JF2163: Anesthesiologist To Real Estate With Leslie Awasom
Leslie is the Co-Founder and Director of Operations of Xsite Capital Investment LLC. He is originally from Africa and in 2008 started as a healthcare provider and eventually found his passion for real estate. Leslie shares the lessons he has learned through some of the mistakes he has made during his journey.
Leslie Awasom Real Estate Background:
- Co-Founder and Director of Operations of Xsite Capital Investment LLC
- 3 years of real estate investing experience
- Bought first property in 2017 and in 2019 invested in a 192-unit apartment
- Based in Hanover, Maryland
- Say hi to him at: https://www.xsitecapital.com/
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Best Ever Tweet:
“Always be ready for changes because things don’t always go as planned” – Leslie Awasom
Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless. 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, Leslie Awasom. How are you doing, Leslie?
Leslie Awasom: I’m good, Joe. How are you doing?
Joe Fairless: Oh, I’m doing well and I’m grateful to have you on the show. A little bit about Leslie – he’s the co-founder and director of operations at Xsite Capital Investment, he’s got three years of real estate investing experience, bought his first property in 2017, and in 2019 invested in a 192-unit apartment community, he’s based in Hanover, Maryland. With that being said, do you want to get the Best Ever listeners a little bit more about your background and your current focus?
Leslie Awasom: Sure. Joe, by the way, thanks for having me here. So a little bit about me. I’ve been in the US for the last 20 years, came here from Africa 20 years ago, and in 2008, I started my career as a healthcare provider. I was there and I witnessed what was happening with the economy. I got to see some older nurses that I was working with lose a significant portion of their retirement as a result of the economic crisis of 2008, and that scared me and left a little bit of an impact on me. I wasn’t quite sure where to go or what to do, but at that point in time, I had made up my mind that I wasn’t going to find myself in the similar positions as those nurses.
So fast-forward a few years later after getting my masters and working as an anesthesia provider, I wasn’t really feeling like this is where I wanted my life to end. I loved the role that I was providing at that point in time, but I needed more. So I started just looking up and trying to read some articles about investing and other stuff, and I came across a book by Robert Kiyosaki called Second Chance at Your Life and Your Money; read the book and it really connected with me, my situation that I was in at that point in time, opened up my mind to the financial world and investing, in general. So from that book, I decided to take a plunge to educate myself more and then start investing in real estate.
So in 2017 I finally got the courage to purchase my first investment property. It was a rental, did the VRR model. It worked okay, made some errors right there with the first deal, but it worked great and it was a proof of concept for me. It showed me that I could do this, and I really, really enjoyed myself while managing the property and going through the renovation process. So that was the jolt I needed to dig in more into the real estate and keep pushing forward. So later on down the line I met my partner, Tenny Tolofari, and we connected on the real estate side and on finances and personal development, decided to partner up together and focus on multi-family investing.
So we started Xsite Capital in 2019, we started our meetup as well, started going out there, meeting people, connecting with other investors and other industry leaders like yourself, and in 2019, we were invited onto a 192-doors apartment community in Atlanta, which was our first investment; it went out great and this year we’re pushing forward. We now have another 49-unit on the contract that we’re currently in the raise portion for and hoping to close next month.
Joe Fairless: So the 192-unit, are you two the only general partners on that?
Leslie Awasom: No, we have senior general partners in the deal. We got invited on the deal as general partners, but we were unable to meet the requirements as far as the ways were concerned. A couple of our investors backed out at the last minute, so we ended up as limited partners on the deal.
Joe Fairless: In 2019 you had a meetup and also you started your company; that was after you did the BRRRR. Let’s just talk a little bit about the BRRRR, and then we’ll talk about some other things related to apartment investing… But with the BRRRR approach, you said it went well but you had some errors on it.
Leslie Awasom: Correct.
Joe Fairless: What were some things that you learned?
Leslie Awasom: I learned that you’ve got to do estimates the right way. You cannot be over-optimistic when it comes to doing renovations. When I got the apartment, the realtor was– he’s a nice guy, but just [unintelligible [00:06:45].18] and he was the one that really encouraged me to get the property, which I’m grateful for… But he was just throwing out numbers, which I went by and which were not accurate, and I ended up spending double the numbers that he was throwing out. He just looked at the condo and said– he doesn’t think we’re going to spend more than $7,000 for the renovations. I ended up spending about $14,000. Tried hiring one contractor, that didn’t work out, ended up firing the contractor, ended up having to take some time off of work to be the project manager myself, which worked out great and I really learned a lot with that process as well.
Joe Fairless: $7,000 to $14,000 budget to actuals, what was the difference?
Leslie Awasom: It wasn’t really an accurate estimate. It was just a guess, and that was one of the valuable lessons that I learned, that we have to treat this as a professional business and not just as a hobby. So we didn’t get a professional estimate right upfront. So we just went along with what needed to get done and brought a specialist to come in and look at that and give us an estimate.
Well, at least after the first experience with the contractor that got fired — because he came in and said he was going to do everything for $10,000, but then the first two, three days I was at the job site and he never showed up. So I ended up getting rid of him and then started doing it all on my own. I made some mistakes because there are certain things that I did twice that I could have done once, like doing the total breakdown and garbage disposal. I ended up doing one section first, then got to get rid of the garbage, then have to pay someone again to come and get more garbage from the other side. So just rookie mistakes, but I did enjoy the process; I like doing that.
Joe Fairless: As far as the contractor goes, knowing what you know now, how do you approach the contractor conversations when you’re vetting them out?
Leslie Awasom: Now, off the bat, I don’t do single families anymore; we now focus on multi-family, and for this, we piggyback off our property managers and let them do a lot of the bidding. But if I were to do it on my own, I would get professional contracting companies and get bids from at least three different contractors and sign a contract with expectations of what I need from my own end and have the contractor give me an expectation of what to expect through the contract. But in the back of my mind, always be ready for any changes, because things don’t always go as planned.
Joe Fairless: With apartment investing now, transitioning over to what you’re doing now – you’re a limited partner on a deal, so you personally invested in it. How did you qualify that deal? Because it sounds like that was your first limited partnership investment, correct?
Leslie Awasom: Yes.
Joe Fairless: Okay.
Leslie Awasom: So like I explained, we initially got invited to have a general partnership position, so I got to underwrite the deal myself; I looked at the numbers of the deal, I had studied– credit to you, Joe, because I learned a lot from reading your book on how to classify markets and find the right neighborhoods to invest in, and that is the same format we use as we move forward and select the market, to select the neighborhoods to invest in. So this deal is in Atlanta; very strong market. The numbers on the deal were solid. It’s a B Class asset, which is what we were looking at that point in time in 2019, with everything that was going on, with the call for recession coming and everything coming. So we were focused on trying to invest in a primary market, in a B and above asset, and we had that opportunity to. So I did underwrite the deal, the numbers made sense from a general partner perspective and a limited partner perspective, that we were comfortable putting in our own money in the deal as well. And we try not to offer anything to investors that we’re not comfortable with investing in ourselves.
Joe Fairless: Just looking at your experience over the last three years, what have been some eye-opening events that have taken place, one or two? Something like, “Oh, well, three years later, knowing what I know now, that’s surprising”?
Leslie Awasom: The first one was regarding that deal, we got caught up into the trap of focusing on finding a deal and thinking that once you have a deal, investors would show up. That is one, and the second one is just related to being afraid of certain things, having fear. A lot of growth has happened since I started this business as a person, and that is the one of the most important things I like about being part of the multi-family business. It’s not just about going out there and growing wealth, it’s about growing as a person. And a lot of that growth has happened from challenging myself to do certain things that I thought were scary at that point in time, and one of those things was sitting and talking to investors or putting myself out there to let people know what I’m doing, which is one of the reasons why we face challenges with raising money for that deal at first.
When we started, we initially spoke to a couple of investors and one of them said they were happy with the deal, they were going to put in some money; the others said the same thing. So we had promises of more than the amount of money that we thought we needed and we stopped raising, and now we’ve learned that you have to raise more than the amount that is required, just so if somebody backs out at the last minute, you have the capital to close as well. The other thing I’ve learned is in order to keep growing in life, I have to keep challenging myself to face uncomfortable situations, and that growth happens on a daily basis and I’m enjoying the process.
Joe Fairless: What are some ways that you educate yourself from a personal growth standpoint?
Leslie Awasom: I read a lot of books. I listen to podcasts as well.
Joe Fairless: We’ll get into some of your recommendations in the lightning round, I guess. So taking a step back, what is your best real estate investing advice ever?
Leslie Awasom: Get started. You’re going to have challenges along the way and you’re going to make some mistakes along the way; just learn from them. Don’t just jump into real estate because you think it’s a quick way to make a walk. It’s a long term business. If you’re really dedicated to real estate, get started, network with people, keep pushing forward and it’s all going to be worth it.
Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever lightning round?
Leslie Awasom: Yes sir.
Joe Fairless: Best ever book you’ve recently read.
Leslie Awasom: Best book recently read, I’ll have to say it’s The Compound Effect by Darren Hardy.
Joe Fairless: Best ever way you like to give back to the community.
Leslie Awasom: By educating others about what real estate investing is all about and showing them possibilities of what they could do for themselves if they truly believe in themselves.
Joe Fairless: What’s a mistake that we haven’t talked about already that you’ve made on a transaction?
Leslie Awasom: I’ll have to go back to the same BRRRR model that we did. Again, it goes back to working, trying to find contractors for ourselves. I had somebody come and do the job, and didn’t do it right the first time because I went for the cheaper option. I ended up going back to the person that gave a higher bid, and no doubt, did a better job. So sometimes cheap is not always better.
Joe Fairless: How can the Best Ever listeners learn more about what you’re doing?
Leslie Awasom: They can learn on our website, www.xsitecapital.com.
Joe Fairless: Leslie, thanks so much for being on the show talking about how you have focused on real estate investing for three years now, and the couple of deals that you’ve participated in. Hope you have a best ever day. Talk to you again soon.
Leslie Awasom: Thanks.
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