YOUR DAILY REAL ESTATE INVESTMENT SHOW
June 1, 2022

Discovering Syndication with Julie Holly

In the 48th episode of Cash Flow Pro, we talk with Julie Holly, Founder of Three Keys Investments. Julie is the third generation of her family to go into real estate, but that was not always the case. After graduating from college, she decided to...


In the 48th episode of Cash Flow Pro, we talk with Julie Holly, Founder of Three Keys Investments. Julie is the third generation of her family to go into real estate, but that was not always the case. After graduating from college, she decided to become a teacher. She figured that having a government paycheck would guarantee stability in her life, and she could grow her portfolio on the side. This was not the case. She yearned for financial freedom. She turned to her roots in real estate and discovered the somewhat hidden advantages of syndication.

 

Today, Julie’s company, Three Keys Investments, focuses on multifamily investing. Their goal is to help investors protect, preserve, and grow their wealth. Tune in as we go through her journey from single-family into syndication, her first experiences, and what we can learn from them!

 

In this episode, we discuss:

  • The benefits and advantages of syndication
  • What first deals are really like
  • The importance of customer service to investors and tenants
  • The power of “no” and knowing when to backout

 

Find your flow,

Casey Brown

 

Resources mentioned in this podcast:

  1. https://www.threekeysinvestments.com/
  2. https://www.linkedin.com/in/julie-holly/
Transcript

Casey Brown  0:06  
Hey there, and welcome to today's episode of cash flow Pro, your daily real estate investing podcast and YouTube channel. I hope everybody is having a wonderful day out there today. And today I am here with Julie, Holly of three key investments. And Julie and I were talking a little bit before before we hit record. And she was telling me that she is from basically the middle of nowhere. And she referenced the fact that she was north of Boise enough like one audio book, or one long audio book, north of Boise. I had never heard of put like that. But nevertheless, so Julie, how are you today?

Unknown Speaker  0:52  
The sun is out. And I could almost wear short sleeves, I'm happy.

Casey Brown  0:55  
Ah, that's what we're all looking for. We're all looking to get rid of that winter, those winter white legs or whatever. That's what my wife calls it. I don't know what it is. It's my legs are always white. But anyhow, so. So tell us a little bit about yourself, Julie, we want to hear, you know, kind of where you started and then kind of transition into to how you decided to that maybe real estate was the right move for you.

Unknown Speaker  1:21  
Thank you, first of all, Casey, thanks for having me on your show is awesome. I love your show. And I'm gonna say since I love books so much and actually haven't read around. Um, if you haven't read the alchemist, then everybody needs to pick up the alchemist. And have you read it?

Casey Brown  1:37  
I have not, but you are absolutely right. It's on my

Unknown Speaker  1:43  
list. Listen to the book, because it's fantastic. And really, my story is very similar to, you know, the character in that story, which is that I really believe we were all created and hardwire with like this inner purpose and contribution to the world. And that challenges along the way. Like how do you really want it and a lot of people most people end up just kind of settling. And they just say, you know, I was a classroom teacher. I'm contributing to the world, I'm good person, I'm helping little children learn how to read I you know, like, check all the boxes, I should have a fulfilled life. But really, there was more that I wanted in life. And if we're willing to listen to that call of desire, and like, No, I think there's something more I have to contribute. But it took me a long time to figure out that that led how that led to real estate syndication. And that's where I referenced the alchemist because, you know, really, we have to be willing to say life is a journey, not a sprint, it's a marathon. And we're it's okay to iterate along the way. And that's what I did. So I was raised. I was raised in residential real estate. So you're, you know, you've had your past in residential sales and everything. That's how I was raised, raised the bread and butter. And I bought my first house and my very, like a 23 years old and it was sweat equity and everything. And I thought that I would just have this little, no graduated college 22 started teaching, bought my first house and I just thought, you know, just going to have this little rental portfolio type thing with single family houses. And next thing you know, I end up in real estate sales, because what happened, there's a real reason. Your job has a limitation. And I thought that I was in a little comfort of being an a government employee. I thought I could just be in the safety zone and like hey, nothing bad happens if we're if we're employed by the government government's not going away overnight.

Casey Brown  3:50  
Bankruptcy I guess

Unknown Speaker  3:53  
I'm gonna be in kids have to have a place to learn. I'm pretty sure I have job security. And I can just do this. I can retire teacher pension, all of that or you know, retirement. Great, right? Yeah, a year three, they started handing out pink slips. What I thought and that wasn't like a safety zone. So I'm in my mid 20s At this point, right? Like, wow, so I am expendable. And I think a lot of people listening like, you have to realize, I don't care who you are. You're expendable.

Casey Brown  4:26  
That's exactly right. You're gonna

Unknown Speaker  4:29  
say oh, yeah, you're no longer needed. Take your box out by you know, you can. It won't be as bad as Enron necessarily, but I fortunately did not receive the pink slip. I had just enough seniority. But it was enough to like light that like candle that hey, what's my contract law? There's something more in life. I do. And so I went into real estate sales, back into education, had had kids stayed at home, went back into it, but in those periods we were family just Like doing full remodels and then renting out things like that. So so how

Casey Brown  5:05  
you were how you were doing a buy and hold buying? Hold

Unknown Speaker  5:08  
on, hold on, hold on, you know? Did some How

Casey Brown  5:11  
did you ever sell any of them? Did you ever sell any of them?

Unknown Speaker  5:15  
Yeah, now I have, like, I'll never go back. Like I literally, Casey, I have looked at single

Casey Brown  5:24  
objective at all. The objective at all was

Unknown Speaker  5:28  
the objective was we didn't know any better. Even though I'd been raised in residential real estate, even though I knew commercial brokers, nobody exposed me to syndication or the benefits or advantages of in part of investing in commercial real estate at all. And I say it like that. Because the longer you explore, say, apartments and self storage at the East start to realize there are a lot of asset classes that are so advantaged that, for me, it started with multifamily. And now you know, I know in time, I'll expand and add to that portfolio, but I'm highly focused on multifamily. So that's how I ended up I was driving to the gym and I realized as I was listening to bigger pockets, money, calm comes and shares about syndication. She was the first woman I heard on bigger pockets. The first person that I ever heard the word syndication, and her journey was very similar. I'm like, Oh, my gosh, I could relate. And I realized it was like I say, I have a spirit testimony, like testimony and and my real estate testimony. And this is like one of those like, clouds parted, like, oh, my gosh, this is what I'm supposed to do. Everything that I had done in my career path, in the past, all came together. It's like I want to contribute. I want to help people. I want to, you know, I want to educate people, everything comes together in this really beautiful way through the syndication model. And now I help people from the top down, I don't help kids, it's great to help kids. But if I help their parents, now I'm helping.

Casey Brown  7:12  
You're indirectly helping them.

Unknown Speaker  7:15  
Yeah, I'm helping. Correct right now. And the trickle down effect.

Casey Brown  7:20  
That's right. That's right. And you know, and so many people's story, I guess, is similar to, it's like, all the sudden, the numbers the same with myself was just all of a sudden, one day like this light bulb, cartoon light bulb went off. And I was like, wait a minute, I can put all this stuff together. Because, as I've said many times on the show, you know, the real estate sales business to much the same as your single family fix and flip or fixing, fixing, flip to rent or whatever, buy and hold whatever the scalability of that is only, you can only go so high. And once that light bulb came on. And I was like, whoa, wait a minute, because one thing that I had always heard, and of course, you see all of the big wills on TV, and wherever and all that kind of stuff. Let's say there's more billionaires made or more millionaires probably are millionaires or billionaires, but made through the real estate business than basically any other industry. Because because the overall value of real estate is always there. It's always worth something. And they, and they own a bunch of it. And I kept thinking, you know, I would like I'd have a closing and then I'd cash it 2030 $40,000 commission check. And don't get me wrong. I don't want to I don't I'm not, I'm not, I'm blessed enough to know that that was a very good, those were very good days, and the Commission checks were wonderful. But even when cashing a $40,000 commission check, and I even had up to $100,000 commission check. And when cashing those, it still felt like Okay, so I'm going to cash this, then I'm going to go pay all these bills, that whatever I've got going on here, and I'm going to invest a little buy rental house or whatever. And it just always felt like there's there's a ceiling and it's always just kind of like right here. It might be going up. But it's always, you know, then when I hit the syndication world, like what you're talking about, where it's just like, aha, that's how they do it. They structure it. They use other capitals. Same way. Same way, a lot of the Fortune 500 companies that we know of what we're built through the same techniques, right? Where it is. Oh, sorry. No, go ahead.

Unknown Speaker  9:40  
As I say, you know, to your point, it's like, not only is like I mean, we have we're invested we have a broker, my husband still in the residential world, there's actually, like, fired him from my company give an indication, we thought it'd be a good idea but he could do that Yeah. And it's like, you're you speak residential and you rock that. And that's great. And you enjoy it. So you just stay there managing broker do do that, okay, you do, you run with it, run with mine, which is really great to know, Know thy strengths and everything. But it's always like, it's it's transactional. That's what it's deals that seem like transaction, either I flipped a house for the house flippers out there, I flipped the house. And now I gotta go on the hunt for another one. Oh, I closed I list that property and it sold or I got these buyers got this and it's done. It's done. And you have to go after more versus when you are in these. And then let's just put in there, as you were talking about paying bills, I'm like, and set aside a chunk for up will Sam right. And so there's a better way, and it's really easy.

Casey Brown  10:55  
And well, you know, in the in true Warren Buffett fashion, it's in I heard this term many, many, many years ago. And it and it took a long time, like when I say long coming years for to resonate with me exactly what he meant by the term, Lumpy income. And although I was always, again, very blessed and very fortunate enough to turn enough commissions to keep things going. But for just to the point of a transactional business, and I actually have used that term many, many, many, many times when explaining it. And it's funny that you that you said it, because it's just like, you know, it's transactional. And everything was wonderful. Until my wife and I decided it was my wife at the time decided it was that we needed to part ways. Okay, so what do I call that I call that a life event? Okay. And transactional businesses are wonderful, until something called Life steps in and says, Ah, I don't think so. And so thinks. Correct, correct. And I say all of that, to come back to the fact that when you're looking at things through the lens of a transactional business, my I, again, I'm all into sayings. And I just seems like 1000 of them come to my mind when we start talking about this stuff. But I had an uncle one time, who said, we're all two weeks from going broke. And that and again, and I'm like, wait, what were all two weeks ago, and when you live in a transactional world, and you live in the self income, the lumpy income, whatever type of word you want to use to describe it. That's, that's where it's at. I mean, that's what it is. It's a transactional, Lumpy, two weeks from going broke business. So I agree, I'm like yourself, I mean, we're just really spot on with one another as far as where we, where we are when we found out now, I don't know now. But I'll tell you. And, you know, for those that haven't listened to the bigger pockets, which is who she referenced, I mean, I really encourage you to check out their stuff, I don't care to it. I'll give another podcast a plug on here. Because they've, they've provided so much value to me and to our community as a whole. That there's no way that anybody couldn't, could say don't go check those guys out. Because everything they do and everything they talk about provides value for what her and actually So alright, so I want to transition here and talk a little bit out of kind of we've moved through personal life what brought you know, had kids W nine, W nine job or re everyday ground power nine to five, whatever you want to call it to. Now we're in the syndication world. And, and I always like to hear kind of first deal stories. And maybe you maybe you mentioned something about the first pillar, but I just want to go in and go back to it or discuss that.

Unknown Speaker  14:02  
Oh, goodness. Well, I think that what is interesting and might be helpful for a lot of newer people that are newer to space, is that you're going to have multiple first deals. Yes. I think that that's really something that people aren't talking about, very candidly. So you might have a first deal that you're trying to put together and it falls apart, you might have that first deal and how your partner did that deal is different. And so So let's see, I have the first deal of I was an LP first. So I think that that was a very important position to go in. First. I'm a firm believer, before you go active. You should be passing. Yeah, that was it. Yes.

Casey Brown  14:55  
It's critical. Yep. 100%

Unknown Speaker  14:59  
Yeah, and a lot of been a lot of I can relate to them. I serve a lot of first time and I nurture a lot of first time investors and I understand all of this feelings of I think I know you think I like you think I trust you, I think you know what you're talking about. I'm pretty sure but I don't really know enough about this Can I really trust you? Like, all of those feelings are things that I can resonate with. Because I've been in that situation, I knew enough to know how to make an investment. But I didn't know enough to know if it was really a great deal.

Casey Brown  15:35  
Until you've been in that position you don't like you don't know who you can't like. I mean, it makes perfect sense. Because now you can step around to the other side of the table. And now you can say, Hey, these are the things you need to watch out for. These are the I know, these are your big objections. And then that that there you go that I mean, objections, marketing, marketing, one on one first words you learn in marketing is objections, and how to solve them. And but yeah, oh, and just to your point of multiple first deals, you know, you could, in my opinion, of course, you could close your first deal, and actually get funding and get your investors and put everything together. And in my opinion, you move geography, you move asset class, you move any other you move operator, you move anything. And there's the you know, that's almost a potential new first deal, because there's a whole lot of all of that stuff now that you have to learn that you learned about this other, whatever it was, now you have to learn all of that, again, about a different area, different asset class, and like that. So it's, it's, you can never stop learning. Am I right?

Unknown Speaker  16:45  
Yeah, you were absolutely right. 1,000,000%. Right. Yeah, so starting, I think starting as a as an LP for me was like, super important, especially knowing that I wanted to serve investors, you know, on as part of the GP team in the long term. So I was looking at my long term goals and looking at, you know, how am I going to pave the path the runway to those to where I want to go. And then from there, I actually, you know, brought in investors to a deal. And it was more like, it's a strategic partnership. And what that means is, hey, you're not on the GP, but you're along for the ride, you're going to nurturing care for them. And a lot of people absolutely cringe at that. And it was the best experience ever, it was a safe experience. Because I always My thing is investors always come first investors even come before my partners, investors are the number one partner that I serve. And I have literally backed out of the deal. That, you know, we haven't accepted loi, we were doing, you know, more due diligence. And it was like, okay, but I have to be partners. I love your teams. But we got I see these red flags, how are we going to protect these people. So in doing that, like basically Serving investors and going on as kind of like an intern, if you will, it's like interns don't really get paid, but they get the experience and, and you know, that your investors are 100,000,000% in the right spot, right positioned? Well, that's how you build your track record. Sometimes it comes not by gaining monetarily, but gaining that experience from people that have gone full cycle multiple times. salutely crushed it, if you can find I mean, to me, that was gold, I have this opportunity to partner with this group. This is gold, I'm running this opportunity. It was gonna add to

Casey Brown  18:48  
that, that you have to, that you're providing value, by not diving headfirst into something that, to be quite honest, could potentially take moving heaven and earth to get out of, if if it were to, to something were to have not been measured correctly, and it's too late once you're in and now you're down. 10,000 now you're down 100,000 Now you're down a million, whatever it is. And so, you know, that's where the value comes in. And that's where that experience and if you were watching your GPS as an LP investor hat, you know, speak for the silent speak give the personal voice that has no voice or or that technically, you know, theoretically his voice but no, it makes perfect sense. I mean, you're just you're spot on with a lot of this stuff.

Unknown Speaker  19:40  
And what it comes down to is, life isn't about dollars and cents. Like if you're measuring your success and your contribution to the world by money alone, you're you have a limitation in your life. But when you say my goal is to serve and support these people every day Bing will come back tenfold. It takes longer, but you gain the experience you gain the tech or do you gain the credibility by being such a TEDx service to your, your clients that you're, you're it's just going to spread like wildfire. And then, you know, now it's led to, even that, even though it was a strategic partnership, that was law of the first deal material that led to two deals, and we're hopefully going, you know, hopefully going under contracts on a third and potentially a fourth. So it's like, how you get your first deal might not look the way you want, and maybe you're not getting this, like monetary compensation. So you got to decide, and that's what I had to decide for myself, I jumped at the opportunity, because it's like, no, we both know, you know, at a certain age, you know, if you can learn from the right people, then now you have habits in place, and you have a thinking and a philosophy that is grounded, not just in what you think might be good, but grounded, practical experience that is going to last

Casey Brown  21:13  
you Yeah, and that's what and that's what you're really, because honestly, when an investor invests with you, they're for all intents and purposes hiring you. And that's what they're hiring for, is so that you because you, you know, you don't want to just be a good marketer, you want to be good marketer to attract a good investor, but you also want to be a good marketer, in order to showcase your skills, not pretend you have skills that you don't. And so yeah, I mean, it's, it's, and there's a lot of people out there that do and I think when we start looking at all of our all of our big syndicators, the people that have that were in 2014 2015 2016 are real sa early early on, and they've they've built these, these big portfolios. You know, that's, that's the direction. I think that a lot of this business is going but but everybody kind of uses those as high watermarks, and they always say, and every one of them says that once you get your first deal done, everything else is cake, you know, not cake, but I mean, everything else, the second dough falls together, the third deal falls together, the 100 still falls together and everything keeps coming in. So

Unknown Speaker  22:20  
it can be a little, what's it can beat you up to. And that I mean, like being able to learn in the safety net for me, just because I do want to do such an excellent job at what I do is like the great little sleep, I like crashed, I crashed, I did not meet my expectations, I did not exceed my expectations. And so is like, in a lot of people will a lot of capital raisers, you know, which I don't really prefer the term capital raise or you know, because it should be farm capital to be really taking care of your investors. And so, but, I mean, most people, and I was one of them, and I have man, I mean, I have a podcast, I have a following that, you know, it's small, but I mean, like, it's, I mean, bringing in, you know, half a million shouldn't be a problem at all, and so many people under estimate, that is actually so much more than that. So that was I got schooled, and I am so grateful for that. And that led to stronger raises in the future.

Casey Brown  23:29  
Yeah, and a lot of people you know, I can't tell you how many how many folks have been on the show with with MBAs. I mean, and and maybe you had we didn't even discuss college D it maybe you have one? I mean, I've got a Ag Econ degree agricultural economics degrees, I mean, what so? So I don't know that I really am supposed to be on the level with these people. But a lot of it when you start looking at at Capital raises and the correlation between the education that people have gotten, there's no education like a real real education. I don't care what book what class it was, what anything you took it the people with MBAs, I guarantee you are not any better off than you. Maybe they might know a little more intricacies about capital stacks or maneuvers or things like that. But at the same time, I feel like if we come into business, we do what we say we're going to do. We show people what we say we're going to show them and we know when to say no, then then you know the rest everything else will fall together. You know?

Unknown Speaker  24:33  
No, no was a word I use a lot before. Before getting into

Casey Brown  24:40  
my first partner if you

Unknown Speaker  24:42  
how many kids you have. I have two kids I use know a lot.

Casey Brown  24:46  
That's yeah, I've got five and I guarantee you that that no, it's no no, no, no, no. Well, why not? And then I gotta say, because I said no. So it's like, I'm sorry. Oh, no, no, I

Unknown Speaker  24:57  
get it. You gotta watch the movie yesterday, though. uh but you know, it's like being able to know, what are your values? Who do you want to align LIS, you know, what are you bringing to the table? Because there's so many people that will just rush into a partnership just because, Oh, it feels good. And it seems these partnerships are critical and who you are partnered with. And so I like so many people, I think that the multifamily space and commercial real estate has some of the like, it's a concentration of the nicest, kindest, most well intentioned people. But those are not all the best partners. For me, I can like them. And I can, I can recognize that this partnership isn't going to be in alignment that is going to serve my silent asylum partners.

Casey Brown  25:47  
How difficult? How difficult, is it? And I don't know if you've had this happen, and I know I have, but how difficult is it to be like, five or $10,000 Cash dollars into due diligence and have to pull the plug and say

Unknown Speaker  26:06  
it was? I mean, it was yeah, it's difficult. But you know, what? Oh, gosh, that's like so real. But it's, it is difficult. But really, this is what I have. I have Casey that was called the sleep at night test. And, you know, what, five or $10,000? And I said that most people listening know that. It's not, I mean, that's vacation, like, I don't want to lose vacation, right? However, I would way rather lose my own money. And walking away from one deal and losing, you know, money was like

Casey Brown  26:46  
$10,000 is $200 from 50. Investors. I guarantee you that, if they were to step into a deal, and they lost 1000 $10,000 A piece into a deal, because you said you didn't know to say no. Because of $200 per investor, and you lost more than that. I mean, it's just I don't know, it's all a math thing and risk, the reward? And how do you how do you you know, you have to know what's a palatable? Risk, I guess, if you will, especially when it's not necessarily yours, or mine, or our money, or whatever it is. So no, yeah, you have to do that. And hey, and let's be honest, you have to be able to say no to some investors. I mean, I don't, the thing is that I had a guy one time tell me, he said, Hey, if you have to drag them in, you have to drag him around. And the thing is, is that I don't you can't operate efficiently while you're while you're wiping somebody's nose, because they want to know why the the lawncare people didn't empty that, you know, I'm just what I just little, I'm just talking about, like micromanagement kind of stuff. And, and so you have to know, and you have to be able to see those signs, because, again, you're fixing to get into a relationship that could take moving heaven and earth to get out of and correct. It's much like a marriage. I mean, it's, you know, it's easy to get into and very difficult to get out of if you find that, that maybe this is a troublesome partnership, or a troublesome deal that you've made or something like that. So, nevertheless, but so I want to we're pushing up against our time here. But so I've got a couple of last questions. Obviously without we've already mentioned the alchemist but without mentioning the alchemist, and I've, I've started a precursor in this comment this this question with without saying, Rich Dad, Poor Dad, what is the best book that you've recently read?

Unknown Speaker  28:56  
Okay, prefacing my answer with I run a book club.

Casey Brown  29:02  
Ah, awesome. Well, with

Unknown Speaker  29:05  
that said, the best book I ever have read is that whatever book that I either just finished or we're just starting, because what happens as you read is that if you're reading quality books you are as a human, and if you continue to read, every single book is going to transform and shape you just a little bit more. And so every book you've read really should be the very best book that you've ever read. Yes, that first book he read way back when will probably be the one that you could recognize as Oh, that was a Genesis moment. But all of those books that you continually read are going to be sandpaper. So reading is absolutely critical. Everyone needs to be doing it. Do you have a book list available? So right now, we are reading who not have.

Casey Brown  29:55  
Oh my god. I am too. I am too sound

Unknown Speaker  30:00  
If it's and I already concept and everyone listening is probably like, yeah, that makes sense. Yeah, check and I kind of

Casey Brown  30:11  
make sense. Why weren't you doing it before

Unknown Speaker  30:14  
that book takes it. So it's like open heart surgery, and it makes it practical and it will open it just opened my mind to a whole new level so much so that when we get off done recording, I am actually hired a very solid VA team and I'm meeting with them and bringing more who's into my life.

Casey Brown  30:38  
Well, that's wonderful. And that's a good way to do it and way to put way to put the practice you know, right up front and get going with it. So all right, next question. How what is what is I've tried to find a way to phrase this but what is a dream vacation you have either taken or would like to take?

Unknown Speaker  30:58  
I absolutely love traveling. It depends. If it's in the summertime, it's going somewhere where I can just mountain bike with my family and tear down right berms? Some million percent that would be summer but winter in North Idaho is winter in North Idaho. It's cold, it's snowing. So I We love going down to Mexico. So I'm just put me in the Caribbean put me on a beach put me at some place where I can just chill and the kids are happy and nobody's doing chores. And we're getting sunshine. Vitamin D baby.

Casey Brown  31:32  
Yep, there you go. That's wonderful. So last question is so if if a listener has heard something that maybe maybe they they're interested in your book club or or whatever the whatever the case is, and I encourage listeners always to reach out to our guests. If the listener heard something that they connected with and would like to chat with you maybe a little more about what is a good way for them to reach out to you.

Unknown Speaker  31:55  
Yeah, head over to three keys investments.com and schedule a time to talk. Like, let's hop on a call and talk I'm very accessible, especially on social media.

Casey Brown  32:06  
Awesome. Now I will as my listeners are very well aware. I'm always keen on making sure that we get this right but that's thr e not the number www.th REK ie why plural. That's S keys. investments.com. So, so thank you. Yeah, jare plural s for keys, plural s for investments and.com. And Julie, I can't thank you enough for carving just a little bit of your time out to be with us and get and bring our listeners some value and and I want to thank you for that.

Unknown Speaker  32:42  
Ya know, it's been great. Love the conversation, Casey?

Casey Brown  32:45  
Yes, ma'am. Well, good. Well, listen, I want to thank everybody for listening to cashflow pro today and I hope everybody has a wonderful rest of the day.

Transcribed by https://otter.ai

Julie Holly Profile Photo

Julie Holly

Three Keys Investments