Scaling to 8,000 Units With Investors with Michael Becker

Full Transcript

Michael Becker  0:00  

You know because then you get to build these deeper relationships and when we're done here I go into a holiday happy hour thing with one of the big brokerage shops in town and they're all the brokers from that shop, we're going to be there and I'm going to spend some time with them and being local is super easy for me to do.

Taylor   0:17  

This is passive wealth strategies for busy professionals. Thank you for tuning in. Happy to be talking with you. I'm your host Taylor low. Today we have an awesome episode for you. We have Michael Becker from SPI advisory. Michael is a very successful real estate investor. He currently owns over 5000 units with his company SPI advisory and all the investors that he's brought into his business over time, he's acquired a total of 8000 units or thereabouts. Very successful he started investing right after the Great Recession. He's going to tell you more about his experience and today we're going to talk about how he got into raising money and some lessons that he's learned along the way that you can implement in your business today. Michael is a great guy. I've met him in the past and he was always very kind to me. I was thrilled to talk with him again to record this interview, you're going to enjoy it as well. There's a lot of fantastic actionable information in here. We're going to talk about the practicalities of investing in Dallas, Fort Worth and Austin, as Michael does, and how its competitive today, how he's successful in doing so things that you can do to be more competitive in your multifamily investing business. Lots of great lessons in this episode. Without further ado, here we go with Michael Becker from SPI advisory. Michael Becker. Thank you for joining us today. Hey, thanks for having me on. happy to talk with you. Again. It's been a couple years since we talked I'm sure you don't even remember me at this point. But it was a great conversation where we had it. But for the listeners who somehow don't know who you are, there's I'm sure there's very few of them. Can you tell us your background what you do and Yeah, where you are now give me a big head. So,

Michael Becker  2:02  

yeah, Michael Becker based in Dallas, Texas, and I run a company called SPI advisory. my background is, is I'm a banker by profession, and how I got into the multifamily business was loaning money to other people on on apartment buildings and kind of realized that processes on the wrong side of all those deals. It's kind of better be the borrower than lender so went out. Like a lot of people got my first piece of real estate in 2011. I think it was bottle three bed two bath house and ended up doing 16 rental houses and realize it was a very scalable, so in 2013 transitioned over into some larger scale, larger scale multifamily syndications. as we talked about today, we've we purchased 38 deals about 8000 units. As of today, we just went full cycle on our 18th deal. we've refinanced five returns some money, and so on those today and then I we sold 13 years now for a substantial profit. as we talk, I have about 5800 units in between Dallas, Fort Worth, and Austin, with the majority of that up being a Dallas Fort Worth, which is why I'm so glad to be glad to be on the podcast and try to have been trying to answer any sort of questions about multifamily or anything related to that?

Taylor   3:17  

Absolutely. That's a great summary, you have an awesome background, and you've accomplished a lot as a real estate investor, having started investing in real estate, only, what, eight years ago now as we're recording. that's, that's really very impressive. first, I wanted to talk with you about the process of starting to raise capital, your first time around starting to work with your first passive investors. What was that like? And were some of the lessons that you learned early on to go from we all struggles right at the beginning to go from struggling initially, potentially, I don't know, to then probably being a pretty accomplished capital razor by now.

Michael Becker  3:56  

Yeah. Yeah, this point is materially easier than it used to be. having a track record and ideals to go full cycle certainly help that story and the narrative and the confidence of people so as you know, I like to say when you kind of first starting out the people the first people give you money or three effort All right, you got your, your friends, your families and the fools, right so, if people know you or people that don't know any better, those are generally the first people that that kind of give you money. I was I was actually relatively fortunate. when we first started out I met I met my now business partner, Sean, because when I was a banker, I was making loans that people buy apartments. I made a loan to a guy from California that bought a property in Dallas, flew out to go meet them. That's kind of how I met my partner, Sean. Sean was working for a broker out of Beverly Hills and helped high net worth people from LA and Orange County, buy properties in Texas and so I kind of made a loan to them. That's that's how we met. so he had a client that had a pretty large network, sold the company and sold Our first year we did we actually had one investor, like gave us, he put in 95% of money, we put in 5% of money. he was crazy enough to give us a million to and we don't have any track record. that guy subsequently invested in multiple deals and we've actually killed it for him and you know, done very well for him. He's done really well for us. I felt pretty fortunate from that standpoint, but most people don't start with that, right. kind of some of the some of the things you can think about is, when you get out there it's just got to kind of build your track, record your resume up and when you start out, you don't have ownership resume or ownership track record. you need to find the things that you do have that are kind of transferable or marketable skills, or marketable accomplishments that you have professionally. 

your professional background have you done some smaller, smaller real estate projects like single family houses or duplexes, whatever, and then you kind of build your resume out a lot of people that kinda get into the You know, join either like a mentoring group or some sort of educational club. then once you get in there, those can be kind of cold tea in the in a good way, right. you have people that, that can kind of help they're all in the same group, you'll learn the same things, and you all kind of tend to do deals together. I've seen a lot of people be successful doing that way. Or they'll start as a passive on someone else's deal. then kind of work there. kind of kind of kind of start the resume by being a passive and then maybe co sponsor, somebody else, have someone else come on the team that's already done it. 

then eventually, once you do that, you're going to maybe be the domain sponsor the lead in the deal. it's kind of a series of steps, but I think really, the first thing I would say is he's got to be realistic about kind of where you sit kind of be very self critical about yourself what do you have, what do you what are you lacking and then you know, you need to go try to solve for the things that you love. was with other people and it's kind of like a puzzle right you just got to get all these pieces and as long as you put all the pieces together the picture becomes clear and you kind of do the deal so that if you don't know where you stand and you don't know where you need to kind of go

Taylor   7:14  

that is definitely a great advice we need to be self critical and think about that. If we're at I don't know how many people you've you're not a coach right you're but you're involved with these programs. how many people have you noticed come into the syndication game and kind of have a hard time at least initially in getting started I mean, that's kind of reality right there it's going to be tough at the beginning

Michael Becker  7:41  

Yeah, that that's certainly it and then everyone's got you know, different personalities different like hangups and stuff, right. there's a lot of the engineer types that cut out the paralysis by analysis on there. as always have more questions. I never know exactly everything they need to know the truth is you never know everything. You know? 

There's calculated risk I take along the way, and then you got the opposite of that you got the gunslinger mentality where they don't care, they're going to buy it no matter what, and try to figure it out later. trying to be a little bit a little bit more measured and a little bit of both, I think is certainly helpful as well. But I think I think within depending on the group and the training and things like that, I think that some more reputable ones out there, and then some ones are a little bit less reputable. trying to do the diligence, make sure that you go that route that you know, it's not inexpensive. 

A lot of these things cost thousands, if not 10s of thousands of dollars to get into but if it shortcuts, your your learning curve, it gets you in a good deal. What keeps you from voting? Big mistake, I think, you know, definitely worth it if you're really serious about it, and trying to make this into a career and a business. so just try to try to find the one that have had people that actually successfully buy deals and maybe go full cycle on those deals as well. The people that that You know, maybe you were flipping houses 10 minutes ago and they start a multifamily program, maybe that's not the right. Quite profile, even though that might be a lot less expensive, but you know, is as a concept, I guess between price and value, and maybe you're just you're paying a lower price, we're not really getting the value back.

Taylor   9:18  

That's a great point. Price and value are not the same thing. we should probably focus on value and and now moving on to when you want once you have a huge portfolio, I mean, 5800 units, like you said, How in the world do you manage even though you're using, I'm sure third party property managers, how do you manage all of that? 5800 units? I mean, that's huge.

Michael Becker  9:44  

Yeah, so at 5800 units, we're going to 700 plus unique investors that have actually invested cash with us around to like 12, almost 1200 k ones this year. Wow. since the Ministry of a challenge, right. that's been kind of the most Honestly, kind of most interesting part of the whole thing for me was, I was always the guy that did deals, but trying to then take the guys that could do deals and then turn into a company and then have systems and organization and then you deal with all the stuff that comes with it. so it's just really kind of started incrementally and we grew up on it. But once you once you get a decent base, when you start out you, you do a little bit of everything, right, you kind of do everything you do, the $10 an hour tasks, you do the thousand dollar or $5,000 tasks, kind of because you're on your own and you don't really have the asset management team Asset Management income or infrastructure or really need to do it. you start getting a little bit of scale, but then you're really kind of the first person we hired was like administrative help. then we kind of rolled in hired someone that that's got an operational background, that really kind of you know, we were living in Excel, Excel documents and Google Sheets and you know, stuff wasn't really clearly organized in a good good consistent fashion. 

We use Dropbox, we got that setup, we got a chart of accounts and you know, everything's at a certain order for every deal. everything's first so we were like a disorganized a little bit, you would like, spend 15 minutes trying to find a copy of the syllabus, same thing because it was in this one folder and this one document is one property in a different folder. I got really, really frustrating. everything's very standardized, what the way we did that, and then we didn't have any policies or procedures kind of documented. 

we went through a series of a year and you know, the lady, we are just kind of interviewed us and we now if you come in and we have a policy procedure and documented somewhere, every everything that we do most everything that we do, so the new employee comes in, there's something to refer him to and reference into. then and than once we started up and going we you know, layered out administrative help, we got some analytical help we have some of that kind of runs or transactions for us because we're always kind of like prepared We're in escrow, we're buying, selling, refining, someone's got to stay on top of all the transactional stuff with the lender, with the title company with insurance, all that stuff. 

then eventually we hired an asset manager. we have someone that his job is to engage with the management company and you know, day to day deal with all that kind of stuff that comes off the properties, making sure we're pushing the rents and we're trying to stay on top of budget, or if we're off budget, why we off budget, how can we course correct, and all that stuff, and then a lot of stuff, we use technology to try to help take take some of the administrative nightmare off of us. we have an investor portal, let's see here, like a CRM tool, store their documents, as well as it allows us to help process equity raises, as well. we got all that stuff, and it's extremely streamlined. If you invest with us. 

This is all automated, you sign stuff electronically, and you can wire it and so it's just kind of over over a series of years and deals every deal we do We try to do like a will call like a post mortem. at the end of the deal, we kind of go over the good, the bad, what do you want to improve upon? What do we not want to do again stuff like that. so, so the list is ever growing. But now Fortunately, the things that we improve upon are so minor, in the grand scheme of things, but the beginning is like, Oh, crap, let's never do that. Again. 

That was horrible. figure out how we don't do that and make that mistake. now the mistakes are pretty small and just kind of tweaks so the, the process is not big, bigger, bigger issues like, like we dealt with on the first several deals. That's kind of how we grew as a company and it's just incremental. deal by deal is got a little bit we try to get a little bit better with every deal that we do.

Taylor   13:43  

You know, I'm curious. While we're on the topic, if I can actually if I can slide back to the topic of raising money, we're not that topic anymore. But you know, when we first we initially met probably three years ago, I mean, you have no reason to remember having a conversation with me but you were very nice to me and I met you at a real estate guys secrets of successful syndication conference where you were on stage talking about your business and all the things that you do. frankly, I can't recall the exact topic right now because it's three years ago or something like that. How has being on stage and becoming more and more like a public, a person public figure, a name brand, if you will. how has that impacted your business both in terms of raising capital and really bringing deal flow to YouTube because I'm sure your brokers have gotten to know you better and all of that. Yeah,

Michael Becker  14:33  

um so wouldn't Yeah, we met so I for several years spoke of the secrets of successful syndication. I was a tongue twister for me saying that and with the real estate guys on the cruise, so that that's been that was that was good. it was a way of getting some certain level of credibility and you kind of get getting a little bit known. 

we have a podcast much like you write to you co host the old Capitol real estate investing podcast my partner Paul so that's on your iTunes or Stitcher or probably anywhere you hear my voice you probably find that Rachel but that's really been a very big key there as well so we get as crazy as it sounds when we started out like I joked that we had dozens of listeners when we started out and now are consistent basis get over 40,000 downloads a month it's very you know, nice subject matter writes about apartment investing and financing and all the things around it so you know, you’ve got to be kind of an apartment nerd listen to it, you know, my wife doesn't listen to this type of stuff right as a relative you got into it to those to do it. 

But you know, the people that can do it are into it and that I get you know, multiple calls a week off of the off the podcast, and we various you know, literally and you know, through the people in the relationship to corn will raise literally millions of dollars over the past several years. 

Just by me talking to a microphone is crazy and I found is a good way that you know, you probably experiences a little bit yourself that people that sit there and they listen to hundred episodes you talking or something with their ear buds in the air they they know you they have a relationship with you You never have met them ever but they feel like they know you because they just listened to you over and over again so like by the time they finally reach out they've already heard me for hours are dozens and dozens of hours. they're already kind of generally understand what my principles are and what I understand so the conversion to be you know, an active investors is really really short at that point because they already feel comfortable with me. then we get them in the database and we'll do a five or six see raise where we can generally advertisers arms want to take a credit investors in and that's really been a good way to kind of build a build a list quite a bit. 

speaking having a platform you know, that's certainly good. I want to kind of be more like a magnet so I want to attract people to me more than me trying to go seek people out. I find that's more effective and from both the time standpoint and Nazi converting people over so and then You know, when you start now all this stuff is relative to right. like if you've done one deal, the next person has done nothing you're 100% more experienced and your Counterparty, right, so whether you know, one of the things I like to think has been pretty good, I see a lot of people do is they'll do like a little beat up. 

start up a meet up at the banquet room at the Mexican restaurant you down and then you start inviting people out and maybe have a guest speaker and those people I've seen the really, really consistent with it will they start out with you know, 10 people in the room and then you know, a year later they have 100 or 200 people show up on a on a regular basis. that's a good way to build credibility. You don't need to provide all the content, you've seen probably the conduit to it introduced the insurance insurance broker or the management company or whoever to be the guest speaker. I think the key really just showing up and being consistent with it. That goes a long way in this business for sure.

Taylor   17:54  

That's great. That's why I'm following that formula myself. I host a meetup. It's been doing like two and a half years, about half A mile up at the end, but it's not a Mexican restaurant. Irish pub there. Yeah, yeah, you better it's great formula. Great formula. So, while we've got you we're recording this in November of 2019. the date is goes up, at least the plan is January 23 2020. there'll be a little bit of a time gap in there. Yeah. But I want to get your opinion on the state of the market. I mean, you're buying in Dallas, Dallas is a hot market. Right. But you know, generally, what do you think about where we are headed over the next three to five years they fed just cut rates again. What do you think especially from you know, an apartment investor standpoint, I

Michael Becker  18:39  

mean, I think every every every area is different, right? So it's really kind of dependent on your location, right. I think if I was owning a rent subsidized or rent stabilized apartments in New York City, I'd feel a lot worse today than owning a bunch of you know, and then if I was in California, probably similar things. there's certainly the markets always ever changing. But you know, I think generally speaking, I still I'm still pretty bullish particularly on the markets that we focus on on text is on Dallas Fort Worth and awesome those are the two markets we focus on you know, there's four major markets and those are my estimation in my opinion those are the two best markets and what, what I try to strive to do is you know, I live in Dallas been here my entire life I'm partners at Austin well physical presence so the two markets that we that we do business and we focus on and not say that that's a necessity but it certainly helps being in the market you know, because then you get to build these deeper relationships and you know, when we're done here I go into a holiday happy hour thing with one of the big brokerage shops in town and you know, they're all the all the all the brokers from that, that shop, we're going to be there and I'm going to go spend some time with them and being local is super easy for me to do.

But so that this kind of so one, I think we you know, strive to try to get our unfair share deals whether that's Off market stuff or whether I'm working a deal but we're going to get an off market deal I want to try to get the first phone call and I'm working to deal I want to have the last phone call right so I kind of get that piece information maybe the next person doesn't have and that's what I strive to get. but we're really trying to try to do our best to save as disciplined as possible. They'll have a very specific criteria you know, buying typically suburban multifamily deals typically have some level of value add component to it that are in the better school districts near retail near you know, fairly major thoroughfares near you know, employers that you know, that have 10% or so below market rents are more becoming these deals people capitalized here the deferred maintenance, upgrade the units of where the common areas and kind of push the rents and so we're just trying to find something that's a relative value today compared to the other stuff and kind of the state of the market. 

it's I think in the long run, I don't know what's gonna stop Texas, right. I'm in Texas. is you know, growing disproportionately faster than most other parts of the country. you got Arizona, you got Texas, you got Florida, Georgia kind of the southeast, South, the south eastern states, from what I kind of read about, I don't really know those because we're not in the market. But you know, those seem to be pretty good areas kind of target. like I said, if you're in New York, or if you're in California, or Detroit, or some of these other places, that might be a little more difficult to talk rate and one of the stats I like to give it was really, really important, even with with what I'm about to say, but you know, if you can buy these deals right at a relative value, manage them well, to cost effective spot renovations, those things really, really matter.

But in the grand scheme of things you could take like the 50,000 foot view Dallas Fort Worth, if you're here in 2010, we had about 6 million people in our metropolitan area. Fast forward to the end of last year in 2018 and 2013. There's about seven and a half million people. we grew about a million people in the metro Boston area and about eight year period. The projections are somewhere between 2030 and 2035. Again, the damn near 10 million people and the multiple scenarios, that's like two and a half million more people that ended 2018. if you think about that, that's like the equivalent of the entire metropolitan area of either Orlando or Charlotte, put on top of Dallas. I don't know much but if that's anywhere close to reality, with the project, terms of reality, rents have to go higher, like they just have to be higher. if you do all the other things, right, you don't over leveraged you deal you set it up structurally right? With the type of loan you put on a without over leverage, again, having the property manager in place, I'm the proper capital plan in place, and you can kind of weather any sort of hiccups along the way, a general trend in the market like Dallas or even more so in Austin, is you know, people are going to come in and the prices will go up. 

I mean, so I don't know if that answers your question. we're still buying. We're just trying to be selective like we always felt like we always have been You know, and then one of the other things to that that I found in this business. One of the things I like to say it's a completely unfair business, right? A lot of this is who what chips, you can trade. part of that unfairness is bigger is better. the types of loans and the pricing of loans that I can do today, that now that we bought hundreds of millions of dollars, and I'm a Freddie Mac's like, sponsor, right, I get better pricing than the next guy who's doing this first deal or third or fifth deal, just because I have my track record. I can look at the same deal. 

if I can get two more years of IO a little bit more loan proceeds and lower my spread 20 basis points, my returns are going to look better than your returns is because of that. it's completely unfair, but you know, you can earn it through through doing deals. just trying to be strategic about the types of debt we put on and you know, the location of the markets that we do so I don't know if that answered your question or not, but those are some of my kind of general thoughts about the market and kind of how we're still able to, I think make some sense of deals or Maybe maybe the next guy may or may not be able to.

Taylor   24:03  

Yeah, absolutely. It's real estate in general is not an efficient marketplace, especially larger scale multifamily. When somebody new is coming in, and they're looking for deals, I mean, if they're looking for, I don't know, 200 units, something like that they're competing with you, you're going to see that deal first. the broker knows that okay, if Michael or FBI advisory makes an offer on this deal, they can close it that's not gonna be a problem at all, whereas the new guy coming in he might not be able to close on the deal. it's a big question mark.

Michael Becker  24:31  

They got they got it you got to overcome that I'll do your first deal, right? You got to give them confidence that you can get a DUNS to have your ducks in a row knowing where your debts coming from knowing where he's coming from. quite frankly, in the recent past most of these deals are requiring you know, some portion of the of your earnest money to go non refundable. Yes, day one we signed the contract. those are some things you know, probably seem to be a customer and willing to do right now at the end of 29. but all I know is the future is gonna be different than right now. at some point, that'll turn but as of right now in the recent past and the foreseeable future that I could see that's going to be probably the environment you gonna have to navigate and you know, just got to be, like I said, kind of at the front end of the interview, just be real about where you sit, what you have, what you lack, and then try to go solve, solve for what you lack kind of make your position with the lender or with your investor or with the broker or whoever it is you seem to make sure you understand what your Counterparty wants, where you what you have, what you lack, and then try to find something to solve for you deficiency in whatever area that you need to solve for.

Taylor   25:41  

Nice. I like that. I have a question that I would like to ask, especially people that have been very successful at ours at a certain point in their real estate investing career. the essence of it is what's stopping you from selling everything and just going and sitting Beach because presumably sure you're probably at a point where you could cash out your cash in your chips and just

Michael Becker  26:06  

retire. Yeah like well I'm 41 so one I'm 41 I got an eight and 10 year old so I don't know what I would do right school so one so I it's not like a up and go to go to have a perpetual vacation because I'm kind of tied in the town that But the second thing is I'd be bored I mean that'd be a bad I don't know what I would do if I didn't I'm kind of a deal junkie I like to kind of be in the action a little bit and then so does a couple couple of answers but I enjoy what I do I like the competition of it. I'm you know, I like I like to think of it like it's a feel good business right. we get to do well by doing good. we get to generally mostly properties we take over have some sort of issues with them. 

Not always but generally answers or issues. we come in, solve these issues make a better physical product. prefer hopefully along the way, we're improving the quality of life for the resident experience with the tenants on there. then I get to help you know, people that generally are they're credited but there's kind of regular people that work and save the money and trying to get them you know, hopefully above average returns relative to the stock market at a at a lower risk profile. save us some taxes and if we do all that, right, you as a sponsor get rewarded pretty well financially for you know, solving a lot of problems that are out there in the world. it's is you get to do well by doing good solving a lot of people's problems with us, the residents, your investors the property, the city, you kind of get to help a lot of people out along the

Taylor   27:41  

way. Nice. I love that. listeners will know that I break the fourth wall on the show all the time, and it is 6:30pm my time in November, which means it's 530 your time and you have another call after this after we're done. you're you're not just I mean you're not just having fun. right you're dedicated you're and it looks like you're in the office right now you're not at the office you're really hustle and that's that's really something so hats off to you. But right now we're going to take a quick break for our sponsor first one what is the best investment you've ever made?

Michael Becker  28:20  

This investment I've ever made so kind of give you two answers I guess you can kind of monetary really is we bought an I think public say the regional place apartment complex. We own that thing for about 14 months and we got to kill about a five x multiple well 40 months. so that was that was unbelievable deal. bought it for 50 adore sold roughly 100 and 506 adore and about cash flow the entire time. that was the ultimate worst to first kind of in class and in this market, is a real role. dumpy property and we're We'll come back and fix it. Yeah, so that was the best, best financial deal we've done. I think you really kind of the best investment I didn't ever join like a mentoring club or anything, but really just kind of investing a lot of my time into my education, paying attention at work, I had a job where I would just loan on apartments all the time, underwrite deal after deal, and I paid attention. I try to take that knowledge I learned there and apply it to myself in my personal time. I had a motto when I was still working, kind of getting the houses going the first couple of apartments, were still working for the bank I'd go to the office and I would pay myself first and I pay my previous employer second. maybe I was in the best employee those last couple of years, but I'd really make sure I was like I was able to do all of it, but I wanted to make sure that I did activities that would then drive my greater mission forward as I was trying to work myself out of out of my nine to five.

Taylor   29:50  

Nice, nice. On the other side of that, what is the worst investment you've ever made?

Michael Becker  29:56  

Worst investment I've ever made. we've been fortunate We're really haven't had too many terrible apartment deals. I have invested in some oil gas things. that hasn't worked out so well for me and I know nothing about it I was at a year or two ago thinking like I literally can't have all my money and apartments or cash because that's going to do the stock market, right? So I can either have cash or apartments. every time I try to do anything but cash or apartments, it never seems to work out very well for me. I think it's been a good lesson for me to learn that losing the best Ben, also invest in a restaurant that's topping good either. anytime I kind of taken away from focus of control of the deal never seems to work out. I just really want to kind of kind of what's old Rockefeller saying is, no, it's okay to put all your eggs in the basket. Just make sure you watch that basket. Right. So, power, the power of focus has been really a good lesson to learn every time I try to get up way from from what I know what I understand, it generally doesn't work out. Great for me So, so focus on one thing and try to do really well, or you invest with people that know what the hell they're doing. I didn't seem to do so well on these oil and gas deals I've done so.

Taylor   31:17  

Well, that's very taxing of you. I sticking with a Texan theme, so there's nothing wrong with Right. Yeah. third question as my favorite one, what is the most important lesson that you've learned in investing?

Michael Becker  31:32  

You know, I mean, like it like the focus, I think is is to reiterate that the power focuses is certainly good that, that it's not only just like I pick one asset class, I have a very specific profile of what I do. I mean we really were just in one market for the longest time and then we then added a second market, which was complimentary because 180 miles away, same state a lot of people overlap. we just really make sure that we understood it. I think I think that I see a lot of people that are kind of newer in the business and they just want to deal I just want a good deal doesn't matter where it is, what it is, how big it is, I just want to get a deal. they're, they're out there chasing it, and then they're in maybe they buy a deal in Memphis, Tennessee, and I buy a deal in Indianapolis and I buy a deal and you know what, Utah or whatever and then there's so spread out I got a 40 unit deal here and a 50 unit deal there is very hard if you want to be a professional investor and do this for a living, it's very hard to scale. If you're if you're fragmented attention, diverted, no one, it's hard to kind of keep your arms around that women not as tight geographical location, but to really the to do the shop, right? You know, the brokers really control a lot of the major market. if you're just kind of bouncing from Market to Market market, you never really get to forum, that those deeper relationships and really get to take advantage of the track record you have in that market. we really took the time to make sure that we you know, we're ingrained in a market and we were fortunate Del Sol worth is a really large market and we got 800,000 Margaret apartments in Dallas, Fort Worth is about 2000 and Austin. So, but a million potential units we can go after. the two markets and they build a lot, which is good and bad does this ever growing apartment stock here as well. 

If you're in if you're in a little town that's got 100,000 people, and maybe you got thousand apartment units in the entire MSA, then that might not be the right place to focus on. maybe try to find the nearest town that's got reasonable economic base and you know, hopefully that's business a landlord friendly so maybe try to focus on that next major towns, maybe three, four hours away. Or if you're in California you want to buy in Phoenix or Dallas or wherever focus on one market, maybe two at the most and then try to really work your way and I have a buddy of mine that lives in San Jose that's basically lives there. 

But he's effectively like a local because he just owns a Dallas Fort Worth and everyone in town knows he's always in town. He's been in our market for a long time. he's done a pretty good job of just you know, focusing on one thing And not spreading yourself too, then. I think that was kind of elaborate on the power of focus. I think that's really some of the advantages. If you're really serious about this business, you want to take it kind of, and scale it up as it's hard to do it if you're too scattered, and too many different places.

Taylor   34:16  

Interesting. That's a great point. I think people tend to want to get into real estate investing we are very potentially subject to shiny object syndrome, right. I'm sure you've heard that before. I don't know whether you've struggled with that yourself. But I sure have.

Michael Becker  34:31  

Yeah, I try not to feel I'm trying to be self critical. not that I'm a dumb guy, but I'm not the most my partner is definitely smarter than me from that standpoint. But one of the things I have been able to do back to kind of the engineer comment from earlier, a lot of those guys don't kind of get in their own way all the time. They always need more more questions, more questions. as soon as I know enough to know that this is a good deal we start taking action, we take it pretty quick. nothing, we don't go back and verify Double check and triple check everything as possible and you know, we have a system in place and you know, we have checks checks that we try to do and take as much risk as possible but you know, I don't get my own way right so i don't i don't need to you know, keep keep re analyzing, analyzing, analyzing the reconfirm my decision usually will make a decision will they will take action pretty quick and that's what a lot of people struggle with. that's much easier today to know what it was at the at the onset, because you don't know what you don't know and you unsure yourself. starting I didn't necessarily need to buy these old rent houses I did, but starting a little smaller, getting some confidence going through that process, really those the conference over really kind of transition as I decided to scale up. doing some smaller deals, whether it's a 20 unit deal or 50 unit deal or whatever it is that's usually the natural progression as you kind of scale up but once you kind of go go successfully buy one of those operated and hopefully sell it it's not that dissimilar to going to scale up from 20 to 200 units and and do These larger deals and that confidence you gained, certainly will help you along the way

Taylor   36:05  

helps you not ask some of those really detailed questions and need all the information along the way, because you get more comfortable with some of those unknowns that are involved,

Michael Becker  36:15  

that that that are what's important and what's not important sometimes you talk to these brokers and these guys go on tour apartment complex, and they just get so concerned about the, the coke machine that's on the property and what the contract split is, and you're talking about $100 a month into a property that produces $3 million in revenue a year. It's like, it doesn't matter the grand scheme of things, focus experience and repetition. just kind of allows you to focus on the get to the heart of what is really the most critical deal point quickly and make sure you can make that assessment and that's what experience really gets you.

I can go to the heart of what this deal is real quick or if you don't know what You're doing you you will get lost going down some rabbit hole that the end of the day doesn't really matter. if you don't understand this one key thing, you're not gonna be able to overcome this deal and I can hopefully get to that pretty quickly almost immediately into the deal. Or maybe if it my first deal I might have taken me will be Andrew path to get to that point in a whole bunch of waste of time on my own and the broker and if you're asking a bunch of silly questions don't really matter to the broker then you kind of lose credibility as well.

Taylor   37:28  

Well, I definitely appreciate all of that lesson and everything that you've you've taught us today if folks want to learn more about you more about your company, where can they get in touch with you and learn more?

Michael Becker  37:39  

Yeah, it's really two ways like like we mentioned, I think the best way a lot of people find out more about us and you know, really if you listen to the podcast here, you probably into apartment investing, so I've certainly recommend looking up the old Capitol real estate investing podcast so you can find that like an iTunes or Stitcher or like I said, probably where you hear my voice you probably find our podcast. We have a website which is old capital podcast calm or really the way I what I focus my time on and really what I run is our company SPI advisory where we go out and buy large scale apartment complexes and typically syndicate the capital you can simply go to to our company's website if you go there I'm always happy to have 10 to 15 minute calls with people I meet off of a podcast but so you go to company's website which is www.sp I advisor calm as SPI Alex by advisor calm there's a Contact Us form fill that out we'll get it all set up.

Taylor   38:35  

Awesome. Awesome. That's great and the podcast is fantastic it you really you guys really have actionable detailed information in there. It's not it's not fluff at all. It's a lot of like you said apartment nerd information and in the best way possible. It's

Michael Becker  38:52  

fantastic. You don't like apartments, this is not the one for you. But if you do like apartments

Taylor   39:00  

Alright, well, that's fantastic. Thank you for joining us once again today. then I gotta say, I'll say it publicly here. But you know, when I was when we, we met at the real estate guys event, I hadn't invested in anything. I hadn't done anything. I hadn't raised a dime from anybody I hadn't done. I hadn't been to an event like that before. I was timid, I'm an introverted guy, my backgrounds in engineering. sure I remember you came up to me looked at my name tag, you said, Taylor, how you doing? And we chatted for a little while and it was just a you know, I appreciate that because kind of what you did for me, it helped me get into that mode where now when I go to events like that I have no timidity at all about walking up and talking to anybody. I don't care if they've been on stage or what but you know, you having been the guy on stage that day and then walking up to me and talking to me, it was just like, why is this guy Why is he talking to me right now, but it helped me a lot. I you know, on a personal

Unknown Speaker  39:59  

Really appreciate that.

Michael Becker  40:01  

And I was very nice to you. that's one of the things I found to that. I'm a little bit more of an introvert personally. I find it's almost easier to be the guy from the stage. You give a little presentation, then people's Come come to you, typically to seek you out so I don't have to do the whole. Hi, Michael Becker. Nice to meet you. conversation. Originally, I did to you that one day three years ago,

Taylor   40:22  

Well, I'm sure I'm not the only one that's gotten that plus, since that time, you and I have both grown beards. that's right, both gotten better. Awesome. I appreciate you having me on. Thanks so much. happy to talk with you to everybody. thank you for tuning in. If you're enjoying the show, please leave us a rating and review on iTunes. Very big help. if anyone that could use a little bit more passive wealth in their lives, please share the show with them and get them involved. I hope you have a great rest of your day and a great week and we'll talk to you on the next one. Bye

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