This episode is brought to you by Presario Ventures, a private equity real estate firm based in the booming Austin, Texas, market. To learn how to invest in the future of Texas with Presario Ventures, visit info.presarioventures.com/bestever.
Dive into a deep discussion with Rebekah Taylor, partner in Taylored Investments, as she shares her journey from house hacking in Lynchburg, Virginia to partnering with top-class operators in the commercial real estate space. In this episode, we uncover the importance of due diligence, the impact of current market conditions, and the broadened horizons of real estate investing beyond traditional multifamily units.
Key Takeaways:
- Holistic Investment Approach: Rebekah emphasizes the importance of not only investing in one's finances but also in personal health, family, and spiritual growth. She cautions against being solely driven by financial gains and urges investors to recognize the value in other aspects of life.
- Current Market Trends & Debt Structures: The shifts in interest rates and the resulting impact on multifamily investments are highlighted. Rebekah touches upon the challenges faced with current debt structures, particularly for those who took short-term interest rates in recent years.
- The Power of Partnership & Due Diligence: Rebekah's strategic partnership in a residential assisted living facility showcases the significance of teaming up with experienced operators. She stresses the value of thorough due diligence and learning from each investment experience to grow and adapt in the real estate landscape.
Rebekah Taylor | Real Estate Background
- Partner at Taylored Investments
- Portfolio:
- 120 multifamily units as a GP
- 437 multifamily units as an LP
- LP in fund of funds that controls 225 properties with mobile home parks, self-storage, and multifamily
- 9 units of SFR and small multifamily
- Strategic partner in a 125-bed assisted living facility
- Based in: Lynchburg, VA
- Say hi to her at:
- Best Ever Book: The Go-Giver by Bob Burg
- Greatest Lesson: Hope for the best & plan for the worst by having multiple income streams for unexpected job losses.
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Transcript
Slocomb Reed:
Best Ever listeners, welcome to the best real estate investing advice ever show. I'm Slocomb Reed and today we are joined by Rebekah Taylor. Rebekah is joining us from Lynchburg, Virginia. She's a partner in Taylored Investments, which syndicates multifamily. investments. Their current real estate portfolio consists of the nine units in the Lynchburg, Virginia area that Rebekah and her husband, Nathan, started with when they started as house hackers and then bought a couple more properties. They also have limited partner positions totaling up to 437 multifamily units and their LPs in a fund of funds that controls 225 properties with mobile home parks, cell storage and multifamily in them. They are on general partner teams for another 120 multifamily units. And Rebekah is a strategic partner in a 125 bed assisted living facility. That's a lot of numbers. Rebekah, can you tell us a little bit more about your background and what you're currently focused on?
Rebekah Taylor:
Yes, absolutely. Sorry. That's hopefully not too confusing. So my husband and I started investing in real estate back in 2012 with our first house hack. And slowly grew from there. I worked in the tech world for about 10 years doing sales and marketing. Did really well in that space. Make great money, but all along was kind of thinking, man, real estate seems to be a good space. My dad had been investing in real estate starting back in 2004 in Montana. So I was able to learn from him and he kept pushing us. Go get into real estate more. There's a lot more out there you can do with it and make some great money. So we had paid off our house early. like 2015 or 16 every year, what year, and decided, man, we have all this lazy equity. Let's go use it, pull it out, do a cash out refinance and go buy some more rentals. So that's what we did. And during that time, I became a realtor and started doing transactions on my own for others and for our family, and then stumbled into the passive investing world with syndications. And so I had the chance to work for two different firms the last couple of years, the first doing fund to funds, and then the second doing. value add multifamily properties. And so I've been able to learn from some really top-notch people and get paid for it, which has been awesome. I left the tech world and decided I really want to focus on real estate. And so that's been my journey so far. And then in April of this year, my husband and I started our own firm, Tailored Investments, and we partner with best in class operators to do deals together and bring on friends and family into that mix.
Slocomb Reed:
You said that was April of last year or this year?
Rebekah Taylor:
This year.
Slocomb Reed:
Gotcha. You already have 120 unit property since April.
Rebekah Taylor:
The assisted living property?
Slocomb Reed:
No, you guys are on the general partnership of, is it one property, 120 units that happened since April of this year?
Rebekah Taylor:
The last room that I was at and that was a multifamily property that I was part of that team on.
Slocomb Reed:
Cool. So generally speaking, started with the house hack, fell in love with real estate. My story is fairly similar for the next couple of steps. Got into real estate full time from a different career and then started placing capital passively, getting involved in general partnerships and now starting your own firm and with your own firm, that's where you're a strategic partner on the residential assisted living facility.
Rebekah Taylor:
That's correct. Yep.
Slocomb Reed:
Got it. Based on the conversation you and I were having before the interview, Rebekah, and what you've said thus far, it sounds like you've had a focus on capital raising and investor relations and then finding other operators, GPs, partners who bring the skill sets for the other components of syndicated apartment investing. Is that correct?
Rebekah Taylor:
Yes, that's exactly correct. I learned through our own transactions, even locally that the property management side and some of the day-to-day operations is not my strong suit. I can do it, but that's not what I love. Again, I come from a background with sales and marketing and tech and being able to apply a lot of those skills on the real estate front. And so getting to work in investor relations and help guide investors through the process and help build companies has been something that I've gotten to do over the years. So I'm getting to apply that in this role that I'm in now with our company, but I'm partnering with. really high-class operators that are on the ground and know their markets really well, because it can't be everywhere. My husband and I can't be in every place that we're investing at. And it's been harder to find properties here locally that really fit the criteria and make sense for us. So that's where we've brought in some partners and been able to grow together.
Slocomb Reed:
There's been a lot of upheaval, especially in all commercial real estate, but in multifamily, I'm interested to hear from you about whether or not the market volatility. that we've experienced in other asset classes is hitting residential assisted living the same way. April of 2023, regardless, is a curious time to branch out and start your own firm. Why is it that you made that decision and how much of a factor was the timing in making your decision, the market timing?
Rebekah Taylor:
Ooh, that's a loaded question. There's a lot to it. Yeah, there's a lot to it. So I'll be totally transparent. I had been thinking about it for a little bit. My husband and I had been talking about it, wanting to do something on our own. We were here preaching financial freedom and being able to do something that's your own and not working in a W-2. I'd worked in a W-2 for, gosh, 15 years. And it was great. I loved the dependency of a check every two weeks. Those things were really nice, but at the end of the day, I was building somebody else's business and it was great company that I worked for. But I started to realize that I would love for us to have something that's our own. And we'd already been building some passive income streams through our own real estate. We do some lending locally that we also earn some income from. And again, I'm a realtor, so earning income that way as well. So we had a couple of different income streams that were helping support us. And then there came a situation with a company I was at where they had some unfortunate debt on some properties. And as you know, interest rates have skyrocketed the last year. Plus, and that left them in a position where things were really, really tight for them financially. So, it meant us parting ways. It was very amicable. Again, great company. I loved working with them. Awesome guys. There's no hard feelings there. But it was just a time where they were cutting costs across the board and I was their highest paid employee. So, it just meant that we weren't able to continue that relationship. But it gave me the opportunity and my husband to do what we've been talking about doing and take the leap. So that's kind of why the timing, it wasn't necessarily the best, but I also believe that God has time for everything and his perfect timing. And so I'm a Christian and for me, I knew that I could rest in that. And again, we had income coming from other sources, so it wasn't painful to have to move on and do something on our own.
Slocomb Reed:
I get where you're coming from, Rebekah. You and your husband. start your own firm and the first deal you get involved in is in residential assisted living. The limited information I have about your experience, it's your first RAL deal and you were brought in as a strategic partner. Can you tell us more about what strategic partner means in this regard and why it is that you're involved in this particular deal?
Rebekah Taylor:
Yeah, absolutely. So I knew from my experience being at the last couple of firms that due diligence in who you work with is of the utmost importance. Both of the firms that I was at partnered with other groups and helped do deals together. So I was able to really learn a lot and see some of the pros and cons. Some of the things that were working really well, maybe some of the things that could have been improved on. So going into starting our own firm, I realized that this was top priority for us that we had to find best. in class operators again to work with. So I have a business coach. She's been in the business a long time and I've been just learning from her since January and meeting with her on a regular basis. So she is the one that had brought me into this deal. I do trust her and she has so much experience. So this deal was one that she had been working on. And as we started to dive into it and I got to know the group and got to see the property that they were working on and then the other deals that they've done in the past, their track record. There's a lot of investigating and figuring out who are they? Again, what do they offer? What are they doing with this? What's the big picture look like? So she's again, the one that had introduced me to them and it was the process of coming on board, but it's a slow process for me. It's not one where I'm going to just jump in and bring on millions of dollars of investments before I really get to know them. So. I'm investing my own money in the deal and the strategic partner role is giving me the chance to really sit kind of on the sidelines and be a part of their meetings weekly, learn about this asset class more because it is newer for me. It's a kind of a flavor of multifamily, but it's given me the chance to really dive in more to that asset class and to this group and to learn from them first before I dive into bringing a ton of money from my investment base. So. That's where I'm sitting and hope to be a GP in the future with them. But I really wanted to see how things went early on again with my own money before I start doing a lot more from the capital raising side.
Slocomb Reed:
So for the sake of this assisted living deal, your strategic partner role is more about having a place at the table so that you can learn the asset class, learn the operations and also vet the general partnership and the operators from inside the house. Is that the best way to put it?
Rebekah Taylor:
Exactly right.
Slocomb Reed:
So your core focus is likely building your investor base, but also bringing quality investment opportunities to your base by partnering with quality operators.
Rebekah Taylor:
Exactly right. I think too, for me, I've seen the benefits of investing in real estate over the years, but I've also seen there's a barrier to entry. There's a lot. that goes into learning this business. It's a big job to go on and find properties, secure financing, go through stabilizing them, getting tenants, managing those tenants, managing operations, all of that goes into it. And I've had over the years, friends and family that are, man, I love the idea of real estate, but it's just too much for me to do. I don't have time. I have a job, I have family, I have too many things going on. So this other way that you're offering of being a passive investor, being an LP in a deal is really appealing to me because I would like to get involved, but I just can't do all that you're doing. So that's where it's for me exciting to be able to share the benefits, educate people, give them opportunities, hopefully take a majority of the work out of it for them so that they can enjoy the benefits. They can be a part of it, but not have to be involved in the day to day side from the operational standpoint. So yeah, that's our goal is just helping people get involved more and also create financial freedom for them and their families. And it takes time. It's not something that happens overnight, but we've been able to do that. Through the investments we've made over the years has really given me more time freedom to be a present mom, to be a present wife and get to have more availability.
Slocomb Reed:
Yeah. That makes a lot of sense. You started your firm. We're recording in late September. And I mentioned that because you started your firm roughly five months ago. I imagine there have been a lot of conversations with your investors in the past five months and there were conversations with a lot of them before then. We're wrapping up the third quarter of 2023. I want to put the timestamp on this question because I know that things will change in the future. What kinds of opportunities are your investors looking for right now?
Rebekah Taylor:
Well, in the past, multifamily was definitely the place where I think most people felt comfortable and wanted to be in that space. It's just natural. Like people always are going to need a place to live. And that's traditionally is a really strong asset class. And I still believe that is. I think the deals are harder to find these days that really pencil out. Sellers are still trying to sell their properties up here, but interest rates are up here, so you've got a lot of challenges with making those numbers work. So. I've been sharing with my investors. There are some other options out there like assisted living or like mobile home parks or self storage, which we've seen in the investment that we've done with that with the fund of funds. It's been consistent. Those distributions have continued. They're coming every single month. Whereas some of our multifamily investments as an LP, those have stopped. They're not happening right now, unfortunately. So being able to share with my investors, there are other options kind of opens their eyes. Most just don't realize, hey, I could invest in assisted living. Right. There are other options. And so I think it's perking their interests. They're still trying to learn and figure out, is this where I want to put my money?
Slocomb Reed:
Rebekah, I often end up getting caught up on this topic because raising capital from limited partners is... one of few components of multifamily investing that I have not yet engaged in. So I ask out of ignorance often, and I feel a better way to ask my question because I'm asking for ignorance is to ask, how is it that you engage in the investor relationship? When someone comes to you because they may be interested in the opportunities that you make available. Are you saying I provide X type of. investment opportunities with X type of returns. Is that right for you? Or is it more of a conversation where you're feeling out what it is that investors are looking for and figuring out whether or not you think you can make those kinds of opportunities available and follow up question. I have to do this to you again, Rebekah, when it comes to returns specifically, I want to know what kinds of numbers are in that conversation, what kinds of returns. investors are asking for right now and what you're seeing that you're capable of making available with the current market conditions we have.
Rebekah Taylor:
Yeah, that's a good question. So I never like to sell with returns and I never want to sell with unfound promises. I think that a lot of people out there can do that and that is something I stay away from. My goal really is to get to know the investor and figure out what their goals are. and what they're looking for, because every investor is so different. Some of them might be really focused on cash flow. They're really trying to cut back in their jobs and have more time with their family, whereas others have a lot longer runway. They love their jobs. They're not looking to leave anytime soon. They just want to place their money and diversify outside of the stock market and grow the equity there and maybe have it sit for five or 10 years. Again, every investor is so different. So my goal is really to figure out what it is that they need. And I may not be the right fit for them, but I've been able to connect with a lot of people over the years and I'm a part of some masterminds and it's just been really helpful to be able to say, if you're interested in build a rent, then I've got a guy over here that I know and he might be a good one to talk to. I have not invested with him personally, but he's very well versed in this space. So you should talk to him, or maybe there's somebody that's doing self surgery, whatever it is you're looking for. I just want to be able to be a resource to them. And that's really important to me is that. I can support them in that and it may never mean anything for me. I may never get a return from that, which is okay. That's not why I'm doing this business. It's not to make a crazy amount of money. I truly want to help people. And I've seen real estate, just the benefits of real estate. So if I can share that with other people and help get them to where they want to go, then that's really what I'm going after. I will say returns are important. I'm not going to shy away from that. And Returns are definitely looking different these days than they were in the past. One thing that has been appealing for me with the assisted living space is I'm seeing higher returns there than I have seen in a lot of multifamily opportunities. That population is set to double by, I believe it's 20 60. So there's just a huge amount of people. I believe I heard it's seven out of 10 aging adults will at some point end up in an assisted living facility and that levels of care are so different. But there is going to be a lot more need coming and there's just not enough housing for all of those folks that are aging and coming into that demographic. So I love the fact that there's a growing, growing need and opportunity for people that are looking to provide housing for them, but also provide quality care, provide community. I'm big on community relationships. So that's been exciting for me to see the bigger picture, not just the asset class and the need for it. But. the community opportunity and the just the way we can help people. That's the heart, I think, behind why I like this asset class and I'm diving into it more and more and the returns and hope to double our investors' money after five years, maybe even more already. It's a really great asset that we're diving into. So there's just some really great opportunities there, I think. And I'm excited about that offering something to my investors. It's already cash flowing really well and is going to continue to grow as the years go on. And again, making that difference in people's lives. But let me just also say, I do think again, returns are looking different these days because of where interest rates are at and it's important in our seats, Slocomb, is you're talking to people, I'm talking to people that we're making it really clear with investors that things look different than they did a year, a year and a half ago. And most returns are not going to be where they were because the economic environment has changed so much and interest rates are different. So one thing I've enjoyed talking to some operators is those that are doing loan assumptions. I actually have a property under contract right now that is a loan assumption at a three and a half percent. And that's exciting because everything else is seven plus. It's just harder to find those low interest rate debt. So that impacts your numbers so dramatically. And it's important, I think, to be thinking about that and realizing numbers will look different. So you just can't have those expectations of, Hey, I'm still going to see cashflow up at 8%, whatever it may be right now. It's just different. And you have to think a little bit more about your goals and what you're looking for at the end of the day.
Slocomb Reed:
Yeah, Rebekah, that makes a lot of sense. One more question before we transition this conversation, coming back to the market of the moment, this episode will air very beginning of Q4, it'll air in October of 23. You have several LP positions yourself across a breadth of properties. And I would suspect a breadth of markets with as large as that investment is that the fund of funds is invested in 225 properties, not units, but actual properties. Given the breadth of real estate that you touch with your LP positions, you referenced this earlier. Where are you seeing your returns as a limited partner most and least affected right now?
Rebekah Taylor:
I'm seeing returns on the multifamily front most affected and a lot of that's because of some bridge debt that was taken out and unfortunately interest rates have changed and one of the properties I just got an update yesterday the renovations that they had projected at a certain amount are higher than they projected so that's impacting cash flow. and impacting distributions they're pausing right now as they get some of that under control. So I would say those returns probably on the multifamily front seem to be more impacted versus the fund of funds has been very consistent with paying on a monthly basis. And again, the diversification on that is a lot of mobile home parks and self-storage. I think those asset classes have done, I don't want to say done better. Again, there's a lot of properties in that, so it's a big mix. But I think probably the debt on some of those properties was different than maybe the debt that was taken out on some of the multifamily deals that I've invested in. So I don't know if that answers your question as well.
Slocomb Reed:
Well, I think you gave a better answer than I gave a question, Rebekah. I think your answer of the impact to your returns as an investor has come down to the debt structure that the general partners put in place when they acquired the property or when they most recently financed it regardless of asset class, I think that makes a lot of sense. And I'm going to leave it at that because I don't think you need to say anything else. The debt structures that people decided to take on before we arrived at this moment in the market cycle are having the greatest impact on returns across the board. Rebekah, are you ready for the Best Ever lightning round?
Rebekah Taylor:
Yeah.
Slocomb Reed:
What is the Best Ever book you recently read?
Rebekah Taylor:
A book I read earlier this year that I really liked is called The Go Giver. Have you read it?
Slocomb Reed:
I have, yes.
Rebekah Taylor:
Yeah, I really like that book. Again, going into starting something new on our own. Our focus is really on how we can help people create more of the life that they want. We've been in seasons where we were working so hard that we didn't have time for each other or for our kids, and there's a lot of stress that comes with that. So our goal is to help people make better financial decisions so that they can have more time, freedom, and enjoy life with their families, life. by design, doing the things that they want. And so the Go Giver book, I feel like really emphasizes how can you give back? How can you be focused on others versus being so focused on yourself? So this process of starting our own business is taking a lot of work and time. There's so much that goes into building something new from a website to your automations, to your email list and investor-based and all of those things. We're just in the early phases of that. So that book, I feel like has given me a fresh perspective of not being so focused on How do I make money from these people, but how do I give to these people and help them? And maybe they will invest with me, but maybe they won't. And that's okay. Again, I just want to be able to be a resource for them.
Slocomb Reed:
Natural segue there, Rebekah. What is your Best Ever way to give back?
Rebekah Taylor:
I feel like I just sort of said that. But I will also say we are very actively involved in our church. We lead a community group. We're part of like a meals team, take meals to people. We also serve in missions. work around the world. So you've had the chance to go on a number of trips to different countries and help give back in that way.
Slocomb Reed:
Rebekah, on the deals that you have done, either properties you've acquired or capital that you've placed, speaking to your own experience and decisions and not the decisions of others, what is the biggest mistake you've made and the Best Ever lesson that resulted from it?
Rebekah Taylor:
Well, big picture. I think... The mistake would just be not getting started as soon as I wish it would have. Everybody always says, I wish I would have done this a lot earlier than I have. And then my dad started investing in real estate in 2004 and he was telling us back then, get into real estate. And I wish we would have done it then. Obviously we could be doing so much more big things. But I'm glad that we did when we did in 2012 doing our first deal. I think you just have to get over your fear and dive in. We were so laser focused on, let's find. a larger multifamily property. Let's do this and this and this. And we got caught up in all of the details that we missed out, I think, on some opportunities. So I think the big thing that I've learned is just not be scared to take the step, but also connect with other people, because there are a lot of really smart people out there that can help you along the way. So if you can find those resources as people and add value to them too, not just look for them to help you, but look to help them, I think that's probably one of the biggest things. And then one other side note is again, the debt structure, just thinking through what kind of debt you're taking out on your deals and just being cautious because we're seeing a lot of upheaval on that front. And sadly, a lot of people losing money these days because of some of the choices that have been made in the last year. So I guess that would just be a secondary lesson that I've seen and learned from other people. And it's a hard one.
Slocomb Reed:
That answer resonates with me definitely. I am one of those apartment investors who back in 2020 and 2021 was fixing my interest rates for as long as possible, paying higher interest rates than some of my buddies who are doing the three year and five year terms. And the tables have turned on that conversation for sure.Rebekah, what is your Best Ever advice?
Rebekah Taylor:
Don't just focus on investing in your finances. That's obviously a really important thing. And I believe real estate is great vehicle to invest in your financial freedom and make some really great returns. But I would say also think about your holistic view on investing and make sure that you're investing in the things that really matter as well outside of just your finances because that matters. Whether it be your family, your friends, your health, your mental health, your physical health, your spiritual health. There's so many different aspects of our life that I think. we should be investing in. And it pains me to see so many people that do phenomenal on the financial side, but are just dying inside because of all the other things that they missed out on. They were so laser focused on generating more wealth. Again, wealth is nice, but it's just a tool. And at the end of the day, what is it that you're really after? Understand your why and focus on investing in those other areas so that you have a really holistic health. across all of those different aspects, invest in all of them, not just getting pulled into one direction, but how can you invest in your whole life health?
Slocomb Reed:
Last question, where can people get in touch with you?
Rebekah Taylor:
I'm active on LinkedIn, definitely connect with me there. My website is tailored, my last name tailored, edinvestments.co. So definitely. Connect with me there, I have a link on my website for Calendly if you'd like to schedule a call, I'd love to get to know you. Again, if I can be a resource, please let me know, I'm more than happy to help in any way that I can.
Slocomb Reed:
Those links are in the show notes. Rebekah, thank you. Best Ever listeners, thank you as well for tuning in. If you've gained value from this conversation, please do subscribe to our show. Leave us a five star review and share this episode with a friend so that we can add value to them as well. Thank you and have a Best Ever day. Thank you, it's great to be here. I appreciate the time and thank you all for listening. Hi, Best Ever listeners, Joe Ferris here again. And one last thing before you go, would you like to receive a short weekly email with proven tips from experienced investors, free tools and resources, and a roundup of the week's most relevant news and Best Ever content? Well, if so, join the community of nearly 15,000 commercial real estate passive and active investors who receive the Best Ever newsletter. Just go to bestevercre.com forward slash access. and you'll get the very next one. I hope you enjoyed this episode, and as always, thank you for listening, and have a Best Ever day.
