[00: 00: 00 – 00: 00: 38]

Mindset is so key in this business and not just in real estate, but definitely it’s needed. You have to have the right mindset. You got to figure out what advantages do you bring to the table and think about it as my deal. So it’s my deal and who are the people that I’m going to bring into my deal as opposed to trying to knock on someone’s door and say, you’ve already got something great going on. How can I be a part of that thing? Cause most likely they’re going to say, you know, well, we like you, but you know, we don’t really need you, but like, you’ve got to know who you are and the value that you bring.

[00: 00: 39 – 00: 01: 14]

Welcome to the Share the Wealth Show, where minority professionals can learn to escape the racial wealth gap and catapult themselves into abundance. Your host, Nicole Pendergrass, grew her net worth from being negative to multiple six figures. Join her on her investigative mission to expose secret strategies of the wealthy so we can all have the tools needed to build the life and legacy we were created to possess. Now it’s time for the show.

[00: 01: 15 – 00: 02: 41]

Hey guys, so we’re back again. This is the second part of the episode with today’s guests. I need you, if you have not heard part one, go back to the previous episode and listen to that first and then come back and join us here today. You need to hear the whole conversation. This is why we split into two parts. There’s so many nuggets, it’s so juicy. Go back and listen to the first part. Okay, that is what I meant too, that you had to underwrite and analyze that many deals before you find the ones, because you’re not going to offer on all of them. And that makes sense to pick the ones where you’re close in the strike zone. For you, what’s the strike zone? Like how often the offer price are you? So the strike zone today is very different than it was a year, even a year ago. So now it’s very much shifted away from being a buyer’s market, a seller’s market to being a buyer’s market. So I think an offer that might’ve been deemed to be an insulting offer you know, 18 months ago or two years ago, today. Rokas will say, no, bring that offer, submit the offer, because they know that there’s a gap between seller’s expectations and buyer’s expectations. And so the truth is probably somewhere in the middle and the truth may be closer to the buyer’s side or end of the spectrum than it is to the seller’s side.

[00: 02: 42 – 00: 04: 12]

So for me today, once I decide that I am interested in a property and it meets my criteria, I will underwrite the deal fully and arrive at whatever conclusion the numbers tell me that this deal works, this deal pencils for me and my investors. I’m open to submitting. an offer that may be considered to be an insulting offer, even if that’s multiple millions away from what the asking price is. And so just making this up, it could be a $50 million asking price. If my underwriting says that $39 is the right amount to offer, I’m going to have a conversation with the broker. And most times, I’m going to say, look, this is where I’m netting out. You tell me if this is helpful to you or not, because it’s good to have that communication with brokers because sometimes they’ll say, no, don’t waste your time, don’t submit it. Other times they’ll say, I’ve been told by Brokers Clive, I don’t even need you to submit an LOI, but if you’ve fully underwritten this deal, whatever that number is, you tell me what that number is, and I will get that onto our bid sheet. And I will take that into my discussions with the seller. So that they have a full understanding and appreciation for the range of offers that are out there.

[00: 04: 13 – 00: 06: 27]

So I’ve done that too. And I’ve said, look, my number is 47. And they’re like, thanks, because I’m gonna take that into my conversations. I’m gonna include that in the bid sheet. So having a conversation with the broker and you’re always developing a relationship, before you just submit something blindly, you wanna have that conversation. And sometimes, even if it’s a low offer or maybe deemed to be a low offer, that too may be helpful to them. And it’s a lot easier for them to tell the seller, look, this is where the truth is if they’ve got an offer in hand that they can point to versus them just saying that a lot of people underwrote it and they just couldn’t get to our number. Yeah. Okay. So you’re talking about some huge numbers here, right? And like, these are really big deals. Like you’re going after the large scale multifamily. So I don’t know a lot of people in the multifamily realm, like my mentors and people like that I look up to who are way ahead of the curve, or at least ahead of where I’m at. And they’re like the inspiration kind of for me. And they normally look like the normal multifamily investor kind of demographic, right? So I don’t even see. We’re disrupting that. Yeah, I don’t even see those people doing 300 unit buildings or 250 or 300. And that’s like your normal range, let alone like a black man doing that. That’s applause, hats off to you, sir. That’s crazy. And it needs to not be crazy, right? That needs to be like the normal. So I’m so glad that you are setting an example, but. The other thing is too, if someone is inspired by you, which everyone should be, and they want, they have their sights on doing large scale multifamily, that point where you were from, you soldier two, you soldier five, you had held those for some years, and you made that decision, okay, I wanna do large multifamily, I don’t wanna play in the middle. What else did you need to do in between that space before you just jumped into submitting LOIs? Like, how did you get yourself prepared for that?

[00: 06: 28 – 00: 08: 24]

Yeah, so the thing I’ll say to your earlier comment is, this is a team sport. And so while I’ve been able to do whatever I’ve been able to do up until this point, and I still consider myself a beginner, I’m still early in the game, I’ve not been able to do it by myself and on my own. I’ve partnered up with individuals that I have respect for and have a compatibility with. and that we’ve decided we wanted to be in business together. And then we have kind of corralled resources, financial and otherwise, to make these deals happen. But in terms of what you need to do and what I did, there are a few things. So education is number one. You’ve got to educate yourself on the world that you are aspiring to be a player in. So education is critical. And that’s… That’s not the formal education that we had, in undergrad and grad school and what have you, that is the informal education. I jokingly referred to it as my self-directed real estate MBA. And so for me, that was podcasts that I, I went from never listening to a podcast before 2016, to I’m listening to one or two a day, specifically on multifamily, not a range of topics, just multifamily. of reading books, of course, attending conferences in person. And then ultimately for me, you mentioned Brad Sumrock. I joined that program at the end of 2018. And the three things that I was looking for when I made that decision is a place where I will find prospective partners to do the deals I aspire to do, prospective investors who once they get to know, like and trust me, will consider investing in the deals that I bring to them. And then the third piece was the education. And so all of that is essential.

[00: 08: 25 – 00: 10: 03]

I also invested heavily my retirement related funds which I had moved entirely out of the stock market, wherever they were residing, I moved them into a self-directed IRA and started investing in the very types of deals I aspired to do. All of that was part of my education. But team, all roads lead back to team. because you’re not going to do, my first deal was a $30 million deal, 244 units, and each deal has been bigger from that. And so that only happens if you are, if you’ve built or you’ve associated yourself with a team that is increasingly looking to do bigger deals. And so I would say all of those things in combination are the ingredients to do these deals. Okay. And the big is, okay, so one of the So one of the questions then comes from that is, if you were in this, this group and you join this program so you can meet the different types of people that you would need on your team. If you had not done a large scale multi before. How did you sell yourself besides like they know like and trust you but what skill set a lot of times I can know like and trust somebody over there but I know that they don’t know nothing about this and I don’t want them helping me with my project because they might, yeah. I don’t, you know what I mean? Like it doesn’t let you in on a deal. So one, what was your skill set or value add to the team? And I’m assuming it’s something attorney related since you were an attorney.

[00: 10: 04 – 00: 11: 12]

Listen, I know you’ve been digging in studying everything you can listening to all the podcasts, reading all the books, even going to meetups. You basically have a degree from YouTube university, right? But you still feel stuck. You don’t know how to actually implement what you’ve learned. You’re nervous about taking the next step. So I’ve decided to start the Micro Family Investing Accelerator. This is a mentorship program where I personally guide you through my five proprietary pillars so you can learn how to buy your first commercial multifamily property and scale while not biting off more than you can chew by focusing on 5 to 20 units. That’s what I call micro family. And so you can also get hands-on guidance from an experienced micro family investor who’s been right where you are. And so you can also create the cash flow needed to give you freedom and options to build the abundant life that you were destined to live. So I’ll be limiting the first cohort because They’ll have direct access to me and I will be heavily invested in their success. If you’re ready to grab 2023 by the horns, schedule a free discovery call with me today. The link is in the show notes. And now let’s get back to the show.

[00: 11: 13 – 00: 12: 27]

Is that right or the wrong question? It’s a great question. And I would say mindset is so key in this business and not just in real estate, but definitely it’s needed. You have to have the right mindset. So in my mind, I positioned it as letting others into my deal. So I wasn’t kind of knocking on the door saying, let me be a part of your deal or let me be a part of your team. I’m creating the deal that now we need to staff. And these are the roles that are needed. And here’s the deal. So for me, I live in Atlanta. Atlanta is one of the top multifamily markets. So I said to myself, I don’t really have a competitive advantage competing for deals in Dallas and Houston and Phoenix and some of these other strong multifamily markets, Tampa. So I said, let me become an expert within my market, let me develop relationships within my market, let me underwrite deals, and then I will take them to those people that I’ve determined is a strong potential partner. compatibility, alignment, values, all of that stuff.

[00: 12: 28 – 00: 14: 00]

So my first deal, I did most of the heavy lifting. I underwrote the deal. I established a relationship with the brokers, the property management company, the tax consultant, the lawyers. So my legal skillset was, I think, helpful and is helpful in doing these deals, but that wasn’t my differentiator because frankly, there are tons of… washed up lawyers out there. And so that wasn’t what put me over the top. It was the fact that Clive brought the deal, underwrote it, put a bow on it and said, hey team, we should offer this. And here are the reasons why this is a good sub market. And here’s the reasons and rationale around why this is a good deal. So then I could just go to an experienced set of team members and say. What do you think? And at that point, it was just like, okay, now we got to get this to the closing table. And then post-closing, the natural asset manager for the property is going to be me, the only partner in Atlanta. So my differentiator is I’m giving you access to a market that you have not yet entered, that you don’t have established relationships, that you don’t know the terrain. You can’t get in your car and be at the property in 20 minutes to go check it out and see if it’s worthwhile fully underwriting.

[00: 14: 01 – 00: 15: 33]

All of the things that I could do were largely as a result of me physically being here and having boots on the ground. So that may you’ve got to figure out what is my competitive advantage. What is my differentiator? What can I do that team, not that they can’t do it, but it’s not going to be as easily done by them from you know, Dallas or Houston or Los Angeles or wherever they are. And so you gotta figure out what advantages do you bring to the table and think about it as my deal. So it’s my deal and who are the people that I’m going to bring into my deal as opposed to trying to knock on someone’s door and say, you’ve already got something great going on. How can I be a part of that thing? Cause most likely they’re going to say, you know, well, we like you, but you know, we don’t really need you like, like you don’t really, you know, put us over the top. Now, maybe, maybe capital raising or investor relations is your thing. Maybe you, you’ve developed a network and you’ve nurtured a network and you, you can bring some access to capital that they haven’t yet tapped into. And maybe there’s value in that for that team. It’s gonna vary from team to team, but you’ve got to know who you are and the value that you bring. Perfect. And that’s a great summary because it’s all about having that deep self-reflection about your resources and where you’re at.

[00: 15: 34 – 00: 16: 45]

Like me, I can’t be the deal finder, right? One, I’m in New York City still. Two, I got young kids that like two and, how old are my kids? Oh, three and five. So like me being out of the house, even me traveling, like me traveling to Houston, I was like, okay, I got another event this month. And there’s so many more events that I’d want to go to and I can’t go to everything. I have to strategically pick what I can go to. I can’t be out the house that much. So me hopping on a plane to go to a market to see a building and being out the house, how frequently I have to do that is just not something that fits in my wheelhouse and my life right now where I’m at. So I have to figure out, what is that other… thing I can do and I can bring, that’s my differentiator. And so that’s why I just wanted to touch on that because I know there’s probably a lot of other people looking to get started who also don’t know what their differentiator is. And you just have to, I mean, no one can tell you, right? Because everyone has their own unique circumstance and you just have to sit and really think hard about it, have conversations, listen to podcasts. things, get ideas. Like now you know, if you’re in a good market, you could be boots on the ground.

[00: 16: 46 – 00: 18: 01]

If you can do all those things and you can bring the deal, then that’s a powerful position, right? And you can make, you still have to develop the relationships with all the people who would want to come in and you can present the deal to them because a lot of people here like, oh, find the deal and the money will come. It doesn’t just come, like you have to still establish those relationships, but I love your story because it really outlined that. Oh, one other question from that too is on the broker side. So you’re developing relationships with all the people as boots on the ground in Atlanta. But since this was your first large deal, how did you win over the brokers to start showing you deals that actually weren’t crap? Yeah, so that answer also leads back to team. So I tell people, once you either build a team or attach yourself to a team, you talk to brokers about what we have done collectively. So you may have been a little part of that. You may have been no part of that, but nonetheless, you talk about when they say, well, what’s the source of capital or what’s your team done in the last 12 months? Or it’s a conversation about, well, we just closed the deal in Houston in October and that was 68 million.

[00: 18: 02 – 00: 19: 21]

Now they didn’t say, well, Nicole, what part of… What role do you play on the team? You do the underwriting; do you do the capital? You know, they don’t care about that. They just wanna have a sense as to who is the buyer. And they know that the buyer is most likely a collective and can the collective get the job done, which has closed the deal. At the end of the day, brokers just don’t want to be embarrassed in front of their clients who are the sellers. So when they go to the seller and they take an offer to the seller, they wanna be able to take that offer with confidence that this team has the wherewithal, the resources, the experience needed to close this deal. So whatever you can tell them to help convey that message to their client, they’re gonna feel that much more comfortable. And so I say that, you know, it was irrelevant. No one cared, you know, that I was a corporate transactional lawyer at a Wall Street firm. You know, that was like, that’s nice, but have you closed any deals? So, you know, at the end of the day, you’ve just got to get them comfortable that the team that you’re a part of can get the job done. Nice.

[00: 19: 22 – 00: 20: 24]

And that goes back to relationships, right? Like you have to go out there and network, and just meet people and get them to know, like, and trust you, but just being yourself and building relationships and not having every… interaction be just transactional when you’re on the phone. Like actually getting to know people is huge. And when opportunities come up, they’re gonna think of you. Or you can attach yourself and be involved in the inner circle talks. And that’s how you really can get a step ahead. Cause I know networking for me has been a huge, huge differentiator and I’m able to leverage. Yeah, I would say on every team, there’s lots of work that needs to get done and it’s not always glamorous work. And so I’m pretty competent at underwriting, but I don’t love underwriting. And so whereas some people can eat Excel for breakfast and they love underwriting, you throw it at them, they love it. For me, I’m like, oh, okay, here we go. Let me get my Red Bull and dive in.

[00: 20: 25 – 00: 21: 52]

But some people that naturally that’s who they are. Now, if you give them an investor relations task to go talk to people, they might cringe because they’re like, I don’t wanna talk to anyone. You mean a live conversation? I can’t just email them or text them or whatever. So you gotta figure out what’s your strong suit or what can you take off their plate that they’re doing but they’d rather not be doing and they’d rather be freed up to do something else. So if you’ve developed through relationships and networking. a compatibility with one or more individuals, and they have experienced that you’re trying to gain, you can get to a point where you say, hey, you know, Nicole, I’m really trying to improve my underwriting. I’d love to be a resource to you in underwriting deals in whatever market it is. It will also help me to get to know that market that I’m not currently familiar with. And so if I can ever take anything off your plate, and underwriting is one of the things you’re having less and less time to do, think of me, I’m your person. So you just got to figure out who are the people I want to be associated with and what can I do that would be considered valuable to them without any guarantees, because just because you’re doing that doesn’t mean, oh, you’re going to be a co-GP.

[00: 21: 53 – 00: 23: 06]

But if you develop such a strong relationship and you’re viewed as being such a resource, you’re a natural for when they’re thinking about the team, you’re a natural, it’s just gonna flow that way. And so again, you may not be in that market, but if you’ve been invaluable to them underwriting other deals, underwriting the deal in question, you’re naturally gonna be considered for a partner. And they may say, we should think about Nicole as a partner, she’s really good. And someone’s gonna say, well. Can she raise any money? And so you want to be in a position where you’re in the conversation. And in order to be part of the conversation, you have to have demonstrated that you can add value to them in some way. Yeah. Cause I’m kind of like you, like I feel like I can underwrite, especially when I put my underwriting brain on, right? And I’m really focused. I can underwrite. Do I love doing it? No. I can network, I can be like up in an uppity and stuff, but do I like being on the phone all the time? Not really, but it’s just like, you have to do it. And it’s just part of the process for both of those.

[00: 23: 07 – 00: 24: 16]

So I’m wondering what I went off my plate, but you know what, everyone listening, you just heard Clive say he doesn’t really love underwriting. He gave that suggestion, not to say you’re gonna be on the GP, but I love that as an example of something that you can do and approach someone and let them know that. The other thing is mainly because a lot of times in networking, they tell you, oh, ask how you can add value to someone or ask like, oh, what can I do for you? Let me know whatever I could do for you. That person that you’re asking doesn’t know what you can do. They don’t know what your capacity is. You know what your capacity is. So offering something specific, especially if it fits with the pain point that person has, that’s genius. And no one, everyone is always talking about, oh, and I get that all the time, like Oh, let me know how I can help you, how can I value? Okay, great. I need help in a lot of different places. And I don’t know, at that moment, I cannot compartmentalize all the places I need help with what you can do. And you know what I mean? So I think coming with something specific like that is just, that’s one point and make sure you, and it goes back to knowing yourself and doing that deep dive when your strengths and weaknesses.

[00: 24: 17 – 00: 25: 52]

Whatever you offer, be prepared to give that. Like, the worst thing you could do is offer yourself up to do something and then do a poor job of it. You don’t want to be mediocre. You don’t want to be, uh, I really don’t have time. If you’re trying to break into the game, you’ve got to go the extra mile and really shine. you know, I don’t want you giving me underwriting. I’m like, what is this? You got to fix it. You didn’t do the basic minimum. Like my seventh grader could have done this. You want to show that you’ve given it thought and you have insightful questions about the T12 or the rent roll or whatever. You don’t just want to say that I input the data into this template and here’s the results. But what do you think about the results? Is this something I should even be looking at? Is it worth my time? Why is it worth my time? And so you wanna be, you know, go beyond kind of just, I input the data and here’s the results. Because they can get a VA to do that at $5 an hour somewhere around the world and spit out an underwriting report. And there’s probably some AI tool that I’m not aware of that will do the same for even less than $5 an hour. They need to make chat be GPT do it. That would be great. Oh, I’m gonna ask chat GPT if he knows how to underwrite. I test it out. It’s now I wanna know. Okay, anyway.

[00: 25: 53 – 00: 26: 47]

So, okay. Actually, I think we’re gonna move into the final questions that I ask every guest. This has been such a great conversation. You give so many nuggets and gems for people. And I think if… people are looking to get on the active side of multifamily. He is so many ideas and gems, like just hearing his story and the examples that he’s telling you guys. Please, I hope you took notes and make sure you like and comment and rate and review, whatever you gotta do to get this episode out to more people who wanna know how to become a syndicator or multifamily investor, because it just will reach more people if you guys share this. In any case, all right, Warren Buffett said that diversification is protection against ignorance. So I know what I take that to mean. What do you take that to mean? Is that good or bad thing?

[00: 26: 48 – 00: 28: 05]

Um, this, it’s a short statement, but there’s a lot in there. Um, and so what I think he means is that sometimes ignorance or, or not knowing what we don’t know. can get us into trouble. And so even in an area where we think we have all of the necessary information that we have, there are gonna be things that we don’t know that could end up undermining our success in that particular area. So basically spreading the risk across multiple opportunities, i.e. diversifying, is gonna minimize the potential impact of your ignorance. Because if it turns out that you were ignorant of something that proved to be very important to the success of that thing, that can totally derail you. But if you have diversified, you are just mitigating risk. So that’s kind of my take away from that. Nice, I like that, risk mitigation. Have you played Monopoly before? I have, yes. Okay, so in your strategy to win the game, what are you buying first? Boardwalk or Baltic and why?

[00: 28: 06 – 00: 29: 29]

So what’s funny about that is that I grew up in the UK. So our Monopoly board was different locations. So it’s like Mayfair in London. And I never really learned the high value. I know like, and I’ve lived in New York City. So I know like, I know the expensive parts of New York City and Fifth Avenue and things of that nature. But generally, I’m trying to get the things that have the highest value on the board as soon as I can get them. Okay, sounds good. What does wealth mean to you? Wealth to me means the freedom to do the things that you deem to be important, freedom. That’s mine too. That’s basically any answer you can give boils down to freedom. So that’s just the underlying thing. Okay, so now I don’t know if you know, but I have started asking questions from the previous guests like ask a question that the next guest is gonna answer. So the last guest, he said, if money wasn’t an option, what would you be doing?

[00: 29: 30 – 00: 31: 53]

If money was not an option, I would be doing mass impactful philanthropic work in multiple areas. And that’s what I will be doing when money is no longer an obstacle. Top three? Well, I’m a big advocate of building community and resuscitating communities. So it would probably be something in the vein of development in underserved communities. So that would definitely be a part of it. I’m also a big advocate for education. public and otherwise. So it would probably be in those areas, housing and education. Okay, great. Well, do you, now you have to come up with a question for the next guest. Yes, so look into my crystal ball. So next guest, the question for you is, when will we start to see interest rates decrease interest in what quarter? Oh, you want a whole crystal ball answer. Yes. What quarter? I will preface this by saying not every guest is a real estate investor, but that does not mean they don’t know interest rates are increasing and can kind of give a guesstimate. Their crystal ball probably works just as well as any other real estate investors. Exactly. They’re just as valid as anyone else’s. Perfect. I like that. Thank you again, Clive, so much for coming on today. This was really great. I think the listeners are really going to get a lot of information from hearing the conversation, hearing your story and insights about kind of what to do if they’re looking to get into active multifamily syndication.

[00: 31: 54 – 00: 33: 04]

How can people reach out to you or what resources do you wanna leave for the listeners? Sure, I’m active on social media. I’m active on LinkedIn, Instagram, Facebook, but the best way to get ahold of me and find me is at my website, which is parkroyalcapital.com. If you go there, you can sign up for my newsletter. which goes out monthly and will also add you to my email distribution list. And you can also see upcoming events that I’m either speaking at or attending and things of that nature. But ParkRoyalCapital.com. Perfect. Okay, so we will have that the link to that site in the notes and guys go there, figure out what Clive’s doing, sign up for his email list and just engage with him on social media. and join the African-American multifamily investors group. It’s a great, great group on Facebook. Anyway, thank you again, Clyde. Remember everyone, please like and subscribe if you’re looking on YouTube or rate and review if you’re listening on Apple, Spotify or any of the podcast platforms. We really appreciate it and we will see you next time.

[00: 33: 05 – 00: 33: 32]

Did you love this episode of Share the Wealth Show? Be sure to connect with Nicole by following her on LinkedIn, Instagram, or Facebook. If you picked up any of the gems that were dropped by today’s guest, make sure you not only put them in your bag, but if you know of someone who would benefit from this information, don’t keep it to yourself. Share the wealth and make sure to leave us a rating and review. We’ll see you for next week’s episode. Subscribe so you’ll be notified.