Sometimes, being the best asset on the market is not the best option. Listen to this episode’s guest to know why!
Alex Moore is the Founder and Principal at Greywhale Capital, a private equity firm focused on commercial multifamily. Graduate of University of Pennsylvania, Alex has over 10 years of experience in medicine and has taken her keen attention to detail to her full-time focus on commercial multifamily. Alex is a seasoned multifamily investor and is head of acquisitions and asset management at Greywhale Capital, which has doubled in AUM year over year since its inception in 2019. She works with close partners nationwide to secure assets that are tax-advantaged, stable, and will bring consistent returns for Greywhale Capital’s investors. Her number one focus is acquiring assets that are the best opportunities to meet the investment goals of Greywhale Capital’s investors.
Alex shares her journey into real estate investing, starting with one duplex and now owning and managing large multifamily properties. She emphasizes the importance of niche selection when starting out in real estate and the importance of understanding your investor base and cash flow play. More than being the best, Alex aims to be the affordable option in the market.
[00:01] – [06:52] Niching Down
- Alex on how she started on real estate
- Finding a niche in Multifamily Class B assets
- Why Class B is the most recession-resistant
- Looking for opportunities in markets within markets
- Focusing on a certain tenant class that could sustain additional amenities
[06:53] – [16:15] Their Keys to Success
- Always ask more questions
- Don’t over-renovate
- Improve turnaround time
- Make sure the rent comps are correct
- Hire team members who are aligned with the company’s mission
- Shift your mindset when it comes to raising capital
[16:16] – [17:06] Closing Segment
- Reach out to Alex!
- Links Below
- Final Words
Tweetable Quotes
“One of the keys to success has been improving our turnaround time on underwriting and getting really responsive with brokers. Because I think that’s the thing that is the easiest to let slip, but it is one of the key differentiators to when you’re putting in offers.” – Alex Moore
“Don’t get the best product on the market. I think you need to get something that’s a little bit under that… But don’t be the best thing on the block. Because we don’t shoot for those tenants. They totally exist. But when the market gets harder to pay for things, they’re going to look for a more affordable option. And I want to be that affordable option.” – Alex Moore
“I think you don’t realize how powerful that is until you start reaching out. I think also shifting from the mindset of ‘I’m asking for money’ to ‘give me an opportunity for an investment’ is very helpful.” – Alex Moore
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Connect with Alex! Visit the Greywhale Capital website or email her at alex@greywhalecapital.com. Follow her on LinkedIn and Instagram.
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Want to read the full show notes of the episode? Check it out below:
Alex Moore [00:00]
One of the keys to success has been improving our turnaround time on underwriting and getting really responsive with brokers. Because I think that’s the thing that is the easiest to let slip, but it is one of the key differentiators to when you’re putting in offers.
Intro [00:15]
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.
Sam Wilson [00:27]
Alex Moore is the founder of Greywhale Capital, a real estate private equity investment firm in San Francisco. She was a nurse practitioner, though I think she’s still licensed. But she started investing in real estate while working full time and now runs Greywhale Capital. They acquire tax-advantaged multifamily assets in landlord-friendly states and help accredited investors place capital in those assets. Alex, that’s a mouthful. Welcome to the show.
Alex Moore [00:50]
Thank you so much for having me. I really appreciate it. And yes, that was a mouthful. You did very well. And I am still licensed but I do not currently practice.
Sam Wilson [00:59]
Gotcha. Three questions I ask every guest who comes to 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?
Alex Moore [01:06]
So I started with one duplex and got there by just starting in my hometown, was remote investing at that time, but I knew it really well. And I wanted to get something for a future college fund. So I decided hey, I’m gonna get and get this duplex. I didn’t have any kids at the time, but I was like it’ll be a great investment and, you know, some stability outside of the stock market. And then now I do large multifamily. So I just made my most recent close, was on a 330-unit in Houston. So big progress from there.
Sam Wilson [01:34]
So wow, that is a lot of progress. What were some of the key iterations of your business along the way?
Alex Moore [01:41]
Yeah, took me a little bit to choose multifamily and niche down into it. So I think this happens for a lot of people who like real estate and get into it, you try a little bit of everything, like a little potpourri. So it took a little bit of time for me to find the thing that I liked the best. So we did short-term rentals for a little bit, I did a triple net industrial space. And I also did retail for like a retail center where you have fun to triple net leases. So we learned the ins and outs of that explored mobile home park storage units, but realize my risk tolerance really fits with multifamily. And I also realized that what type of multifamily is my favorite. That also takes a little bit to niche down on as well.
Sam Wilson [02:17]
Type of multifamily?
Alex Moore [02:18]
Yeah, you think a lot of people think okay, apartment buildings, you know, you can get an apartment building and that crosses the box. But when you start digging in there, there are a bunch of different vantages. There’s a bunch of different business plans you do on those and the returns look different based on what your plans are. And is this a cash flow play? Or is this something where you’re just making huge alpha and then gonna go into the next asset? So you track different investors for each play. And you find that there’s advantages to some and disadvantages to others. And so that’s what took some time to find that as well. My focus primarily on Class B, the reason why I do Class B rather than Class C or Class A, is because that has, I think, the most recession-resistant tenant base because they can afford rent they can afford their payments are good at doing both of those, and they will pay for the extras. So when you do a value add program, that’s the tenant class that really will pay for those.
Sam Wilson [03:13]
Now Class B multifamily is like plain vanilla for the real estate, multifamily investor. Everybody, there’s no disagreements on, everybody can handle it. Everybody wants it. How are you finding opportunity in that?
Alex Moore [03:29]
Yes. I think when you hear people, they’re like, this is what I want Class B, I want it to be an..
Sam Wilson [03:34]
Plus value add multifamily more than 150 doors. I’m like you and the rest of America. So how are you finding deals?
Alex Moore [03:43]
So submarkets, so I get really specific on what my market is within the market. So a lot of people say general areas, or they say I will buy anywhere in the Sunbelt, or I’ll buy anywhere in Texas. You’re not gonna get deal flow that way. And you’re not going to be able to get really competitive on your pricing or on your rent projections. So find the submarket within your market, and really know that zip code and then know your supply chain. One of the big things is folks will purchase and not realize where new developments coming in. I’m finding new development, I actually think it’s really helpful if it’s already in place. But if you’re going to be supplied ou,t if there’s going to be a bunch of new build coming in, and you’re putting in a value add program and there’s Class A coming in… the market and then you’re not gonna be able to hit your mark projections.
Sam Wilson [04:28]
Right. That’s a really valuable point there. Tell me about the term resiliency. What does that mean to you?
Alex Moore [04:35]
For an asset or for myself?
Sam Wilson [04:38]
Whatever.
Alex Moore [04:39]
Yeah, I think when we’re talking about an asset, I think it’s important that your asset is resilient to the market changes because especially right now, and we’re dealing with debt going up, we’re dealing with inflation, and we’re not sure if wages are going to keep up with that. Your asset needs to be not the best thing. Don’t get the best product on the market. I think you need to get something that’s a little bit under that. I mean, it’s been performing as well as it could have. Maybe it’s an operational issue, maybe it’s management on site. And then you look at where can I get that asset to be better and perform better, but not be the best thing on the block. Because we don’t shoot for those tenants. They totally exist. But when the market gets harder to pay for things, they’re gonna look for a more affordable option. And I want to be that affordable option.
Sam Wilson [05:25]
Right, absolutely. We’ve talked about all the time here on this show is when wage growth does not keep up with inflation. And even maybe, if there’s a market correction, and people start doubling up, and then you know, rent projections can’t be met. And all those things start to compound, what are you doing to protect yourself and your investments right now?
Alex Moore [05:46]
Yep, exactly. One of the things that I focus on is, is it a tenant class that could sustain some additional amenities. So when you’re in class C, they’re not going to really sustain additional amenities like valet trash type packages, or adding an A backslash, they’d like it. But it’s really not something they’re going to pay for, it’s going to be something that is assumed to be lumped in with your rent. So you can pull in those extra things because you’re in a good market, where that is a demand, it’s not always a given. But if you provide that that would be an extra lever. What I love about that is you can add those in, but it doesn’t have to be part of your normal project plan. You’re gonna go in have your interior next year upgrade plan, we have these additional things, you can also add in that provide you more levers to pull. Another one that I really love, which I think is discounted, people don’t really think about it, but as a tenant storage is always an issue. And so if you provide competitive storage on-site, that’s a huge thing. If you don’t have to go down the street and pay $90 a unit, and you can offer something on site for 50 to $60. That’s awesome. And then I’ve got another revenue stream for really an affordable build cost.
Sam Wilson [06:52]
Yeah, absolutely. Tell us about when I say to you that messing up is okay. What does that mean to you?
Alex Moore [06:58]
So, I think I’m leaning towards, I’m an analyst, and I also lean towards perfectionist. So if I don’t have the answer, or if I don’t have a plan for it, it makes me very uncomfortable. So I create a plan that’s A, B, and C. And that gives you a way where if plan A doesn’t work, you got Plan B and C. So it’s okay if plan A doesn’t work out because you got it back up. And also, you know, real estate in general is pretty resilient as an asset to invest in, because we’ve got ideally, so many ways that you can make it profitable. And you can hold longer if you need to, if you’ve got good financing terms. So you know, there’s ways to mitigate it, you have to have a good plan and a good operator who’s made sure that those contingencies are in place. But I think a lot of folks say I’m not gonna invest in real estate because there’s too many unknowns. And I’m too concerned about X, Y, & Z things. And I think it’s better to jump in and do it than to avoid it as an entire thing. So one of the best things to mitigate that anxiety is to, like, ask more questions, and more knowledge that you know, but then at some point, you got to jump in and do it.
Sam Wilson [08:03]
What are some things you feel like you have messed up? But yeah, it turned out all right, in the end.
Alex Moore [08:09]
Yeah, one of the things that and that’s part of why I chose Class B as I started in class C, and I found it so easy to over-renovate, so you can spend more on these assets because they need it. And there’s a lot of skeletons in the closet for deferred maintenance. And that goes very quickly when it comes to CapEx, and then on top of it, then you need to get your interiors updated so that you can get better rents, but it’s very easy to over-renovate those units, and then you won’t get those rents there.
Sam Wilson [08:38]
Right, yeah, no, that’s absolutely true. It’s very easy to over-renovate. And it’s also very easy to blow your budget, just bringing them up to something habitable.
Alex Moore [08:47]
Exactly, something that meets good.
Sam Wilson [08:50]
Right. It’s not even maybe that you’re putting in granite countertops and stainless steel appliances, it just gonna take you more money than what you budgeted for. That’s a really good point. And how many of those Class C properties did you buy before you said, maybe I’m in the wrong spot?
Alex Moore [09:04]
One.
Sam Wilson [09:08]
Good for you. Yeah, you stuck strictly, you’ve done a whole bunch of different, you said you’ve done short term rentals, you’ve done triple net leases. But now you’re solely multifamily. Is that right?
Alex Moore [09:18]
That’s correct. Yep. And part of the reason for that is, I think industrial has a great play there. If you’re in the market, you know, you’re leasing brokers, because it’s all about those leases, getting the right tenants in. And when you’re locked into a lease, it’s a five to 10-year term. So you need to make sure that your rent bumps are in there, and if they don’t pay, your values down, so I think there’s a little bit for me more concern. If you get an anchor tenant and you’re dealing with a national tenant, certainly they have, you know, they’re accredited so they will pay, but they also are really competitive on the lease renewals. So you’re not going to make as much on your returns. So that’s one of the reasons why I pivoted out of industrial. I know a lot of people are playing in that space, more power to the, because I think it is a good space, if you can be the person who can take a building and lease it up to market. And you know, the people on you know the tenants to put in there.
Sam Wilson [10:08]
What has been one of the keys to success for you and for your team?
Alex Moore [10:12]
So one of the keys to success has been improving our turnaround time on underwriting and getting really responsive with brokers, because I think that’s the thing that is the easiest to let slip, but it is one of the key differentiators to when you’re putting an offer. So we do a turnaround time and we’re getting faster at it or doing a turnaround time in under a week. And I think you can get there, the big guys are doing it in a day. That’s where my goal is, is that we’ll get there in a day. But I think if you’re able to say you put in a verbal and then you put in an LOI within that week timeframe, that’s a big differentiator.
Sam Wilson [10:47]
When you think about that, you’re compressing timeline, what do you think some of the things you guys are gonna have to implement that will make that possible?
Alex Moore [10:56]
The biggest linchpin is making sure your rent comps are correct, because I think it all comes down to that. Everything else is gravy, it’s great that you need to make sure that your rents are 100% accurate. So having a really good property management partner who can verify your rents and turn that around quickly is important. And then also having enough people to be able to call and verify rents on the ground. And it’s just manpower, and it’s just getting it done. So picking up the phone, making sure that your rents are accurate. I mean, you can use Yardi and CoStar as well. But I want to make sure that mine is the best for right now what’s happening.
Sam Wilson [11:30]
Right so it sounds like you use, you already in CoStar initially as a kind of a soft pass. But then yeah, you’re gonna actually get out there, boots on the ground and hit the phones and find out what other rent comps are in the area.
Alex Moore [11:42]
That’s correct. Yep. And so that time spent is valuable. But that is, you know, sometimes people don’t pick X, sometimes you don’t need an answering machine. And those are actually good indicators to have how well are those managed in the area. So I like it as a soft check to for Hey, what’s the competition? You’re here? Alright, hey, folks that are hungry to get people into units or are they fall and it doesn’t really matter. So maybe they’re not pushing rent, or maybe the demands in that area are so high that the all area buildings, they don’t have anything available? These are all great things to pick up while you’re doing that calls.
Sam Wilson [12:12]
Right. Yeah, getting your rent comps figured out in a shorter fashion. You feel like otherwise, you could get this turned around in the day yourself. No big deal.
Alex Moore [12:21]
Yes, if we can get the rent comps verified that night, usually that’s like, you know, 24 or 48 hour and then making sure our PM does a pass on it too. So then it turns into like three days. And that part is like oh, man would love to speed that up.
Sam Wilson [12:35]
Right. Tell me about your team. What is it been like to build a team? And then also tell me about your experience raising money.
Alex Moore [12:44]
Yeah, so building a team takes time, I think it’s easy to hire quickly. But what I’ve learned is to hire slow, do multiple phases of interviews. And then to have an onboarding process. I think a lot of folks, you know, as an entrepreneur, you expect folks to just pick it up and learn it. But you do need to have an onboarding process need to have regular check-ins, regular meetings, and we do three rounds for the interview. So we’ve got a first initial screen, a lot of folks drop off after that. And then we have basically a first pass assessment. So you do whatever the task is, or whatever the job is, you do like homework, and then we have a real interview. And then after that, we make a final decision. And that really helps because you’re not gonna have to do a lot of interviews. Because a lot of people don’t make it through those first couple of hoops. And then with building a team, it’s creating a culture of who want to show up and are excited to be here. So people who are eager to learn folks who are not just there to clock in and clock out, but people who are there for the mission of the firm. And I think that’s a real big thing. So communicating that making sure folks are excited about that. And people will join in when they excited about something challenging and something they also believe in.
Sam Wilson [13:49]
Right. Yeah, that’s been one of the interesting shifts. I think that we’ve seen the workplace environment as a whole, not that I’ve ever really been very active in it. I guess I kind of read it. You know, I hear they’re talking about it is just defining that mission and getting team members like people more now more than ever want mission behind what they do as much as they want, you know, a good steady job and a good paycheck. So I think that’s really intriguing. Tell me about capital raising, getting capital raise for your deals. Yeah. walk us throught that journey.
Alex Moore [14:17]
Yeah. So for capital raising, it’s all been through family, friends and extended network. I think you don’t realize how powerful that is until you start reaching out. I think also shifting from the mindset of I’m asking for money to give me an opportunity for an investment is very helpful. Because then it reframes for me and it also reframes for the folks that we have as investors. We’re providing them an awesome opportunity. I mean, they don’t get access to this on last year, a multi-millionaire or billionaire family that can direct buy apartment buildings like that’s pretty bonkers. The barrier to entry for that is huge. So me, myself, do I you know, love the capital raising part? Probably not. I love finding the deals and sourcing them and I love going to market and walking properties like those are my favorite things to do. But I can always talk to an investor and explain all the metrics, because that’s what I’m doing all the time. And I think that’s, I love those calls. Like if someone has a bunch of questions about it hit me up. I got it.
Sam Wilson [15:19]
That’s awesome. Yeah. And I think that’s a great mindset shift that a lot of us would do well, myself included, to commonly remember. That it is amazing opportunity. I’m bringing double-digit sometimes in returns to people, you can get lucky, you can find it. But it’s not every day that you get such a stable opportunity to get returns on a risk-adjusted basis. It’s like, Wait, this is bonkers. Use your word. So yeah, that’s really cool. I love it. Alex, thank you for taking the time today to come on the show. You can kind of pull back the curtains on what it is you guys are doing submarkets within the market specializing in that knowing your supply chain talking a little bit about debt and inflation just talking a little bit but also you know how messing up is okay in this business, because generally it’s fairly resilient. There are mistakes you can make that are probably pretty bad ones. But by and large, it’s a pretty forgiving industry. So thank you for taking the time to come on. If our listeners want to get in touch with you or learn more about you what is the best way to do that?
Alex Moore [16:18]
Best way is through my website or email so great. greywhalecapital.com. so grey spelled with an E and then alex@greywhalecapital.com. Or I am on Instagram though I am not a great Instagrammer Alex more in bass would love to connect with anyone who wants to touch base.
Sam Wilson [16:36]
Awesome. Thanks, Alex. Appreciate your time. Have a great rest of your day.
Alex Moore [16:39]
You too. Thanks so much for having me.
Sam Wilson [16:40]
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.
