Today on the show we are excited to have Tamar Mar of the Marota Group
1. We’d love to hear about your background, where you’re from, and how you became involved in the real estate investing world?
2. Have you been a lender for your entire career? Do you ever plan to quit your day job or do you see it as giving you an advantage as an investor to also work as a lender?
3. At what point in your career did you decide to become an investor yourself?
4. How do you find deals for your own portfolio?
5. Do you follow real estate / tech start up news? If so, which one(s) do you think will have, or already have, the biggest chance to disrupt the RE industry? How about disrupt in lending? Is that coming too? OpenListings, OpenDoor, Loftium?? Redfin? Amazon prediction?
6. What do you invest in yourself and what is the criteria and “rules” you have for your investments?
7. What do you suggest is the best way for a new investor to get started? House hack, rehab, passive income investing or something else?
8. Is a borrower’s income & credit score important in all loan types? How is an investors income/credit factored in if they are buying 2 – 4 units or 5+ units?
9. For new investors listening, when would an investor use hard money vs conventional financing vs portfolio loan vs commercial loan? Please describe each “lane” for us.
10. What is the best loan type for an investor who wants to “house hack”?
11. What do you think of short term rentals as a business model for investors?
12. Who is your favorite portfolio lender and when would an investor need to use a portfolio lender? What is rate/term difference between conventional & portfolio loans?
13. Do you have a favorite commercial lender for 5+ unit multi-family deals?
14. What mistakes do you see investors making in regards to financing their deals?
15. What are your top 3 tax planning tips for investors?
Katie Clark’s toothbrush video
Here’s the podcast transcription if you like to read
Joe Bauer: Welcome to the Seattle Investors Club Podcast we talk about the nuts and bolts of real estate investing. My name is Joe Bauer and I’m here with my cohost Julie Clark. Julie, how you doing today?
Julie Clark: I am good in the hood.
Joe Bauer: Yeah, yeah. What are you up to?
Julie Clark: Me? What do you mean what am I up to? I’m out back over here in Seattle slaving away with all our … we have some flips on the market. We had new construction on the market from one of our wholesale deals. We’ve got a bunch of listings coming on. So, yeah. I’m over here slaving away. What are you doing Joe?
Joe Bauer: Well, I’m hanging out about 400 meters or so from Disneyland.
Julie Clark: Yeah.
Joe Bauer: [inaudible 00:00:59] stop and see Mickey while we’re cruising through the LA area.
Julie Clark: Nice. Did you go in Mickey’s house?
Joe Bauer: We didn’t but we were waiting in line to get a picture with Mickey yesterday and then a cast member came up to us and said that Mickey had to go on a date with Minnie so we didn’t get a picture.
Julie Clark: Oh nice.
Joe Bauer: What’s up with that?
Julie Clark: What’s up with that? Yeah. So, tell us more. You are down and give us a little quick update on the Vantastic Life. Is that what we’re calling it the Vantastic Life?
Joe Bauer: That’s what we’re calling it the Vantastic Life.
Julie Clark: Yeah.
Joe Bauer: Yeah. So, we’re down in LA to start off our trip for a year or so in the van. We had to get one last thing done. We wanted custom legal seat belts in the back. We thought that was important, and unfortunately, we had to come down all the way to LA to do it, but it’s right next to Disneyland so I’m not complaining.
Julie Clark: Right on. Right on. I wouldn’t be complaining. So, you guys are sleeping in the Disneyland parking lot in your van or what?
Joe Bauer: I wish. The van would be nice in the parking lot, but no, the van is getting the seat belts drilled into the side of the body so they will be legal, so people will not fly out of the van if we had an accident which we won’t do anyway, but figured it’d be a good idea. Yeah.
Julie Clark: So, what’s up? So, you’re posting all this stuff. For those of you out there that are travel enthusiasts or like the whole awesome van experience, it’s not just the van. We’re calling it a van. Tell us what it really is.
Joe Bauer: It’s basically a motor home that’s built. A van has been built into a motor home and we actually pretty much have a full gym with us. So, if you guys want to see the craziness, you can go to The Vantastic Life pretty much anywhere on Facebook, Instagram website.
Julie Clark: You know what would be awesome is if you were able to get some photos or videos of you and Mickey Mouse working out of the van. That’d be hilarious but the van is not there I guess because it’s-
Joe Bauer: It’s not. I could tweet at Mickey though and see what he says.
Julie Clark: There you go. There you go. Well, speaking of awesome people, we had an awesome person on the podcast with us today.
Tamar Mar: Yeah.
Julie Clark: Uber impressive. Shout out Tamar Mar. Joe, what do you think?
Joe Bauer: Yeah, yeah, guys. We are excited to have Tamar Mar on the podcast today. Tamar, how are you doing?
Tamar Mar: I’m so good. I have to say I’m trying not to laugh during all of your bantering over here. I was like, “Should I laugh? Should I not laugh?” I giggle an awful lot. So, you all need to be prepared that this will become a giggle session. I’m super pumped to be here with you guys.
Joe Bauer: I think giggling is okay. What do you think Julie?
Julie Clark: Giggling works for me. Giggling or whatever else, there’s all kinds of things that go on here. Buddy is here too so-
Joe Bauer: Yeah, Buddy the dog.
Julie Clark: … [inaudible 00:03:52]. Buddy is our sidekick. So, let’s kick it off.
Joe Bauer: Yeah, yeah.
Julie Clark: Let’s find out more about Tamar Mar. We like to say your name.
Tamar Mar: I like to say my name too. I’ve been married for next month … Well, July 7th will be 17 years that I’ve been married. I cannot believe it. I still laugh every day about my name. It just cracks me up. It’s like, “How could I not take his last name? It’s just the best.”
Julie Clark: I know. I can’t stop myself from … Even though I know it’s like a funny thing like with the Tamar Mar, when I see you, it’s like I can’t stop myself from saying Tamar Mar.
Tamar Mar: I know. Everybody says it. It’s the thing to do so I’m glad you do.
Julie Clark: Yeah.
Tamar Mar: Yeah.
Joe Bauer: Tamar Mar. I’m going to start saying it all the time now too.
Tamar Mar: Thank you.
Joe Bauer: So, Tamar, we’d love to hear more about your background or make sure that everyone listening knows more about you and I’d like to know more in fact as well. So, share with us where are you from, how’d you involved in real estate, all that fun stuff.
Tamar Mar: Totally. I’m a born and raised PNW, pacific northwest gal. I grew up in a super small town called Duvall, Washington.
Joe Bauer: Oh yeah I’m from Woodinville.
Tamar Mar: Yeah. It is Duvall, accent on the do not the vall. I’ll have you all know because everybody is [inaudible 00:05:21]. People who are born and raised and then back when it was actually country, they all call it Duvall. So, yeah born and raised there. I’ve only ever not lived in Washington for five years. Four of those were in Minnesota when I was out there for a career change. Then I lived in Kenya for a while for an exchange program and that was rad. My husband proposed to me when I was in Kenya. He flew out there to visit me and he proposed to me there so that was cool. So, right now if I just look at snapshot of like the last 20 years, a big portion of that was spent in the startup and small business space.
Tamar Mar: I have a super, super passion for startup culture and spent a lot of time with that. In the five years before I left my job a year and a half ago to pursue other things on my own full time, I was an operations executives for a couple of different startup companies, one in Wall Street and one locally. So, I got to this point where I have said … I’ve been helping other small businesses grow for so long and I know I’m really good at it. I can start me own thing. So, I said, “It’s time to be the CEO of my own dreams, not the CEO of somebody else’s dreams.”
Tamar Mar: At that point, I had no idea what I was going to do, but I spent about three months to let my mind be really creative and just pursue some different options. I decided I was going to be a full-time business investor and real estate investor. We have been investing in real estate for over 15 years. In fact, I bought my first house when I was 19, believe it or not, super crazy. I decided to ramp it up to a whole new level. So, like before then, we had been buying houses on auction for the previous four years and turning them into rentals. We had a couple of rentals before then so last year I started a syndication business and that has been going smashingly well. I also bought a fitness company a little over a year ago as well.
Julie Clark: No wonder Joe was attracted automatically to having adding Tamar Mar on the podcast.
Joe Bauer: Heck yeah. Just for a split second, I can’t help myself. What is the fitness business?
Tamar Mar: The fitness business is called The Fitness Shop. It’s a high end specialty fitness equipment retailer in Bellevue, Washington. It’s been in existence for like 40 years throughout the Pacific Northwest. The founder and old owner, he was ready to move on because he was in his 70s. My cousin had lived there … Sorry, not lived there. Well, kind of lived there. Works there for about 13 years and the previous owner presented him with the opportunity to either buy it or it was going to close down.
Tamar Mar: At that point, my cousin wasn’t … he didn’t want to lose his job. It was his lifeline. He really loved that business. He has a passion for fitness. So, he came to me and my husband because we’re the most business savvy people that he has in his life. He said, “Tamar and Bruce, I’d really love it if you guys would partner with me on it.” So, we went in with him as partnerships. I’m not in the day-to-day operations of that business, I’m more on a high level strategy and finance type of thing. I don’t spend a ton of time on it, but I meet with him every week and pump him up. He does all the operation stuff.
Joe Bauer: So cool. So cool.
Tamar Mar: Yeah.
Julie Clark: Is that a brick and mortar store then or-
Tamar Mar: Yeah. It’s a brick and mortar. So, we have a retail showroom and then we also have a commercial sales division. So, we have a rep that goes out and we sell to hospitality apartment complexes, corporate gyms, fire stations, that sort of thing. Universities as well. So, we have a footprint all over the fitness industry in the northwest.
Julie Clark: I’ll say what you said earlier which I … that’s how I know how greater friends we’re going to be because you use the word rad. That’s my word.
Tamar Mar: It’s my number one word besides dude.
Julie Clark: That is my number one word.
Tamar Mar: Yeah, dude and rad. They’re just-
Julie Clark: Oh my God, dude and rad are my words. You want to know what’s crazy on top of this Joe, dude?
Joe Bauer: Uh-hmm (affirmative).
Julie Clark: Hey dude, you want to know what’s crazy and rad on top of this? Tamar has twins.
Tamar Mar: Twins.
Julie Clark: Just like me.
Tamar Mar: I know. We both have twins and they’re almost the same age. I think they’re only like five months apart or something.
Joe Bauer: Whoa!
Julie Clark: God! My twins last name is Mar. No, I’m just kidding.
Tamar Mar: Dude, no it isn’t.
Julie Clark: Yeah, just teasing. Yeah, there’s a lot of … just naturally we here … Sorry guys. We’re just having a chat among friends here. Thanks for all you guys just listening along but a lot of synergies in life and passions between Tamar Mar and Julie and Joe of Seattle Investors Club. So, this is just pure fun for us today. I’m going to get us back on track because we’ve already goofed off and got off the rails here as we normally do, but along those lines maybe we can take a few more minutes off the rails, because checking out, if you guys go to … Is it called the Marota Group? Is that how you pronounce it correctly?
Tamar Mar: Marota Group.
Julie Clark: Marota Group-
Tamar Mar: Yup.
Julie Clark: … which is Tamar’s company. You look at her website, you’ll see that she is quite an adrenaline junkie and even possibly a toothbrush expert. What’s that all about?
Tamar Mar: Well, okay, so I worked for a startup company called Activa. I started there a month after I turned 18. The company had been in existence for only a little bit at that time but it was the makers of had grew Tamara’s company new look at her website you’ll see that she is quite an agenda and challenge the hand and gain and possibly a toothbrush expert what’s that all about okay so I worked for me, even I started their catering and and found a little bit frame makers and furniture to – which is the first rash we were there is growing privately held company in being a failed rapid and I traveled all around the country to lunch products I give presentations in front of hundreds of people sometimes change has for to get me host for Japanese interracial for Sonicare toothbrush which was the first sonic toothbrush.
Tamar Mar: We were there to explode that company to the fastest growing privately held company in America. I ended up being a sales rep for them inside and then outside. I traveled all around the country to launch products, give presentations in front of hundreds of people sometimes at trade shows. Then I was even selected to go to Japan to be the host for a Japanese infomercial for Sonicare toothbrush [inaudible 00:11:37].
Julie Clark: That is hilarious.
Tamar Mar: Yeah.
Julie Clark: I know what I’m going to get you for Christmas.
Tamar Mar: What?
Julie Clark: I’m going to get you a whole toothbrush set up. I don’t know. You already have all that.
Tamar Mar: That was so long ago, but our friends it was the best time of our life and it’s what hooked us on … I actually met my husband there. It’s what hooked us all on startups because still to this day and in fact we were all at a memorial service the other day and the person that passed away was somebody from that company. We all got together and we’re like, “That was the best time of our lives working for that company.” It was all because of a toothbrush.
Julie Clark: Oh wow. Well, you know what, my daughter, Katie Clark has made a toothbrush short movie outside of this. If anybody wants to see it, it is bad ass. It’s rad. Shoot us a message, make a comment down below or maybe Joe, I don’t know, if you can link it to this podcast Katie’s toothbrush movie, speaking of toothbrushes. Yeah, we’re not talking about real estate today guys. Sorry.
Tamar Mar: It’s all about the toothbrush.
Julie Clark: Yeah.
Tamar Mar: They’re checking it out for sure.
Julie Clark: That’s hilarious. Yeah, she made a toothbrush movie and it’s totally awesome. I think you’re going to be surprised. We’ll send it to you and we’ll hook it to this podcast. All right, now I’m really going to get us back on track. So, you have a podcast as well.
Tamar Mar: I do.
Julie Clark: Yeah. Tell us about that and tell us about your investing for life philosophy.
Tamar Mar: Sure. Yeah. The podcast sprung out of a bunch of different things, but my investing for life philosophy first came about and I think it’s a lot of just my personal philosophies of taking care of people around you and making sure that we live the most abundant life possible. Part of it is that when I invest in communities and I invest in apartment buildings primarily, I take a portion of my proceeds and give them back to whatever community that I’m investing in. It just depends on what I want that to be at the time.
Tamar Mar: It could be to improve the trails in the area because I’m a huge nature freak or it could be something that’s related to a community playground or something. I don’t know. That’s part of it but I think also investing in our own lives on a daily. Spending time with ourselves, getting to know ourselves, make sure that we are performing as high as possible and investing in the lives of those people around us and that can be as simple as just listening to somebody talk when they need somebody to listen to them or spending time with somebody and doing something you love together.
Tamar Mar: My podcast has started in December of last year 2017. I forgot what year it was. It just talk about that. So, the whole intentional lifestyle design piece coupled with entrepreneurship and investing and how you can design your own life by doing those sort of things, finding the right business that fits your lifestyle. I’ve been able to curate that life for myself. I like to help other people do the same thing.
Julie Clark: Awesome. So, you guys should listen to Investing For Life just because a lot of people get into real estate biz because they’re looking for freedom, financial freedom and real estate is one way and a means to do that if you do it consistently, correct and with good intentions. Maybe you might … What’s the whole point is the point to be a real estate investor or is the goal financial freedom? Maybe you guys should check into or not, maybe you should check in to Tamar’s podcast, get some tips. Maybe there’s some things that you can free yourself of and get to that freedom faster rather than it just always being all about real estate, right?
Tamar Mar: Yeah.
Julie Clark: No doubt on that.
Joe Bauer: I’m subscribing right now.
Julie Clark: Right on. I’m not talented enough to multitask at the same time while we’re doing it. I’ll do it afterwards.
Tamar Mar: That was so good. It’s just because Joe wasn’t talking at the time.
Julie Clark: It’s because he just went to Disneyland. He’s all hopped up on the goodness right there.
Tamar Mar: Mickey goodness.
Julie Clark: Well, let’s get back. So, today, I want to talk more about syndication. I mean I think that is something that people have interest in. Right now we’re in May of 2018 and buy and hold, cash flow, passive investing is all the rage. People are starting to tire out a little bit on the fix and flip a little bit. It’s hard to find contractors. Even if you can get the projects, trying to have contractors lined up in time to get it done quickly and efficiently is getting tougher and tougher. I think one of the things that I’m interested in educating on going forward here in a big way is really kind of flipping things backwards.
Julie Clark: Everybody is taught to get into wholesaling and flipping and rehabbing. Then later on get into passive investing. I think they should be jumping in to that from the start and understanding and starting with learning all about debt and how different debt structures or what kind of goals they need to reach for themselves in order to qualify for loans to buy passive income from the start rather than wholesaling those off and all that kind of stuff. Super interested I think people are going to be to hear about syndication, because everybody is interested in going for it at least in the circles that we run in, and I think they’ll be interested to hear about how that works, how to set it up and some details you can share with us today.
Julie Clark: So, I’ll just start by saying on real estate investing having the end in mind is important from the start. So, when you plan and underwrite your syndication deals, are you thinking about like a five year hold? You have to have the end in mind before you even get started. So, what does that look like for you on the syndications?
Tamar Mar: Yeah. I never underwrite for five years and the biggest reason why is because we are looming at some sort of top of a cycle right now. I think the worst thing that you can do is plan to sell something when we’re at a stage where we don’t know when it’s going to stat coming back down. Additionally, that means that when you’re investing in apartments, if you have a five year balloon on your notes and you’re stuck where you either have to sell it or refinance and your interest rates go up so much and your cap rates group so much that you cannot rescue yourself from that situation.
Tamar Mar: So, I underwrite everybody for a 10 year hold. It doesn’t mean that I’m going to hold it for 10 years but I consider my role to be an opportunist role. I want to see what opportunities present themselves over the course of that 10 year period. Then I can present those opportunities to my investors if they do come up. Meaning, if I want to refinance the property and cash out some of our equity, if there’s somebody that comes in and gives us an offer we can’t refuse and we decided to sell the property in cash and on our equity, but the 10 year is mostly because typically speaking a real estate cycle lasts around a decade so it could be 8 to 12 years and it depends on where we are in the country. I like to just look out on that horizon and make sure we can survive and thrive for that period of time.
Julie Clark: Sounds good. Sounds perfect. So, when people are interested in everybody is looking to get into buy and hold these days. Yeah, they can buy their single family buy and holds, they may or may not be at the place where they can take down an apartment building, but they might be at a place where they can get involved in a syndication as an investor, what’s the difference between accredited versus non-accredited investor? What does that mean and is one required or is it optional for syndicators? How does that work?
Tamar Mar: So, first of all, we’ll go to accredited versus nonaccredited investors. So, the SEC or whatever governing body like to define accredited investors as individuals making $250,000 annually or married couples making $350,000 filing jointly or a net worth of $1 million or more not including the equity in their primary residence. So, they think that if they have that much income or money, then they’re not going to make stupid decisions which I don’t know if that is really true or not. Then there’s nonaccredited investors or you can call sophisticated investors are another step. There’s no real monetary definition of what a sophisticated investor is but it could include anything like I’ve invested a bunch in the stock market or in gold or bitcoin. I understand the risk reward scenario. So, as a syndicator or a sponsor of a deal, I need to make a decision.
Tamar Mar: Am I going to allow only accredited investors in or accredit and sophisticated investors in? So, usually you wouldn’t allow in somebody like let’s say Uncle Pete who’s 72 and only has about $25,000 to his name and he’s going to invest all $25,000 and he doesn’t have a job. That would not be a smart idea to allow somebody like that in, because I have a fiduciary responsibility to make sure that all these funds are okay. What if he loses everything? That would not be good. So, there are different types of rules from governing bodies namely the Securities and Exchange Commission that tell you what you can do with accredited versus unaccredited and these securities offerings.
Tamar Mar: I won’t go into all the details but there’s like rule 504 and 506(b) and 506(c). It’s probably really boring to you except to me it’s exciting because this is my business. You have rules on if you’re allowed to advertise your offering which is usually a big no-no. Who you’re able to reach out to and the number of investors that you’re allowed to have. So, most offerings that allow sophisticated investors for instance, you can only have up to 35 sophisticated investors in any one offering.
Julie Clark: Right. Can you have a mix of accredited and sophisticated investors on a deal or does that need to be one or the other?
Tamar Mar: You can if you do a 506(b) you can have a mix of the two with a maximum of 35 sophisticated. If you have a 506(c) offering, it’s only accredited investors.
Julie Clark: Okay, 506(c) is accredited. So, have they raised that? It used to be a little bit lower like 200 and 300 instead of 250 to 350 on the accredited.
Tamar Mar: I don’t know but I imagine at some point they did just because of inflation and the power of the dollar.
Julie Clark: Right. Awesome. So, what do you do your deals as? What have you been doing? Are you going with a mix or are you going with one or the other?
Tamar Mar: I’m going with a mix and I think the biggest reason why is when especially if you’re starting to work on these types of projects, I mean I live in a nice area and there’s a bunch of high income earners around me. Up to the point where I started my syndication business, we were only using our own money. So, we were using a strategy where we had a giant line of credit and we were using that to purchase houses and then pay ourselves back. So, I was only started using other people’s money, OPM, in the last year and a half. So, I hadn’t built up my investor base and that’s what I’ve been doing over the last year and a half. So, it doesn’t mean that I necessarily have access to 100 accredited investors but that slowly builds up over time. Additionally, I like to provide opportunities to friends and family who are really excited about real estate investing but maybe not have that status attached to them.
Julie Clark: So, who decides if … So, you’re doing a mix and who decides … Like, do you get checked? Is there like a paperwork you have to keep all the investors accreditation or details about their sophistication in a file or do you have to send something to the SEC? How does that work? Is it your choice to let them in or not or are you monitored on that with the syndication?
Tamar Mar: Well, some of the stuff is very loose. There’s not a lot of definition and it even depends on the attorneys that you speak with because they all have a little bit different … It’s kind of like somebody saying, “What does the Bible mean?” A lot of them have different interpretations of the rules surrounding this, but the most important thing is to keep track of, are these people that I know really well and do I know their background? Meaning like, do I know if they are financially viable? The paperwork that we have to fill out usually comes with the private place memorandum that you put together and the subscription agreement.
Tamar Mar: There is at least in what I’ve done so far a checklist in there that asks a whole bunch of questions to define if they are an accredited or a sophisticated investor and they disclose that information there. So, I do keep that on file. In the type of offering that I do right now for my deals, I don’t have to prove any accreditation status with further inquiries into their financial status meaning like any audits, but there are certain types of offerings out there where the onus is on the sponsor to find out, dig in a little bit more I guess you would say.
Julie Clark: So, for what you’re doing right now, as long as they filled out the paperwork and you know them and you have done your personal due diligence and are comfortable, because we all know you want to be on the up and up anyways and you’re probably going to err on the side of caution anyways, that should do it for you, right?
Tamar Mar: To my understanding, yes and that’s what I feel comfortable with.
Julie Clark: Right. This isn’t legal advice everybody. None of us are lawyers. None of us play lawyers on TV.
Tamar Mar: I’m not a lawyer.
Julie Clark: None of us play lawyers on TV at this time.
Tamar Mar: No.
Julie Clark: Although we just did … I don’t know if I told you, we had a breakfast the other morning. I told you that the casting agency from the million-dollar listing TV show is calling. They want to do a flip show in Seattle. They’ve called us. It’s pretty … So, who knows. If anybody is going to be on TV, it’s probably going to be Joe. That’s what I figure, but it’s going to be about the van.
Tamar Mar: The Vantastic Life.
Joe Bauer: Well, if anybody wants to dig in, we have already been on TV for the van.
Julie Clark: Wow!
Tamar Mar: What?
Julie Clark: What was that?
Joe Bauer: Search for CrossFit Campers under the show car matchmaker and you might find something interesting.
Julie Clark: Whoa!
Tamar Mar: Okay.
Julie Clark: Awesome. Oh my gosh. Well, I feel like I don’t even want to talk about real estate, but I am personally selfishly so interested in syndication. I want to know more.
Joe Bauer: Me too.
Julie Clark: What’s the minimum investment that you require and is there a minimum in general that people have to stick to or is it all up to you? I mean obviously it’s limited if you’re up to the 35 investors on the sophisticated side. So, if you have 10 sophisticated investors, can you have like 30 accredited investors if you’re talking about a bigger project that need that much money or you can do that, right? It’s just the-
Tamar Mar: Yup, I can do unlimited accredited investors. Minimums really depend on the sponsor. The really big dogs that are out there, a lot of them that are in like Texas or other areas in the south, they do usually minimums of 100,000 or more depending on how well established they are. Some people go as low as 25,000. You have to take into consideration that there is a lot of administrative tasks that accompany the amount of investors that you have. Not so much ongoing down the way, but at the beginning, there’s a lot of it that goes into there. Then there’s tax prep and having to provide K1s and all of the investor relations piece.
Tamar Mar: So, for me personally right now, I’m doing 50k for my minimum investments. Then there’s a maximum to consider as well which a lot of people don’t talk about, but the maximum investment is unless somebody wants to sign on the loan is no more than 19.993%. So, if you do 20% or more of the down payment, you are required to sign on the loan. I always disclose that to investors because I do have some that provide $150,000, $200,000 or would like to and I say, “Okay, well for this deal 140 is the maximum or 175.” So, they’ll push that limit as far as they can so they can get in on the deal.
Julie Clark: I think that that is a very important … I want to go beep, beep, honk, honk and highlight what you just said is that in order to not be a guarantor on the loan, you have to stay under 20% ownership of the property. Is that the correct way to say that?
Tamar Mar: I would just change that a tiny bit Julie. So, in order to not sign on the loan, but the type of the loan recourse or not recourse is going to of course determine if you’re a guarantor because a nonrecourse loan means they can’t come after your personal property if something goes awry with the asset. Usually for any loan balances under a million dollars you’re not going to be able to achieve that sort as loan. So, you’d have all full recourse loans. In that case, if somebody is signing on the loan, they can go after your personal assets and the asset that you’re investing in.
Julie Clark: So, even if you’re investing through using an LLC, is a layer of protection or not?
Tamar Mar: Well, yes and no.
Julie Clark: We’re talking legal stuff here.
Tamar Mar: Yeah, we’re talking legal stuff here and that’s too much for me to dig into probably. I mean I understand. I worked with a team of lawyers for four years in New York so I understand a lot of it, but-
Julie Clark: Well, let’s just leave it at that. Let’s say that guys, if you’re interested in becoming a passive investor through a syndication, just know that there is a threshold of this 19.99% that you need to decide whether you want to play above or below that threshold. How about we say it like that?
Tamar Mar: Perfect. Yup.
Julie Clark: Yeah. It has to do with your you’re risking your liability related to the debt on the property, right?
Tamar Mar: Exactly. Yeah.
Julie Clark: Right on. Yeah. That’s actually … so I came up in the ranks. My 16 years of my first start of … when I started getting into real estate was working for a big time local private real estate investment company. I was involved in essentially syndications even though it was all private with our company and not outside investors. Yeah, I’m well aware of that 20% rule there because we’re investing in 200 unit properties and things like that, which are big crazy beast on their own.
Tamar Mar: Yeah they are.
Julie Clark: So, do you use a property management company on your property? Do you self-manage? What do you do on that?
Tamar Mar: I 100% use a property manager. That’s one of the great things about moving from single family to multifamily and I’m not talking about zero to four units or even six units. I’m talking larger apartment complexes. You have the scale that you can work with. So, it’s a lot easier to cover the cost of a property manager. So, my rule is to find the right property manager through a lot of due diligence and then I manage the manager especially if I’m buying underperforming assets or assets that were going to renovate. So, I check in often with them and make sure that our plan is being accomplished and dig into the reporting and all that kind of stuff.
Julie Clark: Does the property management company, I know they get their monthly property management fee which is based off net collected revenue or what does that-
Tamar Mar: Gross collected revenue. Yeah.
Julie Clark: Gross collected revenue.
Tamar Mar: When you have an apartment complex, it includes all revenue. So, it’s not just your rents, if you have RUBS which is ratio utility bill back system, so essentially like utility charges or laundry income or late fees or violations and all that gross revenue.
Julie Clark: So, when I made the mistake of using the word net, I mentioned it is … there’s gross rents which are if 100% of the units were rented and what would be that gross rent number, but there’s then I’ll call it … I don’t know what the net revenue which is your rents plus your vacancy loss plus all your other income, is that what it’s calculated off of?
Tamar Mar: Yeah. I think it depends on the property management company and those are really good things to look through the contract with a fine tooth comb.
Julie Clark: It’s also guys an opportunity for a little value add if there’s an existing property management company on the deal that you’re buying and you can change management companies and change the way the management fee is calculated, right?
Tamar Mar: Yeah.
Julie Clark: That might be a little value add opportunity there. Let’s see, what else do we got here? So, you would be considered the sponsor … Well let me backup for one more question on the property management stuff.
Tamar Mar: Yeah.
Julie Clark: Is the property manager, are they just fee based or do they get a piece of the deal or success fee or any of that stuff?
Tamar Mar: That’s a great question. I have not had any so far have a piece of the deal although sometimes investors do that, because property management companies are a great source of deals. If you think about it, if you’re investing in let’s say a second tier or a third tier community instead of King County metro area which is insane, they’re going to know a lot of the properties that are either that they’re managing or that they want to manage, so they might be the very first people to hear that the owner is getting ready to sell that. So, that’s why I network with property managers as well as a side note there. If they bring something to you, they might get a cut of it or you can negotiate that with them so that if the property managers are owners of their company, then they could take a cut of it and provide you for with a discount for their services.
Julie Clark: Yeah or bonus them upon stabilization and refinance after a value add, stuff like that. I think getting people involved so you can just crank through, I guess it depends on if you’re doing multiple deals in one market or if you’re spreading it all around, it probably makes a difference but just something to think about guys is how you can leverage working with your property manager on your syndication deals or even on your regular old single family investing buy and holds or little smaller properties, right? How can you leverage the relationship of your property management company to benefit so everyone wins? Those guys … Yeah. I don’t think there’s big moneymaking business in property management. I commend and applaud those who have chosen as their career to be in the property management game.
Tamar Mar: It’s a tough business.
Julie Clark: Thankless grind. It is a thankless grind. So, if you can find a good one and cut them in somehow with success fees or things like that, I think that is not a bad idea at all.
Tamar Mar: Something else worth mentioning there too is two things. Number one, if you’re buying any sort of value add property and your property manager is managing the renovations, it’s very likely if the dollar threshold is over a certain amount, that they’ll take a cut of … they’ll charge you maybe like [crosstalk 00:36:22] project.
Julie Clark: Like a construction management fee.
Tamar Mar: Yeah. Then the other thing is that everything in this life is negotiable. So, if you come across a contract and again look through those very, very closely or have your attorney look through them because if you’re getting in a bed so to speak with a property management company sometimes they can hook you in for two years and no optional clauses to get out or they’ll charge you a certain amount of money to get out. Make sure that you’re negotiating in even their fees, the terms, everything. It’s just like negotiating a real estate deal. There’s lots of ways to be creative there.
Julie Clark: That’s right. When you guys are doing your due diligence on buying apartment buildings, maybe it’s different on smaller properties, but once you start working your way up to buying bigger properties, there could be contracts in place that could be just month-to-month or expiring in the first year. That could be anything from a laundry contract with laundry … like if the laundry machines are rented in the laundry rooms. There’s all kinds of value add stuff related to that. There could be just simply like landscaping contracts and things like that in place. That can be renegotiated to be cheaper or somehow benefit the property and the bottom better. All the things you can do without spending a dime just through negotiation should be one of the first things you guys all look at in regards to value add plays on apartment investing, right?
Tamar Mar: Right on.
Julie Clark: Right on Mary Lou. So, as the sponsor on a syndication deal, how do you get paid? Is there like an acquisition fee at the time of purchase or asset management fee? What does that look like?
Tamar Mar: So, there are a number of ways that one can get compensated as a sponsor and just through participating in a syndication as different roles in a general partnership. Let’s just say me, my company, and I don’t have employees. I handle most of it and outsource to subcontractors for some things, but I would receive an acquisition fee for putting the deal together. What people don’t think about is that some of these deals especially if you’re working with a broker on an off market deal, they can take months to put together and sometimes close to a year or longer. It just really depends or it could happen overnight but you have to be thinking about all the time that goes into the relationship building and due diligence and all this stuff.
Julie Clark: Or just finding the deal for God’s sake.
Tamar Mar: Finding the deal, I know. People right now across the United States I follow the multifamily community very heavily. The general is that people are looking at 100 deals to find one good one right now.
Joe Bauer: Wow.
Tamar Mar: One hundred. They’re underwriting that many. They’re making offers on probably 10 of those and maybe they’ll get one. So, it’s a lot of effort. So, anyways, that’s the acquisition fee. By the way, I love that wow from Joe. That was so great. That’s right. I hadn’t heard him talk a while. I wondered if he fell asleep.
Joe Bauer: Nope. I’m just letting the experts talk.
Tamar Mar: He’s saying it out with Mickey. So, then there is an asset management fee as well and that really depend some people charged that, some don’t. I’ll say the acquisition fee usually ranges from 1% to 3%. It’s very standard. When you’re starting out, you don’t charge 3%. You probably charge 1%. You need to build up your credibility.
Julie Clark: Well, I think on the bigger deals for all you big ballers out there going, “Yeah, I’m going to set up a syndication.” I think the larger the project, the lower the percentage fee, right? It’s kind of-
Tamar Mar: Sometimes yes. Sometimes no. I have been in contact with people that are doing $250 million acquisitions and they will still charge a 3% fee but they’re splitting it with a ton of people because they have huge teams. So, it depends and if you can work it into the deal to make it work. So, the asset management fee is based off of usually gross revenues as well just like a property management fee. That ranges usually from 1% to 2 ½% or 1% to 3%. Again, starting out lower when you are beginning is the right thing to do.
Julie Clark: The acquisition fee is based just off the purchase price of the property, is that right?
Tamar Mar: Yes, that is correct. Then the other way … Actually there’s two other ways to get compensated. One of them is a disposition fee which is 1% to 3% when you sell the property. The biggest fees would be that you receive a big chunk of equity when you put a deal together. So, usually that ranges from 20% to 30%. It really depends on how you can work it into the deal. I always underwrite things looking at number one my investors are most important. If they’re not getting the returns that I want them to be blown away with, it’s no use putting the deal together, because I want them to be surprised and pleasantly happy about the returns they’re receiving. I’d rather under promise and over deliver. So, there’s a lot that can be said about conservative underwriting there as well. I usually go in at about 25% equity and that’s very common for a deal.
Julie Clark: Does that mean that you don’t have to put your money and no skin in the game other than your sweat equity or do you actually have to drop cash?
Tamar Mar: Well, for that, that portion of the equity that is no cash exchanged for that. That’s just for my company doing the work. However, it’s usually looked upon better if one invests into the limited partnership as well. So, my husband and I have invested into all the apartments that we’ve done. So, that wouldn’t be considered part of the general partnership. Its that Tamar and Bruce would be then part of the limited partnership in addition with whatever money that we put into that.
Julie Clark: I have access to funds through … at this time right now I work for a Chinese brokerage firm. Those guys obviously lots of investors interested in coming over here, but they are willing to be equity partners and JVs and all kinds of stuff. They definitely require 20% skin in the game by the we’ll call it the sponsor in this case.
Tamar Mar: I think it’s rare for somebody to put 20% skin in the game especially the larger the project is. I also think that usually I would put in the same minimum as everybody else that I would be requiring for my investors. The longer track record you have, the more you can probably fudge with that a little bit. Like if I’ve been doing this for 20 years and I don’t put money into a deal, it’s not … people are going to be like, “It’s okay. She probably has her money tied up in a bunch of other stuff.” You know what I’m saying?
Julie Clark: Yeah.
Tamar Mar: Yeah.
Julie Clark: So, for all you smart cookies and driven folks out there, like I said the buy and hold, the whole passive investing thing is such a hot topic right now. It is a very good time to … I think you probably have to have obviously a certain skill set but I think you also have to have a certain personality to be a syndicator. For me, I think over the course of my career, everybody thought that’s what I was going to do. They just were like … because I come out of this world, I’ve had great successes in the apartment investing world as I was coming up in the real state scene, but I’ll tell you what. I do not have the patience or to deal with it I guess I’d say. So, I’ll just be your partner then Tamar Mar.
Tamar Mar: Tamar Mar, yeah.
Julie Clark: Yeah, because I just don’t have the patience although Joe’s … Wait a minute. Why is Joe sending me all these side texts like, “Be quiet. I’ll do …” No. I mean I’ll do it, yeah. So, Joe does. The good thing for us is that my partner Joe is dialed like that. I’m too scattered for the patience it would take to organize all that.
Tamar Mar: The other thing there is that this takes left brain right brain as well. So, there’s a very analytic side that goes along with analyzing deals, being diligent and going through all the files once you get something under contract to dealing with all the contractors. There’s some very more left brain analytic type stuff that happens. Then if you’re looking at the investor relations and the capital raising side of piece, that is like, “Okay, I have to network like crazy. I need to talk with people.
Tamar Mar: I need to be having anywhere from 3 to 10 meetings a week with potential investors and updating people on what’s happening.” Your personality matters and your communication matters immensely. So, you have to have a nice combination of those things. Luckily, I feel like I have that personality that I like all those things but a lot of people partner on this too. So, you might find a really analytical person with a more outgoing person. So, one does more of the capital raising and investor relations and somebody does the underwriting and the due diligence and those sort of pieces or the day-to-day management of the asset.
Julie Clark: Do you guys think you’ll ever take on a partner as you grow here? Are you open to that or you guys want to stay lean and mean?
Tamar Mar: Well, I think it all depends. I’m always looking for opportunities. There’s something in me that I’m … since I was basically came out of the womb, I love kicking ass by myself. I was never in team sports. I’m always one of those individual sports people. In this business, you have to have a team and how you define that is very loose. So, my team right now includes my attorneys and my brokers and my investors and my property managers and everything else. More recently in my business, I realized that if I wanted to blow up like I wanted to, then I started looking at, “Okay, what are the area that I really want to be focusing on my time on and what do I want to outsource?”
Tamar Mar: So, two of those things that you can outsource to really help grow your business are usually people that help a capital raise and they can get a chunk of the equity by capital raising for you. Then acquisitions, that you’re having an acquisitions team. Then you have somebody in the middle that’s overseeing all of that. So, that’s what I’m doing right now is looking for strategic partnerships that will help me. I’ve been successful so far, but I’ll have to say I was more comfortable with-
Julie Clark: We might fit in that role for you a little bit-
Tamar Mar: Uh huh, I know.
Julie Clark: … [crosstalk 00:47:36] investors club, but I will say one thing is I come out of the same kickass way of life. Just driven to go … whether I’m by myself or in a room, I just go for it just like you. You know what happened to me? Was that I crossed paths with Joe Bauer. I think what happens is when you find the right person, the light will turn on for you and you will be like, “I can’t let this person go.” I love you man.
Tamar Mar: I love you man.
Julie Clark: I love you man. I mean, yeah.
Tamar Mar: Can I tell you something super exciting which my jaw dropped at the other night related to my business?
Julie Clark: Yes, tell us.
Tamar Mar: Okay. So, I just got a deal under contract, a 26 unit deal down in Lakewood which is south of Tacoma and I’m probably going to build eight additional units on it. That’s not the amazing part. The amazing part is I sent out an email to my investor base with preliminary information like, “This is what we’re thinking.” I raised a million dollars in less than 12 hours.
Julie Clark: Nice.
Joe Bauer: Whoa nice.
Tamar Mar: I couldn’t believe it. I was like, “Holy junk, that was amazing.” I felt so pumped because when … I love those sort of things in any business that you’re in. When you’re really fired up about real estate and you find partners that are excited with you, it’s like, “Wow!”
Julie Clark: Well, it gives you the confidence to go for it on the deals. You don’t have to worry about raising the money afterwards necessarily.
Tamar Mar: Yes they can.
Julie Clark: It was nice right there. Probably people start out that way having to raise the money. I mean that’s the whole goal is that you have the investors waiting in the wings.
Tamar Mar: Yup.
Julie Clark: For you to what’s the next one. Here at the end of this podcast, everybody if you’re interested in investing in with Tamar which we think that you guys might want to check out and get a part of or at least be notified out, we’ll give you the hook up on how to do that. So, let me ask you, let’s keep going here. How do you structure then your syndications for the limited partners? Is it straight splits? Is it a waterfall? Tell everybody what waterfall means and whether you do straights or waterfall.
Tamar Mar: Waterfalls hurt my brain so I don’t do them. The real answer is I don’t even know exactly what happens in a waterfall. I know that usually there’s a preferred return. So, first of all, I do a straight equity split. So, my limited partners get let’s just say 75%. I would get 25%. Whatever we start doing cash flow distributions, profit sharing, then we just split it like that. So, if somebody owns 10%, they get 10% of the profits. The other way to set it up is that you can have a preferred return and 8% is really common especially a lot of the larger syndications.
Tamar Mar: So, investors would first receive that preferred return and then any additional profits are split according to whatever waterfall stuff goes on behind there. That can be like if you reach this threshold of profits, we receive this much, they receive this much. If we reach this threshold of profits, then it changes. Usually the sponsor gets more upside, the more … say the more the projections get blown out of the water in a good way, the more that the property is performing well, the sponsor usually would get a larger chunk of those additional profits in a waterfall scenario, but I heard it’s not the best way to describe it.
Julie Clark: Right. You get a preferred return and after it’s refinanced and totally stabilized, then that preferred return changes or something like that.
Tamar Mar: Yeah.
Julie Clark: Yeah. There’s all kinds of ways. That’s a whole another topic. So, what waterfall means guys is that it’s not just a straight split. I guess we’re trying to define what it is, the definition of it and it’s more of a-
Tamar Mar: You have to look in the contracts. Look in the offering memorandum usually of “Okay, what does this really mean?”
Julie Clark: Right. You got to look a little harder. You got to understand the pros and cons on that particular deal on if it’s better for you to do that or not, but I guess as the sponsor you’re the one deciding that from the beginning. You do straight split so we’ll leave it at that for those of you who might be interested in talking to Tamar Mar later.
Tamar Mar: Tamar Mar.
Julie Clark: Yeah. Let’s see. Maybe get your feeling on this. I’ve always been involved in larger deals know anywhere 150 to even 500 unit apartment deals has been deals that I’ve been in before on this. I’ll call them the syndication type deals, but is it fair to say on the value add projects that investors might not see any cash flow for the first while while the property is being repositioned because you’re spending? Is that an accurate statement or is it again just depends each situation is different? I’m used to not getting actually any cash flow until the refinance is over. Then we get the majority of our money back on refinance and have our splits on monthly cash flow after that. Those will be projects with a million to three million dollar rehabs and things like that.
Tamar Mar: Yeah, totally dependent on the deal. I think it is fair to say that if it is a value add deal where rehabs are taking place, if there’s a preferred return in place, I have purchased, paid in other syndications where I get the preferred return from month one. In my deals, I actually write it into my operating agreement that there are no cash flow distributions for the first six months at least because I like to make sure … You can have a plan but then you can go into something and the plan unfold a different way. So, you don’t want to set your investors up to expecting returns immediately on something especially if it a rehab sort of play. So, as an example, an apartment building that I bought about a year ago. We went in. It was 15 units in Spokane. We projected that five of the units would vacate as soon as we raised the rents about $250 a door. We were going to rehab whichever ones moved out.
Tamar Mar: So, those five moved out the first month. The next month, two more moved out. Then the next month, three more moved out. So, it was a crazier scenario in that we were thinking and we could have turned around and re-rented those units right away since we were rehabbing some of the other ones concurrently, but we just decided since we raised the capex at that point and the communication was clear with investors that we would go ahead and rehab all 10 of those units because then we can raise the rents even further and improve the value of the property by improving the net operating income. So, in that scenario, it’s a year before people are receiving returns because we pumped everything back into the building. That we took that building from 825,000 to1.25 million in value in six months because of what we did.
Julie Clark: Nice. Have you ever tried offering the existing tenants a remodeled unit that yes, they’re going to need to move out of their unit but they have first crack at renting a remodel unit? We’ve had some success at that where you get access to their unit by giving them maybe some sort of rent concession on the first month and then move them into a new unit as long as they qualify? I’ve also has success in the past of just raising the rent and not having to rent up to our projected however many hundreds of dollars a month of increase or whatever we’re talking about and they don’t move out. They [inaudible 00:55:38].
Tamar Mar: Yeah.
Julie Clark: That’s crazy. That’s a win right there, right?
Tamar Mar: That is a win. Yeah. I haven’t done that yet but that’s in my back pocket for sure.
Julie Clark: Yeah. Yes, good stuff. It’s fun. If you guys like crossword puzzles, doing a value add project, doing a value add apartment building project, if you’re somebody you’re like, “Huh, maybe I should get …” If you like crossword puzzles, you will like value-added apartment investing because it’s like a crossword puzzle.
Tamar Mar: I’ve never heard that analogy before. This is amazing.
Julie Clark: Yeah. There you go. Awesome. So, let me see what else I got here for you because we are talking long but we’re talking good stuff here today. So, how does the debt work in? We already talked about on the syndication deal that whoever is owning 19.99% or more is going to have to sign on the loan. As a sponsor, if you’re thinking, “Hey, I might want to get into indication.” You got to be ready to sign on the loan, right?
Tamar Mar: Yes, it’s true.
Julie Clark: Right.
Tamar Mar: Yup. I can dig into that a little bit if you want.
Julie Clark: Do that. Let’s dig.
Tamar Mar: Yeah. So, that would be a great thing for you to talk to a commercial lender about. If you haven’t done this before, I know lots of great ones if you want to reach out to me. It’s a total different ballgame in commercial lending than it is in residential lending. It’s actually a lot easier to get a loan because it’s asset based lending, but they also look at the sponsor and especially the first couple of deals. So, if you have no experience whatsoever, you might need to bring on what they call a key principal, somebody who has experience investing in commercial or multifamily properties before. In addition to that, they’re looking at a couple of other things. So, they’re looking at your experience as an investor and not any investor, a multifamily investor. That’s really key. They’re looking at if you’re doing a big value add play, they want to know, “Have you done anything like that before?” because the bank is taking a risk on giving you this loan.
Tamar Mar: They want to look at your net worth and liquidity requirements as well else. So, usually speaking it depends on the lending institution but you need to have the same … your net worth and the balance of the loan. So, let’s say I get a $1 million dollar loan. I need to have a net worth of $1 million or more. If I get a $5 million loan, I need to have a net worth of $5 million or more. Then you have liquidity requirements as well. That just means you need to have some cash available that usually covers nine months or so of your principal and interest payments or a combination of that and operating expenses that the bank determines. Some bank require and some don’t and some have different amounts that they require. So, if you don’t meet those requirements, because that can sound a little bit crazy too for a lot of people wanting to get into that, you can bring on a partner who brings their balance sheet to table so to speak.
Julie Clark: Right.
Tamar Mar: Yeah. They usually call that a key principle. That key principle would receive part of the equity share for just saying, “Hey, you can use my balance sheet.” They might not even be putting anything into the deal themselves. They’re just helping to sign on the loan so you can meet the bank requirements is all.
Julie Clark: Right. Can your stock portfolio count as your liquidity?
Tamar Mar: I’ve heard that your stock portfolio can but your retirement portfolio cannot but it depends on the banks. So, some banks will say, “We’ll count up to 40% of your retirement portfolio because of all the fees that are associated.” Stocks, you can sell those at any time. Usually they’re looking for cash reserves but they’ll take a combination of several different things. It depends.
Julie Clark: Right. So, this is one layer of debt qualification such as your net worth. Like you said, qualifying in that way but also the loan amount is going to be determined not only off the individuals borrowing capacity but also off of what debt service coverage ratios and stuff like that, right?
Tamar Mar: Yup. That service coverage ratio so most banks right now are looking for a DSCR of 1.25 and then they’re valuing it … Let’s say so the loan to value is usually 75% but it depends on the area. So, if you buy in a more rural area, you might have to pay 30% down, but if you’re getting a large balance Fannie Mae or Freddie Mac loan, you could do 80% loan to value depending on the area that it’s in. Those are good questions to ask a lender as well. What is your loan to value that you provide? What DCSR do you require?
Julie Clark: The loan amount is going to be the lesser of 75% loan to value or the 1.25 debt service coverage ratio. What that means guys is that your net operating income on the property needs to be 125%, is that how we say it?
Tamar Mar: Yeah, 125% of your-
Julie Clark: Higher than your loan payment, right?
Tamar Mar: Yup.
Julie Clark: So, if you take your annual mortgage payment times 1.25, that’s what you’re NOI needs to be to qualify for that loan amount. So, you can calculate and back into that all that way. So, there’s a few benchmarks. Those are three, right? The loan to value, the debt service coverage ratio, and your borrowing capacity are the three things that you need to focus on. What I’m telling you guys whether you’re investing in single family or apartments or whatever is my new thought process, somehow we’ve turned into never in my life did it ever did I think that I would be helping to educate anybody about anything, but it’s somehow fallen in our lap that we’re doing that, but I think a big topic going forward is I’m going to be focusing big time on understanding debt. I think that people go out and they start investing or wanting to be investors and they go out of that, “Let me figure out what the deal is.”
Julie Clark: I think it’s better to understand what you can borrow and then back in to finding a deal of what you can qualify for, narrowing your niche. Then on top of that, going back and talking about how important your borrowing capacity is and what a key principle and things like that is, is that … and your borrowing capacity relating back to your experience just like we talk about in flipping and rehabbing guys, partner up. Don’t just start doing all this stuff on your own. Tomorrow has a lot of experience and there’s been in a lot of deals and is not fresh off the boat here. You guys should always focus on partnering up with somebody with more experience from you not only to learn but also to get credit on your portfolio for deals done.
Tamar Mar: Yeah. Also, partnering up can also be investing in somebody else’s syndication. So, I started doing that about a year and a half ago for really, really big deals because I wanted to see how are they putting the deal together, how are they underwriting, what is their marketing package like, how are they doing investor communications, what is their monthly reporting, how practically are they blah, blah, blah, blah. So, I want to do that so I could learn from them by being passive but also seeing what sort of communications they have, but you can also use that in your credibility kit. So, you can say, “Well, I’ve invested in a 500 unit complex in DFW, Texas before.”
Julie Clark: There you go.
Tamar Mar: Yeah.
Julie Clark: That right there another key component of today’s podcast. So, understanding the 20% threshold thing and also understanding how important it is to get some deals in your resume from now. So, you better start thinking about that now so you can set yourself up to be a borrower or yourself in the future. Totally great stuff related to that. So, you’re saying that if somebody is a limited partner in a syndication deal that that would qualify for them when we’re talking about borrower criteria and qualification. Do you think that?
Tamar Mar: I don’t know if that really qualifies you from a borrower standpoint. I think it adds to your credibility a little bit of understanding what this is all about and it gives you more confidence to do it on your own. So, from a confidence standpoint and from understanding what needs to be done, I think that really helps.
Julie Clark: I would ask somebody. I’m curious to know the answer to that question. Maybe you can ask one of your commercial contacts for us and report back to that.
Tamar Mar: I will. I do know though that even if you own just a sliver of the general partnership, that counts. So, let’s say you bring a deal to somebody or you raise capital for somebody or you do something else in the general partnership and let’s say they you like 5% of their 25%, you are … that’s what matters. You’re on the general partnership and that qualifies you more. So, even if you have a tiny sliver in that GP, that banks will look favorably on.
Julie Clark: Right. Nice. Good stuff guys. Exciting. All right. Well, let’s see. Well, that’s all good stuff. Let’s ask something more fun here as we wrap it up.
Tamar Mar: Oh fun.
Julie Clark: Yeah. Let’s-
Tamar Mar: I like fun.
Julie Clark: … [inaudible 01:05:43] fun stuff and then we’ll wrap it up. So, what else do you like investing in besides real estate and businesses? You’re an interesting person. I know you just like bought a beach or something.
Tamar Mar: We did.
Julie Clark: What else do you got? Joe bought a van and retrofitted and tore it all up and now living in it. You bought a beach.
Tamar Mar: I did.
Julie Clark: I don’t know what I’m doing. I’m a little behind. I’m a little behind.
Tamar Mar: Oh man! My favorite thing to invest in is real estate. We’ve done besides single family and multifamily, we’ve bought land. So, we have a lot in Hawaii that we’ve purchased five and a half years ago that we’re going to build our second dream house on in about probably two to three years. Then-
Julie Clark: As long as the lava doesn’t roll that direction.
Tamar Mar: No, it’s not. It’s far away from that. We’re all good there. More recently, we purchased a four acre parcel of land on an island about an hour south of Seattle and its waterfront and we’re building our dream house there. We just met with our builder yesterday for the first time. Just some cool stuff surrounding that. I like investing time in my family most importantly. My family is my favorite and outdoors are my favorite. So, any time I can combine those two things. So, since we bought this four acre parcel, we have like 386 feet of waterfront. So, I own a beach now.
Julie Clark: Awesome. Now you’re [crosstalk 01:07:13].
Tamar Mar: It looks straight out of Mt. Rainier. It’s like the best view in the history of the world. It’s amazing.
Julie Clark: Wow! I can’t wait for the invite.
Tamar Mar: We are having a Marbecue there for all of our Seattle investors and friends.
Julie Clark: A Marbecue.
Tamar Mar: Yeah, we don’t throw barbecues. We throw Marbecues all night.
Julie Clark: What’s your outdoor poison? Are you a hiker? Are you like a skydiver? What are you?
Tamar Mar: I’ve done skydiving before. I mostly love the mountains and the ocean so I do hiking, backpacking, skiing. This summer for my 40th birthday, I’m going to spend like 12 days out in the wilderness at Mt. Rainier. I love boogie boarding so much. I like surfing. I don’t like snorkeling so much but I really, really, really love boogie boarding and I’m kind of good at it.
Julie Clark: Wow! Oh my God!
Tamar Mar: Thank you.
Julie Clark: We might have to have a boogie board off.
Tamar Mar: Yeah. When we’re in Hawaii, we go every year for two weeks at Thanksgiving. My husband is a six foot two Chinese American guy and he turns black. He turns like the color of night from sitting under a palm tree in the shade. It’s crazy. Our kids look like … they look like little Hawaiian kids. I tan really well so I’ll be out boogie boarding in the ocean. There’s all these local kids and they’ll start calling me “Auntie! Auntie! That was a good one you caught there.”
Julie Clark: Nice. Cracks me up. It’s all good. All good. All good. Well, I am inspired. I am inspired to maybe invest with you. I’m also inspired …. I’m back to the pulled pork sandwich Joe. Sorry.
Joe Bauer: Oh no!
Julie Clark: Yeah. I’m inspired to go get a pulled pork sandwich because I’m starving.
Tamar Mar: Oh!
Julie Clark: I’m starving [crosstalk 01:08:59].
Tamar Mar: You should take care of that.
Julie Clark: Yeah, I should take care of that. Yeah. I’m not the one driving around with a gym on the back of my car like Joe.
Tamar Mar: Oh my gosh.
Julie Clark: Yeah, but I am strong enough to do some arm lifts with a pulled pork sandwich.
Tamar Mar: Okay.
Joe Bauer: Nice.
Julie Clark: Yes.
Joe Bauer: Nice.
Tamar Mar: Must be an inside joke that I did not hear before.
Julie Clark: No. I don’t know why but we end these podcasts about 12:30 and for some reason I’m always starving by the end of them. I’m starting to lose track of-
Tamar Mar: What are you going to get for lunch today? Are you really getting a pulled pork sandwich?
Julie Clark: I just might be. I’ll let you know. I’ll put it in the comments of the podcast. How about that?
Joe Bauer: Perfect.
Tamar Mar: You need to let us all know. We’re going to be curious now. My mouth is watering.
Julie Clark: I know.
Joe Bauer: Uh-hmm (affirmative). Now I want one.
Julie Clark: Good stuff.
Tamar Mar: What are you eating for lunch today Joe?
Joe Bauer: You don’t want to know. We still meal prep even though we’re on the road. So, we have a Tupperware full of, let’s see, it’s a salad with-
Tamar Mar: Chicken and broccoli?
Joe Bauer: I think it’s ground turkey and some vegetables with some sort of dressing on it.
Julie Clark: How do you do that on the road? Do you have a big freezer?
Joe Bauer: We have a pretty good size … it’s like half the size of a normal refrigerator. Then we have a stove top and a sink. Get this, when we were doing our battery, we had them make sure that we could use an instant pot so we could manage an instant pot. So, we cook a lot of our stuff in an instant pot and then throw it all on the fridge for the week.
Julie Clark: Whoa!
Joe Bauer: Yeah.
Julie Clark: Always planning ahead that Joe Bauer.
Tamar Mar: [inaudible 01:10:41] Bauer.
Joe Bauer: If you all don’t have an instant pot, you should get one. They’re great.
Tamar Mar: I need to get one then.
Julie Clark: My God!
Joe Bauer: It’s like a crock pot on steroids.
Julie Clark: I think I’m going to go get an instant pot instead of a pulled pork sandwich. That sounds-
Tamar Mar: You’re going to be way too starving by then. That’d be like 4:00 before you ate lunch. You’ll get hangry.
Joe Bauer: Yeah, although instant pots cook really fast. That’s the cool thing about them.
Tamar Mar: Hopefully if they’re called an intent pot.
Joe Bauer: Heck yeah. I think we did our last meal prep in 10 minutes for the cooking of the meat.
Tamar Mar: What?
Joe Bauer: Yeah. So, you could do like a whole week of pulled pork Julie. That’ll be cool.
Julie Clark: Oh my God! I could.
Tamar Mar: Might change your life.
Julie Clark: That might change my life. Well let’s … Tamar tell us, Tamar Mar, tell us how … if people are interested in learning more about what you’re doing, your podcast or want to get on maybe and learn about some of the investment offerings, however that works, however they can find out about that from you, what can they do? Tell us where they can go.
Tamar Mar: Yeah. They can certainly visit my website at marotagroup.com which is M-A-R-O-T-A group. Then I also have my podcast investingforlifepodcast.com. I have a contact form on my website. I’m required to build relationships with people before they invest with me which is a good thing because I really like people and I love talking. So, if you want to talk more about it-
Julie Clark: And you got a beach, how hard is that?
Tamar Mar: I know.
Julie Clark: You can expect to get people to visit with. Geez.
Tamar Mar: Yeah. So, hit me up and I’d love to talk to you more.
Julie Clark: Good stuff.
Joe Bauer: Awesome. Love it.
Julie Clark: I think that’s wrapping it up for today. Awesome Tamar. Thanks-
Tamar Mar: Neat.
Julie Clark: … for coming on.
Tamar Mar: This has been the best podcast interview in the history of time. Thank you so much Julian and Joe.
Joe Bauer: We loved having you. If anybody wants to check out the show notes, they can do so at seattleinvestorsclub.com/34. Did I mention that we love five star reviews on iTunes? So, if you guys would like to give us one, you can go to seattleinvestorsclub.com/itunes.
Tamar Mar: I’ll be giving you one for sure.
Joe Bauer: High five.
Julie Clark: High five everybody.
Tamar Mar: Bye!
Julie Clark: All right, Tamar, can’t wait to hang out and we’ll see you soon.
Joe Bauer: Bye guys.
Tamar Mar: Sounds good. Thanks guys.
Joe Bauer: See you.