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Global Investors Podcast
GI115: From Maintenance Man to Over 5000 Units with Glenn Gonzales and Mike Woodfield
September 2, 2021
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GI115: From Maintenance Man to Over 5000 Units with Glenn Gonzales and Mike Woodfield

Today we have Glenn Gonzales and Mike Woodfield. Glenn has over 30 years of real estate experience; has acquired over 4,500 units and wrote a book called Maintenance Man To Millionaire.

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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 Glenn Gonzales and Mike Woodfield. Glenn has over 30 years of real estate experience; has acquired over 4,500 units and wrote a book called Maintenance Man To Millionaire and his partner at obsidian capital is Mike Woodfield. So we’re, it’s a pleasure to have both of you guys on today.

Glenn & Mike:
Thanks so much. Thanks for hosting us Charles and really excited to be on the show and, you know, got fun stories to tell. So it should be, it should be a fun episode. Thanks for having us.

Charles:
Yeah, sure, sure. That’s what we’re looking for. So give us a little background on yourself, both personally and professionally before getting into and starting your current.

Glenn & Mike:
Sure. I’ll go first. And then Mike, can them introduce himself with his background too? So I, you know, you mentioned my book, I had maintenance man, a millionaire, right? So I literally started in the apartment industry as a maintenance man you know, 30 years ago and on a larger property. And then got into site manager as a property manager on a small apartment complex and then later became a regional. So I worked with small companies and large companies. So that one that I started with happened to be a fee management property management firm. And then I later joined a real estate investment trust or REIT big one equity, residential. And then after that, I joined from the property management side to the asset management side on the ownership side as an asset manager, and then have also in my career owned my own property management company, actually two of them one that I started with a friend and then he kept and I moved on and then another one that I grew.

Glenn & Mike:
And then when we started selling our portfolio sold that property management company. And oddly enough, it’s, we’re going to start a new one back here. So, you know, it’s, it’s crazy that I want to be in property management. I really disliked property management. It could come out in this show today, stay tuned. But anyway, so I’ve worked in all aspects of the property management and then about seven years ago started getting in to the ownership side and then we’ll, we’ll jump into that. So that’s a little bit about my bed. Awesome. Like what about you? Well, my experience a lot shorter than Glen, so this won’t take as long, but I actually worked for Glenn for about four years on the asset management side. We did about 300 million and real estate under ownership that included about 30 or $40 million of renovation work that we did and millions and value add.

Glenn & Mike:
And we sold that a good, healthy average IRR of above 35%. In that time period, we did great. We did pretty well. Our investors were very happy. So at that point I said, Hey, Glenn, you’re rich now I want to get rich too. So, you know, we partnered and we’ve done about a thousand units together. Yeah. So we’re doing really well and Glen is the best mentor anybody could ever ask for. He’s really taken me under his wing and taught me everything on the operation side that he knows over the past five and a half years. And, and now more recently on the ownership side and as far as, you know, financing and acquisitions and underwriting, you know, we’re diving deep into that right now. So anyways, that’s a little bit more about Mike. He graduated from the university of Utah state university, excuse me, Utah, Utah. I’m he’s an ad. And then he’s recently just about finished his CPM designation courses with iron. So pretty exciting. That’s really figured this industry out is doing quite well. So it’s kind of fun to work with him. Thank you, sir.

Charles:
So what do you guys are developing stuff you’re buying multifamily. What is your current investment strategy and criteria of what you’re looking at?

Glenn & Mike:
Yeah, that’s a great question. So let me just start with, you know, value add, right? We’ve typically been value, add players, buying properties, renovating like Mike said and selling them for a profit. Well here locally, we have found that if you dig deep enough, you can find some, some dirt and, and you could build from the ground up at or close to the same cost that we’re buying 1980s product for, and then renovating. So if the price points are kind of the same, then why don’t we just stop renovating an old product and just build new? Right. And so, as a result of that, we’re building a 50 unit Roundup an 84 unit Roundup, an 81 unit ground-up what are we ask for that 160 unit and then at 340 units. That’s right. Yeah. So we have five development deals underway. Plus our corporate office is a ground up new construction build as well. So I guess we’ve turned or evolved due to the changing of the times from renovators and, and guys to developers.

Charles:
Interesting. And where are those prop properties are? I imagine I thought you had one of them in Austin. Is that correct? Or outside of Austin?

Glenn & Mike:
Yep. That’s correct. So I’m just north of Austin and Leander. We have two of our properties there ones right across from the oleander high school. The other is in Taylor, Texas. So it’s, where’s it east of east Boston, about 30 miles, 25 miles from 25 minute drive from the new Tesla new Tesla headquarters. So, yup. And those will be, you know, new construction, but there are going to be condominiums for sale. And although there’s 81 of them, we already have reservations for like 24, 25 of those. Right. So, you know, those are there and then Liberty hill or the larger ones, the 150 unit deal and the 340 minute deal. And those are just north of Austin, about 20 miles.

Charles:
Okay. Interesting. All right. So you guys are starting a third property management company, even though you hate property management. So how’s your property management done now? Is it like, are you all third-party management and why would you bring that in house? If it was something that not the spies, maybe that’s the wrong word, but this is like,

Glenn & Mike:
Well, you know, when you say I hate property management, that’s kind of an understatement, you know, really, really, really in front of that statement. Yeah. I’m really, really, really, maybe you’re the wrong person to answer this question. Why are we doing this? So, you know, historically Glen has run his own property management, but then quite successful doing so the advantage to having your own property management companies, you control the properties a bit more, right? You get answers quicker, you have more hands on with the accounting and things like that. So it’s advantageous, but it’s not a, it’s not a, you know, profit generating machine, right. It doesn’t, it doesn’t pay you huge dividends like other businesses, it’s, it’s sometimes a loser and costs you money to run. So that’s not our goal that our goal in starting this is just to have more control over everything we’re doing in business, which, you know, really the motivation for starting it is we’re building so much locally that we really want to have our hands on.

Glenn & Mike:
And we have the economies of scale to start a management company because we own a lot of stuff locally, historically, we’ve owned all over. So it wasn’t as feasible, but yeah, and a couple of good examples that Mike pointed out, like if we wanted to do a rent increase on a property where we’ve got a third-party property management company, we would call the regional manager and say, Hey, it’s time to raise the two bedroom rent prices by 50 bucks. And the regionals, like, all right, let me get ahold of the property manager. And that, that person know. And then that person will probably review with the leasing agent and they’ll implement it. I found that that whole process could take two weeks or might not happen, or we never hear back. And then we get the next month’s report. So like, how did the new rents go? Like, oh, I forgot to tell her we got the same lost the lease.

Glenn & Mike:
Whereas if we have the management company, we skip all that. We go straight to the leasing agent, okay. Start asking $50 more starting this Friday, right. As we, and then call us on Monday and let us know how it’s, it’s not so much red tape, no red tape. Right. Cause we own it. We, we have direct relationship with, you know, and of course we’re not going to bypass the regional, but you know, maybe the regionals sitting right beside this. So our decision to start a management company is going to be for the properties that we own here locally, right. In our own backyard. They’re about a 20 minute radius of us. We also own properties in Kentucky. Right. But we’re not going to send our property manager or regional to Kentucky. We’ll use a local property management company there that’s, well-versed likewise up in Dallas.

Glenn & Mike:
You know what I mean? That was the markets we’ve got property management companies have been now. So we’re happy with, and yeah, we have no interest in, you know, growing this massive property management company that has hundreds of thousands of units that, that probably, you know, that’s not a a hundred thousand year. That’d be nice and we’ll do that. That’d be nice, but we need some economies of scale. Right. We need that in this business. And so if we’re on one property in Dallas, you know, we would rather have a local management company do that. Cause I think they would do probably a better job, to be honest. Yeah. And when we answered this loaded question or you’ll be sorry, you answered it. You know, but like Mike said, you know, in property management, you collect the management fees, it gets eaten up by salary. So towns and regionals and stuff, marketing. Yeah. There’s no money in it really per se, 10,000 units or more, then you’re making a profit margin. But by that same token, if you’re to that level, you want your regional manager to cover 10 properties, not five because that cuts into your profitability as a property management company. So you want to have, you know, fewer managers, regional managers stretched really thin. Yeah. Well that is made up. Help your performance very well to know.

Charles:
Okay. So when you guys were picking up managers, like you have Kentucky Dallas, when you’re looking for these third-party managers, what does, what does the questions that you’re asking the main questions that are most important and how are you finding those? Are you finding you through referrals? I imagine. So how do you find your property managers when you get third parties and what are the factors? What are the questions that you’re taking into consideration when hiring them?

Glenn & Mike:
Yeah, Sure, sure. I mean, referrals are always huge, right? I mean, we have a lot of longstanding relationships at this point, so that’s helpful, but you know, always a phone call to someone that market, you know the Kentucky deal that was brought to us by a property manager and said, Hey, look, if you guys buy this, you just gotta let me manage it. But I’m the connection to the seller, you know, off market. So that worked out well, but I don’t really know how well that manager is as an operator, but they brought us a 200 unit deal right now. We’re like, oh, we’ll buy that, but they’ve done great. And they’ve done great. So we got lucky there. I would say the criteria and the questions we’re asking are if there’s a regional manager, that’s going to oversee this directly, how many other properties do they have?

Glenn & Mike:
You know, and where are they located? Because you know, I’ve run into regionals before where they say, I have five. I’m like, okay, that’s manageable, but they have one that’s in Oklahoma and then they have one that’s in south Texas and then one that’s in Las Vegas, Nevada, and one in Florida. How often are they coming to you? How often they come into your property, which is really what it comes down to is how much time, how much FaceTime is that staff going to get with that person? So that’s very important to me. Yeah. Yeah. So really you’re gonna put a lot of effort and ask a lot of questions to their regional manager. Yeah. so that, that I think is the best reputation. Yeah. They’re the one driving the, the, the asset management plan and the, you know, the business plan. Right. So,

Charles:
So you guys are partners. How important is it for choosing good partners? When you’re getting into larger properties and how did you guys find each other?

Glenn & Mike:
Oh man, what a story? Yeah. I’ll let you, you and I’ll start, you start. Okay. First of all, I’ve had two bad partners, right? And so one of them was a gentleman that convinced me to come down and help run his property management company that he had just started. And he said he had 4,000 units and, you know, we teach at it, I get down areas 2000 units and there’s no management, anything. There’s no, I mean, they’re still faxing up payables on a fax machine. You go to the accountant and they have no controls at the site. LOA is a disaster. So anyway, I got everything stabilized there and then come to find out that you know, that, that partner of mine did not want me to own any apartments. He just wanted me to be his partner on property management. So I went and bought an apartment complex, brought it into our management company. And you know, his answer to that was you can’t buy apartments. I’m like, why not? He’s like, well, it’s conflict of interest. I’m like with who he’s like our management company, I said, but I just brought it to our property management company kind of expecting a thank you, you know? Well, you’re, you’re fired. I’m like we can’t fire me because we’re partners. Well, that relationship ended.

Glenn & Mike:
I’m not allowed to disclose how it ended. I got a smile and I’m like, okay, well, whatever. So I met of there. The other one was a part of the head, just not too long ago and really just come down to ethics. You know, some people work in gray areas and other people are more black and white. And when I’m entrusted with investors, money, to me, things are very black and white. And you know, there’s a high level of trust. Well, if you have a business partner that likes to view other people’s money with a gray area or with less concern than his own then that’s concerning. So that relationship ended for, from, I would have stayed for moral principles, you know? And I just didn’t want to be associated with somebody that maybe doesn’t have the best reputation in the industry.

Glenn & Mike:
And without going into too much detail, I’ll tell you that the lenders would call me and say, I don’t really want to work with your business partner brokers, that a you know, I’ll give you some deals, but as long as I don’t have to talk to your partner anymore, and then investors would call and like, I just hung up with your partner and he wants to renegotiate our operating agreement because we’re selling this deal and I’m making a lot of money. And he said, you know, he’s making too much money. And I’m like, well, sorry. He said that to you. I said, you can’t change an operating agreement once you put your money in a deal. So yes, you did make a lot of money. And that’s, my job is to make you money. That’s what I do for a living. So, you know, those are two bad experiences that I had with partners.

Glenn & Mike:
How do you find a good partner? You know, Mike worked with me for four years and had the best, you know, he talked about an average IRR term investors, but there was one deal that, what did, what did that one deal heaven? An 84% [inaudible] yeah. And Mike does really dove in and his work ethic was exactly like my work ethic and, you know, talking to my wife, how can I have a business partner that thinks like me, you know, and we’ll take you out of business, like man mindset guy. Nice. I appreciate that. I’m going to add to that as much as you want. Sure. Floated yeah. Business partners are tough. Especially if your interests aren’t aligned or your morals, right. Which Glenn touched on Len and I’s interests are very aligned, very closely. And we we have a hundred percent trust between one another.

Glenn & Mike:
I would never steal from Glenn and he wouldn’t ever do that to me. That’s shoot him with a gun. He would shoot me. And, you know, also you can say that cause we live in Texas, right. I mean, some California listeners may not appreciate that as much. I’m in Florida, man, Florida. Yeah. Florida. We’re good. Listeners would appreciate it. Yeah. But you know, where does the line and work ethics, other thing, and, and Len and I are always working, you know, he’ll call me at like 1:00 AM, Hey, let’s, let’s talk about this, you know, and things, but we’re always there, you know, and Len does a lot more FaceTime at conferences and stuff, and I’m back here handling different things. You know, we’re always working in, in, in working together and we understand that each one of us needs to have our role and do that role the best we can.

Glenn & Mike:
And that’s a great partnership. So, you know, our interests are aligned very close and we want the same outcome, you know, and that’s to make our investors money and we make money, you know, so, and I think my mistake because I made it in the past, as I jumped into partnerships with people really quickly, they looked good on paper. Right. but you know, talking about merging personalities and work ethics and all that, that takes time really, to notice and pick up on. So I really did have the opportunity to watch Mike at arms length for four years before he ever became a farmer. We dated a lot before we got married. Yeah. Yeah. I mean, but it really is like, you, you spend so much time together. We’re not married by the way, all the listeners came out really wrong, you know, not that kind of, we should probably state that.

Glenn & Mike:
But you know, you work so closely together that if you don’t get along or can’t have fun along the way, then it’s brutal. I mean, you don’t want to be around your business partner, then it won’t last, you know? So you gotta like each other, you gotta work hard as hard as one another. And then also there’s gotta be some sort of plan for the future, you know, with Glen and I, Glenn wants to retire. And so we have a plan that’s 10 years down the road, 15 years down the road to where we kind of know that things will change and that’s okay. But we talk about stuff like that, you know, and we’re very open as part of our day to day operations is working towards a goal, you know, for him to run the whole company and for me to step away, although I’m a deal junkie and we both realized that my retirement may be, what’d you say? 85 80. Yeah. He’ll retire when he’s dead. Yeah. That’s okay though. He’s good at what he does. So yeah. We’ll keep him plugging away. And I was like, I don’t know if I have enough time to interview

Charles:
Glen, I heard something before that. You you, you had a, if you keep a relationship with a broker, you like spend a hundred thousand dollars on replacing like a chiller system and you bought a bunch of thousands of units from a partner of yours, another investor. So how important was that like, is that reputation when you were in this small arena of multi-family commercial real estate? Yeah.

Glenn & Mike:
Well, I’m going to plug a little bit something here is my book, you know, maintenance spending mayor, the afterward is written by that same broker. Right? So you’re, I am selling an apartment complex. And about six, seven days before closing, you know, do you know of course, earnest, money’s already nonrefundable, lumped approved anyway, this gigantic chiller breaks. So we call get a repaired and they’re like, it’s beyond repair or replaced, full replacement is needed. We’re talking about $150,000 or something like that. And we started getting bids and stuff and and in my old business partners, like, dude, he’s already nonrefundable, let’s put a bandaid on it. He has no choice. And I’m like, dude, that’s not cool. Right. So I got the bids and I actually got an argument that business partner says, well, we’re going to pay for the whole thing.

Glenn & Mike:
He’s that guy used should make the buyer pay for half on, do this, just pay for it. It’s the right thing to do. So we paid for it ordered it. We paid 50% upfront and then we actually wired money into title company to escrow the other half so that the buyer would have enough money at closing to pay for the other half of the chiller. And when it got arrived in. And so, so I told the broker that, and he’s like, he was dumped out and he’s like, are you kidding me? You know, he’s, I’ve been in business for years and years and years, big broker with Marcus bell chap. And he’s like, these are things that people just take advantage of other people on. I mean, you won, you didn’t even have to say anything to, you could have just put a bandaid on it.

Glenn & Mike:
Well, fast forward a little bit, right. I made a conference and we’re going around the room, introducing people to, or introducing ourselves to people. And this gentleman across from me, it was his turn to stand up. And he’s like, I wanna, I don’t want to really introduce myself. I want to interview. I want to introduce the guy, oh, sitting over there. And he pointed at me, I looked at him and I’m like, oh, what did I do? What did I say? And do I know this guy? He’s like, we’ve never really met, but I know of him. He, and he told this story, he’s like that guy, I was getting ready to buy his apartment complex. And he bought me a new chiller five days before closing. And and he said, I’ve never really met anybody like that. You know, and then instead of sweating bullets, I actually had a grin on my face and like, oh, so your, you know, buyer Westwood.

Glenn & Mike:
Yeah. You know, and he’s like, I am. And I’m like, it’s nice to meet you. It’s, it’s really nice to meet you too. So I, I shared that story with you because in our industry, you know, we’re going to come across people that we do business with or have them business or might do business with. And is it really worth screwing somebody out of 120 $550,000 to pad my pocket on one deal, if I’m going to do 30 more deals in this industry. So yeah. The question to your, to your listeners, like, what would you do if you were in the same situation?

Charles:
Yeah. Those killers are really expensive. I was reviewing like 10 years ago, a mixed use property and they had an old chiller and their thing was leaking. It had a specify this all raw, you know, it was all like connected on like, oh my God, this thing was a mess. So those things can be, I mean, as you said, $150,000 are extremely expensive to replace and and repair. So it just goes to speak how important relationships are. And I imagine you kept getting deal flow from that broker and they returned your calls when you call them.

Glenn & Mike:
Yeah. We recently are selling a deal. Okay. Another story. Right? same broker. He brought us a deal that we won and probably weren’t the highest bidder, but you know, had cloud reputation and ability to close on it. So he really vouched for us. We won the deal is now under contract to sell. So of course you go back to the broker and say, Hey, you know ready to sell my apartments. Well, somebody gave us an unsolicited offer on our deal, which is a great deal. So we accepted it and I called out, I’m a dude, no need to, to market this deal. Even though you gave us a BOV, you don’t have to take into market. And he’s like, what happened? I said, well, somebody gave us an unsolicited offer. Now of course, that brokers like thing. It was my commission. My, well, hold on brother. You know you still earned it. So, you know, maybe we’ll still pay them is that you would do that. Like, sure. Why not? Let’s see if they close. If they close it, you know, it’s to be determined. Right. So it’s like, if he closes, I’m going to write the guy, a check. If they don’t close, he’ll market the property and they’ll go find a qualified buyer. So, you know, again, what comes around, goes around.

Charles:
Yeah. And there’s so much slimy investors and people in this industry. It’s amazing. It’s just a, every time you get into a relationship or meet someone and you’re like, oh my God, there’s just a, you know, so that’s something that people go, they come, they go, I have my, my dad’s real estate partners. They screwed him out of some properties and stuff like this. And they disappeared like an early nineties when all that stuff went down and he was left there trying to manage everything. So it’s amazing how this industry is small and that stuff comes back around.

Glenn & Mike:
Yeah. You never burn a bridge in this industry. And those guys all go out for drinks afterwards. And I can only imagine what it’s like when a bunch of guys have drinks in their body and what they say, but you want it to be favorable, not bad, you know, cheers Mike and Glen for putting together the deal rather than, you know, what those guys did to me. So stuff like that.

Charles:
So what are some of the biggest mistakes you guys have made as real estate investors?

Glenn & Mike:
Oh, geez. That’s a great question. Where do I start? Because I made a lot, he made a lot of mistakes along the way. A common one has been that we will buy a deal and not really raise enough renovated money for them innovations and still hopeful to get big rent increases. So you really start cutting costs on what you fix. So you’ve got a property that may or may not look as good as it ought to or should. And it makes it more difficult to get the rents. If you don’t get the rents, then you don’t have the NOI, the NOI at that cap rate, you’re not going to get your exit sales price. So that’s common. I learned along the way to always raise extra money as a rainy day fund. Right. So that’s been a, yeah. I mean, there’s always something that comes up, you know, like they have chiller for example, or a pool that you might buy, something, everything works just fine.

Glenn & Mike:
And then six months into it, you find that the foundation has settled there or, you know, has slipped a little bit. So then you gotta go put some money in it and things always come up in real estate. Right. You, the only thing I could tell you is you’re going to be surprised by something if you own real estate. Yeah. Well, I never had a rainy day fund until like, not too long ago, I started raising extra money as a rainy day fund. And that’s hard to explain to an investor, you know, why do you want this extra 150 extra $200,000? What’s that for? Like, I don’t know, it’s for the unstable, do we really need it? Yes, we do. Because I don’t know, but I’m like, trust me, you want that money in there? Cause last thing you want is for me to call you and say, I need an extra, I can give an example of that recently.

Glenn & Mike:
Yeah. So this property we’re going to sell right now Texas, we had this big freeze about a month ago where power was out and the pipes froze and any exterior pipe on any building, frozen pop. And in this case we had 48 of our 136 units at this property where the pipes in the laundry room broke. And that was about a hundred thousand dollar fix because your calm plumbers out who are getting calls from everybody else. And we had to do it because people need their laundry done, right? So we need to call them tonight. You can’t wait for a claim to be canceled, right. So, you know it just so happens that, you know, our insurance doesn’t cover frozen pipe damage. It covers the water leak and the sheet rock damage that that caused, but not the frozen pipe.

Glenn & Mike:
Well, the good thing is Glen raised, we raised half a million dollars in a rainy day fund on that property. So that a hundred thousand dollar fix that we’re going to have, isn’t going to come out of cashflow. I’m just going to go back to RA day fund and tell our investors, Hey, we’ll just use this money. It’s sitting there. And we did. And we did. Yeah. And we paid that vendor off. And you know, other people probably what’s happening right now is they’re in the same exact situation as us. But there’s zero cashflow now because they’re trying to buy this down on payment plans or there’s vendors now going to lean their property because they have no way to pay it. So they’re in a, they’re in a mess, right? Or they’re trying to go raise more money from their investors and say, Hey, sorry, we didn’t plan for this.

Glenn & Mike:
And that’s always tough. It’s always tough. And another good example of that, Charles is a, you may get a call from your lender and said, Hey, we just did a re-evaluation of your escrows and your taxes went up. And so did your insurance premium. So we now want to collect from you, you know, an additional X dollars every month for longer mortgage payments. And there’s a short fall in there now. So we’re going to pay the taxes, but you need to give us an extra a hundred thousand dollars, 150 days to cover the shortfall on the property taxes. And some owners are like, oh my gosh, what do I do now? And some owners, clients will actually go and get a loan for property taxes because there’s lenders that lend on that. Third-Party lenders, that’s a big red flag. So I’ve learned that lesson too, in the past where you don’t have enough money to pay property taxes.

Glenn & Mike:
Cause they went up, you know, and you can only appeal them so much. We appeal all of our property taxes, but you can only, you know, that will only get you so far. Right. So yeah, hopefully those are some good examples of mistakes along the way. And you know, having a bad business partner previously was a big mistake, but yeah, we already covered that. I think, I think one common mistake that has been made and that I’ve seen over and over again on the acquisition side is, you know, just sharpening the pencil so much to make the deal that you really set aside reality and convinced you’re saying you just can’t because it does a lot of times in syndication or in buying real estate, you see these up front fees or financing fees or whatever, you’re going to get acquisition fees. And those are very appealing.

Glenn & Mike:
But at the end of the day, you have a business plan. Hopefully you have a business plan and that business plan has to be executed or else, you know, you’re not going to make money. You said you were going to make. And so a lot of times, you know, people just have their heads in the cloud and they’re trying to push a deal through, you know, I would say, pull back from the table and put your emotions aside and say, can we make this work really? At the sunrise? And if you can and answers yes. And maybe there’s some risks there and people understand the risk, right? You move forward. But if it’s like, no, we can’t, this is going to be a nightmare. Usually what happens with those properties is they become your biggest nightmare. And that’s all you end up doing is taking care of those properties because they require all of your attention as well.

Charles:
Some great points as we’re wrapping up here, I’ve had one more question before we get your information, but what do you think are the main factors that have contributed to your guys’ success? Good looks good. Nice personality, good luck

Glenn & Mike:
Relationships. Really. I mean, I share this story in my book as well, but there’s a gentleman named ed that he and I were kind of friends for about 10 years. Right. And I joked with ed and I said, Hey, look, if you ever want to sell your company, he had a property management company call me and I’ll buy it. He’s like, I’m never going to sell well, he’s right. Cause I, we had that conversation when he’s 70 years old. Right. He’s never going to, but he turned 80 and something happened and he called me, he’s like, Hey Glenn, you know, we’ve always shared over the years. And would you be interested in buying my company? And I said, yeah. And so what came along with the property management company were eight apartment complexes up in DFW. And I said, well, let me look at them.

Glenn & Mike:
And I looked at him and I said, here’s how much I’ll offer you? And it was at the current cap rate on his current, in place trance. And he said, that’s very fair. We’ll do that. And we shook hands. Then we papered it. I was actually the broker the broker did. So there was a lot of brokers that were upset and we bought those deals. We had to raise $22 million and that was a tall, you know, equity raise. And he was a kind seller. He let us stagger those eight apartment complexes over a six month period of time. So we’d get, had the opportunity to work on, you know, deals at a time and get them over the finish line. We went to two different crowdfunding platforms. We went to a private equity firm and then a family office and got the money from different sources, but ended up closing all those deals.

Glenn & Mike:
And as a result of that, we’ve made a lot of money. You know, he talked about one of those wasn’t what’d you say it was an 82 or 84. IRR was one of those deals and put it into perspective. We were buying these apartments for 45,000, 50,000 a door and selling them for 75 to $80,000 a door recently and made a lot of money for our investors and a lot of money for ourselves too. So that came from a relationship Charles. I mean, it was a 10 year, a decade of just being friends with somebody, share with you the stories about some of the brokers that brought us deals because we did the right thing. That relationship has paid dividends on two or three deals. So, you know, I would have to say relationships for me and it looks, I’m good. Let’s get you [inaudible] but I’m old and he’s young.

Glenn & Mike:
So that’s part of it. So yeah, I would say definitely relationships. I like I’ll go back to always working, being the hardest worker in the room, if you can be and being dedicated to learning the craft for me, a big thing is like always be learning. You know, don’t, don’t be the guy that has to be the smartest guy in the room and never ask a question because he’s afraid of looking dumb. I ask questions constantly and learned something new almost every hour of every day. And so I guess my success is I can attribute to the fact that I’ve been teachable and I’ve been able to learn a ton from like, like land or other people that I’ve met. And I have great people helping me along the way. So I’m a little bit of luck and a lot of hard work for sure. So

Charles:
Awesome. Yeah. That was a fantastic points. So how can our listeners learn more about you and your guys’ business?

Glenn & Mike:
Our website, obsidian capital co.com. Both Mike and I are on there. It’s got our contact information on there and we have an investor portal that you can just log on and sign up there and you can become a part of our distribution lists. When we have deals that come out, you can click on them and see if you want to invest. They can buy my book, Charles, a millionaire on Amazon. Right. And it’s got a bunch of secrets in there. Great, great stuff.

Charles:
Yeah, no for sure. I will put links to your company and then also to the book and I want to thank you guys for coming on today.

Glenn & Mike:
Thanks. You are so awesome for having on your show. We appreciate we, we loved it. Had a good time. Hopefully, hopefully our listeners didn’t get frustrated, all a

Charles:
Lot of great information and hopefully we guys can meet up again sometime face to face when everybody gets back on the road.

Glenn & Mike:
Okay. Sounds good, man. Thanks to you guys later. Bye.

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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Links and Contact Information Mentioned In The Episode:

About Glenn Gonzales and Mike Woodfield

Glenn C. Gonzales, CPM is CEO, partner, and co-founder of Obsidian Capital Co. Glenn is an entrepreneurial individual with over 30 years of real estate experience. Since 1994, Glenn has been an instructor for multiple apartment associations including: Utah, Washington and San Antonio. Glenn served as Treasurer on the Board of Directors for the Washington Multi-Family Housing Association, and was elected as President of the Association in 2006. He also served a two-year term as the chairman of the Public Relations Committee and a one-year term as the Secretary Treasurer for the Institute of Real Estate Management (IREM). Glenn also owned and grew Place 10 Residential, a Dallas based Property Management firm with 6,500 units under management, which he has since sold as of late 2018.  Prior to owning Place 10, Glenn spent many years working in multi-family and commercial property management with companies such as Equity Residential, Evergreen Management Group, Glacier Management, and gained a great deal of experience at Pacific Property Company, a value-add investment firm.  He is also a licensed real estate broker in multiple states and received the CPM (certified property manager) designation from IREM. Glenn’s many years of industry experience coupled with his ability to motivate and lead has enabled him to build an effective management operation and assemble a strong team of professionals.
​Over Glenn’s time in the business, he has acquired and sold many multifamily properties on the ownership side, primarily in Texas and is continuing to aggressively and profitably expand Obsidian Capital’s portfolio. Glenn has owned over 4,500 apartments throughout his investment career.
Mike Woodfield got his multifamily experience from working for a small firm located in Austin Texas. Over the course of 5 years Mike oversaw the operations, asset management and construction management of nearly 5,000 apartment units totaling $300,000,000 in total assets under ownership.  During that time Mike oversaw the renovation of 2,500 multifamily units totaling $30,000,000 in improvements which created millions in value-add.
​Since co-founding Obsidian Capital. Mike has participated in the acquisition, asset management and renovations of 1000 apartment units.
Mike has a BA in Public Relations from Utah State University, experience in executing turnarounds for underperforming assets and over seven years of operation and marketing experience across multiple industries.

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