“It’s definitely fun to get to wake up every day and chase your own dreams instead of going to check in at a job and build somebody else’s.”

-Wesley Yates

 

Wesley Yates is a proud marine veteran with over nine years of active duty service that brings a strategic outlook and goal oriented mindset to the team. He has mentored and trained over 2000 individuals for leadership and development roles. He was recognized in 2013 by Congressman Ralph Hall for his outstanding character and service to his community. He has a bachelor’s degree in business administration, with a concentration in finance from the University of Texas at Tyler. In late 2018. He turned down an operations management opportunity with Amazon to begin actively networking within the real estate investing community. Quickly building relationships with other like minded entrepreneurs has created an extensive network of accredited investors who believe in his vision for methodically acquiring commercial assets. Wesley is also an enthusiastic leader and brings with him skills crucial in building successful teams and driving performance. 

 

In this episode, Trevor and Wesley discuss:

  • How Wesley started his real estate investing career.
  • Where to find properties.
  • Types of Asset Class.
  • How to build a successful team.
  • How to raise capital and the process of analyzing a deal.

 

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Can’t Hurt Me | Best Ever Syndication Apartment Book

 

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Email us: Trevor@podcastingyou.com

Full Transcription Of Today’s Episode

Trevor Oldham  00:46

Hey, everybody, welcome back to the real estate investing exposure podcast and today on the show, we have Wesley. Wesley is a proud marine veteran with over nine years of active duty service that brings a strategic outlook and goal oriented mindset to the team. He has mentored and trained over 2000 individuals for leadership and development roles. He was recognized in 2013 by Congressman Ralph Hall for his outstanding character and service to his community. He has a bachelor’s degree in business administration, with a concentration in finance from the University of Texas at Tyler. In late 2018. He turned down an operations management opportunity with Amazon to begin actively networking within the real estate investing community. Quickly building relationships with other like minded entrepreneurs has created an extensive network of accredited investors who believe in his vision for methodically acquiring commercial assets. Wesley is also an enthusiastic leader and brings with him skills crucial in building successful teams and driving performance. Wesley, super excited to have you on the show today.

 

Wesley Yates  01:49

Thank you. Thank you, Trevor.

 

Trevor Oldham  01:51

And for our audience that’s listening to this interview, and they’re coming across you for the first time I love for you just to go into your background a little bit more and how you got started into real estate investing.

 

Wesley Yates  02:02

Yeah, so real quick, got out of the Marine Corps after nine years of service and was kinda in that, oh, gotta take a job. I had to fight for my, you know, my benefits and all that took two years before they even were like, Oh, yeah, hey, we found your stuff. Like they kept telling me I didn’t exist, started going to college, completed an actual engineering degree, and then jumped into finance at the very end there. So I have a bachelors in finance, but the interview with Amazon, they’re ready to go, they were ready to give me started to let me take over one of the facilities that they had just finished building up in Oklahoma City, and was excited about that. I was a single dad at the time, and met a beautiful woman that is now my wife, but she was actually the one in real estate. And so went to one of her networking events, and then went to another networking event. And then you can see it kept going. Eventually, I guess caught a few eyes of some entrepreneurs that were real estate investors and they invited me to one team and kind of dove right into that and was like, hey, you’re leaving a lot of meat on the bone and started offering my advice of all that and they were like, oh, wow, which you know, kind of trickled into the next thing was true to the next thing and by the time my start date rolled around for Amazon, I decided to say you know what, I think I’m going to just go all in one on me and chase down this real estate stuff, see what I can do out of that and turned down the Amazon gig and, and went all in on real estate and it’s a it’s been a rocky ride, but it’s a it’s definitely fun to get to wake up every day and you know, chase my own dreams instead of you know, go check in at a job and and build somebody else’s. So definitely enjoying how it’s going so far.

 

Trevor Oldham  03:50

And for the real estate space. Is there a certain type of asset class that you’ve been looking at that you’ve been interested in? Whether that’s a multifamily Self Storage, mobile home park, and then even then the fix and flip plan as well?

 

Wesley Yates  04:02

So yeah, I started off wholesaling, I think, like most people do, and, you know, kind of went from there to syndicating that was going to be multifamily, you know, your apartments, your typical value, add space, and did that for a little bit, got invited to do some hospitality. I had no experience doing any of this, just going to network events, meeting people and they were inviting me and I remember when I got invited to be a part of a syndication team. I actually asked, do I need a license to do that? And of course that got me laughed at but I was like, No, I’m kind of serious about it. But just showed up, had no experience and didn’t know what a single acronym was. And just hit it. Just hit it and just started talking with people engaging with them, exchanging information exchanging, you know, contact information following up with the right people throughout myself with the successful crowds and constantly just trying to be the dumbest guy in the room and learn from all the ones that are, you know, had been there done that, that got me picked up, you know, just that mentality. And that drive got me picked up by a guy that does hotels. And from the first month of figuring it all out to the month we had three contracts. One was a Hilton one was a staybridge. And one was for choice. So, and that was an interesting walk and pick that up and also had an invite to start consulting for property management for really Hospitality Management. Keep in mind, no background had about four months under my belt at that point, but just how I looked at processes, how I looked at leadership and team development, and was able to just dissect that industries, you know, knowledge, and just how I could adapt what I knew to what, you know, everybody else around me that were already in this industry knew, and, you know, playing my strengths over my weaknesses, and was able to still be a part of several teams, that got me invited to be a fund manager. So then from there, I was a co-manager of a $100 million fund. And while in that fund, we were going back after multifamily, and then kind of started a veterans and first responder training program where I was hosting, like a daily meeting. And then I went to a weekly meeting and actually ended up building a team out of it, I just had a lot of, you know, that synergy with those, you know, similar minded people with me. And we now have VFR capital investment as we officially started that decision to pursue that October of last year, which is 2020. And already have two properties under contract, scheduled to close on one hopefully next week, supposed to close yesterday, but you know how things go. But we’re ready to close that one and move on, we are focused primarily on multifamily value adds, you know, 1970s to 1990s, we’ll also are starting to move in made some recent connections, with some strong developers moving into the RV park space, as well as you know, developing pre existing and also developing multifamily. So wanting to expand within the commercial real estate as best we can without dividing ourselves too thin, so that we still give that quality of service that we want to be known for.

 

Trevor Oldham  07:47

And for the properties that you’re purchasing. Are you looking in the state of Texas, you know, the surrounding states? Or do you go outside, you know, that known area, say, and Tennessee or Ohio? Where do you stay kind of local to your area?

 

Wesley Yates  08:00

So primarily what we have under contract right now is in the state of Texas, some of our partners have deals out in Alabama and Georgia, we’ve started screening for pretty much anything across the southeast, we’ve really been leveraging the networks of or teams that we’ve networked with and build relationships with. So we do have a very unique pipeline of how we leverage our team and our experience of bringing in off market opportunities, and really screening that. So we do start with looking at the market. So we don’t necessarily draw yourself to we’re only going to work in, you know, DFW or just Texas or that, but if you you know, if we get a hold of someone, they’ve got an off market deal. And you know, let’s just say Cleveland, Ohio, well, I’m going to pull up all the market research real quick on Cleveland, Ohio and see if you know, look at the big area and zoom in to the sub market down to the block that that property sits on and say, Okay, this meets all of our marketing criteria, you know, crime, job growth, you know, things, you know, things that everyone else is looking at, but really getting Granier on on that market before we even start dissecting the the asset itself. So

 

Trevor Oldham  09:16

yeah, it’s crazy to me. So I’ve been looking to do my first multifamily deal just on a smaller scale, one to four units. And while I’m in Massachusetts, numbers don’t make a whole lot of sense. So I’ve been looking outside of Massachusetts, and I’m more towards New York and my fiance’s family. I have a real estate mentor, and I’ve been sending him over these properties. And it’s crazy that I didn’t even know that he sent me the rent ometer report. He sent me all these statistics on job growth. It’s just crazy to me how, you know, I can be in Massachusetts and know everything about this specific town more so than the town that I’m currently living in, in the state. It’s just crazy how much information is out there for anyone that’s looking to, you know, expand beyond their, you know, local space because I always thought that it was you know, you want to invest in your local area, but then not realizing that there’s deals to be had You know, all over the country?

 

Wesley Yates  10:01

Yeah, no, and what we do to leverage the whole not being in there, we don’t, we don’t have to be there ourselves. But we will find boots on the ground that’ll still be within, you know, 30 minutes to an hour of our property that can go and, you know, hey, put out a fire if they need to. And, and really just kind of be that on, you know, eyes on sight. While we’re, you know, kind of back here running all the numbers doing everything on the back end. But with the technology today, and as we are right now on zoom, and we’re several states away, we’re still able to communicate and effectively, you know, acquire and operate multifamily. So that’s one thing that you just got to, you got to be able to adapt with the times and, you know, zoom and the internet and all these electronic software’s now, really do allow someone that’s in, you know, Texas to be screening a deal as thorough as they need to be out in, you know, Augusta, Georgia. So just to kind of throw out a random, you know, location. But, you know, there is I mean, we do a lot of research, like you’re saying, doing the market, Nomad pool and co stars doing, you know, doing all of the crime reporting, you know, having having a few police officers on my team does help, because they’ll kind of call that local police officer. Hey, look, do you patrol this area? Yes, I do. Tell me about this property specifically. What do you know about that? We’ve done that a few times, when we were in a property, we’ll see a police officer nearby, will wave them down, stop, be like, hey, look, so you know, show his badge and we’ll get the real scoop. And I mean, that’s a good little trick. If you’re not doing it, you want to know the the down and dirty what the numbers won’t show, find a local police officer that patrols that area, they’ll tell you, oh, I get so many calls this, I get that or Oh, that’s just the quiet place, great place, you know, I live like, three blocks down from there. So that’s a good little trick to utilize as people that are already in that market that know it? Well.

 

Trevor Oldham  12:00

An excellent point. And as you know, you’ve been in the real estate space. And as you’re exploring these different markets and these different opportunities, how have you been able to build a successful team and you think that it comes from the party we’re back on being in the Marine Corps.

 

Wesley Yates  12:14

I think 100% of it is my background in the Marine Corps. I mean, that’s something that I was very strong with doing in the military. And I was really good at it. I was a martial arts instructor for a good bit of time as a marine. And I follow a lot of the strategies that we have for that, you know, explain, demonstrate, imitate, and practice, you know, the fourth step, eat it, that I break down a lot of stuff that, hey, I can learn something really quick. Break it down how it makes sense in this hole, if my brain can understand it, then I can relay it and teach it to everybody on my team. And you know, I’ve got an analyst that’s a former Marine, actually, one of the guys I helped get into the Marine Corps over a decade ago. And he’s, he did five years in the Marine Corps security forces got out as an archaeologist went through school to be an archaeologist really good at just analyzing, analyzing data, as like, you know, I think you would be really good at at underwriting through a few spreadsheets that we’ve been working with him almost daily, for the last nine months. And I mean, he’s picked it up, he’s got it. And he’s a real leverage. So I think what I fall back on is really getting to know your team, know their strengths, you can’t put a you know, a round peg in a square hole, or a square peg in a round hole and all that, you’ve got to know what people’s strengths are, where their weaknesses are, how to utilize their strengths, to put them in a role that’s really going to capitalize off of those, while you take the time to also come back and mentor and develop on their weaknesses. I tried not to be the only point of you know, information, education and training for my team, I try to encourage them, hey, here’s a great networking event, or hey, here’s a great podcast. Here’s a great article. And I try to share that with them that’s specific to you know, their role on our team here. So just but yeah, most of everything I do is stuff that I’ve taught on how to build and develop teams from the Marine Corps.

 

Trevor Oldham  14:22

And that’s excellent. And let’s say that there’s a real estate investor out there. That’s, you know, they’re on their own, they’ve been on their own, they’re looking to build up a team, they start adding employees to their team, have you ever encountered that encounter an instance where you’ve added a team member, and you knew, say, a month to three months in that they’re probably not a fit, you know, maybe they’re personality wise, maybe they’re, you know, for whatever reason, have you ever encountered something like that? And if so, how are you able to sort of, you know, let them go or to get them to be on the same page as yourself?

 

Wesley Yates  14:50

Yeah, so that’s, that’s the hardest part about being a leader is, is knowing when it’s time to let somebody go, you know, They have that saying, you know, hire fast or hire slow fire fast. And, you know, I look at these teams and I tried to find a way to give them that mentoring, give them that coaching that they need. But it’s at that point where it’s, you know, they both know, you know, they know, I mean, you’re not working with, you know, just kids you’re working with, and especially in my team, I like to be on my team, we started off with the with 12. And after this weekend, we’re down to five. But you know, as we’ve kind of, you know, let some people go and say, hey, look, this just isn’t a good fit, we’ve got a certain quality, we got a certain vision. And, you know, we’re just not seeing that, for the most part, as I’ve started to have that conversation, I would say a good 50% of them have, have already stepped down before I could even when I have that, hey, can we talk, you know, and then they’re like, hey, look, I just don’t feel like I’m pulling it, I don’t feel like I’m hitting the goal. I don’t want to drag the team down. And I think I need to just step down for now until I can, you know, have more time or, or get more training, and then I’ll come back. So for the most part they have and I don’t know if that’s just unique to the you know, the backgrounds that everyone comes from with us veterans and first responders. And it’s just, it’s really a team oriented mindset. And you know, like, you’re only as good as your weakest person. I mean, and knowing when you’re the weakest person, you’ve got two options, you can crunch harder, figure it out, overcome it to step up and catch up to the group and that pace. Or you’ve got to bow out and wave the white flag and say, Hey, guys, I can’t keep up with y’all. And I’m not slowing down. And that’s something I told everybody from that standards document. A lot of people, man, just going too fast, you’re going to slow down. No, I just need to find people that can run at my pace. And that’s something that I encourage everybody to really look for. So if you’re getting new into this, be cautious of who you partner with, be cautious of who you put your name with. But be quick once you know, it’s time to go and you’ve got that gut feeling I’ve had to walk as I just told you briefly, I’ve had to walk from a few opportunities, because it wasn’t the right fit for me. The team’s morals and ethics didn’t align with mine. And now I’m leading my own team. I mean, I’ve been doing this for two years now. And you know, that’s a short period of time, I’m still technically a baby in this industry. But I don’t wait around for someone else to tell me I’m ready for that next step, I just take it. And I figured it out. I mean, closing this deal, there were so many things that I was in charge of, I’d had no training and no education, but I just wanted it and I wanted it bad enough that I figured it out. Now something that we’re starting to do, as far as VFR is we want to give back, we’ve got a lot of connections, I mean, we’ve put two deals under contract for getting ready to close, we want to keep that momentum where we are able to do a close about every 60 to 90 days. And we want to partner with people that are trying to figure it out, need to show the ropes and can’t necessarily afford, you know, a 30 $40,000 you know, education course, to learn all this will show you what we can do to find your strengths. And if you’ve got, especially if you’ve got to deal at hand already, we’ll help you dissect it show you some of the things that we look at that are, you know, conservative, but at the same time realistic, and, and be happy to partner with you and take that down where you know, we can help you take some deals down. So that’s something that I’m excited that I think the second half of this year, we’re really going to be focused on trying to really give back and, you know, I share some of our strengths, some of our our findings and our strategies to other teams and partner with them and create Win Win opportunities to help others to where you know, we can be their training wheels getting started. And then when they don’t need us, you know, I’m not gonna sign a no compete. I’m not that I just want to see other people successful. There’s plenty of markets, and there’s plenty of deals out there. But one thing I love about syndication specifically is it can be a team. It can be a team and it ain’t just you got to be a part of mine, but two teams can partner and really be greater for it. So but yeah,

 

Trevor Oldham  19:36

And for the syndication deals that you’re putting together, are you raising capital from your team? Are you reading it from friends or family members or you’re just going out to outside investors and then going along with that, as you mentioned, you know, someone like yourself who you know, is a couple years into the business and trying to what’s the you are pulling out outside investors money, how are you able to attract that given you know, a newer track record than just someone that’s been in the business 2030 years.

 

Wesley Yates  20:02

Yeah, so we do raise capital, what we usually will tend to do is one of our co sponsors on a deal will be the capital raiser. And we kind of I’ve, I’ve learned from my past mistakes, you never want to be down to that final week, and not have enough money in the bank. So what we tend to do is those that are stepping up and saying, Hey, I will be the lead, or a lead on the capital raising, we want to make sure what they feel confident in is two times your actual race. So if we’re trying to raise a million bucks, I want to have as much as the CO sponsoring team, the capability of raising 2 million. So that’s really where I’m at there as far as how to attract I mean, nothing sells like success. And if you’re getting into this, and you’re new, even where I’m at right now, I don’t have the schedule of real estate and the track record and the experience that some other people do. So you got to find that. And you got to partner with that. And you have to be willing to bring something to the table. So that person has got 2000 3000 doors under their belt, sees an opportunity and works with you. And we’ve worked with a few other co sponsors, one that’s very popular in the DFW area in the southeast is Georgia brew, and Eric body Wallah over at the elevate team. And we’ve partnered with them on two deals. So that really does help us say, hey, look at us, we’ve got the operations. We’re a very good, strong moral team. But where we’re weakness is our door count. So what do we do? We slap elevate next to our name, and hey, they’ve got you know, $3,000 in their pipeline, boom. So when they look at us, like, Oh, these are some good looking guys, I like your backstory, oh, well, there’s the way there’s the heavy hitters. Yeah, I will give you a shot. Here you go. So that’s something that we can bring to you if you’ve got to deal or if you’re wanting to get into this will leverage our networks to make sure we can put together the right team for a job. And really tackle it, you know, case by case.

 

Trevor Oldham  22:09

But that’s perfect. And I want to hop into, um, let’s say that, you know, you’re looking at a property that’s out there. And even if the property does cash flow, and the numbers look, you know, let’s say that they do make sense. Is there a reason I know you mentioned earlier on sometimes you may come across a deal. And you know, it just doesn’t isn’t the right fit for your team, do you mind taking us through the process and what that looks like when you’re analyzing a deal. And that even though it may still be cash flow, that still may not be the right fit for you to you know, start putting it out there and investing capital towards it.

 

Wesley Yates  22:39

Yeah, so we put a lot of time in this. I mean, from October of last year to March of this year, we had underwrote over six and a half billion dollars worth of real estate. That was about an average of 100 deals a month. And it was a lot, it was a lot. And through that it was really building out our processes, trying to find, you know, key little indicators to see what deals were going to work for us and what deals weren’t. Now we’ve tweaked down on what we do. And, you know, we try not to have more than five in the pipeline at a time because what we have is straight off market where they’re working straight to the seller, or with the seller’s rep and it’s off market. So we’re trying to move quick on it, you know, I get all of our stuff, but just because it’s cash flowing doesn’t necessarily mean it’s a good deal, you’ve got to make sure is meeting your investors criteria, you know, showing the returns, you know that a lot of them will look at a certain cash on cash, an IRR and a total return on investment, you’ve got to know what your investors are looking for before you can even say a deal is going to be working for them or not. But you also have to make sure that you’re not being too aggressive, that you’re not even going to be able to hit those minimums that they’re looking for. So you’ve got to play all of those things into you know, what is your what’s going to be your capital stack, you know, what’s your, your debt service looking like for that property and a lot of that that the lender looks at is the location of the deal they look at the the current condition of the property, what is cash flowing out and then they also look at your team, you know, all of those things amongst a few others really go into effect on what kind of terms you get what kind of leverage you’re able to get on a deal and can affect a lot to do with you know, you’re you’re in final product and you’re in final pitch on that for that for those your summary of returns. So what we really do is we make sure if it works for us and how we see it, it’s just based on the market averages of what we’ve seen in that area. We go out and we do the tours and then we get several debt quotes on it from lenders that we know that have you know we’ve closed deals within the past We also look at getting a very strong property management company that’s managing in that area that will come look at the property, look at the numbers, do all of their research, and then give you their performer where they at. So I don’t share too often, like where I see the property is I want to give the property management company, all the information that I came to my conclusion on, and then let them tell me and usually we’ve gotten to the point where we’re almost within five bucks of the rent rates and the performer rent rates. And, and that’s really important, and having, you know, elevate amongst other strong construction background teams that are going to be able to, you know, hey, give you a good, you know, summary of your capex and your cost and the breakdown. That really helps us a lot. So you’ve got to make sure you’re doing all your research on the cost versus just the price. So

 

Trevor Oldham  25:58

yeah, I think that’s, that’s perfect. But Wesley, I want to be respectful of your time today. And as we come towards the end of this interview, I just had a couple additional questions that I want to ask you. And the first question I wanted to ask you is, do you happen to have a favorite real estate investing or a business book that I’d recommend for our audience to check out?

 

Wesley Yates  26:17

Yeah, if you’re doing syndicating, I would say the best book that helped me answer just all the stuff was, of course, Joe fairless, his best ever syndicating book that has probably the best breakdown of everything as far as what I’ve read. But it’s to me, I’m more of a mindset guy. I mean, knowledge can be learned in the process. But if you don’t have your mind right, going into that battlefield, you’re never going to be successful. The first time you hit a hurdle. The first time you hit a wall, you’re going to quit. So one of my favorite books that I like is, is you can’t hurt me by David Goggins. And David Goggins is a seal that and he talks about his journey of how he what it took for him to become a seal and all of his that, but there’s one specific, there’s one specific chapter in that book that talks about kind of dealing with that man in the mirror, and you got to be real with yourself, you know, and, and I’m one of those, I can’t, I can’t just take the hole, oh, it’s okay. You’ll figure it out. No, I’m the exact opposite. I’ve got to be like, don’t be a lazy piece of crap. You gotta figure this out. Don’t you know, don’t let everybody else put you down. Don’t be that, you know, turn that on. So I mean, I get real with myself and I’ve shoot I flipped down my visor a few times driving down the road, and just looked at that little mirror there and just started, you know, giving myself that you know, that drill, instructor type, you know, your utter, don’t be deterred type stuff and quit or you want to talk about being tired. You can rest whenever you’re at the top of the hill with lights, let’s climb. And that’s just how I get my mind. Right. And, that was an awesome book. I love that book. If David Goggins ever hears this interview, and wants to connect, I would be more than happy if that guy is overly motivated. So good stuff, but that’s where I would be.

 

Trevor Oldham  28:12

I can definitely attest and recommend that book. I remember hearing him on a podcast, I think this was before his book came out and just hearing his story and how fascinating it was. And that’s where we had that story where he ran around the track for I think, for 24 hours straight, and his legs and his feet were broken, or I haven’t read it in a while. But as we’re reading such a crazy story, obviously when you see photos of him and he was working at a pest control company, and he was overweight, and then obviously becoming a seal and now I think he does ultra marathons through the deserts in California. So it’s definitely a crazy book and definitely an excellent one for the mindset for those who are listening.

 

Wesley Yates  28:49

And I will say this, I know most people like to read the book over audio. That is the one exception I will say that it’s the one exception. And if you listen to the audio version of that, they pause it periodically throughout the book and it’s a live interview with David and the narrator stops and goes Wow, can you give me a little bit more backstory? So you get an interview along with the book being read in that audio version of it highly recommended a lot of little tips and tricks and behind the scenes of David from David of that story, so recommend that for sure.

 

Trevor Oldham  29:25

Yeah, I’ll definitely have to check out the audio version for myself because I’ve listened to him on podcasts and as I mentioned, read the book but never listened to the audio book. So I definitely have to check that out. But Wesley’s last question today is where can our audience find you?

 

Wesley Yates  29:40

Yeah, so you can of course find me on Facebook Wesley eight. So we do have a Facebook team for us VFR capital investments. That’s our Facebook, LinkedIn. But if you just want to email me directly with any, you know, any questions or just kind of chat, it’s wesley@vfrcapitalinvestments.com and that is V for veterans for first responders. So that’s where you go find me. I’d be happy to chat with anyone, set up a time and if there’s something that we can do to help you be successful and close your first deal. That’s what we’re here for.

 

Trevor Oldham  30:17

Awesome. I’ll make sure to include that in the show notes of today’s episode once it goes live and Wesley. Thanks again for coming on to the show today.

 

Wesley Yates  30:24

Thank you for having me, Trevor. I appreciate it.