How to Scale an Affordable Housing Fund Without Burning Out: Lessons from Matt Semegran

Why This Episode Matters

Scaling real estate is exciting, but what happens when growth outpaces your systems? In this episode of the Affordable Housing & Real Estate Investing Podcast, host Kent Fai He speaks with Matt Semegran, CEO-turned-fund manager at Emerald Century Capital. Matt went from consulting on a 400-door property management company to helping scale it to 1,500 single-family homes, all backed by a real estate fund.

For affordable housing investors, developers, and fund managers, this conversation is a crash course in balancing capital, operations, and people. If you’ve ever asked yourself how to scale without breaking, or how to responsibly raise and deploy capital for affordable housing, this is an episode you’ll want to study.

Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments.

How Do Real Estate Funds Actually Work for Affordable Housing?

Most new investors hear about “funds” but don’t really understand how they operate. Matt breaks it down simply:

• A fund pools capital from many investors—pension funds, insurance companies, or everyday accredited investors—and deploys it into assets.
  
  

• In multifamily or commercial projects, it’s common to see funds because one property may require $50M.
  
  

• In Matt’s case, the fund raised hundreds of millions to buy distressed single-family homes in working-class neighborhoods, renovate them, and rent them as affordable housing
  
  

This model gave his team access to significant capital, but it also created extreme pressure to deploy quickly. Once the money is raised, preferred returns (often 8–12%) start accruing whether the properties are stabilized or not. That “ticking time bomb,” as Matt puts it, forces aggressive acquisitions and fast rehabs.

What Are the Risks of Scaling Too Fast in Affordable Housing?

Growth is seductive. Matt’s team scaled from 900 to 1,500 doors in less than two years, but the growth curve exposed painful lessons:

• Operational bottlenecks: Contractors and property managers couldn’t keep up. Properties piled up needing renovations.
  

• Capital pressure: Every month that units weren’t producing income, preferred returns accrued, eating into profitability
  

• Team burnout: Property managers and contractors felt overwhelmed. Growth without infrastructure strained morale and execution.
  
  

Kent summarized it best: scaling without proper systems is like forcing too much water through a skinny pipe—the pipe bursts.

How Do You Vet Contractors and Build the Right Team?

One of Matt’s most practical lessons: don’t pretend you’re good at everything.

• Matt admitted he wasn’t a construction guy, so he partnered with a seasoned GC, Tyler, who handled contractor vetting and quality control.
  

• Instead of trying to learn construction on the fly, Matt doubled down on what energized him: raising capital, networking, and building investor relationships
  

• His advice: “Figure out what you’re good at, then partner with people whose strengths cover your weaknesses.”
  
  

This resonates across affordable housing: the best developers aren’t one-person shows. They assemble A-players—fundraisers, contractors, property managers—into a championship team.

When Should You Pause Growth Instead of Chasing More Doors?

Matt shared a rare perspective: sometimes the bravest move is to hit pause.

His company was getting 100+ new houses a month, many needing heavy rehab. They had more projects than crews could handle, more tenants waiting than property managers could onboard, and more pressure than systems could sustain.

The lesson:

• If projects keep slipping behind schedule,
  

• If every department is “always behind,” and
  

• If your team is drowning,
  

…it’s time to stop acquiring and regroup. Scaling too fast without systems is one of the fastest ways to implode.

Key Insights from Matt Semegran

• Raising capital comes with responsibility. Preferred returns and investor expectations add constant pressure.
  

• Growth requires infrastructure. Without contractors, property managers, and systems in place, you’ll drown in unfinished projects.
  

• Play to your strengths. If you’re great at raising money but not at construction, partner with an operator who loves that work.
  

• Pause when necessary. Sustainable growth beats reckless expansion.
  

• Pipeline discipline protects emotions. Don’t get overly attached to one deal—always have multiple opportunities in the pipeline.
  

Best Quotes from the Episode

• “As soon as you take investor money, the clock starts ticking. You owe them returns whether you’ve deployed the capital or not.” – Matt Semegran
  

• “Scaling too quickly without systems is like forcing too much water through a skinny pipe. The pipe will burst.” – Kent Fai He
  

• “Figure out what you’re good at and go find partners who are good at what you’re weak at.” – Matt Semegran
  

• “Every step of your journey matters. How you treat people and how you maintain your reputation determines your long-term success.” – Kent Fai He
  
  

Common Questions This Episode Answers

1. How do real estate funds make money in affordable housing?
Funds raise capital, acquire properties, renovate them, and generate returns through rental income and appreciation. Investors often receive preferred returns (8–12%) before profits are split.

2. Why is scaling too fast dangerous for property managers and developers?
Rapid acquisitions without enough contractors or systems lead to unfinished projects, tenant delays, and financial stress as investor returns accrue.

3. How can new investors avoid bad contractor experiences?
Work with experienced partners, check references, and build relationships with GCs who can manage subs. Don’t try to do everything yourself.

4. What’s the advantage of starting a fund instead of doing one-off deals?
Funds pool capital, making it easier to scale, diversify, and attract larger investors. But they also add legal complexity and regulatory compliance.

5. When should you stop buying properties and focus on operations?
If your pipeline of projects consistently falls behind, your team is burned out, and contractors can’t keep up, it’s time to pause growth.

Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments. His conversations with operators like Matt Semegran highlight the realities of scaling responsibly in today’s housing market.

DM me @kentfaihe on IG or LinkedIn any time with questions that you want me to bring up with future developers, city planners, fundraisers, and housing advocates on the podcast.