The sun was just peaking over the mountains in an area typically packed with hikers called “Dreamy Draw”, a mecca of crisscrossing hiking trails in the center of Phoenix Arizona. Splitting these mountains, thousands of commuters made their daily southerly decent into the city along “The 51” highway, creating a slow inch worm like progressive movement of metal.
A simple grey Toyota Corolla void of distinguishing features blended with the pack, hugging the bumper of the car in front. A man in his mid thirties sat on the uncomfortable factory seats and flipped through radio stations searching for an escape. Finding nothing worthy of interest, he instead turned to his smartphone, where an Apple podcast with an interesting subject line caught his eye and he connected it to the car audio.
This story begins like any other, a man searching for meaning, adventure and purpose. Something larger than the familiar script handed down by masses. That man was me…
If you are wondering which podcast it was that started it all, I truly have a hard time remembering at this point but I know it was enough to captivate my interest with real estate. It was early 2018 and the day began like any other, yet something magical happened. An idea was presented, momentum already far underway, had built to inspiring action and I heeded the call.
Up to that point, I had very little interest in real estate or straying outside the familiarity of the W-2 job and “investing” into a 401k. I actually liked the daily script handed down by the societal norms. It was comforting and easy to follow with little risk. Yet starting in early 2018, as my firstborn son was soon to be born, I began listening to multiple podcasts on real estate investing as well as consuming book after book on the subject. The stories of others like me achieving financial freedom and quitting their day job, had me hooked on the idea of owning rental property.
One day I mentioned the subject to my brother mid 2018, who also had some exposure to the idea from a friend, and we decided to take action. At that time, there was little thought to building a business, let alone a community, blog or podcast. We were more interested in the freedom from work, traveling and early retirement.
We made a 90 day goal based on a challenge from an online real estate forum aka. BiggerPockets and the race had begun. At the time, Ashton, my brother, was living in Pinehurst, North Carolina and I was of course in Phoenix Arizona. I, having a career in IT, noticed that the giant distributor Amazon was looking to land their “Headquarters Two” in Raleigh, NC, and as it was within 3 hours drive from Ashton, we chose Raleigh/Durham as our market.
The First One You Always Remember
Our first property or properties rather, were two duplexes in East Durham. These were in truly poor condition, built in the 1940’s, and looking about ready to fall over. The floorboards groaned unevenly, doors were missing off hinges, shingles clung desperately to the roof and a smell hung in the interior which begged consideration.
According to the podcasts and books, this meant opportunity! So we committed to the goal and jumped in with both feet. Partnering with another investor, the duplexes were purchased in all-cash offer with little negotiation.
Four months later through setbacks, lingering renovation items and many budget requirement updates, the properties were listed for rent. We had done it! Our first rental property and the start to our journey was complete.
A Company is Born
It was around this time, Valkere Investment Group was created. It was quickly understood that business LLC's were needed going forward for organization and liability protection. Our ventures needed a brand and business identity. We played upon the idea of the Valkyrie, the winged female protector in Norse mythology, who rescued those fallen in battle and helped them to reach Valhalla, the majestic hall of Asgard in the afterlife.
We found alignment in this idea of rescue, with our already offered investment opportunities and educational networking efforts, as we helped other people to reach financial freedom. The word “Valkere” is actually an anagram of our family name “Levarek” and fit quite well with the theme. The logo, created by a talented artistic friend, was thus built to represent the wings of the female Valkyrie warrior.
Having tested the theory of buying our first rental property and with some confidence in our newfound abilities, we wasted no time on our journey. In fact, we purchased another two duplexes in the same area only two months later upon completing our first project. We partnered with other investors to fund the private capital needed for an all-cash buy on these two new acquisitions, renovated the properties and rented them out in short time.
Jamie, my wife, and Ashton’s wife, Vivian, soon joined the team to provide much needed roles in the finance, legal and ongoing asset management. Having their assistance meant, @Ashton Levarek and I could focus now on building the company, acquisitions and long term vision.
The Accumulation Phase
No sooner had we completed the lately purchased duplexes, we were onto the next deal. We were able to pull out the investor equity in the duplexes using the BRRRR method, something which helped us to quickly follow up with an offer on a 5 unit apartment in Burlington, NC. This 5 unit was the start to our larger multifamily investments as we again partnered with other investors to bring it under contract in the late summer of 2019. Yet, immediately on closing, three air condition units were completely stolen stopping the project before it even started!
Having already put some great checklists in place, one being “always have insurance at closing”, we were able to replace these with brand new units. Let it always be said, investing in real estate holds many lessons along the journey.
We then closed a 13 unit apartment complex in Fayetteville, NC, only 2 months later in early autumn of 2019. Looking back at our breakneck speed of acquisitions, it seems we knew momentum was on our side and the wind at our back. It was a snowball that had turned into an avalanche. Our ability to scale was almost entirely due to the strength of partnerships. Great team members and partners meant funding deals completely, managing them effectively and executing upon the business plan or projections. Partnerships were essential.
Our first official real estate syndication was a 16 unit in Fayetteville, NC which we closed in January of 2020. It was the first deal based on the thesis behind our company vision of providing investment opportunities to large groups of investors in the commercial space. Up to that point, our investments had typically only had 1-2 investors in each deal and we needed to explore this new model to grow.
The 16 unit apartment complex involved almost 15 investors investing in the deal and as such, was built as a 504 Regulation D, as governed by the SEC. This was the big leagues where an SEC attorney was crucial for building our investment opportunity and with this investment, we(the big fish) left our pond, already too small, and entered much larger waters.
Our little Valkere team was growing as well. We expanded and brought on an executive assistant, marketing admin and asset management assistant to assist in the growth of the portfolio.
Growing with Partners
Through our networking events and company growth, we met another company, similar to ours, yet with already a few more years behind them. Seeing strength in numbers, we partnered together to take down a 220 unit and 84 unit in Columbus, Ohio. My brother and I flew out to Columbus, walked the property and met up with the other members involved on the project. To be honest, I was in disbelief how we could work to make these deals happen but with conviction in our newfound alliance and growing business, we set out to get it done.
Ultimately, the 220 unit fell through after 7 months of working on the deal. This was a tough blow to the team, after all the time and capital spent on this large acquisition. As it were, one of the teams on the previous 220 unit project brought a new deal to our attention, a 120 unit apartment complex in Dallas-Fort Worth.
As the 220 unit was falling through, our new partnership group focused efforts on closing the 84 unit in Columbus but also shifting over investor capital from the 220 unit to the new 120 unit in Dallas Fort Worth. The communication efforts needed to make this happen were amazingly well handled by the teams and the so called “life and shift” completed with little issue.
It was thus, we closed the 84 unit deal early winter of 2020 and the 120 unit in Texas shortly thereafter.
Both deals were completed using a 506b Regulation D offering and the team was now managing 3 full syndication offerings, in addition to the small multifamily portfolio. We were committed to the vision for these projects and developed systems/processes for updating investors, sending distributions and working with asset management teams. The thesis was proven, the company was expanding and our community network was building like never before.
Just recently, as of July 2021, our partnership alliance has closed a beautiful 384 unit apartment complex in sunny Daytona, Florida. This amazing looking B+ asset was a massive undertaking by all the teams involved. It represented an investment of private capital near 11.4 million dollars as well as many partners working together to close successfully.
It's been wonderful journey thus far, and I often reflect on all those who’ve helped along the path. As it were, I stumbled upon an older post I wrote sharing the journey a few years ago, albeit a much earlier version. I hope to put another post in a few years with much more to tell in hopes of paying it forward on this forum through the telling. Until then, Happy Investing!
Great post @Chris Levarek ! Love your journey starting from Durham, NC and expanding into other markets within NC, then going BIG @ national! Just like there's a snowballing method to paying down debt - there's the snowball method to scale your investments as well :)
Awesome share, Chris. Congrats on the success, clearly because of your and your team's persistence. So now you have three syndicated deals, one each per market, in three distant and distinct markets, right? Any concerns about being spread thin or not going deep within a single market to fully extract the value from a deal?
@Chris Levarek , thank you for breaking down your journey. I was actually looking at your 13-unit in CoStart the other day. Are you still working your W2 job, or have you made the jump to real estate full time? Again, great story, thanks for sharing.
@Chris Levarek Congrats and thanks for sharing, all the way down to the name of the company! It sounds like you are really passionate about your real estate journey and so cool you could partner and bring people in along with you to even more success. Did you find it easy to raise enough money for each deal?
@Peter K. Thank you. It definitely was a snowball effect.
@Brad Shepherd We are active in four at present, in four separate markets. I do think you raise a valid point. In each case however, we chose to rely on partners in key roles in those markets and establish the partnerships. We give up a portion of control which is possibly more risk yet lessen risk by gaining diversity across markets. I think there is power in both strategies however. Each market(Columbus, Fayetteville, DFW and Daytona) however is at present favorable for the foreseeable lifetime of these specific deals.
@Don-Carlos Moniz Oh interesting! Coming around on three years on that one, we'll see where it goes. It has been productive thus far, minus a few snags with the moratorium. I am indeed still working the W-2. However, it's definitely getting close to being that time.
@Julie Marquez Each deal has taught something on the subject of raising capital. Our process and brand has developed with each deal. We've improved systems and added automations where possible. Each deal we improve, our brand grows and credibility increases. So I would say it gets easier as relationships bear fruit over the years and the systems created improve the process for all involved.
The most valuable advice to anyone raising capital is however to see the benefit to all through the partnership. Raising capital is just as necessary as investing passively. Both complement each other and partnerships depend on passive investors as well as managing partners do on passive investors. Conversations are much easier to have with this mindset versus a lack of or sales mentality.
Thanks for sharing. On your 16 unit deal, did you consider your attorney fees an investment? Paying $10-15k to raise (less than?) a million bucks seems like overkill.
And props to the momentum, its a real thing!
Hi Chris! Thanks for sharing your story. As a new investor, I am looking to make the jump on my first property, and stories like yours give me the confidence that I am on the right path towards my dream of financial freedom.
What advice would you give to someone just starting out?
@Chris Levarek awesome post and details on your journey! It helps keep me inspired and persevere knowing that very successful peers & mentors like yourself are hitting very big hurdles, but overcome them and see the light at the end of each tunnel. Because of your trials and success, and your telling of them, I was able to get the courage needed to begin looking into real estate and now starting my own journey. Thanks for your inspiration, example, and mentorship! Rock on!
Great post, thanks for sharing! Your story captures the essence of what Napoleon Hill talks about in Think and Grow Rich. You were READY when you heard the podcast and then took ACTION. Congrats!
@Chris Levarek congratulations. It seems like there a few inflection points in your story - what was it like jumping from the 5 to the 13? That seems like a big one to me (although I realize you then went to an 84!)
@Ronald Rohde Great point! That's a common idea that syndication only applies to big deals. I'd say there's some truth here, but I would say the value in syndicating a small deal to further growth or validate an idea, can make it worth it. So for a new syndicator to run a 1 million dollar deal with a lower managing partner profit, in order to learn or lower risk exposure, this could be a great method to further growth in a specific direction.
In addition, The number that makes sense is what makes sense to the team as well. If the managing team is comfortable with the return, then $15k is just an expense.
@Bill Conlan Already starting that momentum by taking the first step towards the goal!
I always recommend the following basic steps :
- Educate(podcasts, books, internet) to find a strategy you align with or that aligns with your life.
- Find someone who has done it.
- Copy them and Create a goal with a timeline for execution.
- Take Action.
- Learn from Mistakes.
- Create systems to avoid those mistakes on the next one.
- Rinse and Repeat.
Remember, and this is coming from a very logical/analyst type (me), you can't get it wrong. You can not get it wrong. You can only improve and learn if you take action. Yet if you never take action, you will never know.
Looking forward to hearing about your success!
@Nicholas L. The renovations planning to go from a 5 unit to a 13 unit was drastically different. We undershot the budget by a bit if I'm going to be honest. We also hired a property management team which made the first year require heavy weekly management and review on our part(ultimately ended their contract after a year)
What I've found though, is a 5 unit team is very similar to a 13 unit team needed and often the same level of professionalism. Once you move up to 50+, the experts, contractors and property management teams typically have well rounded processes and the overall execution of the business plan gets easier. Just my experience though!
@Chris Levarek hey Chris, thank you so much for sharing your story! It’s so inspirational to hear, especially since your path is similar to where I want to hear (small multi family then go into large multi family once I have the “proof of concept” in my mind.)
Do you have any advice for someone who’s a bit intimidated about raising the funds necessary to get into large multi family?
@Chris Levarek - Wow! Great post! Thank you so much for taking the time to share your journey with us! I love reading success stories like yours! They are both inspiring and a reminder that even though everything doesn't always go as expected that is also a learning tool for future success.
I also love all the ways you incorporated partners and partnerships - even including your spouses (My wife and I often joke that there real needs to be a support group for spouses who work together!)
Keep up the great work!
@Dominick Galinis Raising capital is about relationship and credibility. Most start with friends and family because the relationship piece is already there. These people know, like and trust you already so you can work on the credibility piece easily enough. Feeling nervous about raising capital is normal, and a good thing. You should feel nervous about being the guardian of people's hard earned capital.
My advice, know your strategy and market. Feel so confident in it that you too would invest into if someone came up to you with a plan like it. Start with friends and family. Build(or join) a thought leadership platform, like a website, blog, forum, podcast, meetup group, etc to spread your knowledge and grow your network. This builds credibility and grows the network. Then simply work on delivering your idea by delivering your idea over and over.
It will feel awkward at first. If you want to get good at something however, you must do it in repetition. Habits are simply actions you continue to take and thoughts you continue to think. Change the thought or action and build a new habit on raising capital.
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