Andrew Hinton: So we kind of differentiated how the building looked, which has got this historic charm. People love it when they're looking in these urban areas. But at the same time, we really focus on making sure the building systems are in good shape. And if not, that's part of our value add, is get them 100% up to modern code.
Whitney Sewell: your daily real estate syndication show. I'm your host Whitney Sewell. Today our guest is Andrew Hinton. He's the head of acquisitions, development, sales and marketing for GL Capital. He's also co founder of Stork Property Management, which is their personal property management arm of GL Capital. Obviously, he's responsible for the business development and advises on disposition and exiting assets. You know, obviously, he's the CEO of a managing partner of GL Capital. And he's going to dive in today to some specifics to their properties that, you know, we don't hear of much on the show that are, you know, 100, 150 years old. And some dynamics there that if you're a past investor or an operator, it would be very helpful. But also just the team members and some crucial things that as you're growing a team are very important. I've experienced this myself many, many times. But Andrew dives into something that's crucially important as you are looking to grow your team. Andrew, welcome to the show. Honored to meet you and have you on. I know you are, you also, you're in a part of the country that I don't hear talked about too often, as far as on the show anyway, and have a unique portfolio that I'm looking forward to talking about, and even a unique skill set, I think, that's helped you to grow, your team to grow and how you've done that. But before we do that, man, give the listeners a little more about who you are, Andrew, your focus right now, and the market that you're in.
Andrew Hinton: Thank you, Whitney, for having me on the show. I appreciate the opportunity to speak a little bit about our company. I'm Andrew Hinton. The company is GL Capital. We are in Columbia, Maryland. Our properties span from Philadelphia to Hampton Roads, Virginia, which is the Virginia Beach area. I started the company in 2017. But we had acquired 39 units in our first couple of years, another 150 in the next couple of years, and by the end of this year, we should be around 750. And most of, you mentioned as part of the country, most of our portfolio is mixed use or multifamily.
Whitney Sewell: I was looking at your portfolio before we started recording and it's interesting, the age of the properties. In the markets that we're in, we wouldn't want properties that are that old. Tell us a little bit about the dynamics of the age of the units that you all have and why that still works.
Andrew Hinton: Yeah, so I think when when we got started, maybe by by really good luck. We had some, some excellent opportunities that. gave us good confidence to keep going, and then also may have affected our ability to very realistically understand the assets as we got into them. We were doing some fix and flip. We were doing some full renovations, and so just got really comfortable with physical asset conditions and in the value-add space, sometimes you got to do some heavy lifting, be hands-on. I learned pretty quickly that The building systems can be updated, even though the bones of the building are in good shape. We could have a 150-year-old building and fire alarm systems two, three, four years old. That's really what people are looking for when you sell or when you're dealing with the municipality. We kind of differentiated how the building looked, which has got this historic charm. People love it when they're looking in these urban areas. But at the same time, we really focus on making sure the building systems are in good shape. And if not, that's part of our value add, is get them 100% up to modern code.
Whitney Sewell: Yeah, I could see that as even an opportunity, right, for guys like yourself that want to focus on that type of asset, right, that's 100 plus years old, you know, where guys like me were like, hey, no, thank you, right, but we're in a different part of the country as well, right, very different markets, you know, where that's I mean, you're going to have to buy properties that age where you're at, right? I mean, that's just part of the business. But it's interesting. You talk about, hey, well, the bones might be that old, but we're going to come in and the systems themselves are going to be much newer than that. Right. So you're going to have to have a pretty robust team. And we do as well. But I was thinking about even the due diligence on a 100, 150-year-old building. That's different than on a five-year-old building. Right? Yeah, maybe highlight a little bit about that, you know, even how you all would do that, to some degree, and maybe some of the differences that things you might have to look out for.
Andrew Hinton: Yeah. And another thing just to add on, you know, I don't know, you know, what your pricing is in your market. But, you know, the mid Atlantic is got some mispriced assets that are fully stabilized, bringing in rent. And I think part of what what we've gotten an opportunity is there's just not as many people looking. Some people have you know, 80s, 90s, 2000s as their parameters. And I believe strongly in having parameters. Age of the building just isn't necessarily one that we're going to completely write off properties. But a lot of our competitors are. And, but you got to know, know the area, you got to know what concerns to look out for. And so I think the due diligence process started, you know, our very first deal, right? We got into that. We did some more structural work. We've done rewires, we've done re-plumbing, we've done re-fire alarms, re-sprinkling, you know, from a construction point of view. And so now I can go to any building and I spend most of my time in the mechanical room in the basement because once it's an old apartment, they're way below market typically for these legacy-owned assets that we're looking for. And we know we can upgrade the cosmetics. So what's really interesting to me is what the wiring, what the plumbing is, what the fire control systems are. And yeah, and so the due diligence process is, It happens way before even the LOI, and we want to bring people on site who are the experts that can give us real guidance on whether or not an asset that old is worth pursuing or not.
Whitney Sewell: Yeah, I was thinking about the, even the, the contractors you need on your team, right. Uh, you know, and, and depending on the type of assets that you, you have in the value lifts or the remodeling lifts, how big they are. Um, you're often going to have contractors that specialize often in your kind of assets, right? I was saying, you know, the ones that you're going to have to look at your plumbing, to look at your electrical, like they're going to have different skillsets than the ones that, that I'm using probably. Right.
Andrew Hinton: Yeah. Yeah, and I think people who are getting work in Baltimore and Philadelphia and Hampton Roads area are used to properties of that age. We've got a few different boiler systems and, you know, some plumbers are the better fit to service boilers than others. And so yeah, I mean, a lot of times you're, you're also interviewing the existing maintenance and contracting teams to find out as much as you can. I try to interview the handyman as much as possible on my visits. They're usually letting us in the basements, and we have a team there. We've got our electrician there. We've got a couple of investors there. This is all before LOI, even. I sneak away and talk to the handyman, let him know how many pipe leaks you get in the basements, and how many tenants are smoking indoors, and just things that the handyman will tell you. Anyway, so the due diligence, we're talking about putting the team together. not only the electricians with you who can look at it and give you an objective opinion, but you've also got the current owner's staff who is a viable option once you take over the management, but you're getting multiple opinions, again, well before you even do your PCA, which you got to spend money on. So I'd like to get all that, as much information as possible upfront before, once I sign an LOI, I want to be someone known as high probability of close. And we have been in the past.
Whitney Sewell: Yeah, that's awesome. I love the push to get as much information before we even put out an LOI. Right. Especially before we sign a purchase sale agreement. Uh, no doubt about it, but thinking about the relationships with those people, right. You're already there. You see the handyman and buy him a coffee. Right. That may be the best investment that you make on that asset. Right. Is that, is that coffee with him? Right.
Andrew Hinton: And the listing brokers don't know and the owners don't even always know. So yeah.
Whitney Sewell: Yeah, that's a good point. Definitely the broker, but even the current owner may not know the real issues that are happening there, right? Like the maintenance man, the handyman, he's been in a lot of the units probably, right? And so he knows, he has a lot of information that even the owner wouldn't have. But I want to transition here just a little bit, Andrew, and even focus on on your team and how you all have grown, how you found some of the best people to, uh, to build your team with, uh, and what that's looked like to be able to grow your portfolio. Like you have no doubt you've, you've been able to hire some experts, uh, some people that are good at what they do. Uh, let's dive in there and how, you know, how have you done that? Maybe you can start with some of the first critical roles that, uh, that you hired for.
Andrew Hinton: Yeah. So, um, you know, we started out doing as much of the work ourselves as we could. I say we, um, my partner, Jade and our third partner, Kelvin. Kelvin has since moved out of country and he's doing huge stuff overseas now, but it's now it's me and Jade. So we were starting out, we did as much as we possibly could. We were doing the painting ourselves and really that gave us the knowledge of leasing apartments. And I think that's helpful for those getting started. And it's also a way to save costs and you can earn more money because you're not hiring as many people to do it. your, your, the time, the value of your time is, is then limited. So over time, I've brought in people, but you, you know, the cost of the materials when you're talking to a painter, and, and so you're not going to get screwed on, you know, painting prices, where they're going to make up a number that they're going to pay for paint way, way above, even if you ask for labor materials separately, separated. So stuff like that is something that we've kind of brought in. And then You asked a team question, but I was kind of, I guess, where we were when we started. And then just bringing people on that have the same vision as us. We're not successful unless our investors are successful. Our vendors aren't successful in getting a lot of more business from us unless our investors are successful. So just making sure you're all aligned in your values. And that's huge. That happens. it doesn't always work and we know it's not a good relationship because sometime down the line we realize there's a mismatch in a value that we have or anyone we bring on our team. And so when we look at building a team, that's number one, above skills, above how much money they have, because if it's not going to work in terms of the culture fit, the personality fit, then it's not going to be a good partnership. In fact, we look for people who bring a different skill set with the same values as a rule. I look at every deal we put together. I played a lot of sports when I was growing up. If you think about putting together a dream team, not for a company necessarily, but for a deal, and then you're bringing on I played the 3-4 position, even though I'm pretty tall, but you need a point guard, you need a shooting guard, you need a center. Everyone has their independent roles, but you don't necessarily need to have the same people on every deal. I think we look at syndications as I find the opportunity or my partner, typically I'm in the acquisitions role. If I find an opportunity, who can I bring on that's going to execute on that deal at the highest level? It's not just fundraising. Because, and that's where I was in the past. And I realized that to grow, you've got to build not just your financial leverage, but implementation execution. And I don't necessarily want to be on site all the time, as much as like in the beginning stages. So having partners you can bring in, share the profit with, has been instrumental in being able to move as we have. And so, yeah.
Whitney Sewell: So that speaks to, you know, you mentioned the importance of the alignment of values. I could not agree with you more, uh, as far as, you know, fleshing that out, right. With someone, uh, before you, before you tie the knot, right. Uh, you know, before you're really in a partnership, uh, because it's going to come up. Right. There's going to be things that challenge your values. And and, you know, hopefully you both are very similar value sets. So when they are challenged, you're you're in alignment. Right. You know, when times are a little tougher. Right. So speak to some ways maybe that you flesh that out a little bit before partnering with somebody. Right. Or before bringing that person on.
Andrew Hinton: Yeah. And I think. It hasn't been like day one, we had a sharp understanding of our kind of set of values. It was as time went on, we learned what was and wasn't fit in, and you're going to have some bad partnerships if you're starting out in the business and you want to do syndication. If you just want to buy as many houses as you can, you save up, you buy, and 30 years goes by, you got your portfolio, but it's all you. I love that model. People get really rich doing that. But if you want to kind of scale a syndication model, then it becomes like needing to partner up. And unfortunately, it's a game of numbers. Anyway, so we won't go down that path. But I mean, for us, it's caring about the community. And the community, as a definition for us, is investors, our team members, but also our tenants. We have conversations about our neighbors or the neighborhood that we're in. We can't really work with people that aren't able to have any consideration that tenants are human beings. We have a big and profound influence on their life. We're managing their building. I read an article that building air quality might have a bigger effect than your primary care physician on your health outcomes because you're breathing in the air, you're sleeping in the air. I'm a millennial. It's profit, but it's also, to a degree, impact. Anyway, that's something that if we meet somebody and it's all dollars and cents and there's or they don't really have that reputation. I'm not saying it's no deal, but I'm saying I'd like to explore that a little bit more. Innovation is another one. We want to do things efficiently, and we bring technology in as much as possible. We've got VAs. We do have some building system improvements. Energy efficiency is really important. As we get into the value-add space, how can we bring the gas or electricity or water consumption down as both environmental and, you know, pro forma line item. And so, you know, we hear people talking about solar energy, EV charging stations, or some way of adding value in both those senses from an innovative perspective, like, that kind of catches our interest more. And last one's integrity. And that's, you can't do it without that, it's at the core. So, Yeah. So, I mean, I think I lost your question.
Whitney Sewell: No, no, you did it. I mean, just ultimately some ways that you're vetting other potential partners, right, for their value sets. And you went through that, no doubt about it. And like you said, you don't know all that right off the bat, right? Sometimes it takes some time to flesh that out. But I know for us, the more really we're bold about our values, We attract the people that have those same values, more times than not. And I know early on, a lot of people asked me to partner with them. And it was a pretty easy no for me because I knew we didn't share the same values. But until when I met my business partner, it was an easy yes, because I could really quickly see that he had very similar value sets. So I could not agree with you more in that and the importance of that, even across your team in a big way. Andrew, what would you say is maybe your all's biggest challenge right now in the syndication or commercial real estate business?
Andrew Hinton: Biggest challenge? I think it's, I have a coach who talks a little bit about different sand traps you get caught in. And in the beginning, it's kind of, you don't have enough time to do everything you need to do. So you got to start leveraging and then you grow a little bit more. And the second sand trap is kind of team. And it comes back to the people side of the equation. So I think, you know, we bring on, like we may double, we want to get to a thousand units. This year was kind of the goal. But you go from 150 to a thousand units under management in four years. You're making hires and you're establishing systems and I'm a deal junkie, admittedly, and I want to go out and execute new opportunities, but that doesn't come without having a foundation of asset management. We do our own property management too. These old buildings, you need the right people. The property management team, making sure that I don't have to be on site as much to go look at new opportunities. That's been something where Um, you know, we've had challenges. Yeah. I would say, but we, I think we're on like, I feel like we're growing out of it. So I feel like it was a challenge nine months ago. Um, you know, we've been through a couple of managers, but now it's starting to become something where I think we got the right team in place and yeah.
Whitney Sewell: Yeah, no doubt about it. I mean, if you said you'd never had any challenges, well, you probably haven't got started yet, right? So there's no doubt there's challenges in most aspects of this type of business, but that's why we do it, right? Or that's why we, you know, some people shine, right? You know, in this space or grow because they're willing to go tackle those challenges where most or many are not, right? Um, uh, you know, Andrew, what about, uh, you know, your thoughts just over the next 6, 12, 18 months, what do you expect? Or, you know, what do you, uh, you know, and from what you expect, how's that guiding what you are doing now, as far as, you know, looking to buy or sell things like that.
Andrew Hinton: I don't turn off the noise, but whenever I get caught up, I tell myself to turn off the noise because in any single market, there's great deals. And in any single market, there's bad deals. I mean, in terms of the cycle, we're not a market maker like the Blackstone where interest rates changing makes a profound impact on our portfolio and our future leverage and all that stuff. So for me, it's only do good deals. And I think you could do good deals Today, I think we have a legacy asset that isn't being heavily bid on. We're under LOI right now. It's way under, on a price per unit perspective, anything in the 2020-2021 range when we saw just a lot of almost speculation and the rates were so low, there was so much cash. And so from my perspective, it's a very, very safe basis. I guess that's what I'm looking for because you don't want negative leverage. And right now it's tough not to have negative leverage. And I don't want to do construction. So it seems like all the distress is more kind of on that side. I haven't seen a lot of stable assets like distress because rates went up. So our value add assets. Your question was, where do you see the market? I think the market's going to be higher in five years than it is today. I think if you're trying to make a decision in the six to 12 month timeframe, because you don't know, I would just keep looking, have your buy box and do whatever you can to find it because there's probably less players in the market now than when rates come down.
Whitney Sewell: Yeah, no doubt about it. There's less players at the moment than there were 18 months ago. Yeah, definitely some good food for thought there. What's your best source for meeting new investors right now?
Andrew Hinton: So, Anyone in the LA community, my partner and I are going out to LA for a few weeks. We're just networking. I mean, trying to build deep relationships with people. I think spending a 30-minute Zoom meeting is not working for us. Getting online leads is not really working for us. But spending a day, we bring people into Baltimore. We show them all around Baltimore, take them out. And so you said, where do you meet them?
Whitney Sewell: you know, your best source for meeting investors right now.
Andrew Hinton: Yeah, that's more like word of mouth. And then just taking really good care of the people who are brought to our attention and really get to know them. Even our investors ought to have the right value sets, agreeing to a degree what we're talking about. So, and then, yeah, we're looking more and more at kind of more family office. rather than in the past, it was strictly high net worth. And for that audience, we want to work with anyone who's looking for passive income opportunities. I know that the audience here is a lot of people looking for syndications or information or trying to raise money from of that high net worth. And you always want that. You want to provide an opportunity. You want to add value to people's lives through an opportunity to invest in real estate. However, if you want to buy the bigger deals, you're going to need $1 to $10 million check sizes. And that sometimes, most of the time, is coming from either a group or ultra high net worth. And for them, it's you go to these networking events. IMN has family office conferences where you're interfacing with the people who represent family offices. So figure out who your audience is and go where they hang out and get introductions and take care of people. And there's never pressure. I love getting the chance to hang out with somebody, have them look at a deal and then not invest and then prove that they should have invested in this one. So it takes time. Yeah.
Whitney Sewell: No doubt about it. It does take time and lots of interactions and coffees and Zoom calls.
Andrew Hinton: Yeah.
Whitney Sewell: A lot of calls. Yeah. What's the most important metrics that you track? It could be personally or professionally.
Andrew Hinton: Most important metrics. So every day we have a huddle and we have key stats which our managers bring. It's your vacancy rate, your number of maintenance, calls that are open right now and delinquency rate. And so from an asset management, property management perspective, like having daily touches on those, and it's not every day, like some days I'm busy or, you know, I would say every week we try to at least get those, that data. And if something's, you know, catch the trend way before it hits the quarterly dividends, right? So that's one thing on the property management side. And then, yeah, I mean, we do quarterly dividends. So if we're paying dividends, people are happy. Our dividend rate is crucial. And it doesn't vary that much in real estate, but even if it goes, if you do a seven and it's 6.85, people are calling you like, what's going on? Are we having a problem? But it's 7.1, you don't hear anything. So just trying to make sure you've got, conservative underwriting. And then when you get in the deal, you've got consistent dividends. And with that dividend rate, it's huge.
Whitney Sewell: Yeah. What about some daily habits that you're disciplined about that have produced, you say, a higher return for you?
Andrew Hinton: Interesting question. So I read a book, Outlive. Have you heard of it? I don't think I've heard of that one. Catching on. And it's, It's kind of a different philosophy of, instead of like go to the doctor when you're sick, it's like go to the doctor now before you're sick, figure out what are your quote, risk factors. And then, you know, if there's something that's not optimal, it's like, and so it's like going a little bit deeper into, into like, you need blood work. There's things in your, you know, maybe you're, so I read the book, you know, went to doctor, got some blood work, and now I'm like kind of looking at, daily habits and knowing a little bit more of the science around positive health outcomes is the best encouragement for me to get out and go to the gym and eat right. That's always something to track, but this gives you something a little more concrete. I recommend that book a lot nowadays.
Whitney Sewell: Interesting. I've not heard of that one. That may, may look it up. Yeah. When you get some information like that, it can definitely motivate you to take some action. Right. And so how do you like to give back?
Andrew Hinton: You know, it's funny. I, I, my first job was at a nonprofit. I, I wanted to go into international development out of college and, you know, spending a lot of time and energy in that field, the outcomes were really small relative to the impact I wanted to make. And then I realized owning and growing a large company is something that is perhaps, you're employing people, eventually there's the ability to provide large charitable contribution. So I hate to say like, just like growing the business, but I see like a long-term outlet that the more the business grows, the more I can do like from an impact perspective. So your question is, what do you do to give back? And then like education. I love being on the show. I appreciate you for giving me the chance. If someone took anything away from this conversation, then that's, that would make me happy. So, um, yeah, I would say those are the, the, the two things that come to mind.
Whitney Sewell: Awesome. Andrew, grateful to have you on the show and to meet you and congratulations on, uh, you and your partner success, uh, you know, and doing this many deals, you know, 150 units and I love your drive to get to a thousand units. Uh, I think you said within four years, right. Um, uh, so congratulations, but that doesn't happen, uh, by sitting on your hands. Right. And so, So grateful, you know, to have you again, and even diving into some of the dynamics of older properties like, you know, like you have in your portfolio, which, you know, is just part of the markets that you're in, right? And diving through the team members, right, that are needed for those projects specifically, but then just the value sets, the importance of the value sets, you know, as you grow a team and how you've done that so well. Andrew, how can the listeners get in touch with you and learn more about you?
Andrew Hinton: LinkedIn, Andrew Hinton, GLC, would love to connect.
Whitney Sewell: Thank you for being with us again today. I hope that you have learned a lot from the show. Don't forget to like and subscribe. I hope you're telling your friends about the Real Estate Syndication Show and how they can also build wealth in real estate. You can also go to lifebridgecapital.com and start investing today.
