Year in Review: 2021

January 27, 2022
Isaac Waitman

Jeff Bezos, in his now-famous inaugural shareholder letter (1997), wrote of a “Day 1” mindset. There is a lot of wisdom in companies holding that perspective as they grow, but for Copium Investments, the “Day 1” mindset was a literal reality of this past year.

2021 was a year of many firsts. While the core of our business – buying and operating good real estate – has been around for a while, this year was our first time to buy, develop, and lease properties in the Treasure Valley, develop professional operations systems, raise outside capital, build a property management division, and more.

On top of this, we have met so many incredible people who have helped us get off the ground. For those who have partnered with us (in large or small ways) or who are watching from the sidelines, I would like to share the background of why we are doing this, starting with the high-level vision (Why Real Estate? Why Idaho?) and moving to specific projects. 

Why Real Estate?

Like many business ventures, this decision was influenced by both past experience and future expectations. Real estate has been good for us and we saw ways to do it better. More specifically, though, we chose this business because:

  • We knew it. We have more than 10 years of mistakes and successes to learn from. Thankfully, we had an opportunity to learn the business in one of the greatest bull markets in history. This provided an opportunity to start a business without many uncertainties that come with being a “startup”. 
  • Business risk is limited. I wrote more about this here, but real estate contains many of the positives of traditional private equity compared to liquid markets (control, value creation, outsized returns). It does this, however, with less business risk. Product-market fit is easier to judge, there are standard operating procedures, and there are steady, proven paths to increase profits over time.
  • It’s a long-term path. Your time preference has a huge impact on how you view investments. We want to build a business that spans multiple generations and to do that, you need a business that will still be relevant a century from now. People have always needed places to live and work, and they always will.
  • It has a tangible impact. If you’re planning on spending more than a few years of your life working on a single project, it’s important for that work to be rewarding. In this industry, you have opportunities to build tangible products that can have a positive impact on communities beyond your lifetime. In a world of increasing abstraction and fluctuating trends, this tie to immovable physical environments for multiple generations is motivating.

Why Idaho?

Idaho is the best state in the nation. Moving on.

In seriousness, though, Idaho is a leading representative of a broader class of states that we believe will continue to have strong population growth in the foreseeable future. The fundamental driver of this is the ability to choose where you live.

Why is this such an important factor? Population growth is one of the largest influences on real estate value. Today, migration is the main cause of population growth (the other is having lots of kids, and unfortunately, that’s becoming more and more irrelevant). Those who bought and built properties in the path of inbound migration over the years have had a strong foundation for successful investments.

Migration is not a novel phenomenon – our entire country is a byproduct of lots of people deciding they wanted to live somewhere different (European settlement, Immigration, Westward migration, etc.). What’s new is the ease with which people can pick up their lives and plant them in a new location. 

If you’ll allow a bit of a tangent, for most of history (before the invention of the rail & automobile), moving more than fifty miles was a commitment to uproot your family and livelihood and restart from scratch. For long-distance moves, like those of the initial settlers of the American Frontier, it was also a commitment to give up seeing your family and community (not to mention the high risk of losing your life on the journey). That dynamic changed with technology to travel long distances faster and easier. 

This new dynamic, brought about by the invention and distribution of trains and automobiles, drastically lowered the difficulty of migrating to a new place. You still had to get a new job and integrate into a new community, but you no longer had to risk life and limb to make the trip or say a permanent goodbye to friends and family staying behind. We saw this change exemplified in California’s record inbound migration during the 20th century. During this period, by the way, they led the nation in average home price appreciation by a wide margin.

The twenty-first century ushered in a “third wave” of migration ease that accelerated over the last two years in particular. The last major hurdle to migration – giving up one’s livelihood and community – has been eliminated for a large percentage of the population. Even proponents of office-based workforces (like myself) have to acknowledge that many companies can function with a distributed workforce with minimal loss to productivity. On top of this, the same communication technology that is powering productive remote teams has lowered much of the friction of keeping up with families and communities that are distributed across the globe. Whether it’s regular Facetime calls with loved ones or hanging out in social media with online-only communities, the friction of moving long distances continues to decrease.

So what does this have to do with investing in real estate in Idaho? The environment described above makes it easier to choose where you live, which means the best places to live will asymmetrically outperform other locations in population growth. This sounds like it would lead to a handful of cities dominating population growth, but it’s actually the opposite. This creates more distribution in population growth as the quality of “best place to live” can mean so many things to different people. 

The markets that will grow in this environment are the places that possess qualities that a large number of people find attractive. On top of this, these qualities will become more engrained in the identity of the population as more people move to that place because of those qualities.

The markets in Idaho (and neighboring states) offer a distinctive set of qualities that appeal to many people:

  • Mountains & Rivers (views, air quality, abundance of recreation opportunities)
  • Distribution of market sizes (small towns to larger cities)
  • Family-friendly (low crime, high percentage of children)
  • Strong economies
  • Conservative politics & business-friendly policies

Each of these items can be found in other places, but the combination in Idaho creates a distinctive, attractive product that we believe will continue to attract immigrants for many years to come.

Why Boise (Treasure Valley)?

This one is pretty simple. In the context of the regional evaluation above, the Treasure Valley checked the most boxes for our business and personal preferences:

  • Strong growth fundamentals
  • A large-enough economy to grow a business
  • A place our families wanted to live
  • A good HQ to access markets across the region

Why Our Strategy?

An investment strategy should answer three questions: 

  • Which assets? 
  • What price? 
  • When to trade?

A basic indexing strategy in the stock market, for example, would be purchasing market-index ETFs at market price and rebalancing every month.

For us, this translates to buying and developing real estate at a good value in growing markets and selling when it makes sense. I covered the location aspect of our strategy above (why we invest in Boise, ID). There are three other significant aspects of our strategy here – which assets to focus on, when to buy them, and when to sell them.

  • Buy real estate at a good value: I read somewhere (probably from Howard Marks) that there’s a price where any asset is a great investment. This stuck with me and is especially true in real estate – it’s an inefficient market and bargains still exist on a regular basis for those willing to hunt for them. Many books have been written on asset valuation, so I won’t go into the mechanics of discounting future cash flows here. For us, this translates to a simple rule of thumb of buying at a discount to the existing value (no banking on appreciation). The exact discount for a specific project ranges from 15%-30%, depending on the risk involved (e.g., development carries a higher risk premium than buying a currently cash-flowing property).
  • Don’t limit the asset class: the urge to specialize is good. Nobody can do everything, and in theory, the stronger the magnification on your scope, the more accurate your shot will be. For us, specialization happens at the market level; we are generalists in regard to asset classes (where firms typically focus). There are pros and cons to this approach, but we believe this setup puts us in the best position to consistently provide great returns. Check out this post for a more detailed explanation of our thinking on this front.
  • Sell when it makes sense: the more exit options you have on a deal, the lower your risk will be. When you add in the fact that every deal has unique benefits and risks that change with market fluctuations, it rarely makes sense to have a predetermined disposition commitment. This is not saying you should go into every deal with a flippant “maybe we sell tomorrow, maybe we hold forever” attitude – there should always be a determined “best case” plan. The “sell when it makes sense” mentality recognizes that sometimes plan B or plan C become better options as markets change.

Why these Projects?

In a market where many struggled with deal flow, we were blessed with some great opportunities to execute the strategy detailed above. At a high level, we raised $5mm in capital to purchase and/or develop $13.5mm worth of industrial, retail, and residential properties. Those projects were:

Ralstin Industrial
  • 21,000 sqft industrial/flex development in Meridian
  • This was our first development project in the area and the main property in our Opportunity Zone Fund. We were blessed to sign a lease on the entire space before we finished construction, accelerating our stabilization schedule.
Spyglass Ridge
  • 38-lot infill residential development in Nampa
  • This project tested our patience with multiple pivots required in the entitlement phase. Thanks to the record demand for housing, we were able to pre-sell lots before starting construction in 2022.
Bethel Court Industrial
  • 60,000 sqft industrial repositioning in Boise
  • The most complicated of the four projects, this was a former data center that the previous owners started to convert into a manufacturing facility. We took over after they finished a full demolition of the former facilities. While the moving parts presented a significant risk, we were able to negotiate a low enough purchase price to offset the additional cash and time needed to stabilize.
Bogart Plaza
  • 12,000 sqft retail/flex space in Boise
  • This property offered a creative covered-land play for both strong cash flow and future development. We were able to buy the entire property for a good value on the existing building (which had vacancy issues), but with the rapid changes going on in the area (5 class A apartment developments going up within 1 mile), we’ll have some long-term redevelopment options to increase the value of the property.

While this represents only a fraction of the activity in the Treasure Valley last year, we are grateful for the opportunity to establish a presence in the market and start to develop the network and processes we’ll need to grow in the coming years.

What’s Next?

2021 gave us a great foundation to build on. In 2022, we have two main focuses:

Improve our Product

Paul Graham once advised that “it’s better to have a product that 100 people love than 1,000 people like.” Measuring a “product that people love“ often feels like aiming at a moving goalpost. Despite the subjectivity, however, it’s a useful filter to decide where to invest time and effort in a business. We made progress on this front in 2021, but before we get serious about scale, it’s our main focus in 2022.

Grow our Treasure Valley Portfolio 

A rough estimate suggests that the total value of commercial real estate in the Treasure Valley would be around $40bn-$50bn. We’re nowhere close to being limited on growth in this area. One of the aspects of a great product (mentioned above) is deal flow, and improvements in this process should result in more great opportunities to add properties to the portfolio.

We’re focused on finding deals at good value across all asset classes. Two big ones that we did not get exposure to last year are office and multifamily, so we’re putting additional effort toward finding acquisition and/or development opportunities for these.


In closing, we were blessed with a fruitful year in 2021: starting a business, acquiring and building some great properties, meeting lots of fantastic people (in Boise and abroad), and building a foundation to grow on for many years to come. As Solomon taught, “The heart of man plans his way, but the Lord establishes his steps” (Prov. 16:9). We have a vision and plan accordingly, but know that the future holds plenty of surprises. We’re excited to be along for the ride.