Are you looking for some real estate investing advice? Nathalie is a multifamily real estate investor with over 4,000 units under her belt. In this episode, she dishes out some great advice on how stay the course and get started in the industry – which is definitely a people business. You will learn that success in multifamily comes down to the currency of "trust." She also talks about grit and determination and that time is your most valuable asset. Listen and learn!
Table of Contents:
- Where To Listen To The Podcast
- Introducing Our Guest, Nathalie de Vos Burchart
- Life Is Too Short, Stay the Course
- The Right Thing to Do
- Why You Need In-Person Interactions
- Things That Are Temporary
- How to Reach Nathalie de Vos Burchart
Introducing Our Guest, Nathalie de Vos Burchart
Darin: A little background on Nathalie de Vos Burchart before we start the show. Nathalie lives in the DFW area. She comes from a chemical engineering background. Now, she’s a full-time real estate investor with over 4,000 units. She advises others to get out there and network, let people know who you are and how you can add value. Nathalie, I appreciate you coming on the show.
Nathalie: Thank you for having me and thank you for pronouncing my last name correctly. I know it's not that easy.
Darin: It's not that easy, but I have a long one too. Hey, just a little bit on how Nathalie and I know each other, we are both part of the same mentorship group, the Brad Sumrok group in Dallas. We actually went after two deals together and just fell short on both of them. I think one of them we came in probably third and the other one we came in second. But in multifamily, if you come in second, it's like coming in last. It doesn't matter. There's only one winner. But I really enjoyed working with her and really wished that we had gotten one of those deals taken down together. I'm looking forward to this conversation, so thanks for coming on. To start with, can you share with the listeners how many properties and how many units you're invested in?
Nathalie: I'm both a GP or a general sponsor syndicator and a passive investor. In terms of unit count, it's been well over 4,000 and about a little less than half than that. 1,300, 1,400 of them have been GPs deals that I've done, across nine deals over five, six years now.
Learn How to Stay the Course Like Nathalie
Darin: When I joined the group, Nathalie was already a veteran. She was already getting going. I don't know if you remember it too, but I remember the day we met. It was like the night before a weekend marketing event and it was a happy hour. We're just introducing ourselves and I'm like, "What's your background?" And you floored me with your background. So share with the listeners your background, because I thought it was so interesting.
Nathalie: The exciting thing with apartments for multifamily is you get to interact with people that have a wide variety of backgrounds. Mine actually happens to align pretty well with the space. I don't want to go back too far. I’m a chemical engineer with an MBA. I started my career at ExxonMobil in DC, Fairfax, Virginia on a trading floor. Not that ExxonMobil trades, but it was a trading floor with traders.
One of them and I left ExxonMobil together in 2016 to start a refined products commodity trading company. I was basically in a startup for most of my working career, building that trading company. From the ground up, it was just the two of us for the first couple of years. We built that up, hiring, acquiring, et cetera, to at the time it was over 5 billion in revenue. Now it's even higher, but I've exited, yes, 5 with a B. Imagine the churn on the funds with that. Five-day payment terms, all large players, Shell, BP, Valero, and we were the little guys. Two people, two computers, two phones.
Nathalie: But they trusted us, so that speaks to something that's true in most businesses. It's all about relationships and your reputation and under promising, over delivering. Because you don't get the business and get the repeat business with the customers unless you serve them and you put them first. That was a lesson I took to heart, day one, with that company. It's applicable in so many other areas.
But long story short, my last couple of years at that company, it's called BioUrja, in Houston. My last couple of years were all in M&A where we were trying to normalize our financials, because with trading you can make your year in a month. Just so you know, it's not like trading a screen. It's physical trading of commodities, but you can make your month.
Then, literally, the best thing your whole company can do is just sit on their hands the rest of the year if there aren't opportunities. That doesn't look well for bank lines. At that point in time, we had a syndicated bank line of well over 150 million. We were looking to even double it. With those lines and banks, we needed to have normalized financials, which means we needed to have a regular cash flow.
That sounds familiar because that's what apartments provide. But what I was looking at was the apartment equivalent in the oil and gas industry. So looking at storage facilities, valuing them, doing due diligence on them, pipelines, even production facilities, whether it was ethanol plants, refineries. I did due diligence on a refinery in Hawaii that Chevron was selling. Complicated models when you talk about forward curves of crude oil coming in from Asia into Hawaii and a whole logistics and distribution system.
When It’s Best to Take It Easy and Stay the Course
Nathalie: Anyway, I was evaluating those types of assets for acquisition and on the road a lot. In the meantime, I also had a son and decided to take it easy. I stepped down to evaluating apartments instead of those types of assets. But that's my background, M&A and startup physical commodity trading business. At the heart of it is a risk management business. I think that's particularly pertinent in the climate we're in right now with interest rate changes, cap rate compression or expansion depending on the assets.
Darin: So listeners, do you understand what I'm saying when I was blown away the first time that I talked to her? Like, "This girl is smart." You know when you read books and you're told to hang out with people that are smarter than you? I was like, "I want to partner with you. You have it down." She comes from a very strong risk management background, also, getting out of her comfort zone, starting her own company. I don't know the petroleum business that well, but I have my own perceptions that it's male-oriented. Maybe I'm wrong there, but you come in, and all of a sudden you fire up this business.
Nathalie: It was better over the phone than in person. For some reason, people maybe thought I was older when they spoke to me over the phone. But yes, very male-oriented.
Darin: When you first got into apartments, it was really male-oriented. There's more women in it now than there were four or five years ago. But you had to break through that as well.
The Best Time to Move Out of Your Comfort Zone
Nathalie: I'm lucky that I got that "getting out of your comfort zone and taking risk out of my system early on.” I think that's the best time to do it.
My advice for anybody that's young, fresh out of school, maybe hasn't settled down with a family, now's the time to take risks. You've got such a long runway. Your appetite and ability and capacity is never going to be higher than it is right now.
Darin: I love that. We're going to talk about multifamily and real estate mainly on this show. Whether it's starting your own business or going and trying something new, or even just moving locations, take the chance. You only live life once. The successful people that I've interviewed, they took some chances. Sometimes they work out the first time. Sometimes they don't work out and they pivot. They have to find some other angle, then that angle works out. But they never would've gotten there had they not taken that first step.
Nathalie: You hear it that the gold is in those lessons, in those failures. That's where the growth happens. I'm a better apartment manager for the bad deals that I've been a part of. I've hated them but I've worked through them.
Darin: What are some of the learning lessons that you've learned in the apartment world? You brought it up.
Nathalie: I was talking about those relationships with people. Darin and I were like, "Yes, we want to do a deal together." It's not like Darin and I just met and decided the next day that we were going to do a deal.
Life Is Too Short, Stay the Course
Nathalie: So a big lesson is, pick who you do business with. Take your time picking them because it's hard to unwind on a long transaction, five, potentially six-year hold. Yet, it's hard to undo. Life is too short for a bad partnership. That goes for your passive investors too. You might have some passive investors that you don't want on your deals.
But it's more applicable in the co-sponsorship realm. As everybody's doing bigger and bigger deals, they start cobbling together a team. You don't want to have this seven-headed serpent where you don't know who's doing what and different working styles. Or one particular person steam rolling the rest of the team. What I have to watch out for is that a lot of things come onto my plate and don't leave it. They're like, "Well, you know how to do it? You have the experience." So it just defaults to Nathalie.
You're like, "Wait, aren't you supposed to be building your experience? Taking off some of that slowly." So it's managing those conversations. The people side of it, take your time with it. The most important part of the business is getting to know people and letting people get to know you. Otherwise, most of my challenges have been with smaller deals.
I've been on panels and conferences and things like that, and taken a pretty hard stance on not going too small. I have paid the price of my time because of the poor return on time going into a smaller deal and then struggling with staff. When you don't have staff, then the whole thing starts falling apart.
How to Stay the Course Amidst Challenges
Nathalie: But working through staffing challenges then led to occupancy challenges. It happens to be my hardest deal was my individual deal where it was just my money.
You are willing to take more risks or push through things more when it's yours. Or maybe do things a little differently because you don't have investors to respond to. I would argue that I manage a deal better if I'm doing it for other people than I am for myself. But pushing through those challenges and learning, "Okay, what do we do?" In this case, it's a smaller market with occupancy challenges and older assets, that was the other aspect. So you learn.
You learn what it takes building a team in that market and push through it. The worst thing you can do is throw your hands up in the air, because your first deal might be your last deal in that case. It does take an amount of grit and sticking with it and determination. I know folks that have bought a deal in the last year that are getting a little discouraged or frustrated. My advice on that is stay the course and the only way is through it.
Darin: You said so many great things there. First, on the people side, Nathalie and myself met for many times before we even tried to go after a deal together. It shows that you have to get out there and meet people. People need to get to know you. I've had people reach out to me on Instagram and they're like, "You want to partner on this deal?"
The Deals That Have Gone Bad
Darin: I'm like, "I don't even know you. Next time you're in Dallas, let's get together and let's start to form that relationship." But people that I've done business with, I've known for years.
The other thing is, based on past interviews with people that have thousands of units, the deals that have gone bad. There are two types of discussions with business partners. One is the roles you're going to play. You talked about that, like, "Okay, what role are you going to play? What role am I going to play? What duties are you going to do?" Having that conversation upfront is key so that everybody knows what's going to happen after the deal closes.
But the one area where people have told me, "You know what? When I had a bad partner, it was because we didn't agree on how we saw the world. Our moral compass was different." That is where people can get in a really bad bind. I had one guy say, "Yes, I completely agree. We had a deal where I ended up refunding, we had to back out of the deal before it closed. I gave all the investors their money back. Had I been partnered with somebody else that didn't have the same moral compass as me…" The agreement didn't require him to do that. It could have been a loss across all the investors, but he's like, "That's the right thing to do."
Nathalie: You do what's right for the long-term. You're not playing a short-term game. I'm not a golfer, but I think you are.
Darin: Yes, I am.
Learn to Preserve Relationships and Stay the Course
Nathalie: It's not nine holes, it's 18. You're doing the whole long-term thing and you have to think long-term. What preserves those relationships is communication. It's easy to communicate good news. What really seals the relationship and the rapport is communicating through the bad stuff, the challenges, and being transparent.
Darin: That's tough.
Nathalie: I don't know if it's human nature but people love to go, "Oh, I'm hiding. I'm just going to not talk about it" or "Now, instead of a monthly report, we'll just do a quarterly one. We're going to avoid talking to investors." That's not the way to handle it.
Darin: What is the way to handle it?
Nathalie: Like you said, transparency, putting your customers first, that business 101 lesson. I'll use a non-apartment example. There was a hurricane in the Gulf and there was a supply disruption. We had an agreement to supply ethanol that goes into gasoline to Texas. So, we trucked it from Oklahoma. We lost money on the logistics, but we delivered and performed on a contract when nobody else was performing. That one action of staying true to an agreement in spite of what, in the industry is a force majeure. It's a weather event, it is a legitimate supply disruption that you can contractually back out of.
But saying, "No, I'm going to go above and beyond and do what my customer needs. If they don't get the ethanol, they can't sell the gasoline," and performing. That reaped so much more business on the back end, it was worth that upfront cost. It wasn't done in a calculated way, but that was the result.
Sponsorship Compensation Structure
Nathalie: On the apartment side, alignment is huge with your partners. You've got to vet out. It's hard when you're new, but you got to vet out that you're on the same page. A big area that people might not see eye to eye is the sponsorship compensation structure, whether it's on the front end, the back end and how it's split. But the worst thing you can do is have that conversation when the cake is baked and you're already raising capital and too far down the line because then it's hard to back out.
I like a compensation structure that is aligned with the investors, putting in at least 10% of the capital raise and being compensated more on the back end. The track record of pretty much every single deal I've done has actually not even had an acquisition fee on the front end. It is typical nowadays, most folks, even first-time syndicators, are doing acquisition fees. I have mixed feelings about those personally. So I don't know that it's necessary to handicap a deal going into it if it's a tight market. You don't know how things are going to unfold to already have that money off the table. I don't want to get in a whole asset acquisition fee discussion.
But another element is, if a deal is not performing and it's right out of the gate, do you assess your asset management fees or do you hold off on them? I've always been in teams where the policy is, "If we're not performing, we're going to hold off. They can accrue on that, but we're not going to draw that cash out of the deal if it's needed."
The Right Thing to Do
Nathalie: You do what's right for the deal. Same thing if the deal is short on capital. Do you do a capital call or basically have investors put in more money or do you lend it to the deal? I have loaned money to deals to bridge that gap because that's the right thing to do.
Darin: A lot of what you were talking about, doing the right thing, handling the problems, communicating difficult situations, that could be applicable to any business. I was in other industries. To your point, I remember having a customer that I hadn't done business with first, but they had an issue. It took me quite a bit of time to work through that issue internally and get it resolved. But that person was so thankful, and that company was so thankful. I didn't do it because I got a ton of business afterwards, but I did. Whether doing the right thing and having that mentality, playing the long game is just a smart approach.
Nathalie: A lot of folks enter the industry thinking it's going to be this easier. Basically, they don't go into it with a business mindset. It helps if you've run a profit and loss, a P&L, for a division in the past or you've ran a small business because that's what it is. You're buying an ongoing concern, a business that's running and then your added value is how you're going to run it better.
Darin: Absolutely. I look at the investor portion as a way to serve. You even talked about it, between the deals that you have investors, and the ones that you don't. You're paying attention to serving those investors and trying to maximize returns for them.
A Fantastic Place For Syndicators
Darin: You monitor their capital so that you're doing right by them and growing their wealth. It's a fantastic place to be as a syndicator, that one, you have an opportunity to grow your wealth. You have the opportunity to help grow the wealth of so many other people too, which is phenomenal.
Where I was going with it before was markets. I know that you've been in different markets. Some of them are hot growth markets like in Texas, some of them are not in hot growth markets. Talk about the differences between being in a growth market versus in a non-growth market.
Nathalie: With the non-growth, cash flows beautifully, but you might not get a pop at the end. For example, our tenant in common deal that's listed, our 120 units, that one's in West Memphis, Arkansas. That's high crime. It's a newer asset. It has been cash flowing beautifully. It's listed for about twice what we paid for it in three years. We got the best of both, although I wasn't expecting the pop on the back end, but that was a market gift more than anything else.
I haven't touched Austin. Austin is really exciting and interesting, same as Phoenix, but so hard to get into and demands perfection. But the hotter markets like DFW and others, you're going to be lucky to eke out that cash flow anymore these days. It's all in speeding up that business plan as fast as you can and getting it either refi’d or sold. The market wasn't forgiving before. I feel like it's even less so. Now, you need to know what you're doing or be around people that know what they're doing.
The Truth About Cash Flow
Darin: It was forgiving up to this point. In terms of having cap rate compression help valuations. You've been in a lot of more deals than I have. Most deals that I see, you have a combo, cash on cash of 6 to 8% projected, and then double your money in three to five years. I'm in a lot of deals, and the reality is that the cash flow isn't always there. Some deals, the cash flow is there, and some deals, it's not. Then, the back end pops. You may end up getting a back-end pop to make up for that. But talk about the differences between initial projections and reality.
Nathalie: There's an advantage to a portfolio approach. Because if you've got a whole bunch of deals that are a certain asset class and in a given market, then you've got a bunch of apples. You're missing some oranges and some bananas. So that's one thing. Being in a lot of deals, that was the idea. Diversification across geographies and a unit size and class so that there would be a distribution on the returns. That helps normalize it around the rate of return that you'd typically expect. So an aggregate is taken all together. I haven't experienced that overall drop in cash flow because some have offset the others, but that drop is there in those primary markets. I mean, DFW, Houston.
Darin: I've had this experience where people come to me and say, "Tell me who the good syndicators are and the bad syndicators." I'm like, "Yes, I'm just not going to do that." That's just my philosophy. But part of it too is, I've had some deals that don't all go in a straight line.
The Best Deals That Come When You Stay the Course
Dadin: I've had some deals where all of a sudden the deal closes and occupancy drops. I'm like, "What's going on with this deal?" Maybe it lasts for three or four months. I'm just watching from the sidelines, but I'm like, "That's probably one of my worst deals."
Then, a year later, it's back up in the mid-90s and it's in a great submarket. I see other deals that are coming to market in that area and I see the per-unit price. I'm like, "That's probably one of my best deals now." So it's hard to, had I told somebody, "This syndicator isn't my best. This deal is my dog," that's all they would remember.
Nathalie: You could have a good syndicator and a bad property, and a great property and a bad syndicator and any combination on that spectrum. Not that you or me are gatekeepers of who gets the green light, who gets the red light, but it's that communication piece. You want to triangulate around a syndicator you're looking to invest with and talk to folks that have invested with them.
It’s not necessarily about the performance of the deal, but the communication, the trajectory, how much they're involved in correcting the course if there's issues. The bad syndicators are the ones that just let the management company run the ship. The management company is not going to do it all for you. You have to be setting the directions, setting the goals and the targets, and then holding them accountable and pivoting if need be. It's a dynamic market. You'll leave a lot of money on the table if you're not keeping up with what comp properties are doing and things like that.
A Network of Syndicators
Darin: That plays to networks also. If you are a syndicator that doesn't have relationships with other syndicators, well, you're just learning it on your own. But if you have a network of other syndicators and all of a sudden you run into an issue and you're like, "Oh, I remember this story. Such and such had a similar issue" and you just get on the phone and call that syndicator, they're like, "Oh, this is how I handled it." And boom! You might end up in a matter of a five-minute phone call having a strategy on how to handle that situation versus having to learn everything on your own.
Nathalie: Not that I almost did it, but on my smaller individual deal, because of the challenges and everything else, I was like, "Okay. The only one that can do it right is going to be me, so I'm just going to take it all over. I'm going to do my own property management company for a 50-unit deal." Don't do that. I didn't. But that's one of those phone calls and pieces of advice when all seems like there's no solution and the only solution is you.
Your time is your most valuable asset. When you start downgrading it in terms of doing tasks, unless you truly have a business case of 1,000 units in a primary market where you can start truly hiring a whole team, don't downgrade what you're spending your time on. The highest and best use for your time in the space is people time, face to face.
Why You Need In-Person Interactions
Nathalie: It takes seven to 10 Zoom calls for the equivalent of a lunch or an in-person meeting. We're not in the post COVID world. It’s taken me a little bit to get back out there. You need to have those in-person interactions and relationships to be able to draw on that network and net worth.
I know it's a cliche that your net worth is your network, but it really is applicable. That tribal knowledge and those connections are also brokers that could have deals for you. They’re sellers that could be listing a deal that you could get a first or last look on, potential investors, potential co-sponsors. There's so many different angles in all of these interactions.
As long as you're selective in terms of the pool of people you seek out, the number of events that attract folks that are active in the space are enough to fill your calendar. I don't want to say quite full-time, but you could be on the road in pretty much doing that. It's worth doing, it's worth taking the time and going to all these different conferences. I don't say okay one over the other. It's not so much who's putting on the event as it is talking to the people that are at the event.
Darin: It's weird because there is something different being in front of somebody than having a Zoom call or a phone call. I don't know. You just get a better connection. You get a better feel for that person whether you want to work with them or not. So conferences and networking. Some people think that, "If I'm paying for this conference or I'm paying for this, they better tell me something really special."
What People Overlook When They Don’t Stay the Course
Darin: But what you're saying is so true and people overlook that. You might go to the conference, and yes, you might learn something. But you might sit next to somebody that you partner with for the next 5, 10 years.
Nathalie: That's the value of the conference. They've attracted and pulled together folks that you want to be talking to and you want to be building a relationship with. You've got to not have a meal alone. Have breakfast with one group of people, have lunch with them next dinner or drinks. Just keep it going. As human nature, you pick up on some things over Zoom, but it's two dimensional.
The currency is trust. You're building trust. It's not cheap, it's earned, and you've got to build that. There's so many things that you pick up on that you don't even realize when you're in-person. That's at least how I work. I have to work at remembering the things that I talked about on a Zoom call versus an in-person. It just sticks better.
Darin: I could picture where we were standing when we first met. When we had our first conversation, I could picture it in my head. First of all, you said a small deal and then later on you say 50 units. For you now, 50 units is small. But for a lot of people, when they're first getting in small, they think of single family or duplexes, fourplexes. 50 units seems like it's out of their league. Talk about why did you do individual deals after you started doing larger syndications?
Buying Your Own Versus Being a Tenant in Common
Nathalie: I had 30 single family rental properties that I self-managed before I got into apartments. I was working and I was expecting our son so I had a lot on the plate. The reason I did it was the concentration of capital. I wanted to have a level of control and a longer-term hold. It was basically a business plan that didn't present itself. I felt it wasn't aligned with syndication where, I don't call it the flip, but you have a four to five-year business plan. And I was looking to defer taxes too. I had a windfall in that particular year from an income perspective so it was about redeploying that. The most efficient way to do it was a deal that I controlled. I went ahead and did that and then I did it again in a TIC.
Darin: If you end up having a large inflow of capital, from your perspective, a better avenue of trying to redeploy that in an efficient and timely manner, is either buying your own deal or partnering with a few other people and doing it as a tenant in common, a TIC.
Nathalie: I wouldn't prioritize that over a syndication. It's when you're on a timeline. In other words, when it's something that has to be done by the end of the year. A lot of the deals that you might pursue as a syndicator or a GP, things get delayed. You've got a lot of moving parts. You move fast alone, but you move further as a team. That is true, but when there's a speed component to the equation, it helps to take out some of the noise.
Overall Time and Financial Return
Nathalie: In terms of your overall return on time and financial return, you're probably better off syndicating a deal. I'm not going to say, "A TIC is…" It's a completely different perspective. I’d rather hold for the long term. I still have 10 out of those 30 single families. It's hard to let them go when literally they keep going up in value every year.
Darin: Everybody said, "Sell all your single family. Go into multifamily." The ones that held on, they're like, "You know what? I'm doing all right."
Nathalie: For me, it had more to do with the business plan on those deals and a longer-term hold.
Darin: You're a businesswoman, you're a go-getter. Talk about your childhood. How did that come about? Does anything come back to your childhood? Did you know that you were going to be this successful?
Nathalie: No. I talked too much apparently in school. Which is funny because I am an introvert. But apparently, in grade school I was written up constantly for talking too much. I had challenges and that's part of how I turned inward. Things that stick out that I should do also as a parent now, we have a three and a six-year-old. My father set up piggy banks for us when we were kids. We barely learned it right. But we had to keep a paper accounting ledger. Like the old accounting where everything that you put in, you deposit the $2. No, it was Swiss francs, but you deposit your francs in there. If you take any out, you put it so you see it accumulating and you see that balance.
How to Stay the Course and Develop a Sense of Responsibility
Nathalie: I remember I had 60 Swiss francs. I'm like, "I'm rich. I can take over the world." But you have that innate sense of the money coming in and out and have a feeling for it. You don't realize how important that is in everyday life, budgeting, running businesses. That seed was planted early and that understanding is there. Part of my DNA to the point where, going to college, I was like, "This is freaking expensive."
I went to a private university in the states compared to a free public polytechnical school in Switzerland. So I was like, "I'm going to go back to Switzerland for a year. Save a year of tuition and take ownership of my education and pay back my family because it's not theirs, it's mine." If it's yours, you own it and you own it the whole way.
That sense of responsibility and developing that, I don't know how it developed over time. That's another important component because you also take responsibility for the things that are going wrong in the deal and everything else. And that's what investors are looking for.
Darin: Did that just happen? I know a lot of kids these days, they get a lot of stuff and they expect a lot of stuff. There's this entitlement feeling versus responsibility and taking ownership. Also, that piggy bank thing, spend less than you make. That works in every business, that's how you become profitable. Early on when you talked about taking risk, at that stage you need to spend less than you make.
Things That Are Temporary
Darin: You need to squirrel away some money so you can take a chance. If every time you get a raise, you're buying the nicer car, the nicer house, then you're going to be in bondage to that debt buying stuff.
Nathalie: Those things are so temporary. They're nice. I'm not saying that you don't want to enjoy life, but we've pivoted to being more about experiences, a lot more travel. Our son just had his sixth birthday. I wish half of what he got was more of an experience with somebody as opposed to a toy. Those are the things that matter and that stick.
Darin: My kids, what they remember is the vacations we went on. They've asked me to buy them a lot of stuff, I get a thank you when they first get it. Three months down the road, they still remember the vacations but they don't really remember paying for that.
Nathalie: You're giving them the gift of your time. Time together.
Darin: Any advice for somebody starting out? There's a lot of fear especially with getting into large-scale real estate investing. How do you get over that fear, and how do you have the mindset to go bigger?
Nathalie: It starts with knowing yourself and what you have to offer. You're not going to make a compelling case or move the needle if you're not clear on that piece when you have conversations with folks. Then it's having conversations as I said earlier, letting people get to know you and you getting to know people. Deals happen through and with other people, it's a people business. If we haven't beaten it to death, relationships, relationships, relationships.
How People Become Successful When They Stay the Course
Darin: You said it before, people come from all different types of industries. I've seen people come from all different capital situations. Some people think, "Oh, you just have to be wealthy to get into it." Well, that's not the case. There's people that, if you have capital, it makes things easier. If you have a big network, that makes things easier. Whatever your value is, you can just keep asking people and telling people. There are people of all different facets, all different age groups, all different business backgrounds that have found a way to become successful. It's a matter of getting out there and telling people. Be truthful.
Nathalie: Yes, where you can add that value to them. The more experienced you are, the more you're short on time. Thursdays for me are busy asset management call days. If somebody else is short on network and net worth, they might have the time. There are things that can be done provided you guys have a meeting of the minds. You have to put everything you can offer out there for people to know about it.
Darin: Onlookers will say that there are no overnight success. But typically, there are sacrifices that were made to lead up to that. What type of sacrifices did you make in order to get to where you are today?
Nathalie: I wasn't an overnight success. It is a long-term business. To me, the sacrifices were made before I got into the space. I was already in a strong financial situation investing in apartments passively, and then it grew from there. But the commitment I made was a regular once, twice a month in-person meet-up.
Commitment Versus Sacrifice
Nathalie: I think not that's a sacrifice, but it was a time commitment and it wasn't convenient with two young kids. It was in the evenings and all that, but it was worth it.
It’s prioritizing that regular interaction with folks because that's the other thing. Whatever you do, you want to do it with a level of regularity that sets the tone. Where it's like, "This is Darin, I know what to expect from him. I know that there's a podcast or that there's a consistency in what you're putting out there." That consistency feeds the trust loop, which is what you're trying to build.
Darin: It sounds like the first thing you did was invest passively. Anybody looking to get in the space, that is a great place to start because you learn by doing that. You see how the syndicator puts the deal together, how they communicate it to investors. You see how they do their monthly communication. When I got into this space, I remember having a bunch of coffee meetings early on with the syndicators. I'm like, "Is this real? Are people really making this money? Is this real?" They were like, "Yes."
But then there's another level to that when all of a sudden you start investing your own money and you start seeing cash flow. Then all of a sudden a deal goes full cycle and you get paid back a great return. That gives you a whole other level of confidence in the asset class and in getting involved. So take that step to go out, to meet-up groups, to meet people, and then try to get into your first passive investment.
The Best of Breed Knows How to Stay the Course
Nathalie: A lot of people start passively to get their feet wet. If you don't have the full amount for the minimum, ask the sponsors. But pick the best of breed or sponsors that you've gotten to know and are interested in seeing behind the curtain. But like Darin said, get an idea of how they do their communication and best practices, because then it's another learning opportunity.
It's like all these broker deals that you see and you get on their email list. Every single one of them is a learning opportunity for underwriting. I get asked that question all the time. "Well, what can I do next to sharpen the sword and get better?" I was like, the material is infinite out there. It's just a matter of going after it.
Darin: Most of these minimums on these large syndication multifamily deals are anywhere from 50,000 to 100,000. Some people just think, "Oh, it's out of my reach." But she just said, "If you like a deal, if you like a syndicator, ask them, 'I've got 25,000. This is my first deal. Can I get in?'." They may say no, but they may say yes. I tell my kids that all the time. If you don't ask for something that you want, you don't take a chance. Yes, they may say no, but what if they say yes?
Nathalie: You've got nothing to lose in asking.
Darin: But some people just see the email that comes out.
A Piece of Advice to Wealthy Older Investors
Nathalie: Don't email. Actually pick up the phone. That's my other piece of advice, especially wealthy, older investors. People get texts and emails all the time. What they don't get is a phone conversation. Sometimes it can be a long one, but that long conversation could be the difference between a relationship with an investor and just another email address that you send things off to that doesn't amount to anything.
Taking the time for in-person and actually picking up the phone, being old school about it makes sense. Particularly with, I don't want to say older, but I think I'm still in the millennial category believe it or not. I don't associate with anything that has to do with millennials. But whether it'd be the commodity trading company or the apartment business, commodity trading uses that instant messenger you always mention. But the difference was made in the phone calls.
Darin: I'm 52. I'm still old school. But in any event, you've accomplished so much. What's the next big stretch goal for you?
Nathalie: It's to keep stretching, looking at deals, underwriting deals in the Texas triangle market. I'm in DFW now. I moved from Houston last year. So underwriting in DFW, Houston, and San Antonio. I've got deals both in DFW and San Antonio, otherwise, selling 120 unit tenant in common deal. I’m looking for a purchase to roll those funds into as a 1031 exchange this year, then we're taking off to Europe for two months.
Darin: For two months?
Nathalie: That is a logistics challenge in and of itself.
What Lies Ahead
Darin: Are you bopping around different places? Are you staying in an Airbnbs?
Nathalie: All of the above? I grew up in Geneva, Switzerland. My dad lives there and has a place that's big enough for us to basically take over, which is what we're going to do. Geneva is central enough that we're going to jump off from there, take the high-speed train to Paris for a week. There's plenty to do in Switzerland itself. We're on the border with France. I love Italy, but we're probably going to stay on the Swiss side, Lugano or something like that.
Darin: How do you do that with having nine deals?
Nathalie: Morning calls. Nothing's going to be in the middle of the night. Most of my calls are morning calls and everything's email. You get an international phone plan.
Darin: But that's the difference. This business does afford you the opportunity to travel, to leverage other people. But it takes time and sacrifices and building those relationships to get there. But now you're taking two months and you're going to Europe with your family. If listeners want to get to know you better, what's the best way for them to do that?
Nathalie: Call or email. You can share with them my phone number. And then my email is my first initial, last name, @gmail.com.
Darin: I really appreciate you coming on the show. Listeners, I hope you enjoyed that one. This girl is a very smart cookie. I hope that we can work together in the future and look forward to seeing you at the next event.
Nathalie: Thanks again for having me on and also for creating this forum for the listeners.
Darin: Thanks Nathalie and listeners. Until next week, signing off.