July 25, 2022

Investing 4k miles away and the lessons learned

Investing 4k miles away and the lessons learned

In this episode, the founders of Adventurous Real Estate Investors Suzy Sevier and Michael Barnhart take us through their investing journey where they started investing in Multifamily in the US while being 4 thousand miles away during the pandemic. They share with us their systems for getting so much done with the time difference they face, working W-2 jobs, managing their assets, the issues they face, and much more. This is a tell-all episode that is truly info-packed.


Segment Timestamps

  • [01:05] Who are Michael and Suzy.
  • [05:17] Michael and Suzy’s start in Real Estate.
  • [09:37] Why Multifamily was the way to go.
  • [13:40] Investing overseas.
  • [17:54] Finding potential partners.
  • [20:09] Raising capital 4k miles away and putting investors' minds at ease.
  • [23:25] The NOT so sexy part of raising capital.
  • [25:20] Suzy and Michael’s scary story.
  • [35:08] Michael and Suzy’s view on success.
  • [39:44] How Michael and Suzy co-exist in their business and stay in sync.
  • [43:39] Time-saving hack that helps simplify their business.
  • [46:00] Top 3 tips for aspiring investors

 

Episode Highlights

  • “I have also learned not to take anything personally and so to think of that, don't take anything personally and then hurt people your mindset changes on how you communicate and treat others.”
  • “when it comes to the moment where I want to stop, or I want to quit, stop working, that is the moment that I realized that I need to continue.”
  • “success to me is being able to impact as many people as possible.”
  • “we did the traditional educating ourselves, going to meetups, going to conferences, but the biggest thing is, that we did was that we took action.”
  • “we made that decision on Tuesday and by that Friday, we were in a networking event that was all about multifamily investing, and by getting ourselves in the same room as people who are doing the things we wanted to do, changed our life, change our mindset because when we got in there we realized that guy or that gal looks and talks and acts like me. Like, it looks like me, if they can do it, why can't I do it? And so, it was a huge mindset shift, a mind-opening experience for us.”
  • “the biggest thing is impact, multifamily has impacted us in a different way where we can impact entire communities.”
  • “our big why is how can we continue our love of education outside of a traditional classroom? What we want to do is go and live in third-world countries and build something that they need.”

 

More About Suzy Sevier and Michael Barnhart

Suzy Sevier and Michael Barnhart are the Founders of Adventurous Real Estate Investors. They specialize in a different ROI, Return on Impact. Through real estate investing they create immeasurable impacts with the residents they serve to create thriving communities.

 

They are the owners and asset managers of 388 units across Oklahoma and Texas. They host "The Adventures of a Real Estate Investor" podcast and they host a monthly meetup for real estate investors living overseas and investing in the United States.

 

Michael is on Active Duty in the Air Force, getting his Ph.D. in biochemistry from the University of Cambridge and Suzy is Real Estate Professional and has a background in project management and finance.

 

Relevant Links

Website:          Adventurous REI.

Podcast:          The Adventures of a Real Estate Investor Podcast.

LinkedIn:         adventurous-real-estate-investors.

Instagram:       adventurous.rei.

Facebook:       adventurousREI.

Resources:      http://adventurousrei.com/impact.

                        http://adventurousrei.com/info.

Books:             The Book of Joy.

                        Think and Grow Rich

Transcript

No BS Apartment Investing Podcast – Suzy Sevier & Michael Barnhart   

 

[00:00:00] Marc Cesar: All right, welcome back everyone to the “No BS Apartment Investing” podcast. I am your host, Marc Cesar. And on this episode, we are talking to none other than Michael and Suzy, Michael Barnhart and Suzy Sevier. And today they will share their amazing journey of investing from overseas. And you will definitely learn insights on how they've managed to acquire 388 units and counting from overseas and how to make real estate so fun. Let's jump right into it. And Michael, Suzy welcome to the show.

[00:00:47] Suzy Sevier: yeah! thanks so much for having us. We're really excited, to share our journey and then definitely share the fun and the not-so-fun part of our journey.

[00:00:58] Marc Cesar: I love it. So can you guys give us a bit of background on who Michael and Susie are?

[00:01:05] Michael Barnhart: So I'll start. So, Michael Barnhart, I have been in the Air Force now for 17 years. Enlisted, as an officer and as an Air Force officer now, my main career in the Air Force has been acquisitions. So, I've been trained in program management skills, scheduling and budgeting, and things like that, so a lot of those skills transfer over to multifamily private investing, which is awesome. Since I'm towards the end of my career, before we actually move overseas, I was teaching at the Air Force Academy, which was my dream job in the Air Force and so I was teaching there with a master's degree and so they sent me now to get a Ph.D. and that's what we're in Cambridge, England is where we're currently living, which is about an hour north of London and getting my Ph.D. I'll be finished up next year. And then eventually, we'll be back in Colorado teaching at the Air Force Academy. And that's when I finished my military career and transitioned to real estate full time. This little bit about me.

[00:02:17] Suzy Sevier: So me, I have no military background. So, I am an undergraduate, I had an anthropology and Communication Studies degree. And for the longest time, so many people ask me, what are you going to do with those? And the great answer is, that I went into accounting, which never thought that those would mix, but they did. And so if you know me or even get to know me, throughout this podcast, you will find out that accounting is not my personality. So with that, I went back to school and got an MBA, and I found out my love for supply chain. And so I got a project management position in the supply chain department over here at a biotech company. But throughout that process, this crazy event happened across the world and that made me realize the power of real estate and what it can do. So now I am a full-time real estate professional as of a couple of months ago and that's changed a lot for us. But even going into that then, Michael and I started our whole entire journey, because of COVID-19. So during the first lockdown over here, it was a little over 100 days, and we had no idea how long it was going to last but everyone was sent home from work. And so Michael and I decided to start a mini book club with each other. And one book led to another, which led us to Multiple Streams of Income by Robert Allen, and in the second section of the book talks all about real estate. And Michael would be the first one to read it, the book and then I'd read a second. He was like just skip the first part; we need to go straight to the second leg. Let's check this out. And so once we had found out about Biggerpockets and then about Military Millionaire, one simple Facebook post, which was, other people living overseas investing in the US, we got quite a few yeses. But that is all that we needed to jumpstart our career in real estate investing because we knew that other people were doing it and we knew that it worked. And so from there, we did the traditional educating ourselves, going to meetups, going to conferences, but the biggest thing is, that we did was that we took action. And what I mean by that is that we created relationships with different vendors, whether that was brokers, property managers, or other syndicators in the space so that we could be in a position for when the US went back to in person, we had made those really important relationships. So it was every day, we had pretty much asked ourselves if everything was taken away tomorrow as in virtual, would we be satisfied with what we did today? So it was a mix of a scarcity mindset, but it really drove us into being able to close from all the way over here.

[00:05:17] Marc Cesar: Well, that is amazing. I have so many questions around that little excerpt there. Let's unravel this minute. So COVID hits, and you guys are stuck at home. And you guys did not binge-watch on Netflix, which is what most people would do. I'm guilty of it as well. I probably would have been binge-watching, which is what most people would do, I’m probably guilty of this myself as I probably would have binge-watched a couple of shows on Netflix, but you guys decided to start a book club and went down this crazy rabbit hole and real estate was the common denominator. Now, you guys were interested in passive income, which is super cool. But why did you guys choose apartments as opposed to fix and flip and single families and other avenues of real estate? What stood out to you with multifamily?

[00:06:07] Michael Barnhart: A lot of people whom we've met through, on the apartment side of investing, don't really know this, story. So we actually ended up during the whole education process. We attended, a conference that was a veteran's real estate investing conference where it talked about, wholesaling, flipping, single family, you know long-term buying whole, Brrr’ing, every flavor of real estate. So, we're super overwhelmed, which is awesome that you get to learn a little bit about everything because real estate is for everyone. It's like which aspect of it fits your personality best. At first, single-family makes a lot of sense to us and it's very “safe” because it's just our money and we would figure it out as you go. So, however, there was one session in there that was about multifamily apartment investing, and that was with Whitney Sewell from Life Bridge capital. And luckily, we had the VIP pass, where we were able to ask him questions afterward. And he looked at me, he's like, Michael, you know, you don't have to start with single family, you can jump straight into multifamily. I was like dude you're crazy. No one starts with multifamily. And so, however, that conversation planted a seed in the back of my head, and so I was like, whatever, we'll start with single-family, we'll figure it out. So we spent all this time evaluating all these markets and then figuring out which market we're going to go into, chose a market, built the team that took weeks and weeks to build a team, interviewed all these people and we got two properties under contract and an inland hurricane came through and took out like 60% of the trees in this little market. The city was out of power for weeks and weeks. To this day, the city is still slightly recovering from this thing and it's happened almost 18 months ago now. And needless to say, that was a devastating thing and something we didn't really predict would happen, it's not in our risk profile. However, we took a step back, well, our whole idea of single-family investing here didn't really work out, what we're going to do next, so we looked at our goals, and we decided to pivot instead of panic. And so, our 10-year goal was to get into multifamily. And so let's jump straight into multifamily now and I was thinking back on that conversation that we had with Whitney Sewell and that seed started to grow to an idea and we're as we can do this, we can do multifamily. And so literally, we made that decision on Tuesday and by that Friday, we were in a networking event that was all about multifamily investing, and by getting ourselves in the same room as people who are doing the things we wanted to do, changed our life, change our mindset because when we got in there we realized that guy or that gal looks and talks and acts like me. Like, it looks like me, if they can do it, why can't I do it? And so, it was a huge mindset shift, a mind-opening experience for us. And that's how we made the transition in the multifamily.

[00:09:37] Marc Cesar: That is amazing because I totally agree with air quoting of single family, which is what a lot of people who are investing, they typically start off and they get comfortable. And I believe that a lot of investors when they get stuck in the comfort of single-family and multifamily is daunting to them, it's like all right! I can't raise the money, or the deal is too big, the numbers are too big, they get scared. So, kudos to you guys for actually jumping ship and it's unfortunate that it took a scary situation for you guys to pivot but nevertheless, you guys still pivoted and now you guys are rockstars in the game. So why do you guys wake up every morning and say, you know what? I love my job but I'm going to immerse myself in multifamily. I'm going to look for more deals, I'm going to raise more capital, what is that burning Why? What is the drive that awakes you every morning?

[00:10:41] Suzy Sevier: So there's like a couple of things that go into that. That’s a great question. So, the biggest thing is impact, multifamily has impacted us in a different way where we can impact entire communities. And what I mean is we can impact our residents, we can impact limited partners, we can impact all of our vendors, that is huge. Besides the fact that as a military spouse, I don't have to go through an identity loss every time that we move because that was really hard to wait nine months to get a new job right after I had gotten an MBA because I needed a visa. And I know that won't happen everywhere, but that sense of security impacted me. When Michael and I spent those lockdowns together, just him and I, that impacted us to be able to want that time and non-W-2 work freedom in order to spend time with each other. And we both have a very strong love for education and so once Michael can retire from the military, we will both do real estate full time, but our big why is how can we continue our love of education outside of a traditional classroom? What we want to do is go and live in third-world countries and build something that they need. If it's a school, that's great. That would be our number one, but we're not going to push that on a community if it won't work there. If they need a well, if they need an orphanage, whatever they could need, that's what we would like to do because, for one, basic education solves so many problems within a community. And so that's the big ‘why’, but along the way, there are so many other ones that get us to that big word “why”, like impacting the residents to hope that they have a safe community that they go to every single day, and that they can call home and that they love. That's huge for us too because I've only ever rented, I've never technically owned my own home. So, I understand the sight of being a renter, and I want to be able to provide the same things that I would want. Granted we want different things, but laundry, for example, that's pretty huge to me, or just responsive property management, even at that level, if I put in a maintenance request, I would like it to be completed. Just stuff like that. It’s where we put our, I guess morals and values into everything that wakes us up. It's, we can do this because it's super cool.

[00:13:11] Marc Cesar: Nice, I love it. Do you have a take on that as well, Michael, or are you in sync with that assessment?

[00:13:18] Michael Barnhart: Yeah, we're totally in sync with each other. And that's what helps us, we both have the same common why. And there might be different things. We have one why, the end, which you talked about, that is in sync with each other. And we're all both striving to get to that.

[00:13:40] Marc Cesar: Yes, that is very powerful. I love the why. And I look forward to seeing that transform and unfold itself. Now, let's, go a little deeper. You guys are overseas, you guys are in the UK, I believe in Cambridge. So how does that work? I hear a lot of people who invest passively from overseas, you know foreign investors, and so forth. But to actually be an active general partner, so you're managing the day-to-day, break that down for us. You from morning to evening? The time difference? How do you guys make it work?

[00:14:18] Michael Barnhart: So it all depends if we're in the middle of an acquisition or not. So, if we’re in the middle of acquisition, we have no time. Acquiring a property is a lot of work for like four months, it's a whole four-month long process. And so, for us that means waking up at five, I work from nine to six in the lab and so waking up at five, working until I go to work at nine, working all day until six and then coming home and spending some nights all the way up until midnight, and then repeating the whole cycle over again. Because when I get home at 6pm here, it's noon in our market. That means we have six more hours basically to work until people start going home and things like that. So, we can literally work until midnight or later sometimes, which quite often happened. And then we wake up and do it all over again. So that's what our work schedule looks like during acquisition. But now that Suzy has transitioned, well, she transitioned full-time back in August and so she's able to do a lot of the stuff like work on the business back end stuff like that in the morning over here when everything's quiet on our market and then I can still be home later to do calls and meetings and things like that when I get home and Suzy is also available during that time as well.

[00:15:54] Suzy Sevier: But before it was, all we were doing was working all day and all night, and then on the weekends, and so now, it's a very nice mix of being able to have nights off and have weekends to go and do stuff instead of just work.

[00:16:11] Michael Barnhart: I think the other part of your question marc was, how do we do it? So that's what our daily schedule looks like, how do we do it from 4000 miles away, it comes down to trust, and partners, and then also leadership on our part, very specific, everything's laid out specifically of exactly how we want it and then we're leading our property management company and our partners exactly how we want to. So, that comes down to, for simplicity, using a proper program management software tool. So we use an online program management tool Asana, there's all those out there, Trello, and money.com, things like that. However, we use this asana, which allows us to communicate, weekly, daily, and even hourly with our property management company. And we do have weekly meetings with our property management company, which is managing our properties back in the states, on a daily basis. And so, we also purchased properties large enough that can support the income, can support onsite manager, onsite maintenance, because that's one thing we didn't want to not have because having a part-time property management company is really difficult when you are managing 4000 miles away. So, we're going to make sure that we had a property management company on-site, and carry out a business plan that we created, at least five days out of the week.

[00:17:37] Marc Cesar: Awesome. So how did you guys build the team? What were you looking for in potential partners? Do you guys have boots on the ground out there that report back to you guys, take us through that process as well.

[00:17:54] Suzy Sevier: I can start with the first part. But we chose our partners through almost consistency. So we had quite a few people approach us to want to be partners. And I know other people get that too because I hear it all the time. But for us, it was like who keeps showing up at meetups and who keeps showing up at conferences because if they're taking in as much information as we are, then for us being far away, that means a lot to see the same people on calls and to just build that rapport. So, it was a lot of that consistency, and then having calls with people to see if we have the same values is the biggest part too, why did you invest or want to start investing in real estate? That question answers a lot of what you need to know about a person and so it was a mix of those two things. But then Michael can go into our boots on the ground because he came a completely different way, which was awesome.

[00:18:52] Michael Barnhart: So, just posting about us moving into real estate on social media. So, I made a couple of posts on Facebook and one of my classmates from the Air Force Academy reached out and he says I just left the Air Force I'm full-time into real estate now, let's chat. So, we got on a call, and we chatted, and he ended up being in a market, he lives in a market that we were very interested in, which is Oklahoma City and Tulsa is up the road and so we had evaluated both of those cities as potential cities that we wanted to invest in. And so now that we had boots on the ground that I already trusted because we went to China for 16 years or something like that and so, we were able to then start building a relationship with him even deeper, and then start looking at deals and he was our eyes and ears on the ground, was able to go look at properties before we submitted an LOI and stuff like that. Now our partners have grown, even more, we have a lot of other partners in the area and now that Suzy’s full-time, she's able to fly back quite a bit to visit our assets, at least quarterly, and stay there, and watches there, check out other properties as well.

[00:20:09] Marc Cesar: That is a very good structure. Because again, I don't hear too many people who are doing what you guys are doing. I'm pretty sure there are but it's good to actually have a conception of how you guys are putting the pieces in place to actually build out the foundation of what you guys are aspiring to achieve. Now, with that said, we know that syndication ties in with raising capital to buy these deals. Do you guys raise your own capital, or do you have someone on your team raise capital? If you guys do raise the capital yourself, how do you gain that trust from investors who are saying, you guys are 4000 miles away, what makes you think that they are not going to run away with my money? Take us through that mindset.

[00:21:00] Suzy Sevier: Yes, so that's a great question. It makes me laugh, because somebody did ask us on a call once, what bank account does the investment go into, and I was like not ours. It’s in the US it is not in the UK, you have nothing to worry about. But we do also raise capital for our own deals, which is so fun and so difficult, all at the same time. But it's almost through the same thing through consistency. So we found out right away that our friends and family were not going to be the ones investing with us. And so for our first deal, it was a lot of people. Yes, there were a few, friends or past colleagues, but it was a lot of under other syndicators in the space and us showing up all the time in meetups and conferences and then putting out content that was huge that people knew that we were serious like if you see someone because we were staying off for those late night calls, we were on the meetup site went from midnight to 1:30. If you see people doing that week after week, you know that they're serious, that’s not something people do for fun. And so, it was all of that and then all the content we put out. For a while, Michael and I were posting on LinkedIn or Facebook every single day. Realistically, we probably still do it four or five times a week, we put out a newsletter, we make the videos, I talk about content, it's consistently another touch point because we're all in a space where a lot of us could find an investment. Yes, a brand new passive investor would have a more difficult time finding five syndicators very, quickly. But all of us have access to a lot of the same deals. And so it's like okay, how do you stand out against all of that? And that's what we tried to do with consistency, because if we are in the forefront of people's minds, then they will remember us, and that's what it is like, we can have calls with people and if we don't have a deal for four months, why would they remember us, if I had not reached out to them once in four months? You know what I mean? And so it was just, remembering who they were, what they were up to if they had a birthday party for their child, how that went, those little. Treating them like humans, I think.

[00:23:25] Marc Cesar: Great that is very powerful. Because I actually see that a lot of people are struggling to raise capital. And I think money is a thing that people don't like to talk about too much, especially in this space. But as you mentioned, Suzy it’s really breaking that proverbial ice, treating them as you are, human, having a simple conversation. Hey, how was the weekend? Were you going to say something?

[00:23:54] Suzy Sevier: No, So just to add to, I don't even know how to word this. I see people who want to come in and be capital raisers and that is fine. But if you go into this, and you've only been doing it for a month, or two, or three, and you're only having a couple of investor calls a week, in the nicest way that's not going to work, you need to build a substantial list and then you need to show that you know, what you're talking about. So, a very non-sexy part that Michael and I did, of our real estate journey was for a while we were doing 20 to 25 investor calls a week. It was a lot to build our list because we had one conference that we went to, somebody said, it'll be like 10% of your list that invests with you, and that's exactly where we were at, for our first deal, was exactly 10%. And but you had to go through a lot of calls to get there because, for us, that was 16, 17 people at a varied from 35 to $100,000. You have to have a lot of the calls and you have to feed them to a website. I see a lot of people doing that too, they start but they don't have a website yet, so people might have to find you. And so there's a lot that goes into it. And that's okay. But it's so much more fun once you have all of the back-end stuff set up.

[00:25:20] Marc Cesar: Yes, I agree. Definitely a key tip here, guys have a website that builds a lot of credibility. It took me a while to get myself, but I finally got it done. So I wish I'd got that tip from you guys way ahead of time that would have saved me a lot of hassle. Thank you for sharing. Now, let's get into the basis of this podcast. Can you guys share with us a situation that you guys did not plan for that went totally left field? How did it go wrong? How did it affect your business? And what did you learn from that situation that has helped you guys become better and savvier investors to date? The scarier the better.

[00:26:10] Michael Barnhart: So yes, we can talk about one of our deals. So, on one of our deals, when we took over the property, the property management company called us and was like, so we took over the property, we started collecting while we took over with a substantial amount of delinquency, we're like, what! And so in further investigation, whatever, we found out the people that were on the rent roll, were actually not paying, however, the previous owner had been lying, and feeding money into his own deal. And the reason why he was able to do that was because he was vertically integrated, meaning that he owned his own property management company, so he was able to cook the books, without anybody raising any questions. So we verified income every which way we thought was necessary. However, when somebody is injecting cash into the business that you can't see, it's very complicated. So he had three properties, and three property portfolio, we bought one of them, but he had all the properties, all the money going into, one bank account. And so he would not share that one bank account information with us. So, we learned from here on out, it doesn't matter, we need to see that bank account information. And there are other things, too, that we found out about the property as well, he also painted over a lot of wood rot, and so looked freshly painted, no issues with wood rot, things like that. You don't go through due diligence or property, especially during COVID, you don't walk around and touch every single wall, you don't have a poker and say hey, is this wood rot, you go in, it looks decent, and you write it down and then you look at the unit you write down and then you walk out. You don't have the time to spend, an hour in each unit and then move on.

[00:28:47] Suzy Sevier: Those are two things that we're actually still working through. And we closed in February and only because with the residents that were still there, who are still not paying since February, getting them out has been a lot more challenging, right because with restore hope came around and it's okay, cool, restore hope did part of there's balance, but then we're back to them, not paying against the whole 30-day notice eviction process starts all over again, in hopes that they would have found a job by now.

[00:29:10] Michael Barnhart: So, for the listeners out there, restore hope it came out of the Cares Act, where people could apply for funding from the government to get payments because if they lost a job, then they can get payments for their rental income or student rental for their rent and then it could be back paid and it could also be for paid by a couple of months, whatever.

[00:29:35] Suzy Sevier: So as people were getting these cheques, but then a lot of people weren't, a lot of people were getting denied and so getting through those residents. Then we found out about the wood rot and it's okay, well, we thought that the property would only each turn for each apartment getting ready for the next resident would only be this amount. Well, when you have wood rot, it doubles, and so then it's going through that and it's wow, this is a journey and so, as of now...

[00:30:07] Michael Barnhart: When we first started this whole process, out of 88 units, we had 20 something, 25 people not paying, that were delinquent, which is a substantial amount. The previous owner had just filled, put warm bodies in there in order to pad the rent roll and to feed income into the business Anyways, So now we're down to three, it took this long with the eviction moratorium as well, because that kept getting pushed out and these people were carrying these huge balances, 1000s and 1000s of dollars, and we couldn't do anything about it, we couldn't get them out. They would get denied for these other programs that the government was offering and we're sitting here, taking it, there's nothing we could do. And then Suzy mentioned, once we finally were starting to evict these people, we are going into the units not only are they trashed because they left it because they're getting evicted, a lot of people trash their units when they're leaving, but then there's wood rot in there, so it's costing twice if not three times as much money to turn these units to good, it has been a challenge. And I have lost all my hair, as you can see from this one property.

[00:31:31] Suzy Sevier: But to say that, though that is one out of four or five properties, so there is really good things and what we've learned is that if they cannot verify income, all the ways that we want income verified, then we won't move forward with a property. And that's totally okay. But even now, it's working with our property manager, setting what true priorities are, and then being patient, knowing that we will get to the place where we are meant to be, and these challenges only make us better operators and that is totally okay.

[00:32:05] Michael Barnhart: Absolutely. We've learned so much about this whole process, and the eviction process, and everything like that, and all these different programs that the government offers, and how to manage a lot of different issues that have come up and that is like a horror story. There are other properties, which is awesome. Our other properties, just to give your listeners a little bit of a boost of confidence here, we closed on another property less than six months ago, we did our first distribution, and we're already returning close to a 12% return on that, and we weren't even targeting 12% ever, in the entire deal for cash on cash flow and for so whatever. We had $0 in delinquency. It's just wild how two properties can be completely different.

[00:32:55] Marc Cesar: It definitely shows that real estate is not a straight line upwards to being a millionaire or a billionaire. It's a roller coaster ride, you're going to have the good days, and you're going to have the crappiest days, where in your case, tenants are not paying and wood rot and, owners are not disclosing stuff. But with that said, did you have to go back to your investors and inform them, had that hard conversation, hey, this is what's going on. We don't know what to do or what was that conversation if you had to have it?

[00:33:31] Michael Barnhart: We communicate with them monthly, in a monthly update. So we've been telling the same story, telling them about this issue with the wood rot and another thing because of the Delta variant of COVID that came through, all this hit once this one property, everything happened. And the Delta variant came through, took out our maintenance, our manager, all those vendors that are working on the property, everybody got COVID, work had to stop, so leasing stop, work stop everything like that for weeks and weeks and then another crew would come in, they would get COVID. And then it would keep this perpetual cycle of COVID running crazy in the fall of last year when we needed to get these units turned, in order to get new residents in. And so it was literally a crap storm of everything happening all at once. So we've been communicating with our investors about this. We're going to have in January of 2022, we're going to have a face-to-face or a zoom face-to-face meeting with all of our investors to let them know hey, this was going on. We have given distribution on that property, however, we're so close. Once we hit these next couple of residents getting out, then it's going to start cash flowing really nicely. So, it took us a little bit longer than we expected and that's okay, and that's totally a thing.

[00:35:08] Marc Cesar: That is awesome. I had to give an award for the scariest story I've heard thus far, you guys would definitely be in the running because with all that adversity, everything is compiling in one fell swoop, but you guys managed to still perform and meet the solutions and meet numbers that you guys didn't predict, that is awesome for lack of better say that is super. I'm sure a lot of people would probably be pulling their hair or just throw in the white towel and walk away but you guys stuck it out. And you guys pretty much kept the faith and make sure that your investors were protected, which is the main thing of this business, protect the investor at all costs. What is success to you guys? Everyone has a definition of success in their minds, but for you both what is success? And you what is your secret, if there is a secret to it for you guys?

[00:36:18] Suzy Sevier: Our secret is that when one of us is down, the other one usually starts dancing. And you don't usually frown when people are dancing. That's big, I wouldn't say it's a secret now but that's a big lift and helps to our success. Because you help somebody get out of a funk pretty quick. But what does success mean to you?

[00:36:41] Michael Barnhart: This is a tough question I think goes back to impact. And because we do focus on what we consider the greatest ROI, and that's a return on impact. And so success to me is being able to impact as many people as possible. It's not a unit count, it's not a number of assets under management, it's not a value of net worth. It is when I reflect back on the day, or the month, or the year, I think about all the people that I've been able to impact, all the people that I've been able to help, whether that's Suzy, whether that's our other partners, whether that's you Marc or whether that's the people listening to this podcast or our residents at our apartment communities, and all those people the property management company and all the vendors, all those people, I think back on, how many people I was able to impact in a positive way. And to me that is success. Being able to see them happy, to give a Christmas bonus, to our onsite manager, things like that, that is success to me.

[00:38:08] Marc Cesar: That was powerful. And what is the biggest surprise you found in your success? What happened that you did not expect?

[00:38:19] Suzy Sevier: I think what happened was when you start talking about people instead of profits, the conversations change, and people's motivations change, So, as I spent like four weeks at our properties, four and five. And when I would talk about like with maintenance or the onsite staff, in person, and when they saw me there helping, turn units and talk to residents and all of that, when I said to them, this is their home and without them, none of us have a job. This is really, important to impact them in really great ways because without them we have nothing, even that complete mindset shift with them, that property is also now their baby and I'm very happy that happened. But I didn't know that was going to happen until the words came out. And I was like, my goodness, who knew I had to explain it like that.

[00:39:15] Marc Cesar: That is awesome because I definitely heard my coach say that not so long ago. He definitely mentioned what you alluded to, as the key part of multifamily, of real estate is you are investors, and you are tenants. Without those two, like you said, you're out of a job. So we want to make sure that both those two individuals are protected at all costs. That is amazing. Michael, did you have a take on that question as well?

[00:39:43] Michael Barnhart: No.

[00:39:44] Marc Cesar: I love it, how you guys are in sync where it’s like I'm going to finish this sentence. I love it. Just a sidebar, how do you guys make that work? How does that work for you guys?

[00:39:56] Michael Barnhart: Really a great question Marc and hopefully. Hope it helps your listeners as well. Yes, a lot of times business partners, especially partners, relationship partners as well, when they're in business together, sometimes they clash heads or don't get along with a lot of things or don't see eye to eye on a lot of things because they want it their way or they want it that way. So, what Suzy and I did from the very beginning, from the onset, we did start working on things and the same things, and then we started disagreeing on certain things, how things are being done. So, once I noticed that, we took a step back, we said I'm gonna focus on underwriting and broker relations and acquisition side of the process, Suzy is going to focus more on the marketing, the investor relations side of things, because that's what she loves to do out, it's probably, however, we both understand both jobs and can perform both jobs as necessary. However, that sets us off in two different swim lanes. However, we still have the same end goal. And so we're able to work towards the same end goal, but never really cross into each other swim lanes. And so, we take our own creative genius, if you will, in each swim lane and never clash on anything, because it's like, that's your thing, you run with it, you got it. So that's helped us a lot because we're able to both contribute. And that’s a big contribution to our success as well as, we're able to accomplish twice as much as somebody who's doing all the jobs at once.

[00:41:45] Marc Cesar: Nice, I love it. Do you guys have a least favorite part of your job or your day-to-day that you hate, and wish you did not have to do?

[00:41:52] Suzy Sevier: I wish I did not have to call vendors and ask for favors. Only because I don't like being told no. But I found that some vendors say no, and some say yes. So it's worth it. But that's a really hard part for me to do. But I do it. It's true.

[00:42:20] Michael Barnhart: I was trying to think. I don’t know. I guess when I leave for 5 weeks at a time.

[00:43:39] Marc Cesar: Do you guys have the best time-saving hack that helps you daily?

[00:43:42] Suzy Sevier: Yes, Asana. It's a project management software tool. It helps us completely eliminate email. So, we do it for Asset Management for our properties, and our property management team has access to it as well. But everything interior, exterior, lender requirements, make-readies, leases, all the above have their own section and we can chat inside of Asana upload bids and Asana upload photos, do all the things and it saves time because nobody has to email us, and ask questions, they can look at Asana and then they don't have to wait for us to respond. But two, you don't have to hope that you included someone in the email, or you don't have to look back through your email. You can go to that one place and look through everything and you should be able to find the majority of what you need. And that's been huge.

[00:44:39] Marc Cesar: Awesome. Do you guys also have a favorite morning routine that helps you kick off the day or do you jump out of bed and just get started?

[00:44:49] Suzy Sevier: Yes, we have a routine. So, it's pretty similar, wake up, drink water, read, workout, and work. We'll get ready for breakfast. That’s usually our routine, we meditate. I think a big thing though is scribing, where we write down our affirmations, things we're going to do for the day, and then three things we're grateful for. But the three things that we're going to do for the day, our priority items, I think that's pretty big because then it keeps Michael and I aligned with our actual workday like I'm going to work on this and this, and some person can be like, well, this is due tomorrow, do you think that might be something you want to work on? And it's like oh yes! because so many times it's a little reminder like oh, this helps her, oh that's something I haven't thought about you, ever doing anymore, that would go great with this, it really keeps you aligned with your daily activity, your weekly goal, your monthly goal, 30, 60, 90, days and then yearly. The compounding is all there.

[00:46:00] Marc Cesar: Cool. Now, if you had to share your top three tips with our listeners today, whether they're newbies in the space or aspiring to become investors, what would those three tips be?

[00:46:17] Michael Barnhart: I started the first tip, or that first tip is Network, network, network. So, the first tip is to network with everybody, anytime, every time that you network because multifamily apartment investing is like networking is the lifeblood of it. So, number two is clearly defining your criteria. So, something that helped us was saying we are narrowed down to Oklahoma City and Tulsa and we're looking for a unit count between 80 and 200 and they have to be C class or B class, 1970’s plus vintage. So very specific, in B or C plus areas. And so, with those specific criteria when we went to the networking events, we will tell everybody exactly what we were looking for. So that actually allowed us to find our organic mentor. And through an introduction, I know somebody who's also a syndicator in Tulsa let me introduce you to and that's how we met our mentor.

[00:47:37] Suzy Sevier: So the third one for me would be putting out consistent content. And I say that because you learn in the process because you continue to educate yourself, but then you educate everyone else around you. And something to remember is that your audience is your audience. So, although you have seen multiple articles on the difference between a 506b and a 506c, if you're following has never seen that article anymore, or ever, then you have impacted them because you've taught them something new. We don't have to go above and beyond and create brand new content, we're all creating the same content, but it's for a different audience. And so that's really important to remember.

[00:48:19] Marc Cesar: Those are some very powerful tips. I appreciate you sharing that. Listeners, make sure you apply all of those, which is to network everywhere you go, the second which is to have a very laser-focused criteria, and the third is to pour out content even if people are seeing the same thing over and over, somebody is bound to actually see that content and learn something different. That is awesome. Now, what is up next for both of you guys, your company or your team?

[00:48:49] Michael Barnhart: So, we're in the process of developing some properties, some more units, building on one of the properties we already own right now. So, we've started the groundwork on that and maybe some more development next year. We'll see.

[00:49:09] Marc Cesar: Thanks. Awesome. I look forward to seeing that. So we're pretty much coming towards the end of this amazing and fun conversation. We're going to end it with a brief get-to-know-you fire round, so to speak. So the first question is pretty easy. What is your favorite book of all time that has had the greatest impact on your life?

[00:49:30] Suzy Sevier: The book of joy.

[00:49:32] Michael Barnhart: Think and grow rich.

[00:49:35] Marc Cesar: Nice. What is a huge life lesson that you can share? And how has it changed your life afterward?

[00:49:43] Suzy Sevier: So huge life lesson for me is hurt people hurt people and that's helped me because it makes me think about my reactions differently and I think that's just huge in life because I have also learned not to take anything personally and so to think of that, don't take anything personally and then hurt people your mindset changes on how you communicate and treat others.

[00:50:10] Michael Barnhart: I would say something that I think and reflect on a lot is when it comes to the moment where I want to stop, or I want to quit, stop working, that is the moment that I realized that I need to continue. And because everybody else, your colleagues, everybody else who, I wouldn't say your competition, but everybody else who gets to that point, I would say 99% of people will quit or stop working. And you have to be that 1% That keeps pushing through. That's going to find so much more power in that.

[00:50:49] Marc Cesar: Powerful. If you had to start over but with the knowledge that you have now, what would you do differently?

[00:50:56] Suzy Sevier: Start raising capital from the beginning. Like website, capital, literally straight into raising capital.

[00:51:07] Marc Cesar: Nice. And last but not least, what is your favorite hobby outside of real estate?

[00:51:15] Suzy Sevier: Anything outside. It would be cycling.

[00:51:23] Michael Barnhart: For me, it's golf. I love golf and chasing scratch. So I get there.

[00:51:33] Marc Cesar: Nice. I love it. Whenever you’re stateside Michael, I would definitely love to learn how to play golf, because that seems to be the topic of discussion nowadays and I know a lot of business transactions and deals are done on a golf course. So I need to be in the midst of it. I've talked to so many people who golf, I need to learn how to play, and it looks so fun. I grew up, I'm a basketball and football fan and I wanted to do something different, and I want to pivot somewhere else. Guys, I appreciate you guys jumping on and we definitely had a blast. It was a lot of laughter, a lot of educational content, and outside of that a lot of life lessons that are crucial for people to learn again because again, this business is all about people. It's not simply numbers but people. As the old saying goes, ‘people do business with whom they know, like, and trust’. And you guys have exemplified that, you guys are definitely showing that, and I want to thank you so much for jumping on. And last but not least, again, if people want to get in touch with you both and connect, how would they go back to and so?

[00:52:51] Michael Barnhart: Thanks for asking, Marc. So as we've talked a couple of times throughout this podcast, we talked about return on impact. And so in order to learn more about that, Suzy actually wrote this guide, it's called passive investing with purpose. And so she walks you through how you can passively invest and also make an impact while doing so. So, if you want to read about that, you can go to adventurousrei.com/impact and you'll be able to download that guide there. Additionally, you can go to adventurousrei.com/info and there's a landing page where you can find our podcast called “The Adventures of Real Estate Investor” podcast, where we interview real estate professionals, who are leveraging real estate to make an impact. We also have a YouTube channel where you have information about passive investing and also active investing and asset management, all the lessons we've learned, and what we've talked about today in this podcast. Also, you can connect with Suzy and I, so that’s adventurousrei.com/impact to download the guide and adventurousrei.com/info for the landing page with all the rest of the links. So please connect with us. And if you do connect with us, say I heard you at Marc's podcast “No BS Apartment Investing” podcast, we'll be sure to accept that connection.

[00:54:11] Marc Cesar: Awesome. I appreciate that was actually my next question, which was the shameless plug. I guess our synergies are definitely aligned since you guys beat me to the punch, but definitely to the listeners, all the links and info Michael and Suzy mentioned will definitely be in the show notes. And with that said guys, again, thank you so much for joining us and surviving our hot seat. This was truly fun. I will say this was probably the best episode I've recorded thus far. So, the podcast is always open to you guys, if you guys ever want to come back on and do a promo or something, it’s always open to you guys.

[00:54:52] Michael Barnhart: Thanks, Marc. It's such a pleasure. So much fun. So thank you.

[00:54:54] Marc Cesar: Thank you and with that said, I bid everybody adieu and happy investing and to all your success.

Suzy Sevier & Michael Barnhart Profile Photo

Suzy Sevier & Michael Barnhart

Co-Founders

Suzy Sevier and Michael Barnhart are the Founders of Adventurous Real Estate Investors. They specialize in a different ROI, Return on Impact. Through real estate investing they create immeasurable impacts with the residents they serve to create thriving communities.

They are the owners and asset managers of 388 units across Oklahoma and Texas. They host "The Adventures of a Real Estate Investor" podcast and they host a monthly meetup for real estate investors living overseas and investing in the United States.

Michael is Active Duty Air Force, getting his PhD in biochemistry from the University of Cambridge and Suzy is Real Estate Professional and has a background in project management and finance.