Different Types of Real Estate Investors with Spencer Hilligoss

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[casey_]: hey there and welcome to today's episode
of cash flow pro your daily real estate

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[casey_]: investing podcast and youtubechannel i'm here today
with rob beardsley how are you

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[rob_beardsley]: i'm doing great thanks for having me

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[casey_]: absolutely man it's lone star capital right

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[rob_beardsley]: that's right

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[casey_]: awesome and you were just talking about
this houston deal that you got and that

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[casey_]: you all are actively raising for and
we can't wait to dig into that but

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[casey_]: first of all why don't you tell
us just a little bit about your where

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[casey_]: you come from your history and then
kind of how you how you angled into

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[casey_]: the real estate business to begin with

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[rob_beardsley]: sure so my business partner we started
lone star capital four and a half years

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[rob_beardsley]: ago to focus on owning an operating
texas work for use housing to date we've

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[rob_beardsley]: acquired over three hundred million in that's
primarily in houston and last year we actually

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[rob_beardsley]: launched our property management company radiance living
so we are now vertically integrated and our

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[rob_beardsley]: management team only manages our portfolios we
don't do any third party management keeps really

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[rob_beardsley]: focused and focused on optimizing the portfolio
for us and our investors before starting loan

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[rob_beardsley]: star i had real estate experience through
my family growing up my family ran a

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[rob_beardsley]: residential brokerage firm in silicon valley

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[casey_]: ye

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[rob_beardsley]: from home so i was around doing
you hearing them do deals all day long

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[casey_]: sure

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[rob_beardsley]: but everything was on the single family
side so it was buying and selling homes

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[rob_beardsley]: development and the construction of single family
homes so it wasn't until about six years

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[rob_beardsley]: ago that we got involved in multi
family as kind of that next step and

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[rob_beardsley]: i led the way on that step
and unfortunately at the time i family was

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[rob_beardsley]: too busy with the main residential business
to really go full into multi family and

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[rob_beardsley]: so that's when i had the good
fortune of meeting my business partner and starting

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[rob_beardsley]: loan star on our own which has
and a really awesome journey so far

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[casey_]: sure sure well that's great man and
you said three hundred million assets under managed

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[casey_]: i mean that's unreal that's

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[rob_beardsley]: just

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[casey_]: and and how many years did you
say what year did you say you all

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[casey_]: first started

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[rob_beardsley]: early twenty eight teens about four and
a half

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[casey_]: so yeah that's what i mean i
was thinking that's that's that's pretty that's a

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[casey_]: pretty hefty load for for a little
more than four years so that's great man

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[casey_]: now are you all mainly focused houston
market obviously with a term

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[rob_beardsley]: yeah

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[casey_]: loan star maybe i'm assuming maybe you
all are probably at least focused in texas

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[casey_]: but are you mostly in houston

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[rob_beardsley]: yeah we're definitely houston focused with the
plans to expand to dallas fort worth but

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[rob_beardsley]: focus has always been a key for
us focus for the sourcing on the acquisition

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[rob_beardsley]: side right being chasing deals in a
smaller area lets us be more competitive lets

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[rob_beardsley]: us know better as to what we're
underwriting and also have better relationships with the

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[rob_beardsley]: brokers and owners in the yeah so
focus has been really key for our success

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[casey_]: sure sure now what do you we're
gonna we usually focus more on the beginnings

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[casey_]: of real estate companies and how people
got started and so on but one question

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[casey_]: that all it seems to come up
so we're going to move more towards your

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[casey_]: experience side but the question that always
seems to come up from investors is about

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[casey_]: this vertically integrated property management stuff and
at first i thought from a investor relation

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[casey_]: standpoint it was a little bit of
a nightmare until because

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[rob_beardsley]: to

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[casey_]: i guess people look at it as
hey these people are you know they're being

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[casey_]: compensated or whatever for services

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[rob_beardsley]: yeah

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[casey_]: they're providing to their own investors and
so on but it actually became easier to

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[casey_]: discuss i finally came across the idea
that hey once these vertically integrated companies take

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[casey_]: the rent in

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[rob_beardsley]: yes

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[casey_]: the money

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[rob_beardsley]: but

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[casey_]: basically doesn't change hands again until it
goes out to the investor so it's really

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[casey_]: from from a standpoint of being able
to control everything it seems like it's a

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[casey_]: pretty good move but what do you
think obviously you all did it so you

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[casey_]: thought it was a good move but
what were some of the biggest challenges and

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[casey_]: in taking that part of on

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[rob_beardsley]: the biggest challenges are scale and then
team right property management is all a people's

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[rob_beardsley]: business and it's it's very management intensive
so

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[casey_]: yeah

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[rob_beardsley]: you know the first thing on the
scale side is you can't build a management

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[rob_beardsley]: company out of two hundred

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[casey_]: okay

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[rob_beardsley]: units you

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[casey_]: yeah

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[rob_beardsley]: need to have more scale to be
able to actually afford the corporate overhead of

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[rob_beardsley]: having you know regional managers and more
overhead staff

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[casey_]: sure

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[rob_beardsley]: and we waited a long time to
get to that point but we prepared for

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[rob_beardsley]: that point by kind of figuring out
little things along the way how wanted to

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[rob_beardsley]: manage pay role and accounting in h
r and we also were putting the team

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[rob_beardsley]: together along the way we were putting
together who do we want to be our

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[rob_beardsley]: regional manager v p of operations how
do we see that building out so we

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[rob_beardsley]: were really fortunate to have the right
team come together so that transition which can

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[rob_beardsley]: be a hard part

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[casey_]: sure

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[rob_beardsley]: the transition was very smooth for us
and then the other thing is is i

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[rob_beardsley]: don't think people really talk about this
as much but i don't think you want

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[rob_beardsley]: to be too big because

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[casey_]: yeah

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[rob_beardsley]: once you get so big making the
transition could be a total nightmare going taking

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[rob_beardsley]: ten thousand units all in house at
once transitioning

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[casey_]: yeah

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[rob_beardsley]: all those properties that could be really
tough so i think we transitioned right at

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[rob_beardsley]: the right time you know it was
way before the property management business would be

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[rob_beardsley]: profitable and the property management business is
still not profitable today because we run it

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[rob_beardsley]: that way to really make sure that
we're investing into the properties rather than trying

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[rob_beardsley]: to suck profits out of the management
side right management

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[casey_]: sure

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[rob_beardsley]: side is not what we're in the
business for so uh yeah i think getting

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[rob_beardsley]: ve getting moving early is really helpful

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[casey_]: yea and of course there's always the
the people that i know of that are

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[casey_]: in the property management business slash capitalizing
business slash real estate investing business all across

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[casey_]: that board it seems to me like
the term of the day is the disclosure

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[casey_]: like it's just it's almost like hey
if you just tell people it's almost it

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[casey_]: would almost

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[rob_beardsley]: yes

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[casey_]: like if people just found out later
that you ere managing the properties that you're

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[rob_beardsley]: i

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[casey_]: that you having them invest in it
seems like

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[rob_beardsley]: i

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[casey_]: that would be like that would

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[rob_beardsley]: ah

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[casey_]: be where it wouldn't be cool but
as long as people are you're just up

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[casey_]: front you're like hey

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[rob_beardsley]: ye

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[casey_]: we got a property man in company
this is the reason why we have a

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[casey_]: property management company i mean i've found
that people really just tend to kind of

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[casey_]: go along with that and say oh
they're like okay yeah well that makes sense

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[casey_]: otherwise they just they tend to start
question those kinds of things but um so

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[casey_]: on the outside capital part of your
all's business where you go for instance let's

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[casey_]: talk about let's talk about this past
deal and you were talking about doing a

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[casey_]: webinar and some other things that you
all have going on for that specific deal

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[casey_]: can you walk us a little bit
through like maybe where you find investors how

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[casey_]: do you attract new investors

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[rob_beardsley]: yeah

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[casey_]: and obviously you have an investor base
people that repeat but where do you find

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[casey_]: the new ones yes

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[rob_beardsley]: i think our biggest sources of new
investors are linked in podcasts just like this

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[rob_beardsley]: one

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[casey_]: sure

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[rob_beardsley]: and my book that i published a
little over two years ago the definitive guide

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[rob_beardsley]: to underwriting multi family acquisitions and that
one

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[casey_]: yep

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[rob_beardsley]: is kind of a funny because you
wouldn't really think that passive investors would buy

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[rob_beardsley]: that book because it's very nice and
somewhat advanced but surprisingly a lot of investors

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[rob_beardsley]: buy that book and then they reach
out and are interested in learning more about

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[rob_beardsley]: investing with us so that really great

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[casey_]: well

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[rob_beardsley]: to

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[casey_]: the

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[rob_beardsley]: see

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[casey_]: book proves two things the book proves
you know what you're talking about because why

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[casey_]: you know you wrote a book about
it and then the other part of it

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[casey_]: is is the book proves that this
is the model that you use and so

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[casey_]: once you've kind of double you kind
of double down on that of course they're

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[casey_]: going to be like hey yeah this
guy knows what he's talking about and hey

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[casey_]: by the way this is a really
extensive um

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[rob_beardsley]: oh

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[casey_]: you know underwriting a property is something
that's very it's a very time consuming and

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[casey_]: hey i'll just invest with him and
let him take care of all right

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[rob_beardsley]: yeah that's a good point ah so
that's been very successful and we've been posting

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[rob_beardsley]: on linked in daily for i don't
know how long so been growing the linked

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[rob_beardsley]: in audience and trying to provide quality
content unique quality content that

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[casey_]: what types

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[rob_beardsley]: people aren't

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[casey_]: of content are you providing on linked
in

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[rob_beardsley]: yeah i really like making content that
is relevant to me and something that i

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[rob_beardsley]: would personally be interested in so anything
that comes up in our business that is

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[rob_beardsley]: maybe a new trend lenders are changing
their underwriting or debt you know has changed

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[rob_beardsley]: i like to talk about that kind
of stuff and

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[casey_]: yeah

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[rob_beardsley]: get more advanced talk about different nuances
and partnership structures so it's really not like

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[rob_beardsley]: the joke i like to say is
you know i don't like to make content

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[rob_beardsley]: about what is a cap rate you
know certainly

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[casey_]: yeah

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[rob_beardsley]: can be helpful for a lot of
people but that's not the content i'm passionate

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[rob_beardsley]: about making so

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[casey_]: sure

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[rob_beardsley]: yeah

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[casey_]: it has to be relevant to today
too i found that to be a big

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[casey_]: big thing especially well really across all
social medias it's like you're like what is

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[casey_]: a cap rate caprae is when you
that can be kind of basically just just

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[casey_]: dry and not very interesting but when
you start relating it to what what is

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[casey_]: the topic of discussion of the day
or what is today's lending like you said

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[casey_]: i mean i think that's great man
that's and then do you lead people from

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[casey_]: linked in do you just like leave
teasers about hey check out this new deal

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[casey_]: or you leave a video that says
man we've got this bad are bad bad

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[casey_]: in a good way we've got this
awesome hunderd an eighty two unit deal coming

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[casey_]: up in houston man you've got to
be on here for the web and are

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[casey_]: to check this out i mean is
that the kind of stuff that you do

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[casey_]: to eventually lead that audience to your
webinar

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[rob_beardsley]: no but it sounded really good when
you did it so

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[casey_]: awesome yeah for

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[rob_beardsley]: maybe

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[casey_]: me

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[rob_beardsley]: yeah

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[casey_]: i'm

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[rob_beardsley]: maybe

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[casey_]: free

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[rob_beardsley]: we

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[casey_]: tomorrow

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[rob_beardsley]: need your help

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[casey_]: yeah

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[rob_beardsley]: but

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[casey_]: uh

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[rob_beardsley]: we we don't i mean so we've
actually only done five o six be offerings

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[rob_beardsley]: so

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[casey_]: okay

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[rob_beardsley]: that limits us to

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[casey_]: changes

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[rob_beardsley]: not being

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[casey_]: that year

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[rob_beardsley]: able to publicly talk about will publicly
solicit ester's first

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[casey_]: sure

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[rob_beardsley]: specific deal we can obviously tell people
hey if you're iterested in earning more about

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[rob_beardsley]: investing with us you can so you
know we've been really passive about our sales

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[rob_beardsley]: strategy if you were and i don't
and i think honestly i think that's a

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[rob_beardsley]: bad thing i think we can improve
that a lot we certainly on linked in

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[rob_beardsley]: say hey if you're interested here's our
website you can fill out the new investor

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[rob_beardsley]: form will get in touch with you
but we've been up to this point very

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[rob_beardsley]: past about the sales process in the
growth which is kind of matching my personality

212
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[rob_beardsley]: i've never been a really you know
good sales person so that needs to change

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[rob_beardsley]: we need to fix that and we
need to do that because i think we've

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[rob_beardsley]: got a lot of people who are
interested in what we're up to and we're

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[rob_beardsley]: just not doing a great job of
following up and really making sure that people

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[rob_beardsley]: are getting fully exposed to what we're
what we're up to

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[casey_]: sure sure so so basically your your
your webanarinvites are our pretty much to that

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[casey_]: procured list of people that you have
a previous relationship with it

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[rob_beardsley]: yep

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[casey_]: man that's that's insane

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[rob_beardsley]: m

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[casey_]: i mean just you just don't hear
a lot of people most of the time

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[casey_]: five or six b people are like
you know it's tough to it's really hard

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[casey_]: to scale i guess or you don't
see a lot of people scaling it because

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[casey_]: i mean obviously what do they say
a person can have six to eight hundred

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[casey_]: immediate contact is basically that's like i
know that number kind of has gone up

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[rob_beardsley]: so

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[casey_]: and down as social medias come up
and down but but that's what i've always

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[casey_]: heard so

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[rob_beardsley]: so

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[casey_]: it's almost like that limits you but
man that's awesome that you all are are

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[casey_]: well and it's good that you've got

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[rob_beardsley]: yeah

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[casey_]: enough people in there that have enough
money to

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[rob_beardsley]: ay

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[casey_]: facilitate what you want to do within
a five or six b so um well

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[casey_]: what else is going on with loan
star i mean you all obviously you said

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[casey_]: this new asset is right across the
street or next door to one you previously

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[casey_]: closed on

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[rob_beardsley]: yeah that's right so we're under contract
in a couple of deals right now the

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[rob_beardsley]: one we were talking about before we
went live is our newest deal and it's

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[rob_beardsley]: right next door to a deal we
closed a month ago so it's just a

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[rob_beardsley]: great add on acquisition makes it in
a sense we'll be able to trim down

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[rob_beardsley]: pay roll and just

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[casey_]: sure

246
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[rob_beardsley]: manage the deals together more efficiently so
finding opportunities like that with a good story

247
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[rob_beardsley]: where it's a long term owner and
the units have been been touched in years

248
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[rob_beardsley]: uh really is perfect for our strategy
of value ad

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[casey_]: got you got you well that's awesome
and so are you all looking at potentially

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[casey_]: expanding out of the houston market or
you because you said focus is a big

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[casey_]: pillar of your business and it's obvious
that you all

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[rob_beardsley]: you

253
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[casey_]: are but do you see yourself kind
of growing out of that market or trying

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[casey_]: to diversify a little bit

255
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[rob_beardsley]: yeah we definitely need to on multiple
fronts you know firstly i think it's good

256
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[rob_beardsley]: to diversify our portfolio to grow and
if we want to grow and actually get

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[rob_beardsley]: more acquisitions done i think being in
more markets so long as we have the

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[rob_beardsley]: man power and expertise to do that
then it's the right move and so we

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[rob_beardsley]: absolutely

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[casey_]: yeah

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[rob_beardsley]: want to expand into dallas fort worth
as our next market where we'll do the

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[rob_beardsley]: same focus that we've had build up
the team there locally as well

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[casey_]: hm

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[rob_beardsley]: and the other reason to expand is
for our investors sake there's

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[casey_]: m

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[rob_beardsley]: plenty of investors out there that really
love us and they want to work with

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[rob_beardsley]: us or they want to work more

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[casey_]: hm

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[rob_beardsley]: with us but they're limited by not
wanting to get too concentrated in a certain

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[rob_beardsley]: market and you know that expanding that
will just be able to eventually you know

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[rob_beardsley]: raise more capital from our existing investors
and potentially attract new investors that are interested

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[rob_beardsley]: in our new market so i think
that will be a really big move for

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[rob_beardsley]: us moving for ward

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[casey_]: yeah yeah what do you see as
being the biggest challenges coming up this recording

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[casey_]: as of mid august twenty twenty two
what do you see as being the biggest

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[casey_]: challenges for the real estate indication business
moving forward

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[rob_beardsley]: well right

278
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[casey_]: yeah

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[rob_beardsley]: now the debt market is very challenging
and it's hard to find good debt quotes

280
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[rob_beardsley]: and the it's not the lender's fault
comply there's just lots of things changing every

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[rob_beardsley]: day in the economy

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[casey_]: m

283
00:15:11,497 --> 00:15:17,106
[rob_beardsley]: and in the capital market so that
that uncertainty puts a strain on everybody rate

284
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[rob_beardsley]: cap prices are strained lenders are strain
because the environment is changing and then that

285
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[rob_beardsley]: makes us going out and raising equity
harder as well so i think transactability right

286
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[rob_beardsley]: now and for probably the next six
months is going to be more difficult

287
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[casey_]: sure

288
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[rob_beardsley]: and that will get alleviated over time
as i think prices will come down slightly

289
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[rob_beardsley]: sellers will get more realistic and willing
to sell it slightly lower prices which will

290
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[rob_beardsley]: relieve some of the pressure as far
as you know trying to make the deal

291
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[rob_beardsley]: pencil between debt and equity and then
at the same time volatility and uncertainty are

292
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[rob_beardsley]: going to definitely go down over time
as well and then that will help restore

293
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[rob_beardsley]: the debt markets debt will get competitive
and we'll know i'm sure we'll get back

294
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[rob_beardsley]: to business as usual soon enough

295
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[casey_]: sure

296
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[rob_beardsley]: oh

297
00:16:06,254 --> 00:16:07,656
[casey_]: sure yeah and

298
00:16:07,573 --> 00:16:07,635
[rob_beardsley]: he

299
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[casey_]: where so

300
00:16:10,650 --> 00:16:10,793
[rob_beardsley]: oh

301
00:16:12,113 --> 00:16:16,701
[casey_]: where are you sourcing obviously i know
i have a pretty good idea where the

302
00:16:16,821 --> 00:16:20,487
[casey_]: next door deal came from it probably
came from simply just picking up the phone

303
00:16:20,527 --> 00:16:25,035
[casey_]: and calling people next door and saying
hey we've we close on this one would

304
00:16:25,055 --> 00:16:29,762
[casey_]: you do this one but but do
you all have obviously you have broker relationships

305
00:16:29,883 --> 00:16:30,043
[casey_]: but

306
00:16:29,891 --> 00:16:29,911
[rob_beardsley]: a

307
00:16:30,524 --> 00:16:35,171
[casey_]: being that you're centralized or being is
that you're focused in one market how many

308
00:16:35,913 --> 00:16:36,175
[casey_]: how many

309
00:16:36,112 --> 00:16:36,236
[rob_beardsley]: yes

310
00:16:36,255 --> 00:16:38,610
[casey_]: brokers do you all work with in
that one market

311
00:16:40,852 --> 00:16:45,499
[rob_beardsley]: so i mean every market is different
so some markets are controlled by just a

312
00:16:45,960 --> 00:16:49,867
[rob_beardsley]: small number of brokers and you just
really have to get strong relationships with those

313
00:16:50,387 --> 00:16:56,085
[rob_beardsley]: and then other markets are or spread
you know the sales are spread out amongst

314
00:16:56,105 --> 00:17:01,374
[rob_beardsley]: the bigger group so i think whatever
market you're in it's important to just really

315
00:17:01,494 --> 00:17:06,223
[rob_beardsley]: cover the brokers that are doing business
so for houston and armor ket i'm trying

316
00:17:06,243 --> 00:17:11,694
[rob_beardsley]: to think off the top of my
head there's probably somewhere around eight groups or

317
00:17:11,775 --> 00:17:15,601
[rob_beardsley]: so that are doing the vast majority
of the business and we have to

318
00:17:15,593 --> 00:17:15,735
[casey_]: sure

319
00:17:15,641 --> 00:17:18,285
[rob_beardsley]: be in touch with all of them
frequently

320
00:17:18,913 --> 00:17:19,036
[casey_]: yeah

321
00:17:18,967 --> 00:17:25,246
[rob_beardsley]: so that's yeah you know if it's
three or eight or twenty that's we have

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00:17:25,266 --> 00:17:28,872
[rob_beardsley]: to cover the market and that's that's
important to us because we want to be

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00:17:28,892 --> 00:17:32,678
[rob_beardsley]: able a source as much of the
relevant deal flow to us as possible so

324
00:17:32,738 --> 00:17:36,333
[rob_beardsley]: we can underrate everything it doesn't mean
we have to buy everything but the more

325
00:17:36,373 --> 00:17:40,180
[rob_beardsley]: we underrate the better we can the
better the deals we can do right we

326
00:17:40,220 --> 00:17:44,707
[rob_beardsley]: can pick that top one percent of
deals and making sure that we're really structuring

327
00:17:44,727 --> 00:17:45,909
[rob_beardsley]: the best deals for our investors

328
00:17:46,893 --> 00:17:47,895
[casey_]: now houston

329
00:17:47,741 --> 00:17:47,862
[rob_beardsley]: yeah

330
00:17:48,055 --> 00:17:55,047
[casey_]: is houston is either growing or consolidating
as far as living situations go because it

331
00:17:55,127 --> 00:18:01,317
[casey_]: just seems like man everybody every group
every investor group right now is like there

332
00:18:01,738 --> 00:18:02,539
[casey_]: they're focused

333
00:18:02,344 --> 00:18:02,426
[rob_beardsley]: oh

334
00:18:02,660 --> 00:18:10,913
[casey_]: on houston austin dallas what is contributing
to such vast growth i mean and i

335
00:18:11,033 --> 00:18:14,439
[casey_]: know that you know uh

336
00:18:14,790 --> 00:18:15,391
[rob_beardsley]: oh

337
00:18:15,060 --> 00:18:19,247
[casey_]: tesla moved their headquarters to austin right
but what is

338
00:18:19,020 --> 00:18:19,222
[rob_beardsley]: yeah

339
00:18:19,628 --> 00:18:25,306
[casey_]: really feeling the growth of houston because
he us it is traditionally been a market

340
00:18:25,426 --> 00:18:32,233
[casey_]: that was just kind of a or
it never was just a full and on

341
00:18:32,393 --> 00:18:37,222
[casey_]: fire let's roll type of a market
what's feeling that

342
00:18:38,870 --> 00:18:45,180
[rob_beardsley]: yeah it's a good point and there's
been strong trends across texas for for that

343
00:18:45,260 --> 00:18:53,861
[rob_beardsley]: growth as far as the population growth
the migration the job growth the corporate relocations

344
00:18:53,961 --> 00:18:59,410
[rob_beardsley]: kind of like like you mentioned with
tesla so all that's happening every day and

345
00:18:59,470 --> 00:19:05,420
[rob_beardsley]: also real estate specifically you have a
well not exactly real estate cifically but we

346
00:19:05,460 --> 00:19:09,988
[rob_beardsley]: have no state income tax in all
the states without an income tax are winners

347
00:19:10,088 --> 00:19:11,010
[rob_beardsley]: right now and

348
00:19:11,013 --> 00:19:11,134
[casey_]: yeah

349
00:19:11,050 --> 00:19:14,455
[rob_beardsley]: they have been for a while and
then specific to real estate that's a very

350
00:19:14,536 --> 00:19:20,285
[rob_beardsley]: landlord friendly state which all it contributes
to the demand from the investor side to

351
00:19:20,345 --> 00:19:27,137
[rob_beardsley]: be in texas and then houston i
think is interesting because it's historically been not

352
00:19:27,217 --> 00:19:35,056
[rob_beardsley]: the favorite market by institut tonal investors
because institutional investors have historically been worried about

353
00:19:35,096 --> 00:19:40,265
[rob_beardsley]: the boom bust nature of houston with
its dependence on energy and also the weather

354
00:19:40,365 --> 00:19:42,469
[rob_beardsley]: risk with hurricanes and flooding

355
00:19:43,193 --> 00:19:43,335
[casey_]: yeah

356
00:19:43,431 --> 00:19:48,041
[rob_beardsley]: so those are real concerns and real
risks and that has prevented or kept away

357
00:19:48,202 --> 00:19:53,061
[rob_beardsley]: many investors which has then made it
a less competitive market where you can buy

358
00:19:53,182 --> 00:19:55,905
[rob_beardsley]: better deals so long as you know
what you're doing and you know you buy

359
00:19:56,006 --> 00:20:01,442
[rob_beardsley]: right and you manage well but i
think kind of people are getting more comfortable

360
00:20:01,962 --> 00:20:06,746
[rob_beardsley]: with houston particularly on the energy front
i think people are recognizing that houston has

361
00:20:06,827 --> 00:20:08,288
[rob_beardsley]: diversified its employment base

362
00:20:08,843 --> 00:20:08,985
[casey_]: sure

363
00:20:08,989 --> 00:20:14,556
[rob_beardsley]: and now it remains to be tested
more thoroughly but i think it is a

364
00:20:14,636 --> 00:20:19,645
[rob_beardsley]: more resilient market and is no longer
really a boom bus market like it was

365
00:20:19,705 --> 00:20:23,852
[rob_beardsley]: before so i think that's helping a
lot of people in and then that's now

366
00:20:23,872 --> 00:20:27,198
[rob_beardsley]: you're seeing that rush and people want
to invest

367
00:20:27,903 --> 00:20:30,692
[casey_]: yeah yeah and it's and then of
course

368
00:20:30,711 --> 00:20:30,731
[rob_beardsley]: a

369
00:20:30,752 --> 00:20:31,675
[casey_]: you always had the

370
00:20:32,280 --> 00:20:32,940
[rob_beardsley]: yeah

371
00:20:32,297 --> 00:20:37,027
[casey_]: always a trip like i was kind
of said houston was like the california of

372
00:20:37,107 --> 00:20:41,455
[casey_]: texas where you either invested in houston
or you invested everywhere else but you didn't

373
00:20:41,495 --> 00:20:46,583
[casey_]: do both because the laws and the
rules were so specific there man

374
00:20:46,530 --> 00:20:47,250
[rob_beardsley]: yeah

375
00:20:46,623 --> 00:20:49,408
[casey_]: you could get caught with your pants
down on a deal where you to go

376
00:20:49,568 --> 00:20:53,535
[casey_]: in and you think it's just a
killer deal where everybody is standing around the

377
00:20:53,575 --> 00:20:57,862
[casey_]: people that are there are you know
they're like he's fixing to get burned or

378
00:20:57,922 --> 00:21:01,468
[casey_]: something now what i'm saying and so
that was always kind of the feeling that

379
00:21:01,508 --> 00:21:05,335
[casey_]: i got any time you talk about
the houston market in big circles or whatever

380
00:21:05,455 --> 00:21:06,877
[casey_]: so um well

381
00:21:07,230 --> 00:21:07,432
[rob_beardsley]: yeah

382
00:21:07,418 --> 00:21:11,247
[casey_]: so what's on the horizon for you
all coming up i mean you've got this

383
00:21:12,412 --> 00:21:14,440
[casey_]: how many deals did you say you
have under contract too

384
00:21:15,882 --> 00:21:18,868
[rob_beardsley]: we have three with one closing in
about a week or two

385
00:21:19,703 --> 00:21:22,710
[casey_]: got you awesome man and is that
the and then you've

386
00:21:22,591 --> 00:21:22,753
[rob_beardsley]: yeah

387
00:21:22,770 --> 00:21:24,514
[casey_]: got the two others and of course
everything

388
00:21:24,322 --> 00:21:24,403
[rob_beardsley]: so

389
00:21:24,554 --> 00:21:31,120
[casey_]: is right now as far as you're
adding all of that right to your property

390
00:21:31,220 --> 00:21:35,370
[casey_]: like you take over property management immediately
and then push it right into your deal

391
00:21:35,491 --> 00:21:35,691
[casey_]: right

392
00:21:36,380 --> 00:21:36,723
[rob_beardsley]: that's right

393
00:21:38,203 --> 00:21:41,729
[casey_]: and did you find it hard to
find you you i think you

394
00:21:41,730 --> 00:21:41,750
[rob_beardsley]: i

395
00:21:41,809 --> 00:21:45,776
[casey_]: all structured the property management company like
you have a president of vps and so

396
00:21:45,916 --> 00:21:48,781
[casey_]: on so forth did you find it
hard to fill those

397
00:21:49,100 --> 00:21:49,302
[rob_beardsley]: yes

398
00:21:49,142 --> 00:21:50,364
[casey_]: those positions

399
00:21:50,280 --> 00:21:50,501
[rob_beardsley]: oh

400
00:21:50,725 --> 00:21:56,235
[casey_]: with you know with good qualified people
that had the real estate experience to take

401
00:21:56,275 --> 00:21:58,740
[casey_]: care of it because property management man

402
00:21:58,620 --> 00:21:59,490
[rob_beardsley]: yeah

403
00:21:58,800 --> 00:22:02,558
[casey_]: can be awful i mean not fun
and

404
00:22:02,611 --> 00:22:02,733
[rob_beardsley]: yes

405
00:22:02,698 --> 00:22:06,651
[casey_]: not like property management is not for
the faint of heart

406
00:22:07,700 --> 00:22:12,688
[rob_beardsley]: no definitely not you need the experience
you need the local experience as well yeah

407
00:22:12,768 --> 00:22:16,514
[rob_beardsley]: building the team is really challenging like
i said before we were really fortunate to

408
00:22:16,574 --> 00:22:22,284
[rob_beardsley]: have some of that team built in
so we're able to hit the ground running

409
00:22:22,965 --> 00:22:27,072
[rob_beardsley]: and that's been really really solid for
us so far and right now we're in

410
00:22:27,112 --> 00:22:32,181
[rob_beardsley]: the process of actually building out our
construction side of the busne so we're bringing

411
00:22:32,221 --> 00:22:36,911
[rob_beardsley]: construction in house and that is going
to be really great once we get that

412
00:22:36,991 --> 00:22:42,596
[rob_beardsley]: going but like you're kind of alluding
to hiring for this is proving to be

413
00:22:42,656 --> 00:22:49,437
[rob_beardsley]: challenging and i think everyone's experiencing that
across different industries and so we're just staying

414
00:22:49,517 --> 00:22:54,568
[rob_beardsley]: patient and i think it's really important
to get the hiring right it's really important

415
00:22:55,293 --> 00:22:56,995
[casey_]: sure sure yeah so you're going

416
00:22:56,877 --> 00:22:57,037
[rob_beardsley]: see

417
00:22:57,016 --> 00:23:03,026
[casey_]: to have a separate construction arm separate
property management arm and a separate i guess

418
00:23:03,446 --> 00:23:06,972
[casey_]: ownership capital raising indicating whatever arm right

419
00:23:07,771 --> 00:23:08,237
[rob_beardsley]: right yep

420
00:23:09,123 --> 00:23:12,188
[casey_]: and that's awesome and all of that
in just a few years as far as

421
00:23:12,228 --> 00:23:17,056
[casey_]: this thing i mean it's really exploded
in growth and and of course i always

422
00:23:17,196 --> 00:23:21,664
[casey_]: point out the try to be the
devil's advocate a little bit on especially on

423
00:23:21,704 --> 00:23:25,570
[casey_]: the houston market just because we hear
so many rumors about it and we've never

424
00:23:25,610 --> 00:23:30,478
[casey_]: had an asset there so it's really
it's all second hand information but um but

425
00:23:30,859 --> 00:23:31,019
[casey_]: yeah

426
00:23:31,140 --> 00:23:32,670
[rob_beardsley]: yeah

427
00:23:32,161 --> 00:23:37,890
[casey_]: the construction art of that is is
pretty interesting are you all built have you

428
00:23:37,950 --> 00:23:38,871
[casey_]: built anything yet

429
00:23:40,150 --> 00:23:43,933
[rob_beardsley]: no we haven't done any development and
on the construction side for us it's going

430
00:23:43,973 --> 00:23:48,257
[rob_beardsley]: to be for our value at business
plan so when we buy a property and

431
00:23:48,277 --> 00:23:49,698
[rob_beardsley]: we have a two million dollar or
three

432
00:23:49,700 --> 00:23:49,761
[casey_]: uh

433
00:23:49,738 --> 00:23:50,499
[rob_beardsley]: million dollar budget

434
00:23:50,632 --> 00:23:50,653
[casey_]: h

435
00:23:51,330 --> 00:23:51,735
[rob_beardsley]: we'll be able

436
00:23:51,703 --> 00:23:51,826
[casey_]: yep

437
00:23:51,796 --> 00:23:58,667
[rob_beardsley]: to house more of that process as
far as the unit renovations painting and things

438
00:23:58,708 --> 00:23:59,108
[rob_beardsley]: like that

439
00:23:59,863 --> 00:24:05,172
[casey_]: got you now as far as key
principles go m what did you have to

440
00:24:05,212 --> 00:24:08,537
[casey_]: do to find people that were willing
to be kapes on your deal to take

441
00:24:08,597 --> 00:24:10,180
[casey_]: care of the balance

442
00:24:10,131 --> 00:24:10,273
[rob_beardsley]: that

443
00:24:10,240 --> 00:24:12,152
[casey_]: sheet and whatever else that ted there

444
00:24:13,610 --> 00:24:17,777
[rob_beardsley]: ah that's another really important piece of
the puzzle when you're getting started and it

445
00:24:17,797 --> 00:24:22,444
[rob_beardsley]: was something that we didn't really think
about or prepare for well so it came

446
00:24:22,524 --> 00:24:26,273
[rob_beardsley]: to us and this is the worst
thing that you want to do is you

447
00:24:26,353 --> 00:24:30,534
[rob_beardsley]: don't want to get caught off guard
and be in a rush while you're already

448
00:24:30,634 --> 00:24:34,260
[rob_beardsley]: under contract to put your team together
and find a k p to

449
00:24:34,403 --> 00:24:34,525
[casey_]: yeah

450
00:24:34,701 --> 00:24:36,564
[rob_beardsley]: co sign alone with you so

451
00:24:36,634 --> 00:24:37,363
[casey_]: oh

452
00:24:36,845 --> 00:24:42,222
[rob_beardsley]: that's exactly what we did and you
know it was a pretty bumpy ride but

453
00:24:42,883 --> 00:24:47,487
[rob_beardsley]: when you have necessity right you just
make it happen so unfortunately

454
00:24:47,083 --> 00:24:47,144
[casey_]: ye

455
00:24:47,527 --> 00:24:51,776
[rob_beardsley]: we did make it happen and then
we got better along the way got new

456
00:24:51,936 --> 00:24:57,532
[rob_beardsley]: and improved relationships along the way and
then before you know it got enough experience

457
00:24:57,652 --> 00:25:03,843
[rob_beardsley]: to where we're able to for the
most part sign our own loans without k

458
00:25:04,024 --> 00:25:04,305
[rob_beardsley]: p's

459
00:25:04,863 --> 00:25:09,270
[casey_]: sure yeah and that's obviously the goal
for i think just about everybody is to

460
00:25:09,310 --> 00:25:10,292
[casey_]: get to be that balance

461
00:25:10,071 --> 00:25:10,830
[rob_beardsley]: yeah

462
00:25:10,352 --> 00:25:14,919
[casey_]: sheet person kind of takes a whole
life like it looks to me or sounds

463
00:25:14,959 --> 00:25:20,380
[casey_]: to me like you all are being
very official and very poignant about removing elements

464
00:25:21,173 --> 00:25:23,637
[casey_]: require other people or other

465
00:25:24,033 --> 00:25:25,080
[rob_beardsley]: yeah

466
00:25:24,639 --> 00:25:31,049
[casey_]: businesses because the more influence those outside
things have on your business the harder it

467
00:25:31,109 --> 00:25:34,707
[casey_]: is for you to have the element
of control across the whole thing

468
00:25:36,160 --> 00:25:41,365
[rob_beardsley]: right yeah i think bring in house
is really important and it's interesting going back

469
00:25:41,425 --> 00:25:44,808
[rob_beardsley]: to the conversation we are having earlier
where you're saying how some investors may not

470
00:25:44,868 --> 00:25:53,000
[rob_beardsley]: understand it and the more sophisticated investors
you know institutional investors they really look to

471
00:25:53,098 --> 00:25:53,118
[casey_]: i

472
00:25:53,480 --> 00:25:59,241
[rob_beardsley]: sponsors having their own in house operations
because they see that as a higher perceived

473
00:25:59,301 --> 00:26:03,308
[rob_beardsley]: value they feel like they're partning with
someone who's more hands on going to be

474
00:26:03,368 --> 00:26:08,957
[rob_beardsley]: more transparent have more control over the
operations so a lot of family offices and

475
00:26:09,037 --> 00:26:14,048
[rob_beardsley]: private equity firms they are real looking
for a partner like us that's vertically integrated

476
00:26:14,783 --> 00:26:19,470
[casey_]: yeah yeah and then and you know
and i didn't there's that's another really good

477
00:26:19,551 --> 00:26:26,282
[casey_]: point the family offices which when i
talk about family offices i'm talking about like

478
00:26:26,582 --> 00:26:33,682
[casey_]: big trust fund people who are overseeing
maybe one person or one family's money and

479
00:26:33,742 --> 00:26:40,168
[casey_]: they're like there there there there distribute
it amongst vetted deals and so

480
00:26:40,179 --> 00:26:40,199
[rob_beardsley]: a

481
00:26:40,288 --> 00:26:44,194
[casey_]: on and so forth so when i
started talking about that but those people want

482
00:26:44,395 --> 00:26:49,605
[casey_]: vertical integration like like that is i
didn't realize that that was a re quirement

483
00:26:49,746 --> 00:26:54,349
[casey_]: really of most family offices that you
be vertically integrated

484
00:26:56,141 --> 00:26:56,542
[rob_beardsley]: exactly

485
00:26:56,243 --> 00:26:56,445
[casey_]: because

486
00:26:56,703 --> 00:27:00,816
[rob_beardsley]: and we learned that early on and
we set out as a goal to make

487
00:27:00,856 --> 00:27:01,177
[rob_beardsley]: it happen

488
00:27:02,303 --> 00:27:06,651
[casey_]: yeah and and and i guess it
all again it all comes down to because

489
00:27:07,603 --> 00:27:11,166
[casey_]: you know how many times have you
seen or heard some and

490
00:27:11,160 --> 00:27:11,240
[rob_beardsley]: so

491
00:27:11,206 --> 00:27:15,569
[casey_]: so s workin the cash register and
well they slip behind our bucks here there

492
00:27:15,749 --> 00:27:19,873
[casey_]: whatever it of course a hunter bucks
and some of these deals isn't isn't an

493
00:27:19,953 --> 00:27:24,020
[casey_]: enormous amount of money but if it
happens several thousand times obviously then it becomes

494
00:27:24,080 --> 00:27:28,106
[casey_]: a problem but what i'm getting at
is is they want control of it from

495
00:27:28,167 --> 00:27:32,193
[casey_]: the second that money leaves the tenants
hands it's in control the same

496
00:27:32,205 --> 00:27:32,288
[rob_beardsley]: ah

497
00:27:32,273 --> 00:27:37,162
[casey_]: place or really until it lands in
their bank account it's all streamline they know

498
00:27:37,242 --> 00:27:42,110
[casey_]: it's efficient then i'm sure there's reporting
rules or you know they're like hey we

499
00:27:42,190 --> 00:27:44,914
[casey_]: want to see reports on this this
this to see how

500
00:27:44,912 --> 00:27:44,932
[rob_beardsley]: i

501
00:27:44,975 --> 00:27:48,881
[casey_]: things are going and they can really
control it from from a to b or

502
00:27:48,961 --> 00:27:53,769
[casey_]: a to z really so well listen
rob i want to thank you for taking

503
00:27:53,809 --> 00:27:56,774
[casey_]: the time to be with us today
and we ask a couple of

504
00:27:56,781 --> 00:27:56,881
[rob_beardsley]: oh

505
00:27:56,834 --> 00:28:00,960
[casey_]: questions of everybody that comes on the
guest everybody that comes on as a guest

506
00:28:01,201 --> 00:28:03,214
[casey_]: on the show and

507
00:28:03,120 --> 00:28:03,360
[rob_beardsley]: yeah

508
00:28:03,495 --> 00:28:07,467
[casey_]: the first of those questions is what
is the best book that you've recently read

509
00:28:07,688 --> 00:28:08,691
[casey_]: or are currently reading

510
00:28:13,521 --> 00:28:23,383
[rob_beardsley]: the best book that i've recently read
i recently read high output management by andrew

511
00:28:23,423 --> 00:28:24,345
[rob_beardsley]: grove the x

512
00:28:24,736 --> 00:28:24,899
[casey_]: wow

513
00:28:25,907 --> 00:28:30,655
[rob_beardsley]: into co of intil that's probably one
of the best management books i've read and

514
00:28:30,735 --> 00:28:34,682
[rob_beardsley]: i really like management books i'm trying
to learn more about growing a business and

515
00:28:34,782 --> 00:28:40,452
[rob_beardsley]: stuff like that so that book is
very quick and easy to read but it's

516
00:28:40,512 --> 00:28:45,039
[rob_beardsley]: really profound and fairly actionable so i'm
actually due to i need to reread that

517
00:28:45,261 --> 00:28:45,443
[rob_beardsley]: yes

518
00:28:45,943 --> 00:28:46,103
[casey_]: sure

519
00:28:46,210 --> 00:28:46,860
[rob_beardsley]: sure

520
00:28:46,864 --> 00:28:47,906
[casey_]: yeah well that's great

521
00:28:47,711 --> 00:28:47,732
[rob_beardsley]: a

522
00:28:47,966 --> 00:28:51,792
[casey_]: yeah especially a lot of the systems
and stuff that you all have management is

523
00:28:52,173 --> 00:28:56,941
[casey_]: is is a pretty damn important part
of everything you got going on so awesome

524
00:28:57,081 --> 00:29:02,339
[casey_]: but what is the what is a
dream vacation that you have either taken or

525
00:29:02,379 --> 00:29:02,921
[casey_]: hoped to take

526
00:29:03,047 --> 00:29:03,067
[rob_beardsley]: i

527
00:29:06,461 --> 00:29:09,626
[rob_beardsley]: well for a long time i've wanted
to go to ball but it's just so

528
00:29:09,767 --> 00:29:10,788
[rob_beardsley]: far and

529
00:29:11,412 --> 00:29:11,574
[casey_]: yep

530
00:29:11,489 --> 00:29:15,476
[rob_beardsley]: it's almost not worth it to go
that far so we'll see i'll probably make

531
00:29:15,496 --> 00:29:18,563
[rob_beardsley]: it out there but if i would
do then i have to go for a

532
00:29:18,603 --> 00:29:20,770
[rob_beardsley]: month because you can't spend a full

533
00:29:20,623 --> 00:29:20,786
[casey_]: yep

534
00:29:20,850 --> 00:29:22,917
[rob_beardsley]: day on a plane and not be
there for a while

535
00:29:23,533 --> 00:29:23,774
[casey_]: well and

536
00:29:23,820 --> 00:29:23,941
[rob_beardsley]: oh

537
00:29:23,834 --> 00:29:25,340
[casey_]: if you're going i've always

538
00:29:25,281 --> 00:29:25,383
[rob_beardsley]: what

539
00:29:25,400 --> 00:29:32,098
[casey_]: said going west it's like it's like
petting a dog the opposite way i mean

540
00:29:32,178 --> 00:29:35,924
[casey_]: it's just there's nothing easy about it
even if you go from where we are

541
00:29:36,005 --> 00:29:39,691
[casey_]: in kentucky or where you are to
vegas i mean things just it's just like

542
00:29:39,751 --> 00:29:43,450
[casey_]: a whole different world oh but that's

543
00:29:43,833 --> 00:29:43,998
[rob_beardsley]: yes

544
00:29:43,892 --> 00:29:44,858
[casey_]: you're exactly right

545
00:29:48,393 --> 00:29:49,354
[casey_]: are you there i'm

546
00:29:49,351 --> 00:29:49,493
[rob_beardsley]: yeah

547
00:29:49,435 --> 00:29:53,101
[casey_]: sorry look like it froze up there
for a second so all right well listen

548
00:29:53,983 --> 00:29:56,948
[casey_]: if somebody heard something that resonated with
him or they want to reach out and

549
00:29:56,968 --> 00:30:01,213
[casey_]: get in touch with you what is
the best way for that to happen yeah

550
00:30:00,601 --> 00:30:03,449
[rob_beardsley]: the best way to reach out is
to go to our website l s c

551
00:30:03,930 --> 00:30:08,691
[rob_beardsley]: r e dot com on our website
we've got tons of resources from a free

552
00:30:08,892 --> 00:30:15,141
[rob_beardsley]: pass investor guide to our underwriting model
down load as well as you know ways

553
00:30:15,201 --> 00:30:18,052
[rob_beardsley]: to get in touch with us to
learn more about investing with us or just

554
00:30:18,152 --> 00:30:19,377
[rob_beardsley]: you know get in touch to learn
more

555
00:30:20,283 --> 00:30:24,971
[casey_]: awesome rob thanks again for taking the
time to be with us and listeners as

556
00:30:25,291 --> 00:30:30,880
[casey_]: always please head down and leave us
a review leave us a five star review

557
00:30:31,281 --> 00:30:35,248
[casey_]: and that way their listeners can see
and know what we talk about here on

558
00:30:35,288 --> 00:30:40,216
[casey_]: the cash flow pro and while you're
there please hit the subscribe button so that

559
00:30:40,276 --> 00:30:45,184
[casey_]: you can be notified as we release
new content and new episode you don't want

560
00:30:45,224 --> 00:30:49,311
[casey_]: to miss what we have coming up
i can assure you you will learn something

561
00:30:49,632 --> 00:30:54,119
[casey_]: and again rob thank you so much
for your time today and listeners thank you

562
00:30:54,199 --> 00:30:56,653
[casey_]: for your time i hope everybody has
a wonderful rest of the day