E09: Syndication Showdown: Multifamily Acquisitions vs. Raising Capital

Cash Flow Fight Club

Real estate heavyweights George Cline and Michael Manthei go head-to-head to discuss their strategies for actively partnering in multifamily syndications. Hailing from Fort Collins, Colorado, is George Cline, a successful entrepreneur for 25 years. His experience spans real estate, networking, and the internet. He currently focuses on larger multifamily housing, having amassed over 1700 rental units under his management.

In the other corner of the ring, Michael Manthei from Lancaster, Pennsylvania, began entrepreneurship at age 21, and has also served as a full-time minister. Having achieved financial freedom, he retired in his early 30s, and he now creates investment communities through his Elevate Investing group. He is also currently a general partner in over 2,000 rental units across 18 syndications, having raised over $33 million in capital.

Here are some power takeaways from today’s conversation:

[03:46] - George and Michael’s respective career backgrounds

[18:40] - Running an apartment complex is like parenting

[23:32] - The importance of systematizing things

[26:39] - Raising capital to fund deals

[41:23] - The power of partnership and mentorship

[45:04] - Criteria to consider when joining a deal

[1:01:13] - Key success factors for capital raising

[1:04:11] - The downsides of capital raising

Episode Highlights:

[18:40] Why Running an Apartment Complex is Like Parenting

Running an apartment complex is akin to parenting - exciting yet challenging. Managing the property, securing tenants, and closing deals can be stressful, like the difficulties of pregnancy. Success requires attention, intention, and continuous learning, mirroring the demands of raising children. Rather than acquiring more properties, focusing on improving and mastering the current one is vital. By giving it the necessary attention and intention, one can effectively navigate property management and achieve success.

[27:58] Michael’s Experience Raising Funds

Michael takes a hands-on yet high-touch approach, simplifying paperwork and processes for investors. He aims to provide top-notch service. While he has experience using SyndicationPro, Michael noted the platform is still developing. He is transitioning to Juniper Square which seems more advanced currently. Michael highlighted tracking response rates at different stages of capital raising to avoid being surprised by lower-than-expected results later on. Putting others above himself in his dealings and communications is a trait Michael believes leads to building strong, trusting relationships with investors.

[1:01:13] Key Success Factors for Capital Raising

• Authenticity. Don't try to appear further along than you actually are. People can see through that.
• Put others above yourself. Make it about serving investors well rather than how things make you look or feel.
• Build trust and relationships over time through authentic interactions and high-touch service.
• Continually learn and improve your process based on metrics like response rates at different stages. Track what's working.
• Simplify and streamline things for investors like paperwork. Don't make them jump through unnecessary hoops.
• Have a support system to help you through challenges. Michael mentioned mentors who have been invaluable guides.

[1:04:11] The Downsides of Capital Raising

The weight of responsibility can be overwhelming as it involves handling people's life savings, leading to sleepless nights. Understanding the gravity of this responsibility and approaching it seriously is crucial. Conversely, if someone lacks concern about accepting others' money, it may indicate their unsuitability for this business. Capital raising demands a deep understanding of seriousness and genuine care for investors' financial well-being. Despite the downsides, certain individuals, like Michael, find fulfillment in shouldering this responsibility.

Resources Mentioned:

Elevate Investing Group

Ardent Equity Group

SyndicationPro

Juniper Square