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From Nonprofit to Multifamily Mastery: Gabe Craft's Story · Go Big with Gib Podcast

• 0:00
  Speaker 1: Welcome to the Go Big With Gibb podcast, where we talk to professionals, business owners and entrepreneurs about their big wins.
• 0:06
  Speaker 1: Welcome to this episode of Go Big With Gibb.
• 0:16
  Speaker 1: Today, I've got a good friend of mine, gabriel Kraft, with me.
• 0:20
  Speaker 1: Gabe, how are you today?
• 0:21
  Speaker 2: 10 out of 10, Gibb.
• 0:22
  Speaker 1: Awesome.
• 0:23
  Speaker 1: Look, it's fantastic to have you here with us.
• 0:25
  Speaker 1: Let's dive right into it.
• 0:28
  Speaker 1: If you could just briefly introduce yourself to the audience.
• 0:32
  Speaker 2: All right, let's take it pretty far back here.
• 0:35
  Speaker 2: Let's go real far back.
• 0:37
  Speaker 2: I think where we're probably going to take this conversation is related to wealth and real estate and all that fun stuff, and I'm going to take it all the way back to.
• 0:47
  Speaker 2: You know, I was born on the West coast to two parents that were sort of grassroots organizers in a way that also never made any money and never made any real money.
• 0:59
  Speaker 2: They they really always had sort of the, the regular retail and or sort of a by the hour job and so, watching that, I kind of absorbed that, like we all do with our parents.
• 1:10
  Speaker 2: And when I was in high school, about to go choose what I want to do with the rest of my life, I was thinking, oh, let's go save the world.
• 1:18
  Speaker 2: So my first career that I aimed for and achieved was in education.
• 1:22
  Speaker 2: I had like a science background and ended up being an educator.
• 1:25
  Speaker 2: But during that transitionary period, like call it late 90s I'm in my early 40s, so late 90s I was kind of picking what I want to do for school and my dad at that point got the itch for stock trading.
• 1:37
  Speaker 2: So as I was sort of watching myself go towards an education background, I saw him get really into business and watching and falling asleep to all the business news and riding that wave that was late 90s then crash and then seeing what happens after that stock market crash.
• 1:56
  Speaker 2: So I think that was a pivotal piece for me.
• 1:59
  Speaker 2: When I started having some success in my 20s in education, I kind of came around to this concept of although my parents had spent a lot of energy doing grassroots, local community stuff, the impact was limited and how can I have a bigger impact?
• 2:16
  Speaker 2: And education, I thought, was going to be the solution.
• 2:19
  Speaker 2: I did amazing jobs in education, everything from being a mathematics teacher to seventh graders in the hood, which was amazing, and I learned a lot about myself.
• 2:28
  Speaker 2: But I also kind of scaled that up and was able to be part of a consulting business or nonprofit that educated superintendents on how to like do better in their schools.
• 2:39
  Speaker 2: It was about closing the achievement gap and really having a huge impact in education achievement gap and really having a huge impact in education.
• 2:47
  Speaker 2: However, in that space where we were really fighting hard to have scale to impact every kid in all the California schools and then they could take that and usher out through the nation, I saw that in that space, there was a lot, a lot of limitations on what you can do as one person, that a lot of people think, oh, I'm going to get rich and then give back and philanthropy is great, but I don't think they realize that while making money, if you're doing it right, you actually are giving.
• 3:12
  Speaker 2: You're doing a lot of good.
• 3:14
  Speaker 2: Think about what the biggest businesses in the country do and what kind of value they drive.
• 3:19
  Speaker 2: I said a lot to say that in my background.
• 3:20
  Speaker 2: I went from education and quickly realized that there was some scale issues with sort of giving back and the nonprofit path.
• 3:23
  Speaker 2: Lot to say that in my background.
• 3:23
  Speaker 2: I went from education and quickly realized that, you know, there was some scale issues with sort of giving back in a nonprofit path.
• 3:28
  Speaker 2: And I met these McKinsey consultants.
• 3:31
  Speaker 2: I thought they were amazing.
• 3:32
  Speaker 2: Mckinsey is like a really big consulting firm.
• 3:34
  Speaker 2: You need an MBA to be a consultant for them.
• 3:37
  Speaker 2: So I went and got my MBA at the university of Michigan, um, and from that part of my path in 2013, 14 and 15, I had two years two full years, academic years to step back and go.
• 3:50
  Speaker 2: Okay, what do I want to do next?
• 3:51
  Speaker 2: I'm comfortable with this concept of going and making money and creating value.
• 3:56
  Speaker 2: The same way, amazon and the ability to deliver anything we want to our doorstep in a few hours delivers a ton of value to society.
• 4:03
  Speaker 2: Like, what do I want to do next?
• 4:06
  Speaker 2: Had some great professors that sort of opened my mind to real estate.
• 4:10
  Speaker 2: University of Michigan has a pretty deep real estate history.
• 4:12
  Speaker 2: Steven Ross, the guy that business school is named after, is the huge developer that did all this stuff um at the train station area in New York city and he's a huge developer.
• 4:23
  Speaker 2: And while I was there studying something different, I got to interview Sam Zell in Chicago at his equity residential offices.
• 4:29
  Speaker 2: And if you're familiar with commercial real estate, sam Zell is one of the pioneers kind of him, and his business partner grew up in and around the University of Michigan area, so he was open to letting us interview him and he talked about real estate with such passion that it kind of rubbed off on me Really literally.
• 4:48
  Speaker 2: That interview was one of the first times where I thought, okay, I'm going to go get my MBA, start having a decent salary, a little six figure salary for the first time in my life but what's after that?
• 4:59
  Speaker 2: And real estate I started to study it under a couple of people there at the university, including Peter Allen, who was a professor who was doing turnarounds in Detroit.
• 5:07
  Speaker 2: So they would buy these little areas that would be mixed use, coffee shop and a bar on the bottom floor, maybe eight units above, and he was teaching students how to source these things in real time.
• 5:17
  Speaker 2: So, like, your final project was go find a property and present to me your value add opportunity.
• 5:22
  Speaker 2: So, 2015, I'm graduating and I'm finally making money and I'm telling my wife look, we're going to live like misers, we're going to not spend anything and we're going to take every penny we can and put it into real estate not commercial real estate.
• 5:35
  Speaker 2: At that point, because I lived in Dallas, I was familiar with Ohio.
• 5:39
  Speaker 2: We started buying residential units in Ohio, sort of as a playground.
• 5:44
  Speaker 2: It's super cheap at the time to buy in Toledo, so we chose Toledo.
• 5:48
  Speaker 2: We had a grid manager that we had met through BiggerPockets, which is a little forum where people can interact, and from 2016 to 2018, we went from zero units to 24 units.
• 5:59
  Speaker 2: So that's the background to get into real estate.
• 6:02
  Speaker 2: And from there we've sort of scaled up, scaled back, changed and pivoted a few times and we can talk more about that.
• 6:09
  Speaker 2: But yeah, that was sort of where I got my itch scratched for real estate 2016.
• 6:12
  Speaker 2: Doing were investing in Toledo, ohio.
• 6:15
  Speaker 1: And I guess the price, the barrier to entry there was a lot lower because just prices were lower in that area Is that, was that one of the primary drivers for you to invest in that market?
• 6:37
  Speaker 2: Yeah, that and my.
• 6:38
  Speaker 2: So, like so many MBAs, though, in theory it sounded good and I was all motivated to do real estate.
• 6:44
  Speaker 2: And then, when it came time to making that first purchase, I just overanalyzed, right, I graduated in 2015.
• 6:50
  Speaker 2: I had some money signed, bonuses and whatnot, and I didn't buy anything until way into 2016.
• 6:56
  Speaker 2: I spent a year listening to all all these podcasts.
• 6:59
  Speaker 2: I spent a year reading all these books and analysis, paralysis, and the thing that got me going is so many stages of my life.
• 7:05
  Speaker 2: Right, it's just a key member in my life taking the step and me following behind them.
• 7:10
  Speaker 2: And so it was my big brother.
• 7:11
  Speaker 2: We were dorking out together on the podcast, dorking out together on the books, dorking out together on our next steps in life.
• 7:17
  Speaker 2: He got his MBA a year or two before me, so I got mine.
• 7:20
  Speaker 2: And then, ultimately, he went and bought a property and then a duplex as well out there and I was like, all right, game on, I can't just let him go and win the day.
• 7:30
  Speaker 2: We worked on marketing together, so we sent out a set of postcards and, in theory, for postcard single family marketing, you're supposed to send seven out before you get your first lead.
• 7:42
  Speaker 2: Toledo, ohio was apparently ready for buyers, so we sent out one set of postcards.
• 7:47
  Speaker 2: We had 10 leads and I got my first deal.
• 7:50
  Speaker 2: I bought a house for $6,350 plus taxes, plus I had to put a new roof on it.
• 7:56
  Speaker 2: Um, it's funny, it's it's actually my very last single family that I still own.
• 8:00
  Speaker 2: It's just a cash cow.
• 8:02
  Speaker 2: It's a great asset and it's a little history moment for me, so I still own that one.
• 8:06
  Speaker 2: But yeah, man, the fun thing of jumping into single family with your brother is he gets to make some of the front end mistakes.
• 8:12
  Speaker 2: And then I 2017, we bought two six-unit apartment complexes, and that's where things really shifted for me, where I started to realize there was sort of a gap in my knowledge that single family was pretty easy to make sense of.
• 8:34
  Speaker 2: But once I started buying apartment complexes, I really needed some mentorship and some guidance, which my brother couldn't provide, our property manager couldn't provide, so I had to step back in 2018.
• 8:46
  Speaker 1: Yeah, so talk to me about how you made that transition from doing single family.
• 8:51
  Speaker 1: I think you mentioned that you did some wholesaling at one point as well.
• 8:55
  Speaker 1: How did you transition from single family to multifamily, to larger multifamily properties?
• 9:03
  Speaker 1: I know you said you did a couple of small apartment units, but now you're doing really big projects and you're talking about hundreds of units sometimes.
• 9:13
  Speaker 1: How did that transition occur?
• 9:16
  Speaker 2: Failure was my fuel.
• 9:18
  Speaker 2: So I like groups, and plots and tries are really like pretty straightforward.
• 9:23
  Speaker 2: They're super similar to a single family and property managers that manage a single family are good at it.
• 9:29
  Speaker 2: But six unit complex is tough.
• 9:32
  Speaker 2: So the story is in 2017 we had acquired this thing and we got it filled up by late 2017.
• 9:37
  Speaker 2: After lots of effort, we got one of our six units filled up by late 2017.
• 9:39
  Speaker 2: After lots of effort, we got one of our six units filled up.
• 9:43
  Speaker 2: And the very same day we got it filled up, we get a call from the property manager that says we got bed bugs and we're going to have to move three of the six tenants out into hotels.
• 9:54
  Speaker 2: It's going to take a bunch of money to fix because bed bugs are hard to get rid of and and now your occupancy is 50, but you're also maybe not going to get these people back right.
• 10:04
  Speaker 2: And we didn't.
• 10:05
  Speaker 2: And then, um, what we realized is look, those two 16 apartment complex were the best education I ever could have.
• 10:12
  Speaker 2: I knew I didn't know how to buy right, I didn't know how to pick a good market.
• 10:16
  Speaker 2: I didn't know how to operate and asset manage.
• 10:19
  Speaker 2: I didn't know any of that stuff, and I learned it by failing.
• 10:21
  Speaker 2: You know, we still made money Anybody that could fog a mirror made money in 2017, 2018, if you had a multifamily but but we didn't do nearly as well as I had wanted to and it kept me up late at night thinking about this asset.
• 10:35
  Speaker 2: That was supposed to be sort of a fun next step.
• 10:39
  Speaker 2: I mean I thought I bought right and I did it.
• 10:41
  Speaker 2: What was cool about that moment?
• 10:44
  Speaker 2: It was happening while I was working a job, for I was a consultant from 2015 to 2018.
• 10:52
  Speaker 2: And I had just made a transition to go full-time at Salesforce, a big tech company, where I get to work locally.
• 10:59
  Speaker 2: I get to work in Dallas.
• 10:59
  Speaker 2: I had a little more time because I wouldn't be traveling all over the country, and so I made a transition on my job as well as in my investing, and in my investing I decided to stop being active actually, so I wasn't going to do JVs with my brother or investments by myself.
• 11:15
  Speaker 2: I was actually going to become a limited partner in other people's deals.
• 11:19
  Speaker 2: I got a mentor in the multifamily space.
• 11:22
  Speaker 2: I met a bunch of great sponsors here that were local to Dallas, and then I realized, once I learned, what a good market is that I was living in one of the best markets ever and I hadn't done any investing here.
• 11:32
  Speaker 2: So you know I had a limited amount of money but I was making enough to passively invest in deals, and we passively invested in a couple thousand units, which is deceiving.
• 11:43
  Speaker 2: We had a little tiny, tiny slice of large deals with lots of unit counts.
• 11:47
  Speaker 2: So let's not think I was putting trillions of dollars into other people's deals.
• 11:51
  Speaker 2: I was strategically figuring out which sponsors I loved, which markets I loved and which deals made sense to me that I could also learn from, because eventually I wanted to become a general partner.
• 12:02
  Speaker 1: And then to build up my liquidity.
• 12:03
  Speaker 2: I had my day job, but somehow I managed to hustle in the space to do wholesale deals and single family flips here in Dallas where I could really oversee it and make sure I was making 30, 40, 50 or more per flip, and that allowed me to have a really strong boon right when the market was going great.
• 12:21
  Speaker 2: So, 2018 to 2021, I mean, everything went really well.
• 12:26
  Speaker 2: Uh, I went full cycle on my limited partnership deals.
• 12:29
  Speaker 2: So those deals where I put in 50, 60, 40 K whatever it was they, that was that double.
• 12:36
  Speaker 2: Every single one of those doubled, with one exception by 2021.
• 12:40
  Speaker 2: And I'd been doing flips and I'd been doing wholesale deals.
• 12:43
  Speaker 2: So I had a nice chunk of money from which to sort of build a foundation to become a general partner myself, and I had the knowledge at that point.
• 12:51
  Speaker 2: I'd just been going to everything multifamily between 2018 and 2021 here in Dallas, and Dallas is a great place to learn the market and learn the business.
• 13:00
  Speaker 2: And so by 2021, I was in a spot.
• 13:03
  Speaker 2: I felt like, hey, I've got this, let me work with an advanced team, a team that's got some experience, and bring them deals.
• 13:10
  Speaker 2: And so I found a good deal in far East Dallas, brought it to the team and you know the rest is history.
• 13:15
  Speaker 2: I've been a general partner now on five deals.
• 13:18
  Speaker 2: We just closed one in February and they've all been around the heart of Texas.
• 13:22
  Speaker 2: Everything's been in DFW except one deal where I partnered with a buddy in San Antonio.
• 13:27
  Speaker 1: Cool yeah.
• 13:28
  Speaker 1: So let's talk a little bit about Kraft Capital.
• 13:31
  Speaker 1: I mean, I know you founded Kraft Capital Investments back in 2016 and you were talking about the growth that it's experienced.
• 13:41
  Speaker 1: Tell me a little bit about what the team looks like and and um, you know what your role is on the team.
• 13:46
  Speaker 1: Tell us a little bit about that.
• 13:48
  Speaker 2: Yeah, I will start with um again, kind of school of hard knocks, like I did with the multifamily.
• 13:54
  Speaker 2: I've learned that, um, these are simply just um, private equity deals where you're buying large businesses.
• 14:02
  Speaker 2: The businesses just happen to be multifamily apartments and in those types of businesses success depends a lot on leadership and having one head to chop.
• 14:13
  Speaker 2: When you've got these distributed sponsorship groups where there's no clear leader or the leader that's supposed to be there doesn't really have leadership chops, it's murky.
• 14:22
  Speaker 2: And when things are murky, your on-site management in an apartment complex has murky ideas of where they're supposed to take the business plan and your investors are taking on more risk than they need to because everything seems a little jumbled.
• 14:36
  Speaker 2: I learned that through being on multiple sponsorship teams that are sort of set up a little different, until finally, by my third deal, I said, hey look, I'm going to be the head to chop, but anybody that's part of my organization is kind of using my organization more like a platform.
• 14:50
  Speaker 2: So I have added the skill sets, the parallel skill sets I need, but at the end of the day I put my name on it intentionally.
• 14:58
  Speaker 2: It's a stupid thing to do, usually for your business, right?
• 15:00
  Speaker 2: You're not going to have the enterprise value you normally would.
• 15:06
  Speaker 2: You know it's harder to sell it and not be attached to it.
• 15:07
  Speaker 2: But I did it intentionally because I want there to be my head to chop on any of these deals that I'm bringing investors money into and everybody that's working with me is going to understand that piece and then support that piece of the business.
• 15:17
  Speaker 2: So I have a person that does property management really, really well.
• 15:22
  Speaker 2: We've become very good friends and he is I consider him a huge part of the success of Kraft Capital Investments as we take on these future deals.
• 15:30
  Speaker 2: He's hiring, he's training, he's supporting, he's going there frequently to the asset darn near you know a fixture on the onsite teams and he's a very hard worker.
• 15:41
  Speaker 2: So we he works like me, like a crazy person.
• 15:43
  Speaker 2: You've got to kind of be a psycho If you're going to work with crowd capital investments when it comes to, like, your business hours.
• 15:48
  Speaker 2: And so, yes, father's day, we were trying to organize some marketing meetings.
• 15:53
  Speaker 2: Every Saturday and Sunday we meet and that's just because of the work we do is heavy value of ads and it kind of reminds me of the consulting world where we do like a mergers and acquisitions.
• 16:04
  Speaker 2: It's when it's on, it's on and we are working our tails off to get things from 70, 70 or 80% occupied up to 100%.
• 16:12
  Speaker 2: So he, uh he, my business partner, misha Kaufman, big part of my business behind the scenes.
• 16:17
  Speaker 2: I have had this wonderful relationship with Sean Griffith who himself at one point was represented as TWT multifamily.
• 16:24
  Speaker 2: He goes out, could easily do any of this by himself, but he's also reaching that part in his life where him and his wife they want to travel the world big portions of the year.
• 16:34
  Speaker 2: They're near retirement.
• 16:36
  Speaker 2: He's had a great career at companies like Southwest Airlines and other tech companies, so he supports my business as, like the VP of Treasury, which is another term we call him sometimes, is the VP of pretty much anything Gabe doesn't want to do.
• 16:48
  Speaker 2: He does a lot of the back office stuff.
• 16:50
  Speaker 2: that's a pain in the neck and keeps my head off of the strategic sort of visionary stuff.
• 16:54
  Speaker 2: And anytime I needed to step in for sort of more of the day-to-day, he's got the skill set, so he's been key.
• 17:00
  Speaker 2: Time I needed to step in for sort of more of the day-to-day, he's got the skillset, so he's been key.
• 17:04
  Speaker 2: And then our fourth partner, nelson Lee.
• 17:05
  Speaker 2: He's been in the business, very experienced, very senior, has the resume to impress the brokers on any deal we chase and also has the knowledge on how to handle the tough situations that I think the rest of the team really benefits from.
• 17:20
  Speaker 2: So that's my core four.
• 17:22
  Speaker 2: We have some employees that we've recently taken on.
• 17:25
  Speaker 2: That's been a journey.
• 17:26
  Speaker 2: We've followed the EOS or entrepreneurial operating system, and traction, and it's been a huge help to sort of go from all right maybe it's Gabe and Misha as founders, or Gabe and Sean as founders on some deals All right.
• 17:40
  Speaker 2: Now we've got this core group and employees.
• 17:43
  Speaker 2: How do you step up to that emerging size in multifamily?
• 17:48
  Speaker 2: And even how do you plan on what you're going to do, because these businesses don't necessarily pay out as much as you might want on the front end of a deal.
• 17:57
  Speaker 2: They pay out over a long period of time.
• 17:59
  Speaker 2: So how do you structure and plan for that?
• 18:02
  Speaker 2: So that's been the big learning thing that I'm going through right now.
• 18:05
  Speaker 2: That has been a part of our journey.
• 18:09
  Speaker 1: This episode of Go Big with Gibb is brought to you by Irons Equity.
• 18:12
  Speaker 1: At Irons Equity, we specialize in helping investors like you create long-term generational wealth and save money on taxes through recession-resistant real estate investments that create passive income for you and your family.
• 18:26
  Speaker 1: If you want to secure your financial future, go to investwithgibbcom to schedule a 30-minute introductory meeting with me.
• 18:33
  Speaker 1: Gibb Irons Again, that's investwithgibbcom.
• 18:40
  Speaker 1: Gabe, talk to me a little bit about.
• 18:42
  Speaker 1: I know you've really got your ear to the street in terms of you know you're watching the markets, and particularly with your hyper-focused on Texas.
• 18:52
  Speaker 1: You know, and I know you live in DFW, you invest in DFW.
• 18:56
  Speaker 1: Where do you see the market right now?
• 18:59
  Speaker 1: You what?
• 19:02
  Speaker 1: Where do you see the market right now?
• 19:03
  Speaker 1: I mean, as we sit here today, there's been a lot of different shifts in the market over the time frame that you've been involved in.
• 19:06
  Speaker 1: I mean you, you have a lot longer time in the industry than I do, and that's one of the things I love, you know, talking to you about is because everything was going so well for everybody for so long and then we hit a rough patch.
• 19:22
  Speaker 1: Right, but where are we right now in terms of just your personal opinion?
• 19:27
  Speaker 1: Where do you think the real estate market you know market is, and what are you seeing in terms of market trends and what are you expecting to happen, you know, over the next, you know one to two years.
• 19:42
  Speaker 2: I will give you three things, and I think this is really key.
• 19:45
  Speaker 2: You know I've kind of followed you on social media.
• 19:47
  Speaker 2: You have a great audience that ranges from like advanced to beginner, so I apologize to any folks that are a little on the beginner side.
• 19:54
  Speaker 2: But I'm going to dork out a bit and it's three key things that are happening in June right In Texas in 2024.
• 20:01
  Speaker 2: The first thing is that a lot of deals are failing or near failing, but there's things happening behind the scenes such that those deals are not going to hit the marketplace.
• 20:14
  Speaker 2: So, while we all may be anticipated in 2023, that there'd be a lot of failing deals that would be coming on at cents on the dollar, lenders are making adjustments and deals are being made directly between lender the poor operator and the new operator that the lender wants to take over the deal.
• 20:31
  Speaker 2: So you're going to see that there's very low transaction volume in a place like Dallas or San Antonio or Houston, relative to what you would have thought, given that there was near none last year and we wanted all that pain to hit in 2024 because we were gearing up for these great deals.
• 20:48
  Speaker 2: The other thing that's happening is that, because prices have come down so much.
• 20:53
  Speaker 2: The loan amounts are now sort of the key pivot point on a lot of good deals, in that the deal would be a good deal if it was just a little bit cheaper than the loan amount, but it can't sell for below that.
• 21:07
  Speaker 2: The lenders aren't willing to do that.
• 21:09
  Speaker 2: So the lenders are sort of preventing some of these deals from being listed and making sense, and we'll see how that plays out over the next 12 months.
• 21:17
  Speaker 2: I think there's more pain to come because some of it's been kicked down the road by things like adjustments to your loan terms or giving you options that aren't quite your typical.
• 21:27
  Speaker 2: Hey, you need another year of interest, you know because all this stems from the lack of success.
• 21:36
  Speaker 2: You know, I'm not going to point anything to say lack of knowledge, because it's not necessarily true.
• 21:39
  Speaker 2: We had some information, but the lack of success with the way we finance deals in 2021 and 2022.
• 21:45
  Speaker 2: And now it's playing out to where we're, like they're holding it, so this.
• 21:50
  Speaker 2: So the second thing that I mentioned was sort of hey, like we're, we're not necessarily seeing the pain we thought, but the deals can't quite happen just because of the dynamics, especially with what I do, heavy value add.
• 22:02
  Speaker 2: The prices have already come down such that these things should be trading at or below the loan amount, especially on something that somebody bought at 92% occupied and I'm buying at 80% occupied.
• 22:12
  Speaker 2: But it's going to require me to find sellers that have a unique situation going on because the prices are so diminished.
• 22:18
  Speaker 2: And then the third thing that's happening is that, even when it kind of starts to make sense and the numbers you can kind of you know cause people are jumping in.
• 22:25
  Speaker 2: They're hungry, they want to keep their businesses growing, and that's kind of a sad thing because it's not going to happen for everybody.
• 22:31
  Speaker 2: They're going to fail and while that's happening, we've got investors not wanting to put money in these deals and it makes sense.
• 22:38
  Speaker 2: We went out there to talk to some retail investors in 2021, 2022 and said this is going to be the best thing ever and it hasn't been, even though this moment, gabe, if you can have the longer conversations and you can engage your investors, this is a 2009 moment.
• 22:54
  Speaker 2: You know I talked about my dad's stock experience in the 2000s.
• 22:57
  Speaker 2: Well then, I have watched a lot of my friends jump into the real estate and both of my brothers jump into the real estate game in and around 2005, six, seven, we were in California.
• 23:07
  Speaker 2: Things were going crazy.
• 23:08
  Speaker 2: Then, 2008, everything crashes.
• 23:11
  Speaker 2: Prices, I mean, are crazy low and everybody's feeling like in 2009, don't buy anything, the prices aren't low enough, when in reality, you couldn't have picked a better time to start, and so I think that's what we see here in 2024.
• 23:25
  Speaker 2: It's another 2009 moment.
• 23:27
  Speaker 2: In retrospect.
• 23:27
  Speaker 2: People look back on this year and parts of next and go, oh well, yeah, of course, the returns were two and a half.
• 23:34
  Speaker 2: Three X Operator didn't even need to do a good job because it was 2024, 2025.
• 23:40
  Speaker 2: The prices were so low.
• 23:42
  Speaker 2: Right, and those are my three main things I'll lastly leave you with.
• 23:46
  Speaker 2: In the right markets, you need to look at where the new buildings that are coming online are going to be at over the next few years, which is really low.
• 23:58
  Speaker 2: Nobody's getting loans on land.
• 24:00
  Speaker 2: Nobody's getting the money to do these constructions.
• 24:02
  Speaker 2: That will take two to three years to come online.
• 24:04
  Speaker 2: And if you're in the right market where the demand stays where it's supposed to be, like Dallas, like other parts of the Sunbelt, like parts now even at the Midwest and Northeast, I mean, you see a city like Boston that people kind of forgot about, that has really strong rent growth.
• 24:19
  Speaker 2: If you can get into multifamily now, just pay attention to how few construction starts there are right now and how little new properties will be online in a few years, and you'll see that we have a huge opportunity and it's going to come from, unfortunately, additional rent growth and additional and I say that unfortunately because it's hard on our renters, right, when we continue to push rents.
• 24:43
  Speaker 2: But the demand is there, the fundamentals are there for multifamily in particular, which I love, as well as some of the you know, opportunity zone deals out there, some of the PFC deals out there.
• 24:54
  Speaker 2: There's lots of places you can place your capital, but I see investors struggling to find the right opportunities right now.
• 25:01
  Speaker 2: It's because the ingredients aren't quite added up together perfectly, with rare exception to find something that you should invest in.
• 25:11
  Speaker 2: I think a lot of the people should be on the sidelines and tell the right sponsors find the right situation and the right deal and then, if it's good, don't just say, oh, I'm going to wait to see what happens.
• 25:21
  Speaker 2: Dive in.
• 25:22
  Speaker 2: If you see something where you're doing all the math on it and you're checking their homework and it looks good, dive in because they're probably being conservative and there's probably certain elements of the expenses that are going to get better and the incomes that are going to get better as far as multifamily and commercial real estate in general right now.
• 25:40
  Speaker 2: But deals are hard to find.
• 25:43
  Speaker 1: Yeah, no, I love your high level overview on that and where we're at.
• 25:48
  Speaker 1: What would you say, gabe, to somebody that has always wanted to get into multifamily real estate but has never done it?
• 25:56
  Speaker 1: You know, like you said, I do have an audience that spans from very experienced investors all the way down to people that have literally been following the show and listening to all the podcast episodes and following all my social media stuff, but they've never made the plunge.
• 26:13
  Speaker 1: I think a lot of them are scared to do it right now because of, uh, you know, interest rates and, uh, possibility of foreclosures and things like that.
• 26:23
  Speaker 1: What would you say to that person?
• 26:25
  Speaker 1: Like, is now a good time to get in if there is a deal that pencils?
• 26:30
  Speaker 1: And where should they start?
• 26:31
  Speaker 1: What should they look for?
• 26:33
  Speaker 2: I think two things right.
• 26:35
  Speaker 2: I mean, all the wealthy folks say, like be greedy when others are fearful and be fearful when others are greedy, and I think everybody's fearful right now.
• 26:44
  Speaker 2: And it's easy to say be greedy, go after deals, put your money in deals.
• 26:48
  Speaker 2: But let's be realistic.
• 26:49
  Speaker 2: There's way too much on the line when you're putting 50, 100, 150, 200k into a deal or your first deal.
• 26:57
  Speaker 2: So don't live in the rear view mirror.
• 27:00
  Speaker 2: Learn on what to see and anticipate in the future.
• 27:03
  Speaker 2: And if you're looking at commercial real estate in multifamily right now, you're going to have to learn things like absorption versus like demand Right, and which cities you're seeing opportunities to have.
• 27:15
  Speaker 2: You know, very few new builds come online and those are great opportunities.
• 27:21
  Speaker 2: Right, that's looking forward.
• 27:22
  Speaker 2: Don't look behind you and go oh well, my friend was in a deal in 2021, 2022.
• 27:27
  Speaker 2: That's a really weird timeframe to build your investment strategy off of.
• 27:32
  Speaker 2: But the other piece is I'm a multifamily guy, gib.
• 27:35
  Speaker 2: You become a commercial real estate guy.
• 27:37
  Speaker 2: We see every deal as the best way to make money and I don't think that's true.
• 27:42
  Speaker 2: I think what I've learned with my investor base is if it's your first 50K, I don't want it.
• 27:47
  Speaker 2: If it's your second 50K.
• 27:49
  Speaker 2: I don't want it and, realistically, until your net worth is at a certain point and you're going to know what that is, based on your expenses and your situation, commercial real estate does have these big chunks of money and it's illiquid, so it should be part of your portfolio.
• 28:04
  Speaker 2: I think folks that are going to be investing should go.
• 28:07
  Speaker 2: I'm going to invest in something that I learned really well right now, but I'm not going to overthink it.
• 28:13
  Speaker 2: I'm going to take a leap of faith.
• 28:14
  Speaker 2: If the money is is if you have enough money, if I have enough wealth to get into the space.
• 28:20
  Speaker 2: If you don't just keep learning and keep building and keep saving Like I did in in 2015 before I made my first investment Like, put your chips away, get the balance of trade right on like income versus expenses, but when the time comes, just remember, don't look at the rearview mirror.
• 28:34
  Speaker 2: Learn enough that you can look forward and see opportunities ahead this is a critical time for that and then put in as much as is reasonable.
• 28:41
  Speaker 2: Don't go ahead and put your first $50,000 of savings.
• 28:45
  Speaker 2: I don't think that's a good investment, but if you're a doctor, dentist, lawyer, tech worker or just a small business owner and you've got a chunk and a few other chunks, then definitely now is the time to sort of get some advice from some people, get a mentor and then dive in, because there's really great opportunities.
• 29:03
  Speaker 1: Yeah, I love that.
• 29:04
  Speaker 1: So, Gabe, for people that have heard the podcast today, that want to know how to reach out to you, what's the best way for them to get in contact with you?
• 29:13
  Speaker 2: Super easy and straightforward.
• 29:14
  Speaker 2: I like to do one-on-ones.
• 29:15
  Speaker 2: I'm still small enough that I can get in touch with people and have that chat about your situation and talk a little more detail about myself.
• 29:22
  Speaker 2: So wwwchatwithgabrielcom, it's my calendar.
• 29:27
  Speaker 2: Grab 30 minutes, let's dork out, let's connect If you want to just stay off on the sidelines and learn a little bit about me without jumping on my calendar.
• 29:36
  Speaker 2: Craftcapitalinvestmentscom is our website.
• 29:39
  Speaker 2: It's got a little more about me and my partners.
• 29:41
  Speaker 2: But, yeah, chatwithgabrielcom is still the best way to kind of hop and connect and I look forward to chatting with anybody that's got additional questions about the Texas market or commercial real estate in general.
• 29:52
  Speaker 2: It's always a blessing to be able to be in touch with you.
• 29:55
  Speaker 2: Gibb and man, yeah, thanks for having me on today.
• 29:57
  Speaker 1: Yeah, you too, brother.
• 29:58
  Speaker 1: Look, you've shared some extremely valuable insights with us and folks you know.
• 30:03
  Speaker 1: If you don't know Gabe, go check him out.
• 30:06
  Speaker 1: Go check out his website.
• 30:07
  Speaker 1: He's been doing this for a long time.
• 30:09
  Speaker 1: He's a relationship kind of guy, the kind of guy that really builds true, meaningful relationships inside of the investment community.
• 30:18
  Speaker 1: Gabe, it's been a blast having you on.
• 30:20
  Speaker 1: I really appreciate it.
• 30:21
  Speaker 2: Let's go Gabe, let's do it.
• 30:22
  Speaker 1: All right, thank you.
• 30:23
  Speaker 1: Thank you for listening to this episode of Go Big with Gib.
• 30:30
  Speaker 1: If you haven't already, go follow us on social media at Gib Irons.
• 30:34
  Speaker 1: We'll see you next time.