Anna is a full-time syndicator based in the San Francisco Bay Area. She’s the Vice President and business partner of Neal Bawa at Grocapitus. She also helps Neal in their sister company, MultifamilyU, which provides educational content on real estate.
Coming from a technology background, she is a nerd when it comes to data, processes, and systems. Today, Anna shares with us how they effectively use data to come up with decisions that make profits for their investors.
Coming Back To Real Estate
Being born into a family already involved in real estate, you’d think she would have entered the industry sooner. But instead, Anna pursued stage acting and later on decided to become a computer programmer to support her kid.
Following the tech crash in 2000, Anna opened up a photography studio. But she learned that her business had a scalability issue. Wanting to minimize the money she was paying in taxes, she got into real estate.
At that time, she made a 5-year plan to shut down her studio and become a full-time real estate investor so she can live the life of a digital nomad. She then met her current business partner, Neal Bawa, and she helped him by volunteering and providing value to his company for 9 months.
Working At Grocapitus
Anna spends her time underwriting multifamily deals. She loves mining CoStar for data. When it comes to the basic things she looks for in markets to invest in, she searches for markets in the Goldilocks zone for jobs, population growth, and crime information.
Typically, they look at hyper-focused neighborhoods with a median household income of no less than $40,000 a year. An unemployment rate of more than 20% than the of the city is considered a bad sign.
She gathers data from sources such as City-Data.com, Local Market Monitor, and Neighborhood Scout.
Markets that show a diversity of jobs are better for renters as they may find it easier to find work.
Investor Sentiment In COVID-19
There is still interest in investing in multifamily properties because those properties aren’t losing money. With the government helping people, they have been able to collect rent.
Also, people have a different mindset compared to the 2008-2009 recession. As most do not want to risk exposing their parents to the virus, a lot of people have rented out units instead of going back to the family home. This led to Grocapitus’ properties reaching 98% occupancy.
Financing During A Crisis
The current debt market is very challenging. Since most would probably not be able to make money on their properties for the next 12-18 months, Anna suggests doing new construction loans instead of doing a value-add.
Most syndicators are holding on to their funds and are focused on capital preservation. This led to smaller projects getting better leveraged than bigger projects.
It’s important to think creatively and offer lots of exit strategies for investors. An example is making 8 quadplexes which could be sold separately instead of one 32-unit building.
The Power Of Data
As the asset manager of Grocapitus, Anna is involved in their operations and in the management of their ongoing projects. She’s very particular about analyzing the data they get before deciding what they should focus on.
Their property managers are required to fill up their trackers with information such as occupancy, notices to vacate, and which marketing brought in leads. They also have an efficiency center team, which creates campaigns for their properties.
The company’s process enabled them to multiply the number of leads they got, which then led to increased occupancy rates and increased rents. Overall, they were able to improve their bottom line and grow the value of their properties.
Right now, there’s a huge advantage for those wanting to get into multifamily investing compared to 6 months prior. So educate yourself, practice your underwriting, and build a team. Then find a market to get into.