Closing Deals to Reach Financial Freedom, with Jordan Madewell | Real Estate to Freedom Podcast #5

About Jordan:

Jordan Madewell is an experienced builder that is into not only multifamily, but also commercial retail. He also has aspirations of getting into self-storage and building his portfolio. In this episode, he will tell us how he and his business partner started closing deals in 2016, and how he plans to complete his goal of 100 units. He will also tell us about his other real estate ventures, building vs buying, and offer some good advice for all real estate entrepreneurs.

Contact him: www.madewellinvestments.com

email

Automated Transcripts:

Hey, thanks for having me today.

Yeah, great! Maybe you can give us a brief introduction before we get going here.

Well, I am in Lubbock, Texas and I'm a fairly new real estate investor, been doing it for three years. I'm trying to replace my day job income over time and we have done that for single family, duplexes and we have started an investment fund that buys commercial net lease real estate. We have a small 23-unit for a multifamily apartment complex and so we kind of have a couple of different asset classes. And we own a construction company and so we do fix-and-flips and fix-and-holds and my day job also supports the real estate business too. So that's kind of us in a nutshell.

Nice. So now maybe you could tell, tell us a little bit about how you got started, like what made that decision to actually kick this thing off?

Nice. It's interesting that you're working on so many different businesses at the same time. So, how did you get started?

Well, we got started when we moved out of our house that we were currently living in. My wife and I, kept it as a rental and then moved into another one and that kind of got the bug, the itch going, if you will. About six months later, we ended up buying another property and we joke that on the way home from that house that we closed on, the second house, that we thought, man, for all the work and effort and time and energy that went into this little single family, we could be doing much bigger projects for the same effort and so, that's what started my education and research and talking to different people and learning about multi-family and commercial real estate in general. Within a year we had purchased our 23 unit apartment complex.

Wow. Now would you say that that was a very scary type of scenario or like how did you find it? How did you decide that that was the right deal for you? -------> OK, so, how was your transition into multifamily, how did you decide that was the right deal for you?

It was in a town that I had grown up in and it's next to a small university, so I knew the property really well, so I guess it was kind of a little inside track, but I knew the construction, I knew the year, I knew what the rents were, I knew what that market could support, and when we offered on the project, we got it for a pretty good deal. So all that stuff was not overall concerns or news. A little nerve-racking trying to offer and go under contract on a deal before I had raised the money, but I ended up partnering with a couple of guys that have thousands of units under their belt. And they obviously have a lot of credibility, a lot of track record and a lot of, a lot larger investor database. And so they helped us secure that deal.

So did that feel actually need to get any type of renovation or anything else like that or that was just basically a turnkey type of deal? ----> Nice. Tell us what happened after you got that, your first multifamily deal. Did it need any type of renovation or anything else like that or that was just basically a turnkey type of deal?

It was fairly turnkey. There are some minor, just cosmetic things here and there, you know, re-striping the parking lot, cleaning up the landscaping... switching out some lighting. I wouldn't call it a rehab but we did do a little bit of a what we call just put some lipstick on it.

Nice, good, good, good. Now maybe tell us a little bit about your most complex deal, like something that's kind of hairy and just a little rough and, and what did you do with that one?

Probably our most difficult deal is the one I'm currently working on and it's a small development where we bought some land and we're going through developing the land and bringing utilities to it and really taking all the way from engineering all the way through to construction and more purchase. We're building a six-unit multifamily townhome on it from the ground up and then we'll lease it up after that. And so that's been by far the most tedious and difficult because it's a lot of cash up front. We have to pay and it'll be a year before we see any return on that. And a lot of meetings, a lot of city council stuff. So that one's been difficult but it'll pay off in the long run. It's just a lot of heartburn and headache in the meantime.

I can imagine. Now with that money you mentioned, is that your own cash, investor funds...