Highly respected multifamily real estate investor mentors, Jen and Stacy Conkey, talk about their profound insights into real estate investment. They delve into the multifaceted world of multifamily investing across the United States, emphasizing the importance of capital raising, the intricacies of operating multiple businesses including an academy and a mindset company, and the strategic nuances of multifamily investment. They articulate the significance of building relationships, understanding market dynamics, and the criticality of having a resilient mindset in navigating the complexities of real estate investment.
This engaging conversation is packed with wisdom, strategies, and practical advice for real estate agents and investors looking to expand their portfolios and leverage their earnings into long-term passive income through multifamily properties. If you’re inspired by Jen and Stacy's journey and eager to dive deeper into the art of multifamily investing, tuning into the full episode is a must.
Key takeaways to listen to:
About Jen & Stacy Conkey
Jen and Stacy Conkey are highly respected multifamily real estate investor mentors known for their unwavering dedication to their students' success. They are the founders of Remote Multifamily Investing Academy and With over two decades of experience in the field, they leverage their expertise to provide personalized guidance, comprehensive education, and ongoing support, ensuring their students are well-equipped to achieve their financial goals as they pursue the 3 freedoms we all covet... Location, time, and financial!
They’re also co-authors of the book “Multifamily Freedom Hacking” which is available on Amazon. Jen is also an NLP Master Practitioner and business strategist, and she’ll be sharing her fascinating insights on neuro-linguistic programming and how you can leverage NLP as a real estate investor.
Resources Mentioned
Connect with Jen & Stacy Conkey:
To connect with Randal and learn more about passive inves
To connect with Randal and learn more about passive investing, visit www.ridgelineig.com and follow our social media pages below!
Highly respected multifamily real estate investor mentors, Jen and Stacy Conkey, talk about their profound insights into real estate investment. They delve into the multifaceted world of multifamily investing across the United States, emphasizing the importance of capital raising, the intricacies of operating multiple businesses including an academy and a mindset company, and the strategic nuances of multifamily investment. They articulate the significance of building relationships, understanding market dynamics, and the criticality of having a resilient mindset in navigating the complexities of real estate investment.
This engaging conversation is packed with wisdom, strategies, and practical advice for real estate agents and investors looking to expand their portfolios and leverage their earnings into long-term passive income through multifamily properties. If you’re inspired by Jen and Stacy's journey and eager to dive deeper into the art of multifamily investing, tuning into the full episode is a must.
Key takeaways to listen to:
About Jen & Stacy Conkey
Jen and Stacy Conkey are highly respected multifamily real estate investor mentors known for their unwavering dedication to their students' success. They are the founders of Remote Multifamily Investing Academy and With over two decades of experience in the field, they leverage their expertise to provide personalized guidance, comprehensive education, and ongoing support, ensuring their students are well-equipped to achieve their financial goals as they pursue the 3 freedoms we all covet... Location, time, and financial!
They’re also co-authors of the book “Multifamily Freedom Hacking” which is available on Amazon. Jen is also an NLP Master Practitioner and business strategist, and she’ll be sharing her fascinating insights on neuro-linguistic programming and how you can leverage NLP as a real estate investor.
Resources Mentioned
Connect with Jen & Stacy Conkey:
To connect with Randal and learn more about passive inves
To connect with Randal and learn more about passive investing, visit www.ridgelineig.com and follow our social media pages below!
[00:00:00] Intro: If you're a real estate agent earning 200, 000 a year and you want to grow your passive income, this show is for you. Learn secrets other agents use and hear from experts in our field who will guide you on your journey to investing in assets like apartment communities so you can take your commissions and turn them into cashflow.
[00:00:20] Intro: Here's your host, Randall. Let's dive in.
[00:00:22] Randal McLeaird: All right. Welcome back. It's awesome to have you on today. I have some awesome guests today, Janet. Stacey Conkey. They are living in Florida, but they invest all over the country. They have four different companies that we discuss and one is multifamily investing all around the country.
[00:00:39] Randal McLeaird: One is a capital raising company, deploying that capital into other operators deals. Another one is their Academy where they teach people how to do exactly what they do all around the country. And then they have a mindset company. Super interesting conversation. Wherever you're listening to this, if you would go on rate and review helps me out a ton whenever we're putting content out so that reaches more people and we're able to bring on awesome guests.
[00:00:59] Randal McLeaird: If you can [00:01:00] just a one word review even helps more than just the stars. So do that. And I appreciate it. And let's jump into the show right now. You guys know the Sean Ryan podcast by chance.
[00:01:10] Jen & Stacy Conkey: Oh, no, I haven't.
[00:01:11] Randal McLeaird: I was listening to his show the other day and he's a ex special portions guy, and he's got guests that come on who are like CIA, this and that.
[00:01:20] Randal McLeaird: One of the guys he brought on was a guy who specializes in out of body experiences from the CIA and the whole idea is he can put himself into a situation, find out where people are in the world, like very crazy. I'm like, I don't know. This sounds some kind of. Han sort of story or something.
[00:01:40] Randal McLeaird: I dunno, , it was like something else. And then I know a few guys in Air Force Intelligence and some other things, and I started talking to him about it. I was like, this is nuts. And he is you have no idea. So people use this. The reason I'm bringing it up right now is because the CIA guy talks about the seventies and eighties and how they were bringing people into the group.
[00:01:57] Randal McLeaird: And one of the people that he brought in that learned this [00:02:00] method was Tony Robbins. I was like, okay, and now we're talking NLP and I know he's big into that. So I was like, how does this. Connect. Anyway, I'm trying to put all the pieces together. Solve the world's problems through this.
[00:02:12] Jen & Stacy Conkey 2: Why? What is the name of that podcast?
[00:02:15] Jen & Stacy Conkey 2: I want to go.
[00:02:16] Jen & Stacy Conkey: Yeah. I want to go watch it. Listen to it. Whatever it is. I've never heard of that. That sounds bad. I've heard really cool stories about Tony and his early career with NLP because he doesn't do NLP anymore. He does neuro associative conditioning, but in his early career, I love listening to some of those stories.
[00:02:30] Jen & Stacy Conkey: Like he was negotiating a military contract. And, Tony's thing is always anchoring. Like when he's doing this and he's doing his thing, like that's an anchoring. It's a volume it's called a sliding anchor. So he's increasing the intensity of the emotion and the clap is the finality of it. And that means take a seat,
[00:02:47] Randal McLeaird: but
[00:02:47] Jen & Stacy Conkey: he's just a master at anchoring.
[00:02:48] Jen & Stacy Conkey: And so when he was negotiating this contract, it was a military contract. He recognized very quickly that everybody in the room, all of the colonels in the room would adjust and like. Sit [00:03:00] up straight. Anytime he got close to the general's chair. So he started anchoring the general's chair. And when it came time to pitching the contract and after he'd already got him to say yes to six other things, he just went over to the general's chair and put his hand on it and he sealed it
[00:03:15] Randal McLeaird: That's wild.
[00:03:15] Randal McLeaird: Anchored
[00:03:16] Jen & Stacy Conkey: the chair. It's just, it's really crazy what, I love studying him. Yeah. My favorite. Yeah. Influencer. Like he's amazing.
[00:03:23] Randal McLeaird: So I have not studied it and that's why I'm curious about it. Like in sales in general, it is all the things you just said anchoring and then getting to the close and then getting people to sit up the way you get them to say yes multiple times before you close them.
[00:03:35] Randal McLeaird: All of those things. But. In depth, like I've never gotten past that. It's almost like somebody else has studied it and that is the sales technique. And so those techniques are the ones I've learned and. But in general, those details of how they do it, it's fascinating.
[00:03:48] Jen & Stacy Conkey: So interesting. Doing is distracting your conscious mind and getting beyond it.
[00:03:54] Jen & Stacy Conkey: Cause your unconscious mind process is like a hundred and or a million, 10 million bits or something per [00:04:00] second. And your conscious mind only does 126. So it's they distract the conscious mind and your unconscious mind just understands the assignment. So it's really fascinating. I love that stuff.
[00:04:09] Jen & Stacy Conkey: How was the podcast again,
[00:04:11] Randal McLeaird: Sean Ryan show. I'm on Spotify for his, but I don't know if that's matters, but his was show. 95 is the one I'm talking about and it's CIA's project Stargate, former us. Yeah, remote. You listen to it. And then, so my grandma's. Currently, I don't want to get heavy, but she's on hospice right now.
[00:04:34] Randal McLeaird: And so I'm sitting here talking to my mom and we're having all these conversations and listening to this guy's explanation of what happens when you die is, was fascinating because he's in the Vietnam war and he has this out of body experience because he's almost dies. And they talked about how they harness that out of body experience to go and be in these remote locations to view.
[00:04:55] Randal McLeaird: So somebody will give him a file that he doesn't open it. Doesn't do anything, and [00:05:00] somehow he's able to get into this. They train the brain to be able to get into and see what's in there. So it's like psychic slash. So anyway, his whole explanation was fascinating. And so that's show 95. And then the next one was pretty good.
[00:05:13] Randal McLeaird: And then Rick Doblin, I don't know if you guys like, he talks about MDMA and all the, and psychotropics and all the things that they're using that for. So anyway, he's maybe number two show, I think right now on Spotify after Rogan. Wow. He has some interesting guests and shows on. Anyway, welcome to the show.
[00:05:33] Jen & Stacy Conkey: Right on. That was talk about everything to get into rapport.
[00:05:37] Randal McLeaird: Why don't we kick it off and start and really talk multifamily first, because I'm curious how your business is structured right now. You guys have been investing all over the United States. And so why don't you break down what that looks like, how you've managed those properties and projects in diverse array of markets.
[00:05:53] Randal McLeaird: So where are you guys now? What are you working on?
[00:05:55] Jen & Stacy Conkey 2: We're on pause for acquisitions, although there's a mobile home project, [00:06:00] we need to take a break. Stuck mobile home
[00:06:01] Randal McLeaird: parks,
[00:06:02] Jen & Stacy Conkey 2: mobile home value, mobile home project that we're looking at with a, with an expert operator and we're looking at raising capital for that deal.
[00:06:09] Jen & Stacy Conkey 2: So that's, that was what was probably gonna be on the horizon. We were trying to take a couple months off, but in the last year we did a 96 unit that we did as a syndication and a 48 unit. That we did as a syndication that closed with 3 days before the end of the year, like right before the end. And then we close a 13 unit with 20 storage units just after the 1st of the year.
[00:06:29] Jen & Stacy Conkey 2: So the 48 unit was a syndication because it was like a 2. 2 million dollar raise. But the 13 unit with the 20 storage units was just a joint venture that we did with 1 other person, because we only need 270, 000 dollars to raise for that 1 as opposed to 2. 2 million. So we do both, but those are the 3 projects we did last year.
[00:06:46] Jen & Stacy Conkey 2: On top of, already, managing the rest of our portfolio, running our Academy, running our kids, Jen's mindset, alt work, all those things. There's not enough hours of the day is what we've
[00:06:56] Jen & Stacy Conkey: discovered for all the things we want to do.
[00:06:58] Randal McLeaird: Okay. So to that point, then how do [00:07:00] you manage all of the moving parts in, where are those assets?
[00:07:04] Randal McLeaird: Cause you guys are located where, and then where are the assets?
[00:07:08] Jen & Stacy Conkey 2: We are in Florida, Orlando area, and the 96 unit is in Kentucky. 48 unit is in St. Louis a suburb of St. Louis, Missouri. And then the 13 unit is in Indiana about hour and a half north of Indianapolis. Okay. So they're just, they're in different markets.
[00:07:23] Randal McLeaird: Yeah. How do you like the Indiana market? Because I've been traveling up there quite a bit and my in-laws Favorite?
[00:07:29] Jen & Stacy Conkey: Favorite, yeah. Since 2017. Favorite? Yeah.
[00:07:32] Randal McLeaird: Yeah. It's a beautiful place up there. They live in Carmel, which is just north of the city. Oh yeah. Carmel's nice. And so I looked there and then I looked even further.
[00:07:41] Randal McLeaird: I would say east. There's another small town out there that I looked at. Okay. So again, how are you managing those from afar? Are you guys, were you the leads on it or are you raising capital for those deals or how were they structured?
[00:07:53] Jen & Stacy Conkey: I just want to chunk this up and then I'll hand it back over to her.
[00:07:55] Jen & Stacy Conkey: So I think that, your listeners will probably appreciate a little bit of. Chunkery.
[00:07:59] Randal McLeaird: Chunk it [00:08:00] up.
[00:08:00] Jen & Stacy Conkey: We have three businesses right now, actually four. So the one is, we started over 20 years ago where we have our own portfolio, where we acquire and operate our own door count. Like it's our own deals that we found, we got it, it's all ours.
[00:08:16] Jen & Stacy Conkey: Oh, we have partners and stuff that we raise money for. So we have our own portfolio of real estate. Then we have our capital company where we raise capital for other operators that we have vetted. We know, and they're really good. And we do that for various reasons. Now, three of those deals last year, we're just at a different place now we've been doing this for 20 years.
[00:08:37] Jen & Stacy Conkey: So our original portfolio, we no longer go acquire things for ourselves. They just come to us because we've built a pipeline of all kinds of brokers that will give us, Hey, look at this off market deal because we've just developed that relationship. So we don't really go out looking for deals anymore.
[00:08:51] Jen & Stacy Conkey: They come to us because we spent the time building that pipeline. Now the capital company we will raise for other people's deals. We also have an academy where we teach people how to do [00:09:00] exactly how we do what we do to get our 2, 500 doors. In that academy, those people are in there for three years.
[00:09:07] Jen & Stacy Conkey: They become like veterans. They become one of us, and they're the ones that will bring us deals that will fall on our lap and we'll be like, Oh my God, I gotta be a part of this deal. And we'll be a part of the GP. We will even raise capital for those deals. As long as it's, 506 C accredited investors going forward.
[00:09:22] Jen & Stacy Conkey: We have all these systems in place that make it. Very easy for us to do this. So when we started the Academy five years ago, my vision was I wanted a community. I wanted to build a community, the community that I didn't have when I was going through it for 12 years alone. So I wanted to build a community.
[00:09:38] Jen & Stacy Conkey: And I also wanted to build very similar to MLB, a farming system. So I am teaching, training, developing and cloning us.
[00:09:45] Randal McLeaird: So that
[00:09:45] Jen & Stacy Conkey: I know, and I'm watching them for that first year, we're watching them very closely. Are they following the system? Are they taking shortcuts? If they make a mistake, how do they respond?
[00:09:53] Jen & Stacy Conkey: If something's not going right, what's their emotional quotients about that? How are they handling adversity? How are they handling these [00:10:00] conversations within? And then we identify who's like the elite, the best of the best. And then we make them an offer to stay in for years two and three, where we can now start looking at doing deals and coaching them at a different level.
[00:10:10] Jen & Stacy Conkey: Now our Academy focuses on the first step is joint venture. You come in, you do joint venture, no syndication yet starting small on a five, 10 unit, and then stair stepping so that you actually know how to manage that asset. We're very strong believers in that. Cause well, that's just how you build it. It's not overnight.
[00:10:27] Jen & Stacy Conkey: Then in years two and three, we teach them how to syndicate by year three, we're doing syndications with them. So we have this whole system in place where we don't really have to go out and look for deals anymore. They just come to us. And then the fourth business that we have is a mindset business, which we also do mindset in the Academy and mindset.
[00:10:44] Jen & Stacy Conkey: Just, it goes along with our capital raising company too, because you have to have the right mindset and you have to know how to get into rapport with people and nurture relationships. And it just, it applies to 80 percent of what we do in business. So now that I've given that context.
[00:10:58] Randal McLeaird: I [00:11:00]
[00:11:00] Jen & Stacy Conkey: think that it's in a better place for Stacy to just explain our system and why our system is, it's awesome.
[00:11:06] Jen & Stacy Conkey: I might be a little biased, but it is awesome how we remotely do it. And the fact that it grew so big that we then developed an academy to teach people how to do it. And now we've got this whole system and then we developed a capital company. So it was like our own portfolio, then the academy, then the capital company.
[00:11:21] Jen & Stacy Conkey: And then now we're launching a full on mindset company. So yeah.
[00:11:24] Randal McLeaird: That was a great recap. Thank you for that.
[00:11:25] Jen & Stacy Conkey: No problem.
[00:11:26] Jen & Stacy Conkey 2: Yeah. Jen and I work so perfectly together. We are for sure the yin and yang. Yeah. Cause Jen is like high level strategy. She sees the whole picture and I'm like in the weeds. Give me an Excel spreadsheet on a Friday night.
[00:11:38] Jen & Stacy Conkey 2: I
[00:11:38] Jen & Stacy Conkey: am good. Let's go. We have a, we have an inside joke at an LP joke at the house. If I look at her and go, that doesn't mean you're doing okay. And it's Chunk up the details, and then she's looking at me like, I'm down to earth. We do this a lot. So we have very complimentary attribute skills.
[00:11:55] Randal McLeaird: I love it. I love it. I'm going to start using chunk up now, whenever I'm having conversations. [00:12:00] That
[00:12:00] Jen & Stacy Conkey: was actually really good. Thank you. We were way too far down. We don't know how to do that. Yeah. We were like five feet off the ground and all the listeners are probably like what are they even doing?
[00:12:09] Jen & Stacy Conkey: Who are these chicks? Yeah.
[00:12:11] Randal McLeaird: You mentioned something there before we jump in Stacy, you mentioned something that you're an advocate for starting small, building, learning from there. So there are other programs that are not, they don't advocate that it's go one 50 or bigger go, hit a home run on first deal.
[00:12:26] Randal McLeaird: Good luck. You can manage this. You're going to get it rockstar. So did you guys go through that experience? Okay. So what happened and what led you to this go small learn the actual business.
[00:12:39] Jen & Stacy Conkey 2: So for in our own personal journey, that is what we did. We did start small and we, we just learned to ascend in scale.
[00:12:47] Jen & Stacy Conkey 2: And there's so much that you learn in multifamily just the entire process from A to Z that can be learned on a five unit or a 20 unit. Or a hundred unit. The problem [00:13:00] in this was not a problem for us. This more came when we started educating and realizing that literally it felt like every other education company out there was pushing, start with syndication.
[00:13:09] Jen & Stacy Conkey 2: When we learned about syndication, which was what? 2016, it was because I
[00:13:14] Jen & Stacy Conkey: had that harebrained idea. Let's go bigger for the acquisition fees.
[00:13:17] Jen & Stacy Conkey 2: Yeah. So we, when we went to, we're like, okay, cool. Let's learn about syndication. And we already had a lot of experience. We're like, Oh my God, this will be so easy.
[00:13:25] Jen & Stacy Conkey 2: And it was anything but easy. That is, it is not easy to do syndication. And what I realized at that point was, you know what we can there's no reason we can't merge the whole fees structure of the syndication with our current joint venture structure. So we started just doing that where we would do a joint venture, but we would build in the fees and we'd underwrite the deal that way.
[00:13:47] Jen & Stacy Conkey 2: So we were like, cool. We get the best of both worlds. I have been educating investors for over 15 years. It's my passion. I love to teach, and I love to coach people so that they don't have to go through the same pain that I did. That's like my big driver. [00:14:00] And what I see is that when someone wants to get started, the learning curve is huge.
[00:14:04] Jen & Stacy Conkey 2: There's an enormous learning curve when it comes to getting into apartments. There's lots of places to step your toe. To lose lots of money and in real estate in general, there's a learning curve apartments when you make a mistake. It's not necessarily just a 5 figure mistake. It's super easy to make a 6 figure.
[00:14:18] Jen & Stacy Conkey 2: And 7 figure mistake, so the position I've always taken with people, we say this publicly, and I'm sure that we are not popular and that we're probably on some people's like dartboard because of it. I got 1 movie con air
[00:14:29] Jen & Stacy Conkey: how he has like a
[00:14:30] Jen & Stacy Conkey 2: list.
[00:14:32] Jen & Stacy Conkey: We're
[00:14:32] Jen & Stacy Conkey 2: on someone's we're on the list because we will very publicly say.
[00:14:35] Jen & Stacy Conkey 2: You absolutely should not start with syndication. There's nothing more dangerous that you're going to do for yourself or your investors. And here's why. And I think a part of us saying that is to get people's attention, but we really do believe it, Randall. And here's the deal. When you start in your first deal is let's say a hundred units.
[00:14:51] Jen & Stacy Conkey 2: First of all, that's very difficult to take across the finish line 'cause you're not gonna get financing on your own. You're gonna have to get a sponsor. No one takes you seriously yet. 'cause you've never even [00:15:00] done a deal If you somehow managed to do it and take that deal across the finish line and now you're going through your learning curve as an operator with all these other people's money.
[00:15:09] Jen & Stacy Conkey 2: And you've never done a deal before and you're going through those little mistakes that you tend to make when you're new, but you're doing it to the tune of 10 million asset. It's very easy to wipe out people's retirements. Yeah. By doing that. And I know that sounds dramatic, but it's just the truth.
[00:15:27] Jen & Stacy Conkey 2: When you're doing your first deal, even if it's a 10 unit, you're going to do things and be like, Oh, okay. Oh, now I see why they said to do this. Okay. Good to know for the future, but it's fine. You did it on a little building. You're becoming an expert at what this is to own operate. And I don't mean operate as in you're on site.
[00:15:43] Jen & Stacy Conkey 2: To operate the asset, to manage the asset. And once you learn that you're like, okay, that wasn't so hard. Let me go up to 25 or 30 units. Thanks. And learn it at a little bit bigger level. Okay. I've got that down now. I have more experience. Let me go just a little bit bigger. So the whole thing that we say is do three deals, three smaller [00:16:00] apartment deals that kind of stair step up.
[00:16:02] Jen & Stacy Conkey 2: Because by the end of that, you are so ready for syndication because all that is at that point is just more units, but learning a new financing mechanism with the SEC rules and regulations. But when someone's brand new, if you pile on all of that, all the syndication stuff on top of all of the other things you have to learn, It's very rare that we ever meet anyone who's been able to take a deal across the finish table as a syndication for their first deal.
[00:16:29] Jen & Stacy Conkey 2: Just people come to our Academy. Like I've been trying to get into this for years. And then what we find out is they were taught to start with syndication and they still haven't done a deal.
[00:16:38] Randal McLeaird: Yeah.
[00:16:38] Jen & Stacy Conkey 2: Whereas, we have PF people come in and they'll do their first 10 unit deal. And in the first four to six months.
[00:16:44] Jen & Stacy Conkey 2: And then they start going really fast because they have credibility. They have experience. And that's why I go there. We just, we care about people. We want them to be successful. And we feel like doing a stair step approach is. So much better for them long term.
[00:16:56] Randal McLeaird: Yeah, no, I agree. I agree. I think in the last maybe seven [00:17:00] years, if you got started in it as a first time operator and going out and syndicating funds, it may have been a little bit easier to raise capital easier to maybe find deals, but recently.
[00:17:09] Randal McLeaird: A new operator going after 150 unit deal just seems irresponsible if you're raising capital and bringing in people's cash that now a lot of it seems to be getting wiped out, has a potential of getting wiped out. Anyway, I just want to touch on that since you guys have talked. Now that we've got Debbie Downer out of the way, sorry about that, guys.
[00:17:28] Randal McLeaird: That is,
[00:17:28] Jen & Stacy Conkey 2: it's not even Debbie Downer, really, it's just, we just want to help people succeed.
[00:17:31] Randal McLeaird: Yeah. Yeah. No, not on your part. My part. I'm like, sorry. There's some equity going to get wiped off. That's the reality of
[00:17:38] Jen & Stacy Conkey: what's happening.
[00:17:39] Randal McLeaird: Okay. So why don't we get back into then talking about how you guys are able to manage these deals now that we have the high chunk, high level, right where we are, what you guys are working on.
[00:17:47] Randal McLeaird: How are you able to manage these deals on just the asset side? How are you structured them? What are your joint venture partners? Just give me a few. And if you have, would you say 2, 500 doors? Is that what you guys are working on right now? Yeah. Yeah. [00:18:00]
[00:18:00] Jen & Stacy Conkey: Yeah.
[00:18:00] Randal McLeaird: Okay. So again, how are you guys structured to be able to manage those doors if they're not in your backyard?
[00:18:07] Jen & Stacy Conkey: That's the best part is that a lot, we get that question all the time and it's because of the systems that we have in place to do this remotely. That's our academy is called the remote multifamily investing academy. And until last year, We didn't even step foot in any of them. We have boots on the ground teams that we for example, when you ask us what our favorite market was earlier, and we said, Indiana, and we went into Indiana, it was 2017.
[00:18:29] Jen & Stacy Conkey: And at that time, it wasn't a big thing yet. Like it was on the verge of gentrification. And there was a lot of opportunity there. We like to go into a market with just one property and test the market before we go deep. So if we go in and we build that team, and that team's Capacity and bandwidth and their bench strength is strong.
[00:18:48] Jen & Stacy Conkey: We'd like to have three different. On the bench for, whether it's HVAC or contractors or plumbing, we like them to have a deep bench. So when we go into that market and we're getting with that team and we're getting a realtor in place, a [00:19:00] broker in place and inspector in place, all of those things, we're testing that market.
[00:19:05] Jen & Stacy Conkey: We're testing their capabilities and we're looking at one asset and as it performs, then we'll go deeper and we'll go bigger. And so we've been in Indianapolis and Indiana as a general since 2017, like it's going on eight years. It's our favorite.
[00:19:18] Randal McLeaird: And
[00:19:18] Jen & Stacy Conkey: that team that we have there, because of where we go, we're very selective.
[00:19:23] Jen & Stacy Conkey: Once we're in the market, nothing distracts us. I can't tell you if like from 2020 until I don't know, yesterday, I have people that will say, Hey, are you open to this deal? Hey, are you open to this deal? And I'm like, I'm not really in that market. We test our market because we have a lot of investors in our database.
[00:19:38] Jen & Stacy Conkey: We don't want to risk anyone's money. We got to know. So we have a specific methodology to go into the market, test it with one deal. Okay. Then do a second one, go deeper. And this team that we've put together, we're really just making sure, because the team, they form, they storm, they norm, they perform, they do all those things, right?
[00:19:54] Jen & Stacy Conkey: It's like you have to make sure that's what's happening. And you also have to have a third party, like we have an inspector that's [00:20:00] not related to anybody else on the team. And doesn't even come to the property unless nobody else is there. So nobody even knows who this guy is in each little market where we'll have him go inspect and send us stuff.
[00:20:12] Jen & Stacy Conkey: There's all kinds of digital assets like your phone. You can, there's Marco Polo, there's FaceTime, there's Duo. There's all these things where you can be there without having to be there. So we just leverage technology. We leverage relationships and we have a very profound system where that team is in place.
[00:20:29] Jen & Stacy Conkey: Thanks. And then we just continue going into that market deeper. So right now, what's four markets? Do we have a couple in Texas? Because yeah, we're in Texas.
[00:20:39] Jen & Stacy Conkey 2: No, and
[00:20:40] Jen & Stacy Conkey: Dayton.
[00:20:40] Jen & Stacy Conkey 2: We have
[00:20:41] Jen & Stacy Conkey: Ohio too. So it's five or six markets, right? And that's it. We're just densely in those markets. And we prefer to be in the rust belt, like in the Midwest, where our money goes further.
[00:20:53] Jen & Stacy Conkey: And it's very much where people it's value add, it's like a lot of value add markets. So in 2020, all the way [00:21:00] up until, actually from 2018, all the way up until six months ago, or when interest rates started going up in this, the floating rate started becoming an issue. People would always say, hold on a second.
[00:21:10] Jen & Stacy Conkey: Why are you investing there? You're supposed to be like a big player. Why aren't you in Texas? Why aren't you in Phoenix? Why aren't you in Florida? Why aren't you in all these high transaction markets? And because we don't want to go get the wrong financing in order to secure an asset. That's why. So we're focused on here.
[00:21:28] Jen & Stacy Conkey: So when everybody else is bum rushing these high transaction areas, and they're trying to get the financing to meet it, once that financing adjusts. You've lost it and now you're in the red and it's hard. So for us, our strategy always seems to be flip flop from whatever the herd is doing. So we're not really herd followers.
[00:21:44] Jen & Stacy Conkey: We're more like nerds. We actually identify as geeks about it. Like we're going to find those markets. So now we're not doing value ads is now is not the time to do a value ad. Now is the time to do stabilized cashflow on day one, get a momentum, book a win, do that and get it going versus [00:22:00] doing the value ad, but now everybody's swapping the value ads and I'm like,
[00:22:03] Randal McLeaird: you
[00:22:03] Jen & Stacy Conkey: don't understand the assignment.
[00:22:05] Jen & Stacy Conkey: So for us we have got a lot of, people just scoffing at us over the years, especially the last three or four years that why aren't you in there? Why are students over here? And even our students would say, oh, but this is a hot market. I'm like, by the time that's hot, it's too late. You need to get in an emerging market.
[00:22:20] Jen & Stacy Conkey: You need to get in one that's on the cusp that you can grow into. So we just have a different way of thinking. And a lot of people think we're crazy because remotely we manage that team. And of all of our properties, we meet with only the property manager and it's their job to manage the asset.
[00:22:36] Randal McLeaird: Yeah,
[00:22:36] Jen & Stacy Conkey: we review the reports.
[00:22:38] Jen & Stacy Conkey: We know what's going on. We ask the questions and we monitor that. And it's either a weekly meeting, a monthly meeting, or if it's been performing for a long time, a quarterly meeting. And then we have to review that market at least every six months, especially lately, especially since COVID. Reviewing the market, what's going on?
[00:22:54] Jen & Stacy Conkey: When can we refite? Not now. Okay how long should we hold it? What does it look like? What do market rents look like? [00:23:00] We just have systems in place to do that. And the reason why we have that is because we stair stepped into it. We didn't go straight for a hundred unit. We know how to manage it.
[00:23:07] Jen & Stacy Conkey: So now we know what questions to ask and we can scale faster. I talked to some folks that they started three or four years ago and they have 1400 doors right now. And I'm like, that's awesome. And they're like, I'm almost onto you. And I'm like, you need to slow down because you don't know what you're doing and you're not going in a way that's scalable, so they're afraid to leave their backyard because they feel like they have this illusion of control.
[00:23:31] Jen & Stacy Conkey: But you really don't. And Stacey has the best explanation of this. It's. You think you have control, but you don't. And I was one of those people until I met Stacy. I thought I got to be there. I got to smell it. I got to touch it. I got to sniff it. I got to do all the things. Because I can make sure that they're doing what they're supposed to be doing.
[00:23:47] Jen & Stacy Conkey: But the truth is, I don't know what contractors look at. I don't know if the HVAC was installed, right? I don't know if the tucking on the roof is right. I don't know if the flooring was done, right? I don't know anything, but the [00:24:00] contractors and inspectors do if they're certified. So she has a really good system for that.
[00:24:05] Jen & Stacy Conkey: And that's how we do it. It's. It's very simple, but yet not easy, but it's systemized.
[00:24:11] Randal McLeaird: Yeah. The system is all cancer.
[00:24:13] Jen & Stacy Conkey: Sorry.
[00:24:14] Randal McLeaird: No, that's solid. That's great. That's again, driving at how you guys are doing it so that if somebody is looking to do it, and again, we have agents that are listening that if they want to get into this asset class, it's a lot more than simply.
[00:24:28] Randal McLeaird: Just going out and just buying one, you can, but yeah, there's systems that are already established in place and you obviously have established those and set those up. So let's talk a little bit about just staying on the multifamily for another second here. It, and even not, I don't know. I want to talk about this RV park that you guys were looking at and jumping into, but.
[00:24:44] Randal McLeaird: I was listening to some of what you guys talk about and joint ventures are a big part of it, correct? Can you discuss joint ventures and how they differ from your syndications? You mentioned a minute ago, one was a lower capital raise or capital requirements, or you're [00:25:00] using your funds and you don't necessarily need to jump through all the hoops of A syndication, I assume that's part of it, but how do you leverage joint ventures in your transactions?
[00:25:09] Randal McLeaird: So I'll give
[00:25:09] Jen & Stacy Conkey 2: you an example of the the one that we just closed January 8th. That was Indiana. It was a 13 unit with 20 storage units, like on the same site. It was done with seller financing. What do we put down? 25%. Yeah. So 25 percent down sellers carrying it at 5 percent interest. On a 30 year amortization for seven years.
[00:25:28] Jen & Stacy Conkey 2: So I think it was when interest rates would have been seven, we got it for five, so that was just great. And it was seller financing. So that was all that coolness of the deal. One of our business partners found that deal. Like we have a, in our team, we have people who are like experts at acquisition.
[00:25:44] Jen & Stacy Conkey 2: We've taught them and trained them, but now we don't have to spend the time. So someone on our team went and found that deal. We conducted the due diligence, went through everything. And we're like, okay, this is not going to be a big raise for this. How much is it? So we, crunched the numbers and it's okay, 270, 000.[00:26:00]
[00:26:00] Jen & Stacy Conkey 2: There's, other people that we've known for a long time that have expressed that I'd love to do a deal with you, someday, but sometimes The entry point is too high for them. One of those people happened to sell a business fairly recently and was like, we want to invest with you.
[00:26:16] Jen & Stacy Conkey 2: So we just contacted them. Part of it too, is really understanding and knowing the people that you're building money relationships with. So I knew like they're heading into retirement years. So doing value add, wasn't a really big appeal for them. They want to keep their money at work. So doing like where you're flipping, you're turning your money over three years.
[00:26:35] Jen & Stacy Conkey 2: That wasn't appealing to them. So I was like this is going to be at least a seven year hold. If not longer, it's a cashflow market, not a value market. So I think they're going to be the right partner. Also, they're obviously willing to be active to the extent that you have to be for the joint venture.
[00:26:49] Jen & Stacy Conkey 2: But other than that, they're like, you can handle all the heavy lifting, that's go ahead. And that's our preference just so that we can operate it. But that was really, so how do we leverage joint venture partners? [00:27:00] We have a couple like 1 with someone from our team. We own the company together, but I'd say that's part of our joint venture partnership.
[00:27:05] Jen & Stacy Conkey 2: They're handling that. We have another person on our team that focuses on the asset management. We can do all of it because we've done all of it over the years. But what we've found is that the capital part. Has ended up being a really natural place for us. Really good at building relationships. We're really good at caring about what people really want and need, and then finding opportunities that match those up so that we can serve them.
[00:27:26] Jen & Stacy Conkey 2: And obviously it's, it serves us too. But our money partners in this case, came in, they're ecstatic because now they're part of a great deal. The returns were crazy high on it. As far as cashflow, Yeah,
[00:27:39] Randal McLeaird: I was going to say, so right now, are you focused more on cashflow? It sounded like that's what you're talking about, Jen, right now.
[00:27:45] Randal McLeaird: So you want a coupon. You want something performing already there.
[00:27:48] Jen & Stacy Conkey: Yeah. We prefer a unicorn hybrid ish. Yeah. It's hard to explain, but we weren't planning on doing the
[00:27:53] Randal McLeaird: unicorns. I
[00:27:55] Jen & Stacy Conkey 2: don't know. Yeah.
[00:27:59] Randal McLeaird: Sorry. Go
[00:27:59] Jen & Stacy Conkey 2: ahead. [00:28:00] When the interest rates started going up, cause we were big on that. I love value add.
[00:28:04] Jen & Stacy Conkey 2: There's nothing more that I love in life than value add. It's so fun. However, once the interest rates started going up and we would go into deals where there was no cashflow for the first year, but we're like, who cares? We're going to make so much money on the backend that it doesn't matter. We went through 2008.
[00:28:20] Jen & Stacy Conkey 2: So we have a level of wisdom and some scars that really have served us now that we're going through, this time. So as soon as things shifted, we immediately shifted our strategy from value add to, okay, it has to be cash flowing when we close. We never had that requirement previously, but now it's it has to cashflow when it closes because we don't know what the future holds.
[00:28:45] Jen & Stacy Conkey 2: We don't know how much of an impact the interest rate increase Is going to have on the capital markets on the valuations of the property. And so because of that, we were just, it's let's, we still want to do value ideals, but it has to be stabilized with [00:29:00] value at opportunities. And that way, if we can't pull off the value add that we're assuming, because cap rates.
[00:29:06] Jen & Stacy Conkey 2: Start going up because we just didn't know. And then turns out interest rates went nuts. We did not anticipate them going that high, that fast. I don't think anybody did. Yeah. So we were especially glad that we made that adjustment when we did, because even though the, the valuation of some of the properties has gone down because cap rates went up with the interest rates, the deal is still cashflow.
[00:29:25] Jen & Stacy Conkey 2: So honestly, it doesn't even matter right now. It only matters when We're done with financing and we're forced to either sell or refinance. Hopefully interest rates will have calmed down by then. And we'll be in the great position that we plan on being into to exit the asset. But that's what it is.
[00:29:39] Jen & Stacy Conkey 2: So ideally every deal we do is now is stabilized, but also has a value add upside. We don't do anything that is. Just stabilized. It has to have some kind of upside also, but the stabilization or the stabilized part is our primary focus to make sure that if it never goes up in value, it's still a good return on investment.
[00:29:58] Randal McLeaird: That, getting self on its [00:30:00] terms, 25 percent down five rate. That's pretty solid. You can get those all day, every day. And I love the structure that you have education. Leads to deal flow from internal deal flow around the country, I would imagine. So the other thing I want to ask, last thing on the multifamily or on deal structuring front, when you're looking at joint venture compared to syndication, do you keep the terms relatively the same, or do you have some, is it deal by deal?
[00:30:23] Randal McLeaird: You look at something like this one and you say I know you guys are looking for a coupon. Here you go. This is what we're going to pay you. No upside, but you're getting this what is it? Does that make sense? Like, how do you, how are you structuring your deals?
[00:30:33] Jen & Stacy Conkey: It is very deal specific.
[00:30:35] Jen & Stacy Conkey 2: So it depends on whether we're the ones doing like bringing the deal or whether we are joining a deal. So with the 96 unit, we joined that deal 40 and we joined that deal. So the, like the terms and everything, we were already established, but of course there are people that are in our Academy that we taught, so they've been with us for years.
[00:30:54] Jen & Stacy Conkey 2: So they're pretty much doing it the same way that, that we did, but the terms are really going to be driven more by [00:31:00] what's available in the deal. Because. Like you can't extract too much profit out of the deal as the operator. If it doesn't leave your capital partners enough to make it compelling for them to join, because now nobody's doing any deal.
[00:31:12] Jen & Stacy Conkey 2: So you always have to balance it with the 48 unit. It ended up being an 80 20 split, which is lower than what we wanted, but that was what our operating team had to come up with because at the time it went under contract in October rates were at the max. So the only way it would work for all of the limited partners was to Was if the GP only took 20 percent and I was like, we like to be at 30%, at least, but that's what it took.
[00:31:36] Jen & Stacy Conkey 2: And of course, interest rates went down. So now our LPs were just made so much more money. So it's great. But on the 96 unit, it was a 28 72 split. And on the 13 unit, it doesn't actually matter if it's JV or syndication to us. It's that doesn't matter. And when we're doing the underwriting, we're just playing with the numbers to make sure.
[00:31:54] Jen & Stacy Conkey 2: How much do our partner LP, whatever, how much do our money people get and how much do we get and is it [00:32:00] worth it to us? And will it be worth it to them? And when we find that sweet spot, that's what we propose. So like on the 13 unit, we were able to do a 60, 40, like 40 percent for us and 60 percent for our partner.
[00:32:11] Jen & Stacy Conkey 2: And we didn't end up putting any money into that deal.
[00:32:14] Randal McLeaird: That's yeah.
[00:32:14] Jen & Stacy Conkey 2: We were able to invest in the other, the 96 and the 48 as LPs. And as GPs, because we didn't have to put any money into the the 13 unit. The 13 unit was just one investor. Yeah. Yeah, it was just one investor. The
[00:32:25] Randal McLeaird: deal sounds awesome.
[00:32:26] Randal McLeaird: That's like a, I love the sound of that deal just in general. It's got storage plus it's got the units. So I'm working on a 24 unit right now. So I'm like, looking, just hearing deals and how you guys are structuring. The other side of it then, what advice do you have? I have a whole three or four episodes on this, but what advice do you have having students and having invested with other sponsors and leads?
[00:32:47] Randal McLeaird: For somebody, again, we got a real estate broker making a million dollars a year, he's got excess cash flow, he's ready to invest this money. How does he find a sponsor? What would your advice be to them to vet a [00:33:00] sponsor to put some capital to work with?
[00:33:01] Jen & Stacy Conkey 2: When you're saying sponsor, you're talking, I just want to make sure we're talking the same thing you're talking about, like the operator.
[00:33:06] Jen & Stacy Conkey 2: Okay.
[00:33:06] Randal McLeaird: Yeah. Whoever the lead sponsor is bringing the deal to the table and looking to raise capital.
[00:33:11] Jen & Stacy Conkey 2: How do they find them? How do they
[00:33:13] Randal McLeaird: find or vet them? Betting is really the most important part.
[00:33:16] Jen & Stacy Conkey 2: It is a hundred percent on the finding. It really comes down to tapping into your networks. And especially if you're going to be investing in multifamily, getting involved in organizations or Facebook groups or whatever, that the focus is multifamily and just start getting to know people and watch people have conversations the very first.
[00:33:35] Jen & Stacy Conkey 2: Thing I always tell people is like, when you meet with someone, you're going to get a vibe, not that this is due diligence. It's not, but you're going to get a vibe for whether are you a straight shooter or are we blowing smoke up someone's, anyway. So it's if you don't feel like they are completely on the up and up, just immediately cut that off.
[00:33:50] Jen & Stacy Conkey 2: Don't waste any time because your gut, your unconscious mind knows. So much. And so if you're like, I'm not sure you're right, it's no good. Like just move on. [00:34:00] But in the actual like vetting process, you're finding out like what deals have they done? What size deals have they done? And how does that compare to the size of the deal that you're looking at with them?
[00:34:12] Jen & Stacy Conkey 2: For example, if we're looking at a 250 unit deal and the sponsor or the operator. Cause we've been LPs also on deals before. If the sponsor has done, a 50 and a 75 unit and an 83 unit and now we're doing 252, we're like I don't really know that you have the
[00:34:29] Randal McLeaird: construction yeah,
[00:34:31] Jen & Stacy Conkey 2: exactly.
[00:34:32] Jen & Stacy Conkey 2: So we, we like to see that they've taken a stair step approach because we do really believe that's. That is where your knowledge and your experience and your value for that reason come from. So what has been their path? What deals have they taken to fruition? What is their philosophy? We had, someone that we've done some deals with in the past recently brought us a.
[00:34:50] Jen & Stacy Conkey 2: Yeah. Yeah. Yeah. A three year deal in the past. We love three year deals, but once interest rates changed, I was like, I'm not doing anything. That's a three years. I have no idea how quickly this is going to turn [00:35:00] around. And that's too short for us. So their philosophy no longer worked with our philosophy.
[00:35:05] Jen & Stacy Conkey 2: They were like, Oh no. In three years, blah, blah, blah. I'm like, I don't believe it's going to recover that, that quickly. So we're not okay with that anymore. What else do we do when we're talking
[00:35:14] Jen & Stacy Conkey: to them? I think that a red flag for me personally is that you definitely want to look at that progressive track record.
[00:35:20] Jen & Stacy Conkey: I'd like to ask questions about the deal and if they can't write, rip off the numbers, they don't know the deal that well. And I will also ask questions on how many other deals are you actively. Operating or trying to rehab or trying to stabilize. How many projects are you managing right now? And I can't tell you how many times that's saved us because, it comes up, Oh, we're working on four over here.
[00:35:41] Jen & Stacy Conkey: We're doing this and this market, and they're just going so fast. And that's a big red flag for me, because if they're going that fast and they're not going slow enough, are they financing a right? Did they stress test the deal properly? Another thing when you're looking at it in year one, if the DSCR is below 1.
[00:35:59] Jen & Stacy Conkey: 5, [00:36:00] 1. 4 at most, I just wouldn't do it right now. That's just me because there's just too many unknowns. So I would look at how did they stress test that deal? What is the DSCR in year one? What happens if vacancy is so high? What happens if vacancy is so high? 25%. What if it's 40 percent at what point will you no longer cashflow?
[00:36:21] Jen & Stacy Conkey: What are your parameters? What's that bottom line where you're still going to cashflow as long as vacancy isn't too high. And then what does it look like from turnover? It's just so many different red flags that if they don't know those details, then they might not be the one to talk to.
[00:36:35] Jen & Stacy Conkey: It might be the guy who's capital raising or the girl who's capital raising, and they don't know enough about the underwriting process. So I would urge you and nudge you to find out who did the underwriting and how can I speak with them?
[00:36:47] Randal McLeaird: How
[00:36:47] Jen & Stacy Conkey: can I look at the underwriting tool? How can I look at your assumptions, your projections, your performance?
[00:36:51] Jen & Stacy Conkey: How can I look at the details? And I want to get down to a gnat's butt on what the numbers look like. What's the cap rate on exit? And [00:37:00] how did you determine that? There's so many questions that before you hand over your hard earned money, You need to really vet these folks and what their experiences, how they're approaching it, is their risk tolerance the same as yours?
[00:37:13] Jen & Stacy Conkey: Are your values the same as theirs? Because if you're talking to five year, seven year deal, that's almost, some marriages don't last that long, so really know the person that you're about ready to invest with. And all these shiny IRR numbers and all these big returns, like you've just got to look at it deeper and really scrutinize it.
[00:37:31] Jen & Stacy Conkey: And it comes down to how did they finance it? Will the rate ever float? That's a good question right now. Is this a floating rate debt? If it is there a rate cap? When does it expire? What is that rate cap? Because everybody in 2020, 21, 22 got rate caps, but it was at six and a half percent. It got higher than that.
[00:37:52] Jen & Stacy Conkey: Oh, we need to be prepared for those types of questions and you need to know what to expect. And also asking questions like, When there's [00:38:00] problems in the deal and you're, what's the communication process look like? How will I know, how will I be made aware of those things? Like in all actuality, what's the upside of this deal, but more importantly, what's the downside?
[00:38:10] Jen & Stacy Conkey: Cause I have to determine whether or not I can live with that downside and can they articulate that downside? And can they articulate it in a way of here's my ABC, all of my contingency plans to mitigate. That downside or do they really not know? And are they speaking with certainty? Like your subconscious mind Stacey's right.
[00:38:27] Jen & Stacy Conkey: It'll pick up your sensory acuity will pick up on any little tick in the face. That seems like it's uncertain. You need absolute certainty that they know what they're talking about. And then what they say, you need to go compare it to the numbers. The underwriting tool is that's just me. If I'm going to put at least 6 figures in a deal.
[00:38:43] Randal McLeaird: You're touching on something now that I want to transition into, which is NLP nor linguistic programming. Okay. So talk to me I don't know anything cause I don't write about NLP. And then tell me how much of that plays into conversations that you have with investors, with sellers, with students, with.
[00:38:59] Randal McLeaird: Just in [00:39:00] general. So we can't do an exhaustive program yet on this, but anyway, tell me what you can.
[00:39:04] Jen & Stacy Conkey: A couple of high level things. It NLP is everything in this business. It's everything in life and all honesty. It's language it's about linguistically communicating, but every single person on this planet has a preferred communication style.
[00:39:16] Jen & Stacy Conkey: You either prefer visual or you prefer auditory or you prefer kinesthetic or auditory digital. Like you have these preferred ways where you like to receive information. I'm visual. And I'm also kinesthetic, but my primary is visual. If I can't see it, you lost me. Like you got to draw it out. You remember those old sketchy cartoons that would draw stuff.
[00:39:36] Jen & Stacy Conkey: I would just be captivated. You have me the whole way, right?
[00:39:39] Randal McLeaird: Whiteboards
[00:39:40] Jen & Stacy Conkey: Everywhere. Whiteboards are my best friend. And then there's the kinesthetic side. That's they speak a little bit slower and they're. Actually formulating their sentences, as they're going a lot of filler words, they might be a little bit more relaxed in their chair.
[00:39:54] Jen & Stacy Conkey: They're a little bit more calm. Whereas a visual person's Hey, we're going to go. I'm going to talk. I'm going to do the things auditory [00:40:00] digital will talk to themselves and answer themselves. And they're just like all over the place. They could be in another room and hear your conversation and then opine on it an hour later.
[00:40:08] Jen & Stacy Conkey: And you'd be like, you weren't even in the room. They process information differently. The reason why I share that is between those three preferred communication styles, everybody gives clues as to what they prefer. So if you listen, somebody who's visual will say, Hey, can you just show me the way so that I can see exactly what we're working with here?
[00:40:27] Jen & Stacy Conkey: I just need to know your vision. That's a visual person. Or they might say something like, I hear you. And I need you to listen to what I'm going to say next. This is really important to me that you hear me out. That's obviously auditory. And then a kinesthetic person will say something like, I feel you, but I just, I need to wrap my arms around this.
[00:40:43] Jen & Stacy Conkey: I need to get some, it's got a concrete plan and you've got to show me that. So they're feelers, right? So if you hear that all you do, whether you're trying to pitch a deal, sell a house or get your kids to do something is match their predicate words. And their [00:41:00] body language. So last night we were talking to somebody on the phone, super kinesthetic guy, full of love and heart, all the things.
[00:41:07] Jen & Stacy Conkey: And he's talking really slow. One of my unique superpowers is I will identify what they are right away. And I started talking just as slow and Stacy was like this. She's like Judy Hopps on Zootopia, let's go. Yeah. A three humped camel. Got it. Pregnant. Woo. Like that, Stacey. But I will slow down whenever there's a kinesthetic person because.
[00:41:30] Jen & Stacy Conkey: That's how they prefer to be communicated with. And now I'm in rapport with them because I am being like them. So they're going to listen to me and I'm going to be able to understand them better because now I'm actually in that modality. I am with them. I am present. They feel like they're the only person in the world and I'm speaking their language, even if it takes 20 minutes when it could have taken seven.
[00:41:51] Jen & Stacy Conkey: I'm there for it. And that's probably the biggest NLP tip that I can give you. Second one is people's faces tell you everything, [00:42:00] except you have to determine what it is it's telling you. If you were to talk to Stacey and she started doing this. You might think she's mad. It's not true. After you get to know her, you realize that because she's auditory, she's thinking about what you're saying, but she's also visually distracted by what's going on.
[00:42:16] Jen & Stacy Conkey: And she's got, shiny squirrel syndrome. So she's really got to focus. And this is what her face does when it focuses. And our kids will be like, Mommy's mad at me, but it's not, it's just, she's thinking. So you can learn somebody's facial expressions and what they mean. I played poker for years. So watching facial expressions, watching mannerisms, watching how they do their hands, how they do movements, what happens in their face.
[00:42:38] Jen & Stacy Conkey: If their lip gets really thin, if it gets tight, if their face, like all of a sudden is shows up in like the smallest little increments. So when you're negotiating a deal and you happen to be face to face, which I never am, it's usually on the phone or a zoom, but it's never like in person face to face.
[00:42:53] Jen & Stacy Conkey: If you are one of those people that you're face to face, like if you're a realtor and that their facial expression is they're not very interested, they're not [00:43:00] engaged. Tune into their predicate words. Watch their body language. Are they breathing from the chest? Are they breathing from the belly?
[00:43:06] Jen & Stacy Conkey: Are they sitting up straight? Are they in a freaking hurry? Match them. Step into their energy, meet them where they are, and now you'll get them engaged, and then you can have a meaningful conversation. Those are probably the biggest ways that it impacts our business, our life, our house, everything. We just tune in to what the preferred communication style is and adapt.
[00:43:25] Jen & Stacy Conkey: Cause it's really just a matter of responsiveness and the person who's the most flexible is going to get the most out of the conversation. So in my opinion, NLP is like the best thing you can do in your life. You just go learn how to speak the language of everybody.
[00:43:39] Randal McLeaird: I'm now self conscious what have I done in this time?
[00:43:42] Randal McLeaird: What am I doing with my hands?
[00:43:45] Jen & Stacy Conkey: Imagine being married to her! I was like, are you reading me? Wait,
[00:43:49] Randal McLeaird: what's
[00:43:49] Jen & Stacy Conkey: happening right now? There's also a way, this is really full, if you're selling houses because I know there's a lot of realtors here, but people's eye movement tells you something about their strategies [00:44:00] and how they think.
[00:44:01] Jen & Stacy Conkey: So if I were to ask you, hey Randall, tell me, what was the color of your room when you were a kid? What were the color of the walls
[00:44:08] Randal McLeaird: look up to the, you just looked up, right? So he's got, you look up into the right.
[00:44:13] Jen & Stacy Conkey: And if I say, listen, what would it look like if it was blue? And then you go, I should go the opposite way.
[00:44:19] Jen & Stacy Conkey: So when you're recalling information that you remember, you're recalling memories, your eyes will go a certain way. And when you're creating information, your eyes will go a different way. It's up to you when you're watching that person to determine what's the creation and what's the memory. Based on watching them.
[00:44:35] Jen & Stacy Conkey: But if you're a realtor and you're like, Oh man, what house do you live in? Now? What prompted you to buy it? What did you like about it? Watch their face, watch their eyes, see what makes them light up. And they probably already know this, but then take them to those areas of the house and then ask them like, how did it feel?
[00:44:48] Jen & Stacy Conkey: What, how does this house feel compared to that one? Or what do you like better about this house? There's getting them into a feeling state. They're going to have a better experience. And now you've understood them. They feel understood. They feel heard. You've [00:45:00] got them. You've got them as a relationship long term because now you can influence them and get them what they really want.
[00:45:06] Jen & Stacy Conkey: So it's not really manipulation. It's about extracting information on what they want. And then they're going to love you because you get it for them.
[00:45:14] Randal McLeaird: Yeah. I love that. There's an old adage of like facts, tell story, sell, and that's an add on to that. You get them into the story and the feeling mode rather than the facts.
[00:45:23] Randal McLeaird: This is a three bed, two bath, 1300 square feet. I love that. So if somebody's trying to get better in that realm, what either book or program or anything would you recommend if there is such a thing? How did you start learning about it?
[00:45:37] Jen & Stacy Conkey: The person that I got certified from, his name is Dr. Matt James. At the empowerment partnership.
[00:45:42] Jen & Stacy Conkey: He was actually trained by Tony and Richard Bandler and Grindler. Like he's from the source, like the dude owns NLP. com. So just go to NLP. com. That should tell you something. He owns that website and he's the best. He's so good at it. Go to NLP. com. You can go to the integrative [00:46:00] NLP practitioner course.
[00:46:01] Jen & Stacy Conkey: It's a four day course. And if you use the code GenCon, J E N C O N, all caps, I believe that code will give you 50 percent off because I'm the alumni.
[00:46:11] Randal McLeaird: Because you are Jen. Nice. Okay. We'll throw that all in the show notes as well, just so that it's there and anybody can click through to it. So I appreciate that.
[00:46:19] Randal McLeaird: It's fascinating to me before we started recording was we were just talking about NLP and out of body experiences and all of those things. So yeah it's a bit up there. And obviously Tony Robbins is big into it. So what is the difference then you mentioned he's doing something else now? What is the difference in the two?
[00:46:33] Jen & Stacy Conkey: Yeah, so Tony does neural associative conditioning, which is just wiring in your body, your central nervous system, your voice, activating all of the elements of you and your body and like conditioning yourself with repetition. And he uses language. So he does, it's like his own thing he created. It's his own methodology.
[00:46:52] Jen & Stacy Conkey: And I've studied him for at least four years now. And it's just, it's incredible what he does. What he's doing is he's getting it into [00:47:00] every fiber of your being. So when he's make a move, or say yes, and he's getting you to activate your whole nervous system. So it's you're learning it.
[00:47:08] Jen & Stacy Conkey: You're moving by moving, by talking, by speaking, by thinking, by doing all of those things. It's really just getting into every fiber of your being and you're shifting your identity.
[00:47:17] Randal McLeaird: Do you think that he does that because the four different types of people, and so he reaches more people because of that?
[00:47:23] Randal McLeaird: That's
[00:47:23] Jen & Stacy Conkey: exactly why. That's exactly why. When you're there, you feel like Tony's talking to you. And he doesn't even know who you are. But you, and you know that, but you're like, no, but he, that was for me. He meant that for me.
[00:47:35] Randal McLeaird: It's
[00:47:35] Jen & Stacy Conkey: because he's just. He's amazing at meeting everybody in the room. And he's his words.
[00:47:41] Jen & Stacy Conkey: When you listen to his words, he is hitting every predicate and almost every sentence that comes out of his mouth at like a master. And that's why everybody feels like they're the only person in the room when you're at a Tony event. And there's 10, people there. He's just in the zone dialed in and he knows how to extract the information and meet you where [00:48:00] you are so that you move and take action and show up for yourself.
[00:48:04] Jen & Stacy Conkey: Yeah.
[00:48:04] Randal McLeaird: All right, let's talk then you guys have a book, you wrote a book. It's all about multifamily. Do you guys want to touch on that a bit?
[00:48:12] Jen & Stacy Conkey: We have it on Amazon and an ebook.
[00:48:18] Jen & Stacy Conkey: What are the things?
[00:48:19] Randal McLeaird: Tell me about the records back there. What's going on back in there? That's
[00:48:21] Jen & Stacy Conkey: just a seven figure CEO from Tribe of Buyers. This is our first million dollar raised for our capital company. We got an award for that. And our book is usually right behind it. It's multifamily freedom packing and the playbook to long term cashflow.
[00:48:36] Jen & Stacy Conkey: And it's on Amazon, but we also have a link for an ebook somewhere that we could probably get you if anybody.
[00:48:42] Randal McLeaird: Yeah. If you shoot that to me. So another, misconception is they are really two different companies, the operating company and a capital raising company. And so I've been in some other masterminds and they're linked together in a sense.
[00:48:56] Randal McLeaird: It's Hey, you can be the operator and go raise the capital. And you can, of course, [00:49:00] but I have looked at it as these two different things. You're getting into the business and you're simply trying to raise capital. That's all you want to do. Then you are capital raising business. You're not going to be the operator and that sort of thing.
[00:49:11] Randal McLeaird: So there's a whole different set of systems and processes and communication methodology that you should have. So when you guys were establishing the capital company, what were some of the challenges, for just setting that up, you'd already been operating for a while. So was it easy? It was an easy transition.
[00:49:26] Randal McLeaird: Hey, we don't have the deal flow all and there are other opportunities. So we're going to raise capital. What was the rationale behind that?
[00:49:33] Jen & Stacy Conkey: It was easier than most people because we already have a database and we just transferred it over. It was really just about branding and doing those things. And we're at a point right now where we're trying to figure out, do we want to create a fund?
[00:49:45] Jen & Stacy Conkey: And we're in Hunter Thompson's RaiseMasters and Capital Collective Group to learn about that. We haven't decided yet. So we're still going through that process. That's probably the only piece of friction that we have, but really starting a capital company was relatively easy, actually.
[00:49:59] Randal McLeaird: Yeah. For us. [00:50:00] Okay.
[00:50:00] Randal McLeaird: So why would you not consider a fund if you have already done this? I guess what's holding you back?
[00:50:07] Jen & Stacy Conkey: Jen's going to be like, Stacy.
[00:50:09] Randal McLeaird: Yeah.
[00:50:10] Jen & Stacy Conkey: Here's where I'm at. I get it.
[00:50:13] Jen & Stacy Conkey 2: The thing is, I'm not sure that the listeners will understand all of the intricacies. So I'll just say this, managing a fund, you have, there's a lot of administration.
[00:50:19] Jen & Stacy Conkey 2: So we have the option when we're coming in. With our capital company with capital, we can either go in as a co GP, which means we're part of the general partnership. We'll have some role in the deal, but our primary role was to bring in the capital relationships. And we own the deal. We have part of the acquisition fee, the disposition fee, like we get a part of all of it.
[00:50:40] Jen & Stacy Conkey 2: That's the COGP model, the fund model, or the it's called special purpose vehicle fund to funds model, which is fairly new to me is you have all of your investors. And like you run your own syndication and people invest with you and then you go invest in the deal. We're told that you end up [00:51:00] making the same amount of money doing that.
[00:51:02] Jen & Stacy Conkey 2: I'm not sure if that's true or not yet. I have some number, I have some Friday night spreadsheet business to do with that. But where I'm hung up is if it's going to make the same amount of money, but running a fund requires. Me to handle all the K ones, all the communication, all the everything, and I'm going to make the same.
[00:51:21] Jen & Stacy Conkey 2: Why would I do all that extra work? So honestly, Randall, that's where I'm hung up. I don't want to do any more. And we've done well being co GPs. And I think the reason it's becoming so popular and even necessary is A lot of people, when they're starting off raising capital, they don't have a ton of relationships.
[00:51:38] Jen & Stacy Conkey 2: So if they could raise like 300, 000 on it on their first raise or 500, 000, that's that is so good. That's such a big deal. If they're working with an operator who's raising 7 million and they're going to bring in a whole bunch of people that only raised 500, 000 each, they're going to end up having 14 co GPs.
[00:51:57] Jen & Stacy Conkey 2: That's not going to hold up with the SEC. The SEC is going to [00:52:00] know you're paying them to raise capital. And that's what you're not allowed to do. So I know that the fund model is very helpful for the people who are bringing in smaller amounts, because to be a co GP, when you're really only bringing 10 percent of the capital, it's hard for it to stand up with the SEC is really where
[00:52:16] Jen & Stacy Conkey: it comes from.
[00:52:17] Jen & Stacy Conkey: And it's hard for me to argue with her when she can go to one investor and get 270, 000 for one deal.
[00:52:22] Jen & Stacy Conkey 2: Yeah, because we can raise larger amounts. So we're not in that. So I'm just, I'm hard pressed to go into a model that's going to create more work, more communication, more dealing with taxes and K ones and investors, asking questions about stuff.
[00:52:37] Jen & Stacy Conkey 2: And same, make the same amount of money.
[00:52:40] Randal McLeaird: Gin side. Let's hear the other side of you. My side
[00:52:43] Jen & Stacy Conkey: is it's who, not how I do feel that we need to make an educated decision. So I want to see the 96 unit, the 48 unit, the 13 unit, everything like side by side and see how it shakes out in both calculators and then decide.
[00:52:56] Jen & Stacy Conkey: Cause those are three fundamentally different deals. And then figure [00:53:00] out what would it look like? Cause I know that it would fall on you for all of that business stuff that I do people, I don't do forms and K ones. I don't know what the hell that is. That sounds like alphabet soup. And so it would fall on you, but it doesn't have to, I feel like we could hire somebody and I'm sure that people out there with funds that know how to do that.
[00:53:16] Jen & Stacy Conkey: And they have teams and they have the structure, which is what we're learning from Hunter. So I just feel like we need to dispel some of the myths and just bust them. It's either true or it's false, or it's somewhere in the middle. And then decide, and we're almost there. She's a freak in the spreadsheet, so she'll go figure it out, and then we'll look at the side by sides and decide.
[00:53:33] Randal McLeaird: Okay, so a couple questions then, and just because we've looked at this model as well. One, there's fund administrators. I don't know if they talk about those in Hunter's Deal, but they take off the majority of what's going on. How you're structuring your fund, are you charging, or would you? One, obviously, how much you're raising would determine if it makes sense to actually do.
[00:53:50] Randal McLeaird: There are some guys right now doing 1 million funds, very small, and they're throwing that in. As a single LP into a deal, and to me, you're [00:54:00] almost double feeing that deal, right? Unless they're doing a straight pass through, which you can do a straight pass through. And then you have some other guys who are actually raising the capital doing 20 million, a hundred million dollar funds and charging a 2 percent fee management fee on the money, and then putting that into deals, allocating that capital.
[00:54:17] Randal McLeaird: So I'd be curious to see which structure, how you guys have thought that side of it through and how much you're looking to raise if you were to do a fund model.
[00:54:24] Jen & Stacy Conkey: The latter one is the one that I want to do, 50 to 150 mil, and that's what I want to do.
[00:54:30] Randal McLeaird: Okay, and charge, are you charging on the equity? Under management on a deal by deal basis, then would you be participating in the actual distributions that are coming out or are you, your company then becomes the equity management company where you're getting the fee, the 2 percent on the equity, and you're not Anything other than maybe the on the funds again, they carried interest on the fund.
[00:54:58] Jen & Stacy Conkey: That is exactly what [00:55:00] we need to figure out. That's the whole thing is which number would be higher? This
[00:55:04] Jen & Stacy Conkey 2: is an area that's new to us. So we're still just even learning. What is this?
[00:55:08] Randal McLeaird: Yeah.
[00:55:09] Jen & Stacy Conkey 2: The way that we're learning about it, the way that we're being taught is not a percentage of the equity.
[00:55:15] Jen & Stacy Conkey 2: Necessarily, although they're like, Oh, you could do it lots of different ways, but I'd say the way that it's been described to us, which is where I got to go crunch some numbers is let's say that because we're bringing in a large amount of money, a million dollars into a deal where the minimum is 100, 000, because we're bringing in a large amount as an LP, that we would get some kind of preferential treatment, better economics.
[00:55:34] Jen & Stacy Conkey 2: So the idea that from that, the way that they're teaching it is, Let's say that the prep is 8 percent because we're the, we're a large investor, but smaller investors would get 7%. What they'd say is, look, we'll pay you your fund 8 percent because your fund is a bigger investor and you go ahead and pay your investors who are in the fund, the 7%, the same thing that they would have got if they came directly to us.
[00:55:57] Jen & Stacy Conkey 2: Except they don't have access to us. We don't have access to [00:56:00] them. You're in the middle. So they're teaching you're basically getting that sliver in the middle.
[00:56:04] Randal McLeaird: Yeah, that's definitely
[00:56:05] Jen & Stacy Conkey 2: waterfalls and there's a lot of complexity obviously to it, but.
[00:56:09] Randal McLeaird: So you're getting almost like a side letter agreement with the operator when they're putting out, because they have, we can get the weeds in this, I'm just going to care.
[00:56:16] Randal McLeaird: So again, they structure their deal, their PPM comes out and it says, we're doing a seven 70 30. You guys come in and say, Hey, we're bigger. Part of the pie one, you could ask for governance on the deal. If you are putting enough money into it so that if they don't operate the deal properly and you're the largest equity person coming into the deal, you can take it over if they are failing on the deal.
[00:56:37] Randal McLeaird: So that's one thing. I don't know if you guys have discussed that or not. And then the other side of it is if you're getting a, an eight prep, because the way you've structured it, you're still going to have to pay your investors. Whatever your PPM for your fund States. So like on a deal by deal basis, you're not going to change that.
[00:56:52] Randal McLeaird: It's just, it's your job to outperform whatever you've told them that you're going to do.
[00:56:56] Jen & Stacy Conkey 2: You're talking about a fund in the traditional sense. And what we've been learning [00:57:00] about is something I'd never heard of. It's a fund for a deal. It's not like a fund where people just invest in you and you go find opportunities, which is the whole way I've ever heard of funds until.
[00:57:10] Jen & Stacy Conkey 2: Six or seven months ago, which is like some hybrid special purpose vehicle fund
[00:57:14] Jen & Stacy Conkey: to
[00:57:14] Jen & Stacy Conkey 2: fund. And that's where we're trying to do establish,
[00:57:18] Jen & Stacy Conkey: but
[00:57:18] Randal McLeaird: okay. We got in the weeds there. It really is fascinating. And it's a new model that you guys are talking about. And I've seen people using that model as well, but if you're going the 50 to a hundred million dollar route, you're not going to have that sort of setup.
[00:57:30] Randal McLeaird: You're going to be taking 5 million, 10 million checks to an individual deal, looking at bigger deals, finding the operator, vetting the operator, and then You know, you again are putting that whole structure in a pace. So people are investing with you and you are deploying that capital or allocating that capital to the operators.
[00:57:47] Randal McLeaird: So anyway, again, if you're listening to this, a lot of weeds go back, listen to a lot of other episodes that I've done on this, because I geeked out on funds. And so we've done one and I'm happy to talk to you guys about that as well, offline, but any other advice that you'd [00:58:00] give real estate agents who are looking to invest, maybe haven't invested yet, like what would your advice be to them?
[00:58:06] Randal McLeaird: And then we'll wrap it up with that.
[00:58:08] Jen & Stacy Conkey 2: My advice would be like, get started because years just go by too dang fast. And then you're, you continue to be like, Oh yeah, I should. And now it's three years later, five years later, even if it's a small amount or a small deal, so small, something like start, because that will create momentum.
[00:58:23] Jen & Stacy Conkey 2: Don't stay in a place of, Oh yeah, I want to do something with it. Your future self will thank you. That's my biggest advice is get started because you're going to learn as you go. And. It's gonna set you up for your future. You don't want to always be transactional for your whole life.
[00:58:37] Jen & Stacy Conkey 2: You want at some point to be able to have Passive income. I copy.
[00:58:42] Randal McLeaird: Copy. Love it. All right. It was great to have you both. Jen, Stacey Conkey crushing it. Thanks for coming on the show and shared your knowledge and your experiences and everything else. It's been awesome conversation.
[00:58:54] Jen & Stacy Conkey 2: Thank you for having us.
[00:58:55] Jen & Stacy Conkey 2: You
[00:58:56] Randal McLeaird: know that 80 percent of the agents we speak with got into real estate in order to [00:59:00] gain passive income so they could obtain financial freedom and become work optional. If you want to stay up to date, the best way is to make sure you're subscribed. So if you haven't done that, go ahead and do it now.
[00:59:09] Randal McLeaird: We'll catch you on the next episode.