What happens when you do not take the steps to adequately research what you want to invest your money in? Making a plan and really becoming aware of the deal you might invest in could lead you to avoid future problems with investment. Today, WTR welcomes Rodney Miller, co-founder of Trident Multi Family, a real estate investor, and an entrepreneur. In this podcast, we will be discussing what to look for in a good deal and how to increase your wealth by hedging your future with real-estate investments.
Investing is a great way to build wealth, especially when it's something you are passionate about.
Ingenious tactics to accumulate wealth, for people who see things differently.
Co-founder of Trident Multi-Family, real estate investor and entrepreneur.
[00:26] Kevin: Today, I'm joined by an expert guest Rodney Miller. Today we're going to talk about hedging your future with real estate
[01:02] Rodney is the co-founder of Trident Multi Family and he's a real estate investor and entrepreneur. Would you mind sharing with us a little bit about where you came from and what inspired you to do what you do today?
[01:23] Rodney: I got a degree in business and worked as a claims adjuster for a few years. I purchased into a business in Oklahoma. I wanted to think about my legacy and my kinds so I started buying real estate
[02:20] Real estate is a fun business and you can do it on your own time out of your house and can do very well at it with a very minimal amount of time (something you don't necessarily need to retire from)
[03:29] Kevin: If you keep a purpose going, it keeps your mind and body active and it keeps you healthy and happy and you have a longer quality of life (whether it's real estate or you have a great hobby that you enjoy)
[03:42] Rodney: You should always be learning and always be challenged. I think when you stopped being challenged, you start cognitively slowing down (you have to do something that ignites your passions)
[04:06] Kevin: We're going to talk about your passion, which is the real estate, so our listeners can get a little more information on how to hedge their future, help them (should there be a downfall in the market). As a disclaimer, we're just giving information so our listeners are better informed and so they can do research and decide what is best for them on their own. So the Multi Family Syndication, why that?
[04:42] Rodney: Well I started off with single-family homes and then around 2008 when the markets crashed, I had about 70 single family homes that were bread and butter C class houses
[07:08] What that boils down to is a solid investment. If you have to put your money somewhere you want to avoid a huge hit (C class real estate has a level of stability)
[08:02] Kevin: How is it regarding the tax situation?
[08:07] Rodney: Well I'm not a tax expert, we'll start there. It's not what you make, it's what you keep. If you invest in stocks and bonds and make a lot of money and you're in the 30% tax bracket, you have to really factor in your tax stuff. With Multi Family, the government really likes it
[08:27] We get really good terms, not only in lending, we get 30 year mortgages and then non-recourse debt because the government loves these stable assets
[08:50] Banks like to lend off and spur growth. There's a shortage of Multi Family or the C class folks so the government really incentivizes operators like me to buy it and fix it up and put people in there, and they do this by giving us tax credits (ex: 1031)
[10:00] Kevin: I'm curious, is there a point where you say now it's time to sell and roll it over into another property? Is there a general timeframe? What's your strategy with that?
[10:10} Rodney: So when we underride a deal, we locate a deal that makes sense to us and we're looking between 100-300 unit apartment complexes class C and we're pretty much in the mid-south
[10:32] When we find a deal, we underride it from a 3-5 year plan
[13:26] Every deal is deal by deal basis, we don't pull people's money. We find a deal, we tell you the story about it, and you decide if you're going to put your money in it or not
[13:54] Kevin: We've been talking about the Multi Family indications, so what is and how does this indication work?
[13:58] Rodney: So we operate in compliance with the SCC, so when we do a deal, we form an LLC and then we put together an offer (70, 30 split with our investors)
[14:56] We file and accept the offer and we take all the risk involved in the deal, and we tell you the merits of the deal and then you decide if you want to invest in the deal. If you do, there's certain paperwork you have to fill out (you'll either need to be accredited or sophisticated)
[16:32] The rich are getting rich by going and buying stocks, bonds, and mutual funds and waiting long term (they're building their assets)
[17:36] Kevin: People should make a plan, not necessarily have all of their eggs in one basket, maybe have a favorite basket/club. People need to do research because a lot of people invest without doing research and that's when you can run into problems
[18:44] If our listeners are thinking that they might want to head in this direction, what should they look for in a deal?
[18:58] Rodney: Every deal is different. You need to be just as concerned about the operator of the deal as you do the deal. Because a great deal with a bad operator is not a great deal. It really comes down to who you invest your money in
[20:42] Kevin: When you're looking for a deal, what are the characteristics you're looking for typically?
[20:45] Rodney: 100-300 units, we want to be in the mid-south (growth of these states), class C housing, and it has to have value (something we can to do improve the property)
[22:17] Kevin: Before we close for today, I am going to ask you for a WTR value bomb, which is what in your experience should our listeners look to avoid doing and what could they do about it?
[22:30] Rodney: Just what we discussed earlier. Avoid making an investment before you have researched in depth what you're going to invest your money in (you need to know the business model, industry, markets, and the operators)