Foreign.

You're listening to the Master Passive Income Podcast Network.

Hey, guys, this is Charles Seaman here with Erica McNew and hosting the Master Passive Income Multifamily Podcast.

And today we're very fortunate to have a special guest with us, Trent Werner.

And Trent is with Uptown Syndication.

They're based in the Portland, Oregon area.

And Trent has a pretty extensive background as a Realtor, as an investor, and as a syndicator.

Welcome to the Master Passive Income Multifamily Podcast where we guide you to invest in commercial real estate with a special focus on raising money from others to buy bigger and better deals.

And now here are your hosts, Charles seaman and Erica McNew.

Thanks for joining us and thanks for.

Being on the show, Charles.

Erica, thanks for letting me be a part of it.

So why don't we start with a little bit about your journey?

I know as we were, you know, leading up to the recording, you were telling me kind of how got started, and I think that would really be inspirational for a lot of our listeners.

Yeah.

So I kind of dove headfirst into real estate as a broker when I was 21.

I didn't finish college and was looking for something to do.

And I've always been kind of obsessed with the whole idea of using money to make more money concept.

So I tried financial services, tried banking, landed on real estate with a mentor that brought me into it and just fell in love with it.

We were mainly focused on the brokerage side of things at that time, and he didn't really do any investing himself.

And I got connected with some people that did jump ship from, from that partner and came over to Uptown, and the rest is kind of history.

I learned how to invest in real estate, how to manage it, lease it, all that fun stuff.

And right before I joined Uptown, my wife and I started with a duplex and, or I guess she was my fiance at the time.

But we bought a duplex because I thought it was a good deal and that kind of snowballed our portfolio a little bit.

That's awesome.

So how do you think being a broker and kind of getting a start on that side of the business prepped you for investing?

I mean, at the time when I started, I was mainly working with single family home buyers and sellers.

It wasn't really focused on the investment niche necessarily, but I saw what people could do in real estate just from buying single family houses or selling single family houses they had purchased decades ago.

And that idea kind of started sparking my interest in why don't I just buy More real estate, kind of collect real estate, because it seems to pan out well for the people that I'm working with.

And the duplex was just.

I had been listening to bigger pockets, and they talked about small multifamily, and there was a duplex in a good area that was actually seven minutes from my wife's place of work at the time.

And so it was kind of the best of both worlds.

We were close to her work, close to my office, and it was a duplex in a good area.

Okay.

So.

So that allowed you to see the possibility to kind of open your mind to what was out there.

And then you decided to go out and find the proper property near your home that you guys could take down and then be able to use that to scale up.

That's definitely a great story.

And with the duplex, can you tell us kind of how you found that and how you closed it?

So for somebody listening, maybe who's done single family, who's brand new, how do they go from a single family up to a duplex?

I think the MLS in most markets is probably the best place to find small multifamily.

I mean, a lot of the commercial brokers aren't going to bad niet.

Less than five units.

So I was just looking on the MLS late in the year.

I think we got it under contract and right before Thanksgiving, actually, in 2018.

And that's where I've found all of my small multifamily deals is the local mls.

And being a broker, I have access to that and can set up searches and scour through it.

But one thing that I've learned in real estate is people that have properties listed towards the end of a year probably want to get them sold before the end of the year.

And if not, they'll.

They'll close them right at the beginning of the next year just for whatever tax situations they have going on.

And so I was just really hitting it hard.

And I've been looking for a few months, but it honestly didn't take me that long to find, you know, the property that we ended up buying.

And I remember we closed on December 28, 2018.

So right after Christmas, right before New Year's, the seller really wanted to close that year.

And so, you know, being a broker, I represented myself, was able to get a bac on on the purchase.

So that kind of went back into our pocket.

But yeah, just looking on the MLS for those small multifamily.

And to be honest with you, nowadays there's a lot of garbage listings out there overpriced.

So you really have to be diligent and be committed to looking through the MLS listings because you're probably going to see a lot of garbage before you see one that makes sense.

I was going to say you probably did a decent amount of underwriting then on properties that were not an opportunity to be able to recognize that one so quickly.

What did the numbers look like on that property?

What stood out to you about that being a good opportunity?

So, to be honest with you, is what our out of pocket expenses were going to be.

And I tell this story to people that I talk with all the time, but in 2018, we bought this place for, I want to say, 590.

It was either 580 or 590.

We put 20% down because we had some money.

But we had gone, my wife and I had gone to hang out with a buddy and his girlfriend at the time who had just moved into a new apartment downtown Portland.

Cool little 445 square foot, one bedroom place.

And he was paying seventeen hundred dollars a month in rent for that.

And so we, I found this deal and it was in a great spot like I said, but I sent it to our lender at the time and I said, hey, what's our, you know, what's our payment going to be?

Knowing the other side was already rented for X amount, I think our out of pocket with utilities was like 1500, 1600 bucks a month for, you know, a duplex that we owned compared to my buddy's one bedroom apartment that he rented for more money.

And I thought, you know, it might not be the best deal.

There was cheaper deals out there that had maybe better cash flow at the time.

But where it was, the condition of it was really nice.

It just made sense because of, you know, we could go rent somewhere for 1700 or more, or we could own this place for 15, 1600 bucks out of pocket every month with utilities.

Wow.

Definitely a no brainer.

Yeah, you touched on something important.

You know, sometimes it's good to think big and it's good to look ahead, but sometimes you have to look at where you are right now.

Right?

So.

So by seeing what you had available and what you could use at your disposal, it sounds like that allowed you to make a good investment decision and find something that, you know, worked out very well for you guys.

So as we record this, we're in the end of 2024.

Do you guys still own that duplex?

Is it one that you sold?

Is it still in the portfolio?

How do you Guys have that now.

Yeah, we still own it.

It actually cash flows pretty well for us now just relative to Oregon's market.

I want to say we, we looked at it last week and I think it's cash flowing about 1600 bucks a month, maybe 1700 bucks a month.

And that was, you know, when we, when we took it over.

The tenant that we inherited, the tenants that we inherited were not great tenants.

The previous owner lived in the side that we ended up moving into and I don't know, I think he managed it himself, whatnot.

At the time I was working with Uptown Properties still, but I was doing leasing for Uptown Properties and I managed it myself.

But everything was run through a professional property management company.

And so we had the screening, we had all that stuff and so we're able to get better tenants in there.

And by the time we moved out and rented our side that we were living in, it started off cash flowing like 500 bucks a month.

And we had some really good tenants during the pandemic era.

So we didn't want to raise rents because Oregon, Portland specifically in that time was really difficult for landlord tenant laws as most other markets were too.

But once that those tenants moved out, we were able to jump rents like four or five hundred dollars a month on both sides just because we had, you know, new vacancies.

So now a cash flow is about 1600 bucks a month in our portfolio.

That's awesome.

So 1600 bucks a month is a nice chunk of change.

I mean, nobody's quitting their job.

Well, most people aren't quitting their job.

Some maybe, but it's certainly a nice supplemental income.

So that's great.

So let me ask you another question, Fred, for somebody who's listening to this and who's just starting out, how do they take that success from you and how do they replicate that?

So, so how do you recommend they go out there and take that same success with it?

Yeah, I mean there's, there's two types of people, right?

There's going to be people that are going to be investing in small multifamily to rent out all the units from the get go.

And then there's going to be owner occupied investors.

So depending on what situation you're in, it's going to, it's going to kind of vary.

But if you're an owner occupied investor, we'll start here.

I would look at it just like I did, you know, like what's going to be your monthly expenses to own something versus rent something and if it will break Even or cash flow a little bit when you move out, or if you think it will, I would, I would do it.

Because typically, you know, Art, that duplex that we own has had very low repairs and maintenance.

I mean, yes, there's been dishwashers that have gone out.

We've had to renovate one of the sides.

But overall, a small multifamily is going to be pretty low expense relative to the investment world.

And so I would say just look at it from an owner occupied standpoint.

What's going to be your, your pocket expense if you were to buy that place and move into one of the units from an investor standpoint where you're going to rent out all the units, it's just like underwriting any other deal.

You know, you got to see what your metrics are, what your numbers that you want to achieve are and will it make sense.

The good thing about small multifamily is a lot of people know is financing better.

So you're not having to get commercial loans.

You're using a sales comparable approach on a, on a refinance or on an appraisal, which I have stories about how four units, that approach kind of killed us at times, but typically that's going to be better.

So as an investor, you just have to underwrite it and know what your target metrics are and it, it achieves that, then go for it.

So, so before we get on to the next part of the story where you kind of scale up, you know, I always love a good story.

So I know you said there was some good stories there.

On the appraisal side, is there any one that you might be able to share with the, with us and with the listeners, that way we can kind of get an idea of the experience you've had with it.

Yeah, this one, this one hits, hits close to home because when I was dealing with it, I was getting ready to punch a wall every single day because I was so frustrated with the situation.

We, we bought, this was a couple of partners and I, we bought a 4 Plex in a great spot of Portland Northwest.

It's in Washington county.

So better, better county, but still close to everything.

And they were all two bedroom units.

It was two duplexes on one one lot.

We renovated every single unit, you know, from.

We put $200,000 into this property.

Renovated because we got it at such a good deal.

I think we paid 700,000 or 675 grand, something like that at the time.

And we knew that if we renovated it and got rents to Market, it'd be worth about a million bucks, maybe 1.1.

So we put.

Put 6 or 200 grand in it, I think all in.

We were at just shy of 900.

We rented all the units, got them up to market.

We're bringing in about $6,500 a month in revenue on that, on that place, maybe a little bit more.

But we went to go refinance it because it's fourplex.

We're like, great, let's refinance it, get conventional financing, you know, Fannie Mae, Freddie Mac, that kind of thing.

And the appraiser came out, walked the property.

I gave her the list of updates, you know, comps, all that stuff.

And the appraisal report came back, and she said it was worth 8.

99.

So basically what we had into it, and I called her, which I'm not supposed to do, but I called her because her number was on the.

On the report.

I'm like, how did you.

How did you come up with this?

And she goes, well, there's.

There's no sales recently in the area because it's a great area.

So not a lot of people are.

Are selling those assets.

They're holding them because of the rental rates.

And so basically, there was no sales comps for her to justify a higher price.

But on the same report, her income Approach was at 1.05 million.

So she was almost 300 grand short.

Sorry.

She came in at 799.

So she was almost 300 grand short of the income approach when we knew that this property was worth at least a million bucks.

So we had to go get commercial financing on a four plex.

So, you know, it kind of hurt our payment a little bit and whatnot, but we were able to get the cash out that we wanted to because that was our ultimate goal.

One way to be creative, too, and think outside of the box on how to find a solution for that.

Very neat.

Yep.

For sure.

So let's hear right now how you kind of decided to go from duplex and fourplex into larger private communities and syndications.

So what was it that kind of led you down that path?

Well, to be honest with you, it was that.

That appraisal situation.

That was the last four plex that we bought.

And after dealing with that, we all kind of thought, you know, we want to stick with commercial because it's based on the numbers and it's not a sales comparison approach.

And so at the time, my partners, Chris and A.J.

shepherd, they're the ones that started uptown syndication, they had already Bought, you know, a 9 unit, a 12 unit, AB21, I think they had a 21 and a 30.

So they had four or five properties, something like that.

And they were working their way up.

They've, they've been serial real estate entrepreneurs since, I don't know, 15 years ago or something like that now.

And they were focused on, on building this out.

And so at the time I was doing leasing, I leased out most of these properties for them on the vacancies.

Got really familiar with all these assets, understood how they worked, how they operated.

I told him one day, I said, hey, I'm done with leasing.

It's, it's making my hair turn gray.

I'm tired of dealing with upset people all the time.

And I was good at leasing, but it just, I couldn't do it anymore.

And so they said, hey, why don't you come do asset management for us?

We'll give you a good structure and we don't want to see you leave the company, so why don't you come focus on this with us?

And then since I came on in 2022, so it's been just over two years now, we've added, I think, four, four, four assets now.

We did our biggest deal, which was an $11 million purchase here in Northwest Portland right after I had jumped on.

And so I got to learn very quickly on financing, the lender requirements, the different sales agreements when it comes to commercial versus residential and small multifamily, the difference in financing when it comes to commercial instead of small multifamily.

And so I just, I got like a crash course within my first two months of doing larger multifamily.

And that's kind of how I rolled into the medium sized multifamily assets.

I've always been a big believer that the crash course is the best way to learn.

Now sometimes it may not be the smartest way to learn, but you know what, you learn quickly.

You have to adapt and you're kind of forced to.

And you get good at figuring stuff out.

You just have to figure it out.

And it might not be the most efficient way, but as long as you get that result that you're looking for, well, you can hang your hat on that, right?

So as you transition from out of leasing into asset management, which role do you like better and what do you kind of find the main differences between them?

I would say I like asset management better because I'm not day to day with tenants and upset people.

It's definitely more challenging because leasing is pretty cut and dry.

You know, you market a property, you make sure it's rent ready and screen tenants and sign a lease and that's, you know, that's pretty much it.

After the first month of a new tenant, the owner communication drops pretty significantly.

And as long as they're getting their payments and there's not any big expenses, you don't usually have a whole lot of headaches to deal with.

Whereas asset management, it's constant headaches, constant problem solving, constant critical thinking.

And you're just, I mean really, I oversee the leasing agents and the management team that are working on these project or these properties.

And you know, we have access, we're vertically integrated, so I have access to all of our people, PM software and stuff like that.

And so when I see things that maybe aren't getting done as quick as I'd like them to get done, I can go in and see that in real time instead of having to ask for documents a month delayed.

So it's, it's definitely.

I like asset management more, but I would say that it's more constant critical thinking and problem solving.

Whereas leasing, you kind of get ups and downs.

Yeah, especially the last two years or so, they certainly been keeping all of us in the multifamily commercial space.

And I told my wife, I was telling my wife yesterday, if I get one more lender inspection email, I'm going to throw my computer out the window.

Because you get hammered with lender inspections.

One of the things I really like that you guys do is you focus close to home.

And you know, you often hear people say in this space how you can do, you know, multifamily investing anywhere.

And while there is truth to that, in my experience, I've always found that it's not.

You can't, well, you can do it anyway.

It doesn't mean it's always smart to.

What do you find is some of the advantages of keeping the portfolio in a tight knit area and keeping it, you know, close to where you, where you are.

You know, Charles, I'm really glad you brought this up because I was having a conversation about this exact topic last week and so I have a lot of fresh thoughts on it.

I think it's great to keep it close to home.

One, because all three of us are from Portland and I've never left other than college.

And Chris and AJ have been here pretty much their whole lives except for college as well.

And so we're really, really familiar with the locations.

We have a lot of people that we know here.

Our network is pretty vast and we're at the point now where we're starting to make a dent in the, in the market where people start to know us and if they have deals that fit our buy box, they're bringing them to us instead of us having to go, you know, build relationships with brokers out of state.

And that's something we've talked about.

We have talked about expanding to new markets, mainly because the landlord tenant laws are really difficult here.

It's constant, you know, again, constant headaches because the tenants get such favoritism, especially in the courts.

And so we've talked about getting to markets that are a little bit more business friendly, a little bit more property owner friendly.

And I was telling that to someone the other day who I think he's in South Carolina or North Carolina, and he told me, he said, why would you do that?

I go, well, I just told you why I would do that.

And he goes, yeah, but then you have to pay a property management company, you have to pay construction, and we have all that in house.

And so being able to keep that, you know, that money in, in our own circle actually makes a huge difference on our, you know, at the end of the day.

And so I think for now we're just going to keep on focusing on the Portland metro area.

And we have gone a little bit outside the urban, you know, areas.

We've gone to a place that's about 45 minutes outside of Portland just because the different counties have different rules.

And Multnomah county, which is where Portland's at, is really brutal, if I'm being honest.

So we have started to widen our net a little bit around the Portland msa.

You know, I don't blame you for that.

I, I'm originally from New York and I moved out of New York when I started in multifamily full time with syndication.

And like some of my friends in New York say, would you ever come back and do it up here?

And I said, oh, I don't think I want to do it up there.

I said, I don't want to touch anything with, you know, residential up there because as soon as you do that, it's a slippery slope.

But, you know, having first party management, also a great advantage because you're right, it keeps the money in there, but it also keeps control.

And some people don't realize how important that is.

But it's like, you know, having the ability to actually control, you know, like going in there and you being able to view in real time what the management team is or isn't Doing allows you as the asset manager to jump on it that much faster.

So do you find that that serves you well and that gives you a competitive advantage over the others in your space?

A hundred percent, yeah.

And I know we've talked with other operators and they, some people request, I guess, you know, leasing agent access or whatever it's called in those property management systems, so they can go access it real time.

But, but the property managers can kind of control what you see and what you don't see, whereas, you know, we have full access to everything.

And so to your point, Charles, if I, if I think something's going on or, you know, I want to look at how things are going here, I can literally log in from my phone if I have to and check PNLs, application screening, all those things.

Rental, you know, have things been rented where the work orders at any time I want.

And that is invaluable because like I said, if you have third party management, yeah, you might get those documents a month delayed.

But at that point, you know, all of a sudden you get a couple months behind and you're, you're not seeing the trends and you know, that can cause a lot bigger problems than, you know, what I, what I deal with.

Yeah, you're absolutely right.

Well, Trent, we want to thank you so much for coming on and sharing your wisdom with the listeners.

If the listeners want to reach out and get in touch with you.

How can they, how can they do that?

Yeah, our website's uptown syndication.com Most of my stuff is on there.

You can find me on LinkedIn, Trent Warner, w E R N E R and then Instagram.

If you search my name, I'll probably pop up, but I think it's Trent Wrealestate might be my, my handle, but I'm happy to chat.

We also have a podcast called west side Investors Network Podcast.

You can find that on all the major streaming platforms.

Awesome.

Well, thanks so much for joining us today and for sharing your wisdom with the listeners.

And we want to thank everyone for tuning in and listening to the Master Passive Income Multifamily podcast.

Thank you so much, Trent.

Really great getting to know your story and, and look forward to seeing what you're going to do in the future.

I just followed you on Instagram.

I appreciate it, Erica.

Thanks, Charles.

And thank you, Erica.

Thank you guys.