All Forum Posts by: Austin Fowler

Isn’t cohosting similar to property management where you do not own the underlying asset? Does your company own short-term rentals?

With what frequency do you see deals like this that will be worthy of acquiring? What fraction of the deals that you think would be worthy of acquiring do you actually acquire? What limits the expansion of your portfolio?

Hi V.G.,

> Scalability is easily and readily available for the vast majority, scalability is not the issue for most.

When it comes to scalability, I set the bar high. I want to be able to handle a very great deal of capital deployed in a lot of assets while basically on holiday. Using this perspective, to my eyes many people spend a great deal of time working real estate investing techniques that are not scalable. Passive multifamily is the most scalable technique I currently use, and I could use my exact due diligence process to easily handle $100M without changing how I operate. Just bigger checks into the deals I find.

> In my case, The issue for most is how limited their investment capitol is, the massive return expectations being sought, over an exceptionally short time-span.

So how about we focus on discussing how to solve capital limitations in a way that is doable by anyone?

> Many seeking parabolic, unrealistic, compounding returns. Which are not really returns, as so many are actually seeking full income replacement via the "investing".

I don’t work a W-2 anymore. My investing covers all of my expenses and was sufficient to add $2.5M to my net worth over the last 12 months. Full income replacement is definitely achievable.

> To boot, adding in the riders of things such as "passive", "low risk" and "certain"......

> To be fair Austin, you as a syndicator are hacking the scalability via syndication, O.P.M..

I don’t run syndications. I do invest in other people syndications. I have no desire to be a GP on a multifamily syndication with all of the responsibilities and duties that come with it.

> Most are not capable, willing or interested in raising O.P.M. to scale and thus a natural limiter of there investible capitol.

Here I disagree. I think most people just don’t know how to go about it. I have helped hundreds of people learn how to raise capital for their own investing. I have helped quite a number of people start their own SEC registered managed funds. And there is an awful lot you can do with a lot less than this. It’s knowledge that people need.

> Remove your LP capitol, you would not be at the size you are, correct?

Correct.

> No syndicator would. So it's not fair to pretend it's the deals that make scalability alone.

The multifamily deals I focus on are not mine, and from a return point of view are nothing off the charts, the general target is around 20% per annum. And no, it’s not the deal that gets you to huge scale, it is definitely learning how to raise capital. And that is something anyone can learn, and the only way to get to great wealth in a lifetime.

> It is possible but it is very rare, exceptional and non-ordinary for such.

Agreed it is not about the deal, it is about learning how to access capital efficiently. And that is a teachable skill.

> For the vast majority who are measuring their investible capitol in the tens of thousands, while balancing a FT career, a family, life in general, yes it is rare skills and talents to find, analyze and execute on profitable investments at any kind of regularized interval. And in those early steps, the outlay of capitol far outstrips the returns for years or decades limiting any reasonable expectation of scalability.

So you share the load. You don’t try to do all of the deal due diligence yourself. You do it in a group where some (even most) people can even passively ride on the due diligence of others. You don’t try to reinvent the wheel when it comes to learning how to raise capital, you leverage free tools that already exist.

> In my experience the primary focus for most is not on scalability but on certainty to achieve financial freedom. Which is often defined as a passive income about matching to current active income levels.

Financial freedom requires passive investments at scale. Speaking from experience.

> For most the only scalability that matters is how to get to their ends. I often see a correlation that this is meet for most between 20-40 SFR's.

I would argue that self managing so many single-family rentals is a burden. I’m in that range with managed rentals, and I would say that this is definitely not enough for the level of financial freedom I wish to have, even if they were all paid off, which they aren’t.

> For many, scaling beyond that is just added work, and no longer "freedom" as was the entire intent from start, financial freedom, not an occupation change.

Agreed, but to say the same thing a different way, there are more profitable and more passive investments than single-family long-term rentals.

Totally agree with a need for everyone to be obsessed with due diligence. For example, when I acquire an asset, it is a month+ long process involving hundreds of people doing group due diligence trying to find holes in the deal and learning more about it before anyone invests. It's an approach anyone can use. I disagree with the philosophy that there are some special people that use special techniques that are amazing and can't even be explained, and then a majority of average people that should stick with average techniques that don't scale. There are good investment techniques that anyone can use that are scalable. One example of such a technique is doing extensive group due diligence on passive multifamily. Another is simply cash or an index fund, neither of which chew up your time and scale arbitrarily. This thread is all about identifying scalable techniques that anyone can use. Or just interesting techniques that people have used at scale. Working together as a community to educate each other.

If the logical next step is to scale, what is your current plan to do so?

Hi Gregory, I currently own 32 long-term rentals and they are all managed by property managers but even then there are enough annoying tasks that I don't plan to increase the number of long-term rentals. From renewing rental licenses, to renewing insurance, to approving major repairs, to pulling the trigger on evicting someone, long-term rentals, while sometimes these and other tasks are handled hands off, in other cases the properties do demand some of your time even when you have a property manager. In my case, when it comes to investing larger amounts of money, it's all passive multi-family. Higher returns and more hands off if you know how to choose deals well.

Hi V.G., the goal is to encourage actual real estate experts, actual people that operate at this scale, to share techniques that work at this scale and help educate people to head in that direction as well. If you anyone wants to operate at this scale, they need to focus on learning techniques that work at this scale. When it comes to building wealth, you can waste decades of your life learning labor intensive techniques and building a portfolio that simply doesn't scale.

Okay, now you have a slightly less than 50% chance of having $20M assuming you could find a place that would take a single bet at this level. What would you do with $20M?

Hi Chris, is heavy apartment rehab an area you have worked in before? Would love to hear about some of your prior experience in this area.