Real Estate Investing – Page 32

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MB 221: Achieve BIG Things with Tiny Action – With Brandon Turner

July 6, 2020/in Real Estate Investing/by Garrett Lynch

Doing something monumental like moving your family across the ocean to Hawaii or buying a 100-unit apartment complex may feel overwhelming. But Brandon Turner has done both of those things, and he contends that any process is easy IF you break it down into a series of tiny actions that take five minutes or less.

Brandon is the Founder of Open Door Capital, Vice President of BiggerPockets and Cohost of The BiggerPockets Podcast. He owns more than 500 rental units totaling $20M and has dozens of rehabs under his belt. Brandon’s work has been featured in Forbes, Entrepreneur and Money Magazine, and he is the author of several books, including The Book on Rental Property Investing and How to Invest in Real Estate.

On this episode of the podcast, Brandon joins me to share his assessment of the impact of COVID-19 on real estate investing, explaining how we should adjust our underwriting in light of the pandemic. He walks us through his favorite investing strategies right now, describing the opportunities he sees in real estate over the next 10 years. Listen in to understand the marketing techniques Brandon uses to raise LOTS of money online and get his advice on developing a clear VISION of where you want to be—and taking tiny action each day to get there!

Key Takeaways

Brandon’s assessment of the impact of COVID

Depends on whether second round of virus triggers another shutdown
85% confident pandemic will be interesting memory in 6 months

How real estate investors should adjust their behavior right now

Less optimistic in underwriting (don’t count on raising rents in Year 1)
Good time to revisit fundamentals, be more conservative

The opportunities Brandon sees over the long term

Migration to South as more and more people reach retirement age
Invest in mobile home parks, senior living and low-income multifamily

How this economic crisis differs from the last recession

Last downturn CAUSED by shady practices in real estate
Less impact on real estate this time (except vacation rentals)

Brandon’s favorite real estate strategies right now

House hacking good for new investors
Rehab or value-add (BRRRR method)
Mobile home parks

Brandon’s insight around COVID’s impact on low-income earners

Still paying rent at mobile home parks
Government won’t allow economy to fail

BiggerPockets’ most successful marketing strategies

Build trust and credibility with content (blog, podcast)
Make money as software company, not education

How Brandon uses content marketing in his investing business

Build trust and credibility at scale with content
Leverage video to raise money, send thank you letters
Focus on growing Instagram audience (125K followers)

How Brandon architects his life around his family and business

Develop clear vision of success, know where want to be
Keep asking, ‘What’s the next little tiny step?’

Connect with Brandon Turner

Open Door Capital

Brandon on BiggerPockets

Brandon on Instagram

Resources

Register for Michael’s Free Masterclass: How to Do Your First Apartment Deal

The Book on Rental Property Investing by Brandon Turner

Syndicated Deal Analyzer

Joe Fairless

Loom Video Messaging

Bryce Stewart on BiggerPockets Podcast EP276

Vivid Vision by Cameron Herold

Join Michael’s Investor Incubator Mentoring Program

MB 220: Affordable Housing by the Numbers – With Damian Bergamaschi

June 29, 2020/in Real Estate Investing/by Garrett Lynch

You may have heard the prediction that unemployment in the US could reach 30%, and that does sound scary. But what do those numbers really mean? And how would that worst-case scenario impact collections? What should we be concerned about as investors in affordable housing?

Damian Bergamaschi is the cofounder of Damris Capital, a money management firm that leverages data analysis to help its investors achieve financial freedom sooner. Damian leads Damris’ optimization research for all investment models and algorithms and serves as the portfolio manager of the firm’s real estate acquisitions.

On this episode of Apartment Building Investing, Damian joins me to explain how his obsession with data led to investments in commercial real estate. He discusses why affordable housing has been insulated from COVID-19, breaking down what the unemployment rate really means and how government subsidies have had a positive impact in the space. Listen in as Damian calculates projected collections in a worst-case scenario and find out why he is bullish on affordable housing as a reliable long-term investment.

Key Takeaways

The Damris Capital origin story

Idea to organize data, info from white papers
Test different asset classes by numbers

How Damian’s research led him to affordable housing

Devaluation of dollar = consistent long-term trend
Residential real estate most tax efficient way to invest indirectly in inflation
Add framework of Inflation Harvesting (layer on debt)

What we don’t understand about the unemployment rate

Many people have income despite being unemployed (e.g.: retirement, disability, etc.)
At 30% unemployment, 60% would still have income vs. 80% in normal circumstances

Why affordable housing is insulated from COVID-19

Government safety nets (stimulus checks, unemployment benefits)
More likely to pay for housing than discretionary expenses
Even in worst-case scenario, 70% collections projected

The adverse short-term impact COVID may have on affordable housing

Reductions for prepayment
Slightly lower collections
Credit card processing for online payments
Won’t raise rents for 12 to 18 months

Damian’s promising long-term outlook for affordable housing

Opportunity to raise rents at accelerated rate in 18 to 24 months
Consistent supply and demand in residential real estate
As cap rates contract, value of properties will expand

The cyclical nature of delinquencies and being paid up

Most caught up after tax return
Most delinquent after holidays

Why multifamily investors need to be thinking about September

Unemployment will start to hit caps (safety net goes away)
Renters may owe on taxes, not realizing UEB taxable

Connect with Damian Bergamaschi

Damris Capital

Resources

Damian’s Blog Post on Unemployment

Damian’s Blog Post on Mobile Home Park Investing

Damian’s Blog on Mobile Home Park Investing Performance Post-COVID

Inflation Harvesting

The Case-Shiller Home Price Index

US Bureau of Labor Statistics

Subprime Auto Loan Delinquency Statistics

Old Capital Real Estate Investing Podcast

MB 219: The New World Order of Multifamily Investing – With Michael Becker

June 22, 2020/in Real Estate Investing/by Garrett Lynch

No one knows exactly what will happen in the multifamily real estate market as the Coronavirus pandemic continues to unfold. But the heavy-hitters who have been in the game for a long time can predict, with relative certainty, which markets will thrive, when we’ll see new deal flow, and what the capital markets will look like over the next 12 months.

Michael Becker is a Principal at SPI Advisory and Senior Director of Mortgage Origination at Old Capital Lending. A 15-year veteran of commercial real estate banking, Michael has originated and managed portfolios in all the major asset classes. In the six years since he started investing in multifamily, Michael has acquired 10K units and currently manages a portfolio of 6K doors. He also serves as the Cohost of the Old Capital Podcast.

On this episode of Apartment Building Investing, Michael joins me to discuss the post-COVID new normal in multifamily real estate. He explains how the pandemic is impacting his business and offers insight around what the recovery might look like—and what that means for us as multifamily investors. Listen in for Michael’s predictions on multifamily capital markets and deal flow in the next twelve months and learn what you can do to be ready when the market turns!

Key Takeaways

How Michael’s career has evolved over the last several years

From 1K to 10K units in Dallas-Fort Worth and Austin
Start in workforce housing then sold old, bought new

How Michael was able to scale so quickly

Access to capital (JV with HNWI, shift to syndication)
Leverage technology for efficiency in raising equity

The biggest challenges Michael faced as he built SPI Advisory

Raise money + find deals while managing portfolio
Stay organized as scale (e.g.: send 1,200 K-1 forms)

Why Michael’s uses a third-party property management team

Geographically concentrated in certain area
No interest in accounting, HR or construction

How the pandemic is impacting Michael’s business

5% delinquency on rents (4X normal rate)
Leasing only down by 15%

Michael’s predictions around the post-COVID recovery

Multifamily product used more than ever
Rent softening (how much depends on market)
Supply will constrict, new construction unlikely
Increase rental pool as people lose homes
Accelerating economic migration to Sun Belt

Michael’s predictions around post-COVID multifamily deal flow

Few deals in Q3, trickle in Q4
Steady stream of distressed deals starting in 2021

What the capital markets will look like for the next 12 months

No hard money, financial contingencies available
Challenging to get Fannie/Freddie loans
No bridge loans, personal guarantees required

What work Michael is doing on the acquisitions side right now

Active participant but don’t expect to buy until Q4
Aware of real-time data, ready when market turns

Where Michael sees his company going in the next five years

10K units, continue transition to newer assets
Team runs day-to-day so Michael can travel

Connect with Michael Becker

SPI Advisory

Resources

Michael Becker on ABI EP064

The Real Estate Guys Summit at Sea

MB 218: The Most Direct Route to Financial Freedom – With Jacob Blackett

June 15, 2020/in Real Estate Investing/by Garrett Lynch

Those of us who enjoy success in the real estate business are typically introduced to a model, an investor operating at a scale we never considered, who gives us an idea for what’s possible and a vision for the future. And if we’re smart, we can learn from their mistakes and leverage their knowledge and experience as a springboard, affording us a more direct path to our own financial freedom.

Jacob Blackett is the Founder and CEO of Holdfolio, a platform that connects investors with high-yield investments in the real estate industry, and Syndication Pro, a software company that helps syndicators raise capital and manage investors online. Jacob got his start doing fix-and-flips as a 19-year-old sophomore in college, and today, he has placed over $50M into income-producing real estate, building a portfolio of 600+ units (as the lead sponsor) and a network of 3K registered investors.

On this episode of Apartment Building Investing, Jacob joins me to explain how an infomercial inspired his interest in real estate and share his journey from fix-and-flips to wholesaling to SFH rentals to multifamily. He walks us through the steps he took to scale his real estate business, describing why it’s beneficial to have an in-house property management team and how the technology he built to raise capital online became Syndication Pro. Listen in to understand how Jacob overcame losing $40K on his first deal and learn how to avoid his mistakes by joint venturing with an experienced team early on!

Key Takeaways

What attracted Jacob to the real estate space

Free fix-and-flip seminar (sophomore in college)
Up to $80K for single flip vs. CPA starting salary

Jacob’s experience with his first fix-and-flip

Picked up deal on MLS with grandma’s capital
Didn’t go as planned, ended up losing $40K

Why Jacob pivoted from flipping to SFH rentals

Very transactional, no tax benefits
Growing portfolio = monthly income stream

Jacob’s first AHA moment around scaling his business

Create partnerships with investors
Build portfolio of 150 SFH rentals quickly

What inspired Jacob’s transition to multifamily

All rentals in one place with staff onsite
Banks/lenders prefer multifamily

Jacob’s first multifamily deal

46-unit with fire damage at 50% occupancy
Leveraged investor network for capital

What surprised Jacob most about multifamily

Breath of fresh air (power of all in one place)
Had to learn a lot about asset management

Jacob’s background working in property management

Met investor through wholesale deal
Managed all his acquisitions within 2 years

The benefits of using in-house property management

Generates revenue once reach 500+ units
Control and consistency in best practices

Jacob’s first steps for scaling his real estate business

Implement use of Propertyware software
Hire talented leasing agent and COO

How Jacob scaled his capital raising efforts

Crowdfunding sites caught eye early on
Built website to raise money online

How Jacob bounced back from losing $40K

Resolve to fix mistakes
Determined to pay grandma back

Jacob’s advice to his 19-year-old self

JV on first flips to hedge risk
Job at multifamily private equity company

Jacob’s advice for aspiring multifamily investors

Get on experienced team, see where you fit
Think creatively, don’t be afraid to take job

Connect with Jacob Blackett

Syndication Pro

Email jacob@syndicationpro.com

Resources

Access Michael’s Syndicated Deal Analyzer

Enroll in Michael’s Deal Maker Mastermind

Download Michael’s Free Report—What’s the Best Investment: The Stock Market or Real Estate?

MB 217: Multifamily Developments That Thrive in a Downturn – With Scott Choppin

June 8, 2020/in Real Estate Investing/by Garrett Lynch

Some real estate investments are riskier than others, especially in an economic downturn. Class A multifamily developers, for example, are likely to lose their tenant base in a recession. So, what can developers do to forecast what the world will look like at the end of a build cycle and make decisions accordingly? And what can we ALL learn from this approach that will help us prosper through multiple market cycles?

Scott Choppin is the Founder of Urban Pacific, a real estate development company out of Long Beach, California. With 35-plus years of experience in the business, Scott has led the development of nearly 1,700 units throughout the Western United States. He is also responsible for a recent innovation known as Urban Town House, a middle-income, multigenerational housing product that serves urban families in California. Scott’s work has been featured in Forbes, The Los Angeles Times and Builder Magazine, among many other media publications.

On this episode of Apartment Building Investing, Scott joins me to explain how he got his start working for a large development firm, describing the wide range of skills and knowledge he picked up before striking out on his own. He discusses how he leveraged joint venture partnerships in the early days of Urban Pacific, what the company is doing to mitigate risk in a recession, and why he is optimistic about the current circumstances. Listen in for Scott’s insight on transitioning from a W-2 to real estate development and find out what YOU can do to survive and thrive in an economic downturn.

Key Takeaways

How Scott got into real estate development

Family background in industry
Work for large firm to learn on job

Why Scott chose another firm over the family business

No coddling
Gain broadest, deepest experience

What Scott learned in working for a big developer

Fill in broad framework of knowledge
Exposure to every aspect of business

How Scott transitioned into entrepreneurship

Build network of capital contacts
Joint venture with other developers

The structure of Scott’s early joint venture partnerships

Let me manage day-to-day operations of deal
Defer to senior partner as guarantor

Scott’s advice for shifting out of a salaried position

Save 2 to 3 years of monthly income in cash
Build developer fees into deal (overhead coverage)

The challenges around doing development as a side hustle

Best to learn by working in industry
Even small, local deal requires daily oversight

What kinds of deals Urban Pacific has done

Urban infill, residential development
From duplex to 453-unit multifamily

How Scott thinks about mitigating risk in a recession

Watch market signals to avoid oversupply
Focus on workforce housing for stable tenant base

Why Scott is optimistic about the current circumstances

Accelerated leasing velocity + rents holding
Lower costs for construction and land
Greater availability of labor from shutdown

Connect with Scott Choppin

Urban Pacific

Scott on LinkedIn

Resources

Download Michael’s Free Report—What’s the Best Investment: The Stock Market or Real Estate?

‘6 Ways to Build a Career in the Real Estate Development Business’ by Scott Choppin

Own Your Time with Kyle Marcotte

MB 216: Financially Free at Age 21– With Kyle Marcotte

June 1, 2020/in Real Estate Investing/by Garrett Lynch

How do you become a successful multifamily syndicator when you’re not old enough to order a beer? What does it take to overcome objections around being too young and too inexperienced—and raise more than half a million dollars in capital for your very first deal? What’s it like to achieve financial freedom before you turn 21?

Kyle Marcotte is an entrepreneur and multifamily real estate investor with a 119-unit portfolio valued at $5.5M. He was a pre-med student and Division I soccer player at UC Davis when Kyle learned about the potential to generate passive income with real estate. At the age of 20, he raised $600K and closed on his first deal in just four months. Now, Kyle is on a mission to help others become financially free with multifamily investing—regardless of age or experience.

On this episode of Apartment Building Investing, Kyle joins me to explain why he burned the boats and quit college to pursue real estate full time. He discusses how he got brokers and investors to take him seriously despite his lack of experience, sharing what gave him the confidence to keep moving forward through hundreds of no’s—until he finally got a YES. Listen in to understand why Kyle went for such a BIG first deal (a joint venture on 107 units!) and learn what he is doing now to build a personal brand and scale his multifamily syndication business.

Key Takeaways

What inspired Kyle to get into real estate

Read Rich Dad Poor Dad, got educated about passive income
Quit college to devote energy to multifamily

How Kyle realized he had the personality of an entrepreneur

Never able to accept being told what to do
Always trying to figure out best way

What financial freedom means to Kyle

Cover expenses with cashflow, residual income
Control over what day looks like

How Kyle got investors to take him seriously at the age of 20

Own inexperience but sell on grit
Deal pitch deck with multiple scenarios in story form

The specifics of Kyle’s first joint venture deal

107-unit in Louisville (value-add play)
Raised $600K of $1M for $4.5M purchase price

Why Kyle kept going after hearing hundreds of no’s

Burned boats and had no other option
Commit to outcome, eventually someone says YES

Why Kyle went after such a large first deal

Need 75 units to achieve economies of scale
Acquisition harder but affords more control of time long-term

The nature of Kyle’s first joint venture partnership

Partner focused on underwriting
Kyle worked on raising capital

How things changed for Kyle after his first deal

Silenced critics, feeling of peace and ease
Credibility with investors who see as phenom

What Kyle is doing to build his investor base

Serve as guest on podcast circuit
Show up consistently on social media

How gave Kyle the confidence to keep moving forward

Relationship with higher power for guidance
Voice inside stronger than outside resistance

Connect with Kyle Marcotte

Kyle’s Website

Kyle on LinkedIn

Kyle on Facebook

Kyle on Instagram

Resources

Join Michael’s Deal Maker Mastermind

Michael’s Ultimate Guide to Buying Apartments with Private Money

Rich Dad Poor Dad by Robert T. Kiyosaki

Financial Freedom Summit

The Miracle Equation: The Two Decisions That Move Your Biggest Goals from Possible, to Probably, to Inevitable by Hal Elrod

Review the Podcast on iTunes

The Apartment Queen on Instagram

MB 215: Changing the Face of Multifamily Syndication – With Kaylee McMahon

May 25, 2020/in Real Estate Investing/by Garrett Lynch

Why are there so few women in multifamily syndication? According to a 2019 study conducted by Merrill Lynch, 61% of women polled cited a lack of knowledge about real estate investing. And the fact that it’s a male-dominated industry is also a contributing factor. So, how do we get more women interested in learning about multifamily—and the financial independence that comes with it?

Kaylee McMahon is the Founder of The Apartment Queen, a platform dedicated to ending abuse and codependent relationships by helping women create wealth with real estate investing. A staple of the Dallas real estate scene, Kaylee has purchased $2M in real estate as Key Principal and currently serves as General Partner in 730 units in Texas and Arizona totaling more than $23M in assets under management. She is also the host of #1 Leading Ladies, a podcast about what it’s really like to be a female entrepreneur.

On this episode, Kaylee joins me to share her path from real estate agent to multifamily investor, discussing how the childhood abuse she suffered gave her the GRIT to keep going when things get tough. She offers her take on how a lack of knowledge around a male-dominated industry keeps a lot of women out of the multifamily game, describing her mission to help people, especially women, achieve the total independence she enjoys. Listen in for Kaylee’s insight on reversing the beliefs that hold you back and get her advice on how to get started with apartment building investing!

Key Takeaways

Kaylee’s path to multifamily real estate

Got start as agent, apartment locator
Move on to house flips + SFH rentals
Got into apartments ‘to add zero’

What makes Kaylee a good entrepreneur

Autonomous (make decisions on own)
Fast learner, good with people

Why Kaylee made the transition from agent to investor

All-in on decision to achieve financial freedom
Not afraid of losing it all, could always bartend

Kaylee’s take on the idea of failure

Take lessons learned with you to next venture
Pivot as necessary (e.g.: rent flip vs. sell)

Why Kaylee deals with fear better than others

Abuse in childhood built tremendous amount of GRIT
Driven by WHY to help others create independence

Kaylee’s experience with multifamily syndication

Did first 2 deals on own with help of mentor
Started partnering with others (raising capital)
General Partner in 730 units to date

Kaylee’s take on why there are so few women in multifamily

Lack of knowledge, limiting beliefs
Male-dominated industry (Good Old Boys Club)

Kaylee’s advice for aspiring multifamily investors

Learn underwriting, how to vet sponsors and market
Invest passively but ride along with GP to learn

Connect with Kaylee McMahon

The Apartment Queen

The Apartment Queen on Facebook

Kaylee on Facebook

#1 Leading Ladies Podcast

Email admin@theapartmentqueen.com

Resources

Deal Maker Live

What’s the Best Investment: The Stock Market or Real Estate?

Merrill Lynch 2019 Wealth Decisions Study

Rich Dad Poor Dad by Robert T. Kiyosaki

Scaling Up: How a Few Companies Make It … and Why the Rest Don’t by Verne Harnish

Podcast Show Notes

Review the Podcast on iTunes

MB 214: What Syndicators Can Do to Navigate COVID-19 – With Jason Pero

May 18, 2020/in Real Estate Investing/by Garrett Lynch

No good comes from making decisions out of panic or fear. So, what can multifamily syndicators do to navigate the next couple of months and cover the bills—even if our tenants can’t (or won’t) pay the rent on time? How can we reassure our investors that their money is safe and leverage the available safeguards to make it through the Coronavirus shutdown?

Jason Pero is the multifamily investor and syndicator behind Pero Real Estate, one of the leading real estate firms in Erie, Pennsylvania. Jason and his wife bought their first duplex in 2001 and continued to invest in small multifamily properties while he worked full-time in medical device sales. By 2012, Jason had built a 300-unit portfolio and was able to leave his 9-to-5 to pursue real estate full-time. He started syndicating deals in 2018, and today, Jason owns and self-manages 1K units in Erie County.

On this episode of the podcast, Jason joins me to discuss why he waited so long to get into syndication and why he self-manages his own portfolio. Jason explains how he is navigating the COVID-19 crisis, sharing the safeguards he has in place to get through the next few months and describing his approach to the situation as both a property manager and syndicator. Listen in for Jason’s insight on the buying opportunities coming on the market right now and find out why this is a good time to invest in yourself!

Key Takeaways

What inspired Jason to get into real estate

Internship with financial planning company
School teachers worth $5M (passive income from real estate)

Why it took Jason so long to take action on syndication

Limiting belief around loss of control
Realized could still call shots and serve more people

How the Coronavirus crisis elevates Jason’s mission

Watched stock market investors’ net worth plummet by 40%
Real estate provides predictable long-term investment

The safeguards that are helping Jason navigate COVID-19

Withhold distributions to see how next months play out
Can still pay bills with 30% economic vacancy
Go to forbearance only as last resort

Jason’s take on the impact of the Coronavirus as a syndicator

Lenders still bullish, agency debt still in play
Social distancing poses challenges to due diligence

Jason’s approach to the Coronavirus as a property manager

Extend olive branch to good tenants
Waive late fees, work out payment plan

The buying opportunities coming available right now

Sellers more flexible with due diligence
Willing to consider financing contingencies

What makes Jason successful in a rural area

Greater metro area of Erie = 350K people
Large influx of outside $ (Buffalo, Cleveland and Pittsburgh)
Decision to self-manage properties

Why Jason self-manages his own portfolio

Didn’t know any different in beginning
Track record through economic upheaval reassures investors

Jason’s advice on navigating a difficult time

Don’t freak out, look at situation from practical standpoint
Research options (e.g.: SBA programs)
Communicate with investors + don’t run out of cash

Jason’s advice for aspiring multifamily investors

Find mentor or coach who’s been where want to go
Keep learning and stay humble

Connect with Jason Pero

Email jasonpero@yahoo.com

Resources

Join Michael’s Deal Maker Mastermind

Read Michael’s Free Report—What’s the Best Investment: The Stock Market or Real Estate?

Rich Dad Poor Dad by Robert T. Kiyosaki

The Millionaire Next Door by Thomas J. Stanley and William D. Danko

SBA Programs for Coronavirus Relief

Podcast Show Notes

Review the Podcast on iTunes