FBF #608: Delegate to Elevate your Multifamily Syndicate – with Dan Handford

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Welcome to this week's edition of Flashback Friday.
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It's your opportunity to get some good review
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by listening to episodes from the past that Kevin is handpicked
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to help you along your investment journey.
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If you like to partner with Kevin,
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and join his team at Sunrise Capital Investors,
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head to investwithsunrise.com to learn more.
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That's Invest with Sunrise.com.
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Enjoy the show.
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Now, our guest for this week's show is real estate investment expert,
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Dan Hanford.
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Dan is a principal at Hanford Capital,
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a multi-family real estate investing and syndication firm.
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Now, Dan is also the founder of the multi-family investor nation
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with 34 groups of more than 2,000 members across the world.
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Now, in addition to his real estate endeavors,
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Dan is also the president and founder of five specialty medical clinics
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throughout South Carolina.
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And so, in today's show, we're going to have a candid conversation
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with Dan about his entry point into the multi-family syndication space,
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how he manages his time while running a very busy medical practice,
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and how he's built an all-star team and much, much more.
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And so, I'm very excited to get on to the show with Dan.
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But before we do have a few housekeeping items I'd like to run through with you guys.
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First and foremost, I've been mentioning now for the last couple of weeks.
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We're in acquisition mode here at Sunrise Capital Investors.
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And so, we're looking for mobile home parks.
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Preferably 60 lots are larger across the country.
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If you guys are out there in your hunt and you're in your search
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and you run across some up, what might seem to be opportunities
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in the mobile home park space, and the communities are 60 lots are larger,
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please stay with us.
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You can reach out to me through my website, KevinBubb.com.
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Let's go to the contact us page.
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Or you can go to our company website, Sunrise Capital Investors.com.
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Again, contact us page and we'll respond accordingly.
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Next up, just want to make a mention that we recently opened up
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the second tranche in our mobile home park, growth and income fund.
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And so, if you're an accredited investor
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and you're interested in partnering with us on our acquisitions,
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please visit our secure investment portal by going to invest.sunrisecapitalinvestors.com.
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And there you'll be able to review our PPM and our overall investment summary.
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Lastly, guys, if you happen to be in the Tampa Bay area,
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that's where we're based. We're over in Safety Harbor,
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which is about 20 minutes across the Bay from Tampa Bay International Airport.
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Come and visit us. I'd love to buy you a drink or buy you a lunch,
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buy a coffee, whatever you might have time for.
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I just again, reach out to me through my website, KevinBubb.com.
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The contact us page and let me know when you're coming in the town.
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Let's see if we can coordinate our efforts together.
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All right, guys, now without further ado,
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I'd like to welcome our guests for today's show, Dan Hanford.
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Dan, how are you doing today, my friend?
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Doing pretty good, Kevin. How about yourself?
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Oh, doing fantastic. We have no complaints.
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Nice to sit down here on Florida today.
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So don't know where you're based out of.
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So watch me tell us out geographically speaking,
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where you located and a little bit about your background, if you could.
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Sure. I'm in the Carolina.
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So I'm here in Ken Columbia, South Carolina.
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Okay.
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And kind of started in the multi-family space after starting five medical offices
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and having some cash flow being spun off of those
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and needing to stop writing six-figure checks to the government.
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And so it decided to start to go into the multi-family space
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full line from that.
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You look a little too young to be a guy that has open five medical offices
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over his lifetime.
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You're like in your 30s.
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So like you've been hustling for a long time.
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Yeah.
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So I started the offices as I'm a licensed chiropractor myself.
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Okay.
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I started it in 2011.
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My first chiropractic office and then decided that about two or three years in
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and I wanted to start bringing on and hiring on a medical team
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to help some of the ancillary things we were wanting to do in the office
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that we couldn't do because of our licensure restrictions.
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And so started hiring on MDs, nurse practitioners,
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and then decided that we wanted to go from one clinic to five clinics.
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And so I put a goal and a plan in place to grow from that one to five
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in a 24-month period of time and then ended up doing it in 18 months.
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Wow.
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So now we're here in Columbia, South Carolina.
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We have one in Greenville, Charleston, Fort Mill,
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which is that South Charlotte market as well as North Augusta.
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And so we just decided to, you know, expand pretty quickly.
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So I mean, I'm actually 36.
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I just turned 36.
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So I like to say I retired by 35 and then got bored to death for about two weeks
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and decided to do the multifamily stuff full time.
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All right. Fantastic.
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Let's talk about the multifamily space.
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Let's talk about that transition.
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I mean, you got bored, right?
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So you're making money in your medical practice.
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Things are going great.
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But, you know, you got to much free time in your hands, right?
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And so you started searching and tell us a little bit about what that real estate
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search looked like for you.
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I mean, did you ultimately know like just rail a gate that multifamily was kind of it
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based on, you know, what you had read or podcast you had listened to or
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did you kind of go through a tasting of each different property type
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before you ultimately landed on multifamily?
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Yeah. So I kind of give a little bit of a detail there.
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So I had been researching multifamily for probably about a year and a half to two years
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prior to making that decision.
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But I never really had the time to focus on it because I was so, you know,
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in the business and the practice all the time.
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And so I was doing a lot of the day they stuff, putting fires out, you know,
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going to meetings, things like that.
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And I went to an event in February of 2018 that really made me transform my thoughts
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and my mindset of where I should be.
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And I felt like, you know, it was actually a, I'm not sure if you know of a guy
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but they have a Tai Lopez, but he's kind of in the internet marketing space
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first things like that.
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But I had never heard of him before, but he spoke at this event.
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And it just, well, he was something that he talked about that really hit me was
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about how to become the general in your business.
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And of course, you know, I was the president and the CEO at the time.
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And I'm thinking, well, of course, I'm the general, you know, I'm the president,
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you know, I'm the CEO.
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I'm running this ship.
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And so, you know, I had sat back after a Tetris, you know, hearing what the rest of it he spoke about.
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And he's like, but if you are tied to it and you're doing all the day to day stuff
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and you're, you're having to go in and he goes, that's not really being the general.
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He said, look at Warren Buffett.
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That's the true general, right?
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So he doesn't have to leave his house at any time.
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He's basically on phone calls, checking in with the CEOs all the time, trying to check on them,
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kind of see how things are running.
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But he's not running those businesses day to day.
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Like he's not in there working with patients or customers or clients or whatever or employees or anything.
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He's completely removed.
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And so I looked at my current setup and this was actually on a Friday night that I thought about this.
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And then by two o'clock in the morning on Saturday, that's basically that same night.
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I had decided that I was going to step out from the practice and promote my COO at the time
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to the CEO so I can step away.
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So I still own the practice as a hundred percent.
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And I just basically took away the CEO role and gave it to somebody else.
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And I did that Monday morning.
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And then Tuesday, I announced it to my staff and I haven't stepped foot in the practices for the last year.
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And they've continued to, you know, to go and to grow.
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And we're opening probably two more clinics this year in Myrtle Beach and Hilton Head.
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And I'm not even going to be there for it.
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Yeah.
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Isn't that amazing?
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It's funny.
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When you start a business, you start a company, you feel like literally you're at the home.
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But you feel like if you step away that the folks that are there, you know, things are going to fall apart.
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I think it's going to crumble.
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And probably what you've realized for me.
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Yeah, but when you stepped away, you went away for a little while.
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You probably still kept the finger on it, a couple of fingers on it.
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And they slowly removed fingers one at a time.
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And you probably realized that actually had, you probably even had a much faster growth trajectory,
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letting, you know, empowering the folks that are there, the brains that are there, the power that's there.
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You probably had a little bit stronger growth trajectory than what you might have had with you being in there yourself.
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Do you feel that way?
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I feel that way when I go away for like a week or two.
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I feel like not that I'm in here micromanaging everybody.
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But I feel like, you know, everyone wants to do their best.
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I mean, if you hire the right team, you bring the right staff, you know, folks that align with your core values of your company.
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I feel like they come in with the mindset of they want to do the best.
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They have the best intentions.
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They want to grow.
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They want to grow with the company.
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And when you step away, it gives them the ability and the freedom to do so.
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That's kind of how I feel.
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Yeah.
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I think that that one of the things I learned earlier on is that art of delegation.
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And at the beginning, it was very hard because I'm the type of person that I want to do everything because I know I'm the best person to do it.
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And I know that might sound a little bit conceded, but it is.
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And so it's a fault that I have.
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I have to realize it, right?
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And so I, you know, started to delegate things.
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And in this situation, I did, I completely removed myself except for one thing.
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So I didn't want to just like, I can you talk about like like slowly getting things away.
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You know, like Monday morning, I told the CEO, oh, my God, I want you to be the CEO.
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I'm out.
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And then Tuesday morning, I literally was like, all right, I'm out.
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I took like a week to like, all right, here's a, here's a password, this thing and this thing and this thing.
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And here's how to do this.
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And here's how to do that.
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And then I was gone.
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But what I did do is I made sure that every Monday morning, because, you know, I'm a big believe in that you if you can't measure something and it's very hard to manage it.
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So I have very strict criteria on different statistics and numbers that I want to see across my desk every single week.
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And so every Monday morning, I get my, what I call my financial report, which gives me kind of like an overview picture of how each one of the various clinics are doing.
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And then the organization as a whole.
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And so I look at those every Monday morning.
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I get those from my, our staff accountant, but I also get those from our, our billing department.
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And I also get some of those numbers from our marketing department that tells us, you know, how the marketing is doing, how many new patients we got,
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how many conversions we got, all that kind of stuff.
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And then once a month, I meet with all my corporate team in my, I have an outside office outside of the clinics that I do what I'm doing right now.
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And we meet once a month to go over anything else and to make sure that my vision is continuing to go forward, even though I'm not there.
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Yeah, fantastic.
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So let's talk about the multifamily space.
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Let's talk about your entry point into it.
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What did that look like?
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I mean, ultimately, maybe the first deal is where we start.
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You made the decision to get into multifamily.
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What did that very first investment look like in the space?
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Sure.
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So one of the things that I did when I first made the decision is, well, first, I retired basically for like two weeks.
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And that's when I got bored is when I got tired.
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And so my wife was like, you got to get out of the house.
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You're just driving me nuts.
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And I was driving myself nuts.
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And so I just started going lunch with everybody kind of talking to people and saying, hey, how can I add value to you?
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What can I do for you?
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And then sat down on one of my bankers in Greenville, South Carolina.
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And she said, well, I know you've always been, you know, the last year and a half have been doing a lot of research on multi-family real estate and stuff like that.
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I'm like, that's what I need to do.
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So I just didn't think about it at the time.
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And so from there, I started, you know, going to seminars and reaching out to people.
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And I already been reading a lot of books.
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So I had a lot of the head knowledge as it was.
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But then I started to try to look for a mentor to be able to help me in the space because I had already accomplished a lot up to this point in my life.
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And I didn't want to start small when it came to anything else.
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And so I didn't want to start small with real estate and like start with like single family or anything like that or duplexes.
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I wanted to go big.
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So I immediately made a goal of, you know, I don't want to buy anything less than 100 units or less than $10 million in purchase price.
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And so in order for me to do that and reduce the learning curve, but also in the mistakes that I might have, I hired my first mentor because in the person I wanted to hire was somebody that I already knew was where I wanted to be.
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And I knew that I was going to have to write a big check to be able to get this person, which was fine with me.
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But I also in writing that big check wanted to make sure that I was getting that person and not a coach of that person.
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I wanted to have access to that person. So that's what I did.
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You know, I wrote a check, got my mentor and he's been with me all the way through this point.
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And one of the things that I did first when I went into the space is I didn't go out first and just try to find my own deal.
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I was trying to find my own deals, but under writing and analyzing and touring properties and all that kind of stuff and going through the motions.
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But I didn't just immediately go right into buying my first property by myself. So I did was I helped him partner with another group that actually allowed me to help raise money for them and be part of the general partnership and contribute in a certain way that allowed me to be able to get some of that experience and exposure.
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I did that first for my first four deals.
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And that way I could one build my portfolio up as well so that when they go and talk to brokers and sellers, they see that I'm actually active in the space.
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I'm closing deals. I'm taking action. And then when we did our first deal, the deal that we did very first was one that we actually got on our rebound off of an L.O.Y.
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That we had lost originally, then four weeks later, the broker calls us back and says, the deal is back on the table.
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The first buyer couldn't get it done. Do you still want it? And we're like, absolutely, you know, and so we were able to take that one down. That was a 130 unit deal. That was our first property.
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Okay. Fantastic. Let's talk about that first thing. And I think that's an important point. A lot of folks, they get very discouraged when they make offers and they ultimately get beat out by someone else, another buyer.
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But I think follow up is the key. And it sounds like that broker follow up with you. But in a lot of instances, staying in touch with that broker, finding out when that go hard date is for that earnest money of the person that beat you out on that opportunity, setting that on your calendar and making a point to follow up with that broker, maybe before that hard money date, because ultimately these things can kind of fall apart before that point in time.
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If it's an honest buyer and they realize that I'm not going to be able to do the deal, hopefully then they pull out before it is letting it drag up to the actual go hard point. But have you found that to be the case and any of the other transactions that you participated in that you've got basically beat out the beginning and the deal came back full cycle and you guys ultimately bought it. Has that ever occurred?
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Yeah, I mean, that's that's basically kind of what this one did. But I mean, most of the ones that I'm seeing that are coming back are actually between the L.O.I. and PSA phase. So they've signed the L.O.I. they've committed it by the property. And then for some reason, the contract negotiations, something falls through.
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They can't get it done. And so they come back to us and they say, hey, you know, they just couldn't get it done. They were a little bit wishy-washy there and stuff like that. And sometimes we can do the deal at that point, but sometimes we've kind of moved our capital somewhere else. And so we just we can't do it.
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But in most situations, I'm fine to get a deal on a rebound because number one, it tells me that I'm strict on my criteria on my underwriting. I know where my strike price is. And I'm very diligent in saying, all right, this is the most I can pay, you know, and the numbers still work and not just like over inflate.
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Like we just had one recently that we were bidding on. It was the $18.9 million project. And we got out did. We were the second highest bidder. But we got the highest bidder that was out did us bid $500,000 more than we did.
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And we can't figure out how it works as far as an underwriting standpoint. But obviously people, when we say that, it's everybody's criteria are different, right?
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You're dealing with a fund that only cares about a 10% IRR and we're trying to get a 15% or 16% IRR right now. It's hard to compete with that, right?
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Yeah, it really just depends on what your goals are and what you're trying to find in these properties. But I'm perfectly fine to get them on a rebound because it means I didn't over, I know for sure I didn't overpay on the property because somebody else tried to overpay and they couldn't get it done. And now it's coming back to me.
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But we're definitely out there and we're submitting L.O.I.s and we're confident on the deals that we submit on. So we don't just put a bunch of blanket L.O.I.s out there. We only submit on ones that we really know we want to get.
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And we even secure them with some hard money day one when we first get the deal locked up too.
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Wow. So in the multi-family space, that's pretty much an order to be competitive. You guys are putting hard money from day one, correct? Is that what you've stated?
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Yeah, right now, the hard money day one is what's getting the deal done in most circumstances. So I still believe, and I'll give you an example, that price can still outwin hard money day one.
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Yeah.
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That's exactly what happened on that last deal I was just telling you about. So we did 18.9 million with $200,000 hard day one when we signed the PSA and they did 19.4 million no hard money at all.
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And they sell our went with them instead of us.
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Wow.
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Huh. Very interesting. Talk to about the due diligence, the preliminary due diligence that takes place prior to you feeling comfortable with putting hard money down right out of the gate.
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So one, we would only do that on the market that we are very comfortable with. So when I say we because I now have two other partners that are with me.
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I have a gentleman by the name of Danny Randaza who's a financial analyst and I also have Brandon Abbott who is our acquisitions lead and does a lot of the boots on the ground and due diligence.
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So before we even put an L.O.I. on a property, Brandon actually goes to the property and is on site.
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So he's going to the property. He's doing the property tour as he's taking pictures and his background is in property and casually.
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And so he actually throws up a drone in the air. He does 3D modeling of the building. He does satellite imagery of the roofs.
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He also does measurements of the roofs to see, you know, if we have to replace the roofs, you know, what's going to cost us? What's the condition of the roofs?
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And so the 3D modeling of the building is very helpful because software he uses is called exactimate and it's a property and casually software.
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But if we need to, you know, estimate how much it's going to cost us to, you know, rebrick a building or repaint or just paint a building or whatever.
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You can plug in the dimensions from the 3D modeling and it spits out an exact quote.
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That's awesome. It's using labor rates in that particular zip code.
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And so it's very prepared, not proprietary. It's a very unique software that that's very, you know, that's not really used in this space.
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But it actually has been very effective to use it in this space because of that.
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It sounds like it should be.
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Absolutely. So, you know, that's that's one piece of the due diligence. But, you know, we also will comp the entire comp that the comp the property if we don't already have those numbers.
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So when we're in markets that we're familiar with, you know, a lot of times we're familiar with what the market rates are going to go for rentals in that market.
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And so we do market rental comms ourselves. So we don't just look at co star or some of the other, I think axiomatrix is another one that you can actually get some of those those comp numbers from actually go to the property.
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And then as we're going to the property will actually shop the properties around it to see what are some of the interior upgrades that are happening on some of their renovated units.
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What kind of rents are they achieving on those properties and hey, what can we can we do that on this property here.
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And there are some times many times I would say probably more times than not that the property just doesn't make sense because the rent comms are maybe already pushed to the max with that market can do.
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And we recently had an off market deal come to us and we're all excited because it's off market and stuff and we start running the numbers.
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And you know, the seller said, well, if you want it off market, I want I want at least to have a 12 in it, you know, 12 million plus and we under wrote it at 12 million.
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And the IRR came in at like sub 13, you know, and we're like, that just doesn't work for us.
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You know, we need to get higher than that. And so we opted because there's other deals out there.
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We opted to let that one go because we wanted to go find another deal that's really good for our investors.
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Got it. Got it. And what market do you guys focusing in today? So right now our primary focus has been in the Carolinas. So Charlotte, Raleigh, Charleston, Greenville.
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And then as we're growing, we're expanding into other markets like Orlando, Jacksonville and Atlanta.
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Let me also have some of our properties in the in the Houston market as well or not the Houston with the Texas markets.
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Houston is one of them, but we also are in Dallas for worth as well.
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What were some of the biggest challenges like stepping into your very first deal?
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I mean, I know that you didn't do the very first deal yourself in terms of like going out and finding it like you partnered with a pre-existing team.
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Someone had a track record and helped them raise capital in the GP side.
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But I mean, just generally speaking, what were some of the biggest challenges that you faced just getting into the space and finding a place?
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Yeah, I would say that the biggest challenge was when that went talking to investors, dim going, well, you're new to this, right?
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And that's one of the reasons why I wanted to kind of align myself with another operator that I knew had a track record and I can say, yes, I am new into this space.
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But let me tell you about the operator.
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And then I could basically just divert that to the operator.
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And then that got easier and easier as I started to do more deals because now some of my investors are in multiple ones of our deals because they're now seeing me in multiple spaces.
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So now when I come out with another deal, they're not saying what's your experience level.
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I've already had conversations with them about that. They already know my experience level.
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But at the same time, I look at syndication, the syndication space and go, if you have a background in business and you can actually manage large budgets, it's a pretty easy transition.
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Because that's really what we're buying. We're buying a syndication. That's basically what you're buying when you're doing buying a mobile home park.
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You're buying a business, like you're buying income and you have expenses off of that. So you're buying a business.
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And even though that business is secured with an asset, you're still buying a business.
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So if you have experienced managing large budgets, which I have experienced managing a $10 million plus budget with my clinics.
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So when somebody comes along and we have a property that has a $1 million budget on it, that's not that hard for me.
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And actually, one of the things we're finding when some of our properties is that not only are we able to increase the income by increase in the rental income and adding some additional amenities that allow us to increase and push that NOI, we're also able to start to run the property more efficiently by reducing expenses in certain areas.
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Because I also have a background and kind of IT space. So I've been able to go in and actually look at a property and go, oh, we don't need that.
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We don't need that. We can replace that with this time of technology. We can, we can, you know, reduce the staff because of X, Y, and Z, and you utilize the technology that's already available that you're just not using.
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Got it. Got it. No, very interesting. Let's talk about some of those ancillary income streams, the ones that you find to be the most common that you can add to a new acquisition to generate additional revenue.
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What are some of the big ones? Like if you just had like a top, maybe three or five that you see in that space in multi family space.
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Sure. So I will, I'll mention three of them. One of them is actually not necessarily increasing income, but they're reducing expenses, which is always good, right?
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Yeah. So first one, I would say is as valet trash, you know, everybody, you know, probably heard of that before, but basically we have an outside company that we contract with and they come in, you know, every day and take trash off the property and put it into the dumpster, whatever we charge that to the tenants.
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And then to the tenants are able to not have to worry about doing all that. We don't have to worry about hoarding or anything.
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We thought to worry about hoarding with some properties, but you don't have to worry about just trash building up and nobody taking it to the dumpsters. That's one thing.
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We typically get charged about 10 to $12 per unit for that. And then we offset that by charging the resident 20 to $25 a month on top of their existing lease for that.
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And so we haven't had a lot of pushback with it every once in a while, you get a little bit, but usually the way those companies work as they roll it out as the rent roll turns over.
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And so you're not just all the sudden day one charging people because you can because it's not built into their lease, but as the renewals come up, they will start to collect that additional revenue.
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Is that voluntary and voluntary for the tenants?
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It's involuntary. So they're required to have it. Yeah, interesting. Yeah. So it's one of those things that it's also allowed us to reduce the expenses at the same time, because instead of having to have five dumpsters,
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all across the property is spread out. You can have two dumpsters in one location in the back and just increase the pickup frequency. Yeah, very interesting. Okay, that's great. I love that.
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Yeah, so that's that's one. The second one I would say is what was the second one? Well, hopefully that one will come to my mind, but the third one is as far as reducing expenses is really all about trying to look at some of the technology that's there and that's not being utilized.
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So for example, on the first property we purchased the 130 unit one, they were using a system called Yardy Matrix or Yardy Voyager, if you will.
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And it's a property management software. I want to probably one of the most popular ones and the most robust ones out there. And I didn't know for sure if we were going to like it or not, but I actually do like it.
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But the reason why I can say we were reducing expenses is because we were able to reduce some of the personnel on the property because of the inefficiencies that were being happening with the maintenance requests. Okay.
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And so this is kind of this is really just kind of one component that that Yardy can help with, but they already had the system in place for it.
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But what they were doing is is that they never trained the new residents on how to use the app that came with it that actual rent cafe resident app.
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They didn't teach them how to use the website to actually submit tickets. They didn't train them how to use the email.
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And so we'd be sitting there in the office. They'd get phone calls throughout the day. And I'm like, oh, it was like a perspective resident. Oh, no, it was a maintenance request.
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And I'm like, why are we handling those over the phone? Like those should be people should be trained to use the technology.
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And and so she goes, I said, well, she said they're never, never, they're never trained. And I'm like, well, we got to put system in place for that. And I said, well, how does how do those tickets work? And she said, well, you know, resident calls in. I have a maintenance request.
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They take it over the phone. They type into the Yardy system. And then sometime throughout the day, the property manager looks and sees, oh, there's maintenance requests in there and presses a button and prints out all of the maintenance requests.
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Takes them to a separate room and puts them in a bin that says to be completed. Yeah. And then you can kind of see where this is going. And so sometime throughout the day, the maintenance guy, it comes out of his maintenance shed walks across the property to the maintenance.
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To the leasing office goes into this separate room. Oh, I have maintenance requests pulls them out goes to the back to his maintenance shed gets the tools he needs goes to the actual residents units, you know, fixes the request. He has a duplicate copy. So he's like writing on one copy about what happened.
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And to the resident on the other copy, he's doing the same thing for bringing it back to the property manager. And so he fixes it leaves one one behind goes back to his maintenance office puts his tools down goes back to the to the leasing office drops it off in another bin that says completed work orders or whatever.
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And then sometime throughout the day, the property manager goes and looks at that bin in the separate office, pulls them out goes to our desk, types them all up for. And then they close them out. And I'm like, that is just like the most inefficient system possible.
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Now, obviously like 10, 15, 20 years ago, that was probably the thing right like that was like a cool system. Hey, look what we did. We put this procedure in place that saved a lot of time ahead.
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But nowadays they already have software that's built in. And we were like, did you have you guys ever tried to use the app that there's actually a maintenance app that's specific to this, like whenever he gets a request come in it goes, Bing and it tells him you have a maintenance request.
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And he can be sitting there smoking a cigarette and then it's been his maintenance shed and getting a Bing. Oh, now you can just grab his tools and just go straight over there, fix it. And he can now type his notes of why he's in there with the resident. And the resident gets an email saying, hey, your your your work order has been completed. This is what we did.
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Here's some pictures of the work that we did and they can take pictures on the phone and being in all of all together property manager doesn't have to touch a thing.
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And so just doing that was able to allow us to be able to reduce, you know, they had a maintenance person plus a maintenance supervisor and a maintenance tech on 130 units.
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And they were getting but like five day requests a week.
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And so we were able to just go in there and put this new system in place and we able to eliminate one of those staff positions and reduce that into that that expense level just from looking at the technology that wasn't hard to be in utilized.
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Yeah, that's amazing. There's a lot of properties out there. I mean, especially in that size range that that are run on very antiquated.
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Well, this wasn't even an antiquated system. This had the technology that just wasn't being utilized, right?
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But either in that scenario or they're running on a very antiquated system to where you can increase the efficiency.
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So I think there's lots of opportunities out there like that in your space and our space and many other spaces as well.
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So the second one, I just remember, which is a pretty common one is the laundry service. So not only just, you know, I probably say, you know, 10 or 15 years ago, but it was looking at this going, you know, hey, let's, let's see if we can add coin laundry, right?
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So it doesn't have coin laundry. Let's add it and increase the income.
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And that's definitely something we would consider and look at. But right now a lot of the properties already have that if that's an option.
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But what they're not looking at is is can we get rid of the coin laundry and go ahead and add washer and dryer hookups in the units and increase the rents because of that.
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And so we look at it that way as well to try to find that additional value add.
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Okay. Fantastic. How about things like like dog parks and, you know, barbecue areas and all that kind of stuff. Is that something that you guys are adding as an additional
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amenity? I know there's not necessarily additional revenue generated from, but they can be there can be I guess probably don't know yet dog parks, but I mean, you know, pet fees that that, you know, pet rent.
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I guess it's probably the better way to put that's something that's I feel like maybe not brand new, but it hasn't been around all that long. I mean, yeah, 15 years ago, 20 years ago, I lived in the apartment.
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You know, it was a normal pet security deposit and, you know, you paid it one time and you didn't get it back if you turned the unit and it had peal on the carpet, right?
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I mean, you know, now the more common scenario is head rent. Talk about that if you would.
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Sure, sure. Yeah. So we've actually had properties that we've taken over that, you know, when we're walking the units every single one of the units will walk before we acquire the property during that due diligence phase.
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We actually make sure that when we're watching that we're walking those units that we know does this person have a pet and then we cross reference that with are they paying the rent the pet rent fee.
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50% of the units a lot of times aren't even paying the fees when they're supposed to have been paying them.
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So immediately we can go in there and start saying, all right, well, you would agree to pay the rent fee, but now you have a pet sometimes two or three and they haven't even paid any of the pet fees.
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And so you can go in there and do that, but one of the things I will tell you is is that when you look at dog parks, a lot of times you look at those and you go, they're not really revenue generating obviously you could, you know, attract more people that have pets because you have a dog park.
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So there can be a little bit of an added bump there, but in addition to that, what else do you think you could do on a dog park to increase revenue.
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I have no idea what about a vending machine that has dog bones.
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Okay, I like that. Yeah. So try to look at the look at a property and things on the outside perspective.
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I mean, it's again, it's not going to be like a, you know, a couple thousand dollars a month type thing, but, you know, giving increase in the income of that property by $50 to $100 or, you know, however much a month can just change how you're doing things, especially if it's a larger property that you have, you know, multiple types of those things in there.
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Even if you have coin laundry, what's another good thing to be able to make sure you have next to a coin laundry.
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You have a lot of detergent or softener, whatever might be right.
363
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Vending machines that produce the softener is in the, you know, whatever, you know, all kinds of stuff that you do with laundry.
364
00:29:59.000 --> 00:30:05.000
And you can increase the revenue from that. So it's just looking at properties of a different perspective and a different angle.
365
00:30:05.000 --> 00:30:10.000
And again, all of those types of revenues, we're talking about a vending machine and things like that.
366
00:30:10.000 --> 00:30:18.000
We don't sit there when we're doing our under right on the property and add that income in there. That's all the stuff that's just like added cherry on top of the cake.
367
00:30:18.000 --> 00:30:19.000
Yeah.
368
00:30:19.000 --> 00:30:20.000
Yeah.
369
00:30:20.000 --> 00:30:25.000
Did you just make up the dog bone vending machine or is that a real thing?
370
00:30:25.000 --> 00:30:30.000
I've actually been thinking about that for a while. So I'm pretty sure we'll be doing that pretty soon, but we haven't done it yet.
371
00:30:30.000 --> 00:30:32.000
That's a real thing. Do they exist?
372
00:30:32.000 --> 00:30:33.000
They do.
373
00:30:33.000 --> 00:30:34.000
They do.
374
00:30:34.000 --> 00:30:35.000
Yeah. Well, you think about it this way.
375
00:30:35.000 --> 00:30:40.000
You know, I got the idea because I was sitting there in Florida looking at a property in Jacksonville, Florida.
376
00:30:40.000 --> 00:30:47.000
And it was a lot of the properties in Florida. They have like a little pond in the middle and they have the properties that are all surrounding it and stuff.
377
00:30:47.000 --> 00:30:51.000
And so we were sitting there and this one had the gazebo that went out into the water.
378
00:30:51.000 --> 00:30:58.000
And I was walking out there and I was like, I was seeing all these birds and all the head actually stuck the fish and stuff like that.
379
00:30:58.000 --> 00:31:01.000
Where's the vending machine to feed the birds for the corn or whatever?
380
00:31:01.000 --> 00:31:02.000
Yeah.
381
00:31:02.000 --> 00:31:03.000
Yeah.
382
00:31:03.000 --> 00:31:08.000
Like I would definitely have that on that property. And then I was thinking they also have a dog park.
383
00:31:08.000 --> 00:31:12.000
They could do the same thing with a dog park like they're missing out on revenue that's easily there.
384
00:31:12.000 --> 00:31:15.000
Plus people that you know they're feeding those fish, right?
385
00:31:15.000 --> 00:31:18.000
Because they got to keep it stocks. They got to feed it.
386
00:31:18.000 --> 00:31:26.000
So instead of you having to pay for the feed, now you are actually making not making, but you're allowing your residents to be able to pay and feed the fish for you.
387
00:31:26.000 --> 00:31:27.000
That's awesome.
388
00:31:27.000 --> 00:31:28.000
I know I love it. I love it.
389
00:31:28.000 --> 00:31:29.000
It's like a theme park.
390
00:31:29.000 --> 00:31:34.000
I think I like the ducks. You can throw them like you can get the corn out right or bird sea whatever it is.
391
00:31:34.000 --> 00:31:35.000
So very interesting.
392
00:31:35.000 --> 00:31:38.000
Hey guys, Kevin Bup here with Sunrise Capital Investors.
393
00:31:38.000 --> 00:31:42.000
As you are hopefully already well aware, if you've been a listener for any period of time,
394
00:31:42.000 --> 00:31:47.000
my goal has always been to provide you with as much value as I possibly cancer my two podcasts,
395
00:31:47.000 --> 00:31:52.000
real estate investing for cash flow and the mobile home park investing podcast.
396
00:31:52.000 --> 00:31:59.000
As our audience continues to grow, literally we've been downloaded millions of times by folks in over 125 countries.
397
00:31:59.000 --> 00:32:03.000
I've had thousands of people reach out looking to get involved in our niche.
398
00:32:03.000 --> 00:32:06.000
And that's the phenomenal niche of mobile home park investing.
399
00:32:06.000 --> 00:32:11.000
For those that don't know, I've been a full-time real estate investor for nearly 20 years now,
400
00:32:11.000 --> 00:32:16.000
and I've personally invested in and have owned apartment complexes, various commercial properties,
401
00:32:16.000 --> 00:32:22.000
hundreds of single family rentals, and have interviewed some of the most successful investors in just about every other asset class.
402
00:32:22.000 --> 00:32:25.000
And I've arrived at this one very simple conclusion.
403
00:32:25.000 --> 00:32:30.000
Mobile home parks are hands down the best investment I've found today.
404
00:32:30.000 --> 00:32:31.000
Why?
405
00:32:31.000 --> 00:32:37.000
They provide investors with the best risk adjusted returns of any other real estate sector that I've seen.
406
00:32:37.000 --> 00:32:42.000
Investing real estate can get complicated, and I really want to simplify this process for you.
407
00:32:43.000 --> 00:32:47.000
If you're someone who wants to diversify away from the uncertainty of Wall Street,
408
00:32:47.000 --> 00:32:51.000
an allocated percentage of your real estate portfolio to mobile home parks,
409
00:32:51.000 --> 00:32:55.000
but maybe don't have the time nor the inclination to personally locate good deals yourself,
410
00:32:55.000 --> 00:32:57.000
then our team will do it for you.
411
00:32:57.000 --> 00:33:05.000
As sunrise capital investors, our team specializes in the acquisitions and management of undervalued and highly profitable mobile home parks.
412
00:33:05.000 --> 00:33:11.000
And we are now providing accredited investors with an opportunity to participate directly alongside our team
413
00:33:11.000 --> 00:33:13.000
and our up-and-coming deals.
414
00:33:13.000 --> 00:33:21.000
And let me say this, I believe that we are hands down the best in our space at sourcing highly profitable off-market deals.
415
00:33:21.000 --> 00:33:25.000
That's really what makes us unique in this niche and as investment managers.
416
00:33:25.000 --> 00:33:29.000
As stewards of your capital, we truly are aligned with our investors.
417
00:33:29.000 --> 00:33:35.000
We've structured our investment fund so that we as a company are incentivized in the same way the investor is,
418
00:33:35.000 --> 00:33:38.000
which is through the performance of the investment itself.
419
00:33:39.000 --> 00:33:43.000
In addition, we want to make sure that we not only make money for our investors,
420
00:33:43.000 --> 00:33:46.000
but that they understand how it's being made.
421
00:33:46.000 --> 00:33:52.000
That's why we provide our accredited partners with a private monthly podcast that walks them through the detailed updates
422
00:33:52.000 --> 00:33:54.000
on how their investment is performing.
423
00:33:54.000 --> 00:33:59.000
And we're very transparent, providing with the good, the bad, and the ugly at times.
424
00:33:59.000 --> 00:34:03.000
And so if you'd like to learn more about the partnership opportunities with our team here at Sunrise,
425
00:34:03.000 --> 00:34:08.000
please go visit SunriseCap from Vestors.com and click on the Investors link to get signed up.
426
00:34:08.000 --> 00:34:13.000
It's absolutely free and you'll get placed on the priority list of when new opportunities come along.
427
00:34:13.000 --> 00:34:18.000
Also, feel free to call us at 833 Cash Flow Without The O.
428
00:34:18.000 --> 00:34:21.000
Again, that's 833 Cash Flow Without The O.
429
00:34:21.000 --> 00:34:26.000
And one of our investor relations team members will help you schedule an appointment to speak with one of our managing principals.
430
00:34:26.000 --> 00:34:31.000
If you have questions, go ahead and schedule a call and let's get on the phone and talk.
431
00:34:31.000 --> 00:34:34.000
And with that, guys, I'd like to leave with one last thought.
432
00:34:34.000 --> 00:34:39.000
From the time that I wake up in the morning to the time that I lay my head down the rest of the evening,
433
00:34:39.000 --> 00:34:44.000
my number one priority with everything I do, whether it be recording this podcast,
434
00:34:44.000 --> 00:34:48.000
working for our investors, helping each of you reach your investment goals
435
00:34:48.000 --> 00:34:52.000
to providing a great experience to each of our residents who reside in our communities,
436
00:34:52.000 --> 00:34:57.000
is to add huge amounts of value to everyone that I come to contact with.
437
00:34:57.000 --> 00:35:03.000
Now, with that being said, I look forward to the opportunity of bringing value to you through sunrise and through this podcast.
438
00:35:03.000 --> 00:35:07.000
Thank you for your time. Now, let's go ahead and get back to the show.
439
00:35:07.000 --> 00:35:09.000
Let's talk about today's market.
440
00:35:09.000 --> 00:35:12.000
You're in multiple different areas buying apartment communities,
441
00:35:12.000 --> 00:35:16.000
but just generally speaking, from a high level point of view,
442
00:35:16.000 --> 00:35:19.000
there's a lot of competition out there today.
443
00:35:19.000 --> 00:35:22.000
There's always someone willing to pay a little bit more for a property, right?
444
00:35:22.000 --> 00:35:26.000
It's a little bit more challenging today than what might have been five years ago
445
00:35:26.000 --> 00:35:30.000
to actually take down the type of property that fits your criteria.
446
00:35:30.000 --> 00:35:34.000
With that being said, there's still opportunities out there if you dig hard enough.
447
00:35:34.000 --> 00:35:40.000
What excites you the most about where we're at today in the cycle,
448
00:35:40.000 --> 00:35:42.000
where you're at in your business, generally speaking,
449
00:35:42.000 --> 00:35:45.000
and then on the flip side of that, what scares you?
450
00:35:45.000 --> 00:35:47.000
What keeps you up a night?
451
00:35:47.000 --> 00:35:48.000
Sure.
452
00:35:48.000 --> 00:35:51.000
The first thing I'll say is these kind of go hand in hand,
453
00:35:51.000 --> 00:35:55.000
because one of the things I look at is supply and demand.
454
00:35:55.000 --> 00:35:57.000
When you talk about buying a business,
455
00:35:57.000 --> 00:35:59.000
when you talk about buying a business,
456
00:35:59.000 --> 00:36:02.000
you have to look at the supply and demand of the product that you're trying to buy
457
00:36:02.000 --> 00:36:05.000
or the product that the business is selling.
458
00:36:05.000 --> 00:36:11.000
Right now, in a syndication model, my customer is my investor.
459
00:36:11.000 --> 00:36:13.000
My customer is not the resident.
460
00:36:13.000 --> 00:36:18.000
Now, because I'm trying to find investors I want to invest in my product,
461
00:36:18.000 --> 00:36:20.000
my product is the multi-family property.
462
00:36:20.000 --> 00:36:24.000
Now, in the multi-family property, my customer is the resident.
463
00:36:24.000 --> 00:36:27.000
I have to look at that as well because it's kind of a two-fold thing there.
464
00:36:27.000 --> 00:36:32.000
When you look at it from a perspective of supply and demand,
465
00:36:32.000 --> 00:36:35.000
if you go to a website called weareappartments.org,
466
00:36:35.000 --> 00:36:40.000
they track very closely the supply and demand in various markets.
467
00:36:40.000 --> 00:36:44.000
Right now, between now and about 2030,
468
00:36:44.000 --> 00:36:47.000
we are going to be in this nation in a shortage.
469
00:36:47.000 --> 00:36:51.000
We're going to have a shortage of about 4.6 million apartment units.
470
00:36:51.000 --> 00:36:54.000
When you look at something like that, what does that tell you?
471
00:36:54.000 --> 00:36:58.000
That tells you that if we don't start to have increased and new supply coming online,
472
00:36:58.000 --> 00:37:00.000
which a lot of markets you look at and you go,
473
00:37:00.000 --> 00:37:01.000
man, there's a lot of supply.
474
00:37:01.000 --> 00:37:04.000
But yeah, but you don't understand that. That's still not enough.
475
00:37:04.000 --> 00:37:06.000
We still need more apartments.
476
00:37:06.000 --> 00:37:09.000
So when you know that there's going to be a shortage,
477
00:37:09.000 --> 00:37:12.000
what that's going to do is that's going to increase the demand
478
00:37:12.000 --> 00:37:15.000
because the supply is going to stay fairly stagnant.
479
00:37:15.000 --> 00:37:21.000
So what that means for us as investors is that when demand starts to outpace the supply,
480
00:37:21.000 --> 00:37:25.000
that's when you're able to continue to increase those rents.
481
00:37:25.000 --> 00:37:29.000
So even though over the last five to ten years since the crash in 2008,
482
00:37:29.000 --> 00:37:31.000
we've seen a very good bump in rents.
483
00:37:31.000 --> 00:37:34.000
That's an ice project that's going to continue to happen
484
00:37:34.000 --> 00:37:37.000
because of the supply and demand issue.
485
00:37:37.000 --> 00:37:39.000
Now, obviously it's markets specific.
486
00:37:39.000 --> 00:37:40.000
So I can't do this.
487
00:37:40.000 --> 00:37:43.000
You don't think you can just say all across the board is going to be like that.
488
00:37:43.000 --> 00:37:45.000
You know, you look at a place like Philadelphia,
489
00:37:45.000 --> 00:37:47.000
and you look at theirs on that same website.
490
00:37:47.000 --> 00:37:49.000
We are apartments.org,
491
00:37:49.000 --> 00:37:51.000
and their supply is actually going to outpace their demand.
492
00:37:51.000 --> 00:37:55.000
And so that's going to how it caused some of the rents to start to drop or level out.
493
00:37:55.000 --> 00:37:57.000
Whereas you look at other markets like Atlanta.
494
00:37:57.000 --> 00:38:02.000
I mean, Atlanta, even though they have a lot of supply going online right now,
495
00:38:02.000 --> 00:38:04.000
they are still in a shortage.
496
00:38:04.000 --> 00:38:07.000
You can still see that all the way up to 2030 on that website
497
00:38:07.000 --> 00:38:09.000
that there's going to be a shortage.
498
00:38:09.000 --> 00:38:12.000
And so what that means for us between now and 2030,
499
00:38:12.000 --> 00:38:15.000
unless somebody comes in and starts to build a ton more units,
500
00:38:15.000 --> 00:38:19.000
then the supply, because the supply is not there where we need it to,
501
00:38:19.000 --> 00:38:22.000
so that demand's going to go up, the rent prices will continue to go up,
502
00:38:22.000 --> 00:38:24.000
and the value will continue to go up as well.
503
00:38:24.000 --> 00:38:26.000
So that's kind of in a nutshell, you know,
504
00:38:26.000 --> 00:38:30.000
where I feel as far as where the multi-family space is going.
505
00:38:30.000 --> 00:38:33.000
Some people right now feel like we're over, that's not we,
506
00:38:33.000 --> 00:38:37.000
but just in general, that people are overpaying for these multi-family assets.
507
00:38:37.000 --> 00:38:40.000
And it's because they've never seen these assets do this well,
508
00:38:40.000 --> 00:38:44.000
because they've never seen these kind of assets have this shortage of a supply
509
00:38:44.000 --> 00:38:45.000
and this high of a demand.
510
00:38:45.000 --> 00:38:50.000
And that's what happened at any type of market when you start to talk about supply and demand.
511
00:38:50.000 --> 00:38:51.000
Interesting.
512
00:38:51.000 --> 00:38:53.000
Okay. Well, that is actually how about what keeps you up?
513
00:38:53.000 --> 00:38:55.000
And what scares the crap out of you, Dan?
514
00:38:55.000 --> 00:38:57.000
I would say the biggest.
515
00:38:57.000 --> 00:38:59.000
Not literally speaking, but just what scares you.
516
00:38:59.000 --> 00:39:00.000
What keeps you away?
517
00:39:00.000 --> 00:39:02.000
Yeah.
518
00:39:02.000 --> 00:39:07.000
I wouldn't say that the biggest thing that scares me is the information or the unknown,
519
00:39:07.000 --> 00:39:11.000
the data that I don't know, because I would say that's the case with anything.
520
00:39:11.000 --> 00:39:15.000
You know, even with my medical practices, the thing that keeps me up,
521
00:39:15.000 --> 00:39:18.000
which nothing really keeps me up at night, because I practice two things.
522
00:39:18.000 --> 00:39:21.000
So I make sure I have a hard day's work and a clear conscience.
523
00:39:21.000 --> 00:39:23.000
If I can have a hard day's work and a clear conscience,
524
00:39:23.000 --> 00:39:25.000
I can get a good night's sleep.
525
00:39:25.000 --> 00:39:26.000
I don't stay up late.
526
00:39:26.000 --> 00:39:30.000
The only time I'm staying up late is when my mind is racing about a new idea
527
00:39:30.000 --> 00:39:32.000
or something that I don't want to do.
528
00:39:32.000 --> 00:39:35.000
But something that would keep me up at night is the unknown, right?
529
00:39:35.000 --> 00:39:39.000
Like something that I just don't know what might happen.
530
00:39:39.000 --> 00:39:44.000
And so just like with the correction, there's projections of this correction coming up.
531
00:39:44.000 --> 00:39:45.000
We've been talking about it.
532
00:39:45.000 --> 00:39:48.000
If you look at the dates back until 2015, we've been talking about this.
533
00:39:48.000 --> 00:39:50.000
And it hasn't happened yet.
534
00:39:50.000 --> 00:39:54.000
And so it's just one of those things where who knows what's going to happen?
535
00:39:54.000 --> 00:39:56.000
And it's hard to really predict when it's going to happen.
536
00:39:56.000 --> 00:40:00.000
But there's definitely some things that you could do to increase that,
537
00:40:00.000 --> 00:40:02.000
or decrease that risk of if it does happen.
538
00:40:02.000 --> 00:40:05.000
What can you do to hold yourself through and kind of whether a storm,
539
00:40:05.000 --> 00:40:08.000
if you will, when it comes to the impending correction or whatever.
540
00:40:08.000 --> 00:40:11.000
But same thing within my medical practices, like I was saying earlier,
541
00:40:11.000 --> 00:40:16.000
is that one of the things that concerns me the most is we accept insurance, right?
542
00:40:16.000 --> 00:40:17.000
Well, I don't know.
543
00:40:17.000 --> 00:40:20.000
Maybe one day is going to happen where the insurance company is going to say,
544
00:40:20.000 --> 00:40:21.000
no more.
545
00:40:21.000 --> 00:40:23.000
We don't want you billing anymore for our services.
546
00:40:23.000 --> 00:40:25.000
And they cut me off, right?
547
00:40:25.000 --> 00:40:26.000
And so is that a fear?
548
00:40:26.000 --> 00:40:27.000
Is that a risk?
549
00:40:27.000 --> 00:40:28.000
It is.
550
00:40:28.000 --> 00:40:30.000
But it's not something that I can control.
551
00:40:30.000 --> 00:40:33.000
I cannot control what happens there.
552
00:40:33.000 --> 00:40:36.000
I cannot control what happens to the market in the next few years.
553
00:40:36.000 --> 00:40:40.000
But I can tell you this, that if something does happen in the market,
554
00:40:40.000 --> 00:40:43.000
I would rather my money be in multi-family,
555
00:40:43.000 --> 00:40:47.000
or some form of real estate, before I would want it in the stock market
556
00:40:47.000 --> 00:40:49.000
or mutual funds or anything like that.
557
00:40:49.000 --> 00:40:53.000
I know that my money is as safe in these types of multi-family assets.
558
00:40:53.000 --> 00:40:54.000
Yep.
559
00:40:54.000 --> 00:40:55.000
No, I agree wholeheartedly.
560
00:40:55.000 --> 00:40:58.000
So I want to ask you about the development side of the business.
561
00:40:58.000 --> 00:41:01.000
I know you guys are buying existing value-add type properties,
562
00:41:01.000 --> 00:41:04.000
but being that there's such a shortage of supply
563
00:41:04.000 --> 00:41:08.000
and it's ever increasing demand, have you guys actually considered
564
00:41:08.000 --> 00:41:10.000
developing new from the ground up?
565
00:41:10.000 --> 00:41:12.000
We have thought about it.
566
00:41:12.000 --> 00:41:15.000
But right now, we are not in a position to do that
567
00:41:16.000 --> 00:41:20.000
because all of our investors are wanting cashflow day one
568
00:41:20.000 --> 00:41:21.000
when we close.
569
00:41:21.000 --> 00:41:23.000
And that's what we would like as well.
570
00:41:23.000 --> 00:41:24.000
Now, that's not to say that.
571
00:41:24.000 --> 00:41:26.000
We might not get into it in the future.
572
00:41:26.000 --> 00:41:28.000
You know, we've definitely considered it.
573
00:41:28.000 --> 00:41:31.000
And we've talked to a couple of developers that are in the space.
574
00:41:31.000 --> 00:41:33.000
And it's hard right now.
575
00:41:33.000 --> 00:41:36.000
That's one of the reasons why there is a supply issue is because
576
00:41:36.000 --> 00:41:40.000
it supplies, if you will, materials are so expensive right now.
577
00:41:40.000 --> 00:41:42.000
It's hard to make the numbers work.
578
00:41:43.000 --> 00:41:47.000
Even with the national housing, the multifamily housing council,
579
00:41:47.000 --> 00:41:50.000
they are actually working with some governmental agencies
580
00:41:50.000 --> 00:41:53.000
to try to get some grants and some things together.
581
00:41:53.000 --> 00:41:54.000
And they're already doing that.
582
00:41:54.000 --> 00:41:56.000
But getting some tax credits and things like that
583
00:41:56.000 --> 00:41:58.000
that will motivate some investors
584
00:41:58.000 --> 00:42:02.000
to really want to put their money into some more of these longer term.
585
00:42:02.000 --> 00:42:05.000
15-year developmental, affordable housing projects
586
00:42:05.000 --> 00:42:08.000
to allow us to increase that supply.
587
00:42:08.000 --> 00:42:11.000
But right now, we're focused primarily on the cash flowing.
588
00:42:11.000 --> 00:42:13.000
Existing builds right now.
589
00:42:13.000 --> 00:42:14.000
Got it.
590
00:42:14.000 --> 00:42:16.000
Just to give a general idea to the listeners
591
00:42:16.000 --> 00:42:19.000
that maybe you're considering getting into the multifamily,
592
00:42:19.000 --> 00:42:23.000
give us a high level point of view of how many deals you guys look at
593
00:42:23.000 --> 00:42:25.000
on a, let's say on a monthly basis.
594
00:42:25.000 --> 00:42:28.000
And that's probably a good gauge to use on a monthly basis.
595
00:42:28.000 --> 00:42:31.000
How many deals come flowing into your organization?
596
00:42:31.000 --> 00:42:34.000
And out of those deals, how many do you actually spend any time
597
00:42:34.000 --> 00:42:37.000
on underwriting and actually writing an LOI on?
598
00:42:37.000 --> 00:42:38.000
Can you give me a general number?
599
00:42:38.000 --> 00:42:39.000
What that looks like?
600
00:42:39.000 --> 00:42:41.000
Because I know you got to look through a lot, right?
601
00:42:41.000 --> 00:42:42.000
We do personally in our business.
602
00:42:42.000 --> 00:42:44.000
We look at a lot of opportunities.
603
00:42:44.000 --> 00:42:47.000
And right, you know, a good amount of LOIs.
604
00:42:47.000 --> 00:42:51.000
But literally for us, it's probably like maybe about 20%
605
00:42:51.000 --> 00:42:53.000
that we actually spend the time to actually write an off-road.
606
00:42:53.000 --> 00:42:54.000
Maybe not even that high.
607
00:42:54.000 --> 00:42:56.000
And then ultimately, out of that 20%,
608
00:42:56.000 --> 00:42:58.000
we probably win about half those.
609
00:42:58.000 --> 00:43:00.000
So what does that look like in your business?
610
00:43:00.000 --> 00:43:03.000
So I mean, the initial deal flow for us
611
00:43:03.000 --> 00:43:06.000
is always e-mails that come in from brokers
612
00:43:06.000 --> 00:43:08.000
that say, hey, we got this new listing, right?
613
00:43:08.000 --> 00:43:10.000
I'm sure it's quite similar to you.
614
00:43:10.000 --> 00:43:13.000
Get a few off-market, a few little pocket listings here and there.
615
00:43:13.000 --> 00:43:16.000
But for the most part, we're getting a lot of the e-mail flow.
616
00:43:16.000 --> 00:43:19.000
And so we're probably getting every between about 75 and 100
617
00:43:19.000 --> 00:43:22.000
in the various markets that we're watching every single one.
618
00:43:22.000 --> 00:43:23.000
Wow.
619
00:43:23.000 --> 00:43:26.000
And so we're not underwriting every single one of those
620
00:43:26.000 --> 00:43:30.000
because we have very strict criteria on what we're looking for.
621
00:43:30.000 --> 00:43:32.000
And so if it doesn't fit our criteria,
622
00:43:32.000 --> 00:43:34.000
we immediately hit the delete button.
623
00:43:34.000 --> 00:43:35.000
So we don't even look at it any further.
624
00:43:35.000 --> 00:43:37.000
We don't want to waste our time with it.
625
00:43:37.000 --> 00:43:39.000
And so of the deals that come through our desk,
626
00:43:39.000 --> 00:43:42.000
we will fully underwrite the ones that we look at
627
00:43:42.000 --> 00:43:45.000
on a superficial level and go, yeah, I think this could work.
628
00:43:45.000 --> 00:43:48.000
From our knowledge of the market and what we're seeing,
629
00:43:48.000 --> 00:43:49.000
we can do that.
630
00:43:49.000 --> 00:43:52.000
And so we'll do first an initial underwriting of the project
631
00:43:52.000 --> 00:43:55.000
to see, is this feasible from a surface level view?
632
00:43:55.000 --> 00:43:57.000
If it is, then we move forward
633
00:43:57.000 --> 00:43:59.000
into doing this with the due diligence on site
634
00:43:59.000 --> 00:44:00.000
before we submit the LOI.
635
00:44:00.000 --> 00:44:03.000
And we only submit an LOI each month, probably on about
636
00:44:03.000 --> 00:44:05.000
three to five offers a month.
637
00:44:05.000 --> 00:44:07.000
And it's because we're very strict.
638
00:44:07.000 --> 00:44:09.000
We want to make sure that we are order only.
639
00:44:09.000 --> 00:44:12.000
We don't want to waste our time doing a lot of extra bids
640
00:44:12.000 --> 00:44:14.000
and extra deals and stuff like that.
641
00:44:14.000 --> 00:44:16.000
So we're putting in about three to five a month on
642
00:44:16.000 --> 00:44:21.000
and our goal for 2019 is to do a hundred million
643
00:44:21.000 --> 00:44:22.000
dollars in acquisitions.
644
00:44:22.000 --> 00:44:25.000
And we're going to be doing that by making sure that we have
645
00:44:25.000 --> 00:44:28.000
minimum 10 million that we're doing about two,
646
00:44:28.000 --> 00:44:31.000
one to two, sometimes three deals in every quarter.
647
00:44:31.000 --> 00:44:32.000
Yeah, no, I love it.
648
00:44:32.000 --> 00:44:33.000
I love it.
649
00:44:33.000 --> 00:44:34.000
Those are great goals, man.
650
00:44:34.000 --> 00:44:37.000
So it sounds like you guys are a role on track in 2019
651
00:44:37.000 --> 00:44:38.000
to make that happen.
652
00:44:38.000 --> 00:44:40.000
So congrats on your success that you've had thus far
653
00:44:40.000 --> 00:44:42.000
because you've only been in the space for only a short
654
00:44:42.000 --> 00:44:43.000
few years.
655
00:44:43.000 --> 00:44:44.000
And kind of leads me to my next question.
656
00:44:44.000 --> 00:44:46.000
I mean, just knowing what you know today,
657
00:44:46.000 --> 00:44:49.000
the experience that you have, the number of deals that you've
658
00:44:49.000 --> 00:44:52.000
conducted, if you could go back in time a couple of years back
659
00:44:52.000 --> 00:44:55.000
and give yourself some advice right when you're stepping
660
00:44:55.000 --> 00:44:59.000
into the space, what would that advice be?
661
00:44:59.000 --> 00:45:01.000
And it can't be by bigger or by faster.
662
00:45:01.000 --> 00:45:02.000
Those two are always used.
663
00:45:02.000 --> 00:45:04.000
So you can't give me those answers.
664
00:45:04.000 --> 00:45:05.000
Yeah.
665
00:45:05.000 --> 00:45:06.000
Yeah.
666
00:45:06.000 --> 00:45:10.000
I think what I would probably say is raising money
667
00:45:10.000 --> 00:45:11.000
from more deals.
668
00:45:11.000 --> 00:45:14.000
I mean, because you know, I think from from what I can,
669
00:45:14.000 --> 00:45:17.000
if I look back at what I did and I raised money for various
670
00:45:17.000 --> 00:45:20.000
deals and I did some of my own deals, actually another
671
00:45:20.000 --> 00:45:23.000
that I think about it, I'd probably say raising money
672
00:45:23.000 --> 00:45:26.000
for more deals, but alongside that same thing is start
673
00:45:26.000 --> 00:45:28.000
looking for investors sooner.
674
00:45:28.000 --> 00:45:29.000
Yeah.
675
00:45:29.000 --> 00:45:31.000
You know, because a lot of times we get into this phase of
676
00:45:31.000 --> 00:45:33.000
let's underwrite the deals, let's get a deal.
677
00:45:33.000 --> 00:45:35.000
And once we have a deal, then we'll find investors.
678
00:45:35.000 --> 00:45:36.000
Yeah, that's tough.
679
00:45:36.000 --> 00:45:37.000
I don't know.
680
00:45:37.000 --> 00:45:39.000
You need to be finding the investors first, you know,
681
00:45:39.000 --> 00:45:40.000
and then getting them there.
682
00:45:40.000 --> 00:45:43.000
And then I encourage everybody to get a mentor,
683
00:45:43.000 --> 00:45:46.000
because I, you know, with my group that I started
684
00:45:46.000 --> 00:45:48.000
called a multi-family investor nation.
685
00:45:48.000 --> 00:45:51.000
One of the most frustrating things for me is I also,
686
00:45:51.000 --> 00:45:53.000
you know, because of my own net worth and liquidity,
687
00:45:53.000 --> 00:45:56.000
I also do some non-recourse loan guarantor
688
00:45:56.000 --> 00:45:57.000
and balance sheet work.
689
00:45:57.000 --> 00:46:01.000
And so one of the things I've found is that a lot of people
690
00:46:01.000 --> 00:46:05.000
in this space don't really understand how to work
691
00:46:05.000 --> 00:46:06.000
with investors.
692
00:46:06.000 --> 00:46:10.000
You know, there are due dates are all flexible and like
693
00:46:10.000 --> 00:46:12.000
they're like we're going to close sometime in the month
694
00:46:12.000 --> 00:46:14.000
of February or March, and it's like how,
695
00:46:14.000 --> 00:46:16.000
how can an investor really work with that?
696
00:46:16.000 --> 00:46:18.000
Like I'm not going to present a deal to an investor
697
00:46:18.000 --> 00:46:20.000
unless I know exactly when things are going to happen.
698
00:46:20.000 --> 00:46:21.000
Yeah.
699
00:46:21.000 --> 00:46:23.000
That doesn't mean that things can't change.
700
00:46:23.000 --> 00:46:25.000
But to be able to say February or March,
701
00:46:25.000 --> 00:46:26.000
it's like this pick a date.
702
00:46:26.000 --> 00:46:27.000
Like pick a week.
703
00:46:27.000 --> 00:46:29.000
Like you know, but they know what to expect.
704
00:46:29.000 --> 00:46:32.000
And if it changes, I mean, people understand that,
705
00:46:32.000 --> 00:46:35.000
that lenders, you know, delay things and things happen.
706
00:46:35.000 --> 00:46:37.000
And so as long as there's a story behind it,
707
00:46:37.000 --> 00:46:39.000
just communicate it with them.
708
00:46:39.000 --> 00:46:41.000
So being able to be able to have, I mean,
709
00:46:41.000 --> 00:46:44.000
I did a presentation at our summit this past January.
710
00:46:44.000 --> 00:46:47.000
We did a summit called the multi-family investor nation summit.
711
00:46:47.000 --> 00:46:51.000
Had over 500 investors there and doing another one coming up in June.
712
00:46:51.000 --> 00:46:54.000
But one of the things, one of the topics that I did was a keynote
713
00:46:54.000 --> 00:46:57.000
that was called the mindset of a high net worth investor.
714
00:46:57.000 --> 00:47:00.000
And the mindset of a high net worth investor really has to go,
715
00:47:00.000 --> 00:47:04.000
it all boils down to being able to make sure that you communicate with them.
716
00:47:04.000 --> 00:47:06.000
Because when they feel like they're not being communicated with,
717
00:47:06.000 --> 00:47:09.000
that's when they start to lose, but it'll lose hope not only in you.
718
00:47:09.000 --> 00:47:11.000
And you might go, yeah, well, they're already in the deal.
719
00:47:11.000 --> 00:47:12.000
They can't do anything.
720
00:47:12.000 --> 00:47:13.000
Yes, they can.
721
00:47:13.000 --> 00:47:16.000
They cannot visit you and not invest with you on the next deal.
722
00:47:16.000 --> 00:47:17.000
Sure, absolutely.
723
00:47:17.000 --> 00:47:20.000
That's actually worse than them not wanting to stay in the deal.
724
00:47:20.000 --> 00:47:23.000
I don't want an investor in our deal if they don't want to be in the deal.
725
00:47:23.000 --> 00:47:26.000
So I want to make sure that they're in our deal and that they want to stay in our deal.
726
00:47:26.000 --> 00:47:29.000
And if your listeners want to copy that keynote,
727
00:47:29.000 --> 00:47:30.000
I'd be glad to give it to them.
728
00:47:30.000 --> 00:47:32.000
This is kind of just all off the cuff.
729
00:47:32.000 --> 00:47:33.000
So they have to email me.
730
00:47:33.000 --> 00:47:37.000
I just shoot me over an email at Dan at multi-familyinvestornation.com.
731
00:47:37.000 --> 00:47:41.000
I'd be glad to shoot them over a cop of the link to that interview,
732
00:47:41.000 --> 00:47:43.000
or that interview, but that keynote.
733
00:47:43.000 --> 00:47:44.000
Yeah, that'd be awesome.
734
00:47:44.000 --> 00:47:45.000
I appreciate that, Dan.
735
00:47:45.000 --> 00:47:47.000
And yeah, you shared a lot of great information here today.
736
00:47:47.000 --> 00:47:48.000
And I appreciate you coming to the show.
737
00:47:48.000 --> 00:47:52.000
And what I'd like to ask of you is as we wrap things up here,
738
00:47:52.000 --> 00:47:56.000
if you had just one final golden nugget of advice or wisdom that you can leave with our listeners
739
00:47:56.000 --> 00:48:01.000
that may inspire and motivate them as they progress in their real estate investing career,
740
00:48:01.000 --> 00:48:03.000
what would that one last golden nugget be?
741
00:48:03.000 --> 00:48:07.000
I would say kind of going back to what I said earlier on is that,
742
00:48:07.000 --> 00:48:09.000
you know, it's the same thing in my medical practices.
743
00:48:09.000 --> 00:48:12.000
Even though I stepped away, I was still putting things into place
744
00:48:12.000 --> 00:48:14.000
to make sure that I could be measuring things.
745
00:48:14.000 --> 00:48:18.000
And so making sure that you can put some things in place to make sure you measure
746
00:48:18.000 --> 00:48:22.000
not only the assets and the performance of your assets, but also your goals.
747
00:48:22.000 --> 00:48:23.000
You know, set out a goal.
748
00:48:23.000 --> 00:48:27.000
And I'm not that big of a like goal person.
749
00:48:27.000 --> 00:48:30.000
Like I said, goals like I told you earlier about opening up those five clinics in 24 months
750
00:48:30.000 --> 00:48:32.000
and then doing it in 18 months.
751
00:48:32.000 --> 00:48:35.000
But did I sit down and write them all down and do all that kind of stuff?
752
00:48:35.000 --> 00:48:36.000
I didn't.
753
00:48:36.000 --> 00:48:38.000
I just knew inside of me, I'm like, I'm going to do this.
754
00:48:38.000 --> 00:48:39.000
This is what I'm going to do.
755
00:48:39.000 --> 00:48:43.000
And but I have to be able to make sure that I'm measuring those things as well.
756
00:48:43.000 --> 00:48:46.000
So if you can't measure it, you can't manage it.
757
00:48:46.000 --> 00:48:49.000
And so whatever you're doing in life, whether it be personal, you know,
758
00:48:49.000 --> 00:48:53.000
like life things, fitness goals, spiritual goals, or whether it be in business
759
00:48:53.000 --> 00:48:56.000
or in these these real estate assets, you've got to make sure that you put things in place
760
00:48:56.000 --> 00:49:00.000
that you can measure things so you can manage it to make sure that it's actually performing
761
00:49:00.000 --> 00:49:02.000
the way you're wanting it to perform.
762
00:49:02.000 --> 00:49:03.000
Yeah, no, that's great advice.
763
00:49:03.000 --> 00:49:04.000
Absolutely.
764
00:49:04.000 --> 00:49:06.000
And Dan, this has been a lot of fun.
765
00:49:06.000 --> 00:49:08.000
I really appreciate you coming to the show here.
766
00:49:08.000 --> 00:49:11.000
And I know that there's multiple different ways that we can get in contact with you.
767
00:49:11.000 --> 00:49:13.000
You obviously give out your email address.
768
00:49:13.000 --> 00:49:16.000
But can you give or give our listeners an idea of where the best sites
769
00:49:16.000 --> 00:49:20.000
to actually find out more about you and your company and what you guys have going on?
770
00:49:20.000 --> 00:49:21.000
Where are the best sites to visit yet?
771
00:49:21.000 --> 00:49:22.000
Sure.
772
00:49:22.000 --> 00:49:23.000
Yeah.
773
00:49:23.000 --> 00:49:27.000
So if you're interested in investing with us and you want to jump on a phone call with me,
774
00:49:27.000 --> 00:49:30.000
I'll be glad to jump on a one-on-one call with you and and discuss your goals
775
00:49:30.000 --> 00:49:32.000
and make sure it's a good fit with ours.
776
00:49:32.000 --> 00:49:35.000
Because like I said, I never want an investor to be investing with us
777
00:49:35.000 --> 00:49:36.000
if our goals don't align up.
778
00:49:36.000 --> 00:49:39.000
And so you can go visit us at passiveinvesting.com.
779
00:49:39.000 --> 00:49:41.000
A very easy website to go to.
780
00:49:41.000 --> 00:49:43.000
There's a form on there you can fill out.
781
00:49:43.000 --> 00:49:48.000
And my system will reach out to you and we'll schedule a phone call to have a one-on-one.
782
00:49:48.000 --> 00:49:51.000
And see if you'll be interested in coming on some of our future projects.
783
00:49:51.000 --> 00:49:55.000
And then for those of you who are interested in and learning more about multi-family,
784
00:49:55.000 --> 00:49:58.000
I mean, possibly doing some syndications yourself,
785
00:49:58.000 --> 00:50:00.000
we do free weekly webinars.
786
00:50:00.000 --> 00:50:03.000
You can go to multi-familyinvestornation.com.
787
00:50:03.000 --> 00:50:05.000
Sign up for our free email list there.
788
00:50:05.000 --> 00:50:08.000
And you can also sign up there and find links to our YouTube channel we do.
789
00:50:08.000 --> 00:50:10.000
We also have our Facebook, our closed Facebook group.
790
00:50:10.000 --> 00:50:12.000
And also meet up groups across the country.
791
00:50:12.000 --> 00:50:15.000
We have 50 different chapters right now all across the country.
792
00:50:15.000 --> 00:50:16.000
Wow.
793
00:50:16.000 --> 00:50:17.000
4000 members.
794
00:50:17.000 --> 00:50:18.000
Wow, that's incredible.
795
00:50:18.000 --> 00:50:19.000
Congrats on that.
796
00:50:19.000 --> 00:50:20.000
How do you manage that?
797
00:50:20.000 --> 00:50:23.000
Hey, man, I told you I'm a good delegator.
798
00:50:23.000 --> 00:50:24.000
Yeah, yeah, yeah.
799
00:50:24.000 --> 00:50:25.000
Fantastic.
800
00:50:25.000 --> 00:50:26.000
Well, that's awesome.
801
00:50:26.000 --> 00:50:27.000
I'm assuming one in every state.
802
00:50:27.000 --> 00:50:28.000
Is that kind of the plan?
803
00:50:28.000 --> 00:50:29.000
Or is it not that?
804
00:50:29.000 --> 00:50:31.000
Well, I do want to have one in every state.
805
00:50:31.000 --> 00:50:32.000
Okay.
806
00:50:32.000 --> 00:50:33.000
Okay.
807
00:50:33.000 --> 00:50:34.000
Okay.
808
00:50:34.000 --> 00:50:35.000
Well, fantastic.
809
00:50:35.000 --> 00:50:36.000
Well, Dan, this has been absolute pleasure.
810
00:50:36.000 --> 00:50:37.000
Really appreciate you coming to the show.
811
00:50:37.000 --> 00:50:38.000
And folks, please go visit him at the different websites.
812
00:50:38.000 --> 00:50:40.000
I'll put that in the show notes as well.
813
00:50:40.000 --> 00:50:44.000
And also put a link to the Dan's email address that you can reach out to him
814
00:50:44.000 --> 00:50:47.000
for that keynote speech that he recently had on his investor summit.
815
00:50:47.000 --> 00:50:49.000
So Dan, pleasure having you.
816
00:50:49.000 --> 00:50:50.000
Appreciate it, my friend.
817
00:50:50.000 --> 00:50:52.000
And look forward to staying in touch with you.
818
00:50:52.000 --> 00:50:53.000
Okay.
819
00:50:53.000 --> 00:50:54.000
You too, Kevin.
820
00:50:54.000 --> 00:50:55.000
Thank you for having me.
821
00:50:55.000 --> 00:50:56.000
Congratulations.
822
00:50:56.000 --> 00:51:01.320
Now you've got more of the best tricks of the trade in building massive amounts of passive
823
00:51:01.320 --> 00:51:03.280
income from real estate.
824
00:51:03.280 --> 00:51:08.000
For more amazing resources, visit real estate investing for cashflow.com.
825
00:51:08.000 --> 00:51:10.480
We'll see you next Monday morning.