Suzy Sevier’s real estate journey began only two years ago at the onset of COVID-19. During the lockdown, she and her husband Michael decided to take the opportunity to educate themselves as much as possible and get into the business. Today, the England-based investors are focused on multifamily assets in Oklahoma. In this episode, Suzy discusses how the pandemic kickstarted her real estate journey, how she finds deals in the U.S. while living in England, and why having the right partner is the key to success.
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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 Suzy Sevier. Suzy is joining us from Cambridge, England. She is the co-founder of Adventurous Real Estate which focuses on value-add multifamily. Suzy is also a GP on 388 units, an LP on three deals, including a short-term rental and an ATM deal. Suzy, thank you so much for joining us and how are you today?
Suzy Sevier: Thanks for having me. I'm so excited, and I'm great. It's going to be a great episode.
Ash Patel: You know what, I can feel your energy, it is going to be a great episode. Suzy, 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?
Suzy Sevier: Yeah, I'd love to do that. I'm actually now a real estate professional. I left my W2 in August of last year, so I'm super excited about that. My entire journey started because of COVID and the lockdowns, when everything went virtual. My husband Michael and I just knew that we had the greatest opportunity to get into real estate, so that is what we did. And now we are still focused on multifamily assets in Oklahoma mainly, because I just love Tulsa so much. So we are just scoping out deals there, just creating more intimate relationships with sellers, vendors, our property manager, and just having a lot of fun.
Ash Patel: Alright, a lot of questions already.
Suzy Sevier: Cool.
Ash Patel: Did you have any real estate experience before COVID?
Suzy Sevier: Zero.
Ash Patel: Listen, we're only two years past COVID, so 388 units, LP on three different deals... I've got to hear the story. You took great advantage of the lockdowns apparently, and got busy. I'd love to dive into that story. Tell me everything.
Suzy Sevier: Yeah, absolutely. I'd love to. So with the first lockdown, everyone was sent home from work, and because Michael does wet lab research, he was home and we were like, "Okay, well, what are we going to do?" We could only leave to work out, go to the grocery store, or go to the pharmacy. So we decided to start a mini book club with each other, and one of those books went to the Multiple Streams of Income by Robert Allen. Michael read it first. When he got to real estate investing, he's like, "Just skip the first section. Please just read about real estate."
From there, we found BiggerPockets. From BiggerPockets, we found From Military to Millionaire, and Michael made a post in that Facebook group, asking if people were investing from overseas. Really, one person said yes. That's where it exploded. It was like, we have to go to meetups, we have to get 459 more books, we have to go to all the conferences, so that we could learn as much as we could while Zoom, and just all the virtual meetups and everything were still in abundance. Really, that was ground zero.
Ash Patel: Okay, the lockdown happened and you guys decided to do a mini book club with just the two of you.
Suzy Sevier: Yeah.
Ash Patel: And there was no focus on business books or fiction or nonfiction, or was there?
Suzy Sevier: The first book was The Slight Edge by Jeff Olson, so I guess there wasn't really a pick. Michael was just like, "Hey, my boss gave this to me four years ago and I haven't read it yet. So I think right now is a good time to read it." And he did. In the back, there's a book list and we just kept choosing more of his books because we just really liked The Slight Edge. It was like, "Wow, this makes so much sense, and if he makes it make sense, then I'm sure the books that he recommends will also make sense."
Ash Patel: Alright, and then you stumbled on to real estate. Were you looking to better your financial future? Were you proactively wanting to do something more?
Suzy Sevier: Yes, but we didn't necessarily know how. It was like, "Okay." Michael's full of ideas all of the time with entrepreneurship, so we could come up with a gadget or do this or do that, but then it really... The stock market is huge. So many people just go to that naturally, but immediately when we read about real estate, we're like, "Okay, everything else is now on a different path, because we are just going to focus on this one."
Ash Patel: I love it. How did you pick Tulsa, Oklahoma?
Suzy Sevier: That is also a really good question, because none of us are from there.
Ash Patel: You're overseas, so you're nowhere near Tulsa.
Suzy Sevier: Right. So we went to a real estate conference and the main speaker had just said, "If you are not putting on social media what you're doing, nobody's going to know. Your friends know you as this, your parents know you as that, so you need to let the world know that you're in real estate investing." So we did, and an old classmate of Michael's reached out and was like, "Hey, I have left the Air Force and I'm now wholesaling and flipping, but I've been interested in multifamily. We should chat."
Immediately, that like, know and trust factor was there, so that's how we got our boots on the ground. Although he's in Oklahoma City, we knew that we liked Tulsa, so it was like, "Hey, let's look there and look in Tulsa." Because that was the only disadvantage at the time. Travel was very non-existent, so we just knew we needed boots on the ground. But with that, you go through the 400 things in your mind of, "How do I actually choose a partner?" "Will they be a good partner for me?" "How does this all work?" Having that established relationship with somebody who was already in real estate and very, very interested in continuing made a huge difference for us. So that's how Tulsa was chosen.
Ash Patel: Okay, well, you guys are still new. How do you add value to somebody that's already experienced? Because you have nothing but book knowledge.
Suzy Sevier: Exactly.
Ash Patel: And meet-up knowledge, and Facebook knowledge.
Suzy Sevier: With that, we actually knew that we were going to need a little more, which goes straight back to your question. So actually, somebody introduced us to a much larger syndicator in Tulsa... And how we added value was this individual was thinking about creating a course, and Michael has created courses in the past. So he's like, "Hey, I can help you with that."
The course never happened, but within that time, we had just almost kindly asked, "Hey, would you mind looking over our underwriting, since we're looking in this area? Can you just tell us if we're off or not?" With that, he saw that we were coming back every week with more questions and he saw the growth happening. I think that's actually how we showed value, was showing that we were actually interested and had more questions and did what he actually asked.
The boots on the ground - it was more of a switch. Like, "Hey, we were going to give you all the multifamily value that you had and you were going to be the boots on the ground in return." But we needed somebody bigger than that, because as some people may know or may not know, you need somebody to help you sign on the loan. Because we didn't have any experience; how were we going to do that? When we found this individual, this other syndicator in the area, it was really just doing what he asked.
I think a lot of people take that part for granted. If you say that you're going to do something by your next meeting, please do it. That shows so much more about you than a lot of other features.
Ash Patel: I have to ask, the person in Oklahoma, was that Iven Vian?
Suzy Sevier: It wasn't. No, it was a girl.
Ash Patel: Okay, I'll make an email introduction. Iven just got out of the air force not too long ago, is in Oklahoma, and is a syndicator.
Suzy Sevier: Oh, cool. Yeah, I love that.
Ash Patel: Sorry for that bad guess, but a great person for you to know. He was interviewed by me not too long ago, so definitely connect with him. You've almost got a great roadmap for other people to follow. In two years, you've accomplished so much and you had no knowledge before that. So you're laying out the How-To guide for somebody to become successful in real estate... What was your first deal that you made money on?
Suzy Sevier: It was an 88-unit in Tulsa, Oklahoma. It was $4.375 million, and it was tough. [laughs]
Ash Patel: Who found that deal?
Suzy Sevier: Actually, my husband did. I guess you could say he was an organic mentor. I'm not going to say there was hold-handing or anything. It was like, "Hey, these are some people you can reach out to." That's what I mean by doing what you say you were going to do. We literally just put in the work to find brokers, to chat with lenders, to chat with everyone in the area. So it was through a broker.
Ash Patel: Did you raise money for this?
Suzy Sevier: We did.
Ash Patel: By yourself or did you partner with people who are established?
Suzy Sevier: Actually, all the people who brought money were new, so that was a whole new adventure.
Ash Patel: Okay, did you single-handedly do it? You and your husband?
Suzy Sevier: There were other people who helped with the deal. The only person though who had experience was our sponsor, KP. My husband and I were leading the deal, we brought people the boots on the ground, then we brought somebody else to help and raise capital as well. So the three of us raised $1.7 million total.
Ash Patel: Was this a heavy value-add?
Suzy Sevier: I wouldn't say heavy, but it's on that scale. The whole point of it was to do renovations, add in-unit washer and dryer connections, and then the in-unit washer and dryers as well.
Ash Patel: Alright, and I want to reiterate. You guys are in England; found a deal in Oklahoma.
Suzy Sevier: Yeah.
Ash Patel: There's plenty of people here in the States that say, "There's no good deals. I can't find any good deals." What's your secret to finding deals in a different country?
Suzy Sevier: You treat the brokers like they're humans. We called them and just asked how they were doing... We took notes, so if they said, "Oh, I'm doing this and this this weekend." The next time we called them, we asked how that went, we made it very personable. Because if we're doing it to better our lives, why would we not treat everybody else in the transaction like we want to better their lives also, because they're a huge part of it. Majority of the time, yes, you can still find an off-market deal, but when brokers are involved, you need to treat them like people, your property management company, all your vendors. It's just super important to us, so we just really kept that in mind.
Ash Patel: Suzy, you guys raised a lot of money. $1.7 million on a $4.3 million deal. Why so much?
Suzy Sevier: Because of CapEx. We wanted a little bit of a contingency, but because of COVID, we knew that there could be delays, we knew that supply chain issues were coming up so the original bids that we had from when we close could change, and they did. It was just little things like that. Once we got the lender requirement repairs, once those came back in, we just knew that we had to raise more money then.
Ash Patel: That was a good foresight to know that and to raise that ahead of time. What were the returns projected to investors on this deal?
Suzy Sevier: I'm not going to remember them specifically. The main one I remember is the equity multiplier. That was 2.12 in six to seven years, and then we did an 8% preferred return. Everything in between is squishy.
[laughs]
Ash Patel: Got it. What was your next deal? And how long have you owned this property, the 88-unit?
Suzy Sevier: So we've had that property 14 months now.
Ash Patel: Is your goal still to sell it at the six-year mark?
Suzy Sevier: That's a great question. Actually, about a month ago, one of the buildings caught on fire, so we don't know. That's just added a whole new element of fun that I didn't think I was going to experience so soon, so I don't know. Because when the markets got so hot, we actually thought we might sell it way sooner. Then the market is still hot and so is our property because it's on fire, so we're just like in a whole different mindset about it now. Which is fine, because it was a projected, I guess, guess so that's what we hoped for.
But we'll have to see where the market is. We don't lock in bridge loans or anything. We really look for that longer-term debt so that we can cover any economic downturn. So if in six years, our property is back to normal, then I'd love to do that. I do think it'll be back to normal in six years. But if the economy isn't right, then we'll hold it. But we made that very, very clear at the beginning, that that's what we were looking for.
Ash Patel: I hope you're able to overcome that quickly. Sorry to hear about that.
Break: [00:14:02] - [00:15:49]
Ash Patel: How did you lock in long-term rates? Because it seems like on value-adds, the name of the game is bridge loans. What kind of loan do you have on this property?
Suzy Sevier: It's a 30-year am and a seven-year fixed rate. Seven years worked for us, because of our business plan. But then after that, we had just focused on "What if...?" because the interest rate can change, so we just bought a cap rate for it. So we did feel a little more safe with it. But it was more just asking. I think that's something that people forget about, is that you really can sometimes negotiate terms, because it's agency debt. So we just asked more questions like, "How can we get longer-term term rates?" "How does this work?" "Can we have more IO?" If they say no, they say no. That doesn't hurt my feelings, but I'm going to try to just ask as many questions as I can.
Ash Patel: Good for you. What was your next deal?
Suzy Sevier: Our next deal was a 100-unit deal in a tertiary market right outside of Tulsa, in this town called Pryor. It's almost like a hidden town that nobody thinks about, so I'm sad I'm talking about it right now. But it was a lot of the same thing. Within five years, we thought we would do a 1.99 equity multiplier, we did an 8% preferred return... But that is the happiest property I think I could ever have. It really makes up for our first one. [laughs]
Ash Patel: What are the challenges with it?
Suzy Sevier: With the one in Pryor, it feels like there are no challenges, which is weird to say. But so many great things have happened. I guess the biggest challenge is it's a tertiary market. How do I word this? Because I don't want to say we're limited with the people that live there, because we're not.
Just some few fun facts about this market is that the second-largest Google Data Center is in Pryor, Oklahoma so that just brings an abundance of people. There's a MidAmerican Industrial Park. The amount of different industries constantly blows my mind. Because it's a bridge between Arkansas and Tulsa, you have Walmart, who is strategically always working with Tulsa about how to bridge the gap between the two, and Pryor's right in the middle. So the fact that you have Walmart on your side to help bring companies into the area is fantastic. The largest inland port in America is near Pryor, Oklahoma.
I know I love this little area. But something great that happened is that while we were closing, there was an insurance claim from the previous seller about the roofs. You can't add that into the price, because the insurance claim could either be rejected or approved. So after we closed, I think it took four or five months and the insurance claim was approved, so we now have brand new roofs for all of our buildings. It cost us an extra... Well, not an extra, because all the roofs were paid for. But to add gutters, we paid $58,000 to add gutters on the entire property. That is one great thing about why I just love this property so much. It's like, "Oh, cool, we got new roofs." That does so many things to the value.
Ash Patel: Suzy, that being said, would you consider selling your 88-unit and letting the new buyer recoup what they can from the insurance company?
Suzy Sevier: No, because I want to learn this process. I've never dealt with fire, I've never dealt with development and now I get to do both at the same time.
Ash Patel: Instead of running, you're running towards the heat. Good for you.
Suzy Sevier: Yeah, right? [laughs]
Ash Patel: I got to ask you, so you and your husband, have you quit your jobs? Both of you?
Suzy Sevier: I did. I quit mine in August of last year, just because we knew that me working on this pretty much all day --because the time difference also does some things to you-- was going to be a huge success for us. He is actually active-duty Air Force, so his commitment is still for another seven years, which brings us over to Cambridge, England. So he cannot leave yet, but he will in seven years.
Ash Patel: Okay. If you had to do this without him or he had to do this without you, do you think you would be as successful?
Suzy Sevier: No, because having two people, I literally get double the time of working on it.
Ash Patel: How important is it for somebody to have a partner in real estate?
Suzy Sevier: I don't even know if words can explain that feeling. Even from the perspective of creativity, it blows my mind. Because you can have a problem and you're the only one looking at it. When you bring somebody else in, even if it brings one more idea, it was worth it because you need that constant back and forth. Because even when you have those conversations with your partner, more ideas spark. That in itself, I think, is worth it. To have somebody else working on something that you don't like makes it worth it. A partnership is extremely, extremely important with the right person so I'm glad I chose my husband in this journey for both. [laughs]
Ash Patel: Yeah. Joe Fairless said a long time ago, "If you want to scale, build a team, or take on a partner at least." And for 10 years, I was a one-man shop. It wasn't until I started taking on partners that I was able to significantly scale my business. Like you said, it's just nice being able to bounce off little things with somebody else. I wouldn't call somebody to ask them a simple wording question on a lease, but if you have a partner, it's easy to just constantly bounce things back and forth, to get a different perspective. It really opens up your horizons and makes you think differently. So Best Ever listeners, I think it's great advice. Definitely look into having a partner and building out a team as well. It's so important.
Suzy Sevier: Absolutely.
Ash Patel: What's next for you?
Suzy Sevier: Besides the unplanned development on that 100-unit I was talking about earlier, it's on a lot of land and it's spaced out very well, so I'm actually in the process of developing two quadplexes on existing land there. That's really the next big project, besides just creating that constant relationship and keeping up with brokers and sellers or other owners, because that's the most important part in order to get more of that deal flow just to see if the numbers work right.
Ash Patel: Will that be part of the original deal with investors or is that a separate entity?
Suzy Sevier: That will be a part of the original deal.
Ash Patel: So investors get to share in that upside?
Suzy Sevier: They do. And this is the fun part. So we didn't get to walk it, because when we closed it was still during COVID. Michael and I didn't get to walk it, but when we did finally go there, it was like a breath of fresh air. It was like, "Whoa, you can do a lot in this space." So even that, that's a great example, even creativity within partners. Someone may not see upsides like that, that you will or vice versa and it's phenomenal.
Ash Patel: That's a great point. You talked about a lot of the rosy side of real estate, except the fire. That sucked. What are the hardest challenges that you've had to deal with?
Suzy Sevier: I always want to start people at 100 when I meet them, no matter who they are; there's no reason not to. So when I am explaining a property to my investors or someone, I'm very transparent. So the hardest thing I think I had to deal with is learning that sellers sometimes aren't that way when they're trying to sell a property. Just with our first property at Harper's, there was wood rot that I never knew, that I thought I would find. Just little things like that, like painting over mold on air vents. Those things have been hard.
Also, coming to partnerships. I will forever look at those things going forward. At the time, my partner didn't know to look at it and that is okay, because that's not something I would have looked at either. I think that's been the hardest thing, is that there are so many unknowns for your very first deal. Just be prepared.
Ash Patel: Yeah, and Suzy, from your perspective on being relatively new and very successful in real estate, what's your Best Real Estate Investing Advice Ever?
Suzy Sevier: I'm going to have to say be patient. Pivot, don't panic. Because if you just take a deep breath, the answer will come to you. There are so many things out of our control, the only thing you really can control is how you react. So just keep that in mind for every part of the deal, and just learn for the next one. Like I said, I didn't know to look or press on walls, squishy walls, but I know that for next time, I'm not going to blame that on anyone but myself. Just call, reflect after every single investor call, after every broker call, just to be like, "How can I be better for the next one?"
Ash Patel: That is great advice and that actually took me a lot of years to learn. Pivot, don't panic. Very important. Out of curiosity, why is it that so many real estate people invest in ATMs? What is the deal with that?
Suzy Sevier: Literally, a cash machine. [laughs]
Ash Patel: What are the returns from that?
Suzy Sevier: Right now, I am getting a 24% return monthly. The reason I wanted something like that for cash flow is I have an existing student loan, so I wanted something to cover my student loan every single month that I didn't have to think about.
The depreciation has also been awesome, but I think that was one of the bigger reasons is how high it was for cash flow. You literally are just in the deal, essentially until the ATMs no longer work.
That I liked because, there isn't a whole lot of negotiation at the end, like with multifamily. The economy can not be the greatest or somebody could just not close on your property, even though they thought they could. And so with ATMs, I like that they just die at the end and then I know everything is fine.
Ash Patel: What's the lifespan of an ATM machine?
Suzy Sevier: This deal? They have projected seven years for their prime, so it could go longer. But just for number of reasons, they had given us seven years.
Ash Patel: Interesting. Alright, thanks for clearing that up for me. Suzy, are you ready for the Best Ever lightning round?
Suzy Sevier: Whow!
Ash Patel: Alright. Let's do it, you're ready. Suzy, what's the Best Ever book you recently read?
Suzy Sevier: So I'm going to say Principles by Ray Dalio. So I am just super into learning way more about economics and history, all things above right now. So I'm glad I read that one. It made me happy.
Ash Patel: Suzy, what's the best ever way you like to give back?
Suzy Sevier: There's two. One is directly in Tulsa. There's this little juicery/restaurant that has a pay-it-forward wall. You can pay for other people's meals, smoothies, juices, or coffees. I fill up that wall every time I'm back. But then beyond that, I'm part of Junior League of London just to help other women in property on this side of the world. I try to give it both ways.
Ash Patel: Suzy, how can the Best Ever listeners reach out to you?
Suzy Sevier: That's a great question. If they go to adventurousrei.com/info. You can pick your flavor of how you would like to get a hold of me. You can find Facebook, Instagram, LinkedIn, all of the above. So I'll let you choose how you're most comfortable in reaching out.
Ash Patel: Thank you, Suzy. I got to thank you again for joining us today and sharing your story. In just two short years, you've achieved a phenomenal amount of success, all attributed to you and your husband starting a mini book club back during the COVID lockdown days. Thank you for sharing all of your great tidbits of knowledge with us.
Suzy Sevier: Yeah, and thank you for having me on. It was so much fun.
Ash Patel: It was our pleasure. Best Ever listeners, thank you so much for joining us. If you enjoyed this episode, please leave us a five-star review. Share the podcast with someone you think can benefit from it. Also, follow, subscribe, and have a Best Ever day.
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