ATE - Precision in Underwriting with Tyler Chesser and Shannon Kiefhaber

When to be conservative and when to be precise in your underwriting and how much effort to put into determining your offer price on the LOI with Tyler Chesser and aspiring investor Shannon Kiefhaber.

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Episode first released on 4/12/2021

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Tyler Chesser
Tyler Chesser is a successful real estate entrepreneur and personal growth thought leader who believes anything is possible by combining effective real estate investment with constant and never ending personal improvement. Tyler is the Co-Founder of CF Capital LLC, a real estate syndication firm, which focuses on acquiring and repositioning multifamily assets in the Southeast United States, provides institutional-quality services to its residents and outsized returns to its investment partners. Tyler is also the Founder and President of The Chesser Companies, which provides it's cornerstone of exceeding value through high performance coaching and consulting for real estate investors. Additionally, Tyler is the creator and host of Elevate Podcast. Elevate is for leaders, entrepreneurs and real estate investors who have a desire to be extraordinary. More than anything, Tyler is a curious and relentless seeker of wisdom and knowledge and regularly devours books, consumes intuitive data and is a generous teacher and leader to many others around him.
Check out his website
https://tylerchesser.com/
where you can find his podcast,  Elevate Podcast

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Shannon Kiefhaber
I am a third generation RE investor. My grandfather bought land in GA with the dream of developing it one day. My father and grandfather developed them together. My father now owns and manages over 35 properties and wants to retire!! I am going to quit my job in the next few months to take over the family RE portfolio. My parents have worked and sacrificed for years and I am so fortunate that they created generational wealth that I intend to 10X.

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Your host, Brian Briscoe, is a co-founder and principal in the real estate investing firm Four Oaks Capital.  He and his team currently have 485 units worth $21 million in assets under management and are continuing to grow.  He will retire as a Lieutenant Colonel in the United States Marine Corps in 2021. Learn more about him and the Four Oaks team at www.fouroakscapital.com  or contact him at brianbriscoe@fouroakscapital.com - be sure to let him know where you found him.

Connect with him on LinkedIn or Facebook.

Transcript

Brian Briscoe: 0:00

Shannon, we got the toddler on the line here, we want to ask him,

Shannon Kiefhaber: 0:02

how conservative Are you being on underwriting because I feel like we're not there on price because we've just, you know, layered on the conservativeness that I think we're writing ourselves out of some deals,

Tyler Chasser: 0:13

we cannot be overly conservative, we have to be precise. It's an iterative process, but we've got to surround ourselves with the appropriate team members who can give us that direction. The other thing too is we invest in outsourcing our analysts work to a team that is much much smarter than you and I because these people are going to be so much farther in the weeds that they can be more precise than myself for my business partner, the rest of our team. So that's been really important for us. So I'll say stay conservative, but make sure you're precise.

Brian Briscoe: 0:51

Welcome to the diary of an apartment investor podcast with your host Brian Briscoe. In this podcast we bring some of the top professionals in the apartment investment field to discuss various aspects of the apartment investing journey with the sole purpose of educating listeners to make wise investment decisions. The Diary of an apartment investor podcast is sponsored by four oaks capital bringing you high yield returns through apartment complex investing. This is journal entry number 120. In part of our Ask the Expert series Today we speak with experienced investor Tyler Chester and aspiring investor Shannon Keith hopper keeps listening for discussion on when to be conservative and when to be precise in your underwriting and how much effort to put into determining the offer price on the fly. And now the show Welcome to the diamond apartment investor podcast. I'm your host Brian Briscoe with forex capital. Very excited for today's show. It's another one of our Ask the Expert episodes and we have two amazing guests on the line with us. We have Tyler Chesser and Shannon key father Tyler is the co founder of CF capital, a real estate syndication firm, which focuses on acquiring and repositioning multifamily assets in the southeast United States. He's also the founder and president of the Chester companies which provides his cornerstone of exceeding value through high performance coaching and consulting for real estate investors. Additionally, Tyler is the creator and host of elevate podcast elevates for leaders, entrepreneurs and real estate investors who have a desire to be extraordinary, and are aspiring apartment investor today. She's a third generation real estate investor, her grandfather bought land in Georgia. And he and her father developed it together her father now owns and manages over 35 property and then wants to retire and Shannon's gonna pick up the management of those properties. And in the meantime, is trying to pick up some multifamily properties her own. So Tyler level everything about you been following you for a while now but on your podcast, super excited to have you on the show today. So that said, welcome.

Tyler Chasser: 2:38

Hey, thank you so much. And you love everything about me. I didn't know that.

Brian Briscoe: 2:41

That's a man everything. Absolutely. Yeah. I mean, the map on your wall, the bookshelf. I mean, it's just everything.

Tyler Chasser: 2:48

So you don't know about the skeletons in my closet? Maybe we'll talk about that today. Who knows?

Brian Briscoe: 2:52

All right, hey, let's let's bring some skeletons out. You know, maybe I'll change my opinion of you by the end of this one. But so let's let's talk about you. Let's talk about your background in history. Because of course, that's my favorite subject is Tyler Chester. So bring?

Tyler Chasser: 3:05

Absolutely no thank you for having me. It's a pleasure to be with you, Brian and Shannon, as well, thank you, and everybody listening. Thank you for listening in today. But you know a little bit about my background, I got started as a professional in the corporate world, in corporate America. And I was actually started in sales. And then I was doing marketing and international marketing, marketing research, market research. And I was always fascinated with branding, I was always fascinated with, you know, the psychology of business and human behavior and consumer behavior. So that's why I got into marketing. And I learned fairly quickly after a few years, and it actually took me a little bit of pain to realize this is that while I was fascinated with that function of business, I was not fascinated with the politics of corporate America. And so it took me a while to figure out Alright, you know, the answer to this is not getting my resume ready for another organization? My answer is to put my ladder on a different wall and climate different ladder. And so, you know, I was I kind of raised in middle middle class Middle America, and I was never I never once thought I would be an entrepreneur or an investor. I thought success for me was to climb, you know, a corporation. And so I ultimately got into real estate through asking questions and surrounding myself with people who I saw as successful and ended up getting my real estate license and started selling commercial real estate, you know, over the course of a few years. And so that got me in the business. And then I started investing along the way and, you know, learning about the multiple streams of income and all the beautiful things that we love about real estate and so that's really how I got started in the business.

Brian Briscoe: 4:36

Yeah, so another corporate america drop out, I guess so. Yeah, absolutely. Awesome. So what was so you were you were a commercial broker. You say and and now you're, you're in the syndication world and buying apartments as an investor. What drove you to make that switch? You know, I've

Tyler Chasser: 4:52

just became fascinated with you know, just all the benefits of real estate and I was such a, I was, you know, I could I'm always Been a salesperson at heart, so to speak, but I can't sell something if I don't believe in it. And I truly believed in it. So I started investing actively in multifamily, as I was kind of known as the apartment guy on the brokerage side, and I just became so enthralled with the investing side of things. Because, you know, I learned from Robert Kiyosaki that it's not about trading your time for money, it's about trading your resources for more resources that can then you know, allow you to be multifaceted. And so I just became enthralled with investing. And, you know, grew that to a point where it made sense for me to say, hey, look, if I'm really gonna scale this thing, I need to make sure that I'm serving the other individuals who are other brokers, and I'm not taking their Commission's and I'm growing that and so they know that, you know, I have their best interests at heart, and I'm not looking to take money off of their table. And so that's, that was the decision behind that. But it's, you know, it's a long term game. So the pivot has served so far. So we'll see what happens next.

Brian Briscoe: 5:54

Yeah, so interesting. And I always like the transitions, to talk a little bit about that. What were the challenges? I mean, obviously, there's a lot of benefits that I think are clear and present between, you know, moving from a broker to a an investor. But what were the challenges,

Tyler Chasser: 6:09

probably some, I mean, many of the challenges are really related to reputation and branding in the marketplace, at least from from my perspective, because I was very well known as a very active commercial real estate broker who specialized in multifamily. And so for that, it was it took a while, I mean, it took a course of, you know, probably a year or more for the marketplace to have a different picture in their mind about who I was, and what I was doing, because blessed and grateful to have been able to develop a reputation and you know, in essence in the marketplace, for being a practitioner, but, you know, the the switch, you know, it was like, it's like turning around a big ship, you know, it doesn't turn around on a dime. And it took some time, it took a lot of conversations, it took updated branding, so I'd say that was a challenge, but of course, patience as well. Because in the brokerage world, even if you're brokering large commercial properties, or commercial multifamily properties, you know, those transactions are long, but on the investing side, it requires even more patience. So I think it was like the double amount of patience required for me to make that transition.

Brian Briscoe: 7:14

Okay. Now, just curious, a lot of people who are starting out, they they look at the brokers is like this impenetrable veil, because I'm sure you've seen it from from the broker side where you know, somebody who's brand new and questionable about whether they can close, you're probably not gonna spend a lot of time with them. Did you? Did you face similar problems with other brokers? Who knew us Tyler the broker instead of Tyler, the buyer?

Tyler Chasser: 7:37

Yeah, you know, the interesting thing, the first thing that myself and my business partner, so my business partner was also a former broker as well. He came from more the institutional side, and I actually built a boutique brokerage myself. But the first thing that we ran into was, Hey, guys, wait a minute, if we sell you this deal, because we know you, we respect you, we know that you guys are experts in the marketplace. We appreciate that. But how do we know you're not going to try to take our commission? How do we know that you're not going to take, you know, 50% of our fee off the table? So that was our biggest uphill battle? You know, but of course, I mean, at the end of the day, everybody wants to know that they're spending their time wisely. And that's what brokers want to know as well. Yeah. So that was the that was the headwind that we ran into. So yeah, I can appreciate that.

Brian Briscoe: 8:19

Yeah, yeah. Okay. Yeah, but definitely from a different angle, I can definitely appreciate that. I mean, brokers, they work hard for their money. And it comes only when you purchase your complete to sale. So wondering about whether or not they're going to have a paycheck is real, very real for them. So tell her tell me this, tell me what your big burning Why is what's what's your motivation? What drives you to be successful?

Tyler Chasser: 8:41

Well, it kind of goes back to the transition from the corporate world to being an entrepreneur. And that was really I looking back. I didn't realize this at the time, but I was kind of tolerating my life. And I say that a lot. Because I feel like it really resonates with me, and maybe it resonates with other people too. And you kind of step back and observe the circumstances of your life. And you say, Alright, you know, am I really enthralled by this? Am I really fulfilled by this? Or am I just kind of tolerating the day to day and I actually realized that I was tolerating it. And of course, there's many people who can find fulfilment in corporate America or within large organizations. But for me, what I found was that if I could give myself financial freedom and time, freedom and geographic freedom and surrounding myself with people who are up leveling themselves, who are up leveling other people, giving myself the opportunity to impact other people, as a result as well, and invest in myself and uplevel, my mindset of level my knowledge, my team, the people around me continue to expand, then I can live a life of fulfillment. And so that's, you know, apartments and multifamily is kind of a I just look at as a vehicle It's a vehicle towards creating outcomes that I want in my life. And so the why for me, is to live a life of fulfillment and to give that to other people to show other people that's why I created elevate podcast is because we talk about hey, you What is it that you're doing to expand as a human being expand as a person, as well as use a practical vehicle, like real estate, to provide for your needs otherwise? So I just want to show more people that it's possible and that it all starts with your beliefs. Do you believe it's possible? And if so, then let's take action. So that's that's really my big why.

Brian Briscoe: 10:19

Yeah, a lot a lot of stuff in there that resonates. And I think a lot of people just tolerate the their jobs and tolerate their lives. And I like how you put that that was, that was very, very informative on that one. But yeah, and then elevate, you know, getting getting better. I love that idea. And and, you know, like I said earlier, you got a great podcasts and anybody who's listening, go check it out, elevate podcasts on all the all the major podcast apps. But so let's let's dive back into to you the history and the flow of the business. You know, you transition from the commercial brokerage, you started getting into multifamily. Can you talk to us about one of the specific deals you did, and, you know, maybe what you had to do to elevate to get that deal across the finish line?

Tyler Chasser: 11:00

Yeah, I mean, I could look back and kind of share, you know, a bunch of general experiences. And, you know, for me, my path has been start small, you know, make the mistakes on a small scale, and then go a little bit bigger, and then go a little bit bigger. And so that's been my path. And I've started investing in multifamily with my own money. And I'll tell you that I made every single mistake in the book, I feel like and Now granted, I continue to make more and more mistakes, but hopefully, to a lesser degree, but I started investing about five years ago in multifamily. And, you know, as we've continued to scale, I mean, our approach now is we buy one to 300 unit value, add VC deals across a general, you know, geographic footprint that makes sense for us, you know, within about three to four hours of, of our headquarters, so to speak. And so, you know, that's our approach. But I will tell you that right now, in the current marketplace, we're very opportunistic, and what I mean by that is, you know, it may not fit in the exact box that I just described to you. But we will consider alternative opportunities. And what I mean by that is, you know, if there's a class a deal, that makes sense, and it fits sort of in a risk reward balance, we'll consider that typically, we'd like to see a deal where we can add value from an operational perspective or physical perspective, or what have you. But if there's a, there's an opportunity that we feel like is priced appropriately, and that we can take action, and we can achieve a certain yield, we'll do that we're also looking at, you know, mixed use deals. And of course, retail is one of the most challenged asset classes in the marketplace. But perhaps there's an opportunity for us to capture, you know, a part of that market cycle. Because, you know, this every single economy, whether it's a sub market, or macro economy and micro economy, there's a part of, you know, the cycle that we've got to pay attention to. So we're very opportunistic, but that's kind of the general approach that we take. And, you know, we partner with accredited investors on those acquisitions and business plans.

Brian Briscoe: 12:55

Nice. Nice. Yeah. And you bring up you know, retail, which has been hammered, but I mean, the way I look at it retails on sale right now, you know, and I think, you know, a lot of hotels and even office spaces, certain areas are, are very well valued for people who, like you are opportunistic, and know what they're looking for, and are ready to go. I mean, eventually, I hope and knock on wood, we're going to be back to normal business, and eventually that those retail things are gonna open back up offices are going to have people back in. And, you know, right, now's a good time to move towards those. But anyway, I appreciate that very much. So let's, let's talk about what's next for you.

Tyler Chasser: 13:30

Yeah, I mean, you know, we're excited about the opportunities in the marketplace. And I think that anytime you have a disruption, there's always going to be new opportunities as you grow. And as you go, so, you know, we definitely want to scale our company and our acquisitions, and, you know, just really the, the assets that we, you know, manage and deliver, you know, beyond expectations. So, you know, we're definitely in this for the long haul, and we're continuing to grow there. But you know, beyond that, I have such a passion for high performance, and really Exceeding my own potential and sharing that with other people around me. So I am a high performance business coach, for real estate investors and salespeople as well. And myself and my business partner within that endeavor, Trevor McGregor have launched elevate high performance Coaching Academy. And it's amazing, it really is amazing, and it helps people really get out of that tolerating their life into developing a set of circumstances where they can design a life of their dreams. And it sounds corny and all this stuff. But you know, it's a way for us to really kind of compress decades into days. So that's really what's continually next but it's all about you know, continuing to raise the bar and I'm excited for each and every day.

Brian Briscoe: 14:42

I Awesome, awesome. I like it. Well, we'll put some information about the the elevate high performance coaching in the show notes for anybody who's interested. And just curious how loud is that? hammering? You got your that now? I can hear it. pretty loud. Yeah. Yeah, he was in the basement. There's one small thing he's doing And it's strictly underneath me. But All right, we're gonna try to push forward. And sorry about that, guys. So that said, we're going to switch gears a little bit here and bring on Shannon. So Shannon, welcome to the podcast.

Shannon Kiefhaber: 15:13

Hey, thanks so much for having me.

Brian Briscoe: 15:14

Yeah. So do us a favor and tell us all about you, your background, your history, and kind of what got you into you don't want to invest in apartments.

Shannon Kiefhaber: 15:23

Yeah, sure. So I am a real estate investor, portfolio, residential and commercial properties. And I graduated Georgia Tech, with a degree in civil engineering, then working in the industry, the energy infrastructure space for the past 10 years. And I am now currently starting to step into more of an asset management role into my family's commercial and industrial portfolio. So my background again, you know, I was born into a very entrepreneurial family, my mom, my mother, built and sold several companies. And my dad took that money and invested it into real estate. So I had tremendous, you know, parents to learn from who taught me, you know, principles of live under your means. And my personal favorite from my mom was, if it was easy, everyone would do it. And, you know, everyone likes to think, you know, you own your own business, and you make your own hours, but I can guarantee you, you own your own business, you work harder than any one in corporate America. And I got to see that firsthand, you know, I ended up going to college got an IT, like I said, got an engineering degree, met a fighter pilot, and have been living the the Navy life for the past 10 years, they've been amazing. But, you know, during those 10 years, we kind of kept saying, we're gonna wait to invest in our future there, you know, this time is gonna come in the future where we're going to start investing. And, you know, I finally said, What, why are we what are we waiting for, like, and so, we've had finally it kind of took a step back and said, Let's, let's purposefully, you know, kind of get back to the roots, the way I was born and raised, which was starting with a single family purchase, and kind of grew that portfolio, my own personal portfolio. Here in Virginia Beach, I live in Illinois, in Virginia Beach and investment in Hampton Roads. And then and also in Florida. And during kind of, once we purposefully started investing, met another couple, real estate investing couple that we hit it off, because we were the only people our age that were doing this, that were living under our means saving our money buying real estate. Yeah, and and, and, you know, no one seemed to understand, we didn't really have anyone to talk to about it. And so we hit it off. And, and since then, we've we've done over 150, real estate transactions, flipping houses, we have full time dedicated construction crews, and we have investors that signed the purchase and rehab of our properties. But we really, you know, decided we want to scale and we have the capacity to scale. And so that's kind of where we at, we're at now is we started a 25 eight Capital Group. And, you know, I've been underwriting deals and submitting otherwise, but just haven't really landed that first large multifamily

Brian Briscoe: 18:06

project. Nice, nice. So and we talked about this, you know, a week or so ago, and I'm very impressed by by what you have done, you've gotten so many, you know, transactions already done. And for you, this is going to be much more of a sidestep than a drastic change in direction, I mean, you've gotten a lot of the foundation that you need, you got the system set up, and it's just a matter of taking everything you built, and just slightly shifting directions a little bit. So. So I mean, you thought you read a little bit of your, your, your y into what you just said, but if you could, you know, distill it down to, you know, a couple of sentences, what's your big burning, why.

Shannon Kiefhaber: 18:43

So my parents work tremendously hard to build the real estate portfolio that they have, and, and they deserve to retire and, and live off the fruits of all of their efforts. And, you know, they're a good example of kind of, you know, the the mom and pop, you know, the mom and pop operation where there was no exit strategy, there were no systems, you know, they built a business that is running them into the ground. And, you know, like I said, they've been building the business, they've been working in the business, not building the business. And so for me, it's really the ability to step into, you know, an asset management role. And just, there's so much room for improvement and efficiencies and technology and everything that I've learned in my day job as a project manager, and that I've learned from, you know, flipping really to, to just be able to take over relieve this burden and grow and grow a business. And it's funny, you know, we were just mentioning a Tyler is mentioning, you know, some of his his background and, and you're not fascinated with with the politics of corporate America. And, you know, it's funny, my dad sent me an email last week from 2006. So I was a sophomore in college, and the subject line said sick, I don't remember sending it but I opened it and I just started as summer job working in a corporate office. And it was my first exposure because both my parents worked from home, like they were entrepreneurs, they own their own businesses, I'd never even seen a corporate office. And in the email, I outlined what I called my, I'm already sick of working for money, I want my money to work for me plan. And, you know, I was a college sophomore, and I had just read Rich Dad, Poor Dad. And I remember thinking to myself, Wow, my parents could have written this book, God, why didn't they? And it ended with me, you know, thanking them for ruining or maybe saving my life. And, you know, it's funny life kind of happens. And I like I said, I followed my husband's Navy career, and, and there's no regret there was we lived an amazing life, but when my husband got out of the Navy, and as you know, you can, it's our first time in 10 years that we can choose and be deliberate about where we want to live and the path we want, and the life we want to live. And so that life, you know, as we have decided, is an ambitious pursuit of continuing generational wealth and furthering financial literacy. And so I'm super passionate about encouraging, you know, and educating others, especially women about the financial freedom that can be achieved through real estate investing. And, and again, just working on kind of pivoting and scaling is where I'm at.

Brian Briscoe: 21:20

Yeah, so you know, first of all, a lot of lot of goodness in there. And I definitely appreciated that Sikkim, though, because I felt that unfortunately, I stuck with the the job for 20 years, but it's definitely my wife and I frequently debate what's harder being active duty or being married to someone who's active duty, and nine times out of 10. She wins. So

Shannon Kiefhaber: 21:40

I would agree with your wife.

Brian Briscoe: 21:42

Yeah. So yeah, definitely. I mean, nine times out of 10. I agree with her. But you know, when I have one of those really bad days, it's like now I wind today, but all right, well, hey, I appreciate everything you've done, but comes to the funnest part of the show for me, where I basically hand you the mic, let you drive. So Shannon, we got the toddler on the line here, where you want to ask him,

Shannon Kiefhaber: 22:03

yeah, tell her I just found it really interesting with your background as a broker. I mean, I feel like you had almost like the insider, insider slip, you know, a couple of deals, you know, ello eyes that we've made, and making it the highest and best, and we've just been in almost like interviews. And it's just felt like maybe just that jump from, you know, our kind of domination in the single family world to then being a seat at the table with, you know, larger 25 to 50 unit properties, you know, and just maybe not knowing the certain, I don't know, tactics, or words or phrases or buzzwords or not, you know, I'm not really sure what it is. But maybe what are some unique questions or strategies that you use? Or ask brokers, you know, as the buyer to help figure out how how to negotiate that winning offer?

Tyler Chasser: 22:57

No, thank you. That's, that's a great question. By the way, I've admired your background as well. So I just wanted to say that it sounds like you've had a lot of success in real estate. And I think you can definitely leverage that in many ways as you continue to scale. But, you know, the first thing I'll say to the question that you just asked, Is, answer questions before they're asked. And if you want to think about it, like brokers, at the end of the day, are wanting to, you know, answer their clients questions and give their clients assurance, that when they spend time with you, it's going to be time well spent and compensated. And so you know, with that, obviously, you've got a track record, that's significant, right, you've got a team that you have really put together that you can show that you have what it takes to make this happen. And so you know, one thing I would suggest for you is, you know, while maybe you don't have the specific track record of the deals that you're looking to purchase, you do have a significant track record. And I'm sure you can leverage those relationships into a further team that can also support you know, even more in depth track record, if that makes sense. So that's the first thing that I would suggest to you. The other thing too is go the extra mile go above and beyond and have the conversations before time is of the essence, about hey, what would what would really, you know, give you comfort in doing business with me, Mr. broker, or Mrs. broker, whoever it is, you know, before time is of the essence, like I said, before, you're in that best and final you're competing with four or five, six other groups, you know, to have that conversation. The other thing too, is sweeten the pie a little bit, you know, what can we do to make our deal much more attractive, whether it's hard money, whether it's shortened due diligence timeframe, you know, of course price is in there, but beyond that, how can you strengthen the relationship because the relationship is what it's all about. At the end of the day, the broker is going to want to do a deal with a certain group over others. And it's like, hey, do I like these people? Do I enjoy them? You know, obviously the others As it is important, but they're gonna go to bat for a certain group. And they're gonna say, Look, I know that this offer seems better, but I'm going to tell you that this group is the group you probably want to go with, obviously, you make the decision, Mr. or Mrs. seller. But here's what I would suggest to you. Because the best brokers out there are advisors, they're not just paper pushers, they're not like, here's all the offers, you know, let me know what you think. Yeah, yeah. So they're gonna advise. And so, you know, there's, there's many things you can do. But it is about investing in those long term relationships, as you know, you know, there's, there's many things you can do. There's handwritten letters, there's gifts, there's all these things, but it is about staying Top of Mind and all this stuff. But that's kind of a high level. But does that resonate with you?

Shannon Kiefhaber: 25:43

Yeah, absolutely. I mean, I was talking to a broker recently, that's kind of, you know, my age, my gender, we hit it off. And she was like, people forget, like, we're just normal people to work. And she felt like she's approached, and some, just not as a, as an average human being. And, and so absolutely, that's, that's really helpful. And but I would say, you know, several times, you know, when we did lose out, it was on price. And we were told, Hey, your team was excellent. You guys were, you know, polished and just brought everything to the table that we asked, but it came down to numbers. And so, you know, my next question was just how conservative Are you being on underwriting? Because I feel like we're conservative, on top of conservative on top of conservative and we're conservative in so many different areas of our underwriting that at the end of the day, we're just not there on price, because we've been, we've just, you know, layered on the conservativeness, that I think we're writing ourselves out of some deals.

Tyler Chasser: 26:45

Yeah, no, it's a phenomenal question. One thing that I'll say is that the current stage of the market cycle is obviously different than every other stage of the market cycle. So we've got to be very transparent and very aware of where are we in that. And obviously, there's a ton of demand for multifamily investments. And so we've got to have that recognition. The other the other piece of it is, it's absolutely a numbers game. I mean, I'll tell you, when we got started in this business, sort of the frame of reference was, hey, you're probably gonna look at 75, maybe 100 deals before you close one, I think it's closer to probably 150. At this point, at least for us. And I'll tell you the reason why I say that is because like you were conservative, but we cannot be overly conservative, we have to be precise. So like, as an example, one thing that, you know, has been a topical piece of news that we've been following is just been insurance, pricing insurance has risen dramatically recently, over the past couple of years. And, you know, that's been one of the things that can really make or break deals. But if we look at a deal and say, Hey, you know, this is going to be 375 a unit, but it really turns out to be 325, a unit or 350 that can make or break a deal. So precision has become very important to us. And so it's an iterative process, but we've got to surround ourselves with the appropriate team members who can give us that direction. The other thing too, is we invest in outsourcing our analysts work to a team that is much much smarter than you and I and I mean that with all due respect, I'm a CCI m certified commercial investment member, I went to study how to be an expert in market analysis, financial analysis, you know, fun, you know, investment analysis, but I still outsource that work, because these people are going to be so much farther in the weeds, that they can be more precise than myself, my business partner, the rest of our team. So that's been really important for us. So I'll say, stay conservative, but make sure you're precise. It's almost like what Robert Kiyosaki says, you know, there's two sides of the coin. You know, of course, people, some people are winning deals by being more aggressive. And so we can stand on the edge and look at that side of the coin. We can also say, well, we're in this for the long haul. So let's be smart. And so let's be conservative and precise, that would be my suggestion.

Brian Briscoe: 28:58

Yeah. And I'll throw my two cents in on this one there, there are things that you can control. And there's things that you can't control, I can't control where the market goes, I can't control where cap rates go in the future. I can't control where interest rates go in the future. I can't control where rents go in the future. So the things that I can control, that's what we are as precise as possible on okay. And those are the those are the areas where we're willing to you know, to walk the line and be very like, like Tyra said precise on, but when it comes to looking at the future, that's where we tend to be conservative, because that's what we cannot control. You know, everything else we have, you know, a dog in the fight as far as what we can control. Can we control expenses? To a certain degree? Absolutely, yes. Can we control what the cap rates going to be three, four years from now and we're selling? No, we can't. So we're gonna be conservative with that number.

Tyler Chasser: 29:54

Yeah. And I'd like to add something on that as well, because I think it's such a great point. You know, there's a book that I read A couple of years ago called thinking in bets by Annie Duke, and she was the former professional World Poker champion. And what she talks about is like nothing in life or in business is certain, right? When you think about exit cap rates as an example, we don't know where the future market is going to be. But we can think in bets. And we can bet on a certain probability of A our cap rates going to expand, are they going to compress further and we look at history, and we try to analyze based on that, and obviously, there's some speculation involved there. But that helps us, you know, sort of guide our decision making, but I think it's really important. Yeah, that's

Shannon Kiefhaber: 30:35

awesome. Thank you so much. I one, one last question. So, like, how much effort are you putting into determining your, your, the offer in your Li, so, you know, we're trying to, like you said, uh, you know, if you anticipate that we need to, we will probably under 100 deals before maybe closing one. That's obviously a tremendous amount of effort, which we're willing to put in. But I think maybe we're putting in too much effort. It feels like sometimes underwriting to put in an ROI. And just interested in your thoughts or not? Yeah,

Tyler Chasser: 31:08

I would, my suggestion is, obviously, you're not going to have every piece of information before you submit an LOI, but you want to have a significant amount of data to be able to feel like you're putting your best foot forward. So our kind of rule of thumb is, if we have 70, to 80%, of clarity around this project, then it's a goal for us to put our best foot forward. And, you know, we typically underwrite 30 deals per quarter, and we typically offer on 10. And so, you know, we have to make that decision. And what we've decided recently, especially is all right, we get seller guidance, and we get, you know, sort of Whisper price and all this stuff. And we can say, all right, well, maybe we're 5% off that whisper or maybe we're 10% off, maybe we're 15. But what we have decided recently, especially has been look, we're gonna put our best foot forward no matter what, where it makes sense for us. We're not in the business of hurting feelings. And this isn't a business of emotions. And so we put our offers, you know, out there, and so, if we do get traction at that point, then we can nip and tuck where necessary, but that's how kind of how we handle that. But Brian, is there anything else that you would add to that?

Brian Briscoe: 32:13

Yeah, I mean, same thing, we're always sharpening our pencil, you know, we're always, you know, we go into what we know, and otherwise nonbinding. I mean, obviously, you don't want to make it a business of submitting, analyze and backing out. But you remember, the LSI is non binding, and in a lot of marketplaces right now, once you even go under contract, you have a due diligence period where your earnest money is fully refundable. You know, so we look at submitting an LSI as we have to, to have a chance on the property, you know, so do we have to know everything before throwing the lie in? No, we don't you know, what, we'll take a lot of things, you know, and we'll keep track of, you know, the known unknowns, you know, what we're still looking to clarify on. And the biggest thing is kaput capex budget and your condition of property until you walk the units, you don't know how much you're going to spend to bring things back up. And we're looking at value added plays. On the flip side, you know, we're waiting until we don't put a whole bunch of ello eyes out there, my partner who does the acquisitions, you know, he's talking with the brokers frequently, and if we don't have a chance, you know, at the price that we can underwrite it in, or the price that we can purchase it at, we're not going to put no ally in here. So the discussion between him and the broker is like, Hey, you know, the highest I can get on this price is 4.7. You know, is that even worth putting the Li and, you know, if the broker comes back and says, Yeah, put it in, we'll do it if the broker comes back and says, nonstarter, you know, we're not going to waste the time putting the the other way through. So does that answer your question?

Shannon Kiefhaber: 33:41

Yeah, it does. And I think some of the nuances and in what you guys are saying is actually really helpful. So I mean, I've seen I think, in the past, I've acted, I think a little bit more maybe to transactional with the broker. And and I think it sounds like you're just having regular conversations, just open, honest, transparent. And I think that's what's heard us a few times in the past is, especially from just the single family side, or you know, where we're buying, you know, these distressed properties. And there's not just that clear, and open communication flow, and it seems to be extremely, very different in the multifamily or commercial world where a lot more cards are on the table, where there's a lot more honest and transparent. Talk about what things are worth value, rehab costs, things like that. Yeah,

Brian Briscoe: 34:27

yeah. And it is a relationship business. It always is. And I know my, my partner, Eric, you know, he's, like I said, He's our acquisitions guy. I know, he has good friends, I mean, friends with some of the people that that are the brokers. And, you know, we've had one broker that's actually invested in more than one deal with us, you know, so, you know, we take that relationship to the next level. And I think that really helps with you know, maybe we're not getting the first call when when they sign on a property, but, you know, we're in that first round of calls.

Tyler Chasser: 34:56

Yeah, and it's, it is really important. I mean, I look at the relationships as More transformational type of relationships versus transactional, because whether or not you get that opportunity that you're looking at, you're planting seeds for a long term relationship. And people when they see you're playing, you're out there playing on the field, so to speak, quote, unquote, you know, they see that you're a real player. And so they're gonna start to bring you opportunities from the next deal. And so I think that's important, because they want to see that, hey, your thinking is in line with what's the reality of the market. Because if you're giving them feedback, and you're 25% off where you know, the market really is, then maybe that's a problem. So obviously, let's be aware of that. But having open communication, invest in those relationships, and that's the compound effect there, I think will start to take hold for you. Yeah, the

Brian Briscoe: 35:45

first couple acquisitions we did I was I was running the train on acquisitions. I remember just having a very frank conversation with with the broker on a property. I'm like, I think the whisper price was, you know, 6.2. And I called her up and I'm like, I can't get above 5.4. And she laughed. And at first I'm like, Oh, my gosh, and I was I was still new to it. I thought I was offending offensive somehow. And she she was basically frank with me and honest with me back, she's like, the owner is dead set on 6.2. Like, we've told him, he's not going to get more than 55556. Like where we are right with you on your numbers. You know, so there's that to play to. But anyway, we're basically at the end of the the show today. So I do want to thank both of you guys for coming on. I really appreciate your time here. Got one more question for each of you. And Tyler, you get to go first. how can listeners learn more about you?

Tyler Chasser: 36:36

I think the best way is to go check out elevate podcast on any podcast platform. There's tons of content there. In fact, you can listen to Brian on elevate as well. But that's the easiest place and then of course, you can find me across social media or Tyler chester.com.

Brian Briscoe: 36:50

Yep. And I'll just throw a little carrot out there. You know if you can find the spot where my power went out during the podcast, email me and I'll send you a free something or other I haven't decided yet. That's a you get something for free for me, but it'll be worth it. All right, Shannon, same question for you. how can listeners learn learn more about you?

Shannon Kiefhaber: 37:09

Yeah, so you can see you know, pretty much all of our flips, we document a lot of those on Instagram at Lv Realty. And then same reach out to me on social media. And we also have a website for our Capital Group 25, eight capital and that just kind of gives a little bit more by a little symbioses about the four of us that are in that Capital Group and seem to start increasing deal flow opportunities and underwriting videos. Apparently, we need the magic numbers 100. So we're 50 short,

Brian Briscoe: 37:41

magic magic numbers about 100. So yeah, keep on pushing, and each one you don't get is just one closer to the magic number. So all right, well, I appreciate once again your time and talk to you guys soon, I hope. Thank you for listening to the diamond apartment investor podcast today brought to you by four oaks capital. If you'd like to know more about how to invest in apartment buildings or want to be a guest on our show, visit our website at four oaks capital comm slash podcast or email us directly. If you're still listening, you obviously like the show. So pull out your phone, tap Subscribe, leave us a five star rating on your favorite podcast app. And we'll see you again next week.