April 17, 2023

JF3147: How to Use Organic Growth to Your Advantage ft. Axel Ragnarsson



Axel Ragnarsson is the CEO of Aligned Real Estate Partners, an investment firm helping busy professionals effortlessly earn passive income to assist with achieving financial freedom. In this episode, Axel discusses his criteria for investing in commercial properties in both New Hampshire and Florida, what his competitive advantages are as an investor, and how his biggest mistake almost took him out of real estate investing forever.

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Axel Ragnarsson | Real Estate Background

  • CEO of Aligned Real Estate Partners
  • Portfolio:
    • Solely owns about 100 multifamily units
    • GP in 300+ more
  • Based in: Boston, MA
  • Say hi at:
  • Best Ever Book: Who Not How by Dan Sullivan and Dr. Benjamin Hardy
  • Best ever advice: Embrace organic growth and grow at your own pace. You don’t have to tackle huge deals just because other people are.


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Slocomb Reed: Best Ever listeners, welcome to the best real estate investing advice ever show. I'm Slocomb Reed and I'm here with Axel Ragnarsson. Axel is based in Boston, Massachusetts. His company is Aligned Real Estate Partners. They buy B and C class value-add multifamily assets in New Hampshire and Florida, with a heavy emphasis on direct-to-seller marketing. Axel's current portfolio consists of around 100 units owned solely himself, and another 300+ units as a general partner. Axel, can you tell us a little more about your background and what you're currently focused on?

Axel Ragnarsson: Absolutely. Yes, so I live in Boston; like you mentioned, we invest up in New Hampshire and down in Florida. Originally from New Hampshire, grew up in New Hampshire, went to college in New Hampshire, so that's why we buy real estate, and that's really where we started buying real estate, was in New Hampshire. And we've since grown a nice portfolio there, we're vertically integrated, we have our own management company, and we do some third party management as well. So we have a great team up there, and really a couple of years ago hit a wall in terms of the amount of deals that we were able to do up there, just because there's physically not that much real estate in New Hampshire, as I'm sure many listeners could guess. And we wanted to keep doing more deals, do larger deals, and there weren't enough deals to offer on to really even be close to reaching our goals... So we started looking at [unintelligible 00:02:42.17] started looking down in Florida, specifically Central Florida, we started buying property in a market called Lakeland, in a city called Lakeland, I should say, a city that's right between Tampa and Orlando... And reason being I had some personal contacts down there, and it was an easier transition. It was a market that was similar in terms of price per unit, in terms of rents, in terms of a lot of the financial components of it, to where we were buying real estate up in New Hampshire... And obviously, a different market; Northeast is very different than the Southeast... But it was a very easy transition for us, and we've been buying real estate in Florida for a couple of years now, and we've done four deals there, we've sold a couple... And just looking to continue growing in both of our markets. The majority of our deals are still up in New Hampshire, because it's our backyard. It's about 45 minutes to an hour from Boston, where I live... And then we're looking to continue growing in Florida as well.

But over the years we've started bringing investors into our deals, started raising capital from retail passive investors... And we're just into the future looking to do more deals, and bring more folks into our investor club that want to participate in our offerings... And it's been a nice ride.

Slocomb Reed: Nice. So Axel, tell us again where is it in Florida that you're investing currently?

Axel Ragnarsson: We focused on Central Florida along the I-4 corridor. So we started looking at Tampa; we couldn't really compete in Tampa, so we went farther inland, and we started buying deals in the Lakeland area... So Lakeland, Winter Haven, Bartow, Florida, a trio of towns that sits between Tampa and Orlando... And we're looking at some other towns in Central Florida as well, such as Ocala, Florida... And we're open to buying in Tampa and Orlando, of course, but we don't actively market to those areas. We're not sending direct mail or making cold calls there, just because, again, it's more competitive, and we feel like our efforts are better applied in these areas outside of Tampa and Orlando. But that's the general area that we like to be in, is along the I-4 corridor, between the MSA of Tampa and the city of Orlando.

Slocomb Reed: Axel, you're certainly the only person I've ever heard say that you invest in Florida because it's just like New Hampshire...

Axel Ragnarsson: [laughs]

Slocomb Reed: I want to ask here - the New Hampshire investing makes sense when you consider the proximity to where you are in Boston, and you went to school there, and you have some experience... Tell us what those markets are like, what are some points of comparison for people who do not invest in the Northeast, or who don't invest in Florida, but are considering it. How would you describe those markets?

Axel Ragnarsson: It's a really good point. And obviously, those two areas being similar, you're like "What? There's no way." At least when we were selecting a market initially, I wanted to look for a market that was similar from a demographics and size standpoint, as well as the types of deals that we'd be pursuing. So for example, Manchester, New Hampshire, which is the largest city in New Hampshire... Largest city - it's only about 120,000 people; not a very big city. But it's about 120,000 people in the City of Manchester and in that area. The city of Lakeland in Florida, about 100k to 120k people. It's about 100,000 people and change. So very similar size of market. The rents were very similar; rents are a little bit higher up in the Northeast, up in New Hampshire, than they are down there, but relatively similar, average rents for New Hampshire being $1,300-$1,400 for a two-bed, average rents down in Lakeland being, at the time we were underwriting the market, around $1,050, $1,150 for a two-bed. And the deals, from a pricing standpoint, were very similar; they were right around 100k a door in both markets in terms of the average price per unit for multifamily properties.

So for me, it was easy to conceptualize all of that. It wasn't like we were going into a different geographical area that was also very different from a pricing standpoint, and that was helpful for us... And the real adjustment was just the actual physical real estate; a lot of single storey concrete block construction in the Southeast, whereas in the Northeast it's predominantly early 1900s built three-storey properties, with woodframe construction. So there's some nuances that are different there. But from a financial standpoint, very similar; from a market size standpoint, very similar. And that's really why we selected that area, was we didn't want to be learning too many new things at once. We just wanted to focus on learning the market, getting familiar with the type of construction; we didn't want to learn some of the other stuff, if that makes sense.

Slocomb Reed: That does make sense. What size property do you all focus on?

Axel Ragnarsson: Right now in New Hampshire we have a pretty wide criteria, because we need to have a wide criteria up there. We're looking for anything that's five to 100 units; our sweet spot is the 20 to 80 unit range. That's where we really like to do our deals, in kind of the mid-size multifamily sizing. The small deals I'll just by myself, and then the stuff that's 30, 40, 50+ units we'll go out there and raise some capital to buy.
Down in Florida we have a slightly tighter criteria, because it's out of state, and we've gotta make it worth our while... So down there we're looking at anything that's 20 to 100 doors. And again, our sweet spot's in the middle. So we own a 48-unit down there, a 42 unit, we have a 28 and a 16 that we bought and have since sold... So we find a lot of opportunity there, just given the fact that it's a little too small for the big guys, a little too big for the local, smaller folks... And that deal sizing is our sweet spot, because we're usually raising a million and a half, a couple million dollars to do those deals, depending on the size and the market. And it's big enough for us to raise some money, it's big enough for us to feel like we should work on it... Obviously, we'd like to do the bigger deals, but in general, that's where we've built out our criteria.

Slocomb Reed: Axel, I want to dive deeper into your deal sizing. Can you tell us a little bit more about why your floor is where it is, and why your ceiling is where it is? Your floor in New Hampshire is lower, because you already have the in-house management, you have the operational infrastructure that it makes sense a five, six-unit; in close geographic proximity to stuff you already manage - simple, I get it. And you have your own capital to buy. Most people in this space define their ceiling and their floor for deal size based on the competition and their competitive advantage. Is that what you're doing, and if it is, who's the competition, and what's your advantage?

Axel Ragnarsson: Yeah, it's a good point for all the reasons you've mentioned. That's why we have it where it is up in New Hampshire. But we have arrived at that criteria for the reasons you mentioned, which is we're competing with less sophisticated folks, and then we feel like we can outcompete these folks. So let's talk about New Hampshire as an example.

So New Hampshire, C and B class multifamily - there's so much product up there in that 20, 30, 40-unit sizing, whether it's one building or a portfolio of smaller buildings, that is owned by Mom and Pop landlords. So a lot of unsophisticated owners that own that type of real estate within that size range, and the fact that we have our in-house management, the fact that we're able to raise retail capital... We're in the process of bringing construction in-house; this is something we're hoping to do over the next couple of months. We are very, very good at operating those types of properties, and there's a lot of challenges with operating those properties in New Hampshire, because a lot of them are built between 1880 and 1920. It's very old real estate, right? So there's all kinds of nuances at running those types of properties, and we feel like we're really good at it, so that's our competitive advantage up there.

And the other piece of it is we do a lot of direct to seller marketing, we do a lot of prospecting to owners, via cold calling, emailing etc. and we just have more success finding great discounted below-market deals with those strategies in that range. Those strategies don't necessarily work for the large deals. Once you get above 80, 90, 100+ units, depending on the market, depending on the deal size for that market, all of those deals are predominantly traded through brokers, about 98% of them, or whatever the number is; it's a very significant percentage. So that type of marketing, that type of prospecting, trying to find deals direct to seller doesn't really work there. So in the range that we're seeking right now, it does work, and we are able to find deals at a great basis, and we're buying below market value, and then we can operate really effectively. And the same thing applies down in Florida, but we're not vertically integrated down there. We work with a great management company, who manages thousands of units throughout Central Florida and Southwestern Florida. We have a great relationship with them. And again, the fact that we can go direct to seller to find those deals, and buy property from Mom and Pop owners, and we're okay with the fact that - yeah, it's a smaller deal. Yeah, we're not getting as much scale as we are in these 100+ unit assets. Yes, it does take the same amount of time to do this deal as it does to buy a 100+ unit deal; we recognize that, and we're willing to do it because we're buying at such competitive pricing, because we're putting in so much work every week, every month, every quarter, every year to get in front of the sellers at the right time. And that's where we feel like our competitive advantage is to investors.

And then on the operations side, I have salaried staff in our business, a full-time director of operations who's really an asset manager, who is really, really diligent about managing our construction, managing our P&L... I have a full-time acquisitions guy that help us find the deals...

So we feel like we're really good at these different parts of the business, and we've invested internally into people that are specializing in that work. So it's not just me. And that's how we define our competitive advantage, and that's how we've arrived at that range from a criteria standpoint.

Slocomb Reed: Are you doing the same amount of direct seller marketing in both New Hampshire and Central Florida?

Axel Ragnarsson: We are doing the same amount, but we're just getting more deals in New Hampshire, because it's a less competitive market. So we've got to pound our head against the wall a little bit more to find deals in Florida. We only do a few deals in Florida each year; at least that's what we've done the last couple of years. But the same amount of marketing, we just uncover more deals in New Hampshire, because we're just competing with less folks. We're only competing with the local folks, we're not competing with local, regional... And no national folks are getting interested in Lakeland. Lakeland has really significant rent growth, really significant population growth, significant job growth... So now we're starting to compete with folks that are truly outside of the Southeast. So it's the same amount, we just get more per hour of time invested in it up in New Hampshire.

Slocomb Reed: I'm catching myself making an assumption about why you're having more success in New Hampshire than in Florida... So what I want to do is I want to vocalize that assumption, and then let you tell me if I'm right, but also tell me where I'm wrong... Because I get the feeling a lot of our listeners are thinking the same thing that I am; or at least our active listeners, especially active listeners who have done their own direct to seller marketing the way that you and I have. Here's my assumption, Axel - you're having more success in New Hampshire not only because it's a less competitive market, but also because you're willing to chase smaller deals. If you're gonna go direct to seller, the smaller the property, the more likely you are to have success, because the smaller the property, generally speaking, the less sophisticated the owner, and they're likely an owner-operator, who if they're responding to your marketing is not very good at it.

The larger the property size, generally speaking, the more sophisticated the owner, and the more likely that there are established broker relationships, and the more likely it is that brokers are hunting for those deals as your competition going direct to seller [unintelligible 00:13:22.17] the broker can get them more than you can. So your direct to seller marketing success in New Hampshire is not just because of competition, but also because you're willing to go for smaller stuff. Am I right here?

Axel Ragnarsson: I think in general, you are correct, for sure. We do a high-volume of these five to 20-unit deals in New Hampshire. I will add to that, because I agree with everything you just said, and I do believe that to be true... And when we're marketing, the portions of our lists that are the same as our Florida criteria, 20 to 100 units, we still do more of those deals in New Hampshire than we do down in Florida... Because I still think Florida is just fundamentally a more competitive market. We sold two of our properties down there. One of them was to a New York buyer, the other one was to a buyer from Philadelphia.

Slocomb Reed: And these are 16 and 24 units...

Axel Ragnarsson: 16 and 24, yeah, so smaller property. These are small assets, right? And we're still selling them to true out of state investors... Whereas in New Hampshire, if we're selling, we're selling to folks from New Hampshire, and then from Boston. People come up from Boston to buy in New Hampshire, like I do.

The other thing that I will mention is operating real estate, and C and B class real estate that was built in the late 1800s, early 1900s - it's incredibly challenging, to put it mildly. There's a lot of work that needs to be done. There's tons and tons of CapEx that's constantly popping up; you're constantly fixing or replacing the plumbing, fixing or replacing some of the electrical, constantly working on heating systems. It's almost like a never-ending battle against the attrition of the building. Whereas down in Florida, you buy something that's built in the '80s, even if it's a C Class property from a tenant standpoint, there's a little bit more predictability in the maintenance, and a little bit more predictability in the CapEx, just because the building isn't nearly as old. At least that's what we've found in our experience, and this is what I've noticed other investors talking about as well.

So a lot of folks come up to New Hampshire from Boston, or from out of state, or folks that are local to New Hampshire, and maybe they're not very experienced, and they do their spreadsheet math, and they have their 40% expense ratio, and then two years into owning the property, they're like, "Geez, I haven't really pulled any money out of this." And they did their underwriting wrong, because they've underestimated the repairs and maintenance, and the CapEx, and all that, and then they go to sell their property.

So we have real estate turning over at a higher rate in New Hampshire, even if owners think they're sophisticated; even if they use the right management company, even if they're doing all the right things, which is because they didn't underwrite it correctly. We oftentimes find ourselves buying property from folks like that. That's something I've noticed up in New England as well, or New Hampshire specifically, but really New England in general; it's the same thing - very old properties [unintelligible 00:15:43.21] mostly New England. And then in Florida, I think it's a little bit easier to dial in your underwriting [unintelligible 00:15:48.02] from an expense standpoint. I'm not going to get into the rental income side, and all of that... But that's also something that I've noticed in our business.

Slocomb Reed: I need to have a real estate investor and architecture nerd moment here with you, Axel... I'm very familiar with those 1880 to 1920 builds, because I'm in Cincinnati, Ohio, and Cincinnati experienced a major housing boom coming out of the Civil War. Naturally, it's the first stop in the, quote/unquote, North coming after the Civil War. But a lot of the smaller buildings I own are from that same era, and I absolutely get where you're coming from.

There's a vast difference between wood frame and structural brick buildings from that era. I'm at my office right now in Northside in Cincinnati, in a building that was built either just before or on the earlier end of that spectrum; no one knows, because there was a fire at the records office in 1890, so we just know it was built before 1890... But to your point, about those buildings, the previous owner of this one in the late '90s rewired the whole thing, replumbed the whole thing, redid the boiler heat; didn't put in air conditioning. I had to add the air conditioning, and I've got a few different systems operating in this building, to your point... But I'm very familiar with those challenges, and those challenges of structures that are that old when they have not been as cared for as meticulously as my office here has, create a lot of challenges for a lot of people, especially who are trying to invest remotely, and just don't realize what they're getting into.

Axel Ragnarsson: Absolutely. You're speaking my language, because I think it flies in such conflict with spreadsheet math. A broker takes out a deal and says, "Yeah, your repairs and maintenance are going to be 850 per unit, per year." They use some kind of "insert a figure there" in the pro forma P&L to go out there and sell the deal. And even if you adjust it up a little bit to $1,000 per unit per year or something along those lines when you're underwriting, it's still not enough to truly capture the amount of money and energy that goes into just keeping these buildings livable, operating correctly.

So you're familiar with it, I know the Midwest has a lot of the same attributes, and it's really just New England as a whole. It's New Hampshire, Vermont, Maine, [unintelligible 00:18:03.07] Connecticut, Rhode Island - all of these states, it's just so much older housing, and if you're a newer investor, or you're an investor that just isn't really familiar with the operations, you have been removed from it for a long time or something along those lines, oftentimes you can find yourself in a surprising spot.

Break: [00:18:19.13]

Slocomb Reed: This is not the direction I was expecting this conversation to head in, but I want to go ahead and dive in full-force. Let's talk about competitive advantage. While you and I have a similar competitive advantage in that we understand how to profitably operate 100 to 140, 150-year-old buildings... I will never forget, I was returning a rental car to the airport in Frederick, Maryland when Tim Ferriss was on the Bigger Pockets Podcast, and he was talking about all the competitive advantages that you can have in business... And I pulled over on the highway; I was on the shoulder, I had to pull out my notebook and write down what he was saying... And he was saying when you're making especially an acquisition decision, all the advantages that you can have fall into one of three categories. There's an informational advantage, analytical, and behavioral.

Another way of looking at that though is that I often end up feeling like my competitive advantage is that I'm either willing to do something other people aren't, or I'm able to do something that other people aren't willing or able to do. That often comes up with the investments that I'm looking at in Cincinnati. One of the reasons that I invest in smaller properties on the lower end of the range that you're talking about is that, like you, I have my own property management company here; it makes a lot more sense for me to take down a four unit and add it to the 20 other units in the neighborhood that I'm already managing. Difficult tenant situation is likely one that I've already dealt with... So I get where you're coming from with recognizing your competitive advantage. Let me ask more specifically here - how is it that you look at your competitive advantage when investing, both in Florida and in New Hampshire?

Axel Ragnarsson: So first of all, I think I'm gonna have to go and listen to that Tim Ferriss podcast, because that's right up my alley. I don't think I've heard that one. His appearance on BP, it sounds really good.

Slocomb Reed: It's been it's been years now. I couldn't tell you -- oh, man, like 2016, maybe...

Axel Ragnarsson: Wow. I'll dig it up, because I find that to be really interesting. Almost every decision we make in our business as it relates to our criteria, the market selection, and just how we approach actually a business plan in terms of executing a business plan is with the competition in mind. And I think that oftentimes people forget that we are in a business, and we are competing with other folks. We all call ourselves real estate investors, but we're really real estate business owners. So I'm going to talk about market quickly, because I think that addresses a component of your question, which is the information advantage.

We like markets where there are fewer transactions, where there's less data points for sellers and brokers to look at when they're pricing properties; where there are less rent comps to look at when you're pricing an apartment, when you're going to take it out to lease it right after you're done with the renovation. Where there's just less information available to the public. And by specializing in that area, and really, really diving in in a granular level into the information that we have, we feel like we can put ourselves in a better position than the other investors that are participating in that market.

New Hampshire, and where we invest in Florida, are both examples of this - smaller markets, tertiary markets. There's just less transactions in terms of a volume standpoint than there are in primary or secondary markets. And as a result of that, maybe there's been some time that's passed since a deal traded, and a broker is trying to figure out where to price something, or a seller is trying to figure out what they want for their property... They don't have as much information to support that decision, to help them make that decision. And because we are so active and in the weeds, and we're constantly buying something, we're constantly refinancing something, we're constantly selling something, we're seeing where appraisals are coming in, we're constantly in the market, speaking with the brokers, and the PMs, and the other investors, we feel like we have a really, really up to date sense of what's going on in the market.

One of the things we have in our business - and I'm going to try not to get too sidetracked - is we have a trade tracker that we constantly populate with all of the deals that sell in the market. Every time we get an appraisal done, we enter it in the trade tracker, whether it's on one of our properties, or someone's property that we know in the marketplace. Anytime we speak with a seller and they have an asking price and we underwrite the deal, we include our underwriting results in this tracker; we tag it all as Sold, Appraised, or Underwrote. We have all of this data that we typically produce ourselves, in addition to what the market gives us, that allows us to really be up to date.

So from an information advantage standpoint, we really feel like we have an advantage there. And we're better equipped to know exactly what we can lease units for when we renovate them. We know exactly what the market is trading at in a real time capacity, because we have all this up to date data. And sellers don't nearly have that much data in the markets that we're playing in.

Brokers typically have much more than sellers, of course, and this is why we focus on direct to seller deals, because we wanna leverage that advantage... But even brokers too, we can find a miss-pricing on the broker side as well, because every once in a while a broker that only does a few deals a year takes the deal out to the marketplace with a long-term client of theirs, and they might not be up to date with what's going on.

And that's kind of step one, where we can really dial in our underwriting; maybe we can pay a little bit more than the investor hasn't bought something in six months, because their mind is anchored in pricing from six months ago. And ours is anchored in what's happening day to day to day. So that's one thing.

And then on the management side, and at least in New Hampshire where we own and operate, we third-party manage a few hundred units, we manage a couple hundred of our own... That puts us on the larger side of management companies in the market that we participate in in New Hampshire... So we constantly know exactly what types of application numbers we're getting, at which rent prices, in which zip codes, and we have all this data that supports where we can take things out... Which an owner that works with third party management or has a small internal management company is going to have a hard time keeping up with us on.

And we leverage the same approach in Florida. Lakeland, 120,000 people; there's not a lot of historical transactions. We have a great PM that works with hundreds of owners and they manage thousands of units. And I'm not shy about asking them exactly what they're seeing from a rental standpoint, all across that marketplace from a zip code by zip code standpoint, asking them exactly how many applications they're getting, our units where they're leasing them - we want all this data; we have an Appfolio login to get into the backend, to see exactly what's going on in our property... And then we're constantly asking for information on their other management clients' portfolios, that will take whatever they give us; obviously, there's confidentiality, but we're going to take what they give us.

And [unintelligible 00:25:45.17] they've owned a property for five years, they might think they've kept rents to market. And even if they're doing their best effort to keep rents to market, they still just might not even know what the market is, because they haven't been in the game for that long, and they don't have the type of data access that we do.

So if I were to boil down the competitive advantages you mentioned, I think they really fall under the information category. In terms of doing what other folks aren't willing to do, kind of from a behavior standpoint, we're willing to have the tough conversations with tenants that Mom and Pop owners aren't. I think in that situation we're willing to get in there and do more construction upfront to set the property up to run more successfully long-term. We like to do as much CapEx as we can that first year to make the remaining years of ownership a little bit more predictable, especially up in New Hampshire, as we're talking about, where there's so much variability in these old buildings. We're willing to do some of that stuff, versus wait for stuff to break and fix it over the years, where we have that unpredictability. We'd rather replace the boilers that are 30 years old, even if they're still operable. We'd rather just do that upfront, because we know over the next few years we're gonna replace them, so we'd rather do a lot of that stuff now, so that we can manage our cash easily in the long term, and not become a stressed out owner or a distressed seller or what have you. So there's some behavior stuff, but I really do think it lies on the informational side. And I'll stop there, because I might be rambling, but I wanted to be thorough in my answer.

Slocomb Reed: It's an incredibly helpful answer, Axel, and it should do a lot to encourage our investors to think about their own competitive advantage. One thing, speaking from personal experience, as an investor, as well as an agent who works with investors - if you are in the smaller multifamily space, especially five to 20, but frankly, one to 20 when it comes to the residential rental space, you are going to come across a lot of sellers on and off market, who have decided to sell, to your point, Axel, because they've put themselves in a position where they have difficult tenant relationships, and their breaking point was that they didn't want to deal with their current tenants anymore. So they've decided that now is a good time to sell, and they may even be willing to sell at a discount, because you're buying all of the issues they've given themselves by placing bad tenants. So Best Ever listeners, keep that in mind if you are continuing to invest or considering investing in that multifamily space, especially five to 20 units. Especially if you're buying from a burned-out owner or a burned-out operator, chances are the tenant base is not as good as you were expecting, and you need to underwrite for more issues with your current tenants than are presenting themselves during due diligence. On that note, Axel, are you ready for the best Ever lightning round?

Axel Ragnarsson: Absolutely, let's do it.

Slocomb Reed: What is the Best Ever book you recently read?

Axel Ragnarsson: A recent book I read that really changed how I think about this business is "Who, not how" by Dan Sullivan. I can't believe I'm spacing on the actual author's name, who co-wrote it with Dan Sullivan. Ben Hardy is the other author. Dan Sullivan and Ben Hardy. That's an unbelievable book on how you should think about growing your business from an organizational standpoint, and how you should think about bringing people into your business to take things off of your plate, which has historically been a major challenge of mine, but one that I'm really trying to tackle, and that book was really helpful in changing my thinking around hiring and delegation and all that.

Slocomb Reed: I'm a big fan of that book as well, especially given that Dan Sullivan, "Who, not how", did the authorship of the book. He wanted to write a book, so he got him someone else to do it for him; [unintelligible 00:29:20.28]

Axel Ragnarsson: Exactly.

Slocomb Reed: What is your best ever way to give back?

Axel Ragnarsson: There's some charitable causes that we've started within our management company specific to the local area, Manchester, New Hampshire, where we invest. And there's a lot of areas in the town that are rougher. There has historically been some drug problems in that town. We give back to some of the treatment facilities, some of the assisted living facilities. So it's more of a local approach to helping our community on the ground, and we try to obviously help our community in the work that we do, which is improving the quality of life and the neighborhoods that we manage properties and that we buy properties in. But above and beyond that, we have various causes locally we like to support.

Slocomb Reed: Axel, within your real estate investing what is the biggest mistake you've made and the best ever lesson that resulted from it?

Axel Ragnarsson: This was probably four or five years or so ago now; it was early in my investing career. I just tried to flip a duplex. This was like my second year in real estate. I got absolutely hosed, lost tons and tons of money; it almost sent me to zero, it almost took me out of the game completely. The one thing that I really took away from that is you should never be in a situation where you feel like you're biting off more than you can chew. That specific project was a larger renovation than I'd ever personally managed; it was a bigger deal from a dollar amount standpoint than I'd ever bought, and found myself in a position where I was just in the deep end without my floaties on, so to speak. And whether you're leveling up from doing 100 unit deals to 500 unit deals, or you're leveling up from doing a duplex to 20 units, or you're going from zero to your first flip, you have to make sure you're comfortable with the deal that you're getting in; you have to make sure you have a good handle on it. And if you don't, just bring in a partner that's been there and done that before. And that's what I would have done if I were to go do that deal, again, it's just bring in somebody that's managed a multi-six- figure renovation, that's got the team built out to help with that, and had him or her help me with that project, instead of me trying to learn it on the fly, making all kinds of insanely costly mistakes, putting myself in a tough position as a result.

Slocomb Reed: On that note, Axel, what is your best ever advice?

Axel Ragnarsson: The best ever advice - and this is contrary to what I think a lot of people talk about on podcasts, which is go bigger, sooner, try and shorten the timeline... I think that can be good advice, but I also think it's important to go at the pace that makes sense for you. I think we've seen a lot of people the last few years just do way bigger deals just for the sake of doing it, because there's capital ready to invest with them, and they think they can, and they just go out there and start buying really large properties... And similar to the last lesson that I learned, where I bit off more than I could chew, I think a lot of folks have been in that position where they bit off more than they could chew.

We're recording this in March of 2023. I think a lot of folks right now are feeling the burn with what's going on in the marketplace, and there's a lot of people that ran a little bit too fast, and found themselves in a tricky spot. So I think it's okay to organically grow, to do 5-10 deals with your own resources, your own money, in your own backyard, before you start raising money, before you start scaling your business. And that's what I did, and it's allowed me to grow in a very stress-free way, in a very predictable way. I did my own deals for five, six years; only the last couple years we started raising money. And as we started raising money, we just incrementally grew the size of deal that we did, and it's allowed us to do so without worrying about the wheels falling, without worrying about us making really costly mistakes, and staying in our zone of genius has really helped us along the road.

So I would say be okay with going at your own pace; be okay with organic growth. You don't have to run as fast as the people that you listen to on podcasts. And if that's not your personality type, don't defy that just to do it, because that is technically the fastest way to reaching some massive goal. So hopefully that makes sense.

Slocomb Reed: It does. Axel, thank you. Best Ever listeners, thank you as well for tuning in. If you've gained value from this conversation today about finding your competitive advantage, please do subscribe to our show, leave us a five star review and share this episode with a friend you know we can add value to and helping them find their competitive advantage. Thank you, and have a best ever day.

Axel Ragnarsson: Thank you, sir. I appreciate the invite.

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