Chairman Minutes: Making Money Slowly
A few weeks ago, I hiked to the top of Mt. Baldy with Trevor Schuesler, who leads Investor Relations at Buchanan. As we worked our way toward the 10,000-foot summit, we found ourselves discussing a topic that has become increasingly relevant in today’s market: the difference between making money quickly and making money durably.
Anyone can start the hike. Far fewer finish it.
The mountain rewards preparation over enthusiasm, endurance over speed, and discipline over ambition. In many ways, so does investing and relationship building.
As Sam Lawhead recently wrote in The Apartment Trade Is Over. Back to Apartment Investing, the extraordinary apartment returns of the 2010-2022 period were the product of four unusually powerful tailwinds aligning simultaneously: cap rate compression, favorable demographics, limited supply, and a benign political environment. His conclusion is that those tailwinds have largely reversed, and investors must return to the fundamentals of apartment investing.
That message resonated with me because it mirrors what we’ve always believed at Buchanan that the best outcomes rarely come from pursuing shortcuts.
As Trevor and I climbed, I was reminded why he has become such a trusted resource to many of our investors. Having spent more than sixteen years on both sides of the allocator-manager relationship, he understands that trust isn’t built during a fundraising cycle any more than a summit is reached in a single burst of effort. It is earned gradually through preparation, consistency, transparency, and a willingness to do the hard work long before the results are visible.
There was a point during the hike when the trail became steeper, and the summit still seemed deceptively distant. Trevor made an observation that stuck with me. Whether you’re managing capital, climbing a mountain, or building a business, people tend to overestimate what can be accomplished in a quarter and underestimate what can be accomplished in a decade.
That mindset reminded me why he’s so effective in his role. Rather than viewing investor relations as a series of transactions, he approaches it as a long-term partnership. He spends time understanding each investor’s objectives, concerns, and constraints because he knows lasting alignment is built through listening, not selling.
The strongest investor relationships are built upon the similar characteristics needed for a successful mountain climb. Both demand preparation, patience, and the confidence that comes from experience with neither built in a single moment, but rather through a series of deliberate steps taken over time.
Like hiking, investing and trust compound. One of the most compelling observations from Lawhead’s article is that for decades, apartment returns were driven primarily by income rather than appreciation. Rent checks did most of the work, with cash flow serving as the foundation and appreciation as the byproduct. Historically, income accounted for 70–80% of apartment returns. From 2010 to 2019, it fell below 50%, then surged to 94% during the pandemic era.
Income as % of Total Returns – All Property Types by Era
100%+ means appreciation was negative
Somewhere along the way, many market participants began to mistake appreciation for skill but today we are operating in a different environment. The era of easy gains from cap-rate compression appears behind us, and investors are being rewarded once again for operational excellence, prudent leverage, disciplined underwriting, and long-term ownership. In other words, they are being rewarded for actual investing.
This shift feels less like a disruption and more like a return to normal. It reminds me of something Trevor and I discussed during the descent. The most successful investors we know rarely talk about getting rich quickly. They talk about preserving trust, compounding relationships, protecting capital, and generating consistent outcomes over long periods of time.
The investors who have been with Buchanan for years understand this well. Many of our most meaningful partnerships were not created through a single transaction or market cycle. They were built through decades of shared experiences, positive investment results, challenging markets, and countless conversations.
As Lawhead points out, some of the most successful real estate investors in history weren’t the ones who mastered timing. They were the ones who mastered patience, focused on income, and allowed compounding to work over very long periods.
The summit of Mt. Baldy is impressive, but it wasn’t reached through a burst of effort but instead through thousands of deliberate steps taken in the right direction.
The same is true in our business as we have never been interested in getting rich quickly but always focused on building something that lasts—for our investors, our partners, and our team.
While the apartment trade might be over, long term apartment investing is not, nor is the opportunity to create wealth the old-fashioned way: patiently, predictably, and slowly.
In the end, that has always been the better path. And like every worthwhile mountain climb, it’s the journey—not the sprint—that ultimately gets you to the top.
Reference: The Apartment Trade Is Over. Back to Apartment Investing. By: Sam Lawhead
About Buchanan Street Partners, LP
Buchanan Street Partners is a Newport Beach, CA based real estate investment management firm specializing in core-plus, value-add, and debt investments across multifamily, commercial, and self-storage properties in the Western and Southwestern United States. The company serves a broad range of clients including high-net-worth individuals, family offices and the advisors that serve them.
Buchanan’s foundation of success is backed by a track record of results, having invested in over $8 billion of real estate assets since its founding in 1999. The company’s experienced and cohesive team has navigated multiple real estate cycles together. Buchanan balances the pursuit of risk-adjusted returns with preservation of capital to deliver both performance and peace of mind to its investors.
This paper is for educational purposes only and does not constitute tax, legal, or investment advice. All examples are illustrative and exclude state taxes, depreciation recapture, transaction costs, and other factors that may materially affect outcomes. Consult your tax and legal advisors before making any investment or tax planning decisions.