From Teacher To Real Estate Syndicator – Angel Williams

 

There is no plateau when it comes to the real estate investing journey. You enter the game doing one thing and continue to grow doing other things. Angel Williams is all too familiar with this journey, going from residential to syndication, passive to active. In this episode, Angel joins hosts Ava Benesocky and August Biniaz to share more about how she has grown in the industry, later co-founding The Academy Presents and becoming a managing partner of Lauren Capital LLC. Angel takes us across her transition from being a teacher to a real estate syndicator, spilling great insights and advice to navigate the ever-changing landscape of real estate. Plus, she shares with us her 2023 economy forecast, giving a glimpse of what to expect from the industry this year. To all passive and active investors, tune in now and learn more!

 

Get in touch with Angel Williams:

Website: https://www.theacademypresents.com/

LinkedIn: https://www.linkedin.com/in/angel-williams-re/

 

If you are interested in learning more about passively investing in multifamily and Build-to-Rent properties, click here to schedule a call with the CPI Capital Team or contact us at info@cpicapital.ca. If you like to Co-Syndicate and close on larger deals as a General Partner click here. You can read more about CPI Capital at https://www.cpicapital.ca/.

 

#avabenesocky #augustbiniaz #cpicapital

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Watch the episode here

 

Listen to the podcast here

 

Important Links

• The Academy Presents
• Lorren Capital LLC
• Jekyll Island
• Positive Intelligence
• LinkedIn – Angel Williams
• The Academy Presents REI Rocks Community – Facebook group

 

About Angel Williams

Angel has been involved in real estate investing her whole life but began her personal real estate investing journey in 2003. She is a Co-Founder of The Academy Presents and a Managing Partner of Lorren Capital, LLC. Angel has experience in Single Family Home Rentals, Residential Multifamily Rentals, Multifamily Syndication, and Oil and Gas investing. Angel graduated from Baylor University in 2000 with a BBA in Economics, and in 2002 with a MS in Economics.

Angel is a mother to three daughters and one special needs son. While she is now a full time Real Estate Professional, she only recently retired from teaching middle school. Not giving up on educating altogether, she still teaches economics on the college level as an adjunct professor. Providing educational opportunities will always be her heart, and theacademypresents.com is the vehicle for her passion of spreading real estate investing education.

The Academy Presents REI Rocks brings together industry experts from around the nation, and beyond, to share their knowledge and experience with others in the REI space. With a goal of becoming one of the top sources for real estate investing information and connections across the many facets of real estate investing, Angel hopes to break down perceived barriers in investment types and tools.

 

From Teacher To Real Estate Syndicator – Angel Williams

Welcome back. It’s 2023.

Happy new year to our readers. Thank you for all the loyal readers. They have been with us now for a long time. We have gone through a lot. I’ve gained and lost probably around 40 pounds. My hairstyle has changed. I grew a beard. They have seen me go through a lot. There are a lot of gray hairs coming out. As much as interest rates have gone up and down, my weight has gone up and down. Ava has stayed exactly the same as a GP should. A general partner should always be consistent.

We want to thank all of our readers. Without you, this wouldn’t be as fun and exciting. We always love seeing new subscribers and likes. We put a lot of work into this every week. It means a lot to us. Over the holidays, what did we do, August? We got sick.

Here’s the thing. If you’re living in a cold country and for the holidays, you’re going to go to a colder place, that’s bad. That’s what we were going to do. We were going to go see Ava’s parents.

It’s in Alberta.

 

 

It’s an annual ritual. We go and see them every Christmas holiday. The flights got canceled because there was a bit of snow here.

The weather was horrific.

As soon as we tried to reschedule a flight a few days later, we got sick.

We slept for days but we did one thing. We got ramped up for 2023. We got all of our internal stuff organized. We put new systems and processes in place because we’re getting ready for incredible buying opportunities.

I’m sure our readers have enough about us. Let’s talk about our guest. I’m excited. Angel Williams is a good friend of mine and an associate. She’s very interesting. I’m eager to interview her. Maybe you could tell our people a little bit about Angel.

We’re joined by Angel Williams. Angel began her personal real estate investing journey in 2003. She is a Cofounder of The Academy Presents and a Managing Partner of Lorren Capital LLC. Angel has experience in single-family home rentals, residential multifamily rentals, multifamily syndication, and oil and gas investing. Angel graduated from Baylor University in 2000 with a BBA in Economics and 2002 with an MS in Economics. She’s my kind of girl. Not giving up on educating altogether, she still teaches Economics at the college level as a professor.

With the goal of becoming one of the top sources for real estate investing information and connections across the many facets of real estate investing, Angel hopes to break down the perceived barriers in investment types and tools. We believe this interview with Angel will bring great value to both passive and active investors looking to learn about the 2023 economy forecast as it pertains to multifamily and real estate. Welcome, Angel. Thank you so much for being on our show.

Thank you for this opportunity.

This will be lots of fun. Let’s dive into things. Please tell us about your background and then your start in real estate.

My husband, Jason, and I both grew up in families that invested in real estate. We bought our first house in 2003. I’m older than him. I was 26. He was 23 or 24. When he was finishing up his doctorate, that became our first rental. The cool thing about that was that we never discussed whether or not we were going to sell it. We started finding people to do the make-ready. We started looking for property management companies because we knew we weren’t going to be staying in Lubbock.

At that point, we knew we were moving to Wichita Falls. We were trying to get that house ready to make it a rental but we never discussed whether or not it would be a rental. It became our first rental. I always think that’s a neat story. I’ve talked to him multiple times about it. I’m like, “Do you remember talking about it?” He’s like, “I don’t.” It was a supernatural progression for that to become our first rental. When we got to Wichita Falls, we got a couple of more singles a couple of years ago that fell in our lap. The reason I said they fell in our lap is it was a $110,000 portfolio. It was two houses, $55,000-ish apiece. We walked away from the title with $17,000 or $18,000.

We do not go out looking for residential anymore but if those deals come back across our plate, we’re probably going to go after them because I like the store of value that a residential property provides for that single loaner. You can do a lot of stuff with those kinds of properties. I know a lot of people that get into multifamily are like, “Get rid of your residential stuff.” I don’t think we ever will because nothing can beat those infinite returns. That was how we got started into that. Here we are now.

 

When did you discover syndications?

It was about 2017 or maybe 2018. Jason had signed us up for an event in Grapevine. Joe Fairless was one of the speakers. We’ve got four children but we had our special needs son in 2010. We got his diagnosis in 2011 that summer. He had a super rare genetic condition. He’s pretty medically needy. One of his therapies is over $100,000 a year on its own.

We knew that doing the single-family slow roll wasn’t going to give us the scale that we needed to be able to cover his medical bills. Our ultimate goal is to make sure that his sisters do not have to worry about his medical needs or his medical costs. They have to love him because our hope is that we will have already created that trust for him that will cover his medical needs when we’re gone. That was what pushed us into the multifamily.

Did you get involved in syndications as a passive investor initially? Did you get right into it trying to be active?

We took the same path a lot of people take. You start at LP and then eventually run out of money. You have to go active side if you want to stay in it. We are LPs in 7 or 8 deals. We went active side in 2021.

Talk to us about that transition to being active. You were investing in real estate for a long time but then you realized that syndication existed. You invested as an LP and then saw the potential returns. Talk to us about that transition to want to be involved on the active side, going from an LP to a GP. How did that come about? Did you join any mentorship and coaching programs? Talk to us about that journey.

We did wind up joining a coaching program. It may have been the guy we met in 2017. We joined his program in 2018. That was the year that we started doing some LP investing. I left teaching in 2020. Jason’s company that he was working for knew that they were going to be transitioning to Houston, and he was not going with them. He had about a year to prepare. He is like, “We’re going to go active side.” We got an SMS blast or a text blast from a broker. It was two properties here in Wichita Falls. I was like, “I’m going to call.”

I had never spoken to a broker before. I called, and he didn’t even know his phone was picked up. I’m like, “Hello.” Finally, this guy is like, “I didn’t know anybody is on the other line.” I’m like, “You picked up.” Most of the time, you will talk to people, and they’re like, “You have to treat brokers like they’re something special. Take them out to eat. Do this. Do that.” There’s something special. They’re special people like everybody else but it was a funny exchange because I was like, “Go ahead and pencil us in. I’ll let you know if it doesn’t work but that should be good for my husband’s lunch hour.”

It was this super weird conversation because how many people are like, “Pencil us in.” When you’re talking to a broker, they’ve got their thing set up. They know who’s coming. They’ve got their due diligence checklists or to-do on the basic first level when you first see a property. I didn’t understand that you were supposed to do any of that. I just knew that Jason was not going to be having a job, and we needed to go active side. That was what I did because it was all I knew how to do.

Let’s break it in a bit more. You made that decision to be involved in the active side. You’ve already invested as an LP in the past, so you know the communications that GPs have. You’ve read PPMs. You see how deals are put together but now you want to get involved on the active side. You’re part of a coaching program and a mentorship program. At what point do you start connecting with brokers? For you to have been on that broker’s list, you must have taken some steps there. There must have been a strategy there.

I just signed up for it.

Maybe in your mentorship program, they told you.

It wasn’t in the mentorship program. It was a Marcus & Millichap deal. I was on one of their lists for secondary or tertiary markets. Wichita Falls is a secondary/tertiary market. That was how I got on it. With the second deal we got, Jason had been building a relationship with that broker. That’s not how we got the deal. The deal was marketed. A bunch of our friends sent it to us because they know this is where we live.

Jason started building that relationship with them. That was how that one worked out. We do it differently than a lot of people. We do not actively go out and seek relationships with brokers. If they happen, they happen. I feel like the universe makes things happen and puts things out there for us. You have to recognize them when they’re there and make it work for you.

The universe makes things happen and puts things out there for us. You just have to recognize them when they're there and make it work for you. Click To Tweet

How big was your first deal?

72 units.

If you had to give a blueprint to someone else who’s invested in real estate in the past and maybe has invested as an LP but wants to get involved on the active side, should they go your route where they leave their job and then get involved on a general partnership side? Are there other roadmaps that they should follow or possibly a co-GP option first, and then get involved as a lead sponsor? What would be your advice, having gone through the steps you went through?

It depends on who’s in your network and how people see you. When people think of you as a teacher, engineer, firefighter, something else, or a different role, you’re probably not going to be as successful in a co-GP position because people don’t see you as a real estate investor first. People need to see that as your primary role for you to be effective in that co-GP position.

Otherwise, try and get on a team doing something else, whether that’s asset management, doing some of the other pieces, putting together the business plan, helping search out the loan, or finding a loan program or a loan product that you’re going to be able to use. Find another way to be a part of a team underwriting somehow.

What is the best way to find a way to be on a team? How would somebody go about doing that?

Do not go up to somebody and say, “How can I help you? How can I be a part of your team? How can I help your team?” You’ve given me another job. I have to figure out what to do with you too. If you’re going to go to somebody, say, “I’m great at asset management. I have great relationships with loan brokers and mezz debt people. I’m great at underwriting. I’m great at this piece. I know property management.” Go in there and tell them what you’re good at because that’s going to weed you out from a whole bunch of other people that are coming.

How do you find them?

You have to go to events and meetups. We’re two hours away from any big metro areas. Most of what I do is online. I do a lot of virtual events. People tell you, “You’re not going to be able to raise capital that way. You’re not going to able to meet people that way,” but it has been super effective for us. You have to go all in with whatever method you choose. You can’t not go in all the way. I can’t think of a good way to say that. It’s going to be dirty if I say it.

Whatever method you choose, you have to go all in with it. Click To Tweet

Let’s go over your process. It seems like you went through the blood, sweat, and tears process doing your first deal as it came. You and your spouse left your job. Talk to us about some difficulties you faced there. Did you syndicate the deal? Did you raise capital from your network? How was that going to people, knowing you as a teacher or a professor, and knowing your husband as a busy professional saying, “We’re buying multifamily. Come and invest with us?” Talk to us about some experiences you had there.

The cool thing about that was everybody knew we had that residential side hustle. We’ve got four houses here in town. People that know us know that we have rentals here. They know we have rentals in other towns. They know we’ve got the oil and gas. We’ve got a quad and a couple of duplexes with Jason’s family properties in Waco. They know we have stuff going on.

I left teaching in February 2020. We got our first deal under contract in August 2021. For eighteen months, people only saw me as a real estate investor. They knew I taught on the side. They knew I had this and that but they saw me as the face of our educational platform and a real estate investor. That was the plus of being in the space for 3 to 4 years before we ever went active side.

The other thing was that a lot of the stress was gone from me because we had replaced my income with our residential real estate way before I ever left teaching. I was teaching because I love teaching but when that environment became too toxic, I had the ability to leave. Replacing Jason’s income was a little bit tougher. The company moved to Houston. He didn’t go with them. That was what propelled us into having to go active side because we needed to be able to take down a bigger piece of the deal.

She prepped her investors. You probably went to your investor and said, “We’re looking. When we have a deal, are you on board?” That made you confident to go into a deal.

There was some of that. Probably 60% or 70% of our investors didn’t care about the deal. They wanted to see us be successful. That goes back to how I’m not always focused on having investor relations or investor relationships but I am always focused on having investor friendships because I want to have friendships with the people that are coming into our deals.

I want to know them. I want to know what they’re looking for and what their families are looking for. Are they experiences, not things? What’s propelling them? If I can know them at that level, I know how to present a deal. I know how to talk to them outside of the deal because you don’t want to be vomiting real estate on them every time you see them.

It’s investor psychology.

We interviewed a lot of people. We know a lot of people in this space who came from other spaces into real estate with no finance or economics background. You do have an economics background. You understand the finance world. I’ve been in online group meetings. When I heard you speak, you sounded very sophisticated. You got my attention. That was the impetus for us even connecting. I enjoyed your knowledge and experience in economics. Maybe we can touch on that a bit.

2022 has been a very interesting year. We have seen inflation getting out of control. We have seen the Fed and other central banks around the world increasing interest rates to battle inflation that has been taking place. They’re increasing interest rates so fast, which is the fastest I believe in history. It’s 300 basis points in a matter of less than a year. Talk to us about what you saw happening in 2022. Give us a recap. Was there anything that shocked you? Was there anything surprising? Was there anything obvious?

You have to back up a little bit more. When the stimulus checks were coming out, people didn’t understand what that was doing to the dollar. They saw it as dollars. I’ll break it down the way I did for some of my classes. At a specific moment in time, your currency or the money supply is worth $100. That is split over 100 equal pieces of currency. If overnight 100 more pieces of currency are created and you have 200 equal pieces of currency, now you’re splitting that $100 that the money supply was worth over 200 pieces instead of 100 pieces. That is half the value of each piece of currency.

That was where inflation was born because it was nothing else it could do. Your quantitative easing, your quantitative tightening, it’s like having your foot on the gas pedal and the brake at the same time. That’s one of the reasons why as we continue to see these rate increases, we’re not seeing this massive slowdown in the inflation rate because you’re doing two things that counter each other at the same time. That’s one issue that we’ve got.

I do think we’re going to slow down. It has been sustained. I don’t care how you change the definition. Every business I go to in my town has a Help Wanted sign. That doesn’t scream the lowest unemployment ever to me. That screams, “We’re still in a situation.” If things were growing, I wouldn’t have a hard time getting eggs at the store, and they sure wouldn’t be $7 a dozen. There is a cooking of the books going on. There’s a different narrative being told than what’s going told.

There are 5 or 6 different ways to determine inflation. You have to be able to look at all six of those because they’re all going to be off and biased a little bit. If you’re looking at CPI only but you’re also not taking into consideration energy prices or food prices, or you’re only picking and choosing out of it, then it’s not giving you any realistic view of what’s going on.

I don’t know what you’ve heard about the Phillips curve and stuff but if the economy is growing, there is a relationship called the Phillips curve that is supposed to hold, which is an inverse relationship between unemployment and inflation. As inflation goes up, unemployment goes down because, in the short run, people don’t see the dollar for what it is. They just see it as another dollar because they’re looking at it in nominal terms and not in real terms. Real terms tell me that $1 is worth $0.50. Nominal terms say it’s worth $1. There’s that disconnect there.

 

It’s important to realize that the Phillips curve isn’t holding. I’m not sure of all the reasons why it’s not holding because there are so many things going on now that we simply don’t have a historical backing for. In the late ’70s and early ’80s, we had stagflation, crazy inflation, and Paul Volcker jacking up that rate full-on percentage points. By 1981, it was 20%. It was outrageous. That was the Federal Funds Rate. It wasn’t until ’85 that we saw any level of single digits. It wasn’t until ’86 that we were back in single digits. We have been in single digits since 1986.

What’s your prediction moving forward?

I have no idea.

Do you think that the Fed will continue raising rates? They have been doing it. They took their foot off the gas pedal a bit. It is still on the gas pedal full-on down but just a bit because it went from 75 basis points to 50 basis points in their last meeting. Do you believe that they will continue doing that? Do you think the interest rates will have an effect on inflation? Do you think the job market is still too strong?

Tech companies have huge layoffs. Salesforce had a huge layoff. Meta and other tech companies are also doing huge layoffs. What is your prediction? Is it going to be a repeat of the history of what happened in the ’80s with Paul Volcker? Do you think the inflation will subside, and what they have done here will take an effect?

We almost have a level of insanity going on. At what point do we realize that doing the same thing over and over again and expecting different results is insanity? It hasn’t worked yet. Why is it going to work next time? Is it the economy correcting itself?

That’s the only tool they have. The only tool that Fed has is to increase rates.

There’s other stuff. The FOMC can also go in there and adjust bonds and stuff too but who’s willing to do anything with bonds? Have you ever read Jekyll Island? It talks about the Fed as this outside agency. It’s not a part of the government. It’s this business. I’ve not had the opportunity to read it yet but it was interesting to hear that because I thought the Fed was part of the government. The reason why the Fed can move the way they move is that monetary policy can be made like that. The fiscal policy takes a long time but they both tend to cause over-corrections.

 

We can pretend that raising the rates is going to be what truly decreases inflation but it’s going to be a regular economic correction that’s going to fix it. There are business cycles. Business cycles are still going to happen. When the government gets involved, it tends to over or under-correct. We wind up in a position that’s beyond or still under where we need to be. It can take a long time to fix things. That’s one of the things that has me concerned about what’s going to happen in 2023 but regardless of where the interest rate goes, you’re going to have to find deals that pencil. You’re going to have to use those higher interest rates. Whether that increases or decreases somebody’s deal flow, I don’t know.

We will get into that. Let’s make a connection between the economy and real estate, particularly multifamily. Let’s start with 2022. In the space, we closed on one deal in early 2022 and then worked on a deal in Arizona for a good five months but every couple of weeks, we were re-underwriting the deal. The interest rates were going hyperbolic throughout the whole time from the time the deal came across our desk to the time the deal collapsed. It took a long time.

Unfortunately, everything fell apart because we went back for a re-trade price reduction and didn’t align with the seller.

We are fiduciary to our investors. The deal still made money. The deal was still a good deal but we didn’t feel comfortable enough. We didn’t have enough cushions there. We went for a retrain price reduction, which we achieved some but not to the number that we were looking at. We have been through it. They were planning to stay on the sideline. The deal was a great deal. That’s why we even jumped on it.

Talk to us about what you saw and any horror stories of groups not purchasing rate caps in 2022 and rate caps maturing. They have to repurchase at a higher amount. I know you have your ear in the space. Are there any horror stories that you heard in 2022, any deals falling apart, or any stories about people losing their deposits? Talk to us about some good juicy stories from 2022.

I was at an event, and Erin Hudson was there. She was talking about how in 2022, they did two deals. The year before that, they did 16 or 17 deals. She talked about the slowdown and the cautionary practices that were taking place. One of the things that we saw is deals weren’t able to fund as easily because investors were holding onto their money. Investors wanted cash.

I didn’t understand because I’m like, “Every day that you hold that cash, it loses more value. You need to put it in something in a hard asset that’s going to at least trend with the inflation,” but I heard of people that had to get multimillion-dollar gap loans to get their deal across the finish line. Those gap loans come with very high costs. Those high costs are ultimately going to show up in the bottom line for the property. I haven’t heard a whole bunch about people with adjusting rates. We were lucky enough to get into a fixed-rate bridge. At the time, we were like, “5.99% is so much.” Now, we’re like, “5.99%? Heck yeah.”

When is that maturing?

We’ve got two more years.

You will hopefully be over this situation. Let’s connect the economy and everything we talked about in 2023. We have our predictions here in-house. I have written a newsletter about my prediction in 2023, both what the economy and real estate will be. It will be featured on our website and LinkedIn shortly. Talk to us about your predictions and plans as a general partner and fiduciary to your investors and partners.

What is your plan for 2023, knowing the dysfunction that exists there with the government and its hand in business and commerce? What is your prediction? Are you sitting on the sideline and looking for opportunistic deals? If a deal comes across your desk, what are the checkboxes it has to check for you to even be interested?

Jason has to say it’s a good deal. I don’t do numbers. That’s a Jason thing.

Jason is your husband.

He’s our underwriter.

Aside from the numbers, are you looking for cashflow from day one? Are you looking for assumable loans? Are you looking for a deal that has value-add?

Assumable loans take forever. We have decided we’re not going to chase agencies probably ever again. We have been looking at bank debt and recourse debt. With our first property, getting a loan product was very difficult. We have decided that we’re not going to go down that road anymore because time is money. It has a cost to us and our investors. I am fearful of stagflation happening in 2023.

Describe what stagflation is.

It’s the worst of both worlds. You’ve got this economic slowdown where the economy is grinding to a stop with inflation that’s going crazy. You’ve got inflation and recession all slammed into one. People are having a hard time dealing because it’s a very difficult situation. I’m looking into our properties and additional streams of income because the idea of continuing to bump rents across the board in that blanket fashion hurts my heart.

Not everybody can afford those kinds of blanket bumps but if you can do things like a Wi-Fi package, covered parking, storage, laundry facility, or vending machine, or take on the vending machines in the property and find some way to get additional income streams without having to do that blanket rent bump, there still will be some. When you have those additional income streams, you allow the people who can afford it to purchase those kinds of items. You’re still providing income to the property but you’re not hurting your residents that can’t afford those kinds of blanket bumps.

I wanted to ask something. In your opinion, are we in a recession?

I think so.

Furthermore, with your economics background, in your opinion, what’s your firm’s acquisition strategy? Are you planning on waiting a couple of quarters before you start buying? Do you feel like there are distressed asset opportunities? Is there going to be more further into 2023?

I don’t think that there’s going to be this huge bubble event that people think is going to happen. Part of that is because when you look back at the late ’70s and early ’80s, there was not the same media involvement and connectivity that we have now. When the Fed comes out and says, “We’re predicting there’s going to be a 0.5% raise in the interest rate,” people begin adjusting to it as soon as they hear it. When it happens, it’s not the shock value.

When Volcker did it, it was a shock value. It was a fixer. It did things immediately because people didn’t expect as much. Some people did but not everybody was connected to the media on that event but now, we’re so connected. We hear so much more than we did. It cuts down on any short-run effects that these kinds of changes would have because people start preparing for them as soon as they hear about them.

 

 

There’s no, “Everybody stop buying. Wait until Q3 or Q4 2023. There are going to be all these incredible buying opportunities.” You’re watching things as you go, and Jason is penciling things out. If it’s a good deal, you’re going to jump on it.

He’s checking things out. He’s putting interest rates of 8%, 9%, or 10%. We’re looking at vacancies of 20% because those are things that we need to take into consideration. When I was teaching middle school, I was teaching at a very high-poverty school. One of the things I saw was that as times got tough, you would have these intergenerational families moving in together. It would be the kids, the grandparents, the great-grandparents, and maybe the cousins. They would all move into one location to save money.

There could be that consolidation of households again during all of this because parts of it are similar to what happened in the early stages of the shutdowns with the pandemic. There’s going to be this combination of households that are able to do that, live comfortably, and hopefully not get caught up in lease violations. That’s how they’re going to share some of those costs. There will be higher levels of vacancy because of the households that are going to start combining.

Thanks for sharing that.

What is your interest rate prediction? Do you think interest rates will come down in 2023?

I don’t think they will go over 10%, hopefully.

Let’s go over Ava’s prediction that there are going to be a lot of groups underwater. Her prediction will come true if the rates go up that high.

I’m thinking of the prime rate. I don’t think prime will go over 10%. Maybe it will. What’s it at now, 7.5%?

How about cap rates? What’s your prediction on cap rates? Do you think cap rates are going to keep increasing? Are they going to stop or decrease? What’s your prediction for later in 2023?

I don’t always look at cap rates because I feel like it’s a given. When you come into a market, you don’t get to determine what it’s going to be. Until you exit, you don’t know what it’s going to be. You’ve got estimations of what it’s going to be but the going-in cap rate is what’s in your market. We’re in a unique market because a lot of places are seeing rent drops, and we’re not seeing rent drops.

The last question on this before we move to the next segment of our show is this. How about as far as inflation? Do you think inflation will start decreasing in 2023? It is decreasing a tiny bit already but do you think it will start coming down significantly in 2023?

Is it going down? Are we being presented with numbers that are giving a different narrative?

What do you think moving forward? Do you think it will come down now that there are going to be job layoffs? It is having somewhat of an effect on the job market.

It depends on how they’re going to affect the real rate versus the nominal rate of the dollar because if we’re truly where they say we are, then our goods are going to become more expensive in the world, and it’s going to have a lot of pressure on us. We’re not going to be able to export as much because they’re already saying our dollar is strong compared to these other currencies. I don’t feel like my dollar is strong. My grocery bill quadrupled. The only time that it goes down is when the market needs to clear because they have had prices so high. Nobody is buying it. I’m constantly looking for those market clears. I wish I could give you a good prediction but there are so many variables.

Are you the investor relation in your group?

I am.

What do you say when an investor asks that question from you? “Angel, do you want me to invest with you my hard-earned money to come and give you $100,000, $150,000, or $200,000? I want to know what is your prediction about where the rates are going to be this year. Is inflation still going to be there? Should I invest with you? What should I do?” What would you say to questions that Ava gets asked on a daily basis?

If you invest in this asset or this property, your investment is going to ebb and flow with the inflation rate. You’re not going to lose out one way or the other as long as you’re invested in something that’s going to continue to move up and down with the inflation rate.

 

 

It’s a tangible asset. Their rents follow inflation in a way.

I can’t say that you’re not going to lose out but the potential for a property going to zero is pretty low. As the dollar becomes less valuable and rents go up because they have to because the dollar is less valuable, then your property value is going to go up because of the way it’s figured from the cap rate. That’s how it plays out. You want your dollar in something that’s going to be increasing in value even if it’s only a nominal increase and not a real increase.

You want something that’s a direct hedge against inflation, and that’s commercial real estate.

 

 

Potentially.

We appreciate it. Thank you for allowing us to put you under the gun. I’m not sure if you allowed us but you were put under the gun. You didn’t have a choice. Let’s move to the next segment of the show, which is more fun. There are more rapid-fire guns pointing at you.

It’s the ten championship rounds to financial freedom. It’s whatever comes top of mind. Here’s the first question. Who was the most influential person in your life?

It’s my grandma.

Are there any cool stories you can share?

My grandmother was born in 1933. She only made it through the eighth grade because she would have to pick cotton with her family every year.

Is this paternal or maternal?

Maternal. My grandmother was Hispanic. Her family was into migratory farming. She would leave the school year and go and help her family pick cotton. She would come back and be far behind. She only made it through eighth grade. She went and got her GED and became a civilian librarian for the Army but prior to that, she met my grandfather.

They got married after knowing each other for two weeks or something. They were together forever. The only thing that split them up was when she passed away. She only had eighth grade and then got a GED. She was a librarian for the Army. My grandfather worked so hard for his C’s. He went into the Army and then wound up getting an associate’s degree. I was seeing them get into real estate.

When I look at these other families and even my husband’s family, his whole family was educated. They got into real estate but they were all educated. They all came from places where investing and doing things with your money was the norm. I looked at my grandparents, and it wasn’t like that. I knew that my grandmother had fought so hard. When she and my grandfather got married, there was a little bit of dissension there because my White grandpa married this Hispanic woman. There was that level going on too. There were so many things that she overcame. She was the biggest influence in my life.

It’s a beautiful story. I’m excited to hear this one. What is the number one book you would recommend?

It doesn’t have to be a real state or economics book. It can be any book influential in your life.

I dropped everything off of my bookshelf.

It’s Positive Intelligence.

It is by Shirzad Chamine. It talks about what are the saboteurs in your brain. Everybody has the judge. We all look at what people are doing, and we’re like, “Why are they doing it that way?” There are these other saboteurs. You take this test that’s also in the book. It helped me understand that I’ve got this super-achiever piece of me. That doesn’t mean I’m a type A. What that means is that I find my value and I see my value in how other people view what I am doing and what I’m doing for others.

All of my values or self-worth are external. That’s the saboteur in my head. When that is coming into my head, I have to say, “I can’t do another year as the PTO treasurer. I can’t do another year as a scoutmaster. I can’t do this.” In my mind, my value comes from what I do for others. An important thing that I learned from the book was that those saboteurs are not true. They’re not real. Your value comes from within, not from outside. That is why it’s my favorite book. It was a real game-changer for me.

Your value comes from what you do and what you do for others. Those saboteurs are not real, and your value comes from within, not from outside. Click To Tweet

Ava is going to give it a read and give me a quick debrief on it over the weekend, possibly.

Next question, if you had the opportunity to travel back in time, what advice would you give your younger self?

I wouldn’t change anything. Are there some things that were reckless and stupid and things I shouldn’t have done? Absolutely, but I wouldn’t be who I am now if I hadn’t gone through those things. Even though they were reckless and stupid, and I’m lucky I made it out to the other side, I still probably wouldn’t change anything because I needed every muscle that I gained along the way to be where I am now.

I like that. Next question, what’s the best investment you’ve ever made?

It’s probably the first house we ever bought because we still have it. There’s $0 of our own in it. It has been infinite returns for over a decade.

What’s the worst investment you’ve ever made? What lessons did you learn from it?

The worst investment I ever made was in a deal with a super big player. It was a bad deal. It wasn’t so much that we lost money on it. It was that we didn’t make anything on it. It’s what we lost with the opportunity cost had we put that money into a deal that was performing. We lost that way. We lost 85% of the investment because we didn’t check this person out better. The deal penciled. This person looks amazing on social media.

You’ve got to vet people out. Having that experience is probably one of the reasons why I focus on reconning someone. It’s fun but it has become important to me because at first, I thought you don’t recon people. When you recon people, it makes you look green and inexperienced but when you don’t recon people, it makes you look foolish. If you want to grow in this space, you have to recon people, vet them out, and make sure you know what’s going on before you get into a deal with somebody.

 

I know exactly what syndicator Angel is talking about because we have had this conversation before. Angel and I get on a call sometimes and jointly vet people. If I have somebody that I’m looking into or if she has she’s somebody looking into, we discuss it, reach out to our network, and see who this person is because the multifamily or the syndication fraternity is very intimate. Stories come across right away.

August always walks out of the room. I’m like, “You were sure on the phone for a long time.” He’s like, “That girl is so smart. She knows everything.” It’s funny. Here we go. Next question, how much would you need in the bank to retire now? What’s your number?

$2 million.

That’s it. We’re going to make that on a couple of deals together, Angel.

You take that $2 million and put it into deals. That creates enough cashflow for you to live at about $100,000 a year or more.

That’s tremendous.

I like that. Smart woman. Next question, if you could have dinner with someone dead or alive, who would it be?

I would like to see my grandma again. It would be cool to show her how far we have come, or maybe Jason’s dad because I always looked up to him as well because he got into real estate investing when Jason was younger. He has a degree in Biology, Microbiology, or Mammalogy. I forget exactly. He does museum studies but he was also very successful in investing. That was all self-taught. I would love to show him where we’re at now too because when he passed away, we did get some of that inheritance. I would love to show him what we have done with it.

Next question, if you weren’t doing what you’re doing, what would you be doing now?

Teaching.

The next question is my favorite one. Book smarts or street smarts?

You have to have a combination. When I first met Jason, I would tell people that he was the smartest dumb person I knew because he had this PhD. I was like, “Don’t you understand what’s going on here? This is what they’re thinking. This is what they’re saying.” We have been together for twenty years. We have shared book smarts and street smarts with each other. We’re much nimbler. There has to be a combination. I don’t think it can be all or nothing.

There are book smarts and street smarts. But there has to be a combination. It can’t be all or nothing. Click To Tweet

We’re looking at the book smart piece of it now too, especially when it comes to formal education. I don’t know if we’re going to push our girls into it. Jason and I both have advanced degrees. Our girls don’t have to go to college to get a career. If they want to go to college for the experience, that’s fine but you don’t have to go there to get a career because you can do what we’re doing and do amazing because we’re making more now than we ever made in our fields of study.

I’m going to step in quickly. It’s funny you say that because August and I never went to college. We both jumped right into our careers.

I went to college. I didn’t finish a degree but I’ve gone to college. I took a bunch of different courses and programs.

We’re thinking if we could go back in time.

Talk about yourself. Don’t be bringing into, “People didn’t go to college and stuff.” I’ve gone to college.

If we could go back in time, we probably would do that because you learn how to learn. You learn how to retain information and all these different things. What’s your opinion about that?

I could take that back to teaching piano. I never taught piano to a child younger than five because when you’re learning piano, you need to be able to remember from piano lesson to piano lesson. If you don’t understand that, you have to remember what you did from this lesson this week to the next week. You can’t learn because you can’t scaffold upon what you’re doing. With the learning-to-learn piece, you have to be able to scaffold upon what you’re learning. If you figure that out in junior high or high school, college is for experience and relationships. If you come out with a degree, that’s great. If you don’t, that doesn’t mean that you didn’t gain any relationships while you were there.

College is for the experience; it's for the relationships. If you come out with a degree, great. If you don't, that doesn't mean that you didn't gain any relationships while you were there. Click To Tweet

Why is book smarts or street smarts your favorite question, Ava?

I love getting people’s opinions probably because I never went to college. It’s the book smarts and being able to read all these books. Some people can read a whole book in a couple of days. For me, it takes a lot longer than that.

A lot of times, we have academics and highly educated people here on our show. Ninety-eight percent of answers have been street smarts. This comes from people who are book smarts.

That is incredible to me because if I could go back in time, I would have been a dermatologist or something like that but that’s not where I ended up.

All of the education in real estate that Jason and I have, he learned from books and podcasts. I learned it from interviewing people and being around it. That’s like formal education but I believe a person can be well-read and well-educated without having to go through a formal educational process like a K-12 or college. You don’t have to do that to be successful in your field unless it’s something required.

You answered the next question but we will go at it again.

If you had $1 million cash and you had to make one investment what would it be?

Is there a length to the investment? Does it have to be for a specific amount of time?

No.

You had $1 million but you had to deploy it now.

It’s not that literal but if you have $1 million liquid cash and you want to make an investment now, what would you invest it in? This is a common question people come up with, “If I hit the lottery. If I had $1 million.” Sometimes a lot of people do have $1 million cash. What should they invest it into? What would you invest it into?

I don’t think it’s the answer you want. It all has to be in one type of investment.

Most of the time.

I would probably put it all into residential multi because I would own those outright and the cashflow from those as long as it’s all rented. It would probably be greater than if I put it into a multifamily as far as the cashflow goes. In the turn, it would be better to be a multifamily.

Would you buy a portfolio of single-family homes?

Portfolio of residential multi of 2, 3, or 4.

It’s smaller multifamily buildings.

That was what my father-in-law did. They were fully paid off. My mother-in-law doesn’t have to worry about what’s going on financially.

To be honest and completely transparent, that’s probably one of my top choices for $1 million cash disposable if I was putting it somewhere. This is awesome. We appreciate your transparency and sharing all your wisdom and knowledge with us. Thanks for coming on. This was a long time coming. I’m glad we got you on the show.

Please, before you leave, tell everybody what’s the best way that they can reach you.

Probably the fastest way to get ahold of me is on LinkedIn. I’m Angel Williams. We also have a Facebook community. It’s The Academy Presents REI Rocks Community. There are about 860 people in there. We’re pretty active there as well.

That’s on Facebook. I want to join that. I’m not sure if I’m part of it.

Thanks, Angel. You’re very knowledgeable. I love it.

Thank you.