Ivan Barratt: "Secret Sauce" to His Success on Multifamily Leadership Podcast
BAM CEO and founder, Ivan Barratt, appeared this week on the MultiFamily Leadership Podcast hosted on Multifamily.com. Ivan shared insider experience, his passion for the industry, as well as some of his “secret sauce” for succeeding. To take a listen to the podcast in its entirety, click the link here. If you only have time for a brief break, we fill you in on some of the philosophies that have helped Ivan score big in the world of multifamily...
Ivan began by telling the host, Patrick Antrim, about his background and how he got his start. Ivan was exposed to real estate initially through his dad, and developed a taste for the business as he grew older. Despite realizing his initial plan of “watching the rent roll in” wasn't exactly accurate, Ivan stuck with it and learned lessons along the way. One important lesson is that Ivan wasn't afraid to succeed or to fail. He reports that he was lucky to “fail small” himself and later had a front-row seat during the Great Recession and Crash. He used both as learning experiences that informed his career. Ivan also learned initial assumptions could be mistaken, such as assuming that multifamily was similar to single home life. He said he quickly learned that elements like resident relations and even pest control between units were a big difference. These differences helped to guide another important principle: that of customer relations.
Ivan told the host about how a dated “landlord/tenant” view can really be detrimental in today's multifamily industry. Rather, the market has moved toward a resident-centric model with a real focus on customer service. Interestingly, Ivan said that although it's taken awhile, he's seeing more stakeholders concerned about how property management companies are working to achieve a resident-focused approach. Ivan advised that after the next market correction happens (a “when, not if” scenario) there would be stiff competition and those communities more resident-focused would be in a better position.
Tech & the Team
Ivan talked about how he's a big proponent of how the right technology can be a game-changer for the property management team as a whole and help them deliver. In fact, this year his company plans to hold a contest to find the “next big thing” to advance the group mission. While he isn't sure, Ivan's betting that the next game-changer will come in on the resident side. Although he wasn't ready to divulge details, he did mention that there is a pilot program already underway at some properties looking at new tech and improving maintenance and servicing for the residents.
Ivan also talked about the importance of putting the right team together. Some of his guiding principles is to pay people well, provide great benefits, and then get out of their way. Ivan has seen real results by allowing his team to also “fail small,” (although it's occasionally given him anxiety). By allowing his team leaders to make truly empowered decisions, he's seen them grow and become better leaders – all of which has paid off for the whole. As he has in previous podcasts, Ivan mentioned the importance of not treating the maintenance department as an afterthought. He discussed how finding and hiring an excellent Director of Maintenance and Construction helped build a stronger overall team because the director also found, hired, and retained talented and quality people. Ivan has worked diligently to build in a culture of maintenance team appreciation at BAM and demonstrated it again in the podcast.
On Deals & Management
Ivan went into detail with the host, discussing how he likes to find the right workforce housing but also needs to make sure that the area is right. Using Indianapolis as an example, Ivan described how with the recent turmoil in IPS schools that it would be tough to find what he'd consider a good deal in those areas. He'd rather have a resident running to the property than running from it; the school was one good good indicator of a deal. Ivan noted that he can often find properties in the suburbs where the school will check the right box. When it comes to other details, Ivan said they look to see strong income out of the gate and if they'll be able to get 6-10% cash yield or cash over cash return, depending on how it's financed.
Ivan also talked about the nature of his property management company and how he thinks they're in a “Goldilocks” zone – they aren't too big to care but aren't too small to know what they're doing. They also charge enough that some communities looking for the cheapest management group may not be interested – and Ivan's fine with that. His concerns are building a great management company and finding solid deals. His advice for anyone who wants to try his or her hand at investing? Develop a feel for it and be able to have a gut reaction to a good (or bad) deal. Ivan suggested underwriting 100 deals, looking at 100 different funds, or 100 different placements; being able to pick up on what's right, wrong, or missing is vital. Ivan signed off the podcast because as he told the host, he could talk about his interest and enthusiasm in multifamily all day – and his enjoyment of the industry shows in his success.