Accelerated Real Estate Investor · Accelerated Real Estate Investor Podcast

355: 10 Steps to Force CapEx Improvements, Increase Rents and Generate Appreciation with Josh Cantwell

·14 min·1 clip

In just 10 months, Josh increased monthly rent roll from $150,000 to $220,000, boosting property value by $6 million.

This episode details a 10-step strategy for rapidly increasing the value of multifamily apartment investments. Host Josh Cantwell, a real estate investor and coach, presents a case study from his own portfolio. He explains his method for forcing capital expenditures, raising rents, and generating property appreciation within a 12-month timeframe. Cantwell uses his acquisition of the 296-unit Stewart House apartment complex as a primary example. He purchased the property for $16.3 million when it was 87% occupied, leaving about 42 vacant units. The plan involved immediately renovating those vacant units and then sending "expensive renewal notices" to existing tenants upon their lease anniversaries. Tenants were given the choice to pay significantly higher rent or move out, creating a cycle of intentional vacancy. Over ten months, his team fully renovated 145 units and spent over $2 million on improvements, including $200,000 on boilers and $300,000 on windows. Occupancy temporarily dropped to about 76%, causing a period of negative cash flow, or "cash bleed." The strategy culminated in the property reaching over 95% occupancy with a dramatically higher rent roll. Monthly gross income increased from approximately $150,000 at purchase to over $220,000. Cantwell states this income jump, analyzed with a 50% expense ratio and a 6% capitalization rate, values the building at around $22 million. His ten steps include underwriting for 75-80% occupancy and planning for short-term cash bleed, immediately renovating vacant units, upgrading common areas and adding amenities, and sending those high-priced renewal notices. He advises buying renovation materials in advance and having contractors ready to "pounce" on newly vacated units. A critical insight is the intentional acceptance of temporary high vacancy and negative cash flow to execute renovations at an accelerated pace. Cantwell frames the "cash bleed" as a strategic, positive investment in future value. The process relies on existing residents witnessing improvements, making them more likely to accept steep rent increases rather than relocate. He notes the final 10% of a unit renovation, the "punch out" phase, is where delays most commonly occur. The entire cycle is designed to be repeated monthly for 9-10 consecutive months to achieve full lease-up and forced appreciation. The episode's tone is direct, instructional, and promotional, blending a step-by-step tutorial with a showcase of the host's proven results. The style is conversational yet packed with specific financial figures and operational details from Cantwell's firsthand experience. This episode is ideal for active or aspiring multifamily real estate investors seeking aggressive, value-add strategies and concrete operational blueprints. Listeners uncomfortable with high-risk tactics involving intentional tenant displacement and significant short-term financial losses may find the approach unsuitable.

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