Posts tagged "multifamily"

JC 094: Open Door Capital with Jens Nielsen

July 8th, 2020 | no comments

Return on Your Investment with Multifamily Syndication.

Originally from Denmark, Jens Nielsen has lived in the United States since 1996. After a successful career in telecommunications and IT, Jens shifted his focus from being an employee to becoming an entrepreneur. He was attracted to multifamily real estate due to the many benefits and began investing in his home state of Colorado where he is currently the key principal of an 82-unit apartment portfolio.

 

After achieving success as a Limited Partner (LP), Jens decided to raise money as the General Partner (GP) in real estate syndication and raised over $1M in 2019 alone. He has passively invested in 14 real estate syndications / private investments that include over 800 apartment units, 2,000 mobile park lots and over 6000 storage units as well as mortgage note funds and private money lending. Jens mission is to help more people invest in private placements for the strong cash flow and equity growth. His company’s mission is to “Open Doors to your secure financial future through multifamily investing.”

Jens Nielsen joins John Carney today in The Real Estate Locker Room to talk about the real estate syndication process.

Key Points:

  1. Attend industry events to grow your business.
  2. Network! Meet people who have similar goals. Real estate is a social business.
  3. Create a partnership; decide on the allocation of duties with the goal of generating profit.
  4. Syndication is a good way to receive tax benefits, deductions, and it’s a good way to break into the real estate market.

Favorite Sport:

  • Cycling – Road biking and mountain biking.

Favorite Books:

Pro tip:

  • Business: Spend some time doing things that will help get your business moving forward instead of reacting.
  • Cycling: Hours of training.

 Reach Out to Jens Nielsen

Thank you Jens for taking the time to share your syndication and networking experience with the audience.

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
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© John Carney 2020

 

 

 

JC 063: Getting Started In the Multifamily Community with Neal Bawa

March 27th, 2019 | no comments

Putting Education In Action for Profit

Neal Bawa is a  true pioneer in the commercial real estate and multifamily industry with an impressive track record to back up his experience. As the CEO and Founder at Grocapitus, a commercial real estate investment company, Neal sources, negotiates and acquires commercial properties across the U.S. for 230+ investors. His current portfolio includes more than 1500 units/beds across multifamily and student housing properties in 7 U.S. states. Additionally, Neal is the CEO at MultifamilyU, an apartment investing education company, the co-founder of the largest Multifamily Investing Meetup network in the U.S. (BAMF), speaks at events all over the country, and produces his own podcasts and radio shows.

Neal Bawa joins John Carney today in The Real Estate Locker Room to share how he made the transition from the tech industry into the multifamily real estate market, the secret to his Meetup groups success, the importance of education and the action that follows it.

Five Key Points:

  1. People want and value education – they don’t want to be sold to. That’s been the key to the Bay Area Multi Family Meetup group’s growth and success.
  2. Because there’s so much money in the marketplace, unemployment is under 4%, there’s great job growth, and there’s $40 billion coming into the country every month, it is easier than ever in history to raise money, but it’s very hard to find good properties and projects.
  3. Education is not beneficial by itself. Action is the point of education.
  4. Multifamily is a get-rich-slowly business because you’re typically holding companies for 3-5 years or longer.
  5. Fixing and flipping properties will get more money in your pocket faster, but it’s not scalable like Multifamily. More than 50% of the Fortune 100 people in the United States hold very large amounts of Multifamily.

 

Favorite Sports:

  • Cricket

Favorite Athlete:

Favorite Book:

Pro tip:

  • If you’re managing Multifamily, and you’re asset-managing a property manager, ask yourself this question every week: “What are the things this property manager always says he does and never does (like tenant lead generation), and is it possible for me to outsource that to another group?”

Resources Mentioned:

Reach Out to Neal Bawa:

LinkedIn

Thank you Neal for taking the time to share your valuable multifamily continuing education resources with the audience.

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 2019

JC 059: Transition to the Multi-Family Game with Sterling White

January 23rd, 2019 | no comments

Level up your real estate game

: Transition to the Multi-Family Game with Sterling WhiteSterling White is a real estate investor and co-founder of SyndicationPro, an affordable and efficient real estate funding software built to attract capital and manage multifamily investors on one platform. Sterling sold over 100 single-family properties before transitioning to multi-family. His business Holdfolio currently owns 300 plus units across the United States.

Sterling joins John Carney today in The Real Estate Locker Room to share his real estate investment experience. He tells the story of how he transitioned from investing in houses to apartment buildings. Sterling emphasizes the importance of follow-up and explains why you must follow-up when either buying or selling. Don’t miss Sterling’s pro tips on how to build a seller’s list, how to hire your team and how to outsource your work. Tune into and don’t miss out on Sterling’s sage advice for cold-calling strategies and how to prepare for rejection.

 

Five Key Points:

  1. The secret to success in real estate is the follow-up.
  2. If you’re not on top of your game, someone else will crush you.
  3. Don’t be afraid to hire an assistant to do the bulk of the work for you.
  4. Find people who complement your weaknesses.
  5. Do not fall in love with deals. Your mind might try to make a lousy deal work.

Favorite Athlete:

  • Tom Brady, NFL Superstar

Favorite Books:

Pro tip:

  • You have to make a few mistakes on a small level so you won’t make them on a big level.

Resources Mentioned:

Reach Out to Sterling White:

Thank you Sterling for taking the time to share your expert advice on multi-family deals and cold calling.

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: @JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2019

JC 048: Wheelbarrow of Profits with Gino Barbaro

July 25th, 2018 | no comments
There is no such thing as an overnight sensation

Gino Barbaro is an entrepreneur and real estate investor. Gino and his partner Jake Stenziano, co-founded Jake & Gino, LLC, a real estate educational company that provides real estate training and coaching for investors. He has over 15 years experience in the real estate industry, owns and manages 900 units valued over $51 million and is the best-selling author of Wheelbarrow Profits.

Gino spent 25 years running a pizza restaurant prior to pivoting into a successful career as a real estate investor. The pizza shop taught him how to manage a small business and that experience allowed Gino to identify the perfect partner and build a portfolio apartment communities.

In this episode of the Real Estate Locker Room, Gino talks about his life before he became a real estate investor and how the business lessons that he learned running a small pizza restaurant helped him build a multifamily real estate company.

Gino shares how he and his partner Jake met and how they entered the apartment building market. Take notes as Gino discloses all of his trade secrets to successful multi-family investing. You will learn the importance of building rapport and establishing networks in the real estate industry and why there’s no such thing as an overnight sensation.

Five Key Points:

  1. Real estate is a relationship-based business.
  2. Once you know the reason why, start looking for mentors. Follow their roadmap and learn the ins and outs of the multifamily industry.
  3. Nobody is an overnight sensation; they grind, they work, they miss important events to get to where they are.
  4. A mentor is such an important team member because they guide and oversee the business from a wider perspective.
  5. Acting as a sub syndicator allows you to raise money for somebody else’s deal.

Favorite Athletes:

Favorite Sports:

  • Baseball

Favorite book:

Pro tip:

  • Surround yourself with like-minded individuals and join mastermind groups to achieve more success in your industry.

Reach Out to Gino Barbaro:

Thank you Gino for taking the time to share your thoughts on how to successfully build a multifamily real estate business.

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: @JohnCarneyOnline
Twitter: @John_M_Carney
Instagram: @johnm_carney

© John Carney 2018

JC 044: Multifamily Underwriting 101 with Omar Khan

May 30th, 2018 | no comments

Investing is a team sport

JC 044: Multifamily Underwriting 101 with Omar KhanOmar Khan is a manager at the Dallas, Texas private equity firm Boardwalk Wealth. Boardwalk provides international investors with a way to place money in US multifamily real estate properties.

Omar is a successful investor with over a decade of experience. He has advised over $3.7 billion worth of capital financing and mergers and acquisitions transactions. Omar is considered an expert in capital markets and strategic planning by his peers.

In this episode, Omar shares how he determines the value of an apartment building before entering into a purchase contract. He explains the process of underwriting as well as what it looks like from the viewpoint of an investor and a lender.

Omar and John dive into the details of CAPEX, upgrades, and how to factor them into his elaborate equation. Omar explains how to manage the time from vetting until closing the deal. He shares the common mistakes that most investors make before, during, and after a deal and offers up the “must do’s” to prevent them.

 

Five Key Points:

  1. You don’t have to be the most gifted person on a team, but make sure you outwork everybody.
  2. It’s critical to understand the track record of the people you work with.
  3. Investing is a team sport – you shouldn’t be doing everything yourself.
  4. The clock starts when an asset is under contract.
  5. Don’t overpay.

 

Favorite Athlete:

Favorite book:

Pro tip:

  • Don’t be in a hurry to get into a deal, especially a deal with the wrong people.

Reach Out to Omar Khan:

  • Email: Omar@boardwalkwealth.com

Thank you Omar for taking the time to share your expertise on how to value and underwrite multifamily deals.

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: @JohnCarneyOnline
Twitter: @John_M_Carney
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© John Carney 2018

JC 043: Mindset and Staying Power with Tim Bratz

May 23rd, 2018 | no comments

From a maxed out credit card to $85 Million

The Real Estate Locker Room Show EP 043 Tim BratzTim Bratz is the Owner and President of CLE Turnkey Real Estate, a real estate business that buys, renovates and holds apartment buildings and short-term vacation rentals in Ohio, South Carolina, Florida, and Georgia. Tim founded the company when he realized the long-term benefits of holding a solid real estate investment versus being on the sales side as a commercial real estate agent

As a former real estate agent, Tim already had valuable knowledge as to how the real estate industry works. You locate a property, look for a buyer, and receive a commission when the papers are all signed. Tim quickly identified that being the owner of the property was the path to establishing true wealth. He set his sights on the multifamily industry when he learned that apartment owners earn thousands of dollars a month passively.

His quest for success as a full time real estate investor started with the cheapest property he could find and a maxed out credit card. Tim sought out mentors, developed a plan and now owns 1,175 rental units with a portfolio values estimate at $85,000,000.

In this episode, Tim talks about his career before he became a full-time investor, who inspired him to become an apartment investor, the challenges he faced along the way and how the first deal changed his life forever.

Five Key Points:

  1. There’s no way to gain all the real estate knowledge without doing the activity.
  2. Buy as many properties as much as you can, as long as it cash flows.
  3. Being through the grind is a lot of work and super stressful, but it makes you a better steward of capital.
  4. As sexy as numbers look on paper, some profits do go right back to the property.
  5. Just because something’s listed for a certain price doesn’t mean it’s going to sell at that price.

 

Favorite Athlete:

Favorite book:

Pro tip:

  • Ninety-five percent of life is mindset. Knowing where you want to be and creating a roadmap to get there is essential.

Reach Out to Tim Bratz:

 

Thank you Tim for taking the time to share your success story and expert advice on apartment investing.

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
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© John Carney 2018

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 022: Grit and Billion Dollar Real Estate with Brendon Bergen

August 23rd, 2017 | no comments

Your success and failure depends on you

Every deal starts with a financial model. Brendon Bergen is the Director of Asset Management for Affirmed Housing Group in San Diego. He embraces the team aspect of the real estate game and is always on the lookout for the most efficient way to operate an asset and add value for the residents.

Brendon’s company looks after the environment and has implemented solar powered electrical systems at their properties in order to strive for Net Zero electric. Solar offers a triple win solution; the owner benefits, the city benefits and the tenants pay a fraction of “on grid” electrical prices. They install high efficiency water systems as well.

Brendan loves working on repositioning older, rundown assets. He tackles the challenge of each project head on and enjoys witnessing the tangible transformation of the renovations. Improving the asset and the tenant experience results in win, win.

Brendon moved from Cleveland to California to pursue his real estate career right at the beginning of ‘The Great Recession’ – the worst time to be knocking on doors to interview for a job in real estate. He relied on the grit that he developed on the wresting mat to manage the “no’s” that he received job prospecting. His perseverance paid off and Brendon landed a job as an analyst for a portfolio holding retail centers, office and industrial real estate.

Brendon’s number one tip for success in the real estate game is to be resilient. He highly recommends joining the Urban Land Institute as a networking platform and a way to learn who the players are in your market.

5 Key Points:

  • Always look for ways to be more efficient and add value.
  • Surround yourself with the right experts.
  • Add solar technology to multifamily and commercial real estate projects.
  • Understand the fundamentals of real estate development on small projects before you tackle larger projects.
  • Be resilient. Your success and failure depends on you.

Favorite athlete: Lebron James – NBA player

Favorite book: An Unfair Advantage by Chad M Robinchaux

Favorite quote: “The strongest iron comes from the hottest flame”

Brendon trains for success by waking up early, working out and getting to work early.

Connect with Brendon on LinkedIn or send him an email, brendon@affirmedhousing.com

Affirmed Housing Group – www.affirmedhousing.com

Thank you Brendon for taking time out of your busy day to share your success tips with us today.

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
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© John Carney 2017

JC 016: Lessons from selling 42,000 units with Daniel Burkons

June 21st, 2017 | no comments

Multifamily success begins with a strong team

How do you eat an elephant? One bite at a time. Dan Burkons joins us in the locker room today to share his story of success as multifamily sales agent. Dan’s kicked off his career by listing and selling 14 units in East Cleveland 15 years ago. Today he’s closing $58 Million dollar deals. Everyone starts small and grows bigger by working hard over time.

Dan has worked with clients who started with one small deal, quit their day jobs and scaled to 10,000 doors. He believes that having sold management in place is a critical component of success. Pairing a profitable operating and management system with private equity is required to successfully scale.

Something will always go wrong closing a commercial deal. Find out who is creating the roadblock and what their motivation is. You will overcome the obstacle by drilling down into the problem, identifying the root person raising the objection and getting to the decision maker to find a way to solve the issue.

Ice hockey taught Dan that hard work is fun if you like the people who you are doing it with. He attributes his success in business to working hard with people he enjoys working with.

5 Key Points:

  • Have a management plan first.
  • Bad management will sink a great deal.
  • When entering a new market you have to find the right multifamily agent who is active in the product type you want to purchase.
  • You want a local real estate attorney on your team who’s an expert in your niche in the market.
  • Hard work is fun when you like the people on your team.

Favorite athlete: Matthew Dellavedova – Australian born NBA player

Favorite book: How Wall Street Created a Nation: J.P. Morgan, Teddy Roosevelt, and the Panama Canal by Ovidio Diaz Espino

Favorite quote: “If it were easy, everyone would do it”

Thank you Dan for taking time out of your busy day to share your story with us.

Dan’s office phone is 216 264 2018 or email – Daniel.Burkons@marcusmillichap.com

Website – http://www.marcusmillichap.com 

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

POST GAME REPORT: Episode Transcript

JC 016: Lessons from selling 42,000 units with Daniel Burkons

Multifamily success begins with a strong team 

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 Cleveland Ohio. I’m here on the sunny west side and joining me today is mister Dan Burkons, and he is on the south side, correct?

 

Dan Burkons: I am, Independence.

 

John Carney: Alright, perfect. This is going to be a great episode today. We are talking to one of the regions’ premiere experts on multi-family investing. Dan is a broker and he is a senior director of Institutional Property Advisors, or IPA, which is a division of Marcus and Millichap. And he’s one of the three original founders of the Marcus and Millichap Cleveland Office.

His leadership and specialization within the Midwest department market enables him to create substantial value for major private and institutional investors. Dan joined the firm in 2003 and he and his team are approaching 42,000 units sold across 14 states, totaling over 1.8 billion. Impressive stats there. Dan’s expertise is in assessing value and leading national marketing campaigns, selling apartment portfolios ranging from to as many as 25 properties in multiple states, owned by multiple partnerships.

In 2013 Dan received Crane’s Cleveland Business Forty under Forty award and in 2012 he was induced into the Midwest Commercial Real Estate Hall of Fame. No stranger to the media, he’s regularly featured in publications such as: Apartment Finance today; Globe Street; Heartland Real Estate Business; Midwest Real Estate News; Multi Family Executive; Multi Housing News; The Cleveland Plain Dealer; and of course, Crane’s Cleveland calls him for any information they need from an expert regarding the multi family. Alright Dan, welcome to the show. Thank you for taking the time to share your expertise with the audience.

 

Dan Burkons: Well thanks John, thank you for that nice introduction. It’s all flattering but I still think of myself as doing the same thing I’ve been doing for 15 years of selling apartment buildings.

 

John Carney: Right, and you’re good at it. So that’s okay to be good at stuff. 42,000 units sold, everyone starts with one. We’ll get to that in a minute. So, I like to kick off this show with a little bit of a stretching question to get everyone warmed up here, and I generally ask our guests: what sports did you play growing up and who was your favorite athlete?

 

Dan Burkons: Well I would say — so hockey is the sport that I played the most growing up, and I still play. In fact, I skated last night, had some beers and that’s actually — to me, I’m not the world’s greatest hockey player but I like it and got great friends through it, and that’s what I do for exercise more fun than the treadmill.

If you asked my favorite athlete, I actually was just thinking about that as you said — I know you have a lot of Australians followers and I tell you one of my favorite athletes, nothing to do with hockey, is Matthew Dellavedova, Australian guy that came to the Cavs and was a real part of a couple of those runs to the finals. And he’s my favorite athlete because, like me, he doesn’t have the greatest natural talent but I envy his work ethic. The guy shut down Steph Curry, weekend VP in a couple games 2015 and went straight from the basketball court at Quicken Loans arena to Cleveland Clinic because he was almost dead of exhaustion, to get IV fluids to come back the next day. That’s a guy I admire.

 

John Carney: Yea, maybe we should have kept him around to shut them down again this year.

 

Dan Burkons: Right.

 

John Carney: So, I believe that for those of us that like the competitive nature of sports, whether it’s a team sport like ice hockey or an individual sport like golf with your buddies, that business has the same type of competitive nature to it. And so, we draw the comparison between business and sports on this show.

But look, I’ve had clients in the past come to me who want to — when I was living in Australia and working with America Property Source — clients who wanted to get into US multi-family investing. And just like anything, I believe you need to start small and you have to find an expert for your team before you even start small; before you get started you have got to recruit your team. And so finding the right agent with the right experience in the market is critical. Tell us a little bit about your experience over the years, from kind of when you got started to where you are now. You’ve probably seen it all and — share some insight on how do you get started in the multi-family game if you don’t own any apartment buildings or duplexes yet.

 

Dan Burkons: Sure, I’d be happy to, and for myself getting started as a broker it was the same thing; starting really small. My first listing was 14 units in East Cleveland, which for those of you who aren’t familiar with the area is a war zone, it’s the worst of the worst of the worst. That was a $230,000 transaction barely qualifying as commercial real estate. Went from there to — we closed a 58 million dollar deal a couple of weeks ago. So everybody, whether it’s as an owner of a brokerage, starting small — no one is just going to plug you in and you’re not going to be doing 58 million dollar deals. You’ve got to start somewhere, you’ve got to build, you’ve got to build off success.

One of the most rewarding things, and really just the coolest things in my career as a broker is, as I’ve grown from a young adult to — I don’t know what I am now at age 37 — as I’ve grown as a person and I’ve grown in business, I’ve had a sort of symbiotic relationship with several key clients where we’ve grown together. One of them — in fact I mentioned the 58 million dollar deal we just closed — one of them, my second listing at east Cleveland, one was 13 units in another, not much better suburb. And I sold it to this group that was four young guys with full time jobs, and they’ve bought 10 or 20 units. They wanted to buy this thing and they actually ended up — we ended up arranging it with seller financing and I learned a couple of tricks because I didn’t understand what it was at the time. They actually got in with cashback at closing, which isn’t always the best thing but worked for them. And the bank thought they were growing too fast so one of their parents had to cosign for them.

They ended up making a ton of money off that deal, buying another one, buying another one, buying another one, I sold them a lot of it. Then four of the guys that bought that $300,000, no money down transaction in 2013, I’ve actually sold them a 53 million dollar and just recently 58-million-dollar deal. As they grew organically, left their jobs, went into real estate full time, then they hooked up with a private equity shop who gave them the capacity to take down really big deals and portfolios. So it’s an example of somebody who started in commercial real estate part time, built up their management expertise, learnt from some mistakes, took in a little money from local investors and once they’d perfected their craft a little bit, took on little bigger time money and was able to really get into the big deals.

 

John Carney: So when I look at real estate, and you can just pick the asset type, or the class, I mean it really does always boil down to good management: what I believe is the success multiplier. So, could you elaborate on that component, about how these guys were able to grow about over 10 to 15 years, right? They were an overnight success in 15 years, right?

 

Dan Burkons: Right, from zero to ten thousand units. Yea, whether it’s them or anyone else, management really is the key. And I know you have a lot of listeners on here who are earlier on, or some who are just looking to start, or some at obviously more advanced levels, but as far as building that portfolio, management is key. The place where I’ve seen, particularly international or out of state investors come to our markets, and where I’ve seen some fail over the years is not having thought out about a management plan, just looking at the numbers on paper and saying, “Yea, this is a good cap rate, this will work, this meets what I’m looking for.” And a day before closing saying, “Oh, can you recommend a good management company for me?” It sort of should be in the reverse.

You should be — if you’re looking in an area, you should be trying to get comfortable with a management company first, before you really make any serious offers and about to invest your hard-earned money into deals. Because the best deal in the world can get screwed up very, very fast by somebody — whether it’s a dishonest manager or somebody who just doesn’t have the expertise. That is crucial; very small differences in occupancy and rents and expense management can have huge impacts on operating incomes and failures.

 

John Carney: Yea, across the board I suppose, because some management companies make it easy on themselves by keeping the rents low, but there’s all this money being left on the table, right? I’m sure you’ve come across that. That also leaves a big chunk of value for an incoming buyer I suppose.

But, so if you’re coming in from an out of town market — I’m contacted by people often that want to pick my brain about the Cleveland market. The first thing I tell them is that it’s competitive like any market. Can you give us a little bit of the 2017 overview of what Northeast Ohio looks like in multi-family?

 

Dan Burkons: Sure, like any sort of market there’s stratification based on asset class and asset size. And on the larger assets; on the, call it ten million and up, a lot of competition is experienced, national syndication groups. Not so much in northeast Ohio, recent and public companies — it’s for various — are less desired market for that, which actually makes it more profitable for others because those types of public entities often compress cap rates and starve the yield.

So actually it’s more of an opportunistic market, in all sizes from small to big. And in the 500,000 to 5 million range, where we do a lot of business as well, there’s just a mix of local and out of town guys who are coming here — if they’re local, they’re here because they’re already here and they’re looking for the next deal that’s good for them to add to their portfolio. If its someone out of town, they’re usually finding their way to north east Ohio because the cap rates have compressed so much in other parts of the country. Even other parts of the Midwest make Cleveland look like a relative bargain, just because there is — historically there has been a little bit less interest, and quite frankly with the development of Cleveland there should be more, but not everyone has Cleveland on their map, which is good because it leaves the yields a little bit better. You usually get people who are not from the area saying, “Hey, I’m coming to look at properties in Cleveland, Columbus, Cincinnati, Pittsburgh, Indianapolis.” They’re not in love with any one market, they like the idea of getting into the Midwest. A lot of times they’ll come back and say, “Wow, Cleveland, there’s really nice areas and you can buy really stable product, not susceptible to these big swings of up and downs, and look, that’s what I’m coming here for. That’s why I’m not buying in California, I’m buying in the Midwest go get something really stable and those opportunities are here.

 

John Carney: It’s an interesting market. Cleveland has everything that any major city I’ve ever been to globally has, right? We’ve got three brand name sports teams, two stadiums right downtown, you can walk from one to the other and then you’re walking through multiple neighborhoods that have all the foodie and nightlife culture you’d want. Big banks and it’s a pretty homely town.

 

Dan Burkons: And to be honest, I think especially as Cleveland’s downtown has developed — like you and your partners have been an instrumental part of developing Cleveland’s downtown as more of a 24-hour center. as that’s happened more and more young people are saying wow I can really do all the fun 25-year-old stuff in Cleveland that I can do in Chicago or somewhere else and literally pay a third as much and live in a much better place. And as you get older with a family, a lot of my friends have been moving back because jeez I’ve tried to make it in San Francisco and we’re both working and I’ve got no money to pay daycare and this and that. And I go to the pool and there’s 10 billion people. In Cleveland I go anywhere I want, there’s no lines and they have everything. So the quality of life is really good and that’s actually been attracting more and more companies to come back here.

 

John Carney: Yea right so I was gone — I’ve just been back in town for my first year, completed my first year back living on the west side of Cleveland after being away for 19 and last night we took a drive with the kids downtown just for something to do and they had a free concert at Edgewater Park. And traffic on the shore way, which they have converted now into a boulevard and they’ve really spruced up the area and the Metroparks are running the lakefront beach. You know, it was wedged. It was a line of traffic from 25th street to the new Edgewater entrance and then from Lake road and Clifton to the west all the way down. And it was packed. It didn’t look like there was a place to park a car on that whole piece of property. And that’s now kicking off summer with concerts and the beach seems to always be full when I drive by. So they’re really doing a good job there in that Gordon Square and West 25th street neighborhood of utilizing the lake front.

 

Dan Burkons: It’s interesting that some of your audience — I’ll tell you what, we’ve had — that Westside area and Edgewater park west, the higher city area — there are places that even 5 years ago I would have thought of as man that’s kind of rough, sort of being a rundown part of the city. That area on the Westside is just — we’ve had a lot of out of town investors actually buying 10 unit 20 unit, 30 unit type deals there and seeing it as a big opportunity. And because those are some areas that were historically not nice in Cleveland, a lot of local people overlook them and the amount of millennials and highly educated young folks who want to live in those — it’s a little bit more like living in a neighborhood of Chicago or something, a little more edgy area. A lot of the out of towners are getting that faster than the local folks, and buying up stuff that ten years ago would have been worth $15,000 a unit, and they’re buying it for $20,000 a unit, putting $5000 into it and making it worth $40,000 a unit. And there’s opportunities there, and seeing the opportunity and the growth pattern in some of those Westside neighborhoods.

 

John Carney: Yea, I mean it’s fascinating to watch. They grow and continue to flourish. So if you’re coming to Cleveland and you’re looking in multi family, or any market really, obviously the role that you play as a broker agent — talk a little bit about how you work on the buyer’s side for people, and what level of expertise having the right person — there might be someone listening that wants to go to Florida and they don’t know anyone in that market, or they want to go to Texas. What questions should they be asking a guy like you to make sure that they get the right person helping them out?

 

Dan Burkons: I think it’s important that you find somebody who really is active in that specific product type in that area. So there’s a bunch of guys, for instance in Cleveland, who run around saying, “Yea, hey, you want to buy apartment buildings?” They’ve never really done an apartment building, they’ve done one. Our team have sold several hundred in Cleveland. It doesn’t have to be that, but wherever you’re going, Texas, figure out and find out and maybe call around, find out who are the guys who are actually active. If you’re trying to buy 10-30 in a deals in say, San Antonio, before you just grab on to the first guy and spend two years being dragged around by somebody, spend an extra couple of weeks figuring out and maybe interviewing or meeting a couple of people. Say, “I want to see your track record. Not the market, I want you to show me how many deals you’ve done.” It doesn’t have to be a guy who’s sold 400 deals, but a guy who, “Hey look, I’ve closed three deals, I have three on the market, here’s what I know about — I can tell you about.” Somebody who is actually active in that.

Don’t hook up with a guy who sells houses who’s trying to get in — make you his first client to do an apartment deal or a shopping center deal with or whatever it is. You don’t need to be the guinea pig. It’s okay to be with a younger guy, as long as the guy’s focus is actually to be doing some transactions in that niche. Because they’ll understand really quickly the fit. they’ll say, “Hey, you don’t want to waste your time with that deal, the expenses are not underwritten well.” Or “Hey, that’s a really poor rental market you’re not going to get upside.” Somebody who can make a very quick judgement on something.

Look, there’s so much information out there, all of us have limited amount of time to rule out the stuff — there’s a lot of stuff people throw on the market that doesn’t make sense. To someone who can very quickly cut through 50% of them and say, “Throw that in the garbage pile, let’s focus on looking through these other 50% of deals.” You’ll go a long way by hooking up with somebody who is actually plugged into that product type.

 

John Carney: Sound advice. And then, if you’re coming into a new market or just getting started, from your experience –management — let’s circle back to management, how would you go about finding the right group to manage and what advice would you have on how to source someone like that?

 

Dan Burkons: You know, I think if you find that right agent to work with that’s a good place to start. So if someone’s actually doing a lot of transactions in that specific niche, you can ask them, “Hey look, can you recommend three good management companies? What do you think their strengths and weaknesses are? Who might be good for me?” And they may say, “You know what, there’s really only one that’s good for what you’re trying to do.” Or they may say, “Well there’s a few.” That’s a good place to start is to hear from the agent.

You can also — another good thing would be to hook up with a local real estate attorney who is local to that market. Because we have a lot of folks who are from out of state, they are using their out of state attorneys. Every market has its niches and loopholes and laws and the way to do things. You want to find someone who’s experienced, who’s a local real estate attorney to that market, and that guy can, one: help you navigate the intricacies of the purchase agreement and so forth, but also that guy’s also great for a referral service. Both attorneys and brokers are constantly dealing with people who touch every other part of the real estate spectrum, and they say, “Oh no, you know what, I’ve got a few clients that use this guy. He’s a really good manager, he’s local he’s this that. Or stay away from this guy he’s got a great sales pitch on the internet but he actually has no substance.”

 

John Carney: I like what you just said there, because when you look at attorneys, attorneys who fill that niche and are laser focused and have the track record are good people to have on your team. I add an extra layer that you should gel and trust your attorneys on your team, and that’s just a matter of meeting a couple of people. But you know, they have so much insight behind the scenes and they really do connect the dots, don’t they?

 

Dan Burkons: Yea and so again just with like the — it’s important, don’t just find the first guy you find with a picture on a billboard. Try and find out who actually is representing clients, doing real estate deals like yours in that market. Not the guy who is doing $500 divorces and, “No, yea, I do apartments and real estate stuff too.”

 

John Carney: Right, family law and commercial real estate, two things that probably one person can’t do well.

 

Dan Burkons: Right.

 

John Carney: But, I mean, again, when you make a transition, when you’re doing single family homes, you don’t really need a lawyer that much, unless he’s finding you deals through probate or other forms. But so you get this mentality that you don’t want to pay the fees. Absolutely, 100% critical to pay those fees as part of your costs of doing business when you’re on the commercial level, especially in higher dollar value transactions for sure.

Well cool. We’re kind of going to wind down into our two-minute drill here Dan, and so you’re talking about ice hockey, and you grew up playing ice hockey I imagine. What kind of lessons did you learn playing team sports that you bring to the table running your team at your business to help your clients succeed?

 

Dan Burkons: Well, hockey really taught me that hard work can be really fun and can be really motivating if you love the people that you’re with and if you love what you’re doing. So I love to play hockey, even more I love the guys that I met through hockey, lifelong friends at all these different junctures. So hitting the gym or skating or practice or whatever it was, never seemed like work when I was with people I wanted to be with, that I was doing something that I thought was fun. If I wasn’t with people that I wanted to be with, I don’t think I could have ever worked there.

Now the truth is, I’m not the best or have the most god given talent for hockey, probably at the other end of the spectrum. In real estate, it turned out that I do have some of those gifts to build and sell and understand and think quick on the feet and size up buildings. So it turned out I learned from hockey what it’s like to work hard at something you love, and then I found something else that I loved and I actually was good at it too. So that ended up being a good fit for me. And I just learned: hey, hard work is fun if you like who you’re doing it with.

 

John Carney: That’s a good story, thanks for sharing that. And look, do you read? Do you have a favorite book that you keep handy either at your desk or at home? I’m just curious, because we get a lot of — I’m compiling an awesome book list through this show and everyone’s got a different favorite so far.

 

Dan Burkons: I’ll tell you what, I’d love to see the book list when you compile it. Because to be quite honest, it’s been a while since I’ve read a lot of motivating business stuff. I tend to see reading as my escape from business, family, and chill my mind out. And by the way, I don’t read fun stuff like mysteries, I usually read history stuff. So that just takes me to totally different places and I like to decompress, not to think about business. However, I’d like to see some of those business books, because there’s always something new to learn.

 

John Carney: Well look, a lot to learn through history, what’s one of your recent favorites? I’m not going to let you off the hook.

 

Dan Burkons: That’s ok. You know what, I’m almost finished with this book that I found in my father-in-law’s bookshelf the other day. I’ll think of the name in a second. It’s called “How Wall street Created a Nation.” It’s about — it’s kind of a cross of history and business, and it’s about the Panama Canal and Jackie Morgan and a bunch of Wall Street people bought up big shares of the failed Panama Canal. This company from France, and then pushed the US government to more or less instigate a revolution of Panama. And then they got these great concessions from in the Panama Canal, and then all of a sudden, their shares that they bought for like two cents in the dollar were worth $2 a share. And it’s actually a great cross between history and business, and how there are certain actors and players in there who straddled both lines, who had the business connections and then went to meet with Theodore Roosevelt to push things into action to help them in their business.

 

John Carney: That’s very cool. I’m going to look that up. That’ll be online in the show notes. Well, along with books — look, I always have my favorite sport quotes and business quotes. Is there any quote out there that you think is that one motivator? You’re having a bad day, a deal is about to fall apart, you’ve got to figure out how to save it for your client, save it for all your hard work and effort.

 

Dan Burkons: Yea there is. It’s from my Dad who is a source of tremendous quotes, I always go back to what he told me when I started out which is: if it were easy, everyone would do it.

 

John Carney: There you go. That holds true for sure. Cool. What about any recent or, over the course of your career — where you and a client have found the perfect deal but you’ve got some obstacle, and you had a come from behind victory that you’d like to share?

 

Dan Burkons: Man, there’s been a lot, because I feel a lot more often than not, getting a complicated commercial deal, whether it’s apartments or shopping centers or whatever, to the finish line, there’s almost — there’s very few deals that are without major road bumps, bumps in the road or obstacles. I’d think if one comes to mind, but it might not do that on the spot here. But there’s always something — there’s always something wrong, and there’s always some player in the continuum who has a different motivation than you that is getting in your way. And I think the talent of somebody who can put deals together and get them closed is — you see those obstacles, whether it’s, hey the lender backed out, or this issue came up with inspections, or the seller changed his mind, it’s really finding out — it’s getting behind the people — oh well P&C bank is now saying this. Okay, who is the decision maker? Get to the decision maker, whether it’s a buyer, seller, lender, appraiser, an inspector, don’t just let it happen to you. Find out who is the one creating this roadblock, what is their motivation, how can you help them change their mind. whether it has to do with: give me the money or money off the price, or if it’s an inspection issue that came up say, “Alright, I want to meet with you Mr. Engineer, I want you to show me exactly what the problem is and then let’s figure out what the solution is. And by the way, don’t you think there’s a less costly solution to this?” And those sorts of things that’s really drilling down into any problem to get to the root, deal with the root person raising the objection and then finding a way to overcome it.

 

John Carney: That’s fantastic. I’m glad that you shared that because — would you believe that every problem has a solution if you’re willing to work hard enough?

 

Dan Burkons: I believe that — look, there’s a few that are real tough, like Israelis and Palestinians and stuff like that. For the most part, yea. I do believe that every problem has a solution.

 

John Carney: Right. We’ll add a caveat. Asterisk real estate problem. Okay, well great. I think that just carrying on what Dan just said, you know, I learned this one day, and I think I might have heard it on a podcast or read it in a book: if you just wake up and expect when you go to work that you’re going to be putting out problems, and you’re going to do it with a smile on your face, eventually you’re going to have an expectation, and you’ll kind of build up that problem-solving muscle. And you won’t’ be as phased as much; you’ll become a cool operator, people will want to do business with you. Perfect.

Well that’s kind of wrapping up. We’re right on the thirty-minute mark, Dan. So I’d like to thank you for joining me in the locker room today. Where can the audience find you to carry on the conversation? Or if we have any out of state investors or local investors that want to get a hold of you to learn more about the Cleveland apartment market?

 

Dan Burkons: Yea, first of all John, thanks so much for having me, this was great, I love your show. I’m honored to be a part of it. And as far as investors who want to come talk more about Midwest apartments or anything of that nature, getting into deals and so forth. You can reach me at my office is: 216 2642018. Or if you look me up on the web its danburkons@marcusandmillichat. You’ll find my website, you’ll find my link my email address etcetera.

 

John Carney: Perfect. Well we’ll post that on the show notes it will be on my website. So there you have it folks. I truly hope that you picked up some actionable advice today from Mr. Daniel Burkons. Make sure to check out the Real Estate Locker Room Show on iTunes, Stitcher, 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 this show is all about I’d be really grateful if you would leave us a nice five-star review that other investors like yourself can find this show and join the conversation. The post-game report show notes, links and additional content related to today’s show will be available on my website: johncarneyonline.com/podcast and while you’re there feel free to drop your email address into the opt-in and we can keep in touch through the monthly newsletter where we offer other investing insights, tips, tricks, hacks and other good stuff. 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.

One more time, thank you very much for taking the time to share your story with us Dan.

(Music Out)

End Audio

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JC 010: How to Identify the Perfect Insurance Agent with John Mark Tichar

May 10th, 2017 | no comments

You want an insurance agent with real estate investing experience

Insurance is a business expense but not all agents are created equal. Learn what skills and experience you want your real estate insurance agent to contribute to your team and portfolio.

John Mark Tichar joins us in the locker room this week to share his real estate story and pro tips for success in the competitive business of real estate and insurance.

When you shop for insurance are you seeking an agent who has the relevant expertise and knowledge of what it’s like to have skin in the game? Before settling into his roll with the Oswald Companies as a full time commercial real estate insurance agent John Mark worked for a real estate developer, multifamily property manager, single family home fix n flip investor and financial services provider.

“There is no silver bullet for success” John Mark attributes his success to showing up every day and working hard. He distinguishes himself from other insurance agents with his history as a real estate investor, property manager and project manager. John Mark’s experience of getting his “hands dirty” allows him to identify with the emotions and risk of his clients.

John Mark earned the real estate game by being proactive and doing the hard work. Find a mentor, get hand on experience and create your own opportunity.

Real Estate is a Team Sport

The fundamentals of investing are the same at all levels of real estate. The team is the same for 20 properties or 200 properties. The quality of the investment, your team and the experiences is what matters. The volume of property you own is second compared to quality of the investment.

Insurance

You don’t want a generalist insurance agent. You want to have an insurance agent who has invested in real estate at some point in time. Insurance is a line item in your operating budget. However, as an owner you must have a serious approach to mitigating risk.

Favorite athlete – Mike Piazz

Recommended reading –

  • The Millionaire Next Door by Thomas Stanley & Willima Danko
  • Talent is Overrated by Geoff Colvin

5 Key Points:

  1. Be consistent day in and day out
  2. Get up, go to work and learn on the fly
  3. To be successful you have to focus on a niche
  4. It takes time and persistence to be successful
  5. Understand the costs & risks up front

Success tip – “Duplicate your success and learn from your failures “

Thank you for taking the time to sharing your story with us today John Mark.

John Mark works at Oswald Companies in Cleveland, Ohio http://www.oswaldcompanies.com

You can connect with John Mark on LinkedIn or email him direct at john.mark.tichar@gmail.com

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

POST GAME REPORT: Episode Transcript

The Real Estate Locker Room Show with John Carney

JC 010: How to Identify the Perfect Insurance Agent with John Mark Tichar

[00:00]

(Music Intro)

Announcer: Welcome to the real estate locker room show with John Carney. Did you know that investing in real estate is a team sport? Join John and his guests as they explore the intersection of 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 today from Cleveland, Ohio. Today on the line, we’ve got a great guest, John Mark Tichar. He is the Vice President, Real Estate Sales Leader and shareholder at the Oswald Company’s headquarters in downtown Cleveland, Ohio. So, this is a valuable team member we’re going to be talking to. We’re going to be talking about insurance: John Mark works on the high commercial end, multi-family and commercial projects.

John Mark graduated from John Carrol University in 2005 and began his working career for a real estate developer and contractor called Woodfield Homes, West of Chicago, in a town called Rockford, Illinois. There he managed a construction schedule and subcontractors of five to ten projects every six months, valued between three and five million.

John Mark also provided property management and asset management services to investment property. During his time with Woodfield Homes, John Mark spent his off time looking for his own investment properties and focused on distressed and foreclosed single-family homes in the Rockford area. His first two deals yielded 25K and 20K in equity respectively, while providing cash flow: positive cash flow. It was during his time on construction projects, managing investment property and eventually owning investment property, where John Mark found his passion and true calling for real estate development and real estate investing.

Prior to joining Oswald Companies, John Mark worked in financial services, both in insurance and wealth management, so he has a lot of experience there. And over the last seven years at the Oswald Companies, he’s had the opportunity to apply his real estate background skills to service the unique risk management and insurance needs of his clients, established real estate developers and investors.

Welcome to the show John Mark, and thank you for taking the time out of your day to share your story with our audience and join me. How are you doing today?

John Mark.: I’m doing great John, thanks for your time and thanks for the invitation to be on your show. I’m looking forward to it.

 

John Carney.: Perfect. Well let’s kick this off. I like to ask our guests a question to kind of get the conversation going. This is the Real Estate Locker Room Show, so we’re going to ask you a sports related question and tie that into the business of real estate. Growing up, was there one particular athlete that you admired? A professional athlete or an amateur athlete that you looked up to?

 

John Mark: There was. My first love in sports is baseball. I’ve played basketball and football as well, but baseball my first true love from a sports perspective. And I was a catcher basically my whole entire young career as a baseball player. Mike Piazza from the Los Angeles Badgers was my favorite player. A little-known fact about Mike Piazza is that he wasn’t even drafted into major-league baseball. He was identified outside of the draft by a scout and was invited to try out for a team. So he basically came up through the ranks of baseball to become one of the baseball greats. It’s just a great story of persistence and never giving up on your dreams. Those are some of the characteristics that I liked about Mike Piazza.

 

John Carney.: Looking back at that particular athlete, I remember Mike Piazza’s playing days. He really put catchers on the map, so to speak, especially in the national league. Was that story inspiring to you as a young athlete, looking up to Mike?

 

John Mark.: It was inspiring. He’s a guy that just did a great job. His job day-in and day-out was very consistent, and as I was growing up he was the catcher to emulate. He was just a great role model that I thought would be good for me to portray myself against and emulate to the best of my abilities.

 

John Carney.: We’re going to now jump over to the nuts and bolts in the real estate side. But I like to draw the comparison between the business of real estate and the business of the team aspect, and just go back to what we learned in our younger years competing on teams. Because it’s very much a team-driven industry, and you have insight into how commercial developers and property owners and operators work at a very high level, and you’re a valuable player on their team by offering the insurance solution, would you give us a little bit of the background on how you settled into that niche in the real estate game?

 

John Mark.: Yea, part of the bio that you read discusses my, or shows my early involvement right after college. As a college graduate, I didn’t really know what I wanted to do exactly after college, and I had started to read books in my spare time about business. One of the themes that kept on hitting me, just kind of in my gut, and just a thought that I could never shake, was real estate. At that time, I didn’t know what that meant or what that looked like, but it was just a concept that I thought really resonated with me.

And so, during my years working at Woodfield Homes, I learned a lot on the fly, through just consistent application: getting up out of bed and going to your job, and doing to the best of your abilities, and learning on the fly, and just through that time I really came to enjoy and loved the game of real estate. And after that, when I came to Oswald, in the insurance base, it’s just such a niche driven industry.

 

If you want to be very successful you’ve got to focus in on a niche. Or firm is the fiftieth largest insurance broker in the country, so we have a lot of niches in private equity, construction, manufacturing and whatnot. We didn’t have a big presence in real estate, so I just decided to put to use my experience, both with the job at Woodfield, managing investment property and then eventually owning my own investment property. The foundation I think of any real estate operation in the country really, is what I experienced, and understanding the fundamentals and the foundation of what those operations look like. I feel this has really set me apart against my peers. And basically, I would contribute my success to just getting out of bed every day and hustling for business. There’s no silver lining or silver bullet that I think puts people on the map right away. It takes time and consistent persistence. So it’s just the daily application of using the work ethic that I’ve been blessed with, and going out and developing relationships and being a trusted advisor, and just over time being able to win over clients based upon my attitude and the extra things that I bring to the table that’s different than my competitors.

 

John Carney.: So, showing up and consistency is what is driving your success at the moment. Do you look back at when you made a change? In your down time when you were working in your first job for the construction company, you could have sat around on the weekends and gone to baseball games and hung out with your friends, but you chose to go out and dig up properties, and then put in the time and energy and money, your own time energy and money, those three precious resources, into fixing up these homes and running them as a business. So, do you believe that that experience just helps you identify with your clients better, especially on the insurance side?

 

John Mark.: Absolutely. I think one is: I get respect from my clients, having known my background and the fact that I got my hands dirty and have actually gone through the act of real estate investing versus standing on the sidelines like maybe other advisors and talking about the philosophy of real estate and of investing and how it should look which is a lot different than getting your hands dirty and having done it.

Understanding the ups and downs of real estate investing and the cycles and the challenges that everybody faces on a daily basis is what really sets me apart.

It was really when I started managing my boss’s investment properties. It was a small company, Woodfield Homes, and I worked with the owner on a daily basis. I got the manager’s investment property, and I applied the financials to an Excel spreadsheet and just looked at projected expenses. I applied projected appreciation over a period of time, and the math was just a compounding effect and was just a powerful calculation for me. And it just really gave me a very deep impression, a very good impression of real estate. I think that was the visual that I needed to really have the lightbulb go off and say “I know I like this business, but now I get to see the power of real estate financially and what it can mean from a lifestyle perspective.” That really made me come to just really love the business.

 

John Carney: So, that’s a great experience early on, and it sounds like the principle of Woodfield Homes was there as a sounding board and a mentor, if I’m reading between the lines, is that correct?

 

John Mark.: Correct, yes. I mean, he basically had this investment property and I went out and it was sitting vacant, just because it wasn’t part of his core business. I saw an opportunity to collect an additional six or seven thousand bucks a month in rental income. It was a multi-family property. So in my hours working for him, I would hire his subcontractors, and we would go fix up this property and get it rented and then I would sign leases with the tenants; I would manage the cash flow and the expenses; I would handle tenant issues; any move outs I would get them re-leased, so it was just a very hands-on experience for me. I didn’t read a book about it, I didn’t go to class for it, but it was just an example, or an experience that was the best way for me to learn. That’s the best way for me to learn, is just by doing it on a daily basis. And every day you learn something new and you apply little nuggets of learning experiences, and you apply those going forward and slowly things continue to get better and better, and you get better at your job.

 

Your right, that was spot on. He was a great mentor, it was a great opportunity for me to even get into that, have that experience. So for that I’m grateful for his willingness to let me run with those projects.

 

John Carney: Yes, that’s a unique opportunity that, now that we’ve dug into it a little bit more, sounds like you created your own opportunity: you created the opportunity and ran with it. It wasn’t given, it was created. I love stories like that, it’s very entrepreneurial. What I’m interested in sharing with our listeners right now is that you have that story, and you mentioned it’s kind of a smaller scale investment property. You have the opportunity every week to meet with your clients who own much larger operations on the commercial side. Can you talk a little bit about the parallels you see between an investor starting out with a few small, single family homes or a multi-family, and scaling that into something large? And do you see the team players that the larger operators have as identical, similar, different? Could you give us a little bit of insight into what you’ve learned just by playing at such a high level?

 

John Mark.: Yes, I think you kind of hit it on the head there: the team is the same. The actions are the same and the only difference is the number of zeros after the comma. If it’s six zeros, or nine zeros, or twelve zeros or what have you, that’s the only difference. But the fundamentals of property management: tending to tenant needs; having an attorney draft up a solid lease agreement that promotes tenant flexibility throughout a term of the lease; working with a local banker, or if you’re a more sophisticated operator, working with friends and family and or other sources of equity and debt to achieve the financial results.

 

Having a good team around you: a property management team and contractors that you trust, that you know do quality work, that don’t cut corners and that you understand the costs up front, so that way you’re not looking at a job after the fact and racked up an extra ten thousand dollars in costs or what have you.

 

Working with an insurance advisor to help you understand the multitude of risks that you face on a daily basis. Some of which can be mitigated through daily best practices in your operations. Others tend to be much larger that you want to have financed by an insurance company.

 

And so, whether you’re starting on two properties or two hundred properties, you hear a lot of stories about people getting into it just all of a sudden acquiring 100 hundred over the course of a year, or stories like that, which I think is great. But the number doesn’t really matter, it’s the quality of the investment that matters, and it’s the quality of the team that you have around you. It’s the quality of your experiences that if you have those, that allows you to scale quicker and better. And you get through that learning curve quicker with a better team.

 

If you don’t have a good team around you, you’re going to be struggling with your experiences, wondering why you’re experiencing what you’re experiencing, without a good team.

 

And so, to your point: it’s a team sport, whether you’re just starting out with a trusted banker, like I said before, or trusted attorneys and contractors, or taking those resources and creating an in-house department encompassing all those various needs as a real estate investor. So, in my opinion, the difference is, as I’ve said it in the beginning, the number of zeros.

 

John Carney: And to get to the larger number of zeros, everyone starts somewhere. And the nice thing about this industry that I like, or the business of investing, is that it’s unlimited based on everybody’s personal motivation. Give us a brief summary of the importance of understanding your own risk profile, and then why having the right insurance agent who understands that risk profile is critical. I’ve had experiences where, early on in my investing career, insurance was a business expense, but it’s one that you always look to minimize, right. It’s very important but people always try to minimize that because it’s a business expense, it affects the bottom line. So, give us a little bit of professional advice on the best approach to insuring your real estate portfolio.

 

John Mark.: Yes, I’m certainly happy to do that. Let’s just be honest, insurance is not the most exciting topic to talk about, right? You don’t sit around the cocktail parties talking about your insurance agent or insurance policy. I totally understand that. But you’ve hit it right on, insurance is a line item in your operating budget, right? Just like legal is, and just like your interest rates are on your loans. You can argue the same thing from a lender perspective or your accountant or your attorney. But from the insurance side of things, I think the number one thing for an owner to do is to take the topic seriously, first off, and then secondly, shortly after that, is to really take the time to stop for a moment and think that these risks out there, that they could happen to you.

A lot of people sit back and say, “that’s never going to happen to me, that won’t happen to me.” I think a really true statistical investor will actually take the time to help you understand how that might happen to him or her and what they could do to mitigate that from even happening in the beginning. So, I think the best way to do that is to team up with an advisor who knows real estate.

 

When I started looking at houses in Rockford, Illinois, the first thing I asked my mortgage broker, or banker, as well as real estate agent is, “Have you worked in real estate before?” And the only key members that I chose to work with in those areas are people that have invested in real estate before. Whether they owned real estate at the time was irrelevant, but the fact that they actually took the time and invested their time and their money into real estate told me that I’m dealing with somebody who absolutely understands each step of the process. And so that should be the same thing with your insurance advisor.

 

Whether your insurance advisor invests as a private or silent investor in deals, or has a small portfolio on their own, I think you need to take time to interview them and understand their experience in real estate, because you’ll come across a lot of insurance agents that are generalists. They’ll walk into a manufacturing company and act like they know manufacturing, and they’ll turn around and walk into a non-profit and act like they know the intricacies of a health and human services organization, and then private equity, and so on. You just want to make sure that, while it’s understandable to have a diverse book of business, you want to make sure you’re working with someone who has the majority of their book in real estate. That way they can bring to you the information that is meaningful for you, and making you aware of things that you may not even be thinking of in the first place. Because you don’t know, and that’s the job of advisors, to inform people of what they don’t know, to better educate them on how to manage those risks going forward.

 

So I think, as an investor, capital is very intensive, a capital-intensive business. You’re constantly leveraging your dollars, so the financial risks that you take, and risks that might come about with your lenders, investors, financial loss to the organization, then you have your physical loss from the properties, with acts of god that just – wind and fire and hail and so on.

 

And then you have the operations risk of property management and tenant risk and understanding how the tenants are taking care of the property. And that boils down to your lease that you have with the tenant and ensuring that they’re carrying their own insurance that will indemnify you and protect you based upon their negligence. So, there’s a number of risks that an owner has, and has to manage on a daily basis.

And the insurance advisor just becomes much more valuable than just a broker. Somebody who’s going out into the insurance marketplace. You know, you fill out an application, you get a bunch of quotes, that’s not statistics. That’s not complex. It doesn’t really show any expertise, it just shows that you can go through a process. But then turning that information into business conversation, specific to real estate investing – that’s the piece where I think there’s true value of an insurance advisor.

 

So I would just encourage all the owners out there to work with an insurance advisor that is in the real estate investment business, and take it as seriously as you would your accountant. Because the last thing that you want to happen is a 50, 75, 100 thousand, one million dollar claim situation that is totally unforeseen, that kind of hits you out of nowhere. And you go to your insurance agent, they haven’t talked to you in two years, and you say, “Hey I got a claim.” And they say, “Hey, it’s not covered.” Then you have a bigger problem than you would have originally. So, that’s just my perspective when it comes to insurance and it doesn’t have to be time consuming, you don’t have to spend hours and hours and hours on it. You have to find the right person who can understand and be that advisor.

 

John Carney: John Mark, that’s great. That’s a great summary of why investors need to put some time and effort into sourcing the right insurance provider and advisor for their team. Important stuff. Alright, before we wrap this up, I’ve got a couple more questions for you, we’re kind of getting down to our two-minute drill here at the end. You’re a motivated, hard-charging person, and you manage to get a lot done with the same 24 hours we all have. Are you a big reader? Are there any books on business, or books on sports that you’ve read that you’d refer people to?

 

John Mark.: Yes, I think a couple of books come to mind that I have read in the past. I mean, I think we all know the book ‘Rich Dad Poor Dad’ is a popular book that people mention. But there’s a couple other books.

 

‘The Millionaire Next Door’ is a great book, it just talks about daily application of financial discipline and the notion of cutting up your credit cards; that’s kind of an extreme example, but it’s applying due discipline to your financial situation and ‘The Millionaire Next Door’ is a great example of that.
Another great book that I really like, that really resonated with me (I kind of view myself as an underdog in a way) is a book called ‘Talent is Overrated’, I think Jeffrey Colban is the author. He mentions Tiger Woods in his book. About how, in order to be the best at your game, it takes time in that arena. So, in Tiger Woods’ situation, really quick, he racked up more hours by the time he was ten years old than most golfers racked up by the time they were 23 or 24. And that allowed him to be that much more dominant in the field, because at the age of ten or twelve, he was light years ahead of everybody else. In part because of his dad and then just his personal drive. So there’s a lot of ways to make up for talent and the book called ‘Talent is Overrated’ is I think just a great read.

 

John Carney: Thanks for sharing those, I haven’t read either one of those. I’m an avid reader, and I’m compiling a list, especially through talking to all the guests that I’m very fortunate to interview on this show. So, that will be included on the show notes of my website.

 

John Mark.: Nice.

 

John Carney: Is there anything that you do: a daily habit or a practice that allows you to train to be successful in your business and in your life, that you can share with our audience?

 

John Mark.: Yes, a couple of things. I have to be able to work out at some point during the week, or on a somewhat consistent basis. I think with the pressures of business, and the high-pressure sales environment that I work in, you want to have broad shoulders and you have big goals ahead of you that the company depends on you for. And so you’ve got to be able to de-stress, think through the day, process the day and just get it all out, so that way when you start the day the next morning, you’re kind of starting it somewhat from a fresh perspective.

 

And then I’m actually an introvert. So the way I recover and reenergize is by actually being by myself and just taking a few minutes to sit and process my day. I’m a scotch guy and a bourbon guy, so I’ll have a glass of that and maybe write in a journal of some kind and just reflect. The other tip is just to duplicate my successes, but more importantly, learn from my failures going forward.

 

John Carney: Thank you for sharing that. That’s good, sound advice for everybody who’s working on journaling, or a little bit of quiet time to meditate or reflect on the day. Well thank you for joining me in the Locker Room today John Mark. Where can the audience find you to carry on the conversation? Tell us a little bit of where you live online.

 

John Mark.: Actually I’m not a big Facebook person, although if you go on my profile there’s some pictures that I posted of me and my girlfriend recently. But I don’t spend time commenting on other people’s posts or looking at the feed there. I am active on LinkedIn and my full name is John Mark Tichar. So you can look me up on LinkedIn. You can also shoot me an email at john.mark.tichar@gmail.com. I would be happy to connect with folks and network if anybody is interested.

 

John Carney: Alright, there you have it folks. I truly hope that you picked up some actionable advice regarding insurance for real estate from John Mark Tichar. 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 all the pro-tips from our guests.

The mission here is to help you elevate your real estate game. And if you like what this show is all about, I’d be really grateful if you would leave us a five-star review on iTunes or your preferred podcast platform, wherever you get your podcast every week, so that other like-minded real estate investors just like yourself will be able to find us easily. The post-game report show-notes, links and additional content related to today’s episode will be available on my website: johncarneyonline.com/podcast, and while you’re there, feel free to drop your email into the newsletter signup form so that you can receive the monthly newsletter and other tips, tricks, hacks and good stuff related to the business of real estate. 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. Thanks again for joining us again John Mark.

 

John Mark.: John Carney it was a pleasure thanks for having me.

 

John Carney: Perfect take care, thank you.

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