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How to Scale Commercial Real Estate


Aug 4, 2022

Leslie Awasom is the Director of Operations and Co-founder of XSITE Capital Investment LLC. Leslie bought his first investment property in 2017 and transitioned to multifamily investing in 2019. Leslie and the XSITE Capital team host a rapidly growing multifamily-focused meetup in Maryland. They provide resources and add value to individuals interested in growing their wealth and changing their financial future.

 

Leslie is a trained Nurse Anesthetist and entrepreneur who lives in Hanover, Maryland.

He is a husband, father of two beautiful girls, and a son, and loves to spend his spare time reading and flying drones.

 

[00:00 - 05:15] Opening Segment

 

  • Leslie Awasom is the director of operations and co-founder of Xsite capital investment LLC.
  • He manages the company operations market, data analysis, cash flow, and budget.
  • Leslie started in real estate in 2017 after coming across one of Robert Kiyosaki's “Second Chance: For Your Money, Your Life and Our Money
  • They founded Xsite Capital Investment and it is currently sitting on 125 million assets under management.

 

[05:15 - 10:34] Accepting The Abundance Mindset: Not losing when you provide value to others.

 

  • The company's journey wasn't always fast but it was perfect for where they are now.
  • The company is solely focused on acquiring multifamily properties and believes it is still a solid asset for long-term wealth growth.
  • They are conservative with their projections and keep their rent growth in some markets while dialing it back in others.
  • They also help others who want to start their own multifamily company. 

 

 

[10:35 - 15:55] Underwriting Deals 

 

  • The company has been underwriting deals to deals that they close at 134 to 1, which is based on their last few deals.
  • There has been softening in the market, with re-trading happening and brokers asking for offers to be submitted even if they are lower than what was asked in the past.
  • The key to success in this market is understanding the story behind the numbers and being able to trend them monthly.
  • One way that the asset management team can affect the numbers is by implementing water savings programs or having a qualified maintenance person on staff.

 

 

[15:56 - 18:28] Closing Segment

  • Reach out to Leslie 
    • Links Below
  • Final Words

 

 

 

 

Tweetable Quotes

“Stay on top of your numbers. You got to be able to trend everything monthly. understand what those numbers mean and how you could influence those because that's where the key and that's where you have the power as asset management to make these assets perform very well.” - Leslie Awasom

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Connect with Leslie  visit their website at xsitecapital.com

 

 

 

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Email me → sam@brickeninvestmentgroup.com



Want to read the full show notes of the episode? Check it out below:

 

[00:00:00] Leslie Awasom: some of the tools that we use project, we kind of dial it down a little bit. And we like to go into every deal, having enough cushion. Within the deal, such that if something goes wrong, we still fall within our numbers or even better. 

[00:00:12] 

[00:00:24] Sam Wilsons: Leslie. Awasom is the director of operations and co-founder of X site capital investment LLC. He manages the company operations market and data analysis, cash flow and budget. Leslie, welcome to the show. 

[00:00:36] Leslie Awasom: Hey, thanks Sam. Thank you so 

[00:00:37] Sam Wilsons: much for having me. Hey man. The pleasure's mine, there are three questions. I ask every guest who comes on the show in 90 seconds or less.

[00:00:43] Sam Wilsons: Can you tell me, where did you start? Where are you now? And how did you get there? 

[00:00:46] Leslie Awasom: Yeah, absolutely. I started in real estate in 2017 after coming across one of Robert Kiyosaki book, second chance at your money in your life and just got interested in real estate and building um, more like a solid financial future for myself.

[00:01:00] Leslie Awasom: Then along the way, discovered multifamily investing came in contact with my two amazing partners. We found that exec capital investment to focusing on multifamily investing in 2019. And we've been growing ever since. It's been an amazing journey for us, our company and our investors.

[00:01:15] Leslie Awasom: Currently sitting on 125 million of assets under management it's growing investor community and have great, a great food that we've been able to help grow the minds of over 1500 people so far. And is that number, it keeps growing every day, 

[00:01:29] Sam Wilsons: man. That's fantastic. When you say you've been helpful or grateful to grow the minds of 1500 people, what does that mean?

[00:01:37] Leslie Awasom: So we have a monthly educational event. We provide a lot of educational content. We host every Tuesday evening on the writing class where we teach people interested in multi-family how to own the, write these properties, or how to evaluate these deals for themselves as investors.

[00:01:51] Leslie Awasom: And we also have like monthly educational events where we bring in experts in the country from other aspects and finance and real estate to teach members of our community. And we provide a lot of educational content via email to our list as well. So, it's just something that we really enjoy doing and that's something that's part of our call mission.

[00:02:08] Leslie Awasom: Gotcha, 

[00:02:08] Sam Wilsons: man. That's really cool. So you guys have scaled to 125 million in assets, under management, and I guess that's five years that's pretty great. Did you have any investing history in real estate before you went into multifamily? 

[00:02:20] Leslie Awasom: So we actually went into multifamily in 2019 Sam.

[00:02:23] Leslie Awasom: So, so we scaled that in about two, in about three years. Yeah. Prior to that, we individually had experience in single family investing. Our CEO had some a long track record of investing in like, startups and angel investing and real estate as well. And I did some real estate and all the third partner had a financial service business.

[00:02:42] Leslie Awasom: So that's the background we came into when we informed our. 

[00:02:45] Sam Wilsons: Gotcha. That's really cool. Tell me what are some things you know, that you think about, I guess, in this now three year journey in multifamily? Like what are some things that you feel like you've done really well that other people should emulate?

[00:02:58] Leslie Awasom: I think one thing we've done really well is it's like really. How was the right word really absorbing or like, really accepting the abundance mindset, right. Really adopting that philosophy of an abundance mindset and really understanding that we do not lose anything by providing value to others.

[00:03:15] Leslie Awasom: And actually it's actually like kind. To some extent it's selfish mindset because the more you give to other people, you actually get way more in return. So that's something that has worked really well for us that we've done really well. We give a lot of our time and we give a lot more to members of our community.

[00:03:30] Leslie Awasom: And because of that, our community has grown tremendously. We've also done a really good job at finding the right assets that, that keep our investors safe. Being very conservative and our, on the writing. That's one thing that we are very proud of how conservative we are on the deal that we bring to market so that our investors are safe when they come to invest with us.

[00:03:50] Sam Wilsons: What are some things, when you say, the more you give the more it comes back to you, but like when you say that, what are, what would you say would be a standard, some something that you'd, or ordinarily have thought, man, I'm not gonna do that. I'm not gonna, I'm not gonna share that information or I'm not gonna give that.

[00:04:04] Sam Wilsons: What are some things that come to mind that you feel like, Hey, you know what? We decided to be really liberal with this and share it as much as we can. 

[00:04:10] Leslie Awasom: It's just for example, we have a lot of people that come to our platform that are looking to start their own, our multifamily company as well.

[00:04:17] Leslie Awasom: Ordinarily some other person will look at this as some kind of competition. I'm not gonna show them exactly how we do stuff. We don't, however, whatever you want to learn, we show it to you, whatever resources we took to get over there, we share with. So is that another thing is like, for example, like the underwriting class we do, we've been doing that every Tuesday night going on to about a year now.

[00:04:35] Leslie Awasom: It's something that take, and it's not something that we charge anybody for. And so, even people that are coming on board that are learning and going and doing this on their own as well, We really enjoyed doing it. And but, because we are given that much, we've met some really amazing partners that see that and value that.

[00:04:51] Leslie Awasom: And that also share that kind of an energy. And they've also helped in our growth significantly. 

[00:04:56] Sam Wilsons: Got it. That's really cool. What are some things maybe that if you could do it over, if you went back and said, man, let's rewind three years, something that would make maybe speed things up that would maybe save some heartache.

[00:05:07] Sam Wilsons: What's something that you feel like was not, we'll called a mistake, but something that, that you said, man, I don't wanna repeat that. 

[00:05:13] Leslie Awasom: I probably should have brought in a third partner, our CEO, Dr. Juda only much earlier than we did because bring in a what now our third partner, Dr. Juda only he came along in the process a little bit later.

[00:05:24] Leslie Awasom: The company initially started with Tenny and I. We probably would've brought him in early because he just came in and just made like the final leg of the tripod and just brought in this amazing energy and and intelligence and integrity and tenacity that has really pushed us forward.

[00:05:41] Leslie Awasom: So that's probably one thing I would've done differently, otherwise, everything else I'll keep it the same. My journey might not have been the fastest. we had some failures and struggles along the way, but it was it was perfect. It was perfectly designed to put us to where we are today.

[00:05:55] Leslie Awasom: That's great. 

[00:05:55] 

[00:05:55] Sam Wilsons: Let me ask you this. Lastly, you said you brought your third partner on and it's all worked out. Great. What did you guys realize that you were missing? Like, what was it you're like, gosh, we just need a third person in this, to really make this thing.

[00:06:08] Sam Wilsons: Hum. What were the components that were missing in, in, in that you guys realize you need to bring somebody on? What was that? 

[00:06:14] Leslie Awasom: So we needed that somebody that had that vision that could keep us like aligned and focused in , on who we are the company we're trying to build and the community that we're trying to build.

[00:06:24] Leslie Awasom: Because initially well, we just got really excited about the possibilities that multifamily presents for. For ourselves and members of our community. And we just went out running we didn't really have like a true identity as a company and focusing on what was really key to us. So we needed that person that had that kind of that, leadership aura, if that's the best way I could describe it.

[00:06:45] Leslie Awasom: And Dr. Oney is, was a perfect person. And we are grateful that he came on board when he did. 

[00:06:50] Sam Wilsons: That's that's really cool. And are you guys solely focused on acquiring multifamily? Yes. Right now what do you think about the multifamily market right now? 

[00:07:00] Leslie Awasom: It still has it's a little bit riskier than it was a year ago because of the changes in interest rates and everything that's happening in the economy.

[00:07:08] Leslie Awasom: But we think, I believe multifamily is still a very solid asset for long term wealth growth and world generat. We just have to be a little bit more conservative than we were before with some of the projections that we make on some of the growth and be more, selective in the markets that we're investing and the kind of assets that we're investing, just to decrease the amount of our risk exposure that might come along.

[00:07:29] Leslie Awasom: If we have some significant changes to the 

[00:07:31] Sam Wilsons: economy, when you say you're changing your growth projections, is that saying, Hey, we're gonna dial back what we think we can sell this for. Is that saying, Hey, we're gonna cut back on, what our rent projections are gonna be. I mean, is that even going so far as saying, Hey, what if we have a rent decrease?

[00:07:47] Sam Wilsons: I mean, what do you mean when you say. Tweaking your growth projections. 

[00:07:51] Leslie Awasom: Absolutely. It's a little bit of both. We project it, for example, if in the past we're projecting a 10 basis point increase in cap rates on on a yearly basis on exit, we might project a little bit higher depending on the market.

[00:08:03] Leslie Awasom: Some markets we are doing even like a 15% annual in, increase 15 basis point increase in cap rates annually onto. Our rent growth. We are keeping our rent growth in some markets. Maybe the first year we have some in the other years we keep it flat. So, it just depends on what the kind of data we see from our data sources in each of the markets that we go into.

[00:08:24] Leslie Awasom: So whatever like some of the tools that we use project, we kind of dial it down a little bit. And so that it keeps, we like to go into every deal, having enough cushion. Within the deal, such that if something goes wrong, we still fall within our numbers or even better. 

[00:08:39] Sam Wilsons: Got it. Tell me about your role there inside of the company.

[00:08:42] Sam Wilsons: What is it specifically that you handle? 

[00:08:46] Leslie Awasom: So I handle the operations of the company on the company side. I make sure that we are meeting like we have the right systems in place to meet the goals that we set for ourself. Every year we meet and we come up with quarterly goals and we come up with annual goals as well.

[00:08:59] Leslie Awasom: So, my role in there is to make sure that we are using the systems that we have created and other systems are working constantly evaluating constantly working with our employees to make sure that we can make our working process more efficient. And I'm also involved in the management of our assets.

[00:09:15] Leslie Awasom: Manage the property managers making sure that they're keeping up with the KPIs that we set for each property, make sure that the properties are performing according to what we on the road or better. So, once our acquisition team, for example, finds an asset and they think that it's a good one for us to review and they've gone to the underwriting, I take that underwriting and I have to review it compared to what our business plan, what our typical business plans are and do some more.

[00:09:38] Leslie Awasom: Checks and balances on it to make sure that it's a right asset for us to go into. So, I'm more of the, on the back side of things, just making sure that the numbers are right and everything is, functioning properly 

[00:09:49] Sam Wilsons: What's the timeline. This is just a totally kinda left field question. Yes.

[00:09:53] Sam Wilsons: What's the timeline from when you guys identify a potential asset on the acquisition side, get it through underwriting, get it to you, get you to review the underwriting and then say, Hey, yeah, this is a potential to make an offer. What's how long does that take? It usually 

[00:10:06] Leslie Awasom: takes about three days. Because that Christian team is very busy and that's probably one of the most developed part of our business.

[00:10:13] Leslie Awasom: We have a very solid team, so we have someone that goes in and finds the assets and stop to the brokers. Then pass it over to underwriting. They're underwrite it and they usually send it out to me. =, within three days after getting more information from our property managers, our debt brokers and our tax consultants.

[00:10:29] Leslie Awasom: So within three days I get it and review everything and see if it makes sense to pursue any further or we pass. What is your 

[00:10:36] Sam Wilsons: current, do you, I mean, if you don't know this, that's fine, but I bet you do. What is your current number of deals you underwrite to deals that you close what's that 

[00:10:45] Leslie Awasom: ratio right now is about 134 to one.

[00:10:49] Leslie Awasom: See, I knew you knew. And that asked to to best on final, not even close . Yeah. 

[00:10:55] Sam Wilsons: What? Geez. So yeah. Okay. That's the best and final that's not even to 

[00:10:58] Leslie Awasom: close. Yeah. Yeah. That's based on what we've done so far from the last from our last deal. So it's been crazy. We've been reviewing a ton of deals, but made a few best on finals, but it's not nothing is, has come through yet.

[00:11:10] Leslie Awasom: Have you seen any 

[00:11:10] Sam Wilsons: softening in the market or any I guess just any changes of note. 

[00:11:16] Leslie Awasom: Yeah. Our feedback from our brokers is that there's a lot of re trading happening on some of the properties. So in the past we would talk to brokers and our underwriting might be a few millions below what they were asking.

[00:11:27] Leslie Awasom: And we will ask if it could submit an offer and they tell us no, but this time around, it doesn't matter how low the offer is they actually to submit because , they want owners to see that things are changing with the interest rates. This deal still have to cash flow. Most owners still have expectations from when we were at a 2% interest rate in, and a 6% interest rate climate.

[00:11:48] Leslie Awasom: So it's gonna take some time to adjust, but I do feel like it it is adjusting slowly. 

[00:11:53] Sam Wilsons: It is. Yeah. And that's, there's lots of arguments, eight different directions on why interest rates won't affect cap rates, why interest rates and cap rates are completely, disconnected.

[00:12:02] Sam Wilsons: And then you hear it the other way around. And I don't know which ways up to be honest in the end. But it is but just to confirm, you're confirming, what we've been hearing is that there are some re trading happen. We have, we are seeing some softening in the market as a whole and just, it is interesting to hear that, Hey, you know what, gimme your offer.

[00:12:19] Sam Wilsons: So at least I can take it back. And that's been the word from the brokers too, is like, we need something to take back to our sellers, just so they understand that this is where the market is now. So yeah. Yeah. E even as you. As a buyer, you might feel like you're sending in an offensive bid, which is okay.

[00:12:34] Sam Wilsons: Yeah. But. That's what they're asking for. 

[00:12:36] Leslie Awasom: Yeah. Because if you think about it at the end of the deal, the deals still have to cash flow. Yeah. Maybe the cash flows might not be as, as robust as they were a few years back. But buyers would not buy deals that are doing a negative cash flow that are really that tight.

[00:12:49] Leslie Awasom: So. It's just a higher risk. So, I do believe some softening would happen, but maybe not as drastic as as people think it might get, just because multifamily is still a very strong asset class with a lot of growth potential still. 

[00:13:01] Sam Wilsons: Yep. Yep. Absolutely. I think that's really cool.

[00:13:04] Sam Wilsons: Give me gimme one thing, one, one nugget on the asset management side that you say, man, here is something that. you just gotta have in order when you're the asset manager, 

[00:13:15] Leslie Awasom: You like, you gotta stay on top of your numbers. You gotta Be able to trend everything on a monthly basis. Guys, stay on top of your numbers, understand what those numbers mean and how you could influence those numbers because that's where the key really that's where you have the power as an asset management to make these assets perform very well.

[00:13:34] Leslie Awasom: So you really do have to understand the story behind those numbers and what role you could play to, to affect those. 

[00:13:40] Sam Wilsons: Give me an example of a number you feel like that is something that you can directly influence that you should really be paying attention to. 

[00:13:48] Leslie Awasom: I tend to look at it from a much bigger picture, but the simple things for example, just going into a property you might see a water bill that's been outrageous where as an asset management, you might come in and implement some kind of a water savings program, and you're able to decrease that and increase your NOI tremendously.

[00:14:04] Leslie Awasom: And the other piece is like maintenance cost. Like, what I've found in some of our assets is like, by having a very good qualified maintenance personnel on staff that is well paid, but that has several skills. Right. You could provide a lot of tools for the, for that person front, and it's gonna save you a ton in maintenance upfront.

[00:14:23] Leslie Awasom: And which is something that we're experiencing one of our assets, which is like finding the right qualified maintenance on site person that has those skills that you don't have to outsource a lot of the jobs that are involved in this assets that could save you a ton of money on your maintenance cost long.

[00:14:40] Sam Wilsons: Yeah, absolutely. Do you guys help find that maintenance person or is that the property manager's job? It's the 

[00:14:46] Leslie Awasom: property manager, but we try to kind of give a direction of of where we want to go. And our property management team has a lot of exposure. In the Southeast market. So they have a large footprint and they can kind of, it's just about giving some side sort of direction and then they go out and look for that person for you.

[00:15:02] Leslie Awasom: So, so it's one of the things we talk about our property management team up front. When we taking over these assets. Yeah, 

[00:15:08] Sam Wilsons: absolutely. What do you do when you aren't getting the numbers you want from the property management team? And I, what I mean by that is when, Hey, I need the last week's report on Monday morning, and then Monday comes and goes and you don't have those numbers.

[00:15:20] Sam Wilsons: What do you do? 

[00:15:21] Leslie Awasom: Well, you just have to remind them the importance , of getting those numbers on time. My, our approach has been to empower whoever we work with to take responsibility for what they're doing so that we don't have to sit on top of them every day. And and we promote good behavior.

[00:15:37] Leslie Awasom: Right. So we focus in on what you're doing, right. And we promote that and we push that forward and we found that has really worked very well. And our property managers, our team members are ready to go above and beyond for us because they feel like they're part of the journey of this asset.

[00:15:52] Leslie Awasom: They feel like they're part of the journey that are investors are joining us along. The way we, so, so, so far it has worked really well. And if there's something that is not done, right, like not getting a report out on time, we'll point it out to you and then hold you to the higher expectation, but make you feel like you are the one who is coming up with a much higher expectation.

[00:16:09] Leslie Awasom: Like, so the property manager's gonna set the goal to have this on time by this time, then we'll hold you accountable. 

[00:16:15] Sam Wilsons: Right. I love it. I love it. Lastly, thank you for taking the time to come on today and really give us the insight into what it means to be an asset manager. What it means on the underwriting side, how you guys are finding opportunity, what you guys are doing to stay competitive, your thoughts, really on the market.

[00:16:31] Sam Wilsons: And then just talking about your, the way you educate. Your investors, your educational events that you put out. I think that's really cool what you guys are doing. Certainly appreciate you coming on. If our listeners wanna get in touch with you, learn more about you, your every Tuesday underwriting event, any of those things, what is the best way to do that?

[00:16:47] Leslie Awasom: First off? Thank you, Sam. Thank you so much for having us on your platform and giving us opportunities to continue to share on what we do to the larger community. Yes. You could get in touch with myself or any one of my amazing partners by write our information is all available on our website, which is, www do X as in XLOPHONE, S as in Sam it capital.com.

[00:17:10] Leslie Awasom: XSITE capital.com. Feel free, reach out to any one of us. We love talking to, to, to people and learning more about ways that we could help you at Tuesday underwriting classes every Tuesday night at 8:00 PM. If you are interested in that as well, there will be a means for you to join our community, to become part of getting communications about everything that we do.

[00:17:29] Leslie Awasom: So, come join us. However way we could help you in your growth journey. Don't hesitate to reach out to. 

[00:17:34] Sam Wilsons: Fantastic. Lastly, thank you again. I appreciate it. Have a great rest of your day. 

[00:17:38] Leslie Awasom: All right. Thank you so much, Sam. Thanks for having me.