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Monte Carlo

monte

This entry is a COUPLE DAYS TOO LATE. Scratch that stop apologizing! I will get great at that I swear!

As I was alone in Monaco after my friend left, I realized my time is shortening.  We only had two full days total and needed four,  I would say. We went to different regions of the south of France. He shared a special town that his family loves to visit-Menton, France. Went shopping for herbs, oils, enjoyed the wine, enjoyed the sun and talked about current legal and family battles we are both facing. We both need support. Life is hard enough-doing it alone makes it worse. I realized while sitting there In Monte Carlo-There are very few people around me to whom I REALLY should devote my time.  Those who open up, those who are honest, those who always keep their word.

This Friend always has, even when I often didn’t return the favor, because I wasn’t ready to be that vulnerable…….and I thought, as he left, Here’s the deal. As I get older, I feel worse when I drink a lot. When I drink a lot, I forget and time passes way too fast. I’ve had friends die whom I cared about, life situations change where it’s not all about fun anymore, and I want to create rich memories. I have decided to drink less and focus on who is around me. Those who have my back so I won’t need to “drink the time away”.

I genuinely enjoy our conversation and I can be completely open about what I want, who I  am, where I’m going, and what I need.  Zero judgment comes from those who truly love us.

Turning 30 and having these thoughts I don’t think come as a coincidence. For how I was raised, I feel I have done a great job at enjoying places, people, and creating memories instead of buying stuff.

But now, just as in my personal declaration, I need to focus on giving love to those who TRULY matter.  Focus on the people aspect of everything I do. Work, love, friends, fitness, faith and family.  I want to keep them all in balance but I am changing the order of these things. It will now read friends, love, fitness, work, family, and faith. This is the order I am currently comfortable with, as I am still growing, evolving, changing, learning. I am not perfect and that is ok. As long as I’m headed in the direction of my purpose (supported by those around me) my life will be ok.

My purpose, I feel, is to show others how to create independence from toxic codependent situations. First is to help them identify the codependency, because that is the hardest thing (from personal experience) to admit, that there is a problem with me/you.

I have been there-but instead of sweeping it under the rug and pretending like everything is perfect, I had to dig in and change me. Counseling has been life changing, Sticking with it is even harder through the ups and downs. This change is now my number one priority. I have to do self-work. Even while in Spain, I’ve heard several times to try meditation in the morning to battle all the flying issues always muddying up my thinking. I need to stay on track and on purpose to get there.  Just jump in not dance around it, finding alternative ways to get there slowing down progress.  It’s so easy to get off track.

I have caught myself exhausting myself with people who want to suck information from me via Text, Facebook, group message, skype, Instagram, email, voicemail, snail mail, in person at networking events and more. That knowledge I learned by reading, paying. for seminars, meeting with operators, touring properties, buying properties, relationships with mentors and much more.  It’s taken time and money and these people want to rob me of it with NOTHING in return.

I have to learn to demand the same conscious of someone’s time that I give to my mentors or walk.   I only have so much time and energy- and the way it’s going I will have none left for my workouts and loved ones. For my mentors, I decide to only contact them with questions if it’s a desperate situation (I’m under contract and they know).  I also send all questions in one email, if possible, when not under contract. I send gifts or try to bring back what they like when I travel so they know I’m thinking of them.

If you’re curious what a GOOD, APPROPRIATE addition is to my active team for partnership opportunities (which GIVES to me) – I’ll spell it out. I need help in these areas-

  1. Partner who brings money (personally and has raised before)
  2. Partner who has the skills to workout or negotiate the deal
  3. Partner who can bring mentorship or expertise
  4. Partner who can bring a track record
  5. Partner who can bring credibility
  6. Partner who can be sponsor or be a loan guarantor
  7. Partner who brings the deal

So that I can focus on my goals to be closer to family and friends, I need to create more time. I cannot do this if people keep trying to shortcut learning on their own time, skip networking and conferences and take my time to learn instead. I have been letting people take for too long. No more.   I am allowing myself to be selfish and not feel bad any longer. I will only give to those who give in exchange.

It’s not about a fair trade, but being protective of my time and energy. No one will protect it but me.

Thank you Monaco for the lesson- it was perfect timing.

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Barcelona

barcelona

Journaling from a beautiful place today.

For the first time in months, I find myself being able to ignore phone calls or wake up without an elevated heart rate.  The deals I have coming are no longer stressful. There’s a possibility of deals in Dallas, Longview, Beaumont, Fort Worth, and Phoenix.  But, now that I have teams I’m working with, I’m not as stressed.

My job is to find deals and money. Whichever I can’t do, my teammates will do. They are looking for deals while I’m on vacation, and as soon as I get back, I feel like there will be a good deal. My job on this is to raise capital as much as soon as possible. Even though I want to succeed badly and I could search every day, I  am burned out and I  need to enjoy taking a vacation. Once I return, I  will be fully healed and able to be a million times more effective.

I have 10-15 home listings coming as soon as I return,  I have partnered with a very professional home flipping company which does large scale home flipping. I am going to need to hire two agents as soon as possible to help list and show these homes. So, if you are reading this and you’re a new agent, you’re a part time agent, or you have a friend who is about to graduate, I am happy to sponsor them. As a real estate broker, I do not take a commission cut, just a fee every month.

So now that these things are taken care of and lead generation/deal flow for apartments should be running well when I return, I have to focus on healing.  Mentally, emotionally, energetically, physically, socially, and all the other areas that get so out of balance when I work as hard as I do.

Mentally healing for me means reading.  Not just for business, but reading things that help me strengthen places where I am weak. Negotiating is a good example.  I’m reading Never Split The Difference by Chris Voss.  I am also journaling on an every-other day basis which for me is a lot.  I  usually only journal on Wednesday.

Socially, healing for me means meeting new people, learning from experiences in new places, and exploring new scenes I  could never dream up. This helps rejuvenate my imagination and gets the creative juices flowing.

Energetically, healing for me means being protective of my energy. At home, I give it all away,  Calls, lunches, appointments, property tours, showings, emails, texts, instagram, voicemails, FaceTime, and all the other stuff.  Here, I  will only let myself check instagram a couple times a day and post on facebook, but all the other shit, I’m gonna let it go. I am going to nap, sleep in, chill on the beach, do the sauna, stretch, be quiet, allow myself to get rested.

Emotional healing for me means anything that I feel I will allow myself to fully heal. Happiness, sadness, joy, anger, contentment, laziness, excitement, gratefulness, anything that I feel I  am allowed since I’m not in a rush.

Physically healing for me is great. I  love to workout and be active. I am now allowing myself 1-2 hours a day to workout or longer if I  feel like it. I always am rushing and being interrupted by a phone call, text message or something similar with urgency. Everyone thinks everything is urgent. But unless a deal is under contract it really isn’t.

I find myself always in an “on” mode, looking for the next thing to tackle. It’s time to give my body what it needs, sweat, stretch, sleep, massage, whatever I  feel like doing.

I’m going to eat incredibly clean while here, and I know that, in combination with no stress, I will be able to keep low weight even while drinking.

Spiritually, I also lack growth. This is an area that where I’m a little lost.  It’s an area that isn’t heavily dependent on thought or rational facts. I tend to feel comfortable in the logical space of my brain. When I let go and feel life, it opens me up to spiritual experiences.

I’m hoping that, with my time in Spain, I am able to feel some new energy for the first time and open my mind up.

Growth is key for me and is something that keeps me going. I always expect those who work with me to be open to growth and putting their most honest self into everything they do. All I can do is be a living breathing example of what I  expect others to be like.

If you’re interested in working with our real estate brokerage or on our apartment investments team, just shoot us an email admin@theapartmentqueen.com.

We are a fast-growing company and are in need of help for support.

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How to make money in multifamily!

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How does Multifamily make money?

One thing I want to make sure to do, is to educate everybody about what I do. I feel like it’s a mystery to most people how multi-family investments make money. There are four different sources of returns.

1-Tax benefits
There are many, and I will go ahead and say I’m not a attorney or CPA but there’s a couple of advantages you get being involved in a multi family project.

Depreciation:

Tax law lets any apartment owner depreciate the building’s value over a 27 1/2 year time span. You can deduct 1/27.5th (3.64%) of the value from your current income each year. This eliminates some or all of your income would you have to pay taxes on in the current year.

Bonus depreciation
This can be used for certain items like cabinets, appliances, and items that are not the core structure of the property. A cost segregation engineer would be able to run a study which identifies these items and their value.

As a passive investor, passive income tax advantages are a great, great thing about in multifamily investing. Any income that is real estate related is taxed at passive tax rates and not subject to social security taxes.

Any appreciation is taxed at capital gain tax rates, which are lower than income tax rates.

2-principal paydown
What’s really cool is income or cash flow which reduces the loan balance.  This usually gives us 2 to 4% annual return.

3-cash return
Otherwise called mailbox money. This is the money you get from your multi family investments. To understand where this comes from, look at gross income for the property minus operating expenses, capital reserves, mortgage principal and interest, asset and management fees.  This number gives you your return or cash flow.

4-appreciation
And I don’t mean the kind of appreciation for someone sends you love letters but this is the biggest way to create long-term wealth in multifamily investing.  There is the market appreciation from population increase, job growth, demand versus supply, and there is forced appreciation caused by the active management team to increase income and decrease expenses.

Here’s a very simple example-

We own a 100 unit apartment complex with a 6% cap rate.  Each year, we increase rents by $25 per apartment (25x4x100=10,000). At the end of four years, the net operating income increases the value of the property by $2 million!

Are you as sold on multi family investing as I am?

If you were a passive investor in this deal who owned 10% of the company, you would receive 10% of the net proceeds from the increase of the value at sale!!!

If you’re interested in more information about upcoming multi family investment project opportunities, email me at

admin@theapartmentqueen.com

Or book a call with me calendy.com/Kaylee-6

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Syndicating Deals, the how?

syndication

SYNDICATION

What is it and what do our investors get?
A real estate syndicate is a group of investors who combine their capital to buy a property. Together, individuals and companies have more buying power than on their own. Syndicates are commonly structured as limited liability companies (“LLCs”). This special purpose entity is the method by which investors purchase property, like apartment complexes we purchase at The Apartment Queen.

The practice of teaming up to acquire real estate goes back hundreds of years,  It used to be that real estate entrepreneurs or professionals (now known as “sponsors”) could advertise their investment ideas to anyone.  Today, this is “public solicitation”.  The Securities Act of 1933 required all new securities offerings to be registered with the Securities Exchange Commission (“SEC’) to provide oversight and protect investors from fraud.   Now, the problem is that registering each offering and jumping through the necessary regulatory hoops made syndication less efficient. Although this effectively stopped public solicitation, private syndication continued. This is what we do at The Apartment Queen using a Regulation D 506B offering. This change in the law forced syndicators to gather capital from a private “black book” of money sources, These, for some, often included members of the country club, family trusts,  working professionals, and more. Those real estate syndications were put together quietly and relied heavily on personal connections or licensed fund brokers.

The SEC released “safe harbor” rules that allowed for sponsors to avoid registration under certain conditions. The safe harbors still do not allow for public solicitation. Sponsors had two choices: 1.) raise money without public solicitation and avoid registration, or 2.) register the securities with the SEC, wait for approval, and then solicit investments from the public. We have found, like most other syndicators, the prior is more efficient for sponsors, and therefore we almost always choose private syndication.

What do you get from syndication?
A sponsor has the knowledge and experience to locate, analyze, and purchase a multifamily property with major upside (investment earnings potential).

Passive investors (from here on out referred to as equity partners) usually don’t have the experience, free time and funds to purchase commercial multifamily property on their own.

Equity partners have the misconception that investing in a syndication means their money will be tied up during the entire hold period. (A hold period is the time that the property is held under ownership by all members/shareholders in the LLC that owns the building. The time period is usually measured in years,  Industry average hold times are currently five to seven years (Our hold times are three to five years).

When you buy a property in a syndication model,  this means you are part of a group of investors who all own shares of the property. You may have the ability to sell your shares to other investors from/outside the group . An investor or their family could have an accident, become ill or experienced hardship. We know when this happens,  they need cash. The syndicator  may allow the sale of shares in some specific cases.

As an equity partner, your due diligence should include knowing if the prospective syndicator allows investors to sell their shares, and the steps required.

A private placement memorandum (PPM)  is the agreement that you will sign when making an investment into syndication. It’s a SUPER LENGTHY legal document (required by the SEC/ written by our well paid securities attorney).This includes the partnership agreement. The PPM outlines all the information about the project, how everyone is compensated, the fee structures, preferred returns (if stated), and how income and appreciation will be distributed. It also addresses circumstances in which an investor that incurs a hardship and needs to sell their shares as equity partners.

The PPM is going to be your “go to” document for everything.  I have a feeling no one reads these, but please try.  It contains a treasure trove of information.  There is an intro paragraph that provides a summary of the deal.  Next, the down and dirty is the “risk factors” section.  Here is where you want to spend most of your time.  No one knows the risks like the sponsor putting the deal together.  This is well written by our experienced SEC attorney.  Everything is in here because if there were ever a lawsuit, the sponsor did their job to explain the risks.

GOOD QUESTIONS-

What are the loan terms?
What kind of loan did the sponsor get?  What is the interest rate?  Is it a fixed or variable rate loan?  How long is it fixed for?  How much money was put down?  Is the philosophy to pay down debt and then distribute money?  Or is there a return that can change after 5 years?  Is there an interest only loan?

How is the syndication funded/ how much do you need to close?
The sponsors usually have to come up with the remaining cash to close after the loan coverage (75/25 Loan to value is typical, leaving 25% of acquisition and development for the Sponsor to raise) plus additional soft costs/closing costs. Opportunity to invest in our projects is given to private individuals. This benefits equity partners greatly to make life-changing income.

Last project for example- 50k capital contribution (excluding quarterly payouts) ended up turning into 105% of that on sale.. Wow. We also offer 70-75% of the asset to be owned by equity partners even though managers do all the work.   Very generous.

To do this, we need to have access to other investors with liquid capital who can help fund our deals at all times. Otherwise, we have to go with debt lenders who provide all the capital for 50% of the deal and none of my friends or family benefit from the hard work that we do. I  LOVE making my friends RICH.

What about the stock market?-
How is the stock market different?
Investing in the stock market, investors cannot enjoy the many tax benefits that real estate investments carry, such as depreciation and expense write-offs. Don’t forget it’s highly volatile from one day to the next.. Remember the 1929 crash, Black Monday in 1987?

What about CD’s?
CDs are safe, but offer almost no return because interest rates are so low.  Heard of the rule of 72? (72/rate of return is how many years it takes to double your money)  money at 2% will double in 36 years, pretty crappy. Do the math using a number from my multifamily projects- with 10% return…much better.

Keep this in mind if you’re looking at someone “newer” to the syndication game.
An early operator just starting out, can be a slam dunk investment.  The newer operators are eager to make you happy, provide overly favorable terms, and in many cases, take a loss for you just too simply get your business and referrals again!  Searching out a new player with the above due diligence can be a superior combination.

If you’re interested in more information about upcoming multifamily investment projects and how we can serve you, email us at admin@theapartmentqueen.com Or book a call with me calendy.com/Kaylee-6

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Starting to Build the Machine

machine

Starting building the Machine-
Collecting my thoughts this morning, and a lot has been changing in the past two weeks or so.

In business, I have formed a new team for a big 300 unit deal coming soon.  We are currently in the negotiating phase and in set and final on our offer. We are working at solidifying our relationship with the seller’s broker.  It has been fun to tell the team how to negotiate. A lot of the times, in the past, I’ve learned that the broker really just wants to make money there and their interest is not in line with the quality of the transaction most of the time. So, in order for me to get some of the due diligence items that I needed, to be able to get Intel or insight as to what the seller really cares about, I have to sometimes circumvent the broker. Sometimes money is not all the seller cares about. If it were me as a seller, I would just want to know that I have a reasonable buyer and someone that can perform. The relationship is really worth everything.

For example, in this process of submitting an LOI or letter of intent, the broker told my team not to contact the seller. I’m sorry, but we do not have a legal agreement signed and I’m unaware of any damages that would be caused to any of the parties involved.  If it’s a good deal, no makes no sense letting it go to waste. What I mean by a good deal is something that cash flows close enough to pay our investors out and be able to increase the value of the complex by close to double what we bought it for.

We have collectively underwritten about 100 deals, some off market, to finally find one that works.  Here is where I get feisty. And I’m willing to fight for a good deal because obviously that brings our business success. Those that won’t fight are the ones that will not succeed. I have a passion for what I do and this is actually the fun part, where they try to tell you to stay in your lane, and I am motivated as to buy as the seller is motivated to sell … so obviously my goal is to make this transaction happen.

Another thing that is changed in this process is hiring people for certain support roles. I’m reading a book right now called scaling up, and it goes over all the different support positions we need in our business model plus the key performance indicators that are necessary to meet on a weekly basis in order to meet our goals.

Alongside this, I’ve also been busy building the purpose behind the company as well as ethics and standards that the company stands for. It is important for me to define the company culture and only hire those who have a passion for the same. My goal is to keep employees for 15 to 20 years and a great starting point is having a staff filled with people who truly are passionate about the same cause or purpose. Defining the big hairy scary 10-25 year goals has also been a focus. Knowing valuation, profitability, budget, and % adherence to KPI’s (key performance indicators) are all necessary gears that run the wheel.

I’ll give you an example of the key support positions that we need in a real estate investing company-First we need a CFO chief  financial officer and Sales/Investor relations.

These roles KPIs look like-

CFO-

Measuring and understanding your financial performance

Cashflow Revenue growth rate – The rate at which you are increasing your company’s income.

Bookkeeping
Net profit – Income minus expenses – the bottom line, but certainly not the only metric you need to worry about!

Quarterly review with all state of financials

Net profit margin – The percentage of your revenue which is net profit.

#suggestions to lower tax burden

Gross profit margin – The percentage of your revenue which is gross profit.

Tax Benefits
Operating profit margin – Operating income divided by revenue – another measure of a company’s profitability

Paying bills
Return on investment (ROI) – The revenue generated by investing money into an aspect of a company’s operations, in relation the cost of that investment.

Opening new accounts at frost
Cash conversion cycle (CCC) – How long does it take for money invested in the business (for stock etc) to come back to the company in the form of increased revenue.

credit cards-mgmt

members draws

k1-generation

income versus expenses of business

insurance expense

Actual versus budgeted cost of hire

Average interviewing costs

Average sourcing cost per hire

Cost per hire

Internal, external, and total headcount recruiting costs and ratios

Percentage of HR budget spent on training

Compensation cost as a percentage of revenue

Average training costs per employee

Internal, external, and total headcount recruiting costs and ratios

Return on investment (ROI) of training

Marketing budget ratio (MER)

Staying in budget

finding deals

#investor suitability forms filled

$$ raised

Return on investment (ROI) of our brand

Return on marketing investment (ROMI)

Revenue generation capabilities of brand

Staying within marketing budget

treasurer

INVESTOR RELATIONS-
ipad for leads-each event registration

Monthly Sales Growth

Average Profit Margin

Monthly Sales Bookings-calls need calendar link

Sales Opportunities

Sales Target

LOI To Close Ratio

Average Purchase Value

Monthly Calls (or emails) Per Sales Rep

# of new investor registered Per Rep

Product Performance-keeping deal flow-constant?

Sales by Contact Method-what are top 2?  stop the rest

Average New Deal Size/Length

Lead-to-Sale %
# event planning for marketing -with assistant

# video or marketing ideas per month

Customer Lifetime Value-ranking current investors by contributions-remind assistant to send gifts

Average Conversion Time
#of leads from events active for money or deals

#meetings with interested sellers face to face

#calls to interested owners

Actual sales value versus initial bid
#off market deals that fit our criteria

Average administrative time per sales person

If you are excited to watch us grow, your support means everything! If you have any questions how you can help us build this machine, please don’t hesitate to reach out to us at admin@theapartmentqueen.com

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WHO I AM and what I stand for

If you want to get to know me it will take more than a glance or a guess. My history, my motivation, my spirit is more unique than anyone that I have ever met.

That is not bad or good, I am just a little more complex to understand than most I have met.

My history is not a long one, while I am writing this, I am still in my 20’s. But I have learned a lifetime of lessons in a relatively short time frame and grown up a lot faster than my peers. Most of my friends are older than I am. I feel like I understand them better than people my age. See, while most kids were worried about what they were going to wear or what movies they wanted to see, at 15 years old, I was fighting with my parents not to emancipate me as a minor. They did not want me in the house and this is the legal way to kick someone out who is under 18. I was put in-between my parents arguments and problems like a counselor should be. A lot of very heavy stuff was put in front of me when most kids at that age were able to frolic and play. Yes, my parents should have gotten professional help and yes, I deserved to be a kid, But sometimes there is a reason why things are the way they are for with the purpose of the bigger picture.

I can’t always see or understand the bigger picture but here’s where faith comes in. As you can probably guess, when a child has to grow up fast, it’s usually because they are not allowed to have their innocence or that their innocence is taken from them. No, there is really no justification for why this would be ok to have to live through or why anyone deserves this. But I went through times where I almost took my life because of the pain and the hurt that I had to reflect on.

And something throughout the process in the back of my mind made me feel like there was “more” to come and that I had to stick around. I had faith that I should wait, faith that there was a larger purpose for my life, even if I did not see or understand it at the time.

The more open I have been with sharing my story, the more I realize my issues which stunted me emotionally and socially are not only mine. I realize as a society, 1/3 people can relate to my story, but social stigma alienates us to think we’re messed up or that we are less-than so we hide and instead of being our big bold beautiful selves. We stay co-dependent on someone else’s illness because we know nothing different. We become withdrawn socially and emotionally for the most part. Lots of us live through a version of PTSD or post traumatic stress that leaves us unable to see how our dissociation from emotions makes us unrelatable and unreachable by most people who want to love us.

You know as if “you only know what you know”, you don’t know what other people see when they look at you. You can only see what’s in front of you, you cannot see you from other people’s eyes. They see things like your pain, mistrust, controlling tendency, and more.

I know people who go their entire lives without being able to see what everyone else sees (their pain) and they end up bipolar, depressed, hateful, staying completely withdrawn from others and that is the saddest existence. There is so much that I can do to be able to help so many others see all of this and be able to grow away from it.

Starting with focusing on yourself or self love is usually the first step. Getting physically away from abuse or from those who condone this behavior. For me, it took for me to get physically away and feel financially independent, emotionally independent, physically independent, and spiritually independent. I could finally own all of my thoughts, needs, opinions, wants, etc.

My why is to create independence through wealth from real estate. I want to give others the opportunity to start over and create into existence whatever they believe they deserve (which is everything).

I stand for an abuse free community where toxic codependency will be identified and stopped.

If you want to learn more about our master plan to create independence in my community email us at apartmentqueenmgr@gmail.com