All Forum Posts by: Austin Fowler

 Management portfolio. Step 1: Skip trace list 2: Have callers call 3: Walk leads and Close 

@Austin Fowler
"BRRRR is a great strategy, especially in today's market! 🔑 I'd be happy to chat and share insights on finding the right deals and managing the rehab—what stage are you at in exploring BRRRR?

@Austin Fowler We're close to finishing a BRRRR (possible flip) deal right now. From our experience with distressed SFH houses the market has stalled.

The market is not going to "save" investors who buy wrong. There's almost no tail winds driving prices. It's been talked about in the forums and BP podcasts lately. Prices have stagnated in most markets including my neighborhood. We're not even done with the remodel and wish we paid $7k less on the buy side. The rehab went over budget, and sales transactions have slowed. Only quality properties priced correctly are selling. We're not worried about the quality, but profit for a flip has compressed. I'm bracing for that and exploring cash-out refinance options like a conventional (6 month seasoning), or DSCR.

When you niche down into neighborhoods you see the voids. The sold price for fully remodeled home vs. a dumpster fire is crazy. Distressed properties that need basically everything have way longer DOM. 

Considering what's going on in this country REI is a first world problem. We're blessed to be in these conversations. Cheers.

That's a solid way of looking at it, Austin. BRRRR definitely makes more sense in this type of rate environment compared to paying top dollar for turnkey. It can be a grind though lining up the right contractors, managing timelines, and making sure your refi numbers actually pencil out. I've done a few myself where the plan was to flip, but it ended up being smarter to refinance and hold. Just curious, are you thinking single-family to start, or jumping right into small multis?

> You certainly don’t need millions to participate in a syndication. Indeed, compared to buying a single-family rental in many markets, the entry price into a syndication can be significantly lower than the down payment required to buy a rental.

In some instances that is true, and in a great many of instances it's about the same $ investment. BUT, and it's a very big but; when a person uses their $ to purchase a property they are in direct control. In a syndication, their along for the ride. Next big but is, when acquire a property their empowered to multiply the income potential of their investment capital far more than in a syndication, as the leverage potentials are far greater. For example, if a persons does a very simplistic strategy of O.O. buy via a 10% down, live-in for 1yr, then buy another, move, lease out the previous unit. Or really any # of effective leverage strategies such as house hacking, BRRR, value-add etc etc..

> Raising even tiny amounts of money is highly educational, it forces you to analyze a deal properly, work out the likely return, keep your books properly, report results. There is a great deal of professionalism that comes with managing even a small amount of other people’s money.

That's an intriguing point.... I find the vast majority view such as added work, stress, responsibility and accountability unto others which translates to a loss of freedom and added risk.    I like the forced edu aspect, I do, although I think your missing how strong the desire of independence is in most. 

> I know how to start a managed fund with just $15k in legal fees that gives you the right to advertise publicly and raise up to $150 million. Chat GPT can’t teach you that.

$15k is exceptionally cheap for such. Although as both you and I know there is a lot more to it then just that baseline empowerment. The real struggles come in for most in operational management. And next in deal flow. These 2 factors are often a stopping point, because it's work, work that many do not desire to take on. 

> "most don't care to scale" ----> I disagree. I’m not sure why you would even say that. 

Because that is the reality from the front line, this is as I experience it. 

The first a foremost service I provide investors of all kinds is as an advisor. Everyone starts with a consult, and I have a long list of investors of every kind, size and level from 0 too gigantic who utilize me as a sounding board, a consultant, to discuss, strategize, plan development, strategy review etc etc.. Just yesterday I spent an hour with an investor most would ask why such a wildly successful multi-millionaire would "need" advice and consulting. Because a very common theme of successful people is circling themselves with mentors and advisors, seeking review of ideas and concepts, they are knowledge miners. 

So with that I talk with a lot of people on a regular basis, discussing goals and setting resource and desire fences. 

And with that experience of hundreds upon hundreds, the vast majority, 92%+, express not only no desire to syndicate but also no desire to scale exponentially. 

The prevailing desire is to achieve the desired financial ends, in the most expedient means possible, within their risk appetite, as simply as possible with least impact and intrusion into their active daily lives. 

That simply is the prevailing majority of mindsets out there. 

> ....10 to 20 rentals.... ....this is not a modest goal. Only a tiny fraction of people in the US can ever own so many rentals. 35% of households rent. The percent of people that can ever own 20 rentals is definitely less than 1%.

This is very incorrect information, and incorrect perception. 

The US has been in process for some time now of the scale flipping from majority ownership too majority tenancy. As Clause announced to the world, and was actually the theme of the summit: "You will own nothing, and be HAPPY".     The # consistently put out there for years now across various paradigms of groups has been a projection of 60% tenancy. It's been reiterated to such extent that one has to wonder if it isn't more-so a quota then a projection. Especially with fact that markets have been consistently moving more and more toward achieving this "quota". 

As for ability to achieving such, my clients have a 98.5% chance of achieving it and I say that only because nothing is 100% in life other than tax's and death. The only question is not on ones ability to achieve it but if they will put in the work, follow the plan, execute on the steps required to achieve this end. 

It is not a mysterious mythical impossible thing. It is a mathematical thing, very literally a math equation. The work I do is to assist people to develop their equation, from there is simply the work of doing the math. 

Just like any business, it's all about methodology vs chance and randomness. Any who operate via chance and random actions will of course reap random results. 

> I would argue that many people are actually quite careless with their own money.

Many do act financially careless, but that does not change how much they CARE for their money. Your comingling financial literacy with care, they are 2 very different things. 

One could have the strongest of interest and passion in being a NASCAR driver, and when jump behind the wheel find their a horrific driver. Being a horrific driver does not mean they lack care and passion for it, it means they lack the skills and knowledge to properly execute on their care and passions. 

And to their defense, the entire public USA system is designed to produce good little consumers, NOT investors or wealth. Consumerism is the status quo of USA. Wealth, independence and financial freedom is not the design for the masses and thus, of course financial neglect is the norm, it's what's literally taught and promoted popularly. 

> The example you gave above of 10 to 20 rentals is not something most people can do. 

Incorrect, the vast majority can achieve this rather low bar, the only question is what the path is for the specific person and will they execute on the actions to get them there. 

The first step is universal, active income production to empower investible capitol. In this day and age a side-hustle is just far to simple for everyone to have one. There is no excuses to not take these active income steps. If one is unwilling then they are not serious about ever achieving the ends. 

Next is appreciation. Appreciation is the #1 most important ingredient to growth. In what form and fashion this takes, again, is very person to the individual and get's detailed in their person development plan. Appreciation is paramount because via appreciation is how we can Pyramid. 

This leads into the next key aspect, pyramiding. Pyramiding is how we can achieve infinite returns. Infinite returns is how we achieve rapid rates of growth. 

There is many details to it all which again, various person to person as it's personal to their resources, natural empowerments and natural disadvantageous. The how can vary wildly but the general picture is the same; embrace natural advantageous and utilize them effectively, mitigate the weak points, appreciation to empower pyramiding, pyramiding to achieve infinite returns, infinite returns to grow assets under control, grow assets under control to achieve level of assets to then "flip the switch" too debt paydown via OPM, to achieve and end of certain level of passive income debt free. 

It is a math game, plain n simple. With strategy to execute and best express the math. 

And yes, if wondering, yes, I am "the" definitive strategist. Sun Tzu is my messiah. 

> If you invest in multifamily as a group, there are no acquisition fees.

That is exceptionally false, and misleading at best if not patently fraudulent. 

A MFH transaction has costs of transaction just like SFR's. Their is agency costs, legal facilitator costs, inspections, not to mention GP's fee's on top of it all, and so on and so fourth. Those costs are either seen and known, or encapsulated into whatever generalized price one is paying. There is no magic MFH leprechaun empowering a cost free transaction of real estate.

> I invest in other people’s syndications. ....I’m not running the operation.

For a large majority of people, that is a giant risk position, it's fearful and uncomfortable to have such loss of control.    And there is a great number of stories speaking of the risks come to pass, and the substantial loss of $ from such horrors realized. 

It is all great and fun, until it isn't, and then it's a living nightmare. 

> I like helping people grow. Way more exciting.

And i applaud you for that. Sad truth is, it's not universal, and all too many in the syndication space hold very different motives and focuses, ones not aligned to the best interest's of the LP's. It is very much so a world of LP's can make $ if and when GP's do, and if GP's don't, oh-well, sorry for your loss LP's, and onto the next.... 

> I disagree that people on this forum don’t want to scale, they are just trying to work out how to do so. Why else would anyone spend time reading a post like this?  

Because they want to profit. The vast majority are seeking out how-to, but don't want to put in the work for the how-to, so they keep looking around, seeking their "Golden Ticket" because of some belief that there is some easy, simple, risk free thing out there and that is how "those" people got rich.     The have-not's hold a popular sentiment that the have's got to where they are via some hidden secret, access to something, a knowing of something, a connection, tip, trick or hack. 

The secret is, there is no secret. 

Somewhere out their is someone who's wildly wealthy via urinal cakes.... Another via running a boring manufacturing plant making paper straws. 

Wealth is all around us all the time, literally millions upon millions around this world achieving it coming from nothing. That is the majority, the minority inherit. 

And a prevailing story is of putting in the work, over time, methodically, consistently. 

One has to first choose to be wealthy, second accept to put in the time and the work to walk-the-walk, and third SHOW-UP day after day after week after month after year after year. 

Wealth is a RESULT, not a thing in and of itself. 

Add 1, to 1, and you will get 2. If one set's to their equation, does the actions of addition, the results are inevitable. 

Syndications are and always will be risky because one is putting their financial future in the hands of others, they are relinquishing control. That is a fearful thing for many, and rightfully so. 

Does it mean syndications are bad? No. They are what they are. 

Syndications are right for some and not for most. Why not for most? Because a very common thread of those seeking or living as REI's is a passion for FREEDOM. FREEEEEEE-DOM! It's the spirit that literally forged this nation.

And the dependency that is a feature of syndications, is an impediment on this spirit of freedom. 

Go back a few hundred years and many of us would be the same people jumping on a ship to cross uncharted waters to craft unknown lives. It less a passion for the currency and more a passion for the LIFE of self actuation. A life of choice, unhindered by the necessity to do ___ to pay ___ so we can live ____. Financial freedom means life freedom, freedom of self, liberation from the shackles of j.o.b's. 

If money stopped existing, what would you be doing? Everything, every resource in such plentiful that $ no longer exist..... 

That's the true deep desire of most seeking financial freedom, it's not about the financial as much as it is about freedom. And hence scaling is just not an interest for most, not nearly as much as simplicity and expediency to get too freedom. 

More is not more for many of us, it's just more...... 

That's a really cool opportunity. I don't have anything like that. My portfolio is entirely single-family homes in the suburbs. I know the market like the back of my hand and would never feel comfortable buying a containership for bitcoin or just to haul cargo - it's not where I have an unfair advantage. The only other field I could invest would be construction equipment rental - I have worked in that industry on the manufacturer side and I have seen how profitable equipment rental is. Plus I understand enough about excavators, skid steers and diesel engines to hold a conversation with a mechanic..

I'm not buying anything at the moment (largely because we've got some money tied up in a Mexican property). 

But my clients are almost exclusively STR investors in Colorado, and they tend to buy mostly turnkey properties. I've had one or two over the years buy something with rehab/value-add potential, but mostly we're looking for ready-to-go properties with something unique about them. An A-frame, incredible views, wall of windows, 5 or 6+ bedrooms, etc.

The OP question is very hypothetical because it leaves out the personal context. 

If you get $10M out of the blue (inheritance), odds are you'll lose it within a year or two. But if you are self-made, you'll continue building on your knowledge. If you were a farmer, you might just buy more land. If you are in tech, maybe you build 3 data centers. If you don't have RE experience and start with $10M chances are you'll blow it.

Preservation becomes your #1 concern; you don't want to go back to working for paychecks, so you'll do whatever feels the safest and that is typically a field you have experience and knowledge.