Aug 04 2020 39 mins 2
Join Duc and Vince as we talk with Brian Burke about how to be a hands-off investor. Brian is the CEO of Praxis Capital and has acquired over half a billion dollars’ worth of assets over 30 years. He has never lost a nickel of investor’s money during his career!
Brian gets into his “buy and watch” approach, which is useful during the current market climate. Usually, investors go into deals with a fixed mindset of either “buy and sell” or “buy and fix.” The “buy and watch” strategy gives more room to be flexible and see what makes sense. What Praxis Capital does is when they buy a property, they improve everything to improve the income stream, and wait for the right time to exit! Stay tuned to hear more from Brian!
Brian Burke is President & CEO of Praxis Capital, Inc., a vertically integrated real estate private equity investment firm, which he founded in 2001. Brian is also a member of the Praxis Investment Committee. Praxis operates on multiple platforms, currently managing active syndications for the acquisition of single-family, multifamily and opportunistic residential assets in US growth markets.
Over the course of a real estate investment career that began in 1989, the offerings Brian manages have acquired over 750 properties, including over 3,000 multifamily units, with the assistance of proprietary software that he wrote himself. Acquired asset classes include single family homes, self-storage, mixed-use and large apartment complexes in multiple states. Brian has arranged well over $500 million in debt and equity for Praxis acquisitions. Praxis’ current portfolio exceeds $200 million of real estate assets under management.
Brian is the author of The Hands-Off Investor: An Insider’s Guide to Investing in Passive Real Estate Syndications, and a frequent public speaker at real estate conferences and events nationwide.
Outline of the Episode:
- More than twenty years of using investor money to acquire real estate through many market cycles.
- A passion for providing passive cash flow for other people.
- A disaster of a deal and coming to understand the enormous impact that an adverse economic climate can bring.
- The similarities with Hurricane Harvey and COVID. Job loss, income loss, no evictions, and inability to go anywhere.
- Gauging when the effects on real estate from COVID are going to normalize.
- Reminding the responsibility to pay rent and conveying the message that you’re on their side.
- The “buy and watch” strategy, not a “buy and flip” nor a “buy and hold” type of investor.
- Going vertically integrated, bringing everything in house, and managing properties that are in their own portfolio.
- Value-add opportunities and cutting expenses. They combined a 255 unit property with a 284 unit property, creating ten to fifteen million dollars’ worth of value in 18 months!
- Homerun hurdles and setting yourself up for grand slams.
- Putting more focus on driving revenue instead of cutting costs on expenses.
- Improving public speaking skills as a real estate sponsor.
- Power in economic cycles. Don’t get too happy chasing after get-rich-quick schemes!
- A cautious and conservative business, not allowing any losses on investors’ money for over 20 years!
- Learning the ropes as a passive or active investor.
Resources:
· Brian Burke on Bigger Pockets
· The Hands-Off Investor: An Insider’s Guide to Investing in Passive Real Estate Syndications
· Upside: Profiting from the Profound Demographic Shifts
· TED Talks: The Official TED Guide to Public Speaking
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