We discuss current and future trends, tools, and tech that can help investors succeed, as well as the best practices we can use to avoid pitfalls. If you've been wondering how to choose and evaluate a deal, and what needs to happen next, you'll find the answers in this episode. Tobin also shares everything that Mynd can do for new investors, from sourcing a deal to doing property management.
00:15 - Tobin’s background in single-family real estate space.
05:09 - How to look at numbers and data when making a decision.
07:07 - The most notable real estate trends of 2020, whether they are here to stay.
12:59 - The range of services that Mynd provides to investors.
16:31 - The three biggest trends in 2021 and going forward.
21:56 - What are the best ways for investors to take advantage of new trends.
Steve Rozenberg 00:31
Ladies and gentlemen, welcome to another episode of The Myndful Investor Podcast Show. I'm your host, Steve Rozenberg, and I'm head of investor education at Mynd Property Management. And today, we're going to do a little deep dive on the investor perspective of what you should be looking for. What does a deal look like? Why should you or maybe why should you not purchase a deal? And we're gonna do a little internal conversation with someone that actually works at Mynd and has a lot of background information. Now, the whole reason we have this show is that there are a lot of investors out there, myself included, they're always trying to figure out, what is the next best thing? What are some things that can trip us up in the industry? Where's technology going? Because as we know, it's moving very, very fast. And what tools are out there to help us succeed? And what are some tools out there that will help us avoid some pitfalls? So today, we have Tobin, who is our Director of Operations at Mynd. And we're going to talk to him about all the things that Mynd is doing helping investors and all the technology that exists that you may not even know is available to you as an investor that you should know. So, Tobin, first of all, thank you so much for being here today with me.
Tobin Brinker 01:48
Yeah, absolutely. Steve, excited to be here. You know, always enjoy talking about real estate investing and sharing everything we've learned here. So this is really exciting for me.
Steve Rozenberg 01:57
Yeah, it's right in your wheelhouse, right, with tech and numbers and data. Right?
Tobin Brinker 02:01
Absolutely. All those three.
Steve Rozenberg 02:04
Well, tell us a little bit about just your background in real estate and technology, and kind of what got you to this point, being the director of ops at Mynd.
Tobin Brinker 02:13
Yeah, for sure. So, you know, I got my start back in around 2008, 2010, right, a kind of a big last downturn, I was just coming out of college, and I was in real estate on my real estate license. And I was kind of looking at what opportunities are out there in real estate and, and in the early stages, you know, there was a huge price drop right with that market crash. And I partnered up with some people who were a real estate investment company, and a real opportunistic shop. They were doing commercial and multifamily and raw land and all types of real estate. But they hadn't really done SFR investing now, but they had noticed there's a big opportunity in the SFR space where single-family homes prices had dropped, you're really stuck real sharply, real steeply in a short amount of time. So the opportunity was identified there to go and build an infrastructure to buy a whole bunch of single-family homes. And do it like a trade where we capture price recovery over a short period of time. So you know, this group and myself, we went out there we started buying homes at foreclosure auctions buying homes individually off the MLS, just anywhere, we could get our hands on single-family homes, because we had felt that the prices were so far below the long term value of them. So we built this, this system and its operations to go ahead and invest in a whole bunch of properties. We raised investment funds, and did it as kind of like a pooled investment where we would just raise capital, and then we would do all the operations and invest in ourselves. And then our, our investors, our shareholders would own, you know, just a pro-rata share of a fund. So we did that for several years, you know, bought hundreds of homes, you know, and it turned out really well, you know, the prices recovered after a few years, I spent about five years all together there from start to finish. And that was kind of the pioneering time of single-family rental investment. So we learned on the fly, we tried every which way, kind of learning, and dialed in the processes. And then after about five years, I had seen an opportunity with a company called Home Union, which was in this SFR space and really a tech company. And they were trying to compile a platform with all this data and to enable individuals to buy individual investment properties, single-family homes, with institutional type data. So I thought it was just a really great opportunity. It was very similar to the model I've been working on before but it was really empowering individuals to buy individual properties instead of investing in a fund and in doing, you know, a fun style investment or private equity style investment. So it was kind of a phenomenon that wasn't really out there. Like single-family investing, particularly in remote locations wasn't really accessible for individuals. It was accessible for institutions because they had all the data and the teams and the processes and the systems, but individuals were pretty much restricted to stuff that was within 10 or 20 miles of their home, stuff that they knew intimately and didn't need any support on. So that opportunity was exciting for me. And that's why I kind of shifted into that space.
Steve Rozenberg 05:09
So let me ask you this, I know the answer, and I'm pretty sure how you feel about it. But I just want the listeners to know, how relevant is data and numbers, when it comes to buying single-family properties, in your opinion.
Tobin Brinker 05:23
I mean, it's extremely relevant, you know, data and numbers, it's really the fundamentals behind it, what the returns are going to be, you know, real estate is tough, because it's a real noisy investment. There's a whole bunch of signals, a whole bunch of rentals on the market, you know, property condition, judgment calls, you know, it's just a real noisy space in general, but you got to boil it down to the data. And the data really will dictate whether or not the investments going to perform to the returns that you're trying to achieve. So without that data, you're kind of flying blind. And it's just a huge risk.
Steve Rozenberg 05:57
Yeah, I always, I always profess and say that the data is telling you a story. It's up to you whether or not you're paying attention to that story. And making sure that that story and the numbers align with your strategy and your goal. Sometimes we choose to ignore certain numbers and stretch other ones, to make them match our own personal story. And normally, the numbers will always come back and prove to be right with what they think the numbers are. And I've always learned every time I've tried to manipulate numbers or make them do what I want them to do, it always has a way of coming back and telling me that that is not the way you invest. And the numbers actually dictate, it's a mathematical equation, what it boils down to, is what real estate investing is? Well, let me ask you what you've obviously seen ups downs trends, you've seen sideways real estate. We know 2020 was just this bundle of Wow. That's all I could say. Um, what would you say? If you were to look back now in 2020? What do you think some of the most notable trends were regarding 2020? And some things that you see the kind of coming into 2021 that you feel are relevant and worth speaking about?
Tobin Brinker 07:07
Yeah, great question. I mean, it was a crazy year and all aspects and it was a lot of new dynamics coming into play. But um, you know, one thing that that stayed true for pretty much the whole year was really tight supply. Like there was just a low amount of properties for sale, on the market, low inventory in most areas, which, you know, leads to high competition and high demand. So, you know, anyone that's trying to acquire, you know, an on-market property like MLS listed or otherwise, you know, it's really facing competition. So you had to be willing to pay at least the above list, you'll be really aggressive with your offers. So that was one thing that remained true for pretty much the entire year. And a lot of that was spurred by low-interest rates, you know, that is not, you know, new, just this last year, we've had low-interest rates for quite a number of years now, but they did really hit, you know, very low points this year. And there's just so low that that's a huge driver of demand. Homebuyers and investors alike, homebuyers use the low-interest rates to keep their monthly payments low and be able to buy your home that may be cost a little bit higher than they were used to buy in the past. And for investors, you can lock in a low monthly payment so that your cash flow and for a long period of time, it's just, you know, that was the hugest driver, in my part was the low-interest rates.
Steve Rozenberg 08:28
Let me ask you, how much do you think emotions have played into this? You know, 2020? I mean, I think it's almost like everybody's waiting for something to happen. So it to me, it almost seems like there's a bit of panic buying going on, just because people don't know so they're trying to hurry they see someone else buying so they're thinking maybe they should buy. Do you think that's playing a part in the fact that so many people are paying above-market ask for properties?
Tobin Brinker 08:58
Um, yeah, I think that that does play a little bit of a role here. You know, people, homebuyers, especially not so many investors, but homebuyers, which are, you know, affecting the market pretty significantly, they do have a mindset of, you know, I gotta buy it now, while I can, you know, as the prices are going up, more people are getting priced out, it's harder for people to buy homes in a lot of areas, with the interest rates low that's kind of empowering them to go ahead and make the leap and be able to afford the monthly payments and qualify for the right loan amount. So you know, people do have that mindset that I gotta go lock this in. I gotta buy it now before I lose this low-interest rate. Yeah.
Steve Rozenberg 09:34
Yeah. And I think also investors are basically competing with homebuyers that are going to live in the properties, which I'm sure is affecting listings as well as days on market for properties. Because before you may just be dealing with other investors and battling that out and now, the other variable, I think was always there, but I think it's more prevalent now because of the low-interest rate. Do you agree with that?
Tobin Brinker 09:56
Yeah, I would definitely agree with that. And you know, and investors are becoming, you know, bigger players in this game, you know, each and every year, it was just the processes wasn’t in place. And people weren't set up to do this at the last downturn. They rode that wave. And it was kind of viewed as a trade for a number of years. But now it's viewed as an ongoing evergreen industry, single-family investments here to stay in every market, any market, not just a downturn, not just fixing flippers or anything like that, this is a here and institutions are really kind of putting their money where their mouth is, and they're getting ready to unleash a large number of investments right now. And it's, you know, it's here to stay, there's going to be demand from investors that it's significantly increasing over the years to come in this space.
Steve Rozenberg 10:40
Yeah, I think also, you know, you take a company like Mynd, you know, we're in over 20 markets nationally. So I think what you look at is now you can scale, you don't just have to purchase a property in the Bay Area, or Southern California, and have to go to work with another company in another city in another market and figure out the nuances and understand, when you get the scalability of the technology, it you know, it truly does make the world smaller. And you can be an investor and own properties in five different states, and still have the same system, same property managers, same everything. So I think, ease of use, I guess technology in that regard has definitely, I would say has helped the ability for someone living in the Bay Area that it doesn't make sense to maybe for them to purchase a rental there based on their strategies or goals. Now they can buy something and maybe you know, North Carolina, Texas, other markets. So I think that's where technology is coming in to make that a play. What do you think as far as some trends that you've seen coming into the new year, and anything that you see rolling into January already, or any premonitions I guess I'd say?
Tobin Brinker 11:46
Yeah, I think the big one that kind of comes to mind when asked that question is work from home, you know, work from home as a real big lifestyle change that everyone's been experiencing for the last six, seven months, it's continuing into January, and the New Year, like Coronavirus, is still here, it hasn't, you know, magically disappeared. It's really changing how people behave, people are moving out of big city centers, you know, small apartments, high rises, they're kind of flowing out of that into suburbs, places where they get a little bit more space, a little more comfortable working from home. So that is a big trend in the Bay Area, you know, the rental demand and the pricing is, has seen a drop, but areas like Texas, and Georgia and North Carolina and other areas where people are a little bit more spaced out, and they get a little bit more comfortable living situations. And in the suburbs, not quite the city centers, they're seeing, you know, kind of pop there. And I think that's a big, big opportunity and a big trend, if you can, you know, find the right place to invest in those types of regions. I think that work from home is here to stay, companies have kind of committed to that in a lot of cases where they're giving up office space, and maybe not planning to bring everybody back into the office and letting people permanently work remote. So that's a big trend. I think that's out there.
Steve Rozenberg 12:59
I think also we're going to see a lot of migration from the multifamily world that people living in multifamily that need the space, they need the office, they need the AU unit, going to a house, I think you're going to see that as well, where I don't know what you've seen on the trends, but I'm assuming we are going to see a dip in multifamily occupancy rates is my guess, only because people need more room, they need more space, where before maybe they didn't need it because they were working all the time. Well, now they're still working all the time, but they're just doing it from home. So now they're kind of saying, okay, we need to go out and get a bigger house, more square footage so that we can all work from home, kids can go to school, all the other things, interest rates are low, this is the time to do it. What would you say? How does Mynd approach helping investors with the new year and all the opportunities and everything that you see? I mean, I know you're always deep-diving into numbers and data and working on new things for investors. What is Mynd investor services doing to help that?
Tobin Brinker 13:59
Yeah, great question. Kind of repetitive, but I think that the number one thing we're doing is we're providing best in class data and underwriting on our platform in a way that users can, you know, search on their own, quickly find the best investment properties, leverage our various markets, we're in 20 or 25 markets across the US. So we're really empowering the investors through our platform to go ahead and pick the right investment that matches their investment goals. And yet, we're just extremely committed to that data and the underwriting fees so that you're really getting accurate information and you are empowered with the right, the right data to make the correct decision. So that's first and foremost. Second, we have an end to end solution. Like we're big on trying to provide every piece of the puzzle for investors, they can come to us as a one-stop shop, we can help them identify the property, we can help them acquire it, we can manage it for them. We can provide insurance on a master insurance policy that we have, we could finance it through a mortgage division that we have. So we have all the pieces of the investment puzzles, housed under one shop here. So you can have a single point of contact, go through everything without having to, you know, quote things out and piecemeal it together and rely on multiple vendors to kind of help you along the way, we're set up to do everything.
Steve Rozenberg 15:17
And I'm assuming this is in all regions that that Mynd operates not just on the West Coast or East Coast, correct?
Tobin Brinker 15:24
Yeah, we're in all regions for almost all that stuff. So that alone licensing, there are a few states where we're in process of getting it where we don't have it all up and running yet, but for the most part, it's across the board and all those regions.
Steve Rozenberg 15:37
And just to be clear, this is not just for Mynd customers, these are people that are not even customers of mind, yet, they can come to Mynd investor services, and they can find a property and go through this whole process. So it’s not offered, it's not exclusive to just customers of Mynd, correct?
Tobin Brinker 15:54
That's also correct, you know that we have a few things that are exclusive to just Mynd customers, like our insurance master policy, it's, you know, hugely beneficial to people, that does require you to have your property managed by Mynd, because that's how we get the, you know, the policy coverage and the rates and everything. But all the other services, you know, are not tied to any management or anything else, you know, we would love to do it all for you and manage it and do this. But if you're brand new, and you don't have any properties under management, yet you're making your first acquisition, absolutely help you buy. If you have properties in areas we don't cover, but you want to buy something in one of our markets help you buy, we do it all. So absolutely open to everybody.
Steve Rozenberg 16:31
That's great. Let me ask you this now that I'd like for you to kind of dust off your crystal ball here. Like I'm sure everyone asks you. Give me your thoughts on 2021? Where do you see the single-family market going? Good, bad, you know, best case. Worst case? And where do you think it'll be?
Tobin Brinker 16:50
Yeah, I think, you know, crystal ball, I think 2021 is going to be similar to 2020 on some events. But I think that interest rates will probably stay low throughout the year, there's gonna be competition and low supply throughout the year, like I don't see any of those big dynamics just going away, I think they're here to stay for 2021. Build for rent is another trend. And another prediction that I'm having here, it's already getting a strong play, where builders are building communities of single-family homes, specifically for investors to rent them all out. And they're getting a lot of momentum there, institutions are viewing these build for rent communities as like a horizontal apartment building. So they're looking at this space of brand new product, they can rent it out. And it's in the form of SFRS that are detached and spaced out instead of a high rise, really dense apartment complex. So that's a new trend that's out there. And I think that's going to grow a lot in 2021. Because the housing stock is just low. The reason there's a low supply of homes available for sale and so much competition is that we're just short on housing units compared to housing formations over the last several years. So we need construction to happen and new units to come online to kind of fill that demand. So I think that those are kind of the big three: interest rates are going to stay low, there's going to be low supply, and a lot of competition and new construction built for rent is going to play a significant role in that.
Steve Rozenberg 18:24
Yeah, you know, it's interesting, my guess, and I completely agree with you on those three points. My thoughts or my guess is that the reason is, I think you're seeing a lot more continuity of the level of investors coming in. It's not the I hate to say it, but the quote mom and pop investor that doesn't have systems, procedures, you're seeing, you know, companies like Mynd coming in that have the structure in place to provide that service. And you're seeing a lot of investors like you said, you know, a lot of money coming into this industry taking it very seriously. So they're not these one-off investors. So you're seeing I think you're seeing communities being purchased by whole groups, saying we'll take that whole community, we'll run it, instead of it being kind of sprinkled in, and no one talks about it. They're kind of going after it. It's almost like they've done what investors or builders rather have done almost a 180, it seems like on the approach of working with the investment class of the asset, instead of just having it may be, they used to just have a few like a small percentage I remember, they would allow being investment properties sold off as spec homes or whatever. And it seems like now they're going the other way saying wait for a second, this is a steady flow of money coming in, a good source of revenue guaranteed from people that have you know, the money to be able to buy a whole subdivision of rental properties. Is that kind of where you're seeing those buildings going?
Tobin Brinker 19:53
Yeah, definitely. I think that the builders are kind of catching on that, you know, doesn't have to be unattached multifamily high rise building to attract the investor capital into it like it can be an SFR community. And that's what a lot of people prefer nowadays, and builders are catering to that they're, you know, working with the investors to deliver products that suit what they need. They're more open to having investors in communities. All those trends, I think the builders, you know, understand that this is here to stay, investment demand is in there for detached single-family homes, and communities of built for rent. So they're definitely changing their game plan a little to suit that.
Steve Rozenberg 20:33
Do you think a lot of that pivot is just recently because of the COVID? And the pandemic and people working from home? Is it? Was it really that quick? Or was this something that had been coming for a while?
Tobin Brinker 20:45
I think it had been coming for a while you had seen this play a year ago, two years ago, like it had been kind of building up, you know, things accelerated last year was because the, again, the competition was so high, that investors, you know, really spring this by poking around trying to figure out where they can get, you know, deploy capital. And it turns out that one workplace, they can deploy capital on the scale is an entire community from a builder. So builders are, you know, they used to never really look at an exit for a new community of 200 homes, they're building that's like one single buyer who's gonna rent it all out, they would view that as Oh, I'm going to, you know, sell it in phases. And homebuyers will buy, you know, 80, 90, 100% of that, you know, over a period of time, but now they can go and realize that here's an exit, I can sell it all to an investor, I can save on my marketing fees, I can have more predictability in my sales timeline and a lot of things that actually benefit their business model, too. So it's been coming for a few years, and it definitely accelerated in the last year.
Steve Rozenberg 21:47
Yeah, I completely agree. One last question. Where do you see the biggest areas of opportunity for single-family investors in 2021?
Tobin Brinker 21:56
I think you'll have the biggest opportunities, or you'll fall in the trends usually, like, you know, trends, a lot of times don't, you know, they don't just come and go, like, they stay for a long time. Like, if you can get ahead of a trend that going to run for 10 or 20 years, like you can deliver great, great returns. So a big trend out there is just working from home. So if you can find the right location, that's gonna ride that wave of, you know, lifestyle change, you're gonna be able to ride you know, a wave of outsized returns, probably. So I think that's a big one that people are right now are trying to, you know, put their models in place, figure out where they work from home lifestyle is really has a good mix, and where people are going to migrate towards. So migrate in and out, like if you can dial in those trends that really will boost your returns. So that's a big one. The interest rates, I think that that is, you know, it's hard to overlook that right? Now, you can use a low-interest rate to really make a real cash flow and pencil out for the long term. So if you're a long term investor, even though we might experience a price fluctuation in the next 2, 3, 4, 5 years, we may come down for a little then come back up, you know, right now you get an opportunity to lock in long term debt at very, very low numbers. So if you're going to buy and hold something for 30 years, like, I think that it really benefits you, behooves you to go in, make your investment now lock in that low rate, and write it out for a 30 year period. So I see a lot of people doing that with a very long term play. You know, it's hard to do that in the short term, because you know, prices may come down two or three years from now, but in the long run, 30 years from now, prices are going to be higher, your rents are going to be higher than they're out today. But your loan will be the same if you lock it in for 30 years right now.
Steve Rozenberg 23:45
Yeah, I completely agree. I think the long term play looking at the data and the numbers, like we've said, and looking at that long term play for the investment strategy is definitely where I think the winners are going to be for 2021. I think it could be too volatile for a two or three-year prediction. Just because nobody knows, right? We don't know if it's gonna get worse, get better. Interest rates, there's a lot of variables that we can't control. But the one thing we can control, as you said, is a locked-in low-interest rate over the long term that won't change. And that's where you could definitely ride that out, to gain the benefit and reap the rewards from it. And I'm assuming if somebody wants to know more of this information, if they go to the Mynd Website, they'd be able to find a lot of this information from the investor services.
Tobin Brinker 24:35
Yeah, if you go to the Mynd website, you can find links to Myne investor services into our lending and our acquisition platform and all of our products are on the Mynd Website.
Steve Rozenberg 24:46
Absolutely. Great. Well, Tobin, thanks so much for being on today. I appreciate it. Definitely knowledgeable. I love hearing all the information because I'm a big believer that numbers and data do dictate everything that you do, despite our gut feelings in our emotions that do not make us the smart decisions all the time. So for those of you watching, if you'd like to contact us at Mynd, you can go to our website at mynd.co, it's mynd.co. And there you can set up a free consultation with any one of our Investor Services Division. If you want to talk some about property management or you want to see what regions we operate in, we have a lot of content, a lot of educational videos, just have a smart conversation with someone, just to see if you're on the right track. Or if you want to increase your net worth, buy more properties and add to your portfolio. You can talk to us at Mynd and we'd be happy to help you. So Tobin, again, thank you so much for your time. I know you're busy, so I won't keep you much longer. For those of you watching. Again, thank you for watching the Myndful Investor podcast. Please make sure that you like, comment, and subscribe to this channel and share it with other people so that other people can get this information that may be interested in investing in their future. I'm Steve Rozenberg, on behalf of Tobin, Mynd Property Management, I'd like to thank you for watching and we will see you next week on the Myndful Investor podcast show. Bye-bye.
Tobin is the Director of Operations at Mynd Property Management. He is also a Real Estate Acquisition and Asset Management Professional experienced in acquisitions, sales, leasing, property management, construction management, and asset management. He has a track record of successfully executing investment strategies.