In this episode of the Multifamily Real Estate Experiment Podcast, host Shelon Hutchinson, also known as Hutch the Marine Investor, welcomes Randy Langenderfer, founder and president of Invest Ark Property.
Randy shares his extensive experience in multifamily real estate investing, with over 1200 doors and $350 million in assets under management.
They discuss Randy's journey from a CPA and Chief Compliance Audit Officer to a successful real estate investor and coach. Key topics include the importance of modeling successful strategies, overcoming analysis paralysis, and the significance of relationship building and asset management in real estate investing. Randy also provides valuable advice for both new and seasoned investors on mitigating risks and achieving long-term financial growth through multifamily investments.
00:00 Introduction and Guest Welcome
02:38 Randy's Background and Journey
04:30 Overcoming Investment Fears
07:06 The Importance of Real Estate in Portfolios
10:33 Evaluating Markets and Sponsors
13:43 Focusing on Fundamentals
17:29 Common Mistakes in Multifamily Investing
18:41 The Importance of Property Management
19:22 Leadership vs. Management in Real Estate
21:52 Coaching Passive Investors
23:37 Building a Long-Term Investment Strategy
25:12 The Military Veterans Blueprint
27:37 Future Strategies for Investor Arc
30:44 The Focus Round: Personal Insights and Tips
34:40 Conclusion and Contact Information
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Thank you to all of our listeners!!! We would love to hear from you!!!
Email me at:
hutch@hsquaredcapital.com
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Visit our website to find out more:
www.hsquaredcapital.com
Join our Facebook Group:
The Multifamily Real Estate Experiment
Follow us on Instagram:
@hutchthemarineinvestor
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Wah Gwan all you multifamilyenthusiast.
Welcome to another episode ofthe Multifamily Real Estate
Experiment Podcast.
Now, I'm your host, ShalonHutchinson, and if you connect
with me in real estate, you knowme as Hutch, the Marine
Investor.
today we have an importantguest.
Randy the founder and presidentof Invest Hark Property.
He's a general partner in over1200 doors and$350 million in
(00:25):
asset on the management.
He's invested in over 4,000multifamily units across, Texas,
Oklahoma, Arizona, SouthCarolina, and Louisiana.
CPA and a former ChiefCompliance Audit Officer, Randy
now helps busy professionalsbuild wealth passively and
safely, A CPA and a former ChiefCompliance and audit officer,
(00:49):
Randy now helps professionals tobuild wealth passively through
multifamily real estateinvesting.
He is, is not just doing deals,he's also coaching others and
helping them get on the rightpath to creating good long-term,
financial growth.
Randy, welcome to the show.
Hutch Thanks so much.
It's really a pleasure to be onyour show this morning.
(01:11):
Wish I was with you in Hawaii.
it's beautiful weather outside,but the sun ain't coming up yet,
It rains about five minutesevery day, especially on the
Kaneohe Bay side and then thesun peaks back out.
So, Randy, before we get intoit, do you have a favorite real
estate quote or mantra thatdrives you?
Really simple.
90% of all millionaires becomeso through owning real estate,
(01:31):
Andrew, Carnegie, old schoolguy, Man, somebody once told me,
just follow the playbook, Randy.
You don't have to be original.
Okay.
So funny you say that because Idid a LinkedIn post recently
about, how a lot of us compareour lifestyle to others.
And that comparison could bevery debilitating.
(01:52):
Sometimes when people look atanother person's step 98 and
comparing that, comparing thatwith their step two, you know
what I mean?
That could be very debilitatingsometimes.
However, to your point, thereare a selective few of us,
right, who understands that wecan mirror what works, right?
(02:14):
It's not necessarily plagiarismor copy.
We just, we just model notmirror.
We model what works, right?
It's from, to your point, this,follow the playbook.
So I, I was at a conference onceand the speaker said.
Guys, let me talk to every guyin the audience.
I know how you're thinking.
you're thinking you can do thisbetter.
You can adjust it and tweak it.
and he said, just follow theplaybook.
(02:37):
Yes.
So.
let's dive into that Randy, canyou tell us a little bit about
your story that I did not coverin your bio and your main focus
right now?
Randy Langenderfe I reside inHouston, Texas.
about, 12 years ago, I gotstarted on the journey of trying
to find another income source.
Gotcha.
I was working for a privateequity firm in the great state
(02:58):
of Ohio, I was an executive andhad a pretty good number on my
back For cost reduction and Ithought I was going to, get
eliminated, not because of anyperformance issues, just because
cost reductions.
And at that time I kind of had awake up call or the aha moment.
Wow, you really need to findsomething more, to feed your
family with.
Yeah.
So I started looking at a lot ofdifferent things.
(03:19):
I ended up starting to be a hardmoney lender in a single family
space.
Did that with fix and flips fora while.
I came to Houston, Texas when Igot another job and I started to
learn, about multifamily byattending a local real estate
conference, I learned that youcan buy multimillion dollar
assets on non-recourse debt.
So I didn't have to signpersonally on anything, which
(03:42):
was important to me.
I didn't wanna sacrifice any ofthat.
I started an intentional coursein my own mind to.
Exit the corporate world.
I wanted to work late into life,and I still do.
I did that 10 years ago.
And while on a W2 job, I gotinto several different, LP
(04:02):
investments and then GPinvestments.
And as you said, today, I sithere doing this full time as
well as coaching syndication andcoaching.
And, I'm really enjoying life.
Yeah, I appreciate that, man.
what a journey, with yourbackground as a, chief
compliance officer and, an auditofficer, at a large academic
institution, I.
(04:22):
can understand the inspirationto go towards real estate
investment because youunderstand how the numbers work,
right?
here's one of the things I wantto ask you, man.
Especially being a coach andyour experience, you know, many
professionals that really wantto invest.
But what happened is that.
A lot of folks are risk averse,especially in my background, as
military folks, they spend 15,20 years saving a nice nest egg.
(04:47):
the military doesn't pay us alot of money.
There's a lot of benefits, butwe don't get, we don't get a big
paychecks.
So to spend, you know, 15, 20years, you know, save seven,
five to$150,000.
Right.
You know, so when it's time toput that bulk of money into an,
into maybe one or a coupleinvestment, it's very
challenging for them to to letgo.
(05:07):
Right.
So a lot of them are risk averseand get overwhelmed.
Now, what would be your message,to high earning professionals
who are stuck on the sidelines?
That's a great one, Hutch.
you know, I've been there too.
education wise, I'm a financeperson at heart and so, right.
I'm pretty risk adverse myself.
Like you said, I had grown whereI had to some assets that I
(05:29):
didn't wanna lose.
That's why I got an Nonrecoursedebt, let me summarize by
quoting my mentor, Rod Khleiftake massive action.
So.
And I, I start with that sayingmy own journey was my first LP
investment.
I remember I did it with afriend'cause I wanted to
mitigate risk.
we formed a separate LLC toinvest in an apartment complex.
(05:50):
there are ways to get around it.
you can do that, you can do aself-directed IRAs, which is the
subject of another whole story.
Yeah.
and that's the way I startedusing the self-directed IRA
'cause I didn't have spendablecash, Analysis paralysis.
my profession, financeaccounting, and I talk to a lot
of IT professionals, a lot ofengineering professionals that
(06:11):
are also very analyticallyminded I think suffer from
analysis paralysis.
So I don't know if you've everheard the, old illustration,
ready, aim, fire.
So I am a ready, aim, aim, aim.
And then finally, fire.
My marketing friends are fire,aim, and then ready.
(06:32):
So, and I remember those that,that mindset drive me crazy.
Especially as, as a marine,right?
Because, every, marine is arifle man, right?
And that's one of the things weget taught.
Good side alignment, sidepicture.
You identify the target right?
Sometimes the target's kind ofblurry.
You put your front side pitcher,and your right side aperture
onto that target, and then youfire.
(06:52):
So you have good side alignment,side pitcher, and then you fire.
So that fire ready, aim concept,right?
I understand the thought processof massive action, but trying to
compete that into a Marine'shead.
doesn't jive sometimes.
I talk to a lot of high networth individuals I came from a
large academic medicalinstitution that had a 1.5
billion.
(07:12):
endowment, and when I leftthere, they had anywheres from
eight to 12% of their portfolioin real estate.
Gotcha.
It may not have beenmultifamily, but it was in real
estate.
I tell people, marine friends Toincrease your returns overall on
your portfolio, you need to havesome of that real estate in
there.
(07:33):
If it's good enough for the bigboys, it's good enough for you
on an individual basis, and youcan get started by doing it with
a friend or using an S-D-I-R-Aor buying somebody that lets you
in for less than the 50 Kminimum.
Just do it.
just do it.
you can analyze this untilyou're blue in the face.
That doesn't mean you shouldtake, unlimited risk.
(07:56):
Get to know sponsors, peoplethat are doing deals, people
that you can know, like, andtrust.
find somebody, myself, yourself.
There are many out there that dowhat we do.
Get to know them and ask themquestions.
One of the things I reallyappreciate about this real
estate environment is that a lotof folks are like core
competitors, Where we're sowilling to share information
(08:17):
because this is really goodinformation that is that
elevates people's life.
I think you probably attest tothis, right, Randy, especially
living in Houston.
Houston is a big city andthere's a lot of greatness going
on in Houston.
But also in every city, I havelittle pockets of, areas that
are not doing so well.
I was born and raised inJamaica.
Right.
And some of the places that I'velived in Jamaican, some of the
(08:39):
places that I've traveled insideof the United States, what I've
noticed is that, poverty, breedsmore crime and a lot of other
things that comes with it,right?
And the more we can elevateourself to, you know, changing
our relationship with money,understanding how money works,
understanding how we can,leverage the experience of
others.
(08:59):
Right to act, to improve ourfinancial trajectory and the
quality of life we provide forour family.
Then the more we can maybe noteliminate, but reduce the
poverty in our communities.
And once we start improving.
reducing the poverty level, thenwe give people good quality of
life, right?
And I think the country and of awhole becomes better, you know,
(09:22):
so I think it's one of thethings I really appreciate about
it, especially the multifamilyspace, is that everyone is
really willing to shareinformation to help most people
who is wanting to get theinformation and also take action
to elevate their life.
What do you think about that?
Oh man, I couldn't agree withyou more.
first of all, it's so cool.
That you have identified, andthere's so many people that
(09:44):
start out to get rich quick.
It's not a get rich quick, it'sa get rich, slow, steady.
but you have a higher purposethan just making money.
I think those are the mostsuccessful I've lost money in
the stock market.
and other places, You're notbatting a thousand all the time
in multi-family, but in the gameover a long period of time.
I share with you, I think ahigher purpose.
(10:05):
I wanna say I'm a person offaith and one day I hope the
majority of my assets get someaway to charitable
organizations, rather than, youknow, squandering them on a
yacht or something like that Sonot squandering them, that's
just.
Everybody's different.
I understand somebody's got ayacht.
One of my best friends has ayacht.
but anyhow, it's not me.
You know, so, you've invested inover 4,000, units, across five
(10:28):
states, which, which is amazing.
You do that, an active and apassive real estate investor.
Right.
what is your key to evaluatingthe market and operator,
especially when a deal is notlocal to you in Houston?
You're a savvy investor, Hutch,I get, well, I, I think my
advice would be to the personstarting out right?
Would be first, pick a couple ofmarkets.
(10:50):
it's the shiny object syndrome.
As a new investor, yes.
I get an email that says, oh,20% IRR in, I dunno, Topeka,
Kansas, or a 30% IRR in Toledo,Ohio.
I look in the Sunbelt.
I prefer Texas, South Carolina,and Arizona.
Those are three markets.
(11:11):
if somebody sends me somethingin Topeka or Toledo, thank you
very much.
Unless I know them really well.
The second one is before youeven know the market, you really
gotta know the individual who'sputting the deal together.
Hutch, have you ever heard of asponsor saying, I underwrite
deals very aggressively.
yeah, I've seen people thatunderwrite what I would call
(11:32):
aggressively, but I've neverheard anyone say, everybody says
we underwrite very conservative,conservatively.
And so my point of it is, is oneman's conservative is another
man's aggressive.
Correct.
and part of your education, makesure that as an investor.
You really get, first you get toknow the sponsorship team.
Where are they focused at?
What type of units, whatgeographic locations, what
(11:56):
relationships do they have withproperty management companies,
otherwise it's, a universeversus a narrow scope of
potential investmentopportunities.
Gotcha.
So, to your point that that canserve a lot of folks focus on
conservative, underwriting.
Right.
But a lot of those, you can makethose numbers do whatever you
want.
And I think to, to your point,identifying somebody who has a
(12:19):
track record, that they havedemonstrated and they can show
you because most things areverifiable, right.
Yeah.
Most things not, I was justgonna, I was just gonna say
verifiable, you know?
Yeah.
it's a big country, but it's asmall space we're in, if
somebody asks me to find outabout Hutch, I bet I can find
out about Hutch's record or his,his morals and his character
(12:40):
pretty easy by just pinging fiveor six people in the industry.
And you could probably do thesame with me or others.
Yes, sir.
So you can't hide.
That's the point.
I think track record is reallyimportant, but I also think your
investment community out there,when I first started, if
somebody had a bad deal, thatwas an automatic red flag and
stopped the conversation, right?
Today's world, I'm not so sure.
(13:02):
I, I would say it's a yellowflag of caution.
to think about and really digdeeper, there are a lot of great
operators I know.
good operators who regrettablyhave lost a property in the last
18 months Because of the marketconditions.
be aware.
to your point, it does happen,right?
There's so many things thathappened in previous years that
(13:22):
a lot of folks could not havereally predicted, and there's
still a bit of uncertainty, Inthe market, the operators who
are investing with goodfundamentals and not
underwriting aggressively basedon some uncontrollable
expectations, is important.
I appreciate, you covering, theanswer that question.
(13:43):
Now your strategy emphasizing,you know, safety and time tested
approaches and, I wanna talkabout this for a little bit,
right?
In the environments where, youmentioned this earlier.
People, are chasing shinyobjects, like short term rental
or, cryptocurrency.
How do you keep investorsfocused on the fundamentals in
(14:04):
your education platform andcoaching?
Yeah, I think, you're absolutelyright because there's so many
investment opportunities outthere today.
People get attracted so manydifferent ways.
I would say when I talk topeople, I don't have any
problems with self storage.
mobile home parks, crypto, youname any other asset class.
I just don't know anything about'em.
(14:25):
So I don't invest in'em, period.
And it's not that I have anyproblems with'em, I've just, I.
Wanna become proficient in oneasset class.
and I don't consider myselfproficient yet.
So I think getting peoplefocused on the value of real
estate, right?
very simply, getting yourpotential investors and, you
know, simply one, positive cashflow.
(14:46):
Two, favorable tax treatment.
Three.
Forced appreciation.
You know, when I got my headaround, we can increase the
value of this property byraising the net operating
income, either raising rents ordecreasing expenses or both.
and they're paying down yourmortgage And finally, I was
talking to a potential investoryesterday.
(15:07):
He said, why don't you dohotels?
That's another asset class.
But I said.
Everybody needs someplace tolive.
They don't always vacation andneed a hotel.
I consider multifamily moresecure than even that.
That's not to say you can fileit, probably find a good
operator out there in hotels,but Right.
(15:29):
I just don't know of any.
And.
Don't spend my time on it.
So take away focus on gettingreally proficient in one asset
class first, and, then branchingout and getting proficient on
finding sponsors that, you know,like, and trust.
Right?
Yeah.
And these sponsors doesn't haveto be, I know a lot of folks,
especially if they have a nicenest egg, whether it be their
(15:51):
today money, money in theirchecking accounts or their
self-directed IRA, they don'tneed more than two to maybe
three to five multi-familyoperators that you're investing
with.
And maybe, if they want todiverse after they, they have
learned enough about that one,one asset class, then it can go
into maybe more of advanced taxstrategy and move some capital
into oil and gas.
(16:11):
And if they find somebody that'sa reputable operator, then it
can get into a hotel.
But to your point, I think it'sreally important to get specific
on.
what their immediate, financialgoals are, what asset class they
can understand.
And double down on that beforethey move on to shiny objects.
I don't remember WarrenBuffett's, conversation or
(16:31):
comment or quote I should say,but said something that, you
know.
Basically he doubles down onstuff.
He learns an industry very well.
He does, and puts a biginvestment and a big investment
for you.
And I, you know, and basicallyI, I forget what it was, but
something in the quote,diversification is for losers or
something like that.
it wasn't that strong knowingWarren, but, diversification is
(16:52):
for rookies because yourfinancial advisor tells you to
put, you know, diversification,stocks, bonds, and everything
else, and small cap, high, largecap, blah, blah, blah.
So, back to the know one thingWell correct.
Know one thing.
yeah.
in the Marine Corps, we tell theMarines, make your job, your
profession.
There you go.
Yeah.
Which is learn learning job.
(17:13):
And I think we also have theopportunity to do cross
training.
However, the focus is learningyour military occupational skill
first before you start doing,any cross training, learning
somebody else's job, So let'stalk about some, some mistakes,
for in investor, right?
So as a coach, especially topassive investors, you care to
(17:34):
talk about two to three mistakesthat you see professional makes
when evaluating multifamilyopportunities.
There are many individuals Wegot a timeline.
And the short answer I got acourse out there for$97.
for past seven investors thatthey can take and answer the
stuff.
But I think some of the big onesare, not knowing the sponsorship
group, not understanding thedeal.
(17:57):
You don't have to become anexpert underwriter, but you
should understand some of theassumptions.
The sponsorship team is making,what are their income growth
numbers?
What are their expense growthnumbers over the five or seven
year hold period?
What is the reversion cap rate?
You buy it today at a cap rate.
What are you expecting to sellthat?
(18:17):
And as you said, you and I canmanipulate a spreadsheet very
easily, but is there a rationalebehind that reversion cap rate?
Correct.
And what I really like is.
if you're an investor, ask theGP about what their relationship
is with the property manager.
Say they're gonna buy an assetin Hawaii.
Has the group ever worked withthe property management group?
(18:40):
They're hiring.
has the property managementgroup got experience in Hawaii
or even, in that class A, B, orC in Hawaii?
People finding property managersin I'll pick on Topeka, Kansas.
That they've never worked withbefore.
And they are a huge piece of thesuccess of a property.
(19:01):
the property management onsitethey are the first thing that a
potential tenant sees when theywalk in.
And they're either courteous andkind I always say, You never
know a good property manageruntil you've had a bad one.
once you have a bad one, you go,Ugh.
Yeah.
And is it quite a few bad ones?
There are, yeah.
To your point, property managerscould potentially make and break
(19:21):
the deal.
However, that operator and therelationship and their ability
to, to manage those propertymanager effectively or maybe to
lead.
I like to separate leadershipfrom management because, in the
military.
the difference betweenleadership and management is
that, leaders ensure that we aredoing the right things while
(19:42):
managers make sure that we aredoing things right.
property managers, should knowthe nuance, the state
regulation, city regulation, allthat good stuff.
Landlord, the tenant laws likedown to the, to virtual nuance
level.
Right.
However, for the, the generalpartners, they need to be
providing the leadership onmonthly, quarterly basis to help
(20:03):
the business plan to continuemoving forward to ensure they,
they can get to their finishline, for their passive investor
or to execute a business plan.
You know, so property managers,there might be some bad ones,
Not a lot of us are greatleaders, in executing the
business plan.
it's not always the propertymanager.
A lot of times it's theleadership the property manager
is receiving.
(20:24):
What you gotta say about that,the asset management, that's
asset man.
love your quote about leaders dothe right things, managers do
things right, I think it's theStephen Covey illustration that,
oh, he is a good leader.
Yeah.
Yeah.
The leader definition of, agroup of people with a machete
going through a forest and theleader shimmies up the tree and
says, we're in the wrong forest.
Wrong jungle.
(20:45):
The manager is the guy with themachete down the bottom, cutting
through the forest and thatthey're both needed.
But to your point, few lead,many can be tacticians, but few
lead, right?
that is asset management and theproperty man and the multifamily
space.
The leadership or thesyndication group overseeing the
onsite property management, havethey given a proper business
(21:07):
plan?
I'm on several calls every weekwith our property managers.
we talk weekly about, rentals,renewals, maintenance requests,
tenant concerns, all kinds ofthings.
it's an agreed upon agenda.
We go through every week.
And that doesn't guaranteesuccess though.
That's not leadership.
I think leadership is really,getting out to the site.
(21:30):
I'll say I'm in Houston and Igot a property in, Phoenix,
Arizona.
I try to get there semiroutinely to look at the site
and make sure it's still there.
Talk to the property management,Property managers change, along
the way.
that's a really astute,differentiating factor.
Leadership of the propertymanager.
A hundred percent.
I gotta add that to my list.
(21:52):
So let's talk about the coachinga little bit more, towards
passive investor, right?
What separates someone who justinvest from someone who's
focused on building a stronglong-term portfolio To build a
legacy.
how do you coach those people,to tailor those mindset towards
those long-term vision.
If somebody might just be tryingto get their cash flow now and
(22:13):
think it's a get rich quick,plan.
I coach people that you know,'cause I, I do have talked to a
lot of potential students and Isay, if you're really interested
in just raising cash.
To me, the quickest way to raisecash is to flip houses.
you know, find a dump fix it upand sell it.
Mm-hmm.
However, that requires awful lotof work.
(22:34):
I started out in that spacelending money to those people,
and even as a hard money lenderit was a lot of analytical work
looking at comps and rehabbudgets.
So if you want cash, that's thefastest way to do it if you're
looking for long term or outwealth.
Again, I would say take action.
Get started.
Doesn't mean you have to investyour, your whole portfolio
today.
(22:55):
But find a sponsorship group andget active.
we offer a$97 course just forpassive investors.
You want to do that and learnmore about being a passive
investor.
once you're like Hutch andRandy, sooner or later you may
have looked at this and yousaid, Hmm, I want to be a.
Active investor or a generalpartner, we offer another whole
course on how to do that becauseyou know, that does require
(23:17):
more.
But simply put, Hutch, you, youinvested a tremendous amount of
time.
I don't know if you went tocollege or straight to the
military, but you invest a lotof your time in education, be it
the military or formal incollege.
Either way, you spent a lot oftime getting prepared for what
you're doing today.
My fear is that there's so manypeople out there investing that
(23:40):
just say, yeah, I want thatreturn, or I want the K one, or
I want to get some money I'llthrow some money at Hutch, or
Randy Well, I don't want thatkind of individual.
I want them to be educated andto know what the risks are,
right?
And how to mitigate some ofthose risks on each property so
that there's nothing, there's nosure deals out there.
As we know, there's nothing ahundred percent, but the only
(24:00):
thing you can do, and that's inmy corporate background, was
risk mitigation.
How do you lower the risk?
I will tell people that therecan be a substantial long-term
return.
I have been investing for, 11,12 years now, Gotcha.
Of all my investments onmultifamily, I've averaged 125%
(24:21):
return.
Okay.
Not bad.
So a 100% means you're doublingyour money.
So I have more than doubled mymoney.
and the listener would say, oh,but how long were you invested,
Randy?
Each of them is different, but Iwould say from the shortest one
of 21 months, and the longestone is nine years.
So even if I double my money innine years, I like to double it
(24:41):
in 21 months.
But, if I can double the moneyin nine years, that's still not
a bad investment.
And you're just plowing it backinto the next investment then.
So you hit it in the head.
Think long term, think one dealis not gonna make you rich.
One passive investment is notgonna make you rich, it's gonna
be a handsome return.
But the multiplication factor ofone becomes two.
(25:04):
Two becomes four, four becomeseight over a long period of time
builds wealth no, definitely toyour point.
I've also put together, what I,what I like to call, the
Military Veterans Blueprint toowning More for America, it's a
brand that started last year,bought the domain and all the
good stuff.
So it's a, military veterans,blueprint to owning more for
(25:26):
America.
And I talk about that exactthing, right?
You mentioned earlier,self-directed IRA Marines.
for some strange reason, I keepreferring to people as Marines,
but because you deal withMarines every day, when you're
doing this thing for 26 years,it's like second nature, right?
one of the things we talk aboutin that, blueprint is how folks
can, transition between jobs,you made a point earlier that
(25:49):
you actually invest with yourretirement fund into a deal.
But a lot of folks don't, knowthat that's available to them.
So what we talk about in theblueprint is how a veteran go
from active duty to retirementroll their.
Thrift savings plan over into aself-directed IRA at the same
time also get a DOD job,post-retirement.
(26:10):
So now he has a retirement fromthe military.
a high paying DOD job and hisTSP.
He uses TSP to invest for along-term growth in a more
predictability for retirement.
But he also use a portion of hisnow a higher income from his DOD
employment to also invest intoreal estate and use a portion of
(26:30):
it to supplement his lifestyleto bridge the gap between his
retirement pay and his activeduty pay.
Right.
And over time he build that, andto your point, a one investment.
So for example, if that dude ora gal rule their fit.
they're, a hundred thousanddollars that is saving their TSP
to self-directed and invest allthat into one multifamily that
is not going to make them rich.
However, if they're taking$50,000 per year from their DOD
(26:53):
income and roll that into A dealfor the next five years.
Right.
Then things get reallyinterested, after year five
because the one, the$50,000 nowbecomes a hundred thousand
dollars potentially.
And then keep doubling up, youknow, five to seven years, which
makes life very interesting.
So I will definitely drop in theshow notes for our listeners to
(27:13):
check out.
Well, you just gave theblueprint.
I did.
That's what it's called.
You just very eloquentlyoutlined it.
I mean, that is the blueprint.
Start with one more.
Educate yourself.
I loved what you just said.
especially for the specificityfor your military listening
audience.
Randy, I want to be mindful ofyour time and before we head
into the focus run, I wanna talkabout, the, your future
(27:36):
strategies, right?
with over$350 million on assetson the management, right?
What is next for investor arc?
You know, are you, are youscaling into fund, you know,
vertically integrating or movinginto new assets?
what's next for you?
I tell people I have$350 millionof assets under management.
That's important and, accuratestatement.
it's important for your audienceto understand.
(27:57):
I don't oversee every deal.
I'm not day to day on everydeal.
I have been, in those deals.
I mean, it's true.
I have$350 million, 1200 doors.
I'm, I'm a key principal insome, I'm the lead partner in
some, I am a money raiser orcapital raiser for others deals
because I like them.
(28:17):
So again, that's a way ofcompounding your growth.
And doing it a little less dayto day 24, I mean, 40 hours a
week basis.
So I almost, I'm sorry, I forgotyour question.
What's next?
Pretty much what's next for me,Randy, I'm gonna continue to do
this as long as I'm healthy.
I want to syndicate in deals.
specifically what's on myhorizon is I have not developed
(28:41):
a fund.
I still consider doing that, butI haven't done it yet.
I continue to look atmultifamily assets.
My selection criteria has gottenvery narrow and tight because, I
think we're in that side of thecycle.
I don't want to be the guy doingfive deals a year.
I'm not looking to build a largeteam behind me.
(29:02):
I've done that in the corporateworld.
I wanna run a small boutiqueprivate equity firm finding good
deals and, getting involved inthose good deals at
simultaneously running mycoaching, mentoring business.
hopefully getting some, momentumbehind that.
I'm thinking in the near future,I want to take, the concept of
going small and build a duplex.
(29:26):
Single duplex in Houston and seeif I can do that on a proof of
concept scale.
That's how I start.
Next thing you know, you'll bedeveloping a couple of hundred
units.
Well, that's how you start onanything, right.
Is with one.
Yep.
And life is motion, man.
So I don't see us slowing downanytime soon.
Right.
Yeah.
especially what we do, it'ssuper exciting stuff.
when you get to.
(29:47):
Bring a lot of people along withyou and, hear the enthusiasm in
their voice and, just listen totheir vision for themself and
the future they want to createfor the family.
There, there is something thatis humbling and it gives
conversation a lot more purposeand what we do a lot more
purpose, My business partner,Dr.
Jones, said, a life is motion.
(30:08):
as long as we're doing thingsthat, that is impacting the
community positively andimpacting people's life
Positively, then we can go onfor a very long time.
it's momentum and positiveenergy and, staying.
I, I sell, you know, a lot ofpeople, I, I hear exiting the
game because the market's toughthese days.
I say it.
Go slow.
Go steady.
Yep.
Persistent.
it's, you know, again, you'veweathered ups and downs in the
(30:30):
stock market and there are upsand downs in the multi-family
space, but over the long haul,it's still gonna be very
profitable.
So persistent.
Another one there.
Persistent.
I call it sticktuitiveness.
There you go.
Yeah.
so I got five question.
this is like the fire rounds,right?
Okay.
I call it the focus round,right?
What do you do for fun?
(30:51):
What do I do for fun?
Well, I'm a father.
I'm a a four, I'm a grandfatherof five, so I awesome my
grandkids around, the country indifferent parts of the country.
I have re-energized in, the gameof golf.
one you never become proficientin, but I truly enjoy I'm also a
high energy person and, so I.
(31:11):
Got another little sidebar ofbeing a fractional CFO.
So in my spare time I'm chasinggrandkids golf and a fractional
CFO business, man.
Life is motion.
what would you say was oneopportunity that was truly a
game changer for yourtrajectory?
My first GP as a generalpartner, multifamily.
(31:33):
My hand was shaking when Isigned on the note, as a GP and
got others to come alongside me,Two months into the property, we
had a fire and took out 28 of139 units, had all kinds of
management issues.
I spent a tremendous amount oftime.
I got my honorary PhD in assetand property management, huge
(31:53):
success.
21 months later, we doubledinvestors' money and sold the
property Fires are usually not abad thing, right?
as long as no one got hurt andyou have insurance to cover it,
you got several new buildingsthat can get you to an amazing
proof of concept, right?
So that, that is true.
But I'll tell you, livingthrough that construction
process and you don't the cash,I understand it's hell, but, the
(32:15):
outcome is beautiful.
It's like birth.
It is, but the outcome isbeautiful.
as long as you have, thatinsurance, which is part of the
risk mitigation strategy, Sowhat would you say is the most
important communication tip whenmanaging investor's expectation?
know your audience.
I say, I'm a baby boomer andwhen I talked to my investors, I
asked, I told you there was afire.
most people would've sent out anemail.
I got on the phone and called myinvestors to talk to them
(32:38):
personally.
Because they're baby boomers.
Baby boomers, wanna either talkto somebody face to face or zoom
versus, an email or a text.
I did send out the emailafterwards but I called them
first.
know your audience.
if you're a millennial andyou're talking to millennials,
they're probably fine with atext or an email, right?
But I think building thatrelationship.
(32:59):
Is what we try to focus on.
And I think you do that, everyopportunity I try to get face to
face with somebody.
So communication, I summarize isa major factor.
The art, and I'll call it art ofcommunication, right?
Anybody can get on chat GPT andcreate something that sounds
nice, but.
Making it yours and living it isdifferent.
(33:19):
Yeah, a hundred percent.
You know, I'm trying to buy thiscommercial building, in One of
the North Atlantic states, andthis guy's 82 years old, he
bought this building back in1984.
Wow.
Early 1980s.
Right.
He bought it for very cheap andnow it's worth millions and
we're trying to buy it.
However, he's selling me Hutch.
Send me something that's not onthe computer.
(33:40):
So I had to snail mail thisgentleman an entire package of
what we're proposing.
we can phone call, but hedoesn't want any emails.
He just wants me to send himsomething in the mail and we
communicate that way.
I identify a buddy who lives inthe city and then I email it to
my buddy, he prints it, thenwalk it over to him.
So, you know, so there you go.
Know your audience.
(34:00):
Know your audience.
I got two more questions, beforewe move on.
what do you wish you understoodearlier in the multifamily
journey.
Analysis paralysis that was mybias.
but once I understood that as myweakness, I made it a strength.
Okay.
Awesome.
And to what do you attributeyour success in this competitive
space?
faith, persistence and, Highenergy, low iq.
(34:26):
I would not compare that to aMarine, but yeah.
All right, Andy, thank you somuch for sharing your insights
with us on another episode ofthe Multifamily Real Estate
Experiment podcast, It was earlyin the morning for me and this
conversation really woke me up Ireally appreciate that, Randy if
listeners, want to get in touchwith you, what is the best way
for them to do that?
To learn about invest Arcyourself and also your, your
(34:48):
coaching?
Well that's first of all, thanksagain for the opportunity.
you obviously are passionateabout the space and for, I'd
love to chat with anybody.
There's two means.
If you want to talk to me aboutcoaching and mentoring, it's
multifamily, maestros, all oneword, multifamily maestros.com.
There's a contact us page onthere, and that's where you can
purchase the,$97 passive courseif you want.
(35:09):
My syndication business isInvest Ark There's a contact
page there I'd love to chat withanybody.
I'm on, I'm on the socialmedia's, the LinkedIn, Facebook,
I, I really enjoy spending timewith, your listening audience.
Alright, listeners, if you getsome value from this episode
today, please leave us a, fairrating, five star, preferably
and some good solid comments andfeedback about this episode.
(35:30):
Thank you for spending time withus.
Randy, thank you for droppingsome really good gems for us
today.
And listeners, until next time.
Keep experimenting with thisgreat thing of life that you
have.
let's continue to own more ofAmerica.
Until next time, I'm Hutch theMarine investor out.
Wah Gwan all you multifamilyenthusiast.
Welcome to another episode ofthe Multifamily Real Estate
Experiment Podcast.
Now, I'm your host, ShalonHutchinson, and if you connect
with me in real estate, you knowme as Hutch, the Marine
Investor.
today we have an importantguest.
Randy the founder and presidentof Invest Hark Property.
He's a general partner in over1200 doors and$350 million in
(00:25):
asset on the management.
He's invested in over 4,000multifamily units across, Texas,
Oklahoma, Arizona, SouthCarolina, and Louisiana.
CPA and a former ChiefCompliance Audit Officer, Randy
now helps busy professionalsbuild wealth passively and
safely, A CPA and a former ChiefCompliance and audit officer,
(00:49):
Randy now helps professionals tobuild wealth passively through
multifamily real estateinvesting.
He is, is not just doing deals,he's also coaching others and
helping them get on the rightpath to creating good long-term,
financial growth.
Randy, welcome to the show.
Hutch Thanks so much.
It's really a pleasure to be onyour show this morning.
(01:11):
Wish I was with you in Hawaii.
it's beautiful weather outside,but the sun ain't coming up yet,
It rains about five minutesevery day, especially on the
Kaneohe Bay side and then thesun peaks back out.
So, Randy, before we get intoit, do you have a favorite real
estate quote or mantra thatdrives you?
Really simple.
90% of all millionaires becomeso through owning real estate,
(01:31):
Andrew, Carnegie, old schoolguy, Man, somebody once told me,
just follow the playbook, Randy.
You don't have to be original.
Okay.
So funny you say that because Idid a LinkedIn post recently
about, how a lot of us compareour lifestyle to others.
And that comparison could bevery debilitating.
(01:52):
Sometimes when people look atanother person's step 98 and
comparing that, comparing thatwith their step two, you know
what I mean?
That could be very debilitatingsometimes.
However, to your point, thereare a selective few of us,
right, who understands that wecan mirror what works, right?
(02:14):
It's not necessarily plagiarismor copy.
We just, we just model notmirror.
We model what works, right?
It's from, to your point, this,follow the playbook.
So I, I was at a conference onceand the speaker said.
Guys, let me talk to every guyin the audience.
I know how you're thinking.
you're thinking you can do thisbetter.
You can adjust it and tweak it.
and he said, just follow theplaybook.
(02:37):
Yes.
So.
let's dive into that Randy, canyou tell us a little bit about
your story that I did not coverin your bio and your main focus
right now?
Randy Langenderfe I reside inHouston, Texas.
about, 12 years ago, I gotstarted on the journey of trying
to find another income source.
Gotcha.
I was working for a privateequity firm in the great state
(02:58):
of Ohio, I was an executive andhad a pretty good number on my
back For cost reduction and Ithought I was going to, get
eliminated, not because of anyperformance issues, just because
cost reductions.
And at that time I kind of had awake up call or the aha moment.
Wow, you really need to findsomething more, to feed your
family with.
Yeah.
So I started looking at a lot ofdifferent things.
(03:19):
I ended up starting to be a hardmoney lender in a single family
space.
Did that with fix and flips fora while.
I came to Houston, Texas when Igot another job and I started to
learn, about multifamily byattending a local real estate
conference, I learned that youcan buy multimillion dollar
assets on non-recourse debt.
So I didn't have to signpersonally on anything, which
(03:42):
was important to me.
I didn't wanna sacrifice any ofthat.
I started an intentional coursein my own mind to.
Exit the corporate world.
I wanted to work late into life,and I still do.
I did that 10 years ago.
And while on a W2 job, I gotinto several different, LP
(04:02):
investments and then GPinvestments.
And as you said, today, I sithere doing this full time as
well as coaching syndication andcoaching.
And, I'm really enjoying life.
Yeah, I appreciate that, man.
what a journey, with yourbackground as a, chief
compliance officer and, an auditofficer, at a large academic
institution, I.
(04:22):
can understand the inspirationto go towards real estate
investment because youunderstand how the numbers work,
right?
here's one of the things I wantto ask you, man.
Especially being a coach andyour experience, you know, many
professionals that really wantto invest.
But what happened is that.
A lot of folks are risk averse,especially in my background, as
military folks, they spend 15,20 years saving a nice nest egg.
(04:47):
the military doesn't pay us alot of money.
There's a lot of benefits, butwe don't get, we don't get a big
paychecks.
So to spend, you know, 15, 20years, you know, save seven,
five to$150,000.
Right.
You know, so when it's time toput that bulk of money into an,
into maybe one or a coupleinvestment, it's very
challenging for them to to letgo.
(05:07):
Right.
So a lot of them are risk averseand get overwhelmed.
Now, what would be your message,to high earning professionals
who are stuck on the sidelines?
That's a great one, Hutch.
you know, I've been there too.
education wise, I'm a financeperson at heart and so, right.
I'm pretty risk adverse myself.
Like you said, I had grown whereI had to some assets that I
(05:29):
didn't wanna lose.
That's why I got an Nonrecoursedebt, let me summarize by
quoting my mentor, Rod Khleiftake massive action.
So.
And I, I start with that sayingmy own journey was my first LP
investment.
I remember I did it with afriend'cause I wanted to
mitigate risk.
we formed a separate LLC toinvest in an apartment complex.
(05:50):
there are ways to get around it.
you can do that, you can do aself-directed IRAs, which is the
subject of another whole story.
Yeah.
and that's the way I startedusing the self-directed IRA
'cause I didn't have spendablecash, Analysis paralysis.
my profession, financeaccounting, and I talk to a lot
of IT professionals, a lot ofengineering professionals that
(06:11):
are also very analyticallyminded I think suffer from
analysis paralysis.
So I don't know if you've everheard the, old illustration,
ready, aim, fire.
So I am a ready, aim, aim, aim.
And then finally, fire.
My marketing friends are fire,aim, and then ready.
(06:32):
So, and I remember those that,that mindset drive me crazy.
Especially as, as a marine,right?
Because, every, marine is arifle man, right?
And that's one of the things weget taught.
Good side alignment, sidepicture.
You identify the target right?
Sometimes the target's kind ofblurry.
You put your front side pitcher,and your right side aperture
onto that target, and then youfire.
(06:52):
So you have good side alignment,side pitcher, and then you fire.
So that fire ready, aim concept,right?
I understand the thought processof massive action, but trying to
compete that into a Marine'shead.
doesn't jive sometimes.
I talk to a lot of high networth individuals I came from a
large academic medicalinstitution that had a 1.5
billion.
(07:12):
endowment, and when I leftthere, they had anywheres from
eight to 12% of their portfolioin real estate.
Gotcha.
It may not have beenmultifamily, but it was in real
estate.
I tell people, marine friends Toincrease your returns overall on
your portfolio, you need to havesome of that real estate in
there.
(07:33):
If it's good enough for the bigboys, it's good enough for you
on an individual basis, and youcan get started by doing it with
a friend or using an S-D-I-R-Aor buying somebody that lets you
in for less than the 50 Kminimum.
Just do it.
just do it.
you can analyze this untilyou're blue in the face.
That doesn't mean you shouldtake, unlimited risk.
(07:56):
Get to know sponsors, peoplethat are doing deals, people
that you can know, like, andtrust.
find somebody, myself, yourself.
There are many out there that dowhat we do.
Get to know them and ask themquestions.
One of the things I reallyappreciate about this real
estate environment is that a lotof folks are like core
competitors, Where we're sowilling to share information
(08:17):
because this is really goodinformation that is that
elevates people's life.
I think you probably attest tothis, right, Randy, especially
living in Houston.
Houston is a big city andthere's a lot of greatness going
on in Houston.
But also in every city, I havelittle pockets of, areas that
are not doing so well.
I was born and raised inJamaica.
Right.
And some of the places that I'velived in Jamaican, some of the
(08:39):
places that I've traveled insideof the United States, what I've
noticed is that, poverty, breedsmore crime and a lot of other
things that comes with it,right?
And the more we can elevateourself to, you know, changing
our relationship with money,understanding how money works,
understanding how we can,leverage the experience of
others.
(08:59):
Right to act, to improve ourfinancial trajectory and the
quality of life we provide forour family.
Then the more we can maybe noteliminate, but reduce the
poverty in our communities.
And once we start improving.
reducing the poverty level, thenwe give people good quality of
life, right?
And I think the country and of awhole becomes better, you know,
(09:22):
so I think it's one of thethings I really appreciate about
it, especially the multifamilyspace, is that everyone is
really willing to shareinformation to help most people
who is wanting to get theinformation and also take action
to elevate their life.
What do you think about that?
Oh man, I couldn't agree withyou more.
first of all, it's so cool.
That you have identified, andthere's so many people that
(09:44):
start out to get rich quick.
It's not a get rich quick, it'sa get rich, slow, steady.
but you have a higher purposethan just making money.
I think those are the mostsuccessful I've lost money in
the stock market.
and other places, You're notbatting a thousand all the time
in multi-family, but in the gameover a long period of time.
I share with you, I think ahigher purpose.
(10:05):
I wanna say I'm a person offaith and one day I hope the
majority of my assets get someaway to charitable
organizations, rather than, youknow, squandering them on a
yacht or something like that Sonot squandering them, that's
just.
Everybody's different.
I understand somebody's got ayacht.
One of my best friends has ayacht.
but anyhow, it's not me.
You know, so, you've invested inover 4,000, units, across five
(10:28):
states, which, which is amazing.
You do that, an active and apassive real estate investor.
Right.
what is your key to evaluatingthe market and operator,
especially when a deal is notlocal to you in Houston?
You're a savvy investor, Hutch,I get, well, I, I think my
advice would be to the personstarting out right?
Would be first, pick a couple ofmarkets.
(10:50):
it's the shiny object syndrome.
As a new investor, yes.
I get an email that says, oh,20% IRR in, I dunno, Topeka,
Kansas, or a 30% IRR in Toledo,Ohio.
I look in the Sunbelt.
I prefer Texas, South Carolina,and Arizona.
Those are three markets.
(11:11):
if somebody sends me somethingin Topeka or Toledo, thank you
very much.
Unless I know them really well.
The second one is before youeven know the market, you really
gotta know the individual who'sputting the deal together.
Hutch, have you ever heard of asponsor saying, I underwrite
deals very aggressively.
yeah, I've seen people thatunderwrite what I would call
(11:32):
aggressively, but I've neverheard anyone say, everybody says
we underwrite very conservative,conservatively.
And so my point of it is, is oneman's conservative is another
man's aggressive.
Correct.
and part of your education, makesure that as an investor.
You really get, first you get toknow the sponsorship team.
Where are they focused at?
What type of units, whatgeographic locations, what
(11:56):
relationships do they have withproperty management companies,
otherwise it's, a universeversus a narrow scope of
potential investmentopportunities.
Gotcha.
So, to your point that that canserve a lot of folks focus on
conservative, underwriting.
Right.
But a lot of those, you can makethose numbers do whatever you
want.
And I think to, to your point,identifying somebody who has a
(12:19):
track record, that they havedemonstrated and they can show
you because most things areverifiable, right.
Yeah.
Most things not, I was justgonna, I was just gonna say
verifiable, you know?
Yeah.
it's a big country, but it's asmall space we're in, if
somebody asks me to find outabout Hutch, I bet I can find
out about Hutch's record or his,his morals and his character
(12:40):
pretty easy by just pinging fiveor six people in the industry.
And you could probably do thesame with me or others.
Yes, sir.
So you can't hide.
That's the point.
I think track record is reallyimportant, but I also think your
investment community out there,when I first started, if
somebody had a bad deal, thatwas an automatic red flag and
stopped the conversation, right?
Today's world, I'm not so sure.
(13:02):
I, I would say it's a yellowflag of caution.
to think about and really digdeeper, there are a lot of great
operators I know.
good operators who regrettablyhave lost a property in the last
18 months Because of the marketconditions.
be aware.
to your point, it does happen,right?
There's so many things thathappened in previous years that
(13:22):
a lot of folks could not havereally predicted, and there's
still a bit of uncertainty, Inthe market, the operators who
are investing with goodfundamentals and not
underwriting aggressively basedon some uncontrollable
expectations, is important.
I appreciate, you covering, theanswer that question.
(13:43):
Now your strategy emphasizing,you know, safety and time tested
approaches and, I wanna talkabout this for a little bit,
right?
In the environments where, youmentioned this earlier.
People, are chasing shinyobjects, like short term rental
or, cryptocurrency.
How do you keep investorsfocused on the fundamentals in
(14:04):
your education platform andcoaching?
Yeah, I think, you're absolutelyright because there's so many
investment opportunities outthere today.
People get attracted so manydifferent ways.
I would say when I talk topeople, I don't have any
problems with self storage.
mobile home parks, crypto, youname any other asset class.
I just don't know anything about'em.
(14:25):
So I don't invest in'em, period.
And it's not that I have anyproblems with'em, I've just, I.
Wanna become proficient in oneasset class.
and I don't consider myselfproficient yet.
So I think getting peoplefocused on the value of real
estate, right?
very simply, getting yourpotential investors and, you
know, simply one, positive cashflow.
(14:46):
Two, favorable tax treatment.
Three.
Forced appreciation.
You know, when I got my headaround, we can increase the
value of this property byraising the net operating
income, either raising rents ordecreasing expenses or both.
and they're paying down yourmortgage And finally, I was
talking to a potential investoryesterday.
(15:07):
He said, why don't you dohotels?
That's another asset class.
But I said.
Everybody needs someplace tolive.
They don't always vacation andneed a hotel.
I consider multifamily moresecure than even that.
That's not to say you can fileit, probably find a good
operator out there in hotels,but Right.
(15:29):
I just don't know of any.
And.
Don't spend my time on it.
So take away focus on gettingreally proficient in one asset
class first, and, then branchingout and getting proficient on
finding sponsors that, you know,like, and trust.
Right?
Yeah.
And these sponsors doesn't haveto be, I know a lot of folks,
especially if they have a nicenest egg, whether it be their
(15:51):
today money, money in theirchecking accounts or their
self-directed IRA, they don'tneed more than two to maybe
three to five multi-familyoperators that you're investing
with.
And maybe, if they want todiverse after they, they have
learned enough about that one,one asset class, then it can go
into maybe more of advanced taxstrategy and move some capital
into oil and gas.
(16:11):
And if they find somebody that'sa reputable operator, then it
can get into a hotel.
But to your point, I think it'sreally important to get specific
on.
what their immediate, financialgoals are, what asset class they
can understand.
And double down on that beforethey move on to shiny objects.
I don't remember WarrenBuffett's, conversation or
(16:31):
comment or quote I should say,but said something that, you
know.
Basically he doubles down onstuff.
He learns an industry very well.
He does, and puts a biginvestment and a big investment
for you.
And I, you know, and basicallyI, I forget what it was, but
something in the quote,diversification is for losers or
something like that.
it wasn't that strong knowingWarren, but, diversification is
(16:52):
for rookies because yourfinancial advisor tells you to
put, you know, diversification,stocks, bonds, and everything
else, and small cap, high, largecap, blah, blah, blah.
So, back to the know one thingWell correct.
Know one thing.
yeah.
in the Marine Corps, we tell theMarines, make your job, your
profession.
There you go.
Yeah.
Which is learn learning job.
(17:13):
And I think we also have theopportunity to do cross
training.
However, the focus is learningyour military occupational skill
first before you start doing,any cross training, learning
somebody else's job, So let'stalk about some, some mistakes,
for in investor, right?
So as a coach, especially topassive investors, you care to
(17:34):
talk about two to three mistakesthat you see professional makes
when evaluating multifamilyopportunities.
There are many individuals Wegot a timeline.
And the short answer I got acourse out there for$97.
for past seven investors thatthey can take and answer the
stuff.
But I think some of the big onesare, not knowing the sponsorship
group, not understanding thedeal.
(17:57):
You don't have to become anexpert underwriter, but you
should understand some of theassumptions.
The sponsorship team is making,what are their income growth
numbers?
What are their expense growthnumbers over the five or seven
year hold period?
What is the reversion cap rate?
You buy it today at a cap rate.
What are you expecting to sellthat?
(18:17):
And as you said, you and I canmanipulate a spreadsheet very
easily, but is there a rationalebehind that reversion cap rate?
Correct.
And what I really like is.
if you're an investor, ask theGP about what their relationship
is with the property manager.
Say they're gonna buy an assetin Hawaii.
Has the group ever worked withthe property management group?
(18:40):
They're hiring.
has the property managementgroup got experience in Hawaii
or even, in that class A, B, orC in Hawaii?
People finding property managersin I'll pick on Topeka, Kansas.
That they've never worked withbefore.
And they are a huge piece of thesuccess of a property.
(19:01):
the property management onsitethey are the first thing that a
potential tenant sees when theywalk in.
And they're either courteous andkind I always say, You never
know a good property manageruntil you've had a bad one.
once you have a bad one, you go,Ugh.
Yeah.
And is it quite a few bad ones?
There are, yeah.
To your point, property managerscould potentially make and break
(19:21):
the deal.
However, that operator and therelationship and their ability
to, to manage those propertymanager effectively or maybe to
lead.
I like to separate leadershipfrom management because, in the
military.
the difference betweenleadership and management is
that, leaders ensure that we aredoing the right things while
(19:42):
managers make sure that we aredoing things right.
property managers, should knowthe nuance, the state
regulation, city regulation, allthat good stuff.
Landlord, the tenant laws likedown to the, to virtual nuance
level.
Right.
However, for the, the generalpartners, they need to be
providing the leadership onmonthly, quarterly basis to help
(20:03):
the business plan to continuemoving forward to ensure they,
they can get to their finishline, for their passive investor
or to execute a business plan.
You know, so property managers,there might be some bad ones,
Not a lot of us are greatleaders, in executing the
business plan.
it's not always the propertymanager.
A lot of times it's theleadership the property manager
is receiving.
(20:24):
What you gotta say about that,the asset management, that's
asset man.
love your quote about leaders dothe right things, managers do
things right, I think it's theStephen Covey illustration that,
oh, he is a good leader.
Yeah.
Yeah.
The leader definition of, agroup of people with a machete
going through a forest and theleader shimmies up the tree and
says, we're in the wrong forest.
Wrong jungle.
(20:45):
The manager is the guy with themachete down the bottom, cutting
through the forest and thatthey're both needed.
But to your point, few lead,many can be tacticians, but few
lead, right?
that is asset management and theproperty man and the multifamily
space.
The leadership or thesyndication group overseeing the
onsite property management, havethey given a proper business
(21:07):
plan?
I'm on several calls every weekwith our property managers.
we talk weekly about, rentals,renewals, maintenance requests,
tenant concerns, all kinds ofthings.
it's an agreed upon agenda.
We go through every week.
And that doesn't guaranteesuccess though.
That's not leadership.
I think leadership is really,getting out to the site.
(21:30):
I'll say I'm in Houston and Igot a property in, Phoenix,
Arizona.
I try to get there semiroutinely to look at the site
and make sure it's still there.
Talk to the property management,Property managers change, along
the way.
that's a really astute,differentiating factor.
Leadership of the propertymanager.
A hundred percent.
I gotta add that to my list.
(21:52):
So let's talk about the coachinga little bit more, towards
passive investor, right?
What separates someone who justinvest from someone who's
focused on building a stronglong-term portfolio To build a
legacy.
how do you coach those people,to tailor those mindset towards
those long-term vision.
If somebody might just be tryingto get their cash flow now and
(22:13):
think it's a get rich quick,plan.
I coach people that you know,'cause I, I do have talked to a
lot of potential students and Isay, if you're really interested
in just raising cash.
To me, the quickest way to raisecash is to flip houses.
you know, find a dump fix it upand sell it.
Mm-hmm.
However, that requires awful lotof work.
(22:34):
I started out in that spacelending money to those people,
and even as a hard money lenderit was a lot of analytical work
looking at comps and rehabbudgets.
So if you want cash, that's thefastest way to do it if you're
looking for long term or outwealth.
Again, I would say take action.
Get started.
Doesn't mean you have to investyour, your whole portfolio
today.
(22:55):
But find a sponsorship group andget active.
we offer a$97 course just forpassive investors.
You want to do that and learnmore about being a passive
investor.
once you're like Hutch andRandy, sooner or later you may
have looked at this and yousaid, Hmm, I want to be a.
Active investor or a generalpartner, we offer another whole
course on how to do that becauseyou know, that does require
(23:17):
more.
But simply put, Hutch, you, youinvested a tremendous amount of
time.
I don't know if you went tocollege or straight to the
military, but you invest a lotof your time in education, be it
the military or formal incollege.
Either way, you spent a lot oftime getting prepared for what
you're doing today.
My fear is that there's so manypeople out there investing that
(23:40):
just say, yeah, I want thatreturn, or I want the K one, or
I want to get some money I'llthrow some money at Hutch, or
Randy Well, I don't want thatkind of individual.
I want them to be educated andto know what the risks are,
right?
And how to mitigate some ofthose risks on each property so
that there's nothing, there's nosure deals out there.
As we know, there's nothing ahundred percent, but the only
(24:00):
thing you can do, and that's inmy corporate background, was
risk mitigation.
How do you lower the risk?
I will tell people that therecan be a substantial long-term
return.
I have been investing for, 11,12 years now, Gotcha.
Of all my investments onmultifamily, I've averaged 125%
(24:21):
return.
Okay.
Not bad.
So a 100% means you're doublingyour money.
So I have more than doubled mymoney.
and the listener would say, oh,but how long were you invested,
Randy?
Each of them is different, but Iwould say from the shortest one
of 21 months, and the longestone is nine years.
So even if I double my money innine years, I like to double it
(24:41):
in 21 months.
But, if I can double the moneyin nine years, that's still not
a bad investment.
And you're just plowing it backinto the next investment then.
So you hit it in the head.
Think long term, think one dealis not gonna make you rich.
One passive investment is notgonna make you rich, it's gonna
be a handsome return.
But the multiplication factor ofone becomes two.
(25:04):
Two becomes four, four becomeseight over a long period of time
builds wealth no, definitely toyour point.
I've also put together, what I,what I like to call, the
Military Veterans Blueprint toowning More for America, it's a
brand that started last year,bought the domain and all the
good stuff.
So it's a, military veterans,blueprint to owning more for
(25:26):
America.
And I talk about that exactthing, right?
You mentioned earlier,self-directed IRA Marines.
for some strange reason, I keepreferring to people as Marines,
but because you deal withMarines every day, when you're
doing this thing for 26 years,it's like second nature, right?
one of the things we talk aboutin that, blueprint is how folks
can, transition between jobs,you made a point earlier that
(25:49):
you actually invest with yourretirement fund into a deal.
But a lot of folks don't, knowthat that's available to them.
So what we talk about in theblueprint is how a veteran go
from active duty to retirementroll their.
Thrift savings plan over into aself-directed IRA at the same
time also get a DOD job,post-retirement.
(26:10):
So now he has a retirement fromthe military.
a high paying DOD job and hisTSP.
He uses TSP to invest for along-term growth in a more
predictability for retirement.
But he also use a portion of hisnow a higher income from his DOD
employment to also invest intoreal estate and use a portion of
(26:30):
it to supplement his lifestyleto bridge the gap between his
retirement pay and his activeduty pay.
Right.
And over time he build that, andto your point, a one investment.
So for example, if that dude ora gal rule their fit.
they're, a hundred thousanddollars that is saving their TSP
to self-directed and invest allthat into one multifamily that
is not going to make them rich.
However, if they're taking$50,000 per year from their DOD
(26:53):
income and roll that into A dealfor the next five years.
Right.
Then things get reallyinterested, after year five
because the one, the$50,000 nowbecomes a hundred thousand
dollars potentially.
And then keep doubling up, youknow, five to seven years, which
makes life very interesting.
So I will definitely drop in theshow notes for our listeners to
(27:13):
check out.
Well, you just gave theblueprint.
I did.
That's what it's called.
You just very eloquentlyoutlined it.
I mean, that is the blueprint.
Start with one more.
Educate yourself.
I loved what you just said.
especially for the specificityfor your military listening
audience.
Randy, I want to be mindful ofyour time and before we head
into the focus run, I wanna talkabout, the, your future
(27:36):
strategies, right?
with over$350 million on assetson the management, right?
What is next for investor arc?
You know, are you, are youscaling into fund, you know,
vertically integrating or movinginto new assets?
what's next for you?
I tell people I have$350 millionof assets under management.
That's important and, accuratestatement.
it's important for your audienceto understand.
(27:57):
I don't oversee every deal.
I'm not day to day on everydeal.
I have been, in those deals.
I mean, it's true.
I have$350 million, 1200 doors.
I'm, I'm a key principal insome, I'm the lead partner in
some, I am a money raiser orcapital raiser for others deals
because I like them.
(28:17):
So again, that's a way ofcompounding your growth.
And doing it a little less dayto day 24, I mean, 40 hours a
week basis.
So I almost, I'm sorry, I forgotyour question.
What's next?
Pretty much what's next for me,Randy, I'm gonna continue to do
this as long as I'm healthy.
I want to syndicate in deals.
specifically what's on myhorizon is I have not developed
(28:41):
a fund.
I still consider doing that, butI haven't done it yet.
I continue to look atmultifamily assets.
My selection criteria has gottenvery narrow and tight because, I
think we're in that side of thecycle.
I don't want to be the guy doingfive deals a year.
I'm not looking to build a largeteam behind me.
(29:02):
I've done that in the corporateworld.
I wanna run a small boutiqueprivate equity firm finding good
deals and, getting involved inthose good deals at
simultaneously running mycoaching, mentoring business.
hopefully getting some, momentumbehind that.
I'm thinking in the near future,I want to take, the concept of
going small and build a duplex.
(29:26):
Single duplex in Houston and seeif I can do that on a proof of
concept scale.
That's how I start.
Next thing you know, you'll bedeveloping a couple of hundred
units.
Well, that's how you start onanything, right.
Is with one.
Yep.
And life is motion, man.
So I don't see us slowing downanytime soon.
Right.
Yeah.
especially what we do, it'ssuper exciting stuff.
when you get to.
(29:47):
Bring a lot of people along withyou and, hear the enthusiasm in
their voice and, just listen totheir vision for themself and
the future they want to createfor the family.
There, there is something thatis humbling and it gives
conversation a lot more purposeand what we do a lot more
purpose, My business partner,Dr.
Jones, said, a life is motion.
(30:08):
as long as we're doing thingsthat, that is impacting the
community positively andimpacting people's life
Positively, then we can go onfor a very long time.
it's momentum and positiveenergy and, staying.
I, I sell, you know, a lot ofpeople, I, I hear exiting the
game because the market's toughthese days.
I say it.
Go slow.
Go steady.
Yep.
Persistent.
it's, you know, again, you'veweathered ups and downs in the
(30:30):
stock market and there are upsand downs in the multi-family
space, but over the long haul,it's still gonna be very
profitable.
So persistent.
Another one there.
Persistent.
I call it sticktuitiveness.
There you go.
Yeah.
so I got five question.
this is like the fire rounds,right?
Okay.
I call it the focus round,right?
What do you do for fun?
(30:51):
What do I do for fun?
Well, I'm a father.
I'm a a four, I'm a grandfatherof five, so I awesome my
grandkids around, the country indifferent parts of the country.
I have re-energized in, the gameof golf.
one you never become proficientin, but I truly enjoy I'm also a
high energy person and, so I.
(31:11):
Got another little sidebar ofbeing a fractional CFO.
So in my spare time I'm chasinggrandkids golf and a fractional
CFO business, man.
Life is motion.
what would you say was oneopportunity that was truly a
game changer for yourtrajectory?
My first GP as a generalpartner, multifamily.
(31:33):
My hand was shaking when Isigned on the note, as a GP and
got others to come alongside me,Two months into the property, we
had a fire and took out 28 of139 units, had all kinds of
management issues.
I spent a tremendous amount oftime.
I got my honorary PhD in assetand property management, huge
(31:53):
success.
21 months later, we doubledinvestors' money and sold the
property Fires are usually not abad thing, right?
as long as no one got hurt andyou have insurance to cover it,
you got several new buildingsthat can get you to an amazing
proof of concept, right?
So that, that is true.
But I'll tell you, livingthrough that construction
process and you don't the cash,I understand it's hell, but, the
(32:15):
outcome is beautiful.
It's like birth.
It is, but the outcome isbeautiful.
as long as you have, thatinsurance, which is part of the
risk mitigation strategy, Sowhat would you say is the most
important communication tip whenmanaging investor's expectation?
know your audience.
I say, I'm a baby boomer andwhen I talked to my investors, I
asked, I told you there was afire.
most people would've sent out anemail.
I got on the phone and called myinvestors to talk to them
(32:38):
personally.
Because they're baby boomers.
Baby boomers, wanna either talkto somebody face to face or zoom
versus, an email or a text.
I did send out the emailafterwards but I called them
first.
know your audience.
if you're a millennial andyou're talking to millennials,
they're probably fine with atext or an email, right?
But I think building thatrelationship.
(32:59):
Is what we try to focus on.
And I think you do that, everyopportunity I try to get face to
face with somebody.
So communication, I summarize isa major factor.
The art, and I'll call it art ofcommunication, right?
Anybody can get on chat GPT andcreate something that sounds
nice, but.
Making it yours and living it isdifferent.
(33:19):
Yeah, a hundred percent.
You know, I'm trying to buy thiscommercial building, in One of
the North Atlantic states, andthis guy's 82 years old, he
bought this building back in1984.
Wow.
Early 1980s.
Right.
He bought it for very cheap andnow it's worth millions and
we're trying to buy it.
However, he's selling me Hutch.
Send me something that's not onthe computer.
(33:40):
So I had to snail mail thisgentleman an entire package of
what we're proposing.
we can phone call, but hedoesn't want any emails.
He just wants me to send himsomething in the mail and we
communicate that way.
I identify a buddy who lives inthe city and then I email it to
my buddy, he prints it, thenwalk it over to him.
So, you know, so there you go.
Know your audience.
(34:00):
Know your audience.
I got two more questions, beforewe move on.
what do you wish you understoodearlier in the multifamily
journey.
Analysis paralysis that was mybias.
but once I understood that as myweakness, I made it a strength.
Okay.
Awesome.
And to what do you attributeyour success in this competitive
space?
faith, persistence and, Highenergy, low iq.
(34:26):
I would not compare that to aMarine, but yeah.
All right, Andy, thank you somuch for sharing your insights
with us on another episode ofthe Multifamily Real Estate
Experiment podcast, It was earlyin the morning for me and this
conversation really woke me up Ireally appreciate that, Randy if
listeners, want to get in touchwith you, what is the best way
for them to do that?
To learn about invest Arcyourself and also your, your
(34:48):
coaching?
Well that's first of all, thanksagain for the opportunity.
you obviously are passionateabout the space and for, I'd
love to chat with anybody.
There's two means.
If you want to talk to me aboutcoaching and mentoring, it's
multifamily, maestros, all oneword, multifamily maestros.com.
There's a contact us page onthere, and that's where you can
purchase the,$97 passive courseif you want.
(35:09):
My syndication business isInvest Ark There's a contact
page there I'd love to chat withanybody.
I'm on, I'm on the socialmedia's, the LinkedIn, Facebook,
I, I really enjoy spending timewith, your listening audience.
Alright, listeners, if you getsome value from this episode
today, please leave us a, fairrating, five star, preferably
and some good solid comments andfeedback about this episode.
(35:30):
Thank you for spending time withus.
Randy, thank you for droppingsome really good gems for us
today.
And listeners, until next time.
Keep experimenting with thisgreat thing of life that you
have.
let's continue to own more ofAmerica.
Until next time, I'm Hutch theMarine investor out.
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