Allyson, the Beginner who bought a $5 Million 66-Unit Apartment Deal is BACK, this time sharing the details of her newest acquisition, an $18 million apartment complex. Find out how she has gone from 0 to 314 units in just one year!
Allyson’s Syndication Strategy for Commercial Investing
It took Allyson six months to find her first deal, which was a seven unit. Four months after closing that deal, she found a 66-unit complex for $5 million. Then a couple months later she closed on a third deal, an apartment complex with 241 units. Here’s what she had to say about the strategies she used to go from 0 to 314 units in one year!
1. How did you find your deals?
Allyson: I found all three deals off market through the proprietary methods taught in the Commercial Property Advisors Protege Program. What that means is that there wasn’t a broker involved, instead I communicated directly with the seller. We went through the contracts together and then went into contract, due diligence and escrow from there. I think one of the big benefits of communicating directly with the seller is it enables you to understand their motivations better. Then you can structure the deal in a way that engages with them based on those motivations. You can build your relationship with them over time, and then if there are some unexpected complications in the process of closing, you can have those conversations in a more effective way.
Seller Motivations
The 66-unit $5 million deal and the 241-unit $18 million deal were from the same seller. He’s more of a flipper. He buys properties, fixes them up, leases out a lot of the units and then before they’re fully stabilized, he sells them. He had recently bought several new properties and needed to sell some of his portfolio so he could do a 1031 Exchange. So, he had a bit of a ticking time bomb and that played in our favor because we were able to purchase the properties within the timeline he needed.
2. For your $5 million deal you raised $2.2 million. This is an $18 million deal, how did you raise the $4.2 million down payment?
Allyson: I think most commercial real estate investors are looking for the one or two investors that can write a big check and raise all the money on day one. Unfortunately, I didn’t have that investor. Myself and my partners, we talked to several hedge funds, private capital funds and family offices, but the reality when you’re a beginner is that you don’t have a track record. So, for both the $2.2 million raise, and the $4.2 million raise, we ended up going to friends and family, and friends of friends and family and so on.
We shared the deal with investment clubs, with some smaller capital shops, and then just let people know what we were trying to do and why we believed in the deal. These deals were bought well below market because of the direct relationship we had with the seller and the lack of brokers fees. It had a great price and great returns, so we just had to tell our story and share it with a lot of people. With the 66-unit deal, after 300 or 400 phone calls and outreaches, I had 120 investors. For the larger deal, we made 800 to 900 calls and ended up with over 200 investors. So just a lot of sweat equity. We had a lot of conversations helping people to understand what we were doing, which ultimately turned us into better investors.
3. What made your deal so attractive to investors ?
Allyson: I would say a big part of investor confidence is the team. Our investors know that our team is experienced and committed to the success of these deals. They know that their money is going to people who will stay up late into the night, work weekends and do whatever is needed to ensure that their investment is secure and performing well.
Then beyond that, it was the deal itself:
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- We bought below market, so the price was strong.
- Favorable lending terms: We secured a loan at a high loan to value, meaning that the equity people were putting in was much more valuable, providing strong returns.
- Strong Market Dynamics: the apartment complex is in a great location. The market is growing economically, even with everything happening with COVID. People are moving into this area to get more space and jobs.
- Value-add Deals: the rents were below market. Both deals are places where we can pull a number of levers in order to generate more income, as well as allocating back utilities to reduce our expenses. They have a lot of different ways in which we can expand our net operating income and make the properties more valuable and force the appreciation over time.
4. Going from 0 to 314 units in one year is a lot, how do you manage the properties?
Allyson: I have third-party property managers for all of the properties, which I would highly recommend. You’re not going to have the time to acquire deals and build your portfolio and manage the properties. My properties are a bit geographically spread out from each other so I have a local property manager for the first deal that I did. Then I have a property management firm that is managing the two larger properties. That firm has a regional vice president that oversees strategy and we have a property manager that’s on the ground and leasing agents with maintenance staff.
So, we have a full team that’s helping to make these properties not only perform well and get the returns from collections and from leasing, but that also help us do capital improvement projects. As we have contractors on the ground, renovating units and resurfacing roofs, having that team is really helpful.
Asset Management
Myself and one of my partners deal with the asset management. We meet with the property managers once a week and are heavy handed in terms of the direction we want the property to run and making changes as we see fit. A big piece of what I do day-to-day is just making sure the properties are running well. And then the other big piece of what I do is looking at other deals. Turning the acquisition engine back on, underwriting deals, talking with brokers and sellers and continuing to build the portfolio. There’s no typical day in the life of a real estate investor.
Giving Back to the Community
It’s very busy, but it’s also one of the most rewarding jobs you can have. A couple weeks ago we had a ribbon cutting at Gulfwind, the 66 unit, where the chief of commerce came out and did the ribbon cutting. We decided to combine that event with a resident appreciation night. We have a pool there and we had snacks, drinks and a slushy machine. The children and parents and older people came out we played resident bingo. It’s such an amazing feeling to know that, as an owner, you’re responsible for the homes of 314 families. And you can make those homes better which is a big part of my personal motivation; being able to provide great homes for people, particularly in workforce housing where the tenant base is the working class.
5. As a beginner, going from 0 to 314 units in one year, did you bite off more than you can chew?
Allyson: No, I don’t think so at all. When you scale the business like this, the tools and the resources you need are there for you. I’m not doing it alone in many ways. I think if I was doing it alone, that would absolutely be more than I can chew. But I think part of scaling up is recognizing what your time is best spent doing. Then recognize when you need to get talented people on the team to help you make it a success. I think that’s a big part of continuing to scale up.
The target for this year is to get to 1,000 units. To accomplish this I must have structures that ensure our current properties are performing well. That will leave me time to raise capital, continue investing and do due diligence on other deals. Having a team, and then continuing to build that team out is what allows you to be able to scale up. Also, without mentorship in the Protégé Program, I could not have gone from 0 to 314 units in a year. I think Peter’s guidance and counsel every step of the way has been extremely helpful.
How to Strategically Structure Your Deal Through Syndication
The Deal:
Without finding a good deal, you have nothing. Here are the 3 pillars of a good deal:
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- The property is priced below market.
- You need to be able to raise the rents so that you can raise the NOI and force the appreciation.
- It’s in a good location. No one will invest in your deal if it’s in a bad location.
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Financial Model:
A financial model is a spreadsheet that shows you how to calculate the deal’s ROI, the investor ROI, and your ROI. It’s a complicated spreadsheet that we supply to the students investors in our Protege Program.
Investor Structure:
What are you going to pay your investors when they put money into your deal? These aren’t Allyson’s exact numbers but here is her structure:
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- She’s going to pay them an 8% preferred return, which means they get paid first before any other partners.
- There is a 75/25 split of the cashflow and the sale of the property in five years. 75% will go to the investors and 25% to Allyson and her team.
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Due Diligence:
None of this works if you don’t do a good job of due diligence on the property, the finances, and the legalities.
The Team:
Allyson isn’t doing this by herself. There are two components she needs to execute these deals. First she needs a property manager who is experienced in operating properties of this size. One of the great things about our Protégé Program at Commercial Property Advisors is we not only help students purchase their commercial property, but we also teach them the 4 pillars of management:
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- How to manage the manager
- How to manage their money
- How to manage the marketing
- How to manage the maintenance
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She also needs an experienced team. We’re part of her team, but she also has other people on her team that have multifamily experience.
Exit Strategy:
One of the least talked about aspects in this business is an exit strategy. However, it is a critical component in any deal. It’s important because it’s the way you’re going to get your money out to the investors and to yourself. We help our students develop a clear, concise, and conservative plan on how to execute this whole strategy from conception to exiting the deal.
Legal Team:
Real Estate Syndication, or raising capital from individual investors, is a legal process. To learn more about this process, watch my video called The Basics of Real Estate Syndication where I outline the basic legal requirements.
Raising Money:
Allyson raised over $4 million for this deal. Now some of you said that she has a rich relative as one of her investors. But let me ask you this, if you have a rich relative, why are they rich? They are rich because they make great business decisions. So, Allyson had to make sure she had a strong, structured deal to convince this rich relative to invest with her.
Close the Deal:
If you watch Allyson’s first video entitled Beginner Buys $5 Million 66-Unit Apartment Deal, you can see the process she went through to close this deal.
Rickey B. says
Hi Allison. You continue to go girl! Your story is quite an inspiration on getting back started into commercial real estate. Having Peter as one of the coaches is a blessed wonderful thing. And you given back to help others is all what it’s about being a blessing to others. Back in 2017 when I first heard Peter teachings about C.R.E. I actually said to myself that he was from God. And now many of your tenants are saying the same thing about you girl! That Allison must be from God! So keep up being just that, and you will most definitely get a 1000 unit or whatever you want in our blessed world from God. Many thanks Allison and you go girl. I am now behind you. Take care and much love❤️to everybody.
-Rickey
Patong Harbor View says
This is really an amazing story.
costas constantinou says
Go Go Go Alison!!!
Alex Al-'Adil says
Allyson, I appreciate you taking the time to share your valued experience you did great your inspirational now keep learning, keep growing the way at times may come with difficulties, but know relief is on the way. We don’t give up, your a good example of an overcomer.
Hamza A Hameed says
Alyson,.. you go girl, Instead of a Hi-5
you deserve a Hi-10.You’ve broke the code and Solved the Mystery,…(Mys-Story !) you go get that 1,000 UNITS, You R an Inspiration to us want to be,… and hopefully going to be RE Multi-Unit owners you are like our big successful SIS in the biz-ness
Cassondra says
Allyson, you are such a wonderful inspiration! Thank you for sharing your heartfelt story. All of the hard work you and your teams have invested is a blessing to so many in your city. I would like to do something in my city some day soon as well.
Thank you again,
CC
Matt Mitchell says
Allyson, I just wanted to say you have did something that I haven’t been able to do. I dont come from money and don’t know any one worth millions. But I love investing and not having a track record people dont take me serious. I have had a couple of off market deals way under market value but couldn’t find the funds, so I lost the deals. I’m not giving up when I see people that looks like me gives me the added confidence to keep putting my name and what I do in front of people. I’m still not sure how to gain credibility when you are not given a chance. You are an amazing woman congrats for what have been able to do in a short period of time great job
Joy Carroll says
So Amazing!!! Congrats Allyson! I know you will get to 1000 units soon, you can do it!
Kathy Cuevas says
Allison I’m impressed. So proud of you. Continuing wishes for your great success. You got this. No one but YOU determines your future. This is what I teach my Personal Finance students.
NC Tatum says
Allyson,
Congratulations!!!
I have been concerned about getting funds for my larger investments. My goal is to own at least 3000 units in the total portfolio. You have awakened the hope of getting the funds by using various methods combined, and then use the (Weighted Average Cost of Capital) to finalize the minimum return for a viable deal. I want to thank you for sharing your strategy, and Peter for sharing you with us. I am certainly looking forward to hearing how you have progressed. (Hint): You will probably exceed your next goal. You have great energy. It is my belief that others that have seen this short video, will appreciate you as much as I do. All the best to you.
Dianna and David Gentile says
Absolutely amazing
Livingston Thomas Jr says
Allyson, I am absolutely proud of your accomplishment and much success to your future goal(s). By sharing your story it gives me confidence and greater determination.
Congratulation!
will says
This is a nice accomplishment! In the end she was able to raise millions of dollar’s which is NOT an easy task.
Jerry says
Yes, sometimes we have to step out on “faith.” may you continued to be blessed, as an investor you have opened my eyes.
Jason Simmons Bey says
I am master this is the best way for me know when you get me a job offer for the spirit and what you think would be great for your help and I hope you have a wonderful weekend
James says
CONGRATULATIONS ON YOUR SUCCESS ACHIEVING THESE DEALS YOU ARE A GREAT ENCOURAGEMENT
THANK YOU 🙏🏽🤎👍🏾
Leshonda S Pulliam says
Congratulations Allyson ! This is an awesome example of focus and perseverance! I look forward to hearing about your next success story!
Kimberly Palmer Davis says
I’m on the path to acquisition of multi properties as it is the key to experiencing financial success and economic sustainability. To add, investors give back by cultivating recedency for countless working class families in their community. A pure win win.
Very informative and compelling story loaded with useful information. Due diligence approaches and strategies on how to execute a feasible plan certainly pays off.
Thank you for sharing this article, Allyson. Great work. Congratulations!!!
Dishawn T Irwin says
Keep shining Allyson. Very Inspiring and motivational testimony.
James Iglehart says
Great job Allison!! You helped me believe that it still can be done. When you said, “you were not going back to corporate and burned the bridge”, that was the key to all you’ve accomplished!
Your’re such an inspiration and I look forward to reading your book in the near future!!
General says
Congrats Allyson I can’t way to start using this program. Keep your head to the sky. God is truly blessing you.
Widmayer Osias says
I really like it and I would like to know more it.
Danny Bismark says
Great video. Kudos to Allyson and congrats to you Peter Harris and your Commercial Property Advisers. Much needed and appreciated inspiration and education!
Danny Bismark says
Great video. Kudos to Allyson and congrats to you Peter Harris and your Commercial Property Advisers.
Musa El says
Allyson, you’re truly an inspiration and positive role model. You’ve given so much and will soon be rewarded for all your hard efforts. I too hope to follow in your footsteps and become successful and determine to follow through. Best regards! Musa
Ray Curtis says
Allyson – Thank you for sharing your story. It is very inspirational to me personally.
I am also in Texas — near the Louisiana border. I am following your example very soon!!
Keep on the FOCUS plan!
– Ray
Dr Michelle Commosioung says
Excellent job Allyson. You’ve done a fantastic job thus far. I know you will make it to 1000 units by the end of this year (if not before). Kudos to you and what an inspiration for us all!!!
Matthew says
Allyson I’m inspired by what you just accomplished! I’m a beginner sending out my first campaign next week! Cant wait for the success God has in store! Keep up the great work and I’m sure you’ll accomplish you goals!
Kevin Taylor says
I really love this and I am looking to get started fairly soon.
Brian Wise says
Great job Allyson. Very inspiring and prat you reach your goals.
Brian Wise says
Great job Allison. Very inspiring and prat you reach your goals.
Bobby Thomas says
Congratulations Allyson! You are in a great process. I am at the six month period with two mail campaigns and still looking for the first wholesale. Your success gives me hope and assures me the CPA process works for “ newbies”! Looking forward to hear of your next property!
Daniel says
Yes I want Love.
kenneth finley says
You go Allyson!! Congrats and you made the correct decision to leave corporate.
Marjorie Cole says
Hi,
Is it possible for a non-profit organization to have a commercial property donated to them? Maybe a hotel or apartment complex that is fully paid for. Then the non-profit could sell the individual units at a low price to the public. They could own a room or apartment.
Shon Terry says
Thank you so, so much Allyson, your a true angle, I’m wiping tears from my eyes, your compassion and genuine spirit, to give back is all I needed to pursue a career in Commercial Real Estate Investing, KEEP UP THE GREAT WORK, Please continue to post your progress. Thank you for sharing, Love, Peace, Joy, Good Health , to you and your family at home and work. I’m available for an apprenticeship when and if one becomes available with your company.
Renata Wong says
Allyson ,I so proud of you! You did amazing. You not only invest on those buildings, you also care for the residents that is now your customers. I will be proud to he part of your next project as I’m an investor too. Not as big as you but have funds.
Congratulations