How To Recession-Proof Your Retirement With Hands-Off Commercial Real Estate Investing

Transcript

Welcome to Real Estate Investing Reimagined: How to Recession-proof Your Retirement with Hands-off Commercial Real Estate Investing….specifically, passively investing in large apartment complexes.

My name is Matt Hansen and I’m the managing partner of Hansen Holdings. We are a real estate investing firm.

What We’ll Cover

Here’s what we’re going to be covering today in our time together:

  • We’ll discuss the Hansen Holdings real estate investing strategy and how it creates truly passive income.
  • We’ll also talk about the elephant in the room. Anytime I speak with someone interested in partnering with us….. there’s always a few key questions and concerns they have as a passive investor. 
  • We’ll also take a look at some actual case studies of deals we’ve done in the past and you’ll learn if this is something that you are interested in exploring more. If it is, we’ll share the possible next steps with you.
  • Finally, we’ll talk about the potential opportunity to join our Investor Circle. 

Disclaimer

Before we go any further I need to share with you this full disclaimer: This presentation is for informational and educational purposes only. I’m not a tax, legal or finance professional… nor do I play one on TV. This is not a solicitation or an offer of any kind. With that out of the way… let’s make sure you’re in the right place. 

This is for You If

  • You’re a busy professional or retiree
  • You’re interested in investing outside of Wall Street to gain diversification in your portfolio 
  • You want more freedom through passive income
  • You don’t want to take high risks to get rewarding returns
  • You want capital preservation — to want to keep the money you DO have
  • You don’t have time to deal with the headaches of being a landlord and buying properties yourself 
  • You want to create legacy wealth for you and your family 
  • You want to potentially reduce your taxes

If you answered “yes” to most of these questions, then you’ll find value in the balance of this presentation. 

My Background

Before I invest, I always like to vet the person or the company that I’m trusting my money with.

I grew up in a small rural town in Michigan. My father was a pharmacist and my mom managed the books for our family owned drugstore. That’s where I started working at the age of nine doing odd jobs. By the time I was 12, I was working the cash register.

I graduated from college with degrees in management, marketing and economics. 

Right out of college, I was hired into a Fortune 100 company and worked my way up to a global director role before I retired a few years ago.

At one point, I was responsible for a $200 million dollar budget and I managed global operations. That’s where I really honed my strategic decision-making skills. On a daily basis, I’d complete risk/reward analysis. My years of corporate experience prepared me well to become a savvy full time investor.

Of course years ago when I started out, I did what Wall Street told me to do. I had 100% of my investments in the stock market. In 2008, I took a $300,000 loss. For that reason, I’m so passionate about sharing passively investing in real estate with others. Many people don’t know that they have investing options outside of Wall Street.

That being said, in addition to real estate, my wife and I are big venture capital investors. We’ve invested in some crazy fun stuff — all passively — such as land entitlements, gold mining royalties, a vineyard, a road construction startup and a little bit of crypto. But real estate is by far our favorite asset class and it’s what we specialize in.

We enjoy traveling. I’m a big pop culture junkie. I love reading books, bicycling and I’m a Porsche enthusiast.

My wife and I have been married for 31 years and we have two adult kids. We actually used to do fix and flips 30 some years ago when we first married. About six years ago, we got into apartment investing.

Here’s a picture of one of our less exotic vacations to Disneyland. But we’ve also traveled as a family throughout Europe, Central America and all over North America… having some pretty excellent adventures together.

The beauty of passively investing in real estate is that you have the freedom to travel and those distribution checks still keep coming in. 

Growing up working in the family drugstore, at a young age my parents instilled to me these three values:

  • Trust 
  • Honesty and
  • Integrity 

These are the principles I live my life by. And over the years, I built a positive reputation with the people I work with. 

Testimonials

Here are a few examples of what our investing partners have to say about us:

First up…Nancy is a retired attorney. “Matt has a true concern for the well-being of other people in particular his investors. Their interest always comes first.”

I’ll give you a specific example of this. I’ve got a new investor who’s investing in one of our Florida deals and he really wants to invest in North Carolina. But I don’t have properties there yet. 

So I said, if you find a deal there to invest in with someone else, bring it to me. We’ll take a look at all the details to ensure it is a solid investment. So we spent 45 minutes reviewing the deal. I gave it a thumbs up. He was very happy and invested with that other person, too. 

Next up is Vinay. He’s a tech company owner and he states I’m very open to having honest and candid discussions. 

Another example with potential new investors… They were so excited that they had saved up fifty thousand dollars to invest with. When I got to talking to them about their investment goals and their background, I learned this was their entire life savings. So I kindly advised them not to invest with me or anyone else. Because they really need that money as an emergency fund to cover any unexpected expenses that come up in life for their family. They appreciated my honesty.

And then finally, Emily and Josh. They are multi-family syndicators. They invested in tons of apartment deals and have high standards.

 “We will continue to trust him with our investments long into the future.” 

And that’s what we are all about….long term relationships with our investing partners. You want to work with somebody you know, like and trust and that’s our goal. We want you to be so happy with your experience that you tell your friends and family…. and help them escape the volatility of the stock market too. 

Why Do We Invest in Apartments?

As I mentioned, we do a lot of passive investing but the majority of our holdings are in multi-family apartment buildings. Here’s why:

Cash Flow — “Our apartments start providing passive income after 8 to 12 months. Once they start, distributions are done on a quarterly basis.“

“There’s a Strong Demand for apartment living  and we only invest in markets where there’s population and employment growth.”

Apartments are a Hedge Against Inflation “Real estate has historically been a great hedge against inflation. As inflation goes up, the value of our properties go up and the rents go up as well.”

They are also Recession Resistant “When the economy gets really tight people have to move into apartment buildings which makes it even a stronger investment during periods of recession.”

“There are Tax Benefits as well   There are passive losses and depreciation that you can apply in some situations.Talk to your CPA for details as benefits vary based on the individual. 

Leverage – We purchase large apartment complexes mostly with debt. For example, we can purchase and control a 40 million dollar apartment with only a 12 million dollar down payment. This is called GOOD debt.

Economies of Scale – It’s more efficient to manage a 200 unit apartment building versus owning 200 single family homes as rentals.

Force Appreciation – Unlike single family homes where the value of the home is based on the comps in the neighborhood, an apartment is valued based on its income. So when we operate the apartment well and increase profitability, we increase its value.

Apartments are a Physical Asset – Unlike paper investments on Wall Street, this investment is backed by actual real estate and the property is insured.

My favorite reason is the Profit Split at Time of Sale – This is one of the most powerful things about passively investing in apartments. On most of our deals, investors receive 70% of the profits, making it a very lucrative investment.

Wall Street Secret

Before we go any further, I’d like to share with you an investment secret that Wall Street doesn’t want you to know.

You can passively invest in apartments with retirement funds.

There is something called a self-directed IRA that allows you to invest in things outside of Wall Street. You are not limited to stocks, bonds and mutual funds! Like traditional retirement accounts controlled by Wall Street. You can roll funds from a past employer’s IRA or 401K account, tax and penalty free to a self-directed IRA. 

You then have checkbook control of your retirement funds so you can passively invest outside of the stock market and diversify into a more stable investment like apartment buildings. I have personally done this myself and have helped many investors do the same.  We are happy to walk you through this process.

So, this is a secret Wall Street doesn’t want you to know because they want your money locked in the stock market. They make money off you with commission and fees even if you are losing money in the stock market.

Common Investor Concerns

So now, let’s talk about the elephant in the room. Investors typically have the following concerns…

  • Is this a “ponzi scheme?” Bernie Madoff is notorious for taking new investor funds and using them to pay existing investors dividends. Apartment investing is nothing like that. It’s backed by collateral of physical real estate.
  • Cooking the books. A great example of this is Elizabeth Holmes. She started a biotech company where she falsified records and made untrue claims to get investors money. Hansen Holdings is completely transparent with financial information and you will always know exactly what is going on with your investment.
  • Avoidable mistakes. Investing with someone who is not competent may lead to big mistakes being made. That’s why I share so much about my background. I’m a seasoned business professional. I know how to evaluate and run a successful business. Hansen Holdings is also a part of an expert team with extensive apartment investing experience.

With any passive investment, you should also check out the following:

  • Transparency — Are they sharing data with you freely? When you ask a question do they answer it?
  • Communications and reporting — Is this being done in an accurate and timely manner? 
  • What are the returns? — Do the people you’re investing with know what the future holds for the industry they are in?
  • Volatility of demand — Is the market unpredictable? 
  • Access to management — Are the people in charge of the investment available to talk to you and answer questions? 

We always look at these factors before we passively invest. That’s why we created an investing experience where we are completely transparent, provide consistent reports and offer realistic returns. 

Real estate is a stable, mature industry and our projections are solid. It is not “get rich quick” but instead “get rich smart and slow.”

Commercial real estate, specifically apartments,  are more predictable than most other investments. By looking at population and employment growth, we know what’s going on in the cities where we invest. 

And I am always available to answer questions and offer more information.

The Hansen Holdings Investing Experience

And now we’re going to talk about the Hansen Holdings investing experience.

Our mission statement is simple: We believe in a fully transparent investing experience for our investing partners where people and relationships always come first.

The number one question we get from our new investing partners is…”How do I get my money back?”

First, you’ll receive quarterly distributions or passive income, beginning 8-12 months after we purchase the apartment. That’s about how long it takes to  begin renovating units and improve the profitability. 

The business plan is to increase the value of the apartment. Once we achieve the profit targets, the property is sold.

Our business plan is to hold the property for 5-6 years. If we can complete it early, we sell it early.

When the apartment is sold, you’ll receive back your original investment along with your share of the profits – your passive income.  You actually own shares in a specific apartment complex.

Our Approach

The experience of partnering with us to earn passive income involves the following:

SEC Compliant — Everything we do is compliant with the Securities and Exchange Commission (SEC). 

Full Transparency — We have an open line of communication. Anything you have questions about, we’re going to share with you.  For all of our investments, we provide monthly communications via email. You’ll also have access to our investor portal 24 hours a day, where you can view all the updates on your investment.

Direct Access — You have direct access to management — me. We provide white glove service levels to all of our investors. We’ll walk you through the process step by step. 

I was new to passive investing at one point and wished someone had held my hand through the process. So that’s what we do for our investors.

We work with Premier Professional Service Providers

  • We have one of the best SEC attorneys in the U.S.
  • We also have an outstanding lending broker who finds us the best interest rates and terms and conditions on our loans.
  • We have an excellent commercial insurance broker who we work with to protect your investment.
  • And finally, our property managers. They run our properties and are the key to our success

We’re also looking for Long-term partnerships with our investors. After all, the hold period can be up to six years for these investments. 

So we want to make sure you’re comfortable working with us and ultimately provide you peace of mind.

Sourcing & Evaluating Deals

We say “no” to a lot more deals than we say “yes.” We literally look at hundreds and hundreds of deals per year. Very few meet our return requirements.

We only partner within our network of experienced operators that are aligned with our vision and our values. I have business partners in all the South, Southeast and Southwest states we buy in.

We have access to deals through broker and seller relationships. For example, we have many properties in Florida because we have bought multiple times from the same seller there. They like working with us and they know we will close on the sale. The same thing with commercial brokers. They like working with us because we are well organized and professional so they give us access to good deals. 

We do extensive research prior to submitting offers. We’ve got access to all sorts of industry data, historical and projections. We know what’s going on within a mile’s radius of any property we purchase. We can see all the details on our competition’s current rents, amenities and renovations. Along with the purchase price of other apartments.

Extremely conservative underwriting is also key. For example, one of the deals we’re looking at right now, the data says that if we do the planned renovations we should be able to increase the rents by $500 per month. But we only factored in a $250 a month rent increase in our analysis. Because we want to ensure we under commit and over deliver on our returns to investors.

We consult with all professional service providers before making any offers to identify and mitigate any challenges with the property.

Our professional property manager completes all the due diligence on all purchases before closing. If we buy a 200 unit apartment, they walk through every single unit. They take an inventory of what’s going on throughout the property. They look at the HVAC system, the roofs, plumbing and electrical. They review every single lease agreement, and they look at all the contracts for the service providers. Having a top notch property manager is critical because they’re going to manage the asset after we take it over.

Population and job growth. The two most important things we always look for and make the best rental markets.

We target 100-300 unit apartment complexes. We want economies of scale — the bigger the better. 

Opportunity to improve operations. We look for opportunities to improve the operations and for properties that aren’t managed well. We always bring in our management company to turn things around and improve the asset.

Light to medium value-add renovations. You’ll hear the term “value-add” in apartment investing. This simply means the business plan includes renovations to increase the value. For a typical light value add, the renovations will cost $7K per unit. As people move out we’ll renovate the units and increase the rents. It does take a little bit of time to do that, but we find this business model provides the strongest returns.

We only invest in landlord-friendly states.

Case Studies

Now let’s take a look at case studies of some apartment investments we’ve done in the past. 

Meadows on Merrill Apartments in Dallas: 201 Units

The first example is a property I was a passive investor in in Dallas, TX – a 201 unit apartment. 

The property was close to a large employer with strong demand for workforce housing. The property was purchased from somebody we knew well so there were no hidden issues with the property. 

They already had a solid business plan in place and we continued to successfully implement it. We only had to make minor improvements to the property. We upgraded the remaining units and focused on improving the living experience by having routine resident appreciation events to keep the occupancy high.

The results to investors were as follows

  • We bought the property for $15.4M and sold it for $22.7M 
  • Minus renovation costs the profit was $5.2M
  • $100,000 investment became $170,000
  • This was done in 41 months

Millington Oaks Apartments in Memphis: 172 units
The next deal is one I was a lead general partner on and ran the deal. This is a 172 unit apartment in Memphis, TN. 

Memphis has the busiest cargo airport in the United States. Fun fact — it’s the second largest cargo airport in the entire world. (Hong Kong is number one.) 

We selected this property because it needed some TLC and we knew we could significantly increase the revenue. The units were all outdated and rents were well below the competition’s.

We replaced the property management with a company whom we have many properties under management with already. We improved the operations and the residents’ experience. The units were upgraded with plank flooring, painted kitchen cabinets and countertops.

  • We bought the property for $6.5M and sold it for $10.5M
  • The total profit on this deal was $3M
  • So if you invested $100,000, it became $213,000
  • And we did this in 24 months

Jacksonville, FL three property portfolio:  253 units
And our final case study is a 253 unit portfolio of three properties in Jacksonville, FL.

The location of the properties was very strong. Jacksonville is one of the best rental markets in the entire United States. Two of these properties were walking distance from a large Medical Center; there are no other apartments close by. We knew if we put a lot of money into it, the hospital staff would be happy to rent there.

We replaced the property manager with somebody we knew could run the property well. The units were all upgraded with new plank flooring, kitchen cabinets and granite countertops. The exterior of the buildings were all repainted and we improved the landscaping and signage.

The results to investors:

  • Bought all three properties combined for $18.2M and sold for $33.8M
  • Minus renovations costs, the profit was $13.6M
  • $100,000 investment became $202,000
  • We did this in 32 months

I do want to make a disclaimer. We can’t guarantee these types of returns on every deal. 

The Investor Circle

Does this sound like something you might be interested in? 

We’ve created the Hansen Holdings Investor Circle to help others invest wisely. Membership provides you access to our deal flow and educational content. The Investor Circle:

  • Provides potentially lucrative returns
  • Offers exclusive apartment investments not available to the public
  • Gives you first choice in investment opportunities 
  • The typical minimum investment is $75K
  • You can invest with cash and, as we mentioned earlier, retirement funds. 
  • And we always have an active pipeline of upcoming investment opportunities. We have new deals available about once a quarter or more.

The most important benefit: You are on the road to financial freedom without being 100% dependent on the stock market’s performance.

AND if you are retired or near retirement this is even more critical to you.

It’s free to join the Investor Circle but SEC regulations require that we speak before you can receive investment opportunities.

Next Steps

If you feel this is something you might like to explore, then let’s talk about the possible next steps.

I’d like to offer you a complimentary 15-minute consultation to get to know you better, review your investing goals and answer any questions. You can then decide if this is a good fit for you and if it is, you can join the Investor Circle and gain access to our exclusive investments. 

Simply go to HansenHoldings.com/consultation. 

There’s a short form to fill out to book a time for us to talk. Thank you for your time and I look forward to speaking with you. 

Enjoy the rest of your day!