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WS1257: Can You Compete Against Blackstone? with Ryan Webster

Blackstone, the largest owner of commercial real estate in the world – who would want to go head to head with the colossus of the industry? But Ryan Webster, founder, and managing partner at Equity Yield Group has been taking on the big players in the past year, bidding against the likes of Blackstone and Greystar and acquiring $165 million in assets with 665 units all in a span of 12 months. How does Ryan do it?

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In this episode, Ryan talks about the most important aspects of running the syndication business that allows him to stand shoulder to shoulder with industry stalwarts. Listen to him talk about ‘doing ordinary things extraordinarily well’ to set his company apart from the others. 

To hear all of Ryan’s valuable insights, join us today!

Key Points From This Episode:   

  • Ryan introduces himself, his company, and their focus on multifamily real estate.
  • Ryan’s shift from construction development to stabilized multifamily assets.
  • What it takes to acquire 665 units and $165 million worth of assets in the last 12 months.
  • How Ryan’s company competes with the big industry players (Blackstone and Greystar).
  • How Ryan’s company raises large amounts of capital in a short period of time.
  • The value of mentorship, partnership, and playing to each other’s strength in syndicating large deals.
  • The importance of having aligned vision, branding, investment strategy, and business framework when forming a partnership.
  • Ryan describes how they structure deals and what metrics to consider to adapt to the current market conditions. 
  • Ryan’s outlook on the real estate industry for the next year and his preparations for a downturn.
  • Strategies that Ryan’s company uses to stand out among the giant industry players like Blackstone.
  • Sources of new investors.
  • The number one thing that’s contributed to Ryan’s success and his way of giving back.

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“That’s where the value of mentorship comes in – in being able to dodge some of these obstacles, being able to leverage a knowledge experience of someone who’s been there prior.” 

“Real estate is a great investment. There’s huge value in being in hard assets, and being in illiquid assets right now, especially if those assets are generating cash flow.”

“Be easy to work with, you can’t be a pain in the butt to transact with. That is really the only advantage we have against these institutions.”

“Responsiveness is a big thing for me. If it shows up on your desk or your inbox, get it taken care of. These things can snowball real quick if you’re not responsive on them.” 

“Determination and grit – the willingness to get up the next morning and get off the mat and do it again. That’s a key to success.”

“It doesn’t matter if you’re charging 4 or 5 grand a month for rent. If people can’t pay it, your bad debts gonna eat you alive. It’s really about what you’re actually collecting not what you’re charging.”

Links Mentioned in Today’s Episode:

Ryan Webster on LinkedIn

Equity Yield Group website

About Ryan Webster

Ryan is an NHBA award-winning home builder, experienced real estate professional, and entrepreneur. Ryan is the founder of Equity Yield LLC and has over a decade of experience owning and operating a Midwest-based construction, and development company, with a wide range of project experience managing new construction, and value add multifamily projects.

Full Transcript




Ryan Webster (RW): It’s a lot of effort. It’s a numbers game and you gotta have the mindset, you know, to get kicked in the teeth every day and then wake up the next morning and do it all again, knowing that eventually, you’re going to hit one. And we’re really disciplined in the assets that we buy. We have a really low strike ratio and we’re looking for institutional quality assets. So, we’re always betting against big institutions, you know Blackstone and Greystar, and losing very regularly to them.


Whitney Sewell (WS): This is your daily Real Estate Syndication Show. I’m your host, Whitney Sewell. Today our guest started buying commercial real estate 24 months ago, started that business. He and his business partner purchased their first piece of commercial real estate 16 months ago, and are now competing on $50 million projects against institutions like Blackstone. His name is Ryan Webster. He’s a real estate professional, entrepreneur, and an NHBA award-winning home builder. Ryan is a founder and managing partner of Equity Yield Group specializing in multi-family. You’re going to hear numerous things today about the $50-million project, competing with Blackstone. How did they get there? And how did they do it so fast? I know you’re going to learn a lot today.



WS: Ryan, welcome to the show. Give the listeners a little more about you or tell them about who you are and why real estate? Why commercial real estate? 


RW: Yeah, absolutely. Thanks for having me. Ryan Webster. I’m a real estate professional and entrepreneur, founder of Equity Yield Group, and we’re a focused acquisition investment firm. We acquire institutional quality AB class multi-family assets across the southeast. Prior to multi-family acquisitions, I owned and operated a construction development company for the better part of the decade. And then recently, two years ago, transitioned over into acquisition of stabilized assets, building new assets, stabilizing them and selling them, mitigate some of the execution risks, the availability to take advantage of the tax benefits with appreciation of stabilized assets, a little more attractive debt, working on a cash flow day one.


WS: No, that’s awesome. So you have a construction background. I would imagine that’s pretty valuable when doing value-add or repositioning a large commercial real estate. 


RW: Yeah, absolutely. And even just with the general maintenance and repairs, having that background knowledge is very helpful. But we do look for a light to moderate value-add component in most of our deals. So, I do lean on that background very heavily. 


WS: Nice. Well, I want to jump right into it. A little bit about you, just so the listeners know, you’ve acquired 665 units in the last 12 months, about $165 million worth of assets. So let’s talk through that a little bit. I’d love to know how did you do that? And I know the listeners are thinking, wish I could do that, or wish I had done that. Give us some, I guess, some background on how to make that happen. What would a listener need to have in place to be able to purchase that many assets or units in 12 months?


RW: The first real thing – and I think this is important not only in real estate investment but business as well – is really determination and grit, especially in real estate.


WS: You’re saying it’s not easy. 


RW: It’s not. It’s a lot of effort. It’s a numbers game and you gotta have the mindset, you know, to get kicked in the teeth every day and then wake up the next morning and do it all again, knowing that eventually, you’re going to hit one. And we’re really disciplined in the assets that we buy. We have a really low strike ratio and we’re looking for institutional quality assets. So, we’re always betting against big institutions, you know Blackstone and Greystar, and losing very regularly to them. But when we do win one, it’s a very quality asset and we’ll have the opportunity to sell back to Blackstone and Greystar on a ready disposition.


WS: What size project are we talking about to be competing with guys like that? 


RW: Our average acquisition is really  $50 million. We don’t do anything under a hundred units but it’s very location-driven, in and around primary markets across the southeast.


WS: What has helped you to be able to play really on the big boy stage? You’re not just competing with the average Joe there on these projects. Give us a little background of your company or your brand or your team, or whatever that is that’s helped you to be able to compete for a $50 million project.


RW: Yeah, I mean it’s really, it comes down to myself and my partner, Warren. When we set up this business, what we set out to do and how we are as individuals and business people, we tend to be very organized and very proactive in problem-solving. We’ve done a really good job of being easy to work with by virtue of being organized and people like to work with us, and that includes the sellers.  We do our best to get through the contract period as smoothly as possible. Typically, we’re turning around PSA in anywhere from three to five days. Usually run a pretty clean due diligence process. The last year, everyone’s been slammed, the lenders are busy, third parties are busy, the legals are busy. So, we’re typically getting into LOI and moving towards PSA. We’re ordering third-party reports. We’re getting the lenders going, getting the legal process going, and pushing everyone on the team along as early as we can to make sure that we’re closing on time or early, and that’s a lot of reputation to precede us. 


WS: How long have you all been syndicating or actually purchasing commercial?


RW: Yeah, so we started the company about 24 months ago. Acquired the first asset, 16 months ago. Kind of snowballed after that. 


WS: Nice, okay. I guess what I’m thinking through, I don’t know too many people that in 16 months from the first project or even two years from starting are buying $50 million projects. That’s pretty impressive. Congratulations, by the way. That’s great. 

So, tell me, how are you raising money that fast as well? I imagine if you’re buying a $50 million project, you’re probably raising $30 million, maybe? Depending on the project, I’m sure, CapEx. Tell me about how in 16 months you’re able to raise that kind of capital?


RW: Yeah. Again, this is not the first company that I built and ran. We’ve got some relationships that came along with that being on the development side previously. The capital stack on development deals is usually put together a little differently. If you’re seeing your data piece, preferred equity piece, and then the common equity slug, we usually brought in-house from the company. But it typically only represented maybe 5%, 10% of the total equity. So, depending on the deal and the needs of the project, we do use a diversified capital stack where we have some preferred equity institutional funds that we work with, place mezzanine debt on some deals. Before the common equity slug is friends and family and bringing other co-sponsors into the deal to raise from their network.


WS: Okay. What about just the confidence of syndicating these deals? Did you have a mentor? Or were you part of some mastermind or group? From construction business to syndicating purchasing $50 million projects, most people are – and I think this is a limiting belief, I don’t believe this – but a lot of people in our industry do, or in other industries and other parts of real estate, we tell people that you need to start small, right? Why didn’t you buy that fourplex first run or that twelveplex even? In 16 months, you’re doing a $50 million project, so did you just have the skillsets from other businesses and construction? What was that for you? 


RW: Yeah, a lot of the skill set did come from business experience and running and operating other businesses. Met my partner Warren through Think Multifamily platform with Mark Kenny. And I will say, having gone both routes, there is a lot of value in mentorship. There’s just things that have to be learned the hard way but you don’t necessarily have to learn it through your own experience. You can learn through someone else’s experience. I think that’s where the value of mentorship comes in, in being able to kinda dodge some of these obstacles by being able to leverage a knowledge experience of someone who’s been there prior. 


WS: No doubt about it. I can’t speak highly enough of Mark and to me, Think Multifamily group, I know tons of people in that program and group that I’ve had much success. Actually, just at a conference this past weekend with Mark and Tamiel and I just always enjoy catching up with them. But I would say, yes, a mentor is crucial, it just speed things up. You said it well, as far as you learn from somebody else’s hard knocks. I could not agree more. You even met your partner through that group. Speak to your partner’s roles versus your roles, and why or how did you all know that that was going to be a good partnership?


RW: You know It really came down very organically, which is rare and very convenient. But it came down to our investment strategy and thesis. We were looking at a lot of the same deals, a lot of same markets for a lot of the same reasons, got working together, and then kinda kept working together. And it worked really well where the things that I didn’t have time to do, he would jump on and vice versa. As far as the acquisition side, we both play a role in there. Gotta have a couple of sets of eyes, especially now when we’re underwriting deals. And really to win a good investment now you have to see something that someone else missed and have support for the valuation and then be comfortable with the basis right now. So having two sets of eyes to really dig on the data helps quite a bit there. Really tend to take the lead more on the operation side and then Warren puts together the team for the acquisition and moving into the contract period.


WS: That’s helpful. I think listeners need to hear too. I hear it all the time, whether it’s hiring or not hiring a mentor to partnering or not partnering. A client of mine I was working with yesterday, he was asking about a partnership. Should we partner? Should we not? And maybe you could speak to this ’cause I was just thinking through some things he needs to discuss with his partner before they actually say – hey, we’re doing this together. We’re under the same brand, or we’re moving forward together. Would you shine the light there as far as learning this from partnerships or we made sure that we talked about these things before we said, hey, we’re moving forward together?


RW: Yeah, I speak a little bit on that. Initially, I didn’t come into the mindset of, hey, I’m going to have a partner, I came in, I was like, hey, I’m going to just build another business and we’ll hire out a team as a business scales. I just so happened to meet Warren and we happened to click, and that’s really where that developed. And I think that’s really the most important foundation of any partnership. There has to be some agreement in what you’re doing, what is the brand that you’re building, why are you building that brand? For us, it started with the focus on our investment strategy in this late model institutional-quality assets. We didn’t want to do a C-class, heavy value-add. We weren’t really into heavy workforce housing. We didn’t want to do anything in a tertiary market. So we had an alignment in that. And then the next piece was really on the brand. We’re also passive investors, and we’ve had experiences where we’ve invested with other operators where we’ve had limited to no communication. We’ve had one with excellent communication. And we decided we’re going to be a very professional shop. We’re going to send out monthly updates on the 15th of every month. We’re going to be available for the investors at any time should they have questions. And that kind of level of customer service and communication transparency was something that was important to us both and decided if we’re going to build this business, this is the framework that we’re going to use.


WS: And I think you’ve talked about a little bit a couple of times, at least even before we were recording, doing ordinary things extraordinarily well. I don’t think that’s ordinary. That sets you apart in a big way, and we strive to do the same. A lot of people syndicate deals and buy commercial real estate, right? There’s always some that stand out more than others. And I would say you definitely are if you’re buying, moving that fast and buying $50 million projects. So, can you speak to things that maybe that applies to the most…a few of the things in your business that if you just strive to continue just doing this extraordinarily well even though most may see this as a kind of a minor thing over here, how we just do as best as we possibly can. 


RW: Intrinsically, I’m just one of those individuals that wakes up every morning trying to be better than I was yesterday. But it comes down to the choice of, am I willing to compromise on this and punt? Or do I want to stick to what I set out to do? Warren and I choose every day and every decision not to move away from our investment criteria. There’s a reason that we chose to invest in these type of properties with this investment strategy. We’re not out to buy a deal just to buy a deal. We want to buy quality investment and provide investors with a quality investment in great risk-adjusted returns. And the same thing goes with the communications and the transparency. We’re just not willing to compromise away from will be set out to build.


WS: Speak to maybe buying right now in the current market. You talked about discipline, investment criteria, and just speak to how you’re looking at these projects. And then I want to talk about competing on deals with another group like Blackstone. 


RW: Absolutely. Right now, it’s tough. It’s extremely competitive. Depending on the market you’re buying, a lot of property used to be, get to a best of final. You’d have three people and put in your bids and you’d have a seller interview and then somebody would win. Now, it’s best of final, best of final final, final, final, final and sealed bids and the interviews, and then maybe one more round and pricing guidance.


WS: Some people will talk about they’re told their investment’s final but there’s 25 groups in best in final.


RW: Yeah, it’s like, I cannot be best of final and it’s crazy out there right now and asset prices are absolutely insane and the debt market shifting. And we knew that it’s going to shift and that’s been kind of an important focus even ahead of the Feds announcement to move the index. It was something that was new, it was coming. A lot of deals last year, we’ve bridged that especially value-add deals where you can cover the CapEx cost. The senior notes, a little lower cost of capital for the project. Those bridge loans are variable rate. We bought very aggressive rate caps on all of our floating rate debt, paid a premium for it but now we’re definitely glad, glad that we did mitigate the risk of exposure to that raising index. But yeah, it’s extremely competitive right now but our focus is really on the fundamentals of the business, in the property and the market that business is located in. And when you’re seeing rent growth in some of these areas in excess of 30%, asking yourself, hey, is this sustainable? No. One, it’s not sustainable at that level. But two, how far rents rise? What’s reasonable, will they plateau or will they fall?


RW: You really gotta look at supply and demand of housing in that area. We’re in the southeast because there’s tremendous demand for housing. There’s very high inbound migration. People are moving there every day. So, the demand piece is there. The next piece we look for is really, okay, what areas are supply-constrained and are there barriers to entry for a new product? And as long as we can say, hey, nobody’s going to build right next door and we’re going to see vacancy come up and hire concessions, we’ve got the one piece right. There’s a reason rents coming up at supply and demand-driven. The next piece is really affordability for us. If rents continue to go up to supply and demand until people can’t afford them. It doesn’t matter if you’re charging four or five grand a month for rent if people can’t pay. It’s bad debts, can eat you alive. It’s really about what you’re actually collecting, not what you’re charging. So, we focus really on the income, the rent ratios  in the area and then the growing incomes in the area.


WS: Thank you for laying that out like that. I think it’s so smart too. It’s like, well, rents can continue to rise, but hey, if the tenants can’t pay it, it’s not really helping me out of here. It’s just going to be bad debt. That’s just a great point. What about, this trend in the real estate market. What do you see going over the next six, 12 months in real estate? And how do you feel about buying right now in your markets outside of what you just shared? 


RW: I still think real estate is a great investment. I think there’s huge value in being in hard assets and being in illiquid assets right now and especially if those assets are generating cash flow. I think there’s going to be some turbulence with the debt markets, things level out. But compared to other investments, there’s not a lot generating real net yield right now. Real estate’s still performing very strongly, especially in these major markets. It’s a place that we want to be in, it’s a place our investors want to be.


WS: How do you prepare for a potential downturn? So, you’re buying a project, you feel really good about it, you’re moving forward. But worst case scenario happens six months from now, something in our economy that’s worse than we expect, pretty bad things happen. You thought you were prepared. Are you ensuring that? How are you prepared for something like that?


RW: Yeah, and that’s one of the reasons we buy what we buy. We mitigate risk first. Being in these strong and dense markets, if the properties we own only represent a very small percentage of the whole market, if it’s a big shift, it’s not really going to take us down especially when you have very large, very dense populations that are supply-constrained. But really for us, it comes down to cash flow. Does a cash flow? Will it continue to cash flow? And then if there is a downturn, we don’t have to sell. We’ll continue to collect cash flow. So that’s really what we look for is to get cash flow day one, have the ability to force appreciation through a light value-add program, boost that cash flow, feel very well protected against the downturn. 


WS: Speak to how do you stand out against a group like Blackstone. I’m just thinking about the seller and the certainty of close. Those things when you’re competing about somebody like that. 


RW: Again, this comes back to being easy to work with. You can’t be a pain in the butt to transact with. That’s really the only advantage we have against these institutions. They have huge discretionary funds full of capital ready to deploy. They have massive portfolios. It’s the only thing that we can really offer is to be easy to work with. We don’t have a massive equity community that’s gotta approve this deal. We’re going to turn around PSA and in three to five days. We’re not going to drag it out. We’re not going to have lengthy access agreements. We’re going to be able to put hard money day one. But that’s really all we have, it’s to run a little cleaner and more efficient process than these big institutions can.


WS: Do you think that that goes back to broker relationships? Like having that broker relationship so they know that about you? Or do you think that’s just assumed, hey, if we can do a deal with somebody smaller, something like a Blackstone, we’re not going to have to go through all that process.


RW: No, I don’t think it’s assumed. We do have to talk the brokers and the sellers through it and really pitch them on what’s the benefit of transacting with us. We provide them our transactional references. And anybody who’s ever transacted with us speak very highly of their experience with us, which is great and allows us to continue finding properties. But yeah, it’s definitely tough. But we think it’s worth it to have these better quality assets.


WS: What’s the way you’ve recently improved your business that we can apply to ours?


RW: It’s just focusing on the details. Like I said, with the shifting rate environment, we’ve kind of changed our underwriting to include the forward rate curve on all floating rate debt. And then in the assessment of…if you’re planning to include a refinance in the property, I think you really have to have consideration to how that refinance is getting sized the last probably 12, 18, 24 months. Everything has been LTV constrained ’cause the debt service has been so cheap. It’s no longer to be the case going forward. I think DSCR constraints going to be the thing sizing future loans. So, I don’t think you can just assume 75% LTV refinance anymore. You’re still going to have to hit that 1.25, 1.30 debt service coverage. And if the forward curve is showing rates at 4, 4 and a half or 4.75, it’s going to get a very hard target to hit.


WS: What about your best source for meeting new investors right now?


RW: Podcasts like yours, honestly. That’s where we get most of our traction for our retail investors – hey, I heard you on such and such podcast, like what you’re doing, like to talk to you more about what you’re doing.


WS: How do you think you stand out? When you’re presenting yourself, when you’re on a podcast or just to an investor in general, amongst other operators.


RW: Yeah, again I think Warren and I set out to run a very tight operation and the investment firm that provides hopefully industry-leading customer service. We want to be available to our investors, our resource are the best. If they have a question, they can pick up the phone and call us. And then the communication transparency. We have our updates, we send a full financial reporting package every month on the 15th along with an asset snapshot. We track all the key metrics, what our performance is versus what our projections were. So, we lay it out for investors at any given moment. They can log in the investor portal and see where asset performances on any one of their investments. 


WS: Nice. What about some daily habits you have, Ryan, that you are disciplined about, that have helped you achieve this level success? 


RW: Really, responsiveness is a big thing for me. This is something I learned running earlier businesses. If it shows up on your desk, in your inbox, get it taken care of. Things can snowball real quick if you’re not responsive on them and then they’re fresh in your mind. You don’t have to tune up and remind yourself, okay, what was this? What do I need to address? It’s right there. Take care of it right there and then move on to the next thing.


WS: If you could pick one thing that’s contributed to your success, what would that be?


RW: Determination, really, and grit. Just like I said earlier, the willingness to get up the next morning and get up off the mat and do it again, especially when you’re talking real state acquisitions. We come in second place at a very professional level. We’re very good at losing.


WS: That’s awesome. Yeah, it’s almost back to the mindset, the determination and grit. You talked about getting kicked in the teeth and getting back up, doing it again the next day. You just know that from the beginning, right? What about that? How do you like to give back? 


RW: For us, it’s about giving back to our investors. Being a real estate professional and investor, obviously, it’s about financial freedom for us but being able to help our investors along their journey to financial freedom and provide them quality investments to mitigate risks that they can feel good about being invested in.


WS: Ryan, I’m grateful to have met you. I just think it’s encouraging too that just to kinda open the listeners’ minds a little bit to starting a business, two years later, you’re doing $50 million projects. That should blow their mind a little bit and just knock down some of those limiting beliefs that you and your partner are making it happen, to say the least. Just congratulations on that success. And it’s normally many years before someone’s competing with a Blackstone-type of group or for that size of project. So, that speaks to those extraordinary things that you all are doing, I think in a big way that you’re able to do that. 

Tell the listeners how they can get in touch with you and learn more about you. 


RW: Yeah. No, I mean for that, you’re absolutely right. It is a limiting belief. You’re your own biggest obstacle there. But yeah, you can get in touch with us these ways: on our website at the equity yield group dot com. You can reach out and schedule a phone call with myself or my partner. You can subscribe to our newsletter and stay up to date with things we’re doing and things within the real estate industry.




WS: Thank you for being a loyal listener to the Real Estate Syndication Show. Please subscribe and like the show. Share it with your friends so we can help them as well. Don’t forget, go to the where you can sign up and start investing in real estate today, Have a blessed day!


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