GI254: Investing in Real Estate Syndications with Rick Martin

GI254: Investing in Real Estate Syndications with Rick Martin

Rick Martin founded Fortress Federation Investments, a private equity firm investing in value-added multifamily assets in Texas, Florida, and Arizona. They align with experienced operators in fundamentally sound markets to create optimal partnerships for their investors. They handle the entire process, from sourcing to acquiring, managing, and selling properties, so their investors can enjoy stress-free, long-term financial growth through monthly cash flow and asset appreciation.

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Transcript:

Charles:
Welcome to another episode of the Global Investors Podcast; I’m your host, Charles Carillo. Today, we have Rick Martin. He founded Fortress Federation Investments, a private equity firm investing in value-added multifamily assets in Texas, Florida, and Arizona. They align with experienced operators in fundamentally sound markets to create optimal partnerships for their investors. They handle the entire process, from sourcing to acquiring, managing, and selling properties, so their investors can enjoy stress-free, long-term financial growth through monthly cash flow and asset appreciation. So thank you so much for coming on the show today, Rick.

Rick:
Thanks, Charles. Thanks for having me, man.

Charles:
So Rick and I know each other from a mastermind group probably over the last year or two, and I thought it’d be great to have Rick on and have him tell us his story and his words of you know, where he was and where he is now. So, Rick, if you can give us a little background on the, how you got into real estate investing a little bit professional and personal before really doing what you’re doing now.

Rick:
Yep. Pretty, pretty common. You know, I, I didn’t know much other than just buying, buying a house to live in. And that was, that was the plan. You know, I wanted to buy a house. I was living in Seattle, Washington had been, had been graduated from the school of business out the UDub. And you know, just following the normal blueprint where you know, I had a lady in my life, <laugh> she, she’s not my wife now, but you know, we were talking about buying a house together that, that didn’t work out. But I continued <laugh> down the road of buying a house. And I, I did, but life took a change. I sort of had a career change where I wanted to get into something a little more creative than what I was doing business-wise.

Rick:
And rather than selling that place, I, I put it up for rent and didn’t go too far away. I went up to Vancouver, British Columbia, not too far from Seattle and had that place rented. And it was, you know, I was finding out that it was quite helpful, you know, having those rent checks coming in as I was a broke student. And that was like during, you know, going to school, which was further education, I was like, Hmm, you know, this is pretty cool. It was different than my stocks, you know, I was getting cash flow. And so I kind of thought, I’m gonna do this on the side as a side hustle, and that’ll be part of my retirement. Ended up moving down to la from Seattle or after that that school stint and continued to invest in places like Las Vegas Palm Desert, California went through, you know, tough times 2008 where I thought they would never come back.

Rick:
And really was questioning, do I really want to be in real estate at all. This is, this is brutal. But it was just part of that learning experience, like, Hey, you know, you go through valleys and, and you can get out if you stick with it. And, and thank goodness I did. But I was, you know, in terms of what I was doing I was, so, I backing up, I, I went to a film school up in a film media school up in Vancouver. And that’s why I moved down to LA because everything in the post-production field, in terms of production for entertainment was down here in Los Angeles. And you know, and it was, it was creative, exciting times, but it did become a grind. And, and somewhere along the line I thought, you know, I want to transition full-time to real estate. And, and eventually that’s what happened.

Charles:
So, when you how did you con continue your real estate investing journey after making it down south and with what you were doing? How did you kind of restart into it? ’cause You already had a property, you already rented it, and it’s really getting into that first really, you know, getting into the investment properties. What were the first ones you did?

Rick:
You know, I, the, the Vegas properties were actually was just word of mouth through some of my colleagues. You know, Vegas was hot at that time. This was, you know, previous to the last recession. It was, I remember, you know, I had like a hundred grand in equity my first year. And, and that was a lot, you know, back, back then. I said, wow, man, I’m gonna be rich. And you know, meanwhile, my Seattle property was growing by leaps and bounds, and I really felt like I was on a great trajectory. And you know, after, after the recession occurred, you know, I think that va, that Vegas, that first Vegas property, I, I bought, it had been up to, I don’t know, 350,000, which was a lot at the time. I think 2005 or whatever. And then it was worth like 70 5K.

Rick:
So <laugh>, I was, I was licking my wounds. But fortunately continued to network. This was before bigger PTs and all that, you know, just kind of networking with some, some friends, really just some surf buddies that were involved in real estate. And you know, we started doing some, we doubled down, you know, it was time to buy, although getting capital was really difficult. Getting any kinda loan was very capital or very very difficult. And so we were, you know, at first we were coming out of pocket, but then we started to partner with people, and that, those were my first tastes of taking on private investment in some of these. We were buying like duplexes, some single family. And I think while I was, me and my wife were looking for a, another residence to buy down here in Los Angeles, that’s finally when I caught wind of BiggerPockets.

Rick:
And that kind of opened up my world to, you know, the entire country. And then I started investing in small multifamily in, in the Midwest, Indianapolis got into a small apartment in you know, I think it was 12 units, I wanna say. And it was, you know, it was going okay, thought I wanted to operate on a larger level. And, and ended up partnering with someone who had experience running these huge properties, which I didn’t know was even a possibility. But he was he was a grizzled vet. He was buying something in Columbus, Ohio. And that was my first taste of syndication. And once I got on that scale, it, it seemed just to kind of make sense and just stick, stick with that. So couldn’t do it all myself. And you’re well aware. You have to partner with others, you know, it’s very handy to have boots on the ground which I do in, in the markets I like down, you know, the Texas market’s very strong, so I’ve got a good team down there, work with a team in Florida and work with another team in Arizona.

Rick:
Those are, those are kind of my primary markets now.

Charles:
So with, with having your markets and what kind of deals, give us a little background on really your current investment strategy and the deals in those specific markets that you really focus on, you and your investors.

Rick:
Mm-Hmm. <affirmative>. Yeah. You know, sometimes I’m, I’m, I’m tempted to get into a new development deal or maybe a, a build to rent deal. But, you know, the tried and true value add multifamily formula is, is what, what I stick to. And that only, that only means, you know, we don’t go too old. We go about mid 1980s and above garden style, 200 units plus. And we generally look for deals that have good, like the boring infrastructure in place. Like, you know, the, the wiring is sound, the plumbing is sound, the roofs are sound. So we don’t have to like sink a bunch of money into that because, you know, tenants, they don’t really care about that. They want to see, you know, nice vinyl flooring nice countertops, all the, all the all the finishes so we can spend the money on the stuff that improves the curb appeal.

Rick:
That’s, that’s one criteria that we, we stick to. And you know, these, these markets that we, we invest in, they’re, they’re, they’re mostly primary markets, but we do have a few secondary markets. As long as, you know, the fundamentals are strong you know, there’s some strong trends in terms of, you know, population moving there and, and, and business friendly business environment a diverse economy. You know, it’s not, it’s not just, you know, military, not just oil. There’s a lot going on there. So those are some of the things we look for.

Charles:
How have you effectively pretty much formed these relationships with deal operators and sponsors? ’cause That’s a question for active investors who are doing syndications like you are, and then also for passive investors as well. They’re gonna have the same questions of how they really found people to to really invest with down the road.

Rick:
Yeah. Well, I think a, a good thing to do is, is get outta the house and go to meetups. One of the, the partnerships that I have, I actually is it lived fairly close by and, you know, we wouldn’t have met each other had I not attended a meetup. And we, we just started getting to know each other that way. We never even really even thought at that time that, oh, we’re gonna work together. But you get out you start building your network and you’ll be surprised at what comes your way. And that can be done online as well. You know, I think I’m thinking of one of my partnerships, my longest tenured partnerships. It just started with a phone call. And I believe, I can’t remember who found who, but one of us found the other on LinkedIn, and then we had a Zoom call.

Rick:
Then we had another Zoom call. And you know, we became very comfortable with each other, which, you know, that, that, that’s a criteria I have. You know, it’s like I have people approach me would you like to come in on this, this opportunity that we have? And said, whoa, you know, wait a second. I, this takes a while. I really, I take my time. I watch them for a while, I evaluate what they’re doing before I can get comfortable actually partnering. And then I would lastly say referrals. You know, and that goes, that kind of goes hand in hand with building your network. You’re gonna get referrals. So yeah. You know, going out, meeting people in public reaching out to people online that you meet, you know, whether it’s through BiggerPockets LinkedIn, Facebook however you find ’em, Google or just, you know, taking a good referral from some referrals are, are worth a lot.

Charles:
Yeah, no, that’s, that’s really important about what you said, because I, I find it very interesting is that we’ll have people reach out to us to raise money for deals. And I had someone I just remember, as you were saying about like a month ago, and I was like, all right, well, send me out you know, I’m not gonna partner on this deal with you. Send me out like your track rep. Ah, nothing. You know what I mean? Like, so it’s really just, it, I mean, it all sorts itself out for the most part, but people are just, they don’t care about a real relationship. They need money for a deal, and that’s all they care about. They don’t care about Oh, yeah. In the future. And I’ve had it multiple times, even within different mastermind groups I’ve been involved with too. You know what I mean? So it’s, it’s just like you find people and they just don’t want to, I don’t know, just, it’s just not gonna be a fit. So it’s really important. I think that, like you said, to really build that relationship. And referrals are the best, you know what I mean? It’s really, if you’re getting a referral to someone and you trust the person you’re getting that referral from, I mean, that really puts it, it really solidifies the beginning of that relationship.

Rick:
Abso absolutely. Yeah. I, you know, they like what you said. There you go. You know, you, they reached out to you and then they kind of showed you what they’re all about by not, you know, delivering just a simple request that you had you can learn a lot about. You know, you just have to start that process of communicating and see how they communicate with you if they, you know, if they’re communicating with you, if they’re very transparent, that’s a good, that’s a great sign, and it’s worth pursuing that. But yeah, I would just say, take your time, be careful and make sure you got the, that you have the, the same interests or your, your interests are aligned. You know, maybe, you know, if you’re looking for cash flow, then you don’t wanna be jumping in on a, a group that’s doing new development ’cause you’re not gonna see any cash flow for a couple years. And then just how are, how conscientious are, are they of the community? Are they just in it for the buck? Are you comfortable with that? You know, there’s a lot to align yourselves with.

Charles:
Yeah. The communication’s a huge thing. I remember being at a real estate conference years back, and people there, like, somebody got on stage and was like how many people like get emails from deal sponsors? How many people are invested? Like there’s a limited partner right now. How many people would want have better communication with their, with the sponsor of the deal that they’ve invested into passively? And I mean, so many hands went up. I mean, it’s just, it’s like a simple thing of the communication, but people don’t do it. And it’s like, it’s very difficult to get answers outta people. And that’s the same thing I’d find when working with certain operators that we’ve spoken to or that I’ve heard other people work with. And it would be, you get once in a while and you’re like, okay. And you’ll get that feeling initially sometimes where it’s like, this person just needs what you’re bringing and they don’t really need you as a partner.

Charles:
And it’s, it’s difficult because especially if you have investors with you and you have partners with you, and you have all these different people that are relying on you. Mm-Hmm. <Affirmative> and this partnership you have with this group. Mm-Hmm. <Affirmative>. I mean, you really need, you want to be in a partnership with them. And a lot of different people don’t want that. They’re just like, okay, you just, I need to fill this out and so, you know, come along and do this, handle this. And once that’s done, you know what I mean, we will handle everything else. You don’t really have a say in it. And that becomes difficult to operate a deal like that.

Rick:
Oh yeah. You can’t, yeah. You, you have to be included in on those conversations. I’m always pushing because if you’re not, if you’re not at the location, wherever the operating team is, you have to be included in all that because you’re the one who has to communicate all that to your investors. So yeah, you gotta be in one way, shape or another in, on those asset management calls. And they need to be communicating to you before anyone else. Like you’re right there with them. That’s, that’s definitely a pet peeve of mine.

Charles:
Yeah. When they’ve made decisions or they’re planning on making decisions, or they’ve already really made their decision. Mm-Hmm. <Affirmative>. And then they’re like,

Rick:
<Laugh>. Yeah. You’re finding out when it’s all the other investors said, that’s not good. You gotta be Yeah. Part of the team.

Charles:
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Charles:
Yeah. So many, there’s so many things about partnering with anyone, especially in this business. You’re not like, we’re not flipping houses and people got really used to two, three years of making all this money in the deals, and now these are gonna be a lot longer, I feel Mm-Hmm. <Affirmative>, you know what I mean? Mm-Hmm. <Affirmative>, they’re gonna go for what we tell people in the actual investment memorandum of 3, 5, 7, 10 years possibly. So that’s how long this relationship can, can last for. And so it’s really important being on the same piece same page with every different piece of, of the deal. But no doubt.

Charles:
So, so Rick, let’s just say for example, I mean, you’re a pretty astute underwriter when we speak about deals that you are looking at. I mean, and if an operator sends you a deal and to potentially partner with them on, and you’re reviewing projections, you’re, you’re reviewing their underwriting what they feel of what’s gonna happen, what are some of the things that you think are some of the most important aspects of underwriting that maybe you focus on? Whether it’s throughout the whole underwriting process or like initially that you wanna see, and then you went over a little bit beforehand, like the number of units and the markets and stuff like that. But when you’re getting like, deals specific, when you’re looking at that what are some things that you pick out that you feel, ’cause you do a lot of passive investing too, so you’re looking at deals that could be active on or could be passive on. Yeah.

Rick:
Well, you know, a lot of investors though, you know, they’ll look at the returns and they’re like, oh, those are nice. You gotta be looking what’s under, at what’s under the hood. So what I’ll do, something does get me excited. You know, you hear $300 under market rent that’s, that’s a good thing. Now you just have to verify that I really like a deal that has a good delta between current and market rents, but are those actually the market rents? And you just have to drill, you know, whoever your sponsor is, you know, are these actually the current rents? If you want, you can actually request a rent roll. I’m not sure if everybody knows what that is, is, but basically that’s the line by line. All the renters on a, let’s say a 200 unit they have, you can get like an Excel spreadsheet and actually total what those current rents are.

Rick:
And then you’re gonna want to verify what market rents are. The, the best way to do that really maybe reach out to a commercial broker. You, you know, there are online resources like rent, arm, rent, I never know if it’s Rentometer or Rentometer. You know, there’s you know, apartments.com, you can just cross reference a bunch of resources and sort of, kind of see whether their market rents that they’re projecting are, are realistic. And then I wanna see, I wanna verify rent comps, you know, what, what the closest properties in both quality and location. What are they actually getting and where do we fall in line with them? Are we, you know, are they looking at setting, you know, being at the top? That’s a little scary for me. I’d like to, even after renovation, I’d like to be somewhere sort of in the middle, you know, at least up, you know, no higher than the upper third.

Rick:
And then I really, I really question, okay, you’re saying you’re gonna get to these rents. How long is that gonna take? And what’s your business plan? Are you really going to be renovating 10 units, you know, per month? Is that possible? Because it’s, it’s pretty easy to say, yeah, we’re gonna get to the, you know, from this rent to that rent in a year and a half. Well that’s, that’s challenging. So, and what are you gonna do with the existing units? Are they going to, are you gonna just up those rents and then, you know, you, you risk, you know, sometimes you want to turn over that tenant base and <laugh> and, you know, a little rent bump. Will, will do that. It’ll, it’ll get people, get people moving. So I like some clarity on, on the business plan.

Rick:
Like how realistic and how challenging is this business plan given the environment. You know, like right now with talks of a recession and the interest rate environment, the way it’s been, it may not be the best time to be jacking up rents, you know, on, on tenants. So yeah, I, I look for sort of a lower risk business plan feasible, you know, feasible, attainable rents that can be achieved. And now I’m going off here, but rent growth, you know you, you definitely want to, you don’t wanna be seeing 5%, 6% rent growth right now. You wanna see bc you know, more like two, two, 3% realistic expenses kind of targeted Right, right in there with them. And yeah, the old crystal ball comes down to the exit cap. I mean, that one’s, that one’s very difficult. But you want to make sure, you just wanna see what is their exit price, what are they predicting they’re gonna sell this thing at? Because that really is the crystal ball, right? No one can really predict that. Yeah, I could go on and on, but those are a few.

Charles:
Yeah. The rent, the, the rent, the market. And the one thing I find in a lot of those packages is I’ll find that like you, your second point you put out there, which was how accurate that is or how apples to apples, let’s just say it, is because you’ll find them that are farther away or that aren’t even a near vintage Mm-Hmm. <Affirmative> or, because if you find something that’s within a couple years of each other that’s fairly close to it, you know what I mean? And then, then you can look at the condition of the units. So I can go on to either you can go onto the peel’s website, figure out exactly what the size of the unit are, you can, and you can really run your rent comps that way. But the problem is that I think is when you have people that are putting out things, and it’s not, I mean, I one time saw something and the rent comp was three miles away, you know what I mean?

Charles:
So it’s like, it might as well be in a different state. I mean, it doesn’t, it doesn’t hold any water of what you’re gonna do. So I just, yeah, the rent, rent rent’s very important. And then also where you’re pricing it. So I think that’s, that’s great information. ’cause Normally what we’ll put is like if my rule of thumb, and if I’m speaking to anybody, it’ll be like 20, 25, that 30% is really where that rent has to go to really, to really fulfill any type of business plan that’s gonna make sense in a double digit return. I mean, that’s really just kind of how it comes down. And like you’re saying, you probably wanna see that even higher so that you don’t have to go all the way to the top. So. Exactly. It’s, yeah. So when you’re, when you’re, I mean, what does it really mean when you’ll hear, I, I talk to all the time and you’ll listen to podcasts, you’ll listen to anything, and it’ll be conservative underwriting, everything’s conservative underwriting, and like you went over a couple things about what you look for when you’re looking at deal, but what really, obviously, you know, you have that exit cap of where they think it’s gonna self, where the market’s gonna be, where interest rates are gonna be, which we don’t really know.

Charles:
But other than that, what really makes a good, the underwriting conservative for a deal and something that I imagine you are editing, the underwriting that they’re sending you with maybe different information that you feel is more accurate.

Rick:
Yeah. probably start with the debt. I, you know, you don’t wanna be getting into something with too high LLTV, you don’t want, especially right now something like 80%, you know, anything above 80%, you really have to question, question that. That’s, that’s that’s, I, that’s sort of where I start. I, I mentioned, you know, rent growth and really just revenue growth over those first few years. If you see like a, a revenue growth of, you know, teens you know, 18 20% year one, you know, that’s, that’s, those are pretty lofty aspirations, and it’s gonna have an effect on, you know, just if you’re really trying to raise rents that there’s, you’re gonna have some occupancy issues. So achieving those revenues year one, year two, that’s, you have to look at that as a red flag. Yeah.

Rick:
And then I talked about just the exit price. It’s, it really the, the whole exit cap thing is, or predicting what you’re gonna sell. That’s, that’s the part that bothers me probably the most. Because like I say, it’s just a crystal ball. So it, you know, you have to, you have to project that exit cap, so you just wanna see where, where it is at and where it, you know, purchase cap, it doesn’t really matter. It’s more just the prevailing market cap. And that can be difficult for a passive investor to find. You want to ask your operator, okay, what is the prevailing market cap? It’s their duty to be completely honest and transparent with you. So their answer should be accurate, and they should have that either from, you know, good data resources like CoStar or Yardi Matrix or, or brokers. Or maybe just the best thing is if you have a large database yourself and you’re underwriting deals and you have the average prevailing market cap. So I think, yeah, so those are the things I, you know, conservative underwriting, you just wanna make sure that the assumptions that they’re making are, you know, not too lofty. So

Charles:
One thing that I found with underwriting is when you’re, like, you said it initially was about going through the renovation process, and you’ll find that people really, a a lot of new investors will really dramatically increase what they think they can do for units renovated, and they really shoot short really what they think that the vacancy’s gonna be for that. You know what I mean? Where you’re seeing like, you’re gonna do all this to one unit, you’re gonna rent it and everything within one month. I mean, that’s very aggressive, you know what I mean? So when you’re looking at their vacancies, like, so you’re doing all these units, but your vacancies still this low and all these different things. Like you said, they’re extremely lofty. So it’s really have to kind of dig into how long these units are gonna be vacant especially now and then how much work they’re doing to ’em. I mean, this time right now you might do renovating less units, you know what I mean? And just rerenting units at what the price is closer to what it is currently. But in the future, like we were doing two, three years ago, we were doing many units per month, you know what I mean, at all your properties, because there was that appetite for purchasing ’em after or for renting ’em afterwards at that higher price. Yeah,

Rick:
Well, yeah, exactly. You have to, it all has to align, right? You, you, your deal isn’t in a vacuum. It has to, has to align with what’s going on in the market. You just said it, you know, if there’s a lot of competing supply you’re gonna have you’re gonna have some vacancy, you’re gonna have some soft, soft rent growth. So it really all has to align. And, and that should really all be set up well for you in the investment summary. You know, talks about the team talks about the market, what’s going on in the market, what’s the absorption rate you know, are units getting absorbed? Is there market demand? Is there rent demand? That all plays into the business plan. It all has to fit together.

Charles:
So you went from being a, a W2 employee, you’re now a full-time real estate investor. What were some of the mind shift changes that you had to make to, to do that? And going from, you know, your own boss becoming an entrepreneur? Mm-Hmm.

Rick:
<Affirmative>. Yeah. Well own boss. That’s a, that’s a big one. That was sort of my why. You know, people say they’re kids. Well, you know, you can be a W2 worker and your motivation, you know, for, you know, it’s just putting food on the table, right? So really, I, I would have to say my why was becoming, being my own boss and more control of my schedule so I could be with my kids. I, I had reached burnout, I dunno, many years ago actually. And I knew that I, I wanted to transition into real estate. And for a while there, what I did, I left W2 quite a while ago, and I was a contractor, basically 10 99 free agent. And for a while there I was telling myself, well, this is pretty cool. I can, I can freelance, you know, in my old career, and I can, I can do real estate, you know, it’s my new career and I can do both.

Rick:
And, but it was really diluting my focus. You know, I was splitting my, my focus, not only was it stressful, I’d be at work and I’d have real estate obligations, but I needed to be there full-time for my investors. You know, I couldn’t be, oh, well, you know, I kind of do this part-time, <laugh>, you know, they, they, they require your a hundred percent focus. So I didn’t feel right splitting time. And then once I did that, I did, I did jump ship, I burned the boats. I, this is what I’m doing. I’m no longer this, but I do this on the side, you know, I am this, you know, I’m a, I’m a full-time real estate investor. This is where my focus is failing. This is not an option. This is, this is what I’m doing now. It’s gonna work. So I, if anything, it kind of tested my metal and my resiliency. But it’s, it’s more exciting being your own boss. I think.

Charles:
That’s fantastic. So as you’re, as this whole career you’ve been going through, I think since the late nineties, investing in real estate you’ve been around a lot of real estate investing. We went through some of the issues you see sometimes underwriting. What are some other mistakes that you maybe see real estate investors make that you pick up on here and there that’s maybe outside of the scope of like underwriting as we spoke about earlier?

Rick:
Yeah. You mean other than, well, in terms of passive investing, you know, I think a lot of people will see that just go off the returns and call it a day. And it’s, it, it is good to be so comfortable with your operator that you, you trust what they’re doing, but you still, you, you should do some homework on yourself, you know, and there, there are ways you and I have talked about, like we could do something educational for our communities where we can kind of show them how they can do some due diligence on their own to sort of verify what’s going on so they don’t have to take just take the operator’s word for it. So although it is passive, you know, there, there’s no, no harm in doing a little bit of your own homework and at least ask the tough questions.

Rick:
Don’t be afraid to ask the tough questions. Other than that I think in terms of just real estate investors themselves, sometimes it’s good to have a, a positive mindset, but you really have to analyze whether your business plan is realistic. And I think sometimes people think that they can raise, you know, they can renovate, raise, raise those rents, and it’s all gonna go perfect. And as we know there, there’s problems every day in real estate, real estate’s challenging. It’s like something’s always constantly going wrong. And that’s why it’s kind of nice, I think for passive investors to be, have that buffer so they don’t have to see all that. They don’t have to take those phone calls. ’cause Tenants, you know, more, more, a lot more than others, like getting on the horn and, and telling ’em what they think about, you know, <laugh>, what’s going on with your property. So yeah, I think, I think just, just not having, just, I guess just being able to defend the numbers where whether you’re on the front lines or you’re a passive investor just make sure those numbers are defensible.

Charles:
Yeah. And I think also just seeing where you are in the market cycle too, when you’re making that decision. Because if if you’re, if we little uncertainty right now that’s probably gonna be, you’re not gonna be as aggressive on your numbers ’cause you’re not gonna have that market really saving you, you know what I mean? As you, you know, these growing markets are great when everything’s going up, when there’re a little uncertainty. I mean, then you have to really make, really, there’s not anything to save you if with your business plan, if you, if you’re gonna go off course a little bit.

Rick:
It’s interesting ’cause I almost feel like now this is a much better time to invest than it was 1921 or 1921, <laugh> 2021. I don’t know about 90. I i, if you invested in 2 19 21, you’re probably doing pretty good with that property now <laugh>. 2021. 2022. Yeah. Like you say, the, you know, we were at the top and it’s that, it’s that whole, you know, herd mentality. Like, wow, the real estate’s doing great. I gotta, I gotta jump in. Now at least there’s been some correction and the, the only problem is the market’s so tight now, there’s not, I don’t know about you, but I, it, it’s quite a down in terms of deal flow. So when a good deal does come along, you should take a good look because now is actually a time where you might be actually getting a discount on a deal, whereas you were buying at the top at 2021.

Charles:
Yeah, no, definitely. I definitely agree with that. I mean, it’s been tough here for us finding deals over the last year and a half really. I mean, from definitely the last year. I mean, it’s slowed down dramatically with deal flow, so it’s something that we review deals, we see ’em come in, but really sticking to, as you said, having your criteria, knowing exactly what years you’re buying property, know what markets you’re buying and sticking to that, not going into anything else, kinda shiny object type scenarios and strategies, I think is really the way and the key to success.

Rick:
Absolutely. Yeah. It’s, it’s, I think, I guess it’s just difficult to predict what, what tenants are gonna do right now. And you know, I guess there’s still, you know, talk of unemployment rising toward the end of 24. That can have a kind of effect and we’re just gonna have to see what, what’s going on with interest rates. But we can’t just depend on, on interest rates coming down, you know you have to seek creative ways to create cash flow. You know, we’ve been in, in, you know, you and I have talked about some of the deals we’ve been doing these, these tax abatement deals where you’re getting huge write-offs for your property tax and, you know, eliminating the largest line item on your expenses is just as powerful and lower risk than trying to renovate and raise rents. So it actually aligns with what’s going on in the market right now that, you know, if there’s a little uncertainty, you know, if you can reduce respe expenses, you don’t have to worry about raising those rents, but you’re still capturing that cash flow and value. So that’s kind of what we’ve been doing.

Charles:
Yeah, you’re slightly adjusting your business plan a little bit for depending on where we are right now in the market cycle. So that’s, that’s a great way of doing it. Exactly. Rick, how can our listeners learn more about you and your business? I

Rick:
Think the easiest thing to do is just go to our website, fortress federation.com. On there you go. You can find a button to schedule a call. I love talking shop. I love hearing people’s stories and you know, seeing whether it’s a good fit for you. Yeah, and, you know, get ahold of me. Let’s talk shop.

Charles:
All right, well, thank you so much for coming on and I’m looking forward to connecting with you here in the near future. Right on

Rick:
Charles. Thanks a lot. Appreciate it.

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.

Announcer:
Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Syndication Superstar, LLC, exclusively.

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About Rick Martin

Rick founded Fortress Federation Investments, a private equity firm investing in value-added multifamily assets in Texas, Florida, and Arizona. They align with experienced operators in fundamentally sound markets to create optimal partnerships for their investors. They handle the entire process, from sourcing to acquiring, managing, and selling properties, so their investors can enjoy stress-free, long-term financial growth through monthly cash flow and asset appreciation.

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