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Global Investors Podcast
GI58: Passive Investing in 4,000 Units to Becoming a Real Estate Syndicator with Darin Batchelder
July 29, 2020
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Mr. Batchelder is the President and Founder and brings twenty years of finance and sales experience to TZK Capital. He has extensive experience in developing and managing complex sales transactions and places a high priority on developing long–term relationships.

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Transcript:

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 Darin Batchelder and Darin is alone portfolio specialist who has invested passively in 14 syndications and has recently gone to the more active side of syndications with some different roles. And we’re going to go through those here on the show. So thank you so much for being on the show, Darin.

Darin:
Absolutely. Thanks for having me Charles looking forward to it.

Charles:
Yeah. Great. So what was your professional background prior to starting your current business and investing in real estate?

Darin:
So I kind of hopped around a few different career paths. I started out at a college. I started out as a CPA with Pricewaterhouse and then moved on to a PepsiCo within their audit division both domestic and international. And then I transitioned into software sells. So selling larger ERP software applications to fortune 1000 companies. From there I transitioned into a mortgage capital markets trading desk. So more institutional selling and that was working for a large bank called ABN AMRO. They’re a Dutch bank at the time. There were a top 20 worldwide bank and we were reselling the banks origination, both full dock, jumbo, residential as well as multifamily loans as well. And it was, it was bank to bank type deals from there. I went and started my own business doing the same thing in 2007. I still have that business but I wanted to get into the real estate side. And about two years ago, I started to look into getting into real estate and both on the passive and on the active side.

Charles:
Interesting. So why did you choose real estate as your investment vehicle?

Darin:
You know, I think for a number of different reasons but one of them was I fell into the camp of, you know, get a good job, make good money, put it aside, put it into the stock market and, and it it’s just going to grow. Right. that’s what, we’re all, we’re all sold and you know, just build up the big nest egg and, you know, it did grow over time and I, and I’ve done well financially, but it just didn’t grow to the point that I had expected over. I just turned 50 last year. So you know, I had plenty of years to compound and when I started to look into real estate and, and educate myself on that side, it just seemed like a much better way to grow your wealth.

Charles:
Yeah. Yeah. You’re, you’re getting the, not only the passive income and the income that you can build upon, but you’re also getting the wealth, which you’re also getting the time freedom and it’s a lot faster, there’s more income streams with real estate versus other, you know, typically with equities insecurity,

Darin:
Right. And you’re, and you’re getting leverage, you know, leverage in a number of different, different areas. It’s a very tax efficient way to invest as well. So, so those were all learning points that I’ve learned since getting involved. And and I’m happy that I’m doing it now as for sure.

Charles:
So before we get into like your real estate investing, I want to just learn a little bit more about what your company, a TZK capital does. And I was looking at it that you’re dealing with buyers and sellers of portfolios. Can you explain a little bit more, I know you touched on it previously. Sure.

Darin:
So when I was at ABN AMRO, and this is dating back to 2002 to 2006, they were a top five residential jumbo originator. And they didn’t want to keep the port loans on their books. So they w rather than sell it to wall street to put it in securities. I was part of a trading desk that would call on other banks to sell the loans direct to other banks. And we were doing that for both residential and multifamily loans, TZK capital. I formed to do basically the same thing but I didn’t have the loans. So I had to find both sides. So what we do is we work with large banks, as well as regional banks and community banks. And we work with banks that are looking to sell loans, and then we find buyers of loans, but we were dealing only with bank to bank transactions and focus on residential loans, multifamily loans, and commercial real estate loans.

Charles:
So you’re dealing with buyers and sellers on both sides of the loans. What do you see over the next, I mean, we’re, we’re deep in COVID right now. I’m in mid 2020. What do you see for the next 6 to 12 months of real estate lending? Let’s just say for commercial real estate lending and multifamily.

Darin:
Yeah. I mean, you know, you have different cycles, you know, in the economy and, and COVID is definitely impacted the economy in a negative way. And everybody kind of knew that the economic cycle was due to end at some point, and we just didn’t know what was going to cause it and now we’re in the middle of the crisis. Well, what happens when you’re in a, in a downturn is you’re going to have, you know, loans that will go bad, right? And, and you’ll have banks, you know, bank, the banking industry is in a much better place today than they were back in the 2008 crisis. Back then, you know, the situation was a lot of banks didn’t have a lot of capital. And so I, when I started my business, it was all about large banks wanting to leverage their balance sheet and sell loans to raise cash. And our business focused on clean credit quality performing loans where a lot of private equity firms were looking to bid 30, 40 cents on the dollar. We were going to these large financial institutions saying, look, we have relationships with banks that want to buy strong assets, and we can, we can sell loans for you without you taking a loss, but you’re going to have to sell your better loans. So that, that was the business. And then after a number of years go by, you know, banks get recapitalized and they’re in a better position. They don’t have the need to sell their better loans. So to answer your question, I think that, you know, as time goes on, you’re going to have more and more loans that are gonna be in trouble and banks are going to have to decide whether to foreclose on those assets. And then, you know, what they do with them. Banks typically don’t want to manage those assets. So they’re gonna want to turn around and sell those you know, either as troubled loans or they’re gonna look to foreclose and then sell the asset.

Charles:
Okay. Interesting. Yeah, it’s a, it’s going to be, I’ve seen now with getting, looking at smaller mortgages like around $900 million right now for commercial multifamily. And it’s just used to be the 25%. And now you’re starting here broker saying, now it’s 30% down to 35% down. It’s just getting, I think everybody’s getting a little bit more conservative with, I know what the agency debt Fannie and Freddie they’re now going much longer on the reserves that are required, which we didn’t see even last year or a few months ago.

Darin:
Right. That’s the, that’s the biggest talk that in that I hear in the multifamily industry is, is because the agencies, you know, Fannie and Freddie are such a big part of multifamily lending and you know, pretty much immediately once covert happened, you know, they changed their requirements and it really was like almost no reserves for, you know and they were just, they were determining what the, the LTV was based on the cashflow of the property, but now they’re, you know, they’re requiring anywhere from 12 to 18 months reserves, which makes, makes a deal very difficult to give investors the returns, you know, the forecast of returns that, that everybody’s looking for. So the top that I’m hearing is that, you know, the opportunities most likely will come in the area of loan assumptions, you know, as loan assumptions, you’re not going to have, have those same reserve requirements. You know, it’s going to come in in the name of other properties that were done with bridge loans. And from what I’m hearing, a lot of the bridge lenders are not renewing, you know, those commitments. So if it was a three year plus one plus one, you know, when they get to the end of the three years, if they’re, if they’re coming into that timeframe, now a lot of those bridge lenders are not extending for that one year. And so that’s putting them in a little bit of a bind. So those are the types of opportunities that we see potentially coming down the path in the next six, six to 12 months. Yeah,

Charles:
No, I definitely agree with that. Everything is just tightening up. We’ve been pushing some of the sellers that we’ve go straight to on the smaller multifamily side have been we’ve been talking on our financing with them because the assumption works well, but it’s, it’s, I mean, it’s very, it’s pretty difficult to get approved for the assumption on one of those agency debts. I mean, it might even be harder than going and get one yourself. You know what I mean, with the amount of documentation that they require you to, you know?

Darin:
Yeah. I mean, I think it depends on what, what part of the market you’re focused on. I mean, if you, would’ve focused on smaller multifamily, you know, for unit eight unit 12 minutes, then it’s a different mindset and a different you know, loan set, but what I’m more focused on larger multifamily. So the group that, you know, I’m associated with, and a lot of the syndicators that that I associate with are focused on, you know, 60 unit and greater, a lot of them are 100, 200 a unit plus. Well, in that, you know, in that world agency, debt is still, you know, predominant really the, the financing of choice. And if, you know, the agencies can get comfortable with the new buying group and the new buying group is as strong or stronger than the existing, you know buying group, then why would they not want to, you know, transfer that now a new guy buying large scale multifamily in my experience, you’re just not gonna win a deal. You know, you have to partner with experienced guys. So, you know, if you want to get into that larger unit property than you, you know, you find, you go build relationships with other partners that already have experienced there.

Charles:
Yeah, for sure. It’s we were just, we were talking about agency and property that we had under LOI, 130 units. And just the reserve requirements are now 12 months plus. And it just, you really have to figure out exactly. Can I go back and sharpen the pencil a little bit through your numbers to see exactly how you can close on it, but

Darin:
It’s difficult right now to do new debt. That’s why I mentioned assumption. So if that, if that property had agency debt on it already, and you can assume that loan and you have a strong buying group you know, I don’t see why that, you know, you can’t pursue it from there, but I don’t know the particulars of your deal.

Charles:
Yeah, no, it was just it not to get too specific, but it was just something that was they do have agency debt on it. Now, the thing though, is that with one of the brokers that we usually go through loan brokers, they were telling us they’re going through the process with us. And he was explained to us a little bit more difficult, which I’ve heard from other brokers, but we have a pretty solid buying group. So I don’t think it’d be any problem, but we’re going back. The main thing is the reserves it’s not really going back. And that thing, it’s a, you know, making sure that reserves work cause now that you’re raising another few months, right. I mean, that can, that really narrows your really constricts, the returns to the investors. So you just have to make sure I’ve got to go back and, you know, so.

Darin:
Completely agree.

Charles:
So you’re a passive investor in 14 syndications, 4,000 units. How did you get in, started in passive investing where you working full time while you’re doing that was it just you know, another way of just supplementing income or was it a way of getting you into the whole active role now that you guys are playing?

Darin:
So in the Quarter of 2017 is when I decided that I wanted to get involved with real estate. I didn’t want to do single family fix and flip. So I wanted to do larger deals. So I went searching out for a way to do that. And I joined a multifamily mentorship group based here in Dallas at some rock group. That’s where I met a lot of other syndicators. That’s where I met my partner on my first sponsorship deal Raj gooped out of Chicago. And he’s got a ton of experience in, and I wouldn’t have, you know, I’m convinced I would not have won that deal. Had I not partnered with somebody you know, that had the caliber of an experience of somebody like Raj. So I joined that group the end of 2017, beginning of 2018. I started to invest passively. Okay. I, Pat I invested in six, seven different deals. Some of those deals were multi property deals. That’s probably where you get that the 14 properties. And then I had one sponsorship deal. It took me a year to Deland my first deal as an active lead sponsor. And then since then you know, I’ve been out chasing new deals, runner up on three deals in the last year. It’s very competitive. And then I partnered with two other very well established gentlemen that I know here in the Dallas area for a very, very, very small minority stake in the deal. I don’t like a 200 plus unit deal. So you know, the whole thing is just getting yourself out there, building relationships, you know, building relationships with other syndicators building relationships with investors and building relationships with brokers and with finance companies. And that’s kind of the name of the game.

Charles:
Okay. So what do you look for in an operator when you’re, when you’re investing passive?

Darin:
So I look for people that have a track record. The seven deals that I invested in, you know, the, the reason for my investments may have, may be different from other people. You know, you, each person has to determine what’s important to them, right? Some, some people, you know, the most important thing is, look, I want a deal that has, you know, really, really, really strong cash flow, or I want a great location or I want it to be in my backyard. You know, those, those could all be factors for me. I knew I wanted to go the active route. So there were diff I was trying to one pull money on a stock market because I felt like multifamily, passive investing was, was a stronger investment play than being in the stock market. And then secondly, I wanted to learn, okay. So, and I wanted to build my resume for the active side. So, you know, this, it’s kinda funny in this world, it’s a little silly that people talk in terms of how many units do you own. Right. everybody kind of uses that as a braggadocious thing. So I saw that, you know, very early on, I think it’s kind of dumb because you could invest 50,000 into a, you know, 50 unit deal or 80 unit deal, or you could invest 50,000 into a 300 unit deal, right. It’s still $50,000 investment. But I saw how it was played. So part of my investments where I was seeking out large unit deals so that it bolstered my resume. And, but I wanted to do it with operators that had a strong reputation. So I talked to other syndicators and I talked to other passive investors. I met and asked them where they’ve had success. And so then I kind of reached out to those syndicators, got on their investor database. And then as they landed new deals, they would email out to their investor database and I was now included. So then I started an invest from that perspective. So,

Charles:
So when in those, in those passive investments, I always like to ask anybody that’s been a limited partner before what they liked in what they liked and then what they could have, what they would have liked to see. So one thing I hear most is communication.

Darin:
Yeah. I think communication and transparency is what most passive investors are looking for and, and performance, you know? So some people, you know, may not be happy with the communication, but if they’re getting 10%, you know, dividends annually, then they’re like, I’m okay with it. Right. So or if they had put money into a deal and then within three years, they doubled their money. They’re like, you know what, the communication wasn’t the best, but, you know, they, he made me money. So, so most people will talk about, they want communicate, you know, good communication. They want transparency. They want to know the good, the bad and the ugly it was going on at the property. But I think when the rubber hits the road, people will also trade for performance. You know? So those two, those two factors. But you know, I remember my first passive deal and I, and I had the capacity, like I did seven deals. I had the capacity to do, you know, multiple, multiple deals. But I remember it was, you know, it’s still scary doing that first investment, you know, actually wiring the money, signing the documents and then wiring the money for the first time. And I remember I wired the money and I kind of expected to get a immediate response from the sponsor. Hey, Darren airmen, we got your, got your funds. You’re good. Thank you. You know, and it was like silence, right? So like after like an hour I email and I hear nothing. Right. Then I send a text, I hear nothing. I’m like, Holy cow, what’s going on? So then I call and then they send me back a message saying, Hey, here’s the deal, our bank. I can see all the deposits come into my bank, but I can’t see who it’s from until the next morning. So, you know, tomorrow morning I’ll confirm your receipt. So I’m like, okay, well at least I know the process. And then the next morning, sure enough, they responded back, Hey, we got your funds, we confirmed it. And then, you know, I had comfort. Right. but I think where the sponsor could have done better. And what I did with, with my investment group because of my experience is when I received the paperwork and told them, Hey, you know, here’s how to wire the funds. I gave them that expectation. Hey, when you send the money, I am not going to be able to see and confirm to you until tomorrow, because I think that’s important. You know, if it, especially that first time when, when you don’t know, and you’re kind of doing something for the first time, it’s scary. Yeah. Especially with there’s so much,

Charles:
I was just watching a YouTube video on it from different title companies. And they’re saying the amount of fraud that is prevalent in, right. With closing with the wire transfers with everything. So it’s something where, you know, you get that wire transfer and you’re like, yeah, I have no idea who it’s from, but we received it. This is the right account because usually get it within an hour. But it’s also, they’re closing a lot of people. So they have, you know, 50 or a hundred thousand, which is the normal number or whatever coming in multiple times. Cause they’re telling everybody, Hey, you got a wire and now we’re closing whenever. And yeah, that’s yeah, I’m already over like two days later.

Darin:
Yeah. I use the same bank is, is for, for my, our syndication. And I found that the process was exactly that I would see the deposits hit, but I wouldn’t see the detail until the next morning. So it was exactly what the sponsor, you know, the first sponsor had told me but you know, just communication is, is extremely important, you know?

Charles:
Yeah. It’s also the amount of communication too. So for some of the passive investments I’ve done is that you get like a one page type email or report and you can read it in a few minutes, you know, exactly what’s going on, it’s got the bullet points on it. It takes you, you know, you’re, you’re, you’re done within a few minutes, you know, what’s going on. And if you have questions, you can always reach out to them. But if everything’s within line of what you understood mean, it’s a pretty simple, pretty simple update. And just knowing that, Hey, we’re collecting rent and this is what it is. And expenses are a hundred dollars more and rent $200 more than we expected. And you know,

Darin:
I think everybody has different expectations, you know, from my standpoint I actually like to read the commentary in the email and I don’t really, I really don’t want to, they send me the financial reports, right. They send me the P and L and the balance sheet. And, and I’m looking at that very closely on my, on the deal that I’m the lead sponsor on, but when I’m a passive, I really don’t want to spend a ton of time clicking on reports and analyzing them. So that’s where for me, I appreciate the transparency and the commentary that comes in the email rather than just a property is doing great. You know, here are the reports truck on, you know, well, I don’t really feel like opening the reports and analyzing them. Right. but again, at the, at the end of the day, I may have one of those investments. And if the performance is great, I’ll probably be like, okay, maybe the monthly updates aren’t the best, but they made me money.

Charles:
Yeah, no for sure. Yeah. It just, it, every, every syndicator, every operator has a different way of how they handle investors. And obviously there are attracting investors that will be reinvesting with them that like that, depending on what their profession is and their, you know, how detailed they like to be with it. But so you’ve kind of gone to a more active role. Can you describe a couple of deals? You said you had one year to minority Sharon. I take it. These are all in Texas, is that correct?

Darin:
Yes, but both of the in Texas, the one that I was a lead sponsor on. So, you know, I started investing passively at the same time. I started to work towards becoming an active investor and, you know, there’s a lot of steps that are involved and each step is a little scary first. And then you get used to that step and you have to move on to the next one. And it took you know, from joining the multifamily group kind of December, 2017, we were awarded the first sponsorship deal in September of 2018. So it took us about nine months. And I had bid on a number of transactions before that and was not a word of the deal. But nine months to land the deal. And then, and then we closed that deal in December. So a few months to, to raise the money and, and close the deal. And it’s funny, I remember that first deal I put an offer in, I came home and my wife was like, you know, what’s going on? I’m like, just put the offer in. And it was okay. 60, I think it was a 64 unit in Denton. And she’s like, you excited. I’m like, I’m scared shitless. She’s like, what, what you’ve been working so hard. Why, you know, why Mike, what if they accept it? Like, I, you know, the first offer going out, I still, it wasn’t completely a hundred percent confident whether, you know, the underwriting we were doing was appropriate or not. And then I got outbid by like three or 400,000 by, you know, two people. And I, I said, okay, we’re not, you know, we’re not far off. In terms of, we’re not overpaying, that’s, that’s the point that I didn’t want to have happened was I didn’t want to. So each, each day up is a learning process and you kind of have to have faith and determination and perseverance. And but I love the business. I love the business because, you know, you, you brought up early on TCK capital, you know, that business I formed and, and all the profits come to, you know, the company that’s owned by myself and my wife. So it comes to my family. Right. but the syndication business is, is completely different. So the 76 unit deal closed on the end of 2018, that was a $6 million purchase. And it was myself and, and my business partner in Raj Gupta. And then we had 44 limited partners. So what’s exciting to me is, you know, the last year and a half, you know, we’ve, we’re growing the net operating income of the property and the property is doing, doing phenomenal. We’re,you know, way above our rent projections. And but what’s exciting is that, you know, when we sell that deal for a profit, we’re not just making money for myself and Raj, like we’re helping grow the wealth of 40 or for other limited partners. And before getting involved in this multifamily group, I had no idea that you can do this, you know, I had, so now I’m completely charged up about the future and just getting the word out and letting more people know that they can get involved in these large, you know, real estate transactions. And I know that that word syndication can be kind of a scary word to a lot of people, but it’s just people pulling their money to buy a larger asset. And so, you know, I want to get the word out and let more people know. I wish somebody had introduced me to this way back when even when, you know, maybe I wasn’t going to take an active role, but I was making good money. I didn’t want to put it all into the stock market, but didn’t know what else to do with it.

Charles:
Yeah, no, I totally agree. I wish I’d got involved in syndications more earlier on in my multifamily investing career because people would ask me, they see what you’re doing, you know, just friends and family and Hey, you know, how can I get into, you know, how can I do, and you kind of, you know, you’re saying to yourself, well, I don’t want to steer them the wrong way. Like this is not when you’re, when you’re actively involved in a property ear, it’s not a passive role, even though the income comes in passively, there’s a lot of management, whether the asset management with property manager, I’m dealing with all that stuff, getting calls for larger repairs and stuff like this, and the weekly call with your property management company. And I’m like, Oh, you know, it’s a lot of, I mean, it’s buying a business, you know what I mean? And I think you steer a couple, a lot of people in the wrong, you know, saying, Hey, you know, you probably don’t want to do this. I mean, I mean, it’s just, and I didn’t have the way of doing it with bringing them in as limited partner and stuff like this, which just makes it so much pump so much more powerful because now you can offer it to busy people or people that actually want to receive passive income, which is really the truly the only way in real estate to receive passive income. I mean, there’s not actively owning a place. We’ll never be a hundred percent passive,

Darin:
You know, but you can scale which, which is because you, you know, in these large multifamily deals, there’s so much leverage. Okay. And leverage can be, you know, a scary thing. But it also can, can really boost returns. And also so you’re leveraging, you know, the lenders putting up, you know, 70, 75, you know, they were doing 80%. I don’t think they’re going to be doing that. Probably in the near term. But you’re also, if you have full time, property management, you know, onsite, you know, our property, we have a full time leasing manager and a full time maintenance person. Then you’re leveraging a third party property management company too. So yes, there’s still a lot involved with getting the deal done with raising the capital, you know, day to day management, but it frees up a lot of your time where you can go after the next deal. And you could really scale versus if you were buying a 12 unit deal and you’re it yourself, it’s very difficult to scale because it just sucks up all your time.

Charles:
Yeah, no, for sure. And then you’re getting called on every small thing. If you have a system in place, like you’re saying for scaling and you have the onsite people I mean, that just makes it, cause they’re taking so much off your plate, they’re going to handle all the marketing. They’re going to handle all the leasing. You’re not paying a ton of money for every new lease. Since you have someone, you might just pay them a bonus of, you know, 50 or 75 bucks per new lease. So it’s, it’s actually, it’s very the scales of economy. It’s very efficient when running it at that, at that point. But it’s also, once you get a running, it’s fine. It’s just, you know, finding the deal. And that’s why having the partners, like you were saying is someone finds money, mainly someone finding deals because just either one of those is a full time job.

Darin:
Yeah. Yeah. So I was on a, on another podcast recently and somebody was talking about going from passive to active and they use the word like easy. And I could tell that you do, you are not of that camp. And I was like, I would not call it easy. It’s definitely not easy, but it’s exciting. And the real estate world is, is completely you know, I’ve mentioned that I kind of jumped around a few through few different industries. But the real estate industry is the first industry. I’ve been a part of where there’s so much sharing of information and there’s so many people that want to help the next guy. I had so many people help me get my first deal. And, you know, I can’t tell you how many calls I’m on with, with people that reached out to me on Instagram that, you know, I’m trying to help and give guidance to the next guy. And it’s just very open. And I love that. There’s a, there’s a very big abundance mindset with real estate investors.

Charles:
Yes. And I think everybody that’s successful in this level of real estate investing when you start syndicating properties, not really the mom and pop stuff. They know that it’s more, it’s a, has to be a team sport. There’s no way you’re going to hit that the next level without working with other people without you know, sharing it, having the abundance mindset. And yeah, that’s why it’s great being part of different groups. Like you’re part of a mentor group being part of a mastermind group, stuff like this and sharing those ideas and sharing your experiences. So you’re talking about what about for your first deal? You’re talking about that. Like, so for the first couple deals, what you’re in your experience, what were some of the issues you had? I mean, there’s probably a ton of them, but just pick a couple that you think and like over how’d you overcome them?

Darin:
So to win the deal or to, or after the deal is

Charles:
Either on, I mean, closing the deal. I mean, obviously that’s when, when you get accepted, that’s when it really starts, you know, the LOI gets

Darin:
Yeah. You know, I guess a few things, one is, you know, leading up to and winning the first deal. There’s a lot of different steps and each step could be scary and, you know, learning how to push past the fear is, is something that I’m a big proponent of. There’s a lot of people that just let fear stop them and or just want to education is good reading books on multifamily and listen to podcasts and, and talking with other people. But at some point you have to actually make the decision to do it. And when you know, the first time you do it, you’re not going to be perfect at it. Right. So I’m calling brokers, right? Well, Hey, mr. Broker, this is Darren. I’d like to do a property tour in this a hundred unit deal, or what do you own? Well, I don’t own anything, but I really think that I’m a good fit for this. Right. So, you know, you kind of stumbled through the first few on how you let that broker know that even though you don’t have a deal that, you know, Hey, I’m part of this mentorship group and I’m partnering with other experienced people. And, you know, we already have indications from a lot of passive investors that they have interest. So raising the capital, you know, that it doesn’t appear to be an issue and you know, all those. So that’s one scary part then the other underwriting deals, right. Well, okay. How do you underwrite a deal? And at first you’re not that good at it. And the more deals you underwrite, the more comfortable you get. I mentioned that I was scared, you know, that first time putting in a letter of intent, well, the next deal, that was like a $4 million deal. The next deal I put an offer in on was double the size. It was an $8 million deal, but I had, I had done so much underwriting that I was like, Holy cow, this is a great deal. And, and I just came in at like full listing price, but they, they already had locked in a buyer. I tried to get them to move our way, but it didn’t happen, but I jumped on it very quick because I had looked at so many other deals that were the numbers didn’t work, you know? So you get comfortable with that. And then, you know, when you finally get the deal, you have all these people that say that they’re interested in investing with you, but you don’t really know if are they going to invest or not, you know, so you, you put the deal on their contract and then you present the deal out to investors and it’s kind of a leap of faith, you know that, you know, you’ve got the deal and the money will come well at first, like the first week we, we raised like 65% and I was like, Oh yeah, this is, this is pretty easy. That lasts 30, 35%, you know, took some, some hard work, like calling people falling up and, and but we got the deal done. And, and now a lot of the investors that are in the deal are, you know, they’re very thankful that they’re part of the deal. They, you know, they like the transparency and the communication and, and you know, I hope to work with them on future deals going forward.

Charles:
Yeah. I know what you mean by that. We had a $2 million raise on a syndication we did last year and the beginning started off and you had investors that are waiting to invest. And then, like you said, and then you have the final part of it. And you’re like, all right, well, we gotta, and we’re, you know, you’re having the every, I think it was like every night or every night we’re having calls the GPS, like, what are we doing? Like, how are we going to raise us? What else do you have? Like how can we do this? Like, you know what I mean? But you, you got to get it done. And then, but then the confidence always comes when you’re putting the offer. And so you knew you had the confidence already cause you had already underwritten in there. So like I know for that property, we got great deal on that. I would go back now, if that same deal came to us I mean I would pay five, 6% more or whatever for that property, because I knew like we got, we had gotten a great price on it and he’d be very confident going in because you know exactly what the market is, you know, exactly everything around it. You probably know that part property so intimately after underwriting it. And then after owning ones too, in that area. And then you’re like, Oh, I know everything. I buy it for not, you know, 80,000 anything under is great. Anything over, you know, has to be this and that.

Darin:
Ah, excellent point. You know, I when we put together the business plan, you know, I had rent projections that were obviously higher than the existing rent ran because we were going to improve the property both on the exterior and the interior. And we develop that, those rent projections based on looking at other properties in the area. But there’s still no guarantee right. When you go to XQ. So I was confident, but I also was like, okay, I haven’t done this before. And until I see it happen, you know, I don’t know if it’s actually gonna come to fruition. And thankfully, you know, we, we surpassed our, our rent projections. So, so it turned out, you know, in our favor and in our investor’s favor. So,

Charles:
So Darren, what do you think some of the factors are that you and your team have implemented in your life and business that have led to your success?

Darin:
I’m a big proponent of pushing past the fear and taking action. You know, I, I like to learn, I like to learn and educate myself. But I believe that I think there’s a lot of people that they will just keep in that learning phase and won’t take action. And from most of the books I read and different things I see as successful people, whether it’s running a fortune 500 company or whether it’s being a big time real estate investor, or starting up a tech company, whatever they have to make decisions with without all the data, you know, they try to accumulate as much data as they can, and maybe they have 40% data, 60% data, 70% data, but then they have to make a decision based on that. And I think a lot of people get hung up on, I’m trying to be a 100% certain. And I don’t think that that’s out there, You know,

Charles:
in analysis paralysis.

Darin:
Correct.

Charles:
Yeah, no, I see that all the time with people. And it’s just kinda like, you gotta do the first one, you gotta put it out there and you gotta be consistent to when you’re doing it. And you know, put out those, [inaudible] start meeting those people go to one meetup. I mean, now it’s a little different, but before go out to one, meet up a week or one a month or go to a conference here and there’s a scary step, right? Oh yeah.

Darin:
The first time of going to a meetup, you don’t know anybody and you don’t know that much about real estate and like, okay, are they going to judge you because you don’t know, and then you get there and you realize, look, they just want to help you and just, you know, be real and build relationships and they want to help you from, you know, from start. So yeah.

Charles:
Awesome. Well, how can our listeners learn more about you and your company?

Darin:
Best way to reach me probably is, is through social media, is, is Instagram I’m on Instagram at Batchelder Darren. You could private message me there or you can email [email protected] I’m also on Facebook and LinkedIn.

Charles:
Okay, awesome. Well, I’ll put all those links into the show notes and for the podcast and for this YouTube. So thank you so much for being on the show today.

Darin:
Absolutely. Charles, I loved it. And have a great week.

Charles:
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.

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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.

Links and Contact Information Mentioned In The Episode:

About Darin Batchelder

Mr. Batchelder is the President and Founder and brings twenty years of finance and sales experience to TZK Capital. He has extensive experience in developing and managing complex sales transactions and places a high priority on developing long–term relationships.
Prior to establishing TZK Capital, Mr. Batchelder was responsible for the sale of residential and multifamily whole loan pools for ABN AMRO Mortgage Capital Markets Group and was involved in over $4 billion in loan portfolio transactions. Mr. Batchelder is a Certified Public Accountant and began his career with Price Waterhouse and PepsiCo where he was responsible for providing senior executives with business improvement recommendations. He subsequently moved into the sales arena working for Computer Associates and eCredit.com, providing finance executives with financial and credit underwriting software solutions that helped customers increase sales and implement process improvement.
Mr. Batchelder is a graduate of the University of Rhode Island with a Bachelor of Science degree in Accounting.

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