Apr 8, 2022
Julie Holly is a podcast host, mentor, and founder of Three Keys Investments.
She started her company to help people invest their money into high-performing assets. This is to allow them to spend more time with their families and work fewer hours.
In today’s episode, she will talk about her transition into the ground-up development space along with other tips to identify the right partners in a deal. Lastly, she will be sharing some of her experiences in her real estate journey, including the good and the bad, that other investors can learn from.
[00:01 - 03:54] Opening Segment
- Julie Holly tells us why she is in the ground-up development space
- This is a painful part of her journey, which you might feel too
[03:55 - 08:39] Identifying Red Flags in a Deal
- Here’s a tip from Julie to determine if the deal in front of you is right for you
- Julie talks about the current deals they’re working on
- These are the kind of relationships that Julie maintains in the real estate space
[08:40 - 15:14] Investing in Ground-Up Development
- This is how Julie assured her investors about this ground-up deal
- How Julie and her team vetted for their ground-up deal
- Are you looking for a developer?
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- Listen to Julie’s story
[15:15 - 17:03] Closing Segment
- A real estate mistake you want the listeners to avoid
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- Don’t keep your knowledge to yourself.
- Invest in what you know
- Your way to making the world a better place
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- Building new apartment complexes to help the homeless population
- Reach out to Julie
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- Links below
- Final words
Tweetable Quotes
“...the more you understand yourself, you can understand how [you are] going to show up and how [yuo are] going to be able to receive what other people are saying.” - Julie Holly
“Don't bank your livelihood off of those quarterly distributions. Those are the icing on the cake.” - Julie Holly
“Invest in what you know and if you don't know about it, invest with people who do know, who can guide you.” - Julie Holly
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Email threekeysinvestments@gmail.com to connect with Julie or follow her on LinkedIn. Visit Three Keys Investments to grow your wealth strategically!
Check out her personal website to know more about her other endeavors.
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:
Julie Holly 00:00
When we have that initial conversation and I kind of trickle it in is that although we are planning for quarterly distributions, don't blink your livelihood off of those quarterly distributions. Those are like the icing on the cake. You know, just do whatever you want. Some investors are like, can I just put it back in the deal? I'm like, I wish you could. But we can't do that. Not this particular deal. But that is one. Although I wasn't in the ground-up space as we speak about investors. That's one way that my investors were already slightly primed for that concept of,ell really, it's not going to make that much of a difference because I wasn't basing my livelihood off of this distribution to begin with.
Intro 00:40
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
Julie Holly is the founder of three keys investment, she helps people like you find their freedom through multifamily real estate investing. Julie, welcome to the show.
Julie Holly 01:00
I am so thrilled to be here, Sam, looking forward to it for days.
Sam Wilson 01:04
Oh, good. Well, I mean, I felt like I scared you or something there with your intro. You gave me that look of like, oh my gosh, what's this guy doing in the microphone?
Julie Holly 01:11
Yeah, really? That's funny that a podcast would have that kind of response.
Sam Wilson 01:16
Well, this is going live, audio and video. So you'll get this on YouTube. But alas, I digress. We've got three questions I asked every guest who comes on the show, right. 90 seconds or less. Can you tell me where did you start? Where are you now? And how did you get there?
Julie Holly 01:27
I started in single family housing, I found multifamily housing. And now I'm currently involved as a LP and a GP and diving into digging into ground-up development. How's that?
Sam Wilson 01:42
How about that? I love that. I love the play on words. They're digging into ground-up development. Tell me that journey? What has been the progression? Maybe not necessarily why? Because we've heard that a lot on this show. I mean, why do people go from single family to multi we get that all the time, I'm sure you get it as well go. But tell me your journey and tell me what things you've learned?
Julie Holly 02:00
You know, the painful part of the journey has been being patient. So I think that transition, as many have made that transition from single to multi. So we're not going to belabor that point. But I'm going to get all teary-eyed because it's demanded not just growth in knowledge and understanding because I spoke residential really well. But I had to change as a person, my thinking had to expand, and it had to expand beyond the vocabulary of the multifamily space. I had to embrace the concept of collaboration and teamwork. I had to learn to flex that word, “no,” in order to say yes, and I think those were the most painful growth avenues that I experienced through the process of that transition.
Sam Wilson 02:48
When you say flex your “no” muscle, what would you say flex the word no?
Julie Holly 02:52
Right? No. Well, you know, I was very blessed to be invited to a lot of opportunities. And I was really like every new multifamily investor, really excited like, yes, I want to jump into this deal. Like, don't we all just want to get our deal done, right? Because the Law of The First Deal, like let me just get it done and start my success parade, right? And really, I started reviewing the deals, and it's like, okay, well, he no, this doesn't align with my principles and values, and all the best to you. And that, you know, always all the best to other people. Because I might not see something that they do, or I might not have the courage that they have whatever it is, that doesn't matter. But being able to evaluate things and evaluate teams and say, these are great people. But is this the best alignment for me? And so saying no to those opportunities was really painful, and yet, where I'm at now, I high five, myself, left and right because I know that those would have been some painful situations.
Sam Wilson 03:55
Were there some telltale signs that said, hey, this is an again, not that the people you were looking to work with were bad people or they were doing bad deals, but maybe just not a fit for you. Were there telltale signs that were like, “Hey, this is something somebody else can look out for?”
Julie Holly 04:11
You know, it's easier with, to talk about to discuss that right? When it comes to the underwriting Sam, it's so much easier, right? Because we all have our concept of what quote-unquote, conservative is, right? And so, you know, when it comes to that, it's easy to just say, well, these assumptions don't really align with how I underwrite and so have fun, no big deal. When it comes to the people especially being a people person. I love, love, love people so much. It becomes a different scenario. And I had to learn to do exactly what you said. You said they're not bad people, but this relationship and that means understanding, you know, psychology and human relationships and saying, how are these dynamics going to play off of each other? How when not if when a challenge arises, because it will, every single time when a challenge arises, how are each of us going to show up in a way that is going to lead to a really effective solution, so that we can serve our investors and residents? Well, so that just comes through conversation. And that's one reason why I really believe in knowing who you're partnering with not just a fly-by-night, like, oh, we just met at the conference last week. Good. Yes. We're going to collaborate. You know, we're gonna partner. Yeah.
Sam Wilson 05:33
Yeah, that's, I mean, and you know, that too, can happen, by the way.
Julie Holly 05:37
Yes, it can happen. I'm not saying that it cannot happen. You know, for me, personally, I like I feel like, I need to have a little more track laid it before I do that, but I have seen successful partnerships use, look at Goodegg Investments, boom, BEC. Four years ago, they partnered up, right?
Sam Wilson 05:57
Oh, for sure. Yeah, it can happen. Were there any was there any gut check or anything that was an intangible that you're just like, is not for me?
Julie Holly 06:04
100,000,000% and but you have to learn how to vet your gut, right? Just find that, right. So we have like the deal that you know, the partners, you know, or vet the sponsors, and now we have like, vet your partners by the gut check. You know, it's, but it's really true. And, and a lot of times we dismiss those little red flags, those little microcosms that pop up or like, you have to understand yourself in order to do that. So I've worked with a high performance coach for two years. And that's been very helpful for me. Because the more you understand yourself, you can understand how are you going to show up and how are you going to be able to receive what other people are saying. So it's really a matter of for me conversation. And I love meeting people face to face read their energy.
Sam Wilson 06:52
Right? Yeah, that's for sure. I love that. Yeah, the painful part of that growth, I think going back to what you said, is being patient but I think a lot of that is also like a slingshot. You know, if you're patient, when you pull back, well, the time you let go, it's going somewhere and fast. So you know, don't be in a hurry to get out of the gate too soon. So tell me you guys have a deal closing or by the time this episode goes live, you will have a deal that has closed. Is this your guys first deal? Is this your fifth deal? Where are you in this journey?
Julie Holly 07:21
Yeah, well, by the time that closes, that will be deal number four. So I'm actually closing any day now on deal number three, which is 120 units, Class B and De Moines, and super excited about that. Love the partnership there and fantastic team. And then the part what we'll be closing, when this goes live, is we'll be closed on our construction loan for ground up development in Winston Salem.
Sam Wilson 07:49
Awesome. I want to hear more about that. But talk to me about scaling. You know, it's every deal you've done with the same team, or does this team change?
Julie Holly 07:58
Wow, that's a really great question. And part of me is like, well, people are gonna think crazy things. But it's normal, right? So I actually have partnered, every single opportunity will have been with somebody different. And I love that as a podcaster and as someone who has a very nice network within our community, I know so many extraordinary sponsors, and we all need deal flow, particularly those of us who work to serve investors, specifically by placing their capital. And so that just gives me by having those relationships. I'm always nurturing, you know, and understanding like, who should I be partnering with? I have a place for my investors' capital.
Sam Wilson 08:40
Right, yeah. And that's exactly it. Because again, I say this way too often on this show, forgive me, there's two things that go round and make the business go round. There's deals and money and money deals money. Yeah. And if you're not finding deals, then you're not going to find the money, and if you run out of deals for too long, by the time you have a deal, the money will be gone.
Julie Holly 08:58
Absolutely. You want that money working. So much. So that there was one point where I didn't have anything on the horizon. And I had a couple of investors that really needed to deploy capital. So that's the check also is what do you do? Who are you looking out for yourself or your investor? So I referred them to, like a couple of sponsors that I knew had quality deals to offer. Painful moment, I'll imagine everyone's like, please feel my pain with me. Okay. Yeah, it's listening. It was painful. But I also knew it was what I believe is the right thing to do for my investors.
Sam Wilson 09:32
Right, yeah, that's absolutely cool. Tell us about the ground-up deal. I mean, that's very different underwriting, that's a very different potential investor to bring onto the deals to kind of walk us through that because there's just some nuance to that. That's not for every either sponsor or investor.
Julie Holly 09:50
That's true. And when I joined that partnership, I was actually you know, very transparent and said, I have not solicited ground-up development to my investor list at this point. So this is going to be something new for them. And we all know that some investors want all of that they want that distribution, that quarterly or monthly distribution that they're receiving. And to have that, you know, potential of two years of, we're not seeing anything is a big deal. But here's how I navigated that, Sam, I actually always tell my investors when we have that initial conversation and I kind of trickle it in is that, you know, although we are planning for quarterly distributions, don't bank your livelihood off of those quarterly distributions. Those are like the icing on the cake, you know, just do whatever you want. Some investors are like, can I just put it back in the deal? I'm like, I wish you could. But we can't do that, you know, not this particular deal. But, you know, that is one, although I wasn't in the ground-up space, as we speak about investors. That's one way that my investors were already slightly primed for that concept of, well, really, it's not going to make that much of a difference, because I wasn't basing my livelihood off of this distribution to begin with. And that tailwind that everyone gains at the end of ground-up development is so significant equity multiple, is so significant, that it can be very enticing to investors to say, wow, you know, I'm more far more than doubling my money, this is going to be very worthwhile for me.
Sam Wilson 11:24
Right, yeah, absolutely. How did you vet that deal, an opportunity? I mean, somebody brings you a piece of land and says, Hey, you guys should build an apartment complex here. I mean, how did that process work?
Julie Holly 11:34
Right? Well, in addition to, you know, looking at the underwriting, the underwriting is confident in however, what I was really concerned about, as I'm sure the listeners will have the same concern is, what about the red tape and all the different government levels? What about the supply chain issue? What are we going to do, as supplies increase in price over the duration of this build process? So the underwriting was solid in and of itself, and the process of entitling the land and getting going on the ground-up development, the track was very well laid. So for me, it was more like who is our developer? What is our track record? Again, it's going down to that partnership, if the numbers already make sense, and the numbers check out, now we got to know who are we working with? And what are they bringing to the table that is going to ensure to the investors and the team that this can be fully executed? Right?
Sam Wilson 12:33
How did you guys select a developer?
Julie Holly 12:35
Yeah, well, this is actually a really cool story. So our partner was driving home, and everyone does. So as you're listening to this, like, make sure that every time you're driving everywhere, that your eyes are like looking around, train your kids in the car to look for sale signs also. He's driving home, you know, he's taking the off-ramp, and they're buried in the trees is this teeny, tiny “For Sale” sign me he's driven past us a million times already probably calls the number on that. And he has actually done development with our developer already in that community. So it's not like, “Oh, this is the first time working with this developer.” So they walk the land, I'm giving you the long story. So feel free to interrupt at any point. They actually, you know, he calls the developer they go, they look at the land, they walk it the developer hops on the phone with, you know, planning and zoning people he already has relationships with and it's a matter of, hey, can you check what the zoning is out here? And, okay, can we change that? And they just said, Hey, we'll get back to you in a couple of weeks and let you know, a couple of weeks is a long time. But guess what they got back to me like 5, 10 minutes later phone rings, which is, also speaks to the caliber of that relationship at PNC. And they're like, We can work with you on this. And so we just simply went down that process when we were at the city council meeting, and fortunately, it's a zoom call, because I am on the opposite coasts, on the Canadian border, you've been like opposite coasts and opposite, you know, north-south. So I was able to be on that Zoom call when P and Z, you know, unanimously voted in favor of our zoning change. And so lots of and that's current, we still have some, you know, things to move forward. But you know, it's a very favorable and so selecting that developer was just a matter of looking at, okay, well, my partner has already done business with him. They've already had this experience, they already have a relationship, and it's been extremely successful for them. That really made it easy.
Sam Wilson 14:35
That sounds like I mean, a lot of what you have done to grow is simply scale other people's expertise and knowledge in the space. Is that a fair summary?
Julie Holly 14:45
Isn't it? It totally is. And isn't that so it seems like a cheat or a hack, doesn't it? On one hand.
Sam Wilson 14:54
It's not hacking. It's doing what it takes.
Julie Holly 14:57
Exactly. And it's a good partnership. Right, if every single person is constantly bringing their very best to the table, then we have rockstar teams, every single time. Everybody wins. And I love everyone who hears me anywhere knows I am all about everybody with me.
Sam Wilson 15:15
I love that. That's great. Julie, I've enjoyed hearing your story. I've loved watching your progress. I know I met you maybe a year, year and a half ago. And it's fun just to see where you've come in that time frame. So thanks for coming on today. And really just sharing the kind of the secrets to what it is that you've done and how you have grown your business and where you guys are going or you're getting into some really fun stuff. And I just look forward to seeing what the next year, year and a half holds for you. Let's wrap this up with a final few questions. The first one is this: What is one mistake you can help our listeners avoid and how would you avoid it?
Julie Holly 15:45
Invest in what you know and if you don't know about it, invest with people who do know who can guide you. Right. I learned that the hard way.
Sam Wilson 15:52
That's great advice. Next question when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?
Julie Holly 15:58
Oh, I'm building new apartment complexes. That is making the world a better place there is a housing shortage and while our homeless population needs to be served and cared for all of the other residents, it's C, B, A everybody needs a place to live.
Sam Wilson 16:14
Yep, absolutely. Julie, if our listeners want to get in touch with you or learn more about you what is the best way to do that?
Julie Holly 16:20
I have the over to the back door of my website Julie Holly, with a Y dot com. So head over to JulieHolly.com and you can see the investment side of me. You can see the podcast and you can join the book club.
Sam Wilson 16:34
Awesome. Julie, thank you so much for your time. I do appreciate it.
Julie Holly 16:37
Thank you, Sam. It's been awesome.
Sam Wilson 16:38
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.