Real estate has created wealth for many, many people. When done right, it can completely change your life. With so many avenues to invest in real estate, however, it can be crucial to find a niche that allows you to be successful.

Liz Faircloth, co-creator of The Real Estate InvestHER, joins Adam Schroeder and Zach Lemaster to discuss her real estate journey, how she was able to incorporate her vision with her investing, and why she’s built the community she has.

Learn more about Liz and InvestHER by clicking HERE

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Transcript:

Adam
Hey, Rent To Retires, it’s Adam Schroeder here for another episode. And I am once again joined by the founder and CEO of Rent To Retirement, Zach Lemaster. And today we have a special guest with us. She is the co-founder of The Real Estate InvestHER Community, we had one of her partners on Andresa, a little while back, go back and listen to that podcast. But we said you know what, we need to talk to Liz too, because she’s done a lot of cool stuff in real estate. So Liz, thanks for joining us today.

Liz
Thank you, Adam. And Zach. Appreciate having me on today.

Adam
Yeah, absolutely. So tell us a little bit of your story. I mean, you I was reading your bio on the real estate investor.com website and interesting start to the journey. And you’ve been doing it for a while. So tell us about your journey and kind of what caused you to create The Real Estate InvestHER Community.

Liz
Sure. Nice, windy roads. So I’ll try to be as concise as I can. But you know, it’s funny, I got involved in real estate investing in my 20s. And I was going to school for social work, actually want to be wanted to be a counselor and open my own practice. I was getting my master’s in social theory and social work. And while I was there, actually, interestingly enough, took a class on entrepreneurship. And everyone’s like, why are you taking a class on entrepreneurship, you’re, you’re gonna be a social worker, right. So I did that and actually created a nonprofit. And it was a woman’s center. And it was actually empowering women that had mental illness, you know, whether it’s mental illness or some sort of, you know, substance abuse, or substance addiction, and, and then I put that on the shelf for like, 20 years. And then lo and behold, I agreed and create that exactly with invest her. But our mission is to empower women to live a financially free and balanced life. So I just say that because you know, my kind of passion for supporting women has always been around for a good 20 years. So long story short, I got to invest started investing with my husband in 2004. And while I was in school, and writing this business plan, my brother in law handed me Rich Dad, Poor Dad, so you have to read this. And so I was like, okay, and I did and we had no one in my family who invested we, you know, came from a great middle class family, but it wasn’t like my parents had all this money laying around to to either lend to us or give to us, we didn’t have much. So we bought our first duplex, my father loaned us 30 30,000, we bought a duplex in our outside of Philadelphia, Roxboro. And duck on our start, me and my husband, I was just at that point, starting a different career actually more in corporate. And he was actually an engineer at the time. And that’s what we how we got going. And then he quit his job with one rental, which was kind of funny, because you know, what are you gonna do with one friend, so we didn’t, we didn’t do the path where people transition after they’ve been making enough to kind of replace their income, we did it the other way, we’re like, Screw it, you will do will do fine. Just quit your job. And just yeah, you know, you’re in your 20s, you’re naive, you’re green, you don’t really know much. So you take a little more risk. And that kind of started our trajectory into investing. And then, you know, 17 years later, we have properties in four states, and mostly on the multifamily side. So it’s more syndicating large value add multifamily in CB areas in, you know, in the east coast. So yeah, that’s kind of how I got started, what we’re involved in now and then invest her was born out of getting together with on Jessa. We were partnering on deals, flips, new construction, and we both be like, where are the other women in this business? You know, there’s just we don’t we go to events, we go to breaches. And there’s always like, you felt like you’re the only woman, hence the book. And we said, Would it be cool to create a community where women can really support each other in this business and this, you know, you know, investing, and that’s what we started our podcast and started a Facebook community. And we have meetups across the country. And we’re really all about creating a safe environment for women to give and get the support they need. So they can grow their wealth, you know, and do it one property at a time.

Adam
Yeah, remember in the interview with Andresa, so she talked about like going to the construction sites, and people not even knowing what to do with her whenever she showed up and then being like, No, I’m the one who writes your checks. You need to be..

Zach
I think she said she showed, she showed up in high heels, you know, and like walking through the construction site, but you know, she is the boss, so..

Liz
There’s a lot of pieces to that, you know, and it’s really about having the confidence right, so many women, you know, may not may or may not have the confidence to you know, and it’s interesting because research research shows women financially And from an investing, holistic investing perspective actually outperform men, you know, on an investing perspective, but they don’t do it as much as them. And so that’s the piece that we’re trying to shift the kind of the trajectory for women saying, because they, you know, for whatever reason, fear, lack of knowledge, lack of fill in the blank. Women, typically a lot of women don’t do things until they know what they’re doing. So they’re more conservative and more cautious. A lot of women, and not everyone, I’m being kind of general generalizing a little bit. But once they do it, they actually make the right calls, or they get involved with the right projects, we see that. So it’s just getting them to do it. Because we know, once they do, they actually do great, interesting. So. So that’s kind of what we’ve created the community to help with and get the support and the knowledge and the camaraderie to do.

Zach
I love that. And I love the community you’ve built lives in your story. I mean, into your in your point about the meticulousness of women investing in the space, my wife will definitely agree with that statement in the fact that sometimes I’ve been like, ready fire aim, and she can is my sounding board to make us you know, make sure that we’re on the right track. But this has been a really cool trajectory for you. Because this is a scenario where you had this passion, and you’re on this path, and then put that to the wayside to you know, focus mainly on real estate. But now that’s coming full circle. And now you’re aligning that with real estate. And I just love that story. And I think that will resonate with a lot of people. I want to dive a little bit deeper into, you know, why real estate, you read the purple Bible, you know, Saki we claim that from another guest we had, but I love that term. But I mean, what, what was it about real estate? Why such kind of a quick flip about? You know, that’s what we need to focus on, you guys had one rental and you went all in with that duplex and decided this, this is it, this is what we’re going to focus on? I mean, can you talk a little bit more just about like the why behind that?

Liz
We didn’t read “Rich Dad, Poor Dad.” And just by the, by the property, I actually left out a couple of details there. You know, what, what we started to do, and, you know, I started to take as many classes and courses I could and boot camps at the time. And the local RIA, you know, the local RIA, you know, meeting your local RIA meetings group, and we just start to really immerse ourselves in real estate and learning and, and then, you know, we started to say, what do we want from our lives. So my husband and I, and anything I’ve gotten involved, we do a lot of kind of like that self development work. And so we created this vision we had for ourselves, and we what do we want, we’re in our 20s, you know, and we really wanted to create a lifestyle that we wanted to live, you know, we really wanted to create, you know, something and make a difference. We really wanted to shift, being able to see an asset you’re buying and make it better improve the community, not just improve the community, you’re improving the property. So we’ve always been in value add, that’s always been our, our business, but real real value, you know, which is not for the faint of heart, typically. So yeah, I think having that vision having this like big, why, for ourselves, and we really wanted to make a difference in the world, that’s very, you know, could sound kind of fuzzy and big when you’re in your 20s. But him and I, on weekends, we go to RIA meetings, and then we do some planning, like we’re just two unique 20 Something year olds that most most 20 Somethings who are dating, about to start a family or get married, we’re not doing. And so we just kind of, you know, beat to our own drum, and kept reading, kept experiencing and learning and thought, really start to learn more and more about the power of your real estate. And we didn’t have anyone we knew that owned a lot of properties. But the people that would speak at these RIA meetings and the books we’d read, and prior to like podcasts, and all that jazz, it just seemed like a phenomenal like way to, you know, build your wealth and create something that was bigger than you. And we love the idea of transforming property into something that was useful and helpful and kind of highest and best use. And it’s hard to do that with some other assets or some other businesses. So kind of fell in our lap. I mean, if it was another business, like, I don’t know where we’d be be, we actually looked at a limo business. Buying a limo, so random, but I’m buying a business like right when we were starting investing, and we’re like, Where would we be now for limo business? Who knows? You know? So we did.

Adam
You would’ve founded Uber. Uber Limo.

Liz
It was so random, you know, now that I think about I’m so glad that we didn’t buy it or get involved in that business. But who knows, right? You don’t know. But that’s why real estate that’s why we kind of went all in and saw this as a vehicle to replace our incomes and build a lifestyle for ourselves.

Zach
Real estate is a fantastic avenue. It’s one of the oldest investing avenues and it’s a human necessity. And I love the translation you’ve had here where you identified real estate to be able to create the lifestyle that you desire, but then take it to the next level and make an impact. both with the people’s lives that are renting the houses, right and providing sustainable housing for them. And then also building this investor community, which we didn’t want to dive into. Because I think there’s a lot of, you know, female audience that that are part of our organization that would really benefit from the value that you offer in that community. And historically, this has really been a male dominated field tool to a lot of degrees, as well as a lot of places in business. And so it’s really exciting to see, you know, women coming out and being leaders in the industry, and largely in part to a lot of the support that you’re providing. Liz, can we talk a little bit more on your story about Okay, first duplex? I mean, sure, you know, we missed a lot in there too fast forward to where you’re at today with this great business. I mean, what what was next after that first duplex?

Adam
She went from one duplex to 17, right?

Liz
you know, so funny because we when we got started, so at that point, we got married 2005. And we moved to New Jersey, because that was in Philadelphia, Matt, my husband, Matt was living there, when we bought our house together, but we bought like a townhome, row home, and a little town called Bordentown, New Jersey. And we were very close to Trenton, New Jersey. So for for the first eight years, we only invested eight, within 30 minutes of our house, like that was the rule, do not invest more than 30 minutes, we broken that rule. And quite honestly, we don’t invest at all within 30 minutes. That’s like, we do the opposite. Right. But, you know, that became, you know, as you expand your business, you expand your market, you expand what you’re looking for, right? But again, it served us well. And so we got really focused on, you know, what do we want our business to look like? What do we want to do? And so we kind of chose Trenton, New Jersey, which, for those listening who don’t know, it’s a capital of New Jersey, and a good 12 years ago, which is still happening there, you know, to city figuring itself out in New Jersey, you know, there’s been a lot of industry that’s left, that a lot of people who have left a lot of dilapidated homes, and we just saw it as an opportunity now connecting my interest in social work to really make a difference. We could afford the properties, which you know, is always a, you know, how do you get in and especially in a high tax state, be afforded we could afford your, you know, New Jersey, and there’s Trenton properties, and there was tons of opportunity to to buy dilapidated properties and make them better. So that’s where we got our start. I mean, you know, you talk about challenges, right? And in so many investing podcasts, like, what kind of markets to start and what kind of market analysis are you doing? And that was our market analysis, you know, can we afford it? Is it close to home, and could make a difference? Honestly, now, our, our analysis is a little deeper, you know, you’d hope it is 17 years later. But you know, that served us and we got really good at buying, dilapidated Maltese, renovating them. And, and, you know, choosing the neighborhoods we wanted to be in, we bought a commercial property, the challenge that we found when we started and that we kind of got our kind of, you know, the first 567 years even honestly, was that we actually got involved in different snitches too quickly. So we actually found success with finding dilapidated buildings in Trenton, that we had, like someone present us with a commercial deal. purely commercial, all small business center, or, you know, purely, you know, retail space. 10,000 square feet, no laughs right. So, I mean, that’s not something that most people start their first commercial property with. And then we so we got, you know, we got involved with a few different angles, raw land, I mean, I can make the list flipping, and we were a little scattered, we’re a little dissected on our focus, and that stifled us financially stifle those from a business growth perspective. And we were just figuring it out for many years of like, what are we really good at. And as we took a step backward, like, what we’ve done well with small Maltese, renovating them, like the classic burr strategy, you know, and then let’s, let’s do that over and over again. And that’s, that’s really when we started having a proof of concept, raising money, and then expanding very now sequentially and kind of steadily to large multi. So we went from, you know, a four unit to a six unit to a 10 unit to an 18 unit to a 49 unit to a 222 unit. And now, you know, our last project was 607 units, five buildings. So that was a very kind of strategic growth. We’re really limited us at the beginning. You know, first half of our tenure was being a little scattered and dicey. Just, you know, obviously disorganized is that’s not a fair statement. I think we’re just diluted if you will, and I think I think that came with age. I think that came with our pet experience. And a little bit of our personalities. Will people that are like Quickstart people are like could be like shy a nickle all the time, which totally is not good. When you’re starting to get focused? So..

Adam
Now when with y’alls investing, you mentioned like, you know, y’all jumped into it he left? Are y’all still doing this together? Did he go back and get a full time job? Or kind of? Are you running everything? Are y’all running jointly?

Liz
Yeah, that’s a great question. It’s shifted over the years. So for the first, when he decided to quit his job, and, you know, kind of start this venture, I took a corporate job. So I actually didn’t end up going into social work, I end up working in corporate, but helping teams helping people and I ended up staying there, you know, for about about a decade for about 10 years. So I was the sole, you know, breadwinner, if you will, and I knew I can handle our expenses. With just what I was bringing in, I was a consultant. So I sold I was a salesperson and a consultant. So when we started to grow the business, you know, he, you know, we said, flip works, flip doesn’t, and you start to just your money is not as consistent. And as we grew the portfolio, because at the beginning, you know, consistent money was important. You know, when we started a really good focus was on a 2020 10, on small Maltese and start to really raise money with people outside of our family was really when we started, like, Okay, what, you know, where’s Liz? Go, and what would she do so, and just sidebar 2008, I left my job and joined Matt full time. And that was really good timing for me to join him full time. Not joking. It really wasn’t.

Adam
Perfect real estate environment.

Liz
And it was right when we bought our commercial property. It was tough. It was really tough. We bought a bunch of properties, we’re gonna flip and Trenton and we didn’t flip any of them.

Zach
Did you lose some of your properties in the 2008 that you owned before them? Were you able to weather the storm?

Liz
We weathered the storm, but we weathered the storm, you know, we weren’t thriving in the storm, we were weathering it. So I ended up going back. So I left for two years, joined him full, full steam ahead, the two of us, and it just was stressful financially, it was stressful in our relationship is stressful all around, and I can make a long list of all the stresses. So I ended up going back to the job I left two years later, 2010. And that was hard, right? Because you’re like, I want to be an entrepreneur, we got this and then life doesn’t always present you with the right, you know, recipe and you have to learn and grow through that. It’s not just life. It’s YouTube, of course. So I went back in 2010, then I left again, 2013, to have my to have our first kid, our first little guy, Zack, so and then I didn’t go back since then. So my point sharing that is I’ve always had either a strategic role in the company full time, kind of growing it with my husband, or I’m more like strategic at this point. Probably for the last for where as I was entering in with investor, my kind of involvement in DeRosa took a big step back. And and that’s been really helpful for our relationship. To be honest, I’m involved. I know what’s going on. I help a lot with different kind of people decisions or strategic decisions, or those kinds of things. Am I involved in the day to day No. And we’re clear on that he runs it, he’s running that piece. Other ventures we’ve done, like private lending or buying some other properties for our household, like our family compound, you know, or getting into some new ventures real estate wise, I’ve been kind of doing or leading or being I’m very involved in. But the syndication business, Matt runs it. And that’s been great for our relationship, to be honest. And it’s nice to have separate businesses where we can come together, be more strategically helping each other versus like, day to day, my husband are very similar. So we’re fairly redundant, you know, we have differences. But, you know, we both like to kind of do the same things. And that doesn’t make for a good partnership, on a on a business level, right? Because operationally, and like integrator, and those kinds of that kind of energy in our company early on, lacked, I became that progression late because that would. But I’m not really that great at it either. So, so it’s been an evolution for us. But we are continually freaking it out, communicating and still involved in a lot of parts of our businesses to be better.

Zach
I mean, that’s what it’s all about. It’s just staying the course and figuring out over time, man, that was a great story, Liz. There’s just there’s so much to unpack there. I love the point that you made about just having too many irons in the fire, right doing too many things and almost being distracted. Because the beautiful thing about real estate is you you can be a successful investor in so many different ways and participate in multiple different avenues. But you can’t do all of them at once, especially when you’re first getting started. You really need to stay hyper focused. I tell people all the time because and there’s there’s just a lot out there. And there’s a lot of education and it’s fantastic but you really need to be very intentional with what your goals are. And you know, follow through that. That path once you see success and then And so it’s on to the next thing. And it sounds like, you know, you guys are still continuing in the journey with with doing a lot of really cool stuff with with kind of making the transition to Okay, so you went through 2008, you know, back and forth between corporate success with some of the properties you’re you’re participating in and you know, weather weather the storm, which is good to save because many people just got wiped out, you know what I mean, they’re over leveraged, they’re anticipating this, this end result in the flip I mean, commercial properties that went down to like, 50% vacancy or below I mean, did you did you hold on to that commercial? And just out of curiosity..

Liz
Yeah, we’re actually, it’s under contract as we speak. You know, but yeah, it’s, that’s been a labor of love that property. You know, it’s been, it’s been a great learning for us. And it really taught us a lot. So yeah, but we are selling it to the right to the right buyer, because it’s a small business center at this point, a lot of multiple users and it’s, it’s a great, it’s a great business, it’s just just not our focus. So it’s become, yeah, it’s time but..

Zach
Real estate’s dynamic. And you always need to evaluate, you know, where things are at. So let’s talk about the private, private capital and moving into the nation space. Because, you know, there’s, I think a lot of people that get to this point where, you know, they’re, they’re doing their own deals, and, you know, even if they have private lenders, you know, maybe one or two people in their network that are lending to, though, they want to, like, take it to the next level. And it’s like, okay, well, how do you know, when you have the confidence, and to be able to take that next step? I think that’s a huge step of like, okay, let’s actually start pulling some capital together and go over a bigger, you know, attain a bigger deal. Can we talk about, like that transition just kind of mentally, emotionally? How you did that?

Liz
Yeah, absolutely. So for the first many years, we, we tapped into some, you know, lines of credit on both both of my parents homes, we tapped into creative financing on our on our own terms, if you will, that’s kind of how we add some seed capital to start buying property.

That is not necessarily private capital, right? That’s like, you know, your parents take it, taking a step with you, if you will, those are totally paid off. Don’t worry that with them, those were made good too. So if anyone’s listening, awkward, my parents are Yeah, are in foreclosure now. But not. Now, that all worked out great. We’ve always made the payments. And those those lines are completely paid off. But when we transition to, you know, really getting focused on the small Maltese, you know, and really buying, renovating, and doing it in the right way, we start to create a proof of concept. So I think so many times people jump into like, raising money on their own, when they just don’t have any experience, they don’t have any sort of proof of concept. And if you’re really going to scale your business with private money, you should have a proof of concept, someone should have a proof of concept. Because if not, it’s just risky. And you’re as the steward of someone’s money, you’re mitigating risk for them just as much as you aren’t for yourself. So it can get kind of scary. It’s like the Wild Wild West, there’s deals being done all the time, right, people just shaking hands, and this person has this one has money, and this one has the property. And legally, they shouldn’t be doing what they’re doing for a variety of reasons, if they’re not set up the right way. So when we got our start, the easiest and simplest way people can kind of get into private money, if you will, is is working with a lender, a private lender, and, or you can partner with someone which is more private equity. And we did both strategies, as we as we built our business. Our first really private private money partner was actually an equity partner. People don’t usually start with equity partners, they start with lenders, because it’s a little cleaner, is the beginning, middle and end. And so equity is a partnership. It’s like, you know, you’re going into business with someone like it is going into business with someone. So our first deal was a project where we bought two single family homes. And I was meeting for coffee with an old friend of mine at from grad school. And he was a financial planner. I was in this in the city when I say the city. People from the New York area, say the city is New York City. So people are listening are clear with what city I’m referring to. But we’re in New York City, the city and chatting about a few things. And he said what are you up to? And I said, I’m I’m working here and I’m also investing and oh, that’s cool what we can do. And so I shared what we were up to, and how we were focused on Maltese and buying them, you know, from a variety of sources, and then renovating and putting good tenants and managing them. And he said, I would love to invest, but I just don’t have the time. And I think those are like the million dollar. That’s the million dollar phrase you would want to hear from someone who could be a partner of yours. Now, what’s interesting here is he was he didn’t live where we live. We knew Trenton we knew a lot. You know, the contractors at that point. We knew where to source deals, we had the relationships. And we knew what neighborhoods we wanted to invest in the whole thing right from A to Z we’re tapped out with with with with with, with the financial piece. So if you have a proof of concept and you, you have like the sources for the investing kind of, you know, process if you will, and you’ve just tapped out of your own money, that’s a great recipe for partnering, potentially or working with a private lender. Equity. You know, I think we jumped into equity not because it was, you know, we did the pros and cons, but just because it made sense. The thing was equity, you have to be very careful, obviously, you put in 50 grand, we put in zero. We did a lot of the, the, you know, a lot of the work from, you know, managing the project. He didn’t have a role, though. And that’s very, very important because now we’re in syndication and when we moved into syndication to whole different ball game, right, because you work with passive investors. And this gentleman was not a passive investor. He personally guarantee the loan, which is helpful, right? We were, we weren’t, you know, as great on paper to a bank as bankable, I should say, on paper as he was. And he audited the books, we had a weekly call. So he had an active role. Was it a day to day active role? Probably not. But in terms of of active partner? Yes, he was. And that’s a very, very important part. When you’re dealing with the SEC. And you’re dealing with kind of ensuring that anything you create in terms of an LLC and a partnership, when money is getting exchanged, one person is putting money and one person is not, you have to be extremely careful. So he was an active partner. When you start to syndicate, these are passive investors, they are not active in your business. They’re limited partners. And at that point, you’re filing with the SEC, right? That’s what really syndication is pooling money together. I could have syndicated these two single family homes people think syndications only for big deals. Syndication just means you’re you’re you’re you’re you’re you’re working with passive investors, and you’re pooling money together to buy an asset. We could have done that would it made sense, right? It wouldn’t have made sense from a legal perspective and all the bills, you know, all the budgetary items you have to consider. So my point being is that people don’t want to build something big and use private money syndication and buying something large is an option. But we didn’t do that. First, we really did a nice kind of simple private partnership, private equity partnership together, and then grew from there, we refinanced the property, we pulled that money out, we did it again. And then we brought in a couple more people that have had an active role, we did it again, we did it again. And we did it a number a couple of years before we did our first syndication, which was a 10 unit and a six unit. So 16 units, we syndicated that first project where these were just limited partners at that point. But I always say, you know, lending is there’s there’s an option for lending, there’s there’s reasons you want to use a lender, there’s reasons why you want to use an equity partner, we saw the potential with this person to build something, and then to kind of create, like a portfolio with him and others. And that makes sense to us. You know, for other deals, it makes sense just to kind of get in there cleanly. Beginning, beginning, middle and end. Especially if you have an exit, right, you’re financing you’re selling, that’s where you would use a private loan. But rentals are harder, especially if the you know, main refinancing, it made sense because we were able to pull this money out. But that doesn’t always happen. You know, when you’re when you’re, you know, hopefully running your numbers, and God forbid that person doesn’t get their money out. They’re lending on a deal that was not short term, if it’s long term, right. So the money has to match the project, and that people will have to be really clear on their roles as well. So the kind of how we got started and how we start to segue into syndication.

Zach
Well, I appreciate you making that distinction between equity in syndication, because I don’t think we’ve had anyone that has really gone through details with that yet. And both are both are viable options in theirs. But I think, you know, the fact is, to your point, Liz equity, an equity partner is a partner, right. And that’s important to make sure that your your goals align with that person. And that it because it is a long term type of scenario. And, and sometimes Equity Partners change. I mean, partnerships in general are dynamic. And sometimes they change, they change where you know, with what their involvement is, what their goals are long term, I love the fact that you worked your way up as a stepping stone. So many people just want to skip the steps and go straight to, you know, maybe over their skis outside of their comfort zone. But I think it’s important to build that track record to your point. And I love the fact that you, you know, with that first equity partner, how you met them, right, just talking about what you’re doing, that’s so important to be, you know, mentioning the success that you’re having just because these partnerships, you know, surprisingly will come out of a lot of just random conversations that you don’t anticipate. And so it’s important to be talking about what you’re doing. But I love the fact that you were in there for you know, basically you brought the deal. You brought the sweat, the sweat equity, but you really didn’t have any money in the deal, right? And they were better on paper so you leverage their financing capability. And that’s just that’s a super creative way to be able to scale your portfolio over time. Um, when when people get to the point of like actually syndicating and raising capital like that’s, that’s a whole different ball game, because you are you do need to abide by SEC regulations, you know, accredited unaccredited. But as far as your your business model now with where you’re at the point where you’re doing 600 Plus units, you know, what has your process changed with how you’re finding deals? I mean, are you looking in one specific location? Are you guys going nationwide? What’s kind of the buying criteria and underwriting? And we could probably do two hours on this, but just my level, how are you finding it in analyzing your large syndications at this point?

Liz
Yeah. And I think it has a lot to do with relationships. So you know, how we how we found our first, you know, that first larger syndication, our first larger one in episode was an 18 unit, right? And it was in Philadelphia, so we had to like, really, really proactively get in front of this broker, he didn’t know us, you know, didn’t care about us. And I think it becomes a little easier when you start to build relationships with commercial brokers that matters in large multi, even an 18 unit. So we just proved ourselves to him, we followed up, we met with him, he had some deals to look at, we were right there.

Zach
Was this on the MLS? Or an off-market deal?

Liz
I think it was an off market deal. And so they’re even more cautious of you if they haven’t done a deal with you. Because they don’t know, what do they care about, they want to know that they’re going to get paid is this deal than a close? And is pi about I want to say pi, a good 600,000 Raise. But for us, that was a big bounce, big raise, that was a big deal. And so we got in front of him and start to build a relationship where he can trust us. And he’s like, I got some deals here. Let me let’s look at this, we were right there, whatever he said, Whatever we did, we just kind of really high integrity, which is who we are. But that matters with brokers. And we had to kind of prove ourselves to Him. So we ended up getting to the closing table with that property. And then the kind of floodgates open with other properties he knew of and when he kind of opened up to us, he was the one that opened up the property, or talked about this 49 unit in Lancaster, which was another it was a new market for us. It was our it was the property we broke our 30 minute radius on it’s about an hour and a half from our house, and you would have thought it was across the world? Because it just felt so far, you know.

Zach
Did you have to train that broker on like your buying criteria? Or did he understand the value component like, Hey, these are below market rents, you know, this is kind of key valuable opportunity.

Liz
you know, when you move when you start moving in larger multi, you know, there’s a there’s different strategies. And and there’s a different way you’re thinking about the market, right? Everyone says value add, but what does that really mean? Right, and there’s levels of value add. And it, it all depends on what how much work you’re looking to do. If you’re buying a property at $30 a door and it’s really worth $70 a door, you need to know those numbers for whatever market you’re in, you need to know what kind of the average cost of that door if you will, is and what it is, you know, fixed up and kind of that market. So he started to really help us through and you know what that even look like this property in particular was a Class B in a great environment, you know, working professionals, and it was being run very Mom and Pop. So 49 units, like there was a woman that went and collected rents like literally went around and collected rents. That’s how they did rent collection, I can make the long list of the things they were doing manually. So huge opportunity, great asset converted lofts really pretty building needed up any needed work, but great bones, great location, and kind of very different than what we’re used to right where we’re very used to more of Trenton in the Trenton area. It was just a different is a different, you know, demographic, you know, overall for us. So, we started get a real sense of the kind of markets we wanted to invest in. So we kind of blended our real dilapidated, you know, value add kind of where we got our start with with kind of looking at growing markets, and that’s kind of that were that are the perfect marriage of what we focus on now even is still he then said there’s another there’s an opportunity in North Carolina, Fayetteville, North Carolina, which is a big army base. It’s outside of Raleigh and Durham and all the hot areas in North Carolina and this was several years ago. And he connected us to the broker down there. So he was kind of that person who for us this is really neat trajectory of growth for us. And we kept up leveling you know what we wanted to we ended up buying that we ended up a bunch happened with that property is 198 units to another podcast for another day. I’m sure Matt has shared that with you, Zach, it’s a great case study. I’m gonna be talking about it on the BiggerPockets. VP, calm me and Matt are presenting on that. at particular property, because just it’s got to be a book. That’s how many stories there are. But point being now we are really focused on markets that are growing markets that are diverse. I mean, so simple things, are people leaving this community, or are they coming? You know, our jobs leaving? Are they coming? Are businesses leaving? Are they coming? I mean, we can talk about market analysis all day and talk about how complex some of these things you want to look for are but when it really comes down to it is there is there is there an exit or is there is there are people coming in, if you keep it simple, you know, and you create housing that people can afford to live at, and it’s quality housing, that recipe has worked for us. So we then migrated into the Lexington, Kentucky market, we actually have our most amount of units there were about 1000 units just in Lexington, and we’re good there, we’re kind of feel like we’re good there, we’re not going to buy more, we’re pretty, you know, we’ve kind of hit that goal. And we’re, you know, looking looking in Winston Salem is our second market, we have high of the most units at this point. And so we look for those markets that you know, are up and coming, that are dilapidated, that are that are value add. And then you know, we could put the right team in place to manage them. And we love the the areas that we’re doing more business in, I mean, we have 1000 units and one one community, right. So there’s a lot of leverage we can have there. So you become your own comps, you become your own you, you have your own staff, right, that’s able to handle managing all that. Same as Winston Salem, we have about 700 units there. And it’s the same, it’s you have a great quality, you know, property management company there. So..

Zach
Comes with their own staff versus or you’re building a staff on site versus your small or midsize multi is your is your exit strategy lives with these. I mean, especially the ones you’re syndicating as, are these, mainly you have a plan to exit? Or do you want to add them and keep them in your own portfolio potentially with some equity partners or not? And then pay off the limited partners?

Liz
Yeah, it depends on the building. And it also depends on like, the strategy, you know, we’ve talked about, you know, there’s certain buildings like, people are just paying a ridiculous amount right now for multifamily. So you have to kind of hedge, you know, making your investors the most amount of money. I mean, there’s a property we have on the table right now, that in year four, and our game plan was five to seven years, it’s pretty stable. It’s a stable asset, though, so we got stable much sooner. And just just just the offer audit would make our investors like 35% return, right? So it’s like, we can we can keep the course of the plan or we can make our investors and, you know, obviously, that’s a problem for some people, like I got to put this money to work again, right? For some people and other people overall, you have to look at what’s right for the investors, what’s right for the building, you have to keep an eye on what’s happening in that kind of local market. So yeah, I mean, it depends, but certainly you have to be mindful of all those kind of things, and your investors own 70% of the building, collectively, of course, not one person. So you do have to put their interests first. You know, and I’m not saying you should, you know, not make any money or the general partner should, you know, take it on the chin. But it’s a different, it’s a different game, if you will, when you’re involving a lot of investors versus your own money, you’re buying an asset, I will say the 49 unit, we recently refinanced. We’re building another 49 units, because we have land there, which is really, really exciting. in Lancaster. And we when we refinance, we bought out some investors that that that’s gonna be a building, we want to we look to win a hold, and even even on more, you know, it’s just it’s a it’s a smaller asset, then you can kind of do that with. So that, if that answers your question, but..

Adam
You mentioned, you know, wanting to keep the investors, you know, the limited partners, you know, their interests in mind. So let’s say someone is in a syndication, and they are wondering, are my interests actually still being considered? What are some of the things that y’all do to show and to kind of what people would be looking at to see, okay, my interests actually are being taken care of in this deal. And they’re not just looking out for the general partners?

Liz
Yeah, I would say, how are they getting paid is always a big one. When are the limited partners gonna get paid? And what are the general partners gonna get paid? Most of our projects, if not all of them, limited partners get paid first. So they have like a preferred return, if you will. So that’s an important piece to look for, if I was someone who’s looking to get into and I invest in other syndications as well, obviously, we invest our own deals, but I have invested with with a few other syndicators. And that’s something I want to know You know, I want to know when are you getting paid one of the GPUs getting paid? They should get paid after on my opinion of the limited partners, because now there’s more incentive for them, make sure they’re hitting their goals that business plan is getting, you know, met. The other things to look for is obviously a track record. You know, there’s a lot of people who flooded multifamily and the last several years that are calling themselves syndicators who are having podcast they have it all right, they have the whole thing that you kind of need to get your name out there, and nothing against those folks. But I would be mindful of like how long you’ve been investing and you know, you look at some people’s experience, and collectively they have two years under their belt. I don’t know, mean, you’re buying, like a 500 unit, like, does anyone on your team have a little more experience, that would be important to me, it doesn’t mean if someone’s looking to get into it, that you need to have 20 years experience, but one of your principals should, or someone on the team should in my opinion. So that’s one thing is track record, I’d also look to see how they communicate. I’d want to know what what hasn’t worked, like, let’s get real, like what hasn’t worked in your in your in your properties. Because it doesn’t always go according to the business plan. Everyone would like everyone to think that. But things happen, money gets stolen, people get fired. You know, COVID happens, markets change, markets change, we can all do the best we can with what we have in our fingertips. But at the end of the day, you know, you don’t you don’t know what you don’t know, in different markets, you know, different markets that you maybe are moving into. So I think really getting a sense from that particular syndicator. And that team is what have you done? What hasn’t worked? You know, and what, what have you done to rectify it? You know, because then they’re gonna tell you Oh, no, everything’s gone. Well, well, how long have you been doing this? Because if you’re doing it, if they say everything is gone? Well, I, I don’t even know if I want to work with them. Because it just doesn’t it’s just not honest and it’s not real.

Zach
That’s your contingency plans, right? Like, okay, what what are the potential challenges? And how do we plan now to overcome them? And what you’re saying can be applied to anything really, right business to any degree partnerships to any degree track record is extremely important. First million dollars we made in real estate, we put into syndication and lost it all. And now it’s, you know, a bankruptcy, and it’s like, maybe we’ll get 10 cents on the dollar. I don’t know. So, but we jumped right in without betting someone appropriately. So that’s, that’s dramatically important. In obviously, checking references and dealing with people that are, you know, in the industry, I want to talk about the investor community list. But just real quick, if we get somewhere I mean, what are you seeing is is a common question all the time? What’s happening in the market, in your world in the market that you’re focusing on? What do you think the next two to four years is going to look like?

Liz
Yeah, it’s a great question. Because it, you know, wherever, wherever the eyeballs are, you have to be mindful of like, you have to be mindful of where those eyeballs are, you have to know, you know, what’s happening, of course, and interest rates and recession, and all those things are kind of key. I don’t think you should get stopped by any of those things. It’s just how do you participate in the current market? How do you participate as an investor? And so you’re getting started, and you have money to to invest? And you’re, you’re just getting outbid, because there’s, there’s people that have in this business 15 years that are out bidding you on that same 50 unit or 100 unit, well, maybe it makes sense to shift your strategy many passively invest with someone, right? So at least your money’s working, while you may, you know, kind of grow grow into being the active investor yourself. So I think there’s always a way, there’s always a way to kind of like, do great in any kind of market, if you will. And we’ve lived through various kind of ups and downs. But I think the I think it’s kind of exciting, exciting that there’s a recession, but I think that I think things are leveling, I think there’s more opportunity, I think the people that were kind of kicking tires, or just getting in with the wind or are not doing well, because they overpaid. So I think there’s gonna be a lot of opportunity, actually. And there has been you still starting to see it, I think, multifamily overall still overpriced, so we’re even looking more and more excited about the new construction, Multis that we have going. And just like what does that, you know, we have to going up mid by 40 to 50 units, but that really interests us and trying to get a proof of concept with that, and really doing more of that. You know, for us personally, that’s what we’re kind of focused on..

Zach
You’re still investing you’re not letting that hold you back. You’re just being strategic about your approach with that. Let’s transition a little bit to the investor community, we had the opportunity to participate in your your first conference. Yeah, which was fantastic. And I have to tell you, you guys did an exceptional job with that. We’ve been to you know, different network, it’s and you know, different groups, meetups and things like this and the energy there was just unparalleled. I mean, people are excited, you know, you guys were you and undress did a fantastic job. And it was just really cool to be a part of that. But for anyone that doesn’t know and you are one of the CO hosts for the InVEST her podcast for anyone that’s unfamiliar with that that’s associated with bigger pockets and lots of great content on there. So definitely check that out. But anyone that’s unfamiliar with what the investor community is in the value there. Can you just run through that a little bit?

Liz
Yeah, absolutely. So We have a lot of, we have a lot of free resources, but it’s all around community over content. So there’s there’s a lot of great content out there, how to flip a house, how to buy a property. And we go through that, right? We have three pillars real estate investing business, because we want women not to do the business solo, they want them to grow with other people and teams, and doing it with self care and having balanced in your life and the things that most people want. But not trading one for one thing for another job, right. And so we hold those three pillars really critical to our community. And our community is made up of a variety of ways you can get involved, you get the support that you need, with a Facebook community, that’s about 14,000 women that women are literally just asking questions all the time, people are jumping in it’s pretty safe environment, we kind of make sure that you know, we kind of take down a lot of spam. We have moderators, but I always see stuff that I’m taking stuff down. So we’re really active in our group, just to you know, hold that kind of safe environment to a high standard. We have over 55 meetups across the country. And these meetups meet, you know women that are leading these meetups, frequent free, free events, monthly meetings. And what it’s all about is women coming together. Women typically are speaking or you know, men are always welcome. Of course, men speak at these events as well. But it’s about creating that safe environment for women and empowering them empowering them to get their questions answered. I don’t know about you. But there’s been a lot of events where women will have questions. And they don’t want to like look like a moron. So they don’t want to ask the question. And we wanted to prevent that. So we wanted to create these safe kind of circles of women coming together where it’s less like you’re a number and it’s more of a like a circle and women really get to know each other and they’re almost like masterminding with each other and helping each other and doing deals together, which is happening. Partnerships have formed deals have been done. So that’s kind of happening on the ground. And then we also have our about a year ago, we just kept listening to women what they wanted and needed. And we created a membership, a paid membership that was kind of unique, in and of itself for experienced women. So women that have like five to 10 deals, and they’re just looking for that. That’s like that kind of close knit deep connection. Women that we can mastermind together, we have pods where women join pods of whether it’s like every call who’s an author with, you know, short term rentals. She’s one of our pod mentors, and we have pod mentors who are syndicator. And they have a syndication kind of pod, and then a short term rental pod. And these are led by women who we like and respect who know what they’re doing in that particular area. So we offer like content, but it’s community and accountability and masterminding. And we have about 100 members right now and looking to have more experienced women because they’re giving to each other and getting and it’s like this really cool, really great group of women that we’ve come to just adore and love and the women that join us, it’s kind of like this family. We’re kind of like the mafia, we only let those natural rock market. So but it is a really close knit group of women experienced when looking to stop doing the solo game, and really be around women where they can leverage and grow their portfolio and grow their business. And we are investor con, we just have always things happening free events happening monthly. Zach, you presented had a great presentation a couple months ago or a month ago on turnkey. So we’re always trying to provide content. But then also, like, create partnerships with great companies. So that’s what we’re up to.

Zach
I love it. And the community and the networking aspect is so vitally important, I always tell people that, you know, the people you surround yourself with are really going to determine your success far more than any in particular real estate transaction or deal that you’re participating in. So it’s important to surround yourself with like minded people that are there that are supporting you, and that you can learn from Liz, just in closing, if there’s any final pieces of advice that you could offer to any female listeners that are, you know, maybe they haven’t had their first deal done, or they’re looking to scale to the next degree, but they just feel like they’re being held back. For whatever reason, you know, what, what piece of advice would you give from a from a successful woman in the industry to someone who’s looking to get started or take it to the next level?

Liz
Yeah, I would say and I actually presented last night to great group, women who focus on their net worth every month. So it’s really, really neat group of women who actually do is talk about their net worth. Isn’t that cool? No talking about? That’s about anything stereotypical, you’re talking about your net worth, which is super cool. But anyway, something we talked about was getting started or growing your portfolio and the first tip, the first step I had for I won’t go through all four. But the first step I think is the most important that most people don’t do. Everyone’s asking about what market should I invest in? What type of property should I buy? Should I buy a short term rental? You know, we all what kind of fan financing can I get right now? We’re so into the weeds and women don’t I think ask enough of why am I even looking to invest in real estate and really doing the deeper questions around where do I want to be in five years? What’s important to me? You know, what are my skills? Do I really want to be active and dealing with contractors because I love the smell of lumber or like no Wayne Hell, I want to just passively invest, like, so we don’t we don’t do that deep work. I don’t think most people do, but I just speaking from, and we also think we have to do it all ourselves. So we don’t get started. Because we think we have to know it all and do it all ourselves. And then we then we push the goal back, we push the goal back. And we just keep it in the back of our mind. When if you got support, and you started to get clear on what you wanted, the who and the people who could to support you are all around. That’s what our community is for. You know, even if you just try the Facebook group, and ask questions and say I’ve done some research on short term rentals, I’m looking at these two markets. What do you all think? I’m telling you experience when will jump in and help you? So I think we just need to stop knowing all the answers and just take small steps and get clear on what we want. And our worth, because women bring so much to the table. And we undersell ourselves. I was talking to an engineer the other day. And she said hey, I don’t know what project management can, how can that even help in real estate? I’m like, be for real. Like, that’s, that’s all what real estate is like, seriously, I wish I was an engineer, we would have propelled our business much further earlier had we had that way of project managing. So my point is that women bring so much to the table, we just need to know what we want. We need to get out of our own way. Stop thinking we have to do it ourselves. And that’s why we’ve created this community.

Adam
All right. Well, Liz, thank you so much for joining us today really appreciate it. Once again, Liz is the co founder of the real estate investor community, you can check them out at the real estate invest her.com That’s the real estate invest her.com, thank you so much for joining us, we really appreciate it to everybody else, you know, head on over to rent to retirement.com to look for properties. We got a lot of stuff there a lot of content, hopefully that will be as valuable as a real estate investor website. We don’t have a big Facebook community but..

Liz
But I thank you both for having me on and everything we’ve done together in terms of rent to retirement, what you guys are up to, and the work that you’re involved in and just really helping people you know, find the right properties. Just appreciate you guys appreciate all that you’re doing. And I’m excited to do more collaboratively together. I know Zach and I you know, we’ve had a lot of good conversations and taking some next steps. So appreciate the support and just you know, excited to be part of your community here too.

Adam
Well, thank you so much. If you have any questions, email us podcast@renttoretirement.com. Don’t forget to leave us a review on whatever podcast platform you use. Also, don’t forget to check out Liz’s podcasts and leave them a review as well. I’m sure they would appreciate it. And we’ll talk to you all in the next episode.