JF1782: Overcoming A Bad First Flip To Over $40 Million In Multifamily with Ola Dantis

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Ola was a house flipper first, he and Joe will cover what house flipping taught him about multifamily investing. They will discuss Ola’s first flip that didn’t go quite as planned, Ola admits he had shiny object syndrome with this deal, and shares his lessons learned. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!

 

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“Make sure that they know their stuff so that you know what you need to bring to the table” – Ola Dantis

 

Ola Dantis Real Estate Background:

 


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TRANSCRIPTION

Joe Fairless: Best Ever listeners, how are you doing? 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, where we only talk about the best advice ever, we don’t get into any of that fluffy stuff.

With us today, Ola Dantis. How are you doing, Ola?

Ola Dantis: Doing fantastic, thank you Joe.

Joe Fairless: I’m glad to hear that. A little bit about Ola – he’s the founder, CEO of Dwellynn.com. He’s a multifamily syndicator and has successfully sourced deals of over 40 million buckaroos. Based in Baltimore, Maryland. With that being said, Ola, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Ola Dantis: Yes, thank you so much, Joe, and thank you for having me on the show. Obviously, I’m a big fan of your show, so it’s kind of surreal that I’m actually on the show. My name is Ola; I was born Niger, I lived in the U.K, and now I’m based in the U.S. I’ve been doing real estate for a few years now… I’m focusing on multifamily acquisitions, I’m syndicating deals and I’m sharing the profits with other investors. I’ve done a couple of flip deals as well. I’m based in Baltimore, Maryland… And I’m excited to talk to you here, Joe.

Joe Fairless: So you’ve been syndicating deals and you’ve done flip deals as well. Let’s talk about the flip deals first, and then we’ll get into the deals that you’ve participated in on the syndication side. What’s a specific project that you have flipped?

Ola Dantis: That is such a good question. We’ve flipped a house here in Baltimore, Maryland. It was a small house, just a townhouse, two-bedroom one-bath, but the unique thing is with our company Dwellynn, when we actually do a renovation we actually strip the whole house down to the studs, and obviously put it back together. And for those who know about flipping, that’s actually a lot harder than actually building a brand new house on raw land.

For our particular deal, we were lucky enough to buy that — I think it was about $75,000. The idea was to put in another, say, 50k-50k, and then sell it for 250k. That was our projection. Of course, for anyone that’s been doing real estate for a little while, that did not go to plan. [laughs] It was a very interesting project for us, but we were able to sell it. I think we ended up selling it for about 225k, which was not bad… But I think it wasn’t so much about how much we’ve made or how much we’d spent, it was just learning a ton about the mechanics of putting together a house, and just really enjoying that process and dealing with different characters, contractors. That was a  good lesson learned for us there, and then obviously we flipped others… But that was the first deal.

Joe Fairless: That was the first one… Where did you net out on that one, profit-wise?

Ola Dantis: Profit-wise I think probably about 50k. Just around about 50k, after all was said and done.

Joe Fairless: Over what period of time?

Ola Dantis: I would say about 4-5 months.

Joe Fairless: And if you were given the experience you have today, if you had that experience before that first project, what are some things that you would do differently?

Ola Dantis: Well, first and foremost, I would say I definitely have the shiny object syndrome. Obviously, our first investment property for my wife and I was buying a duplex; we were house-hacking and we were doing tremendously well, actually, with that property. Then obviously I reached out to a fellow called Joe Fairless when I heard him speak on a podcast, and obviously [unintelligible [00:05:33].08] So I was starting to get really interested in multifamily syndications, but then I kind of jumped to this plate; and we can talk about that, in terms of mindset and shiny object syndrome.

So from what I know now, I would definitely [unintelligible [00:05:43].27] at all. Just because it wasn’t the best bang for my time… Yes, I learned a lot about putting the house together, but I feel like I could have used that time wisely in looking for multifamily deals, looking for passive investors, trying to grow and build my multifamily syndication business. But flipping did suck a lot of time, because I’m a little bit of obsessive, so I was there every single day on the site, making sure that we’re on our project timelines, making sure that we’re on budget… So that would obviously take away from looking for multifamily deals and looking for multifamily passive investors. So I wouldn’t do it again.

To focus more on the project, definitely I would not strip a house down to the studs anymore. Definitely not. I think it was a little bit overkill. We were trying to strive for excellence… Which is great, but the reality is when the end buyer comes to buy the house and when they come to look, they don’t really know, or frankly they’re indifferent to the kind of insulation that you used, or the fact that the carved shower glass door was custom-made. They actually don’t care about that stuff. Obviously, we didn’t know that, and we were buying $2,000 custom-made shower doors, and when the buyer came, they didn’t even notice it. So not putting lipstick on a pig, but not necessarily going overkill on a project, for sure.

Joe Fairless: The experience you have had in flipping – what aspect of that experience has helped you with multifamily?

Ola Dantis: That is such a good question. Raising money. There are obviously different ways in which you can raise money, especially in our creative economy now, with social media. I raised some of the money from Instagram, from social media, so I’m now obviously using that medium to reach out to newer investors for our multifamily syndication. So I’ve started to realize that I can, through creative approaches, raise money using social media. It’s not the typical marketing, it’s kind of an indirect approach to marketing, to get people interested in what you’re doing and learn more about you, understanding your story and connecting with that story, with the intention – we call it call-to-action (CTA) in the marketing world – to actually invest with you. That was definitely something I could bring across to the multifamily syndication space.

Joe Fairless: And that’s because you were putting pictures of your flips on Instagram and gaining traction from an audience?

Ola Dantis: Correct, correct. And I actually wanna make a really quick point – at the time when I got an investor that reached out to me on Instagram, I think I had about 100 followers at the time on Instagram on the Dwellynn page. And on the Facebook page for Dwellynn we have about 5,000, and most of them were kind of latent; they weren’t very interactive. But then there was this page that only had 100 followers, and I had an investor that actually invested, that went through the process with us. That was really interesting.

Joe Fairless: What did that conversation sound like when you spoke to the investor and they came across you on Instagram? The very first conversation.

Ola Dantis: Yes. Basically, they’d come through the funnel. They would see one of our posts on Instagram. We basically optimize hashtags. Instagram allows you to use 30 hashtags, so we use all of that. The person would obviously look at our page, and then on our page he has a link that takes them to our website. Then when they get to our website, within seconds of the user getting to our website, then they get a pop-up, and the pop-up gets the email. When they give their email, obviously we’ll reach out to them pretty quickly and we get on a qualifying phone call with them to find out more about what they would like to do with us.

Joe Fairless: Now let’s talk about syndications. I mentioned it because I read it in your bio – “A multifamily syndicator who has successfully sourced deals of over 40 million dollars.” What does that mean exactly, you’ve sourced deals of over 40 million dollars.

Ola Dantis: Good question. We actually employ a software on Dwellynn , where we basically can reach out to the sellers – typically in the state of Texas – directly, and speak to sellers and get a deal either under contract, or get them connected with other syndicators that might want to do business with them.

So we found a deal out of Texas. It was a family actually, and I called the son. I normally have a script and say “Hey, it’s Ola from Dwellynn. We’re an equity group and we buy apartments in the state of Texas.” So we got that deal and then we passed that deal on to another multifamily syndicator in the country, and they kind of follow that process.

That was one deal, and then we kind of did the same thing [unintelligible [00:10:22].26] So far we’ve done about 40 million total of those kinds of deals.

Joe Fairless: On the deal that you were mentioning – about how big was it, whether unit size, or value, or purchase price?

Ola Dantis: Yes. The very first one was about 18 million in total. They had about three assets they were actually looking to dispose, just not so long before I called. We didn’t end up getting all of those. One of them I think [unintelligible [00:10:47].02] Frank beat us to it… But the other two we actually passed on to another syndicator that actually underwrote and continued that relationship with that family. And it was actually a local investor as well.

Joe Fairless: Who beat you to it?

Ola Dantis: Frank… It’s a broker.

Joe Fairless: Oh, got it, another broker. So 18 million in total was the first, but when I say the 40 million sourced, that means that you have had a conversation with the owner and connected the dots between the owner and buyer, correct?

Ola Dantis: Correct.

Joe Fairless: But what do you get compensated for that?

Ola Dantis: Typically, if the deal goes all the way to closing, what we say is “Look, we obviously are not looking for a windfall.” That’s not our approach at Dwellynn. So  we basically take a referral fee and kind of reinvest that into the deal.

There’s also a really interesting deal as well that I’ve found in Texas, and basically the seller didn’t really want to sell the deal to us, because the purchase price they were asking wasn’t what we were looking to pay for it. I’m sure you’ve [unintelligible [00:11:39].03] So what we did was we had a relationship with a broker in Texas, so we basically just passed that deal to that broker, and he then put it on his websites. It’s actually on his website right now. So if he does sell it at the price that the seller wants – I think it was like 5.1 million – then we get a cut off of that deal. Typically a 1%-2% referral fee.

Joe Fairless: Okay, cool. And 1%-2% of the purchase price?

Ola Dantis: Correct.

Joe Fairless: That’s what I was gonna ask. Okay. So how many deals are you in as a result of finding the deal through the software that I’m gonna ask you about in a little bit?

Ola Dantis: One so far. That’s where we’re at. We’re just hoping to perhaps close on another one in the coming month, hopefully.

Joe Fairless: Awesome. And how large is that deal that you’re in?

Ola Dantis: This is actually one that I posted on Facebook; I think you saw it as well. This is a court building and a police station in the U.K.

Joe Fairless: Oh, okay. So for the Texas ones have you received any referral fees from those? Or are they still pending?

Ola Dantis: They are still pending, correct.

Joe Fairless: They are still pending… But then you did it in the U.K. You took a right turn on me when I asked that question… [laughter] So now we move from Texas to the U.K, two very similar areas in culture… [laughter] Now we’re in the U.K. – I know you’ve lived there… What are circumstances where now you’re in a deal that — you said a court and a police station?

Ola Dantis: Right. They’re literally right beside each other.

Joe Fairless: How did you get into that deal?

Ola Dantis: Basically, we actually still do deals in the U.K. This is not the first deal that we closed in the U.K. We have a sister company called Realbot in the U.K, a really good friend of mine. I wish I’d told that story; that’s actually how I got into real estate. I went to meet him in Dubai; I think I’ve told that on different other podcasts… He has his own firm, and basically we kind of partner on deals. We’ve been going back and forth. He’s a [unintelligible [00:13:37].23] buddy in the U.K, and we’ve been going back and forth on that deal, and we closed — I think it took about six months just to close. It was different issues that we were having with the government, but we did get that deal, so we’re going to be converting the court building into an event center, and the police station into a co-working space. As you’d imagine, we’re getting really creative with what we’re going to do with the jail cells, if we’re going to remove them or keep them for the co-working space. That’s what we’re working on right now.

Joe Fairless: What type of ownership do you have in that deal, and how do you structure the partnership?

Ola Dantis: The partnership between me and my partner is 50/50. Of that 50/50, we have 20% of that on the GP side. We obviously syndicated that deal and raised 80% of the equity towards that deal.

Joe Fairless: And how much was that?

Ola Dantis: We raised about 1.1 million pounds. Not to be mistaken with dollars.

Joe Fairless: Sure. And how much of that did you raise from your network?

Ola Dantis: From my network about 250k.

Joe Fairless: How did you meet those people that you raised that 250k pounds from?

Ola Dantis: Just family and friends, people that we know from the U.K. coming together and raising funds. It’s a little bit easier to raise money where you’ve lived a long time. It was just kind of reaching out to family and friends, sending them the investment packet and raising funds. That wasn’t as difficult as we thought, actually.

Joe Fairless: You talked about you have a software that you reach out to owners directly. Is that a software that you have purchased, or is that something that you created?

Ola Dantis: It’s basically a software that we’ve purchased. We use that software in conjunction with scrubbing the lists, making sure that it’s the right owners that we’re reaching out to

Joe Fairless: Okay, cool. So it’s a software like Yardi, or CoStar, or something; you take it a step further and scrub the list, and then do the outreach and try to make that connection?

Ola Dantis: Correct.

Joe Fairless: If we don’t make that connection, then we’ll go out and send mailers to those specific sellers as well. A sophisticated letter.

Joe Fairless: How many conversations have you had from sellers as a result of your outreach?

Ola Dantis: That is such a good question. I think at the last count we were over — actual conversations with owners just over 200, but total calls I think were in the thousands. Most of the calls are voicemails, and trying to get past really savvy receptionists/gatekeepers.

Joe Fairless: Right. And how do you get past a really savvy gatekeeper?

Ola Dantis: It’s just the same script. We tell them we’re very transparent and we would like to speak to sometimes the founder or the CEO of a company, or the vice-president of acquisition, or disposition — some bigger firms in Texas would actually have an asset disposition team, so we’d try to get to someone on that team, if we can. If we can’t get past that gatekeeper, then we continue our scrubbing. LinkedIn – trying to find the owners and trying to reach out to them on LinkedIn. It’s a lot of work, it’s a lot of steps, but it works for us.

Joe Fairless: And who’s us?

Ola Dantis: It’s basically me, and I’ve got a guy in Houston, Texas that actually helps me to scrub out the list, and he makes some calls as well.

Joe Fairless: And when you say “scrub out a list from CoStar”, what are you scrubbing for?

Ola Dantis: Most times you would get numbers that you would assume that would be the number to access the person, but it would just be either a previous number that doesn’t work, or it’d be a number to a receptionist. So what we’re trying to do is get the actual person’s cell. That’s what we care about – to get closer as much as we can to that person.

We will take out numbers that aren’t working, we would take out emails that don’t match the firm of the company, if we know the firm’s name… So that’s kind of what we’re looking for. When we get to actually executing the list, we know that we’re as accurate as we can get.

Joe Fairless: Okay. And how do you find the cell phone numbers?

Ola Dantis: White Pages. It’s pretty accurate, for the most part.

Joe Fairless: Cool. And how much is that, do you know?

Ola Dantis: It’s not that much. There’s different tiers. I think it’s like $20/month. We have different tiers that we pay for.

Joe Fairless: Based on your experience, what’s your best real estate investing advice ever?

Ola Dantis: Oh, man… I would just say try to focus on one thing and one niche as much as you can, but as quickly as you can… Meaning if you’ve given yourself a year or two in a particular niche or particular asset class and it’s not really working for you, maybe a year or two might be a good place to say “Hey, this isn’t working. Can I just pivot into something else? Can I try something different? Can I reach out to a mentor or someone that can help me with this particular niche or asset class that I’m looking at?”

Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Ola Dantis: Let’s do it!

Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.

Break: [00:18:41].24] to [00:19:30].20]

Joe Fairless: Best ever book you’ve recently read?

Ola Dantis: Oh, man… As a Man Thinketh, James Allen.

Joe Fairless: What’s the best ever deal you’ve done?

Ola Dantis: The best deal I’ve done is actually my very first deal, my first duplex.

Joe Fairless: What’s a mistake you’ve made on a transaction?

Ola Dantis: Trusting partners.

Joe Fairless: How do you protect against trusting partners? [laughter] You’ve got to trust partners eventually, I imagine… So what do you do to mitigate the risk of whatever happened not happening again?

Ola Dantis: Great question. I read this book by Ray Dalio, Principles, and he talked about you should actually have a believability factor. What that really means is if someone has done something more than three times, for the most part it means that they actually have some kind of strength or skill. When I talked about partnerships – your partners can actually make or break you, as you know… So partnerships are extremely important, especially in the syndication space. So you have to make sure that whoever you’re coalescing with actually knows their stuff, and if they don’t, it’s okay, but you should know that going in, so you can gauge their amount of effort and work or skill that you need to bring to the table… And if that would basically make it up for that weakness that the person has, as opposed to going in blind.

Joe Fairless: Best ever way you like to give back?

Ola Dantis: We have something called the 1HousePledge on the Dwellynn website, on dwellynn.com. Our goal is to try to give a house to a family every year. This has been a big challenge for us, but we’re still working hard to make that happen here in Baltimore.

Joe Fairless: How can the Best Ever listeners learn more about what you’re doing?

Ola Dantis: The best place is InvestWithOla.com, or just go to our website, dwellynn.com.

Joe Fairless: Thank you for talking about the approach that you’re taking to find multifamily owners directly using CoStar, scrubbing the list, using White Pages to find cell phone numbers, and reaching out to owners even on LinkedIn if needed, having those conversations… And you’ve got some deals pending, as well as one that has taken place, across the pond. Thank you for talking about that, and lessons learned on the fix and flip stuff.

I hope you have a best ever day, Ola, and we’ll talk to you again soon.

Ola Dantis: Thank you so much, Joe. I appreciate it.

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