Investing in Multi Family Properties-150 to 300 Unit Deals with Chris Larsen

 

Episode: Investing in Multi Family Properties-150 to 300 Unit Deals with Chris Larsen

Guest: Chris Larsen is the founder & managing partner of Next Level Income. He’s been syndicating multi family property deals since 2016 and raised more than $15 million over $150 Million in acquisitions.

Big Idea: Buying High Quality Assets when No One Else Wants them Can Generate Huge Wins. Chris’ company is focused on identifying high yield passive investments ranging from real estate to oil & gas leases.   Specific to oil & gas, Warren Buffett recently amassed a HUGE position in Chevron leveraging this same principal.  Everyone was selling off oil due to the Pandemic and the coming of electric cars.

Big money can be made if you know what you’re doing.  On this episode we discuss this principal as well as dive into his asset selection process, favorite multifamily markets, & some risk mitigation strategies that served Chris well during the recent pandemic.

 

    

Dan Breslin: Chris Larson is the founder and managing partner of Next-Level Income. He is been syndicating multifamily property deals since 2016 and raised more than $15 million over $150 million in acquisitions. Chris’s Company is focused on identifying high yield passive investments ranging from real estate to oil and gas leases. All in this episode, we dive into his asset selection process, favorite multifamily markets, and some risk mitigation strategies that served Chris well during the recent pandemic, as well as some other topics. Let’s get right to it.

All right, Chris Larson. Welcome to the REI Diamond show. How are you doing today?

Chris Larson: Dan, I am great. I am excited to be here with you. Thank you.

Dan: Nice. It is always looking forward to this high-volume multi-millions of dollars raised and you know conversations I get to have with guests like you, but you know for anyone who does not know your name already maybe does not know about your podcast. You kind of want to talk about maybe the evolution of your career, starting with let’s say you are first deal and then ending with your current business model Chris.

Chris: That sounds great. So I love real estate, I set off to be an investor when I was really a teenager. It is kind of a long story short. I race bicycles. I started racing when I was 14, and I will never forget that feeling of freedom I had when I first left my neighborhood on my bicycle. And it really instilled in me this ability to kind of go where I wanted to and do what I wanted, and when I was younger that meant racing my bike. And I got my driver’s license, I was excited to get my driver’s license so I could drive to races outside of the state. And so I was traveling, when I was 16 years old, up and down the East Coast across the country, and plans raced even at a national level. Until I was in college, and at that point, I want to be a professional cyclist.

I went to Virginia Tech I was doing an engineering degree and no I did not want to be an engineer, but I also did not want to be poor. And if anyone knows anything about cycling, they know those bike racers are pretty poor unless you are racing in Europe, which is a very very small portion. You just do not make a lot of money, like a lot of professional sports. So I was entrepreneurial. I would do different things in college, but I quit cycling after my best friend, my training partner my roommate, passed away. He had a massive brain hemorrhage. And spend another year kind of poured my heart and soul into the sport, but I realized I was not happy. I still wanted that sense of freedom and I thought well, I am not going to race my bike anymore. I am not going to be an engineer, What am I going to do?

I started day trading in the stock market in the late 90s, which there are a lot of similarities today Dan, in my opinion between the market than in the market now. This is very exciting also very stressful. So here you take a junior, 20 years old in college making $5,000 a month day trading but could not sleep at night. And one morning at 3 a.m, I just remember thinking, what the hell am I doing? And I start, I kept reading books. I have always been an avid reader and I started learning about real estate.

 

Episode Sponsored by the Deal Machine:

Driving for Dollars Software to Build a Team of Drivers, Manage Routes, & Even Automate Marketing.  Free Access at  http://REIDealMachine.com/

Resources mentioned in this episode:

www.NextLevelIncome.com

 

Chris & I Discuss How to Avoid Capital Gains Tax:

  • Multifamily Property Market Selection

  • Upcoming $100 Million Deal

  • The Power of Purpose in Your Life & Career

  • Reasons Why Larger Deals Offer More Control


    

Relevant Episodes: (There are 187 Content Packed Interviews in Total)

The transcript of this episode can be found here.
Transcripts of all episodes can be found here.

Land Entitlement Process for Multi Family Development with Reed Goossens

 

Episode: Land Entitlement Process for Multi Family Development with Reed

Guest: Reed Goossens is the host of the popular podcast “Investing in the U.S.” and also author of the book by the same name.  Reed was an engineer with experience in large scale development including infrastructure for the London Olympics in 2012.  He now focuses on buying, building, & operating large multi-family assets throughout the U.S.

Big Idea: “Even though a lot of institutional dollars have started to become big, big players in the game-we’re still selling to a group that is more entrepreneurial like we are.  We left meat on the bone”  Reed describes being able to sell the deal for MORE money than if he were to complete the renovation on the other 70% of the units.  A better bang for the buck by NOT finishing the deal.

 

    

Dan: I was listening to a multifamily investing podcast the other day and one of the members that was a, I guess on the show, I cannot remember what show it was, had 4 or 5,000 units. He sounded like he was probably in his late 60s or early 70s. So he had this nice solid multifamily career and he was looking back and he said that around the area now from what he is hearing, like the big names Blackstone and these are private equity Wall Street types. They are not afraid of the floating rates. They do not think that rate risk is going to be a realistic threat certainly at any point in time 2, 5, 7, or 10-year term that these big smart money investors are supposed to be doing business.

So he kind of shared the same sentiment as you and just did not view that as much of a risk. I mean, who knows who is right. So 12 deals in what? What is your exit strategy? Do you end up selling these at any point? Have you sold any of the deals that you have done or are you still in hold periods on everything?

Reed: No, good question. We start our first deals were in 2000, 2016, early 2017. I have been involved in multifamily as a Co-GP prior to that. So probably 2 or 3 years prior to that early 2014 I got started, but I really started my own shop at the end of 2016. So I have been into the 8 years in syndication space and then in terms of your exit strategies, yes, we are actually coming to exit a couple of deals right now, and they are the deals that have the most flexibility on the debt, right?

The deal we just spoke about that it was speaking to you back and previously in 2018. I cannot exit that deal because I have gone over big prepay, right? Unless someone to come and assume the deal, the deal is not sucking wind by any means of making money from my investors, making cash flow. So just keep it, we write out the prepay, but we have another two sets of deals. The billboard as a portfolio and we have to bridge on those deals and we have had them for about two and a half years now. We are going to, we sort of popped your head up thinking, okay, we can refile here or we can sell. We popped her head up and did a bit of an off-market type of shop around and we have got the number we wanted to hit and for this time period they give a good pretty solid return for investors and we decided to execute on the sale.

If no one had taken bit at the number we wanted, then we would have gone for a refi, but the opportunity to exit at multiple points along the deal is exactly what we assess every single day on over to go but on a very consistent basis to understand where the markets out and particularly with cap rate compression, compressing as interest rates continue to go lower that is you seen that shock wave across the country in terms of multifamily particularly in our area of Central Texas. So yes, we constantly look at what is the best opportunity to exit for deal for investors. A little bit selfishly, we as a company, myself, my business partner Andrew and I, as we are growing to 12 and hopefully going to go double the portfolio in the next 3 to 5 years, people are starting to ask.

Where is your schemes on the wall, where your runs on the board, and that is where you go to start pointing to the cycle deals, and how would it go, what was the returns, and we are really happy to say that we have finally come into the first set of deals that are selling and got to make a nice healthy little profit for all our investors involved?

 

Episode Sponsored by the Deal Machine:

Driving for Dollars Software to Build a Team of Drivers, Manage Routes, & Even Automate Marketing.  Free Access at  http://REIDealMachine.com/

Resources mentioned in this episode:

www.ReedGoossens.com

 

Reed & I Discuss the Land Entitlement Process for Multi Family:

  • Finding the Right Lawyer to Prepare your Zoning Application

  • Understanding the Political Factors in the Zoning Process

  • Timeline of the Land Entitlement approvals

  • How to do Your First Land Entitlement deal


    

Relevant Episodes: (There are 186 Content Packed Interviews in Total)

The transcript of this episode can be found here.
Transcripts of all episodes can be found here.

Financing Million Dollar Deals Post Covid with Anton Mattli

David & I Discuss:

  • Post Covid Commercial Real Estate Market

  • How this Compares to 2008

  • Deals which are Difficult to Now Finance

  • How Underwriting will View Your Deal


Listen Now:

Google Play

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Relevant Episodes: (There are 163 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.PeakFinancing.com

 

Do You Know Anyone Else Who’s a Real Estate Investor? 

Do You Think they’d Also Enjoy this Episode?

Please Forward this Link & Tell Them to:

 

Sign Up for the REI Diamonds Weekly Podcast Your Copy of “Become a Wholesale Real Estate Master”

Just Go to www.REIDiamonds.com to Download a Copy & Check out Recent Popular Episodes.

Avail the Free Property Management Platform with Laurence Jankelow

Laurence & I Discuss:

  • Cycle of a Landlord-Move in to Move Out

  • Automate every step of the process

  • Auto-pay tenants ACH

  • Credit Report, Background, & Lease Signing Online


Listen Now:

Google Play

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Relevant Episodes: (There are 161 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.Avail.co

 

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How to Take HUGE Depreciation using Cost Segregation with Yonah Weiss

Yonah & I Discuss:

  • Generating Tax Deferred Income using Depreciation

  • Bonus Depreciation exceeding all of RE Pro’s Income

  • How to do Cost Segregation

  • How Cost Segregation Helps You Raise Capital


Listen Now:

Google Play

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Relevant Episodes: (There are 158 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.MadisonSpecs.com

 

Do You Know Anyone Else Who’s a Real Estate Investor? 

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Just Go to www.REIDiamonds.com to Download a Copy & Check out Recent Popular Episodes.

Negotiating No Money Down Commercial Real Estate Deals with Peter Conti

Peter & I Discuss:

  • Commercial Lease Options

  • Selecting the BEST Single Family Investments

  • No Money Down Deals

  • 5 Step Offer System


Listen Now:

Google Play

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Relevant Episodes: (There are 156 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.CommercialLeaseOptions.com

 

Do You Know Anyone Else Who’s a Real Estate Investor? 

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Sign Up for the REI Diamonds Weekly Podcast Your Copy of “Become a Wholesale Real Estate Master”

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Growing a 1,000+ Unit Portfolio within a 20 min Radius with Jason Pero

Jason & I Discuss:

  • Organic Growth in a Local Market

  • Benefits of a Tertiary Market

  • Buy & Hold…Unless


Listen Now:

Google Play

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Relevant Episodes: (There are 154 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.PeroRealEstate.com

 

Do You Know Anyone Else Who’s a Real Estate Investor? 

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Selecting the BEST Passive Multi-Family Real Estate Investments with Travis Watts

Travis & I Discuss:

  • Seeking Monthly vs Quarterly Distributions

  • Transitioning from Active to Passive Investor

  • How Multi-Family Might Fare During Covid

  • How to Underwrite a Passive Investment Team


Listen Now:

Google Play

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Relevant Episodes: (There are 154 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.AshcroftCapital.com

 

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From Corp America to Owning $42 Million in Multi-Family Real Estate with Agostino Pintus

Agostino & I Discuss:

  • Turning Around the “Fear Mentality”

  • Buying is Easy, RUNNING the Deal is the Hard Part

  • Never Underestimate the Power of Sales Skills


Listen Now:

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Relevant Episodes: (There are 151 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

Text “FREEDOM” to 202-410-4202

 

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Making, then Losing $50 Million with Rod Khleif

Rod & I Discuss:

  • Building a $50 Million Portfolio

  • Losing said Portfolio

  • How to Recover from a Loss like a Boss

  • Buying & Managing Apartment Buildings


Listen Now:

Google Play

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Relevant Episodes: (There are 148 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.RodKhleif.com

 

Do You Know Anyone Else Who’s a Real Estate Investor? 

Do You Think they’d Also Enjoy this Episode?

Please Forward this Link & Tell Them to:

 

Sign Up for the REI Diamonds Weekly Podcast Your Copy of “Become a Wholesale Real Estate Master”

Just Go to www.REIDiamonds.com to Download a Copy & Check out Recent Popular Episodes.