First Deal Episode with Henri Wick

Episode 214 of the Diary of an Apartment Investor Podcast with Henri Wick. Transcript by – please forgive any errors.

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Brian Briscoe 0:00

What advice would you give somebody who is, you know, maybe six to 12 months behind where you are, who's trying to do what you're doing right now,

Henri Wick 0:08

first piece is to really lean on your network, like I was saying earlier in this call, you would be surprised about how much people are willing to help you and how much other people know that you just don't even know they definitely get out there, you know, plays, calls, reach out on LinkedIn, don't be afraid to put yourself out there in that aspect. And then the second thing I would say, and I kind of ran into this problem myself, and I know a lot of people do, you can only do so much research and so much preparation before you finally just have to take that leap and go do it. You can talk about how you want to be a real estate investor all day, but you're not actually going to be a real estate investor until you invest in a property

Brian Briscoe 0:54

Welcome to the diary of an apartment investor podcast with your host Brian Briscoe. 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. Welcome to the diary of an apartment investor podcast. I'm your host, Brian Briscoe with four oaks capital, we got a great show lined up for you guys today. It's one of our first deal episodes. We've got somebody I've talked with a couple times in the last month on the line with us, so I'm super excited for it. Introducing everybody to Henry wick, not to be confused with his brother John Wick or the movie John Wick. But that said, Henry, welcome.

Henri Wick 1:42

Yes. Thank you for having me. Brian. Happy to be here.

Brian Briscoe 1:44

Absolutely. So with that John Wick movie, you know, to get any new really cool jokes about that?

Henri Wick 1:52

Well, we can, we can't use my brother's credit credit in any bars without the bartender asking a number of questions. So he's, he's kind of locked out there. I

Brian Briscoe 1:59

always have to put my card down. Now. Somebody else has to pay. Right. Okay, good. I'm pretty much okay. Good for him. Bad for you. But all right. I didn't walk out. Yeah, so cool. So let's, let's talk a little bit about you, if you don't mind. Tell us about your background. And you know, what, kind of weave weave a tale tell us how you got into apartment investing? Yeah, definitely.

Henri Wick 2:19

So to go all the way back. I was a University of Michigan graduate 2019, I was in the business school there. I had always had interest in real estate, I wasn't exactly sure what form that would take. But because of it, I took some classes at Michigan. And I told myself that sometime down the road when I had enough money to get into passive investing. So I graduate 2019, I get a job working on Wall Street at a European bank as an investment grade bond trader. Alright, a couple years in, I'm starting to get my first bonus. And I'm thinking like, Okay, I want to put this to work COVID hits, I go remote, and I'm remote for about a year and my brother who's out in Tampa, great weather, I just thought I'm gonna go out and visit them spending some time there. And I get the idea that, hey, I'm gonna check out some real estate while I'm here. Yeah, driving around looking at some properties, decided that I want to pull the trigger wasn't exactly sure what form that would take whether it's going to be passive or active. So I talked to a few friends and family members. In kind of long story short, I came to the idea that, hey, I want to pursue this and I want to pursue it full time. I saved up enough money at this point that I thought I could, you know, take a year or two, no salary, go after it. So I set up a platform for myself finding properties. And when I felt like I had the first one lined up, I pulled the trigger, I quit my job, and I went after it.

Brian Briscoe 3:39

Nice, nice. So you quit your fancy Wall Street job, the one that you studied, you know, at University of Michigan for years to pursue real estate full time. Was it was that a hard decision to make? Or I mean, what what kind of drove you to do that?

Henri Wick 3:55

Yeah, so there's definitely more to it than the way I kind of just made it sound pretty simple. You know, it was a very good job. And it was a good salary. And it was something that I always thought I wanted to do. But it was, you know, one of those scenarios where when you finally pull back the curtains, it's not exactly what you might expect, or at least for me personally. Um, so I wasn't super happy in the role to begin with. Yep. So that made it definitely a little bit easier to part ways and then just seeing this opportunity to get into real estate, made it all the easier to jump ship.

Brian Briscoe 4:25

I mean, Wall Street sounds cool. I mean, it reminds me of my job at the Pentagon. You know, I worked at the Pentagon, and it sounds cool. Everybody went out, Hey, I work at the Pentagon. You're like, wow, that sounds awesome. But it's not, you know, and you're just like,

Henri Wick 4:38

Oh, that's really the best way to describe it. Yeah. Yeah,

Brian Briscoe 4:42

that's that's exactly what it was. So I think I get I get where you're coming from there. But so you're in Tampa. Whether it's a lot better in Tampa than it is a lot better. Yep. I mean, I was in Orlando last week and I assume you you're probably like sitting mid 80s right now and looks like the sunshine shining behind you. So

Henri Wick 5:01

it's warm, sunny, I have a pool 20 feet from a palm trees all around me. So no complaints.

Brian Briscoe 5:06

Yeah, hard, hard to beat that. I'm in Idaho Falls and I like it here. But you know, the weather is not the same look, according to you know, Apple whether it's 43 degrees outside. Yeah. Yeah, it was mid 30s when I, you know, got up to go to the gym this morning. But yeah, so you're in a great place. You got weather going? Yes. So let's talk about your your why I like to call your big burning. Why, you know, tell us? What motivates you to to succeed to build wealth?

Henri Wick 5:41

Yeah, definitely. So I think the simplest way you can put it is the freedom that the wealth brings. And I know that's probably a corny answer and a common one, but I definitely think it rings true. Because when you think about it, you know, when you start earning that money, your your choices become a lot more you get a lot more optionality. And what do I want to do? When do I want to do it? Who do I want to do it with, you know, I have a girlfriend that I live with, um, you know, my brother and his wife live nearby, we like to go out to dinner, we like to travel. And that freedom of choice is something that you really need money to do. And whether that's unfortunate or fortunate depends on how you view it. But that is the reality of the world. So being able to build that wealth gives me that freedom to do what I want. That's what I like to do it. Yeah. And I think

Brian Briscoe 6:33

that that resonates with a lot of people, you know, there, I've seen lots of people in your seat, where, you know, corporate or Wall Street or, you know, whatever, whatever the career is, you realize that, yeah, I'm making a lot of money. But, you know, you're, you're tied to that job, you know, a lot people call them the golden handcuffs, you know, it's like, this is where my income is coming. But you know, you know,

Henri Wick 6:58

you say that, because, you know, you do get paid a lot of money. So you think, Okay, I'm earning my freedom here, but really what they're doing is paying you forget that you don't have any freedom, cuz you are tied to that chair, you're tied to that computer. And at the end of the day, you're not your own boss. So you can't use to do what you want, when you want to do

Brian Briscoe 7:13

it. Yeah, absolutely. And I mean, case in point, I spent last week in Orlando, you know, with out asking anybody's permission to go and that was glorious. So, so cool. Let's so let's talk about some of the challenges you had getting started. In the real estate business, and in how you educated yourself, or how you how you overcame those challenges. Yeah,

Henri Wick 7:38

so I would say I had kind of three primary challenges. First one was the education, you know, I come from a finance background, but it was more trader type, finance, Bond stocks, stuff, like that wasn't exactly real estate based. So I had to start self educating. And I did that, by listening to a lot of podcasts, you know, I listened to the best every podcast every day. And reading a lot of books, the best every book, I keep averages in their pockets, a good one, very common stuff. And so that's sort of how I started teaching myself, you know, how to do this, how to how to analyze a property, how to, you know, look for investors, etc. The second issue I had was time, because when I first started out, I was still working full time as a trader. And you know, as you might imagine, when you're trading, you're trading market hours. So between 7am, that's when it started, probably about 530. I'd stop after 530 is when I doubt my free time. So time was a little restrictive. In the beginning, and then money, you know, I'm 24 years old, I had a couple good years as a Wall Street trader, but, you know, several analysts, so I'm not making seven figures. And so money was not only a bit tight in supporting myself, but also being able to buy these properties, I quickly realized there's no way I was going to do it myself. So those are my three primary challenges in beginning.

Brian Briscoe 9:01

Yeah, you know, I think those are, those are very common challenges. You know, I think it doesn't matter what what your age is, but, you know, time and money or education, that's, if you if you can nail those three things, you know, manage your time well manage your money well and gain the know how and apply it. I mean, you're going to be successful at anything. So yeah,

Henri Wick 9:22

and I mean, truth be told there still ongoing challenges, there's no, there's no, I think, one solution that you know, resolves those issues. So I'm still learning I'm still balancing my time and I'm still trying to find money.

Brian Briscoe 9:34

Yeah, you know, and some something that, you know, I learned, you know, this is leaning back to my military past and we were told from the beginning that we need to be lifelong students, you know, and there there's always something to learn. There's always something to help you get to the next level. You know, and every, every every property you close on is going to be a learning experience and you know, it's going to help you out so. So you mentioned best ever podcasts best ever book any other resources that you'd recommend people turn to to help with, you know, learning about the business. Yeah, so

Henri Wick 10:09

the point that I think I would like to hit home, especially for a lot of these younger guys that don't really have a lot of free cash, there's plenty of purchasable resources, expensive resources. I mean, you can hire a mentor that was advertised to me quite a bit in the beginning. But I really am a strong believer and looking for free resources first, and I found tons and tons of material online, just just Googling stuff. And then take that a step further, you know, reaching out to your network, I think there's a lot more that people have to offer that you don't quite realize, unless you actually take the time to just ask. And so that's another thing I did, I just, I reached out to people on LinkedIn, I went through my alumni network at Michigan, I email people I call people. I wasn't, you know, I wasn't afraid to really just put myself out there. And you get a lot of free resources that way, you know, case in point, that's how I met you. And that's how, you know, I found your resource tribe of Titans, which is, has a lot of material. And that's how I was able to find your podcast, but also a lot of material. So I think it's just trying to be resourceful yourself, and see what you can what you can navigate first. And you'd be surprised when you're able to find, you know, I

Brian Briscoe 11:18

think you're absolutely right. And just just rehashing you know, my journey, I'm sure people who are listening have heard it a million times before, but I did pay for coaching. And the reason I paid for coaching is because I had a limited amount of time, you know, I had a certain amount of time that in our situations are slightly different. I have five kids, you know, and have to provide for him. So, you know, I looked at both options, I looked at option that you went on like, okay, I can find a mentor. I know I can do that. I know I can read enough books to be able to educate myself. I went with mentorship to accelerate the process. But yeah, definitely, it's definitely possible to do exactly, you know, read books reach out to people. And the more and more episodes that I do, the more I realized that a lot of people are doing that a lot of people are, you know, I guess bootstrapping it, but just leveraging you know, platforms like LinkedIn, leveraging all these zoom calls. And there's there's dozens of people that are running networking events for multifamily. On a weekly basis, you can hop in Yeah,

Henri Wick 12:25

totally. It's all about just putting yourself out there. I mean, you know, you and I discussed it prior to the call. But we were both at this conference this past weekend, the Jake and Gino conference. And that's just a great area where you have a lot of like minded people, and similarly eager people that you can just introduce yourself start a conversation and, you know, you'll be surprised what that brings you. Yeah,

Brian Briscoe 12:45

yeah, I've met a lot of good people, those conferences, and a lot of people that have helped our business grow, you know, there's a couple of deals that we've done, where we had to bring in, you know, capital raisers outside, you know, external capital raisers outside of four oaks. And guess where I met them, you know, it was big conferences like this, you know, you may meet 30, or 40 or 50 people, and, you know, out of those 3040 50, you might follow up, you know, keep keep a relationship alive with, you know, five or six. And when it's time for you to put a deal together. Those are the people you call so conference, like, yeah, they're great. They're a lot of fun, too. Yeah, definitely.

Henri Wick 13:24

And I think just going off of that, I was kind of emphasizing using as many free resources as you can. And I think that's very valid. But I will say, at the end of the day, at some point, you probably will have to invest in yourself. And that might require a little up from money. But, you know, I promise you, I've seen some turnaround from it. And I definitely think it's worth it.

Brian Briscoe 13:41

You know, I think one of the biggest aha moments that I had, you know, the epiphany is, it happened at one of those conferences, you know, and it was, it was being around the other people. And you're right, you can do it for free. Or you can go to a big conference and pay a little bit of money. But being around other people, it's absolutely amazing what you can learn from others. And just the motivation, you get, you know, you can see other people who are doing what you want to do. It's like, you know, what, I talked to that guy for 45 minutes. He's a regular guy just like me, and he's doing what I want to do. And a lot of times that's more helpful to me than anything else seeing that, you know, a regular guy just like me just closed on a 200 unit property. Guess what? I can do it too. You know? Yeah, absolutely. Definitely. So, well, cool. Let's, let's talk a little bit about, you know, some deal specific stuff. I know you're closed on on a duplex, you're closing on another duplex. Hopefully, by the time this airs, you'll have closed on that one, and two, four plexes. So let's talk about those properties in order. And you know, so first duplex tell us a little bit about it, how you found it and how you put that together,

Henri Wick 15:01

definitely. So the first duplex we got about six months ago. Um, for those of you that are familiar with Tampa and Ybor City, it's about 10 minutes outside of downtown. It's a great area, it's experiencing some gentrification, a lot of young professionals are moving to it. It's not as expensive as downtown. But it's right there. We found this one, you know, through a more traditional path, we got a broker in the area says I was new, and I wasn't super familiar with it, who brought me on probably about a dozen property tours. And it was very resourceful, especially like I said, when you're newer, and you might not have the time, which I did. And at that, at that moment, he was able to help me identify this property. So we found this first one, to get a little specific, it was listed for 278. And we ended up beginning the negotiation process. As those of you who are active right now, man, imagine there wasn't much to be taken off the top from the listing, just things are obviously very grounded. It really is. We were very, at the end of the day, we were very confident the rental numbers. And that's what mattered most to us what we thought we could return on it. And so we decided the 278 seemed worth it. And so we ended up proceeding. It was a very fast process from there. We began the inspection period, we began the appraisal. But we obviously ran into a number of hiccups, which I'd be happy to dive into. Yeah, yeah. Well, let's

Brian Briscoe 16:25

hit those hiccups then. Yep.

Henri Wick 16:27

So first hiccup. Again, in Ybor City, you're dealing with a lot of older properties on Newsom and Bill 1910 1920 1930. As a result, there's a lot of issues that you know, kind of went on attended to. So some that we ran into or in one of our back units, it was a duplex, the second year in the back had a lot of plumbing problems. So immediately, especially when it comes back number of issues that have to be addressed before they can pass the four points. So that delay is our timeline. At the same time, we had our first appraisal done again, I say we agree to 278 to be the purchase price, first appraisal comes back to 40. So now we're 38k apart, that's a pretty decent gap. And it's worth noting that for duplexes, triplexes, quad plexes, there's not as much supply, and so you're going off of a lot of properties that were sold 16 months ago, rather than more recent sales. And so it becomes a little bit more we need to actually come up with what a fair value is. Yep, so the seller contest the price. Now we have to order a second appraisal, we also have the second inspection going on. So the second inspection comes through, another issue arose. So now that got delayed. Now we have two delays because of both the inspection and the appraisal. Unfortunately, hard to imagine, you have a third inspection and a third appraisal. I'm sorry, a second appraisal comes back to 40. Again, and the third inspection fails. Finally the fourth inspection passes, four points is ready to go. We can insure the property. But the third appraisal only comes back to 15. Or 20. AKA apart. Yep. finally agree with the salary that look you can order for the appraisal. But whatever it comes back at, we're done there. We've been dragged out for two months. Now, if it comes back to 50, we're done 250. It comes back to 78. We're down to 78. For the appraisal finally comes back comes back to 50. We sent on a 250 which is fantastic for us. We got 28 came from top definitely works in your favor there. Yeah, we're still our favorite because like I said, at the end of the day, we were confident what we thought the property was going to earn. So whether it was 250, or 278, we weren't really shaken up about it. But nevertheless, it came back to 50. That was what we ended up closing on it. But the process from start to finish took about three months. And it was originally supposed to be a 30 day close. Yep. And so you would imagine for somebody that's entirely new to the process. I was freaking out. I mean, I, I was so concerned, every time an inspection came back or an appraisal came back and something was wrong. I was so concerned that the seller was gonna want to back out. It was a bit unfortunate, but we managed to finally see it through. And three months later in July, we finally close on that property.

Brian Briscoe 19:09

Nice. Nice, nice deal. So you got through a couple a couple of challenges there, you know, mostly based on price, it turned out in your favor. But let's talk about funding the deal. You know, obviously, I'm assuming you guys had a bank loan, but tell it tell us how you funded the deal.

Henri Wick 19:25

Yeah, so we had a conventional loan on the property I actually took on the loan for this first deal. We ended up putting, I think was 25%. Down we got three and a quarter for our rate, which is pretty good. The equity portion was obviously the trickier part. We needed about 75,000 to fund the equity portion, including the closing costs, which you know, at the age of 24 wasn't something I had on hand or something I was willing to shell out on my own. So this is where I began to lean on my network again. I ended up sending it around to a lot of friends that I had, and found a few traders that I'd worked with at the bank, who had also just gotten their, you know, first decent bonuses, and we're looking to put it to work. And so that's why I ended up being able to get the comment on the first deal, which probably won't be a lot of people's experiences, you know, because those guys are investing 510 1000 Each, it gets a little bit trickier to work with. But for me, it was just it was what I had available. And so I took it, I ran with it. And that's where I found the capital for the first deal.

Brian Briscoe 20:27

All right, so So you assembled, you know, a lot of friends, you know, friends and family, former co workers, right, I guess at the time they they were still co workers, right? Yes, there were still co workers. Yeah, so a couple co workers, you get them all chip in and you know, you raise the $75,000 you can use and how are things gone? So far,

Henri Wick 20:46

things have gone, things are going pretty good. Um, so we released it out very quickly, it took us about two weeks, originally, we were expecting to earn about 1800. And gross, we actually got 2500. There was a nice surprise. Yeah, there was a bit of a rental squeeze at the time, we were trying to lease it, because there was a shortage of availability for the universities nearby to to COVID. And so they were all seeking off campus housing, which made it a great time for us to lease up our units. And we were able to get, you know, significantly more than we expected. So that was a good part. The bad part is there is some maintenance that was left to be done. On primarily the backend are up. That ended up coming up as our first tenant moved in. To give you an example, their common area outside, we had mold shipped, but there was some class from when the previous seller had been moving on says they had replaced the windows. And so we had to pay for a moving company to come in and do that. You know, another issue, some of the electrical outlets were working, or, you know, another one, they had replaced the HVAC, but they replaced them with us HVAC and ended up breaking down at us. So we ran into a number of issues up front. We weren't exactly profitable for the first few months, we're starting to become profitable in the property. Those were some unfortunate surprises that we obviously did not expect. Yeah.

Brian Briscoe 22:09

Yeah. And it's I mean, you learn by experience, you know, it's always, always nice to, you know, raise a little bit more than you need to have,

Henri Wick 22:16

which was our mistake for the first one. We did not do that to have that cover,

Brian Briscoe 22:19

you know, so if you if you need 75,000 To close, you know, your, your raise a little more is the bottom line on that one. So now, we talked a little bit before the show you got you got another two unit on the same street under contract right now. Tell us a little bit about that one.

Henri Wick 22:36

Yes. So that one kind of came up opportunistically, we were looking for our next property. And we've been finding a number of SOCO properties that would say a little bit further outside of Tampa. And then it just so happened that I had been driving to the property one day, and I saw for sale sign on this duplex down the road. Obviously, we were very confident about the area. So I moved very quickly on this one. And by this time, it's worth noting, I had become a real estate agent. So I pursued this deal as the agent as well, um, which is a whole nother experience. But so this one came out, this one was a little bit more expensive. It was listed for 400. It was significantly larger, it was still two units, but one of the two units was a four bed, two bath, and it came with a backyard as well. So that was a little different. We ended up going and we offered, I want to say something around 374. And we settled at 387. And we ended up going with a non traditional lender on this. I wasn't looking to take out another loan under my name. But I was willing to guarantee it, we just decided we want to go a different route here. So that process began, it went pretty, pretty smoothly. In terms of the inspection. There weren't as many issues on that end. But the appraisal was, again, another bumpy ride. So the first appraisal we had done, it came back at 312. Both the seller and I were astounded. Yes, that was a significant difference. So we started looking through the report, and I'm not exactly sure what went wrong with the appraiser. But instead of you know, a four bed, two bath downstairs and a two bed one bath upstairs, the only acknowledged three bedrooms in the entire household, um, which was incorrect, because it also taken pictures of all six bedrooms and acknowledged them as bedroom 1234, etc. Yeah. So we had to submit a rebuttal, which took a little bit of time, and then ended up coming back in our favor. So the reappraise the property came back at 390. That finally was a little bit smoother. The second issue we ran into on this property why we got a little delayed on closing we're going on to about month three, it's been about two and a half months was the the funding was a little bit trickier. So we had raised all the equity for the property, something about 125,000. But later in the game, the lender had kind of come to the decision that they weren't allowing gifts for the funding. We had to do. We had to call an audible and switch from the 30 year loan that we were trying to get to get In a bridge loan, to cover the purchase, and then within a month, we're gonna refinance and under 30 year loan, they're gonna waive origination fees. Because this was a little, a little bit more of an unexpected turn and you know, something that I think they would probably take responsibility for because they've had some time and they've had the documents now. But that was the third issue that came up. And now, you know, fingers crossed, knock on wood, it seems like we're set to close within the next few days.

Brian Briscoe 25:26

All right, and so so you raised once again, 100 125,000, for this one. Tell, tell us about that, you know, did you did you go to your same, you know, network, your phone, coworkers, or who'd you resent, for

Henri Wick 25:40

this one, we ended up going with some some people that work with my father, it was a little bit more money. And we had also decided from the first experience, we didn't like having people involved, you know, with only $5,000. Because we quickly realized the guys that were involved for $5,000, we're taking up just as much time as the guys that were involved for 25 or 30, etc. So we ended up setting a minimum of $25,000 investment. So that's why we had to go to people that had had more time working in their careers had more money saved up, and that just so happened to be some friends of my father. So that was and that was also worth knowing we'll get into it later. But that was the last deal that we kind of built the the family and friends network. That's where you went to for this deal.

Brian Briscoe 26:25

Now, I think you bring up an excellent point, you know, a lot of people you know, when we do syndications, you know, we have a minimum in there. And what you see is part of the reason why we have the minimum, you know, is you want somebody that that has a little bit more capital, you know, if somebody only has $5,000 to invest, you're usually taken there only $5,000 there, yes, they're going to they're going to be on different level as far as their their comfort level with giving up right. $1,000. And it's going to be, there's gonna be a lot of questions. But if somebody can scrape together, you know, $50,000, first of all, they're not scraping it together, right? And they're, they're gonna have a little more investment experience, and it's gonna be better for you better for them to put that minimum in here really is.

Henri Wick 27:11

So you're definitely correct. Because also, like, you know, investing in real estate, just like investing in a house is an emotional experience for everybody. But how emotional that is, is going to vary based on how much capital you actually have. And that's so true for these guys that are putting in these smaller amounts. You know, they're great. I'm forever grateful for them, because, you know, they took a risk on us, and I appreciate that. But you know, you're, you're fielding calls constantly, because they are apparently it is their only $5,000 they have available. So that is why we ended up setting that minimum. And I'm very happy that we have Yeah, all right. So yeah, so yeah, hopefully you guys close out it without a hitch on this one in a, you know, week or two across. Yep, fingers crossed. I'll

Brian Briscoe 27:53

knock on wood right here for you. But alright, so So now let's, let's talk a little bit about the fourplexes that we have coming up with it in the remaining time, and then we'll we'll wrap things up in a nice little bow.

Henri Wick 28:06

Yes, definitely. So for plexes came up, because my brother and I say we want to start shifting in larger properties for a little bit, we thought they would be a 10 to 20 unit property. And we actually got pretty close on a 12 unit property. Outside of downtown. We ended up putting an LOI in on the property, we had a partner that we were going to work with someone who's a little bit more experienced, we'd actually kind of made a naive move and started raising the equity prior to actually going under contract, which, as you can obviously tell based on this conversation is going we didn't go under contract. But nevertheless, that was the closest we got to a larger one. We ended up taking a step back in thinking like okay, you know, we had a lot of luck with the two units, maybe we should just go for like three or four. So that's how we found these four unit properties or phrase four unit property we found it's out in St. Petersburg. It's two separate duplexes on the same parcel. It's a beautiful property. It's a Class B plus property, it was very, very nicely renovated. And I'm very well acquainted with the seller. So I was I was very well versed in what he had put into the property. So I was very confident on the price we ended up going under contract at 680. And it appraised at 700. And this one has been significantly smoother. The only issue we've run into on this one were the roofs were outdated. And so we did actually we had to have the cell replaced the roofs on which was no expense to us. So we're obviously not complaining about the delay there. We have two brand new roofs and that one looks like it's set to close next week. The The other interesting thing on this property worth noting is our lender, who's been fantastic. He's been on top of everything. The only thing that they requested was the property was vacant. And so in order for us to get a 30 year loan upfront, we did need to lease the property prior to close and kind of uniquely the tenant had to move in prior to closing well.

Brian Briscoe 29:56

That sounds tricky because you don't own the property you got to kind of create The owner? Yeah, yes. Hey, Mr. Owner, can you find four tenants? For me, please? Yeah.

Henri Wick 30:07

So it was a very, very weird experience on because kinda kind of what you're getting at, you know, this guy who renovated the property was not the landlord game. And there's obviously a lot of liability and having tenants come in. And it's a lot of effort in finding tenants and placing tenants. So we ended up coming to a written agreement that my brother and I would find the tenants ourselves, they would sign with our company with capital, and we would get a policy on the property that didn't require an inspection that would cover us in the short term. And so we also agreed that we would handle everything in terms of getting the tenants in and handling any any means maintenance issues, if they arose. So he's gonna essentially

Brian Briscoe 30:43

signed a master lease is what that is, yes, yes, he signed a master lease with him. So you could operate the property while you didn't own it, which makes the lender now comfortable to lend your money. And yes, if everything works out, I mean, end of the day, that's beneficial for the seller too. Because if this sale falls through, you know, he's got tenants placed. And, you know, the next buyer now has, you know, a four Plex with tenants in there, which is usually easier to sell. I mean, it as long as long as the tenants are good tenants, it'll be easier to sell. But right, especially

Henri Wick 31:17

when you get into those four units, you know, there you're looking at it more of a business. And we get, we got some very good leases on the property. So if you know where to follow through with just not going to but if it were, I think it would team up to sell it pretty quickly. So he was he was all for it. And you know, like I said, we're kind of chugging to the finish line here. This has been a smooth one thus far. And it looks like we should be closing on this one next week.

Brian Briscoe 31:41

All right. Awesome. Sounds great. And capital raise on this one, you know, what would you guys, how'd you guys come up with the necessary necessary capital to close?

Henri Wick 31:49

Yes. So this home, we got a little bit more formal. Instead of just making calls and kind of giving my spiel, we made a formal offering memorandum. And we started going to, you know, club meetings in the area, just trying to acquaint ourselves with people and making a ton of phone calls to acquaintances with the purpose of having them connect us with people, they knew that we're interested in real estate. So like I said, the past who was the first one where we really had a lot of friends and family involved. On this one, we only had one friend, so to speak, involved in the deal. And then the other people we found have actually been West Point connections. I didn't mention this, but my brother, he's a West Point graduate. And

Brian Briscoe 32:29

I won't surprise what was that? I won't hold that against him.

Henri Wick 32:34

Yeah, so my brother West Point graduate, in the West Point Community, very, very interested in real estate investing. A lot of a lot of military actually, more broadly speaking, very interested in real estate, real estate, investing yourself, one of them. And so that's who we found for, for this property, and we set that $25,000 minimum, we sent out our offering memorandum, we did you know, some some calls, we hadn't speak with our lawyer as needed. And surprisingly, it was a lot smoother than getting friends and family involved, actually. Pleasantly surprised. So that's, that's where we went to on this deal. And, you know, when we get into the next for you to deal, we talked about that one, that one was exclusively all people that we weren't friends and family. So this one kind of gave us that experience that we needed to be able to do this next one.

Brian Briscoe 33:21

So So you've transitioned from friends and family to going and finding other investors? And yes, we're, we're close to out of time. So give it give us a two or three minute overview of that. The the other four Plex you guys are running?

Henri Wick 33:35

Yes. So the final forklifts that we have this is in Tampa heights is about 45 minutes from the St. Petersburg one. Again, this one I found myself says I'm the agent on the deal. Very smooth process, though it was listed 500 We negotiated it down for at went under contract, we use this new lender that, you know, we had a very good experience with on the other four unit. And this one has been going incredibly smooth the company that owned it, very good job and maintain it. So inspection pass right off the bat appraisal came in right at a price that we agreed to. So this one is I think our first one that's going to close without having to sign an extension, which should be sometime in the next two weeks. And it's already fully leased. So it's pretty turnkey, it's a little bit of a different experience. But the investors that we found were all about it, it was a great place for them to park their money and still get some very, very good returns. And so this one has been again, knock on wood, very good experience thus far. So that's our that's our final four unit.

Brian Briscoe 34:29

Awesome. Awesome. So So yeah, so right now, you know, math in public two plus two plus four plus four, you guys are going to be really close to 12 units here. Yep. What are the next? What's next for you?

Henri Wick 34:41

Yep. So our remaining goals for the year, you know, we have we have two months left, we're looking to get to 20 units. I'd spoken with this very large lender that I'm personally acquainted with. And they told me that, you know, when I hit 20 to 25 units, that's when I can really start shifting into the syndicating game. That's what we're trying to do, we're trying to tee ourselves up for that. And that should take us off for 2022. Because in 2022, we are finally looking to do a syndication ourselves, or partner with another group that is doing a syndication finally move out of these residential multi families and get into the bigger league.

Brian Briscoe 35:17

And interestingly enough, and it may seem backwards, it's a lot easier to get a loan for a $2 million property than it is for for $600,000, you know, residential multifamily, because, you know, right now you're operating in twos and fours, which is still considered residential. But yeah, you know, once once you get above the million dollar mark, and you're into the commercial, multifamily realm, you know, things are a little different, you know, the appraisals are excellent, much more negotiable because they're based off of income and expenses. And you know, you don't have to get a whole new appraisal, you can just talk to the appraiser and be like, hey, you know why we think the expenses should be here, instead of there, we think, yeah, income, and it's a conversation, but and lenders are usually, you know, a little more comfortable with the commercial, lending space and giving you better terms on that. But anyway, that said, very much appreciate it. Oh, I almost forgot, you know, a favorite question for this type of episode here. What advice would you give somebody who is, you know, maybe six to 12 months behind where you are? Who's trying to do what you're doing right now?

Henri Wick 36:26

Yeah. So I think I would give two pieces of advice. The first piece is to really lean on your network, like I was saying earlier, in this call, you would be surprised about how much people are willing to help you and how much other people know that you just don't even know they know. So definitely get out there, you know, plays, calls, reach out on LinkedIn, don't be afraid to put yourself out there and that aspect. And then the second thing I would say, and I kind of ran into this problem myself, and I know a lot of people do, you can only do so much research. And so much preparation before, you finally just have to take that leap and go do it. Now you can, you can talk about how you want to be a real estate investor all day, but you're not actually going to be a real estate investor until you invest in a property. So at some point, you just got to pull the trigger.

Brian Briscoe 37:13

You can read 1000 books on it, but you're not going to become a real estate investor until you jump in, you know, so eventually you have to jump in. So, alright, I love it. Well, once again, thank you very much for your time very much appreciate you sharing your your journey thus far and looking forward to some really big things from you in the future. So, personally,

Henri Wick 37:34

Brian, thank you for having me.

Brian Briscoe 37:41

Thank you for listening to the Durbin 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 in 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 favorite podcast app. And we'll see you again next week.

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