Episode 58 of the Diary of an Apartment Investor with Ashley Wilson and Megan Greathouse. Transcript by Otter.ai – please forgive any errors.
Brian Briscoe 0:00
This is Brian Briscoe, 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 of the show notes and just tap the link that said Megan we have Ashley on their line here. What do you want to ask her?
Megan Greathouse 1:23
How did you drill down to where you're investing or the few markets that you focus on?
Ashley Wilson 1:28
The first thing as cliche as it sounds, but you can make money in any market, every single person has a list of rankings have a priority on what is most important to them. It's not the fact that every single owner operator uses them. It's the the ranking in which they put them in level of importance. Every single market has really great things to offer and other markets don't. So what we do on a bi annual basis is we do a full assessment of the markets. And we have a Priority Ranking that we've already determined.
Brian Briscoe 2:11
Welcome to the diary of an apartment investor podcast with your host Brian brisco. In this podcast, we bring some of the top professionals in 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. This is journal entry number 58. With a really badass experienced investor, Ashley Wilson, and an aspiring multifamily investor that's already been extremely successful with single family game making great house. Keep listening to hear tips on where to invest in apartments. Learn about Ashley's amazing new book and also learn how long Megan and I have known each other. And now the show. Welcome to the diamond apartment investor podcast. Once again, I'm your host, Brian brisco with four oaks capital A very excited for today's show. It's another one of our Ask the Expert series. And we have two amazing people on the line with us. We got a woman with tonne of experience in this and other businesses, actually Wilson and a very motivated and energetic aspiring investor. Megan great house. So first a little bit about Ashley. She is the co founder of bar down investments. And how's it Look, bestselling author of the only woman in the room, active member in the real estate investor community and a bigger pocket series hosts. So that said, Ashley, welcome to the show. Thank you very much for having me. Yeah. So first thing I just want to ask you about is the book that you guys just recently released called the only woman in the room. I've got my copy of it right here and very excited to start reading about it. Can you tell us a little bit about the book and why you why you decided to write it?
Ashley Wilson 3:44
Absolutely. So I think it comes to no surprise that women are a minority still within real estate investing. And ultimately, two years ago, I was at davian horns Mid Atlantic summit, when the co founders of the real estate investor community Liz fair cloth and undress. psyckadeli asked all the women at the conference to have lunch together. It was at that lunch that I realised that just two tables comprised of just 16 women were able to come together out of 450 attendees. And that just dumbfounded me I didn't understand how so few women were at this conference. At that moment, I said to myself, I'm going to write a book, and I knew the title from that very moment. I told my husband on the way home, I'm going to write a book and it's going to be called the only woman in the room. At that point, I didn't realise that I would bring together 19 co authors. But over the past two years, I've just been inspired by such incredible women at different points in their journey, different asset classes, different backgrounds, that really had an incredible story to tell. And we're very knowledgeable. They are experts in their own right and they deserve to be elevated to role model status. They deserve to be on stage. And I thought that this book would provide a platform in which they could use this credit ation to further advance their career. Coupled with that I thought it provided role models to the upcoming women investors seeking to follow in someone's footsteps. So it really was a two fold type of endeavour. And last, but certainly not least, and probably my greatest motivator is I have two young daughters myself. So I wanted them to be able to look up and see other women that are doing what their mother's doing. So that, you know, I'm no longer the only woman in the room that we're together on this journey.
Brian Briscoe 5:36
Yeah, I love it. Now, incidentally, I have four daughters, you know. So that's, that's also something that hits home with me as well. And you know, I'm going to read this copy. And I'll probably send it to my oldest daughter, who's actually the podcast editor, too. So Elena is not going to be surprised, I guess. So there you go. she's expecting it now. But yeah, well, good. So I love the book, you know, once again, 20 different stories from different women in various real estate asset classes or property types. A really good book, highly recommend everybody pick it up. And I will put a link to the book in the show notes for you. Thank you. Yeah, not a problem. Now that said, Why don't you give us a little bit more about your background in history and what got you into apartment investing.
Ashley Wilson 6:20
So it all started a little over 10 years ago, my husband and I were looking to diversify our retirement strategy. And we were not fans of the stock market. So we were looking for alternative investments, and we stumbled upon real estate. We first started with a single family, short term rental, and we also house hacked and that snowballed into additional rentals. And then six years ago, my father and I started a flipping business in the suburbs of Philadelphia. And about two years ago, we started a multifamily business when we moved back, we were living abroad. So when we moved back from overseas, we knew we wanted to get into multifamily, but due to the fact that multifamily is such a relationship based business, we knew that we couldn't start that business until moving back to the States. So once we move back that's when we started pursuing large multifamily.
Brian Briscoe 7:10
Yeah, yeah. So started out with flipping and then that living abroad thing I think touches home for me I've I've lived abroad several times, and you know, intentionally postponed a lot of my real estate ambitions when I'm active duty military. So between deployments and being stationed in their countries, it's difficult to do. So that said, started flipping houses with with your father you said, and then what, what drove you to multifamily?
Ashley Wilson 7:38
So, there's a lot of different reasons that drive me to multifamily. From a very high level standpoint, if you're looking at flipping as opposed to long term rent rentals. It's the number of times they want you to get paid on a real estate transaction. So on single family flipping, you're getting paid out one time at sale on multifamily, especially when you're doing large multifamily and syndications. There's countless ways from fees such as acquisition fee, asset management fee disposition fee refinance fee to tax benefits, clearly there are a lot of tax incentives with cost segregation and depreciate bonus depreciation especially has some advantages as well. And then another huge component for us it's a hedge against inflation. So rents are directly tied with inflation. And ultimately, you know, your your investment is tied to that. So I don't think I have to convince anyone on why real estate but multifamily asset class, there's just such an increasing demand. If we look at basic economics, you know, the demand is rising at a higher rate than the supply. And when you have those metrics, or fundamentals, ultimately, you know, the value continues to increase. So we just like the fundamentals of multifamily, it's proven recession resistant. I know, even though people are having challenges with the eviction moratorium, and the challenges with COVID. There's a lot of lot of markets that are doing well. And we've been fortunate to have our investments in in strong markets during this COVID situation. Yeah,
Brian Briscoe 9:15
yeah. Speaking of I read an article last week, and the title of the article, and I won't go into what my thoughts on the mainstream media, but the title of the article was like doom and gloom, how bad the rental market was in New York City. And I clicked on it and I started reading it. I'm like, let's, let's see what this is like. And it said that the New York City had a vacancy rate that was three times its average and whatnot. But when you really dug down into what the vacancy rate was 6%, for multifamily in New York City, you know, and when you when you're actually looking at the numbers, you know, there's big pandemics coming through New York was the city in united states that was hit the hardest, and their multifamily occupancy is still 94%. So I think that's just a testament to the resilience of, you know, multifamily in a lot of ways.
Ashley Wilson 10:08
I think you're you're spot on, I think ultimately, headlines are headlines. And the appeal of headlines trying to capture people's attention is not limited to just politics and the upcoming election, it expands to all different topics. And we see that in real estate all the time. Even these topic, you know, the headlines that are grabbing your attention for the eviction moratorium, when you really dive into it. And if people spend the time to look at the metrics and look at the data, because I think it's more important to look at the data than to read the article. When I read an article, I look for the data source, and then I go to the data source, and I look at it myself. So ultimately, I think that there are a lot of there are a lot of articles even on just Case in point, even on the most recent offering that we had open to investors and closed on last month, I reported data statistics about the oil industry in Houston. And I had multiple people challenge me on that during the call and then afterwards come to me and said, You're right. When I looked into the data, you're you're absolutely right. So I think that fortunately for me, when I'm pursuing markets like Houston, there are a lot of people who just read headlines, and I'm happy for that, because that just removes competitors for me. So
Brian Briscoe 11:25
yeah, that's a good point. You know, when when people are looking at doom and gloom headlines like, hey, maybe maybe now's not the right time to go apartment shopping. You know, we're still we're still looking for deals, we're still closing. I think our metric, you know, we're a little bit tighter on our underwriting is basically what we've done. And we're factoring in a lot of potential vacancies and bad debt just in case there is a an adverse reaction to COVID. But we're we're operating there's actually not, it's not that bad as far as what the market averages are for multifamily. So
Ashley Wilson 11:58
we're actually more bullish than we have been. So, you know, there's a lot to be said about everyone has different strategies, and everyone has different underwriting in different business operation plans. But for us, we are, we are full steam ahead. And in fact, if anything, we're actually working harder to source right now. Because ultimately, there has been some areas that have had corrections already. So tapping into those markets is obviously advantageous. Yeah,
Brian Briscoe 12:29
yeah. And I completely agree on that one. So one thing, you know, a lot of people who are new to the apartment investing field have a hard time with just getting that first deal. Can you speak a little bit about that? Was that difficult for you guys? Or was that just kind of a natural progression from your flipping business?
Ashley Wilson 12:47
So I was very lucky in the sense that I was asked to partner with someone who already had a deal under contract, I focus on asset and construction management. And unfortunately, there's not a lot of people who focus on that particular topic, they'll focus on asset management, but they don't marry the two. And there's definitely not a lot of people in the construction management side. So what ultimately ended up happening is there was a deal that came across that needed someone to asset and construction manage a property. And I was fortunate that I partnered with that group. And that, you know, got my foot in the door. And then from there, it's just, it's just been an opportunity after another opportunity. So I've been fortunate about that.
Brian Briscoe 13:31
Yeah. Well, that's actually a really good thing. And very, very key to this business. I mean, does have somewhat have a high barrier to entry, um, you're not going to get loans, you're not going to, you know, be able to attract investors without the experience. So very fortunate for you to be able to take that on. Now, one, one quick question. You know, you're obviously a woman but construction management is traditionally a man's role. Have you had any issues with that? As far as gender goes?
Ashley Wilson 14:01
So my father is a general contractor and I grew up in this space. So I definitely have an advantage probably than most people have, because most people who are in construction typically either stay within having their construction business themselves or they're, they're not typically large multifamily investors. There are very few construction companies that are also multifamily investors. So I am definitely an outlier and to be a woman in this face. I don't know any other construction manager and multi large multifamily. Honestly, I wish I did, but I don't and because I've had experience growing up, being you know, a female around my dad's business and contractors, I've always kind of been able to see the way women have been treated and develop my own tough skin. So it doesn't necessarily bother me but have I had surgery Where people don't take me seriously, they don't understand that I've had to like over prove myself. Absolutely 100% I think that there are some people who will give you the respect regardless of your gender. And there are other people who are simply think that there's some sort of barrier that women have in their brain that they can't process any information about construction. So those situations are definitely handled a little bit differently. But to give one example, I was called in to consult with Matt Faircloth, he was purchasing a property and he had a few other properties he wanted me to consult on for him. And he told the general contractor I was a construction manager. But ultimately, that gentleman just ignored that comments and kept talking to Matt. And Matt said, I don't know why you keep talking to me about construction management, I know nothing about it. And I already introduced Ashley is the construction manager. So you need really needs to start talking to her. And you know, when you have people stand up for you, like there's one thing of me saying it, and obviously I can use my own voice, but it's really situational dependent on how I handle this situation, depending on how, frankly, how rude it is that the person is that I'm talking to?
Brian Briscoe 16:15
Yeah, you know, and I see Megan smiling a lot. I mean, we'll get to her in a minute. But I mean, she's, she was active duty Marine Corps for a while, which is another, another case in point of a woman in a man's world, but Well, good. So let's, let's talk a little bit about some of the brief history of some of the deals you've done. Can you can you walk us through one or more, or give us an idea of what you're looking for as far as good deals go?
Ashley Wilson 16:39
Yeah, so I have done, obviously, everything from single family to multifamily. On the single family side, I've done deals where we actually had one deal where we lost money on every other deal, we've been very fortunate that we've made money on and made money all the way through six figure profits. And that's happened quite common commonly because we go after higher end homes, so higher risk, higher reward type of philosophy there, on the multifamily side, what we're we haven't gotten fullcycle on a deal. So I can't tell you our end results in terms of the returns, which I know that most people just want to want to boil down to that simplistic fact. But I can tell you in terms of operations, which is my forte, I have been able to change over tenant bases do value ads in significantly less time than projected and also significantly under budget. So on the first property I ran construction and asset management for that was a two year value add strategy with refi. in year three, I was able to do the value add in less than a year achieve over pre over their projected premiums. And then coupled with that, I deliver that significantly under budget. On the second property that I still have and do asset and construction management for that is another project it was supposed to be a three year value add we did the value add in a year. And while the interior renovations were not under budget, the overall cap x plan was under budget, we've been able to tackle about 300,000 plus more projects than initially planned because I was able to negotiate down all of the other projects to you know, squeeze out more projects in that that overall investment. So those are things that I really focus on and can can control on so it's all the day to day operations.
Brian Briscoe 18:38
Yeah, yeah, that's that's huge. I mean, if you come in under budget obviously with syndications you know, most people are raising the renovation budget as capital upfront. But if you're able to come in under budget, that's that's just going to increase the returns for the investors make the deal much more profitable. And same thing for the timeline. You know, if you're, if your underwriting shows you a two year renovation period, and you get it done in one and you're making those rent bumps and bumps in a year instead of two or are exceeding it in a year, that's just going to make the the returns to the investors and returns to the the ownership group that much better. So kudos to you. I mean, doing that in a year or less is is absolutely amazing. So So one thing that we've we've kind of talked about this a little bit here and there but let's I want to ask you what your big burning Why is you know why? Why is it you do everything you do?
Ashley Wilson 19:31
Both of my parents were in our working class folks, and my mom growing up was a manager of an entire business. And then my dad had his own business as a general contractor. So ultimately it kind of marry the two when you think about it, but at the end of the day, they were always there for me and my brother whenever we had a sporting events, anything anything literally anything they they always put us first you know that was at sacrifice. Have a lot of financial, I don't know if I would use the word hardships, but definitely a lot of they sacrificed a lot for us. And that taught me very early on that the most important thing was being together for your family. So, I growing up, people would always say, what do you want to be when you grow up? And I would always say, I want to be there for my family. That's the number one thing. So when I when I got older, I actually wanted to be a neuropsychologist. But I always had all of my aspirations were all based on, how do I get to my end goal, which is being able to be financially free that I can be there for my family whenever they need me, because I saw firsthand what my parents were sacrificing. So that's what motivates me to this very day. Now real estate is that vehicle that drives 100 miles an hour where all of those other paths, it's not necessarily that they won't get you there, but they're going to different routes, maybe a longer route, and maybe at a slower pace. Yeah.
Brian Briscoe 21:01
Yeah. I love it. I love it. Yeah, my parents also working class. And I mean, what you said completely resonates. I mean, they, they sacrificed a lot. You might my dad, I talked about my dad a lot. But, you know, growing up, he had like, two weeks of leave every year. And one week of that was like, dedicated to taking me on a campout. You know, so we would do scout camp every year, he'd come with us, you know, and so 14 days of leave in a calendar year, and he's spending six of them, you know, with his boys at a scout camp. So, you know, I didn't realise it at the time. But that's that's a huge sacrifice. And you know, I, I see the same thing. You're replaying in my life. So thanks very much. So what's next for you and your journey?
Ashley Wilson 21:43
I want to continue to build out our multifamily business, I'm really focused on legacy building now. So before I was really focused on today, tomorrow kind of mindset, but now my mindset has shifted to legacy. So I'm really trying to build out the bar down investments company and make that something that is, you know, if my daughter's choose to go into this field, which I really hope they do, you know, that's something that not only they could, they could continue but their children so our grandchildren could continue. That's the path I'm on.
Brian Briscoe 22:18
Nice. Nice. Yeah, that's, that's amazing. Be able to provide that legacy and something to pass on to the next generation. Well, we're gonna transition here, we're gonna bring our next guest on, you know, making a great house magazine, marine veteran and former marketing professional turn real estate investor and entrepreneur. She left her full time job in January 2019, is currently scaling up to multifamily investing. She also co host the multifamily Mavericks podcast, she was in St. Louis, Missouri with her husband and two young children loves working out, travelling and being outdoors with their family. So that's it. Megan, welcome to the show.
Megan Greathouse 22:53
Hey, thank you so much, Brian, we actually know each other from our Marine Corps days and have chatted a few times recently, after years of not talking. So it's fine to like, be talking with you again, and on a whole different subject.
Brian Briscoe 23:06
Yeah, I mean, who knew what I think 1111 years ago is probably when we first ran Come on, don't tell people
you know, young officers. Yeah. So just just for everybody, you know, Megan and her husband were both active duty Marines. And I worked directly with our husbands. So I got to know her through through him. You know, we were at the same same unit for probably about a year year and a half before I think you guys both got on record right around the same time. Is that right?
Megan Greathouse 23:40
Yeah, yeah, we were. We both enjoyed our time there me especially because as a Marine Corps kid, but I knew if I wanted kids, that's probably going to do it outside of the Marine Corps. So we came home and transition to getting our grad school fit or grad school and and then started the family a couple years later.
Brian Briscoe 24:00
Nice. Nice. Yeah, well, yeah, it's always great catching up. Always great talking to you. And hopefully we can we can do this a lot more in the future. But so we're talking a little bit about your background. And let's let's go full bore into that what's, you know, who is making great house?
Megan Greathouse 24:15
Yeah, well, as I alluded to earlier, and since we're all kind of given some of the family background, I was a military brat. So my dad was a career Marine, the Marine Corps was really in my blood. I was born into it. And I went all the way through high school, actually in Okinawa, Japan, because we were living abroad. We did six years in Okinawa. And so as in Japan, for middle school, in high school, I mean, really, in that military lifestyle, and I was fortunate to have, you know, parents, especially my father, who always tried to kind of instil both work ethic and then just some basic personal finance knowledge and, you know, never got too deep into it, but he was always telling me, you know, 1015 20% needs to be set aside for a rainy day or for retirement or whatever. And then We moved back to the United States, he retired from the Marine Corps, right as I was going to college. So I ended up in St. Louis, which is where my dad was born and raised, and he has a tonne of family here, went to college, decided I was going to join the Marine Corps for a few years as well, I knew it probably wouldn't be a full career for me. But I wanted that challenge. I'd seen what he's gone through and just kind of the sacrifices and the things they did that I didn't realise how unique it was until I was in college, and for the first time in my life, not around a military community. So I wanted that for myself as well, I wanted to challenge myself, I wanted to see if I could do that as well, before I embarked on, you know, quote, unquote, the rest of life. And as I was graduating college and getting ready to head out and be an active duty marine and be making my first you know, kind of full time paychecks, my dad handed me a few personal finance books. And that's what really got me kind of in the mindset that I need to be thinking about the long term and, you know, some level of wealth or financial independence, just taking care of myself in my future family, and being smart about these things. And, you know, didn't do a tonne with it other than really saving and, you know, basic index fund investing throughout my time in the Marine Corps. After that, my husband and I, as we talked about both left and got our MBAs and ended up in the corporate world. And a couple years into my corporate career, I had my first child and this career and this job that I actually really liked and enjoyed. And brand management suddenly felt just a little bit stifling. Because when my daughter was sick, I had to call in and kind of apologise about needing, please take care of my daughter, right. And I was at a great company where no one was gonna bat an eye about that. But still, that's the culture if you're in corporate America that you've got to kind of ask permission or say please, or say sorry for that. And I didn't like that. Even though I liked the people in the work. So I started really diving in further into real estate, investing in entrepreneurship and options that would get me the flexible life that I wanted to have while having kids and raising kids. But not just you know, I'm just going to leave work and be with the kids, I still wanted to be contributing. And not that there's anything wrong with doing that, of course, but I personally wanted to be contributing and building towards this financial freedom. And like Ashley was saying, a legacy for our kids. So I left my full time job in the beginning of 2019. By that point, I had eight rental units that were all cash flowing and doing well. And we don't touch any of that cash flow yet, because my husband's still at his job. But it's given us that foundation, where we know we have other sources of income, we have backups. I bought a couple more since then, and decided in the beginning of this year that I really want to scale up to multifamily as Ashley is doing, because I see the power there not only in terms of scale, and you know, one purchase can bring 100 or 200 units instead of two or four, as I'm doing currently, but also just the way it's valued. I really, I had a couple of those frustrating refinance experiences where I'd put all this time and effort into renovating the property, increasing rents getting cash flowing really well, but because of comps in the area, I could only push the value of that property so far.
Brian Briscoe 28:21
Yeah. And so I'm limited to single family by comps. I mean, it's there's no other way evaluation. Exactly. Yeah.
Megan Greathouse 28:29
So So yeah, there have been a few things. And, you know, Ashley outlined them beautifully in the beginning to about multifamily that have really drawn me in and I've spent a lot of this year researching networking, looking at deals in the area. I haven't found the right one yet, but my next big purchase is going to be a multifamily.
Brian Briscoe 28:47
Nice. Now, are you looking specifically in the Kansas City Market? I'm St. Louis actually. Sorry, sorry, spring right state wrong side of the state. Hey, no worries. Yeah, I'm
Megan Greathouse 28:57
actually I'm looking in St. Louis. But it's funny, you mentioned that because as I've spent the past probably five or six months looking and you know, direct mail networking, working with brokers going to see places I felt like I'm not seeing quite what I want to see yet. And so it gets you to this point where you start to evaluate is it that I'm not doing the right things here in St. Louis? Or is it that I'm not looking at the right market. And so that's something I'll be very interested in talking with Ashley about too, because you don't have to invest in your backyard, especially when you're going larger. And if you can partner, the sky's the limit. So I think I've got more recent search ahead of me too, in terms of market
Brian Briscoe 29:35
there's there's definitely a lot of variables and you know, tweaking one of the variables, you know, if you find the right variable to change, if you're not having success, find the right variable, and you know, it'll launch things. So now we talked a little bit about it already, but if you could just distil down, you know, to as concise as you can. What's your big burning why,
Megan Greathouse 29:55
and I mentioned my kids and family earlier but it's not just you know, time with them, but how I can spend time with them. I really value experiences and challenges. And we mentioned in my bio that I like travel. So I want to create a life where we have time together to focus on really valuable, interesting and challenging experiences together as a family. So you know, travel and working out and hiking and things like that. And I think financial independence really helps with that.
Brian Briscoe 30:29
Oh, yeah, it does. You does. And, you know, I think we're the nation and maybe the world in general is kind of trending towards not just time, but location, freedom, you know, in this, this is a business you just mentioned, you don't have to invest in your backyard, you can invest from across the country, which I think the corollary to that means it doesn't matter where you're located in this business, so you can live where you want, and still do well in this business. If that means you're, you know, in Thailand for a week, you know, or you're in, you know, one of my favourite places Rio for a week or a month. better for you. So, well, good, good. Now, I know you've gotten a little bit of press, you know, for what you've done with a single in the single family market. I think what, what really what reconnected us is I saw your name on a speaker list on a big military real estate event, you know, about a year ago, you know, it's very, very happy to see him like, making great house. I'm like, I know her. I know her. So you know, congratulations for all the momentum you guys had. And you know, you guys are doing a lot of a lot of things I think a lot of people are trying to do so good for you. And I'm excited to see where where your journey goes. That said, you know, Megan, we have Ashley on their line here. What do you want to ask her?
Megan Greathouse 31:46
Yeah, I mean, I think I want to start with something we just mentioned, which is kind of the market. I mean, actually, I guess I'm very curious what your philosophy is on, on markets on identifying markets. And, you know, there's so much to learn and so many potential markets, how did you drill down to where you're investing are the few markets that you focus on?
Ashley Wilson 32:11
It's an excellent question. I think it's one of the number one stumbling blocks people have when they get into multifamily, if not the number one stumbling block and multifamily The first thing as cliche as it sounds, but you can make money in any market. So that's for starters, it's the way in which you look in the market, and the asset you're going after, can really dictate the success you have in converting. So at the end of the day, all it is, is converting how many offers lead to how many accepted ello eyes that you got, and can then push to PSA. So ultimately, every single person has a list of rankings of a priority on what is most important to them. So let's say for example, you are just to start off very controversially, let's say, for example, that you're a believer in global warming versus you are not a believer in global warming, global warming could be for you a make or break on the market you go after, if you're going after Florida, and you believe in global warming, Florida probably is not going to be a market that you pursue, just due to the level of natural disasters. And then what is the fallout of those natural disasters? Well, insurance premiums are going to go up to the point where the properties might not be insurable. Whenever you're looking to acquire a property, you should not only be looking at how well you can exit that property, but the person who is looking to purchase that property if they can exit as well, because if they can't exit, you have no buyers. So you shouldn't be looking if you're looking for if you're doing five year holds, you should be looking 1015 years out, can someone exit this in 10 to 15 years. And if you're a believer in global warming, that might be a deal breaker for you, as opposed to if you don't believe in global warming, maybe Florida is the perfect investment for you. So there are things like that there are things in terms of job growth, employment, you know, population growth, all of those buzz words that every single syndicator uses. It's not the fact that every single owner operator uses them. It's the the ranking in which they put them in level of importance. Every single market has really pro like great things to offer and other markets don't. So what we do on a biannual basis is we do a full assessment of the markets. And we have a Priority Ranking that we've already determined. So our priority rankings don't change our market analysis of the data we find during our market analysis that changes we have certain thresholds. So it's not even just population growth. But how much is that population growing? How much infrastructure how many building permits are pulled how much new inventory is coming online. There are all things that you're looking at. But not only should you look at them, you should rank them. So we have kind of a traffic light system. I know, I know I'm getting here very granular. But hopefully this helps you and anyone else who's listening. But ultimately, we've come up with different indicators, we have different measures of green light means go yellow means proceed with caution. Red means, you know, this is a deal breaker for us. If you're early on indicators are red, you move on to the next market. But if you're 10 indicators down, you know, your 10th ranking in terms of priority, and that's a red but everything else is before it was a green, then that's something you know, to move forward to. That's step one. That is literally step one, that's not, that's not the end all be all, from there, we are very specific on the type of property we're looking for. We are very specific on the age, we're very specific on the number of units were very specific on the structure of the building, then material use, I mean, we are very specific on the sub markets within that market by street that we're seeking. So it's not just okay, all of these indicators. So we're gonna go after like, say, a St. Louis, you know, that that doesn't mean that we're just going after St. Louis in its totality, we are being very specific on where we are going to go. And then the type of property that we seek. One thing that I am a huge believer is this idea of self fulfilling prophecy. So in psychology, I'm sure most people know that when you visualise something, you want something all the sudden appears more often, if you want a car if you want, you know, I don't know a red Honda, all of a sudden everywhere on the road is just red Honda's, it doesn't mean that all of a sudden, all these red Honda's sold off the parking lot. It's just that your brain is making a more conscious effort to notify you when you see it. So if you are very specific on the type of property that you are looking for, all of a sudden, that's all you're going to see. And you have to be very disciplined to weed out the distractors, because you're going to get things that don't meet what you're looking for. And there's two mindsets, one is okay, let's see if I can make this work. Or that doesn't fit the box. So I'm moving on. There's arguments on both sides. Some people say go with the first strategy, you can be more creative, pick up some extra things you weren't intending on picking up. That's one argument. But the other argument is, most of the time, those distractions are just that they're distractions, and they're at the end of the day taking away time that you have to spend looking for the actual property you're seeking.
Megan Greathouse 37:44
Yeah, and I think that is so true. And it's something that I'm always working on and, and sometimes feel like I'm struggling with. I'm curious about your so you're part of you know, you're one of a few GPS, correct? Correct the group of you? And was this Did someone kind of bring a starting outline of how you assess these things? And then you guys evolved over time? Did it kind of you had your first building or two, and then you started to build it? What was that process like because that that takes time and experience and probably bringing on team members to help with the process, I
Ashley Wilson 38:16
assume. So when I first started multifamily, I was asked to partner with another group, and they asked me to join their company, I ultimately decided that wasn't the right fit for me. And then I went down the path of, oh, I'll just partner with people and they can have me asset and construction manage. And I don't have to find properties. That way, I take that out. They're almost bird dogging for me in a sense, and I just partner with them, and run a component of it, and we'll call it today. What I realised very quickly is even though there are a lot of people who wanted to partner with me, the way in which they're underwriting was not something I wanted to attach my name to. So very quickly, I realised that that strategy wasn't going to work. And the strategy that best fit for me was to go out and find the properties on my own. So we pivoted so at the time, it was my husband and myself. And at that time, we pivoted to this new strategy that we were just going to pursue doing this. And we then partnered with two other people, one of which is Jay Scott, which I think most people know. So he's part of our company too. And we just kept doing it wrong. Right? So we kept spending a lot of energy and I'm a firm believer in debriefs, so I constantly work and then I step back and I say, okay, what's working, what's not working? What are we changing? What are we improving? And that was one of those those moments is okay, we are spending a lot of time underwriting deals that we're not even close on where millions of dollars off something's not right here. something's not working. So we literally said to ourselves, okay, we're gonna start from from scratch. I mean, this is a few properties in mind you this is Something like we didn't know what we were doing. But we didn't know what we were doing. And so we, we had a meeting. And it took us two or three months, the first time we did an analysis, because we had to identify indicators, we couldn't even agree on indicators to together collectively as a group. So we then got the indicators that we, we believe are sound indicators of an investment, then we had to rank them. And then we had to go out and find the properties. So or find them the market, so we rank them. And then we divided and conquered, we each had a different part of the country. And we had to report back after two weeks, and give a list of our top five markets within the sub market that we were looking at. And then we did a shortlist. And then from that shortlist, we all were responsible for challenging those markets to, you know, almost like a debate where you're trying to put holes in. And ultimately, we decided on four markets from that strategy. And from that point forward, every six months, we redo the process, not to the process of, you know, starting in identifying indicators, but also kind of saying, are these indicators still valid? Are these still the rankings we want? Are these still the indicators we want? Yes. Okay, let's go out, are these silver markets we're interested in our, or their economies changing? Are things changing, that we're no longer interested in this market? Are there other markets that are, you know, up and coming that we want to pursue? So um, you know, there's a lot of different ways in which we particularly did it doesn't mean we did it, right. But I can tell you that our conversion, all of a sudden changed, we went from, you know, not even writing ello eyes to all of a sudden, we were writing a bunch of ello eyes, and we weren't getting offers. So then the problem moved, it moved down the assembly line. So then we had to say to ourselves, why are we not getting? Why are we not getting deals? And why are we writing so many ello eyes? So then we had to look at the types of properties we were analysing how we were analysing them and shore up our underwriting, whether or not we wanted to do a verbal offer, before we did and our formal level why and that whole process and because we analyse that, we all of a sudden change our converting there too. So it's really just understanding the entire funnel, and then making improvements along the way to have you know, a greater conversion rate.
Brian Briscoe 42:19
I like the analogy, you said the problem, move down the assembly line, you know, because that's just how it is, you know, you're you're at the beginning stages, you have certain problems you get over him you learn. And you know, you move to the next step in the process. And same thing. great analogy.
Megan Greathouse 42:34
Yeah. And it's so helpful to hear that whole process that you guys went through and, and the evolution because you do hear a lot of folks who have been in it a little longer talk about where they are now. And having the breakdown of how that evolves is so helpful. How did that process change how you presented to brokers or chatted with brokers or any of the other connections you were making to find the potential deals?
Ashley Wilson 43:02
This might not be the question you're asking, but I think this will be a more valuable answer to to probably what you're seeking. So we had a, we had the ability to really leverage three of the four partners in terms of being the connection on the broker side. Right. So just to break it down. We have Jay Scott, who, I mean, he is one of the best time best all time real estate authors ever, right? And he's infamous, and a lot of people know him. So there's that built in credibility, right? We have my husband, who is a former professional athlete, so that has an allure to it. It's memorable, it's easy to connect with brokers, and then we have me who is a woman, right? So I'm a woman, and there's not a lot of women in this space. And we ultimately decided to position me as the Connect as the point of contact for burgers. And that was a lot of different reasons. One is because I'm very extrovert. You know, if you look at the other two, I'm more well suited for that role. But also to I have some memorability about me as well, because of not only the woman side, but also because of the construction side and I'm doing operations and asset management. So there is the ability for me to really know what they're talking about on a whole nother level. Because even though brokers speak their own language, and it's different from the operator speak, I can translate it and also challenge them and you know, it becomes very engaging because they don't have a lot of women seeking multifamily. Furthermore, like they don't have a lot of women who actually operating them as well coming at them. So now their first interaction you know, a lot of times it's our first interaction having a woman talk to them about pursuing multifamily is someone who speaks their language and also to knows what they're talking about. So I think at the end of the day, We we positioned ourselves and I even challenged it. Right before we got our, our last property saying, you know, is this really the, the strategy we should be using, because I feel like, maybe it's a drawback that, you know, I'm, I'm the one seeking these contacts in these relationships. But I think what you have to do is you have to make yourself it's it's a marketing at the end of the day, what we're doing is just marketing, we're trying to market ourselves as being able to close on deals, trying to provide credibility, whether it's from the broker side, the investor side, at the end of the day, you are trying to get across a very clear, concise message. And there's a lot of different ways you can position it. But if you're going to find a way that differentiates yourself, you stand out. You know, you can probably source a lot of deals from that alone. I mean, there's a reason why Michael Becker owns all of Dallas, he's memorable, he's able to close, he's, you know, they have their podcasts that they're sharing. And he's, you know, self promoting all the time. I mean, they're, that's a machine, right. But that machine creates conversion. And that's what we're trying to do. And that's what everyone should be trying to do. Another case in point, Joe fairless. Joe fairless is actually really not known on the broker side that well, his partner is Frank, his partner is very well known. But Frank isn't known to the investors, they have done a great job of dividing and conquering if you look at their business structure, so you really just want to understand how you can play up the business, who is positioned right for, you know, their natural disposition for specific sides of the business, and then position them there. So they can excel as opposed to having them work against the grain?
Megan Greathouse 46:45
Yeah, absolutely. And how has How did you guys kind of go into partnership? I guess what's, what's the breakout between you guys and your partnership? And did you go into the partnership? Because you had kind of pre existing relationships? And then you figured that out? Or did you figure out the roles and then find the partner.
Ashley Wilson 47:06
So we have been through a bad Partnership, which makes us more critical of finding the right partners. And I'm a firm believer that the partnership matters more than the deal. So if you think you're spending a year to find a good deal, you should spend at least that if not longer, finding your partners, you should not be partnering with people overnight, just because you guys have you know, you guys both like the golf, like you have the same thing in common. Or you can drink beers together all weekend long and have a good time. Like, that's not who you're partnering with, you have to be able to partner with someone where you can have difficult conversations with that person. And vice versa, you can handle them having difficult conversations with you. All of the partners that we have are people that we have known for over a year and have done business with in some capacity, whether that is constantly working together on something that is a free community type thing that at least you know how you work together, all the way to, you know, with Jay, for example, Jay, I met at a conference, I went up and had a conversation with him. And he was interested in an idea I had we started talking about it, I met his partner, he met my husband, next thing you know, we're talking for three hours. And we really hit it off. Do we do a deal together? Right after that? No, we didn't. We continue talking over email, we stayed in touch. And we kept circling back to each other. And then eventually, like, the this opportunity, we had this discussion, and it was a natural progression. So and then with respect to your first question on, you know, the the the partnership splits, it really depends on what someone's bringing to the table, how much their involves the capacity, they have to be involved, their competency, their commitment, you know, all of those things, you really want to make sure that it matches well with the partnership structure. So someone can be a partner. And there, they only want to be involved in one component. So maybe that's, you know, 1% 2% 30% I don't know, like it all really depends on, you know, the capacity in which they're involved and how much value they're bringing.
Brian Briscoe 49:19
Yeah, absolutely. So so let's let's wrap it up. You know, thank you so much to the two of you for coming on the show and adding tremendous value. But one question that I have for each of you and actually you go first question is how can our listeners find out more about you? You can
Ashley Wilson 49:35
find me at bad ash investor calm, which is ba d a sh investor calm or on Instagram at bad ash investor on the website, you can link to all of the other companies that were mentioned today.
Brian Briscoe 49:47
Okay. And Megan, same question for you. Yeah, I'm
Megan Greathouse 49:50
active on a lot of social media sites, primarily LinkedIn or Instagram. I'm at part time Empire. Awesome.
Brian Briscoe 49:58
Well, once again, thank you so so much for coming on the show today, this was an amazing hour to spend with with two amazing people. And I look forward to, you know, hopefully continuing on the relationship.
Ashley Wilson 50:09
Thank you again. And thank you both for your service by the way.
Brian Briscoe 50:13
Thanks. Thank you. Thanks for having us, Brian. Yeah, no problem.
Thank you for listening to the dialogue 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 still 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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