Aileen: [00:00:00] Thank you everyone for joining today’s episode of the, How Did They Do It? Real Estate podcast. We are your hosts Seyla and Aileen. And today we have our guest, Dan Hanford.  Dan is a managing partner at passiveinvesting.com, a private equity real estate investment firm, where they manage a portfolio valued at over $275 million.

He is also the founder of the Multifamily Investor Nation, where he educates a nationwide group of over 9,000 plus members of multifamily investors on how to invest in multifamily assets and is the host of the popular Multifamily Investor Nation podcast, where he interviews sponsors who have closed a deal within the last 12 months.

 Please welcome Dan Hanford. How are you doing today, Dan?

 Dan: [00:00:40] I’m doing very well. Thanks for having me.  Looking forward to sharing with your audience here.

 Aileen: [00:00:44] Thank you so much. We’re really excited. Before we get started, could you tell our listeners a little bit more about your background and just, how did you get started in real estate?

 Dan: [00:00:51] Sure. It’s a long story, but I’ll try to make it short. So I’m a chiropractor by trade.  First got started in the business, really in business really. So, went to chiropractic college while I was there. I started my very first successful business that I still have today. It’s a business called shopanatomical.com and we sell all types of skeleton, tens and skulls and brains and hearts, plastic anatomy, models to colleges, universities, doctor’s offices across the country and around the world.

And that business I started while I was in chiropractic school because we all needed  as a student of chiropractic, we needed a spine model to actually learn what the human spine looks like and how to adjust it and all the different, you know, structures around it. And so the bookstore at that time was selling one for $189.95.

 And the students, I heard complained about it being so expensive because at that time we’re all poor college students, you know, and can’t afford a lot of stuff. And so the bookstore has always, you know, doubling the price on everything and come to find out. I did some research and found that spine model online for around $90, it was like, it was actually like $89.95, so they marked it up by a hundred dollars from the retail and I’m in the bookstore. And so I was like, I wonder if I can get an order together, how and what can I get this spine for? So I called up one of our, one of the distributors of that spine, you know, fast forward today.

They’re actually my number one competitor, which is kind of cool.  But I called them up and I said, Hey, you know, if I can get an order of 20 of these spines together, could you get them? What could I buy them for?  And they said, you can buy them for $65 and we’ll even include the shipping.  And so I was like, Oh, well, that’s kind of good.

So I was like, Oh, I wasn’t gonna, I, you know, make a bunch of money off of this thing. I was just trying to help out the students. And so I ended up selling them for $69.95 and I included, of course, included the shipping and everything like that. And then I started to go from class to class. Now I just ask the professor, Hey, would you mind if I, you know, made an announcement real quick about these, this really good deal of a spine I got, you know, and, and the first week I had 80 orders in hand and I had cash up front. Cause of course they’re poor college students. I didn’t want them to have an IOU and be stuck with all these notes or whatever from them spine models.  And so had all the money up front and, uh, ended up trying to figure out a way to cut out the distributor.

So I found out who actually manufactured it and then cut the distributor out. I went straight to the manufacturer, called the manufacturer up and told them, Hey, I got this order of 80 spines today together.  What can you sell these to me for?  And they told me, they said, well, how many times a year can you do that?

And I said, well, in chiropractic, we coach every three months, we have a new student class that comes through. Cause they do it by the quarter.  And I said, you know, at least four times a year, I could do that. And they’re like, Oh, okay, great. Well, we’re going to go ahead and set you up on our highest top tier discount.

 And we can sell you that spine, including shipping for $42.48.  And I was like, of course, ecstatic. Right? Cause they went from making a couple of hundred bucks to a lot more money than that. And so I cut the price of $69.95 and then like another two weeks later I sold another 40 and then every quarter I would go out and sell it, sell them.

But then that allowed me to start that business because not only did I become a dealer for that one spine model, I became yeah dealer for their whole catalog of over 2000 products and started to take my skills that I had prior to going into chiropractic of web design, web hosting, things like that, and started to sell a lot of the product on eBay and then started my little website, started to push money into Google ads and then all the way fast forward to today.

And we’re still doing six figures a month and seven figures a year of sales of that product and have a whole team that runs that. And then right after I got out of chiropractic college, I started my clinic and I was able to start at debt-free because of that business that was producing nice revenue for us.

And, when I first got into chiropractic, I realized early on that I was really trading time for dollars. So I could only, I see so many patients in an hour and whenever I want to go on vacation. Guess what? There was nobody there to run the clinics and see the patients. And so I was actually losing money and also having to spend money on the vacation.

So it really wasn’t working out too well. And so I started to hire on a team of chiropractors to work for me, and then actually started to integrate into the medical side of things and started to hire on physicians to actually work for me, a medical doctors and the nurse practitioners. And then about four or five years ago, we actually expanded to four clinics and cut out the chiropractic and the rehab completely to reduce our footprint in each one of the offices, as we continued to expand. And now we’re solely focused on medical procedures doing nonsurgical orthopedics and sports medicine.  I’m located here in Columbia, South Carolina, but we also have a clinic in  Charleston, South Carolina, Greenville, South Carolina, and North Augusta.

And then as I built those up, I was starting to generate some nice cash flows off of it.  I was writing really large checks to the government and I was really kind of frustrated with it because you know, you work really hard all year long and you’re writing these large six figure checks to the government.

 And as painful, I’ll tell you it’s very painful. And so I’d already done a lot of research in real estate, but never took the time to really focus on it. So I ended up, you know, stepping out of the clinics full time and promoting my COO at the time to the CEO. He’s still there today is doing a phenomenal job running.

You get along with the rest of the team that’s there and I’m able to focus my fulltime efforts on, you know, multifamily syndication side of things. Start off in the beginning doing some passive LP investments in different opportunities as a limited partner, and then started to put together my own deals.

And even before I started to put my own together deals together, I co-GP with another group or two.  Got to get that credibility and build that experience level, and then closed our very first deal. As, as a group, did a syndication with it, it was $8.9 million with $2 million of CapEx.  And then fast forward to today, our most recent deal we closed was a $49.955 million deal  out of Charlotte, North Carolina, raising almost $20 million for that  in the middle of the pandemic. 

Seyla: [00:06:34] Oh, wow. That’s very impressive background. So thank you so much for sharing with our listeners.  So when you first started as a passive investor, could you walk us through how you selected, the sponsors, the markets and the investment opportunities?

Dan: [00:06:47] Yeah, well, it’s totally different than when I first did it. Right. my wife and I right now have 26 different investments with nine different operators, in multifamily. So we’ve been, definitely have learned a lot of things along the way.  But one of the, one of the biggest things that I look for in a team for an operator  is somebody on that team having some form of background in business, some sort of successful background in business, because  I know a lot of people have backgrounds in business, but they,  and they know how to run a business, but some of them know how to run it into the ground.

Right. I don’t want somebody doing that. I want someone that actually knows and has a successful background of running a business because at the end of the day, when you’re buying these larger multifamily assets, you know, we’re buying businesses that just so happen to have an asset associated with it, which makes it really nice.

But you really have to know how to manage people. You have to know how to put in systems and procedures and processes in place. And then you also have to know how to make sure that you can measure things so you can know how to manage them and pivot whenever it’s necessary. So that’s one of the biggest things that I look for, but I also look for operators that offer preferred returns.

I feel like that’s a great alignment of interest for me as a passive investor.  I also look for  operators that have transparency of communication. And they’re providing me with financials on a regular basis, preferably at least quarterly, you know, more frequently as fine with me, but typically at least quarterly.

 And I also want to see that operator putting skin in the game. And, and then to me, it’s not a matter of how much they put in there. And I know our group typically likes to put in 10% of the initial equity into the projects, but, I know some operators I’ve invested with they’ll put in a hundred thousand, no matter what the deal is,  they’re going to make sure they put in a hundred thousand, each one of those deals.

 And I’m fine with that. As long as I know that they have some skin in the game, because I want them to have that significant amount of loss, right? If for some reason the deal starts to go the direction I want and to be highly motivated, to be able to make sure that deal actually is panning out and doing as well as it needs to be.

Seyla: [00:08:39] Awesome. So at what point did you know or realize that you wanted to jump into the active site of the syndication?

Dan: [00:08:46] I went into it from the very beginning knowing I wanted to be active. So, but I knew that in order to be active, that I should be investing passively so I can know what it feels like.  And I can experience what that communication level is like.

 It also has allowed me to be able to fine tune our own investor relations process with our own team,  with our own group.  You know, our group is that passiveinvesting.com is not there just to, you know, get an investor one time and that’s it. You know, our goal is to have lifelong investors that want to continue to grow their wealth alongside ours,  and an ability to build that  communication channel from experience of my own from other, other by being a passive investor and other syndications has really helped me to be able to fine tune that.

So since the very beginning, I’ve been wanting to be in the active side of things.  And so did a couple of passive investments, started to co-GP and started to put together our own deals right away.

 Seyla: [00:09:32] Wow. That’s really impressive. So what was the biggest challenge that you faced when you started that first deal as a GP?

 Dan: [00:09:40] I would say the very first one that we did on our own was probably the money raise, honestly. I mean, it was a, it was an interesting deal about how we actually got it. Cause it was a deal that we offered on. We lost it. And then four weeks later it came back to us and we were able to still get the deal, even though he lost it in the very beginning.

And, but we may close it within 60 days. So we had a 60 day timeline for closing.  We did close it in 60 days,  but the money raised piece of it was the hardest, you know, that the financing was a big question mark because we had never financed that large of a deal before.  But what we knew we internally had had a large enough bank sheet and to be able to help from that kind of guarantor standpoint,  but from, you know, being able to raise the money, that was the hardest part. And the, the thing is that was our that’s the smallest deal we’ve ever raised for, right. It was a, it was like a $2 million raise that we have on that particular project where now we’re doing almost $20 million.

Right.  And we’re looking to put together another deal. It’s going to have like a, you know, a 10 or $11 million raise. I’m like, that’s kind of a small raise for us. Now. Right. and it’s been, and it’s actually easier for us because we have that track record with our investors.  We have the investor database which makes it a little bit easier for us, or a lot easier for us now  than it was back then.  But I remember on that deal and thinking, you know, we got, you know, $150,000 hard on it and we’re going to be losing that $150,000 if we don’t raise that $2 million. It was like $2,025,000. And it took us the full amount of time to raise it right, whereas now, we can usually fill up a deal within two to three weeks and it’s a significantly a larger amount that we’re raising. So the very beginning it was, it was not necessarily finding deals cause you can find deals, but the hardest part about syndication. And if anybody tells you that it’s easy they’re lying, right? There’s no way to make this easy, right?

The way you can make it right, easiest is to have partners that you really, that really counterbalance and support you and compliment you, that can help you in different areas, which is what we have here with our group is that we have that balance of duties, if you will, where we have one person, Danny is really good at finance, all finance related and asset management.

We have a Brandon who’s really good about acquisitions and working with the brokers as well as on the construction management side of things. And I’m really good on the investor relations side of things and talking with investors and also from the marketing perspective, not just with their own group, but also with the properties as well.

And so being able to find somebody that has that kind of, those kind of, you know, mix of duties is really important. But, at the end of the day, you gotta be able to find a group that you can actually work with that you can actually know like and trust.

Seyla: [00:12:03] That’s awesome. Thank you. So how did you scale up so quickly going from your first day or two now managing a portfolio of over $275 million within just a few years.

That is really massive success.

Dan: [00:12:17] Yeah, I would say that the biggest thing for me that has really catapulted our success is having a mentor that continued to drive us.  And there’s, you know, several mentoring groups out there, you know, lots of them out there that are trying to coach people and things like that.

And some of them are really good, and some of them are not so good.  And you have to just start to do your own due diligence to make sure that you’re going with an operator, but  you’re going with a coach that can actually teach you the way you need to be taught. And for me, I knew that I wanted to be, I was willing to pay up if I had to, but I wanted to make sure that I had access to it.

Somebody who is actually doing what I was doing right then or wanted to do, and that I, that they were still doing it. Right. I didn’t really prefer to have like, somebody else’s student coach me, like having a student coach or something like that.  I wanted to actually have the guy or the gal be the one that actually teaches me one-on-one with what I was trying to do. And I want, I know, I knew I wanted to well on that, on the large scale. So I knew I wanted to find somebody that was playing in the large space already.  And even somebody who that’s, they’ve already been in the large space and they didn’t start off small and go large.

They start out large and they stayed large and that’s kind of what we did from the very beginning and really just kind of, you know, modeled and mimicked exactly what our mentor had done and is doing now. And that’s really one of the keys to our success that we’ve had.

 Aileen: [00:13:36] So, so how did you find your mentor?

Is it through referrals or did you do your own research? Like how did you know that person was the right person for you?

Dan: [00:13:44] Sure. So, he was obviously all over the place, when it comes to social media and marketing and podcasts and things like that.  I can share his name. His name is Joe Fairless, so he’s my he’s my mentor and has been my mentor from the very beginning  and, just I’ve really just connected with him. You know, I had conversations with him.  I listened to a lot of his podcasts and he’s a very direct person. So if you ever get a phone call with him or anything like that, or meet him in person, he’s very direct.

There’s not a lot of fluff, just like his podcasts. There’s no fluff with it. And that’s really kind of somebody who I’ve really connect with. You know, I’m not the type of person that’s going to call you up and say, Hey, how’s the family, how’s the kids, you know, how’s church and things like that, you know, it’s business like, Hey, this is what I need.

My request was my answer, you know, move on. And sometimes I do that and it’s, you know, it’s just perceived the wrong way on the other end of the phone call. Right.  cause I’m very businesslike and very business oriented like that, but he’s like that very much. And actually that very first deal that we got, I made a phone call to him that I will never forget that lasted a minute and 47 seconds.

That allowed us to win that deal and that deal the way we, I told you earlier that we lost it in the very beginning, and then it came back to us. Well, I look at that and I go, well, the brokers come up with the sellers coming back to me saying, Hey, the first buyer fell out. You’re next? What do you want to do?

 I’m thinking of all the balls in my court, so maybe I can lower my offer price, lower my hard money, you know, do something. Cause I have the levers that I can pull. And I remember calling Joe up and just tell them the whole scenario and saying, Hey, what should I do here? And he said, do the numbers make sense from the original offer price?

And I said, yes, he goes, then make the broker’s life easy.  And if you do that, obviously future deals will follow, but you need to just take it, like take it at those numbers. That’s right. If the numbers work with what you made that offer before, why don’t you just take it at that number? And I was like done and I looked down at my phone a minute, 47 seconds and I pressed the red button on my phone to turn it off.

And literally it was a minute 47 seconds and we got that deal. Now you might look at that and go, yeah, maybe you could have negotiated it a little bit, right? Well, I didn’t realize the impact of that phone call until about nine, nine months later, nine months later, I got a, I actually in my office, there was a private equity group out of Charlotte that drove down to Columbia, South Carolina, to meet with me.

 And that we actually were having lunch in my conference room right across the glass windows there, and now I’m having lunch. And he said, now didn’t you guys buy that deal? He mentioned the name of it or whatever. And I said, yeah, that was us. We actually bought that deal.  And he goes, I really hate you you guys.

And I was like, what are you talking about? He’s like, we were $20,000 less than your offer price on that deal. And so to me, I looked at that and I was like, you know, I would have probably offered a whole lot less than $20,000 on that deal. Right. If I was going to go back and retrade after the buyer came back to me, the seller came back to us, but I didn’t, I took the advice of Joe and I really truly believe if I didn’t have Joe on my side.

At that time, we would have lost that deal. He wouldn’t have it today and so to me, the biggest thing you need to do is find that, that mentor and be able to have conversations with multiple people because there are mentors out there that will help you in the small space. And they’re really good at that, but they won’t get you to the large space.

And there’s people that are really good in the large space. But if you want to start small, that’s not them, that’s not their cup of tea. They only apply in the large space. And so you had to interview these people to figure out who it is that you really want to go after. And you have to ask yourself as well, Where do you want to start?

Do you want to start in the small space? Do you want to start in the midsize, the large space? Where do you want to be? And there’s a mentor out there for you, but you have to make sure you figure out to figure out where you, what you want to do first, and then go find that mentor to build, to help you get there.

Aileen: [00:17:07] Yep. you’re building lifelong relationships. You’re not just doing one deal and then one deal in done you’re building longtime relationships.

Seyla: [00:17:14] Yep. That was really a great story. So, that was awesome. So what is your strategy now to continue to scale up in this business?

Dan: [00:17:23] Well, we got so many moving parts to this business now because we’ve got the head of the acquisition going on every day, you have the investor relations going on every day, we have asset management going on.

So there’s a lot of moving pieces and parts to it. And the biggest thing, there’s two biggest things that you have to have in any type of syndication business. Number one is deal flow. Right. So you have to always have somebody looking for deals,  which thankfully we have that full time with our group.  Somebody who’s dedicated to that. And then we have, the, you have to always be looking for investors. Right? So, and then I had somebody that the day I said, well, why are you still looking for investors? You guys are so successful and you guys have so many investors as it is. I was like, yeah, but you always have to be finding new investors because there’s going to be a certain point in time you’re going to tap out your own investor database if you don’t keep on adding more people to that database. Right. and so you’re always have to be looking for investors and you always have to keep looking for money. And then at the same time, you have to always be watching your current portfolio. Now, when you first get started and you don’t have a current portfolio, it could be a little bit easier, but it also is something that you always want to be thinking about because once you have that next deal,  you now have to be managing that asset from an asset management perspective and you have to be finding deals and you have to be finding new investors. So there’s multiple plates that have to be spinning at the same time. And if you’re the only one that’s spinning those plates are gonna start to fall and you need to make sure that you have your team built out, that they can come around and support you.

Aileen: [00:18:45] Yeah, that’s totally true. And so you’re managing multiple businesses all at once right now. So how do you juggle all of these different businesses and keeping your investors happy? And then at the same time, continuing to build up your multifamily business?

Dan: [00:19:00] It has to do with building out a solid team it’s just to surround you.  It’s one of the lessons that I learned very early on in my business career is that, and that’s actually, when I, when I started, I really saw the hockey stick moment in my business career is when I literally learned to hire good people, as hard as it is to delegate tasks to those good people. In the beginning, when I was hiring people, I was like, I’m just going to hire the bottom of the barrel.  I’ll get the cheapest people. Right. And that’s not really what you need to do as you’re trying the scale, a quality organization, you really need to find good, solid people that can support you and be good to you in the long run. Right. and so for me, even with my other businesses,  I don’t really have a lot of like, day to day, and weekly activities with those. I have a good day solid team that runs all the businesses.  And I have a corporate meeting that I have with them once a month for an hour, or we go over the high level specifics of things that need to be made from a, from an overall corporate perspective. And, I’m still, playing an active role as the president in those different companies as my wife and I still own them all a hundred percent.

We don’t have any other partners or anything like that, but we make sure that we have a good team to support us.  And you have to do that in this business as well. And even when we started the group, the passiveinvesting.com as our three managing partners, myself, Danny and Brandon, you know, we told ourselves in the very beginning, we want to create this company so that it could be also passive for us as well.

And then, so we didn’t want to just create another company to create another job. And so we are all of the asset management fees that we actually take off the company, go back into the company to be able to hire a good solid team to support us. So we’re not taking those asset management fees, like a lot of groups do and just take it home and put it in our pocket.

Right. thankfully we are we’re very well financially backed and we don’t need those funds to be able to live and survive. And so we have that luxury of being able to do that, but we didn’t want to just create another job for ourselves. We wanted to go out to create, an ability to go, to have a team that can surround us and support us so that we can still have some of that passivity in our life.

Seyla: [00:20:53] Wow. What advice do you have for someone who is just starting out now in this real estate business?

Dan: [00:21:00] From a passive perspective or an active perspective?

Seyla: [00:21:02] both passive and active.

Dan: [00:21:05] So for somebody who wants to be passive, I think it’s very important to be able to understand the different operators and different skill sets and things like that they need, and that an operator needs to have an order to be able to invest with them because you’re taking your hard earned money and you’re trusting somebody that you probably barely know, to be able to invest in an asset and you’re wiring this, you know, 50, 100, 200, $300,000 dollars,  and just hoping for the best, but you have to make sure that you, you place it with somebody that you actually have some trust built up within them, right?  And so you have to get to know these different operators.  So the first thing that I would suggest any passive operator to do is, you know, get on the email list. I start to have phone calls with these various operators and you’ll know quickly. And in the very beginning about how well they actually operate and how they’ve run things, do they run a tight ship?

Are they more lackadaisical? do they actually lead by application? You know, how, what type of leadership style do they actually have?  And then it’ll tell you a lot about them. And then from an active perspective, I always suggest investing passively first, because again, just like I did, I get to learn a lot about what it’s like to be a passive investor and to get to sharpen your tool as you start to communicate with your investors and then, after you passively invest on like one or two or three or however many deals you want, then you just start to become a co-GP.  We’re actually joining another group that’s an active operator putting together their own deals. They have their own track record.  And then once you have a couple of deals like that, and you’ve built your own track record in your ability to be able to talk to sellers and brokers about how you have a certain amount of money or Number of units and amount of dollar amounts or assets under management, if you will, it starts to build that credibility with the actual brokers and the sellers that once they get a deal that’ll be awarded to you a lot sooner, right. And then start going after your own deals. And then once you start closing your very first deal, you’re going to start to get more and more deals after that.

And people will start to reach out to you. I mean, right now we’re closing large deals. And so now instead of us have to reach out to brokers, guess what? They’re coming to us. And we have brokers coming to us saying, Hey, I heard from this broker and that broker, right. As you close this deal and that deal, and you know, you’re actually doing this via syndication and that you’ve never had to extend and you’ve never had to, you know, not do a deal because of equity or whatever.

Cause that’s one of the biggest things with syndication is that the sellers and the brokers don’t like it because they’re afraid that you might not be able to get the money. Right. And so they’ve spent all this time, energy and effort trying to sell the deal and they’ve pushed away another one buyer that maybe has all the cash, but you’re a little bit higher.

 And so they’re taking a risk on you, right? They’re taking a flyer to see, Hey,  can this person actually execute. But I will tell you that if you take an offer and you don’t execute, it can be very detrimental to you because your reputation is going to be hampered and tarred in that community.

 And it’s going to be hard for you to be able to rebound from that kind of a reputation. And you might have to go to a different market to start investing, start to acquire properties because these brokers do talk. They talk all the time and it’s surprising to us because we’ve even had. Off market deals brought to us because another broker was talking to another broker and they told us to call that broker about the deal, right? And these aren’t even brokers that were in the same group. They’re in two different groups. It’s not even associated with each other, but they do talk. And so you have to make, and the sellers talk to the sellers, talk as, Hey, this group or that group, you know, whatever do they started to get that bad taste in their mouth and you have to make sure you uphold that reputation.

Seyla: [00:24:18] That’s really great advice , and I totally agree.  Some of the markets they are close to each other where the brokers can actually talk to the neighbor’s markets. So it’s really important that if you take the deal, you have to make sure that you can execute your business plan.  So what is one thing that sets the successful people apart in this real estate business?

Dan: [00:24:38] I think it’s their drive. I think it’s their drive to actually move forward and actually take action.  There’s a lot of people that I know that talk a big game, but when it comes to executing and they just, they just can’t, they just can’t pull that trigger.  I don’t know if it’s not, I don’t know if it’s necessary, so they just can’t pull the trigger it’s that they just won’t pull the trigger, right? Because there’s a difference between whether or not you have the ability to pull the trigger versus whether you actually do pull the trigger. And so for me, I’ve always practiced with a relentless implementation mindset where if I’m going to go do something, I’m going to go do it.

I’m going to go do it a hundred percent and go do it now. Right. I want to execute, and relentlessly implement. And the people that are separating themselves from being successful versus mediocre are the people that are actually going out and executing and not just creating a bunch of excuses for themselves.

 Aileen: [00:25:27] Right. You need to stay defiantly committed to your end goal.

Dan: [00:25:30] That’s right.

 Seyla: [00:25:31] What has been the highlight of your real estate career?

Dan: [00:25:35] Wow. I would probably have to say in the middle of COVID-19 being able to lock a deal up. A matter of fact, we actually locked that deal up a week before COVID hit. And then of course had some big pit in our stomach moments when the bottom falls out of the market and you have a pretty significant amount of money, hard on a $50 million deal, and you have to raise almost $20 million, which is the highest you’ve ever had to raise. And your second highest was $14 million.  So you’re raising, you know, almost $7 million or $6 million higher, from your prior raise. And then, the bottom falls out of the market. So to me, that was a scary time.  It was a time where we’ve definitely lost a lot of sleep in that time. We knew it was a good deal. It was a solid deal. We did have to retrain it because of some of the debt changing in the market.  But we, you were able to get a reduction in the price for it, right. But the, because of the quality of the asset and not really doing very many rent very much on the renovation side of things, because it was actually a class A asset that was built in 2014 and didn’t really need any renovations.

It was really just a nice cash flowing deal for the next seven years, we were able to raise the money. It was, we had a 30 day due diligence, 30 days to close with no option to extend, unless the financing contingency due to COVID, where are they? Like they like the lender couldn’t send an inspector out or whatever cause of COVID travel restrictions or something like that.  So we really didn’t have any options to extend. It was like 60 days or nothing. Right. and so we were able to get that thing. We were very, we raised the last amount of equity on that deal. 59th day. And after the 59th day, we got the money in and the 60th day we closed. And so it was really exciting to be able to see that one go from the very beginning  and then COVID hitting, and then being able to actually have our investors pull through.

We have a really good database, but we have real good relations with our investors, which allows us to be able to raise that kind of significant money capital in the middle of COVID-19.  And, we were very happy and thankful for our investors that actually pulled through and  put money into that project.

And this can be a great deal for them for the next seven years. So, so that was definitely the highlight so far of, of my real estate career at this point.

Aileen: [00:27:40] Yeah, that’s going to be really hard to top the next one.

Dan: [00:27:43] It is. It’s definitely going to be hard. I’ll never forget that. I will tell you that was probably the hardest next to the very first deal that we raised.

So, because that deal, I knew we had enough investors to raise the money for it. It was a matter of having enough conversations and phone calls. And we actually, I think did like six webinars for our investors on it because every month, we wanted to tell them about the collections for the month, because that was the big question mark.

Like everybody was like, Oh, well just wait till April comes in. The April collections are going to be down. And then of course, April came back okay. And then, well what about May? And then of course, well, every month it’s going to be like that. Right. Well May comes in and what about June? You know, so there was definitely a lot of question marks when it came to that, but because of the quality of the asset that we were buying, the actual residents were able to pay their rent just fine.

And they were, they were 98% plus collected through the entire pandemic.

Aileen: [00:28:30] Oh, congratulations to you and your team.

Dan: [00:28:32] Thank you.

Seyla: [00:28:33] So what tools or techniques have you used to improve the efficiency of your business or personal life?

Dan: [00:28:39] Wow. From the business side of things. The biggest thing that I’ve started to implement is, is we just launched an investor portal.

So we had kind of been pushing back and pushing back. I got weekends trying to do an investor portal because of some of the issues that we had seen, but we have now implemented it. It has been very nice for our investors to be able to go in there. It’s made our life a lot easier. From the syndicator side of things, and there’s no more asking us for documents, that’s all loaded on the portals.

They can access it whenever they want updating the ACH information, all that kind of stuff.  We also use a software that’s outside of that. That’s called air table. it’s actually a software that’s, line spreadsheet software,  and we customize that software to allow us to be able to keep track of our deal flow.

So there’s other paid programs that you can use for keeping track of deal flow. There’s like a deal flow manager or something like that for real estate, but we actually used Air Table and just customize it for ourselves before we even knew that software even existed.  And it allows us to be able to internally, have comments and have communication and load our T twelves and rent rolls and historicals, and, you know, the OMs and the offer dates and things like that, which markets are located in, and what’s status the deal is in. Whether it’s in, you know, are we just in the initial underwriting phase? Or the due diligence phase or is it actually an upending LOI? You know, where is the actual status of that  property? Cause before we’re just using buckets within Dropbox, right, to kind of keep track of things, but it was just getting all over the place.

And then like, I would have a Dropbox folder full of things and then somebody else would have one and yeah. All over. And so being able to have everything, just one place that we can all communicate. And also we have a place that we can actually go back to in the future to see why did we actually not go with that deal? And actually have comments and historicals on there, and even being able to see, like, what did they sell it for in the past? Or what was the prior T 12 and rent roll and what how’s it doing now to have that comparative analysis from the financial perspective has been really important for us to, and from a personal perspective, there’s two things that I’ve really found that’s been really beneficial is as we, our team just migrated over to Microsoft teams.

And so we are, we’re all in the cloud now. And so that’s been very beneficial. And obviously I use outlook for Microsoft teams for my email system. And it’s, it’s been, I use my calendar. Like every single day, like my calendar, if it’s not on my calendar, it’s not even, it is not going to get done. You know, it’s to the point where I told my wife, like, if you want me to do anything outside of work, you’re going to need to put it on my calendar.

You know? And, I don’t see that like as like mean or like derogatory, bad way for my wife to have to schedule something with me. That’s not what I’m saying, but yeah. Like just today, I got three calendar invites for my wife because we have four children. So we have kids that they’re all under 10.  So that was a nine, eight, three and two. And so they are all doing types of different types of music and sports and one has a string recital and a piano recital. So she’s just, she makes sure that gets put on my calendar so I can know when it’s actually coming up.

And then one thing that I use personally for my investors is I use a, I have an assistant that schedules my appointments, but when she can’t get ahold of them, she’ll send them a link to Calendly and Calendly has been very beneficial cause it actually connects into my outlook and the investors can’t see my calendar, but if I block off something on my calendar, it blocks it off on Calendly automatically and they can see what open times I have available and I’ve time blocked my calls with them on Tuesdays and Thursdays. So that really kind of structures my time as much as I can. And so it’s allowed me to be able to have a little more flexibility. And I have to have these emails going back and forth to investors, to, you know, waste time trying to figure out, Hey, what about 4:00 PM or 5:00 PM? They’re coming back. Oh, I’m not available then. Well, Oh, what about, you know, you know, two or three or, you know, going back and forth on the different dates and times, and you know, you know, your account or here’s access to my calendar.

See if one of these works, if not. Well email my assistant and she can, you know, jump on a phone call with you and kind of try to figure out a better time for you. And it’s worked out really well. And I actually prefer to use that on other people is when they send me when they want to send an appointment to me, for me to schedule with them, I like clicking on those calendar things because it allows me to be able to not have to have that back and forth with them.

And same thing. I, it makes it easier for me to be able to just pick out what’s available on my calendar or try to find one on theirs.

 Aileen: [00:32:39] Awesome. Thank you so much.  Well, if our listeners wanted to find out a little bit more about you and reach out to you, where can they go to find that information?

Dan: [00:32:47] Sure. there’s two different places. So if you’re interested on the active side of things, you can go to multifamilyinvestornation.com.

There’s a place yeah for you to sign up for our weekly webinars that we do every week.  They’re free. We don’t charge for them. And we talk about all kinds of things around multifamily. It’s also good for the passive investor just to get some education. But if you’re an investor that’s interested in being passive, you know, we’d love to have a conversation with you and see if you’re a good fit for our group cause not everybody is.  But you can go to passiveinvesting.com and on the top right, right hand corner of the page, you will see a button that says join the passive investor club. You can click on that, fill out the form and I’ll jump on a phone call with you, discuss your investment goals, to see if we’re the right fit.

And again, thank you guys so much for having me on.

Aileen: [00:33:31] Awesome. Thank you so much, Dan. It was a pleasure talking to you today.

Dan: [00:33:34] You as well.

Seyla: [00:33:35] Thank you so much.