Working Capital The Real Estate Podcast

The Old Dawg of Real Estate Investing with Bill Manassero|EP 46

Mar 24, 2021

In This Episode

Bill Manassero spent the last 11 years of his life serving with his family as  missionaries to orphans, abandoned, and at-risk children in Haiti. Before Haiti, he spent over 20 years in business, both in corporations and as an entrepreneur. He was also a professional musician who toured the world singing children’s music. Now that Bill and his family are no longer in Haiti, they need to take care of themselves. Bill has decided to go into real estate investing, to buy rental properties to create income to take care of their retirement years and to have something to leave their children. Bill has decided to share his journey through his website and podcast

In this episode we talked about:

  • Bill`s background, what brought him to real estate investing.
  • How to teach kids to run businesses and instil in them entrepreneurial skills.
  • Diversification
  • Mentorship .
  • Formula for success in managing a real estate business
  • Geography of investing and analytical approach as a key factor of success
  • Something Bill knows now that he wished he knew at the beginning of investing career.
  • The book that listeners would find valuable
  • And much more!

 

 

Transcript

Jesse (0s): Welcome to the working capital real estate podcast. My name is Jesper galley. And on this show, we discuss all things real estate with investors and experts in a variety of industries that impact real estate. Whether you’re looking at your first investment or raising your first fund, join me and let’s build that portfolio one square foot at a time. All right, ladies and gentlemen, welcome to working capital the real estate podcast. My guest today, my pies on his bill Acero bill is, is just an absolute gent.

He is the host of old dog’s REI network, real estate investing for seniors. He got his start in real estate at the youthful age of 58 years old. And you know, the rest is history, as they say, bill, how are you doing today?

Bill (44s): I am doing great, Jesse man. It’s great talking to you by design.

Jesse (48s): Yeah, there you go. You’re you’re in our list of Italians on the show, Jake and Gino kick that off in that we’ve been going strong ever since. Well, thanks so much for coming on the show bill. I got introduced to your podcast. I can’t even remember how long ago now, but it just, you know, when you’re looking in for real estate podcasts or investing, you see a, you look at some of the unique ones that come up. And when I saw years old dogs, and then I saw for seniors, I was like, well, this is interesting.

And I think to correct, and for everybody out there, although it says for seniors, it’s just a wealth of knowledge. And you know, maybe before we start here, we can talk a little bit about, you know, the background and it’s the first time, you know, maybe one other guests started their real estate career after the age of 50. It’s not the natural thing or the common thing you hear. So we’d love to hear that story and share that with the listeners.

Bill (1m 44s): Well, sure. Yeah, it’s, it’s, you know, it’s kind of a long story, but you know, I guess the overall thing is that, you know, I was, it was in business for many years, 20 plus years. I had been on the corporate side. I had been the entrepreneurial side and automotive technology, you know, consumer goods, just a variety of different areas. My focus years back was primarily in marketing and advertising eventually have my own advertising, public relations firm.

And so I, I kind of did all that stuff before I, you know, I started moving in in a different direction, so to speak and know I loved, you know, the fast paced stuff, you know, I got married, I got kids. And, you know, I, I was, I was always gone, you know, Nissan motor Corp was one of my clients. I spent a lot of time in Japan and you know, I got <inaudible> growing up and, you know, I’m just kind of going, you know, this is not what I, this is not what I signed up for.

And so I, you know, had a, a calling that, that happened where I was actually called it in the mission field and, you know, right in the middle of this. And I’m kind of like doing all these other things. And I just signed up with a new internet company that started out with, started by Meg Whitman and a handful of other people from the Bay and different places that, and I thought, well, you know, this is great. I mean, I’ll do this for a year. And then, you know, with my stock options and whatever, I’ll, you know, I’ll just, I can go to the mission field and never have to ask anybody for money and I’ll be great.

You know, everything will be fine. And almost a year to the day that I said that they ended up bubble burst and, you know, our stock options, all of a sudden were nothing, you know, unfamiliar to nothing. And I said, okay, I’m going to go on the mission field. And I think it was God’s way of saying, you know, okay, now I want you to do it in faith. I don’t want you to put your faith in your nest egg, you know? Yeah. And so it was

Jesse (3m 57s): When you say mission field, you’re talking that for the missionary, right? Yeah, yeah, yeah.

Bill (4m 1s): Got it. Yeah. We, you know, I had a, even when I was in business, getting later in my life, you know, later on I got, you know, I have a, just a transformation in my life and, and, you know, it was volunteer and doing a lot of things locally for, you know, for the church. And, and in that process, I was called into this music ministry and I used to play rock and roll when I was younger, too. That was another, another thing that my best and, you know, the LA club scene and all that, and kind of playing was wasn’t in that mode anymore.

But I was writing songs for kids and, you know, and, and just kind of doing this on my own. Yeah. As a Sunday school teacher and some of the parents picked up on some of these songs that I had written because I used to write a lot of songs back in, you know, rock and roll days. And, you know, there’s definitely a different kind of influence on the music because, you know, I kind of grew up on led Zeppelin and all this other stuff, you know? And so the, as I was writing what was called alternative buildings, music, you know, and anyway, a lot of parents to me about, you know, recording these songs and I finally ended up in the studio, made an album, you know, for the kids or what have you.

And it just got picked up on to radio stations, you know, that it’s music and Christian music and all of a sudden, you know, it’s being played on a hundred different radio stations around the world. And yeah. So yeah, so people are calling up and saying, Hey, do you want to, you know, come back for this event or this festival or whatever it was and stuff. And so, you know, I would do it on weekends in between launching a new internet company, which, you know, there is no weekend, you know, I mean, it was like really, really tough. And, and so, you know, I figured out, yeah, I was going to do this kind of thing for a year.

Then I was going to quit and go into full-time, you know, and the thing I liked about that was doing is that my whole family was with me, you know, I had in my kids were in hand motions and my son was playing guitar. And, and, you know, I mean, everybody was doing something. It was kind of like, you know, the Partridge family or something, you know, it’s like, I don’t know if you ever heard of that.

Jesse (6m 15s): Yeah. I just find it, I find it fascinating. The it’s like David Gilmore meets Robert munch.

Bill (6m 23s): Well, exactly. Yeah, it was, it was a real, it was a real thing for me. It was a real change and it was, it was fun somehow it worked, you know, and we just got, we got amazing experience, you know, ended up in three albums, traveling around the world. My kids would, you know, go with me. Sometimes I could the whole band that would take my daughter, who, who just loved, you know, being out and doing these kinds of things. She was only like nine or 10. And, and while we were doing this, we used to partner with these other organization and world vision and compassion international.

And my daughter used to love why we’d go to these, you know, these big events to, you know, sit at their booth. And then basically they would, you know, people would sponsor kids. And so she loved, you know, helping people sponsor kids. And then one day she asked me, she said, add, you know, Hey, can I sponsor a kid I’d love to sponsor a kid and then say, well, you know, you gotta be responsible if you’re going to do it, you gotta take your violence and you’re gonna have to, you know, do that. And, and are you going to be serious about it? Oh yeah. Yeah. So she ended up sponsoring this kid from Haiti and what happened was, you know, she, she was really excited.

His name was Donald. And so she kind of followed his story. And then she started researching all about Haiti and everything about Haiti. And one day, basically, she just told me, she said, you know, dad, I’m going to build an orphanage in Haiti and I’m going to, you know, grow up and I’m going to go and do this. And, and, you know, I want to do a school and all these other things. And I said, wow, that’s, that’s amazing. You know, I mean, if you want to do that, you know, and so, yeah, I figured she’d grow up, she’d go to school.

And then she’d eventually, you know, go off and in the mission field. Well, anyway, we, I got an opportunity to do a concert series in 80. And so we went over there and, you know, it was just kind of, you know, it wasn’t something we really planned now. We just did it. And we picked some of our songs and translated them into French and Creole so that it’s could understand them. And we would get, we got there and we’d get off the plane. And, you know, they, the planes, at that time, they didn’t have a tarmac.

It just loaded, got runway. And we got on the runway, my daughter just got down on her knees, kissed the ground. She says, daddy, I’m home. You know, I go, wow. You know, I was just really moved by now. She’s like about 12 more, closer to 12. And so we, we went on this amazing trip around there. We ended up meeting a lot of the kids that lived on the streets of Haiti, which were just broke our hearts. I mean, kids saw them as young as four years old, there’s trafficking, there’s all kinds of stuff going on there.

And we were just like really moved by it. And after that time, we, we hopped on the plane and we were heading home and my wife’s sitting next to me and she goes, you know, honey, I think we’re going the wrong day. You know, I think, I think God’s got something for us in Haiti. And I go, ah, yeah, I’m not hearing it. I wasn’t ready for this. You know? And we got back and all of my kids and everybody were all saying, yeah, dad, let’s go to 80. Let’s go to Haiti. And so we, it’s a whole series of events happen and we ended up basically, I said, yeah, we’re going to go.

I was sort of the last one to kind of hear God’s voice there. And, and we basically do sometimes.

Jesse (9m 51s): Yeah. I guess in that case, God’s voice is the wife.

Bill (9m 55s): Yeah. There’s that funny? How that happens? Yeah. We basically, we sold everything, you know, Oh, what happened is the internet bubble burst. And I didn’t have all this money. I thought I’d have to go into the full-time you mentioned field. And so we ended up just walking in faith and just got rid of everything, sold my house, gave everything else away. We hopped on a plane. We had 14, these big rubber bins, these Rubbermaid bins. And that was much our whole life when it was left.

And we just went over there. And we, there was this handful of kids we had met when we had first went, there were street kids that just really touched our heart. These kids, they had a horrible experience with the person that was caring for them. And, and so we went over there to these kids to get started and ended up starting in an orphanage. It was first started a boys home that we started a girls home. And then we, we went to a school, a medical clinic, and it just kept growing, kept growing in any way that ended up being, you know, our, our life.

I’d never done anything like this before. You don’t have some business. And even though I, you know, we were, we were supported, supported by donations from people and so forth. I would look at the budget like every month and I go, you know, we’re not going to survive a week. You know, we’re not going to make it. But surprisingly, every month we, we always had enough. We always had enough. And it was just kind of like that. I got to the point where I said, you know what, I’m not going to look at the budget anymore. I’m just going to do what I’m called to do. And, you know, that’s, that’s basically, you know, what happened for 12 years?

We’re there, we’re there during the earthquake 2010, we had, you know, amazing experience during that. It was a traumatic time, you know, wonderful things happen. And, and, you know, a lot of families, we were able to build over 300 homes for people that have lost their homes. And we took a lot of kids that were orphaned into our orphanage and it was, it was awful time. And so a lot of things happened while we were there too. CNN ended up, they were there during the earthquake.

They ended up putting a documentary on us and called rescued and Oprah Winfrey came over and interviewed my daughter who had the dream about Haiti and our whole family. And so it, it, there were just a lot of stuff that happened, but you know, it was getting, you know, after 12 years or so, my kids are growing up, they’re starting to go back to the States to go to school. A lot of things are happening and we’re just kind of praying about whether or not we should stay or go. And so we decided to do a, a little, a sabbatical and believe for a year and see if this is really, you know, what we’re supposed to do.

And, and while we were over in the States, you know, we really felt this is where the Lord wanted us to stay. So we, you know, so I’m like, you know, before I left though, I was kind of going okay, if we do go there and we decide to stay, what am I going to do? You know, I go and get, you know, which in 60, and I’m not going to go, you know, get my resume and kind of run around and, you know, try to, you know, even advertising and the industry I was in aims so dramatically, you know, they didn’t even have social media when I, when I was in marketing.

So it was very different. So I’m kind of going, well, what am I going to do? And, and I’d started businesses. So I kind of felt most comfortable as kind of looking at, okay, well, maybe I can start something. And, and we had this, this vocational training program, we’d set up for the kids in Haiti because like the percent unemployment there. And so, you know, even if you go to college and you get a college degree, there’s no guarantee you’re going to be able to do a job. So we did is we, we started these little, we called incubators businesses, get a furniture, making business, a silk screening degree, making all these different skills that the kids could learn while they’re in the orphanage, so that they, when they graduate, not only will, they know a skill we had since classes and we taught them how to run a business.

So, so they could actually leave and be able to have a way to survive. Maybe you can go back to the village that came from and, and start a new business. And so, you know, we were, it was part of our focus. And one of those, we, I set up a, it was an internet business or teaching kids how to sort of do drop shipping and different businesses on the internet. And, and while I’m doing it, you know, the kids were doing, they’re making more money and whatnot than most people making 80 in a year, you know, and it was, it was really going well.

And I said, well, maybe I’ll do this business when I go back to the States. And I was kind of looking at that, and I was looking at all these different alternatives and I ended up getting kicked off the DBAs. I went to get kicked out of the you Bay. You’d never go back. It was, you know, cause it’s w it’s this sort of drop ship model where you things on, on Amazon and sell them on eBay. And we, it was the Christmas season and we kept running out of things and people kept writing bad reviews. I think that took us three reviews and I was out, no, but luckily the kids businesses stayed.

So they were able to keep doing it, but I figured I’m going to have to do something else. And I got this unexpected DEC and inheritance check. And I, I had been like, as I mentioned earlier, I was all due for awhile. So I had a lot of tech stocks in that, in that area. And for a long time, and I got this check and I didn’t feel comfortable. The market was kind of volatile at this time. And I was going, I just don’t want to throw that in the market. I’m going to do something different. So I’m looking to diversify. I was looking at everything from Nitties to just, you know, what types of investments gold or whatever it may be.

And I started looking at, at real estate because some of the guys on our board of directors for our nonprofit organization, you know, we have to serve in Haiti and they were in real estate. And I thought, well, maybe, maybe I’ll just do that. You know, I hear it’s pretty passive, or you can just be a passive investor and you get these great returns. So, so I started researching and I said, you know, this, this sounds like it could be interesting. So I started looking at, you know, what type of real estate, cause there are a lot of different things you can do.

You can get a syndication, you could flip, you could do a lot of those. And so I just said, yeah, I kinda liked that the rental model. And so I found some turnkey bunnies and I ended up getting three, three homes. I hopped on a plane out of Port-au-Prince. I did some research and looked at markets that look like they’re good markets. I hopped on a plane, flew from Hunter Prince to Atlanta, bought a single family home, a three bedroom, two bath home in Atlanta. Then I flew to Memphis about a duplex.

And I also bought another single family home back to 80. And the next month, you know, money’s appearing in my account. They were already rehabbed. They have tenants in place and this is easy. This is great. No. And I thought, well, maybe that’s what I can do in my retirement. Yeah. I was thinking just as good, just be an investment. But I thought, you know, maybe I can do this and build it up and over time, not only would it be something that could help support we’re doing in Haiti, it would be, you know, something that can hand down to my kids and you know, that could be part of our legacy.

And so I was going, yeah, this is cool. So, so I basically, that’s, that’s kinda how it started. And as I’m doing this, you know, we ended up eventually going back to the States, like I pulled down the sabbatical and we ended up deciding to stay. And while I’m there, all these, you know, friends of mine and people, I know they’re the same age group are talking to me and they’re saying, Hey, you know, what’s going on with your real estate? You know? Yeah. So I just, yeah, I was writing to people and they’re asking me questions cause they’re thinking they want to do it too.

And, and then I was just getting really busy, just writing to them and not really doing a lot in the real estate side. So I said, you know, maybe I’ll write a blog and then I’ll share everything I’m doing. And you guys can just tap into that. Yep.

Jesse (18m 8s): And what, what time was this happening in kind of relation to when you started the podcast? I am sure that was kind of a light bulb moment that you’re like, you know what, instead of writing these, these blog posts, I could actually have a network of people that I can speak to as an audience.

Bill (18m 24s): Yeah. And that’s, and that’s really what happened is I, I, you know, I, I started off on my own with these three D C three properties, and I’m just learning as I’m going along. And, and I, the blog was kind getting to be a kind of a, you know, a thing too. And I knew I needed a mentor because I was running into some challenges with some of these turnkey properties and I kind of kept putting it off, kept putting it off. And I finally just said, I’m going to get a mentor. So I got this mentor and you know, one of the things he told me, he said, well, get a podcast, just like you said, you know what, just do it, get, do a podcast and you can do everything you can do in the blog on the podcast.

Plus, you know, it’s going to be a lot better for you and I’m, Oh man. I said, I’m still trying to learn this real estate thing. All I need to do now is to learn how to do a podcast thing. You know, I go, you know, I’ve got, definitely got a face for radio, you know? So I thought maybe you check you check that box because that makes sense. You know, what am I going to do? So I kind of, I reluctantly said, okay, I’ll do one once a week. That’s it. This guy is doing it is every day. And I’m going, I’m only gonna do one once a week and that’s it.

So I started started, you know, started doing it and it actually didn’t seem that bad. In fact, I really liked it. And not only is it something that I think, you know, that can help educate other people like myself. I think it also is something that, that will actually help me grow my business. As I make contacts with some of these people. I mean, I’m able to talk to Robert Kiyosaki and the people like this that could come on my show and make connections and well that you would never take your call otherwise, because you have the show, it kind of opens you up to that Avenue.

I started making contact with other investors networking and, and it just, just got off. And so I ended up adding another am. So I have a Mondays, I interviewed S on Fridays, I just do a solo thing where I I’ll take some OPIC that really needs to be covered, like cap rates or, you know, lending and whatever it may be. And I’ll do that on Fridays. Those are called fun fact Fridays. And so, so those are the, that, that was kind of how it started.

Yeah. Yeah.

Jesse (20m 43s): So the, the, just out of curiosity ones on Friday, is it kind of shorter format or is it still a long form and you kind of go into a deep dive on, like you said, like cap rates or, you know, a certain aspect of the, of the market.

Bill (20m 56s): Yeah. I really wanted it to be shorter. And initially I thought maybe would like 15 minutes or something. Again, it was kind of third talking and you’re like, if you’re anything like me,

Jesse (21m 8s): We’d say in Sicilian, you gotta start with the CAC Yetta and 20 minutes go by. And you’re like, ah, I think I can tighten this up.

Bill (21m 16s): Exactly. And that’s kind of what that means. It averages about 30 minutes and my, and the other show is, you know, 40 to 50, you know, maybe an hour at the, yeah. So it, it’s a, it’s a shorter, it’s a little bit shorter, but it’s, you know, I it’s really been really great. I think one of the things I really love about the podcast too, is that as mentor, it kind of just talked to me about, you know, bring it as a means to be able to grow my says, but it has me.

It’s been a great educational tool. I mean, I have on my show that are like, like yourself, you know, somebody, that’s the accomplishment of like commercial broker or something, and we’ll pick his brain about how I can make the connections with brokers to be able to get the great, you know, I get a, you know, you have the pocket listings and listings, right?

Jesse (22m 10s): Yeah. I mean, even, even the, like right now, you’re, you’re in Southern California, I’m in Toronto. We are, you know, could be farther away in opposite sides of North America here. And it’s yeah. I find it incredible to be able to talk with people, especially because, you know, in real estate, there’s all these different niches and you’re, you’re never going to know as much as an expert in one field, you know, you, you just, you just can’t know everything. So, you know, you have a syndication, lawyer, securities, lawyer, you have accountants that do value add, and yeah, it’s definitely something that I’ve found is really, really impactful.

So, so bill, you go from buying a few of these properties and you move at some point into the syndication space where you’re, I assume operating more raising capital. Can you talk a little bit about that and, and, and what role you play at what hat you were in in that process?

Bill (23m 4s): Sure. Yeah, basically I, one thing I realized and I told you, first three properties I bought, one of them was a duplex. And immediately I saw the benefit of multifamily just in that one experience. I paid about the same for each property. I was making twice as much with the duplex. And if I had a vacancy, I only had a 50%, could see not a hundred percent. I can see, like I did on the single family homes. And then, you know, and I, plus I only had one roof, one property X, you know, the payment one insurance pay a bill.

And, and it’s, you know, was this thing, well, w this is with two, what if I had four or, or 20 or a hundred or whatever. And so that’s when I started saying, you know, I’m going to, I’m going to set a goal for myself here. And, and I go, you know, one is, I really want this to be because I am still very tied to our nonprofit organization in Haiti. And I thought, you know, gosh, if I could, I could set this up to a point where I can help support what’s going on there that’d be awesome. So I set this crazy goal of a thousand units in six years.

And the only way I could see that happening was to double number of operatives I have every year. And so when I first started off, I only had the double number of pours technically. So, you know, I started off with four doors. And so the next year I had eight orders and so forth and in over 60 1006 years. So that was, that was my plan. That’s an interesting

Jesse (24m 41s): Way to think about it and the power of compounding

Bill (24m 43s): There. Yeah. And, and I figured, well, that makes sense. But, you know, you gotta realize that there are these different Atos that you read for sure. And, and, and so, you know, that I bought another duplex, so this time in Indianapolis and I thought, okay, this is good, but this is really is this is going to take, I still got to make that goal for the year. So I’m going to have to get more than just two, you know, so I’m starting to look at this. And then I happened to find a 22 unit for sale and in a really reasonable in Indianapolis.

So I thought, well, maybe, you know, maybe I can do this. And, but it was real reluctant because it was, it was a big move from residential to commercial. And I, and I, and, and, and granted it process has meant different. You know, you sign a set of escrow papers for the permit. You sign that set of escrow papers for a single family home. You know, there are, there are other things you have to take into consideration. So, so I, you know, waited out, you know, I couldn’t get as good alones, you know, there were some other issues, plus, you know, again, I’m at a state and besting and there’s a whole slew of issues there that I was encountering challenges, you know?

Yeah.

Jesse (25m 53s): Can I ask a question they’re starting to interrupt, just, just because it’s something that, you know, you and I are in very, very expensive markets, you know, cap rates when, when you start seeing twos and threes, like, you know,

Bill (26m 8s): Her

Jesse (26m 9s): Or, or cap rate N a, because there’s just, there’s no income. So I’m curious because any of the investors, you know, whether you’re, you’re up North here out of province or you’re in the States and you’re out of state, so w w what were the geographies that you were, you were investing in? And I guess you’re going to kind of get to the, the, some of the challenges with, with, with those type of, out of state operations.

Bill (26m 36s): Yeah. Well that, you know, initially when I was in Haiti, I was buying in Haiti. So I wasn’t, I looked at, but there was just like, it was ridiculous, you know, because, you know, we have a theme we say on our show, cash flow is King. Well, there’s no cashflow in LA anyway, you know, so, so I was, I was looking at her very little, not to say, there’s none. It’s just,

Jesse (26m 60s): If you buy all cash, you might be able to,

Bill (27m 2s): Yeah. And that’s what you gotta do. You gotta walk around with a couple million in your pocket, you know, just to get an, a game. And so, you know, I’m seeing these homes and, and Lana and Memphis, I should know with these, like, you know, 12, 18% returns, I’m going, gosh, you know, why would I want to want to invest in, in California? So that’s kinda how it started. Then I started looking at looking for emerging markets, and one of them had red. Leon was a by Lin all about emerging markets.

And it really the whole idea of sort of looking at that, that, that big bubble, you know, that you have, and we all experience it. If we’re in real estate and you reach the top of the bubble, and then it’s a start going down the trough. Right. Exactly. And then, but then they start going up and then as they start going up is where, you know, you’re looking for an emerging market or investing, and you want to be able to sell before you reached the top. So there’s still meat on the bone for buyers. Meantime, you’ve increased rents, you’ve your, your equity is going through the roof.

You know, some great things are happening and the value add type transaction. And that’s where I was looking at.

Jesse (28m 13s): And, and just, just the, to confirm that that’s real, sorry, emerging markets, that’s a David Lynn,

Bill (28m 19s): Actually David Lindahl, M I N D a H L Dave, Lindahl it book. And it it’s, it talks about that, that whole approach, which is he has 7,000 some odd units. And that’s, that’s how, how he got into, into apartments specifically. But he was also my show. He’s, that’s how I got to meet him early on.

Jesse (28m 45s): That’s really cool. I, I don’t, you know, you don’t hear enough about, about that discussion or at least, at least we don’t, I guess you, you get people so focused on investing in one locale. Yeah.

Bill (28m 55s): Yes. Yeah. And, and that was, you know, and again, I didn’t want it to be too many. I, I, I always at least three markets that I could really know. Well, I think the, you know, your market, the more successful you’re going to be, because you can get involved in a market in, you know, you can go one neighborhood over and, you know, it’s, it’s a whole different ballpark and, and, you know, the homes are not being well. There’s, you know, there’s a, it’s becoming a rental market in, you didn’t know that before you went in there.

I mean, it’s okay if you’ve got a mix of rentals in a homeownership, but you want to make sure that you’re in a place where, you know, the equity is, is increasing. So, so that was, that was part of my process is learning how to evaluate markets and where the jobs going. Where’s the population going? What, you know, w what’s the ratio, you know, for rental versus home ownership and, and just all the various factors that you factor in there.

And you look at where, you know, a good market could be in, and that’s, that’s basically the approach that I was taking. And

Jesse (30m 8s): So you you’re, I think you had on the show, Neil Bawa, he was recently on our show. And just cause a lot of what you’re talking about is, is very, very much in the spirit of, of how he approaches things, you know, from an analytical point of view, whereas population growth, where’s where’s crime decreasing on that point, for those that are looking, say, they’re investing in the States and in their state and they want to look out of state, I assume it would be somewhat similar to, you know, Americans investing in Canada, Canadians investing in the States where, you know, it’s, it’s not just like you, you know, you buy a property there there’s a process.

And I would imagine that some States are easier than others and maybe New York or California might be more difficult when you’re, when you’re kind of dealing with the regulatory aspects. So it w w are there any major things that, that you needed to watch out for w with that process of purchasing out of state?

Bill (30m 58s): Yeah, it’s, it’s one of the key factors is that at least the places that I was looking at were the landlord friendly States and those sort of places where, where, you know, an eviction isn’t going like California and eviction can take a year. It really can

Jesse (31m 16s): Preaching to the choir here. We’ve got a, a landlord, sorry, unfriendly country. I think maybe with Alberta being a little bit more right-leaning or, or I shouldn’t say right-leaning just, just more landlord friendly, but yeah, I totally hear you there. Yeah. Sorry. Yeah. You’re saying California,

Bill (31m 34s): California is not, you know, that was another factor that just made me shy away from that area, because I wanted a place where, you know, if we do have an issue and I work with all my tenants, if there’s an issue, you know, especially during Covid time, it’s not like we’re ready to kick people out, but if there’s a problem tenant, I want to know that I can move that person if they’re on drugs or whatever it is. And so that was a, was a key factor for me. And so I did go into Tennessee and went into Georgia, also Indianapolis, all, they were very landlord friendly.

And that was, that I think is one of the factors, but probably one of the key factors for me, because I was having difficulty in just in some of the rentals that I had. And gee, you know, gosh, if I am having trouble in a landlord friendly state, I would hate to see what it’s like and killing California. So, so at, you know, that that’s, that’s an important part of, you know, finding markets, but again, not into too many markets.

Now, now I’m in a point where I am getting into other markets, but I’m doing it with, with partners, you know? So I basically went from a 22 unit to a very large number of units, actually 539 units and proving Texas. So I was sort of a move and that the only way I could do that is through partnership. Now, up until this point, I owned all my own properties and I didn’t have any other investors other than the bank.

Right. But I, so it was, it was, it was a shift in thinking and getting into syndication required, you know, a lot of study on my part to really understand it. And to also, because I was new at it in the first one, jumping into a much larger property, I had to partner with people. I knew I trusted, I felt comfortable with. And so I began as a GP with that, have this a lot more than I have was, was key for me in getting started vindication.

So

Jesse (33m 51s): For you, the, I love talking about this because, you know, you hear so many different structures from people. And I like to clarify when you started doing this, the, the, the GP can mean so many things, right? You could be the operator, you could be the sponsor of the deal. You could be a guy signing on the note. You know, there’s a number of ways that you could be the GP from your point of view, where you engaging operators that had a track record, or were you engaging people that were able to raise capital and, and I guess, through answering that, what was your role initially as, as part of the, the general partnership?

Bill (34m 25s): Yeah, I was part of what was happening in the process of my podcast too, is I was focusing a lot more in multifamily as, as I got more interested, I kind of turned a lot of my subject matter to multi-family. And that’s where I met people, like on a ton of other people that, you know, thousands of units out there. And in that process, you know, make contact with people. Some people hit it off with some people you, you don’t necessarily, you wouldn’t feel comfortable in the city partnering with, but there was one person in particular who I, I just, you got a great deal of respect for, and I felt on this, this would, this would make sense.

And that, so that made it more natural for me to make that move. As somebody I’d known for a number of years, met him early on and I, I podcast and have done other things with him as well. And so I felt pretty comfortable. I think that’s something you don’t take lightly, you know, especially, you know, with the GP, because, you know, everybody’s gotta do the one has a role and some are, yeah, like you said, operational, some of them are financial. I kind tend to be more on the financial side.

They, you know, that that’s, you know, it’s just, again, the, I with me, especially, you know, getting into syndication only with the sec, I used to years before when I had work relations for, I used to do IPO’s and used to do a deal with the sec, and you don’t joke around with the sec, you really need to know your stuff. And so I was, I was very, very serious. I wanted to with people, I knew that we’re not going to anything that we’re going to do anything, you know, Shane here.

Right. So, so that was an important aspect. And, and that kind of, you know, went up that, that sphere to me in the, on the syndication side, which I knew I would have to encounter at some point, even if I, even if I stuck to my, I, my initial deal of doubling each year, there’s a certain point where you’re going to get to maybe a hundred units plus, and it’s going to be difficult to do that by yourself. Oh, for sure. I mean, there’s not only the, you know, the cash requirements there, but there’s, it’s just, it’s just a big responsibility, especially when you’ve got a lot of investors that you’re going to be bringing a board.

So the able to sort of divvy that up amongst other people that, you know, they can take on those are those, that responsibility is really key and especially being the right people to do that. So that, that to me was, was, was, but it was an important aspect of doing this, is it because, you know, if I would have started myself, I was, I was just about to syndicate a 60 unit building and it just, didn’t just didn’t Bel it was, there were a lot of issues, a lot of deferred capital expended, the expenses and so forth that I just didn’t feel comfortable with.

And I tried to negotiate that into the offer and it just didn’t work. So yeah, that kind of fell through and it was a little frustrating cause you know, I’d been trying and trying and, and this other opportunity came and I go, gee, I, I thought I would be to maybe, you know, a hundred units, but not jumping into, you know, 500 us, you know, units. It was, but it really doesn’t at that point. It doesn’t, it’s really not a lot different. So the amount of money, you know, you’re dealing with.

Jesse (38m 1s): So for the, you know, for listeners that don’t know, you know, what you’re kind of alluding to with private placement, as opposed to doing an IPO is, you know, we all try to get exemptions. If you’re in the States, you know, you’re in the five Oh six <inaudible> world and in Canada, your national instruments. And it’s just a confusing way of saying that, you know, if you don’t want to go with a full IPO, which, which we can’t as people raising money for real estate, because it’s just the deal would be gone unless you’re raising a fund. So in, through that process, where have you gotten to today, or is it a, is a fun that you guys raised together or is it, is it still asset specific syndications?

Bill (38m 41s): Yeah. They’re, they’re asset specific at this point. A lot of my friends have done for funds and multiple funds even. And I, I, just, to me, that’s a little risky in today’s economy. I, I, I, I feeling is that the people that I bring in, I want to make sure that those people are as low-risk as possible. And yeah, and with a fund where you don’t necessarily, the market can shift at any time.

And I think you could leave somebody in a physical situation, their money not earned in that fund. You know, there’s a lot of issues that can happen. So I I’m pretty conservative, you know, I, that’s, another thing about being an old dog is we don’t want to gamble. You know, we really don’t. I want a young guy, like you, you know, Hey, let’s, let’s, let’s, you know, little, little, you know,

Jesse (39m 38s): I think the piece too is, you know, when interest rates were, were double digits, I was in a cradle right there. You know, you lived through, you lived through markets that didn’t just look like a hockey stick, but I mean, you know, it’s, it’s interesting, you mentioned that about funds because we’re starting to see, you know, hopefully it’s not a negative trend, but you’re starting to see a lot of syndicators come out of the woodwork and you’re seeing fund to fund structures. And I think it was Brian Burke. Who’s also been on the show. We were talking about this and he said, you know, there is, and he does funds and he’s done a number of syndications, but he said that there are drawbacks with funds.

And one of the most obvious ones is that you don’t see where your money is necessarily bought at what your money is necessarily buying. Right. They have a little bit more latitude to acquire properties. And that is a situation where you really got to trust the operators because you know, you don’t have the nice thing with syndications or raising money for assets is that if you live in the area, or if you, even, if you want to jump on a plane, you can go see the physical, you know, building, you know, you can actually see what your money’s money’s buying. So I think, you know, that’s a great point.

So bill, I, you know, I, we got to do a part two here, cause we’re an hour in here. No, no, no, not at all. This has been, this has been great. I, I just want to be mindful of the time. So if it’s okay with you, we have four questions that we, we ask every person on the show, a little bit of kind of a semi rapid fire thing. So if, if you’re game for that, we could, we could get that going.

Bill (41m 8s): All

Jesse (41m 8s): Right. Something, you know, now that you wish you knew at the beginning of your investing career.

Bill (41m 15s): Ah, that’s a good, good question. I, I think probably the, one of the things that I knew about, but I didn’t take seriously was ordinance of quiddity and reserves, you know, I started off investing in C class properties. I wouldn’t have die either. So those are kind of two things I really should have started with B, but they’re just so appealing. It’s so cheap and the returns is so big, you know, but, but the problem is, is they, that means there’s, there’s going to be other things required and it’s usually cash and it’s usually capital expenditures.

So yeah, those are the things I wish I would have taken more seriously. First, anybody starting off void see properties, if you can, if it can. And the other is, I would say, you know, minimum of six months of reserves on the property you have.

Jesse (42m 9s): Yeah. It kind of goes hand in hand, right? Like the C C properties and reserves. I’m always looking at the Buffalo market, which is two hours away from me and you see these ridiculous cap rates, but then you’re like, eh, I don’t know if I want to be buying necessarily an asset in certain areas of not in Buffalo, but okay. Number two, we, we kind of alluded to, you know, you brought up one book, but is there a resource that, that you’re into right now podcast or book that you think listeners would find value in?

Bill (42m 37s): Yeah. I mean, there’s, I, I would say that, I mean, there’s, there’s always reading some book, you know, one or the other one thing. I think though that again, in retrospect here is a book I wish I would’ve read early on is sickly. It’s it’s, you know, what’s your, why it by Simon Sinek, it’s it is. It’s really important to know that because I think there, there are challenges in real estate and unless you’re really aware of what your, why is, I think it’s very easy to get distracted, get discouraged to wa you know, it took, I mean, for me, you know, I’m look at first off my family, you know, that I want to be able to offer them this legacy of, of this properties that we’re building up.

And, and I also look at the kids faces in Haiti, and I think, no, if I give up on this, I’m going to give up on them. And I, and that’s, and that’s part of my, why that’s a big part of my why. So I think that’s what keeps you going and keeps you motivated.

Jesse (43m 42s): Yeah, that’s a, that’s a good Y. Okay. So touched on this as well. I always like to get guests thoughts on mentorship.

Bill (43m 51s): Yeah. Really important, good mentorship. And it doesn’t have to be a super guru. It doesn’t have to be, you know, it’s a little harder to find your neighborhood guy. That’s a real estate investor, but it’s possible. And I’ve heard of creative ways. I I’ve had some great guests on that have talked about this one guy offered to cook a meal for this guy that is a big real estate investor down. You know, I mean, people just get all kinds of creative ideas, but you know, you can meet that. I think the key thing is to, is to mentorship is to meet people on a regular basis, you should be having lunch with somebody or, or a coffee with somebody at least, you know, once a week, once, month, and just stick through that and build that network up, and you’re gonna meet somebody in there, that’s got that skill and experience that you’re going to want to tap into.

And then once you just get the relationship going, it gets that much easier. So mentorship is really, it just saves a lot, especially for older folks starting. We don’t have a lot of time for mistakes either. And so you, you need to get somebody that can help walk you through it.

Jesse (44m 56s): Yeah. And I think it’s part of the, you know, you mentioned, well, regardless of starting later in your career, when you said mentorship, it almost like it’s a knee jerk reaction. If you’ve been in business before you’re entering a new sphere, you’re like, okay, I need a mentor. Whereas, you know, sometimes, and I know younger guys they’ll go years with going, Oh yeah, I guess I could, I could go out to somebody that’s already done it. And I don’t know if it’s hubris or, or just it’s that you’re not aware of it, but yeah, it’s a really streamlined potentially years of your career that you’d be trying to learn the stuff on your own.

Bill (45m 30s): Exactly. Yeah. And I throw that in there with masterminds too. I think, you know, a young person, especially, you know, in involved with a mastermind, you know, you’re going to get to meet those mentors and maybe the whole mastermind to be a form of mentorship. But I, I think that that’s really key, but getting around people that know a lot more than you is really important.

Jesse (45m 48s): Yeah, for sure. And last one, my favorite question, first car, make and model. I know we’re going to have a good one. We got an old dog on the show today.

Bill (45m 58s): Yeah. Well this was a gosh, this was, Oh gosh, what is the year of it? It was this orange BMW. 2002. Oh my God. Yeah. And it was, it was orange and I had my surf racks on top of it and a Cabo. What year was it? I don’t know how to be 1970 something. Yeah. Probably seventies early eighties, but yeah, probably seventies.

Jesse (46m 26s): So it’s funny you say that because my buddy Anthony, he bought a T a 2002, I think it was in 1976 because like, they’re becoming a, they’re becoming a collector car now. Like if you can get them in good condition, it’s a beauty, it’s a beautiful car. If anybody, you know, if anybody hasn’t seen one, just Google 2002 BMW it’s, it’s not make sure you put the old one because you’re just going to pull up a year, 2002, but they got the beautiful, beautiful cars.

Bill (46m 51s): It was a fun, it was a fun car, you know? So it’s, yeah, it’s great.

Jesse (46m 57s): Okay. Bill, for those that, I mean, I always say everybody’s a Google away on the show, but if there’s any specific place that, for those that want to hear more about either the podcast, but what you do, what’s the best place to reach out to you?

Bill (47m 11s): Yeah. Well the best it’d be the, our website that has our podcasts there and our block and that’s old dogs and da WGS REI for real estate investing at work. I’d come and, you know, Hey, if you’re, especially, if you’re an old dog, we’d love to have you us man. There are, what is it? How many of these guys yell like 10,000 a day turning 65? You know? So there’s a lot of folks out there. And, and as flow is, is an issue and, or just, you know, having good investments in that nest egg and growing it significantly with real estate is also another great consideration too.

So, so yeah, come on by and right. I’ll write you back. So

Jesse (47m 56s): My guest today has been bill the old dog men bill, thanks for being a part of working capital.

Bill (48m 2s): Hey, Jesse has been a blast. Thanks man.

Jesse (48m 5s): Hey everybody, this is Jesse for galley. Before we started this episode, I just want to say thank you so much for everybody that keeps on listening, it really is amazing to me and I can’t. Thank you enough. What would really help us out is if you enjoy the show to go over to iTunes and leave us a five-star review. Also, if you have a favorite episode, what would be great is if you could share it on social media, whether that’s Facebook, Instagram, or LinkedIn, anyways, enjoy the show favor.

Listening to the working capital podcast. My goal is to help individuals break into real estate investing as well as educate experience investors. If you enjoyed the show, please share with a friend, subscribe and give us a rating on iTunes. It really helps us. If you have any questions, want to learn more or likely to cover a specific topic on the show, please reach out to me via instagram@jforgalsorheadtowwwdotjesseforgalley.com. My name is Jessica galley, and I’ll see you back here for the next episode of the working capital real estate podcast.