JF1094: Flipping Houses, Developing, Buy and Hold, Syndicating, How to be Successful in Multiple Areas with Monick Halm
Monick and her husband Pete, have successfully partnered together in their real estate business. They tackle all avenues of investing and do it successfully. Rarely do we get to talk from someone who does it all successfully, lots of lessons from Monick today! If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
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Monick Halm Real Estate Background:
-Founder of Real Estate Investor Goddesses, an online community for women investors
-Real estate investor, developer and syndicator
-Over 12 years of experience in single family, multi-family, and RV/mobile home parks
-Author of The Real Estate Investor Goddess Handbook
-Prior to real estate she practiced corporate litigation for 9 years at top law firms in Los Angeles
-Based in Los Angeles, California
-Say hi to her at http://realestateinvestorgoddesses.com/
-Best Ever Book: Rich Dad, Poor Dad
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Joe Fairless: Best ever listeners, welcome to the best real estate investing advice ever show. I’m Joe Fairless and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff.
With us today, Monick Halm. How are you doing, Monick?
Monick Halm: I’m doing great. How are you, Joe?
Joe Fairless: I’m doing well, nice to have you on the show and looking forward to diving in. A little bit about Monick – she is the founder of Real Estate Investor Goddesses, an online community for women investor. You’ve gotta check out her new book, she is the author of The Real Estate Investor Goddess Handbook – consistent branding theme I see throughout…
She is a real estate investor, a developer and a syndicator, has been doing it for 12 years, investing in single-families, multifamilies and mobile home parks. Prior to this, she was practicing corporate litigation for nine years at law firms in Los Angeles. She’s currently based in Los Angeles, California.
With that being said, Monick, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Monick Halm: Sure. My personal real estate investing business – I invest with my husband; we syndicate, we bring groups of investors together to purchase properties. Currently, we have syndicated some apartment buildings in New Mexico, and we have a mobile home part that we syndicated in North Carolina, and we’re currently working on a project in Lake Charles, Louisiana. We also have passively invested in quite a few properties in Dallas, Atlanta, and have a couple duplexes in Los Angeles. That’s where we’re at with our real estate investing.
We started syndicating maybe 18 months ago, so that’s a newer thing for us. Before, we just had the duplexes in L.A. and we were flipping homes. Then after a while we realized, “Hey, this is like a short-term job, and we’d like to be able to cash-flow”, and we also wanted to be able to leverage… So we got into syndication and have been loving it.
Joe Fairless: Let’s talk about the last deal that you closed on – which one was it?
Monick Halm: The last one we closed on were two buildings in Albuquerque, New Mexico. There were two separated deals, but we got them at the same time, closed on them within a few days of one another, and we’re managing them together.
Joe Fairless: Two buildings – are they apartment buildings?
Monick Halm: Yeah, one is a 77-unit, the other one is a 51-unit building.
Joe Fairless: Okay, and how did you come across these two buildings?
Monick Halm: We were led to Albuquerque almost by accident. At a networking event we met this woman who had recently moved from Albuquerque to Southern California, and we’d been looking at other markets that were much more on the radar… We were looking at Dallas, Atlanta, Kansas City, and she said “Well, have you thought of Albuquerque?” “No, we haven’t. Tell us about it!” So she told us a little bit about it and then we went home, did some research, and it’s a very stable market. It didn’t have the booms and busts of other markets… We like that.
We went in, found a couple properties that had been on the market for a while. We were able to get them under asking; we liked that we could get good returns and it wasn’t as crazy competitive as some other markets. It has since gotten more competitive over there, but at that time – it was about six months ago that we closed on those – there weren’t that many people looking there.
Joe Fairless: When you said 77-unit, it triggered something — I was like “Wait a second…”, and then I remember I interviewed someone, Pete Holm…
Monick Halm: You interviewed my husband. [laughs]
Joe Fairless: Oh, was that your husband? Oh my god, you have the same last name… [laughter] I’m connecting the dots.
Monick Halm: You’re like, “This sounds familiar…” [laughs]
Joe Fairless: Yeah, yeah. Okay, cool… Let’s take a different approach then, because Best Ever listeners, you can just listen to Pete’s interview, where I asked him more specifics about the 77 and the 51-unit.
How did you and your husband partner up? Who does what?
Monick Halm: I guess I’m more the person that does investor relations, so I’m more of the person who has the conversations with investor, and does the relationship part of it. He does some, but I’m more of the one that has those conversations. When we have a property, I do more of the design work… I’m a certified interior designer; I’m more in charge of the rehab and overseeing that part, and he’s the numbers guy. He’s the one that does the underwriting, he’s the one that takes care of all of the other details… Makes sure that we have good insurance, and all of those other moving parts. I’m more of the people and the design, and he’s the numbers guy.
Joe Fairless: You’ve got the 77 and 51-unit – how many people are on the general partnership on that deal?
Monick Halm: So how many of us were on the sponsorship team?
Joe Fairless: Yeah.
Monick Halm: Three of us.
Joe Fairless: So it’s you, your husband, and…
Monick Halm: And our partner, Chris Rush.
Joe Fairless: And what’s Chris’ role, versus your husband’s and your role?
Monick Halm: There is a lot of overlap in terms of the work we do. He also did quite a bit of the fundraising… He had his own set of investors; he also really helps to keep our property managers doing what they’re doing. He really makes sure that they’re meeting the goals that we set. We all meet on the phone with our property managers every week, but he’s more on top of doing that bit of it.
Joe Fairless: Okay. How much did you and your husband bring in equity from investors in the deal?
Monick Halm: In that particular deal? Probably we contributed about 40% of the equity, and Chris and his investors about 60%.
Joe Fairless: And what was the total equity raise for that one?
Monick Halm: Combined they were about a little over 2.2 million.
Joe Fairless: So you brought a little under a million bucks. From those investors where you brought about a little under a million dollars, if you can just think of one or two of them in your mind, how did you initially get to know them? And I ask this question for Best Ever listeners who also want to bring in investors in their deals and they are wondering “How do I find investors?”
Monick Halm: Okay. A lot of the investors came from an investment group where we met Chris, our partner, initially. It’s Brad Sumrok’s group; he’s based out of Dallas, so this is a wonderful group of people who are looking to invest in apartment buildings… And if you can bring apartment deals that meet the requirements there – you need generally a minimum of 10%, double digit cash-on-cash returns, and an investment that will double the investors’ money within 3-5 years, there are lots of willing investors within that group.
A lot of our investors came from there. I would say maybe a little over half came from that group. Then the other investors, they were people that we’d worked with; I was an attorney, so some of the attorney friends. Chris is a pilot, and a lot of the pilot friends invested. So they’re just people that we have known throughout our lives that had money that they want working better for them. We were able to provide an opportunity, and they were happy to invest.
Joe Fairless: How did you feel the question of “This looks great, Monick, but you haven’t done this size of deal before?”
Monick Halm: Right, partly that’s why we brought Chris in. Peter and I found the properties, but we knew that we didn’t have the experience by ourselves to handle this, so we brought in a partner who had had experience. He had a 180-unit in Dallas that he had managed, so doing these properties was a natural fit for him. So we were able to bring in the experience. We didn’t have it, but we could partner with the experience. We also got the largest property management company in New Mexico, based in Albuquerque, so we had a very knowledgeable, reputable property management company that we partnered with, and we just had a really good team. So how we were able to answer that question is as a team we had this experience… And they were investing in the whole team.
Joe Fairless: And you said you are focused on investor relations and communication – remind me again when did this deal close?
Monick Halm: It closed end of October, beginning of November.
Joe Fairless: 6-7 months. By the time this airs, probably like 7-8 months. Since then, what process or cadence do you have with communicating to investors?
Monick Halm: We send out a newsletter update every month with financials and what’s been going on.
Joe Fairless: Walk us through — what does that newsletter look like, as far as is it attachments, or is just an actual e-mail, or do you send it out via MailChimp, or some other service?
Monick Halm: MailChimp, and with links to the actual documents. It will have pictures of where we are with the rehab… “Here’s the new apartment” or “This is the new paint job on the outside of the building”, “This is what we’re doing right now, here’s where we’re at”, and then “Here are the financials.” That’s generally what the communications were like.
Joe Fairless: Now I’m gonna completely switch gears, I’m gonna go to that mobile home park in North Carolina… When did you close on that?
Monick Halm: It’s all a blur… [laughter]
Joe Fairless: I’ve recently come across a term called [deal merge [00:12:25].06] [laughter]
Monick Halm: Exactly.
Joe Fairless: I think you’re experiencing it right now.
Monick Halm: [laughs] I was like “What?! That was so long ago!” That was a year ago, right? That was last June.
Joe Fairless: Okay, last June, so about a year ago. What can you tell us about that deal?
Monick Halm: Well, that was a deal where — we didn’t find it, we’re not running it, we just brought some money to that deal. A friend of ours, Andrew Lanoie, who has a lot of mobile home parks — at that point he had maybe 12, and I think now he has over 20… And he had one big investor who was bringing money in from [unintelligible [00:13:04].00] able to bring that money in. He wanted to close, he had a shortfall, and we were able to raise money to close the deal.
Joe Fairless: Did you invest in that deal or not?
Monick Halm: We invested a little bit of our money in that deal, and we’ve got some equity from bringing in…
Joe Fairless: How do you determine if it’s a good ROI for your time and effort to bring investors or invest your own money in the deal?
Monick Halm: We look at the deal as a whole, what are the returns going to be like… For that one – it was our first deal, so it was actually a nice way to be able to syndicate without having to take on the whole process of managing the asset, and everything. It was pretty simple, and we liked that. It was helpful for us to get our teeth wet. Now I think we would look at what are we getting in terms of just the whole package – what we get upfront, what kind of equity deal is it, is it something that would be interesting to our investors? Certain deals are an easier sell than others, so it’d have to be something that’s a fit for the people that we have.
And not just that, but we wanna have lifetime relationships with people, and what is the lifetime opportunity in this deal? Is this somebody we’d want to continue to work with? All of those factors go into our decision, and it’s really on a case-by-case basis.
Joe Fairless: What’s a lesson that you learned flipping houses in L.A. that you’ve applied to what you’re doing now?
Monick Halm: That’s a good question…
Joe Fairless: Well, it was about time I finally asked a good one… It’s only been 16 minutes… [laughter]
Monick Halm: They’ve all been good questions… [laughs] What’s a lesson that I learned…? Well, one big lesson, which is so much is about your team. We had one great construction team that was really quick, did really amazing work and was super reasonably priced, and at one point they were busy, so we went with another team that was just not as good. It took them a lot longer, and time is money when you’re flipping, especially.
The team really made a difference, and the same holds true with everything else. We’ve had unfortunately to let go of some people in the property management team that were not doing the job, and switching them out has been 180 in terms of our results… Because when you have a weak team member, you’re gonna have weak results. I think that’s a big lesson that has applied across everything we’ve done.
Joe Fairless: What is your best real estate investing advice ever?
Monick Halm: My best real estate investing advice ever is to get very educated, and continue to learn as much as you can. We invest a lot of our time in learning, and I’ve created a learning community myself. I know a lot of mistakes I’ve made or opportunities I’ve missed… That’s probably some of the harder things – I didn’t know what I didn’t know. So it wasn’t until we were educated that we were able to create certain opportunities and to do so much better.
Getting a good education is probably the best advice. And then just having a really great team. Work with the best. The advice I got from Beth Clifford, who is an international developer who works with the real estate guys in their development in Belize – she says “Hire the best. They won’t cost you money, they will make you money.” If you try to save money going with somebody who’s not the best, they will cost you money. So really try to work with the best you can, and invest in the best.
Joe Fairless: Yes, I agree. What’s an opportunity that you’ve missed along the way that you can think of?
Monick Halm: Well, I did not know anything about syndication until two years ago. I’ve met Robert Helms at a networking event and he told me about this thing. I was looking for a fourplex, because that’s all I knew to look for. I thought I was limited at my own capital and credit, and he said “Well, you could do that, or you bring a group of investors together and you can get a 100 or 200-unit apartment building.” That blew my mind. I really had no idea that that was a thing; I thought you needed Donald Trump’s bank account in order to invest this way.
I realize we’d put in a lot in flipping, and we were buying things all cash, we were not leveraging at all, and I realized “Wow, instead of flipping, if we had taken that money and syndicated, look at how much further we would be.” We just didn’t know that that existed yet, so those were a lot of opportunities we missed.
Joe Fairless: Are you ready for the Best Ever Lightning Round?
Monick Halm: Sure.
Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.
Joe Fairless: Best ever book you’ve read?
Monick Halm: For me, for investing it was Rich Dad, Poor Dad. It really helped.
Joe Fairless: Best ever deal you’ve done?
Monick Halm: Best ever deal I’ve done is my Albuquerque deal.
Joe Fairless: What’s a mistake you’ve made on a transaction, very tactically speaking?
Monick Halm: On the actual transaction?
Joe Fairless: Yeah.
Monick Halm: A mistake we made was not taking acquisition fees and putting everything down the line.
Joe Fairless: And now for your project how do you charge your acquisition fee?
Monick Halm: It depends… 2%-3% usually now.
Joe Fairless: Okay. What’s the best ever way you like to give back?
Monick Halm: I give webinars… I do a lot of training, a lot of the stuff I for The Real Estate Investor Goddesses; it’s free, and I’m really passionate about getting more women into this arena. I think that this is one of the best ways to build wealth, and a lot of women just don’t know about it. I think that this community I’ve created is the way I give back.
Joe Fairless: And just a point of clarification, 2%-3% – is that of the purchase price?
Monick Halm: Yeah, of the raise.
Joe Fairless: How can the Best Ever listeners get in touch with you?
Monick Halm: The best way is to go to RealEstateInvestorGoddesses.com. You can find me there.
Joe Fairless: Thank you for being on the show, Monick, and thanks for sharing your advice, your career path and your investing path along the way, talking about how you’re actively in syndication, the lessons learned along the way, how you got going, how you were able to shortcut this by tying into an existing network and then leveraging other people’s experience, and then eventually going out. Now you’re gonna be, I suspect, doing it on your own, where you don’t need to necessarily have as many partners on the sponsorship side. Then also talking about the lessons learned from flipping, to now syndicating.
Thanks for being on the show. I hope you have a best ever day, and we’ll talk to you soon.
Monick Halm: Thanks, Joe.
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