105. Building Wealth and Balance in Real Estate with Shawn Griffith

Connect with the host:

LinkedIn: https://www.linkedin.com/in/brandon-e-jenkins/

Website: https://www.birchprosper.com/

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Connect with Shawn Griffith: 

LinkedIn: https://www.linkedin.com/in/shawn-griffith/  

Instagram: @twtmultifamily 

Facebook: https://facebook.com/twtmultifamily  

YouTube: https://www.youtube.com/@twtmultifamily

Episode Highlights:

✔️ Building relationships and leveraging experience

✔️ Family and work-life balance

✔️ Journey from military to real estate

✔️ The role of networking as an investor

✔️ Transition from corporate to real estate

✔️ Risk mitigation

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Transcript

SPEAKER_00 0:00

There's no sense worrying about stuff. She goes, worry is a waste of time. So don't, you know, don't put things off. Just take action. And you know, if that action doesn't get the exact result that you want, pivot a little bit and take some more action.

SPEAKER_04 0:20

How successful would you be if you had the blueprint for building wealth as a real estate investor or as someone who acquires small businesses? If you want to move the needle financially in your life, then you need to understand one thing the capital static. I'm your host, Brandon Jenkins, and this is where your journey to financial freedom begins. Hello, what's up, man? Welcome back to the Capital Stack. I'm your host, Brandon Jenkins, and I'm super excited to introduce our guest for today. You know, some of the things that I'd like to talk about on the show a lot, it's building relationships, leveraging past uh experience, professional experience, and otherwise to kind of help you in this business. And there are operators who do that very, very well, who are masters of building relationships and who are who are just excellent at sort of bringing those transferable skills to then have success in this business. And so our guest today is um has done that and more. And so I want to welcome Sean Griffith to the show. Sean, how are you doing today, sir?

SPEAKER_00 1:20

I'm doing awesome, Brandon. Thank you so much for uh uh hosting me today.

SPEAKER_04 1:24

Oh, absolutely. Thank you so much for being here. So um Sean is the co-founder of TWT Multifamily. Um is focused on a firm focused on creating wealth and cash flow through multifamily property investments with the goal of locating uh properties to add value to both the residents, the communities, and the investors um that partner with them. And so uh they are currently general partners in over 300 units, soon to be more than that, and um passive investors in over 3,300 units. And so we'll kind of dig into you know some of the uh the journey, uh Sean, that you've had also. Um I know you're big into coaching and mentorship, and um, and like I mentioned, networking and really just kind of helping people um along, all things that are very, very uh critical, I think, to this business. But I'm sure I missed quite a few things. I'll let you kind of uh fill us in on details, if you would.

SPEAKER_00 2:14

You know, it it it's uh when you when you've lived as long as I have, it's hard to distill it all down to just a handful of sentences, right? Yeah, but you did it, you hit all the major things. Uh for me, the really the number one thing is the networking. You know, anybody that's looking to start, whether they're uh a passive investor or they want to be an active syndicator, um, it's really about the networking. This is a people business. Uh, I always like to remind my team and uh you know my property management and uh our investors that you got to take care of your residents because without your residents, none of the rest of this matters. None of it. And um, you know, a lot of times people forget that they're just they're they're just out there trying to push and run it as a business, and they're trying to, you know, squeeze the bottom line for that last little nickel. And it's like, you know, I get it, we're running a business and we need to be profitable, but but at the same, you can do both. You can be profitable and take care of your tenants.

SPEAKER_04 3:19

Yeah, yeah, you you definitely can. And I think that's I like that you mentioned that because really um I think what's fulfilling about the business and what what leaves us sort of feeling full um after we've you know started a project or while we operate is the impact that we get to make on the tenants, on our customers, on, you know, I mean, they're they're they're there because it's not just because they need a place to stay. You know, they want an experience, they want to come home and feel like they're home. And, you know, and so um yeah, it's it is uh it is unusual that that gets overlooked more often than people would think, you know, because um it's not like this this is just a widget or something like that that we're selling, you know, and um you know, that doesn't have uh, you know, the um uh goals of their own and desires of their own and fears and pains. So, you know, I think that the best operators, and you just you just hit it on the head, the best operators really take the time to make sure that um when the tenants come to the property that they almost feel like, you know, I'm I'm escaping, you know, everything else, and this is such a nice place to be. I can be calm, safe, you know, have nice amenities. So yeah, I would agree. I think the best operators focus on that because without that, you really don't have, you know, you can't just look at a spreadsheet um and leave it there. It doesn't stay there, you know.

SPEAKER_00 4:36

Yeah, I was just reading an article uh this morning before we got on that was talking about, you know, the best property managers. Uh they're not out there uh micromanaging every little line item in their budget, they're actually talking to their tenants. Novel concept.

SPEAKER_04 4:56

Yeah, what do you know? Yeah, yeah, I I think so as well. I mean, so so so let's kind of talk about um about how you got your your start. Um and so one of the things that I didn't mention in the intro, but that is obviously super, super important is that you were in the service, right? And so um and so I kind of wanted to talk about your professional experience because you have a very uh and thank you for your service, by the way. And so you have a you have a very wide array of experiences. Um, and I like to tell people that listen, you know, transferable skills are just that you learn you can learn how to lead, you learn how to um break a process down and understand it. Um, you can do that and apply that in any number of areas. And so you work for Texas Instruments, you work for Southwest Airlines. And so maybe just talk about your your journey professionally and how that's kind of helped you um now.

SPEAKER_00 5:46

Okay, I'll I'll see if I can uh cram all that in for a time here. Um so when I was in high school, I enlisted in the delayed entry program. I had a guaranteed seat at uh electronics technician A School and then a follow-on to nuclear power school. I also applied for an ROTC scholarship at the same time. I know you'll be utterly shocked to know that the government screwed up the paperwork on my scholarship. So by the time they got it straightened out, I know what you know, who could imagine such a thing? So by the time they got it straightened out, I was already through ETA school and getting ready to head back to Orlando. And uh they ended up discharging me from active duty to inactive reserve. I went to school for four years, was commissioned, uh, went out to San Diego for a few months of training and then out to my ship in Pearl Harbor. Tough duty, but somebody had to do it. Uh, you know, great, loved that time out there. Uh, we did a couple of Westpac tours and uh uh ended up getting out of the Navy, uh going back to East Tennessee where I grew up, was planning on going to work at Eastman Kodak because one of the guys I had done a summer internship said, Hey, when you get out of the Navy, come back, we'll have a job for you. Well, guess what? They had a nationwide hiring freeze on because this was in the 80s. And um and so ended up down in Dallas working at Texas Instruments and uh worked there until they sold the defense group to Raytheon, and then Raytheon packed up and moved out of town, and I didn't want to move to Tucson and I couldn't afford to move to Andover, Massachusetts, because they didn't want to give anybody raises. And you know, you know, moving from a state with no state income tax and a low cost of living to Taxachus is just not an option. And um, you know, uh from there I did a little stint of what I refer to as creative unemployment. Uh, I did some access database babysitting for some small companies and then ended up at Southwest Airlines. I worked there for 14 years until I retired and went back east to help take care of my dad for a couple of years, did some contract work around there. And then after dad passed away and my uh contract jobs dried up, ended up back in Dallas. And I did a bunch of uh consulting jobs around town until a couple of years ago when I told the consulting company, hey guys, I I can't work for you anymore. And they go, Well, why not? What's going on? I said, Well, my CPA says this is a really good year for me to be a real estate professional. And of course, you know, they get this blank look and they have no idea what you're talking about. And I explain it to them and they have that that kind of that slow nod, like you know they're hearing you, but they just don't get it. Anyway, uh you know, I I took the plunge and and um went in as a real estate professional. But if you rewind that a little bit, my real estate investing journey overlaps in there. So about 12 or so years ago, uh, we got invested in our first deal. Um, you know, a friend of mine uh that I got to know um went we went to this uh real estate thing and um uh he got in and syndicated his first deal. And he invited me in and handed me the PPM and I read it and it scared the hell out of me. Uh because you know, you you know, it's 40 pages of legalese, right? Yeah at the time at the time. Now it's about 120 pages of legal ease. But um he uh he said, well, you know, you gotta go go take go take it to an SEC attorney and have them review it and and you know and get an opinion on it. And he introduced me to one and and and um you know I I blame him to this day for my uh real estate addiction because you know he explained everything to me. And you know, he he when he got to that 14 or 15 pages of things were you know, reasons you shouldn't invest in this deal, he goes, the only reason that should scare you is if it's missing. He goes, what it should prompt you to do is ask the sponsor, how are you mitigating all of these risks? And about 80% of them are are mitigated by you know having the correct insurance on everything. And the other 20% are mitigated by doing a really good job of your due diligence. And um, but anyway, fast forward to uh, you know, we invested in several passive deals over time, and then fast forward to November of uh 2020, uh, my wife and I were sitting around the kitchen table talking about finances and what retirement was going to look like. And we came to the realization that the bill of goods that Wall Street and corporate America had sold us wasn't quite all it was cracked up to be. I mean, you know, don't get me wrong, you know, we had money in our 401k and we'd had an okay retirement, but we'd have to cut back on our standard of living and cut back on what we give to our church and charities and cut back on our travel. As you can see by my background here, we love to travel. This is one of my travel pictures. Yeah. And um, you know, we we kind of looked and go, well, if we don't want to cut back, we're gonna have to have some other sources of income as we go into retirement. What are we gonna do? We looked at several options, and for us, the answer was syndicating real estate. So we found a coach and mentor, dove in headfirst. And uh we're we actually have our uh uh sixth property under syndication right now. Um, so we're we're excited to um uh move forward on that. And you know, we're uh we're just moving along the journey.

SPEAKER_04 11:14

Well, that is outstanding. I think you uh I think you did an excellent job, by the way, in summarizing that. You mentioned that you were gonna try to squeeze it all in. I think you did a very, very good job of it. Um and it is a um, you know, there's a lot to pull uh from that. And so that I definitely share, uh, appreciate you for sharing. So one of the things is, you know, I you know, I like to tell people that hey, things it some people might be fortunate, or I guess you could call it fortunate. I'll just say some people might have the experience of you know get getting within with one company, getting locked in, and then they hold that, you know, that role or stick with that company for the entirety of their uh working life. Okay. Um now I haven't I personally I don't know very many people who have, uh, to be honest with you. I certainly do not. But um but what I tell people is as you make the whatever adjustments that you have to make, you know, you still have to sort of have a vision and a goal in mind, and and also remember that, hey, the skills that you learn along the way are transferable to other things. And it sounds like um that's one thing that you've done uh very well is to sort of go between roles as various things have happened and make the adjustment and then still power through it um and get the most out of it. And I I tell people that because you know that's that's very important, I think, is to be able to focus on, you know, okay, there's a set of circumstances, but I still have the skills, and no one can take those skills, that skill set away from me. And so I'm gonna apply it to whatever my current circumstances are. Um, I the other thing I so I wanted to talk talk about the PPM piece as well, by the way. Um that's something that is super, super important. So a lot of people who, when they see that, they are alarmed. And I I love the way that you mentioned that the your SEC attorney said that that the time, the only time to get concerned is if that's not in there. So, yes, there's a ton of verbiage that says, here's here are all the reasons why you shouldn't do it. But that's that's essential. That's the core of the the PPM, really, is detailing the risks. So, you know, for the listeners, if you're looking at a at uh you know the paperwork on a deal and you don't see anything in there that's telling you the reasons not to do it, that's a red flag. The red flag is not to have the list of risks sitting in there ready for you to review and then have some questions prepared.

SPEAKER_00 13:25

I had an SEC attorney tell me, he goes, You can do pretty much anything you want to as long as you properly disclose it. He goes, You can burn investors' money if you properly disclose it in the PPM. Now he goes, why they'd want to invest with you, I don't know, but legally you can do that. So it's a good reason to read the PPM. Um obviously, the first time you invest with somebody, not only should you read it, you should probably take it to a an SEC attorney and you know pay whatever it is to you know a few hundred bucks to get them to review it and go, yeah, this makes sense and it's not got anything crazy in it. Um but um yeah, I you know, you as you get to to know and and trust your sponsors, you know, you can pay a little less attention to have to read. I've got one guy I invest with, I don't even crack his PPM open anymore. Uh but we've invested, I don't know, six, seven times with him. And you know, the guy's uh a really great operator. I mean, even though I'm an active syndicator, I still invest passively.

SPEAKER_04 14:36

Yeah, yeah. That's another thing I tell people all the time that I mean, as far as I'm concerned, I I'll never I'll never not be in the market for a good passive investment opportunity. I think that's uh you know, that always makes sense. And um yeah, and and you're right, it's it's the reality is the more of them you see, the more you you know you just get used to seeing them, right? They have because the first few of them that I saw, I read through every single definition as an example, right? And and and a good a good proportion of the document is just laying out the definition, who the parties are, um, you know, and that sort of thing. But it's super important to understand. But once you've seen a number of them, then you understand what that section at the very least will look like. Um and you and you know, you kind of have the things that your eyes are going to be drawn to, like you want to see the the fees, as you know, if there's the sources and uses and then any uh any risks in there that you're not familiar with. Um, you know, but uh yeah, yeah, I I think that's that's right. You know, if for sure for for any anyone who who's listening to this and and they want to kind of get into the a deal, especially if it's your first, you know, first or second deal, then take it to an SEC attorney to make sure you understand all of it. Um, because because I've I've seen people who they are excited about a deal, but it's the first time seeing the paperwork, and the paperwork is what stops them, you know, and so um, which you know, which that's that's one of those situations where it's kind of hard to know, okay, was it because they didn't take it in and and take it to an attorney and have it reviewed, or was it because the sponsor didn't have some of the things like we're talking about?

SPEAKER_00 16:02

Um, but um well, you know, a lot of it I think is you know, people naturally tend toward inaction. And a lot of that is you know, there's I've read a bunch of different uh, you know, reasons for that. One of which makes a lot of sense to me is that the brain is wired to conserve energy. So if you don't have to do something and you don't have to expend energy, that course is going to be more appealing to your brain because you're you're not gonna have to, you know, you have to make yourself stop and think. You know, and I think that's why so few people actually do it, is because you know, you really do need to make yourself expend that energy to go, well, no, I need to read through this and I I need to understand it. And you know, and now that I've done this, now that I've spent that energy, I need to go ahead and just you know, take that final step and put my money into this deal. You know, is it a sure thing? No. You know, life is not a sure thing. Well, and it is sure, you know, at some point you're gonna get out of it, but you're not gonna get out of it life. And you know, and that's you know, people need to realize that you know, it it's a calculated risk. You know, getting in your car, go driving down the highway, especially here in Texas, is a calculated risk. Oh, yeah. You know, um, and you know, people take risks every day, it's just that they justify it to themselves how they're doing it. Well, you need to do the same thing with your real estate investing. You know, you need to do your homework, you need to get to know, you know, good sponsors. And the way you get to know good sponsors is also get to know other investors. And because investors will talk. Uh, if if you get in a room full of investors and somebody mentions a name of somebody that's had a deal go sideways, guarantee you they're all gonna know it.

SPEAKER_04 18:02

Absolutely. And I tell you what, Sean, you so you you just touched on something that I think is is very important. I I share this with look, I share this with a lot of people because um, and this is around ecosystems. This is around um what I call the sort of added layer of protection that comes with being plugged into an ecosystem. And I know that we can kind of talk about that um as well, I would love to, because so here's the thing that you know, people have to, you just said it. Um getting with a community of investors is important for a wide number of reasons. Um, one of them that is a very practical reason is exactly what you just mentioned. So if there is an ecosystem that's worth its, you know, it's it's worth its uh its weight, you know, I don't know, it's it will have an interest in protecting the integrity of the ecosystem. And so if there are bad actors in there, they're gonna be ousted. Okay. And so what I normally tell people who are considering investing, you know, is listen, um, well, considering one investing into a mentorship program or an ecosystem, I say, listen, you want to get plugged in because the more you find these deals and the more you start to invest, you're gonna want to make sure you have that extra layer of protection that you will not have if you just go out into the open marketplace where you're finding, you know, operators are either coming to you or you're finding operators, but you don't you don't really have that direct line of communication to people who have known them for years or invested with them for years, whatever it is, or if you know that's that's what being in an ecosystem does. In addition to being able to have conversations one-on-one, I can like Sean, I can call you up and say, hey, listen, I was thinking about you know, I'm having this issue with a property manager, and uh, you know, what do you think I should do? And you'll be able to tell me exactly, hey, here the here are the three things you need to do to get this property manager lined out, or to get them to the table to get bought into the the forward plan. Um, things that can save tens of thousands or hundreds of thousands of dollars, and I can pick up the phone and have a conversation with you, and you'll help me uh you know eliminate that that mistake. Um, so yeah, just I wanted to get your your thoughts on on that, right? The benefit of mentorship programs, coaching programs, and ecosystems in this business.

SPEAKER_00 20:12

Oh, um, I can't say enough about it. I mean, um, you know, like I said earlier, uh, you know, we we got a coach and mentor, and you know, we dove in head first. Now, a lot of people think, oh, all I need to do is get a coach and I'll be successful. Well, getting the coach is the easy part. You still have to get off your butt and take action, right? Uh, you know, it's uh you know, that and that's again a lot of people, like I say, a lot of people tend toward inaction. You can't there's no there's no magic bullet, there's no you know, easy button. Uh, you know, investing in real estate i i in general is fairly simple. It's not easy. Um and and by that I mean there there's just there's a lot of things that go on. And you know, you you want to put together a good team, which again it goes back to this whole thing being a people business. You know, it's like, yeah, it's about the land and the buildings and uh, you know, the the business operations. But without the people, none of it works. It's just dirt. Yeah you know, it it's uh um you know, you you've gotta you've gotta put all of that together. And you know, like you said, that ecosystem, you know, it goes beyond just the um the sponsors and the investors and the residents. You've got property management, you've got CPAs, you've got due diligence teams, uh, you've got all of your maintenance guys, you know, for plumbing, electrical, HBAC, uh, carpenters, roofers. I the list goes on and on and on. I mean And you know, that whole ecosystem, uh, you know, you have people in there that do really great work, and you have people in there that do average work, and then you've got people that do less than average work. And, you know, when you're when you're talking amongst your fellow operators, um, you know, say, you know, hey, I, you know, I need uh I need uh a good roofer in Dallas, or I need uh a plumber down in Houston, or I need an electrician in San Antonio or wherever. You know, I I don't have contacts in those other cities. So I, you know, if I have a property there, I'd I'd be calling my friends down there going, hey, do you know somebody that can do this? And they'll recommend somebody. So yeah, so that that power of the networking, um the relationships, that ecosystem uh is hugely important.

SPEAKER_04 22:56

Yeah, yeah, absolutely it is. I mean, I think that um you know, it's so we're in a time where there's a lot of prop tech, right, that's popping up. And um and I've I've had conversations with people who who are really kind of chasing after certain types of prop tech that can make uh make it easier and almost circumvent the people part. And my response is always you'll you'll never be able to come up come up with something that's gonna get around that. Um and I understand it. I you know, look, there are other businesses where you know where the as technology improves, then you eliminate sort of the impact that that people can have. Real estate is just not, it's just not set up that way. It's it just isn't. And um, you know, and so I sure there are certain inefficiencies, like you you can have software to assist and strengthen and cut down on time, property management software. You know, you can have things like investor portals, you know, sure, those kinds of things. But ultimately, just because I have an investor portal, that doesn't mean that the investor is going to invest with me any sooner. You know, I still need to make sure that I have a conversation with that investor, build a relationship. That that stuff's always gonna be there. You know, it a property manager, just because I can connect with that property manager, you know, through some platform, doesn't mean, you know, that that if I pull them onto the team, that they're gonna be directly bought into the plan and they're gonna, you know, function the way that we need them to. So it's always about building relationships. And um, you know, I had a conversation with someone recently where they actually, and I'm not gonna say the name of the platform, but they showed me that there is a company that's trying to uh automate or a turnkey syndication, I think is what it what it essentially was. It was something, it was something to the effect of of trying to uh uh adapt or adopt the turnkey philosophy for a single family, but but fully turnkey to where you know they don't just give you the keys and now you're the operator, they operate it for you. So it's kind of a I don't know, it's kind of a strange thing, but uh, you know, yes, there's a lot of project that's going on that's attempting to do things that might make sense in other industries, doesn't make sense in this one, you know. And so I agree that the uh relationship is the most important. I also like that that the way you phrase what you're saying there is that people tend towards inaction. Um, you know, look, I I think that I think that uh many, most of us, I'll say I was gonna say many, most of us, we at least know what we need to do to get where we want to go. I I I I believe that. I think that a lot of times the when we look at the barriers and the hurdles, um, if it's not fear that takes over, it's inaction that that can take over. And I'm not, I don't mean to simp to oversimplify, you know, the issues that we face, but but usually we know what we need to do in order to move forward. But it just it just it's so much sometimes that it's like, well, I'm just not gonna do anything. And that's usually the wrong answer. Okay. So just like you said, when someone joins an ecosystem, that's the easy part. The work is still the work still needs to be done. You have all the resources now, you have the the the facility, right? You have the network, but that doesn't mean that you can sit back and rest on your laurels and the deal is just gonna fall in your lap.

SPEAKER_00 26:09

So I I had a friend of mine that was uh very direct. Uh we were in a room of maybe, I don't know, 30 or so uh people, and a lot of them were interested in being syndicators. And he just came out and said, he goes, 80% of you will never have a d you know, and and and you know, I thought, you know, I thought at first I'm going, man, that's that's a little harsh, but then the more I thought about it, I'm going, but it's true. You know, it's because that that 80% is not gonna do what's necessary. Um, you know, they're there because you know, they they they kind of see the dream, right? But but they're but they're not willing to take that next step and take action on it.

SPEAKER_04 27:02

Yeah. Yeah, that's right. That's right. And it's and it's also, I think, you know, we suffer with uh, you know, we we want too many guarantees. That's another thing. You you know, a lot of people who will only take action if they feel that they have something that's as close to a guarantee as possible. And um, you know, look, that nothing's gonna get done if you have to have everything 100% guaranteed. Just just that's just not how it works, you know. Um, so I think I think that's definitely kind of a part of the equation.

SPEAKER_00 27:29

I I guarantee I guarantee them that you know the the very first time they try something, they're gonna fail.

SPEAKER_01 27:35

Yeah, yep, there you go.

SPEAKER_00 27:36

I don't know how many deals I underwrote before I got one that was even close enough to submit an LOI on. And then, you know, the first probably half a dozen or so LOIs, uh I didn't even get a callback from the broker. You know, it's like, what is this? You know.

SPEAKER_01 27:55

Yep, yep, yep.

SPEAKER_00 27:56

You know, it but yeah, you know, it it's you you've gotta, you know, you you've gotta be willing to take that next step and you know, slip in the mud, fall on your face, get up, and then take the next step. You know, you just have to keep after it.

SPEAKER_04 28:10

Yeah, you do. You have to have that grit, right? That constitution that sort of says, I'm gonna keep moving forward. Um, so um, so okay, so let's let's talk a little bit about because you're in the Dallas market and um and your portfolio is almost excluded is it exclusively Texas markets or yeah, everything that we own directly is in Texas markets.

SPEAKER_00 28:31

We're passively invested in one in Alabama uh and a couple in Arizona. Uh, but yeah, for the most part, uh Texas.

SPEAKER_04 28:41

Okay, and and so for me, it's clear that uh I you know I love the Texas markets. Okay, so so um you know I I lived in Houston for 10 years. I started buying uh I started buying single-family uh properties outside of Houston, then I switched into multifamily and focused uh predominantly in the Texas markets, but have some outside as well. Um, but so for the people who might be wondering, though, who are not as uh certain as as the two of us are that it's an outstanding market, why Texas?

SPEAKER_00 29:11

Well, uh one, I live here, so you know it makes it I so if one of my rules is if I invest in a property, somebody on the team needs to live near the property. There is no absolutely no substitute for driving by, putting eyes on the property, um, you know, sticking your head in the office, talking to the staff, making sure everything's going well. Um that being said, um you know, Texas is, you know, and you'll you'll hear these phrases over and over. Uh Texas is a business friendly and landlord-friendly state. Uh my first property down in Cleburn, uh, we were actually able to evict people during COVID. Um if we could show the judge that, you know, we did, you know, we we filled out all the paperwork for them to get assistance from the state, and you know, um, and they refused to do what they needed to do, which was either go online or sign something or whatever. And, you know, we basically did everything for them, except, you know, go push the button, you know, because we we can't do that. They they have to they have to do that themselves. And you know, the judge said, okay, you know, they're you know, he goes, I I can see here you've done the paperwork. Uh he goes, they're out.

SPEAKER_02 30:42

So yeah.

SPEAKER_04 30:45

I mean, and it's it, yeah, because that there was a time for sure where there were a lot of people. I saw I was in a deal, um, a deal passively also in in Texas, where the operators did the same thing. They did absolutely everything that that any of the tenants would have needed to do themselves. Because if you're in a, you know, under normal circumstances, uh, when there's something that that tenants would need to fill out for any kind of assistance, no one's going to actually do it for them. Well, these guys, just like you mentioned, they went and they did everything for them to make sure that that the only thing they had to do was click a button, like you said. And so it was definitely a time where there were people who um, although we were facing an international um crisis, who were still looking for opportunities to uh sort of get get by and take advantage of the systems that were in place. There's no question about that. Um, and and so I want you know, I want to actually mention something too. This is around uh what it says, what someone means when we say business friendly, because here's the reason why Texas you know is a great market from that standpoint. If you look at companies who are leaving other states and cities to move to Texas, you know, there are reasons why they're doing that. And when they come, people that's population, that's jobs, that's growth, that's investment in the in whatever their local markets um are. You know, so it's for people who are used to hearing us say landlord-friendly, business friendly, we we mean it. You know, it's not we're they're not even just kind of thinking, yeah.

SPEAKER_00 32:13

Yeah, if if you're if you're both landlord friendly and business friendly, all those other things will happen. Businesses will, you know, will flock to where you are because it's a good simple place to do business. You know, the state doesn't get involved in you know aspects of your business, um, trying to tell you how to how to run, you know, it it's capitalism, pure and simple. And you know, if you're in other states uh where it's less business friendly, and you know, the state government is trying to impose rules on how you do business because they think it's not fair or it's uh for I I don't know, whatever reason they think, right? Um, you know, and they make it hard on businesses to conduct business, whether it's uh you know a lot of legal things or taxes or whatever, all of that expense, they don't realize all that expense gets added into whatever product or service that those people are providing. Well, that's why you've got like places in California, you know, the rent for like a studio apartment's three thousand dollars a month. I mean, it's nuts. Yeah. And you know, my house payments not even three thousand dollars a month.

SPEAKER_04 33:37

Yeah, yeah, that's right. I mean, and and there's a it's there, there's a very uh material um sort of uh impact that it has on the consumer, on the the you know, the the city or the town or or wherever, you know, when you are in a place that is business friendly and um and and landlord-friendly, uh versus one that's not, you know, because like you said, that those costs get passed on. That's that's why, you know, so that's a good point. That's part of the reason why when you look at areas that are not business friendly and and uh uh they tend to be higher priced markets, don't they? I mean, if you think about it. Now, I'm not gonna, you know, I'm I'm simplifying the issue, but but again, it's all related, you know. And so uh yeah, I that's I just want to expound on that because I think that you know, we say that and I'm and people kind of get confused sometimes, but it's like that's this is what we're talking about. We're saying that everything that's good that comes from in terms of growth, um, it it starts with an area that is business friendly. That's just kind of what it is. The only other the only other benefit might be something that's um sort of uh geo maybe landlocked, like if it's on a beach or something like that, where you can't recreate, you know, something like that. Right. But um so so one I want to talk about the types of deals as well that that you that you uh uh look for. Like what's what's kind of your criteria um in a deal?

SPEAKER_00 34:55

So the perfect property for us is around uh 200 units, uh class B, 1985 and newer, um, you know, in a uh uh a good high income area, um you know, with uh just a lot, you know, really good schools, really good employment, you know, all the all the indicators that you want. Um now, of course, that being said, every property we've bought so far has been uh you know 60s or 70s properties, um, and they've all been uh light to moderate value add. Uh we've got one under contract that's a heavier value add, but um, you know, uh they're they're in you know, they're in good solid areas, and that's probably the main thing I look for is I look at the area before I even underwrite the property. Um, because if the area doesn't meet our initial screening criteria, we we skip it.

SPEAKER_04 36:03

Yeah, that that that's important as well. So that's it's kind of schools crime, right? And and and the path of progress, these sorts of things. Yeah. Because it's important to think, like, okay, well, if I'm a tenant, you know, what am I going to look for, right? What if I if I especially if I'm a tenant that's in a in an affluent or um an area that has uh and I'm gonna qualify that it the tenants that you want to have.

SPEAKER_01 36:25

Yeah.

SPEAKER_00 36:26

You know, you you you want you want better quality tenants, and and if you you know, if you get a uh a property that's in a less desirable area, you're probably gonna end up with less desirable tenants, and you're gonna have uh, you know, more issues with crime, uh, more issues with non-payment. I mean, you know, we we spent two years training people you don't have to pay your rent. And and there's still a few people out there that think they don't have to pay their rent. And you know, there those people are going to end up somewhere. I, you know, they they need homes. I just don't want them in my properties.

SPEAKER_04 37:11

Yeah. I mean, you know, and so that that's a great point, right? It's it's kind of like uh the the the three things that if you think about kind of the psychology of of um a consumer or or tenant, there's right that price conscious, quality conscious, and I forgot what the other one is. Um, but um, but essentially what what we're talking about here is just you know focusing on someone who really has um who cares about quality, right? And so because they're they're gonna take care of the property, they're gonna pay on time, they're gonna make sure they that they're that their personal, their record um is is clean and that it doesn't have any you know delinquencies, these sorts of things. And so that's the kind of tenant that you want to attract as a as an operator, you know, as a property owner. Um, you want someone who's gonna take care of your property, someone that you don't have to uh be concerned with. Hey, are they, you know, are they gonna pay or are they do we have to come up with a new agreement with them every month, some kind of a sign, you know, I'll pay this half for the before the fifth, and then I'll pay a third, you know, the week after that. You know, it's just that kind of stuff. It's it the the way to have success in this business is to reduce those types of risks and and sort of come up with something that's as close to solid as possible so that you can actually have some projections that may make sense, you know? And um, and that's the way to do it, you know. So um so I want to get your take on kind of on what we're seeing right now, right? Because you're you're still very much active in the in the marketplace. Um, I think that this is a time to be active. Okay, and so um but what what's your take on finding deals right now, right? So we're in a time where we've got the interest rate hike that's the I believe the the fastest or steepest um in the shortest amount of time that that we've ever had in history. Not not necessarily the highest rate, but um the rate hike nowhere near the highest, yeah. Not yeah, nowhere near the highest, but certainly the in terms of the rate of increase, I think it's the the fastest, I believe. So what what do we kind of you know, what are you seeing in the marketplace and how can someone still uh you know find find good opportunities?

SPEAKER_00 39:08

Well, again, uh 95% of this business comes down to relationships. Um you know, you're really the only ways to find properties are you either know a good broker that has access to you know properties, or you know other operators that you know are getting ready to sell, uh, or you've done some kind of um you know ad campaign to you know scare up you know off-market deals on your own. And um I don't bother with the last one. Um I generally will only go through uh brokers. Um I would never turn down a good off-market deal if one landed in my lap, but you know, the true off-market deals are exceedingly rare. Um, you know, when when a broker calls you with an off-market deal, you know, he's sending it to you and 30 of his good friends. Yeah. Um, you know, and and you know, and that's you know, he's but what he's trying to do is is he he is you know, he is shopping it out to people that he knows that are likely to close the deal. So when they say it's all when a broker tells you something's off market, that just means they're not putting it out on their website or doing whatever, right? They're you know, yeah, and usually you've got three to five days to get an answer back to them before it does end up going on the market. Um, and sometimes that that lead time is it makes all the difference because now you've been able to you know put some time in and look at the area, look at the deal, look at the you know all the data uh and analyze the property. And you know, you can make a pretty good guess at what a what's a good offer on that, and then you can go back to them and go, well, here's where I came in at. And you know, depending on how unreasonable their seller is, um, you know, they'll they'll accept it, or they'll say, Well, you know, because I I'll usually call the broker and go, hey, uh, you know, uh, here's where I'm coming in at this. Do you want me to submit the LOI or not? They'll tell you yes, because you know, if you're unless you're just trying to be, you know, really stupid and just super lowball stuff, the the broker's gonna go, well, that's pretty close to you know reality. Uh, but the seller may not be close to reality. So the broker will use multiple offers to go, hey, look, you know, you you the offers are down here and you're way up here. Um, here's what the market's telling us. You know, you're you you're you're asking too much. And what I've seen over the past year is that the prices have softened somewhere around 20 to 25 percent.

SPEAKER_01 42:01

Yeah.

SPEAKER_00 42:02

Um sellers have started becoming a little more realistic, um, especially the closer they get to their rate caps expiring if they have a floating rate loan, the more realistic they become.

SPEAKER_01 42:14

Yeah.

SPEAKER_00 42:15

And uh, I mean, just a quick example, the property that we have under contract uh was up for sale last year for, I don't know, 27, 28 million dollars. And uh we put in a uh an LOI at 24 and we were not invited to best and final. Uh the guys that won it uh ended up not being able to get financing for it, so their deal fell through and it went off the market for a couple of months, and then it came back on the market. Well, by that time, you know, with interest rates and everything else, uh the pricing had adjusted down to about 24 million, and we put an offer in at 22 and uh came back and we were invited to best in final, but we didn't win it. And the guys that won it spent three months, months negotiating the PSA. That's normally that's a normally a one or two week process, you know, three at the outside. And I'm going, holy cow! And the broker and the seller finally said, Hey, that's enough, we're done with you people. And they came back to us and said, Hey, is your you know, is your 22 million offer still good? And we go, no, because the interest rates had changed some more. And so we went back and you know put in a new offer and uh and we have it under contract now. So you know, it's one of those things where you know the the brokers are always looking for uh a team that can close because certainty of close is a very big thing for them. Because here this broker's you know spent like a year plus of his time. Um an effort marketing this property and still has nothing to show for it.

SPEAKER_04 44:07

Yeah, you know, you made so many good points in that. And, you know, you're right. It's I think that people who are not uh really understanding kind of the perspective of brokers um in this business, they get all frustrated with them. But it's like, well, listen, surety, like you said, surety of close is uh of the utmost importance um to them because if they know that they're going with a team that can close, um, they'll choose that team, you know, over someone that gives them a price that's over-asking, you know, because because of the experience that you just laid out. You know, you can spend a whole year and that and they're still working on this deal versus going with someone that they know can close and then cut that time out entirely. Um, and I also want to make a point on the uh um how you were talking about off-market deals. You know, there are a lot of people who who spend a ton of time trying to find their own off-market deals. And listen, there are times where it works, but but how you have to think uh in very simple terms, how are you going to compete with a broker who's doing that all the time? They're going around shopping, they're they're doing it with with tools and systems and teams and things that most people can't uh replicate. And they're going to having conversations with these owners. And usually owners will be uh much more inclined to have a conversation with a broker than they would with someone who just kind of sends them a letter. Um, you know, and so that's something I don't want to discourage people who are kind of shopping um and who spend you know a ton of time looking for off-market deals, but depending on the market, yeah.

SPEAKER_00 45:28

You know, I I would I would say to these people that that are doing that, you know, that's great, you know, keep doing it, but don't don't just rely on the letter. This is a people business. You need to get in there and you know, whoever, you know, if it's a mom and pop that's owned this thing for 40 years and they're ready to retire and you know hit the road in their RV or whatever, um they want to know that you're gonna take care of their property and take care of their tenants. And they're not gonna get that from a letter. They, you know, they're they're gonna they're gonna what your letter needs to do is entice them to have a conversation with you and so that they get a chance to get to know you and decide if they want to trust you to take care of the because I mean that's their baby. You know, they've probably lived on the cash flow on this thing for 40 years, and you know, they've taken care of it, they've taken care of the tenants, they probably know all the tenants, all their kids, all their grandkids, and you know, it's it's it's their community, and so you've got to put yourself in their mindset of why would I want to sell this to you?

SPEAKER_04 46:42

Yep. Yeah, absolutely, absolutely. I think that's I think that's the right view to have on it. It's kind of like listen, you have to it's it's a respect thing, you know, it's a people business and it's a respect thing. They, you know, they they've been uh working on this for for years, and you know, like you said, it's probably been their way to make sure that their family is financially secure, take care of their children and all this kind of thing, put them through school if if that's the case. Um, and so it's a matter of respecting it and certainly sending getting a letter in the mail, you know, that that's something that they're just gonna rip up. There's nobody there to shake their hand and have a conversation with them. So um, and brokers do that, you know. I mean, so it's so so that's kind of the challenge of this.

SPEAKER_00 47:20

The good ones do, yeah.

SPEAKER_04 47:21

The good ones, yeah. Um, and so um, you know, so I think, yeah, I absolutely I think that that's oh, you know, I was gonna ask a question as well. So we're in a time right now, right? Transactional volume is low. And what I usually tell people is look, this is a good, if you're new to to this, this is a good time to start uh picking up the phone, going to have lunch and coffee with brokers, because you know, some people feel that you have to have a track record before you can even have a real conversation with a broker who's going to give you a decent deal. Um, and that may or may not be true, but but the bottom line is right now, you know, in in many markets, the the volume is lower. And so this is a good time to, you know, they'll have a little more time, right? Arguably. And so I tell them, listen, connect with the broker now because when you went when we're on the other side of this, that relationship will, you'll, you'll, you will have built it or at least um started to build it. And then now they're you're the you'll be on the list of people that they're going to call and send you a deal. You know.

SPEAKER_00 48:14

Yeah, and and you know, and a lot of them, you know, they're not real big on wanting to meet and have lunch or coffee and stuff until you've done a deal with them. So, you know, what I recommend is that you know, try to go to where they're gonna be. Go, you know, like networking events, uh, like in Dallas, uh, a lot of the old capital events, you'll find brokers there. Uh, you know, some of the other meetup events you will find some brokers. And those are the brokers you really want to get to know anyway, because they're out there, you know, meeting the operators, uh, you know, talking to them. And that's the best way to you know make the best use of their time. Like you said, now right now, you know, volume's slow, uh, you know, they're they're not super busy, but trust me, they're out there busy, you know, trying to find properties that they can sell.

SPEAKER_01 49:14

Yeah.

SPEAKER_00 49:15

And, you know, you know, if if you if you call them up and and say, hey, let's have coffee, they're probably gonna tell you no, especially if you're an unknown commodity. Um you know, now probably a better way to approach getting to know a broker is you know talk to them about a deal they've got up for sale.

SPEAKER_04 49:39

Yeah, underwrite the deal.

SPEAKER_00 49:41

And and say, hey, I I'd I'd like to underwrite this. I use I'm new, uh, I wanna I want to take a look at this property. Um, and then would would you be open to uh me asking you some questions about it once I get it underwritten? What are they gonna say? Of course, you know, they're they're they're they're open. So while I love having coffee just as much as the next person, you know, you've got to again, you've got to put yourself in the shoes of that other person, in this case, the broker. What's the best use of that broker's time? Uh and it's not to come have coffee with one person, uh, even if that one person is, you know, his number one client. It's probably not the best use of his time. Um so you you, you know, that that's why when I try to connect with the brokers, I try to do it at the networking events because now they're in a room full of people, and that that's more effective for them and for me.

SPEAKER_04 50:40

Yeah, yeah. No, that that's a great point, right? It's it's meeting people where they're at. Like if they're you know, you go to an event where they're already in the mindset to connect and and and establish relationships, you go there and you can take advantage of that. Yeah, absolutely. Absolutely.

SPEAKER_00 50:53

Absolutely.

SPEAKER_04 50:55

So, um, so so Sean, what's what's kind of what's next for uh TWT and and what uh what what kind of direction are you are you headed in um here well from a from a from a travel perspective, we're gonna be headed north.

SPEAKER_00 51:08

Uh the picture in my background here is actually down in Antarctica. We went there in February. Beautiful picture. Oh, thank you. Um that uh that that's actually a six-person mini sub we got to go down in, and that was way cool. Um but our next trip is uh is headed up north to the Arctic. Uh, we're gonna be out looking for polar bears and narwhals. Uh from a business standpoint, you know, we're looking to do, like I said, we know we have one property under contract right now, and then uh we've got another uh uh we're we're we've opened the floodgates to start looking at uh underwriting again now that this one's under contract. Uh we'd like to close one more in addition to the one we have under contract by the end of the year. Um, yeah, we'll see.

SPEAKER_04 51:58

Well, that's outstanding. I'm rooting for you. I think uh, like I said, I'm um I'm loving the continued momentum. So it's congrats on on the deal that uh that you're working on now. And and um you like to stay kind of looped in on the other ones as well. So absolutely congrats. Um, you know, Sean, I want to say something real quick. So this is normally I get to this this part of the show. This is kind of the actionable tip part of the show, but uh I actually want to make this unique to your situation um because it sounds like in your journey, uh, you started kind of after a certain point in your career. Okay. And there are a lot of people who say, ah, you know what, it's too late for me to start, and da da da. But um that's just not true. Okay. And what would you say though to someone who maybe is at the point that you where you were before you got started and they're doubting themselves because they think it's too late? What would you say to that person to say you you can start now?

SPEAKER_00 52:51

Uh, you know, um uh Colonel Sanders did not found Kentucky fried chicken until he was like 65.

SPEAKER_04 52:58

Oh wow, I didn't know that.

SPEAKER_00 53:00

So it's never too late. Um, you know, my my my grandmother was was a big proponent of you know, things fall into two categories things you can do something about, so you do it and and move on. And things you can't do anything about, you pray about it, you give it to God, and you move on. There's no sense worrying about stuff. She goes, worry is a waste of time. So don't, you know, don't put things off, just take action. And you know, if that action doesn't get the exact result that you want, pivot a little bit and take some more action. You know, uh I I'd be lying if I said uh, you know, I'm an overnight success, you know. I I'm an overnight success that took over 12 years to get here.

SPEAKER_04 53:55

Okay, and so um so Sean, I also wanted to talk to you about um your book, right? You've got a new book coming out, and why don't you kind of share, I guess, some details about it, maybe what inspired it and and who it's for.

SPEAKER_00 54:05

Okay, yeah. Um, well, yeah, like I said earlier, you can tell by my background here that uh my wife and I love to travel. And uh so I'm combining two of the things that I love to talk about, which is travel and real estate. And the the book is targeted at uh people that really want to up their travel game, whether it's you know the style they travel in, whether they're moving from coach to you know premium economy or first class or maybe even private. Um but they want to they want to lift up the style they're traveling in or uh or perhaps the uh the frequency that they travel, they want to travel more often. And you know, and using real estate investing as a vehicle to fund that. And so, you know, put talking about putting together a longer-term plan where you know, if I want to be able to start taking uh, you know, three or four really nice international trips a year, you know, if I start today and start investing over a five-year plan, then you know, in five years, as properties start selling, I'll be able to fund the the travel that I want to have. So that's kind of you know, that kind of got me started thinking about it. I'm going, well, how can I do that? So I'm writing of the book that talks about and kind of blends our journey that like we spoke about earlier, along with um, you know, how to how to plan and grow and and the things you need to consider, uh, you know, all the important things that we talked about, like the relationships, you know, the ecosystem, that all of that, coaches, mentors, you know, the ongoing training, the mindset, you know, everything that's you know important uh to being able to develop a great real estate portfolio with the aim of funding your travel.

SPEAKER_04 56:10

Yeah, I love that that topic because you know, um honestly, I think that you know, we we talk uh quite a bit about building wealth, preserving wealth, these kinds of things, but you know, we don't often um talk about kind of what what to do with it, right? Or or it's it's for most of us, or really for all of us, it's a vehicle, you know, to get us to it's a means to an end, essentially, right? It's one that we're passionate about. But in the end, it's it's how will you then use that to make an impact on yourself, you know, on your well-being, maybe if you have children on your children or in your community or whatever. If you're philanthropic, then you know how would they how will you then use your uh this wealth to make an impact on someone? And so um, so I I love that that topic because I think it's very important to discuss. And you we just don't hear it that often, you know. We we all love to, well, well, I think most people love to travel. Um, and so I think it's great that you're saying, hey, this is uh a way to then use what the cash flow or or the payoffs and distributions, whatever it is, to use that towards something that you're passionate about. And I think that's very important.

SPEAKER_00 57:15

Yeah, and I think too that, you know, a lot of people, you know, sometimes they don't understand all of the benefits of travel. Um, I'm I'm a huge proponent of when kids graduate high school in the U.S., I think they should be given a choice. They go in the military for two years and you ship them overseas, or they go in the Peace Corps for two years and you ship them overseas. Either way, you get them out of the country for a couple of years, you give them a chance to grow up a little, experience some of the world, and maybe figure out what the heck do they want to do when they grow up, because uh very few people coming out of high school have a clue what they want to do, you know, long term. And and most of them really need that experience, you know, that personal growth of you know, meeting people in other cultures, seeing how the rest of the world lives. Um, and then you know, when they come back here to the good old USA, maybe they'll appreciate what it is we have here just a little bit more.

SPEAKER_04 58:12

Yeah, absolutely. And I think I think that having that perspective is extremely vital and important. They can also kind of come back and understand a little bit better maybe what their what their uh their calling is or what their place um in all this is and what what what what path they want to go down. Um, you know, so I I think that's a very important because really what happens is that's that's um in a sense, that's the worst uh period in in life to make a long-term decision, right? You just got to the point where you're an adult and you just got freedom, and now you're gonna say, I got to make the decision that's gonna, you know, determine the better portion of the of my life, you know. So um yeah, I think I think exposing them to something that's like, okay, well, that will open their mind instead of close their mind, you know, I think is uh is is essential. So and are you doing kind of pre-pre uh what's the timing timeline of the book and maybe pre-sales or kind of what's what's the strategy there?

SPEAKER_00 59:02

So the the rough draft is complete. Uh I finished the initial round of self-edits and it's going off to my uh editor uh uh to be copy edited uh this week. So yeah, the the next the next steps will be uh recovering from all the things my editor, I'm sure, is gonna tell me. Oh, you need to do this, you need to do that. Oh, this this is bad. You know, move this around, you know. So you know, I I'm I'm I'm I'm sure uh I'm sure she'll be very nice with everything, but uh uh but I told her I said don't you know don't don't uh don't pull any punches. I said, you know, I I said uh I want I want this one to be good. And uh, but yeah, you know, the one once I get through this round of edits, then we'll start looking at uh you know developing a launch team, uh, you know, putting together a group of people that can uh review the book and uh um and of course getting a cover and all the other stuff that has to happen around uh getting the book published.

SPEAKER_04 1:00:05

Yeah, well that that's incredible. And and just wanted to congratulate you on having the the rough draft finished because I'm sure that um you know that's something that uh that that takes some commitment and and time. And so um congratulations on that. And so we're looking forward to hearing more about that. And um, I'll even update kind of the show notes and things as as the book progresses so that um you know people can have um a link to it. Maybe I'll do like a mini kind of uh mini episode or something that we'll talk about uh the book once it releases and stuff.

unknown 1:00:30

Okay.

SPEAKER_00 1:00:31

That'd be great.

SPEAKER_04 1:00:32

All right, all right, good, good stuff. I I just um again, I I think your journey is an incredible one. You know, you have a ton of experience, and um your story uh you know is very, very impactful. And so I appreciate you for uh sharing your story. And so for the listeners who want to reach out to you, get connected, hear more about you, how can they do so?

SPEAKER_00 1:00:52

Uh the easiest way is to hit our website. It's uh TWTmultifamily.com. And all my contact info is there.

unknown 1:01:03

All right.

SPEAKER_00 1:01:04

Shoot me an email.

SPEAKER_04 1:01:07

Sounds good. I'll put that in the show notes. And again, Sean, thank you so much for being on the show. You really added value to myself, to the listeners. I thank you for your time today.

SPEAKER_00 1:01:15

Well, Brandon, you're most certainly welcome. I really appreciate you hosting and um and look forward to uh you know future conversations.

SPEAKER_04 1:01:22

Absolutely. As always, thank you so much for tuning in to the show today, brought to you by Bridge Prosper. If you enjoyed today's episode and you'd like to learn more about commercial real estate investing, please like, subscribe, and share. And we'll see you again next week. I'm Brandon Jenkins, and this is the Capital Snack, where we help you learn, apply, and