Did you miss BAM founder and CEO, Ivan Barratt, on the Wheelbarrow Profits podcast recently? We recap some key points in today’s edition of the BAM blog. You can also click this link to listen to the podcast in its entirety.

Doing Your Homework:

Ivan shares that his mentor used to say “what you don’t know you don’t know will kill you!” He’s carried this reminder to be as prepared as possible and always do due diligence.

Ivan advises to underwrite a couple hundred deals before feeling like you’ve found a good one; he said that if you haven’t gone through this process, it’s a big red flag that you may not really be set up with a good deal. At this point, Ivan and his team routinely work through 200 deals to find one good deal.

His Current Model:

Ivan says that they aren’t cap rate chasers and also avoid heavy value add assets because of the usual location of those properties. They typically prefer assets in the B+ and A- range, and stay away from the banks.

Ivan also says that finding money isn’t the challenge; the challenge is finding a good deal. Ivan has eighty LPs, over half of which have done two or more deals with him.

He discusses being in secondary and tertiary markets, including Big Ten (college) towns. Those towns typically have a hospital, college, and plenty of service jobs and you can get more yield there.

Ivan discusses agency or HUD financing and notes that HUD finances A,B, C, and D assets. He also talks about using HUD financing at 35 years, and Fannie at 12-15 years. Ivan does warn listeners about the dangers of “another ’08” when capital markets freeze up and you can’t roll debt over.

Raising Capital:

Ivan advises learning how to sell yourself. He notes that just as important as understanding real estate is being able to convey ideas and get buy-in from potential investors. To that end, listen to and read great content on business development and self development.

Another tip Ivan shares is that people underestimate how much wealth is in their existing network. For instance, when you see your doctor or dentist for an appointment, let him or her know what you do. Treat them well in a deal and they’ll their friends, which only expands your network.

Property Management:

Ivan talks about how being vertically integrated allows him to have flexibility and control that other syndicators may not have. He doesn’t have to worry about losing a good property manager at one of his assets, because he’s signing the check. When it comes to renovations, it has allowed him to cut the margin because he has people on payroll doing the work.

Ivan reinforces his commitment to treating people right. Treat your people like gold and pay them well. He says that by paying people well, you attract better people who do better work. As he says, property management is hard and keeping the culture fun when you can makes a big difference.

Ivan says he’s “all about the team.” He spent a long time trying to do it all himself, and is now in a place where he has hired the right people and allows them to make mistakes and grow. Ivan encourages listeners to build a culture that allows people to make mistakes and provide solutions.

His Best Investing Advice:

Ivan says the multifamily game is about persistence. Ivan likens it to working out – you won’t see a difference after one day, but those little steps each day add up! Go to a seminar, get education, follow the plan. Take those little steps every day that will lead where you want to go.

His Best Habit:

Ivan fills his brain with quality content, even if it’s only 15 minutes a day. Listening to good content keeps him motivated and working on self-enhancement.

What He’s Seeing in the Market:

Ivan notes that he’ll often upgrade features like counter-tops, door hardware, and flooring, as well as amenities like a gym or bark park. He notes that in the industry, pet amenities are ranking higher than amenities for people right now!

On Ivan’s Bookshelf:

Ivan says he’s listened to this book five times – If You’re Not First, You’re Last, by Grant Cardone. He recommends it as a book about a way to hustle the right way and get stuff done. Ivan is also anxiously awaiting Ray Dalio’s next book.

To catch more of Ivan’s investment insight, click the link above or check out the BAM blog for more articles and podcasts.