Keeping Your Fingers On The Industry Pulse

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Real estate investing has long been one of the proven ways to become wealthy But like any other business it s not as easy as it sometimes appears Wesley Yates is the Co-Founder of VFR Capital Investments a real estate investment company focused on the acquisition management and disposition of opportunistic to core-plus multifamily assets that can be repositioned on behalf of and for its investors With his years of experience in real estate space and management he shares valuable lessons on how you could start investing in real estate with little capital finding the best people for your team and how to qualify deals In late 2018 he turned down an Operations Management opportunity with Amazon to begin actively networking within the real estate investing community Quickly building relationships with other like-minded entrepreneurs he has created an extensive network of accredited investors who believe in his vision for methodically acquiring commercial assets Wesley is an enthusiastic leader and brings with him skills crucial to building successful teams and driving performance 00 01 – 03 14 Walking Away From a Job Opportunity to Get Into Real Estate Get to know Wesley Yates How Wesley led his team in growing their portfolio from zero to 862 units in just a little over 15 months 03 15 – 09 11 Learning from Failure Experiencing his first failed deal Putting up his own team together Achieving self-confidence with his wife s support Being willing to admit defeat and reflect on what went wrong 09 12 – 17 31 Tips on How to Stand Out and Succeed in Real Estate The bad advice he received while scaling When it is best to get greedy Learning to say No Take the time to build relationships with the gatekeepers How Wesley leaves a good first impression Know who you are working with 17 32 – 19 49 Closing Segment The best piece of advice Wesley has ever received Reach out to Wesley Links Below Final Words Tweetable Quotes It s not a matter of when you hit a problem It s not a matter if you have a problem It s a matter of when So who you have with you fighting those is really going to determine on how successful you are – Wesley Yates Sometimes you got to look yourself in the mirror and just really go what do you want What can you live with At the end of the day what can you live with Can you live with saying I failed to chase a dream Or I was too scared to try – Wesley Yates You can t make a bad deal good But you can make a good deal better – Wesley Yates —————————————————————————– Connect with Wesley Yates for commercial real estate investment opportunities Visit the VFR Capital Investments now and follow them on Facebook and LinkedIn Email Wesley at wesley vfrcapitalinvestments com Connect with me I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns Facebook LinkedIn Like subscribe and leave us a review on Apple Podcasts Spotify Google Podcasts or whatever platform you listen on Thank you for tuning in Email me sam brickeninvestmentgroup com Want to read the full show notes of the episode Check it out below 00 00 00 Wesley Yates One thing I will say and whatever advice you re taking it from vet out who is giving it right So if someone s telling you it s okay to overpay meaning you know what if it s a good deal and you believe in it then it s okay to get more aggressive on your price 00 00 28 Sam Wilson Wesley co-founded VFR Capital Investments a syndication company that is owned by a team of veterans and first responders He served as the CEO and he s led his team and growing their portfolio from zero to 862 units in just a little over 15 months estimated about 70 million in assets under management Wesley welcome to the show 00 00 47 Wesley Yates Thanks Sam I appreciate you having me on 00 00 49 Sam Wilson Hey man pleasures mine three questions I ask every guest come to the show 90 seconds or less Where did you start Where are you now How did you get there 00 00 56 Wesley Yates Where did I start I started at the bottom Where am I now Closer to the top How did I get there A lot of hard work racking my brain and most importantly having the right team by my side Because it s not a matter of when you hit problem It s not a matter if you have problem It s a matter of when So who you have with you fighting those is really going to determine on how successful you are 00 01 20 Sam Wilson Man I love that That s absolutely right Tell me when did you decide to take the plunge from smaller deals into larger deals 00 01 29 Wesley Yates So yeah like a lot of people I think you know they started with residential really wholesale And I was more like a plus one My wife was the one that was really in real estate I was on a contract to go to Amazon So I m like Yeah I m just here you know So as I was networking it was really that was the story But I got a phone call on July 19 of 2019 said Hey do you want to do some syndication I said Do I need a license for that They laughed I was serious But showed up the very next day and just started networking had about 250 cards in my pocket after the first event First conversation went something like this Hey what do you guys do They said You know we re investors investors investors I m LP and this many doors all that what do you do Oh I m gonna be raising capital for a group That s you know syndicating multifamily They asked me you know the typical questions what s your cash on cash What s your target IRR What s your total returns holding times I didn t know a single thing that they had said So I reverted back to my old days of being a leader in the military You never could say I don t know you could say I will get you the answers So that s exactly what I said You know those are great questions I d really like to get you the right answers So whenever we get closer to ironing out our numbers I d like to be able to get those to you Do you have some way for I can reach out to you later on Boom boom boom five cards went back to the group that invited me there said Yeah I have no clue what cash on cash IRR So back and forth I went for a good hour and a half of that event And still by the end of it was having full-blown conversation So cared more about the journey ahead and building momentum than how dumb I looked asking what people would call dumb questions So that s where I started And that was you know was that almost three years ago now So 00 03 15 Sam Wilson Oh and so you started off raising capital for somebody else Yes sir And is that what you do now 00 03 23 Wesley Yates No I will like I am now in a more the CEO route found out that I was better with my brain doing the operations overseeing the formulas the processes you know I ve got the whole six sigma training the you know I was gonna go work at Amazon as one of their manufacturers was the operations managers And so a lot of tracking performance tracking efficiency you know driving that all forward And so that s kind of what I did to our team and our processes is put a manufacturing engineer mindset to it And we really started cranking out some deals But it wasn t until I put I guess my own team together that I ever closed the deal our first year and a half of syndicating with other teams I was not successful 00 04 11 Sam Wilson What do you mean by that You were not successful I mean if you re putting deals together with other teams did all the deals fall through today 00 04 18 Wesley Yates Just yeah So in a nutshell the you know as I was raising a capital A you know raising capital for that first role for that first team You know there were some things that I found out later on once we really got into due diligence of our first deal kind of notice that or some unethical things that have been done in the underwriting some unrealistic things that had been changed in the underwriting to just make numbers work And you know I kind of rapidly dove into everything to where I could you know read the underwriting or at least started catching on to those things So yeah I had to say hey look I can t move forward with this deal in my better judgment and told my investors in good faith I cannot advise you to invest in This deal some of them kind of said Okay most of them respected that And one of them is actually now one of my partners on my company today So one of the co-founders of our company Robert Newbern was actually originally going to be a passive investor So you know less than I kind of learned a lot I mean still is you know you can have many different definitions to that But did I close a deal No I did not close a deal until I started my own team with the right people So up to that point it was more of an I was learning and it was a trial and fail and learn and move forward So 00 05 40 Sam Wilson what gave you the confidence to keep moving forward or being as the new guy to the space you re learning from some other people then you get involved and you put time effort and energy you re going to conferences you re shaking hands you re talking about deals you re you know have an investor conversation then you get halfway through it you re like oh wait I don t like any of this And I don t want to work with these guys anymore I mean that s that s that s a lot of setback for somebody new to the industry What gave me the confidence to say you know that I m on to something I just haven t figured out the right way to do it yet 00 06 10 Wesley Yates Well I don t know To be honest sometimes I made the joke that I was just too dumb to quit I guess it s that inner marine and us we hate failure I mean you gotta practically kill us before we ll stop trying Right And I think that s what it was is I still saw every step of the way I did learn I did grow So I was scaling up Even without you know closing something I went from just investor relations to you know operations of a hospitality company to a co-manager of 100 million fund So I was still scaling up and building up experience and building up skill sets learning more rapidly growing So I still believed in myself at the end of the day but I ll be honest a lot of it has to do with my wife My wife really supported me through all of that at the end of the day she she kind of let me know you know you can do this You ve got what it takes My family didn t feel the same sentiment of that you know a lot of my family flat out tell me you re you re an idiot What are you doing You walked away from a guaranteed paycheck with Amazon and all the bells and whistles To do this What do you what do you do So sometimes you have to look in the mirror and just really go what do you want You know can you can t What can you live with At the end of the day What can you live with Can you live with saying I failed chasing a dream Or I was too scared to try You know which regret Do you want to have And I felt like I would rather chase this thing down to the bitter end until I could catch it beat it and make it mine Before I wanted to say nah I gave up 00 07 48 Sam Wilson I think that s a valuable lesson And I m butchering this this quote but it s something like failure weighs ounces regret weighs tons Something to that idea 00 07 58 Wesley Yates one of the things that I think I ve read I ve read you know the little motivational quotes that and it s funny because I hate rah rah But some of those quotes still get me okay they still get me I think the one that really helped me when I needed it it said Winston Churchill says success is going into a new endeavor with the same enthusiasm You started the last huh And I was like well there you go So you know a lot of people say as long as you learn you didn t fail And I think that s one thing that you know throughout my time in the military throughout my time as an entrepreneur I realized that if you don t look back and reflect on the lessons learned the Hey what did I do wrong What did I do right Then How are you going to grow You have to be willing to admit defeat you have to be willing to meet to address Where did you mess up versus what s that And you know that s something that I ve always been able to do is look back on whether it was a successful takeover it was a complete fail Where could I have made that process better What can I have done What could I have had differently in place to make overall something move better in the future 00 09 12 Sam Wilson That s a great stance and one that is often sorely lacking in today s society is just that personal responsibility piece What s what is though perhaps some bad advice that you received during the scaling process Has there been anything that you dislike And somebody told me this and that was completely bogus 00 09 31 Wesley Yates It s okay to overpay 00 09 35 Sam Wilson Elaborate please 00 09 38 Wesley Yates One thing I will say and whatever advice you re taking it from vet out who is giving it right So if someone s telling you it s okay to overpay meaning you know what if it s a good deal and you believe in it then it s okay to get more aggressive on your price Like okay but then I stood back and I reflected on who was telling me that was the guy that required me to use his broker to buy his deal that gets paid on commission based on price So of course he s going to tell you it s okay to overpay But yeah I would say that right There is probably one of them That s still It s like no you mean in real estate And really anything you make your money on the bot right You make your money on the buy because there is a ceiling to a market there is a ceiling to to an industry and including into every asset So you ve got to know what that is and believe in your numbers stick to a criteria And don t fall for it You know was since we re big on quotes right now was Abe Lincoln said Whoa it was like find your stance and stand firm or something like that Like I probably butchered that one worse than you did But you know basically you know that s a lot of the advice that I look at from the you know true leaders and true successful people You know Warren Buffett is a good one I think right now in today s times it s never it s never been more true then be cautious when others are greedy and greedy when others are cautious right And as we are going through this syndication has never been more hot of a topic And I was looking at some people that were studying justification they say there s going to be a 60 increase of syndicators in the next two years So it s like wow And everyone s just trying to you know get there do get a deal Get a deal right So you know in some just being out flat greedy we ve had the lowest interest rates and you know whatever almost right And now we re fixing to go from that switch to where look the feds have just announced they re gonna rise again and be even more aggressive than the last race So and they re not done So now s the time to really be cautious and let others be greedy And then later when the shoes on the other foot and you know maybe we could see hey it might be a buyers market here soon That s when it s time to get greedy with the right plan 00 12 01 Sam Wilson Yeah that s for sure Give me that In practical terms though I mean you guys are still actively buying you re still actively looking at deals What are you guys doing differently now maybe than what you weren t doing Or what are you guys doing differently now that you weren t doing six months or a year ago 00 12 17 Wesley Yates saying no What I mean by that to elaborate is you re gonna have some opportunities that come your way And you got to understand is it a valid opportunity Or is it just a time suck Is it a you know risk How much risk is with saying yes how much risk comes with actually acquiring the assets We ve had a whole lot more deals that we had the opportunity to be a part of that we said no than the few that we were I will be under you know understanding looking back to where I was looking for that first deal And so hungry and so almost desperate for it it s hard to say no it s hard not to try to make something work But one thing that I ve realized very early on and I ve just instilled it into every one of my team members is you can t make a bad deal good But you can make a good deal better And that s really what it is of that is we screened more finally we stick to our criteria And at the end of the day as a syndicator you re not looking for deals for you Whether you realize that or not you re not looking for deals for you You re looking for deals for your investors right So what are your investors ultimately looking for Because if you don t have a seller if you don t have an investor you better have the money yourself So you know that s a lot of what we had to get you know more fine-tuned of what we re looking at and branching out to say you know what there are more markets than just my backyard 00 13 48 Sam Wilson What Yeah I like that Maybe that s you maybe you re gonna answer this question already But what are you guys doing to be competitive Like when you do put in an offer on a property especially in multifamily It s unlikely you re the only offer So what are you guys doing to be competitive 00 14 07 Wesley Yates So a lot of that goes back before you even make that offer A lot of that goes back and when people realize that this is a game of relationships with other co sponsors but more importantly with the gatekeepers that s what I call my brokers Ultimately the brokers are the gatekeepers to the good deals if they don t have a good feeling about your you and your capabilities and ultimately obviously it s not just me but when I say you I mean my team your team then they re never going to push your package forward in front of that seller You know example right now I was a good 300 I think maybe 500 000 under some of the other offers going into best and final But the broker liked our team to the point where he encouraged the seller to still take our offer even a lesser amount because of who we are and what we have done So even if you are looking at your first deal co sponsor with someone that has been there that has a sucessful track record that s how you can still overcome that But take the time to really build your relationship with your brokers Because that ll go a long way when the time really counts and do more than just put in an offer When I put in my offer I have a nice brochure that says who is VFR Capital Investments What do we stand for Why us the bios of every member the team and our portfolio and a nice PDF brochure versus just a letter just a you know a Word document bio or even worse an email Hey this is who I am in the body of an email So take the time you get one first impression to that seller I ve had sellers actually come to properties and come up and say Hey while we were doing our due diligence and they recognize us from our from the logo on my shirt it was like Oh you re the VFR Capital Investments team Yes Hey you know what guys I really want to let you know I really liked your story And your brochure really impressed me I had higher offers But because y all look like y all were more prestige and more sophisticated I ended up going with y all I ve been told that twice now on two different properties during the due diligence that the sellers had to come out just to meet us 00 16 23 Sam Wilson That s cool And that s that s a good gold nugget you know getting you know developing your relationships with as you call it the gatekeepers and doing more than just putting in your offers and finding ways And those are relatively almost cost-free ways You know to stand out some people are taking much more aggressive stances and putting down you know hey we re gonna throw in a half-million bucks of hard money day one whatever it is you know trying to stroke the bigger check which is you know that may be necessary to that s another card in the in the deck of cards you can play but I like what you re talking about They re just an easy way to stand out 00 17 05 Wesley Yates Yeah And I didn t have the deep pocket to go I mean I started this I was making 24 000 a year I was broke So you know having the deep pockets to be like You know what I ll just do a little bit more Let me slide this over there So I worked what I had and I had the ability to take the time to actually get to know who I was going to be working with And that was to me in some cases to others More important than how much dollars were on an offer 00 17 32 Sam Wilson Yeah absolutely What s one great piece of advice we asked this question earlier a bad piece of advice he received What s probably the best piece of advice you feel you ve been given 00 17 43 Wesley Yates Hmm that s a good one I think you would probably be you know that It s okay to say no I know I kind of discussed that That s really something that that I ve struggled with but it s okay to say no it s not an admittance of failure if you re saying no to something that is ultimately a dead end Right And that s something that I know some people might not relate to but you know everything that dangles in front of you is not it s not something that you need to chase they could just truly be a carrot on the stick 00 18 14 Sam Wilson Right Right You have the stick at the end of the carrot You gotta watch out for that stick Yeah yeah That s absolutely awesome Wesley thanks for taking the time to come on today really break down your story how you have found success the things you re doing to remain competitive protect your downside giving us some kind of insight on what you do to establish relationships with brokers and really just kind of your investment thesis and mindset that you ve taken and implemented to get you to where you are today If our listeners want to get in touch with you or learn more about you what is the best way to do that Yeah 00 18 47 Wesley Yates So I ve got my email wesley vfrcapitalinvestments com And you can look it up on Facebook or LinkedIn we re there as well And I d be happy to connect and if there s anything I can do to help another co-sponsor with their first deal or their hundreds of deals We re always happy to sponsor beyond co-sponsor a deal and and hopefully add value as well as hopefully maybe learn from another person s strategy So that s that s what we re about 00 19 19 Sam Wilson Awesome Wesley thank you so much Appreciate it 00 19 22 Wesley Yates Thanks Sam Click here to visit this podcast episode