January 1, 2022
Joe Fairless

JF2678: The Key to Funding Your Retirement Through Multifamily Syndication with Elijah Vo


Elijah Vo went from working full-time in the Air Force to becoming a full-time active investor. In this episode, he shares how he got into multifamily syndication and how he finds deals that will fund his retirement income.

Elijah Vo | Real Estate Background

  • Partner at Atlas Multifamily Group, who help investors build generational wealth as a passive investor in multifamily real estate syndication.
  • Portfolio: Operates 700 doors
  • Used to work full-time in the Air Force, but after retirement, he began to do CRE full-time as of October 2021.
  • Based in: DFW, Texas
  • Say hi to him at: https://www.investwithamg.com/
  • Best Ever Book: The Laws of Human Nature by Robert Greene

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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 Elijah Vo with us. How are you doing Eli?

Elijah Vo: I’m doing great. Hey, if I sound kind of strange, I’m coming off a head cold. I feel fine, but I’m just a little bit [unintelligible [00:01:25].11] up. But otherwise, I’m great and happy to be here.

Slocomb Reed: Great. I know the feeling. I just got the COVID booster shot a few days ago and it put me in bed for a while. Eli is a partner at Atlas Multifamily Group. They help investors build generational wealth passively in multifamily real estate syndications. In the current portfolio, they operate 700 doors. Eli used to work full-time in the Air Force, but after retirement, he began to do commercial real estate full-time, and that’s as of October 21. Eli’s based in the Dallas-Fort Worth area. Eli, tell us about yourself. You were in the Air Force; what got you into real estate?

Elijah Vo: Sure. I’ve been in the military for over 20 years so it was always kind of my mentality to work for the government for 20 to 30 years, and then one day I’ll retire happily on a beach somewhere.

Slocomb Reed: Sure.

Elijah Vo: So I think about halfway through my career, that mentality wouldn’t sit right with me, because I really want to [unintelligible [02:26] our government. I was always interested in real estate so, at that time, my wife and I started buying up small family rentals, went through a couple of them, did pretty good with them… But at that point, I looked back at our goals and was like, “Okay, well by time I go to retire, this income won’t replace my current income.” So we had to find a way to scale more efficiently a lot quicker.

I remember driving around town one day over here in Fort Worth and I saw an apartment complex. I was like “Man, who owns those things? Who buys these?” Because it would probably be way more efficient to own one of those rather than 20, 30, 40 houses spread across town. So I started out working, getting educated on how this whole space works. Around 2018, I ended up joining a mentorship group, and that following year, we ended up…

Slocomb Reed: Which group did you join?

Elijah Vo: It was Think Multifamily.

Slocomb Reed: Think Multifamily.

Elijah Vo: There’s a bunch all over, a lot here in DFW. We’ve got Think, and a bunch of other ones.

Slocomb Reed: Nice. So you joined the mastermind, and what’s next?

Elijah Vo: We started hunting around for deals. That first year, we picked up two deals, about 360 units; those were in Atlanta. Then, about two years ago, our two current partners, we opened our firm, Atlas Multifamily Group. Now we own 700, and we actually have another 115 under contract that will close next month.

Slocomb Reed: That’s exciting. So you jumped in in 2018, it sounds, into multifamily syndication.

Elijah Vo: Yeah. Around 2017 or 2018. I started also doing passive investments first. So we did a couple of passives and then I joined Think mastermind in 2018.

Slocomb Reed: Awesome. So you were picking up some rentals on the side of working in the Air Force and then started investing passively, wanting to get in on the GP side of things. Thinking that you were replacing your military income with real estate, what made syndicating the right fit for you?

Elijah Vo: It was interesting, for sure. I enjoy the fact that on the GP side, I like being the front-runner in these things; because you’re not really buying real estate, you’re buying a business. I find it fascinating and very interesting that we’re able to come in and quarterback these deals, and you have a whole team that you build around you. It’s an entire process of all kinds of different people and partners. I think that’s probably what spoke to me the most, aside from the fact that you can invest in something that can return something like that back to you. You build communities too, you’re giving back and you’re building communities for other families, because you’re coming in and in rehabbing these places, like the exteriors and interiors. You’re making everything better. I enjoy the fact that I’m kind of like the main quarterback here, and we’re also at the same time giving back at the same time.

Slocomb Reed: Financially speaking, understanding that there are other routes that you can take to be in real estate investing full time, you did some passive investing… That’s a very popular way to replace an income going into retirement, because it allows you to act retired. Financially speaking, what is it that compelled you to get into syndication as opposed to some other active model of investing? Is it specific to the numbers? What was it about syndicating?

Elijah Vo: I don’t think I really had the income to invest enough to be a full passive investor. If I have $100 million or more than I could put in and get an 8% 10% return annually, that’d be fine. But on an Air Force income, we really didn’t have that. So I had to find more after ways to make income. I think that was part of it. And then the fact that — I do enjoy the mailbox money, that’s great. But I wanted more control, I wanted more involvement in the deal. I want to be able to go out there and find my own deals, build my own empire, build my own income, and then eventually I’ll get to a place where… [unintelligible [00:06:21].10] I’m sure, maybe. I enjoy it now but over time, I’ll get another I can passively invest. But I love it now.

Break: [00:06:29][00:08:08]

Slocomb Reed: I saw that you have a goal of helping investors build generational wealth while investing passively. Are you underwriting for the five-year hold? Are you planning to hold the properties that you syndicate long-term, longer than five years?

Elijah Vo: I would love to do a long-term, like a 20-year hold, that would be awesome. I think right now, the industry, they’re so focused on those five or six-year holds. It’s hard to find investors who want to do a 20 to 30-year hold, plus that you’d be holding on to, I guess — you’d be partnered with people for 20 years. But I would love having generational wealth, I wouldn’t mind it. We are playing with a new, almost a new model. But we’re doing a three-year hold, where we’re returning 70% to 80% return over three years, rather than do 100% return over six years. Our investors can hit about 74% return in three, and then pick up money and do another one, and get it again in another three years. We are kind of going into a shorter model, given that our investors do enjoy a faster turnaround. They want the amount for sure, but they also want a faster velocity return.

Slocomb Reed: Gotcha. So that 174% return, you’re talking about the gross profit on their initial capital after three or five years, correct?

Elijah Vo: Yeah, like their total return. After all their cash flow, then we cash out and pay back their initial, and a little kicker on top of that, equal like that, say it’s like 80% or whatever it is.

Slocomb Reed: Gotcha. So you’re going for the three-year hold. My experience is the shorter your projected hold period, the more aggressive you have to be with your value-add. What kinds of properties are you targeting? What condition are they in when you buy them?

Elijah Vo: This is our first one. Actually, the one that we have under contract right now that we’re going to do, it’s actually a Class A in Wichita. It’s a little bit different in the fact that it was an old historical building, built back in the 1800s. The current owners had bought it, and they used a combination of federal and state funds to totally rehab it. But they really aren’t operators. Their goal is just to own these old buildings all over the United States, then fixing them up and selling them to guys like us.

Slocomb Reed: How big is it?

Elijah Vo: It’s 115 units.

Slocomb Reed: Wow. 115 units, 130 or 140-year-old building.

Elijah Vo: Yeah. But they totally revamped it though. They put 19 million dollars into changing the entire structure, the bones, they reinforced it with steel if they had to, they changed out all the mechanicals, the plumbing… They did a really good job going in and refurbishing it. The only thing that they didn’t do was push it to its market capacity. So they really aren’t operators. They come in and fix them up, but they don’t really have the want or need to really push it up to the market potential. That’s why we’re–

Slocomb Reed: So what’s left to do specifically? Do you need to turn over a bunch of tenants? Are you just raising rents, or what?

Elijah Vo: So there’s enough of the organic income that we can just bump some rents, but we’re going to definitely turn some tenants over and infuse more capital in there. Probably about 1.9 million in there, to do the interiors to push them to class A. It’s a Class B right now. It should be a Class A, because in downtown Wichita; but we’re going to pushh it to a class A.

Slocomb Reed: Nice, that’s awesome. This is a projected three-year hold. What kind of return are you projecting?

Elijah Vo: It’s a three-year hold, we project a 72% return on the money.

Slocomb Reed: Nice. How did you find this deal? Through a broker?

Elijah Vo: Yeah, through a broker. Actually, when we looked at this property, we were looking at another one in Wichita. Then he calls me and he’s like, “Hey, while you’re in town, go ahead and look at this one that’s in the downtown square.” I’m like, “Well, it’s not really our criteria, but sure.” So we walked down there and we’re like, “Oh, this is a really cool project.” We just kind of dug into it and fell in love with it.

Slocomb Reed: What attracted you to Wichita, Kansas?

Elijah Vo: I like the market. It’s a slow, steady cash-flowing market. It has a lot of diversity in, it has tons of business. I would say that it has a lot of good value-adds still, where a lot of properties here in DFW, they’ve been turned over a couple of times. A lot of stuff that we buy in Arkansas, Oklahoma, and Kansas, they didn’t turnover as much, or not at all. So they’ve had owners for 20 years or plus, so they’re true value-adds, to me at least.

Slocomb Reed: Gotcha. So you’re taking down your first deal as a syndicator now. What is it you said? You took down a couple after you joined the Think mastermind in 2018. What deals were those?

Elijah Vo: Everything I’ve done since I’ve been in Think… I’m not in Think now, but when I first joined Think, the first one I did [unintelligible [00:12:40].18] I sponsored those two, so I was a syndicator in those. Then I did 700 in Arkansas, Oklahoma City, with my two current partners at Atlas. And then we’re doing another 115 as well.

Slocomb Reed: Gotcha. Nice. And are all of those on the three-year hold?

Elijah Vo: No. The ones in Arkansas, Oklahoma City are on a five or six-year hold, and then a one in Kansas is on a three-year hold.

Break: [00:13:06][00:16:02]

Slocomb Reed: What is your Best Ever advice?

Elijah Vo: Best Ever advice… I would say even if you’re not the most capitalized, most intelligent, I would say what it takes to make it in this industry is having persistence and grit. Take action now and keep going. I know there are days where you get burned out and things drag on and you get frustrated. But the ones who do the best here are the ones who just keep going day by day, inch by inch. I think the people who come in with stars in their eyes or whatever, they can have tons of money and tons of ambition, but if they don’t have the grit and the wherewithal to keep powering through, they won’t make it. So you don’t need to have everything, but you need to have a couple of key skills for sure.

Slocomb Reed: Great. Eli, are you ready for our Best Ever lightning round?

Elijah Vo: Yeah, sure thing.

Slocomb Reed: Awesome. What is your Best Ever way to give back to the community?

Elijah Vo: I don’t think I give back enough… This has actually been a topic of discussion amongst Atlas. We’ve been looking at different ways to start giving back. I think the guys want to donate some funds, they want to do certain things…

I would like to do one where I can give more of my time. I used to read a lot at my kid’s schools, we’d read books or whatever. But something like that, where I can give a little bit of my time in my week to maybe go build some houses for Habitat for Humanity, read books to kids at schools, or I’d like to do something where I could go visit senior citizens homes, and give my time to them.

Slocomb Reed: Nice. What’s the Best Ever book you’ve recently read?

Elijah Vo: It’s not real estate, but recently I read Robert Greene’s Laws of Human Nature. That’s a fantastic book. It’s a big, thick book and it encompasses a lot of psychology, behavioral theory, psychiatry, and philosophy. I love it. It really deals with how we think and how we interact with other humans.

Slocomb Reed: That seems right up my alley. I’m going to have to look into that one.

Elijah Vo: Yeah. It’s a great book.

Slocomb Reed: What’s the most money you’ve ever lost one deal?

Elijah Vo: I was passively invested in a deal in Atlanta. It was a pretty big one, it was like 300 plus units. A partner ended up stealing money from the company, and then he had passed away. There were in [unintelligible [00:18:12].20] for several months. So we ended up losing most of our investment in that one. It wasn’t a good time. There’s a silver lining though, it did teach me a lot about how syndicators can communicate when there’s a big issue like that… And how to respond to it, how do we communicate the problem and the issue, how many webinars should we be holding, how many calls and emails go out, and all that. It wasn’t my favorite deal, but I did learn a lot about the GP and LP communication gap there.

Slocomb Reed: Hopefully you didn’t have to pay too much for that education. What’s the most money you made on a deal?

Elijah Vo: Probably our biggest deal so far was the one in Oklahoma City. That was a pretty good deal. It was 288 units. We had a good team, we came in and we closed that one at the end of October. That was probably our biggest deal. It’s a Class C that we’re going to push to a B. We did pretty good on that one.

Slocomb Reed: You bought it in October, or you sold it in October?

Elijah Vo: We closed on it in October. I’ll tell you what, probably the deal that we made our most on was the first Atlanta deal. That was the one that we just sold this year in January. It was 110 units that we bought for 42k a door, and we sold it for 90k a door almost.

Slocomb Reed: That’s awesome. How much did you have to put into it?

Elijah Vo: We put in around six or $700,000 into it, with all the rehab and everything. So under a million dollars. But we had rehabbed it, we held it for about two and a half years, and we ended up selling it, returning about 129% return to our investors. That was a whole…

Slocomb Reed: Over what time period, that 129%?

Elijah Vo: Two and a half years.

Slocomb Reed: Wow. That is good. What accounts for that? Is that what you projected, or did it outperform?

Elijah Vo: It outperformed. We had projected like a five-year hold on it.  I think part, for sure, was us. I’m not saying that we did everything. But the other part was also the fact that Atlanta was just growing, and we bought it at the right time. We were able to hold something for two and a half years, do a forced appreciation play on it, and then sell for almost double.

Slocomb Reed: Awesome. Where can our Best Ever listeners get in touch with you?

Elijah Vo: They can reach me at eli@investwithamg.com.

Slocomb Reed: Eli, thank you very much for being here. It’s been great to learn from your success with your shorter-term holds on your apartment deals. Best Ever listeners, we hope you have a Best Ever day and we’ll see you tomorrow.

Elijah Vo: Awesome, Slocomb. Thank you very much.

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