Does Your Passive Deal Need Everything to Go Right?
Irwin Boris of Peykar Capital has worked on over $5 billion in real estate deals. Here’s how he spots the ones built on too many assumptions.
In 2021, Irwin Boris was paying $250 per unit to insure an apartment building in Virginia Beach.
By the time the market peaked, that number was $1,100.
Same building. Same 448 units. Same tenants.
Just a different cost structure, and one nobody had modeled.
That building survived because it carried very little debt.
But Irwin watched plenty of deals structured differently.
Bridge debt. Low going-in cap rates. Heavy renovation budgets.
Deals that needed, as he put it, “a perfect rocket trajectory” just to break even.
When insurance quadruples and a $10,000 renovation job becomes a $23,000 job for identical scope, a deal built on tight assumptions only needs one cost line to move.
“All that you needed was one thing to pull the bottom apple off the display and they’re all going to come rolling.”
Irwin started as a CPA, moved through multifamily management, loan origination, and asset management, and has been involved in more than $5 billion of transactions across apartments, hotels, industrial, office, and construction lending.
He has seen what works in a model, what survives in the field, and what breaks when the costs move.
That is what pulled him toward small-bay industrial.
Why the lease structure changes the math
In multifamily, the landlord absorbs operating cost increases.
Insurance goes up, the landlord absorbs it.
Taxes go up, the landlord absorbs it.
That is the exposure that cracked deals when costs moved faster than rents could follow.
In small-bay industrial, most leases are triple-net.
Tenants pay their proportional share of building operating costs based on square footage.
A 10,000-square-foot tenant in a 100,000-square-foot building pays 10% of what it costs to run that building.
In a true triple-net lease, those cost increases are meant to pass through rather than sit entirely on the owner’s side.
Lease length compounds this advantage. Apartment leases reset annually.
Industrial leases run three, five, seven, or ten years. And industrial tenants typically invest heavily in their space — equipment, employees tied to the location, supplier routes, customer relationships.
Moving creates business disruption that can cost far more than any rent savings.
“It’s the triple net, it’s the nature of the leases, and it’s the tenant investment, the combination of those three that makes it a better investment.”
What the spreadsheet cannot show you
Irwin usually does tenant interviews before closing on a building.
His questions: how long have employees been with the company, how far do they commute, where are the suppliers, where are the customers, how does the tenant move goods.
His team owns a building about two miles from a Honda factory in Marysville, Ohio.
Through tenant interviews they discovered that auto suppliers need to be within a certain proximity of the plant.
When supply contracts come up for rebid, competing vendors want to tour that building because winning the contract requires that location.
The question he wants answered is simple: why does this tenant need this specific building?
A compelling answer means a sticky tenant.
A weak answer is a different conversation entirely.
What a careful operator looks like
Irwin went 18 to 19 months without buying anything when rates were moving.
He thinks they probably could have found deals.
At the time he had uncertainty, and he was unwilling to ask investors to share it with him.
He over-reserves on every deal.
More cash held back for tenant improvements, leasing commissions, and capital work than a clean pro forma would suggest.
It lowers the projected return but also removes the chance of going back to investors for more capital.
When roof work on one building took three years due to post-COVID material backlogs, the completed project had excess cash.
Irwin returned $500,000 to investors.
Some thought they had been paid their distribution twice.
That same “no surprises” mindset shows up in his reporting.
Every month, investors receive the full property financial package: the balance sheet, income statement, general ledger, accounts receivable, accounts payable, rent roll, and property bank statements.
Some investors ask if they really need all of it.
His answer is simple:
“You’re an owner. You should have it every month.”
Questions to ask before you invest
Before looking at the projected IRR, ask what the deal pays from income already in place.
You want to know the day-one cash distribution because it shows whether the return is supported by current operations or depends mostly on future execution.
Then ask the operator the downside question:
Would you own this property forever?
That the real test.
If the upside case falls short, the property still needs to cash flow.
The goal is simple:
"Do not lose my principal"
RED FLAGS
✓ A deal where most of the return depends on future upside rather than current in-place income
✓ A loan that matures at the same time as the planned exit
✓ A sponsor with limited reporting, or an investor relations contact who cannot answer deal-specific questions
✓ A sponsor who sounds too certain. “Anybody tells you they 100% know what they’re doing, run.”
Insurance going from $250 to $1,100 per unit is a cost category doing what cost categories do.
The question is whether the deal was built to absorb it.
Boring real estate, careful underwriting, and fewer assumptions that need to go perfectly right.
If that sounds like the kind of passive investment you’d be interested in, you can join Peykar Capital’s investor update list to learn more about his approach and see future opportunities as they become available.