In case you missed it: BAM founder and CEO, Ivan Barratt, made a recent appearance on the Purchase to Profits podcast. Talking with host Seth Ferguson, Ivan shares some history, strategy, and lessons learned. You can watch here on YouTube and find similar videos/podcasts on our Media page.
If you don’t have time to watch the full video, we recap some of the highlights below.
- BAM sits currently at nearly 80 employees, many on-site management personnel. The downtown HQ team consists of the Leadership team and includes Finance, Asset Management, HR, etc. BAM is focused on finding the best people and building a great culture.
- Ivan’s goal for the year: he says it’s the same as last year, which is 2,000 units. He notes that the market may have other ideas! BAM is still looking at around 200 deals to find one that makes sense.
- Global capital looking for yield drives up prices in coastal areas, so regional capital comes to areas like Charlotte, Indy, etc. Sometimes, BAM is driven to tertiary markets that still fit the key metrics.
- BAM likes college cities, and has assets in both Bloomington, IN and Champagne, IL. Ivan notes that BAM avoids student housing and is still looking for workforce housing in areas like these.
- Ivan notes the idea of a “gem” market: government/educational/medical.
- In the last few years, BAM is looking for higher quality, newer assets north of $20 million and even $30-40 million.
- Newer age assets from late 90s to early 00s will have less value-add but reduce downside risk.
- Many people confuse these properties with the A++ properties. BAM is not going after these brand-new assets with infinity pools and concierge service, etc. Ivan notes BAM targets a section of workforce housing that rents $700-1400 a month in the Midwest.
- Ivan said he made mistakes early on but learned from them and would rather make a mistake on 30 units vs 300. He also said he didn’t want to make the same mistake twice.
- Ivan found a great partner several years ago who is a terrific day-to-day operator. They both stay in their lanes and are more powerful and impactful together.
- There is great tech and lots of resources for people interested in growing in the industry.
- People may make real estate seem easy, but the reality is that you’ll fall on your face and that’s okay. There are major rewards if you keep striving and persevere.
- Ivan is a big believer in coaching and works with a business coach as well as fitness coach, etc.
- He gets up early to work out, and fills free time with good content that helps him continue to learn and grow.
- One transitional deal that stands out: going from scattered sites to a 112 unit deal which was kind of a coming out for BAM. Ivan shared that they used HUD, which he clarifies works with A,B, C, and D assets and isn’t just for subsidized properties.
- Another impressive deal: Ivan calls this deal a home run – they knew it would be a good deal but didn’t know how good. The asset was located in a sub-tertiary market and theywere able to deliver 2.5x net to investors in just over two years, with low 60s IRR. Ivan has to remind people that it doesn’t always work like that!
- You don’t know going in when deals will be a single, double or home run.
- BAM’s first rule: don’t lose money. Second rule: don’t forget rule #1. Third rule: how do we get cash flow off it?
- Ivan is enjoying watching the leadership team grow and build strong leaders. Now most of the credit isn’t his because it’s deserved elsewhere.
- Real estate is a great way to build an abundant life. It allows him to work how/where he wants, and give back.
If you’d like to learn more from Ivan, you can also visit ivanbarratteducation.com. You’ll find a free library filled with educational videos and articles featuring Ivan’s insider info.