Maricela Soberanes is a Navy Veteran, apartment syndicator, and owner of Up Plex Multifamily Investments, which syndicates for mutual funds, acting as an operator by sourcing deals, raising capital, and managing assets. She began her real estate investing journey in 2006 with duplexes and fourplexes before making the leap to commercial real estate in 2020 with the purchase of a 130+ unit property in Austin, TX.
In this episode, Maricela shares how she used networking and resources to scale her operations and help her think bigger. She also shares strategies for tackling multifamily deals in today’s changing economic landscape.
Maricela Soberanes | Real Estate Background
- Apartment syndicator and Principal at Up Plex Multifamily Investments
- GP of 2,000+ multifamily units
- JV of 3 mobile home parks and 2 self-storage facilities
- LP of 980 units (8 deals)
- Based in: Austin, TX
- Say hi to her at:
- Best Ever Book: Rocket Fuel by Gino Wickman
- Greatest Lesson: Find a community that provides you with the tools and the mindset needed to succeed.
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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, Maricela Soberanes. Maricela is joining us from Austin, Texas. She's an apartment syndicator and principal of Up Plex Multifamily Investing. Their business model involves syndicating for mutual funds, where they act as operators by sourcing deals, raising capital and managing assets. Maricela's portfolio consists of 980 units as an LP, over 2,000 units as a GP for multifamily, three mobile home parks as JVs, and two JV Self Storage deals. Maricela, thank you so much for joining us, and how are you?
Maricela Soberanes: Thank you, Ash, for having me; I'm doing very well, thank you for an extensive bio.
Ash Patel: It's our pleasure. Maricela, if you would give the Best Ever listeners a little bit more about your background, and what you're focused on now.
Maricela Soberanes: Of course. So background is actually a medical provider. I'm an anesthesia provider by trade, but transitioned into the real estate invest, in 2006 I actually started, and then came to the commercial real estate in 2020. That's kind of the short transition. And right now we focus on bringing investment opportunities for busy professionals and busy business owners as well.
Ash Patel: 2006 did you just start in single family homes?
Maricela Soberanes: Yes, I started with duplexes, actually.
Ash Patel: And 14 years of doing that, and you've found commercial properties in 2020. What were those 14 years like?
Maricela Soberanes: Lonely. Back then I actually started by myself; I didn't really know what I was doing. In 2016 I deployed with the military, and I took the time to read, and actually a lot of these podcasts that now I'm participating in... And it's great to be back in a different role, but this is kind of where I learned a lot of the terminology and the basics. And then when I came back, I started thinking "I'm going to think bigger", and I bought a fourplex, and another fourplex, and that was my big mentality. And then in 2017 I met my husband and then that's when we've found masterminds and communities like this that make you think bigger, and just explore different strategies that we were able to implement.
Ash Patel: What was your first big purchase?
Maricela Soberanes: Together it was 138 units in Austin, Texas.
Ash Patel: And before that was it just duplexes and quads?
Maricela Soberanes: We did an eightplex, that was our biggest size. Yeah.
Ash Patel: Alright, walk me through the mindset and the process of going from eight units to 138 units.
Maricela Soberanes: Yeah. When we bought eight units, we were thinking - and actually, we were choosing ourselves the projects; we were using the subcontractors that we had been using for several years, and we were flying in. I was working in Virginia, New York, and my husband was stationed in San Diego. So we'd fly in alternating weekends to attend to that project. And we thought we were killing it, because we were saving the GC, contractor etc. But we were listening to a lot of podcasts, and actually around that time I remember recording one of the podcasts in an empty unit. And I was like, "This is kind of echoing. Something is talking back to me. Is this really what I should be using [unintelligible 00:04:09.06] resources?" And we found a mastermind and there was a question that came from the participants; we'd show up with paint in our hair, and wearing the badge of "I'm doing it all by myself." But reading books, "Who, not how", just making good use of your time, and we started seeing ourselves as "It's not that I'm not too good to do this, it's that I should be thinking like a business person. And a business person, a CEO would probably never pick up the paintbrush and paint the units." So we started delegating, and we still needed to complete the project, so we started using more people, rather than more time.
Sometimes you have to think about you either pay with time or pay with money. And at that point, we realized we are better off outsourcing our tasks and then using our time to just create networking people, to create networking. So we did a lot of online events that just opened our eyes to different possibilities. That was the switch.
Ash Patel: Maricela, I love that you were listening to podcasts about real estate while you were inefficiently traveling to your property, and then again being inefficient by using your own time and painting and doing all the upkeep. I love that irony. So the 130 units - you didn't have any stepping stones. I'm assuming you raised capital for that. Did you partner with people to take that down?
Maricela Soberanes: Absolutely. We partnered with other GPs, and yes, we raised, capital boots on the ground. It came with a burned unit, so there was a large CapEx to implement, but we realized that we didn't have to do it all. And we had a very strong GP team, and it was just mind-blowing how easy it was compared to doing our eightplex renovations ourselves.
Ash Patel: How did you approach the GP and get them to accept a partnership with you?
Maricela Soberanes: Well, we had been doing a lot of putting ourselves out there with the networking; we were pretty open to what's our net worth, what are some things that we could bring to the team, or a potential partnership. And we had been, again, establishing in the real estate enough that our friends and families have seen how we were tripling our money and the sales... Because we disposed of the 35 units that we had; we started selling, and we made at least three times more money. And we were pretty transparent in showing how we did it, and highlighting that we were thinking small. So through that, a lot of our friends and network started inquiring "How can I invest with you?" And we realized that there was a potential that we could bring some capital. And when you haven't tested your investor pool, you just go and buy. "Let me see what this looks like." And we ended up raising four deals back to back, and we actually closed a week apart on those deals.
Ash Patel: And today are you primarily a capital raiser?
Maricela Soberanes: No. We do capital raise for the deals, but we are operators. So we are doing asset management. We're also looking for the deals. We can do every part of acquisition, stabilization, and running the deal. So we can do either one. Now we do join some teams where our part is not as direct asset management, and we step back a little bit... But that's one of the strategies that we use to be able to close -- like, last year we closed on seven syndications. If we were doing all the roles by ourselves, it would be very difficult to stabilize a property and still be raising for another one.
Ash Patel: So you add value wherever it's needed. You find an operator, and you find out where you can come in and help them out?
Maricela Soberanes: That is the strategy, yeah. How do you increase your network today?
Ash Patel: We do a lot of free events. So now we're able to give back to the community where we do virtual meetups within our community, a clubhouse, we attend a lot of in-person events to network with other operators and other syndicators, and we continue to do a lot of online social media presence. We have built up our database of a couple of thousand people in our database that we continuously nurture by sending them newsletters, blogs, educational material.
Ash Patel: How do you find deals in today's market? We're in March of 2023.
Maricela Soberanes: So we actually are pretty lucky to have connections where, again, within the communities that we are part of, or friends are selling. So a lot of those deals come from those connections. And then with the brokers that we close, they keep bringing deals as well. And then some of the junior syndicators that are trying to get in the market, we oversee their underwriting, so we get to see a lot of the deals coming through our desk pretty much every day.
So finding deals is not really difficult. There's a lot of connection, and within that community, [unintelligible 00:09:53.04] that behind the scenes. So we're lucky to have that position today. Before, we were actively cold-calling, subscribing to the main CBRE, and Crexi, and all those databases, so we can take the deals from there. So we still get those, but most of our deals are coming from direct.
Ash Patel: Maricela, today interest rates are on the rise, the Fed has indicated that they will continue to raise... What are your thoughts on taking down multifamily while cap rates are still compressed? Do you still do interest-only bridge loans?
Maricela Soberanes: We actually have an LOI that we are in best and final right now, so it's actively negotiating. And you're right, the rates change by the week. So even if we submit an LOI with contingencies that are going to allow us to step down to the deal, it doesn't make sense. Right now, the deal might make sense logically and on location, but if the lending changes, then that's one of the reasons we cannot proceed. The NOI pretty much will not support lending.
So we are being very creative, we are exploring some assumptions, we are also working with the lenders to maybe do a longer hold, rather than a quick three or five. So those are some of the strategies. And also, now with experience, we are able to use some of the brokers that we used before, and experienced operators do get a little bit of a break... So that's been our strategy for now.
Ash Patel: Do you lock in your interest rates always now going forward, or do you still do the variable rates?
Maricela Soberanes: Last [unintelligible 00:11:23.10] actually there was interest-only for five years. So that will allow us to reconsider after. Right now we are considering some long-term, not variable rates. Again, everything changes by the week, so next week this is going to be old information.
Ash Patel: So five years and it's an interest-only locked rate. Right?
Maricela Soberanes: Yes.
Ash Patel: Interesting. What did you have to put down on that property?
Maricela Soberanes: It was a low leverage; we put about 48%, 49%. So we were very low leverage.
Ash Patel: That's why they're okay with doing interest-only on a five year note. You put almost 50% down. Okay. Can we dive into the numbers on that property?
Maricela Soberanes: I don't have my numbers right in front of me, but you're welcome to pick my brain and see where we can go.
Ash Patel: What was the purchase price roughly?
Maricela Soberanes: I would say 25.
Ash Patel: 25 million. How many units?
Maricela Soberanes: 168.
Ash Patel: And where was this property?
Maricela Soberanes: It's an Arlington, Texas.
Ash Patel: Why did you pick Arlington?
Maricela Soberanes: It's a well established neighborhood, very reputable, and occupancy rates are pretty stable high. It's about a mile away from the Texas Cowboys Stadium. Lots of businesses there. And our mentor is buying the two buildings right across the street. And we have another friend buying another building right next to it. So it's, again, the community that just makes it a better location. We know we're all gonna operate these businesses to increase the value.
Ash Patel: Is this a value-add property?
Maricela Soberanes: Not really. We're gonna do some upgrades and extend the patios, add in a workout station... More keeping up with the Jones; we don't have a dog washing station, and we're gonna add that... Nothing that if we were not going to add or renovate the units, they're still gonna get rented.
Ash Patel: Is your plan to increase rents there?
Maricela Soberanes: We have been increasing the rents already, yes.
Ash Patel: Okay. And today, you read the headlines, and it says multifamily rents are dropping. Not the case in Arlington?
Maricela Soberanes: Not for our case. Actually, we're cleaning up house; as you know, when you take on a new asset, there's gonna be some stragglers that you're gonna have to get them back online. So we're filing some evictions. But that's part of the business plan, and we're already leasing up the units. So we're going strong and increasing still. I think we increased by 8% on the new leases. And again, we closed right after Thanksgiving, so with the holidays, and with the moving around, we're still leasing up and cleaning up house.
Ash Patel: Maricela, what's the hardest lesson you've learned in real estate, whether it's about money, friends, deals? ...just a really tough lesson that you want to share.
Maricela Soberanes: I will say picking your partners. There's been a partnership that didn't go well. You have to, first of all, put the investors in front of any interest. Actually in that deal we had raised the capital, so we had to return the capital to the investors, and then solve any discrepancies. So definitely picking up the partnership, that has been one of the hardest lessons to learn. And at the same time, we are grateful we learned that, because we're very, very cautious on who we partner with.
Ash Patel: Yeah, those are tough lessons. Maricela, what's the best real estate investing advice ever?
Maricela Soberanes: Find a community and find a mentorship. Don't try to do it by yourself like I did.
Ash Patel: Great advice. Maricela, are you ready for the Best Ever lightning round?
Maricela Soberanes: Let's do it.
Ash Patel: Alright, what's the Best Ever book you've recently read?
Maricela Soberanes: I'd say Rocket Fuel, for partnerships or especially working together with your spouse.
Ash Patel: Oh, yeah, I didn't think of that. That's a game changer. It talks about the visionary and the integrator. I'm assuming you are the visionary.
Maricela Soberanes: You got it.
Ash Patel: Good, good. Maricela, what's the Best Ever way you like to give back?
Maricela Soberanes: We like to mentor other people, and we like to bring new operators in the mix. We have actually helped 12 operators get their first GP position, and we're looking to at least do the same thing this year.
Ash Patel: Maricela, how can the Best Ever listeners reach out to you?
Maricela Soberanes: My Linktree - it has all my links, and follow me on Instagram. My handle is @the_immigrant_millionaire, and I can send you that link.
Ash Patel: Awesome. Maricela, thank you so much for sharing your story with us. 14 years of doing smaller deals, and then the podcast, and the masterminds, learning to go bigger... Thank you for sharing your story with us today.
Maricela Soberanes: Thank you very much, Ash.
Ash Patel: Best Ever listeners, thank you so much for joining us. If you enjoyed this episode, please leave us a five star review, share this podcast with someone you think can benefit from it. Also, follow, subscribe and have a Best Ever day.
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