The Capital Raising Process with Daniel Odabashian and Jahlen Brown

Episode 218 of the Diary of an Apartment Investor Podcast with Daniel Odabashian and Jahlen Brown, hosted by Brian Briscoe. Transcript by – please forgive any errors.

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Brian Briscoe 0:00

We got Dan on the line, what do you want to ask

Jahlen Brown 0:02

him? So would you be able to share? What's sort of your process for raising money for deals?

Daniel Odabashian 0:08

Yeah, I think the best way to start is to just talk to your your sphere of influence, as people like to call it right, your friends and family. And that's a huge thing because they already have that first level of trust with you. So really, you know, starting with that friends and family sphere of influence, and you'd be surprised how many if you're successful, they're going to tell their friends and their colleagues and say, hey Besa Jalen because, you know, I just made 20%. I'm making 20% Return on this deal. It's unbelievable.

Brian Briscoe 0:46

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 fields 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 direct apartment investor podcast. I'm your host, Brian Briscoe with aurochs capital got another great show lined up for everybody today. It's another one of our Ask the Expert episodes. Once again, two great people on the line with us. We've got a guy with a ton of experience in this and other other related businesses. Dan Oh Sebastian and a very motivated and energetic aspiring investor, Jaylen brown. So bios for both these, these gentlemen are going to be in the in the show notes. So if you want to learn more about them and their bios, check out the show notes. But you know, that said, Dan, you're going to be in the hot seat first. So welcome to the show.

Daniel Odabashian 1:44

Alright, thanks for having me, Brian.

Brian Briscoe 1:45

Yeah, thanks for taking time to being on I appreciate it. So let's start talking about you tell us a little bit about yourself, your background and what led you into multifamily?

Daniel Odabashian 1:56

Sure, yeah, it's somewhat of an interesting story. I've been told, I graduated from NYU in 2005, with a degree in finance, accounting, and, you know, did some various internships and such on Wall Street, I really thought that's the path I wanted to go down. And it turned out, it wasn't quite as exciting as I thought it was going to be not not like the movies was a little boring, to be honest, in you know, in my mind, so, you know, at that point in time, my poker was was booming pretty hard. And I had gotten into that, you know, was dabbling in that a little bit, and was actually able to earn some significant money, and forego, you know, jumping into a typical day job. So decided, you know, I knew that was never really going to be like a career, right? I was 22, and didn't have many responsibilities. And so, you know, decided to make a run at it, and did quite well, you know, well enough to start looking at, you know, three, four or five years down the road, I started thinking and looking to ways to invest the money I was making, in a business of some sort. And, you know, I've always had an entrepreneurial entrepreneurial mindset, and always had a little interest in real estate as well. So, so, you know, kind of started running some models with my finance background and on, you know, investment properties. And at that time, you know, in our market up here in Albany, New York Capital Region, you know, you could you could find some, what appeared to be very profitable deals, and so, decided to buy, you know, a few, a couple, two families, three to be exact, and I lived in one and, you know, was had was still, you know, making money playing poker, but the industry was, was declining due to government regulation, and a few other factors. So, I was managing those properties myself, and enjoyed it somewhat, you know, got out the house doing things around the properties and, you know, started to realize that I wanted to scale up my own a large investment portfolio. So, then also realize that, well, I can't do all the management work if I want to own 100 units, right, or even 50 units. So I started a property management company and started taking on some third party clients, and basically grew that company in parallel with my investment portfolio over the course of five, you know, five to seven years and you know, we currently manage about 300 units about a third of which I have ownership interest in and actually expanded the company into a vertically integrated, you know, situation with a brokerage and and a management company and also an acquisition arm so, you know, we have a team that's that's working on raising capital for acquisitions and doing real estate syndications. Now and You know, the the larger deals I did coming up were weren't quite your typical syndication there were technically jayvees That that were but, you know, friends and family capital that invested with me that that, you know, pass up partners but not in the legal sense. So, you know, over the last couple years, we've we've started growing the the capital raising side a syndication side into like a more formal acquisition side. So you know, that's where we stand today. It's it's a, it's fun, it's a lot, you know, there's a lot going on between three separate things. So yeah, and

Brian Briscoe 5:35

you got your hands hands into several different aspects of the business. And I'm assuming there's a lot of synergies there, you know, you you have your own management company, you know, managing your assets plus other people's assets. You know, I think there there's a lot of a lot of wisdom there. And quite frankly, one of our, you know, one of the things that I think we've had the most difficulty with was just the management, you know, of the properties, the professional property management, but, you know, you I mean, you basically control both arms of that, which, you know, like I said, I think, you know, really smart way of doing it.

Daniel Odabashian 6:07

Yeah, I mean, it's been a huge selling point, for a potential passive investor. That's one of the first questions we get on an apartment deal, you know, who's managing these properties? Well, it's our guys like, um, you know, we have little mid level management, we have, you know, maintenance people, we have leasing agents, we have everything. So, everything's all under our hood. We don't, we're accountable for everything. And that's a big, you know, in an investor's mind, I feel like, that's a big, you know, positive. So,

Brian Briscoe 6:35

yeah, yeah, it definitely, definitely is, I mean, if you've got the management company already set up, you're you're controlling, you know, you have a lot more control over the investment property, or the investment opportunity itself, you know, because you're, you're, you're able to not just manage the managers, you know, from a, you know, client relationship, but you're you're doing, you know, you're there, they're essentially your employees on both sides of the fence. So that said, just just for the listeners, you know, we've had one of your partners on the show, you know, not too long ago. When did you and Matt come together?

Daniel Odabashian 7:08

That was about two so Matt was basically the key person I partnered with to start the formal capital raising indication arm of the company. So that was about 18 months ago, two years ago. Right around? Yeah, right before the pandemic, so

Brian Briscoe 7:27

yeah, yeah. And for for listeners, shake, you know, I'm gonna throw a link to the episode with Matt, whiter more in the comments. He's also on the Ask the Expert episode. And, yeah, really, really smart guy. So you know, very much appreciate you coming on the show, too. So, um, so let's, let's talk specifically about, you know, one of the deals that you guys have done, you know, pick, like I said, like I said, before we recorded you know, pick your, your first pick your favorite pick your most recent, you know, whichever one you want to talk about. Yeah, I

Daniel Odabashian 7:57

mean, maybe I'll, I'll pick what I think is the most interesting, you know, I was lucky enough, along the way of building up the management company and acquiring active cash flowing apartment, I was lucky enough to get into some some development projects of new construction, adaptive reuse construction. You know, we did, we've done some smaller things, but the biggest one was, we converted a 60,000 square foot old brewery in downtown Albany, that was operating as a oil and gas distribution company for the last 50 years. And 75 market rate luxury apartments, which also had a micro unit elements involved into it, which is, which is pretty, you know, new to the Capital Region area, I know, some larger, larger metro areas. They've been doing it for years. But so, you know, pretty interesting on a lot of levels, there was we syndicated four and a half million dollars worth of tax credits on that deal, to buy, you know, the bulk of the equity and learned a lot. You know, I don't want to I don't typically like to dive in headfirst on things because you don't know how shallow the water is. But I would say that one that was headfirst dive into the shallow end and luckily, you know, was able to, to not break anything. Yeah, I didn't have a lot of prior experience in construction. I didn't have I knew nothing about historic tax credits. And, you know, I could do enough research on micro units. I know that that they are going to be a hit and miss air. Yes.

Brian Briscoe 9:34

Oh, no, no, I've heard a lot about the micro units. You know, what, what are the square footage of your micro units?

Daniel Odabashian 9:41

Yeah, so ours were you know, we actually had three different types of unit and the smallest ones ranged from like, I think the smallest one was high to like 275 square feet. And and those went up to about 404 25. And then we had another level of Like, you know, which wouldn't typically be considered a micro unit, and like the five, you know, mid five to 700 square foot range, and then we had some, you know, a few bigger units that were, you know, eight 900 square feet. So, yeah, and probably, you know, coincidentally, the micro units were the first ones, like the 275 to four hundreds were the first ones to go because our market, our rental market has a big population of, you know, medical students, law students, a lot of high level graduate programs, government, so a lot of single people looking for housing, that aren't necessarily gonna be here, super long term, maybe three to five years. Go micro units are total.

Brian Briscoe 10:43

It's a growing trend among millennials, you know, one thing and you've done this, obviously, is keeping your pulse of what people are looking for. And, you know, a lot of millennials are looking towards that, you know, they're looking at, okay, we don't, I don't need all of this space, you know, all I need is a bed, you know, a small kitchen, and, you know, I can live with that. And it gives you a lot more bang for your buck, from their perspective as well. So you have some of these younger professionals coming in, they want to live close to where they work, but they don't want to spend big dollars, and it's a perfect solution for them. And you were able to come in and capitalize on on that growing trend. And, you know, not surprisingly, those were the first ones that rent it out. So

Daniel Odabashian 11:23

yeah, it was interesting in talking to the banks, when we're underwriting and underwriting for the construction loan, it was, you know, it's always tough to get a bank to wrap their head around something that's not, you know, status quo, right, especially our market. So, you know, the question kept coming up, well, the practice square foot is this, and that's insane for this market. And I just said, it's renters don't think in terms of price per square foot, they think of how much am I paying for this apartment, and we're actually able to offer lower rates for those micro units and any, like standard one bedroom, new construction apartment elsewhere in Albany, you know, those are going for about, those will start at anywhere from 1314 1500, where ours are starting for, you know, 950 1000, just because we're able to get more units in. And that's a much more attractive price range to a graduate student on a fixed income. And, you know, they got, you know, if it was tough, but we got it done. And, and that's exactly they don't think about how much you're paying per square foot, they think about how much they're paying per apartment. Yeah,

Brian Briscoe 12:30

yeah, that's exactly right. You know, and having been a graduate student once upon a time, you know, I think you're, you're not too far off of what the the, the footprint of an average dorm room is, when you look at that, from from that aspect. It's, it's basically an off campus, you know, dorm room to I mean, just to put things in perspective. So, alright, so, um, you one question, I really like to ask everybody, and, you know, you're not going to be an exception. So so here it comes, what is your big burning? Why?

Daniel Odabashian 13:00

My favorite question. When I first heard this question a couple years ago, and I didn't understand it, and I think I understand a little bit better now. But, you know, I like to answer it into two parts. Like for me on a personal level, you know, every everydays is really interesting. And what we do, you know, there's no, you're meeting new people, there's new challenges. And, and I just, for me, it's kind of need that stimulation in my life. And maybe it's just the way my mind works. And that keeps me you know, going. But, you know, on a more like, higher social level, I think it's just, it's, for me, it's really satisfying to own manage, create spaces and community I'm living in, you know, I walk by my apartment, I live in downtown Albany, I walk by a lot of my apartment buildings every day that we own and manage and, and just to have, you know, a positive impact on on people's personal lives. I mean, I always say to people, what's different about real estate, you know, we talk about like, collections and management and how, like, where a credit card company or a cable, you know, internet company, if you don't pay the bill, you can just turn it off, right? These are where people are living. So there's a certain there's just a whole nother level of, of social responsibility that's involved with that. And that that does definitely gives me some gratitude, you know, you know, so So that's, that's kind of my why. And, you know,

Brian Briscoe 14:37

and that's, that's one thing. You know, I wish I wish I was closer to the apartments that we own, you know, but I can't imagine you being able to walk by those every single day and just say, hey, look, that that's something that I'm doing. I'm providing housing for all of these people. And you know, it is something you can you can absolutely be proud of, and and, you know, good for you to be able to see it every day. mean, that's amazing. So another question I asked everybody and just just to see what's on the horizon for you what's what's next coming up for you?

Daniel Odabashian 15:10

Yeah, we you know, we got a lot going on a lot of new stuff going on. We've we've recently delved dabble, you know, dipped our toes in the water of the RV, park and Campground world. We we first we purchased our first campground in early August, down in the western Catskill Mountains. It's called covered bridge campsite. And that that's a pretty interesting property. It has a mile of frontage on the willowy muck Creek, which is something out fishing stream in the Hudson Valley. And that area is actually unbeknownst to me until we started, you know, we dove in there is credited as the birthplace of American fly fishing. So a lot of history there. Yeah, a lot of and yeah, it's pretty interesting. And so we get a lot of, you know, fisherman, there's a lot of hardcore fishermen, there's a lot of people, it's, you know, an hour and a half, two hours from midtown Manhattan, depending on traffic. So we get a lot of, you know, city folk just looking to escape, there's no cell phone service, really. So a lot of people looking to escape, it's really more of a rustic campground than your traditional RV park of what you think of, you know, RV stacked up. And there's 48 RV sites 22 Very popular camping sites. So, you know, we took over and, and are implementing somewhat of a development plan with renovating some bath houses and, and, you know, a ton of forestry work, we implemented an online booking system, which we saw immediate returns on real August, September and October, like, it's well exceeded our expectation of what we would have gotten so. So, you know, we really see great opportunity in this asset class. Because what was happening was the apartment deals, cap rates were getting compressed. We saw we saw near, you know, downstate New York City money coming up to the Albany market and investing in cap rates that they were comfortable with. And so, you know, the RV park, the seasonal RV park campground model is a great one, because, you know, a lot of you have the seasonal camper component that pay all the money up front before the season. So, you know, there's no collections issues. And, and it's just a different, it's a different ballgame, because it's people who are vacationing and, you know, really are enjoying being there. And, and, you know, they're there to for, to vacation and enjoyment. So, just a lot, you know, different attitudes than then managing somebodies domicile, so to speak.

Brian Briscoe 17:50

Yeah, I mean, a lot of fascinating things about it. And you mentioned seasonal on do you guys keep it open over the winter? I mean, I imagine if you did you, you probably wouldn't be full every time. But what do you do in the offseason with that?

Daniel Odabashian 18:03

It's completely shut down. So the season is a through October. And there's a few reasons for that one being obviously the weather the Catskill Mountains just gets absolutely, you know, pounded with cold and snow and be basically the way it's zoned and the permits through the Department of Health only allow for the six month season. So, you know, that also affects things like operating expenses, like taxes, insurance, as well. So you see some benefit on that side of things as well.

Brian Briscoe 18:35

All right, interesting. Yeah. Fascinating stuff. You know, I remember Matt talking very briefly about it. He didn't go into a lot of the details, but I grew up, you know, fishing for trout in you know, Utah mountain streams and whatnot. But, you know, maybe one of these days, I'll come out there and go to the birthplace of fly fishing. So

Daniel Odabashian 18:54

absolutely, yeah. Yeah. Yeah.

Brian Briscoe 18:57

Yeah, be great. Well, that's it. We're gonna shift gears right now. And we got Jalen on the line. So Jaylen, welcome to the show.

Jahlen Brown 19:04

It's having me Brian.

Brian Briscoe 19:06

Yeah, absolutely. So you know, first question for you is gonna be the same as the first question for Dan. So, you know, please tell us about about yourself. You give us an idea of your background and what's gotten you into apartment investing.

Jahlen Brown 19:19

Yeah, my name is Jalen, and I'm similar to Dan I went to college study finance and real estate and worked a little bit in the corporate world as well. Most recently, I was an asset manager at a multibillion dollar private equity firm, and we had a few billion dollars of industrial multifamily assets that I was able to help manage. And

Brian Briscoe 19:43

it's no big deal. It was just a few billion dollars worth of assets. So anyway, I'll go ahead and sorry for interrupting.

Jahlen Brown 19:51

Yeah, it's a good point. It's sort of once you start working with the larger numbers, you start get desensitized to a lot of the little smaller things that investors like us really want to go after. But before that I also did underwriting for multifamily syndicator. And right now trying to break off and do my own thing. And my target markets are San Antonio and Houston. I've been sourcing and underwriting deals, but don't just have one quite yet still working on it.

Brian Briscoe 20:19

Well, your your professional experience, you know, lends itself very well to this business. And I'll tell you, you know, something about that, that billion dollar comment I made, when I first started getting into the business, you know, a million dollar property, you know, looked like it was too out of reach for me, you know, just just because of the relative sticker shock once you once you get into a seven digit number, but I think having having worked with those larger numbers is going to put you ahead of a lot of people because you're used to working with big numbers, and it's not as, you know, scary, so to speak, you know, and I'll be honest, I think there was there was a lot of intimidation on my end, when I when I started looking at, you know, properties that were like six, seven $8 million worth, you know, now we own a handful of those. But anyway, I think like as a your your professional experience so far as you know, lend itself very well. So what is what is your motivation? What is your big burning? Why?

Jahlen Brown 21:14

Yeah, that's a good question. For me, it really is just financial freedom. I didn't really realize this until towards the end of high school, once I discovered, like many other people, Rich Dad, Poor Dad, I read it fairly quickly. I think it just took me a couple of days. And a lot of things sort of started to make sense for me. You know, growing up my parents, you know, they would lose their jobs, we'd be struggling, and it wasn't really easy for us. And it was hard to understand. Because, you know, they would go to work all the time, they'd show up every day, they'd come home. But after all that work, they weren't really getting to where they wanted to be. And I realize that's not really the life I want to build for myself and my family, and you sort need to do something different if you want to have different results. And that's my wife for multifamily investing.

Brian Briscoe 22:08

You know, I had a similar background and something you said reminded me of something I said, when I was I imagined I was probably you know, seven or eight years old, you know, just just, incidentally, I was really good at math. When I was a kid, I remember asking my dad once how much he made, you know, what was his salary? And he said, time, you know, I make $30,000 a year and this is 1980 Something I'm, you know, I'm not that young anymore, but and I remember just doing the mental math, I said, Wow, dad, you know, in 33 years, you will be a millionaire. You know, and just seeing his expression, you know, it was just like, it was almost like, you know, I thought it was the most amazing thing. I think his expression was like, yeah, that's never gonna happen, you know. But yet see, seeing parents and stuff like that just got you. I think your parents always want a better life for you. And I think a lot of people, you know, same thing want a better life for themselves and for their children too. So well, that said, let's do what we can to help you help you out here. We've got Dan on the line, what do you want to ask him?

Jahlen Brown 23:18

So I know you have a pretty similar backgrounds Meet Dave, you went to NYU, one of the most prestigious colleges of the Northeast. And I'm assuming you build a pretty good career for yourself before diving in. So what what really made you or really push you to start multifamily investing, because so many of the people I really meet with, they sort of worked in the industry for 1020 30 years, and they sort of build a career out of it, but then never end up really owning anything for themselves.

Daniel Odabashian 23:51

Yeah, no, that's a great question. It's funny, because when you when you said what your y is, that's probably how I would have answered that question. When when somebody asked me when I was in your position, right? You know, what really drove me was that financial freedom and, you know, I saw, I had, like, an opportunity that probably 99% of people in this world would never have to, you know, a leg up and inside track on like, high level Wall Street jobs, or, you know, get, you know, breaking into that world. So, it, you know, it was it was definitely a tough decision. But I saw a lot of my friends and, you know, classmates at NYU who were just miserable, working, like literally 80 100 hours a week, seven, seven days a week. And, you know, for me, I just thought there has to be a better way and that coupled with you know, the, it wasn't after my coursework and and you know, doing some internships and spending a little time in that world. It Just was a lot less appealing to me than, you know, I initially anticipated. So I said, I gotta I gotta figure out a different way here. And, and that's kind of that's, you know how what my mindset always is when when and I think it's a good way to approach things if you're getting frustrated or or you know, you know, bored or complacent. You got to take a step back and really evaluate what you're doing with your life and your career and anything really. So.

Brian Briscoe 25:33

Good, solid, solid?

Jahlen Brown 25:36

Yeah. Yeah, I guess. So. Shifting gears a little bit, I know you mentioned you're sort of building out your capital raising garment for business. So would you be able to share what's sort of your process for raising money for deals? So let's say you just meet an investor, let's say you, you know, they're accredited or have a strong interest in investing in real estate? What's your process once you meet them to convert them into an actual investor? Um, so,

Daniel Odabashian 26:08

to back up, we actually have a, you know, we're always looking for ambassadors and, and I think the best way to start is to just what everybody does talk to your, your sphere of influence, as people like to call it right, your friends and family and, and you'd be surprised if you know how many people are interested in. And it's an awkward conversation to have, because you have a prior relationship with these people, and probably somewhat of a personal relationship with these people. But, you know, that's a huge thing, because they already have that first level of trust with you. So an investor's worst nightmare is losing their money. Right. So they're thinking, always thinking, worst case scenario. So, you know, they're saying, Well, you know, I've known, you know, Jalen has been my son's friend, since, you know, for 10 years, he's not, he's gonna do everything in his power for this investment, not to go sour so, so really, you know, starting with that friends and family, to remember influence, and you'd be surprised how many if you're successful, they're going to tell their friends and their colleagues and say, Hey, Besa Jalen, because, you know, I just made 20%, I'm making 20% Return on this deal. It's unbelievable, you know, and getting tax benefits off of it. So but you know, to answer your question, regarding meeting an investor with no prior relationship and determining whether they're in credit or not, you know, we usually have an initial call with them that last 15 or 20 minutes. And, and, you know, they're there, the call is really been betting us, but we're betting them too, right. So we want to know about their prior experience in investing. And then, you know, we'll chat about our what pre what deals we previously just done, and, and how those are shaking out and return metrics on those, and then we'll, you know, if we feel like there's somebody that, you know, is potentially accredited and would be a good fit for, for investing in our deals, then we'll pitch them on, you know, briefly pitch them on what we're trying to raise currently raise capital for. And, you know, usually that conversational and with us, sending them an executive summary on the deal or deals, and also an investor suitability questionnaire, which is basically a bunch of information about their personal financial situation that will tell us whether they're accredited or not. And then we know, we can move forward from there with them as a potential, you know, limited partner and one of our deals.

Brian Briscoe 28:42

Yeah. Oh, my two cents. I mean, our process once we get them on the phone is very similar. But, you know, if you're starting with friends and family, I think the biggest thing is just talk about what you're doing, you know, tell people what you're doing. And, you know, what I found with, you know, my, my close circle of friends and family is, a lot of the people that I thought for sure would invest were the ones that were just like, hey, well, congratulations, that sounds fun. And, you know, a couple of people who I thought would never invest ended up saying, Wow, that sounds awesome. I'm really interested, can you tell me more? You know, and what I found is just by telling people what you're doing, a lot of people will self select, a lot of people will start asking those follow up questions. And, you know, that's, that's really who you focus on. So, end of the day, talk to more and more people about what you're doing, you know, spread the enthusiasm you have enthusiasm is contagious. It really is. And, you know, let people self select let people ask questions, you know, and a golden question that I love, is when you're telling somebody about it, you you know, at some point, you just say hey, do you know anybody who's interested? You know, and once again, people will self select with that question. You know, it's very low pressure, you know, for you asking very Low pressure for them on the receiving end, you know, but if they're interested, once again, they're going to self select.

Jahlen Brown 30:07

So yes, so have you guys ever been in a situation where someone is interested and wants to invest with you, but they sort of don't want to be a passive investor, they sort of want to be more active in the deal? How do you deal with that? Do you guys just tell them no? Or do you sort of try to make room and try to bring them on? And what's what's pretty much a good response to that?

Daniel Odabashian 30:35

Yeah, I mean, for us, it's, hi, we get that a lot for sure. I've also, you know, I have, I think 30 Plus management clients who I asked all the time, like, Hey, you should be investing these deals, instead of just trying to buy two family, you know, six, family and family properties on your own. But for us, it's very highly dependent on the type of deal, and probably more so on the investors experience. So, you know, if they have no previous experience in real estate in general, like, why, why would you want to joint venture with them, but if they do, and they're bringing that aspect to table and providing that value, then it's definitely something we consider, because that's an additional level of value, that, you know, it's not just somebody writing a check and sign an agreement and, you know, getting a quarterly report. So, you know, I think it's really, you got to really evaluate the situation properly. And, and again, you know, like I said, take a step back and say, you know, don't get tunnel vision into we only want, you know, limited partners and passive investors, because there's a lot of people out there that can provide significant value through maybe their operation, or just their general knowledge and experience to, you know, what you're trying to do.

Brian Briscoe 31:56

Yeah, I think something that Dan said, on the answer of the previous question was, you know, on that investor call, you're vetting the investors and the investors are betting you at the same time, you do have to make sure it's a good matchup, you know, end of the day, you got to make sure that, you know, your investment opportunity works for the person coming in. So I would say, don't be afraid to tell somebody No. I told somebody know, a long time ago, and they they've actually partnered with us on several deals since you know, so it's, it's, it's one of those things where, you know, be honest with them, and there there are, there are times where you'll be able to find synergies with people, but there's times where you just have to have, you know, the fortitude to say, I don't think this is a good deal for you. I mean, it sounds like, it sounds like you want x and we are providing why, you know, so from from what I'm hearing from you, I don't think this is going to be the best opportunity for you. But you know, maybe here's how we can partner in in future endeavors type stuff. So I would say just just be honest with people beforethe. Right. And, and people will respect that.

Jahlen Brown 33:08

Definitely. helps a lot. Yeah. So Dan, I know you do deals different than just your typical apartment deal. I know most of the thing that's popular right now is you buy an apartment, or maybe it's a one to four unit, you fix it up and you raise the rents, but you're actually doing redevelopments and RV parks. So what's the reason for you doing sort of something out of the norm? Is that, is it easier to just get a deal? Are they easier to raise capital for or get better returns?

Daniel Odabashian 33:44

Yeah, I mean, kind of all? Well, I wouldn't say they're easier to raise capital for but somewhat all of the above there. You know, you it's tough, real estate's tough because what I've learned over the years is there's a very low barrier to entry, right? There's a lot of people out there that can purchase a two family investment property, and they don't need any type of license or qualification to do so. So this creates an environment of, you know, competition. So really, you know, you have to think outside the box, you have to be creative, you have to separate yourself from the herd. And that's really how we landed on RV parks and campgrounds, you know, the apartment, the market was getting super competitive, cap rates are getting compressed. And, like, you know, again, the whole take a step back and evaluate things like what are we doing here? We can't buy things at five and six cap rates. There's no meat on the bone left in the deals, you know, for after we pay out or investors. So for you know, for us, it was really just, we gotta go in a different direction. Maybe a market will cool off. You know, the other aspect of that is you got to be creative when you're sourcing your deals. You There's a, there's a lot of brokers out there that are that are peddling a lot a lot of deals. And our motto has always been go direct to seller first. And we actually created a system that, you know, it's more of a data information system to gather together, you know, contact information for, for owners and just hit the phones and start calling people who own properties and try to get him to sell them to you, what's the worst that's gonna happen? And I say no, right? So, you know, that's, a lot of people fall into the trap of I'm just gonna do what, you know, the next guy is doing, the guy's doing next to me, and he's successful, so I'll be successful. But that, you know, the markets quickly get diluted, and and especially in real estate, you know, I did that construct big construction project, a couple years back 2019, we completed that, but hadn't really been interested in doing another one because everybody's building new construction apartments. Now, there's 400 new market rate units in downtown Albany alone. And that's not there's, you know, three other large metro areas within 20 miles. And there's construction happening there. So how can you know, this not be getting diluted, right, so we saw campgrounds, and RV parks is something not necessarily that people aren't paying attention to, but just a less competitive environment with with better returns. And, you know, I think like self storage was like that a few years back and mobile home parks in some respects. And so, you know, you kind of got to not so much be, I always say never want to be a pioneer, but you know, I don't want to be at the back of the line. So maybe, you know, somewhere towards the front of the front of the line.

Brian Briscoe 36:49

Yeah, you know, I think I think quick answer to that, you know, is, is you keep your finger on the pulse of the market. And you're ready to pivot is what it is. And you know, what Dan's doing is exactly that he knows his market well, and he made a pivot to something that was working a little better than the traditional model. And you know, that there's a lot of wisdom in that, you know, but knowing your market and knowing the dynamics of what's going on, going on, you know, are going to give you that the the information you need to be able to make those changes. So we got time for one more question. Jalen. So, you know, if you've been saving one up, now's the time for, now's the time for it.

Jahlen Brown 37:33

Yeah, my last question actually was real estate. At the end of the day, it is a business. And it's very hard to do it all alone. So how do you properly vet a potential business partner and make sure they're the right partner for you? You're really in a, you're sort of in a relationship with them for five, maybe 10 years, and it's very hard to just sort of get rid of them. So how do you make sure that you have the right person? And they're really on the same page as you?

Daniel Odabashian 38:04

Yeah, no, that's that's a? That's a great question. Because I think that's where a lot of business partnerships fall short is, both parties, or however many parties are, don't really sit down and properly evaluate, like, what it is that they're trying to accomplish, and what each person is bringing to the table, and they kind of just jump in and say, Well, you you invested in multifamily, I invest in multifamily. Let's join forces, and we're going to be twice as big Well, that's not really the case. Right. So, you know, I think, for me, I've had, I've had business partners come and go over the years. And, you know, I feel like, right now I'm in a pretty good spot with with the partners I have in place with new Scotland development. And, you know, I think that was a process of saying, Okay, what do I do? Well, and what do I not do? Well, more importantly, and who can I find, you know, what, what type of person, what type of professional, what type of skill set do I need to find that fills that gap, because if you're just partnering with people who do the same thing as you, it's never going to work. And that's an that's a common mistake people make I've seen it, I've seen other business partnerships go sour, over that very thing. And so, every, everybody should be bringing something different to the table, not the same thing. And if you can find the right, you know, potion there, you're going to be in, in good shape. So

Brian Briscoe 39:31

yeah, and I mean, it is a relationship and you're right, and I would approach it the same way you approach other relationships, you know, is, you know, try to collaborate on smaller things before you jump into bigger, bigger deals, you know, so, you know, our company came together pretty quickly. But, you know, we were collaborating on underwriting we were collaborating on a lot of things together, you know, so, once once, the first person that I you know, first person out of the four oaks crew that I met was Eric Shirley. And right after we met, we started sharing our underwriting, you know, we were looking in the same areas, and, you know, when a property would come out or across my desk, I would do my, my quick analysis of it, and I send it over to him. And, you know, slowly over the course of several months, we built up, you know, trust in each other. And we knew that we had similar ways of thinking of things and everything else. But, you know, without that initial collaboration, we never would have, you know, agreed to partner on something. But, you know, I think it's the same thing with any other relationship, you know, whether you're you're dating or you know, or a marriage or anything else is, you have that get to know each other time that dating period, where you're collaborating before you, you know, tie the knot on a deal, it's going to put you together for, you know, seven or 10 years. So, well, that said, we are pretty much out of time here. So one question for each of you to wrap things up. And then you're going to be able to go first on this one. how can listeners learn more about you?

Daniel Odabashian 41:05

Yeah, you can check out our website at New Scotland all social media outlets. New Scotland capital is our acquisition syndication arm. So Instagram at New Scotland capital, my personal email address is Dan at New Scotland developments calm. And I'm happy to talk to anybody anytime I love. I love meeting new people and learning about you know, what they're doing and sharing knowledge and, and for everybody to benefit from so

Brian Briscoe 41:39

well. And for anybody listening, you know, his contact information is going to be in the show notes as well as a website. So definitely check him out. Check it out and contacting if there's anything you heard, it's it's interesting to you, Jalen, same question for you. how can listeners learn more about

Jahlen Brown 41:57

you? Yeah, if you want to reach out to me directly, the best way is probably on Instagram. My name is at Jaylen Brown. I'm also on LinkedIn, I actually do have a free gift for your for your listeners as well. I realize I have some pretty unique information given my institutional background. I think one of the biggest reasons Steel's fall through is because of poor or lack of due diligence. So actually wrote a guide to help with it. It's for completely free for active and passive investors. And you can find that at Arland There's currently no upsell right now. Maybe one of the future. But hope, just hope let us spread the word hope it helps someone in the future.

Brian Briscoe 42:43

All right, sounds good. And we'll have a link to that in the show notes so that anybody who's interested in can grab that due diligence handbook. So so both to both Yeah, you know, thank you very much for coming on the show today. You know, it was it was a great conversation. Good time and happy to happy to share some time with you guys.

Jahlen Brown 43:01

Thank you so much. Thanks. Thanks, Brian.

Brian Briscoe 43:20

Thank you for listening to the direction 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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