Category: "Podcast"

JC 032 How Major League Sports Deliver Cash Flow with Tom Chase

November 22nd, 2017 | no comments

Why Real Estate Investors Are Eyeing Cleveland

Why Real Estate Investors Are Eyeing ClevelandTom Chase has over 30 years’ experience in the financial services sector. Now he’s part of the team at the Shoreway Realty Group, an elite firm that prioritizes you and your real estate goals. Their services include traditional brokerage, providing investment opportunities, as well as Shoreway Property Management and construction. Tom’s responsibilities as part of the Shoreway Realty Group include financial analysis, investor relations and identifying client goals and risk tolerances. He also assists with strategic management and is in charge of marketing, communications, and project funding.

Tom is considered an expert in the Cleveland market. He says the city is currently experiencing a rise in valuations, citing the success of professional sports team as one of the main drives. The low cost of living and abundant cash flow opportunities are leading both new and veteran investors to Cleveland to either start or add to their portfolio.

Five Key Points:

  1. Cleveland is a great cash flow market and is perfect for newbie investors as well as those looking to add to their portfolio.
  2. We can’t underestimate what successful sports team do for property values in any state or city.
  3. Keep an eye out on properties with little equity, but only need some attention to turn into a great investment.
  4. Knowing the tenants in your client’s properties allows you to protect your assets.
  5. Property management in any market, local or not, is where it all rests at the end of the day.

 

Favorite Athlete:

  • Jim Thorpe – American athlete and Olympic gold medalist
  • His father for teaching him how to play ball in high school and college.

Favorite book:

Pro tip:

  • When you get up and do your daily tasks, set your mind to always be proactive and avoid being reactive.

Reach Out to Tom Chase:

Thank you Tom for taking the time to share your expertise on financial analysis, the Cleveland real estate market and investor relations.

Listen to all the episodes of The Real Estate Locker Room Show and sign up for my FREE monthly newsletter at www.johncarneyonline.com

Connect with John Carney
Facebook: @JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2017

JC: 031 Playing the Multifamily Game with Vinny Chopra

November 8th, 2017 | no comments

Stay Humble and Build a $170 Million Multifamily Portfolio

 Build a $170 Million Multifamily Portfolio Vinney Chopra’s passion has been real estate investing for more than 30 years. He’s a commercial California Broker and an expert Multifamily Syndicator. Vinney is the Founder and CEO of Moneil Investment Group, LLC, a company that provides investment opportunities for qualified investors in the commercial real estate market, especially in the multi-family arena. Through his passion and belief in having a positive way of thinking, Vinney was given the nickname of Mr. Smiles.

Vinney has a $172 million multi-family portfolio, 26 syndications, up to 43% annual investor returns, and manages over 3,100 apartments. While his achievements are all like a dream come true, he was anything but rich when he arrived in the US more than 40 years ago, having only $7 in his pockets. The odds were stacked against him, but he knew there was an opportunity to be successful in this country. That vision for success served as his inspiration to learn and work hard for his dreams.

Five Key Points:

  1. Syndication is a game, a pooling of money to buy more stuff.
  2. So many people are looking forward to investing and getting better returns than what the banks are giving.
  3. With low interest rates, today is the best time to invest in any kind of real estate.
  4. Young people should start companies while they’re still in high school.
  5. To be a successful entrepreneur, you have to communicate well with other people and explain the benefits of your offer well.

Favorite Athlete:

Favorite book:

Pro tip:

  • Just have positive thinking and rely on the law of attraction. Believe you’re alive to do good to everyone around you and the world will give back.

Reach Out to Vinney Chopra:

Free Gifts:

Email Vinney at vinney@moneilig.com to get a free eBook on how to syndicate in a simple fashion.

Thank you Vinney for taking the time to share your expertise on multifamily syndication with us.

Listen to all the episodes of The Real Estate Locker Room Show and sign up for my FREE monthly newsletter at www.johncarneyonline.com

Connect with John Carney
Facebook:@JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2017

 

 

JC 030: Raising Money and Crowdfunding with Amy Wan

November 1st, 2017 | no comments
How to raise funds to pursue large real estate investments 

Amy Wan is the Founder & CEO of Bootstrap Legal, a business that automates the drafting of legal paperwork for real estate private equity, syndication, and crowdfunding deals. Prior to founding Bootstrap Legal, Amy was a partner at Crowdfunding Lawyers and General Counsel at Patch of Land a real estate marketplace lending and crowdfunding platform. Amy was also named one of the Top 10 Women to watch in Legal Tech by the American Bar Association Journal and was nominated for Corporate Counsel of the Year Award by LA Business Journal.

Amy founded Bootstrap Legal as a means to fill the gap in accessibility to legal services. Her company aims to make it more affordable for aspiring entrepreneurs who don’t have a trust fund or roll with the rich crowd to prepare the necessary paperwork. Their services apply artificial intelligence to the drafting of legal documents for those looking to raise capital – especially those looking to get into real estate.

Five Key Points:

  1. Money is universally translatable and universally respected.
  2. An accredited investor is basically a “wealthy person” who has money to lose.
  3. Whenever you are selling a security, you always want to disclose everything.
  4. Disclosure is important because the SEC doesn’t care what you sell. What they do care about is giving investors all the information they need.
  5. Lawyers are good investments for real estate investors. They draft documents to protect clients like you.

 

Favorite Athlete:

Favorite book:

Pro tip:

  • Lean on your network of family and friends, and people who support you and believe in you.

Reach Out to Amy Wan:

Thank you Amy for taking the time to share your expertise on real estate syndication with us.

Listen to all the episodes of The Real Estate Locker Room Show and sign up for my FREE monthly newsletter at www.johncarneyonline.com

Connect with John Carney
Facebook:@JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

 

© John Carney 2017

 

JC 029: How to Invest in Land from Anywhere with Mark Podolsky

October 25th, 2017 | no comments
Capitalize and Earn Passive Income by Investing in Raw Land 

Mark Podolsky is known as the Land Geek, a title he’s earned for focusing his business on raw land investing. He’s been in the business for over 16 years and has completed over 5,000 land deals with an amazing average ROI of 300% on cash flips, and more than 1000% on deals sold with financing terms. This is quite the achievement if you consider the first deal he made in 2001 was worth only $3000.

Mark says his reason for getting into investing was to simply escape the rat race. Prior to his current business, he was trapped in a state of “no work, no pay” status. Top that with high amounts of stress and not having enough “me” time, Mark knew he had to find a way out fast. Now Mark barely works 5 hours a week, and has created his business in such a way that not only is it mostly automated, but also manned by a great team with the same vision he possesses.

Five Key Points:

  1. Aim to reach the point where you spend less time working IN your business and more time working ON the business.
  2. If we don’t pay for something, we typically don’t value it very much.
  3. The neighbors can be your built-in best buyer.
  4. Selling lands allow you to be free from renters, rehabs, renovations, or rodents.
  5. The primary benefit of selling raw land is you have a massive market and only few are doing it.

Favorite Athlete:

Favorite books:

Pro tip:

  • If you’ll do for the next 3-5 years what other people won’t do, you’ll be able to do for the rest of your life what other people can’t do.

Reach Out to Mark Podolsky:

Free Gifts:

  • Email Mark at support@thelandgeek.com with the subject heading “real estate locker room” or “John Carney” to get your passive income launch kit for free.

Thank you Mark for taking the time to share your expertise on raw land investing with us.

Listen to all the episodes of The Real Estate Locker Room Show and sign up for my FREE monthly newsletter at http://www.johncarneyonline.com

Connect with John Carney
Facebook: www.facebook.com/JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2017

JC 028: How to Make Private Money Work for You with Jay Conner

October 18th, 2017 | no comments

All You Need to Know About Private Money

How to Make Private Money Work for You with Jay ConnerJay Conner has been in the real estate industry for over 14 years and is known as an expert in private money lending. He has over $52 million worth of real estate transactions under his belt and runs a fully automated business, allowing him to manage his company working not more than ten hours a week, earning no less than a seven figure income.

Jay’s road to becoming a private lending expert started when the bank cut him off during the crash of 2008. Desperate to salvage deals, he was forced to learn how to raise private funds less than two weeks after being cut off. He did his research and was able to create a system that combined the best aspects of all that he learned. His ordeal became a blessing in disguise in the end, as his system was able to raise over $2 million in less than 90 days in private funds, stating the first person he approached handed over $250,000 in private money. It blew him away to realize that his system worked the way it did and raising private money wasn’t entirely complicated as he imagined.

Needless to say, his private funding accomplishment has only helped his career reach new heights and to this day, Jay credits the banker who cut him off.

Hard Money versus Private Money

Hard money

  • Hard money lenders are mostly brokers.
  • They go out and raise money from individuals.
  • Average interest rate on hard money is 14%
  • Origination fee is 4 points.
  • They won’t advance more than 80% of the purchase price.
  • They will check your credit.

Private money

  • A private money lender is an individual that loans money out from their investment capital or retirement account.
  • Interest rate is 8%, no points, no renewal fees.
  • 100% of the purchase is advanced when you buy,
  • you can get 125% of the after repair value when you buy.
  • They won’t check your credit.

Five Key Points:

  1. The number one thing that keeps real estate investors from moving forward is not having the funding for the deals.
  2. Private money puts you in control.
  3. The most dangerous number in any business is one: having eggs only in one basket.
  4. Only 13% of for sale by owners will sell in some creative way, the other 87% just want all the money.
  5. The great thing about private money is you can use it for commercial investments too.

Favorite books:

Pro tip:

  • Do not run a to-do list. Successes are scheduled, so schedule what you want to get done.

Reach Out to Jay Conner:

Free Gifts:

Thank you Jay for taking the time to share your expertise on private money with us.

Listen to all the episodes of The Real Estate Locker Room Show and sign up for my FREE monthly newsletter at http://www.johncarneyonline.com

Connect with John Carney
Facebook: www.facebook.com/JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2017

 

JC 027: How to Achieve Simple Passive Cashflow with Lane Kawaoka

September 27th, 2017 | no comments
Learn how to create sustainable cash flow with real estate

Learn how to create sustainable cash flow with real estate Aloha from Honolulu! Lane Kawaoka is a city project engineer and professional engineer by trade. Since he possesses that engineer’s mindset, Lane decided to apply it to a career in real estate.

Lane’s passion project is called Simple Passive Cash Flow. He’s a mentor who helps his clients get started in and navigate the tricky world of real estate investing. Lane partners with investors who are busy professionals like engineers, lawyers and doctors who want to get into the real estate game but lack the time and expertise to understand all of the intricacies of the real estate investing world.

Real estate is like an intense cross fit workout – you have to “chip away at it” and you will be successful.

Cash flow markets versus Appreciation markets:

  • Appreciation markets are defined by Rental Value Ratio, which is the monthly rent divided by the cost of the home. The appreciation areas or primary markets are places where everybody wants to live. When demand is high, the rental value ratios get pushed down.
  • Cash flow markets like Birmingham, AL, Atlanta, GA Indianapolis, IN, Kansas City, MO and Memphis, TN don’t experience explosive appreciation. However these markets guarantee enough cash flow to replace your working income, giving you the freedom to do what you want.

Five key points:

  1. If you don’t have time to manage your own property, hire it out.
  2. The single-family home is a prerequisite when you start investing in real estate. You learn the fundamentals working with single-family homes. It’s the starting place before participating in other people’s deals / syndications as a passive or lead investor.
  3. Single-family home investment is not highly scalable. Once you have gained adequate experience with real estate investment, it’s time to transition into multi-family property or other commercial real estate syndications.
  4. While investing in real estate you’re not going to be doing everything all the time. Certain times will require max effort and high intensity to maximize a deal and close a deal.
  5. Once you set yourself a goal as a real estate investor you have to focus on doing one thing at a time until you cross the finish line Chip away, you get more done by going steadily.

Favorite athlete: LeBron James – NBA basketball player.

Favorite podcast:

Pro tip: Building an effective network – your net worth is your network. Always be adding value to others.

Thank you Lane for taking the time out of your busy day to share your story and real estate experience with us.

Check out all of the free gifts and tune into The Simple Passive Cash Flow podcast here: http://www.simplepassivecashflow.com

Drop Lane an email with any additional questions you have, lane@simplepassivecashlow.com

Watch Lane’s video, “How I make 35% on rental real estate”

Facebook: /SimplePassiveCashflowdotcom

Instagram: @simplepassivecashflow

Twitter: @SimplepassiveCF 

Listen to all the episodes of The Real Estate Locker Room Show and sign up for my FREE monthly newsletter at http://www.johncarneyonline.com

Connect with John Carney
Facebook: www.facebook.com/JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2017

JC 026: How to Become a Cashflow Ninja with M.C Laubscher

September 20th, 2017 | no comments

Eliminate the Control That Banks Have Over You

JC 026: How to Become a Cashflow Ninja with M.C LaubscherM.C. Laubscher’s a wealth architect and strategist, educator, and financial freedom fighter. He’s the President and CEO of Valhalla Wealth Financial and creator and the host of the popular business and investing podcast, Cashflow Ninja.

M.C.’s mission is to help as many people as possible eliminate the control that banks and financial institutions have over their lives by building their wealth in a variety of ways outside of Wall Street.

He believes the best way to achieve this in the Information Age is by reclaiming the banking function in your own financial life through the structuring of an efficient cash flow management system and creating and building assets that provide multiple streams of income. This is how to eliminate the control that banks have over you.

M.C. teaches actionable education to his listeners and helps his client’s collapse time in their wealth plan and achieve 40 years of financial results in 10 years or less.

M.C. challenges existing societal belief systems and misinformation around concepts such as money, saving, investing, wealth and retirement.

The 3-Question approach towards achieving financial freedom:

  • What do you want? What do you want in life with your health? What do you want with your money and your investing? What do you want from the relationships in your family?
  • Why do you want it/why does it matter? For clarity, you have to know the reason why do you want it and what do you want.
  • Who do you need to become in order to get what you want? Customize and design processes and systems get you to where you want to go.

Five key points:

  1. Before investing you need to recruit an A Team / Power Team in every area that you require help. Then you must customize and design processes and systems that will keep you on track to go exactly where you want to and what achieve what you want.
  2. Whether you’re looking to become a real estate investor or looking to take your portfolio to the next level, there’s art and science in creating financial freedom and in creating the laws that ensure financial freedom. Science is the way to figure out exactly how to get there and the art part is deciding where your interest lies.
  3. A real business is about solving problems for other people and creating outcomes for clients or customers. Products and services are just vehicles for solving problems and creating valuable outcomes.
  4. Every investor must have the skillset of analyzing data, analyzing investments and understand how to analyze a property deal.
  5. In real estate investment it is important to understand who are you trying to serve so that you can determine the approach, strategy and tactics.

 

Favorite athlete: Joel Theodore Stransky – Famous South African rugby player.

Learn about the game of rugby union here: https://en.wikipedia.org/wiki/Rugby_union

Favorite books: The Creature From Jekyll Island by G. Edward Griffin

Pro Tip: Set a target and be crystal clear about what you want in the next quarter, the next six months, or the next year.

Check out the Cashflow Ninja podcasts – http://www.cashflowninja.com/podcast and reach out to M.C. direct – info@cashflowninja.com

Thank you M.C. for taking the time of your schedule to share your story and cash flow expertise with us.

Listen to all the episodes of The Real Estate Locker Room Show and sign up for my FREE monthly newsletter at http://www.johncarneyonline.com

Connect with John Carney
Facebook: www.facebook.com/JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2017

 

JC 025: 3 Keys to Real Estate – Scale, Value and Risk with Ike Mutabanna

September 13th, 2017 | no comments

Learn how to penetrate new real estate markets

JC 025: 3 Keys to Real Estate – Scale, Value and Risk with Ike MutabannaIke Mutabanna is a real estate entrepreneur and the president of Dallas, Texas based IHM Business Group. Ike also hosts the successful podcast, “The Side Business Show,” where listeners learn how to grow their wealth through running a wide variety of side businesses.

Over the last 15 years Ike has spent time as co-founder, president and CTO in a variety of startups and turnaround companies. He’s originally from India where he attended the University of Bombay, India and earned his BE degree. Ike also has a MS degree in Engineering from the University of Cincinnati.

Ike is an active commercial real estate investor and multifamily syndicator. In his downtime you will find Ike pursuing his newfound passion for mountain climbing, having recently started training for technical climbs on rock cliffs.

The 3X advantages of syndication versus single-family investment:

1) Risk diversification is much better in a ten-unit apartment building versus three single-family houses.

2) Economies of scale is better in terms of net income. The more net income allows you to hire property managers, allowing you to focus your time and energy on further investments.

3) Value appreciation – you have the ability to force appreciation with creative strategies to increase rent and overall income and push the value of your properties.

Five key points:

  1. When investing instate you have the definite advantages of knowing your local market and the ability to study that market in depth, without needing to rely on other people to relay information. You can easily build networks by attending meetups and creating partnerships.
  2. When investing out of state it is essential to take the time to build a trusted and solid team before proceeding with investments.

 

  1. Take advantage of your opportunities when you are investing instate: visit neighborhoods personally, study the local markets, take detailed notes and photos of different neighborhoods and create a thorough database which you can easily refer to when looking into new investment opportunities.

 

  1. Multifamily syndication provides the opportunity for much larger scale where investors can achieve larger returns on their investment

 

  1. It is important to find an activity outside of your business that inspires you and that will assist in training your mind and help you maintain an energetic and motivated state. You then transfer that energy back into your business.

Favorite athlete: Sunil “Sunny” Gavaskar – Famous Indian cricket player.

Learn about the game of cricket here: https://en.wikipedia.org/wiki/Cricket

Favorite books:

Favorite quote: “When you want something really, really bad and you take the action to achieve it, the universe comes together to help you achieve it.” The Alchemist – Paulo Coelho.

Check out The Side Business Show podcasts and contact Ike here: www.thesidebusinessshow.com

or podcast: thesidebusiness.show

Thank you Ike for taking the time to share your story and business insight with us.

Listen to all the episodes of The Real Estate Locker Room Show and sign up for my FREE monthly newsletter at www.johncarneyonline.com

 

POST GAME REPORT: Episode Transcript

JC 025: 3 Keys to Real Estate; Scale, Value and Risk with Ike Mutabanna

Learn how to penetrate new real estate markets

Announcer: Welcome to the, “Real Estate Locker Room Show” with John Carney. Did you know investing in real estate is a team sport? Join John and his guests as they explore the business of real estate and athletic competition. The goal for this show is to grant you direct access to the real estate pros that are closing profitable deals and growing their businesses. On the “Real Estate Locker Room Show” we are getting in the ring with successful investors, developers, operators, and all of the industry professionals to learn what it takes to achieve on-going success. Now it’s time to kick-off and level up with new ways to grow your real estate business.

John Carney: Welcome back to the Real Estate Locker Room Show everybody. I’m your host John Carney, coming at you from my office here on the sunny Westside of Cleveland, Ohio this fantastic Monday afternoon in the month of August. We are going to be talking to a real estate investor and entrepreneur Ikbal Mutabanna, who is on the line and joining us in The Locker Room from Texas. But before we get into that I just want to remind you: the purpose of The Real Estate Locker Room Show is to help you as an investor or a real estate professional who supports the industry in some capacity, or someone who’s looking to break into real estate — we really want you to be able to: number one, recruit the best team of professionals that you can to work with you; to position yourself for success and really elevate your real estate game.

The person who we’re going to be talking with has definitely done that. We met through networking. Here you go, I’m up in Ohio and being connected to Ike and his business partners from Texas and Colorado. So that is just a matter of being in the game and participating in networking events I suppose. But anyways, welcome to the locker room Ike.

Ike Mutabanna: Hey, thank you John. I’m excited to be here.

John Carney: Yea. I’m stoked to have you. So, let me just let the audience know a little bit about you. Ike is his nickname, but Ikbal Mutabanna is the president of IHM Business Group. His previous business ventures include strategic technology services, commercial real estate syndication and multifamily acquisition. Ike is also the host of a podcast called The Side Business Show, where listeners learn how to build wealth through a variety of side businesses, regardless of whether they are full time employees, stay at home mums or students.

Previously, Ike spent 15 years as co-founder, president and CTO in a variety of startups and turnaround companies. He earned his MS degree in engineering from the University of Cincinnati and a BE degree from the University of Bombay in India. Ike enjoys mountain climbing and has recently started training for technical climbs on rock cliffs. He lives in Dallas, Texas with his wife and two beautiful children.

Alright, so let’s get into it Ike. Not only are you an entrepreneur on the technology side and experienced business operator, but you’re also a real estate investor.

Ike Mutabanna: I am.

John Carney: Well, before we get into everything that you’re doing real estate related I like to warm up on the show and just get the conversation going with a few sports related questions. Do you have a favorite athlete that you looked up to as a kid?

Ike Mutabanna: As a kid, that’s a good question. Yes, there was actually. The only caveat that I will say John is that, because I grew up in India, some of the sports played there are different than the sports that we are familiar with in the U.S. So you being — having lived in Australia you’re probably familiar with cricket and field hockey.

John Carney: I am definitely familiar with cricket and my wife is a huge fan, so I’m into the test match cricket.

Ike Mutabanna: Right, right. So as far as cricket is concerned, there was a very famous — so cricket, for those of our listeners who don’t know what that is, it’s a game very similar to baseball, just a slightly different shaped bat and a ball that is made of living material, and a few different rules.

But we have an Indian player when I was growing up by the name of Sunil Gavaskar, also known as Sunny, who scored the highest number of runs in cricket at that time. He was later, of course, his records are broken about 15, 20 years later, but while growing up he was my idol in a sense. Not just for the game but also for his sportsmanship and his gentlemanly conduct in everything he did.

John Carney: You know, for the audience who — I know we have global listeners out there — but for the audience here in the states or North America who’s not familiar with cricket, it is a gentleman’s sport. But don’t take that as — these balls are travelling incredibly fast right at you. And they spin, right?

Ike Mutabanna: Yea they spin. I mean the spin is I think far more than I’ve seen in baseball, just because of the fact that it also bounces before it hits the batter.

John Carney: I just don’t see myself getting padded up and in the nets in front of a fast bowler anytime in my life.

Ike Mutabanna: Yea, I’ve done that, I’ve been hit quite a few times so I like the field now.

John Carney: So, you grew up playing organized cricket when you were living in India?

Ike Mutabanna: Well, it’s interesting, even though cricket was a very prevalent game in India, it still is, in fact, it’s considered to be the second biggest religion in India, after Hinduism. The reality is when I was growing up, India was actually the champion in world field hockey so that’s the game that I played most when I was growing up.

John Carney: Which, now you’re in North America, and it’s really, we’re an ice hockey culture.

Ike Mutabanna: We’re an ice hockey culture, exactly. So I watch ice hockey, it’s similar. Different enough that I don’t necessarily follow it anymore. But yea, that was I think my passion all the way until college and then it fell apart once I left college.

John Carney: Alright, well thank you for sharing that history of growing up in a foreign country with our audience and bringing a new sport to the forefront of the conversations we have here in The Locker Room, and we’ll make sure that we link in plenty of stuff related to Sully and cricket in the show notes.

Alright, so real estate: we were talking when we met here in Cleveland about your past work experience. You lived in Indonesia and worked in technology startups and now you’re here in the United States. You went to school in Ohio and got an advanced degree and real estate is something that you’re pursuing.

So why don’t you give the audience the ten-thousand-foot view of what you do in the real estate game?

Ike Mutabanna: Sure. So I started real estate in a very small fashion about three or four years ago. I used to live in Boston, Massachusetts and, you know, like most people in this industry who first — who are not from real estate backgrounds — their first instinct is to go buy a single-family house that they can rent out. Or a duplex. And that’s pretty much what I did for a couple of years. Never really made that much of a profit from doing that, because generally the financial economics of that doesn’t work out too well. Your vacancy can hit you if you have vacant periods, when there’s turnover of tenants you tend to then get hit by all of the changes and the maintenance things that you have to do in the house. So I never really took it very seriously.

But about a year and a half ago, when I had moved to Dallas by then, I got introduced to our common friend actually, Joe Fairless, who is big in the multifamily apartment building business. And that really intrigued me, because of the economies of scale in that business. So I started studying it, I invested in a couple of those last year, and as I started doing that and studying the markets really well, it became apparent to me that that is really where real estate can achieve the kind of scale and profit and goals that you can strive after, right? Where you’re not going after the small little peanuts that you can get in the single-family world, but you’re really going after something that can build generational wealth. So that’s what intrigued me. I started going after it. And then really entered that full time at the beginning of this year.

So since then I’ve been working on syndication for large apartment complexes in DFW. I’ve got about three that I’ve invested in so far, and around the time that I started looking at expanding that portfolio is when I got introduced by my partner in Colorado to Cleveland. It just so turns out that his family is in Cleveland and we started just hearing this little buzz about Cleveland from a bunch of different sources. So that’s what brought us to Cleveland, that’s when I met you John and since then what I’ve been doing is working on expanding the network of people that we know in Cleveland, and trying to figure out how I can put in place all of the different players I need in order to be successful in the Cleveland market, considering that I’m going to be an out of state investor.

John Carney: Right, and that is — let’s talk about that. You’re in state in Texas. Are you in city? Are you in Dallas or are you looking at markets outside of Dallas?

Ike Mutabanna: Well, so far, I haven’t looked at markets outside of Dallas. The Dallas Fort Worth Metroplex itself is so massive that you can easily consider it to be equivalent to three or four different cities all meshed together. So there’s just such massive opportunities happening here that I’ve not really had the chance to look at other parts of Texas. We did briefly look into Houston, decided not to venture that at this time because, while Houston was attractive say about a few years ago, I think the dip in oil prices hit the economy pretty hard. So that doesn’t mean there are investors who are not in there, in fact there are investors in there who are actually grabbing up properties because they’ve gone done in value. I just don’t play in that particular niche. My goal is to play in the niche of looking at really stable class C plus or B type properties where we can really work on doing some amount of repositioning, but largely focus on the cash flow aspect. So we haven’t really done into Houston.

We looked at San Antonio, the market felt a bit too small but I haven’t ruled it out. In fact, just last week made a really good contact there and there’s a potential that San Antonio might be on the horizon. I did meet another person who started investing in San Antonio from California. So clearly there’s interest in that market as well.

John Carney: Yea, so. I suppose — I didn’t mean to cut you off.

Ike Mutabanna: That’s fine.

John Carney: The question that’s sort of coming to my mind is, not only are you — you’ve moved around in the United States, so you’re establishing a business in multifamily real estate in your home town at the moment, which is Dallas, right? And then you’re also looking to other markets.

So whether they’re in state or out of state, let’s talk about how you went about recruiting your team locally, and then how that translates into how to be time efficient and find the right people in another market. Because this is an important message that I’d like to get across. And I believe that you’ve got the experience to give the pro tips on how to achieve that.

Ike Mutabanna: Sure. So there’s a substantial difference between investing in state and out of state. What happens is, in in state, as I started becoming familiar with the market, really studying the market, the ability for me to be on the ground made it much more of a favorable situation, where I did not necessarily have to depend on others to confirm things for me. If I heard of a particular neighborhood which was on the upswing and there was some good developments happening there, it would be a 15, 20-minute drive for me to get out there, park my car, walk around, really study the neighborhood in detail. And I have a habit of making lots and lots of notes. Every time I go to a neighborhood I’ll sit down and I won’t carry too much, I’ll just carry my phone with me. I enjoy using Google Keep. So I’ll just start making notes, I’ll take a few photographs.

But I’ve built up a huge databank of notes of a lot of the neighborhoods in the Dallas area. And that’s something I can do on an ongoing basis, which is really helpful because that means when I get an opportunity presented, or one that I’m looking at, I don’t necessarily have to depend on a pro-forma or someone else telling me what is the potential of an area or not.

But when you go to out of state, you no longer have that luxury, right? Unless you’re willing to fly down like two or three times a month. You really don’t have the luxury to go and do that on a regular basis.

So the big difference between how I’ve been able to do things in Dallas versus when I’m targeting a place like Cleveland, is that in Dallas I’ve done a lot of the groundwork myself and now I’ve spread the word, I’ve gone and attended meetups, which again, something I can do when I’m in state but I cannot do when I’m out of state. And I’ve made a lot of contacts. I’ve also made — I’ve created partnerships with larger firms, people who are much bigger than me in this industry, and many times, rather than finding my own deals, I go participate in their deals.

Interestingly, one of the companies I partner with, they actually are not in Dallas themselves, even though one of the partners is originally from Dallas. So when they get deals it’s easy enough for me to go validate their underwriting and all of the assumptions they’ve made, to make sure that I’m comfortable with it. Again, something not so simple to do when you’re out of state.

So as far as Cleveland is concerned, we realized early on that the only way we were going to be successful is if we spent the time upfront in building out a solid team before we even took the first step of identifying and trying to evaluate a property. So in fact, to be honest, I haven’t evaluated a single property so far, from an underwriting perspective in Cleveland. All I’ve been working on is just a slow, patient process of talking to people in Cleveland, finding the right set of partners in every different area that I need. So whether it’s property managers, whether it’s brokers, whether it’s lenders, title insurance, CPAs, lawyers. We’ve just been going methodically one by one talking to people.

I did visit Cleveland for about a week, which is when you and I were able to meet up, thankfully. And that was a very instructive week because again, as I said, because of the fact that in state, while you get a really solid lay of the neighborhoods, you can’t depend on a map or someone telling you something to realize what works and what doesn’t.

While I was in Cleveland, as an example — I’m sorry if I’m rambling, do stop me so that I can focus in a particular direction you might want John — but as I was looking at the area near Case Western Reserve University, what we found was, literally after crossing three streets there was dramatic change in the nature of the neighborhood. It went from a neighborhood where I would consider under my strategy a very desirable area to buy a multi-family, to a neighborhood where I would want to stay away. And in fact we encountered police cars, when we went up and talked to them and the police officers told us to stay away from that section. We’re talking about a few streets, we’re not even talking about an entire neighborhood changing. So that’s a big disadvantage that out of state investors are going to face when investing in an area that’s not in their backyard. And it’s very important to do some groundwork but then build a really, really superb team that they can over time depend on.

John Carney: Right, you definitely want your boots on the ground, reading from the same sheet of music as you, and you want their marching orders to be clear. So I’m familiar with the area around Case, and I’ve scouted it out, and literally, you come across the wrong side of the tracks are the wrong side of the tracks.

Now I’ve done similar work to yourself, I invested and built a business around Phoenix, Arizona, based on a solid team and good relationships and limited knowledge of the area, and was successful and loved that market. But you have to have — in our case it was an investor who was also a real estate agent was our go-to guy. And he would be the first one to tell you, “No, that side of the street is no good, this side of the street is great. And I’ve got three houses here on this side of the street. Would never buy something on that side of the street.” So, that’s all sound advice as far as pros and cons for looking at your home town versus out of town. And then talk a little bit about the syndication. How does that look if I want to invest with you? Give the audience a little bit of: I wake up in the morning and work on this so that I can buy a building with this many doors.

Ike Mutabanna: So I think one of the factors about syndication is the economics of it, right? I work on syndication in the DFW area, primarily on really large properties. So mostly which is 100 doors or more. What that brings in is the kind of scale where you can not only achieve much larger returns on your investment, but you can also drive a much better return for your investors.

So one of the goals we try and do is that we try and ensure that we can return a certain amount of cash flow back to investors which we give them as a preferred return, and our goal is to try and beat what they would have got from alternative sources. So when most investors, sophisticated ones, when they talk to us the first thing they’ll say is, “Why can’t I just put this in a hedge fund or put this in an XYZ mutual fund where I can easily get 5, 6 or 7 percent returns?”

The argument that we have to be able to provide them is that not only can we exceed that, but the fact is that this is being backed up by a hard asset. So it’s very important for that to be an asset that is truly valuable.

Now many investors, when they get into syndication, there’s a different strategy that people will follow, right? Because of the fact that we follow a very cash flow driven philosophy, we don’t necessarily look at appreciation from a very wide angle. We don’t go after really large appreciation. So we stay away from properties where there is speculation that there might be five, six, seven times growth. Usually what happens in those cases is that either the market is severely undervalued because of some reason that we don’t necessarily know yet, or it’s in a neighborhood where there is a speculative element telling you that appreciation is going to happen but you have no way of knowing.

On the other hand when you go to a more conservative underwriting technique, where you say that we think we can get 2x or 2.5x multiple on this property, but we can drive 10% cash flow returns, well now that becomes very attractive. Because we’re not promising you that for every 50k you put in you’re going to get 150 or 200k back, but what we are saying that is that on a yearly basis we’re going to be able to return 10% back to you, which in most markets is a fantastic return. You know, you’ll be lucky if in certain places you can get even five or six percent, which usually matches what aggressive investors can get in the stock market or in hedge funds.

So our syndication philosophy is very much driven around finding properties that are larger scale, 100 plus doors, in fact almost every one I’ve done is 200 plus doors. And where we can — our underwriting can be conservative enough that we can promise, not promise, but rather where we can project, very conservatively, that we can return the capital with ten percent returns on a yearly cash basis, as well as potentially reach a 2x multiple.

John Carney: That all makes sense to me. And I’ll sort of come back at you with my summary. My question being, do you bring improving the property and raising the rents, right? You didn’t mention that, but is that part of your overall strategy?

Ike Mutabanna: Absolutely.

John Carney: Okay.

Ike Mutabanna: Absolutely. That’s always part of the strategy John. The extent to which you can achieve that can vary, our goal is always to find properties that are — where the rents are some percentage below what the market can bear. And one of the things that we try to keep in mind is that when we project our financials on the basis of doing the rehab and the renovations for repositioning, that we’re not projecting that we’re going to go try to match the market, we’re just going to try and improve the rents to come close to the market but still stay below. Because that’s what insures that we’re left with some buffer to deal with market fluctuations.

John Carney: So to recap: you’re finding units, your sweet spots, plus or minus 200 doors. You’re not trying to set a record in that area for the highest rent, what you’re trying to do is find undervalued properties that are undervalued by rent and fix those up and improve the multiples so that your investors get a preferred return and then you can scale the business model by replicating it. Would you say that’s accurate?

Ike Mutabanna: That’s a great recap.

John Carney: So we just acquired a large asset. It was a complex capital stack. Having a seat at the table through this entire process from the day we first went and looked at this building, until where we are now, under construction building 29 units out. That’s almost coming up on a year for the work.

But I would throw this back out to you and the listeners: once you have been invited into a multifamily deal that’s a little bit more complicated than your standard single family home transaction, you’ll learn that with the right team in place you can go back out and do it again. Would you second that?

Ike Mutabanna: Absolutely. You do it once. The first time is definitely frightening. It’s also really, really hard. I think a lot of people under — they don’t realize how hard it can be to convince investors when you’re doing it for the first time. But once you’re over that hurdle; you’ve learned the business; you’ve learned how your entire process flows; you’ve learned the language, you’ve learned how you’re able to communicate with investors, what you can and cannot say. It starts becoming a lot more second nature to you the next time around. And you just get better every time. And you keep learning as well.

John Carney: So let’s carry that thought on and — I’m going to pick your brain here for just another couple of minutes before we wind this up — but three tips that you could give a listener or someone who, if you’re approaching an investor, what would be — sorry I’m a little all over the shop.

I’m just going to pick a number out and say $50,000, or maybe I’m too high, maybe $25,000 can get you a seat at the table. Talk about the three advantages of being in real estate through the syndication model. Especially if this is something that you want to pursue as a career. You have to get started and you have to learn somehow. So why not get started now with someone like yourself? So what are the three advantages that you can offer up to the listeners that would say, “Hey, think big, play big and this is why?”

Ike Mutabanna: Sure. So I would say that the first thing is almost self-evident, which is the economies of scale. There is absolutely no chance that in the single-family world you are going to achieve the kind of scale that you can achieve in multifamily. And the scale goes in many different directions, right? It’s not just in terms of the net income that you can derive, but it’s also the risk. When you have three single family houses versus a ten-unit apartment building, your risk is diversified in a far better way than when you have those three houses. So the risk diversification.

There’s better economies of scale in terms of net income, there’s also economy of scale in terms of the cost, right? How you manage the cost. Once you start going into larger size properties in multifamily, you find it easier to be able to afford to have property managers who can manage things for you where you’re just more of in a supervisory role. That makes it easier for you to start than once you’ve done one to go to another, because you’re not managing everything yourself. When your single-family world, unless you amass a really large portfolio of maybe 10, 15, 20 properties, you necessarily may not want to hire a property manager to do it for you because that then cuts into the little income that you’re making anyway on those. So those are the big advantages that I would talk about.

The other interesting advantage that you would see in multifamily is that, unlike single family, where the valuation of a single family, which is dependent on the market comps, in the case of multifamily it actually depends on the rental income that you can drive. Which means you can force appreciation. So if you can come up with creative ways in which you can increase rent, you can increase overall income, you can force appreciation in the valuation of that property, which is something that is phenomenal. What other asset can you think of where you can actually decide how much — and as long as, of course, certain parameters are fulfilled where you can push the values up by actively doing things in that property. So I would say risk mitigation, economies of scale and value appreciation. Three really solid reasons why multi family is a far superior asset.

 

John Carney: I love it. Great advice and thanks for coming up with those quickly on the spot Ike. Well I wrap this up with what I like to call the two-minute drill. And these are just a couple of questions I’m going to throw at you rapid fire.

Are you a reader? And if so do you have a favorite business book or non-fiction book that you’ve read more than once or you made some notes in that you keep on your desk and refer to from time to time?

 

Ike Mutabanna: Yea I’m a reader. A very avid reader. I’ll mention two books. One is non-fiction and one is a fiction but which has a lot of — it’s really influenced me a lot in my business life. The non-fiction is a very old book by Dale Carnegie called “How to Influence People.” Really old book, some of the things in there might sound outdated, but the underlying principles are really solid. And they relate to always having what he calls a “you” attitude. When you’re working with someone how do you do something for them is what you should be thinking about, because when you do that, it all comes around eventually.

The other really awesome book that I’ve kept close to me is called “The Alchemist” by Paulo Coelho. Even though that book is a fiction book, it’s usually coded more in the circles of people who like to read books that sound spiritual in nature. It is spiritual and it has helped me from that perspective. But it has also helped me motivate and inspire myself in what I’m doing. There’s a very interesting sentence in there which I’m going to paraphrase. It says, “when you want something really, really bad and you take the action to achieve it, the universe comes together to help you achieve it.” Which I think is fantastic. It’s a phenomenal way to think about something.

 

John Carney: So I’m going to use that in the show notes as your favorite quote. And I like that. I mean, I don’t know, there’s a lot of good motivational sayings that come from business leaders and athletes alike about overcoming the odds and the obstacles, and I think I’m kind of looking back now, some of the people I follow, on my social media threads are quoting the stoics.

So nothing is outdated because guys like Marcus Aurelius were writing this down a long long time ago and it’s pretty relevant to life and business today, right?

 

Ike Mutabanna: True, very true.

 

John Carney: Okay. Well one last question. How do you train for success? You’ve moved around the world, you’re a successful person, you know how to recruit a team. But how does that look like? How do you achieve that consistently?

 

Ike Mutabanna: I think what I try to do is always take up one activity that is not related to my business which I take up as a passion activity. Something that I put a lot of energy and effort into and that usually helps me train my mind to stay in that super energetic state, which then transfers into my work and business as well. So what I’ve recently started doing is — I mean I’ve always been an avid mountain climber, I’ve never really done any kind of technical climbs, it’s usually just been putting on my hiking boots and going with a bunch of friends and trying climbing whatever peaks are accessible. But about a year ago, I started realizing that if I really wanted to scale some heights here I needed to learn how to do technical climbs. And so then I went ahead and joined this local group that does a lot of technical climbs and they have beginner’s groups as well. So I’ve started doing that, it’s very early stage yet, but my goal is within a year’s time to get to a point where I can go climb at least one intermediate level peak in the U.S. which involves some amount of rock climbing.

 

John Carney: That’s a great goal. That’s a highly — you have to be very highly focused and strong to scale intermediate level fixed rope climbs. So I mean, I wish you the best of luck in learning that, and not that you won’t achieve it, but that’s going to be a practice. It takes mental and physical discipline to build up that stamina to be good at it. I lived in Colorado for a number of years, I was never a fixed rope mountain climbing type person. There’s so many sports and activities available out there that that just wasn’t one that I fell into but when I see photos of the people I know standing on top of these spires, it’s awe-inspiring. So that is great, thank you for sharing that.

Alright, well there you have it folks. I truly hoped that you picked up some actionable advice today from my conversation with Ike. And I want to thank Ike for taking the time out of his busy day to join us in The Locker Room. Where can our audience find you if they are interested in following you online or maybe even connecting with you to talk about syndication opportunities?

 

Ike Mutabanna: Sure. I think the easiest way is to go to my podcast website: it’s called thesidebusiness.show. You could also go to thesidebusinessshow.com and it has both my podcasts and also my contact information on it. I’d love to hear from your listeners.

 

John Carney: Perfect. You’ll be easy to find then. Alright. There we are.

Make sure that you check out the Real Estate Locker Room Show on iTunes, Stitcher or Google Play and hit that subscribe button to ensure that you never miss out on the pro tips from our great guests like Ike.

The mission here once again is to help you elevate your real estate game and be successful. If you like what this show is all about, I’d be grateful if you would leave us a five-star review on iTunes, Stitcher or your preferred podcast platform so that other like-minded real estate professionals and people just like you can find us when they are searching for real estate shows.

The post-game report show notes, links and additional content related to this show, specifically to the wonderful world of cricket, will be available on my website: johncarneyonline.com/podcast, and while you are there feel free to drop your email into the newsletter sign up form and you’ll occasionally receive some real estate investing insights, tips, tricks, hacks and useful tools from me.

Remember to stay focused on your goals, have fun and stay in the game. I’m your host John Carney and until next week, please remember to work hard, play hard and profit hard in your real estate game.

One more time, really thankful for you taking the time out of your busy day Ike to share your story of success.

Ike Mutabanna: My pleasure John. Thanks for inviting me.

(Music Out)

End Audio

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© John Carney 2017

JC 024: High Margins and High Returns with David Herrera

September 6th, 2017 | no comments

Cheap isn’t always good for the velocity of growth

The Real Estate Locker Room Show with John Carney

David Herrera is living his childhood dream as a Chicago real estate developer. He lives and breathes real estate and finance and classifies himself a “financial markets athlete.” All profitable real estate development begins with simple math.

David is a full time estate developer and financier with over 12 years of diverse financial services experience across investment banking, private equity, asset management, real estate development, structured finance and the is principal of The Golden Mean Group Inc. David’s career kicked off in the big league at XL Capital Ltd, a Bermuda based Fortune 500 firm with over 49 billion in assets under management.

Prior to pivoting into a career as a full time real estate developer David furthered his financial markets experience as the Second Vice President of the Northern Trust Corporation’s Structured Finance Group and oversaw financial modeling, structuring, pricing, P&L oversight and transactional execution for the banks $3.5 billion interest-rate derivatives book and hedging product offerings.

David is passionate about developing communities and driving markets. He believes that it isn’t work when you love what you are doing day in and day out.

Opportunity is everywhere – David’s wealth of knowledge and proven track record allows him and his team to secure high margin, high return infill development opportunities for their core investors.

Five key points

  • To become an expert in your field, whether it’s sports or business, you need to live and breathe it every day – that’s what gives you the competitive edge.
  • Surround yourself with information and resources to support your career: read the market news daily, learn about geopolitical issues that may affect interest rates or stock prices – have a passion for what you are doing.
  • Cheap deals aren’t necessarily the best deals. It is necessary to do your homework and quantify the deal before going ahead. Markets where the land is more affordable may have rents that aren’t as strong. Look at the path of growth and the velocity of appreciation in the markets you are considering investing in.
  • Look at location, property zoning and land entitlements. How many stories or square footage can you build in the location, particularly in a core urban infill area?
  • Hiring people with proven experience is important for building a successful team and when you are pitching to a bank. Its an easier sell when you approach a lender with plans, an experienced architect, a proven builder and other competent team members supporting your project.

Favorite athlete: Michael Jordan – NBA All Star.

Real estate roll models: Jerry Reinsdorf and Ted Turner

David’s pro tip: Learn from the successful people around you; what makes them successful? How did they become successful? Learn from other people’s mistakes.

Highly motivated – serving and enhancing the community through development.

Thank you David for taking time out of your busy schedule to share your story and valuable insights with us!

Reach out to David and his team at: www.goldenmeangroup.com

Email direct: david@goldenmean.co

Company Website: Golden Mean Group Inc

Linked-In: David Herrera

Facebook: https://www.facebook.com/davemichaelherrera

Listen to all the episodes of The Real Estate Locker Room Show and sign up for my FREE monthly newsletter at http://www.johncarneyonlie.com

Connect with John Carney
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© John Carney 2017

 

JC 023: Resident Retention and Amazing Communities with Lauren Tabor

August 30th, 2017 | no comments

Leadership, Solutions & Infectious Enthusiasm

Property manager for Bridgeview Apartments and Perry Payne Apartments, Cleveland, OhioLauren is the property manager for two iconic, Downtown Cleveland apartment buildings; Bridgeview Apartments and Perry Payne Apartments. Her enthusiasm is infectious and if love your work then every day’s fun. Lauren believes in teamwork and strives to be the leader that inspires them to reach amazing goals.

Lauren’s philosophy is to position the people on her team for success. She believes in setting goals and having a game plan to achieving those goals. Lauren believes in giving her team the freedom to hit their targets without micro managing them. She learns what inspires each person in order to keep them properly motivated.

Hire positive people who are creative and solution oriented. These are traits that people already have and can’t be trained.

Solving problems is part of the job description for property managers, so showing up with enthusiasm and helping your tenants out is the job description. Lauren always remembers that these are people’s homes and her clients require a special kind of personalized customer service. Lauren gets to know her tenants on a personal level and understands that her job is to help them enjoy their home.

Lauren and her team also focus on building strong communities for their residents. This effort leads to high resident retention, which reduces expenses by lowering the need to continuously flip suits.

“The Customization Station” – Lauren’s company offers new residents the opportunity to choose their own finishes and upgrades to customize their apartment as if they owned it. Lauren was instrumental in creating this unique point of difference for The Landmark Companies and is stoked to offer her residents something extra special to make their apartment feel like home.

7 Key Points:

  1. Be a leader who inspires your team to be amazing
  2. Your job is to set your people up for success and light the fire
  3. Pay attention to each individual in your company but don’t micro manage
  4. Hire positive, solution oriented people for your team
  5. Your job doesn’t end when the tenants sign a lease
  6. Building a strong community results in higher resident retention
  7. Believe in you gut, it’s usually right

Favorite athlete: Mary Lou Retton – Gold medal Olympic gymnast

Lauren’s pro tip is to stay positive and solution oriented and set your teams up for success.

Lauren invites you to reach out by email at ltabor@landmarkmgt.com.

Check out Lauren’s apartment communities;

And follow The Landmark Companies on the following social channels;

Thank you Lauren for taking time out of your day to share your leadership and property management tips with us.

Listen to all the episodes of The Real Estate Locker Room Show and sign up for my FREE monthly newsletter at http://www.johncarneyonline.com

POST GAME REPORT: Episode Transcript

JC 023: Resident Retention and Amazing Communities with Lauren Tabor

 Leadership, Solutions & Infectious Enthusiasm

Announcer: Welcome to the, “Real Estate Locker Room Show” with John Carney. Did you know investing in real estate is a team sport? Join John and his guests as they explore the business of real estate and athletic competition. The goal for this show is to grant you direct access to the real estate pros that are closing profitable deals and growing their businesses. On the “Real Estate Locker Room Show” we are getting in the ring with successful investors, developers, operators, and all of the industry professionals to learn what it takes to achieve on-going success. Now it’s time to kick-off and level up with new ways to grow your real estate business.

 

John Carney: Welcome back to The Real Estate Locker Room Show. I’m your host John Carney, coming at you again today from the sunny Westside of Cleveland, Ohio. Today we are going to be talking to a very experienced multifamily property manager who works for The Landmark Companies based in downtown Cleveland. Please help me welcome Lauren Tabor to the show. Good morning Lauren, how are you doing?

 

Lauren Tabor: I’m doing great John, thanks for having me, I’m excited to be here.

 

John Carney: Perfect. Alright, just a little bit about Lauren: she has worked for The Landmark Companies in downtown Cleveland since 2005. She started out as a leasing consultant and has worked her way up to being the property manager for two of downtown Cleveland’s iconic apartment buildings located in the Historic Warehouse District: Bridgeview apartments and Perry Payne apartments.

Lauren manages a dozen employees and 350 apartments. She loves what she does and her enthusiasm is infectious. We can hear it in your voice. Welcome to The Real Estate Locker Room Show Lauren.

 

Lauren Tabor: Thank you so much.

 

John Carney: Cool. Well, you love your job. We’ve talked about that plenty offline. We have not in this show’s young twenty-some episode history yet been able to talk to a property manager like yourself who works specifically for multifamily buildings, let alone manages two buildings. So, the goal of our show today is to let all of our listeners out there who are either multifamily operators or property managers, or anyone who wants to be in the real estate investing game, understand what it takes to be a successful property manager. Because, in my opinion, the teams one needs to assemble to run a good operation in any of the niches of real estate property management is absolutely critical.

So let’s kick this off with a little bit of a stretching question. I like to ask our guests in the locker room: do you have a favorite athlete that maybe inspires you?

 

Lauren Tabor: You know what? I could give the cliché Cleveland answer and say I love LeBron James, because who doesn’t. Here he’s king. But in all honesty, the athlete that has inspired me most in life is Mary Lou Retton. I remember watching the Olympics with her doing gymnastics. I remember watching her win the gold. I was so inspired by her. Just seeing what could happen if you put all of your blood, sweat and tears into something and just ran at it with all your might and never gave up and fought and fought and fought. What I saw from her is that you can do anything. And I also absolutely loved her relationship with her coach. I loved that after she nailed her landing she ran and gave her coach, Bella, a huge hug. I remember thinking of that relationship as well and thinking: when I do something amazing I want to have someone like that in my life, who is so on board with me I can run and give them a hug. That’s something that I’ve carried with me my whole life. And not only do I hope to have for myself, but I hope to inspire with my team.

 

I hope that I can end up being someone that can inspire them to do their best and that when they reach amazing goals, I’m going to run up and give them an amazing hug because I’m so excited for them and they’re so excited for what they’ve done. Those goals and those relationships inspired me from a very young age, and I think I’ve taken them with me in all categories of life to this very day.

 

John Carney: Thank you for sharing that. Mary Lou Retton. I remember watching that live. I don’t know that I had the same inspiration, but your story has inspired me. So, I believe there’s a direct correlation between the discipline the professional and Olympic athletes put into their craft and what we put into our professional lives.

You are in a leadership position. You’ve got a large responsibility, and you have a team of people. So, could you just share a little bit about what it takes to successfully run 350 apartment units in two buildings in an urban market these days?

 

Lauren Tabor: Absolutely. I have a kind of philosophy of business. I always believe that you can set people up for success or you can set people up for failure, and your job as a manager is to make sure that you are setting people up for success. I think there’s a sad tendency for managers to overlook what’s going on with their employees and accidentally set people up for failure. And I think you need to take a look at who you’re managing, what inspires them, so that they’re motivated, and then outline specific goals for them. Take the time with your employees to make sure they understand how to achieve those goals. You can’t just set a goal on a table and tell someone to go, and then cross your fingers that they read your mind and know exactly what to do. It’s a two-step process: you have to outline the goal and then give them a game plan to achieve that goal. And then after you’ve given them some basic steps, you give them the freedom to accomplish that task in whatever way suits them the best, so that you’re not micromanaging. If you’re up in every step of their business, then they’re going to feel strangled and that they don’t have their freedom. They’re not going to feel like they accomplished anything, because you’re just hovering over them the whole time.

 

It’s a bit of a dance, but it’s just simply setting people up for success and making sure they’re motivated to get there.

 

I think you have to pay attention to each individual in your company, again, just to see what motivates them specifically. You can’t blanketly motivate anyone, although money is a pretty fine motivator all over I’d say. But just for an example, you can’t say you win a giant juicy steak at the end of this, by the time you achieve these goals, and you’ve got a handful of vegetarians on your squad. You’ve got to make sure that you actually know what is going to motivate everyone to properly light the fire that needs to be lit to get them to go and feel proud of themselves when they’re done. You want to feel proud of them and you want them to feel proud of themselves. You have to let them achieve their goals.

 

John Carney: That is great advice. I’m sure that any manager or anyone in a leadership role in a company is identifying with exactly what you’re saying. With that being said, to carry it a little bit forward, are there certain things that you look for? Or over the years have you been able to maybe distil a certain personality or a certain gut feeling that you have when you meet a new candidate. For example, if you have team member that’s a high achiever and moves out of town for a different opportunity, and you have to fill a space. Now you’re recruiting for your team, you’ve talked a lot about motivating the team members that are already in place. Do you have any advice for that?

 

Lauren Tabor: Yes, absolutely. We just actually went through this. We had two great members of our team shifted. So, we’ve been through a lot of interviews lately for a couple of positions here. When I’m interviewing people, I try to sit down and get to know them personally on top of just: do you know how to accomplish the task? In the conversations, like you were saying, you’re hoping to find someone who is motivated. I hope to find someone who thinks outside the box. That’s something that’s important to me.

This particular industry is a lot more creative than I think a lot of people realize. It doesn’t have to be a cookie cutter, cut and dry thing. I look for people that think outside the box and are positive. It’s really important for me to find a positive personality, because if you get someone who is negative within your team, they’ll drag the rest of the team down. So, finding someone who is looking to the bright side of things. I would say that I’m a solutions oriented person. Some people hunt for problems and talk about the problems and yell at people about the problems. Whenever I’m dealing with things, I hear an issue and I immediately think, “Ok, here’s what’s on our plate, this will be ok, how do we fix it together?” And I need to find someone who’s on board with that concept to join my team. If I don’t have someone who is looking for solutions, but who’s looking for problems, that’s not going to fit in the team.

 

So, there are lots of skills in this industry that are trainable. When I’m weeding people out through an interview process I’m looking for the things that are not trainable. What makes you special? What makes you different? Because I can teach you everything you know on this computer, on the leasing, on all this kind of stuff. I can teach everyone the basic brass bones of the company. But I can’t find a positive, solution oriented team player. That’s what I’m looking for.

 

John Carney: So let me just jump in with my interpretation of what must happen, and you can call me out if I’m totally off base. If you are managing one unit, two units, 200 units, 2000 units, whatever the count might be, eventually you have to expect that you’re really going to be finding solutions to problems, on one hand, and you’re going to be dealing with the complete variety of human experience, right?

 

Lauren Tabor: Yes, absolutely.

 

John Carney: And personalities. This helped me out when I started my second business, and I wish I’d known this when I started my first. If you have an expectation that you’re going to show up to work and solve problems, it makes your day easier. Because then when the emails — I’m sure we could do a whole podcast part two on just angry emails or complaints that you receive — you already know that that’s part of the job description. You’re looking for people that say, “Hey, that isn’t really a problem. We understand that your toilet didn’t flush right, but we’ll have someone there in ten minutes to fix it, and then we’ll be onto the next minor issue.” So, that’s kind of part of the job description for being in the property management industry, correct?

 

Lauren Tabor: Absolutely, you nailed it on the head with that. There are plenty of little issues that come up every day. There are plenty of giant issues that come up every day. You can’t come into that kind of environment seeing it as just terrible things or you can’t carry the weight of it, if the problems are beating you down. You have to just be working for the solutions and you have to motivate your team to fix these issues.

 

And you have to remember that these are people’s homes. This is a different kind of customer service than retail sales or anything like that. We are in a whole different ballpark of the industry where we are helping people with where they live. And they don’t want to just feel like a number. They don’t want to be apartment 601. They want to be Jenny Smith, who has been here for three years, who has a cat named Frisky and she’s taken it to a couple calendar events. I don’t know, something like that. It’s nice to make it personal. You always have to let the people feel heard and important and take care of their issues because it is home. It’s different than anything else, and you have to treat it as such.

 

John Carney: And create a community right.

 

Lauren Tabor: 100%

 

John Carney: Whether it’s psychology 101 or what humans just need outside of air, water and food. We need a sense of community, and you help create and maintain that community. You start, really, by building the culture within your team. Am I right?

 

Lauren Tabor: Absolutely. And speaking of that, we love fostering a community. We actually have a number of resident events throughout the year. We have one of them going on tonight. We have a tailgating party to kick off our Browns season, and we have food trucks, wine and beer, and live music. We host events so you can kind of get to know your neighbors, get to know your management company. It’s our opportunity to let our residents know that once again we love them, we’re grateful for them, and thank you for staying with us. Holy smokes, you could be staying anywhere and you chose us! Thank you! So have this awesome party and come play. Be part of the community.

 

John Carney: Right. If any of our listeners are in downtown Cleveland and looking for a new place to live, I’d recommend checking out Bridgeview and Perry Payne. But if you go through your websites and the various properties that are managed by The Landmark Companies, and you look at some of the people who have submitted reviews, you have some residents that have lived in your buildings for a long time. So that is a testimonial to someone doing something right. I believe people have a choice, and I’m sure you acknowledge that with your team. Talk about resident retention and what advice you could give to another property manager in your position who is located somewhere else in the world and is tuning into this, who might be seeking a solution to higher retention.

 

Lauren Tabor: Absolutely. If you can close the back door you don’t have to worry about opening the front. Resident retention is hugely important and we actually are lucky. We have a group of people we even joke about as our Bridgeview retirement community that are going to stay here for life and get VIP status to our parties and whatnot.

 

Really, we let people know that they are thought about and cared about throughout the whole year. And this is where I’m talking about getting creative. Enjoy these people. Your job does not end when they’ve signed their lease. They are still going to come home. Give them a call that first week they’re in the door. Check on everything. Make sure all the lightbulbs are still working, that they’re happy, that they’re heard and get them off to the right start.

And then you want to have little ticklers throughout the year, like a little birthday celebration. When people come in they have to fill out applications. We get their birth date, and we keep a file of the birthdates. Then on our resident’s birthday they get a bag of candy and balloons and a little card from all of us that’s signed and put on their door. So, it’s little stuff like that.

There’s the party events that we have. We have early renewal bonuses for people, so that if they do decide to renew early, then we offer them a $50 gift card. Because in the grand scheme of things, what’s that to you as a management company, to offer up something special like that to, please stay with us instead of going somewhere else. And then you don’t have to share the expense of turning a suite and getting it market ready again. So really think about that, as a company, where is it important for you to spend your money? Is it better to spend a couple $100 on some resident retention? Or do you have to do a whole market flip of the suite and advertising costs and everything of that nature.

 

So really, just examine the importance of where your dollars can go. The fewer that go to resident retention to get some smiles on their faces, then you don’t have to worry about filing people in the front door and trying to run specials for things if you’re in a bad situation or anything like that. It’s hugely important, and again, one of those things that makes it feel like a community and home.

 

John Carney: That’s outstanding advice and great tips for retaining residents if you’re an owner, operator, manager or property manager or any type of residential landlord. The incentive to stay. Really quick, I want to ask you to talk a little bit about a very unique offer that The Landmark Companies has for incoming tenants. If you’re scheduled to turn over a unit and someone is looking at that unit, aren’t you doing certain things with finishes and paint and carpet.

 

Lauren Tabor: You’re revealing our secrets John! We’ll share. Yes, we are. Thank you for bringing that up. We offer a very unique opportunity for our residents that we have nicknamed our customization station. Typically, the only time that you have to select finishes or upgrades to a home environment is when you have purchased a house or purchased a condo. You have to own something to make choices about décor. And what we offer when you come in, is the opportunity to customize your suite as if you were owning it. And you get to choose either your colors of granite, colors of backsplash, refinishing colors of cabinets and fancier knobs that we can put on. We have an upgraded lighting package, there is a variety of hardwoods you can choose from if you wanted to put hardwood throughout your suite. So, we have all of these choices. If you want to do custom paint colors throughout, you can absolutely do that.

 

Now this doesn’t come without a price tag, however the price tag goes right into what the new market value would be. For example, we’ve got a lot of new construction that’s been going on around us that could be considered our competition. So, we’re competing with new stuff and instead of just offering the brand-new granite and hardwood and everything that’s in there, that dollar amount is at a market value for that level of upgrade. So, when you do upgrade a suite over here, you do increase the market value to that level of upgrade. And people are happy to pay it though when they are getting what they want. They aren’t walking into the cookie cutter that’s already made. They get to choose, and to feel like they own it. Again, making it their home, a very special to come home to and something you don’t really want to leave.

 

John Carney: That reminds me of the old choose your own adventure books I used to read.

 

Lauren Tabor: Oh god the best books ever.

 

John Carney: So, you are providing your incoming residents, your customers basically, a choice in finishes and the look of their unit. And that upgrade was scheduled anyways, so you’ve got two wins there: a win for the company and a win for the resident. Also, if I’m a landlord listening to this I’m thinking of dollar signs. So, do you have to sign a longer lease? Do you just automatically know that you’re getting a longer retention? How does the cost of this customization station become absorbed? So, if you can just shed some light on how the cost breakdown works. I think that’s an important business point for anyone that might want to implement this.

 

Lauren Tabor: That makes total sense. The goal here is that you want people to still take the opportunity to do the upgrade, so you don’t want to make it cost prohibitive. You’re not asking them to buy this upfront or anything like that. So they aren’t going to see these enormous price tags. And our goal is pretty much to break down the cost of what it would be for us to recoup the cost over three years. That’s kind of where we see it, because, like I was saying, they’re not just buying the product, but the actual market value of this suite is increasing for good.

So, the value goes up at a level that lets us recoup the cost in three years, and then it stays at that point or increases for the time frame after that. So, you just continue to make profit after that. It’s just a great, simple company decision that makes sense all around.

 

John Carney: One more question about the customization station/choose your own apartment opportunity that you offer residents. How long has The Landmark Companies had this program and were you a part of the conversation that brought this to the forefront? Because it’s innovative.

 

Lauren Tabor: Yes, we’ve had this about five years. And I definitely was involved in the conversation for it and helped develop a whole presentation board, which would show the different finishes so people could point and choose what they want, because everyone is visual, especially when you’re choosing finishes. We have some concrete samples that are in the leasing office, and we have a customization station little menu. I don’t know if you’ve ever been to a fancy hair salon and seen how they have that thick card stock little short menu to look at. We have a menu for people to take home with them to kind of dabble in the ideas of what the cost of hardwood would be, what the cost of granite would be, what the new lighting package could be, and just start to daydream about what their suite could be for whatever their budget would allow.

 

And this is the kind of stuff I thrive on. I love getting these creative ideas and doing something new and different. And you know what? Everyone who’s shopping around for apartments loves to find something new. What makes you different from every other apartment complex that they’ve walked into. If you’re moving to Cleveland, and you’ve got every option, and you’re going door, to door, to door and you just see this box and this box and this box, when you go to one and they say, “You know what? You can come here and you can make this your own.” And, “Hey, we do these fun parties and we’re really fun, well you’re having fun with us.” You remember those people, you remember that experience. That makes you stand out, it makes you different and I love that about our buildings. We are being memorable by getting stuff like this together. It’s fun to be creative.

 

John Carney: Well, thank you for elaborating on that, because it’s a pretty neat concept that came to fruition. And it is definitely a point of difference for you in downtown Cleveland and any market across the country right now that’s competitive and looking for that point of difference.

 

Alright, it’s getting close to our time to wrap this up. I have a little segment called the two-minute drill which usually goes a little over, but I’m conscious of your time. Were there any sports you played as a child? Were you a gymnast like Mary Lou?

 

Lauren Tabor: Man, you know I tried doing some gymnastics. It didn’t pan out so well for me. I ended up getting involved in dance. When I was in high school I was on the dance team there and had a lot of fun doing that. I ended up being the captain. And I think I’ve always just been into motivating and getting people excited for stuff. So, sitting in the captain’s seat to get people going.

 

John Carney: The captain. So you started your leadership training through your athletic training in high school. We’ll leave it at that.

 

Lauren Tabor: Yes. I’ll take it.

 

John Carney: Perfect. How about when you’re not on the clock, I know you’ve mentioned that you’re a busy mum of two, which is another full-time job. And congratulations. Do you have time to check out and read? Are you a reader? Are there any type of motivational books you’ve come across that you’re like, “I like that, I want to keep that handy in case I need to go back to it?”

 

Lauren Tabor: Gosh, you know, I wish I had more time to read. I would love to be an avid reader. Instead, at this point in life, I surround myself with avid readers who can give me summaries of things that are interesting and poignant. So, I have lots of conversations with some great intellectuals that are in my close friendship circle. Other than that, though, I read articles that are pertinent to things here and there that pop up, in the real estate or motivational in general industry. But I come from a huge psychology study background, so I’ve got tons of psyche books that I think are relative to every single possible position in life. So out of anything, those kind of still sit on my shelves. But I’m a big believer in my gut too. And just listening to and following what you feel inside. Because darn it, it’s pretty much always right.

 

John Carney: Have you heard that your gut contains the most sensitivity, neurons, the decision-making process as your brain does? I just learned that recently, and thought that was interesting.

 

Lauren Tabor: You’re blowing my mind a little bit with that, and we’ll have to talk about that later. I don’t know about neurons being anywhere but in the brain. So, I would love to have more discussion about that.

 

John Carney: I am not an expert, but that’s just one of those interesting facts that I heard on a podcast when I was out for a run or stuck in traffic. So, I guess there is information out their folks. If you want to learn about that intuition you have that you call a gut feeling. There are people that believe that is real.

 

A couple more questions and then we can let you go back to creating amazing communities. What is your number one come-from-behind victory that you can think of in your role with The Landmark Companies?

 

Lauren Tabor: Sure. I’d say, overall, the best come-from-behind story that I know of is just the history of this property from when I started to now. When I started in 2005, we were 80% occupied. We would dip into the high 70’s. There would be so many suites on our reports, I just remember my head spinning as a leasing agent. Like ok, how do I even nail down what this person wants? And going through things and over the years, things have changed. Some of the negative players that have been in this working community have left. They’ve given room for more positive thinkers and for more creativity to come through.

 

Our dull grey leasing office is now bright colors and very welcoming. We have a cookie machine that bakes cookies every day—who doesn’t like the smell of cookies when they come in? We’ve obviously developed community programs — on and on and on with everything that we’ve done to show our residents that we care. Become a community ourselves, as a team that is managing these other homes. Now we’ve been 100% leased for about the past three years. And we pre-lease the suites and everything like that. It’s been ages since we’ve even been out of the 90’s. Just taking us from this grey, drab environment that did feel like everything else, and was not exciting, and lifting it to a level that’s not only fun to work at, it’s fun to live here. Every day can be exciting, every day can be creative.

 

John Carney: That is true. Thank you for sharing that, because you’ve just described a very team-driven, come-from-behind victory, and testament to your captainship of your team, didn’t really take any credit for that. And so, along with that, I think that you do have this amazing come from behind city. I hadn’t lived in Cleveland for 19 years. I returned a year ago, and its mind blowing to see.

 

Lauren Tabor: It’s a different world.

 

John Carney: And now that my wife and I are settled, we’re in a position where we can actually go out to some of these new neighborhoods and go to the restaurants we keep hearing about.

 

Lauren Tabor: It’s such a foodie town.

 

John Carney: There are some celebrity chefs, and more varieties of beer than I’ll be able to taste in a year. So, it’s pretty exciting times, and I’m sure that your day-to-day job reflects that with the community that you’re charged with operating downtown. Well Lauren, thank you so much for joining me in the locker room today. Where can our audience find you to carry on the conversation if they have any questions about how you bring this infectious enthusiasm to work every day. Are you willing to share your contact details in our social media? Where can people look you up?

 

Lauren Tabor: Anyone can shoot me an email if you’d like, I’m at: ltabor@landmarkmgt.com. You can find out more about our apartments at 1300Bridgeview.com or perrypayneapps.com. We’re on Facebook as Landmark Life Cleveland. And I think that’s the same handle for our twitter account and things of that nature. You can follow us all over the place and get the best tips of Cleveland. I’d be happy to answer any questions and wish everyone the best of luck. Just stay positive and stay solution oriented. Set your teams up for success and you’ll be ready to rock and roll.

 

John Carney: Boom! Well, there you have it folks. I truly hope that you picked up some actionable advice today from Lauren Tabor. And if you are a landlord or a multifamily operator tuning in to this episode, you definitely have some things that you can think about, wherever you may be listening.

 

Make sure to check out the Real Estate Locker Room Show on iTunes, Stitcher or Google Play and hit that subscribe button to ensure that you never miss out on the pro tips from our guests. The mission here is to help you elevate your real estate game.

 

If you like what our show’s all about I’d be super grateful if you would leave us a five-star review on either iTunes, Stitcher, or Google Play, whichever podcast platform you subscribe to, so that other like-minded real estate investors and professionals can find us when they’re looking for an outlet to get some information, when they’re out doing things and have the opportunity to tune in.

 

The post-game report show notes, links to Lauren and her business, and additional content related to this show will be available on my website, which is: johncarneyonline.com/podcast.

 

We generally have five tips or key points from every episode, but I believe we’ll set a new record here. A lot of good information from Lauren, so we might be in the 7-10 key point range.

 

So, let’s all remember to stay focused on your goals, have fun and stay in the game. I’m your host John Carney and until next week: work hard, play hard and profit hard.

And one more time Lauren, thank you for taking the time out of your busy day to share some great, great advice and tips on property management with our audience.

Lauren Tabor: You bet John, this was a great time, thank you so much.

(Music Out)

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