Multifamily Investing in Houston Texas!
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Show Host
Guest Speaker
Co-host
Connect with Anton Mattli
- Email: anton@peakfinancing.com
- https://peakfinancing.com/about-us/
- Twitter: https://twitter.com/AntonMattli
- Instagram: https://www.instagram.com/antonmattli/
- LinkedIn: https://www.linkedin.com/in/antonmattli/
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