Andrew Cushman, Founder of Vantage Point Acquisitions, joins us once again to discuss his journey from leaving his career to closing a recent $49M multifamily real estate asset. He shares his considerable insight on working with property management companies, investor relations, creative financing, and advice for passive investors and aspiring multifamily operators.
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Transcript
Devin Elder:
Andrew, welcome. How are you?
Andrew Cushman:
I am well. Good to be talking to you again, Devin.
Devin Elder:
Yeah, Absolutely. We’re just saying it’s been a couple of years since we had you on the show last. So, I’m excited to kind of reconnect here, talk about what you’ve been up to, recent deals, what’s going on with the market, all that fun stuff. It looks like there’s a surfboard in the background there. So maybe not all business all the time.
Andrew Cushman:
No. Yeah. No. That’s not a prop. That gets used regularly.
Devin Elder:
Not a prop. I love it. I love it. Well, let’s kind of briefly kick it off with a little bit of background and bio for those folks that are not already connected with you or are already investors with you, what have you. What’s your story? How did you come to real estate?
Andrew Cushman:
Yeah, I took the traditional path into real estate and went and got a chemical engineering degree. And basically, the reason for that was I knew I wanted to be an entrepreneur, but I had no idea of how to make that happen. So I figured, “Hey, if I become an engineer, I’ll at least have a good job until I figure out what I really want to do.”
Andrew Cushman:
Graduated, worked as an engineer for seven and a half years, married my future business partner who had the same idea of like, “Hey, let’s try to do something on our own.” Eventually, we discovered flipping houses here in Southern California. So in 2007, we flipped her first. It was a condo. Basically made as much as I made all year at my job and said, “All right, [crosstak 00:01:24].” Yeah. I can’t get a better [inaudible 00:01:27] than that. So either now or never. So yeah, I walked in and quit, went full-time into flipping.
Andrew Cushman:
My wife did the same two years later. She quit her job and joined the business full-time. We did that for about four years and had some really good years in 2009 and ’10, but we said, “Okay, this isn’t going to last forever.” It’s also a very transactional business. You’re only as good as the last deal you did. And then you’re empty. You get nothing coming in unless you find another deal. And so we said, “All right. Well, what’s the next big cycle? What’s the next big thing?
Andrew Cushman:
And this was again, it’s 2010 heading into 2011. And we said, “Well, we just had a big recession, which means we’re going to have an expansion.” So, all right. So that means more jobs and rising incomes. And then, all these millions of people got foreclosed on, which means they probably can’t buy a house for seven years, which means they’re going to become renters. So, let’s see. Put those three things together and, oh, hey, apartments should probably be doing well. Let’s go look into apartments.
Andrew Cushman:
So we lucked out and pretty quickly found a great mentor to help guide us through learning the business. Our 2011 was our first deal, and I don’t recommend anyone do it this way, but it was a mostly vacant, highly distressed 92 unit property on the other side of the country.
Devin Elder:
Perfect.
Andrew Cushman:
Yeah. I learned a lot, but we got it done. It was profitable. And I’m glad we did it because once you get past the first deal, all the other ones after that are easier. And since then, we’ve been done about 2100 units in the Southeast, and it’s been a great business.
Devin Elder:
So thank you for the overview. You picked mostly vacant 90-something unit property for the first one out.
Andrew Cushman:
Yes.
Devin Elder:
Yeah. Look, I had kind of a similar experience on a 75 unit. That was like the hardest project I’ve ever done. And I haven’t done one harder since, kind of weird that that was on the front end. So I can relate with that. How did you find it? How did you finance a deal like that, that was that distressed?
Andrew Cushman:
So that was 2011. And the financing was hard to come by for just about anything, never mind something incredibly distressed. So we had to basically purchase it all cash. And, of course, we didn’t have the cash. So that’s when we figured, that’s when we learned about syndication and said, “All right. Well, we need a total of $1.2 million to buy this thing and renovate it and turn it around.”
Andrew Cushman:
And so we hired a syndication attorney and drew up the documents and started, went out to our network. And we completely underestimated how hard it was going to be to raise that much money, number one, at that point in the cycle. And the number two, with our very limited network and no track record or anything like that. So yeah, I mean, that process almost killed us. It took six months. That’s why I’m half gray, but we did get it done. And so, yeah. So, we raised the 1.2 from investors. And actually, I take that back. We had already extended our contract several times and we were still running short.
Andrew Cushman:
And so what we did is we went to the seller and we said, “Hey, when we inspected this thing, we found way more deferred maintenance than we were expecting,” which was true. And then, so we framed it and said, “Look, rather than retrade you on price, how about you carry a note for a few hundred thousand and we’ll call it good,” because that saves us on expenses. He agreed.
Devin Elder:
Nice.
Andrew Cushman:
Boom. We were able to get it done by getting the seller to pitch in and carry, I think it was 300 grand of the equity. So yeah. So that’s how we raised it by the skin of our teeth.
Devin Elder:
I love it. So you raised a quarter of the money from the seller effectively, didn’t really raise it, but you bridged the gap on your capital to close requirement, right?
Andrew Cushman:
Yup.
Devin Elder:
And you didn’t mess with his number. That sounds great. That sounds like a win-win. I mean, end of the day, we’re solving problems, right?
Andrew Cushman:
Exactly. And eventually, we turned that thing around and we refinanced it. We paid him off. Our investors got all their money back. And then, us and the investors held it for another three, four years. So it ended up good. But man, that was a rough first ride.
Devin Elder:
Yeah. No kidding. Do you think a deal like that, that rough in the very beginning kind of set your barometer in what kind of your ability to handle pressure like on subsequent deal because you’ve grown a lot since that first deal, right? Do you think that kind of set the tone that like, “Wow, if we could do that, I mean kind of do anything, right?”
Andrew Cushman:
Yeah. So, two effects of that. One, well, actually, really three. So one is like you said, it’s like, “Well, so far nothing is as tough as that one.” Second, we said, “We don’t want to do that again.” So we changed the type of properties that we’re looking for. And then out of that deal and a couple others is you’ve heard it said many times that you learn the most from your mistakes rather than your successes.
Andrew Cushman:
So when I look at our portfolio over the last 10 years, I attribute a lot of the success of the properties from especially the last seven years to the changes we made after that one and a couple of the ones after it. And what we did is we developed a process of screening and saying, “Okay, we’re only going to buy stuff that checks all these boxes. And if it doesn’t, it’s an automatic no.” And we’ve learned what those boxes were by doing some of those tougher deals in the beginning.
Devin Elder:
I love it. Yeah. It’s so funny. It’s like after you’re at this awhile, you’re like, “Oh, the path forward is relatively simple.” You just don’t do these 1000 things. And what’s left is like this success that’s relatively straightforward. For some reason, you have to know what those thousand things are. I see it all the time. People want to do those things. It’s like we innately want to do the wrong things in real estate. Real estate sometimes really counterintuitive. Right?
Andrew Cushman:
Yeah. You’re totally completely right. Yeah, you’re definitely spot on because I mean that path is varies probably 80% of the people I meet that had some kind of similar path. Oh yeah. I started buying ghetto flips or whatever. And then like, “I don’t do that anymore.” It’s similar. I started in C minus and now I only do A or something along those lines.
Devin Elder:
Yeah. That’s funny. That’s so funny. It’s such a similar path for a lot of operators out there doing it. I love it. Well, thanks for sharing snippet into that story. Obviously, there’s years and probably a lot of heartache that went into that. What about fast forward? I know you guys close a much bigger deal more recently. Can you give us an overview or insight into that project? And obviously, there are plenty of projects in between, but that was the beginning and fast forward and bookend to a recent deal and talk about that.
Andrew Cushman:
Yeah. And it was really interesting about their most recent deal is oddly enough, it also involves a form of seller financing. [crosstalk 00:08:22] Yeah. So the most recent one was 252 units owned by a private developer in the Florida panhandle. We ended up buying it for 49.8 million. You built it in phases between 1999… I’m sorry, 2001 and 2019. So it’s A-minus product in an incredibly fast growing area.
Devin Elder:
How did he phase it out? That’s a long process? He just had land and kept putting up.
Andrew Cushman:
Yeah. What he did is, first, he built 40 units on one parcel. And then, he got another parcel around the corner and, he built another 40. And then, he got another chunk of land and built a hundred. And then just by chance, the parcel next to it came up for sale, and he grabbed that one, and then added another big chunk. And so he’s a custom home builder in that market for 40 years. So he just knows every person, every parcel, every contact. And just basically, that was the family’s portfolio. And he was just looking to retire. And a broker that we’ve worked with for a while had been calling them and said, “Hey.” And then, he called me. He’s like, “Hey, this is exactly the type of thing you guys are looking for. And I feel like it’s a good fit.” Took four and a half months of negotiating to actually get to being under contract.
Andrew Cushman:
But we ended up striking a deal. And the interesting thing is we needed to bring total of 18 million in equity. What we ended up doing is the seller himself actually invested six million back into the deal.
Devin Elder:
Okay. Cool.
Andrew Cushman:
I mean we only needed 12.
Devin Elder:
That’s a great move on his part. Again, kind of a win-win situation here. It’s like, what do you want to do with a $20 million payday? You don’t need that for your lifestyle. You’ve got some tax consequence. At some point in the game, you’re not after a giant pile of money to stick in the bank and let inflation erode away at it. You’re after cashflow. You want your bills paid, and you want to avoid taxes. Right?
Andrew Cushman:
Well, exactly. And then really, that’s a key component of getting deals done in today’s incredibly competitive market, regardless of whether you’re trying to get your first fourplex or your next 300 units. It’s really the same principle, is deals are more made than found right now.
Devin Elder:
Yup, totally.
Andrew Cushman:
And that means creativity, right? So it was off market, but every owner is being chased by a thousand brokers right now. So there were some other offers on it. A couple of them for a million plus more than where we were. But because we were able to say, “Hey, look, if we do it this way,” you’re going to save a couple million in taxes.
Devin Elder:
I love it.
Andrew Cushman:
And you’re going to have a guaranteed check every month coming from us. So you’ve got income and you’re saving taxes. And so your net, if you add it all up, is actually a couple million higher than if you just take a straight up sell it all at once. And like you said, Devin, what are you going to do with 20-plus million? Stick it in the bank and get 0.01%, right?
Andrew Cushman:
And again, it took four months of relationship building in order to do that. But it’s been a win-win for everybody. We’re thrilled with the asset. It’s working out great for him. And yeah.
Devin Elder:
That’s fantastic. So yeah. Who cares about anything but the net, right? So everybody’s going to crawl about some top-line number, but what’s the guy going to walk away with? And if you could show a compelling narrative there and they trust you to operate it well, I love it. Man, that’s great. And then, so 18 million bucks in equity, that’s nothing to sneeze at. You guys aren’t having private equity firms from New York come in and write big checks. You’re just syndicating it old fashioned way.
Andrew Cushman:
They’re calling us. But we politely say, “No, thank you.” Yeah. Every deal we’ve done is 506B, which just means it’s people who we already know or have already gotten on our list. We don’t solicit or anything like that. So, yeah. Your dentist, your doctors, your business owners, it’s all those folks. Yup.
Devin Elder:
Yup. So, 18 down to $12 million in equity with your seller investing some. But a $12 million equity raise on a 506B from existing relationships, that’s no joke, man. That is a big chunk of equity. How did the raise on you guys go for this one?
Andrew Cushman:
It sold out in 28 hours.
Devin Elder:
Okay. [crosstalk 00:13:09]
Andrew Cushman:
So it went very well. Was candidly, I underestimated. I had our team psyched up for like, “Hey, guys. We’re really going to have to reach out to people,” make sure they connect, let them know that, “Hey, we got this great deal.” And 28 hours later, because we do it all online now and we’re just watching it fill up, we’re like, “Really?” Then, it was done.
Devin Elder:
Wow.
Andrew Cushman:
And there, we had a big waiting list that never got in. So we’re trying to find the next one that’s just as good.
Devin Elder:
So what do you attribute that to? Is it you hadn’t done a deal in a while, you’ve been treating investors right on previous deals, you guy’s been marketing like crazy? What do you attribute that kind of one day close out to?
Andrew Cushman:
Yeah. I certainly can’t take all the credit for it. A big piece of it is the current market. Lots of people have cash, and they need a good place to stick it. Not stick it, but they need a good place to invest it, where they can get a good yield for a relatively low amount of risk. So part of it is just the market. It is definitely easier to raise money now than it was seven years ago or anything like that.
Andrew Cushman:
But yeah, also almost everybody that invested was people who had invested in our previous deals. We try to be a low volume, high margin acquire and operator, not necessarily that we want to be low volume. It’s been hard to find stuff that makes a lot of sense. So, yeah. It was just people that we’ve invested with us over the years, or a lot of referrals. A lot of referrals came in and said, “Hey, my brother wants to do this as well,” or something like that. Yup.
Devin Elder:
Yeah. There’s really a kind of a snowball effect there that happens. And then, you run into the conundrum of deal flow, right? It’s like you got investors you want to put them in deals, but better to not do a deal and just wait and wait until you find one. And then, people know they need to act quickly if they’re interested in the deal.
Andrew Cushman:
Yeah. No deal is better than a bad deal.
Devin Elder:
That’s it. That’s it. I love it. What did you guys do on this kind of monster $50 million deal? How did you guys structure the debt on it? And what did that look like?
Andrew Cushman:
Yeah. And I’m glad you bring up the debt because, to me, that is one of the most important things to consider at this point in the market cycle where we’re fairly certain there’s going to be inflation of some kind. And that’s generally good for real estate in terms of values and rents going up. But then, interest rates go up too much. That can be an offsetting factor. And that can cause problems with valuations if you need to refinance or sell or something like that. So how we structured the debt on that is we actually went with a 12-year Fannie Mae loan. And the beauty of the 12 years, number one, we’re fixed at three-point-something percent for 12 years.
Devin Elder:
Awesome.
Andrew Cushman:
So if rates shoot way the heck up, we can sit on it for 12 years. And when you look at US real estate, it’s tough to find a 12-year period where at the end of that 12 years, prices aren’t higher than they were at the start.
Devin Elder:
Sure.
Andrew Cushman:
So we figured that’s our worst case scenario. We’re locked in for 12 years. We’ll cash flow just fine. We can write it out. But the beauty of the 12 year is you’re allowed to get two supplemental loans, right? So that means we bought it. We’re doing a light value add. We’re bumping rents actually quite a bit, 25%, which is not what we thought it was going to be.
Andrew Cushman:
It’s just the market’s gotten so hot. So we’re bumping rents. And then what we’re going to do or what we can do in a year or two is we can do a supplemental, pull some cash out. But then, with the 12 year, you have the option of a second supplemental, which means if you sell on assumption, anytime before year six, your buyer can not only assume your low rate mortgage, but they can get a supplemental to get the leverage back up to 75%. One of the challenges of selling on assumption is a lot of times, it makes people have to bring a ton of equity-
Devin Elder:
Right. [crosstalk 00:17:21].
Andrew Cushman:
… which lower the return, which means you get a lower sale price, right. But if they’re structuring the debt that way, we can wait all the way up until year six. And if interest rates are really high, they can assume our 3% rate and get levered back up to 75%. So we’re not going to get hit on the purchase price. And if for some reason in year three, four, five and six, the market is terrible for commercial real estate or apartments, we can ride it out six years and just cash flow it and pay down the mortgage. And I’m willing to bet and if we had to wait out 12 years, we’ll find a good exit in that timeframe.
Andrew Cushman:
So that’s how we structured the debt. And it was very intentionally done that way to say, “You know what? It’s really hard to predict what the debt markets and prices are going to be looking forward from this point in the cycle.” So let’s structure this so that almost no matter what happens, we’ve got a viable exit.
Devin Elder:
It’s really hard to argue with a fixed three something rate. I mean, lots of stuff can happen. Market’s up and down. And if you’ve got nice high rents and you’ve got fixed three and a half percent debt, it’s like lets you ride it out a lot. That’s a great floor to have for a project. And it’s not like you’re probably going to see rates going [crosstalk 00:18:50].
Andrew Cushman:
Yeah. We’ve all been saying for the last 10 years rates are going to keep going up. And they keep going the opposite direction. So, they could go down, but I’m not willing to bet on it.
Devin Elder:
Exactly. Exactly. That’s fantastic. What does the team look like today for kind of running your current portfolio? Is it third-party management, big team, inside, remote? Give us kind of the lay of the land there.
Andrew Cushman:
Yeah. We have a pretty small core team. One of our goals is to keep overhead low so that we don’t feel pressure to have to do a deal. And so we’ve got our first hire, which I recommend to anybody listening, as soon as you can do this, absolutely do it. And it doesn’t even have to be full-time. It can be part-time. Our first hire seven or eight years ago was an admin person. And now, she’s grown so far beyond that now and handles… She’s all around ninja, can just do just about anything.
Andrew Cushman:
She’s a core member of the team. And then about two, two and a half years ago, we brought on someone to help us with systems and just development and putting together the packages and market research and all that. And then, we also have an acquisitions person who is actually based in Atlanta, which is if you were to think of a wheel with a hub and spokes, Atlanta is the hub. So he actually lives in Atlanta. So he can run out to a property on a moment’s notice for either a tour or if something happens we need to go look.
Andrew Cushman:
And so that’s our core team. And then, of course, you’ve got your third party, your insurance people and lenders and all that. And then as far as property management goes, we’ve partnered with the same property management company now, since I think 2013.
Devin Elder:
Excellent.
Andrew Cushman:
Yeah. And so we’ve grown together. And it is third party, but it’s almost a bit of a hybrid model where we asked it managed very closely. We’re not involved in the day-to-day stuff of like, “Okay Grandma Sally in unit 93, her dog bit the kid next door.” We’re not involved in that, but we have very close relationships with the property manager and the maintenance crew. And we do weekly calls where we’re all on the call.
Andrew Cushman:
So our team, the manager, the maintenance people, the regional manager, so that every week, we’re doing a check-in to make sure that everyone knows the vision for the property, where we’re trying to go with it. And most importantly, what we can do to empower them to do that. All of our managers and maintenance people know Andrew’s job is to make their job as easy as possible so they can do it as effectively and inexpensively as possible and to hopefully enjoy what they’re doing. And that’s worked out really, really well. Us and our third-party management company really work more as partners as opposed to, okay, we’re going to hire you. Send us the report every month.
Devin Elder:
Yeah. You’ve really got to find that marriage. I tell people sometimes the bank is for sure your biggest partner until you close the deal. And then your property manager like, “They have to be good.” There’s not another option there. And so sometimes either have to kiss some frogs or go through a couple of management companies. What was your process? I mean, you guys have been with them for the better part of a decade with the same company. And that’s awesome. If you could find a third-party that works, that takes a whole lot of stuff off your team’s plate in terms of HR and P&L for the management company. You don’t have to worry about that stuff. How did you find them? And was it a long process of hiring and firing third party management companies you just get lucky? What did that look like?
Andrew Cushman:
We definitely took our time to try to find the right one in the first place. And again, we were very fortunate that it worked out that way. And so the process that we did, and this is the same process, if I was going to a new market today, this is exactly what I would do. As I was talking to brokers and looking at different properties all around, it was Georgia at the time, I’d look at a deal and say, “Hey, if you were buying this, who would you hire to manage it for you?” And I’d get their top two or three recommendations.
Andrew Cushman:
And I just kept doing that over and over again. Built up a list of 11 companies that were referred to me by the brokers. And, of course, the same two or three tended to keep coming up over and over, which is a good sign, right? So we took that list of 11. My wife actually went online and researched them all. And we eliminated half of them just by finding negative stuff online, like, “Oh, they’re being sued by their client, or all their properties look terrible.” You can just imagine what you’d find online about a property management company. So that cut it in half.
Andrew Cushman:
Then, I did phone interviews with the remaining ones. And then, I flew out and sat down and had dinner with the owners of the top two companies. And at that point, I felt like we had a clear first place and a good second place. And so, the first place was the one that we brought on. At the time, they had 3000 units under management, which we felt was good because they were big enough to have some scale but small enough that I’m having dinner with the owners of the company. And I mean, now they’ve grown. They’re at 26,000, but we’ve grown together.
Andrew Cushman:
And so, I can still call the owner of the company on her cell and she’ll answer. And we get amazing service. So that was the process. And I would say for anyone who’s looking for third-party management, you’re looking for somebody who specializes in what you do. So if you’re trying to acquire a bunch of 10 and 20 unit properties around Dallas, you want to find a management company that that’s their specialty. You don’t want to hire a management company that manages a 300 unit A class thing because, number one, they’re not going to care about the income on a 10 unit, but two, they’re just not going to know how to do it.
Andrew Cushman:
So that was part of that process. Once we got it down to that second half was making sure are they a good fit for what we’re doing? And are we a good fit for how they operate? Some property management companies, they want the owners to just go away. And I can understand that from their perspective, because a lot of owner’s just interfering cause problems, but we made it clear, like, “No, no, no.” We’re not going to do that. But we’re also not just going to disappear. So it was a process of elimination. And then making sure that it was more of a partner relationship as opposed to, “Oh, crud, we have a deal. We’ve got find it. We got to hire somebody.” We we went through that process before we had a deal.
Devin Elder:
I love it. That’s such a great story and such great actionable tips about finding a third-party management company. I had a third-party management company, a regional manager, tell me once while we’re onsite walk in this property, as I’m asking questions, he’s like, “Man, we got. You ought to be on beach drinking pina coladas. We got this.” So if you ever hear that from your management company, don’t use that management company.
Andrew Cushman:
Yeah. You’re right on that. That sounds like a red flag to me.
Devin Elder:
That’s a red flag. But I love the screening process, all that stuff. And these guys that use it now, I mean, they’re national, which it sounds like they’re national, which is important for you, guys, because you’re in some different markets. You’re West Coast. You’ve got deals in Florida, Georgia, what have you.
Andrew Cushman:
Yeah. Well, I live on the West Coast. We actually had 800 units in Texas. We actually have sold all of that at this point. They cover the exact same region that we currently like to invest in. So they’re Florida, Georgia, a little bit of Alabama and the Carolinas.
Devin Elder:
Perfect.
Andrew Cushman:
And so that’s our preferred area, and that’s their area. So they’re actually a regional management company. And they’ve actually made a very conscious decision to not grow too fast. And they’ve actually said, “No, we want to stick in this area and just be really good in this area,” as opposed to try to expand all over the country. So that was another thing we liked. It was like they were growth minded, but not growth at the expense of everything else.
Devin Elder:
I love it. There’s such a discipline involved with that. You have to grow. A company is not going to be static, but I’ve seen so many management companies, so many multi-family operators that have like a mentality of if we can, we should. Not to say it’s disastrous in every case, but I think it takes a certain type of discipline to, yes, we’re going to grow, but it’s going to be controlled and steady. And the quality of what we’re offering is not going to suffer, right?
Andrew Cushman:
Yup. Yeah, exactly right. Do deals because you should not, because you can.
Devin Elder:
Right, because the last bunch of years, you can always do a deal. It seems like anybody kind of put the capital together and closing a deal is just the very beginning of it. So you mentioned what markets they’re in, what markets you guys are in. You’ve grown the company from leaving a W2 to doing a challenging first deal to this multifamily firm that’s in multiple markets doing $50 million deals. What do you personally focus on today as kind of the highest and best use of your time? And what was the path like getting there? I’m sure you were doing all the stuff in the very beginning, you and your wife. And today, I’m sure it’s very different. What does today look like in terms of what’s most impactful for you to be doing?
Andrew Cushman:
Yeah. Then, I’d say looking back, that was probably one of my bigger mistakes was not bringing on a team earlier in the business and in the process. And it, probably more than likely, would have scaled a more. And like you said, in the beginning, yeah. My wife and I were every hat. Now, the benefit of that is when you do start bringing on team members to start taking some of that stuff off your plate, you understand what they’re doing, and you can guide them and direct because you’ve done it. You know what the results should look like. So, yeah. So now, what I try to focus on and I still get sucked into some stuff that everyone I’m like, “Oh, I just want to get this done.”
Andrew Cushman:
And I’m like, “I probably shouldn’t be doing this,” but something with assurance comes up or whatever. Now, as an investor, and again, I think this applies even down to if you’ve got two fourplexes and you’re looking at a third one, really the highest and best use of my time as an investor is building the relationships that lead to deals coming in, and then also building the relationships that leads to equity coming in because those are the two core pieces of the business that without either one, the business doesn’t exist.
Andrew Cushman:
So my top focus is broker relationships, help trying to build systems to find more deals. We’re actually doing some direct to owner outreach stuff now. And we just started a couple of months ago, but it’s getting some good traction. So it’s like help figuring out putting those pieces together is high value. And then again when talking with investors and going to seminars and just meeting people and also building the relationships with our onsite staff that run the properties and making sure that they’re well cared for. And then, of course, as the result, they take really good care of our property. So those are the high value things that I try to focus on in the business.
Devin Elder:
Yup. That’s great. I like how you framed it around deal acquisition and the capital. But instead of saying those two things, it’s like, “What are the relationships that are going to naturally result in those things” because it’s all through relationships. So I love that. I think that’s a tremendous focus. I want to ask you a couple of questions to kind of wrap up here. One is from the vantage point of somebody that maybe has a high W2 job, but they’re looking to go get into doing a deal and they’re new to that. What do you say to that person?
Andrew Cushman:
You mean someone who’s looking to go out and do their own deal?
Devin Elder:
Correct?
Andrew Cushman:
Yeah. Just be prepared for a long slog in the beginning. I mean this is an unfair business in that the longer you’re in it, the easier it gets. The hard part is getting started. So just once you’ve determined, like, “Yeah, you know what? I want to start investing. I want to get some properties,” just know that you’re going to have to have relentless persistence. But it is absolutely 100% worth doing.
Andrew Cushman:
And once you get good at it, you absolutely can. If it’s your goal, replace a six-figure W2 job investing in real estate. And there’s all kinds of paths to do it. I think, sometimes, some people call it the stack method where you’re like you buy a fourplex and you fixed up, you leverage that into an eight unit. And then, you turn that into a 12 and into a 25. You build your own portfolio on your. That’s one way.
Andrew Cushman:
Another way is to go partner with people and say, “Hey, I’ve got these skills. You’ve got these skills. We’re going to work together. And we’re going to do this a little bit faster.” And then, of course, you can go the syndication route, especially if you’re in a high income job, all your coworkers might be your first seven investors. So you can say, “Hey, I’m going to go buy this 10 unit. It’s going to be a $1.5 million. And you know what? You’re going to pull together the equity from yourself and your coworkers or whoever’s else in your network.” So, yeah, there’s a lot of ways that you can get started while you still have your W2 job.
Andrew Cushman:
I’m a big believer in going to whatever market makes the most sense for returns. But if you’re buying your own deals while still working a job, if you can make it work in your own market, in your backyard, that will make your life a little bit easier. And the good news is for I’m guessing probably most of the people listening today are in Texas. And it’s hard to find a terrible market in Texas. So if you’re in San Antonio or Dallas or Fort worth or Austin, or the right parts of Houston, the good news is you’re already in the right spots.
Devin Elder:
Right. I love it. So that’s such good, actionable insight there. So the same kind of question, but from the framework of somebody that has a good W2 job, has no desire to go do what you do, but maybe looking to place a hundred capital in a deal. And they don’t know where to start with operators and CrowdStreet and meeting sponsors, if you’re just getting into this, how do you find the sponsor to park some capital with?
Andrew Cushman:
I’d say the best way is word of mouth. If you’re hearing this, you’re listening to Devin. I mean, Devin, I don’t know how many years we’ve known each other, but I’ve heard nothing but good stuff about the deals you do.
Devin Elder:
Thank you.
Andrew Cushman:
And so you’re an option. And then, obviously, you know other sponsors, right? So I’ve had investors who invest with me say, “Hey, I want to diversify. What other sponsors would you recommend I invest with?” And better believe I’m going to make sure I only give the best recommendation that I can.
Devin Elder:
100%.
Andrew Cushman:
Yeah. I would say find one good one and then say, “Hey, who else in that does what you do, do you also respect and recommend I talk to?” And a good sponsor will be willing to do that. And they’re not going to be afraid, “Oh, no, no, no. I’m going to lose your investment,” anything like that. So again, the entire business almost no matter what side of it you’re on really comes down to relationships.
Andrew Cushman:
And again, if you’re starting from scratch, find one good person either by listening to podcasts, by going to meetups investment clubs. I mean, you can even go to the places like BiggerPockets and all that, and get some referrals, get to know them and just know that especially today you see lots of sexy-looking proformas and investment packages. It’s all about the operator.
Devin Elder:
Right. They all look good, right?
Andrew Cushman:
Yeah. It all comes down to the operator. A great operator can take a crappy property and do a good job with it, but a bad operator can turn the most amazing deal into a nightmare. So it’s all about the operator. So again, referrals and relationships.
Devin Elder:
I love it. I love it. Such actionable content today and a great story. Congratulations on all you, guys’ success. If somebody wants to connect with you, get into your universe. Andrew, what’s a good avenue for that?
Andrew Cushman:
Yeah. I’m pretty easy to find on all those socials, LinkedIn, and all of that. Probably the best way to truly connect is just go to our website. If you Google Vantage Point Acquisitions, you should be the top result, but the website it’s vpacq.com. And there’s a handful of buttons on there. Just out the Contact Us form and come to our inbox. We have a mastermind for people who are already doing deals and looking to scale. There’s information about that on there. So yeah, pretty much. And anything you’d want to find out or get to know, the website is probably the best way to do that.
Devin Elder:
Excellent. Well, we’ll link to that in the show notes. You can click right through from the podcast. Andrew Cushman, thank you. This is great. Thank you for joining us. I really enjoyed it.
Andrew Cushman:
Yeah. It was fun catching up with you, man. I enjoyed it.
Devin Elder:
Awesome. All right. Well, take care. We’ll catch up soon.
Andrew Cushman:
All right. Take care, Devin. Bye.