When everyone was running from the industry after the housing crisis, Samson Jagoras stuck it out. Although he questioned how far real estate could go, he decided to dive into multifamily for scaling potential. Samson tells us his best tips for creating and maintaining relationships with brokers, how to ensure they keep bringing you deals, and his biggest lesson learned from working with investors.
Samson Jagoras Real Estate Background:
- Commercial Real Estate Broker / VP of Strategic Investments for RE/MAX Commercial Alliance
- Founder of Growth Vue Properties & Passive Power Group
- Current portfolio consists of $3MM+ assets under management including small multifamily, single-family, and industrial
- 10+ years of commercial real estate mentor experience
- Based in Windsor, CO
- Say hi to him at www.samsonjagoras.com
- Best Ever Book: Extreme Ownership
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TRANSCRIPTION
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, Samson Jagoras. Samson is joining us from Windsor, Colorado. He is a commercial real estate broker and Vice President of Strategic Investments for RE/MAX Commercial Alliance. Samson is the founder of Growth Vue Properties and Passive Power Group. His current portfolio consists of over $3 million of assets under management.
Samson, how are you today? And thank you for joining us.
Samson Jagoras: Hey, I’m doing great, man. Thanks for having me on the show.
Ash Patel: Before we get started, can you tell us a little bit more about your background and what you’re focused on now?
Samson Jagoras: I grew up in Los Angeles, California, I played a lot of sports at a really young age, found football when I was about 14 years old, did that for about 10 years of my life, which is how I ended up in Colorado. I played at the University of Colorado, and I studied Integrated Human Physiology. I thought I wanted to be an orthopedic surgeon; my grades pretty much determined that for me. Trying to play football at the D-1 level and maintain like medical school grades was not necessarily congruent, at least at my schooling capacity. And that was actually a really good thing, because that just changed my path and my trajectory quite a bit. As I was approaching graduation, I didn’t really know what I was going to do, and I got an opportunity to join a Futures and Commodities Trading Firm. So heading into my senior year, I didn’t even know what a future or a commodity was, but for those who are listening and don’t know what that is, futures contracts are things like gold, crude oil, soybeans, wheat, corn, cattle, pigs, etc. So a lot of farmers use them to hedge their bets. It’s also a very lucrative speculation market. So I joined in 2008, and about three months later I was a newly crowned broker, and September 29, 2008, the Dow Jones fell 777 points to set off officially the economic housing crisis. Obviously, there was a lot building ahead of that, but…
With most people were running out of the industry, I stuck with it, I did that for about four years. And that was the same time when the industry was really shifting, it was moving to real-time quotes, so E*TRADE and Charles Schwab and TD Ameritrade were all coming out with incredible trading software. So the age of a broker and needing a broker to call down to the floor and whatnot was not really there anymore. We had to get competitive, so we started creating trading systems, doing more managed money… And that’s great until you realize that the commodities markets pretty much trade 24/7, so after several years of sleeping with a laptop next to my bed and waking up at [1:00] or [2:00] in the morning to watch markets like the coffee market open, you start to really question your quality of life.
So I was going to leave and actually go be a financial planner when I was approached to join a fast-growing marketing and technology company. I did that for about nine years straight. We took that company from 30 employees to just shy of 600 and a little over $100 million. And officially, in 2020, I stepped out of that business after a long career as the Chief Strategy Officer. Along the way I built a couple of businesses, as well as a real estate portfolio, and now I’m full-time just putting together real estate deals.
Ash Patel: Let’s talk about that real estate portfolio that you put together; what was that?
Samson Jagoras: We were mainly focused on single-family and small multifamily stuff, mainly because that was the capacity that I had, right? I had to have all the money, and I had to do everything myself. So heading into about 2018, we started to unwind some of our single-family and townhomes and small multifamilies, just because I could spend a good deal in recruiting, scaling up this marketing company. And when you’re trying to hire 150 people a year, and you’re looking at the statistics, largest expansion since World War Two, you’re looking at the fact that unemployment is at like 2.8%, you start to question how good can this go forever… So we started to unload that, and that’s when I started putting together my team for multifamily and scaling up on that.
Ash Patel: Wait a minute, so you’re questioning how far the real estate market can go, but you’re diving into multifamily. Explain that to me, please.
Samson Jagoras: Yes, that’s great. So one of the things I learned just scaling up the company is the power of scale and the magnitude of just reaching critical mass, and having single doors just doesn’t afford you a bunch of scale; you’re very subject to the market, you’re subject to the local economy, you’re subject to one individual renter… And if we’ve learned anything going through COVID, that can cause a lot of chaos. So I started unloading the single-family stuff and just looking to get more doors quicker out of a single address, so that I could get more scale. And most people probably listening to this, including yourself, just know that most of these large apartment complexes that are 100 units or more can withstand economic vacancy of like 20%; your breakeven occupancy is 80% to really be able to write it out for an entire year and not have to start paying the mortgage out of your own pockets effectively. So that was the draw to multifamily, is just scale. Bigger is better. Even though it’s more challenging, it’s better.
Ash Patel: You said marketing company, you didn’t say real estate company.
Samson Jagoras: Yes.
Ash Patel: Well, what’s going on there?
Samson Jagoras: Well, I spent most of my career in business development. So being good in the real estate world, especially multifamily, is literally just about building teams, systems, processes and relationships. Partnerships are probably one of the most valuable things that you can have in this business, whether that’s with a broker, whether that’s with a co-GP, whether that’s with a JV opportunity… At the end of the day, it’s just business acumen. Business breaks down into three things – sales and marketing, operations, HR and finance. And so if you can define roles and responsibilities that you can play within the ecosystem, you can get into multifamily. You don’t necessarily have to be this super successful operator with a bunch of money or have had your windfall in some other way in order to get into the business.
Ash Patel: Interesting. So in 2020 you decided you’re going into multifamily syndication, and you’re treating this as any other business startup; you’re not overly passionate about multifamily or real estate in general, you’re passionate about growing a business.
Samson Jagoras: I do love real estate. I love the hunt, right? I love finding the deal, gaining the edge on somebody, seeing something that they don’t see. Having that one key relationship… We’re looking at a 252-unit $41 million deal right now, we’re one of three groups that is putting eyes on it because it’s not fully marketed. I love that; that came off the back of a relationship. And I’m a people person, I love building things, so stepping out of marketing and technology after nine years was so attractive was to go build something from scratch and scrap it out like we did in the old days, 9-10 years ago when we were starting up the marketing and technology company.
Ash Patel: Winning deals, that comes from your competitive football days, huh? You’ve gotta win the deal.
Samson Jagoras: Yes, within reason, right. It’s all about risk management; it is pretty crazy to see what people are willing to pay right now and the cap rates that they’re willing to pay at… But like we used to say in the trading world, “The market always needs another sucker.” I’m just not going to let that sucker be me.
Ash Patel: How are you finding deals today?
Samson Jagoras: I’d say the majority of the market is controlled by brokers. I had a conversation the other day with a guy who was really excited about this meeting he had with these owners, a 91 year old… The guy had 3,000 units, and he really felt good about their conversation, like he was going to get a great deal. And immediately after that, he toured a property with a broker and told him about that, and the broker said, “Oh, yeah, I know that guy. I’ve been taking them out for the last five years and probably met with him about 25 times.” And I don’t ever think that I’m going to be able to get one up on the broker who’s been building this relationship for a really long time. That said, a lot of times the broker has the deal and he’s going to shop it exclusively to a handful of groups that can close, because the brokers just care about one thing, which is, can you close?
Ash Patel: What do you do to establish those relationships with brokers? Do you spend the five years interacting with the brokers?
Samson Jagoras: Brokers are funny.
Ash Patel: Right? Oh, tell me more.
Samson Jagoras: We always say brokers are like Tinder, you want to date a lot of them. Your property managers, those are like a good marriage; you’re going to be with them for a very long time. But a broker cares about who’s on your team, your experience and your track record, which is the power of partnerships… He also cares about equity sources and where you’re actually going to be getting the money from to close the deal. And then you’ve got to make face with those guys; you’ve actually got to show up into the markets where you want to invest, and tour properties, and put faces to the name, and make offers, and follow through on your commitments that you said you were going to do. Nothing irritates a broker more than just tire kickers; the people just kicking the can down the road and never pulling the trigger on stuff. So you’ve got to have all those ducks in a row before you really get in there and start talking to brokers.
Ash Patel: How do you not become one of those tire kickers if a broker presents a deal to you that you don’t close on for whatever reason? Why should they come back to you, or what do you do to make them keep bringing you deals?
Ash Patel: Just overcommunication. So if you’re not going to move forward and submit an LOI on something, you’re communicating to them why you’re a pass, or why it doesn’t fit in your deal box, or how you are struggling to get to the price that they’re really looking for…
And then when you do make an offer, it’s incredibly important if it gets accepted to actually follow through on that. So some of the ways you can overcome that are putting hard money down day one. But at the end of the day, a broker doesn’t want anybody that’s going to leave them at the altar, which just makes them look bad to their seller, and then there’s a lot of wasted time and effort that they have to go through to get it back on the market, or go chase down whoever came in second place.
We actually just went through that, where we didn’t get picked for best and final, and the group couldn’t actually close. So they came back to us, which puts the broker and the seller in a pretty tight spot, because at that point, you’re a little bit over it and you don’t actually need the deal, so you can push your weight around a little bit, where—currently, it’s a seller’s market, and when you’re going into best and final, the weight’s usually more on the seller’s side.
Ash Patel: It seems a lot of people build CRM systems, and they have people that own multifamily units so that one day they can get an off-market deal… Do you essentially have that for brokers? Do you just have a database of brokers that you track, interact with?
Samson Jagoras: Yes, we have—we do call on owners directly, just knowing that that’s a long road to get there. We call on family offices, and then we call on brokers, and build those good relationships. And we actually have someone on our team who’s dedicated to just deal sourcing and broker relations, who’s just constantly reaching out to those brokers, building relationships and trying to get more deals from them.
Ash Patel: What’s an example of a deal where you lost money? And what were your lessons learned from that?
Samson Jagoras: A deal where I’ve lost money… I don’t think I’ve ever effectively lost money; maybe just didn’t hit the returns that I was anticipating. So for those of you who don’t know about futures and commodities, they’re highly, highly, highly leveraged. You’re talking 10 to one, sometimes 20 to one in a lot of cases, and I had to get a mentor at a really young age in my career in investing… He said, “You’re going to lose and you’re going to be wrong a lot more than you’re going to be right. But your winners will far exceed your losers. It’s all about managing your downside.”
So after living through 2008 and watching people take their account from $25,000 to a million, and a million back down to $25,000, you realize that everybody’s a genius in a bull market, and that you could have effectively over the last 10 years, closed your eyes and pointed at any market or any property and been right until you’re wrong. So we spend a great deal of time just analyzing our downside risk, and ensuring that we have really good contingencies and really good margins built in to be wrong and still effectively be right, and make sure that our investors are getting paid.
Ash Patel: What types of returns do your investors achieve?
Samson Jagoras: So the goal of acquisitions and light to moderate value add repositioning – you’re going to be looking at anywhere from a 12% to 15% IRR, and you’re going to be looking at anywhere from a 6% to 8% pref, depending on the deal. And then annualized, you’re going to get, let’s call it, mid-teen annualized returns, and then your cash-on-cash is going to be like 5% to 7%.
Ash Patel: And is the 6% to 8% preferred return – is that a guaranteed return?
Samson Jagoras: It is.
Ash Patel: What’s your biggest lesson learned with interacting with investors?
Samson Jagoras: I think the vast majority of people who are getting into passive real estate investments are not sophisticated professionals. So especially for those first few deals, it takes a little bit of hand-holding; you really have to educate them on the process and how it works. We like to buy a specific flavor of real estate, and do that on repeat, because it makes it really easy for your investors to get comfortable. Each time if you’re bringing them a similar type of property, whether it’s in Oklahoma City or Memphis, Tennessee, they just know what to expect. It can be a little bit more challenging if each time you’re having to build a new thesis and re-educate them on why this is a good deal.
Ash Patel: And if you had to do it all over again, would you have gone into real estate right away?
Samson Jagoras: I would have, but I didn’t really have any good examples in my life of entrepreneurs. My dad was an incredible craftsman, he spent a lot of years building homes and helping other people build real estate. He’s an incredible builder. He tried a few times to launch his own business, but I didn’t have anybody around me who was an investor or an entrepreneur. And it wasn’t until I got out of college and started getting into investing and really figuring out my lane of what types of investments and assets that I like to be in, that I found real estate and then just threw a lot of education and beat my head against the wall and put 7-10 years in it, finding good partners.
I can officially say that there’s no other asset class that I like to invest in. I don’t get geeked out about stocks. I’m interested in crypto, I have a little crypto position, but I’m not touting it to the masses. I think everybody, at some degree, should be owning real estate. We’re in a capitalistic society and the government relies on us to do two things, which is create jobs and maintain housing. And if you do that, you’re going to receive the maximum benefits and a tax cut.
Ash Patel: Samson, what is your best real estate investing advice ever?
Samson Jagoras: Best real estate investing advice ever is partnerships. It is incredibly, incredibly important, especially if you’re early on, to establish incredible relationships with people who already have a track record. One of the things I love about real estate in general is the vast majority of people who are in this business are willing to help you, because they all remember what it was like when they didn’t have any track record or they didn’t know anybody. And I have yet to come across anybody who didn’t want to help me in some way, shape or form.
Ash Patel: I love that. And I’ve got to share a story… It’s one of the things I love about real estate… But over the years, I’ve talked to some coastal real estate investors, both East coast and West coast, and they were shocked that I gave away all of my secrets. And I was shocked that that was an epiphany to them. So I asked them, “Do you guys not collaborate and share amongst your colleagues?” And he said, “No.” The funny thing is, a lot of my friends are investors. And when we get together, we ask, “What are you working on?” And they’re like, “Ah, you know, working on this and that, I’ve got some things going on…” But they don’t ever talk about what they’re doing and they don’t want to share advice, which is foreign to me, and it sounds like it is to you as well, because part of what makes real estate so awesome, is the camaraderie and other people’s willingness to share and mentor you. We’ve all had mentors in real estate and I’m sure you mentor the new up and coming class, and that’s one of the fun things about real estate.
Samson Jagoras: I agree, 100%.
Ash Patel: So that being said, you’ve mentioned partnerships a number of times. What do you do to cultivate and find partners?
Samson Jagoras: Oh, man, that’s always comes down to just adding value to somebody else. One of our very key partnership groups is out of New York. They are a longtime multifamily operator, 40 years in the business, dad did it, son did it, nieces and nephews now all do it. They property manage and they own multifamily in New York, but they have a really big problem, which is they have not been able to transact in several years, because a lot of the stuff in New York just doesn’t pencil and make sense. And it’s becoming harder and harder and harder to operate in New York. So they’re trying to find ways to diversify and get into other markets where, lo and behold, we’ve already made inroads.
So being able to leverage their track record, as well as some of their key relationships for equity partnerships and people who want to place capital creates a really symbiotic relationship, and they’ve become great friends. Every time I talk to them, I felt like I learn something, because they’re managing properties in one of the most challenging regions, I think, in the country.
We were looking at a deal this week in Oklahoma, you know, and their expectation on delinquencies when I told him the delinquency is 2% was like, “There’s no effing way.” Right? They’re like, “You better go back to the broker and clean up the rent roll. That’s wrong.” But that is invaluable experience. It’s like, “Okay, we need to pay a lot of attention to delinquencies; even though it’s not a big deal in this market, it is a big deal to them. So let’s just tighten up that loose end and make sure it’s really well.”
So it’s just comes down to adding value to those people and to what you just said a minute ago, be willing to take that phone call and connect and reach out and you’d be amazed at how many people just want to have a conversation with you.
Ash Patel: Yes. And fair disclaimer, I’m not picking on all coastal people. I grew up in Jersey, so I understand the mindset. But it’s just less frequent that you’ll see that mindset in the Midwest than you will on the coast. What’s an example of a partnership struggle that you’ve had?
Samson Jagoras: When I was first originally building my team. I’m really good at this – communication, people, strategy, kind of building the unit, getting people in the right seat and putting them in a position to win and be successful. I can underwrite, but it’s not my strength. I don’t get energy from underwriting. Put me in a pro forma and I can understand what’s going on and understand it and read the equations and all that. But to sit down and transfer T12 data into it and model it and pull all the CoStar data and all that – I just want to go jump out a window after a while.
So it was finding some people to backfill that and people who were willing to have some delayed gratification to say, “Hey, I’m willing to leverage my skill set in order to be a part of what you’re building here, in exchange for a short-term cash and income.” So it’s just finding those right people, and you go through a few people, and you have to let some people go, and cut them out of the team… But the cool thing is, each deal can be its own little business. So you don’t have to get too married to any one person too early. It’s like, “Hey, let’s see if this works and see if we like working together, even just do one deal. And if we don’t, we’ll have to do another deal together.”
Ash Patel: It seems like you can read people pretty well. Do you have them fill out personality profiles or do any kind of personality tests?
Samson Jagoras: Yes, we definitely used Strength Finders just to figure out where people are really strong. And then DISC tests to figure out people’s personality types. I am a really high I. If you don’t know what that is, it just means I’m really outgoing and I love people. And I’m pretty moderate on everything else; I’m like, right in the middle… Where my partner who’s really good at underwriting, he is an incredibly analytical, not a very dominant personality, not a very high influential type of personality. So we work really well together, because we offset each other and balance each other out really well.
Ash Patel: And Samson, not everyone knows what some of these things are like DISC test. Can you explain that to our audience?
Samson Jagoras: Yes. So a DISC test is really just taking personality profiles and breaking them into four key characteristics. You have a dominant, influential, I think it’s, specific and courteous. I can’t even remember, it’s been a while since I looked; you put me on the spot, Ash.
Ash Patel: Yes. But essentially, it’s knowing what motivates somebody, where they’re comfortable, and really just who they are. And that helps you position them on your team.
Samson Jagoras: Yes, we use the EOS system to really operate our business. Entrepreneur—
Ash Patel: What is that?
Samson Jagoras: It’s the Entrepreneurial Operating System. And the whole thesis behind the Entrepreneurial Operating System is getting the right people in the right seat. When you measure people off of “Do they get it? Do they want it? And are they capable?” So you might have people who really want it, but they’re just not capable, because it’s the wrong position for them.
So personality profiling and strength finding are really good at helping people kind of figure out what their roles are. I think within one of the appeals to like a multifamily business and being an operator is very scalable. You don’t need a ton of people to really do it.
I’ve been inside personally of a 600 person company and been responsible for 16 direct reports, and 350 marketers, and at a certain point you just spend a lot of time managing personalities. So if you can get really clear really early on who are the players, what seats they need to be in your business, you can build a $500 million assets under management portfolio and have 5-6 people on your team.
Ash Patel: Yes, that is a great outlook. And I can’t stress the importance of knowing what somebody’s personality is. Because while they may appear to be outgoing in the beginning, it may not be truly who they are the core. And the personality tests will often define that these are people that like to be heads down, undisturbed, work with given tasks, and they’re taskmasters, which is great, but they’re not the people that are going to go do sales for you or do investor calls. So it’s good for you for recognizing that and implementing that.
Samson, are you ready for the Lightning Round?
Samson Jagoras: Let’s do it.
Ash Patel: Let’s do it. Samson, what’s the best ever book you recently read?
Samson Jagoras: Best Ever book I recently read would be Extreme Ownership. That book is just incredibly, powerful about the importance of personal accountability. And it really is the differentiating factor in successful people and unsuccessful people. Everything—
Ash Patel: A great example of leadership.
Samson Jagoras: Everything is your fault and nothing isn’t your fault.
Ash Patel: Yeah. Samson, what’s the best ever way you like to give back?
Samson Jagoras: I spend a lot of time with my church. I have a brokerage license, I’m really good at commercial real estate, but I don’t wake up in the morning and get jacked about being the best broker on the planet. I do like giving my time to really meaningful organizations and causes, and just doing that pro bono. So working with churches and nonprofits to find space, whether it be to lease or to buy or purchase…
I’m working on some cool things in Northern Colorado, surprisingly. It’s a beautiful, incredible place to live, but we have the third-highest suicide rate in the entire country. And some of that comes down to there’s a lot of influence and a lot of money and some addiction issues, so I’m working with addiction recovery as well. Just giving back and helping people, man. I just love people.
Ash Patel: That’s great. Thank you for sharing that. Samson, how can the Best Ever listeners reach out to you?
Samson Jagoras: Well, I’m really active on LinkedIn and I’m really active on Instagram. If you want to check out what we’re doing as a group, you can check out the Growth Vue, that’s the https://thegrowthvue.com/, and learn more about the types of deals we’re putting together, and even join our database and our list to start getting some of our distributions, learn about some of our new deals that are coming down the pipeline.
Ash Patel: Samson, thank you for being on the show today and sharing your story. In a very short time, using the power of partners, you’ve built an incredible company, so thank you for sharing your advice with us.
Best Ever listeners, thank you for joining us. Have a best ever day.
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