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March 1, 2022

Enjoy Your Journey Investing In Real Estate With Hoa Nguyen [EP090]

Do you want to learn how to invest in real estate? Hoa's advice is, enjoy your journey. Hoa and her husband are both eye doctors who opened and operated several practices before getting involved in real estate.  They started investing in multifamily real estate after they realized that it was the best way for them to build their wealth. They‘ve been very successful with this strategy, and now they are sharing what they’ve learned with others so that more people can benefit from these opportunities. The first step is learning about all of the different types of investments available, such as single family homes, commercial properties, and multifamily units or apartment communities.

Once you understand your options then you can start looking at specific deals and making decisions based on your own unique situation. There are many benefits associated with investing in real estate including tax advantages such as depreciation deductions which help reduce taxable income each year; cash flow from rent payments; and appreciation when property values increase over time. These factors make investing in real estate one of the most popular strategies used by investors today – especially those who want long-term financial security. Listen to hear how Hoa and her husband built a portfolio of over 5,000 units and more importantly how you can get started today!

Episode Video:

Table of Contents:

Enjoy Your Journey to Wealth

Enjoy Your Journey to Wealth
Photographer: Towfiqu barbhuiya | Source: Unsplash

Darin: Hoa and her family live in the DFW area. She is an eye doctor that got involved in multifamily real estate investing to build wealth. She's a master at developing relationships and pushing the envelope on getting uncomfortable to grow. Hoa attends many conferences. She's a speaker, an author, and is about to co-host a TV show with her husband. There’s no stopping this girl from continuing on her journey.

We are both part of the same multifamily mentorship group based here in Dallas, the Brad Sumrok Group. We've known each other for several years. In the last couple of years, Hoa and her husband, Jaime, have been killing it. I'm excited to hear what they've been up to and how they've been doing it. First question, how many properties and how many units are you currently invested in?

Hoa: We are currently invested in 21 properties, over 5,000 units. Out of those 21, eight were cosponsors and the other 13 were limited partners.

Darin: I've had a lot of guests on the show. We’ve talked about limited partners, general partners, but this idea of cosponsor, let's introduce that term to the listeners. Explain what that is because, like you mentioned, out of the 21 properties, you guys have been cosponsors in eight deals.

Hoa: Cosponsor, interchangeably, we use that as general partners. Jamie and I usually partner alongside others, depending on which market. We are heavily in Houston and DFW, and then we have one property that we're general partners in South Carolina. But the general partnership, unlike the passive, as a limited partnership, you're more hands-on. For us, we do two parts of the pillar. Actually, we do three, but we like to predominantly focus on two pillars.

Discover How To Save Taxes and Build Wealth

How to Build Relationships and Enjoy Your Journey

Hoa: A general partnership/cosponsorship either focuses on the acquisitions or building the relationship with the brokers. Looking and touring at the deals, underwriting of the property. Jaime and I are always constantly doing that. Then the second pillar that we're always doing as cosponsor slash general partners is investor relations, and the equity capital raise.

Those are the two pillars that we're very strong in and have really helped us accelerate. We’ve joined other teams who are more experienced in asset management, operations, construction, and CAPEX projects. We like to partner with other general partners that that’s their strength.

Darin: That's so important when you're out looking for partners that you share that. There's a lot of different people in this industry. It's not good enough just to say, "Hey, let's partner together." You could be a good person, but if you both like doing the same piece, it doesn't make all that much sense. You're still lacking in one or two of the other areas. Have that discussion early on as to what part of the business you want to manage and you are stronger at. Then try to complement that with other partners that are stronger in different areas.

Talk a little bit about your background. You and your husband, first of all, you guys are a team, and it's not always that way. There could be that the husband's in real estate and the wife's not or the wife in real estate and the husband's not, but you guys are a team. Talk about your team approach and what roles and responsibilities the two of you play. Where did you guys come from before you got into real estate investing?

Learning Hard Work at an Early Age

Hoa: I was born in Manila, in the refugee camp in the Philippines, and Jaime was born in Mexico. We're both immigrants. I came to the States when I was eight years old. Jaime came to the US when he was five years old, from very humble beginnings. I've been a young entrepreneur by the age of 10. I was working full-time in the family business by age 10. It was school and work, that's all I did seven days a week.

Darin: What did you do?

Hoa: I started off in the convenience store. I worked in the kitchen with my mom. My mom doesn't speak English so I worked in the cash register in front of our house most of the time. We're actually started in New Orleans. We've had six different businesses, but we started off with a little corner store in the projects of New Orleans.

Darin: So you learned hard work at an early age.

5 Step Process Ad

Hoa: I did. My dad passed away when I was 13. It was just my mom, single mom, watching the three of us. I was the baby, the youngest girl. She never had the chance to go to school because she was a girl, but she was really good with people. I learned people skills from her and hard work. Work ethic was very strong, always working. She worked 80, 90-hour workweeks all the time in the business. Jaime and I met in optometry school and he was my lab partner. We've been together now for 16 years.

Darin: So you're both eye doctors.

Enjoy Your Journey of Hustle and Bustle

Hoa: We're both eye doctors. We graduated and came out with over $300,000 of student loan debt. You can only imagine coming out with that much student loan debt and trying to get a loan. It's challenging, but our dream was always to build our own practice, have our own practice, be our own bosses. We worked for someone else for about four and a half years. Again, we kept picking up extra relief work. We worked seven days a week, hustle-bustle, trying to have enough money to buy our own practice.

So we did that four and a half years ago. We purchased a premium location in Dallas, Fort Worth in an area called Uptown West Village. So we bought our first practice there. Then two years after that, we bought another practice in the Plano area where we currently live. We've had those practices going on for 11 years and nine years now, built a really strong team, and grew those practices. But we pivoted into real estate because we were still working so many hours in our own business and in our own practice.

When my daughter came along, she's seven now, we pivoted into real estate. Because we wanted to find diversified income and really, truly more time. That was our challenge with our practices. Even after we accumulated more financial freedom, we didn't have time freedom. So we pivoted into learning real estate, listened to a lot of podcasts, learned a lot of networking groups. That's how we found different mentorship programs and wound up entering Brad Sumrok's ecosystem, which we're so grateful for.

Wealth Builder Opportunities

Wealth Builder Opportunities
Photographer: Dylan McLeod | Source: Unsplash

Darin: You said something that I can relate to very much which is, I always wanted to be an entrepreneur. I’ve always wanted to own a business, to create my own schedule, and I did that. I created my own business back in 2007. It gave me the ability to go to all my kids' sporting events and create my own schedule and vacations. But, having gotten into real estate about four years ago, the wealth-building opportunities in real estate are just crazy. When I talk to people in their 20s and 30s I'm like, "I wish that I had started back then." Would you agree?

Hoa: Absolutely, if I had to do it all over again.

Darin: It's cool to think that you started. You're bright, and you busted your tail for four and a half years working for somebody else to save up the money to buy that first practice. After a while, you're like, "The money's good, but, I'm still busting my hump."

Now, one thing that I see that you and your husband do very well is that you guys have not only formed relationships within the people within the group, but you are getting out. You're going to conferences that are outside of the multifamily space, that are entrepreneurial. You're getting involved in other groups and conferences all across the country. Talk about why you do that.

Hoa: As we started going to different events, more entrepreneur, it was building both sides. The reason we started going outside of the multifamily space is we started realizing there are so many different avenues of people who would benefit from knowing about this model of syndication. I was so surprised.

Why You Need to Go Out and Speak Up

Hoa: I was asked to speak at a dentist conference, it was an all-women speakers. It was all different types of doctors. Although it was led by a dentist group, it was promoted for all different doctors. I spoke at that event and I didn't realize that nobody in the room knew what apartment investing syndication involved. It's not so readily available.

As I'm talking to my colleagues in different circles and we have a lot of differences, and it's not just doctors. But I started with that group and went into conferences. I would get asked to speak at other types of conferences that were just for entrepreneurs. It wasn't specifically for real estate purposes.

It’s just hearing my story of starting with nothing. Just through grit and hard work and perseverance and how we started building wealth. They just wanted to learn our background and strategies and things like that. When I started speaking to other different entrepreneur groups, many of them were interested in this avenue. But aside from the real estate aspect, it helps us continue to learn and grow.

We're not limited, and we don't pigeonhole ourselves in like, "Oh, we're doctors." Or "We're real estate syndicators only." So we're always open to learning from all walks of life. We don't just specifically stay in one circle of people. What I've learned as we're attending so many different types of conferences with different types of people that we get to meet. We learn a ton and it impacts us in a positive way in all different areas of our life.

How to Enjoy Your Journey to Multifamily Syndication

Darin: If you're in a multifamily mentorship group, you know what syndication means. If you don't, if you're not in that world, that word is intimidating like, "What is that?" How would you explain it in your own words?

Hoa: I simplify by saying a syndication is where a group of investors really just pull the money together in order to buy a larger property that is professionally third-party managed and you're leveraging. It's really leveraging a team to do the work so that the investors don't have to be the landlord. People always talk about tenants, termites, and toilets, and things. So a lot of people want to get into the real estate space.

Syndication is really leveling the playing field to get part ownership into an asset class that you would never imagine the average person to be able to get into. You would assume institutions and only the wealthy could ever be a part of owning something like that. When I explain what a syndication model is and how it works, people are like, "Wow! How come I never knew about this?"

Darin: Right, "Why is this a secret?" Some deals are accredited-only, investors-only, and some are sophisticated. But the government, they created that so that people don't get burned and take the last of their money. It's a shame that unless you're involved in a higher network, you don't even get introduced to these opportunities. That's a real shame because the returns are fantastic. The depreciation, tax advantage is fantastic, and the wealth-building opportunities of being in real estate is just massive. Like we both said, we wish that we had gotten involved earlier.

How to Visualize and Enjoy Your Journey as a Passive Investor

Darin: I love how you answered that question. You just made it very simple for people to understand. It's just a bunch of people coming together, buying an asset they couldn't buy on their own. It's a great way of putting it. Some people ask about the structure like, "Well, how does that happen?" Can you explain that? It may sound silly for people that do it all the time. For the people that don't, explain how it's just forming an LLC and people investing in that. Help them visualize how that works.

Hoa: From the passive investor side or from the team of general partnership?

Darin: Yes. The passive investors are like, "Okay, I get it. Well, what do I do? I just send my money?"

Hoa: I always set up calls. Whether they're accredited or not, I still like to have that conversation and meeting because it is such a relationship business. It's really important for any investor to understand the ins and outs of how the syndication model works prior to a deal going active. So it's really important, especially in a 506(b) where that has to be the case. But even in a 506(c) where an investor is accredited but they may not be well-versed in how the multifamily syndication works in every team in every project, a deal is structured differently.

For me, it's really important that, for our investors, we have that conversation. So that they know how our team and what our criteria is when we look for properties, what markets, what the typical structure for fees are, how the partnership and roles are split. I like to explain that to my investors prior so they at least have an understanding in returns, etc.

How Syndication Works

Hoa: Even as an accredited investor, that doesn't mean that they understand and that their expectations are met. I always want to make sure that an investor understands how a syndication really works. Know what to expect as far as cash flow, distributions, closing time period, and hold times.

Although they can hear all of those when we're going live on a deal, if they don't have a lot of that setup and understood on the front end, sometimes these deals get filled up and subscribed and funded real quickly. They miss that opportunity or they're asking a lot of questions because they're not well-versed yet, and so they missed that window. It's important that investors get that education part.

That's why having an ecosystem where we join Brad's group, we know that the investors in that group already are educated on how it works and what to expect. But the average person who's outside of this sphere, they're busy professionals. They have no desire to join any type of group, they don't have time or interest for that. It's important to set up that phone call to really get to connect and understand what their investing goals are and explain your strategies.

When we partner with other people, we explain how the deal usually is. What our criteria is for us to co-GP with someone else and what we specifically are looking for. That we are vetting the other partners that we are joining because that's important to our investors. Our investors ultimately trust us. When we partner with someone else, they're trusting us with that process of vetting the whole team.

What’s Different About This Business

Darin: That's critical and that's different than if you're buying stocks. If you're buying stocks, you're just going onto a platform and the technologies available where you click and then you're done. You don't get on a phone call and talk to somebody and build a relationship. That's different about this business. But some people have asked me, "Well, as a passive investor, do I have an ownership percentage? How does that work?" It's just that, from a listener's benefit standpoint, a newly created LLC will be created.

Then all the limited partners are buying a percent ownership in that LLC. That LLC is going to go buy the apartment community. That's how that works. Talk about mindset. You could have just done one deal and then been done, but you guys have kept moving and growing. A lot of that has to do with what you think you're capable of. Talk a little bit about mindset and how that plays into you.

Hoa: It ties directly with what you had mentioned earlier of why we go to so many different events, masterminds, different circles outside of just multifamily. The reason being is because that elevates and helps us grow our mindset, using momentum and leveraging that momentum. The circle of influence of those who are already achieving what we already want to achieve.

When we're in close proximity to people who are achieving that, our mindset continually keeps growing. You hear it all the time, it's 80% mindset and visualization and consistency and taking action. You'll hear that over and over again, and I cannot preach that enough.

What It Takes to Enjoy Your Journey

What It Takes to Enjoy Your Journey
Photographer: anja. | Source: Unsplash

Darin: Keep on saying it. I talk about taking action all the time and I know that there's listeners that are just still on the fence. The other thing about that, mindset, like you said, expands. When you first went to the multifamily mentorship group, it was all about getting your first deal done. Then you think that's the end goal, but then when you get there, you see other people that are at a different place. You're like, "How did they get there?" Then you expand your mindset. You expand what you think you're capable of, but you can't get there unless you take action on the first thing.

Hoa: Correct, and that's the thing with getting into this space. It’s staying focused and just making sure. For us, it didn't matter how long it was going to take us to get to that first deal. It wasn't an option to quit. Jaime and I, when we decided that we were going to go do this, we were all in. We dedicated our time into the space and we loved it. So we continued to network. We always showed up. When the opportunity came, then it came, but if it didn't happen, we were okay with that. We always continued to learn. When we were chasing deals at the beginning, we would constantly be best and final, and we would lose out, best and final.

Darin: Remember the first time you get into the best and final. You're like, "All right. I'm in the best and final." The first time you're in best and final, you don't even care so much that you're not going to win.

Best and Final

Darin: You're like, "Oh, man! I'm in the best and final. I'm close." Then after that, you're like, "Oh, best and final. I don't want to be in the best and final, I want to win."

Hoa: I share with passive investors the journey, especially in a competitive market, how challenging it is. How many deals get filtered through and the work that gets involved with truly winning one deal. For investors who are long-term investors, they know the process, they know a good deal, so they jump on it. That's why it gets filled fast, but I always explain from both sides. Being on both sides already, we still passively invest always. But understanding both sides of the fence on the general partnership side and the limited partner side, and what that process entails. Take action.

Darin: Were you a passive investor before you were a general partner?

Hoa: Yes, absolutely.

Darin: Do you think that brought value?

Hoa: Absolutely. I highly encourage that. So we did seven passive investment deals before we even attempted our first general partnership deal because we really wanted to understand. We learned a ton because we were very active passive investors. So we always looked at our financials and everything that was given to us monthly. As a passive investor you learn a ton.

Darin: What do you learn?

Hoa: From a passive investor, especially if someone's going out there, we learn style of communication from a sponsorship team. What I liked and what I didn't like, financial reporting, how it was, and just the frequency of things. I learned from being a passive investor when it was our turn, what I would've ideally liked.

If You Want to Enjoy Your Journey, Go Active

Hoa: If you're wanting to go active, being a passive investor allows us to see the style of communication. The type of reporting, the frequency of reporting, the availability to answer questions and getting back, those are the things we pay attention to. Those are things as a passive now being on the turntable on the other side, I'm very in tune with that.

Darin: You mentioned in terms of learning, the style of communication. You’re in a number of different deals, you take what you like and you discard the things that you don't like. You create your own style, get a sense for all the numbers, get a sense for the terminology, both in the summaries that the sponsors are sending. Also, in reviewing the financials, you see all the different income numbers and all the different expense numbers. You start to see some trends, too, and see if the property is improving by looking at the numbers.

Then you also get a sense of feeling like you're in good hands or a feeling of, "I don't know if I'm going to invest with this person again." It's just a feeling that you get, and people are people. Some people might want to invest with you, and some people might want to invest with me. Somebody might want to invest with somebody else because they connect in some way with that person.

All those things are really important learning lessons. The passive is investing their hard-earned money. Knowing what it feels like to hand that over to somebody and entrust somebody else with that is an important step in learning how to become a general partner or a co-sponsor.

Achieve a Level of Confidence

Hoa: You learn markets, too, different submarkets, and management teams, and just a lot of different things that you hear. Especially if a deal has gone full cycle, you can really understand  pro forma projections before when we first invested. Then when they sold the property, how did it do compared to what they said it was going to do? When you feel that level of confidence, "Okay. This is now real. We're getting the cash, and it's sold," or "It's doing better than expected."

When you go active, there's a whole another level of confidence when you are already in that position to now go raise equity or explain to an investor how the process works. I've already gone through and seen that because a lot of investors who are new to the space are very skeptical because it sounds too good to be true.

Darin: I actually joined after going to a meetup. I hadn't even met Brad, hadn't even gone to a conference, and I joined. The first thing I did was set up a bunch of Starbucks meetings with different sponsors. That's what I wanted to know, "Is this real?" I met with all these people and I'm, "All right. Tell me what's going on. Is this real?" They're like, "Wow! I'm making all this."

They are telling me details. I'm like, "Oh, my gosh!" It was one after the other. It’s like, "It changed my life." I was like, "I wish I had done this earlier," but I'm glad I've done it now. There's still other people that don't know. What you're trying to do is get out there, and I'm trying to do with the podcast. Get out there and let more people know that this opportunity exists.

How to Gain the Opportunity to Enjoy Your Journey

Darin: It's not for everybody, but some people don't even know they have that opportunity. Talk about when you started to become a general partner and you started to go out to your network. What happened when you first did this? You and Jaime are talking and you're like, "This is our first deal that we're actually going out and raising capital from other people. Who should we send it to?"

Hoa: We were always building our database. We’re building those investor relations even before we had our very first deal. We were telling them our journey, what we were doing, telling all our colleagues, anybody who's in our circle of people. Then of course, being part of Brad's ecosystem and getting to know a lot of people in there. We always were just building that relationship, going to meetups until the opportunity, that first deal would hit.

The question is always, "How much do you think you can raise?" That's a really difficult question. You're like, "This is my first deal. I have a lot of people I've spoken to and a lot of investors, but I don't know how many." It's true, I don't know exactly how many will join us. But a lot of people have been reaching out and like, "Hoa, you need to get a deal. We're ready."

We knew we had a lot of people who were ready, we just needed to get an opportunity for them to invest in. So we felt pretty comfortable because we were waiting to get into that first deal. We knew a lot of people we stayed in touch with were constantly like, "We're ready. Come on. Let's get a deal."

Why You Need to Keep People in the Loop

Why You Need to Keep People in the Loop
Photographer: NIKHIL | Source: Unsplash

Hoa: We finally had the opportunity to get a deal, and we said, "We think we can raise about $2 to $3 million." That's what we thought, and Lord and behold, we did. I was like, "Yay!" But you never know. It's one of those, but you're just constantly building that relationship and staying in touch with the investors. Whether I had a deal or not, it didn't matter. I was always keeping them in the loop of what we were doing, what we were seeking, our process.

Darin: How are you keeping people in the loop?

Hoa: I have a list of people that I text or Facebook message or always just rotate to keep a pulse on people. Whether they're invested with me yet or not yet, they might have shown interest and not actually invested yet. But I still keep in touch with people, whether they are investors or not. It's somebody that I have educated, somebody that we've talked to, someone that we've met up with. I just really rotate through my list of people. I'll do at least 10 or 20 people every day that I'll see whether it's an email, a text, a Facebook message. Just something quick to have a touchpoint with them.

Darin: What you did fantastic was there's some people that don't spend the time building that database as they're learning. They just get to that point. All of a sudden, it's like a fire drill like, "Oh, no! Who am I going to get to partner with us?" The other thing is just telling people what you do, that is so important.

People Want to See How You Should Enjoy Your Journey

Darin: Even if there are listeners here that are not in real estate and want to try something else, let people know what you do and what you’re trying to accomplish. You don't have to have done it. People want to see you on that journey. They want to know what you're doing. There are some people that are going to sit on the sidelines. They're not going to jump in until you've proven yourself, but others are more than willing.

They are not going to do it themselves. They're just happy to partner with somebody they know and trust, and they're ready to go. You got to investors that are like, "Come on. We're ready. Let's go. Get one already."

Hoa: Yes, and it's okay. Some of my colleagues and friends waited, some of them jumped right in. "Whatever you're doing, Hoa, we want part of that." You're going to always have some people who are, "I'm going to wait and see if this is the real thing." Now, they jump on board. I don't take it personally because I understand. In hindsight, they always tell me, "Hoa, I wish I would've started at the beginning with you." That always comes back like, "I wish I would've done this earlier."

Darin: How do you not take it personally? That's a big fear for a lot of people. They do feel like it's a personal rejection, but it's really not.

Hoa: For me, a no is a not yet. I spend the same amount of time with them, whether they invested with me or not. Even if I presented how many deals and they're still not in, that's okay. A no is still a not yet.

A Life-Changing Opportunity to Enjoy Your Journey

Darin: You also used the term opportunity. It's not about needing them, you're presenting an opportunity. Some of those people that said no and, "Oh, I wish I had started way back when," some people just have to wait. There are some people that will never jump off the ship. All you can do is keep presenting that opportunity and stay in front of them.

I have seen you guys transition. I've seen a lot of syndicators transition from that B, C up to A properties. Talk about that transition and why you like A properties over B, C. Do you still look at all three?

Hoa: Currently, we predominantly look at A and B. We don't really look at C class properties anymore. The markets that we're in, DFW and Houston predominantly, the cap rates have gone down. They're so compressed. Just considering that the labor cost, supply cost, and everything has gone up so much. When we're buying properties like our first A-class deal, we did an uptown deal that is literally three blocks from my practice.

I've had this practice going on for 11 years. This is the submarket my patients live in. I know this submarket in the back of my hands. They're high paid, younger professionals. When we looked at that property, it was an A-class deal, 2016. We knew that it was so under market rent. The owner is a Canadian, the seller. They really didn't have a pulse on keeping up with the market. It wasn't a syndication type model for them. When they sold it, it was just because one of the partners wanted out. It was three of them and one of them wanted out.

A High Demand Area

Hoa: When we had that opportunity and we knew the rents were so low compared to all the rent comps and I was like, "You cannot build a replacement cost for that property. You just can't," and it's a high demand area, low supply. We knew going in, we wanted properties like that. To have an opportunity to go in, it's a very light value add.

We're doing a smart technology package and exterior painting. We redid some of the pool, up the fitness area. We're doing our own touches to upgrade that area, we’re doing a business area for stay-at-home. We want to tailor to that resident base, but we know that the demographic there and their income level can support the rent raises.

It's really lower risk for us because we're not going in and spending a ton of money for upgrades, where we're then pushing rents. We organically are going in and getting $300 or $400 rent bumps when we underwrote for 100-150. It's crazy, but we knew this market could do that. That's why we're looking for opportunities.

We're going in where there's a seller who has a nice A or B class property in a premium location. Where there's a higher than normal income level that can support what we're doing. We don't have to worry so much about whether we're going to spend more on appliances or it's going to be a long wait time. For the C model, you really have to bank on getting those upgrades done to really be able to achieve the 100-150 rent bumps that you are looking for.

The Right Premium Market

Hoa: In these A-class and higher B-class, if you're in the right premium market and you buy it on a low-cost basis or a decent cost basis but you can get organic rent bumps, that is a value add opportunity. It’s just not the traditional value add that we think of when we're looking at a C-class.

Darin: I went and invested in an A-class in the Houston market as a passive. I went down and checked out some of the properties nearby, walked away, and I was like, "The sponsor on this deal is going to be able to raise rents.'' The rents that they're charging for new leases are $200 to $300 higher than 12 months ago. They don't even have to renovate. It's just the market has gone up.

We don't know for sure if inflation is going to take hold. It looks like it is, but if wage inflation really picks up, then people are going to have more money. People are going to spend more money on rent. If you can keep your cost basis down in terms of your debt service and your other expenses, but then your rents are continuing to go up, then profitability will just go higher. Then these A properties, there's less maintenance. It's newer and there's less.

You mentioned one thing. You're buying it substantially below replacement cost, and that to me is an important indicator. Talk to the listeners. Maybe they don't think of what a replacement cost is. Why is that important to you when you're looking at different opportunities?

How to Enjoy Your Journey as a Woman in the Real Estate Business

How to Enjoy Your Journey as a Woman in the Real Estate Business
Photographer: Amy Hirschi | Source: Unsplash

Hoa: When we were looking at the replacement cost in the area that we're in and uptown, you're talking about 330 a door. If you have an opportunity to go in and buy 250 something a door without having to do much, that's a great opportunity.

Darin: What she's talking about here is, if somebody was to build a new property right next door, they'd have to build at 330 a door. In order to have it be profitable, they're going to have to have rents that are substantially higher than them buying it for 250 a door. It gives them that cushion and it helps the risk factor on the deal tremendously. It's very important to look at replacement costs and whether somebody can build right near you for the same price or lower.

Talk about being a woman in the business. There's more women that are getting into the business, but still heavily tilted towards the man side. Do you see that as a pro, a con, or neutral?

Hoa: I see it as a pro because I always like to be the underdog in any industry. Even though Jaime and I do this as a team, there are a lot of times that I'll show up to meetings and conferences or tours where I'm going alone or he's going alone. When we first started off in the business, you can always tell if someone thinks you're for real or not. I remember at the very beginning the vibe and the energy I would get is, "Oh, she's not for real. Who is this girl trying to come in?"

It’s Not Personal

Hoa: I could feel that energy sometimes, but I would never take it personal. It would give me more motivation and ignite me a little bit more just to be like, "One day, that same broker, I will buy a property from that broker."

Darin: People don't look at you that way anymore, do they?

Hoa: No. Honestly, I don't take it personally, whether it's a broker, whether it's a contractor, or whether it's a service provider. It doesn't matter. A lot more women are getting into the space. In our ecosystem, especially, there's a lot of women that are getting into the space. It's not as uncommon.

When I go to other conferences that are more multifamily, there's less women. It is an advantage because you do stand out being in the space, being a woman. I take it as if it's more male dominated, I love it.

Darin: I had one woman I asked that question. She said, "If I go to a conference, who do the guys want to talk to, another guy or to me?" There you go. But you have to combine the fact that, "They want to talk to me, but they also believe I can do the business." You've gotten there so that's fantastic. In terms of the difficulties in the business, what challenges do you run into? What learning lessons have you come across after you've gotten into the GP side?

Hoa: Lots of learning lessons. When we started off, we tried different avenues. When we were first getting in the space, it’s trying to figure out how to position myself best. At the beginning, we wanted to do it all ourselves. We were heavily and constantly underwriting and touring.

You Can Add Value While You Enjoy Your Journey

Hoa: We’re looking at smaller properties at the beginning because we figured, "Okay. We'll start small and then go bigger afterwards until we get some under our belt." That was a little bit in hindsight. If I had to do that over again, I would've directly gone into the ecosystem. I’ll just latch onto an experienced partnership team and add value that way.

We eventually wound up doing that because we just got into the best and final where we were doing all the upfront work. What I realized is, when you're new and the brokers don't know you, and then you come in and then we bring in an experienced sponsor after the fact when we get closer to best and final, I would rather have done it the other way. It would've been a lot easier if we just put it out there and communicated more effectively in the ecosystem. This is what we add value, this is what we're strong, and this is what we would like to do, but leverage them first and get our feet wet.

In the beginning, because of us wanting to do it all by ourself and starting small, that wasn't the best idea. I remember the first deal, we actually put money down. It’s a small project, and we've had two small projects that we put hard money down. It didn't go the way we wanted it, it was out of our control. It’s lending things because it was different parcels and it was a 24-unit deal. We were going to do a joint venture on it, we weren't going to syndicate it. But it was a small deal that we were doing.

Losing Hard Earned Money

Hoa: In hindsight, I wish we wouldn't have done that. We wound up not going through with it on both deals.

Darin: Did you lose your hard-earned money?

Hoa: We did. We lost half of it on both deals. That was our beginning journey of trying to get our feet in the door, and then with COVID and everything. But in hindsight, those two deals that didn't go accordingly were a blessing in disguise. Had we pursued those deals, it would've been a much bigger headache. It would've been a smaller deal that was putting in a lot more stress and our time. In hindsight, it was a learning experience and we definitely learned. We lost a little bit of money doing it, but we learned a ton and we use that momentum now.

Darin: It's great advice for new people, too. You hear that a lot. It plays into your mindset, too. You didn't mention it, but I have to imagine that part of it was, "Let's just do it ourselves." But part of it is, "It's safer to do this 20-unit. Let's start small and do that versus trying to get involved in a 100 or 200-unit community."

Hoa: I will tell you the amount of work it took for us to do that 24 or 56-unit deal. The two small ones were more than the 243-unit deal.

Darin: It's crazy. It really is, but there's a lot of people out there that think they have to start with a duplex or a fourplex or eight plex. They don't really understand it, but it's partnering with other people. You also used the word value like, "There has to be something in it for the experienced guy."

The Experienced Guy Asks You to Enjoy Your Journey

The Experienced Guy Asks You to Enjoy Your Journey
Photographer: Volkan Olmez | Source: Unsplash

Darin: The experienced guy is not going to do all the work and then just bring you on because you're nice. That would be great if that happened, but that doesn't happen. So you have to communicate the pieces that you like and that you could take off their shoulders. You're providing value to them and they're providing value to you, and that's a good partnership.

Hoa: Communication and making it very clear and concise of your strengths and the roles that you can add value to is critical.

Darin: What's your stretch goal? Where are you guys going from here?

Hoa: Our stretch goal, just like we did for 2021, was our best year yet, so we're leveraging that. We did something completely new in 2021 by getting out there, speaking on different stages and different circles. In 2022, we're going to be co-hosts for a new TV show.

Darin: Talk about the speaking engagements. That's another thing. I imagine the first time you did it, you were a little nervous.

Hoa: My worst fear is public speaking. You talk about stretching and getting on people's stages. Doing a podcast is a stretch, much less going on a live stage in front of hundreds of people. That's been an avenue of stretching, and I didn't think I would enjoy it as much as I have. So we plan to stretch that.

Darin: Why do you think you enjoy it?

Hoa: The feedback that we've gotten is inspiration and just knowledge and education that people were not aware of. We've gotten so much positive feedback from there that now it's like, "It's just all in my head. It's fear."

Say Yes to Opportunities

Hoa: Every single time I step on a stage, I'm still nervous. I still get butterflies, but it's for a reason. That's been a big stretch for us to get out there, to be on stage, to open up because opportunities will open. When those opportunities open, it's being ready to take, say yes to those opportunities.

Darin: A few things there. One is getting on stage. I've read that singers and actors, they're scared of getting on, too. But like you, the positive feedback that comes back is what drives them to keep coming back and do it again. It's twofold. Opportunities arise by doing it, and you have to be ready to jump on those. You're giving back to people. You are inspiring other people. You're pouring your story and your journey into other people. People need that, and we need that. We needed that in the beginning.

Other people pour into us, and you're pouring into other people. Then somebody that's listening to you that takes action is going to do it for somebody else one, two, three years from now. Talk about this TV thing. I haven't heard that.

Hoa: It’s still us in the works. This is something brand new that we're going to be co-hosts on a financial freedom show. Jaime and I are going to do that together as a couple.

Darin: How often will that show be on and what's it going to be on?

Hoa: It hasn't aired yet. We're probably going to start in mid-February, and it's going to be an hour every Monday. It's going to be on different topics. We're going to have different speakers on, but it's not anything specifically related to one avenue.

How to Enjoy Your Journey to Financial Freedom

Hoa: It's just sharing life stories and sharing different strategies. Although the show is called Financial Freedom, it's about enlightening, encouraging, empowering, and living the lifestyle, the bigger why, and the impact. That's really why the show and financial freedom means different things to different people. It's not just money freedom and time freedom, but living the life you want to live. That's what the show is about.

Darin: How has this whole process helped you guys live the life you want to live?

Hoa: Jaime and I are so blessed. I can't imagine being in a better place. We're so grateful to have the time freedom and true financial freedom that we have now, to travel all over the world, and be with our little girl. Without this vehicle called real estate, this wouldn't have been possible for us. It has totally changed our life.

Darin: Oh, you have one daughter, seven years old.  Think about as she grows up the lessons that you guys are going to teach her. All the other lives that you're touching every conference you go to. So thank you for that. I love your story and your demeanor. You have a very soft-spoken, trusting voice and approach.

It's very apparent why you've been as successful as you've been. I wish the two of you much success going forward. What do you guys like to do outside of work besides travel? Food?

Hoa: We're big foodies.

Darin: You know what I like? I like being invited to go eat food and travel. So ping me and we will be there, for sure.

Hoa: Yes. We will make that happen.

The Significance of #23

Darin: If somebody wants to reach out to you and get to know you better, what's the best way to do that?

Hoa: They can go to our website, passivewealth23.com.

Darin: What's the significance of 23?

Hoa: It's my lucky number.

Darin: Let's hear your story about how number 23 is lucky.

Hoa: It's my birthday.

Darin: What month?

Hoa: November.

Darin: It passed so I can't say happy birthday. Thank you for coming on the show and for sharing with others. Looking forward to seeing you at another event. Listeners, definitely check these two out. They're just salt of the earth people and good people looking to help others. So reach out, check out their website, passivewealth23.com. Until next week, signing off.

How to Reach Hoa Nguyen

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Darin Batchelder

Wealth creation through real estate provided me with a new passion to get the word out and let others know that they have an alternative to investing in the stock market.

If I can inspire and educate just one person to take action that results in life changing wealth creation then the work to launch and grow this podcast is well worth the effort.

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