Passive real estate is the generation of income without having to put in active work all the time in your investment. Passive income can be accomplished through various ways and one of them is this episode’s guest’s specialty: real estate syndication!
With syndication, you pool your resources with other investors into a single asset in order to profit from them.
Angie Aki went from wholesaling to real estate syndicator. She left her corporate job at 40 which was full of acquisitions, mergers, and layoffs to become an entrepreneur and real estate investor. She is the owner/founder of Ohana Investment Partners who’s aim is to bring the magic of passive real estate investing to as many people as possible to help out clients realize their dream and pursue passive income through real estate investing.
Listen to this episode to hear more about what she has to say! For the win!
What You’ll Learn on this Episode:
Who is Angie?
Angie’s start in real estate
What are the returns on investments?
Pulling the strings on commercial real estate
Doing your due diligence
Want to learn more about working with commercial real estate and syndication?
Connect with ANGIE@:
Email:
angie@ohanainvestmentpartners.com
Connect with Corwyn@:
Contact Number: 843-619-3005
Instagram: https://www.instagram.com/exitstrategiesradioshow/
Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
Email @: corwyn@corwynmelette.com
DISCLAIMER:
Wholesaling in South Carolina is an activity that requires a real estate license.
Shoutout to our Sponsor: ROBYN COLLINS
Do you want something more? More Meaningful Moments opportunities, deeper relationships and memorable experiences? Do you want to make a difference? If you said yes, a career in real estate could be the opportunity you're looking for guiding people to one of the most important decisions they will ever make. The purchase or sale of their home can be both rewarding and lucrative. Exit Realty is a revolutionary compensation model, training and technology that provides you with the tools you need to start and build your successful real estate career. Call me today. Robyn Collins, or R O B Y N Collins with Red Robyn Homes at 843-557-5003.
Transcription
CORWYN:
Good morning, good morning, and good morning listeners. Hey guys, it is a beautiful day. We are fortunate– if you are listening to this show that means that the day you are pulling them versus pushing them and we want to be excited in that moment because if you’re pushing them and you listen to this show, then looking at a world as a completely different place. So look guys welcome to Exit Strategies Radio Show. Hey, I am your host Corwyn J Melette, broker and owner of Exit Realty Lowcountry Group and beautiful North Charleston, South Carolina. Guys, as you can tell, we like to have fun. We got to give a huge shout-out to our listeners. You all rock. I’ve said this to you repeatedly. I appreciate that you all reach out when you catch me in the streets. Because y’all know what I do. I’m out here in the streets with you. Y’all are telling us how you like the show. And we appreciate and we’ve been taking that feedback. And we have been going out and getting the best guests to give us the best information so you can have your best results and live your best life. That is what we do here. So today is no different. All right. So look, we got somebody today and I’m gonna call her a matchmaker. But I’m gonna let her tell her story today. We have none other than Angie Aki. She’s the founder of Ohana Investment Partners. Angie, how are you doing today?
ANGIE:
I am excellent Corwyn. Thank you so much for asking. And thank you for having me on the show.
CORWYN:
You’re more than welcome. So, Angie, I want you to tell our listeners, who you are and what you do.
ANGIE:
Okay. As you mentioned, I am the owner and founder of Ohana Investment Partners. So I help people passively invest in real estate. And most of how I do that is through real estate syndications. So if you’re not familiar with real estate syndications, it is a really– a boiled down way to explain it, or a simple way is it’s almost like crowdfunding. So it’s a lot of investors coming together and pooling their money or our money to buy an asset. And often that is a larger asset, a commercial asset, such as an apartment building, or a portfolio, a short-term rental portfolio, sometimes land or land development. So typically within the commercial space. But it allows people to invest passively; truly passively, because people always ask is it really passive? Because people throw that around all the time, it is truly passive, so that you can enjoy doing whatever it is you love or want to do, whether that is being a real estate agent, whether that is staying home with the kids, whether that is sitting on the beach with your feet up, whatever it is you want to do, you can make money in passive real estate investments while you do that.
CORWYN:
So, I’m liking that when we’re behind the curtain in the studio, talking about being a matchmaker, so essentially, what it is that you, do you take people and match them together? So crowd-sourcing and crowdfunding, and pull these people together to invest in a particular asset, and for them to earn a return. And it’s passive because– and for our listeners, so you all understand is passive because you’re not choosing the asset. You’re not doing any work on it, you’re just investing your money and getting a return on your money. So let’s get the bread, let’s just put butter on it. That’s like just putting butter on the bread right there. That should be relatively simple, right?
ANGIE:
Yeah, it is. It’s amazing. And it’s not something I uncovered until I was 40. Or just a little bit before. I wish I had learned about it in my 20s. But it’s a great way to grow your wealth. And so my job is to find and vet operators that are running and operating these assets and doing the acquisitions and sometimes they’ll do the due diligence along with them. But so I’m vetting the operators I’m vetting the offering or the deal and then I’m bringing it to my investors either as a co-GP which is a General Partner or a Fund Manager. And then you as an investor or a limited partner are investing in this asset or this offering. And, if you think about it, you’re investing in an LLC or an entity. So then you are an owner, you truly are an owner of part of the asset. And yes, I like to say we do all the work and you get all the benefits as an investor.
CORWYN:
So you’ve been doing this now, you said corporate America, you left there, so obviously, you took tools, things you learned in that environment, that structure and brought them across into your own company. How long have you been doing this? And then the second part of that question is, like, what types of assets do you focus on? What class?
ANGIE:
So great question. When I left corporate America, I got into real estate investing, but I did not get into the commercial or the syndication space, I got into wholesaling single-family houses. So I’m not sure if your audience knows what that is. But for those of you that are listening, if you don’t, in essence, it’s getting a property or single-family house under contract, and then finding an end buyer for it and assigning the contract. So I did that for quite a while. It’s an active way to make money in real estate investing. So I decided I wanted to get into the multifamily commercial syndication space. So I did that. I’ve been doing that for about a year and a half now.
CORWYN:
So I got to give it a– Got a footnote on the wholesaling piece. If you’re listening to this show. And you’re in the state of South Carolina, wholesaling in South Carolina, is an activity that requires a real estate license. It requires a real estate license if you’re wholesaling in the state of South Carolina. That is my show. Disclaimer. Y’all heard it, there you go. So, Angie, you said you like to focus on multifamily properties. So let’s talk about that. And obviously, we’ve had, guests that we’ve spoken to that, that about syndication. There are different classes of assets. You got the larger apartment communities that are 150, 250 and up units, you got some are 500 and up sometimes, I mean, there are large developments, and then you have some that are kind of, what we say entry level 30 to 50 units, and then you have the mid that is like maybe 75 to 150 or so. Which particular round do you focus on? And then if you don’t mind, give us an example of what kind of return you’re seeing in the particular class that we’re talking about.
ANGIE:
Yeah, so I would say the multifamily that I’m focusing on is more around 150 units plus because to syndicate it and make sense for all parties, right? So it’s got to make sense for them investors, it’s gotta make sense for the general partners for that to happen often it has to be a larger asset. I’m not saying that you cannot syndicate smaller assets. So please don’t send any mail our way. You absolutely can. But typically, what I see in offerings I roll out are larger assets. 150 units give or take. I have also syndicated I’m a fund manager for short-term rental funds. So that’s a little bit different. So that’s 75 to 100 plus single families, almost like Airbnb or short-term rentals. So that both of those I would say, we’re looking at some other things as well for my investors. My goal is to— if an investor comes to me and is working with me, my goal is to bring various asset types, also, potentially very various asset classes, but various asset types, so someone may want multifamily or short-term rental or a debt fund and things and that so that they can diversify within the offerings that I’m providing. So that’s my goal. So we don’t, where we don’t necessarily focus on a specific asset type, although we do like multifamily. We do focus on the southeast United States in the sunbelt states, that’s it.
CORWYN:
Okay. Okay. Interesting, I liked that. I liked that. And again, what areas do you focus in, again?
ANGIE:
The Southeast United States and the Sunbelt state, so southeast: Arizona, Texas. So when you look at them when you look at the migration patterns, you look at the, you can look at moving companies and van Lines and where they’re going, everyone is pouring South. So it’s important because you want to invest where people are going, where the jobs are going. And so those are some of the things we do during due diligence is make sure that there’s job growth and population growth.
CORWYN:
Interesting. So for our listeners let’s boil this down a little bit. But for our listeners, where people are going is where you want to be. That’s where people are going. If they’re migrating there– spent well, you want a job market because if you’re handling a rental, people that are retiring, may not retire to rent, they may retire to buy. But if you’re in a marketplace, where there are heavy job opportunities, expansion industry, all those things going, then it makes sense to own an asset in that type of market. Because you will have a feeder, you will have people coming in and need to go to work, they will rent, and they’ll stay with you for a while, possibly before they buy. But you got to have rentals and stuff available because there’s a continuous flow of people coming in. That is awesome, Angie, that is awesome.
ANGIE:
Yes. And you asked about returns. So it depends on the offering. So that is my disclaimer. So as for one, I had a disclaimer, right? So do not wholesale in South Carolina without a license. I am saying every offering has different returns. So it does vary. It varies on a lot of different things. But ballpark, if you’re looking for an average annual return of 16 to 18%. That’s what you’re going to see. Our goal is to provide now for– shorter-term investments, this does not qualify, right? So it’s kind of an outlier. But for longer investments. So for five, or six years, our goal is to double our investors’ money within that timeframe, or darn close to it. So that’s when you’re looking at something called an equity multiple. And I don’t want to go down the terminology rabbit hole. But if you see something and say 2x or 1.9x, that in essence means you’re going to 2x or 1.9 times your money. So if you’re investing $100,000 and then 1.9x, you’re going to get 190,000 back at the end of that whole period. So the average hold period for a lot of syndications is five years. So those are just some of the key, there’s a lot more a lot other different things that you can look at as well. But those are some key basic things you can look at what is my average annual return? And what am I doing with my money? Am I doubling it, or am I coming darn close to it?
CORWYN:
So, Angie, I almost fell off my chair over here a moment ago, when you said 16 to 18%. I mean, most investors, they’re looking at projects, with a cap rate, 6 to 8%, and I mean, went through a period, some years ago, when you were lucky to have four to five, just the margins have been restricted so much. So now we’re talking about a return on investment that large and essentially, like you said, the, 1.9 times or whatever times, in these five years, man, you can’t put your money in the bank and get it to do that. You I mean, you can’t look at– look here!
ANGIE:
Do not put your money in the bank! You’re losing money if you’re putting money in the bank
CORWYN:
Exactly. And then, granted, you probably could, maybe if you’re lucky enough, you may be able to take that much money to play the lottery or go to the crap tables, but you don’t want to put it all down at one time.
ANGIE:
You can also drive down the street and throw it out the window.
CORWYN:
Hold on like this.
ANGIE:
You got it. You got it.
CORWYN:
Yeah, just hold it up in the wind, hold on, just let it go. Yeah,
ANGIE:
Same thing, same thing as the craps table or the lottery right?
CORWYN:
And people are protected obviously, you own a portion of the asset. So, therefore, you always have the asset regardless, to be blunt, you have your interest in the asset regardless of the return correct?
ANGIE:
You have your interest in the asset regardless of the return, but just like any investment, so here’s another disclaimer for me, right? So just like any investment, it is that. It is simply that. It is an investment. Every investment has a risk. So your risk is losing the capital that you’re putting into the investment. That is a risk. Now, does that happen every day? No. But it’s still an investment and it’s a risk. So I always remind investors you have to weigh all risk versus potential reward because it is that right? We’re looking at performance. We’re looking at projected returns, and they’re projected and we do the best projection we can, but it is still an investment. But yes, you are backed by a hard asset. So that’s one of the things I talked to my investors about, people, especially after last year, with a stock market, roller coaster, it was a lot, right? And people are like, whoa, right, Hands up, hands down, people are getting nauseous. But this with real estate investing, it’s backed by a hard asset. And what’s wonderful about commercial real estate investing is that you can force appreciation. So for your listeners, if you’re not familiar with that, if you’re increasing your revenue, or you’re decreasing your expenses, you’re affecting your net operating income. And if you take your net operating income and divide that by your cap rate, again, I don’t want to go by crazy terminology, but you are increasing the value of your asset. And you can do that very quickly. And simply by doing something like raising rents to market rents, providing covered parking, and valet garbage service, and if you’ve never lived in an apartment, you’re paying for valet garbage service because you don’t have to walk your garbage to the dumpster, it’s worth it, you write pet fees, late fees, things like that. low flow toilets, you’re reducing your water bill, LED lights. So it sounds really simple. But you can increase the value of your asset just by doing these little things and managing the asset. Well.
CORWYN:
You touched on a few things in there that I think our listeners can get something from this, we forget about the value added. But then we also sometimes are limited. So for our newer investors, sometimes we look and approach this type of property with the residential mindset, which is, is valued based upon location and all this stuff. Commercial real estate is valued based on its performance, and how much money, so if you, so if you increase the revenue, and lower the expenses, therefore you increase the net, then you can, in turn, increase the value of the property. So it’s worth more to someone else because people just want to return all their money, right?
ANGIE:
It’s all and that’s one of the things I love about commercial real estate investing, it is 100% based on financials, it’s black and white. I love the financial piece of it. And I love that, as an asset manager, or as a syndication team or an operations team, you can control the value of the asset much more than you can, in my opinion, with residential, because it’s based on financials, and so you can pull the strings for lack of better term and increase your revenue and or decrease your expenses.
CORWYN:
This is so interesting and I’m always as we do commercial projects, and we’re in this arena, more and more, it’s always funny to me, so I’m gonna give you two different things. I had a client years ago, who bought a residential property, I was an assistant, and he was the regional sales manager for a company that sold RVs. And we were in this process, I think it was like 45 days or something. It was taking the closest transaction. And he looked at me and said, Corwyn, this doesn’t make any sense to me. He said, Look, he said, I can sell up, he was buying like a 200 at some at the time. 20 some odd, right at $300,000 property. This was years ago, that same property is worth about five or six now. But he said, Hey, I can sell a $400,000 motorcoach. And I can finance it and close that deal in 96 hours and 4 days. From 72 to 96 hours. I’m done, right? People going in and drove off that said they finished? Why does it take you so long? But then for our listeners, we’re gonna flip on the commercial side. You could do a commercial deal. Once you got all the numbers and stuff put in front of if you got a lender or whatever, you can knock out a commercial deal in… Angie, about what period? Well, minus diligence.
ANGIE:
I was gonna say when you’re doing your due diligence, you don’t want to rush through that I’ve been there I’ve done that. Don’t rush through that. That’s a takeaway, do not rush through due diligence, they will bite you every single time. Through diligence usually takes 60 to 90 days your poring through not only the units and the asset but all the financial reports. So it’s super fun, but it’s important. But yeah, I mean, once you’re through due diligence, everything’s pretty much ready to go, it’s ready to roll.
CORWYN:
Exactly. And diligence is always important. You want to make sure you got time for inspections, and make sure you understand what you’re getting your arms around, Working with a consultant with a client now that purchased an asset, before me, and the being around, but before that they knew me and long story short, that asset has a significant amount of issues and problems that I’m not sure they knew. I don’t know what diligence they performed up front, but I’m just not sold that they knew. And you want that time to make sure that you have an opportunity to verify the condition of the property. What things have to be done on– and especially when you’re investing on, like, for example, you’re investing in a new market or a new area? You’re also missing, or you don’t want to miss if there are certain rules for the municipality. Maybe they got something, that okay, well, look, if you do X amount of work on this property, you’re gonna have to bring everything up to current code, which can be a major upset in your budget, if it was not planned, right?
ANGIE:
It can. I have an investor, who invested in another syndication, she came to my networking event last night. And she was on the road today to meet other investors, and they went to an asset that is not performing. It is not one of mine. And like, that’s my disclaimer too. They weren’t aware of that. And I think she said they’re having to redo all the stairwells in 18 buildings. And it may see– Oh, yeah, that doesn’t seem like a lot, that’s a lot of money. And that’s a lot of capital expenditures being poured into your assets. And that’s, that’s eroding your bottom line. So they’re trying to figure out how to save this asset. From itself, right? Because the asset should pay for itself. Because that’s the beauty, supposedly, commercial, real estate investing. So you want to make sure that you that the assets paying for itself, you understand the municipalities, the codes, anything like that.
CORWYN:
Exactly, and that’s very important. Because that does happen quite often, you have something, you have, have a property, I mean, we’ve over the years have encountered properties that, have old copper piping, and water system arose that. That copper is heating up. Excuse me, I’m sorry, cast iron, my apologies got that too. But the water system will erode the copper and create pinholes, you got leaks, cast iron, drain lies, those arose, they caved in, backs the plumbing up, Making sure you understand those things. And what happens sometimes, which we’ve seen, is people will tie in new plumbing to old, and you have a major issue, because that wasn’t supposed to be done, but they did it to save money. And in turn later, when it collapses or fails, it creates a much larger issue to be corrected for the new owner. Because the old owners like peace,
ANGIE:
I’m out. Yeah, I mean, you have to right? We’re in the southeast, and we’ve unfortunately had a large run of hurricanes, you have to know I’m sitting in Florida, right? Everyone’s insurance is skyrocketing. So you have to plan for that if you’re buying an asset, you have to plan for that. And no, you have to know what your taxes are going to look like. Right? Are your taxes resetting? Are they based on the new purchase price? Are they only incremental? What is it? So you have to know all that and some of the things you can’t necessarily base off the old numbers, you have to estimate or guesstimate what it’s going to be moving forward. And so it’s really important to know all those things.
CORWYN:
And you touched on something that we have not had a lot of dialogue about recently here on the show, but we will have going forward, which is insurance costs. Coastal areas are being– it’s ugly with insurance. I mean, I’ve had several conversations with professionals and I know that matter of fact, there was some information shared that I was watching a few weeks ago I’m out of Florida, um as to what you guys your your state is trying to do to mitigate those costs but condos are getting pummeled with this. I mean, you’ve had issues with condo collapse, building collapses, failures, and stuff, and complicate that with being in quote-unquote hurricane alley, It looks on paper and feels unreasonable. What is happening in the insurance round with that type of property? If so if you’re looking to buy that type of asset or build a condo building, It could be really ugly.
ANGIE:
Yeah, yeah, you need to know what you’re getting into. You need to know what area you’re in. We own a coastal condo. And so yeah, we just paid for concrete restoration. So we had assessed for that, and then we had a hurricane then we had a hurricane again. So we’re gonna get assessed for that. And then oh, by the way, we had a damaged interior. And oh, by the way, don’t get me started on insurance. Because whatever insurance you think covers, it doesn’t want to cover it. So now we’re renovating that, right? So you have to plan and that’s something really important too when you’re doing your due diligence as an investor because I said it was 100% passive, and it is once you’re invested. But it’s still important as a passive investor to do your due diligence on the front end. So you want to look at stuff for instance, like, do they have a CapEx budget capital expenditures? Do they have reserves? So if you’re looking at an offering, and there are no reserves, run away, because something is going to go wrong? Something they’re going to need reserves for something. So you want to make sure there are reserves right, you want to understand what the business plan is and what the value is, and you talk to the corpsman, sometimes you guys forget about the value adding. I know a lot of listeners are residential. Right? But the value added is huge in commercial real estate investing. So what is the value at what is the plan? What is the business plan? How are you going to force appreciation? How are you going to make money with this asset?
CORWYN:
So, Angie, we have quickly gotten to the end of today’s show, but I want there to be a couple more things I got for you. So number one, how can I listeners get in contact with you?
ANGIE:
So you can go to ohanainvestmentpartners.com. That’s my website, you can check out information there. You can sign up as an interested investor or for a general newsletter list there. And you can also email me at Angie@ohanainvestmentpartners.com.
CORWYN:
Awesome. So I’m gonna I got one more question for you. And I call this like the mic drop question. So if you could say anything that you could say to our listeners. Essentially, what would it be for you? If it was something that you, you said this early if you knew some of this stuff in your 20s. What is that thing that if you knew this before, would have changed the trajectory of everything? What is that you can leave as a nugget for our listeners?
ANGIE:
So I have two: one’s more personal and one’s more financial. So we’ll go with a financial one first. Take action, you should take control of your future. And that’s investing in things you know and understand. So maybe that is opening a self-directed IRA or retirement account or investing with your cash, I would have started passively investing in real estate before I was 20. Because that snowballs very quickly your 100 grand turns into call it 200 grand in five years, then you totally invested 200 grand back another five years. It’s 400, it snowballs very, very quickly. So the sooner that you can start passively investing in real estate and snowballing, not while you’re focusing on what you know, what you love, or whatever you want to do, the faster you can grow your wealth. So take action, and start doing that immediately. Sign up as an interested investor, there’s no obligation, start looking through the stuff and start asking questions. So that’s a financial piece. The other piece, I’m a huge proponent of owning your dream. I did not realize that entrepreneurship was an option. I just grew up, I went to college, I got a sales job, and I did well in it. I built a career, I made a lot of money, I had no desire to do it. And I stumbled upon real estate investing and went, Oh my gosh, this is why everything in corporate never made sense. I didn’t know I can be an entrepreneur. And so I realized at the ripe age of 40, that I wasn’t owning my dream. So I turned my life completely on its head and went out on my own, started my own business. I’ve never looked back. I love what I do. I love helping and inspiring people. And most importantly, I love inspiring people to own their dream because we have one shot at this life. So make sure it is the life you desire and you deserve and please inspire and help other people along the way.
CORWYN:
Wow, that is profound. listeners. Look, y’all listen to the show. Y’all should have taken something out of that. Right there. We always talk here Angie, about having a mindset that is conducive to your success meaning that you believe greater, you aspire to greater therefore you will achieve greater. So thank you so much for dropping that jewel that nugget for our listeners today. Angie again thank you so much for being our guest today. Thanks for being part of the Exit Strategies Radio Show Family. I greatly appreciate it from the bottom of my heart.
ANGIE:
Thank you for having me when it was a pleasure.
CORWYN:
You’re welcome. For our listeners. Guys. Look, y’all got it. Y’all heard it. Y’all know what to do. Y’all better go apply. Y’all better go make some things happen. So as we close today, y’all know how I feel? Y’all know what I say? I’m gonna put them two things together and say it to you this way. Which is I love you. I love you. I love you. And we go see you guys out there in those streets.
