Do's and Don't's of Putting Together a Deal
“I think one of the biggest thing that we see is fear in getting these deals done is the lack of education. We also see where there’s not enough capital to transaction the deal.”
Welcome to the Next Level American Dream Podcast. We have an absolutely amazing guest for you today, but first please make sure you have subscribed, if you haven't already. We also love getting your feedback through likes, comments, ratings, and reviews. Today, Sean has a conversation with Julie Anne Peterson. Julie has a wide professional background but her current focus is putting vendors, partners, and investors together to make deals happen. Today she drives into some of her do's and dont's when first starting out and doing deals. If you found any value from today's episode, then please share it with a friend and help us grow.
Key Topics
Tell us your background
What are the key things that make deals happen that people either miss, don't do, or don't think to do when going in?
What was the inspiration for creating ZOOM at 8?
What success have you seen come from it and networking general? For yourself and/or others?
What does the American Dream mean to you?
Connect with Julie:
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SUMMARY KEYWORDS
people, multifamily, deal, asset, business, capital, julie, find, education, zoom, american dream, critical, investors, bike, years, building, started, group, buy, ride
SPEAKERS
Sean Thomson, Abigail Thomson, Julie Anne Peterson
Abigail Thomson 00:01
Welcome to the Next Level American Dream podcast brought to you by Thomson Multifamily Group. Your hosts, Abigail and Sean will discuss how you can take your American dream to the next level, the real estate investing, business practices, and personal development. Join us as we share our experiences as a father daughter duo who are trying to accomplish their goal of financial freedom. We hope you learn more about how to define and achieve your American dream. Here's another episode of Next Level American Dream. Welcome to the Next Level American Dream podcast. We have an absolutely amazing guest for you today. But first, please make sure you have subscribed if you haven't already. We also love getting your feedback through likes, comments, ratings and reviews. Today Sean has a conversation with Julie Anne Peterson. Julie has a wide professional background, but her focus currently is putting vendors partners and investors together to make deals happen. Today she dives into some of her do's and don'ts when first starting out and doing deals. If you found any value from today's episode, then please share it with a friend and help us grow. For more information on our sponsor, visit thomsonmultifamilygroup.com to start taking your American dream to the next level through passive investing.
Sean Thomson 01:17
Hi, Julie, how you doing? Thanks for coming on the show. Absolutely.
Julie Anne Peterson 01:20
I'm doing great. It is winter in San Diego. Oh my goodness. It can't be any better. I think it's 70.
Sean Thomson 01:29
Yeah, that's nice. Yeah, I'm in Phoenix. I'm in Phoenix today too. So the weather's a little better. We it was like I woke up today was 22 degrees in Dallas. And I said let's go. I'm leaving.
Julie Anne Peterson 01:37
There you go. You know, we were parkas, and we were boots when it gets to 65. I do have my heater on right by my feet here. Because it is a little chilly. But I'm getting over that pretty quickly.
Sean Thomson 01:50
Yeah, it's hard to be spoiled like that. Right? Well, let's start with the telling people a little bit about your background and kind of where you are today.
Julie Anne Peterson 01:57
Yeah, so you know, I started this real estate adventure about 30 years ago, I bought my first house when I was 22. And I said I never want to pay a landlord ever. I want to own my own assets. So I went from single family for probably 15 years of that 30 years. And I I continue to have leverage issues because in single family as you know, you don't really partner with people, it's all about, you know, you getting the best price, getting the best loan. And I found myself not able to get enough money to continue to buy the next event. The next the next and you know, we had gone through 2005 in Chicago 2005 was like 2008. For the rest of the country, things started to really drop and I was in multifamily in 2005 in Chicago, which you know, now these days you don't want to be in in the great state of Illinois buying assets. But I went into negative am and just you know, like everybody else I hung on for dear life. And I couldn't continue to scale my business. So about 15 years ago, I ended up getting more into multifamily, doing more limited partnerships, and really starting to build my business in multifamily making building my team understanding it educating myself. And because I learned so much about the mortgage business, this opportunity came up about eight years ago, I have four kids. So eight years ago, it was a little bit difficult. My kids were still young. And I tried to jump in with all both feet. And I it just wasn't good timing. So about five years ago, I came back to old capitol and have been doing still doing limited partnerships on the side and then doing my mortgage business, which is fantastic. I absolutely love what I do at old capital and have just recently been able to get into a GP position, I found the deal, I put the mortgage on the deal, and we're capital raising, and it has been an amazing experience. And truly, it goes back 30 years, this is exactly where I want to be, you know, providing homes for people, you know, building my portfolio and really helping people on the mortgage side to help create relationships. Because that really is what we do at all capital. It's all about relationships. It's not about you know, the commodity who can get the best price. It's about the relationship and how we can help you, you know, build, you know, relationships with the broker to have whether it's, you know, construction or property managers. We are a great resource for that. And that's what I do really, really well.
Sean Thomson 04:51
Yeah, it's hard to explain the you know, what you guys do at all capital that's different than everybody else's. I mean, I can't even tell you the difference in my Business just because of the relationships that you have made for me, you and Paul, you know, we have a group that local in Dallas that Paul invited me to, and you guys had brought me into, you know, all your events and things like that. And those connections have been amazing. So it's different the way you guys conduct your business, I think, than almost everybody else. And it's hard for, it's hard to really kind of pinpoint how you know how it benefits your business, because it's just, it's, it's, it's slowly meant by, and it's completely different. But,
Julie Anne Peterson 05:28
well, this is this is a commodity commodity, right? It's kind of like paper, it's kind of like steel, mortgages can be looked at as a commodity, there's so many people doing them. And that's what we decided, probably eight years ago, when we started the old capital podcast, we really wanted to educate people, we wanted to provide value. And in doing so we built this amazing relationship with brokers and with our clients that, you know, a lot of times you say, Why would I go anywhere else, they've really helped me build what is so it was so important at the beginning, and they've just leveraged their relationships to help build your business. So it we really are kind of a special, special company in that way.
Sean Thomson 06:13
Yeah, I think so too, you, you definitely accelerated my growth. And my, for me really rapidly, just just with the connections that I've made through you guys. So it's been it's been a crazy difference, I think for me, but let's talk about let's talk about a successful. I mean, you see, a lot of people go through this, I mean, you're, you're underwriting their debt for them. And you see people kind of come into this business. And you know, some are doing great, some are doing great, some aren't prepared, some are more prepared. Let's talk about if it's okay with you kind of some of the things that you see people doing that they maybe are having success with, or some of the things that maybe they shouldn't be doing. And they're they they're, it's really hanging them up. But what are some of the things that you're kind of seeing people succeed with? I guess, let's start with that. And maybe we'll talk about some of the failure points too.
Julie Anne Peterson 06:59
Well, I would say that one of the biggest things that I would recommend, and I'm seeing great successes, when people get educated is so critical to building your business, whether it be you know, changing your Gmail to a business name, right. I mean, that's so simple, that you see people jumping in saying I'm an investor, I'm going to be a GPM this deal. And they don't even take the steps to get a website to get an email to really launch themselves in a proper manner. These are businesses, this is a business that you're running. So not having the education can be very critical to making good decisions. And whether you need to spend 30,000 or $500. It you have to get educated and what however, that looks for each person is an individual decision. Now, I would tell you that when you pay 50, or 3030, or 50,000, somewhat, it is a ticket to ride. But it's at some point, it's up to you to make to take the steps that you're being told, you know, I think one of the biggest thing that we see is fear in getting these deals done. So the lack of education is it can't can be something that we see, we also see where there's not enough capital, the person's not capitalized. So they come into this, and I saw this with COVID, a lot of people had a lot of money. They were watching a lot of TV and YouTube and saying, I'm going to be an investor and they jumped in. And we find out that they say, Well, you know, use other people's money. And when they have no money in this deal. So they're jumping into these deals, they're getting them. And here's the lender myself coming in saying, what do you have on your personal financial statement? Oh, I only have $500 to my name seriously, or I only have 500,000. And I'm buying a $50 million deal. So you have to understand being a part of a team and building that team. And these things. This is a long game. Again, people What does what have I see as failure is that people think you can get in this and have 1000 units by Tuesday. That is a misconception. And so I would tell you that not having education, not having capitalization, whether it be from you on the GP or even having enough money to on the capital raising side. Even having capital raisers that people don't recognize that, hey, I have to deliver this. I'm under contract. I put hard money into this deal. And you don't have the capital raising person on your team with you. That's a critical mistake.
Sean Thomson 10:00
Yeah, so let I'm gonna review some of what you just said. So we can kind of get some details in there. So education can come from a different a lot of different areas. So there's a lot of mentorship groups, there's, you know, education groups, but I think, I don't think any of them talk about how to close a deal. I mean, everybody on the education side takes you through how to raise capital on how to find deals. Right? Yeah, how to underwrite them, things like that. So they talked about those things. But once you get a deal under contract, and you start going through the closing process, that's rarely, I mean, that's kind of the, the, the super critical component of doing the closing on a deal. But that's, that's not the sexy part, right. So people don't really talk about it, I think it's very complex and very complicated. And there's a lot of moving parts that happened in a very short compressed time period. So having people in a mentorship group or in a, in an education group that have been through that closing process that you can then go to, because they're not really teaching that unnecessarily. It's just kind of one of those things that you've, if you've been through it, you kind of understand it. But if you haven't, it's completely mind boggling. So I think finding an education group that also has people that you can go to for that. And then like you said, capitalization or having the right team in place, when you get into this is really important. I think having a good GP group that can bring those components that you need, like money, and knowledge and that kind of thing to is that that's kind of what you're talking about. Right?
Julie Anne Peterson 11:21
Right. Absolutely. Yeah. I mean, theoretically, you could, that that sponsor would be the person that's holding your hand, you know, once you get the deal. And, you know, while education is great, you know, we are thinking that the sponsor is going to hold your hand and take you to the end, again, what old capital does and what I do is I hold, I work on behalf of our clients, I work on behalf of you, the buyer to hold your hand and say, Okay, let's make sure that we've got all of these things in place here, you need to sign this, oh, hey, I need that back from you. Whereas if you're doing this on your own, you know, you don't have an education, you don't have a broker to hold your hand, it can be very overwhelming. And you're putting a lot of money and time into this. So yes, I agree with you on the team.
Sean Thomson 12:11
Yeah, no one single family. So I've closed, you know, I don't know how many single family deals and closing a multi family deal is completely, completely different. It's 100 decks of complexity, right? There's, there's so many more moving pieces that it was able, you know, it's overwhelming. And, you know, even even having gone through it on, on some level closing property transactions, you know, for me, it was it was quite a lot of challenges to overcome, and having you having you there as a resource and having different people's resource was really critical. So I think your advice of having that group put together is really good. So what are some of the things? I guess those are a couple of things you would recommend for people to do? What are some of the things that you're seeing people come to the table with that, that they're like, Well, you shouldn't, you just shouldn't have done that?
Julie Anne Peterson 12:54
Well, I'm not sure I understand the question. So if I'm thinking about the, you know, not having education, right, and not having a team, that's a problem, and maybe going after an asset that is way far away from you, with no boots on the ground can be a problem, not only for you, not only for your tenants, but also for the bank. Because if we, you know, just think about it in COVID, nobody could jump on planes. And so I'm seeing that we're, we've got people that are, I'm in a transaction right now, where the buyers, the owners rather have this asset or getting rid of it, they're in California, they thought it would be a great idea to buy something in Alabama, because, you know, four or five years ago, it was, you know, hey, I'm jumping in, and the asset is completely damaged, they, they've got water damage, they've got roofs that are leaking, you know, things like that you don't think about that are critical to the success of the asset at critical success to your investors, you always have to be thinking about your investors. And you know, right now, the big thing is bridge lending. And we've seen about 60% of our business has shifted from agency, which is your Fannie and Freddie going over to bridge lending. And the reason why people are using bridge lending Is it is it kind of when you've got unstable assets, so things that are less than 90% occupied for 90 days, we can we can do that because agency wants to have 9490, the asset doesn't maybe it's 85, or it's down to 75 on Economic, we can't get you an agency we can get you into bridge and the bridge will allow you to have cap x rolled into the loan. So a lot of these deals, they're over leveraged, because that's the only way way you can buy these deals is by putting bridge on. And being over leveraged is not a great place to be. Because what happens if you cannot turn those, the construction, whether it's because they you can't get supply, you can't get workers, and you've got three years to get this deal done to get the rehab, and get into agency debt, or perhaps even sell it, when we've got people that are not educated, that do not have the capitalization and you're getting into these bridge loans, and you're having to change the tenant base. And you've never done this before. That can be let's say, can look for failure, right. And so I would say in 18 months to 36 months, these people that jumped in, I think you're gonna have some opportunities to take over their assets, because there they just don't have the right. whether, you know, they were able to get it they weren't able to execute, or their timeframe did not coincide. But that that is a mistake, not a mistake, but a failure.
Sean Thomson 16:15
Yeah, so I think the the essence of what you said is overreaching. So if people are overreaching for distance away from their home market to buy properties, if they're overreaching on the capacity of construction that they can do for the property like that overreaching how much they're gonna have to turn that property around in such a limited time frame. So if you're if you're kind of going out too far outside of a comfort zone, in these acquisitions, it can be a recipe for failure, right is that that's kind of what you're saying. So if you, like you said, They're going from California to Alabama, well, to make that trip, when you're having to sort of focus on that asset to get it up to done properly, is a big deal, right? Leaving, leaving home to do that every every month, or whatever. So maybe don't go to Alabama, stay closer to home, trying to acquire a property that needs too much work for you to really accomplish realistically, is a bad idea, you know, and things like that. So you're, you're probably wanting to, you're probably wanting to say that don't overreach your capacity, either. For any reason, you know, distance or, or what you can conquer the property, right, that's where you see a lot of failure.
Julie Anne Peterson 17:22
Listen, everybody has dreams. And I don't want to be the person that says don't reach your dreams, you just want to be realistic, you want to be pushing yourself. But you also want to have the support from others that have done this before who are closer who have you know, get property managers that have a track record, you know, it's critical to your success.
Sean Thomson 17:47
Or if you're in California, and you want to do an Alabama property and maybe have a partner in the in the group that is in Alabama, or or close by, that can be that person that oversees that for you. It's not necessarily that you shouldn't do it. It's just that if you don't have if you don't have a local resource, or someone in the area, maybe reconsider your position there. Or if you're doing a big construction project, you know, I have a partner that has a construction degree and a construction background. So any construction issues, you know, I have, I can go to that person for as a resource. So maybe have those resources in your team. It's not that you can't do it or shouldn't do it. It's just that make sure you have the resources to conquer those issues as they come up. Right. That's what you're thinking? Absolutely. Absolutely. Yeah. Otherwise you will be set up for failure. I mean, buying from California to Alabama is not necessarily the formula for failures, find the asset and not be prepared for local issues or something like that. Right?
Julie Anne Peterson 18:41
Correct. Yeah, absolutely.
Sean Thomson 18:44
Let's talk about so you do a zoom at eight. What was the inspiration for doing the zoom at eight?
Julie Anne Peterson 18:49
Well, so I'm an advisor on a education program. And we thought, well, this education program does not have an ecosystem where people can come and find a sponsor who can find answers to their current questions. Okay, it was more of a meetup kind of platform. And because we work with a lot of education programs, I saw the need for this ecosystem, where people could capital raise within a group who could have sponsors all of these critical people to your team. So we started on Slack, about three and a half years ago. And I don't know if you're familiar with Slack, but it it's like instant message. And so we would all be instant messaging and the the messages would keep going in your you are trying to respond to one of the questions up here and you know, you're down here and more stuff is coming in. I thought this does not work. But how can we get a community together whereby we're building relationships, and we're finding the right people for our teams. So zoom had just come out. At least it was starting to to show up on as an option other than, you know, doing conference calls on the phone. So I moved our this platform that we had on on Slack and brought it to zoom at eight. And it grew, we started out with 12 people, and there are weeks that we get 100 people on zoom at a zoom at 8pm. Eastern. And it's, it's been around for almost three years. Last year, we had 39 guest speakers, and you were one of them, and what what a great place for you to be in for us to get to know you. And it really is an education platform, that's what I wanted is an education platform for new investors so that they could come learn some of the the options that are out there, whether it be like smart home technology, or it was for attorneys to come in and talk about 506 C versus 506. B or, you know, a fond model. So I really wanted to structure it to help these new people. It was a conduit to help my business grow. We've closed 10 deals within the zoom at eight. So it really is a special group. It helped it has helped to build my business and my platform, and it's every Tuesday night, you everybody is welcome to join us. And then we do a networking. So not only are you learning, but you're getting to know these people on a real personal basis. And as you've heard before, you want to do business with the people, you know, like and trust. And you know, spending time, you know, everybody's investing in themselves and investing in yourself is committing to building that network that building that team that, you know, doesn't happen overnight. It took me three years to find my partner. And you just want to be knowing that your partner, you've vetted them, you've spent time with them. It's not like going to a conference and spending a lunchtime and saying, Hey, let's do this. You don't know how people work, you don't know if they're going to be available on Saturdays when you want to talk to them. So it was really critical for me when I built built my team and found partners that we were on the same same path
Sean Thomson 22:20
are you seeing people find that illuminate they're, they're coming in and networking and they're finding their they're finding their their tribe, or their their group or their? Their their ownership, you know, people that they can work with?
Julie Anne Peterson 22:31
Yep, absolutely. And that's why we've closed 10 of those within our community 10 deals within our community. So it's really wonderful to see how the relationships start, they blossom, they get the deals, I bring in the debt and we also help capital raise on on many of the deals as well. So again, when you're in these groups every week you're you know, why wouldn't you want to invest with somebody who you've seen move through the rooms you just want to support them you want to jump in help them in their deal as well. It's pretty cool. Yeah.
Sean Thomson 23:10
So what is what is the future for Julie Are you are you doing obviously more? Oh, capital more zoom at eight? What sort of things are we are you looking forward to next year for 2020?
Julie Anne Peterson 23:19
Yeah, you know, my spirit is to help as many people as possible, whether it's, you know, being a mortgage lender, or it is being helping you find your partner, whether it's a sponsor, or you know, again, your critical people on your team. For me, I'm also looking to build my my business with my partners, we're going to be taking down more GPs assets in the coming years. And I'm really looking forward to being more part of this multifamily outside of just as a lender and I, I find it's so interesting that many of the lenders out there and brokers, whatever they are, they're not multifamily investors they've never owned, they've only provided debt. And this has been a dream for me to be told my own multifamily assets. I'm following that dream things are coming together. I've been very intentional and very patient. Those are not typical characteristics of me but they they have and they're in place and we're ready to roll I'm very excited for the future.
Sean Thomson 24:30
Yeah, and like you said, building those relationships with people that that you know, like and trust but also feel like you're heading in the same direction with they believe in what you're trying to accomplish the long term. Outlook is the same I think that's critical and you taking your time and doing that is is important. I would I would imagine so I think that's a good plan to do it that way for sure. So Julie, we've talked a lot about multifamily and our businesses and stuff but what is it what sort of things do you do beyond beyond multifamily? You have any activities or interests?
Julie Anne Peterson 24:58
Yes, you know, I Like you have a passion for i i used to race competitively. And I was a world champion rider wouldn't went to Nationals went to Worlds I married a world champion freestyle rider. So it's our passion to ride. But we've shifted a little bit, you know, yeah, I actually was a spin instructor for 26 years. We went nowhere a lot for 26 years. Yeah. But this past year, I said, Listen, I've got some goals. If I meet those goals, we're gonna buy electric bikes. And so I met my goals. December 31, we went down to the bike shop, which my son works at, believe it or not, bikes. We got new bikes, but they're electric. Yeah, so here we are. We're on our electric cruiser kind of bikes. And I'm like, Oh, can I get some arrow bars on the on these on these cruiser bikes. But you know, you know, as we age, we want to stay fit. I love working out and cycling. It's it is my passion. And we're gonna do it either way. I whether it's electric, or it's, it's indoors on my peloton, or it's riding outside on my my racing bike. So that is what I love. You know, I have four kids, they all started cycling when they were very, very young. So I love that they too have the passion for cycling, like you and I.
Sean Thomson 26:28
Yeah, it's tough to ride bikes these days, you know, everybody's on their cell phone, if you're writing on the road, everybody's on their cell phone, and we don't have a radar system on my bike just to make sure I know everybody's coming up behind me. So it's tough. It's tough to get on ride. So it's it's nice that you have when you find some some way of doing that, you know, I'm in Phoenix today, visiting my brothers that come just to ride the mountain bike trails vs nearby. So I love cycling. I try to do as much as I can. I try to average like five days a week on the bike. But it's tough. It's tough to make that commitment. Cycling does take a lot of time. So I back on the bike.
Julie Anne Peterson 26:59
Yeah, you know, I love this story. When we closed we were ready to close right on your on your deal. And I loved it because you're like, can I go for a bike ride? Now? I'm like, No, hold on. We got to make sure we got everything in line and then a couple hours would go by, Hey, can I go off for my bike ride now? I thought it was so. So you write just so your passion is so strong, and I love to support that. It was it was like, You know what? I think we're gonna have to take the day off today.
Sean Thomson 27:31
I didn't get my ride. Yeah, yeah, it was the final, the final day of closing. And I thought I was gone. So I'm like, I'm gonna go for ride. We were like, wait a minute, we might have some problems, you know? Yeah. I just kept saying, When am I going to get on my bike? I never did. Yeah, yeah. You'd think it'd be worried about something else. But you know, at that point, you were I was kind of done. So I wasn't too worried about it. So Julie, I know the name of the podcast is next little American dream. So ask everybody the same question. But what is the American Dream for you?
Julie Anne Peterson 28:04
You know, for me, it is about helping others, I find so much joy in helping others. And I never really recognize that. I know. I was always a connector. I remember my mom saying that I would go to church and I say, oh, there's Suzy. Oh, there's Michael, let's you know, hi. And my mom would always tell me you always are making connections. And this is my dream. This is I am in the right place for me right now, which is helping other people follow their dreams and how I can be part of that to a person help them pursue that. Again, it gives me great joy to do that. And, you know, being able to watch people grow from nothing to something is amazing to me. It gives me great joy.
Sean Thomson 29:01
Yeah, I learned that about you. I was at the yo yo capital event in Dallas. And I was there for several hours. And I'm not very good at networking. So I was just kind of on my own. And as soon as I came over and stood next to you, I met like 10 people. So now on every time I see you, I just come stand next to you and then maybe like 10 different people. So it works out really good. is definitely a strength that you have for sure. So I've learned how to network just just by standing next to you for for long enough. So
Julie Anne Peterson 29:30
yeah, it is you know, a lot of people it's hard. It is not doesn't come comfortably to them naturally. i It's something that it is a gift that I have and thank you. Appreciate it.
Sean Thomson 29:42
So Julie, how can people reach out to you and find out I mean, you've got you got old capital going on. You're putting together your own syndications. You've got zoom eight, you have so many things happening. What's the best place for people to kind of reach out to you and say, Hey, how can I get involved in what's Dooley has going on?
Julie Anne Peterson 29:57
Yeah, so you know, I'm on LinkedIn. So you can find me Julie Anne Peterson on Facebook. So I'm on the a lot of the an Instagram, you can find me you could send me a message through there or you can send me an email jpeterson@oldcapitallending.com. Or you can call me I'm always open 6304 or 537150. Happy to take your call. Happy to help.
Sean Thomson 30:25
Yeah, awesome. Yeah. So if anybody needs a loan on a multifamily property or if they want to network on Zoom at 8 or anything like that, they should definitely reach out to you for sure. You know, you I just on a personal note, you've changed the way I do business in my business for sure. So you Old Capital. I'm a huge fan of what you guys do. So yeah, I appreciate you coming on the show too. And talking a little bit about kind of what you have going on. And you know about you know, you personally and stuff. I was funded, fun to have you on. I appreciate you.
Julie Anne Peterson 30:53
Thank you. It's always a treat to be with you and see what you're doing. Yeah,
Sean Thomson 30:59
thanks. I'm sure I'll talk to you soon. We I try to talk to you as much as I can. So hopefully we'll talk soon again. Sounds great. Thank
Julie Anne Peterson 31:05
you so much for the opportunity.
Sean Thomson 31:07
Yeah, thanks a lot. Talk to you later.
Abigail Thomson 31:09
Thanks for joining us for another episode of Next Level American Dream. If you would like to learn more about what we talked about today. Want to contact the team directly or interested in passively investing and being a part of our deal room? Head over to our website at www.thomsonmultifamilygroup.com Before you go please leave a review your comments help us create more episodes for you to enjoy.