Ep. 046: Finding Opportunity Where Others Aren’t Looking: John Todderud's Multifamily Journey
In a recent interview with Dustin, investor and syndicator John Todderud of Cardinal Oak, shared how he built a diversified multifamily portfolio across the U.S. over the past 15 years. His story is one many investors can relate to: starting small, learning the hard way, and gradually scaling through disciplined decisions, market selection, and operational focus.
From IT Consulting to Real Estate Ownership
Based in Seattle, John spent much of his career in information technology and software engineering, including running his own consulting business and managing engineering teams. Like many professionals, he turned to real estate as a way to build long-term wealth and create stability for his family.
John’s early investments were modest—3- to 4-unit properties close to home. In the beginning, he handled nearly everything himself: leasing, advertising on Craigslist, maintenance, and tenant communication. Those hands-on years came with tough lessons, including taking over a “tenant-occupied” unit that turned out to be vacant. Experiences like that taught him the importance of proper documentation, leases, and systems early on.
Over time, John improved operations, upgraded his tenant base, and traded up into larger properties. Discovering third-party property management became a turning point, freeing him from daily operations and allowing him to focus on strategy, acquisitions, and capital raising.
Why He Moved Beyond Seattle
While the Seattle market benefits from strong job growth and a major tech presence—Amazon, Microsoft, Google, Meta, and Apple all have a footprint there—John ultimately chose to shift his investment focus away from Washington State.
The reason was regulatory risk. Increasingly tenant-friendly laws made it more difficult to manage properties and enforce leases, particularly around evictions and compliance. While John acknowledges that many investors still succeed in Western Washington, he personally preferred markets with fewer regulatory headwinds and more predictable operating environments.
Finding Opportunity in Emerging Markets
Early in his investing journey, John was influenced by Dave Lindahl’s framework around emerging markets. Rather than chasing headline cities, he began studying population trends, job growth, and business expansion across the country.
His market focus evolved over time:
Initially targeting parts of the Southeast, including the Carolinas, Georgia, and Tennessee
Avoiding hyper-competitive markets like Texas and Florida early on
Eventually moving further inland to markets in the Midwest and Southern tier, including Kansas, Missouri, Oklahoma (notably Tulsa), and Arkansas
What draws him to these markets is a combination of long-term fundamentals and practicality: steady job growth, expanding industries, landlord-favorable regulations, and tenant bases where leases can be enforced fairly and consistently.
Deal Criteria and Value-Add Focus
John primarily targets B- and C-class multifamily properties with clear value-add potential. His strategy centers more on increasing income than simply cutting expenses.
Key elements of his buy box include:
Below-market rents with a realistic path to improvement through renovations and operational upgrades
Property size that can support on-site management (typically 70–80+ units), while remaining open to smaller deals with strong third-party managers
High certainty of execution, avoiding deals where raising equity would be overly aggressive or speculative
Controlled financing risk, steering clear of heavy-lift, low-occupancy deals unless the risk-adjusted returns are compelling
Lessons From Operational Challenges
Like most long-term operators, John has faced his share of issues—from persistent roof leaks that eventually triggered city inspections, to serious problems caused by inadequate tenant screening.
Some of his biggest lessons include:
Fix root problems early. Repeated temporary fixes can escalate into regulatory involvement and significantly higher costs.
Take tenant screening seriously. Incomplete background checks can lead to major safety and liability issues. John now insists on strict screening standards and has replaced property managers when those standards weren’t met.
Prioritize communication. Evictions are rarely anyone’s goal. When tenants communicate early about hardships, owners and managers can often connect them with nonprofits, VA resources, or assistance programs to find solutions.
John also shared several red flags he watches for in property management:
Renewing tenants far below market with no plan to gradually adjust rents
Poor curb appeal and deferred maintenance
Slow unit turns, especially when move-outs are known well in advance
Regular site visits—including unplanned ones—and trusted local contacts help him ensure managers are truly operating with an owner’s mindset.
Outlook for 2025 and Beyond
John has been cautious over the past few years, pointing to the gap between seller expectations and what buyers can realistically pay in a higher-interest-rate environment. Still, he believes the market is approaching an inflection point.
New construction is slowing, supply pressure is easing, and many markets remain fundamentally healthy. As pricing adjusts, John expects more attractive buying opportunities and is positioning himself to be an active buyer.
At the same time, he offers a clear warning: investors who wait until conditions look “perfect” often miss the best opportunities. By the time every signal turns green, competition has usually returned.
How to Connect With John
John is open to conversations with investors and operators interested in emerging markets, syndication, and multifamily operations.
Website: learnaboutapartments.com (redirects to Cardinal Oak Investments)
Email: john@cardinaloak.com
His approach reflects a willingness to share lessons learned and help others progress more efficiently on their own investing journeys.
