GI88: Raising $75 Million and Purchasing Over 3,000 Apartments with Maureen Miles

GI88: Raising $75 Million and Purchasing Over 3,000 Apartments with Maureen Miles

Maureen Miles brings over 25 years of real estate experience to the firm she founded and is the acting managing partner of, 4M Capital, a fast-growing multifamily, private equity investment firm.

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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:
Welcome to another episode of the Global Investors Podcast; I’m your host Charles Carillo. Today we have Maureen Miles. Maureen is from Connecticut, about a 30-minute drive from where I grew up and she brings over 25 years of real estate experience to her current firm where over the past 5 years has raised over $75 million to purchase over 3000 multifamily units. So thank you so much for being on Maureen.

Maureen:
Thanks for having me Charles. Nice to meet you.

Charles:
So you have a pretty interesting background, even in a, even a realtor and all different kinds of parts of real estate. What was your background prior to starting to invest in real estate?

Maureen:
Actually I was an IT I was a network engineer for one of the large telecom companies is what I did for my day job. And I ended up putting on getting put on this Asian assignment. So I had to work kind of these off hours. And I started just looking for other options. I wasn’t happy with the timing, like my job. I had to be there a certain time of day. I remember I couldn’t get my kids off the bus and that was really bothering me cause I was like home all day by myself. My kids were, you know, middle school or something and, and I couldn’t be there to just get them off the bus. I had like this 10 minutes, it would be like 10 minutes late to work. And my boss would not let me, even though I made my own schedule and I said, Hey, I’ll work an extra two hours. Just let me come in 15 minutes late. You know, it’s like, Nope. And so that, fortunately for me, that is what pushed me over into looking for something else. Like what else can I do? How can I get out of this? I don’t want to be a slave to this Yahoo that is controlling my exact schedule, you know? So it, it really is. It just built up this, this as energy in me to go ahead and just find something else to do. And so that’s what, so during the day I started buying smaller multis, we buy two to four unit properties and maybe a single family now, and then to flip and just started doing that during the day, about three o’clock. I go grab a shower, change into business clothes and go sports. I still have paint in my hair. So we did a lot of work ourselves back then. And yeah, I’d go to work through my network engineering job and in the morning, get up and just do it all over again. So I did that for quite a few years.

Charles:
Why did you choose real estate as your investment vehicle when you started?

Maureen:
But like, it’s like once you can understand the system it’s repeatable, right? We can go get another job. We can work over time. We can you know, there’s ways to make money that were trained, but you’re limited where I understood the concept of real estate, at least that, you know, you have a building, people move in, you rent it out, you get the spread. Like I’m always trying to teach my kids. These concepts do something like I really think wealth is made on the spread of anything. If you’re fighting every inch of the way or having to show up for X amount of hours, I mean, you could, you could be comfortable, that’s fine, but you’re never really going to gain true wealth where you have control of your time in that matter. So that’s, I understood that concept and it made sense to me, a real, estate’s really a low barrier to entry, which works as a positive and a negative in the, as you’re doing the business. Right. But if you’re willing to work hard and you know, kind of just make sure you’re doing the right thing and you’re treating, you know, to do what you say you’re gonna do you can be successful at it.

Charles:
It’s also an imperfect market too, which I find, which is so you can actually find deals if you have a strategy and a criteria that you kind of hold by.

Maureen:
Yes, yes. And you know, you see these old timers that are, you know, 95 years old, still trying to buy a property. It’s like, there’s gotta be something to this. Like, it’s it, you know, it keeps you from getting bored. Right.

Charles:
Okay. So you started doing a lot of work on your properties first. Tell us about your first couple of real estate investments. What they were like, what went wrong and what went right with them?

Maureen:
Yeah. So our first one was kind of like it was like the slowest rehab ever, just, we were young and didn’t have a lot of money. Couldn’t afford a very, you know, put a lot of money into a house. So we bought a fixer-upper. I kinda, I grew up helping this contractor that was like flipping houses way back when it was not a cool thing. And there was no TV involved, but so he bought a house next to my grandfather’s and was flipping that and I used to go and help. And I used to just clean up the job site at night and they paid me, I don’t know, 10 or 20 bucks, which back then I was thrilled to get and I was a teenager. And so I actually learned though, by helping, I learned how to install kitchens, I learned how to do roofs. I could build chimneys. I can. I just, I, I know how to sheet rock do finished carpentry. So I learned all those skills to our very first property was our own home. We just bought that and we fixed it up over a couple of years, but we did all the work ourselves and my husband and I, and sold it. And we ended up splitting a lot off of that. So we basically the lot sold for what we bought the house for. And then we sold the house for about three times what we bought and we’re like, huh, there’s something to this real estate. Like this works pretty well. Like we did that well. And then my my first official multifamily investment was a two family that we bought. We actually literally, and it sounds so cliche, but we literally bought it as a, for sale by owner. We literally, we sat at a Starbucks and we wrote out the terms on a napkin. I remember giving it to my attorneys, like, are you serious worrying the second kidney? But we just agreed that it was just a, it was an awesome contract. And there was no issues. We just closed everybody through what they said they’re going to do. There was no, you know, her nowadays we get so caught up in these contracts and terms and ways out. But that was an awesome thing. And we bought another suit family. And then we get kind of tapped out because we had all our cash going into renovating those four units at the time. And then the market started to tank. So that was a 2007 probably. So we were able to hold those properties. Never lost them, never had any issues with the bank. Cause they, I know that they had the cashflow rule. Number one, your multifamily investment property. It means the cash flow. Like, you know, there’s a bump in the market, you gotta ride that. So, you know, if you’re buying for appreciation, you need to be careful. But because we bought for cash flow and it didn’t make much right then, cause we were trying to improve it and, you know, rent it out for more. And then as the market slipped, we weren’t able to rent it out for more really, but we always maintained it and kept it. And what happened is then coming up into like 2008, 2009, I mean, properties were a quarter of what they, we were paying for them before and stuff, really cash flowed. And by then some of my friends knew what I did. So my people, you know, I got involved with some real estate groups. I didn’t even know that existed when I started, I didn’t know that there were RIAs all over and things like that. So yeah, went to one of those one of those people that I met through that had just, he said, Hey, can I put some money into one of your deals? And so I said, Oh, okay. They said that would work. Cause we can buy it. We can share it. There’s enough cashflow to go around. And so I went on this I just started taking education classes, learning how to deal with private money. Cause I didn’t, I didn’t want to break a lie, you know, back in that recession time, you hear that you know, people, the jail for doing certain things with mortgages and all these short sale issues that I like, I didn’t, I know I didn’t want to go to jail. Right. And I, I didn’t like, I didn’t know what, I didn’t know. No. And that was kind of holding me back, but I really wanted to be able to buy more. So that’s where I kind of came across one of the courses on syndication and understanding how to put a larger property together. So that was kind of like my first just like the, he gets through the crack a little bit like, Oh, this is a thing, like, what is that? And so we went and we built up does the smaller multis I had about 30 units before I just kind of hit this wall. We would buy some, sell some things like that. My husband helped my kids help. It was my brother helped a lot too. And I just hit this wall, man. I got burnt out. We were self managing self renovating. And then an opportunity came from my job. They had offered packages and I mean, at these telecom communication comes, people are there until they’re they used to call it the dinosaur grade cause he was there for like 60 years. It’s like, how what’s your seniority? I’ve been her 58 years. Like, Oh my gosh. But anyways, I was there 12 years and I’m like, I want to take the package. Like I want to leave. Like I, I remember driving to work one day and I said, I’m not going to swerve. If a car comes towards me, like I’m not swerving. Like I just, I just couldn’t keep going in there. It was just killing me. And I was missing my family too. Cause I was working in the off hours and it was a rough time, but I ended up taking the package and just putting full-time full-time into finding like a hundred plus size apartment complexes. So that’s fine.

Charles:
Awesome. So what’s your firm’s current acquisition criteria?

Maureen:
So our firm’s current acquisition criteria is we like deals that make money. That’s what I tell brokers do. So we, we really can deal with a spectrum of things. I always tell people like what’s a good deal for my, or a great opportunity for my team may not be a good opportunity for your team. So I do have the construction background. Our team has insurance background experts. So we could deal with that. You know, somebody had a fire, we know how to deal with those types of things. The biggest renovation I did was we bought a 280 unit property that was 40% occupied. So there were 200 down units and these weren’t just like, people move out. You just, these were down here. It’s like there was like wold growing. There was broken windows. There was like, it was atrocious. So somebody from overseas that owned it and just never put money into it, we got a good deal on it. But anyway, that one, it took about two years to renovate, but we ended up sticking the, to the schedule somehow. I tell people, I said, I’m really 20 years old in that one deal, HB 20 years looked like this. But but that was a, quite a B. So we don’t mind the really dirty Harry rehabs, we call it. And then we also have bought well cared for properties that were meticulously maintained. My favorite deal is something that somebody built back in the eighties or nineties, they’ve held onto it all this time. They’re looking to retire and we could just, we make, we make a good amount on those because you go in and you you know, you’d have more efficient operations and you raise rents and there’s a lot of opportunity in deals like that. I find. Yeah.

Charles:
When you’re always, when you’re finding properties that have been owned especially over a decade, the current owners have become pretty comfortable with how it runs and they’re comfortable. They, you know, there’s not huge increases in their insurance or in their property taxes or their management. So they keep everything minimal hassle, but it’s not maximizing the, you know, the assets value. So that’s interesting when you find that the mismanagement,

Maureen:
Well, they want it, it isn’t that it’s mismanaged, I say necessarily, but it’s just not as efficient as it could be because they just want to make it smooth. Right. They don’t, we actually bought one about a year ago now and it was he was like 82% and we kept the team for a little while and we noticed they weren’t getting above 82%, even though we were, but they’re just used to, well, this is the way your property should run. Right. And we’re like, no. So we you know, so it’s just funny. It’s just a mindset. It’s like, they just want a smooth, like just no trouble, just smooth. Don’t have rent rights, don’t raise the rent, just have everything quiet and smooth, like is kind of the mentality I iPhone.

Charles:
So you started a property management company in the construction company to handle heavy rehabs, which you just talked about that 200 down units. Why did you switch from third-party management to an in-house management system that you have?

Maureen:
So we went through Four management companies before. I just, I just realized like, it’s so much energy. Like I noticed I was spending so much time, like trying to find the errors and where did they miss? And because I just didn’t have the confidence that they knew what they were doing. And I never had issues with the owners of the management company. I think they’re always well-intended and you know, they they’re trying to do the best for you. It’s it’s always like this, like like regional layer that like, you know, you get somebody on your property that is working well, and maybe you work with them a little bit or they kind of know what you want, like a manager and then one day she’d just be gone. I’m like, where’s so-and-so. And they’re like, well, we needed her at a different property on the portfolio. I’m like, huh. Like, and that kept happening. And then you know, so they were taking the people that we would get used to. And for me, this business is a lot about the people, because a good manager will make or break. You can have a great property and you put a manager with a bad attitude in there and she will destroy that property. Or, or you take a really bad property with a great manager. And that thing will just start singing. Like it’s, it’s wonderful. So it really is about the people. And that was really, I, that’s probably one of the biggest things that got me is just, they would take the people away. Like as soon as we get all, you know, kind of, there’s like a harmony when you have the right team on the right property, there’s like something magical that happens there. And that kept getting disrupted. So, you know, I said, instead of spending all this energy, like fighting with the manager, like the management company and having them, like I needed certain reports, certain ways and things like that. So I could understand from a distance what was happening as you know, let’s just like, I’d rather, instead of like fighting, let’s push it down. So we had our, you know, we kind of get our own processes and procedures and push them down is what we started off doing. And that was the intent of it is just, it really wasn’t for like, if you’re going to do it to make money, I don’t know if it’s a great idea. It’s more for a control of it. And I could have the people stay there and I could have, you know, my people and understand, but so it really is just a control. It’s it’s one, to me, it was less risky having that in-house because I can control it. And the same thing with the construction company, that large rehab we talked about, they I had four GCs fours, like my number, I guess, where I hit the wall. So for GCs, I had to fire off that job. And I mean, at one point I had about 10 people from Connecticut that used to help me rehab way back. I had family members, my daughter came down, that was her introduction into the business. One day she, I had to go home at one point and she was running 70 subs a day or showing up there and she was on with controlling them. And, you know, she says very proud of her for handling that, but it’s it was a beast to make sure it all ran, you know, cause you know, all contractors there. Yeah. Somebody told me, contractors are contractors for a reason for 90% of them. There’s, there’s so reason they don’t have normal jobs. I always remember that when I get frustrated with a contractor there’s I love contractors. There’s very good contractors out there. So not dissing on the contractors, but sometimes they’re hard to manage like herding cats a little bit.

Charles:
It’s awesome that you have a great prop project manager though when you’re doing this so that you can manage all of that. I mean, that’s so important and that’s also something too that you want to kinda, I, we always take that into our hands. We’re not going to have the property management company handle that either. I mean, that’s something that you want to do yourself to make sure that you’re actually speaking to the contractors that you’re going to be hiring and then you can kind of, you’re not going through a third party telling you, Oh, this contractor should be fine or anything like this. So that’s a, how many humans did you have when you started your own property management company?

Maureen:
I think we had about 1600, I want to say. So it wasn’t, it wasn’t that many but it was enough for a regional and so actually what we did during the COVID time I don’t, well, what we did is I had just realized that we needed more, like we need more checks and balances. We needed more marketing expertise. We needed more focus on HR, things like that. And so I ended up like kind of shutting, I wouldn’t say shutting down, but I took my property management company and I joined with a woman who was leaving when she managed over 10,000 units. And I said, let’s do this together. We formed the JV. So she handles the third party now. And that way my properties get that corporate support, that’s kind of paid for by the third-party management. And that’s been growing just wicked fast. That’s been growing very quickly and that’s a big load off mine cause they kind of came with all their processes and procedures for like a 10,000 unit portfolio where we were struggling with growth. Cause it’s like, you know, you kind of have all the balls in the air all the time and you know, then you, you add, we were, we grew so fast in 2019, we bought 1400 units. So we just, we kept growing and growing and growing and you know, there’s, there’s just limited size. Like you hire the people. Do you wait for the business? It’s, you know, always a kind of, a little bit of a constraint there and yeah. Anyway, just questioning that

Speaker 2:
1600 units though. It gives you a lot of scale though, which is great because I mean you couldn’t, if you did it earlier, it probably wouldn’t make financial sense, even though you’d have the more control over some of the some of the properties and some of the projects that you’re working on.

Maureen:
Yeah. And I think it depends what state you’re operating into. There’s a lot more HR issues in some States. And then we moved into Indiana and Indiana had a heavier burden on kind of HR people and things like that. And you know, we operate out of Georgia and Tennessee. There are certain things, Texas there’s different things. So it’s when you start going across different States too, you start to really need someone that can focus on making sure you’re following the rules and doing the right things and giving the right notices to the right people and all that stuff.

Charles:
So what types of teams and systems do you have in place to handle your renovations and your management? Obviously you brought in a JV partner to handle a lot of, a lot of the management aspects of it. What kind of teams? So you have a, you can, you have an overview of what’s going on with different renovation projects and with your different properties that you’re managing?

Maureen:
We do. I ended up it took a long time to get that right person in to lead the consult. I have someone that basically runs the construction company for me now as well. And so he’s, his name is Brian. He’s doing a great job. And so he kind of oversees the Capitol. He keeps track, we use a sauna to actually track all of our project management. We do have the fancier E build system and stuff, but we really don’t use it that much. Like we in a sauna, we’re able to track that and manage that. And he’s, he has a great project management experience and insurance background and everything. So he he’s just been awesome. So what I’ve learned in this business too, is we can’t be good at everything and we can’t run everything. So you find the right people and just go with them. And now there’s like a team of us. We’re a force when we show up, we can accomplish anything. Right. so we, we use the sauna again for that. I mean, we’re using a real page now when we switched property management systems, we were, we’re using Yardi. We use real page trying to think you know, he has exact domain and stuff like that when we’re doing insurance or any kind of insurance work or if we are you know, just trying to break down a job. But yeah, I mean, that’s a, nothing magical that everybody doesn’t have access to, you know, it’s, it’s just a matter of using it, putting the right information in, and then in the asset management company too, I have a partner, William, who’s been awesome. He’s analyst background. And so he’s very good at keeping things, organized, keeping teams on track. So you really need that, those key people in each in each, each area. Yeah.

Charles:
We utilize a sauna as well, which is great. I mean, that’s, we use that in two different businesses and it’s fantastic. It’s very simple to use, very simple to learn. And most people in are familiar with it, which makes the learning curve not as bad. So

Maureen:
Yeah, it’s pretty friendly. And you know, you can, you can kind of just figure it out. I’m probably one of the worst violators of keeping my things up, so, but that’s okay.

Charles:
So let’s say last, so the last 12 months we’ve been in COVID how did your, how has your business change as in acquisitions and also management? Like what has changed from your business in 2020, from 2019 because of COVID?

Maureen:
Well, so I did Lisa, we kind of shut down what we had as a property management company and joined a new one called Vista near living is the name of it, but that’s the new one that we formed. So that, and it was kind of good because without that pause of, cause we did take a pause from acquisitions, you know, we were closing for a couple months, we had four deals closing in one month acquisitions and that was you know, when we’re looking to acquire and we’re like, Oh, there’s four really good deals. Like we let’s take the best one. I’m like, no, like, cause they were getting scarcer. I’m like, we need to take them off. So, so, and they’re like, well we can’t close four at once. I’m like we can close four at once. And I said just think how easy it’s going to be to close one or two now. And really with our team, like nobody even blinks anymore. Like when we have closings for one or two at once. So but anyway, so that was 2019 and then 2020 came along and there was just this pause. We actually had something under contract in March that we didn’t close until gosh, November, because we couldn’t get in for inspections, the banks like wanted to send people out for certain things. And I wanted to see it, like I refuse to buy a property unless we can get in the majority of the units. So, and we just, they didn’t want to allow us, but it worked out well, you know, with that seller. So we had that one deal, basically we closed in 2020. But with that pause, it really gets you to see I think, you know, work on those things that you always talked about with your team working on, right? How can we be better at this? Where could we be more efficient? That’s where it really got a Sonic kicking for not just the construction, but for really all aspects of the asset management, property management. And we, we got to finally take a focus on like building. So with the prices now with the value add space is kind of like where we operate primarily with what they’re paying in some of these markets we want to get into, we realize it’s better to feel like we’re just a couple of 10 or 20, sometimes 30,000 more door. You can have a brand new asset. And so we got into building, we actually are building two in Texas right now, 166 units and 320 units. So that, that was nice to be like, think, okay, yeah, we can do this and kind of make that shift. So we’re still buying value add when it comes across, but we’re actually looking at maybe selling some of the portfolio right now because of the prices and you know, what people want to buy them for. We’re hitting our three and five-year projections early and you know, why not? It takes a little bit of risk off the table. And you know, we’ve met our investor projections, you know, we we’ve kind of accomplished our goal just faster than we were planning. So we may kind of take some off, especially in the markets like that Atlanta that are just so hot right now.

Charles:
Yeah. And wrench didn’t really rents didn’t really pull back at all during COVID in Atlanta, they actually went higher. Right.

Maureen:
And yeah, they were, they were it was, it was insane and, you know knock on wood, but it was a Testament to the team because I had two properties that took a little bit of a hit, but like we were still a hundred percent collected on a couple of properties. Like I think July and August, we started maybe getting one or two people, but these are 200 unit properties that are a hundred percent collected, but it was really like pre-framing or pre-framing the tenants saying, Hey yeah. You know, whoever, if you pay by the first, you can get in a drawing for a TV or pay it early or whatever we were doing. But it just let them know that cause people would literally ask, do I have to pay rent? You know, the managers would say, cause the nuisance, I don’t have to pay rent. And they’re like, no, no, no, you have to pay rent. So somebody else to get a little, Trump’s going to pay my rent, this and our manager, like she calls me and tells me these crazy things. I was like, no, no, Trump’s not going to pay her sick. Cause he know where he live. So the news is like putting, I think a lot of people wouldn’t be paying, there’d probably be very little issue if the news wasn’t kind of thing like they were. But but anyway that, that was a, and that was a wake up call and we had some people we worked with and you know, some people that we just got out too, you know, you can’t support everybody. So when they don’t pay, they have to leave. So that was just interesting. But again, sticking to the processes, the procedures, and it really made the great managers like shine, the people that really had control over their properties.

Charles:
Yeah. Because he sent out who actually did the background checks on their tenants, number one and then number and then who like verified the you know, their pay stubs and everything like that. And then number two, like we had the same thing gift cards to Walmart you know, the drawing or, you know, the drawing was a big thing too. These are, these are all great things that came out. We had you guys probably have it as well. We sent out like who was hiring where you could go for help, all that kind of stuff. It was like a whole pamphlet and you know, everything like that. So that was a big thing too, that if you have good management that provides that you can really minimize, I mean, some of my properties, like the small portfolio, having Connecticut, I’ve never had as good of collections as we have now. And like minimal turnover, no one’s leaving. And so it’s very good. And and our assets in like Florida are doing really well too. So it’s amazing how we, we had no idea what was going happen 12 months ago. And now it’s you kind of see what’s happening, but what do you see for the next 12 to 24 months Maureen?

Maureen:
You know, I don’t know, it’s, it’s a funky time because some things don’t make sense that we’re seeing in the market. Right. Which is one of the red flags that we always look for. It’s like, that is not making sense right now. So so you know, we aren’t buying as aggressively as that. Like I refuse to pay, you know, a book, there was a property. Oh my gosh. Like when we started in Atlanta, we bought it for 24, a door. We sold it two years later for 50 a door. So we crushed it. We made actually two deals like that happened in Atlanta, right. Near each other. So sold them both for double. Then those people that bought them from us, sold them for 70 a door and now they’re trading for 90 a door and I’m just like, no way, like that is insane to me. But again, who knows, they could double again. Right. They could be, we could be saying, wow, those are 200 a door now. I mean, you just don’t know. And we don’t have crystal balls, but it makes me a little nervous that the government is stepping in so much. I mean, for us it’s, Oh, it’s great. These tenants that had fallen behind, they can catch up. That’s great. But it’s almost like they’re training them to not, not pay, like just wait it out, they’ll come in and save you. Like, we don’t want our tenants with that. Like, you know, it’s like what’s going to happen. They, and we haven’t seen really the, the like the fallout or the really the, the money calm yet that they were promising during this last vote on like the stimulus or whatever. So like the properties haven’t seen it, but I’m concerned. Like what if people really do get used to just, you know, hanging out for the next 12 months, what’s going to happen in 12 months then, you know, so that’s, that’s what

Charles:
It really depends on the state you’re in, because in the Southeast is completely different from where we’re from in Connecticut, but on Connecticut and one of their law websites, it says how to avoid eviction. And it says, just make sure what you owe your landlord. Isn’t more than six months, not pay your rent, but just make sure that your outstanding balance is less than six months of rent. And you’re like, well, that doesn’t, you know, I mean, look, what kind of rationales that, leave it to Connecticut and with something like that, but it’s amazing where the state, depending on if the state has your back or not, depending on what’s happening, it’s so important that when you’re choosing your target markets, that you’re, you’re finding landlord friendly States, and then you’re obviously researching markets within that, but it’s, it makes all the difference, especially now. I mean, there’s going to be, I think our federal moratorium is going to go all the way through 2021. And I, who knows for States. I mean, some of these really tenant friendly States might go, you know, another year plus. So who knows? I mean,

Maureen:
And they are evicting people too. I think that’s something else that people don’t understand is they think they’re not going to get evicted, but no, no, no, you, you will get evicted if you don’t pay or make an effort to pay. And you know, and what you said about the States and it’s even the County, there’s such a difference in counties and the way they treated, especially like the Atlanta area I won’t buy in certain counties just won’t even do it because, you know, not only with permits are just such a hassle, but you know, now you’re getting all these multi-family properties that, you know, if they weren’t on collections, they would have slipped. Like you have to stay on that to make it happen. And so I do think there’ll be some fall out, but I think it will be that 12 to 18 months. You know, some people were buying things with great plans and never putting a dime into them, never executing on the plans, just with appreciation or cap rate, pull back you know, reduction that it would, they were just looking like superheroes, right? So there was a lot of really smart people and multifamily over the last few years. But I think that this may catch some of it, some of that too. The people that were kind of little lackadaisical or just riding the wave may, this may be the start of a little bit of that I know will tells are, you know, there’s a lot of hotels coming up right now. A lot of restaurants won’t recover. So in that kind of real estate, there’s definitely going to be opportunities soon, but you know, my friends in those other types of real estate or jealous of me being in multifamily, cause it is the best I think, of the commercial, right?

Charles:
Yeah. I, I definitely, I think it’s always a solid asset class if if purchased correctly, but as we are, what you’re saying about stuff getting expensive and just a short tangent, like when I was buying in like a 2010 or 2009, and then it got to like 2011, I was like, Oh wow, it’s expensive. You know what I mean? Because you’re comparing the last 24 months and you’re like, well, this is, you know, never thinking prices would ever get back to what they were for a long time in Oh seven, right? Or, Oh six. So you’re like, wow, this is expensive. It’s like, these are, you know, this is twice what it was two years ago, stuff like this. And, but I mean, it’s just going that way, but I think that asset prices as the money’s cheap and as we just can’t stop printing money, I mean, it just, people have want to put their money somewhere. And that’s another thing too, is that chasing returns, but also people I think are going to accept lower returns for just having something that’s. And I think real estate is one of the best inflation hedges. So it’s, and I think a lot of other people that know that, so

Maureen:
Absolutely because yeah, your mortgage payment isn’t going to change. So if you buy right now, as long as it was kind of back to that way, back when we started with the, well, when I started with a smaller duplexes, we like, we, we rode through that market transition that cycle because we bought on it. It has to make money. Like the deal has to make money. Otherwise they home and stay in bed. Right. We don’t get up and do all this just for fun. But so like if you buy something, we fundamentally don’t make money. And when you’re operating in that, like B and C space do like people will rent, they always need a place to rent. That’s something I learned way back when with the three family I had I had different generations of the same family living in the entire building. So and I told them one day I probably just left the seminar and I was just feeling generous. I like, you know, I said, you guys can put your money together and you can buy something like this yourself. And you could like, your rent would be like in half, I think I made 12 or 1500 bucks a month off of that, just that one property. And it looked at me and they go morning and they go, you’re so crazy. Like we can’t buy a house and I’m like, no, you can, like, I know what their background is. I know what their, you know, what they made and all this stuff. I’m like, no, you guys can. And they’re like, no, we can’t worry. Knock it off. Like, ah, and it just, it really made me realize that some people just rent, rent their whole life. Their parents rented, their grandparents rented. They’re going to rent and their kids are going to rent. So if you can have a rental property where people working at the grocery store or home Depot or a bank, right. It’s just like normal average jobs. Like you’re going to have customers as long as you run it decent, keep it clean. You’ll stay full if you know, so it’s, I think it’s these class, a people AA that are pushing, pushing, pushing, they may get stuck really low down. See, like I hate having properties and I don’t want to have a properties. As soon as somebody gets two nickels together. They just want to get out all the time because they never really, like, there’s never like a synergy there. They never kind of humming along. So that BNC, like you will always have clients they’re not going to

Charles:
Exactly. And the thing too is with that, it’s funny. I have I’ve one tenant I rented to, I was actually self-managing in new Britain at the time, my own properties. And they’ve just ten-year anniversary at one of my properties, my longest tenant ever. And three, a three family and new the nicest people ever. And they’re perfectly happy with the annual rent increase of a, you know, minimal, I mean, we’re in central Connecticut and stuff like that, but it’s, it is what it is. I mean like solid tenants. And like you said, some people just don’t want to, don’t want to own, and they’re all set where they are. And like you said, there’s a synergy of homeowners, but where you really make your money is when you’re can minimize that turnover. And maybe not 10 years, but two or three years, it makes such a difference. If you can eke out another year over your tenants on average, staying at your property versus leaving. I mean, it goes right to the NOI.

Maureen:
Well, with those, with those size properties too, the way I always viewed it is we would buy, say a three family. And it’s almost like a numbers game, like where you’re trying to get the marble to fit. It’s like the tenants come in, it’s like two chips that also put one lacks in, okay. That is going to stay like, and then you’re like messing all these other two units where they’re leaving every year and three it’s like all of a sudden, another one lacks and mean when you can get them all locked in, where they just come along every year, as they get to know each other, there’s no problems. It’s just, it’s a beautiful thing.

Maureen:
Especially in those properties when there’s not enough parking and everything like that. And there’s snow and someone’s got parked in the street, but someone’s find parking on the street or whatever it is. And once that all gets as like a family, then it’s it happens. But so what do you think are the main factors that have contributed your success Maureen?

Speaker 3:
I guess just I’m always curious about how I can do better, how I can make things better, how I can you know, I enjoy working with people too. I don’t, I don’t want to just do this myself. So I enjoy getting the team and seeing them grow and be successful as well. That’s an important part. And I really like fills up my soul when I take one of these properties that have been neglected because you see these people there, especially the older people and like the people say, well, if they didn’t want to live there, they could just move. And no, a lot of people can’t just move. Some of these older people have, I’ve had tenants that they’d been there since 1978 in this place we bought like, literally they were like, just as when it was built, I had a few properties. Like that was crazy. So I like coming in and actually making the property nice. Cause it really doesn’t take more money to make sure the paint job is correct or not a hideous color and make sure the windows aren’t broken and, you know, make sure it’s clean in the morning. Like it’s just managing the team. And but I love that. It said it’s almost like clouds lifting over a property when it’s like clean and sparkly again, and people are happy and like it’s alive again, you know, instead of this place that nobody wants to be. So I, I looked for those places that people run from so I can do that. And I really enjoy that. I think my team enjoys that too. And also I said, things don’t always turn out the way you think they’re going to turn out, but you just keep working with it. You just keep showing up, you just figure it out until you figure it out. Like, what did, what do we have to do? I used to tell people that like, this is going to work. If I have to go stand out on the corner with a hot dog suit and frigging rank units myself, like I will rent parking spaces. That’s what I used to tell them. I can see how it talks. You can rent parking spaces. I will make this sucker work. And it’s just that never quit kind of thing. It’s like, well, that didn’t work. Let’s just keep going. And so that’s been helping build. And again, just remembering it’s about the people when you get those really good people. Like even if you don’t have a position for them in your company, you make one like, because those people will will carry you through anything you need and help out and always show up you know, make sure the team has a good synergy. And that’s it. And just never taking shortcuts too. I think, I think we get tempted a lot, especially as we get frustrated sometimes when we’re starting. We see people sometimes buy properties by, by more than us or wow. Like I, you know, we’re, we both started the same time and this guy is here and this girl’s here, but it doesn’t matter. Like just make sure your property makes sense, like verify, verify, verify everything. And so those are kind of things that I think helped my success. So not only the right people coming in at the right time. But just being really careful if something sounds too good to be true, like it probably it, so, you know, be careful

Charles:
And it, it makes the first property I bought there was a guy that was in one of the units for like 30 years. And the prior the the guy was buying it from was like, listen, I was told from my previous owner because he had owned it for like 15 years that this guy like take care of this guy. He’s like all this kind of stuff. He’s like, if you want to, like, cause he knew we were going to go in there and we were like, and renovate it. And he’s like, I’ll move him out. I have a place for him at the same rent. I was like, you are really, that’s a really nice thing to do. And they like moved them out and outside. I was like, I w I was completely upfront when I was like, you know, and they’re like, Oh, he was fixing this. Like, it was so low. And I was like, yeah, you know, I told him beginning, like when we started talking about the property, I was like, this is what we’re going to do. And he’s like, okay, I’m going to move this guy. And he was an old like Polish con cement contractor. And he had his old pickup truck. And I was like, sorry, I’m like, this is what we’re doing. This is what we’ve, you know, our plan was. And they’re like, and you know, Frank’s going to take, he’s moving into this place. It’s a nicer place, all this kind of stuff. And the guy was really cool with it. He had a phone on the wall, and I remember the last thing before I wrap it up, that he was still renting from the phone company. And I was like, seriously, you’re sending in, like, you’re sending it. So, I mean, it was like, you’re sending in a monthly, a check to the phone company for this phone rotary phone that you have on the wall. Right.

Maureen:
So funny, that’s the one my grandfather died. We, we realized that he had been paying for a phone for like 60 years. They were paying for printing on this red phone with the Rover. I know exactly what you’re talking about. That’s so funny,

Charles:
But it’s just interesting how people the relationships, cause I still have relationships with that guy that I bought the property from. And it’s just like, Oh, you’re, you’re just an up, you know, you’re, you’re in here for the long haul and you want to be honest in you 15 years ago that guy’s probably passed away that you bought the house from, but you’re still honoring your you know, what you told him a verbal agreement about one of the tenants that he really valued. So if you do that long enough, I mean, I’m talking about the guy 25 years later, so it’s amazing. So

Maureen:
That’s awesome. And I had, I had a 10 and a short sale that I inherited his mom. His mom was his tenant in the property and a two family. And so with the short sale, she came with it as a tenant and she was the nicest lady ever. And she says, thank you so much. I’m so glad you bought this because my son wasn’t taking good care of it. So she ended up being great, but I was like inheriting somebody’s mom. The seller’s mom has my top stories.

Charles:
So how can our listeners learn more about you and your business?

Maureen:
So our website is www dot Four, the number four, and then M R E i.com. So www.4mrei.com. And there’s a contact us where you know, they’ll, it’ll be sent through the thing and it’ll go to me or go to whoever is appropriate for it. So and then there’s some information on the website about what we do and things like that.

Charles:
Okay. Yeah. And I know have a, some of your social links and some of your other contact information. So I will put that into the show notes and thanks so much for being on today and enjoy the rest of your week.

Maureen:
Thank you. It was great. Great chatting with you. Thanks Charles.

Charles:
Bye bye.

Maureen:
Bye 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 Maureen Miles

Maureen Miles brings over 25 years of real estate experience to the firm she founded and is the acting managing partner of, 4M Capital, a fast-growing multifamily, private equity investment firm. In the last 5 years, under 4M Capital, she has raised over $75M in private equity and purchased over 3000 multifamily units.  Her diverse background and experience include everything from a licensed Realtor to a licensed General Contractor. She also has extensive experience in renovation / capital improvements, insurance, and tax and title work.

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