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Bill Ham Podcasts

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11 of The Best Podcast Episodes for Bill Ham. A collection of podcasts episodes with or about Bill Ham, often where they are interviewed.

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11 of The Best Podcast Episodes for Bill Ham. A collection of podcasts episodes with or about Bill Ham, often where they are interviewed.

Updated daily with the latest episodes

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MFZ - How To Avoid the Get-There-ITIS With Coach Bill Ham

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Welcome to the Multi-FAMILY zone podcast, where business meets family. The hosts of the show, Julia and Gino Barbaro, have been married for over twenty years, and have six children. 

Julia homeschools the children, and recently became a marriage and life coach to help couples become better communicators and help enrich their lives.  The couple is constantly asked about how they balance their entrepreneurial and real estate journey while raising their kids. The Multi-FAMILY zone was created to address these questions, along with a host of questions from the Jake and Gino community.

 Formerly a private jet pilot for a world-renowned surgeon, Bill Ham left the Corporate Aviation life and started Phoenix Residential Group with a single duplex and a dream. Over more than a dozen years Bill grew that company to include more than 1500 units spread over the state of Georgia along with a thriving Property Management Company. Trying to anticipate the market cycle, he spent the next few years divesting many of those assets at the peak of the market making his investors substantial returns on their investment. During his entire career he has been a coach and a mentor to dozens of young, soon-to-be industry titans where, even today, he is an integral part of the Jake & Gino community where he excels as a coach.

Bill has seen one recurring problem among new investors trying to break into multifamily, and he experienced it during his aviation career. In this episode, Bill tackles the problem of get-there-itis (The determination of a pilot to reach a destination even when conditions for flying are very dangerous),  where new investors feel that they need to act quickly and show their significant other that they are achieving success, without taking proper precautions or being careless and rushing into potential opportunities to show that they are taking massive action.  Bill discusses how to combat get-there-itis, and shares tips on how to communicate with your partner and share your vision with them.

Visit Bill’s website: Broadwell Property Group

Bill’s email is bill@phoenixresgroup.com

Jun 15 2020 · 33mins
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The Truth About Real Estate Investing with Bill Ham

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Recall the first time you attended a real estate networking event or your first introduction to real estate investing?

One could safely assume that your introduction to real estate probably entailed the glamour or prospect of achieving long term wealth and financial freedom. Although real estate investing is a phenomenal investment vehicle that can do just that, it's not an easy journey. Like any entrepreneurial endeavor, there are hurdles that can sometimes feel impossible to overcome; there are mental challenges to break through; there is a steep learning curve.

Our guest today is Bill Ham and if you have ever met Bill or have talked to him, you know he is someone who doesn't get into the "fluff" which is what we absolutely enjoyed about this conversation.  Too often, we hear all of the positive reasons to invest in real estate but not enough about the challenges, which is a big reason why so many potential investors don't make it very long in this space. 

In today's episode we discuss various topics like the current economic impact we are experiencing from COVID-19 and how that may impact us as real estate investors, tips on getting started as a real estate entrepreneur, self accountability, and putting in the work. 
To connect with Bill, email him at Bill.ham@bpgmail.com or visit his website at www.broadwellpropertygroup.com.

Tune in next time!

May 15 2020 · 44mins

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RCRE - Getting Creative with Bill Ham

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Mike Taravella and co host Will Coleman interview Bill Ham, Chief Operating Officer at Broadwell Property Group.

Key Information:

Bill has been focusing on newer assets (primarily 1985 and newer)

Not focusing on major capital expenditures that don’t have any ROIs (Plumbing)

Bill is also focusing on long-term holds

Bill anticipates a 15-20% reduction in multifamily valuations

Collections in April have been consistent with the previous month but is anticipating a slowdown in May

The reserves required for financing is very costly equity and ruin cash returns

Bill focuses on 2 creative financing options: seller financing and master leases

Seller Financing requires zero or minimal existing debt, market rate interest, interest-only term, 15-20% down, 18-24 month terms.

Instead of using down payment, leverage capital expenditures in an escrow.

Master leases have more risks because you are a renter and the landlord may not accept your purchase price

Expert Pro Tip: Focus on your competency and become more proficient with them.

Contact Information:

https://broadwellpropertygroup.com/

bill@broadwellpropertygroup.com

To register to invest with us:

https://invest.randpartnersllc.com/invexp/accounts/login/

Rand CRE's Facebook: https://www.facebook.com/randcre

Rand CRE's Linkedin: https://www.linkedin.com/company/randcre

Rand CRE's Instagram: https://www.instagram.com/randcre

Apr 15 2020 · 43mins
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Know Your Market Cycle(s) with Bill Ham

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Bill is the owner/operator of Phoenix Residential Group, Phoenix Residential Management, and is the Chief Operating Officer at Broadwell Property Group. He has been in the real estate business for 15 years and has created a portfolio of over 1000 units while growing Phoenix Management to a team of 15 staff members. He has taught real estate for the past 7 years and has dozens of highly successful students. Bill uses his extensive real estate experience to teach his students the “real” side of real estate.

Broadwell Property Group

The Art Of War by Sun Tzu

bill.ham@bpgmail.com

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Apartment Investing For Early Retirement

Feb 21 2020 · 32mins

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CRS34 Bill Ham: Creative Finance in Multifamily to get 1000 Units

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Bill Ham goes over how he quit his aviation job to go into full time real estate and how he transitioned into multifamily using syndication and creative finance, JV's and seller finance to purchase apartment complexes. He walks us through his business model and discusses what syndication is in the broad sense of the word and how to get involved.

visit billham.net

Jan 03 2020 · 38mins
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From Pilot to Not a Plumber with Bill Ham

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Guest Information
Bill Ham
Phoenix Residential Group, LLC
Bill@phoenixresgroup.com

Topics Covered

Current Operations 1:30

Background and start in RE 2:40

First mentor 5:15

Intro to multifamily 7:30

First deal 10:00

Biggest lesson from first deal 13:00

Current Team structure 15:30

Don't follow your passion 18:30

Vetting a coach 21:00

Finding deals 26:15

Preparing for economic slowdown 32:00

Worse case scenarios 38:30

Typical day/morning routine 46:00

Book Recommendations

Getting to Yes by William L. Ury, Roger Fisher, Bruce M. Patton
Contact Information

david@sevenbridgesrei.com

www.sevenbridgesrei.com
Dec 31 2019 · 54mins
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Bill Ham, Owner, Phoenix Residential Group

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Bill Ham, Owner, Phoenix Residential Group by Lou Weiland
Oct 28 2019 · 24mins
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DE 23: Forensic Analysis in the Multifamily Sector- with Bill Ham

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Today’s episode guest is Bill Ham- a real estate guru & mentor with 14 years of commercial real estate experience based in Atlanta, GA. He owns and operates Phoenix Residential Group, LLC and Phoenix Residential Management, LLC. Learn how Bill walked away from being a corporate pilot to create a large portfolio of multifamily assets. 

Bill discusses how he started his journey into the world of real estate, how he sourced for his first deal, and how he was able to switch from the single-family apartment to the multi-family sector. Learn what to look out for when sourcing for deals and how he teaches his students to read the profit & loss statement. 

Highlights:

  • Benefits Of A Multi-family Over Single-family Apartments?
  • Key Points when Sourcing a Deal
  • Thoughts on the Future of the ‘C’ space
  • Predictions for the Real Estate Market

Connect with Bill:

Email: Bill@phoenixresgroup.com

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TRANSCRIPTION

Don: Hello, dear listeners. I hope you guys are enjoying the episodes and the content we give. Remember if you want to get in touch with us, you’re always welcome to do so and send us an email at hello@donandeden.com. So please do, we want to know how you feel and always appreciate the feedback.

Today, I’m going to interview Bill Ham. Bill is a multifamily investor and mentor and one of the people I consider a multi-family guru. I would say his strength is his ability to see the hidden things most people are going to miss while underwriting and his profound understanding of the real estate market that enables him to predict market trends and shifts. Also, on a personal note, Bill and I have already established a relationship in the past, and I’m very happy to have him on the show. So without further ado, let’s start.

Intro: Welcome to the real estate investing podcast with Don and Eden, where we cover all aspects of real estate investing with underwriting attention to multi-family apartment buildings and off Market strategies. 

Don: Hey Bill, welcome to the show. It's so good to have you here. 

Bill Ham: Thank you, good to be here. 

Don: Yes, so, I know you're one of the best deal analysts that out there, So you can analyze a deal better than most people that I've ever met. 

Bill Ham: I appreciate that. 

Don: We've had a few conversations in the past where you've helped me analyze deals. 

Bill Ham: Yeah A few of them. 

Don:  I know your ability and how good you are; And so I would appreciate it if you could talk a little bit about yourself and your background and how you started your real estate career.

Bill Ham: I have been in this business for about fifteen years now, and I was a corporate pilot by trade, and one of my very first deal was a duplex, and the duplex was making $300 a month cash flow. I had saved up $10,000 from my career, and I walked away from Aviation one duplex ten thousand bucks in $300 a month in cash flow; this was in ‘05. So headed into the hundred-year recession that was so bad, but I survived it, and I don't recommend everyone do that. By the way, I was 28 years old at the time, you know, no family, no children, and so it was a little bit easier for me to make that sort of commitment, but that's what I realized I needed to do is commit and focus and that has been the number one success trait that I think I have and have noticed in other successful people; the ability to focus. That's how I got started, and then just kind of climb the ladder, flip houses for a while and then I did a 9 unit and then a 27 units and a 20 units and a 44 unit then a 152, so I grew I didn't go from  2 to 100, I mean, I started from the smaller assets and then built out of it a pretty big portfolio over the years.

Don:  Let’s talk about that transition from doing single families and flipping homes, which is how a lot of people start, and it's how I started in real estate and then the transition into multifamily, you said something about nine units, please tell us more about that transition.

Bill Ham: I went in and heard someone speak about multi-family, someone who is no longer in the business. I listen to a lecture by this individual and I was hooked on it when he started talking about the economy of scale and know so much easier to manage and to have more units under one roof and I knew from a business perspective that was the future and that you can flip houses and do single-family and that’s great, but you're never going to get the zeros behind that model, then you're going to get in larger commercial especially multi-family. That was my thought, I needed to go bigger out more, and I did, and I did a lot of creative financing at the beginning, lots of seller financing, a lot of lease options after I had built a small portfolio. That's when I got into syndication, which is bringing on partners and raising down payment money from other investors, that’s how I made the transition, nice and slow.

Don: that’s exactly how I feel about this, When you flip homes, you make good money and you have a very good lifestyle, you can travel the world, you could buy fancy cars, and you can make a really good money, money that most people don’t make, but the problem about this is that you don't really create a passive income or a steady passive income that you can retire when you're 35 or 40, and that's very achievable with Multi-Family. Was that the mindset was that what guided you to move forward from flipping houses?

Bill Ham: It was ultimately, I looked at all of the large commercial investors and owners, and none of them own houses, and so I thought, why do the big people not own lots of houses? You know, why do they own commercial as supposed to single-family and the reason is because it's a business and it's easier if you're trying to grow and operate a business, your product really should be in a commercial space, but If you're trying to do a side business, you know a little bit extra money here and there, then single families are a great way to go. 

But if you're really trying to build a big portfolio, for example i can manage a   Hundred Apartments at the same time you can manage 10 houses, the time in the economy of scale is just not in the single-family market and then I always use a sentence that multifamily was built to be an investment model, houses were built to be someone's home.  So multifamily makes money by Design, houses make money when you steal. You gotta go out and steal the value on a house for the numbers to work out for it to be a rental property because it was never built to be so, but multi-family is.

Don: Yeah, that’s exactly how I started, me and my partner, you know, we got that Steal's on single families, and then we were able to acquire them and great wealth, but we noticed as we scaled up at that it's not scalable, that’s exactly the difference, it going to create nice passive income for us, but it's not going to be quiet and like free really because we still have a lot to do with during which includes fixing and in doing some other things, maintenance  especially; it's not scalable. So, what I realized recently is that it's not just about an apartment, it’s more about units. It doesn't matter what type of commercial property you buy, you could buy self storages and have a hundred units there, or you could buy a mobile home park and have 50 units there, or you could buy a multi-family and have a hundred Apartments. It's all the same thing. You were right; you buy a business, I agree completely. 

Bill Ham: Yeah, it's whatever asset class makes sense to you, whatever you enjoy, what you know your investors want, That's the model. So mobile homes are great, storage is great; I just do apartments. It's not because apartments are better than one of the others, it's just what I do, and I have a lot of friends that make money on mobile home parks, have a lot of friends make money in storage but I don't and that doesn’t mean all of those aren’t assets.

Don: Definitely, you got to choose and become the best at what you do. So when you are at your peak as far as your multifamily portfolio, what was the biggest amount of properties that you held? As a general partner [a GP]?

Bill Ham: yeah, have held over a thousand units, 1000 unit at the peak of my career, and I have actually been selling off Over the last two years and am down now to about 400 units that am holding currently.

Don: Okay, so you sold 600 units in the past three years. 

Bill Ham: Yes roughly.

Don: so let's dig into that, Why are you selling properties right now? Is it about the economy, the recession, or the overheated Market? 

Bill Ham: Not really. It's not about the economy or Market. It's more about Market cycle and understanding the rise and the fall of the market cycle and what Market cycle you're in; this is a question I get a lot of times , are we going into a recession or are we going into a down cycle, so we shouldn’t buy real estate; No no, that's  a complete misunderstanding of Market Cycles. If everybody only bought real estate in a recession and never buy real estate any other time, then everyone would go home for 5 years, and the whole real estate industry would collapse, and that obviously doesn’t really occur, and that's one of the greatest things about multi-family, and that it's a cash flow model.  The value only matters twice, when the time you buy and when you sell. So as long we get the debt, that allows us an Exit strategy on the other side of the upcycle. You can hang onto multifamily through a recession as long as you pay the right price, and you get long-term debt. 

I have sold over the last couple years is because we were going through an upcycle and in an  upcycle you make more money using a different strategy than a buy and hold strategy, and in an up circle, as the values are rising quickly, that's when you want to go in and make renovations, your value-added props; That's what I've been doing over the last couple years, buying a distressed asset, going in there stabilizing the apartment complex, doing renovation, getting the rents and revenue up and then selling it and taking that cash and going on just like flipping houses. I've been flipping apartment complexes The last few years, and now that I believe we're getting up to the top of the market, I'm going to shift my strategy now and going to more of a long-term hold. So now I'm planning on 5 to 7 years hold on almost everything I buy. So again that the cash circle as we go into a down circle and then when we Go back up on the other side, I'm betting seven to eight years, and we will be back up on the other side trying to sell, and that's when you go back into the flipping, So it's just about changing your hold strategy. You don't get in and out of the market, you just adjust.

Don: yes, so you would buy these apartment buildings, and you fix them up, and then you sell them right away. So how much time would the entire process take about a year or two years? 

Bill Ham: a year and a half to two years, flipping an apartment complex can be a Year to three-year process; a flipping a house, it can be 90 days of six months something like that. Apartments usually have an 18-month window to renovate, stabilize, occupy, and then you probably should add another 90 days to 180 days for your exit strategy, and that's taking it to Market, let the realtor show it, getting the offers and then that person going under contract. The sale process in multi-family is about 90 days on average, from the offer to the close is usually about 90 days. 

Don: so what about the taxes because you're being taxed for more because you held it for a short amount of time. So you're just 1031 exchange to the next property, from one property to another. 

Bill Ham: Yes, correct, you can just 1031 exchange. You can just pay the taxes, you know, some of the deals I used to fund life, you know, pay off all the debt and all the old credit cards and get out of debt “out of the Rat Race as they say in life.” So those deals I took the cash, and I got free and clear in my life and some of the deals We roll the money forward, so I have done both.

Don:  I also know you have a property management company with 16 employees. So this company is the company that manages your properties, is that's how you save money on property management. 

Bill Ham: Well, I don't save money because most of my apartment deals are syndicated deals; meaning I've got partners and I've got investors, So my management company is a completely separate entity and it makes money, so I am still charging the apartment complex 3 to 4% management fee. So I'm double-dipping it. I'm making money on the ownership side from cash flow, but I'm also making money from the management side as the management, so they pay twice. 

Don: But as a general partner, you're the one who has the right to choose to the management company. 

Bill Ham: Correct, the general Partners,  I usually have one to three General Partners depending on the size of the deal in the net worth requirements, that’s what the general partners before they bring the balance sheet some of the cash. So yes, the general partners have the right to hire and fire the management company, which is why my management division is completely separate, so if for some reason we were not pro- forma as the management company, Neither partner would fire me the management.

Don:  How do you know how your investors feel about the fact that you're double-dipping? Because on the one hand, you could do better because this is your management company and you know how to run an apartment building better than anybody else since you've been doing that all your life. That's an advantage, but the disadvantage is that maybe you could find a different property manager that will charge the apartment building less.

Bill Ham: We charge 3 to 4%, which is about the bottom of the rate. So I don't know that you would get an apartment management coming to charge less, what we found is that we are extremely good at mitigating expenses because I am motivated to keep the expenses as low as possible to manage that property as accurately as possible because that affects me the owner and my cash flow as an owner.   If you hire a third-party management company just off the street, there only incentivized to collect rent because they are paid only on Gross Collections and leasing that's it. You might give bonuses or something like that for keeping expenses at a low, but they don’t care, but I care because that affects the other side of cash flow, so I think we do a better job than the average management company.

Don: Knowing you, i know you are doing a better job than most management company, So as far as finding deals at today's market, everybody talks about the deals and that it's harder to find so you're obviously looking into different types of deals you looking for what, Heavy value add or extremely distressed where you could actually flip it. So what are you looking for Right now?  

Bill Ham: I'm looking for everything right now,  if something is a heavy lift or value add, I am interested, but the problem right now is that the prices are up. So you're not always finding the best price on those, so if I can find a value add of a property with the right price, Yes. I'm interested. But what I am looking for and what I sort of recommended everyone else starts looking for are newer Assets in really good areas to tolerate a downturn in the economy. So now is the time you want to start buying and holding but if you want to buy and hold, you need to be in a good area, and you need to be on a property that is not going to have a lot of surprise maintenance issues or Capital expense issues in the next 3 to 5 years. So for me, a property built in the sixties in the seventies, I'm a little cautious with those assets because they're getting aged, plumbing is a big one right now. 

If anybody knows me and they know I always bring up plumbing, the sixties and 70s built apartment complexes which plumbing has never been replaced and is really getting to the end of its viable life span, I mean the other galvanized plumbing, you know it's collapsing in most cases, and it's a really big-ticket item and its really expensive to go in and just replace all the plumbing in an apartment complex. And if you don't then you just get put on tour of the capital expense treadmill, you're just constantly spinning money, patching & patching and patching them and you never actually get the cash flow you thought you were going to get, that's not fun real estate, especially if you syndicated the deal and your investors were expecting a certain return, and they're not getting it because you just gotta be fixing every little thing on that property because it's old; so my model now is C ++ to the A – range, I'm really going to try and stay in this world of the B space in good locations though they have less cash flow, they have a good safe model, and I think that's the model for the downtime.

Don: So let’s talk about that model, you are going to buy a B class property that was built from 1985 to 1995, so that's what you're looking for; And then the size you're always looking for, the bigger, the better, right? 

Bill Ham: yeah, the bigger, the better, I am currently working on a project in Atlanta, it's only 8.65 million, but it's only 60 units. So physically it's not as big as I typically go, I try and stay over a hundred units, but price-wise it's $144,000 a door. So it's big on price but not a big size, but it's in a really good location and its 1987 construction. So we don't expect any large Capital expense surprises, it's going to have a good steady income, though it is a little mismanaged at the moment. So there's some value add in the management and decompressing the cap rate and It should be good hold for a recession. 

Don: So what the ROI that you are offering your investors with a property that doesn't have much value-added and is as you know, something that you're planning to hold for about seven years 

Bill Ham: I will answer that question carefully for Security and Exchange laws. Let me state I am not offering anyone here listening to this any form of security, and now I'm good with a lawyer. As an example, we typically shoot for properties that have an ROI in the low twenties. That's what I go for, its low twenties. 

Don: Okay. So what are you thinking that is going to happen with that property? That's the property built-in 1985 or 1987, and then you're buying it and holding it for seven years. What's the projection for what's going to happen with the appreciation to cash flow Hope for the next few years. 

Bill Ham: Yes, the cash flow in year one is pretty low. But we're going to get it upwards of 9% within the first year. What’s going on right now is the economic occupancy is a little low, but the management company has been giving away one-month free rent when they are 97% occupancy, we don't know why they're doing that though it’s not a good idea. So we're going to burn off the concessions. We are going to do some light renovations to the units about an $8,000 renovation to the unit, and we believe we are going to raise the rent to a few hundred bucks, about $200, the long-time hold in that area, in that part of Atlanta show is going to be good, it's going to have high appreciation; we are going to decompress the cap rate and just hang on to it and cash flow. 

Don: So you say that your understanding of the deal is because you know the market very, well, you know exactly how good the location is and if you hadn't known then that deal with probably not catch your attention right, would you say that?

Bill Ham: correct, and in Atlanta, if this deal were in Texas or California? I wouldn't have looked at it as much, because I would have less of an ability to manage and decompress that cap rate, so being here in Atlanta, right here in my management footprint, I will be very interested, but if it were a thousand miles away, I would not.

Don: I know you're an expert in getting deals, and I appreciate the things you know how to do. I have spoken to a lot of people. You know I have a podcast for multi-family real estate investing, so you speak with people that underwrite deals all the time. I haven't talked to a lot of people at your level. So I want to ask you about a scenario that is more complicated but could also be very profitable and lucrative, and that's scenario is buying a losing property because right now I'm looking at a property that's losing money and I know it has a lot of value add, but something in me feel afraid. You know because everybody says to buy something is cash fund, but something in me feels afraid; I'm afraid of pulling the trigger even though I know that I have an opportunity. So what do you think about buying deals that are losing currently but have a major heavyweight? 

Bill Ham: Yeah. I think your concern is valid and if anyone listening here is inexperienced in the real estate space or certainly in multifamily, I would go with the average advice of probably find something that's already making money and already has cash flowing because you're adding risk. You are learning the business as well as taking on a risky asset, but I think you're doubling down on the risk, but that aside I think negative cash flow properties can be some of the best assets out there, but it depends on why are they not cash flowing or why are they not hitting the return station as it ought to.  

This is what I call forensic analysis, and I always teach each of my students how to look at a profit and loss and in reading it like a mystery novel, that that set of data is telling you a story; what story is it telling you? So you want to be able to go to a profit and loss and see value, mismanagement, expenses that are too high, occupancy that's too low, rents that too low, things of this nature and you ask yourself. Okay, you create a pro- forma, and you ask yourself if I renovate it, raise rents, do this and do that at today's purchase price- Is it going to make sense? The way you do that take the purchase price and create a pro- forma. You analyze the property as if it were at stabilization And if those numbers work, then you have to ask yourself is the journey worth, is this a real heavy lift, is it a light lift. I have found properties that were negative cash flow or low cash flow, and the value add was all, from going in there and in tearing out walls and doing heavy renovation down to the owner to stop just stealing money. Stop stealing, and the apartments were making plenty of money, I have seen at all levels. 

Some of the best deals I did were those where an owner was embezzling money from the property, and I caught it in the profit and loss, nobody else saw it, but I saw it. What the employer was doing was sharing employee cost, he had several properties in the area. He had one set of employees that works on all the properties, but he took the full salary and placed the full salary on each property or as the expenses were concerned. I knew he had a different set of partners for each property but the partners never saw the other property and they would get the profit and loss and they would say five employees work here and that made sense, but the five employees didn’t work there, but they worked on all the property. I was buying the entire portfolio at once, and I checked the different profits and losses and the payroll was absurd, and I go out and do a property, and I asked the property manager and asked how many employees work here and he said five and I said so all five people manage all of these assets and he said, yeah.

The owner must have been stealing the money, so he is paying five employees, but there are fifteen employees worth of salary on the book. So what I did was, say okay if we normalize those expenses if we take that extra expense and put it back on the revenue and reanalyze the deal with the purchase price; Is this a good deal and the answer was yes, all of a sudden the numbers are wonderful. So all I had to do is buy the property and stop stealing. So the value add was evaluated and that’s don't steal, It was a great deal. 

You never know what kind of hidden story is inside that profit-loss; what I tell a lot of my students is that deals are often created and rarely found. I think everybody today is expecting to make a profit and loss and put data into a template, and all of the lights turn green, and it says it a great deal! Purchase me right now, sometimes that happens. The majority of the time is like what you're looking at right now, you are looking at a deal, and it's giving you a little heartburn. You're not sure. Those are the ones you want to stop and pay attention to you, because there may be something very big. 

Don: I'll tell you when I see, I see something that is interesting because I know the owner, first of all, the way that I do marketing, I don't talk to Brokers necessarily. I don't like doing what everybody else is doing. I like to do things differently, so I source my deals, and I do that with you know my abilities, I have the tools, I can send a lot of text to a lot of people, and I have the abilities to get a lot of data. You know, the broker's are sourcing for deals all the time, and they have their connections, and I do what the brokers do, it's just that it's for myself,  I'm not a broker, I'm a buyer. And so when you get to a seller, and you tell, then I am a buyer and not a broker, and I want to buy a property. If the property is mismanaged, then they would want to sell you the property because they would also be able to save some money on that Broker's commissions. 

That's what I do, and then I got to this owner that owns 40 units somewhere in Florida. He lives in New York, and he tells me the minute we start a conversation, I tell them that I want to buy the property and he tells me to listen, I live in New York, and to be honest the property is not managed correctly. I got my cousin there, taking care of things for me. So I know it's a family member that manages the property, one good thing that I see already and then I know that the owner is an absentee owner and he wants to sell it and so I started seeing the story works in my favor, because there's a mismanagement there, it's not like the property could not do better; It could, right. It's just somebody that is not on top of things and that is what I'm looking for when I'm sourcing, and that's why I am not that scared of buying a deal that’s losing money because you could easily see why it loses money. Its 8% management fee, for instance, I'm looking at the rent roll right now and so I can see that in June of 2019, that person makes $15,000 in rent and then he has 10 vacant units out of 40, That's a 25% vacancy, and it is 8% management fee, so somebody's not doing you their job, the manager is not able to find tenants, and they're still getting paid 8% which you know, it's exactly what you could improve. So that's the thing that I'm looking at, this story just like what you mention. That makes me feel good that we talked about it.

Bill Ham: its value add, not value present, there is a misunderstanding people have, if you are adding value, it means it not there presently. If it's not a present value, it means it's probably a distressed asset. People want to get value-add and have it make a lot of money immediately.

Don: But what happens when you are buying based on an income approach, so this is what doesn't work for me. So you're buying based on income approach in it. If somebody is losing money, if the property is losing money, then allegedly, they owe you money. So how do you know how to set the price? 

Bill Ham: correct pro- forma, a lot of people say you don't buy on a pro- forma and I agree, you don't buy on the Realtor's pro- forma. You do buy on your own pro- forma. You have to create a pro- forma for every property. You buy, meaning you got to have a business model for the future for your property, and in that case, you are going to have to decide how much to go ahead and reward the seller for your future value. That all depends on the market, so if the market is way down, You can reward the seller little to nothing, but if the Market's up that's what I call a pay-to-play market. You may have to pay that seller a little more than you wanted, even though they don't deserve it because the assets are distressed, and because of the operation is distressed. You just got to make a decision.  Is it worth going ahead and rewarding the sellar some for the ability to go in there and capitalize on that opportunity and that’s just the way it works? 

Don: Definitely and you know what else I found out, that when you are talking to a seller that sells you a distressed property to that level where it's actually losing money, then it's not like the seller has a lot of options because if they try to sell the property on the market, then it's not really financeable. So you could get a good deal as far as seller financing asking the seller to hold the paper in that specific situation. 

Bill Ham: Absolutely. 

Don: So that is very critical because you could get a good deal just because of the finance sometimes. 

Bill Ham: in the recession, I did my first 400 units, I never went to a bank and borrowed money to buy them, not one time. So 400 units of the lease option, seller financing, private jet, you know stuff like that and I would come in with that private money or seller financing, stabilize the Asset, get it up and running and then refinancing the bank and cash out the original seller or the hard money lender or whatever. So it's easier to do that a down cycle, But yeah, you're right. I created a 400 unit portfolio without actually walking into a bank, so It certainly possible.

Don:  So what is your speculation? That's it for the future as far as the economy in the market and the recession, and what do you think is going to happen? 

Bill Ham: it not if it is when we are going into recession, we always do eventually, so it is not a problem, we  survived every other recession we've ever been through including the last recession, which was a hundred year recession, I expected a cool off in the markets, and I'm inviting it so that it'll be easier for me to start buying property again. I think we're going to have some value decline, little not tremendous. Now what I am predicting and then you can say you heard it here first; I'm predicting the collapse in the values of the ‘C’ space, and it has nothing to do with interest rates and has nothing to do with the economy. 

What I think is going to happen over the next ten years is that the C assets are going to get physically obsolete. There is going to be too much Capital expense needed on those properties and the lender's especially Fannie, and Freddie are going to start for single Capital expense injection into those assets and it’s going to affect the prices, because there's no way you can go in and buy up a C assets at the prices today and go ahead and replace all the plumbing and go ahead and replace all the roofs than take care of the wiring, an upgrade to the unit, your cost basis, which is purchase price plus renovation would be absurdly high. So I think the ‘C’ space is inflated artificially at the moment and we don't really need to be worried about a recession; We need to be worried about aging assets. That's where I think you're going to see a big downturn in the multi-family space in The next five to seven years is in that C space just becoming way too old and that value is going to collapse in that market.

Don:  I see that can be an opportunity. 

Bill Ham: It could be a double-edged sword, you know if you come in and buy it at the right price with enough money to capitalize it. Yes, it's just like humans as we get older we consume, more health care more and more and more, in an apartment complex does the same thing as it gets older. It consumes more and more and more Capital expense until it's just not worth repairing anymore, and it needs to be torn down. See what we got is after the Baby Boomers in the sixties and the seventies, post nineteen forties and fifties. There was a massive amount of Apartments built, So I would say ninety percent of the ‘C’ space was all built later than 1960. So it's never been a problem before, it is now; that where I'm getting concerned in the C spaces. It's going to be just too old to bring it back, which now, I think, could inflate the value in the B space. So that's my prediction is that you're going to get a big collapse in the value of C’s, all real estate goes from new to Old from A to D, or as I say, it goes from A to D from an A-class to a Section 8. That's just the life cycle of an apartment complex. When you're looking at an asset, you have to ask yourself how far along that process are you?                                                                                     

Don: Yeah. So what do you think is going to happen with the big B class and the A classes while the C-Class collapse? 

Bill Ham: I think that everyone will have a full call flight to Quality. I think everybody's going to abandon the ‘C’ space. I think the politicians are getting very liberal, you know, right or wrong,  I'm not making any political comment, but we see a lot of Control conversation coming, and so I think the government is going to start disabling our ability to raise rents at the at a high rate. But at the same time, the government is not going to give us a break on repaired. So you got the government stopping your increase of Revenue while the same time is sending code enforcement around the other side to tell you. Oh, fix this, fix that, you know, you got to take care of the tenants down. This is where I think the ‘C’ space is going to get compressed between me the city forcing the repairs and like in the upper-level government, stopping the revenue production and it's going to collapse the C space as those properties start to need big Capital injection dollars into them, that's a prediction on my part very interesting. 

Don: Okay, so I want to thank you for coming to the show today and the pleasure of giving us your truly remarkable insights. I want to ask you is how other people could connect with you if they want to chat or if they want to invest or anything like that? 

Bill Ham: Absolutely if you want any more information on the business that I'm doing or you have some general questions. Let me give you my email: Bill@phoenixresgroup.com

Oct 25 2019 · 33mins
Episode artwork

Making the Move to Multifamily with Bill Ham - Part 2

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Bill has been self-employed in the real estate business for 12 years dealing with over 1000 units. He created his own management group with 16 employees. Moving on from a duplex and houses for his first few years, he now focuses on multifamily assets.

He talks with us about syndication, creative financing and flying the friendly skies.

Top 10

Starting Out

That First Deal

Syndication

Networking

Multifamily

Aviation

Think Big, Start Small

Creative Financing

Education

And much more!

We’re happy to have Bill as part of the Jake & Gino team, he’ll be offering coaching services through us soon!

Bill’s LinkedIn: > https://www.linkedin.com/in/billhamrealestate/

Email: bill@phoenixresgroup.com

Register on the investor portal and fill out the investor portal form:Create an Account – Rand Partners

We want to see you at the October 6-7th

Multifamily Mastery Live Event in Nashville, TN! Email Gino at gino@jakeandgino.com for a coupon code to save a little $ on your ticket price!

Reserve your seat for Jake and Gino Live Event 2018

Apply For Us to Help You Make Your Multifamily Dreams a Reality!

Aug 30 2018 · 23mins
Episode artwork

Making the Move to Multifamily with Bill Ham

Play
Read more

Bill has been self-employed in the real estate business for 12 years dealing with over 1000 units. He created his own management group with 16 employees. Moving on from a duplex and houses for his first few years, he now focuses on multifamily assets.

He talks with us about syndication, creative financing and flying the friendly skies.

Top 10

Starting Out

That First Deal

Syndication

Networking

Multifamily

Aviation

Think Big, Start Small

Creative Financing

Education

And much more!

We’re happy to have Bill as part of the Jake & Gino team, he’ll be offering coaching services through us soon!

Bill’s LinkedIn: > https://www.linkedin.com/in/billhamrealestate/

Email: bill@phoenixresgroup.com

Register on the investor portal and fill out the investor portal form:Create an Account – Rand Partners

We want to see you at the October 6-7th

Multifamily Mastery Live Event in Nashville, TN! Email Gino at gino@jakeandgino.com for a coupon code to save a little $ on your ticket price!

Reserve your seat for Jake and Gino Live Event 2018

Apply For Us to Help You Make Your Multifamily Dreams a Reality!

Aug 30 2018 · 25mins
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