Full Show Notes
[00:01:36] Nick’s email is Nick@QuantumCapitalInc.com
[00:02:06] Join our free Facebook Community to learn from other real estate investors at www.EastWestVentures.co/AIMS
[00:02:48] Schedule a call with me at www.CallwithVee.com
[00:06:44] Nick bought Volkswagen stocks and quickly realized he didn’t have control in it.
[00:07:01] House hacking is when you live in one of the multiple units of your investment property as your primary residence, and have renters from the other units pay your mortgage and expenses.
[00:09:21] Jack and Gino’s Wheelbarrow Profits Podcast
Jack and Gino’s new book “The Honey Bee: A Business Parable About Getting Un-stuck and Taking Control of Your Financial Future” – https://amzn.to/2KJRzam
[00:17:37] Nick shares his tips on what to look for in value add deals.
[00:19:22] Joe Fairless’ book “Best Ever Apartment Syndication Book” – https://amzn.to/2XA0znL
[00:26:36:] Networking is key for Nick’s success.
[00:28:59] Napoleon Hill’s quote “Whatever the mind can conceive and believe, it can achieve.”
[00:29:34] Hal Elrod’s “The Miracle Morning: The Not-So-Obvious Secret Guaranteed to Transform Your Life (Before 8AM)” – https://amzn.to/2KIMe32
Nicholas Ameluxen 0:02
I don’t need anybody’s help. I can do this on my own. And I think once I realized that you can go further together, and faster.
Unknown Speaker 0:11
Welcome to the show you are listening to the real estate lab podcast. In this lab, we decode the stories, secrets, and skills of the most brilliant minds in real estate investing and turn that wisdom into practical advice and knowledge that we can use to boost our income. And now let’s turn it over to our host Vee.
It’s a good day to be alive and to invest in real estate. Welcome to the show. My name is Vee Khuu and you’re listening to the real estate lab podcast. If you’re a first-time listener, welcome to the show. And if you are a returning listener, thank you so much for your support. Our guest today is Nicholas Ameluxen. Nick has been investing in real estate since 2015 in Austin, Texas. Originally from Denver, Colorado. He has moved to Austin back in 2014 with his wife Sarah. For 11 years, he was the master technician for VW and Audi, before meeting his investing partner, Mark, and joining quantum capital. Now his business partner Mark is actually an interesting character. He is one of the writers for a very famous American sitcom that you might have heard of “Family Guys.” Currently, Nick focuses on asset management, acquisition and investor relation for quantum capital, both in Austin and in Los Angeles.
To contact Nick, you can send him an email at Nick at quantum capital inc.com. You can find him on Facebook, Nicholas Ameluxen, and you can also find him on LinkedIn. Don’t worry, you do not have to take note of the contact information it will be available in the show notes section. Today, Nick and I will discuss how he did his first deal and how he made the shift from working As a master technician for Audi and VW to a full-time syndicator.
Before we get rolling on the show, I would like to personally invite you to our free Facebook community, just head on over to www.EastWestVentures.co/AIMS to join. Alright, if you haven’t done so yet, I would encourage you to go over to iTunes and hit that subscribe button, you do not want to miss and a future episode of The Real Estate lab podcast. Okay, so by hitting that button, it will make sure that you get the latest drop of the podcast The moment I upload it. Also, while you’re there, give me a five-star rating and leave a review. I would love to hear from you about what you think about the show.
If you want to talk to me personally, go ahead and schedule a call. Go to www.CallwithVee.com and that’s V with two E’s. Alright, enough of that. Let’s get on to my conversation with Nicholas Ameluxen.
Hey, welcome to another episode of The Real Estate lab podcast. We have Nick here today is an honor to have you here on the call with us, Nick.
Nicholas Ameluxen 3:15
Happy to be here. Thanks for having me.
Awesome. Now, Nick. So let’s take a step back here so that our audience knows where you’re from. And so they can have an idea of, you know, how you get to this point where you’re at in life. Can you think back to your childhood and say, You’re eight years old? What was it like growing up in your household?
Nicholas Ameluxen 3:39
Yeah, well, I grew up in Denver, Colorado. At the time, it was I have two siblings, my sister, and my brother, and they were always the smart ones they did with the other ones who did well in school. So growing up, I knew I didn’t want to follow a traditional path, and I kind of fought against that, you know, as much as I could. Even you know, through high school into college, from college, I actually, I dropped out of traditional college and went on to I was a Volkswagen technician for about 11 years before starting in real estate, and that’s kind of how I got how I got here. But, yeah,
so you at a young age, you didn’t want to go to traditional school and you went to a vocational school and became a tech in the car auto industry.
Nicholas Ameluxen 4:32
Yeah, I knew kind of early on. I mean, even from high school, you know, we had to do I remember at a high school business class, and one of the one of the things that we had to do was do business plans, and even back then my business plan was real estate. So I knew eventually I wanted to end up in real estate. I just, you know, never really took the leap and then one day, just decided, you know, why am I Why am I not doing this?
So interesting. You’re still in that class. Your business plans was about real estate. What inspires you What gave you that idea?
Nicholas Ameluxen 5:03
You know, I don’t really know. Honestly, I remember thinking, I’m gonna date myself. It was 2008 and it was my senior year and I just thought like, Oh, I’m going to go flip houses like that’ll be what I do when I get out of high school. And I didn’t follow through on it, but I remember that’s that’s where it all started. I don’t I don’t really remember what sparked it, but maybe I was watching HGTV show or something.
As I mean, I started in 08 also. What high school did you go to?
Nicholas Ameluxen 5:29
Mullen? Okay. I have heard about that school mainly because of the football coach. Yeah.
Nicholas Ameluxen 5:37
drama about that a few years back.
I actually graduated high school here in Aurora in 2006 and 2008. I started flipping houses too.
Nicholas Ameluxen 5:50
See I should have started.
Just somehow you you decided to start a back then but you did not. So you went on to School and you did 11 years in the auto industry. So when did you purchase your first deal? When did you apply this this mindset of wanting to invest in real estate and making it real for you?
Nicholas Ameluxen 6:16
Yeah, I wish it was a little bit more planned out. I bought my first single-family house at the time just for my family in 2015. Right, right after we moved out to Austin. And at the time, my goal to transition out my automotive career was investing but it was I was looking at, you know, stocks, the stock market. And at the time I was buying Volkswagen because I thought, you know, I knew Volkswagen. Anyways, long story short, the whole diesel gate thing happened.
Nicholas Ameluxen 6:44
Yeah, so that taught me a very valuable lesson early on that if I’m going to do investing, or if I’m going to, you know, build any sort of business, I need to have control. And so, at that same time, I started listening to podcasts about investing and somehow wandered onto bigger pockets.
Nicholas Ameluxen 7:01
And then from there that just kind of like flip the switch and we turned the that single-family we were living into into a rental bought a duplex house hack the duplex. Bought another single family and we were buying in Austin so they were seeing pretty good appreciation. And we started looking at you know, how can we we capture this move on to something bigger and that’s when we started looking at multifamily investments and kind of ballooned from there.
So how many years from that from the time you start buying your first deal until the point where you say no, I need to go bigger.
Nicholas Ameluxen 7:38
It was sometime in around halfway through 2018 we were looking at selling one of the first house we bought actually and transitioning that into more property and I kept thinking like you know, I’m really enjoying this but where can I like how can I get a better deal and Austin and it kind of transition like I have to hit the ground. Meet with people like started with wholesalers are trying to find the best deal I can in Austin. That makes the most sense. And then I thought, I’m going to put all this work into buying one or two deals a year of single family rentals. And that’s when I kind of like flipped a switch. Like why am I instead? Like, if I’m gonna do one deal a year? Why not try and do one large deal a year?
Okay, so you decided to say, All right, I’m going to do one large deal a year. How did you research this, this new found niche that you wanted to get into? How did you get the education? Did you listen to podcasts? Or did you actually go to different seminars? networking events?
Nicholas Ameluxen 8:43
Yeah, well, I’ve been listening to podcasts and books and reading books pretty much since 2015. When I when I started getting interested in real estate, so by then I had had a lot of knowledge and taking very little action. So one of the podcasts, I’ve been listening to the Was this this group of guys? And I always find myself going back to their podcast when I was talking about apartments. So I just actually reached out to them and kind of joined up with like a mentorship group. And then you know, from there that’s kind of how I started implementing that knowledge.
And you mind sharing that a group of guys? What was their podcast?
Nicholas Ameluxen 9:21
Yeah. So Jake and Gino, the wheelbarrow profits podcast.
Awesome. I listened to that groups also. In fact, I’m have been listening to them for a few years before they even had that podcast. They were just, you know, sharing content here and there. And I just, you know, I remember I was in the office listening to them a few few years ago. And, you know, it’s been great seeing that journey going from, you know, just started that that whole program with mentoring and now being able to coach so many successful students.
Nicholas Ameluxen 9:56
Yeah, I mean, it’s been transformational for me. I think the one thing thing that really helped me get my change my mindset was reaching out and finding a mentor, whether you, you know, go through a group like I did or not it, I think it’s, you know, multifamily, at least as a team sport, and you need to find people who have done it to help you, in my opinion, or at least, you know, do it together.
I imagine you research a bunch before you committed to Jake and Gino, what is it that you like about their program?
Nicholas Ameluxen 10:27
A lot of it was they were it might be because they were the first people I heard that are kind of talking about this. And I have been listened to them for the longest but also over the years, I had reached out to Gino on multiple occasions just over email, like asking a question, you know, not part of the group, nothing of that and he would, you know, immediately respond.
Nicholas Ameluxen 10:48
And I just knew after looking at all the other groups, they all have, you know, something great to offer. But here I was not even a part of his group, which is some guy who heard him on the internet, sending them emails and he would respond which I thought was I wanted to be I wanted to surround myself with people like that. I want to have that personal touch.
Cool. Cool. So you join that program and you ultimately purchase your first deal. How long did it take you to do that?
Nicholas Ameluxen 11:16
So I joined their program. October of 2018 is when I started really looking at multifamily.
Less than a year now.
Nicholas Ameluxen 11:26
Yeah, we closed on our well I closed on a 12 unit in July and Atlanta. I was a small part of a group that came together to buy that and then my own deal out here in Austin a 53 unit we closed in August, August 1.
So you just closed it.
Okay, got it. So I know a lot of people in the apartment world at least they are interested in investing in Texas. How did you or what did you do differently To be able to find that first deal and ultimately close on it.
Nicholas Ameluxen 12:04
Sure. I don’t know if it’s anything I did differently. I’ve always heard Austin was a very competitive market. But unfortunately with me when I was still working full time, the the value that I can bring was being the boots on the ground. So I was stuck with the market. I mean, look, I mean, I love Austin. It’s great market but you know, it is very competitive. I don’t think I did anything earth shattering or groundbreaking. I just went out and looked at a ton of deals. You know, we underwrote a ton. We toured a ton made offers on the time before we had one accepted.
And on first do deal, you do a syndication or you bought it with your money with someone else?
Nicholas Ameluxen 12:44
Yeah. So the first deal, we did not syndicate through the process of looking for properties out in Austin, and just kind of networking with everybody I could. I met up with my partner on these Austin deals, who was also looking to invest in Austin. We just kind of kept it in house I guess you could say
yeah kept it in house. So how did you meet your partner for that deal?
Nicholas Ameluxen 13:07
Yeah actually a while ago on bigger pockets so when I decided that multifamily was where I was going to put my my focus my effort I’ve started reaching out to everybody on bigger pockets who syndicated or own apartments or had experience with it and just offering for you know, coffee or a phone call. And actually, pretty much everybody replied, it’s a very nice group of people on there usually, but that’s how I met my partners through that.
So that right there shows that you are doing something that different than the most people out there because on bigger pockets for the most part, you just don’t even think about reaching out to people you just pause and hope that someone would reply to you. But you when the active route, you know, you seek out knowledge and you seek out professionals who have done this for a long time to soak up their knowledge. and expand your network.
Nicholas Ameluxen 14:03
Yeah, I love I mean, I love bigger pockets for the podcast the forum I think has gives people value in and the networking aspect I think is the greatest part. The one thing I, at least for the multifamily side I feel like sometimes asking the question to the general public on bigger pockets can be a bit confusing especially if you don’t really know if you’re looking for general advice because so many people from so many different backgrounds come at you. But as far as you know sinking up with people in your in your field and in your industry and then your niche within that industry, I think it’s irreplaceable.
That’s definitely is a good place a good forum for any of the newer investor passive or active to go and start your investing journey there. Now, let’s talk about your first apartment deals again. Besides so you bought it with your money and it’s in Austin, you found your partner through bigger pockets. Walk me through the financing part. Because I know for commercial properties, you have to have a few pieces. One of it is the key principle. Did you have the network to close the loan? Or how how did that happen?
Nicholas Ameluxen 15:19
Yeah, through my partner is the the networth to close the loan.
Okay, so your partner has the network, he was willing to sign the loan, and you were the boot on the ground. Both of you put up the same amount of down payment?
Nicholas Ameluxen 15:35
No, it was a representative of our our portion. Okay. So
I would imagine he since he is signing on the loan, he would get a bigger piece. So how did you even convince him to join in this deal with you being that is your first?
Nicholas Ameluxen 15:53
Sure. Well, it helps that he’s a multi family investor that’s been doing it for 15 plus years. So most of the stuff, the deals that I was showing to him, you know, it wasn’t anything, anything new. It’s all stuff that he was familiar with. As far as you know us coming together for our first deal, like they kind of started with the initial phone call of bigger pockets. And then as I was continuing to look at deals and Austin if I found something I thought might work based on what we had talked about, I’m going to start sending his way. And then from there, it kind of evolved was looking at deals together. So it wasn’t like an overnight like, Hey, I have this deal come sign on the loan. For me. It was all relationship building. And it took time. I mean, it took almost nine months of working together for you got a deal accepted.
definitely So you mentioned earlier, you have been looking at a lot of deals and before you even go to him, you have to look at a deal and make sure that you think it’s something that will work. Can you share some of your underwriting criteria what you’re looking for in a deal?
Nicholas Ameluxen 16:54
Well in Austin, because everything I do is kind of Austin specific, we look for 20 to 100 units. It’s B and C class. We look all over the whole, Austin MSA, but we really like assets that are closer to the core. So as far as our underwriting characteristics, I mean, it really depends on the location, price per door can fluctuate across Austin, crazily cap rate, you know, we usually want to be above a five, five. That’s not always possible going in, but we also do value add deals. So sometimes there’s a component of it where it’s obviously not as as attractive as a stabilized deal. So
So can you explain a little bit on the on the value add deal? What do you typically look forward to going in and building?
Nicholas Ameluxen 17:37
Yeah, I mean, we want to look for improvements that give us return. We try to avoid things like structural, electrical, anything that you don’t get rewarded for doing but get punished for not doing that makes sense. Yeah, we want properties where there’s at least 10% difference between market rents and inplace rents. Okay. That we can achieve, you know, those those rents without, well that we can achieve those rents without a huge lift, if there is a huge lift that we get a representative increase in value through the increasing rents.
So rent increasing is one that you look for. And another area that you look for, I would imagine is finding ways to reduce your expenses or bring in a vendor for your, say laundry incomes, that kind of deal.
Nicholas Ameluxen 18:29
Sure. And now that we, you know, we have our one deal closed, we have two more that are closing, a lot of people say that 20 to 60 unit range is kind of hard to manage, because it’s usually not enough for a full time onsite manager, but not well not enough to support the payroll. So one thing we look for now is to buy buildings very close to each other. So you kind of get Oh, ok.
Ok. So it’s kind of like so I’ve read this in Joe Fairless’ book. He also like to buy small, if you’re going to buy a small unit buy them close together so you can group everything together in the back end, and then you can sell it and when, like one big portfolio?
Nicholas Ameluxen 19:11
Sure, it also helps with managing because then we can have one full time manager and a full time maintenance tech over 130 units versus 60 units and 70 units.
Okay, got it. Got it. So on that on the buildings that you’re trying to close now, they’re they’re fairly close to your first two that you purchase.
Nicholas Ameluxen 19:33
Okay. And you’re still paying with your own cash?
Nicholas Ameluxen 19:39
Oh, wow. Okay. haven’t met that many people who are able to do that. Yeah. You’re the first.
Nicholas Ameluxen 19:47
Yeah, I mean, it worked out we had we were both in a situation where we had to 1031 some money.
Okay, well, you had to 1031 so I was under the assumption that when you sold your first property, you can avoid capital gain there being that you live there for a while.
Nicholas Ameluxen 20:04
I only live there for a year and a half. Oh, so I didn’t know that when I moved out. I found out later come tax I were looking at selling it. So we had to.
I see. Okay, so are you is your plan is to kind of eventually roll out of all your single family home and put them into bigger units?
Nicholas Ameluxen 20:26
Yes, yeah. And moving forward, we’re going to look at going after, well, maybe not larger at will probably stay away from the 50 to 20 and start looking at 50 to 115, Austin, and then syndicating those deals.
Okay, so, for now, your business plan going forward? Do you foresee going out of Austin or do you still want to stick in that main market?
Nicholas Ameluxen 20:50
Yeah, I like Austin. I think it’s a strong market. We got pretty, pretty good job growth coming in. There’s a lot of things I like about it.
Can you tell us a little bit about things that you like?
Nicholas Ameluxen 21:00
Well, it’s pretty like heavy tech, obviously, we have the new Apple campus. We have Oracle, we have Google, we have Samsung, we have Dell, and more and more jobs being created. Big companies moving here. And it’s, you know, the number one place to live three years in a row. The only bad thing about it is the traffic but I think that’s big cities everywhere now. Huh? Yeah. But as far as why we like Austin is, I mean, its growth is exploding. If we can get in a in a good area in the path of progress, which is where we’re finding these these smaller deals. It just makes sense to us.
Yeah, so and not not a lot of people nowadays are looking forward to smaller size deals. Everyone, you know, going at 100 and above 100 200 doors is the minimum that that they want to to buy. Meanwhile, you’re coming in looking at the smaller size and you’re scooping them up.
Nicholas Ameluxen 21:53
Yeah, yeah, I mean it. We just see value in it. I understand that on both sides of the coin, but It was also, you know, what kind of pool do we want to play in? Do we want to if we go too small, then we’re competing with everybody. If we go to large we’re competing with much bigger players. So we like we like our size right now.
So let’s change topic a little bit. Going from single family home to your first apartment building was changing your mindset.
Nicholas Ameluxen 22:25
Oh, man so much. I mean, back when I was just doing single family rentals and duplexes. You know, I like to tell people I was actively passive. You know, I didn’t, didn’t hound the streets for the best deal. I wasn’t knocking down doors, I wasn’t sending letters I was working, saving up enough to have a down payment and then looking for a little bit and ended up buying and then another nine months would go by and I would save up to buy and you know, it’s very slow. A lot of effort put into it, but enjoyable. I just kind of thought I could do it all by myself. And so when I wanted to start looking at larger units, my mindset was, I don’t need anybody’s help. I can do this on my own. And I think once I realized that you can go further together and faster, it was just a complete mind, mind mind shift. And then also just going out, you know, before I was never attending meetups, networking, going to events, taking people out for coffee. And that kind of, you know, changed my perception as well. There’s so many wonderful people in this industry in this market in this area, and you meet some pretty incredible people, but also, you know, you you build members of your team that you just can’t do, you know, everybody talks about team building, but a lot of that is just meeting everybody you can and that was I guess the big mind shift change because I was very anti partnership anti joining up with people anti joining a mentorship group. I mean, that was a huge leap for me as well,
but what why is that, why did You not like joining a mentorship program,
Nicholas Ameluxen 24:03
I have kind of the, I guess that somebody would call it the IMA mentality where it’s like, I’m going to do everything. Okay. And after, especially after joining bigger pockets and going on the forums like they’re very, I don’t want to say everybody is but most of them are very anti mentor anti coach, and I haven’t experienced every mentor coach. So there can be very good reasons behind that. But as far as in where I was, you know, I knew when I became a technician, I had a mentor, and it helped me, you know, grow as a technician. So I knew if I was going to do this full time, I should probably look into getting a mentor. But I’ve been listening to podcasts and reading forum posts for years that were like, you can find all that information for free. And you can you can find it for free, but it’s not going to be curated. It’s not going to have actionable content with it. And it’s also going to be you know, well, I guess that goes back to the curated part. It’s going to be covered by 17 different people’s opinions, most of them unqualified. What you’re asking,
right and and I see that it’s like me not knowing how to fix a car, go online go on YouTube different forums to find out how to fix one thing in a car. Whereas I can just go to a shop and just say, here you go. Do it for me or teach me how to do this.
Nicholas Ameluxen 25:21
Yeah, exactly. Yeah. Great, great analogy.
So then, besides the mindset shift, have you had any other change in your habit at all?
Nicholas Ameluxen 25:33
Well, I think the mindset change really did change my habits. So you know, I set daily goals for reaching out to people.
How many people do you need to reach out daily?
Nicholas Ameluxen 25:45
Well, it’s kind of slow down I guess I should say now that we have three deals closing because that takes up a lot of time. But for a while it was I was reaching out to three people in day
on on bigger pockets or anyone bigger pockets. Yeah. or
Nicholas Ameluxen 25:59
anywhere, anywhere. At first has bigger pockets. And then as I went to more events, you know, it kind of went that way and meetup groups and but really I mean everything at least that I’ve noticed and multifamily so far most of it is repetition and just putting in the work. So I guess habit wise it’s just treating it like a business, putting in the work each day and when you don’t feel like it, and then following a framework that works.
So what would you say is a single habit that actually give you 80% of your results up until now?
Nicholas Ameluxen 26:34
Man, that’s a tough one.
Nicholas Ameluxen 26:36
I would say the the one thing I’ve changed that’s given me the most benefit is is networking. If I had to give anybody any advice would be go out and attend as many meetups as you can. Most of them are free. If that’s a concern, reach out to people.
Nicholas Ameluxen 26:52
Do you have any advice for people who have never attended meetup or go to Any networking events on how to on their approach or how to work the room when when they get there?Sure. Well, if you’re like me, I was a huge introvert. So going to a meetup was terrifying. Before I before I did that I joined Toastmasters. So if you’re scared of like public speaking or then join a group like Toastmasters, I still go It’s fantastic. As far as working the room, I mean, just I mean, everybody’s there for the exact same reason as you are to meet people. So it’s just walk up to people and just start introducing yourself and asking about them. You know, that’s usually why you go to networking events is to network so it’s not out of the blue to go up and introduce yourself to somebody. Ask them what they do or how they got there. who they are.
Okay, then how about online when you reach out to people on bigger pockets? What do you usually say?
Nicholas Ameluxen 27:50
I usually you know introduce myself, and I say like, I’m an apartment investor in Austin, Texas, looking to surround myself with like minded individuals would you ever be interested in connecting, you know, moreover, if they’re local, I usually ask, connect more over coffee or if they’re not, you know, a phone call.
Okay, so mindset change, habit change. And let’s say that you’re experienced now, right? Is there anything that you wish you would have known? before you started this whole journey? One thing you wish that you had known when you started out?
Nicholas Ameluxen 28:28
Yeah, that it’s possible for me to do it. You know, I always, especially when I started listening to podcasts, you hear about these people who, you know, are really making it happen. And I always you always tell yourself like, even subconsciously, at least I did, like, Oh, they made it happen, but I couldn’t do that. And I think once I realized, like, yeah, you actually can do that. It was a huge change. So the one thing I would tell myself is, our wish I knew was that it is possible. You just got it. You put in the work, have the guts to go out there and do it and make it happen.
Yeah, it’s kinda like I think Napoleon Hill said that if you can see dream, you can achieve it.
Nicholas Ameluxen 29:05
So is that the motto that you go by?
Unknown Speaker 29:10
I wish I wish I could say 100%. Yes, I’m getting there. I’m starting to push myself more and more out of my comfort zone. And the things that weren’t positive. So I don’t know if I’m 100% broken of it, but
I’m always trying to work on something new. And I guess that’s as that now, do you have a morning routine? By chance?
Nicholas Ameluxen 29:34
I don’t. I’ve been trying to implement the Miracle Morning. I read that a long time ago. And now that I’ve stepped away from what I was in Ford Focus on real estate full time, I’m trying to re implement that. Right now. I’m really excited because my morning routine now is waking up and taking my kids to school, which
Nicholas Ameluxen 29:53
so I’m pretty happy with it right now.
Nothing, nothing can beat that. Yeah. Now what would your life right now with your career Right now, what are you most curious about at this point?
Nicholas Ameluxen 30:04
I want to see I mean, what I’m most curious about is how big we can grow this and what we can, you know, make unique about our, our multifamily investment business, how we can differentiate ourselves how we can help the most people and not just being another face in the crowd. I’m interested to see, you know, where we can take this.
What’s your business plan to make this happen?
Nicholas Ameluxen 30:27
Well, right now, the biggest thing on our priorities is getting these deals closed and stabilized. And then from there, really reaching out to more and more people and seeing what we can do to go after more deals or larger deals. And what how we can structure that either for ourselves or for our investors to really make that attractive. And then just building that that investor base and continuing to focus in on strong markets in niche areas that maybe are being overlooked.
But cool, man now so you’ve been doing this for a while, have you run into or stumble into any hurdle that really gave you a huge lessons? Like any any failure that you ran into, or appeared to be a failure?
Nicholas Ameluxen 31:22
Yeah, I mean, pretty early on. We already talked about Volkswagens that really taught me I want to be any investment I’m in I want to have control. And that was a big life lesson. And then as far as real estate, we got pretty lucky with our first couple of properties. We acquired the duplex. I learned inherited tenants can be awful, even in landlord friendly markets like Texas. I would I don’t know really what you can do about that on the front end, except only by vacant properties, but
Nicholas Ameluxen 31:53
it’s possible. Just be careful with your inherited sentence.
Well, I mean, in the apartment market, I cannot imagine You don’t want to inherit any tenant.
Nicholas Ameluxen 32:03
Yeah, exactly. Yeah. And that’s, I mean, that’s completely different animal, if you’re in a house hack, a duplex, maybe see if you can get get them empty. But essentially, when we bought our duplex, the one tenant just destroyed the place against they were very upset. And then just left town. So that was kind of a life lesson. But I guess I would say through managing my own properties, I realized one thing, which kind of led me to to multifamily is I don’t want to manage the day to day like the tenant relationship. Maybe not the center of the ship. I don’t want to be a property manager.
I put it that way. Yeah. You want to be an asset manager? Yes. You manage the manager?
Nicholas Ameluxen 32:45
Yes. I realized very early on that that is not one of my skill sets, nor one that I’m extremely interested in developing. So I had to look at it at an investment area where I could utilize that.
Okay, so what are you what Do you enjoy most of my work? Besides, you know, managing the manager? What are you good at?
Nicholas Ameluxen 33:04
I mean, I love acquisitions. That’s kind of the sexy side of real estate. I feel like, Yeah, I do enjoy asset management, I enjoy, you know, seeing how we can push these properties to their full potential. overseeing renovations. All that I love seeing the before and after and being involved in that process. I think that’s really unique. Yeah, definitely. and turn it into something beautiful.
Yeah. Same here. I mean, I used to fix and flip and the feeling that you see the before and after it just like Nothing can compare to it. Yeah, the photo is one thing but being there, and you know, visualized back Oh, shoot. This house used to be a dump. Look at it now. Yeah. I imagine it could be the same for for apartment when you turn something like in the D class building into a C, C plus.
Nicholas Ameluxen 33:58
Yeah, yeah. It’s nice to To see your you know, what you envision for this property come to life? You know, it’s a it’s a fun process.
Do you like to my B and C class buildings are you care about some lower one?
Nicholas Ameluxen 34:17
primarily focused on B and C class.
B and C. Yeah. Okay. How do you source your your deals? Currently,
Nicholas Ameluxen 34:27
every deal we’ve gotten has been brought to us by a broker as far as apartment deals and that’s a lot of that was because of time. You know, I hear a lot of people chase you know, even at this scale off market, truly off market going directly to owners. I found much more success building those broker relationships, I think if they more than deserve their fee if they can bring you a good deal, especially before it’s listed, and it was also a time constraint and chasing after great Owners requires time.
Nicholas Ameluxen 35:02
And while I was working full time, I had to leverage pretty much everything I could, especially my time. So I, I focused on building relationships with the people who constantly focus on building relationships with the owners of the market. So I guess that was a long answer to we get all of our deals so far through brokers.
Can you share a little bit more about how you build a relationship with a broker, especially for someone who listening might be new to the game?
Nicholas Ameluxen 35:28
Sure. I’ve heard a ton of strategies. All I can say is the one that’s worked for me but now that the others won’t. If I’m meeting a you know, a broker for the first time, I have a kind of like a credibility book of who I am what I look for who the partners on my team are, that I send, usually after before a call, and they’re busy people, they don’t really want to be enough if they’re not nice people, but most of them are focused on getting the deal closed because that’s how they feed their family. So if you can Show them that you know what you’re looking for, you know what you’re asking for, you have the competency to close. I think you’ve checked a lot of the boxes, you just don’t want to raise any red flags, especially on your, you know, your first couple of conversations. So
what would be a red flag?
Nicholas Ameluxen 36:16
I think being very unclear about what you’re looking for, like if they if you are calling a broker, and they ask you, what are you looking for? And you say, a good deal. And Austin? Or, you know, so is everybody. So how can you be? How can you stand out? And how can you be specific, so we try to focus in on age, location, size class, and then stick to those as well. You know, they might send you stuff that’s outside of that. And then the best thing you can do is give them positive feedback on why that doesn’t work, or why it does work and what they want to sell as much as you want to buy. They just want to make sure that you are the person that can actually buy and not just tie property for 30 days.
30 days. So talk about that a little bit. What’s the What’s the timeline in in the Austin market from the time you get an accepted LOI to the time your money go hard and your financing your inspection and all that.
Nicholas Ameluxen 37:14
Yeah, so, you know, just like with everything in real estate, it’s totally negotiable. We typically do 60 day closings will probably bake in one or two extensions if we need to into the contract. Where we’ve been flexible in the past is doing our due diligence period before money goes hard. So typically we asked for 30 days, okay, one you know if we’re going to negotiate we don’t when we can’t go any more aggressive on price maybe we do a higher deposit, maybe we do a shorter due diligence period. I haven’t done a deal where money is gone hard day one, I don’t think I could that just makes my stomach upset thinking about it. Just because so many things can go wrong that you know, neither you nor the seller know. But as far as the closing timeline and that’s pretty much it. 60 days, we usually ask for One or two 15 day extensions if required by the lender. That’s all that’s happened. But yeah, that’s why I said, you know, they don’t want to have a property for 30 days because I feel like the typical ask is a 30 day due diligence period. So they want to tie up a property and then have somebody back out 30 days in that says, you know, remarketed all over again.
Now in terms of your financing, once again, are you looking for long term debt or conventional debt? institutional?
Unknown Speaker 38:29
Yeah. Our first deal, we did agency debt, it was a Freddy loan. Okay, we project our hold times between five to seven years right now, at least in Austin. So we like debt that matches up with that and if we’re doing a heavy value add, we might look for something with a flexible prepay, okay, but we’re pretty conservative when it comes to leverage we’re not trying to get very high LTV is we’re fine with you know, 70-75 and attractive rates, longer terms. Your five to seven year terms but with a flexible prepare, kind of meets up with our strategy,
does it? I imagine right now, with everyone talking about the recession’s coming up. Does that worked out with your business plan also to stress test these deals when you coming in?
Nicholas Ameluxen 39:18
Yeah, and that’s part of the reason we don’t try and go super aggressive on our debt, just because of where we are at in the game. Like if we can lock in a low rate for a long amount of time at conservative leverage. That seems pretty attractive to us. And it still makes the deal work. I wouldn’t want to I mean, I know people still are, and I’m not speaking from a position of education, or authority on this, but I wouldn’t want to be in like bridge debt or anything, floating rates or short terms where you have to in two or three years or two years from 18 months transition to a different product. Unless you I guess by additional years, I mean, the debt world. There’s a foot for every shoe. Just finding the right one.
Yeah, find whatever works for you.
Nicholas Ameluxen 40:07
Yeah, what fits for you the deal? And I guess your temperament? I’m a little bit less or more risk averse. I think that maybe some people.
Okay. So, Nick, is there anything else that you want to share with a new investor who were in your shoes? Maybe in 2015 when you first started?
Nicholas Ameluxen 40:30
I mean, you hear all the every almost every says learning market, learning market learning market. I think that’s really important. That would be the first thing I would tell anybody is learning market, meet as many people as you can in your market. And then you know, believe it’s possible, you can wait on the sidelines for something to happen, but you’ll probably be waiting a very long time. So go out there take action. I guess that’s the best thing I can say is education is great, but you need to actually take action. So go out there and do things steps.
Yeah, education without action is the most expensive hobby you can have.
Nicholas Ameluxen 41:06
There you go. Yeah.
Nicholas Ameluxen 41:09
That’s really accurate. Yeah.
Well, Nick, thank you so much. Man, you have been awesome throughout this podcast episode. I appreciate you taking the time to record this episode with me and I’m sure the audience learn tons of value from you.
Nicholas Ameluxen 41:23
Well, thanks. I was really happy to be here. So thanks for having
Unknown Speaker 41:27
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