April 15, 2025 • 41 mins
What does it take to close your first Multifamily deal? Joe Rinderknecht joins us to share how the ranch values of hard work, integrity, and keeping your word have become the foundation of his thriving multifamily operation along the Western front of the US.
Whether you're just starting your real estate journey or looking to scale your existing portfolio, Joe's practical wisdom on partnership, market selection, and maintaining an abundance mindset offers a refreshing perspective on building sustainable success in multifamily investing.
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Episode Transcript
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Speaker 1 (00:08):
Welcome back to the Multifamily Mindset Podcast.
I'm your host today, ZachRucker, and I am super, super
excited about our guest today.
This person that we have on hasbeen really was my first mentor
getting into real estate, soI'm super excited to share him
with all you listeners and getto know a little bit more about.
(00:29):
Even my journey into thisReally came from this person
that kind of helped me getstarted and showed me the ropes
a little bit, and with that it'sJoe RenderConnect is our guest
today.
Joe, thanks so much for takingthe time to jump on and share
your story with our listeners,and I'm just I'm super excited
(00:52):
because I love hearing whatyou're doing in your journey and
it's always inspiring me tokeep moving forward and keep
pushing and get out of mycomfort zone.
So thanks so much for jumpingon.
Speaker 2 (01:04):
Yeah, thanks, zach.
I appreciate it.
Those were some nice things hesaid.
I don't know if I was ever amentor.
I was on my own journey as well, so we were walking down that
path together.
Speaker 1 (01:16):
So that's right.
That's right, but that was thefun part about it.
Speaker 2 (01:19):
That's right, yeah, and it's really cool to see like
where kind of we started backin.
When was it Like 17?
Speaker 1 (01:28):
Yeah, back in 17.
Speaker 2 (01:29):
Going to school at USU together.
You were a part of the realestate club that I had started
and then we started getting moreinto looking at multifamily
deals together and got intoRenatus.
Right, it's an educationcompany.
It's been good it's been goodyeah, yeah.
Speaker 1 (01:50):
So tell the, tell listeners who's who's joe.
Speaker 2 (01:53):
Uh, who is joe for for all of our listeners, uh,
out there yeah, so for those ofyou who cannot see me, I wear a
cowboy hat it my MO it's who Iam through and through Grew up
farming and ranching in NorthernUtah, and so a lot of my values
in business and real estatecome from what I learned on the
(02:13):
ranch of you know, working hard,your word is your bond, you
know, and taking all those intoreal estate and making sure that
your, you know communication isgood with investors and you do
exactly what you say.
You know one thing we've likewe've won deals before because
we've called sellers out and belike hey, listen, we're going to
(02:35):
do everything that we've saidwe're going to do.
We expect you to hold your wordto us, and we've won deals
because we've called sellers outin that way.
Right, so really big on kind ofthose values.
And so fast forward to now I'mnot really I don't do a lot of
the farm and ranch stuff doingmore of my own little homestead,
if you will, as it's kind of abuzzword these days as Zach and
(02:59):
I talk about money minutes priorto this call or to the
recording, but now we're we'rereally focused on.
My focus is on essentially twodifferent things in the world of
real estate, mainly multifamilyright.
We are very focused on buyinglike 20 to a hundred units along
(03:20):
the Western front of the U?
S so Montana, idaho, utah alongthe western front of the US so
Montana, idaho, utah and we ownassets in all three of those
states and are just looking toexpand our portfolio.
Most of our stuff is smallerright, like we just bought a 54
unit in Missoula, montana, backin September.
(03:41):
Right now we're under contractto purchase a 48 unit in Boise
and so we were actually alsolooking at, we've been bidding
on some hundred 200 plus stuff.
But like our bread and butter ofwhat we know really well is in
that sub.
You know a hundred unit rangeand brokers are now reaching out
(04:02):
to my partner, levi Allen and Ibecause we have about a decade
under our belt of building thatcredibility right With brokers
that we can execute and do whatwe say we're going to do, get
deals done and we don't everretrade either.
So that's kind of one side ofwhat the business did.
(04:22):
We run and operate everythingthat we purchase here locally,
essentially in our backyard.
Everything in our backyard islike a four-hour drive.
It's crazy Like last Tuesday wehad our building inspection on
Boise.
I got up at like 4 am, drove toBoise, did the inspection for
six hours, drove back that night, was back home by 8 o'clock
(04:44):
that was a long day, that waslike
an hour round trip drive right,that's what we only like to get
on site quickly if needs be, andbe boots on the ground.
The other side of the businessthat I do is I have a fund as
well where we've mainly donemultifamily.
We will raise capital forothers deals.
We'll partner with people whoare really good at what they do.
(05:08):
They're vertically integratedand right now we're building
that into more of a assetagnostic cashflow fund.
So we've mainly donemultifamily.
We've done a couple of customhome builds we're looking at
right now some like venturecapital opportunities, some
(05:29):
businesses you know the otherkind of buzzword out there in
the world right now is kind ofyour trades and your
service-based businesses.
You know it's kind of theboomers right are at that age.
They don't want to be a plumber, they don't want to be an HVAC
guy, they don't want to be aplumber, they don't want to be
(05:52):
an hvac guy, they don't want tobe a landscaper, and so we're
looking at investing in, youknow, those kind of businesses
as well and really anything thatwe can get some pretty good
cash flow on.
Um, you know, we're reallylooking at because you know,
zach, as you know you're in themulti-family space too.
What we're kind of seeing rightnow in the market right is
either somebody's like alreadywhat they call like pregnant
multi-family, like they'veinvested so much in multi-family
, they're ready for somethingelse.
(06:13):
So that's where we like to kindof hit on what what those wants
and needs are from the fund,because a lot of the stuff we do
is high rate, uh, short-termstuff, but also, as we know,
people that invested in 2021,that at the top of the market,
like there's so much money tiedup in deals that they just don't
(06:35):
know like are they ever goingto get their money back?
Are they going to getdistribution again?
We just don't know.
And so we're we're trying tolike on our multifamily stuff
and, like the fund, think of,like what's happening in the
market, what are investorsexperiencing right now?
Today, investors areexperiencing their returns in
their Cushman Wake not Cushman,that's a brokerage the Charles
(06:57):
Schwab accounts, right, theirstocks are tanking right now.
Their stocks are tanking rightnow.
So looking at the whole scopeand figuring out how can we
pivot and, you know, provide agood service and investment
opportunity for our investors.
So that was kind of a quick onetoo, yeah.
Speaker 1 (07:19):
Yeah, that's awesome.
So kind of two sides of thebusiness not necessarily fully
all in on, just like that funinvesting into your deals, but
having that as investing intoother deals I think that's kind
of unique kind of situation thatyou don't see too often of
you're operating your own dealsbut then you're raising money
(07:41):
for other people's deals outsideof that.
I think that's a unique kind ofsetup that allows you to.
I think that's a that's reallya smart position, cause then you
get to see how these, theseoperators that are really good
at what they do, how well theyoperate, and you get to see a
little bit inside.
You know their, their businessand their organization and then
(08:05):
kind of bring that back to youryour business in a way right.
Speaker 2 (08:08):
That's totally true, yeah, and I actually.
Speaker 3 (08:11):
Hey everyone, clinton Orr here with iProtect
Insurance and Financial Services, we are thrilled to be
returning to peak partnershipthis year.
At iProtect, we specialize inmultifamily insurance and risk
management, helping investorsacross the country maximize
profitability for nearly 15years Through strategic risk
(08:32):
management and strong carrierrelationships, we make sure your
investments are protected andoptimized for an insurance quote
or insurance pricing per dooron a deal you're underwriting or
essential risk managementresources to help keep your
investment secure.
Visit our website, ratemaporg.
(08:54):
Let's connect and make yourproperty safer and more
profitable.
Speaker 2 (08:58):
looking forward to seeing you all at peak
partnership and I'll give acouple reasons why we've done
the fund of funds.
Uh, it's more than just thatbecause, yeah, lifting up the
hood of their operations,essentially, and seeing how they
do reporting and financials andk1s and you know all of the
inner workings with constructionand whatnot, like, yeah, you do
get to look at that, which issuper nice for an aspiring
(09:21):
operator who wants to becomevertically integrated right and
so like.
With the multi-family stuff wewon't work with, we won't deploy
capital with anybody who isn'tvertically integrated right,
because we want to save stuff.
Granted, like, there are acouple sponsors that, like
everybody trusts, who are, youknow, they have deals
foreclosing right now, but it'sjust, it's not necessarily their
(09:41):
fault, it's just the marketright.
But I started the fund back in22 and if we, you know, go back
to that time, I had bought a1951 24 plex in bergam city,
utah.
That was a massive, massiverenovation right, and that
(10:04):
property got to a point where,like I, my partners and I and
more specifically, myself, justcause I lived closest to it,
like I lived at that propertylike three to five days a week
and I wasn't getting paid, Idon't have a full, I didn't have
a job, or I just quit my job toto buy that property.
(10:24):
And, uh, you know, the, the,the the ship was sinking, and so
we had to show up every day tomake sure it didn't sink, kept
it above water.
So I started the fund because Iwas like one I'm sick and tired
of operations and I'm ready tojust trust somebody else with
money and money for me while Ideal with this.
(10:47):
And so that was one of thereasons why I was, like, really
started looking at, like how canI do more?
Like debt, right, because Idon't want to be an operator
like I'm already strapped.
And so that's where, like thefund to fund structure came into
play, where I could raise abunch of money for somebody
else's deal that was verticallyintegrated, great track record,
(11:08):
right, and be able to make moneyfrom that while I was focusing
on keeping this deal alive,right.
That was, you know, the firstthing, that was the first reason
why we did it.
But then also, I'm always kindof more of a long-term visionary
as well, like the whole beginwith the end in mind, and so,
(11:29):
again, I've always wanted tohave a vertically integrated
business, assets undermanagement, you know, and
understanding their operationsand getting paid to do it was
(11:49):
like, all right, this, this iscool, let's, let's run with this
.
Speaker 1 (11:53):
Yeah.
You know, yeah, that's sweet, Ilike that, like you.
Just, I came out of a necessitybut then also just grew into
this, um, you know,multi-purpose, full reason to
set up the fund and go the fundof funds and like for our
listeners.
You know, a lot of ourlisteners are new, trying to get
into to multifamily and getstarted and, uh, a lot of them
(12:17):
are trying to figure out thatpiece of okay, how do I, you
know, get into deals and whatare ways to do that?
And some are like, well, I'mgoing to raise capital for deals
and it's um, or I'm going totry to find the deal right.
There's, there's differentavenues to get there.
Um, I would say all aredifficult.
It's just a matter of which onedo you want to pick and dive
(12:40):
into it, right, but that fun offun models is is a good point
that you, you, you, bring out.
Can you explain a little bit?
Don't go into too depth.
We don't want to, like, confusepeople too much on that piece.
But, yeah, how do you, as a umowning that fund, get paid, uh,
to operate that when you, whenyou, get into deals?
Speaker 2 (13:01):
yeah, I can.
There's typically two differentways and all high level.
So we did.
The very first deal we did waswith Rise48.
They're based out of Phoenixand essentially, if you're a
retail investor, you have 50K toinvest with them.
They're going to give you a 7%70-30 split right.
And so I'm also part of anothercommunity called Avestor.
(13:23):
They are a fund administrator.
They're the ones that helped usset up the fund of funds, and
so it was their relationshipwith RISE48.
And so we were able to negotiateterms with RISE48 that if we
brought over $500,000 to thetable then we would get an
8-pref-80-20 split Right.
(13:43):
So we raised $71010 000 forthat first deal, and so we
brought in you know, I think itwas uh seven investors to raise
that 7 10 right, which each ofthem individually would have
only got the seven press 70 30split.
So what we did is we gave theinvestors the full eight percent
(14:05):
prep, but then on the back andmy team and I will get the 10
percent, uh, on the performancesplit.
So we we took a very small likeum fund manager fee it was like
one and a quarter points upfront for raising that money,
which is like it's like sevengrand or something which you
(14:26):
know that's not not a ton, butwe'll get paid a lot more on the
back end.
And so we, and then we're juststraight, strictly lps, right,
we bring one check to uh rise 48and then we manage all of our
investors on our back end.
Um, the other deal that we didin Ohio, we're more of a kind of
(14:48):
like a co-GP.
I'm not going to go into a lotof detail on that, because co-GP
is getting really hammered onright now by the SEC because you
cannot be compensated, right?
This is a pretty good disclaimerfor anybody that is looking to
get started in this and raisecapital.
Like, even though I have alegitimate 506c fund that you
(15:11):
know is a reg defiling throughthe sec, like even me, raising
capital for a deal that I don'thave other responsibilities in
is a violation of sec guidelines.
So you cannot take, like co-GPshares of a deal only for
raising money.
You have to have otherresponsibilities within that
(15:34):
deal, and so we do have otherresponsibilities with the Ohio
group.
Therefore, we were able to getthat co-GP shares.
But just so everybody knows,like, make sure you don't go and
try and get code gp shares actfee and all that just for
raising capital, because if youget caught it won't be pretty,
and so, even though we're anewer fund, like we want to be
(15:57):
100 sec compliant from day oneyou know, a lot of smaller
operators say, oh, we're small,we're not going to draw any
attention by the SEC.
You're correct, until you knowan event like now happens and
there's a lot of investors whoare suing, right, because the
(16:19):
inevitable, the worst casescenario is happening, right.
So now these small shops arenow being, you know, sec is
looking at them and askingquestions.
It's just better to cover yourbasis from day one and do it
right.
Speaker 1 (16:34):
Yeah, and I do want to like highlight that because I
know a lot of the new investorsin the multifamily mindset are
looking to focus on like raisingcapital and the big stress is
they want to get the GP shares,yeah, but oh no, we've both been
there, man, we have both beenthere, yeah, to focus on like
raising capital and the bigstress is they want to get the
gp shares.
Speaker 2 (16:49):
Yeah, but we've both been there, man, we have both
been there yeah, yeah, you want,you want that slice like.
Speaker 1 (16:55):
You want that slice of the pie.
But like I want to talk aboutthat benefit of setting that fun
up to get lp shares.
You know that still plays a bigbenefit right to the the fact
that you get.
You know a lot of people wantthe co-GP shares because they
want an inside look on a dealand they want to be a part of a
deal.
You can still get that rightfrom your LP share position
(17:18):
because you see it from thereporting standpoint, you still
have that relationship with theoperator.
So you can get some insidelooks and get to learn through
that process from the LP sideand you stay more compliant on
that deal and not worry so muchabout potential SEC issues in
(17:39):
the future.
You kind of keep yourself saferright.
Speaker 2 (17:43):
Yeah, the biggest difference right is you don't
have any decision-making and,truthfully, no sponsor is going
to give you any decision making.
If you're just getting started,like I've been in it 10 years
and like I don't want to haveany decision making
responsibility on rise 48, likethey're they're two billion
dollar aum, right like let themrun it value, but like I'd
(18:04):
rather just stay on the lp andstay in my lane, you know.
And the other thing, too thatI'll mention is that because
I've talked to a couple of yourstudents and I know that one
thing that you guys teach is tostay in a couple of different
markets, get to know the marketand that's why we're so focused
on Montana, idaho and Utah Is wefeel like we have an advantage.
(18:25):
I feel like that.
What you say, like we have anadvantage, I feel like in this
market because we invest andoperate, but like I wanted to
understand Texas and I want tounderstand Ohio and I want to
understand the metrics there,but I don't have to know it
fully to invest there, right?
So that's the nice thing aboutthe fund is like I can get in
(18:46):
deals outside of my core marketsthrough the fund and get to
understand those metrics so thatin the future, if I want to
expand, I have, you know, reallygood relationships with those
sponsors that I can partner with.
Now.
Speaker 1 (19:01):
Yeah.
Speaker 2 (19:01):
No.
Speaker 1 (19:03):
I love that.
I love that because you'reright, like it's what we, what I
stress to the students is yes,stick to what you know.
And if one of you you don'twant to invest where, you're
right, like it's the what we,what I stress to the students,
is yes, stick to what you know.
And if one of you you don'twant to invest where you're at,
maybe you're in California andso you have to.
You're kind of forced to lookoutside.
Okay, pick one market, startthere, get to really know it.
But once you do that, yeah,feel free to expand.
But use, utilize resources.
(19:25):
And so you, you did that.
You utilize a resource.
You know a sponsor, veryexperienced sponsor, vertically
integrated and invested withthem from an LP standpoint, uh,
with your fund.
Or even gotten to the GP shares, uh, outside of your normal
markets, to learn that market.
I think that's.
(19:45):
I think that's excellent adviceto take and to have the
opportunity to learn, becauseit's a lot of work.
It's a lot of work to learn anew market and the ins and outs
of it and to even get a um, youdon't really you're at a loss,
right?
You don't have that competitiveadvantage when you're not local
to that market and I mean I seethat struggle because you know
(20:05):
my group we look at outside ofof.
I mean we want to look intoutah in idaho but uh, yeah, I
mean you understand thestruggles a little bit of that
looking here locally and justthe you know how pricey it is.
So we kind of force ourselvesto look outside as well and look
into different markets.
Um, yeah, the not being bootson the ground piece, you know,
(20:25):
does hurt that and that'ssomething you just got to
consider with that.
So I mean that's a great point.
I love how you highlighted theinvestment side of it.
The LP piece is another benefitto utilizing that to get into
other markets.
Speaker 2 (20:40):
Yeah, or just find a team like you have, right, zach,
and add value to anothersponsor and, you know, makes it
easier for you to get into thoseother markets, that's right,
yeah and yeah they're completely, you know, right on with like
utah and idaho it's they'reexpensive and it's not as cash
flow heavy as some of these youknow, the sunbelt states and
(21:01):
whatnot but I can tell you likeour appreciation is pretty dang
good and like there's a lot ofbenefits to investing here
locally if you can make thenumbers work.
So, yeah, one thing I'd like tomention to Zach, like for all
your listeners, because you'vementioned something like a lot
of people, like in your program,are trying to figure out like
(21:24):
how do they fit in, like how canthey get into a deal?
Do they raise the money, dothey do they find the deal?
You know something that reallyhelped me from getting started
and you you'll probably rememberthis is something that we
learned from.
Renatus is and and I've kind oftaken it how they taught it to
how I like to interpret it butthere's essentially five things
(21:45):
you need to get a deal doneright and I'll quickly go
through those.
So there's these five thingsyou need to get a deal done
right and I'll quickly gothrough those.
So there's these five thingsright, the broad, broad things
that if you can bring one or twoof the five things, you can
typically get a deal done.
You can find if you can bringone or two.
You don't have to have all five.
Find somebody who have theother three or four.
(22:05):
This is really good for abeginner to understand, because
as we get into this we're likeokay, I want to buy that 20 unit
, okay, but that 20 unit is 200ka unit, so it's a four million
dollar deal and I gotta go signon the loan.
I've got to bring you know what, 30 right now, so 600 000 plus
(22:30):
acquisition fee.
So I got to bring a million,roughly, you know, got to have
the credit to get the loan.
But I don't know any propertymanagers and I've never done
this before.
And then you get all in yourhead analysis, paralysis, hits
you and then you don't do itRight.
So essentially those fivethings which are what I just
said in that little scenario isone is time Time to go out, find
(22:52):
the deal to hustle Right.
Number two is knowledge.
Have you done this before?
How to underwrite right.
Construction Like that's what'sreally helped me is like I have
a background in construction,so that's really helped as well.
So what knowledge do you haveto add value to a team
Relationships right?
That can be with propertymanagers, lenders, brokers,
(23:16):
insurance, legal all the thingsyou need the whole team that you
need right.
Number four is credit orcredibility right, because the
lender is going to look at both.
They want to know your creditscore If you can get it even a
not even a recourse loan right.
Your credit, like on one of thelast deals that I did, my
credit went to crap because ofthat deal in Utah so I didn't
(23:39):
get to sign on the loan.
So therefore I didn't get asmuch of the deal because my
credit was crap, but I had apartner who did have it Right.
So, credibility they want tosee how much experience do you
have.
So, in the more experience youcan put into a team, the better.
Technically, your rate is right, you can get blender.
And then number five is moneyright.
So if you can bring one of theone of the five, one to two of
(24:02):
the five, so time, knowledge,relationships, credit,
credibility or money to thetable like you can assemble
essentially the other three orfour needed to get a deal done
right.
And the biggest thing too, isthat I fell into this a lot um,
never do a deal just to do adeal and keep an abundance
(24:24):
mindset when building a team.
There was a kid that you willprobably remember, zach, when we
were going to college.
I will not say his name, butlike he was, he was not team
focused, he was all me, me, me,me, me and you know, like he did
a lot of deals, but like he wasone of those guys and and
everybody has their own path.
Like I don't ever want to be aself-made millionaire, I want to
(24:46):
be a team-made millionaire.
So have a loving mindset aboutthat, find that team to share.
You know that $100,000 act feewith, or whatever it may be
right Because you can go further, faster with more individuals.
So I hope that helps.
You know, some of the listenerskind of give them.
Like you know, I was talking toa cousin the other day and it
(25:09):
was like he lives in a smalltown, knows a lot of people,
like knows everybody.
I was like dude, you should gobuy some apartments.
He's like we don't have thatkind of money.
I was like guess what, I'mbuying this deal in boise and
I'm probably putting 30 grandinto it.
Like I don't need to have thatwhole 2.85 million that I need
to raise in my pocket to go doit.
Like I have the people, I havethe money connections right, I'm
(25:32):
raising, I know how to raisemoney, yeah.
Speaker 1 (25:36):
It's being resourceful right.
Speaker 2 (25:38):
Yeah, resourceful yeah.
Speaker 1 (25:42):
And then have that abundance mindset to to want to
partner with people and and youknow I've jumped on calls going
over deals and people want, youknow, my team to sponsor it.
And then we start talking aboutGP percentage and you know the
it's all in negotiation but they, they, they fight for more and
more because they want thishigher percentage and it's well,
let's, let's go over the thingsthat you're actually bringing
(26:03):
to the table and where you landon that.
You've never done a deal beforetable.
And where you land on thatyou've never done a deal before.
You don't have the experience.
You can sign on the loanbecause maybe you do have a net
worth that you can bring to thetable Awesome but you don't have
the experience that the lenderrequires and you've never
operated a deal.
So see where, like, yes, you getvalue, so you get to be part of
(26:26):
the deal, but don't try tofight for a ton of that, because
you are coming in to learn thatand it's about sharing, right,
yeah, and as a as a sponsor,you're not trying to be greedy
and say, well, no, I'm takingthe whole deal, it's.
There's a lot of work that Ithink a lot of people don't
realize that goes into it, right, Like you said, like you're in
(26:46):
your brigham city deal, likeyou're there three to four days
out of the week because of it.
Speaker 2 (26:51):
Just it took a lot more than I'm assuming you guys
expected, right oh yeah, it wasway heavier of a renovation than
we ever expected and and Ithink that came with
inexperience too we thought wehad enough construction
experience on the team, thoughtwe had budgeted enough money and
I mean there were it's a 1951build man, like there's gonna be
(27:15):
skeletons behind the closet.
We just didn't account for youknow, like we, we budgeted
literally like and I'm okaytalking about this, I'd rather
be fully transparent about myexperience than be like you know
, because there's people whohave lost money on deals and
they're not going to talk aboutbecause it taints their
reputation.
They feel like it taints, butfor me I'm like I want to be as
raw as possible.
(27:35):
I want you to know that webudgeted a million and a half.
Dude.
We paid a little over threemillion in renovations.
Wow bought that deal for twomillion and we put three million
into it.
And most people will be like,wow, you bought it for two and
you sold it for six and aquarter.
Yeah, isn't it great?
And everybody's like, oh mygosh, you made so much money,
(27:57):
but like, but, that's, that's no.
Like we put three million intoit and then investor equity was
a million and a quarter.
We broke even, man, when wesold that deal in september of
this last year.
We were able to give ourinvestors 100 return of capital,
which was still a win, becausewe know guys who you know only
given 50 back or it's a totalwash right, where was I going on
(28:22):
with that?
Um, where are we going withthat?
Uh, zach, I At the beginning ofwhere that was going.
Speaker 1 (28:32):
Just the inexperience sometimes, or the yeah, not
actually being prepared or notknowing what, potentially all
the work that goes into a deal.
Speaker 2 (28:44):
Yeah, that's right, that's right yeah.
Speaker 1 (28:47):
I mean, yeah, I mean thanks for sharing that and that
I mean I remember talking toyou about that deal last year at
some point and you're just like, yeah, we just we need to
offload this and just, you know,call it a win that we got our
investors capital back and moveon to the next one and we
learned a ton from this.
Right, I mean it's a hugelearning experience, for sure
(29:11):
that you could take from thatand and operate better on the
next opportunity.
And, yeah, definitely a winthat you kept investors capital
during a time that a lot ofpeople haven't been able to do
that with with some deals lately, for sure.
Speaker 2 (29:23):
Um, so, yeah, it's all a learning experience every
deal it is and I think there's agood lesson there too for new,
new people getting into this isthat, like the reason we were
able to give her a hundredpercent return of capital is
because we showed up every day.
You know it would have beenreally easy to let that deal go
to bankruptcy and to forecloseand just be like dang it.
(29:46):
Sorry guys, dang it didn't workout.
But like I had family money inthat deal you know I had money
tied up in that deal and like wedid have to do a capital call.
But even on deals that aretough like this like one of the
investors has now invested withme twice since that deal, even
(30:06):
though it didn't go as planned,it went bad.
Like he's invested asignificant amount of money with
me twice since that deal, eventhough it didn't go as planned,
it went bad.
Like he's invested asignificant amount of money with
me just because of that trustthat we were able to build as we
were going through the crapyeah you know, yeah, the
transparency, right, thetransparency that I'm sure you
communicated with your investors.
Speaker 1 (30:24):
Uh, going through all that.
Speaker 2 (30:26):
Yeah, that's right, that's right.
Speaker 1 (30:34):
Well, I mean, sorry, go ahead, go for it.
I was just gonna say there, Imean, there's just so many
learning lessons, um, that youshared and it's it's been really
uh, you know, interesting tolearn about your experiences and
what you've been able to sharewith our listeners.
And, um, I know, I definitelywant to have you come back on on
the on the show again we canrerecord some more of just like
your journey.
Right, we didn't even dive intothat, we just dove right into
(30:56):
the multifamily aspect, cause wecause we're just we're, we love
it so much.
But, um, I think we'll doanother episode sharing your
journey, your story, cause Ithink you have such a special
story that will really impactour listeners.
And you know, I mean, yourstory impacted me too in getting
(31:18):
to where I'm at, and we didn'teven dive into that, which is
okay, because I think we covereda lot for our listeners, but
there's so much more behind, Ithink, our conversation that we
could have for sure.
Speaker 2 (31:27):
Cliffhanger.
Speaker 1 (31:28):
Yep, cliffhanger for sure.
Yeah, we'll have another one inthe coming months, but I do end
with three questions.
I call them the think biggerquestions, so I want to dive
into those, just with our timehere.
The first one is how do youchoose to think bigger?
Speaker 2 (31:46):
How do I choose to think bigger?
That's an interesting question.
How do I choose to think bigger?
How do I choose to think bigger?
That's an interesting question.
How do I choose to think bigger?
I and again kind of like whatwe've talked about a little bit
earlier.
I've always been kind of along-term visionary, and so I
would first tell you to read thebook the Magic of Thinking Big.
(32:08):
It's a great place to start.
Speaker 1 (32:09):
There you go yeah.
Speaker 2 (32:10):
I would choose that.
But I've always had the mindsetlike even when Zach first met
me I was doing small,multifamily, duplex, fourplex
stuff.
No-transcript, I know.
(32:50):
I'm driving a semi right now.
But I think, and then that's.
I think that's a good answer tothe question like how do I
choose to?
You know, think bigger is itstarts today.
And looking at where you wantto be 10, 15 years, and
believing that you can do it.
Right, like joe biden canbecome president.
Like why can't you be amulti-millionaire?
(33:11):
Right, I should throw politicalstuff out there.
But if somebody has done whatyou want to do, why can't you?
Speaker 1 (33:21):
Yeah, yep, exactly.
Speaker 2 (33:24):
The magic of thinking big.
Speaker 1 (33:29):
Yeah, that's perfect.
I love that.
I love that answer.
No, it's great.
I mean, I just knowing you, Ijust know you've always thought
bigger too.
I think that's a big piece, youknow, especially the
multifamily mindset um relates alot to just, I think you and I
and in that realm of we lovereal estate, but then mindset
has also played a huge factor inthat, right, uh, just spending
(33:53):
that time, that money and goingin and really developing our
mindset, and I think that'spushed the limits to thinking
bigger.
And now it's, you know, I thinkthat question is it's it really
comes easy to you, to whatyou're thinking, because I know
you, you are thinking of thesebigger things in the future.
Uh, because it's more naturalto you now, right?
Speaker 2 (34:15):
natural.
It still gets tough like that.
Thinking bigger is alwaysevolving too, you, you, know how
do I take down a 250 unit andcome up with 500,000 of earnest
money, Like that was theconversation today.
I'm like I don't freaking know.
Speaker 1 (34:31):
Yeah.
Speaker 2 (34:31):
We'll figure it out.
Speaker 1 (34:33):
We'll figure it out.
That's right, we'll figure itout.
Speaker 2 (34:35):
One thing I'll say like multifamily mindset.
Right, that's the company name.
I would say nothing else mattersif you don't have the mindset
yeah, right at the end of theday, like we're on the reason
we're on this journey, thereason to even make money, like
money doesn't make sense.
It doesn't matter if you're nottrying to become a better
version of yourself and thatcomes from mindset and like I've
(34:57):
been.
My son just got done wrestlingand what we found like really
helped with him at eight yearsold.
You know wrestling tough kidsis like who are you wrestling
today?
It doesn't matter who the kidis, what his name is, you're
wrestling yourself.
Who are you competing againsttoday?
Yourself?
You know it doesn't matter whoor what or what the situation is
(35:19):
.
Anyway, on to question two.
Sorry.
Speaker 1 (35:21):
Yeah, no, and that kind of goes into question.
Speaker 2 (35:24):
Two the second question is how do you define
success?
I think a lot of people wouldsay, like buy money in the bank
and asset center management andthe multifamily Sure, that is a
KPI Sure that you can track,that is a KPI sure that you can
(35:45):
track.
Um, like I look at myself of whoI am today versus who I was,
you know, in 17 and you know I'mliving what I prayed for back
then.
You know I'm living that dreamright now and so I think that's
a great way to define success.
And just being very gratefulwith where your current
situation is, that, even if it'skind of a sad path or a sad
(36:09):
kind of world you're living inright now.
Like be grateful for thatbecause got kicked in the face
and you know I was busted up andwheelchair bound and those were
tough times even you know, inthe moment.
But looking back, like you know, persevering through the tough
(36:35):
and becoming who you want tobecome, is a great definition of
success.
You want to become is a greatdefinition of success because
have you ever heard, uh, likethe epitome of hell is when you
get to heaven, you look at whoyou could have become yeah right
.
You're not looking at themansion, you're not looking at
the bentley, you're not lookingat the money, like all of those
(36:57):
things amplify who you alreadyare.
Yeah, I love that, so we justgot to remember that because we
can get so tied up, like ifwe're paycheck to paycheck and
you know I've definitely beenthere Like you got to keep that
vision of who you're wanting tobecome, because just focusing
and chasing the money when youchase money it runs away from
you.
Speaker 1 (37:18):
Yeah, there you go.
I love that.
I love that.
That's perfect.
Last question is what is yourbest advice you can give a new
multifamily investor, Someonethat's trying to get into this
and be an operator?
What's your best advice you cangive them?
Speaker 2 (37:35):
Yeah, I would definitely follow those.
The five things you need to doa deal, do a self-analysis, find
your strengths and find peoplewho complement your weaknesses.
And the last thing that I'llsay which is you probably be for
the next episode is I took apause from buying any apartments
from like 2018 to 21 because Iwent to work for people who are
(37:58):
doing what I already wanted todo.
Right, I went and worked for acommercial property management
company to learn that side ofthe business.
And then I went and worked fora couple operators around the
country learning how to finddeals, underwrite you know, do
due diligence all the way todispo the full cycle of the deal
.
So, find that person.
That and, mind you, when I didthe property management is a lot
(38:22):
is a an 80 unit LIHTC section24 only got paid 20 a year.
Right, it's nothing.
I did it for the experience.
Find somebody doing what youwant to do and go.
You know if you can do it forfree and go.
You know if you can do it forfree, go.
(38:42):
Add value to that person andand and.
That that has paid me more thanthe financial that I, you know
from the financial gain.
You know I've always had thatmindset Cause I did that as a
kid, training horses.
You know, like I was going tobe a big horse trainer one day
and I went and mucked out stallsand rode colts to learn how to
(39:03):
be a performance horse trainer.
Speaker 1 (39:05):
Yeah, yeah, honestly I would say it's not necessarily
the easiest, but it isdefinitely a way to learn is to
follow the people that are doingit.
Like we said, follow thosepeople and learn from them.
I have a very similar kind of apiece there that I've kind of
(39:27):
followed.
I think follow a little bit ofthat journey there of just learn
from others, and that's whetheryou're doing it for free or
very cheap or you even pay themto teach you a little bit and
give a little bit of their timeto learn the ropes a little bit
faster, and to them to teach youa little bit and give a little
bit of their time to learn theropes a little bit faster and to
get to where you want to go.
Sometimes you take that risk.
Speaker 2 (39:50):
And then full circle to the beginning of the
conversation.
The more knowledge you gainlike you want that co-GP, great,
go get the freaking knowledgeyou know.
I'll tell you a quick lastthing that my grandpa always
taught me growing up and it'stranslated into real estate when
you have a brand new cult thatyou're training into that
performance horse, like, everytime you learn something new.
(40:13):
He can jump a ditch, he canfence a cow, he can rope off of,
he gets valuable more and morethat he learns, right.
So you may bought them for agrand, you might sell them at 10
.
Right, it's the same thing withus.
Right, can you learn how tounderwrite?
Can you learn how to propertylike asset man.
Like, if somebody wants to adda shiz ton of value right now to
operators, go learn assetmanagement.
(40:34):
How to manage a propertymanager, how to manage
construction, Like that is thenot sexy part of this business.
Go learn that and you'll add atremendous amount of value.
If you want co-GP, go learnasset management.
That's my last two cents.
Speaker 1 (40:50):
Yeah, I love it.
Well, thanks so much, Joe, forbeing on Again.
we're going to record anotherone, just because we have to,
because we need to dive into thebackstory of just your journey
and um, and how we kind of cameacross paths there and uh, and
share that with with ourlisteners.
Uh, I know it'll be impactful.
(41:10):
So again, I appreciate youjumping on listeners.
If you like this, please youknow, like it, share it with
others.
Um, and listen for us to comeback on here in the near future
with another episode with Joe,but with that, we will see you
guys next time.
Welcome back to the Multifamily Mindset Podcast.
I'm your host today, ZachRucker, and I am super, super
excited about our guest today.
This person that we have on hasbeen really was my first mentor
getting into real estate, soI'm super excited to share him
with all you listeners and getto know a little bit more about.
(00:29):
Even my journey into thisReally came from this person
that kind of helped me getstarted and showed me the ropes
a little bit, and with that it'sJoe RenderConnect is our guest
today.
Joe, thanks so much for takingthe time to jump on and share
your story with our listeners,and I'm just I'm super excited
(00:52):
because I love hearing whatyou're doing in your journey and
it's always inspiring me tokeep moving forward and keep
pushing and get out of mycomfort zone.
So thanks so much for jumpingon.
Speaker 2 (01:04):
Yeah, thanks, zach.
I appreciate it.
Those were some nice things hesaid.
I don't know if I was ever amentor.
I was on my own journey as well, so we were walking down that
path together.
Speaker 1 (01:16):
So that's right.
That's right, but that was thefun part about it.
Speaker 2 (01:19):
That's right, yeah, and it's really cool to see like
where kind of we started backin.
When was it Like 17?
Speaker 1 (01:28):
Yeah, back in 17.
Speaker 2 (01:29):
Going to school at USU together.
You were a part of the realestate club that I had started
and then we started getting moreinto looking at multifamily
deals together and got intoRenatus.
Right, it's an educationcompany.
It's been good it's been goodyeah, yeah.
Speaker 1 (01:50):
So tell the, tell listeners who's who's joe.
Speaker 2 (01:53):
Uh, who is joe for for all of our listeners, uh,
out there yeah, so for those ofyou who cannot see me, I wear a
cowboy hat it my MO it's who Iam through and through Grew up
farming and ranching in NorthernUtah, and so a lot of my values
in business and real estatecome from what I learned on the
(02:13):
ranch of you know, working hard,your word is your bond, you
know, and taking all those intoreal estate and making sure that
your, you know communication isgood with investors and you do
exactly what you say.
You know one thing we've likewe've won deals before because
we've called sellers out and belike hey, listen, we're going to
(02:35):
do everything that we've saidwe're going to do.
We expect you to hold your wordto us, and we've won deals
because we've called sellers outin that way.
Right, so really big on kind ofthose values.
And so fast forward to now I'mnot really I don't do a lot of
the farm and ranch stuff doingmore of my own little homestead,
if you will, as it's kind of abuzzword these days as Zach and
(02:59):
I talk about money minutes priorto this call or to the
recording, but now we're we'rereally focused on.
My focus is on essentially twodifferent things in the world of
real estate, mainly multifamilyright.
We are very focused on buyinglike 20 to a hundred units along
(03:20):
the Western front of the U?
S so Montana, idaho, utah alongthe western front of the US so
Montana, idaho, utah and we ownassets in all three of those
states and are just looking toexpand our portfolio.
Most of our stuff is smallerright, like we just bought a 54
unit in Missoula, montana, backin September.
(03:41):
Right now we're under contractto purchase a 48 unit in Boise
and so we were actually alsolooking at, we've been bidding
on some hundred 200 plus stuff.
But like our bread and butter ofwhat we know really well is in
that sub.
You know a hundred unit rangeand brokers are now reaching out
(04:02):
to my partner, levi Allen and Ibecause we have about a decade
under our belt of building thatcredibility right With brokers
that we can execute and do whatwe say we're going to do, get
deals done and we don't everretrade either.
So that's kind of one side ofwhat the business did.
(04:22):
We run and operate everythingthat we purchase here locally,
essentially in our backyard.
Everything in our backyard islike a four-hour drive.
It's crazy Like last Tuesday wehad our building inspection on
Boise.
I got up at like 4 am, drove toBoise, did the inspection for
six hours, drove back that night, was back home by 8 o'clock
(04:44):
that was a long day, that waslike
an hour round trip drive right,that's what we only like to get
on site quickly if needs be, andbe boots on the ground.
The other side of the businessthat I do is I have a fund as
well where we've mainly donemultifamily.
We will raise capital forothers deals.
We'll partner with people whoare really good at what they do.
(05:08):
They're vertically integratedand right now we're building
that into more of a assetagnostic cashflow fund.
So we've mainly donemultifamily.
We've done a couple of customhome builds we're looking at
right now some like venturecapital opportunities, some
(05:29):
businesses you know the otherkind of buzzword out there in
the world right now is kind ofyour trades and your
service-based businesses.
You know it's kind of theboomers right are at that age.
They don't want to be a plumber, they don't want to be an HVAC
guy, they don't want to be aplumber, they don't want to be
(05:52):
an hvac guy, they don't want tobe a landscaper, and so we're
looking at investing in, youknow, those kind of businesses
as well and really anything thatwe can get some pretty good
cash flow on.
Um, you know, we're reallylooking at because you know,
zach, as you know you're in themulti-family space too.
What we're kind of seeing rightnow in the market right is
either somebody's like alreadywhat they call like pregnant
multi-family, like they'veinvested so much in multi-family
, they're ready for somethingelse.
(06:13):
So that's where we like to kindof hit on what what those wants
and needs are from the fund,because a lot of the stuff we do
is high rate, uh, short-termstuff, but also, as we know,
people that invested in 2021,that at the top of the market,
like there's so much money tiedup in deals that they just don't
(06:35):
know like are they ever goingto get their money back?
Are they going to getdistribution again?
We just don't know.
And so we're we're trying tolike on our multifamily stuff
and, like the fund, think of,like what's happening in the
market, what are investorsexperiencing right now?
Today, investors areexperiencing their returns in
their Cushman Wake not Cushman,that's a brokerage the Charles
(06:57):
Schwab accounts, right, theirstocks are tanking right now.
Their stocks are tanking rightnow.
So looking at the whole scopeand figuring out how can we
pivot and, you know, provide agood service and investment
opportunity for our investors.
So that was kind of a quick onetoo, yeah.
Speaker 1 (07:19):
Yeah, that's awesome.
So kind of two sides of thebusiness not necessarily fully
all in on, just like that funinvesting into your deals, but
having that as investing intoother deals I think that's kind
of unique kind of situation thatyou don't see too often of
you're operating your own dealsbut then you're raising money
(07:41):
for other people's deals outsideof that.
I think that's a unique kind ofsetup that allows you to.
I think that's a that's reallya smart position, cause then you
get to see how these, theseoperators that are really good
at what they do, how well theyoperate, and you get to see a
little bit inside.
You know their, their businessand their organization and then
(08:05):
kind of bring that back to youryour business in a way right.
Speaker 2 (08:08):
That's totally true, yeah, and I actually.
Speaker 3 (08:11):
Hey everyone, clinton Orr here with iProtect
Insurance and Financial Services, we are thrilled to be
returning to peak partnershipthis year.
At iProtect, we specialize inmultifamily insurance and risk
management, helping investorsacross the country maximize
profitability for nearly 15years Through strategic risk
(08:32):
management and strong carrierrelationships, we make sure your
investments are protected andoptimized for an insurance quote
or insurance pricing per dooron a deal you're underwriting or
essential risk managementresources to help keep your
investment secure.
Visit our website, ratemaporg.
(08:54):
Let's connect and make yourproperty safer and more
profitable.
Speaker 2 (08:58):
looking forward to seeing you all at peak
partnership and I'll give acouple reasons why we've done
the fund of funds.
Uh, it's more than just thatbecause, yeah, lifting up the
hood of their operations,essentially, and seeing how they
do reporting and financials andk1s and you know all of the
inner workings with constructionand whatnot, like, yeah, you do
get to look at that, which issuper nice for an aspiring
(09:21):
operator who wants to becomevertically integrated right and
so like.
With the multi-family stuff wewon't work with, we won't deploy
capital with anybody who isn'tvertically integrated right,
because we want to save stuff.
Granted, like, there are acouple sponsors that, like
everybody trusts, who are, youknow, they have deals
foreclosing right now, but it'sjust, it's not necessarily their
(09:41):
fault, it's just the marketright.
But I started the fund back in22 and if we, you know, go back
to that time, I had bought a1951 24 plex in bergam city,
utah.
That was a massive, massiverenovation right, and that
(10:04):
property got to a point where,like I, my partners and I and
more specifically, myself, justcause I lived closest to it,
like I lived at that propertylike three to five days a week
and I wasn't getting paid, Idon't have a full, I didn't have
a job, or I just quit my job toto buy that property.
(10:24):
And, uh, you know, the, the,the the ship was sinking, and so
we had to show up every day tomake sure it didn't sink, kept
it above water.
So I started the fund because Iwas like one I'm sick and tired
of operations and I'm ready tojust trust somebody else with
money and money for me while Ideal with this.
(10:47):
And so that was one of thereasons why I was, like, really
started looking at, like how canI do more?
Like debt, right, because Idon't want to be an operator
like I'm already strapped.
And so that's where, like thefund to fund structure came into
play, where I could raise abunch of money for somebody
else's deal that was verticallyintegrated, great track record,
(11:08):
right, and be able to make moneyfrom that while I was focusing
on keeping this deal alive,right.
That was, you know, the firstthing, that was the first reason
why we did it.
But then also, I'm always kindof more of a long-term visionary
as well, like the whole beginwith the end in mind, and so,
(11:29):
again, I've always wanted tohave a vertically integrated
business, assets undermanagement, you know, and
understanding their operationsand getting paid to do it was
(11:49):
like, all right, this, this iscool, let's, let's run with this
.
Speaker 1 (11:53):
Yeah.
You know, yeah, that's sweet, Ilike that, like you.
Just, I came out of a necessitybut then also just grew into
this, um, you know,multi-purpose, full reason to
set up the fund and go the fundof funds and like for our
listeners.
You know, a lot of ourlisteners are new, trying to get
into to multifamily and getstarted and, uh, a lot of them
(12:17):
are trying to figure out thatpiece of okay, how do I, you
know, get into deals and whatare ways to do that?
And some are like, well, I'mgoing to raise capital for deals
and it's um, or I'm going totry to find the deal right.
There's, there's differentavenues to get there.
Um, I would say all aredifficult.
It's just a matter of which onedo you want to pick and dive
(12:40):
into it, right, but that fun offun models is is a good point
that you, you, you, bring out.
Can you explain a little bit?
Don't go into too depth.
We don't want to, like, confusepeople too much on that piece.
But, yeah, how do you, as a umowning that fund, get paid, uh,
to operate that when you, whenyou, get into deals?
Speaker 2 (13:01):
yeah, I can.
There's typically two differentways and all high level.
So we did.
The very first deal we did waswith Rise48.
They're based out of Phoenixand essentially, if you're a
retail investor, you have 50K toinvest with them.
They're going to give you a 7%70-30 split right.
And so I'm also part of anothercommunity called Avestor.
(13:23):
They are a fund administrator.
They're the ones that helped usset up the fund of funds, and
so it was their relationshipwith RISE48.
And so we were able to negotiateterms with RISE48 that if we
brought over $500,000 to thetable then we would get an
8-pref-80-20 split Right.
(13:43):
So we raised $71010 000 forthat first deal, and so we
brought in you know, I think itwas uh seven investors to raise
that 7 10 right, which each ofthem individually would have
only got the seven press 70 30split.
So what we did is we gave theinvestors the full eight percent
(14:05):
prep, but then on the back andmy team and I will get the 10
percent, uh, on the performancesplit.
So we we took a very small likeum fund manager fee it was like
one and a quarter points upfront for raising that money,
which is like it's like sevengrand or something which you
(14:26):
know that's not not a ton, butwe'll get paid a lot more on the
back end.
And so we, and then we're juststraight, strictly lps, right,
we bring one check to uh rise 48and then we manage all of our
investors on our back end.
Um, the other deal that we didin Ohio, we're more of a kind of
(14:48):
like a co-GP.
I'm not going to go into a lotof detail on that, because co-GP
is getting really hammered onright now by the SEC because you
cannot be compensated, right?
This is a pretty good disclaimerfor anybody that is looking to
get started in this and raisecapital.
Like, even though I have alegitimate 506c fund that you
(15:11):
know is a reg defiling throughthe sec, like even me, raising
capital for a deal that I don'thave other responsibilities in
is a violation of sec guidelines.
So you cannot take, like co-GPshares of a deal only for
raising money.
You have to have otherresponsibilities within that
(15:34):
deal, and so we do have otherresponsibilities with the Ohio
group.
Therefore, we were able to getthat co-GP shares.
But just so everybody knows,like, make sure you don't go and
try and get code gp shares actfee and all that just for
raising capital, because if youget caught it won't be pretty,
and so, even though we're anewer fund, like we want to be
(15:57):
100 sec compliant from day oneyou know, a lot of smaller
operators say, oh, we're small,we're not going to draw any
attention by the SEC.
You're correct, until you knowan event like now happens and
there's a lot of investors whoare suing, right, because the
(16:19):
inevitable, the worst casescenario is happening, right.
So now these small shops arenow being, you know, sec is
looking at them and askingquestions.
It's just better to cover yourbasis from day one and do it
right.
Speaker 1 (16:34):
Yeah, and I do want to like highlight that because I
know a lot of the new investorsin the multifamily mindset are
looking to focus on like raisingcapital and the big stress is
they want to get the GP shares,yeah, but oh no, we've both been
there, man, we have both beenthere, yeah, to focus on like
raising capital and the bigstress is they want to get the
gp shares.
Speaker 2 (16:49):
Yeah, but we've both been there, man, we have both
been there yeah, yeah, you want,you want that slice like.
Speaker 1 (16:55):
You want that slice of the pie.
But like I want to talk aboutthat benefit of setting that fun
up to get lp shares.
You know that still plays a bigbenefit right to the the fact
that you get.
You know a lot of people wantthe co-GP shares because they
want an inside look on a dealand they want to be a part of a
deal.
You can still get that rightfrom your LP share position
(17:18):
because you see it from thereporting standpoint, you still
have that relationship with theoperator.
So you can get some insidelooks and get to learn through
that process from the LP sideand you stay more compliant on
that deal and not worry so muchabout potential SEC issues in
(17:39):
the future.
You kind of keep yourself saferright.
Speaker 2 (17:43):
Yeah, the biggest difference right is you don't
have any decision-making and,truthfully, no sponsor is going
to give you any decision making.
If you're just getting started,like I've been in it 10 years
and like I don't want to haveany decision making
responsibility on rise 48, likethey're they're two billion
dollar aum, right like let themrun it value, but like I'd
(18:04):
rather just stay on the lp andstay in my lane, you know.
And the other thing, too thatI'll mention is that because
I've talked to a couple of yourstudents and I know that one
thing that you guys teach is tostay in a couple of different
markets, get to know the marketand that's why we're so focused
on Montana, idaho and Utah Is wefeel like we have an advantage.
(18:25):
I feel like that.
What you say, like we have anadvantage, I feel like in this
market because we invest andoperate, but like I wanted to
understand Texas and I want tounderstand Ohio and I want to
understand the metrics there,but I don't have to know it
fully to invest there, right?
So that's the nice thing aboutthe fund is like I can get in
(18:46):
deals outside of my core marketsthrough the fund and get to
understand those metrics so thatin the future, if I want to
expand, I have, you know, reallygood relationships with those
sponsors that I can partner with.
Now.
Speaker 1 (19:01):
Yeah.
Speaker 2 (19:01):
No.
Speaker 1 (19:03):
I love that.
I love that because you'reright, like it's what we, what I
stress to the students is yes,stick to what you know.
And if one of you you don'twant to invest where, you're
right, like it's the what we,what I stress to the students,
is yes, stick to what you know.
And if one of you you don'twant to invest where you're at,
maybe you're in California andso you have to.
You're kind of forced to lookoutside.
Okay, pick one market, startthere, get to really know it.
But once you do that, yeah,feel free to expand.
But use, utilize resources.
(19:25):
And so you, you did that.
You utilize a resource.
You know a sponsor, veryexperienced sponsor, vertically
integrated and invested withthem from an LP standpoint, uh,
with your fund.
Or even gotten to the GP shares, uh, outside of your normal
markets, to learn that market.
I think that's.
(19:45):
I think that's excellent adviceto take and to have the
opportunity to learn, becauseit's a lot of work.
It's a lot of work to learn anew market and the ins and outs
of it and to even get a um, youdon't really you're at a loss,
right?
You don't have that competitiveadvantage when you're not local
to that market and I mean I seethat struggle because you know
(20:05):
my group we look at outside ofof.
I mean we want to look intoutah in idaho but uh, yeah, I
mean you understand thestruggles a little bit of that
looking here locally and justthe you know how pricey it is.
So we kind of force ourselvesto look outside as well and look
into different markets.
Um, yeah, the not being bootson the ground piece, you know,
(20:25):
does hurt that and that'ssomething you just got to
consider with that.
So I mean that's a great point.
I love how you highlighted theinvestment side of it.
The LP piece is another benefitto utilizing that to get into
other markets.
Speaker 2 (20:40):
Yeah, or just find a team like you have, right, zach,
and add value to anothersponsor and, you know, makes it
easier for you to get into thoseother markets, that's right,
yeah and yeah they're completely, you know, right on with like
utah and idaho it's they'reexpensive and it's not as cash
flow heavy as some of these youknow, the sunbelt states and
(21:01):
whatnot but I can tell you likeour appreciation is pretty dang
good and like there's a lot ofbenefits to investing here
locally if you can make thenumbers work.
So, yeah, one thing I'd like tomention to Zach, like for all
your listeners, because you'vementioned something like a lot
of people, like in your program,are trying to figure out like
(21:24):
how do they fit in, like how canthey get into a deal?
Do they raise the money, dothey do they find the deal?
You know something that reallyhelped me from getting started
and you you'll probably rememberthis is something that we
learned from.
Renatus is and and I've kind oftaken it how they taught it to
how I like to interpret it butthere's essentially five things
(21:45):
you need to get a deal doneright and I'll quickly go
through those.
So there's these five thingsyou need to get a deal done
right and I'll quickly gothrough those.
So there's these five thingsright, the broad, broad things
that if you can bring one or twoof the five things, you can
typically get a deal done.
You can find if you can bringone or two.
You don't have to have all five.
Find somebody who have theother three or four.
(22:05):
This is really good for abeginner to understand, because
as we get into this we're likeokay, I want to buy that 20 unit
, okay, but that 20 unit is 200ka unit, so it's a four million
dollar deal and I gotta go signon the loan.
I've got to bring you know what, 30 right now, so 600 000 plus
(22:30):
acquisition fee.
So I got to bring a million,roughly, you know, got to have
the credit to get the loan.
But I don't know any propertymanagers and I've never done
this before.
And then you get all in yourhead analysis, paralysis, hits
you and then you don't do itRight.
So essentially those fivethings which are what I just
said in that little scenario isone is time Time to go out, find
(22:52):
the deal to hustle Right.
Number two is knowledge.
Have you done this before?
How to underwrite right.
Construction Like that's what'sreally helped me is like I have
a background in construction,so that's really helped as well.
So what knowledge do you haveto add value to a team
Relationships right?
That can be with propertymanagers, lenders, brokers,
(23:16):
insurance, legal all the thingsyou need the whole team that you
need right.
Number four is credit orcredibility right, because the
lender is going to look at both.
They want to know your creditscore If you can get it even a
not even a recourse loan right.
Your credit, like on one of thelast deals that I did, my
credit went to crap because ofthat deal in Utah so I didn't
(23:39):
get to sign on the loan.
So therefore I didn't get asmuch of the deal because my
credit was crap, but I had apartner who did have it Right.
So, credibility they want tosee how much experience do you
have.
So, in the more experience youcan put into a team, the better.
Technically, your rate is right, you can get blender.
And then number five is moneyright.
So if you can bring one of theone of the five, one to two of
(24:02):
the five, so time, knowledge,relationships, credit,
credibility or money to thetable like you can assemble
essentially the other three orfour needed to get a deal done
right.
And the biggest thing too, isthat I fell into this a lot um,
never do a deal just to do adeal and keep an abundance
(24:24):
mindset when building a team.
There was a kid that you willprobably remember, zach, when we
were going to college.
I will not say his name, butlike he was, he was not team
focused, he was all me, me, me,me, me and you know, like he did
a lot of deals, but like he wasone of those guys and and
everybody has their own path.
Like I don't ever want to be aself-made millionaire, I want to
(24:46):
be a team-made millionaire.
So have a loving mindset aboutthat, find that team to share.
You know that $100,000 act feewith, or whatever it may be
right Because you can go further, faster with more individuals.
So I hope that helps.
You know, some of the listenerskind of give them.
Like you know, I was talking toa cousin the other day and it
(25:09):
was like he lives in a smalltown, knows a lot of people,
like knows everybody.
I was like dude, you should gobuy some apartments.
He's like we don't have thatkind of money.
I was like guess what, I'mbuying this deal in boise and
I'm probably putting 30 grandinto it.
Like I don't need to have thatwhole 2.85 million that I need
to raise in my pocket to go doit.
Like I have the people, I havethe money connections right, I'm
(25:32):
raising, I know how to raisemoney, yeah.
Speaker 1 (25:36):
It's being resourceful right.
Speaker 2 (25:38):
Yeah, resourceful yeah.
Speaker 1 (25:42):
And then have that abundance mindset to to want to
partner with people and and youknow I've jumped on calls going
over deals and people want, youknow, my team to sponsor it.
And then we start talking aboutGP percentage and you know the
it's all in negotiation but they, they, they fight for more and
more because they want thishigher percentage and it's well,
let's, let's go over the thingsthat you're actually bringing
(26:03):
to the table and where you landon that.
You've never done a deal beforetable.
And where you land on thatyou've never done a deal before.
You don't have the experience.
You can sign on the loanbecause maybe you do have a net
worth that you can bring to thetable Awesome but you don't have
the experience that the lenderrequires and you've never
operated a deal.
So see where, like, yes, you getvalue, so you get to be part of
(26:26):
the deal, but don't try tofight for a ton of that, because
you are coming in to learn thatand it's about sharing, right,
yeah, and as a as a sponsor,you're not trying to be greedy
and say, well, no, I'm takingthe whole deal, it's.
There's a lot of work that Ithink a lot of people don't
realize that goes into it, right, Like you said, like you're in
(26:46):
your brigham city deal, likeyou're there three to four days
out of the week because of it.
Speaker 2 (26:51):
Just it took a lot more than I'm assuming you guys
expected, right oh yeah, it wasway heavier of a renovation than
we ever expected and and Ithink that came with
inexperience too we thought wehad enough construction
experience on the team, thoughtwe had budgeted enough money and
I mean there were it's a 1951build man, like there's gonna be
(27:15):
skeletons behind the closet.
We just didn't account for youknow, like we, we budgeted
literally like and I'm okaytalking about this, I'd rather
be fully transparent about myexperience than be like you know
, because there's people whohave lost money on deals and
they're not going to talk aboutbecause it taints their
reputation.
They feel like it taints, butfor me I'm like I want to be as
raw as possible.
(27:35):
I want you to know that webudgeted a million and a half.
Dude.
We paid a little over threemillion in renovations.
Wow bought that deal for twomillion and we put three million
into it.
And most people will be like,wow, you bought it for two and
you sold it for six and aquarter.
Yeah, isn't it great?
And everybody's like, oh mygosh, you made so much money,
(27:57):
but like, but, that's, that's no.
Like we put three million intoit and then investor equity was
a million and a quarter.
We broke even, man, when wesold that deal in september of
this last year.
We were able to give ourinvestors 100 return of capital,
which was still a win, becausewe know guys who you know only
given 50 back or it's a totalwash right, where was I going on
(28:22):
with that?
Um, where are we going withthat?
Uh, zach, I At the beginning ofwhere that was going.
Speaker 1 (28:32):
Just the inexperience sometimes, or the yeah, not
actually being prepared or notknowing what, potentially all
the work that goes into a deal.
Speaker 2 (28:44):
Yeah, that's right, that's right yeah.
Speaker 1 (28:47):
I mean, yeah, I mean thanks for sharing that and that
I mean I remember talking toyou about that deal last year at
some point and you're just like, yeah, we just we need to
offload this and just, you know,call it a win that we got our
investors capital back and moveon to the next one and we
learned a ton from this.
Right, I mean it's a hugelearning experience, for sure
(29:11):
that you could take from thatand and operate better on the
next opportunity.
And, yeah, definitely a winthat you kept investors capital
during a time that a lot ofpeople haven't been able to do
that with with some deals lately, for sure.
Speaker 2 (29:23):
Um, so, yeah, it's all a learning experience every
deal it is and I think there's agood lesson there too for new,
new people getting into this isthat, like the reason we were
able to give her a hundredpercent return of capital is
because we showed up every day.
You know it would have beenreally easy to let that deal go
to bankruptcy and to forecloseand just be like dang it.
(29:46):
Sorry guys, dang it didn't workout.
But like I had family money inthat deal you know I had money
tied up in that deal and like wedid have to do a capital call.
But even on deals that aretough like this like one of the
investors has now invested withme twice since that deal, even
(30:06):
though it didn't go as planned,it went bad.
Like he's invested asignificant amount of money with
me twice since that deal, eventhough it didn't go as planned,
it went bad.
Like he's invested asignificant amount of money with
me just because of that trustthat we were able to build as we
were going through the crapyeah you know, yeah, the
transparency, right, thetransparency that I'm sure you
communicated with your investors.
Speaker 1 (30:24):
Uh, going through all that.
Speaker 2 (30:26):
Yeah, that's right, that's right.
Speaker 1 (30:34):
Well, I mean, sorry, go ahead, go for it.
I was just gonna say there, Imean, there's just so many
learning lessons, um, that youshared and it's it's been really
uh, you know, interesting tolearn about your experiences and
what you've been able to sharewith our listeners.
And, um, I know, I definitelywant to have you come back on on
the on the show again we canrerecord some more of just like
your journey.
Right, we didn't even dive intothat, we just dove right into
(30:56):
the multifamily aspect, cause wecause we're just we're, we love
it so much.
But, um, I think we'll doanother episode sharing your
journey, your story, cause Ithink you have such a special
story that will really impactour listeners.
And you know, I mean, yourstory impacted me too in getting
(31:18):
to where I'm at, and we didn'teven dive into that, which is
okay, because I think we covereda lot for our listeners, but
there's so much more behind, Ithink, our conversation that we
could have for sure.
Speaker 2 (31:27):
Cliffhanger.
Speaker 1 (31:28):
Yep, cliffhanger for sure.
Yeah, we'll have another one inthe coming months, but I do end
with three questions.
I call them the think biggerquestions, so I want to dive
into those, just with our timehere.
The first one is how do youchoose to think bigger?
Speaker 2 (31:46):
How do I choose to think bigger?
That's an interesting question.
How do I choose to think bigger?
How do I choose to think bigger?
That's an interesting question.
How do I choose to think bigger?
I and again kind of like whatwe've talked about a little bit
earlier.
I've always been kind of along-term visionary, and so I
would first tell you to read thebook the Magic of Thinking Big.
(32:08):
It's a great place to start.
Speaker 1 (32:09):
There you go yeah.
Speaker 2 (32:10):
I would choose that.
But I've always had the mindsetlike even when Zach first met
me I was doing small,multifamily, duplex, fourplex
stuff.
No-transcript, I know.
(32:50):
I'm driving a semi right now.
But I think, and then that's.
I think that's a good answer tothe question like how do I
choose to?
You know, think bigger is itstarts today.
And looking at where you wantto be 10, 15 years, and
believing that you can do it.
Right, like joe biden canbecome president.
Like why can't you be amulti-millionaire?
(33:11):
Right, I should throw politicalstuff out there.
But if somebody has done whatyou want to do, why can't you?
Speaker 1 (33:21):
Yeah, yep, exactly.
Speaker 2 (33:24):
The magic of thinking big.
Speaker 1 (33:29):
Yeah, that's perfect.
I love that.
I love that answer.
No, it's great.
I mean, I just knowing you, Ijust know you've always thought
bigger too.
I think that's a big piece, youknow, especially the
multifamily mindset um relates alot to just, I think you and I
and in that realm of we lovereal estate, but then mindset
has also played a huge factor inthat, right, uh, just spending
(33:53):
that time, that money and goingin and really developing our
mindset, and I think that'spushed the limits to thinking
bigger.
And now it's, you know, I thinkthat question is it's it really
comes easy to you, to whatyou're thinking, because I know
you, you are thinking of thesebigger things in the future.
Uh, because it's more naturalto you now, right?
Speaker 2 (34:15):
natural.
It still gets tough like that.
Thinking bigger is alwaysevolving too, you, you, know how
do I take down a 250 unit andcome up with 500,000 of earnest
money, Like that was theconversation today.
I'm like I don't freaking know.
Speaker 1 (34:31):
Yeah.
Speaker 2 (34:31):
We'll figure it out.
Speaker 1 (34:33):
We'll figure it out.
That's right, we'll figure itout.
Speaker 2 (34:35):
One thing I'll say like multifamily mindset.
Right, that's the company name.
I would say nothing else mattersif you don't have the mindset
yeah, right at the end of theday, like we're on the reason
we're on this journey, thereason to even make money, like
money doesn't make sense.
It doesn't matter if you're nottrying to become a better
version of yourself and thatcomes from mindset and like I've
(34:57):
been.
My son just got done wrestlingand what we found like really
helped with him at eight yearsold.
You know wrestling tough kidsis like who are you wrestling
today?
It doesn't matter who the kidis, what his name is, you're
wrestling yourself.
Who are you competing againsttoday?
Yourself?
You know it doesn't matter whoor what or what the situation is
(35:19):
.
Anyway, on to question two.
Sorry.
Speaker 1 (35:21):
Yeah, no, and that kind of goes into question.
Speaker 2 (35:24):
Two the second question is how do you define
success?
I think a lot of people wouldsay, like buy money in the bank
and asset center management andthe multifamily Sure, that is a
KPI Sure that you can track,that is a KPI sure that you can
(35:45):
track.
Um, like I look at myself of whoI am today versus who I was,
you know, in 17 and you know I'mliving what I prayed for back
then.
You know I'm living that dreamright now and so I think that's
a great way to define success.
And just being very gratefulwith where your current
situation is, that, even if it'skind of a sad path or a sad
(36:09):
kind of world you're living inright now.
Like be grateful for thatbecause got kicked in the face
and you know I was busted up andwheelchair bound and those were
tough times even you know, inthe moment.
But looking back, like you know, persevering through the tough
(36:35):
and becoming who you want tobecome, is a great definition of
success.
You want to become is a greatdefinition of success because
have you ever heard, uh, likethe epitome of hell is when you
get to heaven, you look at whoyou could have become yeah right
.
You're not looking at themansion, you're not looking at
the bentley, you're not lookingat the money, like all of those
(36:57):
things amplify who you alreadyare.
Yeah, I love that, so we justgot to remember that because we
can get so tied up, like ifwe're paycheck to paycheck and
you know I've definitely beenthere Like you got to keep that
vision of who you're wanting tobecome, because just focusing
and chasing the money when youchase money it runs away from
you.
Speaker 1 (37:18):
Yeah, there you go.
I love that.
I love that.
That's perfect.
Last question is what is yourbest advice you can give a new
multifamily investor, Someonethat's trying to get into this
and be an operator?
What's your best advice you cangive them?
Speaker 2 (37:35):
Yeah, I would definitely follow those.
The five things you need to doa deal, do a self-analysis, find
your strengths and find peoplewho complement your weaknesses.
And the last thing that I'llsay which is you probably be for
the next episode is I took apause from buying any apartments
from like 2018 to 21 because Iwent to work for people who are
(37:58):
doing what I already wanted todo.
Right, I went and worked for acommercial property management
company to learn that side ofthe business.
And then I went and worked fora couple operators around the
country learning how to finddeals, underwrite you know, do
due diligence all the way todispo the full cycle of the deal
.
So, find that person.
That and, mind you, when I didthe property management is a lot
(38:22):
is a an 80 unit LIHTC section24 only got paid 20 a year.
Right, it's nothing.
I did it for the experience.
Find somebody doing what youwant to do and go.
You know if you can do it forfree and go.
You know if you can do it forfree, go.
(38:42):
Add value to that person andand and.
That that has paid me more thanthe financial that I, you know
from the financial gain.
You know I've always had thatmindset Cause I did that as a
kid, training horses.
You know, like I was going tobe a big horse trainer one day
and I went and mucked out stallsand rode colts to learn how to
(39:03):
be a performance horse trainer.
Speaker 1 (39:05):
Yeah, yeah, honestly I would say it's not necessarily
the easiest, but it isdefinitely a way to learn is to
follow the people that are doingit.
Like we said, follow thosepeople and learn from them.
I have a very similar kind of apiece there that I've kind of
(39:27):
followed.
I think follow a little bit ofthat journey there of just learn
from others, and that's whetheryou're doing it for free or
very cheap or you even pay themto teach you a little bit and
give a little bit of their timeto learn the ropes a little bit
faster, and to them to teach youa little bit and give a little
bit of their time to learn theropes a little bit faster and to
get to where you want to go.
Sometimes you take that risk.
Speaker 2 (39:50):
And then full circle to the beginning of the
conversation.
The more knowledge you gainlike you want that co-GP, great,
go get the freaking knowledgeyou know.
I'll tell you a quick lastthing that my grandpa always
taught me growing up and it'stranslated into real estate when
you have a brand new cult thatyou're training into that
performance horse, like, everytime you learn something new.
(40:13):
He can jump a ditch, he canfence a cow, he can rope off of,
he gets valuable more and morethat he learns, right.
So you may bought them for agrand, you might sell them at 10
.
Right, it's the same thing withus.
Right, can you learn how tounderwrite?
Can you learn how to propertylike asset man.
Like, if somebody wants to adda shiz ton of value right now to
operators, go learn assetmanagement.
(40:34):
How to manage a propertymanager, how to manage
construction, Like that is thenot sexy part of this business.
Go learn that and you'll add atremendous amount of value.
If you want co-GP, go learnasset management.
That's my last two cents.
Speaker 1 (40:50):
Yeah, I love it.
Well, thanks so much, Joe, forbeing on Again.
we're going to record anotherone, just because we have to,
because we need to dive into thebackstory of just your journey
and um, and how we kind of cameacross paths there and uh, and
share that with with ourlisteners.
Uh, I know it'll be impactful.
(41:10):
So again, I appreciate youjumping on listeners.
If you like this, please youknow, like it, share it with
others.
Um, and listen for us to comeback on here in the near future
with another episode with Joe,but with that, we will see you
guys next time.
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