Multifamily Investing in Houston Texas!

On This Episode of Peak Market Watch...​

Multifamily Investing in Houston Texas!​

Robert Martinez from Rockstar Capital will be sharing insight into what markets in Houston he likes and why, along with his insight into what the Houston multifamily market is looking like today!

Need Multifamily or Commercial Real Estate Funding?

Get in touch with our multifamily financing experts now and get a free loan quote!

Show Host

Guest Speaker

Co-host

Connect with Robert Martinez

  • https://www.rockstar-capital.com/team-member/robert-martinez

Connect with Ben Suttles

  • Email: ben@disruptequity.com
  • https://www.disruptequity.com/
  • LinkedIn: https://www.linkedin.com/in/bensuttles
  • FB: https://www.facebook.com/ben.suttles2

VIDEO TRANSCRIPTION

00:00
evan i joined through a real estate club
00:02
uh and i picked up a lot of the
00:04
knowledge and the education that i
00:05
needed
00:05
uh and within that club i met a lot of
00:08
people
00:09
uh i networked within the group i met a
00:11
fellow investor who he and i decided to
00:13
start a
00:14
property management company together um
00:16
over the next three years we acquired 10
00:18
properties 2 000 units i was the
00:20
operating arm
00:21
um that was in 2007 so it was right
00:23
during the recession
00:25
not too dissimilar to what’s going on
00:26
right now with kovit and so
00:28
um i was able to get us the performance
00:30
we needed we refinanced three times
00:32
uh during that time and we stayed above
00:34
water uh in 2011
00:36
he and i had a parting of ways i started
00:38
rockstar capital
00:39
uh over the next 10 years this is our
00:41
10-year anniversary in fact it’s going
00:42
to be
00:43
in two months so i’m super excited about
00:45
that um we’ve acquired
00:47
22 multi-family assets totaling 4 200
00:50
units
00:51
um with 13 cash out refinance events
00:53
during that time
00:54
our company as a whole has earned 18
00:57
city state and national apartment
00:58
association awards
01:00
uh and um to my knowledge i am the
01:02
country’s only two-time
01:04
national of independent apartment owner
01:06
of the year
01:07
yeah congratulations to to all that
01:10
success right so that’s a
01:12
a very impressive track record in a
01:15
a comparatively very short period of
01:18
time
01:18
right so yes it’s it’s ten years but
01:21
doing all this within ten years with
01:23
large
01:24
uh multi-family communities that’s
01:27
definitely
01:28
a major achievement uh so
01:30
congratulations uh to that
01:33
uh i would say today really we
01:36
have the privilege to hear from you and
01:40
obviously my colleague ben will also
01:43
share some of his uh knowledge here
01:46
uh today we really have the special
01:48
privilege to talk about the houston with
01:51
with robert as one of the top experts in
01:54
multi-family investing in the houston
01:56
market there are not many
01:58
uh property owners in in the
02:01
greater use in msa with that many
02:03
multi-family properties
02:06
so thanks again for for willing to come
02:09
on with us and share your knowledge
02:10
uh robert uh so
02:14
maybe you can tell us how how did you uh
02:17
start out initially before you get a
02:20
little bit more into the current
02:21
environment how did you pick some
02:24
markets
02:25
i i know you have a number of properties
02:28
i think you started out if i’m
02:30
not mistaken in in humble
02:34
right so you had quite a number of very
02:36
great successes in humble did you
02:39
pick that market specifically or was it
02:42
just because there were the
02:43
opportunities and you jumped on those
02:46
yeah you know it’s a really good
02:48
question because i think a lot of people
02:49
need to plan
02:50
ahead they need to know where they want
02:51
to be they’re going to have to assume
02:53
success not failure they’re going to
02:54
assume that this is going to be
02:55
something that they’re going to do long
02:56
term
02:57
so you definitely want to make sure that
02:58
you know where you want to invest in
03:00
uh that’s not what happened with me
03:02
initially my first deal as
03:04
the gp came in 2010 i bought a deal
03:07
called water chase apartments that we
03:09
paid
03:09
24 500 a door for
03:13
and when i had a lot of success with
03:15
that portfolio i’m sorry with that asset
03:17
excuse me
03:17
that i liked the sub market and i
03:19
started to buy another deal i bought a
03:20
deal across the street
03:22
uh which is called north lake manor 126
03:24
units
03:25
uh a year later um i decided that i
03:27
wanted to go to a different part of town
03:29
but then another year later i came back
03:31
to humble and so today
03:33
we own eight properties that are in the
03:35
humble zip codes
03:36
so roughly 73 of the
03:40
workforce housing that’s in that’s in
03:42
those areas and i learned a lot right
03:43
because you can control rents
03:45
um you know if there’s a there’s an
03:47
uptick you go with it there’s a little
03:48
bit of a downtick you go down too but
03:50
you get economies of scale you get to
03:51
learn the market really well
03:53
brokers know you’re mr umble so whenever
03:55
there’s a deal around the area they want
03:57
to give you a call first
03:58
so forward thinking ahead that’s really
04:00
good when people associate you
04:02
with markets i definitely think you want
04:03
to pick
04:05
markets where the schools are good i’m
04:06
not a big fan of houston proper itself
04:10
i don’t like to invest in southwest
04:12
houston i don’t like to invest in the
04:13
heavy
04:14
urban areas i want to be where the
04:15
suburbs are the reason i want to be
04:17
where the suburbs are because that’s
04:18
where the schools are
04:19
and if there’s good schools there
04:20
there’s going to be families and if they
04:22
move into
04:23
one of your apartments chances are they
04:24
have a brother and a sister
04:26
so there you’ve got all the boxes
04:27
checked there good school district
04:29
family brother and sister they’re
04:31
probably going to stick around and stay
04:32
in that apartment
04:33
a lot longer than the normal rancher
04:35
who’s a single who’s this you know like
04:37
a single
04:38
uh young couple an empty nester who
04:40
might be living closer to town for work
04:42
or what have you
04:43
um that’s the prime reason why people
04:44
move to suburbs they it’s they want to
04:46
get somewhere
04:47
where they can afford the the the cost
04:50
of housing and where their kids can get
04:51
a good education
04:53
and i would say i would say even this
04:54
day these days too that’s actually a
04:56
pretty smart play because a lot of the
04:58
urban areas because of coven right a lot
05:01
of people trying to move out into the
05:02
suburbs get a little bit more space
05:04
you know and so that’s why they’re kind
05:05
of saying suburbs and even these
05:07
secondary and tertiary markets
05:09
are starting to become even hotter than
05:10
they were um
05:12
just because of cobit right you know
05:14
absolutely absolutely
05:15
you got to pay attention to all that um
05:17
you know i think you got to think ahead
05:19
too it’s like i want to be
05:20
in an area that i know you know now i
05:22
didn’t ever imagine getting to 22
05:24
properties that wasn’t really on my goal
05:26
i didn’t imagine having 4 200 units i
05:28
thought i was gonna buy
05:29
one deal a year and that’s what i did
05:30
one new year 2010 2011
05:33
2012 2013. it wasn’t until 2014
05:37
when i bought multiple deals that year
05:39
and again uh half of those half of the
05:41
deals that i bought were in humble
05:42
but the new deals that i did buy were in
05:44
other sub markets i’ve got deals in
05:46
rosenberg and richmond
05:47
right and they’ve done very well for
05:48
themselves because right now if you’re
05:50
following the demographics
05:52
that’s one of the hottest spots of
05:53
houston is that richmond rosenberg
05:55
we’re very fortunate to have two deals
05:56
already there a smaller it’s 108 units
05:59
and a deal that’s uh
06:00
uh 272 you know so we we’ve benefited
06:04
that but it’s oh it’s a little forward
06:05
thinking
06:06
don’t just buy to buy you ask yourself
06:08
can i buy here and
06:10
why i want to buy there again it wasn’t
06:12
everywhere we go we want to buy around a
06:14
thousand units if we can that’s the plan
06:15
can i build a
06:16
can i own a thousand units in that sub
06:18
market and if i don’t then i don’t want
06:20
to be there
06:21
and you kind of mentioned economies of
06:23
scale earlier right you know obviously
06:24
that’s what that’s what people need to
06:26
that’s the that’s the takeaway from that
06:28
comment right is that
06:29
if you can have that right you cannot
06:30
only control rents right but
06:32
you’re gonna get you can maybe you can
06:34
share maintenance people maybe you can
06:35
share leasing staff maybe you can do
06:37
these creative things that if you only
06:38
have one property and some one-off
06:40
you know market that’s almost a
06:42
forgotten deal you know it makes it more
06:44
challenging to manage that right
06:46
you know so one question i did have you
06:48
had mentioned
06:49
she’s kind of taking a step back you
06:50
mentioned that you don’t like houston
06:52
proper
06:53
right so you know you’re not talking
06:55
about the houston msa when you say that
06:56
and i know what you’re talking about but
06:58
i want to just clarify this for people
06:59
that aren’t familiar with houston
07:00
you’re talking about houston isd right
07:03
and where
07:03
all that encompasses right yeah
07:05
absolutely because the schools aren’t
07:06
any good
07:07
so okay so for our listeners that are
07:09
outside of the use scenario aren’t
07:10
familiar with houston right
07:12
he’s talking about hisd which is one
07:14
actually one of the biggest school
07:14
districts in the country
07:16
but now one of the best one of not one
07:18
of the best and certainly not one of the
07:19
best in the houston msa
07:21
so robert has a really good point there
07:23
that he’s chasing deals and better
07:25
school districts
07:26
in the greater houston area right you
07:28
know because ultimately like you said
07:30
you know families are going to follow
07:32
the good school districts you know and
07:34
if
07:34
and we have people that will they’ll
07:35
lease just in our property just to be in
07:37
the school district
07:38
right it’s not and they’ll sit there and
07:40
they’ll take rent increases and
07:42
you know because ultimately they are
07:44
there for their children to go to school
07:45
there
07:46
right that is the number one reason why
07:47
they’re staying there right and so if
07:48
you
07:49
take care of them you instill that sense
07:51
of community you take care of the
07:52
families you
07:53
you you retain them you know you can
07:55
have a success
07:56
you know a long-term tenant and have a
07:59
lot of success in doing that so yeah
08:01
right but remember remember though it’s
08:03
not it’s not a one-size-fits-all you
08:05
know
08:06
i did buy a deal in 2012 um and i bought
08:09
it because it had long-term historical
08:10
occupancy
08:11
but it was 108 units all one beds and it
08:14
was in houston city limits
08:15
and it’s zoned to hisd but what was
08:18
interesting about that deal
08:19
is that it was predominantly jewish
08:22
based
08:22
okay and they have the sabbath and they
08:25
have other things going
08:26
on on the weekends so there was
08:27
literally a synagogue
08:29
that was like a quarter mile down the
08:31
road it was literally almost across the
08:33
street
08:33
uh there was a retail center which had
08:35
everything that you needed right because
08:37
i think part of the the faith is they
08:38
they can’t drive vehicles right there
08:41
was a neighborhood walmart there aren’t
08:43
very many of those in houston
08:44
there was a neighborhood walmart right
08:46
across the road
08:47
and that deal did really well for us
08:49
even though it was all one beds and it
08:50
had nothing to do with school districts
08:51
because it was a different demographic
08:53
so again i’m talking about the families
08:55
and the suburbs but there is
08:57
other ways to skin the cat you just got
08:59
to see if that way fits for you what is
09:01
that
09:01
what is the um the advantage of that
09:03
property the benefits for us
09:05
is that it was right next to everywhere
09:07
anybody
09:08
living at that property who was not
09:10
allowed to drive a vehicle
09:12
right would be able to get to and it
09:14
worked out really well for us that’s
09:16
that’s an excellent point right i think
09:18
you what you really bring
09:19
to the table here is the message
09:22
understand the demographics and
09:24
understand your tenant base
09:26
right don’t make don’t just make
09:28
high-level
09:30
assumptions based on what you read on on
09:33
co-star reports or order market reports
09:36
but really study
09:37
your small sub market where you look at
09:40
that property
09:41
and how that tenant base operates on a
09:44
day-by-day basis
09:47
and we’re having you mentioned that too
09:48
because a lot of guys when they get
09:50
started
09:50
they don’t have the market research you
09:53
know if you’re working with a good
09:54
broker whether it’s the mortgage broker
09:56
or even the sales broker
09:57
they should be sending you reports but
09:59
as soon as you can
10:00
get to the point where you have enough
10:01
money coming in that you can pay for
10:03
real data
10:05
you can do it costar is expensive but
10:07
you get what you pay for
10:08
for sure i’ve paid now i paid 99 bucks
10:11
for something for i think o’connor back
10:12
in the day
10:13
when they had their own their own
10:14
information and i’m paying thousands of
10:16
dollars a month for a co-star
10:18
but we’re in a different scale today so
10:20
we can afford it but man what a
10:21
difference in the data
10:22
data is is knowledge knowledge is power
10:25
you got to have the data to make the
10:26
right cost
10:28
absolutely i was going to ask so you
10:30
know you kind of talked about
10:32
100 units 200 units what is your current
10:35
box like you know what are the deals
10:36
that
10:37
rockstar capital is looking at in 2021
10:40
and beyond right
10:41
you know yeah obviously as you scale up
10:42
you’re probably looking for something a
10:43
little bit bigger
10:45
you know um you know what is that what
10:46
does that box look like
10:48
yeah and i guess it just depends on
10:49
where you are in your evolution of your
10:51
of your
10:51
buying cycle an early guy like me i
10:54
wanted 100 unit boxes
10:55
you know my first it was 118 a 126 a 108
10:59
a 125 a 162 a 151 these are smaller
11:03
boxes
11:04
that i could control that i could have a
11:07
say so
11:08
when you get to be much larger you lose
11:11
a little bit of that control
11:12
now what happens is though you realize
11:14
that as you get larger and larger
11:16
fees are important fees are important to
11:18
what the management
11:19
fee is because the more units you have
11:22
the better quality of staff that you can
11:23
hire
11:24
absolutely the quality of manager at 100
11:26
unit property let’s say you can pay
11:28
them 45 000 a year when you have a 300
11:30
unit property
11:31
you can’t pay 45 000 a year and get a
11:34
quality staff member
11:35
you’re now looking at 60k a year or 70k
11:37
a year
11:38
but i can tell you know what i know now
11:40
when you’re paying for more
11:42
you’re going to get more right a couple
11:44
of leases more a month more than covers
11:46
that person’s salary so as we’ve grown
11:49
and we have scale now i mean i’ve got 22
11:51
managers
11:52
you know um but we’re look our last year
11:54
was 458 units
11:56
but now i can afford to pay a manager 80
11:58
to 90 000
11:59
because she’s overseeing 400 000 worth
12:01
of collections
12:02
yep you know per month and she has a
12:05
team
12:06
and what is her track record she’s
12:07
basically running a little city right
12:09
so you’ve got to be able to the the the
12:11
doors matter i think grant creditor has
12:13
to say that right more units is better
12:15
he’s 100 right because more units gives
12:17
you power
12:18
you know what else is important too with
12:19
units when you have revenue you also got
12:21
a bigger marketing budget
12:23
yeah if you’re not marketing on social
12:24
media today then you’re going to go out
12:26
of business real soon
12:27
if you don’t have a brand you’re going
12:28
to go out of business real soon um
12:31
a 500 ad on facebook is
12:34
costs the same for 100 unit property or
12:37
a 400 unit property
12:39
but it’s a different percentage point of
12:40
the overall budget right so more units
12:42
is better you’re going to get more
12:43
exposure
12:44
so it’s really so today’s to rockstar to
12:46
answer your question
12:47
um we go bigger i mean it’s going to
12:49
have to be in that 250
12:51
plus range uh to get my attention and
12:53
again it’s gonna have to be also in an
12:54
area
12:55
that i see myself buying more today
12:56
we’re we’re issuing a letter of intent
12:58
on a deal down down south and i wouldn’t
13:01
be doing it if i didn’t already have two
13:02
deals nearby
13:04
yeah but i’m excited now i know what the
13:05
sub market is and that’s everything too
13:06
when you own a sub market
13:08
you want to do one market survey so in
13:10
your region or whoever it is going there
13:11
they know where the rents are
13:12
that’s just one less item that they have
13:14
to worry about so
13:15
i mean once again it goes back to your
13:17
your meta point here on a lot of this is
13:19
is you have economies of scale
13:21
right and that goes back to you know to
13:23
you know
13:24
even if even if you don’t have 15
13:26
different properties altogether
13:27
if you have two or three big ones it’s
13:29
the same thing right you have enough
13:30
money getting generated to come in
13:32
and ultimately you know uh get the right
13:34
staff
13:35
and get the right budget in place you
13:37
know and and be able to scale from there
13:39
i recommend anybody out there um
13:42
you you need to cut your teeth on the
13:44
smaller deals but as fast as you can get
13:46
to the larger deals
13:47
yeah yeah that’s where you learn to have
13:49
you got to get creative on those smaller
13:51
deals right you know that’s that’s the
13:52
that’s the most important thing to kind
13:53
of learn is
13:54
those are the deals that you really
13:55
might have to roll up your sleeves and
13:56
go help
13:57
you know you know i’ve been out on
13:59
properties you got to you know roll up
14:00
your sleeves you got to paint maybe
14:01
sometimes
14:02
you got to help trash out units because
14:04
that 100 unit that 90 unit that’s kind
14:06
of a weird
14:06
that’s kind of a weird unit count right
14:08
where you know maybe you have you know
14:11
a person and a half outside maybe you
14:12
don’t maybe you have you know one person
14:15
inside maybe you don’t maybe you’re
14:16
sharing resources and you’ve got to get
14:17
creative there
14:18
um and sometimes getting creative means
14:20
you got to step in and do it yourself
14:21
right you know
14:22
absolutely here’s everything too if you
14:23
have a thousand unit portfolio
14:25
do you want to spread on 100 unit on 10
14:28
deals at 100 units each
14:30
or you want five dollars or 200 units
14:31
each right it’s easier to get to them
14:33
all
14:33
and guess what because other people
14:35
recognize that units do matter
14:37
you’re going to get more attention on
14:38
the sale right you’re going to get more
14:40
and more buyers
14:41
on your 200 300 unit deal then you would
14:44
be on your 50 unit or 100 unit deal
14:45
that’s a different
14:46
completely different buyer right and
14:48
you’re going to get more attention on
14:49
the deal
14:50
we bought where we closed it was for 458
14:52
units
14:53
kobe recovered impacted it only had 11
14:55
offers but a year earlier that would
14:57
have had 31 offers
14:58
it just you know that you know there
15:00
there was the colbit impact um
15:02
yeah let’s let’s follow that thread
15:03
though let’s follow that thread because
15:04
you just brought up a very very good
15:05
point right obviously covid
15:07
has changed the buying and the selling
15:09
process right at least over the last
15:11
10 12 months right and i think it’s
15:13
going to continue at least for the next
15:15
probably three to six
15:16
right you know what what are you seeing
15:19
in the market in terms of
15:20
you know offer sent you know tours
15:24
you know demand supply you know the
15:26
whole buying and the selling
15:27
you know part of this process i mean you
15:30
know are you still seeing a lot of
15:31
demand coming into the to the houston
15:33
market or you know kind of
15:35
i guess educate our our listeners a
15:37
little bit on it what you’re seeing
15:38
you asked a lot of questions or so on
15:39
that subject because there’s a lot of
15:41
places to go with that
15:42
i think demand towards the end of q3 q4
15:45
started to slow down
15:46
i’m seeing it pick oh no i’m sorry
15:47
demand demand’s always been there excuse
15:48
me supply has not been there
15:50
now at the beginning of the new year
15:51
you’re seeing supply pick up you’re
15:53
seeing opportunities there
15:54
i also think because you’re getting
15:55
closer to when some of these guys took
15:57
uh took the forbearance a year ago
16:00
right or nine months ago and now it
16:02
might be time to pay the piper
16:04
um i think you got to be very choosy on
16:06
what deals you want
16:08
i think there are some parts of the city
16:10
that are doing very closely resilient
16:12
there are other parts that are that are
16:13
struggling i’m very happy that
16:14
multifamily as a whole has done well
16:17
um we have six data points on our on our
16:19
reporting
16:20
and we know exactly where collection
16:22
should be right now and the 20th of the
16:24
month we’re at around
16:25
90 collections but there was a point in
16:29
time where
16:30
the 20th of the month we were at 96
16:31
percent collections you know
16:33
with kobe that was just not true not too
16:34
many months ago so it’s getting harder
16:36
and harder to collect the rent
16:38
um they keep kicking the can down the
16:39
road with the cdc you know
16:41
um pushing it back to mars i’m here in
16:43
september
16:44
you know the thing is owners got to get
16:46
more aggressive
16:47
you have to realize you know what i know
16:49
you have money
16:51
i know that unemployment is 6.8 percent
16:54
i know that that’s exactly where it was
16:55
during the obama administration
16:57
and we were hitting record collections
16:58
and record noi so i know you have money
17:01
i know there’s a new aid package coming
17:03
out that’s gonna result in around two
17:04
thousand dollars a person
17:05
so a family of four you got eight
17:07
thousand dollars that you can use to pay
17:09
your rent which is what it’s for
17:11
but instead what we’re doing is we’re
17:12
seeing uh um samsung
17:15
samsung and and sony boxes at the at the
17:18
dumpster
17:19
we’re seeing brand new cars you know
17:22
that are being driven in
17:23
and so we’re just going to get a little
17:24
bit more aggressive um so
17:26
what my point to that is you have to be
17:28
aware of these things
17:29
you’re walking into a market where it’s
17:31
a little bit unstable
17:33
i think houston is very stable overall
17:36
it has its ups and downs
17:37
it it it’s it’s a it’s the cost of
17:40
living is very affordable still it’s why
17:42
you’re seeing
17:42
massive migration from the northeast and
17:44
from the west coast to warmer climates
17:46
that climates where
17:48
where you know eight hundred thousand
17:49
dollars buys you quite a bit of house in
17:50
katy
17:51
you know uh five hundred thousand
17:53
dollars buys you quite a bit of house in
17:55
cyprus
17:55
you know and so you just gotta know
17:58
where your market is
17:59
understand it and and then guard it with
18:01
your life like this is my this is my
18:02
my probably i’m gonna guard it with my
18:04
life yep
18:06
yeah so going back to i guess you know i
18:07
did i did ask you about three different
18:09
questions in my question
18:10
so you hit one point talk to us about
18:12
the buy and sale process what are you
18:14
seeing in the market
18:15
i mean obviously you talked to a ton of
18:16
brokers you know you’re
18:18
you’re taking a look at a lot of
18:20
different deals what are you seeing out
18:21
there in terms of
18:22
you know um i know you mentioned
18:25
forbearance
18:26
right and how that might affect you know
18:28
the quality of the deals that you’re
18:29
seeing
18:30
but just talk to us about what you’re
18:31
kind of seeing and then hear from the
18:32
brokers too
18:33
you know as far as houston goes yeah
18:36
again i think their supply is starting
18:38
to pick up
18:39
i think there’s a variety of reasons for
18:41
that uncertainty is the biggest issue
18:42
for sure people don’t know what’s going
18:43
to happen
18:44
it is tough to go hand to hand every day
18:46
and
18:47
knock on that door and you know you’re
18:49
asking for the rent money and they don’t
18:50
want to pay
18:52
that is difficult you know the deal i
18:54
told you that we just inherited
18:55
that’s our biggest delinquency by a long
18:58
shot in our portfolio
18:59
because the previous owner gave up they
19:00
didn’t want to try to play with it
19:02
anymore
19:02
their job was to keep the occupancy at
19:04
90 so i get my financing
19:06
and that was it right and so now we’re
19:08
left holding the bag so
19:09
you know to answer your question i think
19:10
there is supply there
19:12
i think people are getting wary i’m kobe
19:14
wary i’m tired of dealing in this
19:16
environment i’m sure
19:17
everybody else is um you know we’re
19:19
starting to get more aggressive with our
19:21
with our
19:21
uh collection procedures i’ve authorized
19:23
liens that we haven’t done that before
19:26
uh so talk to us about that what is that
19:27
exactly okay so
19:29
check this out back in the recession you
19:32
did what you had to do
19:33
to survive and i was running mostly
19:35
classy properties at the time
19:37
so there is a landlord lien that’s on
19:39
the back of your lease contract
19:41
that allows you the the permission the
19:43
right as the owner
19:45
to go into any of your tenant’s property
19:47
i’m sorry your priority unit
19:49
and remove items of value to help cover
19:52
your rent
19:54
so where i’m at today is yeah you’re
19:55
making a face that means you need to
19:57
learn that because that’s
19:58
that is a tool i i just introduced it
20:00
today in our managers meeting and you
20:01
should have seen
20:02
their faces light up with excitement
20:04
because they’re tired of the cdc
20:06
certificates saying that they’ve been
20:08
trying to make rent payments and they
20:09
haven’t really they’ve been
20:10
they’ve they’ve been committing perjury
20:11
because they’re not even calling us to
20:13
say
20:13
if if joe just does that right yeah if
20:16
suzy accused making payments or not so
20:18
now i’m giving them t but that’s been in
20:20
there we did that during the great
20:21
recession
20:21
but we got soft we we forgot we’ve been
20:24
in a very
20:25
nice happy environment but three-fourths
20:27
of my managers in my 22 units and
20:28
three-fourths and raised their hand and
20:30
said i’ve done lockouts before
20:32
i’ve done leans not lockers i’m sorry
20:33
liens i’ve done liens so my job today i
20:36
told them straight up today
20:38
that you number one you need to
20:39
prioritize your maintenance requests
20:42
you start with the ones that are paying
20:43
rent first
20:45
and one day i’ll get to the ones that
20:48
aren’t paying rent
20:49
unless it’s a safety issue right you
20:50
know i mean that’s the safety issue you
20:52
know you know
20:53
you know um then i’m gonna go through
20:55
your unit i’m gonna remove i’m gonna
20:56
make it uncomfortable for you
20:58
i’m gonna take away your viewing
20:59
entertainment i’m gonna take away that
21:00
brand new tv
21:02
i’m gonna find that ipad i know you got
21:03
one if i find a phone i’m gonna take it
21:06
too
21:07
i’m gonna take uh the coffee pot cause i
21:09
know that’s gonna make you upset in the
21:11
morning
21:12
and i’m gonna i’m gonna remove your
21:14
playstation your video games
21:16
and i’m saying this because i did this
21:18
during the recession this is how we got
21:19
through
21:20
and i’m going to get their attention and
21:21
one of two things is going to happen
21:23
they’re going to come back and pay for
21:25
their stuff
21:27
they’re going to get off my delinquency
21:29
or they’re going to leave
21:30
yeah either way i win and so
21:34
when you’re buying things you have to be
21:36
aware of that like when a guy is trying
21:37
to sell you a deal
21:38
how was it been doing you need to pay
21:40
attention to to the trends on the
21:42
collections
21:43
what were they doing a year ago what are
21:45
they doing now are they really
21:46
collecting the money
21:47
are you going to get access to the bank
21:48
statement so you can see that they’re
21:49
really depositing that because
21:51
piece of paper it’s not worth anything
21:53
yeah i mean accrual accounting versus
21:54
what is actually banked in
21:56
that month is two totally different
21:58
things right you know
21:59
absolutely so i think you know and
22:01
people can get kind of creative
22:03
in that respect as well absolutely so
22:04
there is still a lot of great financing
22:06
which is another
22:07
side point to what you’re asking me you
22:09
know what financing is out there so you
22:11
know what to offer
22:12
right now it’s a great time to do a a
22:14
libor based loan
22:16
alone where you have a adjustable rate
22:18
uh we started really
22:19
okay so oh yeah we started talking about
22:22
two years ago
22:23
you had mentioned at the beginning of it
22:24
right is you you’ve done a lot of cash
22:26
out refunds
22:27
right and and me and you have talked in
22:29
the past right you know i mean
22:30
there’s there’s different schools of
22:32
thought here right as to
22:34
you know kind of do you re get in a
22:36
bridge
22:37
you know increase the value do your
22:39
rehab you know and then pull money out
22:41
right
22:42
and i think you’ve done that on the
22:43
majority of your of your property yes
22:45
you know why do you why do you like that
22:47
route versus putting permanent debt on
22:49
it day one
22:51
well because i’m in accumulation mode so
22:53
i got to get equity and equity out to my
22:55
investors so they can redeploy with me
22:57
number two when i do that like that i
22:59
get interest only
23:00
versus when i do permanent debt i have
23:02
to pay principal many times
23:04
you know on the deal that i just got a
23:05
contract on yesterday we’re gonna sell
23:07
one of my original
23:08
deals my legacy deals in 10 years of
23:10
ownership
23:11
i’ve paid principal audit for maybe two
23:13
years and that’s it
23:15
and that’s because i refinanced
23:16
refinanced refinanced
23:18
so you refinanced into another bridge
23:20
into a into another bridge or to like a
23:23
freddie
23:23
a freddie floater or something like that
23:25
where there was there was io period
23:28
right so of the 10 years i’ve maybe paid
23:29
i o 8 years
23:32
and that’s what i want because this
23:33
isn’t like a house i’m not building
23:35
equity that way i’m creating equity
23:37
right so as i create value my deal’s
23:40
worth more so that gives me that
23:42
that that variance there between between
23:44
uh the the uh the dscr that i need
23:47
so it’s gonna be worth more in the
23:48
future if i keep doing my job
23:50
right so why do i want to pay principal
23:51
i don’t i want to max out the cash flow
23:53
and when it gets to a point to where i
23:55
don’t see the rent growth for that deal
23:56
or i’m tired of it or i want to take the
23:58
money out and i want to go put into a
24:00
bigger deal we’re going to do that which
24:01
is what we’re doing that deal
24:02
those owners and that you’re going to
24:03
walk away with the better part of a
24:04
thousand percent
24:05
in ten years of ownership so that i’m
24:07
super oh yeah yeah
24:09
the irr that is like damn near 95 it’s
24:12
pretty high right
24:13
so um so you need to understand the
24:16
financing we’re big on
24:18
freddy floaters or uh you know high
24:20
interest only right now it’s a great
24:22
opportunity you want to keep that debt
24:23
service down as much as you can
24:24
especially right now during covet you
24:26
got to figure out i don’t want to have a
24:27
lot of liability
24:28
yeah that’s a it’s a very good point now
24:31
just to be clear right
24:33
some of our listeners may feel well yes
24:36
you go with a floater but then you have
24:37
all that interest rate exposure that
24:40
rates may move up obviously you have
24:42
protection through
24:43
interest rate caps so it’s not that that
24:46
you
24:47
have the risk that that you only have to
24:49
pay 10
24:50
in a worse case right obviously the
24:52
rates can move up but you still
24:55
have protection built in with when you
24:57
buy
24:58
interest rate caps and the lenders
25:01
require it
25:02
but you as a borrower you can also
25:05
actually buy it down so you have a
25:07
tighter spread between the
25:09
the floating rate and and where
25:13
you potentially have the maximum rate
25:16
and i’m pretty sure you you have
25:17
thought about that too robert where you
25:19
essentially need it’s a balancing act
25:21
right everything is a balancing act
25:23
but you go with a fixed rate loan uh or
25:26
a floater
25:28
uh you you look back in five years and
25:30
then you can make a decision
25:32
which one would have been the best but
25:34
you just do not know now
25:36
right so it’s always a balancing act and
25:38
ultimately
25:39
it’s only with a floater you have the
25:41
most flexibility
25:42
there is no doubt about that and you
25:45
certainly also do not have that
25:47
typical particularly for larger
25:49
conventional fannie and freddie loans
25:51
the the massive
25:52
repayment penalties hit it right there
25:54
in the head and time that’s exactly it
25:55
right because that’s what keeps you
25:57
into a deal longer than what you want
25:59
right
26:00
is that massive prepay or the or the
26:02
defeases or whatever they want the heel
26:03
maintenance whatever they want to
26:04
whatever word they want to use is that’s
26:07
what it is you
26:08
with these freddie floaters you have a
26:09
very low payment to get out a low
26:11
penalty
26:12
to get out and you can either start the
26:14
clock over again and get a new loan
26:16
or you can sell it to somebody else and
26:17
let them get new loans i’ve got a couple
26:19
of d and i’ve learned this from trial
26:21
and error i’ve got deals right now
26:22
that at the time had great fanny
26:24
products three years ago
26:26
two years ago right and now you’re
26:29
looking like dang it i’m paying four
26:30
percent
26:31
five percent and guys are like yeah i
26:33
don’t want to buy your deal because i
26:34
got a senior loan
26:35
and i can’t buy the loan out because
26:37
their prepayment’s too high
26:39
right so i’m kind of like stuck in the
26:40
deal and i’m just gonna have to keep
26:41
operating for a while
26:42
until i get to the point to where i can
26:44
absorb the prepayment penalty right you
26:46
can eliminate a lot of that
26:47
uh when you go with these uh floating
26:49
rate loans and it’s like maybe
26:51
uh one percent of purchase per or loan
26:53
value it’s that’s nothing
26:55
that’s nothing but you’re talking like
26:56
10 percent or something like that it’s
26:58
it’s a
26:58
whole other animal so make sure i mean
27:00
what we’re talking about is a little
27:01
sophisticated
27:02
make sure you have a good financial
27:04
partner there if you’re not that
27:06
financial guy then somebody on your team
27:07
has to be
27:08
whether it’s the partner sitting next to
27:09
you or it’s your mortgage lender they
27:11
need to explain to you
27:12
exactly where these products fit for you
27:15
uh where rates might be going i don’t
27:17
think rates are going anywhere i think
27:18
rates are going to continue to
27:19
stay where they’re at if not go down
27:21
it’s been like that for the last two
27:22
years we have a portfolio down in
27:24
alvin that we have four deals they’re
27:26
all they’re all on on floating rate deal
27:28
for the floating rate loans and we’ve
27:29
all we’ve seen is just this little slow
27:32
number i mean it’s it’s crazy how little
27:34
how little the loans are i hope they
27:36
stay there forever
27:37
yeah uh good point obviously if we we
27:40
do not know where they’re going uh i
27:43
share
27:44
with you the view that short-term rates
27:46
will stay low right
27:48
the government has much more control
27:50
over the short-term rates
27:52
uh long-term medium including 10-year
27:55
treasury i’m not so sure
27:56
i feel that we will see an uptick there
27:59
potentially to 150 maybe 2 percent
28:02
which then plays in more towards your
28:05
floating rate
28:06
play right because you uh you do not
28:10
you are still flexible yet you have that
28:14
you do not pay the higher rate no
28:17
absolutely
28:18
yeah so i was going to ask robert man
28:20
you know what are some of your goals
28:22
you know for 2021 and beyond i mean i
28:26
know we talked about kind of where your
28:28
box is and i know you got 4 200 units
28:30
right but
28:30
where’s rockstar capital in the next 12
28:32
months
28:34
rockstar cowboy needs to continue to
28:35
build its foundation you know uh
28:38
kobe was the best that ever happened to
28:39
us because it for you took my eyes off
28:41
of acquisition and put my uh my operator
28:44
is back into my operations and realized
28:46
that we had some weaknesses that we
28:47
needed to correct
28:48
so we made some staff changes internally
28:50
we made some corrections we’ve
28:52
done some software but we’ve also seen a
28:54
little bit of hiccups right now
28:55
so i don’t like it i don’t like
28:57
instability i can’t move forward if i
28:58
have instability and i keep looking
29:00
backward
29:00
and so it’s very important to make sure
29:02
that you have the right team so we’ve
29:03
been on on a
29:04
recruitment frenzy right now or we’re
29:06
bringing in the people that we need
29:08
people with
29:08
a lot more years of experience than me
29:10
who have who are
29:12
in theory better property management
29:14
than me right and so you want to bring
29:16
surround yourself with as much
29:17
iq in the room and then you want to
29:18
communicate with them as much as you can
29:20
don’t just hire somebody with 30 years
29:22
of experience and give them the keys to
29:23
the castle
29:24
and think they’re going to run it like
29:25
you as the independent owner they’re not
29:27
yeah they’re they’re they’re very
29:28
different you know because many of them
29:30
come from third-party management
29:31
companies feed-based management
29:33
companies
29:33
versus independent ownership they don’t
29:35
they don’t have the same wiring that you
29:37
do especially when
29:38
you’re the one that has to sign on them
29:39
on the on the dotted line for millions
29:40
and millions of dollars
29:42
so our pa our plan right now is to
29:44
continue growth but we want to grow
29:46
smart we want to make sure that our our
29:48
operations are as stable as possible
29:50
we want to make sure that we have as
29:52
much visibility and branding as possible
29:54
our goal is to stand above the noise so
29:56
marketing is a big piece we want to keep
29:58
that pipeline feel
29:59
you know i’m a big fan of grant cardone
30:00
we have his cardo university and he
30:02
always talks about how
30:03
companies fail new businesses fail
30:05
because they don’t have enough in the
30:06
pipeline
30:08
we want to build that pipeline pipeline
30:10
give you options just like when you have
30:11
more rental income from a bigger deal
30:13
you get options for marketing and staff
30:16
more prospects more leads gives you
30:18
options on what you can do moving
30:20
forward
30:20
that’s more opportunities for conversion
30:22
to stay full so our goal right now is
30:24
marketing we want to make sure
30:25
that our marketing is bringing in
30:27
qualified leads and prospects
30:29
so that our teams can’t convert so that
30:31
they have the right tools that they can
30:32
convert the right sales training which
30:34
is why we invested
30:35
75 000 in cardio university last year to
30:38
make sure our teams are watching that
30:39
and they’re learning to become
30:40
better salesmen once they are where they
30:42
need to be
30:43
then we’ll push harder on our
30:44
acquisitions deals aren’t going anywhere
30:47
you know um we can talk about where
30:49
deals might look like in q3 q4
30:51
i think there’s going to be a lot of
30:52
deals right but i also think that it’s
30:53
going to be tempered it’s not going to
30:54
be what it was in the recession
30:56
so when those deals are ready we want to
30:58
have our occupancies as high as they can
31:00
as i start to shift my focus over here i
31:02
want to try the right team there but i
31:03
also want to make sure that
31:05
i have i have uh the equity ready to go
31:07
as well
31:08
so are you going to be a net buyer net
31:09
seller this year man what is it what
31:11
does that equate at the end
31:12
at the end of the year we will have more
31:14
units gained than we’re at right now
31:16
but i do have two deals under contract
31:18
right now i’ve got 118 units and i’m
31:20
sorry
31:21
126 units that i’m selling and i’ve got
31:23
125 units i’m gonna sell
31:25
because these are legacy deals bought in
31:27
2011
31:28
and 2014 and they have a lot of juice in
31:31
them a lot of equity
31:32
in them and i need that equity to refill
31:34
my treasure chest
31:35
so my war chest so i can go buy some new
31:36
deals so i mean what is what is the
31:39
you know okay hey it’s time to sell
31:41
right you know because i mean you could
31:42
have just as easily done that two years
31:44
ago i mean obviously you had those deals
31:45
for quite a while
31:46
right what what metric are you guys
31:48
looking at to determine okay hey this is
31:51
the good time to
31:52
to exit this deal well we’re focusing on
31:54
younger assets and i’ve got quite a few
31:56
that were bought
31:57
they were built in the 1960s and 1970s
31:59
which is kind of where everybody starts
32:01
you know a lot of guys start in the
32:02
older assets because they’re cheaper
32:05
the problem is i’m i’m i’m 46 years old
32:08
i was built in 1974
32:10
right i don’t run as well as i did 10
32:12
years ago
32:13
well true my properties are my
32:15
properties are no different the piping
32:16
is getting older the wiring is getting
32:18
older
32:19
and deals that i bought 10 years ago in
32:21
the 1980 they were about 1980 product
32:23
are actually like 1970s product today
32:25
right so
32:26
my 1970s products that i bought 10 years
32:28
ago like the one videos i’m selling
32:30
was actually like a 1960s product the
32:32
1960 product that i’m selling
32:34
was actually feeling like a 1950s
32:36
product right and so i’m getting rid of
32:38
my
32:39
smaller older deals which is where i got
32:41
started
32:42
it’s going to free up resources that
32:45
we’re committing to them because they
32:46
got a lot of capex
32:47
you know especially the the older they
32:48
are right you got a piping issues you
32:50
got all kinds of
32:51
things that are breaking um um and i
32:53
want to get out of that capex issue
32:55
i want to pull the equity out because
32:57
it’s not really going to grow with the
32:58
number i needed to grow if i got to keep
32:59
investing
33:00
you know like into the property and i
33:02
want to free up a free of capital
33:04
so that when i’m ready to buy deals in
33:06
q3 and q4 i’ve got sufficient cash
33:08
so we’re talking about remember remember
33:10
to this ben you you’re only as good as
33:12
what they remember
33:13
that’s true you know i sold a deal in
33:15
december of 19 we made 700 return after
33:17
seven years
33:18
but i haven’t saw anything since you’ve
33:20
got to show
33:22
completion full circle full full cycle
33:24
and if i can sell a deal that i’m gonna
33:26
make 400
33:26
on that i bought in 2014 and i sell a
33:29
deal i’m like a thousand percent on
33:30
that i that i uh so that i bought in
33:32
2011 i’m looking like
33:34
the freaking king right i mean i’m like
33:36
the midas such over here
33:37
but people are going to want to continue
33:38
to invest with you and redeploy that
33:40
cash back so
33:41
there’s a bit of a marketing arm as well
33:43
you don’t fall in love with it
33:44
don’t fall in love with it it’s real
33:46
estate it makes you cash
33:48
and the more cash you have great but
33:49
when you start to see a little
33:50
interruption in the cash for whatever
33:51
the reasons are
33:53
you know and i can tell you i’m focusing
33:54
more on my 300 unit deals
33:56
than i am on 125. it’s just trying to
33:59
roll out of the smaller stuff roll out
34:01
of the older stuff
34:02
get into the bigger newer assets right
34:04
so i know i know today’s
34:06
you know um show is supposed to be about
34:08
kind of houston but i know you have some
34:09
stuff down
34:10
you know south texas as well so where
34:12
are you focusing
34:13
that acquisition energy right you know i
34:15
know you guys are being you know
34:16
strategic on you know pulling the
34:18
trigger on stuff but
34:19
are you spending more time looking at
34:21
deals down in the south or are you still
34:22
looking more in houston
34:24
yeah what brought me out of houston
34:25
itself is the property taxes
34:27
i wanted to escape harris county so
34:30
let’s talk about that here let’s talk
34:31
about that
34:32
because that’s a big because because
34:33
people don’t realize that i mean some
34:34
people obviously going to be listening
34:35
around the country
34:36
property taxes is a big problem here
34:39
right
34:40
about that debate well first of all i
34:42
want to escape property taxes so i’m
34:43
going to invest in areas where
34:45
it’s not so crazy in the property tax so
34:47
if it’s outside harris county for me
34:49
it’s free game corpus south texas
34:52
not harris county different market
34:54
different mindset down there
34:56
not not as greedy and aggressive on the
34:59
taxes there
35:00
so i can operate um nearby
35:03
four bank county is not as bad uh you
35:05
have presurya county not as bad
35:07
but you’re still in the houston area our
35:09
deals down in alvin do very well
35:11
um um you know just want to get out of
35:13
the
35:14
harris county what’s going on in harris
35:16
county the last few years is
35:18
somebody somebody decided that they want
35:20
to get aggressive with property taxes
35:22
and so they started not even they
35:24
started um massively increasing
35:26
your property tax value literally
35:28
overnight and what they’re doing is
35:29
they’re now changing the cap rate
35:31
to validate the numbers that they’re
35:32
trying to get like you know they’re
35:34
showing cap rates for classy properties
35:36
at
35:36
five percent like really like five
35:39
percent for a classy property
35:40
but what they’re doing it’s a game
35:42
though they want to see if you’ll
35:43
protest it
35:45
so that you can negotiate a number later
35:47
on so they want you to hate this number
35:49
so they give you a crazy high number
35:51
you protest it you’re happy to take this
35:53
amount of pain
35:55
but they would always pay which is
35:57
painful
35:58
but if they would offer that to you
35:59
first you wouldn’t want that you want
36:00
even lower pain
36:02
right so they’re getting what they want
36:04
the city’s got tax
36:05
issues they want to keep the revenue
36:07
going we’ve had kobe for the last year
36:08
they don’t care they’re they’re still
36:10
going to keep pushing the needle and
36:11
it’s your job
36:12
to protest um with it it’s a racket
36:15
these property tax companies are
36:16
actually owned by previous
36:18
tax commissioners so if you go and you
36:20
do that research this is their
36:21
retirement fund
36:22
they they they do they do their time as
36:24
a tax commissioner and then they come
36:26
back and they open these companies up
36:27
and they know the game
36:28
and they create not they create
36:30
companies where they’re going to help
36:31
you
36:32
protest the taxes because they know
36:33
everybody it’s just a game attorney and
36:35
you’re wind up paying them
36:36
anywhere from 5 000 to 8 to 10 thousand
36:39
dollars a fee per property
36:41
because they’re saving you hundreds of
36:43
thousands of dollars on property taxes
36:45
and i heard that that’s that’s your
36:46
that’s a big negative for houston right
36:49
you know for our listeners but obviously
36:51
me and you live here we still love
36:52
houston tell me
36:53
tell me one of the reasons why people
36:55
should invest in houston
36:57
houston has the most entrepreneurial
36:58
spirit of any other city i’ve ever heard
37:00
of
37:01
you got no cost of living especially in
37:04
the suburbs
37:05
there’s just a vibrant vibe here call it
37:07
a red state vibe call it the
37:09
conservative vibe
37:10
there’s just a nice vibe here in the
37:12
city of houston we used to be
37:13
all you know um oil and gas and it’s not
37:16
like that anymore we’ve got a lot more
37:17
there’s a lot more legs on this stool
37:20
in houston texas um and so it’s created
37:22
a lot more opportunity for a lot of
37:23
people
37:24
and people are still continuing to
37:25
migrate here especially in west houston
37:27
right now where the schools are
37:28
so it’s been good you know we’re very
37:30
fortunate that there was negative rent
37:32
growth last year for covet
37:33
our companies survived that we were able
37:35
to achieve rent growth so we had
37:37
anywhere from seven to ten percent
37:38
swing from what the city got city
37:40
average to what we got um
37:42
but it’s a good city there’s a lot of
37:44
positivity in this town
37:45
um there’s still a lot of demand here
37:47
and if you know the market you can do
37:49
well
37:49
you know i know a lot of guys that want
37:51
to invest in other towns but it’s so
37:52
much easier to pull
37:53
my 20 of my 22 managers here today
37:57
so i can talk to them and if there’s an
37:58
issue i can walk to that i can drive to
38:00
that property
38:00
you know right after this call you know
38:03
so it’s
38:04
good to still be familiar with your
38:05
market and have roots in your market
38:08
that’s that’s big you know boots on the
38:10
ground is huge i mean i think people
38:11
you know they get caught up and just
38:13
trying to find a deal and they’ll buy a
38:14
deal wherever
38:15
right but then they don’t realize hey if
38:16
something goes wrong especially now with
38:18
kovid right it’s not as easy just
38:20
hopping on a plane anymore
38:21
you know we have deals in atlanta and
38:23
and we could do a um
38:25
you know one day trip out there now you
38:26
can’t do it it’s two days i got to stay
38:28
overnight now
38:29
you know so you got you kind of think
38:31
that so that’s also another reason to
38:32
kind of think about the economies of
38:33
scale and buying in bulk
38:35
in one sub market like you did so kudos
38:38
to that
38:39
yeah all right mr anton what else we got
38:42
yeah
38:42
so uh great information that you shared
38:45
with us
38:46
robert just one more point when it comes
38:48
to these property taxes right that’s uh
38:50
it’s not to be fair it’s not just harris
38:53
county we have
38:54
it it appears to me that all the tax
38:57
assessors of the large
38:59
major city counties have have got
39:02
together
39:03
whether it’s uh harris whether it’s in
39:06
san antonio austin
39:08
dallas fort worth and decided let’s
39:11
crank up these these assessments
39:13
right so it it’s only makes a big
39:17
difference from county to county and
39:18
that
39:19
that’s a very important message for
39:21
particularly
39:22
for someone who is not familiar with
39:24
taxes and certain sub markets in texas
39:27
do not just make assumptions where the
39:29
taxes are going to come in
39:30
right you you can have a very big
39:33
wake-up call if you misjudged
39:35
the taxes right absolutely so and so
39:37
what that means for the new people
39:38
listening in
39:39
is that if a deal has a tax value of
39:41
three million dollars but you’re paying
39:43
nine million dollars for that deal
39:45
they’re going to assess it at nine
39:46
million dollars you need to do your
39:48
underwriting at nine million dollars
39:50
uh you will likely fight it and you
39:52
might settle at four and a half five
39:54
million dollars but that’s still quite a
39:56
bit and that’s year one
39:58
if you start to operate this deal and
40:00
you start to get into it you’re making
40:01
the value worth more
40:02
right they’re figuring that out too so
40:04
they’re increasing your taxes
40:06
every year by a significant number and
40:09
you have to ask yourself is that can i
40:12
continue to increase my noi
40:14
through income generation through
40:15
expense management
40:18
to cover the tax man you know
40:21
like right now they’re talking about
40:22
doing and i’m gonna give you a similar
40:23
example they’re talking about doing
40:25
um unemployment i’m sorry that the
40:28
minimum wage the 15 right
40:32
well that’s gonna jump up people think
40:33
that you can just pass that rent growth
40:35
across
40:35
you’re not gonna be able to do that it’s
40:36
gonna be very very difficult you know to
40:38
do that right but
40:39
you know what’s gonna happen is you know
40:41
people that are at mcdonald’s wherever
40:43
they are gonna increase the cost of
40:44
their goods
40:44
that’s gonna make it this way it’s gonna
40:46
be a very very difficult situation so
40:48
i i try to call it the four walls of my
40:49
business these are my controllable
40:51
expenses
40:52
and i can control non-controllable
40:54
expenses like property tax and insurance
40:55
have been on the rise
40:56
i just have to try to mitigate them and
40:59
and manage them as best as i can
41:00
but i can control this so the best way
41:03
to control
41:03
your your your number here is by
41:06
servicing your residents and making sure
41:07
they don’t leave
41:08
because you make no money when they move
41:10
in you got three thousand dollars of
41:12
moving costs
41:13
of make rated expenses yeah but you make
41:15
money when they renew
41:17
every renewal is worth around fifty
41:19
thousand dollars to you
41:20
every renewal of new valuation so you
41:23
make money when people renew not when
41:24
they move in
41:25
so it’s very important become a great
41:27
operator learn what people need
41:29
take care of the basics for them and
41:31
generate the ny as high as you can so
41:32
you can offset those taxes and insurance
41:35
that are going to continue to rise
41:37
that’s a great point man yeah you gotta
41:38
you got to take care of the current
41:40
tenants right
41:40
everybody gets caught up in leasing and
41:42
news and new tenants and stuff like that
41:44
right but
41:44
if you could just get back to the basics
41:46
and take care of the people that are
41:47
already paying your rent
41:49
right you know um you’re gonna you’re
41:51
gonna probably be off just as good
41:53
because you don’t have to turn the unit
41:54
too so i love that point that’s a good
41:56
point
41:57
yeah definitely uh so thanks again
42:00
robert uh
42:01
for for having joined us today you you
42:03
shared really some
42:04
some very uh great and uh
42:07
also uh information that many people
42:10
would not know about right so i
42:12
really appreciate that so uh how how can
42:15
uh people reach you
42:17
well i appreciate it again my name is
42:19
robert martinez i own rockstar capital
42:21
you can find me on instagram at
42:23
apartment rockstar uh please send me an
42:25
email
42:26
send me a dm if you’re interested in
42:28
investing please let us know uh you can
42:30
find me on linkedin as well
42:31
at uh at apartment rockstar or if you
42:33
want to just be my friend on facebook
42:35
it’s a robert martinez very good uh
42:38
appreciate it again uh robert was great
42:42
to have you on
42:43
thanks buddy we appreciate it man thank
42:45
you very much guys
42:46
alrighty