The Harding Group’s Harding Easley Talks Real Estate, Prop Tech, Tax Strategy & More.
Harding Easley knows investing is so much more than just owning assets, and he has dedicated more than a decade to assembling as many resources as possible in one place for just that reason. “If I had to wrap it all up in one sentence, I provide multifamily real estate owners, developers, and property managers with strategies to improve revenue and decrease costs,” Easley said. “But there is so much more to say than that!”
Easley, who is the founder and president of The Harding Group, LLC, works directly with institutional and individual investors to optimize their investment returns by applying customized and creative strategies to their portfolios. Some of those strategies are far outside the “norm” for investors who may be primarily familiar with concepts like forcing appreciation or maximizing depreciation. Although Easley does provide consulting and implementation in these areas, he also delves into opportunities to incorporate new property technology (proptech) into asset management and optimization, a variety of ancillary income strategies for property owners, and operational expense reduction.
“I have been in real estate for a long time, and I have touched just about every type of asset class over the years,” said Easley, who spent several years embedded with multifamily data giant Yardi Matrix and retains a strong relationship with the company today. Easley started out with Yardi working with the commercial research team, but quickly moved into sales. “There is such a wealth of information and knowledge in this industry, and I was able to build a huge knowledge base and network for my own business in the process,” he said, “but I always knew I would one day be back in business for myself.”
A Tradition of Minimizing Risk & Maximizing Rewards
When Easley first started investing in real estate in 2010, the market was a very different place than it is today. “I started out investing in HUD homes in Phoenix because they were essentially guaranteed inventory,” he recalled, explaining that he soon discovered the “sweet spot” for bidding on these properties was about 88 percent of the listed price at auction. Once he had tied up a property at auction and put up $1,000 for earnest money, he would have 45 days to find a buyer for that property. “It was pretty important to build up my buyers list quickly at that point, but I had pretty low risk because I was only up to lose $1,000 if I could not find one,” he said. “It was easy and fun, and my buyers did not have to go out and bird dog or hustle to find properties because I was providing them.”
It was during these early days that Easley first got involved with self-directed investors, individuals who use self-directed individual retirement accounts (IRAs) or 401(k)s to invest in alternative assets like real estate using tax-advantaged systems. “Self-directed investors are an incredibly creative group to work with,” Easley said. “Working with them on those HUD properties is one of the reasons I prioritized including tax savings and cash flow strategies in The Harding Group’s offerings.”
Because the group’s primary mission is to improve revenues while decreasing costs, Easley and his partners work closely with experts who help clients identify research credits, qualifying tax credits, and opportunities to legally accelerate depreciation on large properties in order to bring cashflow back into the property. In some cases, pairing one of the firm’s ancillary strategies with large multifamily operations can create substantial savings through tax credits or deductions. For example, installing EV charging stations may create tax advantages, ancillary income, and an additional attractive amenity to a property. “We are always trying to come full circle and create comprehensive strategies to improve clients’ revenue,” Easley said.
Evolving in the Right Markets with the Right Offerings
When Easley started investing in HUD properties in 2010, the real estate space was “very different” from today, he said. While the majority of real estate investors remain individual or “mom-and-pop” investors today, giants like Zillow and other Wall Street firms were just entering the scene. Easley recalled how inventory began to tighten in many markets around 2016 and he realized that the future of the Harding Group would depend not just on acquiring assets but serving owners of large portfolios and small ones. “The whole space became very competitive because institutions do not buy just one or two single-family homes at a time; they buy 50 or 60 or 100,” he said. “In robust markets, people would buy anything, saying ‘The worse the better.’ You have to be careful if you want to make that work.”
Today, that mindset is even more prevalent among investors struggling to acquire assets in the white-hot post-pandemic market, and that, Easley believes, makes his services even more valuable. “Everything we do, from ancillary revenue streams to cost segregation and deferring tax liabilities goes back to maximizing return on investment,” he said. “As long as we are able to consult with our clients and deliver those kinds of results, we know we are meeting a need in the industry.”