Hayden Duer: How to Build Wealth Through Multifamily Real Estate Without Becoming a Landlord

In this episode of the Passion Millionaire Podcast, Robert Roth speaks with multifamily real estate investor and operator Hayden Duer, founder of the Duer Kurami Group, about how busy professionals can invest in apartment buildings and build long-term wealth without managing properties themselves.

Hayden shares the lessons he learned from three generations of real estate investing, how his family successfully navigated the 2008 housing crisis through cash-flow-focused investing, and why he chose multifamily real estate as the foundation for his own business. He also reveals how he built his company from the ground up, raised capital for his first deals, and overcame the challenges of acquiring and operating apartment communities across multiple states.

The conversation dives into passive investing, cash flow, tax advantages, raising capital, finding the right markets, and what investors should look for before putting money into a real estate deal. Hayden also explains why understanding operations and having the right team can make the difference between a successful investment and an expensive mistake.

If you're interested in building wealth through real estate, creating passive income, or learning how professional operators scale multifamily portfolios, this episode is packed with practical insights and real-world experience.

Connect with Hayden Duer:
https://www.linkedin.com/in/hayden-duer/ 

Podcast Website:
https://rockandrollyourdreams.com/podcast/

Transcript

SPEAKER_00 0:02

Create a life of entrepreneurial freedom with insights from successful creatives, entrepreneurs, and investors. Discover how they overcame challenges and turned their biggest dreams into reality. They share their personal success playbook so you can build the business and life you truly want. Welcome to Passion Millionaire, the podcast by Robert Roth. Rock and roll your dreams.

SPEAKER_01 0:29

Welcome to today's Passion Millionaire podcast episode. Again, super excited. Today we have somebody on that I happen to meet actually just on LinkedIn, doing my daily active business networking, meeting interesting people that are actually building something they are really passionate about. And Hayden, he is very passionate about real estate, and he is running multifamily real estate projects. He's operating those in his duer Kami group. Currently he personally, combined with the company, has 25 million plus in assets under management. And I think he has a ton of experience already, and he has learned a lot also from his parents and even grandparents, which um brings a really great story. So I'm very curious to learn all of those details, how he has started building his real estate business together with his partner to where it is today. And also I think he has a really great angle. The investors that he's working with, um, that's a really great angle. I hope you you explain how you're doing that, how you offer opportunities to actually invest in multifamily and you doing all the management, the operations. I think that's a really great um thing you have going on, really great business. So welcome, Hayden Dewar.

SPEAKER_04 1:54

Thank you, Robert. I appreciate that. That was uh that was great. Hearing about Mizodoshkin. Um, but yeah, no, I um really appreciate you having me on. It's been uh it's been great. I've been very fortunate. I um, as you mentioned, my my family has um kind of been the catalyst in my uh my real estate career, and I've been taking on the family portfolio and and on top of that starting my own portfolio and and uh so in the in the growing phase now. And so I'm I'm yeah, excited to keep going.

SPEAKER_01 2:26

Yeah, super exciting. Maybe let us know a little bit more about that story, how all of that started. Like I have uh spotted something, like your dad made a a pretty big move at one point in his life, and that started changing a lot. So maybe that's a point uh to learn something about. Let us know how all of that started. I mean, that's a big deal to choose a career like that for yourself and then, you know, taking on a lot of responsibility.

SPEAKER_04 2:52

Yeah, yeah. So it started way back uh probably in the 70s, 70s, 80s with my grandpa, and uh he was buying some some real estate and uh my my dad took it on in the early 2000s and and you know he was mainly doing it just to preserve preserve wealth and take care of my my grandparents. And in 2006, 2007, uh he went all in and and um bought, or we we live, we were from Northern California, so up in the Sacramento area, we bought single-family homes um from anywhere from 90,000 up to $200,000. And and you know, we're just cash flowing. We were just looking for cash flow and assets and and um it really uh I my dad learned a lot and taught me a lot in that time frame because you know his philosophy was if you're making money from day one and you're cash flowing from day one, it doesn't matter what the values of the real estate do. You know, it you know, you own it long term or long enough, values will come back. And and as we saw with the crash in 08, the uh the values went down after, or some of the values went down after he bought him and then quickly rebounded, and but he was cash flowing all along and he still owns quite a bit of that real estate today. And so a lot of the philosophies that uh were learned from back in the early 2000s and even you know all the way back to the 70s has kind of been ingrained in into me uh and and my philosophy as I go along. So um, we've just been building for the last 20, 30 years, and and uh now we're at a point where we're, you know, I'm doing my um my portfolio.

SPEAKER_01 4:35

So yeah, that's uh very exciting stories, and I'm happy to hear that he found a good way also to handle those times. And I I believe literally what you said, like having the the cash flow probably saved him back then, whereas others um went belly up. Could imagine that. Yeah. And I I'd be curious, like, how how did you get started with your business? Like to me, it sounds like that your your grandfather got it going, your dad continued. And then did you actually start working with them and and kind of grow into their business first and then learned how everything works and then started building out your own at some point, or how did that go?

SPEAKER_04 5:13

So, no, I actually uh uh when I was right after college, my I was talking to my dad, and I originally wanted to be a sports broadcaster, and so I went to school for that. Okay. I played sports in college and and I went to school for for that, and and and every every parent wants to hear that uh they, you know, you went to college and you did not want to do what you've went to college for. So I went to him and said, Yeah, actually I don't want to be a sports broadcaster anymore. I want to um work in real estate. And so uh uh so first thing he told me is you gotta learn from the ground up. So I actually started in maintenance and uh I I worked for uh apartment buildings, you know, in maintenance, fixing things and fixing apartments, and then worked my way up to property management and managed apartment buildings of 150 to uh plus units, and then decided, you know what, I want to get on the ownership side, and I've I've learned enough in the property management uh world to where I feel super confident in being able to operate uh these these types of properties. And so that's what uh what I did and I started my company a couple years ago.

SPEAKER_01 6:21

So okay, that's very interesting. And also I'm happy to hear that you literally started from the ground up. I I believe that's especially in this um you know real estate space, I think that is an extremely useful I mean, set of skill that you have uh probably acquired. Because I could I could imagine you could look at a building now and you can immediately spot if the quality of the building is good or not. And you could could even spot okay what needs to be fixed and how much that would cost or get at least a rough idea about it pretty quickly. Is that is that the case, or what would how would you describe that?

SPEAKER_04 6:59

Yeah, absolutely that and and rents and what drives rents and what drives tenants and and how to keep properties filled. Uh all of that was learned. Uh, you know, one thing, one thing that uh I was taught very early on was get paid to learn. You know, a lot of people pay money to learn and go to school, but get paid to learn. Go and, you know, first few, at least for the first few years of your career, go out and and get a job where you're learning skills and uh the operations and property management skill that I learned has been invaluable in my my business so far. So um, yes, that's that's absolutely correct. Just learning what makes a property tick and seeing things that that some operators can't see um has been super helpful.

SPEAKER_01 7:47

Oh yeah, I can imagine that. Very interesting also. And maybe I missed that, but what what type of properties were those? Was that already multifamily?

SPEAKER_04 7:57

Yeah, it was apartment buildings that I was I was managing. And um, yeah, and my oddly enough, my my family doesn't own apartment buildings. We own office space, retail, single family. And I'm now jumping into the multifamily because that was a little bit of my background.

SPEAKER_01 8:13

Okay, very interesting. So why did you choose multifamily for your own business?

SPEAKER_04 8:19

Um I one, I understand it in and out, and two, the demand. Everybody needs a place to sleep. I mean, it's the the cliche saying everybody does need a place to sleep, and they always will. And we're all all you're hearing in the headlines is you know, we're undersupplied, our housing is undersupplied, and and so I think there's going to forever be a um demand for multifamily. So that is why I ultimately jumped headfirst into multifamily.

SPEAKER_01 8:49

That makes total sense to me. And um the size, I mean, I have seen your website, so I can at least estimate the size of the project that you're running. But um for everybody who's listening, like give us an idea of the size of apartment buildings that you're working with that you have currently under management. And if there's something coming soon, maybe you can also give us an idea about that.

SPEAKER_04 9:13

Absolutely. Yeah. So currently we have some smaller projects. We have a 10-unit project that we own, and then uh starting to starting to grow. We have a 34-unit project, and we are looking anywhere from 40 to about 120 units currently for individual projects. So we're looking in that that small to mid-size range as we as we continue to grow and develop kind of our uh operations and and our systems and processes um along the way to to larger projects. So that's the ultimate end goal is to be in some of those larger um 250 plus unit communities. But right now we're in that 40 to 120 units.

SPEAKER_01 9:57

Yeah, that's already a decent size. I mean, from what I've heard before, I'm not a real estate professional. I've talked to a couple, right? But um sounded to me like that um the calculations change quite a bit once you're at the size of somewhere around 40. Um so the numbers get better for investors. Would you say that's true?

SPEAKER_04 10:19

Yeah. So the the economies of scale definitely play a huge factor in the types of projects you're looking at. And and it really depends on if you're having um property management on site. Because if you have property management on site, then you're paying payroll and that becomes expensive. And so you can have one um property manager and one maintenance guy that can um that can operate 40 units, but they can also operate up to about 100, 120 units. So if you're paying the same amount or paying very similar amounts from 40 units to 120 units, you probably want to be on that higher end to get as much as you can out of it. Um, that's where those uh economies of scale factor in.

SPEAKER_01 11:04

Yeah, that makes sense. Or could you also just have three smaller ones, three with 40 units, and then there's one maintenance guy handling those three, something like that, or is there a reason why that won't work?

SPEAKER_04 11:16

No, that that absolutely works, especially if they're in a very close proximity. You could absolutely do that where you're and a lot of a lot of companies do that, where they they will dominate one specific submarket and they have, to your point, f several properties that are t 10 to 40 units where they can they can separate those um those costs, which is which is great.

SPEAKER_01 11:42

Yeah, and why why would uh you know there's a lot of people interested in doing real estate, right? Investing in real estate, as you already said, preserving wealth, right, and then also expanding wealth. And real estate is more of a long-term game, right? It's not uh the quick buck. I mean, it could be if you're flipping real estate, but that's a different uh different topic to talk about, I guess, at least to my understanding. What you are doing, that's really long-term build-out projects, and that's long-term money expansion, cash flow expansion. So I'm I'm curious, like if people, professionals that have money and they want to invest in real estate, you know, why would they work with someone like you, right? You're you're bringing those projects and operating them versus just going ahead and doing it by themselves.

SPEAKER_04 12:34

Yeah, it's a good question. And uh a lot of people that are deciding that, whether they want to go and buy a couple of single family homes versus just putting their, you know, putting their money more of a passive, more in passive real estate, is one, it's a lot of effort, a lot of energy. And in the single family side, you are it takes a lot of on top of that, it takes a lot of experience and it takes a lot of um knowledge to get into the larger um, you know, apartment buildings or mid-sized apartment buildings. Um so if you have the time, energy, and effort, absolutely, uh more power to you. Um, but if you're starting in the single family space to get some some knowledge, um, that's great. It's it's gonna take some time, energy, and effort while you're you're running your day-to-day life and your W-2 or your day-to-day business, what have you. Um it's the the difference is is you know, the investing in some something like what we provide is more of a passive investment. You get every benefit of the real estate. You get the equity, so the appreciation, um, you get the tax benefits, you get the cash flow. Um, you can in commercial real estate, there's massive tax benefits that that come along with it. And so that is ultimately while you're learning. And on top of that, you can learn from what we're what we're doing, because we send out updates, we work with our investors, we talk with our investors, uh, and a lot of our investors learn from what we are doing personally and what we're doing within our within our business. So that if you do decide to do it, uh you can you know build off of that knowledge and understand what an investment like a multifamily investment really takes, or um just real estate investment in general really takes.

SPEAKER_01 14:26

Okay, yeah, that's uh quite interesting, interesting point, also. I mean, it's a lot of knowledge. So basically, you're also saying, I mean, you will make more mistakes if you have never done it before versus somebody who is doing this in his you know uh everyday life. And um yeah, that makes total sense to me. Also, what I find quite interesting that when you own a part of a project and that you can also have part of that depreciation, that's um something I never really thought about, but it makes total sense. Um who would typically go ahead and in invest with you? And what would be the typical amount somebody would invest with you? And what are yeah, maybe let's start there and then I have more questions about that.

SPEAKER_04 15:10

Yeah, so we typically uh are in the smaller range. We're in the $25,000 to $50,000 range for a for an investment. A lot of people think you need hundreds of thousands, if not millions, to get started in a real estate, and that's that's not necessarily true. So, you know, the $25,000 to $50,000 range will get you a an ownership stake in a $30,000, $40,000, 50 plus unit apartment building. And um, and yes, that's that's true. You you do get the the trickle down of the depreciation and all of the tax benefits that come along with it, uh the write-offs that come along with it, uh passed down to our investors.

SPEAKER_01 15:51

Yeah, quite interesting. And um I'd be super curious. I mean, when you started your own business out in the first place, like was that an easy thing to do? Or was there some challenges that you had to overcome? Because that's something every business owner kind of faces. Maybe there are some tiny exceptions, and there's always learnings in that. Like if you had challenges along the way, no matter if that was in the very beginning or somewhere along the way to where you're at now, like what was your biggest challenge and how did you overcome it?

SPEAKER_04 16:23

Yeah, biggest challenge is how long it truly does take to build and and grow a real estate company. Uh that's just the pay, just having patience. And and as I mentioned, I um I my background, or I mean, I played sports growing up and played sports in in college and uh learning from baseball in particular, learning from baseball that you can fail X amount of times, you can fail seven out of ten times and still be considered great. And taking that learning into business and into real estate in general uh and and keeping that level head has been uh a super or has been a massive um advantage and it's it's kept me even keel where there's not these huge emotional swings, because it certainly can happen. One day you're you're on cloud nine and and the next day, you know, the the carpet can be ripped underneath you as you know, as many people can in many different industries can uh relate to that. Um so that's kind of the, I'd say, the biggest lesson and the biggest challenge and the lessons that I've learned is is um it's gonna take longer and it's gonna take a lot more patience than you ever thought, and a lot more massive action than you ever thought was needed. You know, it sounds so so easy and so conceptually not easy, but sounds so conceptually uh logical. Hey, this is what I'm gonna do, and you know, these are my goals and this is where I'm gonna hit. But the practical application of it is much more difficult than than you uh anticipate.

SPEAKER_01 17:54

But yeah, and um especially like how did you pull your first project off?

SPEAKER_04 17:59

A lot of work. Yeah, it took took a long time. Um I've uh I actually started working with a with a mentor and and he taught me exactly how to get started. And and what I did was uh first I found the market that I wanted to to invest in, and or a couple of markets that I wanted to invest in, and then I started hitting the phones and calling brokers, setting up my team in the market. So I spent three to six months setting up my team, my property management, my uh contractors and my brokers, so on and so forth, uh setting setting the team up and also talking with brokers and understanding, making letting them know that I am serious and I'm looking to buy and I can close. And it's a lot harder when you have never closed to say or to prove to a broker or to a lender, you know, a team that you can and will close, right? Because you're still raising the capital, you're still, you know, you still have to underwrite the project properly and so on and so forth. So uh that was that was a huge challenge to start. But um getting into that first uh first project, just massive action and and calling brokers on a weekly basis, bugging the heck out of them, um letting them know that I uh I'm ready to rebuy and buy as soon as possible.

SPEAKER_01 19:22

That's interesting. So calling all the brokers, that's one end of the stick, right? And the other end of the stick is also, as you already mentioned, you you need to bring up the money to actually make the deal happen. So um, how did you find the investors for this first project? I mean, especially it's a first project. So people need to find enough reasons to trust you with their hard-earned money.

SPEAKER_04 19:45

Yeah, absolutely. And it first started with what types of returns are investors going to be attracted with and making sure that your underwriting matches or beats those types of returns. Um and then it's you know, the confidence in your ability to execute. And, you know, my partner and I are very um similar in the fact that we would never take a dollar from an investor if we didn't feel 100% confident in our ability to execute our plan and invest our own money into the project. Um and so first we started with friends and family. And that's, I mean, that's a a massive uh ask to ask friends and family and and people you grew up with and uh to to trust you with their hard-earned dollars. And so uh for us, that that's kind of where we got started was friends and family. We, you know, we our first capital raise we had to raise $650,000.

SPEAKER_01 20:42

And yeah, that's quite a chunk of money, right?

SPEAKER_04 20:44

Yeah, and and seven days before we uh we close, uh we had all the we we had everything ready to go. We had all capital raised, and we had some some people back out at the last minute. We lost a quarter of a million dollars within seven days before before closing. So that was a little uh you know, we lost some sleep, I'll say, to say the least.

SPEAKER_01 21:06

Why why did they back out and and and how did you fix that?

SPEAKER_04 21:10

Yeah. Yeah, I mean, just normal, you know, normal things, just you know, hey, uh I'm not confident or comfortable in in this and it's your first time sort of things. They they didn't necessarily say that, but you definitely could get that sense. Um and so uh but overcoming that, just having more investors and and reaching out and starting before we needed it was huge. Starting to educate, starting to talk about what we're doing before we had the opportunity was uh invaluable in that time, especially. So we had some some investors that we went back to and and spoke with and and they ended up uh putting some money in and and closing. And then we closed and still had to raise a little bit, but um, but yeah, it was it was a stressful time, but it was worth it and and learned a lot.

SPEAKER_01 22:00

I I could imagine that. Wow. That's quite interesting. So how many investors did you have to find to get fill that quarter million dollar gap?

SPEAKER_04 22:09

That was about five investors towards the end. Um overall we had we had 17 investors invest. And those were some smaller amounts. So that in that $25 to $50,000 range, um, we we had most of our investors.

SPEAKER_01 22:26

So yeah, and uh the quarter million, like that was five investors that kind of jumped off or exactly. Exactly five. Okay. Wow. I mean, that's uh yeah, quite a quite a challenge, literally, and I'm happy you overcame it. And um I I think you said something really smart there. I mean, it sounded like you were prepared, like you had educated people and people you found people out of that pool basically that then were able to trust you and and fill the gap.

SPEAKER_04 22:56

Yes.

unknown 22:57

Yeah.

SPEAKER_01 22:57

Okay, that's amazing. I mean, you have done a lot of things right there. And that the first project is the hardest one. I think I could imagine the second one was a bit easier because that reason is gone, right? I mean, it's a first project, nobody can say that anymore, right? You have one one going.

SPEAKER_04 23:15

Yeah, it similar challenges, but easier to overcome because we went through it. Uh you know, and and we did have still some skepticism, but a lot less. And uh we that that raise was proved to be significantly, I don't want to say easier because it was tough, but significantly easier than uh the first one.

SPEAKER_01 23:35

Okay, yeah, quite interesting. And so you have two multifamily projects under management currently in your company, right? Plus you have some where you invested personally. That's what I what I understood. Absolutely. And um there's the next one is already coming, I assume. Next project.

SPEAKER_04 23:54

Yeah, we we're we're in negotiations on a couple different projects and and this one is is uh That's a bigger one already. Yeah. Yeah. We're looking we're looking in that 40 unit, 40 to like I said, 40 to 120 units, but the the few that we're we're looking at is in that 40 to 70 unit right now.

SPEAKER_01 24:13

Okay. Yeah, so how much money would you have to raise then there? I assume you you're looking for properties again in California in this case.

SPEAKER_04 24:22

No, so our our properties are all out of state. All out of state. We we own a project in uh Arizona and we own a project in in Kansas City. So um yeah, so it's all all over. Um and and you know, the reason we felt comfortable with doing that is I, you know, in my asset management, property management, a lot of my or everything I manage is out of my local market. And so I'm super confident in in uh uh being able to build out a team. And my team has been uh amazing that uh that we've worked with in a few of these markets. And um, you know, hats off to them. They've been they've done a great job and and more than um or done done a better job than I even anticipated. Uh and so yeah, that's um so everything's been out of state. So it's similar. We're in in Kansas City, Missouri is one of our markets that we um that we own and we're still looking to to grow. And so um, yeah, that's where our next one would be.

SPEAKER_01 25:21

Oh, okay, interesting. And so what's the amount of money roughly you think you have to raise for that project?

SPEAKER_04 25:28

So these next projects are anywhere from one to two and a half million uh that we're looking at so still still you know relatively uh relatively from what we're accustomed to is a little bit larger, but overall, you know, a very manageable, um manageable raise.

SPEAKER_01 25:44

Yeah, and if somebody would invest in the project, um maybe let's go back to to your existing projects because like that exists, those are uh you know not only financed, those are running, those are managed. Um let's say one investor has put fifty thousand dollars into that project. So what is the return out of that?

SPEAKER_04 26:09

Yeah, so we typically target on a cash flow basis or on a cash-on-cash return basis, um, on average, anywhere from seven to ten percent. And on an overall return from we typically hold these projects anywhere from four to seven years. So there's a time frame we give a typical of uh two-year time frame when we're when we're looking at these projects. It'll be you know four to six year hold or you know, three to five years.

SPEAKER_01 26:38

Flip them or exactly.

SPEAKER_04 26:40

Yeah. So we're we're looking to we're looking to have some runway where we can improve the property, increase rents, uh, optimize all of the operations, and then go and sell anywhere from that that four to seven year uh timeframe. And um, and so um to to answer your question, yeah, we're typically looking to to 2x or better um the the overall investment from cash flow to appreciation and and so on. That's not including any of the tax benefits that uh are in there.

SPEAKER_01 27:14

So okay, that's quite an interesting detail to know because uh I was assuming you're acquiring those projects and then basically holding them, managing them forever and just cash flow. But okay, no, different approach. Um, and I mean that's a matter of preference, I guess, for the investors, which one they would be looking for. But I think that can be a pretty profitable approach. So I'm wondering also when you collect the money from investors for a project, is there already the budget included for all of the improvements of the um the project? Uh and you know, you have that on the account and you're using that, or do you actually need to raise extra money to do that?

SPEAKER_04 27:58

Yeah. So everything that you raise is is included. So you're paying for, you know, the the investors are investing the down payment for the loan. They're they're investing the uh the renovation budget and the closing costs. So those three things are what they are or what their money is going towards. And for that, we have the overall returns uh throughout the project that are baked into those, to those buckets. It's not as if, you know, certain investors have the down payment so or uh invest in the down payment. Uh certain investors invest for the the renovation. It's just all-encompassing, you know, we're we're looking for, for example, a million dollars, that investment comes, or those, you know, we invest a million dollars or we have a million dollars that we raise, and we're looking to take that million dollars and give back two million or more to our investors throughout or their money back plus another million dollars throughout the investment.

SPEAKER_01 28:55

Okay, very interesting. And then when you say 7 or 8%, that will be return per year, what happens when the project is being sold? And let's say it's been sold for 2x. So would that also mean if I have put in 50K, then I open my bank account for you and I'm receiving 100 now? Or how does that look like?

SPEAKER_04 29:18

Yeah, it's a great question. So throughout the project, you're getting cash flow. That's 7 to 10%. So if you're investing $50,000 and it's a 7% return, on average for that hold period, let's say it's five years, on average, you'll be getting or returning $2,500 in cash flow every uh, no, that's not correct. $3,500, excuse me, um, per year in cash flow. And then that's included in the the doubling of your of your capital. So the equity takes takes care of the rest. So when we go to sell, let's say we've returned um, you know, we've returned $25,000 in cash flow over the investment. You will get your money back plus an additional $25,000. That's what we're assuming in the 2X, you know. Um, it's not it's not an exact science, but or it's not an exact, we're only going to give back uh $100,000 to you, but that's what we're aiming for, what our target is, is at least doubling your money, if not better.

SPEAKER_01 30:24

Okay, interesting. It kind of sounds like though that uh there is kind of a baked-in pretty big equity stake for you on that app site, if you in case you sell it for the operator.

SPEAKER_04 30:39

Yes, yes. So uh how it works is we give back, it's called a preferred return. We give back a preferred return, which is basically the first dollars that this, you know, each year that the property makes goes to our investors. So for example, our preferred return would be 7%. The first 7% every year goes back to our investors. And then there's a split after that. So it's a waterfall split, is what it's called. So for example, if the split is a 75-25 split, the first seven um of every $100, the first seven dollars goes back to the investor. And then everything after that is split. $75 to the investors, $25 to the operator.

SPEAKER_01 31:27

Okay. So basically you have out of a sale, you have 25%. Is that am I getting that right? Kind of.

SPEAKER_04 31:36

After the after you um after you give back the 7% annual preferred return. Yes. Yes. So if we if we don't, for example, we're we're renovating these units, we might not be able to hit 7% cash on cash return in our first year or two years, but it's all accrued. So 7% uh every year for say five years goes back to the investor first. Once we catch that up, then every dollar made on top of that is split 75-25.

SPEAKER_01 32:08

Okay, okay. Yeah, it does make sense. Yeah, quite interesting concept. Yep. So basically, as the return goes back to the investor first, the first 7%, also yearly, it means they have less risk than you in case you know there's less money being made. That's how it sounds like to me. So you have you have more risk, but also at the end you have that upside of about 25% once the sales happens, which is uh a a nice chunk uh of return for you. Yes. Does that kind of make sense?

SPEAKER_04 32:43

Yeah, exactly. And it it's like the like an interest rate, for example. Yeah. It's like an interest rate for your money. Um where we are, it's not that we're guaranteeing the 7%, it's just the first seven percent goes back to the investors.

SPEAKER_01 32:58

Yeah, quite interesting. And typically, like how much would that make per per year? Like, I mean, you you know your current project, and then maybe you can average it out or so, so just to get a basic idea in percentage per year. You're saying so or can you like what's the return, annual return uh on average throughout those two projects? Yep, per year.

SPEAKER_04 33:21

So the the average uh the average annual return is anywhere from seventeen to 17 to 20 plus percent on a return, um on an average annualized return. And one metric that multifamily or commercial investors look at or they um they consider or they factor in is the IRR, which is the internal rate of return, which basically is the annual rate of return that factors in inflation or the time cost of money. So the IRR you're looking for somewhere in the mid-teens, somewhere between 14 to 16 plus percent um uh at least for your investors.

SPEAKER_01 34:06

Yep. So that would mean. Yeah, it does make sense. So basically, if let's say it's 14 IRR, then the first 7% goes to the investor, and then the other 7%, they would be split 75-25. So does that also count for that?

SPEAKER_04 34:23

The of the annualized return. So of that first 18. So that let's say the annualized return is uh is 18%. That's correct. The first seven percent would go to the investor. But it's broken out the uh when you sell, that's really when you are you're getting the bulk of your returns, when you're getting the equity. Um yeah, that's kind of how it's broken out. Average that first seven percent will go to the investors, and then the the next uh what is that? 12% or no, 11%, excuse me.

SPEAKER_01 34:54

Uh 11% would be whoa, but now we were in the really deep partners of numbers. But thanks for that, because that's very, very insightful. Because like I'm just assuming, okay, if I would make an investment with you, what happens to my money, right? And um how how does the return look like? What's the risk? And then at least what we've just talked about, like gives a basic idea about all of that. And I'm assuming those are kind of the conversations maybe also with the investors that uh that you're taking on. Or what would be the the most typical question that you're receiving from somebody who is interested in investing with you before they decide to do so?

SPEAKER_04 35:35

Yeah, it's a great question. A lot of what I a lot of questions that I get is is experience and and kind of the questions on the the market in general. Not as many people say, hey, this particular project, you know, they're they're not getting as granular as what's going on in this particular project. I mean, we we do get into that, but the major, major questions before we can even talk about an investment is what's your experience and why did you choose this particular market and kind of the market knowledge? So they're they they they're wondering what my knowledge is on the market and where I see the market going. Um those are the main first couple of hurdles that we we talk about with investors, at least in my experience.

SPEAKER_01 36:22

Yeah, that's that's what I was wondering about. It makes total sense to me. I I I can see that. And is it the way you choose the properties you're looking to invest in? Um, like you're doing that by yourself together with your partner, or is there even potentially more experienced outside partners that help you make the right decision there, or how are you handling that?

SPEAKER_04 36:41

Yeah, me, myself and my partner, we we've done a lot of research, you know, countless hours of research on market trends, you know, what we like about certain markets, and also how that fits our investment style and and our thesis. You know, we we like cash flow heavy markets. So we're gonna look at the what we view as as uh the best cash flow heavy markets that's within uh physical or geographic relevance to us. You know, so we're like I said, I'm I'm in California and my investments are in Arizona, uh, Texas, and uh Missouri. So that's you know, it's a short two to three hour flight, one to three hour flight for those markets. So we can get there in a day's, you know, within a day if necessary. So that's kind of today what we're looking at. Um, and then on top of that, all of the, you know, the how the market matches our investment thesis.

SPEAKER_01 37:40

Okay, yeah, that makes makes total sense to me. So definitely you're also getting out to those projects. I mean, for sure, before you're buying that, I'm assuming you go in there and and and check out if the water works.

SPEAKER_04 37:52

Yeah. Yeah, yesterday my my partner was in Tucson, Arizona, where it was 100 degrees, and then he flew out to or Monday, he was in Tucson, Arizona was 100 degrees, and he flew out to Kansas City and it was snowing. And then he came back to California and it was 75 degrees. So body shock.

SPEAKER_01 38:11

Yeah, it sounds like it. Okay, so how how many actually are you how many properties are you physically going to checking out um before you make a decision? I are you seeing like 20? Are you seeing 10? I mean, beforehand, of course, internet research and all of that, phone calls. That's that's at least the idea I have, but literally going there, checking them out physically, how many would that be?

SPEAKER_04 38:34

Yeah, it's a good question. So we typically will underwrite. So, for example, so far this year, we've underwritten around 80 properties. We have submitted about 12 offers so far this year, and we've seen probably about anywhere from 18 to 20 properties throughout the those two markets. Because we're going there every week, every month to check our properties, uh, our current properties. We're going to these markets and we are viewing these properties and viewing other properties that we're interested in. And uh so that's kind of how it how it's been been working out. So um, yeah, it's uh hope that answers your question.

SPEAKER_01 39:16

Yeah, 100%. Yeah, super, super interesting to learn that from you also. That to me, that um sounds like it makes a lot of sense. Um I'd be happy if somebody who is listening right now, or maybe whenever later after we've recorded this episode, if somebody's interested and um thinks like, okay, Hayden is uh somebody who's really after this and knows what he's doing and um has money, is interested in investing in real estate, and at least want to have a chat with you, what would be the best way to get in contact with you, Hayden?

SPEAKER_04 39:50

Yeah, um so I'm active on, as you mentioned, active on LinkedIn. So my my first and last name on LinkedIn, uh Hayden Doer. And I'm also active on Instagram and uh my website as well. So the doer Eurokomi group.com is uh is my website. So um anywhere there I will absolutely field calls and field uh questions.

SPEAKER_01 40:17

Yeah, sounds great. We also make sure to have this in the show notes so it's an easy click away to get in touch with you. Last question what do you think in your field of real estate and and the investors you're working with, if they would do it by themselves, those investors, what do you think would be the biggest mistake they typically would make?

SPEAKER_04 40:37

So the investors you sorry, you're asking if the investors would go out and want to go and buy by themselves. Just really understand the the numbers, you know. If if you're looking at a project and it cash flows, you know, your your mortgage is $1,000 and your rent is $1,300, that doesn't necessarily mean you're gonna be cash flowing $300. So making sure you understand the numbers and what the true and accurate expenses are. Um I've seen a lot of people who will get into projects and say, you know, this this project's great. I'm gonna be, you know, 10% return, I'm gonna be cash flowing, you know, 500 bucks or what what have you per month. And it doesn't turn out to be that way because you have maintenance, you have repairs, you have big expenses that uh that people don't necessarily factor in. So uh definitely, definitely factor that in.

SPEAKER_01 41:36

Yeah, it makes total sense. Appreciate you saying that and leaving us with that. Hayden, again, thank you so much for hopping on. See you soon.

SPEAKER_04 41:44

Robert, it's been great. Thanks so much for having me.

SPEAKER_00 41:49

Go to rock and rollyourdreams.com forward slash podcast.