Devin (00:00.75)
Elijah, hey, welcome to the show. How are you, sir?

Elijah Brown | GoldHawk Capital (00:03.189)
I'm Will, thanks for having me on Devon, it's a pleasure to be here.

Devin (00:06.67)
Yeah, I look forward to diving in and talking shop here on real estate and lots of other things. But just by way of introduction here, we'd love to just have you introduce yourself to the audience, your background. And I always like to hear how people got, what their on -ramp was to this real estate game.

Elijah Brown | GoldHawk Capital (00:24.917)
Sure thing. I started off in college actually. I partnered with my best friend and my cousin getting in on a single family house. It was just a really basic rental. It was like $150 ,000 property and we put $30 ,000 down and we ended up doing that a number of times. And after about four single families, a mentor told me I should jump into multifamily for a number of different reasons.

ended up buying a sixplex and then a fiveplex. Meanwhile, around this time, I ended up getting a job at a real estate company right out of school. So I spent four years there learning the ropes and how to underwrite deals and conduct asset management and pitch opportunities and stuff like that. And, but I was also growing my multifamily portfolio outside of work. And so at some point,

there was an inflection point in my career and I made the decision to just focus on my portfolio full time. A couple of years ago, we had the opportunity to sell a bunch of our assets at the top of the market and that was great and after doing that, we realized that being an operator is really difficult and not a ton of fun for everybody. It was a lot of headaches for us and so we decided to just focus on

what we're best at and what we enjoy the most, which was essentially selecting great deals to invest in. So due diligence and passive investing. And so we focused on just selecting great deals and then raising capital for those deals as a way to make fees as well. And so we've been focused on building out our pipeline of operators that we think are a decent fit for our strategy. And then,

analyzing their deals and matching them up with investors. So that's what we're focused on now. We do both a fund to funds model where we syndicate special purpose entities for the purpose of writing a check to these sponsors, but then we also do special placement as well for larger checks.

Devin (02:44.622)
Yeah, yeah, I love it. How instrumental was that? I believe it was a REIT that you were employed by, right? And how long was that portion of your career and how important has that been for what you're doing today?

Elijah Brown | GoldHawk Capital (02:57.461)
That was four years, started off as just an analyst doing asset management with senior living facilities and then ended up getting promoted up into the manager role within medical office. And so did a lot there, really learned how to underwrite cash flows, build Excel models, present to upper level executives and really how to conduct myself in a professional environment.

I highly recommend anyone who's looking to get into the real estate game to go find a job at like either a private equity fund or a REIT or whatever company is doing, you know, what you want to do so that you can learn everything that you can. So it was, it was instrumental in what I'm doing now.

Devin (03:45.71)
Yeah, I can't underscore that enough. If I had it to do over, I would have started as an analyst. We're going to be hiring for an analyst soon with one of our sister companies. And we've just seen the path that that role, you know, lets you take on kind of come in with minimal skill set or maybe a college degree. And, and there's just no substitute for just chewing through a million deals. And you get to do it on somebody else's dime. You're getting paid. You know, my corporate career was, was in sales and marketing and not real estate.

estate at all, IT and, and med device. And, so I was pretty handy with a spreadsheet, but when I came to real estate in my thirties, this was like a multifamily underwriting model was, was brand new. And I just went through the reps myself on my own time, moonlighting, but, what a, what a nice advantage to be able to do it kind of nine to five, Monday through Friday for a couple of years. And just like, there's just no substance. Yeah. You know, and we coach people too. And it's, it's just like,

Elijah Brown | GoldHawk Capital (04:38.997)
Yeah, get paid to learn, right? Yeah.

Devin (04:45.134)
Man, I can't shortcut this for you. You gotta underwrite like a thousand deals. I just, I just can't. I don't know. I don't know what else to say. We can show you everything, but you just have to go through the reps to.

Elijah Brown | GoldHawk Capital (04:54.997)
You really don't understand how these deals work and what is conservative or not until you're at the point where you can actually build your own underwriting model. You need to know every little component of it, how the cash flows in and out on a monthly basis, all the sources and uses and the JV waterfalls, everything, or you really don't know what you're doing. That's why limited partners and other investors,

Devin (05:05.518)
Yeah.

Elijah Brown | GoldHawk Capital (05:22.933)
literally pay me to do that work for them because I'm the one going out doing the analyst work, doing all the due diligence and they're trusting that I am mitigating the risks involved in that deal. So it's like you should understand what's going on but if you don't, if you don't have the time at least work with someone who does understand that stuff like a fund manager.

Devin (05:46.03)
Yeah, yeah, 100%. I like what you said too about this point where you guys decided to specialize. I think there's a lot of hats you can wear in commercial real estate and multifamily. And we kind of tell people to pay attention to what you enjoy doing or where your strengths are. You can go do it. I've run deals by myself and I've been everything from the analyst, the asset manager to...

investor relations and everything. At some point that doesn't scale. But it's very efficient, especially the capital model, to be able to find operators, build those relationships, and then really just go a mile deep on kind of one thing. And I think that's a very attractive business model for sure.

Elijah Brown | GoldHawk Capital (06:34.453)
Yeah, so there's like three like main like, like components. It's the, the person who brings the deal. Usually this is like a broker. And then there's the person who operates the deals. This is the operator, whoever's doing the asset management and arranging everything. And then there's the guy who brings the capital to get the deal done. And from my experience, the guy who's bringing the capital into the deal or arranging the capital,

makes the most amount of money for the amount of time that is spent doing it. A lot of the time is spent building relationships over the years to the point where you can send one email out and make $100 ,000 just because someone's going to invest $10 million into a deal. And so that is the best like return on my time that I could possibly get. And so that's what I'm focused on.

Devin (07:25.294)
Yeah, I like to tell people there's a spectrum, you know, and imagine a line and on one side is, is labor. And on the other side is capital. And the closer you get on the spectrum to capital, the more, the more money you're going to make. That's just, that's just the way it goes. And it just requires a completely different skills. Yeah. Yeah. Completely different skill set. And it's a business model that is cumulative. So the work you're doing in 2024 will

Elijah Brown | GoldHawk Capital (07:38.997)
the more time you get back.

Devin (07:52.27)
payoff in 2026 and then the relationships are cumulative and then the it's very portable. I mean we were talking to Green Room before I'm like hey where you guys based you're like I'm in Hawaii okay all right you're probably not you know buying deals in your backyard yep.

Elijah Brown | GoldHawk Capital (08:05.205)
That's right. Yeah. I don't need to be boots on the ground. I'm literally paying experts to do that for me.

Devin (08:12.526)
Right, right. Yeah, I love it. How long have you been out in Hawaii? Has that been a while? What led to that move?

Elijah Brown | GoldHawk Capital (08:20.437)
I think you froze for a bit.

Devin (08:24.494)
I'm sorry, cut out there for a second. Can you repeat that? Yeah.

Elijah Brown | GoldHawk Capital (08:25.557)
There you are.

Devin (08:30.542)
So when did you guys move out to Hawaii? What did that look like?

Elijah Brown | GoldHawk Capital (08:34.581)
My girlfriend grew up here, so we had been coming out here to visit her family for the last seven years or so. And we made a decision out of college. She graduated a few years behind me. And we spent a couple years after that building out a Mercedes Sprinter van and living in it full time for a year as we traveled the US, Mexico, and had a great time. We ended up selling the van.

in October of 2023 and we moved to Hawaii and now we are living here where she grew up and I have no complaints other than everything is very expensive here. It's extremely expensive but it's everything else is pretty great.

Devin (09:20.782)
Yeah, certainly trade -offs, certainly trade -offs. Yeah, what a fantastic business to be able to run from somewhere like that. You've got a unique perspective on operators. I think a lot of operators are raising their own capital. That's what we do. We've got our own investors. Other operators are partnering to some degree with folks on capital. But if you're an operator, to your point earlier, this is full -time around the clock.

knows the grindstone, you know, hard work, property management, asset management on site. You might not be looking up and talking to a lot of operators, but from your perspective, you are talking to a lot of operators, you're vetting operators, you're doing deals, so you got a vantage point where you're seeing how different operators put together deals and kind of run things full cycle. So what are some things you've seen that I guess are the hallmark of a...

Elijah Brown | GoldHawk Capital (09:56.597)
labor intensive.

Devin (10:15.118)
of a good operator that would get your attention to possibly go further on.

Elijah Brown | GoldHawk Capital (10:21.429)
It starts off with their track record. So my general rule of thumb is I won't even look at opportunities until that sponsor or the operator has at least five full cycle deals where they hit or exceeded their projections. But then beyond that, you know, I want to take a look at their underwriting and understand how they think about deals. What is their size in that particular market? Their economies of scale there? You know, do they?

understand what they're doing. Are they, you know, are they able to underwrite the deal conservatively and mitigate risks? Are they vertically integrated with their property management and their construction arms? These are all things that, you know, I need to get comfortable with with the sponsors before I'll even start looking at their deals really. So it starts off, you know, one to two years before I invest in a deal where I'm really just trying to make an initial

relationship with these operators. I'll get on the phone with them, get on Zoom, maybe meet them in person, review their company pitch deck, their experience, their track record, ask them about their buy box, what they're looking to do. And if everything makes sense and they have a track record and they're doing what we invest in, we'll continue the conversation and we'll ask them to start sending us their deals for an early look. And typically we're not going to invest in the very first one.

I mean, we get 50 deals a month sent to us and then we use one deal like every other month to participate in. And so it takes a little while, but if we get to a point where we really trust the sponsor and their deals are solid and the timing lines up in terms of we're ready to line up our next deal, then we will go for it. We'll make an investment. We'll...

Devin (11:52.398)
true.

Elijah Brown | GoldHawk Capital (12:14.965)
range capital for that deal and then we'll probably do like three or four more that year with the same sponsor.

Devin (12:20.686)
Got it. Yeah. So how do you guys like to do? Do you like to do one deal at a time? And I think you said about half a dozen deals a year is kind of a target for you.

Elijah Brown | GoldHawk Capital (12:28.917)
Yeah, so the goal is really eight to 10 deals. I would love to be doing one a month. I don't have the infrastructure and systems and network built out for that yet. Right now it's just me and a virtual assistant and an analyst. And then I also have a consultant who helps out with investor relations. So it's like a team of four or five and it's a really lean operation. So we only have capacity right now to do like six, maybe eight deals.

Devin (12:40.046)
true.

Devin (12:53.838)
Yep.

Elijah Brown | GoldHawk Capital (12:58.101)
year and so we have to be extremely selective with what we choose to get involved in.

Devin (13:03.31)
Is it all multifamily?

Elijah Brown | GoldHawk Capital (13:05.333)
Yeah, so we've been super focused and niche on multifamily value add deals in the Sunbelt region. We started off with just focusing on like one market, one asset class, one unit size, one strategy, one vintage, like one very, very tight buy box to become experts in that market. And slowly over the years, we've been expanding that out. So.

Devin (13:26.19)
Sure.

Elijah Brown | GoldHawk Capital (13:32.117)
Like last year we added Texas. We were only focused on Arizona for like three years. And then we added Texas. And this year we're adding other conservative Sunbelt states like Florida, Georgia, and the Carolinas. And you know, in the future we'll probably expand that to you know, other states in America. And perhaps an additional asset class and an additional strategy too. So we've been focused on the value add.

Devin (13:37.486)
Thank you.

Elijah Brown | GoldHawk Capital (14:00.661)
We've done a few like deals that are between core plus and value add so a little bit lower on Rick's risk spectrum We might be interested in doing some opportunistic things if we can really get in at a decent basis with a solid operator and we might be interested in doing other asset classes such as mobile home parks or other types of residential real estate

Devin (14:24.782)
Yeah, it's really nice to be able to just tap into the operator that's got 15 years in that new asset class rather than have to go build that yourself. Huge advantage there for your lean firm. What's this year look like so far? We're talking in May of 2024. We want to buy, you know, $1 ,000 a year. I'd like to buy a deal a quarter multi -family. We do some different asset classes too. So we stay busy all the time, but multi, you know, if I could buy a 1980s, $250,

Elijah Brown | GoldHawk Capital (14:33.236)
Yeah, definitely. you froze again.

Devin (14:54.688)
in San Antonio, Texas, won a quarter. That's a cadence. We closed one in Q1, which was kind of a hangover from Q4. We're always looking, but you know, nothing, nothing in our contract right now. What's, what's this year look like for you guys so far?

Elijah Brown | GoldHawk Capital (15:10.677)
Yeah, so we closed one deal and we're almost closing on our second deal. So it will have been really two deals in the first half, which is a lot less than we wanted to. We had been wrapping up a few refinances on our actively managed portfolio that were essentially started like in the second quarter of last year.

And so we, if you count those as deals that we've also closed, it's more like we've done four deals so far this year. but then also, you know, we have gotten really, really picky about the deals we're getting invested in, especially right now with what's going on in the market. Like every deal that comes across my desk, I probably would have been excited about two or three years ago. The problem is, is we're in 2024 right now and there's no shortage of like,

Devin (16:00.686)
Yep.

Elijah Brown | GoldHawk Capital (16:06.933)
like really distressed opportunities here. And so we have to be very judicious about what we choose to get into and only invest in the best ones. And so that's just part of it. I think we'll be looking to do like four more deals this year after we close the one we're working on right now. So that'll be, you know, six fund to fund style deals and then with those two refinances as well. So just about eight.

Devin (16:37.87)
Yeah, yeah, I mean, look, it's slower, it's harder, but that's fine. I mean, this is what the market's given us right now. I want to get a little bit into the nitty gritty, if you don't mind, on kind of, you know, back office systems, everything. I remember when I was a solopreneur starting out, I was, it was agonizing, like, which CRM, which investor software, which this or that. Now, you know, we've got 60 employees. There's kind of a department head to kind of run most of that for us. But starting out, it's, and we coach people that are like agonizing over,

over what web platform to use. So what are some tech tools or systems that you guys.

Elijah Brown | GoldHawk Capital (17:11.381)
You froze again, so I can't hear you or see you.

Elijah Brown | GoldHawk Capital (17:18.121)
there you go, you just came back.

Devin (17:18.734)
So what are some tech tools or systems that you guys kind of favorite at this point? You run and lean, you're remote, you're distributed, all really cool things that you can do with technology. What are some favorites there for y 'all?

Elijah Brown | GoldHawk Capital (17:36.181)
We have a lot of those. So our primary CRM system is ActiveCampaign. We integrate a bunch of other different applications with that, such as like a text message marketing thing that integrates. We use Zapier for automations that we can't just do natively within ActiveCampaign. We've got a bunch of other tools, obviously, like the Zooms and the Calendly's and...

Devin (17:39.822)
figured.

Okay.

Devin (17:51.598)
Cool.

Elijah Brown | GoldHawk Capital (18:04.949)
you know, chat GPTs and stuff like that. Another thing we're doing, so a lot of the deals that we do require that we have proof of a substantive relationship with people we pitch deals to. And so we actually use it like an AI that joins all of our meetings and transcribes the meeting into written text and then uploads that text to the contacts note within our CRM so that we have that proof.

but then we're also doing like a ton of automations and campaigns within our CRM, that essentially like tags and scores all the leads and sends them different emails based on different criteria. And, you know, gives us an idea of like, who's most likely to invest in the next deal. So we can actually give them a phone call. so we're, we're using a lot of stuff like that. It's really tough kind of as the, as the small like startup.

business, it feels like we're growing faster than we can afford to grow because the next step is like, great, I need to hire someone who costs 150 ,000 a year. But like, I'm not bringing enough cashflow on a monthly basis to really support that paycheck. And so you're in a position where either you need to figure out how to automate it with technology, or you need to not grow as fast as you want, or the owner needs to be working 100.

20 hours a week, which is horrible, and it's a burnout. So it's kind of a tough place to be in, but that's what we're working on. And outsourcing to virtual assistants in other countries is really helpful. Utilizing new technologies and automations is helpful. And then also just realizing that for a period of time, especially with the fund -to -funds model,

you're going to be putting money into the business or not necessarily making large chunks of capital for many years until those deals start going full cycle because a lot of the compensation comes on the back.

Elijah Brown | GoldHawk Capital (20:40.757)
We use our own investor portal. We use invest next. And so anybody who's investing through us will create an account on that portal and subscribe to the deal through that portal. We will then write a check for the sponsor. Maybe it's anywhere between, you know, one and $5 million. We'll write that check to the sponsor and then we'll get an account with the sponsor's portal. And so that's usually how that works. If we're going to arrange a much larger,

check and for special terms, JV, CoGP, preferred equity, rescue capital type of stuff, that investor will just go directly to the operator and probably have an account within the operator's portal and we will be compensated separately through the operator. But that's a more complex situation. Yeah, we use Invest Next. The portal is extremely helpful, but that's part of our job as like the

the intermediaries, the fund managers, is to manage our own investors. So that's part of what we do.

Elijah Brown | GoldHawk Capital (21:50.805)
Yeah, we switched from syndication pro to invest next.

Elijah Brown | GoldHawk Capital (22:04.565)
Invest Next is great with the K1s. All you have to do is upload a zip file and it matches it to everybody's profile and then saves it and sends them an email. You don't have to do anything. Before I was going into every single PDF file, password protecting it and then emailing it out to the actual investor.

Elijah Brown | GoldHawk Capital (22:51.605)
Yeah. Brutal.

Elijah Brown | GoldHawk Capital (23:29.237)
Yeah, definitely. So the goal really is to become a... There's two things really. The first one is to become a discretionary blind fund of funds, like a traditional fund where we have, you know, a hundred million or a billion dollars in commitments from investors. And then we have the discretionary power to go out and invest that money into deals that we see fit and maintain a portfolio.

So that's one goal. And in that situation, I don't have to go raising capital every single time I have a new deal. I can just make a decision to deploy funds and wire the funds the next day. I don't need to go through a whole process of raising money, which is extremely time intensive and expensive. The second thing is like boutique capital markets advisory. So for the much...

larger investors, family offices and institutions that are looking to get into these great deals. I have a lot of relationships with really strong operators and get a ton of deal flow and sometimes they need JV, CoGP, or preferred equity checks. These are the much larger checks and I can arrange solutions for those operators by calling on my list of higher check writers. And so,

That is also like in terms of like the one -off stuff that I would be interested in doing. So really two things, the fund and then also capital markets advisory with much larger checks.

Elijah Brown | GoldHawk Capital (25:40.405)
Yeah. How much more difficult was raising capital for that than for a syndication deal? Because obviously it's a blind investment.

Elijah Brown | GoldHawk Capital (26:27.221)
Yep, you don't get the FOMO.

Elijah Brown | GoldHawk Capital (27:05.077)
Yep. That's important. Always be selling something.

Elijah Brown | GoldHawk Capital (27:20.021)
So does your fund also take a position in the syndication deals?

Elijah Brown | GoldHawk Capital (28:09.973)
It allows you to like really focus on the strategy and the deals and because you're not constantly picking up the phone trying to raise money.

Elijah Brown | GoldHawk Capital (28:40.821)
Short answer is that I'm not sane.

Elijah Brown | GoldHawk Capital (28:46.037)
It's a, if you have the curse of the entrepreneur, you know, the brain that can't rest, you can't even go on vacation. Like you can't go, you can't go to like a resort and lay at the pool and have a Mai Tai and not be thinking about deals. So there is no rest. There's no sanity in it. It's, it's very irrational to do it. And it's, it's kind of a curse. Like I wish I didn't have to do it or I wish I didn't have the drive.

as much to do it. Like it would be great if I was content just being like a 40 hour work week employee, you know, just working for someone else. That would be awesome if I had that life. But I have such a desire and like ingrained like motivation to do something really great. And I am constantly thinking about that. The ways I stay sane, you know.

Exercise we live at a park. We live across from the beach. It's a five -minute walk to the beach We try to get outdoors. We do a lot of traveling as I mentioned We lived in a Sprinter van and will be heading to Thailand for six months in November But we do we do other things we go out to eat at cool restaurants And go to concerts and stuff like that. It's a it's you know, I'm always on the clock always answering the phone It is the life of the business owner

Elijah Brown | GoldHawk Capital (30:18.101)
Yeah.

Elijah Brown | GoldHawk Capital (30:34.837)
It was funny, Devon, like we're the ones who are like dumb enough to do it. If you're really smart and you like come from like a like a like a well off family and usually, you know, you go to one of those top schools and then you get a job on Wall Street or something prestigious and you're making half a million dollars a year in a prestigious career and there's no way that you're going to leave that to go do something that might make you fail or go bankrupt. It's really the ones who are like not.

not in a position or smart enough to do that, like us dumb folk who go out and do this stuff and take the risks and do all the irrational stuff. We're not the Ivy League prestigious Wall Street type. Sometimes we are.

Elijah Brown | GoldHawk Capital (31:28.085)
you froze again.

Elijah Brown | GoldHawk Capital (31:32.469)
There you are. Yep, there you are.

Elijah Brown | GoldHawk Capital (31:52.405)
I think you learn it in childhood and early adulthood. It's a consequence of different things that happen throughout your life that leave impressions or that give you traumatic experiences that push you in a certain direction.

Elijah Brown | GoldHawk Capital (32:29.013)
Yeah.

Elijah Brown | GoldHawk Capital (32:37.045)
Man so personally given given the wars and the inflation and everything that's going on I don't think rates will be coming down this year. In fact, I think they might actually go up towards the end of the year if you ask Unsophisticated investors and less experienced sponsor groups what's going on? And and if you go to those conferences, they think that we've been through the worst and that it's all upside from here

If you ask like family office institutions, more sophisticated investors and go to those types of conferences, we're standing over a cliff about to fall off the edge and it's disaster ahead. So the country right now is like really, really divided in terms of who thinks what and everybody has a different opinion on what's going to happen with the market. We take the pessimistic view. We think that...

rates are probably going to go up, that there might be some more headwinds or there might be some more trouble ahead. And we are prepared to look for that distress and take advantage of it by buying properties at a low basis. So that's just what we're looking at. We think that's a great thing for us because we're on offense now. We spent 10 months playing defense trying to save our properties from defaulting on the loans last year by getting refinances done.

We got those done, we saved those, we finished playing defense and now we're just in buying mode. So we're excited for it.

Elijah Brown | GoldHawk Capital (34:30.037)
Sure. Check out my website, goldhawk .us and we've got a lot of awesome resources for both limited partners and sponsors as well. For the passive investors though, if you want to know the things I care most about in a deal, like the top metrics that I look for, just go to goldhawk .us slash ebook and you can download it there.

That should give you a good idea on what you should be looking for to understand risk in a multifamily deal. I've got a whole bunch of other resources there on the website as well on the resources page. So feel free to check any of those out. They're all free. And if you have any questions, find me on LinkedIn and shoot me a message.

Elijah Brown | GoldHawk Capital (35:30.453)
Thanks so much, Devin. Appreciate it.