Rocket Your Dollar Ep. 37: Origination to Syndication

Realtor, Project Manager, and Connector Jonathan Mickles shares how networking & keeping relationships helped to connect the dots from project management to real estate.

Transcript:

Thomas Young:

Hi everyone. Welcome back to Rocket Your Dollar. Today, I'm excited to have Jonathan Mickles with me. Jonathan has a really interesting story about how he got started in the real estate world. He started posting CASHFLOW® games in the suburbs of Washington, DC and for weeks he hosted a network with those interested in the game until he was ultimately recruited to originate mortgages just before the crisis of 2008, and while originating he began to get his real estate license to work with investors who were interested in purchasing property.

Since then, he's worked with investors who've bought, renovated, and sold properties. But never content, Jonathan continued his education by completing Project REAP, and that stands for the Real Estate Apprentice Program in 2014, and what this program does is it seeks to increase minority participation in commercial real estate, and his connection to investors who migrated from residential to commercial real estate, solidified his decision to become a real estate syndicator specializing in multifamily properties.

Jonathan continues to serve as a resource for investors within the Washington DC area, as well as abroad, and he's a connector. He connects people to resources and it's kind of the guy to know. But Jonathan, first of all, thank you for being on the show and I'm so interested to learn about your CASHFLOW® days and how that sort of kicked off your career in real estate.

Jonathan Mickles:

First of all, Thomas, thank you for inviting me to speak here. Essentially, my background is, I have a couple of degrees in computer science and started as a business analyst and became a project manager and recognized that that's probably not going to be the thing that's going to allow me to retire at all. That real estate was that. So like most people, you read Rich Dad Poor Dad and it just messes up your whole mind.

At the end of the book, he mentioned that he did have a CASHFLOW® game and I was like, "Okay, let me go grab it." I think at the time it costs like 200 bucks. I was like, "Who in the world is going to play monopoly?" So at the time, there were a couple of REIAs, or Real Estate Investment Associations, in the area. One in particular. I started talking to people and said, "Hey, you want to play?" And they said, "Yeah." So I was going to church down the street from a Barnes & Noble. So after church, I would go in and host the game and then that turned into other people bringing their games. Then when 202 came out, we were playing that. So at the height of our playing, we had two 101 games and one 202 games going.

Thomas Young:

That's amazing. I love that. That's a very unique way of getting into playing. I mean obviously, like Rich Dad Poor Dad is just a classic book in the real estate wealth personal finance world. I remember I got my first copy from my uncle when I was 16 and read it, and it changed my perspective on everything. But I love that you took it a step further and started reaching out and playing with other people, and we talk a lot about networks being so important in real estate and I can't think of a better way to organically build a network then than playing CASHFLOW®.

Jonathan Mickles:

Yeah. It became one of those things where you know one person was interested, and then someone else was interested, and then a lot of people in the cafe, because we would do it next to the cafe, would be reading the book or had heard of the book, and would want to join. That helped build our network and we would create our own rules. So we have the official CASHFLOW® 101 rules, and then we created our own CASHFLOW® rules. Those were the days.

Honestly from that, talking out loud, figuring out how to negotiate within a real estate context and helping people to learn forward. So making bad choices, you make your own bad choices, picking your whatever ... I didn't notice that. I was being watched by a mortgage originator at the time and he owned a firm in Silver Spring, Maryland, and he said, "I think you could do well at this thing and originate some stuff." I said, "Huh?"

That's kind of how that next leg moved down where I started originating loans. That was a steep curve, but it was very valuable. Again, yes, your network is your net worth and that I've tapped into it several times and have had great, great benefit.

Thomas Young:

That's fantastic. Especially in real estate, we hear it's always about your network. I mean, people think real estate investing, but it's such a broad category. There are fix and flips, there's buy and holds, there's multifamily, there's single families or commercial like there are so many different things. Then within each one, there are so many different people that are providing services, whether it's legal services or fundraising or just simply fixing a pipe or rehabs.

So you have to know so many people to do this on your own. That's one of the things that I think makes a good syndicator is just that network and the way you went about it is it cool. When I read that on your bio, I was just like, "That just makes so much sense to me." I mean, you've got a bunch of people that have a learning mindset that wants to play CASHFLOW®, talking about it. It's a great way to make friends without any sort of agenda away. It just grew organically. I mean, how could it not?

Jonathan Mickles:

Yeah, I mean, finding your tribe is sometimes challenging because when you start talking about Rich Dad Poor Dad, and you're thinking, "Okay, my house is not an asset, it's a liability because it's taking money from me." That flies in the face of most financial advice that people receive. It flies in the face of what, as a realtor, we learn. It flies in the face of what even mortgage people are taught to educate with.

So finding your tribe, ultimately, that would allow you to be able to do what you do like now we're into real estate syndication, it's important and I think people should know that there are people out there who are like you, whatever that is that you want to do. Whether that's in blockchain, whether that's in real estate, whether it's in mortgages, whatever that space is. Recognize that there is a tribe out there for you.

Thomas Young:

Absolutely. I'm curious, when did you make the switch full time from being PM to sort of going full in on the real estate game and making this your career?

Jonathan Mickles:

Yeah, honestly I'm still straddling the fence as it were. I mean I do enjoy project management. It's one of the things that I think the culmination of all of my gifts allowed me to do. I mean there are like four things that I think are kind of like giftings for me, leadership. Leadership is not necessarily management, leadership is like knowing which wall to put the ladder against. Then there's that administration, that's that detailed oriented, that's the management piece. That's number two.

The third thing for me is teaching. So with the CASHFLOW® game, as I was mentioning, that allowed me to do that. Then wisdom after some time after you've gone through a couple of projects after you've gone through a couple of hard knocks, you're able to now apply knowledge and see things a little bit differently.

So I still do enjoy IT project management for the most part, but I have not made the full-time switch over into syndication. But it is something that I see from my project management lens that I think that I can continue doing project management with real estate syndication.

Thomas Young:

You know, there's such a crossover in the set of skills that are required to be an effective project manager as well as the syndicator because in project management, right, in the IT sense, in many senses, is organizing people and making sure that everybody's driving towards a common, well-defined goal that's oftentimes defined by you as a project manager. Same thing with syndication, right? If you have a team or a group of investors or you're looking for a specific project, you define an outcome and then you drive towards it breaking down into smaller goals and you just kind of move forward. So how has your experience as a project manager like really accelerated or helped your syndication career would you say?

Jonathan Mickles:

It's both a positive and sometimes a curse at the same time because you can take a look at the process, you can figure out what the processes are, you know there are three major processes, you've got acquisition and then after you acquire the process of the project, you've got your due diligence. After your due diligence, then you go into pretty much your operations. Same kind of thing with project management, just a different mindset.

I'm both certified as a PMP, which is a Project Manager Professional as well as a couple of certifications in agile project management. It's been a lot easier for me to grab a hold of all of the different concepts in becoming a syndicator by looking at it with that particular lens.

So the curse portion of that though is that sometimes you can overanalyze and get stuck into overanalyzing and not wanting to move until certain things are there are in place. But that's that creative juices that I'm still developing. But yeah, it's quite easy a shift again, transferable skills from project management to syndication.

Thomas Young:

Yeah. I mean, and like anything, there's a good side and a bad side, but what you described as the curse doesn't sound like that much of a curse, which is good. It doesn't sound like you can't overcome it.

Jonathan Mickles:

No, no.

Thomas Young:

Tell me a little bit about what drew you towards the syndication side of it versus being a realtor or being an individual investor? Because it's a lot of work to be a syndicator, so what kind of drove you towards that path?

Jonathan Mickles:

You're right, there's a lot of work. But let me, I guess, let me get back to the origination. So as I started originating a couple of years, well a couple of months actually, there was always this tension that I had found between originators and realtors and I was trying to figure out, "Well, what's the issue? What's going on here?" And some other people in my life were saying pretty much, "Hey, why don't you just go ahead and become a realtor." So that's exactly what I wanted to do.

I went and sat for my license, got my license, but I didn't want to necessarily become a traditional agent. I wanted to focus on becoming an agent for investors because I was with the REIAs and I was doing the CASHFLOW® games. So I kind of have had my license on inactive status a couple of times until I was trying to find the right brokerage that made sense for me. So at that time, we were in the mortgage crisis by then, going back and forth. There's lots of doom and gloom that was going on. The sky was falling. I said I needed to go beef up my skills as a realtor if I was going to jump back out there.

So I did with getting my Certified Distressed Property Expert designation that was created by the Charfen Institute. It was one of the fastest-growing designations amongst the realtors at one time. So I did that. Then at the end of that training session in Miami, the teacher said, "Hey, by the way, we've got this new designation called a Certified Investor Agent Specialist designation. My ears perked up because I was like, "Okay, so you guys have a whole designation that's directed working towards investing, I'm in." They said, "Oh, and by the way, you may have an opportunity if you're interested, or you think you can do what I do to be a trainer." I said, "Yeah, I'm interested in." They're like, "Well if you're interested, you need to fly yourself down to Austin, Texas and pretty much go through the gauntlet."

So I flew myself down. I took the CIAS training obviously, but beyond that, I flew myself down to Austin, Texas and was with about 35 to 50 trainers already. Some of them were national trainers, some people were new like myself and I was just like, "Okay, I'm swimming in deep water," and before it was all over, I was one of less than a handful of people there selected to help teach the certified investor agent specialist designation to the nation.

So I got to travel a little bit there. So I'm traveling, I'm still working doing projects and things of that sort. I'm training and I'm kind of working with one specific investor, helping him to acquire and get rid of his properties and he introduces me to ... does this all make sense? Because it's like from one relationship to the next relationship, and he says, "I want you to meet this guy named Michael." I said, "Okay." He said, "Me and Michael, we're doing things together, blah blah blah." I said, "Okay, fine." So that person was Michael Blank, and people probably know that name, the themichaelblank.com. He is now a lead contributor on BiggerPockets. He also has his group, the Nighthawk Equity Group, which is on the fund.

So at the time, it was before all of that. So I started working with Michael on potentially becoming his agent to do fix and flips, and never was able to get around to help him with some of those because he had multiple agents. That's what happens when you're doing your fix and flip career, you have multiple agents in different areas helping you to do things. But after some time because you follow up, follow up, follow up, follow up. I mean that's the key here for all of this. If somebody is looking for the clue or the key, I heard someone say, "Success leaves clues, follow up, follow up, follow up." So about every year, once a year, twice a year I follow up with people.

So I'll follow up with Michael and I said, "Hey, how's it going with the fix and flips?" He says, well, "Hey Jonathan, I'm pivoting." I just bought my first 12 unit building. I said, "Oh really?" So then we started talking about that and he knew that I was doing some training. He knew about my IT background because I think he also shares an IT background. From there he started saying, "Well I built this thing called a Syndicated Deal Analyzer, okay? I want you to give me your thoughts."

He was incredibly generous to even ask me my thoughts were, but I was with the lens of being an originator, being an agent, working with his other partner who was doing fix and flips, traveling nationally teaching this certification, I was able to bring to bear some of my thoughts and he's now many, many iterations beyond what I was able to provide him, and he has much smarter people on his team. But he provided me that open access.

I'm coming to a close here, but that turned into his course. I got the chance to review the course and provide some feedback. His Ultimate Apartment Building course, which I did take. After a while, Michael said, "Okay," he kind of gave me that swift kick and said, "Jonathan, you need these kinds of friends from time to time." He says, "Look, I know you provide value all the time. You're one of the sharpest people that I know when it comes to networking and things of that sort, you have the package, you need to get out there and do this yourself." So that's what led me to say, "Okay, let me look at syndication." That's how I kind of landed in syndication. Long story. But those are kind of the connecting points there.

Thomas Young:

No, and that's a great story and it's unique because, I mean, I feel like everybody I talked to in the real estate world has a unique story of how they got to whatever it is they're working on at that moment. Whether they're lenders, whether they're syndicators, whether they're agents. Your story is certainly unique and I appreciate you telling us about it because it is amazing how just connecting dots, you never know where it's going to lead, right? But looking back, it's pretty clear, right?

It happens to me with Rocket Dollar and where we're at and how we've gone about things. It's like, "Oh well that was obvious," but at the moment it wasn't really obvious, and you just keep doing what you know to be right and what you think would be right. Then it all works out in the end hopefully. But I want to dive into what you're looking at as a syndicator. I know it's a little bit newer of a stage for you, but what kind of properties, where are you looking sort of what's your investment thesis? Tell us a little bit about that and what you're looking for.

Jonathan Mickles:

Sure. Generally, we have been looking in the Phoenix market, but that's very challenging. It has been at least, however, I've seen some stuff recently because you know, at the time of this recording, we're in lockdown a situation with COVID-19, and we're starting to see some changes in that. But generally 50 units or more, garden-style, I would prefer to have it all under one building. We were looking at a similar property out in Phoenix back in December, but we were just shy of jumping across the broom and getting that. But yeah, generally 50 plus units, a hundred units or more is even better. Some value add, garden-style, typical things that syndicators are looking for.

Now because of the relationships that we've been building throughout this time. We now are having some of our other partners and vendors bringing us potential deals and they aren't in the Phoenix market, they're in other places, and these deals are off-market deals or deals before they go to market. So again, that's another key to building those relationships with your vendors. So it may not necessarily always be brokers. Well, that's great to have those relationships. Sometimes the other vendors are great sources of being able to get deals as well.

Thomas Young:

Absolutely. I mean, it just circles back to exactly what we've been talking about that your network is so important because things will pop out of random places and well you might have your electrician or your plumber is talking to the owner of the building that he's working on and hears something and think of you and it just all comes together. So just circling right back to where we started about your network being so, so important, and I think that you fully appreciate and grasp and have reaped the benefits of that, more than even a lot of people from just the conversation we've had.

Jonathan Mickles:

It's been very, very exciting and still learning the process by which to do it correctly. I would call out the Mauricio Rauld of the attorney, I believe he's out in California. He has a video out there in terms of how to build relationships with potential investors and some of the things that one needs to do. That just resonated with me and now I'm taking the rest of my connections that I have through that process to potentially present deals to them. So that's great.

Thomas Young:

Yeah, and I'm going to ask you to send me a link to that video so that I can include it in the show notes so that people listening can go ahead and check that video out.

Jonathan Mickles:

Sure.

Thomas Young:

But Jonathan, sort of wrapping up a little bit, what's the best way for someone to get in touch with you if they want to learn more about your syndication, if they want to learn more about you, what you're working on, what's the best way to get ahold of you?

Jonathan Mickles:

Sure. To learn about me, you can go to my website, jonathanmickles.com. To learn about our organization, redbootllc.com. That's redbootllc.com. That's where we talk a little more about the syndications. Otherwise, you might see me on TikTok, or LinkedIn, and feel free to just send a message on either one of those websites and I'll make sure that we get connected. Also, chicken wings are great, so if anybody wants to go out and grab chicken wings after this COVID-19 thing, I'm all down for it.

Thomas Young:

Well next time I find myself in the DC area or you find yourself in Austin, I'll take you up on that offer for sure. But Jonathan, thanks again for taking some time out of your day to sit with me and talk with me. I had a lot of fun recording this and I look forward to this coming out because you've provided some fantastic content so thank you again.

Jonathan Mickles:

Thanks, Thomas.