Episode 177 of the Diary of an Apartment Investor Podcast with Dan Tokayer and Brady Hoffpauir. Transcript by Otter.ai – please forgive any errors.
Brian Briscoe 0:00
This is Brian brisco, hosts the diary apartment investor, podcast and partner at four oaks capital. So we have something that we've been working on for a really long time we are building and we'll continue to build an educational community that we're calling the tribe of Titans. And it's going to be a community of multifamily investors based around education and his house on the mighty networks. What you're gonna find in there is a lot of events that are exclusive to the tribe of Titans members a tonne of educational content, and you're gonna find great people. So if you're listening to this podcast, because you're looking for community or you're looking for education, go no further the tribe of Titans is something you need to look into for the price of about $1 a day, you're going to be able to have access to everything that we have an elder content that we continue to produce for years to come. And just so there's no pressure and there's no obligation, the first month is free. So sign up first month free, and give it a test drive if you'd like to keep hanging out and you'll continue to have access to Well, me and my partners are four oaks capital in a lot of other experience and aspiring investors. And where can you find it the tribe of Titans dot info. There's a link to that at the bottom of the show notes of every single episode right now. So if you're interested, type in www dot the tribe of Titans dot info or go down to this bottom in the show notes and just tap the link. Well, that said, Brady, we got Danny on the line here. What do you want to ask him?
Brady Hoffpauir 1:23
How are you currently finding deals in the current market,
Dan Tokayer 1:26
I befriend brokers, I befriend bankers. And to the point of I go a little bit above and beyond next thing you know, he's calling me up. He says, oh, some guy came to my office. He's got this deal before it goes to market, blah, blah, blah. That's how we do it. I don't believe in the whole like before market, I'll buy it. I don't want this. Yes, I get it. I get that everybody wants to buy at a market. But if you if you go above and beyond and you just speak to if you buy if you go into a five Plex area, and you speak to a real estate broker and you show them your face, and you just say hey, it puts you on top of the list.
Brian Briscoe 2:10
Welcome to the diary of an apartment investor podcast with your host Brian brisco. In this podcast, we bring some of the top professionals the apartment investment field to discuss various aspects of the apartment investing journey with the sole purpose of educating listeners to make wise investment decisions. The Diary of an apartment investor podcast is sponsored by four oaks capital bringing you high yield returns through apartment complex investing. Welcome to the diamond apartment investor podcast. I'm your host Brian brisco with four oaks capital. I'm very excited for today's show. It's another one of our Ask the Expert episodes, we've got two great people on the line with us. We got dental care, and breeding Hoffpauir. So as we've started doing, we're putting the bio straight into the show notes. So we're not going to read BIOS online. Just go ahead and check out the show notes for the full buyers but full BIOS before buyers. But that said, Danny, welcome to the show. Thank you. Thank you so much for having me. Yeah, no problem. Thanks for thanks for for taking the time to do this. I appreciate. But sure. Why don't you start out by telling us a little bit about yourself.
Dan Tokayer 3:14
So I, I started out in real estate about 20 years ago, I live in New Jersey now with my wife and three kids. I really started at a college literally, I graduated college on June 14 and June 15. I opened up, so to speak, my shop, and back then it was 2000 it was 1999 opening up your own shop means you get a fax machine and you get a telephone line. And like that's literally how you started and you say yeah, I'm open. You know, the thing didn't move for three days. But I was open so to speak. And yeah, I've been enjoying real estate ever since it's been my own shop. It's just been me. And I've been fantastically loving it even the bad days when I cry.
Brian Briscoe 4:01
Yeah, that takes a lot of guts. I think you know, when I was when I was coming out of college and goes I was afraid to start my own thing. You know what, what possessed you to start your own shops right out of college.
Dan Tokayer 4:12
I had a lot of things going for me at the time, all my friends had desk jobs and or getting desk jobs. And I said, I want to give this a year. I have enough money in my savings to sort of last a year. You know, back then I you know live in an apartment It was 300 350 bucks a month. 325 actually a month. So I said you know, I had enough money for a year. And if that doesn't work, I'll get a desk job like everyone else. But I think by that time when people graduate college, college really isn't so much for education, but more to sort of figure yourself out in what you want to do. And I knew that working for somebody else was not going to be a good thing for me in the future. I didn't I didn't I didn't work well not that didn't work well other people but I just I marched had been in my own drum. I mean, everybody's heard this on every podcast, I guess but it's really true. Like I had My own thoughts, I had my own visions, and I wanted to run with it. And I had a lot of friends who were in real estate. I shouldn't say that. I had a lot of my parents, friends who were in real estate. And one of the good things that I had was I was able to knock on their door and say, Hey, can I spend five minutes of your time? I know you're a trillionaire. But I would love to pick your brain. And all of them said shorts, and that really helped me a lot.
Brian Briscoe 5:20
Yeah, nice. Nice. Yeah, sometimes I look back, and I wish I would have, you know, struck out on my own a little earlier. So you know, good on you for for realising that early on. You know, working for somebody else's has sometimes been almost like nails on the chalkboard and a lot of ways for me, but there's obviously challenges both directions you go. So tell us about the firm you started in and what you've done over the last 2020 some odd years with with real estate.
Dan Tokayer 5:45
So in short, I took my savings at the time when I graduated college, this was $20,000. And I depends how far back you want to go. But I'm going to give you the short, short version. As we don't, it's not a nine hour podcast. But I basically fell out of elementary school, fell out of high school and fell out of college really didn't graduate with anything strong. I mean, I got the piece of paper, but that's about it. I knew I wasn't going to be able to work for someone or get anything close to what I want to do. I knew numbers was one of the only thing that I was good at. And I, I took my savings and I and I convinced two people to come in with me on a property in Manhattan. And actually, Manhattan was a lot cheaper in Harlem. And I bought a property. And literally like the day after I bought the property, I kind of like call up my lawyer and say, What do I do now? You know, and a lot of people were able to sort of answer my phone calls. And most of them didn't, even when they said yeah, call me anytime. I was literally crying trying to get answers for not knowing what to do. But the gist is it's all about numbers in a way. So you just need to make your tenants happy. So that way they pay your rent, so that way you can pay your bills and yadda yadda. And during the course of the year, I learned how banks value property. And I learned what to do and what not to do actually a funny story. My first check for my deposit to the lawyer was a Betty Boop check and a clown face. And the lawyer actually called my lawyer and says like, Is this a joke? Are you serious, because like, I didn't have checks, you know, back then, like it wasn't like, it wasn't like what it is. Now when you wire money. And it's big, I just actually wrote them a check. And after I figured out what banks do, how they refinance, how they pull how you pull money out, I was able to refinance after a year to pay off all my investors and go off on my own. Nice, and then just syndicating came easy to me. I mean, it's it's a lot simpler when you have a track record. So once you get one under your belt, it's a lot simpler. That's what I ran.
Brian Briscoe 7:41
Well, yeah. So trial by fire there. I think there's lessons for a lot of people on that one. I think a lot of people fall into this analysis paralysis loop where they're, they're too afraid or running out. Yeah. You just jumped in with both feet took a little action. And one of those cases where you kind of build your parachute after you jump out of the plane, but
Dan Tokayer 8:02
yeah, exactly. Yeah, exactly. It's, it's, it's not common, and it's not smart. But I have such a track record behind me that I can learn ideas in hindsight, say like, Oh, now I know a little bit more about gentrification. Now I know a little bit about how neighbourhoods change now I know, because I bought in a neighbourhood and miraculously it changed. And I'm like, Oh, my God. So I went back to see what are the catalysts? What are the things? What are the perks? What are the what are the steps that you can read, so to speak, before it happens? That's sort of how we did it. And it was a little bit of luck. Mostly luck, probably. Yeah, a little bit of luck. But I mean, a lot of action. I
Brian Briscoe 8:39
think a lot of times action actually creates luck for people. But I mean, got to put action in the right direction. So really tough question for you know, I'm going to try to make it as tough as possible. But if you were to go back to I think 1999, you said, you know, how would you do things differently? Or would you do things differently,
Dan Tokayer 8:58
and I wouldn't The only thing that I would do differently. I spent I literally burned a lot of money in renovations and different things that I fixed in the apartment buildings, the only thing I think I would do differently is I had this foresight of I'm going to own this property, I'm going to make it worth a lot of money, and then I'm going to sell it. You put money into a boiler you put money into a roof, you put money into fixing apartments. And then eight months later, some guy knocks on your door and say, Hey, I'll give you more than what you think it's worth to sell it. And you say fine. In hindsight, I probably shouldn't have put all that money. And yes, it did create value, but a lot of it was wasted. So now I have a better understanding of how long I'm going to hold the property for and where to put money and where not to where to save money. I probably could have bought a building or two, based on the amount of money that I put in, you know, fix this at that. Let me do this high end this high end. Now I have a little better understanding of what to do and what not to do. But I won't I won't. I'm not just you know, throwing money at a building because he says well, you know, it's a great idea. Almost Pick that up and make it look nice. Other than that, everything. I don't have any regrets?
Brian Briscoe 10:05
All right, well, I'm going to chase that rabbit down the hole a little bit, what are the things you have found, that are most important with the renovations? And what are the things that you think could could add weight or that you wouldn't do on a short term hold,
Dan Tokayer 10:19
you have to every building that you buy, you have to look at it not as a building that you own, but as a building that the next buyer is going on. So you do it for them. So the only way to really get an understanding is to look at a building that you're about to buy and see what interests you. So, for instance, you're looking at a building and you say, wow, this is a gorgeous apartment. But you don't know that behind the wall, you have gold and silver pipes. Like, it doesn't matter. As long as the water runs, whether you do X, whether you do y, whether you do z, it doesn't matter, it gets to the nozzle, and it's not going to break. So it's hard for me to say specifically, but the things that a person looks at, for instance, I'm putting two properties up for sale on Monday. And there's a little laundry list that we have of things to do to clean up the property, just so it shows well. Now obviously, like I can redo the pool reglaze put in knew this, but uh knew that. But the bottom line is you just wanted to show well, so that way you sell you you sell the property. So do I want to spend $30,000 to get all new furniture and this and a new pool and re glazing and this and that, or do I want to just sweep it up, make it look picture ready and sort of lipstick on a pig. I don't like cutting corners, because I don't like being the buyer who buys something and realises that, you know, confetti comes out of the building that you think is beautiful, because it's just a hoax. But there's just certain areas behind walls and the certain areas that you just wanted to work, you don't need it to be perfect. So you know, the mahogany, so to speak doors and stuff like that, yeah, they might look great. But the bottom line is, if it's not functional, if it just looks great, the next owner is going to be upset at me that he has something beautiful that he has to fix in a year instead of five years. Right. So just stuff like that. I was a little kid I didn't know. So I kept on saying, well, that's what the contractor said. So obviously, you know, no contractors lines, and they're okay. Oh, yeah. Yeah.
Brian Briscoe 12:13
I mean, I mean, contractors, something I've learned a long time ago is everybody has, you know, their own self interest, you know, contractors will will tell you, you need to do you know, 100 different things, because that's more money for them. I mean, maybe they think you need to do it. And maybe it's a pretty, you know, addition, but, you know, does it translate to rents higher sales price, and I like what you said, you look at the next look at the next buyer, and you know, what's going to be most attractive to the next buyer. Now, do you do for example, leave some meat on the bone, do you you start like renovating the processes? Always. All right. Oh,
Dan Tokayer 12:47
oh, yeah. One of my investors who's said to me, he goes, it's a famous line. Like I like paying taxes, because, you know, you know, you made money, but he also said, there's enough money out there for everyone. Like, if you juice the building to the highest amount, no one's gonna buy it and then like, Where am I gonna go with it? It's a bond a 2% then I hope my grandkids know, there's always there's always on the table. If I can get 11 $100 rent, I'll get 1100 but I'm not the type of person says oh, I can get 1100 Let me get 950. So the next one has juice. But I'm not going to push the tenant to 1125 1150 because I possibly can. I'll say you know the pushing is for the next guy. Right now. I'm comfortable at 11 I bought it at 700 rent now it's 11 I'm happy you know. Yeah.
Brian Briscoe 13:33
Yeah. And I was just looking at it from the lens of the buyer we always are looking for value adds you know, we just bought a property where the previous owner you know, renovated, I think 60 out of 144 units and it's perfect for us because we're probably going to renovate another 40 or 60 and turn itself the next person and leave it leave a little bit of meat on the bone a little bit of value add for the next person in the in the stack so cool that lots of lots of little pearls there. Thank you so well one question for you that that I like to ask everybody what what is your big burning why what's your what's your motivation? to not have a boss
Dan Tokayer 14:11
and to be five good, be home, be home seven days a week with my kids is Niger is what I am now. And that's it? I mean, I just I don't want to work. Yeah. So I do every couple of months or every couple of years I reposition. That's the month or two I'm in the office. The rest I'm just kind of home hanging watching YouTube videos and learning how to cook.
Brian Briscoe 14:36
Nice so so more and more of a lifestyle thing. You know, you don't want to work for anybody. You want to spend time with your kids, which I think is something that a lot of people do. And I'm just starting that I think as of a month ago. I am working from home too and it's it's glorious. It really is. I mean my commute used to take over an hour each way and now it's a walk down the stairs. Fantastic. I love it. Yeah. Well, cool. Is there is there a single project that you want to go into more detail on as far as you know how you acquired it and what you did with it?
Dan Tokayer 15:11
Sure, my due diligence process is different from the average bear. I don't look at cap rates I don't look at or New York, it was gross rent multiple. I don't do that. I think now New York, push the cap rates, I look at two things. I look at underwriting and I look at Delta. Those are the only two things I care about outside of neighbourhood. I mean, there's a lot more to the list. But in terms of due diligence, the property, obviously if the neighbourhoods Okay, if the if the location is great, blah, blah, blah, blah, blah. But I do the underwriting to make sure that my numbers work. But I don't look for cash on cash return, I need a 2%. I need a 10%. I need my investors. I just want a building that I have a large enough Delta. And by delta, I mean, large enough. What's the How do you explain Delta, large gap between the current rents and the potential rent? Okay. So there's a property for instance, versus the example I was going to use as a property in Fort Lauderdale, which was, I don't remember how many units 74 units, I think it was, the previous owner was an Albanian guy who loved his tenants. Like he was there for 15 years, he fixed up every apartment marble kitchen marble bathroom, gorgeous, this gorgeous that. But he never raised the rent, because he was like he said he was like family with them. So essentially, I paid top dollar, I paid 300 1000, I found that afterwards a great 300,000 more than the highest bidder, simply because I said to myself, I don't have to do any work, I literally have to just not be family with these tenants and just say I'm sorry, this is the market, this is what it is. And I captured the Delta. And by capturing the Delta, I was able to sell it in two years. For nine I paid. I paid six, seven, and I sold it for nine one or nine to two years later, simply by just capturing the Delta. Yeah, you have to put in a couple of bucks here to fix the lawn and do this and quote unquote, lipstick on a pig to make it look nice on the outside and fix things up. But 90% of the apartments and marble kitchens and bathrooms, and 95% of the apartments were paying three years before I bought it rent without any rent increases. So to me, it was a no brainer, I actually bought it sight unseen. I was like, Okay, I'll take it, you know, these, I just, I looked at the numbers, and I sent somebody to drive by and look at it. And they're like, Yeah, it's great. I can't believe it's like this, you know, FaceTime me a little bit. And I was like, Alright, great.
Brian Briscoe 17:36
I love that analysis. It's so simple. You know, and it's, it's probably the most important thing when you're underwriting a property is what is that delta. I mean, every time we're looking at properties, I mean, we do look a little more than that. But if there is a high Delta, the numbers are going to work, you know, for just about anybody's investment criteria. If there's a high Delta, you're going to hit the cash and whatever cash on cash you're looking for. But I like it super simple. Just trying to sell
Dan Tokayer 18:03
the name of my company is the name of my company is simplicity capital, because I need I started that company. Because someone came up to me once in a deal in Manhattan, and he said, this is a fantastic deal. The top five floors, you have to condo, the middle, you can Co Op and the bottom you retail and online, you know, you can make it just gonna be the Empire State Building, and I'm happy for you. But if it's not simple in my mind, like it's not for me, someone else, but not for me. And I use that word to remind me that it's got to be a simple understanding otherwise, even if it's too complex, and there's trillions of dollars that you can make in profit. If I don't get it, it's not going anywhere. There's no one driving that car.
Brian Briscoe 18:45
Yeah. And I'll take that one step further. If you're syndicating if you're bringing in investors, simple is better for them as well, because you're gonna have to explain whatever that deal is to your investors, and write even more. So you know, if they don't get it, they're not investing. So a lot, a lot of good points there. So So one question for you. What's next for you guys?
Dan Tokayer 19:08
I'm going to keep on buying. There's never a bad time to buy good real estate. And I believe a little bit in market cycles. And I believe that I was lucky enough to catch the cycle. And I sold my entire portfolio in Oh, 607 before it crashed in New York. And I think I'm going to try to time that right, plus or minus a year or two. I mean, I don't care if I have time and at the exact moment again on the height. I want to time and Ryan on this. And then when the economy goes down, I'm going to jump on everything with cash.
Brian Briscoe 19:39
Now now looking into your crystal ball. How long do you think we still have upside? Or do you think we're at a peak right now?
Dan Tokayer 19:47
No, no, we're not able to peek at all. I think you have until 2526. That's comforting. That's comforting. I've
Brian Briscoe 19:53
looked at you know my crystal ball says we still have a couple years left but you know comforting to hear you with you know 20 something years of experience that successfully sold before the last peak to say the same thing. So there you have it, folks, you know, we got till 2025 he said it, but
Dan Tokayer 20:11
yeah, I think don't quote me on 25. But 2526 Yeah, I think you're gonna see something close. Maybe it might be 27. But I'm, I'm out. I'm going to be well out. 2425. Okay, interesting. Interesting. I
Brian Briscoe 20:24
love that. I love that everybody's got their own crystal ball. I made no predictions on when it's going to crash. But I I do think I'm still bullish on the market. I mean, the prices right now are what a lot of people are kind of scared of what people are looking at prices. Now. They're being Oh, my gosh, you know, how can I possibly buy at this price? I'm still bullish on the market, especially in areas where the demographics show that there's growth and And anyway, that said, growing,
Dan Tokayer 20:52
growing up in a neighbourhood where a lot of people were in real estate, you met a lot of grandfathers who said, I can't believe you're buying at 50 a door at 60 a door, I used to buy it at 30. I used to buy a two door and five a door. And you say to yourself like Yeah, but you're sitting with your hands in your pants, because all you're doing is looking at a building, saying I could have bought a two and now it's at 100. And you could have bought a 30. And then we're turning out to be those people because the economy jumped up so quickly, in the last 24 months that you're like, I bought this place in Jacksonville at 50 a door now it's 90 a door. So as long as as long as the numbers work, and as long as there's enough Delta, then hopefully it'll go to you know, 110 adore. As long as the numbers work. It doesn't matter what you paid for three years ago. You know, you can't look at it that way. Yeah,
Brian Briscoe 21:37
I agree. I agree a lot. Because I mean, if you're just looking at what real estate's done over this, you know, last couple of centuries, it has historically kept on climbing and climbing and climbing little dips here a little dips there. But, you know, 20 years from now, you know, hopefully my our grandkids don't look at us and say, Man, he's saying he's saying that things are too expensive. 500 a door, you know, because right, that's probably what's gonna happen. You know, even if that little old Chief, South Carolina where we buy, you know, my grandkids are gonna be like, 500 a door. That's a good deal. But yeah,
Dan Tokayer 22:10
yeah, right. And you without your teeth. They're gonna be like, I paid 30 I paid 70.
Brian Briscoe 22:15
Exactly, exactly. I'm gonna be like old man. Crazy. But good enough. Hey, so let's shift gears here. We're gonna bring Brady Hoffpauir on. So Brady, welcome to the show, man.
Brady Hoffpauir 22:27
Hey, Brian. Yeah, thanks for having me. I've been looking forward to this. You know, we've known each other for a long time. Yeah, you know, and it's great to finally be here. Yeah,
Brian Briscoe 22:36
it is. It is, it's, it was great to actually meet you face to face, you know that this whole face to face stuff actually works. And for all the listeners, we met in Dallas, but two weeks ago, at a big conference two and a half weeks ago. So after a year of seeing each other across the screen, like we are now you know, like that was great to you know, shake your hand and actually see it face to face. So
Brady Hoffpauir 22:59
yeah, there's so many people that that were like that over the last, you know, year, you make so much connections over the course of a pandemic. And all of those relationships are being built, you know, over zoom or phone calls, or, you know, whatever smoke signals. I don't know, however you want to communicate, and then finally get to meet face to face. And yeah, like you said, it's great. Yeah. Great to be able to do that. Finally,
Brian Briscoe 23:22
yeah, it was fun. It was fun. And I will say and, you know, hopefully I can say this out, you know, you were one person looked exactly like you did in person as you did on screen. There are some people that I meet for the first time that, you know, I'm looking up to him like you're a lot taller than I imagined or you're a lot shorter than I imagined. But anyway, that said, Why don't you tell us a little bit about yourself?
Brady Hoffpauir 23:46
Yeah, sure. Thanks. So, um, yeah, I grew up in Louisiana, started my career in engineering in Orlando, Florida. So right out of college, moved to Orlando started my career there and engineering kind of quickly realised that the the detailed engineering of the analysis was not going to be really for me. So I started looking for more leadership type roles. And eventually those roles lead into more of a project management type of atmosphere. And that's, that's what I do today. been doing that for a long time. And my wife and I now live up here in Charlotte, North Carolina. And while I was down in Orlando, I always knew the power real estate, you know, I ventured out, I was like, Okay, I'm gonna buy my first home, and then we're gonna, we're gonna fix it up. We're gonna roll that money into the next home and eventually we're going to just get a bunch of rental properties. So that's, that was the path that I started on in real estate a long number of years ago, and I did that with the first house, right? It was basically a little bit above a shack is probably the best. You know, and it had cinderblock walls and the inside, you know, no, no sheet rug just painted cinderblock. But we fixed it up made, made about 30 grand from it and rolled it into the next house did the same thing with that one, you know, fixed it up a bit, found some renters along the way, ended up getting married. So we end up staying in that second house. And about that time the market started to really show signs of, you know, wavering, you know, so we got stuck in that house, I say stuck in and I mean, it was a good house. Yeah. But you got to live. Right? Yeah, gotta live somewhere. But that was kind of kind of our introduction into real estate, and honestly didn't do much with it, you know, after the market turn we didn't do a lot with and you know, looking back, I wish that would be different. But, you know, you know what, you know, and then we moved up here to Charlotte, North Carolina. You know, we had two kids by that point. And, you know, it was really not until our kids got out of daycare, you know, daycares, like I tell people, it's like a large vacuum cleaner and your bank account, you know, any dispensable money that is in that account, is just completely syphoned off, it doesn't matter how much it is, it's gonna completely evacuated and go straight over to daycare. So, you know, once the kids got out of that, you know, we started seeing, hey, there's a little more flexibility with funds. Now. Let's start thinking about real estate again. And so yeah, so that's kind of what led me into, you know, since the time that you that we probably met roughly, and then I started looking at single family homes again, you know, and because that's what you do, right? That's what you're told, but
Brian Briscoe 26:27
you know, I mean,
Brady Hoffpauir 26:30
yeah. And I started doing the math on it. I was like, it doesn't make any sense. You know, why on earth? Would I do single family homes? Yeah.
Brian Briscoe 26:40
Brady Hoffpauir 26:41
thinking, well, let's do duplexes. triplexes, and quads. I hadn't bought anything yet, you know, let's just analyse properties. And, and because I wanted multiple streams of income, that seems smart. And I kind of stumbled upon a five Plex, and didn't know anything about commercial properties. I realised, oh, that that's a commercial loan, but I don't know anything about it. So I started doing more research, and we ended up getting close on that deal it fell through, but that was kind of the tipping point for me to get into multifamily. It was it was once once you start understanding the commercial properties, it's like, oh, my goodness, there's so much there's so much more under my control. And it's not based on my neighbour, you know, it's based on that property, you know, how we perform how and what we do and so on. And that was really the tipping point to get into multifamily. And then that was that was the launch, if you will,
Brian Briscoe 27:32
yeah, you know, I think, you know, a lot of people have, you know, who get into multifamily have that same moment. I mean, for me, I started realising that, you know, a five Plex is Buy one get for free sale is how I started looking at it, you know, it's, it takes the same amount of effort to buy a five Plex as it does a single family home. So yeah, the price is a little bit higher. But, you know, for the for all intensive purposes, the way I looked at it is, you know, why? Why buy five single families might come by one, five Plex, and then my mind expanded a little more. And I'm like, Well, why buy a five Plex, you know, when I can buy a 50 or 100, or something like that. So, end of the day, lots lots of good reasons to get into multifamily. But speaking of good reasons to get in, you know, let's let's explore your wife for a second, what's your big burden? Why? Yeah, so,
Brady Hoffpauir 28:23
you know, mine's kind of tied to that, to that storyline I just gave, for me, it comes down to, you know, time family flexibility, and giving back as well. You know, that's, that's what drives me, that's what's important, what triggered that second kind of adventure in real estate that, that I just mentioned, was, you know, that there was a lot of uncertainty in the job market that I'm, I'm in back a few years ago. And, and I wanted to be in control of it, right? I don't like, I don't like someone else having decisions over, you know, where I can work. And, you know, if I, if I want to live in Charlotte, then I want to live in Charlotte, you know, and, and, but that uncertainty, again, my, I like what I'm doing, I love the people I work with, you know, I enjoy, you know, working there, no complaints there whatsoever. But that uncertainty was enough to kind of drive that and be a trigger. Because again, I, you know, I want to decide the time with my family, I want to decide where we're going to live. I want that flexibility. And then now that I've gotten into it further, my wife's kind of changed a bit, you know, as you would imagine, and you know, now I look at what's possible, you know, I, you know, get to talk to cool people like Danny here, and you know, and your brain starts expanding on the possibilities and it's almost that fear of missing out, right, you look at your family, and honestly, I just I don't want to miss the best years in my kid's life. You know, I don't want to have to make like have to make decisions based upon things that are outside of my control. Yeah. So those were the those are the major drivers, you know, and then as I'm getting more more involved, I really enjoy. I enjoy helping people that are just getting started. I mean, I'm by nowhere means where you guys are. But still, there's ways to give back. And I enjoy finding those ways I enjoy teaching. And I would say many mentoring, if you will, right? based on where I'm at in my path. And yeah, those those are all tied to the big reasons why I do this.
Brian Briscoe 30:23
I love it. I mean, in my chosen career, the only certainty I had was every three years I was going to move, you know, I had no idea where but it was a certainty. It's like, and look looking back every year divisible by three, I moved, you know, 2000 369 12 1518. And now it's 21. And I moved again, but last month, thank goodness. But yeah, I understand understand that a lot, you know, and having having to look at career and family and choose between them. I mean, that's never never fun. But well, that said, Brady, we got Danny on the line here. What do you want to ask him? Yeah. Danny,
Brady Hoffpauir 31:00
thanks for being on here. It's been it's been great listening to you here. I took some notes on the side. You actually answered a couple of my questions already. So thanks for doing that in advance. That's proactive.
Dan Tokayer 31:09
All right. Have a good? We're done here.
Brady Hoffpauir 31:16
That's right. So I think Danny, the first question is, you know, you know, Brian, kind of hinted on it there. But, you know, I look at the current market, and we're all feeling it. Right. And it's, at least I feel like I'm feeling it. Right. I'm not as advanced as you guys are. But it seems it seems exceptional in some cases, like where the pricing is going. And it seems to me like you almost have to be a little creative in how you're finding deals these days. So I'd like to hear your feedback on how are you currently finding deals in the current market? Yeah,
Dan Tokayer 31:51
I'm exceptionally outgoing and social, I befriended I befriend brokers, I befriend bankers. And to the point of, I go a little bit above and beyond like, you know, $60 goes a long way, so to speak. So, like if a broker came in, and you know, started talking to me about this, and that, and I remembered something in the conversation I would send out, go on Amazon and buy him like, he's like, Oh, my God, you you'd like steak. I like steak, too. I'm buying a $60 chef knife, even if I've never done a deal with him before. And he's like, Oh, my God, thank you so much. Next thing, you know, he's calling me up. He says, oh, some guy came to my office, he's got this deal before it goes to market, blah, blah, blah. That's how we do it. I don't believe in the whole excuse my language, I don't want to curse. But I don't believe in the whole belief belief of like, before market, I'll buy it, I don't want to do this, that, yes, I get it. I get that everybody wants to buy at a market. But if you if you go above and beyond, and you just speak to, if you buy if you go into a five Plex area, and you speak to a real estate broker, and you show them your face, and you just say hey, you know, I know this great pub, you know, two blocks down, they have a fantastic beer, and you just grab a beer with them. It puts you on top of the list, you know, you know all the money in the world, and a friendly handshake and a friendly beard does so much more than then swinging your you know what to say how much you have. That's how we do it. I've been successful that way.
Brian Briscoe 33:18
I started out giving $10 Starbucks gift cards, you know, I'd call a broker up and as the brand new guy, none of the brokers ever wanted to spend time with me. So I'd call him up and be like, Hey, you know, let's go have a coffee. Like, yeah, let's not, you know, and I would I would follow that up by saying, hey, since we couldn't link up for coffee, you know, here's a Starbucks gift certificate that had a 100% response rate. Yeah, 100% of the people that I sent a star, a $10 Starbucks gift card to responded to me. And, you know, the people who who brought the first property to us, you know, it was one of the folks that I sent that $10 gift card to. So I love it. I love what, what Danny said, You
Dan Tokayer 34:00
know what, at the time, my budget was a little little lower than 60 a person but it works. Whatever works, whether it's $5 a person, the fact that you're giving me something, it's more than 99% of my other clients who are selling deals, they just say thank you by the building, and they negotiate my commission to zero as much as possible. So the fact that you're giving me something and I never even sold you anything, it just it puts you on a different $5 sticker, okay?
Brady Hoffpauir 34:28
Now, that's very, I mean, we so we closed on this 41 unit, you know, a few months ago, and, of course, that sparked some interest for a time but then, you know, then you get, you know, back to trying to get people's attention. So I appreciate that feedback. You know, it's I guess in the end it's relationship relationship relationship. And making yourself stand out. Have you have you, you know, worked like direct with with owners before, are you still primarily going through brokers and I think you mentioned And bankers as well.
Dan Tokayer 35:01
So I am, I'm a little bit weird I, I have a company that's that's my own I syndicate here and there and the way syndicate is very simple. I have 80 cents in my pocket, and I needed $1 to buy this building Do you want to come in for 20 cents, so it's different, I'm not coming in with five cents and trying to raise 95 cents, which most people do or 10 cents. So people want to just sort of ride on my coattails as long as I have a track record. So because of that I don't buy often. So here and there, like if I if, if I find, you know, 15 $20 million in properties, I'll come up with a cash and people will come up with a difference, and I'll buy and then I'm, I'm Zero Dark 30 like I'm dark, like you don't hear from me or anything, I just do what I need to do, I fix the building. And I only come up for air when I sell. So I'm not an avid buyer was a funder as $100 million that needs to buy every other law. I care more about friendship, and I care more about just, you know, just having good rapport with people. So it's not like I do it often. But yeah, I don't have I just I'm known in the area when I buy a lot in the area, because sometimes they come in with a pretty penny. So they're like, oh, Danny's buying a lot in this area. Okay, limit and all brokers sort of come to me. But if you're not that person, and they're just grabbing a beer with somebody, and you know, I don't I don't hold anything. Oh, I remember you from five years ago, here and there. I get emails. And I don't know if you remember me like, hey, great. Give me a beer. And I'll give you whatever you want to know. You know, very simple. So it's hard. Like I don't have like you one of the questions that I remember you asked was how do i do my research? What websites and stuff? You know, I i'm not i'm not an I'm not an internet guy where I care about going on like the website axios, which gives you every metric of who went to the bathroom. How many people ate at Arby's, how many cars are parked? Like, that's great, but I like going to Arby's. I like going to these places and sitting and just had the bar and seeing who comes in who comes out what cars are driving. I like talking to people and say, Where do you live? Hey, you know, I make up stories. I'm like, hey, me and my wife are thinking about moving here. Where do you recommend I move to? Next thing, you know, this person tells me Oh, you should move to blah, blah, blah, I'm literally paying my bill, go in my car and go look at blah, blah, blah, look at the cars like this. So I'm a little bit old school like that. Yes, it's great peripherally, when you're sitting here, and you're like, should I buy in this area? And I am sorry, I'm not as helpful in terms of that of what websites you can find out. I guess anything from any website about who lives there? What's the gross income, but it doesn't really tell you until Yeah, I always like quoting the movie Gladiator, you know, when he grabs the sand to get a feel. So that's what I do. Like someone tells me about a great area, I'm on a plane, or I'm at a bar in that area and see who's comes in. And I walk away saying, I don't know what they're telling you about it. It's not for me. You know, like, that's sort of how I look at it. But yeah, peripherally, you can start with a website and see everything. But once you go there and see who's going and who's who's going to a bar, who's going out to eat what cars are driving, Where do they live? How do they keep their houses, that's more important than anything.
Brian Briscoe 38:07
That's really knowing the area that you're investing in and taking it one step deeper than any website can get hit you with? Like it Right, right.
Brady Hoffpauir 38:14
Now, on on the so I'm starting to get into systems. Yeah, so we've got the one property that we've worked through there. It's, it's, it's performing now. And I'm big into that, that kind of, alright, let's learn from what we did and not do that again, if it was wrong, or at least amplified if it was right. Right. We've started some of that process on on the property and but in general, like systems as a whole and looking for kind of removing my time from the equation. Yeah, is is what I'm I'm currently deep diving into. Yeah, I'm curious on your side, you mentioned that primarily, you're, you're taking this as as kind of the sole sponsor, if you if you will, right, what what types of systems or even like automation programmes or things like this, I know a lot of people use Active Campaign or integral Matt or others.
Dan Tokayer 39:10
One side, there's yardi, there's all the big ones, the problem you're gonna have is you're gonna pay per door. For all the systems use, it depends on how big you want to scale. And then you sort of have to pay to play the old days, when I had 200 units in Manhattan. I did QuickBooks. And I just had a like, I'm very old school, I had a piece of paper and all the lease renewals, you know, I would have it on on a board and just sort of wipe them off and redo it, because I had I had a few 100 and I had helped in the office a little bit. But there's I can't answer that I have a third party management that uses one site, and it's fantastic. But it's a pretty penny. You might be paying, you know, close to 1000 or 2000 a month or something like that, and that might really eat into your but I apologise I don't have an educated answer for that outside of work. My company uses I don't like this systems, they do remind you at certain things, which is great when the lease renewals, this and that, and you can put all your work orders in there. But I don't have any good answer that
Brady Hoffpauir 40:14
do y'all have any systems even for like following up with people that are, let's say interested in investing? Sounds like you're you're primarily like the one on one. very personal relationships. Yeah. With investors. So do you get into any of that? No, I
Dan Tokayer 40:29
actually got emailed a few months, a few weeks ago from LinkedIn by someone who has some of those systems. It's just not for me, it's I forgot what it there's an acronym for it. My PLC like point of contact or something like that, that puts all your investors. I'm not like, I don't have 35,000 investors or any of that stuff. I just know, I have got eight or 10 people at most, you know, one time and they're in three or four deals, I know their cell phones, I know their wives names, and other kids names. I know how like that sort of how I work. Some people respect that some people want 40 page documents every month, with 30 pages written by you about what's going on with apartment three seats up like that. I say it's not for me.
Brian Briscoe 41:16
Easiest Way, perfect answer actually a good finish, finish your thought
Dan Tokayer 41:20
I was gonna say that the best thing you can say to a potential investor, is to say, I'm not looking for an investor, I'm looking for a referral. I'm working for you. I'm making this building work, but I want you more than just to make money is to be able to refer me, that's when I know that I did a good job. And people respect that because they know that it's is a great line. I heard it from a Peter or back. But it's great. It's great. It basically says, Yeah, you know, he's working for me to the last day because he wants my referral. And I know that his heart is into it. It's not just a numbers thing.
Brian Briscoe 41:54
I was saying, I think that's a perfect answer, actually, because a lot of people will will focus around which system is better? Do I go into Active Campaign? Do I go with this buy us out folio? Or yardie? Or, or anything else? The answer is it doesn't really matter. You know, the the system that that is best for you is a system that you use. And I think I think a lot of people have done, you know, amazing things using Excel spreadsheets or, or something or a simple whiteboard. But end of the day, the system that is gonna work best for you is a system that you use. And you know, we we've kind of jumped in and out of a couple of systems, we don't have a big fancy CRM with a lot of bells and whistles. Like a lot of them will do you know, that's the
Dan Tokayer 42:38
acronym I was looking for CRM, CRM,
Brian Briscoe 42:40
yeah, CRM. So you know, we use a, we use the one that comes to our website, you know, and, you know, it's not like Active Campaign. But you know, at the same time, we're not paying, you know, six $800 a month, I don't know what the price is for Active Campaign anymore, but we're not paying the big fee for it either.
Brady Hoffpauir 42:59
Life. So yeah, yeah. I mean, it's great feedback. It's, it's certainly some of the thing about right. It's, it's polar opposite type approaches, but at the end of the day use what you need is the outcome of that. And, yeah, whatever tool you need, I mean, we use currently, you know, Google Sheets and some other you know, some other systems, we do use Active Campaign, but you know, for very specific reasons, but yeah, no, thanks for that. You know, you'd mentioned earlier also about due diligence, I kind of wanted to circle back to that kind of on a whole, like due diligence from, you know, the broker that you've known for a while says, hey, we've got this property be perfect for you all the way through to you've closed, you know, if you kind of look at that in phases as a whole. I mentioned, I have an engineering background. So I tend to be analytical. I don't necessarily always enjoy the details of it. But I enjoy knowing, let's say that the risks are going to be mitigated. Yeah, what are the major risks and have we mitigated them, but sometimes that mentality can dive too deep? Right. As your phases
Dan Tokayer 44:11
by all the properties that you paralysis on the analysis, and I'll buy it sight unseen? Yeah.
Brady Hoffpauir 44:19
No, you know, avoid so avoiding that kind of paralysis? You know, it's not necessarily that bad with me, I would say, but at the same time, it is a bit of Okay, well, it's good enough, you know, so let's go ahead and take the jump. I'm curious from your perspective, like, Where is that good enough phase? I mean, you mentioned kind of the, the, the criteria there, but even getting into like the due diligence, once you have the property under contract, you're still you're still continuously evaluating. That's good enough. It's close enough. I'm curious if you could walk me through kind of how you approach those two phases.
Dan Tokayer 44:51
So it's, it's a little bit of a tough answer. But the way I look at it is it's just look at it as a football field, right? There's 100 yards in a football field and On one to 50, then 49 to one, right? Everybody has their own 510 1520 numbers on a football field that they focus on. I care about yard 23, I care about yard 21, I care about yard 50. And those are their their points. So in order for you to understand your due diligence, you need to understand what your end goal is. So for me, my end goal is to double my money within less than three years, which thank God, my averages is 37 months, I think, since I started, I've always been able to double my money. Now remember, doubling my money doesn't mean doubling the profit doubling the building value, it means doubling the money I put in the building. So if it's a $4 million building, I put in a million, I need to sell it for five in order to potentially double my money. So it's a big difference. But so because doubling My money is my end goal. my end goal is delta. That's what I care about. I care about delta and I care about the the underlining underwriting, because I want to make sure that it's not just like, yeah, guy collects. $20,000. Yeah, the expensive 10. Trust me. So that's important because those numbers can be off. So you, I focus on those two things. For you, the due diligence should only focus on whatever your end goal is, if your end goal is to refinance, pull out your money and then buy another property, if your end goal is to fix up the property for the next buyer, if your end goal is to give this to your grandchildren, those are all different due diligence angles, you need to look at it and you need to paralysis of the analysis on those two things to make sure they're good. As much as I don't like paralysis by analysis. I do it on Delta, and I do it on underwriting. But I do it on those too. Some people might know Oh, the boiler is not this the but I don't care needs a new roof. Fine. I'll put in the money. The bottom line is I'm buying it for a million and I can sell it for a million for in, you know, 36 months. That's all I care about. So I think that's a 30,000 square foot 30,000. What are the feet of view? Yeah, overview of how to do the due diligence. Everybody has their own ticks that like I care about this or that. I don't care about all that stuff. If the problem can be solved with money, it's not a real problem.
Brian Briscoe 47:15
Okay, Love it. Love it. Well, guys, we're about out of time here. So one final question for each of you as we close up shop and Danny, you get to go first. how can listeners find out more about you? Email me. All right, Dan. At simplicity cap calm. All right. Brady, same question for you. How can how can our listeners learn more about you? Yeah, absolutely. They
Brady Hoffpauir 47:37
can. They can email me Brady at ridge line equity comm or they can find me on LinkedIn. Brady Hoffpauir you. You'll spell it in the show notes. I assume
Brian Briscoe 47:46
the show notes, right. So yeah, those are the two easiest ways to get in touch with me and please reach out. I do enjoy talking to people so and it's pronounced just like it's spelled right. No. Yeah. Not in English, not in English, maybe maybe in a different language. But in Gaelic, it's spelled exactly like, exactly like it's spelled. So well, thanks a lot, guys for coming on the show again and appreciate your time. Thank you for having us.
Thank you for listening to the tiger and apartment investor podcast today brought to you by four oaks capital. If you'd like to know more about how to invest in apartment buildings or want to be a guest on our show, visit our website at four oaks capital comm slash podcast or email us directly. If you're listening you obviously like the show. So pull out your phone, app, subscribe, and leave us a five star rating on your favourite podcast app. And we'll see you again next week.
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