highs in the last year. People are investing more on their homes, and I am excited to build the next dream home for them.
Q.6. What mistakes do first time real estate investors usually make?
Do not make emotional investments. It’s very easy to fall in the trap in a multiple bid situation, and you’re thinking with the loan it’s just a little more each month. As a primary residence this may be negligible, but as an investment you are in an uphill battle from the beginning and it will take much longer to make your return. Always make a plan on how much you want to spend on the purchase and expenses and stick to them religiously.
Q.7. How has the real estate landscape evolved over the past decade and what will it be like in the coming years?
PropTech has revolutionized the way people invest and manage real estate. People are now able to access down payment funds from companies such as Home.LLC or invest in a piece of a $250 million office building for only $5,000. This is a very exciting era and I expect more industry disrupting companies to show up in the coming years.
Q.8. Housing prices are at an all time high. What is your outlook on home prices in the future?
There are a few reasons why home prices have been skyrocketing. Construction costs are high due to supply chain challenges caused by COVID, and inventory levels are at an all time low either due to activities slowing down or entitlement challenges (in certain markets more than others). This is further stimulated by low interest rates and the current administration’s homebuyer credit program in the works. Since these factors are unlikely to change quickly, I am cautiously optimistic that home prices will continue to climb, albeit more slowly than the past couple of years.
Q.9. How important is impact investing in real estate?
At CSM Partners, we take impact investing very seriously. Environmentally, buildings contribute to 40% of the global CO2 emission. My company implements green and sustainable features in all of our projects. These measures also help reduce energy usage and in turn lower our operating expenses, resulting in better financial returns for our investors. Socially, as community dynamics change over time, the wealth disparity has also grown larger, especially here in California. In our development projects, we set aside either affordable units or in-lieu fees that get re-invested in the community. A safer, happier community will add value to our investments.
Q.10. How would you allocate your personal hypothetical $100M portfolio?
Since I am in the real estate industry, I would allocate 50% of my portfolio there. This includes 30% multifamily and RV parks that generate consistent cash flow, and 20% in ground up developments with high IRR. I would then allocate 30% in stocks, 5% in startups and 5% cash.
For more such insights, visit Home.LLC