This podcast guesting Neal Bawa is hosted by Brian Hamrick of Rental Property Owner & Real Estate Investor Podcast

Applying Data Science to Markets, Multifamily, and Property Management with Anna Myers

by Anna Myers | Rental Property Owner & Real Estate Investor Podcast

Speakers: Brian Hamrick and Anna Myers

Anna:  The market cap rate is going to do what it’s going to do, but that’s where our data science comes in to choose the best markets that we can possibly choose because we’re going where there’s jobs. We’re going where there’s population. We’re going where the underlying fundamentals are more stable.

Brian:Hello, and welcome to Episode 179. My guest today has been investing in real estate since 2006. She is an Airbnb Super Host and she also cohosts a real estate investor Meetup Group in the San Francisco Bay Area with over 800 members. On top of all that, Anna Myers is a data scientist who has applied her technology skills to analyzing multifamily deals. She also teaches underwriting for MultifamilyU, an apartment and investment education company.

Anna is also the Vice President of Grocapitus, and she and her partner have acquired 500 units of apartment projects in 2018 and she’s on track to add another 300.

Anna, thanks so much for being on the show today.

Anna:  Thank you, Brian. It’s great to be here with you.

Brian:  Why don’t we just start with you telling us a little bit about yourself.

Anna:  Sure. I’m going to start at the beginning. Many people ask me how did I get involved in real estate? That story actually starts before I was born with my grandfather, who was living in Florida, Tampa, Florida, and saw things that were really shaken up in Southern California. This was in the ‘30s, ‘40s, that timeframe. He actually sold everything he had in Tampa, Florida and moved west. He started doing real estate. He actually was flipping houses in Southern California because that’s where—he didn’t really have any money, so he did what we all do now, right? He started flipping houses.

Brian:  How long ago was this?

Anna:  This was in the ‘40s that he was flipping houses in Southern California.

Brian:  In the ‘40s?

Anna:  1940s, yes.

Brian:  Oh, wow, okay. He’s one of the pioneers.

Anna:  He was a pioneer. I mean, people think, he was doing what? Yeah, he was flipping houses a long time ago. And he built that up into a commercial real estate empire, really, in the long run. He was definitely a very strong entrepreneur and I take that from him as well.

What he built it up into is he started buying Walnut Groves and Orange Groves and building shopping malls. He certainly came a long way from flipping. We had a commercial real estate office, so when I was born and raised into this family, he had already accomplished all this. We had a commercial real estate office. My father is an architect doing commercial real estate projects. My uncles are both in the business as well, so everybody was doing it. My cousins were all working there. This was the fabric of my upbringing, was commercial real estate.

What I did, being the youngest grandchild, is I actually went into computers. I wasn’t really that interested in real estate at the time. Computer programming was just really taking off and I’ve always been a very strong problem solver, so I thought that was a great way to go. I started down that track and not in real estate.

Now, another thing that happened to me very young in life that propelled me forward into programming, is I had a child. I was a teenager, I was a single parent. Did not have any help from the father of the child and I needed to get myself through college, because I was a very serious student at the same time. I chose programming because I could earn a very high hourly rate two days a week and go to school three days a week.

Again, entrepreneurial, I figured out how to put myself through school as a single parent and provide for my child. That developed into me going through school. I got my Master’s of science and information system, as well as an MBA degree, started working at Sybase and some of the big companies as a programmer, became a systems architect.

What happened in the IT industry is everything was going gangbusters. I was really excelling in that career and again, as an entrepreneur, I had my own business, was working as a contractor making great wages. My husband at that time was also in IT and we were both doing really well and then for those of you that don’t know, the IT industry crashed in 2000. We talk about real estate crashes in the real estate industry, but what happened in the IT industry is it crashed.

The money that I was making, they wanted to offer me a third of the money that I was used to making as a contractor and I said, “No, thank you.” What did I do? I stopped working at the big companies and continued working in IT just for myself for small companies and I opened a photography studio, because I’ve always been passionate about photography. I’m one of those people that has a very strong art side, as well as a very strong science side.

I love both directions. I opened up a photography studio, ran my own company there. I had virtual assistants that I was working with and those were designers and retouchers that were in Russia and the Ukraine, as well as studio manager.

Where this took me was I became a very successful photographer in the Bay Area. What happened? Just what happens for any entrepreneurs that are making great money. Uncle Sam comes and takes what seems like a very unfair share of it.

What I realized I needed to do was to invest in real estate to help get me back on track with my taxes. In 2006, I started investing in real estate and that helped tremendously. I started buying single family homes. The thing that was unfortunate, is that that was the top of market, so there was an estate for my grandfather that needed to be—it was basically a 1033 that came from his estate, not a 1031, I had a 1033. We had two years to complete our transactions and the date that we had to complete those transactions or pay taxes for our portion was December 31, 2007. Think about that timing.

Brian:  Yeah. You’re forced to basically take your grandfather’s trust money.

Anna:  My portion of the certain part of the trust, yes. They were selling a shopping mall, yes.

Brian:  And you have to find suitable investments, but you were investing right at the top of the bubble market.

Anna:  Absolutely. Their timeline wasn’t such that we could push it off. If we were going to push it off, then I would’ve had to pay taxes on that. I had to pay top of market and as we all know, what happened immediately after that is a free fall in the real estate industry. Some of those investments that were the long-term holds, two of those succeeded and those were in much stronger markets of Portland, Oregon. One of them was in Diamondhead, Mississippi, which I thought was a great market, based on the research that I had done, but it was not, and that one fell apart. As well as a land deal that I was working in in Las Vegas—or sorry, in Reno. That one also fell apart.

I had to do a short sale in Diamondhead, Mississippi. Lost a lot of money in Reno dealing with a scumbag of a broker who actually ended up in jail. So, I had quite a few lessons through those years and honestly, was a little gun-shy to get started again. The short sale also kind of took the wind out of my sails in terms of investing with my own money because my pristine credit score was now not looking so good after the short sale.

Fast forward. I still had the real estate, so my taxes were still doing pretty good, but what I realized in my photography business was that photography doesn’t scale. I was looking for a career that would give me retirement and photography was not going to be that. Again, even though I was a very successful photographer in the San Francisco Bay Area, I realized looking at my numbers, there’s no future to this. I can’t scale myself.

I made the decision to scale back my photography and put together a five-year plan to exit into real estate. I started educating myself, going to Meetups, watching webinars, doing all that stuff. Listening to podcasts, like Bigger Pockets, and networking with people. Through that, I successfully was able to exit out of my photography and now I’m a full-time syndicator in the Bay Area buying apartment buildings.

Brian:  Wow. That’s quite a story, an impressive story with many ups and downs.

Anna:  [Laughs] Yes.

Brian:  I’m curious, because one of your parts of your bio is you’re a data scientist.

Anna:  Yes.

Brian:  I’m wondering how that applies to investing in multifamily and apartments.

Anna:  Absolutely. Again, my background in information technology, coming up through the ranks, becoming a systems architect, that’s just the way I think. I think it’s always like data and numbers and how different variables relate to each other and how to optimize systems. That’s just my makeup.

I bring that to real estate in that even before I was doing multifamily, I was analyzing markets and always had like the most extreme spreadsheets that you could ever imagine that was looking at markets, trying to understand the best places to invest.

Now, with more education, mentoring and partnership, I really honed those skills to understand what are the variables that I need to be looking at to find the best market. There’s things that we do in multifamily, we’re looking at specific metrics to find where, for example, where is population growth, where is job growth? We look at rent forecasts, we look at the market cap rates. We’re looking at valuation of real estate, for a forecast for future rents, lots of different things. We mash those all up together and that is how we pick our markets.

When we’re using data science to choose markets, we’re using other people’s money to purchase apartment buildings, so there is a much higher demand on our side that we have to really know our numbers, so our investor’s money is protected.

Brian:  It seems like you’ve taken a really systematic approach in getting into the real estate market and choosing multifamily.

Anna:  Yes.

Brian:  And then also, you partnered strategically.

Anna:  Very strategically.

Brian:  Which is what allowed you to grow so quickly, and we’ll get into that in a moment. But can you just kind of take us through that process. You realize as a photographer that you couldn’t scale, you couldn’t retire on being a photographer, so you knew you needed something more. You did the seminars and the Meetup Groups. But how did you bring that systematic approach—or how did that systematic approach bring you to the realization that okay, multifamily and apartments, that’s the way to go.

Anna:  Well, again, it goes back to scalability. I was looking at doing single families and maxing out the own 10 single families on your own credit, that type of thing. My credit had gotten repaired at this point. My husband and I both had excellent credit. We both had set up our—he was working a W2 job. My income from my photography studio was very high, so we had set ourselves up so we could purchase using our own money, more assets.

But the more I started going out there and looking at it, the numbers were just not going to get us where we needed to go. What I realized is, multifamily is where I need to go.

Here’s where things really made a difference. Once I started looking at multifamily and realized it’s not just about scalability, that you have more doors that’s under management by a property manager, so there’s potentially less work for the owners because your property manager is on site managing your building. That’s one beauty of scaling up.

But the true beauty of multifamily is the valuation of the asset is all in the numbers. The way you value a multifamily property is looking at the net operating income and dividing it by the market cap rate.

If you’re buying single-family homes or small multis that are under five units, the way you evaluate the value of it is you look at what your neighbor sold their house for. That’s not where I want to be. Again, I’m a numbers person. I want to have much more control over my investment, over the future of my investment than what my neighbor is doing with their property.

When I figured that out about multifamily, that was just like the golden trigger for me and I was like, absolutely. I am not doing anything else other than this type of investing, where I have the ability to control the income, by pushing the rents, or adding other income sources. I have the ability to control my expenses by finding different vendors or lowering expenses in various ways. Thus, I can control my net operating income because net operating income is your operating expenses—sorry, your operating income minus your operating expenses. I can control that.

The only thing I can’t control is the market cap rate. The market cap rate is going to do what it’s going to do, but that’s where our data science comes in to choose the best markets that we can possibly choose so that even if the market is fluctuating, the market could be fluctuating nationwide, which isn’t always common. It’s more common for markets to fluctuate on their own versus a nationwide recession that we just experienced. The market cap rates will be supported by the data science that we put into our research.

There will be some ups and downs, but hopefully less, because we’re going where there’s jobs. We’re going where there’s population. We’re going where the underlying fundamentals are more stable.

Brian:  A couple of things there. One is, you hit the nail on the head. The ability to force appreciation when it comes to multifamily and commercial apartments. That’s a strong, powerful thing. That once you’ve realized how that works, you can make a lot of money.

Anna:  Right.

Brian:  Also, I agree with you very much that real estate is local. We know that we’re headed toward another recession. I mean, you’re a data scientist, I’m sure that you’ve followed all the economists who are saying, probably by the end of this year, 2020, 2021 at the latest.

Anna:  2020, yes.

Brian:  We know we’re heading into another recession, but every economist I’ve heard who has said that has said, “It’s going to affect different areas differently.”

Anna:  Absolutely.

Brian:  Now, you’re in the San Francisco Bay Area, which many believe is a bubble market, but it doesn’t sound like you’re investing there. You’ve pinpointed other markets around the country.

Anna:  Correct.

Brian:  Can you talk about that? Like are you investing in San Francisco, first of all? And whether you are or not, where else are you investing?

Anna:  Sure. We operate out of the San Francisco Bay Area, but we do not currently invest in the Bay Area. In fact, none of our assets with Grocapitus are held in California and none of my personal assets either. I’ve always invested out of state. Even in 2006, I invested out of state. Other than my primary house, I’ve never bought anything in California.

I became pretty good through the years—that’s, I guess, where the spreadsheets came in. I became pretty good at analyzing markets. Even, I mean, now I look back on it and I realize I really didn’t know what I was doing, but I was on the right path. Where do we invest—how do we do that now? Again, by looking at all the market data that we get through paid resources, as well as free resources. I do a big mashup on spreadsheet.

Then when we are investing in apartment buildings, I’ll focus on that, it’s true for my non-apartment buildings as well, it’s all about having a team on the ground. Talking about our apartment buildings, we partner with people that are our boots on the ground and these are operating partners that have close ties with brokers in the area. Many of them are finding off-market deals and they are getting under contract with 150 to over-200-unit buildings. They’re great at that part of it, but they don’t yet have the network of investors that they can bring the money to the deal. That’s where Grocapitus comes in.

We’re able to not only bring the equity side, so we come on as equity partners and bring in the equity, but we also stay on the deal. We just don’t put money into the deal, we stay on the deal and we apply our data science to optimize the running of the apartment building.

Now, clearly, the property manager is running the building, but we’re managing the manager and where the asset managers, along with our boots-on-the-ground partners for this building, for the duration of the time that this project is held and we’re optimizing and using systems and processes in the background. We’ve got virtual assistants that we use. We’ve got lots of different technology hacks that we use to keep our occupancy up and keep our expenses down.

This translates to a much better return for our investors.

Brian:  I’m dating to know how data science is helping you optimize, but I’m sure our listeners are dying to know where you’re investing, as well.

Anna:  Okay. Right now, we love markets that have strong population and job growth, as I said, but we’re also looking at the valuation to make sure they’re not overvalued.

Markets like Atlanta, we’ve got two properties we just purchased in Atlanta. If you look at that market, tons of stuff going on in that market, but the value, the home values, are in alignment with what I call the economic engine of that metro. It is not an overpriced market in terms of housing, which many people find surprising because you hear, Atlanta, Atlanta, Atlanta, but the valuation is on par.

Another place that we are investing is Jacksonville, Florida. We just closed a property with our operating partners there last week.

We’re also in Tucson, Arizona, another very strong market that represents, I think, one of the opportunity markets that we’re really focused on right now. Tucson, Arizona, many people are surprised to find out it’s number three in rent growth over quarter, so it is a very strong emerging market. It also has job growth of 3.1%. The national average, by the way, is 1.6, so almost double the national job growth.

People are like, “Tucson?” I’m like, “Yeah, Tucson. Tucson, Arizona. Big things happening in Tucson, Arizona.”

Now, this is a great example of a market that is benefiting from a neighboring powerhouse market. That neighboring powerhouse market for Tucson is clearly Phoenix. Phoenix is a market where the cap rates are really compressing. Phoenix has been doing very well for very long. Our metrics show that it’s doing great, but the cap rates are getting really compressed there. People are now moving to other markets or looking at nearby markets. Tucson is one of those.

If you look at Austin, San Antonio is in the shadow of Austin, benefiting from Austin. Sacramento is in the shadow of San Francisco Bay Area.

You can find these markets kind of all over, that once the main market is overheated, the little brother and sister-markets start to get that uptick going on.

Brian:  That is a fantastic breakdown of different markets that you’re investing in and specific reasons for why you are there. You obviously are truly a data scientist. Thanks for sharing that.

Anna:  Yeah. You want me to throw one more your way where we’ve had tremendous success as well?

Brian:  Yeah, absolutely.

Anna:  Another one that we just invested in, we closed in November of last year, is an area called Dalton, Georgia. It’s about an hour from Atlanta. It was found by one of our—it was an off-market deal found by one of our operating partners that lives in Atlanta and it’s actually in the metro of Chattanooga. It’s Chattanooga, Tennessee metro but it’s right outside of Chattanooga, Tennessee and technically is in Georgia. That is an area that’s experiencing rapid growth. There’s a triangle there between Chattanooga, Birmingham, Alabama, and Atlanta, that is just experiencing tremendous growth. A lot of it having to do with transportation and manufacturing logistics.

The Port of Savanah has an Appalachian Regional Port where there is a train that runs from the Port of Savanah up through those areas and it ends right near Dalton, Georgia. This is really changing the way that goods are able to be transported because they can transport them directly to the ships and the big cargo ships are coming in now to Savanah.

You can imagine how that can really translate into jobs and goods and services. Looking for things like that that are happening, so it’s not just data, it’s also looking for opportunities and path of progress. We bought that property in November and that thing, it’s like we can’t—the occupancy, it’s 98% occupied with 99% pre-leased. We keep pushing the rents on it. It’s just crazy. The opportunities, when you find them, are wonderful.

Brian:  Yeah, being in the right market can make all the difference.

Anna:  Especially for our investors and I want to reiterate that, that we feel this extra level of due diligence that we do, this discipline that we apply to our investing, really goes back to we’re using other people’s money. They’re partnering with us on these deals, so we spend a lot of time, obviously, in making sure we get it as right as we can and we’re able to show the numbers, like here’s why we like this market.

A lot of people bring deals to us, operating partners, they want to partner with us because of all the data science, the optimizations that we bring as partners, they want that. But we turn away most of the deals people bring to us because they don’t match our market. They don’t match our brand. We’re like, “I’m sorry, that deal just doesn’t pan out for us. It might work for you, but that’s not going to work for us.”

And by the way, Brian, you are in a great market, Grand Rapids, Michigan.

Brian:  Yes, yes. And that’s why, I mean, I know firsthand how being in the right market can make all the difference because our properties have just—they’ve been so strong because the market is so strong and there is such a demand for housing here.

Anna:  Yeah. You’re in a great market. We really like Grand Rapids, Michigan.

Brian:  Yeah, it’s hard to get into it now. [Laughs] That’s for sure.

Anna:  It’s very hard to get into it. We might have to partner with you on something in there, Brian, because it’s very hard to get in there, but we really like your market.

Brian:  Absolutely. I wanted to get back to how you’re using data science to optimize once you’ve acquired the property, how you’re controlling expenses and increasing income using your techniques.

Anna:  Okay, great. I’ll give you one example, which is pretty full-fledged. Of course, we have a lot of secret sauce because if everybody was doing it, then it becomes less effective. So, I can’t give you the detail-details, but I can give you the highlights and you’ll understand where we’re going with it.

We call it mega marketing. I’ll just tell you about this one thing that we do. When you have an asset that’s being managed by a property manager, they are typically  using some software, AppFolio, Yardi, whatever they’re using, and those software tend to have an automatic, like push a button and this will create advertisements on various websites and thus you will get people calling you or emailing you with leads into your apartment building and that’s how the property manager then fills the apartments that are vacant, by working those leads.

Well, with AppFolio, they might be getting 20 leads a week. By the way, we track all these metrics extensively when we have an apartment building. We have a very extensive dashboard that our property managers have to fill out every week. They’re providing to us the data from their underlying database and then we’re able to translate those into understanding the trends.

But back to mega marketing. What we do is we have—first of all, we have virtual assistants. We have kind of an army of virtual assistants. These are people in the Philippines mostly, that have been well-trained on how to do these things that we do and what they do is they create various forms of advertising and can’t go into the secret sauce of it and what happens is, that lays on top of what the property manager is doing.

The property manager might be bringing in 15-20 leads a week based on the button they pushed in AppFolio. Once we layer on top our mega marketing, we can add anywhere from 50 additional leads a week, to we have one property that without even being optimized, 189 leads came in in a week from our mega marketing.

Brian:  Are these quality leads that are the type of demographic that you’re—

Anna:  They are just as much quality as the other leads that are coming in from AppFolio. It’s a number’s game, right? You need leads to create applications and shows. In order to get people to show the apartments to, you’ve got to have leads. We look at that number. How many leads does it take to result in shows? How many shows does it take to result in applications? How many applications does it take to result in leases?

There’s all those relationships in between there. Again, data science, and then we’re always trying to push those numbers.

But you can imagine, if you have 15 leads, which are common, and then suddenly, now you’ve got—call it 200 leads a week. First of all, we need to add an extra telesalesperson, because that’s too much for the property manager to handle by themselves. You have to add an extra service in there, but the cost of the service is low, because typically we’re using virtual assistants, we’re outsourcing that to handle the emails and phone calls so that they are responded to immediately. You can’t let a lead go cold for two days and then translating those into shows.

Yes, they are quality. They’re not quality if you let the lead go dead. What happens when you’re on the internet and you ask a question. You want your answer now. You want your answer within five minutes. You don’t want two days later they call you back. You’re doing something else, you’re like, “Yeah, I needed that then, I’m over you now.” A lot of it has to do with timing, so it’s kind of like a whole package.

What happens in this is we’re able to increase our occupancy, so we’re driving our occupancy numbers up because of how many leads we have coming in. We’re able to pick better tenants because we have way more to pick from and then we’re also able to push our rents, because again, we got so many people on a weekly basis, so we’re creating a demand that’s so high.

You can see how this can really lead to much more income and much more stable income over time for an apartment and especially because we’re tracking it, all of the metrics are being tracked on a weekly basis. It’s not just, “I’ve got 200 leads coming in,” that’s great. You’ve got 200 leads coming in, how are you processing them? How many of those are turning into shows and over which channels are they turning into shows? Why aren’t these ones turning into shows. We really kind of manage our property managers and our telesales people to really hone them, to focus on the trends and always, we’re trying to improve on those trends.

Then bottom line, it’s just better for investors.

Brian:  Do you have any examples of how you’re using data to help control your expenses?

Anna:  Well, first of all, our virtual assistants are taking over quite a bit of the back-end tasks and they are a much lower cost than somebody that may be local. So, right there we’re paying $4-5 an hour for somebody that—by the way, is an extremely smart person that just happens to live in the Philippines and the cost of living is so much lower there, where the $4-5 an hour is a great rate for them. That’s a good wage for them, but if we were paying somebody in the U.S., it would be a much higher rate to get somebody, especially that’s as qualified as what we can get in the Philippines for a much lower rate.

Using those types of systems, we’re able to lower expenses quite a bit. Wherever we can fit in an outside person to do the job and lower that cost, that’s been a great thing.

We can even use them to help with some of the processing of construction. When we have renovations going on, they can be managing some of that via spreadsheets and take off some of the personnel that reducing the cost of the overall project.

Brian:  I want to find out from you how you did this because you were telling me before we started rolling here that you acquired 500 units last year starting in September of 2018.

Anna:  Correct.

Brian:  What did you do to grow so quickly? You acquired 500 units in 2018, you’re on track to do 300 units so far this year, 2019.

Anna:  Yes, in the first quarter, yes.

Brian:  The question is how? How did you do that?

Anna:  [Laughs] A year ago, I actually took a bootcamp again. It was early 2018, because I’m not sure when this is being broadcast. In early 2018, I was all about multifamily and I was like, I’m going to educate myself because that’s where I know I want to go.

I took a bootcamp with somebody who I had seen speak at conferences named Neal Bawa. I’m like, you know, when that guy spoke at the conference, he was all about data. Like I totally get him, like the way he thinks, the stuff he was presenting, that resonates with me so much. I’m going to pay for his bootcamp.

I took his online bootcamp, it’s an e-bootcamp, so it’s live and you log in and he’s teaching. He’s a very dynamic, charismatic person. He’s teaching, he’s showing the slides and teaching the curriculum and then you’re online with people from all over the United States, which is pretty cool.

I take this bootcamp and during that bootcamp, he asked for—he said, I need volunteers to write a deal analyzer. I virtually raised my hand like really high. Like, excuse me, me! I’ve got a background in financial programming, etc. In my one-on-one call with Neal, because he includes that when you sign up for the bootcamp. You get a one-on-one coaching call with him, and I said to him, “I want to reiterate, I volunteered for that project and I want you to know a little bit about my background. That I led remote teams of programmers worldwide. I think I would do a good job being on your team. And he said, “Great! You’re the lead.” [Laughs]

So, I was like, okay, okay, I’ll lead the group on writing this deal analyzer. I was leading this group of people. Some of them had no experience with Excel. Some of them had no experience with underwriting. I was running the meetings and leading that group to try and produce what we were supposed to end up with, sending Neal update emails to say, “Here’s where we are. Here’s things that are going on in the group, some personality conflicts, blah, blah, blah.”

After two weeks of me interacting with him in this way, he emails me back and he says, “I don’t care if the deal analyzer ever gets made, I want to work with you. I like the way you think.” I was like, oh, wow.

I was still running my photography studio then. I started taking on more volunteer projects for Neal and in a matter of a month or so, he said, “Yeah, I’m offering you this job as my lead underwriter.” So, I took the job as the lead underwriter, and I was still running my studio at the same time. Then the job developed more into being—you have to understand, my background as an entrepreneur was what also gave me a leg up in this situation. Neal had just transitioned out of a partnership company and started his own company solo and he, unbeknownst to me, I didn’t know at the time, that he needed an underwriter. I fit the bill, but also because of my background of running my own business for decades and knowing like marketing and all that stuff it takes, I wasn’t a really good fit to step into that role in his new startup.

An amazing person to partner with. We started buying apartment buildings together in September of 2018, acquired three properties by the end of 2018, that was, I think, 541 units. And then since the beginning of January and February and March of 2019, we will have 750 under our belt as of early March, over five projects.

During that time, I have gone from being a volunteer to now I’m the vice-president of the company. Quite a transition. Quite a lot of momentum on many fronts.

Brian:  That is a fantastic trajectory.

Anna:  Yeah!

Brian:  A year ago, you were still doing your photography.

Anna:  And real estate on the side. I mean, I was doing photography three days a week and I had carved out two days a week from the studio that I was not shooting, that I was focused completely on real estate. If photography was three days a week, that left me four days a week, because I was working seven days a week. Four days a week, I was dedicating to real estate and managing my own portfolio and pushing myself to do things like get involved in Meetups, do more education. I was spending the majority of my time pursing my new path.

Brian:  I think the key term there is pushing yourself.

Anna:  Yes.

Brian:  You were pushing yourself and putting yourself out there by raising your hand.

Anna:  Neal Bawa, yes.

Brian:  With Neal Bawa, yeah, he took notice of you and now you’ve partnered with him on 8-900 units. That’s fantastic. That’s how things happen.

Anna:  Right.

Brian:  And those strategic partnerships are what can really help you just leapfrog into a much better position than where you start.

Anna:  And at the time that he was first partnering with me, I didn’t have 500 units of multifamily under my belt, but I brought to the table what my skillset was, which at that time was a very strong data science, because I’ve been a data scientist my whole life, so I brought a very strong game and he took me on at first, kind of mentoring me, but I didn’t go to him and say, “Will you be my mentor?” I added value to what he was looking for and the relationship developed from there.

But I never would’ve thought when I started that bootcamp, I would be partnered with Neal Bawa and the Vice-President of Grocapitus a year later. That never would’ve occurred to me. But I’m a very hard worker.

Brian:  I know you are an instructor and you teach underwriting. Can you tell us about being a trainer and the type of students that you actually teach?

Anna:  Sure. I am now the—I teach the underwriting portion of that Multifamily Bootcamp that I first took. I also teach on a monthly basis. I teach a webinar that’s kind of an intro to underwriting to give people a flavor of what’s included in the bootcamp.

In the bootcamp, we assume people don’t really know much, and those that know much, they’re also going to learn a lot. We talk about cap rates, what is capitalization rate, why is it important? And the trio that I find so intriguing, which is the net operating income, the cap rate, and the purchase price and the relationship between those.

I mean, I think it all starts there and people really understanding that relationship and the power of that relationship and how if you know two of those things, you can figure out the other one. That’s extremely powerful.

Then going on from there, what I really like people to understand is that again, it goes back to that net operating income, that in multifamily, if you’re able to push your rents—for example, if we have a 200-unit building and we’re able to increase the rents by $25 across the board and say the cap rate for that market is 6%, we’re actually adding $1 million in value to that building.

It’s phenomenal, the trajectory that you get, by just a simple thing like $25 a month. When people realize that, that’s where the magic is.

However, as a conservative underwriter, I also make sure people know it also works the other way, so on the expense side, if you’re not operating income, if you’re not watching your expenses and your expenses are going up, so your net operating income is actually decreasing, then the same magic occurs in the opposite direction.

You really have to understand your numbers. Actually, I created a game to get people interacting with an underwriting spreadsheet that helps them understand, if this happens to you, if your insurance goes up—which is an expense item—this is the bottom line that it’s going to have on your cash-to-cash returns, your internal rate of return, and your equity multiple.

I like making games and making underwriting very visual for people because my background, again, as a visual artist and a visual designer coupled with a scientist, I think comes in really helpful when I’m teaching people. I try and translate information into a very visual, accessible method for people to really understand what’s going on with analyzing a deal.

Brian:  I think the information you just gave out and the examples of how you can raise the value of the property so substantially, half our listeners probably are with you, half of them are like, wait a minute, I’m not quite sure how that works.

Anna:  Right.

Brian:  That’s why it’s so important for people to understand the valuation process and when it comes to commercial multifamily, just how you can add value to a property is magic in a way, but it’s real. I’ve done it, you’ve done it.

If people want to take your training, is it available?

Anna:  Sure. We teach quarterly, so once a quarter,, three of those sessions are taught as e-bootcamps. That’s like the one I took, where it’s live online and you’re logging in from wherever you are in the nation for six or seven—we keep expanding the content, so now it’s gone to seven sessions, two-hour sessions over a two-week period. If you miss a session because you might be at your kid’s PTA meeting or something like that, then you just watch the replay.

What’s cool is that you have access to that information. You’ll always have access to those videos.

So, we’re teaching syndication, we’re teaching you how to buy apartment buildings, even if you don’t want to syndicate, you’re going to learn how to pick the best markets. We didn’t even talk about neighborhoods, but we have methods that show you how within the best market that you’ve chosen, how to you find the best neighborhood that is actually the path of progress neighborhood and we use free tools to show you how to do that.

Beyond that, we’re teaching you how to obviously evaluate the deals, how to talk to brokers, which for new people, they’re like, “Brokers keep hanging up on me. Every time I call them, they’re like, ‘If you don’t have money for this deal, I don’t want to talk to you. Show proof of funds.’”

We actually model a live broker call in the bootcamp where the broker doesn’t realize who Neal is and it’s a real call with the broker that he’s on the phone with and he doesn’t tell them about his own portfolio—which, by the way, is over 1,800 units—but he acts just like somebody that just be like somebody in the bootcamp, that doesn’t have any units yet. But he uses key words and so it’s a way that the bootcamp students are watching and listening to him and the way he answers questions and the things that come up. The guy never asks him, —or the broker on the other end, which tends to be a man, very seldomly is a woman, that thy never say, “Where’s your proof of funds,” because of the things that Neal says to them. Again, we’re teaching our students how do you talk to brokers?

We also teach our students how do you get the best property managers, which is a very key player in your apartment building. If you don’t have the right property manger on your team, that’s a problem. We have a very rigorous set of information on how to pick the best one.

Again, we’re data scientists, it’s all systems and processes, but we have—it’s a 90-minute interview that we put each property manager through, and we have a way then that you look across the interviews that you did and easily select the best one.

All of these are the types of things that are taught in the bootcamp and it’s taught quarterly one time a year and it’s a physical bootcamp because some people just prefer being face-to-face and that is typically held in the San Francisco Bay Area.

Brian:  Once again, can you repeat how people would access more information on this?

Anna:  Sure. is the main website, and then /bootcamp or /ebootcamp. Typically, if you go to the front page, MultifamilyU—just the letter U, not Y-O-U,, there’ll be a link, a clear link, from there on how to get to our bootcamp offerings.

If, by the way, here’s a tip for you guys, if you engage in our content, our webinar content that is on that page, there’s often a discount code at the end of one of our webinars. It’s also a great way for you guys to engage with our content, understand the level of content that we’re delivering. Of course, in the bootcamp, it’s a lot more information that we’re delivering, but you can kind of sample us and say, “Do I understand these people? What’s the quality level?’ Wait until the end and you’ll see, typically, a handsome discount code.

Brian:  Nice, okay. Anna, as we wrap it up, I’m wondering if you have any final thoughts for our listeners. I mean, you, certainly a year ago, were kind of at the beginning of this process and here you are, 8-900 units later, basically Vice-President of the company, teaches the courses—yeah. What advice would you have for our listeners?

Anna:  Well, I guess I’d say don’t hold back. Bring everything you can to the game and have laser focus. Really be focused on the results and keep going at it. I set a plan, a five-year plan, to exit and along the way, I was thinking, you know, it’s not going to happen. I’m not moving fast enough. This isn’t happening fast enough, but I kept dedicating myself to achieve that goal and pushing myself and networking and doing everything anyone would tell me. I’d say, “I’ll do it. I’ll try it.”

Then of course, using my own head to think through and process everything that I was being told. Lo and behold, my plan successfully ended in five years. I closed my photography studio and I’m now 100% commercial real estate syndicator in the Bay Area.

Brian:  Anna, thanks so much for talking with. Congratulations on your much-earned success.

Anna:  Thank you, Brian.

Brian:  Really enjoyed the conversation, thank you.

Anna:  Thank you so much. Thanks for listening, everybody.