Mark Khuri reviews up to 700 deals a year. He invests in 10. Here's his filter.

Mark Khuri co-founded SMK Capital Management with his father, Dr. Suheil Khuri, pooling family capital informally before opening the firm's doors in 2010. They operated properties directly through 2017, then pivoted entirely to the LP side. Today SMK reviews 600 to 700 private real estate deals a year and invests in roughly 1 to 2% of them, call it 5 to 10 deals annually, across diversified funds, single-asset deals, and one-off syndications for their investor base.

Ed and Mark get into the mechanics of how SMK actually filters that flow: a 40-point due diligence checklist covering firm credentials, deal-level underwriting, and required deliverables, the discipline of comparing an operator's underwritten returns against their actual results on deals that already went full cycle, and the red flags that end a conversation before it starts (a principal who won't share their last name is an automatic no).

From there, the conversation turns to mobile home parks, an asset class SMK has been investing in since 2012. Mark explains why new supply is structurally constrained (NIMBYism, unaffordable construction economics), why 70 to 80% of parks are still owned by mom-and-pop operators with no succession plan, and the specific value-add levers SMK targets: occupancy infill and converting park-owned homes into tenant-owned homes through rent-to-own financing structures. He's candid about where the asset class has gotten more competitive, cap rates in some markets have compressed from north of 10% a decade ago to 3 to 4% today, and why SMK stays out of the priciest infill deals and the most distressed ones alike.

The episode closes on underwriting discipline: the hardest deal Mark walked away from recently, and why "pro forma" so often needs a second, much more skeptical read.

Also in this episode: the first installment of Questions from the Underground, where Ed answers a real problem an investor put to him: a contractor took most of the draws, the job is 40% done, and the contractor has gone dark. What to do first, on tape, no filler.

Real Estate Underground publishes every Tuesday.

Chapters
0:00:00 Cold open: "We like to see underwritten returns versus reality"
0:00:40 Real Estate Underground intro
0:02:03 Welcome Mark Khuri, SMK Capital Management
0:03:32 From property operator to fund-of-funds: the 2017 pivot
0:05:06 Going for the no: SMK's first filter on any deal
0:07:23 The 40-point sponsor due diligence checklist
0:09:02 Red flags: the people behind the deal
0:11:21 The exit-strategy question that reveals alignment
0:12:33 Why mobile home parks: the supply story
0:14:44 Ownership is still mom-and-pop: the value-add opportunity
0:16:28 Converting park-owned homes to tenant-owned
0:19:30 Still a darling, or getting crowded? Cap rate compression
0:21:28 Where SMK's deals actually come from
0:21:50 Questions from the Underground: the contractor who took the draws and vanished
0:26:49 The hardest deal Mark walked away from
0:27:57 "Pro forma is Latin for full of shite"
0:29:58 Cashflow gets you through the downturns
0:30:51 Final five: purpose, mentors, and the "show them 15" lesson
0:36:32 Who Mark reads: Jay Parsons, Marcus & Millichap, Richard Duncan
0:37:13 Defining success, life in Bend, Oregon, and how to find SMK

Connect with Mark Khuri:
smkcap.com
linkedin.com/in/mark-khuri-7543821

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• Clark St Capital -> Passive real estate investments for busy business owners and executives
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