Commercial Real Estate Investing with Don and Eden

On today’s episode, our guest Carlos Gutierrez is based out of South Carolina. He started flipping homes and eventually made his move to commercial real estate. He started with a 20 unit deal and since then has doubled his success with recent deals. He has an avid passion for motorcycles and he owned a shop Deltona, FL. 

In today’s episode, Carlos discusses how he entered the real estate game, details on his first house flips, how he found his first 20 unit deal and his future plans. He also shares with us, his goal with multifamily properties and how he found his formula to success. 

Episode Highlights:

• Details on His 1st Deal
• Recent Deals on Multifamily Properties
• What Book Motivated to Enter the Multifamily Sector
• His Future Plans

Connect with Carlos:

Email: [email protected] 

Facebook: @CG4propertiesllc

Office #: 843-934-4250

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

TRANSCRIPTION

Intro: Hey guys, and welcome back. Today I am interviewing Carlos Gutierrez. I think Carlos and I share a similar path as well as so many other real estate investors. We both started in flipping homes and ended up deciding we want to scale up and start doing something bigger, hence getting involved in commercial real estate. So, I think this is the standard evolutionary process and progress of the typical real estate investor. And I'm sure many of you guys are either in this position or have been in this position in the past, which is why I think this episode is super important. So have fun, and let's get started.

Lady: Welcome to the commercial real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies.

Don: Hey, Carlos, it's nice to have you here. How are you doing today?

Carlos: Good. How are you guys doing?

Don: I'm doing just fine. I just got back from North Carolina looking at a property that is close to South Carolina, obviously, which is where you're based off. How are things in South Carolina? I can tell you that when I went to Charlotte right now when I was on the flight, there were a few tornadoes that just hit the city. So, when I landed in Charlotte, everything was like a mess. 

Carlos: I've lived here in Charleston probably for almost five years. We've had experiences with some close tornadoes in the area. When I mean close, I mean, like two or three miles down the road. 

Don: Wow. 

Carlos: Yeah, so we had one real bad one, think that September of 18. Took the roof off of the DMV building, a place that sells trailers and cars, flip trailers upside down. It was destroyed like Main Street, which is Machs Corner, which is five to 10 minutes up the street from where I live. I've lived through a lot of hurricanes because I'm originally from Puerto Rico and then grew up in Florida, so hurricanes don't bother me as much and you have time to prepare. And I tell you what, man, those tornadoes are scary. I was telling my wife the other day I was going to build one of those doomsday bunkers underneath our house. You literally have no time. And by the time they said there's a tornado on top of that you got less than a couple of minutes.

Don: Yeah, to get in right? So, I know you flip a lot of homes in South Carolina. Did you ever have any situation where you had one of your homes get impacts from any type of bad weather whatsoever?

Carlos: I've been fortunate enough to have any disasters hit any of our houses or any of our commercial property. We've been through hurricanes, we've been through tornadoes, we've been through some flooding and I haven't had anything major other than maybe a couple of our units getting flooded.

Don: That's a good thing. I know you flipped a lot of homes. So, you've done like over 20 flips, right?

Carlos: Yeah, yeah.

Don: So how about you tell us a little bit about that and how it started. How did you get into real estate and what was your first deal and how did they go?

Carlos: I lived in Florida for about 20 years and before my real estate career, I had a big passion for motorcycles, and I own a small motorcycle shop in Florida in a place called Deltona, Florida. So, it was a really good solid mom and pop shop business. We did great for about three to four years. And then, of course, the '08 recession happened. '09, I started seeing the wave of revenue was split in half the landlord of that we were in a retail shop and the landlord was, there are people closing up left and right. So, going through that recession, I learned that I was in the 'want' business and not the 'need' business, which taught us a real valuable lesson. You might want the motorcycle, you might want a jet ski or a boat but when it comes time to a bad recession or anything like that, you usually have to let go of all of it. I wasn't in the real estate business then but I did see it. I saw people that were living in $75,000 houses, which is kind of normal in that area, and selling it and buying a $200,000 still having the same job. I was just like this doesn't make sense. 

Sure enough, the recession hit '08 '09 and those same houses that were selling for $200,000 are now selling back to $75,000 and even less in some instances. So, I met my wife in Florida and we moved to Northern Virginia. She's from Northern Virginia. She wanted it to raise kids there. The economy was really bad in Florida so we moved up to the Northern Virginia/ DC area. I saw the real estate market being dilapidated in Florida. I was like when I get to Northern Virginia, I'm just going to start looking. I started looking with some realtors. They walked me away from a lot of houses, probably three or four houses that I could have made some good money, so I decided to get my real estate license. I said, if I'm going to do this, I'm going to do this myself, having that small mentality at that time, but I saw opportunity out there. I bought a HUD home for $68,000, put about 24 to 25 grand into it because I was doing a little bit of the work myself, which I don't recommend, but since it was my first I had more time than money, right? 

Don: And you wanted to learn. 

Carlos: And I wanted to learn. Yeah. And I knew a little bit about construction because I had done some construction before.

Don't: You invested $92,000 in the property, right?

Carlos: Correct. Yeah, I was able to actually talk to a broker that was like a hard money lender at the time. So, she did the loan and we worked everything out, was $92,000 into the property maybe a little bit more with some holding costs. And it took us about a month and a half to do all the renovations. Three days before Christmas, I put her on the market. And I had two or three offers within a couple of days. I ended up selling it for $142,000.

Don: $142,000. So, you cleared about $30,000 closing costs. Yeah, so that's a decent return. You can't get that done easily today.

Carlos: No. Back then, if I would have known what I had in my hand, I could throw a dart and hit a good deal back then. They were throwing houses. I didn't have enough money to buy them all.

Don: Yeah, didn't we all I mean, we're talking about a time where you could pick up a house for literally cents on the dollar. And I was thinking that if I lived this era all over again, I would have never sold anything. My biggest regret is selling real estate. Everything that I ever did in real estate that's one thing that I'm truly sorry about, the one mistake is I sold real estate. I should have never done that, I should always keep it. I don't believe in selling it. I started as a wholesaler. And so, at these times, we were making good money. 

And now in 2017 and 2016 people started hearing there's a lot of money in wholesale. And, and so they got into it. And there's also podcasts and audible and so people can get information. Very easy way. So, then it got saturated. I know what a flip is. So, you're averaging between $40 and, and $50,000 if you're doing well. So, you're making $200,000 a year, but that's the point where you realize that essentially you have a job and that's not going to get you anywhere. So then move up the ladder and start investing in some bigger things. That's when things change and you move up to commercial real estate, right?

Carlos: Correct. Yeah. So, my whole mentality from the beginning is kind of the same thing that you were just talking about is holding for the long term. But I wanted to flip houses to get a big nest egg to start putting it down on bigger properties and holding them for longer. I didn't want to hold single families for a long time, but I wanted to buy and hold multifamily. So that was the goal from the beginning. I read a book, a real good book back in probably '09. Dave Lindell's 'Multifamily Million.' 

Don: I went to a seminar. 

Carlos: Yeah, me too. He's from the New Jersey, Philadelphia kind of area. So, I went to one of his three-day boot camps up in Maryland.

Don: I went to his three-day boot camp in Tampa. Yeah, well, let's get back to the topic. So, you read Dave Lindell's book 2009, multi-family millions and then that makes an impact and you decide to start investing in multifamily right?

DE 37: Good Research = Smart Investing with Scott Price

Today’s guest has sharpened his skill sets through key roles in various companies as a team manager, program manager, and marketing manager- Scott Price. In 2005, he purchased his first apartment complex of 29 units. He used the full‐time broker status to immerse himself in real‐world real estate, investing and applied education. After being approached by some people, Scott began to provide professional coaching for aspiring real estate investors.

In this episode, Scott shares with us the details of his first deal- what he learned and what he’d do differently, how he managed a full-time W2 job & real estate investing on the weekends, how he became financially free and his current deals. 

Episode Highlights:

• Real Estate Beginnings
• Scott’s Retirement Plan
• Advantages of Real Estate
• A Memorable Deal
• 1:1 Coaching

Connect with Scott:

Website: bonvolo.com

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 

TRANSCRIPTION 

Intro: Hey guys, welcome to the show. Today, I'm very excited to host Scott Price. Scott is a real estate investor. He's also a hard money lender. He's an active investor. He's a passive investor. And he's also a coach. Now, if you're asking yourself, how is it possible that you can do all these things, then I guess it's just a type of business that real estate is. It's just being diverse, being able to think long term. I think what I like about Scott is his long term vision. And that is a key feature that you got to have. It's something in your mindset, you got to understand that real estate is a long play. So, you got to be patient, and you got to keep working, you gotta keep grinding, and you have your way of doing this. So, Scott's way of doing this is working a W2 job as he's investing in real estate. That's a safe way and that's a very nice way to do things. So yeah, I think Scott has a lot of value to give. So, without further ado, let's get started.

Lady: Welcome to the commercial real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies.

Don: Hey, Scott, welcome to the show.

Scott: Hey, Don, thanks. I'm looking forward to being here and talking to you.

Don: Yes, I'm also looking forward to having you here because I know this interview was rescheduled so many times just out of coincidence, and I really wanted to have you on the show. I think what you're doing is truly phenomenal. And I know you've been listening to the show also, as well. So, you've been there on the side of the audience and listener and also now as somebody who's being interviewed, so I'm very happy to have you here. And yeah, let's get started. Tell us a little bit about your career, your real estate career and how you got started in real estate.

Scott: Sure. I would say it first started many years ago, was looking at what am I going to do with my life and how am I going to become independent in terms of financial lifestyle and not dependent upon the winds of a company. And even going back to before college, I was thinking those kinds of things, certainly did during college as well and I kind of started on the usual approach of most people who have got a good job, go to a good school and things like that. But from all the research that I did, the thing that kept coming up over and over again was that people who maybe we're not household names, but they were people who developed a combination of recurring income as well as net worth. It kept coming back to real estate that some people would win the lottery by great IPO or their stock or something like that but it tended to be a smaller percentage, and it was a real roll of the dice as to whether or not you happen to be in the right company or not, or things like that. 

I didn't want my life to be a chance, I wanted to be something that I could control and expand on. And to me real estate was that thing after looking at a lot of different options because it is doable, it's something you have to work out but at the same time, if you are diligent about it, get educated and don't rely on excuses but take action, it is something that can get you there both in terms of recurring income and net worth. What I did was I worked a regular W2 job primarily in high tech and usually in program management and team management positions. And at the same time, in the evenings and weekends, I was working on real estate. For one time back in 2005, I was a full-time real estate broker, but I just did that for a few years and was just to get into real estate investing to immerse myself. I still have my license right now, but I don't represent clients. I currently have it purely for investing purposes.

Don: So, you started back in 2005 right, and then you quit for a few years. I guess you quit because of the crisis?

Scott: I'm giving an approximate from 2003 to 2007. I was a full-time broker and I primarily got out of it because I was doing some commercial, which interested me, but I was doing mostly residential. And frankly, I got kind of tired of all the tire kickers. It's such a numbers game kind of job, some people love it. And that's all great. But I want to get paid for my efforts and for the clients I had, who were good to work with. But the people who would waste my time driving around for six months and then decided not to buy it got a little old.

Don: Yeah. 

Scott: So, I decided to go back to W2 actually to work for good companies, good jobs and make a good income with that and not have to worry about all that kind of stuff. But at the same time on the side, again, in the evenings and weekends, I was actively working on my real estate investing. And my general approach was, all of my expenses for me and my family were taken care of by my job, as well as the benefits that I got and the ability to say It's a lot easier, especially for smaller loans to get a loan, if you have a W2 then if you don't if you're self-employed, things like that. So, I use that all to my advantage. I was very strategic and intentional about that. And by doing that, then all of my income, as well as profits from building up equity, doing a cash-out refinance, things like that, as I went along, I could directly roll that back into more real estate. 

Again, it was part of a larger plan of not going to work W2 forever, didn't want to do that. But I was using the W2 job as a way to help me expand my real estate portfolio even more. And everything that I own right now is I own myself or myself and the bank, as they say, if I've got a loan on it, but had a need for co-investors, although I have worked with debt investors, and so that allowed me to build up a portfolio. I stayed with it for quite a long time until a couple of years ago. And then I got well past where I needed to be, but I wanted to be again very conservative. And then I had both income and net worth enough to just say, Okay, I'm going full time. So, I did that a couple of years ago.

Don: Okay, so yeah, that's very interesting. So, you decided to go full time two years ago, right or a couple of years ago, excuse me for asking it so bluntly, but how old are you? 

Scott: I am 52.

Don: 52. So most people would retire when they are 64. And what I like about what you're doing, is the fact that you saw real estate as a long term investment for your life, for the way that you vision your life, right? So, you wanted to take all the money that you make from your W2, your good paying job, I know you were doing a high tech and you did team management for big companies. And so, you got paid well, I assume. And then you got that money and you paid the bill with that money, but the equity that you generated to real estate investing that you just rolled on, and that's how you got bigger and bigger and bigger. 

And by the age of 52, you are financially free, which is a lot sooner than most people, I mean, you went down the road of the safer option, because I see a lot of people that are doing this, that they have a good-paying job but they know that they don't want to do this forever, and they want to retire earlier than most people. And so, they take the money and they live with it. And the money they make in real estate, they don't take anything out, you just push it back into the business, whereas a real estate investor, you have to also take money outside of your business so that you could live and pay your bills. Right?

Scott: Absolutely. And, of course, actually did two years ago, so that was at 50. And then on top of that, I could have easily done it earlier. Just to be clear. I mean, I've been building enough that easily five years earlier, and that if I wanted to, I could have done that 45 or probably earlier. So, it was just a matter of saying well, I want to be even more comfortable. In other words, I want to have a little bit more properties, I want to have a little more income coming in and things like that. And then finally got to the point where I felt comfortable enough with it.

Don: There's another thing that I want to talk about from something that you mentioned at the beginning. You said that you noticed that it all leads up to the real estate. It doesn't matter who you are, what you do. At the end of the day, the majority of them are in real estate. And the questi

Joining us today is Brie Schmidt, a Chicago based real estate investor. She began her career in corporate sales while always holding her real estate license current. In 2011, she decided to leave the corporate world to become a full-time real estate investor. Since then, she has bought several properties in the Windy City and Milwaukee. In 2014, she started a brokerage company and in 2017 she started a conference business. Brie makes use of her extensive knowledge of constructing and managing a portfolio to teach clients about all aspects of buying and holding investments.

In this episode, she talks about her career as an investor, how she started and how she got to where she is today. Brie discusses how and why she decided to focus on the Chicago & Milwaukee markets, criteria she looks for when deciding on a property and her plans for the future. 

Episode Highlights:

• Brie’s Start as a Real Estate Investor
• Cap Rate Criteria for Properties
• Work-Life Balance
• Her Future Plans

Connect with Brie:

Website: Second City Real Estate

 Social Media: BiggerPockets or LinkedIn

Join Brie @ the Midwest Real Estate Networking Summit

- - - - - - - - - - - - - - - - - - - - - - - - - - - - -  -

TRANSCRIPTION 

Intro: Hey guys, today Don with interview Brie Schmidt. Brie is the first female investor on our show, so we are very excited to have her here. We really hope this episode will inspire other female investors to jump right in the arena of real estate investing. After listening to the interview, I have learned from Brie that this type of profession actually enables a future mom to enjoy both worlds have a very successful career and the ability to take as much time needed for recovery and raising your newly born child. Don and Brie will also discuss the best strategy of choosing a market which is going there and seeing it firsthand. I hope you guys will enjoy this show.

Lady: Welcome to the commercial real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies.

Don: Hey Brie, welcome to the show.

Brie: Thank you for having me.

Don: Yes, of course. I'm very excited to have you as you know, you are the first female investor on the show. I've been trying to get a female investor for quite a while. And I know we've wanted to do this interview for a long time.

Brie: Yeah, I just had a baby. So, scheduling has been a little bit difficult for me.

Don: I could only imagine how difficult it would be to be a real estate investor and also being pregnant and taking care of babies. That must be requiring a lot of toll from you, right?

Brie: You learn to prioritize your time, right, and what's important and it's been something that I've been considering a personal mission of mine for a few years. When I started this business, I quit my corporate job back in 2014. So, I started real estate investing in 2011. I bought another property in 2012. I bought another property in 2013. And then I decided to quit my job and do this full time. 2014, I bought another 10 properties, and then in 2015, I bought another 12 and then bought a couple more in 2016. So, at the time when I quit my job, I used to work in corporate advertising sales. I'm like this is going to be great like I'm going from 50 hours a week and traveling all over the country. Now I'm going to be chill and I work from home and I'm self-employed. And for the first few years, I was working more hours than I was when I had a W2 job. 

It wasn't until about 2017 that I was really like, wow, like I have started a couple of other businesses, I'm the Managing Broker of Second City real estate, which is an investment, boutique investment firm for agents. I also started a website business and it was like, well, what was the point of me leaving my solid W2 jobs to get 'financial freedom' if I'm working from the moment I get up to the moment I go to bed and weekends. So, when I knew that we were going to start planning for a family I made it a really big objective of mine to kind of reevaluate my position in the business and reevaluate what I was doing and spending my time on and work to shift it. So, I'm very happy to report that even before we got pregnant, I was down to about 30 hours a week, and I'm able to take a nine-month maternity leave, where I'm pretty much only working 10 to 15 hours a week currently.

Don: Nice, yeah. So, you get a lot of flexibility. And that's the advantage of being self-employed. And especially in the type of business that we are in, which during the years generates passive income for us. So, it enables us to really take a break when we need to take a break with anything that we go through in life. So yeah, I'm sure that that's been terrific for you and your family. And speaking of which, I want to ask you about the dynamics. So, you're doing your own thing as a real estate investor and your husband, what does he do? Does he spend more time with the kids or does he have a W2? Or how does it look like?

Brie: Luckily, we're both off work still. So, we did not get an easy child. She turned four months yesterday. I'm back to work maybe 10-15 hours a week, and I don't plan on going back for another probably four or five months. He's self-employed as well. So, he's taking off work as well. And I don't see him going back in the near future. When people tell you that raising a child is hard like I don't think I fully grasp that concept. But I mean, it takes both of us all day long, tag-teaming things to have your own sanity. Because we both need our own personal time. So that's how we work at currently. But we'll see when she gets older, hopefully, fingers out of this fussy phase.

Don: Yeah. Beautiful. So that's very exciting to hear that you guys are doing it right. So, tell us about your first deal. You said 2011. So how did you basically come up with the idea of quitting your job and start investing in real estate? And also, what were the difficulties back in a day for you when you were just trying to get into that market?

Brie: Well, in the beginning, I really had no intention of being a real estate investor. So, I've been licensed as a real estate agent for 15 years. I spent the first six months in the business absolutely hated it, quit and went into the corporate world. So, I always maintained my license, though, as a backup. That was kind of my plan. I always had a passion for real estate, but I started when I was 21, was really difficult to get people to trust your opinion and rely on you for advice when you're a 21 year old. Like, why would they listen to you when buying a house. So, it wasn't until let's see, I was 28 when I bought my first property. 

We bought a three-flat in Chicago. And really the intentions weren't to be real estate investors, it was mainly purely out of convenience that the Chicago market is quite unique to understand that. So, Chicago is what we, I would consider to be a dense urban environment. There's almost 300,000 2-4 unit properties and just the city of Chicago. So, in a lot of the Northside neighborhoods where I was living, and where I've worked, some of them are between 30% and 60% of the housing stock is two to four units. So, it's very common, if you look at any block of neighborhoods, over half the house is pretty much our two to four-unit properties. But at the time, we had a really low housing stock of single-family houses. So, while my husband and I wanted to buy a single-family house because the housing stock was so low, they only represent about at the time, 15% to 20% of the housing stock. 

The prices were very high, and it was very, very competitive. So, we thought to ourselves, yes, we would want a single-family house. They're about 3000 square feet here, but we're not even married yet, we don't have planning kids for a few years, we don't need a 3000 square foot house. So, let's buy this three-unit and then eventually, when we need more space, we can just deconvert the staircase and then make two units and the one and then keep renting out the other unit. And then eventually when we need more space, we can just deconvert the staircase again and now we've got a single-family house that we've grown into as time needed. So that was the original plan. There was really no plan to keep buying any more units either. 

So, we did, because we were owner-occupied, we did our three and a half percent down FHA property. I had no idea what I was doing. Like I just looked at it as okay, my mortgage is 2200 and it rents for 2250. like boom, I'm profitable, right? Like, that was all I really how looked at it. I didn't know anything about vacancy repairs, cap-like nothing. We bought it vacant, we got it rented out right away and things were fine and dandy. And this was like great, we live for free now we can start saving for we were planning our wedding so, we were saving for this grand wedding. A few months after we bought the property, my father got sick. He was 60 years old, he was diagnosed with non-small cell lung cancer, which is a very aggressive form of cancer and went through 10 rounds of radiation, 13 rounds of chemo and in nine months and passed away. 

Don: I'm sorry to hear that.

Bri

In today’s episode, our guest Andrew Cushman was a chemical engineer for more than seven years. In 2007, he and his wife decided to follow their entrepreneurial spirit and entered the world of real estate. Their journey began in flipping single-family homes, in which he completed 23 transactions- purchase, rehab & sell. A few years later, he made the transition into the acquisition and repositioning of multifamily properties. Today, he continues his success in the nation’s SE market. 

Andrew discusses how he went through the recession of 2008, his strategy for buying single families and multi-family properties, why he chose the Southeast market. Andrew also shares the pricing strategy he used as well as how he decided to get into the mobile home park asset.

Episode Highlights:

• Learning the Business & Becoming an Entrepreneur
• 2 Categories within Mobile Home Parks
• Bad Market or Bad Strategy?
• His insight on the Next Recession 

Connect with Andrew:

Website:  Vantage Point Acquisitions

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

TRANSCRIPTION

Intro: Hey guys, today I am interviewing Andrew Cushman. And I'm in a very good mood for various reasons. Number one is because I'm very happy to interview such an amazing individual. Andrew is really a professional and I had the chance to talk to him a little bit before the show and kind of understand how he thinks. It really brings me to the point of understanding again and again, that it's all about the mindset, it's about faith or fear. If you're afraid, then you're going to be paralyzed, and you'll never succeed in accomplishing your goals. Cause with no risk, there's no reward, it's as simple as that. You'll also hear during the interview, how Andrew is a thinker and he goes against the herd, which is something I personally believe in. 

I think it's always important and smart to go against the herd and analyze your own life and environment with total faith in yourself and your abilities. I think really, Andrew is that kind of person, which is why I enjoyed the conversation with him so much. The second reason why I'm in a good mood is that me and Eden are getting close to this mobile home park deal that has 70 units. I had a great time underwriting the deal and learning more about the specific market, where it's located. I guess I'm grateful. I'm just truly grateful for doing what I love, really being able to do something that is big and invest in real estate. 

Sometimes I think about it, and I can't believe it, that I'm doing these things. And I really want to help others achieve the same goals and change their lives. So, I guess this is an opportunity for me to say that I'm grateful for you guys as well as our listeners, and I hope you are learning what you need here. And that in the future, when you are successful in real estate or in a future deal, then you think about us and the stuff you learned here. I think that's about it. Without further ado, let's get started.

Lady: Welcome to the commercial real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies.

Don: Hey Andrew, welcome to the show.

Andrew: Hey, how are you doing? Glad to be here. 

Don: I'm doing just fine. Actually, we just had a conversation before the episode started. And I got to say, I had a lot of fun talking to you about what you do and your outlook. And also, I found out that we have a lot in common, right? 

Andrew: Yep. 

Don: Yeah. But before we get into that, how about you tell us a little bit about your background and how you got into real estate, to begin with?

Andrew: Yeah, I took the standard path into real estate and went and got a chemical engineering degree. But I always knew that was just a placeholder. It was just something that I could earn a decent income. So, I figured out what I would really want to do because I knew I wanted to be an entrepreneur. I worked as an engineer for seven and a half years, married a wonderful woman who had the same ideas I had about trying to be an entrepreneur. And so, we tried a variety of things. And they were fun and minorly successful, but they weren't something that could really accomplish her financial goals. And then, I think in 2007, we found, we discovered home flipping and we started doing that here in Southern California. We did our first one and then I said, "You know what, this is our best shot." So, went to quit my job. She did the same thing two years later.

Don: That's in 2007. So that's right before the crisis.

Andrew: We're at one of the epicenters of it Southern California, there were condo complexes here that dropped 70% in value. It was a great time to get into real estate because everyone was terrified. We had no competition. We'd go buy stuff at 50 cents on the dollar, fix it up and sell it at 80 cents on the dollar. So, whoever's buying it was getting the best deal around. And so even though the whole thing was collapsing, we were still making thick margins.

Don: Wait, wait, wait, let me figure this out. So, you were buying at 50 cents on the dollar 30 cents on the dollar you said in some cases, and you were selling it for 80 cents? How come? I mean, I know nobody was buying anything back in 2008. 

Andrew: There's no such thing as a bad market only a bad strategy, right? And single-family houses, there are always some people who have to move for some reason. Their job gets relocated, family changes, whatever right? So, what we would do is let's say a house is worth 400. We'd say we buy it for 300 or 325. We've renovated for 25,000-50,000 whatever required but instead of listing it for 400, we list it for like 375. So that we were the cheapest and nicest house on the block. So whatever rare buyer was out there, they'd always come pick our house. It never took us even in the worst of the crash, it never took us more than 30 days to sell a house once we listed it.

Don: That is just a terrific thing. And you know what, I'm interviewing a lot of investors and entrepreneurs here in the show, I haven't yet found somebody that did that kind of strategy back in 2008. And that's very interesting. And now that I'm thinking about it, it really makes sense to me because I spoke to you a little bit before the show. And I also see how you think right now as an entrepreneur, and I can see the similarity in how you were thinking back then, right? 

Andrew: We listed with a local realtor who was really really good. And I remember walking and deal with his office and another realtor sitting at a desk. He literally looked at us and said, "You're flipping a house, are you crazy?" And I was like, everyone else is creating, this is like the biggest opportunity we've seen in forever. So, we did that for about four years and then after three-four years, everyone else started to figure it out. And then also there wasn't that much equity left, it was still a good business, but it wasn't nearly as good. And we kind of said, well, what's the next big thing? 

Now all these people losing their house, they can't buy another one for 7-10 years so they got to live somewhere. And the people who still could buy a house, they're scared of it. They don't want to buy a house. So, they still got to live somewhere. We're in a big recession. So that means we're eventually going to be coming into an expansion. So, if we add those three things together, apartments are probably going to do really well sometime soon. And so, we went and found a mentor, a guy who had done 800 units, we hired him to teach us the business.

Don: How much you paid him? 

Andrew: I don't remember it wasn't cheap, but it was worth it.

Don: I love it that you had like an itch of doing something bigger. I feel the same thing as an investor. Like no matter what I accomplished in real estate, there's always room to grow as an investor, there's always something bigger you can do. And that's just amazing because you were doing single families, you're doing great back in the recession. So, you were making money when everybody else was losing money, right? And then you're starting to think about how I can make even more money? So how many single families have you flipped up until you made that decision to move up the ladder of commercial real estate? 

Andrew: We were being very careful to only buy deep margin deals so we didn't do a ton. I think when we switched to multifamily, I think we had done like 25 flips in those couple of years. Nowadays, you hear guys are like does 70 a month right? But it's also much, much, much smaller margin. So, we did that full time for four years. And then our first apartment complex was mostly vacant c minus property on the other side of the country out in Macon, Georgia. That was 92 units. We syndicated that which course means we pulled investors money.

Don: What year was it? 

Andrew: That was 2011.

Don: So back in 2011, you're signed to thinking to get into multifamily and commercial real estate and you're looking at Georgia when you're living in Southern California. So basically four and a half hours flight. 

Andrew: Yep. 

Don: So why did you choose Georgia- Atlanta?

Andrew: Idaho and Utah are getting overrun from people fleeing California. And then in the sou

Kevin Amolsch, based in Denver, Colorado, is a very passionate real estate investor. He served 4 years in the US Army right out of high school and worked as a mortgage bond analyst for several large Wall Street firms. In 2008, he started his own financial institute, ‘Pine Financial Group’ which is a nationally known hard money lending company. Kevin is the author of The 45 Day Investor and is recognized as an expert in real estate finance. 

In today’s episode, Kevin talks about his start as a real estate investor, raising funds & hard money loans and his 13 unit deal on an assembled lot. He discusses his plans for the future and why keeping your focus is essential. 

Episode Highlights:

• Kevin’s Portfolio Details
• Process of Assembling Lots
• His Business Ethics
• Future Plans for Pine Financial Group

Connect with Kevin:

Website: pinefinancialgroup.com

YouTube: Pine Financial Group Channel 

- - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - -

TRANSCRIPTION

Intro: Hey guys! Today Don will interview Kevin Amolsch. Kevin is a single-family investor who is based out of Colorado and also does hard money lending. Nowadays, Kevin is in the midst of a 12 townhouse development. What I find interesting is how diversified Kevin is and the commonalities we share. Me and Don also started at single families, moved up to commercial and we are currently developing a 30 unit multifamily in Hollywood, Florida. One of the most interesting things we have learned from Kevin is the process of assembling two lots and approving it with the city. I hope you guys will find the interview interesting and enjoy the episode.

Lady: Welcome to the commercial real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies.

Don: Hey, Kevin, welcome to the show.

Kevin: Hey, Don, thank you so much for having me.

Don: Yes, you're welcome. I know you're a single-family investor and a multifamily investor and you also focus on raising funds and then doing some hard money loans and that's the type of income that you generate. So that you do a lot of things and for that reason, you're on the show, because I bet my audience and our listeners have a lot to learn from you. So, the first thing that I would like to ask you is that the first time that you start to look into real estate.

Kevin: Right out of high school, I got into the Army and in the Army what you find is that you don't make a lot of money but you don't spend it either. So, I was growing a little bank account, I was trying to figure out what to do with it. So, I started reading books and one of the ones that I read it most of your listeners probably know is 'Rich Dad, Poor Dad.'

Don: Yeah, the famous purple book. Okay, guys, if you haven't read it, then please do yourself a favor and get on with it.

Kevin: Yeah, I mean, that's got to be a staple. I don't know if I know any successful real estate investor that has not read that book. Kiyosaki favors real estate. So, I was attracted to it and I started reading more and more and more and I ended up buying my first house. I was just turning 21 at the time. I got out of the Army, moved into the house, moved into some roommates to pay my mortgage for me. And then two years later, I moved out of it and kept it as a rental. I was cash flowing 300 or 400 bucks a month. I saw the value going up. And I knew that real estate is what was going to make me rich. So, I started focusing on it, and I turned it into a career as I was working my way through college.

Don: Amazing. So, what did you study in college?

Kevin: Yeah, I got a degree in finance, which does help. You don't necessarily need a degree to be successful in this business.

Don: Definitely. I always say that on the show that I never went to college. And I don't think in today's world, it's a necessity. I think it's something that you want to do if you want to become a professional if you want to become a lawyer or a doctor, and I think it's definitely for you. If you want to become a successful real estate investor, I don't think it's going to hurt you but I don't think it's something that you need. Because information and gathering knowledge is so easy today with podcasts and books and everything. You did go to college and you studied financials and you became the president of a company that does financial some hard money loans. I'm sure that must have helped you.

Kevin: Oh absolutely. But what you learn in college is more like you said, Don, it's more about the corporations and corporate finance. And small businesses are all very different. I mainly went to college because I was getting it paid for and I had the GI Bill paying me every month to go. So now I need a lot of sense for me. I was using student loans to buy houses at the time, it was a good fit for me. I'm not discouraging people from going. Don't get me wrong. I do agree with you, it is a positive thing, but you don't necessarily need it.

Don: A lot of people go to college and I see that from my home country. I'm from Israel. When you live in Israel, you go to the Army, it's mandatory. So, for us, we don't have a choice. So, we got to go for three years and then women go too, they go for two years. So, by the time we get out of the Army, we're already 21 so some of us you know, after the experiences we've had, we want to go and travel, get to see the world a little bit. And then by the time we get back, we're 22, women 21. So, a lot of people are very stressed. As a reality check, and they're starting their lives, but they're 21. So, they feel that they have to go and learn something so that they can have a degree so that they can feel safe about themselves and good about themselves. I know here in the United States kind of different because you're fresh out of high school, you can go to college, you're doing that when you're 18. So, then you finished by the time in 21-22, and then you have a lot of time to do things with the things you've learned. So, I know it's different. Maybe it's not my place to talk about this. But I think, still, wasting time or investing time incorrectly is a very big problem. And I think if you're investing it in something that you don't know what you'd want to be dealing with in the future could be more of a liability than an asset, even if you finished by the time of 21. Don't you agree?

Kevin: I totally agree. 

Don: Yeah. Okay. Let's talk more about real estate. So, I know now you own 20 units. So, you have 20 doors, some of them single families, some of them multi-families, and you're based out of Colorado, Denver, right? 

Kevin: The western side of Denver. 

Don: Yeah, so the Denver I must say, so Metropolis area. Your properties, are you holding primarily in Colorado?

Kevin: I got eight properties in Memphis and the rest of everything I own is in Colorado. Looked at other areas, but it's difficult to have properties outside your own backyard. So, it's been my preference to try to stay close.

Don: Yeah, definitely. So, these units, you said few of them single families and then some of them are duplexes or triplexes?

Kevin: Yes, some small multies but let me give you an idea. I am shrinking my portfolio right now. I had a fourplex that I had a lease option on and my option was about to expire, I ended up exercising the option on that and combining it with the next-door neighbor's lot. And now we're building 13 units. Those 13 units are going to be for sale. So, it's a for-sale product.

Don: That's very interesting. Let's talk about that. So, you basically had an option to buy, right? So, it was a lease option. And then you exercise the option and then you purchase a duplex, right there was a duplex you said?

Kevin: It was a four-unit and I had a 10-year option on it. And so, I exercised it after 10 years, so I already had a pretty low basis in it.

Don: How much consideration did you put when you put the agreement?

Kevin: Oh, I've never put the consideration down. 

Don: Okay, nice. So, you bought those four units for whatever price that you had on the option to buy it. And then you've basically combined the other lot next to it, right? So, you basically did a folio combination.

Kevin: Yeah, we just did a little assemblage. Tracking down that neighbor was an interesting story. But I ended up finding him on Facebook. Messaging him on Facebook, because he would never answer his door when I knocked on it. He was nervous. So, we hired a real estate broker. So, the real estate broker and we spoke and he got a full price offer on that property. But you know what, it added more value to me since I own a lot next door than it was who was willing to pay for it. And then we put the two together and created a nice little project that's going to make a bunch of money. But that's just one example. So now I'm going to be down four doors because I converted my for rent product into a for-sale product. 

Don: Yeah, but you're going to be up 13 doors when finishing the development and then you could sell them or you can hold them in, that's up to you right? But I want to ask you about the assemblage. So, you assemble

Bill Manassero is proof that it’s never too late to invest in real estate. Bill made his first deal at the great age of 60! Based in Irvine, California, he has worked in offices, worked as a musician, and operated his own businesses all his life. His music led him to take part on a mission in Haiti, where he started his organization named ‘Child Hope International’ which helps the children of Haiti. After a few years on the mission, he and his family moved back to the states and hit the ground running in the world of real estate. 

In this episode, Bill talks about his life in Haiti, how he came up with the idea of helping orphaned and abandoned children. He also discusses why & how he jumped into real estate, about his first deals, his lessons learned from it, and how he made the transition into a 22 unit deal. 

Episode Highlights:

• Bill’s Mission in Haiti
• His Start In Real Estate
• Paralysis of Analysis
• Hiring Property Managers

Connect with Bill:

Website:  OldDawgsREINetwork.com

- - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - -

TRANSCRIPTION

Intro: Hey guys, and welcome to the show. Today, I'm very excited to host Bill Manassero. And Bill's story is very inspiring, particularly because of the fact that he started investing in real estate when he was 60 years old. A lot of people say that they're afraid of jumping in because they feel like that ship has already sailed, or they're too young and many other excuses why not getting into real estate. But how about being 60 years old, not having enough money to retire or thinking about retirement and getting into real estate at that particular point? I think that's inspiring, and it doesn't matter the situation, I think it's something that we should learn from. So, without further ado, let's have Bill Manassero.

Lady: Welcome to the commercial real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies.

Don: Hey, Bill, welcome to the show, and happy Thanksgiving.

Bill: Hey, it's great to join you here today. This is Happy Thanksgiving to you too.

Don: Thank you for much. I'm actually Israeli. I know Thanksgiving is an American holiday or like an American event and I have been in this country for eight years. And it's my favorite holiday here, I guess because it reminds me of home. As Israeli people, we assemble every Friday for a Friday dinner with our families. 

Bill: Shabbat

Don: Yes, Shabbat dinner. And that is the closest that we got here. So, I love it. I love this holiday and I love the atmosphere and I love the fact that Florida is getting a little bit colder. That's amazing.

Bill: How cold, down to 70 now or something?

Don: Oh it's 75.

Bill: Oh, man, you must have big down coats on.

Don: Yeah I'm wearing a jacket, don't ask. How's the situation in California, right, you're based off California?

Bill: Yeah, I'm in Southern California. It's called South Orange County which borders San Diego County. A very nice area here. Just love it. The beautiful and yeah, I think we're down in the 60s and 50s here lately, so we're getting really cold. And the people, of course, listening and Michigan and places like that are just saying. Yeah, right. What are you guys talking about?

Don: That's right. Yeah. Okay. So, Bill, how about you tell us a little bit about yourself in your real estate career? I know you're a very accomplished man, and you've done a lot in your career. So, tell us about yourself, what you're doing right now, what you've done in the past. Let's hear all about it.

Bill: Oh, you bet. Sure. Well, I don't know how far back you want me to go. It'd be a long show here but I'll just try to give you an overview. Mainly grew up in Southern California, started off early in the banking industry, or at that time, what they called savings and loans, and learned a lot about just the financial transactions that occur and how funds are taken in and dispersed in the way of mortgage loans and so forth and did that for a number of years. And then I opened my own consulting firm, mainly in marketing and public relations. Did that for a long time. Work with the automotive industry. Moved into the technology area. Eventually got involved with a new tech startup, an internet company that was started by a group of Harvard MBAs, one of the persons who was who started eBay and Meg Whitman. Everything is going great, exciting, we're just kind of watching our stock options grow and then boom, the internet bubble burst. And so, I kind of got my first...

Don: Talking about '99 right?

Bill: Yeah, exactly. And then I went into a sort of a totally different direction. I felt like I was called into the ministry and actually started, I've been a musician. I earned my way through college, playing in clubs and doing all that kind of stuff. 

Don: It sounds like a very Californian life. you're a musician, you stumble upon the founder of eBay, like across the street.

Bill: Kind of like that. Yeah, a little bit more complicated, how it all came together, trying to rush through here so I won't give you a four-hour version. But that was it. I have been playing guitar since I was a kid. So yeah. And then we started a little rock band for kids and it was wild and we just traveled around the US and played at festivals and churches.

Don: What about real estate??

Bill: Okay, I'm getting there. Okay. So, anyway, so this kind of brought me into old-time mission opportunity in Haiti, specifically, it's in the Caribbean. And Haiti is one of the poorest, if not the poorest country in the Western Hemisphere. 

Don: I know much about it actually. It was just a matter of who occupied the country. The Dominican Republic was occupied by I think it was France?

Bill: That was Spain.

Don: Spain and France occupied the Haitian people. And so what happened was that the French people and excuse me if your French guy listening or friends you're listening, sorry about that but they were known to exploit the land so much that the land is just, it doesn't have any vegetation that grows. There was no advantage in raising crops when you compare it with the Dominican Republic and up until this day, If you ever look on this island, which is the exact same terrain both these nations have, if you look at this island from an aerial perspective, then you will see that Haiti is like barren and kind of brown from satellite pictures, whereas the Dominican Republic is all green and forest.

Bill: That's true. It looks exactly like that. Of course, there are different versions of the story. The island initially was founded by Christopher Columbus and it right before he came to America, and it was called Hispaniola so it was all owned by Spain. And, of course, Napoleon and the Spanish were fighting and negotiated basically this island and they split off into smaller third was Haiti which became the French-owned part of it. And that's where the majority, in fact, all of the coffee and I believe the sugar at that time was supplied to Europe through Haiti. It was extremely productive. Also, all the slaves rose up.

Don: Yeah. The people stayed poor. What were you doing there though, I mean, how does it do it real estate?

Bill: Well, it's part of the story. I had been 20 years in business and corporate had been an entrepreneurial side, just a full run a business. So, when I got over to Haiti, I think was coming into my 50s. And we set up a mission over there. And we worked primarily with the street kids in Haiti. We set up vocational training programs and micro businesses for them. They had orphanage for girls and four boys and a guest house and a medical clinic and a school and all these different things primarily because there are 300,000 orphans on the street. So, it's a big problem over there. We spent about 12 years there. It was kind of getting near the end of our mission time and getting older and it's just a tough place to survive and live. 

We were prepared to stay, for the duration, but at the same time, my kids are growing up and going back to the States. I have seven kids, a lot of activities going on. And so, we prayed about it. We said this thinks what we want to do is prepare for retirement in the states and so my going to try to get a job with somebody. I thought 60 who's going to hire you, realistically. And then I'd run businesses, I thought that's probably more likely, it makes more sense to me, maybe starting my own business. I'm looking at all kinds of things. I started venturing while I was in Haiti into online businesses and started, generate some income with that. And I thought, wow, this is too much work and I want something that would be passive. And so, I got an unexpected inheritance check in the mail. And I was heavily invested in the stock market and thought I just don't want to take this and put it into the market because that one, it was pretty volatile at that time. And so, I'm looking at what options, maybe as an alternative. 

Don: Okay, tell us what you got.

Bill: Okay. I have a board of directors, a nonprofit organization called Child Hope International. That's the organization that funds Haiti and so forth. A couple of guys on my board were heavily into real estate. We had a developer, we had a guy that just investe

Scott Meyers is a real estate investor based in Indianapolis. It all began in 2005 and since then he has grown in the self-storage industry as a developer, owner, syndicator, and operator. He has several multi-million dollar businesses under his belt but his favorite is self-storage and today he is in control of over 7,500 units. Scott started ‘The Self-Storage Mastermind’ to teach others about the self-storage business. 

In today’s episode, he discusses how he entered the real estate industry, why he’s chosen to grow with self-storage, and what one should keep in mind before investing in a facility. He gives us insight on one of his memorable deals over the years- what happened, what he learned and what’s going on with it today. 

Some Of The Episode Highlights:

• His Self-Storage Business
• His ‘Why’ in Self-Storage
• The ‘Boomerang Property’
• Special Gift for Our Listeners 

Connect with Scott:

Website: selfstorageinvesting.com

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 

TRANSCRIPTION

Intro: Hey guys, this is Don, your host. In today's episode, I will interview Scott Myers. Scott is an amazing investor and he specializes in one of the most interesting asset classes, self-storage facilities. Today, me and Scott will discuss the nature of this market. Also, as previously mentioned, I want to remind you that you have an opportunity to get a free 30-minute phone call with me and Eden if you review our podcast on iTunes. Simply rate the podcast and write a review of how you feel about the content and the show. To redeem, email us the content of the review to [email protected]. You will then be contacted and scheduled for a 30-minute phone call with me and Eden, where you could ask questions or network about any subject or project that you would like. So, let's get started and I hope you guys will enjoy the interview.

Lady: Welcome to the commercial real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies.

Don: Scott, welcome to the show. How are you doing today?

Scott: Hey, Don, I am fantastic. How about yourself?

Don: I'm great. How's the weather up in Indiana?

Scott: Well, that depends. We had our first snowfall of the year last night. It had about three inches, which is a little bit more than we normally get this time of year. So, I think I'd rather be down next to you conducting this interview right now.

Don: Yeah, I mean, we just got the best weather right now in Florida. It's been very muggy for November, 75 degrees all throughout. I used to live in the Midwest, and I know it kind of gets cold in that period of time of the year, right?

Scott: Sure can. Yep.

Don: Yes. You've been living in Indiana, all of your life, born and raised?

Scott: Born and raised in Michigan. I went to the University of Michigan and after I graduated, I moved down to Indianapolis where I took a job. I was working in the telecommunications industry before I got involved in real estate.

Don: Wow. Okay, so that's a pretty sharp transition. What made you move into real estate?

Scott: When I began looking in investment books on ways to I guess diversify my retirement rather than relying on our 401k stocks and bonds and mutual funds ran across several books, one of which was Robert Kiyosaki's book terms in real estate and the more I looked at more I realized that I didn't want to put my money into the stock market as the poor dad did in Robert Kiyosaki's book 'Rich Dad, Poor Dad.' And so, I began investing in single-family homes and then it took off after that.

Don: Yeah, let's talk about your initial investments in the single-family space. What did you do, fix and flip?

Scott: Began to buy single-family homes, and then fix them up, refinance them and rent them out. And I did that for a number of years until holding. It's kind of a tough gig holding on as a landlord unless you're flipping some as well. So once the economy began to turn in 1999 and 2000 during that downturn, shortly after the government came out with the Community Reinvestment Act, and made it easy, a little too easy for anybody to own a home and so we began then turning around our houses to sell them. So, we became retailers in addition to landlords.

Don: Nice. I know right now you're focusing primarily on self-storage. Tell us about the first time you got to learn about this asset class and this market in general.

Scott: Began looking into self-storage because of, well, that wasn't the cash flow that I wanted to have in single-family homes and apartments on like I had intended. And then when I went back and looked at the business model, I realized that most of my expenses were a result of a related to tenants and toilets and trash. And so, we all love real estate and we love running real estate if it weren't for that. So, I began looking into what are the other asset classes in real estate that has the benefits of real estate, but without all the hassles of the three T's. And it's either parking lots or self-storage. And so, the more I begin to look into self-storage in the business model, yeah, I really liked what I saw. And began attending some industry trade shows, then dip my toe in the water by getting into a partnership with someone in a self-storage facility. And the rest they say is history.

Don: Yeah. So, there is a question that I want to ask you. I know now that you're very big on the self-storage space and you own or you're in control of over 7500 units, I’m guessing in self-storage just since 2005. So, you've been a longtime player in that space, but I want to ask you more about the beginning because I remember I just recently did a transition from residential wholesale real estate into commercial real estate. And even then, being an experienced investor and owning a lot of properties and having capital, it's not easy. So, you said something about going to shows and learning about... So, tell us a little bit about that period of time where you did not make your first deal in self-storage yet, but very attracted to that asset class and what you did in that time period, how much time did it take for you to get your first deal?

Scott: There weren't any resources. You found me, Don because we have an education company as well. We teach people how to go about and do this business and we've been doing that since 2008. But prior to that, that company was really born as a result of that. There wasn't a resource, there wasn't a Scott Meyers out there to learn from it. So, I attended the industry trade shows and those shows are primarily for the folks that are already in the business. 

So, I begin talking to the attendees and just asking them, "What do you like best about self-storage and what don't you like about self-storage?" just to get an understanding from several folks that before me and how to get into it. There still wasn't any way to learn the nuts and bolts, the A to Z or how to get into it. When I came home as I began to do more research on my own, I reached out to a consultant in the industry and I spent a day with him and drove around and taking notes and asking about it. 

He owned a management company as well. And he managed several facilities for other folks. I asked him as many questions as I possibly could to fill in the gaps and I filled up three notebooks full of paper, just answering the questions that I had about the business and I, like you, been in multifamily and apartments and I understood commercial real estate. But all the nuances and all the intricacies of self-storage to bridge that gap and fill in the gaps took me all day and a bunch of notes and even then there was no way to get it all but that's how I started. And then just sort of trial by the fire going out and talking to other owners and brokers and begin exploring and looking at several facilities to buy.

Don: Okay, tell us a little bit about the market itself. So, what are the biggest players, what is considered a big property? I know so when you're looking at multifamily anything over 200 units is considered very big. Mobile home parks, anything over 150 is considered institutional. So, what would you say is a big deal when you talk about self-storages?

Scott: Yeah, we're in that 400 to 450 unit range and which equates to roughly greater than 60,000 square feet. Those facilities that are larger than those are the ones that are going to be typically institutional, so those are the ones are going to be held by Public Storage or Extra Space or Bridge or CubeSmart number of the big players or reads in the marketplace. Now not all the time we own several facilities that are that size as well with the goal and the intention of eventually off to the reeds and that's what we're developing and building now. That's really what's considered the big boys. And so the reeds are the institutional properties and facilities that size you know, that only accounts for about nine to 10% of all the units and all the square footage of self-storage are below that and are owned by some regional players that own you know, 1, 2, 5, 7 properties. Some national players that aren't considered and then a lot of the mom and pops that we buy our facilities from that can go all the way down to as low as 15 between units per facility.

Don: Okay. So, mom and pop are always good because you can get a pretty good deal. Somebody that owned the property for quite a while, they have a lot of equity t

Brian Burke, based in Santa Rosa, California, is a real estate investor and the President and CEO of Praxis Capital, which is a vertically integrated private equity investment firm. He established this firm back in 2001. He began his career in 1989, buying his first rental property which led him into the world of multi-family then commercial investing. 

Brian is a successful entrepreneur and syndicator - today he shares how he started his real estate career and giving back to his community after the wildfire in California. He also discusses his investing strategy, where he’s looking to invest, what to expect from an investment and his future plans.

Some Of The Highlights:

• His First Real Estate Investment and His Business Today
• His Work Strategy and Advice For a ‘Rainy Day’ In Business
• Brian’s Retirement Plan
• What is the preferred return? 

Connect with Brian:

Website: PRAXCAP.COM

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 

TRANSCRIPTION

Intro: Hey guys, this is Eden and today is a very special episode because we are going to host Brian Burke, who is one of the biggest investors on this show to date. Brian had completed half a billion in real estate purchases this year alone after a long and beautiful career that lasted for 30 years and still counting. When listening to this episode, I was personally amazed by how humble Brian is and the sheer perspectives and mindset real estate investors to have despite the fact that they never met before. Also, today we would like to ask you guys for a favor. If you love our content and feel like you're learning from this podcast, please go on iTunes and give us a five-star review. This helps the podcast to rank higher and the best, part if you give us five-star review, shoot us an email at [email protected] with the content of the review and your phone number, and you'll get scheduled for 30 minutes phone call with me and Don where you can talk about real estate and get answers for the questions you always had. So, without further ado, let's get started.

Lady: Welcome to the commercial real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies.

Don: Hey Brian, welcome to the show.

Brian: Thanks for having me on Don.

Don: How's the weather in Santa Rosa, California?

Brian: Oh, it's a beautiful day today, almost 80 degrees this afternoon and in November, which is a little unusual, but I'll take it.

Don: I like to skate. It's like my hobby. So, I went to L.A., I went to Venice. I took a month off, just wanted to skate, took my skates with me and went there. Some people said it's the best place for anything that has wheels. And so, when I got there, that was late May and it was raining. It was like rain in L.A. and people told me it's very rare. That never happens. And it was kind of cold. And so, one of my friends that lives in California said that the weather over there was pretty unusual this year. Would you agree?

Brian: Yeah, it was unusual. A lot of rain this spring and a lot of heat this fall. So, it's been a little bit unusual. But I would say the best weather in California is probably September and October. Those are usually some of the nicest months and people think that summer is probably the nicest, but it's not always the case.

Don: Yeah not always the case. Is it still burning over there? I know you guys had the wildfires.

Brian: There's a large fire. The largest fire in our country's history just got fully contained yesterday. And that was about a couple miles up the road from our office. So, we were under mandatory evacuation last week. And this week, we're back in action here in the office.

Don: As sad it is to say that, I'm sure that these wildfires pose some great opportunities for real estate investors. Am I right?

Brian: Well, once in a while they do and we had a fire in our city two years ago that wiped out 5000 homes in our city. We raised a fund last year to rebuild homes and our city and we raised about $8 million and we've been building single-family homes on burned-out home sites where the owners decided not to rebuild and elected instead to sell or move to a different area, put their lots up for sale and we're putting spec homes on those lots and got a couple of dozen homes under construction right now. So certainly it does breed some opportunity.

Don: Not only opportunity, in this case, also give back to the community that is your city. Eventually, you want people to live in it and feel happy about it. Because that's home for you. Right?

Brian: Yeah, people want the city to be put back the way it was. And we're doing our part to help do that and at the same time provide much-needed housing. When you lose 5000 homes in a city of 250,000 people it makes a real impact on housing demand, and there's a need for housing here. And we're helping to provide that which is pretty exciting.

Don: That's beautiful. So, I know your real estate career is a very long one. You're one of the most successful entrepreneurs and syndicators on the show to date. I know you've amassed a portfolio of 250 to 300 million if my numbers are right and you've completed your half a billion in purchases of properties this year, am I right?

Brian: Yeah. 2019 is a banner year for us. We crossed the half a billion-dollar mark and real estate purchase, which is an incredible accomplishment for me to even say that it is weird. I never imagined that in my lifetime I would do something like that. But we managed to pull it off. Now we've got a portfolio consisting mostly of multifamily properties. Our business focuses primarily a hundred units and up multifamily all across the US and we've got about 3000 units that we've done. Our portfolio now is about 250-300 million of value. We still do some single-family here and there. Of course, our fund where we're building homes in our city, so we're kind of a multidisciplinary real estate firm that started in single-family migrated to multifamily, but once you have developed roots and single-family, it's hard to lose those.

Don: Yes. I started single families too, and let's be honest, it's fun. Even when you're doing commercial, it's still fun to do some projects there as well. So, let's talk about how it all started. When did you make your first steps in real estate? What was it back then? Because I know you've been doing real estate for 30 years, right?

Brian: Yeah, my first real estate investment was a little over 30 years ago. In 1989 was my first real estate investment.

Don: Just a side note. I was born in 1989.

Brian: You were born? Yes. So, when you were busy being born, I was busy trying to find a house to buy and I made my first real estate investment. I didn't even own my own home but I bought a rental and fixed it up a little bit and a couple of years later sold that and I started doing some house flips, one house at a time and I was still working at the time and this enabled me to make a living on my job and then invest in real estate to build my future.

Don: What a smart decision! So, one thing led to another and now you are in control of over 500 million worth of property in multifamily which is amazing. So, tell us a little bit about the first deal in multifamily. When was the first time you decided to buy a commercial property?

Brian: My first multifamily was about 16 or 17 years ago. And it was here in California, it was a 16 unit apartment building. And what I was doing is I trying to figure out how to invest in commercial real estate, but I just didn't understand it very well. I didn't understand what the numbers meant or how to value it or how to evaluate it. Two rental houses that I accumulated through my house flipping business and flip one, keep one flip one, keep one. So, I had a couple of rentals I wanted to sell and I wanted to do a 1031 exchange and exchange up into an apartment building. It just seemed like it was an interesting way to grow the business and have more economies of scale and cash flow and all that. 

So, I reached out to the real estate agent that was helping me sell my flips because he was a CCIM which is a certified commercial broker. And I said, "Hey, I don't understand any of this and will you teach me?" and he did. He taught me how to read an income statement and what to look for and all kinds of different things. And then not long after that, he's told me my first apartment building. I did a 1031 exchange and never looked back.

Don: How was the first investment? Was it a good investment, a bad investment?

Brian: Funny story is I just sold that property like two years ago. So, I kept it for a long time and I was able to do a 1031 exchange into an oceanfront condo in Hawaii where I rent that out and, maybe one day I'll even be able to move into it. Who knows?

Don: We all have dreams. Being busy in real estate, you never stopped working. So, I know we talked a little bit before the show started. I asked you about the ways that you make money when you own such a massive portfolio, but most of it you syndicated. So, most of it, you had to raise money. And you had to structure a deal in which your investors are being paid first because I know you care about your investors. So how do you make money? How much money do you make on these types of deals that you're acquiring? What are your goals for the future as far as your financials?

Brian: I started just entirely doing things with ma

In today’s episode, we have the pleasure of featuring a well known & respected mobile home park guru, Kevin Bupp. He entered the real estate world at the young age of 19 where he started with single-family residential real estate. As time went on, he learned about commercial real estate and grew his portfolio- right before the crash of 2008. Like everything, you live and learn- and that’s what Kevin did. He did some soul searching and wanted to focus on his hobbies of health and fitness. He took some time off of real estate and built a company around custom cycling clothes and ran a social club 'Running For Brews.’

However, Kevin still had that real estate fire in him and his vision changed after a lunch meeting. Kevin became intrigued in mobile home parks and he owns several of them throughout the US. In today’s episode, he discusses how and why he chose mobile home parks in this second round of his career, the factors of a good deal & how to find them, and the importance of being in a good headspace. 

Episode Highlights:

• How Things Affected His Business In The Early 2000s
• 2012 Tragedy And Onwards
• The World of Mobile Home Parks
• Where To Learn About Investing In Mobile Home Parks

Connect with Kevin

Website: Kevinbupp.com

Company Website: sunrisecapitalinvestors.com

Podcast: Real Estate Investing for Cash Flow 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 

TRANSCRIPTION 

Intro: Hey guys, today I'm very excited to discuss one of the most intriguing asset classes and one that is known to have caught my attention at least. And of course, I'm talking about mobile home parks. Mobile home parks are one of my primary targets as an investor because I truly believe that to create long term wealth, there is nothing better than buying a piece of land. And if that land also happens to be a cash cow, then I'm all in. I think mobile home parks are just that. So, in today's episode, I'm going to host Kevin Bupp who has a truly remarkable story and is considered a guru when it comes to mobile home parks. So, let's get going.

Lady: Welcome to the commercial real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies.

Don: Alright, hey, Kevin. Welcome to the show.

Kevin: Hey, Don, thanks for having me. I'm looking forward to it.

Don: Of course I was looking forward to it as well because I know you're one of the best mobile home park investors out there. So, I'm very happy to have you on the show because it's not a secret that I'm very interested in mobile home parks. But first, I'm going to ask you a little bit about your career and how you got started so my audience could get to know you a little bit better.

Kevin: Sure. Mobile home parks have been our focus for the past seven years. However, it's not really where I got started. Like a lot of folks, I got started in single-family residential real estate. It was introduced to me or I was introduced to it back when I was 19 years old. Ultimately took me about a year and a half to buy my first property and spent the next couple of years following that introduction to residential focusing on building a single-family rental portfolio. And that's the direction of my mentor at that time. That's exactly what his business model was. So, I just followed it to a tee.

We would only ever wholesale or flip a home when we needed to build up capital reserves. But the long term intent was to always build a portfolio for long term cash flow. At some point during the first couple of years, I was introduced to the world of commercial real estate more specifically multifamily property and so we started diving into the multifamily space as well. This is back pre-2008. This is back in 2002-2007, leading up to '08. So, we had built quite a large portfolio of single-family properties and instead of acquiring apartment complexes as well, along with other miscellaneous commercial real estate.

Don: Sounds risky build up a big portfolio just before 2008. So, did it end well?

Kevin: Well, if I had a crystal ball, I surely would have planned slightly differently, right? No, it didn't end well at all. We're down in Southwest Florida pretty much ground zero, one of the ground zeroes for the real estate crash and crisis. It was a very challenging time. The single-family market down here suffered greatly, not just from a value perspective, all of our properties have a lot of equity. We had a very low leverage point we thought was a very conservative leverage point in our single-family properties. But what we found is within a year period of time slightly less, most, if not all of them were upside down in value.

Don: It's like the worst nightmare for every investor. What happened to you? You were investing in single families in Florida before 2008. That's the worst-case scenario.

Kevin: Yeah, and it wasn't just the values it was a rental, the occupancy got affected, a lot of people are leaving Florida back then there weren't jobs, a lot of the jobs, were heavily relying on real estate, the growth of real estate, you know, building and development practices. So we had to hit to our rental premiums that were charged, and we had to start offering concessions, and your rents don't always continually go up, there are certain points in times where rents can be affected, and you might have a little more of a challenging time occupying your units will take longer than usual, you might have to give some concessions away, couple free months of rent or a discounted rent for the first couple of months. So, we had to do that, we had to do all the above. 

It just was very, very hard to maintain the status quo when we had a portfolio that was underwater. In addition to that, it was negative cash flow, and it went from positive to a negative cash flow standpoint, you can't sustain that for very long least we couldn't. I didn't have $20 million sitting in the bank that could just keep feeding this beast and so we hung on for as long as we could. But ultimately, we were forced to essentially give back a lot of our portfolio to the banks. At that point, the banks didn't have the loss mitigation departments. This was very fresh. Most banks were forced to create those departments within their company to do workouts and loan modifications. However, that did not exist. The first year when things started going completely haywire, and so none of the banks were willing to work with us whatsoever. That's the last thing they wanted to discuss was that loan workout. We really did what we had to do and we tried to hold on as long as we could and ultimately had to get back a lot of what we had built over the years.

Don: Okay, so when you say give back, I assume it was a deed in lieu? Foreclosure, right?

Kevin: We had hundreds of properties. So, deed in lieu, some of the banks were so in disorganization at that point that they just didn't, there was a way we could speak with just ultimately went through the judicial process and went through foreclosure. We would short sell whatever we could just that we tried to work with the banks as much as possible. We were here, we were open, we're open-minded and willing to work with them. And so, some of the banks worked with us through short sales, we did that. 

Others again, there was no communication, there was no dialogue and so, those ultimately went through the judicial foreclosure process somewhere deed in lieu or willing to do whatever we could to ease the process on both sides. But again, there wasn't much organization with a lot of banks in the first couple of years of the crash. Now every bank has a loss mitigation department. There are people, there's a dedicated department to deal with loan modifications and doing reworks with borrowers. That didn't exist. It just didn't exist back then.

Don: Of course. Going a little bit forward, then it's 2012. I know you made your first mobile home park deal, right?

Kevin: That's correct. Yeah, took a couple of years off a real estate. Well, I shouldn't have I kind of kicked myself in the butt now. But it was damage control for a number of years. It was very hard to see the light at the end of the tunnel. And it's not a sob story. I've learned a lot from it. I lost my personal residence and got bank accounts got garnished. It was a very ugly personal time for me. I'm still young at heart today but I mean, I was in my 20s. And I'd never gone through something like this before. I've only ever experienced the positives of real estate. It was a lot to consume and to digest. I knew that I needed to focus on my health and fitness. And so, I started a few other businesses that were directly related to the health and fitness industry and that allowed me to number one, create some revenue and income for myself because I was broke. I mean, I'd have anything and my bank account got garnished. 

Don: What kind of business?

Kevin: I started two different companies. One was a custom clothing company. I was a big runner, and I'm a cyclist, triathlete. And so, I was already ingrained in that community. And there was a huge need for custom cycling clothes and also running clothes for big events that we got into the sublimation business. I knew nothing about it before just watch some YouTube videos and did a bunch of my research and ultimately built a printing company. In addition to that, I love craft beer, and I love running as well. I thought

Andrew Syrios has been in the real estate business for over 10 years. Born in a real estate investing family, he was mentored by his father, Bill Syrios, who is also a real estate investor. His father started investing in the early 80s. Andrew is based in Kansas City, MO. He joined the family business straight out of college. He is the owner of more than 500 units in Missouri and manages own portfolio. His real estate preference is to buy and hold for cash flow.

In this episode, both Andrew and Don discuss their experience in real estate investing. Andrew gives a lot of details about how, when and where to invest. Andrew discusses his thoughts on a possible recession along with possible factors to look for.  Also the importance of standardizing certain tasks in order to streamline your business, get more done and have everyone on the same page. 

Episode Highlights:

•  When and How He Started Investing
• Tenant vs. the Landlord Friendly States
• His Criteria For Choosing a Property
• Importance of Having Systems & Policies in Place

Connect with Andrew:

Website:  Andrewsyrios.com

Podcast: The Good Stewards Podcast

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 

TRANSCRIPTION

Intro: Hey guys. On today's episode, we're going to have Andrew Syrios. Andrew had been investing in real estate for the past 10 years. He does mostly single families and some small multi-families in Kansas City, Missouri. I like the fact that he's scaling a business that most people say is unscalable, which proves time and time again that there are many ways to become a successful real estate investor. So stay tuned and enjoy the interview.

Lady: Welcome to the commercial real estate investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to off-market strategies.

Don: Hey, Andrew, welcome to the show.

Andrew: Hey, thank you for having me.

Don: Yes. You're welcome. I know you're based off Kansas City, Missouri?

Andrew: Yes. Good old Kansas City.

Don: Yeah. And we just had a lovely conversation about Kansas City is one of the only cities that are two cities divided into two states. So, we were talking about how it is to be a real estate investor in an area like that. So, I guess I would want to ask you that again so that you could clarify to our audience a little bit about that.

Andrew: Put it on the record. Yeah, I mean, it is interesting. I mean, we call it KC Mo and KC K, we're based on the Missouri side. Every city's got different pockets, good areas, bad areas, areas that are too expensive for buy and hold and rentals and whatnot. I'd say the biggest issue is kind of there are some hard breaks particularly like Kansas City, Missouri has the main part of downtown Kansas City is in KC Mo. And when you go across the river there and the KC K, it shifts pretty drastically. So, you have some pretty drastic changes in some parts. In some areas, you go across the state line, and it's like nothing changed at all. That's some of it but also there are some law changes. That's also true. The county, they're six counties in the Kansas City, Missouri metro area. The laws are a little bit different. For example, in Jackson County, Missouri, the evictions can take substantially longer than they take Johnson County or Wyandotte county is what has Kansas City, Kansas. But at the same time when you evict someone, you have to store their stuff for a little while on the Kansas side. Missouri said they just tell you to throw them on the lawn.

Don: Is it a tenant-friendly state?

Andrew: I would say both Kansas and Missouri are pretty in the middle. But I think Kansas is probably a little bit more so on the tenant-friendly side.

Don: I know a lot of investors that would steer away from tenant-friendly states, and it's understandable. It's difficult.

Andrew: Yeah, well, if they put in something like California, and I think Oregon just put in rent control, and New York has a long history of that. And that can make it very difficult to make margin especially in these expensive places where you know, it's it takes so much money to buy a property and then you can't rent it up to the market. There's something in Kansas City they're trying to push for like the Kansas City tenant Bill of Rights. This would only be for Kansas City, Missouri, won't even be for other cities in Missouri, but it has some weird language. I'm not a lawyer, so I won't try to parse it out. But stuff like trying to restrict your ability to do tenant screening, and that's been sort of a thing throughout the country as well, which makes it particularly risky, especially if you either can't do it or can't do as many banks can do it stuff like that. I think it's just something that a lot of buying hold investors need to take into account when they're looking at an area. Generally, it's going to be probably trickier than that. It's not going to be impossible, but it's going to be more difficult something you need to be more prepared for.

Don: Yeah, most definitely. I just had a very interesting conversation with somebody that I did some networking with. And he's coming from New York, he's a nice guy, made some fortunate in real estate. And now he's telling me he's got a situation with one of the buildings that he owns. The building, he's trying to sell it and the building is worth around $2,000,000, but since it has tenants inside, it's worth around $1,200,000. Because in New York, you can't raise the rent unless you have renovated 75% of the building. And I'm sorry if I'm wrong about this, I'm not sure that's what I heard from him. And this is a true story. He's saying that the tenants hired attorneys, and they're asking him for $100,000 each to leave.

Andrew: I've heard of stuff like that where they're trying to do developments and there is that one guy like I'm not leaving no matter what.

Don: One tenant he said he's asking for $200,000. That was a point where I figured out that I'm done with this and he took his stuff, his family, everything and he just moved to Florida. I'm based out of Florida, Florida is very, very friendly with the landlords. It's very easy to do things here. And that's why you got a lot of investors. So, I would not even be able to fathom the idea of investing in a tenant-friendly state. But I know a lot of people do that.

Andrew: Obviously, tenants do need some protection. I despise slumlords as much as the next guy. And I don't think these things help that I think what they do is drive investment money out of the real estate, which is if you want to reduce the cost of housing and you want to make housing more affordable, the biggest thing you need to do is push investment into real estate. And so, it's completely counterproductive. Although I think it is important to recognize that tenants do need some protections they absolutely You know, there are slumlords out there and we especially I think as real estate investors should do our part to try to shame those slumlords into basically changing their ways because although I think a lot of them either incompetence or they ran out of money. Real Estate Investors go bankrupt too. So that's part of the equation. You can't raise rents. You can't do tenant screening. The biggest complaint we get from tenants like properties we're looking at is don't let anybody in here. That's not pro-tenant that's an extremely anti tenant. So...

Don: I want to talk a little bit about yourself and your career. So, I know that you've been investing in real estate in the past 10 years. I know that in Kansas City, Missouri alone, you own over 500 units. You're also managing your own portfolio, which is very, very interesting. Also, there's another interesting fact about you, Andrew, and that is the fact that you had your father as a figure, as a real estate investor in your life, and you're kind of stepping into his shoes. So, I want to ask you about that in particular, and how that affected your real estate career.

Andrew: My father got started real estate in Oregon back in the late 80s. And I was kind of when I was growing up and he bought a lot of student housing at the University of Oregon, which turned out to be a very good investment at that time. When I graduated from college, we were flipping houses. And eventually got kind of sick of that because basically, student housing got too expensive to buy and hold with anymore. Eventually variety reasons we came out to the Midwest, whereas housing prices are less expensive. It's easier to cash flow and my brother into joining me out here but my father is still in real estate. 

We have a podcast that we do the ‘Good Stewards Podcast’, it's a weekly thing on real estate, we just go over real estate topics and he's still very involved in the company focuses on Oregon. The way we like real estate is to buy and hold for cash flow. I like that Midwest markets that peaks and valleys aren't as high low in the Midwest, the South kind of those cash flow areas. And we want properties that can cash flow well. Some people are a little bit more into the vine, an area that's improving in one of these coastal markets that have a lot of upward potentials. There's upward potential here, but I just personally stress if the property cash flows with the appreciations are great, that's kind of the cherr