Marc Weisi spent his career working in financial markets, starting out in IT and then moving on to trading and portfolio management. Over the last five to six years, he has steadily grown his personal portfolio, eventually transitioning to the multifamily space.
Today, Marc is the principal at Maple Capital Partners, which invests in multifamily commercial assets in class B and C neighborhoods throughout the United States. In this episode, he shares how he and his partner gained experience by raising for other operators and co-sponsoring deals, what he has done to steadily grow his investor network, and what traits he thinks will be most important for investors to succeed in the current economic climate.
“I think it’s going to be the people that are the most creative and the most willing to do what others aren’t in terms of adding value to properties. I think those are the people that are going to get the most deals under contract and do the most in terms of business over the next couple of years here.”
Marc Weisi | Real Estate Background
- Principal at Maple Capital Partners, which invests in multifamily commercial (5+ units) assets in class B and C neighborhoods throughout the United States.
- Portfolio:
- GP of 54 units
- LP of 93 units
- Based in: Jersey City, NJ
- Say hi to him at:
- investwithmaple.com
- Email: marc@investwithmaple.com
- Greatest Lesson: Your level of success will be in direct proportion to the strength of your team.
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TRANSCRIPT
Ash Patel: Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I'm Ash Patel and I'm with today's guest, Marc Weisi. Marc is joining us from Jersey City, New Jersey. He is the principal at Maple Capital Partners, which invests in multifamily in Class B and C neighborhoods throughout the US. Marc's portfolio consists of being a GP on four properties and an LP on four properties. Marc, thank you for joining us, and how are you today?
Marc Weisi: Doing really well. Thanks for having me, Ash. It's such a blessing.
Ash Patel: It's our pleasure, man. Marc, before we get started, can you give the Best Ever listeners a little bit more about your background and what you're focused on now?
Marc Weisi: Absolutely. So I come from the world of finance; I've worked my entire career in financial markets, first on the IT side of things, and then in the last, say, seven years or so, in trading and portfolio management. And over the last five or six years, I've steadily grown my own personal portfolio, and then transitioned into the multifamily space with my partner and I.
Ash Patel: Marc, the million-dollar question - what are stocks going to do going forward? We're recording this mid-August of '22. What's your gut feeling? We're not gonna hold you to it, and we're not going to circle back.
Marc Weisi: My crystal ball is in the shop, is what I always say. I am not a stock guy, full disclosure. I trade municipal bonds, which are a little bit less volatile than stocks, and I'm actually pretty happy about that. So I couldn't tell you as far as the economy. I think that potentially we could have a slowdown here, as we're already experiencing, and hopefully it's a soft landing, as opposed to a hard landing, which the Fed is trying to engineer here.
Ash Patel: Marc, you don't often see finance people crossing over into real estate. How did you get exposed to real estate?
Marc Weisi: So I'll start at the beginning where my father came to this country in the '80s as an immigrant from the Middle East, and kind of a typical immigrant story - came here with nothing in his pocket, and made a life for himself and our family. So ownership and having entrepreneurship in my family was always a pretty seminal part of my childhood. So I always had in the back of my head, having ownership over whether it be a business or real estate. Then I came across the little purple Bible, as I call it, the Robert Kiyosaki Rich Dad Poor Dad book, and I was hooked on real estate ever since then.
Ash Patel: What was your first property?
Marc Weisi: I had bought a condo in Jersey City initially just to live in, and then started to do a house hack. This was back in 2017, before I think some of the terminology around house-hacking was maybe around, or at least in the forefront. And I was just basically thinking that I'd rent out a couple of rooms and help pay a portion of my mortgage every month. And it kind of snowballed from there.
Ash Patel: What was that pivotal moment that made you passionate about real estate?
Marc Weisi: I think it was the fact of just seeing - in my area, at that time, equity values were going up pretty rapidly. And what I was making at work relative to what I was making by just owning property there, as well as the cash flow itself, that was a really an eye-opener for me.
Ash Patel: Do you still work full-time?
Marc Weisi: I do still work full-time, yup.
Ash Patel: And what was your first multifamily property?
Marc Weisi: We started off in residential, as I mentioned, buying condos, and then single family, and then duplexes in the Northern New Jersey area. So technically, it was a duplex. As far as the larger stuff, a 32-unit was the first commercial property that we bought, out of state, actually.
Ash Patel: Who's we?
Marc Weisi: Myself and my partner. We met initially back in 2018, or so. He was another local real estate investor; came from actually the same alma mater as myself, but I didn't know him in college, so it was just kind of a funny past there that we had... And he came from the world of civil engineering. So myself, with my finance background, and him with more of the construction hat and managing large projects, it just seems to be a good partnership there. And we started off very small, on that duplex that I mentioned, and we were there after work every day, putting in the hours, sometimes working late into the night or early morning, and we saw that we were working very hard and working very well together, and that kind of started the partnership in earnest from there.
Ash Patel: Marc, with your partner, did you have the property first, or did you decide to build this company and then go out and find the property?
Marc Weisi: We decided to build a company first. Initially meeting, we both figured out that we had the same goals. In his case, he had a young family, two little children that he was looking to build a legacy for, and for me, I was looking to build up some passive income every month. So we were both aligned in terms of that, and we decided to start off small and take it from there.
Ash Patel: And who found the 32-unit property?
Marc Weisi: We both did jointly. We were in a mentorship program with a mentor who's still a really good friend of ours, who actually, funnily enough, was looking to sell a few of his properties in his target market, which was very close to our target market. So we decided to take a look, and asked him if it would be alright to make an offer on one of those properties... And it ended up working out.
Ash Patel: What were the numbers on that 32-unit?
Marc Weisi: We bought it just below $2.5 million. So it was about 70-ish a door, 72-ish a door, I believe it was. And they're townhomes, they're located in Louisville, Kentucky, which is now our target market. And we bought that in September of last year. And for basically the last 11 months, we've been undergoing our value-add business plan.
Ash Patel: And what is that value-add business plan? Is it full renovations for each unit?
Marc Weisi: Yeah, so we started kind of with an outside in approach, where we were improving some of the curb appeal, improving some of the exterior, and then as units would turn over, we would basically give tenants, if they had a good history with the property and with us, we would give them an option of "Hey, would you like to stay here? Potentially we'll add some improvements to the interior property, you'll pay a little bit higher rent. Or if you'd like to part ways, then we'll go in and do a full renovation." It wasn't a gut renovation, but select improvements there. I think our improvement budget was around $8,000 a door is what we were doing, and steadily renovating these units and attracting higher rents.
Ash Patel: What does $8,000 a unit by you these days? I know prices have skyrocketed.
Marc Weisi: Absolutely, yeah. So we're doing LVP finishes on the flooring, we're doing new paint, we're doing vanities in the bathrooms if needed... We're doing potentially new lighting packages... These units, since they're townhomes, they do have decks on the backs of the units. So potentially some improvements there. And then select other improvements to both the interior and exterior. One of the exterior items that we really wanted to add upon doing our due diligence and driving by the property at various times of day and night, we realized that it wasn't very well lit. So adding lighting to both the exterior of the building itself, as well as the nearby light post, to make it feel a little bit safer and more homey at night.
Ash Patel: Yeah, that's a huge deal. One of the first things I recommend to anybody buying any commercial building - improve the lighting. It makes a huge difference, and just people in that area, or people that drive by realize there's new life in this building. $2.5 million purchase. Did you also raise for CapEx?
Marc Weisi: We did. We raised the entire CapEx budget. We ended up going with agency debt, Freddie SPL program. So we raised all the CapEx budget, as well as closing costs and acquisition fees.
Ash Patel: So what was the total raise?
Marc Weisi: It was about 1.1 million.
Ash Patel: Is this the first time you and your partner raise money?
Marc Weisi: No, we've raised for other operators, kind of co-sponsoring on other deals before, particularly with mentors of ours, where we've come on, helped them raise some capital, as well as serve in some other capacities. And it served as our training wheels in terms of getting our feet wet in this space.
We felt that that was the best approach for us, going from much smaller units to much larger properties; if we could kind of have the comfort and the experience level of more senior operators than ourselves, that we could learn much faster and get off without any hiccups.
Ash Patel: Yeah, I like that approach. Marc, what's easier - raising for your own deals or raising for other people's deals?
Marc Weisi: That's a great question. I think when it comes down to it, you have to believe in a deal, regardless of whether or not it's your deal or somebody else's. So whenever we're raising on a deal, whether it's another sponsor's deal as a lead sponsor, or it's ours, we always look at the deal and do our own due diligence as if it is our deal, in fact.
So I would say that we don't treat the deals any differently. In fact, we're always co-investing alongside our LPs on any deal that we do, because we feel that skin in the game is absolutely necessary to demonstrate that we have commitment to the deal.
Ash Patel: Your investment in these deals - is it reinvesting fees, or is it actually cash from your bank account going into the deal?
Marc Weisi: Yeah, great distinction. It's always cash from our bank account going into the deal. I feel that that's an even higher level of commitment to the deal, as opposed to money which may not have ever been in your possession in the first place.
Ash Patel: I love it. Great answers, great approach. I had an investment club where we evaluated startup businesses, and I didn't care who invested and who didn't, but everyone always asked, "Hey, are you putting money into it?" And that's very important, right? People need to know that if you're behind something, that you've got skin in the game, beyond, like you said, the money that wasn't ever in your possession. I love how you put that. Awesome. How much money did you guys raise for other people's deals before this 1.1?
Marc Weisi: We raised initially around $250,000 on our first deal, and then $300,000, and it kind of grew from there. So starting off with maybe a handful of investors on our first raise, and then as we've made it more known within our network, and as our network has steadily grown, we've grown our investor base there with each subsequent deal.
Ash Patel: Yeah, you're the fast-track to success. Marc, how do you acquire new investors?
Marc Weisi: Great question. So one of the things that we're working on now is revamping our website. We want to put out a lot more content on the educational side. Tons of folks from our networks, maybe they have some fundamental understanding of real estate, but they're a little bit leery of this whole syndication word, and how it all works. So educating is first and foremost how we kind of see ourselves. I've read the Hunter Thompson book, which there's a line in there which I absolutely love... It's "Always be disclosing", and I kind of took that as - whereas in the '80s, when movies like Glengarry Glen Ross popularized this idea of "Always be closing", I don't consider myself a salesperson, I consider myself first and foremost an educator. So whether I meet somebody on a webinar, or in-person, or it's a friend of a friend who maybe had heard what we're doing and what we're up to and wanting to learn more, it's always a matter of hopping on the phone or meeting in-person and making them comfortable with the risks and rewards of this investment class.
Ash Patel: Okay, I love that. Again, if I don't know anything about real estate, and I agree to having a lunch with you to find out more, let's play through how that conversation evolves. So you start with --- "Tell me what you're doing. Tell me this real estate thing and why is it good for me."
Marc Weisi: First and foremost, I actually will flip the script a little bit; I always try to learn about them, because as much as I live in the real estate world every day, and believe in this asset class, and I really think that there's no better investment opportunity out there, it's not perfect for everybody. Real estate is a great tool for wealth building over time, but there are some people that it might not be suitable for. So always trying to understand what their background is, whether they've invested before, whether it be real estate, stocks, bonds, any kind of asset class, and then what their goals are. It has to really align with what the individual's goals are. It is by no means a get rich quick scheme, despite what you might see on social media and things like that. So I'm always trying to set expectations that this is really a long-term investment, and that liquidity is going to be not there for maybe the first two, three potentially five years on the deals that we're doing. And if it makes sense for them at that point, then I'll talk a little bit further about what we're up to.
Ash Patel: Marc, that's a killer mindset. I love that.
Break: [00:12:53.18] to [00:14:47.19]
Ash Patel: With your partner how many deals have you done?
Marc Weisi: As lead GPs we've done two deals. We're currently working on our third deal, which we're doing inspections for this week.
Ash Patel: What's something you would change about the dynamics of you and your partner working together?
Ash Patel: I don't know that I would change anything other than the fact that I would have partnered up earlier. I had been investing for a couple of years on my own, and I guess the quintessential rookie real estate mistake was thinking I had to do it all myself, and figuring out over time that there's more than enough in terms of roles and equity to go around. So giving some of that up in exchange for somebody else's expertise... Because I'm not great at everything, but the things that I am great at are my kind of superpowers, and I prefer to focus on those things, and basically partner with others that can fill in the other gaps.
Ash Patel: What are your superpowers and what are the things you need to offload?
Marc Weisi: I feel that one of my superpowers is my background in financial markets and financial modeling. So I kind of say it as - I stole this from a friend - I'm a freak in the sheets; I love spreadsheets. I love Excel, I spend most of my day in Excel, doing underwriting, looking at markets, analyzing deals... So I serve as the chief underwriter on our team, and do a lot of the acquisitions work on that end, as well as a lot of the capital raising, speaking to investors. And then my partner, he fills the gap in terms of drafting the scope for CapEx, talking to contractors... Doing a lot of the asset management, essentially.
Ash Patel: A freak in the sheets - man, I was wondering where that was going... That's a good showstopper line. Marc, what's next for you?
Marc Weisi: So we're excited to get this deal closed here in the coming month or so, and it'll be another opportunity for us to scale our operations; it's the biggest thing that we've done thus far. There's gonna be 49 units. So looking forward to closing that, and continuing to undergo our business growth here with this deal, and continue to learn along the way. Part of this whole journey is just continuously learning, and I know, in speaking to other more experienced operators, it's something that seems to be a commonality amongst people that are really successful in this space, is they're super-hungry to learn, never think that they know enough... And I think in the current environment that we're going to undergo, I think it's going to be the people that are the most creative, and the most willing to do what others aren't, in terms of adding value to properties - I think those are the people that are going to get the most deals under contract and do the most in terms of business over the next couple of years here.
Ash Patel: I tend to agree with you. Marc, I want to dive into more numbers on this deal, and finish detailing the 32-unit deal as well. You've achieved a lot of success since 2017, and before we get into the numbers, I want to ask, what's the hardest lesson you've learned, and something you can share that the Best Ever listeners can really learn from as well? What's the toughest lesson that you've learned in real estate?
Marc Weisi: Our path has been anything but linear. We've definitely had a bunch of ups and downs. It's been a roller coaster of emotions at times... So I would say taking action every day, and then being comfortable with uncertainty, and course-correcting along the way. So you can't control what's going to happen. There are going to be tons of things that happen that are outside your control, that you're just gonna have to roll with the punches and adapt and pivot to... But it's just important that you get comfortable with the idea that you're never going to have all the information. And I think with my background, being super-analytical, that was something that I had to get over, was the fact that these are properties, these are living, breathing things that you're just going to have to be comfortable with knowing maybe 70%, 80% of the story with, and moving forward. And for the remaining 10% to 20%, 30%, you're going to have to course-correct along the way, and having the right team in place to be able to do that.
Ash Patel: Alright, that's a great 50,000-foot answer... But what is the worst thing that's happened to you that's been out of your control?
Marc Weisi: I would say one of the early deals that we did was actually as an LP... This is a little bit of a different lesson that I learned from the previous one I just outlined... It was really the fact that it's imperative that you as an LP vet the sponsors, vet their morals and their ethical compass... Because there's an age-old saying in syndication that you bet on the jockey and not the horse, and I think that couldn't be more true. You can have the best deal on paper that there is, but it comes down to the individual that's actually running the deal, and whether or not they're going to do the right thing when things go awry, or no one's looking. And so I would say, take your time if you're looking to invest passively, get to know that individual, get to know what makes them tick, and maybe follow them for a few deals before you ever decide to invest a penny in a deal with them.
Ash Patel: The way we get successful is by accumulating a lot of scars, right? What's a deal or an incident that scarred you, or something you lost money on?
Marc Weisi: So it's kind of that story that I just outlined, was we invested with a group that was basically pursuing an Airbnb strategy here in the Northeast, and this was back in 2018, so we didn't know a ton about investing passively, we didn't know which questions to ask or which red flags to look for necessarily, so we invested with them, put our full faith in them... About two years into the deal, we saw that things were going sideways, we weren't meeting our budget, and a number of things that they said were going to be done, weren't being done, and there just wasn't a great level of communication... And so we ended up having to get involved and roll up our sleeves, myself and my partner, and actually stabilize that asset in the last few years here.
So that definitely left a mark in the back of my mind, was that when you're looking at deals, really, like I said, vet the sponsor... Because I wouldn't wish that experience on anybody. But it was also an epiphany for us, was that we can do this; the fact that we had to come in after the fact and clean things up - it was kind of proof and built confidence in us that we could do this... So it gave us the confidence to be able to offer opportunities of our own to investors going forward, with the idea that we'd never want anybody to be in our shoes, like we were a few years back.
Ash Patel: Yeah, that's crazy. So as LPs, you guys have to become active in the investment?
Marc Weisi: Correct.
Ash Patel: Alright, I want to dive into that, maybe in a following episode... Because that sounds like something that we can learn from and do a whole episode deep dive on. We'll come back to that one. Let's finish up the 32-unit deal. I'm assuming it's Class C or Class B...
Marc Weisi: Yeah, it was Class C upon takeover, and it was in a strong Class B neighborhood.
Ash Patel: And the goal is to make a Class B, not Class A.
Marc Weisi: Correct. It's surrounded by a number of properties that were proof of concept for us. They were similar vintage properties, that had undergone some CapEx in the last few years, and were getting the target rents that we wanted to look at towards achieving. So that was kind of our proof of concept.
Ash Patel: Okay. And how long is the hold?
Marc Weisi: We're targeting a five-year hold. With our deals, we always try to match up the life horizon of the deal with the debt that we're securing. So in this case, we have a seven-year debt. It's a five year hold, so should things deteriorate in the coming years, we have a few years to figure things out.
Ash Patel: Is that debt assumable?
Marc Weisi: It is.
Ash Patel: Okay. And projected return to investors?
Marc Weisi: On that deal it was around 14.5 IRR over five years, and eight and a half percent cash on cash, and I believe it was close to, if not over a 2x multiple.
Ash Patel: Got it. And the New deal that you're working on, 49 units - what's the purchase price?
Marc Weisi: This was a $3.55 million purchase price, that we're under contract on.
Ash Patel: In Louisville as well?
Marc Weisi: Correct.
Ash Patel: What's the raise on it?
Marc Weisi: So it is a lower-leveraged loan that we're actually assuming. So being that it's lower-leveraged, it's around 57 LTV, so we're raising about two and a quarter million, which when you compare that to the purchase price may seem a little bit higher than the deals that our past investors have seen... But the reason being that it's low leverage.
Ash Patel: Low leverage; you're borrowing more than 50% - how's that low leverage?
Marc Weisi: It's 57%. We were quoted on new debt around 70% LTV, that we could get, so relative to what we would get on new debt, it is lower leverage.
Ash Patel: Sorry, okay. I get that. I was flipping it. Okay. And the return to investors on this one?
Marc Weisi: Yeah, so we're targeting between 13% and 15% IRR, around 6% to 8% cash on cash, and again, around at 1.8x to 2.1x multiple over five years.
Ash Patel: Is there a pref being paid on this?
Marc Weisi: Yes, we're putting in place a 6% pref.
Ash Patel: And when does that start getting paid?
Marc Weisi: That starts six months into the deal. We want to be able to have enough cushion to kind of stabilize things with our operation on the property side, and then start paying that out in month six.
Ash Patel: Alright, Marc, what is your best real estate investing advice ever?
Marc Weisi: I think it's surrounding yourself by other people that are doing it at a higher level. So the acronym that I always use is PAP. I kind of equate that to the first P is peer, so whether it's a mastermind, or just an investment club that you surround yourself with... Other people that are similar level or maybe a little bit ahead of you, or behind you, that you can learn from and in turn reach one day. That's one aspect of it.
Good advisors, so you can call that a mentor, or a coach, anybody that's a little bit further ahead of us that can help you avoid some costly mistakes. I think a lot of times there are paid programs which I think that money is well spent for a lot of programs, because it'll help you avoid a lot of time, frustration, stress, and potentially dollars in mistakes that you make along the way...
And then the last P is partners. So partnering with people, like I mentioned, that maybe have complementary skill sets as you, have aligned values, live with the same value set that you have, same belief system that you have, that you can partner with and you can all share the load; because as I mentioned, there is more than enough in terms of responsibilities to go around.
Ash Patel: Got it. Awesome. Marc, are you ready for the Best Ever lightning round?
Marc Weisi: I am.
Ash Patel: Marc, what's the Best Ever book you read recently?
Marc Weisi: I am currently reading 75 Hard by Andy Frisella. It's really a program more so than a book. It's kind of a routine that you follow every day for 75 days straight, and it kind of instills commitment and mental toughness. The book is about discipline, in a sense.
Ash Patel: Marc, what's the best ever way you like to give back?
Marc Weisi: I've been very lucky in my life, number one being born in America, number two, being born into a family that was very loving, very supportive, and instilled in me some great values... So I try to give back in terms of mentoring. I mentor a child here in Northern New Jersey, and I've been doing so for the last five years, and it's been tremendously gratifying seeing him grow and learn and develop his own interests and passions, and also incorporating him in what I'm doing on the entrepreneurship side. I think there's a ton to be gained from public schools, but unfortunately, I think one of the things that may be lacking is just this sense of ownership and entrepreneurial pursuit.
Ash Patel: Yeah, I went to one of the best undergrad business schools out there and didn't really learn that either. So I agree with you. Marc, how can the Best Ever listeners reach out to you?
Marc Weisi: You can feel free to reach out to me via email at Marc [at] investwithmaple.com. Feel free to call me or text me, and my phone number is 908-319-4351. Or you could find me on socials. My name is Marc Wisi. I am on IG and Facebook primarily.
Ash Patel: Awesome. Marc, thank you for your time today. Your background in finance, trading and finding real estate after reading that book, starting out with single families, going to condos, and now heading up to 49 units... Congratulations on your success and thank you for sharing your story with us.
Marc Weisi: Thanks for having me, Ash.
Ash Patel: Best Ever listeners, thank you for joining us. If you enjoyed this episode, please leave us a five-star review, share this podcast with someone you think can benefit from it, and also, follow, subscribe and have a Best Ever day!
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