The PEM Story: From One Duplex to a Multifamily Investment Leader

When people ask what inspired me to build Professional Equity Management (PEM), they’re often surprised by the simple answer: I wanted to spend more time at home.

In 1994, I was working as a consultant with Arthur Anderson and subsequently Price Waterhouse, helping major companies like Caesars World in Las Vegas and Mercedes Benz implement operational changes. My background in accounting and finance had created opportunities for advancement, but the constant travel was taking its toll. So, I thought I would augment my income with a few rentals to take a job more locally.

That practical decision—investing in a single duplex in Detroit, Michigan—unexpectedly set me on a journey that would transform not just my career but also the lives of countless residents, employees, and investors. As that initial investment grew to 176 apartments, I eventually made the leap to stop working for others and focus entirely on growing PEM.

Today, with over 25,000 units acquired across multiple states, more than $2 billion in transaction volume, and having successfully navigated five distinct downturns, I can look back at that humble beginning with perspective. Real estate isn’t just about properties—it’s about creating value, building communities, and generating wealth through disciplined investments, operational excellence, and trusted partnerships. This approach has become increasingly important as the industry continues to evolve with demographic shifts and economic changes.

This is the story of how we got here.

Foundations: Building Brick by Brick

The early years in Detroit taught me lessons that remain fundamental to PEM’s approach today. Managing those first properties—handling everything from resident screening to maintenance calls—provided invaluable ground-level insights that continue to inform our investment decisions.

Working directly with residents, I quickly realized something that would eventually shape our entire mission: the most successful real estate investments aren’t just financially sound—they provide exceptional service to the people who call them home. This realization formed the foundation of what would become our formal mission of “generating wealth through strategic multifamily investments while operating thriving communities that enhance residents’ lives.”

My background in accounting and finance proved essential during these formative years. I applied analytical rigor to each potential acquisition, creating evaluation frameworks that went beyond the standard industry metrics like cap rates.

By the early 2000s, I sensed the business climate changing in Detroit. Our cash flow-focused approach made it easy to identify when something was shifting in the market. After investigating whether performance changes stemmed from employees, operations, or broader market conditions, I determined the challenges were market driven. We had invested heavily in property improvements—security gates, cameras, and amenities that enhanced both safety and resident satisfaction. Recognizing the market reality, we strategically sold most of our Detroit portfolio to out-of-market investors attracted by the higher cap rates compared to their home markets.

These buyers quickly switched to third-party management and made decisions based purely on budget constraints, cutting the very improvements we knew were essential for resident safety and satisfaction. The results were predictable: when residents realized the new ownership didn’t care about their experience, they stopped caring about being good residents. This experience reinforced my belief that successful real estate investment requires understanding that operational excellence and resident relationships are fundamental to sustained performance.

Making another pivotal decision, I began exploring opportunities in other states. During this period, I also pursued my law degree from Wayne State University (1999-2002), adding legal expertise to my foundation in accounting and finance. After considering Florida, which was not a fit, I discovered Arizona—a market that proved perfect for both my family and PEM.

Navigating Through Storms: Lessons from Five Downturns

The real estate industry is infamous for its cyclical nature. In a sector where many firms struggle to maintain consistent investment approaches across changing market conditions, or fail to survive significant downturns altogether, PEM stands out for its disciplined strategy that has remained steadfast through multiple economic cycles.

PEM’s 30-year journey has spanned five distinct economic downturns:

1. Detroit Auto Industry Struggles (1993-1994): Our formative years coincided with significant challenges in Detroit’s auto industry, including NAFTA implementation fears, continued GM plant closures, rising legacy costs for healthcare and pensions, and increased competition from Japanese automakers. This period taught us early lessons about market-specific risks and the importance of understanding local economic drivers.
2. The Dot-Com Crash/Market Disruption (2000-2002): The collapse of the technology bubble triggered a broader recession, and as capital fled tech investments seeking real estate stability, competition for multifamily properties intensified. Many investors began bidding aggressively on assets with inflated assumptions about performance. We maintained our disciplined underwriting standards while others chased increasingly competitive deals.
3. Auto Industry Crisis of the Mid-2000s (2004-2006): Before the broader national crisis, Detroit experienced another wave of auto industry restructuring, with Ford, GM, and Chrysler struggling with pension obligations, healthcare costs, and losing market share. This period reinforced our understanding of concentrated industry risk and influenced our eventual geographic diversification strategy.
4. The Great Financial Crisis (2007-2009): This watershed moment separated disciplined operators from speculative players. Our conservative approach to debt—typically limiting loan-to-value ratios to 55-65%—provided crucial stability when overleveraged competitors faced existential threats. In fact, we were able to grow during this period, expanding from operating in 1 state in 2009 to 14 states by 2013 as opportunities emerged from market dislocations.
5. The Interest Rate/Inflation Crisis (2022-Present): The current environment of rising interest rates and inflation has created significant challenges across the real estate sector, yet our conservative approach continues to provide stability. During this period, we launched our first commingled fund and began actively acquiring new assets, demonstrating our ability to capitalize on opportunities even in challenging market conditions.

Throughout each of these downturns, our conservative financing and disciplined, strategic investment approach have provided crucial downside protection when overleveraged competitors faced existential threats. This comprehensive approach to risk management has always been fundamental to PEM’s strategy.

Building on this foundation of financial conservatism, in 2016 we made an additional strategic decision to reposition our asset quality, trading our Class B and C assets from a peak of over 12,000 apartments to focus on fewer than 4,000 higher-quality Class A and A- apartments. As I often say, “Better to sell a year too early than a day too late.” This strategic repositioning reflected our anticipation of the next market cycle shift and our commitment to protecting investor capital.

This forward-looking approach to portfolio management—making changes before they become necessary—exemplifies our commitment to capital preservation and sustainable growth. PEM is highly selective and data-driven in our approach to identifying the most advantageous markets and regions. This strategy has proven particularly valuable as Sun Belt markets have emerged as growth leaders. According to the U.S. Census Bureau, the South accounted for 87% of the nation’s growth in 2023, as the region added over 1.4 million residents for a total population of 130,125,290. This growth reflects a sustained trend—analysis shows that from 2020 to 2022, Texas and Florida alone added over 1.5 million residents combined, demonstrating the region’s continued appeal.

Across our 30+ year history spanning these downturns, we’ve maintained an average IRR of over 20% since inception—performance that reflects not just market timing but operational excellence and strategic discipline. Through disciplined investments and strategic partnerships, we’ve generated over $300 million in gains for our investors. More importantly, we’ve preserved investor capital through downturns that claimed many competitors.

Hands-On From Day One: Our Vertical Integration Foundation

Perhaps most importantly, our vertically integrated approach wasn’t a strategic decision made as we grew—it was how we started from that very first duplex in Detroit. When we improve a property, we’re not just increasing its market value; we’re creating a better living experience for the people who call it home, because we’ve been directly responsible for that experience from day one.

From the beginning, I was directly involved in all aspects of property operations. This wasn’t by choice initially; it was necessity. But those early years of hands-on management provided invaluable insights that many investment firms never acquire because they outsource these critical functions from the start.

Working directly with residents taught me that exceptional property management isn’t just about maintaining buildings—it’s about creating homes. This ground-level understanding became the foundation of our mission to generate wealth through strategic multifamily investments while operating thriving communities that enhance residents’ lives.

As our portfolio grew from that single duplex to dozens and then hundreds of units, we faced a critical decision: maintain our hands-on management approach by building internal capabilities, or outsource to third-party managers like most investment firms. The choice was clear. The attention to detail, resident focus, and operational insights we’d developed gave us a competitive advantage we weren’t willing to sacrifice.

Rather than viewing property management as a separate business, we built it as an integrated part of our investment strategy. This approach required significant investment in people, systems, and processes, but it has paid dividends in performance that far outweigh those costs. Even today, I still visit our portfolio properties personally and stay involved in operational matters, maintaining that direct connection to the resident experience that shaped our approach from the beginning.

Our vertical integration delivers tangible advantages:

• Faster Response Times: When market conditions change, we can implement adjustments across our portfolio within days, not months.
• Superior Quality Control: Our maintenance and property improvements follow consistent standards that protect long-term value.
• Data-Driven Decision Making: Our operational insights feed directly into acquisition underwriting, creating a continuous improvement loop.
• Enhanced Resident Experience: Our team members understand they’re not just managing buildings—they’re creating homes.

This integration also enables us to embody our core values across every touchpoint:

• Integrity: We do what we say we will do
• Stewardship: We carry out our responsibilities fully and professionally
• Growth: We grow continually developing ourselves, our communities, and our company
• Respect: We value our customers, our vendors, and fellow team members, demonstrating people matter most
• Urgency: We are responsive to the needs of others

These aren’t just words on a wall—they’re principles in action throughout our organization, from how we communicate with investors to how we respond to resident maintenance requests.

The PEM Advantage: Disciplined Strategy in Action

Our approach to multifamily investment has evolved through decades of experience but remains anchored in several distinctive principles:

1. Disciplined Capital Deployment: We don’t have pressure to deploy capital simply to meet arbitrary timelines. We’ve walked away from dozens of potential acquisitions that didn’t meet our rigorous underwriting standards, even in competitive markets when capital deployment pressure is highest. This patience has helped us avoid the pitfalls that come with chasing deals at any cost.
2. No Capital Calls: We don’t ask for additional capital from partners after the initial investment. If additional funding is needed, our owners provide it. This eliminates the uncertainty and challenges often associated with investment funds. Investors deserve predictability. The last thing they need is an unexpected capital call disrupting their financial planning. Additionally, I am the largest investor in all our investments, and if needed, I often elect to take the first loss before anyone else. This instills more trust and confidence with our investors, as they know we look out for them first.
3. Conservative Debt and Rate Caps: We maintain moderate leverage (55-65% LTV), typically with fixed rates, interest-only terms, and conservative rate caps. Our conservative debt structures provided crucial stability during the 2007-2009 financial crisis when overleveraged competitors faced severe challenges, while our rate caps have proven invaluable during the current interest rate environment, protecting our properties and investors from the payment shock that has impacted many real estate investments since 2022. This comprehensive approach to financing allows us to weather market volatility while maintaining operational flexibility.
4. Strategic Market Selection: Our focus on high-growth Sun Belt markets leverages demographic and economic trends that support long-term appreciation. We analyze not just current population growth but also the underlying drivers like job creation, infrastructure development, and quality of life factors that sustain demand.
5. Strategic Asset Selection: Our success stems from our historical ability to identify the right asset class at the right time, leveraging our proprietary network to source unique opportunities, many of them off-market deals like those that comprised our Fund I portfolio. Our current portfolio consists of high-quality, well-located Class A and A- assets with above-market occupancy levels, attractive rent growth potential, adequate reserves, and conservative debt structures. This positioning reflects our tactical approach to asset selection based on current market conditions. Our experience across multiple market cycles has shown that institutional-quality assets tend to maintain stronger occupancy levels and more stable valuations during economic downturns, while recovering more quickly when market conditions improve.

This disciplined approach has allowed us to deliver consistent results through varying market conditions while building a reputation for reliability and performance. Our track record of exceptional performance reflects this commitment to disciplined capital deployment and strategic patience.

The Path Forward: Building on Our Foundation

The launch of PEM’s first fund marked a significant milestone in our strategic growth. Having recently completed that fund with a final acquisition in May 2025, we’ve successfully assembled a portfolio of six institutional-quality assets across strategic Sun Belt markets totaling $347 million and 1,549 units. Today, PEM manages $1.2 billion in owned assets under management, and this achievement represents the culmination of our disciplined investment approach and positions us for continued growth.

Looking ahead, our vision remains clear: “To be the most trusted investment partner and operator of multifamily assets, known for integrity, performance, and exceptional service across all market cycles.”

The reality is that market conditions will continue to evolve, presenting both challenges and opportunities. Population growth, employment growth, and a business-friendly economic outlook remain strong drivers for the Sun Belt markets where we’ve strategically positioned our portfolio. Our Fund I portfolio reflects this established regional focus and validates our long-term investment thesis. Interest rates, regulatory environments, and demographic patterns will shift. But our approach—rooted in thirty years of experience and proven through multiple cycles—will continue to guide our decisions.

The path forward will continue to be guided by our proven approach—discipline, vertical integration, and long-term thinking. The portfolio we’ve built represents the practical application of the lessons we’ve learned over three decades and serves as the foundation for our next chapter of growth.

That first Detroit duplex taught me that real estate investment isn’t just a business—it’s a responsibility. To our investors who trust us with their capital. To our residents who trust us with their homes. To our employees who trust us with their careers. And to the communities where we operate.

As I often say, “to much is given, much is required.” I consider it a great privilege and responsibility to lead PEM, and I remain as passionate about our mission today as I was when we began this journey three decades ago.

The saying is true that if you do something you love, you’ll never work a day in your life. What began as a simple desire to spend more time at home has evolved into creating homes for thousands of residents and investment opportunities for countless partners. In a beautiful twist of irony, that initial quest for work-life balance led to building not just my own home life, but helping others build theirs—both literally through our properties and figuratively through the financial security our investments provide.

Through every acquisition, renovation, and interaction, we’re not just building a portfolio—we’re creating value that extends beyond balance sheets to enhance lives and communities.

That’s the PEM story—and we’re still writing new chapters every day.

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Paul Mashni is the Founder and CEO of Professional Equity Management (PEM), a vertically integrated real estate investment firm specializing in multifamily properties. With over 30 years of experience and more than 25,000 apartment units acquired, Paul has successfully navigated five downturns while maintaining an average IRR of 20% since inception. His background in accounting and finance, along with his law degree from Wayne State University, informs PEM’s disciplined approach to investments. Paul holds a Bachelor of Science in Accounting and an MBA in Finance from Michigan State University.

Would you like to learn more about PEM’s investment opportunities? Contact our team to discuss how our approach might align with your investment goals.