xhv8mzw7ge79waga35o97s2wbzpfr6 Multifamily Real Estate Experts Panel Q&A | IREI Summit 2019
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Panel Discussion

– IREI Summit Experts –

For more information contact:

fig.us or solson@fig.us

  Video Length: 47 min

IREI Summit Speakers Sit Together to Answer Questions and Give Their Most Important Advice.

- Real Estate Expert Panel

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Text:

0:00  
It's been a wild ride doing this summit. Thank you for enduring my wife commonly says, living with me which we've been married for almost 17 years, actually, that she gets seasick

 

0:14  
because it's just a little bit of a wild ride. We're starting this business we bought that property yesterday we're doing this or we did that six months ago. We didn't we didn't talk about that. What do you what

 

0:25  
it happened. Now we're not doing it anymore. So, but here we are. It's been a great ride. And I would like to actually selfishly I apologize. Great panel. I won't take too much more time. These guys have a lot to say. My wife, Christina bond right over here. Stand up is actually going to hate me for this.

 

0:44  
And my son, Henry bond.

 

0:52  
Everybody

 

0:54  
is one of four sons and one daughter. So we have five kids. Henry wanted to come up and

 

1:00  
Every morning when I was getting here between six and seven was like, I want to go with you then. And I'm like, No, like sleep, be a kid. Come when mom comes and he really wanted to come and I didn't let him sorry. Okay, so here's how we're going to do this. The purpose of this session is markets shift.

 

1:17  
I've explained it when I've been in residential real estate when I talked to investors, it's healthy. It is good for markets to ebb and flow. It's a living being is how I think of it that the market breeds like our lungs expands contracts, and that's normal. It's healthy, it's good.

 

1:35  
People freak out in market shifts. They get excited when everyone's excited and they spend their money and that last group always ends up holding the bag because they do it dumb because they're doing it like candy. And they forget the meat. Raise your hand if you got a little bit of meat this weekend.

 

1:55  
Yeah, helpful, like factual knowledgeable information, practical advice.

 

2:00  
That you can actually do. Sure there are some motivational stuff and that's good. But there's meat and action and things that should take place. So when the market does this and corrects, which doesn't always mean a crash unless you got 100% financing and you live paycheck to paycheck, and now it is a crash to you.

 

2:21  
Thank you.

 

2:24  
I don't know where that was, but that Thank you, you mad, thank you,

 

2:28  
then it's a crash. If you're not doing that, and you're planning, it's an opportunity. The corrections are where the wealth is really, really created because those who think plan and execute dominate in corrections.

 

2:45  
That is your panel. People that have done that. And I know and I'm so excited to hear how they're making their plans going into this next

 

2:55  
breathing exercise that the market will do. So

 

3:00  
So that's what we're going to do. I'm going to give them all an opportunity for a we're going to call it a one minute, we all know that they have things to say they're going to turn it into three, maybe five. But you have a minute, right? No one has a timer though. who you are, what your quick background is and what your plan is going into a market shift whatever you think the future is, and just tell us what your current specialty is and what you're going to do. So we're going to start with

 

3:29  
no, I won't do it. Okay, we're just gonna start with Mike. So there's

 

3:37  
exposure. Oh, yeah, we're going live. It's just live. Yeah, you're live, man. This is how many people know I'm just kidding. Don't do that. Okay, so we're going to start with Michael being um, we're going to go over this way. There's a mic per table. We haven't covered logistics everyone. Sorry. We're doing it now. Should be live. Mike's tested. Awesome. Go right ahead. Okay. Mike being him. Blue Diamond capital.

 

4:01  
I don't know what are our specialty is probably multifamily and hospitality in the inner Mountain West, and

 

4:11  
what are we doing to prepare for this downturn? I think probably more than ever. We're looking into the details were just digging in. I think more than ever leading up to something bad you need to know how how you are positioned against everybody else, and quality

 

4:32  
is key. When there's a downturn,

 

4:40  
Grant collared. I'm with redstone residential. We're a student housing investor and operator based here in Provo, Utah, about 27,000 beds of student housing around the country. But we're mostly a western US focus.

 

4:56  
In terms of the downturn, we're kind of I mean, sounds morbid

 

5:00  
We're we're kind of excited, right? We're kind of cheering for it.

 

5:04  
Student Housing as an asset class is typically a little bit more counter cyclical. We see behavior where people are actually going back to school. And we see enrollments go up, we see occupancy go up. But preparing for it. You know, we're just making sure that we execute

on super high quality deals, that we're not building unrealistic assumptions into our models and our budgets. When we buy.

 

5:30  
We've actually been levering down a little bit in our new acquisitions, rather than topping off at the highest LTV so that we can maybe going a little bit more moderate. And just stress testing our new deals to make sure that we won't have any issues. Should anything pop up.

 

5:50  
This is gonna be good.

 

5:56  
I'm Mike Mike Miller with fig

 

6:02  
I just say, Stephen, James, what do you think we should do now?

 

6:09  
Now,

 

6:10  
I think most of our pressure comes from competition in the retail single family home market, with our town home products in. And so what we've done is we started here in Utah. And the market pressure that we feel is from competition, not in in sales really, but in subs, land prices, commodities. And so we have spread our market so we made the market bigger.

 

6:38  
And then that would help the pressure on one single market in a downturn. And we're continuing to grow. So we're in three markets now and it'll be five by the end of the year.

 

6:51  
Dave already more vivid than solar last 17 years and currently the founder of the golf club, which is a

 

7:00  
venue similar to a Top Golf or bringing into Utah County. And the biggest thing that I'm doing to prepare for future, you know, market adjustments would be. One is maintaining liquidity. The largest risk in my multiple multifamily portfolio and watching other investors has been when there's a lack of liquidity in a downturn, right.

 

7:23  
There's not been a time when over a five year period where values have dropped and stayed below where they were five years previously, so just about weathering those storms. Secondly, is to enjoy and capitalize on some of the equity so I've had the privilege of you know, buying a lot of four Plex with Steve 12 or so. And the first ones you know, have appreciated several hundred thousand dollars. And so, last year in the last second second half of last year, I took four of those sold the four Plex is capitalize on those returns, and then we're able to take you know, sell one four Plex

 

8:00  
1031 exchange into two brand new for Plexus as an equity play and go from four doors to eight doors without any additional capital outlay. And so I've been really grateful for that an awesome experience. And then lastly, is also diversifying a little bit outside of just the Utah market. So moving into Meridian,

 

8:19  
Texas, hopefully Arizona. And yeah, so

 

8:27  
my name is Jim home, and the previous CEO of performance assessment network, which was one of the leading providers of psychology tests to companies so that they can hire better. I knew nothing about real estate. But I didn't know that I needed to diversify what I did as an individual. And real estate became a really great way for me to be able to do that. I was able to do quite well over the last eight years and working with fig. And to me when I look at the downturn, it's almost a certainty that it's coming. Work with two private equity groups right now.

 

9:00  
Now the first question in every company evaluation that we do is what is the downside economic risk to making this investment. And we turn down very good deals because of economic risk. It is also increase the price of assets or companies that are deemed to be counter cyclical or a cyclical, it's not going to be impacted. And so that's very interesting from a prediction over the next two to three years. What does private equity groups think is going to be happening? Personally, I'm excited about it because as a buy and hold investor over time, probably the most important thing to me that impacts the value for my portfolio is the interest rate. The lower the interest rate, the better the returns, I'm going to be able to get over a longer period of time and in an economic downturn, chances are there will be pressures to lower that interest rate, which then means I will have better investment returns as I move into retirement. So the key element is you have to be able to be prepared to take advantage.

 

10:00  
Those interest rates with liquidity and other things have been mentioned before. But in my particular type of investment that I do, I actually would see it as a positive turn.

 

10:12  
Good morning, my name is Randy looky, and I'm with lifetime paradigm. I am a registered financial consultant to help you understand what that is think of me as like a general practitioner in finance. So I basically do everything from life insurance, annuities securities, as a fiduciary. I'm also a mortgage broker and a real estate broker. I don't file tax returns, and I'm not an attorney. Those are the two things I don't do.

 

10:40  
You know, we talked about we think that a recession is, you know, maybe coming. The reality is it is going to happen, it's going to come this white hair, this is 2008. Right.

 

10:53  
I had brown hair up until then.

 

10:56  
It's all I saw in 2009.

 

11:00  
Me Back up. So as a financial consultant, I'm constantly juggling my clients assets and priorities based on things that are happening in their life. People are retiring, their kids are going to college, maybe somebody had a severe health change. So there's all types of things that happened in our lives individually that, that as my job I have to deal with. And when you'd have these big economic swings, like 2008, I mean, that really literally handed a lot of people's head and basket to them. But people like Mike Miller jumped in in 2008, because he saw it as an amazing opportunity to make a lot of money. And he's absolutely right. Steve's absolutely right. When you have these downturns, that's when that's when you can really take advantage of it. So the two words of advice I would say is, just always remember the adage, cash is king, right? Because cash is what's going to carry you through and give you the money to take advantage of the opportunities that will be presented to you. And then the second thing is be agile, right? be agile and flexible and open to anything and maybe ideas like

 

12:00  
You know the the speaker last night it was it was I forget the bold the comments about the bowl but he was so right on. So you have to be open to new ideas, new things be agile, be flexible. And and don't get yourself in a position where all your assets are tied up and the real liquid and you don't have cash to to ride out the storm. That would be my advice.

 

12:23  
Hi, everyone. My name is Paul Mayfield, and I'll start by saying if I could only have a thick, lush hair.

 

12:31  
single one. That's why I don't care. That would be awesome. But um, yeah, I'm an individual investor.

 

12:39  
I would say the things that I've been thinking about in terms of my own,

 

12:44  
you know, asset management is, well first for the past two or three years thinking that a downturn could be coming. I have been allocating more into real estate actually. And as I look at the real estate portfolio, I'm trying to keep the loan devalues down there some refinancing that I made

 

13:00  
Done to pull equity, but I'm going to hold off doing that just say the capital for a little bit later to make sure the expenses are sort of minimum on that portfolio.

 

13:07  
With the market exposure, I have taken more defensive positions, investment grade bonds, or, you know, paid a premium, his whole life, that sort of thing. Just things that I think if I'm holding the bonds to maturity can survive pretty well through a downturn so that when the upside starts to happen, again, there's liquidity or there's, you know, access to capital take advantage of it. But other than that, it's kind of the, the, the basic things we do to take a defensive shot. Oh, the one of the thing is, I'm personally thinking about where the taxes are going to go, you know, a decade down the road. And, you know,

 

13:40  
they're pretty historic lows, and I even did something crazy that my friends thought was pretty stupid, which was I, I just took an early withdrawal on half the 529 accounts for my children that I'd saved and just rolled it into real estate because

 

13:55  
the growth portion which was about half of what I took out, took a 10% fee.

 

14:00  
When I ran the numbers, I felt like I could get the return in in a pretty tax efficient way out of real estate anyway and breakeven in a couple of years. And if I think down the road, you know, taxes are going up. I understand that the 529 are earmarked to, to real estate. But as I started my retirement counts, everything else like that. I'm almost wondering if that if there's a better opportunity in the short term.

 

14:23  
Hi, my name is Christina Woo, I normally don't sound like this. But I've been sick for the last week and a half. So my apologies for my voice. I'm a real estate investor as well as agent in the San Francisco Bay Area. Before becoming a real estate agent. I was a strategy consultant was a wall street analyst taught personal financial planning, and generally am a finance geek, who loves staying up at night, looking at different scenarios, modeling different scenarios, and thinking about how to optimize my own portfolio so that I can enjoy my life with

 

15:00  
My family more than worrying about paying the bills. And I own a number of big investments, have a number of my clients invested in big investments. And it's tough to go at the end of this panel because so much insight has already been shared. But as a wall street analyst, I used to cover macro economic trends.

 

15:23  
And one thing that we would see is growth trends are great, the last seven to nine years, and periods of contraction are more like three to five years, but that's what's memorable, and it hits hard. So I think one of the other things that I'm doing aside from what's been mentioned here, is to think about my financing on the investment properties that I have. So I'm a firm believer in adjustable rate mortgages. I'm not a buy and hold, going to keep these things for 30 years type of person I want to cycle out of

 

16:00  
investments that I bought early stage before they took off, sell them at sort of their peak, but before they need some pretty big maintenance, and then buy into the next, you know, a new to newest community that's growing. And so from an investment perspective, if we believe we're at the somewhat beginning stages of a downturn, I'm looking more like at seven year financing terms instead of like five. Some of my clients have been looking at 10 year financing terms, just so that you can weather the storm, your payments are really predictable. And then when the time is right, turn around and sell those assets.

 

16:48  
Ola. My name is Matt Atkinson trading idea for us with the panel. If you've been investing for less since 2011 or newer since then raise your hand 2011 raise your hand hi

 

17:00  
Okay, if you invested before 2004 raise your hand high.

 

17:05  
And if you've been investing before 1998 Raise your hand. Hi.

 

17:09  
Okay, cool. So I just kind of shared three different cycles that if you weren't investing, you would go back and research. So I would suggest that it's funny as my name is Matt Atkinson. I'm a mortgage lender since the end of 2001. I've been investing since 2004. I bought my first property actually in Orem, which I still own. And here's three things that I'm doing with the shift. I love what Dave shared, I actually met with him like 11 years ago when he's trying to buy like this triple net lease and all this extra money and it's cool that he bought some properties, and he's just rolling up. So here's three things that I would encourage you guys to do. Number one, I'm cashing out a properties I've owned for more than 10 years, because the deferred maintenance and the management's eating me up so the arm options. The second thing is, as I have six months of expenses on all of my portfolio, so I'm not holding that in cash, but I lend out

 

18:00  
hard money in notes, it's an awesome way that you can get your money back quick. So I think I'm capitalizing and cashing out and actually going to pay the tax to offset last year and this year on properties I've owned since 2006. And then the third thing is that I think is really smart is rolling up. A lot of times people don't utilize that enough. So depending on what part of the market that you feel that you're in, I gotta be honest, real estate is all about lifestyle. So it doesn't matter how many doors we have, or how we're getting taxed for buying this new development. But if you can complement your lifestyle and be able to do what you want to do, that's really what real estate's all about. So those are the three things that I suggest so having six months of living expenses for all of your real estate, utilizing notes. Number two is I'm cashing out getting money right now and then number three is I really love the arm option. You really made me think to go research that again, it's a mortgage lender. So those are some tips that I'm doing right now. Awesome. Thank you. Pens should be flying or backing it.

 

19:00  
You're taking notes that way. Okay, so great news and update. Tim Howard will be here on time. So we're on schedule and everything is okay. That is really great in my world right now and yours.

 

19:13  
Okay, panelists. Thank you. What a great start. So I made up a little game while I was up here with a dry erase marker and this piece of paper. So I'm going to start it, panelists. First Person raise your hand gets to answer the question. Cool. And I want to Andres.

 

19:29  
First off, what do you see as far as your predictions of supply vs demand in this market going forward the next year?

 

19:40  
Mr. Miller

 

19:42  
Yeah, that you Tom market specifically because it's too hard to go that broad with this audience right now. For our for what we do, townhomes, I don't think we can build fast enough.

 

19:53  
And I think that for the foreseeable future.

 

19:57  
If we can, we can find land.

 

20:00  
I think there's would always be a buyer. Excellent. I love it. Okay, so here's another way to rephrase that question as well in a follow up to anyone on the panel supply and demand 2008 versus what you predict for 2019.

 

20:15  
In our real estate market, what's the difference of this correcting market supply and demand versus 2008 supply and demand?

 

20:23  
Matt Atkinson.

 

20:25  
In 2008, you had a lot of people buy 100% financing, stated income loans didn't have any reserves, because I gave them those loans. And then 12 months later, as the economy started getting worse, they became an accidental landlords. So accidental landlords became landlords, and we bought their properties short sell subject to other things like that. I think because of the strengthening with lending, that's not going to happen again as much because what you qualify for us what you qualify for, so I think that we won't have a bigger like gap and then also

 

21:00  
On the rental side, I've got 91 rental properties here in Utah. If we market them correctly, we're turning them in three days. So the rental is super strong. And then the first the first time homebuyer, there's even a bigger gap. So I just don't think it'll be as catastrophic unless something else happens. So we don't think about correct. I'm going to regurgitate a little bit about what you said that I definitely want to point driven home to anyone who hasn't totally clearly recognize this. The buyer in 2008 didn't ever have an intent to be a landlord or to live in the unit and did not have capital risk.

 

21:35  
It's a very different intent to investing than we see right now. The buyer today qualifies and it has an intent to occupy or has an intent to be a landlord. Right away off the bat intent from beginning to end action flows through their risk tolerance to a market correction is so much different because it's stabilize it is simply the market doing it

 

22:00  
It's not a complete collapse of people that were not qualified to be in the market in the first place. A very different reaction to this market trend as I see it, and the arguments.

 

22:14  
So, I think anytime you look at real estate, real estate is cyclical, it's going to go up and down with the economy. If you look at just macro economics and you start looking at numbers, job growth, okay, jobs report that came out yesterday 322,000 new jobs, extremely healthy.

 

22:37  
The December report extremely healthy. And if you look at this market as a whole, Utah, again, the job growth in this market has been a whole and I would say any market you look at you It goes back to some of the the points that were made in some of the other presentations. I attend grants presentation, he said, when you do student housing underwriting,

 

23:00  
The university. Absolutely brilliant. It's the same with real estate. If you look at a market you got to underwrite one of the dynamics of the market is that a healthy growing economy? And so, this time is is very different because last time there was this huge bubble. That was that was all this subprime debt. And, and this time,

 

23:26  
you know, there's there's continued growth.

 

23:29  
And one of the things I would say is look for information that is generated from those markets, the Kim Gardner Institute, here locally in Utah. They do a ton of research. There's a publicly available report. It's the 2019 Governor's economic projection. It just came out two weeks ago, and it's from probably the most well respected Research Institute in the state of Utah.

 

24:00  
So they're going to have a lot of really good information. So I said, whatever market you're in, go find those sources of information.

 

24:08  
Excellent. Okay. Oh, go ahead.

 

24:11  
I was just going to add that I think the behavior of the capital markets is totally different right now than it was, you know, 10 years ago or leading up to the last downturn.

 

24:22  
On our apartment deals and student housing deals, were financing those, you know, maybe 60 to 70%, LTV, we're not seeing these crazy 8590 or hundred

 

24:35  
LTV loans. So I think that the banks have been pretty conservative and they want real skin in the game. They want cash into the deal. And the second thing is, from an investor perspective, it seems that people are focusing a lot more on just cash on cash returns the fundamentals of the deal, holding it for the long term, real with a huge focus on cash flow versus just purely appreciation. So it feels

very different. Excellent. Thank you.

 

25:00  
I need three volunteers for this one best real estate investment you've ever made. And why 30 seconds, three hands.

 

25:10  
Randy looky Christina whoo de bout or de de Paul read. Yeah, so this kind of ties in with the theme. The best real estate investment I ever made was actually my primary residence that I bought in Newport Beach Grove Del Mar just a little southern part of Newport Beach just before Laguna Beach. And it was I bought it in 1993. And you know, this is going back to your your point before about 1998

and I've been doing this for 32 years.

 

25:39  
93 was another recession in real estate, a big recession real estate. Back then the savings and loans which of course have gone the way of the dinosaur all went out of business, and the savings and loans were all assets were all taken over by the resolution trust Corporation, federal agency that took over the basically the banks foreclosed

 

26:00  
And then the resolution trust foreclosed on the savings loans right that's how work so I bought my house from the resolution trust I tried to buy it from the buyer but before the bank before closing that but before I could buy from the bank, the bank went into foreclosure the following this is pretty crazy. So so it took about a year and a half to actually finally get the deal closed. And I can remember I was standing at a on a dock in Catalina Island with this funky cell phone and my wife's talking to me and I had to stand out at the dock so I kind of any kind of signal and there were three people bidding on this house in this recession. Yeah. And I bought it for $625,000. And this this, keep in mind that the house before this that I that I own, like a $200,000 home. So this is like a big leap right back in 1993.

 

26:53  
bought the house and it was kind of like remember the show the monsters remember that show?

 

27:00  
Monsters, and everything was just like gross and falling apart. This house had a swimming pool that was solid green. It had bushes coming out of the kitchen. It had it was just it was amazingly awful. It was the perfect house to buy, right? So we bought it, we fixed it up. We moved into it. We lived in it for 13 years, I sold it for $2.3 million. And that was the best real estate investment I ever made. And I got to live in it for 13 years to boot. Thank you. Okay.

 

27:30  
Christina Whoo.

 

27:34  
I'm tempted to say fake. You can.

 

27:39  
But I won't. She said fake.

 

27:44  
Fake has been really good. But you said singular investment and I have so many fake investments that I feel like it doesn't lend to the spirit of the question. So, mine is actually I'm from California from the Bay Area, remember? So this is going to be

 

28:00  
Many of your minds

 

28:02  
there was a brand new construction, four bedroom three bathroom 1700 square foot townhouse at the steal of a price of a million dollars in 2014

 

28:16  
Wow, not the reaction I was thinking thinking wait

 

28:21  
and I saw this you know saw this posted the the listing agent wasn't doing it any favors because they said drive by before even bothering to call me.

 

28:33  
So I did business

 

28:37  
well it was the developer can you imagine?

 

28:40  
So I drove by and you know this it's one unit at of six through a an up and coming area of Mountain View California.

 

28:52  
half a block away was a trailer park nothing against trailer parks but it was right there. And on that same block

 

29:00  
Bunch of condemned homes. And so I could see how that neighborhood was not great. But it was walking distance to Google clod.

 

29:10  
And that's really meaningful. Because that means you know, a lot of people can just walk to their very high paying jobs. And then I research Well, what's going in here? They're all these fences and all these signs don't trust press. There are going to be luxury townhouses built right there.

 

29:27  
All three level, the townhouse we ended up buying was to level and so I am so thankful that my husband just trust my instincts, because we really had nothing to go on except of floor plan. A warning from an agent to drive before you even bother calling. And we made an offer on this property, bought it moved into it, and this was in June of 2014.

 

29:55  
My family I stayed there for two years and had a wonderful experience living there made good money.

 

30:00  
Friends as our neighbors

 

30:03  
Sure enough, the luxury town houses are built around there, the entire neighborhood was cleaned up. I sold this property last year for $1.85 million

 

30:14  
bought it in 2014. Because my husband and I lived there with our family for two years, we took $500,000 of capital gains tax free, put that in our pockets, actually put that into fig.

 

30:29  
Thank you. And we did a hybrid. So for the other $300,000 that we're that remained, we actually did 1031 exchange into five separate fig investments. So for those of you who are interested in ways of creating value, you can really do so with your primary residence because of the tax some of the tax advantages of owning real estate and being able to do this hybrid 1031 exchange while taking

 

31:00  
500,000 Thank you. Thank you very much.

 

31:04  
All right, Dave. All right.

 

31:07  
So greatest investment would be last year when I bought a few Bitcoins. And just getting

 

31:15  
back.

 

31:18  
I would actually say, I'm going to go ahead and say fig with the 12. Four Plex is that I've purchased from, from these guys, specifically, the ones that I first start off with about five years ago, and I bought three of these for plexus. And you know, and the cash flow has been a couple things. One, I always have a goal keeping a debt elaboration around 60% Max, just to be conservative, relatively conservative. And one thing I've enjoyed that but 20% down on a four Plex, but by the time it's completed, takes a little while sometimes, but

 

31:50  
there's actually a built in equity where it's close to about a 60% loan about loan to cost, and so sorry, loan to value. And so that's been really, really fun.

 

32:00  
The cash has been amazing on the way you know as a all the tax depreciation tax benefits help offset the other income that I make outside of my real estate ventures is very beneficial as well. And then on top of that with having no cost segregation with having Corey managing it is phenomenal on the property management side. And then to be able to 1031 those you know, and be able to go into other projects like a you know, a boss, a gym, and some commercial stuff. And, you know,

 

32:29  
when these 20 Plex is we're working on and to be able to, you know, go and sell one and then multiply that into, you know, two new four Plex is adding extra capital. That's been really fun for me. It's something that you know, it's creating real value. It's tangible, it's pretty simple model. So it's not a crazy cool story, but you know, it's just a it's been a really good rate of return for me, and I really enjoyed. I've been laser focus for last 10 years on getting a passive income. Do you all have true financial have our cost of of

 

33:00  
Living covered. And that's truly is financial freedom. I think that's something that's it's a great position to be in. And so for me, I've had a lot of little speculative, you know, investments that have been fun. But when it comes down to like, good, stable,

 

33:15  
you know, more conservative, conventional investments, I'd say four boxes. Awesome. Thank you. Bye bye. You can find me lunch later.

 

33:28  
I bought a property in 2009 in Ogden, Utah for $32,000. I sold it in so that's my best one. I sold it in 2015. For $65,000. I did a reverse exchange and afford a traditional exchange. I bought a four Plex, a duplex and a single family residency all seller financing for $650,000 from that cell. I pulled comps on the last week or last month for presentation for some other organization and it's worth 1.3 million here in Salt Lake.

 

34:00  
Rent when I bought it in 2009 was $625 a month in Ogden, the gross rent now on the four Plex the tribe, the duplex and the singles 9000 a month, how I would have made that better knowing what I wouldn't know now is I would have bought it in a Roth IRA.

 

34:16  
So, excellent.

 

34:19  
Thank you. Okay, so I have a quick follow up. So Dave already said laser focus. And there's, there's, let me just give a little bit of light on that. Dave will come when he wants to buy in multiple investors in here that have come, they come with their spreadsheets of exactly what they want to have achieved. And then they'll grab a sales agent corner center room, tie us up and say, Tell me exactly how you're going to get me my goals. It's pretty close to that right. And,

 

34:47  
and that's actually really invigorating because that's an educated investor. That's someone who's has an action plan, they will act and go and they will do it. If you just give them the green light.

 

35:00  
Of how and so there's a takeaway a lot of these people just talked about something they did. You had a plan you executed and did it. And real estate investing is exactly that. So I have one last question before it's opened up to everyone here. And two people favorite or most inspiring book

 

35:26  
all right.

 

35:28  
Not really centered around real estate but Extreme Ownership. I Jocko link, navy seals, SEAL Team Six, really good actually share that recommendation to a few people in the room and it's been mandatory reading for all my leadership teams. And and yeah, so that's one. Let me go to the top top one here. You have it. Next Next person. Thank you, Paul.

 

35:53  
So my favorite book tends to be the most recent one I've read and the one that has inspired me actually

 

36:00  
Why I'm reading now I think is really, really good if folks are looking for something interesting, which is Ray Dalio, his big debt crises. I mentioned this in my presentation earlier. But he has this fantastic Ray Dalio is the founding partner of Bridgewater capital largest hedge fund. And he has this fantastic sort of analysis. He has a 30 minute video you can see on YouTube to I'd recommend that talks about how macroeconomics work basically, it talks about a 75 year debt cycle that is created out of the use of credit in the economy and how it is mechanical and predictable and leads even things like populism because credit extends the value of assets that the wealthy hold, but not the working class. Anyway, fascinating book if you want to have some food for thought on how to think about the next 1020 years ratings were in a similar place in 1937. Lots of people are debating that online, but it's really, really interesting book. Excellent. Okay. We're going to open up the floor to everyone out here. Thank you so much panel, be ready. They're going to fire some great questions. Now how this will work. You raise your hand

 

37:00  
You say your question, I restate your question because our recording team needs to hear it go through the mic system so that we can have this in your recording that you have later on. So hands fly to the air. What questions are in the room? for Mr. Miller? You said you're in three markets. You say you're going into five floors yours. So we're new Tom Selleck, Metro,

 

37:21  
Boise, Idaho, Houston, Texas, will be in Phoenix, Metro and Dallas.

 

37:33  
Next, Matt Atkinson.

 

37:36  
Questions for Randy. Knowing what you know now what are the three things you would have done differently if you started all over?

 

37:44  
Yeah, that's that's a great question to ask somebody that's 66 years old.

 

37:50  
Yeah, because you know the expression If you only knew now which are known then what you know now and now I have no excuse because I do know it right.

 

38:01  
You know, real estate has always been a part of me. You know, I think back. And I don't want to go on too long with this because I think it's a good story. But my, my, my father passed away when I was about two and a half years old, had a heart attack and

 

38:17  
my mother raised my sister and I didn't remarry. And she raised us because we had two rental properties that provided the income for her so she didn't have to get a job. And with a little life insurance policy, and that real estate, you know, my mom was able to take care of us our whole life. And I think it had a big impact effect on me in terms of, you know, realizing the value of real estate and what it can what it can do. So if I could do just one thing all over again, I would have started acquiring more real estate younger held on to it longer. And and I would just continue to do that because it you know, I you know, this is I know I'm strange. I'm a financial advisor. I'm a fiduciary. I have

 

39:01  
$20 million of my clients money in the stock market. And I wish it wasn't there. Right? I wish it was in other places. But it needs to be there because we have to have diversification too. But real estate is this kind of magic product that does all kinds of things for all kinds of people in a lot of different ways. And that's why I'm such a big advocate for and I guess that's why I'm here. Yeah. Thank you. Thank you very much.

 

39:22  
Any other questions? So I'm wondering, is there a general rule of thumb that you feel comfortable with how quickly you get out of property? Because if it's producing well for you, and I realized they'll be maintenance requests eventually, but how long can you keep in a property before you feel like you need to 1031 in

 

39:46  
my personal opinion, is it all depends on what your individual long term goals are? Right? That's passive income. It's more just accumulation of you know, of wealth. And so for me, when I first got started, it was all long term.

 

40:00  
I was gonna hold on to everything as my retirement fund and it was all very, very long term. Since then, it's evolved a little bit where I want to hold some of the long term but I also want to be able to pivot and to be able to to take advantage of the market. And to be able to,

 

40:15  
you know, to be able to be agile and move and and really have more of an equity play with more doors. And so

 

40:24  
and I love what, what what you mentioned about having some of your loans be short term, the more recent four Plex is I'm buying, I'm doing you know, some of them are 30, some of them are 10 years, some are seven your arms, just so they have a mix. And I can I can can take advantage of those, those the timing in the market.

 

40:43  
But I really, you know, as a takeaway, I've never looked at it as a really short term thing of just like five years but in my personal the way I'm operating is I want to have all options available at all times. So now there's necessarily a fixed this is the right way of doing it. I think we need to be able to be flexible pivot

 

41:00  
Secondly is it depends on what your long term goals are.

 

41:03  
Awesome. Thank you.

 

41:07  
Randy. Just a quick one liner. I mean, my philosophy has always been buy property with the intention that you hold it forever, but be willing to sell it anytime, right? And that way, you know, you have something you want and it's worth keeping. But you know what, if the opportunity comes along or the need to sell it, you're married to it, you only sell it anytime. So if you're getting started right now, what would be your first investment that you would do?

 

41:33  
Mike just gave me the answer. And and it was for plexus. But the trick he didn't know is that's what I was going to answer.

 

41:43  
That my first real estate investment was a four Plex It was a four Plex, but built in 1943. Obviously, long before I was born.

 

41:54  
And

 

41:57  
I think that

 

41:58  
it gave me

 

42:00  
The experience, I was doing property management, I was doing maintenance, I was doing everything. And so as a being that involved in the property, it gave you a real life view of what it takes to be in real estate. Because as you grow your real estate portfolio, at some point, you're not going to be doing the maintenance. And at some point, you're not going to be doing the property management. And at some point, you're not going to be doing the different aspects of it. But yeah, if you know how each of those aspects work,

 

42:31  
then you know the pitfalls that can happen there. And so for me that on the job learning is is the best way so

 

42:42  
you know, for my kids for their, if they made their very first real estate investment. I want them to be mowing the lawn of that thing. I want them to be collecting the rents I want them to be dealing with the tenants and because it it just gets you involved and then you're able to identify

 

43:00  
Quality providers when you move up to the level you guys are at, and and the people that do a good job of providing either quality construction quality property management, quality, asset manager, whatever it is, you can see the differentiation and that and and those groups will be successful, like what figures done. They blew up because they did a quality job of those different aspects. That work, Mike. Okay.

 

43:30  
Hi.

 

43:32  
Do any of you feel like you're too heavily invested in Utah? Like I know, Christina, you're from California, and you talked about investing

all of

 

43:42  
your money or the profits that you made into Utah?

 

43:47  
Do you have plans for investing outside in a different city perhaps or?

 

43:56  
You're out do you have some specifics? She wants to call you out which one that

 

44:00  
Just like don't maybe Christina. And then like Dave, you mentioned that you have like 12, four boxes a new time. Just wondering like if you guys are planning to expand outside of Utah or so yes, I have investments in Idaho as well through four Plex Investment Group investments in other states through other vehicles.

 

44:19  
But to say I have all this tied up in Utah.

 

44:23  
Well, that's true. I have properties, though, in Harriman and American Fork, in Eagle Mountain. And these are all very different areas, different dynamics within the great state of Utah. So I actually feel very diversified. still taking advantage like, when I first met my husband, I would say go big or go home, like he would want to buy, you know, 10 shares of a stock and I'm thinking it's not even worth the transaction fee. Like, you know, if you've done the work and you feel really good about an investment thesis, put some real money

behind it. None of this

 

45:00  
10 share stuff. So I feel like I did a lot of the work on Utah

 

45:06  
really like it. But I still have the diversification of being present in different locations and sub markets within Utah. And that gives me comfort while still feeling like, I'm going to do well with my investments.

 

45:22  
That's great answer. I think so I started out only in Utah. And I think Utah's economics look phenomenal. I think that I mean, every data point right now and you talking to us, you look really, really strong. So I don't have any concerns with only being in Utah. However, you know, my recent acquisitions are in radian and Texas. And so I did want to expand a little bit out of Utah. I think that I've also lived in in the Bay Area for two years, just a few years back and in Colorado, and I see a lot of investor capital coming into the state of Utah,

which is an indicator of where, you know, people in California want to invest here because

 

46:00  
Why because the economics are better returns are better substantially. And so I think it goes back to the point of just research the the general, that macro economics of the market, the state, and but I don't think there's actually a right or wrong, I think it just comes back to your personal preference and a lot of people like to be more involved and to be able to walk the property and to be able to, you know, drive by it and see it. Originally, I was thinking as more minds my my mindset.

 

46:28  
Now I have enough trust in Korea and the property management side of fig that I feel like that can be pretty hands off and expand outside of Utah. So awesome. Thank you. Let's give a round of applause.

 

46:40  
Thank you.

– Fourplex Investment Group –

IREI SUMMIT 2019