Make Your Investors Happy

Our mentor taught us something that was pretty significant when we came out to the boardroom, which is the majority of money, 90% is invested into stocks and mutual funds and bonds, $4 trillion sits in the 401k market. So when people tell you that, you're going to run out of money at that cost of capital, first of all, they don't understand the returns that people are typically getting.

And I think that that was something that we raised our eyes open to, you have to find out what your investor wants. That's number one, you don't want to teach your capital, you want to find out what they need, what they want and how you can supply that. Coming from wholesaling and the fix and flip world, I think I knew that we could raise capital at 10 or 12% and people were really happy with that.

I mean, we have a lot of happy investors that have been investing with us for years like that and then we move into the multifamily space and it's even more secure. It's not an empty house that we're fixing, flipping for six months and we can only deploy their capital at six months at a clip. So it was not really a 10 or 12% return, it's much less than that because we have to redeploy it and this is a secured asset based on cash flow, five-year deployment, they get some additional tax benefits. So why wouldn't they be excited about that?

And so, I'm in the capital game, I think people either love us or hate us. But as long as our investors love us, that's all that matters. I mean, we're only a subject to one type of scrutiny, invest through your investor's eyes and you're going to realize that with your investors, not all investors need 20% returns. Fact, there's a lot of investors that will say that's risky. Like you show them a return like that, they assume that with risk and they're like, oh no, not going to do that deal. That’s why we are all about stability, consistency, passivity and we're all about return of capital first, return on capital second.

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