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Global Investors Podcast
GI42: Becoming An Active Real Estate Entrepreneur with Jens Nielsen
April 8, 2020
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GI42: Becoming An Active Real Estate Entrepreneur with Jens Nielsen

Jens has been investing in multifamily real estate for the last 4 years. He currently owns 74 units in New Mexico and Colorado and he is a General Partner in over 650 syndicated units around the country

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Announcer
Welcome to the Global Investors Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market. Host, Charles Carillo, combined decades of real estate investing experience with a professional background in international banking to interview experts in all areas of US real estate investing. Now here’s your host, Charles Carillo.

Charles
Welcome to another episode of the Global Investors Podcast. I’m your host Charles Carillo. Today, we have Jens Nielson. Jens has been investing in multifamily real estate for the last four years. He’s originally from Denmark and currently owns 74 units in New Mexico, Colorado, and as a general partner in over 650 units around the US. He passively invested 14 syndications, spinning over 800 apartments 2000 mobile home lots and 6000 storage units. Jens has a passion for coaching new investors to enable their success through strategy, accountability and personal growth. So thanks for being on the show Jens.

Jens
Thanks, Charles. I appreciate it.

Charles
Yeah, no, it’s great to have you here. I briefly touched on your background, but can you explain a little bit more about yourself prior to starting to invest in real estate?

Jens
Absolutely. So as people can probably hear a little bit of an accent. And my name is, you know, a little foreign. So I was actually born in Denmark. And I moved to actually I moved to London, England in the early 90s. And then to the US in 1996. I’ve been here, you know, 24 years so I’ve lifted about half my life now actually. So it’s kind of interesting. And I started out on the east coast in the IT field, IT telecommunication and you know, got my degree did we supposed to do you know, we’re full time, save a new 401k and then slowly move west to some job opportunities first from Maryland to New Mexico, and then to Colorado where I’m located right now and still, you know, in the IT kind of moved up in the ranks to manage it is awesome, make a lot of money saving my 401k until, you know, a couple of those big dips in the market that we saw in 2000 2008. And now again here in 2020. And, you know, luckily, much more prepared this time because of some of those things I had learned along the way to get into that a little bit.

Charles
Yeah, so why did you choose real estate as your investment field call?

Jens
Basically, because, you know, I felt like investing all your money in the stock market, you have no control, right? You know, something global happens that causes massive shifts and ups and downs, you know, I didn’t do anything to cause this and now I’m suffering from it. I felt like I wanted to create something that could generate, you know, wealth and cash flow for me and my family and anything I looked at look like another job or investing that I have control over. So I felt like real estate has so many opportunities and so many benefits that other investment vehicles don’t have. And that’s why I settled on that after a lot of research.

Charles
Yeah, for sure. It’s got a number of different elements to it that you can’t replicate in other investment vehicles, that’s for sure.

Jens
Absolutely.

Charles
So you’ve invested, I mean, we have investors that come on, and they’re targeted in one or two classes and you’ve invested in a number of different real estate classes, and similar investments within the whole realm of real estate. Can you kind of dig into the span of your investments? I know I want to put through some of them in in the introduction, but can you kind of go through them and dig into them of what they are? Because some of them aren’t traditional routes we would hear for investing passively or actively.

Jens
Yes, I really took like a two pronged pros, right. I did active investing started out buying smaller multi families and have now scaled up to larger syndications that’s been to the active stuff has been multifamily and a small mobile home park thrown in there which we can we can talk about but then on the passive side as I okay, I didn’t want to put everything into multifamily because obviously there is a risk there. So I felt like I want to do act of being passive as well through my retirement accounts and so forth our taxable account, but I wanted to also diversify into some, some other vehicles so I did some mobile home park funds, I did storage unit funds that were by no storage units, facilities around the country and pull the money together, the investors money together. I also did some note investing, you know, distressed mortgage notes, private lending all kinds of secured by real estate, but this is slightly different segments and they they probably don’t correlate 100% to each other, I felt that was a way to offset my risk a little bit in that way. So I’ve even have I helped my wife invest in a retirement, they’re converting our hotel into like senior living and so fun, right? So kind of just seeing what I knew would probably work well as an investment vehicle, but not something I knew enough about to go and do myself.

Charles
Right. When you were investing into notes passively. Was that into single family homes? Was that into commercial or?

Jens
That was distressed mortgages notes in the single family. Yeah, secondary mortgages and, you know, they’ll go out and buy large pool of mortgages and get the reef performing and then and then pay a good return to the investors in those.

Charles
Yeah, I’ve heard about that before. I was speaking to someone at a conference while it’s very interesting, completely different. You don’t see too many funds like that where you see for syndications or funds for muiti family’s self storage or mobile homes, which is kind of like the main thing that you see people bundling together and bringing investors for. Yeah, interesting. So can you explain the process of changing your mindset from being an employee? And then starting to think like an entrepreneur or a real estate investor? How did that change? What did you have to change in yourself?

Jens
Yeah, that’s right. Because, you know, we can’t, you can’t become the person we can’t get to where we want to be by being the same president than before, right? So you got to really change the mindset. So it was a lot around, you know, basically start studying a lot of material, you know, listen to podcasts, reading books, but also surrounding myself with other people that have been there before. You know, so start going to events to meetups to conferences, get some education and coaching and really just starting to see, okay, I see somebody they’ve gotten to a level that I aspire to be at and said, Okay, what the day do right, learn from them. And also making sure you don’t just rely on other people to give you that job. So okay, how can I build this? How can I take responsibility and accountability and describe buildings? Right? So, you know, initially I when I bought some smaller properties, I would kind of just leave it to my property manager to take care of everything I realized, okay, I’m relying on him to manage my portfolio. Yes, that’s his job, but I need to stay on top of it. Right. So just getting that idea of really staying on top of things, you know, creating that accountability around the people you work with, and having a routine I get up early every morning I work on my goals, I set goals. I do some journaling. So just really does that developing myself as as that person so it’s not it takes time and it’s not a you know, one specific path you can follow but it’s feel like being very goal oriented, and making sure that you work to achieve them yourself.

Charles
Yeah, definitely. What is, you mentioned here quickly, your first couple investments you got involved with and how did you do that? Because I kind of want to transition to you putting together your team as well.

Jens
Yeah, so I started out, you know, like I think a lot of investors they start looking at single family because they feel uncomfortable there. Luckily I actually, I say, never asked invested in single family because I was like, I can never scale this I got my one hand one there and as I never get to be because as soon as I decided to multifamily path, like okay, 5-7 years, I want to be out of my full time job. I’m like, Oh my god, I gotta buy 100 most single family homes to do this. So I started actually, you know, I started finding people that are at that level that I want to be at. So I met up with some people that knew my local community and say, Hey, you know, you’ve done this, what should I do? Well, go buy some multifamily here, go to some in southwestern Colorado, he said, go to Alberta. Coconut Mexico, it’s a closest largest city to where I live, go down there, meet up with this gentleman, this broker and then basically, he can help you find some deals, which I then did. But in six months, we bought two, four plexes and 11 units. We have 19 units in six months from getting started. So that was all in our own accountant, us be me and my wife. I mean, this is us plus my property manager. I did all that.

Charles
You were direct mailing those, is that correct?

Jens
The first khaki came later. The first ones were just straight through a broker. Just found through a broker. We did do. We did close in a 16 unit in May of 2019. That was through direct mail. So you have done that as well.

Charles
Interesting. So you had to put together a team here when you’re starting. Obviously, you have a full time job. What were the first team members you brought on and what did you kind of take off your plate so that you could focus more on the, like you were saying the acquisition and also on the asset management, which is kind of managing your property manager?

Jens
Yeah. So the first, you know, again, when we started buying smaller properties, the first team member was certainly the broker. And then the property manager, in this case is the same person. So he’s a broker and I was profit, man. So that helped a lot, right? Because I realized there’s no way I can manage it remotely. So you know, I work on the business instead of in the business, but a lot of us have heard about it. So that was the first team member, you know, and they actually do love the rehab. So it was kind of one stop shopping. It may have made me a little bit lazy too, because I didn’t go out and shop around for funds of other contractors and just like, Hey, you guys, just go ahead and do it. You know, for better or worse. You know, honestly, every company has some challenges. So along the way, I’ve learned some things I’ve gotten much more proactive in managing them and make sure we, you know, raising rents, renewing, leases, going in and doing heavy rehab if the units are kind of tired and stuff, but those are definitely the first team members, no question asked.

Charles
So about investing remotely, about half of our listeners are based outside the United States, how does an investor become comfortable investing in a different part of their country or in a different part of the world?

Jens
Yeah, and it definitely it is a challenge, right. So I think the first thing to think about is just study the market. So if there’s another part of a country, you know, even we live in a big country, so it’s tough to figure out to, you know, if you’re gonna invest in the upper Midwest, what’s driving the economy there, but we have so much data available to us like census data, economic data, so I typically look at a market and say okay, is a big enough for me to for it to make sense and I want to lose, you know, 200,000 to 300,000 people and preferably larger but you know, decent sized metro area and then I look at what’s the unemployment trends? What is you know what is happening with companies are they moving in or out is there one very large employer or is there you know a mix of different employers. For example, I was looking at a deal last week in southeast of Mexico and it looked really good then I realized so dependent on oil and gas and I just oil and gases I mean oil has been dropping significantly reason as a man there’s too much risk in one asset or one one part of the economy there. So make sure the there’s a diverse job base there. You know, what’s taxes like? What are tenant landlord laws and stuff like that. So in it takes some research, so you can go and do all that research itself. The other thing is you go on look at somebody who’s already done it if there isn’t in a proven operator who has been in the market and they’ve, they have had several deals and they’ve met their performance stuff, well, maybe you can trust that they know that doing and they’ve chosen market. That makes sense. Right? So those are kind of you can do it yourself or you can piggyback on somebody who’s ready to be successful there.

Charles
Right. Right. And yeah, with the the United States so big, and there’s so many different pockets of I mean, of the economy of, like you said, the jobs, which is a huge thing right now with what’s going on. Because if you have an apartment complex, I know we’ve been on phone calls and conference calls with properties we have and figuring out, you know, risk integration and figuring out exactly where your, your tenants are working. And if they’re working in a week or two weeks, or you know what I mean? So that’s even more prevalent, more important now than it than it’s ever been. But when you’re when you’re finding new deals that you’re syndicating right there aren’t in your backyard. What is your role in your team? Is it finding the deals, finding the deals, managing the asset management, you know , what kind of parts of it do you handle?

Jens
Yeah. So as we started moving into the syndication realm, being as I have a full time job, so I can’t travel every week to go and look at properties. But also my background being an IT, I’m very organized and I’m very, like, systematic around things. So I help I know how to underwrite so you know, I do a lot of the underwriting, you know, making sure the numbers make sense. So, I spend time on the writing. I do go on site visits, because if I’m going to offer any deal out to an investor, I definitely go to the site for initial due diligence and then also organize the team and said, Okay, what are the tasks we need to complete and let’s do this and I put together kind of a syndication checklist of like 75 different items to go through to get there. And, you know, then just keep, you know, reviewing documentation and just kind of all those, maybe kind of some people think may be kind of boring, but it’s super important to make sure things get done correctly, right? I spend the weekend looking over a PPM document on a property we doing stuff like that, I then need our raise the raise capital, you know, strong network of investors to help raise capital. And then you know, post closing, I do, you know, get on the property management calls and make sure that things are going forward making sure that, you know, when we’re doing the renovations are staying within budget, are we getting the target rents and so forth. I don’t do a ton of like, Asset Management again, just the challenging to travel to the site and so forth.

Charles
Yeah, there’s has to be normal site visits and stuff like that. Yeah, we do the same thing where I always visit properties prior to bringing investors with them. So we’ll walk in usually on the day that we’re doing the due diligence inspection walkthroughs on it. So, but it’s always important to have the organized underwriter, reviewing everything. And it sounds like you’re very thorough. So that’s that’s a great thing to have and putting systems in place with your checklist. But you coach a lot of new investors. So what are common mistakes? You see new investors, I guess, inexperienced investors alike making?

Jens
Yeah, I think new investors, I think, thinking too small. They’re like, okay, I can buy, you know, as I mentioned earlier, the single family home or a duplex or something, and they don’t really think about what’s the next step? Because if that’s all that capital, they buy that one duplex, they’re like, Okay, I’m stuck. What do I do next? Right. So thinking beyond that, what do you want to be in a year, two years, five years, right? So thinking beyond that and really start thinking like that? syndicator early on, so you start generating that network of investors you start, you know, act as if, right, you know, I’m not there yet, but I can actually really start talking about these things. I have people, you know, I have my some of my students studying meetups, before they even bought their first property, just because they’ve kind of thought leader they have seen as an authority in the community and everything else. And that helps a lot with their own confidence and so forth. I think that, you know, definitely inexperienced investors is thinking too small and also relying too much on brokers performance, like well, look at this has been doing all that. Well. Yes, but you need to dig into the numbers. You know, and then I think, as we are learning now, I think we all make the mistake of thinking that tomorrow is going to be like yesterday, right? We can really always imagine these massive shifts that we’re going through right now through this whole virus thing, right? And how do we, how do we prepare for that, right? How do we make sure we prepare for that range? We have funds set aside to weather those downturns. I think that’s, I think that’s a mistake. We are all very prone to making because we can’t imagine

Charles
How quickly things can change. Yeah, of course and then the reserves and the fixed long term debt come into play right now in multifamily. I mean for your anybody that took out long term debt is as thinking themselves that they didn’t take on any type of bridge debt or anything like this. But it’s crazy what’s happening. But so what what are the first couple steps or tasks that you have your students complete? When they’re starting out? Are they are you having them do goal setting? Are you having them figure out their number they need to reach their goals, in sense of maybe like leaving their W-2, which I imagine is on a normal, a normal estimate that they make?

Jens
Yeah, definitely goal setting. I mean, most people like oh, I want to make 10 grand a month. That’s it. Okay, that’s great. Why like, like, dig into this, you just if you just get into it for the money and then when time gets tough you like, people tend to give up, right? So you really have to figure out what is the reason behind you want to do this because it’s not, it’s not easy, it’s not always glamorous, is a lot of hard work, there’s a lot of ups and downs. So you just have to be prepared for that. So setting goals and sometimes the goals also around you know, $1 amount or they want to achieve, but really like, I tend to, people tend to dig into to want to do it, you know, it’s typically like spending more time with their families, seeing the kids grow up, you know, not waiting till they’re, you know, 65 or 70 to have some time freedom right because being that employee you know, you go to the office and you stuck there all day and you come home with another day and some days you productive motivation because there won’t see them right. When you work for yourself. You really got to spend be productive in any minute. If you thought well then go and do something else. Just getting that mindset shift into why you’re doing this was important to my how are you going to be willing to work even harder and things are not going the way you want them to?

Charles
Yeah, the mindset is, is huge. And it’s not as easy as writing down some goals because it takes quite a while to change yourself from thinking paycheck to, you know, especially when you’re doing syndications and your money’s not, you get a little bit up front, but you’re kind of and then you’re managing it’s a long term project that might take years before you get a payout. And, you know, managing all the different portions which the property like you were saying the asset management and also your investors as well that you’re mentioned, because they have to be managed, sometimes more than the property themselves.

Jens
Yeah.

Charles
So great. Well, how can people learn more about yourself and products that you have in the work ends?

Jens
Yes, and I go to my website, opendoorscapital.com that’s it an S, my email is [email protected] And also, you know, maybe the listeners want to get on a call with me to talk about investing or coaching. They can go to opendoorscapital.com/call and schedule a 20 minute call with me and you know, I’ve had hundreds of calls. We talked about investing. We talked about coaching, we talked about, you know, any investor, you want to just learn something from me by all means, you know, schedule the time and love to like to talk to people. Yeah, that’d be.

Charles
That’s awesome. Thank you very much. And the great thing about anybody interested in contacting yen’s is that as we spoke earlier, yen’s is very well diversified in real estate investing. So no matter what your what asset class you’re interested in, yeah, reach out to yen’s and he’ll be able to guide you in the right direction. Thank you very much for being on the show today. Let’s connect soon in the future.

Jens
Okay, thanks, Charles. I really appreciate it.

Charles
Hi guys, this is Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in investing in real estate and you don’t know where to begin, set up a free 15 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com.

Announcer
Thank you for listening to the Global Investors Podcast. If you’d like to show, be sure to subscribe on iTunes or Google play to get new weekly episodes. For more resources and to receive our newsletter, please visit global investor podcast.com and don’t forget to join us next week for another episode.

Announcer
Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of harborside partners incorporated exclusively.

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About (guest name here)

Jens has been investing in multifamily real estate for the last 4 years. He currently owns 74 units in New Mexico and Colorado and he is a General Partner in over 650 syndicated units around the country. He has also passively invested in 14 syndications/private investments, spanning over 800 apartment units, 2,000 mobile park lots and over 6000 storage units plus mortgage note funds and private money lending.

Jens has a passion for coaching new investors and enable their success through strategy, accountability and personal growth.

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