How to Succeed in Multifamily Investing with Jens Nielsen

Full Transcript

SUMMARY KEYWORDS

people, invest, coaching program, bought, syndication, properties, felt, deal, real estate, lessons, investors, units, working, capital, learn, year, coaching, months, coach, experience

SPEAKERS

Jens Nielsen, Taylor

Jens Nielsen 00:00

You know, big community is this kind of one on one talking to people and keep them accountable and help them achieve success. So I just enjoy doing it. That's really kind of bottom line of it, I guess.

Taylor 00:11

What's going on guys, this is passive wealth strategies for busy professionals. Thank you for joining in today. Today our guest is yen's Nielson from open doors. Capital yen's is going to teach us about the experience the process the results of moving from buying small multifamily deals, quads and such up to buying 200 units at a time and starting a real estate coaching program and what his experience has been like there. He's going to tell us all about his story, moving to the United States from Europe some time ago, and some of the important lessons that he's learned along the way becoming a successful real estate investor. For those of you who are new to the show and don't know I'm your host, Taylor load. I am a realist. estate investor. I'm a real estate syndication and I'm a busy professional. I buy real estate with passive investors love talking about investing. And I'm excited to bring this interview to you today. Once again, our guest today is yen's Nielson from open doors capital. This is a fun interview yen's has a lot of knowledge. He's a busy professional and a successful real estate investor. So he has a very inspiring story for anyone out there who has a day job and wants to invest in real estate. Without further ado, here we go with yen's Nielsen. Alright, yen's. Thank you for joining us today.

Jens Nielsen 01:38

Hey, welcome, Taylor. happy to talk to you and it's gonna be a lot of fun.

Taylor 01:42

Yeah, yeah, absolutely. So for the listeners, can you tell us about your story and you know where you are now?

Jens Nielsen 01:50

Yeah, so I mean, some people can probably hear from my accident from my name. I didn't grow up in this country. I'm actually originally from Denmark decided to leave At a young age to explore the world and I actually made my way through London, England in the early 90s. And then came to the US in 1996. Been here, what 2023 years now. Travel started on the east coast in Maryland for a while and then went west, through Albuquerque, New Mexico. Now I'm in southwestern Colorado in a small town called Durango. And that's kind of my, at least my physical journey. And obviously, the whole real estate is, you know, but it's been happening the last few years, I started investing three and a half close to four years ago now. And it's been, you know, started with a smaller property. It's been growing that portfolio quite rapidly over the last few years.

Taylor 02:47

Great. So can you get us you know, tell us about the numbers of your portfolio because they're bigger numbers than most people have. So let's get

Jens Nielsen 02:55

into that. Yeah, absolutely. So you know, kind of been You know been in it for so many years and I realized one day if I ever wanted to retire if I ever wanted to get some sort of financial freedom or multiple streams of income, I had to do something different. And everything I looked at just looked like another job you know, it's like an IT consultant that everything and I realized, hey, real estate is a really good path to grow grow your your wealth and also generate that passive income that we don't really learn about we all think you know, invest in stocks and you know, you grow your equity, but you can't live with the equity you have to have some passive income to really, you know, be able to retire, whatever you want to call it.

So I felt like okay, real estate is the vehicle and I've got pretty much get started, you know, three and a half four years ago by by investing my own capital and some smaller deals, bought a couple of fourplexes. down and actually in Albuquerque, New Mexico. That was the market that felt The ultimate because it's closest to where I live and it's the closest biggest city to where I live. So within within six months period we bought two for Plexus and 11 unit properties and we had like 19 units from zero to 19 in six months or something so that was pretty interesting Quick, quick growth spurt there for sure. Oh, yeah. And then I was like, Okay, this is pretty interesting to me. And I had had discussions with friends and stuff Hey, I'm, I'm investing in real estate. You know, if I ever find a deal, would you be interested in participating and day then? Yes, make sure you don't let us know.

So we, in May of So actually, we had kind of a longer gap before we bought our next field. So in in body, little bit, a little bit later, we bought 38 units in Albuquerque as well. And this is kind of a heavy evaluate, deal. You know, typical, someone who's bought it and didn't really know how to manage it. And we're just bleeding cast and the units are just not getting updated and the tenants were not the greatest. So we bought that one. And been working on that. And it's been a very exciting learning experience. And we can dig into that more if you want to, because we learned a lot of lessons that deal. And then then after that, I bought another. Well then I kind of started diversifying a little bit, I bought a small mobile home park here in in Cohn, Southwestern Colorado with a partner. So that was kind of a different asset type, but we felt like the numbers look pretty good. So we purchased at one and then then I started actually, this year syndicating deals to partner with some people that were doing syndications in various parts of the country, and I was able to, you know, bring go in there and help help on the GP side there through various roles, it's underwriting, due diligence, you know, capital racing and so forth. So that's been that's been Grosberg DCI syndicated three deals, that's over 650 units just this year. So. So it's been growing from having zero in 2016, to over 700 units that I kind of have my name on, if you will. So that's, that's pretty exciting.

Taylor 06:15

Nice. So that's very fast growth. And I would like to drill into some of those lessons that you learned on that kind of first medium sized property if you will. Because, you know, that's really, that's where we have the opportunity to, if you will fail small and not that you failed or anything, but you can learn difficult lessons and they won't completely wipe you out on the smaller properties before you get into the bigger properties. And you already know to look out for those things. So let's get into that. Tell us about what you learned

Jens Nielsen 06:50

and access. So just kind of go back to the initial four places we bought and I actually just sold one of those like two weeks ago and I'm selling another one by the end of the year. Because I realized a couple of things to a couple lessons around a smaller properties are there, they're hard to manage four Plex because you have, you know, you know, unless you live there, maybe you can self manage, but otherwise you have to have a manager, you know, a property manager on there. And they weren't in the greatest of areas. So while the numbers looked great on paper, the turnover and delinquencies and stuff like that kind of had took a bite out of the profits in the long run. So everything will go great for six months and then somebody lost their job couldn't pay and we had to be a victim.

So Don, you lose like two months of income plus the eviction fee and the damages and everything like that just wiped out all the profits for you know that year. So I've kind of like okay, I need to kind of invest myself from those properties. So I'm selling those four Plex it's just kind of like it's a good learning experience. I didn't lose any money, but also I felt like Mike my capital is tied up in something that I don't see myself on in the long run some selling those nice and making some good profits on monitor them so that's that's pretty nice there so I guess my lesson there was Be very careful about the area and also just the numbers on paper does not always translate to numbers and in the real world right

Taylor 08:24

so is that the numbers not translating was that tied to do you mean mean that in the sense of the vacancy or were there other numbers that didn't work out like you had a lot more maintenance items then you really expected or things like that like what does that really mean that the numbers didn't reflect reality?

Jens Nielsen 08:43

Yeah, so you know you when you when you buy a property, an investment property you underwrite it first that Okay, here is my projected rents, here's my projected expenses, depth, debt service and everything else. I'm just like, okay, I can make a 10 12% of my initial investment. You try to project you know, hate my repairs and maintenance so much every year my vacancy is so much. But I think, what we experienced a couple of things that because these are older properties, and they had not been like fully rehabbed, we ended up having more repairs than expected, you know, something would break kind of on a regular basis.

And then when you have a property manager in there, you know, it's 5075 $100 every time that be called out. So if you have a couple of those calls a week, I mean a month, that really adds up very quickly. So I think the lesson there was, if you're going to buy something that's older, you may want to go in and really do thorough updating of that unit. So you don't have those unexpected, unexpected expenses all the time for repairs and maintenance. A

nd that was one lesson and then the other thing you know, these were Class C maybe even c minus and you know the tenant class, you have to kind of consider what is their ability to pay and We would see you know, hey everything's going great for a few months and then somebody you know lost their job their car broke down there's somebody couldn't pay rent, you're like well that's money I need to pay my mortgage right so what do you do you try to work with them if that doesn't work out, do you then go through the eviction process with in New Mexico is not that hard, but still, there's time and fees associated with that and and he got to get it fixed up and leased out again. So in reality is probably two to three months before that unit is lease back up.

So it takes a huge hit on your on your income there. And then we had until the unexpected we had a water main break in one of our properties so that the water is coming out of the ground and dig it up and fix that. I mean, that adds up right? But those are kind of those long term repairs that over time probably even out. It's just there are always these unexpected things that you have to work through. And I think a lot of small investors, they get discouraged and they just say I just this son something I want to be involved in and Get out of the games. Yeah, yeah.

Taylor 11:02

So how did you know you're in syndication? How did you first learn about syndication? And what was your driving factor to say I'm not going to be a passive investor in syndications. I'm going to be an active syndicator. What drove that?

Jens Nielsen 11:20

So I have also invested quite in quite a few syndication, passive lease, because I felt like I wanted to understand how that's done from the passive side. So that's what I started with. But I felt so the driving force was it kind of ran out of my own capital, right. It was tied up in this project I was working on as I okay. I can't really buy anything in my own account for a while.

But I had made so many connections through you know, part of a mentorship training group and other things that have gone to a bunch of different events and learn people that were doing these bigger things. Is it okay, this is really exciting and something I want to be part of, because I realized, people say, Oh my god, a 200 unit apartment building. I could never do that. Well, it's first of all, there's not one person doing is a team, you know, you have a team putting the general partnership together, you also have a property manager, professional property managers, that's what they do you have on site staff and everything else. So in reality, the returns are much more predictable, the, you know, challenges you have are, you can deal with them easy, because you have people there you can you can manage it.

And, you know, if you get a few vacancies, they don't have as big of an impact as it is on a small property. So, you know, and I felt like, I had had a lot of people that have asked me, you know, how can I get involved? I said, Well, I don't really have anything but you know, let me let me start partnering with people. Maybe there's an opportunity to get skits on my friends and family and network involved in passive investing that that way. So that's how we that's why I chose that route. And it's been super exciting. And I'm actually going to continue down that path here in the next next year and buy some more properties. And that was That model

Taylor 13:01

grant I mean, it's a it's a great model to go down and it's it's good to know that you invest passively in syndications as well. I mean, I'm an active syndicator. But I invest passively in syndications, because, well, one I, I believe in the asset class and the strategy and two, it's great to get the experience of being a passive investor. So, you can see things that other sponsors are doing well and learn from them and then implement those things in your own business to make the experience better.

Jens Nielsen 13:34

Yeah, for sure. And you can also you know, you can you can look at what are you know, the passive investments you involved in what how, how are they structuring the investment, you know, what are they returns, what are their whole time you know, but a lot of their communication like and so forth, you know, and you can look at what do you like and what you don't like and you can try to put all try to put together you know, a model All packets that works, you know, sort of, you know, for the best interest of your investors, so they really get that that confidence in you and the team and also, you know, the returns that they that they should have on their on their hard earned money. Yeah, yeah.

Taylor 14:18

Have you found that your international history and background helps you gives you an advantage in certain ways when it comes to either remotely investing in real estate or working with investors who are based outside of the United States? Rios things that, you know, that that broader perspective might help you with that you're more comfortable, say communicating with people who are at a distance and all those kinds of things.

Jens Nielsen 14:48

You know, I think one of the things I have learned experience due to the fact that traveled all over the world, I'm kind of like, I'm used to dealing with people of different backgrounds, and if this and stuff. So I can probably relate to people's, you know, how do people how do you build trust? Right? That's that's one of the big things in in a syndication because it's based on a personal relationship.

And I've tried to develop methods that I can build that trust through, you know, if it's one on one meetings or if it's if it's, you know, people that I don't see on a daily basis, I can only talk to on the phone, just tighten the stand, how can I build trust with them and being and having an engineering it background? I'm kind of like, I can explain the facts pretty well. But in reality, I think a lot of people invest through their emotions, like they have to feel comfortable with you. The numbers can be awesome if they don't feel comfortable with you, and I'll go in there. So I think just creating that report is really important.

That's something I'm learning more about how to how to get better at that. So and then to answer your question around working with investors, some out of the country. I've had a few somebody heard me on another podcast from Denmark and they kind of reached out to me and I had a few zoom calls with them. We kind of got hung up on the whole, how do you transfer your money to the US and deal with all the tax and legal things? And it's, you know, it's nuts. I would like to do it, but I haven't really found the right structure for that, if that's something you've had an opportunity to do, because it's there are some rules and regulations you got to keep in mind you end up being like an agent for the IRS and so forth. And it's like, well, this seems complicated, but you know, it's I would like to do it, but I haven't gotten there yet. Yeah, no, I haven't

Taylor 16:39

had experience with that myself. Um, my investors are all US persons and live in the US and that is a big question mark is how do they legally transfer their money to the US and then what are my are? So the team what are our responsibilities to the IRS and Everything and is it, frankly, is it worth the additional complication to go through compared to, you know, just focusing on working with US based investors? And I think probably our conclusion so far has been that it makes more sense to focus on US based investors. And, you know, it's not to say there's anything wrong with working with international investors. It's just, it's not our setup. It's more of a specialized skill, I think.

Jens Nielsen 17:31

No, I agree. And I think if they were able to bring you know, hundreds of thousands of dollars in, it may be worth it. But for your typical, you know, 50, Grand $50,000 investment, it's, it may not be worth all the headaches to do that, because I have heard that you have the whole if you have to actually act as an agent for the IRS and you have to hold back taxes, and then they can file a US tax return to get that back. So you actually ended up adding a lot of overhead for your CPA or your tax professional, they're into syndication so it's there's a lot of money overseas, but just gotta you gotta do it right and structured in a way that makes sense for everybody involved for sure.

Taylor 18:14

Yeah, we have to be somebody a fairly significant investor that can really help you close more deals because of due to the number of dollars that they want to invest because that additional overhead exactly like you said, to show you invest $25,000 and $50,000. It wouldn't be worth it, frankly, to Absolutely.

18:34

Extra hoops. Yeah.

Taylor 18:37

You mentioned that you're you've been in various coaching and mentoring programs throughout the years. How did you a lot of one of the problems with a lot of them is people will do these coaching and mentoring programs, and then not really turned it into real world results. But you did turn it into results. So You know, what's the difference? What helped you bridge the gap between the training and then reality and getting the results?

Jens Nielsen 19:09

So that's a great question, right? I mean, I think, you know, information without action is just entertainment. You know, and, I mean, I had really a burning desire to, to make a change and I had bought a couple of properties before I enrolled in this coaching program. So I was already a little bit down the path right there, okay, this is really want to do. So, you know, you code so a mentor, somebody that's going to help you take action and hold you accountable.

And you know, you know, look at your results. But if you don't have the burning desire, and the really, really, you want to do this, this is the most important thing to do right now. A coach is not going to, can't force you to do that stuff, right? So I really looked at as a way to get educated, to have some accountability to you know, expand my network. Then just connect with people. And I've done I do quite a bit of coaching myself now for newer investors, and it's very interesting to see who were taking action and who was not. And and I really dig into that. Okay. You said you're going to call 10. brokers you didn't call any, why not? Right? So really try to understand. And I've had some, you know, had a kind of a very honest discussion with one of my, my, my students here who has been with me for a while.

And as he was really excited to get started, and he just lost momentum as like, what happened, what's going on, it's like, well, if I was just going to be easy as God then buy some properties, blah, blah, blah. So I don't know if he felt like a I paid this money to to do this coaching program, and then everything is going to happen. And I think that's a, we can make that mistake. And so just pay money that is not going to do it. You really have to be committed to this path and take, you'll take x and your coach can tell you what would make sense to do next. You have to take action and you have to be accountable to that action. So I think that's That's really what I saw the value.

Taylor 21:04

Yeah, I think that happens a lot with a lot of coaching programs is they might I'm not saying that you did this at all, but some coaching programs apply or or flat out state that, you know, get in our coaching program and you're going to be on Easy Street is going to be so great. Take our training and you're going to be a quadrillion air and a year. And it's just not true. It's not reality, you have to put the work in and none of those coaching programs are going to do the work for you. Because if if it was automatic, then why would they coach anybody to do it? That wouldn't make any sense? Yeah, if it was just a turnkey program, so yeah, yeah, that makes a lot of sense. Are there any other key lessons that you got out of coaching that are important? I think that burning desire is very, very important. Very great. That's That's great advice. Anything else? That's wrong, true to you.

Jens Nielsen 22:01

Just being consistent, you know, I still have a W two job. So all this real estate's investing is a side gig that I'm working on big making my main gig, but just be super consistent around your efforts. So that goes into your daily routines, right? Don't spend all day on Facebook or whatever else it is, right? So I'm very structured through getting up early in the morning and then you know, having dedicated time to doing various things and then working, working, you know, reviewing my goals and just be clear about what it is that one, then break that down into, you know, tasks that need to be done. So it's and I think this is where a coach can help you a lot is just keeping you focused, making sure you do things in the right order because I see what a lot of people as we just kind of talked about a lot of people see somebody, hey, oh, this person has, you know, how does it mean is it all is on the management that's No way I can ever get there.

So I'm just going to give up. When reality if you look back the last, you know, this wasn't an overnight success that took 10 years right here, right? Exactly. And people don't realize that because in the you know, we're so used to instant gratification and things going to happen in a very quick and then they're putting in that work. And it's like, you know, even if you're in a six month pro coaching program, you may not seem like you're getting very far, but just that cumulative Action Day in and day out, will eventually lead to that success you're looking for. Just look at the long view, right? We overestimate what we can do in a year on days, maybe we can do in five years. So just keep doing the motions and that's what I every time I do one of my students I kind of feel stuck I was like, hey, you're very close to the goal line, just keep pushing and you will get there you know, that's, that's kind of my my mantra.

Taylor 23:52

I think that makes a lot of sense and an experienced coach can help point you in a particular direction and help give you the steps but you have Do the work every day now, being a coach yourself. And it sounds like from what you're saying that that coaching is kind of a newer part of your business. Is that do I have that right?

Jens Nielsen 24:12

Yeah, it's been the last. I think I've been added almost a year now. But I've been really scaling. And so I've had, I've had like, 10 students this year, and I think I was adding about like, 100 coaching calls this this year. And it's, you know, it's something I really enjoy, because I think, I don't know, I feel like I have this experience that I can share and not that I've done it a long time, but I've been you know, in management and other things for a long time.

And I think that just having that life experience is something you can share and help it. So it is yeah, it is something that I am working on and growing a little bit, you know, as long as in because you know, you don't do a deal every every week, every month. So there is there are periods in between where you're working on next year. You are stabilising stuff we have a little bit of time and I feel like this keeps me fresh. It keeps me going with learning new things expanding my network connecting with people and just helping helping people be be successful I was actually in southern Colorado is actually in in Orlando last weekend with one of my students had a meetup there. And I happened to be there for something else and I met up with him and that was really cool. We had a meet up and that was a good experience to to be able to help him out and do that stuff. Pretty awesome.

Taylor 25:32

Yeah, they say the best way to learn is to actually teach what you already know. Just resubmit that so that's definitely you know, it's definitely true. Interesting, interesting. So we haven't had we haven't had people talk about their coaching programs on the show yet so that's that's interesting to hear about and you know, what drove you to start a coaching program because Must have been over a year ago you were thinking about it or how long were you thinking about it? And what did that process look like?

Jens Nielsen 26:08

Yeah, and that was

Jens Nielsen 26:12

because I actually loved it really enjoyed teaching and I've done it I've actually taught in college Oh, and Community College it stuff. So I felt like I actually enjoyed a new haven't really had an opportunity to express that in, in, in my day to day life except that work and I do some there. So I felt like this, this kind of naturally was a natural fit for my skill set. And also, I really think, you know, again, kind of a parallel to my it experience. I love to optimize and improve systems and make them more efficient. If I can apply that same thing to people.

That would just be so rewarding, right? You know, you help people grow and then become something else. Right? That's, that's super rewarding to me. And that's kind of where Where the desire came from. And I just, I just had a few people, you know, very organically just growing it through, you know, connecting with people and today and I'm doing this, you know, you want to work with me for a while and then just kind of slowly developed it and brought some more people on this as students and just kind of keep developing the program as we go along. There's not, you know, I don't have a, a, an on line when you call it like a course you can buy or I don't have, you know, big communities, this kind of one on one talking to people and keep them accountable and help them achieve success. So I just enjoy doing it. That's really kind of bottom line of it, I guess.

Taylor 27:36

So if it's from past experiences, teaching that you knew you would enjoy being a teacher, and then it just made sense to find students and teach them what you know. Sounds like cool, cool. So it sounds like it's been a great journey so far. Right. Now we're going to take a quick break for our sponsors. All right, yes. I got three questions. To ask every guest on the show. Are you ready?

Jens Nielsen 28:03

Absolutely.

Taylor 28:04

All right, great. First one, what is the best investment you've ever made?

Jens Nielsen 28:13

That is actually I think the syndication we just finished in Russia closed in June. And in Pennsylvania, we had our first three months, we paid out after three months, and I think our annualized return was like 14%, something like that. It's like, that's pretty awesome. After three months, not doing a whole lot of value out of anything. So

Taylor 28:33

that's great. A lot of times at the beginning, right after people close they have maybe occupancy goes down or something like that, and cash flow might not be great initially, and then they have to wait so it's great that you were able to cash flow early on on the other side of that, what is the worst investment you've ever made?

Jens Nielsen 28:54

So that is a passive investment in a coffee slice coconut syndication in Central America. Yeah. Yeah, it's a you know, as a long term investment, but it was in a country that has had some challenges recently. So things are not going all too well there. I don't know if they're gonna be able to turn things around. But I try to diversify and we'll see.

Jens Nielsen 29:20

gonna come back in a couple years. tell you how that

Taylor 29:25

thing. Okay, we'll have to we'll have to check in on that. I, I've seen a lot of those Central America agricultural investments. And I personally have decided not to invest just because you usually reliant on one operator and, you know, even though he might be a great guy, he might have a heart attack tomorrow or something like that. And I'm just not super comfortable with that. So that's why I've stayed away, but other people have had great results. So

29:49

hopefully, we'll see.

Taylor 29:54

Third question, my favorite one, what is the most important lesson that you've learned in investing?

Jens Nielsen 30:02

Just taking in daily constant action, basically just small things that just build up to those results, right, don't give up. Just keep working towards your goals. So that's, that's, I think that's the main motive, the most important thing we can do and the results may not materialize immediately. But if we keep piling on, it's like, you know, if you go to run a marathon, you don't go out there and run a marathon the first day, you do mile two, and three, and you slowly build up. So the same thing with this investing any kind of business, you need to grow yourself, your abilities, and also, you know, your team and your network. And that's, that's really what I've practiced.

Taylor 30:45

Nice. Nice. I like that. So yeah, and thank you for teaching us what you've learned today. If people want to get in touch with you, they want to learn more about your business. Where can they get in touch?

Jens Nielsen 30:56

Yes, my email is yen's j E and s at open door With an S open doors capital calm and if anybody wants to get on a free call, you know talk about investing a coaching anything they can go to open doors and capital comm slash call. So open doors capital.com says call and schedule a free call with me to talk about anything they would like.

Taylor 31:20

Great. I especially appreciate what you said about building trust with people. That's something that I'm working on getting better at myself. And it's always inspiring when you meet people who are either innately very good at it, or they really built up that skill to build trust with people. It's always inspiring to see that and it's great to hear from you that you've identified that as an important skill that we need to target. And I know for myself, my takeaway from our discussion today is that I need to keep working on that and keep focusing on building trust with people because that's very important. So thanks for that. Thanks for everything else today. And We'll talk to you again soon.

Jens Nielsen 32:02

Okay, thanks. I really appreciate your time today.

Taylor 32:05

You too, it is a Saturday night at seven o'clock. So you're definitely you're definitely really working so you're putting on that day.

Jens Nielsen 32:12

Right on. I appreciate that.

Taylor 32:15

Sounds good. Thank you everybody out there. Thank you for tuning in. If you're enjoying the show, please leave us a rating and review on iTunes. Very big help you know anyone that could use a little bit more passive wealth in their lives. Please share the show with them and bring them into the fold. If you have a great day and a great rest of your week, and we'll talk to you on the next episode of passive wealth strategies for busy professionals. Take care Bye