Diary of an Apartment Investor

ATE-Talking to Brokers and Negotiating Price with Randy Langenderfer and Brian Armstrong

May 03, 2021 Brian Briscoe, Randy Langenderfer, Brian Armstrong Episode 129
Diary of an Apartment Investor
ATE-Talking to Brokers and Negotiating Price with Randy Langenderfer and Brian Armstrong
Chapters
Diary of an Apartment Investor
ATE-Talking to Brokers and Negotiating Price with Randy Langenderfer and Brian Armstrong
May 03, 2021 Episode 129
Brian Briscoe, Randy Langenderfer, Brian Armstrong

A discussion all about brokers , from how to give feedback to negotiating price, with Randy Langenderfer and aspiring investor Brian Armstrong. 

Follow us on Instagram, Facebook, and Twitter
For more educational content, visit our website at www.diaryofanapartmentinvestor.com
Interested in investing with Four Oaks Capital?  First step is to schedule a call with us

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Randy Langenderfer
Randy got his commercial real estate start as a private money lender in the remodeling of single-family homes in South Florida, Ohio and Texas with a combined market value in excess of $2.5M.  He has invested in several assets as a limited partner and progressed into the general partner role. Today, the InvestArk Properties  portfolio has invested in over 4,000 units in TX, OK, OH and LA. His investment goals have always been focused on providing above average passive income to investors by improving communities using a safe and time-tested approach. He is passionate about helping others achieve their goals in real estate and has been a part of several educational programs and is currently a coach in Rod Khleif’s organization. Randy has 25+ years of various corporate leadership experiences in multiple industries, primarily in the risk and governance areas. He currently serves as the Chief Compliance and Audit Officer for a large academic medical institution in Houston, TX. He has a bachelor’s degree in Accounting, Information Systems, an MBA in Finance and is a CPA.
Visit his website https://www.invest-ark.com/

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Brian Armstrong
Brian is a structural engineer in the San Francisco Bay, where he and his wife, 2 kinds, and 2 dogs live. He has been looking at real estate for the past few years, and after a few false starts, Brian signed up with a coach. Now, he's searching for his first MF property. 
Connect with him on Linkedin https://www.linkedin.com/in/brian-armstrong-se-bb064866/
or Email [email protected] 

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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 [email protected] - be sure to let him know where you found him.

Connect with him on LinkedIn or Facebook.

Show Notes Transcript

A discussion all about brokers , from how to give feedback to negotiating price, with Randy Langenderfer and aspiring investor Brian Armstrong. 

Follow us on Instagram, Facebook, and Twitter
For more educational content, visit our website at www.diaryofanapartmentinvestor.com
Interested in investing with Four Oaks Capital?  First step is to schedule a call with us

----
Randy Langenderfer
Randy got his commercial real estate start as a private money lender in the remodeling of single-family homes in South Florida, Ohio and Texas with a combined market value in excess of $2.5M.  He has invested in several assets as a limited partner and progressed into the general partner role. Today, the InvestArk Properties  portfolio has invested in over 4,000 units in TX, OK, OH and LA. His investment goals have always been focused on providing above average passive income to investors by improving communities using a safe and time-tested approach. He is passionate about helping others achieve their goals in real estate and has been a part of several educational programs and is currently a coach in Rod Khleif’s organization. Randy has 25+ years of various corporate leadership experiences in multiple industries, primarily in the risk and governance areas. He currently serves as the Chief Compliance and Audit Officer for a large academic medical institution in Houston, TX. He has a bachelor’s degree in Accounting, Information Systems, an MBA in Finance and is a CPA.
Visit his website https://www.invest-ark.com/

----
Brian Armstrong
Brian is a structural engineer in the San Francisco Bay, where he and his wife, 2 kinds, and 2 dogs live. He has been looking at real estate for the past few years, and after a few false starts, Brian signed up with a coach. Now, he's searching for his first MF property. 
Connect with him on Linkedin https://www.linkedin.com/in/brian-armstrong-se-bb064866/
or Email [email protected] 

----
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 [email protected] - be sure to let him know where you found him.

Connect with him on LinkedIn or Facebook.

Brian Briscoe:

Hey, Brian, we got Randy on the line here. What do you want to ask him?

Brian Armstrong:

Once I do establish a contact with a broker? How often do you think it's okay to remain in touch with them or reach out to them to sort of stay top of mind.

Randy Langenderfer:

It's dependent upon your availability from your W two job. So you're carving time out of your work day or nights and weekends to make those calls. I think it's really up to individually each brokers I think the more you're in it, there's less monthly or quarterly touchpoints you have to have. I mean, I know there's brokers that I don't talk to now, but I try to keep copious notes by each broker that I'm talking with when I talk to them.

Brian Briscoe:

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. Welcome to the diagun apartment investor podcast. I'm your host Brian Briscoe with forex capital super excited for today's show. It's another one of our Ask the Expert episodes, we got two great people on the line with us today. We got a man with a ton of experience in this and other businesses. Randy Langan derfor. And we also have a very motivated aspiring investor, Brian Armstrong. So that said, Randy, you're up first. Welcome to the show.

Randy Langenderfer:

Brian, thanks so much. It's a pleasure to be here today. And I really appreciate the opportunity. It's a great podcast and I know you'd have a listening audience that's eager to learn and you provided a ton of value.

Brian Briscoe:

Yeah, and you know, I'm excited to get you on the show today. You know, really reading your bio and learning a little bit about you previous to recording I'm super excited to dive right in. So let's start with with your background and your history and kind of walk us up into you know, what got you to decided to start this apartment investing career.

Randy Langenderfer:

Yeah, is it happy to do that. So currently residing in Houston, Texas markets, southwest corner, Sugar Land Area, to be specific came to Houston about eight years ago for business purposes, I'm employed in a large academic medical center in the Houston area came from the Cleveland Ohio market. And when I was in Cleveland, Ohio, I was working for a private equity company. And about that time, you know, they all run in cycles, kind of like apartment investing. And on the five year term of the private equity ownership of this Goodyear Tire and Rubber spin off, called Beyonce, it was winding down in a mill, I had to find another job. And at that time, I came to that big wake up moment of that aha moment that, ah, you gotta find another job, and you're not a young man anymore. And you make a fairly decent buck. So that challenge became real. And at the time, I had a brother in law, who had got me into single family, hard money lending. Okay, so I had met a hard money lender in the single family space for a couple of years with a group out of South Florida flipping houses in the early 2010 2011. Period came to Houston 2013 heard attended a lifestyles conference here and heard about multifamily. And really just mean that the short answer Brian stone love with multifamily. It's a lot of work. But in my mind, compared to single family that fit my personality more, every single family flip had to be a, you know, analysis of the comps and the sub market and a rehab budget and as you know, multi families, non recourse loans and, you know, forced appreciation through noi growth. So that just really resonated with me and I really have never looked back. So yeah, I

Brian Briscoe:

think a lot of people come to the same realization, you know, single family, you know, you have to rinse and repeat and do it over and over and over again, you know, and you get into multifamily. And what resonated with me was, I always put it like this way, if you buy a 24 unit, it's almost like a Buy one get 23 free sale, if you compare it to two single family, but yeah, so so went to the conference, you started, you learned about multifamily fell in love. What then? I mean, how did you start and how did you get the ball rolling?

Randy Langenderfer:

So I've been in a couple of large educational groups, I say where you know, we, the thing, I really encourage listeners, and so the short answer is I'm currently a coach and a rad colleague organization. Yep. So I've been an actually lifestyles. The summer I grew out of Dallas in the last year and a half been a coach in the rod kalif organization and they're all great organizations. I'm not here to bash The answer is I started with passive investing. Being a finance guy at heart, I'm kind of risk averse. And so I really wanted to kind of dip my toes in the water. And so I attended every meetup every networking event I could get to meet sponsors got to understand some of the risk a little bit, and then became an LP limited partner. And so I still continue to be a limited partner. I'm a GP today and a limited partner. And I hope to always be a limited partner, just because I still think the asset class, the advantages of tax advantages, cash flow and forced appreciation. I just never found a better asset class in my own personal opinion.

Brian Briscoe:

Yeah, it's it's hard to beat you know, it really is and just the depreciation tax advantages, I mean, just with a couple of single family homes, and honestly, I have five kids too, which helps, I've been able to zero out my my tax liability for the last 20 years. You know, it's just take that depreciation and, and count it against your your other passive income. And, you know, if you make if your tax situation is right, you can count it against a lot of your active income, and start reducing your overall tax burden. I think that's, that's an amazing benefit. Among the other things that you said so, and you're just a key on on a couple of things. You talked about these large organizations. I am a product of the Michael Blanc organization. I did my organization you know, I've been to one of these boot camps. Incidentally, where you at the boot camp in January 2020 in LA I was back okay, I was his last live event. I think that was that was and that's that's the last live event I've been to so but anyway, I agree with what you say, you know, a lot of these organizations all are, you know, designed to help people get across they're the first to cross the finish line. You almost can't go wrong. You know which one you pick and a lot of P I stressed a lot. You know, Rod Cleef, Michael Blanc, Rod Cleef microblog. But you know, you really, as long as you're putting your effort into it, you can't go wrong, but

Randy Langenderfer:

it's stylistic, and maybe what people you meet along the way that you may, you know, connect with easier, but yeah, I think you're absolutely right there again, they're, they're both great organizations, as well as many of the others.

Brian Briscoe:

Yeah, that's a good point, stylistic, you know, I ultimately went with the one that was closest to my house, you know, I was moving to DC. And at the time, Michael Blanc was in Northern Virginia, 30 miles away. But yeah, so different stylistic approach, but they all teach underwriting, they all teach due diligence, they all teach analysis, and they all teach you the fundamentals of the business. So

Randy Langenderfer:

I think the most important thing there, it's just the ecosystem, and each of them, you know, know that the light minus like mindedness of fellow investors, right? Yes, you, you get the neck network and associate with people that want and are learning the same things you are, which is invaluable.

Brian Briscoe:

My company for x capital, there's five partners, three of the five of us came out of the Michael Blanc program, and that's where we met. You know, it's just one of those things you learn you associate with other people. And if you find somebody that you resonate with, you align with, you know, you have your your partners, you know, and I know a lot of partnerships that have been made in various organizations. So I think it's absolutely, it's not a requirement, but it sure helps is I think, the best way to put it. But the other one I'll I'll chime in

Randy Langenderfer:

on is some people I know, being a risk adverse in a finance, finance guy at heart, I kind of push back and, you know, spending money to join one of these organizations. But I came to the realization that I've spent a boatload of money in my undergraduate and graduate degrees, that you expected to join the club to be able to get a job, etc. And so it's the same thing that I encourage people that I network with and teach. And Coach that it's not pay to play, but it you know, you invest a lot of money in your education, whether it be undergrad, vocational school, or graduate school. Why did you do that? Well, because you wanted to better yourself, and you want to understand, so don't be afraid to spend some money. And there's a ton of free ones, as you know, today, too.

Brian Briscoe:

Yeah. And incidentally, you know, when I, when I decided that I want to do I still had to convince my wife, and I'm very fortunate, you know, I went and talked to her, I said, Hey, I want to do this coaching program, it's going to cost X amount. And she didn't even bat an eyeball. She's like, that's about what a Master's would cost. So, I mean, it's, it's equivalent to a Master's education, right? And I said, Yes, it is. Okay.

Randy Langenderfer:

Do it. It's just going to expedite your learning curve as well. I mean, you can, you can do it on your own. You can do the free forever, but it's just going to take you two, three times as long

Brian Briscoe:

Yeah, I 100% agree on that one too. I mean, and part of the reason I did it was just for that reason, accelerate, you know, I had a certain timeline and needed to accelerate it. But anyway, let's let's, let's talk a little bit more. One thing that I like to ask everybody. So shifting gears just a slight bit is, what is your big burning? Why? I mean, you talked a little bit about what got you in, but what what's the motivation that you have for continuing in this business and for you trying to be successful in general?

Randy Langenderfer:

That's a great question. I did mention my my entry into the multifamily is kind of what got me there was the changing careers and the realization of I needed to develop another passive income. And now, now, seven years later, I can tell you that my wise is pretty, pretty much evolved into it. I hope it doesn't sound quaint, but leaving the legacy, a legacy with my children in terms of showing them that going to school and getting a good job and getting advanced degrees. And working for big companies isn't always the most advantageous for for today's today's gig economy. And I just also have several charities that I've committed to whatever is left in my state at the end of the day that are going to get a big chunk of it as well. And I just think that that as well as giving back I just really enjoy coaching, being on podcast like this meeting people like Brian, understanding the whys they have and also just, there's been enough people, like you said, that are built into your real estate education. Brian, I want to be that for somebody else, and help them their journey, too.

Brian Briscoe:

Yeah, yeah. You know, you love a lot of good things there. I think a lot of people look at the legacy for their kids. That's a common trend. And giving back is also I think, super important. Matter of fact, my wife and I were talking last week, you know, every time we would pay at least 10% to two different charities of income, but got a little bit of a, you got a big check last week. And it was it was fun writing that 10% of that, and given that off to a chair of organization, but lots of lots of goodness there. So let's let's, once again, shift gears, let's let's look at one of the deals that you've done. Can you walk us through your favorite of the mix?

Randy Langenderfer:

Can I have two if I did it briefly?

Brian Briscoe:

Yeah, let's do it.

Randy Langenderfer:

Let's get to the first one was I wasn't a GP, but I was an LP and it was a 97 doors, that couple of guys came to me and I wasn't GP, but I worked actively with them. And the bottom line was, is it was a property that was bought. And about a year after we bought it, it the the first four units were flooded. They had about six inches of water, and so had to take empty all the first floors and rebuild them. Bring them back on the line. And so in that time you begin to question your judgment in your investments is this was this a right thing? And I learned through that hard life that that hard situation, I should say that sometimes bad? Good. A lot of times Good things come out of bad things in this particular one, you basically had a brand new asset to come back to the market with bumped rents, increasingly and so this is what I call my my grand slam home run investment. We 4x 4x the investment in about 24 months.

Brian Briscoe:

Oh my goodness.

Randy Langenderfer:

And I don't think I'll ever be able to repeat that again. Live for exit

Brian Briscoe:

for x in 24 months or Oh my goodness. That's Oh, yeah, that's like it's like an eight month doubling time. Wow. I mean, math in public. I'm terrible at that. That's like an 8% per month annualized return.

Randy Langenderfer:

But it was probably 18 of those 24 months where it was very laggy.

Brian Briscoe:

Yeah, where you were you were scratching your head? You're like, Oh my gosh, am I gonna lose money? And then Wow.

Randy Langenderfer:

Second example I have is my first GP that I did was in the same city where the first one was at and we bought a we bought the classic opportunity that everybody would say don't buy 139 units 1965 bill chiller boiler property with flat roofs? Yes. So I pause right there and, and I had people counseled me, Randy, don't do it. Yeah. But I was so anxious that myself and a couple partners bought it. Literally two months after we owned it. I get a call. I'm sitting in my office. This is Randy, the buildings on fire. And I said, this is a joke, isn't it? Well, it wasn't. And we had a fire. We went through some tremendous hard times with the property manager. I was investing a lot of I became the regional manager. Fast forward. We were able to it's about buying right and selling and we were able to sell that one for a 1.95 equity multiplier in 21 months. Wow. So they're not all like that, and those, and then for the new investor out there, that's the other one important to realize they're not all like that. And investors like me will always tell you their home runs. But there have also been some singles along the way as well.

Brian Briscoe:

He using the baseball analogy, you know, it's not homeruns that win games, it's a bunch of singles and doubles in a row, you know, occasionally, I mean, the home run doesn't hurt, you know, and it's always nice to have that home run, but it's really the rallies, it's it's the consistent singles and doubles, that put runs across the plate and win ballgames. So and it's the same thing in multifamily, you're looking for singles, you're looking for doubles. And if every once a while you hit a home run, hey, great, you know, just strat to strike out too much. And it's about persistency. As you said, it's persistency. And endurance. Yeah. Now, on both of these properties, I assume there was an insurance policy that came into play that helped renovate, Correct.

Randy Langenderfer:

Correct, correct. And so the downside risk was covered. But as a sponsor yourself, you realize that I didn't at the time that though you have insurance that insurance proceeds the lags the loss months, many months, if not even longer, so you have to rebuild the fire unit, and release it up before you get where you got reimbursement for fire, the physical asset, but for the rents, the last rents and stuff takes months after the loss occurs. And so you have to float that, excuse me, float that out of cash flow of the property.

Brian Briscoe:

Yeah, so I mean, lesson learned, you know, I think, to be able to manage that, you just basically, basically to make sure you're in a cash strong position, you have sufficient reserves, and make sure you have a really good insurance plan. And incidentally, most lenders are going to make sure stuff like that for covered in the insurance. So, you know, if you if you got a agency loan or a bank loan, they're going to make sure that you have appropriate insurance, but it's always a good idea to sit down and talk with your insurance rep about what happens if, yeah, well, there's

Randy Langenderfer:

a lot of intricacies there that we can talk into the whole podcast about insurance, you know, and as you know, deductibles and co pays, and I deduct the deductible for the property or per building. And there's a lot of intricacies there that are to be learned along the way, too. But you're absolutely right, you know, ask questions. And there are a lot of resources out there for that, too.

Brian Briscoe:

Yeah. And fortunately, that's not a lesson that I have learned yet, if that makes sense. You know, we haven't. I mean, we've been doing this for two, two and a half years now. You know, we haven't had too big insurance loss, big Insurance Claim yet. So, knocking on wood right now just

Randy Langenderfer:

is one of my mentors tells me though, if you do this long enough, you're gonna you're gonna have fires, and you're gonna get sued for something.

Brian Briscoe:

Yeah, understand what happens if you do it long enough. It's gonna happen. It's gonna happen. But yeah, so one more question before we bring Brian on. What's next for you?

Randy Langenderfer:

What's next for me is just continuing to continue to do what I do, which is primarily I spend my days talking to investors trying to understand their wives, and what kind of opportunities would interest them, trying to determine meet new investors and talk to them about their options and what interests them. And then secondly, underwriting deals, I'm still a W two guy, so I spend a lot of nights and weekends but it's not work for me. I really enjoyed underwriting deals, analyzing deals, talking to brokers, and trying to find that next opportunity to market to investors.

Brian Briscoe:

Yeah. You know, I like what you said, you know, it's not worked for you. And that's, I think, one of the keys for, you know, a lot of people in this industry, you know, if you find something that that you can do that you enjoy, and actually pays. It never seems like work. And I feel the same way between my w two job. And in real estate investing. You know, I enjoy doing what I do. I enjoy everything that has to do with multifamily. So for me, it's also not work. But well, that's it. Let's let's talk. Let's bring Brian Armstrong on the show here. Brian. Welcome.

Brian Armstrong:

Thanks, Brian. Thanks for having me on the podcast today.

Brian Briscoe:

Absolutely. Yeah, this is this is awesome. I know. We've connected on LinkedIn A long time ago, and you know, seeing each other in a couple of our spaces. But finally Good to have you on the other side of the video chat.

Brian Armstrong:

Yeah, thanks. It has its finger. Yeah,

Brian Briscoe:

cool. What's up do is do us a favor. Tell us a little bit about yourself.

Brian Armstrong:

Sure thing. So my w two job for a while now has been structural engineer. That's what I went to school for. It's what I've been doing for a while, always had a bit of an interest in real estate, you know, the multifamily thing kind of always sort of was out there as one of those things that just had some appeal to it looked at some other options as well done a little bit of flipping of my own personal house a few times as we moved from place to place. But you know, the more I looked at it, the more the multifamily thing just really had the biggest appeal. And for a lot of the reasons that have been mentioned already. It's got the scale and you can really force the appreciation of the examples that are And he gave were great examples of how you can really improve a place and turn it around on the back end. So, yeah, just really focusing on that now.

Brian Briscoe:

Nice. Nice. Now I mentioned structural engineering would have a little bit of carryover with multifamily investing, you know, primarily, I'm thinking due diligence. Have you found that your your W two job is maybe helped you in some ways to get started a little better?

Brian Armstrong:

I think there is a little commonality to it, as far as understanding the numbers, being comfortable running the numbers, that that's definitely something that I'm very comfortable with. You know, I think just having some familiarity with understanding construction, having done engineering and been around construction for a long time is definitely offers a comfort level that that, you know, if you're gonna go in and do these value, add properties and do some rehabs. I think there's definitely a comfort level with with taking that on.

Brian Briscoe:

Yeah, I think I think most engineers that I know, just just because engineering field requires a lot of math, most engineers come in saying, basically what you said is I'm good with numbers, I can handle the numbers, I can do the projections, you know, I can work with the spreadsheets. And you know, not not everybody's comfortable doing that. And then like you just said, you know, being comfortable with the construction, and that that's a good part, especially for doing the value add. Or in Randy's scenario where you're rebuilding something that went down with a fire, I think that experience is going to be extremely valuable to you in your multifamily career. So now you talked a little bit about what what gotcha and but if you could distill it down to you know, a sentence or two, what what is your big burning? Why? That for me, it's

Brian Armstrong:

probably a bit of a cliche answer, but it's really just sort of having the opportunity to have a little bit more time available in on the multifamily side, I do you enjoy the W two job. I like the there's a lot of creativity that comes from structural engineering. I know that might sound kind of weird, but you know, every project is its own thing. And so you got to be a little bit creative on each one. I think that's true in multifamily as well, every property seems like it's its own project, you got to be creative in each one. But as a consultant, you know, your your time is sort of your clients time, you know, you need to be available when they need you. And so you know, that doesn't always jive with everything else you want to do in life. And so I think just looking for more time freedom. You know, I've got some younger kids and want to be more available for them, that kind of thing. So yeah, that's really the big push right now for

Brian Briscoe:

me. Yeah. And like I said before, the before the show, this is going to be episode I either one, I think 128 or 130. But that theme comes up a lot as well. You know, it's cliche for a reason. It's a cliche, because I think that's what a lot of people are striving for, you know, they're they're striving to spend their time with the people or the causes that really resonate with them. You and in your case, in my case in Randy, you've mentioned in your children are part of that. So well, good enough. So here's my favorite part of the show. It's where I get to say, hey, Brian, we got Randy on the line here. What do you want to ask him?

Brian Armstrong:

So most of my questions today sort of focused around talking to brokers and finding deals and how to communicate with brokers. So my first question is, once I do establish a contact with a broker, how often do you think it's okay to remain in touch with them, or reach out to them to sort of stay top of mind, but not annoy the heck out of them enough that they're like, God, I'm not taking that guy's call anymore. He's just bugging me too much. Is there some kind of magic formula for that? Or is it is it broker dependent?

Randy Langenderfer:

Well, if there isn't a magic formula, I'm not aware of it. And I'd like to know if there was one myself, but I think just listening to you, Brian, there'd be a couple of thoughts top of mind. One, it's dependent upon your availability from your W two job. That's as we share that same element. So you're carving time out of your workday, your nights and weekends to make those calls are coffee appointments, or whatever. But I think it's really up to individually each broker. So there's, I think, the more you're in it, there's less monthly or quarterly touchpoints you have to have. I mean, I know there's brokers that I don't talk to now, but a couple times a year, but they know where I'm at. And they know I just said email exchange at one last night, a new deal coming out. And I just thank him for at least having me on the distribution. So I try to keep copious notes by each broker that I'm talking with the one I talked to, I think there's an art form. Also as newbies, I encourage my students to, you know, if you're talking to a big firm name, any big brokerage firm, there are those who are very well established and are the partners and have, I'll call them underlings or junior associates working form. I really try to network with the junior associates versus the senior guy on the totem pole. Just because the senior guy really or gal does Lead me. And the junior person is more hungry and willing to take those calls and develop more of a relationship. And even though the senior guide, or person may be responsible for recommending a ultimate buyer, it's that relationship from the junior associate or the second in command that he or she is going to rely upon as well. So I'd encourage you to speak to the people underneath take notes, try to just build a relationship that has less to do about multifamily and what they like and what they don't like. So hey, you know, I play golf. So I always try to find somebody that's if there's something other than real estate, it's an instant bond, right? Sure. And they're more likely to it's an I'm sure you've done this many times in the structural engineering a building client relationship. So you should excel in this area. I would guess, Brian, yeah.

Brian Briscoe:

I agree with a lot of things. I mean, the junior guys on the totem pole, they're looking to build the Rolodex. I don't know how many people know what a Rolodex is anymore, but they're looking to build their their contact list. And they're gonna give you a lot more time. And I think I think Randy had, you know, a lot, a lot of gold nuggets there hit the nail on the head on that one.

Brian Armstrong:

Yeah, no, that's a very good point. I, I've had that thought as well, you know, cuz I, like you said, the establish guys have their group of people or if they don't, you don't need to add a lot of new people. So that's very good point.

Randy Langenderfer:

And I'm a baby boomer. So I tell people that you know, I prefer face to face communication. I'm very good at LinkedIn, and email and all that stuff. But sooner or later, I'll try to get a broker at a coffee at the local Starbucks or whatever, when there's not a deal going on, just to make that human connection. And, again, I believe you got to excel with this given your day job.

Brian Armstrong:

Yeah. Thanks. Okay. So then another question I have was, so let's say, I've got a deal from a broker, they've given me the om and they've given me the financials, and I've run into the spreadsheet looked at it, however many ways I can think of and the other price I'm coming up with this is just, you know, well below the price that they're looking for, which is feels pretty common these days, given the market, pretty hot, and whatnot. Is there any strategy, you have to go back to the broker to say, you know, you want this much, but I just don't see it I, the best I can do is this much without sort of risking severing that relationship or looking like you're trying to lowball everything, or

Randy Langenderfer:

I don't think I think you're in a majority, because you hit it on the head this this market. So I think you're in a majority, not the minority. Yeah, I'm in terms of this market cycle where everything is escalated or inflated and cap rate compression and interest rates low. So every aisle in my world down here at Euston. I mean, I've seen more deals come across my desk in the last several months, because sellers are aware of that, and they're trying to exit the market at the high. But to your question, I don't I don't know that there's a secret weapon there. Again, I think the only thing I would encourage you to do is to give feedback. As you know, I'm sure you've been coached. Just say that here's my criteria. Here's what I'm trying to build. So I say my own I'm trying to build a, you know, a seven to eight, maybe 9% cash on cash yield a year. And I want to return 80 to 90%, total return in five years. So that's what I'm trying to underwrite towards. So when I get to that place in, you're right. Not many of them meet that criteria these days. I just explained it to them. And so as to why and say, Look, I don't want to insult you with I don't I don't want to insult you with a lowball offer. So I'm not going to submit an ally. Unless you unless you direct me otherwise, I want to, but I want to stay on your list. And I hope that we can continue to talk about opportunities as they arise.

Brian Briscoe:

Yeah, we asked a very similar question what Randy said, we just said, Hey, here's here's our price right? Now, here's why is it even worth putting the Li in, you know, and sometimes we sometimes they say, yeah, shoot, shoot, and other times they're like, No, no, that's that's dead on arrival. So you know, use use the brokers. I mean, they're, they're trying to sell the property. They're trying to get, you know, as many good offers as possible. So definitely use the brokers as guidance on that one and just explain exactly what you're sitting

Randy Langenderfer:

with anymore. In Texas down here to where I'm at. We were a couple guys and I were made an ally on a 70 unit property. And 89 build in a tertiary market that we were thinking we're going to discuss competitions left, there were 24 different offers on the property and it went well above a whisper price. And so you know, I don't know how we compete in those markets. And I'm sure the West Coast is similar. I've heard it referred to that whisper price is starting price.

Brian Briscoe:

You know, we just I just talked about partner who is an acquisition or acquisitions director, and we had a property that we were looking at last week, the whisper was 4.4 million. And now the owner saying maybe I can get I mean, the numbers moved up, you know, it's just like, Okay, well, we met that price. And you said no, now now we're looking at Okay, well, that was the whisper price last week. What's the whisper price? Now? You know, this is kind of how it's working. But yeah, we're seeing that we're seeing that a lot more in the southeast. And we did a year or two ago. I think the southeast is a little bit it lags behind. Right now the Houston's then Dallas's. But I think we're at right now, where the Houston and Dallas were, you know, one to two years ago,

Randy Langenderfer:

Brian Armstrong, the only the only comment I'd make to the follow up, though, is I would say so my partner for this tertiary opera center. So call me says Randy, we didn't make any gifts, I give up, I quit. And I said, No, no, we're not going to quit. So I'd say the same thing to you. Back to the the why. And the reason to do this is be encouraged. Keep going. Keep keep doing it, you only need to find one, you don't need to find 100 Oh, it's not like structural engineering where you get to find a new assignment every several months or so. Right? It's true. Be encouraged. And you know, you're looking out for your future investors in yourself. So you're doing the right things? It sounds like,

Brian Armstrong:

Yeah, I like that comment you had there to mentioning to the broker that you definitely want to stay on the list and keep getting stuff. And just this one just wasn't the right combination, basically.

Randy Langenderfer:

So my partner on that vein recently, he did something I've never heard up to, but he actually recorded a short video and sent it to the broker as to why and showed them on you know, a shirt a screen and showed them the the parameters we were seeking. And he received very, very favorable favorable feedback from the brokers. He said, Wow, I've never seen anybody do that before. Find your own sweet spot there.

Brian Briscoe:

Yeah, sure. Yeah. I think if once you read it, reiterate what you're looking for, that can help the brokers as well. And so if you keep on telling them, Hey, you know, this is what we're looking for. And this doesn't hit it because of x, you're top of mind when I get something, make it those numbers, you may now be the very first call, because you've been giving feedback. You've been reiterating exactly what it is you're looking for. And when the broker looks at this, he's like, Oh, yeah. Randy's looking for something exactly like this. Because the phone? Hey, Randy, I got something for you. Well,

Randy Langenderfer:

there's so much today there's those parameters are so different. I mean, every investor, a buyer has a different set of parameters, weren't you, the three of us on this call here are never going to be able to compete with a 1031 exchange money where they've got to dump some money in 45 days, you just never know. You just never know,

Brian Armstrong:

that may segue into my next question is in regards to feedback it how fast? Do you generally like to give the feedback to the broker? I mean, is it you get the deal from them? Let's say via email, do you like to get back to them? Next day? Or is it just kind of like, as long as you get back? Within a few days or as quickly as possible? Or is there any kind of Have you found any particular success with anything on that?

Randy Langenderfer:

Great question, Brian, great question. I would say my process would be as I see, a blast are coming soon. My first reaction is is you have your own filter, right? Is it in my size? Is it in my sub market I'm looking for. And as soon as it hits those, I'll send a quick email blast back to the broker here in Texas. And I'll say, give me I asked the whisper price. I always ask does it have any flooding? Cuz that's a problem. And the Greater Houston market. And you know, those are my two big start off questions. And they always come back with a whisper price, its exits Why? And you scratch your head sometimes and ask how they came up with that but and so that's kind of my go, No, go then. And then if it's a go, then I so I spend a lot of time underwriting myself before I ever go back to the broker. So I'm going to look at in Texas, we have big issues with taxes and insurance. I get quotes from people and other vendors to ensure that my underwriting a sound, I don't put out a lot of ello eyes, I put out ello Eyes Only when I'm really comfortable with it. So I've been congratulated by brokers for the the depth of underwriting I do and rather than just putting out, you know, blanket, this sub market, it's x price per door. So but I think the brokers that I've talked to have respected that. Some are just looking for volume. But the market is just so crazy right now that i think i think you have to take some time because the counter of responding in 24 or 48 hours you have 72 hours with x price per door, and then you if you get the deal and you can't perform. To me that's the worst case scenario. your credibility is just shocked with that broker. So You're a structural engineer with, you know, redundant processes in place, I personally want to make sure that I think I can I can do this deal, before I'm ever going to submit an Li. And if that means Hey, Mr. broker, your time period is shorter than mine, I really appreciate it, but it just tell them that you're telling me your criteria, tell them your process, hey, I'm still working a W two job and I got clients I got to deal with, but you know, can I get back to you, and

Brian Briscoe:

sometimes we're spending probably six, six hours per deal on our initial, you know, just the initial underwriting, you know, and that's before doing a lot of other things. So we try to get back within a certain time period. But I think what Randy says it takes time to accurately underwrite, but we do try to get back with them, you know, real quick with question, let him know where we're at. And, you know, as we're, as we're underwriting it, there's always one or two questions, and it tends to be more of an iterative process, you know, it's not like 24 hours from now we're gonna have a price, you know, but 24 to 48 hours from now, we may have a couple of questions that we want clarified, you know, roofs, for example, you know, when is the last time the roofs were replaced, you know, if it has boilers or chillers, like Randy said was, you know, the thing you want to not look out for, ask questions like that, you know, just ask type of questions that you need to keep on sharpening your pencil. And I think that goes a long way. Even if it's not an offer price, or an offer or a number, just that iterative process goes a long way.

Brian Armstrong:

But yeah, it just shows you're, you're working through the details. Yeah.

Randy Langenderfer:

Let me advise not to buy a chiller boiler property.

Brian Armstrong:

I've heard that before. Actually. Yeah,

Brian Briscoe:

I'll take that to heart. And I've heard a lot of people who don't do flat roofs, we we've done several flat roof properties. And it's it's expensive to do a new roof. But it's I think it's one of many things you got to look at, you know, but Alright, that's it. We're about out of time. So one question for each of you to close up. And Randy, you go first, how can our listeners learn more about you,

Randy Langenderfer:

Brian? First, I just want to thank you for the opportunity. So the easiest way to get a hold of me is my web page is invest I am BST hyphen, ar k invest hyphen AR k COMM And there's a contact page on there that you can ping me or info we'd love to chat with you. Happy to happy to assist you in your journey wherever you're at. And if there's value to be added, we'd love to help you.

Brian Briscoe:

Perfect. And we'll link that in the show notes. So if you're if you're listening, you know, tap show notes and Scroll down and tap again and whisk QA and then Brian, same question for you. How can our listeners learn more about you?

Brian Armstrong:

Yeah, so LinkedIn is probably a great way to connect with me, Brian Armstrong, kala se on there se for structural engineer. There's a whole bunch of us, Brian Armstrong is on LinkedIn. So slight way to differentiate myself from all the others. folks can also reach out to me via email, my email is B Armstrong [email protected] Happy to connect with anybody who wants to talk about real estate.

Brian Briscoe:

All right, and we're gonna put links to your social media, your LinkedIn profile and your email address in the show notes as well. So anybody who's interested in connecting with him, you know, please do first of all, and you know, it'll be right down there show notes. But that said, thank you so much to both of you for coming on the show today. And that's a wrap. Thank you for listening to the tiger and 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, and leave us a five star rating on your favorite podcast app. And we'll see you again next week.