First Deal Episode with Lee Yoder

Episode 119 of the Diary of an Apartment Investor Podcast with Lee Yoder, hosted by Brian Briscoe. Transcript by – please forgive any errors.

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Brian Briscoe 0:00

What advice would you give an aspiring investor? That's maybe six to 12 months behind you?

Lee Yoder 0:05

Yes, a 12 months behind me? No, I was just getting in on some small multi families. And I think that I do think that's a great place to start, I think get into multifamily, get a taste for it, you know, maybe you raise a little bit of money, you take something down, I think you got to build some credibility first and just build some experience. So that would be my advice would be to start looking for some of those smaller multi families, you know, get a couple of money partners, get in on one of those, maybe manage it yourself, maybe get a property management company, you get a property management company, you're already building your team, and all that just builds confidence as well. Not just credibility, but you're going to build your own confidence.

Brian Briscoe 0:48

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 122. And part of our first deal series. Today I bring Lee Yoder back on the podcast. He was the aspiring investor in Episode Number 60 with Abel Pacheco, and he's going to talk about how he closed on a 45 unit syndication worth about $2.1 million in Dayton, Ohio. So now enjoy the show. Welcome to the diary apartment investor podcast. I'm your host, Brian briscoe, with four oaks capital very, very excited for today's show. It's another one of our first deal series episodes. And we have Lee Yoder on the line first question for you Lee out of the gate. But let's go back to that previous episode, we're able to ask some questions to able Can you tell us some of the things that you learn from that episode? And how are you able to basically put it in practice?

Lee Yoder 1:55

Yeah, absolutely. I was, you know, great on that episode with you and was able to check out. Thanks for having me back. Brian. Yeah, yeah, learn learn a lot from able and have sense from from hearing. And from you, Brian, you know, I'm kind of, you know, a couple years behind you guys. And so yeah, I remember asking, able, you know, a couple things like I was at the time, you know, I had bought a couple small apartment buildings just to does with like, family and friends. So I was really looking to level up and do my first true apartment syndication. That's what we're gonna get into today. So I was asking Abell, like, about how to build my team how to attract investors, because that was, you know, going to be something new to me, I took down three small apartment buildings, you know, basically, I'm by myself, you know, just with some some close money. So, Abel had some good advice of just like, looking at myself, and what were my strengths? And so in what were my weaknesses, so what would I be looking for in a partner, I kind of had a guy in mind at the time that I was already talking to, and that relationship was a guy that I'd worked with, back in the corporate space, that relationship as Lawson and he did become my partner. So that's some of what Abel had guided me and advised me along those lines of like, making sure this guy was a good partner for me, because that's a, it's a big deal, right? You know, bringing somebody in To me, it's a it's like a marriage for a reason because, you know, you're really married to them in that business. So take some advice there. And then Abel had some really good advice on just how to position yourself as somebody that that others would want to invest with, you know, just just making sure you're very trustworthy, you have a good track record, you do what you're say you're going to do, and kind of position yourself that way to people that might be interested in investing in multifamily. So then they think about doing it with you. So we try to do some things that frankly, that's still something I've got to do a lot of work on Brian

Brian Briscoe 3:35

You know, every everybody's still still working on that you know, everybody's trying to position themselves better and attract more investors you know, so it's always a work in progress and you know, every time you think you're you're at a good spot, you know, get a rude awakening, but it seems seems to be a story of my life. But so Incidentally, for listeners, I'll bring that episode to the top of the queue so if you're listening to this one that the next episode in the stack should be the episode with with Lee and Abel so go ahead give it a listen remind yourself of all the wonderful things that happened that episode. Now one thing that I appreciate about this apartment investing space is so many people that are willing to give back willing to answer questions like that. And Lee you also have a podcast you're able to bring professionals on a lot as well. How has that helped you?

Lee Yoder 4:24

Oh, that's that's helped me a tonne. Brian, I mean, I did that podcast because like you I just I'm really passionate about real estate. I like talking about it. I love teaching others about it because I think it's this like this kind of hidden thing that I'm you know, most people just grow up they don't know about I mean, I certainly didn't and then once you kind of get turned on to it, it's like this white like, why didn't I know about this before? Like, this is like magic went away. I mean, I don't want to over you know, romanticise it but like, this is like a no brainer. Like, why would I invest in this? Why would I do this? Why wouldn't everybody do this? Yeah. And so you want to just tell more people about it. So I love doing the podcast, but yeah, I mean to sell It's been incredible having guys like you on Brian, you know, people that frankly are like, you know, way ahead of me and like, I just feel like I don't have enough going on to like command an hour of your time. But because I have a podcast and like because it you know, it gives you a chance to come on and talk and kind of market yourself like, I've been able to have some some awesome guests on that I've learned a tonne from so I know my listeners are because the guests that I have on, just have a lot of experience just really when after, but at the same time, you know, guys like you like are relatable so people can listen at and go. I mean, Ryan didn't seem to do anything too crazy, like a Marine, you know, moved around and was like, Hey, you know, I see house prices go on and up and down. I want to I want to get into this a little bit. So I'm going to jump in here. And so yeah, I haven't guys on like, that I've learned a tonne from I think my listeners have as well. So

Brian Briscoe 5:45

yeah, you know, I've noticed the same thing with my podcast, I brought up, I brought a lot of heavy hitters on there, and you're able to learn a whole bunch. And I think what you said is absolutely true. You know, I can't call someone who has, you know, 10,000 units under their belt and say, Hey, do you have an hour that I can pick your bread, you know, but if I say, Hey, can you come on podcast for an hour? That's exactly what happens is I can sit nav, ask whatever question I want, and get the answer. And quite frankly, a lot of the expert episodes, you know, when the aspiring investors asking questions, you're like, Oh, yeah, that's, that's a good idea to take notes. But Alright, so let's let's, let's get back to you. We haven't talked a lot about your background and history. So let's, let's talk about your background and history. And we'll jump right into the deal. And,

Lee Yoder 6:29

yeah, absolutely. So I'm trying to give you the quick version, but I'm a physical therapist by trade. So I had to go to grad school and all that come out. Finally, as a physical therapist, you know, who's doing the outpatient clinic thing, and we're, you know, kind of open, open later, and my wife and I were starting young family. So I didn't like having to work till seven 730, you know, a few nights a week. So I started looking into doing home health, physical therapy, where I drive to people's homes and treat mostly older people that, you know, can't get out of their home to get into the outpatient clinic. And the schedule of that was awesome. I mean, my wife loved it. Like I said, we were starting young family. So I got to make my own schedule. Frankly, I was like, probably barely working 40 hours a week and making like plenty of money for our lifestyle. The problem was, I mean, so you know, just some people would be like, dude, just do that for the rest of your life. But

Brian Briscoe 7:12

that's right.

Lee Yoder 7:13

Yeah. Right. I mean, in a way it was, but just God created me to want something different. Because to me, it was like, so boring. I mean, I felt like I was like working at a factory, like putting nuts and bolts together just the same thing. Really, it just wasn't difficult. It wasn't challenging. It wasn't changing. So in the whole time, random, like, listen to podcasts like yours, and certainly get kind of an itch to do something different, although I wasn't turned on to real estate yet. So anyway, that company that I was with asked me to come in and meet that clinical director, so I jumped at that opportunity. And over the next like six months, I transitioned from doing all physical therapy to doing half to doing none, and I was in the office. So now I'm really, you know, really, basically, I have a corporate job, I was kind of like a director of operations, slash clinical director. So I was managing, you know, 75 therapists between Cincinnati, Columbus, and Dayton, Ohio, travelling, doing all the stuff doing sales. And now I'm like the opposite. So now, I've got kind of that corporate job. That's not exactly like not really conducive to raising a family, especially with young kids. And wife's, you know, stay at home. So she's like, in it all the time. And like, ready for someone to come on? Oh, yeah. No, we have her and I will, and I want to be home. Like when you have young kids, you know, you want to be home with them.

Brian Briscoe 8:24

And I was only young once and I know. So absolutely.

Lee Yoder 8:28

And my wife and I were always, you know, the other couples pouring that into us. So I knew that and it's my job was fun and exciting and challenging. It's like what I wanted out of my job while I was there, I was enjoying it. But I just didn't enjoy the amount of time I put it and just the effort and energy to because even when I was home, it was kind of like I still had to kind of be on you know, so I just started like, Okay, well, what else is there like, I feel like I've had both extremes, like a great job for the family, but I'm bored out of my mind and not fulfilled, and then a job were unfulfilled and challenged, but it's not good for my family. And so now then a buddy of mine that I worked with that I was building this division with handing me a book, and it was a real estate book. And it wasn't that good at one. But like it kind of got me down that rabbit hole. I read Rich Dad, Poor Dad, you know what, just go down that and I'm like, Okay, I think this might be my ticket. And I eventually decided, what if I left and I had, I'll say this too, because I feel like this is relevant today with so many people working at home, a buddy of mine who was in real estate full time, he was just doing small rentals and managing themselves. He said, Lee, could you do your job from home? Could you get more flexibility with your job? And for me, the answer was no. And I just say that I think it's relevant today, Brian, because so many people are working from home now that never had before. Right? And it does kind of give you some flexibility. So when he said that, I said now I can't do my job like that. But I started think well, what if I went back to home health physical therapy, okay, and I have all this flexibility and I'm bored, but then I add in real estate. So that's what I did. And I did that in the fall of 2016. So about four and a half years ago, and about a year of just doing that work, listening to podcasts, you know, studying up and stuff like that. I started You know, getting ready for physical or get ready for real estate. Then I flipped the house flip the duplex. And I was like doing one one deal a year. And then in the fall of 2019, kind of the summer leading up to that, I bought my first small multifamily about 16 unit. About a month and a half later, I bought an eight unit. But a month and a half later, I bought a 10 unit. And then I took like the next year into the fall of 2020. Basically just bring those properties around, I was looking for others at the time, and that whole year, but it just couldn't find anything that made sense. And then I've actually sold off a couple of those to give me like a big cushion, a big runway that pays my family and I like our expenses for the next few years, I was able to just to have enough equity in those properties did well enough, we added a tonne of value put a tonne of work into them. And so I've got this big cushion now. So I actually left my physical therapy job in December of 2020 and jumped into real estate full time. And then we finally the deal we're gonna talk about today was my first true apartment syndication that we just closed in February.

Brian Briscoe 10:58

Nice. Nice. And yeah, I mean, having having done a lot before, you know, I should probably prior to the show a couple of things about it. You know, having that experience in hand, probably helped you out significantly in several areas, I think I think the loan is definitely one, but we'll talk about that in a second. But you know, a couple things that definitely resonate, I mean, you're able to basically hustle, you know, and turn your side hustle into something that was producing income. And you know, now you have a lot more flexibility you have that runway, that's something that I think a lot of people should listen to, you know, I've basically done the same thing. I've been active duty for the last 20 years, I started, you know, trying to find my first apartment building three years ago, and all the money that I've earned from that business has done the same thing for me, it's created a runway, so, you know, 127 days from now, when I when I actually retire, you know, I'll be able to have that that runway to be able to, you know, pay all the bills for a year or two, and continue to build the business, you know, so Yep, definitely, definitely something that I think a lot of people should aspire to. Some people are able to quit their full time job earlier. Some people have to wait a little later, but it's possible to do both. Yeah. And I think I think you're a good example of how to do that. So yeah, let's let's start talking about the deal. You talked about your business partner being your former coworker. So let's talk about how you guys first of all found the first deal. Are this this 45 unit and my understanding 2028 unit into a plexus. Is that enough? 2929? Yes. Okay. Yep. All right.

Lee Yoder 12:35

Yeah. So that we found that one just through a friend that zom that another investor in in Dayton, Ohio, I'm a guy that I think I first met him, Brian on bigger pockets, and we just kind of hit it off, we end up talking on the phone, just like kind of share notes. Just Hey, you know, we're both investors, you know, in Dayton, and like, you know, we should just work together and I had him on my podcast and, and just really got to like the guy on and he's, he's about 175 doors in himself in Dayton. And they manage them themselves. He does some other stuff, too. But he just very plugged into the market. And then just a couple months ago, he he became a broker. So he wanted to get his broker's licence. So he, he joined a brokerage there in Dayton, and kind of does his own thing. He just, he has access to a lot of deals, and he'll take them down himself, he just likes to really, really heavy value add. And he came and someone brought this deal to him this 45 units where it just didn't have enough meat on the bone for him. He likes to buy really distressed properties. So you don't know me and kind of what we were looking for. He just he called me up and said, Hey, I think I got that property that you're looking for. He told me a little bit about it. And I said, Yeah, I think that is definitely what we're looking for. And so you know, we come out and look at it and decided that was so yeah, just found it through through a broker, but more of like another investor, Brian, honestly, I think of him more as an investor. And it was just an investment that he just didn't wanna take on himself, because it's not not his type of product that he likes.

Brian Briscoe 13:55

I think there's, there's a couple of key points there. You know, number one, you found him on bigger pockets, and you reached out to him, you know, so you took some action, and then you spent some time developing the relationship. Right. And I think that that's a part that a lot of people skip over, you know, a lot of people just, you know, hey, cold call brokers, and wonder why they're not getting sent deals after, you know, one three minute phone call. Right. So right. I think the route you went is the better route for the long term. You know, it's it may not be, you know, as simple and quick as potentially, hey, I'm going to call it doesn't brokers. And maybe I, you know, it's been an hour worth of work and start getting some deals across my desk. Yeah, you developed a relationship and that relationship turned into something that he knew what you were looking for. And when he found something that fits your criteria, you pick up the phone calls you, you know, and just like Hey, Lee, I got this deal. What do you think? Right? Yep. And my understanding is, you guys were the only ones in the deal from the beginning, right?

Lee Yoder 14:53

Yeah, absolutely. It was a deal that the sellers had marketed like a year before. I'd seen it before and And just kind of wasn't ready to take down at the time. But they got it under contract and was one of those that like, you know, I think it's one of those were the buyer that had it under contract was like looking to get it under contract and then kind of beat the sellers up as they went along and retrain and stuff. And they got right down to closing, like very close to closing and and really didn't have their finances together. I mean, they weren't ever close on it. So the sellers being burned, did not want to list it again. Yeah, so it was not listed. They didn't want it listed. And they really wanted to vet the potential buyer and only work with one one buyer that ended up being us.

Brian Briscoe 15:33

Yeah, yeah, you know, and sellers, sellers, there's two different competing interests with a lot of sellers. Obviously, they want to maximise their profit, but they also want to minimise the pain. If you can come forth with an offer that does both, you know, if you're a very credible, you have all the resources, you have everything in place to be a viable buyer, you know, you can present an offer that puts $1 amount in front of them that they're okay with. But if you can also give them a way to minimise the pain, and yes, the stress of the transaction a lot of times that will win the deal.

Lee Yoder 16:07

Yeah. And just give them the confidence that you're not going to waste two months of your time. Yeah, and then may not close. Like that's, I mean, we were able to say on that one. And we still are. And I hope we always get to, like whenever I've gotten a property under contract, I've closed every time. And so we told him that like, we there's no way we're not going to close. And no, we're not, we're not big into re trading. And this is going to close. And I hope that we were able to continue that because that means a lot to them to know that. Alright, if we go down this road with you, it's gonna be a big waste of time, because it was the first time and no for them. And yeah, they didn't want to do that, again.

Brian Briscoe 16:40

Interestingly, we dropped out of one contract on a 40 unit property, and then a year later, we ended up buying it, you know, so there were a lot of financial issues on this particular property, we were willing to stay in a seller's port, but their their occupancy went from 90% to 75%. During the due diligence, period, you know, so it's, you know, there's not a whole lot that you can do with that as a buyer, you're like, Hey, I was gonna get a Friday. Now, I can't say the deal totally changed. Yeah, but you're later, you know, they, they fixed everything, their occupancy was up high for several months, even throughout COVID. And then, you know, we jump back on downside for us is I think we paid, you know, 15% more than our original contract price. But you know, it is what it is. But I think that's absolutely crucial. You know, you want to have that reputation of being the group that can close every time. Right? You don't want to go in you don't want to go in with the reputation of the retreaters you the guys who always retrade Yeah, the brokers are going to get to know you. And if you're the guy that re trades every time, when they come to the seller with the offer, they're like, Hey, are you prepared for a retreat with these guys? Right, so so let's let's talk about the business plan going in, and then we can hit any challenges you guys had during closing?

Lee Yoder 17:58

Sure. So typically, Brian, like in this market, and I were looking for some pretty heavy value ads, because it just seems like sometimes that's that's the best way to get a deal or you know, anything that that's closer to turnkey, anything that's that's already you know, very well stabilised is just very expensive. But with this one, I think it's just because they wanted an ease of sale to your point like yeah, we want to good price, but like, we just want to be able to close on the one and easy sale process. So we got a good deal on it, even though it really was stabilised high occupancy, you know, I 95% occupancy, they had taken care of all the capex all three buildings had new roofs, all three buildings had all new windows, all three buildings are all brick. So those three things right there, I just love and there's there's, you know, slow patching roofs. So just love that that product there on the west side of Dayton, which is not the good side of Dayton. But the 29 unit building, the biggest one is really more like downtown. I mean, it's just west of downtown, but it's like an extension of downtown, and a nice little pocket. Nice area. And and so really, it was just a matter of coming in. And the couple that owned that one guy, the guy was local, but he wasn't involved really at all. He was active. The lady partner, she lived in Kansas City, and was very involved. I mean, she had a lady that was working using one of the studios as an office, actually, that we've already converted and having her work part time. But I mean, she knew every single resident knew everything about him, like just very involved. So our plan was really more of a management play. And the value add in that way of like managing more professionally and so not having residents that frequently we're getting behind a random and she had, I think either five or six, I think was six residents that were over $1,000 behind on rent, and a couple of brown 3000. And she was working with them, but like working with them on getting some of the government assistance and she's been successful. And that's great. I think that's awesome to get that but like, you still got to pay until I get that you know, and she just yeah, just didn't handle you know, really manage it professionally and just missing out on some calls, but they were doing rubs. I'm doing really well with that. So yeah, I'd really Just a management increasing rent slowly, kind of running the building more professionally, that that was the value add on this property.

Brian Briscoe 20:06

Nice. Nice. Yeah. And I mean, a lot of solo managers they do that they get to know their tenants really well. And, you know, it's one of those fine lines that, you know, once you have a good relationship with tenants, you know, it's really easy for them to talk into, you tell them a sob story. And okay, yeah, you know, maybe you can skip rent this month, but the end of the day, you got to run it like a business, you know, especially if you're bringing other investors and you're your number one priority is to the investors. You know, obviously, you got to treat the tenants. Well, you know, I'm not not saying that, but you got to run it like a business. And when you purchase something from somebody who's not running it, like a business, there's a lot of little efficiencies you can pick up there. Yeah, absolutely. So let's talk about the the loan really quickly. And then and then we can talk about, you know, other other issues with clothing that you may or may have encountered. Sure,

Lee Yoder 20:59

the loan, we just got through a small bank that this just wasn't quite a big enough deal, Brian to get like agency debt, in the small balance spread ages just wasn't quite big enough. Also the properties, the buildings not being contiguous, that throws a wrench into it. So we just went to a local credit union, they only loan and like, you know, this, this general area. And so they're like properties like this. And, yeah, got it got a really nice, you know, 25 year and five year fixed at 3.75% interest, just kind of kind of a simple, basic loan, just from a small credit union. Yeah, there were, there were some issues getting, you know, you gotta want to get in that. I mean, for us, it was just that this was a big step up for us. And that's how the bank solid, you know, we did have some experience. But the experience I had, we'd never, the biggest purchase price up to this point was 350,000. Because we bought some cheap, you know, even our 16 unit, that's what we paid for 16, it was 350. And because it was just just a very cheap property, and in a rural area, so this was a big step up for us. So the bank, you know, felt like they were taken a little bit of a leap of faith with us. So that was some of the challenge of getting because we worked with a mortgage broker that I've worked with in the past, and they had no trouble getting us loans on these real small multi families. And and just and then where we were just doing joint ventures where everybody was signing on the loan, but doing getting a loan for a you know, much bigger property, you know, $1.68 million loan now, instead of, you know, just a couple $100,000 loan, and then bringing limited partners on that are not signing on the loan. That's the that's the thing, my partner and I kept 50% of the equity, but now only 50% is signing on the loan versus 100%. The ones before so that was definitely more challenging to get banks to want to lend to us on this. Yeah,

Brian Briscoe 22:37

yeah, that's banks tend to be the gatekeepers on this, I mean, almost as much or more than the brokers A lot of times, because, you know, if they're lending, you know, $1.6 million, in this case, you know, they're going to double and triple check, you know, what the property looks like, and what the syndication group looks like. And you know, you have to meet their standards to be able to make it in this business. But one good thing you had going for you is at least you have some commercial loan experience of, and that's typically something that a lot of banks are looking for, once you get into that seven figure loan amount, if they want somebody with experience, you know, a lot of people can get in and get into a $300,000 loan based off their income only, absolutely, and buy a commercial property. But you know, you have to have that experience to start getting to the bigger, bigger properties. And I think the way you did it, you know, you're just taking a step up, you know, you went from, you know, roughly 40 total units of multifamily to 45. All together. It's a step up instead of, you know, jumping into a whole new field. But yeah. Alright, so one other hitches what lessons learned Did you have during closing and getting this this ball across the goal line, so to speak?

Lee Yoder 23:51

Well, this was our first syndication, like I said, so you know, working with syndication attorneys getting all that paperwork. I mean, that was a lot. Because we were working with some of the same investors that had partnered with me on the previous deals, some new ones, but I think everybody, maybe everybody, but one, this was their first syndication that they'd invested in. So it was new for them. And it was new for me. So learning all the syndication. Like I mean, they sent me three documents, it was a total 124 pages, I read through all that, to really make sure I understood it cuz I didn't like, deeply understand. I didn't know, hey, what if somebody wants to get out? Like, what if they want to sell their show? I didn't know how that went. So, you know, when an investor is like, hey, like, I understand, like, You're telling me this is like a five to seven year commitment, but like, whatever, two years, yeah, whatever. Right. And I'm, I don't know, you know, but I need to know that, you know, like, as a as a sponsor, it's like, I wanna be able to answer every question, or at least come close. I mean, sure that, you know, we saw the attorneys like you get them as part of the deal. Like you get them for six months. And so hey, we can go ask them questions, but like, if I'm going to instil confidence in the limited partners, I need to know more almost every answer, you know, So reading through those, it really did help. But um, that was it was just a learning experience for me. And it was a lot to get through. I mean, you can't just collect the money right away, you got to get everybody signed this, you know, getting people to sign different documents, getting out to them, we put out a zoom video to walk through the documents with them. So it was, you know, there's a lot more that went into this, then then the other ones, the other ones that was like, I went to a couple family members that were like, Lee, I'm betting on you not the deal. So you know, here's the money. Yeah. And just, and they're willing to sign the loan, we just take it down. And there's nothing to be said for that. But like, we want to go a little bit bigger, be a little professional. And so there was a big learning curve with all that.

Brian Briscoe 25:36

Yeah, you know, and once you do a syndication and people are not signing on the loan, you know, all of a sudden started looking and feeling like you're selling securities and the SEC gets involved. And, you know, it raises it to a different level, you know, so if you're, if you're at a point where you're doing things with everybody signing on the loan, you can get away with a little bit more, you know, no ppm, you may not need an attorney, you should have an operating agreement that explains all that stuff, right? Yep. Yeah. As soon as you start syndicating that kind of raises the stakes a little bit where now you need that syndication attorney, and, you know, you're actually putting expose yourself to a lot of risk if you don't. Alright, so let's talk briefly about, you know, how it's gone since you guys purchased it. And I think it's been about a month now. Right?

Lee Yoder 26:23

Yeah, just a little bit over a month. So we did, just, I guess about two weeks ago, we collected? Well, we got our first report from the property management company. So we collected on the first of March and March 10, we get our first report, and it went really well. I mean, that's always like, you're nervous, like, Hey, we know what the physical occupancy is going. what's the what's the economic occupancy going to be like, right? I mean, we know what the sellers told us, but like, you just never know until rent actually comes in, so that you're kind of holding your breath until you're actually able to, like, collect rent that first month. But it went really well. We're working with a new property management company, we were pretty happy with our old one, I would still recommend our old property management company people, but we end up meeting some guys that are investors, and they bought a property management company and are really looking to scale and just felt like they were on the same trajectory as us. And they're just they're they're hustlers are getting started. They're very involved in the business, it just felt like they were gonna give us another level of like, you know, seeing them property as an investment, because they're investors and really get into it. And we've been really happy with them so far. Like I mentioned to the previous owners, they had a part time manager that they use one of the studios is an office that's already been turned into a unit. They're working on getting out rented out right now that they're doing some showings. We had one vacancy that's already been filled. They've got a couple I mentioned in the previous owner was letting some people not pay even though they had jobs, stuff like that. And, and so we've kind of come in and said, you know, no, if you pay, you're gonna leave. And we've had a couple people just kind of like a mutual agreement? Well, I'll tell you one nice thing Brian was she had a lot of people a month a month leases. And when you come in, that's actually kind of nice, because then you got a trial period, right? Like, hey, if you don't work out, it's not a matter of trying to evict, it's just we're not going to renew your lease. So we've got about we've got two people right now, for sure that we're not going to renew their lease. And so just kind of let them let them go. And so we'll have a couple more vacancies. Um, we were planning on having 10% vacancy this first year, which would be four and a half units. And, and I don't think we're going to come anywhere close to that, because they're, they're doing a good job. But we are going to have some some turnover here early on. But yeah, the rent came in really well, looking at what we're going to be able to pay our investors, we're really excited, we're gonna go ahead and pay out right now, because we're just gonna keep like, on the calendar year, like a January, February, March was the first quarter, we only collected rent one of those months, you know, for March. So we're only gonna be able to pay for one month, but we're gonna go ahead and pay just so we can have that touch point and kind of show. Yeah, so the cash flow is looking great so far. So we're really excited, really excited that we're coming in, and just cash flowing right away.

Brian Briscoe 28:40

All right, gratulations. And that and that, that single unit, I mean, 29, there's no reason you have to have on site management. I mean, it does not support on site management. So financially, that's a smart move to turn that into a rentable apartment again, and I put a paying tenant in there because it just doesn't support it. Usually, the trip point line in the sand is usually somewhere around 100 units video, what Metro you're in. But once once you're on the 100 unit mark, you can actually start you know, it makes financial sense to put that office right but right, good move on that one. All right. So you know, a couple of quick questions for you What's next for you?

Lee Yoder 29:21

Yeah, next for us, Brian is just more of the same. We're just really excited to to partner with you know, other investors that have some capital that want to maybe diversify the stock market or you know, just looking for a different investment, maybe invest for the first time and and want to get in on property like this. And my partner and I are just looking for more properties just like this. We feel like we found a kind of nice niche. We're looking for 20 to 80 unit apartment buildings where we're not competing with with kind of some of the big money so we can get in a good cap rate. And just something we can take down this one. We just needed seven investors. You know, probably in the future ones. We're looking for closer to 15 to 20 on each one yet. We're hoping to continue You know, you're not we're talking about Brian now that we have closes now that we are technically syndicators now, right and yeah, it's gonna be so much easier to, to get a broker's attention to think like, Oh, you guys just close out 45 unit? Why couldn't you close this 48 unit? Why can you close a 60 unit? And then the banks the same way, you know, we got a different bank? Oh, you know, you got a loan on that one. That's going really well, you know, we can kind of show him some numbers. Okay, we'll give you a loan on this next one. Um, yeah, so I think we're just hoping we can kind of build up some momentum and continue buying more properties just like this one.

Brian Briscoe 30:29

Yeah. Nice. Nice, amazing. Alright, so here's my favourite question of the whole thing, save the best for last. But what advice would you give an aspiring investor, that's maybe six to 12 months behind you?

Lee Yoder 30:40

Yes, a 12 months behind me. You know, I was just getting in on some small multi families. And I think that I do think that's a great place to start. I mean, the first one I own was a duplex. So depending you know, how much you have, how much experience you have, I think get into multifamily, get a taste for it, you know, maybe you raise a little bit of money, you take something down, maybe you manage it yourself, but maybe you get I managed the duplex myself. But as soon as I got a 16 unit, I didn't want to manage it, I got a property manager right away. But you just start to your point, Brian, like, if you say, hey, my end goal, which this is, for me, I want to own 100 plus unit apartment buildings. Unless you're going to partner with somebody like unless you know, somebody like you, Ryan says, Hey, we're looking for another, you know, add another partner, another GP, and you know, somebody comes into partner, unless you're going to do that, I think you got to build some credibility first and just build some experience. So that would be my advice would be to start looking for some of those smaller multi families, you know, get a couple money partners, get in on one of those, maybe manage it yourself, maybe get a property management company, you get a property management company, you're already building your team. And all that just builds confidence as well, not just credibility, but you're going to build your own confidence. And that's what it was for me, like once I owned a duplex. And I you know, and I started talking to property management companies, it was like, Okay, I'll get the 16 unit. And once I had a property management company that I trusted, that gave me so much confidence, because I felt like Well, I'm not the one managing the property anyway, all I got to do is find, find a new one, by raising money Exactly, exactly. Find the deal, find the money and then let them take over. And I mean, it as long as you find a good one, now you've got to manage the manager. So I think if you start small and start building up those pieces, you build a team, you gain confidence on a small scale, and then you can just scale it from there.

Brian Briscoe 32:22

Now I think there there's competing, you know, ideologies out there, there's a lot of people that say, if you want to be in the 100 plus unit space, you might as well just start in 100 plus unit space. And you you've given us a good example of the other way to do it, which I think is perfectly viable in a lot of ways. It's, you know, you start with a duplex and then you get the eight and the 16 and the 20 you put those you string along a couple of smaller multi families together. And then from that you jump into a you know, $2.1 million 45 unit apartment building. And in short order, you can still hit that 100 unit mark, you know, I wouldn't be surprised to hear you, you know, six months to a year from now, you know, closing on a 121 40 you know, maybe a 200 unit apartment building. Yeah, you know, going the route you went so two different routes to get to the same spot. I don't think either is right or wrong, but it definitely worked. It has worked for you so far. So good on you, and congratulations for your success. I hope you continue to have success. So flashback to the previous conversation between you and Abel, you know, you're trimming into the five talent guy, you know, from the New Testament parable, you know, so

Lee Yoder 33:34

the goal in life, I mean, certainly in life as well. But yeah, absolutely apartment building stuff. Yeah,

Brian Briscoe 33:40

yeah. And that's that's the name of April's company and his podcast, five talents. So Alright, so how can our listeners learn more about you?

Lee Yoder 33:48

Yeah, well, yeah, I'm definitely a kindred soul to Abel we call our threefold that's that's from a verse in Ecclesiastes is so similar, you know, biblical reference there, but threefold real estate investing, as our company. We've got a website at three fold our You can find us there. Like you mentioned before, Brian, I've got the podcast three for real estate investing, doing a similar thing to you having some, some people want to spread their knowledge, their experience, you know, their advice to others. So we're doing that on the podcast, we've got a little ebook that we're really excited about. It's called five steps to passive income for the full time dad that's on our website. So you jump on the website, you can get that. Just really excited about that, Brian, because we really believe that real estate is a great way and you can do it in so many different ways. But even if you just jump in on a deal, like like the ones you guys have, Brian, you can start to build some passive income that can really open up some opportunities and build in you know, we kind of talked about having a cushion like it can just do a lot of things for your family. You can put your money to work for you. I think a lot of dads and moms as well. You know, my partner and I both dads so we kind of target that niche but a lot of moms and dads are looking to provide for their family financially, obviously, but they also want to have some time at home. So When you when you decide well, like I want to provide even more, you know, one way to do that is to take a take a promotion to try to do more to try to work more well, so you're going to provide more financially, but now you're spending more time away from home. And so I really believe that that if you can save some money if you can invest that money well, and I think, you know, multifamily real estate is the way to do that. Now you can increase your time or your money without increasing your time. Because now your money is working for your money is the one that's that's providing a passive return. So that's something we're really passionate about. We'd love to educate more people about that, and maybe partner with people in that way.

Brian Briscoe 35:32

Yeah. And really, I mean, the key is to disassociate the amount of money you bring in with the time you spend, you know, and that's what this allows you to do. You can passively invest, and you're gonna be earning returns whether you go to work in the morning or not, you know, so yep. All right. So hey, thanks. Thanks so much for coming back on the podcast, you know, adding to the, you know, the very short but growing list of aspiring investors that have turned into experienced investors. So, you know, Congratulations once again. And yeah, I look forward to a lot more from you in the future. Yeah. Thanks, Brian. Thank you for listening to the dialogue 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, tap, 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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