[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 and thanks for being here. My name’s Mike and I’m with Insider Secrets. I couldn’t have said it any better than Kristen just said it. You know what? Our intention at My Core and Secrets is to create and help our [00:01:00] clients build a future through real estate investing.

Through different techniques, different strategies. And I’m so big on education. It’s so big on strategy. Listen, if I can help you create short-term cashflow and long-term wealth, and I can bring that to you through education platforms, with different people. You know what, it’s just like you see the sign behind me, the Summits coming up.

And we are going to be filled with 20 different speakers and panels and VIP breakout sessions and rooms. And you know what, if you haven’t registered, you still have time. And I would register this three-day event is going to be action packed and just full of education and all kinds of things. Actually, our guest today will be a guest that’s going to be on our summit also. And I’m excited about our guest today. Let me start to introduce my friend and long time real estate investment attorney, entrepreneur, and community activist, Dugan Kelly. Dugan’s offices in California, in Santa Barbara and in Dallas, Texas. [00:02:00] Both a couple of my favorite places.

Dugan is one of the co-founders of Kelly Clark PC. And their mission is to deliver big firm expertise and experience to the local community. Dugan Kelly currently serves clients throughout the United States. It’s principle offices, like I said, are in Texas and Santa Barbara. Dugan chairs the firm securities, and real estate practice groups assisting clients in all phases of multifamily, commercial and residential acquisitions and sales.

Mr. Kelly’s real estate experience includes transitional services for his clients ranging from commercial loans, closings real estate, private equity, capital raises, joint venture agreement, commercial leasing, business acquisitions and general commercial real estate services. Well that’s a wide range of services that they offer.

And, here’s what I know is he’s very sharp on each one of those areas. [00:03:00] In the last couple of years, he’s handled a combined transactions of over $3 billion. And throughout Mr. Kelly’s 20 years of experience, he’s also tried numerous cases in the state and federal courts, administrative courts in arbitration with over $70 million in verdicts, settlements, and workouts and millions in settlements prior to trial. Mr. Kelly understands that there isn’t one solution fits all for every case.

Mr. Kelly lives with his wife, Michelle and their three boys in Dallas, Texas. And let me get him to introduce himself. This afternoon, we’re going to get him to talk about all his skills and his skill set and how he do that.

Dugan you know what, why don’t you say hi to our listeners? And I’ll just shut up here for a minute. But here’s what I want you to really do is just tell our listeners in one word, what best describes you and your investment philosophy?

Dugan: Hard work. [00:04:00] So I’m a big believer Mike in hard work. That’s the core principle that my dad instilled in me from an early age is that I might not be the most talented. I might not be the smartest. I might not be the wealthiest, but I have a philosophy that nobody’s going to outwork me. And that is true. Myself and my team and obviously my clients the last 20 years. So thank you for having me on your show. It’s an honor to be here with you.

Mike: Oh, it’s an honor to have you here. What’s interesting is, over the last 25 or 30 shows, I have to tell you, nobody’s said hard work. And I’m such a proponent of work ethic. Because, Hey, how many Rudy’s are out there, right?

Dugan: Yeah. There’s no doubt about it. You can make up for a lot of, I’ll take somebody that has an excellent work ethic over somebody that has naturally gifted 10 times out of 10. Because a lot of the areas in which people are naturally gifted, you can learn, you can be taught.[00:05:00]

But if somebody just lacks that killer instinct or the instinct to really work hard until the job is done, you can’t teach that a lot of times. They’re just that’s a problem.

Mike: Yeah. That’s so true. So listen, I gave a pretty big introduction about you and everything you do, and Kelly Clark does. And what I’d like to know is talk about your background a little bit. How’d you get to where you are? You grew up the son of a preacher and.

Dugan: That’s, right? Yeah, so I was born and raised in Montana. I still call Montana my home. When I grew up, my dad was a Pastor. He was a businessman, an entrepreneur, and also a lawyer.

I didn’t know growing up that most people thought that the law and being a Pastor couldn’t happily coexist with one another. So it was very common in my household to talk about politics and law and religion, all at the same dinner table. And I had a great [00:06:00] upbringing.

My dad was very ambitious and he wanted to see exactly what type of work ethic I had instilled in me from a very early age. And so he provided opportunities for me to see how fast I could excel through school. And so I graduated from high school and college while I was still in my teens, and I finished law school very young.

I was 20 at the time, just turned 21 that time when I graduated from law school. So I’ve been practicing for 20 years, but that’s I think in large tribute to my father, who wanted to see exactly for me, for his first born son to see exactly how fast I could run. So he let me run quite as fast as I can run.

And that’s in part probably why I think hard work is such a key component of my DNA and who I am as a person.

Nice. Nice. Interesting. What what got you intrigued [00:07:00] in real estate? What’d you do before you became a real estate attorney and what got you intrigued to go in that

direction?

So when I graduated from law school, I thought that I was going to spend most of my career in the courtroom. So for most lawyers, when you go to law school and you think to yourself, the only types of lawyers that you really know about are the ones that you see in the movies and TV. And so the, yeah, that’s right.

The sizzle, the criminal lawyer, or the civil courtroom lawyer, the one that’s making the, The speech in front of the jury or the judge or whatever those impacts I should think. So I am why I got, I have a little bit of that in me, a little bit of the carnival Barker to jump up on the stump and say things, to people and want to be persuasive and sell.

And so I did that for a long time, but I shortly realized in the middle of probably my first decade of practice, that litigation was really the unhappy business. Most of my [00:08:00] clients were unhappy. They were either unhappy having to Sue people. They were unhappy being sued, even when we want a large verdict for them.

They were still unhappy because of the amount, the, that they had to pay their attorneys or they had to pay for costs, or once they got a fancy verdict, the defendant didn’t have money to pay that verdict. So many people think that if you get a verdict at trial, that there’s just this automatic, magical exchange of money from the party, who’s said you’re liable.

You got to pay this person, this amount of money. And it doesn’t work like that. It’s almost like another thing. Lawsuit after you win. And so my clients were not happy in 2007, 2008. A lot of my clients were in the construction industry. They were involved in commercial real estate. They were either developers themselves.

They were syndicators people that were raising private equity, but we were handling the transaction when it [00:09:00] would fall apart. Or the lender that they had was trying to enforce the personal guarantee. And, when the whole financial crisis happened in 2007, 2008, everything changed. And so I had a lot of clients that had massive net worse that they became embroiled in litigation for years.

And so I had a call, a couple of really good friends of mine clients that we went to church. That’s it, you’re really good at the litigation side of this, like helping creative problem solving, resolving conflict at the end of when things fall apart. Have you ever thought about starting? Oh, at the beginning where everything is really good and people are okay.

Happy and they’re excited to do deals. So with your mindset of a litigator, you might be able to help people head out head off conflict earlier on in that process. And the more I thought about it the [00:10:00] more I thought that it was a natural fit for the gifts that I had and the gifts of the, our team.

And so we opened up real estate and securities practice. And so my practice slowly over the last 10 years has transitioned from. Almost entirely litigation based to my, what my personal practices is now almost entirely transactional formation, securities, real estate putting the deal together based.

And I realized that my clients are much happier at this stage when they’re putting the deal together than they are at the end. And something actually goes wrong. That’s how I got into real estate and securities practice group. Nice.

Mike: Tell me tell our listeners, not just me, but a little bit about Kelly Clark and the size of the firm.

And, seems like you do a lot. And do you have. A specific [00:11:00] focus or do you have something personally that you’re more passionate about than something else?

Dugan: Yeah, so we’re a small firm. We’re a small firm by design. We’re a small boutique firm with a national firm. We have actual physical offices.

We don’t, we’re not working out of our houses or our cars or anything like that, but have physical places. So if you want to come see us, you can come see us in Santa Barbara or the Dallas, Texas area. But by design, I worked for big firms and I realized that big firms come with big costs and those big costs have to be paid.

By someone. So I saw that big firms tended to charge higher rates for clients. And so the, what the clients often don’t realize is that if you’re going to hire that thousand dollar an hour lawyer, which I’ve done before you’re paying for a lot of that thousand dollars is going for the [00:12:00] lights. The, all of the overhead associated with the hundreds of lawyers or staff that work at that particular location.

My philosophy is a little bit different. We charge at least in the real estate or securities practice. We try to do everything on a flat fee. So we try to level set the client’s expectations. At the front part of it and keep costs down. So as a result, we have a very streamline all of our lawyers are very streamlined.

There’s probably six or seven of us that are active throughout the United States. In helping clients, we do a lot of we’re a full service law firm, but we don’t do every aspect of it. But we try to provide essentially a one-stop shop for clients. So that regardless of, yeah, if your issue is transactional, meaning you want to start a company or you’re thinking about starting a company, or you want to figure out what is this thing called syndication?

[00:13:00] How do I sell a security. Or if you’ve got problems that have naturally come up in your business or your personal life, that requires somebody to look at it from a litigation mindset, we provide those types of services for our clients, but ultimately for us, we view the practice of law as a ministry.

We really think of it more in terms of like how we can really serve our clients. And whether that service means that we are representing you as lawyers or whether our the reason that you came to us is just so that we could get you to somebody that is more qualified to handle your particular matter or transaction.

That’s our philosophy and the practice of

Mike: I hope my listeners are picking up on this do again, that there is, there’s something different than just you being just an attorney, that there’s a service that you like to extend and really [00:14:00] heartfelt coming from your heart cause you really

Dugan: care.

I appreciate that, Mike

Mike: and I hope my listeners are picking up on that because over the years, I’ve been doing this a long time and a lot and with a number of different types of people. And you can always tell when that just comes through. So thank you for that. Thank

Dugan: you.

Mike: What’s the best way.

That in the, in current environment that we’re in. So let me rephrase how many to say that in the current environment that we’re currently in, and here we are Q3 of 2020, right? The world is half shut down, half open. Nobody really knows what tomorrow’s going to bring her or what’s happening.

What do you see for the real estate investment

Dugan: world? I’m still very bullish on commercial real estate. I love real estate. I think it is an amazing opportunity to help individuals and families build wealth for the future and for future [00:15:00] generations. But I don’t just say that as a largely a service provider we need, we’re a tool in the owner’s tool belt, so to speak, but I’m with my family personally, we’re investors.

Syndicated small commercial buildings and apartment buildings and single family, residential homes that we’ve rented out. It is it’s, it literally has provided sometimes the only money. My parents as practicing ministers, right? That’s not a high paying job. They were not in it for the money. So the fact that there were opportunities for us as a family to essentially invest in commercial real estate, which then would generate passive streams of income for my family to allow my dad and my mom to pursue their passion.

To share the gospel across the world, that is key. So [00:16:00] whether your passion is something that doesn’t generate a lot of money. Or what have you and investing in real estate and getting along with building a team that will help you invest in real estate that will hopefully generate passive streams of income for not only for your future, but also for your family’s future is it’s.

I, I think it lights out is way better in my opinion, than investing in the. Stock market or other types of equities that are out there now for the investor. They’re not building any more of it. Land is finite. So it’s, it is a unique commodity that even in the practice of law, we all courts, judge does everybody.

They recognize every piece of land is especially unique. And so I think that is. I talked to the young people that are just getting [00:17:00] started and I wish that I had started even earlier doing this, but investing in commercial real estate is I think he for people’s financial future and to be able to hopefully give them the freedom to do what their heart is designed to do.

And that is to pursue their passion. Yeah,

Mike: that’s awesome. I like what you say about land being unique, so I have a friend and we’ve been friends for many years, but his father used to be the largest condominium developer back in the nineties, when that condominium boom was going on in the Chicago market.

And he said something to me one day, that was very interesting. God’s not making anymore. And what you can buy and hold onto it. And he owned a ton of land, but he built hundreds and hundreds of buildings. Thousands of units. I always looked at that condominium craze as like the gold rush back in the 18 hundreds.

Yeah, I think it was that went on for a [00:18:00] while in a lot of markets. So it just was always interesting, his philosophy around real estate like that, he was just one of those guys that was influential in my life over the years and caused me to go into real estate. At that time I happened to be in the construction business and that was one

Dugan: of those deciding factors that said, Hey, go this way.

So yeah.

Mike: So you’ve your firm. Does you could work in any state, any of the 56.

Dugan: Yeah. So the practices securities is a national practice. So securities law is governed by the securities and exchange commission, which is at the, the top level of government. So all of the states essentially use the same law.

So when we’re syndicating in Georgia, it’s the same as if we’re syndicating in Tennessee or Florida or California or Arizona. Yeah, we have lots of clients that are hunting, buying, and selling real estate all around the country in the hot kind of multi-family [00:19:00] markets. Nice.

Mike: Nice. So I want you to talk about two buckets.

Okay. So we have a brand new investor who probably doesn’t know a lot about syndicating. Probably doesn’t need a securities attorney right now. So how does your firm help? But yet the other bucket is that investor. Who’s got his feet wet. Who’s done some details, maybe done some big deals and is looking to go in that realm now in, in that direction.

And so can you talk about both buckets and how you yes. Can serve both of those?

Dugan: So the first time investors or the people that are just getting started, I love you. I think it is amazing. The passion that I see in people’s eyes when they talk about, Hey, this is our first deal or we’re, we’ve been historically playing with our own money or.

Fix and flipping in the single family, [00:20:00] residential, we’re thinking about giving him the multifamily. It gives me an awesome opportunity to talk to them about the way that banks value these different assets. So when you, when the light starts to come on and you start to say, Hey, the bank values multifamily, above four unit it’s in larger, a much different than the way that they value single family, residential and more.

Lay the underwriting differently, meaning the difference between recourse debt and non-recourse debt as somebody who have lived through 2007 and 2008 with construction companies that I represented developers that I represented people that had signed personal guarantees it, that is a very key thing for people to think about from the standpoint of.

Worst case scenario the economy shuts down or we go [00:21:00] through another major bubble burst in the real estate market. People that have been playing in the multifamily non-recourse space, meaning the bank doesn’t have the ability to go after your personal assets. That is a huge key distinction between those two groups.

So being able to provide that type of education and encouragement to people that are just starting out is one of the things that we do for a living. First time investors or people that haven’t haven’t historically done a lot of deals either in the multifamily space, or they’re just thinking about getting into the multi-family space, but there’s always a transactional side of buying and stuff.

Even if you’re not syndicating. And when we say syndication, all we really mean is that we need to raise the money necessary to achieve the equity that the title company or that the bank is going to [00:22:00] expect us to show up at the closing table with. So for most of us, if you’ve owned your own home, You were playing with your own money.

The bank said, Hey, we’ll give you a loan, but you’re going to have to pay us a down payment of 3% or 5%. We’re on a commercial side or a conventional loan, 20%. So most of us, we used our own money, or we had our, one of our family gave us that money to use for our first activity. In the multifamily syndication space.

It’s no different. The only difference is that the down payment is not just $3,000 or $5,000 or maybe $20,000. It’s potentially millions of dollars or hundreds of thousands of dollars. And most of them. Don’t have that type of money just laying around. It’s not in our safe, it’s not in our bank account.

So how do we figure out how to do that? So for people that are just getting [00:23:00] started and it’s amazing to me, and I don’t want to take it for granted that a lot of people still haven’t heard about syndication or they don’t fully understand it. And all we’re really talking about is essentially being able to raise.

That necessary down payment from passive investors. And you’re going to ask there’s a steward for their resources for that their money to give them returns on that money, but they will provide that capital necessary for you to get that loan. So that’s what we do in large part for a lot of our first time people.

And even if they’re not syndicating, will I often get texted or called or emailed saying, Hey, I just got an LOI excepted on our next house. That we’re going to rehab or we’re going to fix and flip. Can you help us through that closing process? So we’ll do that for people as well for the seasoned investor.

A lot of them already know the basic mechanics of [00:24:00] syndication and everything, and they want to jump forward for essentially getting the offering started very early on, maybe because of the size of the acquisition they’re hunting, even bigger gains. So they’re in the 30 to $50 million range for their acquisition.

So they’re re having to raise large amounts of money in a very compressed timeframe. So remember, most people on a real estate deal, the seller is not going to wait around for months and months until we actually are prepared to close. Most of those purchase and sale agreements or those buy sell agreements are.

I have a very shortened timeframe. So you gotta be able to close on your acquisition inside of 30, 60 days. Sometimes at the, you may have a 90 day, but it’s a very short and compressed timeframe for a lot of our clients, especially when you’re trying to raise, millions and millions of dollars.

So it doesn’t matter whether you’re, [00:25:00] this is your first time and all you’re buying is a house right next door. So rent out to hopefully generate passive streams of income, or you’ve done this a hundred times. And your trying to raise millions of dollars, the steps of the road to ownership are very similar for both sets of those groups.

And so we try to help them navigate that kind of road to ownership from LOI to the closing table.

Mike: That’s interesting because I teach my investors that if you can close two units, Closing 200 is not much more difficult. The is, are all the same and you so that’s why my, my the people I coach we are, I teach them how to get invested in small multifamily, two to four units, and then let’s graduate from there into that mid range, into the larger stuff.

And you’d be surprised that people that can grow in that direction and all of a sudden. They’re raising millions of dollars and they’re syndicating deals. And,[00:26:00] so it’s interesting, you talked about you mentioned something that made me think about OPM other people’s money, yeah. Years and years ago, there was a trainer called his name was Robert Allen and Robert Allen. His big thing was other people’s money, buy real estate, no money down, use other people’s money. But the interesting thing about that and why real estate is so attractive. You’re using other people’s money to build your wealth because you are, they’re renting from you.

They’re living in your unit. They’re paying your mortgage. Whether it’s a single family home, or it’s a 500 unit apartment complex, it’s the same philosophy. And we can grow as investors. And I think one of the things that you do, your firm does, it sounds like, and I do is we teach people and walk with them through those, what could maybe be perceived as a struggle or a trial from time to time and how to make things a little

Dugan: bit.

Yeah. So amen. That’s right. I think

Mike: investing is [00:27:00] something that is it’s gained some speed since the securities

Dugan: laws changed

Mike: a few years back because it’s louder now. I

Dugan: think a lot of things, our water and our society with social media and the

Mike: internet. And I think it’s gained some speed.

I actually have a an ebook out on my website. That’s a passive investing guide that, and the listeners could go download and read it would be helpful and give some direction and guidance around that. But, what are your thoughts just around passive investing versus active investing, to cite, again, here, we got two

Dugan: barrels to specifically different

Mike: things.

What are your thoughts around those?

Dugan: I think either is great. I have done both in the past personally. And so I’m not a, I don’t tell clients that, Hey, you need to be either an active investor or a passive investor. We try to really figure out what will meet the rhythm and pattern of your life.

So if the rhythm and pattern of your life is you have a high W2 paying job that you don’t [00:28:00] intend to quit for any time. Then you might meet the profile of a perfect passive investor. Somebody that you want to see. Your money grow much larger than if it were just sitting in a bank account somewhere, earning virtually nothing.

You’re essentially just helping the bank. You’re just you’re allowing the bank to actually use your money to invest in other assets to grow the banks on money. So when you start to explain to a client’s Hey, listen, you may be a doc. You may be the world’s best expert in your field of expertise.

But I’ve I’ve learned over 20 years that a lot of people don’t understand how money works and how to make it. For them, particularly in the passive invest things space. And so I would, I encourage people. I say, listen, think about this. If you can, or your wife can, or your husband can, then whoever can [00:29:00] become an active real estate professional, you might be able to adjust.

You’re a W2 income from the depreciation benefits that you could enjoy from investing even passively in real estate. And so for doctors or lawyers or engineers or people. Architects people with high, maybe high W2 pain jobs. They’ve never thought about the tax benefits that can come from accelerated appreciation or depreciation benefits to be able to potentially reduce their adjusted gross income.

Those are key things for anybody from a passive investor standpoint. But if you’re a, if you’re somebody that is overly ambitious and you know that you want to quit your job. You’re going to have to, at some point, make that leap from passive investor to active investor. So the leap from passive to active is [00:30:00] sometimes driven by the passion to be able to say, I want to quit my W2 job.

I want to do this. Full-time how can I do that? And that’s something. Syndication and other types of active investing when you’re the lead sponsor or the indicator, or what we say often synonymous with the person that actually found the deal, the found the deal, underwrote the deal, meaning crunching the numbers.

You’re doing the due diligence and you’re going to raise the capital and the debt, get the loan in place. That’s where you’ll see your exponential network grow by leaps and bounds. And so there is a continuum of a, kind of a timeline for people and they move at their own speed through that continuum.

And I’ve had clients that they’ve just, they’re fine with being a passive investor. They’re fine with that. And that’s great for them. And then I have other clients that are very ambitious and they want to get into the [00:31:00] active investing space. So we try to find out what is it really going to meet the rhythm and pattern of your particular law life in order to help you.

Mike: Yeah. I think it’s interesting. And what’s interesting is some of the people that are involved in passive investing, you’d never even think, but there’s that diversification aspect. I remember when I first opened a boutique private equity firm and we started investing in park in a park.

I had a friend go, oh, you’re doing that. He goes, I’ve been in a deal with inland real estate who today they’re one of the largest REITs in the world. For 27 years. And I was like, you’re kidding. I would have never known you liked real estate. So people get involved and you don’t really know.

And it makes it for interesting conversations

Dugan: out. Real estate is one

Mike: of those topics that you can talk about at breakfast at a cocktail party.

Dugan: We’re in line at the grill. That’s right. That’s right. It’s not controversial. It’s not like some other things like they dry [00:32:00] next topic here. Where do you think where

Mike: do you see the one world today as a result of the things that are going on and what we face as far as a pandemic and where

Dugan: do you see us heading?

We last year was was a very good year. For a lot of the, our clients were doing a lot of deals. I think we did over 700 million in transactions last year out of our office. The year, this year, 2020 started off. Great. So we were cooking along. February, we’re starting to hear about this what’s going on.

COVID 19. What is this thing? And then March the official pandemic was declared and what we saw the biggest impact in the commercial real estate market was leveraged shrinking. What I mean by banks, meaning either bridge lenders or the agency, lenders, Freddie Fannie, HUD. They essentially.

Froze or they change their underwriting criteria, meaning they were [00:33:00] way more picky about what projects they were actually going to fund and what loans they were going to give to borrowers. Some of them were requiring 12 months, 18 months, six months of interest reserve, which means that they were requiring you as the borrower to essentially hold in their escrow account, six months of debt service.

18 months, 12 months of debt service payments for a lot of people, especially the younger operators that blows your proforma, your business plan. The thing that you think that you will theoretically be able to sell to potential investors about how you will grow their money and how you’ll be able to make returns for them.

So for April in may, things were just shut down. They were just very clogged, I would say, in the capital markets. And now thankfully prayerfully things are starting to open up a little bit. And we’re seeing more [00:34:00] on the agency side then on the, then in the bridge space, but we’re seeing movement with clients being able to actually start to.

There, there are deals done. So remember in the commercial real estate market, it really is rare when you don’t need debt to make things move. Okay. Debt, meaning loans from the banks. If you can’t get loans from the banks, it’s very difficult. Unless you’re a massive family office. We need a very rich family, which there are a lot of family offices in this country, but or institutional investors or preferred equity partners that ha that are sitting on piles of cash.

That’s not what the vast majority of people that are syndicated are the poor putting deals together. They need that debt. So when you can’t get debt or what we say, leverage. You’re not going to be able to get your deals to the closing table. So [00:35:00] I would say that I am still very bullish on commercial real estate, and I am encouraged very encouraged that in the last month or so we’ve seen leverage the capital market, starting to loosen up a little bit.

So you’re seeing more and more lenders start to realize, okay, this is not. Like 2007, this is not like 2008, right? We’re this people are their money didn’t vanish overnight. So instead of the, instead of Countrywide where you had stated income loans and you had this fictitious kind of of equity or people were way over leveraged.

And so when the bubble burst, it was like w where is arose the emperor with no clothes. That isn’t that this situation, people still have money. We had a roaring economy before COVID hit us. So from my perspective there are still opportunities [00:36:00] for people to find deals. And even if we see a, somewhat of a slowdown, cause you’re seeing some economists and there’s lots of different opinions, it doesn’t matter.

What part of the political spectrum you’re on the economists are saying potentially there might be a little bit of a slowdown and Q1 or Q2, but one of the reasons for certain asset classes, but one of the reasons why most people almost uniformly agree that multi-family is still such a great investment for people that want to buy it.

People don’t have to work somewhere, right? They all have to live somewhere. We all have to live somewhere. We don’t have to go to a place to work. So with companies loosening up their requirements for people to come into the office and maybe they can work from home. I did not, at least from my [00:37:00] clients, thankfully see massive either spikes in economic vacancy, meaning that their tenants, the tenants that people that are renting their apartment buildings were unable to pay their rent or did not pay their rent. The economic vacancy rises when people are still present, physically present at their apartment building, but they’re not able to pay their rent that increases your economic vacancy at the property.

We didn’t see spikes of that. And so thankfully all of the dire predictions that were going to happen as a result of the pandemic. Have not taken shape, at least in the commercial real estate market with respect to multifamily. So I’m I’m still, banks are still doing non-recourse debt. They’re still lending and we’re starting to see more and more lenders come back to the table, which is very encouraging for me.

Mike: Yeah. I think that we might [00:38:00] maybe somewhat have dodged the bullet. We’ll see.

Dugan: So I hope. Let me ask you this. This has been great.

Mike: What new advice or secrets would you give to a new investor right now? What, what strategy or thought process would you put around anything?

Dugan: So I’m a big believer in that procrastination is one of the biggest deal killers.

So people can often become let’s say peril of paralysis by analysis. So if you’re the type of person that you’re underwriting a home, a hundred deals a week, and you’ve never invested in anything, I would be encouraging you get up off your Duff. And in that instance, Take that leap of faith because there’s never going to be a perfect scenario.

There’s never going to be a guarantee for any, for anything. There’s no guarantees, right? We all, to the old proverb, there’s no guarantees except death and taxes. A lot of that is true. [00:39:00] So the, but the reality is you’ll never see the blessings or the opportunities that can potentially come from investing unless you actually do it.

And and I don’t make the mistake that I’m saying rush out there and invest in some sort of quick rich scheme. There are no quick rich schemes, in my opinion, right? Hard work diligence being Stu building your team. Asking lots of questions being a part of masterminds or a mentorship or a coaching program for many people is essential.

Getting that education to learn exactly about how money works, how banks value certain things, how the mechanics are, what are the steps to getting your first deal under contract and getting through all of those things. That’s essential. So if you’re just starting out and you don’t have the education, I would [00:40:00] say, reach out to people like Mike that are actually have the wealth of knowledge to be able to get inside and be mentored by people that have done it that have decades of experience.

That’s that is key for your long-term financial future. And once you have that education implemented, otherwise, what are you doing? What’s the point of this whole thing. If you’re not actually going to take that step of faith, just take that step of faith. You will never be able to be blessed.

That’s the reality. So yes, it, your deal may have fail that’s a possibility in any potential deal, but I’ve learned more about the times that I’ve failed in my life. Then the times that I’ve been riding high. So you’re going to learn more from times where you struggle or where you’re going through times of suffering, or you’re trying to figure out exactly what it is and why it’s happening to you.[00:41:00]

Those are the times where your knowledge base is going to grow exponentially. In my opinion for. Not only yourself, but also for your family and for your investors and for other people that are in your life that you’re called to steward. So I think that’s key. Don’t procrastinate. Educate yourself.

Those two key components are essential. I think you said

Mike: three really good things in there. First you went right back to hard work, which was your word you opened up with today? Education. I’m such a proponent of education. Thanks for the plug. I think people should call me, get some coaching and then let us help you execute right.

And. And those are the important things Dougan I want to thank you so much. This has been great today. How do my listeners get in touch with you? If they want to talk to you about real estate, whether they’re buying their first deal or whether they’re syndicating something what’s the best.

Dugan: Sure we make it very easy for you to get in touch with [00:42:00] us.

We offer a free consultation because we want to make sure that we can actually deliver added value for you, for your families, for your project. If we. We’re gonna, we’re going to refer you to somebody else that can actually help you. So we want to help you. You can reach us through we our telephone number is (972) 253-4440.

You can Google my name. Thankfully, I’ve got a very unique name. There’s not too many other duke bins out there or practicing law and Texas we’re in Santa Barbara. So you should be able to find. We’re at Kelly Clark dot com. Or you can email me at Dougan. That’s my first name, the UGA n@kellyclark.com.

Mike: Nice. Thank you. I want to thank everybody for listening in today. I hope that this show has been helpful and giving you some knowledge and spurred you on a little bit. So remember, we’re here every Tuesday. If you are looking for some [00:43:00] help for some guidance, two things. Remember. Mentioned the passive investing guide on my website.

Go download that for yourself. Read through there, see if that’s something that may interest you and, reach out to duke and he can maybe help you around that. And I look forward to anybody who has any coaching needs or needs some help and give us a call we’ll spend some time with you and see if we can’t get you some guidance and direction.

Want to say goodbye.

Dugan: Thanks everybody be well.

Mike: Thanks for being here today. Good luck everybody.

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.[00:44:00]