So you want to be a landlord?

One of the first duplexes I bought back in 2009 was infested with millions of African Killer Bee’s.

When doing my DD, we saw that there were a few bees always buzzing on the back porch.

No problem, I’ll get a can of Raid once we close.
2 weeks after closing, I get a call from my contractor who is screaming bloody murder.

“Bee’s, bee’s, bee’s!”

African Killer Bee’s (AKB) often nest inside the walls of abandoned homes - they love nesting in the insulation.

It’s damn near impossible to know that until...
You break through the sheet rock.

That day we broke through the sheet rock to start the kitchen rehab.

When an AKB is killed, it put’s off an odor that they’re being attacked.

Millions of bee’s started pouring out of the walls and stung, nearly killed one of my contractors.
What do African Killer Bee’s hate more than being killed, lot’s of noise.

Well next door, my neighbor was mowing his lawn.

He also had a litter outside of 8 puppies.

The bee’s swarmed over the fence and immediately killed all 8 puppies.
Imagine a black swarm in the sky that moves in unison.

That happened for hours. The fire department had to come out with a special chemical to kill them all.

The next day, when I got to the property, there were layers of dead bees (sometimes a foot tall) in the front yard.
My contractor’s were all fine.

The neighbor never forgave me about his puppies. I paid him what they would have sold for as a remedy (which my lawyer said don’t do, b/c it’s admitting some type of guilt).

I didn’t own the bee’s, but damn did I piss them off.
Moral of the story....if you see a few bee’s consistently swarming around the same place in an abandoned house, check for AKB’s.

I thought the world was ending that day.

The only good news from that project was stabilizing at a 21% YoC after 6 months of ownership.
It was good to be a buyer in 2009.

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More from @fortworthchris

19 Jan
My dad died 8 years ago and one of the most precious things I have left are a few voicemails he left me.

Nothing special about the message, except I get to hear his voice.

When I started the podcast, I said early on that if nobody listened, maybe my young kids would one day.
Getting some equipment to record a few messages every now and again that you can share with your kids later in life, isn't a lot of work.

Even easier, Download the @anchor app on your phone and record moments in time and how you felt.
Ex. for a small child.

"I was so proud of how you played your soccer game this morning. You scored the winning goal. Watching you light up when you put on your uniform for the first time was priceless. Love, Dad"

Just little things like that.
Read 5 tweets
7 Jan
When buying a deal, every day that goes by, the potential for tunnel vision grows.

Obsessing over executing detailed Due Diligence early and efficiently is paramount to limiting this.
On one hand, you have an acquisition fee at closing + all the upside you predict getting from operating the deal post-close.

On the other hand, you have pursuit costs building up and potential non-refundable earnest money.
The "spread" widens each day.

I.e. A $10M acquisition with a 2% acquisition fee - $200,000. You're hard $100k in earnest and have $50-100k in pursuit costs (legal, inspections, finance, title, etc.).

GP is now staring at losing $400k if the deal falls apart.
Read 5 tweets
13 Dec 20
One of the most underrated & overlooked skills a GP in REPE (or really any GP) should optimize for is “investor experience”.

Especially, early on.

Investors want returns, the bigger the better. Great returns over a long period of time are what keep a GP in business.
What else do investors want besides returns?

Transparency of good & BAD news, consistent & detailed reporting, quick responses to inquires, safely stored & easily accessible investment documents, quick K-1’s, etc.
LP’s want to be treated like a high valued customer, not a checkbook.

My mentor growing up beat this into my head early on, “Treat your investors like a customer, and you’ll go far in this business.”

Returns will always make their way to business or dinner table conversations.
Read 11 tweets
8 Dec 20
One reason we like Class B Industrial - we aren't competing against new supply, so we can forecast competition.

The lack of available land in city limits for industrial creates barriers to entry.

Often, even if there is land, it's not priced for industrial.
Lastly, if someone was able to find affordable dirt, the hard cost to construct is too high to make sense.

Most tenants in this asset class are using the space as a function of their business, with minimal attention to how "nice" it is.
Don't get me wrong, we always want to deliver a clean property, but tenants aren't looking to pay large increases in rent just to have something that is newer and nicer - so new development doesn't make sense.

Therefore, you see virtually zero new supply.
Read 8 tweets
7 Dec 20
I love getting updates like this from our Director of Technology @_gregadams_.

"We finished our first version of the “satellite feature classifier.” Basically, it takes satellite images and extracts features from the image using a neural network. This allows us to scan...
through large volumes of properties for features, we are seeking in our investment strategy (whereas county data and sources like CoStar have less reliability). I ran the classifier on about 190k parcels in Tarrant and Dallas and the results of parcels with high “industrial”....
are shown as the yellow dots below."
Read 4 tweets
2 Oct 20
Here are 6 takeaways from listening to the guests on 75 episodes we've recorded to date:

1. The perfect time to start anything you want to do is NOW.

There is no perfect time because it's always the perfect time.
2. When you work hard at something and are passionate about it, doors will open.

Several episodes are with people doing things for the first time. That doesn’t slow any of them down. In fact, it accelerates their desire to learn quickly.
3. The goal isn’t to be perfect; the goal is to learn quickly—because failures are guaranteed along the way.

In most conversations, some of the biggest ‘breakthrough’ moments were after a failure, not after a success.
Read 6 tweets

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