Latest / The Academy Presents podcast / Scaling Real Estate Through Capital and Connections with Ruben Greth

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Scaling Real Estate Through Capital and Connections with Ruben Greth · The Academy Presents podcast

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Did you know that 90 % of the world's millionaires
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invest in real estate? Well, I'm Angel with the
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Academy Presents Real Estate Investing Rocks,
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and I'm here to help you if you want to go for
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your piece of that pie. Are you new? Are you
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new to this and you just don't know where to
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start? It's okay. Are you someone that has invested
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but you feel stuck, you feel like you've lost
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momentum, you don't know where to really head
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from here? Are you a seasoned real estate investor
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who is doing great, but maybe you just want to
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hone a few skills here and there? This is the
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place for you. The Academy Presents Real Estate
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Investing Rocks podcast will connect you with
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industry experts so that you can save time, avoid
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costly mistakes, and begin living the life you've
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dreamed of all through real estate investing.
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You're already taking the first step. Just by
1:00
joining us here today. So I'm betting you don't
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have one system. You probably have like a bazillion
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systems. And you got a bazillion more from all
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the people you've talked to. Absolutely. How
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do you how do you make that leap? So part of
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the question is the budget, right? Because if
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I told you that I was the one that was behind
1:24
the automations that I created the newsletter
1:26
that I was the one that walked people through
1:29
syndication pro, that I was the one that was
1:32
doing the social media marketing, that I was
1:34
also running my own podcast, doing the audio
1:38
editing, doing the video editing. At some point,
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there's too much on your plate, right? So you
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got to find some people that can help you with
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these things. So we have somebody that's a director
1:51
of marketing. We have another person that helps
1:54
with social media, another person that kind of
1:57
creates the automations in our active campaign
1:59
back office. We got another person that does
2:03
the investor relations and the management of
2:06
the investors once they come through and gets
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them to show their accreditation status and walks
2:11
into your syndication pro. And I just don't have
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the time or bandwidth to do all of these things.
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So How do you scale to the point is you got to
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find some people that hopefully can survive for
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a couple of years as you're building your business
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with the end objective to make money as you take
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down a couple of syndications or bill to rents
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or whatever it is that you're doing. But as a
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lot of people in the world know that are real
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estate professionals in a variety of capacities,
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sometimes when you're in real estate, you might
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not see a paycheck for six months or longer.
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And like, how do you survive in that time space,
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right? And like, how do you pay people to work
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for you? Well, you got to find a couple of partners
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that are also willing to kind of do their portion,
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right? So like, I pay for everything that the
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Capital Razor Show does, and I don't expect my
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partners at Legacy to pay for that. But even
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though, like the people that are coming in from...
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my podcast, they're becoming capital raisers
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for our business. So it kind of all balances
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out and we try and keep each other afloat and
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give each other positive reaffirmation that they're
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in the right place because it is scary. It's
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very challenging, especially if you're married
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and there's bills to be paid and you've got a
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mortgage, a car, utilities and everything else.
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Like, geez, how am I supposed to do this thing?
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And that's where it becomes a little bit tricky
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to scale your business because you're so focused
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on trying to survive that it's hard to build
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out these systems and bring other people and
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find them. But one of the ways that you can possibly
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do that is by expanding your reach. So I love
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this kind of thing that Hunter Thompson teaches
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because he says a lot of people in the capital
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raising space, they're very focused on trying
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to change their ratio from 10 % to 20 % closing
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so that if I talk to 10 people, instead of one
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person investing in the syndication, two people
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will. And what Hunter Thompson says is really
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the focus should be on how do I get in front
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of 10 ,000 people? Because then you don't have
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to change your process. You just have to get
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in front of more people. And you have to find
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a platform to do that, whether it's a meetup,
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like you have a conference, that's an amazing,
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amazing platform. I'm sure it's a ton of work
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too, but this is what's going to get you in front
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of more and more people, right? So podcast releases,
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going and starting your own show, possibly having
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ongoing newsletters and consistent ongoing communication
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with your people. These are all some of the tools
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that you need to implement. So for the aspiring
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capital raiser out there, like take a breath.
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Hang out with some people that are already good
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at what you're doing and try and ride their coattails
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as you survive in your process of scaling That's
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like the best advice that I can do Wow. Yeah,
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absolutely so you got your network and You both
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you've got your avatar. You've got your network
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What kind of conversations do you suggest like?
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How do you start that money conversation? Without
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without making them run off Well, it depends
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on how you position yourself. If you're chasing
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them, it's a different conversation than if they're
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chasing you. Or if they're, you know, like, so
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my best way to talk to people is exactly what
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you do at Brian brisco's meetup, right? Hey,
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where are you at on your multifamily journey?
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Oh, you know, like I just took down a deal. And
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then before you know it, they're all excited
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about the fact that they're investing and they're
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feel like they're being listened to. So that's
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always my first question to anybody that gets
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on my calendar. Hey, you know, thanks for your
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time today. Like where are you on your multifamily
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investing journey? And then that leads into so
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many different things, but it's never about like,
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let me sell you bill to rent or let me sell you
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on our existing deal or some future deal. It's
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like, who are you? Like, what are you trying
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to accomplish? And you know, is there anything
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I'm always looking for? Is there anything that
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I can relate with them? you know are they snowboarders
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are they do they like meditation do they like
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thinking grow rich do they like reading do they
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like podcasting do they like any of the same
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things that i like you know if they've started
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a family i want to start a family how did you
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you know hook that up and create a family because
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i want to have babies and i still don't you know
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like tell me about that and they feel like they're
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being listened to but the main objective is just
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to make friends and never sell anything So that's
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what I try and do and just try and make genuine
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friendships with people. And some people, if
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they like you, they'll ask for more details about
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what you do. And if you get in front of enough
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people, they'll kind of self -select. You know,
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I've been watching you and your content. For
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the last couple years, I think I want to explore
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a little bit further doing business with you.
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You seem to know what you're doing. You seem
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to have some good partners that are also very
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good at what they're doing. I like your content.
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Let's talk about this. Can we raise capital for
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you or inject some capital into your business?
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What does this look like? How do I get paid for
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doing this? What's the timeframe? Tell me about
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your deals. And then they start becoming curious
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and they ask all the questions that they want
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to have the answers to. It's not you just kind
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of selling. whatever it is that you want to sell,
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people start asking you and you kind of prime
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them. You're like, Hey, you know, this is what
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we're doing. We're in Louisiana. Oh, well, why
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are you there? Not doing it. Don't you live in
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Phoenix? How come you're not doing built to rent
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Phoenix? That's a fantastic question. Well, because
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it's a major pain in the butt to do built rent
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here and the red tape is enormous, right? It's
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like three years. And, you know, my objective
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is to get the investor their capital back as
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fast as possible. And in certain markets, like
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in Louisiana and Alabama, we can do that. So
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that's why it's a great question and kind of
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just have a regular conversation like that. Hey
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guys, it's Angel. In case you didn't know, I
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put on a three -day virtual summit twice a year.
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It's the Real Estate Investing Rocks Summit,
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and I've been hosting it since March of 2020.
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The next one, number 11, is March 25th, 26th,
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and 27th. Three full days, no cost to you. My
8:25
friend Sandy is speaking, and she's supported
8:27
me at every single summit since I started. Joe
8:30
Fairless, Kathy Fedke, a Tony Award winner, another
8:34
friend who's raised literal millions from people
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met on LinkedIn, and the list goes on. You have
8:40
to join our Mighty Networks community to gain
8:42
access. And that link, it's in the show notes.
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Wow. No, that's great. Some other stuff that
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you covered, you talk about like keeping your
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investors warm. I think that that is incredibly
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important, especially right now, because I'm
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hearing from people all the time that people
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that invest with them, deal after deal after
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deal, are pulling back a little bit. You know,
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they're giving them a little bit of the cold
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shoulder or they're ghosting them completely.
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How do you, how do you like hedge against that?
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How do you keep those investors warm? So there's
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a lot of fear. going on and one of the questions
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that pertains to this is like how do you project
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yourself as a confident human being that stays
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successful in times of hardship during times
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of COVID? Do you disappear when something funky
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happens on the property and like you know the
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roof kind of caves in and almost damages some
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people's property like And maybe that affects
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the cash flow one month or the next. Are you
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communicating all this stuff? Are you presenting
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yourself in such a way where you have access
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to pick up the phone and call the sponsor at
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all times or communicate with somebody? I think
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this is part of the communication that's required
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to keep investors warm. Are they getting a newsletter
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from you? Are they hearing you on podcasts? Are
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they receiving investor updates? All of these
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things is what you do to keep investors warm.
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and you don't want to disappear in times of hardship.
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And right now it is a time because people are
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freaking out about the gas prices, although they've
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been starting to come down a little bit. They're
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still paying more for stuff than they did a couple
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of years ago and that's freaking them out. So
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people are kind of like hesitant to invest in
10:30
things. They want to see what the market is going
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to do. Not only that, but the price of lending
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has increase significantly, right? So like it
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used to be earlier this year, three and a quarter
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percent for a 30 year mortgage. And now it's
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like 5 .75 % or something similar to that. And
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when you're taking down multifamily value add
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properties or some other nuanced niche multifamily
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kind of asset, whether that's a class or heavy
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lift or student housing or senior living or whatever
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niche it is. Like, can you still make the property
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pencil and what's going to happen in the future?
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And are you going to be willing to do bridge
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debts still? Or, you know, are you going to try
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and get Fannie Freddie financing or agency debt
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now? you know and you'll be stuck with the deal
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without you know you'll have prepayment penalties
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and you don't know what's going to happen in
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a few years so there's all these questions that
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are people that are making people very nervous.
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All while this is happening, you know, the prices
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of housing is increasing because the prices of
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mortgages are increasing. So the prices of people
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that don't necessarily want to buy a house right
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now, they're kind of moving into rent, which
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is great for multifamily, great for built to
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rent, because there's such a demand for housing
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and the price keeps going up. There's going to
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be constantly people that are wanting to stay
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in your apartment buildings and or houses that
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you're building or anything else. that you're
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kind of providing for the general public, especially
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in the workforce housing department. So how do
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you keep investors warm in between deals? You
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stay present. You confidently communicate that
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you are a leader, the person that they should
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be following in these times. And then you don't
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disappear. And you stay consistent during these
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times. And you continue to show them why it makes
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sense for them to invest with you. by continuing
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to take down properties even without their capital.
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So that's kind of one of the things that creates
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more people to return invest because they have
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this fear of missing out. I remember back in
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the early days, you would have an investor flying
12:39
to town to look at a fourplex and they'd be like,
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oh, well, I don't know you very well yet. And
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we'd tell them, hey, we're going to take this
12:46
thing down anyways. and then sure enough we would
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and they would see us perform and purchase these
12:51
properties and then and then we'd go back to
12:54
them and be like look man this is the astronomical
12:56
casual that you just missed out on. And they're
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like, oh man, I can't miss the next one. Let
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me know when the next one comes. And then sure
13:04
enough, that's how you would get them to invest.
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So by continuing to perform, by continuing to
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communicate throughout these periods of time
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when investing gets a little bit harder, that
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improves the investor confidence from limited
13:17
partners to the point where they're like, man,
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why am I not buying real estate? Just because
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everybody else is scared doesn't mean that I
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should be. Doesn't Warren Buffett say like when
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When everybody's afraid, that's exactly when
13:29
you should be investing. So they'll kind of figure
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it out on themselves as long as they see that
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you're consistently doing business and operating
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from ethical perspectives and showing up and
13:42
taking down deals. They'll eventually come back
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to you because at the end of the day, one of
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the biggest mistakes you could make if you like
13:48
real estate is not to buy enough. And then the
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second mistake is to sell too soon. And when
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people see that they're like, dang, I should
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have, I remember when COVID was here and I didn't
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invest and everybody else crushed it. I don't
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want to make the same mistake. And then they'll
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come and invest with you. And in some cases,
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hopefully if they're, if they have enough investor
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confidence in you. Wow. That's, there's a lot
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of stuff you just dropped there. Yeah, I mean
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it's fun to unpack it all too, right? So this
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is what we have the show for. We can dive into
14:22
all these different kind of categories and I
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get to pick like the greatest indicators mines
14:27
all day long and then for the most part there's
14:30
nothing really for sale. I mean I do a little
14:31
bit of promotion of my sponsors but like we're
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not pitching deals on there. We're just kind
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of helping the capital racer out there that wants
14:38
to scale. So I recommend if you are interested
14:43
in learning about capital raising, like come
14:45
get some free information on the capital raiser
14:47
show or go through, you know, whoever your favorite
14:50
podcaster is, and then select the capital raising
14:53
episodes there, which is also a great avenue
14:56
for learning about this. And for some people,
14:59
they don't want to do anything other than raise
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capital. And I'm kind of one of those people
15:04
where I don't want to be in charge of like the
15:07
acquisitions anymore. Back in the fourplex days,
15:09
that was kind of cool, but I can't, you know,
15:12
it actually terrifies me. Like, how am I going
15:15
to compete with Zach Captainstall and Phoenix
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and take down a property at the same level that
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he does? And he's got 150 employees. Like, how
15:23
am I going to manage it as good as he does? So
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I just stay in my lane. Hey, let's just focus
15:27
on making friends. Uh, finding capital raisers
15:30
and niche down into something that we're really
15:32
good at, that we're confident at, which is buying
15:35
and acquiring land and subdividing it and putting
15:38
in infrastructure and building houses and selling
15:41
the entire subdivision off to an institution.
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There's not a lot of people in the world that
15:45
can do that. So if we're good at that, that makes
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life easier. We don't have to compete with that
15:50
cap install. We can do our own things, stay in
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our own lane, kind of create our own brand. And
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that it makes it life a lot more. comfortable
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for me, right? Yeah. But I will say like the
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idea of, of getting smaller to get bigger, that
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is incredibly counterintuitive. I haven't really
16:11
thought about it that way. Getting smaller. So
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sub niche down, I guess could be perceived as
16:17
getting smaller. But what we're doing is we're
16:19
creating expertise in an area that a lot of people
16:22
are not experts at in order. to be able to differentiate
16:26
ourselves from people and the built rent stuff
16:29
it's growing pretty quickly right so we have
16:32
one project that's 100 units another one that's
16:35
154 that's being engineered and then we're going
16:38
to build another 220 and then another 240 and
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like within 18 months we'll be at 675 units and
16:45
have this amazing momentum play to keep growing
16:48
and who knows maybe we can get to a thousand
16:51
units that we've built in the next three years
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but that's something that we can do by subnitching
16:56
down into a specific area of expertise and a
16:59
reason why a lot of people are leaving the value
17:01
add space because it's getting harder to make
17:03
deals pencil. So they're kind of meandering into
17:06
assisted living and senior housing and heavy
17:09
lift or development, whether that's built to
17:12
rent or vertical development of like three or
17:14
four story apartment buildings, you know, like
17:18
people are trying to find some way that they
17:20
can make their investors enough money to stay
17:23
in business throughout, you know, like anything
17:26
that's happening right now. And it is with this
17:28
lending environment getting harder and harder.
17:30
I've been hearing it quite a bit to make things
17:33
pencil, but on the owner operation side of it,
17:38
people will always need a place to live. And
17:42
I think I just saw on CoStar that there's a shortage
17:45
of 4 .3 million apartments right now. And I don't
17:48
even know what the number is for houses that
17:50
are short, but I know that there's not enough
17:52
houses either. So, you know, find a way to get
17:56
in the game and stay in it and don't stop buying.
17:59
If you're on the sidelines right now, maybe,
18:01
you know, be cognizant of what's going on, but
18:05
don't let it paralyze you. Yeah, no, man. You've
18:10
you've shared. So many just absolute golden nuggets.
18:15
And that's fantastic. However many minutes like
18:17
it has just flown by and I'm going to be sitting
18:20
on this and thinking for a few hours because
18:22
that was a lot. And I don't think people see
18:27
all the moving parts and they're like, oh yeah,
18:30
I'm going to raise capital. And there's so much
18:33
more to it than that. I thought it was going
18:35
to be easy. I was like, I know a ton of people.
18:38
This is going to be easy. It's an entire world
18:40
that you can go into so many little parts of
18:43
just a capital raising. It's an entire universe.
18:46
Yeah. But you know, just thank you for being
18:48
here and thank you for sharing that massive knowledge
18:51
with everybody that's attending and listening
18:54
and that's going to listen in the future because
18:56
this was huge. Like, I don't even know how else
18:59
to explain it other than it was huge. Massive.
19:02
Awesome. Lots. And it's really fun too. And it's
19:05
an honor to be here. Thank you so much for inviting
19:07
me. It's been a blast. Well thank you for saying
19:09
yes and thank you for being willing to share
19:12
everything or not even everything like this small
19:15
little piece of everything you know because I
19:19
feel like you know so much more. You are an expert
19:23
in this particular part of it because that's
19:27
what you do and that's what you committed to
19:28
and kudos to you. Thank you. I appreciate that.
19:33
That's awesome. So guys Stick around, there is
19:37
so much more to come and there's so much more
19:39
that's already happened and you absolutely want
19:41
to be here and be a part of this and maybe you
19:44
come and join us on the live side. But until
19:46
then, I'll see you later. Thank you.