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James: Hi audience will come to Achieve Wealth Podcast, a podcast where we focus on value add commercial real estate investing. Today we have Devin Elder from San Antonio, to be part of our guests today. Devin Elder is principal of DJE Texas Management Group. Since 2012, DJE has completed more than 200 plus investment transaction and has an ownership stake in more than 1000 units just in multifamily in central Texas. Devin, why not you, tell about yourself, whatever I’ve missed out.
Devin: Hey James, thanks for having me on, appreciate it. There are a lot of details in there, a lot of ups and downs and learning and all kinds of things that go into these deals. As you know, I started out in the single-family world, same as you and I never really left it. I mean, I’ve been doing single family since 2012 and then a few years ago, was able to find a really great partner, a younger guy with a construction background and I was getting busier in multifamily. So I said, rather than just kill off this revenue stream in a single family, I would just bring on a partner, have him run it. And I and obviously my company too and we still run it, so we still do a lot of single-family but me personally, I’m focused about 90% of my time on the multifamily business, it’s what I do today.
James: Okay, good. And you are a native San Antonio, right? Have you lived there for forever?
Devin: Yeah, more or less. I mean, there are some times throughout my life when I didn’t live here, for a few years here and there, but yeah, for the most part, I grew up here. I graduated from the University of Texas in San Antonio, went to high school here, the whole thing and now I’m trying to buy as much of it as I can. And it’s really funny because there are areas in San Antonio, I’m 40 years old, so I’m going, man, for 40 years, this area is not good and now all of a sudden, the hipsters want to live there or whatever. So we’re like buying these houses and selling these houses in areas that are coming up for the first time in my lifetime. It’s really interesting to see, and you know how much it’s changing here. I mean, you’ve got to frost tower downtown, you’ve got the Pearl massive development there, you’ve got cranes in the sky and in downtown San Antonio for the first time in a long time. It’s good to see.
James: Yeah. Yeah. I remember my time when I started in real estate. I’m from Austin, San Antonio. It’s like one to one and a half hour drive. I mean we’ve got northeast one and a half hour drive and it’s crazy on the price difference between Austin and San Antonio and the demographic difference. I remember someone telling me because I was looking at deals in Austin and at that time deals in Austin was like, you know, when I look at single family homes and it was like 100,000, 120, in downtown, it’s busy. And at that time, I had a limited amount of money when I started out, I only had like 50,000. I thought, okay, maybe I can buy two deals here but I want to grow very quickly.
And I went to talk to someone, he said, why not buy in San Antonio? I said, I’m not driving there for one and a half hour then. And then, at that time it hit me like a brick because hey, I’m just being lazy not driving that to buy more deals. I mean, you want success in life, you have to take that drive or drive one and a half hours, nothing. Then I look at the prices in San Antonio and I realized the amount of equity that I can generate. By buying in San Anthony, I can buy like six to eight houses there compared to Austin, which is like two houses. Just because it’s a lot more cash flowing deals in San Antonio, there’s not much of appreciation play with the now things have changed, but it’s just a lot of houses at that point of time, its a much larger city, more cash, was a lot of diversity there and that’s why I started driving to San Antonio almost every day, not every day. I think a lot of times on the weekend, after work, we used to drive to go see houses and start buying houses there. So what’d you like about San Antonio? You have been there and what do you see in San Antonio that
Devin: Yeah, yeah. I mean, I like it. I’ve got a family and it’s a great city to raise a family in and there are lots of family activities from a real estate investment perspective. Historically, we’ve been fairly slow and steady, right? So we didn’t really see a big upset in values in 2008, it just kind of went flat for a little while but historically we haven’t seen a tremendous amount of appreciation either. Just kind of slow and steady is the name of the game. That’s heating up a bit in the last few years and it’s changed, but still relative to markets like Dallas, Austin, San Antonio is still relatively quiet, relatively lower costs and some of these assets, especially like the multifamily stuff so that’s good. I like this market and investing here for just kind of the long haul, just kind of slow and steady increase.
Really, we’ve got some good fundamentals in terms of employment. We’re not wholly dependent on the price of oil or one sector; we’ve got a lot of military here, we’ve got a lot of medical here for sure. San Antonio is trying to get our tech sector ramped up and there are some local entrepreneurs and some of the guys that were a part of Rackspace and left Rackspace, are really doing a great job building technology companies and software companies here. It’s very early stages, but I think in the future that does really well for San Antonio when we can start to grow some more technology companies here. So all of that is I think, trending well for San Antonio. And then just looking at the net positive migration numbers, right? How many people are moving to San Antonio.
We’re still kind of a workforce housing town. Just because people are moving here doesn’t necessarily mean that they’re the super high wage earners or whatever. But it’s a good metric that you look at when a lot more folks are moving here than leaving. And in the space we play in, workforce housing B and C multifamily, those folks are going to continue to need housing and it’s really impossible to build a 1980 200 unit apartment complex, the only stuff that gets built is brand new. So there’s kind of a supply constraint there, which I think plays well with the business model.
James: Got It. So yeah, often to San Antonio corridor, it’s a huge growth corridor up from what I see. I mean, Austin with the high tech and the high cost of living a lot of people are going in between, Austin, Kyle Buda, San Marcos, New Braunfels, and San Antonio So it’s just expanding in a huge way. And if you look at San Antonio, I think that’s the closest city to the border, to Mexico; closest biggest city if I’m not mistaken. And the I35 is considered the NAFTA highway, which is good because that’s a lot of business going between the US and Mexico. So what are you focusing on right now in real estate? Can you tell me your real estate focus now and we can go into the details?
Devin: Yeah, so I mentioned I’ve got the single-family business, which is very active. We do flips and things like that. We’re building some houses, different things like that going on. But really, as I mentioned, my focus is multifamily. And really, we’ve got a really good team for all the parts of the business that happens; underwriting and acquisitions and asset management and those kinds of things. Me, personally, I’m really focused on the equity side and putting together equity for the projects that we buy and then the acquisition side. So really going out there and looking at every deal, underwriting every deal, touring every deal. We’re focused exclusively on San Antonio. I mean, I’ve looked at some stuff. I own a property in Seguin now, which is about 45 minutes outside of San Antonio.
We look at properties in New Braunfels or San Marcus. I don’t get up to Austin just because I haven’t seen how stuff is going to pencil on the acquisition side up there. But also we’re really busy in San Antonio. I’m looking at as much stuff right now as I’m happy to be looking at and touring and underwriting just by focusing in this market. So really we’re looking for stuff that’s over 100 units, 150 plus units, that type of thing that we can buy and do some kind of capital improvements; four, five, six, $7,000 a door of capital improvements. And that kind of run the gamut from just deferred maintenance to sprucing up the outside of a property. Maybe there’s a rebrand or maybe there’s kind of a management or operations issue, we can go in and fix. Something that we can go in and create some kind of value. Because at the end of the day, it’s all investor return driven. So when we look at deals really like the one thing I look at in our underwriting, it’s what’s the equity multiple over our whole period, you know, are we gonna be able to double people’s money in five years? If not, then maybe that’s something that we pass on. And then if you do that, if you look at the equity multiple of around two, then your IRR is typically going to be high teens and your cash on cash probably going to be somewhere in the seven to 10 range over the whole period. So the cash on cash numbers kind of work themselves out and the IRR, we’re really just looking to see is there a way to add some value cut expenses, improve our rental income by making some improvements and so forth and just hold onto these things. We like a lot of sponsors, underwrite typically five-year-olds and just go in and execute the improvements over the first year or 18 months and then just kind of hang on to the properties and try and grow that portfolio.
James: Awesome. So what’s your favorite value add strategy? I mean, I think you have given a lot of the value add deals, right? Why not you describe some of the few deep value-add deals that you guys have time done and we can go into a bit more details into that.
Devin: Yeah, yeah. There’s a property right now that we’re actually just kind of coming out of our cycle on, a pretty heavy lift and there was a lot of section eight in that property. And then there was also some weird units where they were calling them three bedrooms and four bedrooms, but it was really two one bedrooms on top of each other and they put a spiral staircase in between. And so that was kind of a weird deal where the property was originally built as a much larger property so we went and changed it back to the larger property, basically adding units and then changing it from an all bills paid property to none of the bills being paid by the property. And so that was a pretty drastic repositioning of that property where that’s tough to do and there are a lot of moving parts. It’s not like just going in and making some little improvements, it was like completely re-characterizing this property as a market property versus like a lot of sectioning that was in there.
So that part was definitely a challenge. Fortunately, we budgeted well for it upfront. A property like that you want to leave a nice fat contingency number in the budget because you can go through and get all your inspections done but we know in real estate, especially old stuff built in the 70s whatever it is, that there’s just going to be stuff that comes up there. So you want to be well capitalized. Fortunately, I’ve been in construction for a lot of years on these single-family houses, I’ve seen absolutely everything you could imagine, where we just spent $100,000 renovating one house. So it’s like we’ve seen and done everything and so none of this stuff really surprises me. It’s just that on the apartments you gotta watch out for things like $100,000 plumbing bill that could come up if it’s a really old property or different things where the rehab numbers just get bigger.
But yeah, as far as value-add strategies, I mean on that particular property there was a lot to do. The stuff we’re looking at, it seems like lately more now it’s really just about kind of doing some interior updates where you’re putting in kind of the classic vinyl plank and two-tone paint and new fixtures and then doing what you have to do to the exterior. Or sometimes that’s a rebrand. My favorite exterior thing is the solar screens because it might be like 10,000 bucks for a whole property and it like completely changed the look of the property. So I always want to put those on if a property doesn’t already have them.
James: Yeah, that’s interesting. I mean, I love the solar screen is just I’ve tried to kind of put it in my properties but haven’t gotten a chance yet, but I know the money you spend, it really gives you the exterior look that is very nice, a very clean look, rather a very sharp look of the property.
Devin: Yeah, and then it hides the blinds and it hides all kind of covers a multitude of sins. So I like doing that where possible, it has a nice impact. And I think like aesthetically it has one of the biggest bangs for the buck. You know, if you try to go paint a whole building that’s going to be like ridiculously expensive. And you know how much you can on that but it’s tough sometimes.
James: Correct. So let’s go back to that. A property where you have to do a country Gresham change, right? Because that’s a major change, right? And changing from all bills to bills paid, that’s another major change. And are you eliminating section eight people and getting into a conventional market as well?
James: Okay. That’s another big chase. So you’re doing a lot of changes in that deal. So how long do you expect to turn around to stabilization?
Devin: Well, it took about a year to get it stabilized and we’re there now, so that’s changing the bills from all bills paid to nothing. And it was interesting because we didn’t really factor in or underwrite like a big huge rent bump. Usually, sometimes you say, hey, we want to do $4,000 on the inside and that’s going to be $100 rent premium and so I think that is like $1,200 a year divided by 4,000, you’re getting a 30% ROI on your interior upgrade if you spend 4,000 and you get $100 rent from rent bump. That’s kind of like a typical underwriting ROI exercise that you would do. On this property, we didn’t see it on really the rent bumps. In fact, the rents didn’t really change a whole lot. But we’re taking about, something like $200,000 of utility expense off so it kind of almost doesn’t matter whether you’re raising rents are lowering expenses, it all drops to the NOI [16:09inaudible}
James: Correct. So you go into that building, let’s say the broker takes you to the unit and how do you identify the opportunity?
Devin: Yes. So the opportunity on the utilities was just kind of at the first pass of the underwriting saying, hey, based on the location of the property and what we think we can spend and improve it and rebrand it that we can make this a market property. And then the opportunity to convert some units were actually on the first two or after like we’d done some underwriting and looked at it, and then we started seeing all these funky staircases. And first of all, they just look dangerous, right? I mean you don’t see spiral staircases in properties and probably for a reason. And so once we figured out the original layout of the property and said, you know what, we‘re just going to take these out, add some units, it’s going to be safer. We’re going to change the unit mix because there’ll be more one bedrooms on the property, but we’re okay with that. And then a kind of underwrote that and said, hey, we’ve got a pretty low basis now if we’re looking at it as 130 unit property and we’re picking it up at this price then our basis is pretty low, we feel pretty good about going in and making those changes. But the conversion opportunity, we didn’t discover it till we actually did some walk-throughs.
James: So what about the parking lots and parking spots because that can be a problem with the city, right? Because usually, they go by unit mix.
Devin: Yeah, for sure. Luckily the parking ratio was really very good, to begin with, because the property had originally been built as that higher unit count. So it wasn’t like we were building new units on dirt and we’re running in parking constraints, we’re actually just kind of returning the property to its original setup. And so the parking ratio still is pretty good even with all those units.
James: Okay. So the guy who you bought it from, he may be the one who had converted by making like, two one-bedrooms into two by twos, I guess? He may have done that.
Devin: They had it for five or six years. I don’t think it was them, it was some previous owner. Who knows how many times it’s changed hands. I guess I could go look it all up, but it definitely wasn’t the donor we bought from, who knows how long it had been in that state.
James: Okay. Okay. So that’s very interesting. So what about on the interior side, is there are any unique value add strategy that you really liked to do that you think is the biggest bang for the buck?
Devin: Yeah. You know, you start to tour all these apartment units and see everything and it’s like, man, do they start to all look the same, right? You got vinyl planks, two-tone paint, gray walls, updated fixtures and it’s all kinda the same thing, resurfacing countertops so that’s all kind of the same. One of my favorite things is those little metal pull bars, you can get them for like a dollar on Amazon. You order them a thousand at a time or whatever. Sometimes we’ll re-phase cabinets, but usually, we’ll just paint cabinets and instead of the little knob pulls, we’ll do the pull bars; it costs slightly more but in the scheme of things, we’re talking about a dollar per bar instead of maybe a quarter per knob and it just gives it a nice look. I really liked that look and it’s really inexpensive. Another thing that we’re doing in a property that we just bought is this stone back-splash and it basically just goes right on. So it’s 3D, three dimensional, it looks really good, it looks expensive but it actually doesn’t really cost us that much and we do it all in house. We use third-party property management, but the property just bought the stone cutter and they can just go in there and cut it and put it right on and it looks really sharp and that’s a nice improvement versus like actually going in and putting in subway tile or something that’s going to be a lot more costly.
James: Interesting. I’ve seen like where it comes in pieces, but are you talking about the whole thing coming together?
Devin: It comes in the 12 by 12 pieces, but it basically just sticks right on. So all they have to do is make the cuts.
James: Got it. Interesting, I need to check that out.
Devin: And I’ve seen like the mosaic tile stick on stuff, but I don’t think that stuff’s going to hold up for a while, this is more like stone and it goes right on.
James: Do you remember what’s the name of it?
Devin: I don’t, I could send it to you, but I don’t remember off the top of my head.
James: And how much does that cost to do it?
Devin: I think it should be costing us $150 to put in.
James: Yeah, that’s really cheap, right? Just put it in at 150. A lot of people like the back-splash. And that’s very interesting that we can put that in. And I know about the pull ball of the cabinet. That looks really nice as well.
Devin: Yeah, it’s a nice easy upgrade.
James: Absolutely. Yeah. Got it. Got it. Got it. So is there any deal that you thought was not a good deal and you walked away and later you found out it’s a good deal? And can you describe what you could have done to catch that opportunity?
Devin: You know, I feel that way all the time. You know, I underwrite a deal and then I maybe offer on it and the offer wasn’t high enough and we lose the deal. And then I see a friend of mine buy it or something and I’m going, well, so they saw something in it, you know, I couldn’t get it to work, but what did they see in it? Or like there was another deal that I was like way low on our offer price, I was like $2 million low on our offer price, which I was like, that’s as high as I can get it to underwrite to. And then, I see it come out on crowd street and some firm California bought it and they were like super aggressive on their numbers.
And I’m going, man, this is a big firm, they have 5,000 units, I have to assume they know what they’re doing and they’re being really aggressive. And so, there’s not a deal that I can point to, specifically, and say, oh, that was the one that got away because if we lose a deal, I just move on. I mean, we’re looking at so many deals and touring so many deals that I don’t really worry about it if we lose a deal, I mean, that’s just the name of the game you’re going to lose. My philosophy is you’re going to lose most of the deals and that’s okay. That’s just the game. But I do see stuff that we look at and then somebody else buys it and sometimes I scratch my head and I wonder how they’re making the numbers work.
So, a lot of that I think, unfortunately, is that we’ve just been in kind of this market where stuff’s been appreciating. I mean, we see that a lot on the single family. Like we buy a project and then we rehab it and maybe we go over on the rehab budget, but in the six months it took us to buy to sell, there’s been appreciation and it’s like, wow, that’s really good when it’s working for you, but it’s not always going to go in that direction. So I think we’ve seen a lot of that in multifamily and you have to be very cautious right now in this stage of how long we’ve seen asset prices increasing and just not assume that that’s going to kind of continue forever.
James: Right. Yeah. So let’s go to a bit more personal side. What do you think is your top three things that you have inside you that is your secret sauce in becoming a success in the business?
Devin: Yeah, I think early on, it was the absolute decision to make this a success. And by decision, you may have heard that the root word of ‘decide’ is to cut off, right? So it means to cut off any other alternatives. And I think looking back, it’s easy to just say, oh yeah, I just made that decision but it’s very extremely difficult in the beginning, getting started without really any money to get started or any knowledge or experience. It’s not like my family has done this or I learned this from somebody that was close to me, it was really just going out and figuring it out.
So making the decision early on that this was going to be what I did and it was going to be a success and not being a dabbler. A lot of people want to kind of just try things out and I don’t think that’s the recipe for success in anything. Like it’s more like a marriage. Like you commit to it forever. And so I committed to this early on and put everything I had into it in terms of my resources and my money and everything in it and it had to work right? And when it has to work, I think you find a way to make it work. So that the first one. And kind of the most important thing was just being very decisive about this being what I was going to end…..
James: When did you decide, was it when you were in school or when you’re doing your W2 job?
Devin: Yeah. While I was doing my W2 job, I, I did my first couple of houses and I decided because I really wanted to get out of my W2 job and I didn’t even know that real estate was going to be it, I just didn’t want to work for somebody forever.
James: And do you have a triggering point that at that point where you decided, I’m going to do this full time?
Devin: Yeah. I was fortunate in my first career I worked at a really fantastic company and I had a great couple of years. And then after awhile, I started to get a little bit restless and I thought maybe there are better opportunities. And I started kind of moving to different companies, trying to find the next promotion or whatever. And then, I just kind of discovered after a few years of doing that, that it was the same everywhere I went, every company, it was just the same stuff I had to deal with. And somewhere along the lines I just really kind of discovered that I wasn’t going to be happy unless I was an entrepreneur unless I was calling my own shots. So that was really the catalyst for me to say, I have to get out of here. My older brother is an entrepreneur, he has been his whole life and I have always appreciated the level of freedom he had, even if other things were crazy. Because as an entrepreneur, there’s definitely some crazy stuff, like you have to be on board for that, but I’m definitely on board for, I think I’m just cut out to be an entrepreneur and now that I am an entrepreneur, I’m much happier. So it was finding that vehicle, I didn’t know that it was going to be real estate, but I knew first I wanted to be an entrepreneur and then I figured out that real estate was going to be it.
James: Any other thing that you think is your secret sauce?
Devin: I think, finding people that are really good at things and giving them tasks. Because as an entrepreneur, you wear so many hats. It’s really important for me to, once I figured out one little process that I give it to somebody else, right? Whether that’s like editing my podcast or doing my underwriting, it’s like I can do all these things but as a CEO of a company, I shouldn’t be doing any of those, I should only be doing a handful of things. And I think it’s very tempting for people to spend hours, let’s say, underwriting a deal or pulling apart a financial statement on a T12 of a property. It’s like, well, you can find really good people to do that, probably better than you, and then you can focus your time on other things.
So I’m very big on a dollar per hour activity and I keep spreadsheets and everything to track all this stuff of what are the highest dollar per hour activity, things that I can do and I need to find somebody else to handle all the other activities.
James: Awesome. Awesome. Is there any proud moment in your life where you think you are really proud of in real estate ventures?
Devin: Yeah, I mean, quitting my day job was a big one. I mean, I was very, very proud of that.
James: At the point of quitting or after a few years after quitting?
Devin: No. Definitely just getting to the point where I had enough cash flow and everything to be able to quit my job. That was a very big step. I’m very proud of some of the renovation work we’ve done and this is like single-family and multifamily, but there are hundreds of properties in San Antonio that are like nice properties now because of the work we did, you know? And so we’re not buying nice looking properties most of the time, we’re buying properties and spending 1 million bucks on making them nicer. And so that’s pretty cool to be able to do that. And that’s having an impact, even a small impact, on the city that I live in and I love that.
And then now as I’ve been in business for a while, giving other people some opportunities, you know, whether that’s some of the people that work in my business, giving them an opportunity through the company and giving investors an opportunity. So many of my investors you talked to, they didn’t know they could put money into a deal like this and make this great return and not have to do any work. And it’s like, people just don’t even know that it’s an option, you know? And so to be able to have people participate in that is really very rewarding. So I’m very proud of like the renovation work that we’ve done and we’ve raised and return millions of dollars of capital at this point and that it feels very good to be like a good steward of other people’s money, I’m very, very proud of that piece, probably more than anything.
James: Absolutely. I think it’s very fulfilling taking a distressed property and changing it. I mean we did a lot of single-family and now we’re doing multifamily, but we remember one of the flips that we did, we bought like 42,000 if I remember correctly, and sold it for 140. But we also put like 40 to 50,000 into it but that was a complete change in the house and until now I can remember that house and how it was when we left it. And even when you’re old, I’m sure I can drive by that place and say, you know, we flipped that house to look as nice as right now. So, yeah, it’s very fulfilling.
Devin: Yeah, it is. I was driving around the other day and I was in this part of town called Beacon Hill, which is like this big up and coming area of San Antonio is kind of on a little bit northwest of downtown. And I don’t remember what I was doing over there, I’d met somebody for lunch or something, but I said I’m going to drive down the street where I flipped a house and then I just drove by it, it was like two years later, oh, the house looks good. And I said, you know what, I flipped another one on the other street. And so I drove like four or five houses in that area that I flipped at some point over the last couple years. I said, hey, we did a lot of houses and you spent a lot of time and money and energy over here and it’s cool.
James: Yeah. It gives you a lot of happiness inside you. I mean, what are the habits that you think that you have mastered or want to master that you think makes you a very successful entrepreneur?
Devin: It’s definitely systems. So I’m very naturally inclined towards putting together systems. So I like to figure out what a process is and cut it down, anything; whether it’s the acquisition process on multifamily or any part of the business.
I like to figure it out, boil it down into stages and then within each stage, go down the steps. And then I like to really document the steps and to give them to other people. And that’s really the key for me is I take a process, really spend time breaking it apart and then figure out every single little minute step. I have like a standard for creating training and that is I want to be able to take somebody who’s walking down the street and pull them into the office, and if they can read and write, they’ll be able to do the task the way that I’m training them, right? So very simple. And I think about McDonald’s like as a good example, not that the food is anything great, but the systems are just tremendous, right?
Teenagers run McDonald’s, right? It’s a tremendously successful enterprise but the systems are so important. So I’m a big systems guy and that’s kind of the thing that I’m always striving to do. Is anytime I’m doing something, I go, can I systematize this and automate this and give this to somebody else? And so, that’s something that I’m focused on all the time. Now there are some things you can’t, so like broker relationships, face to face time, things like that. Like there’s no automating those things and that’s okay but I want to automate and systematize everything else so that I spend my time, my very short time and energy on the most important things. So definitely just being disciplined about creating those systems and it’s difficult but if you can be patient and create one little system or process and automate it and you extrapolate that towards the future of how many times this little task that takes me five minutes, if it’s off my plate for the next thousand days, how much time is that going to save me? So I’m always kind of just trying to fine tune that and really segment all the pieces of the business and get them into the hands of people that are the right fit for whatever task or job it is.
James: Yeah. That’s something that I’m learning to try to do as well. I mean, my wife and I, we are such a control freak in our business and we want to make everything perfect but it’s basically impacting our lives. Because now we have to try to do everything. So as we grow big, right now we have like 30 employees. We recently hired people on the corporate side to help us and it is becoming much better now, but still, it does just take time to really give up that particular work to someone else. And the way to do it is to create systems and process and manuals and all that. So we are actually learning how to do that right now. So it is a very hard thing to do, especially when you grow from small to big. Unlike you go into a big organization, you already know everything is set up but now you’re going from doing it yourself, but now you’re to delegate to someone else and the understanding that the other person may not do it as how well you can do. And you have to understand that and live with it.
Devin: Yeah, it’s a very tricky thing and that’s business. It’s tricky because you are an equity owner and you would do anything for the business. And then you’ve got somebody at $12 an hour that’s just not going to, you know, if you gave them half the company, they’d work as hard as you but you’re not giving them half the company. You can’t give everybody half of the company equity that’s not how it works. So the way I try to approach that is just creating really, really clear training. One of my assistants is overseas and it was very frustrating for me at first to work with her because I couldn’t just like say, here’s the problem, just deal with it. She just didn’t have that skill sets and just fix it. But I started really creating very specific training on step by step, by step by step. And not only did that make it easier for me to understand the process, but it made it easier for her to understand and everybody was happier.
And so, we use something that a friend of mine turned me onto, it’s called Loom and it’s a browser extension and for recording little videos. And so there are hundreds of videos in my organization for how to do everything. And so that allows me to kind of give it away and if I sign a task to somebody or there’s an automated task, it also includes a link to the training. So if they haven’t done that task in a month, they get the task but Hey, there’s also a link to a three-minute training, which anybody could learn for that little task.
And over time, instead of like building a operations manual, which to sit down and write would be murder, right? It would just be awful to sit down and write the whole thing. I basically have built the operations manual one tiny task at a time and put it all in a spreadsheet that’s by the system, right? Whether it’s the accounting system or the marketing system, whatever it is. And so there’s this whole library of content basically to how to do just about anything in the business. And so it’s been a hard process getting all that going. But, again, the freedom that comes from–it’s still me dictating, this is exactly how I want this thing done; I set it up and then transferred over to somebody else, one little task at a time and just have transferred hundreds of tasks over a few years of doing that.
But yes, it’s difficult because nobody’s going to do it as well as an owner or cares as much as an owner, but there are just inherent limits there.
James: Yeah, absolutely. Absolutely. Let’s go to another one more topic. Let’s say a Newbie who wants to walk your path and be very successful in real estate, single family flips and now into multifamily; what are the 3 to 5 advice that you would give them to get started in this hot market?
Devin: Yeah, it’s definitely a hot market. I would say, the number one thing is don’t try to do this yourself. Like all yourself, there’s too much, right? I mean, this is a business like any other business and you wouldn’t try to just go open up a dry cleaner and say, hey, I have zero experience in this business, but I’m going to go open a dry cleaner and it’s going to make money, right? There are too many things you don’t know.
So like in multifamily, the underwriting, the broker relationships, raising capital, asset management, renovations, all those things are like big topics, where there are lots of variables and you’re not just going to learn that stuff overnight. So I think somebody who wants to get in, don’t try to do it yourself, but you can partner with somebody that’s done it and try to add value to them and be a part of a larger deal. That’s kind of from where I sit now, what I wish I would’ve known kind of earlier on, that you can partner with somebody on a bigger deal in various ways. You’ve got to be able to add some kind of value to somebody that’s further down the path. And if you can do that, then you can get on a larger deal, but you don’t have all the responsibility on that project and then you can get in that world and start learning through doing. Because I think we really do learn through doing. And so, that’s kind of what I would recommend is, don’t assume you have to go out and do it all yourself because I think that’s just a recipe for frustration and potentially, for disaster.
James: Awesome. Awesome. If there any funny stories from residents or tenants that you want to share with the audience?
Devin: There are so many.
James: Choose the funniest one.
Devin: Ah, this is sad. Sad, but funny. So we’re doing this project that was like, oh, crazy turnaround project, right? Like 15,000 a door renovation. Crazy. So there’s something called a writ of possession and so when you evict somebody, you go to court. And I was actually doing this on this property. I use third-party management now, so I don’t go to court and evict people, but I’ve done that over the years, I’ve done all of it. So we evicted this guy for nonpayment and that’s just how it goes, you don’t pay, you can’t stay, it’s not a charity we’re running.
James: This is Texas and it’s landlord friendly.
Devin: Very landlord friendly. So anyway, we go, we evict this guy, he doesn’t move out, whatever and he’s got stories. And so finally we get to sink all the writ of possession we filed, the bear county sheriff comes out and they stand outside for an hour. They don’t touch anything, but they just stand there to make sure nothing like violent happens. And so we get the crew in and we start moving this guy’s stuff. So they opened the door and the guy who’d been like completely combative and everything, he opens the door, the sheriff is there, he’s got a neck brace on and he’s like, Oh man, oh he can’t, he’s wearing this neck brace. And I’m like, I’ve never seen this guy in a neck brace. Right? So the guys move everything out on the lawn and as soon as the sheriff leaves, he walks out on the steps, pulls the neck brace off, starts smoking a cigarette, right? The neck brace was totally just a prop for sympathy. Who carries a neck brace around just to have it for sympathy? And I was like, ah, man!
There’s a lot of stories like that. Like, we’re buying properties that are, a lot of times, beat up but at the end of the day, you can’t have any business’ product for free if you’re living somewhere, you need to pay for it and that’s, how it goes. So a lot of stuff like that for sure.
James: Interesting. Interesting. Yeah. I think that’s it, Devin. So why don’t you tell about yourself and how can the audience reach you, in case they want to reach you and where to find you best.
Devin: Yeah. Yeah. So we’ve got all kinds of stuff online and content and stuff like that out there. The easiest way is through the main company website, which is djetexas.com. So that’s Delta, Juliet, Echo, texas.com. And if you hit the website, you’ll see links to everything else and in a way to if you want to schedule a 15 minute call with me and learn about this stuff or you want to take the next step in this career for yourself, whatever it is, I’m happy to chat with people. So that’d be the best way is the website.
James: Awesome. Thank you for joining us today, Devin, and for all the audience, thanks for joining us. You can always join us into our Facebook group. It’s called Multifamily Investor’s Group. It’s like almost 700 people right now, within one month so join us. And there’s a lot of very meaningful discussion happening about multifamily, and we’ll talk about other business issues as well over there, but join us today and thanks for joining today for the podcast.
Devin: Thanks, James.
James: Bye Bye.