How do you go from zero to over five hundred doors in 18 months? Tate Siemer takes us on his journey in getting there. In this conversation, he shares advice on how to find and secure larger checks for deals and how to scale a business to new heights Listen in!
Tate Siemer is the CEO/Managing Partner of GreenLight Equity Group. The company acquires and operates commercial multifamily assets (apartment communities) in Utah, Oklahoma City, and Columbus, Ohio. Currently 320 doors, $24M AUM. 252 doors under contract. Their mission is to achieve exceptional returns for our investors by improving communities and expanding well-being through progressive solutions in multi-family housing.
[00:01] – [07:07] Discover the Magic of Multifamily
- Tate on getting into real estate in the ‘06 and catching the multifamily bug
- The lightbulb moment of seeing the magic of multifamily regarding cashflow
- Growing wealth with mitigated risk and tax advantages
[07:08] – [12:01] Failing Foward – Be Watchful of the Market
- Financing through lending and raising investor capital
- Creatively finding ways to do a full cycle in a deal
- Going through the shifts, spikes, and fluctuating interest rates
[12:02] – [16:06] Tips for Expanding Your Network
- Striving to be in a better position in strategic relationships
- The benefits of masterminds and conferences in expanding your network
[16:07] – [18:10] Closing Segment
- Reach out to Tate
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- See links below
- Final words
Tweetable Quote
“We lost our earnest money on it… That’s painful. It’s something that happens in this industry. It’s why they call it investing. It’s why they call it earnest money, risk money… There were a number of factors–the shifting market, the spikes, and interest rates… Fail forward.” – Tate Siemer
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Connect with Tate Siemer on Linkedin. Visit his website and email him at tate@glequitygroup.com
Resources Mentioned
Failing Forward: Turning Mistakes Into Stepping Stones for Success by John C. Maxwell
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Want to read the full show notes of the episode? Check it out below:
Tate Siemer [00:00]
There’s nothing better you can do to learn this business than actually do deals, in my opinion. And, you know, as entrepreneurs, we bite off big bites and big chunks and we solve big problems. And sometimes as an entrepreneur, you’ve got to put something under contract that you’re not 100% sure how it’s gonna get done. And, you know, we’ve done that we’ve been very successful and we’ve also stumbled a few times.
Intro [00:24]
Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.
Sam Wilson [00:36]
Tate Siemer is the CEO and Managing Partner of GreenLight Equity Group. They currently have $58 million in assets under management about 600 units. Tate is also the host of The Apartment Gurus Podcast. Tate, welcome to the show.
Tate Siemer [00:49]
Sam, it is a pleasure to be with you can’t wait for this.
Sam Wilson [00:52]
Absolutely. Pleasure is mine. Tate, there are three questions I ask every guest that comes on the show in 90 seconds or less. Can you tell me where did you start? Where are you now and how did you get there?
Tate Siemer [01:02]
Well, as far as real estate goes?
Sam Wilson [01:06]
Sure!
Tate Siemer [01:07]
So well, real quick backstory. I’m originally from Cincinnati. I grew up there, suburbian kid, Catholic High School, not a Catholic guy. I was never Catholic. I just went to the school because it was great school. But I moved to Utah in 1999 last century, to ski, to chase a dream of skiing in the Rocky Mountains. And I’ve lived here for 23 years and have really adopted this as home. Originally a photographer by trade professional ski photographer, also weddings and portraits, and did that hard and heavy for about 10 years. But in 2006, I got into real estate investing, really just through a friend, a buddy that was in a class, a basic flipping class on how to invest in single family and and small multifamily. And, really, that’s how I got into real estate. I got my I eventually got my realtor license, started flipping homes on my own, also went to work for some other investors. And then and 2011 teamed up with my current partner, Carl York, who was my original boss in Salt Lake City and 99, actually, but so we’ve been working together for 23 years, mostly on in different, different businesses. Four years ago, four or five years ago, now we caught the multifamily bug through we really had a 12 unit, kind of fall in our lap from a wholesaler that brought it to us and said, Here’s a great deal, you guys should do it, here’s how I would do it. And we ended up buying it and really saw the magic of multifamily in terms of being able to buy something that produces cash flow that was new to us. new concept, believe it or not to I mean, it was something we had never really seriously considered as you know, as as a lane to get in. But once we got in that lane, we have not left we’re we’re singularly focused on on multifamily. Specifically, like you said, we have about we have 595 doors under management right now. And with seven different communities and Columbus, Ohio and Oklahoma City, those are two target markets. We all we do also do deals in Utah, here in Utah as well. So So yeah, that’s kind of a real quick brief thumbnail of kind of how we got to where we are super excited about this space, love it really in love with the work. I do love doing the podcast, as I’m sure you can relate Sam and I love being able to be a contribution to other people along the way. So that’s really what I’m all about.
Sam Wilson [04:00]
That’s awesome. Tell me about the transition that you went through, as you discovered the cash flow like that being a new concept. Can you can you tell us about that?
Tate Siemer [04:11]
Actually, I remember the moment really well when we were underwriting that deal and and analyzing it and my, my partner, Carl looked at me and he goes, he goes, Dude, can you shoot any holes in this deal? Like, I mean, we’re making like, it’s profitable, like it’s, it’s a deal that’s that now this particular community was half vacant. Six of the 12 units were vacant. The other half were paying very, very low rents. The place was in shambles. And so we basically got everybody out and it did a head to toe remodel, everything from the membrane TPO roof down to mechanicals flooring, solid surface counters. We really did them up well windows and For us, it was really a matter of seeing, for the first time, everything we had done up to that point is what I would call speculative in nature. In that we were buying properties for a certain price, figuring we could add value to them for a certain expense, and sell it for a profitable price at the end of the process, right? We did that with single family houses, we did that with land. And we even did that with new build development. And every single deal that we did was speculative in nature in that way, when the apartment came along, and all of a sudden, we had like income and cash flow and revenue that we could underwrite. It was a whole new thing. I mean, it actually required a whole new spreadsheet, you know, a whole new model for us to underwrite it. And it was, it was quite a profound moment, really, because there’s nothing like a live deal to bring home, all the advantages of multifamily and all the hardships to like, there’s nothing better you can do to learn this business than actually do deals, in my opinion. And, you know, as entrepreneurs, we bite off big bites and big chunks, and we solve big problems. And sometimes, as an entrepreneur, you’ve got to put something under contract that you’re not 100% sure how it’s gonna get done. And, you know, we’ve done that we’ve been very successful. And we’ve also stumbled a few times. Yeah. So you know, back back to that, that kind of that light bulb moment of seeing the magic of multifamily. It’s something that I now consider almost a moral imperative of mine, to get the word out there, that this is a fantastic option for investors to put their money in into, you know, private deals that are cash flowing, that are going to grow wealth, that are going to be risk mitigated that are going to bring tax advantages. So yeah, super exciting space for us.
Sam Wilson [07:08]
I love it. A full gut job on a 12 unit is your first, how did you get over the industry experience? Maybe the lender would require? And then how did you get it financed?
Tate Siemer [07:21]
Well, we did that one with hard money. So we didn’t, we had from the single family days, we had a lender here in town, local hard money guy that trusted us knew us very well. He financed 90% of the purchase and 100% of the fix up. And then we actually raised investor capital for the rest. So we did that deal with no money out of pocket, we actually had to bring in a little bit of money at the end to complete the capex we were doing, but essentially, no money out of pocket for the purchase and, and the fix up. So yeah, it was it was a good one.
Sam Wilson [08:06]
That’s awesome. Do you still own that deal today?
Tate Siemer [08:09]
We did. We went full cycle on it. We stabilized it, we doubled the rents there from where they were. And it’s a very transitional part of Salt Lake City. So there were good properties around us and not so good properties around us. But we were able to really set the neighborhood standard for high rent levels on small one bedrooms.
Sam Wilson [08:29]
That’s awesome. Very, very good. Well done getting that one. That one, you know, done full cycle, but also just you know, creatively finding a way to take that down. I think that’s as people start to scale into larger assets. It’s a common question is like, Well, how do I get? How do I get that first deal done? How do I and obvious there’s a million ways to do it? So I think it’s interesting to hear what people have done and how they finance their opportunities. You said you’d stumbled a few times, maybe a long way since then, what are some of those things that come to mind when you say that?
Tate Siemer [08:58]
Yeah, a recent example of something that didn’t really go the way that we wanted it to was, we had a very, very nice building in Columbus under contract. And it was a $27 million acquisition. We had about a $12 million equity raise to get done and which was quite a bit more than what we’ve ever raised before. And so we we sourced, we went to work sourcing, Institutional Equity, private equity, and we got we got some people on board real early that we weren’t ready to jump into bed with just yet because of our loan. And then when we got the loan solidified and in place, and this was during that rapid, rapid shift in the market, the debt market. When we finally got that loan in place, we went back out had have a hard time finding equity, we finally found a source that wanted to do the deal. And then as the market shifted, and our due diligence time expired and went by, we, they backed out, they kind of left us at the altar, so to speak. And so we weren’t able to get that deal done. We lost our earnest money on it. And, you know, that’s, that’s painful. And it’s, you know, it’s something that happens in this in this industry. It’s why they call it investing. It’s why they call it earnest money, risk money. Obviously, it’s something that we never foresaw happening. But, you know, there were a number of factors that the shifting market the spikes and interest rates, and, and the, the shift and equity and their equities, perspective on the market, really ended up hurting us a lot. So we’ve been in kind of regrouping mode. And one of the things that we’re doing, Sam is we’re looking at smaller deals now, deals that we know that 100%, we can find, we’re actually under contract on another 12 unit in Salt Lake City. So we’re, you know, super exciting property, we’re currently currently in the middle of raising capital for that, it’s when you go big, sometimes you get you get pummeled, like surfed the big waves, and you’re gonna get pummeled eventually, some sometimes. So that’s one. That’s one example. We had, early on in our Oklahoma City deals, we had a property manager that was managing all of our properties there that we had to fire, which was also painful, and a number of different ways. But that was kind of a blessing in disguise, because we found a absolutely amazing property manager to come in on those. So. So yeah, fail forward, right. Like there’s a book called Fail forward. And I think it’s a great concept. It’s all about embracing the failure, learning from it, growing from it and being becoming stronger from it.
Sam Wilson [12:02]
What were some of the key takeaways, maybe that you guys either jotted down or just kind of stuck in the back of your head and said, Hey, we have a deal this size Next time, we’re going to do it differently? What are those things you would do differently?
Tate Siemer [12:15]
Yeah, I mean, it’s, it’s really interesting, because in the process of trying to get that deal done, we started a lot of relationships with larger equity sources, larger check writers. So we’re going to be in a much better position with relationships in place, and even people that we’re working on relationships with, with some family offices that are that are, we’re trying to play the long game, right? Like, we want to be, we want to find somebody that wants to grow with us, we have big aspirations, we want to be at 200 million assets under management in two years, getting that going from 60 ish million right now to 200. Is is going to take some large unit count properties and, and and large acquisition larger checks from equity. So so really, I think, for us the lesson is relationships. When we started with that deal, we didn’t have any equity relationships in place aside from our, our own investor network that we market to. So having having that in place will serve us very, very well moving forward.
Sam Wilson [13:33]
What are what are some things that you know, just more of a practical advice? What are some things you have done to put yourself in front of those larger check riders or bigger equity sources? If I were to do that today, what would you tell me to do?
Tate Siemer [13:48]
I would say, Join masterminds go to networking events, whether they’re virtual or in person, go to conference national conferences, and ask everybody you know, who they know, that might be able to help them in the larger check area of the business? And, you know, so for us, it’s really just been a lot of conversations and a lot of referrals. A lot of Yeah, hey, I know this guy, or I know these guys. Also, there’s brothers equity brokers, and they’re more than happy to work with you. They that’s how they feed their families. So there’s, there’s, you know, get on LinkedIn, Google debt, slash equity or debt and equity for commercial real estate, and just start reaching out to people you will find it.
Sam Wilson [14:40]
That’s really, really great advice. Thank you for taking the time. Does that concern you? You know, as you’re moving forward, I know that the having having a larger check writer back out of your deal cost you a deal, is that certain you or is there a way to kind of mitigate or ensure that when you get a At least a verbal if not written commitment from a large equity source that they’re actually going to follow through.
Tate Siemer [15:05]
Well, we never did get a written commitment from that source. We did get a verbal commitment, but, you know, yeah, I would say it never stopped raising capital until the checks, you know, cleared and in your account, right? That’s really like, don’t stop picking up the phone until that happens. And, and not that we really did that. It all it all kind of happened pretty fast. But you never want to count your chickens before they hatch. So yeah, just keep raising.
Sam Wilson [15:37]
That’s exactly it. I can’t tell you, you know, how often, you know, we’ll get soft commits or even Hey, you know, I’ve even had people signed Doc’s and then just never get around to, like, oh, yeah, no, we’re coming. And then brother died, just keep raising, and then eventually, you just turn it off. It’s like, Well, I’m sorry, you didn’t get done. So I think that. That’s great. Great advice. Certainly there. I want to hear a little bit about your coaching program. We’ve got about two minutes left here. And I want to hear about that there before we sign off.
Tate Siemer [16:07]
Sure. It’s called multifamily accelerator and, and basically what it’s designed for either an aspiring multifamily investor, or an existing multifamily investor that wants to scale up. For the aspiring investor. It’s all about getting that first deal done. So it’s a really comprehensive, deep dive into everything that it takes to get a deal done. Because the first deal is the hardest deal by a longshot to get done. And once you get it done, things start rolling. It’s Michael blanc talks about the law of the first deal. And that’s a real thing. Yeah, so it’s, it’s a hybrid coaching format. It’s group coaching, combined with lots of one on one time with me. And it’s just a multifaceted program that is, is designed to really catapult you to the next level that you want to get to.
Sam Wilson [17:03]
That’s awesome. Love that love that if we want to learn more about you take your coaching program, your podcast, all those things are the best places to find that.
Tate Siemer [17:13]
Yeah, invest with green light.com invest with green light.com. And, and you can always email me to either through that, or at Tate at GL equity group.com. And, yeah, that’s really the best way to reach me. I love to hear from people. I’m also on all the social media platforms at Tate seamer. So love to hear from you guys.
Sam Wilson [17:38]
Awesome, Tate. Thanks again for your time today. Certainly appreciate it.
Tate Siemer [17:41]
My pleasure, Sam. Thank you.
Sam Wilson [14:34]
Hey, thanks for listening to the How to Scale Commercial Real EstatePodcast if you can do me a favor and subscribe and leave us a review on Apple podcasts, Spotify, Google podcasts, whatever platform it is you use to listen If you can do that for us that would be a fantastic help to the show it helps us both attract new listeners as well as rank higher on those directories so appreciate you listening thanks so much and hope to catch you on the next episode.
