MFM Live: Expert Panel of Real Estate Investors Talking COVID-19 Opportunities

Raw unedited footage from our 5-18-20 Online Meetup with an expert panel of real estate (apartment building) investors who currently own 10,000+/- units spread throughout the USA come together and give their opinions on the current market, current opportunities, and what they are seeing with their real estate portfolio given todays market conditions.

VIDEO TRANSCRIPTION

00:02
so tonight we are live on Facebook and
00:06
we are on our zoom channel we did this
00:09
two weeks ago this is our multifamily
00:11
masters live we have an absolute team of
00:15
hitters talking this evening I will let
00:18
them introduce themselves here in a few
00:19
minutes
00:20
who are we we are multifamily masters
00:23
what are we we are in the process of
00:25
building the world’s largest multifamily
00:27
cash flowing platform and how are we
00:31
doing that we have a Facebook group
00:33
multifamily masters com if you are not
00:36
in that Facebook berth search for it
00:38
right now and hopefully somebody will
00:41
put it in the comments on Facebook and
00:44
the comments here in a zoom link we have
00:47
approximately 70 Plus meetups around the
00:49
world for this one away being Hong Kong
00:52
with that being said our platform is
00:57
constantly growing kovat has slowed it
00:59
down a little bit we decided to go ahead
01:01
and launch this multifamily master’s
01:03
live we do it every other Monday 8:30
01:06
p.m. Eastern and we have a hundred and
01:09
one participants on the call right now
01:10
we had about 400 people sign up for this
01:13
call we’re expecting a pretty big turn
01:15
off awesome group of individuals let’s
01:19
see a little bit about us I mentioned
01:21
the Facebook group we have a YouTube
01:22
channel we have a mastermind if you are
01:24
looking to learn shared network and grow
01:26
this business in the right way I have
01:29
two of the best business partners in the
01:30
world on this mr. Farris Moussa mr.
01:33
pouchy between the three of us we
01:35
control and operate approximately 3000
01:38
apartments and we have decades of
01:40
experience but tonight we’re here to
01:42
learn from an absolute loop of hitters
01:45
that have a lot more experience and do a
01:47
lot bigger deals and what we do and I’m
01:49
super happy that they’re here and I’m
01:51
gonna let Ferris and Pao to go ahead and
01:53
take it off sure real quick I look I’ll
01:57
introduce myself and then first we’ll
01:58
get into it so my name is pawel Qi I’m
02:01
the founder of this group I started
02:03
about
02:04
two and a half years ago with just a
02:06
small group in Manhattan Beach
02:08
California since then and the group is
02:11
growing up to I mean I don’t know weird
02:14
like what 70 chapters now or something
02:15
garrison I don’t even count on right on
02:18
all right about that number yeah so
02:20
certainly grown a chrome really fast I
02:24
mean I like to say garrison said we’re
02:26
gonna grow up to the world’s fastest I
02:27
like to say we’re the universe’s fastest
02:32
you know we like to have fun and things
02:35
like that
02:36
I myself in terms of real estate
02:37
investing been investing in multifamily
02:39
for about three years
02:40
about a thousand units that I’m in a
02:43
general partnership of and you know
02:46
that’s a little Bellamy fussing over to
02:49
Ferris all right so I’m gonna be the
02:52
moderator today I’m based out of Houston
02:55
I don’t like boba tea nowhere near as
02:57
much as Paulo so if those who don’t know
02:59
how he really likes bubble tea that’s uh
03:00
that’s what his background is behind him
03:02
it’s not just tacky faces on it for me
03:06
I’m a managing partner of a company
03:07
called disrupt equity we have properties
03:09
for about 1500 units throughout Texas
03:10
and Georgia and yes garrison and pound
03:14
mentioned you would kind of help run a
03:15
kind of the leadership of MFM as well as
03:18
kind of we have three other partners as
03:19
well they get involved as well so that’s
03:21
a neat I’ll also definitely a shout out
03:23
to them as well I know I think we forgot
03:25
that last time too they’re a big part of
03:26
this effort as well and so I guess there
03:28
that said you know I’m gonna go ahead
03:30
and kick it off and so you know I think
03:32
Oh women affairs with that being said
03:35
Bethenny’s a huge part of this but
03:37
secondly well now that we’re being
03:39
recorded I just want to give everyone a
03:40
heads up that this is being recorded we
03:42
will be sharing this on YouTube tomorrow
03:44
it will be recorded so anything you say
03:46
just be aware of that
03:48
sorry about that ferrous now gonna be
03:51
careful when I say man if it’s end but
03:54
yeah so with that said definitely
03:56
excited about our panel this week you
03:58
know two bunches actually a bunch of
03:59
friends of mine so that’s good you know
04:00
definitely been wanting to put this
04:02
together
04:03
Kogan who’s kind of forcing function to
04:04
really get this into a kind of every
04:06
other week it’s but we do have a good
04:08
panel I’m excited to kind of run through
04:09
stuff but really for today’s panel we
04:12
want to do it a little bit different
04:13
last time really want to make it a
04:14
little bit more
04:15
you know Interactive between the
04:17
panelists so don’t feel like it’s a
04:18
moderation type thing will kind of help
04:20
facilitate but you guys are more than
04:21
welcome to chime in on each other you
04:23
know I even can share his bad ideas
04:24
kandi consider the bad ideas we can talk
04:26
about the good ideas and everything in
04:27
between right so that’s kind of either
04:30
style and you know we’re gonna run until
04:32
at least nine o’clock so probably after
04:33
about 45 minutes from now we’ll do a
04:36
breakout or we’ll split the group up
04:38
into kind of sessions right where you
04:40
know we’ll do breakout rooms is what we
04:41
call it and we’ll do that for about
04:42
10-15 minutes and let people get a
04:44
little bit more one-on-one interactivity
04:46
with the panelists and then you know
04:47
we’ll bring everyone back together and
04:49
do a debrief and call it a wrap so we’ll
04:51
try to be done by about 9:00 central
04:53
that’s kind of the time schedule but
04:55
with that said I mean I’m rather than me
04:57
introduce the panelists my introductions
04:59
a lot more boring than theirs they know
05:00
themselves much better than I do
05:02
and so to kick it off I definitely want
05:03
to have everyone maybe run through and
05:05
give a little bit like a 30-second
05:07
background about you your company and
05:08
maybe what you have for lunch today make
05:10
a little bit interesting so Ivan I know
05:12
you’re you’re chomping at the teeth so
05:13
let’s let you kick it off haha
05:15
hey thanks Cheers multifamily masters
05:19
pal Faris assumed garrison and
05:24
ambassador thank you guys to putting
05:26
this together
05:27
thank you for having me on honored to be
05:29
here as Paris said I am chomping at the
05:33
bit little tequila here my name is Ivan
05:36
Barrett I own and manage 3,000 units in
05:40
the Midwest my company BAM is 90
05:44
employees we’re north of 300 million in
05:47
assets a couple more deals in her
05:49
contract should put it too close to
05:50
thirty five hundred units and I started
05:54
house hacking a duplex all right what
05:59
about lunch
06:00
lunch I think eating trifecta meals as
06:03
part of my training routine I get these
06:05
pre packaged meals that I get them every
06:08
week that I’ve taken to the office
06:10
they’re the blend of things I’ve ever
06:12
eaten but if you put lots of hot sauce
06:14
salt and pepper on them they they’re
06:16
quite digestible and there’s all those
06:18
Iron Man’s we’re trying to do right so
06:20
all right next up let’s say rise you
06:25
want to go next
06:27
sure thanks Ferris
06:29
I appreciate the invitation to be on the
06:32
panel tonight my name is Raj Gupta I
06:34
live in Naperville Illinois it’s a
06:36
suburb about a half an hour west of
06:39
Chicago I’m the co-founder and Managing
06:43
Partner of impact prosperity partners
06:45
with my partner on a Simpson we own
06:51
about 1,800 plus units as GPS and about
06:56
125 million plus under management I’ve
07:01
been doing real estate investments since
07:04
about 2008 and focusing mostly in the
07:08
Dallas area I have a property in Houston
07:10
as well but we primarily focus on DFW I
07:16
had I had a skillet I had breakfast for
07:19
lunch shows a skillet hey guys thanks
07:32
for again thanks for having me guys
07:33
appreciate it
07:34
good to be here good to see all these
07:36
guys on the panel – it’s been a while
07:37
since you’ve hung out in person I know
07:39
it’s been good when we could do that
07:41
again
07:41
so squeak about us I’m Kenny Wolf
07:44
founder of wolf investments we started
07:46
out by a multi-family nine years ago
07:48
we’ve been involved in over 4,000 units
07:51
in five different states so have real
07:53
estate will travel is our mantra so
07:56
right now we’re in Texas Oklahoma
07:58
Louisiana and Ohio multiple markets in
08:01
Ohio in Texas we also enter a management
08:04
company and then we’re about to buy
08:06
another management company in Ohio
08:08
bringing everything in-house here by
08:11
July so it’s got a little bit about us
08:15
and then for lunch I had you know I’m
08:18
vegan so I had a big salad and then had
08:22
some chicken
08:25
barbecue coleslaw things like that I
08:29
mean I didn’t shake it was trademark
08:30
yeah chicken chicken come on Katie all
08:35
righty
08:36
I just got to say kidding if you have
08:38
those beyond burgers yet those are
08:39
amazing they are good
08:42
yeah I don’t know if ever ask any that’s
08:45
between beyond and the other one
08:48
possible possible thank you I am I am
08:52
team impossible myself selves oh maybe
08:54
I’ll switch now because when Kenny
08:56
speaks I listen wait should be alright
09:01
let’s see Jason you want to go next and
09:03
then glenncarroll
09:05
hey guys Jason pero I’m based in Erie PA
09:08
a my wife is my partner we’ve been
09:11
buying property since 2001 we started
09:14
with the duplex started syndicating a
09:18
couple years back so we’re right about a
09:20
thousand units two-thirds of that we own
09:23
ourselves with no partners and a third
09:24
of that we’ve we were GPS and and some
09:28
deals that we syndicated happy to be
09:30
here I appreciate you guys inviting me
09:32
for lunch I had breakfast for lunch
09:34
bacon eggs and toast I’m seeing a trend
09:38
I mean it’s a group of people that start
09:40
off their days late it’s kind of lunches
09:42
right all right and Glen you want to
09:46
drive a song you bet thanks guys for
09:48
putting this together I have to say I’ve
09:49
been onstage with a lot of you guys and
09:51
I just love the energy that you guys
09:53
have so I feel honored to be part of
09:55
this so thank you very much thank you
09:57
for yeah so I’m in Austin Texas I’m
10:00
actually sitting on my back porch right
10:02
now pretty soon there’s gonna be
10:03
fireflies floating in the background and
10:05
the crickets are gonna really get loud
10:07
in the Frog so been in the industry for
10:10
30 years and started off in property
10:13
management and actually started as a
10:15
maintenance man because new I wrote my
10:17
book maintenance man a millionaire and
10:19
had about 4,500 units and started
10:23
selling a lot of those in 2017 and 2018
10:26
and then finished up selling some in 19
10:30
I’m the CEO currently of obsidian
10:33
capital yay showered out with Dave tupa
10:36
and Mike wood field and love love
10:39
everything about multifamily have
10:41
touched many many pieces had a property
10:44
management company that I sold about a
10:46
year and a half ago so I know you guys
10:47
are acquiring I sold mine so you know
10:50
it’ll have lots of different
10:52
perspectives on on this call so
10:54
that’s my story and for lunch I had so
10:56
Polti with chicken and it was fantastic
11:00
that’s the best part of the whole day
11:02
yeah all right good good all right so
11:05
that’s a little bit of background thank
11:06
you all so maybe to kick it off you know
11:09
really the elephant in the room
11:11
wow I want to cut it again what’s
11:13
everyone kind of seeing in terms of
11:15
copán what are you changing
11:16
operationally for changing anything you
11:18
know how are you seeing collections and
11:20
maybe the other part of that too what
11:23
are you starting to see on the
11:24
acquisition side so that’s kind of maybe
11:26
the area I want to really focus in on
11:28
for the next 10 15 minutes and I’m just
11:30
gonna toss it out there might be I pick
11:31
on anyone who wants to kind of hop in
11:32
you know I’ll go first
11:34
I’ve been pleasantly surprised our
11:38
occupancy is still doing fairly well as
11:40
a matter of fact from March to April
11:42
tipped up about a half a point in
11:45
occupancy which surprised us and we’ve
11:47
collected about 93% of our rent on the
11:51
properties up in Dallas
11:53
there’s properties down in Lake Jackson
11:55
that aren’t doing as well that’s
11:57
submarket south of Houston so that’s
12:00
been very interesting and surprising
12:02
that we’ve done okay as a business we’ve
12:06
decided not to take advantage of the
12:07
forbearance on most of our deals that
12:10
Fanny offered and then on the
12:12
acquisition side we’ve seen some of our
12:13
investors kind of sit on the sidelines
12:15
so it’s taken us a little bit longer on
12:17
the raise on a couple of our deals so
12:19
kind of in a nutshell that’s my opinion
12:23
anyone else yeah I think so we self
12:26
manage all of our properties and you
12:29
know the thing I love about real estate
12:30
is it’s the most recession resistant
12:32
thing area can be in especially in a
12:35
tertiary market so we’re in Erie PA and
12:37
it was like nothing happened I mean of
12:40
course everybody’s on under lockdown and
12:41
not going anywhere but collections are
12:44
great we’re we’re filling units probably
12:46
faster than we usually do what I found
12:48
with this crisis is it’s forced us to do
12:50
things we should have done years ago
12:52
like move all of our everything
12:54
electronically just become more
12:56
efficient in operations so that’s been
12:58
it’s honestly been fantastic and we
13:00
figured out how to really kind of make
13:02
everything lean mean and and and run
13:04
really efficiently you know on the
13:06
acquisition side you know we’re
13:08
stream on a couple deals we had sent out
13:12
an email on Friday March 13th to our
13:15
investors for our next raise and the
13:18
next week everything kind of shut down
13:20
here and surprisingly you know we raised
13:23
the money in 24 hours from an email and
13:26
everybody stayed committed and the
13:28
interesting sort of aside to that is
13:31
that although all these investors are
13:33
asking to increase you know increase
13:35
their their investment and and so the
13:38
problem is we don’t have enough deals to
13:40
go around right now so that’s a good
13:41
problem but it gets pinned you know but
13:45
but you know Fannie Mae and Freddie Mac
13:47
have been now the agency dad I mean they
13:50
want you know 12 or 18 months of
13:51
reserves which is fine so it just takes
13:53
another level of underwriting and
13:55
planning and you know I think the some
13:58
of the questions they’re asking her a
13:59
little bit deeper and more difficult but
14:02
that’s fine you know we have our boots
14:04
you know boots on the ground ear to the
14:05
street with our with our units and so
14:07
not really not really an issue here but
14:10
it’ll be interesting to see how it all
14:12
plays out with folks that have asked for
14:14
forbearance I think the lenders have a
14:15
long memory and even though they say
14:18
they’ll do this without penalty just I
14:21
think that’s a road you don’t want to
14:22
travel down unless you really really
14:23
have to right I guess what I’d add real
14:29
quick to on the operations so yeah the
14:31
collections have been good we’ve we’ve
14:32
seen a lot of traffic and people leasing
14:34
units moving in so and then also to do
14:37
with all the kids being home we saw a
14:39
lot of our bigger units are three
14:40
bedrooms move faster in the year earlier
14:43
on the year than typical because usually
14:45
those wait so like April may to really
14:47
start leasing out we’re releasing those
14:49
in early March late February you know it
14:52
has anyone seen a slowdown and Leasing
14:54
because we haven’t either and I’ll kind
14:56
of I’m in theory at least I came up in
14:58
another panel as long but I didn’t want
14:59
to see the slowdown know we’re seeing
15:02
record leasing and we’re seeing we’re
15:04
seeing two groups we survey all our
15:08
managers we’re like Kenny and Glen we
15:11
manage everything we own we’re seeing
15:15
residents moving down from luxury just a
15:18
few more at each property and then we’re
15:20
seeing
15:22
also a few more teach property folks
15:23
that have decided not to purchase a home
15:25
this year they’re looking to rent so our
15:28
our occupancy is up almost two basis
15:31
points and in 45 days here and
15:35
collections overall I think we’re ninety
15:39
three and then the last two years we’ve
15:42
been buying a little bit nicer be plus a
15:45
minus vintage still five hundred to a
15:49
thousand dollars below new product and
15:51
there we are 99 percent collected this
15:55
month in ninety seven and a half percent
15:58
occupied I’m getting ready to raise rent
15:59
yeah right that’s kind of we’ve been
16:02
seeing so the theory came up in this
16:03
camp on a on a webinar for us I was on
16:06
with Neil that way basically you know my
16:09
thought originally was that we’re still
16:11
leasing whereas other apartments may be
16:12
shut down and so people that are looking
16:14
to move somewhere right we’re kind of
16:16
one of the only options right that’s
16:18
what I thought in this part of it but
16:19
then Anna brought up a good theory which
16:21
is you have a lot of couples that are
16:23
stuck together they might be bickering
16:24
and one’s looking for a place yeah
16:26
people that live to their parents right
16:27
and then now they work from home they
16:29
need more space they might be going and
16:31
leasing there’s kind of a lot of
16:32
interesting dynamics to think about but
16:35
uh yeah like we one of our deals we got
16:37
our Monday reports and one of them live
16:38
like it 100% we’ve never been a hundred
16:39
cent of that deal so it’s um it’s it’s
16:42
been surprising
16:43
everybody’s right there yeah I was like
16:47
hey we’ve kind of missed the boat on
16:49
that so we kind of started pumping the
16:51
brakes a little bit on the renovations
16:52
one of our properties in Fort Worth on
16:55
Cobble Hill and the manager called says
16:57
hey we’re getting a lot of questions
16:59
where people want these one bedrooms and
17:01
they’re willing to pay the renovated
17:03
price so we actually took our foot off
17:05
the break and told the contractor if
17:07
you’re comfortable getting in there keep
17:09
renovating those we were really nervous
17:11
that we wouldn’t be able to get the bump
17:13
you know due to people not willing to
17:15
pay but again that’s back on track so
17:18
interesting enough I think the punch
17:21
line is for us guys is that you know our
17:24
apartments are they’re reasonably price
17:28
they’re right behind food and shelter in
17:31
the hierarchy of needs yeah right and
17:34
the
17:36
and the Treasury has said we’re gonna
17:37
keep sending checks to everybody until
17:40
this thing clears we’re in a pretty darn
17:43
good position right on the deal on the
17:45
deal flow side it seems like there’s uh
17:47
there’s more opportunities to pick up
17:50
deals I I can’t wait to tell you guys
17:52
all this because I’ve just been like
17:54
giddy about it for the first time don’t
17:59
tell anybody else though for the first
18:00
time since to me nine hundred and where
18:02
your friends will listen the first time
18:04
since 2000 I think 16 maybe 2015 we got
18:09
a deal on her contract zero hard earnest
18:13
money talk about it I’m talk about a
18:18
twenty five million dollar you know two
18:20
hundred unit deal and I’ll just stay in
18:22
the Midwest we’ve been seeing yeah it’s
18:28
an interesting it’s kind of a scene two
18:29
parts to that I’m seeing similarly where
18:32
I know we can get them and then I’ve had
18:33
a broker literally call me and say hey
18:34
the seller wants 200 down hard a 1 mm
18:37
that’s not gonna happen
18:42
yeah I think um you know my experience
18:46
has been similar to the rest of you the
18:49
traffic has been really really strong
18:51
and collections have been really good as
18:53
well you know my fear is that a lot of
18:56
it I think has to do with the government
18:58
programs and support and so you know we
19:00
got the PPP so people were by design not
19:03
laid off yeah I don’t like Hughie
19:08
infinity I’m not saying I don’t like it
19:11
I just don’t know if it’s gonna be
19:12
infinity I look I mean we all benefit
19:16
yeah exactly
19:18
I’m not saying it’s the right move but
19:22
if you own income producing assets that
19:24
people need to live in I think look I
19:30
think there’s going to be competing
19:32
competing forces right so if if the
19:36
recession continues which I think it
19:38
will there will be homeowners will be
19:40
foreclosed on eventually and they will
19:43
become renters and that’s gonna create
19:44
some demand for multifamily so I think
19:46
you know that’s a good sign but I’m also
19:48
afraid after eight
19:49
weeks and the PPP program runs out
19:51
unless Congress just keeps passing more
19:54
and more stimulus which they might write
19:56
for a while you know but at some point
19:59
that’s probably gonna run out the
20:01
deficits are gonna go I mean they’re
20:03
already ridiculous and they’re there’s
20:06
got to be an end game there at some
20:08
point it may be six months from now I
20:10
don’t know but but and then I’m afraid
20:13
that you know what we’re seeing in terms
20:15
of traffic and collections may reverse
20:17
course and so I think there’s just a lot
20:19
of unknowns right now but I don’t think
20:21
we should over generalize maybe what our
20:23
experience has been in April and May
20:25
because I think things can change pretty
20:27
quickly yeah I’m you know my April May
20:32
we’re surprisingly much better than
20:34
looks painting I was expecting made to
20:35
be worse actually and it just been yeah
20:40
are there any panelists that have some a
20:42
property that’s doing well or not doing
20:45
as well because I think one of you
20:46
mentioned some of them are moving from
20:47
the aid to more affordable but does
20:50
anybody have any properties we do we’ve
20:53
got three well too soon to be three a
20:55
class we’re buying their but they’re
20:57
more your a a – they’re not the ultra
20:59
high-end stuff but we’re seeing record
21:02
collections and those we have 176 unit a
21:05
class here in dallas-fort worth
21:07
I think our delinquency for April was
21:09
like a thousand dollars over 126 units
21:12
so it’s kind of similar to the B+ space
21:14
where you know they still were getting a
21:16
day still have a job
21:17
[Music]
21:20
176 I’m in I’m in the same I’m in the
21:24
same boat as Kenny you know I I call it
21:26
an a – some might call it a B+ but were
21:30
you know 1990s early 2000s vintage we’re
21:35
still well below luxury but we’re a
21:37
little bit of a step above and we’re in
21:40
the same boat collections are like 98
21:42
and change percent collected and traffic
21:48
has fallen off a cliff but everybody
21:50
coming through the door converts right
21:53
we’re seeing like 25 percent of the
21:55
people but we’re getting say you know 75
21:58
80 percent converted Elise when I say
22:02
come
22:03
to the door I mean mostly electronically
22:05
virtually these days yeah I’m also
22:08
seeing fewer people move out so you know
22:11
I’m taking up you move too so I don’t
22:13
you know I don’t know how you guys are
22:14
are seeing or what you’re standing I’m
22:17
actually curious what have you guys been
22:19
seeing I’ll time you have a we had a
22:21
bunch of people cancel their their move
22:23
out notice yeah that’s in here are you
22:26
all seen a difference in the quality of
22:28
the traffic that’s coming in are you
22:29
seeing a decline or is it pretty much
22:31
the way it’s always been for me it’s
22:34
always it’s the same traffic I mean I
22:37
still have the same people that need to
22:39
be denied ironic on the delinquency side
22:43
that put in and said hey I need to you
22:46
know not pay my rent because due to
22:47
covet but they’re sending it from their
22:49
work email and I can’t that out so we’ve
22:52
got to figure out a response to trying
22:54
to take advantage of the landlord not a
22:57
victim so you know I am seeing some
23:01
people trying to do that take advantage
23:02
of the situation
23:08
you know the eviction corpse can start
23:10
up again this this week I think next
23:12
week so go check that kind of leads to a
23:17
question that I was gonna ask does
23:18
anyone have any properties in nan Texas
23:21
friendly state we’re all Texas friendly
23:24
states and uh tenant friendly states the
23:26
other team
23:27
you mean landlord friendly yeah so
23:33
Pennsylvania is sort of so pas kind of
23:35
middle-of-the-road
23:36
it’s a you know it’s not we’re not
23:39
having rent strikes here but it’s the
23:41
evictions are on hold until July so it’s
23:44
a little bit of a tough pill to swallow
23:45
if you have somebody you really have to
23:47
get rid of but one thing I’ve been
23:48
pleasantly surprised about is that
23:50
people that were kind of on the fence
23:52
you know really struggling that we
23:53
thought we’d have to evict before
23:55
they’re using their stimulus money and
23:56
unemployment money to to catch up their
24:00
back balances and I was kind of shocked
24:02
at that and even early on a couple
24:03
people paid their even knowing they
24:05
could stretch up fiction and little July
24:06
pay their act I got back on a track I
24:09
don’t know why I mean maybe you know
24:11
human tenants are better than I thought
24:13
they were you know but but we’re seeing
24:15
a positive trend in that air
24:18
we’re doing a modified cash for keys
24:20
where if somebody’s really been impacted
24:22
they’ve got no job and they’ve proven it
24:26
and they know they don’t have to pay
24:28
rent because even in Indiana landlord
24:31
friendly state we can’t evict right now
24:33
but we’re very upfront with folks saying
24:35
hey listen as soon as that’s lifted will
24:37
file an eviction on you and ruin your
24:39
credit or just give us the keys you know
24:42
we’ll keep your security deposit and
24:43
move on down the road and we here’s a
24:46
letter that says we won’t file an
24:47
eviction on you and so for the one or
24:49
two folks at every asset that we owned
24:52
that have been in that scenario it’s
24:55
been pretty effective hey do it do any
24:59
of you guys have any student rentals
25:03
yeah I do I do not I do I’m trying to
25:07
say mention it or not you pretend like
25:11
you didn’t Kenny if you wanted to write
25:13
it actually this week we had three
25:16
unsolicited buyers approached us about
25:19
those assets so so we made how how is
25:25
your student rentals been during the
25:27
whole Kovan I mean the parents to
25:29
guarantee the lease so there you know
25:31
rents are coming in it was more of a
25:33
concern about you know whether and we’re
25:37
near Baylor University weather Baylor
25:39
was going to be you know opening up
25:40
their doors for fall so it was really so
25:43
we already have a condensed leasing
25:44
season anyways and student housing so
25:47
but now it’s really convinced because no
25:49
one was what everybody was waiting to
25:51
see if Baylor wasn’t open their doors
25:52
for fall they did they announced it a
25:55
couple weeks ago so now we’ve got this
25:56
big even a bigger rush for renewals and
25:59
new leases but we’re bumping rents by
26:02
$200 a unit on some of those hundred 150
26:06
so I mean the demands there so the chip
26:09
students come back and try to say hey
26:11
because of Co move in and bail is
26:13
shutting down for this fall for the
26:15
spring they want a refund or a renege or
26:18
something like that no cuz we’re next to
26:20
a private school so they you know
26:23
there’s a like 60 grand a year
26:25
there so rents not the most expensive
26:28
thing for those folks so we did it in
26:30
hours I heard some folks had an issue
26:32
with that maybe had some public schools
26:41
first we did have some our students come
26:46
back and ask for that but we they signed
26:47
a lease and you know the lease was the
26:49
least so we stood on problem and the the
26:53
big concern is what’s going on with the
26:54
fall yeah that because most of most of
26:57
the rents were already paid prior to
27:01
this coming out the timing was good on
27:03
that that we pretty much had the
27:04
semesters rent I did have a question if
27:07
you don’t mind good seeing all you guys
27:09
haven’t seen you in so long is hope an
27:12
idea but the the question is no word
27:16
we’re getting about 93 we hadn’t about
27:19
93% of our rents collected but I was
27:22
just talking to the manager that we’re
27:24
low on all the other fees because
27:26
obviously we can’t do late fees and we
27:29
can’t do all this other stuff so we
27:30
noticed that overall collections were
27:32
down but we were getting about 93
27:36
percent of what we had had out there any
27:39
of you guys seen that as well obviously
27:41
you can’t do late fees yeah for sure we
27:47
experienced the same thing I mean
27:49
there’s the other income as has dropped
27:51
because of that not being able to charge
27:53
you late fees but you know collections
27:56
are still well into the 90s on most
27:58
properties especially in DFW so that’s
28:02
been a pleasant surprise
28:03
you know and we’ve had a few residents
28:06
that that if they got laid off we
28:09
entered into payment plans with them
28:11
payment arrangements and so that’s
28:14
something that our management companies
28:16
have been actively engaged in as needed
28:18
case-by-case then anyone else have
28:27
anything else to add before I shift
28:28
gears a little bit I have a general
28:31
question if I can ask I’m go ahead for
28:35
this one take for all future anyone has
28:36
questions please just go ahead and type
28:37
them in the chat
28:38
we’ll go through after the breakouts
28:40
we’ll spend the last 15-20 minutes going
28:41
through open Q&A okay now so I don’t
28:44
want to stop your flow fairs okay so if
28:50
you look at what’s happening right
28:52
stimulus is pumping out trillions of
28:54
dollars and I think a lot of the rents
28:57
right now it’s being paid through the
28:59
simulus unemployment rate it’s at about
29:01
26 million or 30 million dollars 30
29:04
million and unemployment is 30 million
29:07
so far so looking forward in the next
29:12
three months July through September
29:15
what’s everybody’s thinking here I don’t
29:20
know they’re hoping that 30 million
29:21
people will go back to work so now they
29:23
can regularly pay their rents are they
29:26
looking say hey he’s gonna 30 Millions
29:28
gonna turn into 40 50 60 as long as the
29:32
government’s printing checks for any
29:33
money we don’t care yes I was actually
29:36
that’s pretty much the question I was
29:37
gonna ask so it’s gonna change gears and
29:39
basically my question is no one ever
29:41
want to answer it and I do not want
29:42
everyone to have the same answer but
29:45
really Mike the question I’m gonna say
29:47
Chris is question a little different you
29:49
know no one has a crystal ball what do
29:50
you guys think the next kind of three
29:52
four months looks like and what do you
29:53
guys think the next you know the
29:55
following year looks like right so 12
29:57
months from today right and you know
29:58
what that’s kind of maybe the high level
30:00
thing I wanted to just see what
30:02
everyone’s thoughts were and Glen I’m
30:03
gonna do it backwards so let’s say you
30:05
go okay I’ll go first cuz that’s the
30:07
best part cuz nobody could say what I’m
30:09
gonna say oh yeah thanks you’re a good
30:13
man
30:15
I don’t want to be a wet blanket but I’m
30:18
very nervous you know what I think about
30:20
opening up restaurants and theaters and
30:23
all that other stuff but they put such
30:25
requirements of 25% and and I just
30:29
believe that the people that are just
30:30
hanging on to this you know PPP or the
30:34
stimulus I believe there’s gonna be a
30:36
lot of businesses that are not gonna
30:38
make it through this and I believe it
30:41
over time it’s gonna trickle down to
30:43
some of our tinna base
30:45
I do believe that we’re gonna look at
30:47
some delinquencies and more unemployment
30:50
across the board there may be people
30:53
that were you know renting our three
30:56
bedrooms and and Families merging in on
30:58
a unit I mean I don’t know how bad it’s
31:00
gonna be but I’m nervous about that and
31:03
so kind of kind of preparing a little
31:06
bit for the worst case but hoping for
31:08
the best that’s my opinion and then
31:11
maybe let me add one thing to it like I
31:12
want to add to the answers so what is
31:14
that doing for you on the acquisition
31:16
side is it changing your strategy is
31:18
changing your outlook or you know you’re
31:20
investing for a five ten year horizon
31:22
and so when when we bought our lat when
31:26
we closed on our last acquisition we
31:27
actually raised a rainy day fund it was
31:31
put in the checking account and so glad
31:34
we did because that’s kind of our go-to
31:38
in case you know things get really
31:40
really tight we haven’t had to dip into
31:42
that but under the forward basis we are
31:44
raising money for a rainy day fund and
31:46
put into negative cash flows and just
31:50
keeping it in our entity account instead
31:52
of the property management operating
31:53
account so we are underwriting a little
31:55
differently because we’re cautious
31:57
top-line we’re really not being
31:59
aggressive on our rents in terms of you
32:03
know rent growth where we would normally
32:05
see anywhere from a 3-2 percent 3 to 6
32:07
percent rent growth or doing 1 1 and a
32:10
half sometimes flat sometimes will bring
32:13
people right to where the market is
32:15
today with no increase in year 2 so very
32:18
conservative which is really making it
32:20
more difficult to buy deals but I’d
32:24
rather do that then buy a bad deal but
32:28
we are but like I said we have 3 deals
32:30
under contract so yeah who’s gonna go
32:38
next
32:39
no I I mean I think we all have a
32:41
certain level of fear of the unknown and
32:45
that’s that’s okay
32:46
I mean right we just have a crystal ball
32:48
but you know I’ve been in this 20 years
32:52
Glen you’ve been in it 30 years I mean
32:54
everybody else in the panel has been in
32:55
a long time I mean you know the economic
32:57
pendulum
32:59
back and forth and I think you know
33:01
although we’ll see delinquencies and we
33:03
might see some tenants struggling you
33:05
know in a bad economy homeownership is
33:07
potentially going to decline and a lot
33:10
of those folks that own homes well
33:11
become renters and so I think for the
33:14
type of asset that’s we’re investing in
33:15
you know cash flow real estate I think
33:18
there’s always going to be renters I
33:20
mean we may have to experiment our
33:22
rental criteria may have to be a little
33:24
bit more forgiving with people paying
33:26
around on time but I don’t want to be
33:29
you know Pollyanna and just think
33:31
everything’s great but you know we’re in
33:33
B and C assets in a tertiary market you
33:36
know the Erie Pennsylvania is the
33:37
Cleveland Ohio’s the you know you know
33:41
the places like that I like the Rust
33:43
Belt in the Midwest I don’t want to say
33:44
it’s not a worry but you know you can
33:48
you should always stress test your deals
33:49
and if your deal can’t withstand you
33:52
know 20% vacancy you know then you
33:55
shouldn’t buy it right if your guilt
33:56
can’t withstand holding back
33:58
distributions to your investors or maybe
34:01
you have to go out and lease your own
34:02
apartments or mow your own lawns and
34:04
whatever it takes but I don’t see a
34:05
disastrous long-term disastrous thing
34:08
happening I mean so many states are
34:09
itching to get back to normal and what
34:12
is normal gonna be like I mean who knows
34:14
I mean hopefully at some point you know
34:16
we have sports and we have get-togethers
34:17
all these things but it’ll take time and
34:19
more time in different parts of the
34:21
country but I just I think you know we
34:25
have a resilient asset class that we
34:27
invest in and I’m not losing too much
34:31
sleep over the the top-line revenue part
34:34
of this business and I’m not certainly
34:37
excited about the opportunities that
34:39
will come up and on the acquisition side
34:41
you know probably in about six to twelve
34:43
months down the road greed all right
34:48
Kenny it’s you up next all right so I
34:51
guess I’m a little bullish on our
34:54
economy you know I think it’s I think
34:58
this is another six to nine months and
35:00
the word then we’re back to cruising
35:02
again mostly because the stimulus stuff
35:05
you know like here in Texas I went out
35:07
to melting pot last Friday and I had
35:09
her sit-down dinner you know it was it
35:12
was full for 25% of the restaurant but
35:15
but people were there you know kids were
35:17
spending good money there were servers
35:20
on the floor making money so that was a
35:23
good good thing to see you know I think
35:25
it you know I got to go to my gym
35:27
workout this morning you know thank God
35:29
finally so anyways that workout man
35:32
yeah I know I mean it’s been tough
35:34
anyways the so you know I think I think
35:37
as we come back it’s gonna be a fairly
35:39
quick rebound I don’t know about a V but
35:42
I do think it’s gonna come back pretty
35:44
quick because in my opinion most of the
35:48
jobs lost were kind of the lower hourly
35:51
people and I think those are always the
35:54
first to be fired but they’re also the
35:56
first to be hired right and they’re
35:57
they’re mostly plug-and-play it’s not
35:59
this big training session you have to do
36:02
for that stuff so I guess I see it a
36:04
little bit differently on on that side
36:06
of it so I think we’ve got a very I
36:08
think we have a very very short window
36:10
here to lock up some deals that were
36:12
unstable freak over 19 and then also are
36:15
out of money those two things have to be
36:17
there for there to be a deal because if
36:19
you’re like all of us if we have a
36:20
stable deal are you guys selling right
36:22
now absolutely not so it said to me the
36:25
deals are gonna be only for these really
36:27
screwed-up deals you know mismanaged you
36:30
know lots of stuff so we’re looking
36:32
actually one of our properties there in
36:35
Ohio in the Midwest to copy Ivan there
36:39
it’s a neighbor and and we’re working to
36:42
learn about to sign a contract or we
36:44
just take over their loan and they’re
36:47
it’s 200 units so I’m about to get 200
36:48
units for basically you know no money at
36:51
the closing but I got a it’s about a
36:53
million dollar rehab so as long as we
36:55
can raise them you know get the money
36:56
I’ll rehab then we got the 200 assets so
36:58
I think they’re those are gonna be the
37:00
deals that you see and the multifamily
37:02
side in the next six to nine months you
37:04
know you know the deal that we have on a
37:06
contract now up and four worth it’s it’s
37:08
only 65 percent occupied you know so
37:12
there are those opportunities for the
37:14
people that are sitting on the sidelines
37:15
waiting you know for you know like the
37:18
prices were so high in 1920 that well
37:22
you know
37:23
there’s gonna be some deals out there
37:24
right now so those are the one who want
37:27
to pounce on you just got to underwrite
37:29
them correctly and maybe a little
37:30
conservatively but you still want to own
37:32
it
37:33
we’ll get to the other side of covet
37:34
right you passed all that cuz then your
37:36
basis is so much lower
37:38
it’s yeah and the low interest rates
37:41
right we’re gonna have low interest
37:42
rates for years guys because of this so
37:45
always is gonna put pressure on the on
37:47
the on the values going up and up right
37:50
so I mean to keep that in mind you want
37:52
to lock in your these hard assets today
37:54
because inflation is gonna set in
37:56
they’ll be very pumped in more than
37:58
double what they had no wait no nine
38:00
have stimulus in this economy it’s gonna
38:02
be insane what rents we’re gonna go to
38:04
in my opinion yeah I do believe that in
38:07
the end you have they’re just gonna be
38:08
so much money there some sort of
38:10
inflation is gonna creep back and
38:12
there’s also gonna be a divided wealth
38:13
that’s where it becomes really
38:14
interesting is you’re gonna have a lot
38:16
of equity that’s looking to invest into
38:17
something that’s what most like films
38:19
attract a massive loss and so it’s
38:21
better than a negative interest rates
38:23
and so all right Ron you wanna go next
38:27
sure so I agree with a lot of what Kenny
38:32
said I am not nearly as as bullish on
38:36
the economy as as you are Kenny and
38:39
here’s why I think you know our economy
38:41
traditionally it’s been above 70%
38:43
consumption and it’s a lot and I think
38:47
consumption is going to be I’ll just say
38:50
permanently changed in terms of behavior
38:53
semi-permanently permanently if you look
38:55
at you know hospitality travel leisure
38:59
you know restaurants sure as the economy
39:03
opens back up again and the local
39:05
economies open up again things will
39:06
start getting better but I think that’s
39:10
not accounting for behavior changes I
39:13
just think people are gonna travel less
39:14
they’re gonna go out less they’re not
39:16
gonna go to you know restaurants not
39:19
gonna stay at hotels as much and I think
39:21
some of that’s gonna be long lasting and
39:23
because consumption is such a large part
39:25
of our economy even after everything
39:27
opens up I I think I don’t think we’re
39:30
gonna get back to where we were pre
39:31
kovat and and I’m also you know as I
39:35
mentioned earlier I’m concerned
39:36
you know unemployment goes for 26 weeks
39:38
and that’s been a safety net for a lot
39:40
of people not to mention you know the
39:43
steam of the check stand and whatnot and
39:45
at some point that ends and there’s you
39:48
know 30 million people that are out of
39:50
work and even if let’s fast-forward six
39:55
months or 12 months
39:56
I think unemployment still gonna be high
39:58
it’s not gonna be we’re may hopefully
40:00
where it is now but it could still be
40:01
seven eight nine nine percent ten
40:04
percent these are huge huge numbers and
40:06
so I’m just I think this is gonna be a
40:09
difficult recovery I think it’s gonna be
40:11
a longer recovery than what a lot of
40:14
people think and from a multi-family
40:16
perspective I think demand you know
40:18
demand for Class B Class C c plus
40:21
housing is gonna be there because it’s
40:23
still some of the most affordable
40:24
housing out there but I think there’s a
40:27
real chance that rents may have to get
40:30
cut for affordability reasons
40:31
potentially and I think occupants who
40:35
will probably stay high but I think
40:36
rents are there’s a good chance we may
40:38
have to cut rents as incomes drop and
40:40
continue dropping from an from an
40:43
acquisition standpoint I not
40:45
underwriting any any rent increases at
40:48
all and and then stress testing for rent
40:51
decreases and seeing how it under writes
40:54
I think Kenny you were saying like the
40:56
debt is so cheap right now that that’s a
40:58
mitigating factor and it helps with the
41:00
underwriting so I’m kind of looking at
41:03
trailing three cap rate on actuals and
41:06
looking for at least a three to
41:08
three-and-a-half point spread between
41:09
that t3 cap rate and the interest rate
41:13
on the debt and that’s just kind of one
41:15
of my rules of thumb and if that spread
41:17
is there then maybe the deal works hey
41:20
ROG are you still opening that
41:22
restaurant Indian restaurant is that
41:25
what you’re saying well I know you like
41:33
Indian food and you have a lot of
41:34
friends so I leave it to me Obama to be
41:37
racist I can’t do it I’m a white guy of
41:39
a Midwest age 42 get away with it then
41:42
no I can’t I can’t
41:44
well I’m a Hispanic and I love Indian
41:46
food that helps it feel good
41:49
it
41:49
so good it was equally men whether it’s
41:52
vegan but no that was good commentary I
41:58
think I I’m probably in the middle
42:00
between both of you
42:01
Kenny is really bullish you know like
42:03
he’s mixed give him two months and it’s
42:06
everything’s gonna be back to normal um
42:07
yeah I think it’s I think the problem is
42:11
you have a lot of businesses they’re
42:12
gonna shut permanently whether it’s the
42:14
restaurant on the corner how long does
42:15
that take to come back right so that’s
42:17
kind of maybe the one thing I think no
42:18
one mentioned but I think I don’t want
42:20
you to kind of wrap that piece step on
42:23
up so you want to go next yeah I’ll go
42:25
I’ll go Glen gets to go first but I get
42:27
to go last should I should have put you
42:30
guys in the order I feel like I would
42:31
have had a good idea of how bullish or
42:33
bearish each person is and I couldn’t
42:34
tell my grandpa I’m doing I’m doing with
42:40
what first of all I’m doing with Glen
42:42
does and you know I keep a lot of cash
42:44
and liquidity on hand rainy day fund you
42:46
got a plan for the worst especially if
42:48
you’re an investor and you’re passively
42:51
investing in deals like this like you
42:53
need to have six months to a year of
42:54
liquidity before you even call any of us
42:56
in my opinion but I’m I’m I might be
43:00
more bullish than Kenny and here’s why
43:03
so and I agree Kenny we’ve got a tight
43:07
window to NAB up some deals here before
43:09
before we see them melt up so all right
43:13
little little fun share his little Fed
43:15
chair history here Ben Bernanke Janet
43:18
Yellen and now Fed chair pal Ben
43:20
Bernanke famous nickname is helicopter
43:23
Ben because he got on Capitol Hill and
43:26
said that he would drop money from a
43:29
helicopter before he would ever let a
43:32
1929 deep deep rescue deflationary
43:36
depression ever said and again Yellen
43:39
same school
43:40
how same school in fact pal got on last
43:43
night on 60 minutes and said that he’s
43:45
nowhere close to out of ammunition to
43:47
get us through this this deflationary
43:51
crisis which is not Kovac guys deflation
43:54
is been happening for a long time and
43:56
central banks around the world are
43:58
fighting it tooth and nail with money
44:00
printing this is a
44:03
test run for ubi if you haven’t heard it
44:05
yet you heard it here first universal
44:07
basic income paying people that can’t
44:10
get a job because of uber and technology
44:12
is going to happen people are going to
44:16
get a check and I’m thankful to be in
44:19
multifamily because again I sit right
44:21
behind food and water
44:24
cash will equal trash they’re gonna
44:28
print the living at a cash as much
44:31
as they have to and right now I am
44:34
trading in that toilet paper for income
44:37
producing assets that rise with the
44:39
coming inflation from all the money
44:41
printing the cap rates spread right now
44:45
I’m buying on a cap rate my in my market
44:48
you know five five fifty the ten-year
44:51
Treasuries now at 6070 basis points
44:54
that’s a four hundred and eighty basis
44:57
point spread before I add leverage in
45:01
2008 that spread was sixty bits we
45:05
aren’t even close what happens when when
45:08
all of us are doing reasonably well
45:10
collecting rents are our residents are
45:14
still getting checks or stimulus or
45:16
they’re working from home or a mix there
45:17
of what happens when we get out of this
45:20
and everybody wakes up to how well
45:21
multifamily is done and interest rates
45:24
are a hundred and fifty basis points
45:25
less than they were when we started it’s
45:28
going to be harder to find deals because
45:31
the pricing is going to go through the
45:33
effing roof inflation is going to go
45:37
through the roof now is it time to buy
45:40
and if you’re sitting on the sidelines
45:42
waiting for some 2008 vulture pricing
45:46
you’re gonna be on the sidelines for a
45:48
very long time amen who’s ready to buy
45:53
do we’ve got that who’s pumped up now
45:58
anyone I guess any of the panelists have
46:00
anything to add now that we heard
46:02
everyone’s thought no we gonna do a
46:03
little bickering back and forth however
46:05
I could be wrong so I could be wrong so
46:07
I also own a lot of gold a lot of cash
46:09
and a lot of crypto
46:12
that’s my portfolio an operating
46:14
companies like Kenny I love operating
46:16
company yeah you know I think the last
46:18
time I was on a panel I was physically
46:20
sitting with Roz on one side and Ivan on
46:24
another and we both and they both have
46:28
very strong opinions in their vote very
46:30
wise you know but you know it the
46:32
interesting thing about this and I think
46:34
we all share this in common you know
46:36
providing housing for people working
46:38
workforce housing is a good space to be
46:41
in and we can all talk about
46:43
unemployment or the spreads and the cap
46:45
rates or low interest rates but at the
46:47
end of the day at the end of the day you
46:49
know if you own these assets and and
46:52
people like you said the hourly people
46:54
are coming back to work we’re gonna be
46:56
okay
46:57
you know that’s I think one message will
47:00
be okay you will be okay as investors
47:03
we’ll be okay when we make as much as we
47:05
did in the past maybe not do two very
47:08
various reasons and different markets
47:11
but hey Glenn but we’ll be making a much
47:14
higher return than any other asset class
47:15
if you if you if you include the
47:17
volatility in the risk without an and
47:21
and we and you and I have access in
47:25
Kenny and everybody else does the best
47:27
debt on the planet which allows us to
47:30
lock in for extremely long maturities
47:32
which takes so much risk off the table
47:34
which no other real estate asset can do
47:37
yeah although I will tell you this that
47:40
right now that deal that we’re buying in
47:41
Fort Worth there’s only 60 percent you
47:44
know there’s no agency available for
47:46
that and the the bridge players are kind
47:49
of skittish right now yeah some have
47:53
pulled off some are you know kind of
47:55
capitalizing on it with with more points
47:57
upfront and a little higher and interest
47:59
rate and did you call my bridge guys
48:01
that actually owned the bank yeah we did
48:04
it I think I’ve been where we’re working
48:05
with them so thank you for that so yeah
48:07
oh it’s my pleasure they’re not these
48:09
bridge brokers right they’ve got their
48:11
own publicly traded Bank now if you’re
48:13
listening to this and you’ve got less
48:15
than 500 units you don’t have access to
48:17
this you got to get you got to get and
48:20
they like guys like Glenn with an
48:21
operating company better but there’s
48:22
some amazing debt available right now
48:25
if you
48:26
great operator no you’re doing yeah yeah
48:28
so that’s wouldn’t be a great deal now
48:31
that’s what makes these panels and these
48:32
events that these guys are hosting for
48:35
us and you know that when Ferris and
48:37
Garrison put all these deals are these
48:39
these Facebook live shows together
48:42
there’s a lot of resources and a lot of
48:44
opinions that a lot of the listeners are
48:45
going to capitalize on so again kudos to
48:48
you guys for putting these these groups
48:50
together so well I still owe Dave Stuben
48:53
more than I could pay back for some
48:55
advice
48:56
that he came up with for run for my
48:58
company at a breakfast so I’m equally
49:02
thankful good yeah awesome
49:05
Ivan question for you you since you’re
49:09
bullish on on things and on I’m bullish
49:13
I’m bullish on B plus a – yep Midwest
49:17
multifamily so do you think do you think
49:30
that cap rates are gonna compress in
49:32
that environment or do you just think
49:33
rents are gonna go higher and NY is
49:35
gonna go higher I think I think cap
49:37
rates actually have a very I’m listen I
49:39
don’t think a hundred percent about
49:40
anything and I always hedge my best but
49:42
I think I think cap rates on multifamily
49:45
workforce housing like 90s early 2000s
49:49
vintage B plus a – I think those cap
49:52
rates are gonna come down after this
49:54
crisis subside unfortunately I wish that
49:58
I wish I was I hope I’m wrong
50:02
yeah I think a lot of it will depend on
50:05
access to the capital markets and to ant
50:08
a good cheap debt you know because big
50:11
fish you’re gonna eat the little fish
50:12
and the big fish are willing to take a
50:14
lower return than me and Glenn and you
50:16
and when that when when they start
50:18
swimming around again looking for risk
50:20
adjusted yield in a safe environment
50:22
they’re gonna be looking to gobble up
50:24
more of what we’re trying to get our
50:26
hands on and so right now they have to
50:28
pause because of their shareholders and
50:30
portal ease and and all this uncertainty
50:32
and so sorry to cut you off ROG I’m with
50:36
Kate
50:37
I’m with Kenny I’m trying to get as much
50:38
deal flow as I can
50:40
and and I think I think you said you
50:43
know my investors are trying trying to
50:46
allocate more and rebounce their
50:49
portfolio away from from equities yeah
50:53
and look I think it’s also very early
50:57
right this is I mean although so many
50:58
people have lost their jobs but I mean
51:00
the stock markets now recovered you know
51:02
65 70 percent of the of the off the
51:05
cliff type of drop that it had and I
51:08
feel pretty strongly that’s gonna go
51:10
back down again and it’s gonna freak
51:12
people out again but I you know if more
51:16
and more people lose their jobs by the
51:17
way and we didn’t even talk about the
51:19
the virus I mean we have what 90,000
51:22
people dead now they’re predicting a
51:24
hundred thousand by June 1st that’s
51:25
probably gonna go to 200,000 or more
51:27
over the summer I hope not but good
51:31
chance little oil and and you know
51:34
that’s uh that’s that’s pretty bad and
51:37
that’s pretty ugly and I think I think I
51:41
think we’re I maybe disagree is I I
51:45
don’t see that optimism coming back and
51:47
I don’t see that consumer confidence
51:48
coming back for a long time and I also
51:51
don’t think I think people are gonna
51:53
think about the economy and about
51:55
investments and including real estate as
51:58
being in a riskier environment compared
52:01
to a year ago and I I think because of
52:04
that they’re gonna demand higher cap
52:05
rates and higher returns and I think
52:07
that’s gonna push values and prices
52:10
downward I just it’s gonna be considered
52:14
more risky we’re all money gonna flow
52:16
right what are their options they have
52:18
in terms of you know less risk
52:20
deleveraging deleveraging you know it’ll
52:23
go to pay off debt I mean look at the
52:25
debt is at record levels right corporate
52:27
debt all-time highs right right I mean
52:30
look at the financial sector I mean
52:32
there’s there’s so much data obviously
52:33
government debt but people hoard cash
52:36
when they get scared and I I don’t know
52:39
Ivan I think you talking about gold I
52:41
think that’s probably a good play but
52:43
holder – but that is gonna punish you
52:46
for putting cash in your mattress
52:47
they’re literally gonna beat you over
52:49
the head and force you to get your cash
52:51
out of the mattress
52:52
spend it yes you’re not gonna get paid
52:55
for savings that’s for sure
52:56
no I get it you know you know they’re
52:58
the economy is gonna change people are
53:00
gonna live differently but like look at
53:02
bike shops right now bike shops are out
53:04
of supply right there’s there’s
53:06
anecdotal evidence that the economy will
53:08
come back if I mean again it’s anecdotal
53:12
evidence but if you see my front porch
53:13
on a daily basis with the amount of
53:15
packages with my wife’s name on them you
53:18
know that she hasn’t slowed down at all
53:20
now I live in a bubble
53:22
obviously I’m a very lucky blessed guy
53:25
but this isn’t this isn’t an economic
53:30
crisis of in the financial sector this
53:33
isn’t a demand crisis long term it’s a
53:37
pandemic
53:38
yeah it’s nothing like the Spanish flu
53:42
this thing’s not going to be a V but the
53:45
the economy will come back and again as
53:48
it just relates to multifamily a plus B
53:52
minus maybe throw some C’s in there we
53:55
fit right behind food and water I mean
54:00
we’re seeing unsolicited government’s
54:01
shown that too right that’s what they
54:04
that’s what they want people to spend
54:05
their money on governments back on our
54:07
play Kinney sorry I cut Kenny off oh
54:10
that’s all right I’d say worse worse see
54:12
and unsolicited offers for a lot of our
54:14
a B and C class right now people are you
54:17
know most of them have a New York City
54:19
area code I don’t know if they’re bored
54:21
or just ready to get out of New York
54:22
City but to invest but we’re seeing an
54:26
solicit offers at pretty good pricing
54:29
not there’s no discount on the offers
54:32
that we’re seeing on our asset so I mean
54:33
I don’t see maybe we’ve got debt we’ve
54:35
got buyers out there we’ve got people
54:38
paying rent like I don’t see this as a
54:39
long-term you know well Kenny I think
54:42
you bring up a good point you know Texas
54:44
Ohio Louisiana Indiana we haven’t gone
54:48
that far above the mean versus like New
54:51
York or San Francisco right a Seattle
54:55
you know there’s gonna be some softness
54:56
in some of these hot markets right that
55:00
we’re not gonna experience no the other
55:02
thing too is to get space in the Midwest
55:04
in Texas right people there’s
55:06
to be had about people are looking for
55:07
more space now but no me super insight
55:11
on it we’re all buying below replacement
55:13
cost – let’s look at that right that’s
55:18
very true
55:19
but now I think I’m super insightful
55:21
information I love the back and forth
55:23
that’s always to me that’s the most
55:24
value of panels right it is kind of
55:26
digging into Glenn’s point earlier right
55:28
learning from each other what other
55:29
people are doing
55:30
what’s different kind of what’s
55:31
everyone’s kind of perception of reality
55:34
and the future right yeah and in case
55:37
Raj is right I’m buying a lot of gold
55:41
I’m gonna kind of make sure you’re
55:43
protected both that say if it’s any
55:45
smart of mr. wood right yeah all right
55:48
well so with that said we want to do
55:50
something that we did last time that’s
55:51
super successful and really kind of let
55:53
people have a little bit more of an
55:54
intimate conversation with the panelists
55:56
right and so what we’re gonna do is
55:58
basically split up the entire group into
56:01
how many channels do want to do Garrett
56:03
said we did it wondering okay I’ll do 9
56:07
to 10 people per room that gives us 16
56:09
rooms were at 150 people on zoom’ and we
56:12
have about another 80 people on Facebook
56:14
that will just kind of go dead right now
56:16
while we break off into our breakout
56:19
rooms and try to conduct a normal style
56:21
meet up with a little bit of networking
56:22
and so we will randomly split so
56:25
hopefully this list we get enough mix of
56:27
the panelists in there so across our
56:29
beers worked out pretty well last time
56:31
but you know it’s just an opportunity
56:33
people to get to ask panels more
56:35
questions the panel’s get to know the
56:36
people better – right I mean I have
56:38
several people in my little group last
56:40
time reach back afterwards it is
56:41
definitely a good way to have a 10 or 15
56:56
minutes and we’ll all be back here so if
56:58
you’re watching us on Facebook just hold
57:02
tight real quick but we’ll be back if
57:04
you’re if you are on Facebook and you
57:06
want to hit the zoom link in the
57:07
facebook chat feel free and you can
57:09
enter the conversations but we will be
57:11
back in ten minutes
57:12
there we go one two or three let’s rock
57:41
you
63:53
Wow
64:21
you
64:24
is that Sandra
64:27
is that Patricia yes it is hi there I
64:33
think it arouses on you my name is
64:37
Colleen that could be yeah I think it
64:40
would look how once I’m you and I think
64:42
everyone I don’t know if they were
64:44
dropped off or they just well it’s all
64:47
in separate rooms right now anyway they
64:49
you know do you know how this works
64:50
yes okay I think we’re all no room
64:53
together if you can’t get your screen
64:55
there’s about 20 of us in one room oh
64:57
and they’re all on you so that’s I’m
65:02
thinking that they’re all on you I don’t
65:04
know I’m thinking that he just put put
65:06
us in a little room just you and me
65:08
right now maybe there’s a third party
65:10
cuz you know but I don’t see anyone else
65:12
okay
65:13
Santa’s on yeah you are hi Sondra hey I
65:16
said I think everyone has been mute okay
65:20
we’re all in a room together it looks
65:22
like I don’t think so I think we’re in
65:25
breakout rooms
65:32
breakout they did breakout rooms and now
65:34
everyone’s taking a 10-minute break I’ll
65:36
be back
65:37
so what did I miss cuz I just got here I
65:40
had issues with my laptop and so did
65:43
this just start or what’s going on now
65:47
it’s been going okay too bad I mean I
65:54
just got in myself I just got home from
65:55
work
65:56
okay well you work that’s good I have
65:59
not worked in two months
66:01
well what’s insane was I um I haven’t
66:06
worked since November but then I got a
66:11
job where I’m coming in to try to revamp
66:13
um a homeowner’s association they’re in
66:17
great disarray so they brought me on
66:19
April 20th oh just in the middle of all
66:23
this yep Wow and so Rob is on here where
66:28
each logged on separate in different
66:30
rooms of the house okay
66:33
that was he looked like because I was
66:36
talking and so here a nother room
66:41
we’ll be back going on a second and so
66:44
where are you with that lovely beach
66:46
background oh I’m actually this let me
66:49
show you my real background yeah you’ve
66:51
got your virtual background going yeah I
66:53
do
66:54
[Music]
66:58
yeah I’m I’m in Nashville Tennessee so
67:02
nothing that’s my house behind it
67:06
completely different but I do it all in
67:09
different rooms right now garrison throw
67:12
us all in different rooms for a minute
67:17
breakout rooms he created breakout rooms
67:19
and so we’re all in breakout all right
67:25
that’s what you get for not paying
67:27
attention so so you’re in Nashville
67:32
Tennessee how’s the weather there right
67:34
now ah
67:35
today was iffy but it’s nice it’s um
67:37
it’s not too hot not too cold
67:39
you know mild 70s oh that’s nice yeah we
67:42
were like 90 today oh where did you say
67:45
you are New Orleans oh we have a big
67:48
difference
67:49
what’s the humidity it’s been it’s been
67:51
ridiculous so there’s no the hair right
67:55
[Laughter]
68:00
well I have the clip once I wear the
68:06
clip for a while I get a headache so I
68:08
gotta take it down so my brain doesn’t
68:10
hurt so much I believe that yeah that
68:12
makes sense so let me see if I close
68:15
this okay so how many do we have in here
68:18
let’s see if I know so garrisons in here
68:22
but he’s closed Bethany’s in here I’m
68:25
Joe I just joined hey Joe hey I said I
68:29
was having some whacky internet so I
68:32
went upstairs in my house and I joined
68:34
back and I didn’t I just realized I was
68:36
in a room and I heard someone yeah in
68:40
Los Angeles oh okay I came from Orange
68:44
County I escaped okay yeah you know I my
68:49
first investment he’s I still have it
68:51
it’s in East Asheville okay yeah that
68:53
air is doing very
68:54
right now yeah well you say that and I
68:57
got my property manager calls me he’s
68:59
like yeah your tenant wants to know they
69:01
can go but they’re due for at least
69:03
renewal he’s like they want another
69:04
thing go month-to-month I was like ah
69:06
because they were like the most solid
69:07
ones I’ve had so far
69:08
yeah and I got they both work in the
69:11
service industry so what do you expect
69:12
you’d like they were saying on the panel
69:14
they were probably using the stimulus
69:16
check just to cover last month so we’ll
69:19
see you know but yeah our company’s not
69:22
you know is actually doing better than
69:24
ill I do real estate I’m an agent out
69:26
here too
69:27
and Orange County’s seems to do it a
69:30
little better than we are in LA County
69:31
right I was with the Keller Williams in
69:34
Mission Viejo okay I was with kW and Los
69:36
Feliz but now with a company called
69:37
Douglas Elliman which is based in New
69:40
York City but kind of getting a you know
69:42
run out here so far they’re actually I
69:44
think my friend just Nashville with
69:46
compass right well you guys have 13
69:49
percent taxes we have zero state trust
69:52
me I know my relatives are in Memphis as
69:56
well my uncle his kids I mean they’re in
69:59
their twenties now but they’re all in
70:01
math it says how I kind of came about
70:02
Nashville cuz Memphis was like a little
70:04
up-and-coming for me at the time it’s a
70:09
different certainly different market
70:12
from Memphis to Nashville yeah it is
70:14
yeah you know what my uncle’s wife went
70:16
to um gosh what’s his school in New
70:18
Orleans I heard you say New Orleans
70:19
Loyola Tulane Twain yeah his wife went
70:24
there yeah so I hate to say this but can
70:27
you give me an update of what they
70:29
talked about in two minutes so I don’t
70:30
take too much of your time
70:31
Oh on the panel it sounds like the one
70:35
guy ROG seems pretty nervous about the
70:38
future of the economy I guess and the
70:39
other guys seem like they’re pretty
70:41
positive about it right okay would you
70:44
would you kind of get like he seemed
70:46
like he was just a little more skittish
70:47
I guess I didn’t watch it but knowing
70:51
like I just got home from work
70:53
but knowing Kenny and Garrison there
70:56
they’re very much opportunistic and so
71:00
they’re going to see the upcoming time
71:03
as the time when real estate would be
71:06
most readily cash
71:08
sure from those who didn’t properly vet
71:11
the properties to begin with
71:12
so those who bought on slim margins or
71:15
they bought with I am going to steal
71:18
those exact properties you were talking
71:20
about young lady but you know if you
71:25
bought with the complete value add or if
71:27
you bought with very slim margins or you
71:29
bought at a you know if you cap rate and
71:32
your whole your whole perform oh was
71:35
based on oh I’m gonna raise rents raise
71:37
rents raise rents and now you’re like oh
71:39
man what am I going to do if I can’t
71:42
even collect the bonus tracks or you
71:44
based your Performa on a you know oh
71:48
industry standard is 95 I’m gonna be
71:51
even worse and say 92 I’ll have 92
71:55
percent you know vacancy and right now
71:59
it’s not how many empty units you have
72:02
it’s how many non-paying units so
72:05
economic vacancy is what it’s going to
72:07
kill you which is the worst to have
72:08
because the tenants are just they’re
72:11
sucking the life out of the unit you’re
72:12
not getting any money for them so what
72:15
you do is you know you market you know
72:17
it’s you willing to pay you know where
72:18
where you want to be and you get ready
72:22
to strike because I don’t know about the
72:24
rest of the world but here everybody is
72:26
service industry and they had enough
72:29
money enough savings enough stimulus to
72:31
get them through April and May they’re
72:34
gonna be sucking air come June yeah well
72:37
you guys are closed right because we’re
72:39
beginning to open up here well we opened
72:42
up sort of so the state of Louisiana
72:45
opened up Orleans Parish opened up with
72:47
caveats but it’s still 25 percent of
72:52
your total occupancy and you know all
72:55
that stuff and we used to say ah this is
72:57
New Orleans you can’t make a stop but
72:59
yeah they found a way and the bars too
73:07
close wow there’s like nobody in the
73:10
French Quarter nobody any of the
73:12
Harrah’s Casino right that’s that’s
73:14
gonna be you know Harrah’s can reopen
73:17
same thing but it’s based on total
73:19
square footage of the building
73:21
and so the
73:22
is enormous so they can operate at a
73:25
pretty decent clip even with the retreat
73:29
reduced occupancy because the occupancy
73:31
is based on square footage based on fire
73:35
marshal right so if I’ve got a 40,000
73:38
square foot facility I can still get
73:40
quite a few people in that building
73:42
every hour hey we’re back
73:45
alright yeah we are nice chatting Arlene
73:49
we made it back everybody enjoyed the
73:54
breakout rooms hope everybody got some
73:56
networking done we’ll get fair some
74:00
power back on here real quick we’ll end
74:02
this thing with a real quick Q&A and if
74:05
you guys want to any of the panelists
74:07
want to push any products Glan I want
74:10
you to hold your book up tell everybody
74:12
where and how they can get it and
74:14
anything anybody else here has to offer
74:17
hey people like the breakouts yeah that
74:21
was fun yeah it was cool one on one yeah
74:29
break up three cool worked out all right
74:46
good good good
74:47
service I’m pretty upset I couldn’t get
74:49
anybody to invest in my restaurant
74:50
syndication yeah so maybe start garrison
75:06
to go back to what you’re saying you
75:07
wanna you wanted to give all the
75:10
panelists kind of a minute to just kind
75:12
of reintroduce himself how people can
75:14
reach out to them you know yeah have a
75:16
book anything interests you’ve done done
75:18
what you’re pretty good at that up and
75:19
then we’ll hop the Q&A so what kind of
75:21
rap last 10-15 minutes of just open mic
75:24
absolutely go ahead tell me about your
75:26
book man I already owned a couple of
75:27
them but tell me all about it my man
75:29
maintenance man a millionaire you know
75:31
in my breakout section one of the panel
75:34
said how did you get
75:35
started and I actually had a whole
75:37
section in there on my very first deal
75:39
and how I really grew the company and
75:42
bought 4,500 units so that’s that books
75:46
on Amazon you could type in maintenance
75:47
man to millionaire or you could type in
75:49
glen gonzalez and if anybody wants to
75:52
reach out to me
75:52
they can just go to email and Glenn at
75:56
obsidian capital cocom and you know i
75:58
love to network with folks and i love to
76:00
answer questions so that’s me in a
76:02
nutshell and I love this stuff I love
76:04
this stuff I’m having so much fun thank
76:06
you guys how can we get a hold of you
76:17
yeah guys appreciate it so I also have a
76:20
book investing in the dream it’s also on
76:23
Amazon so so let’s load a few of those
76:26
and then I do not have a person so
76:37
anyways the best way to get a hold of us
76:38
guys is is that wolf with Annie –
76:41
investments calm you can Google Kenny
76:43
wolf will come up we’ve got a YouTube
76:44
channel we do a weekly Q&A on Facebook
76:48
as well and you know whenever we can
76:52
meet up again Ferriss and I and and his
76:54
partner Ben
76:55
we weren’t rerun the mfin conference as
76:57
well so we had 400 people in Houston the
77:00
last event it was massive dude we have
77:02
gonna shout out for ourselves okay I’ll
77:05
leave you know I’ll need some more
77:06
prepares but anyways reach out it’s
77:09
great to meet you if I can help out let
77:11
me know yes a real quick real quick
77:13
Kenny Glen are either of you two raising
77:17
any capital for any deals right now
77:20
yes I’m you know Kenny privately so I am
77:24
raising money on a new development deal
77:26
that ground up stuff we had a great
77:28
breakout session with our group asking
77:31
about new development in the Austin area
77:33
and since I’ve got new developments yeah
77:35
we’re taking on investors on that deal
77:37
so reach out to my website they could
77:40
register they can actually download the
77:42
offering right through the website so
77:44
what’s your website I forget what’s your
77:46
website name it’s a obsidian capital
77:49
cocom yeah perfect
77:52
yep and Kenny for you I’m saying the
77:54
answer I was looking for was the mayor
77:55
of Houston that’s what you so yeah so
77:59
garrison beat is why we don’t do 506 C
78:02
so I can’t publicly solicit so we may or
78:04
may not be raising capital 506 B oh yeah
78:14
dude I’m jealous yeah I know master I
78:17
mean you’re the only one I know that
78:18
just sticks to deceive man I feel like
78:20
that this is the barrier of investors
78:22
happiness self a crab not be able to
78:24
slip a credit is just painful that’s my
78:26
thoughts on it okay no game
78:28
yeah all right well that’s it so I mean
78:31
you want to quickly say kinda have
78:32
people reach out to you hey uh thanks
78:35
again guys it’s been so much fun
78:36
Oh somebody else needs to music I’ll go
78:41
through a mute some people keep on
78:42
talking now Ivan I’m sorry hey garrison
78:45
you can do no wrong brother thanks for
78:47
having me I’m on my on my second tequila
78:51
I’m having a blast with you guys this
78:53
has been the best Monday night a long
78:55
time I’m pretty easy to find if you
78:58
spell my last name correctly
79:00
Ivan be ARR ATT Ivan Barrett Barrett
79:04
asset management combi ARR ATT three one
79:08
seven five nine zero in 1978 three one
79:11
seven five nine zero 1978 always raising
79:16
capital for our Midwest apartment
79:19
communities awesome
79:22
Jason Pyrrha what do you got going on my
79:24
man hey what’s up man
79:25
so yeah I had a book that came out where
79:30
I had a guest chapter on a book it’s
79:31
called crash and learn friend of mine
79:34
gave him a mono not a bunch of non real
79:37
estate people and then I was a real
79:38
estate guy in the book but bunch of
79:40
stories about people that like nearly
79:41
lost it all and like kind of kicked
79:43
their asses you know to build it back so
79:47
you know and this kind of weird time
79:49
might be some you know groups of
79:50
inspirational stories that you guys can
79:53
you know can can get inspired by you
79:56
know I was happy to be a part of that
79:58
project so it’s on Amazon crash learned
80:02
an orange cover David Milano was the
80:04
organizer of that so I that was my first
80:09
book project and I have another one in
80:10
the works but reach me on pero
80:13
realestate.com anybody can text me if
80:16
they want a network strategy session I
80:18
always have deals in the works if people
80:20
want to learn about them but my number
80:23
is eight one four three nine seven eight
80:25
zero three zero or hit me up on email
80:28
just first name last name jason peril at
80:30
yahoo.com and i really really enjoy this
80:32
tonight a lot of fun guys jaepo nper oh
80:41
yeah sure so best way to contact me is
80:46
just through our new website we actually
80:49
just launched a new website it’s a
80:51
impact prosperity dot-com my email is
80:55
Raj that’s Raj at impact prosperity calm
80:59
and I’d love to have you visit the site
81:02
and you know we have a newsletter that
81:04
you can sign up for and we can keep in
81:06
touch if anyone asked a question earlier
81:12
I’m sorry but I think we lost the
81:14
history of it so please we tell you to
81:17
talk truning to practice typing fast
81:18
we’re all working from home daddy’s
81:19
right so can I say one thing serious of
81:22
course so during this call I’ve talked
81:25
to Kenneth Raj I’m gonna reach out to
81:28
Garret Glen you like one thing I want to
81:32
stress your audiences all these guys are
81:34
so accessible and that’s the best part
81:36
about this is whether you’re a past
81:38
investor or you’re you’re new in the
81:40
business and you’re just looking for
81:42
advice like all these guys on here Jason
81:45
everybody they’re all so willing to
81:48
deliver value and pay it forward if
81:50
somebody did it for us and you know if
81:53
you approach any of us in the right way
81:55
we’re happy to give you 15 20 30 minutes
81:59
maybe even more of how we got to where
82:02
we got to and how we did it because none
82:05
of us know the started with a big check
82:07
from somebody else we all we all grinded
82:10
and and somebody helped us and so that’s
82:13
that’s what we all have so much fun
82:15
together is because we’re all so
82:16
open and willing to share and that very
82:19
to mastermind is all about is so much
82:22
fun so I got some questions that people
82:30
popped up and I see them in and maybe we
82:35
can just ask we’ll ask them and if you
82:36
could just not everybody needs to answer
82:38
him but if you could just fire off a
82:39
quick answer so that way we can get
82:41
through as many questions as we can is
82:44
there anybody that has any
82:46
underperforming assets and what are they
82:48
doing about it that was a question for
82:49
Michael I can address that I’ve got two
82:54
deals down to Lake Jackson that are not
82:56
performing very much supported on the
82:58
gas and oil industry and the chemical
83:00
companies and they’ve had probably four
83:02
or five thousand furloughs and employee
83:04
layoffs down in that one market and
83:07
suffering greatly down there I do want
83:11
to applaud you for answering that
83:12
question it goes back to what I haven’t
83:14
I said earlier right just being
83:15
transparent and candid with the good
83:18
it’s easy to cheat your horn when you’re
83:20
having a lot of success making a lot of
83:22
money but you know I mean that’s not
83:24
always the case 100% of the time and
83:26
it’s unfortunate but it marks the worst
83:28
of the only one of the most from right
83:29
learn a lot yeah all off all of Glin we
83:34
got a deal in 2015 it’s our oldest asset
83:38
our I was their lowest rents in our
83:41
portfolio I call a CC plus there they’re
83:46
definitely trailing behind everybody
83:48
else we’re probably 87 % collected on
83:51
that one you know versus some of our
83:54
newer nicer stuff where people are
83:56
working from home and and and have a
83:59
little more stability you know it’s it’s
84:05
a tricky business out there and you know
84:07
cici plus is a great place to start but
84:09
you really got to know know your numbers
84:12
and know how to manage that because
84:14
collections whether it’s Cove it or not
84:17
can change on a dime good thank you okay
84:22
Rebecca Robertson asks do you think it’s
84:25
wise to wait for deals or right now and
84:29
let me leave
84:30
adjust this to for younger newer type of
84:34
investors so now you guys were investing
84:35
syndications for 200 units and things
84:37
like that before somebody that’s gonna
84:39
buy a 5 unit 10 unit and 8 unit
84:43
something like that do you think it’s
84:44
wise to wait for deals right now or do
84:46
you think they should go ahead and look
84:47
to purchase something right now
84:48
I mean I would I would definitely
84:52
recommend waiting on that there’s just
84:55
so much uncertainty right now
84:57
you know just the five people on the
84:59
panel all have different views right so
85:01
I mean there’s no telling you know which
85:05
direction things are gonna go so I think
85:06
if you’re just getting started my
85:09
recommendation would be to wait a bit
85:12
I’m usually by the way a proponent of
85:14
diving in and getting your first deal
85:16
done because I think that’s how you
85:17
learn the most and but I think these are
85:21
just very unusual times and I would I
85:24
would just recommend waiting a few
85:26
months and wait for wait to just get
85:28
some clarity on things and the other
85:31
thing is there’s kind of very little
85:33
pricing discovery right now I mean
85:35
sellers and buyers are not on the same
85:36
page and so it’s very hard to really
85:38
know what any particular asset is valued
85:43
at right now and and so that’s another
85:46
reason to probably just weigh should be
85:47
a little bit nervous about putting a
85:49
deal together but if you could buy a
85:50
deal with a very very low basis with
85:53
also low leverage you know you might be
85:56
pleasantly surprised when you get to the
85:58
other side of Koga that you own a deal
86:00
that you bought during indemic when I
86:02
say that basis is low compared to the
86:04
market let me just say if stuff’s
86:06
trading in the 80s and you’re able to
86:09
pick one of these deals up for a 40 ad
86:12
or you know what I would say get on that
86:14
you know I don’t think you’re gonna find
86:16
that deal out there but if you do find
86:18
one like Russia the sellers aren’t
86:20
really you know letting stuff just go
86:23
away you know we’re not there yet but if
86:27
you can get it for a low basis with low
86:28
leverage I would say go for it if you
86:32
find it and don’t know how come talk to
86:33
one of the panel’s just call me call me
86:37
first it was my idea call me first so
86:42
they agree with
86:43
I cruise Raj you know eight to ten units
86:46
if you don’t really know your market and
86:48
you don’t know what the taxes and the
86:49
insurance are going to be and and how
86:51
you can keep it rented like you know
86:53
that pendulum can swing on you pretty
86:55
quick now but I also think Glenn’s got a
86:59
good point you know now could be a
87:01
really good time and in eight to ten
87:03
units sellers often are expecting you to
87:06
retrace deal before closing
87:08
you know when Glenn and I are buying or
87:10
Kenny or any of these guys we’re buying
87:12
152 our units we got to know what we’re
87:15
gonna pay for them before we before we
87:18
even put the LOI in because we can treat
87:20
rate if we retrain we’re screwed unless
87:23
it’s a really good compelling reason you
87:26
got a party going on Glenn eight to ten
87:28
units eight to ten units though you know
87:30
those sellers those sellers you know
87:32
more often expect expect you to retrain
87:36
on the inspection or if rinse
87:37
deteriorate that kind of thing so you
87:39
might be able to tie up a pretty good
87:41
deal and in fact something I think you
87:46
need motivated sellers of so it’s
87:48
obviously there’s deals to be had
87:49
depending on the situation but if you
87:51
can find a situation where to Glenn’s
87:53
point low-cost basis you can get in
87:55
cheap and you have a motivated seller
87:57
that’s just for whatever reason
87:58
desperate to sell there certainly deals
88:00
that could be had hard to find and know
88:05
your market I am wagging my finger for a
88:07
reason know the market know the block
88:11
know the School District know the market
88:13
when you’re buying eight to ten so so
88:15
Ivan we’ve had a number of different
88:17
questions about that came up in and
88:20
maybe not specifically for your guys
88:22
market but maybe if you could talk for
88:23
what size market you’re looking at or if
88:25
it’s tertiary primary like what size
88:27
would make a good market because I mean
88:30
a lot people are asking how do I choose
88:31
a market and things like that before
88:34
that one actually I want to be
88:36
respectable the panelists time do you
88:37
guys have another 5-10 minutes let’s
88:39
leave that does that work anyone needs
88:41
to hop off Topher you don’t feel like
88:43
you have to stay let’s see there’s a lot
88:44
of questions they I’m all right no one
88:48
will stop off then continue thanks to
88:51
get over to Powell’s question is anyone
88:52
want to take first stab at that
88:56
markets Precure yeah I just say you got
88:59
to pick your markets carefully you know
89:01
today I don’t know if I’d be buying in
89:03
states that are still in lockdown
89:05
I think that’s number one but – you know
89:08
we always look for landlord friendly
89:10
states and then kind of dial it in from
89:12
there even in landlord friendly states
89:15
like you know pick on these two cities I
89:17
always do that I’m gonna get nasty notes
89:19
one day from Midland Odessa it’s all oil
89:22
and gas so if you buy real estate in
89:23
Midland Odessa you’re really investing
89:25
in the oil and gas business if you’re in
89:27
Killeen Texas it’s almost all military
89:29
jobs so you’re in the military business
89:31
so you know we’ll look for who’s
89:35
employing you you’re your prospective
89:37
resident base as well and that’s a big
89:40
deal so you want a diversified economy
89:42
you know the smallest city we’d probably
89:44
look at that’s not attached to an MSA is
89:46
maybe 40 50 thousand people below that
89:50
you get in pretty niche and and and then
89:52
then it comes to who are you gonna sell
89:53
to you know the other thing that’s a
89:57
little tricky is one of the things that
89:59
you all of us normally look at is
90:02
population growth and employment growth
90:04
and I think employment growth is gonna
90:05
be you know significantly negative for
90:07
just about every market in the country
90:09
and so you have to you know you kind of
90:13
have to reframe what you’re looking for
90:15
so I think now you know if I’m looking
90:17
at a market and looking at what its
90:21
unemployment is and what its population
90:24
may be if it’s a population decline you
90:27
want to compare it to something right
90:28
maybe what the state averages or what
90:30
the national average is just so you can
90:31
have you can make some kind of a
90:32
relative assessment because you’re not
90:34
gonna see population growth now for a
90:36
long time like these metrics are all
90:38
gonna show up is as negative for for
90:40
quite a while yeah I think for us you
90:44
know we look we’ve always just looked
90:46
for stability that’s why like a
90:49
cleveland ohio is super attractive or in
90:51
Erie Pennsylvania or Buffalo New York
90:53
there’s zero sexiness in terms of job
90:56
growth and population growth in those
90:59
areas but the sexiness in those markets
91:02
is what’s happening right now
91:03
like good Kovan like like Kenny’s got
91:05
the belle of the ball with his deals in
91:07
Cleveland right like
91:08
like our deals in the area there’s
91:09
there’s no a very minimal disruption not
91:12
enough that even caused you to skip a
91:14
beat so so for us we’re looking at areas
91:16
that even with the worst economic upset
91:20
since the Great Depression you know
91:22
there’s not a whole lot of not a whole
91:24
lot of change in terms of people in
91:27
their ability to pay rather so that’s
91:29
what we look for in a market this has
91:42
been a lot of fun faris you guys Rock in
91:44
garrison thank you thanks everyone for
91:59
joining us at MSM live multifamily
92:02
masters live we would do the same thing
92:04
in two weeks Monday 8:30 p.m. reach out
92:08
to each of these individuals both of
92:10
these guys are my friends each of them
92:11
are super helpful if you have any
92:13
questions whatsoever if you’re
92:14
interested in investing you just want to
92:16
hang out with good people doing good
92:17
things these are the kind of people you
92:19
want to hang out with if you want to
92:21
learn real estate if you want to network
92:23
and hang out with awesome people and
92:24
really learn the ins and outs of this
92:26
business reach out to ferrous power
92:30
myself we have a multifamily master’s
92:33
mastermind with that being said thanks
92:35
everybody have a great night we had over
92:38
200 people on this call tonight and you
92:40
guys provided a tremendous wealth of
92:43
knowledge thank you just assume the six
92:49
of us hanging out sometimes all right it
92:56
won’t be too long we’ll all be back
92:57
together I miss you guys
92:59
Roz great wife I didn’t know