Mid-Market Multifamily Investments with Evan Curtis: Strategies for Success in Real Estate

Speaker 1: 0:04

Welcome to Side Hustle City and thanks for joining us. Our goal is to help you connect to real people who found success turning their side hustle into a main hustle, and we hope you can too. I'm Adam Kaler. I'm joined by Kyle Stevie, my co-host. Let's get started. All right? Welcome back everybody to the Side Hustle City podcast. Once again, kyle Stevie is on the podcast. He's remote. Evan Curtis is joining us today. Evan, how's it going? Sunny California, southern California.

Speaker 2: 0:37

Hi there, adam, I'm doing well. Thanks for having me on.

Speaker 1: 0:40

Yeah, and you're with a company called Vanamore Investments and you guys invest mostly in mid-market multifamily properties is what it looks like.

Speaker 2: 0:50

That is correct. Middle market value add multifamily.

Speaker 1: 0:55

Yeah, so anything that people are crappily managing, you guys will go in there, fix it, make sure that thing's running like a tight ship and grab some value out of that sucker huh.

Speaker 2: 1:09

We like to use the term undermanaged versus crappy managed, crappily managed.

Speaker 3: 1:18

These guys are the shittiest managers we've ever run into. We're going to add so much value to this property just because we're not going to be as shitty as they are yeah, yeah, well, dude kyle 33 average annual returns man no, it's like the fed, it's just printing money right well then the fit.

Speaker 1: 1:33

No, well then the government takes their cut, and then you're down to 15 percent, or unless you're in california, like ev, who knows what in the world they take. What they take like 80% now, evan, is that what they're doing over there?

Speaker 2: 1:49

50% if you're, if you're towards the top brackets from federal and state. But but you get the benefits of of real estate. You know depreciation and 1031 exchange. So you know we like to say that there's benefits in our sector.

Speaker 1: 2:04

Oh, there's definitely benefits in the sector. It's one of the best ones.

Speaker 3: 2:08

I'm sure their CPA is like one of the most important members of their organization because they've got to find I mean, when you're getting taxed that heavy, you've got to find every stone you can possibly turn over to find those benefits. And how do I write this off and how do I depreciate this? Yeah, I would. I would assume your CPA gets a good.

Speaker 2: 2:28

Christmas gift from you guys. Yeah, yeah, yeah, keep them on speed dial and keep them close. That's absolutely right.

Speaker 1: 2:35

That's right. Well, also, I mean, if you guys are doing 1031 exchanges and you know all that, you're probably constantly on the lookout for new properties that you can purchase. I mean, are you guys buying one a year or are you multiple year? How's it working out with you guys right now?

Speaker 2: 2:51

It's, it's uh, it's a tough market as far as finding properties that make sense. But you know just kind of big picture we're looking at. You know, two to six deals a year, rough range, um sort of just depends on on the quality of the of the opportunities that we can buy. But you know, I think, I think right now and going forward over the next 12 to 24 months, we're in, uh, potentially a very kind of attractive basis situation for, you know, five to seven years down the road.

Speaker 1: 3:21

What are you seeing now? With interest rates going up, I think rents kind of seem to have stabilized a little bit. Are you seeing a lot of owner operators maybe of some of these properties starting to get a little stretched in, and are you seeing more opportunities for you because of the current atmosphere that's going on right now in real estate and with interest rates in general?

Speaker 2: 3:47

Yeah, there's a lot of pieces to an answer to that one, I think. So the interest rates have had a significant impact already on valuations. So valuations on the space that we're looking at are down 20% to 40% from peak pricing 20% to 40% from kind of peak pricing which was late 2021, early 2022. And a lot of the valuation decline has strictly been from kind of the capital markets or interest rate movements that you mentioned. Debt costs are north of 6%, or high fives to north of 6%, versus there was mid threes to 4% before. So just that one move in the debt piece alone has has made a significant impact on kind of valuations.

Speaker 2: 4:30

And then you're you're seeing kind of the rent issue happening, which is largely a component of there's a lot of new supply coming online and you're seeing softness in rents. So you're actually seeing rent declines in a lot of markets that have the most supply coming online. So examples are like Austin, phoenix and some markets where you can kind of develop relatively easily. There was a ton of new supply that got started about two-ish years ago. That's all getting delivered right now and so you're seeing some significant impacts on rent. So you've got kind of the combination of interest rates really, really hurting buyers. You've got new supply coming online hitting kind of rent levels and then you've got just general expense inflation. That's still happening as well. So you have all these different pieces that are kind of squeezing the net operating income margins and ultimately going to and starting to lead to some distress.

Speaker 2: 5:24

On your other piece of the question, which is, are people getting stretched thin? And I think yes, absolutely people are getting stressed, stretched thin. But right now there's a lot of kind of kick in the can down the road happening. Um, you're seeing people not have to sell right now, so kind of they're they're trying to extend their, their loan maturities and they're doing what they can to go out and raise additional equity to cover shortfalls. So there's a lot of that happening right now.

Speaker 1: 5:51

Yeah, I could imagine. I mean, and you look at places where you've seen the biggest rent declines and those were two of the markets I've seen the biggest in that you just named with Phoenix and Austin and there's some other ones too, and you know that you just named with Phoenix and Austin and there's some other ones too, and I keep an eye pretty closely on Florida and those have seemed to be relatively flat. I haven't seen a whole bunch of declines in those rents in places like Florida and a lot of the Midwest. I think ours are more or less stabilizing around here. So what do you see? As far as you know, with interest rates being so high, with investors having options to just stick their money in treasuries right now at 5%, is it getting harder to find people that want to invest in syndications like yours, or are you still seeing a lot of interest? I mean 33% returns you can't really argue with.

Speaker 2: 6:44

It is hard. We certainly don't advertise that we're going to like that's not what we're underwriting too. 33% returns you can't really argue with. It is hard, we don't. We certainly don't advertise that we're going to like that's not what we're underwriting to a 33% return Right, but it's just.

Speaker 1: 6:50

It just happens to be the average yeah.

Speaker 2: 6:52

Yeah, but but it is. It's hard because there's just general concern and it's so. It's so interesting though you have you know financial, you know equity, equity indices at or near all-time highs. You've got pretty strong labor market overall in the US, yet real estate is in, and has been in, a recession basically for the last 18 months. The transaction volume has been down like 70% from where it was.

Speaker 2: 7:19

And you've got a number of people who are hesitant to deploy equity and they point to treasury and say why don't I just go get a little over 5% there? And I get that. But I like to think, and we make the argument, that now is kind of when you want to be buying, when there is stress and potentially distress in the market and we're looking at kind of a total return aspect of of an investment. You know the five and a half percent cashflow, like properties that we're looking at, we expect they need to. They need to hit at least a five and a half to over 6% cashflow for them to make sense. Plus, you have kind of the capital appreciation component generated through the value add strategy, as well as just, you know, looking to acquire assets in well-located places that we'll naturally appreciate over time.

Speaker 1: 8:11

Yeah, how hard is it to find something over, say like a six cap in Southern California or in California in general?

Speaker 2: 8:17

Southern California is not there. Definitely Our targeted geographic focus is like an L shape on the West coast, so Pacific Northwest, down to California, across to Texas plus Florida. We also cover Florida. So you know high, very high hurdle in California, not only because of that from a valuations perspective, but just from a kind of the landlord friendliness option and political climate that makes it a lot harder to be be an owner in California. So not likely that we're going to find much there. So you know six caps are, are, are about. You know six cap looks pretty good if we can find it, even in Phoenix and and you know some of the Texas market major markets that we're looking at, um, and it really depends on what type of product you're looking at will determine kind of where kind of the market cap rates are will determine kind of where kind of the market cap rates are.

Speaker 1: 9:10

Yeah, and you guys, I mean, do you deal with a lot of savvy people on the other side of the table when you're negotiating these deals and you find a property, or are you starting to see more people who are just kind of trying to offload some of the stuff that they have because they may be managing these properties kind of poorly and you guys can find yourselves in pretty good deals, yeah?

Speaker 2: 9:25

You're seeing a lot of people who are trying to offload properties that they purchased at peak pricing and basically they're trying to offload it at a price where they're not really losing any money, which it's it's just not going to work. And so there's a there's a good amount of listings that have that are out there that everyone kind of just knows that this is not going to trade. You know you guys are way off. You know you're 20 to 30% off of where it needs to be for it to sell. So kind of parsing through who's realistically pricing their deals and is going to meet the market is definitely a challenge and something to consider right now. But you know we're in the middle market space, which we define as between call it, 10 million and 50 million in acquisition size. So you know you do get some smaller kind of owners, but you're still you're still dealing in a lot of times working with very kind of professional brokers from the large, large brokerage shops. So I'm pretty sophisticated. You generally is people we're dealing with.

Speaker 1: 10:20

Well, I mean I look at, I look at your background and I'm like, wow, I mean you've got. I mean you've been doing this for some time now and so is the rest of your team here. But I look at you and then I think all the conferences that I've been to especially some of the ones down in Miami where you have these syndicators that they were flipping burgers before they got into real estate, right, and now they all of a sudden they're trying to raise money. At these conferences Everybody's got the same investment thesis. Explain the difference between you and your experience and some of these other folks that are out here, that are probably people on the other side of the table that we just talked about, that probably bought at the wrong time and maybe they're a little underwater and their investors aren't happy. Explain the difference between you and some of these other guys out here.

Speaker 2: 11:06

I am part of the Bannimore team and kind of we're a small team but our collective background is kind of institutional training and I spent a little over a decade at PIMCO Pacific Investment Management Company, met the founder his name's Bobby Larson. He and I kind of connected there originally when we worked there, so I have a similar background in that and after that we have all spent time at larger shops doing this multifamily value-add strategy, before myself at least ultimately joining Vandamore. Vandamore's got a solid track record starting in 2017 in the space at least, but further back than that, though, we all have been in the space for a long time, you're right, and you know like I started my career in 2005.

Speaker 2: 11:48

So I actually got to see kind of the tail end of the first you know before the GFC crashed and then rode through that whole thing kind of most of my career at PIMCO on real estate related products, so got a really broad exposure to kind of capital markets and the various different types of real estate.

Speaker 2: 12:08

There's public debt, there's private debt, there's public equity, there's private equity so the four different quadrants and how they kind of intersect and interact with each other. And not to say that there's not a ton of other really kind of smart people out there, but you do see a lot of folks who kind of just got in in 2020. And, like you said, we're from a completely different background and you know the tough thing is prevalence of social media now and ability for those folks to kind of connect to potential investors has allowed them to really raise a lot of capital that maybe they shouldn't have raised and it also kind of impacts the broader kind of landscape because some of those groups were very aggressively bidding these properties and that makes it really hard and difficult for everyone else in the space. So a lot of moving pieces, I guess, with that situation.

Speaker 3: 12:58

That's what I wanted to talk about, too was we were looking at a 78 unit here, like real close to where I live. I saw the comps and I saw the Realtors whole marketing packet and they were comping apartments that were on the Ohio River, that had been built I don't know, in 2019, 2018, to be upscale to capture what's going on on the riverfront both in Cincinnati and Northern Kentucky. But these were like three miles down and they were never going to be able to command the rents that these new builds were going to get, just because of location. And I knew that and my partners knew that. And so when we talked to the realtor, he goes it doesn't matter, we're going to get it. He said we just had somebody from a group from California come in before you. We'll have two groups from New York coming in this week. One of them is going to buy it.

Speaker 3: 13:50

So for investors in California, it didn't. You know, they didn't scare them to invest in Newport, kentucky, because they saw that they were a mile from downtown Cincinnati, their major metro area. They saw that they were a mile from downtown Cincinnati, their major metro area, and they were going to get a five cap where, if they stayed here, where they're from. They're lucky to get a four cap. They were willing to take bigger chances on properties in areas that they may not have been as educated, particularly their operators weren't as educated as they perhaps led their investors to believe. Now, if it was happening here, it led me to believe this probably happening in every Midwestern where you had the coastal money coming in and these people had no concept of where they were, these properties or they're investing in those areas. I would say the roosters come in a crow a little bit.

Speaker 2: 14:39

it's uh, it's a very, that's a very familiar story. Um, I I think you know sometimes other california investors can give some californians a bad name but just come in and overpay. But you're right, I mean a lot, lot of people who don't have maybe the same experience in the market and they'll see this property is $100,000 a door whereas California $500,000 a door, not to mention a higher cap rate, like you said, going in. So there's definitely been some of that and it's frustrating to folks as well. I'm sure that was a frustrating situation on your end if you were really trying to pursue the deal. But yeah, that is leading to some pain and probably a good amount of investors are going to lose some money here in the coming months, unfortunately. But are you working with?

Speaker 3: 15:36

banks that hold notes, particularly regional or local banks that hold notes on a lot of these big apartment communities that were purchased in the last 36 months. You're like, look, chances are you're probably going to have properties that come stressed. I've got the group behind us. If it makes sense, we would be able to take it off your books quickly. So you guys aren't holding it. But you know, give give us a call so we can get an idea what we're looking at. Have you been contacting this?

Speaker 2: 16:04

we we have been starting to reach out to some, some debt funds, um, as well as looking to try and get some some traction at some of the banks, it's. It's a little bit hard because it's kind of a different space unless you're normally in that space, like it's. It's you know they're getting a very cold call from Evan Curtis who they don't know and have any relationship with. So it's a little bit like okay, do we know anyone who can kind of connect us with the right people? But but we absolutely are kind of thinking about that and starting to try and see if there are opportunities at that level, because that's likely where you know, where you start to see more of this product come out first.

Speaker 1: 17:23

Yeah, for sure. I mean I'm also seeing crazy deals across the country on office commercial and all this debt to these. You know these folks have gotten themselves into and all this debt that these folks have gotten themselves into. There's a building here in downtown Cincinnati I can't remember how much debt they carry, but I think it was in like the $30 million range but they're essentially giving the building away. I mean it's going to go up for auction Now. It's in receivership. Are you seeing opportunities now around the country? I don't know if you guys would be positioned to do this, but for office to residential commercials or office to multi-use type of buildings where there are still some offices, maybe office condos, co-working with residential.

Speaker 2: 18:05

There's been a lot of money. The government has a bill that basically is going to subsidize some kind of conversions and I just saw an article actually today about it that basically they haven't allocated any of the capital to it. So there's been a lot of conversation and and kind of optimism that you can convert a lot of that product. But the reality is, after speaking with with folks who are kind of more in the development spaces, it takes it takes a specific layout and structure of a building to be a good conversion candidate and then it's extremely expensive. So I think it's easier said than done is what we're seeing so far.

Speaker 2: 18:41

You're not seeing a ton of it, but there are some that are happening. Well, this is not an office. I guess I was just looking at a deal in Phoenix that was a hotel resi to a hotel, to residential conversion. So you know, there there is some conversion deals happening, but I think it's going to be much less than people initially thought and kind of hope for, even even at these substantial haircuts that these office buildings are ultimately going to sell for.

Speaker 1: 19:11

How do you see downtowns changing? I mean, you're in Southern California, obviously. I mean you know, los Angeles downtown really hasn't ever been much of anything for anybody. I mean most everybody, you know, tries to stay away from downtown. I mean, you know, in San Francisco now is becoming this kind of scary downtown situation to be in without the office workers coming in. Now you're starting to see, you know, crime rates increase in some of these downtown areas and things like that. You know where. Where do downtown areas go next? Where do some of these city areas go next? What's the thing, if it's going to be, because I've I've saw the same, I've seen the same things. You've seen where you've got these architectural experts that come out and they say, look, you can't do it. I mean, the building is just not set up for it. The egress situation, there's a bunch of other. There's a lot of stuff. The width of the walls and all that stuff is is wild, all the things that you have taken to go. Where do you see these downtowns going?

Speaker 2: 20:08

I think downtowns are tough. I mean generally, our strategy at Vanamore is we like more suburban locations, especially when we're. You know California is a perfect example. You know you've got not only just kind of the challenge of downtowns, you generally have the political climate that makes it even tougher to be a landlord in a lot of the large downtown areas on the coast especially. So you know, we tend to like more suburban and you see, you know population growth out of the population decline in the downtown and kind of moving out into the suburban, more suburban areas.

Speaker 2: 20:47

So it's hard on our end to find a property in a downtown that makes sense. But you know, that said, I like to try and take a step back whenever there's there's a lot of kind of negative sentiment towards any one particular area and say, okay, at some point maybe that stuff makes sense. You know I don't necessarily know if now, now's the time, um, but San Francisco is a perfect example. You know you're, you're seeing we, we've seen cap rates in San Francisco move in, move into the to the fives. Like you can get a property at a five in San Francisco, wow, and you haven't seen that in like ever very long.

Speaker 2: 21:25

It's been a long. It's been a long time. You know, at some point that stuff makes sense, Like is San Francisco just going to disappear? I don't think so, but um there, but there's a whole lot of challenges. It's got right now.

Speaker 1: 21:35

Do you think that people are going to these downtowns and these areas are just going to have to feel more pain before they start waking up and changing the way they do regulations and being more friendly to investors like yourselves?

Speaker 2: 21:48

I think. So I still think there's some more pain to come in the downtown you also probably have. You know, you get you get declining real estate values. You've got, you know migration leaving. So ultimately, what does that that mean? That means less taxes for for these municipalities and at some point that stuff's gotta gotta cause some more problems as well. So you know, I, I think, I think down, downs are still tough yeah, and this is like ash kyle with his.

Speaker 1: 22:19

We got a buddy. He goes in and he buys underperforming strip malls and, you know, buys them at a you know a higher cap rate and you know you've got half the building sitting empty, so the price is lower, right, and then he just goes around to other strip malls and says, hey, how much, you much are you paying here? Looks like you've been in this space for a while. You can come on. Is there like a top five list of things that you're like hey, if we'll buy this building, if it does this, this, this, this and this, if there's jobs in the community, if there's, you know, uh, average income, median income, like what are the things you guys are going after?

Speaker 2: 23:08

Yeah, some of. One of the one of the first things we look at is the age of age of the property. So we like thing, we like properties that were built mid 80s or newer. Really we like 90s or newer if we can, if we can choose. So that's a big one as far as kind of property selection.

Speaker 2: 23:24

And then you know you, you want to also look at overall supply in a market and in fact that in especially in the market that we're in right now and kind of some of the comments I made earlier where there's a lot of new supply coming online in certain markets. So kind of understanding the supply and ultimately what's happening with rent, because, like you said, we're in a very transitioning environment. Like you're seeing rent declines in some of these properties and you get a very rosy picture from the OM on a lot of these packages that have kind of rent numbers that maybe were good six months ago but they don't comp out today. So, understanding that piece, when we look at affordability as a big one as well, so affordability we'll look at it from a kind of median household income relative to that rent price. And if you're pushing up against 30% mark, like that's where where, kind of historically you've seen folks get a little bit stretched. So kind of understanding.

Speaker 2: 24:23

The affordability aspect is another big one. Just kind of the job piece of the of the the local market is also is also very important. So you want to kind of understand the job story if there's new job growth coming in or if there's what the major employers are and the major sectors are.

Speaker 1: 24:42

Yeah, what states are you staying away from? Where are you seeing you mentioned you have that kind of L investment strategy. If you looked at the United States, what are some of the top states that you would say, hey, you got to get it together before you know folks like us come back in and start investing.

Speaker 2: 24:58

California is hard. I mean we live in California but that's California is a hard one. Um, for a few reasons, like I said, you know we there's a lot of, there's a lot of positive sentiment on the Midwest right now. I mean, you guys probably know these markets better than us and you're seeing, historically there was a premium from a kind of a cap rate perspective on Midwest markets relative to kind of more primary markets and you've seen that get compressed fairly significantly from what we're watching, so you don't have the same supply issues in the Midwest. You've got much less of a kind of a boom bust profile that, like Phoenix and Texas have. So the stability kind of makes sense. But there's been a lot more eyes, I think, on the on the Midwest, which you know we, we we try and stay away from where kind of we think most of the, the, where we think the more aggressive money is is the leaning towards right now.

Speaker 1: 25:55

Yes, yeah, that totally makes sense. Are you seeing population shifts? I mean, generally it's guys, like you know, in the in in the real estate investment space that are kind of ahead of the curve, right. I mean, you're not going to invest in a building long-term if you think an area is declining, Do you? What are you seeing? What are some of the Midwestern cities that you're seeing that where you start seeing these shifts of population and sentiment? Maybe some of these people that are leaving California, New York? Are there certain markets in the Midwest that you see this happening? Or or do you hear any of that kind of stuff in California?

Speaker 2: 26:30

So we, we do hear it and we we see it like we, we like to try and cover a lot of markets, even though we're not really focused and the Midwest is a good example Like we try and keep our eye on what's happening there. But I wouldn't, I would definitely wouldn't say that we're experts on the Midwest. But you know you're, you're seeing, you're still seeing rent growth in the Midwest which, again, is not what you're seeing in other places. And you know you're seeing, you're seeing some kind of more fundamental strength in operations on properties in the Midwest versus more challenges in kind of like Texas and Texas and Arizona, for example, right now. So you know you're, you're seeing reasons why people are going towards those markets. Long is the long term outlook still makes sense relative to some of these stronger growth markets, that historically stronger growth markets.

Speaker 1: 27:24

Yeah, and also you know companies like yours that are more vertically integrated. You've got architects probably that you have as part of. You know that. You've got on call. You've got people that can go out and take a look at properties. You've got construction teams. Is it important? I mean, if you're going to invest somewhere like the Midwest, how do you find those people over here? Do you send your own people Like, how does that work?

Speaker 2: 27:51

Yeah, we so we our current portfolio is roughly a hundred million in size and we have a one, our property management company. It's a national property management company that kind of manages it, so they have a national footprint and it helps us kind of be a small team but kind of move around to the, to the geos that we think are good, good markets, a little bit easier and a lot of times they're a good starting point as far as kind of getting the right contacts and local, local folks from there. But you know the brokerage teams, you know the national brokerage shops that are in these. These markets are also a very good kind of option. But we're, you know we're asset managing everything and we go out and if there's a property we're like we're going to you know we're going to tour it, we're going to kind of. You know we're going to be talking to local property management companies as well, not not just kind of the national property management companies.

Speaker 1: 28:43

Yeah, yeah. And what are I mean? You would think some of these people that are managing some of these properties poorly would do the do something similar and do their homework, but I think what you end up finding out is you've got people or groups that purchase these properties and they think they're going to just manage them all themselves. Do you see that a lot?

Speaker 2: 29:00

Yeah, you know property management is is tough. Yeah, it's a really difficult business. It's a low it's a low margin business and it's a it's a high kind of labor and administrative work business. So you know, I think some people who get in there thinking they're going to manage, manage everything themselves, like from a property management perspective, especially if they haven't extensively done it, um can kind of get in a little over their heads on some of that. But um, it's a, it's a it's a tough business dealing, dealing with with people who are not always happy with you.

Speaker 1: 29:38

Yeah, what are some of the top things you do as soon as you get into a property? What are some of the main things you want to focus on or that you see being needs every time you guys go in here, and where where's the biggest bang for the buck?

Speaker 2: 29:47

You know, a lot of times a fresh coat of paint on the exterior is from a biggest bang for the buck perspective. A lot of times a new coat of exterior paint makes a huge difference. We're generally getting in and the first thing we're doing is we're programmatically renovating units. So we're a light value add investor. So we're not getting in there and buying properties that you take down to the studs and then you basically rebuild them. We're more of a kind of a stabilized ish property that you know we're going to. We're just going to use natural attrition to then turn those properties over.

Speaker 2: 30:26

So you know what we do initially when we get in is we're we're renovating kind of the, the, the couple of properties that are vacant, and testing out and making sure that what we think is is market from our underwriting is indeed true. Or, you know, can we just turn the units and and still achieve, you know, relatively strong rent pops versus kind of where they were. So you know, starting the light interior renovation immediately the exterior paint. You know you look looking at signage. That's another one that we'll kind of look at right away.

Speaker 1: 30:55

Yeah, cause I mean it may not be visible and maybe hard to see, but then you got you know regulations or whatever in these communities you're buying and it might be a problem. What about opportunity zones? I mean, are you guys even buying in areas that would be considered opportunity zones, or are there, are there areas that are that fit your criteria that might still be considered op zones? You know, everything else looks good to you guys.

Speaker 2: 31:18

We're usually we're not focused on opportunity zones, like we're not looking to execute an opportunity zone strategy. We're usually kind of described as class B from a location and asset perspective and a lot of times that's not the opportunity zone. So we're usually kind of one step above that. That really workforce housing product's not the opportunity zone. So we're usually kind of one step above that. That really workforce housing product. That is the opportunity zone.

Speaker 1: 31:44

I think that strategy it makes makes sense for for a lot of investors, but it's not not something that we really focus on necessarily buy hold for 10 years and sell it, not have to pay taxes on it, kind of thing. And you guys, you're just going to continue to build the portfolio and have your current investors reinvest in new projects. Is that where most at this point is that where most of your money's coming from?

Speaker 2: 32:11

Are previous investors who are like yeah, I want to get into this new deal from Are previous investors who are like, yeah, I want to get into this new deal. Yeah, once we have investors in the ecosystem, we have seen a very strong reinvestment rate with them on future deals. So a big piece of what we're doing is trying to just grow that investor list that organically can continue to bloom through referrals and other areas. You know, join and join in your podcast. Maybe that gets a few more eyes on Vanamore and we see a lot of kind of strong traction, though from the existing investor base. But looking to looking to grow that, because, again, we think that now is a very now's the time that people that had been waiting to invest in real estate and said, oh, you know, prices have only been going up. You know now is the time for those folks to to really kind of say, ok, prices are down significantly from where they were. Could they go down further?

Speaker 1: 33:05

Of course they can, but you know, as a starting point, down 20 to 40 percent from from the peak levels Historically that has been a very good time to kind of start dollar cost averaging a portfolio into the space if you've been wanting to. Well, and you guys could probably. I mean, if you're buying at a good price right now, I mean the interest rates are going to come down. They can't stay up here forever. And you hear the Fed talking about possibly easing but then you hear you know, oh well, inflation's still high, we're not going to. You know we're not going to ease any time and you know, in the next meeting I think the stock market was pricing in five rate cuts. Now they're down to like three, I think, at this point. But the idea is to buy the property when rates are relatively high, prices are low Some of these investors have gotten themselves into trouble and then refinancing those and maybe a couple of years when things start to come down a little bit. I'm guessing that's part of your strategy here.

Speaker 2: 34:06

It is. It is. We don't necessarily aggressively underwrite to a refi, but it's absolutely something that we consider when we're modeling out opportunities. So we think that neutral to positive financial leverage going in makes sense, and that's where some of the difficulty has been. So neutral to positive financial leverage meaning I want my cap rate to be at or above where my debt cost is, and you've just seen debt costs rise a heck of a lot faster than you've seen cap rates rise. So there's kind of this, this period of of low transaction volume and kind of difficulty making deals pencil.

Speaker 1: 34:48

Yeah, oh yeah. Well, I mean, you guys sound like savvy investors. I'm looking through your website. I'm looking at some of the opportunities you guys have here and what you're looking for, and listening to you on your strategy. I mean everything seems to pan out here. So tell people how they can get involved with you guys. Where do they go? You know what is the minimum investment. All that good stuff.

Speaker 2: 35:10

We have offerings that are available for accredited investors and you can kind of find more information on our website, vanamorcom, and there's an area where you can sign up for our investor portal and basically that'll get you access also to our monthly newsletters and any information that comes out. So we write a monthly commentary on what's happening in the multifamily space and kind of trends that we think are interesting. Um, so, you know we're, we're there, I'm also on on LinkedIn, you know. You can just look for me, evan Curtis, happy to happy to talk to folks.

Speaker 2: 35:46

I've been having a lot of conversations again with people who, who, who don't realize the magnitude of the drop that we've seen in valuations and, and you know, don't realize the magnitude of the drop that we've seen in valuations. And it's really surprising because a lot of people, their frame of reference especially me, I'm from California their frame of reference for real estate, if they're not real estate professionals, it comes from the single family home market and the single family home market hasn't seen nearly the correction that we've seen on the multifamily side. So a lot of people don't really realize it. So I've been having a lot of good conversations with with people, just kind of updating them on the market and what we're seeing.

Speaker 1: 36:23

That's nice, yeah, you got to kind of be transparent about it and then share your experience with other people and I think they, uh, they appreciate that. Um well, man, evan, this has been great man.

Speaker 2: 36:40

Good luck with everything you've got going on. Uh, you know any upcoming deals that you guys have right now that you'd like to share? Nothing to speak of for now it's, it's. Uh, we're just underwriting a ton of deals, so we closed our last deal in December and, uh, looking, looking for the next one still right now.

Speaker 1: 36:52

Love it so Vanna more V A N A M O R investments. Guys looking for the next one still right now. Love it so Vanamore. V-a-n-a-m-o-r Investments Guys, check it out. I appreciate it. Thank you, evan.

Speaker 2: 37:00

Thanks guys, Pleasure.

Speaker 1: 37:06

Thanks for joining us on this week's episode of Side Hustle City. Well, you've heard from our guests, now let's hear from you. Join our community on Facebook, side Hustle City. It's a group where people share ideas, share their inspirational stories and motivate each other to be successful and turn their side hustle into their main hustle. We'll see you there and we'll see you next week on the show. Thank you.