RES 259 | Capital Raising

 

How you start your business greatly depends on your drive, focus, and the people who are supporting you. Bryan Taylor, a manager of a management investing firm, walks us through his life achievements including his business focus and adventure. He believes that for real estate investing newbies, the best way you can educate yourself is by talking to as many relevant people as you can, getting details of deals, and adding value to what you do. Bryan teaches some strategies to help investors do better in capital raising and shares some tips on how to be successful in your real estate endeavors. Learn more about Bryan’s syndication journey and his own tactics in this episode.

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Capital Raising For Newbies with Bryan Taylor

Our guest is Bryan Taylor. Thanks for being on the show, Bryan.

I’m happy to be here, Whitney.

I’m pleased to have you on the show. We connected at a conference a few years ago. We’ve got together a time or two. It’s a pleasure to have you on the show. Bryan is the Director at a management consulting firm by day and investing plus real estate nerd by night. His love for investing can be traced back to his strong belief in value investing instilled by studying the life of Warren Buffett. The principles learned from value investing opened his eyes to the power of multifamily real estate investing. Over the last few years, Bryan has invested in various multifamily deals as a limited partner.

He helped raise capital as a general partner and is leading in sponsoring an 80-unit syndication in South Carolina. He’s focused on capital raising because of his passion for private deals that provide value-add, long-term durability and wanting his network to learn and participate in these private syndication deals. Bryan, thanks again for your time, sharing your expertise and knowledge with us and the audience. Give them a little more about who you are and let’s go into how you got into this business and your focus.

I’m one of these guys who’s got not only a day job but also a passion for real estate on the side, nights and weekends, that type of thing. I’m doing that balancing act at the moment while I’m still holding my full-time job. As I’ve learned more and more about the real estate investing world and the syndication world, it’s piqued my interest. It has taken up a lot of my free time on nights and weekends to study it, learn more about it, and network. I started to put some of my own personal money into some of these deals as well as help people that I’ve gotten to know raise capital. That’s where I am now. In terms of my journey, you’ve mentioned in my bio this passion for value investing.

If I were to rewind about a decade or so, I’ve always had a passion for investing and learning about Warren Buffett and other people that share or have a similar investing track record. It was from those learning about long-term focused investments, thinking about how to identify businesses that have a durable competitive advantage, and then holding them for long periods of time. It’s funny how that translates quite nicely into the real estate world, especially in this multifamily value-add world. It’s been a fun exercise in the past couple of years to take a lot of those learning, a lot of that knowledge that I’ve compounded over a decade and start to apply them to the real estate world. A lot of it does transfer and it’s fun to get to know the private markets.

You don’t turn into CNBC and see the ticker symbol for your apartment complex every day. It’s one of those things that’s a little bit private in nature and a lot of people don’t always understand the power of these types of investments. It’s been fun to do that. Lastly, the area that I’ve been focused more so on because it found a natural fit with my abilities and my passions is the capital raising aspect of the syndication deals, which is a very important aspect of putting a deal together. I love it because I love to talk about deals. I love to talk to new investors where this is something that’s brand new essentially to their broader portfolio. Educating them and helping them get access to these deals is a tremendous fun aspect of this career.

What was something that stood out to you as far as helping you educate yourself the best? The best way you educated yourself when you were getting started to learn this business and learn how to have those conversations with investors say you’re educated.

There are two things. One is talking to as many people as you can. The people that are in this world of real estate investing are very open to having conversations and teaching others. In general, there’s an abundance mindset in the real estate world that just because we bring in one more person into this world doesn’t mean the competition goes up. There are many opportunities out there that people love to share information. Number two, try to get the details of a lot of different deals. By that I mean when you can get on a lot of distribution lists from the various syndicators who will send you deals when they have new deals under contract. Read through those OMs, get to know them, send back feedback and send back questions. If some of the syndicators are willing, I even ask for the detailed financial modeling behind it.

Some of that can be proprietary. A lot of people keep that close to their chest but that’s how you get to learn the language. You get to learn the numbers behind the deals. You get to understand the business plan that they attempt to put forth with that particular deal. The more of those you read, the better off you’re going to be. Going back to this value investing education, the mirror of that would be reading 10-Ks or the annual reports that companies put out. The more of those you read, the more educated you’re going to be. In this world, you’ve got to read OMs. You’ve got to read the details of the deals that are coming across your plate because that’s going to teach you the language and the business plan. You’re going to get to understand what makes a deal unique, what makes the deal good and sometimes not so good.

RES 259 | Capital Raising

Capital Raising: Educating and helping new investors get access to syndication deals is a tremendous fun aspect of being an entrepreneur.

 

I like that a lot. I don’t know that I’ve heard that mentioned on the show before. Everybody said, “Educate yourself first.” A lot of people mention that and I’ll say, “How do you educate yourself?” Is there a book or is there something? Connect with as many operators as you can and even as a limited partner or as a passive, they’re going to put you on their lists most likely. You get their emails and you can see the deals they’re working on. You can follow up with questions. Send them questions, ask for more details, ask about the business plan. You’re going to learn a lot by doing that, especially if they’re in the same market you’re looking in.

You don’t want to forget that you also need to add value. You can’t always be that person who’s asking for things and asking for things. If you’re not going to be an investor and you’re always sending them questions, you might be annoying a little bit over time. You’ve got to have that balancing act of you want to learn but you also want to provide value to them in some form or fashion.

You have focused on capital raising and a lot of people are trying to figure that out. What part of this industry do I want to focus on? What skills do I have that are going to be best suited for what so I can do this the fastest? Everybody wants to get to the finish line as fast as possible. We find we never really get there but we keep moving forward. You mentioned having some abilities that helped you to know that capital raising was best for you. Could you elaborate on what those abilities were and help the audience as well that we’re trying to think through that?

I would answer that two ways. One is I enjoy talking about investing. I’m a self-proclaimed investing and real estate nerd. Getting into the details, learning about different deals and learning about the real estate world is something I’m naturally inclined to do. As an extension of that, teaching others and talking to others about potential deals in a potential real estate offering, I enjoy it. As a capital raiser, you have to be comfortable with talking to people about deals and also asking for money, which is sometimes an awkward situation. Having that comfort level and having that passion behind what you’re talking about translates very nicely. Second of all, I still have a day job as a management consultant.

In that day job, I interact with sometimes C-level executives on a regular basis. There’s a certain level of sophistication when you’re talking to executives in the business world. Having that conversation style and understanding how people at certain levels within businesses operate, how they think and what’s important to them. I wouldn’t say all of that translate but a decent amount of that does translate when you’re talking to people who are potentially going to invest. Most likely they are accredited while often investors, so they maybe think a certain way and certain things are important to them. I’ve picked up a few things here and there with those interactions that have helped me make those conversations.

You may convince someone to help them raise some capital and you may come to the table with very little capital. Click To Tweet

Lead us down the road of being a successful capital raiser like yourself or maybe some things that have helped you to develop that skill. You recognize that some of these skills that you have from your day job are some of the interests that you already had. They have helped groom you to be better at this specific skill in this business. What are some other ways or things that have helped you be successful and grow in that to get to where you’re at now?

If you think about capital raising in general, what are the important things? One is you’ve got to have a network. You have to have a solid network of people that know who you are that you’ve had conversations with. Maybe your old college buddies, maybe they’re friends of friends, maybe their family members. Whatever that network is, you’ve got to have that in your back pocket because that’s going to be the people that you’re going to talk to. From your career, from your education and so forth, just collecting that network. You also have to build some level of trust with your network. At least in my belief, that comes from two things. One is keeping in touch with them.

The people who are more regularly in contact with you have a natural inclination for higher levels of trust because you’re keeping tabs on them. You understand what’s happening in their life and their career and so forth. Whether it’s text messages here and there, whether it’s an email here and there, whether it’s, “Let’s meet up for coffee,” if that makes sense. Those regular contacts help provide some of that trust but then also, and this is the most important, you’ve got to deliver. It is talking about your wins when it comes to deals that have closed. Deals that are performing per the proforma that you talked to them about. Deals that have gone full cycle that have gone through some refinance or exit. Talking about those and being excited about them builds a certain level of trust that these things do work out in your favor if you’re willing to stick around in the long-term investor perspective.

These are ways that you have built some track record. You’ve built credibility with your investors. You’re staying in touch with them and you’re talking to them about your wins. They’re constantly hearing from you. They’re hearing how these deals are doing and you’re building that trust. Even if it’s through an email and they don’t respond, they’re still seeing that success. Tell me how do you keep in track with your investors and maybe how often and how do you do that?

To some extent, I’m fairly informal about it. I’ve learned from a few other capital raisers, there are lots of different ways to do this. Some are a little bit more formal and they have these scheduled almost updates of here’s what’s happening this month, this quarter or that type of thing. I wouldn’t say that I’ve gotten to that level. I tend to personalize a lot of my interactions. I know for John Doe, one of my potential investors, because of our previous relationship in some other form or fashion, we’re more on the text message. I’ll send him a text message here and there to keep him updated of certain things.

RES 259 | Capital Raising

Capital Raising: Talk about investing to people who love to listen and talk about it as well.

 

I know that I’ve got another set of investors that are more focused on, “Send me a couple of emails here and there of the actual deals that you have in the pipeline,” or update on some existing deals that maybe they had passed on. Maybe they want to know, “I know I passed on this deal but send me some updates because I’m interested to learn how these things progress.” I do it my own way. I know there are lots of different more formalized structured ways to do this and maybe I’ll get there eventually. I like to keep it informal as long as I am being intentional about reaching out to people, whether that be through different mediums and different avenues. The most important is that you are reaching out.

What kind of schedule do you have? I like how you said you’re going to personalize the interactions as much as possible. You’ll remember, “Maybe this person would rather text or that’s how maybe they would rather respond.” That’s great that you know that detail about your investors. Is there a way that you track how often or do you use a specific CRM or anything like that?

No, I’m a little bit old school. I have an Excel document that I keep updated. It’s a Google Sheet document that’s always maintained. I use some of those tools in my day job, like a CRM tool and I’m very familiar with them. I know that they are a powerful thing to use. As my network grows and I have more and more deals that I’m helping to raise capital for. Hopefully, I’ll probably get to that point but having that Excel document, where I’m having to maintain it. Having to get my hands dirty and making sure that I’m touching base with everyone helps keep it top of mind for me. I admit I’m a little bit old school when it comes to how I maintain that.

Whatever works for you. Done is better than perfect, but it might be perfect for you. As far as taking care of investors, give us something you do to stand out among other capital raisers, to work with investors or go the extra mile.

This is a powerful thing. That is to tell the story of deals that maybe you introduced to them that they passed on. They may tell you, “I passed on it so don’t send me any updates,” and that’s fine. It’s important for these investors, especially if they’re somewhat new to real estate, to understand how these things worked over the course of several years and certainly over the course of a full-lifecycle. Take advantage of that. If you’ve raised capital for a deal or you’re personally involved with the deal and you’re getting updates from the operator in terms of how things are performing operationally, financially and things like that, take that information. Summarize it into some bullet points that are easily digestible. Send that out to some of the investors and say, “I know this is the deal that we talked to you about. I want to let you know here are how things are going.”

The people that are in real estate investing are very open to having conversations and teaching others. Click To Tweet

When people are able to see it, we operate in the private markets. There’s no ticker symbol and there’s no CNBC that tells you what’s happening with these deals. You have to be that intermediary that summarizes it and showcases, “Here’s the power.” A good friend of mine in this real estate world had sent me a long email saying, “Here’s an example of the power of real estate investing.” It was because one of his deals, they had done a refinance and they sent back 40% of the original investors capital while still maintaining ownership of the property at the same levels. He sent it out to his whole network saying, “Here’s a deal I was involved with. They already returned 40% of my original capital within a couple of years, plus we’re going to maintain ownership and get our preferred dividends going forward.” That was several years ago. That has always stuck with me. That’s a very powerful thing with these types of deals. I wasn’t involved in that but it got me excited about the next deal or learning more about this syndication world.

What about working with operators? How do you choose the operator? You’re coming in on that deal and on the general partnership side as well. You’re having other roles or even investor relations. How do you choose who you want to work with? A lot of people get into this industry by doing exactly what you’re doing. Some people choose to grow that business and be good at it, while others have other abilities to choose to do something else. How do you pick the operator you want to work with?

I reflected on that but I went back to all the deals that I’ve been part of, that I’ve invested in or that I’ve raised capital for. I asked that same question to me. How did I get to know these people? How did I get that level of trust with them? I found that the common thread among all of that was someone had introduced me to them. That’s such a powerful thing in this world. I don’t go to actively seek out operators. I meet them at conferences. I see them on BiggerPockets or other avenues and things like that. It’s those introductions of people that are in my network that say, “So and so operator has got some deals coming up in the pipeline. They’re a very interesting group. They’ve been delivering for me.” That also helps because maybe they have provided an introduction of me to the operator, which helps facilitate some of that. That’s been the number one thing. It’s building a reputation in this area so that people will make introductions on your behalf on the right people and then following up on those introductions and forming a relationship from there.

What about managing this business while also working full-time? How do you keep all that going?

It’s not easy. I’m sure you’re aware that I look up to you because of the amount of effort and time that you put into things. You just got to make it work. Luckily, this is the type of business from an investor perspective, you may get phone calls and emails from time to time during the day. You may have to divert some time to focus on that. A lot of it can be accomplished in the evenings and the weekends, that type of thing. A lot of it is studying deals, writing emails, and following up with certain people. I always talk about it from a 9 to 5 perspective. There are some things that come up from 9 to 5, but often you are in control of the time and the things that you need to put into this type of business. That can certainly be accomplished in nights and weekends. It’s not easy in terms of having a full-time job and then trying to build this on the side. If you’ve got the passion and you see the result of it, it comes naturally.

RES 259 | Capital Raising

Capital Raising: When you have built a good reputation in your business niche, people will make introductions on your behalf.

 

What has been the hardest part of the syndication journey or process for you?

If I were to talk about capital raising specifically when you’re getting started, it could be tough. You may convince someone to help them raise some capital. You may come to the table with very little capital. You might think that’s going to hurt your reputation because you weren’t successful in delivering a ton of capital. That can be a tough thing. No one enters this world and then within a month or even shorter, makes these leaps to where they’ve got a fully flushed-out investor network and they’re able to deliver high levels of capital every deal. You got to be excited and proud of the baby steps. Even if those baby steps may not meet someone’s expectations, you know that you’re at least going in the right direction. It can be an exercise of humility when you have a deal that you think was good and you weren’t able to raise enough capital for it, which is perfectly fine. It’s all about the baby steps and make progress.

I like that you have to be proud of the baby steps. That motivates you to keep going forward. What about the ways that you’ve improved your business that we can apply to ours?

Being on your show is a big part of it. As a capital raiser, having my name out there and the name of my business is important. I always have, at least from my experience thus far, operated in the shadows. I’m building my network and I’m getting to know people, but I guarantee you there are not a lot of people across the syndication world that know who I am or what I bring to the table. From a capital raising perspective, a large majority of it is marketing. You’ve got to get your name out there. You’ve got to believe in the deals that you’re able to put together and the deals that you’re able to deliver for your investors. The rest of it is talking about it and making sure that people are aware of the power of it and not being shy about that. This is an initial step of me making sure that my name is out there and things like that. You can’t operate in the shadows forever.

What’s the number one thing that’s contributed to your success?

You got to have that balancing act of wanting to learn but also wanting to provide value to others in some form or fashion. Click To Tweet

I would say the people that I’ve surrounded myself with. You meet a lot of great people as you enter or get familiar with the syndication world, especially when you’re raising capital because you’re talking with operators and investors. You see all sides of it. There are a few key people that I’ve gotten to know. Some of these relationships go back years and years that I have kept in touch with. I always see them as one, two or three steps ahead of me in terms of their real estate investing or syndication and whatever path they’re taking. They are several steps ahead of me. Surrounding myself by people that do the right thing, have integrity, are passionate about this world and that are a few steps ahead of me that I can look up to is critical. I know there are a lot of mentorship programs out there. Personally, I’ve never gone through one of those. I like to form my own types of relationships that are a two-way street. Even though those people are several steps ahead of me, there are still things that I can do to help add value to what they’re doing and they’re more than happy to return the favor. Staying in touch with those people, identifying them and building that network of a few people that you can rely on is critical and I’ve seen that to be successful for me.

What has been the best way for you to meet the investors either on your list or the ones that have invested with you? Has that been the relationships that you’ve had through your day job for a while? Has there been another avenue where you’ve been successful to meet investors?

It’s been through my travels as a person over many years. That’s both career, personal and family. I didn’t know that I was going to be a capital raiser in the real estate world many years ago. What I’m lucky to have done over many years of my career is keep in touch with people. That was because I believe in the power of network. If you’re in the consulting world or in the business world, you know the power of your network and relationships from a pure career perspective. I’ve always done a good job of maintaining these relationships with people.

It doesn’t have to be seeing them somewhere once per weekend or a year, that type of thing. It’s keeping in touch with them. That has naturally transitioned well into capital raising because they have always been hearing from me nonetheless, not just they hear from me from a slightly different perspective. I have not actively gone out to seek out investors. I’ve met some at conferences and we’ve kept in touch that way and that’s been successful. The majority of mine have been the accumulation of these relationships.

Bryan, tell the audience how you’d like to give back.

RES 259 | Capital Raising

Capital Raising: It is vital that you surround yourself with people who are passionate, have integrity, and are good role models.

 

I would answer that two ways. One is that this world is so open and people are willing to give back, provide information and provide value. I’m one of those as well. If anyone has questions about how to get into capital raising and that type of thing, I am more than happy to give up my time. I’ll send them some templates, some old deals that they can look at, they can digest it, send me questions about and that type of thing. That’s from that perspective and then from a broader perspective, my wife and I are pretty involved in church. We give back through that way as we’ve been lucky enough to have the means to do that and we want to give back that way. Those are a couple of ways.

Bryan, tell the audience how they can learn more about you and get in touch with you.

You can go to my website, InvestWithOpenDoor.com. The firm I have is Open Door Capital and you can reach me at Bryan@InvestWithOpenDoor.com as well. I’m on LinkedIn and a lot of different social media spaces as well. I’m easy to get a hold of.

Bryan, thank you so much for the value you’ve provided to the audience and to myself. I appreciate our audience for being with us every day. I hope you’ll also go to Life Bridge Capital. Connect with me and join the Facebook group, The Real Estate Syndication Show, so we can all learn from experts like Bryan and grow our businesses together. We’ll talk to each of you soon.

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About Bryan Taylor

RES 259 | Capital RaisingBryan is a Director at a management consulting firm by day and investing + real estate nerd by night. His love for investing can be traced back to his strong belief in value investing instilled by studying the life of Warren Buffett.

The principles learned from value investing opened his eyes to the power of multi-family real estate investing. Over the last 2 years, Bryan has invested in various MF deals as an LP, helped raise capital as a GP and is currently leading/sponsoring 80-unit syndication in South Carolina.

Bryan is focused on capital raising because of his passion for private deals that provide value-add, long-term durability and wanting his network to learn and participate in these private syndication deals.

 

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