Walk-Through Disrupt Equity’s Multifamily Investment Criteria

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Accredited VS Sophisticated Investors: What This Means for Multifamily Investors!​

VIDEO TRANSCRIPTION

00:00
sunday monday we are going live
00:03
disrupt tv studios houston texas
00:06
and this is money mondays when do we do
00:10
this man
00:10
every monday 3 30 central so welcome
00:13
back
00:14
everybody almost going on a year i know
00:16
we were saying we’d pick a better day
00:17
than a monday and we’ve kind of stuck it
00:19
out with mondays well now it’s our
00:20
namesake so like we have to almost stick
00:22
to it right money one day doesn’t have
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the same bell
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not as much not as much all right so
00:27
what are we talking about today man
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we are talking about a basically doing a
00:31
case study on an asset that we’re
00:32
closing on here
00:34
on wednesday oh so a lot of people
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always ask you know what do you look for
00:37
in a deal
00:38
what makes a deal all that other stuff
00:40
so i figured we’d kind of really talk
00:42
about a real deal right what better than
00:43
a real deal and then yeah we could kind
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of talk through what we
00:46
saw about it what we liked about it what
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we didn’t like and you know rock and
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roll
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absolutely so for people that don’t know
00:53
right you know we’re obviously
00:54
in the business of buying apartments we
00:57
hadn’t buy anything
00:58
since q4 of 2019 obviously covid
01:01
you know uh took a little bit of window
01:03
out of our sales but we were still
01:04
looking on the back half of the year
01:06
um got brought in to partner on this
01:08
deal kind of took the lead on it
01:09
um loved a lot of things about it so
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it’s called porterwood
01:13
is in porter texas which is north of
01:15
kingwood
01:16
uh which is a suburb of houston so right
01:18
here in our backyard takes us about
01:20
30 minutes to get there from where we’re
01:22
at currently
01:24
so one thing that we’re kind of looking
01:25
for in 2021 and beyond is
01:28
you know how can we buy assets that are
01:30
closer to where
01:31
our management company is at right here
01:32
in texas we love a lot of the
01:34
fundamentals that are here in texas
01:36
we love a lot of the fundamentals that
01:37
are happening in certain parts of
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houston
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and this is one of the growing parts of
01:40
houston you know for anybody that’s
01:42
familiar with houston
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a lot of things are pushing out from the
01:45
woodlands conroe’s blowing up
01:47
new caney’s blowing up porter is just
01:49
south of new caney and there’s a lot
01:51
of big surprising factors really just a
01:52
big highway that went in there right
01:54
that’s really that
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there’s a segment of a highway actually
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for those of you that don’t know
01:57
houston’s
01:58
you know it’s really loop centric right
01:59
yeah we got our loops this will be a
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loop that is pretty much
02:02
bigger than driving from houston to san
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antonio that’s how long it
02:07
change it’s is parkway that came in
02:09
recently and again you know with that
02:10
you have more access now you can get
02:12
from
02:12
part you know really from the woodlands
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over to duquesne
02:16
in about half the time than you used to
02:17
that’s about way less i mean i’d say
02:19
it’s probably went from
02:20
you know 30 minutes down to 10. so you
02:23
know i mean people can
02:24
live here which is going to be cheaper
02:26
than living in the woodlands which is a
02:28
more affluent part of the city than than
02:30
porter would be
02:31
but work out in the woodlands which is
02:33
where hp is which is where exxonmobil is
02:36
which is where a lot of fortune 500
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companies are
02:38
are located at right so right up the
02:40
road from here but 136 unit
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class b property disclaimer i’m just
02:45
going to kind of go through it right you
02:46
know obviously we’re just
02:47
we’re giving this as education right you
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know do not take any of this
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is indicating not raising any money we
02:52
are not raising the money we’re really
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just talking about things
02:55
this deal is going to close here but
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it’s just really talking about you know
02:58
the pros and cons of an asset like this
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and clearly the location is one of the
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pros right
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i’m going to keep drilling that into
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your head right real estate is location
03:06
location location right people need to
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understand that it’s not all about the
03:08
numbers too
03:09
you have to take some of these other
03:10
things into into contacts right so
03:13
executive summary this was from our
03:15
pitch deck folks
03:16
so feel free to steal some of this and
03:18
you know i mean if you want you know
03:20
obviously it’s not going to be
03:21
indicative of your deal but you can kind
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of see how we kind of position things
03:24
right so
03:25
once again superb location you know it’s
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right up the road of a big
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i would say mixed-use development
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there’s going to be houses there’s
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already retail and restaurants you know
03:35
there’s schools there’s all these things
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that are happening right
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and within a two mile radius it’s a
03:40
hundred and eight thousand median income
03:42
right within a one within a one mile
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it’s over a hundred thousand
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so typically what people know us to
03:48
bought in the past were these value-add
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plays
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where median income in those areas are
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usually 30 40 50 000
03:55
right you know i mean we’ve had a couple
03:56
that have been more than that but we’ve
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never had anything
03:58
that was this high right and so this is
04:01
an affluent part of the
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of the city right so that means what
04:04
does that mean that means you could
04:05
potentially raise rents without getting
04:07
into trouble
04:08
right because people can afford them in
04:09
this area right
04:11
but this was a true value-add play yes
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you know
04:14
institutionally owned for 27 years and
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this is where you know it’s important to
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know who you are buying from
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absolutely that’s something that we
04:21
learned the hard way
04:23
early on you know you start to learn who
04:24
you buy from and how well they take care
04:26
of an asset and that
04:27
therefore impacts your business plan
04:29
right and so this deal is owned by a
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company that’s owned it for 27 years and
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happened to be one of the largest owners
04:34
of real estate in the country
04:35
right so guess what things are pretty
04:37
much taken care of right it’s not even a
04:39
deal if they’re planning to sell to
04:40
where they stop spending money on it
04:42
two years ago right i mean it’s really a
04:44
case that they’re well capitalized right
04:46
you know but they they only
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they they fix things that needed to be
04:48
fixed which is what we’re look what
04:50
we’re talking about
04:51
that does not mean that they upgraded
04:53
things right so
04:55
there was a few units that had had some
04:57
upgrades you know various degrees they
04:59
put in a technology package which we’re
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going to continue
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you know they had done some roofs they
05:04
had done a few other things that they
05:05
needed to do just to kind of keep up
05:06
with the market but
05:07
they were not a trailblazer by any means
05:09
right so it’s nice to have an
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institutionally owned asset that’s been
05:12
owned this long
05:14
you know but still have some that has
05:15
some meat on the bone right you know
05:17
it’s kind of a little bit of a unicorn
05:18
deal yeah that’s one of the reasons why
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we liked it
05:21
right you know stable you know 93 i
05:23
think they’re currently at 95
05:25
occupant yeah occupancy right now which
05:27
is pretty good and
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they did a really really great job and
05:30
uh during covid right you know the
05:32
majority of their tenants i think
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when we when we toured it there was
05:35
three people that were uh you know
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delinquent with the rent i think they’ve
05:39
since got them all caught up
05:40
right you know so this was just a unique
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deal
05:43
and a unique area and and uh the
05:45
management company had done a fairly
05:46
good job of
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making sure that the tenants that were
05:48
in place were going to be able to pay
05:50
the rent
05:51
right you know so here’s some indicative
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interiors if we want to put this up on
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the screen
05:55
uh shanna you know as you can see i mean
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it’s
05:58
it’s not dated you know not too too
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dated right you know but there’s
06:02
definitely some
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things that we’re going to do right you
06:05
can add some backsplash you can add some
06:07
color to those cabinets right
06:09
you know the the flooring probably needs
06:11
to be you dragged into the
06:13
you know 20 21 right you know there’s
06:15
some things that we can do to modernize
06:17
just the word
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boom that’s why i love keeping this guy
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around he can always you can always
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answer those when i’m trying to find
06:23
those words can answer all the hard
06:24
questions
06:25
there you go there you go but we’re
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going to add some fixtures
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you know whether it be plumbing and
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lighting fixtures those nice little pops
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that don’t cost a lot of money
06:33
backsplash doesn’t cost a lot of money
06:34
folks it’s probably a three or four
06:36
hundred dollars
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installed item that people in this class
06:40
b
06:41
uh tenant profile are looking for these
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days it’s almost it’s almost a mandatory
06:44
item
06:45
right you know um the color schemes you
06:47
know you’re going to be doing your grays
06:48
and your
06:49
you know that type of you know kind of
06:51
more modern color scheme with a lot of
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the stuff
06:54
um you know and then on top of it we’re
06:55
going to continue to do the technology
06:57
package which is
06:58
something that people should really take
06:59
uh you know into consideration
07:02
when they’re going to be doing unit
07:03
upgrades from here on out people
07:05
are staying at their their units a lot
07:07
longer right they’re working from the
07:08
house
07:09
you know there’s a lot of more tech
07:11
savvy younger folks
07:12
that are going to expect this stuff so
07:14
you know you can get stuff like a nest
07:16
thermostat or you can get
07:17
august locks or you can put usb ports
07:19
into
07:20
you know um some of these uh you know
07:23
electrical outlets
07:24
and people are going to appreciate that
07:25
stuff you know that is what they’re
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using in their day-to-day items
07:28
and if you don’t have it you’re going to
07:29
be falling behind right it’s it’s really
07:31
going to date your property and all that
07:32
stuff that i just mentioned folks
07:33
that’s three 400 bucks and you can
07:35
probably get a 30 to 40
07:37
pop on it and call it the tech package
07:39
so your payback’s a year
07:40
not a bad roi if you ask me right no no
07:44
so exteriors once again just kind of
07:46
tired
07:47
you know they had painted this old
07:50
you’re gonna probably laugh at me
07:51
i always i always kind of get onto
07:53
people that have these these old you
07:54
know playgrounds or just
07:56
you know where they kind of put lipstick
07:57
on a pig modernized it for them
07:59
they modernize it all right that is the
08:00
one that’s kept a fresh coat of crazy
08:03
paint on it and
08:04
but it’s still 30 years old so you know
08:06
but
08:07
based on this tendency we found out
08:09
right which is what you do through your
08:10
your lease audit and just kind of doing
08:12
due diligence there’s not a lot of kids
08:14
here
08:15
right so this big playground that’s ugly
08:17
and it’s old
08:18
is taking up a lot of real estate and
08:20
it’s not even really being used
08:22
so we’re looking at ways that we can
08:24
repurpose that space right
08:26
you know for people that are maybe more
08:27
single or a little bit older and maybe
08:29
don’t have kids
08:30
so you got to think about that right
08:31
whenever you’re doing your due diligence
08:33
it’s not all about just making sure that
08:35
there’s not bad stuff that’s happening
08:37
that’s first and foremost while you’re
08:38
doing due diligence but you also need to
08:40
be the visionary
08:41
you need to be the picasso right how can
08:43
i make this space work
08:45
how can i increase the value of this
08:47
asset right
08:48
and i look at i’ll take the picture of
08:50
the uh the signage here right
08:52
you know first time out to uh to the
08:54
property i drove right past the property
08:56
right this is not this is kind of tucked
08:58
back and shannon if we could put this up
09:00
on the screen
09:01
this signage is kind of tucked back yeah
09:03
you know and you really can’t there’s a
09:05
lot of traffic there you need
09:06
there’s a and i drove right past it
09:09
because i didn’t even realize that it
09:10
was the property
09:12
right so you know i mean how could we
09:13
increase the the visibility of that
09:15
right we could probably do some
09:16
landscaping
09:17
we could point some lights to it we can
09:19
also have additional signage at the
09:22
entrance and excesses
09:23
which is what we are going to do right
09:25
so you want to enhance things right we
09:26
are adding value to
09:28
the property as well as to the tenants
09:30
that are living there right
09:32
so rent cops right it’s all about the
09:33
numbers you know so you have to have
09:36
some you know achievable rent increase
09:39
that you could potentially get right
09:41
you know in this case you know compared
09:43
to the comps that we saw on the market
09:45
the one bedrooms had 119 delta the two
09:48
bedrooms had a 260
09:49
delta now people will say oh well no
09:52
wonder the deal worked here
09:53
probably increasing rents by 119 to 260
09:56
bucks
09:56
we absolutely did not do that in fact on
10:00
our underwriting i think we had a 35
10:02
increase
10:03
which was what it was right you know we
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put the slide in to show
10:08
our investors that there is potential to
10:10
get this high
10:11
right you know that is not what we’re
10:13
going into whereas i’ve seen other
10:15
syndicators where they pop
10:16
you know 150 200 300 sometimes
10:20
and unfortunately now we should do ben
10:22
no that’s not what you should do because
10:23
you want to be conservative right you
10:25
know it’s all about
10:26
under promising and over delivering
10:28
right now if we come in and
10:30
fundamentally about performing right
10:31
well yeah but i mean instead of say the
10:33
35
10:33
we find out hey we’re getting 75 to 100
10:36
all in
10:37
day one great that’s gravy for us and
10:40
our investors
10:41
right but you want to make sure that
10:42
your comp set can support your business
10:44
plan
10:45
right you know but i i show this just to
10:47
kind of give you guys some perspective
10:48
right
10:49
market demographics once again location
10:51
location location
10:52
within a one mile radius it’s a hundred
10:54
thousand dollars median household income
10:57
that’s pretty high right you know the
10:59
medium home value is 231 so there’s a
11:01
good
11:02
there’s a good delta there right you
11:03
know so you can you can still encourage
11:05
people to rent
11:07
right where home prices aren’t too too
11:08
low um but income is high
11:11
right so you’re kind of in that sweet
11:12
spot you know there’s also a lot of
11:14
population growth that’s happening in
11:15
this area like we had mentioned
11:17
woodlands is
11:18
a affluent part of uh northern houston
11:22
and things are being overbuilt out there
11:23
so they’re pushing out
11:25
kind of to the northeast which is where
11:26
this new caney porter
11:29
kingwood area is and kingwood’s been an
11:31
established neighborhood for quite some
11:32
time so
11:33
there’s things converging in this area
11:35
so you really need to know houston
11:36
that’s what i always tell people people
11:38
are like oh i used to i don’t know about
11:39
doesn’t it flood doesn’t it do this
11:41
right yes some of those things have
11:43
happened in the past but
11:44
ultimately it’s a modernized city it’s
11:46
got top two
11:48
population and job growth for the next
11:50
decade right we’ve got fortune 500
11:52
companies
11:53
we’ve got great education systems we’ve
11:55
got low cost of living here right
11:58
and so people continue to move to
12:00
houston but you just need to know which
12:01
pockets to live in
12:02
right and this is one of them
12:06
valley ranch town center this is one of
12:08
the developments that’s literally
12:09
right across as you can kind of see down
12:11
at the the top
12:12
right photo you can see where the
12:14
property is located at we’re right
12:15
across the street
12:16
from this big mixed use development that
12:19
continues to
12:20
you know um add square footage in
12:23
restaurants so this is what you’re
12:25
what your tenants are looking for story
12:26
here is location location location
12:28
and you know quality of the asset right
12:30
and ultimately the price point made
12:31
sense i mean we’re buying an attractive
12:33
price point
12:34
relative to what’s going on that area so
12:35
again it’s one of those deals that has a
12:37
lot going for in the long term
12:38
right it’s not a quick you know hey day
12:41
one
12:41
it’s going to mint a ton of cash but
12:43
it’s hey there’s a clear path to growth
12:45
here a clear path to performing and
12:47
getting yeah this is
12:48
i i think people need to realize what’s
12:50
happening in the market right
12:52
you’re now look you’re now batting for
12:53
singles and doubles and triples right
12:55
you’re there’s no longer going to be
12:56
these home run
12:58
huge appreciation over the 18 months
13:01
right so you need to find cleaner deals
13:03
and better areas
13:04
that you can increase the value on and
13:06
this is one of them
13:07
right and so this next slide once again
13:09
kind of hits the the nail on the head
13:11
which is
13:12
location location location as you can
13:14
see there’s a lot of groceries a lot of
13:16
entertainment there’s a lot of retail
13:17
there’s a lot of restaurants
13:18
right our starbucks our favorite
13:20
starbucks right you know it’s actually
13:21
really the only reason why we bought the
13:22
place
13:23
you know it’s right up the road she had
13:24
us laughing and she does that it’s
13:26
probably
13:26
partly true very true if we’re gonna
13:29
drive out there it has to have
13:31
it has to have a starbucks that’s close
13:32
right so bottom line
13:34
doesn’t have to have a starbucks next to
13:36
it that’s not our only litmus test
13:38
but if it does help go a long way it
13:40
checks a little bit of a box for us
13:42
right
13:42
you know sub-market economic drivers you
13:45
know for people that know houston
13:46
they’re going to kind of know where some
13:47
of this place what this stuff is but
13:49
generation park one of the biggest
13:51
commercial developments in the country
13:53
right now
13:54
is happening about 20 minutes away the
13:56
other one is 15 minutes away in the
13:58
woodlands which is called spring woods
14:00
village
14:00
which is where hp relocated from
14:03
california for our california viewers
14:06
and where exxon mobil is headquartered
14:08
right amongst
14:09
several other big big companies right
14:11
it’s a big kind of
14:12
um you know business park where a lot of
14:15
these people have set up and that’s
14:16
right there in the woodlands
14:18
you know so once again because the grand
14:21
parkway has been put in
14:22
you can live in a cheaper apartment in
14:24
porter
14:25
and commute out to these places so
14:28
employment drivers like we talked
14:30
about generation park spring wood
14:31
village iah
14:33
is is something that’s within 10 or 15
14:35
minutes away as well
14:36
which is our big international um you
14:39
know airport as well so
14:41
you know everything is pretty close to
14:43
where the the location is
14:45
the opportunity right you know we
14:47
continue to upgrade the the units like
14:49
we had talked about
14:50
you know burnoff lost a lease you know
14:52
we’re gonna expand the amenity package
14:54
you know we’re gonna improve amenities
14:56
and the curb appeal right like i talked
14:57
about the signage
14:58
we’re going to upgrade the office we’re
15:00
going to add fitness
15:01
equipment i put in upgrade the
15:03
playground i might end up
15:04
you know just adding additional fitness
15:06
equipment or who knows i might not put
15:08
anything in there i might just saw it
15:09
over and
15:10
you know be more green space for our
15:12
tenants that have dogs or just want to
15:14
spend some time outside
15:16
um you know street side cedar plank
15:18
balconies as anybody knows on our rehabs
15:20
we love that
15:21
that that horizontal cedar plank you
15:23
know and i think
15:24
we would continue that trend here you
15:26
know it gives a nice modern look to the
15:28
exterior of the property
15:30
right you know once again this has
15:32
already been funded
15:33
done but you know we wanted to kind of
15:35
show you some of the things that we
15:36
obviously pitch to our investors
15:38
as you can see year one two three four
15:40
five six seven
15:42
is a seven year play you know we’re very
15:44
opportunistic
15:45
though right you know so if an
15:47
opportunity comes along and say you’re
15:48
four or five
15:50
and it makes sense for us to exit the
15:51
property we’ll go ahead and sell we’re
15:53
not
15:54
super super long-term owners but as we
15:56
kind of mature in the business we like
15:57
to hold on to these deals for a little
15:58
bit longer
15:59
right you know it’s just the market’s
16:00
been crazy so this kind of gives you a
16:03
breakdown of where the the
16:04
the uh cash on cash would be total
16:06
returns would be
16:08
you know ultimately we got we came in at
16:10
a six
16:11
uh percent you know um reversion cap
16:14
right so you know i mean we don’t want
16:15
to bore you with numbers right but
16:16
ultimately
16:17
what there’s a story right we’re walking
16:19
through the story of the location
16:21
the upgrade plan you know what we’re
16:23
doing on the renovations and ultimately
16:25
what
16:25
the return story yeah right the profile
16:27
of the deal yeah what does that equate
16:29
to
16:29
right you know and this is like i said
16:31
this is a nice double triple play
16:33
you know um you know for people that are
16:36
kind of you know this is not a home run
16:37
deal
16:37
never has been you know but this is a
16:40
good property that’s got a lot of
16:42
long-term
16:43
strong deals yeah strong return strong
16:45
story so you know that’s the kind of
16:46
stuff you look for in a deal right i
16:47
mean
16:48
you know we’re big on location we’re big
16:50
on
16:51
the quality of the asset yes we’ll buy a
16:54
deal in a worse location right but we
16:55
you know we there’s again there’s so
16:57
there’s something about risk-adjusted
16:59
returns right and really being conscious
17:01
of that as we’ve grown
17:02
you know you start to learn risk
17:03
adjusted a lot more as well as just the
17:06
time adjusted right like the effort that
17:07
it takes that’s actually a point i think
17:09
let’s let’s
17:10
let’s pause there and let’s talk ben you
17:11
used to have hair at some point then we
17:13
did it he likes to joke
17:14
and we did it and then lost it all at
17:16
some point in the in the in the distant
17:18
distant past
17:19
yeah i had hair but no it wasn’t
17:21
multi-family
17:22
i didn’t know you did your first deal i
17:24
was bald before i i got into real estate
17:27
but it certainly hasn’t helped my stress
17:29
level some of these deals
17:30
and i think as we’ve grown in this
17:33
business we’ve looked for
17:34
not necessarily easier plays but plays
17:37
that you know
17:38
we’re looking at it more long term right
17:39
whereas some of these you know you got
17:41
30 down units you’re almost flipping the
17:44
property
17:44
right you know and it takes a lot of
17:47
work it’s very capital intensive
17:49
and it’s very stressful right whereas
17:51
this one’s a great lay-up play
17:53
you know we can come in there we can
17:55
increase the value and we can sit on it
17:56
and just let the
17:57
you know let the appreciation happen
17:59
naturally and get some cash flow from it
18:01
so that’s the deals that we’re kind of
18:03
typically looking at which is going to
18:05
be 80s 90s and 2000s
18:07
properties in texas and in georgia and
18:09
florida and this really hit that
18:11
mold the fact that it was 30 minutes
18:13
away uh from our office it’s actually
18:16
five minutes up the road from our asset
18:17
manager you know i’m 20 minutes away
18:20
where i live
18:21
you know so it’s not bad it’s easy to
18:22
get to right now
18:24
i mean logistically you got to think
18:25
about that and we always tell the story
18:26
about atlanta too
18:28
why did ben and ferris go out to atlanta
18:29
well not only did it have great
18:31
economic drivers that were happening
18:33
there but it was actually easy to get to
18:35
there was 12 flights from southwest
18:38
southwest areas
18:39
right now i was wondering i want to know
18:40
right yeah because we haven’t been able
18:42
to get out there as easily because
18:43
coveted a lot of flights got axed but
18:44
let’s see if
18:45
there’s 12 flights a day so me and
18:47
ferris would take either the 5 30 or the
18:49
6 o’clock
18:50
in the morning flight out to atlanta
18:51
we’d get out to our properties about 9 9
18:53
30
18:54
we’d see all three to four when we had
18:56
four
18:57
um and then we would take the 8 p.m
18:59
flight back to houston so it’s a one-day
19:01
trip yeah don’t get me wrong it’s a long
19:02
day
19:04
but at the end of the day we could do it
19:05
in one day the earliest flight they have
19:07
now
19:08
in a month from now is seven o’clock the
19:10
earliest direct flight so seven o’clock
19:13
gotcha so we’ll be in atlanta ten be at
19:15
the properties eleven fifteen
19:16
so it’s a little you know a little the
19:18
latest
19:19
they’re gonna lie do they have a seven
19:21
they do have an a55 so we can actually
19:22
do that we might be able to get back to
19:24
doing the one
19:24
they don’t have the seven anymore they
19:25
have an a55 so we could do it oh sorry
19:27
sorry that’s right by the way no it’s
19:28
all right seven o’clock seven o’clock
19:30
all right so it might be a little bit
19:31
i’ll do it but it’d be tight right like
19:32
you know
19:33
but you’d be on site for about six hours
19:35
which is enough but
19:36
maybe it’s gonna be 10. but bottom line
19:38
is to sell one deal so one less to tour
19:39
around so
19:40
and we’ll tell people about that later
19:42
on we’ll have another case study right
19:43
about
19:43
about a sale that we might potentially
19:45
be doing but you know
19:46
um when when you’re looking at deals
19:48
though folks the the meta point here is
19:50
that you have to look at
19:52
how logistically easy is it to get to
19:54
right because things will pop up
19:55
you will have to meet a contractor out
19:57
there you might have to beat the city
19:58
out there you might have to beat
20:00
your property management company out
20:01
there right if it’s going to take you
20:02
two or three days each way to get there
20:05
you know maybe you should think about a
20:06
little bit easier property to get to
20:08
right and so for us 30 minutes away you
20:10
know even if something happens right now
20:12
i can still get out to the property
20:13
before the end of the day
20:14
so something to think about but yeah so
20:16
wait i blew through that no
20:18
it took a little bit longer when we were
20:19
pitching this to our investments oh
20:20
we’ve got we’re good on timing seven
20:22
more minutes so we’re perfect
20:23
so monday mondays we do this every
20:24
monday 3 30 central
20:27
we talk about all sorts of topics today
20:28
we are talking about a real case study
20:30
on a deal that’s closing this week we’re
20:31
excited about so yeah figuratively
20:32
talking
20:33
we always get asked what do you look for
20:34
in a deal what makes a deal good how do
20:35
you pitch it so we kind of hit those key
20:37
points
20:37
and so that’s kind of the goal for today
20:39
but if you have ideas for future topics
20:41
let us know
20:41
if you have questions we’re happy to
20:43
kind of do q a right we will transition
20:44
here to the q and a section right now
20:46
and let’s see any comments that came in
20:48
iggy says hi hello hey
20:50
hey ronnie says what’s up what’s up
20:52
honey what’s going on
20:53
it says hello hello christian folk hello
20:55
what’s up guys and then leticia says
20:57
interested
20:58
unfortunately we’re not raising we’re
21:00
not ready
21:03
it’s done so but it really is meant to
21:06
be just kind of a case study yeah it is
21:07
that’s exactly what it is folks right
21:09
you know so there’s a case study
21:10
but indicative of other deals that we’re
21:13
probably going to be doing in the future
21:14
right you know but let’s let’s
21:16
let’s recap what we’re looking for right
21:19
location location location whether it be
21:21
the city that it’s in
21:22
or within the city right houston’s a big
21:25
city
21:25
for people that don’t know it’s like
21:27
very big not like
21:29
just population wise like it’s just long
21:31
and huge
21:32
land like we’ve got land and land and
21:34
land and land
21:35
and so within that there’s pockets of
21:38
places that you want to be and then
21:40
there’s pockets
21:41
where you don’t want to be right and i’m
21:43
not going to i’m not going to be in any
21:45
pocket at the right price
21:46
well but you know how that is right now
21:48
right there’s pockets you want to really
21:49
want to be in and there’s pockets you
21:51
want to be in less
21:52
that’s yeah i guess yeah i like it i
21:56
like it
21:57
right you know but so you have to really
21:59
know houston
22:00
but you know my point is you have to
22:02
understand the city and what’s happening
22:03
what are the economic drivers there are
22:05
there’s a population and job growth
22:07
that’s happening
22:08
if there is right is it in the area that
22:10
you want to be in
22:11
right you know because those two things
22:12
don’t you might be on the south side
22:14
where
22:15
all the growth is on the north side of
22:16
town and we’ve seen that quite a bit
22:18
actually
22:19
you know um you know atlanta is a great
22:21
example of that where
22:22
southside’s great for certain things but
22:25
most of the growth is going to be in the
22:27
north side of atlanta
22:28
yep right you know so you’re thinking
22:30
about location
22:32
you’re thinking about how can my how can
22:34
you increase the value right
22:36
and that is through you know upgrades
22:38
and repairs
22:39
you know and adding amenities and also
22:42
just financially right you know is there
22:44
a
22:44
is there a place where i can increase
22:46
rents or increase revenue
22:47
or potentially streamline my expenses
22:50
right
22:51
you know and then all of those things
22:53
kind of equate to
22:55
an exit strategy and what you’re going
22:56
to get in terms of returns
22:58
right so you have to play all of these
23:00
things into play
23:01
um and see if you got a good deal and we
23:04
look at
23:04
i would say 20 or 30 deals a month on
23:07
average how many deals man
23:09
is a real symptom no it is ben’s taking
23:11
medication on it
23:14
so that’s a thing it’s crazy it’s crazy
23:16
no but
23:17
you have to look you have to kiss a lot
23:19
of frogs you have to make a lot of
23:20
offers you’re going to have to
23:21
do a lot of property tours um this was
23:24
actually an interesting play because we
23:25
had seen this deal
23:26
i remember we saw this back in the
23:28
summer yeah right and then somebody else
23:30
we were chasing something else and so we
23:32
kind of lost interest and then
23:33
somebody else that we know was chasing
23:35
this and brought us in
23:36
um you know but that’s what it’s all
23:38
about it’s about partnerships right and
23:40
i think people need to understand we go
23:41
back to how do you add value for the
23:43
people that are
23:44
listening or viewing this right now
23:46
saying how do i get into this
23:47
you know not only passively but i want
23:49
to be the one you know
23:51
uh putting the deals together you got to
23:53
add value so maybe
23:54
you’re the guy or the gal that’s you
23:56
know in your city and you’re bird dog
23:58
and deals you’re talking with brokers
24:00
you’re finding opportunities
24:02
right then you got network and and find
24:04
that potential partner that could
24:05
probably bring the equity
24:07
so having said all that
24:10
we got our tool kit folks yes i’m not
24:13
gonna get i’m not gonna give up on the
24:14
tool kit
24:15
every every week i’m gonna be talking to
24:18
it right as people ask for things rather
24:20
than us emailing it back
24:21
we figured hey let’s consolidate this
24:23
and save the time
24:25
so much information on these toolkits so
24:27
check it out disrupt equity.com
24:29
toolkit it’s got our checklist it’s got
24:32
our webinars it’s got our podcast and
24:34
it’s got a lot more
24:34
shanna does a great job curating that
24:36
and keeping that up if there’s more
24:37
things you want to see on there let us
24:39
know
24:39
yeah absolutely you know we’ll put
24:40
anything that makes sense on there right
24:42
you know but it’s all in one place
24:44
you know so we’re to the finally to the
24:47
q
24:48
a spot anybody have any questions right
24:50
this is a real
24:52
world deal folks this is not something
24:54
mythical that we’re just you know that
24:55
we’re potentially underwriting
24:57
so it’s a good opportunity to ask
24:58
questions comments questions ask us we
25:00
will
25:01
talk to those jefferson says hey there
25:04
ben ferris hello hello hey hey
25:06
all right let’s see so if we have any
25:08
more questions answer them now otherwise
25:10
forever hold your piece
25:12
we will call it a wrap here so any
25:15
questions comments
25:17
issues you want to talk about my hair
25:18
ben’s hair or lack of hair
25:20
or you know our coffee we always have to
25:22
have a bald joke get every single one of
25:24
our money money two of them in this time
25:26
i know apparently this is we’re trying
25:27
to fill
25:28
some time here all right but we want
25:29
this to be interactive folks so if
25:30
you’ve got questions
25:31
we don’t have to talk about this deal we
25:33
could just talk about commercial real
25:34
estate in general being an entrepreneur
25:36
ask your questions now um for people
25:39
that want to know what are we talking
25:40
about next week right i’m talking about
25:41
the tools and the systems
25:42
to streamline your commercial real
25:44
estate business right so
25:46
you know this is a topic that we hold
25:49
dear and near
25:50
you know we’ve tried to be on the
25:52
bleeding edge hence our name disrupt
25:54
it’s a very tech term um ferris has done
25:57
a great job
25:58
systematizing and tooling us out with
26:00
all just the technology that he’s aware
26:02
of
26:02
being the next microsofter yeah it’s
26:04
important part of the business
26:06
um you know and i think people need to
26:07
realize to take it to the next level
26:10
you’re gonna have to have technology you
26:12
know you’re gonna have to have systems
26:13
you’re gonna have to have processes
26:14
you know you have to treat this not like
26:16
a side hustle
26:18
not like oh i’m gonna have one deal then
26:19
i’m gonna be able to retire
26:21
you have to realize you have to build it
26:22
out and it has to be a real business and
26:24
real businesses need to have this
26:26
people that’s ever been in corporate
26:27
america right those people started off
26:29
without all the departments and the
26:30
processes that you’re so familiar with
26:32
now
26:32
and you have to build the same thing
26:33
with your business right now so
26:35
uh tune in then also reach out to us if
26:38
there’s any topics that you want to talk
26:40
about
26:40
you know we don’t want to have to
26:41
continue to keep coming up with all this
26:43
stuff
26:43
we want it to be interactive so if
26:45
there’s things that are passionate uh
26:47
we’ll do some more underwriting here i
26:48
think over the next couple weeks i know
26:49
people like that type of stuff
26:51
and that will be some hypothetical deals
26:54
but you’ll kind of once again
26:55
see what have ben and ferris looking at
26:57
when we’re looking at the numbers
26:59
and i think people like that type of
27:00
stuff absolutely that’s all i got
27:03
questions go ahead and ask them
27:04
otherwise oh we got one
27:06
from nelson besides taking seminars
27:08
listening podcasts
27:09
watching you guys what else can i do to
27:11
learn multi-family investing
27:13
good question i like to say you know get
27:15
educated and hop
27:16
in there and get some experience and so
27:18
yeah you know the easiest way to start
27:20
is investing passively in people’s deals
27:22
right i did that yeah my first you know
27:23
invested in several people’s deals to
27:24
see
27:25
you know how do they pitch it what do
27:28
they ask for
27:29
how do they communicate what do they
27:30
communicate before what do they
27:31
communicate after was it comfortable
27:33
wiring them the money or not right you
27:34
learn a lot by being an investor
27:37
now don’t invest in a deal that you
27:38
don’t think has any merits that’s
27:40
separate problem
27:40
but i think investing is a really easy
27:42
way most people get started and then
27:43
from there right you start to learn okay
27:45
i could do that right and you know
27:47
getting educated obviously you kind of
27:49
hinted at and then
27:50
hop in and figure it out go it’s a team
27:51
sport right there’s a lot of roles
27:54
yeah you’re not gonna know everything
27:55
nor do you want to just go do it all
27:56
yourself go find operators and figure
27:58
out a way to add value to them here yeah
28:00
and i’d say one other thing to add you
28:02
understand how underwriting works right
28:04
because even if you’re a passive
28:05
investor
28:06
versus a more active investor like me
28:08
and ferris are you need to understand
28:10
how the numbers work right so get
28:12
familiar with a spreadsheet get
28:13
you know build yourself a model or
28:15
there’s a lot of them out there a lot of
28:16
great people have provided models
28:18
there’s going to be a little bit of a
28:19
cost
28:20
understand how the model works and
28:22
understand how the numbers that you’re
28:23
getting from these operators that you
28:25
might potentially invest with
28:26
or from the brokers if you know how does
28:29
that all
28:30
mesh into returns that i’m looking to
28:32
get right so understanding the whole
28:34
underwriting analysis process is
28:37
probably a great next step if you’ve
28:39
if you listen to a lot of podcasts
28:40
you’ve been to a lot of webinars you’ve
28:42
listened to us
28:43
you’ve maybe been to some networking
28:44
events i would say that’s the next step
28:46
get familiar with the numbers because
28:48
even if you’re a passive investor don’t
28:49
want to ever do anything that we have to
28:50
do
28:51
you want to hold on to your hair great
28:53
you still need to understand how the
28:54
numbers work and see
28:55
if this is going to be a good deal for
28:56
you right so i take that and then from
28:59
there
29:00
you start hopping into a more active
29:01
role i told you yep
29:03
all right well then let’s go ahead and
29:04
call it a wrap cool all right next week
29:07
tools and systems monday 3 30 central
29:11
all right

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