Kappel Realty Group Rocks San Diego Residential Real Estate
In June, Patrick Kappel ’19 MSRE and the Kappel Realty Group of COMPASS were recognized nationally by RealTrends as the #2 producing large residential real estate team in San Diego and ranked 31st in the state of California, placing Kappel Realty Group amongst the top one percent of all residential real estate brokerage teams in the United States.
The Kappel Realty Group is composed of twelve real estate agents, 25 percent of whom are USD Knauss School of Business real estate graduates. Along with Kappel, the team consists of Ted Kavich ’19 MSRE and Mitch DiLorenzo’19. All three USD alumni are also military veterans.
“I am incredibly proud of our team and my fellow Toreros who have helped to make such an impact on the San Diego real estate market,” says Kappel. “I am also eternally grateful for the guidance and education that I received from the faculty and staff at USD and the support from the Burnham-Moores Center. My vision of building a brokerage team and serving San Diegans within the two-to-four-unit niche started when I was a graduate student in the MSRE program, and I would not be where I am today if it were not for my time at USD.”
Prior to the MSRE program, while serving in the military, Kappel began purchasing one to-four-unit investment properties in San Diego, in-between his Navy deployments. Realizing that anyone can build long-term wealth through real estate ownership, Kappel started the Kappel Realty Group in late 2019, following his completion of USD’s Master of Science in Real Estate program. His vision was to serve local mom and pop investors in the one-to-four-unit market, as well as first-time home buyers. Kappel currently owns eight properties in San Diego, consisting of a mix of single-family and two-to-four-unit investment properties.
The Kappel team currently specializes in guiding both seasoned and new real estate investors who want to break into investment real estate ownership through the purchase of duplexes, triplexes and fourplexes.
While building a niche in the two-to-four-unit San Diego real estate market, Kappel Realty Group represented either the buyer or seller on nearly 7 percent of all two-to-four-unit property sales in San Diego County during the team’s initial full year in 2020.
“What many people do not realize is how powerful of a wealth building tool it can be to purchase a two-to-four-unit property as an owner-occupied residence, or how easy it is for just about anyone to invest in multifamily real estate,” says Kappel. “Duplexes, triplexes and fourplexes are treated very similarly to single family homes when it comes to financing. You can purchase one of these multifamily properties with conventional 30-year fixed financing and very little money down or out of pocket using owner-occupied loans, including the VA loan. For this reason, many of our first-time homebuyer clients opt to purchase a duplex to gain access to investment real estate with conventional financing. A buyer is only required to live in the property for one year and then they can move out while keeping the 30-year fixed owner-occupied financing in place.”
Kappel further shared that the two-to-four-unit niche straddles a space between residential and commercial brokerage.
“Because two-to-four-unit properties share similarities with residential real estate brokerage (such as contracts and disclosure law) and because these same properties also share similarities with commercial real estate brokerage (like needing to know how to calculate the GRM and CAP rate), I found that it was rare for a commercial broker to fully understand the contracts and disclosures required for a 2-4 unit property, and similarly rare for a residential broker to fully understand the financials behind an investment property,” says Kappel. “Having worked in both sides of brokerage, and armed with an MSRE from USD, I found this as a perfect blue ocean niche to build and grow a real estate brokerage team.”
Over the last four years, the Kappel Realty Group has sold close to half a billion dollars in San Diego real estate. The team is highly selective when recruiting agents. The agency has earned The San Diego Association of Realtors’ (SDAR) Silver, Gold and Platinum awards and over a third of the team has been recognized as a “40 Under 40” by SDAR.
In 2020, Kappel was also recognized as the San Diego Team Leader of the Year by SDAR. Along with investors, the Kappel team assists first-time home buyers while educating clients on the advantages of long-term real estate ownership.
More than 50 percent of the agents at the Kappel team hold a master’s degree. Collectively, the Kappel Realty Group approaches real estate sales from an educational perspective, holding monthly real estate webinars that focus on educating consumers and their client base of budding real estate investors.
Since Kappel’s graduation from the MSRE program in 2019, the team has maintained close ties with the Burnham-Moores Center for Real Estate and by serving as mentors within the center’s mentorship program and as guest speakers for the USD Real Estate Society.
Kappel purchased his first property in 2008, shortly after earning his undergraduate degree, and he offers the same advice to students and recent grads.
“The most important thing a new graduate can do to build long term wealth is own real estate—don’t rent,” says Kappel. “San Diego and California offer numerous down payment assistant programs, including grants that can help young graduates purchase their first property with the down payment being covered by the government. One of our first-time home buyers recently received over $100K from the government to go towards their down payment. Along with buying real estate after graduation, new grads looking to set their mark and make an impact should identify a segment within the real estate industry that is underserved or not yet efficient and figure out how to make it efficient. Often the best ideas come from the younger generations and new graduates that offer a fresh perspective. It’s the younger minds that look at challenges in our industry with the most critical eyes while offering the freshest future-looking perspectives on how we can improve and grow to new heights."