Judy Brower Fancher knows how to find killer deals before anyone else. From staying on top of market trends, to being a wanted repeat-investor, Judy has developed a strategy for getting exclusive access to competitive deals. In this episode, Judy breaks down her methods into four parts so that you can find better deals first as a passive investor.
Judy Brower Fancher Real Estate Background
- Founder of Brower, Miller & Cole, a private research firm.
- Portfolio: 20 senior living multifamily, one industrial, one self-storage, 2 multifamily
- Based in: Newport Beach, California
- Say hi to her at: www.linkedin.com/in/judithbrower
- Best Ever Book: Small Giants: Companies That Choose to Be Great Instead of Big by Bo Burlingham
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TRANSCRIPTION
Slocomb Reed: Best Ever listeners, welcome to The Best Real Estate Investing Advice Ever Show. I’m Slocomb Reed. This is the world’s longest-running daily real estate investing podcast. Today we have Judy Brower Fancher with us. How are you doing, Judy?
Judy Brower Fancher: I’m doing well. Thank you for having me.
Slocomb Reed: Great to have you here. Judy is the founder of Brower, Miller, and Cole, a private research firm. Her current portfolio includes 20 senior living multifamily, one industrial, one self-storage, and two multifamily properties. She is a passive commercial real estate investor who just sold the assets of her 27-year commercial real estate marketing firm, where she represented more than 100 commercial real estate companies. She’s based in Newport Beach, California, and you can say hi to her on LinkedIn. She is Judith Brower on LinkedIn.
Judy Brower Fancher: Judy Brower Fancher on everything.
Slocomb Reed: Judy Brower Fancher on everything, great. Judy, tell us about yourself. What got you into marketing for real estate firms?
Judy Brower Fancher: Growing up in Southern California, one has pride in where they live. I think a lot of commercial real estate started here. My dad worked for an architectural firm when I was growing up, then he worked for two large landowners, and he was their public relations person. So I went into my dad’s field, but I like to say that he also has three normal children. That’s how I got started. When I decided to start my own company after working for other firms, commercial real estate was truly what I loved. I like to say I love a building when I’ve known it since it was a hole in the ground.
Slocomb Reed: That’s awesome. Tell us about – you were working in marketing and research for 27 years. Did you have a specialty within that for your clients?
Judy Brower Fancher: Specifically on commercial real estate companies, which is how I got my background, which I hope is helpful as an investor to me now. We’ve done everything from television advertising, to public relations, to putting on investor relations meetings for institutional investor companies, to working with syndicators on getting attention from both the opportunity side and from the investor side… So we’ve worked on every product type, think everything. We’ve done land, we’ve done self-storage, industrial office, multifamily, retail – huge. And the company still exists. I did sell the assets to someone I trained for 10 years. So if anybody wants to reach out to find out about that, I’m just saying that’s a thing. But that’s actually not what I’m doing now. Now I’m trying to make money off the money I earned.
Slocomb Reed: Absolutely. That makes you a pretty well-informed passive investor, right?
Judy Brower Fancher: Hoping so. I’m not as smart on the finance side as I think I am on probably the product and market. The company worked nationally, so I have a really good feel for a lot of the markets. I actually started investing with my clients; I asked permission, they didn’t come after me. I asked a few of my clients if I could invest with them and that’s how I got my feet wet a long time ago.
Slocomb Reed: That’s awesome. Judy, with you focused on your own passive investing now, making money with the money you worked hard to earn, and given that you have a very solid understanding of the assets themselves and of markets, what advice do you have for other passive investors and the research that they should be doing into a market or into an operator before they invest their hard-earned money?
Judy Brower Fancher: I’ve had a really lucky path with being able to invest alongside my clients. Also, I think what you need to do is use all the parts of your brain. You want to look at what are the environmental factors if you’re investing in certain parts of the country? Are you in flood zones? And yes, the sponsor should know that too, but if you’re trying to weigh risk and say, “What can I do that’s more sure?” Because that’s what, as an investor, I want to do now, more sure things… It’s to look at each market and maybe environmental things. I was just in Louisville, Kentucky which I love and I want to maybe do some PR for them. It’s a great city, but it is not growing. I don’t know why. They have the Derby, they have bourbon, it’s not horrid weather, everything about it seems right. But I think if you’re investing now you want to look for cities where there’s tech, because that seems to attract the young families, and that makes it grow. They don’t seem to have tech there. They have Humana, it’s one of the largest health things in the country, but that’s still not the young people coming in. So that’s how I try and look at things.
Another thing that I have done, because I work with companies that are investing, is to look where are my big clients investing and what are they seeing there in the markets? That can help me understand what I might see. I hate to say that anything’s a sure bet, but I have a great story from yesterday…
Slocomb Reed: Go for it.
Judy Brower Fancher: I’ve only done one crowdfunded investment; all the others, I’ve known the people personally that I’ve invested with. But I went to try and do another crowdfund one yesterday. It’s an obvious win. They’re buying properties to take care of all the trucks and all the supply chain stuff. They have huge properties and they’re all over Houston, which I guess they know they’re going to flood to. But they have identified and gotten five properties under control, they have five more that they’ve identified that they’re trying to get under control… The Invest Now button went live, I clicked on it, it said numbe 127 in line.
Slocomb Reed: Wow.
Judy Brower Fancher: Uh-huh. Then I got a thing saying, “Okay, go ahead and get your paperwork started.” Because I’d worked with them before, bang, bang, my [unintelligible [00:06:56].08] They’re like, “Okay, documents will be available at five o’clock.” At [5:01], I went in, I got my documents and started working on them. At [5:50] I got an email saying you’re too late.
Slocomb Reed: Wow.
Judy Brower Fancher: So when you have a sure thing… Like now where everyone thinks industrials, it’s the flavor of the month, above multifamily I believe… If you can get in on it, go; you’re going to win. It’s correct. Right now, industrial, they’re saying they’re going to need 10 times as much. These guys are supply chain support for industrial. I think that’s going to work.
Break: [00:07:30] – [00:09:10]
Slocomb Reed: It seems like in 2021 and 2020 too here soon, that sense of urgency is vital for getting to the right deals, regardless of which seat you’re sitting in. If you’re on the buy side of anything right now, that sense of urgency is really helpful. Judy, what is it about this opportunity that you pounced on, but were still a little bit too late for? What was it about that opportunity that makes you think that it’s a home run?
Judy Brower Fancher: Because I talked to people from all over the country about what’s going on, I try and read. I don’t think you can buy any industrial right now that’s not a win, literally. I don’t think that’s possible right now, because I think the statistic is they need about three times as much as exists right now. Now, I do look at the timeline because I think things change. You never know what’s coming down the pike. Anything that’s in industrial that’s within five years’ timeline, I’m good with it. I wouldn’t go on to a 20-year industrial, I’m not sure if something’s going to change, where all of a sudden people wouldn’t need industrial and 20 years. But the quicker the better for me, that’s what I look at in all of them.
I got into a multifamily in Sacramento. This is guys that I know, and they wrote back and said, “We can only take part of your money, because everyone wanted in on this.” So it was sort of the same thing. But this is a 12-unit building in Sacramento that was 90% vacant, absentee owner, just hadn’t taken care of it. They’re going to fix it up and flip it within 12 months, and we’re all going to make money.
I’m going to say that having friends in the right places is almost what you need right now. For people that are investing, if you know people in the business, just let them know that you’re interested, because they would rather have people they can come back to repeatedly and get money from than have to go out and find new investors. So if you can make friends with a company that knows that you will send your money pretty quick, that gives you access as an investor.
Slocomb Reed: Judy, thank you; that’s very helpful. Talk to the Best Ever listeners who are high net worth individuals looking to invest passively. They also have very busy, professional, and personal lives… They want to spend one to two hours a week — beyond listening to our podcast and the other podcasts they listen to, they want to spend one to two hours a week studying or doing the activities they need to do to get access to great deals. What are the one or two things that passive investors can do on a regular basis that will help them recognize and take advantage of great opportunities right now?
Judy Brower Fancher: I would think that LinkedIn is a good thing to spend half an hour on. Look at the stories, look at what’s being bought, who’s buying it, and maybe reach out to them. Because LinkedIn is a professional tool that works very well. If you say “Hi. I’m a passive investor. Can I link in with you? I’m interested in your company.” That’s going to be a welcomed outreach. And then honestly, looking at just the trade news, just keeping in touch with what’s happening, and other kinds of news. If you can think up topics about — if you find out where tech’s going and all that, like I’m seeing things that make the economy move that are attractive now, that look like growth things… Healthcare, and I think healthcare and tech are the biggest ones… That seems like the best way to do it. And then depending on how much you’re willing to place, I’m going to sidewind on your question really fast and say that my idea–
Slocomb Reed: Sure, go for it.
Judy Brower Fancher: People talk about that they have a diverse portfolio. They mean they have small and large cap stock, and the stock market just goes up, and down, and up. It doesn’t matter what company you’re in, it doesn’t matter if it’s foreign, or local, or anything… I don’t understand, that’s not diverse. That’s probably the other thing that I would say – if you want to be diverse, that I do have multifamily, self-storage, industrial, and senior housing, and I have stuff in the Northeast, and I think I’m going to buy something in the Southeast now… But I definitely have things in the West, and I have something in Tennessee; that’s where the industrial opportunity came up. It’s an Amazon building so it’s great. I think that’s more diversification. That is another place you want to spend your time, is making sure you’re not just chasing one asset class. Or if you’re going to be a passive investor, there’s no reason not to spread your risk by going in some into a bunch of different product types and different geographies.
Slocomb Reed: Do you think, Judy, it’s important for the sake of diversification, to invest with a broader number of general partners, or should passive investors be finding the one, two, three people they know, like, trust, and can place their money with?
Judy Brower Fancher: I am a fan of experience. So I did a couple of little toe-touch deals, just tested people a little bit. I mean, not to be saying I tested them, but to try and get comfort level. But I definitely like repeat investing with people that have a good track record, that I’ve seen them performing on what they’re doing. They’re like, “Hey, we have this other one. Do you want to go in on that?” “Yes, thank you.”
For me, there’s no reason to put all of my investments with one party. I don’t have anything against putting investments with the same party if they’re doing different product types or different geographies; I think that’s great, because then you do have that comfort level with the people you’re investing with. I like that when you have a question, you can get an answer. That’s the great thing about actually knowing these people that are running the businesses, that you can get hold of if you have a question.
Slocomb Reed: Totally. As competitive as it is right now, to get invested in great deals, do you suggest that newer passive investors do the toe-touch and invest the minimum, or the safe, smaller amount of their capital the first time? Or should they really just be pouncing on the great opportunities they find?
Judy Brower Fancher: If you have an industrial portfolio and you have a bunch of money, you may as well put a bunch in there. One of the things I try and look at, when you’re talking about being busy and everything, is that it’s going to take you some amount of time to get the materials back to them and get everything put in order and everything. And if you’re going to put your money out, and you put in a small amount, and it’s going to take you five years to make $10,000 – is that the best use of your time today? Maybe in your own business, you can make more money than that, faster. Alternately, because I did have a service business where I was worknig by the hour, and I had employees, so net profit at the end of that minus taxes… When I first invested in real estate, and I put in – I don’t know, 20,000 bucks, and I got back 28,000, I couldn’t stop laughing. I’m like, “I didn’t even do any work. This is amazing.” It’s kind of fun, someone else’s doing it. So it’s a little bit of time to do it, but I’m just saying that if you think about the time period and everything, you don’t want to put in so little that the return is a waste of everyone’s time.
Break: [00:15:43] – [00:18:37]
Slocomb Reed: Let’s say you, Judy, identify a great operator, a great GP – do you go ahead, connect with them, and get preliminary paperwork and stuff done before they have a deal to present, just so that you can get on it faster?
Judy Brower Fancher: I haven’t needed to do that outside of the crowdfunding thing that I tried. The others, they’ll ask for interest and they ask you how much you’re interested. Then they start slotting people in. The smaller ones – I’ve seen that they are doing it on a more personal basis… I guess I’ve filled out things on their website, of what accounts and different stuff like that. But then when it’s an investment opportunity and they email you, then you click in and put in how much you’re wanting to do, and they tell you the “Yes, great.” Or like I said, in that one case, they got oversubscribed really fast and they came back to me and said “Sorry, but we’ll take it.” It was about 50% of what I wanted.
Slocomb Reed: Gotcha. What crowdfunding platforms do you recommend?
Judy Brower Fancher: I am investing with self-defined benefit plan many, like IRA. I have to move it into an IRA account to spend it on real estate. And I have found that Crowd Street has more deals that accept that.
Slocomb Reed: Crowd Street.
Judy Brower Fancher: Realty Mogul didn’t seem to have as many deals that were okay for investing through that. So that’s the platform that I have used. They answer their emails. I don’t know them personally, but they do answer their emails.
Slocomb Reed: Awesome. We’re going to do a Best Ever lightning round. Are you ready for some quick questions?
Judy Brower Fancher: I am.
Slocomb Reed: Awesome. Judy, what is your Best Ever way to give back to the community?
Judy Brower Fancher: I am the vice chair of membership for an Urban Land Institute National Product Council called The Entertainment Development Council. I’m also on the board of my local ULI. It’s another way that I meet and learn things from people that I guess I should have mentioned. If you have a local ULI chapter, that’s a good way to get knowledge on real estate.
Slocomb Reed: What does ULI stand for?
Judy Brower Fancher: Urban Land Institute. It’s the people that own all the real estate in the United States, and the world. It’s an international group.
Slocomb Reed: What is the Best Ever book you’ve recently read?
Judy Brower Fancher: I just read a book called Small Giants, which is by Bo Burlingham. It’s about companies that stay small on purpose. They make a ton of money and they stay small, which is my taste. It’s my taste for running a business and for investing.
Slocomb Reed: Tell us about the deal you’ve lost the most money on.
Judy Brower Fancher: I invested — the most money I’ve ever invested into was a high rise in Phoenix to be built. I think it was in the early ’90s. The owner walked away from it. I was a limited partner, passive investor, no choice; just kind of jaw dropped. It’s like, “Oh, my money’s gone.”
Slocomb Reed: What happened? Why did they leave?
Judy Brower Fancher: They didn’t build it. I think that Arizona or the country went into a big recession, and they didn’t move forward on it and they let it go. They turned the dirt back over to the bank, I guess, that they’d taken the loan from.
Slocomb Reed: Wow. Tell us about the deal you’ve made the most money on.
Judy Brower Fancher: It’s coming up. I actually invested in an industrial park in Orange County, California, also in the ’90s. I well doubled my money in 15 months.
Slocomb Reed: You said it’s coming up. That deal went full cycle; what’s coming up?
Judy Brower Fancher: The Sacramento multifamily one is going to probably double my money, I think. I’m about to get out of a fund where… Is it okay to have a second to tell? My client let me in on the friends and family, and I didn’t quite understand what he meant at the beginning; I wasn’t as sophisticated in my investing, I guess. I am in on the people that are syndicating, we — because I’m passively in it– tie up the property, and then syndicate it, so we only have a 90-day exposure before it’s owned by a…
Slocomb Reed: Oh, okay.
Judy Brower Fancher: And that is going to close sometime at the beginning of next year, and I assume that means that we get a bundle all at once. That will be good.
Slocomb Reed: Nice. You said it should double your money. How long is the hold period for that?
Judy Brower Fancher: The one in Sacramento, the hold period is going to probably be 12 months. They said maybe two years, but it’s going to probably be 12 months.
Slocomb Reed: Doubling your money in 12 months to two years is not bad, for sure. Especially when you can do it passively.
Judy Brower Fancher: Yeah. They’re doing it for me.
Slocomb Reed: What is the best way, Judy, to reach out to you if any of our Best Ever listeners have questions?
Judy Brower Fancher: Finding me on LinkedIn is easiest. I guess I probably am Judith Brower. But I think if you search Judy Brower Fancher, you’ll find me.
Slocomb Reed: Search Judy Brower Fancher and you will find Judy.
Judy Brower Fancher: On LinkedIn. Yeah, that is the best.
Slocomb Reed: Awesome. Judy, we appreciate you being here on the podcast, telling us your story of growing up into commercial real estate, spending your professional career supporting commercial real estate investors, getting into investing passively with your own clients, and now being on this podcast is part of it. Thank you. You’re helping other passive investors identify great opportunities. Best Ever listeners, we hope you have a Best Ever day. Judy, thank you again for sharing your story with us and giving us some Best Ever advice. We will see you again tomorrow.
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