Are you looking to find out how to stand out in real estate investing?
You’ve come to the right place. Hayden Harrington just landed his first deal and it was a big one! It was a 228 unit A class syndicated deal in Houston. Listen as he shares what it takes to get your foot in the door and how you can add value as a new guy in this industry.
There are no excuses for younger people listening or inexperienced investors looking to break into this industry. Listen up as Hayden shares what it took to break in and how you can do it too!
Table of Contents:
- Where To Listen To The Podcast
- A Man Who Knows How to Stand Out
- Multifamily Is Marriage
- Take the Chance to Seize Your Dreams
- Knowing Your Worth Is a Start on How to Stand Out
- Be Comfortable With Being Uncomfortable
- How to Stand Out and Pivot Your Way to Success
- Secret Formula on How to Stand Out
- How to Reach Hayden Harrington
A Man Who Knows How to Stand Out
Darin: Hayden Harrington lives in the Dallas area. He is 26 years old and just landed his first multifamily deal. A 228 unit A-class deal in Houston. This guy understands that he needs to bring value to others and he went out and found a way to do it and how to stand out.
Just a little bit on how I know Hayden. I've known of Hayden for a while through social media and through multifamily conferences and meetups and all of that. We hadn't met each other and he ended up partnering with somebody that I knew well through my multifamily mentorship group, a gentleman by the name of Dustin Miles. He actually was on the show, episode number 20 and Hayden partnered up with him.
They ended up getting into a deal and they had another gentleman that I knew very well, John Monteiro, and highly respect both John and Dustin. Then I came on as part of the GP on that group. I got to know Hayden well through the whole process, so I'm excited about this conversation. Hayden, I typically start the conversation by how many properties and how many units, but this is your first deal. Just give the listeners a little perspective on what your first deal looks like.
Hayden: It was a little unconventional. It was 228 units built in 2012 for a purchase price of just over 29 million. I’m very excited about it.
Darin: Here's a guy who's 26 years old and his first deal is a $30 million, A-class property in Houston. A strong, strong, strong market. That's amazing. The first thing I would like to ask you is how did you and Dustin even come together?
Darin: Here you are, you don't have experience and you end up partnering with a guy who is well-regarded in the industry. He's done 10 or 11 deals, syndicated deals. How'd you guys come together?
Hayden: It was a pretty long journey. Prior to meeting Dustin, I think it's important because I was trying to get into the multifamily space any way I could. I was trying to understand how the game was played and so forth. So I met some people and the first thing that came to my mind is, "I'll work for free. Let me work for free. Just let me be around you. I want to see how deals are done and strike up a partnership that way."
You'd really be amazed how many doors got closed at that offer. That had me rethink, what is actual value to somebody who is experienced like Dustin, who's done 10 syndications? Just offering time for free was not valuable because in their minds they would have to hold my hand and teach me everything, so they're giving the value and not receiving any. It took a few failed relationships and closed doors for me to actually realize that and here comes along, Dustin.
I met him, took him out to lunch too because he was offering his time to sit down with me. And I bought him lunch and just, he was so kind to answer some of my questions and threw the idea out there because I had started to network around and see, understand how multifamily is played. I realized that there was a lot of opportunity in networking events because the people that were putting on those events were the ones that were actually doing deals.
How to Stand Out While Bringing Value
Hayden: I said, "Forget offering to work for free. That adds no value to somebody. I'm going to offer something different." In my mind, when I asked that question, what is value to somebody that's experienced (deals or capital)? That's the quickest way to speak a syndicator's language – either to find deals or bring capital. I knew that bringing a deal was going to be incredibly challenging because it's not like a single family. These brokers essentially control the market, these big shops and they want to know, hey, can you close?
Do you have a track record? Are you in this market? They're not going to just go to hand somebody they'd never heard of a sweet deal. It's just not going to happen. All the deals you find on CREXi and LoopNet are deals that everybody's passed on. I knew that would be a challenge. That's when I really focused on, okay, I want to try and find capital. I didn't know a bunch of people, but I didn't want that to stop me either, so I said, "Okay, I can go out and find them."
I'd known Dustin and I said, "What if we start a meetup together and see where it goes?" I think it was the right place at the right time where Dustin had that idea in his mind already, and I just came along and said let's try it. He took a massive chance on me because he said, "Let's assess it out." He took a massive chance on me and I knew that, and in my mind, I was like, "He is staking his reputation on whatever we're doing together, so I know I need to put the highest quality content out there, but the highest quality experience for people."
Multifamily Is Marriage
Hayden: That's really how it all started. We tried out a networking event and went from there. The networking event grew into a partnership. We started underwriting deals together. I like to say multifamily is marriage. You're not only married to your properties, but you're also married to your partners. That early stage is like the dating stage, trying to understand how do you work together, what skills do you have, how everything fits together, who focuses on what, and stuff like that. I was really good at marketing and branding.
That's what I really like to do. Dustin was very numbers-oriented. He's an engineer by trade. And he loves dialing in deals, figuring out how to make deals work, and together we just had some complementary skills. That's ultimately what allowed this deal to come to fruition.
Darin: That is awesome. You are the first young guy. You're 26, I'm 50. You're like half my age, but you're the first young guy that I've met that pivoted. Most people start out saying exactly the same thing and I get DMs all the time on Instagram. I get on the phone with people and I meet a lot of young people, they want to get into space and so many of them say the exact same thing that you were saying. I'll work for free. What can I do?
I'll underwrite deals and I pass because this market is extremely competitive. So if I'm going after a deal, I'm looking to partner with somebody that has more experience than me because I want to get selected. I don't really want to handhold somebody that's completely new. I'm happy to help, provide guidance and strategic advice.
How to Stand Out When You're a Novice
Darin: I love to help people, but I don't really want to be a day in and day out coach. You're the first person that said, "What can I do differently?" And the meetup was a great idea, an awesome idea.
For the young listeners out there, look, there are people that are listening all over the country. You don't have to be in the Texas market like we are, and you could take Hayden's actions. Go out, do the same thing, and learn how to stand out. Because look, I talk to a lot of young people and people that are older that are trying to chase their first deal. A lot of them, you could hear it in their voice, they don't feel worthy. They don't feel like they have any value to offer. You believed in yourself enough that you said, "All right, I'm not going to be able to do it this way, but I can add value in this other way." That is awesome. I applaud you. How did you and Dustin even meet?
Hayden: Crazy story. I was just trying to network around, there was an app just for networking with professionals, like LinkedIn. I think it was called Shapr and we connected on that and then I just said, "Hey, let me take you out to lunch. I'd just love to just pick your brain." That's how it all happened. I think we had lunch two times. He introduced me to Kenny Wolfe. I'm sure your listeners may be familiar too. Talked to Kenny and ultimately, it turned into a partnership. It's crazy. The ironic thing is too, I ended up working for free for a long time, anyways, but I was offering value along the way.
An Attractive Solution on How to Stand Out
Hayden: As you said, many people just keep offering that same thing over and over and over again, and never change their approach. That's the definition of insanity. You do the same thing, expecting a different result. So you have to stand out.
Obviously, after the first setback, you may not want to change your approach. But the second, third, fourth times you may want to consider, "Hey, maybe what I'm doing here isn't actually valuable in their eyes. Maybe I need to put myself in their shoes and look at it from a different perspective and then change my approach and figure out a different way."
Darin: Yes, that's huge. The two points that you brought up earlier for value, finding deals, or finding capital. I found that out pretty early in the process as well. And I was trying to, hey, just be buddy, buddy with different people. "Hey, you want me to be a partner? I'm a good guy." Luckily, I had somebody that said, "You know what, you really need to either bring the deal or bring a ton of capital." That person, because they said that, I pivoted and I focused on finding the deal.
But, you're the first person that I've heard that came up with another solution, which is extremely attractive. And if people listen to other podcasts in the multifamily space, I'm sure they know Joe Fairless and Joe will say in his book, "Well, create a thought leadership platform." And that's what you did. You helped Dustin, collectively the two of you put together a thought leadership platform and have a Meetup group and a website and branding. Just very intelligent, so great job. That's amazing. What did you do before you got into multifamily at that ripe old age of 26?
Learning From His Father
Hayden: I've been in real estate for a long time. Growing up with my dad, it was like every year we'd get a new rental, a new fixer flip project, and he was an engineer too, and he always liked to figure things out and he didn't trust contractors, so I was who he contracted to help with all the work. That really taught me the ins and outs of what's behind the walls, what's under the floors and how to do conversions, how to add value to a property. Like, a three and two is more valuable than a three and one.
We did a lot of stuff like that together, but it really highlighted the risks involved with not having scale because I got to see firsthand. We had tenants that would just get up in the middle of the night and leave, and then you're a hundred percent occupied and 0% overnight. Now I have to scramble and all that, which is fun. We had tenants that would steal stuff and just call us for the most minor things. It was just a headache. I believe you can absolutely do well in single family in any aspect of real estate, but it just wasn't for me. That's what planted the seed for a long time.
Darin: At what age did you start doing that with your dad?
Hayden: I was pretty young. In my teens, I'd say 15, 16 I started doing that. I still help him with that. Every time I go down to Houston to see him, he's got a project that he needs another helping hand with.
Darin: How many deals does he have, single-family-wise?
Find Your Passion and Learn How to Stand Out
Hayden: He's got about five right now and he's sold a few in the past and stuff like that. He just picked up two additional rentals. One is turnkey and one needed some value add to it, but that's what taught me the ins and outs and planted the seed for real estate that eventually grew. Out of college, I started a nutrition company, actually, which is what brought me up to Dallas. That's really where I got my marketing and branding skills you could say and really love for that side of the business because frankly, couldn't afford to pay designers when we initially started that. We really bootstrapped it.
Darin: Where'd you go to college?
Hayden: Went to UT Tyler and I left after about two years.
Darin: Okay. So you didn't graduate, you went two years and then you started your own company?
Hayden: Yes, correct. I was getting good grades and on the Dean's list, so it wasn't about the grades.
Darin: I'm not here to judge you on your grades by any means, I'm just trying to understand the journey.
Hayden: The reason why I left was that it wasn't how I learned. There was one class and it's ironic because it was an economics class, but it was once a week. It was three hours from six to nine at night, and the teacher, great teacher, but it just wasn't how I learned. It was PowerPoint presentations and really nothing more.
I was just sitting there and I'm saying, "Man, I'm going to cram for this test and I'm going to forget everything next week. This is not for me, and I'm not passionate about that. That's not how I learn.”
Take the Chance to Seize Your Dreams
Hayden: I want to go off and use this time while I'm young to take risks, to go after what I want to do.
Because I knew the longer I waited to do that, the harder it's going to be. The more liabilities I'm going to have; the more responsibilities I'm going to have. It just gets harder and harder and harder. I said, "You know what, I've got this dream. I'm going to go take a chance."
Darin: Awesome. You left Tyler after two years. I'm assuming you moved in with mom and dad to save some money to start your company.
Hayden: Yes. Moved in with my mom. I actually had plans to start that company out of my mom's garage, cleared it out, built racks and everything. That was going to be our distribution warehouse and did a final check-up in Dallas with our manufacturer on the formulas and just to see the production line and everything and they said, "Hey, can you stick around for a week, put a business plan together?" I said, "Absolutely." Guys ended up liking the idea, the brand, like us so much that ended up partnering.
Two weeks later, they said, "How fast can you get up here?" Two weeks later, I was up in Dallas and got the cheapest place I can find and probably the roughest part of Dallas and didn't know any better. But overnight, we had warehouse space, we had distribution, we had contacts, our entire first production line was on consignment, so they fronted all of that. We got to pay it back as we went. That's how it was born, and within eight months of dropping out, we had a product on the market.
Innate Courage on How to Stand Out
Darin: You leave, you're, I don't know, 20, you're 26 now. How long did you have the nutrition company and what was the success?
Hayden: I had it for a while and ended up growing it, probably four years or so.
Darin: Four years. Was there an exit on that?
Hayden: Yes, I left. I sold it to one of the other partners and we were in about 90 stores across, I think, eight different states in the Southeast. It was a great business, and the thing that I took most from it was thinking about how do you differentiate yourself. Because in the nutrition market, you've got a thousand competitors and you've got this customer that walks in the store. How do you get them to pick you? That's really the same approach that I took to real estate too.
Because after I left that, again, that seed had always been planted. That desire to go bigger was always there and I said, "Okay, full attention. I'm going to figure this out." And I took that same approach. I wanted to understand A, how the game is played, and then B, how can I add value? How can I stand out? Just like, how do I get a customer to pick me up off the shelf and try me? It's the same thing. That's really why we started a networking event and did something a little bit differently because frankly, I went around to a number of different events and they're all the same. I was a little introverted and I wasn't that great at networking either, and I knew your network is your net worth, especially in real estate.
Real Estate Is a Relationship Business
Hayden: It's a relationship business, 100%. I'd go to these local events, and typically they're at restaurants and you sit down at the table and you get locked into your seat with two people right next to you and you don't move for the next hour and a half. To me, I was like, "This is a problem because I'm not meeting people quick enough to reach my goals." And I had pretty ambitious goals.
That's when the light bulb moment came on.
I said, "Okay if everybody's playing this game the same, I can come in and introduce a little bit different and see if we get traction." And I knew if we got the traction that's valuable. That's really what I then brought to Dustin.
I said, "I've gone around, I've done some research. I see some opportunity for improvement here that I think we can really stand out and create something together where A, I can add value to you."
My whole goal was to make Dustin look good. If I could make him look good, a little bit of that would rub off on me. I didn't care so much about that, but I knew that would be the by-product of it.
Darin: What did you guys do that was different?
Hayden: First of all, we changed the setting. That was the number one issue. Restaurants were noisy, and again, you get locked into that seat and it's just hard to network unless you're really an extrovert, you're really great at meeting people and moving around, and talking, you can do fine anywhere, but not everybody's like that. I wasn't, and essentially I was trying to solve the problem for myself and I just extrapolated the idea that maybe other people are struggling with this too.
How to Stand Out? Do It Differently
Hayden: First of all, we changed the setting. We put them in, Madison Title is the title company up here that Dustin had actually worked with before. And they said, "Sure. Come on in. We'll open up our offices after hours, we'll cater it." So we have free food. That was another thing it's like, there were networking events every single night in Dallas in 2019, and I didn't want to go out and spend 20 bucks every single night trying to meet people and buying all this food and stuff.
Again, it's all about the experience. It's all about the customer experience. It doesn't matter what business you're in. We took care of food and then another big thing was handwriting because I knew everybody that came through that door was a potential lead and the sign in, the check-in process was really, really bad when I first got started because they typically just had a piece of paper and a pen with name tags. Nobody was standing there.
It was just on a table by itself. You had to check-in. So first of all, half the people weren't even writing their name down, they were just writing the name tags down, so already, off the top, 50% of leads you don't even know.
Darin: They're gone.
Hayden: Exactly, so we did a digital check-in that automatically, as soon as they type their name in, was adding it to a CRM on the backend of our website. Again, just a little stuff like that, that we could build a list makes the experience better for when they come and then we can follow up with them and we know, hey, who you are, what you're looking to do and all that stuff.
Knowing Your Worth Is a Start on How to Stand Out
Hayden: I think the little details make the biggest difference. I always say that.
Darin: It does. Look, one, if people don't know you and they don't know what you're trying to achieve, how are they going to help you?
Touching more people and getting in front of more people is key in this space, for sure. Young guy, very smart approach in terms of developing a relationship with Dustin. Help me understand your mindset. I talk to so many people that are younger, that again, I could hear it in their voice that they feel like they're not worthy. How did you have the confidence that you had value to offer?
Hayden: Great question, because I don't know if I would say I necessarily had the confidence because there are so many unknowns. But I always say, I said it to Dustin too, and I said to myself in the beginning, if I'm going to bet on anybody, I'm going to bet on me. Dustin and I say that internally now if we're going to bet on anybody that's bet on us. I wanted to go for it. I don't think I read a book cover to cover up to when I was in college, and then when I left, I was like, "Now I got to actually start learning about what I want to do."
That sparked an interest in reading and personal development and I was finishing a book at least every other week, maybe even each week, reading 50, 60 books a year. That really sparked an interest in personal development and understanding what's my purpose, why am I here and stuff like that and really started just to believe in me.
Risk-Taker in the Making
Hayden: Say, "If I'm here, I don't want to spend my life doing something that I'm not passionate about. I'll look back 50 years from now or 60 years from now and have regrets."
Again, it was like, I'm just going for it. I'm young. I can take risks and I don't want to get stuck down the road. Just started to do a lot of personal development, a lot of reading, and I just kept telling myself and reinforcing this idea that if I'm going to bet on anybody, I'm going to bet on me. And I'm not going to look back, because when we started the networking event with Dustin, this is an interesting fact, too. Growing up, I was always told, "Why are you so shy? Why are you so quiet?"
That was always a massive limiting belief in my own mind because I always believed them. I always believed I was shy and quiet, so for the longest time, I never really let my voice out. I never voiced my opinion. And I didn't like getting in front of crowds, and I knew, I was like, "If I'm going to start a networking event as a co-host of it, I'm going to have to get in front of people. I'm going to have to break out of that shell."
That was an incredibly big move for me personally, just to overcome that insecurity that I had for years and years and years up to that point. But again, it was a goal, it was a dream. The fear of regret far outweighed the fear of failure. I said, "You know what, I'm just going to try it. I do not care how badly this goes. I'm going to do it."
How to Stand Out With Snowball of Confidence
Hayden: I probably rehearsed the intro about a thousand times, and I still screwed it up but stumbled through it.
It's amazing, the confidence that comes when you overcome fear when you overcome a limiting belief, and through the process of doing that. I look at fear like a lighthouse. It's my guide to my highest self.
It says, "Hey if you want personal growth, go after what you fear." Because that is the easiest way to identify limiting beliefs within yourself. And as soon as you start to chip away, that internal, that confidence really starts to build upon itself, and it's a snowball.
As soon as you start to get a little bit of traction, you get a little taste of that confidence. It's addicting, you want more of it. You say, "What other fears can I overcome here because I want to grow as an individual?"
Darin: That was so awesome. Thank you for sharing that. So many good things. One, you're reading the books. I have a sophomore in college now at A&M and a senior in high school. I've told both of them like, "Go to college, grow up, but when you go to work for somebody, always have in your mind how you're going to start your own company." Time will tell whether they do that or not, but the thing that I tell them is like, "Look, things change when you go off on your own. You start reading, not because you are told to." Kids are told they have to read and test stuff that they don't have any interest in. Look, communication is very important.
Stop Your Limiting Beliefs
Darin: Learning how to read and write is extremely important. There's a lot of other classes that are important, but for a kid going through school, whether it be high school or college, you're taking a lot of classes that you really don't care about, and when you get off on your own and you're passionate about something and you start reading about how to become a better you or how to implement something that you want to accomplish.
It's completely different. You're learning because you have a personal desire to try to leverage knowledge from somebody else. That's huge that you went through that. You talked about the limiting beliefs. I'm guessing it was family, friends, teachers, coaches. All of the above that told you, "Why are you so shy?" I didn't go through this, but I've heard that people that are very heavy and they lose a bunch of weight and people are like, "My gosh, you look fantastic."
It's still hard for that person to see themselves as fit and beautiful or strong because they have that limited belief in their mind. They still see themselves as being overweight or not worthy. That's huge that you tested yourself and you came out on the other side and not only did you accomplish that one feat, but then it drove you to, "Okay, what's next? What's the next thing that I'm uncomfortable about that I could try to push past?" That's huge, man.
Hayden: Absolutely. I think we're here for a reason and there are always areas that we can continue to grow, and I promise once you get a taste of that personal growth, you'll definitely want more. It can be a snowball for bad, or it can be a snowball for good.
Capabilities Teach You How to Stand Out
Hayden: It's really up to you. If you let that fear, if you let that insecurity paralyze you, it will snowball for bad and it will do internal damage. But if you say, "No, I want to take back control of my reality, of my experience. I don't want other people's opinions to influence how I live my life." You can really get that snowball rolling for good. It just shows you what you're capable of.
Darin: Completely agree. I think that if you look back, you can look back at some of those fears that you had and you're like, "I got through that." It's not even scary anymore. Now, I don't know how many events that you guys have held at the meetup, but you were scared, you were rehearsing a thousand times for that first one, but the second one and the third one and the fourth one, I imagine they got a lot easier.
Hayden: Absolutely. And thankfully, the audience grew as well. When you're starting, you get to speak in front of a hundred people. It started small, which definitely helped but the confidence grew with practice. Practice makes perfect. It just gets easier and easier as you do it more and more, and again, it just reinforces that belief within yourself that you can do it. That definitely helped. The first one we had 20 people, then 40, then 60 and then a hundred plus from there. That definitely helped me get a little bit more comfortable with the whole process. If I would've had to start with a hundred, I don't know if I would've done it.
Darin: You would have, and you would've stumbled in front of them, but then the next time you might've had 150 or 200.
Be Comfortable With Being Uncomfortable
Darin: Look, it doesn't stop. For the listener's benefit, being uncomfortable does not stop. You just got to push past that fear. I've been afraid of just weird things. I didn't grow up with social media and I didn't get involved with social media until three years ago. I was going to a bunch of entrepreneurial conferences and they said, "You got to get on Instagram." And I was like, "What? That's a toy app for my kids."
I told my kids like, "Hey, can you help me with this?" And I went and hired a consultant to teach me. And they were laughing at me like, "Dad, you're going to get on Instagram?" I was scared to hit the post. It's so silly. Now I don't have any issue with it, but it's so silly to be so afraid. What are people going to think of me? But then what happens is, all of a sudden people contact me from all over the country. I'm having conversations with people that I never would have had conversations with had I not gotten uncomfortable and hit post.
Starting the podcast. I didn't know what the heck I was doing. My kids will walk by my office when I was recording some stuff and they were laughing at me, and now I meet so many great people and I get to hear their journey. A lot of these people I already know, but I haven't had a long conversation to talk about their journey. Like, look, me and you just worked on that $30 million deal. I didn't know all this about you. I'm excited that I get to know more about people and hear how they overcome challenges, so it's fantastic.
Let Passion Lead You How to Stand Out
Darin: Were you the only child, or did you have brothers and sisters?
Hayden: I have one sister, she's about 18 months older than me, so we're pretty close.
Darin: Pretty close and same entrepreneurial bent?
Hayden: Not really, to be honest. She's a nurse down in Houston. Honestly, I'm not really sure where it came from because my parents, both nine to fives, I never really saw it growing up. Honestly, not sure really where it came from.
Darin: Where did it come from?
Hayden: I honestly couldn't tell you.
Darin: That was a risk leaving school. Right? And I have to imagine that there were some people that were chiming in saying, "You're crazy, you're doing something dumb. You're going to regret this." Right?
But you listened to your heart, you listened to your gut, and it was something that you were feeling just locked up and in a cage and you wanted to get out there. You trusted in yourself enough to take that chance.
Hayden: Absolutely. When I left for college, it was an interesting family situation because my parents had just split. It was a rough split and my sister and I got put in the middle of it and stuff, but that's when I really said, "Okay, you know what, I'm going to think for myself now moving forward." I appreciate the input because there definitely was some of that, "You need to get back to school and finish and get your degree" and all that. But it was just an interesting point in time where I didn't really rebel. I just basically said, "I'm going to go after what I want."
Commit and Believe in Yourself
Hayden: I appreciate the input, but now it's time for me to make decisions and create the life that I want." I wasn't taking as much of their input at that time, but I think that's probably what pushed me to start thinking a little bit differently. Who knows?
I think you can find gratitude in everything and that's something that I choose to put my focus on and be grateful for and it's led to where I am today.
Darin: That's awesome. Listeners, look, if this guy can do it, anybody can do it. If I can do it, anybody can do it. There are a few components, some things that I've heard over and over and over again from different successful people that you have to do. One is, you have to make a decision and then you have to commit and you did that. I think there's a lot of people in the real estate investing world or ones that want to get in that say, "I want to invest in real estate." But they haven't made a firm decision.
Like, "Yes, I'm going to buy a single family rental this year, in this market." Or. "I'm going to do multifamily, a 60 unit or a hundred unit." Or if you're Hayden Harrington, an A class $30 million, 228-unit deal in Houston. You have to commit and believe in yourself or else it's just not going to happen. Just saying, I want to, nobody shows up at your door and just hands it to you.
Hayden: If you want to be an expert in your field, that 10,000 hours is the proven mark that you need to hit. Just doing simple math, if you only spend even an hour a day, that's going to take a decade, that's going to take forever. I just worked backward from that. I said, "Okay if I want to make this happen sooner, how much time am I going to have to commit to this?"
Obviously, if you spend all day, every day focused on that one goal, you're going to make it happen quicker than somebody else that has their attention pulled in multiple different directions and they haven't fully committed.
Because I also like to picture it like thinking of a racehorse. They put blinders on horses for a reason when they're trying to win a race, and that's because they don't want the horse wondering what anybody else is doing. What's my competition doing? What other shiny objects are around me?
It's laser-focused on that finish line, on that goal. That's just what I kept in my mind. Those two visuals, that 10,000 hours, that magic number. Then also this idea of I gotta put my blinders on, so I'm not worrying about what could go wrong. That was a huge one. I think too many people are paralyzed because they worry about what could go wrong and what other people are doing, what their peers are doing. Especially my age, wondering, am I getting behind? Because everybody else is going off to college and getting degrees and they're going to start their careers. Am I going to get left behind? You can't worry about those things.
How to Stand Out and Delay Gratification
Hayden: You just have to say, "Hey, this is my goal. I'm going to put my blinders on and I'm going to put in the time."
Darin: That's huge. We didn't talk about it, but I'm sure that you had some sacrifices that you had to go through. You sold your company to a partner, so you probably had some cash, but then you had to live probably pretty meager too because you didn't know how long it was going to take to actually be successful. That's another differentiator. When somebody just makes a decision and they commit, one of the sacrifices they may have to do is live below your means so that you can live better later.
That's difficult for a lot of people. People get the bonus, they get the raise, they buy a nicer car, nicer house, nicer vacation, and then life just pushes them through and they wonder why they don't have the money to get on the investment side. Talk a little bit about what kind of sacrifice you had to make once you sold your company.
Hayden: You're absolutely right. Most people aren't willing, especially in this day and age to delay that gratification. Everything's instant right now, everything is at your fingertips. Everybody's got a smartphone. You can get the latest information, latest updates. People are so used to having everything done for them right now. You've got to be able to delay that gratification. If the goal is big enough, you'll be willing to put in the time and effort required. You're absolutely right. I was spending 30, 40 bucks a week for all my groceries, portioning all my meals, and doing all that just to maximize every dollar that I had.
How to Stand Out and Pivot Your Way to Success
Hayden: I sold my car and I drove my grandfather’s 15-year-old Jeep around for a few years. You've got to be willing to do whatever it takes. It doesn't matter. If you have that goal, you'll figure out a way to make it happen. It did take some time. It did take a lot of sacrifices, but again, it just goes back to, do you really want it or not?
Because if you're not willing to make those sacrifices, you don't want it bad enough. You value your life, whatever level of lifestyle you currently have, you value that more than the goal itself. Because if you value the goal, you'll be willing to not value your current lifestyle quite as much because you'll be able to make sacrifices where you need to in order to attain that goal.
Darin: Absolutely. Most people, they're going to look at you now like, "Here's a 26-year-old guy who just got a 228-unit deal, and man, it just was handed to him. He must be just good friends with Dustin." But no. Look, you had a journey, man, and you were focused and you pivoted. People that start their own business, sometimes you start the business and then you're going after that, and then all of a sudden something happens where you're like, "You know what, this isn't working, but I see this other opportunity over here. If we pivot and we go here, we can make that a success."
Had the person not started the company, they never would have had the opportunity. They never would have seen that opportunity. You have to be willing to ride out some of the difficult times in the beginning because you have a greater goal. That's fantastic.
Deals to Go After
Darin: What kind of deals do you guys go after? What markets are you focused on? What kind of deals are you underwriting today?
Hayden: Good question. We're based here in Dallas, DFW. I'm in Dallas and Dustin, my partner he's over in Fort Worth. Obviously, all DFW is a pretty big focus. I grew up in the Woodlands, which is a suburb of North Houston, so I know that area pretty well. We've started to find some value down there. Obviously, our recent acquisition is in Houston and we were able to get a pretty good deal on it. Some people are afraid of Houston because of the zoning or they're worried about flooding or any of these different things.
But I spent almost 20 years down there growing up, so I understand that Houston is a great market. The cost of living is really affordable for people, especially when you compare it to a Dallas or an Austin and some of the schools are incredible. It's a great place to raise your kids if you've got a family because again, the cost of living combined with the education that you can provide for your kids is fantastic. Those are the two main focuses right now. We are looking at Austin; we are looking at San Antonio.
Everything we're looking at first of all is in Texas, but just a little bit harder down there in Austin. We really like that first-gen value add product. Your 1990s and newer, just based on where prices are in the marketplace for anybody that's underwriting deals or looking at multifamily properties, maybe you're in the space. We really haven't seen any pricing discount post-2020.
Buy Newer Property and Learn How to Stand Out
Hayden: We thought there was going to be one, but multifamily and industrial seem to be the rising stars out of the pandemic, and as a result, there have been no discounts.
As a result, if you've got all your cap rates, whether you're buying an A class property, a B, or C, it just makes a lot of sense to buy newer. If you can lower your risk by buying a better property that you're not going to have as much deferred maintenance, you're not going to have as many issues, you're not going to have outdated systems. That makes a lot of sense in our minds. Really looking for that first-gen value add and what I mean by that is the early 2000s, a lot of mid-2000s products like the property we just bought, built-in 2012.
Nobody's really put money into them because they really, frankly haven't needed to. They cash in on all the equity that they've built up and then as a result, we can come in and do that first-generation value add. All the units are typically classic, the early 2000s, mid-2000s units. They're starting to get a little bit outdated, but the bones are good, and that's what we really like. You're not worried about cast iron pipes, you're not worried about a chiller that's running the whole property and stuff like that that could go out on you.
All the mechanicals are in great shape. The way they're built is fantastic and it's just a really light value add, and you can capitalize on that first-gen value add and be able to push rents. I think a lot of people are so focused on the B and C class because they think that's what a typical value add is.
Know the Story of the Property
Hayden: Most people, when they think of value add, they don't think of a newer property, but especially if you understand the story of the properties, I think that's a very important piece of that puzzle.
If you go into that submarket, if you look at your competitors and there's a delta between where you are and where they are, there's an opportunity to add value. It doesn't matter what vintage your property is, whether you're an, A, B or C. That's really the sweet spot that we're looking for is that value add on a newer product that's just lagging where the market is.
Darin: That's great. I've seen a lot of syndicators over the last a year and a half, two years, really start looking to trade up. They were in B, C and now they're looking at B plus, A, and even some that are looking at ground-up construction. That sounds like a great focus going forward. One of the things that I didn't know I was going to see, but I guess consistent with me hanging out with you during the deal. You're a 26-year-old that just closed on a $30 million deal. Yet your demeanor is very humble.
You're not pumping your chest like, "Hey, I'm a 26-year-old that's better than everybody." I don't know, you just come across as humble and you're just sharing advice with people, good advice. I like that, and I'm sure that that's one of the characteristics that was attractive to Dustin in any event. Talk about working out. It has nothing to do with multifamily, but if you check out this guy's Instagram page, which is @hjharrington, some of the early pictures that are on that page, you are a workout guy. I don't know if you still are.
And Outfielder Who Knows How to Stand Out
Hayden: Yes, absolutely. I played baseball all my life and when I got out of that and into college. And I was an outfielder.
I was still competitive and after I got done with that I'm still in the gym every day. So I did a couple of bodybuilding shows and stuff like that, and that's really where, again, my light bulb moment came off with the nutrition company. It wasn't just because one day I got this random idea to start a nutrition company, it's because I saw a problem that I think I could have solved. That problem was I was taking pre-workouts, and I'm sensitive to some of the ingredients in some of those products.
And unfortunately, manufacturers, especially back in the day, would wrap everything into a proprietary blend then you could never tell how much of each ingredient you were actually taking. It’s a way to disguise how much of each they're putting in there so that they could have a low cost and bigger margins. Because there was a tendency to do what's called pixie dusting, which is just sprinkle ingredients in there in low quantities so you can have them on the label.
Unfortunately, I was having these reactions. I was like, "Man, I need to know how much I'm taking of these ingredients." Because obviously, I'm having a reaction. That's really where that idea came from because I looked around. Again, it's not a complicated formula. It's just looking around in the marketplace and seeing how you can add value. It doesn't really matter what the business is, whether it's real estate, supplements, so on, you've got to find ways on how to stand out. That's really where the idea came from to start a brand with the premise of no proprietary blends.
Secret Formula on How to Stand Out
Hayden: We were full disclosure, full transparency products. It should be treated just like a pharmaceutical where you know exactly how many milligrams of each ingredient you're taking and so forth. I was really big into it back in the day, but that's where that idea was born from again.
What I'd like to convey to your listeners is there's really no secret formula to any of this. It doesn't matter what that goal is, it's just a question of, what's your goal and how can you add value? That's it.
Darin: That's huge. When you talked about building that product, I mentioned I go to a lot of different entrepreneurial conferences. Look, people think that they have to create the one business idea that hasn't been thought of and create that one unique thing. And if they can't come up with that one unique thing, then they're just not going to start their own company. But the reality is most companies are formed just to do it a little better. Either have better ingredients, have better customer service, have better packaging, have better distribution.
It's a lot of the same stuff, but just minor tweaks to fulfill a problem and solve a problem. You did that just naturally, which is incredible. That's fantastic. What is your next big stretch goal? Where do you go from here?
Hayden: The next goal is to keep going. Our goal is to do a deal a quarter. That's really what we're shooting for. We don't necessarily have a unit count that we're targeting or certain assets under our management goal, but a deal a quarter. We want the pipeline full.
Next Big Stretch
Hayden: We want to continue to grow the portfolio. Then strategically grow so that we can create a company around it and start to put asset managers in certain locations, in certain markets that we're focused on, and continue to grow from there.
Not necessarily focused on the money or whatever, because I think that's a by-product of when you really pursue your passion, that's just a natural by-product of it. The reason why I love multifamily, to begin with, is it offers you the opportunity to add value to so many people's lives. To your partners, first of all, to employees that work at the properties, to the tenants that live there through providing an enhancement to the communities, to your investors, allowing them to achieve financial freedom and the life that they wish to have.
It's an incredible vehicle and offers you so many avenues to add value to people's lives. That's really what I'm focused on, it’s just continuing to do that and continuing to go out and get more acquisitions so that we can add value to people's lives.
Darin: One of those components, a piece that got me charged up is, in my other business, all the profit flows down to me and my family. But in the syndications, what I love is look, we're involved at the GP level and we're implementing a business plan and whether it's two years or three years or five years down the road, we have some kind of exit strategy, whether that be cash-out refi or a sale and there's a hurdle that we benefit financially from that. But all the investors that we brought along with us, the limited partners, all those families we've just helped grow their wealth and they all have different needs.
Hayden Outside Real Estate
Darin: Some of them need a new car, some are about to send their kids to college. Some want to go on a nice vacation and some just want to keep growing the nest egg. That to me, at my stage of life, has really got me charged up that it's a way to give back. It's a way to serve others, and for you to see it at your age is incredible. Outside of work, what do you like to do? Do you still work out? What do you enjoy?
Hayden: Some of my non-negotiables are every morning I get up and go to the gym, got to get active, get the body moving. Love to read. I'm still reading pretty much every day. Love to hike. Dustin loves to hike too. We always venture all around Dallas together and we've gone to Colorado and hiked around Colorado. I love just getting outside, enjoying the outdoors, and stuff like that, for sure.
Darin: What's the name of the company that you and Dustin put together?
Hayden: It's called Momentum Multifamily.
Darin: If people want to reach out to you, what's the best way to reach out?
Hayden: Happy to connect via email. The cool thing about this business is, again, it's, you have to have somebody help you in but you get to offer that in return to other people. Dustin's doing that for me. It's something I want to continue to do for others as well. If he wouldn't have taken the time to answer my questions, I wouldn't be here today. So, always happy to answer questions. You can shoot me an email at firstname.lastname@example.org.
Darin: From talking to Dustin, it sounded like you guys had other resources on that website, free resources for people.
How to Stand Out and Learn More From Hardworking People
Darin: Can you just share with the listeners what people can learn just by going to that website?
Hayden: We're constantly trying to do educational events and those recordings will end up on our website. We've got a resources tab at the top if you visit the site. And we've got different tools, whether you're an experienced multifamily syndicator or just learning. We've got a cap rate calculator on there, which is a very cool tool where essentially compiles the last decade of cap rate data for all the major metros across the country and you can track that compression or expansion. I should say over time in these different markets.
Darin: You can go to any state in the country and use that?
Hayden: Pretty much. It's based on all the major metros that CBRE would track every year. All the major markets across the country are pretty much involved in that tool. It was about 4,500 data points over nine or 10 years that are compiled into that tool. It's pretty cool just to be able to track the compression in different markets, and that actually helped us. That tool itself helped us settle on Houston because we saw the most opportunity in that market out of the four major Texas metro. Highly recommend anybody to check that out and play around with it.
Darin: Awesome. Listeners, check out Dustin and Hayden at momentummultifamily.com. I've known Dustin for a long time. These guys are good people to know and he's got a good heart for wanting to share and help people. Definitely think about reaching out to these guys and look forward to working with you guys again, hopefully. Listeners, I hope you enjoy that one, until next week, signing off.