How This Indianapolis Investor Built 10,000+ Units

Our guest today found himself $200,000 in personal debt in the 2008 crash. Today, he has over 10,000 residential units. If you don't know us, where's Reality Co. , an Indianapolis real estate team that have helped over 400 families buy or sell in this city. Today, Ivan Barrett talks faith, fatherhood, and how he used residential real estate to scale his business. Ivan, welcome to the show. Thanks for having me. You've always been a hustler. You were mowing your dad's rentals at age seven and then in your 20s you were slinging land deals and condos. Tell us about those early days. That's a great question. So, going back to me as a kid. So, I got out of mowing my dad's lawns. Um, I was moaning about it one night and he said, "Well, if you if you don't like doing this anymore, go get a real job." And fortunately, a guy was canvasing our neighborhood looking for paper boys. And you only had to be 10. Uh, so at 10 I got a job working as a paper boy. Told my dad, you know, go find somebody else to do all this manual labor for you. And I started a paper out and did that for many years. Uh, never was really that into sports, although I was active a lot, but always had a job. Paper out, locker room at the local uh, pool, worked in a pharmacy for a while, and then started getting sales jobs in high school. When was it that you knew you had a knack for sales? That first sales job at Glendale Mall, uh, selling for the athlet. Yeah. Yeah. Broad kid. Yeah. Selling at the athletes foot in Glendale Mall, which was the Foot Locker competitor. I think it was maybe maybe two bucks an hour plus commission and started learning that I sort of had this knack for being able to to sell and influence others, you know, knowing my products really well. actually got in trouble or got a talking to because I would plan my schedule around Jordan drops and I would come in early and I'd have the Jordans like the most popular sizes strategically placed. I knew exactly where they were. And when those doors opened, man, I was running as fast as I could to put Jordans in people's hands. And then we'd sell out of the Jordans by like 11 o'clock and I' I'd go to the line manager be like, "Hey, you know, if you don't need me for the rest of the day, I'll just I'll just knock off now." You made all your money right there. Who needs an 11? There was a 12 over here. Yep. And the other sales guys were were ticked. Oh my. Because I was I was just beating him to the punch left and right. The Glendel Mall. I uh I operated a GNC is my sales background in the Glendale Mall. I remember that. Oh yeah. Foster. Slinging supplements. Slinging supplements. shoes and supplements. So then you made a jump into real estate that took a turn in the 2008 crash. Can you take us through that? Well, so leading up to the crash, I I got I got out of college um and I got my foot in the door with a developer. I'd had some sales skills because I'd worked through college uh at another another sales job and got thousands of atbats talking to people. And coming out of IU's business school, I knew I wanted to get into development, but I didn't there really wasn't a path back then. it was either going to brokerage or go be an analyst for Arthur Anderson. So, I came back to Indie uh did some more sales for uh Resort Condominiums International running a sales team and then really got my foot through a friend of my parents. Uh I got my foot in the door with some developers and was selling condos in Broadripple. um did really well at that and got more uh development deals from this developer who was also developing uh single family home neighborhoods and selling those lots to custom homes uh custom home builders and I was his sales guy. And so I got my foot in the door by being able to say, "Hey, I'm really working to to learn, not to earn." And so I would only get paid a commission as like an independent contractor more than an employee. But I got to wear all these little hats and follow them around and and learn things. And at the height, I had 600 lots that were either developed, ready to sell, um, being entitled, uh, meaning we got the zoning approved, or they were in development, getting ready to be, uh, pad ready for a builder. I had 600 of them all in Caramel and I had uh a few hundred condos that were coming online and then 2008 hits and they they literally all go off a cliff. Oh my gosh. Yeah. Developers are sending the land uh back to the bank cuz uh prices crashed. Condo uh developer went bankrupt and I'm $200,000 in debt. How old are you? Uh mid20s by this time. Wow. Yeah. Mid20s. Why did you go into debt if it was another developer? Well, so I was a commission only sales guy, right? Okay. And so I had one rental property and one condo that I never should have bought because I bought like the most expensive condo in Broaderpool in our in our project. We've all had deals we shouldn't have bought, right? And I thought, well, I'll just, you know, helocks are this great great uh solution. I'll just borrow the money against my real estate equity to maintain my lifestyle because I'm going to be a millionaire with all these lots that I've got in my uh my sales pipeline with the pipeline. Yeah. Carry the one. I'm going to be rich, right? And so it literally like went from, you know, selling hundreds of lots to to off a cliff zero. And so I'm I'm $200,000 in debt uh negative like five grand a month in cash flow. my uh my wife, who's my girlfriend at the time, is realizing I'm I'm not as uh successful as I as I portray myself to be. Yeah, the facade's fading quick. And um yeah, that was um that was a real hit to the ego. Um definitely emotionally um probably a little bit depressed at the time, you know, not knowing what to do. And of course, now looking back on it, it was one of the greatest gifts that God could have given me at that at that age. I was so fortunate. What did you learn from that? Well, don't don't take on debt to finance your lifestyle big time, right? Um, and I learned that if we're, you know, if we're always betting on the on something to sell, that at some point when winter hits in the cycle, because real estate's a very cyclical business, when winter comes, you're you're kind of naked, right? M and at the same time I saw these um these multif family guys get stronger, bigger and uh and continue to to do deals. So I really started taking a deeper dive on multif family, learn more about the financing and how that's different from every other real estate class. um learned pretty early on that that rooftops uh are are something that's uh you know a core product versus say you've got a retail and you've got a nail salon and a sub shop and and a boutique people need a roof over their heads and so really taking a deep dive on that um decided that that was really where I wanted to be. I wasn't going to be a developer. At the same time, I'm learning about forced appreciation and how if I can buy something that's in trouble or distressed and and how to add value, the kind of, you know, wealth that can be created from that. And I I know you and I have maybe talked about this a little bit before, but it was still like this big ego check because I had this fancy degree from IU, finance, real estate. I worked in development on these big deals and I'm still thinking like I'm going to somehow go out and do a big deal. And as soon as I got the ego like got out of my my own way and said, you know what, I'm just going to do the next deal. As long as it's multif family, as long as it's two or more units, I'm just going to go find a good deal and try to start layering. And that's when I discovered layering property management in as a business to drive my real estate dreams. So started very small in my spare bedroom. Wife uh who at the time um decided to stay with me and fight it out together thankfully. She was winning the she was winning the bread at the time. Let's go. And I was just doing little real estate deals, helping people buy and sell houses, some land deals, and started to pick up some little management deals. And every time I made a commission or some money, I was paying down the debt that I had that I created uh while while she was keeping the lights on. That's amazing. So, you're you're going from a paper out selling shoes straight. You know, you get your degree and then you're selling condos. I think what's interesting is a lot of people's advice is to get a job in real estate before investing and partaking in real estate, like investing. Um, and what they mean by is like go get comfortable and get something that's going to pay the bills, which you kind of had, but then you took some debt to fund your lifestyle. And once that uh the rug was pulled and the commissions couldn't cash, you then have to figure it out and start to rebuild from there. Like a lot of times people go and get comfortable working under a different big capital firm or a big multif family investor and then they don't go out on their own because they don't have there's no scarcity to send them to even know what abundance is. They're just taken care of. Um, how do you think that played into starting the BAM companies? Well, a couple things there. I I totally agree. People tend to build these safety blankets or the the this comfortable sort of uh nest that they're in, right? And then the bills start piling up. The mortgage, the car, kids come along and it becomes a lot harder to maybe take a risk. BAM was born out of um initially not really wanting to be in property management initially, you know, when that was first floated to me by my brother who's also was an entrepreneur. I'm like, I don't want to do that. That's hard. It sucks. You know, it's tenants and toilets and seven days a week. How much of that did your parents do on their rentals as a kid? They they self-managed, but my dad never got past maybe 12 units across, you know, the phone ringing on Sunday. Sure. Yeah. Absolutely. Yeah. So, I I had a little bit of taste of it, but then I I kind of inverted that to like, wait, wait a second, I can do what other people hate um in order and they'll pay me for it. Yeah. Right. And I was doing hard money deals at the same time. So, around Reading Kler South of where you guys are are looking. Uh right. Like right on the edge. And people thought I was crazy, but I was looking for the most distressed multif family in an area I knew that was coming back. And I was using hard money to do those deals. So like Sobro or was this near north side? Where were you? Uh 3930 central. Um class C. Oh yeah, they were back then. They were rough, but I was I was um upgrading them and making them better and charging higher rents. There's like a sixplexes or what? Yeah, the first one was three and then I bought a bankowned sixplex. Um that would have been around like 2009, 2010. When did the dial switch from um management focused uh it even sounds like sale focused to um raising capital and scaling focused? When did that shift or did was it Well, before we before we go to that, what I want what I really wanted to impress on you guys is what I figured out was the time it took me to put together my own deal, hard money, forced appreciation, right? the burr method uh and then refinance and do it again. It might be six months to a year because I've got to look at a hundred deals. I've got to make offers. Then I got to find one. I got to close it. I got to renovate it. I got to tenate it, right? And not get paid while doing it, right? But if I can convince Tyler uh from Southern California or uh from north side of Indie who's got a rental property or two that I can manage better than he can for a fee and take that off his plate. I can make the equivalent same amount of cash flow over a meeting. And so I'm like, "Okay, I got to build this." That's one of the easiest sale calls in my experience. I've had to sell like property management for third party property managers. Yeah. It's like one phone call. They're like, "Yep, sign me up." If you have a [laughter] pulse one phone call, you you've won the deal. It's a one meeting close for sure. For sure. Quick pause so I can give you some free game I normally only give to clients. When it comes to renovation projects in Indianapolis, House Construction has quickly become our go-to. House specializes in inspection repairs so that when you get a report that comes back loaded with a bunch of problems, they'll get you a quote fast with work that you can actually execute on. click the link down below and we will connect you to house construction today. So that that was really what started the growth engine was taking on management projects for other people and and building that. I think I got up to maybe a thousand units across Indie. They were all one to four family. My rule was uh anything where I don't have to carry a gun. So mostly you know a little bit of C plus but mostly B and some A stuff. Um and that growing that first gave me cash flow. It allowed me some some operating room to hire people and start figuring out that whole process, which is way harder than the real estate is growing that that service-based business. How big was that team to do a thousand? Oh gosh. Um, by the time I got up to a thousand, there's probably 20 people. Yeah. Has to be. Yeah. Yeah. Um, and then at the same time, I was introduced to these guys out of Southern California that I was managing properties for. And I had bought a 35. I bought a 30 and I bought a 15 unit and it was time to move up to a 60 and do like a real syndication with multiple investors. So those those smaller ones was like one one investor just your own equity. No, it was one investor and an operating agreement, not the full syndication, which is a private scary Yeah. private placement memorandum. A little more legal framework when you're pulling capital together. Um but I took my business plan for this 60unit deal. Uh it's called Foxhill Apartments up on Foxill by Orchard School in Fox. I drive by it all the time. Yeah. Yeah. Yeah. Uh I took them my business plan and because they had seen my management uh abilities for the last year or so, they said, "Yeah, sign us up. We'll invest." And uh fast forward to today, my second biggest concentration of investors is SoCal. And it all started from those those first guys and doing well for them and then making referrals to others. So, when I was listening to the syndication podcast you were on, you mentioned this that many of your PM clients became your LPs. I'm just curious how that conversation went. Was it like they're frustrated from being landlords? Was it an easy sale? Did you have to do some education there? How was that pitch to them? Well, at this point, he's managing. So, it just be them being owners, right? And being on the hook for when that you're calling like being landlords like too at that point. Well, what a lot of what and I think you guys are starting to realize this too. They were like, "Well, okay, I pay you a management fee and and you know, something always happens. The furnace goes out, the water heater goes out, somebody skips out on the rent." They've lived there for 2 years. We got to recarpet it and we got to repaint it now and it's a 2,000 foot house and it's not wear and tear or it's not, you know, damage. It's just wear and tear. So, they're like, I'm not making any money at this, you know, it by the time, right? by the time I'm 80, I won't owe any debt on it. I'll have some money. You only make money from appreciation from single family rentals pretty much. Correct. Yeah. So, that was a was a a helpful transition to, hey, here's a business plan for buying 60 units. Here's how we're going to raise the rent immediately, right? And here's the improvements we're going to make to do that, and here's what it's worth after we do that. And so that was um because I had the management infrastructure sort of already built, that was a much easier conversation that hey, I've been in real estate. I've never managed this, but I think I can sort of framework. Yeah, it was an evolution. Yeah. Where you carry people with you. Do some of those people still invest with you from Oh, yeah. Yeah. I've got uh we've done 44 deals uh a little over 10,000 units and some of those early investors have been in every one. Oh, that's incredible. I think you get started and you have to learn the lesson in the single family. Like I don't know if this would make any sense, but as an LP, I would almost want or as a GP, I'd want my LPs to have at least one rental experience so they understand what they're getting into from that. It's like it's the it's not the easy seat, but it is easy seat. more thankful for the work you're doing. That's for sure. They're at least more appreciative and and not as worried. It is. It is definitely a smoother conversation with our LPs. We've got a little over 1,800 of them now uh that have some real estate experience. So, we're we're a really good match for folks that have real estate experience. Not all of them do, and some of them need more education, but it's definitely helpful. Yeah. I've helped over 90 investors buy single family homes in Indie in the last four years, and I would say five of them have bought more than one property. And of those five, three of them are like happy with where their portfolio is at. Yeah. So, if you just math that pool out, there's a 85 people that still want to invest, still can invest. And it's not 2018 anymore, too. No. Costs have risen. Like, there are market factors in that. I don't think it's all just single family suck. That's the end of the story. I think it's more nuanced. You did say before the before we turned on the mics, single family is a get-rich slow. What is your opinion on single family rentals in general? It's so hard for me to just give a blanket statement like single family sucks. That's why I'm asking, which I I I'm not gonna I'm not going to give you a sound bite that just says single family sucks. I think it's a great place to start for a lot of people. Uh I just don't think it's the endgame. Um and so kind of what you were saying about, you know, being comfortable, one of my real estate mentors, one of his common refrains was do a deal at whatever size you're comfortable. Right. Don't listen to somebody says, "Oh, you got to do a 40-unit deal out of the gate." Or, "Oh, you got to do a single family out of the gate." Start whatever gets whatever gets you moving. Right? So, if if somebody's looking to be a full-time real estate professional and operator, my my advice is to start wherever you can start and and move from there. And then the other the other half of that is how are you going to make it a business, right? Real estate is so capital intensive. And what's what's made uh my success has been layering on these businesses, right? So, we started with a property management business. Then we layered on some construction business. Um and then the the biggest layer now on top would be the the capital management business. How do we have the best customer service? How do we have the best reporting? How are we super responsive to our investors? Um and having a whole business around that. And those businesses dovetail nicely. And my favorite LPs are the entrepreneurs, the business owners that understand an operating business and what it takes to run that. And my one of my favorite formulas is find a business that can funnel cash into your real estate portfolio because it takes a lot of cash, right? It takes a lot of cash. Yeah, that's right. Capital intensive all the time. It takes a lot of cash. Are those literally separate businesses? Um, yes. Yeah. Same office. Yeah. Uh, but run separately. Different teams, different employees. That's fascinating. Yeah. Not trying to get the brain gear spinning in there because that's uh obviously just a lot larger than the operation we have going. But it's fascinating. Well, because you started off with partnerships, right, on the smaller deals and that's evolved into now you have to have two operating arms. It's not possible to do it at the at the clip that you're going to have the money be tied up with the properties. They can't they have to help each other, right? And the structure essentially. Yeah. The they're they're they're own businesses, right? And the the goal of the property management company is not to generate profit necessarily. It's more of a break even. But it's how do we have a management company where people like their job and we're really focused on culture. Yeah. And taking care of the maintenance guys that take care of us and the property managers. So we spend a lot there on culture and that builds this beautiful human machine that executes the wealth strategy for me and my investors which I'm aligned with my investors. This is where I put my own capital. Mhm. And so that becomes its own business. And because we um are successful and service our customers well, they send us more customers and that generates revenue. Mhm. Um to buy these types of deals. We're buying, you know, deals 50 60 70 million. It it also takes a lot more customers. We've got to continually find new customers. very fortunate. [clears throat] Our our still our singest single greatest source of of uh investment is uh reinvestment by our our current customers. Second greatest source is referrals. No big rocket science there. Treat your customer really well. They'll send you more customers, right? And um it's very scalable. It's it's not it's a simple business at its core. It's just not easy to execute. Uh, it's very hard, but the juice is worth the squeeze. Yeah. What's the worst deal that you've had to just Oh, let's go to the worst. Yeah. [laughter] Just walk straight up the hill. Let's do it, man. That 30 35 unit. I I bought it from my uncle who owned two apartment projects. Uh, it was his worst one and he thought he was just burned out and couldn't run it well. Like, he did not try to sell me uh a lemon. But it was in Beach Grove and so I made a bunch of mistakes on this. I thought Beach Grove was going to be like Speedway and it was the downtown was going to kind of come back the same. It hasn't really changed. Changed at all, dude. Um I thought I was buying a C property. I was buying a Dminus at best and everything that could have gone wrong with that deal went wrong. Mhm. Uh, sewer line collapses, people not paying rent, bed bugs, drugs, homeless people sleeping in our laundry room, more bed bugs. I think we had a a suicide in there, more bed bugs. like the police department all I mean it was dude I was on the news because during like the super heavy snowstorm uh the carports collapsed on somebody's car and the the car it collapsed on you slum lord the car it collapsed on was the woman that refused to pay carport rent and wasn't even supposed to be parking under there we were trying to get like 10 bucks a month for a carport spot and she's like I'm not paying that you're just scraping dude so um everything that could have gone wrong on that on that deal went wrong. Learned to sell. How could you have seen that? [clears throat] Still sold it 5 years later for a 9% IRRa. So, we still made like 9%. Yeah. What was like the first red flag that you probably could have seen in underwriting or due diligence? [sighs] What's underwriting again? [laughter] I was young and and eager and gung-ho to do it. And thankfully, you know, that investor rode through that with me. Uh and he's still uh an investor and a friend today. Um, but yeah, if I had a time machine, I definitely wouldn't have bought that deal. Um, should have done much more homework on the market, the collections, you know, my my uncle had a guy that was doing the maintenance that I had to like fire within two weeks. He was awful, right? My uncle's like, "Oh, this guy's the best guy. He does all these things for me." And I'm like, "Yeah." You know, when he says it, I'm like, "Oh, great. Box checked." Then I get in there, I'm like, "This guy is awful. He's just he's just I mean, think your uncle hustled you. [laughter] Still love my uncle. Still love my uncle. He he uh did not know what he was what he was getting out of and getting me into. But it in many ways, man, I you know, I wouldn't trade it. I learned a ton without getting hurt. Made a return uh and kept moving forward. We have a pretty juicy door count deal staring us in the face and I'm like, I see all the red flags and but half tempted to just run straight into it is part of it. Yeah. I' I've done a lot of section 8 um in apartments. It can it can work really well. You know, uh you just jumping from scattered site, which is smaller apartment deals where you don't have on-site manager to full-time staff. It's a big jump. Uh I took it on a 100 unit deal a couple years later. Um so I wouldn't just sit here and say, oh, you know, if it's an older property, don't do it. We I started in older properties, bought a deal in Speedway that was built in the 60s, did really well on that. You know, it's just opportunity and then uh your ideas are worthless. You got to execute. From tracking kind of your story, it sounds like you started kind of like us in the trenches and then um got into some vintage deals, 60s deals, um you know, 70s apartments, and then now you're doing class A. From what I heard from your own team, they're like, "We only invest in the caramels of other cities." So, it's like class A. Nice. Um, how do you think about um risk mitigation with these types of swings you're making? Like, is it hard to sleep all at night or how is that? Well, I mean, we could go down a couple different paths there. You know, right now we've been in a multif family recession for three years. So, there's there's a lot of turmoil going on right now. Um, buying class A, if you can find a deal where there's enough upside, right, it's still you got to find the right deal. Um, there's got to be some something you can fix, some sort of management issue or some distress in the market, some sort of value ad. You have to still get value appreciation, right? We might not be getting it anymore by swinging a hammer, but we still have to get it somewhere. Otherwise, the returns don't make sense for what the investor community wants. Buying class A takes a lot of risk off the table. Um, you've got more economies of scale. you've got a higher credit resident paying rent. Um, it still doesn't feel easier, although maybe in some ways it is, but I'm still dealing with with people and um the management of the asset. It's so operationally intense. And then that class A tenant who's paying two grand a month for an apartment has high expectations, right? So you want to keep you got to keep your ratings up if you're going to keep your occupancy up. So it's just a different muscle group. You've got to learn to flex. They definitely have different expectations. Yeah. But if if I started all over again, Max, if I was your guys' age doing this right now, I'd absolutely be looking for older deals, mom and pop owners, um you know, neglected property where where where there's a lot of capex that hasn't been spent. Somebody's just tired. Well, that's what we just bought. Yeah. Yeah. So I it's a great way to force appreciation. Great way to force appreciation. Where are you sourcing these deals? Is this handwritten notes? Is this trying to find their home and knocking on the door? Yeah. At this level, it's all controlled by the institutional brokers, the big brokerage houses, the CBRRE, the the Walker Dun Law. They're actually worth something. What's that? They're actually worth something. They go to work. Oh yeah. Yeah. They control this stuff. Yeah. Now a lot of stuff still moves off market. Yeah. Yeah. Um, and so because of our reputation, uh, we don't ever retrade deals. We do what we say we're going to do when we say we're going to do it. So, we've got my my business partner is a former, uh, Kushman Wakefield broker. Our broke relationships are worth their weight in gold. So, they want to bring you deals because they know you'll perform. Yep. So, a lot of deals right now will trade off market. You're a seller. Maybe you're being forced right now to sell the deal and you've got to liquidate. you don't necessarily want to put a big tour out there or or do a big um you know marketing uh blast. You come to me the broker and you say, "Hey, bring me your two or three best buyers who have assurityity of closing the deal." And for investors listening to this, that's how residential is too. I'm bringing my best flip deals to the guys I know will buy it in cash, you know? Yep. And so what I used to do with guys like you when I was doing my little deals is I would say, "Hey, I am a broker, but if you bring me a great deal, keep the commission. Keep your whole commission. I want I want the deal." For all those listening, we have a small multif family. We'll pay you a commission. Some things don't change, right? Yeah. Yeah. Yeah. Absolutely. Now, we absolutely How have you thought about where we're at in the market cycle? It's been a difficult market the past couple years, dude. We are in a multif family winter and it's a cold one. It's the cold market. It's the coldest one since 2008 for sure. Yeah. It's not quite a 2008. Well, you had this confluence of events that nobody really, myself included, like saw coming. You had the fastest rise in interest rates ever. You know, 500 basis points in a very short period of time. It's never happened before. Um, you had wage inflation, right? You had uh municipalities chasing property taxes. you had insurance go up. So you had all these things happen at once which which brought NOI down uh with debt costs, insurance costs, everything going up. And so you had all these deals that were done in 22 23 that were done uh in a very different environment that uh people thought would continue to to go. Um, for example, right now, uh, we're not under contract yet, so I can't tell you about it, but we've been awarded the deal, and it was like us and one other buyer because there's a lot less biders right now on these deals. Syndicator bought it for $275,000 a unit in in 2022. Um, we are under we will be under contract. We were awarded the deal at 2 thou $26,000 a unit. for a virtually brand new property that would cost at least 250 260 grand to rebuild today. Ouch. Congrats. But ouch. Yeah, he's losing allity. All of it. The equity is vaporized. It's gone. Happened to Brandon Turner recently. Yeah. I I I would I would give Brandon Turner a pass. I know his operating partners very well. I don't know Brandon, but I know who his operating partners are. And those guys got screwed over by a by a predatory maybe not predatory but a pretty bad lender. I heard the story. It was more nuanced than the social media. Yeah, social media have you believe one thing. Brandon hooked up with great partners. Um they did all they could. They added a ton. Was hit hard with high vacancy. It was a perfect storm. Uh fortunate for me, you know, the Midwest did her job. She didn't boom and she didn't bust versus Houston got hit real hard. Austin, South Florida, these places over supplied. Thank you. I almost forgot. And that that minor detail too, you saw a lot of over supply hit these marks. Like a million units at one time being constructed that are all just released at the same time. And then it's like interest rates jack up. Yep. If you look at the graph, yeah, a lot of developers are getting um a vaporized as well because they're now being forced to sell these assets. They can't hold them. And so we're we're looking at deals just far below replacement cost. What do you think about new development and not in your venture building new, but just in general for affordability in some of these class A areas? Are they underserved in the Midwest? Do we need more units? Is housing like where do how do we fix the housing problem is the kind of overarching question. Yeah, that's that's pretty far outside of my my competenc [laughter] to to fix I like pretending I'm an economics nerd, but fixing the fixing the the housing issue is going to take a lot of a lot of um effort and and and legislation, right? Especially when it comes to affordable. But the good news is in a lot of places the affordable guys are able to build a lot more now. So if we're talking like tax credit, subsidized deals, there's there's a lot of that coming. Development is inherently more risky. Yeah, you're putting all your eggs in that basket and then you've you've got to execute. And just like what we're seeing right now, the developers that that built in the last few years, they if they've got staying power, they they'll be able to ride through it. Like some of the bigger ones in town, I won't I won't name any names here, but we're mutual friends with. Um they're going to be fine. Yeah, they've probably been on the podcast, too. Yeah, I I think so. But uh you know some of the guys that some of the guys that don't have that staying power that are that are having to sell in this market are taking taking hits uh as well as their investors. Yeah. And and it just it floores me when you see a Houston that's way overs supplied, right? But then we still have a problem here because there's not enough units. It's like net net across the United States we have enough units. It's just I don't know. I get I get way too into the weeds. Well, it's all it's it's such a local game, right? It's such a local game. What I would tell you guys is like this is game on season. I am I am working my tail off right now to to get every dollar we can in the door to buy more deals because this is one of the great corrections of my career and they don't come along that often. Um when it gets difficult it gets good. I did really well in 2010 11 and 12 doing small duplexes in and so bro mid and Kesler right and on a percentage scale I crushed it. Um, but those were smaller deals. And then we we, you know, we continued to crush it to a certain degree up and through 2022. Just like everybody else, my 22 late 22, 23, 24 deals are going to be my my worst returns. I'm still going to have a positive return, but they're not going to do as well. And then now my 24, 25, 26 stuff is just I'm licking my chops. I can't believe what I'm being able to buy this stuff for. Mhm. And that those those corrections just don't come along all the time. There's opportunities in every market, but then you get these periods where if you think about what's going on right now, every other asset or investment is is doing well and everybody's investing in AI and you know the S&P and power generation and all these things and multif family is one of the only ones that's on sale and it's it hasn't been on sale like this in over a decade. I love that mentality. How many of those sellers are coming to market at the price that they're closing? No one. No one. Hold on. No one who doesn't have to go to market right now is going to market. Yeah. Yeah. Yeah. Yeah. I ain't selling is Yeah. Right. Right. Um I'm waiting. I'm only buying right now. So everybody that's got staying power is just waiting. Yeah. But we're seeing more and more distress now hitting the market. Banks are saying, "Hey, dude, you got a list. Capitulation time." Yep. Right. Um, so this this guy that we're buying this deal off of, um, once we got it awarded, he he opened up a little bit. He's like, "Hey, I got another one coming I want you guys to look at." Like, "Can you do another deal?" And we're like, "Yeah." Quick break for a second. If you're doing any kind of renovation work in Indie, you already know finding the right vendor partners is half the battle. It might be the entire battle. Best Flooring is one of those partners for us. Phil Nelson and his crew offer the best selection out there. From a single bathroom refresh to a full gut job. Check them out at best flooring on Lake Plaza Drive. Use Apple Maps to get there or Google Maps, whichever one of your choice. Phil's got floors and you need them. Call them up. Ivan, I want to make an important transition here. I've heard you've been growing a ton in your relationship with Jesus. Would you take us through that? Great question. I've been way more intentional on surrounding myself with Christian men, being in a Bible study, um, calling on Christian men when I'm when I need help in my marriage or my life in in general, right? Just rubbing shoulders with more more guys that are trying to do the same thing and and trying to grow that relationship and that that proximity. Um, you know, iron sharpens iron. I've just really started leaning into that a lot more. And one of my goals this year was to lead my my family a little bit more biblically. Right. And be able to, you know, lead with scripture. Yeah. And uh and really be the father that I'm designed and supposed to be and the husband. Right. And so that's been um that's been a growth. Well, I know for me, thanks for sharing. I know for me you're like go go go go go go in real estate and it's like money, you know, money's just on your brain or like pursuing a deal or whatever and it's not all pursuit. It's not all profit like screw people over. No, but then you get home and it's like unless you make that intentional shift and it should be a shift through the day, right? It's not like money. Oh, God first. No, it's God first all the time, right? We're stewards ultimately of our businesses and real estate and money. But um I think I had that false paradigm of like oh now I need to switch into father or like good good husband mode and it's like no you need to be the same person all the time is what crisis is calling you into yeah I' I'd push back a little bit on that. Not much. I I get I get where you're going. Uh what's some good advice I got recently from a gosh [snorts] guy's in his 70s now. Been married for 50 years. Gary Rosberg awesome guy. He's got a bunch of books. He was like, "Dude, you need to have an Ebenezer on your way home." That once you pass that Ebenezer, once you pass that, it could be a telephone pole, doesn't matter what it is, but you're going to switch. Mhm. You're going to stop thinking about the the e the economy. You're going to stop thinking about, you know, the deal you're doing, college 91st, and you're going to get your game face on. Yeah. And you're going to come in that door, right? ready to do some dishes, do some homework, hug your wife, engage with your kids, you know, put your phone away, and I I can slip out of that very easily. I'm not I don't have it down perfect by any stretch, but that's been something that's really been um uh I've been thinking a lot about and trying to implement, right? Because when I'm going to work, my mind's already, you know, on work and accomplishment and pursuit. When I'm going to the gym and get my game face on and get my workout in, even if I don't want to. same thing when I go home. So, you're right, Tyler. I'm the same person, right? But I've got a different job there and it's very easy for me to spend all my focusing on the functionality you're in being the best to your potential in each one. Yeah. In each venue, because it's very easy to say, I'm tired, right? And, oh, honey, can you handle the kids tonight? I'm super tired. I left it all on the field at work. And sure, we all have those days. But, you know, if I was halfway up a mountain, I'm not going to stop climbing because I'm tired. I'm going to keep going. So, I I absolutely can do the same thing and have the same approach to to family. And it's different like what you're talking about is the spirituality being carried through the day and and allowing God to be first in everything and be your your first start. But genuinely, college 91st, I had a coach, our shared coach uh gave me that recommendation. I'm like, I keep coming in. I had this crazy long commute and I just recently moved. So, it's like 7 minutes now. And when I had the crazy long commute, I was taking calls, doing all the things. Yeah. I was like burnt by the time I got home anyways. So, like the phone got put down and the radio got turned on at some point. So, I was already starting to to chill. This short commute, no time to process. And so, it's like once I hit college and 91st, phone's down, dialed in, like love it, stop processing, walk in, and be a great husband. I struggle with it. It's immensely. I still I still struggle with it because it's so it's it's so hard to turn that off when when I have to be so focused on these things to do them well. Right. You're going from like 100 RPMs to then, you know, cradling a baby or doing dishes or like whatever. You know, you're in a great space, man. So, my So, I've got a I've got a clock ticking a little faster, right? My kids are 14, 12, and 10. I've got this window that I can see closing. So, it's like, how am I going to influence them and shape them and help them figure out how God designed their gifts to balance where your company is at with that leadership and then having teenagers and they're at such a formative stage and looking up to you, that's it's a lot to balance. So, well, the the best thing about building a big company is that you can get it to a point and my approach is take a smaller slice of a bigger pie. So key employees, leadership have have an interest in the business. They have part of the the potential upside of the business, right? And so I can put a lot on them and sort of re rejigger my pie chart so that I've got more room for what matters most, but I can still put the amount of effort in uh on the business side. It's just I'm more like that mentor development stage. Still love talking to a lot of customers. But it's it's not just me and my partner anymore trying to figure this out. We've got a team that we can not only delegate to, but give them the room to make mistakes and learn and grow. What were the mentalities to take those quantum leaps to the next stage? Like Yeah. So I mean you're going from so I'll use eye statements here. So I go from soloreneur right to small business owner. Yep. Um, and each one of these stages, um, which are sometimes hard to identify until you've got them in the rearview mirror, but what I do on a regular basis is what am I doing today that got me here that's not going to get me to where I want to go next, right? Yep. Because I passed my ability to work harder years ago. It's way back there selling shoes, right? I can't I can't even being the solrepreneur, the small business owner, I can't just work harder and make things happen now. It's different. um to okay, now we've got a bigger company and I've got to focus more on leadership, training, development, and and being more in that mentor role. And there's all these stage gates along the way. And what's what's really fun is if you if I keep learning, if I keep looking inside, if I keep sitting at the feet of people that are higher up the mountain than me, uh, and now more so than ever, higher up the mountain and and faithful, um, then I get to keep learning through other people's stories and gathering this wisdom to help me make my next step up the hill. If you don't know somebody who's made an exit in a business, then how would you ever exit a business? Like that kind type of mentality, knowing where to point towards like and that works any sort of subject matter, right? It's it's being able to say, "Hey, I'm I'm a CEO. I'm down here. I see you up there. Would you mind telling me how you how you got up [clears throat] there?" Yeah. Right. I love the like if you're thinking about if you're playing tennis in high school and you're just playing and training hard enough to get to the collegiate level, you'll probably get there. But if you train like you want to go and win the biggest title. I should not have used tennis because I know nothing about tennis. Let me the open. Is it the open? Am I right? You're a swimmer. Yeah, I was a swimmer. If if I'm training to just go to college and swimming, I'm I'm going to go to college. But if I want to getal seven medals or whatever he got different in high school, he was training three times a day. Yeah. Where most high schoolers were training twice a day. I love how you said that. And one thing we used to say a lot around the around the company is, hey, we're not a small business. We are a big company that just happens to be small today. And what would that big company do? Right? So, same thing with with Phelps, right? What what would when Phelps is 15, 16, what would a seven gold medal, I don't even know if it's seven, but what would a seven medal winner do today to be that guy, right? To be that. What is it? I think it's 22 gold. 22. Sorry, Michael. A little bit. It was eight and one by an order of magnitude. No, 22. Sorry, Michael. Sorry. [snorts] Yeah, that's exactly right. And and preparing yourself to take those quantum leaps. What would your advice be to a dad of teenagers, to a dad of toddlers? Oh gosh. Podcast episode number two. Yeah. Right. [laughter] Well, uh so uh so uh if you got girls, I would ring I would read Strong Father, Strong Daughters. Um uh there's there's um uh a great book for boys called Wild at Heart. Yeah. Um so really learning uh how God designed them. Also, you know, what makes them tick and and um man like the the the father-son relationship, the father-daughter relationship so important. There's there's, you know, don't stop learning. Make that part of your your knowledge diet, right? Not just how am I going to get better in business, but how am I going to be a better dad? Um, and I'm happy you guys call me. I'm happy to happy to share more on that one for sure. But that same approach to business, right? I'm going to go sit at the feet of people that have been there before, right? [clears throat] I'm going to read books on this subject matter. I'm going to read stories. Like I love reading autobiographies now of of founders that did amazing things because it's this their actual story is so much more captivating than just another business book on like how to do EOS or how to do this or that. Yeah. There's a system for everything and scale for everything. Are you talking about the you said the founders podcast? Is that what you were mentioning? Oh, founders uh founders in general founders audio books are great. But a great hack is the founders podcast because David Sra can take an autobiography and give me more information from that autobiography in an hour. Yes. Than I can get reading it myself. He has got such a gift. It's like that's his purpose. one episode people should go to. Man, [sighs] asking for selfish reasons. I'm gonna give I'm gonna give my take after. I mean, Rockefeller is a monster. That's a monster book. See, I couldn't choke it down, dude. I wrote like half of it and then I just flipped over to founders. I just flipped over to founders. So, I I was a history teacher. I was like, David, tell me what I need to know. [laughter] Yeah, I can't do it. Um, that's a great pick. That was gonna be my I was gonna say I think that's probably my Invest Like the Best and Founders are probably my favorite podcast right now. Yeah, Patrick Shaughnessy. It's a great great one. Need to get that back in there. Yeah. Uh we'll skip ahead. I know you guys want to ask me all all about books, but just so I don't forget his most one of his recent episodes, The Dow of Investing or sorry, The Dow of Fundraising. Uh John Kim, I think is his name. And he just came he just came out with his book, The Dow of Fundraising. Interesting. Freaking It's a banger. It's a banger. It's gold for sure. Got to get that one. Get that in the mix. Well, we'll shift gears. Uh we wrap up every episode with some rapid fire questions. If you want to kick it off, Tyler, what is your go-to indie restaurant? The go-to is Monterey. I We do date nights a lot in Monterey. We just love the seafood, love the people that serve there, and um yeah, they pour good drinks and got great great sushi. Do you run into Paul Thrift there? Because he said that he goes there once a week. I have not run into Paul yet, but Paul and I are new friends. So Paul and I just started hanging out and so uh that's funny. I'll have to uh keep an eye out. I love that. Hey, invite us over. We We know you both. You guys [laughter] the millionaire club. Yeah. Yeah. If you foot the bill. [laughter] I'm there. I'm buying every time you guys Monterey. All of us. [laughter] Yeah. Oh man. The best part about being at my level is I get to buy, you know, it's it's fun to to to spread it around. It's great. You were just saying that you love books. What are the top three book recommendations? So, I knew this was coming because it comes on a lot of podcasts and and I'm going to assume your audience is kind of like you guys um and entrepreneurial and looking to build a business maybe in real estate or or adjacent. So, if it is, you know, Ken Moy is a good buddy of mine now and I one of the things that was the catalyst to start uh BAM was his book on property management. Kenny Malroy is like a rich dad author. Uh I think he's got better information when it comes to multif family than than Robert does, but that's Robert's business partner. For the listeners out there, don't listen to what Robert says anymore. He's gone off the deep end, but his books are still great. So Kenny Mroy, uh I think it's the ABCs of property management and then the advanced guide to real estate. great great early, you know, foundational stuff on running a property management company, which I think is a a great way to uh parlay into doing bigger deals. Um, I already gave you the DAO of of fundraising. If you're going to if you're going to go big in this game, you got to learn how to raise capital, whether it's, you know, real estate or any kind of business. And that one I I just I love what he's done there with that book. It's not the end all beall, but it's a it's a great it's a great piece of the puzzle. and something a little more tactical. Tactical, I'd say buy back your time, Dan Martell. He's just got some great tactical stuff in there. I wish I'd had that when I was younger. I would have hired assistants and done things much faster. Um, we've been, not to pat ourselves on the back too, but we've been ahead of the curve there, I think, in our age group in doing that pretty well, but we could probably do it better. Yeah. It's hard. There's [laughter] room for improvement. Yeah. Yeah. And then there's like the distraction of AI trying to buy back your time, which is like not the smart way to go about it. But yeah, I agree. I've got a I've got a personal assistant. She's a real person. Uh she knows me. My wife likes her. She us. Yeah. And she takes so much off my plate. Not saying you guys need a full-time personal executive assistant yet, but she buys back so much of my time now. Like Yeah. My issue is I have fractional ones. Yeah. Just consolidating. I have a real estate one who does showings for me, then someone that does like bookkeeping, finance. It's just one person be great. Well, sometimes that DNA doesn't exist and you need, you know, you need Yeah, you might be right. Multiple people and multiple people builds redundancy in your system. I think we just need money. You don't have a single point of failure. Yeah. More revenue. [laughter] That's my advice. More revenue, guys. Yeah. Yeah. Drop the mic. Uh, right. Next question. What's the best piece of investing advice you've ever received? Oh man, we can do a whole podcast on that, let alone a rapid fire question. They're never rapid fire. Yeah. I mean, you notice the best investing advice I've ever received um is it's it's around this idea that, you know, real estate or gold or stocks, those in and of themselves are not great investments. It's how great of an investor are you? How how good are you at your craft? So it it's along those lines of focus on this one thing, know it inside and out. Do it really really well. Whether it's real estate or stocks or starting a company or a service or or whatever. The value is not in what you buy. It's being your operator. [snorts] Yeah. Yeah. Or or if you're an investor really knowing those like knowing those companies, right? I think a lot of people are out there speculating, right? So if you're going to be just still back to the operators of Yeah. It comes back to the operator, the education, your body of knowledge. Are you taking funds and uh it's like you're really great at real estate? People invest in you. They bet on the horse for real estate. How much are you betting on a horse and other facets like stocks or somebody investing in gold or crypto? Yeah, I' I had a little gold phase when I was younger, so I've got some gold, right? Uh but Pokemon cards. I think it's funny thinking of Ebenezer. [laughter] We got some gold. Yeah. You know, but what the I don't like gold for the same reason Warren Buffett doesn't like gold. I can't do anything with it except hope that it's worth more in the future. I would much rather buy a hard asset like real estate where I know I can force that appreciation or I've at least got high conviction. Yeah. That I can do it. And right now I'm in nothing but cash in my own deal. So, as a as a fund manager, investment manager, steward of capital on behalf of my LPs, I am all in on my own my own cooking and super highly focused on that. You you don't spread across thousands of apartments, but Right. You don't own stocks? I own zero stocks. Okay. Yeah. Which has been really hard the last couple years. My No, I'm joking. It's been really hard the last couple years. And I'm not telling anyone on this audience not to own stocks. I'm doing what I do because I I'm in a a unique position to be able to do it in a big way. This is not investing advice. This is three dummies with a microphone just talking about what they like. That's right. Educational purposes only, ladies and gentlemen. Yeah. Uh my uncle is a big gold guy. He uh trades it's like he does coins and eBay. It's more collectibles, I think. I don't know. He watches podcast. I'm going to get a text. So, if he's got some asymmetric, you know, value there where he knows he if he gets it for this, he it's worth more. It's a business, right? Yeah. He's treating it like a business. That's great. Um, well, this will be an easy one. What's one habit that's changed your life? Working out. Yeah, that's an easy one. I fell off the wagon uh when I started my business and was, you know, 30 lbs heavier than I am today, not muscle, all fat. um and just became stressed out, tired and and overworked and and uh applying that daily discipline to uh fitness um has dovetailed into discipline in all facets of my life. Is that going to diet or anything with that too? Uh the diet's still a roller coaster for me because I've got I'm not going to blame my kids for their pizza and chicken fingers. Um that's that's on me. That's on me. But uh you can't train the pizza way, but you can try. Yeah, you can try. Ask Ask my dad's opinion on this. His conviction is it's 90% working out, but I think he just has metab. No, I know. I'm like, you're dead wrong, dad. Like, you're going to die earlier. You need to stop eating a bunch of pizza and stuff. I think he listens. Well, we got him. We We got him on that stuff. His diet is like basically [snorts] eats like a bird through the day and then he's like, "I'll just eat whatever I want." So, he's got the calorie balance, but I'm like, your nutritional Yeah. like intake must be awful. Like, you're just starving [laughter] yourself than eating a bunch of pizza. Well, I know he's on he's on supplements now, so he's he's better now. But yeah, I'm I'm a nail breakfast and lunch kind of guy. Uh breakfast is mostly liquids and supplements and whatnot. Nail lunch every day. And then I'm a little more flexible at dinner. So, like last night was a healthy dinner. You know, Friday night's going to be pizza king with the kids. It's almost 100% probability and I I just, you know, just try to make mostly good decisions. That's awesome. Yeah. Well, Ivan, thanks for coming on the show. It's great to have you. Yeah, thank you. It's great to be here, guys. This is a lot of fun. Yeah, this is an honor, man. Appreciate it. Make sure to like and subscribe and drop a comment below. What's your diet regimen look like? Peace. [laughter]