April 16, 2024 • 44 mins
In this episode, Monick Halm shares her journey in real estate investing and outlines how she started with a single house hack and then transitioned and scaled in commercial real estate. Throughout the episode, Monick discusses her experience in different asset classes, including multifamily and industrial properties. She also provides insights into fundraising and the importance of understanding investors' needs. Monick highlights the value of providing a diversified investment portfolio and being open to different opportunities. By listening, you'll learn: • Why building relationships and partnering with others is crucial for success in commercial real estate investing. • Three qualities to look for in people when you're considering partnering with them. • How being open to different asset classes and opportunities can lead to diversification and increased returns. • A great way to frame your fundraising efforts so that it's less intimidating. • And much more! ------ Join our newsletter for more free resources: https://www.schoolofcrei.com/ Join the conversation: https://www.instagram.com/schoolofcrei -------- Connect with Monick: https://www.instagram.com/monickhalm/ https://www.linkedin.com/in/monickpaulhalm/ https://www.youtube.com/channel/UC_xuBDoWBe_j0-OtCaaJcnA https://www.realestateinvestorgoddesses.com/ ------ NOTE: All content is for educational, informational, and entertainment purposes only. Nothing we publish is financial advice, investment advice, or tax advice. This is not an offer to sell or a solicitation or an offer to buy securities. All investments carry inherent risk. You are solely responsible for all decisions you make. Always conduct your own due diligence and consult with licensed professionals. ---- #realestateinvesting #realestate #realestateinvestor #investor #investing #realestateinvestment #commercialrealestate #CRE #multifamily #GenerationalWealth
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Episode Transcript
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(00:22):
Hello and welcome to the Active Commercialreal Estate Investing Show brought to you
by the one and only school of commercialreal estate investing.
I'm Patrick.
And today we're joined with Monick Halm.
Monick is the founder of Real EstateInvestor Goddesses.
She is an educator and advocate for femalereal estate investors and has a mission to
(00:43):
help 1 million women achieve financialfreedom through real estate.
Monick is a real estate investor andsyndicator
and owns together with her investors over1,000 residential doors and industrial
assets across 15 states.
She's a graduate of McGill University andColumbia Law School.
She is the number one bestselling authorof the Real Estate Investor Goddess
Handbook and Invest Like a Goddess (01:04):
Advice from the Most Successful Women in Real
Estate.
Monick is also a TEDx speaker, podcasthost, real estate strategy mentor, yogi,
world traveler, recovered attorney,
wife, and mother of three amazing kids.
Monick, you seem to do it all.
We're excited to learn how you do it.
Welcome to the show.
(01:26):
Thank you.
It's great to be here.
As I was telling you before, we werelistening to a lot of podcasts that you
were interviewed on while we were drivingup to the mountains the other weekend.
So definitely fan girl moment for me.
Um, I'm super excited, especially beinganother woman that is getting into
commercial real estate.
It's really awesome to have the diversityin the space and coming from, um, I know
(01:47):
you had said in the previous podcast aswell, you kind of came from not really
knowing real estate, and I feel like somany people come from having a connection
prior or having someone who knows aboutit.
So excited to dive in.
Would love to hear from you about how yougot started in real estate and the why you
got started in commercial real estate.
(02:07):
Sure.
So I got started really by accident.
I live in Los Angeles, which is a superexpensive market.
And back in 2005, I was working as alawyer and I had always been taught, the
only thing I'd been taught about realestate is that at some point you should
(02:28):
buy a house to live in.
That was never something you invest in.
You just buy the house.
So I'd been working for a couple of years.
I was like, okay, I guess it's time to
buy that house, but LA is such anexpensive market.
Even back in 2005, a starter home wasupwards of $500 to $600 ,000.
(02:48):
And I couldn't afford that by myself.
So I ended up house hacking.
That's how you guys started.
But I got with a friend, we bought a multi-unit.
We each
took a room in a larger unit, we rentedout, there was an upstairs two bedroom
that we rented out and then there was alittle back house, the garage had been
(03:12):
converted, we rented that out too, rentedout our basement and then I was like a
landlord and these people were paying mymortgage, so it awesome.
That's how I got into the game.
Still didn't really think of it as a wayto leave my job, which I really, really
hated.
It was still just, oh, that's how Imanaged to buy that house I supposed to
(03:36):
buy .
But when I met my husband, he had aduplex.
And after the crash in 2008, we ended upselling one of the duplexes and we ended
up flipping.
So we started to flip, which was
the only thing I thought real estateinvesting was because that's what I'd seen
(03:57):
on TV.
It's like, oh, we've been investing realestate.
So we'll flip because like the shows!
We've done rehab in our house.
We can flip.
And it was a really good time to beflipping because you get houses were super
on sale.
You could buy a house and fix it.
And just you could make tons of mistakes,which, you know, hindsight being 20/20, I
(04:18):
realized so many mistakes we made, but wecould still make money.
Um, then we were doing that until about2015 when houses weren't so on sale.
Looking back there, I wish I bought morethen too but they were definitely not as
on sale.
Um, and it's a lot more competitive and,and it was also not passive.
(04:42):
Right?
Um, you, when you're flipping, you buy aproperty, fix it up, you're working and
then you sell it.
Hopefully at a profit, but then you haveto start over again.
to continue to make money.
And I wanted something more passive.
I wanted to buy a property, put intenants, just get that mailbox money, just
(05:04):
not have to keep working so hard.
But in LA, it was virtually impossible tofind something that would cash flow.
I was looking for a fourplex.
Everything was at least $2 million.
And I was lucky if it broke even.
Um, and at that time I ended up meeting aman who had become my mentor.
(05:29):
So I was in a, I was in a mastermind atthe time and I was talking to this other
guy who was in my mastermind saying, yeah,it's really tough.
I was like trying to find the rightproperties to flip and then looking for
this fourplex and nothing cash flows.
He said, you know, my friend Robert Helmsis the host of the Real Estate Guys Radio
Show.
He's coming to LA tomorrow night.
(05:50):
Do you want to have dinner
with us?
Sure.
So we go and Robert was asking me aboutwhat I'm doing.
And I was telling him that and he said,you know, LA is a really tough market.
I always say live where you want to live,invest where the numbers make sense.
And I went, Oh, until he said that I justsort of assumed that you had to invest
(06:13):
where you live where you can drive to yourproperty, touch it, self manage it.
Like it didn't cross my mind that I couldinvest
outside of my market and LA is not thebest market for investing.
It's super, super tenant friendly, greatif you're a tenant, sucky if you're a
landlord.
Also really hella expensive and it's just,you know, I'm like, oh, I don't have to
(06:36):
invest in that light.
So literally that opened up the world.
And then he said something, which is, youknow, the answer to your question, how it
got into commercial.
He said, and you can buy that four plex,but you're limited to your own
you know, your own capital and credit.
Alternatively, you could bring a group ofinvestors together and you could buy a 100
or 200 unit apartment building.
(06:56):
And he started telling me about thebenefits of that.
My brain was like, "What?!" "That's athing?!" I literally thought you had to be
a billionaire to do that kind of stuff.
I had no idea that regular people couldbuy properties like that, but I had this
(07:17):
full body, yes, yes, that's what I want todo.
It was so exciting.
I loved everything about that idea.
And so I went home that night, told myhusband, there's this thing, it's called
syndication.
You bring investors, you know.
And so that was October of 2015.
(07:40):
In January of 2016, we were at asyndication seminar in Phoenix learning
how to do this.
And we just went all in.
We joined this high -end mastermind.
I've got a couple of them.
And by the end of that year, for lessoutlay of capital than we probably would
(08:02):
have paid to buy that one fourplex byourselves in LA, we were able to, with my
partner and others, acquire over 1 ,000doors.
We got 1 ,012 doors in that one yearthrough this.
home.
Yeah, incredible.
So like, so we did, about five deals thatyear, two of which were passive, three
(08:25):
were active.
And, it was pretty incredible.
That is amazing.
I mean, that is a huge accomplishment in avery short amount of time going from a
quad in mind to hundreds of doors.
was mind blowing.
I couldn't, yeah, at the end of the year,I was like, wait, what did we just do?
How did that happen?
(08:47):
It was very cool.
I love how one idea too and one personbeing able to say something to spark the
idea to be like, oh, oh wait, A, I don'thave to buy in this crazy expensive market
that's no good for landlords anyway, andB, I don't have to use my own money.
How great would that be?
I know, right?
(09:08):
It was awesome.
So yeah, just it's been like being able togo into the commercial space is really,
it's been such a game changer because youcan just, it's scale, right?
It's not much more work to buy anapartment building or we do a lot of
(09:28):
industrial now, like a factory or, youknow,
mobile home park it's not that much morework than buying one house.
But the impact is so much greater.
Yeah.
And that's incredible that you did fivedeals in your first year of syndicating.
Can you walk through that kind ofemotional and mindset experience?
(09:51):
Because I imagine that as you're doingyour first one, it feels like this big
whale of a deal.
You know, it's the biggest deal thatyou've done to date.
You know, you don't have necessarily thattime horizon to really evaluate like how
it's all going to pan out yet.
But instead of just waiting and seeing,
You seemingly just went for it and didfour more right after that.
(10:14):
What was that like?
You know, well first, I didn't do italone.
So I definitely made sure that I hadmentorship.
I was, you know, being advised by peoplethat were wiser and had the experience.
I think what I've really learned with allof this is that you don't need to have any
(10:35):
of the individual things yourselves,right?
There are five main resources you need forreal estate.
You need,
to have money, you need time, you needrelationships, experience, and the
education, right, knowing what to do.
But if you're missing any of those, youcan partner with other people that have
that.
(10:56):
You don't have to do it by yourself.
In fact, you can't really do it byyourself.
Well, maybe you can if you just are atrust fund baby.
But even then, I wouldn't recommend thatyou do any of this by yourself because
that's how you make mistakes.
So we never tried to do it alone, but thefirst thing we went for was kind of crazy.
(11:19):
My next door neighbor was a vice presidentof a real estate investment trust.
At the time, she had done like threequarters of a billion dollars in different
real estate transactions.
Huge experience, but all of that was
under her work.
So she was, they were working her like amanimal.
She didn't really have time to do this byherself, but she wanted to do some of her
(11:45):
own deals.
So what we did was we partnered with herand we said, well, we have the time to
look for things.
So we'll find opportunities and she couldunderwrite in her sleep.
So she was gonna do certain things.
And our first deal that we went for wasactually a $40 million portfolio here in
(12:12):
Englewood, California here.
And we ended up getting to the best andfinal round.
We lost it in the end, which was a littlecrazy, because then I was like.
Wait, what would I have done then?
We had to raise all this money.
I've never raised a penny.
But I was like, let's do it.
Let's go for it.
I almost didn't know what I didn't know.
So we just went for it.
(12:36):
And it was through relationships anddifferent opportunities.
The first deal we did was a mobile homepark.
And a friend we'd had was
doing a bunch.
He said, I know you're trying tosyndicate.
We have an investor that was going tobring in money from Korea.
He's not able to bring in that money.
Do you want to raise the amount?
Do you want to raise this money?
(12:57):
We're like, sure.
So yeah, let's do it.
So that was kind of how we started.
We just started and we just, we just wentfor it.
It was ready fire aim more than, you know,
like ready, aim, aim, aim, aim, aim, aim,we just went.
Some things worked out and some thingsdidn't, but it was that, just go, we just
(13:20):
went for it with support.
Yeah, and you've talked aboutrelationships and partnerships and agree
those are critical and so crucial to beable to have the mindset of like, okay, I
can go in and it's not all on me.
Like I have other people who have some ofthose other experiences that maybe I'm
lacking or that we as a group need.
(13:41):
What is your criteria for finding thosepartners that you work with?
That's a great question.
So one thing I learned from the brilliantBeth Clifford, is that to look for the
three Cs.
And these are in order of importance.
So the first C is character.
(14:03):
So what is a character of the person thatyou're gonna be partnering with, teaming
up with?
So it's not something that
can be taught.
And when somebody shows you who they areat first, believe them.
So, you know, looking for, you know, how,how honest are they?
How are they of integrity?
How do they treat people?
How does, you know, it's like, how arethey treating the, maybe they're super
(14:26):
nice to you, but they're terrible to thewaitstaff or something like that, right?
one of the worst,
Partnerships that I've had ended up reallyreally biting me in the butt.
I mean this person I was visiting themarket and we went out we stopped and she
was saying okay You know, this is myemployee.
(14:49):
just thinks I'm of the property managerdoesn't know I'm the owner I'm gonna be
like point to you and you're gonna be theyou're most like sure you're the owner and
It's like okay, that's weird.
But I should have been like, wait, you'relying to your employee.
You're like, wait, there were red flags.
I should have seen that.
(15:09):
But yeah, I was like, all right, it'slike, that is not, wait, what?
In other words, don't partner with peoplethat are dishonest, but also that just
have a character that are a good match foryou and what you value and think is
important.
So character is the first thing.
And then after that is commitment.
(15:31):
So commitment is in a couple of ways.
And this is for everybody that you workwith.
It could be team members.
So one is a commitment to this particularproject.
You don't want to have somebody thatyou're going to partner with.
They don't have the time showing up.
They don't do what they say they're goingto do when they say they're going to do
(15:52):
it.
So having that commitment and then alsocommitment to your shared mission, vision
and values.
So one of my values is I want to leave aproperty in a community better than I
found it.
So if we're working with somebody who'sthere just about getting every dollar out
(16:16):
of a deal and willing to be a slumlord orwhatever, that is not gonna be a match for
me.
That's gonna be like a it's not they'renot gonna share that commitment to that
value It's not gonna work I also have arelationship for life philosophy.
I want us and you when I'm thinking abouthow we're gonna work together It's not let
(16:39):
me get the most I can right now like screwyou I think I want us to both I want
everybody to be happy so we keep workingtogether again and again and again and
again forever, right?
so that
that long -term orientation is somethingwe both have to share.
Cause if one of us has that orientation,the other one is like very, you know,
(17:02):
mercenary about their relationships andthat's not gonna, that's gonna be a
mismatch, not gonna work either.
So that's the commitment piece.
And then the last is the capacity.
So do they have the capacity to do whatyou need them to do?
To a certain extent, some skills can betaught.
But I find, this is another thing I'velearned, work with the best.
(17:26):
They won't cost you money, they'll makeyou money.
So I prefer whenever possible to partnerwith people that are at the top of their
game, and that's their capacity.
And that will always work out well.
So that's what I look for, the character,the commitment and the capacity.
And.
when those are all there always works out.
(17:49):
I love that.
And I feel like you brought up some goodexamples of how you can be looking for
those things.
And it's not something that's going totake years to figure out if they're the
right partner, right?
It could be over the course of a dinner.
It could be over the course of a singleinteraction.
So that's great.
And, you I like that you're like, listento your gut as well.
You know, if something seems like it'soff, listen to the Spidey Sense, it's
(18:11):
probably off and you should reallyevaluate that.
sure.
Yes, see it quickly and just go, you knowwhat, maybe it's not a right fit.
Yeah.
Well, so building off of then your firstyear, you did the five deals.
You had some success.
You said some things didn't work out, butoverall things worked out well enough that
(18:31):
you decided to continue moving forward.
What was next in the journey?
Now it's all starting to blur together.
Two or three more deals, but also wherethen we were managing them.
So when you're doing all of the realestate, it's a little bit like when you, I
know you guys have a 10 month old, youhave a new baby.
So when you're pregnant, right?
(18:54):
And you're starting to your family,there's so much focus on the labor.
So much focus.
on like all the books and like, you knowthe labor the pregnancy would expect what
you're expecting and then it's like and somuch focus on the labor, which even if
it's a super duper long labor, it's notgonna take much more than a day or two And
(19:16):
then you have a whole lifetime where youhave a child that you have to raise and
you know, hopefully make them good goodhumans.
So
after you buy a property, then you have torun it.
So that's, that was what we were, spent alot of 2017 doing more, you know, running
the deals and figuring out what we, welike, what we don't like as much.
(19:39):
And so that, that's kind of been thejourney.
And then we've just, we've exploreddifferent.
asset classes throughout the years too.
Yeah, I would definitely love to hear moreabout the asset classes and what led you
from one to another and talking about someof the benefits within those asset classes
(19:59):
as you moved from, you know, multi tomobile to RV, et cetera.
Yeah.
So, um, you know, we've mostly been in themultifamily space and more in the probably
since 2019 more, industrial.
(20:20):
We did one mobile home park, one RV park,not as much are, you know, are their
thing.
Um, but
with the industrial and how that happened.
And all of these different things havecome up because it's just through
relationships.
People have approached us around differentthings.
(20:40):
We've looked into different asset classesand different markets and said, okay,
yeah, we're interested.
Let's go there.
And by partnering with people who had thatexperience, we could piggyback off of
their experience, their knowledge, and wedidn't have to do it alone and start from
scratch.
So that's how we got into differentthings.
(21:02):
And with the industrial, so two of theapartments that we bought in 2016, which
were in Albuquerque, New Mexico.
One was, let's just, I'll say C.
Generous.
It could have been a D it could have beena D.
won't lie.
It was like it was a real, you know oneparticular super rough rough property it
(21:25):
was like the day before we bought it Itwas like a drive -by shooting and then
there was yeah, there was like Yeah,bullets, It was every every week.
We'd call our property manager cuz likecringing Like oh my god, what is what is
(21:45):
gonna happen?
There was always something.
It was like the day after Valentine's, theproperty manager went and saw that one of
the vacant units had been open and theyfound rose petals and hyperdermic needles.
That was like, so it was, it was just, itwas not, it was not a fun.
(22:07):
Not a fun place to, not a great place.
Um, or it looked like it was up andcoming.
Not quite So we were pretty desperate toget rid of it cause it was just such a
pain in our butt.
Uh, and there was another one too.
It was not quite so bad, but neither ofwhich were great.
And,
(22:27):
this was definitely divine intervention,but I was praying like I could use a
miracle about our property manager said,hey, would you consider selling these?
I like, I'd consider it for the rightprice.
You know, we have investors and so we wentand figured out a price that was kind of
(22:48):
crazy, but like that's kind of the pricewe need, but we're going to go high.
And then they'll, you know, they'llnegotiate down.
but it was this like 1031 investor fromCalifornia.
And we gave this crazy price that wasbasically, it was essentially this, it was
a four cap.
It was our, you know, an Albuquerque, likea really, like a D -class in Albuquerque,
(23:09):
New Mexico at a four cap.
And they took the price.
We sold it.
We sold it.
So, which was awesome as a seller, but itwas very, very scary for me as a buyer of
multifamily.
I was like, wow.
I do not want to compete against peoplethat will pay that price for those types
of assets.
What else is out there?
(23:31):
And we were approached by a partner we'ddone some deals with before who was
saying, yeah, I'm buying this industrialproperty.
He's like, really industrial?
Tell me about industrial.
And so we started looking into it, butindustrial didn't have the feeding frenzy
at the time that other...
(23:52):
commercial did, but there was anincreasing demand for industrial as things
were going online and online retailersneed industrial space.
They need warehouses.
They need, you know, they needdistribution centers.
I mean, it was like there was thisincreasing demand for industrial.
And so at the beginning of 2019, westarted getting into that.
(24:14):
We did very well during the pandemic.
It was the
best performing asset class, still doingwell.
And we love it because it's triple nettoo.
So triple net is, we buy it and the,tenant pays rent.
They also pay all the property taxes, payall the insurance and they pay all the
(24:35):
maintenance.
So there's a problem with the toilets.
They fix the toilets.
Something wrong with the roof.
They fix the roof.
It's like all of the, you know, all ofthe...
the inflationary pressures that havehappened, like all of that is on the
tenant.
None of that is us.
We pay our debt service.
And then then we have long term, like 20year leases with built in rent increases.
(24:56):
We know exactly what the rent is going tobe, exactly what our expenses are going
be.
There are no surprises.
It's wonderful.
Love it.
passive without actually being passive.
That's amazing.
It's like passive to the 10th degree.
Yeah, it's great.
So with, you know, super and our, thetenants are like eight, nine figure
(25:21):
businesses that have been around fordecades.
And yeah, it's great.
So that's what we really like.
And then we're always exploring differentthings.
Yeah, it sounds like once you got into theindustrial though, that was kind of a
moment of, oh, wait a second.
I can probably scale this using greatrelationships and being able to raise
(25:43):
money to make this happen further so thatit's less work for me and having to worry
about what's gonna happen on Valentine'sDay at a property and who knows what
neighborhood and be able to take anapproach.
Is that something that you're continuing?
to explore in terms of, you know, ifyou're looking at the percentage of your
(26:03):
portfolio as industrial, the one thingthat you're kind of like, this is the
thing I know I can do and I'm gonna domost of?
Yeah.
I mean, we have a lot of industrial.
So for the most part right now, our focusis more on the fundraising space as
opposed to the operations.
We have partners that are doing, they'redealing with more of the property
(26:25):
management and that kind of thing.
So we, as we went on, we realized we don'tlike that as much.
Right?
So I love, um, I love acquiring theproperties.
I love being involved in.
design and shifting things, although mostof our industrial, we do sale lease backs.
(26:46):
So we're actually buying, we buy it from acompany that is using the property.
They want to sell it, but then lease itback.
So we do sale lease backs mostly.
So we don't even have to touch thoseproperties.
It's really very quite easy.
So those, yeah, we love them and we havethem and we'll continue to put those in
(27:08):
our portfolio.
And then just as different, you know, whenthe right opportunities come up, I think
commercial right now, there's a lot ofdistress in commercial and which means
there's a lot of opportunity to helppeople that are in distress and get those
assets off their books at a nice discount.
(27:30):
So we are, we're open to differentopportunities that are gonna show up.
where we can solve problems and get thingsthat are really well priced.
Yeah.
Can you quickly touch on the sale leaseback concept and in particular, what is
(27:50):
the benefit to the business that isselling to you and then leasing it back?
Like why, why do companies do that?
Yeah.
Yeah, that's a good question.
That's what I, when I first was like,wait, why would they do that?
They want the property.
So usually they'll do it.
There are a couple of reasons, but mostlyit's because they want to get the equity
out of the property to put it back intotheir business.
(28:11):
So they could do a cash out refinance, butnormally they're not going to get much
more than 40 % of the equity out.
But if they want to get all of the equityout, they sell it.
There are also benefits to them, there aretax benefits to them.
So if you own a property outright, you'renot spending anything on it, you're
(28:32):
actually not getting any tax benefit.
But if you're renting, you can deduct thecost of your lease, right?
And a bunch of other things that aredeductible.
So it can be more tax beneficial, and thenoften to get the equity.
And sometimes we'll get these propertiesbecause
the business is being sold to anotherentity and the entity will want the
(28:58):
business of the business, but they don'twant the real estate of the business.
So we might buy the real estate andthey'll keep the business.
So that's mostly why.
Yeah, I find all of this about commercialabsolutely fascinating because the
business component or the fact that yourtenants are businesses means that their
motives for doing things are entirelydifferent than in residential, right?
(29:22):
So what you mentioned with the sale leaseback is also similar to what I've heard is
commonly done with things like groundleases where there are lots of companies
out there who don't want to.
purchase a piece of land and then gothrough the years of rezoning it to what
they need and then build, which is another12, 24, 36 months, because that ties up
(29:47):
their capital for way too long and they'renot receiving tax benefits.
So instead, especially for some of thesesmaller chain coffee shops, they'll just
go in, they want a ground lease that isalready ready for them to build.
They pop up a super modular building thatthey can construct in a matter of months
rather than years.
And then they're off to the races and theinvestor just owns their land and the
(30:10):
ground.
But the company is willing to go ahead andfront the cost for the construction and do
the land development simply because theydon't want to tie their capital up for
longer than they need to, which I think isabsolutely incredible and makes total
business sense, but is not something thatyou necessarily think about when you're
first getting into commercial.
There's so many different ways.
I know somebody who essentially flipsland.
(30:32):
So he'll buy the land, entitle it, do allthat thing, but then sell it ready,
entitled, ready to go with often with thearchitectural designs, you know, somebody
just buys it and runs with it.
So there are a lot of different thingsthat people can do.
And I think when people have been in theresidential space or they think about,
(30:56):
Most people think about investing in realestate as buying a house, a single family
house or apartments.
They don't think about, it's like everypiece of property, every time you're
standing on land, there's a roof over yourhead, somebody owns that.
And that somebody could be you.
(31:17):
There's pretty much any type of businessbuilding or even just land
could be in his own by somebody.
I am waiting now for the HGTV landflipping show to come out to start to
inspire people.
There's nothing visual about that show.
(31:40):
It would be very boring.
Or like, here's the land!
It's still land!
You know?
Yeah, it's like, here it is before, andnow here it is with the documents that you
can...
super over the top of that and that's allanyone will pay attention to.
(32:05):
the before and afters will not be superexciting.
I don't think that show would do verywell, but the investors can do very well.
That what's important.
Yeah.
And one of the things that I'm picking upon that I really appreciate about you is
that you're not very eager to categorizeyourself as a specific type of investor.
(32:28):
You know, you're not like, I'm amultifamily investor through and through,
and that's all I do.
And I'm not an industrial, you know,investor, and that's all I do through and
through.
You're very much open to opportunity andfinding what makes sense for you, given
the particular market that you're in.
And that seems like a, a.
dominant characteristic of your investingfrom when you first began.
(32:49):
So I think that's something important tocall out and probably something that has
contributed to your success.
Just this notion that yes, you canspecialize in something, but you don't
necessarily have to, to be successful ifyou are looking at the bigger picture of
what's going on and being opportunisticand open -minded about what's in front of
you.
Yeah, that's true.
(33:10):
I think to the extent that I've focused,right?
My focus has been on relationship buildingand working with other investors and
helping those investors, right?
So, and then I think it's a value to ourinvestors that we offer diversified
opportunities.
I personally don't like having all of myeggs in one investment basket.
(33:35):
like different markets, like differentasset types.
And now we're looking at someinternational stuff.
I like even having different currenciesthat I'm investing in.
So all of that, I think, is a value that Ican offer to my investors.
(33:55):
Look, this is, you know, we just, we bringopportunities that we like.
and that vetted, but that are, you know,they're not all the same.
It's not all a cookie cutter.
Yeah.
And when you talk about providing value toinvestors, you've done very well with
fundraising and raising capital.
(34:16):
Can you provide like the 101 overview offundraising for commercial and maybe a few
key things that you learned along the way?
Hmm, that's a that could be a very longanswer.
But let me see if I can distill down tothe the main nuggets.
I think one of the main things that'shelped me is to focus on It's not about me
(34:45):
that's actually about the other person andwhat do what do they need?
What's a match?
What's so really learning about otherother people and their what they're
they're needing?
What problems do they have?
How do we help them solve their problemsor meet their desires?
And when I shift, because when I firststarted, I remember thinking, who's gonna
(35:11):
give me money?
Like, why would they give me money?
And of course, they don't wanna give memoney.
They want their money working for them.
They want their money to go make money.
They want
to grow their money, they don't wanna giveme money, it's not about me.
And when I was able to really shift andthink, okay, how can I just really learn
(35:33):
what other people need and then help themto do that?
That's when things really shifted and thenit became really easy to raise money for
the right deals and I look for deals thatmatch
people more than I look for people tomatch deals.
That makes sense.
(35:54):
Yeah, so, you know, and there are somepatterns, right?
So not that I'm looking like, okay, I'mgonna look for this particular deal for
Noelle, but there'll be a pattern ofthings that our investors will like,
right?
And they want different types of returnsor tax benefits or...
(36:17):
or they want a diversification.
And so we look for things that will matchthat.
Well, that's really fascinating and nicethat you take that into consideration.
Because I think it's important to keep inmind, these are not necessarily short
-term commitments, right?
So if someone gets into something thatisn't a great fit for them or vice versa,
(36:41):
then it's not something that you're justeasily tie out of quickly.
So I think that's a really wise...
lesson for newer investors to keep in mindthat raising capital is great and
something that you need to do if you wantto be syndicating.
But just taking every dollar from anyonemay not be the best choice for you long
(37:03):
-term throughout the lifespan or theholding period of the investment.
Yeah, if somebody want you know, they wantsomething quickly or they're gonna they
want to put them away, but they're gonnaneed it back Yeah, just these things are
not they're relatively illiquid.
All right You can't it's not easy to getyour money back out and you have to see
(37:24):
the investment through and if it's gonnabe three years five years that's how long
you need it.
It's definitely a benefit.
You want it to be mutual beneficial forboth parties.
So I do appreciate that and like that.
I mean, syndicating is not something thatI know particularly a lot about.
I think the idea of fundraising can be alittle scary, at least for me personally.
(37:47):
I don't know if you...
It seems like you have thrived off of thatbecause you love the relationships.
Terrifying.
Like, oh my gosh, you want to give me howmuch money?
You know, like when you get that firstcheck, I'm sure it was like...
Okay, I have to make sure that I'm goingto work hard for this person to make sure
they get what they need.
So as you're evaluating the deal and likemaking sure to your point, it's beneficial
(38:11):
on both ends.
Like, yeah, that just personally seemslike a big mental hurdle to overcome for
the first time for sure.
I think the main thing to remember is thatit's not, again, it's not about you as a
syndicator.
It's you're helping this person who, Imean, now the banks are giving you a
(38:37):
little bit more interest, but for a longtime, it's like, okay, there's somebody
that's sitting there with money making 0.1 % and is just sitting in the bank and
is not doing anything
they don't want to have everything in thestock market or they just want to have.
They want to be able to have the taxbenefits of real estate.
They want to be able to own.
(38:57):
They want to be able to have their moneyworking better for them.
And so when you think about the fact thatyou're helping somebody grow their wealth,
you're helping them to diversify, you'rehelping them to have these tax benefits.
Then it's not as scary because you're notreally thinking about oh gosh they're
(39:23):
giving they've just wrote me a check for ahundred thousand dollars.
Like, they didn't write you a check for ahundred They wrote you know they've like
invested in this property they they mustknow like and trust you enough to have you
know entrusted that money to you andyou're gonna go off and bring it back to
them with friends but you're doing them aservice
and helping them solve a problem.
(39:44):
And it's win -win, right?
At least when I think about it in thatway, it's not scary, because then it's,
I'm just trying to help.
Yeah.
No, you're so right.
Thank you for that, for that reminder.
It's a good reminder.
You're helping someone else.
And ultimately that's what we want to bedoing.
And I know that's what you want to bedoing too, in terms of core foundational
fundamentals.
We can do it both in audiences and sharingthat information, as well as in the
(40:09):
investor route and helping investors beable to make a better return.
Then they can get at the bank or havingtheir money just sit in a savings account,
you know, thinking that that's, that's allyou can do.
And there's not just the stock market.
There's plenty of other ways to invest.
You mentioned something about, investingalmost being like a service that you're
(40:30):
providing to passive investors.
And I'm curious with that, what does yourtypical communication or interaction with
your passive investors look like?
Yeah, it depends on the deal.
So usually it's monthly and we'll justupdate, let them know what's going on.
(40:55):
I think when things are not as good thecommunications should be more frequent,
but generally once a month.
And those are just updates about theproperty and general market conditions,
what you're seeing, what the plan is.
Okay.
Exactly.
I was gonna say not to cut us off, but Iknow we're getting close to time, so
(41:17):
Patrick, Jeopardy round, get your one lastfinal question in.
Less of a question and more just a quickrecap.
I think that there are a few reallyimportant nuggets that Monick has called
out here from many years of experiencethat a lot of new investors can really
(41:38):
benefit from.
The main one that I'm taking away is thatyou shouldn't be doing this alone and
don't necessarily expect to be doing italone.
It takes a team, it is a team sport and...
the better quality of person or partneryou can surround yourself with, the easier
the process will be and the moresuccessful the process will likely be
(42:00):
because if you're partnering with thathigher quality experience or capacity,
then you're likely to be able to overcomethe challenges that each deal will
inevitably throw at you.
And then the
second thing is really be opportunisticabout where you are and what the market is
(42:21):
doing at any given time.
And don't necessarily feel the need topigeonhole yourself into one specific
asset class or type of property.
There are lots of deals out there to bedone.
And the more open -minded you are and thebetter quality people you're surrounding
yourself with to do those deals, thebetter likelihood you will have of
(42:44):
succeeding.
So just want to say thank you, Monick forsharing all of that with us because I
think as a beginner commercial investor,like there are things that you have
preconceived notions of.
And I think those two things are obviouslyvery important,
and not necessarily intuitive for thenewer investor.
(43:04):
So thank you for calling those out basedon what you've learned and how you found
success.
Yeah.
Monick I know you have so much more toshare and you also have multiple platforms
that people can find you on.
So can you share where people can find youto learn more about you and about real
estate investing goddesses as well?
(43:25):
Yeah, the best place is probably to go tomy website, REIGoddesses .com.
There you can connect with our differentsocial platforms and our blog and the
podcast and all the things.
Perfect.
We'll make sure to put those in the shownotes as well.
And seriously cannot thank you enough,Monick This has been really great.
It's been so amazing talking with you andlearning from you.
(43:48):
So thank you for joining us and we hopeeveryone listening has gotten the same
value that we have out of this.
Thank you both.
Hello and welcome to the Active Commercialreal Estate Investing Show brought to you
by the one and only school of commercialreal estate investing.
I'm Patrick.
And today we're joined with Monick Halm.
Monick is the founder of Real EstateInvestor Goddesses.
She is an educator and advocate for femalereal estate investors and has a mission to
(00:43):
help 1 million women achieve financialfreedom through real estate.
Monick is a real estate investor andsyndicator
and owns together with her investors over1,000 residential doors and industrial
assets across 15 states.
She's a graduate of McGill University andColumbia Law School.
She is the number one bestselling authorof the Real Estate Investor Goddess
Handbook and Invest Like a Goddess (01:04):
Advice from the Most Successful Women in Real
Estate.
Monick is also a TEDx speaker, podcasthost, real estate strategy mentor, yogi,
world traveler, recovered attorney,
wife, and mother of three amazing kids.
Monick, you seem to do it all.
We're excited to learn how you do it.
Welcome to the show.
(01:26):
Thank you.
It's great to be here.
As I was telling you before, we werelistening to a lot of podcasts that you
were interviewed on while we were drivingup to the mountains the other weekend.
So definitely fan girl moment for me.
Um, I'm super excited, especially beinganother woman that is getting into
commercial real estate.
It's really awesome to have the diversityin the space and coming from, um, I know
(01:47):
you had said in the previous podcast aswell, you kind of came from not really
knowing real estate, and I feel like somany people come from having a connection
prior or having someone who knows aboutit.
So excited to dive in.
Would love to hear from you about how yougot started in real estate and the why you
got started in commercial real estate.
(02:07):
Sure.
So I got started really by accident.
I live in Los Angeles, which is a superexpensive market.
And back in 2005, I was working as alawyer and I had always been taught, the
only thing I'd been taught about realestate is that at some point you should
(02:28):
buy a house to live in.
That was never something you invest in.
You just buy the house.
So I'd been working for a couple of years.
I was like, okay, I guess it's time to
buy that house, but LA is such anexpensive market.
Even back in 2005, a starter home wasupwards of $500 to $600 ,000.
(02:48):
And I couldn't afford that by myself.
So I ended up house hacking.
That's how you guys started.
But I got with a friend, we bought a multi-unit.
We each
took a room in a larger unit, we rentedout, there was an upstairs two bedroom
that we rented out and then there was alittle back house, the garage had been
(03:12):
converted, we rented that out too, rentedout our basement and then I was like a
landlord and these people were paying mymortgage, so it awesome.
That's how I got into the game.
Still didn't really think of it as a wayto leave my job, which I really, really
hated.
It was still just, oh, that's how Imanaged to buy that house I supposed to
(03:36):
buy .
But when I met my husband, he had aduplex.
And after the crash in 2008, we ended upselling one of the duplexes and we ended
up flipping.
So we started to flip, which was
the only thing I thought real estateinvesting was because that's what I'd seen
(03:57):
on TV.
It's like, oh, we've been investing realestate.
So we'll flip because like the shows!
We've done rehab in our house.
We can flip.
And it was a really good time to beflipping because you get houses were super
on sale.
You could buy a house and fix it.
And just you could make tons of mistakes,which, you know, hindsight being 20/20, I
(04:18):
realized so many mistakes we made, but wecould still make money.
Um, then we were doing that until about2015 when houses weren't so on sale.
Looking back there, I wish I bought morethen too but they were definitely not as
on sale.
Um, and it's a lot more competitive and,and it was also not passive.
(04:42):
Right?
Um, you, when you're flipping, you buy aproperty, fix it up, you're working and
then you sell it.
Hopefully at a profit, but then you haveto start over again.
to continue to make money.
And I wanted something more passive.
I wanted to buy a property, put intenants, just get that mailbox money, just
(05:04):
not have to keep working so hard.
But in LA, it was virtually impossible tofind something that would cash flow.
I was looking for a fourplex.
Everything was at least $2 million.
And I was lucky if it broke even.
Um, and at that time I ended up meeting aman who had become my mentor.
(05:29):
So I was in a, I was in a mastermind atthe time and I was talking to this other
guy who was in my mastermind saying, yeah,it's really tough.
I was like trying to find the rightproperties to flip and then looking for
this fourplex and nothing cash flows.
He said, you know, my friend Robert Helmsis the host of the Real Estate Guys Radio
Show.
He's coming to LA tomorrow night.
(05:50):
Do you want to have dinner
with us?
Sure.
So we go and Robert was asking me aboutwhat I'm doing.
And I was telling him that and he said,you know, LA is a really tough market.
I always say live where you want to live,invest where the numbers make sense.
And I went, Oh, until he said that I justsort of assumed that you had to invest
(06:13):
where you live where you can drive to yourproperty, touch it, self manage it.
Like it didn't cross my mind that I couldinvest
outside of my market and LA is not thebest market for investing.
It's super, super tenant friendly, greatif you're a tenant, sucky if you're a
landlord.
Also really hella expensive and it's just,you know, I'm like, oh, I don't have to
(06:36):
invest in that light.
So literally that opened up the world.
And then he said something, which is, youknow, the answer to your question, how it
got into commercial.
He said, and you can buy that four plex,but you're limited to your own
you know, your own capital and credit.
Alternatively, you could bring a group ofinvestors together and you could buy a 100
or 200 unit apartment building.
(06:56):
And he started telling me about thebenefits of that.
My brain was like, "What?!" "That's athing?!" I literally thought you had to be
a billionaire to do that kind of stuff.
I had no idea that regular people couldbuy properties like that, but I had this
(07:17):
full body, yes, yes, that's what I want todo.
It was so exciting.
I loved everything about that idea.
And so I went home that night, told myhusband, there's this thing, it's called
syndication.
You bring investors, you know.
And so that was October of 2015.
(07:40):
In January of 2016, we were at asyndication seminar in Phoenix learning
how to do this.
And we just went all in.
We joined this high -end mastermind.
I've got a couple of them.
And by the end of that year, for lessoutlay of capital than we probably would
(08:02):
have paid to buy that one fourplex byourselves in LA, we were able to, with my
partner and others, acquire over 1 ,000doors.
We got 1 ,012 doors in that one yearthrough this.
home.
Yeah, incredible.
So like, so we did, about five deals thatyear, two of which were passive, three
(08:25):
were active.
And, it was pretty incredible.
That is amazing.
I mean, that is a huge accomplishment in avery short amount of time going from a
quad in mind to hundreds of doors.
was mind blowing.
I couldn't, yeah, at the end of the year,I was like, wait, what did we just do?
How did that happen?
(08:47):
It was very cool.
I love how one idea too and one personbeing able to say something to spark the
idea to be like, oh, oh wait, A, I don'thave to buy in this crazy expensive market
that's no good for landlords anyway, andB, I don't have to use my own money.
How great would that be?
I know, right?
(09:08):
It was awesome.
So yeah, just it's been like being able togo into the commercial space is really,
it's been such a game changer because youcan just, it's scale, right?
It's not much more work to buy anapartment building or we do a lot of
(09:28):
industrial now, like a factory or, youknow,
mobile home park it's not that much morework than buying one house.
But the impact is so much greater.
Yeah.
And that's incredible that you did fivedeals in your first year of syndicating.
Can you walk through that kind ofemotional and mindset experience?
(09:51):
Because I imagine that as you're doingyour first one, it feels like this big
whale of a deal.
You know, it's the biggest deal thatyou've done to date.
You know, you don't have necessarily thattime horizon to really evaluate like how
it's all going to pan out yet.
But instead of just waiting and seeing,
You seemingly just went for it and didfour more right after that.
(10:14):
What was that like?
You know, well first, I didn't do italone.
So I definitely made sure that I hadmentorship.
I was, you know, being advised by peoplethat were wiser and had the experience.
I think what I've really learned with allof this is that you don't need to have any
(10:35):
of the individual things yourselves,right?
There are five main resources you need forreal estate.
You need,
to have money, you need time, you needrelationships, experience, and the
education, right, knowing what to do.
But if you're missing any of those, youcan partner with other people that have
that.
(10:56):
You don't have to do it by yourself.
In fact, you can't really do it byyourself.
Well, maybe you can if you just are atrust fund baby.
But even then, I wouldn't recommend thatyou do any of this by yourself because
that's how you make mistakes.
So we never tried to do it alone, but thefirst thing we went for was kind of crazy.
(11:19):
My next door neighbor was a vice presidentof a real estate investment trust.
At the time, she had done like threequarters of a billion dollars in different
real estate transactions.
Huge experience, but all of that was
under her work.
So she was, they were working her like amanimal.
She didn't really have time to do this byherself, but she wanted to do some of her
(11:45):
own deals.
So what we did was we partnered with herand we said, well, we have the time to
look for things.
So we'll find opportunities and she couldunderwrite in her sleep.
So she was gonna do certain things.
And our first deal that we went for wasactually a $40 million portfolio here in
(12:12):
Englewood, California here.
And we ended up getting to the best andfinal round.
We lost it in the end, which was a littlecrazy, because then I was like.
Wait, what would I have done then?
We had to raise all this money.
I've never raised a penny.
But I was like, let's do it.
Let's go for it.
I almost didn't know what I didn't know.
So we just went for it.
(12:36):
And it was through relationships anddifferent opportunities.
The first deal we did was a mobile homepark.
And a friend we'd had was
doing a bunch.
He said, I know you're trying tosyndicate.
We have an investor that was going tobring in money from Korea.
He's not able to bring in that money.
Do you want to raise the amount?
Do you want to raise this money?
(12:57):
We're like, sure.
So yeah, let's do it.
So that was kind of how we started.
We just started and we just, we just wentfor it.
It was ready fire aim more than, you know,
like ready, aim, aim, aim, aim, aim, aim,we just went.
Some things worked out and some thingsdidn't, but it was that, just go, we just
(13:20):
went for it with support.
Yeah, and you've talked aboutrelationships and partnerships and agree
those are critical and so crucial to beable to have the mindset of like, okay, I
can go in and it's not all on me.
Like I have other people who have some ofthose other experiences that maybe I'm
lacking or that we as a group need.
(13:41):
What is your criteria for finding thosepartners that you work with?
That's a great question.
So one thing I learned from the brilliantBeth Clifford, is that to look for the
three Cs.
And these are in order of importance.
So the first C is character.
(14:03):
So what is a character of the person thatyou're gonna be partnering with, teaming
up with?
So it's not something that
can be taught.
And when somebody shows you who they areat first, believe them.
So, you know, looking for, you know, how,how honest are they?
How are they of integrity?
How do they treat people?
How does, you know, it's like, how arethey treating the, maybe they're super
(14:26):
nice to you, but they're terrible to thewaitstaff or something like that, right?
one of the worst,
Partnerships that I've had ended up reallyreally biting me in the butt.
I mean this person I was visiting themarket and we went out we stopped and she
was saying okay You know, this is myemployee.
(14:49):
just thinks I'm of the property managerdoesn't know I'm the owner I'm gonna be
like point to you and you're gonna be theyou're most like sure you're the owner and
It's like okay, that's weird.
But I should have been like, wait, you'relying to your employee.
You're like, wait, there were red flags.
I should have seen that.
(15:09):
But yeah, I was like, all right, it'slike, that is not, wait, what?
In other words, don't partner with peoplethat are dishonest, but also that just
have a character that are a good match foryou and what you value and think is
important.
So character is the first thing.
And then after that is commitment.
(15:31):
So commitment is in a couple of ways.
And this is for everybody that you workwith.
It could be team members.
So one is a commitment to this particularproject.
You don't want to have somebody thatyou're going to partner with.
They don't have the time showing up.
They don't do what they say they're goingto do when they say they're going to do
(15:52):
it.
So having that commitment and then alsocommitment to your shared mission, vision
and values.
So one of my values is I want to leave aproperty in a community better than I
found it.
So if we're working with somebody who'sthere just about getting every dollar out
(16:16):
of a deal and willing to be a slumlord orwhatever, that is not gonna be a match for
me.
That's gonna be like a it's not they'renot gonna share that commitment to that
value It's not gonna work I also have arelationship for life philosophy.
I want us and you when I'm thinking abouthow we're gonna work together It's not let
(16:39):
me get the most I can right now like screwyou I think I want us to both I want
everybody to be happy so we keep workingtogether again and again and again and
again forever, right?
so that
that long -term orientation is somethingwe both have to share.
Cause if one of us has that orientation,the other one is like very, you know,
(17:02):
mercenary about their relationships andthat's not gonna, that's gonna be a
mismatch, not gonna work either.
So that's the commitment piece.
And then the last is the capacity.
So do they have the capacity to do whatyou need them to do?
To a certain extent, some skills can betaught.
But I find, this is another thing I'velearned, work with the best.
(17:26):
They won't cost you money, they'll makeyou money.
So I prefer whenever possible to partnerwith people that are at the top of their
game, and that's their capacity.
And that will always work out well.
So that's what I look for, the character,the commitment and the capacity.
And.
when those are all there always works out.
(17:49):
I love that.
And I feel like you brought up some goodexamples of how you can be looking for
those things.
And it's not something that's going totake years to figure out if they're the
right partner, right?
It could be over the course of a dinner.
It could be over the course of a singleinteraction.
So that's great.
And, you I like that you're like, listento your gut as well.
You know, if something seems like it'soff, listen to the Spidey Sense, it's
(18:11):
probably off and you should reallyevaluate that.
sure.
Yes, see it quickly and just go, you knowwhat, maybe it's not a right fit.
Yeah.
Well, so building off of then your firstyear, you did the five deals.
You had some success.
You said some things didn't work out, butoverall things worked out well enough that
(18:31):
you decided to continue moving forward.
What was next in the journey?
Now it's all starting to blur together.
Two or three more deals, but also wherethen we were managing them.
So when you're doing all of the realestate, it's a little bit like when you, I
know you guys have a 10 month old, youhave a new baby.
So when you're pregnant, right?
(18:54):
And you're starting to your family,there's so much focus on the labor.
So much focus.
on like all the books and like, you knowthe labor the pregnancy would expect what
you're expecting and then it's like and somuch focus on the labor, which even if
it's a super duper long labor, it's notgonna take much more than a day or two And
(19:16):
then you have a whole lifetime where youhave a child that you have to raise and
you know, hopefully make them good goodhumans.
So
after you buy a property, then you have torun it.
So that's, that was what we were, spent alot of 2017 doing more, you know, running
the deals and figuring out what we, welike, what we don't like as much.
(19:39):
And so that, that's kind of been thejourney.
And then we've just, we've exploreddifferent.
asset classes throughout the years too.
Yeah, I would definitely love to hear moreabout the asset classes and what led you
from one to another and talking about someof the benefits within those asset classes
(19:59):
as you moved from, you know, multi tomobile to RV, et cetera.
Yeah.
So, um, you know, we've mostly been in themultifamily space and more in the probably
since 2019 more, industrial.
(20:20):
We did one mobile home park, one RV park,not as much are, you know, are their
thing.
Um, but
with the industrial and how that happened.
And all of these different things havecome up because it's just through
relationships.
People have approached us around differentthings.
(20:40):
We've looked into different asset classesand different markets and said, okay,
yeah, we're interested.
Let's go there.
And by partnering with people who had thatexperience, we could piggyback off of
their experience, their knowledge, and wedidn't have to do it alone and start from
scratch.
So that's how we got into differentthings.
(21:02):
And with the industrial, so two of theapartments that we bought in 2016, which
were in Albuquerque, New Mexico.
One was, let's just, I'll say C.
Generous.
It could have been a D it could have beena D.
won't lie.
It was like it was a real, you know oneparticular super rough rough property it
(21:25):
was like the day before we bought it Itwas like a drive -by shooting and then
there was yeah, there was like Yeah,bullets, It was every every week.
We'd call our property manager cuz likecringing Like oh my god, what is what is
(21:45):
gonna happen?
There was always something.
It was like the day after Valentine's, theproperty manager went and saw that one of
the vacant units had been open and theyfound rose petals and hyperdermic needles.
That was like, so it was, it was just, itwas not, it was not a fun.
(22:07):
Not a fun place to, not a great place.
Um, or it looked like it was up andcoming.
Not quite So we were pretty desperate toget rid of it cause it was just such a
pain in our butt.
Uh, and there was another one too.
It was not quite so bad, but neither ofwhich were great.
And,
(22:27):
this was definitely divine intervention,but I was praying like I could use a
miracle about our property manager said,hey, would you consider selling these?
I like, I'd consider it for the rightprice.
You know, we have investors and so we wentand figured out a price that was kind of
(22:48):
crazy, but like that's kind of the pricewe need, but we're going to go high.
And then they'll, you know, they'llnegotiate down.
but it was this like 1031 investor fromCalifornia.
And we gave this crazy price that wasbasically, it was essentially this, it was
a four cap.
It was our, you know, an Albuquerque, likea really, like a D -class in Albuquerque,
(23:09):
New Mexico at a four cap.
And they took the price.
We sold it.
We sold it.
So, which was awesome as a seller, but itwas very, very scary for me as a buyer of
multifamily.
I was like, wow.
I do not want to compete against peoplethat will pay that price for those types
of assets.
What else is out there?
(23:31):
And we were approached by a partner we'ddone some deals with before who was
saying, yeah, I'm buying this industrialproperty.
He's like, really industrial?
Tell me about industrial.
And so we started looking into it, butindustrial didn't have the feeding frenzy
at the time that other...
(23:52):
commercial did, but there was anincreasing demand for industrial as things
were going online and online retailersneed industrial space.
They need warehouses.
They need, you know, they needdistribution centers.
I mean, it was like there was thisincreasing demand for industrial.
And so at the beginning of 2019, westarted getting into that.
(24:14):
We did very well during the pandemic.
It was the
best performing asset class, still doingwell.
And we love it because it's triple nettoo.
So triple net is, we buy it and the,tenant pays rent.
They also pay all the property taxes, payall the insurance and they pay all the
(24:35):
maintenance.
So there's a problem with the toilets.
They fix the toilets.
Something wrong with the roof.
They fix the roof.
It's like all of the, you know, all ofthe...
the inflationary pressures that havehappened, like all of that is on the
tenant.
None of that is us.
We pay our debt service.
And then then we have long term, like 20year leases with built in rent increases.
(24:56):
We know exactly what the rent is going tobe, exactly what our expenses are going
be.
There are no surprises.
It's wonderful.
Love it.
passive without actually being passive.
That's amazing.
It's like passive to the 10th degree.
Yeah, it's great.
So with, you know, super and our, thetenants are like eight, nine figure
(25:21):
businesses that have been around fordecades.
And yeah, it's great.
So that's what we really like.
And then we're always exploring differentthings.
Yeah, it sounds like once you got into theindustrial though, that was kind of a
moment of, oh, wait a second.
I can probably scale this using greatrelationships and being able to raise
(25:43):
money to make this happen further so thatit's less work for me and having to worry
about what's gonna happen on Valentine'sDay at a property and who knows what
neighborhood and be able to take anapproach.
Is that something that you're continuing?
to explore in terms of, you know, ifyou're looking at the percentage of your
(26:03):
portfolio as industrial, the one thingthat you're kind of like, this is the
thing I know I can do and I'm gonna domost of?
Yeah.
I mean, we have a lot of industrial.
So for the most part right now, our focusis more on the fundraising space as
opposed to the operations.
We have partners that are doing, they'redealing with more of the property
(26:25):
management and that kind of thing.
So we, as we went on, we realized we don'tlike that as much.
Right?
So I love, um, I love acquiring theproperties.
I love being involved in.
design and shifting things, although mostof our industrial, we do sale lease backs.
(26:46):
So we're actually buying, we buy it from acompany that is using the property.
They want to sell it, but then lease itback.
So we do sale lease backs mostly.
So we don't even have to touch thoseproperties.
It's really very quite easy.
So those, yeah, we love them and we havethem and we'll continue to put those in
(27:08):
our portfolio.
And then just as different, you know, whenthe right opportunities come up, I think
commercial right now, there's a lot ofdistress in commercial and which means
there's a lot of opportunity to helppeople that are in distress and get those
assets off their books at a nice discount.
(27:30):
So we are, we're open to differentopportunities that are gonna show up.
where we can solve problems and get thingsthat are really well priced.
Yeah.
Can you quickly touch on the sale leaseback concept and in particular, what is
(27:50):
the benefit to the business that isselling to you and then leasing it back?
Like why, why do companies do that?
Yeah.
Yeah, that's a good question.
That's what I, when I first was like,wait, why would they do that?
They want the property.
So usually they'll do it.
There are a couple of reasons, but mostlyit's because they want to get the equity
out of the property to put it back intotheir business.
(28:11):
So they could do a cash out refinance, butnormally they're not going to get much
more than 40 % of the equity out.
But if they want to get all of the equityout, they sell it.
There are also benefits to them, there aretax benefits to them.
So if you own a property outright, you'renot spending anything on it, you're
(28:32):
actually not getting any tax benefit.
But if you're renting, you can deduct thecost of your lease, right?
And a bunch of other things that aredeductible.
So it can be more tax beneficial, and thenoften to get the equity.
And sometimes we'll get these propertiesbecause
the business is being sold to anotherentity and the entity will want the
(28:58):
business of the business, but they don'twant the real estate of the business.
So we might buy the real estate andthey'll keep the business.
So that's mostly why.
Yeah, I find all of this about commercialabsolutely fascinating because the
business component or the fact that yourtenants are businesses means that their
motives for doing things are entirelydifferent than in residential, right?
(29:22):
So what you mentioned with the sale leaseback is also similar to what I've heard is
commonly done with things like groundleases where there are lots of companies
out there who don't want to.
purchase a piece of land and then gothrough the years of rezoning it to what
they need and then build, which is another12, 24, 36 months, because that ties up
(29:47):
their capital for way too long and they'renot receiving tax benefits.
So instead, especially for some of thesesmaller chain coffee shops, they'll just
go in, they want a ground lease that isalready ready for them to build.
They pop up a super modular building thatthey can construct in a matter of months
rather than years.
And then they're off to the races and theinvestor just owns their land and the
(30:10):
ground.
But the company is willing to go ahead andfront the cost for the construction and do
the land development simply because theydon't want to tie their capital up for
longer than they need to, which I think isabsolutely incredible and makes total
business sense, but is not something thatyou necessarily think about when you're
first getting into commercial.
There's so many different ways.
I know somebody who essentially flipsland.
(30:32):
So he'll buy the land, entitle it, do allthat thing, but then sell it ready,
entitled, ready to go with often with thearchitectural designs, you know, somebody
just buys it and runs with it.
So there are a lot of different thingsthat people can do.
And I think when people have been in theresidential space or they think about,
(30:56):
Most people think about investing in realestate as buying a house, a single family
house or apartments.
They don't think about, it's like everypiece of property, every time you're
standing on land, there's a roof over yourhead, somebody owns that.
And that somebody could be you.
(31:17):
There's pretty much any type of businessbuilding or even just land
could be in his own by somebody.
I am waiting now for the HGTV landflipping show to come out to start to
inspire people.
There's nothing visual about that show.
(31:40):
It would be very boring.
Or like, here's the land!
It's still land!
You know?
Yeah, it's like, here it is before, andnow here it is with the documents that you
can...
super over the top of that and that's allanyone will pay attention to.
(32:05):
the before and afters will not be superexciting.
I don't think that show would do verywell, but the investors can do very well.
That what's important.
Yeah.
And one of the things that I'm picking upon that I really appreciate about you is
that you're not very eager to categorizeyourself as a specific type of investor.
(32:28):
You know, you're not like, I'm amultifamily investor through and through,
and that's all I do.
And I'm not an industrial, you know,investor, and that's all I do through and
through.
You're very much open to opportunity andfinding what makes sense for you, given
the particular market that you're in.
And that seems like a, a.
dominant characteristic of your investingfrom when you first began.
(32:49):
So I think that's something important tocall out and probably something that has
contributed to your success.
Just this notion that yes, you canspecialize in something, but you don't
necessarily have to, to be successful ifyou are looking at the bigger picture of
what's going on and being opportunisticand open -minded about what's in front of
you.
Yeah, that's true.
(33:10):
I think to the extent that I've focused,right?
My focus has been on relationship buildingand working with other investors and
helping those investors, right?
So, and then I think it's a value to ourinvestors that we offer diversified
opportunities.
I personally don't like having all of myeggs in one investment basket.
(33:35):
like different markets, like differentasset types.
And now we're looking at someinternational stuff.
I like even having different currenciesthat I'm investing in.
So all of that, I think, is a value that Ican offer to my investors.
(33:55):
Look, this is, you know, we just, we bringopportunities that we like.
and that vetted, but that are, you know,they're not all the same.
It's not all a cookie cutter.
Yeah.
And when you talk about providing value toinvestors, you've done very well with
fundraising and raising capital.
(34:16):
Can you provide like the 101 overview offundraising for commercial and maybe a few
key things that you learned along the way?
Hmm, that's a that could be a very longanswer.
But let me see if I can distill down tothe the main nuggets.
I think one of the main things that'shelped me is to focus on It's not about me
(34:45):
that's actually about the other person andwhat do what do they need?
What's a match?
What's so really learning about otherother people and their what they're
they're needing?
What problems do they have?
How do we help them solve their problemsor meet their desires?
And when I shift, because when I firststarted, I remember thinking, who's gonna
(35:11):
give me money?
Like, why would they give me money?
And of course, they don't wanna give memoney.
They want their money working for them.
They want their money to go make money.
They want
to grow their money, they don't wanna giveme money, it's not about me.
And when I was able to really shift andthink, okay, how can I just really learn
(35:33):
what other people need and then help themto do that?
That's when things really shifted and thenit became really easy to raise money for
the right deals and I look for deals thatmatch
people more than I look for people tomatch deals.
That makes sense.
(35:54):
Yeah, so, you know, and there are somepatterns, right?
So not that I'm looking like, okay, I'mgonna look for this particular deal for
Noelle, but there'll be a pattern ofthings that our investors will like,
right?
And they want different types of returnsor tax benefits or...
(36:17):
or they want a diversification.
And so we look for things that will matchthat.
Well, that's really fascinating and nicethat you take that into consideration.
Because I think it's important to keep inmind, these are not necessarily short
-term commitments, right?
So if someone gets into something thatisn't a great fit for them or vice versa,
(36:41):
then it's not something that you're justeasily tie out of quickly.
So I think that's a really wise...
lesson for newer investors to keep in mindthat raising capital is great and
something that you need to do if you wantto be syndicating.
But just taking every dollar from anyonemay not be the best choice for you long
(37:03):
-term throughout the lifespan or theholding period of the investment.
Yeah, if somebody want you know, they wantsomething quickly or they're gonna they
want to put them away, but they're gonnaneed it back Yeah, just these things are
not they're relatively illiquid.
All right You can't it's not easy to getyour money back out and you have to see
(37:24):
the investment through and if it's gonnabe three years five years that's how long
you need it.
It's definitely a benefit.
You want it to be mutual beneficial forboth parties.
So I do appreciate that and like that.
I mean, syndicating is not something thatI know particularly a lot about.
I think the idea of fundraising can be alittle scary, at least for me personally.
(37:47):
I don't know if you...
It seems like you have thrived off of thatbecause you love the relationships.
Terrifying.
Like, oh my gosh, you want to give me howmuch money?
You know, like when you get that firstcheck, I'm sure it was like...
Okay, I have to make sure that I'm goingto work hard for this person to make sure
they get what they need.
So as you're evaluating the deal and likemaking sure to your point, it's beneficial
(38:11):
on both ends.
Like, yeah, that just personally seemslike a big mental hurdle to overcome for
the first time for sure.
I think the main thing to remember is thatit's not, again, it's not about you as a
syndicator.
It's you're helping this person who, Imean, now the banks are giving you a
(38:37):
little bit more interest, but for a longtime, it's like, okay, there's somebody
that's sitting there with money making 0.1 % and is just sitting in the bank and
is not doing anything
they don't want to have everything in thestock market or they just want to have.
They want to be able to have the taxbenefits of real estate.
They want to be able to own.
(38:57):
They want to be able to have their moneyworking better for them.
And so when you think about the fact thatyou're helping somebody grow their wealth,
you're helping them to diversify, you'rehelping them to have these tax benefits.
Then it's not as scary because you're notreally thinking about oh gosh they're
(39:23):
giving they've just wrote me a check for ahundred thousand dollars.
Like, they didn't write you a check for ahundred They wrote you know they've like
invested in this property they they mustknow like and trust you enough to have you
know entrusted that money to you andyou're gonna go off and bring it back to
them with friends but you're doing them aservice
and helping them solve a problem.
(39:44):
And it's win -win, right?
At least when I think about it in thatway, it's not scary, because then it's,
I'm just trying to help.
Yeah.
No, you're so right.
Thank you for that, for that reminder.
It's a good reminder.
You're helping someone else.
And ultimately that's what we want to bedoing.
And I know that's what you want to bedoing too, in terms of core foundational
fundamentals.
We can do it both in audiences and sharingthat information, as well as in the
(40:09):
investor route and helping investors beable to make a better return.
Then they can get at the bank or havingtheir money just sit in a savings account,
you know, thinking that that's, that's allyou can do.
And there's not just the stock market.
There's plenty of other ways to invest.
You mentioned something about, investingalmost being like a service that you're
(40:30):
providing to passive investors.
And I'm curious with that, what does yourtypical communication or interaction with
your passive investors look like?
Yeah, it depends on the deal.
So usually it's monthly and we'll justupdate, let them know what's going on.
(40:55):
I think when things are not as good thecommunications should be more frequent,
but generally once a month.
And those are just updates about theproperty and general market conditions,
what you're seeing, what the plan is.
Okay.
Exactly.
I was gonna say not to cut us off, but Iknow we're getting close to time, so
(41:17):
Patrick, Jeopardy round, get your one lastfinal question in.
Less of a question and more just a quickrecap.
I think that there are a few reallyimportant nuggets that Monick has called
out here from many years of experiencethat a lot of new investors can really
(41:38):
benefit from.
The main one that I'm taking away is thatyou shouldn't be doing this alone and
don't necessarily expect to be doing italone.
It takes a team, it is a team sport and...
the better quality of person or partneryou can surround yourself with, the easier
the process will be and the moresuccessful the process will likely be
(42:00):
because if you're partnering with thathigher quality experience or capacity,
then you're likely to be able to overcomethe challenges that each deal will
inevitably throw at you.
And then the
second thing is really be opportunisticabout where you are and what the market is
(42:21):
doing at any given time.
And don't necessarily feel the need topigeonhole yourself into one specific
asset class or type of property.
There are lots of deals out there to bedone.
And the more open -minded you are and thebetter quality people you're surrounding
yourself with to do those deals, thebetter likelihood you will have of
(42:44):
succeeding.
So just want to say thank you, Monick forsharing all of that with us because I
think as a beginner commercial investor,like there are things that you have
preconceived notions of.
And I think those two things are obviouslyvery important,
and not necessarily intuitive for thenewer investor.
(43:04):
So thank you for calling those out basedon what you've learned and how you found
success.
Yeah.
Monick I know you have so much more toshare and you also have multiple platforms
that people can find you on.
So can you share where people can find youto learn more about you and about real
estate investing goddesses as well?
(43:25):
Yeah, the best place is probably to go tomy website, REIGoddesses .com.
There you can connect with our differentsocial platforms and our blog and the
podcast and all the things.
Perfect.
We'll make sure to put those in the shownotes as well.
And seriously cannot thank you enough,Monick This has been really great.
It's been so amazing talking with you andlearning from you.
(43:48):
So thank you for joining us and we hopeeveryone listening has gotten the same
value that we have out of this.
Thank you both.
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