Insider Secrets Podcast Season 2, Episode 19
Guest: Duane Winkel
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Duane’s background is in live event production, where he leads the technical production of concerts for the likes of Dave Matthews Band, U2, and the Goo Goo Dolls. While the life of rock concerts and tours was fun, Duane quickly found that he missed being around for holidays, birthdays, and anniversaries. So he started looking for a career that enabled him to double both his income and his time at home. That’s when he transitioned to software development and IT. After leading a team of over 40 developers managing a billion-dollar eCommerce platform on behalf of a Fortune 500 company, he quit his full-time job to start his own technology company – BAMF Technology – and partner with Ashley. He is passionate about systems, and processes, and using data to inform strategies.
Investors can discern sincerity, and authenticity is a key factor for long-term partnerships.
When rates rise, it can be a good time to buy, and when they fall, it’s favorable for selling as property values increase.
Renovating properties with high vacancy rates, despite potential bank reluctance, offers a chance to improve and raise market rents.
I love the journey more than I love the actual outcome of it. it’s just that relentless passion.
The relentless pursuit should be fueled by passion, not just for the outcomes but for the entire process, ensuring sustained motivation and satisfaction.
“Real estate is a long-term and stable game. Authenticity is key when dealing with passive investors.” – Duane
“Discipline equals freedom. Prioritize and execute. These principles from ‘The Dichotomy of Leadership’ guide our business objectives.” – Duane
“Asset management is crucial. Pay attention to details, understand the numbers, and replicate successful strategies.” – Mike
“There are always opportunities in real estate. Focus relentlessly on excellence and maintain a customer-first approach.” – Duane
“Unlike traditional investments, where market factors largely dictate value, investors can actively impact property value by increasing income and managing expenses effectively. ” – Duane
[01:40] Intro to episode guest
[02:56] One word that describes Duane personally and professionally.
[05:50] Talk about your background a little bit and how’d you get into this?
[11:26] Duane talks about the business side of multifamily.
[15:02] So what does it cost per unit to put a water conservation package in typically?
[17:10] I know you are working on a deal right now, why don’t we talk about that a little bit?
[21:35] What do you say to the new investor and how do you get them in your wheelhouse?
Kristen: [00:00:00] Welcome to this edition of Insider Secrets, the weekly podcast that turns real estate investing goals into reality. Each show we interview guests who are seasoned real estate professionals, actively closing and managing real estate deals. Mike is the founder of My Core Intentions and would like to help you make your real estate investing dreams a reality.
Mike coaches you to buy investment real estate, creating short term cash flow and long term wealth. Your host and real estate coach, Mike Morawski, has more than 30 years of real estate investing and property management experience. Here’s your host, Mike.
Mike Morawski: Hey, what’s up everybody? Good morning. I hope you are enjoying your weekend and doing well. I’m Mike and glad that you’re here. Hey, if you are a new listener, I’m super glad that you’re here and I hope somebody told you to be here because we always are bringing out new guests, new content, [00:01:00] more information to help you and your multifamily journey and business.
My guest today, you’re going to want to buckle up for because he is gonna talk to us about doing some big multifamily stuff. Before we get started though, as I said, if you’re new to the show and you’re watching us on YouTube, please subscribe to the channel. You’ll always see new content, new information, clips every day, those little tips and topics, those golden nuggets, they’re going to help you scale your business to the next level.
If you’re just on social media, like us, love us, and help us to continue to grow. And, if you think somebody is going to need to hear this message this morning, go stick a cup of coffee in their hand right now and wake them up.
My guest this morning is Duane Winkel. Duane is from Scottsdale, Arizona. He’s with Winkel Capital. And I had the opportunity to speak at Duane and his wife Ashley’s event in Scottsdale a few months ago earlier this year. And I’ll tell you what, what a great group of people [00:02:00] and what a lot of knowledge.
Let’s bring Duane in real quick. Hey, good morning, buddy.
Duane Winkel: Good morning. How are you?
Mike Morawski: I’m great. How are you?
Duane Winkel: Good. I love the cup of coffee. I’ll definitely have one.
Mike Morawski: Coffee. I love your cup. I love the black cup.
Duane Winkel: Thanks.
Mike Morawski: Hey, I am stoked, man. I got a couple deals closed over the last week or so. We got about another hundred oh, 35 units in Tulsa closed. So, we chipping away at that market a little bit. That puts us over 200 in that market. We have another 150 to get closed here by the end of the month. And I know you’re working, you’re working on some big stuff too. So we’ll get into that.
I just want people to know, hey, if you’ve got comments, if you have questions, need anything, throw that in the comments this morning and we’ll get those answered for you. Hey, before we get going, one question I always ask my guests Duane is in one word, what best describes you personally and professionally?
Duane Winkel: It’s a great question. One word that describes me [00:03:00] personally and professionally, I would say is probably relentless. I just like to go after something like a dog on a bone, like just always focused and really making sure that we have our investors in mind, but like just making sure that we’re doing everything we can. Right now, like it’s a really tough economy, things are a little different than they used to be, and you really have to be focused and driven and all of that’s really summed up in that word, relentless.
Mike Morawski: I love that. I’m a word guy, word nerd. And, I asked that question cause I’m going to write a book one of these days called the one word, and it’s just going to be from a handful of my guests that we’ve talked about that. What do you think has made you relentless?
Duane Winkel: I think it’s just seeing all of the situations around me and seeing where people have dropped the ball in missed certain things. And if it was just that next little bit, if they would have kept going further and farther and been focused on those kind of things, that things would have come to fruition.
So I’ve observed that from other areas. I’ve had some [00:04:00] hardships like anybody else. And just knowing that kind of that perseverance piece driving forward is part of it. So I’ve really embodied the relentless nature, like always one more deal, one more underwriting, one more investor you need to talk to.
There’s always one more event to go to. There’s always more that you can be doing. And I love it. I love the journey more than I love the actual outcome of it. So it’s just that relentless passion.
Mike Morawski: Yeah, that’s interesting. I like what you said there. I love getting the deal done. For me, it’s not even about the money. It’s about getting the deal done. There’s a success in the deal. And part of that is not just me, but it’s everybody else that’s involved too, because you’ve got team members, you’ve got lenders, you’ve got private equity people, and there’s a lot of people that they’re riding on your shoulders. They’re riding on your coattails saying, get this done. You’re that lead sled dog.
Duane Winkel: That’s right.
Mike Morawski: I love what you said, man, I’m a dog with a bone in its mouth and I’m not [00:05:00] letting go.
Duane Winkel: Kind of like that chip on your shoulder. Just something to prove in the world. And you’re like, all right, that’s my thing. My gift is to be out there and really directing traffic for everybody on the team. And it’s important to have a team, like you said, but it’s just making sure that you’re on top of everything and you know what’s going on and that passion to really get it done for.
And then repeat the process, right? Once you get one done, you’re like, all right, like you mentioned, just closed one last month. Now you’ve got another one this month. You need to be able to enjoy that process or it’s going to feel like a real pain, like a grind. You don’t want to follow through.
Mike Morawski: Here’s one thing I know, and I know after we’re done with this show today that I’m not gonna be the only one with this thought. One of these days I wanna do a deal with you and I think we should do something together.
And I think that after we get through here this morning, there’s gonna be some other people that are going to say the same thing and wind up reaching out to you.
Duane Winkel: I love that. Yeah.
Mike Morawski: Talk about your background a little bit and how you got, sometimes I think this is a crazy business we’re in. So if I told you any stories about the seller I’ve just dealt [00:06:00] with for the last five months, six months. It’d be a crazy business and not for the fainted heart. That’s for sure. But how’d you get going in this?
Duane Winkel: Yeah, I started like many do in the single family space. I moved into my first flip property with my wife. I don’t recommend anybody do that. That’s a very challenging ordeal.
So we moved into the flips and then as we started to go through those and it was moving every 6 months. You would constantly have to move, but that was just where we could start. Then we moved into an apartment complex. We lived in an apartment. And as we’re living in the apartment, we’re flipping houses on the side.
And I was really looking to scale. So I contacted one of my friends who’s in the construction business. Like how many deals would I need to do? And how could I keep your team busy enough? And he was like, we need to do this many houses. That led me to figure out how much money we’re going to need to buy those houses.
And then it led me to capital raising and understanding kind of the scale of real estate. If anybody puts in real estate scale, money [00:07:00] raising. Apartment complexes come up, right? So I started learning and growing in that space. I have a few mentors around the apartment business and being in those communities in mentorship with these other really successful multifamily operators led me to partner up on things.
And now that’s led us to a good portfolio of multifamily properties. So really understanding that it was a business. I really loved the opportunity that multifamily gave. Because it’s a business, like the valuation of businesses just totally makes sense. I have had a W2 before, my W2 was in corporate technology.
So I ran IT department. I was a part of an IT department and ran their website and their marketing efforts and things like that, and really understood how that process worked and how we have to treat our customers or our residents like a customer. So understanding that like the business aspect of multifamily was just a game changer.
I was like, Oh yeah, this is how [00:08:00] we value this business. I was like, this is amazing. But the single family, it’s just based on the appraisal of somebody that sold a house down the street. And that was really hard for me to understand and do that at scale. And that’s where we found multifamily. And I’ve loved it. I can’t tell enough people about it.
Mike Morawski: You had mentioned something before we started this morning about people getting into the residential business thinking that, Oh, this is going to be great. It’s going to be easy. And then you went out to talk about you and Ashley and your first flip.
I remember my first experience, I had sold my construction business and we bought a two flat and we’re house hacking and this is long before it was sexy. And so I remember my wife at the time just screaming at me about the nails on the floor. And people think it’s going to be easy.
Duane Winkel: They do. Yeah. That’s just the HGTV speaking in people. They’re like, Oh, I saw it done in seven days or six hours. So they flipped this house. Anybody can do it. And they made so much [00:09:00] money, but they don’t see everybody coming in and the inspectors and the permits that you need to pull and all this other stuff.
Like HGTV is not showing the unsexy part on purpose. They just cut to look how beautiful the house is. And that’s really what sold us as well, but I’ll never forget the first house we did, similar story. We decided to save a buck. So I talked to the contractor. I said, if you lay the tile, could I just grout it?
And he was like, sure, all day. Like you just laughed about it too. We had no idea. We’re young kids, right? So I was like, all right, Ashley, you go ahead. You start grouting. She had the buckets. I had four buckets, so I would dump buckets, pour, fill them with water, bring them back in. We grouted 2, 000 square feet, and I’ll never grout another tile in my life.
It’s so hard. I didn’t know that you could invest in apartments. I really didn’t. Like if I could have given somebody the same amount of money we put on a down payment in the construction loan, we’d be ahead at this point. With all the costs and expenses and just [00:10:00] mental brainpower we spent on learning about cast iron plumbing pipes in Arizona. So you really don’t need to know as an investor.
Mike Morawski: I’m laughing so hard. You got me crying. Cause I’m picturing you guys grouting 2000 square feet of tile. And I’m thinking, man, that would have been some good stuff to video, and use on social media today, of why not to do something.
Duane Winkel: You have to learn the hard way. And there’s no real shortcut to that either. The contractor’s like, sure, you can buy a spray, a painter off home Depot. And we bought a sprayer. We’re like, we’ll just figure out how to spray paint the walls and the rooms and stuff. And it’s a challenge. It’s a lot of work.
And it’s not that you don’t want, like that I’m opposed to the hard work, but it’s the construction background where I was trying to do something where I’m not skilled at that. That’s not my responsibility. I’ve just really pivoted towards being an investor now. So understanding and with the scale of larger apartment buildings, you can hire those people.
That’s part of your business plan is I’m actually going to hire a construction person to make sure [00:11:00] that these unit renovations go according to plan where you’re trying to work on smaller margins if you’re doing just one house at a time.
Mike Morawski: You’ve said probably three times here this morning, the word business. And I want to talk about that. Cause I don’t think that’s something that I really talk about with people on my podcast about why multifamily is a business and why is it such a good business to be in too? So talk about the business side of it.
Duane Winkel: Yeah, it really starts with the evaluation of the property and how much it’s worth when you take over an apartment building. We treat it like a business. It’s got a name. It’s got an LLC. There’s legal documents that are required for you to sign. And then what we look at next is how much is the business making, usually in the form of rents. And then what are your expenses? You’ve got your utilities and you’ve got the pool costs and you have landscaping, you have taxes.
Those kind of things, payroll, right? Those are business expenses for any other business. So you look at your income, you [00:12:00] subtract your expenses, and then you have your net operating income. That’s how much money you have to pay the bank, your loan back, and then you pay your investors after that. There are a lot more nuance to it. But at a high level, you really look at those factors. It falls into anything on your profit and loss statement, falls into one of two, maybe three categories. Is it profit? Isn’t it expense or is it something you’re paying afterwards? So that way, when you look at a business and we both look at a property, let’s say in Oklahoma, we can agree.
This is how much that property is going to cost. Because we know how much that property makes as a business. This is how much it is. And then there’s a thing called the cap rate, which I equate to a business multiplier. If you were to sell any other business, you use like a business multiplier to see how much money your business is worth.
In the real estate industry, we call it a cap rate, and that’s based on some of the properties that have sold in the area and what the market’s doing at the moment. We can take that, we run that through our calculator, and then [00:13:00] we can both agree on a price for a property where it’s not as speculative in terms of like single family.
So it’s based on those comps. And you look at a single family, you say this one has a three bedrooms and two bathrooms, countertop, all of these kinds of appliances, that kind of thing. And then you try and find other houses next to it that are similar priced. And what they have sold for recently, this is more based on the business.
So if multifamily, if you make more money, if your property is making more money, your whole business is valued more. That’s what I love about it is like you can drive the value up. You can force the appreciation in an apartment complex.
Mike Morawski: It really is a forced depreciation business, which is really cool about it because then that responsibility kind of lies on you.
Hey, what can I do? Can I charge for parking? Can I charge for a pool pass. What can I do to increase that NOI and that revenue?
Duane Winkel: And I don’t know many other businesses where you can force the appreciation, like you do in a business setting. [00:14:00] So like it is a business, but other investment vehicles, it’s a lot harder to do that.
And that’s what’s so awesome here. If you buy Coca Cola stock, the best thing you can do is drink more Coca Cola.
Mike Morawski: It’s probably not good for you, but.
Duane Winkel: It’s true.
Mike Morawski: I was sitting here thinking, I was like, man, if I go buy a seven 11, I’m tied to cost of goods based by my vendor. So if somebody brings ramen noodles and I can only charge so much for ramen noodles. Where if I have a multi family property and it’s market rate rent, I can raise my rent. I can cut my expenses. I can go back and negotiate with a vendor and get a lower price. So that’s why it’s a different business too, I think.
Duane Winkel: I’d love it. Yeah. Like you mentioned, you can control your expenses a lot more. One of the things that we look at when we go into an apartment complex, I live in Arizona and we always are very conscious about our water. So we’ll put a water conservation package in. So it’s a low flow toilets, low flow shower heads, and you can save [00:15:00] like 30 percent on your water expenses.
Mike Morawski: So what does it cost per unit to put a water conservation package in typically?
Duane Winkel: When we do those water conservation packages, it’s usually, I would say probably like 150 to 200 bucks a unit. Because it’s a new physical toilet, so they will switch those out to low flow toilets.
And then we also switch out like the shower heads and stuff. And then we can go around and put LED lights in as well. So we would do lower electricity bill as well. We’d be able to control those costs where you aren’t in other areas or put zero scaping in. We have a lot of rocks. We don’t need a lot of grass here in Arizona.
So we put rocks and cactuses and other low water usage plants. So then you can lower your contract services line item and you don’t need as much landscaping. Somebody comes over and checks or blows off the leaves, but it’s not like a full yard to be able to mow and things like that.
Mike Morawski: Interesting. So if you spend [00:16:00] $150 a unit on a water conservation package, how long do you know offhand how long it takes you to recoup that?
Duane Winkel: I don’t know offhand, but I do believe we do make it up within the hold. I don’t know how soon we’re able to make that up though.
Mike Morawski: I always like to look at that number, what’s my return on rental. And if it’s single digits, it’s probably almost not worth doing, but if I’m getting mid teens return on rental or higher, makes sense. And then how I always try to get my rental done and call it 30 months, 22 months, because that changes the return too.
Duane Winkel: The sooner, the better if you can. So a lot of people shy away from the properties that have more vacancy. I know usually it’s because the bank doesn’t like it, but it also gives you an opportunity to go in and start renovating those units and making sure that you’re improving the property and getting market rents for your property.
Mike Morawski: Yeah. We just bought a deal in Tulsa that was 40 percent [00:17:00] vacant. 20, 26 down units on a 65 unit deal. And we had to go in and do rehabs to put those back online. Anyhow, hey, I know you’re working on a deal right now. Why don’t we talk about once you talk about that a little bit?
Duane Winkel: Yeah, we’re always raising for something. We’re always working on multifamily opportunities, whether it’s here. We focus on Arizona, Texas, and in Tennessee, or where we have properties at the moment. Right now we’ve got a couple of things under contract in Dallas that we’re working on that we’re really excited about. There’s always something going on for sure.
Mike Morawski: Value add or?
Duane Winkel: Yeah, so it’s a value add property. It’s in like the heart of Dallas, really close to the airport, which is great. So workforce housing, something that we really focus on. Everybody needs a place to live, just a good, affordable place to live. So we’re going in doing the pretty standard package.
Duane Winkel: We’re going to go in and renovate some of the units. Look at the amenities if there’s any spaces there where we can improve those. Right now, what we’ve seen a huge increase in and an ability kind of uniqueness is to put a internet packaging. So you get internet and cable all as one bundle. So as an example, we can do it for [00:19:00] cheaper than what you can get it at market because we’re doing a bulk discount.
So if we do two or 300 units at a time, we’re able to get a cheaper rate from Comcast or whatever. And then we only charge a little bit more than what we get at a discount for the residents. So we have a little wiggle room there. We’re able to make some extra money on that, which a lot of people don’t think about.
Mike Morawski: It’s interesting that you can become a reseller of those cable packages. So you can sell data, and in some cases, I know the providers will even let you resell a cellular service. And so you definitely, again, you’re thinking outside the box and adding to the bottom line.
Duane Winkel: Here it gives the residents something nice that they’re looking for. I think that’s always what we try and do is just ask the residents, what would you like? And they’re like, Oh, I’d love a dog park. And you’re like, we can totally get, nobody’s using the tennis court. Let’s turn it into a pickleball court or a dog area.
Because that’s what the residents want. So you’re really thinking of like [00:20:00] customer first business model where you can offer what they’re looking for. And they’ll even give you the good advice. And then they’re happy with that you put it in. So you’re really listening to everybody on your team.
Mike Morawski: You play pickleball?
Duane Winkel: I don’t. I’ve only played once. I just learned like last week, but I’ve seen it’s all the rage these days.
Mike Morawski: I know. So it’s funny. Two weeks ago, I played for the first time and I had been kind of resistant to it. Like pickleball. Okay, but I played the first time a couple of weeks ago and I was like, holy cow. I loved it.
Duane Winkel: I had a good time.
Mike Morawski: You know what I really want to dig into is I want to talk about raising capital for a little bit of time we have left here. We’re in a really strange economy. You’ve got a lot of naysayers out there, negative Nancy’s that are just putting bad vibes into the world around us. And I don’t listen to the news, but you pick some of this stuff up off of social media and I read a little bit in the wall street journal and first of all. If you subscribe to Warren [00:21:00] Buffett, he says, when everybody’s running, you should run towards whatever, the blood and the water or whatever.
And I firmly agree to that, when everybody’s not buying, you should be buying. And, there’s a lot of people right now that two schools of thought. Either they’re scared to death or they’re thinking a better deal is coming tomorrow. And I don’t know that much of a better deal is coming tomorrow. And if we talk to the passive investor right now, the one who says, Hey, I want to be in real estate. I know there’s good upside, but is this really the time to get in? What do you say to that investor and how do you get them in your wheelhouse?
Duane Winkel: Usually when we’re having those conversations with investors, there’s a reason that they’re already reaching out and they understand some of the benefits of real estate. So we can start from an agreed mutual understanding that real estate’s good and we’re not educating people and like trying to convince them to move all their money from the stock market over into real [00:22:00] estate.
However, lately that’s not been a problem either. They’re not making a lot of money there. So that’s where people are somewhat grasping and they’re trying to find the new shiny, cool thing. And what we do is we really talk to them about the trajectory of real estate. My question to somebody is when we buy this apartment complex, Do you think it’s going to be worth more or less money with inflation in the next five years?
Oh, it’s going to be worth more money. Okay, that’s great. And then what we just talked about, we’re going to control the investment. That’s something that we can do, and you can’t do that in the stock market. And we’re going to ensure that it has the best opportunity for success. And these are the metrics, and this is how we do it. And we educate about our unique way of going about it. But that’s how we approach the conversation to begin with.
Mike Morawski: So what do you say to the investor today who says, Oh, interest rates are too high. It doesn’t make sense to be in real estate today?
Duane Winkel: I ask if they were around in the 1980s [00:23:00] or 1990s when interest rates were 18%? We have a chart that I usually show people. Right now, interest rates are higher than they were last year fact, but they’re lower than they have been historically. So there’s always an opportunity. So similar to what you were talking about when there’s blood in the streets, there’s always an opportunity out there.
And that’s our job as the sponsorship team is to go and find the best opportunities for everybody. Also when you’re talking about interest rates. It’s really interesting to see if the interest rates are going up, that’s a good time to buy. When the interest rates are going down, then it’s a good time to sell because your property is worth more.
So we talk a lot about cap rate and that business multiplier we were referencing earlier. When the cap rate goes down, your property is worth more money. So that’s a good thing. So when interest rates and everything do change, it’s going to be worth more. And I educate them on that. So like right now it’s a little harder to make sure things pencil.
You might not be getting as good of a [00:24:00] cashflow at the moment. But really the cashflow is the thing that’s the change for everybody. So cashflow is less right now, but you can have an upside when you sell later on. So a lot of people are looking for the appreciation or the tax benefits and less about the immediate cashflow right now.
Mike Morawski: Tax benefits are good, especially right now the bonus depreciation. And, I think as we get closer to the end of the year here, some people are going to be looking for some write offs because maybe they made a little bit of money this year. And they need, something to offset that for themselves.
Duane Winkel: Exactly. This is the best time of year to talk to people about that. Like you mentioned, some people are sitting on the sidelines waiting for another deal. But if you look at a full year cycle right now, if you don’t have anything under contract at the moment, it usually takes 30 to 60 days to close something.
If you don’t close something by the end of the year, you’re going to miss out on some of the tax depreciation that you can get for the year 2023. So that’s where I’ve seen more people [00:25:00] come out of the woodwork and they’re like, all right, we’ve been waiting all year or I’ve placed some of my money.
I want to diversify in other real estate assets. So I had somebody probably two weeks ago reach out and be like, dude, I’m really looking to get into a deal. Do you have anything? And I was like, we’re working on a few things. We’re trying to make it happen. And luckily one of the opportunities came to fruition here.
Mike Morawski: So how do you attract the passive investor today to your business, to your opportunities? You have lead magnets, what are you doing to get people in your world?
Duane Winkel: Great question. Number one, I have a meetup. I have awesome guests like Mike Morawski that come out and speak at our meetup and educate people on the power of real estate. Some people know real estate, but they don’t understand like how to get into it.
So that’s our job is to really educate about the passive opportunities there are. So I do a monthly meetup related to that. I love getting on podcasts like this one. Another one. Thank you, Mike. And other people that have been on their podcasts also have a lead magnet.
And our lead magnet is how to not buy a [00:26:00] second job. Anytime you invest in real estate, if you’re not passively investing, then you’re actually getting yourself into a second job. You’re like, Oh, it’s just an Airbnb. I’ll figure it out. No big deal until you have guests. I know somebody here in Scottsdale that had terrible tenants.
The police were called because they were so loud at this Airbnb. They don’t call the tenants. They don’t have their phone number. They call the landlord. So you’re dealing with the police at 2 a. m. Like that sounds like a headache, right? So I have a lead magnet that kind of goes through some of those pain points and those struggles that people think are good ideas and talks about the power of passively investing in real estate.
So those are a couple of different ways. And then recurring emails. That’s another thing that I would recommend is really just being in front of somebody, sharing your journey. Oh, bought another deal in Oklahoma, bought another deal in Oklahoma, bought another deal in Oklahoma. And they’re like, I should really get in on that. You’re just sharing that journey as we’re going.
Mike Morawski: Yeah. When you send those emails out, are you putting like case studies in them? And[00:27:00] newsletter type format.
Duane Winkel: Yeah, we do a newsletter once a month and then meetup information for those that are local here and then any deal information every once in a while, it’s like market updates as we have them.
Right now, there’s no new market update except interest rates are rising. Interest rates are rising. Interest rates are rising. Everybody’s like, we get it. And it’s since that’s the case, what are we doing different now as a business to offset that the best that we can.
Mike Morawski: Yeah. You mentioned this shiny object syndrome. And one thing I like about real estate right now, or the multi family space from where you and I sit as a lead sponsor is two years ago, there were a lot of people in the business. And they were in the business cause the wind was at their back and they were able to really get some things done.
They looked like champions. And then the water started to go out, the tide went out. And now all of a sudden, some of those people that were champions or thought they were champions, there’s some challenges with what they’re doing. And some of them [00:28:00] that couldn’t really get going in the multifamily space are off doing other things. They’re doing self storage or they did a carwash or.
Duane Winkel: Oil and gas.
Mike Morawski: Oil and gas, or they went and bought a new race car or whatever. Which I like as a sponsor, because it’s opened up a lot of room. And a lot of runway for us to have more opportunity, and be able to do more deals.
Duane Winkel: I agree with that. I think it’s kind of a thinning of the herd, if you would. Like then only the really savvy investors are in this space. And then when you’re talking to brokers and things like that, they’re like, Oh, you’re still around. Oh yeah, we’re still buying. We’re ready to go. And then you can have a more, I feel like a more intelligent conversation because you’re like, this is why we’re seeing what we’re seeing.
And you can really have that debate or that conversation with a broker and your investors. They’re not just flooded with a ton of deals. People offering top dollar for no reason. They’re like, we just got to get it. I’ve got to [00:29:00] overpay. Right now, it’s like, well, this is what the bank’s willing to lend on.
This is how the fundamentals of the project are going. That’s another thing that I love about multifamily. The bank has to double check your work. You don’t always get the loan. Like I was surprised you said you got the loan for you had like 40 percent occupied. I bet the bank was a little more scrutinized that one a little different than if it was 90 or 80 percent occupied.
Mike Morawski: Yeah. We did a creative structure on it. I actually bought that one on a master lease, which is a whole another podcast we can do on that. Just a case study on that deal.
Duane Winkel: But that’s the thing that’s really powerful is like there’s now with less people in the space, the people that are still in the space are taken more seriously. And because we’re still getting things done.
Mike Morawski: Right. A hundred percent. I was on the phone with an investor yesterday, a passive investor. And he was like, I’m making some money in the options market right now. He goes, I don’t really know if I should be in real estate.
Go ahead, tell me a little bit about this deal. So you could kind of tell he was still a little [00:30:00] lukewarm. And so I started telling him about the deal and, we got about halfway through and he said, I talked to some sponsors out there and they just don’t know their shit.
And he said, it’s a pleasure to talk to you cause you’re smart. And I think that there’s a lot to be said for that. Cause there’s a lot of people out there that they’re hit and run. And I think if you are smart and you know what you’re doing, and that goes a long way when you’re on the phone talking to that passive investor.
Duane Winkel: And I think they can tell if you’re trying to fool somebody into investing with you, they’re probably not going to be a good investor long term either. Like they’re used to options or whatever it is, get in, get out, kind of change their mind, do what they need to do. But this is a longer term kind of stable, steady game.
And that people need to really understand that aspect. And I feel like people can tell if you’re just selling real estate or if you’re like, I invest in this. This is why I love this space. This is what we’re [00:31:00] doing as a family. This is how I’m growing our net worth as well. And they’re like, Oh, tell me a little bit about that.
They’re open to a conversation. And then if you can break those concepts down and you’re not just trying to throw a word salad at them that they don’t understand and you just scare them. No, this is like we did earlier, this is the income, this is the expenses. As your expenses, you can have 200 things in your expenses. And we can talk about that and have a hearty debate about how much payroll is going to be, but they don’t need to know that they need to know that you’re taking care of that. And you can really break it down so they can understand it. You’re not trying to be smarter than them either.
Mike Morawski: Yeah. I think that’s where it goes back to the asset management. Are you really watching the numbers? I came to your meetup, I told my story and I said, one of the things I didn’t do was pay attention to the details. And you have to pay attention to those details. You’ve got to know the numbers and why it’s not working or why it is working. Cause if you know why it’s working. Then you can figure out a way to do more of [00:32:00] that.
Duane Winkel: That’s exactly right. Yeah.
Mike Morawski: Hey, I appreciate you. Appreciate you being here this morning.
Duane Winkel: Thanks for having me. Yeah.
Mike Morawski: Yeah. This is fun. We should do this again. You want to book me for Scottsdale again next year? We could talk about that too.
Duane Winkel: Yeah, I’ll make sure it’s not when it’s hot outside.
Mike Morawski: Okay.
Duane Winkel: I think you came like in August. It was a little warm.
Mike Morawski: Yeah, but you guys said, it’s hot. Nobody’s going out. We’ll probably only have 20 people here. And we had like 70 people. You were like, man.
Duane Winkel: It helps when we have good guests though, for sure. Yeah, exactly.
Mike Morawski: So that was cool. So what do you want people to know about you right now?
Duane Winkel: People should know that there are always opportunities out there. I think just to keep going, keep focused and be relentless. That’s our brand. We have opportunities to invest. We have opportunities in the multifamily space continuously. That’s our goal is to continue to provide those opportunities and operate as well as we can operate with excellence is our goal and our motto.
So that’s what we continue to focus on. And we love everything about the real estate space. We know that there’s a need [00:33:00] for housing and we’re providing that and we’re a really customer first type of brand.
Mike Morawski: I love that be real. I’m actually going to tweet that as soon as we get off.
Duane Winkel: Go for it.
Mike Morawski: Hey, good to see you. Couple just fun questions. Best book you ever read?
Duane Winkel: Best book I ever read is the Dichotomy of Leadership, Jocko Wilnick.
Mike Morawski: Okay. I’m reading his Extreme Ownership right now.
Duane Winkel: Dichotomy of leadership is a follow up to extreme ownership. I always get it wrong. One of my favorite phrases ever is, discipline equals freedom. And then the second is prioritize and execute. And that’s what we do when we focus on our business objectives. We just put them in a list and knock our list out.
Mike Morawski: I’m going to add that one to the list. Thank you.
Duane Winkel: Yeah. Dichotomy of leadership is awesome. And the audible book is really cool. It’s narrated by Jocko and Leif, and they have some like military sounds in the background a couple of times when they’re describing some of the situations they get themselves into, like the firefights and stuff, you can hear a little, they go above and beyond for the audio book. [00:34:00] It’s really nice.
Mike Morawski: That’s cool. How about best restaurant in Scottsdale?
Duane Winkel: Ooh, I’m going to take a pass on that because somebody’s going to be mad at me. If I say the wrong one, I do love a good steak. The place we went to. Yeah. I love citizen public house is what best salad out there. And then ocean 44 is one of the best steak places in town.
Mike Morawski: Ocean 44. I like that. Yes, that’s for sure. Hey, appreciate you being here. Tell Ashley, I said, hi.
Duane Winkel: Will do.
Mike Morawski: I’m going to move you out to the back room real quick and say goodbye if you ride with me here for a minute.
Duane Winkel: Of course.
Mike Morawski: How do people get ahold of you?
Duane Winkel: If people want to get ahold of me, they can go to winkelcapital.com. And if they’d like to look at that downloadable that we talked about, they can go to winkelcapital.com/howtoguide.
Mike Morawski: Reach out to Duane and talk to him about his newest deal he’s working on and, Dallas and some of the other stuff he’s got going on. Hey, good seeing you today. Thanks for being here.
Duane Winkel: Thanks for having me.
Mike Morawski: All right, everybody. Hey, thanks so much for joining the podcast this [00:35:00] morning. I appreciate it. I hope that today’s conversation just gave you something to think about. We talked about business. We talked about private equity. We talked about finding deals in this crazy market.
So I’d love to keep the conversation going with you. So please reach out, email me. I love the network and just see how maybe I can add value to your network and help your business grow. Give you a couple of those little golden nuggets. I always appreciate your support. I’d love if you would follow me on social media.
Like, subscribe, all that crazy stuff. Just help our following grow. Tell somebody about this show. Hey, remember we’re always bringing you some new insights and a new guest. Have a great weekend, everybody. And, as Duane said, be relentless.
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. Wherever you hang out on social media, you will find Mike [00:36:00] and MyCoreIntentions. Please like and follow us to get the most up to date real estate investing trends.
Visit mycoreintentions.Com where you can get expert coaching on all things real estate investing and property management. If you’re looking to become an expert, Mike’s coaching will help you scale your real estate investment business. We’re looking forward to having you back again next week for more Insider Secrets.