Just reached over $100,000,000 in apt communities: Lesson Learned

[Joe Fairless]

Wanted to share a lesson learned from the last deal I closed on, a 200 unit, in Dallas. That puts my company at over $100,000,000 assets under management (1,438 units).

Before I do, if you want to check out the lessons learned on my other deals here ya go:

https://www.biggerpockets.com/forums/223/topics/369032-closed-on-a-200-unit-one-simple-lesson

https://www.biggerpockets.com/forums/223/topics/217842-closed-on-250-apartments-in-houston-texas-yesterday-2-lessons-learned

https://www.biggerpockets.com/forums/223/topics/294621-closed-on-155-units-in-houston-yesterday-3-lessons-learne

https://www.biggerpockets.com/forums/223/topics/316836-closed-on-320-unit-last-week-6-ways-to-break-into-the-biz

https://www.biggerpockets.com/forums/223/topics/359926-investor-analysis-after-closing-on-a-296-unit-2-lessons-learned

Ok, back to this deal. I realized that there’s a way to communicate with investors about deals that really resonates. And, I boiled it down so I could use it on my stuff moving forward and others can use it on their deals when they are raising private money.

Ok, here we go.

What’s your favorite biz book? 

Mine is Crucial Conversations. The book talks about how to navigate conversations when opinions vary and the stakes are high. The main solution they discuss is to come up with a mutual purpose then build up from there.

What about your favorite book? What is the central theme? After looking at my bookshelf I realized that most of my favorite non-fiction books have one or, at most, three central themes. Then, the author uses the rest of the book to simply elaborate or add additional context to those themes.

Some examples…

Four Hour Work Week by Tim Ferriss: optimize your time by creating a system for things that you currently do manually

Investing for Dummies by Eric Tyson: Stocks, start-ups and real estate are the three main ways to invest. Pick which path you want to go.

Blink by Malcolm Gladwell: you can make informed decisions in a blink of an eye because of what Gladwell calls “thin-slicing”

So, what does this mean for us as real estate investors? It means that if we can boil down our main talking points into central themes then we can communicate more effectively and get more transactions closed.

Here’s how it just played out on the last deal I closed, the 200 unit in Dallas.

I’ve identified three themes to talk about ANY deal. They are:

1.Market

2.Team

3.Deal

Then, I focus on the top 1 – 2 selling points for each of those categories. For example, on the last deal it was:

Market:

• DFW is home to 25 Fortune 500 headquarters and has been a top job growth market in the country for years

Team:

• My company currently controls over $70,000,000 in apt communities in Dallas

Deal:

• Off-market deal buying at 26% below sales comps
• Projecting same rent premiums on upgraded units that current owner is achieving

Super simple. But it works. Probably because it’s super simple.

By organizing your conversation talking points to investors into these three themes it addresses all the relevant aspects of the deal. Sure, you’re going to need to elaborate on each of them but at least you’re making sure you’re covering all your bases and leading with the most important selling points on the deal.

This strategy helped me close on this past deal and I’ll continue to use it moving forward. Hope you get a lot of value from using it as well!