Today’s Guest is Noel Parnell.
Noel, a Philadelphia native, has been involved in real estate for as long as he can remember. Always a visionary, Noel recognized an entry point into the field that he had once dreamed about during the peak of the 2008 Great Recession.
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[0:00] Intro
[1:20] The 3 Questions
[2:58] Noel’s Start
[4:28] Financial Freedom
[6:52] What are you buying today
[8:43] Noel’s best deal ever
[16:15] 11 month old owning 11 units
[19:17] Finding deals now
[21:09] Closing
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Connect with Noel:
Linkedin: https://www.linkedin.com/in/noel-parnell-83114214/
IG: https://www.instagram.com/ks_investments/
Facebook: https://www.facebook.com/noel.parnell
Connect with Sam:
I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.
Facebook: https://www.facebook.com/HowtoscaleCRE/
LinkedIn: https://www.linkedin.com/in/samwilsonhowtoscalecre/
Email me → sam@brickeninvestmentgroup.com
SUBSCRIBE and LEAVE A RATING. Listen to How To Scale Commercial Real Estate Investing with Sam Wilson
Apple Podcasts: https://podcasts.apple.com/us/podcast/how-to-scale-commercial-real-estate/id1539979234
Spotify: https://open.spotify.com/show/4m0NWYzSvznEIjRBFtCgEL?si=e10d8e039b99475f
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Want to read the full show notes of the episode? Check it out below:
[00:00:00]:02 – [00:00:50]:14
Noel Parnell
I met this woman on a plane from Lubbock, Texas, going to Houston. I missed my flight, first of all. So I was supposed to be on this plane, got on this flight here later on in Dallas, going to Houston. She was coming from L.A. This apartment was owned in a trust. Her husband was the person that was communicating to the property manager. She wasn’t paid for over a year and a half after his death. And I say, hey, this is my name. I’m like, Hey, I’m actually going to Houston right now if I can turn this building over. Would you mind selling it to me? You did a handshake deal there. I get down there. I fire the property manager. I say, hey, I had I had her blessings. I brought her with me. We have our blessings. We fired the property manager. I took over the building that day.
[00:00:50]:14 – [00:01:01]:23
Intro
Welcome to the How to Scale.Commercial Real Estate Show. Whether you are an active or passive investor, we’ll teach you how to scale your real estate investing business into something big.
[00:01:02]:05 – [00:01:17]:13
Sam Wilson
Noel Parnell is a Philadelphia native. He’s been involved in real estate for as long as he can remember. He says he’s always been a visionary and he recognized an entry point into the field that he wants to always dreamed about during the peak of the Great Recession in 2008. Noel, welcome to the show.
[00:01:18]:01 – [00:01:19]:24
Noel Parnell
Thank you for having me. Thank you for having me.
[00:01:19]:24 – [00:01:28]:01
Sam Wilson
Absolutely the pleasure is mine. Well, there are three questions I ask every guest who comes on the show in 90 seconds or less. Where did you start? Where are you now and how did you get there?
[00:01:28]:17 – [00:01:40]:08
Noel Parnell
I start I started out of being laid off from the Great Recession. I was working as a scientist at GlaxoSmithKline or second one where I where am I now?
[00:01:40]:15 – [00:01:43]:05
Sam Wilson
Why did you start? Where are you now and how did you get there? Yeah.
[00:01:43]:07 – [00:02:17]:05
Noel Parnell
Okay. Where am I now? I am a full time multifamily syndicator. And how did I get there? Is that I want it to scale because my ultimate goal is to eventually buy into a sports team. And so that’s the ultimate goal. I want to buy, preferably the Philadelphia Eagles, but a lot of thought was at the line when that. But you can also with a lot of people don’t know you can syndicate to be minority ownership and to a lot of sports teams out here whether it’s basketball hockey I’m a I’m an avid sports man so that’s my that’s my why.
[00:02:17]:11 – [00:02:57]:20
Sam Wilson
Got it. Got it. Hey, I love it. I love the vision in the dream. I want to scale into owning a sports team that that’s not on my list. But I mean, it’s it’s sounds interesting. I mean, why not? Why not? The sky somebody has to own them. So. That’s right. Why not you, man? I love it. I love that. I love that that that again that vision casting there. That’s a that’s a lot of fun. So tell me this. What does your business look like today? You lost your job in 2008. You said, hey, I’m going out to get into the real estate game. Which man? I think for anybody with the skill set you probably now possess like 28 would be just a goldmine for many of us going, okay, now we can just pick deals up.
[00:02:57]:22 – [00:03:03]:12
Sam Wilson
You didn’t enter into 2008 with a skill set ready to acquire distressed assets. How did you do it?
[00:03:04]:04 -[00:04:25]:18
Noel Parnell
Now, I always laugh at this. I was a Barnes and Noble cheapskate. I would go to Barnes Noble’s and go to the real estate section and it wasn’t even sexy then. So I would I would put a place card, take notes and come back to Barnes Noble’s every day for that. And I was, I think back at it now. I was like, I could have purchased the books. I don’t even know why. I would just go back. The Place Cooler were still there and I would just take notes on what I wanted to learn. And then I was a little bit of a you to where I was going. All right now to buy property with no money down with no money at all. And that’s where like different things will come up, seller financing, things of that nature. But that’s that’s how it kind of got the ball roll in. And I think the biggest thing was, was my first my first property was house hacking and the contractor did such a bad job. What I mean, I could turn on my basement light, it wouldn’t come on, but the third floor light would, you know. He did. I have I had I had ductwork that went to nothing. So it was there, but it didn’t connect. So that was like, oh my God. So I started Googling and learning how to like YouTube and fix things. And that also was one of the catalysts like, Shoot, I’m doing this enough. I can I can do this.
[00:04:25]:18 – [00:04:37]:09
Sam Wilson
That’s wild. My gosh. What did you scale into bigger assets? What was the tipping point for you that said, you know, enough of this single family house hacking, there’s got to be a better way.
[00:04:38]:07 – [00:06:51]:18
Noel Parnell
So so I think when I look at it as when did I create my financial by tooling so always really methodical, you know, about my plans. I didn’t hate my app, you know, I was a former pro runner and then I went right into track and field. So I went to the Beijing Games, you know, as a guy run in 2008 and then went right into, you know, working at GSK and I didn’t hate my job because got laid off, but I read a Tony Robbins. I heard him speak and he another book called Unshakable that came out later on. But he spoke about having these financial steps of vitality, like, what do you actually need to actually, like, live? And I’m worked out everything. I need it. And I knew I need it at the time. I needed 11 properties and duplexes are triplexes and each door had them make $200 and that way all I needed was seven grand per month netting and I would be cool. So that was my first thing I did. I did as a secure my financial vitelloni and then everything else was playing with house money. So I was doing like seven units at a time. Sometimes I was averaging about, you know, between a year’s of 2014 and 2019. I was actually about 15 or 16 projects a year. And so I got up to about, I hope now about seven or eight properties that are like a mixture of duplexes and triplexes. And I went to scale to the multi families that I needed to create my net worth because the ultimate goal is I want a half, you know, I want to, I want to sit courtside somewhere or I want to be behind a bullpen or, you know, or in the oldest, the owner’s box, you know, you know, doing those type of things. So that was the the the main goal was like, how can I scale? I had already achieved financial freedom within, you know, eight years. I was very conservative, but I achieved it by 1215. I was I was I supplemented my income, which was a high six figure income. I did that already. But now I’m thinking I need I need to go bigger because I want to own a sports team. And that’s why I got to the multifamily realm.
[00:06:52]:02 – [00:07:10]:15
Sam Wilson
Got at me and I think, I think that’s really, really cool. Yeah. To sit in the owner’s box that’s a that’s got to be a different a different feeling altogether. No. We’re circling back to where where we started. But that’s that’s a fun a fun on that side of things. You decided to get involved in multifamily. What are you guys buying today and why?
[00:07:11]:10 – [00:08:43]:06
Noel Parnell
So we still buy B and C class buy where it’s a little bit of the C, I still do. But I think primarily my group around capital, it’s me and two other women, Tiffany Spann and Lupe, a child. They’re both from the D.C. area. We prep mom for not only do B class like our B B minus is where we go. Just because we’re looking at we like to do tours. So we’re not taking really our clients in our investors into like really crap areas and that other side cause that’s what C class C class is low hanging fruit and it’s no, it’s the common joke is C class is the yo the crack of of those buildings. So I have that silo with ground capital where we’re looking for be class value add properties after 1975 buildings or later. And so that’s what we look for there. But then the other side of it is that we still do some of the C class and D class properties and that’s part of our, you know, affordable housing to make sure we kind of look at as a a slash business and stewardship, because we do see a disparity of the, you know, the separation of, you know, building class and people being able to afford things. So we know we want to actually bring out a great product for people in these, you know, underserved areas. Like, you know, we can put a brick product there. And I think right now there’s a there’s a lot of there’s a lot of lot of fruit there for people that are trying to get in there in that area.
[00:08:43]:22 – [00:08:51]:06
Sam Wilson
Mm. No, that’s great. I love that. I love that. What’s the best deal you’ve ever done?
[00:08:51]:06 – [00:12:09]:03
Noel Parnell
Oh, it’s going to be the latest one. You know, it’s this 20 unit building. It’s a small building. But, you know, I got this building for under $5,000 and it wasn’t vacant. It was at when I when I got it was that maybe 72% occupancy. And so what I did was go in there and increase rents gradually on this. This is January, increase rents on the vacant units. I opposed striking the parking lot, giving design, I mean assigned parking. So I freeze not not net operating income that way. People that didn’t have leases, I brought them up because the buildings were like, man, they were about maybe $400 on the market. And so I didn’t bring them. But the 400, I brought them up to 200. I’m just like, Hey, this is the more and this is like you get what your, your, your, your clientele or your tenants and which I say I work for them is like, hey, I know you’ve been here for a while. This is what everybody’s paying here. You know, your $400. I’m always paid for it. You’re $400 below anything in this area. I’m raising your rent. $200. You know, I think that’s fair, because everything else, you know, is going up. You know, as far as, you know, insurance goes up every year so that by far that is the the best deal I’ve done to date. And I at least give you a little bit better amount on this. I met this woman on a plane from Lubbock, Texas, going to Houston. I missed my flight, first of all. So I was supposed to be on this plane. We met up in Dallas because there’s no direct flights from Lubbock. Everybody, if they are not there. No, there’s no direct flights. And so I in the January, January 24th, there was a snowstorm in Lubbock. That’s why I missed my flight, got on this flight here later on in Dallas, going to Houston. She was coming from L.A. This apartment was on in a trust. Her husband was the person that was communicating to the property manager. She wasn’t paid for over a year and a half after his death. So I’m hearing her when we’re first class. I always tell people it’s really poor. It’s about the fly. First class, if you can. A lot of things go down there and I hear a conversation and I say, Hey, this is my name. I’m in like, Hey, I’m actually going to Houston right now. I’m actually going to Houston for a Robert Martinez apartment rock star. I’m going to his mastermind. And I say, Hey, this is what I can do for you. If I could turn this building over, would you mind selling it to me? We did a handshake deal there. I get down there, I fired a property manager. I’ll say, hey, I have I had her blessings. I brought her with me. We have our blessings. We fired the property manager. I took over the building that day. So this is January. Now we’re January 24th, right? Today we’re at 24, 26. So now I’m helping to set up accounts. So the February 1st rent does not go to the old manager. So I’m doing all of this within the three days and make sure all the tenants know like, Hey, there’s a new sheriff in town right here. So that’s it’s really it’s really crazy.
[00:12:09]:19 – [00:12:28]:00
Sam Wilson
Wow. So you went for a you went for a mastermind and ended up acquiring a property for five grand. Why? I mean, there are so many questions and I know I want to spend the whole time, but this is a fascinating story. Why would someone get rid of a cash flowing asset for five grand?
[00:12:28]:11 – [00:13:02]:09
Noel Parnell
So what I always tell people is like you have to find out what someone’s endgame is and and what her what her issue is. What was our problem? Her problem was that she hasn’t been paid over a year and a half. Her mortgage is auto debit. And so a part a conversation is saying, hey, I will go ahead and I will ensure that that’s what you’re getting your monthly rental payment which is which is for a P and I was 70 $700 at that time. The building was already collecting at 14 grand a month. She just wasn’t receiving it.
[00:13:02]:18 – [00:13:04]:14
Sam Wilson
So who was who where was the money going?
[00:13:04]:21 – [00:13:07]:12
Noel Parnell
It was going to the property manager. That was a painter.
[00:13:08]:08 – [00:13:09]:21
Sam Wilson
Oh, I got the.
[00:13:09]:21 – [00:13:10]:16
Noel Parnell
Property management.
[00:13:10]:16 – [00:13:11]:14
Sam Wilson
Was ripping her off.
[00:13:11]:21 – [00:14:37]:23
Noel Parnell
Ripping her off. And so I said, would you be interested again? Would we have for a second time? I said, Would you be interested in a, what I call a creative deal? I was like, What we call is a subject to do. I was like, That’s what we’ll go ahead and chance the deed. I’m sure that your mortgage and your interest is paid. I mean, this is not coming out of your personal. It was actually coming out of her trust. So she was bleeding her trust. And so I said I would make sure that gets done. You assurance and taxes will be paid. And this is where I tell people, this is it. This is the risky thing right here, because remember, this is a handshake deal. And I said, I’m going to take care of that for you. And but you have to agree that you’re going to go here for this. And, you know, you always give the disclaimers. There’s a due on sale clause. This can happen like that. Get there, always move with integrity, people. Okay, so we always just disclose all those. But the risk was on me because I’m paying. I’m already fully immersed. I said, You know what? I’m paying this. The deed wasn’t even in my name yet. The deed did get transferred over until maybe. But right now this is almost the second week of March. So that means I was doing things to the building, paying taxes, the insurance, and I didn’t even own the they own the building yet as far as the deed owner.
[00:14:38]:01 – [00:14:38]:15
Sam Wilson
Mm hmm.
[00:14:39]:09 – [00:14:51]:17
Noel Parnell
And that process, that was the risk part. But sometimes you have to have one. You have to have a little gut feeling there. But I. I’m not going to lie to you. I was like, man, it’s this is it’s risky, right?
[00:14:51]:17 – [00:15:04]:16
Sam Wilson
In her and in for her. Yes. Covering that monthly mortgage payment was part of it and also probably just didn’t have the skill set to own and operate that building. She wanted out. It sounds like she just wanted out.
[00:15:05]:02 – [00:15:39]:20
Noel Parnell
And this is and think about this. I know because we’re going to we’re in the process of refinancing that building right now. And so she’s going to get some money because right now she only owed or C, I think seven of the 65,000 on the building was left. You know, the building came in at three, 3.4. So she’s getting that was another part of the agreed to a sum that she has. She gets her sum. I get my sum. And what the back side story of it is that she wants to invest the Crown Capital way. After that.
[00:15:39]:20 – [00:15:46]:10
Sam Wilson
She wants to reap the proceeds and then turn around and reinvest it. And that’s that’s that’s genius. I love it. You built.
[00:15:46]:17 – [00:16:00]:03
Noel Parnell
It. It’s like being in the right place, the right time. The LLC is call flight 885845 because that’s the flight that I was actually on. So that was the flight. That’s the LLC that yeah, that was the building.
[00:16:00]:03 – [00:16:15]:24
Sam Wilson
I love it. I love it, man. You can’t, you can’t make those up. Like that’s just that’s just a good time. I’ve done plenty of subject to stuff and yeah, there’s a lot of a lot of moving pieces there. But when for the right situation, it makes sense.
[00:16:15]:24 – [00:16:27]:21
Noel Parnell
The right situation has to happen. And like I said, that you have to be at the right time. I still can’t explain like this being at the right time or the right place that that happened to happen, you know?
[00:16:28]:14 – [00:17:02]:07
Sam Wilson
Yeah, no, I love that. I love that you’ve got a lot of moving talk. Speaking of moving parts, you’ve got a lot of things that you are investing in. I love kind of your creativity. You sound there. It appears that you’re very opportunistic and willing to go out and try new things and do new things and I think that’s that’s a fun a fun part of maybe your story there. You and I off air got to talk about your son and the amount of real estate that he now currently owns. Maybe you can give some more color to that story.
[00:17:02]:21 – [00:18:42]:24
Noel Parnell
Yes. So I have a I’m a new dad. So, so excited. But my son has 11 units now. He has a five unit and aa6 unit property right now. And so my plan for him is to acquire 3 to 4 small multi families for a year for him. And the rental income from from that will be separated in two different places. One goes into a self-directed IRA, where I’m the custodian, and then you have another one which you have. They call you teammates and you t you gimmes, they’re custodian accounts for children and what you can do with those is that once the money is placed in that you can invest those into an ESP 500 index fund. So I’m letting him reap the benefits of compound interest. So my goal for him is to be liquid at least 5 to $6 million by time he’s 18 and it will have a ton of properties. You know, if I start with that goal of 3 to 4, at least minimum of two, I’m not doing a 529 for him. You’ll have you know, he’ll have the properties. Once I actually refi the properties for them, they will go now into a trust form.
[00:18:23]:09 –
Noel Parnell
I choose an irrevocable trust. So that’s the ones I use. So they’re not subject to income tax and estate tax and within that they’re revocable trust. You can have life insurance policies in there as well. So you can you know, I always say, you know, talk to your estate lawyer and your CPAs, but you can really set that up to really set up your children.
[00:18:43]:13 – [00:18:52]:04
Sam Wilson
That is awesome. I love, again, the creativity that goes into that. You didn’t mention here on the recording, how old is your son again?
[00:18:52]:17 – [00:18:57]:05
Noel Parnell
He’s he’ll be 11 months on the 70 of April.
[00:18:57]:05 – [00:19:02]:07
Sam Wilson
So he owns he owns a an apartment for every month he’s been alive.
[00:19:02]:15 – [00:19:03]:03
Noel Parnell
Correct.
[00:19:03]:09 – [00:19:04]:20
Sam Wilson
That’s awesome.
[00:19:04]:20 – [00:19:17]:02
Noel Parnell
And I’ll Split up half of my portfolio into a trust already for them. So I cut up my half and gave it gave it to him and you know. But yeah. To start him off right now, I think that’s that’s cool.
[00:19:17]:02 – [00:19:36]:24
Sam Wilson
That’s really, really cool, man. Your 11 month old son owns more real estate than most most people do in the world. So that’s that is really, really cool. We’ve got just maybe one, one and a half minutes left here. No. Well, we’ve got to sign off. I want to hear, if you don’t mind sharing how you guys are finding deals right now.
[00:19:36]:24 – [00:19:41]:24
Sam Wilson
I think you’ve seen some shifts in the market. And I want to hear what those are and how you guys are finding deals.
[00:19:42]:20 – [00:20:22]:11
Noel Parnell
I guess right now we’re finding deals directly to owner and that’s the and they’re very responsive now to this a lot of the mom and pops that own you know buildings they have like units between 20 and 60 unit buildings. Some of them have some bigger ones. The children don’t want them. And and they’re ready to get out. So I’ve been using different platforms such as either Costar or Rihanna, me and we’ll filter my class year built and I have a team that’s been reaching directly out to them and that’s been very it’s been a very good response currently within the last six, seven months.
[00:20:22]:20 – [00:20:27]:14
Sam Wilson
Right. And that flies counter to maybe what you were seeing a year, year and a half ago.
[00:20:27]:14 – [00:21:09]:08
Noel Parnell
Yeah, you wouldn’t get anything without a broker. And I would always tell people, you know, you know, if you’re looking at some of the top brokers and this is only my suggestion, don’t go after the top brokers. Most of those top brokers have been in the game for years. They already have. Their preferred list is better to maybe go in that brokerage and get someone that’s hungry just like you and build that relationship with them and you guys built to you or her, you know, whatever them what are now well built together and that’s I think that’s more viable than trying to go after the person that’s been a broker for the last 20, 30 years because they have their list already who they trust. That’s going to close the deal. You know, the heart that you get in there are really slim to none.
[00:21:09]:17 – [00:21:19]:11
Sam Wilson
Slim to none, man. I love it. Noel Parnell, thank you for coming on the show today. This was lots of fun. If our listeners want to get in touch with you or learn more about you, what is the best way to do that?
[00:21:19]:22 – [00:21:30]:07
Noel Parnell
Yes, I’m on LinkedIn. That’s my playground. So it’s no Parnell LinkedIn and also can be found on Facebook at no Parnell. Again, the IG right now I don’t have one yet, but it’s getting there.
[00:21:30]:12 – [00:21:34]:02
Sam Wilson
Awesome. Hey, thank you so much. I do appreciate it. Have a great rest of your day.
[00:21:34]:11 – [00:21:36]:01
Noel Parnell
As well, sir. Thank you so much for having me.
[00:21:36]:14 – [00:22:01]:05
Sam Wilson
Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. 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.
