Jun 16, 2022
Real estate investing has long
been one of the proven ways to become wealthy. But like any other
business, it’s not as easy as it sometimes appears.
Wesley Yates is the Co-Founder of VFR Capital
Investments, a real estate investment company focused on the
acquisition, management, and disposition of opportunistic to
core-plus multifamily assets that can be repositioned on behalf of
and for its investors. With his years of experience in real estate
space and management, he shares valuable lessons on how you could
start investing in real estate with little capital, finding the
best people for your team, and how to qualify deals.
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, he has created an extensive network of accredited investors who believe in his vision for methodically acquiring commercial assets.
Wesley is an enthusiastic leader and brings with him skills crucial to building successful teams and driving performance.
[00:01 - 03:14] Walking Away From a Job Opportunity to Get Into Real Estate
- Get to know Wesley Yates
- How Wesley led his team in growing their portfolio from zero to 862 units in just a little over 15 months
[03:15 - 09:11] Learning from Failure
- Experiencing his first failed deal
- Putting up his own team together
- Achieving self-confidence with his wife’s support
- Being willing to admit defeat and reflect on what went wrong
[09:12 - 17:31] Tips on How to Stand Out and Succeed in Real Estate
- The bad advice he received while scaling
- When it is best to get greedy
- Learning to say No
- Take the time to build relationships with the gatekeepers
- How Wesley leaves a good first impression
- Know who you are working with
[17:32 - 19:49] Closing Segment
- The best piece of advice Wesley has ever received
- Reach out to Wesley!
- Links Below
- Final Words
Tweetable Quotes
“It's not a matter of when
you hit a problem. It's not a matter if you have a problem. It's a
matter of when. So who you have with you fighting those is really
going to determine on how successful you are.”
- Wesley
Yates
“Sometimes you got to look
yourself in the mirror and just really go, what do you want? What
can you live with? At the end of the day, what can you live with?
Can you live with saying, I failed to chase a dream? Or I was too
scared to try?” -
Wesley Yates
“You can't make a bad deal good. But you can make a good deal better.” - Wesley Yates
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Connect with Wesley Yates for commercial real estate investment opportunities! Visit the VFR Capital Investments now and follow them on Facebook and LinkedIn. Email Wesley at wesley@vfrcapitalinvestments.com.
Connect with me:
I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.
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Email me → sam@brickeninvestmentgroup.com
Want to read the full show notes of the episode? Check it out below:
[00:00:00] Wesley Yates: One thing I will say and whatever advice you're taking it from vet out who is giving it, right? So if someone's telling you it's okay to overpay, meaning you know what if it's a good deal and you believe in it, then it's okay to get more aggressive on your price.
[00:00:28] Sam Wilson: Wesley co-founded VFR Capital Investments, a syndication company that is owned by a team of veterans and first responders. He served as the CEO and he's led his team and growing their portfolio from zero to 862 units in just a little over 15 months, estimated about $70 million in assets under management, Wesley, welcome to the show.
[00:00:47] Wesley Yates: Thanks, Sam. I appreciate you having me on.
[00:00:49] Sam Wilson: Hey, man pleasures mine three questions I ask every guest come to the show 90 seconds or less. Where did you start? Where are you now? How did you get there?
[00:00:56] Wesley Yates: Where did I start? I started at the bottom. Where am I now? Closer to the top? How did I get there? A lot of hard work racking my brain and most importantly, having the right team by my side. Because it's not a matter of when you hit problem. It's not a matter if you have problem. It's a matter of when. So who you have with you fighting those is really going to determine on how successful you are.
[00:01:20] Sam Wilson: Man, I love that. That's absolutely right. Tell me when did you decide to take the plunge from smaller deals into larger deals?
[00:01:29] Wesley Yates: So yeah, like a lot of people I think, you know, they started with residential, really wholesale. And I was more like a plus one. My wife was the one that was really in real estate. I was on a contract to go to Amazon. So I'm like, Yeah, I'm just here, you know. So as I was networking, it was really that was the story. But I got a phone call on July 19 of 2019 said, Hey, do you want to do some syndication? I said, Do I need a license for that? They laughed. I was serious. But showed up the very next day and just started networking had about 250 cards in my pocket after the first event. First conversation went something like this, Hey, what do you guys do? They said, You know, we're investors, investors, investors, I'm LP and this many doors, all that what do you do? Oh, I'm gonna be raising capital for a group. That's, you know, syndicating multifamily. They asked me, you know, the typical questions, what's your cash on cash? What's your target IRR? What's your total returns holding times? I didn't know a single thing that they had said. So I reverted back to my old days of being a leader in the military. You never could say, I don't know, you could say I will get you the answers. So that's exactly what I said. You know, those are great questions, I'd really like to get you the right answers. So whenever we get closer to ironing out our numbers, I'd like to be able to get those to you. Do you have some way for I can reach out to you later on? Boom, boom, boom, five cards, went back to the group that invited me there. said, Yeah, I have no clue what cash on cash IRR. So back and forth, I went for a good hour and a half of that event. And still, by the end of it was having full-blown conversation. So cared more about the journey ahead and building momentum than how dumb I looked asking what people would call dumb questions. So that's where I started. And that was, you know, was that almost three years ago now? So
[00:03:15] Sam Wilson: Oh, and so you started off raising capital for somebody else? Yes, sir. And is that what you do now?
[00:03:23] Wesley Yates: No, I will like I am now in a more the CEO route, found out that I was better with my brain doing the operations overseeing the formulas, the processes, you know, I've got the whole six sigma training, the, you know, I was gonna go work at Amazon as one of their manufacturers was the operations managers. And so a lot of tracking performance, tracking efficiency, you know, driving that all forward. And so that's kind of what I did to our team and our processes is put a manufacturing engineer mindset to it. And we really started cranking out some deals. But it wasn't until I put, I guess, my own team together that I ever closed the deal our first year and a half of syndicating with other teams, I was not successful.
[00:04:11] Sam Wilson: What do you mean by that? You were not successful? I mean, if you're putting deals together with other teams, did all the deals fall through today?
[00:04:18] Wesley Yates: Just yeah. So in a nutshell, the, you know, as I was raising a capital A, you know, raising capital for that first role for that first team. You know, there were some things that I found out later on, once we really got into due diligence of our first deal, kind of notice that or some unethical things that have been done in the underwriting some unrealistic things that had been changed in the underwriting to just make numbers work. And, you know, I kind of rapidly dove into everything to where I could, you know, read the underwriting, or at least started catching on to those things. So yeah, I had to say, hey, look, I can't move forward with this deal in my better judgment, and told my investors in good faith I cannot advise you to invest in This deal, some of them kind of said, Okay, most of them respected that. And one of them is actually now one of my partners on my company today. So one of the co-founders of our company, Robert Newbern was actually originally going to be a passive investor. So, you know, less than I kind of learned a lot. I mean, still is, you know, you can have many different definitions to that. But did I close a deal? No, I did not close a deal, until I started my own team with the right people. So up to that point, it was more of an I was learning, and it was a trial, and fail and learn and move forward. So
[00:05:40] Sam Wilson: what gave you the confidence to keep moving forward or being as the new guy to the space you're learning from some other people, then you get involved and you put time, effort and energy, you're going to conferences, you're shaking hands, you're talking about deals, you're, you know, have an investor conversation, then you get halfway through it, you're like, oh, wait, I don't like any of this. And I don't want to work with these guys anymore. I mean, that's, that's, that's a lot of setback for somebody new to the industry. What gave me the confidence to say, you know, that I'm on to something, I just haven't figured out the right way to do it yet.
[00:06:10] Wesley Yates: Well, I don't know. To be honest, sometimes I made the joke that I was just too dumb to quit. I guess it's that inner marine and us we hate failure. I mean, you gotta practically kill us before we'll stop trying. Right. And I think that's what it was, is I still saw every step of the way, I did learn, I did grow. So I was scaling up. Even without, you know, closing something, I went from just investor relations to, you know, operations of a hospitality company, to a co-manager of $100 million fund. So I was still scaling up and building up experience and building up skill sets, learning more rapidly growing. So I still believed in myself at the end of the day, but I'll be honest, a lot of it has to do with my wife. My wife really supported me through all of that at the end of the day, she she kind of let me know, you know, you can do this. You've got what it takes. My family didn't feel the same sentiment of that, you know, a lot of my family flat out, tell me you're you're an idiot. What are you doing? You walked away from a guaranteed paycheck with Amazon and all the bells and whistles? To do this? What do you what do you do? So sometimes you have to look in the mirror and just really go what do you want? You know, can you can't What can you live with? At the end of the day? What can you live with? Can you live with saying I failed chasing a dream? Or I was too scared to try. You know, which regret Do you want to have? And I felt like I would rather chase this thing down to the bitter end until I could catch it, beat it and make it mine. Before I wanted to say nah, I gave up.
[00:07:48] Sam Wilson: I think that's a valuable lesson. And I'm butchering this, this quote, but it's something like failure weighs ounces, regret weighs tons. Something to that idea,
[00:07:58] Wesley Yates: one of the things that I think I've read, I've read, you know, the little motivational quotes that and it's funny because I hate rah, rah. But some of those quotes still get me okay, they still get me I think the one that really helped me when I needed it, it said, Winston Churchill says success is going into a new endeavor with the same enthusiasm. You started the last, huh? And I was like, well, there you go. So, you know, a lot of people say, as long as you learn, you didn't fail. And I think that's one thing that, you know, throughout my time in the military, throughout my time as an entrepreneur, I realized that if you don't look back and reflect on the lessons learned the Hey, what did I do wrong? What did I do right? Then? How are you going to grow? You have to be willing to admit defeat, you have to be willing to meet to address. Where did you mess up? versus what's that? And, you know, that's something that I've always been able to do is look back on whether it was a successful takeover, it was a complete fail. Where could I have made that process better? What can I have done? What could I have had differently in place to make overall something move better in the future?
[00:09:12] Sam Wilson: That's a great stance, and one that is often sorely lacking in today's society is just that personal responsibility piece. What's what is though, perhaps, some bad advice that you received during the scaling process? Has there been anything that you dislike? And somebody told me this and that was completely bogus.
[00:09:31] Wesley Yates: It's okay to overpay.
[00:09:35] Sam Wilson: Elaborate, please.
[00:09:38] Wesley Yates: One thing I will say and whatever advice you're taking it from, vet out who is giving it, right. So if someone's telling you it's okay to overpay meaning you know what if it's a good deal and you believe in it, then it's okay to get more aggressive on your price. Like okay, but then I stood back and I reflected on who was telling me that was the guy that required me to use his broker to buy his deal that gets paid on commission based on price. So of course, he's going to tell you it's okay to overpay. But yeah, I would say that right? There is probably one of them. That's still It's like no, you mean, in real estate. And really anything, you make your money on the bot, right? You make your money on the buy, because there is a ceiling to a market, there is a ceiling to, to an industry, and including into every asset. So you've got to know what that is, and believe in your numbers stick to a criteria. And don't fall for it. You know, was, since we're big on quotes right now was Abe Lincoln said, Whoa, it was like, find your stance and stand firm or something like that. Like I probably butchered that one worse than you did. But, you know, basically, you know, that's a lot of the advice that I look at from the, you know, true leaders and true successful people. You know, Warren Buffett is a good one. I think right now, in today's times, it's never, it's never been more true, then be cautious when others are greedy, and greedy when others are cautious, right. And as we are going through this syndication has never been more hot of a topic. And I was looking at some people that were studying justification, they say there's going to be a 60% increase of syndicators in the next two years. So it's like, wow. And everyone's just trying to, you know, get there do get a deal. Get a deal, right. So, you know, in some just being out flat, greedy, we've had the lowest interest rates, and you know, whatever, almost right. And now we're fixing to go from that switch to where, look, the feds have just announced they're gonna rise again, and be even more aggressive than the last race. So and they're not done. So now's the time to really be cautious, and let others be greedy. And then later when the shoes on the other foot and you know, maybe we could see, hey, it might be a buyers market here soon. That's when it's time to get greedy with the right plan.
[00:12:01] Sam Wilson: Yeah, that's for sure. Give me that. In practical terms, though. I mean, you guys are still actively buying, you're still actively looking at deals? What are you guys doing differently now, maybe than what you weren't doing? Or what are you guys doing differently now that you weren't doing six months or a year ago?
[00:12:17] Wesley Yates: saying no. What I mean by that to elaborate is, you're gonna have some opportunities that come your way. And you got to understand is it a valid opportunity? Or is it just a time suck? Is it a, you know, risk? How much risk is with saying, yes, how much risk comes with actually acquiring the assets? We've had a whole lot more deals that we had the opportunity to be a part of that we said no, than the few that we were, I will be under, you know, understanding, looking back to where I was looking for that first deal. And so hungry and so almost desperate for it, it's hard to say no, it's hard not to try to make something work. But one thing that I've realized very early on, and I've just instilled it into every one of my team members is, you can't make a bad deal good. But you can make a good deal better. And that's really what it is of that is we screened more finally, we stick to our criteria. And at the end of the day as a syndicator, you're not looking for deals for you. Whether you realize that or not, you're not looking for deals for you. You're looking for deals for your investors, right? So what are your investors ultimately looking for? Because if you don't have a seller, if you don't have an investor, you better have the money yourself. So, you know, that's a lot of what we had to get, you know, more fine-tuned of what we're looking at and branching out to say, you know, what, there are more markets than just my backyard.
[00:13:48] Sam Wilson: What? Yeah, I like that. Maybe that's you maybe you're gonna answer this question already. But what are you guys doing to be competitive? Like when you do put in an offer on a property, especially in multifamily? It's unlikely you're the only offer? So what are you guys doing to be competitive?
[00:14:07] Wesley Yates: So a lot of that goes back before you even make that offer. A lot of that goes back and when people realize that this is a game of relationships with other co sponsors, but more importantly, with the gatekeepers, that's what I call my brokers. Ultimately, the brokers are the gatekeepers to the good deals, if they don't have a good feeling about your you and your capabilities, and ultimately, obviously, it's not just me, but when I say you, I mean my team, your team, then they're never going to push your package forward in front of that seller. You know, example right now, I was a good 300 I think maybe 500,000 under some of the other offers going into best and final. But the broker liked our team to the point where he encouraged the seller to still take our offer even a lesser amount because of who we are and what we have done. So even if you are looking at your first deal, co sponsor with someone that has been there that has a sucessful track record, that's how you can still overcome that. But take the time to really build your relationship with your brokers. Because that'll go a long way when the time really counts and do more than just put in an offer. When I put in my offer, I have a nice brochure that says who is VFR Capital Investments? What do we stand for? Why us, the bios of every member, the team and our portfolio and a nice PDF brochure versus just a letter, just a, you know, a Word document bio, or even worse an email, Hey, this is who I am in the body of an email. So take the time you get one first impression to that seller. I've had sellers actually come to properties and come up and say, Hey, while we were doing our due diligence, and they recognize us from our from the logo on my shirt, it was like, Oh, you're the VFR Capital Investments team. Yes. Hey, you know what, guys, I really want to let you know, I really liked your story. And your brochure really impressed me I had higher offers. But because y'all look like y'all were more prestige and more sophisticated, I ended up going with y'all. I've been told that twice now on two different properties during the due diligence that the sellers had to come out just to meet us.
[00:16:23] Sam Wilson: That's cool. And that's, that's a good gold nugget, you know, getting, you know, developing your relationships with as you call it, the gatekeepers and doing more than just putting in your offers and finding ways. And those are relatively almost cost-free ways. You know, to stand out, some people are taking much more aggressive stances, and putting down you know, hey, we're gonna throw in a half-million bucks of hard money, day one, whatever it is, you know, trying to stroke the bigger check, which is, you know, that may be necessary to that's another card in the, in the deck of cards you can play, but I like what you're talking about. They're just an easy way to stand out.
[00:17:05] Wesley Yates: Yeah. And I didn't have the deep pocket to go. I mean, I started this, I was making $24,000 a year, I was broke. So you know, having the deep pockets to be like, You know what, I'll just do a little bit more. Let me slide this over there. So I worked what I had, and I had the ability to take the time to actually get to know who I was going to be working with. And that was to me, in some cases to others. More important than how much dollars were on an offer.
[00:17:32] Sam Wilson: Yeah, absolutely. What's one great piece of advice, we asked this question earlier a bad piece of advice he received? What's probably the best piece of advice you feel you've been given?
[00:17:43] Wesley Yates: Hmm, that's a good one. I think you would probably be you know that. It's okay to say no, I know, I kind of discussed that. That's really something that that I've struggled with, but it's okay to say no, it's not an admittance of failure if you're saying no to something that is ultimately a dead end. Right. And that's something that I know some people might not relate to, but, you know, everything that dangles in front of you is not, it's not something that you need to chase, they could just truly be a carrot on the stick.
[00:18:14] Sam Wilson: Right? Right. You have the stick at the end of the carrot. You gotta watch out for that stick. Yeah, yeah. That's absolutely awesome. Wesley, thanks for taking the time to come on today, really break down your story, how you have found success, the things you're doing to remain competitive, protect your downside, giving us some kind of insight on what you do to establish relationships with brokers and really just kind of your investment thesis and mindset that you've taken and implemented to get you to where you are today. If our listeners want to get in touch with you or learn more about you, what is the best way to do that? Yeah,
[00:18:47] Wesley Yates: So I've got my email, wesley@vfrcapitalinvestments.com. And you can look it up on Facebook or LinkedIn, we're there as well. And I'd be happy to connect and if there's anything I can do to help another co-sponsor, with their first deal or their hundreds of deals. We're always happy to sponsor beyond co-sponsor a deal and, and hopefully add value as well as hopefully maybe learn from another person's strategy. So that's, that's what we're about.
[00:19:19] Sam Wilson: Awesome, Wesley, thank you so much. Appreciate it.
[00:19:22] Wesley Yates: Thanks, Sam.