In a recent episode of Ritter on Real Estate, I sat down with Andrew Cushman — a former chemical engineer turned multifamily investor who has syndicated and repositioned over 3,000 units across the US. What began as a conversation about timing quickly turned into a masterclass on risk management, deal selection, and long-term investing discipline.
Here are some of the biggest lessons I took away from our conversation.
From Chemical Engineering to Real Estate Investing
Andrew’s path to real estate wasn’t linear. After earning an engineering degree and working for Cargill, he realized the corporate path wasn’t for him. In 2007, he left to start flipping single-family homes in Southern California.
Then came the Great Financial Crisis. While many investors froze, Andrew spotted opportunity.
“We had a huge recession,” he said. “That means we’re probably going to have a large expansion — which means job creation and household formation. But everyone just got foreclosed on, and they’re scared to buy. So, rentals made sense.”
That logic led him to multifamily in 2011, when he bought his first 92-unit deal in Macon, Georgia. Over a decade later, he’s syndicated more than 3,000 units nationwide.
Three Big Lessons from 16 Years in Multifamily
1. Build a Team Early
Andrew admits he did too much by himself for too long. Like many entrepreneurs, he tried to wear every hat. But scaling successfully meant hiring sooner and delegating faster.
2. Move Up in Asset Class
Early in his career, Andrew gravitated toward rough Class C properties. They were cheaper and easier to buy — but also harder to manage.
“The deals that provided the best returns with fewer headaches were actually the Class B assets,” he said.
In 2016–2017, he pivoted to B and A– properties — newer, better located, and less volatile. That shift drastically improved performance and lowered risk.
3. Think Probabilistically
This might have been my favorite part of the discussion. Andrew emphasized not anchoring your underwriting to one belief about the market.
“It’s easy to say, ‘Interest rates will go down, so I’ll underwrite that way.’ But what if they don’t? Always ask, what if I’m wrong?”
That mindset saved his team in 2021. While many buyers chased cheaper floating-rate debt, Andrew locked in a 12-year fixed loan at 3.79%. When the Fed later hiked rates by 500 basis points, his property “cash flowed like crazy” while others struggled.
Why Class B Multifamily Is the “Sweet Spot”
Class C assets look great on paper — high cap rates and big upside — but the reality often tells a different story. Older buildings mean plumbing, electrical, and HVAC issues that drain cash flow but don’t increase rent.
“Your tenants won’t pay you $200 more a month because their plumbing works,” Andrew said. “That’s table stakes.”
Class B assets, meanwhile, attract more stable tenants, have lower delinquency, and still offer meaningful value-add potential — all with less downside.
“We look for deals that have minimal ways to lose and lots of ways to win,” he told me.
What a “Good” Deal Looks Like in 2025
Andrew shared a recent example — a stabilized, 1990s-built property that was 96% occupied and well maintained by a professional owner. Rents were $500 below market, and the property came with long-term fixed-rate debt already in place.
“It cash flows from day one,” he explained. “Even if we fail to execute our renovation plan, the property still performs. That’s the kind of downside protection we want.”
His first question when evaluating any deal is one I’ve adopted myself:
How could I lose money?
Only once that’s addressed does he focus on upside.
How His Underwriting Has (and Hasn’t) Changed
Despite shifting market conditions, Andrew said his underwriting fundamentals remain the same. He hasn’t loosened his standards — which meant doing far fewer deals from 2022 through 2024.
“Time is your friend in real estate,” he added. “We’ve lengthened our hold period to five or six years to make sure we’re never forced to sell in a bad market.”
He also continues to underwrite for cap rate expansion — assuming the market will be less favorable at exit than it is today. And while many sponsors describe their underwriting as “conservative,” Andrew defines it precisely:
“We underwrite to numbers that have at least an 80% likelihood of happening.”
That means if the market expects 4% rent growth, he models for 3%. If vacancy averages 5%, he assumes 7–8%. The goal is to set expectations investors can rely on — not chase flashy returns built on aggressive assumptions.
The Real Driver Behind Cap Rates
When it comes to cap rates, Andrew says too many investors focus solely on interest rates.
“Interest rates matter,” he said, “but what actually drives cap rates more is capital flow — where the money is going.”
With trillions of dollars still parked in money market funds and private equity reserves, he believes that liquidity could support asset prices even as borrowing costs fluctuate.
The One Question Every Investor Should Ask
Before writing a check, Andrew says investors should dig into a sponsor’s track record — especially their worst moments.
“Ask, ‘Tell me about the worst deal you’ve ever done, what the results were, and what you learned.’ It’s revealing — do they admit mistakes? Do they take accountability? That tells you everything.”
My Key Takeaways
– Look for downside protection first. Fixed-rate debt and immediate cash flow are two of the best safeguards.
– Understand the business plan. Class B properties often offer better “risk-adjusted” returns than heavy value-add Class C deals.
– Beware of overly optimistic underwriting. Ask operators what assumptions they’re making and how they could be wrong.
– Work with sponsors who think probabilistically. The best investors don’t just plan for what should happen, they prepare for what could happen.
Final Thought
Markets change. Interest rates rise and fall. But the principles of disciplined investing — protecting the downside, using conservative assumptions, and playing the long game — never go out of style.
As Andrew summed it up perfectly:
“We’re looking for deals with lots of ways to win and very few ways to lose.”
That’s a mindset I try to apply to every deal I look at, and one that every investor can benefit from adopting.