The Rent Roll with Jay Parsons

Episode 47: "Dan Meader | What Are LP's Looking For Right Now?"
Release Date: August 21, 2025
Guest: Dan Meader, Founder & Managing Partner, Trinity Investors

Overview

In this episode, Jay Parsons explores the current state of rental housing investment, focusing on the key question: What are Limited Partners (LPs) actually looking for in today’s market? With debt widely available but equity tightening, Jay invites Dan Meader of Trinity Investors, one of the largest institutional LPs in multifamily, to break down what LPs expect from deals and sponsors, what excites them in today’s market, and how general partners (GPs) can better align with LPs to secure capital. The episode also touches on recent, questionable government data regarding housing starts, and broader trends in rental housing and technology.

Key Discussion Points & Insights

1. Housing Starts Data and Its Questionable Reliability

• Jay Parsons begins with a critique of recently released U.S. Census data, which suggests a major, implausible rebound in multifamily construction starts.
  • [03:35] “When you see data for back-to-back months suggesting that we're having some massive rebound in multifamily construction, well, that's just ridiculous. It's implausible.” – Jay Parsons
• Jay highlights inconsistencies by referencing private sector data (CoStar, RealPage), architectural billing indices, and statements from major REIT CEOs—all of which point to historic lows rather than surges in starts.
• He warns that inflated starts data could misinform policy, dampening urgency for needed reforms and misguiding interest rate strategy.

2. Market Trivia and Headlines

• Jay runs a trivia segment on the peak year for multifamily starts (answer: 1972) and covers headlines:
  • Boston lease activity slowdown tied to international student visa issues.
  • AI’s emerging role in rental operations and leasing, with growing (but nuanced) returns for apartment owners/operators.

3. Introducing Trinity Investors

• Dan Meader shares his personal and professional background, emphasizing the importance of foundational finance skills (accounting, financial analysis, and understanding cash flow).
  • [22:51] “Cash is more important than our mothers.” – Dan Meader

4. Trinity’s Approach to Multifamily Investment

• Post-GFC, Trinity entered multifamily real estate, now holding over 22,000 units.
  • They see multifamily as a core, cyclical asset within a diversified portfolio (includes senior, industrial, hospitality).
• Trinity specializes as an LP rather than a GP, crediting domain expertise:
  • [28:21] “If what our mandate is is to go out and find well-priced, well-structured alternative asset investments, we, Trinity, are not in a position to go out and get down to the development level. So... we really want to find domain experts.” – Dan Meader

The “Three B's” of Trinity’s Philosophy

• Baseball: Lessons on behavior, cycles, and statistics.
• Business Models: Core understanding of value-add, function, and structure between GPs/LPs.
• Balance Sheets: Underpin ability to take risk, get credit, and weather volatility.
• Bonus B: Books—ongoing learning recommended for all investors.

5. LP vs. GP: Roles, Risk, and Value

• Trinity acts as a rigorous filter, sparing investors from the operational headaches of direct property ownership (“nobody calls you to fix their toilet at 11:00pm on Tuesday night…”).
  • [32:59] “They underprice their time and they underprice the reality of managing real estate.” – Dan Meader
• Trinity’s value proposition: Sponsor vetting, structure, risk management, and ongoing stewardship—even through underperformance.

6. How Trinity Evaluates GPs

• Looks beyond mere track record to actual participation and responses in adverse scenarios.
  • [34:37] “Is it really your track record? Is it someone else’s track record? … I think track records are a little bit overrated.”
• Focus on references, transparency, integrity, and resilience across cycles.

7. Investment Strategy Preferences

• Trinity favors direct asset deals (single-asset over funds), but prioritizes diversification within and across real estate types/markets.
• Today, is especially cautious: Multifamily is “choppy”—rates up, rents down or flat, bid/ask spread wide.
• Not a “market timer” but advocates avoiding forced sales into soft markets and sees ground-up development as preferable to existing workforce housing for now.

8. Underwriting and Buy Box

• Specialty in Southeast/Southwest markets for demographic and economic reasons—but keeps an open mind for “alpha” in overlooked regions.
• Underwriting considers balance sheet strength, realistic rent projections, construction costs, submarket demand trends (“tailwinds”), and risk of execution.
  • [46:06] “Our buy box at this point begins back with that GP balance sheet.”

9. Partnering with LPs: Advice for GPs

• Bring genuine domain expertise, an honest evaluation of your value-add, and a realistic understanding of the challenges. Don't overpromise or oversell.
• Business models must be robust—property management is underestimated in its difficulty and importance.
  • [51:33] “I have enormous respect for people that own shitty businesses...property management at the multifamily level, that’s a shitty business.” – Dan Meader
• Character matters: Transparency, patience, and alignment are non-negotiables.
• Pricing/customer acquisition: GPs should deeply understand—and communicate—the cost of client acquisition and credit risk.

10. Book Recommendations for Investors

• Behavioral finance (Daniel Kahneman, Richard Thaler)

• Michael Lewis (storytelling in finance/business: “The Big Short,” “Money Ball,” etc.)

• “The Psychology of Money” by Morgan Housel.

• Historical fiction (Eric Larson) for perspective on history and decision-making.

  • [56:24] “Spend more time with behavioral finance...just because a spreadsheet says this is a good deal, it doesn’t make it a good deal. It’s about people, it’s about culture, it’s about process.” – Dan Meader

Notable Quotes & Memorable Moments

• [22:51] “This whole idea about multifamily and tenants and absorption and affordability, sometimes you learn by collecting $3.10.” – Dan Meader (on his first lessons in cash flow)
• [28:21] “The institution of baseball teaches us not only about sports, but teaches about behavior.” – Dan Meader (introducing his “Three B’s” framework)
• [32:59] “One of the reasons we like people to come to Trinity is we are going to evaluate sponsors, we are going to evaluate structures...and make sure that nobody calls you to fix their toilet at 11 o' clock on Tuesday night.”
• [34:37] “Is it really your track record? Is it someone else’s track record? … I think track records are a little bit overrated.”
• [51:33] “I have enormous respect for people that own shitty businesses...property management at the multifamily level, that’s a shitty business.”
• [56:24] “Spend more time with behavioral finance...just because a spreadsheet says this is a good deal, it doesn’t make it a good deal. It’s about people, it’s about culture, it’s about process.”

Key Timestamps for Important Segments

• 00:00–07:45 | Jay Parsons’ Opening Monologue:

  • Debunking the “riddle” of today’s GP difficulty—equity, not debt, is the real constraint.
  • Critique of Census multifamily housing starts data and its real-world implications.

• 20:43 | Introduction of Dan Meader; Background and Trinity Investors

• 27:44 | The “Three Bs” framework for LP thinking

• 34:05 | Evaluating GPs: Track Record vs. Real Participation

• 38:38 | How Trinity views the current multifamily market; attractiveness vs. other real estate

• 41:10 | Dealing with negative leverage; underwriting deals in a challenging market

• 44:10 | Ground-up development vs. workforce housing

• 46:06 | Buy box: Market/asset selection, geographic focus

• 50:22 | Advice for GPs looking for LP partners

• 54:53 | Ideal GP partner characteristics

• 56:21 | Book/reading recommendations (behavioral finance)

• 59:31 | Concluding remarks

Takeaways for Listeners

• LPs in 2025 are laser-focused on sponsor credibility, realistic business plans, and are wary of “track record inflation.”
• The current market remains uncertain and challenging for multifamily, with equity more scarce than debt. LPs are patient, disciplined, and favor ground-up projects in high-growth markets when risk can be managed.
• For GPs: Domain expertise, character, and alignment matter more than ever when seeking institutional partnerships. Honesty about business models and the realities of execution is critical.
• Broader market trends: Data quality matters for both policy and investor decision-making. AI and tech are slowly moving from novelty to real operational tools.
• Successful investors read widely—especially in behavioral finance—recognizing that great deals are about more than spreadsheets.

This summary covers all substantive content from the episode, excluding introductions, advertisements, and end credits.