GI193: Raising Money for Multifamily Real Estate with Bernie Leas

GI193: Raising Money for Multifamily Real Estate with Bernie Leas

Bernie Lease began investing in real estate in 2018 with single family homes but transitioned to multifamily in 2019 and is a general partner in $12 million of assets and a passive investor in 130 units.

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Announcer:
Welcome to the Global Investor Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market. Host Charles Carillo combines 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 Bernie Lease. Bernie began investing in real estate in 2018 with single family homes but transitioned to multifamily in 2019 and is a general partner in $12 million of assets and a passive investor in 130 units. So thank you so much for coming on, Bernie.

Bernie:
Thanks for having me, Charles. I appreciate it.

Charles:
So give us a little background on yourself both personally and professionally and prior to getting involved in real estate investing.

Bernie:
Yeah, probably a similar story, Charles is a lot of people just, you know, you’re working your W2 job. Think about long term, taking care of your family and putting money in the 401k and retirement, things like that. But I always had this itch to do real estates, but never really took the, kind of, took that next step for a long, long time. And then, you know, my job was going well here in Boise. I was, I got married, I had a beautiful wife and a daughter, and we were kind of going through, we’re like, gosh, we wanna create some type of, like a separate income stream that’s outside of our normal work and just kind of build towards long term for kids college for, you know, later on in our lives. Things like that. And real estate seemed like a one that we wanted to try. And so we kind of pulled some money out of our house on a HELOC and started looking for single family houses in Indiana. And that was kind of our first step to doing our, you know, a real estate.

Charles:
Interesting, interesting. Yeah. So why did you, what was the main I guess factor? Cause there’s always a number of different financial vehicles to get you where you want to go with that goal. Why did you you think you chose real estate over anything else?

Bernie:
I think for us, as, you know, if, if you look at the long-term success of a lot of people who are, who have done it for a long time, a lot of ’em own real estate and have used real estate to, to build long-term wealth. Our approach has always been my wife and I, and my, and my partner too, Mike, has been like, we’re, we’re not investing for a two year timeline. We’re investing for a 10 to 20 years. Right? And so we thought real estate was a great way to do that. We also like real estate cuz there’s control, right? You can put $50,000 in Amazon stock and you’re at the mercy of Jeff Bezos and his team to do their thing, right? Right. Whereas with real estate, you can kind of put that money in and as a GP or as a, as a lead owner, right, you can sit there and push certain levers to increase value and decrease costs and things like that. And so that was also very attractive to us. And then you know, a benefit for us too is just that, that tax benefit that the government always writes in for real estate investing. It’s, it’s such a beautiful thing, right? Why didn’t I take advantage of it if you can’t.

Charles:
Yeah, definitely. So tell us about your first your first investments. You started off in single family, so kind of how did that turn out and how you got started with that?

Bernie:
Yeah, we’re looking for, for houses. You know, living in Boise, Idaho houses were super expensive here. The market is very hot and so nothing cash flow. And so I had in my and my W2 job, I had been to the Indianapolis, Indiana area, knew it was a great working class town, growing really fast. And there’s a lot of single family homes that were in that kind of, that price range with comparable rents that really worked well for us on a cash flow basis. So we started doing some networking and we found a group that helped put us in touch with some local people on the ground. Both an agent to help buy who, who was, who specialized in doing out-of-state investments and also from you know, third, third party property management group that could kind of take over the asset force and run it on a day-to-day basis.

Bernie:
And that allowed us to really kind of really dig into the, the market and start asking questions of these guys and gals of like, you know, Hey, here’s this neighborhood, what do you think? And they would go like, Ooh, not good. Or like, it’s a great one. Focus on that. And that really helped us kind of refine our search and make it a lot easier because there’s hundreds of listings that are coming through and helped to refine us. So, long story shortly, we spent about 30, 45 days looking really hard and closed our first property. And then about 30 days later found our second property and closed on that. And we held those for almost four years, Charles. Nice. And we exited last summer and they did great. You know, it was mostly a, an appreciation play cause we, we invested in a great market, but they both paid off you know, in multiples of dollars for us. So can’t complain. It, it was a really good experience and I feel bad for people who’ve had those bad experiences with outta state investing, but ours was never that way, thankfully. Knock on wood.

Charles:
Yeah, I wanna talk about that cuz long distance investing is is an animal to its own. I mean, you, you started, you explained a little bit there, you had an agent that was very familiar with what you’re trying to do. You had a property manager, which is, these are very, the most important pieces of the puzzle, but as I read, like you’ve never stepped foot in any of your properties. So how were you, tell me about that whole process of when did you go out there initially and do some you know, pick out different neighborhoods and parts of the city that you liked and then when his stuff came up, you knew it was in that area, you took it, or were you really relying on all of your professionals and like this, this team you had put in place there?

Bernie:
The latter. I think maybe the former would’ve been the smarter way to do it. Do it. Charles would <laugh>. But for me, as you know, in my w2, I, I have vendors across the US even across the globe that I’ve never really met in person, things like that. So I have systems and processes in place to vet people out. And you also use, you know, validations and recommendations from people who have used them, right? Mm-Hmm. <affirmative>, that’s also a big key for us. And so I think a really, you know, a big takeaway for us has been networking Well, and, and not going on to, to Google and typing in, you know, third party management groups in Indiana, Indiana. It’s, it’s actually talking to people who have been in that market and saying like, who do you like? Right? Who’s a good reference who’s a good party? And you kind of like to will those down. And that’s the kind of the way we came to our conclusion. And then just trust the professionals once you’ve vet the person out, trust them, right? They’ve been doing this for decades. There’s no reason for me to sit there and try to reinvent the wheel if they say it’s a good neighborhood. It’s a good neighborhood. And I, I, I go with that recommendation.

Charles:
Would that would be what you would suggest to anybody that wanted to get into out-of-state landlording? Would it be anything different that you did or didn’t do that you would suggest to someone else if they said, Hey, I want to do kind of what you’re doing with single family houses in a market, you know, thousands miles away from where I live?

Bernie:
I think most of what I did was fine. I think that maybe the, the lesson learned from me was be a little more active in that transition period of once that you have the property closed and that property manager group comes on board. We kinda let them do their own thing. And what we found really is, is they don’t have the same sense of urgency that we did <laugh>. So it’s like, you know, we, we get the house closed, we wanna do some little cleanup and refreshing and get it going. And they’re like, oh, the vendor’s three weeks out. Everyone’s like, oh, well that’s a, that’s a month payment, right? That, that we’re out of pocket now. Right? And so I think for us it was more like, you know, get on the same page and make sure they understand your timelines upfront and they read upon and then kind of move forward versus saying like, you’re the professionals do your own thing. I think there could have been a better process in our side to push.

Charles:
Yeah, they’re very, you can be very cavalier when you don’t have to pay that mortgage payment. Right? So <laugh>,

Bernie:
That’s your money, right? <Laugh>. Yeah.

Charles:
That’s, yeah, that’s so true. I, I like that idea too, is you’re being a little bit more hands-on with the asset management and then you’re kind of handing over something that’s already running to a property manager or something that’s ready to be rented out, whatever it might be. And then you can kind of get that going and you’re kind of all set for hopefully another year down the road until that that lease comes up. Why did you transition to multi-family investing in your second year of real estate investing? Because every time I really talk to investors that start it in single family, it always takes them several years to make the change. The same thing with me, I didn’t start off as single family, but like small multis. And then it took a few years to get into actual commercial multi-family, you know, small ones.

Bernie:
I wanted to go into multi-family right away, Charles, that was my, that was my goal. Okay. But instead of like going like, well how do I do this and be creative about it, I go like, well, I, I can’t do it. Right? That limiting belief of like, I’m just me. I only have X amount of dollars. There’s no way I can buy an apartment building. That was wise. So the compromise for us was let’s just buy some multi-family, or let’s buy some single family houses. The problem with that is after we closed those first two deals, my wife and I looked at our bank account and said like, crap, we’re outta money, right? How do we scale this thing? Right? Right. And so these are cash flowing properties, but you know, they’re throwing off a couple hundred bucks per house per month and you’re not gonna go out and buy more properties doing that. Right? And so we had to pivot and say, okay, what’s the way for us to get to where we want to go faster and to scale this more quickly? And multifamily was the way. And so then it was like, well how do we change our mindset to then approach that? And how do we solve that problem of getting in multi-family when we can’t maybe pull down a large building ourselves? How do we network with other people so that we can do it as a group and do that, that do it that way instead?

Charles:
And that’s where you found partners and I were on the same similar page to you.

Bernie:
Yeah. So my, my partner Mike we worked together on our W two. Yes. And so you know, my wife and I we’re, we’re kind of crazy Charles is that we were, we found out she’s pre she was pregnant. And we’re like, oh wow. And then the next day we put our house on the market to sell. Right? And so, you know, our, our idea was that we would sell our primary house cause we had some great equity built up into that and use a lot of that as a way to fund our first deal. And so talking to my, my buddy Mike, I’m like, oh, he’s like, what’s up in your life? I’m like, well, we’re selling our house. He’s like, why are you doing that? Started talking about multifamily and he is like, well, tell me more about this. And so, you know, fast forward four weeks and he’s like, this is great. He’s consumed podcasts and books. And he’s like, I wanna partner on on this with you. And so we started to work together. And then from there it was just like, you know, how do we then, you know, find our markets and get this going to the point that we can kind of pull down our first property.

Charles:
So give us a little overview of your current investment strategy and criteria. Like what are you guys doing right now? What are you focusing on in what markets

Bernie:
We’re focused on? The Southeast Charles, that’s kind of our big one. We, we like the migration of the population, the long term trends for that. We look at assets that are, I think are, are less risky, right? We like stable stuff. Two of the three propers that we pull down are less than five years old, right? They’re fairly, fairly new. We don’t like really old, we like less than 30 years old. We don’t wanna have huge value ads where we’re ripping things down to the studs and doing lots of replacing. We want them maybe like we update the paint, maybe some countertops and some flooring. That’s about as far as we want to go. And so we know that that limits some of the upside in terms of the turnaround. But because we syndicate these deals and we’re using other people’s money mm-hmm. <Affirmative>,

Bernie:
Including our own to build us, we didn’t want to do anything in those first few years that wasn’t safe and conservative. And so we would rather under promise and over-deliver on our returns and say like, Hey, here’s this great unit. We’re gonna tear it down in three years. It’s gonna be worth <laugh> five x. We’re like, we’re gonna do some light touchups or, or manage this better. Yeah. And cut the expenses down and push rents to market levels. And then you’re gonna get really solid returns. And over the course of, you know, our five to seven year old period, you’ll probably see, you know, 15 to 20% annual returns on, on your money.

Charles:
Yeah, that’s great. Cuz you have, you’re getting so you don’t really have to deal with too much of the bones, the property as we would say, really. You’re really dealing with some, with, when you’re putting money into those units, you’re actually seeing a return on it. It’s not like I’m changing a roof and you’re not gonna raise your rent because you change your roof. No one’s gonna pay more. Cause it doesn’t, it doesn’t leak. And so that’s, yeah. And actually the money you’re investing, you’re gonna pay a little higher for that. But the money you’re investing, you’re actually gonna get it out in two or three years, whatever it is. And that’s awesome. That’s a great, that’s a great strategy. One other thing too is I see with people, even with older properties now when you’re getting into an area where rents aren’t increasing as fast, they’re kind of, you know, with us, we’re doing some of our properties, we’re doing kind of minor value ads on some of our units and you’re just doing a little bit of work here. You’re keeping ’em rent, you’re really worried about occupancy because you’re not, hey, you know, you put excos in, it doesn’t, you don’t get five x out or whatever it is. You know what I mean? That’s right. And so it’s, it’s it’s, it’s not really discussed as much, but it’s a great strategy.

Bernie:
We’ve been pretty fortunate, right. And, you know, we’ve, we’ve passed a lot of deals like, you know, the 1960s, you know, just, and they’re, and the broker’s always like, oh yeah, yeah, just put, you know, $5,000 per unit. You can increase rents by 500 bucks a month. And it’s like maybe <laugh>. Yeah. Right. But I don’t have unicorns and rainbows outside my window either. Right. And I’d like that as well. So I think those are the things, right, that we’ve been very cautious. And again, it goes back to if it was my own money and I’m just throwing it at something, I’m, I’m willing to take, you know, a couple years of hardship to maybe get it up. But when you’re dealing with other pe other people’s money, it’s, I, we want those stable things. And for our investor avatar, you know, our kind of our, our normal investor is they’re not looking to get rich overnight and they’re not looking to retire off this money, but they want those stable returns that slowly build over the long term. Cuz that’s how they’ve been thinking as well. And so we wanna make sure that the assets that we do purchase match those values of our investors as well.

Charles:
Oh, that’s awesome. So let’s talk about that with other investors. I mean, your first year syndications you raised over 3 million in over 500,000 for your first deal, which is definitely higher than most syndicators in their first year or their first deal. So kinda tell us how you did that with having, I guess, a track record at that point of maybe just a year or two of investing in single family and then going right into let’s say larger multi-families.

Bernie:
Yeah, I think the biggest key for me was, was my partner Mike Wright. He’s, he was well networked. He had a good network of people and a good background. But I think the other thing for us is that when Mike and I decided to do this, Charles, it was 2019. We didn’t pull down our first deal until February of 2021. And so in the meantime, while we’re looking for deals is as we were talking to people, we kind of identified who our nor our investor would be like-minded. And as we talked to our friends and people in our network, we would start to say like, yeah, we’re looking for real estate and here’s kind of what our criteria. And people go like, oh, real estate, tell me more. Right? And that would the people, people we kind of bring into our network and we just kind of keep talking to them on a regular basis throughout the year.

Bernie:
So by the time we finally got to our first deal, they didn’t say like, well who are you guys doing? Why are you doing this? A lot of ’em were like, oh yeah, we’ve been talking about this for a year and a half sometimes. Right? Tell me more. And that, that allowed us, I think, a little bit an easier transition in that first deal because, you know, raising $600,000 in the first deal, that was a big, that was a big like scary moment for us when we signed those papers, right? Yeah. So it was nice to have that and, and that just for us, Charles was a kind of a domino effect is once you have that first deal in place, the big thing for us was now is we need to perform. And so it was like regular communications with our investors, good newsletters. And then when that quarterly dividend was scheduled to happen, we hit it right? And we hit the minimum or exceeded it. And that allowed us, then as we got to our second and third deals, a lot of those people in the, from the first deals invested in both of the second and third and also brought in people who they knew as well that were interested in it and helped us to expand our network. So it was easier on those raises on deal number two and three.

Charles:
Oh, that’s great. Yeah. It’s funny how that works, right? You have one investor, we, I have, we have a handful of investors like that, you know what I mean? That went to one and then they’re, they did a second one and they’re like, Hey, let us know if you have anything else on the third one. And it’s kind of like they’re testing it out, they’re seeing how it works. Cuz most people, it’s not just testing out you as an operator, which is one part of it, but it’s also a lot of people have an invest in syndications. And I imagine some of your passive investors own some small properties that they rent out. So they understand real estate. They just probably haven’t gotten into properties as large and, you know what I mean? Is that true? Exactly.

Bernie:
Very, very true. Yeah. A lot of guys are like us. They’re like, I would love to do this, but I just don’t have time. Right? Between my career and family and things like that. I don’t have time to find it. So I do have the cash. So you do it for me. I, I got a good friend in California, he’s a A C E O of a, of a healthcare clinic and right. And, and he, he texts me a recording and goes like, this is the easiest money I’ve ever made. You know, keep it up. Right? When’s your next deal? And that’s kind of like, but that’s what he loves, right? Because he wants to be in real estate, he loves the tax writeoffs, he loves that building that wealth long term, but he has no time to do it. Right? And so he just likes to watch the bank account every three months, right. That check hits and that’s, that’s what he wants to have, right? And it helps him build that long-term value that he’s looking for outside of his W2

Charles:
Job. Yeah, that’s great. That’s great. So one thing I see with new investors is the analysis paralysis. And it’s like, how are you able to overcome this and how do you suggest to new investors to overcome this? Cause it’s very, I mean, when you meet someone face-to-face and maybe at a conference and they’re telling you about a deal and, and they’re like, you know, they obviously have it and you know, there’s, it’s very difficult to tell ’em or how to get around it, you know? How would you suggest to someone, how did you get around it and how do you suggest to new investors that might speak to you first?

Bernie:
I think the biggest thing for us is, is find people who are experts or who could mentor you. And, and whether you’re paying for it to be in a network or finding somebody who can, who’s willing to give you at least guidance on it. I think that’s the biggest key, right? Because it, as you, if you go on online and you go to even a market you like, and there’s a thousand listings sometimes, right? There’s just tons of listings out there and brokers are hitting you. And I think for that is, is that person can help to kind of refine Charles and, and really kind of filter down into a, to what you need to, to focus on. I’ll give you a good example is like, when I first started this, I was like, I love Atlanta, great market. I finally talked to a guy who’d been in Atlanta for 10 years.

Bernie:
He’s like, don’t even worry about it. It’s mature. You’re not gonna get into the market, especially cuz you’re in Boise. Here’s why. Here’s what to focus on instead. And that really allowed me to pivot, and that’s where I started to look at Middle Tennessee, where we’re invested in now, right? That was a big eyeopener for me. So I think for, for the new people to get in that analysis is like a, is find somebody who can help filter down your criteria, be willing to stick to your criteria, that’s a big thing. Mm-Hmm. And then fo and then b, be okay with small steps. I think a lot of folks are are like, how do I underwrite this, this deal? What’s gonna happen when I close it? And don’t even focus on that, just, just focus on, you know, finding deals that fit your criteria, walking through the underwriting or the financials and making sure it works and then moving on to the next step. Right? I think people try to look at this like, what’s what’s it gonna look like in 10 years? You know, get to your one, right? <Laugh>. Yeah. That’s the first step.

Charles:
So you’ve actively invested in real estate. You’re syndicating actively investing again in real estate. Now as you’re doing it, as you’re growing your business, you have a, you know, you have a W2 as you’re doing this. I mean, how are you, you have all, how do you have all this time to do this? And I mean, how are you working with outsourcing tasks and you know, freeing up time? So you’re really, I imagine spending most of your time finding deals or talking to investors.

Bernie:
Yeah, we split up, my partner does most of the investor stuff for him. Mm-Hmm. <Affirmative>, Mike’s kind of Mike’s wheelhouse. So that’s where he does the newsletters for us. And he takes the investor questions. A lot of my outsource tasks are, you know, the third party management, Charles as we do that Right. We don’t manage our properties directly. Yeah. That’s done by them. We just have weekly calls and check-ins. I take, you know, 20 to 30 minutes. They’re pretty, they’re pretty fast. We have a kind of good cadence down there. And really for, for us, it’s just on a regular basis just, you know, sending little notes to eat to, to brokers or how’s it going, what’s going on? It could be an email, it could be a phone call. And I can do that early in the morning sometimes cause of the time chime difference or, you know, during our lunch break, things like that. That’s kinda how I do it. We don’t outsource a lot of it other than that. Bookkeeping of course is done by professionals with the accounting, but in terms of everything else, we keep it in house. But we, my partner and I are, are pretty good about this. We’ve, we’ve got a system down that helps us out. So

Charles:
<Laugh> nice. Nice. Yeah, the outsourcing of the third party management is a, is a great thing to take off your plates so you can, when you’re, especially when you’re acquiring, and you guys are definitely in that mindset of acquiring properties, not really worrying about manage ’em. Did you have to go through, now talking about management, just off off topic for a second. Did you have to go through multiple management companies when you started, you know, buying these larger properties or, you know, did you find one through a referral or?

Bernie:
Yeah, the, when we, our first deal, we, we kept the manager in place. Unfortunately about about a year we actually had to replace that group and put, bring on a new one our third deal that management group in Clarksville, Tennessee. We’ve been networking with her, with her and her team for a couple years now, looking for deals. And they’re outperforming everything, right? They’re killing it right now. So we’re, we’re very, very fortunate to have them on board. But it, it is tough, right? It’s, it’s a, it’s a, it’s a tough thing. And I’d say, you know, my, my my biggest lesson learned is make sure that when you vet the manager out that they have the same mindset on the property as you and their values and their systems work as well too. Right? I think for us, for Mike and I right, we’re very proactive.

Bernie:
We don’t like to see the fires. We like to kind of see the smoke and take care of it right away. And some, some, in some cases, our first property manager was like, if it was a fire, he would address it. If it wasn’t, he would kinda let it smolder. And for us, that was really, really tough because yeah, it, I think for us, it cost churn with our tenants, right. You know, and it also cost cost money. And so, you know, to explain to our investors, like, well, the dividend would’ve been amount higher, but we didn’t address something in time, and so it cost us 3000 thousand dollars of missed rent payments by this tenant. We, we didn’t evict right away. Right? Those are kind of tough conversations to have. And so I’d say, you know, make sure your value aligned on that because that’s, that’s so important, right? It’s, it’s not like you’re wedded to them, but you’re, you’re working with ’em pretty closely

Charles:
And it’s Yeah. Yeah. Yeah. And they’re the ones on the, they’re the ones that are dealing with your tenants on a daily basis. And it’s great when you say about that, your first property manager is, I was told by a property manager one time that they are, they were talking about other pro property management company that kind of dealt with slum your properties and was like, they know how to really control expenses. And I was like, that’s a great way of saying that. They just like fixed stuff when it just really, like, like you said, like the fire happening. And I was like, what a classy way of saying that. But it’s true. Like your first manager was kinda like that, where you’re, you know, you’re getting stuff, but then it, you know, it balloons into a huge problem. So it’s really, I, I’m definitely a proactive owner as well on fixing stuff. So it’s, we, we really, we see something, we’re like, listen, this is gonna be something that’s addressed and you gotta let your managers know, like, Hey, let me know on this if it’s something that we don’t see when we’re walking the properties on our, our normal visits. So yeah. Very important.

Bernie:
Yeah. I think for us, I agree to, I think for us too, it is been a, you have to realize it’s a two-way treat, right? I think some people go and say, you’re the property manager, you work for me, you do what I say. And I look at it as like, they’re the property manager, but we’re our one of potentially dozens of customers, right? And hundreds of properties that they’re overseeing. And so it goes, it goes both ways. And so we’re very transparent about here’s how we work, how do you guys like to do things like for approvals, for invoices and work orders and things like that. How do you guys turn? What’s that kind of stuff? And we make sure that we are super reactive and responsive to them as well, so that they can do their job quickly as as well. Right? We wanna be a good partner for them. We want them because that, and that helps Charles with us as when we do have to make those phone calls or ask for those favors, they’re more willing to do that because we’ve been so good to them throughout their relationship. That’s a big key for us too. It’s not just a one-way street.

Charles:
Hmm. So normal questions that we ask every guest. So what are kind of mistakes you see real estate investors make? Bernie?

Bernie:
Oh gosh, I think, you know, the big ones, lack of networks. I think a lot of people, they start out in it, you know, they’ve <laugh> they’ve joined a gurus program who says like, you can use other people’s money to become rich overnight. And I think that’s, that’s, that’s a great, it happens for some I think, you know, find a good network, a good group of people whether you pay for it or you’re not. Find some people that can help you kind of, you know, vet deals, vet markets, and really kind of, you know, guide you along for that thing. And the other one too is, is realize that all the guys out there, guys and gals out there that are posing in front of their class, a 300 units in their Lambos saying, this is how I did it. I, I made this. That’s, that’s the rarity, right?

Bernie:
I think you have to look at it is make sure you do this the right way. And I think most people that are successful when they build this, they do it the right way, which is you build long term. And so the viewing is like, you know, what one deal can I make that’ll, that’ll allow me to equip my W2 and be a real estate investor full-time? I would’ve said, I had a good analogy from a guy that was my coach. He’s like, think of it as a conveyor belt, right? And you’re stacking properties in this conveyor belt and as the conveyor belt moves along, those properties start to mature. And then you, you might take them off a conveyor belt with, through a refinance or a a, a sale, but you’re still stacking stuff on the beginning of that conveyor belt, right? And over the course of time, you have a lot more properties on that belt, and that is where you start to build the wealth and the value Yeah.

Bernie:
In this, right? And think of it that way. I think a lot of folks seems turn less like, what one deal can I invest in? Yeah. That’s gonna allow me to pull the rip cord on my w2. Mm-Hmm. <Affirmative>, I just don’t think that’s, it’s just not a viable option. Right. It’s not realistic. And so think about it that way and do that that’s been a, a, a big key for us. And then over the course of the time, I think too, is be willing to not do everything right, I think. And so be willing and say like, you know, Hey, I could own a hundred percent of this deal, or I could own 10% of this deal by bringing other people in other parties. Think of it as, as a, a bigger pie. I think you may maybe have a smaller piece, but you have a smaller piece of a lot more pies than just a big piece of one pie. And I think I see a lot of folks who are trying to do it, do it on their own initially at first, and it’s gonna be tough, right? I mean, you might even have $250,000. Charles doesn’t get you very far multifamily nowadays.

Charles:
No. Right,

Bernie:
Right. So about $250,000 split across five or six deals potentially. Right. That can get you a long way really fast. And in five years you’d be in a much better spot. So I think, you know, think of it that way. I, I always try to think of it, of, of bigger pies, but you know, more, more pies that you have piece of.

Charles:
Yeah. It’s also funny the way you say about the one person or the one investor waiting for that one special deal and those appeal Oh, when it goes down, when it goes down, well, I mean, you know, it’s, you’re gonna be waiting many years, most likely. And, you know, to find that if it ever does happen. So it’s just, it’s kind of another paralysis I think you’d say, you know, just kind of not taking action. And that’s the reason. So

Bernie:
Yeah. A good, good example would be like, you know, when covid happened, we had a deal in our contract we had to back out of, right? Cause our investors said like, oh, sorry, no, we’re not gonna do this. And that’s normal. Right? But a lot of people were saying like, well, COVID is gonna cause multifamily to decrease by 15 to 20%, so you should wait nine to 12 months. If we had waited, Charles, we would’ve missed out on our first two deals. And our first two deals have appreciated <laugh>, you know, you know, if that 20 or 30% already Right. Since we pulled them down. And so I thought, you, you’re right, right? There’s never the perfect time to get into the market. I say the perfect time is now. Right. Just do it. Mm-Hmm. <Affirmative>, especially if you have that five to 10 year time horizon, if you buy a really good asset and a really good market, you’ll make money on it in five to seven years.

Charles:
Yeah. I I totally agree. It’s very difficult if following those rules to lose money. I, I agree. Totally agree with that. Totally. What do you think are the main factors that have contributed to your success over the years, Bernie, whether it’s professionally prior to real estate or during your real estate career?

Bernie:
I think the biggest one is people surround yourself with really smart people. I, I like to smart surround myself with people who are smarter than me, right? If I’m the dumbest guy in the room that I know I’m in the right room, <laugh>, that’s kind of <laugh>, right? That’s a big one for me, Charles, right? I mean, I, I wanna be pushed. You want, you want people who are, who are successful, who have done this before, who can train you, and you want to feel like you’re, i, I like to feel insecure, like, Ooh, am I really in the right setting? That’s, that’s a good feeling for me. I think the other one too is just, is be willing to put in the work, right? This is not easy, and this is not an overnight success, but be willing to say like, you know, Hey, even though I’m doing really good at my w2, I’ve got a family and kids, I need to spend time set aside some time noted to make yourself better right. To learn. And that’s like reading articles, reading books, listening to podcasts, you know, calling people who are successful and finding out what they do, right? How they get there. Those are the things that start to, you know, add a little more tools into your belt that over the course of time will make you more successful. That’s been a big key

Charles:
For me. Yeah. The education never ends. So it doesn’t, Bernie, how, how can our listeners learn more about you and your business?

Bernie:
Yeah, thanks dude. They can check out our website, it’s elemental equity l l c.com, or they can just send me an email at bernie elemental equity llc.com. Happy to answer new questions you have.

Charles:
Well, thanks so much for coming on today, Bernie, looking forward to connecting you with you here sometime in the near future, and have a great rest of your day.

Bernie:
Thanks for having me. Appreciate It.

Charles:
Talk to you soon.

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 Bernie Lease

Bernie has an extensive background running high-performing teams at scale, and successfully manages multi-million-dollar operations worldwide.

He began investing in real estate in 2018 with single family homes but transitioned to multifamily in 2019 and is a general partner of $12MM of assets and a passive investor in 130 units in OKC.

He co-founded and launched Elemental Equity, a Boise-based commercial real estate investment firm that focuses on helping successful W2 earners achieve financial freedom through real estate investing.

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