Brad Shepherd Real estate professional driving progress by creating an infrastructure of robust operational and financial functions combined with sound corporate strategy. Expertise spans a diverse background in operations, corporate finance, financial planning and analysis, accounting, and investor relations. Resourceful, innovation-focused leader with the ability to recognize needs and develop strategies and processes that provide teams with the critical tools and capabilities to succeed. Experience ranges across numerous real estate sectors including industrial, multifamily, office, retail, and senior housing.
Episode Highlights Here:
Brad:
You know, we’re not out there doing Facebook ads and Google ads, it really is word of mouth type of operation.
Pierce:
But tell me a little bit about how you guys currently operate. What’s the number one secret to capital raising?
Brad:
It’s interesting, especially right now, as the markets have shifted, the, the number one secret, I suppose would be performing well, for the current investors, opens their willingness to introduce us to their friends and their their associates. And so it is a lot of word of mouth. You know, we’re not out there doing Facebook ads and Google ads, it really is word of mouth type of operation. And as you do well, for one individual who is, you know, they’re successful at what they do, whether they’re professional services, lawyers, doctors, small business owners, etc. They know that people like them. So as we do well, for them, they’re telling their friends and their network. And that’s primarily how we grow our business. And then from, because that’s our, my exclusive focus, I’m going my investor database, and then I can take that and put that to use for an operator who, you know, they’re, they’re trying to get their second, third or fourth deal done, you know, we’re tackling generally 150 unit 200 300 400 unit type properties. And that operator might be at a point where they’re maxed out with their friends and family list. And so then we can bring our investor database to them. And that’s all I focus on is making sure these investors are happy. Again, it’s it ends up being a really nice, powerful arrangement.
Pierce:
What happens when they aren’t happy? Like what happens when a deal goes south? How do you manage that?
Brad:
So, you know, I’ve been fortunate enough in that the deals that I’ve raised capital for, they’ve gone well, and it’s interesting right now, the last six months, you know, as the markets have shifted, you’ll we’re trying to set the expectations with our investors that the long the hold periods may be longer, you know, doubling your money in 24 months may not be the norm going forward. But we’re not. But we’re well prepared, you know, we make sure these deals are structured with a lot of good reserves, we stress test them. That said, my first deal, the first deal I went in on as a limited partner, my wife, and I put money in with an operator based out of Dallas, buying a property a couple hours south of Houston. So that put us right on the Gulf Coast. And it went horribly, we were supposed to be in that deal for a year, that was five and a half years ago, and we’re still so you know, I get I get to sit in that investor seat as here’s how a deal has gone wrong. It’s frustrating. Our capital has been locked up. And that one year, we’re still earning our supposedly we’re still earning our accrued preferred returns. But, you know, I could have put that money to make so much better use, you know, how the market has performed in those last five years and other better deals. And so I have experienced it from that side on what I learned from that was, I don’t want new development, I learned how to vet an operator more, I don’t want to be right on a gulf coast that gets hit by hurricanes every few years. Those are all the things that went wrong. The zoning and the permitting that processes that were supposed to be done on that property were done correctly. So again, it’s I learned a lot what not to do, and having that experience as an investor has served me well, as I’m talking to my investors. And so far, so good. You know, so the deals we’ve been in, have done well, and I think that has come from, you know, my my personal experience and learning really how to vet a deal a property in a market?
Pierce:
Yeah, absolutely. So tell me a little bit about how you guys handle. You know, because things happen in deals, right? Like something that’s just totally outside the operator’s control, right? How is the operator handled that and has it made your confidence waver? Or is it strengthen your confidence in the operator? What are some things that operators can do if the deal goes south from from an investor standpoint, right, or syndicator standpoint, that’s like, hey, you need to be doing XY and Z when things go south in order to maintain and save face.
Right? If you’re on that operator, that I was just discussing, I don’t feel like they handle it. Well, the communication has been poor. Well, how I would want an operator to handle it, and how I expect my operators that I partner with to handle things going. Not according to plan, communicate, communicate, communicate, we’re all big boys and girls, we all understand like you said things happen, you know, most people that are investing with us, they’re you know, they have experienced things not going as according to plan. And so if we’re just upfront with them, hey, this is taking longer. Hey, are you are, you know the 300k Abbott’s we need to do these renovations, although you know, the supply chains have been disrupted, we’re all dealing with that right now. Communicate, communicate, communicate. And so that’s one thing we demand from our operator partners is that we’re sending out monthly updates on how that property is going. The the deal that went south for me that, you know, we’re lucky to hear from them once a quarter. And the only thing they do is a live webinar with that, on their time, their scheduled time, and I can hardly ever, you know, we can my wife, and I can hardly ever make that call. And then we don’t get a recording of it afterwards. And so it’s frustrating. And so the communications is huge. And then planning for those things that can go wrong. Of course, these are, you know, we’re buying a building right now in Florida, where they just got hammered by hurricane a couple of weeks ago, right. But that didn’t scare us away, the properties are sustained very little damage, but we know it’s going to be well insured, the proper drainage elements are put in place. And you know, when you’ve got to insure it like that, if you don’t want to be disrupted, your business operations to be disrupted, or the proper insurance, if it does, is not that big of a deal as far as the, you know, the returns or money, property. And so just communicating, you know, here’s the surprises, here’s how we’re handling it. And here’s what you can expect going forward and communicating that on a timely basis that the investors can access in a in a preferred communication channel that works for them for sure is huge.
Brad:
Right? If you’re on that operator, that I was just discussing, I don’t feel like they handle it. Well, the communication has been poor. Well, how I would want an operator to handle it, and how I expect my operators that I partner with to handle things going. Not according to plan, communicate, communicate, communicate, we’re all big boys and girls, we all understand like you said things happen, you know, most people that are investing with us, they’re you know, they have experienced things not going as according to plan. And so if we’re just upfront with them, hey, this is taking longer. Hey, are you are, you know the 300k Abbott’s we need to do these renovations, although you know, the supply chains have been disrupted, we’re all dealing with that right now. Communicate, communicate, communicate. And so that’s one thing we demand from our operator partners is that we’re sending out monthly updates on how that property is going. The the deal that went south for me that, you know, we’re lucky to hear from them once a quarter. And the only thing they do is a live webinar with that, on their time, their scheduled time, and I can hardly ever, you know, we can my wife, and I can hardly ever make that call. And then we don’t get a recording of it afterwards. And so it’s frustrating. And so the communications is huge. And then planning for those things that can go wrong. Of course, these are, you know, we’re buying a building right now in Florida, where they just got hammered by hurricane a couple of weeks ago, right. But that didn’t scare us away, the properties are sustained very little damage, but we know it’s going to be well insured, the proper drainage elements are put in place. And you know, when you’ve got to insure it like that, if you don’t want to be disrupted, your business operations to be disrupted, or the proper insurance, if it does, is not that big of a deal as far as the, you know, the returns or money, property. And so just communicating, you know, here’s the surprises, here’s how we’re handling it. And here’s what you can expect going forward and communicating that on a timely basis that the investors can access in a in a preferred communication channel that works for them for sure is huge.
Pierce:
Awesome. Yeah. I think that’s super good advice for any operator out there right now who’s maybe you know, going through some struggles or whatever right?
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About Brad Shepherd
Brad is a licensed broker/dealer representative who helps retail investors take advantage of the upside of real estate ownership without the management headaches, partnering with experienced operators in the best markets to offer pre-vetted, hassle free investment opportunities.
Brad has been involved in commercial real estate for over 20 years. Along with his own rental portfolio and handful of house flips, his experience includes development and management of retail and hospitality space, and raising capital from both domestic and international investors. He’s been exclusively focused on capital raising for commercial syndications since 2017. Read more about his journey here.
Originally from Utah, after the last 10 years in Austin, Texas, Brad and his young family recently relocated to Boise, ID.
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