Multifamily X Missouri

Raj Tut: From one mobile home deal to more than 500 units

Wisteria Court Apartments Wisteria Court Apartments
Raj Tut Raj Tut
Hawkins Point Townhomes Hawkins Point Townhomes

Raj Tut started O’Fallon, Illinois-based Gateway Multifamily Group in 2013 to invest in multifamily properties throughout the St. Louis area. When Tut started the firm, Gateway’s portfolio was limited to a single mobile home. Today, Gateway owns more than 500 units — about half multifamily and half self-storage, with a small bit of retail —  across the St. Louis market. Midwest Real Estate News recently spoke with Tut about his passion for multifamily and the growth that his company has enjoyed.

Midwest Real Estate News: How did you get your start in real estate investing?

Raj Tut: Entrepreneurship has always interested me. Commercial real estate has always interested me, too. I originally wanted to be a basketball player. That was quite the long shot, it turns out. But commercial real estate interested me for a few reasons. I had always idolized real estate entrepreneurs, one of whom may or may not be the president of the United States right now. So I wanted to be one myself. In 2013 I started Gateway Multifamily Group.

MREN: What is it about multifamily and commercial real estate that was so attractive to you?

Tut: The quality of the real estate around you has a great impact on the quality of your life. I’ve always found that interesting. I also like that real estate is tangible. You can see what you are working on and acquiring. Real estate has such a lasting impact.

MREN: You mention that real estate has an impact on people’s lives. Is that the approach you take with Gateway?

Tut: We are focused on providing as much value as possible for our residents. We want to provide them with great common areas, great outdoor spaces. We want to provide them with a great apartment to live in and raise their families in, spend time with friends in. We want their living spaces to help them build great memories. If we weren’t interested in providing our residents with great spaces, then the real estate we offered would instead provide them with great stress. They wouldn’t be able to live their lives to the fullest.

Just think about how important real estate is to all of us. Think of office spaces. We all spend so much of our time at work. If we are not working in a great environment, then the real estate surrounding you could have a great negative effect on your life. If you like the real estate you are working in? It can have a positive impact on your life.

MREN: How strong is the multifamily sector in the St. Louis area today?

Tut: The multifamily market is very strong here. We have been at 100 percent occupancy at our communities for the most part. St. Louis is a bit of a straggler in terms of national trends. Nationally, there has been a lot of new construction in the multifamily sector. In St. Louis, though, new construction has only started to pick up in the last year or so. That helps us because you don’t see the overbuilding in this market that you might see in other ones.

As far as deals and investors go, a lot of the folks who were focused on the coastal markets in previous years are now looking at the Midwest. St. Louis is one of those markets that these investors are homing in on.

MREN: What kind of amenities do you like to provide in your multifamily properties?

Tut: We focus on acquiring multifamily properties that are operated by mom-and-pop owners who might not have had the infrastructure in place to provide the best living experience for their tenants. When we acquire these properties, we look to add value. First, we’ll make all the necessary physical improvements. We are looking to improve the exterior of the property, the siding, the shutters, the parking lots. We don’t want there to be any potholes in the parking lots, anything like that. We focus on improving the landscaping to beautify the exterior. We like to add swimming pools if possible and fitness centers, whatever the market will bear. For the interiors, we like to add stainless steel and granite countertops. We want to turn these units into real, modern homes.

MREN: How about when it comes to the property management side of the business?

Tut: From the operations side, we are looking to improve the property management with our in-house management company. We like to keep it as simple as possible for our residents and prospective renters. For prospective renters, we offer 3D tours online. We allow them to submit rental applications online. Residents can submit payments online. It takes the guess work out of their lives.

MREN: Why do you think you’ve been so successful in this business so far?

Tut: I surround myself with knowledgeable and helpful individuals. That’s the key. My wife, my parents, my property management team and the mentors I’ve had in my life have all been extremely helpful. They are the reason I’ve hit the level of success I’ve reached.

MREN: How big is Gateway Multifamily Group today?

Tut: Five years ago, I started with a small mobile home deal. Today, I own just under 600 units. About half are multifamily and the other half is self-storage. I also own some retail. The goal it to hit 1,000 units in the next four to five years. I do work very hard, and so do my team members. I think our success justifies our focus on providing value to our residents. Even with my team members, I want to provide value in their lives. I want them to have fulfilling careers and to earn better pay so that they can live well with their families. We want the same thing for our residents.