Making Money in Multifamily Real Estate Show

163 | Managing Apartments Across Multiple States Effectively with Michael Roeder

November 03, 2021 Dave Morgia Season 1
Making Money in Multifamily Real Estate Show
163 | Managing Apartments Across Multiple States Effectively with Michael Roeder
Show Notes Transcript Chapter Markers

Michael's Background:

  • Michael was a high-net-worth insurance producer for about a decade, really at the top of his game there for a fortune 500 company. He transitioned to multifamily after dabbling into single family real estate, in 2015. He is a GP in over 1400 units and that's $74 million worth of assets, and that's across five states, Texas, Minnesota, Wisconsin, Alabama, New Mexico, and that's all through his group, the Granite Towers Equity Group. He is a co-founder of that group, the PE firm there. And just a couple more things about Michael. He is the co-host of the 'Keeping It Real Estate Show', which I love that name by the way, and the author of the Four Steps To Successful Passive Investing.

In this episode we cover:

  •  04:02 - Operating/owning across multiple states
  •  07:08 - Sizing up a PM group to fit your needs
  •  10:47 - Divorcing a PM
  •  14:07 - Homerun boots on the ground teams
  •  20:57 - Remote calls on property performance
  •  23:08 - Favorite KPIs to track a property's performance
  •  29:12 - 5KQ1 - If you could only pick one trait that explains your success, what is that trait and why?
  •  29:43 - 5KQ2 - What is the most uncharacteristic thing you've done in your business and why did you do it?
  •  30:29 - 5KQ3 - Can you name any time where you felt like you were not going to end up successful? How did you overcome that fear?
  •  31:31 - 5KQ4 - Can you name a time where something in your business went perfectly and what did you do to make that a reality?
  •  32:46 - 5KQ5 - What have you been focusing on lately to improve yourself or your business?

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*****Thank you so much for listening to the Making Money in Multifamily Real Estate Show! This show covers everything to do with Multifamily Real Estate Investing to help you, the listener, become an expert in your real estate ventures. The host, Dave Morgia, brings on guests who are already experts in their respective fields to discuss what principles and practices they follow that have helped them achieve their success so far.

Dave Morgia: Hello, listener and welcome to the show. I am your host, Dave Morgia. And with me today is Michael Roeder. Michael, welcome to the show. 

Michael Roeder: Thanks so much for having me on Dave. I really appreciate it. 

Dave Morgia: Yeah, it should be a great one, and I just wanted to give the listener a little bit of your background before we dig in. Michael was a high-net-worth insurance producer for about a decade, really at the top of his game there for a fortune 500 company. He transitioned to multifamily after dabbling into single family real estate, in 2015. He is a GP in over 1400 units and that's $74 million worth of assets, and that's across five states, Texas, Minnesota, Wisconsin, Alabama, New Mexico, and that's all through his group, the granite towers equity group. He is a co-founder of that group, the PE firm there. And just a couple more things about Michael. He is the co-host of the 'Keeping It Real Estate show', which I love that name by the way, and the author of the four steps to successful passive investing. And I told him I was going to pick this one, but the last little tidbit here is he is an extreme sports enthusiast. So, let's just start there Michael, what does that mean to you? And we'll kind of dig into your background after that. 

Michael Roeder: Yeah, thanks for the intro, Dave. I really appreciate it. You know, extreme sports have been a part of my life. I mean, ever since I was about 10 years old, grew up snowboarding a lot, you know, Minnesota, it gets very cold in the winter. So, you got to find something to do outside to get you out of the house. And so, a lot of snowboarding, that's actually how I met my now business partner. He was a professional snowboarder for about 13 years and you know, we get outside, we do a lot of surfing, out on the lakes, lake surfing, lake boarding, snowboarding, all that fun stuff. It is enjoyable for us. 

Dave Morgia: No, that's awesome, man. And, obviously having a partner that you can not only get along with professionally, but then have that kind of background on the side, it's a huge thing, so, I'm sure you guys are just having a ton of fun pretty much 24/7. So, it sounds like a great little partnership there. 

Michael Roeder: Yeah, we really do. And you know, very fortunate to have known him since I was about 15 years old and you know, so we knew the ins and outs of each of our personalities and our strengths and weaknesses and yeah, I mean, you know, last winter we got taken out to Crested Butte by some brokers and loan brokers and, you know, got to forge some really nice relationships with those guys all while having a ton of fun. So, yeah, it's been great. 

Dave Morgia: You guys have a history. Yeah. You don't hear too many groups that, I guess we're getting along that young or had met each other that young and stuck together. So, that's interesting. It's almost a kind of rich dad, poor dad vibes with the, you know, the childhood friendship there. But maybe we'll just skip to kind of how you guys are looking today. So, you just want to give us background on your group here and what you guys are kind of getting into these days. 

Michael Roeder: Yeah, definitely. So, you know, like you had mentioned earlier, I started out in the single-family space and quickly moved over to multifamily. I mean, my original goal was to accumulate a hundred single family homes. And, you know, that was a pretty hefty goal in the single-family space, takes a lot of time and effort, and I figured that out pretty quick. Moved over to multifamily in 2015, bought a couple of deals on my own, well, I shouldn't say my own, with my business partner and one other gentleman. And then we started syndicating projects. So, raising capital from passive investors back in 2016, formed Granite Towers Equity Group, which is, you know, the company that we do all our deals through now. And you know, now we're just focused on growth markets like, Dallas Fort Worth, Phoenix, Houston, you know, Nashville, areas where there's a lot of people in a lot of jobs coming into the areas and we're buying BNC class assets. So, assets where we can come in, we can stick $5 to $15,000 per door in, boost the value up and get a really solid return for ourselves and our investors. 

Dave Morgia: So, I was going to preface if it was five states you're investing in, but now it sounds like you're also looking at Arizona. So, you know, further expanding your kind of, your scope here. It's kind of what we decided we might start picking at. So, we'll see where it takes us, but how do you kind of accomplish getting across to all these different states and obviously there's completely different metrics and all these things you look at. So, how does it kind of start for you guys?

Michael Roeder: Yeah. It can be a tricky water to navigate, when you're, you know, asset managing and multiple different states, but if you set it up correctly and you have the right systems and the right team members, you can really be extremely successful at it. And you know, it can afford more opportunities for you to take a look at. You know, a couple of tips that we utilize, you know, first off team is everything. So, if we go into a new market and we can't find a solid management team, that we can get referrals from investors that we know, you know, then we're, we're probably not going to dive into that market. Like we're buying a deal in Nashville, Tennessee right now, luckily our management company manages about 700 units there right now. So, we're comfortable getting into that market, utilizing a management company that we've already used on multiple different assets and they've been extremely successful and great to work with. 

So, that makes us a little bit more comfortable with the market. You know, another thing that we do is we bring boots on the ground on all of our deals that are out of state. So, like the deal in Nashville, we have a couple of different groups, you know, someone that's signing on the loan with us, as well as, just an investor that we know really well, they're going to be there if we need them. So, say we can't get in, you know, every single month to take a look at our capital expenditure projects that we're putting into place, and we need to make sure that someone goes in and checks in on the contractors and how the property is looking, we can just give them a quick call, have him run out to the property, and we have those editors at our disposal.  

Dave Morgia: And I think to me, you nailed it. It's kind of two pronged, if you're going to kind of venture out remotely, let alone one state, but multiple it's the PM group that you trust and then the boots on the ground within your own team. I just want to hit at PM group first. You mentioned the one you were looking at had 700 units under management. What is your take on what's a good amount to have versus maybe too large of a company that might not give you attention? Where do you guys fall in? You know, what's a good size group for what you guys are trying to acquire?

Michael Roeder: That's a great question. I think it depends on the market. You know, we have multiple different management companies that we use and, you know, one of our management companies, they manage about 1000 units. One of our management companies that we utilize, they manage about 25,000. So, you know, I think the smaller firms, you know, can be beneficial in certain avenues. Like you're probably going to get a little bit more attention. They might communicate a little bit quicker, whereas the bigger firms, you know, they might have economies of scale or they have a more, you know, progressive software system or training program for their employees. So, I think as long as someone manages, you know, maybe in that seven to 800 plus unit range, we may feel comfortable with them, but, you know, I would say ideally if the management company can have at least a couple thousand units, that's ideal. 

Dave Morgia: So, you mentioned 25K, obviously on the huge scale of things. To me, that's what I'm not comfortable with. That's, you know, too big to fail, but you have to have conversations with that group and see how kind of delineated they are, you know, how low and how kind of fine-tuned do they get at the local level. So, if you were to say, walk into talking to a group with that many doors on our management, what would put you at ease walking out of that conversation to say, these guys can handle my property and give it the proper attention? 

Michael Roeder: Yup. So, I think first and foremost, you want to know who the regional is, that's going to be overseeing your project. So, make sure that you physically talk to them or physically meet them, because that's crucial. That's going to be one of the most important pieces. You know, if you're talking to one of the higher up managers, maybe the CEO or what have you, they might be able to pitch you and sell you, but you know, they're not going to be the person that's overseeing the onsite team at the property level. So, definitely pay close attention to that. I would also say, make sure to take a look at, uh, other properties that they currently manage. So, drive past them, you know, give those other property owners a call and see how it's been working with that management company. That's going to tell you a lot.  

Dave Morgia: Yeah. And I guess maybe we'll just flip that going. You mentioned may be getting comfortable with a group to 700 to 1000 doors. How do they then convince you that they have the systems in place? Because to me it's at that point systems more than anything they might be kind of just doing, not really running the business, just like owning the business. If that makes sense. I might be saying that backwards, but what convinces you at that point that they're doing the correct things there? 

Michael Roeder: So, I would say the biggest thing at that level, would be getting references from other investors that, you know, um, like we just hired on a management company in Texas where they manage just over 2000 units. So, it's still a pretty small shop, but we have heard nothing but raving reviews from other investors. So, we feel comfortable at them. You know, if that wasn't the case, if I couldn't find a referral and there was a larger management company out there, you know, I would probably stay away. 

Dave Morgia: And as far as those reviews go, what was the differentiator? Just kind of going above and beyond service wise or the communication or where was really the kind of exceptional difference there? 

Michael Roeder: Yep. So, I think communication is number one. You know, you want to make sure that they're getting back to their investors very quickly and that they're doing what they're saying, they're going to do. You know, we've had to fire a management company a while back and it was due to lack of getting things done that we said needed to get done. You know, you tell them something and you know, a week or two later, it still hasn't been done and no one is held accountable for it. So, you know, just making sure that, you know, the value-add programs or, items are getting implemented properly, that they're timely, that they have good contractor relationships. And that can be an issue with these smaller companies. You know, maybe they have a contractor that they work with, but that contractor is overloaded and they don't know who else to go with. 

Whereas, a lot of these larger management companies, they have multiple different avenues, multiple different contractors that they can utilize. So, that can really help you out, especially if you have a very large, value add project. Systems, you know, accounting is huge for us. So, we want to make sure that the management company has a good solid accounting department or accountant on their team, because nothing's worse than getting, you know, the property, monthly financials each month and everything is in disarray and you have to go back and spend hours and hours trying to figure everything out. So, make sure you pay close attention to that as well. 

Dave Morgia: And we don't need to get, I guess, too detailed, but you mentioned firing a PM company. I always like to kind of hear people's approaches to that cause it's never fun, right? You're basically divorcing. So, what did you do to try to resolve it before it got to the point of firing? Because obviously that's the last option, is to fire the group and move on to someone else. It's a lot of headaches. What was the kind of steps you took on your side to maybe repair things and how did it just kind of unfold from there? 

Michael Roeder: Yeah, so, we noticed right away that, you know, things weren't getting done as quickly as they should be. And what had happened is, this management company was bought out by a much larger firm, essentially right as we were going into it and hiring them. And so, you know, you just had kind of some disarray, you had, certain employees that left the company or were let go, systems were kind of merging, and so, that made it really tough and we tried to solve it. You know, we brought it up to the regional, we brought it up to the senior vice president. We even talked to one of the CEOs or the former owner of the company that was still involved and told them the issues that we were having and that they needed to get resolved, otherwise, we might be jumping ship and we gave it a couple of months and truthfully, I wish we would've switched a little bit sooner, but we wanted to try to make it work because like you said, it can be a big, big hassle switching management companies, especially on a larger deal. 

But in the end, the issues just kept arising and there was really no progress made in making the systems better, making the communication better. So, we decided to jump ship.

Dave Morgia: And then getting, I don't know how verse you're going to be in this question, so, I'll take some patience on this one, but getting more, I guess, kind of language-based and contractual into these things. Is there a language you put in there going into getting in partnership with a PM company, obviously to foresee these types of events and did you change it at all over, you know, a fire or two over the course of your experience based on kind of what you've experienced and how to protect yourselves further?

Michael Roeder: You know, luckily enough, we had language in our PM contract and this was advised from our legal firm way back when, that we could get out of the contract with the 30-day notice. A lot of these management companies they'll say, 'Hey, you know, you're locked in for six months or you're locked in for a year, and if you exit this agreement, then you have to pay us whatever, you know, commissions or dues that you owed to us, for the next 12 months of us managing'. So, make sure that you have an out, if you need it. You don't want to go into a legal battle, if possible. So, that that's very, very important. 

Dave Morgia: I just wanted to ask, I'm sure a 30-day clause is obviously great because, I've heard stories before where you get into these battles, where it's do you pull the trigger early and pay these guys or do you just tough it out for a few more months? And you know, it's kind of a lose, lose situation. You're making a very tough call either way, and it's just not a scenario we want to be in generally. So, be careful for that, for sure. Yeah.

Michael Roeder: Exactly. And then all these management company agreements, you know, they typically have an outwear, you know, if they're not performing, you know, in doing their job, you can get out, but that's a gray area. So, you know, if you're relying on that, you could have to go into a legal battle and obviously no one wants that. 

Dave Morgia: Yeah, exactly. Like, did you guys even line up the metrics to determine, pass or fail? And if you didn't, then it's just an argument, 'he said, she said', so, it could totally be, just a mess that you don't want to be involved in.

Michael Roeder: Exactly. A hundred percent. 

Dave Morgia: Maybe we'll pivot into something more fun. I mentioned earlier, well you mentioned, I guess, the kind of two things that, strengthen your markets for you, but the boots on the ground was the second one. So, what have you done to just had those home run partnerships in the new states as you kind of expand your scope of, of where you guys invest?

Michael Roeder: Yeah. Great question. And, you know, boots on the ground. So, typically Dan and I will be flying into the market, you know, at least once a month, sometimes even a larger amount per month, especially when we first take over on an asset. So, we almost feel like we're partially boots on the ground, even if we're, you know, owning out of state, but we always want to make sure that we have someone in the local market that we can call and get over to the property as soon as possible. And you know, if that person is a newer investor, we train them up. So, when they go out to the property, you know, we might jump on FaceTime and, you know, walk them through what questions to ask the current manager or the onsite manager, what to look for, you know, what should be done, what we've asked the company to be done over the past few weeks. And then afterwards we'll have them send over photos of the property, their notes, and we'll kind of go through in detail, you know, what they might have missed, what we liked, what they did. So, just making sure that you coach someone that's a newer investor. If you decide a new investor is going to be boots on the ground.

Dave Morgia: You mentioned new investors, so, is this person that's more local because, like you say, you guys can be relatively local, but again, you're not based out of there, so, it's tougher. Is that usually some type of joint venture or co GP partner, or is it someone, you know, internal to your team? How do you usually find those partners? 

Michael Roeder: Great question. So, we've done it many different ways. We've done it where we have, you know, a co GP, be a partner on the deal. So, they have vested interest in the deal, you know, their asset managing with us. They're likely more experienced. We've also done it where, you know, it's an uncompensated position where someone just wants to learn the ropes, and so we train them up, you know, we tell them exactly what to look for. And so, we've done it that way as well. Also, if you have KPIs, Key Principles signing on the loan, we currently have that in Nashville and we have a gentleman that lives there. So, he's more than happy to jump in and help out as well. 

Dave Morgia: And depending on the KP, a lot of times they have plenty of time to be able to, especially if they're responsible for the loan, they're going to definitely spend some time and make sure things are getting done correctly. So, it's a big favor there to have that involvement if you have the kind of local lineup set up. So, yeah, that's a really powerful one for sure. 

Michael Roeder: Exactly.

Dave Morgia: And then I guess more into the, what you call it, a person who's trying to learn and maybe newer to the game that you're coaching up to basically be a new partner with. It sounds like it's more of an acquisition’s role at that point, but do they kind of mold into an asset management role as you guys grow through the property? How does it kind of usually shake out? I'm sure every deal is different, but how does it kind of shake out for you guys?

Michael Roeder: Yeah, that's a good question. The way that we've done it previously is, if we break into a new market and say, we do need boots on the ground and we bring on, you know, someone that's a newer investor wanting to learn the ropes, it's not typically going to be someone that we're going to hire full-time, through our company. It's more so someone looking to get into that GP role. They're probably going to do their own deal eventually. So, it's just kind of, it's almost like an internship I would say. Works really well. 

Dave Morgia: So, probably they like get in on the am calls and the weekly calls and the PM calls, but not necessarily leading those calls, I guess.

Michael Roeder: That's exactly right. You got it. Yep. 

Dave Morgia: And then, I don't know how many you've done in that regard, but what are some takeaways that you found from that process, whether you learned a thing or two that you haven't and what are some things that, obviously they're learning a bunch, but what are some of the more surprising things that some people you've worked with, have got to learn over the course of that relationship? 

Michael Roeder: Yeah, I would say on our side, you know, trainings, everything. The more time that you spend with them, you know, the more you're going to get out of it. And, we've noticed that with, employees that we hire on virtual assistants, you name it, the more time that you stick into and, you know, a great way to train people up is through videos. You know, if you can do a zoom video or some sort of video and upload it, they can reference back to it, which is phenomenal. So, I think that's one takeaway for us. As far as a takeaway from, the newer investor side, when they're helping us out with boots on the ground, I think a lot of people are surprised at how often you need to go to the property and how many details are involved. So, I think it opens up a lot of people's eyes as to, what all needs to be done when you're an asset manager. Because there's a lot of work that needs to be done. And a lot of people think that you, you know, buying an apartment complex and the management company kind of handles most of the third-party management labor line and it's done. Exactly. And that's, that's not the case. It's very time intensive.

Dave Morgia: So, let's pick at that for a second. Obviously goes without saying, COVID has changed the landscape, how people communicate. When the project is hot, when you had just recently acquired something, typically involves more on-site presence, but as things settled down nowadays, are you finding ways to kind of pull back on the onsite presence, whether it's that local person or you guys yourselves by kind of leveraging, uh, zoom, all these other technologies? How are you kind of transitioning and utilizing everything that was basically, you know, there's a lot of downsides obviously, but a couple upsides here with, being able to try some new things out. So, what are you guys using?

Michael Roeder: Definitely. So, we do tear down the amount of time that we spend at the property level as we go through the ownership cycle. So, I would say the first year is very time-intensive, you know, you have all your cap ex projects in place, you're trying to stabilize the property potentially. After the first 12 months, you know, if the property is performing really well, we'll typically just do, the weekly management call and then we'll go out and take a look at the asset, maybe every, you know, one or two months or so. We do use zoom. So, we've implemented that over the last year where our weekly management calls with all of our management team members, were on a zoom call, we're sharing a screen, you know, we're taking a look at our asset management, spreadsheet master, which goes through, you know, our KPIs, um, income collections, you know, our weekly questions, lease trade outs, you name it. 

Michael Roeder: And so, that's been very helpful is just to have everyone on the call, you can see their faces, you can non-verbally communicate. And another thing that we've done too, over the last year and a half, two years since COVID hit is, we've put cameras on quite a few of our properties where they link right up to our cell phone. So that way, if we can't get out to the property, we can still take a look at, you know, 15, 20 cameras on the property and say, 'Hey, property manager, this dumpster is overflowing. Please get that taken care of tomorrow. So, it looks good for, new prospective tenants and the current tenants. So, that's been really helpful as well. 

Dave Morgia: I'm always curious to hear people's approach. You hear a lot of people starting to do the remote leasing, all these things to kind of, obviously you're not leasing yourself as the asset manager, but that's helping the PM side of things. So, just like to hear people's takes on how they kind of handle it. I think the biggest thing really, like you said, is any meeting that probably could be done remote, and then with a follow-up, instead of doing it in person is probably the move because you can save all that travel time just for a single meeting, which you know, is not very, prohibitive of spending time all the time, unless you're local. But you know, when you're not, it's, it's pretty tough. 

Michael Roeder: Exactly. You know, that's key. And, we went to bi-weekly calls on some of our properties that are performing exceptionally well, but there's a lot that can happen in a couple of weeks. So, I would definitely recommend a weekly call if you can do it. 

Dave Morgia: Yeah. And then I guess maybe if you do like a bi-weekly because you're getting comfortable, would you do like a check-in with maybe just the regional or the PM kind of on the side for a quick 15 or something like that, just to kind of put your mind at ease? How do you usually do that?

Michael Roeder: Yeah. Typically, if we do a bi-weekly call, you know, it'll be on zoom and then on the weeks where we do not have the call, we'll still have them send over the reports and answer our questions. So, that way we can take a look and just make sure that we are keeping track of what's going on at the property level. 

Dave Morgia: Yeah. And I got to ask, but you mentioned that master file, so, can we just pick at that for a minute? Is that through Excel, through some program? Just a little bit more detail would be amazing

Michael Roeder: Great question. So, it is just a spreadsheet that we've developed over the last five years, and we've spent a lot of time and energy on it. There's about bout 10 different tabs. So, we're tracking cap ex interior and exterior, we're tracking lease trade outs so, when an actual lease comes up for renewal or there's a new lease, you know, we see what the old lease was, we see what the new lease was, what the difference has been in between the two, and we want to make sure that we're hitting our proforma numbers. And then there's, a KPI tab, where we're tracking a bunch of key performance indicators, things like occupancy and bad debt and lease renewals. And I mean, there's just so many different KPIs that are really, really important to pay attention to. So, that's kind of our bread-and-butter right there is just making sure that we pay close attention to that master spreadsheet that we created.  

Dave Morgia: And I guess my question will be, what is your favorite KPI with the caveat that it's not one of the kind of the main ones? Like occupancy or, you know, nominal rents or something like that, you know, kind of just like you're for whatever reason you're partial to.

Michael Roeder: Yep. So, I love lease trade-outs, you know, I think that's huge. I love renewals. So, what percentage of the leases you're renewing, because that tells a big story right there. You know, if you have a 30% lease renewal, probably something going wrong at the property, maybe the management team isn't doing their job or maybe the property is in disarray or it doesn't look nice. So, I love that. I also like our collections. So, straight to the bank and we have it, tracked every single day so we can see, you know, the graph and how it trends compared to different months. So, I love that too. So, I can't say a specific one, but all of those. And then during COVID, you know, rental assistance, that's very important to keep track of, you know, how much rental assistance has been applied for? What's been received? So, if you can keep a close eye on that, you can kind of gauge on what you have coming to you in the near future and what amount of that bad debt you think you can actually collect. 

Dave Morgia: And obviously that's a unique one for, you know, the times that we're eventually going to be phasing out of, but definitely one to kind of show the strength of your renter population and your property. I'm sure it's given some investors who have had fewer performing properties, second guess who they had leasing their units. But you have to keep track of where that money's coming from, not just that you're receiving it, is obviously pretty important.  

Michael, is there any other thing, I guess, as far as we kind of nailed into the nitty-gritty on, what you get into weekly and really just the relationships that you kind of do, to build out those processes. Is there anything that's kind of, I guess, given you an advantage to be able to spread out across multiple states and do the things that you've been doing lately? I mean, we talked right before the show, seven assets, either closing or opening in total, I think it was five close closing, two you're about to buy so, amazing stuff you have going on. So, what is it that's kind of been moving you guys forward at such a great rate? 

Michael Roeder: Yes, I would say over the last year and a half, we've really focused on building out our team, in order to continuously do, you know, four to six deals a year, which is typically what we've done over the last few years and what we plan on doing, going forward. You know, you have to have the right team because, you get to that certain pivotal moment where you don't have enough time in the day, to asset manage and to keep acquiring deals. So, we hired on a full-time CFO, who oversees our financials, takes care of our investor relations, you name it, he's kind of Jack of all trades and that's helped out substantially. You know, we have a full-time assistant, we have a part-time real estate analyst. And for us, it's just really been building out our team and making sure that we bring on people before we think we really need them, because if you wait and wait and wait until you absolutely need that team member, then it gets hard to train them properly and to get the systems in place to have them be extremely successful. 

Dave Morgia: The one thing of all of the roles that you just described to me that surprised me was the part-time real estate analysts. So, I assume that's just acquisitions only. Part-time how are you getting enough underwriting done with a part-time guy? Is someone else kind of supplementing that role or are you just looking at fewer but better deals? 

Michael Roeder: That's a good question. So, we have an assistant that will, do the initial punch. They'll get all the information entered in, they set up all the folders, download the offering documents, and then it goes to our part-time real estate analyst. 

Dave Morgia: Got it. So, would you say, I guess there's only a nominal percentage of the deals that actually get to his or her desk as the analyst?

Michael Roeder: So, all of them do get to his desk. However, you know, the actual deep dives that he does are fairly limited. 

Dave Morgia: Got it. So, yeah, I guess, if everything's kind of organized, you can pretty much, like many deals, pass on it relatively quickly and move on with your life. So, I assume that's kind of how he's saving a bunch of time there. 

Michael Roeder: Yep. You got it very interesting. 

Dave Morgia: Is that an in-house person or do you just hire that out as you need?

Michael Roeder: Yeah. That's contracted, so, it's not an in-house full-time employee. 

Dave Morgia: Yeah, just figuring. It was the one thing that really just stuck out. Everything was making sense. Yeah, you grow and getting the financial officer, all these things and then, oh, you guys are looking at so many deals I'm sure, but how you're getting them all accomplished? But, yeah, a little bit of preparation can definitely save you some underwriting hours for sure. 

Michael Roeder: Certainly. And we, you know, I enjoy underwriting deals, so I'll jump in occasionally as well and fully take on some deals. And I think that's important to kind of keep your grasp on the market and how to properly underwrite deals. So, we do a little bit as well. 

Dave Morgia: No, that makes a ton of sense. I mean, I guess ideally in a world that it's pretty hot right now, but ideally, you're looking at less deals, but more quality deals. Right. So, if you can just get to that kind of funnel, you can spend less time just punching numbers that are never going to turn out to be accurate or are worth your time. 

Michael Roeder: Yup. That's right. And I always like to say, you know, the more time you spend on last deals, you know, the more successful you're going to be because, as you dive into a deal and you spend more and more time on it, it seems for the most part, you know, you start to pick up on additional, other income opportunities that you can put in place, or maybe there's some comps that support higher rents. Whereas if you're just doing a high overview on hundreds and hundreds of deals, nothing's really going to make sense most likely.  

Dave Morgia: Yeah. And the one saving grace about nothing making sense is, at least when it turns out, one single digit or even a negative IRR, sometimes you can just, you know, just napkin mat those ones, you'll get used to napkin mapping those, it's like a language, right. So, you'll just get used to saying, 'oh, high level, this is never going to work. Like I've seen this deal a thousand times, just move on with your life and, and call it a day'. 

Michael Roeder: That's right, exactly. You can tell pretty quick once you've done it for a few years, you know, what's going to most likely have a little bit of opportunity and potentially make sense and what isn't.

Dave Morgia: Yeah, that's great. And then Michael, as long as you're ready, I'd love to get into these five key questions to kind of see where you fall on the, just the kind of mental fortitude stuff. 

Michael Roeder: For sure let's do it.  

Dave Morgia: So, the first one here, if you could only pick one trait that explains your success, what is that trait and why?

Michael Roeder: Yeah, I would say being very, very persistent and that's how I've been, whether it was, you know, real estate or when I was a insurance high net worth insurance producer. I think if you're persistent, you're going to have success in multifamily, but you have to be persistent, especially in today's environment when it's so competitive, because you're going to lose out on a lot of deals, you know, and if you get discouraged easily, you know, game over. 

Dave Morgia: What is the most uncharacteristic thing you have done in your business and why did you do it?

Michael Roeder: Yeah, good question. So, that we actually already talked about that in this conversation, firing a management company. That is not typical of me, I don't like to just let go of people or, you know, third party contractors or management companies. So, that was not typical, but it was a must and we had to solve a problem and we tried every way possible and we weren't able to solve it. So, we had to let go of that management company. 

Dave Morgia: Yeah, like we said, I mean, it's obviously easier to repair that relationship than to break and form a new one, but sometimes it just doesn't fall that way. 

Michael Roeder: That's right. 

Dave Morgia: It's always assuring to hear that, it's not the go to a reaction. Right.  And then can you name a time Michael, where you felt you were not going to be successful and how did you overcome that? 

Michael Roeder: Yeah, so when I was growing up, you know, even in college, I was always afraid of public speaking and so, I had to overcome that and the way that I did that was going to, you know, a ton of different networking events. So, talking to thousands of people and just knowing the subject that you're talking about. So, if you can research and really, really get to know the subject that you're going to talk about, you know, it really gives you a lot of confidence. So, I was able to overcome that quite a while ago. 

Dave Morgia: Yeah. And going to meetups like that, those are always the most unnerving, especially if you're new to that scene. So, it's amazing that you just jumped right in like that. But to like the knowledge part, that's like what, they, I've never done Toastmasters, but that's what they pitch. Right. It's just do what, you know, like my heart, because like anyone could talk about their passion for an hour straight, if you really just let them have the floor. So, just get a little more knowledgeable and you'll feel like 10 times more comfortable with what you have going on and it'll just feel much better.

Michael Roeder: That is so true. 

Dave Morgia: And, then pretty much opposite to that one. Can you name a time where something in your business went perfectly and what did you do to make that reality? 

Michael Roeder: Yeah. So, when we hired on our CFO, that literally went perfect. Training was seamless. The hiring process was seamless. And the way that we did that is, we integrated our CPA firm and the gentleman that owns a CPA firm, so, he actually sent out a, the job posting, he filtered through all the applications, he had the initial interviews with this gentleman. And so, that really helped us because Dan and I, you know, we hadn't previously, hired on a full-time employee. We didn't know what questions to ask. We didn't know, you know, who fit the mold the best. So, that helped us out, narrowed it down to a few people. And then Dan and I jumped on a phone call with them, had a more in-depth conversation and interview, and we were able to really hire the best person for that position. 

Dave Morgia: I have never heard of that approach before, but that's super unique, and I have to make note of that because, that is obviously a lot of people not tax or finance experts, they can invest well, but maybe you don't know all the language that goes into it. So, to just lean on someone that you're already working with, that's a great idea. I've never even considered that. So, that's amazing. 

Michael Roeder: Thank you. Appreciate it. 

Dave Morgia: And then, last one here Michael. What have you been on lately to improve yourself or your business? 

Michael Roeder: Yeah, so I think, creating systems for us, you know, just being more efficient and that's another thing that I've done over the last 15 years is, I'm always trying to be a little bit more efficient, every single day. And so, that's been crucial, also leveraging other people's talents and time. Like I said, you get to a certain point and you only have so much time in a day, so, you need to bring on other people that are really good at what they do and, you know, trust them as well. So, that we can grow further. 

Dave Morgia: And then before we sign off, do you just want to let the listener know how they could reach you today?

Michael Roeder: Yeah. A few different ways that you can reach me, I did write an e-book, it's called Four Steps To Successful Passive Investing. So, if you go to our website,, click on the e-book tab and you can download that for free. Otherwise, you can certainly email me. My email address is And Chris, thanks so much for having me on. I really appreciate it.  

Dave Morgia: Yeah. I mean honestly, the last nugget, there was my favorite, about the CFO hiring, but a couple of great nuggets here about that, about how you kind of approach a divorce, which is obviously, not ideal and just how you kind of grow your partnerships. So, really appreciate the talk today.

Michael Roeder: You're more than welcome. Thanks again, Chris.

Operating/owning across multiple states
Sizing up a PM group to fit your needs
Divorcing a PM
Homerun boots on the ground teams
Remote calls on property performance
Favorite KPIs to track a property's performance
5KQ1 - If you could only pick one trait that explains your success, what is that trait and why?
5KQ2 - What is the most uncharacteristic thing you've done in your business and why did you do it?
5KQ3 - Can you name any time where you felt like you were not going to end up successful? How did you overcome that fear?
5KQ4 - Can you name a time where something in your business went perfectly and what did you do to make that a reality?
5KQ5 - What have you been focusing on lately to improve yourself or your business?