BAM founder and CEO, Ivan Barratt, recently made a guest appearance on the Cashflow Hustle podcast, and talked with host Justin Grimes about his history, industry advice, what makes BAM successful, as well as advice he’d give to others (including his younger self). Be sure to catch the podcast if you can, but we recap the highlights here in today’s BAM blog…
Catch the Cashflow Hustle podcast for tips and information from industry insiders; this edition features our own Ivan Barratt on his journey from doing-it-all solo to being a syndicator with a best-in-class management company with 3,000 units under management. If you can’t catch the podcast, but still want to pick up some valuable insight, keep reading for our recap of Ivan’s journey. (To listen to the podcast, follow this link, or catch it on Cashflow Hustle’s Facebook, Twitter, or LinkedIn.)
Ivan Received His Most Valuable Lesson Early
Although Ivan graduated from Indiana University’s business school, with a great foundation in real estate, according to him one of his most valuable lessons came later. After school, Ivan went to work for a local developer, saying he’d work for free but “pay me when I sell something.” In that way, he got experience selling condos, raw land, and developed lots to builders. Then, in the midst of early success, Ivan had what he calls a “front row seat to the Great Recession.” Guys ten years older than he was were losing cars, houses, had suddenly failing marriages in the midst of financial turmoil. Ivan realized he’d been so focused on capital gains and speculation real estate that he’d forgotten about cash flow. It was then that he says he “hit reset” and started phase two of his career, and avoided becoming what he calls an “arrogant cowboy with a huge hat and no cattle.”
He Started His Property Management Company, Scaled Up
Ivan started his property management company in a spare bedroom; although he freely admits that property management isn’t his favorite element of the industry, he knew how to do it effectively, build a service model, and do what others didn’t. In the beginning, Ivan himself was the entire company, from the leasing agent to the rent collector, with a book-keeper coming in monthly. From there, he used the cash flow to buy small multifamily properties and started in distressed areas that he believed would experience growth and improvement. From 35-unit deals to 65-unit deals, the company continued to grow; the most recent deal was for 302 units. Ivan also hired a team and notes that although you may lose time teaching them and building the team, it will give you more freedom to devote to other aspects of the business. Another point of Ivan’s that he’s mentioned in other podcasts: he believes in paying people well. “If you pay people well,” he says, “they’ll stay longer and do a better job.” Ivan cites BAM’s maintenance team as “being worth their weight in gold,” and that BAM strives to be the company that draws the best talent.
Advice From Ivan
- Although Ivan is a fan of seminars and books, you’ll never learn the industry without doing it. If you’re waiting for the office and the business cards, you’re wasting time. At some point you need to jump in and figure it out.
- Ivan notes that there are economies of scale once you pass 100-units. Once you have on-site personnel like managers and maintenance, the costs to run the asset decrease. BAM is vertically-integrated and headquarters houses investor relations, asset manager infrastructure, asset and property management, and BAM properties have staff on-site.
- Ivan says he made every mistake in the book when it comes to hiring and firing. Hiring good people is almost harder than real estate. Luckily, he figured it out. That’s when finding the right people for the culture and paying them what they’re worth comes in.
- As a syndicator, be 100% transparent about your world view, why you’re doing what you’re doing, and what you’ll do if things don’t work out as you planned. The investor can then decide if you’re a good fit. BAM is long-minded and prefers agency and HUD loans to take the interest rate risk off the table. BAM investors don’t like to speculate. As Ivan says they have three rules: #1. Don’t lose my money, #2. Remember rule 1, and #3, how do I get yield.
- Ivan recommends listening to or reading material by Grant Cardone. He said his father had every taped course available and that Grant Cardone is in the same arena; however, Ivan feels his material and delivery are the best sales training out there. Ivan reiterates that in order to succeed you have to be able to sell yourself and your vision and that comes down to sales.
- Ivan discusses goals and says his ultimate goal is to have north of 20,000 units which will take some work. He points out that they’re looking at about 200 opportunities to find one solid deal. They currently have a deal they’ll be closing on in the fourth quarter.
- For personal goals, Ivan plans to continue working on his fitness and hopes to finish a Spartan Race Trifecta. He’s been doing some Crossfit and running to get prepared and says, as a father of three and a husband, if he doesn’t get it done early in the day, he won’t get it done at all.
- Finally, Ivan’s advice to his younger self would be: start earlier and take more risks in the beginning. He also would have told his younger self to hire help sooner!
Want to hear more from Ivan himself? Check out his educational website with a full free video library! Visit www.ivanbarratteducation.com