Michael Blank, author of Financial Freedom with Real Estate Investing

Financial Freedom with Real Estate Investing by Michael Blank

Happy #Well-TailoredWednesday! In my crusade to learn more about real estate, I just finished reading Michael Blank's newest book, Financial Freedom with Real Estate Investing. Michael is a reputable real-estate investor in the DC area who came from a W-2 background as a software engineer and who achieved financial freedom through, you guessed it, real estate. I'm a big fan of Michael's work, which includes a podcast, events that he organizes and hosts, and an Excel model that I currently use to analyze prospective multifamily deals. I'd encourage everyone to check out his material after they read this book.

A Real Guideline to Real Estate

Michael doesn't mess around when he writes that this book is a "blueprint to quitting your job with real estate". The book is structured as a clear guideline on how to take a property down. To Michael (and to a large portion of the real estate community), the quickest way to achieve financial freedom is through buying large apartment buildings. Michael starts the book by sharing his background and dispelling some of the myths as well as benefits of buying large apartment buildings. He then walks the reader step-by-step through raising money, finding a property, and eventually closing it.

The first multifamily deal (of ANY size) results in financial freedom within three to five years.

The Law of the first deal

Michael is keen on "the law of the first deal". This law states that when an investor buys their first property, he or she will build momentum and will be able to retire in the next 3-5 years. At first I was skeptical about this point. But after reading numerous examples of people who have achieved financial freedom so quickly through this "law", I was hooked. It motivates me even more to find my first apartment building. This law is the most "theoretical" part of the book, and I mean that as a compliment, because the rest of it is very practical.

Michael Blank, author of Financial Freedom with Real Estate Investing

Overall Thoughts

Tangible, tangible, tangible. I kept thinking those words as I read this book. Michael brilliantly mixes digestible technical concepts with personal anecdotes and with specific strategies on the A to Z of buying multifamily real estate. He even provides scripts for investors to use when talking to brokers, during negotiations, or during closing. Another aspect that I liked was that Michael doesn't try to sell his other products throughout the book, unlike a certain author of Rich Dad, Poor Dad. I will definitely be looking back at this book for when I'm working on my next deal. For all these reasons, I give this book a full 5/5.

Read If You:

  • Are even mildly interested in achieving financial freedom. Regardless if you're passionate about real estate or not, this book will help steer you in the right direction.
  • Looking for a no-nonsense guideline of how to raise private money, speak to brokers, and close an apartment building deal.
  • Already invest in smaller real estate properties and want to scale up to larger investments.

Don't Read If You:

  • Are an "armchair investor" who isn't willing to take real action.
  • Distasteful of real estate gurus without wanting to keep an open mind.
  • Are a cryptocurrency or bitcoin fanatic. Real estate is a "get rich slow" tactic, not one of quick profits.

Be sure to check out my other book reviews here. Thanks for reading and please feel leave your thoughts in the Comments' section below!

Supercommunicator by Frank J. Pietrucha

Happy #WellTailoredWednesday! A major part of my day job hinges on effective communication. Our team has a book club, in which we try to read one book a quarter. The Q2 book we just completed was Supercommunicator by Frank J. Pietrucha. Let’s jump in!

Focus on Communicating Through A Digital Lens

I’ll admit that I did not have high expectations for this book. Honestly, I thought this would be just another one of those tired narratives from an aging ’Boomer about how the world has become more digitized. Yawn! But alas! Pietrucha provides a refreshing take as to why it’s important, now more than ever, to be able to communicate effectively by using technology. At the root of the problem is the fact that the internet is actually rewiring our brains to think and process information differently. And to adapt to these changes, the way we transmit that information must change.

Our mandate should be to strive not just to deliver information but also to bring meaning to our audience through thoughtful explanation.

(Pg 13)

Effective Communication in a Digital World

Communication

The meat of the book highlights Pietrucha’s recommendations for communicating better. Perhaps it's the Millennial in me but, while I felt that the initial points were helpful and refreshing, I found his latter points to be very redundant and obvious.

Know Thy Audience

  • Tailoring your message to your audience is key. The level of detail one audience can process vs. another audience will vary.
  • When addressing multiple audiences, provide sufficient background for the novices to get up to speed and then gradually build into the more complex matter for those who are more familiar with the subject matter.

Know Thy Subject

  • Make sure you thoroughly understand the idea you are communicating---this is relatively obvious.
  • Never fake it. If you don't know a detail of the subject, ask an expert to explain it to you in another way (Pg 85)

Simplicity and Clarity

  • Don't over-complicate an idea with unnecessary information. Oftentimes giving a one-line description is all that's needed to get the job done (Pg 88).
  • Be cautious of the fact that "simplicity isn't everyone's friend": if you simplify too much, you'll be left with nothing but superficial banter. You never want to simplify anything to the point where you alter the meaning of your message.
  • Writing shorter sentences, using visual aids and rich media, and leading with the main idea first are all examples of best practices---I've been trying to implement these in my work emails and in these blog posts (can you tell?)

Guidelines for Effective Communication

  • This is where the content starts to get redundant. Avoid using sophisticated jargon...unless your audience is an expert with this jargon, per Know Thy Audience.
  • Use fewer big words. This reminds me of Robert Mueller's reply to Rep. Jerry Nadler when he was asked to "dumb down [his report] to the American people" and he replied that "the findings were that the president was not exculpated...", which of course isn't the most colloquial word. That was just one of many major communication screw ups during his testimony BUT I DIGRESS...

Communicating the complicated is about inclusivity, not exclusivity.

(Pg 113)

Humanize Your Communications

  • Being genuine is often all it takes for a message to be effectively transmitted. Telling a story, being relatable, and using case studies or testimonials are all examples of humanizing your message.
  • Again, just make sure you Know Thy Audience---sometimes the audience doesn't need a human element and instead requires a straightforward narrative. Misjudging the audience can be disastrous.

Getting An Audience To Care

  • Personalize, personalize, personalize. Show the audience what your message means for them and how it will change their day-to-day. This is something I'm struggling with at work at the moment, so it was good for me to learn.
  • Appealing to emotion can be powerful, but don't overdo it and know when to not use it---again, Know Thy Audience (Pg 164).

Building Blocks And Analogies

  • Build blocks and layers from one complicated matter to the next.
  • Utilize analogies where appropriate---If the audience cannot grasp what your idea means, perhaps they will understand it if you compare it to something else (Pg 179). Again, this is fairly intuitive.

Visual And Interactive

  • Okay by now we get it. "Showing" is better than "telling".
  • Utilizing the internet to provide some of these visual cues will be beneficial.

Overall Thoughts

Overall, this book was like one of those flights that has a smooth takeoff, has just the right amount of turbulence to keep things exciting, and then goes into a holding pattern before landing that ends up taking several hours. By the time you’ve landed, you’ve had enough and are ready to move on. While the content is redundant, I enjoyed the way Pietrucha sprinkles in personal anecdotes and insights from very smart people throughout the book. He's also very candid about his communication highlights and failures, which he has equal amounts of throughout his professional career. In total, I give the book a total of 3.5/5

Read If You:

  • Work in a client-facing role and are looking to improve your communication skills
  • Work in a position where you have to frequently communicate complex ideas to an audience
  • Are a Baby Boomer or Gen X-er who hasn't grown up constantly using the internet to communicate

Don't Read If You:

  • Are looking for any new revolutionary ideas about how to communicate better
  • Want a mindless read. This book is best for a book club-like occurrence where you can analyze your takeaways
  • Don't really need to communicate to audiences on a daily basis

Be sure to check out my other book reviews here. Thanks for reading and please feel leave your thoughts in the Comments' section below!

Bisnow NYC Office & Workplace of the Future
Real Estate

Bisnow: NYC Office & Workplace of the Future

Happy #WellTailoredWednesday! I recently went to an event in Brooklyn about the future of the workplace, sponsored by Bisnow. Since I work in commercial real estate tech, I try to attend one of these events at least once a quarter. This one was at 175 Pearl Street in Brooklyn. Overall, I would give the event a rating of 2/5. I had some takeaways for each panel and here are my thoughts:

Garment District Alliance Fireside Chat

Eric Gural – Co-CEO and Principal – GFP Real Estate

Barbara Blair – President – Garment District Alliance

  • The Garment District has a colorful history and used to be called the “Devils Arcade”
  • The average starting rents in the District ($155/SqFt) are incredibly low. Rents around Penn Station are $357/SqFt and in Times Square around $387/SqFt
  • Millennials are expanding into the area as the number of food and rooftop bar options are increasing. Eric Gural commented, “The good thing about restaurants and bars in an area is that if you have a good day, you want to drink…and if you have a bad day, you want to drink.”

Design, Construction & Workplace Strategy

Design, Construction & Workplace Strategy

Ryan Simonetti – Co-Founder and Chief Executive Officer – Convene

Rachel Casanova – Senior Managing Director, Workplace Innovation – Cushman & Wakefield

David Weinberg – Principal – ZGF Architects

Joe Rigazio – CEO – Talisen Construction Corporation

John Dulin – VP, Market Development & Real Estate – Corning Optical Communications

MODERATOR Dodie Williams – Director of Project Management – Macro Consultants

  • The real knowledge of a workplace comes after the workplace is built. Currently, there’s no feedback loop from the tenants back to the architects, but there needs to be
  • We cannot think of “design” as just a product anymore. Instead, we need to think about it as a service and we need to incorporate it in our world of architectural design as a whole
  • Despite all the generational differences in the workplace, we need to think back to how we are more alike than we are different. We all want the same thing: human to human experience, choice, and a sense of belonging and community

All About the Tenants: Talent, Trends, Amenities & More

Workplace - All About Tenants

Susana Balbes Pazos – Head of Real Estate for Americas – L’Oréal

Paul Teti – Partner – Normandy Real Estate Partners

Eugene Lee – Chief Investment Officer – Knotel

Rachel Walters – Sr. Market Development Manager – Join

Bryan Murphy – CEO – Breather

MODERATOR Marc Schwartzberg – CEO/Owner – Office Furniture Heaven

  • In general, the market is very tenant friendly and landlords need to take notice
  • This panel disappointed me. All the panelists’ answers sounded more like a pitch for each company (“Knotel is great because we do ____” or “Join helps tenants because ____”, etc.)
  • There was so much redundancy on why flexibility is important and how workplace as a flexible service is starting to take over the world. Yes, at this point of the panel we get it.
  • There were multiple opinions on what would happen to co-working and flexible office space during an economic downturn. Most people said that companies are going more to want to be more flexibility, but there were also some contrasting opinions
    • Marc Schwartzberg: Tenants will want to hunker down to a more permanent space and not pay the rent premiums that flexible spaces/coworking firms command.
    • Paul Teti: To accommodate for the needs of large and small tenants, landlords will need to be flexible in the way they offer space.
    • Susana Balbes Pazos: Tenants will demand flexibility and will need landlords to compromise.

All About the Landlords: Investment, Development, & Leasing

Workplace - All About Landlords

Jonathan Lee Cohen – Head of Acquisitions – RFR Holding

Chris Shehadeh – Senior Managing Director, Regional Director New York – Tishman Speyer

Gerard Norcia – Executive Director – JP Morgan Asset Management

Paul Gillen – Managing Director / Regional COO – Hodges Ward Elliott

Kevin Chin – VP, Securities & Head of Corporate Development – The Guarantors

MODERATOR Ryan Blair – Managing Director – Stanwich Energy Advisors

  • Tenants are now increasingly focused on amenities, employee happiness, and having a cafeteria. They’re also willing to outsource, focused on wellness, and are more communal
  • Investor underwriting has evolved to be more conservative, allowing for a diverse tenant base, and the increasing trend of landlords providing amenities
  • Investors need to be careful not be careless because there’s a lot of debt and equity capital willing to be deployed
  • Paul Gillen: The intersection of office, retail, and residential classes will be an opportunity for older buildings looking to get with the times
  • This was easily the worst panel of the event. The moderator just asked some very basic questions such as “How do new projects impact a market?” and “How can landlords capitalize on the changes to the market?”
  • I asked a question on the future technologies they are most excited for and the answers were quite underwhelming:
    • Autonomous vehicles
    • New Jersey becoming more appealing with new legislation
    • Isolated investments on the life sciences side
  • Tenants want better interspace modular design and responsiveness to tenant needs

Thanks for reading and please let me know what you think in the Comments’ section below!

Finding and Funding Great Deals by Anson Young

Finding and Funding Great Deals by Anson Young

Happy #WellTailoredWednesday! As some avid readers of this blog may recall, one of my 2019 resolutions is to invest more in real estate. Since the start of the year I've invested in an online REIT and another online real estate crowdfunding company. I've also been reading a lot about real estate...and one of the books that I just completed was Finding and Funding Great Deals by Anson Young. Anson is a successful investor from BiggerPockets and he's been a 3-peater on their famous podcast in these episodes:

Before I begin my review, I want to caveat that this is the first book that I did not read page by page and cover to cover. I skimmed many parts and reread others. The book is very comprehensive. Whether you're a beginner looking to get your feet wet or if you're an experienced landlord who's looking for tips on streamlining your process for finding deals, there's great content in the book for everyone.

Putting the Fun in Fundamentals

Showing how to narrow down the property type on ListSource. (Chapter 2)

For example, in his chapter on Market Analysis (Chapter 2), he talks about how investors can find data on leasing platforms such as Zillow, ListSource, Redfin, and the MLS. Additionally, he even adds screenshots of the filters and fields the investor should input to find what he or she is looking for. In Chapter 6 where he talks about Evaluating Deals, he goes into great detail on what to look for when analyzing comparables. From here he defines some key formulas such as the 70 percent rule, the Fixed-Cost Method, the meaning of Cap Rates, and how to use these formulas during the underwriting process. For budding investors, these fundamentals are the key to success.

Another great aspect of this book is that it's just so easy to read. Throughout the book, Anson does a great job translating both high-level and granular real estate concepts into digestible bits. He also makes the content seem more conversational by adding his wit and a ton of jokes throughout the book: "a basement in Phoenix is about as common as a day you needed a coat." (Chapter 6) or providing quotes from Groundhog Day (Chapter 1)!

Putting the Fun in Funding

In the latter part of the book, Anson focuses on how to finance deals. From the get-go, he highlights the massive tradeoff that investors face when they seek funding:

The easier-to-find options are harder to get; you could walk into any bank to get a loan, but you need to have the credit, job history, and down payment to get that loan—not to mention the appraisal, loan conditions, and thirty-day close! The harder-to-find options offer better rates and looser standards; you could find a handful of rich guys who want to earn 10 percent, could fund in two days, and never want to see your credit report or ask for a down payment. Chapter 7

This is something that I'm struggling with at the moment--getting bank financing and raising private capital from investors. I've thought about some of the ways of securing financing that Anson talks about, which include:

  • Cash
  • Self-Directed IRAs (SDIRAs)
  • Bank Financing
  • Loans--Conventional, Construction, FHA, VA, Portfolio
  • Hard & Private Money
  • Seller Financing
  • Subject To
  • Lease Options
  • Transactional Funding
  • Partnerships
  • Crowdfunding

Clearly there a lot of ways to finance a deal that I need to consider! After highlighting the pros and cons of each method, Anson then dedicates a lot of time to Negotiation.

Initiating Negotiating

One of the goals for my day job is to work on my negotiating skills, so I made sure to read up on this section intently. A key nugget of advice Anson provides is for investors to get comfortable with hearing "no". In other words, the sooner they can overcome the fear of hearing "no", the better equipped they will be in handling those objections.

Go out in the world and get to ten nos as fast as possible. Chapter 8

In addition, Anson talks about how negotiation doesn't always have to be financially-driven for a discount off the sales price. This is usually the main reason sellers say "no" in the first place. Sometimes the investor simply needs to solve the seller's problem. Some of these creative concessions include closing quickly, providing moving assistance to the seller, allowing the seller to carry-back the note, and more, all of which I found to be incredibly helpful. In the future I plan to read one of the best-known negotiating books: Never Split the Difference by Chris Voss as well as the [in]famous The Art of the Deal by Donald Trump, so stay tuned to those reviews!

How to scale your business by optimizing your marketing budget (Chapter 11)

Anson also does a great job on spending time on the logistical procedures of closing the deal. This is by far one of the most dense stages of the acquisition process. From describing the different contracts that could be used (Chapter 9) to finding an investor-friendly Title company or attorney, Anson walks the reader through several nuances he or she should watch out for.

To close out the book, Anson zooms out and talks about the big picture. Chapter 11 provides tangible tips on how investors can successfully scale their business by building processes. Consequently, the investor will find better deals at a great price and will be able to secure funding. As a budding investor, I appreciated him providing this advice because it gives me a clearer path ahead in my investing career.

Overall Thoughts

In summary, I enjoyed reading this book, although I don't think investors need to read every page cover to cover. I give it a full 5/5.

Read if you:

  • Are having trouble sourcing deals or finding financing.
  • Are looking for a manual on real estate investing. Anson does a great job of highlighting the step-by steps needed to become successful in the business.
  • Are looking to scale your business by building systems and negotiating to find better deals.

Don't Read if You:

  • Focus on multifamily or commercial real estate. While there are nuggets of information on best practices for real estate investing, I would say 80% of this book is catered to those investors who focus on Single Family or Fix & Flip.
  • Are skeptical on real estate investing in the first place. If you still need convincing, you may want to consider reading Rich Dad, Poor Dad by Robert Kiyosaki first.
  • Already have a full-fledged real estate business. I highly doubt Grant Cardone will find anything new from this book. If you're like him, you may want to read about optimizing your business or about some of the more advanced real estate investing strategies.

If you're interested in buying Finding and Funding Great Deals, you can purchase it on BiggerPockets here. Thanks for reading and please feel free to leave your thoughts in the Comments' section below!

Coffee

Thanksgiving Blend

Happy #WellTailoredWednesday! Although it’s been months since Thanksgiving of course, I’ve decided to review the Starbucks Thanksgiving Blend, which I received as a gift from my family member who works at the company. The Thanksgiving Blend has been a perennial roast since 2008, with the goal of creating a coffee that pairs well with the holiday’s traditional feast. Let’s dive in!

Hearty Aroma & Taste

Upon first…er…sniff, this blend has a deep aroma that really fills you up. I’ll be honest and say that I can’t detect a spice scent to it, but apparently there is one. The beans hail from the Antigua region of Guatemala, where the ample rain and sun, nutrient-rich soil, and consistent temperatures year-round give the beans their spicy flavor. Additionally, there are some herbal notes from Sumatra in this blend that give its intense, yet palatable taste. If you like Sumatran coffees that aren’t as strong, I’d recommend the Single Origin East Timor.

When and How To Drink It

I recommend drinking the Thanksgiving Blend coffee either in the morning as a start to the day or at night with dessert. Yes, I said at night. For those of you coffee fiends who are immune to the caffeine like I am, this blend is a great example of a coffee that you can have at all times of the day that will not affect your sleep. And if you are a bit more sensitive to caffeine, that’s fine too! My point is that this blend pairs well with a sweet dessert or fruit. I tried drinking it with some dark chocolate and, separately, with some sliced apples and the different tastes played very well with one another.

See the source image
The Starbucks Thanksgiving Blend, which started in 2008

And since this blend is quite rich, I’d recommend either a 1:1 or even a 3/4:1 grounds-to-water ratio. If you’re thinking about drinking it on the rocks or with milk/cream and sugar, you may want to add more grounds, so to balance the ice.

From Starbucks

Here’s the original description of the Thanksgiving Blend from Starbucks:

This full -bodied favorite features herbal notes from Sumatran beans and distinctive soft spice from the coffee of Guatemala’s Antigua region. It’s a blend created to pair beautifully with dishes savory and sweet–perfect for this season of thanks and giving.

Aroma
Bitterness
Strength
Taste

If you enjoy your cup of Starbucks® Thanksgiving Blend, you might also like our Organic Yukon Blend® [Which I plan to sample and review in the coming months!].

I’d highly encourage anyone to try this coffee, and if you do, please let me know what you think of it in the Comments’ section below! Thanks for reading!