MFM Live: New Year New Deals Panel On Deals Currently In Progress

For this panel we have 3 successful multifamily syndicators and investors; Feras Moussa, Powell Chee, and Garrison Gilbert. Our speakers collectively own or manage almost 3,000 units, and are each actively working on a deal they’ll teach you the ins and outs on!
Get insight on deals currently being processed. Learn about Deals; from their start to finish, finding deals, structuring, to closing!

VIDEO TRANSCRIPTION

00:00
and we are now recording this is
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multi-family masters live
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hold on here
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people if you see me get
01:32
a little sidetracked here we have a
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01:37
is complete we are also airing live
01:41
on facebook right now if you are not
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registered for this zoom you are missing
01:45
out
01:46
we will have breakout network session
01:48
later on we will have a large q a
01:50
any question you have about anything
01:53
multifamily feel free to ask any
01:55
question you have about anything that
01:56
goes on with a deal
01:58
once you have it under contract feel
02:00
free to ask type your questions in the
02:02
chat below
02:03
comment on the facebook live feed
02:07
we’re here to answer answer it if we do
02:08
not know the answer to it we will find
02:10
it
02:11
um i already mentioned the youtube
02:13
channel multifamilymasters.com we have a
02:15
monthly newsletter
02:17
on top of that we have fun events
02:19
planned throughout the year
02:21
long story short we are
02:23
multifamilymasters.com and we’re just
02:25
here to provide as much valuable content
02:27
as possible my two business partners and
02:29
myself
02:30
we own managing control 3000 plus
02:32
apartments we have 30 plus years of
02:34
experience
02:35
me personally i’ve been doing real
02:36
estate full time for 20 plus years i’ve
02:38
done nothing else since college
02:41
i’m not a very smart guy but i do know a
02:43
thing or two about real estate and
02:45
that’s about all i know
02:47
plain and simple my name is garrison
02:49
gilbert i’m in baltimore maryland my two
02:51
business partners mr palchi mr ferris
02:54
musa
02:54
i will let them go ahead and introduce
02:56
themselves hit it fellas
02:59
sure so i appreciate that garrison um
03:02
kirsten also
03:03
awesome job for us on our on our intros
03:05
there’s a reason why we have them go
03:06
first
03:07
um so i am paul chee i um
03:11
i live in los angeles uh self storage
03:14
and multi-family investor
03:16
all of my investments have been out of
03:17
state so outside of california
03:19
um and let’s see started this group with
03:22
just
03:23
about eight of us about three years ago
03:25
so a little over three years ago was
03:26
actually
03:27
kind of our three year anniversary would
03:28
have been in december and
03:30
since then this group obviously has
03:32
grown significantly and like garrison
03:34
mentioned we’re
03:35
you know worldwide now and um
03:38
when it comes to my investing and what
03:40
i’ve been doing
03:42
i’ve been involved in seven different uh
03:44
multi-family projects five of them
03:46
different syndications
03:47
uh all over the past i would say four
03:51
years now
03:52
and most recently we’ll be talking about
03:55
probably my self-storage deal so like
03:57
some of the topics today or just like
03:58
some of the deals that we’re doing right
04:00
now and so i most recently closed on a
04:02
self-storage deal
04:03
but we’ll get into some of that later
04:04
but how about you ferris
04:07
all right hello everybody um hopefully
04:11
most of you know me but for those that
04:12
don’t know me i’d like to know you so
04:15
you know for me my background came from
04:17
the tech world
04:19
found out about real estate almost
04:20
accidentally i had a software company
04:22
for a little bit was building property
04:23
management software but kind of got into
04:25
the investing side and
04:27
realizes the things that i like people
04:28
numbers and systems
04:30
and so you know with that said kind of
04:32
double down have a company called
04:33
disrupt equity and today
04:35
you know we have properties in texas
04:38
and we’re also vertically integrated we
04:40
have our own management company we
04:42
have kind of the acquisition side we
04:43
have a couple of other key partnerships
04:45
and so
04:45
i know a lot about coalition and
04:49
you know the good the bad the ugly so
04:50
happy to kind of talk through all those
04:52
and so with that said you guys are not
04:54
all here to hear
04:56
me garrison talk about our backgrounds
04:58
right
04:59
today’s topic right we figured we would
05:01
kick off the new year you know really
05:03
focused
05:03
on kind of not really mindset like
05:07
talk about how do you kind of do that
05:09
first thing that a lot of people want to
05:10
hear about right which is
05:12
doing a deal and it just so worked out
05:14
kind of time wise that
05:16
me garris had something going on at the
05:18
same time and so
05:19
you know we figured hey it’d be a good
05:21
opportunity to really just do a little
05:22
bit of a showcase and kind of talk about
05:24
what we each have going on in terms of
05:26
the deal give the background about it
05:28
right what attracted us to it how did we
05:30
find it
05:31
what’s been going on in the process and
05:33
kind of what the
05:34
you know what the next steps are on each
05:37
you know with that said
05:38
garrison powell which one of you guys
05:40
want to go first
05:42
go ahead and pause it okay sure um
05:45
so i guess i’m going to talk about the
05:47
most recent deal that i did which it was
05:49
a self storage deal and i just closed on
05:50
it recently so
05:52
just to bring us back a little a little
05:54
bit
05:55
during covenant so how recently did i
05:58
close it
06:00
um two weeks ago two weeks ago i did not
06:03
know that answer better than you pal
06:04
come on man all right
06:06
two weeks ago um so during covid
06:09
i mean the way that i the way that my
06:11
multi-family operations go
06:13
it just ends up being since i’m all out
06:15
of state
06:16
um i don’t have one particular market
06:19
that i’m looking at
06:20
right and when you have one particular
06:21
market or maybe a couple different
06:23
markets
06:23
um you’re able to really dive in to sort
06:26
of understand your markets
06:28
um like an expert right i i kind of use
06:31
more of a broad approach more of a
06:32
shotgun approach
06:34
and that approach really doesn’t to me
06:36
it doesn’t fit well when colbot happened
06:38
so um because you’re not able to you’re
06:41
not able to find the
06:43
deals that you’re that are the great
06:45
deals when
06:46
when like things are going down and you
06:48
need to be able to act really fast
06:49
okay so i need a little bit more time uh
06:52
to do my evaluations of
06:54
markets and areas and everything so
06:57
when covet happened last year i did a
06:59
shift and and started saying well
07:01
i know i’m not going to buy anything for
07:03
at least six months
07:04
and so during the six month time i said
07:07
because i’m not going to buy anything
07:09
i have a lot of time now to look into my
07:11
secondary
07:12
asset class which has always been
07:14
storage i just never knew how to
07:16
invest in storage i didn’t know how to
07:17
evaluate it didn’t know what was a good
07:18
deal didn’t know how to
07:19
underwrite it or anything like that and
07:21
so that’s
07:23
what brought me to storage and um you
07:26
know
07:26
just like a lot of you and a lot of a
07:29
lot of us
07:30
you know i i did um you know i got some
07:33
coaching
07:34
did a lot listen to a lot of podcasts
07:36
youtube
07:37
uh forums websites anything i could to
07:39
just devour storage at that time because
07:42
i knew i wasn’t looking at multi-family
07:44
so
07:45
all that said was able to uh find some
07:48
deals
07:49
uh put some lois out there and then put
07:51
it under contract
07:52
in october so i’ll leave it there and
07:55
then we can
07:57
just as an intro to the to the property
08:00
honestly you want to kind of do the
08:01
intros and then we’ll
08:02
continue all right that works all right
08:05
i look well unless you want to continue
08:07
but i figure you know
08:09
i don’t want to hog the whole time
08:10
talking i feel like probably continue on
08:13
it’s going to look because they’re
08:13
they’re very different deals so i might
08:15
confuse people so i would say go ahead
08:16
and roll with it
08:17
okay so maybe the next question really
08:19
that i would add is
08:20
how did you analyze it right because i
08:22
know most people that’s the thing that
08:23
they want to understand right
08:24
how did you go from multi-family we’ve
08:26
talked about a lot
08:28
how did you learn about you know you
08:30
mentioned podcast reading books but was
08:31
that it sufficient and you just kind of
08:33
hopped in or
08:34
was there a specific resource or process
08:36
that you could kind of use
08:37
to analyze yeah so we did i did go
08:39
through some paid coaching
08:40
right so i i you know i bought bought a
08:42
course and bought an analyzer
08:44
realized like what the difference is
08:46
between that analyzer and how i’m
08:48
analyzing a multi-family
08:49
and if you’re good at analyzing a
08:51
multi-family i mean it’s not something
08:53
that’s
08:53
it’s totally different from you you know
08:55
you understand the p
08:56
l you understand what’s you know how to
08:58
how to underwrite things so
08:59
you can pick it up it’s not very
09:01
difficult but there is different things
09:03
that you should look for
09:04
right so in storage you’re looking a lot
09:05
more for square footage
09:07
where square footage isn’t really sort
09:09
of a metric that you’re
09:11
really you know that’s that’s really
09:13
crucial i guess in multi-family i mean
09:15
obviously it’s it’s important but it’s
09:17
not something that you’re looking at
09:18
and and you know i don’t know
09:22
it’s it’s not the most important metric
09:23
i would say that you’re looking at
09:24
multi-family
09:25
but storage you know you’re looking a
09:27
lot more at square footage
09:28
but you’re also looking at the micro
09:30
market probably
09:32
even more because you you have to look
09:33
at where your micro market is so
09:35
your three mile and your five mile
09:37
radius is super important to find out
09:40
what your competition level is like
09:41
because
09:42
in storage the major threat that you
09:45
have
09:45
is is competition is that it’s easy to
09:48
build
09:49
it’s easy to convert it’s easy it’s
09:51
cheaper to convert and build
09:53
so you can have a lot of competition in
09:55
your area that could drive down your
09:57
prices
09:57
a lot so that’s the major threat
10:01
whereas you know there’s such an under
10:03
supply of
10:04
of housing that it’s not a major threat
10:06
if somebody comes and builds a
10:08
uh an a-class property next to you it’s
10:10
not really
10:11
you know i mean you’re probably like
10:12
kind of happy you’re kind of like oh
10:14
they chose a good place and
10:15
they’re gonna drive up the rents and my
10:16
rents are going to probably go up along
10:18
with theirs right
10:19
so it’s a little different when when
10:21
you’re looking at
10:23
you know evaluating the deals but in
10:25
plain underwriting a lot of the
10:27
underwriting is
10:28
is the same there’s just some things
10:30
that like storage
10:32
i guess when you compare storage to
10:34
multi-family multi-family you’re looking
10:36
at probably in a 50
10:37
expense ratio just kind of a rule of
10:39
thumb it’s like 50 percent of the
10:40
expense
10:41
of your expenses will probably go
10:42
towards 50 of your income is going
10:45
towards expenses
10:47
and storage is less it’s like 40 it’s
10:50
kind of the rule of thumb that you can
10:51
use
10:52
just kind of a back of a napkin type of
10:54
rule of thumb
10:55
and um and that’s because there’s just
10:57
less there’s less turn
10:59
like the turnover costs are
11:00
significantly less uh there’s not as
11:03
much
11:03
uh utility costs so utilities you know
11:06
you’re not paying for a water and people
11:07
flushing toilets and things like that
11:09
you really have those costs and even
11:10
your electrical costs are significantly
11:12
lower
11:13
than most multi-family so um your costs
11:16
are lower
11:16
and so those are some of the things that
11:19
you got to think about when you’re when
11:20
you’re doing your underwriting
11:22
i’m guessing but so that’s why it’s
11:25
still forty percent not twenty and
11:28
comparing to an apartment
11:29
we got payroll you know multiple people
11:32
five six people on payroll right you
11:34
have
11:34
you know taxes insurance okay you can
11:35
say those are watchful like you
11:37
all the other miscellaneous things but i
11:40
guess the thing i realize is your income
11:42
is also lower right you’re making you
11:43
know more per
11:45
square foot of an apartment storage
11:48
right so i guess that’s why it’s hard to
11:49
say
11:50
really that’s kind of market driven
11:52
right so it depends like so
11:54
um some markets you look at
11:57
they can be you know in that say dollar
12:00
to
12:00
1.20 per square foot right which is
12:03
pretty comparable to a lot of
12:04
multi-family
12:05
right and it it’s all over the place so
12:07
some are really low like even when i
12:09
bought one
12:10
that one in baton rouge that i closed is
12:12
is like
12:13
right now it’s currently like 56 cents a
12:15
square foot
12:16
right the market is about 70 cents a
12:19
square foot
12:19
so it’s it’s probably lower than a lot
12:22
of other
12:23
multi-family but there’s other places
12:26
like i just did one i just did a tour of
12:28
a class facility here in orange county
12:30
california which is
12:31
you know a class expensive area
12:34
really nice property and i asked them
12:36
their their square foot they’re a dollar
12:37
per square foot and they said it’s 375
12:40
3.75 cents per square foot up to four
12:43
dollars per square foot
12:44
in in the summer time and i was like
12:46
that’s really high i mean that we don’t
12:48
i mean i’m saying multi-family that
12:49
we’re buying anywhere near that
12:51
number so unless because if it was any
12:54
cheaper people would have lived in self
12:55
storages in california
12:57
expensive housing is right so i know
13:00
that’s what everyone is thinking
13:02
all right well then you want to so then
13:03
do you want to continue on so okay you
13:04
talked about how you
13:05
got educated he taught the deal kind of
13:08
things you were looking at
13:09
kind of tied together right how did you
13:11
finance it which is a critical piece
13:13
right of anything
13:14
and then the other piece of that too is
13:16
what did you
13:17
terms of the equity right did you buy it
13:20
yourself did you do something else right
13:22
kind of help people understand that and
13:24
and maybe also
13:25
given that we’re multi because we’re not
13:27
real estate masters right
13:29
tie it back to real estate in terms of
13:30
how each of those things compare right
13:32
into what people expect yeah so
13:36
um structure wise i did structure this
13:39
as a joint venture
13:41
and i plan to do joint ventures probably
13:43
from now on
13:44
um instead of syndications and that’s
13:46
because just in terms of
13:48
size of properties so this the size of
13:50
the property the property was
13:51
um it’s 675 000 for the purchase price
13:55
of this property
13:56
which is not that much um obviously
13:58
compared to many of the syndications
13:59
that you’re seeing right so the
14:00
syndications to be
14:02
12 to 30 million dollars right and so
14:05
675 is not a big purchase price
14:07
so i didn’t need a lot of i didn’t need
14:08
this indicator right it’d be overkill to
14:10
syndicate this
14:11
um but also i also you know i’m coming
14:15
from the multi-family background and
14:16
nobody knew that i was necessarily going
14:18
into storage at that time
14:19
and i didn’t really want to bring in any
14:21
investors i just wanted to bring in
14:23
maybe a couple of family and friends
14:25
and so i didn’t want to get a big deal i
14:26
wanted to get something that i was
14:28
manageable
14:28
and even though its purchase price is
14:31
pretty low
14:32
i mean it’s 20 000 square feet it’s 170
14:34
units 175 units so it’s not small it’s
14:37
it’s
14:37
it’s a decent sized property it’s just
14:39
that the purchase price is pretty low
14:41
um that all said so jv did it with a
14:44
couple different partners
14:46
um plan us to continue to jv it i do
14:49
structure it a little bit like a
14:50
like a syndication and it’s a little
14:52
sort of complicated to get into
14:54
at this point but um it is modeled after
14:57
syndication but
14:58
the actual structure is a jv all right
15:01
um
15:02
however the the big difference i guess
15:04
with the jv and the syndication is that
15:06
the jv
15:06
is that everybody has to be active right
15:08
everybody is active so everybody is
15:11
uh getting all the communication
15:13
everybody is understanding where we are
15:14
with the process and
15:16
and uh has voting rights and things like
15:18
that and also everybody’s also
15:20
um what do you call it everybody’s also
15:23
uh liable too right so you’re you’re not
15:26
a passive investor where you’re you
15:27
you’re not held liable you are
15:29
potentially liable in this property as a
15:31
joint venture um the second part of what
15:35
you asked about
15:36
uh the lending side so the lending
15:39
i found in in multi-family to be much
15:42
more straightforward
15:43
than storage store self storage the
15:46
lending seems to be all over the place
15:48
especially because when you’re dealing
15:50
with loan amounts that are under a
15:52
million dollars
15:53
um you’re talking about bank loans
15:56
and bank loans can be all over the place
15:59
right this bank doesn’t have to
16:01
may hate storage we we found one that
16:05
a couple of them that were they just
16:07
told us you know you’re
16:09
you need to have such i don’t know they
16:11
just basically didn’t like storage at
16:12
all you know
16:13
their terms that they had they didn’t
16:14
like storage at all there’s other ones
16:16
that really like storage there’s other
16:17
ones that specialize in storage
16:18
and your your loan terms can be all over
16:20
the place plus
16:22
you can add sba lending so that you can
16:24
get
16:25
government lending as well as so that
16:27
adds another wrinkle to it
16:28
but there is no fannie mae freddie mac
16:31
that’s only residential
16:33
so there is cmbs
16:36
and there is life insurance when you get
16:38
over that million dollar mark
16:39
so that could be similar to say fannie
16:41
mae freddie mac
16:42
in multi-family but there um there is
16:44
the lending is definitely
16:46
i would say a little more wild wild west
16:49
a little more uh
16:50
not so uniform than multi-family and
16:52
recourse
16:53
right yeah a lot of them you’re gonna
16:55
have recourse right so you know under a
16:57
million dollars
16:58
uh certainly recourse um sba lending
17:01
even though it can be over a million and
17:02
it could be um
17:04
it could be over a million could be
17:05
significantly over a million but it
17:07
still will be recourse as well
17:09
so you want to talk about what you end
17:10
up doing ultimately yeah sure
17:12
so actually um our plan was
17:16
sba basically said no to us and in a
17:19
weird way because they said we’re
17:20
uh you know i brought it i brought in
17:23
what i thought was a strong team
17:25
and a really strong team in terms of
17:26
liquidity net worth
17:28
and uh you know these type of things
17:30
experience
17:31
so i brought together a strong team and
17:33
the sba said
17:35
you guys are overqualified and you won’t
17:36
qualify for our lending and i was like
17:38
what that
17:39
okay so we just all of a sudden i had
17:42
never heard of that idea that you guys
17:44
are
17:44
you’re overqualified basically is what
17:47
they said
17:48
so uh they wouldn’t lend to us uh so
17:51
then i had to go through
17:52
um either a bank loan
17:55
or go through like a bridge loan and
17:58
then i decided but really the the bank
18:00
lending
18:01
the terms that we were getting weren’t
18:03
the best i didn’t really think that they
18:04
were the best and i didn’t really want
18:06
to get into it so
18:07
um i sourced out one of my private
18:09
lenders and
18:11
basically asked them hey i can told them
18:14
i can pay this much
18:15
to a hard money loan hard money lender
18:18
or the bank loan it’s going to be about
18:20
the same what i would pay you at this
18:21
percentage
18:22
um if you would like to i could just put
18:25
you in and just
18:26
have you be the private lender on this
18:28
and uh
18:29
they said yes so so basically i have a
18:31
private lender who who funded the debt
18:33
on the side you know funded the debt
18:35
um joint ventures on the equity side
18:38
and so right now it’s it’s basically
18:40
like a bridge loan uh with a private
18:42
lender
18:43
right and then so the plan is to
18:46
loan so we can for uh two more
18:51
two so we finance that out
18:54
and return that um return that capital
18:56
to our private lender
18:58
and maybe last but not least what was
18:59
the what were the interest rates that
19:01
you were kind of seeing
19:03
i was seeing about five to five percent
19:06
um so now again these are banks right so
19:08
five percent amortized from anywhere
19:10
from fifteen to twenty years
19:12
so five to five point two five percent
19:15
uh
19:15
five year terms some were and
19:18
willing to entertain a little bit longer
19:20
maybe like a seven year term
19:22
um and so that’s why i thought these
19:25
terms aren’t really that great
19:26
right and these are these are bank loans
19:28
right which is those are bank ones
19:30
yeah for those that are kind of newer
19:31
right multiple and of course where
19:33
you’re getting 30-year amortizations
19:34
you’re getting
19:35
you know five to ten right now
19:39
three and a quarter interest rate so
19:42
yeah definitely uh nowhere near it’s
19:43
nice awesome
19:46
perfect hey pal i got a question for you
19:49
i got a question for you if you had to
19:50
go back and redo your very first uh
19:53
storage facility you had to redo the
19:56
entire
19:56
everything about it loan finding the
19:59
deal everything what would you do
20:00
differently
20:04
um
20:07
uh let’s see you know truthfully
20:10
truthfully the only big obstacle that we
20:12
had really was the lending side
20:14
just understanding and learning the
20:15
lending side i thought that
20:17
coming from a multi-family background
20:19
and having uh you know been on a general
20:21
partner on five different syndications
20:23
that that would have lent a lot more
20:24
weight
20:25
to a lot of the lenders but it really
20:26
didn’t lend that much weight to them
20:28
they were they were we also were picking
20:31
up a property that was
20:32
a heavy value ad right 65 percent
20:35
economic occupancy right so only 70
20:39
physical occupancy right and we’re
20:40
planning to bring it up to you know 85
20:42
90
20:43
but they were they basically said to us
20:46
well maybe you’ve done something like
20:47
that multi-family but
20:49
truthfully you haven’t done it in
20:50
storage and we don’t really
20:52
feel like you’ve proven that you can do
20:54
that in storage
20:55
and i was like okay um so the lending
20:59
side was really the major obstacle
21:02
everything else fell through like pretty
21:04
quickly you know the
21:05
uh putting together the equity um i
21:08
basically
21:09
i only asked seven people all friends
21:11
and family like close friends and family
21:12
online seven of them
21:13
six of them said yes and they told me
21:15
within 24 hours yes i’m in
21:16
and i was like i’ve already raised it i
21:18
don’t i mean i raised it in one day and
21:20
obviously wasn’t that much
21:21
um to raise but i didn’t have to worry
21:24
about the race the race was easy to do
21:27
you know it’s really the lending side
21:29
that
21:30
that really kind of kept everything like
21:33
as a question mark
21:34
so i guess i would just say that like
21:36
you’d have to do a lot more research
21:38
specifically looking at
21:39
storage lenders not thinking
21:40
multi-family lenders are gonna
21:42
help you out in the storage side and not
21:44
you know so
21:45
i’ll just look specifically at lower
21:47
storage lenders
21:49
interesting awesome thank you pal
21:52
so okay i guess you know i was dwelling
21:54
a lot on storage because i know that’s
21:56
unique
21:57
also i kind of figured people want to
21:58
hear that but you know if anyone has any
22:00
questions go ahead and leave them
22:02
at the very end so we’ll go for about
22:04
another 25 minutes we’ll kind of all go
22:05
and then
22:07
and at the end we’ll do kind of open q a
22:09
right we’ll spend about 10 15 minutes
22:10
asking the kind of fire rapid fire
22:12
questions
22:13
and then we’ll transition on to our
22:15
breakout sessions
22:17
that said garrison you want to go next
22:19
yeah absolutely
22:21
uh so the deal that my team has under
22:23
contract right now it’s a little bit
22:24
smaller than what i would like
22:26
uh we have a 20 unit under contract in
22:28
the suburbs of atlanta
22:30
um i started focusing in on atlanta kind
22:33
of when covid
22:34
started back in march april i flew
22:37
into that city quite a bit i know ferris
22:39
knows that city pretty well
22:41
ferris owns a lot of stuff in that city
22:43
i own nothing in that city as of right
22:45
this minute
22:46
um but we ended up getting a 20 unit
22:47
under contract when kovitz started i
22:49
kind of switched gears
22:51
i get to speak at some of the biggest
22:53
real estate conferences around the
22:54
country some of the biggest multi-family
22:56
conferences
22:57
and oftentimes i talk about going direct
22:59
to seller
23:01
how to form those relationships how to
23:03
do creative marketing and advertising to
23:05
get
23:06
directly to that seller in order to find
23:08
some killer deals because
23:09
i lost my shirt in 2007-2008
23:13
i am the pickiest person there is when
23:16
it comes to finding a deal
23:17
and closing on the deal i’ve been there
23:19
i’ve done it i’ve closed on properties
23:21
i don’t need to save that clothesline
23:22
something it’s either a grand slam or i
23:24
don’t want to end
23:25
so when covid started i thought there
23:27
was going to be tons of opportunity i
23:29
thought the market was going to crash i
23:30
thought the world was going to come to
23:31
an end i thought i was going to be
23:32
buying properties for 10 cents on the
23:34
dollar
23:35
so i started going to atlanta every
23:36
weekend i started building all these
23:38
relationships and putting a team around
23:40
me to
23:40
build the relationships with the brokers
23:43
eight months later
23:44
couldn’t find anything where the numbers
23:46
were at least nothing where we wanted to
23:48
close on
23:49
so we ended up going back to the basics
23:51
we went direct to seller
23:52
found a killer deal on a 20 unit the
23:54
numbers and the cash flow are stronger
23:56
than any 100 unit that we looked at
23:58
i couldn’t be happier about this
24:00
property other than the fact it’s a 20
24:02
not 100
24:03
but with that being said i just now need
24:05
to create scalability or create an
24:07
economy of scale per se
24:09
in that local market and i’ve done this
24:11
before i’ve done that in baltimore
24:13
nobody moves to baltimore and says i
24:15
want to move to baltimore i want to buy
24:17
real estate or i want to buy
24:18
real estate let’s move to baltimore
24:19
nobody says that
24:21
but i was able to create an awesome
24:23
portfolio here in baltimore by
24:27
creating a strategy where i’ll buy one
24:29
property and then i’ll start buying
24:30
everything in the vicinity in order to
24:32
create that large multi-family scale
24:34
so a little bit ago i introduced my
24:37
business partner brent
24:38
that dude is an absolute brainiac not
24:40
only in digital marketing but
24:42
broker outreach and that’s his job on
24:44
our team is that dude knows every broker
24:46
in atlanta
24:47
um so we’re working on trying to create
24:49
that scale right now but that’s what
24:51
we’re working on at the moment
24:54
all right and so ultim you know
24:58
what’s your plan with it right in terms
25:00
of the team are you gonna do
25:01
jv like powell are you you know are you
25:04
gonna try to
25:05
syndicate or take it down yourself yeah
25:07
you know it’s a small it’s a smaller
25:09
property we originally had it under
25:10
contract for right around 1.3
25:12
1.4 million um we then went back and
25:15
retraded something i totally
25:17
suggest not to do but we did it because
25:19
we found some structural issues that
25:21
were not
25:22
disclosed to us um so we ended up
25:25
retrading it for about 200 grand less
25:27
250 grand less
25:29
[Music]
25:30
we are right now getting ready to do a
25:32
small syndication just because i want my
25:34
team to go through the uh
25:36
go through the motions of doing a
25:38
syndication because the next deal will
25:40
be a lot larger we have a couple other
25:41
bigger things in the pipeline
25:43
so we’re going to go ahead and do a
25:44
syndication smallest indication we’re in
25:46
the process of raising
25:48
a couple hundred grand not that much
25:50
maybe six seven hundred grand plus we
25:52
got a little bit of
25:53
seller financing on the deal whenever we
25:55
renegotiated or retraded it due to the
25:57
structural issues
25:59
got it cool and then last slide well
26:01
sorry last but not least
26:03
what are you doing on the management
26:04
side right 20 units is kind of the
26:07
it’s between do you use third party do
26:09
yourself and
26:10
you have boots on the ground there you
26:11
know what’s else planned on that we have
26:13
boots on the ground there
26:15
i have two business partners that live
26:17
within 10 minutes of the property per se
26:20
but we’re going to hire a third party
26:22
manager
26:23
only because that third-party management
26:25
company has
26:27
a lot of inventory in their database a
26:29
lot of sellers who will be
26:31
itching to sell in the next few months
26:32
and i’m trying to build that bond build
26:34
that relationship because
26:36
that property manager does not want to
26:38
lose those properties out of their
26:40
inventory when the owners
26:41
decide to sell and i think that i will
26:43
be the front runner
26:45
to buy some of that inventory off of
26:46
them
26:48
so that was kind of our game plan with
26:50
the property in the project in general
26:53
hey garrison i want to ask so you know
26:56
when
26:57
covet happened you decided to go for
26:59
atlanta so
27:00
why pick atlanta of any of the markets
27:03
that
27:03
i’m sure you could have picked along the
27:05
eastern seaboard or in the south
27:07
the wildland um i like georgia i like
27:10
florida
27:11
it’s a two hour flight it’s an hour and
27:12
a half flight for me super close super
27:14
convenient i have friends there i have
27:17
a place to stay when i’m there it just
27:19
made sense
27:21
and i thought there was a lot of growth
27:23
and a lot of opportunity in the city in
27:24
general
27:25
so it was a place that i wanted to go
27:26
and hang out whenever i tell people to
27:28
pick a market
27:29
um like all the people in our mastermind
27:31
whenever they ask me hey i need i live
27:32
in california i need to pick a market
27:34
i live in new york new jersey wherever i
27:36
need to pick a market where should i buy
27:38
number one where do you want to hang out
27:40
atlanta is a cool place to hang out
27:42
where do you have boots on the ground i
27:43
have a couple friends i have a couple of
27:44
business partners in atlanta
27:46
it just made sense um so that was really
27:49
the big reason behind it
27:54
no land is a good market i mean i like
27:56
to tell people
27:57
the investor not just because it’s a
27:58
growing market population growth all
28:00
that other thing but you could
28:01
you used to be able to find deals at the
28:03
attractive price points that make sense
28:04
right
28:05
and we’re gonna get priced out of
28:08
atlanta just because
28:09
you have a lot of people coming kind of
28:11
in from boston in from new york who are
28:14
used to doing these extensive rehab
28:17
five to ten eight thousand a unit like
28:19
we do they’re doing thirty forty
28:21
thousand dollars a year then
28:22
so you know i i feel like it’s gonna get
28:24
hard to start
28:25
continue to buy in atlanta we’ll another
28:27
one of our deals there
28:29
just because again there’s just so much
28:30
demand but yeah it’s a good market
28:32
and that was another one of our uh
28:34
reasons for entering
28:35
is like right now in this property right
28:37
here we’re spending about 22 to 23 grand
28:40
per unit on renovation
28:42
i fixed and flipped probably 400 to 600
28:46
houses throughout the last 20 years
28:48
i’ve i’ve done complete renovations 30
28:50
to 40 grand per unit and everything i
28:52
have in baltimore
28:54
for the most part that’s how i created
28:56
my value add over the last three or four
28:58
years and we’re gonna do the same thing
28:59
double down in atlanta
29:01
a lot of people are scared of that
29:02
amount of work for me it’s just another
29:03
day of work
29:06
so how about the lending side though um
29:09
you mentioned that you’re
29:10
you’re kind of at about 1.3 or 1.1
29:12
million or somewhere around there
29:14
what are you guys thinking about lending
29:16
you know i was hoping anton was going to
29:18
be able to do to the deal for us
29:20
um get some big loan you know but i’m
29:22
just a little bit short on that so we’re
29:24
probably
29:25
going i’m not the guy that handles that
29:27
part of it but we’re going with a small
29:29
local regional type of lender
29:32
got it for those that don’t know that’s
29:33
i’m guessing i’m saying uh
29:35
garrison it’s become for freddie’s small
29:38
balance right or fanny small balance
29:40
yeah which is usually you need a one
29:41
million dollar above loan amount
29:43
right and you said your purchase price
29:45
is one point three
29:47
one point nine well it was 1.3 before we
29:49
retraded then it got down to about 1.1
29:53
plus 25 percent down i’m only looking at
29:55
a yeah
29:56
that’s an 800 000 loan somewhere in a
29:58
big deal
29:59
got it makes sense awesome yeah and then
30:03
so
30:03
like where are you guys in in the
30:05
process right now
30:07
like what’s what happened this week or
30:09
like you know what are your
30:10
due diligence or where are you guys past
30:11
that or where are you at right now
30:13
this week we set up last week we set up
30:15
our investor portal we met with the sec
30:17
attorney
30:18
um so we went through that
30:21
um this week right here we’re talking to
30:23
the lender getting off our loan docs in
30:25
order
30:26
and just getting ready to close the deal
30:28
plain and simple we did all the due
30:29
diligence a couple weeks ago
30:30
like i think it was three days rent it’s
30:33
probably muted i think it was three days
30:34
before
30:35
christmas brent myself and my business
30:38
partners flew into atlanta did some due
30:39
diligence just hung out with each other
30:41
on a guy’s weekend kind of thing
30:43
um so we’ll probably get that thing
30:46
closed in probably about another
30:47
four to five weeks or so but we’re past
30:49
the due diligence stage everything’s
30:51
good to go
30:52
okay so you’re done with due diligence
30:54
you just now you’re doing the financing
30:56
part of it uh working towards the close
30:58
yeah just getting all the money lined up
31:00
and ready to go and a word it’s such a
31:02
small property worst case scenario is we
31:04
paid cash for we put all of our own cash
31:06
into it
31:06
and then we raised the money on the back
31:08
end
31:10
okay
31:13
all right so let’s hear about your deal
31:17
my man
31:18
yeah so i’ll transition to mine so again
31:21
so it’s another multi-family asset
31:22
so you know i’ve not uh didn’t pull a
31:25
pal and try to do something different
31:26
yet
31:27
so for us you know similarly right what
31:30
happened and
31:31
you know we made a strategic decision to
31:33
basically double down on operations
31:35
right
31:35
it was kind of opener for just
31:38
us in terms of okay you know who are the
31:40
guys are going to get through the next
31:42
six months right this is back whenever
31:44
you know march april you kind of didn’t
31:46
know what
31:47
held and so you know we spent really a
31:49
couple months just really doubling down
31:51
on our management company and really
31:52
building that up putting in
31:54
more systems more processes more proceed
31:57
you know open that up to third party
31:59
right well
32:01
you know fast forward to the summer time
32:02
and you know we start kind of looking
32:04
for deals right
32:05
and really that there was not a lot of
32:09
deals during the summer
32:10
and then august september october just a
32:12
ton hit the market right and
32:14
you know we’re looking at deals far and
32:16
wide on atlanta every deal in
32:19
you know houston every deal in san
32:20
antonio and most deals in austin we look
32:22
at very very closely
32:23
right we have a very kind of robust
32:25
acquisition pipeline and
32:27
very close on there was one point time
32:29
that i was nervous we were going to have
32:31
three deals on a contract at the same
32:32
time
32:32
right and um you know three huge deals
32:34
right three 200 unit deals and
32:37
fortunately we got nothing right and i
32:39
like to tell people the problem with
32:40
this business is second place is no
32:42
different than last place right
32:43
you either win or you don’t and so you
32:46
know we did
32:47
right well come kind of november there
32:50
was a deal that you know got mentioned
32:51
to us
32:52
we didn’t look at it very seriously
32:54
initially right
32:55
well it kind of makes start digging in
32:58
and it’s actually
32:59
in our backyard here in houston right
33:01
which is where we’re based
33:02
and you know it’s a smaller deal 136
33:04
units
33:06
but it’s in a part of houston lots going
33:09
on
33:09
right in terms of you know basically for
33:11
those that know houston
33:12
there’s a one of the basically biggest
33:14
highways in the country that just got
33:15
built so houston debate
33:17
you have downtown and then you have the
33:19
first loop highway around it
33:20
you have a second loop and you kind of
33:22
have a third one well this fourth one
33:24
right is the new really big one that got
33:25
built
33:27
it’s basically going to be longer than
33:30
the loop to complete the loop is longer
33:32
than going
33:32
from houston to san antonio that’s just
33:34
how big it is right it’s huge
33:35
but anyways this highway just got
33:38
completed last year
33:39
so it’s opened up a lot of access to
33:41
this kind of corridor that
33:43
is already a really good part of town
33:45
that now just you know
33:47
development an area we were familiar
33:49
with and ultimately it’s a
33:51
it was an asset that was owned by the
33:52
same seller for 27 years
33:54
right and so again one of the biggest
33:57
in the country the ones that own it and
33:59
have for 27 years so very clean asset
34:01
well-managed fantastic location
34:03
so it was really attractive to us and we
34:05
saw there’s just a lot of opportunity
34:07
in terms of you know getting in there
34:09
injecting cash and ultimately
34:12
letting the area kind of transition and
34:13
improve and so
34:16
we started a strong deal in terms of cap
34:19
rate it’s really hard to find good cap
34:20
rates going in
34:21
it had that it didn’t have deferred
34:23
maintenance and we’ve done deals that
34:24
are heavy
34:25
value-add i mean we’ve deals we’ve done
34:28
the nicer deals and
34:29
you know you start to learn to to know
34:32
who you’re buying from
34:33
right and so again we knew we were
34:34
buying from that made it attractive and
34:36
so
34:37
all the things that we were looking for
34:39
right and so ultimately we got it under
34:40
contract
34:42
and completed the due diligence looked
34:43
good and
34:45
you know from then you know nation right
34:48
we syndicate
34:49
raise the equity and you know now
34:50
marching towards the finish line
34:52
and so it’s kind of like what pal said
34:54
right in this deal
34:56
you know and still having a have another
34:58
store to open up next door right
35:00
well this deal right that whole area has
35:02
so much
35:03
new development that’s actually all good
35:05
for the one thing we didn’t realize
35:07
from us is kind of the southern end of a
35:09
very large master plan
35:11
development that’s been going on and so
35:13
you know for us
35:15
new developments in the area look
35:17
there’s a lot of demand for housing in
35:19
that area people want to live their
35:20
jobs are there etc and so you know got
35:23
us excited and one thing we found out
35:24
actually a couple days ago is lord now
35:27
is being cleared out as well so
35:29
you know we’re looking for these kind of
35:30
indicators that really tell us
35:32
hey what does the long-term outlook look
35:34
like right we’re not in it to buy a deal
35:37
for a year right we’re in there for the
35:39
you know five to eight year play
35:40
and so that’s maybe the high level and
35:43
the low level of the deal i mean i’ll
35:45
i’ll pause there
35:48
i was going to ask you ferris like um
35:51
you know with a couple things like
35:52
it being in houston and uh you ring in
35:56
houston
35:56
and a lot of your other properties being
35:58
either atlanta or san antonio or
36:00
other places did anything change or what
36:02
changed in houston
36:04
that now you’re able to pick up
36:05
something but maybe the last couple
36:07
years you
36:08
weren’t really looking at houston no
36:10
that’s a great question right so
36:11
three four years ago whenever we made a
36:13
conscious decision to go to atlanta
36:15
right we did it you know we could not
36:18
find deals at the right price points
36:20
meaning we couldn’t find yield right
36:21
meaning the price that we bought it at
36:23
was not producing enough revenue or cash
36:26
flow
36:27
that’s what took us to atlanta i’m
36:29
starting to feel the opposite right so
36:30
atlanta is getting really expensive
36:31
price points have gone up i’m not able
36:33
to find much yield
36:34
well in houston right with between or
36:37
between really it’s the fear of people
36:39
thinking of houston’s a one-trick pony
36:41
houston’s very diverse very different
36:43
than it was in the 80s and 90s right
36:45
and so you have activity in terms of
36:48
buyers in houston but
36:49
houston’s i mean massive job in
36:52
population
36:52
growth still right i mean it’s still one
36:54
of the fastest growing cities in terms
36:56
of population
36:57
besides being a diverse city and so it’s
36:59
got a lot of the good things that we
37:00
look for and ultimately the price point
37:02
started making sense in houston
37:04
right where you don’t have as much
37:06
institution
37:07
especially kuskovic so we’re starting to
37:09
look at a lot nicer deals right like i
37:10
mentioned we were close on two 300 unit
37:12
deals
37:13
that were much newer than what we
37:14
typically look for and so
37:17
together we’re starting to look at more
37:19
deals in houston than we used to
37:21
and to be honest i mean now we’re
37:22
looking at deals in houston more closely
37:24
than we are
37:24
deals in atlanta right atlanta as if
37:28
we know we might sell out most of our
37:30
deals in atlanta if we can
37:32
and you know where it makes sense right
37:34
and then continue to grow in texas it’s
37:35
just ultimately
37:37
you know what’s going on each of those
37:38
markets so that’s why we look at
37:39
multiple markets to begin with
37:42
okay and when you in terms of finding
37:45
this deal it sounded like
37:46
garrison went uh at first was looking
37:49
with um with brokers but then decided to
37:51
go kind of back to
37:52
his roots of of off-market type and
37:55
going direct to seller
37:56
so how did you find this deal um
37:59
yeah so i mean ultimately in the bigger
38:01
stuff right
38:02
there’s no such thing as a deal that
38:04
doesn’t go through brokers
38:05
right i mean for one way or another
38:08
because ultima as a seller it’d be
38:10
reckless for me to not use a broker to
38:12
try to save a quick buck right to be
38:14
honest i mean
38:14
the brokers have a deep rolodex who’s
38:18
hot for a market who’s hot for a certain
38:19
type of deal profile et cetera
38:22
right and so i’m you know if you’re
38:23
selling absolutely go through
38:25
through a broker but a very active
38:28
market right and so
38:29
you know the brokers still control that
38:31
that that kingdom that access and so
38:33
you know be conscious of that right and
38:35
you know
38:37
really work your with your brokers build
38:39
that report
38:40
and so for us again this deal that was
38:42
through a broker right it was a deal
38:43
that essentially was
38:44
with being marketed kind of uh it wasn’t
38:48
blasted it was
38:49
really on a short list and you know a
38:51
situation where a broker came across the
38:52
deal
38:53
and you know he knew where in the market
38:54
a newbie it might be a fit so
38:57
okay all right good and then
39:00
like uh where are you at right now in
39:02
your process so i mean
39:03
um or like when when is your plan do you
39:06
already finish your due diligence are
39:07
you already done with that part
39:08
working on the lending side or whatever
39:10
finish the due diligence we
39:12
finished uh the indication the equities
39:14
raised
39:15
in the account now we’re basically
39:18
figuring out
39:19
debt in closing so that’s kind of the
39:20
two pieces really that are left
39:23
and then how far out are you from
39:24
closing tbd i mean
39:27
february right and we’ll see if it’s you
39:29
know when it
39:30
ends up being right so we’re still kind
39:32
of waiting on getting financials and
39:34
some other stuff from the seller and
39:35
just tiger and all those things
39:37
okay we’re aiming for we were aiming for
39:40
mid of february so we’ll see kind of
39:42
we end up hitting that or just a little
39:43
bit yeah
39:45
i think it’s good for people to hear
39:46
kind of where where where we’re at and
39:48
when you’re when you’re in the middle of
39:50
those deals what you know what you’re
39:51
doing you know like
39:52
how fast you need to do your due
39:53
diligence as well as work on your
39:55
financing period
39:56
throughout that whole time and sort of
39:57
what takes precedent in your time
39:59
for people to realize too you know it’s
40:01
timeline slip right there’s a lot of
40:02
things that can impact the timeline
40:04
i mean there’s a deal that we
40:07
one is wanting us to do some management
40:09
for and you know psas can go on for a
40:11
month or two
40:12
right i mean you never know what happens
40:13
and so for anyone buying a deal just be
40:15
conscious that
40:17
have a high level plan of what your
40:19
timeline is but just be you know be
40:20
flexible right
40:23
that’s why sometimes you see those 1031
40:24
buyers that are really aggressive
40:27
they are time constrained right and so
40:29
nothing can blow up their their workflow
40:31
because that actually has some real
40:32
implications
40:33
yeah um
40:36
i got a question but kind of for both of
40:38
you too since it sounds like
40:40
uh i think our audience would like to
40:42
hear this too of like you know
40:44
it sounded like there’s been some shift
40:45
a little bit at least in what you’ve
40:46
acquired recently
40:47
maybe it’s due to covet or maybe it’s
40:49
due to the you know the things that have
40:51
happened this last
40:52
year but it sounds like um you know the
40:55
size of the properties
40:56
or or maybe the areas of location i
40:59
guess maybe could you tie it into like
41:01
how what your strategy was to coped for
41:03
for both of you or you know like why
41:05
why you chose this or what adjustments
41:06
you felt like you might need to make
41:11
it’s kind of a loaded question um
41:13
garrison you want to answer you want me
41:14
to answer
41:15
go for it you know
41:18
i think code would prove just how
41:20
resilient multi-family is right
41:22
you know people need to eat people need
41:25
to drink people need to sleep
41:27
government supports that and so honestly
41:30
while yes collections across multifamily
41:33
has dropped a little bit right
41:34
you know delinquency has crept up
41:37
you know didn’t necessarily go off a
41:39
cliff like you know hospitality or some
41:42
of the other industries and so
41:43
there’s been a lot of activity in
41:45
multifamily
41:47
i mean i wouldn’t say we the shift that
41:50
we made
41:50
was just really double down on
41:52
operations right put a lot more in place
41:54
just to kind of
41:55
be the leader in operation and that’s
41:57
what the next five years is going to be
41:59
in terms of who does well and who
42:01
doesn’t right operating more tightly
42:03
where
42:03
you know maybe the past five years
42:05
people have just been able to ride the
42:06
market
42:07
it you know fixes all rights all ships
42:10
so i think the next five years is gonna
42:12
be a little bit different in that sense
42:13
and so
42:14
maybe that’s my answer to that okay
42:17
garrison you know my biggest takeaway
42:21
from kovid
42:22
was i was all about student rentals
42:24
prior to
42:25
covid i absolutely hate student rentals
42:28
today um
42:31
students are not backing class at the
42:33
universities where i’ve been buying for
42:35
the most part i have a lot of vacancies
42:37
now i’m kind of torn
42:38
like i said nobody moves to baltimore
42:40
and says i want to buy real estate let’s
42:42
go to baltimore the demographics of the
42:44
city are
42:45
not super clean per se so
42:48
now my dilemma is i have all these
42:51
vacancies
42:52
no students no bodies in them do i go
42:55
ahead and do i mix
42:56
in these type of
42:59
city individuals living next to students
43:02
and then the students get pissed off or
43:03
the students get upset then the students
43:05
don’t want to renew their leases and i
43:06
potentially
43:07
shift the dynamics of the entire
43:10
property or just hold off and wait
43:12
out for kova to kind of finish up in
43:14
school to get back on track as normal
43:16
all of my properties are located in this
43:18
small pocket between john hawkins
43:20
university towson university
43:22
loyola and notre dame and
43:26
if i had to do it all over again i would
43:27
not focus on any student rentals and
43:30
that’s been my biggest shift since covet
43:31
started
43:34
okay good good well i think that’s i
43:36
think you guys are both
43:37
really forthcoming with those answers i
43:38
mean you don’t get those answers from a
43:40
lot of people truthfully
43:41
on interviews and i think that i think
43:43
it kind of shows
43:44
in in your recent track record and what
43:46
you’re doing right now that
43:48
a lot of times you’re open you’re
43:50
probably opening up to more
43:51
opportunities right so kobe kind of said
43:53
hey
43:53
there’s more opportunities maybe you for
43:55
the previous didn’t want to look at a
43:57
smaller
43:57
you know smaller property and now you’re
43:58
like yeah i’m willing to
44:00
take a look at that and if it’s a good
44:02
deal i’d like to get it same with me in
44:03
storage right it’s like
44:05
prior to copid i like storage but i
44:08
wasn’t going to buy any i wasn’t going
44:09
to look at it that much i spent 95
44:11
percent of the time on multi-family so
44:13
i didn’t have enough time to really
44:14
think about storage at all so
44:16
it just kind of opened up some you know
44:18
some potential opportunities i think for
44:20
all three of us as
44:22
as in our progress hey ferris other than
44:25
houston and atlanta what markets are you
44:27
looking at anything else
44:29
yeah so i mean we we we like most of
44:32
texas right even dallas we like dalles
44:34
but dallas
44:35
way too active once they’re getting
44:38
really expensive and so
44:39
in terms of you know doubling down we
44:41
like north carolina we like
44:42
you know charlotte raleigh diet rally
44:44
durham triangle kind of that whole pot
44:48
you know south carolina as well works
44:50
and we do like georgia as a whole
44:52
and we do like northern florida so those
44:54
are you know we we are doubling down and
44:56
just
44:57
brokers and kind of the follow-ups and
44:59
really trying to build that rapport
45:00
right i liked orlando a lot pre-coveted
45:04
i still like orlando right but
45:07
you know you don’t you don’t think that
45:10
you’re gonna have an epidemic that’s
45:11
gonna shut down
45:12
disney and shut down all the parks right
45:15
which then leads to lay awesome
45:17
uh you know you kind of don’t know but
45:19
yeah i mean we still
45:20
ultimately those are still growing
45:22
markets that we like
45:26
so perfect man awesome so with that
45:29
center right on time
45:30
let’s spend the next 10 15 minutes
45:32
people have questions go ahead and ask
45:33
the questions right
45:34
we’ll basically you know rapid fire
45:36
those i’ve asked them
45:38
and you know again feel free to ask what
45:40
you guys are interested in right this is
45:41
obviously for you all
45:42
and then maybe last but not least after
45:44
that we’ll do breakout rooms right where
45:46
we’ll basically
45:47
listen to basically groups of seven
45:49
people and that’s where you get to
45:50
network and get to know other people
45:52
right this business is all about
45:53
relationships it’s the people you know
45:55
i mean heck i met a person through you
45:58
know these types of events right
46:00
you don’t know who you might meet you go
46:01
do deals together you do
46:03
events together and you kind of grow
46:05
together and so that’s a huge part of
46:06
this
46:07
with that said let’s go ahead i’m going
46:08
to go ahead and just ask answer the
46:09
question ask the questions
46:11
i think this one was for you pal which
46:12
is how much of a loan did you need
46:14
of the total loan amount so we um
46:18
our loan our debt partner put in uh put
46:20
down 60
46:22
right so if you’re looking at um hard
46:24
money or any type of private equity or
46:26
private
46:27
lender or something like that you’re
46:28
probably going to ask them to put in 60
46:29
to 65 percent
46:31
and then you’ll raise the rest and if
46:33
you are a private lender that’ll do 80
46:35
90 come talk to me
46:39
all right let’s keep going uh what was
46:41
the cf for the price point you were
46:43
looking for fares
46:44
uh what does cf mean probably cash flow
46:47
i think i don’t know
46:48
oh the cash flow oh i mean ultimately
46:50
we’re looking for
46:51
you know we’re we we are cash on cash
46:53
investors we look for cash flow
46:54
we’re looking for 8 to 11 cash
46:58
throughout the life of the deal
47:02
uh next question question for the three
47:04
of you what is your main focus for 20
47:07
number one priority pal you first
47:12
okay so um my priority i guess right now
47:15
is is picking up is riding the momentum
47:18
that i have in storage
47:19
so like i said i have just closed on
47:22
this deal
47:23
the seller also wants to sell another
47:24
deal right so i want to
47:26
i want to jump on that really quickly we
47:28
try to have good relationship with him
47:29
so that we could
47:30
potentially pick up his second deal um
47:32
and then i’m almost under contract for
47:34
what would be a next another one
47:36
as separate one right so uh we’re just
47:39
negotiating the psa right now so we’re
47:41
pretty close and
47:42
got a really good team in place really
47:43
good team ready for i see a couple
47:45
people on
47:46
the team here and uh like just feeling
47:48
really good about that so i’m trying to
47:50
ride the momentum that i have right now
47:51
in storage
47:52
although just on a quick note um
47:56
last year at this exact same time
47:58
january of
47:59
2020 i was really close to getting a
48:01
multi-family deal under contract
48:03
and it ended up being that the seller i
48:05
was i was basically the only buyer
48:07
it was totally off market i just
48:09
happened to randomly
48:11
run into this one i could tell you that
48:12
story later but um
48:14
that seller decided that they wanted to
48:17
do the
48:18
rehab they said well we’re not going to
48:19
sell it we’ll we’ll do our own rehab and
48:21
we’ll
48:21
fix it and we’ll do all the stuff but
48:23
then obviously covet happened
48:25
and they weren’t in the position really
48:27
to do a lot of that rehab
48:28
and then cope it happens so they aren’t
48:30
feeling probably very good so i just
48:32
reached out to him
48:33
actually about two weeks ago and just
48:35
haven’t talked to them in about a year
48:36
and and they just said pal great time to
48:40
contact us
48:41
we’d like to talk to you about you know
48:43
seeing what we can do about this
48:44
property so
48:45
it turns out i might have a good deal
48:48
on that way as well so
48:52
all right garrison you want to answer
48:54
that question as well
48:55
my big goal for 2021 is to simplify my
48:59
life and focus on
49:00
cash flow no no shiny penny syndrome
49:03
stay focused on the big picture which is
49:05
cash flow cash flow cash flow
49:09
all right good answer first and yeah i
49:11
mean i’ll answer two for us it’s kind of
49:13
again
49:14
just doubling down on operations really
49:15
spend the next couple of
49:17
everything as much as we can and
49:19
continue to buy right
49:20
so you know we we we’re expanding to
49:23
more markets we’ve rebuilt our
49:24
acquisition pipeline
49:26
it’s pretty i like it i’m pretty excited
49:28
about it and so starting to leverage
49:30
that out and you know find the next set
49:32
of deals
49:35
all right so let’s keep going what are
49:38
the cap rates you are looking
49:40
for in multi-family storage
49:44
garrison no i’m kidding pal you want me
49:47
to go okay yeah i know
49:48
yeah well what are self storage i think
49:50
put ourselves storage cap rates that’s
49:51
the question
49:52
okay so i mean truthfully i mean
49:56
they could be just like multi-family
49:57
sort of all over the place they’re
49:58
probably a little higher than
49:58
multi-family is right now
50:00
it’s probably not as hot of a market as
50:01
multi-family is um
50:03
but that said in terms of what i’m
50:06
looking for
50:07
um all my deals are are have a heavy
50:10
value add to it so
50:12
if i was going to tell you that like
50:13
this deal has 65
50:15
occupancy right the the cap rate on it
50:18
is going to be terrible
50:18
right it’s going to be i don’t know two
50:21
or three or something like that
50:22
it’s going to be terrible at that
50:23
particular where it’s at right now
50:25
but that doesn’t that doesn’t mean i’m
50:26
not going to purchase this deal it’s 65
50:28
occupied right i feel like i could get
50:30
it to 85 85
50:32
occupied this could be a great deal i
50:34
would say that truthfully i don’t really
50:35
look at
50:35
cap rates necessarily like what am i
50:38
buying for the cap rate
50:39
i’m looking at if i think this deal is a
50:42
home run
50:42
and to me a home run is something that i
50:45
can comfortably project that i’m going
50:46
to be able to refinance
50:48
in three to four years and return my
50:51
investors 100 of their capital
50:52
right that’s what i want that’s the kind
50:54
of deals i want to do right now
50:56
and that’s what i’m looking for so
50:59
awesome
51:01
all right next one uh garrison maybe you
51:04
can shift towards grad students because
51:05
they will work
51:07
or going to school like med students
51:12
definitely thought about it let’s see
51:14
the next question is uh what’s your big
51:17
slash takeaway from 2020
51:23
yeah well i’ll go ahead and start that
51:24
just you know for me i mean
51:26
i’m just kind of being a dead horse here
51:28
that is kind of a shift to storage for
51:29
me i mean just feel like
51:31
for me it fits me a little bit better um
51:34
operations i think are a little easier
51:36
i think that it’s also team wise i’m
51:39
also doing more
51:40
going to be doing joint ventures instead
51:41
of syndications at least at this point
51:43
so i only want to work with a small
51:45
group of people and those
51:47
those you know those tend to be like my
51:50
friends or a lot of people in here
51:51
people that i know a multi-family
51:52
master’s people i just want to work with
51:54
i don’t necessarily want to work for
51:56
with um you know
51:58
70 80 passive investors who i may or may
52:00
not know
52:01
and things like that so that’s that’s
52:03
for me
52:06
my biggest takeaway from 2020 uh
52:09
be opportunistic there are opportunities
52:11
everywhere
52:12
um if you’re looking for it just take
52:14
full advantage of everything that’s
52:15
presented to you
52:16
keep an open mind all right
52:19
i guess for me um you know
52:22
you kind of don’t know what you what you
52:25
know right i guess
52:27
i’ve expected things to happen and
52:29
things you know do happen
52:31
and i guess maybe the takeaway is
52:32
ultimately cash flows king
52:34
right that’s maybe the biggest thing
52:36
it’s
52:37
seeing how quickly the bridge debt
52:40
market dried up
52:41
that was kind of interesting right and
52:44
just knowing you know hey
52:45
going in less times like these right
52:48
like we have a deal in atlanta where
52:50
we’re 65 leveraged i mean
52:52
you know how hard it is to not pay the
52:53
note on the deal like that it’s very
52:54
hard right
52:56
and so get a reminder just how powerful
52:59
kind of your structure can be right
53:02
using the right structure
53:06
let’s keep going uh powell how are you
53:09
finding storage deals so
53:12
mine are through brokers right now
53:14
they’re all through brokers
53:15
um nothing direct yet yeah
53:19
all right next question uh what is the
53:21
best way you have found to be the most
53:23
effective to find good deals
53:28
i mean building true relationships right
53:31
don’t make it just transactional with a
53:34
broker
53:35
right build the real world
53:38
get to know them be friends with them
53:41
send them you know
53:42
things like you do with any other friend
53:43
right so
53:45
i had a broker send me sausage the other
53:48
day so
53:49
you know like little this guy had hunted
53:51
and he got it processed at some fancy
53:53
place and sent it to me
53:54
right and so i’m gonna eat that this
53:55
week and try it out
53:57
build that relationship um
54:00
let’s see next question uh what are your
54:03
top three factors to consider for
54:05
choosing a market
54:07
answer that really quick for me job
54:09
growth population growth and yield
54:11
right are the price points you know
54:13
attractive there are markets that have
54:15
job growth and popular
54:17
right seattle if you want to think of it
54:19
but there’s no yield the price points
54:20
are too high
54:21
and so you know you kind of try to find
54:23
the balance of those three
54:26
um i’m sorry the next one i guess is
54:29
that me ferris and focusing on
54:31
operations uh where did you find the
54:32
most
54:33
money left on the table um good question
54:36
now
54:37
the bar in management is really low
54:40
and so the most money is just about kind
54:42
of keeping track of
54:44
all the right things and really doubling
54:46
down on
54:47
revenue boosting things and expense
54:51
reducing things right and i know that’s
54:54
kind of a very
54:55
uh what’s a word kind of
54:58
but it’s just really true right so
54:59
simple example these are things that
55:01
with any property operations is all
55:03
obvious things we all understand paying
55:05
rent we all
55:07
expenses like utilities right and so
55:10
things like you know for example
55:12
over time managing how staff does
55:15
overtime
55:16
right sort of an art to that and you
55:19
know
55:20
trimming down over time whenever it’s
55:22
not needed is an easy way to save a lot
55:24
of money right on some of these deals
55:26
so like how we you know what
55:29
what is the start of the work week and
55:30
at what point in time do we do kind of a
55:32
pulse and see
55:33
are people about to hit overtime or not
55:35
and do we need to what
55:37
we don’t need you to do work to saturday
55:39
right things like that that are
55:41
you know very easy ways once you know
55:44
about it to actually go and improve kind
55:45
of the process
55:49
all right next question uh what data
55:51
sources are you using for rent growth
55:52
projections costar yardy
55:54
i’ve noticed a lot of volatility and
55:56
projection
55:59
you got that one fair scarcity
56:07
it’s kind of i mean but really
56:08
ultimately all these are they’re all
56:09
projections right now
56:11
any projection that’s trying to model in
56:12
covid is not a very useful projection
56:15
that’s my
56:21
garrison you have any other ones that
56:22
you use are you co-star or hdr
56:26
okay um all right let’s see
56:30
so we’re already up at time so we’ll
56:32
probably answer like two more then we’ll
56:33
call today
56:34
uh let’s see doesn’t california pal or
56:38
are they strictly out of state
56:40
yeah all mine are out of state so
56:42
everything’s outside of california
56:46
and then at least if you had to start
56:49
over
56:50
how would you find your first five
56:51
investors
56:54
i’ll tell you my first five investors
56:56
would probably be my friends and family
56:57
so um
56:58
that they’ve i mean that’s that’s just
57:01
who it is
57:02
like when i first started investing the
57:04
first people i was telling about the
57:05
first people i was excited to tell them
57:07
like
57:08
what i was doing and and how this is
57:10
gonna be great and how they should get
57:11
involved and how they should learn and
57:13
all the things that i’m learning and how
57:14
excited i was as my friends and family
57:16
right and then
57:17
pretty soon they they were just asking
57:18
me you know okay like hey you got
57:20
something and
57:21
they were the first people that i asked
57:23
in my storage unit so
57:24
um i’m i know it sometimes can be a
57:27
little difficult
57:28
thing if you have this sort of weird uh
57:29
if you have that type of relationship
57:30
with your
57:31
family you might not discuss money or
57:34
you might not want to borrow from each
57:35
other and things like that but
57:37
with me and my family it’s been uh
57:40
you know we’re all just very open with
57:42
it so
57:44
absolutely awesome
57:48
well then i said we call it a wrap right
57:50
on time everybody
57:54
very much i am about to end this
57:57
facebook live we are about to hop in
58:01
uh networking breakout sessions in the
58:04
meantime we are multifamilymasters.com
58:06
if you missed any portion of this
58:08
recording
58:09
and you want to watch it check out our
58:10
youtube channel typically we uh
58:13
launch tonight’s meeting tomorrow
58:15
sometime during the afternoon
58:16
get on youtube type in
58:18
multifamilymasters.com if you’re not a
58:20
member of our facebook group
58:22
search for the uh facebook group
58:25
multifamilymasters.com
58:26
six to seven thousand members if you’re
58:27
looking to learn shared network
58:29
and grow in this space we have a
58:32
mastermind feel free to reach out to
58:33
myself
58:34
ferris pal or bethany we would love to
58:37
have you involved we want to hold you
58:39
accountable because we want to partner
58:40
with you
58:41
so in about 50 seconds or so we’re going
58:44
to launch
58:44
into uh breakout rooms and then we’re
58:47
going to come back to one large room
58:49
then
58:50
i’m gonna let this channel open all
58:51
night long as long as you guys want to
58:53
network
58:54
take full advantage of it anything else
58:55
you want to add power ferrus
58:57
so how long are we gonna do the breakout
58:59
session for we’ll do the breakout rooms
59:01
for probably five to seven minutes eight
59:03
minutes or so
59:05
um and then we’ll all hop back in here
59:07
to the main room and then i’ll jump off
59:08
of here and if you guys want to network
59:11
uh grab each other’s contact information
59:13
someone just asked a question what would
59:15
you do to
59:16
find your first five investors get every
59:18
person’s name
59:20
cell phone email that you talked to in
59:21
your breakout room first and foremost
59:23
take action
59:25
okay i would say that let’s um
59:29
i was gonna say basically our just a
59:30
reminder too
59:32
next month’s mfm live we are having
59:34
brandon hall a cpa
59:36
talking so very relevant very timely
59:39
i think everybody will love that he does
59:40
a good presentation
59:42
awesome thank you guys for showing up we
59:44
do this once a month tonight i saw we
59:46
had about 80 people on this
59:48
and another 100 to 200 people watching
59:50
it live
59:51
thank you so much