Jun 29, 2022
Colby fryer civil engineer that is now a multi-family investor, specializing in C and B minus class assets. And the Principal and Founder of Mountain Bridge Capital, a Multifamily Investment Company specializing in apartment real estate. With a goal to maximize returns for their investors and provide a stable income source for them over time. Colby and his team are very passionate about providing clean, comfortable housing for people across the country in need of housing.
Highlights:
[00:00 - 06:04] Colby Fryer: Multi-Family Investor, Specializing in C and B Minus Class Assets
- He started investing in 2013, bought six houses and then decided to get a coach and mentor to help him transition into the multifamily market.
- Since then, he's invested in over 136 units of multifamily, which has been an exciting journey.
- One of the biggest challenges he faced was learning how to overcome uncertainties when investing in C and B minus class assets.
- He recommends reaching out to family and friends for help when starting out, networking with brokers, and doing your due diligence.
[06:05 - 11:49] Colby's 4,000 Door Goal
- Colby’s team is now focusing on turning the property around and getting it rented again. They are expecting to increase rents by 50%.
- He shares that they are looking to transition out of the real estate business within the next few years.
[11:49 - 17:33] How to Succeed in the Real Estate Market in Today's Economy
- Colby discusses how he scaled into the multifamily space, from no deals to 136 units in a year and a half
- He recommends starting with lower returns, but going with something that is already done if possible
- Mentorship is key, selecting someone who is not a guru but will be a mentor
[17:34 - 18:50] Closing Segment
Reach out to Colby
- Links Below
- Final Words
Tweetable Quotes
“I think once you start doing it and you talk to a few people, it gets easier and easier. And, I think you just gotta own up to who you are and. What you're really doing and you have to come up with that new identity.”
- Colby Fryar
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Connect with Colby on LinkedIn or email him at: colby@mountainbridgecapital.com
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Want to read the full show notes of the episode? Check it out below:
[00:00:00] Colby Fryar: I think once you start doing it and you talk to a few people, it gets easier and easier. And, I think you just gotta own up to who you are and. What you're really doing and you have to come up with that new identity.
[00:00:12] Colby Fryar: I'm a, apartment investor now I'm not civil engineer. I'm not whatever else you have to identify that with yourself and when you do that, That really changes the game for you and helps you to connect with people. And people want to help you if they trust you and they like what you're doing.
[00:00:29] Sam Wilson: Colby fryer is a multi-family investor, specializing in C and B minus class assets. Anything over a hundred units, Colby.
[00:00:49] Sam Wilson: Welcome to the show.
[00:00:49] Colby Fryar: Awesome. Thank you for having me, man. Appreciate
[00:00:52] Sam Wilson: the opportunity. The pleasure's mine. Three questions. I ask every guest who comes in the show in 90 seconds or last, can you tell me, where did you start? Where are you now? And how did you get.
[00:01:00] Colby Fryar: My background's in civil engineering doing a lot of construction project management.
[00:01:05] Colby Fryar: So it really transitioned well into what I'm doing. In, multifamily. So we started investing in single family in 2013 bought six, six houses and then decided, well, that's not scaling as much as we like to be. So jumped in, got a coach and a mentor and over a year and a half ago. And. Right now we're sitting at over 136 doors of multifamily.
[00:01:29] Colby Fryar: So it's been a journey, really exciting.
[00:01:31] Sam Wilson: I'm sure it has. I mean, going for C and B minus class assets and coming from the engineering perspective, everything I know about engineers tells me that you guys really like to know. Like to a very, very fine degree, what it is that's going on. You're getting into C and B minus or class assets and there's quite a bit of uncertainty, I would think sometimes when you're investing in those projects, how do you overcome that?
[00:01:57] Sam Wilson: Yeah, so
[00:01:58] Colby Fryar: It was huge to have the guidance of a coach and a mentor through the process. Somebody that had been through that a little. But yeah, there was definitely some challenges to learn and having that engineering background, you like everything lined out and kind of organized in a package and this business is not that way.
[00:02:18] Colby Fryar: You kind of put things together on the run and, it's crazy sometimes but well worth it just a lot of challenges to overcome
[00:02:25] Sam Wilson: for sure. Right. And having a mentor is one thing. What do you feel like some of the questions were that you had early on that were like, I guess, things that made you concerned about your next steps in this business.
[00:02:38] Colby Fryar: some of the big things were how are we gonna get money? how are we gonna find the deals, all those things that you have to wrap your head around. And, you kind of have to do a little bit , of both. And so the big thing for us was to start reaching out to family and friends and just let 'em know what you're doing.
[00:02:56] Colby Fryar: Tell everybody, and so you start to build those relationships, start to network with people. , and that was really big for our first capital race that we did. , but at the same time, you're, meeting with brokers and so I find that's important for an investor. You don't want to just be a one trick pony show.
[00:03:13] Colby Fryar: Or have one, wear one hat per se. You want to be able to do multiple things when you're starting out. I think that drives a lot of value, brings a lot of value to a team in order to get involved in this business. How did you
[00:03:27] Sam Wilson: select your first market?
[00:03:30] Colby Fryar: So our market kind of came through my network and the mentorship group that I was in.
[00:03:35] Colby Fryar: Also I'm from New Mexico. So I grew up there and knew Albuquerque well, which was our first multifamily asset that we purchased. And then Las Cruces. I went to college there. So a lot of background in the state and familiarity with the market. And so that, that really helped.
[00:03:55] Sam Wilson: Right, right.
[00:03:56] Sam Wilson: absolutely does help. Tell me about this. I mean, know, you went from single family investor in 2013 and 2019, or I can't remember when you said it was, but you decided, Hey you're gonna go into multifamily. Was there ever consideration of any other commercial real estate asset classes?
[00:04:09] Colby Fryar: not really. I. looked at mobile home parks. I had looked at a little bit of office space in terms of businesses and that sort of thing, really like the mobile home parks and not opposed to that may do that someday. Storage. I've seen that a little bit, but I think multifamily was really what we wanted to focus on.
[00:04:29] Colby Fryar: I think you can get, if you start looking at too many things, you get that, shiny object syndrome. And then, and I think that takes away from your focus sometimes. And I think, especially to start with, you need to just focus on one. And that was why we went with multifamily. Just great asset, I think in terms of cash flow, stability through recessions just can't beat it.
[00:04:52] Colby Fryar: Right. And
[00:04:53] Sam Wilson: that's why we chose it. Absolutely buying C or C and B minus assets, probably more in the C class assets. This question may be framed, but how did you know, I guess when you're looking at those assets, there, there can be in what we call a lot of hair on the. How did you know, you could turn 'em around.
[00:05:09] Colby Fryar: Yeah. That that's a good point. And we always heard that you gotta be really careful when you go into those types of deals. especially on the C class, you gotta really do your due diligence, but, our main focus was just really trying to get a deal. And this seemed like a great opportunity.
[00:05:27] Colby Fryar: And that's the thing with these C assets is even though there's a lot of hair out on 'em, there's a lot of opportunity there because you have the value add. And so if you can turn those assets around, you can typically get 'em at a pretty reasonable price and then drive that value, increase the value which can really help your investors.
[00:05:45] Colby Fryar: Now. Other side of that, there is increased risk with those investments which we've learned a lot about.
[00:05:51] Sam Wilson: Tell us a little bit about that. I mean, is there anything you can, as you kind of review, the last year and a half, is there anything you feel like you could've done better or that you would do differently?
[00:06:01] Sam Wilson: Yeah,
[00:06:01] Colby Fryar: I think during our due diligence, we could have done a lot better job. There was some things there we could have seen. And I'm talking about our bigger deal in New Mexico that we did. It was a syndication. This particular deal, like you said, had a lot of hair on it. and when we visited the properties and did our inspections, I think we missed out on, on seeing some of the issues there were, that were there with tenants.
[00:06:24] Colby Fryar: We had some, some problem tenants that we had that we're having to deal with now. And, there was some signs we missed, like broken windows and other things that, that could have really helped us when we started.
[00:06:38] Sam Wilson: What would you do in that case? If you could go back and say, Hey, look, there's problems, tenant it's on this property, you see these broken windows.
[00:06:45] Sam Wilson: How would that have changed the conversation either with the seller, with the broker or even amongst your team
[00:06:50] Colby Fryar: Yeah. And we did have those conversations. Some of it was going on, but I think, I Really would've got some like a contractor or really know person that was knowledgeable in that space property manager to go visit the property with us and really give us an idea of, Hey what exactly are we gonna run into here?
[00:07:08] Colby Fryar: And, that, that would've really helped. Of course you never know exactly. Sometimes you just have to go with your gut, but. But I think that's what we would've done differently, for
[00:07:17] Sam Wilson: sure. Right. And so let's say they came to you and said, all right, Colby, you got some problem tenants here. It looks like you're gonna have a really hard time collecting rent from them.
[00:07:26] Sam Wilson: You may have a higher than normal vacancy. What would've been your next step as you look to the deal.
[00:07:30] Colby Fryar: we probably would absolutely have gone to the seller and, talked to him about how we could possibly resolve some of those issues. Maybe negotiate on the price. That sort of thing. Yeah. I think that would've been really good.
[00:07:44] Sam Wilson: So I guess, what steps then let's ask this, what are you guys doing now? What's your active plan? Because these are things that people can learn from and say, oh man, they've got vacancy to property. You've got problem tenants New Mexico, as far as I know, isn't necessarily a landlord friendly state.
[00:08:00] Sam Wilson: Maybe correct me if I'm wrong. I don't own anything in New Mexico. But, what's the plan going forward? How do you guys overcome those challenges now?
[00:08:06] Colby Fryar: Yeah it's sort of in between, it's not landlord friendly, but it's not tenant friendly, the most tenant friendly. Okay. But, yeah, so the steps that we're taking now is, we, our property managers done a great job of getting problem tenants out.
[00:08:20] Colby Fryar: And so our effort now is just really focused on market. Advertising and filling up our units and turning the units, getting those ready to go. So we do have a little bit higher vacancy, but that's our main focus is turning that around as quickly as possible.
[00:08:37] Sam Wilson: Right. Right. And have you guys been able to achieve rent bumps with this property as you do renovations?
[00:08:43] Sam Wilson: I mean, is that the
[00:08:44] Colby Fryar: value you add plan? Yeah, there's been for renters there, so that's been good. So our, we expected to increase our rent to six 50 for one bedrooms and seven 50 for two bedrooms at this property. And we've been able to do that very successfully. That's
[00:09:00] Sam Wilson: really cool.
[00:09:02] Sam Wilson: That's really cool. Tell me about raising money. I know you said that you've gone out, you've talked to all your investors or family and friends. Was that a hard conversation initially? Especially without a track record in the space or what how did you work that out?
[00:09:15] Colby Fryar: Yeah it is it's, especially coming from an engineer, more of a introverted type person.
[00:09:21] Colby Fryar: So it's, it's something that's a challenge for sure. And, but I think once you start doing it and you talk to a few people, it gets easier and easier. And, I think you just gotta own up to who you are and. What you're really doing and you have to come up with that new identity.
[00:09:37] Colby Fryar: I'm a apartment investor. Now I'm not civil engineer. I'm not whatever else you have to identify that with yourself. And when you do That really changes the game for you and helps you to connect with people. And they, people want to help you if they trust you and they like what you're doing.
[00:09:54] Sam Wilson: Yeah, absolutely. Yeah. Coming from the civil engineering background was what was the tipping point for you? And you could walk away from being a civil engineer and go directly in actually
[00:10:05] Colby Fryar: haven't walked away, still doing that, but, still working the W2. my plan is to transition out over the next couple of years.
[00:10:11] Colby Fryar: but you know, that's kind of a tough thing too. Cuz when you're still working, people are gonna ask you. Oh, so what do you doing? I mean, you gotta tell 'em. But it's not the first thing I identify with. I always say I'm investing in multi-family properties. Right. And if they ask and I say, yeah, it still work, but I'm transitioning out over time.
[00:10:30] Sam Wilson: Right, I think that's great. And that's a good point. what's the plan for that? Have you hit a certain say, Hey, when we hit a certain revenue number, when we hit a certain number of assets under management, I mean, is there, have you kind of built the plan for the exit or is it really when you want to.
[00:10:44] Colby Fryar: Yeah it's a plan. My plan is 4,000 doors in like in five years, I would like to obviously do less, less years for that, but that's the goal and what I'm pushing towards. And I think that would be the number that would offset set of income. Really, what I define as a success in this business is replacing.
[00:11:05] Colby Fryar: Income that I'm making now with the passive income from real estate. And at that it's not the number of doors. It's not the money. It's just really will I, can I support myself and my family off the real estate and not have the job anymore? That's it right there.
[00:11:21] Sam Wilson: Right. 4,000 doors in five years.
[00:11:23] Sam Wilson: That is, an amazing goal. I love it. How did you guys select that number and what do you feel like you were going to do to achieve that goal?
[00:11:33] Colby Fryar: Yeah, so the thought was, based on that number of doors and the income off of that using the syndication model that would offset my current income that I'm making.
[00:11:44] Colby Fryar: It's a lot of doors for sure, but yeah, to get there, the main focus is you gotta take the baby steps. Okay. I gotta do this many deals. This year, this mini deals the next year. And so you set those goals and your priorities, and then you break that down on a more frequent level. Okay. I'm gonna underwrite this mini deals a week.
[00:12:02] Colby Fryar: Put in this many Lois and so you start to build out your steps towards that progression just to make sure it happens. We're
[00:12:09] Sam Wilson: seeing obviously an incredible amount of interest in really all real estate asset classes, but especially in multifamily seeing cap rates compressed, and we're also seeing rates go up, what are you guys doing in this environment to one, continue to find success.
[00:12:25] Sam Wilson: And then how are you offsetting, those two kind of obstacles.
[00:12:29] Colby Fryar: Yeah, that's a very good point. And it is difficult in this environment. It seems like there's a huge disconnect in what sellers are asking and what we're able to offer. Now, I'm starting to see that more and more, although they are, the sellers and the brokers are becoming aware.
[00:12:45] Colby Fryar: That there is a change. But so what we're doing is to really look at ways to, to evaluate more deals. How can we scale this and really underwrite more deals? Because I think that's what it's gonna take. You're gonna have to look at more to get the one that works. It's not gonna be as easy as it was before
[00:13:04] Sam Wilson: for sure.
[00:13:05] Sam Wilson: Gotcha. So underwriting more deals is one of the plans. Is there, are you guys doing additional broker outreach? Are you doing yeah. Your own off market outreach? What, is there anything on that front?
[00:13:16] Colby Fryar: More just working with more brokers and trying to build those relationships, looking at more markets to get the deal flow.
[00:13:23] Colby Fryar: We're looking in Houston and other areas of Texas. Of course, New Mexico. Tucson has been a big focus of ours. We're also interested in Phoenix. We'd love to get something here in Tucson.
[00:13:35] Sam Wilson: Gotcha. Gotcha. Very good. How have you guys defined, who does, what on your team? I think you said there's five of you, is that right?
[00:13:42] Sam Wilson: Yeah. So,
[00:13:43] Colby Fryar: Our team is made up of my, my partner, Danny and I we kind of handled asset management, property management, overseeing the property manager. The bank accounts and the meetings. And then also Les he helps with a lot of that. And then we have a couple other partners that help us on the money raise side, but they're active in the meetings as well.
[00:14:02] Colby Fryar: So everybody has to be active on the asset management side doing something, right. So we kind of split up our duties, who handles proper manager. Handles, social media, the website different items. So we're kind of spread that out, but we really focus on the, money race part of it too.
[00:14:19] Colby Fryar: All of us.
[00:14:20] Sam Wilson: Yeah. Gotcha. That is really cool. If you were to say to someone else and they said, Hey, Colby, I wanna follow in your footsteps. And I like what you've done. You've gone from no deals to having 136 units. in a year and a half. What would be the first thing you'd tell 'em to do?
[00:14:36] Colby Fryar: I would say, really, you just gotta, you gotta jump in. You're not gonna find the perfect deal I think, to start with. But, I think one thing that we did that really helped on our first deals, we found a deal that, Probably wasn't, the best revenue generating deal it, it didn't look that good on paper, but it, a lot of the work was done.
[00:14:59] Colby Fryar: The CapEx was done on it. There wasn't a lot of hair on it. And so I would encourage people to possibly look into that. Maybe you get lower returns, but go with something that's already done. B class, if you can try C class, a nice C class that's fully occupied with stable tenants. I think that's really important on your first deal.
[00:15:19] Colby Fryar: I don't think you want to get into something with a lot of vacancy. To start off with,
[00:15:23] Sam Wilson: right? No, I think that's great. That's great advice there that there is, there is no such thing as the as the perfect deal. And I think that's what a lot of people are hunting for right now in, in, and you do need to be selective.
[00:15:33] Sam Wilson: No doubt. As you said, there's, things due diligent, and I think
[00:15:36] Colby Fryar: just if it cash flows, it, it it's reasonable. And you can make it work. I think go for it. It doesn't have to be perfect.
[00:15:44] Sam Wilson: Right, right. No, I think that's great. That's absolutely great advice. Yeah. Wonderful Colby. I love what you've done.
[00:15:50] Sam Wilson: Here so far, you've gone from you still are a civil engineer and successfully found a way to scale into multi-family properties. You guys are looking, you've got a clear game plan. You've got your team lined. I know you said early on that it was mentorship really, that helped you in the beginning, have the confidence to take the next steps.
[00:16:07] Sam Wilson: Talk to us about that here as just kind of a closing thoughts on mentorship. How did you select cuz listen, you and I both know that there's a million, one gurus out there. How did you select somebody that wasn't a guru, but that really would be a mentor for you in the space. Yeah.
[00:16:23] Colby Fryar: So my mentor Jens, he was, I heard him on a podcast and, I liked what I heard from him.
[00:16:29] Colby Fryar: He was on rod Cleves podcast. and so we connected on bigger pockets. I had looked at a few mentors and I was actually thinking about going into Rod's program and the warrior group. I know that's a great group, but, I chose this group just because I knew it would be intimate and I'd get the one on one setting with my coach and mentor.
[00:16:50] Colby Fryar: And I think that's important. I also think the network. Is important. So the size of the network and the people and the experience that they think that's a big thing to consider when you go into a program. But also the experience level really reach out to somebody that has experience and make sure that they're gonna be the one that's gonna be talking to you, working with you.
[00:17:11] Colby Fryar: I think that's a, a huge part of it.
[00:17:13] Sam Wilson: Right? Right. Absolutely. Absolutely. I think that's those are awesome. Very, very valid points as. Review and people, a lot of people wanna know that. I mean, there's a lot of programs out there and not, no two programs are created the same and no, no two programs are for, for everybody or no one programs for everybody.
[00:17:29] Sam Wilson: So I love absolutely love hearing how you made that selection. Is there any other closing thoughts that you'd like to share with our listeners or pieces of advice that you would give them?
[00:17:38] Colby Fryar: just be persistent and keep going. Don't give. I think there's deals out there. You just gotta be willing to meet with brokers.
[00:17:45] Colby Fryar: I think the big thing with brokers is to get in front of 'em sit down with them, meet 'em for lunch. And I think that'll really help. They they'll know you're serious and wanting to. you're gonna be a player , in the game,
[00:17:58] Sam Wilson: right? I think that's great Colby. If our listeners wanna get in touch with you or learn more about you, what is the best way to do that?
[00:18:04] Sam Wilson: They
[00:18:04] Colby Fryar: could reach out to me at Colby @mountain bridge capital.com can email me. I'm also on LinkedIn, Facebook and my website's www dot mountain bridge, capital.com. Do have an ebook in the works. So look that will be coming soon and look forward to getting that out there.
[00:18:21] Sam Wilson: Awesome Colby. Thank you for your time today.
[00:18:23] Sam Wilson: I do appreciate
[00:18:24] Colby Fryar: it. Thank you.