First Deal Episode with Scott Kidd

 Choosing the right contractors with Scott Kidd  as he talks about closing on a 13-unit apartment complex in Daytona, Florida.

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Scott Kidd
Scott Kidd has over 25 years of maritime experience, including new builds, refits, project management and yacht managment.  He is a licensed USCG Master of 1600 US tonnage / 3000 international all oceans. With a background in IT and a strong mechanical background in maritime, transportation, machinery and heavy equipment. Scott Kidd is very positive and energetic.  His cruising includes the Mediterranean, Gulf Coast including Mexico, Great Lakes, Atlantic Canada to Florida, Caribbean, Bahamas and South China Sea, onboard vessels of many types and sizes.  Scott Kidd has been a real estate investor for the past 10 years, and recently moved into the Multi-family apartment space. In the past 6 months he has invested as a Limited Partner in a 187 unit apartment in the Colombus, Ohio area along with a 13 unit apartment in the Daytona area, and an 8 unit apartment in the West Palm Beach area.  The limited partnership is a syndication and the two smaller deals are Joint Ventures.  He also runs a meetup group called Yachtie Real Estate Investors in Fort Lauderdale.
info@yachtierei.com
https://www.facebook.com/groups/212640527139275/
https://www.youtube.com/channel/UCrB5QxaDmVSb-kBu6BzgGwg 

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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 629 units worth $36 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

What advice would you give an aspiring investor who's maybe six to 12 months behind where you're at right now?

Scott Kidd: 0:05

I would say just keep at it. You know, keep analyzing the deals, going to meetups, keep trying to surround yourself with people that are doing what you want to do and keep in contact with them. You know, keep building your network. keep educating yourself, and just keep going. I mean, sometimes it takes a while. Sometimes every day is different in every day you get up every opportunity to try to make it happen. That's what you have to do.

Brian Briscoe: 0:45

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 fields 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 diary apartment investor podcast. I'm your host, Brian Briscoe with foreign capital got another great show for everybody today, one of our first deal series episodes. And today we have with us on the line, Scott kid from southern Florida area. So Scott, welcome to the show.

Scott Kidd: 1:24

Hey, how you doing, Brian? Nice to be good.

Brian Briscoe: 1:27

Thank you very much. And I appreciate your time. So tell us a little bit about yourself. To start off, you know, kind of kind of build a story up and tell us you know who you are and how you found real estate.

Scott Kidd: 1:39

Currently, I'm a professional yacht captain, and just recently gotten into multifamily stuff. Originally, I started like a lot of people in real estate I bought my first house because the captain that I worked for initially he hounded me said you got to buy something again. Just let your money sit in the bank here to buy something and then bought the house got married. Several years later, we were looking moved to a different neighborhood because the kids Poster The kids school, and then the house and then moved into another house different neighborhood, kept that for about five years, met a friend of a friend and he had owned a 46 unit apartment and he turned it around and sold it in quite a bit of money. And I literally asked him, I said you can do that. And he goes, Yeah, you can do that anybody. Really. So I started doing some research. And now it's and started meeting a lot of people it was a couple of years ago, we sold the rental property. And the intention was to get into smaller multifamily and larger multifamily. It took a while I found bigger pockets and everything and realizing a lot of meetups and I ended up meeting a lot of people. And I probably went to about 10 meetups and finally went to one that I met my current partner now years ago. And it was the first meetup that I went to that they weren't trying to sell me something. So fun was friendly and nice and talk about real estate told me about what they were doing. And I met a lot of people I still speak now. And it kind of just grew from there. And then a year and a half later. So partner net. She asked me if I wanted to be in long 13 in the Daytona area, and then it kind of started there and in the multifamily space, but before that I invested in a limited partnership. And that kind of because I kept going through all the analysis paralysis, putting in offers and that kind of thing that just kept the kept going and everything else and a lot of people were pretty encouraging in the multifamily space. I really like because it's team team effort and people are willing to to help out. And originally I'm from from Jamaica, my dad's making my mom's American. I grew up in Texas, okay. There in the late 70s. graduated from University of Texas did a lot of different things from it. My my pilot's license, had my own IP business in Austin, Texas. And then got laid off I was back in Jamaica and then got into boating through a friend of a friend that was in the Navy and went from there to South Florida and started buying my first house and that's kind of where it all started.

Brian Briscoe: 4:49

So I gotta ask the question is being a yacht Captain as cool as it sounds?

Scott Kidd: 4:55

Well, it has its days like, like anything else. I mean, are we Just got back from New England. And it was, it was a great trip, you know, I love being on the water for me. I'll be doing it until filming, I can't do it anymore. But it can be as it's trying on, it can be pretty busy. But the trip by itself was probably about seven, eight weeks straight, maybe a day or two off here. And there, we had a couple little breakdowns that we had to kind of just go straight through and solve and just keep going. For the most part, I love it. I mean, I love being on the water. There's nothing better than that, for me, and just being out on the passage, somewhere in the middle of nowhere. Seems to be uncomfortable for some people. But for me, I'm a piece I guess, because I'm single minded at that point, my focus is get everybody there safely. And don't think about anything else. Yeah,

Brian Briscoe: 5:51

you know, I've been on several, you know, big Navy ships, you know, in the middle of oceans, you know, I've crossed the Pacific a couple of times and been in Indian Ocean and lots of other, you know, oceans Gulf space, you know, seas or whatever, and that there is a certain beauty You know, I I don't know if I enjoy being on the water. But you know, there are times where I I just love you know, putting a little deck chair out somewhere, you know, and just just watching the water, it's it's serene, it's calm, it's peaceful, and I do at times enjoy it. I don't know, if I enjoy seven months straight on a on a ship, like, like I've been, but

Scott Kidd: 6:30

that can be, it can be kind of tough.

Brian Briscoe: 6:33

Yeah. So So God, so currently yacht Captain starting to build your real estate portfolio. One question, I like to ask everybody who comes on the podcast, you know, what's your big burning? Why? what's your what's your motivation?

Scott Kidd: 6:47

Oh, my motivation is basically I want to take my time back, I will have the option to choose whether I want to work on code or not, you know, through passive income, and, and more time with the family. You know, in this line of work, like a lot of lines of work, once you get to a certain age, you're not as desirable, like once a younger guy that wants to, but that's okay. You know, so having my 10 year plan, working on and working towards that, so I can give myself more options where I can just do deliveries, you know, some project management, because I'll still be involved in that. Like boats, like the water lucky that I get to do what I like, yeah,

Brian Briscoe: 7:35

yeah. You know, I think I think you hit the nail on the head. And a lot of people, you know, who who get to be, you know, our age, you know, we're close to the same age, but get to be our age have the same thing. You know, when I was young, you know, the idea now was active duty military. The idea of a deployment sounded exciting, you know, the idea of going somewhere new was was great. But you know, now 20 years later, when I look at some of the things like that, you know, if I were offered the exact same thing, I was offered my mid 20s. That'd be like, really? Do I have to, you know, I'll pass you know, but yeah, different learned that as I get older, different things are, are more important. And I tend to gravitate more towards staying with the family instead of you know, going away from the family myself.

Scott Kidd: 8:20

So its overall quality of life is is is all anyway, I can choose what to do with my time.

Brian Briscoe: 8:30

Yeah, absolutely. Absolutely. So let's talk a little bit about, you know, one of the deals you've done. Actually, before we do that, let's let's focus a little more on the meetups. You said you met your partner in net, at one of the meetups. Can you talk about, you know, how the meetups have helped helps you personally and how you that that team came together?

Scott Kidd: 8:51

Well, they helped me because just overall education, just in general, just meeting people and learning what books to read, what, you know, podcasts to listen to know who to kind of listen to and who gravitate towards just a lot of people are very encouraging and stuff and just meeting a lot of people that are like minded, that want to accomplish things and do do things in the real estate space. It's helped me because really, there's anytime I've had an issue or something, I can reach out to people in the network and say, Hey, what do you think about this? Or what do you think about this deal? What do you think about this? And what should I do about this issue? And I've also started my own Meetup group for people that work on yachts. So that's, that's, that's, I think it's evolving. It'd be nice because there are a lot of people that work on boats to buy houses and and apartments and stuff and a lot of our younger and, and I'd like to see them put their money to work while they are while they're on the water, that way they can have a transition off. Yeah.

Brian Briscoe: 10:06

Yeah, awesome. Now, we talked earlier, you're right before we hit the record button, but you've recently been involved in an eight unit and a 13 unit deal. One of the partners was the same in both deals. The other partners weren't, but can you tell me you know, what it took to be for you to become comfortable with with partnering with other people.

Scott Kidd: 10:30

It the main thing that made me comfortable was the main partner, pretty comfortable with her. And we went through the numbers quite actively in the location, and locations. And one of the areas on the eight unit is something right at right near a shipyard that's they're building, like 300 condos right near there. And I know the area very well, as a matter of fact, and looking, or the past, or five years in that area. And mostly it was her just going through all everything went to plan was and it was all pretty straightforward. And you know, her confidence in it made it made it easier for me to take on partners, because it was kind of a new thing for me involved with other people. I mean, I'd had business partners, or as usually just one other person. And be like, on the boats, we have a lot of people involved, sometimes just getting things done. So I'm okay with working with other people. I just are careful about who I'm involved with. But she hadn't explained to me that she's known these people for quite some time. And they've done things with them. So that

Brian Briscoe: 11:53

so So essentially, if you know, if I were to boil this down, you had a really good relationship with with Annette, you know, she has a lot of experience. And, you know, when she when she introduced you to the partners, you were relying a lot on her word, because you really trusted her.

Scott Kidd: 12:09

Yes. And seeing seeing that she has quite a bit of other other real estate and general partner and larger family stuff. It was a huge influx from anger, just a chance for me to learn, learn more and get the next.

Brian Briscoe: 12:28

Yeah, I think that's that's important to highlight, you know, you you were able to latch on to somebody who had more experience than you, you can rely on their experience and their network in a lot of cases to do something that you probably couldn't have done. Let me rephrase that not probably couldn't have done but probably wouldn't have done by yourself

Scott Kidd: 12:48

could loosely, but probably have taken a lot longer for me to get to this point. Now, without a jumpstart like that. Yeah, absolutely. It is a more of an opportunity and a learning experience more than more than the money that you will get me jumpstart me to.

Brian Briscoe: 13:09

Yeah, I mean, it'll pay you. But yeah, the opportunity. Yeah, I think there's a lot more to be said about that. And incidentally, when I started in the multifamily route, you know, I had a couple of people, you know, offered to help me and what I was really looking for more than anything else was the experience and learning for myself, you know, so that maybe I have somebody walk me through the steps on the first deal myself, but eventually, I wanted to do it by myself. And that's that's kind of an easy way to do it. you partner with somebody with experience, you learn the ropes in a little safer environment, you still make money. And then if you're less risk risk. Yeah. So you kind of flattening the learning curve and in a lot of ways, so let's talk about this 13 unit. Where's it at and what your role was,

Scott Kidd: 14:02

it's in the port orange, Florida, which is the NATO areas south of okay. It's not very not very far from the beach, or the bridge locations and we get he rents for on the market quite a bit. Initially, we were looking at doing a few rehabs of I think it was four or five of them of the units that needed to be redone. But that's been able to raise the rents and just do some light rehabs on them and get them on Mark initially on on for closing the deal I was involved with, you know, went through and helping set up the plan for inspection reports and what you know, prioritizing what what our plan was going to be moving based on what we needed to get on. And there wasn't a whole lot that needed to be done other than the roof which we're done here is turning your problem next Sweet. That's probably one of the major things weren't any large hurdles, but it now six months later, we've ended up having to do a lot less than we initially thought. I mean, there's been some quite a bit of sweat equity, we've all had to put in into it, you know, clean up and even, it's still evolving. But basically, the plan is going to be a refinance after three years, and it's going to be a long term hold. Nice.

Brian Briscoe: 15:28

What was what was the purchase price on this property?

Scott Kidd: 15:30

Initially, it was I think 1115 was the initial offer, ended up getting it for 106.

Brian Briscoe: 15:41

Okay. So it's just over a million dollar purchase price. Yes. And you said you had planned to do renovations? Do you do recall off the top of your head? What the The total renovation budget you guys had going in?

Scott Kidd: 15:55

So I don't recall, but it wasn't really heavy was mostly in the five units was a major, major thing was that was the roof. I want to say you guys are

Brian Briscoe: 16:07

doing right

Scott Kidd: 16:07

now. Yeah. Which we're doing now.

Brian Briscoe: 16:11

And you mentioned sweat equity. Are you guys doing some of the repairs? Or how does that work

Scott Kidd: 16:17

and turning over some of the units like some of the it's been painted and cleaned up? My pressure cleaning and stuff, and I'm paint works and why some of the light work, but we've been since been able to grow our network, find more people that are able to do the work, because initially, along with the place in the West Palm Beach area, it's been kind of tough to find subcontractors and handyman, people and stuff like that. So I had to do some, but it's it's all doable. It's all part of the art of the deal. And I don't have a I don't have a problem doing any of it if I didn't see it done. No problem for me.

Brian Briscoe: 16:59

Yeah, you know, and we found the same thing you say, you know, in a lot of areas, you know, finding good people to do the work tends to be a big challenge. Now, you know, I think the labor market is extremely tight in a lot of ways. And you know, when you're looking for good contractors, good people to work, there's not a lot available anymore.

Scott Kidd: 17:20

Yeah, there's there's I think there's there's been a big stop gap of big gap of skilled people especially, I mean, you can find anyone who easier but finding licensed plumbers, electricians, man, I don't know if they're still doing it these days. But remember, when I was in high school in Texas, they always had, you know, grade school types. skills were taught in high school. It doesn't seem like you're doing that much.

Brian Briscoe: 17:47

Yeah, yeah. I remember taking shop classes. Yeah. Working. I mean, working with power tools in school, you know, bands.

Scott Kidd: 17:55

Yeah. Welding and stuff like, and it's, it's difficult to find my best advice. Yeah, I don't. I don't think

Brian Briscoe: 18:02

those are even taught in school anymore. I don't know, maybe some of the more vocational type ones. But

Scott Kidd: 18:07

yeah, I think you have to go to a specialized school. Yeah, it's the same thing in the marine industry. You know, I have a networks are past 25 years. So I have a lot of people that I can call and I mostly just call people I know they're going to be there. And the price is not as much of an issue for me. Mostly. You know, I want somebody who's gonna get it done. And do it right.

Brian Briscoe: 18:37

Yes, what we have found is if you go with the the cheapest price, you usually end up getting it done a second time, you know, I mean, it's it's one of those things where Yeah, it's it's it's cheaper in the long run to go with somebody who you know, will get it done. Even if they're going to charge a little bit more, it's cheaper in the long run to go with somebody who's reputable and you know, is going to get it done right the first time. We made the mistake of going with a contractor that didn't do a good job. He came in he quoted us, you know, a price that we love to hear. We're like, wow, this guy says you can do each unit for this amount, you know, and he was going to do a whole bunch of them in a row but you know, when when it all came down to it, and we started looking at you what he didn't do right, you know, we found out that we had to go in and fix a lot of stuff and ended up paying not quite a nightmare but difficult.

Scott Kidd: 19:33

So cutting corners and everything else and and the guys that I'm used to calling and stuff are guys that I can leave alone, I know that they're probably you know, a deal with them for 18 plus years. I'm looking to build that same kind of network. If you have a good guy, you know, plumber, electrician, welder what have you. It's they're good, they're worth their weight in gold, because they can just keep moving from project to project. And the problem is that when find those guys, they're usually so busy and that so much work, that he can't get them, you know, but some sometimes it's worth the weight, you know, if they say they're six weeks out, okay, well, wait. Yeah, you know,

Brian Briscoe: 20:22

and I had a conversation with a local developer here in Idaho Falls, you know, about a month ago. And he said the same, same thing. He's like, hey, we have subcontractors that we like, and we know that they're going to do well. And he said, the last thing they want to do is let their subcontractors go work for somebody else. So he's Yeah, he's like he does, he does everything he can to keep those subcontractors as booked as possible. So they stay, you know, loyal to him in a way. So I think everybody's looking for that everybody's looking for the person that they can rely on that can do the good job, and, you know, be consistent and do do well, every time, you know, so. So you're you're building your network there? Are you looking at, you know, purchasing more in either West Palm Beach or the Daytona areas?

Scott Kidd: 21:07

Right? Yes. I'm basically looking at, you know, I'm bullish on Florida. In general, if it's just numbers have to work as the prices are, as you know, pretty high cap rates and press and everything else. And anywhere along that corridor. From i 95. Up is you get some areas are better than some markets are better than others. But West Palm Beach, I'm very familiar with the area because I work a lot in that area where the shipyard is. And it's it's the up and coming area. And there's a lot of places in Florida that are becoming, um, I'm planning to expand I have some family in Houston, but I'm not. Not quite there yet. I lived there for quite some time, but it's so much different than when I was there that you know, I have to go to go back there and spend some time there. Yeah.

Brian Briscoe: 22:08

Now that the two these two projects, you've done the eight and the 13 unit, they're both joint ventures. Do you plan on? What what do you plan on doing next? Do you plan on keep on looking for, you know, smaller joint ventures that you can you can get? Or do you plan on syndicating what's next for you,

Scott Kidd: 22:24

sum, I do plan on doing some more joint ventures, mainly, it's about the people that are involved involved with it. I'm also looking towards students and patients later on. But if the opportunity presents itself, and, you know, got away that pretty heavily, because there's be a great opportunity in that space, just work with it mainly about the people that I'm involved with, that's more important than the deal. Because you get a couple of bad people you get ruined any deal.

Brian Briscoe: 23:02

You know, I tend to agree, you know, I put people over deals, you know, all the time, you know, I will invest with somebody, you know, looking at looking at things from a passive investing lens, you know, I will invest with people that I know and trust, you know, regardless of you know, what pitch deck has the better numbers and on jayvees It's the same way, you know, if I'm going into a JV, you know, I want to make sure that I like the people, I trust the people. And, you know, we can work together. I think that's I think that's smart. You know, I think it's it's a good recipe for long term success. And, and not just the let's get one deal done, and you know,

Scott Kidd: 23:44

yeah, exactly. And for me, if, if the right people are involved, you know, I, I kind of put it in terms of are, are these people going to go the distance I know, for me, and just fine background and everything. I'll be the guy that stays the latest or what, you know, whatever it takes to get it done, like on the boat will, you know, I've been known to some of the cruises saying like, can we go to bed now? No, we're not done yet. Or not done. I'll keep going. Because when I look at it, as the leader on the boat, I have to be up earliest and afternoon to see the latest. I have to serve example for them to say that, you know, and to know that I'm there for them. And I'm going to go until it's finished and after them. So I know that, that that's what I do. So those are the qualities that I look for and other people. And that's really important to me, because problems happen, things change. Life happens. You just have to matters how people react, or you know, adjust to those variations because other things happen. And I'm pretty easygoing, and know that I'll take it step back for a second and kind of just go, okay. There's got to be a solution here somewhere. There's got to be a way we can get past. Yep.

Brian Briscoe: 25:10

And I mentality. I agree. I mean, you have to you have to kind of know somebody's True Colors, you know, know what, yeah, how they're gonna react when things get bad. And that's one of the things that you know, you have these character building moments you how are you going to react? You know, if, if someone's going to quit when the going gets tough that that's something you don't want to be when in business with that person? Because I hate to say it, but this business is not, you know, all roses and sunshine, like some people think it is. Yeah, there's a lot of, you know, a lot of work. A lot of, you know, a lot of things go wrong. You know, we've replaced two, you know, main water lines in the last month, which is not fun to deal with, but you still have to deal with them. And you have to, you know, do it properly and move forward. But, yeah, I think I think that you bring up some very important points there. So, so one question, and this is This, incidentally, is the question that's going to leave the podcast episode out. So no pressure, you know? What advice would you give an aspiring investor who's maybe six to 12 months behind where you're at right now trying to get their first first deal.

Scott Kidd: 26:22

I would say just keep at it, you know, keep analyzing the deals, going to meetups, keep trying to surround yourself with people that are doing what you want to do. And keep in contact with them. You know, keep building a network, keep educating yourself, and just keep going. I mean, sometimes it takes a while, sometimes every day is different in every day you get up, you have an opportunity to try to make it happen. That's that's what you have to do. It's not going to be easy. Like you said, it's not sunshine and rainbows. I mean, we hit out on the boat all the time. Yep. Next, or the next wave. It's sunshine rainbows. Yep.

Brian Briscoe: 27:05

And then there's another one. Yeah. So yeah, I like that. I like that. But you bring up some some really good points, you know, keep going is is such a lot of people need to do it. You know, you keep going you keep analyzing deals, you keep meeting new people, you keep talking with people who are in the business, you keep learning. And you know, if you make that an iterative process, you know, each time you're analyzing a new deal you're doing it with from a slightly different perspective with more experience. Each time you talk with new people, you're doing it with, you know, once again, more experience. And so eventually, you're going to make that break. So I think that was the the perfect recipe for success right there. So I very much appreciate that. Now, last question, how can listeners learn more about you?

Scott Kidd: 27:52

Oh, my real My email address is info at Yachty Rei calm. I also have a meetup group Yachty real estate investors on Facebook, a YouTube channel. That's where you can get a hold of me do the workouts once a month in Fort Lauderdale area, if anybody's in in the area in Florida?

Brian Briscoe: 28:15

Is it physical meetup or virtual?

Scott Kidd: 28:17

Physical meetup, I plan to do love those virtual because a lot of people I know on the boats in particular can be anywhere at a time that I'd like I wouldn't I would like them to be involved and not left out. Because there's a lot of people that are reached out and I'd like him to backfill some of the people in the group and you know, maybe buy some real estate or, you know, find out what they need to find out.

Brian Briscoe: 28:45

Perfect. All right. Well, hey, thank you very much for your time today very much appreciate it. And good luck to you in the future. And hopefully, hopefully those those units that you recently purchased, you know, worked out very well for you.

Scott Kidd: 28:58

I will well thank you for your time and thank you for including in this podcast

Brian Briscoe: 29:09

Thank you for listening to the direction 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 in 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 your phone app subscribe, and leave us a five star rating on your favorite podcast app. And we'll see you again next week.