Apr 10, 2022
What if your first deal didn’t go as planned? What would you have done differently?
Angel Williams, a Managing Partner at Lorren Capital, has a lot to say about this situation because she experienced it firsthand. She learned the painful lesson of knowing your lenders first before finally working with them.
She emphasizes that taking action fast is crucial in real estate, but taking action with a purpose is more important. Angel is also the co-founder of The Academy Presents, which educates aspiring investors about the real estate industry.
[00:01 - 03:05] Opening Segment
- Angel Williams had a “tumultuous” first deal
-
- What’s her experience?
- What would she have done differently in her first deal
-
- Take note of her suggestions
[03:06 - 08:41] Raising Capital For the First Time
- This is what Angel did to close a deal in only 28 days
- Their original lending broker in a deal was upset with Angel’s team
-
- Here’s what happened
- Angel and her husband were able to raise $123,000 dollars in their first raise
-
- Listen to her story
[08:42 - 13:48] Finding the Right Lender
- Angels shares some tips to find general partners in a deal
- The importance of knowing your lender first before working with them
[13:49 - 16:42] Closing Segment
- What’s happening in their company at the moment
- Reach out to Angel
-
- Links below
- Final words
Tweetable Quotes
“Make sure you have your lender lined up before you do anything ever.” - Angel Williams
“You don't know what
people's risk tolerances are until things go sideways…make sure
that you don't have a group of a bunch of newbies on the team even
though you feel very close to them.” - Angel Williams
-----------------------------------------------------------------------------
Email angel@lorrencapital.com to connect with Angel or follow her on LinkedIn. Visit The Academy Presents to learn more about real estate investing!
- Check out Lorren Capital to invest in real estate with a purpose
Connect with me:
I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.
Like, subscribe, and leave us a review on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on. Thank you for tuning in!
Email me → sam@brickeninvestmentgroup.com
Want to read the full show notes of the episode? Check it out below:
Angel Williams 00:00
We had a different level of risk tolerance than the other members of the second GP team. We also had $100,000 on the line, and so we weren't willing to walk away from it. But I mean, it was scary. And the fear was that we were going to pour another 75, another 75 because each extension was 75 that we were going to keep pouring in, and perhaps still might get the deal. And so we were talking to our mentor almost daily. We were talking to all of these people trying to get this thing moving, and it was one night during a team meeting that one of the GPT members that I think the universe is telling us to run, and so the rest of the team ran.
Intro 00:42
Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.
Sam Wilson 00:52
Angel Williams began her personal real estate investing journey in 2003. She is a co-founder of The Academy Presents and managing partner of Lorren Capital. Angel, welcome to the show.
Angel Williams 01:03
Thanks.
Sam Wilson 01:04
Hey, the pleasure is mine. Same three questions I ask every guest who comes on the show. In 90 seconds or less, can you tell me where did you start? Where are you now? How did you get there?
Angel Williams 01:11
Holy Night? Where do we start? So my husband and I both grew up in families investing in real estate. We bought our first home in 2003. It became my first rental and ‘06, ‘07 We never even discussed it. We just both knew where we at now. We just took our first multifamily syndication across the finish line in December of ‘21. And the last part was where do we hope to be?
Sam Wilson 01:32
We did you start, where are you now? How'd you get there?
Angel Williams 01:35
Oh, how did we get there? So we grew up in families investing in real estate, and then for multifamily, we got to coach.
Sam Wilson 01:41
Interesting. I love that. So you guys just closed your first deal. Walk me through really walk me through the specifics of that wins. I think it's intriguing for people who are looking to scale how you got it done.
Angel Williams 01:52
So it was a pretty tumultuous ride. So first suggestion to anyone is make sure you have your lender lined up before you do anything ever. We had lots of GP changes. There were crookedness, seven, various GPS, the final team had us with three additional so I guess there were 10 total, the team that comes across the finish line those me my husband, plus three more, and just, it's it can be crazy. It can be hard. And at the end of the day, it's like Dagon said the only thing people remember is did you close or not?
Sam Wilson 02:26
Yeah, that's interesting. What, when you say the word tumultuous? What would have been some things that you would do differently now that would make it not tumultuous?
Angel Williams 02:38
Oh, it goes back to making sure you have your lending lined up, we went through a ton of loan products. They just didn't, they didn't pan out. We didn't have enough experience. We didn't have enough of this, we didn't even have that. And it was just a whole line of things that made it not happen. We finally wound up getting a bridge loan at the very end and I would just, get your lending lined up and have your lending lined up before you do your webinar.
Sam Wilson 03:06
Was there one person who was responsible for lending that drop the ball? Was this a team effort that give me the mistake or the thing that you could do differently so that we can learn from it?
Angel Williams 03:20
So I think what it was it was a small balance loan and a very small market. And only so much loan money is allocated to those kinds of loans. And I really think the bucket was just empty. And instead of saying the bucket was empty, they just kept giving us more requirements. So I don't know how to get around that. Other than, you know, don't ever sign an exclusive and shop around yourself and if the seller is saying you have to use someone, find out why, and then just I mean, we wound up going with Lima One, okay, and they got us closed in 28 days, it’s a little more expensive. But as I said, we got closed in 28 days. So from our approval to close 28 days.
Sam Wilson 04:08
Right. Yeah, it can be done. And that's incredibly that's impressive. But they were able to pull that off. Sometimes the speed of money is worth more than the price of the money. So that's really intriguing. You said something to the effect of don't sign an exclusive. Can you walk us through that?
Angel Williams 04:25
So in our situation, I don't think it would have mattered. But we got ourselves in a situation where one of our GPT members was like, I have a lender. And so we were like, “Well, we haven't we signed an exclusive agreement.” But she was like it's no big deal. We're gonna go ahead and let's check this other guy out. Well, the original lending lender broker found out and things got kind of ugly. And so if you're going to try and shop alone yourself just don't have an exclusive in place because it gets ugly.
Sam Wilson 04:57
But it didn't sound like your broker was gonna get it done anyway.
Angel Williams 05:00
I don't know. I mean, eventually they did.
Sam Wilson 05:03
Oh, so eventually they were the ones that brought Lima One into the deal.
Angel Williams 05:06
Actually, that was another phone call. So it was Lima One’s terms were in a whole group of stuff that was sent to us. But we didn't know Lima one was you know anything about them. On one of the days when the second, I guess it was right, the day after the second team had kind of dissolved. Jason came home from work, I was still in bed because I was depressed, I was upset. And he's like, get up. We're gonna make phone calls. And we made a list and it was called number 16. To us, you know, Pintas. And he was like, you're at Lima One. And I was like, I don't know what that means. But at that point, he just kind of took over and helped us get back on track. Got us set up with Lima One. Or he actually, he, Julianne got us set up with Lima One, but he kind of like led us through like, this is what happens. They're a little more expensive. This is who they are. And he just let us know who they were. And so we felt more safe about it and more secure about it. And he just got things back on track. And he's he is probably one of the number one reasons that the deal made it across the finish line.
Sam Wilson 06:09
That's awesome. Is there, what did you guys have to you know, get extensions?
Angel Williams 06:14
Oh what we did. So maybe the number one reason why we stuck it out. So there was a number one reason the loan got back on track. The number one reason we stuck it out is we had $100,000 of our own money that went hard, day one. And then we had another 75 up on the extension. So we were 135,000 men.
Sam Wilson 06:34
Wow. That's motivation. What was the size of the deal?
Angel Williams 06:42
72 units.
Sam Wilson 06:43
Okay. And what was the total purchase price?
Angel Williams 06:46
5 million.
Sam Wilson 06:47
5 million. Okay, so you guys had the equity raised. You just didn't have the debt side done.
Angel Williams 06:53
The equity was a whole nother ballgame. Okay, I had never raised before, my husband never raised before. We just kind of wanted to see what we could do. And turns out I probably wasn't smiling when I called. Because I was pretty beat down. And so once we got some, once we got the third team coming on, we got like Franklin Delano and Gail McCarthy. And my friend Mike, and Frank is amazing. And Frank, we were both middle school teachers. But that's how we've known each other for a long time. But he's really supportive. And I don't know what it is. But what he says, but it pushes me but not in a like forceful kind of way. It's kind of in the back of my mind. I'm like, I'm going to beat him. And so we just changed the way I started talking to people. And it changed the way Jason started talking to people. And between Jason and I, we raised $123,000 in our first raise.
Sam Wilson 07:49
Good job. That's awesome. That's fantastic. Okay, so talk to me, you know, one of the things and again, I'm sorry to pick your deal apart here, but I think, you know, sometimes these are the ones we learned the most from. So if we can take this opportunity to learn from you, maybe we won't repeat the same mistakes. And you can save a lot of listeners the same heartache. Because especially as you're starting out, this is the rest of the show is how to scale. How do you go to bigger assets. And you it's just as important, I think, to have the guide along the way that says, hey, don't walk off the cliff. There's a cliff over there. If we can get into, you know, telling us where those potential pitfalls are, I think it'll be a very valuable conversation as we listen. So tell me about the term, lots of GP changes that sounds, from an investor's perspective, and also from a member of the general partnership disconcerting. How did you work through that and what did that mean?
Angel Williams 08:42
Oh, when things got rocky, we had a different level of risk tolerance than the other members of the second GP team. We also had $100,000 on the line. And so we weren't willing to walk away from it. But it was, I mean, it was scary. And the fear was that we were going to pour another 75, another 75, because he's extension was 75 that we were gonna keep pouring in, and perhaps still not get the deal. And so we were talking to our mentor, almost daily. We were talking to all of these people trying to get this thing moving. And it was one night during a team meeting that one of the GPT members said I think the universe is telling us to run and so the rest of the team ran. And that's what happened. So you, just as advice. You don't know what people's risk tolerances are until things go sideways. And so I don't think there's any way to mitigate that other than to make sure that you don't have a group of a bunch of newbies on the team even though you feel very close to them. And that was I think that maybe that was where we went wrong. But the team was really strong and we worked really well together, we just had different risk tolerances. And so when it, when that one was gone, we had to rework it. I went to Frank, because I've known Frank for a long time, we're both teachers. And we met face to face for the first time at BEC 2020. But we've been talking for a long time before that because he was listening to me at one or two in the Morrissey Listening. He was reading my messages at, you know, two in the morning when I was complaining about what was going on at school because he'd been there. And so we connected as teachers. So I called him I'm like, “Hey, I know, we asked you to be a part of the, be a co- GP and one on the GP team. And he agreed, and he came on, and then we had to start. And so then I had talked to Gail a few days before, and I was just like, you know, I just want to help you. And so I called her up. And we asked her to be on the GP team. And then my friend Mike had never done it before and one of the experience and we are, we have a, we have a good relationship. He has a special needs child, we have a special needs child. And so we brought him on. And this is the team that has made it work.
Sam Wilson 11:05
That's really intriguing. It, would you say, when I listen to this story, I hear a lack of maybe one person being the head person on the general partnership. Is that a fair assessment or am I missing something?
Angel Williams 11:19
No. So Jason, it was nice deal. We never done an active side deal before. And it felt like and even up until just a few weeks ago, it felt like we were expected to lead the meetings, we were expected to like be the talkers. And we don't know. We don't know what we're doing. So it felt really uncomfortable. And so Mike, who also he's a newbie, but is a PMP. We spoke to him one night, and we're like, look, you've got the right words, you've got the training. Asset Management is project management. You're gonna be way better at this than I am. And so he took on the meetings, and it's been really awesome. And so he's getting that experience, and we're getting to see how, how good meetings run. He just does things differently. Like halfway through, he'll just kind of Loki be like, okay, you know, 30 minutes. And he's kind of puts it out there. This is where we're at in the meeting. And we've got an agenda, and we just work through it and it was really cool, even though he's a newbie, and then like Gail has lots of experience and Frank has experience and we have residential experience. But it's different than multifamily.
Sam Wilson 12:30
Right, right. Yeah, absolutely. Absolutely. Did you guys bring a property manager on?
Angel Williams 12:35
So we kept the property manager that was in place because it was already a stabilized property.
Sam Wilson 12:40
Oh, interesting.
Angel Williams 12:41
Yeah, so we've been working with, minor is on it. And they've been really great. We love the regional. And we hope to take down some more complexes here in town and scoot her into them.
Sam Wilson 12:53
Got it. Okay, intriguing. So let's say you're going to start over. Now you're back in this market. I know you said that this is a market that maybe you've got to find a lender who has the capital available for it sound like you're in a sub market of maybe even a sub market. So, you know, capital available for some of these some of these smaller markets. What are you going to do differently on the next one?
Angel Williams 13:14
So already talking to a lender, getting that relationship going? Because and I thought I had that before? Again, I think it was a timing thing. I think it was the end of the year, I think the bucket was just empty. And nobody would say that. That's the hardest part of me is I don't understand why nobody would say hey, really the buckets empty, you're gonna have to wait till after the first of the year, or do something different. If someone had just said that, I think the second team wouldn't have dissolved. And I think that we would have gotten the thing closed in probably November.
Sam Wilson 13:49
Yeah, that's really intriguing. And that's a head-scratcher for me that I've seen one too many times where lenders are in the business of lending. And they make money when they lend and yet I've seen feet getting dragged, okay, the promise the moon did not get the deal closed. And it's just like, knowing your lender, I think is it's a topic that comes up on this show a lot. And it's an unfortunate lesson that we all have to continue to learn. So I think if you're gonna if you're listening to this, maybe that's this is your take home know your lender before you get, you know, all the way before you're putting hard money down know your lender, right? I mean, if you don't have experience with the lender, you better know somebody that has had experience with the lender. And you know, finding those yes, those relationships, cultivating them and shopping that long before you get to, you know, accepted Purchase and Sale agreements and putting six figures down is I think, a valuable lesson here today.
Angel Williams 14:46
Well, and I think to that, like every lender has amazing stories and not amazing stories. So it's how you mesh up personally, I think really in the end and I think maybe there might have been a few weird things going on behind the scenes. And I don't know. It was just so odd. What do I have to compare it against?
Sam Wilson 15:09
How's the deal doing right now? What's the…
Angel Williams 15:12
It's doing great. I'm not the numbers person. But my understanding is that we are actually performing better than we thought we would.
Sam Wilson 15:21
Okay. That's fantastic. That is fantastic. Awesome. Angel, you've taken the time really to be very transparent with us today. And I can't thank you enough for that. That's again, you know, it's these painful lessons, I think, where we learn, we learn from the mistakes of others. And you've taken the time today to really share us share with us out of the gate. You know, some of the things you guys didn't get right, Congrats on getting it across the finish line and having an asset that is performing better than projected, that's always a good first place to start. So well done on that front. If our listeners want to get in touch with you, or learn more about you, what is the best way to do that?
Angel Williams 15:58
Probably through our website, it is WWW.theacademypresents.com. Or you could probably get through to me on LinkedIn, I do answer all of my messages.
Sam Wilson 16:09
Fantastic. Angel Williams on LinkedIn. Angel, thank you for your time today. I certainly appreciate it.
Angel Williams 16:15
Sure. Thank you for having me.
Sam Wilson 16:17
Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories so appreciate you listening. Thanks so much and hope to catch you on the next episode.