Insider Secrets Podcast Episode #20

 Guest: Chad Defoor

Subscribe to Multi-Family Insider Secrets on your favorite podcast app:

Guest Bio:

Chad has over twenty years of experience in commercial real estate, specializing in brokerage, asset management, acquisitions, and dispositions of multifamily real estate. During this time Chad has worked on transactions totaling over $3 Billion (55,000+ units) as both a broker and an asset manager. Chad is currently employed by Franklin Street and is a member of a brokerage team specializing in the sale of multifamily real estate located throughout the southeast. Prior to joining Franklin Street, Chad was a Managing Director for the Atlanta office of Newmark Knight Frank (former ARA) and was part of a team that sold over $1.9 Billion in multifamily assets (31,000+ units).

Chad received his undergraduate degree (BBA) from the University of Georgia where he double majored in Real Estate and Marketing. While at Georgia, Chad was a member of the UGA Track Team (98-01) where he ran both the 400m dash and the 4x400m relay. Chad is an active member of the Atlanta Chapter of CCIM and the Georgia Chapter of IREM, where he has obtained both his CCIM and CPM designations.

Specialties: brokerage, asset management, acquisitions, dispositions, underwriting, marketing, and negotiations.

TRANSCRIPT

[00:00:00] Kristen: Welcome to this week’s edition of Insider Secrets. The show that turns multifamily investing into reality. Each show we interview guests who are seasoned professionals, actively closing and managing real estate deals. Your host Mike Morawski has more than 30 years of multifamily, real estate investing and property management expense.

Mike is the founder of My Core Intentions. And he’s been involved in over $285 million of transactions. Focuses on helping you create short term cashflow and long-term wealth. Here’s your host, Mike.

Mike: Hey, good afternoon, everybody. This is Mike with Insider Secrets. Another episode brought to you by My Core Intentions, and let me ask, have you been thinking about your intentions? Have you been thinking about your why in your life and what really matters? What’s [00:01:00] important most, when we start to really dig in and formulate that why and get crystal clear on our vision and our goals.

That’s when things will really start to transpire in our lives. You know what? At my core intentions, we invest in our client’s future through an educational platform, teaching you how to create short-term cashflow and long-term wealth and empowering you to execute sound real estate investing. And property management principles.

One of the things I’ve been talking a lot about lately with people is the fact that, we get so busy in this business that where’s the quality of life goal, and where’s the balance, when family’s important, when other things in our life become important, we have. Be able to balance.

So what we want to do at my core intentions is help you do that. So give us a call and let’s see what we can do about designing some plans for you and some accountability for you. So let’s get going here today. Anyhow. So I’m excited. Have a couple of [00:02:00] things coming up in a couple of weeks from now, we have the three-day virtual event, the multifamily global summit that’s going to be coming up.

Actually our guests today will be a panelist on that summit. And I’m excited about our guest today. His name’s Chad , he’s a commercial real estate broker. And I really think this is probably the first commercial broker that we’ve had on the show. And I’m glad about that because he was going to come with a different perspective and a different idea.

Chad resides in Atlanta, Georgia. He’s got over 18 years of experience in the commercial space, specializes in asset management, brokerage acquisitions, and dispositions of multifamily real estate. So during this time Chad’s worked on transactions totaling over two and a half billion dollars. I thought I did a lot, as a broker and an asset manager, Chad’s currently employed by Franklin street and is a member of. Brokerage teams specializing in the sale of multifamily real estate. [00:03:00] Prior to joining Franklin street, Chad was a managing director for the Atlanta office of Newark Knight, Frank, and was part of a team that sold over 1.9 billion in multifamily assets, 31,000 units.

We want to talk to Chad today and find out a little bit about the timeframe that took, but Chad received his undergrads. From the university of Georgia, where he doubled majored in real estate and marketing while at Georgia, Chad was a member of the UGA track team where he ran both the 400 dash and the four 40 relay.

Chad’s an active member of the Atlanta chamber of CCI. And the chamber the Georgia chapter of IRM, where he’s obtained his CCIM and CPM designation, immuno what we’re going to get him to explain all those designations today, but here’s, what’s really cool. Chad’s married to his lovely wife, Laura, and they have two daughters, Brooklyn Heights.[00:04:00]

And why don’t we get Chad to say hello and introduce himself, Chad, I’m impressed with your background, but why don’t you step up and say hi to our listeners today and tell us in one word, your professional strategy that best describes you and your investment strategy.

Chad: Mike, thank you so much for the invitation to be a part of the podcast.

I really do appreciate that and thank you so much for the warm welcome as well. As you said, in, in intro, multifamily is my background. And when it comes to multifamily, I think the biggest key to to success in the industry are basically relationships. And when it comes down to relationships, I joke all the time that the business cards changed, but the people are all the same.

I think in order to really succeed in this industry, agree, you’ve got to have some go-to friends in the industry that really really have your back that are able to lean on in good times and bad because as real estate is very cyclical. Unfortunately we have a little bit of [00:05:00] a blip this year in 2020.

And we will get through it for sure. I’m very confident that amount of this even stronger, especially with the multi-family and the multi-family space moving forward. Yeah, I’ve had to sum it all up, but it’s all about relationships.

Mike: You know what? That’s so true, Chad, and, what’s interesting as I was just having this conversation with my son about relationships, and I suggested that one of the best books I ever read about relationships is how to win friends and influence others or influence people by Dale Carnegie. And trying to get him to engage in that a little bit and understand that, he thinks right now he thinks golf is going to help him with his business relationships.

And it probably will, but so will that philosophy of how to build those relationships,

Chad: right? That’s absolutely correct. Yeah. And I agree with him to some extent golf will definitely help. You’ll see people at their best and the worst all in the span of 15 minutes. It’s a humbling game for sure.

Mike: Yeah, no doubt. No doubt. So Chad, listen, tell [00:06:00] the listeners and what was the defining moment for you that made you go into the real estate business?

Chad: I’ve thought about this a lot in, because I don’t come from a real estate family or background, this is something I chose to do.

While at Georgia I was bounced around majors, just like everybody else. And finally ended up with marketing that’s major. It decided to take a real estate classes as a business elective. And, I figured out, Hey, I may buy a house one day. I may, may be something practical in class versus, a German polka history or underwater basket weaving, something like that.

So I took a real estate class at George and fell in love with it. And the very first day Dr. Bounds, David Downs, who, while I was at Georgetown at VCU heading up their real estate department. You drew a pie chart on the on the on the Blackboard, whatever the marker board that we had and and put a one-third and then two thirds.

And then he wrote real estate on the two side and they wrote [00:07:00] everything else. On the one third side, he turned around to the class that said all real estate, two thirds of the world’s assets are tied up in real estate. One third of everything else. Channel, whatever you want to call. It is on only other side.

Wow. That really left an impression and felt like if I want to play the odds, maybe I should be on the on the real estate side, on the two third side, moving forward in a career. So I added real estate as a second major and got a victory lap in got an extra football. So he’s an into Georgia and

Mike: That’s an interesting statistic though, about two thirds of the world’s wealth like that.

And I knew that a lot of wealth had been created by some, when you look at the Rockefellers or you look at Trump, right? There’s just a ton of wealth that’s been created through real estate by those people. But that’s a big number. It really is. One of the things I always kid about, as I say, we’re never taught a lot of these principles in school, right?

So growing up and going through high school or even undergrad, you’re [00:08:00] not taught a lot of these principles unless you specifically take a class and sign up for it. Chad, let me ask you this with all your knowledge and your expertise. What is your real passion in real estate? What attracts you to the business most?

Yeah,

Chad: it’s really what I’m working on now, which is what I call workforce housing. The best definition for workforce housing is. Apartment complexes that were built last century. Where I’m at in Atlanta Atlanta grew up in the seventies, eighties and the nineties leading up to the Olympics in 1996, there was a big construction boom.

So there’s a lot of workforce housing throughout Metro Atlanta, suburban garden style, workforce housing, 200 units, the sweet spot. And that’s my passion. I believe that it feels really good to see investors buy older apartment complexes and update them, bring them into the 21st century, make a nice community for, not for families.

To raise their children. So that feels good. It really does to [00:09:00] see something broad from, a notch down to a nacho. And and we’re seeing that all throughout Metro Atlanta,

Mike: Let me ask you this, you and I know a couple of people that are so picky that they don’t like that older stuff, right?

So if it’s not 1990 or newer, they’re shying away from it. You find a lot of people like that in the marketplace or a lot of those, older deals still selling. Yeah, we,

Chad: it’s two different camps. You’ve got the institutional side that I joke the real estate stops.

Everything has to be nice, new improving nine foot ceilings, just these immaculate buildings. And, those are the masters of the universe that really go after that kind of stuff. They’re the, the star woods and the Blackstone. Carlisle’s in these really big shops out there.

That’s not what I do or who I work with. I work with individual owners at syndicators, people who pool their money together and take down, a 1986 built, 200 unit deal in the suburbs. And there’s certain cutoffs.[00:10:00] The larger institutions the really big players, they just don’t go after that stuff unless they have a specific fund or whatever.

But generally speaking, I deal with certified rich people who are basically going out by, cash flowing, positive cashflow. Yeah,

Mike: interesting. I like that comment certified rich people. So anyhow, what you’re saying is really quite eye-opening for our listeners, because what that’s telling them is that there’s people in the marketplace, there’s brokers in the marketplace that will work with them, that they don’t have to be the upper institutional kind of money.

I can remember being a kid driving down the road with my mother. I was young too. And I’ll never forget this. I said, who owns that big building? And out of nowhere, she said in an insurance company, not only me, I think she knew. But that’s that institutional money. So it’s. So what’s what’s the best way that your firm particularly who you’re working with today at Franklin street [00:11:00] can help new and seasoned investors in the real estate business.

And, I, a lot of our listeners are newer investors. So even maybe just talk to them a little bit and talk about how you can work with them and help.

Chad: Sure. Absolutely. Yeah, this is, I guess my commercial for Franklin street. Yeah, there you go. We’re a, here’s my flood. We’re full service real estate firm.

We handle investment sales, not only for multifamily, but for retail office industrial, we do debt and equity placement. We do landlord and tenant rep. We do property management. We do project management which is an interesting line of business. If you do commercial build out or tenant improvements, we oversee that.

Manage the contractors make sure it’s own time and open budget. But the biggest piece of the Franklin street pie half is actually the insurance. We insure about 28 billion in commercial real estate in America. About 15 million square foot of office and retail and industrial. And then about [00:12:00] a little over 400,000 total units.

So insurance is a really big piece of the Franklin street pie. We could certainly help any of your listeners or podcast viewers out with any of those avenues. And I certainly encourage your listeners to certainly shop insurance as often as they can, because that winds up being a little T does not really pay dividends that same light, that things change over time.

It always pays to shop.

Mike: Yeah, not anymore. I remember when our dads were working and it was they could work and know that for 40 years at 40 hours a week, they’d get a $40 watch at the end when they retired. And you don’t even get that anymore today, right? Yeah. Hey, let me ask you though.

You, so you guys do insurance also. So do you broker insurance and sell real estate or do you just do real.

Chad: I just do real estate. I’m just strictly investment sales for multifamily and specifically BC workforce housing throughout the state of Georgia and the surrounding [00:13:00] states, Tennessee, Alabama Carolinas.

We do have an office in Florida that handles all of Florida. I’m just the guy here, boots on the ground. I’m a team of we’ve got six six other folks on our team. So a team of seven. And this is all we really specialize in is older, BC workforce.

Mike: Interesting. So we all know what the environment is, the current environment right now, and it we’ve got, we’re somewhere, hopefully in the middle or at the end of this, COVID 19 pandemic. What pitfalls should an investor look out for today and what’s going on.

And I want to. Covered two points, if you can, like if you’re somebody new coming in the business or if you’ve been in for awhile and you’re trying to make a transition from smaller multifamily to larger multifamily. And then again, on the other side, the large syndicator, the people that we know, Chad, that, that are doing large 3, 4, 500 unit deals.

What are the pitfalls out there today that everybody really needs to be [00:14:00] watching for?

Chad: Yeah, there’s a mirror of that, but from a general perspective, especially with people just starting out. I just want to stress that real estate is not a get rich quick business.

It’s a gift. Get wealthy, slow business. I definitely think that you want to there’s an old saying, like if you’re an actor, an actress that nobody’s an overnight success, everybody is a 10 year overnight success. I definitely think that applies to real estate. If you’ve got the mentality to go out and be like a bulldog on a meat truck and just grind and grind, real estates, you’re going to do very well.

Yeah. Once you get into the bigger players, they they’re certainly they’re well seasoned. It’s all about rats. I think when you’re just starting out, you, you want to see a lot of deals. You want to figure out what you like. What markets you’re focused on a lot of people in my space.

They’ll look, I don’t know whether they’re looking at Atlanta and they’ll look at Florida. They’ll look in Texas. Yeah know, bounce all over the map regarding this particular housing class. [00:15:00] For your people, just starting out that they’re listening to this, I think it’s just focused on an area that you feel like you, you understand, and that you can grow in.

And I think, over time, certainly you stick to it long enough. Good things will come.

Mike: Yeah. Interesting. Good for you. You said an interesting word and you said grind and, I think I’ve talked to a couple of people recently who are new in the business and coming in the business and I said, you just have to stay consistent.

You have to walk through it and you probably can appreciate this. But I remember when I first got in the real estate business, I joined the business. I was a sales agent. As selling residential real estate. And my first eight months in the business, I grounded out calling for sale by owners every day and sold 78 single family houses my first year.

And I’m sure you’ll appreciate that because what kind of work that takes when, and especially using the word grind. Is it the same type of when you’re [00:16:00] searching for, so say that you’re looking for a buyer, you have a new investor that you’re working with or a seasoned investor that you’re working with.

And you’re trying to find a specific deal for them. Are you going to sellers, looking for sellers to sell. Or

Chad: it’s the opposite. We w we, we generally we’re listing brokers, so we generally represent the sellers. So we’ve got relationships that go back, years and years and deals that we’ve done in the past.

Activity certainly breeds activity and activity of the past. It’s, you’re planting those seeds for a tree to grow into the future. And so th that’s the concept of buyers typically call us about we’ll blast out a listening and say, Hey, we’ve got, a 200 unit deal for sale and Cobb county.

And we’ll we’ll fill it all the phone calls and and then tour real estate with those who want a toward, and then have a call for offers get the offers in, probably take the top three or four groups for best and final. [00:17:00] And make sure they’ve got their equity together, their debt together.

They’ve got a track record. They know what they’re doing. The decision-makers have seen the real estate. We w we try to just eliminate risk from our clients eliminate as much risk from our client in transacting as possible. And that’s the value that we bring to the table is generally if you’re in the business for a long time you tend to know.

A lot of the players, not to say that we don’t, we know everybody, we certainly don’t, but we know a fair number of people and know that the the great to who, who transact and who do what they say and say what they do over time. And that really rings true whenever you’re calling for all firsts and in can get a deal done that way.

Mike: So you’re in Atlanta. Atlanta’s one of the hottest multi-family markets right now. I’ve heard it said that’s where all the smart money’s buying right now. And are you finding or are the offers that people are putting in or are you seeing them be accelerated over list price or are the offers coming in?

Are they all blind [00:18:00] price offers? How’s that whole process work

Chad: these days? Yeah. Leading, before March, before COVID kinda came in it was not uncommon to see hard-earned as money day one subject survey, title, environment. Mostly everybody was using agency financing or a bridge product to take a deal down.

So it’s usually, hard on us money. Pricing was pretty close to our guidance of, we would we would typically have guidance that was right in line with where most things would trade. Within, a percent or two then COVID hit. And post COVID we’ve probably had three transactions post COVID.

And usually it’s about, we were at maybe 5%, five to 6% of of a discount in pricing right now when it comes post COVID. So it’s not anything that we saw certainly in 2008, that was just a that was just a real estate led recession. It was really looked back on it, gosh how many presidents were pushing home ownership, leading up to the real estate crash note, certainly bill Clinton did, [00:19:00] which Bush did crash occurred.

Two, two term presidents that did nothing, but push home ownership that kind of led us over the over the edge. And the Jew, no job, no income, no, no problem loans and all that kind of stuff that really. Really made for a messy, real estate market in 2008, 10, 9, 10. I think we had REO all the way up until probably 15, if not 16.

This pull back. I’m not, I don’t think we’ll see quite that much, Mike. I think it’ll be, yeah. People can mess up an apartment complex a bunch of different ways, but I don’t think you’ll see nearly the amount of REO product that we had way back when, i, I think you’ll see a slight dip.

And then and then I do think you’ll probably have more renters in the renter pool coming out of this than ever. So I think there’ll be that the demand will just be so strong for multi-family housing specifically in, particularly in, in the suburbs throughout the major metros. I think we’re in a pretty good spot coming out of this.

[00:20:00] They’ll probably be a little bit of operational pullback. You’ll have to manage some bad debt. You’ll have to manage some situations with, unfortunately people losing their jobs and having to work with people. Once we get from footing again, hopefully in the early part of 2021.

I think multifamily is a really good spot to be

Mike: in. Yeah. One of the things historically, year after year, I think multi-family has been, is good. And what’s interesting to me. Most people that I’m talking to right now, they’re still saying that their rent collections are strong in the midst of all this.

And I just find that to be interesting. You got people that were out of work for 90 days and I wonder if the single family residential stuff might get, hit a little bit because of all the forbearances and things like that went on. No, we’ll have to see what happens is with, as people continue to go back to work.

And, I know one of the interesting statistics in the city of Chicago was that 4,400 businesses closed down in March. Oh wow. And only [00:21:00] 2100 of them have reopened or plan to reopen. And that’s, you’re talking yeah. The little flower shops, the nail salons, the bars, the restaurants, all of those types of businesses.

And I found that to be interesting statistics, and here’s what I know about America and us as a country and real estate, 2001, we recovered 2008. We recovered we’ll recover from this also. So I don’t think that anybody should pull back or be afraid. Because we’ll see this continue to explode, and people will be successful as a result of it.

Chad: So I couldn’t agree more. My queen it’s crazy to think about this. The start of this century, we’ve had three major, a hundred year events. If you would, between, nine 11, the worst attack on American soil since December 7th, 1941, Pearl Harbor.

Then you have the great recession in 2008, the worst since the depression or economic event in America, since the great depression. And we’ve got a [00:22:00] global pandemic, the worst it’s 1918. But will be more recessions moving forward. I just don’t want these hundred year events or these historic events to come back.

I just want just a regular day, we got a little overheated, we’ll pull back for two quarters and then and then move forward time per session. Maybe bad things coming. Three, we got all three of the bad things out of the way early in the century and kinda can really leave.

Mike: You talked about three bad precedents there.

Chad: If I, like you said, always bet on America because we rebound. It’s it really makes you, it makes you feel proud to be an American that we go through such catastrophic events and then come out. Yeah,

Mike: and I didn’t mean to say three bad presidents.

What I meant to say was that I think that there were three presidents in a row that pushed that home ownership issue. And, there’s a balance in the economy. If you talk to any economists, they tell you that the economy’s balanced it, I think 67 or 66 to 67% home ownership. [00:23:00] And as soon as these guys hit, started to stress it at 71 72 points.

The world went nuts.

Chad: It upset the applecart issue. It is and rental housing, whether it be multifamily or single family rental is vital for, a large segment of our society and having clean, decent, warm, safe housing is a must.

Mike: Yeah. My dad told me when I was a kid, he said Hey, if you’re ever going to go into business for yourself, go into food, shelter and clothing.

And I’d been in belter for 30 years and I’ve never been unhappy.

Chad: That’s great advice. Yeah.

Mike: Hey, if you were going to design a plan today for yourself as a new multifamily investor coming into the marketplace, what would that look.

Chad: If I was brand new into multifamily just coming out I’ll tell you what a bad strategy wouldn’t be.

Maybe you buy a a duplex or a quad or an eight Plex and you live in one unit and now if you’re single that’s totally easy to do. If you’re married, you got to have an understanding spouse, for sure. [00:24:00] I’ve heard of people doing that, starting out their multifamily career, just actually living at where they buy and and really, your housing is basically taken care of.

We’re able to reinvest that capital, that you would be paying for housing in, into the real estate. There you nurse it back to health, you fill it up and you get cash out refi, 18, 24 months down the road. And wash, rinse and repeat. I think that’s a fantastic strategy for someone young, starting out in the industry to to really build up a nice cashflow business that they could be proud of and scale up.

Mike: And that’s interesting. You said that I didn’t, I actually didn’t expect you to say that, one of the things strategies I teach new investors is, Hey, if you can create wealth with two to four unit properties and buy that first one, buy a duplex, buy a two flat or a four flat, and you could do FHA financing.

You live in one of the units, you get your feet wet. You’ve got economies of scale, you’ve got ease of entry and you learn the management stuff along the [00:25:00] way. And now it makes the next one so much easier.

Chad: That’s right. And it’s all about getting on base and building up a track record.

So the first deal you do is always the hardest. That’s no matter what the first deal is always the hardest you build upon that. And and you slowly step up over time. And the timeframe will compress in between deals. Maybe the first deal you buy and you got to wait two or three years before the next.

And Frank depresses between the second and third and even more between the third and the fourth. But I think it’s an excellent way to go about it. It in our industry about a hundred units is the the major tipping point to where you can actually have an onsite manager and an onsite maintenance guy.

The old adage is for every 100 units. You can have one in the office and one on the ground. So a hundred units is the tipping point where you get into more seasoned bigger, more established players because that they started, from the ground up and built themselves up from, [00:26:00] quads and eight plexes and 16, this and 36 that, and and that’s what you will ultimately want to do and have have the management.

Onsite that to take care

Mike: of the residents. Yeah. Yep. Interesting. One of the things I always, I talk about this a lot with my coaching clients is there’s one of the large world REITs right now is, and for those listeners that don’t know a read as a real estate investment trusts, similar to a mutual fund, they started out as a multifamily syndicator. And the first deal that they bought was a frame four unit building in Chicago. And today, these this four gentlemen that started this company are just the hugest REIT in the world right now. And every asset class. Everybody has to start somewhere.

Chad: That’s right. Yeah. And like I said, get it on basis. I don’t care if you’re hit by a pitch, if you’re walk single nice. Oh,

Mike: a baseball fan. Look at that. Have you watched baseball

Chad: at all this year? Being from Atlanta? Of course the [00:27:00] Braves are a big deal. Yeah we’re thrilled to have baseball back and actually the Braves are are played pretty good baseball.

Of course, this will be the year we win the world series. Just we can have an asterick by. Only however many 65 games or however many they’re playing. But that’d be our luck, but I guess you could take

Mike: what you can get nobody there watching. I think the spookiest thing is when I turn the white socks on and there’s nobody in the stands.

Yeah. I can’t even watch this. Yeah. Chad, do you have any secrets that you would share with our listeners?

Chad: I don’t know if this is much of a secret it’s common sense once you hear it. But up in multifamily job creation is just the single most important driver to apartment demand.

So I think for your individuals listening right now, I would focus in markets that are creating jobs and gaining population. It’s that simple of a metric, really? We’re on that. And Atlanta as you mentioned it’s picking up a lot of population picking [00:28:00] up. A lot of jobs of state of Georgia right now is 10.6 million people, or the eighth, most populous state in the union.

6 million of the 10.6 are in Metro Atlanta. So 60% of the entire state’s population is Metro Atlanta. And a few fun facts is over the next. 10 years, the state of Georgia is expected to grow 17.7% population. And then over the next 30 years, I found this fascinating. The city of Atlanta is going to pick up an additional 2.6 million people off of the 6 million base they’ve got now.

So we’re basically going to add the equivalent of the Denver population to Atlanta between now and 2050. Wow. There’s going to be a big demand for housing.

Mike: Yeah. Th those are interesting statistics. I know every year and sometimes in the middle of the year, it gets revised, but there’s a [00:29:00] top 10 market list that’ll be published and that’ll come out by the big brokers in the country.

And it’ll by the analytical companies. So where does Atlanta place on that top 10 list?

Chad: Oh, I’m not sure where as far as the growth pattern goes, we’ve usually been right up there with Dallas. Phoenix is as entertained a lot of growth, but I haven’t seen the latest report yet to that to say where we slot, but we’re usually pretty, pretty high up there.

We’ve been won several times and we’ve been, in several times, Rarely are we out of the top

Mike: 10? And what’s interesting is those rankings are always based on everything you talked about, right? So growth jobs, job support rental support, rental pushes all those things that will help a multifamily operator do well.

And so what I always tell people is everything you just talked about. And if you’re somebody listening to this podcast, go back and listen to that again. And look at those numbers. That Chad talked about because in your [00:30:00] marketplace, or if you’re buying multifamily outside of your own marketplace, seeing what’s going on, are you in an emerging market, are you in a market that’s going to support any rent growth?

Don’t fall into the traps of not having the great opportunities that you could have in a market like Atlanta.

Chad: That’s right. No, we appreciate that. And Yeah. In Atlanta kind of jumping ahead a little bit, a few little more fun facts about Atlanta is we’ve got a real diverse economic background.

So you can’t really say that Atlanta does any one thing, it’s not a, not an oil town. It’s not a, it’s not like Detroit, you think of the automotive industry, we’ve got 16 of fortune 500 companies based in Atlanta, so that’s number four in the country. We’ve got 30, 41,000 companies based in Atlanta.

And we’re just a big magnet for college graduates in Atlanta. I’m the perfect case study when it comes to that. I’m from a small town in Northwest Georgia called Dalton, Georgia. And our claim to fame is where the carpet capital of the [00:31:00] world. So they’ve got three major carpet manufacturing facilities or companies.

And the only thing I desire to do with carpets, walk on it. I, when I graduated from Georgia, that was, I was not going to move back to Galt and I, I had no, no real desire to do that. Moved to Atlanta you get the same thing with kids that maybe graduated from Auburn or Alabama or Tennessee or Clemson, Florida.

Atlanta is the big city in the Southeast. So it has a natural kind of grass. For college educated folks and a couple of other fun facts about Atlanta is we’ve really kicked it into high gear regarding high-tech jobs in Atlanta. We’ve gained about 32,000 technology jobs over the past five years.

We’re not one of the top 10 high tech cities in north America. Re re ranking in it, number nine, which, you usually think of San Francisco and Seattle, Austin, Texas Raleigh, Toronto is another big high-tech city Atlanta’s number nine. So [00:32:00] we’ve got about close to 150,000 high tech jobs in Atlanta.

So we had that kind of on the higher end of the state. But on the more of the, in my world the the workforce housing world we’ve also become just a national super hub for shipping transportation, distribution warehouse. So the south side of town predominantly around the airport, around Hartsfield Jackson, the world’s busiest airport, or at least it was pre COVID.

We’ve got all these major fortune 500 companies placing these million square foot industrial bets all throughout the south side of town. Procter and gamble, Walmart, Amazon Kroger you’ve got just these major companies placing these huge bets throughout the south side. And those are all great jobs, hourly wage, 15 to $20 an hour job.

That’s our render base. And then in the time tie that into the reason why, people ask why Atlanta? Why is it such a logistical hole is really, it’s [00:33:00] at the Southern range of the Appalachian mountains. So the Appalachian mountains started off 70 miles north of Atlanta.

And they’re just, they’ve always been a natural barrier for growth throughout America, throughout our history. We. That was just where the the 13 colonies originally stopped where the Appalachian mountains. So we eventually got over the mountains and grew west, but from Atlanta, we’re the first flat spot you come to, you could ship Northeast I 85 and ultimately ties into in Virginia.

You can sh you can ship to the Midwest really easy up and it goes all the way to patrol. And through a lot of towns in between where you can ship east west really easy because we’re the first class, but you come to, I 20 goes all the way out to Dallas. So you go through the Sunbelt, you go to the Midwest, you go to the Northeast and that’s truck traffic that doesn’t and we’re basically the stat for Atlanta when it comes to foot.

Traffic is we’re basically two days away from 80% of the us population on the. The air [00:34:00] side, we’re two hours away from 80% of the us population come on out of Atlanta. Wow. 500 companies. One of the big guys here is Athens to the ups. Sure. They’re pretty good at logistics.

They picked Atlanta probably for a reason. They actually just built a massive facility in Atlanta. It’s the second largest ups facility. And at least the United States, if not the entire world, the first one is livable. And they just finished construction just west of right. Basically where I 20 and 2 85 come together on the west side of town.

So that was a big deal.

Mike: Wow. That’s a lot, that’s a lot to think about, especially if you’re looking for a market to go to whether, and I’m sure Chad, that there small multifamily is as there is large multifamily there. That’s correct. New investor was looking to even get their feet wet, that they could find that product there as well.

So that’s awesome to know. So one last question I have for you is what advice would you give a brand new investor today?

Chad: I G I [00:35:00] guess. It comes back to relationships. You want to ultimately no matter the product type you’re in the market, you’re in, you get to know the players in that particular market.

And if you live somewhere else and you’re investing in say Atlanta or Dallas or Phoenix or salt lake city, wherever you get to know the players in that market, because it ultimately comes back down to relationships and and figuring out what the. What you like in those particular markets, by just talking with people, learn from their experience.

Usually real estate people are pretty pretty level-headed and open individuals, approachable individuals for the most part. There’s always exceptions to the rule, but in my experience they’re usually, good-hearted people and if approach somebody and want to learn they’ll share with you.

Maybe not the total secret sauce, but at least give you enough guidance as to, Hey, this is a good market. I have a lot invested there. I’ll never invest there again. Sometimes the good advice is maybe not it’s maybe no, we’re not. Yeah, where to go. [00:36:00]

Mike: It’s interesting. You alluded to the fact that, building those relationships, even with your peers, right?

The people that are in the same space you’re in, and I had somebody say one time that’s an awful lot of competition in there. And I thought, look how many McDonald’s or Starbucks are built on different kinds. I don’t buy into competition. I think we’re all in this together. We might as well all learn from each other.

We might as well all grow together and it just, the only competition I see as a is yourself. But Chad, I want to thank you for today. This has been very enlightening. It’s about Franklin street and Atlanta and yourself and your strategies in that you learned a lot. I know that my listeners have heard, have learned a lot here today.

I look forward to your participation at our global summit and the panel, and really thanks again for your time today. And everybody who’s listening. I just want you to remember. Our Saturday morning multi-family unplugged show that’s at 10 o’clock on Saturday mornings. And Chad, if you would say [00:37:00] goodbye to everybody and

Chad: thank you so much, Mike, for for having me and another shameless plug.

If there’s anybody out there who wants to learn more about Atlanta, they want to reach out to me directly, feel free. Rather they do

Mike: that. Chad, how do they get ahold of you?

Chad: Yeah, my direct dial is 4 0 4. 6 4 9 62 79, or they can email me Chad C H a D dot two four, B E F O r@franklinst.com. They can also check out our website, Franklin S t.com, www.franklinst.com.

There we’ve got listings. We, tells a little bit more about the company and our background and how we can help your listeners out for the real estate

Mike: needs. Great. Thanks for that. And we’ll have Chad’s information on our website and everybody have a great day and we’ll look forward to talking to you and seeing you again on next Tuesday.[00:38:00]

Kristen: Thank you, Mike, and thank you for joining us for another great episode of Insider Secrets. As always, Insider Secrets is brought to you by My Core Intentions. Join us on social media and visit mycoreintentions.com where you can get expert coaching on all things, multifamily investing in property management.

We’re looking forward to having you back again next week for more Insider Secrets.