What Investors Need with Andy Vaughan and Mauricio Roque

Episode 80 of the Diary of an Apartment Investor Podcast with Andy Vaughan and Mauricio Roque, hosted by Brian Briscoe. Transcript by Otter.ai – please forgive any errors.

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Brian Briscoe 0:00

So that said, we got Andy on the line here Mauricio, what do you want to ask him?

Mauricio Roque 0:03

This is something that I've been thinking about over the past couple months. When you talk to investors, what is your main focus? Do you focus on the deal? Or do you focus on yourself and your track record?

Andy Vaughan 0:14

First of all, what I do is I, I either have or I create the relationship with the potential investor I'll say, sit down with them or sit on a call or whatever and we discuss what it is they're looking for. They see that you genuinely have their best interests at heart and then you when you find a deal, why they're looking for then you bring that to them.

Brian Briscoe 0:47

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. This is journal entry number 80 and part of our multifamily brief series. Today we bring an experienced investor Andy Vaughan and aspiring investor Mauricio Roque. Keep listening for potential tips on how to talk with high net worth investors and what to talk about with any investor when you sit down with them. And now the show Welcome to the diary of an apartment investor podcast. I'm your host Brian Briscoe. With forex capital. I'm super excited for today's show. It's one of our Ask the Expert series we've got two amazing people on the line with us right now a man with tonne of experience in this and other businesses and Yvonne and a very motivated energetic aspiring investor Mauricio Roque. So first, Andy has experienced with several types of real estate transactions and holdings going back to 2004 and is currently invested in six transactions in the multifamily and commercial mixed use space. He's been in the insurance industry for 26 years, and his own multiple insurance agencies. During that time, he worked with numerous high income high net worth clients and business owners who are interested in real estate investing, but lack the experience or time in 2017, Andy transitioned his focus to helping people invest passively in commercial multifamily properties located in markets primarily in the southeastern United States. That's it. Andy, welcome to the show. Thanks. Glad to be here. Yeah, it's exciting. And incidentally, you were one of the first people in the multifamily space that I had the pleasure of meeting we met is just over two years ago at a Michael Blanc event in Reston, Virginia. Yep, that was the one it's about 20 miles from my house. And I think the only reason I went to that, because it was only 20 miles from my house. But that was a little further than 20 miles from my house. Yeah. You know, and I learned at that event that travelling to big events like that. I mean, obviously we COVID right now, it's not exactly possible, but paying to travel to events like that is probably worth every single penny. Yeah, absolutely. So So that's it. Let's, let's talk a little bit about your background and your history. Can you can you tell us, you know, how you how you came into this industry? You know, give a little bit of background prior to that and rose up to the point to where you decided you wanted to go into apartment investing?

Andy Vaughan 3:19

Well, I mean, I guess it goes all the way back to you know, when I was in college, I've always been interested in business and entrepreneurship and income and you know, got started back with the years ago with think it was actually a guy by the name of Dave del Dotto, had a infomercial, and then all the Tony Robbins stuff. And so I've just always been interested in that. So I learned early on, when I was a young guy that I needed to do something as far as creating income, I needed to do something that allowed me to duplicate myself, if you will create residual income, we call it or, you know, ongoing income stream of some sort, I couldn't do music, I couldn't sing or play the guitar, I couldn't write songs, conduct a basketball or anything like that. So, you know, I kind of looked at those, those things that I knew I could do that the barrier entry was kind of low, if you will. And the two things that always came up was insurance and real estate, real estate, obviously, we understand that, you know, once you buy a property and you have someone paying rent or you know the lease payments, if you will, then that creates the ongoing income. Same thing in the insurance business. I mean, the theory is that you would write a policy, whether it's a business or individual or whatever, one time, and as long as you keep that person as a client, you're earning income off of it. So I could see growing every year in theory, as long as I, you know, served everyone and did a good job and they you know, they stayed with me, and I could build on it every year. My income should should increase every year. That was the theory. So, yeah, that's what I did right out of right out of college. I was working, interestingly enough, you know, my background is in golf as well. So I was working at a golf course. And I would see these 30 4050 year old men during the day playing golf. And so I mean, being the inquisitive guy that I am, I just started asking around, what do you guys do that allows you to do that? Yes. Have

Brian Briscoe 5:27

a job? I mean, what exactly Yeah,

Andy Vaughan 5:29

exactly. And all of them seem to be in some sort of sales, whether it be, you know, real estate sales, or, you know, one guy was in, like, the big heavy industrial knives, like in, you know, cutting situations, but, you know, insurance, all sorts of different things. So, I met a guy through that, through the golf course that he had, he had started with a with an insurance company right out of college, and he's playing golf with us, we actually, you know, kind of made fun of him because he went to school, in his case, six years, to get a four year degree. But, uh, and, and we go, okay, you did all that, and you're going to sell insurance. I mean, come on, you know, and kind of laugh that he made fun or whatever. But, you know, over the course of the next year, year and a half, we started seeing what what he was doing and the kind of income that he was creating. So, you know, when I got out of college out, that's who I went to, I was like, Okay, tell me how I can do this thing. So So that's, that's how I got started.

Brian Briscoe 6:29

Yeah. I mean, that's a fair question is like, hey, I want to be able to golf on Wednesdays, just like you're doing right now. How do I get there? You know? Absolutely. Yeah. That's, that's awesome. So so you followed his footsteps, you started an insurance company and figure out a way to create passive income streams? Basically. Yeah,

Andy Vaughan 6:46

I mean, I started it's like, most people, you know, you start out in the insurance business, you're with, you know, what we call a captive carrier. So you're working for a company, which would be like a, you know, a State Farm Farm Bureau, something like that all state. And I did that for two and a half years. And then, and then I left that and went to an independent agency, which just kind of opened up and broadened. I mean, any insurance product out there, I could write. Okay, and so I did that for two more years. And then I started my own agency and my first agency in 98.

Brian Briscoe 7:17

Yeah, interesting. Yeah. It's interesting how that goes. So I don't know much about the insurance agency. So you basically became an insurance broker, essentially, where you could reach out to several different companies to get the appropriate policy for people.

Andy Vaughan 7:32

Yeah, the first, the first two and a half years, I was an agent, which means I was representing one company to people, and then I figured out Okay, I'll be in a lot better position if I represented the people, if you will, and then went to the market and found what they're looking for.

Brian Briscoe 7:47

Okay. Interesting. Interesting. Yeah. Now, incidentally, did you write multifamily insurance policies at the time? Are you focused on like home model? Everything else?

Andy Vaughan 7:56

Yeah, I mean, started out, obviously, auto home life, you know, personal we call personal lines. And then, once I left with that independent agency, I actually started running a lot of group health, like Employee Benefits stuff. And that's what I really fell in love with. So from from 98, until basically, when the Affordable Care Act pass, though, what we know is Obamacare, passed in 2010. I mean, it was it was awesome. It was a great business to be in, I loved it allowed me to be creative and design plans for companies, and all of that, and then everything changed in 2010.

Brian Briscoe 8:36

Yeah, yeah. That was those landmark legislation piece. Oh, yeah. But yeah, I never really realised how it how it affected the industry. So I mean, did I assume the way you're talking things got worse for you, as far as business goes?

Andy Vaughan 8:51

Yeah, absolutely. I mean, you know, from from, you know, 2010 is when they passed it, it really didn't start, you know, taking place, if you will, everything being fully implemented until 2014. But from you know, at that point, I literally saw the number of grids because I'm in northeast Louisiana. So most of the businesses, you know, they've got anywhere from five to 20 employees, let's say they're their small businesses. So that was the majority of my book of business. And that's what I really enjoyed doing. But over that time period, the next, you know, from 2014 2015, that two year period, the number of groups that I had, were cut by more than half. I mean, the employers just decided to scrap the group altogether, and let the employees go out to the new exchanges that were set up and they were out of the business, you know, so. So you had impacted me greatly.

Brian Briscoe 9:49

Yeah. So how'd you pivot from there? What What did you end up doing to replace that?

Andy Vaughan 9:54

Well, I'm in 20. I guess I kind of saw the writing on the wall if you will. And I figured out that, you know, what, what drove it was that, you know, part of the Act was that insurance companies, they had to build in, they had to keep within a certain amount of guidelines as far as their admin administrative cost, they sort of became like, what, you know, utility company, if you will, and they were told this is how much profit you can make. Okay, so they just backed into it. So we take our losses, and we take all our admin costs, and then we got our profit. So what they did was they put the broker commissions in that admin, which they had to fit everything down to a certain so so I realised early on, it was going to be a race to the bottom on commissions and insurance companies started cutting commissions, cutting bonuses, like said group started, you know, small groups just started scrapping it all together. So, I saw the writing on the wall, and I actually, you know, I went back out and started getting lines and get set up with with different insurance companies to write property and casualty, again, sort of doing business insurance, and, you know, workers comp and general liability and property and things of that nature, you know, to kind of fill the gap and even went back and started doing you know, had a personal lines arm, so I set up a new agency for that. And I just really didn't, you know, didn't like that business. I mean, it's it's constant work and headache, and it seems like you can never get ahead, so actually sold that agency in 2018. And that's right, you know, right around the time where I was decided, I'm going to focus on on the investing in real estate and multifamily and other assets like that. So,

Brian Briscoe 11:45

you know, what you what you bring up, I think that story in slightly different terms has been replayed over and over again, on this podcast, you know, some external factor effects, you know, a business that that people have been in, or people have, have really enjoyed, and, and turned it into something that's either less profitable, less enjoyable, or both. And kind of, for a lot of people ends up being a wake up call, like, Alright, you know, I need to do something else, I need to do something that's, that's, that's freeing me up from having to run the daytime job. But

Andy Vaughan 12:18

yeah, a lot of what I enjoyed doing in the insurance business was being creative. Now, that sounds funny in the insurance business, but I really enjoy going into small businesses, and sitting down with the owners and sitting down with the employees, and designing and a plan that totally fits that business. Because if it's, you know, the average, let's say, it's an engineering firm, where the average age of the firm is 50. Well, their needs are gonna look different than a firm where their average age is 35. Yep. So I really enjoyed that. And when, when the Obamacare thing happened, all the insurance companies just kind of came out with, here's our plans, and they normally would have anywhere between four and 10 plans. It's just kind of cookie cutter and a one size

Brian Briscoe 13:04

fits all.

Andy Vaughan 13:05

Yeah, so my ability to differentiate myself in the market, if you will, just kind of disappeared, everybody had the same products, and it was just it took all the creativity out of it. And it wasn't like you said it wasn't fun, and the income was going down.

Brian Briscoe 13:21

Yeah, you know, and I tell, I've said this to a couple of people recently, you know, I volunteered the church youth group, and we were talking about, you know, goals and future. And I said, there's, there's three things you want to align, you know, something that you enjoy doing something that you're good at, and something that you can make money with, you know, and if you can do that, you know, you're going to be, you know, happy and successful most of your career and sounds like two of the three of those got pulled out from under you, you know, you're so good at it. But yeah, I understand that. So So let's talk about the transition to multifamily. You know, how, how you got into that, and, and how far you've come since then.

Andy Vaughan 14:00

Well, I guess the first thing, I mean, like said, I'd always been interested in real estate, you know, I kind of, you know, back to 2004, you read in the bio, in the very first thing I did, was like my grandparents had passed away, so their home if you will, you know, whoever, like my mom, and other thing, you know, other people that they work, you know, saddling the estate, if you will, they were going to put that house on the market for a certain figure, and I knew it was worth more than that. So I bought that. So that was my first little foray into it, was gonna rent it out, went in there and fixed it in the very first person that came along that we tried to rent to decided they wanted to buy it. So, you know, it ended up being a little fix and flip is what it was. So then, I got involved in another business back in 2007, which we bought some, you know, commercial real estate, still and still have that. So but that really wasn't, you know, it was a triple net lease type deal. So The people with the least they're handling all Yeah, just really wasn't that intense. So then fast forward to 2016. I had a client that had a lot of rental properties. And he came in one day and told me you need to cancel coverage on a house. And I was like, oh, did you sell it? And he's like, no, I tore it down. I was like, it was it was a nice house. I was like, Why in the world? Would you tear it down? He said, Well, I've got that plot of land there, and I'm gonna, I'm gonna build duplexes on it. I've got it laid out where I can fit eight duplexes on there, so give me 16 units on that same piece of land instead of one. So okay, it makes it so during that time period, I guess it was probably 20 2015, I would say is when he came to me and said that so about 2016 his grandkids played ball at the same school that my kids played ball. So we're we're at a game and by this time, he had already retired and moved to the beach. So he started selling a lot of his stuff here and moved down to the beach in Alabama. And anyway, he was back in town for a ballgame. We're sitting next to each other talk. And I said, you ever sell that piece of land? knew he had a for sale? Sign up? He's like, no, why don't you buy that bond? He's like, dude, I've already got all the plans done. Everything set and ready to go. All you got to do I'm gonna hand you the plans. I've got the contractor set up. He's done it before, why don't you do it. So I got my wheels turning and, and went to, you know, a couple of banker friends of mine and and that were clients and stuff started talking to them. And looking at it, that was in probably September of 16. At the end of the day, I realised it was gonna be somewhere in the neighbourhood of 1.2 to 1.4 million.

And it would be a while before I could lease it, you know, so I had a long runway there where I was gonna have to feed that monster and pay all the interest and stuff, you know, until we could get to where we can start leasing it. And it just it scared me. At first. I was like, I don't want to do that. But it got the wheels turning a buddy of mine that I had taken him out there to look at it because we were going to partner on it. He came to one day said you ever heard of this bigger pockets podcast, ya know. So anyway, he turned me on to that. And I started listening to that, which I mean, gosh, I learned so much from September till the end of the year, let's say just about real estate. But I still it's kind of like the insurance business. I mean, there's so many different directions. You can go. Yeah, and investing in real estate. So I didn't know I mean, you know, I didn't know what I wanted to do. It made sense to me. multifamily just made sense. Then you got more units more people paying rent on one piece of property. Yeah, one property tax bill, you got one insurance bill you got it just made sense. You know, you can hire a property manager and have people on site and all of that made sense. So that's probably you know, that's, that's what got my wheels turning up in 2017. I really just kind of dove into the multifamily deal, went to conferences, read books, took courses, all that and then in I guess it was January, January of 2018. Rod Cleef had had, they had his first boot camp down in Florida. For some he'd ever done that. So I went down there, and I met some people and, you know, met a guy that looked about Mauricio his age, and I'm sitting right next to him one day, and he told me, he had already been in the gap of three deals, and fixing the clothes on the fourth and I was late. So we got to Yeah, yeah, I just had this realisation that, you know, people done it before, it makes sense, that just need to figure out how to put everything in place to make it happen. Yeah, I decided at that point that I was going to get some sort of help, I'll just say help, whether it's mentor, coaching, whatever you want to call it. And I had already that previous spring, I had already bought Michael blocks, you know, that syndicated deal analyzer and all the old ones material that he hadn't been through that. So I just reached out to him and, and, and, and started looking for a way to, you know, somebody to mentor me and help me if you will, and that's a hooked me up with with Drew kniffin. And that was in February of 18. Yeah, and, you know, it was it was really cool, because it's like, once a week, it was it was drew myself and two other people on a on a call like this. And, you know, it got me to listen to the things that they were doing, and everybody was kind of different step if you will. Well, Gary had a deal on a contract. You know, somebody else was trying to decide on what asset class they wanted to. They want to start out small or student housing and so just you got our feet wet. Got to learn a lot, a lot of trial and error about other people as well, where you're kind of involved and we all talk it out and and then you go out and you take action for a week or two and then come back and just, you know, talk about it again. Yeah, it's talking about it as Yeah.

Brian Briscoe 20:14

Now, my understanding is you you got your, your first GP from that group as well, right?

Andy Vaughan 20:21

Yeah, ironically, like said my first call on that was at the end of February of 18. And one of the guys that was on the call, like, say, as soon as I got and he already had a deal under contract. And then we rock down to probably mid mid March or something, and it fell out of contract. Again, his due diligence and found some stuff or whatever. So well, then another week or two goes by and he came back, he's like, okay, the same same seller has another property off market that I'm looking at in Greensboro, North Carolina. And that's, you know, North Carolina was one of the places I was interested in. There were there were a few markets that just made sense to me, you know, things were growing population growing job growth, all these things. So, North Carolina was definitely on my radar. I like Georgia, and I liked Huntsville, Alabama. That's kind of the areas that I was looking. They came on the call one day, and he's like, Okay, I got this other one under contract. So we start, you know, we're able to watch him through all the different phases and steps and do his due diligence and, you know, secure the funding, and in all the insurance, all these different things. Well, then he came on the call one day, this is probably in April, by this point. Yeah, it was first part of April. And he said, it looks like I'm gonna be a couple $100,000 short on this capital race. And being an insurance background, you know, I've sold, you know, like even even investments, I used to have a series six. So I was able to sell investment type, did a lot of 401k plans, help people doing new ities, all these different things. So it was just natural for me to talk to people about money and investing and all of that. So anyway, little little flag went up a little Ding, ding ding went off in my mind. And I was thinking, you know, this might be a great way to kind of get my feet wet. It's a it's a property that's in the area that I'm interested in. So ironically, he was out in North Carolina at that point, but he was driving, and his call dropped that day on the zoom call. So once he got up, I had to drew I was like, you know, I'm just getting started. So I was like, Look, would I be overstepping the bounds if I reached out to him to see about this deal to see if he'd be interested in partnering or, you know, allow me to come in as a partner? And he's like, No, not at all. So I did a call, actually, I sent him an email, and I said, Hey, I'm interested in this deal. I can, I'm fairly certain I can bring capital to the deal. If it's a it's a good deal. I mean, it's in one of the areas that I'll that I'm interested in. So he sent me all the information. And we probably spent, I don't know, a couple of weeks, going back and forth over it, making sure I had a good understanding of it. And then during that time, it kind of worked out good, where we were moving my oldest son and his wife out to Atlanta. So we were already in Atlanta. And it was only about a, maybe a, I can't remember four hour five hour drive from Atlanta to Greensboro. So my wife and I jumped in the car and drove up there and looked at the property and toured the property and all of that. So, yeah, so I just made a decision and we kind of worked out our deal, because it was just him in the general partnership at the time. So we just kind of worked out the deal between us and he and I, you know, decided to go forward with it. And, and that was our first deal was a 36 unit in Greensboro, North Carolina. Yeah,

Brian Briscoe 24:02

that bring up some some some really good points on that one, you know, just the the importance of networks, you know, so you found your first partner and your first deal because of the network that you were in you know, you're you're constantly talking to people in this case, it was a small group, but you were talking to people who were also interested in investing in finding the apartments and in finding partners and that's how you you basically King came into your first GP. So yeah, like that. So let's let's do this. Let's let's shift gears slightly right now and what's what's your big burning? Why what's the motivation you have for continuing to invest in apartments?

Andy Vaughan 24:43

Well, I mean, you know, we kind of went over that a little bit with with I don't know if you guys ever, ever heard that book Who Moved My Cheese? That's a great little read, but I mean, that's what happened. My Cheese got moved. I mean, I had some good cheese. Yeah, have a good revenue stream and Good lifestyle and, and my cheese got moved and I was like the little rat run around in the rat race trying to find another block of cheese. And, you know, so for me that's that's really what it is it's it's okay, the insurance business, it's been a great business 26 years income went up every year, you know, through 2011, I'll say Obamacare. Yep. Yeah, you know, so it was a good run. But at this age that I am at this this point in the career, I don't, I don't want to you know, I'm at the point where I don't want to do things that I don't want to do, if that makes sense. And I just property and casualty insurance, I just don't want to do. And so, you know, I still have some groups have still got my agency where we, you know, do Employee Benefits stuff. So still got that. But the big burning Why is is to set up revenue stream, you know, whether you call it passive, you call it residual, we call it active, whatever you want to call it just set up a revenue stream to offset what I've what I've lost in the insurance business. Yeah, that's what it is. Yeah, that's, that's

Brian Briscoe 26:18

perfect. That's awesome. Yeah, I

Andy Vaughan 26:20

mean, and honestly, I at this point, I do not care. Like I said, I don't care if it's passive, or it's an active or whatever, you know, early on, you know, I had a number of clients that make still make a lot of money. You know, whether they're physicians or engineers or chiropractors, attorneys, dentists, all these guys that for years, and one of them actually bought an apartment complex himself and thought he could manage it himself. And he gives it was a nightmare. So there's a lot of guys that I've been talking to for years, there were clients and on that we all wanted to invest, quote, unquote, in real estate, we wanted to develop those income streams in real estate, but, but they did not, or could not be a landlord. They couldn't they couldn't manage the property just didn't have the time, the expertise or whatever. So, you know, it's just really allowed me to, you know, to access those guys and find some, you know, people that, that are interested in investing and things like this.

Brian Briscoe 27:27

Yeah. Yeah. So so you're leveraging your pre existing relationships to be able to continue to build your business. All right. So what's next for you right now?

Andy Vaughan 27:38

Well, what's next for me, ironically, you know, to this point, I just closed on a deal in in November. And, and it's, to me, it's kind of like the one of the deals that that I've been looking for, since since 2016. It's not a syndicated deal. It's just me, I don't have any partners in it. But it literally is about three and a half, four miles from where I live. That's huge. But it's, it's a mix. It's a commercial mixed use. So it's got seven apartments, it's got two retail slash office spaces, and it has 49 self storage in the back. And then it has eight and a half acres of undeveloped land that runs all the way back to to an interstate that has a lot of visibility. So what I'm excited about the cool thing is I was able, I was able through a lot of the books that are read and podcasts, I've listened to people I've talked to and networked with of how to ask certain situation, I was able to get into this deal with literally no money out of my pocket. Matter of fact, I was shocked. I wasn't expecting it. But will I let the closing table with $26,000? Wow. Yeah. And like I said, and then I got that land back there to develop. So I've never done self storage. This will be my first foray, if you will into that. But I'm, I'm just now in the process of getting all of the this guy was so old school, I mean, he literally has had a drop box, where people would drop some drop cash in it in an envelope, just write their name on it. You know, so I'm in the process of automating all of that, setting up all their rent online and automated and doing the same thing with the self storage and, and all of that so. So I'm really excited about that. I mean, I'm excited about that eight and a half acres back behind it. You know, the cool thing is, I mean, like I said, it's one of those. It's not super huge, like, you know, a 200 unit deal like we've done, but it's a it's super close. It's no money out of my pocket. It's $26,000 at closing And it appraised for 200,000. More than then I bought it for so I had 200,000 that is suddenly dropped about my bottom line net worth.

Brian Briscoe 30:08

Yeah, net worth jumps by 200 grand in one day. Yeah. I mean, I would do that every day of the week if I could. Absolutely. I mean, that's, that's that's a good deal right there. And I assume you got some really good prospects for cash flow in the future as well. And you know, potential more net worth items if you develop that, that eight acres in the back. So

Andy Vaughan 30:26

yeah, I just got to figure out what I'm gonna do with that. Yeah, you know, whether that's apartments duplexes, more storage, boat and RV, I just, I don't know, that's what I'm exploring.

Brian Briscoe 30:35

But but it sounds like the deal works without that development part in there. So you got plenty of time to figure it out? Yep. But good enough. That's, that's, uh, sounds like a sweet little deal you got on your hands there. You know, congratulations. That's, that's amazing. Yeah, let's, let's shift gears again. And we got Maria, who's been waiting patiently this whole time. ratio is a professional real estate agent in Southern California got over five years of experience helping families buy, sell or invest in real estate. His passion is helping first time homebuyers find their first home. Prior to real estate. He managed a bankruptcy department for a local law firm in Orange County. And you know, that said, Michelle, welcome to the show. Thank you, Brian. pleasure being here. All right. So let's let's do this. Let's Same thing for you. Let's talk a little bit about your background and history. And you What got you into the this multifamily space?

Mauricio Roque 31:24

Well, thanks, Brian. As I said, as you read on my bio, I do residential real estate, this is something that I love doing. I'm on six years now. It's a it's something that I'm very passionate about. I've seen clients grow from the moment I sold on the first house five years ago to now having a bigger house or two or three homes. So it's something that I take a lot of pride in. But at the same time, it's also extremely time consuming. So I would find myself sometimes working 12 hours a day. And after closing a sale, I have this habit of celebrating with the clients where I will bring a champagne bottle, where we decorate the home. And it was a great feeling every time I drove away knowing that I made a difference with that for that family. But at the same time, the next day, I had to start doing it all over again, because I was already unemployed again. So it just kept, just stayed in my head. And I started thinking what if there was a way that I could somehow sell something in real estate, but I could get paid on a monthly basis or on a quarterly basis on a yearly basis, but something where I don't have to start from scratch all over again. Yeah, so that's sorry, to I'm sorry.

Brian Briscoe 32:39

Yeah, I was just gonna say what one of my favourite quotes on and it's not real estate specific, but it's a warren buffett quote, it's, it's if you don't learn how to make money while you sleep, you'll work until you die. And I think that's that's the, you know, lightbulb moment you had there as well was, you know, I've got to be able to figure out how not to have to repeat this every single time.

Mauricio Roque 33:01

Exactly. And I think you're right, that's I guess you would say that would be the lightbulb moment. I remember one time driving, the sun was setting in beautiful Southern California I was driving on the freeway. And I just kept thinking if as great as I feel now it will I will feel even better if I knew that I would keep getting paid on this instead of tomorrow having to start from scratch. So that's one thing that got me a start thinking or looking into it. The other event was one of my clients was buying a triplex I was helping them buy a triplex and it was a great property with new roof. tankless water heater, you name it, great tenants, supposedly. And once I gave him the keys, my client, my friend Tom, he said, Hey, Marina, did you see that building the underside of the freeway that white building that 10 or 12 units, we want something like that in 10 years. So you need to figure out a way to help us get there, whether you get your commercial licence, whatever, you need to figure out a way to help us get there in 10 years. So I started thinking about it looking into it. Unfortunately for my clients, one of the tenants did not pay since day one. And Brian he in completely kill their their cash flow for year one, one tenant. So I started looking more into that building that they mentioned, and that's how I came across multifamily. And I realised, so if they had invested in multifamily, if one tenant doesn't pay, and it's 30 units, and you plan for it, they wouldn't be hurting the way they are now. Yep. And at the same time, guess what, if I help them get it, I get residual income. So that's how I got started. Nice. Nice. I like that.

Brian Briscoe 34:40

Yeah, and that's absolutely true. I mean, the more units you have, the more you're shielded from, you know, one bad tenant creating losses and you know, I know the the rules changed the law change in Southern California recently where it's been almost takes an act of God to get a tenant out of a property now, but that's unfortunate. happened, but

Mauricio Roque 35:01

yeah, and got it. That's what happened to my clients. It took them about four or five months and the guy just stay there and he just completely trashed the place and they had to pay legal fees, and it just completely cured the cashflow. Yeah,

Brian Briscoe 35:14

yeah, yeah. So so you you decided, hey, I want to do this multifamily thing. You know, there's, there's a little bit of economies of scale, there's, there's less risk, because we can we can put the risk over several different units. Where did you go from there? I mean, how did you how did you decide to get into it?

Mauricio Roque 35:30

And as you said, there's less risk. I think that the, what I love the most is that you plan for it. So when I saw that you were people were underwriting at 10% vacancy. That just it just made perfect sense. So after that, I started looking more and more into it. I started learning and started going on bigger pockets. I started learning to podcasts. And that's when I came across Michael Blanc. And I started listening to all his interviews, and it just made sense. At that point. I knew that that's what I wanted to do.

Brian Briscoe 36:00

Yeah. Oh, good. Good. Yeah. Glad glad you found it. And we're glad we met, we actually met through the the Michael Blanc programme, as well. So. So that said, What's, what's your motivation? And we talked a little bit about it. But let's see if we can just, you know, boil it down into a couple sentences. What's your big burning? Why for doing this?

Mauricio Roque 36:17

When I got started, besides having time, and financial freedom, the biggest reason why I got started was to retire my wife. My wife is an industrial engineer. She loves her job, but is very stressful. And she was working nine to five, and I'm working Monday to Fridays, and I'm working weekends, mostly weekends, from 7am to 7pm. realtor hours. Yeah, exactly. So as much as we love spending time together, the only time we had was Friday nights, which we call our date nights. So we also talked about starting a family and I thought there's no way that we're able to spend time together. I mean, if I can imagine my wife having to leave our baby at home and her having to go to work, so I knew that multifamily was the vehicle I just needed to step on the gas.

Brian Briscoe 37:05

Yep. So yeah, big burning why I love that retire your wife, you know, and you guys had your first child earlier this year, correct?

Mauricio Roque 37:12

Yes, we did. We when we went to we ended up going to Michael Blanc event last year in Texas, that's when when we met. And when we went to that event, Brian, our goal was to find the resources, find a mentor, we had everything written down is going to take us two months to learn the business. After that in six months, we should have our first property and after that we are going to start having a family. What we didn't know is that when we were at the event, God's plans are always different. We were already pregnant. So we were already about four weeks pregnant. And we didn't know. So we found out three days after we came back. And at that point, everything completely changed. The y just became bigger. And it just became a race against time.

Brian Briscoe 37:59

Yeah, yeah. So far, you've you've had a little bit of success. Can you tell us what you've done so far? in the industry?

Mauricio Roque 38:05

Yes, I, I got an lmia accepted earlier this year in Michigan. And this was before a week before the lockdown. So I flew out there with one of my partners, we looked at the property we sealed the deal with a broker, unfortunately, because the lockdown, the seller ended up walking away. So it took us a few months to get back on track. But right now we have a property 41 units under contract in Kalamazoo, Michigan.

Brian Briscoe 38:30

Okay, good. Good. So that that's awesome. You know, congratulations on that, you know, and it's been fun following your your progress. So that said, we got Andy on the line here, ratio, what you want to ask him

Mauricio Roque 38:44

is, Thanks, Andy, you mentioned how you came across your first deal. You mentioned how you contacted someone and you had some resources, some capital. My question is, is that something you wanted to do since the beginning? Is that the role that you wanted to play in the beginning capital raising investors relations? Or were you looking at finding deals instead, and you just happen to land and capital raising?

Andy Vaughan 39:07

Now, you know, it's kind of interesting here, because your your background is, is, you know, real estate agents selling real estate, right? So yes, you kind of understand that process of how people come to you and find properties. And it's kind of the same way in this. I mean, it's a little different, but you know, same relationships and things like that. To me, that was kind of the foreign side of the business, if you will. Yeah, hadn't done a lot of that. But it was just natural for me to to to be I'm not gonna say the but but one of the capital raisers, if you will, in a deal. That's what I enjoyed the most. I know it sounds crazy. A lot of people kind of get a little afraid of that and talking to people about investing and I don't know it's just now For me, like I said, with a background in insurance, and you know, with me having, you know, series six allows, you know, allowed me to, you know, do mutual funds and other investments for people. So, I was kind of used to talking to people about those type vehicles already. So it was just a, it was just an easy segue, if you will. And like I said, I already had these clients and friends for years that we'd all kind of made an agreement, if you find something, let's let's, let's look at it, let's talk about doing it. So already had people that are on my list, if you will, that I was going to take these investments to to talk about perfect, I love that

Mauricio Roque 40:40

you mentioned that you kind of enjoy it, because that's exactly how I feel I can talk about investing all day long. Because I see the other side of the fence, I see the benefits. And so that's kind of where I'm heading towards where I'm leaning towards right now I wear different hats. But if I could, I would spend most of my time just talking to people about the opportunities.

Andy Vaughan 41:04

Yeah, around ironically, like the deal that we just talked about that I did last month, I've done if you will, a part of five deals. And this was the first one where I've actually taken it from start to finish, like you were talking about that, you know, the relationship with a broker and finding the property and doing the animal analyzation analysing it, and the relationships and all those sorts of things that go into it. This is the first time I've done that. And I'd already been in five different deals. So I've just had better I guess better success at like, like we talked about earlier, Brian brought it up is networking with other people and creating those relationships, and then over a period of time getting to know them and what sort of app, you know, what areas are they looking? What sort of success had they had on past projects? You know, when they were in a bind, if you will? Or a tough time in the past? How did they handle it? All those sent deals. So it allowed me to kind of pick, if you will, people that I wanted to partner with or groups that I wanted to partner with? So you know, just that was a more natural thing for me, it's just to, to look at bringing the capital to the deals. Perfect, perfect.

Mauricio Roque 42:25

Well, I have another important question. This is something that I've been thinking about over the past couple months. When you talk to investors, what is your main focus? Do you focus on the deal? For example, the city see growth, rent growth, etc, etc? Do you focus on their returns? Or do you focus on yourself and your track record?

Andy Vaughan 42:48

First of all, what I do is I, I either have or create the relationship with the potential investor, I'll say, and I found that after I sit down with them, or sit on a call or whatever, and we discuss what it is they're looking for, because, you know, if, let's say, for example, the guy that I was telling you about that that had the piece of land that was going to do the duplexes you know, even though I didn't do that deal, when not when I was in the, in the deal, my first deal in the capital raising part of it. I called him up not not to invest in it, but to tell him, thank you. Because if he hadn't brought that, to me, it hadn't, you know, those kind of things that set things in motion to get me going. So I just called him up to tell him he's a he's a dad of one of my good friends. So I called him up to tell him Thank you. He's like, for what so we get to talk and then everything. And then then he's like, really mean in Pat investing passively, because all he had done was active. He had been a landlord, hid, fix and flip. I mean, he'd done all these types of things, can never done anything passively investing in real estate. So I wasn't calling him to get into this, but he did. So when I sit down and talk to someone, find out what they want, what they're looking for. There's a lot of people that love development. Like for example, I got a physician that's probably 3638 years old. He's now invested in three of my deals. He doesn't need an income stream right now. I mean, he's a physician. Right? So what he wants is a big pop five, seven to 10 years from now. That's what he wants. He's not looking for that income stream right now month to month, but that 73 year old guy that I was talking about that I called, he's in different deals that I've done because he is looking for that preferred return that that revenue stream on a Regular, like you were talking about that quarterly basis. So two different types of investors investing in two different types of deals. So I sit down with the people to figure out what they're looking for. I mean, I would never, like the 70 something year old, if I've got a, you know, 146 value add deal in Columbia, South Carolina, that, you know, we're going to plough this capital into, we got a heavy lift, and it may be three years before we're actually making money on it, I wouldn't bring him that kind of deal. That's not what he's looking for. So, so that's, I think, most important, and it, it carries a lot of weight with the potential investor, when you do that, because they, they see that you're not they're just trying to sell them on what you've got, here's my investment deal. You know, they see that you genuinely have their best interests at heart. And then you when you find a deal while they're looking for, then you bring that to them. That makes sense.

Mauricio Roque 46:00

Yes, it absolutely does. Thank you so much, Andy, that really helps a lot, because I've been just debating on what to focus on, when what I should be focusing on is on the investor itself, and their needs and their family's needs and their goals. So that's fantastic. I have one last question. I know that you come from the insurance industry, and you've dealt with a lot of high net worth individuals. I'm currently raising capital from friends and colleagues, but I live in an area where there's a lot of wealthy people. So sooner or later, I'm going to be talking to them. Do you have any advice for me when talking to a high net worth individual or presenting an opportunity to a high net worth individual?

Andy Vaughan 46:43

I mean, you know, I would say just having the realisation that there are people to just because their high net worth, they put their pants on one leg at a time, just like we do it so so it's the same way. I mean, I would, the process would be the same for me. I'm not saying that it's the right way, or it's the only way. But the way that I would do it is I've met that person somehow. Either, we have a mutual friend, and they've reached out to me, or we played in some charity event golf tournament, and we were happy to be on the same team, or somehow or another, I met this high net worth client, right. So it's all about conversation and setting up the next meeting, setting up the next time where we can talk about it. So it's I mean, if I'm, if I'm talking to that high net worth individual, and, you know, I can learn real quick in a five minute conversation at the golf course that they absolutely have no interest in real estate whatsoever. I'm not, I'm not gonna pursue it any any further. So it's all about To me, it's all about relationships. I mean, that's what that's what the insurance business, you know, in this in this business, like you're talking about, there could possibly be list. I mean, it's possible there could possibly be somebody listening to this today, that I've never met before that, through this, or whatever will reach out to me, and we ended up meeting. Now. That's possible. But that's not how that's not how I've done it. That's not how I've done it so far in real estate. And that's not how I built the insurance business. It was always relational to me. Number one, I think that when it's relational, you, you, you really tend to put their needs and desires and what they're trying to accomplish first, rather than your own. Right. So, to me, it just makes more sense. It feels more natural to me, it's harder for me to do business with or you know, even in the insurance business, if it's a transactional type deal. Somebody just calls in, I don't know them, they don't know me, and I just so happen to have the best product and the best price and they do well. I mean, if they came to me based on price only, they're going to at some point, leave me on price. So I haven't there's nothing unique about me, right? But if I've got a client that we go to church together and have for the last 25 years and our kids are about the same age and played ball together, and we go play golf together, we vacation together, and there's a true relationship. That makes all the difference in the world when that insurance company goes up on their rates. They're not going to be so quick to leave me. Same thing in this business. If you can create the relationships long term, I mean, think about it. You mentioned earlier in your business you would like to truly be able to sell a piece of real estate but get paid on it every month. Think about that. With with with investors, think about how do you today? mauricia? 42? Okay, 42. So think about when you're 52. And when you're 62. And you still have those same investors that invest with you in the next year, they're still investing with you 20 years from now. Right? I mean, that's what that's what you want. That's what I want. It's not a transactional deal. For me. It's just it's relational.

Mauricio Roque 50:29

Yeah. Yes. helps a lot. You know,

Brian Briscoe 50:33

and I wrote down, I mean, I think there's a huge tweetable quote, you know, try to make you famous over this anatomy. But if they come to you overpriced, they'll leave you over price. You know, I love that. Yes. We do very, very well said on that one. And I'll just tell you from, from our experience, you know, for x capital, we've, we've raised about $10 million dollars in the last two years. And I would say a lot of that money come from people who they're not investing with us the first time we talked to them. I mean, that's, that's almost impossible. And quite frankly, you know, that was eerily silly looking for people, you know, who I could meet one day, and sell them the deal the next day, and that that just doesn't work. And something with the high net worth investors is they have a lot of people who are trying to sell them stuff, you know, if you're in a high income field, you are getting people who are just pinging you left and right on, hey, here's my investment, opportunity invest. So I think what Andy says is actually perfect, because you're not transactional, you're not going to them saying, hey, I want to be your friend. So you, because I want you to invest with me, you're looking at it from the relationship. First standpoint, you're looking at the 10 2030 year down the road standpoint, and you're working on that relationship. And that's,

Andy Vaughan 51:53

I mean, what I've done in the past, and I still do is, it's almost like I try to talk people out of it. You know, in other words, I learned this in insurance businesses, like, I try to try to realise this person over the next, you know, dealing with them over the next 20 years of my life, is that going to be an enjoyable experience? Or is it going to be a nightmare experience? And if if we just don't get along, or G Hall, or I feel like it's gonna be an issue, then I would always tell them, you know, what a bit, I think there's probably another insurance agency in town that that would be more suited to you. And it's the same thing in this. If, if, if there's this person that you know, friend family, and they literally have $51,000, set aside, to invest in something, and you're talking about them investing 50,000 with you, I wouldn't do that I would talk them out of and tell them this, this is not for you. I mean, it's not what you need to do.

Brian Briscoe 52:58

I've got a perfect example for that. I mean, all three of us were at microblogs dealmaker live in Dallas, you know, I had somebody approached me. And we had corresponded several times prior to that. And so it wasn't like it was the first time I met him physically. But he approached me, he's like, I want to invest in your deal. But what I also knew about him is he had just like Andy said, a very limited stack of capital. And he wanted to put it all into my deal. I said, Yeah, sure, great. And I started thinking about it. And I realised what he wanted to do is be a GP member, be a syndicator, find his own deals. And I knew how much money that you needed to be able to do that you have to pay your earnest money deposit, you have to pay your inspection costs, you have to pay some due diligence, you know, a lot of risk capital. And at the next break, I found him and I said, No, you're not investing with us. And, you know, I just said, you need that you're gonna need that money to get your own GP, you're gonna need that money. And I'll tell you what, you know, he's been one of our best partners, he's partnered with on to deal sense. And that's one of the things that, you know, I look back at and, you know, had I made it transactional it, you know, I don't know if we'd have the same relationship we do right now. But it ended up being a Hey, I could take your money, you're right. But I think you'd be better off using that money pursuing your own deals, and building your own business instead of investing in ours. But yeah, that said, we're, we're about out of time here. So I've got you know, first of all, thanks so much to both of you for coming on the show. One of the funnest conversations I've had I see that a lot but this is this is this is fun, you know, I've known both of you guys for a little while now. So it's it was a lot a lot more natural in a lot of ways and and hit home a little more. So end of the day one question for each of you. How can our listeners learn more about you and do you go first?

Andy Vaughan 54:53

Well um, name of my company is back nine investors so websites back nine investors dot com. Easiest Way, though, if if they want to put together something that's just kind of, you know, quick little story, I guess how, how Rob that the multifamily asset class and why and all the pros and cons, if you will, they'll text bat nine to 3777. So just the two words back 9233777 Okay, then they'll get on my list and I'll send them that that report. And maybe we can set up a call and talk and hopefully be able to help somebody else.

Brian Briscoe 55:33

Okay, and we'll have that in the show notes. So text back nine, two words separately. 233777 for the free report. All right. ratio, same question for you. How can the investors learn more about you?

Mauricio Roque 55:43

Yes, the easiest way would be my website, which is www dot brickstone. Investment group.com. You can also find me on social media, Facebook, LinkedIn, and Instagram. And I just wanted to thank you both for having me on this. These answers have really helped a lot. Thank you both.

Brian Briscoe 56:01

Yeah. Thanks, Maria. I appreciate it. And I look forward to hearing more about that Kalamazoo deal, you know, offline later, so absolutely. All right. Well, once again, thank you to both of you. And that's a wrap.

Thank you for listening to the tiger 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 podcasts or email us directly. If you're still listening, you obviously like the show, so call your phone app, subscribe, and leave us a five star rating on your favourite podcast app. And we'll see you again next week.

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