JF1874: Veteran Real Estate Investor Shares Story Of Scaling The Real Estate Ranks with Cory Boatright

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Cory is with us today to share his story of scaling his business. He started in the same position as many new investors, from bird dogging to wholesaling and then on from there, Cory has faced a lot of the same problems other have faced or will face as they try to grow into the real estate investing industry. Hear how he has overcome obstacles, and how he stayed focused enough to eventually sell over $100 Million in real estate transactions.

 

Cory Boatright Real Estate Background:

  • Real estate investing coach and investor
  • Has completed over 1000 real estate transactions, owns/manages over 422 apartment units via syndication, and sold over 100 million in real estate transactions
  • Based in Oklahoma City, OK
  • Say hi to him at www.coryboatright.com or www.apartmentevaluator.com
  • Best Ever Book: Modern Day Jonah

 


Best Ever Tweet:

“Usually you want to go the cheapest route but with multifamily you may not” – Cory Boatright

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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, Cory Boatright. How are you doing, Cory?

Cory Boatright: What’s going on, Joe?

Joe Fairless: Well, I’m looking forward to our conversation. A little bit about Cory – he’s been a real estate investing coach and investor. He’s completed over 1,000 real estate transactions, owns and manages over 420 apartment units (he’s on the GP side on those properties) and sold over 100 million dollars in real estate transactions. Wowsers! Also based in Oklahoma City, Oklahoma. With that being said, Cory, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Cory Boatright: Sure. Thanks again for having me on here. Real estate investors, I’ve been doing it for just close to 15 years now. I bought my first house when I was 21 years old, so that’s 21 years ago. I’m 42, getting ready to be 43 in June. I just kind of went up the ranks, I did everything from a bird dog, all the way up to I had a short sale business in 2006, and a loss mitigation company, and then just basically moved to wholesaling after a bunch of big things happened in my life, that were pretty hard things to deal with personally… But also, everything that you go through teaches you a lesson.

So I got involved with more wholesaling over the last 5-6 years, and about half that time I started having more interest with apartments. You and I just saw each other in Colorado at your event, which was awesome; an absolutely incredible  event… And I read your incredible book; it’s a huge, huge book. I’ll put it right here on my desk, so everyone is seeing it.

Joe Fairless: Oh yeah, there it is…

Cory Boatright: It’s such a big book, man… And it’s great!

Joe Fairless: There’s a lot of stuff to say about apartment syndication.

Cory Boatright: It’s a lot, it’s a lot… And I listen to all your podcasts, and everything. So you have been tremendously helpful in that regard. Another one of my partners, Corey Peterson, with the Big Kahuna, he’s been really helpful as well, and Michael Blank, Sean Terry is one of my partners now, working on the apartments side… So what I’m focused on is finding 75 to 150-unit apartment complexes, primarily in the greater OKC area. That’s been my big focus right now. We’re finding them off market, and the reason why, Joe, is because I believe there’s a big gap, where what’s called direct response marketing – you’re familiar, obviously, with Dan Kennedy, and John Carlton, a lot of the greats from marketing – there is a gap right now that’s needed, I believe, in multifamily. No one is really doing a great job of doing direct response marketing for multifamily, and for the owners.

So in 2019, one of my big Emphasis projects – I call them Emphasis projects – is really finding some piece of direct mail, marketing piece, some medium that really gets in touch with the owners of the 75-unit to 150-unit via direct response, with not having to – not that there’s anything wrong, but not having to work with or go through a broker, if note needed. So that’s been a big emphasis… And then of course, my wholesaling business. We did over 113 deals last year. I have a great operation, how that’s setup. That runs maybe about 15 hours of my time a week to keep that thing churning… So it gives me an extra time to do the other things, like marketing for multifamily.

Joe Fairless: Well, let’s dive in. I’d love to talk about the direct response marketing to multifamily operators and why you see an opportunity there… But first, the 15 hours  a week that you invest in your wholesaling business – what are you doing exactly?

Cory Boatright: I have this exercise – and I do this with consulting students as well – called “the $10,000/hour activity.” Basically, it is take a week of your life and write down from when you get up to when you go to bed at night, everything that you did in an hour, every hour, you put it up on your phone, that reminds you “What did you do this last hour?” At the end of this week you have to grade “Was that thing that you did (we’re talking about business activities, not family; you can’t put a price on that) worth $10/hour activity, $100/hour activity, $1,000/hour activity, or $10,000/hour activity?” Obviously, there’s very few things in a $10,000/hour activity, and it’s more of a concept, but what I’ve found – and it’s easy for all entrepreneurs to do this, myself included – is that we tend to do things just so we can get them done, so they’re not lingering around, not hanging out there, and causing us to get off focus… But those are $10 to $100/hour activities, Joe. And the goal is to figure out where we can spend more of our time on the $1,000 to $10,000/hour activities.

Those things, as you asked, are the big leverage points, the big rocks. We do a level 10 in our business — if you’re familiar with Traction; great book, you’ve probably heard a lot from it… A great way to basically run a company, and you can go through and you can find out these big rocks of what are the things that need to happen to move the needle forward? Those tend to be not the things that are the $10 to $100/hour activities; those are the $1,000 to $10,000/hour activities.

An example would be maybe you need to call someone, Joe, and have a conversation with them, because it needs to be a direct conversation with you and them to connect, and build that relationship with then. Maybe from there, you want to talk to them about some opportunity that you have that’s coming up, or in your business, that can really move the needle forward in your business. That would be a $10,000/hour activity. Some of these other smaller activities are things that typically just a virtual assistant can handle.

I’m still amazed – and you’ve mentioned this before we got on this interview today that you have a lot of Tim Ferriss books around. Well, he wrote the 4-Hour Workweek, which was pretty instrumental in changing the perspective for me – and I bet for you, too – on how  you view business and how you can leverage things. Well, that’s where the focus is right now, is “Where can I put those big rocks, and where can I look at those $1,000 to $10,000 activities that can move the needle forward?”

Joe Fairless: Today is Thursday, so we’re well into the week… What are some specific things that you’ve done in your wholesaling business this week?

Cory Boatright: Great question. This week I contacted a guy named Greg Helbeck and Jason McDougall, and I’ve found an opportunity for marketing – because I love it; I absolutely love marketing – but it’s in Dallas. I’m here in Oklahoma City, I’m not gonna do anything in Dallas. I know that they have a great operation in Dallas. I simply told them about this opportunity, spent maybe ten minutes with them, and said “Hey, first off, is this a good opportunity, a house that you can do something with?” They said “Absolutely.” I said “I’m not gonna spend a lot of time on it. Here’s all the information on it. If you think we can do something, let’s partner up. You let me know.”

So that was one thing I did. They came back to me… Not only are they gonna be able to partner on it; that deal in itself – we picked it up for around 143k, and we’re probably going to sell it between 165k to 170k. So just for that 5-10 minutes of spending that time, sharing that little bit of information with them, being very clear on the expectations – “I’m not gonna do anything. This is a great opportunity for you. This is your area, this is your market”, and that deal is going to clear 27k, so my part of that deal will be over 10k. And I spent maybe 10 minutes on that. So that’s an example.

Joe Fairless: That’s a $60,000/hour thing that you just did. Even better.

Cory Boatright: That’s right. I’m working on the 10X. [laughter] It’s difficult to get there, but you’ve gotta shoot for that. But that really is an example – whenever you’re creating those leverage points and you find those things that you’re not gonna necessarily spend your time on, but you know someone else that’s really gonna be good at it, then it’s good to build on those relationships.

Joe Fairless: So let’s talk about your comment when you said direct response marketing, and there’s a gap that is there for multifamily properties… Specifically, having something that compels owners of 75 to 150-unit properties to follow up with you. What do you know, that others aren’t doing?

Cory Boatright: I’d love to be able to give you a lot of data, because I love data myself… But I’m really in the process right now of building the data up. But I can tell you some things I have figured out so far.

Joe Fairless: Okay.

Cory Boatright: One is I’ve done mailers on finding deals on apartment complexes, and what I’ve found in the Greater OKC area, in a source called List Source (your listeners are probably familiar with that; listsource.com). You can pull data and you can look at apartments that are ten units and above. And what’s really interesting that I’ve found after doing a small mailer was some people that contacted didn’t even know what their NOI was, didn’t know what a P&L sheet was, Joe; couldn’t tell you how many exact units are, couldn’t tell you what the vacancy rate was, couldn’t tell you how much work is needed.

This really blew my mind, because there is this assumption and there’s this perception that because someone owns a five million, ten million-dollar asset, that they’re smarter than you, or whatever it is… That they know more about that unit, that they’re gonna be less motivated to work with you because they have options. And they do have options, but as understanding the pain points from motivated sellers in the wholesaling business, which is what we deal with on a day-to-day basis, it is a different animal on multifamily, because it takes longer time, but the pain points are really interesting. On multifamily it is “My partners and I have a legal dispute.”

Joe Fairless: Yup.

Cory Boatright: “I’m going through a  divorce right now.” “I’m embarrassed because I don’t know how to run this thing. I don’t want anybody out there telling me ‘Oh, your 150-unit now is being bought up because you don’t know how to do it.” There’s embarrassment, there’s shame involved. They’ve got properties inherited, and their kids are on drugs, so they’re doing stuff they shouldn’t be, and they’re running the asset into the ground. They don’t have any idea on their accounting.

Or  maybe, some of the things — they just need to do a 1031. There’s a lot of other reasons, but some of the ones that weren’t so obvious, that was very learning for me, was these people are still motivated, too. So no one is hitting someone right between the eyes, which is what great marketing does, and speaks to one person. I’m not talking about speaking to this economy of multifamily owners, all assuming just because they have 100 units or whatever, that they’re happy and everything’s great, and they’re bigger than everyone else. I’m talking about a message that speaks to your pain. Because once you speak to that person’s pain, then you’ll get a response.

That’s really what I’m talking about – finding that marketing piece that says “Hey, if you have a challenge right now and you need to sell the property quickly, but you don’t know what it’s worth, you really don’t know if you’ve been fixing the property up the way it should be… Hey, I’m local. I’m here in Oklahoma City, I’ve lived here for years and years; let’s go have coffee. This is a completely confidential conversation.” By the way, anything that has private, confidential, your email address, your personal phone numbers saying “This is real”, stuff like that – it stands out from all of the noise that they get all the time, that says “I want you to call me [unintelligible [00:13:31].25].”

Joe Fairless: It absolutely does. When you say speak to one person and find that pain point, how do you create something that speaks to one person, when as you mentioned earlier, there are varying pain points on the spectrum? If I’m going through a divorce, my pain point is gonna be different from if I have inherited a property and I don’t know what I’m doing.

Cory Boatright: Sure. One thing that I know that hasn’t worked is a postcard. If you’re approaching this marketing for multifamily and you’re using a postcard, stop doing it.

Joe Fairless: [laughs]

Cory Boatright: Because the postcard is really designed for single-family, and there’s a reason why, but I don’t wanna get into it necessarily right now… I’ll tell you that a letter is gonna be more effective. And not only a letter, but a FedEx package that you can get a signature — because how many FedEx packages do you send and you don’t open?

Joe Fairless: You open it. You always open it.

Cory Boatright: You’re gonna open it. Or if you have an envelope with a window that shows their name, and at the top of it “Open immediately” or “Urgent”, something that shows urgency. And we can get into particulars of split testing. But the answer to your question is you are going to have to split test it. And I’d love to show you right now all the data, but I’m still working on this myself, so maybe at the end of myself we could have–

Joe Fairless: Follow up.

Cory Boatright: That’d be awesome, to follow up. But you’re going to have to split-test. And the cool thing about multifamily when you do these lists, Joe, is that they’re not that big. I send out between 50k and 60k mail pieces for single-family motivated homeowners every single month. I’ve done it for years, right? I don’t have to do even 10% of that, because there’s not 10% of 75 to 150 apartment complexes in the Greater OKC area. It doesn’t exist. So because you have a smaller list, now you have to change your mindset. This is hard for marketers because we think “What’s the best ROI for our marketing piece?” And you have to change that. You have to think about “What is the best way that I can get in touch with an apartment owner?” If I did get a deal, and it’s a direct to the owner, I’m not having to worry about a broker, so what’s that saving on a 3-5 million dollar deal? It’s saving at least 100k or more, right?

Joe Fairless: Yup.

Cory Boatright: So if I didn’t have to do that, what could I spend on the marketing piece? Well for me, I’m spending between 31 and 34 cents on a little postcard with an API that goes to Google for a Google image that says “Is this your house?” That one’s really effective. But on this, for a letter, you’re gonna spend 50-70 cents just on the regular marketing to single-family. You have to stop thinking about that, because your list is only 5k or 6k people, Joe. Now you can spend $15, $20. If you wanted to, you could probably spend $30 or $40, depending on where you are and what your marketing is, to get in touch with this person. And that’s the way that you have to think about it. And it’s really hard, because usually you wanna go the cheapest route, but on multifamily… You’re gonna have to spend a little bit more money, but it’s gonna be worth it if you find even one really solid deal.

Joe Fairless: It is. And that’s the beauty of the larger deals. It’s worth it when you just get one… And it’s not only the transactional profits you get from that deal, but it’s what it sets you up for for future deals because you did that first deal. I love that thought process, and I was going to ask you per piece approximately how much it would be for a FedEx, but you’ve just answered the question… Which really is “That’s the wrong question to ask, Joe. It’s really about what’s the opportunity cost here if you don’t do it.” Because if you’re working with a broker, there’s nothing wrong with that. But if you are working with a broker, you’re gonna pay a commission, whereas if you don’t, then on a large property the seller saves the $100,000, but then you can build that into your offer, and then you can save some money because you’re saving them on the broker fees. That’s great.

So one challenge that a listener will come across when they implement this is single-family – heck of a lot easier to track down the owners and their address; multifamily – you get an entity that owns the property more of than not. Then you look up the entity address and it gets you to some whacky address… So how do you make sure that you have the best addresses to contact the owners?

Cory Boatright: Great question. The easy answer, but many may not have this access – but you could get it, depending on how much your persistence is – is commercial brokers have a service that we’ve all heard of, called CoStar (I know many of your audience has). CoStar has all of the addresses, all of the phone numbers of these owners, and that’s gonna be one of your easiest routes to go if you can work with a broker and they’re willing to basically pull that data out and give it to you. Now, of course, if you’re doing that, the broker is probably gonna say “Well, if you find a deal, I want you to work with me”, so there’s that side of it, too. But if you wanted to go the route and pay for your own CoStar – I believe it’s $25,000 to $30,000 a year, so that’s gonna be [unintelligible [00:19:00].23] evaluate there.

The other one is skip-tracing. Skip-tracing is easier with a single-family, because you don’t have to typically worry about companies. A lot of these owners have companies and LLCs and trusts and everything else that these properties are associated in and set up in… So you can have skip-tracing. Skip-tracing can help you tremendously. There are some back-and-forth on whether or not you can get a company skip-traced, versus an individual skip-traced, and the answer is you can, but it may cost a little bit more money because it’s a little bit more involved. They have to go usually to the Secretary of State, they have to go and see who is a registered agent, and those things. On  some of these you can’t see [unintelligible [00:19:50].20] if they’re filed in places where they’re hidden… So that would be something that you need to look into – skip-tracing, and certainly CoStar.

Joe Fairless: And what are some skip-tracing resources that you recommend listeners check out?

Cory Boatright: Sure. American Skip Tracers is a guy that everyone can go check out. I believe Tom Krol – I’ll give him credit for introducing me to him. He didn’t even know it, but he posted about him. Tom Krol is a great wholesale–

Joe Fairless: Yup, I had him on the podcast. Really good interview.

Cory Boatright: Yeah, great guy. Lots of great [unintelligible [00:20:25].04] in our mastermind group, Collective Genius. So American Skip Tracers… I think it’s called American Tracers, or American Skip Tracers. That’s one. There is another one that is called IDI. It’s gonna take you a little harder time to get that one set up, but that one is very, very good for pulling great information, and you actually get set up on your own FTP (File Transfer Protocol, for you techies).

And then Delvepoint is another one that’s gonna be a little harder for you to get set up, but Delvepoint has fantastic data as well, that you can look into.

Joe Fairless: Wonderful information. Taking a step back, what’s your best real estate investing advice ever?

Cory Boatright: Two – be persistent, and when everybody else quits, keep going. That’s on single-family. So I’m gonna divide it. On multifamily – slow down. The person that takes longer time and thinks through things, and isn’t in a hurry – they’re going to win in the multifamily game… Especially when it comes down to you actually closing. When you’re actually closing, the last week of your closing process means everything. With delays, or anything else – that last week is what it’s all gonna come down to. So taking time and being patient on the multifamily.

It isn’t like a hot potato, like me in the wholesaling business, where I get a property, and I essentially — I do wholesaling, Joe; so we call it real estate, but really it’s like the pawn shop of real estate. I get these properties for 25, 30, 50 cents on the dollar, 40 to 60 cents on the dollar using the Greater OKC area – that means a 100k property, I buy it between (the lowest) 25k or (the highest) 60k. I turn around and I sell it for a profit. But I’m really selling the contract. Someone is signing a piece of paper for 50k, I know Joe is gonna buy it for 70k. I give that over to Joe, and he pays me 20k. That’s really wholesaling.

Joe Fairless: Yup.

Cory Boatright: And multifamily – it is so completely different. It is all about due diligence. It is all about “Did you tell me everything that you should have with this whole process of going through–”

Joe Fairless: Which they didn’t. [laughs]

Cory Boatright: They didn’t. They never do, right? The person that’s more excited to close is typically gonna be the person to lose.

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

Cory Boatright: Let’s do it!

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

Break: [00:23:04].00] to [00:23:39].10]

Joe Fairless: Okay, best ever book you’ve recently read?

Cory Boatright: The best book recently?

Joe Fairless: Yeah, recently.

Cory Boatright: Recently… I read a book a week, so — I usually listen to a book a week on Audible. Modern-Day Jonah, which is Nathan Taylor actually sent it to me. I’m in the process of reading it right now.

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

Cory Boatright: Assuming my expectation was the same as the owner’s expectation.

Joe Fairless: Best ever deal you’ve done?

Cory Boatright: It had to be a short sale deal. I stumbled into it way back in the early 2008-2009, and it changed the trajectory of my life when I realized that banks were willing to accept less than what’s owned on the underlying debt. It changed my life.

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

Cory Boatright: Gratitude. I remind people every day that you take so many little things for granted. I started a thing called The Grateful Project through my — I won’t get into it, but I went through a personal episode of thyroid cancer at the end of 2012; it radically changed my life. And to this day, I post a reason to be grateful every single day. I wear this bracelet, The Grateful Project, which means everything to me. I think if you thought of gratitude as a currency, then you should really think about wanting to become a billionaire, because gratitude means everything, and it is the number one thing that will get you through life on the highs and lows.

Joe Fairless: Colleen (my wife) and I say what we’re grateful for before every meal, and one of Tony Robbins’ quotes that rings in my mind whenever we talk about this is “Trade your expectations for appreciation.”

Cory Boatright: I love that, man. I say in the shower every day – “My worst day is someone else’s paradise. My worst day is someone else’s paradise.”

Joe Fairless: It’s true.

Cory Boatright: I say it over and over again, and… Man, you get hit with different things in the day, and you’re like “Ugh..!”, but then you’re going “Well, it isn’t that bad.” It’s a good way to think about it.

Joe Fairless: How can the Best Ever listeners learn more about what you’re doing, and get in touch with you or your organization?

Cory Boatright: I love that. So just google my name, Cory Boatright… What’s really funny – if you google my name, it actually says “People that google you also google Joe Fairless.” It’s really hilarious.

Joe Fairless: Oh, yeah…! I’m glad to be associated with you.

Cory Boatright: Good company. And then I was telling you, Joe, we set up — because I’m on Facebook a lot, I like social media, and I’ve done that for a long time… So I set up a website called ApartmentEvaluator.com. And the only reason I did this is because people were just sending me direct messages on Instagram, Facebook, and emails, like “Hey, I got this apartment deal”, and they might give me four pieces of information. And this Apartment Evaluator is just a very simple — it asks a couple of questions, but it really streamlines things, and helps with organization.

Joe Fairless: Amazing. Yeah, I see it in here. It looks straightforward, and it looks like a good resource. Well, thank you so much, Cory, for being on the show and talking about your journey… Talking about specifically marketing and where you see your blue ocean strategy, and focusing on direct response marketing towards apartment owners, and how you’re going to specifically go about that process… And you’re already a general partner on 420 units, which we didn’t even talk about, but I’m glad that we talked about what we did, because this is very action-oriented for the Best Ever listeners, and it’s good because you’re coming from a wholesaling background on residential, where you know the marketing piece, you’ve got that down pat… And now someone like you, with your background and experience can turn on and transition into the multifamily space. So I’m looking forward to a follow-up conversation; a year from now let’s talk and see the results of what you’re going to be doing after you get all the research in, and do split tests and stuff.

Thanks for being on the show. I hope you have a best ever day, I enjoyed our conversation, and we’ll talk to you again soon.

Cory Boatright: Thanks, Joe. I really appreciate you.

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