Tim Bratz joins Brian Trippe on the ALA REI Masterclass Podcast to talk about how he came to find the success he’s experiencing now, as well as sharing some important tips about mindset and strategy for getting involved in multi-family investing, as well as different ways to raise capital.
[1:48] Tim started in real estate nine years ago, it’s been a long climb to get to where he is today. He first became a commercial real estate agent in New York City and then realized that owning real estate was the way he wanted to go. He made $14,000 on his first deal and got hooked from there.
[5:33] He fell into his first apartment acquisition in 2013. As he began to build his portfolio, he had to give up some equity so he could continue to build his reputation. He quickly realized that he was making about double his return costs when he flipped apartments versus flipping houses. He uses the strategies he used on the single-family market side to master the apartment building realm.
[9:33] Was there a mindset shift from single-family homes to the apartment buildings? The more you make something a big deal, the more it is a big deal. For Tim, he tried to keep it the same for his team, just instead of single family homes it was apartment buildings. It’s not an entirely new realm.
[14:55] In real estate, especially, it’s important to be patient while you’re building up your career. If you’re creative, you can bring in your own team to help with your deals (that you flip, etc). This allows you to focus on what you’re best at while other people work on what they’re best at.
[20:30] If you’re new to the business, one of the first things you can do is to start finding deals. You can start making money in different deals by finding a motivated sellers for your current deals.
[24:22] When finding motivated sellers, Tim looks for distressed situations, either figuratively distrressed or distressed from a management situation. He talks specifically about some of his deals and how they are returning his investment.
[29:30] Tim explains some of his strategy for finding and buying properties. His target is value-added properties. He also only buys in B-class areas. His model is to force appreciation; he does the renovations to increase the income and decrease expenses, which increases the value of the property.
[37:05] Tim talks about some of the different ways to raise capital. There are two ways to raise money for apartments buildings: the traditional syndication model (investors get a certain amount of equity in the deal, but only get paid if the property is performing) and an opposite model (that Tim uses), where the investors get paid regardless, and he only gets paid once the property starts performing.
[41:55] If you can raise the money but you don’t have experience and you’ve found a deal, you could bring on someone who has experience in apartment buildings and give them some equity for their consulting.