Need that push to start investing in multifamily? Then, this episode is for you! Today’s guest is George Roberts III, a multifamily investor, syndicator, and Principal at Horizon Multifamily, LLC. He is also the podcast host of The Foundery – Where Leaders are Forged Daily! In this episode, he plainly states why you should start investing in multifamily real estate. George even encourages that you let your first deal be in multifamily. Want to know why? Tune in and get motivated with advice on investing mindset!
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Mindset Tips To Start Investing In Multifamily With George Roberts III
George Roberts is a multifamily investor and syndicator at Horizon Multifamily. They are focused on value add opportunities in Central Florida. He’s also a Founder of Walnut Grove Homes, an upscale residential construction company based in Troy, Michigan, which reached a seven-figure status in 2021. He also hosts The Foundery – Where Leaders are Forged Daily. It’s a podcast devoted to entrepreneurs focused on syndication as well as both active and passive multifamily real estate investment. He’s working on his two first apartment syndications, which are 34 units in Knoxville, Tennessee and 104 units in Louisville. He also owns a fourteen-unit apartment in Orlando. It is a joint venture, which is nearing the end of a very heavy reposition. He is also a passive investor in 468 other doors.
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You got a lot going on. I look forward to having you on the show. Thanks for showing up.
Thank you. It’s great to be here.
The pleasure is mine. I have the same three questions I ask everyone that comes on the show. Can you very quickly tell us where did you start, where you are now and how did you get there?
I was a family landlord many years ago. It was a great place to be. I love the cashflow. I didn’t take it too seriously and I didn’t look at it as a business until much further along. What I’m investing in now is multifamily. It’s a great place to be. It’s the same old idea, only with those economies of scale and the opportunity to build an amazing team, which is something you don’t get to do as a single-family investor. It is not at the same degree. How I got here, I would say is dogged determination. Everything I’ve done, from completing a PhD to becoming an investor and having multiple side hustles. Determination is the best thing that will see you through any event.
Talk to us about that. What’s your source of determination? What drives you?
You always got to want that desired thing, whatever it may be, more than you want your present life. If you want it well enough, you find a way and if you don’t, you find excuses.
That’s well said. What have been some things that you’ve had to overcome with determination that was setbacks or roadblocks in your investing journey?
I was going to take it a step back further. We talked about determination in general. I would say health issues early in life. I had some issues with my joints some arthritis, osteoarthritis and that’s a pretty major thing to overcome. I had to figure out how to do things more on the computer. I lost a little weight, focused on low-impact exercises. I would say that right from a very young age, I had that lesson.
I went into doctoral studies and again, it’s all about determination. It’s an intellectual achievement but I’ll tell you that you don’t go through the valleys and you don’t get to stand on the mountain unless you have that determination so as for investment and how determination has seen me through there, it has always been a side hustle for me. I’ve always got multiple entrepreneurial ventures going on. I’m still working in FinTech in a data science role so I’m still using that old PhD. It still comes in handy. It’s all about determination. You’ve got to find a way to make those evenings and weekends productive when it’s a side hustle.
You’re in FinTech now and also running a residential construction company is that correct?
The residential construction company had the opportunity to move aside. My sister and brother-in-law are taking that. I did help them to get that launched and that was very exciting. What I would say is that I was really bitten by the entrepreneurial bug. When I was a single-family landlord, I didn’t look at it as a business. I thought of it like, “This is an investment. This is good and fun. I’m enjoying this,” but I’m in the lab all day long. I didn’t look at it and felt the excitement but when I got into construction, I did. I felt that that true excitement.
I don’t know what to say. You’ve either felt it or you haven’t and if you’re reading this, you’ve probably felt it. Once I did, it’s like a light went on and from that moment, It’s like, “I’ve got to have an entrepreneurial venture,” so I thought, “What do I know?” I know landlording, real estate and I have this FinTech background so I want something that rolls it all together. Multifamily or commercial real estate, in general is the way to do that. It has all the pieces of the pie and because it is a team sport, it doesn’t really matter how busy you are. You can play a role on the team.
Before we get into what you’re doing in real estate, tell us what you’re doing in FinTech. I’m talking outside of my league here so I’m going to lean on you on this question. What do you see are the technological opportunities inside of real estate?
Determination is the best thing that will see you through any event.
I thought you were going to ask me about inflation when you mentioned finance. In FinTech, I build models and that really suits who I am. I come from an empirical science background so I take a different approach to that. I understand statistics but I’m not coming from the background of just understanding computer science or statistics. I’m an experimentalist. I build models that help the business make better decisions and that’s exciting because as an entrepreneur, I am a decision-maker so the ability to lean on data is a very important thing.
As for what technology is going to take us to the next level in multifamily or commercial real estate, I don’t know but it’s happening all over. We got the internet of things nowadays. We have everything potentially from your keyless entry, all the way to changing even the windows. People think of things like a thermostat as being a smart technology. You’ve got all kinds of things.
I grew exotic plants. Now, I got a single remote control and all the lights go on and off, which is a great thing because there’s a lot of UV. That does not impact the commercial real estate space but to get you thinking, everything we do these days can be linked together. I think it’s going to be something with that internet of things.
Walk us through FinTech. What is the day job? For a guy outside of that space, what does that mean?
I try to avoid that in a detailed way but for me, it’s a pretty busy day. It’s a lot about time management. Having learned to be an experimentalist gives me an edge or a leg up. I manage my time and I’ve got a virtual assistant and that really helps. I focus on certain themes during the day and then in the evening, I’m a little more freed up to focus on entrepreneurial ventures.
Let’s talk then about how you broke into commercial real estate and what that looked like. Talk to us a little about that journey.
It’s a very exciting journey. One of the things I’ve noticed as a total commonality among all my contacts is I’m connected with people who use the pandemic to their advantage. Before the pandemic, I was going to every meetup in town and watching 10,000 YouTube videos. I found my team before COVID shut everything down and I’m in Michigan too so we shut down earlier than a lot of people. I barely made it in and I got to say that that has been one of the most exciting ventures.
You got to seize the day and take every opportunity you can find because you don’t know what can happen tomorrow. It could have been very different if I had not found that team ahead of time. During the pandemic timeframe, I’m finding deals. I became a hard money lender, I invested in other people’s deals and used all that time that I wasn’t out on the road or the bus and rolled it and plowed it all into entrepreneurship.
What were some of the first deals you got done? What did you like and not like about them?
Why don’t we start with hard money? What I liked is the 12% and that sounds amazing. I’m getting a better return than I did as a landlord and I’m doing hardly anything. On the front-end? Sure. I vet the deal and after that, I collect the check so I like that. What I didn’t like is that the next thing I realized was why am I not an LP in a multifamily deal, which I had already been long on that journey.
I would say to people, “If you’re out there in the single-family space and you’re wanting to make the jump, do it because if you can vet your deal halfway decently. The likelihood is high that like me, you will find that you’re able to do much better even passively than you can as an active operator in the single-family space.” Jumping up into the multifamily space and how I did that, it was all about finding the team. Once I found the team somebody brought the deal to me.
With so many ventures, that was really key. It’s hard for me to be out there doing the underwriting and making all the connections to the brokers so I’m happy to perform other roles like asset management. I love raising capital and due diligence. To me, it’s all about the deal. The finance end of it is exciting. Everybody talks about the law of the first deal and it’s so true. You go out there, you look for that 100 units or more and that’s great if you find it but if you find something that pencils, take it because you will get more credibility out of doing a 5, 10 or 20-unit than you will by any number of other activities, events or steps along the way.
That’s a great piece of advice because everybody’s looking for that knock-it-out-of-the-park first deal. Getting your reps in early on is probably a more important first step. You met your team, met your people that are doing good stuff and you said, “I’d like to partner with you.” How did that conversation go?
I was lucky. I went to a meetup near my house. Everybody says, “Multifamily is an advanced technique. Do this for a long time. Get 5 or 10 single-family houses.” I think that’s the worst advice. If you have the inclination and if you’re the type of person that wants to go into multifamily, do it and make your first deal in multifamily. It doesn’t matter even if it’s residential multifamily. If you house hack a duplex, a triplex or a quad, you are well on your way. I think that it’s the concept that counts. Five or more is commercial and that’s a very important cutoff but whatever you do, even doing a duplex is going to beat the hell out of your average single-family deal.
I went there because it was easy and it was close. The next thing you know, this guy says, “We’ll teach you how to underwrite a deal.” I thought, “That’s perfect. Let’s do it.” Now, he and I are running the local meetup so it was a pretty amazing turnaround. From there to the pandemic, to then getting to meet people face-to-face, we came out on the other end running that group. It’s a great story. Every time I go there, I think that I started out on the other end of the table not so long ago.
It’s one of those things that once you get your niche and you figure out how to stay in your lane, it’s not that hard. I know you said you love to build models. You’re very computer savvy and detailed so have there been any things on the underwriting side that you felt like you tweaked in a meaningful way as opportunities were brought to you?
I think that it’s all about diligence. When you talk about the numbers that go into a commercial real estate transaction, it’s not rocket science. It’s about diligence and getting things right, figuring out what in this market everything ought to go for, it’s about having the contacts and knowing what you can get your property management. These days, I would say it’s about creativity. You don’t look at what the property is worth and make an offer and probably win it. You have to get creative and that’s why I would say that it’s not a numbers game. You can’t be a number foe and survive but once you get to the point of, “I can balance my checkbook and I don’t mind numbers because I see the endgame,” you have enough math savvy to do this. It’s all about finding the story behind the numbers.
I’ll tell you about a great deal in East Tennessee. We’re going to close on this at the end of the month. This is mid-November 2021, as we speak. The story behind this is a personal relationship. My great friend, Tom Kirkpatrick out in East Tennessee, has been working on this deal for five years. He got to know the property manager/handyman and we were the only player on the field. The rents haven’t been raised in three years and when I say that the rents are under market, I’m serious.
We put a Facebook ad out and we found that people were willing to pay nearly $250 above the current average asking rate at that complex with the current pictures. We weren’t tweaking anything. We were getting tons of incoming messages within 24 hours. That’s what you got to do. You got to get out there and you got to be diligent. That’s going one step ahead. Everybody’s going to do market research but we put out the Facebook ad. We validated that there is a significant loss to the lease.
If you have the inclination and if you’re the sort of person that wants to go into multifamily, just do it.
That’s incredible if you can raise rents without increasing any expenses.
That’s what I like to call an idiot-proof plan. Even if the construction doesn’t go our way, lumber goes up 400%. We’re sitting pretty with that deal so I love it.
I understand that you love to sail. Is that correct?
I do. That’s one of the passions of my life. There was a time in my life that I was feeling a little behind the eight ball and needed a change. We got a small sailboat so I started to explore Lake Erie and live on that tiny thing but loving it.
Talk to us about some of the gotchas in sailing and then tell me, are there any correlations to the gotchas in commercial real estate?
You got to know your limits. I remember some of the foolish things I did when I was new. We were sailing out of the River Raisin, which was super industrial. I tie up the tiller, I’d get out on the deck, I’d lift the sails and everything and what I realized is that one of those freighters, if that thing comes untied, that’s curtains. I learned to know my limits and take a step back. The main thing is you want to be sailing tomorrow but I would say learning about people. Four people, 25 feet above, you get to know your family well when you’re like that. It’s like camping only a lot more comfortable. You don’t go for just a weekend but you go out for weeks on amazing adventures.
This was part of an award-winning Toastmaster speech. My wife started out calling everything a thingamajig. I keep trying to tell her, “You got to know the name of everything. That line right there, that’s the halyard and there are two of them so you need to know the difference,” but we got stuck in the squall and it was completely not predicted. It was a perfectly clear day and nothing in the forecast but the wind came up and started whipping us around. I’m out there and I’m being calm because I think that’s the thing to do. You don’t show fear out on the water or everybody who’s with you is going to be terrified and I think that’s a real lesson for leadership.
When I started to lead people, I realized that even raising an eyebrow, people take that. You can see it on their face if you make the slightest facial gesture so you got to realize how you impact people. I’m out there at the tiller, calm as can be and finally, I hear this voice from down below and my wife says, “Tell me what to do.” I’m thinking, “This is my wife telling me what to do.” Usually, she’s Miss Independent but after that, she came through.
I told her, “You can help me take down the jib,” and that was perfect because that was what was whipping us around and I just can’t control that from the cockpit. She took it down but by the time she did, the storm was over. After that, we had a completely different relationship not only with each other but to the water so you got to get out there. The big lesson I would say is you got to know your limits and you’ve got to get your systems in place. Now, we got systems in place and she knows what to do if an unexpected storm terrors her.
That’s it in real estate investing too. You’re going to have an unexpected storm. I always say that if you’ve never lost money in real estate, I don’t want to invest with you because you have not been tested yet. It’s the same idea there where you’ve got to have your systems and procedures. You’ve got to have been through a few storms and go, “We know how to weather this when the going gets tough.” Talk to us about your podcast, The Foundery – Where Leaders are Forged Daily. What’s that about? Walk us through the flow of that show and how that works.
Multifamily: You don’t look at what the property is worth and make an offer and win it. You have to get creative.
I’ll segue with another leadership quote. They say that anyone can be the captain in calm seas. The Foundery – Where Leaders are Forged Daily is all predicated on the idea that entrepreneurship is one of the greatest proving grounds for leadership talent. If we look at somebody like Henry Ford, he was 37 when he started tinkering in his own right. He was 40 when he founded Ford Motor Company. If you look at somebody like Steve Jobs, he was already an engineer and a leader before he founded the company but it was when he started executing on his own vision that his career took off. He ended up running one of the largest companies in the world and he took it from zero and that is amazing.
When I look at my own life, I don’t look at myself as an entrepreneur or a leader. I looked at myself as a tech guy but once I got bitten by the bug, it was nothing more than that helped me to kick things up to the next level, to become a great communicator and to do the things that I needed to do to develop as a person. For me, if entrepreneurship is about anything, it’s about personal growth. If you’re working for someone else, that’s great and I still do that. It’s still a good gig and it’s still good to be working for someone else but there’s nothing like going out there and being thrown in the deep end that will help you develop as a person.
What is it about? It’s all about entrepreneurship, leadership and mindset because I like nothing more than interviewing those people that will remind you of things. Mandy McCallister will tell you, “Mindset is everything,” and I’m going to try and take that one step further like, “Mindset is everything because not only does it determine what you are able to accomplish but it also determines what you make of what you get in return.” You could have any amount of money and if you don’t appreciate it, you’re poor.
I’ve never heard it said that way. Can you phrase that or say that again for us?
Your mindset determines what you’re able to accomplish but also what you make of what you accomplished and it’s true. Your relationships, your marriage, your job, your career, your entrepreneurial venture or what you have in life, even from the monetary standpoint, it’s trite but people say, “It’s not getting what you want but wanting what you’ve got.” It’s 100% true. If you have the mindset that, “I have everything I need in the world and I want to grow,” then you’re rich but if you feel like, “I need, I want or I got to have,” then you’re poor.
I look forward to tuning into the Foundery and listening to some of your episodes on that. That sounds like a lot of fun. I appreciate everything that you’ve shared with us in this episode. Learning about sailing, about the correlations there between that and real estate, how you’ve gotten into real estate and growing your commercial side of things with the deals and the way you look at them. I love all those things and I certainly appreciate that. The final three questions for you are these. If you could help our readers avoid one mistake in real estate, what would it be? How would you avoid it?
We waited a little too long to get property management. We had full-time construction for our heavy reposition but there’s so much value to that. Even if you’re onsite and you could be doing it and you feel like it’s no skin off, they understand the rents and the amenities better than you ever will from your market analysis. They’ll tell you what the granite countertops are worth, what it means to have stainless steel or whether the black appliances are plenty enough.
You’ve got to know your limits and you’ve got to get your systems in place.
You’re saying lien on your property management instead of trying to do it all yourself.
They’re going to have advice for your market and probably deals too that you would have never had in such detail and these are going to be deals that you would not have seen.
The next question is when it comes to investing in the world, what’s one thing you’re doing now to make the world a better place?
I love to give at any chance I get. I love to be charitable and to take care of my own children. The more time you spend with your kids, that is next-generation thinking.
If our audience wants to get in touch with you, what’s the best way to do that?
You can find me on LinkedIn. I’m there all the time on evenings and weekends, at least. If you head out at Horizon Multifamily, set up a call and if not, you can at least download my free eBook. Also, come out and find my podcast, The Foundery – Where Leaders are Forged Daily and if you’re a syndicator or an entrepreneur then reach out. I’d love to have you on the show.
Thank you so much. I appreciate it.
Thank you.
Important Links:
- Horizon Multifamily
- Walnut Grove Homes
- The Foundery – Where Leaders are Forged Daily
- LinkedIn – George Roberts III
- YouTube – Horizon Multifamily
- Instagram – George Roberts III
- Facebook – George Roberts III
- LinkedIn – Commercial Real Estate (CRE) Network Zoom
About George Roberts III
Horizon Multifamily focuses on repositioning C Class multifamily real estate along the I-4 corridor in Florida. I am currently an active investor in 152 units across these great United States and a passive investor in 468 units. I am also an owner at Walnut Grove Homes, LLC which focuses on residential construction in beautiful Troy, Michigan.
I am also an accredited investor who is open to investing in private equity offerings including, but not limited to multifamily construction and repositioning.
Check out “The Foundery – Where Leaders are Forged Daily” a podcast dedicated to entrepreneurship on Spotify: https://open.spotify.com/show/6IdYEVMoPoAzjPRDVj7ypu
Data Science and Genomics
It is a great privilege to use predictive analytics to drive business decisions. I hold a Ph.D. in immunology / microbiology an M.S. in computer science as well as a certification in data science. I led a team of scientists through a major protein interaction mapping project. My research on this and other projects has given me the honor of an Erdős number of 5.
