Podcast Summary
Sticking to fundamentals leads to successful real estate investments in hot markets: Investing in expensive markets like Denver requires following fundamentals, networking with sellers and brokers, and utilizing resources from the Bigger Pockets community for higher returns.
Learning from this episode of the Bigger Pockets Podcast is that even in hot markets like Denver, where finding off-market deals may seem challenging, sticking to fundamentals and following up with sellers and brokers can lead to successful real estate investments. Terrence Doyle, a former sports agent turned real estate investor, shares his experiences and advice on investing in expensive markets and provides strategies for higher returns. Additionally, the Bigger Pockets community offers a wealth of resources beyond the podcast, including a YouTube channel with various teaching perspectives. A special 90-day challenge webinar is also coming up, providing actionable steps to land a deal in the next 90 days. And for those looking to invest with no money down, Rent to Retirement offers opportunities for new construction turnkey rental properties and investor loans with low rates and down payment options.
Real Estate Private Credit Strategy: High Demand Financing on Quality Assets: Real estate investors can earn solid returns through Fundrise's private credit strategy, providing bridge financing on high-quality assets with creditworthy borrowers, with an average net interest of 10.8% on over $800 million in deals.
There are opportunities for real estate investors to make a healthy return through Fundrise's new private credit strategy, which provides high demand bridge financing on high-quality assets with creditworthy borrowers. This strategy allows top investors to secure the funding they need while investors get paid a solid interest rate. With over $800 million in private credit deals completed and an average net interest of 10.8%, it's an intriguing opportunity for those looking to invest in real estate during this market environment. Meanwhile, Terrence Doyle, a successful real estate investor, shared his story of discovering real estate investing through college basketball and flipping houses during the recession. He started with no knowledge of real estate but learned the ropes by underwriting properties at public trustee sales. In 2014, he branched out and focused on larger deals, using his fluency in Spanish as a competitive advantage to build a scalable solution with Hispanic subcontractors.
Leveraging Relationships in Sports Agency and Real Estate: Adding value and building trust quickly are essential for success in both sports agency and real estate. Honing skills in reading between the lines and understanding client needs can translate well to real estate. Consistently following up and asking questions are key to building genuine relationships.
Building strong relationships is key to success in both sports agency and real estate. The speaker shares how he leveraged his experience as a sports agent to build relationships with college coaches, which helped him in his real estate career. He emphasizes the importance of adding value and building trust quickly. In the competitive world of sports agency, he honed his skills in reading between the lines to understand the needs of his clients and providing solutions. These skills translated well to real estate, where he applied them to building relationships with brokers and lenders. His advice for those looking to build better relationships is to ask questions, get to know people genuinely, and be consistent in following up. By focusing on adding value and building trust, individuals can differentiate themselves and succeed in their respective industries.
Building genuine relationships with real estate brokers: Ask questions, document needs, follow up, offer value, and focus on solving problems to build trust and gain referrals in real estate
Building genuine relationships and consistently solving problems for real estate brokers can help set you apart from the competition. By asking questions, documenting their needs, and following up, you can build trust and gain referrals. In the early stages of your real estate career, you may offer to double-end deals or help find off-market properties. As you grow, you can use your strengths, such as construction knowledge or travel connections, to add value. Remember, successful people solve problems, and by focusing on the needs of others, you can create a win-win situation. It's essential to be consistent, natural, and genuine in your approach, and the rewards can be significant.
Learning to Solve Bigger Problems in Real Estate: To succeed in real estate, one must be adaptable and resourceful in solving increasingly complex problems. From managing multiple projects to securing institutional financing, personal growth and resilience are key to ascending to bigger deals and greater success.
To succeed in any industry, especially real estate, one must be willing and able to solve more and tougher problems than others. Terrence's journey from single family to midsize to big deals in real estate involved learning to manage organizational efficiency, securing capital, and navigating lending. Each step presented new challenges, from managing multiple projects and details in single family to dealing with larger purchase prices, equity needs, and construction in midsize deals, and eventually, securing institutional financing for larger deals. Solving these problems allowed Terrence to ascend to bigger deals and greater success. However, the process required personal growth, resilience, and a willingness to reinvent oneself as new challenges emerged.
Navigating the competitive commercial real estate market: Stay focused on specific markets, build strong relationships, and maintain a disciplined approach to investing in expensive markets.
Navigating the competitive commercial real estate market, especially in hot spots like Denver, requires focus, creativity, and patience. The larger the deals, the more equity is required, which means building relationships with new types of investors. Despite the challenges, the multifamily sector remains an attractive option due to the housing shortage and strong demand. However, the competition is fierce, and the market is flooded with capital. To succeed, it's essential to stay focused on specific markets, build strong relationships, and stick to fundamental investing principles. The idea of lowering return expectations for investors is not a viable solution, as investors continue to seek better returns. Instead, syndicators must be patient, fill their pipelines, and position themselves to win. The fundamentals that apply across the board for investing in expensive markets include focusing on a few specific markets, building strong relationships, and maintaining a disciplined approach to investing.
Mastering a specific market for successful real estate deals: Deep knowledge and dedication to a market leads to quick underwriting, identifying key players, consistent deal flow, and successful real estate deals.
Focusing on a specific market and mastering its fundamentals can lead to more successful real estate deals. This approach goes against the common belief that expanding to more markets increases opportunities. The story of Kobe Bryant's intense focus on improving a single move illustrates the importance of mastering the basics. In real estate, knowing the ins and outs of a market allows for quick underwriting and identifying key players. By building relationships and staying top of mind, deal flow can be consistently generated, even in hot markets. Ultimately, the ability to excel in a specific market comes from deep knowledge and dedication.
Follow fundamental principles for real estate success: Know your market, be aggressive on offer terms, move quickly on closing, ensure lending certainty, and have all your ducks in a row for real estate success.
Success in real estate investing comes down to following fundamental principles, regardless of the market or asset class. Terrence emphasized the importance of knowing your market, being aggressive on offer terms, moving quickly on closing and making offers, ensuring lending certainty, and having all your ducks in a row. He gave examples of how these principles can be applied using a basketball analogy, emphasizing the importance of being proactive and putting yourself in a position of advantage. Terrence's success in real estate is built on these principles, which he's developed through observation and experience. By focusing on these fundamentals, investors can increase their chances of success and stay competitive in the market.
Assessing Real Estate Market Conditions: Consider market conditions, risks, rewards, individual goals, resources, and knowledge when investing in real estate. Partner with locals or syndications for unfamiliar markets, and evaluate investments beyond just price.
When considering real estate investments, it's essential to assess the market conditions and weigh the risks and rewards. Hot markets, such as Denver, may offer significant growth potential but come with increased competition and potential risks. On the other hand, less competitive markets might provide more stability and cash flow with limited upside. Ultimately, the decision depends on individual goals, resources, and knowledge of the market. Investing in unfamiliar markets may require partnering with a local expert or syndication to ensure success. Additionally, it's crucial to consider factors beyond just price, such as cap rates and debt, when evaluating potential investments.
Look beyond purchase price for investment decisions: Consider cap rates, interest rates, and distributable cash flow when making real estate investments. Seek guidance from a mentor or coach and take advantage of current market affordability with cheap debt.
While the real estate market may seem intimidating with rising prices and competition, it's essential not to make decisions based solely on surface-level factors like purchase price. Instead, investors should consider the full picture, including factors like cap rates, interest rates, and distributable cash flow. A mentor or coach can provide valuable guidance and experience in navigating these complexities. Additionally, the current market's affordability due to cheap debt makes it an attractive investment opportunity, despite fears of potential bubbles in other asset classes. It's crucial to look beyond purchase price and delve deeper into the fundamentals of the market to make informed investment decisions.
Understanding Debt and Rents in Real Estate: While low interest rates are a vanity metric, they impact real estate investments through debt and rents. Robust economic booms can offset potential interest rate hikes, but economic downturns can negatively impact investments.
While vanity metrics like low interest rates are important, it's crucial not to get overwhelmed by them and to consider the bigger picture. For instance, the current real estate market's strength can be attributed to low debt, but a potential downside is the possibility of significant interest rate hikes. However, if a robust economic boom occurs, rents may increase, allowing cap rates to stay the same or even decrease. Conversely, if interest rates rise without a strong economy, it could negatively impact the economy. Ultimately, it's essential to remember that debt and rents have a significant impact on real estate investments, and understanding their relationship can help investors make informed decisions.
Effectively managing debt in real estate: Keep debt low, secure long-term financing, explore passive income opportunities, and consider non-recourse, institutional debt in mobile home space.
Managing debt effectively is crucial for real estate investors during economic booms and downturns. By keeping debt low and securing long-term, cheap financing, investors can fuel growth and avoid potential challenges. In the mobile home space, securing non-recourse, institutional debt is key. Meanwhile, some investors may prefer passive income opportunities, such as investing in mortgage funds like Pine Financial Group, which offer attractive returns and mitigate downside risk. Lastly, investing in therapy services like BetterHelp can help individuals make the most of their time and prioritize their goals. Despite the uncertainties of 2020, successful investors continued to adapt and grow, either by refinancing, purchasing with long-term debt, or exploring passive income opportunities.
Staying focused on fundamentals and being aggressive during uncertain times: During economic downturns, it's crucial to stay disciplined, secure necessary resources, and take calculated risks for potential profits
During uncertain times, staying focused on fundamentals and being aggressive can lead to significant opportunities. The speaker shared his personal experience of having a baby during the pandemic while also trying to grow a business. He recalled his father's advice during a past recession, which he dismissed at the time due to his lack of responsibilities. However, during the pandemic, he faced significant challenges, including losing multiple deals. Instead of giving in to fear, he went back to the basics, secured the necessary infrastructure, capital, and relationships, and was able to buy and sell real estate for impressive profits. This experience reinforced the importance of staying disciplined and taking calculated risks, even in the face of widespread fear and uncertainty.
Acting against fear and uncertainty in real estate investing: Recognize opportunities, take calculated risks, understand deal fundamentals, identify potential risks, have creative solutions, and leverage a strong support system to capitalize on overlooked opportunities
Successful real estate investing often involves acting against the tide of fear and uncertainty. When markets are volatile or uncertain, many investors retreat, but those who recognize opportunities and take calculated risks can reap significant rewards. This was evident during the early stages of the COVID-19 pandemic when jumbo loans became scarce, and the short-term rental market in Hawaii was decimated. Those who remained steadfast and acted on their faith in real estate's resilience were able to make substantial profits. To do this, it's crucial to have a clear understanding of the fundamentals of a deal, identify potential risks, and have creative solutions to overcome them. Additionally, having a strong support system, such as mentors or coaches, can help investors stay focused and make informed decisions. Ultimately, being able to find and capitalize on opportunities that others overlook can set successful real estate investors apart from the crowd.
Find a niche and excel in it: Investors can succeed by focusing on a specific niche and becoming experts in it, making it easier for brokers to bring them suitable deals and allowing them to stand out in a competitive market.
Finding a niche and becoming an expert in it can help investors succeed in a competitive market. Some investors, like Open Air Capital, have chosen to avoid dealing with septic lagoons due to the potential complications and challenges they present. Instead, they focus on infill properties that are 30-50% empty, which they are particularly skilled at. By clearly communicating what they will and won't invest in, they make it easier for brokers to bring them deals that fit their criteria. Similarly, investors like David focus on house hacking, turning single family homes into cash-generating assets. By identifying and mastering a specific niche, investors can differentiate themselves and attract opportunities that others may overlook. Whether it's septic lagoons, master-metered electric, or another sub-niche, the key is to find an area of expertise and excel at it.
Buying Off-Market in Des Moines: A Success Story: Networking, finding off-market deals, and effective negotiation are crucial for successful real estate investing. Brandon's 135-unit property in Des Moines yielded high returns after improvements and attracted offers above investment.
Brandon successfully purchased a 135-unit property in Des Moines, Iowa, in late 2019, finding it off-market through a broker. He negotiated a lower purchase price and funded the deal with a local bank and equity. After making improvements, they reached near-full occupancy and received offers above their investment. With a low investment basis and attractive yields, they plan to refinance and hold the property long-term. The success of this deal highlights the importance of networking, finding off-market deals, and effective negotiation in real estate investing.
Patience and persistence pay off in real estate investing: Stick to principles and budgets, improve property appearance, network, and have a long-term perspective for successful real estate investments.
Being patient and persistent in real estate investments can lead to significant rewards. The speakers in this discussion shared their experience of purchasing a mobile home park below market value in Des Moines, despite initial challenges such as crime, unpaid rent, and outdated properties. They emphasized the importance of sticking to principles and budgets, and improving the property's appearance to attract better tenants and increase its value. Additionally, networking and sharing investment criteria with others can lead to valuable leads and opportunities. Overall, the lesson learned is that real estate investing requires patience, trust in the process, and a long-term perspective.
Learn from successful multifamily real estate investors like Terrence through books and community engagement: Read 'The Sport of Business' and 'The Best Real Estate Investing Advice Ever' for multifamily insights. Engage with the BiggerPockets community for valuable Q&A sessions and mentorship opportunities.
Terrence, a successful multifamily real estate investor, emphasizes the importance of learning the fundamentals, using sports as an analogy for business success. He recommends reading books like "The Sport of Business" by Mark Cuban and "The Best Real Estate Investing Advice Ever" by Joe Faircloth to gain knowledge in multifamily real estate. Terrence also encourages the audience to engage with the BiggerPockets community, especially the Multifamily Tribe of Mentors Q&A sessions every Tuesday and Thursday at 2 PM Mountain Standard Time, where they can learn from top young operators and gain valuable insights on raising capital, property management, and sourcing deals. Terrence's favorite business book is "Shoe Dog" by Phil Knight, which he highly recommends for entrepreneurs. He also shares his personal connection with Phil Knight and the impact of Nike on sports and popular culture.
Perseverance is key to success in real estate investing: Successful real estate investors persevere despite challenges, draw inspiration from overcoming odds, and have a strong support system. Traveling and community involvement can also contribute to success.
Perseverance is key to success in real estate investing. Terrence Doyle, a guest on the podcast, shared his experiences and insights, emphasizing the importance of not giving up despite challenges. He also highlighted the value of traveling, being involved in the local community, and having a strong support system. Doyle's favorite place to travel is Cartagena, Colombia, and he encourages anyone interested to reach out for recommendations. He also mentioned his connection to David Green through a mutual friend. When asked about what separates successful real estate investors from those who fail, Doyle emphasized the importance of perseverance, drawing inspiration from Phil Knight's story of overcoming odds to build Nike. To learn more about Terrence Doyle and his real estate investments, visit www.theverco.com or connect with him on Instagram or LinkedIn.
A valuable free resource for real estate investors: Use BiggerPockets.com/deals to find investor-friendly agents and navigate the real estate investing process, but approach it with caution and knowledge
BiggerPockets.com/deals is a valuable free resource for those looking to invest in real estate and get closer to financial freedom. Here, you can find investor-friendly agents to help you get started and navigate the process. However, it's important to remember that investing in real estate, or any asset, involves risk. Past performance is not indicative of future results, and all opinions expressed are those of the hosts and participants. Before investing, consult with qualified advisors and only risk capital you can afford to lose. BiggerPockets LLC disclaims all liability for any damages arising from the use of information presented in this podcast. In essence, BiggerPockets.com/deals is a crucial tool for those embarking on their real estate investing journey, but it's essential to approach it with caution and knowledge.