Bryan Chavis, the bestselling author of “Buy It. Rent It. Profit” is highly regarded as one of the leading experts in the multifamily field having spent the last two decades learning from the ground up what it takes to invest in multifamily units. Being in property management himself, and working in all areas of multifamily, his unique perspective has allowed him to find great success in real estate – and lending valuable insight to his peers as a professional speaker, author, and business coach. Being able to see the business from a different perspective than most investors today in the field, Bryan’s refreshing take and step by step methodologies truly show how to build long-term wealth.
On this episode of Multifamily Real Estate Investments with Don and Eden, Bryan discusses his start in the real estate industry and how technology has made a vast difference. He also will explain the five phases of stabilizing the property and the details for scoping out the right property. His steps for how to create wealth as a syndicator are revolutionary and powerful for anyone looking to conduct business in real estate. If you are an entrepreneur seeking insight that is sure to bring results then this is the podcast episode for you.
Highlights:
- Bryan’s Beginnings in Real Estate
- Five Phases of Stabilizing a Property
- What to look for in a Potential Property Manager
- Why Multifamily Units are Personal to Invest In
- Current Projects
How to Connect with Bryan:
AllisonsAlligator.com – Nathan (Bryan’s Day One)
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Transcription
Hey, guys today I’m interviewing Brian Chavis, the author of the book Buy it. Rent it. Profit! Brian is a very successful multifamily real estate investor and syndicator. He’s also considered to be a leader when it comes to multifamily investing. What I think is so special about him is that he started his career as a property manager and that’s why his insights are always on point since he had seen this business through its core. So let’s get started.
Welcome to the Real Estate Investing podcast with Don and Eden where we cover all aspects of real estate investing with special attention to multi-family apartment buildings and off-market strategies.
Hey Brian, welcome to the show. Thanks for having me. Good to be here.
So I’ve been wanting to have you on the show ever since I was listening to you in a different podcast. And I got to say that you’re one of the experts that I’ve ever listened to when it comes to multifamily management and you’re a very renowned speaker. The first thing I want us to do is, tell us a little bit about yourself and what you’ve been doing in the past year and what you’re doing right now.
Oh, awesome. I’ll be glad to. My background as is the multifamily industry I got started in this industry well over a decade ago – probably push closer to two decades now but first got into this industry just leasing. I started leasing apartments worked my way up from leasing into management to acquisition specialist. So really I’ve been around the multi-family industry from day one. I think when you were saying and I greatly appreciate the feedback that you heard me on other podcasts and gravitated toward my style or my brand I think that comes from really just living this and doing this for so long. there’s a lot of syndicators and there’s a lot of outstanding guys out there getting involved with my multifamily. A lot of experts now offering classes in educational content which is awesome. I love it. We welcome it and I admire all those guys but very few have started like I have, which was almost 20 years ago leasing, management and working their way up through the multi-family industry a lot of them got in as syndicators and been blessed to have the opportunities to be able to raise money coming from other positions or jobs and creating these real estate investment firms where they’re now acquiring multi-family but there’s very few of us who’ve actually lived and breathed and worked and got a W-9 from this industry so I feel like that is kind of what sets me apart is that as a practitioner this is what I do this is who I am. So it allows me to be able to really give great content great feedback what I feel is which makes the podcast so interesting is because I’m usually not regurgitating something I’ve heard I’m usually telling you something I know, so at the end of the day I think that why the viewers and individuals resonate with what I say on the podcast or in my lecture.
Yeah definitely. So when I was 18 I told my father I wanted to open a bar. And so my father told me ‘that if you want to open a bar -first you got to be a bartender. And I could totally relate. When I think about your story that you became a syndicator- right? you’re syndicating deals right now. Yes. So you became a syndicator but you started from the bar. If we use that analogy and so I think that’s terrific because you get the insights from firsthand. You really know what’s going on the inside. And so I want to ask you how did that make you a better syndicator?
Really its fundamentals… experience. The one thing that no one can buy you can’t acquire in books. You can’t go to a four or five-day boot camp can’t attend a mastermind and obtain experience. And I’ll go a step further. Not only experience- but tested & evaluated experience. There’s a ton of people out there who’ve gone through life or gone through some sort of experience but haven’t really learned from it. they’ve haven’t mastered it. So for the experience of being in the industry and the multi-family industry allowed me to not only become trained and educated through the National Apartment Association and taking my certifications and then going on to teaching a lot of the courses through the camp certification but it allowed me to experience managing and operating thousands of units. And at the end of the day, that’s the key. That’s the great divider separator you want to just make sure that you’re syndicator that you’re dealing with has some sort of experience.
I know a lot of people say experience syndicating and that’s good. I also like experience and that you have experience as a syndicator but you also have a hands-on experience at operating these properties because experience at the end of the day if all hell breaks loose- there’s countless YouTube videos with me stepping foot on the property and releasing everybody on site going to work for a private equity firm and having to fire the staff at one hundred thirty three-unit apartment building and actually run in it for a week or so by myself with just me and my personal assistant until she was able to staff it and help me staff it. We’d close it down for lunch and did the interviews and then I spent two days training the new staff and then staffing the place so that at the end of the day to me if you’re raising money and you’re a syndicator you want to stay on top of your game you want to always continuously be educated and have as much experience hands-on operating experience as possible. I think at the end of the day I think that’s always for me is always a key fundamental or a key trait.
Yeah. I mean I think if you were raising money for me and I know that you were also a property manager and that’s how you started and so it would have been a strong card so it would have been I would definitely consider. So thinking about giving you my money to work with because I know how to handle it. And so I’m pretty sure that helped you a lot. And I also know you wrote two books on multi families right? Property Management. So tell us a little bit about these books.
Yeah. Well, those books for there were social media before brands were created in and thought leaders were instantly created like a microwave label product.
There was me 15 years ago and I had a book a manual I wrote out of the back of my car I was working in the multifamily industry at the time managing thousands of units and I decided I wanted to become ago and a real estate entrepreneur and I didn’t have two nickels to rub together hand. So I decided that what I could do is write about the procedures manual and Operations Manual. And so I wrote this manual and selling it out of the trunk of my car and I was visiting various different real estate associations and I had no experience speaking. I actually sucked at it. I mean I had several people would put on the comment forms that I looked like a deer in the headlights. But I kept grinding and I kept going at it I kept doing it and eventually, people would start to come in wanting to meet with me outside of these real groups. And so then I started to hold these little meetups before meetups were popular I started holding them at a Kinko’s off of Dale Mayberry in South Tampa and they allowed me to use the broom closet. So I cleaned up the broom closet because the manager actually was a part of one of the groups, they let me come in. I cleaned up the broom closet, cleaned the boxes out and I put a table in there and started holding meetings and teaching individuals how to manage their properties properly. And then I would try to sell my two hundred dollar Procedures Manual that ran their entire business for them, give them all the forms everything they needed the procedures, how to do it, how to interact with prospect tenants, how to deal with them, how to move them in, how to move them out, how to evict them if they ever had to do an eviction. So the procedures manuals were the same manuals I was using pretty much operate thousands of rental units so it was kind of second nature to me.
Then, that eventually became the distant relative to the books that are out there on the shelves now and I think one other thing that makes me unique is that these books are published and both are best sellers. One is, ‘Buy It, Rent It, Profit!’- the original is in the US Library of Congress. So it’s not only a best seller and published by Simon Schuster but it’s in the US Library of Congress so I’m extremely proud of that but I’m probably more so proud of the humble beginnings. I wasn’t born up social media age of being able to grab attention by doing YouTube videos I mean the content delivery I was doing was organic- I was living it day to day and now it’s just sharing my knowledge with individuals and my experiences with individuals. I think again that falls back to where you ask me what makes me different. I think the big difference is just experience… tested & evaluated the experience and so at the end of the day I think that experience came through to the training materials comes through to the books comes through my coaching programs and I believe that’s really what gives not only myself but others the opportunity to succeed in this industry is being able to piggyback off of someone else’s experience. That to me is is key because I’ve piggybacked off of my predecessors and most supervisors in the months our family industry who taught me getting and tons of others that I’ve worked for in the apartment industry I’ve learned from these individuals so it’s it’s really passing it on and then passing it on through curriculum and design and training coaching programs. So I’m just really doing what I’ve naturally done from the very beginning.
Yeah, that’s truly inspiring. And I want to talk about your book ‘Buy It. Rent It. Profit!’ So actually I read your book. It was a long time ago as I think I was a year ago. I read a lot. I do a lot of reading and that’s I think that’s truly essential in today’s world. I always talk about it here in the podcast. You’re saying stuff about social media and the world the way it used to be. I think the world is very different right now and I think that there is access to so much information. So what is essentially what is a book? A book is the life study of a very smart man. Think about it. I mean isn’t that what it is. I just said it on, I was hosted by this youtube channel and I just said it over there. It’s called ‘One Rental At A Time’. If you guys want to see me over there. So yeah they asked me about books and reading and I said I read a lot. And the reason why I think it’s so important to read is because, think about it, if you’re not reading your competition is always reading and they are acquiring the life studies of very smart people. Right. What is it what does it cost? Ten dollars? I mean it’s so cheap to get that critical knowledge for whatever it is you want to do so I have read your book and I want to talk about that book. I want to talk specifically about the ‘Five Phases of Stabilizing a Property’ because I think this is really getting down to the details without crunching too many numbers. But I think it’s really what the audience needs to know. So I know the five phases are Acquisition and then Implementation, Stabilization, Growth, and Exit Strategy right. Exactly.
So I want us to talk on and dedicate the rest of this interview or the majority of this interview for these five phases. So could you please tell us shortly about each one of the steps and what are the most important things to look after or look for in these steps when you’re buying and trying to stabilize a multifamily property.
Yeah. Acquisition. The number one phase of the five phases is understanding how to acquire a property from an income approach. And I think at the end of the day there are always challenges when you have an investment firm and your firm is thriving or you’re syndication thrives for putting deals together. The idea is where do you find deals? I’m fortunate enough to live in Tampa, Florida area where there are deals for me and a great market is in my own backyard. However, the ability to find and evaluate these great markets are to use another process called the ‘SEOTA process’ if you read the book ‘Strategic Evaluation of Our Target Area’ and they wanted to identify your area through building permit activity demographics and graphs of your prospect tenant knowing really more about your prospect tenant than they know about themselves. Then you start looking for deals and then you back deals into that particular understanding that prospect tenants demographic- that’s going to reveal the type of projects or deals that you can really go after like what type or class and asset classes you’re going to kind of target. Whether it be A or B or C asset classes and then obviously the price points you want to pay for those because those premiums there are premiums on A, B and C properties. A and B properties are obviously more and you can’t build a Class B property out of the ground because of the cost of construction so knowing and identifying your assets once you’ve done that, then you will acquire it from an income approach and then understanding what does that income look like in the future not what you’re acquiring and far the entry cap will put the exit cap may look like there’s always a balancing act. For me, it’s really understanding who that prospect tenant is.
I’m not gambling on the property itself. I’m more so gambling on the prospect tenant at the end of the day, so I’m really the gamble is really not appropriate and that’s something that should be stressed. It’s on the market essentially. Well, it’s on, that not only on the market but what makes up the market so you gotta keep drilling down. That’s where again where you see a lot of the Internet gurus they’ll say ‘oh you focus on the property.’ Everybody is talking about underwriting properties and real estate is not about the property. Multi-family, in my opinion, is not so much about the property as much it is about the prospect tenant the demographic. I always say real estate is about people right.
Buildings don’t pay rent. People pay rent. So at the end of the day if what’s going to increase value over time you’re increasing value by a periodic increase of rent and a periodic pay down the debt and that’s how you create value. And at the end of the day this whole game that we’re playing is predicated upon the prospect tenant and how they react and how do you react to market conditions. So you have to kind of forecast market conditions and then you have to kind of forecast how that’s going to be how your prospect tenants going to react to those market conditions, therefore, i.e. no impact the value of your asset moving forward. So a lot more to it than just go into a five-day boot camp and thinking you’re going to learn everything you need to learn about this industry by understanding how to underwrite property numbers can tell you a lot. One of my good friends the boxer, Winky Wright. Winky said ‘everybody looks good on paper. Everybody’s a competitor on paper until you get in the ring and get hit in the mouth’ – everybody looks good and until you actually get hit. So at the end of the day, X’s and O’s and strategies and numbers, they can help predict. They can help evaluate but they don’t run the property at the end of the day. Someone’s got to get in there from the operational level and know how to run this thing on Monday through Friday or Monday through Sunday. So that’s extremely important for individuals to understand. I think that’s where a lot of this is lost. This is really understanding how to evaluate investment properties from the acquisition level by really understanding who your prospective is and really identifying that demographic and forecasting them.
Then you move into the Implementation phase where most lose on the implementation phase because they don’t know how to implement the right types of systems -there are two types of core systems hard systems and soft systems. The hard systems are your procedures & manuals. The manuals should identify the work that needs to be done Monday through Sunday. Then tell the user how to go about performing that work in a consistent manner like a franchise. So, if you have a franchise – your multifamily apartment building you’re not running it like a franchise which means I could take it and put it in any kind of city or any state or anywhere in the country and it runs the exact same way, then you really don’t have a business model. So, first of all, you have to implement the type of systems that will allow you to kind of franchise the way you’re doing business which really means offer consistency because when you can offer consistency then you create profitability. So then you have the second system which is the soft systems which are your property management software. You have Appfolio, then newcomers that are disrupting like Uptop which is a free property management application. So if you’re a real estate broker or agent you’re trying to strike into the property management you probably want to look at those free platforms.
So, you systemize the apartment building and then you’re in the implementation phase which brings you into Stabilization and then now you’re focusing on stabilizing the property which is maximizing income and minimizing expenses. So you’re maximizing income and you’re minimizing expenses and that’s the name of the game because typically you’re buying a value add project. If you’re syndicator like I am looking at the deals and you’re looking to be able to add value and create value over a period of time and exit at a higher value. So that is done through stabilization and then of course then you’re focusing on Growth.
From Growth, it’s the Exit strategy and typically the exit strategy is to refi. And obviously, if what you’re doing as an operator the ability to refi is all about having management in place, good numbers, good T-12’s is basically your accounting, your profit and loss statements for the past year just making sure you’re on top of your game as an operator. So make sure that you’re on top of your game as an operator allows you to refine that you can refine pay off your investors reposition and then you just keep them you keep the ball rolling. Really that’s how you create wealth as a syndicator because you’re taking a percentage of each of these deals and obviously if you look at your IRR if you’re only putting maybe zero to 5 percent into these deals and you’re reaching your press and you’re reaching your goals and structure I mean you’re making 100 X obviously if you’re putting zero when your ability to be able to create seven or eight-figure incomes for yourself based on your approach to this business is really obtainable.
I mean if I could do it. I mean to be told that anyone could do it.
Yes, I mean I think you could do it you’re a very smart man.
But I really feel like the reason why I excel is like you I read and then go back to that reading and a lot of people, I think I’ve been criticized before – well someone said I know because I’ve mentioned to them that I didn’t read a lot of books. However, they didn’t let me finish. I don’t read a ton of books. What I do is I find four or five and I master them and I won’t move to another book. It’s like I master the three or four that I’ve read. And so I’m not big on consuming a ton of information or a ton of books as much as I am about consuming one book and mastering that book and implementing into my lifestyle. And for me, I can’t speak on anyone else but for me, that takes time because I’m a bit of a knucklehead so to read a book like ‘The Book of Five Rings’ and to master that and implement it or read a book like ‘The Richest Man in Babylon’ take me a while to implement it and make it a day today. So for me, I’m not necessarily the smartest person I’m definitely not the smartest person on my team. But at the end of the day, I just think that while others are playing checkers I’m playing chess and not necessarily smarts but I think it’s strategy and that I leave it at that.
Yeah. Which for me, that’s what I mean when I say smart. I also never went to college and I and I have a high school diploma and that’s it. And I don’t think I need more than that because I think being smart and successful is measured by society by being a good student which doesn’t necessarily make you a successful man. Because I wasn’t the best student in my class but I’m pretty sure I am one of the most successful ones. if you look at my class I grew up in Israel and I know the situation of the people there. It’s like they’re doing okay. They’re not bad. But I know they’re not doing well right. I mean some students in my class they were so smart and they would get like A’s on every test and I wasn’t like that because I don’t think that the things they teach you in schools are necessarily the things you need to be successful in today’s society. I think it’s a little bit outdated but that’s a subject for that we could talk about for hours.
Absolutely. And it’s funny because I have three coaching clients that are Israeli and they’re three of my favorite guys so I definitely understand that I understand the school system, I understand the struggle because I’m helping them syndicate and a lot of it is what it is- the school system is a factory. You gotta get them in, you got to get them out and move them on- you get caught up in that because everyone learns differently. So, I think that’s why again people resonate to my coaching programs and they resonate to my lectures, and podcast because I think I deliver it the way that obviously people had time in school. it should be delivered but we have such imagination. So we feel like if they’re not successful in the school that they can’t. I mean look you can go to YouTube to you to see so many different places where you can grab education.
I knew nothing about private equity firms. I just went on online research took a few classes online classes on private equity firms and start them and I didn’t know much about the finance world took a few classes on finance so I’m always learning I’m always evolving. So at the end of the day if you’re the same person you were even a week ago something’s wrong you should always be constantly looking to evolve and push forward. So I’ll say no more than that.
Definitely. So I want to ask you as a property manager or somebody that started this as a property manager what would be the things you think are the most important things to look for when you hire one for your property that you’re trying to stabilize?
That’s a good question. Very good question as to what to look for property managers. Mostly as syndicators, you should be an asset manager. Every syndicator, every investor should start trying to start an asset management business and grow from there. And so as an asset manager, a syndicator you’re really looking when you hire a property manager- you want a property manager to really understand how to navigate those five phases and you really want them to be able to sit at the table with you and look at your project and offer you a management plan. I mean how many property managers have you ever sat with? And I encourage anyone to think about this who or maybe bring it on property management or even interviewing property managers ask or find out how many have ever sat down and brought you a release a framework of a management plan for your project. So if there’s a project and I’m bringing a 150 unit project to a property manager I’d want them to at least develop some sort of framework.
Well on that particular property do some research and bring me up to the beginnings of a framework of a management plan on their strategy for this particular property identifying the prospect and its demographic. What are we going to do to increase rents? I mean is that going to consist of changing units that can mean you can watch all my videos you can see what I’ve done at Park Plaza you can see where I know it’s about changing fixtures and vanities and the type of ceiling fans you’re putting in all that to attract a certain demographic. And then there’s a price associated with that what does that cost? What is the recapture rate on that i.e. payback period on that? I’d like the property manager to be able to identify not just say ‘OK I just handle your headache for you, I’ll handle the tenants I’ll handle it.’ There’s a strategy, people really think a property manager’s job is just to kind of just manage it & keep an eye on the farm make sure the wolves stay away from the stable. But that’s not property management that’s stewardship. If you’re a good property manager you’re developing management plans. You have a plan on executing the prospect tenant, how to tap into that demographic, how to increase rents over a period of time, how to forecast market conditions by our competitors in the area. So you’re sitting down to the table and you’re articulating that to me, whether I already know it or not, it helps me, by knowing that my property managers can articulate that. So that’s one of the first things that I’m doing when I’m looking in evaluating property managers.
So let me see if I got this right? You want to see that they’ve done their homework when they come to speak to you and that they’re just trying to sell you themselves. Right? Right.
Yeah I mean I’m not interested, I’m looking here at a fancy brochure on my desk. I mean this is Nathan Johnson he’s the guy that handles all the marketing and branding. I mean you’ve got a nice fancy brochure, but a brochure won’t manage my property. I mean, it’s great a brochure- it might open the door for you, might get you a sit, an interview or some sort of meeting for a cup of coffee. But at the end of the day, if I meet with you and we’re talking about my property, I want you to come to the table, not with fancy brochures, or a business card I want you to come to tell me what the plan is for my particular property. I mean I’m already going to have one as a syndicator but I want to know that you’ve taken the time to come and let me know that you’ve done your homework as well.
Definitely. So I want to thank you for coming to the show today and dedicating your time. I know you’re a very busy man and so let me ask you what are the best ways to connect with your audience. If anybody wants to reach out to you?
Cool. Great. Yeah. we just launched our new BryanChavis.com – There you’ll be able to find me. We’re launching our new coaching programs I actually have a ‘Buy It. Rent It. Profit’ masterclass coming out. That’s gonna be awesome. We have our designations, our certified real estate investment specialists and then we have our certified apartment syndicator which is a class designation so we have those two designations that are coming out within the next couple of months. I encourage everyone to go online definitely start with that master class to buy a property if you love the book. You going to love the course the ‘Buy It. Rent It. Profit.’ class should be ready in a couple of weeks and then the designations will follow in a few months. And if you’re interested in coaching I’m always here if you’re a housing authority you’re a private equity firm. If you’re a wholesaler and you’re looking to get into commercial, the coaching and consulting that I offer I highly recommend that and then the ability to also we offer templates and white labeling and licensing. So if you’re a startup company you’re looking for instant credibility you can license my brand and we can help you with your direct mail pieces in your sites and stuff like that so there’s a ton of information if you’re interested in actually investing please visit ChavisCapitalRE.com. My YouTube page is BrianChavis.com/YouTube and make sure you can always find me on Facebook and in our multi-family meetups, we do those. We’ll be doing them twice a month. We got a next one I believe coming up soon it’ll be announced on our Web site and come out to the multi-family meetups- meet other accredited investors and get to know your local investors and your influencers in your market.
Yeah, that’s perfect. I got to start looking at your website right now. BrianChavis.com. And it’s a beautiful website. It’s designed meticulously.
I give credit to Nathan Johnson. He owns a company called Allison’s Alligator– he’s been with me since day one. Well, a really long time and he puts together an impeccable brand and we work together to help syndicators and wholesalers and individuals such as yourself develop their brands. And the idea is to be able to piggyback off- you’re never going to be able to get 15 years of experience like I’ve got. So why not just piggyback off of my experience. Learn from standing on the shoulders of giants. So we definitely offer that to everyone so there is there’s really no excuses at the end of the day.
Wonderful Bryan. Thank you for a great interview. And I hope you’re going to have a beautiful rest of your day.
Well, thank you for having me. I greatly appreciate you. Continued blessings. Of course- Thank you. You too.
Thanks for listening to the real estate investing podcast with Don and Eden. Stay tuned for more episodes. Till next time.
