Old Capital Real Estate Investing Podcast With Michael Becker & Paul Peebles

Raj was a civil engineer for the City of Dallas for 17 years. His wife, Raje is a dentist. After losing a huge amount of retirement money in the stock market crash about 9 years ago, they went searching for another way to invest. They wanted something that they could control. They looked at many options… but were drawn to real estate. Before they invested a dime into real estate, they invested in high quality apartment education and mentoring. They wanted to learn the process of real estate and make sure they would not make critical and costly mistakes. Having a mentor reduces the time of ramp up. Raj and Raje began buying value added apartment properties and then leverage them into several apartment complexes with over 600 units. Today, he is a former engineer with the City of Dallas and a full time apartment investor.  Raj’s contact info: rajguntnur@icloud.com  To receive our FREE 15 page WHITE PAPER REPORT on the 2017 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Ol

Top of the market (A+ institutional construction) is getting a little frothy in the urban core and suburban markets throughout the nation. Spread between the A property and C property is flatting on the cap rates. Coming out of the 2008 recession the A’s recovered first and then the B’s and C’s followed. The cap rates between the different property types have compressed tremendously. Mike gives his insight on why his group is focusing on the “top of the work force housing” space.

Recently Michael Becker was a guest on the Jacob Ayers Real Estate Podcast. Michael talks about his journey from being a commercial real estate banker to being “THE GUY” buying and operating apartments.  Michael discusses what made him successful in winning the purchase sale contract when he first started in this competitive market. If you don’t have a qualified mentor, get one! If you don’t have a team of professionals to vouch for you (attorney, banker, management company, etc), get some! Your first deal will be the hardest….so leverage your team to help you succeed.  Listen to jacobayers.com  To receive our FREE 15 page WHITE PAPER REPORT on the 2017 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Old Capital Speaker Series please visit us at OldCapitalPodcast.com Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn about Michael's Real Estate Syndication business with SPI Advisory LLC.

What is it and does every lender have that? Banks do not, Fannie and Freddie do! Freddie's is called Multifamily Green Advantage. Fannie's is called the Green Rewards Program. BOTTOM LINE: Older properties need to be more energy efficient; the agencies are incentivizing owners to change current usage by landlords and tenants of electric and/or water by 20%... if you are successful, your new loan may have a lower interest rate up to 33 basis points. Wow!!

My father would always say to me…Paul, there is a right way and the wrong way of doing things. Unfortunately, sometimes I would do the wrong thing and I would have to learn from my mistakes…the hard way. In this podcast, as you know…we try to discuss the right way and the wrong way of investing in and operating apartments…so you don’t have to learn the hard way. We all have some degree of COMMON KNOWLEDGE…meaning we all know something on that topic. That something may be right or it could be wrong; BUT without having years of experience you have to listen to someone that has really done it…someone that has made those mistakes. Today, we don’t want to have COMMON KNOWLEDGE…we want SPECIFIC KNOWLEDGE. Doing it the right way...in apartment ownership and management with BEST PRACTICES. In the podcast today we have the TEACHER of doing it the right way… Susan Weston. With over 40 years of apartment experience in operations, human resources, and learning and development, she has pretty much seen it all.  Profession

Net Operating Income is the key metric in the multifamily world for investing and financing. The two main components are operating income and operating expenses. Mike breaks down some line items on the operating statements and tells you what you need to look for.

Paul Grimme is originally from Nebraska. After 28 years in the hi-tech industry he retired in 2016. Paul explains what lead him to investing and buying apartments. Paul had not gone the typical route of investing in single family homes but he did passively invested in five multifamily partnership opportunities with over 1000 doors. On his first large real estate transaction, Paul bought a fractured condo. Paul and his wife, Julie, bought 76 out of 108 units in the Village Condominiums in Waco, Texas. He bought 70% of the total. One seller was selling a block of units that they owned. The remaining 32 units were owned by individuals and were not available for sale. A fractured condo can be an unusual investment. Unlike apartments, where you buy ALL the units at one time; a fractured condo acquisition is when you are buying a specific number of units in a condominium complex. Investing in a fractured condo comes with some unique challenges like “who controls the management of the homeowners association and wher

Typically on a capital raise you want to have a pre-existing relationship with your potential investor. The number one question that you must answer for the investor is A) How are they going to get their money back; B) What is the timeline going to be. Also, make sure that your debt lines up with a similar maturity as your investment strategy. Originating a new short term loan on a long term investment strategy is probably not going to work. Make sure that you contact a qualified attorney that can help you build a Private Placement Memorandum that discloses all potential risks an investor needs to know.

Mike Spotts just closed on a stabilized 94 unit apartment building. Mike grew up in Plano and attended Texas State University. He was in the high technology business and wanted to transition into real estate. Mike started buying duplexes and single family homes. Mike was equity rich with a 13 homes, but was liquidity poor. He decided to sell his homes and raise liquidity to buy apartments.  Mike is a big fan of multifamily education and mentoring. That was his first investment. He invested in himself with apartment education. Mike had passively invested in 3 separate apartment partnerships before he felt ready to ‘lead’ his own transaction. His first transaction is a property called Agave Villas Apartments in Irving, Texas. Mike liked the submarket and condition of the asset. The property is near a high school. During due diligence, Mike and his team found a huge water leak. Hundreds of gallons were flowing down the drain every day. When fixed, that one line expense item saved them thousands. Additionally, Mi

Michael uses his DUE DILIGENCE checklist to help him request documents from the seller. Everything is written out and are standard items for the seller to deliver. Make sure that you get a copy of this ‘wish-list’ at the OldCapitalPodcast.com website.

Kenny purchased his first out-of-state property in 2014. Kenny initially started buying apartments in Texas and then he bought in Colorado, Oklahoma and Ohio. Kenny’s philosophy is have “real estate and will travel.” He likes to buy in landlord friendly states that contain diverse economic drivers for growth, low unemployment, and historical population growth. Kenny explains the challenges of living in Dallas, but owning apartments in different states. He actually visits his properties out of state more frequently than the ones he owns in his immediate area. Everyone believes that proformas and partnerships work in straight lines, but Kenny believes in being flexible to handle ‘operational curve balls’ as one of his keys to his success.  Kenny chats about his latest acquisition in Waco, Texas. Kenny bought this property because of its location near Baylor University. It was 50% occupied and needed lots of rehab…but its spectacular location made it a great opportunity. The seller could not provide historical f

Michael explains the upside and the downsides of either partnering with a laundry vendor or owning your own machines. Michael also talks about increasing your NOI with other non-rental income line items.

The Old Dawg chats with The Big Dog (Michael Becker)  Bill Manassero with the Old Dawg REI Network Podcast explores why Michael Becker has a track record unlike few others.  In less than 4 years, Mike has acquired over 4,000 units.  That's right!  4,000 units in less than 4 years!  In this very special podcast, Mike will be sharing some of his insider secrets on how he got there so fast.  In his interview he will be discussing tips for working with brokers (your number one source of great deals), leveraging and how to find the best off-market deals. • How to recruit people into your deal to help you qualify for the good loans • How to build and maintain a strong deal funnel • How Mike went from buying single family foreclosures, rehabbing and renting them out to buying multimillion dollar apartment communities • How to get brokers to listen to you even when you have no prior experience • How to get brokers to call you first when they have great off-market deals • The importance of knowing how to properly un

What kills a transaction right off the bat? Michael only buys in ‘specific’ areas and will not compromise on the asset location or quality. Even though it might be tempting…don’t buy in the ‘hood. Michael’s investing advice is that you must define the submarket that you want to make a position in. Michael describes what the buying environment is like in Dallas today.

Bob DeLong was concerned about his retirement and was looking for a solution. He found that investing in apartments could create passive income. He now invests in apartments in central Texas. He is a managing member and a passive investor in several hundred apartment units. Bob believes that the Austin ‘Class C’ apartment market is incredible or insane. Demand outstrips supply…rents are going up and occupancy is at 98%. Bob has properties in Austin and San Antonio, Texas. Prior to getting into apartments, Bob was in the engineering and construction business for over 35 years. He is a hands-on type of guy. His initial investment strategy was IRA’s and 401k’s until he realized he needed something more. His retirement lifestyle was in jeopardy. He was concerned that drawing out his money from a 401k, and not putting money back in, was frightening. He felt that he needed passive income to retire if he was going to live another 20-30 years.  Bob found an apartment mentoring and education group. Bob was initially

Smaller buildings can typically be more challenging to staff and then push payroll expenses over less units. Owning apartments is a scaleable business. Mike explains some of the rules of thumb on how many units you need to own to hire a manager and maintenance person and some of the solutions that are necessary to make money on your investment.

Friends for over 17 years; Boris, Oshi, Leonid & Albert currently live in Northern California and now own 200 apartment units in Dallas, Texas. How do hardware designers that live over 1700 miles away, find, own and operate apartment buildings? Boris chats with James on how they found their first 55-unit apartment property and how they managed a $300,000 rehab project from a long distance. After the rehab, the partners were able to increase rents by over 30% a unit. They increased NOI dramatically, thus increasing value. They did not syndicate this deal. They only used their own personal funds. The next purchase was a 142 unit- Class C property in Arlington, Texas. They purchased a slight value added property. They had to assume the current Fannie loan and apply for a “second lien” supplemental to get total leverage up to 75%. Wow! That was a tough one. They had only owned their first property for a little over a year…and now they were going to double the size of their portfolio. Fannie had to get comfort

It can be done. Mike explains the additional complexity and underwriting rules for foreign nationals to finance apartments in the US.

Thomas & Timothy Black are brothers and principals at Napali Capital, LLC.   Napali Capital acquires and operates Class B & C apartments. Tim recently retired as the chief operating officer for GREAT WOLF LODGE corporation.  Tom is currently an EMERGENCY ROOM DOCTOR that also helps physicians and other high-income professional overcome career crisis by teaching them how to expand their personal net worth through passive income real estate.  What a combination! These brothers have something going for themselves.   Why should doctors look into investing in commercial real estate?  Tom reflects on the high rate of burn out with critical care professionals.  In the last three years…6 in 10 emergency room doctors are burned out with the excessive amount of hours worked, government intervention, lawsuits, patient satisfaction and declining insurance reimbursement.  Tom acknowledges that physicians have high income, but they have limited personal net worth. Typically, physicians are not financially savvy due

A unique feature with a Fannie Mae loan is the ability to assume the existing loan from the seller and then apply for a new subordinated loan to get max leverage. Mike explains the additional benefits and needed structure of applying for a Fannie Mae assumption & supplemental loan.