Do you want to learn how to build generational wealth? Clive Davis is a prime example of someone who took his knowledge from the corporate world and applied it to real estate. He wanted to set an example for his kids and thought to himself "if not now, when?" He’s now on a mission to teach the minority community how they can do the same. If you’re interested in learning more about multifamily real estate investing, this is the episode for you. Listen and learn!
Table of Contents:
- Where To Listen To The Podcast
- The Passion in Teaching How to Build Generational Wealth
- Teach Your Kids How to Build Generational Wealth
- The Fear of Failure
- The Privilege of Gaining Knowledge on How to Build Generational Wealth
- Broker Opinion of Values
- How to Build Generational Wealth Through Networking
- How to Reach Clive Davis
The Passion in Teaching How to Build Generational Wealth
Darin: A little background on Clive Davis before we start the show. Clive lives in the Atlanta area. He was a corporate attorney for 20 years with Wall Street and the pharmaceutical industry. Then, he took a chance and left his corporate career and started to focus on multifamily investing. Now he's on a mission to help others do the same. He has a saying “each one, teach one” and he lives that out with his desire and passion to teach others how to build generational wealth.
Just a little on how I know Clive. We're both parts of the same multifamily mentorship group based here in Dallas, the Brad Sumrok group. We’ve talked several times, but I don't know Clive that well. So, I'm looking forward to this conversation to get a better understanding of him. He's also in a different market, and I'm in the Dallas market. I'm in Texas. A lot of the people I hang with are in Texas, and Clive is in Atlanta. I'm interested in understanding that market as well. With that, the first question I typically ask is how many properties and how many units you're invested in?
Clive: I used to have a better handle on that number, but I think I've had three or four deals that have gone full cycle in the last few months. So I had gotten up to just over 2000 units that I had invested in, primarily passively. Within the last six months, I have closed two deals, which have added 444 units as a GP. So, the passive count is probably down south of 1,000 with those full cycle sales that I mentioned.
There’s No Overnight Success in Multifamily
Darin: When did you join the group? Give us a little background on what you were doing before multifamily investing when you started to look and how long it took you to get in the game.
Clive: I love this question because I get to share with folks that I am not an overnight success in the large-scale multifamily world. I started out as a corporate transactional lawyer on Wall Street, servicing that community, and rotated through M and A, general banking. Ultimately I settled as a capital markets attorney. I was doing debt and equity offerings and did that for several years before I transitioned to becoming an in-house counsel, transitioning into the pharmaceutical industry.
So, I got my start with Pfizer as a lawyer for them, and they relocated me from New York to Atlanta going on 17 years ago. Then a couple of years into that, I became a chief compliance officer for a Belgian pharmaceutical company. So all in all, a 20-year corporate run.
It was the end of 2016 when I said, "Okay, 20 years is a good run. If not now, when?" The if being, when are you going to scratch that entrepreneurial itch that you've had for some time? For me, the opportunity was to combine a passion and an interest in real estate, which I had had throughout that 20-year period. How do I combine that with an entrepreneurial pursuit? In 2017, I started my journey in Earnest. But in the early days, it was primarily me having moved my legacy 401k funds from prior employers into a self-directed IRA. I started heavily investing in commercial real estate, with a primary focus on existing multifamily.
Self-Directed Real Estate MBA
Clive: But I also invested in ground-up development. I also invested in some hotels around town here in Atlanta, but the bulk of my investments were in multifamily existing communities. All of that was my preparation. I jokingly refer to it as a self-directed real estate MBA. I knew I wasn't going back to school at least for any kind of formal academic education. When I left corporate life, I set out on this journey. I don't think in 2016 or prior, I had even listened to any kind of podcast, let alone a multifamily-specific focused podcast.
The reality totally changed in late 2016 and '17, when I was listening to podcasts like yours, two to three times a day. I was listening to a podcast in addition to attending conferences. Thinking back and reflecting on my corporate life, the only conferences I attended were ones that the company was paying for, where they were flying me somewhere. They were putting me up in a hotel and it was related to my job in some way, all on the company's dime.
All of that flipped when I set out on this path and said, "You know what?" I'm going to take this leap of faith and pursue large-scale multifamily. And so, that's the journey that I've been on. You mentioned the mentoring group that we're a part of, I joined that group at the end of 2018. I submitted my first LOI on a 92-unit property here in Atlanta and ended up being a runner-up. This was April of 2019, and I said, "Okay, not bad for my first one. I'll get the next one, next month."
Learning How to Build Generational Wealth Through Perseverance and Persistence
Clive: Lo and behold, fast forward a little over two years later to the summer of '21, which was when I landed my first deal. In between that, obviously, I'm submitting offers, we've got COVID disrupting things. There's a five, six months window where there's really no inventory movement. But nonetheless, it took me the better part of two years between submitting my first LOI and getting that first deal awarded.
It's for those reasons that I say I'm not an overnight success. It required perseverance, resilience, all of those things, to stay in the game and not get distracted, and resist the temptations to do other things. Among which is a return to the comfort zone of just go get you a six-figure job, that's easily done. That's the primary temptation, especially the longer that period stretches out.
Darin: You said so many good things there. I want to follow up on a few of them. You talked about the 20-year corporate run and it sounds like you had an amazing experience. I'm sure you made your family and friends very happy. They admired you for the companies that you worked for and the level on the corporate ladder that you achieved. But you said something that was interesting. "If not now, when?" You said that you had this entrepreneurial itch and I believe that there's a ton of people out there that feel that way. In their gut, they know they want to take a chance.
Learning to Take the Leap
Darin: We're both in multifamily real estate investing. It could be in multifamily real estate investing, commercial real estate investing, or starting your own company. As you go up, you make more money and then you end up typically buying more stuff. So, it makes it hard to make that leap. How did you do that?
Clive: I will not mislead anyone into thinking that it's an easy transition to make. I talked about my comfort zone. When you are in various roles, and the last role that I was in as a chief compliance officer for almost nine years, you get very comfortable. You are not necessarily being challenged daily. You're not necessarily growing in the way that you were when you were in your late 20s and early 30s. When you're in your mid-40s, approaching 50, the types of leaps in growth are just not there the way they were earlier in your career. That's just natural, but you're in a comfort zone and the danger is that you become complacent.
For me, yes, I was highly compensated. I had achieved a good level of success. However, my oldest at the time was getting ready to head off to college. It was six months from that point, and I was just looking at the kind of example am I setting for my kids. It’s something that I was thinking about because I wanted them to know. I have four children, the oldest of which is 22. She's now a college graduate living in New York City. She'll be moving to Columbia in August as part of a Fulbright.
Teach Your Kids How to Build Generational Wealth
Clive: She's doing great, I'm proud of my kids. But I wanted to show them, give them an example of you don't have to go do something for 10, 15, 20 years that isn't necessarily your passion. When I got out of law school, I had six figures in debt. I had a mortgage on my shoulders related to those three years of legal education. That's fine because that positioned me to go on and get opportunities that I likely would not have gotten, but for that.
But it also set me on a course where I wasn't necessarily pursuing things based on whether or not that's where my passions lay, or it was going to help me make a substantial dent into my debt, support the family and extended family because I have retired parents. I'm the youngest of five, but I'm the first college graduate in my family.
I've done a lot of firsts and I also play a role, not just with my immediate family, but my family that included my mother and father at the time, now just my father. All of that, the success and the associated income, played a role and I have no regrets about it.
What I do know is that the path that I went on was not one where I was led by my passions. It was, primarily, what is this going to do for me financially? And then secondarily, do I enjoy what I'm doing? Do I enjoy the teams that I'm building?
Pursue Your Passion
Clive: I'm blessed to have been in a position where I got to build teams over the years, especially in the last role that I was in. That was enjoyable but again, had I chosen based upon passion coming out of law school, I likely would not have been in the corporate arena that I found myself in.
And so, for my children, what I've tried to impart to them is that one, I'm doing everything I can so that you're going to graduate from school with zero in debt. You will not have the excuse that I had, which is, "I can't pursue my passions because I got all this debt I got to take care of." The oldest has now graduated debt-free. So the first of four, mission accomplished. She's following her passions and she's doing pro bono things and not for profit. And like I said, she'll be heading off for a Fulbright in August. She's set in an example for the children behind her. The plan is coming into effect.
Darin: Your children were a big impetus for you to actually make the move because you said you wanted to be an example for your kids. And if you had just stayed in the corporate world, then your actions are showing them that, "Hey, this is the safe place to be."
Clive: You can't tell your kids to play outside of your comfort zone if you yourself are in your comfort zone, scared to make a move.
Learning How to Build Generational Wealth Is a Leap of Faith
Darin: Right, but it's hard. Think about what you said. You got four kids that you say, "I'm going to pay for your college education." Well, taking a risk and going outside the corporate world, how are you confident to do that and say that to your kids?
Clive: Here's the way that I approached it. A lot of people say entrepreneurism is risky and scary and it's something with no guarantees. All of that may be true, but one thing that I knew is that I approach it differently. My safety net was, that if this leap of faith, if this entrepreneurial pursuit doesn't work out, I've got enough experience and background. I got a law degree from an Ivy League law school. I've got 20 years in corporate America. Worst case scenario, I can go find myself a six-figure job and we're going to eat. We're going to be comfortable.
It may not be something that I'm passionate about or that I get excited about going to work on a daily basis, but that's my safety net. Whereas some people say, "I'm in this corporate life, I'm in this corporate role. It's too risky for me to venture out." I'm saying to myself, "You do realize that you could go in tomorrow morning, and they could say, your years of service have been really appreciated, but we are eliminating the department. " Or "We're eliminating your role," or whatever reason.
Darin: Here's a little box to put all your stuff in.
Clive: We'll help you pack and then help you out.
Darin: We'll walk you downstairs to the elevator.
The Unfulfilled Itch
Clive: So, you have a false sense that you have control over your destiny when you really don't. What you might think is safe, is safe until someone says it's not. And so I just didn't want to live my entire life in that position where I had this itch. I had this what if, or what might that be like? Or what would that look like or feel like? I didn't want to live my whole life where I never opened that door and said, "Let me go find and explore and see for myself what it's like." My safety net was, that if I turn out to be a terrible multifamily owner, operator, or investor, I can go back.
Darin: You can go back. Whether it's with that company or another company.
Clive: I jokingly told people that when I left corporate life, there's this concept of burning your boats and you may be familiar with it. Basically, the idea is you take a boat, and you get to the island, you anchor it, and if you need to go back, you can just get back in the boat. Or you can say, "You know what? I'm not giving myself an opportunity to turn back and take the road back. Therefore, I'm going to burn my boat, which means I have no choice, but to be successful on this island, achieving whatever it is that I'm trying to achieve." I jokingly tell people that I hadn't burned my boat, soaked it in gasoline.
Darin: You didn't light the match.
Burning the Boat Is a Process of Learning How to Build Generational Wealth
Clive: I hadn't lit the match and hadn't thrown it and set it on fire. What I did on December 31st, 2021, my family and I, got together. We had an official boat burning ceremony. My kids made boats out of paper and papier-mache, and everyone made a boat. I lit my boat on fire and literally, it went up in flames. This is right on the eve of New Year and they did the same.
Theirs were symbolic of things that they were just going to leave behind in the past. Mine was like, I'm leaving corporate life behind and I'm burning the boat, no bridge back, no return. They did it for one reason or another, that was meaningful to them and so, it was big for us.
Darin: For the listeners' benefit, I went down this path because I think there are a lot of people listening that want to either get into real estate investing, or they want to start their own business. They want to do something different, but they're scared to do it. I'm here, and Clive's here to tell you, that it's not all security where you're at. You only have one life to live and take some chances.
What Clive said, I've heard a lot of people say. What's the worst thing that could happen? In Clive's instance, the worst thing that could happen was, "I go back, and I find another job." I remember when I started my first company, it was 2007. People say, "What was the hardest part, starting your own company?"
The Fear of Failure
Darin: I said, "It was signing the lease to the office space that I got." People were like, "What? I don't get it. Was it expensive, was it a long-term lease?" I was like, "No, once I signed that lease, I have to tell my friends, my family, my ex-colleagues I'm in business. There's the fear of failure."
Then once I was working in the office, instead of getting a 25% commission on deals, all the profit is going to my business. It's not like I'm doing things that are that much different. But I get it, it's scary. Talk about your first passive deal. Were you scared doing your first passive deal?
Clive: No, I really wasn't. For most of those 20 years, my very first real estate investment was back in 1999, so early in my corporate career.
Darin: You were still in corporate when you did it.
Clive: Yes, I was living in New York City. I bought a duplex property in Cape Coral, Florida, and I self-managed it from New York. The reason I ended up doing that was that my parents had retired there three years earlier. I said to myself, "I might as well do something where they are." What I ended up doing was setting up a checking account, and putting both my parents' names on it. I had the rents going into that account. And I basically said, "When you need something, you don't need to come to me. You have a checking account. Just take the money, pay for what you need to pay for." That was my way of subsidizing them in retirement.
Not Knowing How to Build Generational Wealth Is Not My Reality
Clive: In my family, I always had an expectation that's what the children do. Neither of my parents are high school graduates, they both have grade school education. They worked 16 hours a day. I thought everyone worked 16 hours a day when I was growing up. It wasn't until I started getting older and realized, "Some people do eight-hour shifts, and some people are stay-at-home moms." This wasn't my reality. I had two parents who were immigrants and working 16 hours was the norm for my father.
Working outside of the house was the norm for my mom. She'd been working since she was 14, or 15 years old. That was my reality. They didn't have lucrative corporate retirement plans or what have you. I knew that, in addition to my immediate family, I always thought of them as part of my responsibility. Again, being highly compensated and achieving some of the things I was able to do benefited my immediate family, as well as my parents.
Darin: I know that you're big on generational wealth. Talk about how you view that and how you think about being a leader in that space, not just for your family, but for other people in the community.
Clive: I mentioned a couple of times now, high compensation. When you're raising capital like we are Darin, we encounter and have interactions with a lot of highly compensated individuals. What I tell people is that I don't care how highly compensated you are, you cannot pass on your high compensation to your heirs. It doesn't work that way.
How to Build Generational Wealth in the Context of Multifamily
Clive: If you are interested in creating generational or legacy wealth, I jokingly say that my not-yet conceived grandchildren will be impacted by. You can't be a hundred percent focused on earning a high income, because every year that high income's going to go up a little bit more. But as soon as that job is no more, it's gone. That's not something that you can pass on to your children.
You've got to be thinking about what can I be doing now? If you're in corporate life, how can you translate that high income into things that are going to contribute to the creation of generational wealth? That can be passed on to your not yet conceived grandchildren and impact them in a way that maybe you weren't impacted.
I've found myself talking more and more in the context of multifamily, which is the experience that I have now. I have found myself talking more and more, especially to high-income earners about what they are doing to ensure that they are creating generational wealth? Far too often, I'm not hearing answers that point in the direction of definitive steps that people are taking. And far too many of us are complacent because we are high-income earners. We think that's going to be sufficient to sustain us.
Darin: It's also the way we're taught.
Clive: It's got to be more than just sustaining yourself in retirement. When you're dreaming, is your dream to just sustain yourself, clothe yourself, to feed yourself, and shelter yourself? Hopefully, you're dreaming bigger than that. You're thinking about traveling the world with your significant other.
The Things You Can Do When You Know How to Build Generational Wealth
Clive: Maybe, you’re sending your parents around the world, if they're in a position to do that, and things that you want for your children and not yet conceived grandchildren. All of that is about more than sustaining yourself. It's about creating generational wealth. I saw a statistic the other day that said that commercial real estate is represented by less than 2% of African Americans who make up the commercial real estate world.
Any way you look at it, it's crazy. The residential side is something between 5% and 6%. Even that is relatively small, or disproportionately small. But when you think about less than 2% of commercial real estate, so much wealth is being created in this space. If we're not fully showing up and represented in that space, that's just one more obstacle that we're not overcoming.
I'm increasingly talking to all communities, but especially the community that I'm familiar with, which is the African American community. I am talking about the role that investing in commercial real estate, specifically multifamily because that's what I know. It’s the role that can play in creating generational wealth. That's whether you're doing it actively or passively, it can be both in many instances.
Darin: It's awesome that you're talking about that because when you first get involved, I think that you probably fell into this as well. I know it happened to me about four years ago. My first, it was all about creating wealth for my family and myself. But then you realize that you got access to something that a lot of people don't have.
The Ripple Effect of Mastering How to Build Generational Wealth
Darin: For a lot of people, it turns out to be this ripple effect where other people that are in your network, all of a sudden are like, "How'd you do it?" Then you turn around and you help that next person. Maybe they invest in a deal with you and there's a win-win, but maybe you just help somebody. That's part of life, the joy of helping somebody else. You don't realize it at first. So, listeners, you may not believe it, but you may make your first investment in 2022 and in 2025, you're teaching your friends and family how to do it.
Clive: Absolutely and I tell people, you don't get to wait until you are the finished product to start sharing information and experience. I probably did about half a dozen podcast interviews before I ever landed my first deal. So, I wasn't portraying myself as an expert multifamily investor. I was merely sharing my journey, talking about my transition from this 20-year corporate life into multifamily investing, with aspirations to become a full-time sponsor of these opportunities.
But that resonated with different people, based on where they were in their lives. There's not a week that goes by where someone isn't reaching out to me saying, "I'm a little further back in my journey, but what I heard or saw in your post, or what I saw of you in a podcast interview, it really resonated with me." I have those conversations all the time.
The Privilege of Gaining Knowledge on How to Build Generational Wealth
Clive: I'm a big proponent of each one, teach one. If you know it, if you've had the privilege of gaining information or knowledge or experience, you have an obligation to share that with someone else. If you have an abundance mindset as we do, you know that you sharing information with others is not in any way going to detract from what you are trying to accomplish. The pie is big enough for all of us to partake in it.
I love talking to people and sharing about my journey. If I know something that they don't, it's almost criminal if I keep that information to myself and do not share it with them. We all have a responsibility and for those of us that are fortunate enough to be successful, the responsibility is even greater.
Darin: One thing I would add to that is, I don't know why, but this commercial real estate, multifamily real estate industry, is very collaborative. Maybe because the numbers are big and there are a lot of team members involved. I don't know how it was for you in the corporate world, but I was in a lot of different industries.
Typically, the ones that were super successful, were keeping it to themselves. They're like, "I don't want the next guy to come up and beat me out. So I'm going to hold my cards close to my vest and I'm not going to tell them." But in real estate, especially multifamily commercial, I've talked to other people that are in single family. They say it's more cutthroat, but people share a lot. It's amazing. All you got to do is ask.
The Competitive World
Clive: That's been my experience too. I went to a very competitive law school and landed on Wall Street. And so, I know what the competitive world is, what it's like.
Darin: In some other industries, people are going to not tell you how to be successful. You got to figure it out on your own. But here, there are people to reach out to. There are examples and they're willing to lend a hand and all that. You talked about it earlier, you weren't an overnight success. Most people are not an overnight successes. Even the athletes that catch the winning touchdown, that guy spent so many years in the gym before that. But people just remember the game-winning catch.
Talk about perseverance and determination because I have seen people come into this industry. They have an expectation that "Within six months or a year, I'm going to get my first deal." If they don't, I see some of them peter out. You had the perseverance and determination to stick with it, how'd you do that?
Clive: That self-directed real estate MBA that I mentioned, was an investment in myself. When you pay or invest in education, you are making a bet on yourself. For me, I'm stubborn, so that's part of the formula.
Darin: Are you a Taurus?
Clive: I'm a Libra.
Darin: I'm stubborn too and I'm a Taurus. It's one of the characteristics, so I'm just curious.
Clive: Once you make that investment in yourself, you are saying that I'm putting these chips on Clive. I'm putting these chips in, on Clive to be successful.
Giving a Good Try
Clive: If at any point you say, "You know what, I gave it a good try, but I'm going to walk away without obtaining or attaining the thing that you were pursuing. For me, that's almost like saying, "You know what, you weren't a good bet. You turned out to be a poor bet."
My ego's probably plus or minus the same size as most folks. I'm just unwilling to say that anything that I've invested hours, time, resources, and sacrifices into, I can't be successful at it. Had I said, "I got to get my first deal in six or 12 months and if I don't, I'm walking away." One, it would've been premature in my case. Two, it would've meant that I needed to jump back in that boat and sail back to corporate life or a corporate job. And I just wasn't willing to do that. I knew that I was going to get the job done. It was a matter of how long it would take, not if I would get the job done.
That's my whole mentality when it comes to achieving anything worthwhile, that I can do it. It’s just a matter of what the timeline looks like. The timeline, you can't necessarily control it. Once you embrace the lack of safety of entrepreneurism, you know that you don't have the comfort when you're in a corporate job. Every two weeks or periodically, you're going to have a direct deposit that's going to hit and bar you from doing something silly to get yourself fired or something outside of your control happening. Those direct deposits are going to keep coming.
How to Build Generational Wealth Through the Entrepreneurial Path
Clive: But once you go down this entrepreneurial path, there is no set timeline. There is no manual that says, "Do this step, this step, and this step, and in 12 months, you'll land your first deal. In month 13, you'll start asset managing." It just doesn't work like that. It's an investment in myself, and I just knew that I was committed to that path and that journey.
I don't know if you've seen this, but there's this picture I've seen a meme of it floating around social media. You've got some guy who’s digging for diamonds, he's in a mine and he's chipping away. Little does he know, right on the other side, he's been chipping away for a long period of time, he's about a foot away from a diamond just stash. And he has no idea.
He just says, "You know what, I've been at this too long." And he turns around and starts heading out of the mine. Then someone else comes along and they chip once, twice, third time, lo and behold, diamonds are flowing out.
Darin: I've never seen that, but I think that's true. I applaud you for your perseverance and determination to stick with it because it's tough. It is tough and I'll tell people that I liken it to the 80/20 rule. If in any other industry that you've been in, you figure it out and you rise to be in the top 20%. That same thing's going to happen whether it's in real estate investing, or you go out to start your own company.
Is Multifamily the Space For You?
Darin: If you are the type of person that is going to keep plugging and pushing and pivoting to find a way, you will be successful. You don't have to know it all to start with but if you're a person that, the first time something troubling comes along, you don't get your way, and you just quit, it's probably not the space for you.
Clive: I just attended a multifamily conference this past weekend in Dallas. One of the concepts that I always heard about but had not experienced is the law of the first deal. The law of the first deal says going from zero to one, one being your first deal, is going to be the hardest deal that you will ever do. That’s in terms of how long it takes, the challenges, obstacles that you have to overcome, all of those things. But going from one to two, or one to three, or more, each one of those subsequent deals comes more easily. I've heard that for a long time. I was like, "I just got to get my first one, and then we'll see if it's true."
Darin: Why do you think that's true?
Clive: The multifamily world and the brokerage community, which is part of it, I liken it to a country club of some sort. Getting initial entry to the country club is pretty hard, but once you get in a door and people are like, "Oh okay, he has a membership." Then you say, "I want to go play squash," then you have the run of the country club.
Broker Opinion of Values
Clive: It's like, "He's one of us now. He has been vetted. He's in, so now let's see what he does when he's inside the country club." It's a much different position than being on the outside, rubbing the window and putting your nose against the window, and saying, "I want to get in."
I landed that first deal. We closed it in November of '21. I remember it so well. Even before we closed the deal, we got awarded the deal summer of '21. I was actually in Dallas for an event. It’s for the buyer interview on this deal that I had locked in. So, I went up to the hotel room. We did the buyer interview and chatted with the seller. 20 minutes after, we got a callback, "Congratulations, you've been awarded the deal." So celebratory time, everything that I've been waiting for. This was on a Friday.
I flew back to Atlanta and I got back there on a Sunday. On Monday, I got a call from a broker who I'd been in conversations with for the better part of two years. It was not a broker associated with a deal that I had been awarded. He says, "Clive, congratulations. I heard that you got awarded X, Y, Z deal." I'm saying to myself, "I just got back to Atlanta and I just got awarded that deal on Friday. How did you hear that I got awarded this deal?" He's like, "Well, anyway, I've got these two deals. They're not yet marketed. I've got BOVs, and broker opinions of values that I can share. Just sign this NDA and I'll send them over to you. You can check them out, and see if they meet your criteria."
An Off-Market Deal
Clive: This is a broker I've been talking to for two years and had never received an off-market deal from. Literally, the same weekend or day after I return, I'm getting that call that says, "I heard you got admitted to the country club. You might want to take a look at these two opportunities." It's amazing how it works.
And so fast forward to the closing of that deal. I close that first deal we got awarded in November. The same week, we were awarded our second deal. Now, obviously that second deal we'd been putting in work and effort long before that week. You know, every seller is going to say, "Who are these guys? Can they close the deal?" I know that broker, Cushman broker, was able to say when he got those questions, "While we haven't transacted with them, they just closed another deal this week. By the way, it happens to be less than five miles away from your property. It's of this size and this many units, and what have you."
Had we not closed that first deal and he was responding to that question from his client, he would've had to say, "I've not transacted with them. I don't know whether they can close, but I know he's been pursuing deals for the last couple of years." That's a very different conversation. When the seller hears that, they're probably like, "Let's go to the next buyer on the list."
Darin: Who else is part of this?
Clive: That law of the first deal, 100% was my experience.
Darin: Whether it be brokers, sellers, whoever, everybody knows it's hard to get your first deal. So if you do it, they're like, "That guy's got something that got him through the door and he's showed he's committed. He's committed to the space and committed to the industry and to build up his portfolio."
Talk about pivoting. I haven't even asked you whether you did it. When you started your own business or when you get into real estate, in the beginning, you don't really understand where you're going to be positioned. You may end up having to change your strategy along the way, you have to pivot somehow. Did you have to pivot in any way and how'd you do it?
Clive: I think your approach, your tactics. One, you've got to be flexible in this space. You can't come into this space and say, "This is the way I'm going to do it and not be open to making adjustments." Even when you're driving and Waze or your GPS says, "You got three ways to go," if you are just like, "No. This is the only way I'm going. Even if there's an hour's worth of traffic ahead of me, I'm only going that way."
You've got to be flexible. As long as everything is in furtherance and in the direction of your ultimate destination, you've got to be open to taking a different course.
I know my buying criteria have constantly evolved over time, even before I got that first deal. Those two years, the deal that I submitted my first LOI on, in April of 2019, 12 months after that, I would not even have looked at that property.
The Evolving Buying Criteria
Clive: One, the number of units was less than a hundred units. It was a C-class property. Over the course of time, my buying criteria was evolving with the market. My knowledge was hopefully growing with the increased exposure and education that I was exposed to. Also, I always say that I had a plan A preferred partner to do my deals with.
I always knew that there was a possibility that I could land that first deal and go to my plan A preferred partner. He could say, "Clive looks like a great deal, but I can't be involved because X, Y, or Z." Let's just say that maybe he has a conflicting deal, where he's going to be raising money for that deal on the same time.
Darin: He just said yes to another deal, so he can't do it.
Clive: I knew that I needed to one, develop relationships and have potential plan B and plan C partners. You just can't get locked into, I'm only going to do a deal if it looks like this, or I'm only going to do a deal if it's with this person. Those things are out of your control.
Darin: I've talked to people where they're like, "I've got this guy that will partner with me. He's out in the Midwest and he owns 5,000 units." I'm like, "What if you call him?" Just that example. What if you get a deal, you're in best and final, you call him. He is like, "Oh man, I'd love to work with you, but I just committed to this other deal."
Major Markets Vs Tertiary Markets
Darin: You have to have other people lined up that know you, trust you, respect you, and are willing to work with you, or else you're going to lose all credibility with the brokers. And they're not going to bring you into the next deal.
Underwriting is another area. When I started underwriting, for the listeners, if you haven't done it before, it’s just basically taking data from a bunch of different documents and putting it into an Excel spreadsheet. This is to determine whether the investment is a good investment for investors and whether the returns are going to be there. But when you're doing that, there are so many different decision points.
When I started, I always took the conservative approach. If you do that in every different instance, all of a sudden, no deal looks good. So, you have to pivot and learn from other people that are winning deals.
How are you underwriting, and can you get comfortable with that? That's another area of looking at things a little bit differently. It could be looking at major markets versus tertiary markets. Tertiary markets don't have as much competition. If you're unsuccessful in the major markets, maybe look at some of the tertiary markets. Talk about networking. One, did you realize you had to do as much networking as you do? Two, what have been some of the things that you think you've done right and have helped you along the way?
Clive: This space that we're in, relationships are everything. I'd heard that before, but you see that firsthand when you get into this space.
How to Build Generational Wealth Through Networking
Clive: I compare and contrast my networking and my networking skillset back when I was in corporate life versus my networking skillset today. Quite frankly, in those 20 years of corporate life, networking was not essential to my success. It wasn't going to impact, for the most part, my take-home pay. I probably could have been more successful within the corporate context. Maybe I would have moved up faster, or someone would've taken a liking to me if I had been better at networking. But at the end of the day, I did not think networking was essential to my being successful.
Fast forward or transition to multifamily real estate from day one, it's all about networking. The very first event that you go to, it's like speed dating. There's going to be business cards, speed exchange, people trying to get to know, "Who are you? What do you do? Where are you in your journey?" Everything is about sharing yourself. In turn, people sharing with you and the people that you date well with are potential partners, potential collaborators, and potential investors in your opportunities.
You never know where your investment dollars are going to come from or who you potentially are going to collaborate with and partner with. You’re always on your best behavior when it comes to networking in our space. It's all about, let me see if I can get to the point where they know, like, and trust me. In turn, I can get to a point where I know, like, and trust them, wherever the relationship's going to go.
The Skillset Needed to Succeed in Real Estate
Clive: My skill set today versus what it was in corporate America is night and day. I’m constantly on the phone, in Zoom meetings, and talking to people one-to-one. I don't necessarily go into these calls saying that this is a potential partner, or this is a potential investor, I just talk to people. During the course of those conversations, you figure out, are there opportunities for us to collaborate in some way? Is there something that I can share with them that would be a value add to them? Hopefully, they're on the other end thinking the same way, but it's 100% about networking.
If you talk about broker relationships, if you're not prepared and willing to network, you need to find another career, another lane. Multifamily is not for you if you're not prepared to put in the time to legitimately network, authentically share yourself, and authentically be curious about other people.
Darin: I like how you said you date well, with. It could sound funny, like speed dating and date well with, but it's true. You don't go into it thinking, "I'm talking to this person so they could be a partner." But you walk away like, "I really like that person and I got the sense that they really like me. Then in our conversation, they like to do this part of the business, and I like to do this part of the business. Together, we're better than separate." All of a sudden, you start realizing those things. Otherwise, passive investors are like, "I really like Clive. When he gets a deal, I'm interested in working with him.”
How to Build Generational Wealth From Operations Standpoint
Darin: "I love the Atlanta market and he's there. He's boots on the ground. I don't know anybody else there." Then it could be just from an operations standpoint. You network with other syndicators and maybe you don't partner with them, but you've never had a fire at your location. All of a sudden, two networking sessions ago, you talked to these syndicators and they just had a fire. You're like, "How'd you handle that?" They're like, "Oh, it was easy." A five-minute conversation, what could have been really scary, you're like, "they already helped me through it. What's the next big stretch goal for you? Where do you go from here?
Clive: I'm focused on 2022, but the three-to-five-year plans beyond that, I know it's a matter of time when I get into the development world. Development for me is a logical next step, transition, or addition to what I'm doing now. I still consider myself a babe in the woods in terms of my multifamily experience. I'm going to do more deals without a doubt. I talked early in our conversation about passion.
I've always had a strong interest in developing something from scratch. And so combining that with the passion for real estate, and entrepreneurism, all roads lead to you're going to get into development. It's not an if, it's when. That is something that I've taken some small steps already in preparation. I have a small GP interest in a development project here in Atlanta, but it's not my deal.
Darin: Sure, but you learn from that.
Clive: It's just a matter of time when I get into that. The idea of developing, and building communities, is something that gets me and my juices going. That would be an answer that would be spot on in terms of your question.
Darin: For the listeners' benefit, the one thing that I've learned and seen when I drive around is that there really is no ceiling in real estate. In your corporate job, you can look at the top-level guys and you're like, how much are they making? How much are they working? But there's a ceiling, and in real estate, there's really not a ceiling. What do I mean by that? Well, you drive down and talk about development, massive retail complexes, high-rise buildings, like resorts.
There are so many different places that you can play in this game and really push your comfort zone. Some people like to do something and then just be repetitive and they're comfortable with that. Some people want to stretch and do stuff that they haven't done before and it provides you both opportunities. That's what's fantastic about it. I look forward to seeing some of your development deals, I know you're going to do it. What do you like to do outside of work?
Clive: I'll call it soccer because we're in America, although its true name is football around the rest of the world. That's my sport. I grew up in the UK and I played that for most of my life. I'm a big football fan and I love track and field. On my bucket list, I've already checked off a few things. I went to Brazil for the World Cup back in 2014.
Darin: Where'd you go? I went to Brazil a long time ago.
Clive: We were based in Sao Paulo. We traveled to games and other places from there, but that was our base. Two years after that, I went to the Olympics in Rio. So two of the biggest, most beautiful sporting events to me, at least I've been able to check off the bucket list.
Darin: How did you like going to the Olympics? Was it awesome?
Clive: The answer is 100%, yes. I love the Brazilian people, and I love the Olympics. I'd go to the Olympics anywhere, but to be in Rio, where I had not been before, I'd been to Brazil many times, but not to Rio. It was a great experience. I was able to take my sister with me. That was my way of treating her. We got to experience that together.
Darin: It is a bucket list for me too. I have not been that's why I'm curious as to how it was. That's fantastic, you had a great experience. And like you said, Rio is absolutely beautiful. I did get a chance to go both to Sao Paulo and Rio and it is gorgeous. And I can't imagine being there during that time, so that's fantastic.
Clive: Next month I will be going to the World Track and Field Championships, which will be in the US for the very first time. I was surprised to learn that.
Clive: It's going to be in Eugene, Oregon. I'll be there for just under two weeks, partaking in that and getting to see the greatest track and field athletes from around the world competing. So, another bucket list item was checked off.
How to Build Generational Wealth in the Corporate Real Estate
Darin: So, bucket list items, typically you have to have the funds to do it and you have to have the time. The corporate real estate, the real estate investing world, gives you the opportunity, one, to make money and two, to have the flexibility of your time to go do that. If people want to get in touch with you and learn more about you, what's the best way for them to do that?
Clive: I'm on LinkedIn and Facebook. Those are platforms where I can be found and I'm fairly active. The best way to get ahold of me is I recently launched my website, which is parkroyalcapital.com. I'm really proud of that. I went off, I started this multifamily business. Now I'm getting around to put it in place some of the supporting infrastructure and the website is one key component of that. I'm really proud of what we put together there. If you go to that website, parkroyalcapital.com, you can book a call with me. You can follow me on social media. All of the ways to contact me can be found there.
Darin: Listeners, this is a space that people are willing to share. People are willing to let you know how they did it, and genuinely want other people to be successful. So, reach out to Clive, get a better understanding of how he did it, and get in part some of his deals. I look forward to seeing his development deals coming forward. Till next week, signing off.