Categories: Podcast

104 – From Soccer Player to Multifamily Syndicator with Dan Kennedy

Synopsis

Dan used to be a professional soccer player with the LA Galaxies and is now the co-founder of Driven capital partners, a real estate investment company focused on Multifamily investments. We had his partner Matt Shamus on the show back in episode 48. In this episode, Dan will share his story of how he went from a pro soccer player to a full-time real estate investor.

Key points

Prepare for the future early. Dan knew that his job as a professional soccer player was limited, so he had to figure out a long term solution quickly. The risk of investing in multifamily assets and development is all in the execution of the construction. You need to be creative to find the true value of the property. If you want to be a syndicator, it’s better to start as a passive investor first so that you know how to be a good operator. Finally, if you want to be successful in this business, you need to go in it full-time.

A Unique Start

To start this episode, Dan shares how unique his background is as one who is now in the real estate business. He started as a professional soccer player. He had read Rich Dad, Poor Dad as an undergrad and thought of venturing into the real estate scene when his career in soccer is over. True enough, he started buying single-family homes after the recession and now also owns a multifamily syndication company.

Realizations Leading To Multifamily Syndication

When he bought properties in California and Texas, Dan realized that this investing in real estate requires a certain legwork from him. His career choice in real estate evolved over time until he came to his first syndication deal. This time it was all passive and saw it as the easiest investment he ever made and has one of the greatest rates of return for his capital.

His Perspective Going In To Investing

People usually think of coming to real estate investing because they don’t like their jobs anymore. Not so for Dan. His thinking is he wants to be in real estate investing because the career span in soccer is short. He wants to be prepared should his retirement comes.

Buying Criteria

Dan shares his criteria when choosing properties to invest in. He enumerates a low cap rate and value-add component on the top of the list. Class C product types but in a class A location is certainly more preferable. He also looks at proof of market rents within the neighboring area within a quarter-mile as well as economic growth to evaluate future yields.

On The Importance Of Relationships

Dan’s syndication company, Driven Capital Partners, take pride in the competitive advantage that they have based on relationships that they have to get access to deals. These relationships that they have created allow them to see opportunities before it comes to the market. Specifically, they utilize relationships with brokers. For Dan, they won’t rush in investing in other locations especially if they don’t have relationships built in those markets.

Utilizing Policies

Driven Capital Partners use the California State Density bonus to increase the density of a building by as much as 35%. Dan also explains another policy where a value-add investor has “just cause” to remove the tenants if your property’s in need of great repair. If you have just cause to remove tenants, you should include relocation fees in your acquisition cost.

How To Be Taken Seriously As A Newbie

Again, relationships are very helpful for Dan and his company to be taken seriously when they were just starting. Dan recounts how they became persuasive through partnerships and by going in with expert operators with expertise in a market. He offered the advice to first be a partner in deals if you are starting out. Moreover, you can go to these markets yourself and present yourself as an expert in other markets. It’s all about telling your story, what you want to achieve, and eventually building trust.

Tips For Those Starting Out

As someone whose career in real estate investing has evolved over time, Dan’s advice for people without any experience is to start as a passive investor. This way you can access all the documents and information that you need. You can also underwrite deals on your own. He also advises being familiar with the standard of doing business and communication as this will give you confidence going into the investing space. Also, you should learn how to differentiate yourself with other investors so you stand out in front of brokers. You want them to remember you and be a preferred investor to whom they can bring their deals.