GI171: Focusing on Apartments to Scale Your Real Estate Portfolio with Brian Alfaro

Brian Alfaro is head of investor relations for Blue Oak Capital; a Houston private equity firm that focuses on the acquisition of workforce B/C multifamily communities across Texas, Tennessee and Kansas City. He currently retains ownership interests in 427 multifamily units as a general partner.

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Announcer:
Welcome to the Global Investors Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market. Host, Charles Carillo, combined decades of real estate investing experience with a professional background in international banking to interview experts in all areas of US real estate investing. Now here’s your host, Charles Carillo.

Charles:
Do you have money sitting in the stock market? And you’re worried about it or worse. You have money sitting at the bank, not keeping up with inflation. My name is Charles Carillo, founder and managing partner of Harborside Partners. And since 2006, I’ve been investing my money and my family’s money into income producing properties. These are real assets, real properties with real addresses that produce real cash flow. At Harborside Partners, we provide passive investors who love real estate with a turnkey investing solution. If you want to put your money to work in real estate, but can’t find deals, don’t have the time to get funding in. The last thing that productive people want to do is manage real estate. We find the deals. We fund the deals and we manage the tenants, the termites and the properties. Partner with us at investwithharborside.com. That’s investwithharborside.com. Go to investwithharborside.com. If you love real estate, you like the idea of passive income and believe that income producing properties will appreciate over time. Go to investwithharborside.com. That’s investwithharborside.com.

Charles:
Welcome to another episode of the Global Investors Podcast; I’m your host Charles Carillo. Today we have Brian Alfaro. Brian is head of investor relations for Blue Oak Capital; a Houston private equity firm that focuses on the acquisition of workforce B/C multifamily communities across Texas, Tennessee and Kansas City. He currently retains ownership interests in 427 multifamily units as a general partner. So thanks for so much for being on the show, Brian.

Brian:
Yeah, absolutely. We need to get that bio updated. It’s actually 847 units, but that’s okay. Oh,

Charles:
Really? Okay, cool. Cool, cool. That’s awesome. So you guys been pretty busy then?

Brian:
Yeah, we had a really blessed 2021. 2022 has definitely presented a lot of unique challenges that have you know, made acquisitions a little bit tricky. We did do one acquisition that we closed on in late February and have been on the hunt for the next one ever since. But we, we’ve been very blessed. We were very blessed last year.

Charles:
What what kind of issues are you finding through this market here in 2022?

Brian:
Yeah, I think it’s really interesting what’s going on because every market cycle has something that’s a little bit unique. I think as investors, we always try to look in the past and look at history to try to predict what’s gonna happen in the future. Mm-Hmm. <Affirmative>, but that’s, and that’s, and that’s a very useful skill, but every recession or every economic cycle or every real estate cycle always has something different about it that’s unique. Right? Right Now, what we’re seeing is very different than what we’ve seen in the past. If you, at least during our generation, you know I’m 33, you don’t look like you’re, that, that far away from me Charles as well. So, like the great recession, 2007, 2008 is really the biggest one that we’ve seen in our lifetime that we can kind of look back on. And what happened then, and what’s happening now are two totally different things.

Brian:
What happened back then was caused by subprime mortgages. Essentially a lot of residential housing people were getting mortgages that weren’t qualified for mortgages. Right. They packaged those up, they ended up selling ’em. And when there was a recession that hit people defaulted on their notes, which is what led to massive amounts of foreclosure. We’re not seeing that in today’s cycle, Right? We’re seeing huge price inflation. We’re seeing bidding wars. We’re not seeing we, we haven’t seen a lack of liquidity. That wasn’t the issue. It was more of an supply and inventory challenge. Right. so kind of fast forward to today, you know, having dealt with that supply stream there was, there was a ton of buyers for both residential and obviously commercial, multifamily, the space we’re in. And it seems like things almost pivoted on a dime and did a 180 over the last, call it six to eight weeks, if not a little bit longer.

Brian:
The market has changed very drastically. You know, if you go back to December of last year, the Fed said they were not hiking interest rates and had no plan to, That was late November, early December. Here we are, you know August of 2022 and everybody’s waiting for the next the next news article to hit to see which button did they press, the 50 basis point 75 or the hundred. Right? So we’ve seen several interest rate hikes, which is really rock the market cuz anybody who was planning on selling who maybe needed to sell or wanted to sell, they, they sort of, they sort of missed the top, to be honest. Yeah. They, they’re in a part now where they can still get a very attractive price, but it’s harder for buyers to close because we’ve seen leverage come down both on your bridge debt, on your agency debt.

Brian:
It’s gonna be harder to get, you know, 70, 75% leverage on a lot of deals. And we’ve also seen a challenge with equity both in the private equity space and in retail equity as well. A lot of passive investors, LPs, which is where we do a lot of business. You know PA investors who wanna invest in multifamily, not do any of the work, they wanna write you a 5,000 thousand dollars check. They’re very nervous right now because of what they’re seeing in the headlines. And also the reality is, is a lot of investors are diversified and their stock portfolios and their crypto portfolios, their 401ks got crushed this year when the stock market dropped. So the, they’re a little bit hesitant to write you a hundred thousand dollars check for a deal, not even though it might be a good deal. So what we’re seeing right now is challenges, you know, there’s not a lot of inventory on the market by sellers are not selling if they don’t have to. They’re holding onto their properties. We’re seeing a little bit nervous debt and equity. It’s, it’s really hard to size up a deal where their numbers make sense right now. And we’re seeing a lot of guys who do have stuff under contract just struggling a little bit to get the deal over the finish line to close just because we’re seeing, like I said, a lot of challenges with debt and equity. So we’re still very active personally. We’re still looking for that next great opportunity, but it’s slim pickings right now.

Charles:
Yeah, that’s for sure. Yeah, and it’s just, we we’re, we sold a couple assets this year and we’re selling our last one we’re planning on this year right now. And yeah. Issues with the buyers on there, you know what I mean, with them getting it. So the one plus with that is that we have long term fixed debt on that. So from buying in 2020, so it won’t be an issue for us, but it’s just something for, you know, going forward for finding deals and for people that need to get out of deals that maybe took on some short-term debt that’s now gonna be coming up and you know, maybe some arm debt that’s now coming up for a recalculation and they have to now get rid of those properties or refinance them out. So,

Brian:
Yeah, especially if you know, prior to lot, prior to earlier this year, nobody was talking about interest rate caps, You know, if you’re, if you were using floating rate debt, which we’re, we’re very big fans of floating rate debt, we like the flexibility it gives you versus nothing wrong with fixed debt, but you get locked into it and you, you end up with some sort of defesence or prepayment penalty, which is, if you’re trying to exit in three to five years, can get very expensive. So there’s a different, you know, debt product for different types of business plan. But with, with floating rate debt you know, 20 20, 20 21, nobody was buying caps because nobody thought the interest rates would go anywhere near where they are right now. So you’ve got a lot of buyers who bought stuff in 2020 or 2021 with bridge debt because they were giving you 75% leverage.

Brian:
You know, you were coming in there and, and, and getting deals done very quickly and you weren’t buying caps. So now to, to your point Charles, if you’re in a situation where you might have a great product and you might have bought it at a great price, but you’re, you’re now in a situation where you don’t have a cap and you know where the interest rates are now, your, your mortgage payment might put you in a situation where you’re upside down, especially if you’re in a value add deal where you’re still renovating it can get, you can definitely get a little scary. So I think we might see some opportunities in the near future.

Charles:
Yeah. I think that you’re gonna see a lot of operators moving away from a lot of, moving away from a lot of variable debt and going to more, getting back to like Fannie and Freddy. Sure. I think that’s something that we’re gonna see over the next six, 12 months. Yeah, I agree. But so tell us a little bit about your background, both personally and professionally prior to getting involved with real estate investing.

Brian:
Absolutely. Yeah. So I started real estate in 2018. Prior to that I’ve always been a small business in hospitality restaurants in particular. I have a degree from the University of Houston, a business degree. And I worked for a, a regional franchise restaurant concept here in the south in Texas that was growing very fast. So working my way up the ladder there. Eventually ended up meeting a partner and we started another restaurant concept. It’s a cafe, a coffee shop concept, which I actually still op own and operate to this day. We have a couple locations here in Houston. So I was doing that and I was in my late twenties and really just looking around and figuring out, Hey, what’s the next thing for me? What’s gonna be the next chapter of my life after I get out of the hospitality?

Brian:
And, and this, you know, small business restaurant side. And I was looking around and I was noticing that all the people that were older than me and that had accumulated a lot of wealth, both financially and from time, time, well, time freedom, they all had real estate in the portfolio at one way or another. Doesn’t mean they were only doing real estate, but real estate was always a healthy part of their portfolio. And it was something that I knew very, very little about. I didn’t know anything about real estate at all. My, my parents were blue collar growing up. We never owned a home. We lived in apartments my entire childhood. We always were renters. So I didn’t know anything about it. And so I decided to, you know, start reading, start educating, listening to podcasts, getting on bigger pockets. But it had a small mindset, a more limited mindset.

Brian:
I just thought like, hey, buying real estate means you take 20% outta your bank account, put it down in a house, you throw a tenant in there, or you flip it, or whatever. And that’s, that’s real estate investing. I don’t know anything about multifamily. I don’t know anything about commercials, syndications, joint ventures, private equity, 10 30 ones. I didn’t know anything about that. But as I got deeper in it and started doing single family for about a year, year and a half, I just realized, man, I didn’t really align with the, the growth model in that, in that vertical. I still love residential real estate. I think it’s a great wealth building tool, but I was looking to scale faster and get economies a scale, particularly with my time. And that’s where I transitioned over to multifamily and having that, that customer service background, that hospitality, that op I was always in operations when I wasn’t in business.

Brian:
And when I was in the hospitality industry managing several, several several large teams running restaurants that were doing, you know, four or 5 million a year in revenue, I was always used to building teams and systems and holding people accountable, managing the manager. It was a natural trans, it was a natural trans, you know, transfer over to real estate from a skill standpoint where property management was something that I kind of naturally plug and played into once I understood you know, how that, how that worked. And then from a customer service standpoint, I added a lot of value for investors as well, just having a mindset of like, Hey, I gotta take care of my customers both on the resident side and on the investor side. So, moving forward right now, what is you guys current investment strategy at Blue Oak?

Brian:
Yeah, it’s a great question. I know in the bio you mentioned B and c class workforce housing, and we still, we still love workforce housing. I think as real estate investors, it’s our responsibility to, to, to provide a quality, affordable product for America. Because we hear this a lot that there’s a housing shortage in America. And I don’t necessarily, that’s a pretty broad statement. I don’t necessarily agree with it wholeheartedly. I think there’s a, a shortage of affordable housing. I don’t think there’s a shortage necessarily of housing. There’s plenty of new construction houses look around your neighborhood, plenty of a class multi-family being constructed and has been delivered in the last year, several years. There’s stuff being built all over Houston, a class stuff, but there’s a serious lack of affordable housing quality, affordable housing. So we still like that vertical. But I’ll say with a caveat with, with cap rate compression that we’ve seen over the last several years, we saw it very risky to take on a value add, you know, opportunistic or, or value add deal with the same CAPA that you would pay for a b plus or a minus asset.

Brian:
So about a year and a half ago we, we pivoted a lot of our energy to focusing on newer product already stabilized with a light value add component, call it b and A minus product. So we really like 1990s and up, ideally newer if possible. The one we closed on in February was a 2017 build just for some, some some numbers there to kind of see what we’re looking for. So really like the newer stuff, because you’re not dealing with the execution risk of the CapEx, which has been a big problem. We’ve seen lumber prices spike, We’ve seen massive labor shortages. We’ve seen, seen product shortages from everything from washers and dryers to refrigerators to every other piece of equipment you need to put a home together. So we saw that as risky and especially with the cap rates being so compressed and then being so close to each other.

Brian:
So we said, Hey, if we’re gonna pay, you know, a four cap or a 3.75 cap for a C class deal, why don’t I just go buy the A class? It’s the same cap rate. So we switched late last, I would say mid last year we kind of switched over and had been really focusing on finding that newer product. And we like core, core plus markets, we don’t really look in tertiary markets. We like the security of knowing that we’re gonna have a buyer on the other end being in primary markets in Houston and San Antonio. So those are our two primary markets.

Charles:
Nice. Yeah, same thing with us. It’s like over the last 24 to 36 months, we’ve really transitioned everything into better properties. Mm-Hmm. <affirmative> and same areas. And we’re still growing areas, right, like markets I guess you would say. But just getting into better areas within that market and then getting into better properties, newer vintages and and the, like you mentioned core, core plus and that’s really a term that some people might not understand. Can you explain what core and Core plus multifamily is?

Brian:
Yeah, it’s really gonna do with, like, you hear all these terms in multifamily core, Core plus, and then you hear the brokers talk about like four star, five star multifamily. It really has to do with the product quality. So it has to do with the vintage so how old or how new the product is. And it’s really gonna have to do with the location. That’s really where you’re, you’re getting most of those terminologies, whether it’s four or five star. And then the core, core plus four core plus, we want to be as close to the center of a major metro as possible. That’s really where we wanna focus on. We don’t want to stray out and go like, we’re in Houston. I don’t want to go out, you know, two and a half, three hours to some city I’ve never heard of before.

Brian:
Now while the, there might be a good opportunity there and the numbers might look great, that’s not a market that we are interested in just from an exit strategy. Those markets can be very attractive when things are hot cuz everything’s exploding. But when there’s a downturn or a correction so to speak, you have a harder time exiting cuz there’s not as many buyers in those markets. So we focus on that core, core plus market you know, from, from a location standpoint, from a quality standpoint to really try to make sure we’re giving our investors a hedge against the exit and having to worry about who’s the end buyer at the end of the day.

Charles:
Yeah. It’s a much easier to manage product too when you’re getting into a core core Plus you’re gonna have credit tenants there that actually have incomes and they’re actually have savings and stuff like that. Yeah.

Brian:
It’s more white collar, more white collar. Yeah.

Charles:
So it’s it is, yeah, it, it definitely is a, a, a nice asset class to be in and it’s really resilient when you’re getting into recessions. So tell us about like, kind of what you’re doing, You work a lot on the investor relations side and for investors looking to grow a portfolio like yours. If you were, how would you do it if you’re going from, cuz you said you were talking starting with like single family, then going into multi-family. Sure. How did you do that? Like how, how did you make that move and how did you change your focus between doing that?

Brian:
That’s a great question. So if you’re planning on transitioning into multi-family and you plan on either doing JVs or syndicating, it’s gonna be i part important that you focus some, if not all, your attention on the equity side because I always like to ask people, cuz we see this a lot in, in in newer people and you, I’m sure you see this as well too, Charles, everyone is quote looking for a deal. And I say, well that’s great if we’re all looking for deals. But the next question I always have is, if I gave you a deal tomorrow, can you actually close it? Right? Because you might find the best deal in the world that’s 30 cents on the dollar, but if you can’t raise the money or find the equity partners to, if it’s a JV deal to close a deal, it doesn’t matter how good the deal is.

Brian:
Right? So for us, you know, for me personally, when I got into this business and once Cody, John and I formed Blue Capital late 2019, early 2020, our, our, one of our strategies, one of my responsibilities was to go out there and let the world know what we were doing, right? A lot of being in this industry and listening to multi-family podcasts and going to conferences and webinars and stuff like that, you think the stuff that we talk about is common sense, but it’s not. You’ve got a lot of really wealthy people who have built phenomenal portfolios, investment portfolios and that maybe make a lot of money at their w2. And they don’t know anything about real estate investing. They don’t know anything about passive investing. They don’t know anything about the benefits that come along, cashflow, appreciation, tax benefits, the K one s they can use, you know, So it was our job in my job to go out and start talking to people, letting ’em know who we were at Blue Capital, what our investing thesis was, and how they could potentially partner with us.

Brian:
So it was really just about throwing your name out there and we were sort of fortunate it was a blessing and disguise. This all happened during Covid. So we spent all day on the phone and on Zoom, you know, we were each, each one of us, there’s three of us here, we were having five to 10 calls a day back to back to back to back talking about active investors, passive investors, vendors, attorneys, everybody. You need to get a potential deal close so that when that first opportunity came, we knew we would be in a position we would have the team put together, which gave us a lot of confidence. So for anybody’s getting started, I, the message is definitely go out there and build your network. There’s that cheesy saying that you, you know, your network is your net worth. We’ve all heard that and it’s super, but it’s so freaking true.

Brian:
And the longer you’re in this business, the more and more you’ll find that almost every great deal that an operator will tell you about, they’ll tell you it was a relationship game. They knew the seller, that broker came to them first, or it came in and outta contract and they were the next person they call. Like it’s always, it always has something to do with relationships. Or they find equity partners who wanna, you know, do a 10 31 and bring two, 3 million to one deal, right? Yeah. Those are all based on relationships. You know, you, you can’t, it’s really hard to just throw a deal out there no matter how good it is. And, you know, I wouldn’t give somebody a hundred thousand dollars that I met yesterday. I don’t care how good your deal is cuz there’s just saying that you bet on the h you bet on the jockey not on the horse, right? So you really wanna get out there and if you’re the jockey, you’re the guy who plans or the gal who plans on steering the ship being an active sponsor or just doing JV deals, being the person who finds them. You gotta go out there and let people know what you’re doing. Yeah,

Charles:
Yeah. The other thing too is that I was speaking as an older real estate investor before and they, they were telling me that it’s relationships and access to capital and that’s what doesn’t, and that’s also the moat around successful syndicated businesses because like you said, you’re not gonna give someone a new syndicated a hundred thousand dollars to invest, but it’s also something that if it’s done by a relationship, that’s something that takes years, probably decades to season, right? So new people coming in there aren’t gonna be able to get that deal. And that’s why you’re investing and that’s why over years you’re building up that relationship. So Brian, when you, what do you, what methods have you found to be most effective for raising money from passive investors? I know you said a lot of calls, stuff like that, but what, let’s talk about some actual methods you use for getting that phone ringing.

Brian:
Yeah, so we, we follow a lot of methods that I’m sure are very common and we have a podcast as well. We use it a lot as a nurturing tool. I wouldn’t say it’s necessarily a lead magnet, but it’s great for nurturing because we have a lot of episodes with a lot of really quality both active and passive investors, vendors. And if somebody has a question, I can say, Hey, go listen to episode 1 0 1 and we talk to so and so about the exact thing you just asked me about. Go listen to that. And that helps them build rapport with you and to hear your voice once a week, even though you’re not necessarily calling them once a week, they feel like they know you even though they maybe have only talked to you once or twice on the phone, or maybe you’ve only met once or twice in person, but they listen to you every week for weeks and weeks and months and months and months that they feel like they know you.

Brian:
So we have a podcast that’s been great for nurturing relationships. The, we have a local meetup here in Houston and I say that’s been a tremendous resource for us attracting credibility both with vendors and everybody that you need to get a deal done. And then also active and passive sponsors because these, these, these networking events, these meetups, they take a lot of work, they take a lot of planning and if you wanna do it well, they also take some capital. And to do it consistently from month to month is, is is a commitment. And a lot of people, they quit. They just, they don’t keep doing it cuz if the effort required and to try to make them quality as well. Not just to show up and just kind of throw something together, but we bring on either, either we are speaking on a, a particular topic and that helps us, you know, grain credibility in front of the room or we bring in somebody who can add value to the group about a particular topic, a cpa, an IRA custodian, another active sponsor, somebody who’s passively invested in thousands of deals, kind of showing them the way, just trying to bring in somebody in the front of the room that can add value.

Brian:
That’s been a tremendous tool for us to grow our meetup. We, we’ve gotten it to the point now where there’s close to a hundred people sometimes over at each meetup and that’s taken years. You know, we’ve been doing that meetup for almost three years. It started with like, you know, five or 10 people and has grown over to a hundred. So that’s been great. And then for us it’s really just about putting yourself out there, which is people wish, there’s like a secret sauce to attracting investors, but there’s not, you gotta go to conferences both multifamily related and non multifamily related as well. And then getting out there, putting yourself out there in front of, in front of people, you know, going to investment conferences, going to business conferences not just necessarily multifamily related. That’s a great way to meet people outside of the field who maybe would totally be interested in what you’re doing as an, as an lp but had no idea about it until you presented.

Brian:
So that’s been a great resources for us as well. Just trying to go to as many conferences as we can. And honestly Charles, you just gotta talk to people one person at a time and you know, sometimes people open doors for you two, asking for referrals has been really helpful for us on the deals we have closed, we asked our active our active investing partners to like, Hey, if you know anybody who would be interested in something like this or maybe a future opportunity, please share their information with us. And we’ve gotten several referrals. Referrals as well for people that have been very pleased with both have the deals have gone our communication style and just our transparency.

Charles:
Yeah, it’s great. Referrals are definitely the optimum way of raising money from investors because it just, it’s much easier cause you’re having someone else really sell your company on them, which is absolutely, which is great. So you guys are currently in three different markets. How did you choose those markets? And I think that’s Kansas Tennessee, Texas, different parts within those states. How do you handle asset management as being an out-of-state investor in those different markets?

Brian:
Yeah, so we’ve actually kind of narrowed for our focus since the buy you probably have. So we are in Texas primarily for our acquisitions. Okay. We do have a, a, a co-sponsored partnership with a good friend of ours in, in Columbus, Ohio. Where we were able to add value from a from an equity standpoint on that particular deal and being involved with getting the deal, you know, close. So that was a valuable relationship, somebody that we wanted to do business with that we had a, a long relationship with. But the other deals that we’ve focused on have all been in Texas. We have one in DFW in Dallas Fort Worth area, and then the other two are in Houston. And for us, I mean asset management, the reality is, is you’re not gonna be on site all the time. So I hate to say it doesn’t matter where the deal is.

Brian:
It does, you do want to have somebody that’s boots on the ground. You don’t want to go to some random market where you don’t know anybody and you don’t have that active person who’s on your team who can be there if needed sometime throughout the week. So for us it was always about finding somebody in that market like, Hey, I really like this deal, or we’ve been invited as part of the partnership to be honest, deal. Who is in that market? Who is the person who’s gonna be boots on the ground that if there’s a, you know, emergency or something like that or we need to go tour the property or mystery shopper or whatever, I don’t have to drive three or four hours to Dallas or I don’t have to drive 30 minutes to my property away. So that was really our, you know, for anybody looking to invest outta state, we, we talk to people sometimes that are like in California, right?

Brian:
And they wanna invest in Texas or North Carolina or Tennessee or whatever cuz a lot of people don’t like to invest in California for a bunch of reasons, right? So if you have a partner that is boots on the ground that lives there that knows the market really well, it’s okay to do a deal there, invite them onto your partnership team and they can be an active asset manager. And that’s the way we’ve been able to manage these assets that are a little bit outside of our our bandwidth is just having that good connection there in the market.

Charles:
Yeah, that’s great having someone that’s really good boots on the ground and you know, having that person select it prior to obviously closing deals. Yeah. For new investors that say they wanna start investing actively in real estate but have a full-time job or run a business like you do, what advice do you have for someone like that?

Brian:
Yeah, yeah, that’s, that’s that’s always the tricky part because you learn, the more you do any of these businesses is that time is your most valuable asset. You can always make more money. There’s plenty of it to go around in the world, but you cannot get your time back. So managing your time, I would say is the key to being successful. One thing that’s been very helpful for me personally is just time blocking. There’s a great book by Gary Keller who is one of the founders of Keller Williams called The One Thing. And he talks a lot about kind of structuring your week and your day around focusing on the one thing that you need to get done that’s gonna move the needle and time blocking. That’s a big emphasis in of that book as well, is time blocking that one thing. Most people are productive really early in the morning and they kind of weather throughout the day cuz we get tired.

Brian:
So if you’re, one most important thing is setting up your website or calling a broker or underwriting a deal, try to get it done as early as you can. If you work at W two and you’re working eight to five, eight to four, that’s okay. Maybe you start waking up early to do that. Maybe you wake up at five. I know that’s, people are like, Oh, why would I wake up at five? Well, how committed are you? If you’re really committed, you’re gonna wake up at five and underwrite that deal. Or when you get off work or when the kids go to bed at night or your wife goes to bed, you’re up 9, 10, 11 o’clock at night. Underwriting that deal, you know, sending emails to investors or whatever it is you need to do to get, get the job done. So time block your day, be organized, be committed, be patient. And that’s really the, the key to being successful.

Charles:
What are some mistakes you see real estate investors make? Brian?

Brian:
I think a lot of real estate investors can often be overly conservative and that might not be like a common or popular opinion because I know when you’re getting started they’re like, Hey, be conservative, be conservative, be conservative. But conservatism is a loaded word because what’s loaded, what’s conservative to you, Charles is not necessarily what’s conservative to me, who’s right and who’s wrong. There’s no saying, right? So I think you do need to be educated and make, you know, your underwriting assumptions and your business plan assumptions based on data and potentially past experience. If you’re not, if you’re new and you’ve never done a deal, I say lean on other people who have, call the other sponsors in that market. Call somebody who owns a property next door or around the corner, try to make friends and say, Hey, I’ve got these assumptions in place, you know, how’s this going for you?

Brian:
People are the multi-family business. Like people are very giving, people are gonna be willing to share information that’s gonna help you be successful. You just gotta find those people. So I would say there’s a leap of faith involved in any type of deal you do. We have a good friend of ours I don’t know if you know Dev and El there, DJ e he he had several thousand units in San Antonio and we were talking to him a few months ago and he said he’s never bought a deal where he felt good about when he closed because he always felt like he was the idiot who overpaid. Yeah,

Charles:
Right. I know that feeling. I know. Yeah.

Brian:
But he’s got several thousand units. Yeah. He’s never had a, you know, he, he’s, he’s had, he has lots of happy investors and he’s been doing this business for a very long time, but it’s just that feeling that kind of never goes away, Right? But at a certain point you gotta say, Look, I’ve analyzed the heck out of this deal. You don’t, you can’t have analysis paralysis. Cuz the reality is, is Charles is you can talk yourself out of any deal. Any deal. Yeah. You can look at one number and say, Oh, my reversion cap isn’t high enough. That’s a bad deal. I don’t like it anymore. Now my rent, my rent growth assumptions are, you know, 5% I should be doing 3%. Okay, it’s a bad deal. Well what if all the comps are 10%? You know what I mean? So you can’t just use these assumptions and, and try to be conservative. You gotta look at the data, look at what’s actually going on, and then you gotta take a leap of faith at some point. I’m not saying do a bad deal, but once you’ve analyzed it and you feel confident, you gotta take that leap of faith.

Charles:
Yeah. If you’re buying in hot markets like you are and like what our team fo focuses on, I mean, you, you’re gonna be overpaying for properties because you’re in the path of growth and it’s just something where it’s just kind of how it goes. Especially if there’s a huge value added component to it that hasn’t been you’re gonna be paying, especially maybe in this market right now, not as much, but years back you were, you know what I mean? Sure. So absolutely that seller wanted to get some of that upside that you were gonna get. So Brian, what are the main factors that have contributed to your success?

Brian:
Kind of alluded to this earlier. I would definitely say networking. Our relationships have contributed to our success. Everything that we’ve been a part of all the partnerships, all the deals we’ve, we’ve done on our own, it’s all been relationships. There’s always been some sort of roadblock that you hit along the way and there’s a book called Who Not How. And that having that mindset of, Oh man, I’m having a problem right now short on equity, I have a question for my attorney. The seller wants this, the buyer wants this, whatever, whatever your roadblock is there’s somebody you can call as long as you have a good enough Rolodex and a good enough database of friends and you can pick up the bat phone and ask for help. So I would say networking has definitely been a big part.

Charles:
Yeah. I see a lot of people that are successful and it’s, it goes to resourcefulness, you know? Absolutely. With the most resources is most successful. So Brian as we finish up here, how can our listeners learn more about you and Blow Blue Oak Capital?

Brian:
Yeah, absolutely. I, well first of all, appreciate you having me on. Cody, since his regards, he couldn’t be here, but he was excited to, excited that we were invited to be on the show. So you can get a hold of Cody or I we’re very easy to get a hold of. You can visit our website Blue Oak invests with an [email protected] and you can shoot us an email at brian blue oak invest.com as well. We’re also very active on social media. You can add me on Facebook, you can look me up on LinkedIn. I respond on my message personally. And I’m also very active on Twitter. You can look me up under cre underscore Brian. So plenty of ways to get a hold of me. I, I’d be happy to talk to anybody interested in learning more about us or just talking about real estate.

Charles:
Well, thanks Brian for being on today and looking forward to connecting with you here in the near future.

Brian:
Sounds good, Charles. Appreciate it. It have a great rest of your day. You too. Bye.

Charles:
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.

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About Brian Alfaro

Brian Alfaro is a Managing Partner of Blue Oak Capital. Brian is the Director of Investor Relations and Outreach.

Prior to joining Blue Oak Capital, Brian managed an investment company specializing in the residential asset class. Passionate about helping others succeed, he sources and brokers investment transactions for investors.

Brian’s extensive background in operations, marketing, and brand development in high-volume hospitality concepts plays a role in ensuring investing partners receive a first-class experience. He is a graduate of The University of Houston Bauer College of Business.

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