BiggerPockets Real Estate Podcast

BiggerPockets Podcast 175: The Power of a Team to Build a Multifamily Real Estate Empire with Mike O’Connor and Matt Wood

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Building a real estate portfolio can be challenging — but taking others along for the ride can help everyone achieve incredible results. That’s the topic on today’s episode of the BiggerPockets Podcast, where we sit down with Mike O’Connor and Matt Wood, two young investors from the Atlanta area who have built a sizable portfolio (150+ units) in a very short time thanks to the power of a team. You’ll learn why they jumped straight from a single house to an apartment complex and the mindset and strategies needed to pull it off successfully. This highly entertaining show will have you taking notes — and laughing — ’til the very end!

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This Show Sponsored By

PATLive-LogoWe just wanted to give a shout out to our podcast sponsor on today’s show: PATLive. PATLive's team of superstar receptionists will always leave your customers delighted. Every agent goes through a rigorous training course before they can answer calls, and we've got quality assurance down to an art.

Learn more by visiting PATLive.com/biggerpockets!

Fire Round Sponsor

Wunder CapitalA huge thanks as well to our Fire Round sponsor Wunder.

Wunder Capital develops and manages solar investment funds by leveraging its national partnership network, tested processes, proprietary underwriting framework, and best-in-class online investment portal. Wunder actively manages everything, from the sourcing of commercial solar opportunities, to the underwriting, contracting, and construction of each project

Learn more by visiting WunderCapital.com.

In This Episode We Cover:

  • The backstory of Mike and Matt’s investing career
  • The cool story on how they started working together
  • The value of analyzing deals
  • “Aunt Jemima” as their first property
  • What Section 8 is and some of its benefits
  • Tips for bringing more people on the team
  • Why their first deal was important
  • How they find the right people for their team
  • How they scored a 32-unit as their second deal
  • How they went from 32 to 100 units through creative financing
  • Tips for having a job while investing
  • WhatsApp and why they use it
  • How they differentiate roles in their company
  • The importance of systemizing and automating to scale their business
  • The Unique Wide Oak Deal
  • Why you should build relationships with your local banks
  • Why confidence matters in this business
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “We want to be good landlords, we truly enjoy providing good living conditions to our tenants.” (Tweet This!)
  • “To know that there is something that we can control that is providing us income is huge.” (Tweet This!)
  • “I’d rather have a small percent of a deal than zero percent of the deal.” (Tweet This!)
  • “You have to be ready to pivot based on the deal because not every deal fits in the same box.” (Tweet This!)

Connect with Mike and Matt

Mike’s Photo (Ben Affleck?)

Mike-Black-and-White

 

Real strategies that work for real people seeking to build wealth through real estate investments. Co-hosted by Brandon Turner and David Greene, this podcast provides actionable advice from investors and other real estate professionals, who chat about failures, successes, motivations, and lessons learned.

    Jade
    Replied over 3 years ago
    Here are more great books to read that focus’ on self improvement and knowledge http://blog.homespotter.com/2016/05/18/25-best-books-real-estate-agents/.
    Cal C. investor from Peachtree Corners, Georgia
    Replied over 3 years ago
    Great to see those guys are doing so well. Curious as to why Kieran and Azeez weren’t on too? Realize it could get unwieldy with four, but they are integral team members also.
    Matt Wood investor from Atlanta, GA
    Replied over 3 years ago
    Cal, thanks for listening. Agree with you that Kiran and Azeez are integral team members – we thought about putting 4 on but that would’ve been tough. Maybe Kiran and Azeez could do a follow-up podcast at some point – they have plenty of nuggets to share…
    Mike O'Connor
    Replied over 3 years ago
    Absolutely agree – we would not be doing what we are doing without Azeez and Kiran. Doing 4 would have been very challenging, but we hope that we can get them on for another show! Thanks for listening!
    Joshua Keene from Mission Viejo, California
    Replied over 3 years ago
    Great show Mike and Matt! Your enthusiasm and passion for real estate investing shows through in this podcast. The team you have put together is sound, structured, and sets a good example for newbies looking to establish their own team of investors looking to close deals. One interesting thing that caught my attention was the fact that early on after making your first deal, you decided to step it up a notch and look into acquiring larger deals. Rather than sticking to single family homes and/or small multifamily properties, you step forward with the drive to learn and grow your business reaching out for bigger and better deals. Grant Cardone’s Bigger Pockets Podcast (Show 108) comes to mind as well as some of his business philosophies. Kudos to you guys! “If everyone is moving forward together, then success takes care of itself.” – Henry Ford
    Mike O'Connor
    Replied over 3 years ago
    Joshua – thanks for listening and for the kind words! The show was a lot of fun and Josh and Brandon do a great job really pulling it all together. Like we mentioned on the show, we very quickly realized with the amount of time we were putting into our SFR that we had the ability to scale by moving into multifamily. When you consolidate so many doors in one location, you save yourself a lot of time and money! We loved the Grant Cardone podcast and found it to be quite inspiring! Mike
    Mike Dymski investor from Greenville, SC
    Replied over 3 years ago
    Great show and congrats on the success. Go Dawgs!
    Mike O'Connor
    Replied over 3 years ago
    Thanks, Mike! Go Dawgs!
    Max
    Replied over 3 years ago
    Whatsapp is not free, it costs $1. Folks listen up, they make things sound very easy, your first 100 units will be the hardest, after that you will have a balance sheet, investors, knowledge and relationships that will help you jump to the next which ultimately your already somewhat scaled that it will be natural like putting on your pants in the morning. Deals are all over its your eyes that can make the deal work, meaning to be an opportunist is the most important thing in any deal.
    Matt Wood investor from Atlanta, GA
    Replied over 3 years ago
    Max – you’re right, a 100-unit deal is not easy. We mentioned on the podcast that we got hit with an unexpected property tax increase in year 1 as well as a dip in occupancy when we tried to change rents and utilities payments simultaneously for the tenants. Like everything else, it took time, effort and energy and a great team turn things around and make the property successful.
    Renato Falletti from São Paulo, São Paulo
    Replied over 3 years ago
    Hey Mike and Matt, what an inspirational show. Thanks for sharing your experience. Just like you guys I am still in my mid-twenties, so it’s very useful for me to see your course of action towards growing a business from scratch. Hope you guys keep it up! My question for you guys is the following: In a country with a 15% per year interest rate, what strategy do you think is the most appropriate to invest in real estate? If you wanted to get started in real estate investing, what would you tackle first? I live in Brazil, that’s why the question. Thank you!
    Mike O'Connor
    Replied over 3 years ago
    Renato – thanks for listening, I’m glad that you enjoyed the show. To be honest, this is not a situation that we have experienced before, so I am not sure that we are best fit to answer. If I were in your shoes, I would look for ways to avoid the high interest rates that lenders are offering. This would mean doing joint ventures for larger deals and trying to pay cash whenever possible. I am not familiar with the market in Brazil, but if you are able to knock out a few “lower-end” flips with all cash to accumulate more cash, you can then get into larger buy and hold deals. If the high interest rates lend themselves to better returns in other investment vehicles, it may make sense to go that route. Best of luck! Mike
    Renato Falletti from São Paulo, São Paulo
    Replied over 3 years ago
    Thanks for your answer Mike. Its incredible how interest rates can affect your capacity to leverage a real estate business. But I believe your approach is the correct one, going for smaller flip deals and than moving to some buy and hold. Cheers, Renato
    Mike O'Connor
    Replied over 3 years ago
    Best of luck!
    Keri Middaugh rental_property_investor from Ypsilanti, MI
    Replied over 3 years ago
    A question about approaching local banks for refinancing an investment property: Brandon, you mention a very organized binder with tabs. I love this idea! Can you tell us more details, such as what categories of information do the tabs represent? *What’s on the tabs? * Thank you to BP for being willing to share information so readily so newbie investors have the benefit of the collective experience!
    Mike O'Connor
    Replied over 3 years ago
    Keri, You likely will hear a variety of answers to this question depending on the deal, but I think that there are a few fundamentals that should always be present. – Details on your rent roll – this would show lease start/end dates, which units are occupied, rental rates, etc. – Financials – you would want to provide a P&L statement (last 6 or 12 months) to show how your asset is performing. If you are able to show very strong month over month growth on your revenues, and decreases in your expenses, showing a T12 (12 months of income and expenses broken out) would make sense. – Overview of you and/or your business entity – letting the bank know who you are, what your qualifications are, etc. is important for building the relationship / trust. – Pictures of the property – Overview of any improvements that you have done to the property (both financially and to the physical asset) – Your goals / objectives for the asset as well as an overview of why you are seeking the refinance Like I said – others may add / remove components based on the deal, but these, in my opinion, are what is important. Thanks, Mike
    Keri Middaugh rental_property_investor from Ypsilanti, MI
    Replied over 3 years ago
    Thank you! This goes a long way in pointing me in the right direction. Keri Ypsilanti, MI
    Mike O'Connor
    Replied over 3 years ago
    Happy to help – best of luck!
    Julie Marquez investor from Seattle, Washington
    Replied over 3 years ago
    I just finished listening to your show and thanks for sharing all your information. Kuddos for having full time jobs and a full time real estate investing career. What I love most about what you share is that what’s good for the tenant is what’s good for you. Way to see the person above the deal, I think sometimes we lose sight of the customer. You guys are doing great!
    Peter Galik lender from Houston, TX
    Replied almost 2 years ago
    Great show/podcast M&M. Thanks for sharing your successful stories. Have a good one and keep kicking’!