Season 3 Episode 6 with returning guest Suzy Sevier a Syndicate Investor

S3EP6
We welcome back guest Suzy Sevier (first visit was Dec 23rd 2021 episode. She is an syndicate investor in the US and invests remote. Her real estate journey started when COVID hit and she had more free time than expected while living in the UK. 
When the entire world went virtual she knew she had a great opportunity with time on her side and an opportunity to learn a lot of new things. She left her W-2 project manager job to pursue real estate full time.
 
Have you heard of Syndicate investing? She discusses the differences of two types of syndicate investing.

Her first acquisition as lead sponsors was in February of 2021, it was a whopping 88 units.
This year her goal is $30 million of property acquisition and hopes to reach that within the next few months.

We also discuss what a "stable" property looks like.
Is it the net cashflow? Is that max occupancy? Is that a completely renovated property?

Welcome back and enjoy the episode!

Links to find Suzy and her socials below:

https://adventurousrei.com/
https://www.instagram.com/adventurous...
https://www.facebook.com/adventurousREI
https://www.linkedin.com/company/adve...
https://podcasts.apple.com/us/podcast...
https://open.spotify.com/show/3nelsdy...
   / @adventurousrei  

Transcript

0:01
foreign [Music] welcome back to this season three
0:08
episode six yes uh with Susie Sevier
0:13
I nailed it you nailed it time for test would recommend she is she has moved
0:19
from England to uh Dayton Ohio so welcome back to the show
0:25
um and thanks for giving us the time I appreciate it yeah I'm super excited round twos are always fun so this will be a blast yes definitely and then can
0:32
you we always start the show the same way can you give us a background of uh what you do and then what led you to be
0:39
where you're at today totally um Diamond multi-family and short-term rental owner
0:46
and operator in Oklahoma and Texas and what led me to this today was actually
0:52
covid awesome the positive of coveted
0:59
which is uh few and far between I guess but I'm glad that it took some positive
1:05
twists for you and some spin in your life so kobit actually was the Catalyst
1:11
to you moving to the states so or investing investing okay yeah
1:18
so what were you doing before covid okay so before covid um so I was living in Cambridge England
1:24
with my husband and there for that particular Duty station because
1:30
he's active duty Air Force I was a project manager for um
1:35
purchase a global company that was local to Cambridge but then before that move I
1:41
was in the world of accounting and as many of you will know by the end of the episode I was not meant for a cubicle so
1:47
I just needed something different yeah but the accounting background I'm sure
1:53
helps you with real estate investing because it's a lot of numbers and it sounds like you are a long
1:58
distance investor which is even more important about numbers totally um I think that was a good mix of it too
2:05
but actually now that I've you know kind of got like a I don't know a whole view
2:11
perspective of who I am as a human um so I like for my undergrad I actually
2:18
like my main major was anthropology and it was because I loved humans so then
2:24
like getting into the apartment space made me realize like wow it's all
2:29
connecting now you know like because in anthropology like all you do is learn about humans and that's all I'm trying
2:34
to do now right like whether it's the residents or vendors whoever like when you really have a curiosity for people
2:42
I think that helps way more sometimes than my accounting background yeah absolutely absolutely I know that I my
2:50
undergrad one of my degrees was psychology and I don't use psychology direct but I use psychology every day
2:56
because you you dream with people so totally it is it's definitely a factor
3:02
that that you need and it's not gonna elude you even if you are a long-term investor like you
3:08
so how did you were you're doing the accounting thing you're dominating the world of
3:14
accounting and covet hits and you're like I'm just going to invest in real estate or what was what was your
3:21
influence into getting into that totally so I hope it had when we were in the UK
3:27
I mean just how the world works right like the United Kingdom was like oh is this real is this not real we hear about
3:34
it in Seattle we hear about it in China is it gonna make it here well yeah okay it made it there so we were a little
3:40
behind but once um Boris Johnson decided that we were officially a country that had Kobe he
3:47
actually shut everything down so people were not allowed to go to work we were allowed to leave our house once a day to
3:52
exercise and go to the pharmacy or the grocery store so when you are put in a
3:57
situation where you are in a tiny flat with your husband you're like okay what
4:03
are we gonna do for the foreseeable future um because he does what or he did wet
4:08
lab research and so it's not like he could bring any of his work home I don't want any of that bacteria at our house
4:14
so with that we were like okay we're gonna start a mini book club so the first book was the slight Edge and in
4:20
the back my husband was like I want all the other books this was life-changing I'm like okay let's go and one of those
4:26
was multiple streams of income by Robert Allen so in that book the whole second section is real estate investing he's
4:33
like read this now we're not going to talk about the first half because it doesn't matter anymore the book club starts a part two like cool we can do
4:40
this and so from there we did what you know any
4:45
person in their 30s does I guess maybe not all of us but a lot of us we Google and from that we found Bigger Pockets
4:51
and from Bigger Pockets we found from military to millionaire and that was more comfort for Michael Wright being
4:58
active duty and so that rabbit hole spiraled to a Facebook group and all we
5:05
had to ask was is anybody investing in the U.S while you know being stationed
5:10
overseas and one person said yes and we were like wow we can make this work and
5:18
so we set up a call with him we thought we were going to die that day we were like oh my gosh like can we do this are
5:24
we worthy of this what's going to happen right now so after we had the call we were like okay we got this
5:29
um and from that call he was like you should go to a conference this weekend it's all military folks or mostly
5:35
military folks um you should give it a shot and we were like is this what we do like do we already
5:41
jump in you know we've only known about this for like a good four days do we give it a shot and luckily
5:47
I found the conference and they were like hey you can win a free VIP ticket if you post on Facebook and I did and I
5:53
won it so I was like it's meant yeah it is meant to be so like from there and I
5:59
will jump a little quicker but from there the VIP included breakouts with
6:05
every single speaker and that's like the biggest part of this story is that we had a breakout with a multi-family
6:11
operator Whitney Sewell sorry if I said his last name incorrectly and he was like you don't need to start with single
6:17
family you can go straight into multi-family and we're like you are crazy so we thought that we were gonna
6:24
go like the Burr route so buy rehab rent refinance repeat in a town I grew up in
6:32
in Iowa but an inland hurricane went through and with this inland hurricane instead of panicking we just pivoted
6:37
because we could not we weren't going to look for Investments there anymore because the city was really focusing on rebuilding the city
6:44
um and so then Whitney's voice came back in our head and was like hey you can go straight into multi-family
6:50
um and so then what we knew we were missing was a boots on the ground so again Facebook came into play made a
6:57
Facebook post talking about real estate investing and one of Michael's old classmates from the Air Force Academy
7:02
was like hey I'm in Oklahoma City and I'm not in the Air Force anymore I'm a wholesale nerve flipper but I'd love to
7:08
be in multi-family we were like bam boots on the ground so then we decided we wanted to invest in Tulsa and from
7:15
there I was like I swear I'm almost done but I think it's a good story you're all good yeah we told everyone
7:22
Tulsa tulso Tulsa Tulsa right because nobody can really help you until you
7:27
actually give them criteria and also being far far away we knew that we needed a property manager so like that
7:34
then dictated the size that we were going after so once we started telling everyone that someone was like Hey you
7:40
know at first we were kind of spooked out by you guys living in Cambridge um but you showed up to enough meetups and
7:47
conferences virtually that I think I can introduce you to someone you know we don't think you're this weird red flag anymore really perfect and then that's
7:54
how we got our or introduced to our organic Mentor so this individual
7:59
was going after much larger deals like we didn't even have the capacity for them he's like hey if you actually show
8:07
up and show me that you're putting in the work then I will help you and so he helped us like perfect our underwriting
8:13
he would give us like little hints along the way of like okay you've reached out to you know this many PMS try this one
8:20
or you know why don't you tweak this number and this is why like he helped us a lot and so then
8:27
from meeting him um I'm gonna have to say so like we
8:32
started right everything in like april-ish move to multi-family in July probably met him in August and then our
8:38
first Loi was accepted in November or December and then we closed on our first
8:44
multi-family right the following February and that was 88 units wow wow
8:49
and then that's the story and I know that the world because the
8:56
first thing that I jumped on was bigger pockets as well when I was working with Dan we were in outside sales and I was
9:01
podcasting everywhere I drove yeah and the same thing they kept saying is you don't have to start with single family
9:07
you can go up to a four Plex multi-family it's the same the same
9:12
things you're gonna do obviously more capitals involved but yeah if you're doing maintenance on one
9:18
unit you have a whole building all of your units are in one place rather than driving to five different places so like
9:25
a lot of the things they said made sense but still in the beginning I was like that's a big thing to bite off
9:32
um you have to juggle that's right like
9:41
you have to make a website because or else anyone who wants to invest with us won't think we're credible so while
9:47
we're building this website we have to create content and then we have to have you know investor calls because you have
9:52
to have these calls before you even have a deal and somehow you have to convince people that you can manage a deal like no you've never had a deal yeah so it's
9:58
like this crazy um tornado all at the same time but then once you get your first deal I swear
10:06
everything is so much easier yeah it's it's a like a breath of fresh
10:11
air once the first one is done yeah and then everything seems a little less hectic a little less scary I'll say
10:17
totally from that one yeah or did you find that first deal I apologize if you
10:23
said it in the little background yeah I didn't say it so that's okay so it was through broker relationships
10:29
um what we did was that we asked um Brokers to go to Virtual coffee and by
10:35
that I would send them a gift card to the um nearest coffee shop that was closest to
10:40
their office so that we like stood out uh because you know when
10:47
when you only reach out to Brokers when deals are hot like that's that's the
10:53
worst time to do it like you need to reach out to Brokers all of the time um but what helped us was that our organic
11:00
Mentor gave us the credibility to that individual broker who brought people
11:06
home yeah and did you find the broker on Bigger Pockets as well or was he off off
11:12
the platform no I just did um which was super cool and I was gonna
11:18
comment on that going from the accounting world having no connections into real estate yeah you Googled which
11:24
research would be free the only thing that I guess in your whole startup that costed money would be a travel to that
11:31
convention and then maybe well the tickets were free that was virtual so all of your learning was free yeah
11:38
which is amazing because a lot of people's barrier to entry is like I don't have the money but like you don't
11:43
need the money to analyze deals and get all the education that's just motivation like do you want to do it yeah because
11:50
like every day right like we saw Florida freak out we saw Texas freak out I mean
11:55
actually New York and California really it depends who the person was they all freaked out but on every Spectrum so we
12:00
were like okay we have no clue how the us is going to react to everyone having
12:06
to stay home so we have to act like every day is our last day of being virtual so like we went to meetups at
12:13
one in the morning we would stay up for conferences you know until midnight just so that we could see the final speaker
12:18
because well one we're not humans who watch the recordings I really tried to be that person and I was like no so like
12:26
being there made it much easier but that meant like staying up and putting in
12:31
horrendous hours for a really long time yeah
12:36
and that's the first thing that Bigger Pockets puts in their intro is like if you're looking for something easy this
12:42
is not it it's hard work it's it's weird hours so you just have to embrace that and it
12:48
sounds like you did it so yeah I mean it was like no choice right especially well that's how we thought of it like it was
12:54
no choice if we wanted to put me into the position where like
13:00
because as a military spouse you you know getting a new job every time you move um is actually not super exciting
13:07
yeah for a variety of reasons so that was one but then the second one was it's like okay well I don't want Michael to
13:14
stay in the military after 20 years and he'll technically by the time he can retire being for 24. it's still like a
13:20
substantial amount of time so like how can we get him out of that and so those
13:27
two factors were enough drive for us to like I don't know high five each other
13:33
at like midnight and like maybe do this more coffee keep the caffeine flowing totally
13:41
uh can we go over numbers of that first multi-family and they don't they don't be specific
13:48
numbers by any means but like how did you like okay so you reach out to the
13:54
broker he says hey I've got this multi-family it's what how many doors was it 88 88 doors and you after you get
14:03
your breath back of like okay this is an insane amount of doors for my first deal
14:09
you sit down you go over numbers so where did you guys look for Capital
14:14
so you don't need to give institutional names just is it is it funded was it cash like that kind of thing it was a
14:22
syndication so we just brought people on so um our boots on the ground he helped
14:28
bring some Capital um we brought on another partner who helps with Asset Management he brought
14:34
some Capital so like there's two capital I won't speak on because I'm not actually 100 sure I mean I could like
14:41
look back through the PPM and they'd say like oh we met in college but hours were
14:46
pretty much all people we had met virtually because investors also need to
14:52
invest in deals right I mean or at least they should well that's a
14:57
whole number topic I could talk about for like four hours but yeah so it was all people that we had met because my
15:04
friends and family were like Susie I remember you in college I'm not there yet I was like okay we'll get there
15:11
eventually and with Michael same thing Michael I remember you at College
15:17
we're not there yet I mean some of Michael's friends from the military did but they were actually all brand new
15:22
investors um so we were excited like the whole deal was 4.375 million and we brought in
15:29
about like 1.7 million dollars for the three of us and it was all our first time raising so that was cool yeah
15:36
that's awesome in syndications are all like they're very very common so that's
15:41
super cool that you were able to jump into that right away because I think people get scared of like well I don't
15:46
have any money it's like but like what you said is investors want to place money and they're looking for people
15:52
that want to do either the other legs either they're the the Manpower the
15:58
boots on the ground like you're saying yeah and even to add to that right because people
16:04
have also said that to me like oh I don't have any money like you must have had money and I'm like oh this is fun
16:12
because we had to you know because like at the beginning you pay like SEC
16:18
attorney fees um attorney fees in general the application fee for the loan there's a lot of stuff and now a lot of that went
16:24
on a credit card and you know you just have to hope for the best
16:31
and put in the work I was like there's a mix of you know things that work yeah yeah but there is I mean when I started
16:38
it was like bare minimum on the personal side and all of my money was going into
16:44
properties and it was stressful and it wasn't the Glamorous Life but it it makes ends meet yeah
16:51
so there's some concessions but it all works out and so after your first deal has that now rolled into multiple other
16:59
deals with those investors as well like you know that you built up those relationships totally so so we had
17:07
um this like this 88 unit in February of 21 then we had a hundred unit in July of
17:13
21 then we had um our short-term rental portfolio in
17:19
there that was eight in I think like August then 191 units in October and
17:26
then I was like I I swear I don't have them anymore then right fast forward then July 2022 and then now we have two
17:33
more projects under contract and that July one was 106. wow that's awesome
17:40
so it's all in that same area or have you now Diversified into the you like wherever I love I'm number one for
17:48
Oklahoma so that's awesome so most of them are in Tulsa or the Tulsa MSA and then we have two in like that 191 is a
17:56
portfolio of two that's in Oklahoma City but once we sell that we will just stay
18:01
in Tulsa because it just you know actually this is like a good thing to
18:08
talk about right now I hope so like with this lull period that we had right because like interest rates
18:14
went up but prices weren't stabilizing and all this stuff so I had like a minor
18:19
like Crisis I was like oh my gosh what do I do right now granted my to-do list is like 100 deep still but like do I
18:26
look into you know medium-term rentals do I look into multi-killing now that we're in Ohio but do you start over a
18:34
whole new business and then like I don't know what it was because I don't even have that much quiet time even though I
18:39
like crave it I was like why why do I need so much more when I can just be
18:46
patient with what's there right because if I were to build something new because we never know when any of the properties
18:53
are going to start like ramping up again even though I think it is in the near future but like building a business
18:59
takes a lot it doesn't matter if you've already done multi-family like starting somewhere new like you still have to
19:05
meet all of the vendors all over again you have to vet them all over again so it's like do did I want to spend that
19:11
time rebuilding all these things somewhere else or do I wait and like
19:17
keep underwriting in Tulsa and show the Brokers and everyone else that like I'm still committed to Tulsa and so that is
19:23
the route we chose to take awesome interesting it's a nice area
19:29
and I is Tulsa more obviously you looked at the numbers of the actual like homes
19:35
and residents there yeah is it a is that like a big touristy or Transit
19:40
area that's a great question um so the Kaiser family of the Kaiser
19:46
Foundation lives in Tulsa so because of that
19:51
that family has put in a ton of money so they like created
19:57
um I guess this park I don't know how big it is but it's called The Gathering Place and it's meant for families it's
20:03
meant for kids like it is a massive park now I want to find it because it does
20:09
um so 66.5 Acres which is pretty large but like they have stuff for all ages
20:15
and they even have like basketball courts a skate park and everything so they really hit the ages of all kids which draws in family they also did a
20:22
program called Tulsa remote and they maxed out on applications so Tulsa
20:28
remote was that if you moved to Tulsa we will give you a ten thousand dollar stipend if you work remotely like that
20:35
blew up so a lot of people moved there for that and now I did not hear about that that's cool yeah which is fine
20:42
because then less people look at Tulsa like there's just a variety of
20:49
um I guess choices like for example for employers is what I meant choices for
20:54
employers so the largest Inland port in the whole United States of America is 15
21:02
minutes out of Tulsa so it's the only Inland waterway that can make it all the way to China that in itself like creates
21:10
so much jobs creates so many you know Goods resources helps the economy like I'm just massively blown away I was like
21:17
I could keep going so Google's second data wait wow hold on Google's second largest
21:24
data center I was like I can do this is also in the Tulsa MSA so like when you
21:29
see companies like that coming in it's because one the they know the economy is
21:36
thriving or is growing and two because the cost of business is cheap so when
21:43
the cost of business is cheap usually the cost of living is cheap and we're seeing people move in from everywhere
21:48
now granted it's still not on people's radar right because it's Oklahoma but
21:54
I'm here all day to invest oh
21:59
and we won't push people to Tulsa we'll keep it for you good choice thank you
22:05
area because you'll find those hot areas that the real estate is just going crazy and I'll be honest Tulsa never came up
22:12
on what I've been reading so I will try to keep that on the hush for you but so a big reason
22:19
um I believe right is because when you look at the crime it is
22:26
higher than like Neil bawa's chart of like this is what you shouldn't go after
22:32
the thing is is that like like any City actually there are
22:38
sub-pockets right of like bad crime or bad neighborhoods but
22:43
um that's everywhere and most of us just choose not to invest in those certain
22:49
Pockets you know and so like obviously to everyone like to each their
22:55
own but um I kind of looked deeper into Tulsa instead of just looking at it like
23:00
you know from that lens and being like oh I can't because like when I drove around there because like I've spent a
23:06
lot of time there now like you can see a huge divide between North Tulsa and South Tulsa but the thing is is that
23:12
like in some of those Pockets there are great like dispositions where like you
23:18
can find properties you know that need a complete Remodel and people go after those so it all just depends right like
23:23
once you decide you are 100 what your criteria is that is really what should
23:29
dictate it all yeah absolutely and it sounds like you were narrowed down in your criteria
23:35
and did you get did you base your criteria from what you learned at the at
23:40
the forums or the conferences or the forums on Bigger Pockets or did your syndication Partners come in with some
23:47
background because you said they were first time as well so was it the accounting background like how did you
23:53
formulate your numbers get everybody on the same page like Hey we're gonna go after this property with this uh noi
24:02
like how did you guys Cipher through all of the numbers to figure out like all right this is what we're going for yeah
24:09
that's a great question so I think it actually started once we
24:15
chose our property manager because right like you choose where you're going
24:21
to invest and then you kind of look at the sub markets to figure out like what works and what doesn't work but like we
24:27
see our property manager as like literally a huge part of our team so if
24:34
she doesn't want to manage a property then we just pass on it right because so there's a couple reasons to go into that
24:40
the first one is that if the property manager is stressed out like to that extreme or you know isn't comfortable
24:48
that goes on to the owners because we have weekly calls with them and like she's like if it goes on to the owners
24:54
then it goes on to me so like why put myself in that position and she's also said like I can pick and choose or I
25:00
want to pick and choose because of that so like she doesn't have to say yes to everything but we also knew we needed
25:06
somebody on site nine to five so we had to find a property that supported
25:13
a manager being there from nine to five so that's kind of how we were able to
25:18
choose like okay 88 units is kind of like the lowest we want to go and then you can kind of go to like 150 with like
25:25
one manager and then 150 you know to like 250 maybe two managers or leasing agent whatever that may be but that was
25:32
actually the first component of we need her but then from there like the price just kind
25:40
of went along with it right so like we knew we needed to stay lower around 100 because we knew that we had to somehow
25:46
figure out how to raise 1.7 or two and a half million dollars so we weren't going
25:52
to like it was a lot of self-reflection actually right like okay from the investors that we have on the list if we
25:58
once we send out a survey because we sent out a survey twice a year just to see where people are at
26:05
investing-wise and a lot can change in six months I mean granted a lot can change in one day but it was like okay you know if we're getting feedback that
26:13
you know we have 750 000 that people kind of want to deploy soon then we can
26:19
build our team from there but after because you never know you don't know what you don't know so then after
26:25
our first deal it just went to like really asking better questions asking better questions
26:31
to the partners we were going to bring on like because we also know how much they can raise oh a second part actually
26:37
this just sprung to my head yeah it's like net worth and liquidity so that's a huge part with any part of your loan so
26:43
that's also how we dictated the size of deals so like for the first one right okay well we have to have collectively a
26:50
net worth of 4.375 million dollars who's gonna help us get there you know but you
26:55
also can't have a massive team because then everyone I don't know thinks you're crazy or a scam I haven't dug too deep
27:01
into that because I'm like whatever yeah but then that is a big reason right
27:07
that's that's how you also figure out what numbers you're going to do so it's not just like oh I think
27:13
or I know this many people who probably want to invest it's like no no no like you really have to do a lot of research
27:20
to figure out like what your numbers are um and then another big thing is that
27:27
like right when and this is just after your first one right because we didn't know um like right after the PSA is signed is
27:34
like getting a bunch of vendors out immediately to give you bids so that you can finalize underwriting because that
27:41
really helps you dictate how much you actually have to raise um you know like asking another operator
27:47
in a different area does not work because an example of that is that Oklahoma
27:53
and before this time of insurance rates because right now insurance is crazy everywhere but Oklahoma was always
27:59
always always much higher than other states right so like somebody from Texas brought us a deal
28:06
and we're like well that that there's no in the nicest way right we're like there's no way that works like your insurance is crazy low and they're like
28:13
oh I didn't realize insurance was so high in Oklahoma right that's just like you can't ask people in your area you
28:20
have to like or in other areas you have to ask people in your area to figure really figure out what your numbers are
28:26
but like I said it's a lot of self-reflection because that's hard to do you know people want don't want to think to themselves like oh
28:32
I'm not ready for this because all we hear on social media is like you can do it I'm like okay
28:38
let's think about it a little bit yeah the hura chants on social media
28:43
which I'm sure at the convention you got enough of as well although it was virtual so you didn't get the full
28:49
impact of it I mean still though the chats I was just like okay yep I'll just a lot of the fireworks and
28:58
yeah totally It's Real uh you had mentioned a
29:04
couple times like you don't know until you know yeah what were some of the things going into your first that stick
29:11
out to you as like the biggest I don't know because I think a lot of people fear
29:17
either getting to the next level in Real Estate or learning something new because they're going to run into something they
29:22
don't know and they're going to look dumb but every step of the way that I go I look dumb because I don't know what I'm
29:29
doing I've never done it before yeah and I've never had a class of how to buy a 100 unit apartment complex so yes I'm
29:35
learning so what were some of the things as you went through and did that that stick out as like I didn't know that
29:42
that was a huge eye-opening moment but it wasn't like the deal killer
29:57
the lender for example nobody told us the enormous and I didn't need anyone to
30:04
tell me this but like nobody even warned us that the the lender needs to be able to access you pretty much 24 7 and you
30:11
will have paperwork on top of paperwork on top of paperwork on top of paperwork and lawyer calls and more paperwork and
30:18
another lawyer call and more paperwork like we just did not expect that at all right it's more like nobody talks about
30:25
the juggle everybody says I mean I even said it at the beginning right like oh everything's easy after your first deal well it's still hard but it gets easier
30:32
like because you you kind of have a sense of what to prepared but like
30:39
everything that the lender needed that was a bit
30:44
um challenging just because we were like wow did not account and especially being
30:50
overseas right like we did not ever think that like we were gonna have to stay up because the
30:55
lawyers were in California so that was an eight hour difference so like if they
31:01
worked till six they expected to be able to get a hold of us until two and I was like and this is where I died you know
31:08
so actually I think that was actually the only one that really stands out I mean there are things that
31:16
now stand out like that the seller did um
31:22
that I don't necessarily need to get into but like now looking back on it I was like you know I think that might
31:28
have been a red flag I don't think I'll do that again um but yeah nobody talks
31:33
about like all the juicy stuff but so what we did afterwards is that we actually went
31:40
through all like 800 million emails and
31:45
we made like a 215 Point checklist of like okay this is what we need to do for
31:52
the next deal and yeah we're finding your process right like yeah what works
31:58
what doesn't what to avoid or what you don't have to focus on yeah totally um because that was
32:04
that was like a game changer because like then it frees up so much brain space for the next one you know because
32:10
all we do now is like go into a sauna and we're like okay we can check that off
32:17
I have a big one actually yeah so the day of closing the um lawyers associate
32:25
sent as paperwork that we had to go get notarized and then send back overnight what none of us failed to notice is that
32:32
she sent or he because I don't remember and I kind of feel bad that I said she at first but um there was only one
32:39
um tracking like code so after the first person
32:46
um sent it in the rest of them scanned but they didn't actually go anywhere so when they're like where's the
32:53
paperwork I'm like I don't know like we all sent it in you know this is all our tracking code and then I was like oh my
32:59
gosh we all have the same tracking because we only had one thing
33:05
so like little things like that right that might not happen for everyone but it's not something you'd ever think about looking for so that was that was
33:12
our eventful firework ending oh man that's like the last moment too
33:19
when you don't want things to go wrong totally the closing table yeah
33:24
oh that's got to be nerve-wracking but it all worked out it did thankfully so that's perfect
33:31
um you had mentioned something earlier through the whole um
33:37
underwriting process and you talked about the lending in like it was paperwork and phone calls and paperwork
33:42
and phone calls and you said like that is a tough process and I will agree the
33:48
first time getting lending sucks it's so much like I I would get an email and I'm
33:54
like I don't even know how I'm gonna find that number for this person like I they're asking for a number that I'm not
33:59
tracking on because no normal person tracks on that number yeah so you have to go try and find that number give them
34:05
validation that it's right the nice thing is the next time you do that you've already rounded up your
34:11
information so you have that info and it gets easier the process is still like a little unsettling still unsure because
34:18
now it's only my second time doing it but at least I didn't have to go back and find
34:23
the information at least it's like nicely neatly organized for next time yeah and like something uh this is just
34:31
a story but like the um lender's attorney
34:37
was like you're you know not doing whatever right and I'm like okay well
34:42
I've sent it to you three times I'm just gonna call you you know like I'm thinking this in my head call her
34:48
she's like well I can't talk to you without your letter on the phone I'm like do you know how long I've been trying to
34:53
get hold of my head or my attorney today I can't get a hold of my attorney I just need to know how to fix this because this paperwork needs to be done you know
35:00
yeah and it's like little things like that you don't ever you don't think about because like
35:06
the lender's attorney can't give me legal advice you know like and so it's
35:11
like crazy even though everyone's on the same team we all have different goals on the same team like our goal is to finish
35:18
but in between there someone's taking shortcuts someone took the long way and somebody definitely went over the rocks and sprained their ankles pissed off so
35:26
it's like a NFL roster like you each have your own coordinators that you got to listen to and at the end of it you're
35:32
supposed to win the game and hopefully everybody's on their own path and they have their plan that's supposed to work
35:39
and at the end it's like okay did we all do our parts and we're sitting at the closing table kind of nervous that like
35:45
I hope the offense did what they were supposed to do and I hope the defense did what they were supposed to do
35:50
and then special teams we have no idea they're just over there doing something
35:55
like yeah it gets nerve-wracking yeah
36:02
so uh like what's on the horizon are you guys in the works for the next
36:07
next big thing yeah so
36:17
no it's okay so Horizon um I have two deals at a contract pretty
36:23
sure I can say that so our goal for the year is to acquire 30 million dollars of real estate this year but you know
36:30
depending on the state you know in Arizona that could literally be a Shack in Oklahoma that's you know a
36:37
substantial amount of units and so um with that though and this is what I really want to say is
36:45
that like we chose our number just based on the volume that we thought we could
36:52
do not what anyone else was doing right because there's so many people
36:57
um like comparison and like my huge thing is like comparison is the thief of Joy because it is so like it doesn't
37:03
matter what size people are going after I got into this business one for time
37:09
Freedom actually that's the biggest one right like in Geographic freedom because Michael and I love to travel
37:15
and so I want to be able to do this from anywhere in the world and I want to just be able to do it whenever I want so if I
37:22
take down you know 10 actually I'll just say five because 10 feels like a lot to say five deals a year and if I do that
37:29
you know three years in a row I have 30 plus hours of phone calls every week
37:37
you know just trying to with the property manager then talking to the property manager on the side about our
37:43
business plan and then calling a vendor and then doing all these things right because like I don't just rely on my
37:50
property manager to do everything for me I have gotten so much further like
37:56
meeting up with the carpet you know the flooring guy and meeting with the roofing guy because now when I call them
38:04
like I've met them in person I've taken them out to lunch I just you know ask about I will talk to them about the
38:09
military because some of these older men really love talking about the military and like you know I don't know anything about it but I'll I can I can have this
38:16
conversation with you so like it's not just having that Weekly Asset Management call and disappearing like that's not it
38:23
at all so like to now bring It full circle because I I talk a lot I hope that's good though
38:29
yeah um we want to know yes but it really it
38:35
really is like we want 30 million dollars a year 38 million dollars of acquired real estate this year
38:42
I am 99.9 sure we'll have that you know by May and but that does not mean that
38:50
like from May to December I'm going to go wild right like okay you know I'm
38:56
pretty much to my goal but now what do I do because I still have to asset manage and stabilize a property two properties
39:03
now for six months so if more deals come that is great I will look at them but
39:08
I'm not gonna like grab everything in my sphere just because it's bare like the
39:13
property really has to make sense because one acquiring a property is a lot of work like that I think acquiring
39:21
the property is one of the most stressful parts so once your property is stabilized it is actually like a dream
39:28
come true calls are super easy when a property is in like Mayhem I feel like
39:36
I'm in acquisition mode again like I have to be calling people all the time I have to be figuring out vendors I have
39:41
to figure out all these Solutions is so and I don't know if that's ever gonna happen right like we have all of these
39:47
performas and what we think will occur but like for example on the 88 unit we had a fire last year and a whole entire
39:53
building burned down and so I didn't think that was gonna happen but that did not mean but that's like
39:59
now a whole new project right I I have now 64 units that I still have to run
40:04
and I'm now somehow in the development business I'm like this is crazy so like
40:10
if I were to you know be like okay well I hit my goal in May why don't I just do that again I could put myself in like
40:16
this horrible position and yes you know Grant Cardone says 10x and I like green Cardone but like I also
40:24
1 to 10x like my life you know like I want to be able to like go outside for
40:31
an hour because I like made the time to do that like I didn't you know I wasn't
40:36
born or my purpose I don't think to say it's you know in this this little gray
40:42
area like I want to be able to have the time freedom to be able to do the things
40:47
I want to do still like the money will come and everything will work out but
40:53
like going and going and going and going and going and going and going history has already showed us that that doesn't
40:59
work a lot of the time like you have to figure out what your going is not what other people's going is yeah
41:07
and that's a big thing and that it's hard for an investor because you start your own business and all you want to do is take care of it
41:13
uh and you got to find the balance eventually in that when you were talking about was when your properties are
41:19
stable which can you in your your definition yeah for you and your company
41:24
what is a stable property um so to me a stable I I was like I can
41:33
I don't know how because it's it's such a big like everybody has a different definition of it in some people like on
41:39
Bigger Pockets this is one of the ones that I heard early on where somebody bought a property in I don't know I'm
41:45
gonna call it Houston sorry Houston it probably wasn't Houston but he bought a 24 unit and it was a C-Class property
41:53
that crime was going through it rent wasn't being paid they lied on some of
41:59
their documents so what he was actually cash flowing was not what was on paper which you go in your due diligence and
42:05
you learn that for next time but he's sitting in it he already bought it so for him to stabilize the property he
42:12
sent out a notice he raised everybody's rent like 300 he knew that he wasn't going to get people to re-up so he's
42:19
going to lose some customers so now he went down to a 50 occupancy he was still having crime problems so he put a like a
42:28
uh a pass lock to his front gate to get into the building and then he hired us a
42:34
security guard or a team so they would monitor for one year full time 24 hours
42:40
a day they always had an officer in the building I think his occupancy went down to like 30 percent
42:46
but because he went down and he cleared out we'll call it riffraff people
42:52
started to come back pay the rents he bumped it up to a B plus ish property and then sold it yeah and he made like
43:00
all the money he wanted to make on it but he went through about two years of trying to get that thing stable and
43:07
operating like it's supposed to operate like going through contracts of garbage going through contract of cable like
43:15
cable providers all of those ancillary things he had to go through and that's on either you or your property manager
43:22
to figure out what the best course is so that's kind of like stabilizing for that
43:27
person so it doesn't look like you're into crime ridden properties so that's
43:32
why I asked like what is staple it could be anything yeah so stable to me
43:38
um is actually when the numbers and this is like a little give and take are in
43:44
line with a performer so like okay okay we thought this is what the expenses
43:49
would be we thought that income would be this right that to me feels stable where if the expenses are way too high I don't
43:56
feel stable I don't care if the property is at 90 like your noi is ruined right or like if my cash flows low that
44:03
doesn't feel stable because again it all has to do with the noi so like if my noi is kind of in line with what I thought
44:08
it was that is stable to me most the time that means your occupancy you know
44:13
is somewhere in the 90s um but I guess really for me it's like
44:19
low stress is stabilized and my bar could be
44:24
very high for myself because I don't want stress properties so I do put a lot of work in them into the beginning but I
44:31
guess that's how I would Define that yeah and that's a good way to look at it because your tenants don't want stressful either yeah like they just
44:37
want to be able to have their space and go home and relax yeah because
44:43
expenses are high where then you end
44:48
too that deferred maintenance that you really need so that your residents feel like it's a home they can go home to so
44:54
that's like a big thing we work on like our whole thing is we focus on a different Roi return on impact because
45:00
we want the residents to feel like they actually want to come home so like I've
45:05
only ever rented I've never owned a home it's like I know that feeling like I
45:10
don't want to have work orders out for months and months and months because that's not fair you know but that can
45:16
happen when your expenses are too high and your cash flow is too low yeah are there some things that you you do to
45:23
your buildings to reinvest and do those like nice to have things like oh in in
45:30
this area we're starting to see like um clubhouses within apartment complexes
45:36
whether they have like a pool a fitness center a golf simulator like outdoor they'll have a play area like are you
45:43
reinvesting in your buildings with those type of like amenities so yes ish so like a lot of our
45:51
properties have a clubhouse So within the clubhouse though we add a business center in a coffee bar because that like
45:58
people will come in and if people come in and they talk to the property manager and you create a better relationship there yeah a lot of our properties have
46:05
pools all of our properties have a playground I feel like that's a non-negotiable like because I know at
46:10
least one person has a child um we also add dog waste stations
46:15
everywhere we have an excessive amount because I actually don't like picking up poop and I've done it before and I'm like stop
46:21
stop um but a big thing we do is in unit washer and dryer so we
46:27
install the connections and we install the actual um washer and dryer that has been huge
46:34
and then when it comes time in each unit you're saying um so not in all of them just because when we
46:40
go to sell we want the next person to have like meat on the bone but we do do it in a lot of them okay and then one
46:49
other thing that we do which I think is pretty big is that when it comes to renewals unfortunately there is a rent
46:55
increase right it doesn't matter it's Class A or class D there has to be a rent increase
47:00
um especially with utilities costs Rising now like insurance is Buck Wild
47:06
and just everything actually costs way more right like raw goods and materials so we give the resident three choices so
47:13
like if you want to have a bump up of this amount you can choose from these upgrades if you want to bump up this
47:20
amount you can choose from these three upgrades and if you bump into this amount which is usually Market rent you
47:25
can have you can pick from these better amenities so then one we feel like we're giving them
47:32
decisions which we are giving them decisions but they are actively involved in their apartment and they do they
47:38
actually treat it like a home because they got to pick yeah and it takes a little more options is huge and it seems
47:44
small but even if you listen to Bigger Pockets I know you'd mentioned it they talk about that on the offer stage too
47:50
you can give two offers on a building so two different terms yeah it makes a big
47:55
difference that was like eye-opening to me I was like I didn't even know I could put an offer in on a place like that and
48:01
you're saying I could offer three different things that was super cool yeah
48:07
so in Oklahoma a big thing that you can do is like an entity purchase so instead of buying property you buy The Entity so
48:13
like we do like an offer with like um an entity purchase we do an offer with seller financing and we do an offer
48:20
at what where the noi actually is so like okay where the no I is at and
48:26
incorporating like debt service coverage ratio this is all that we can offer you because we have to get some leverage
48:33
from the bank yeah so that's how we do it that's cool where
48:39
did you get the tactic on that was that Bigger Pockets or was that your mentor um or just creativity
48:45
I think it was a mix of all of it right um
48:50
we because you don't ever hear people doing it and I think one person just finally
48:56
said like why don't you put in that offer too maybe like a broker and I was like oh okay I'll I'm gonna start Adam oh this
49:02
is what you know so now there's just a cool chunky Matrix that they get to choose from again gives choices and then
49:08
it also gives a comparison of like oh I could get this much more doing it this
49:14
way I'm like yes and it doesn't scare them off right because like if I were to
49:19
just straight up do seller financing and they've never done seller financing before they'll probably be like ooh scary but like when they see the other
49:25
options they're like wait maybe I'll learn a little bit more about that yeah that's cool yeah it's not as threatening
49:31
because they know they have a plan B so they'll ask you about plan a knowing that they have a fallback of what is
49:37
comfortable for them totally yes yeah so it's a good way to look at it that's cool
49:44
um what were some of the amenities that you offer you said like if you want to upgrade here or upgrade here what are
49:50
some of those like carrot on the stick type of things that you add in yeah so a
49:56
big thing is like ceiling fans so right now there's like just like oh yeah we can add ceiling fans
50:02
um another one is like a different like you can choose a different appliance package
50:08
we did if you wanted it to be painted a different color you know like really just trying to incorporate them any
50:16
which yeah like oh you want your tub resurface like say you hit your tub or you you know you wanted a different way
50:21
you hate your cabinets you can have you can have new cabinets I don't care like because if you don't if you stay and you
50:26
don't trash your apartment because I gave you a new cabinet that is way cheaper because I have now done a couple
50:31
of like unit turns and it will destroy it I I that's all I was
50:39
like it's amazing how I walk in I'm like how did you do all this in a year totally it's impressive I I totally
50:46
agree yeah no that's super cool I haven't thought about the whole adding
50:51
amenities on The Re-Up I didn't really think of that concept I might steal that
50:57
from you no that's totally fine please I want everyone to steal it because it creates less turnover and less turnover
51:03
I was like I could keep going less turnover means less waste and less waste is better for the world yep yeah and I
51:10
I'm all about current trying to keep I know it's a rental but I want you to feel like this is your home and I want
51:16
you to treat it like it's your home so there's some things you're gonna have to do um and I know I get Flack on this too
51:22
but I always tell people like it comes down to like if you want to paint a wall to make your room like feel
51:29
the way you want to feel do it but it comes with a butt you're not the owner
51:36
of it so if you paint it neon green you just have to understand you either have to paint it back oh yes or you're gonna
51:42
have to pay to paint it back so like you could do it I'm not gonna say no
51:47
or you can mount your TV but like just know if you hit an electrical wire or
51:52
you damage the drywall like this is all on you yeah something you've got to understand it's on you totally something
51:59
cool that our apartment like does here is that um
52:04
they were like so if you want to add a light because it was so weird and I will
52:11
never understand but there wasn't a light in the living room or the bedroom so I was like I feel like I'm hiding in
52:16
a hole but he said that they would install a light or a ceiling fan so I
52:22
was like cool they are actually incentivizing people to put in a maintenance maintenance request in order
52:28
not to ruin things like an electrical learning you know like oh if you want your TV mounted we can help you with
52:34
that I'm like oh this is genius because people are not d
52:39
wait do it yourself diying all everything and you know I mean and then
52:45
at the end when you do have to go back and fix it you're not like oh my gosh it took you 37 holes to figure it out you
52:52
know it's like oh cool they figured it out in two yeah it's a stud finder yeah
52:59
totally man the stud finders now are getting crazy like they have ones that
53:05
you can put on and it picks up electrical wires too yeah those things are amazing
53:11
all right just do the old knock Method Man that's what I do like because even the stud finder is sometimes wrong
53:16
depending on what material I'm trying to go through so I'm like okay this sounds right is it okay and then try it and
53:23
once or twice I might have been slightly off but other times you know you find the center of the stud and you're good to go
53:29
nail that I have and all I do is I pop that through and I'm like oh there's the stud perfect if I don't have my tools
53:36
I just use a little small nail nice
53:44
it works not to go right back to it but that maintenance request then that's just another way for
53:51
the property management team I guess to make money from the renters
53:59
okay so yeah did it in order for me not to mess it up
54:07
okay was great it might even be an opportunity I mean depending to mount
54:12
the TV what takes 20 minutes maybe a half an hour if you're just putting the mount up on the wall I'm like okay here put the TV on I mean that then that
54:19
could eliminate a third party coming in if they were to hire you know what is that um
54:25
upwork there's other like companies where it's like yeah those putting I don't know
54:31
Ikea dressers and everything together so you don't hire them people handy.com
54:37
oh yeah you put in that request and then you know you guys can charge a heavily discounted rate then you have to worry
54:42
about like I said third parties coming in and ruining your stuff or you know whoever's the property owner it's not a
54:48
bad idea and do you guys have a CRM system that handles all your tickets because obviously managing so many doors
54:55
like your proper manager wants a system as well is that something you guys went in with the jump with the property
55:01
management software or I mean ours just like our property manager just already had it in place I think
55:08
I can look it up but I think that she uses AppFolio because that's just what
55:15
works best for her yep I just went to an Apple so she uses that polio that's in Oklahoma or is that in Tulsa Oklahoma
55:24
she's okay for all her property she also has some properties in like North West Arkansas so yeah she just uses it
55:30
like she just likes that CRM as a whole okay yeah AppFolio was a one that came up when I was looking for one as well so
55:37
not too familiar with it but I know like the concept of it and those are super nice because what that allows is you to
55:45
kind of be out of the picture um if I remember correctly
55:50
when they send a ticket it can get sent right to your property manager before you even know anything about it yeah I
55:56
know nothing about any of the maintenance requests that go on I only know so like we track kpis and the only
56:03
thing I ask like at the end of the month is like what um
56:08
what tickets do we have open that have been open more than three weeks and why have they been open more than three weeks
56:14
and that's super cool that you know that information because you have the CRM and those are small little things that make
56:21
your tenants not hate staying there because things are getting done timely
56:26
yeah but that's also you could use that as like a selling point to why they would choose to either pay more or
56:33
choose to to rent from you in the first place like hey you know Open tickets are only seven days or eight days or
56:39
whatever it might be and okay so yeah that's those are just more tangible statistics depending on the
56:45
person that you're renting to yeah and that's that's big for your numbers that that's stuff that when you're running your numbers on the property you already
56:51
factor in we're paying x amount for property management and then you have to worry about all like the extra if you
56:59
think about property management as an extra it's no longer an expert it's built into my my financing so you
57:04
already knew going in that it's not a headache and it's not financially burdened because it's already accounted
57:10
for yeah which is huge as a new investor I when I started and I did my own
57:16
property management I factored 10 in from the start because I knew eventually
57:21
I'm not going to do it I'm going to pay somebody so I want to make sure my numbers work now before I even get there
57:28
yes so something to keep track of for the new investors totally and something you're
57:35
going to do for your next two ones that you have under contractor yeah I'm guessing she's going to manage those
57:40
properties as well yeah you'll stay with that same property manager as long as you possibly can oh yeah she gives the
57:46
green light so if she says no I won't put an Loy down because I'm not going to go hunt a new property manager when I
57:53
know that I can trust Amy and her team there's no reason like if she said no there's for a reason so why would I go
57:58
and just try to make it work somewhere else yeah exactly yeah because some property managers will be like oh yeah we can achieve these rents cool you can
58:05
achieve those rents but like your story Marcus did you are we have gonna have to get it down to 30 occupancy because I
58:11
know the break-even point and the sensitivity analysis did not show 30 occupancy because nobody wants that yep
58:19
yeah and that guy was not having fun through all of it he was it was a definite struggle but it was worth it at
58:26
the end good no but yeah that comes into doing the due diligence
58:31
so that's totally well we have hit an hour and I don't want to keep you any longer because it's
58:38
bright and sunny outside we're we're going into 11 degrees here so
58:43
we're loving it that's fun yeah it's great I wish the best for you today
58:49
you enjoy your warm weather well Ohio is probably a little cold but all of your
58:54
Investments are enjoying the warm weather that's so for right now but yesterday
59:01
what a change I know I know
59:06
I was talking to my buddy who lives in San Diego and he was walking his dog last night uh nine o'clock my time and
59:14
he's like yeah I think it's like 60 degrees that's so cool you suck
59:19
negative five right now where I'm at that's funny yeah well I appreciate the
59:24
time thank you so much um and what is if someone wants to get a hold of you what's the best way to
59:30
contact you because we'll put that in the show notes so they can reach out totally so if you go to my website it's
59:36
adventurous rei.com forward slash info and there you can pick you know your
59:42
favorite flavor so if you like LinkedIn you can find me there if you like um Instagram or Facebook you can find me
59:48
there but if you are like a new operator and you're wanting to go into multi-family like reach out and I'd be happy to send you like the checklist
59:54
that we put together um oh that's an awesome that information offer yeah and actually I can just I can send
1:00:01
that to you all too because it's adventuresrei.com forward slash checklist so I can send you that okay
1:00:07
yeah we'll put that in the show notes for people that want to log out and and go yeah that'd be awesome well I
1:00:12
appreciate the time thank you so much enjoy your weekend and stay warm thank you
1:00:18
see ya [Music]