Ep #177 – Anna Simpson has invested in 1,300 Multifamily Units as an Equity Partner and a Key Principal before becoming a Managing Partner and raising $1.4 Million by Syndication

Here’s Some of What You Will Learn: 

  • Anna Simpson was a real estate agent in Texas with a masters degree in psychology.
  • How to get started with passive investing in multifamily property.
  • How to find deals through relationships.
  • Before you begin, make sure you have a team.
  • How to utilize and engage the team and property management to make sure expenses and market rents are consistent.
  • How to use Freddie Mac if where you can use a property management company for the experience requirement.
  • The importance of bringing people on board with a good resume and experience.
  • How to provide value for others as you gain more experience closing deals.
  • The benefits and drawbacks of Syndication vs Partnerships.
  • Creative ways to close a deal with a team with a unique structure.
  • Tips for closing your fist deal through planning.
  • Learn about SWOT analysis, and identifying strengths and weaknesses.
  • The importance of having a mentor and following a path to success.
  • How to get over difficulty and discomfort and continue to grow.
  • How to begin taking action if you are thinking about entering the business.
  • Important reading for changing mindset and using podcasts for learning on the go.
  • The 2 parts needed to become successful in the business and not being a dabbler.
  • How mindset, attitude, and passion can help you reach success.
  • Proper goal and timeline setting for growth.
  • Our GuestYou can learn more about Anna Simpson at:http://www.simpsonmultifamily.com/

Watch on YouTube!

Do you want to learn more about Multifamily Real Estate Investing? Work with Rod in the Lifetime CashFlow Academy's Multifamily Course & Coaching Program

Full Transcript Below:

Ep #177 -Anna Simpson- Invested in 1,300 Multifamily Units and raised 1.4 Million by Syndication

Rod Khleif: Welcome to another edition of How to Build Lifetime CashFlow. This is Rod Khleif and I am thrilled you’re here. And you’re gonna get a ton of value from the lady that we’re interviewing today.

 

Her name is Anna Simpson and she’s personally invested in 1300 multi-family units as an equity partner, and then recently became a key principal, and has taken down one deal already. I think that another one’s coming up in the next day or two. So, we’re excited that you’re on the show, Anna. Thanks for joining us.

 

Anna Simpson: Thank you. Thank you for having me.

 

Rod Khleif: Absolutely. Now, I know in a previous lifetime you were a realtor. And I see that on your bio but tell us a little bit about how you got into this business? And why you’re in this business and how much you love this business?

 

Anna Simpson: [chuckle] I love it. That’s my life. I got in this business about five years ago. I was a realtor with Keller Williams in Southlake, Texas for several years. And I was investor in single-family homes. I was buying houses, rehabbing them, leasing them out and keeping them for passive cash flow. That’s how I started. And I learned about this business through my friends and I see that they were very successful. So, that’s kind of…  was my idea.

 

Rod Khleif: Okay. And I think you just told me you have a degree in psychology, which is not your typical progression.

 

[chuckle]

 

Rod: From psychology to real estate but obviously it’s working.

 

Anna Simpson: Well, what happened was, I came here about 13 years ago in America. My Psychology Degree is from Russia. It would take me additional several years to qualify here. So, obviously, it was not my path.

 

Rod Khleif: I see. I see. Okay. So, tell us about… You started investing initially in other people’s syndications. Correct?

 

Anna Simpson: Correct. Yes, when I realized that I would like to stop investing in single-family and go into multi-family. My idea was to invest passively because this is a way to really learn this business but don’t put yourself at risk because you just basically, all you’re risking is your passive investment.

 

Rod Khleif: Right.

 

Anna Simpson: Yet, you learn how other people do it. And it’s very useful, I think.      

 

Rod Khleif: Sure. Sure. It’s a great way to start. I understand that you have closed on a 70-unit and your deals are all in the Dallas-Fort Worth area.

 

Anna Simpson: Correct.

 

Rod Khleif: And that’s your target market. And tell us about that 70 units. How that came about? How you found it? And just dig in, get a little detail on that.

 

Anna Simpson: Right. Before I was able to take down my own deal, I was a KP for someone else.

 

Rod Khleif: Oh, that’s right.

 

Anna Simpson: Just to be able to put it on my resume and be considered as experienced investor in the eyes of the lender. [overlap talk]

 

Rod Khleif: Okay, so you invested in somebody else’s syndication and you said, “Hey, I’ll do this if you allow me to be a KP, so I can put it on my resume.” Something like that?

 

Anna Simpson: Yeah, pretty much.

 

Rod Khleif: Okay.

 

Anna Simpson: Yes, there were several people who invited me to be a guarantor, loan guarantor…

 

Rod Khleif: Okay, mm-hmm.

 

Anna Simpson: …For their own properties. And all it takes is basically a net worth, liquidity, and that’s it.

 

Rod Khleif: Right.

 

Anna Simpson: Nothing else you have to have to be a guarantor. And that’s what I did, and then in the eyes of the lender, of course, now experienced borrower.

 

Rod Khleif: Right.

 

Anna Simpson: With my first deal, I was able to find it through, basically, relationships. My mortgage broker introduced me to the leasing broker for this deal. And this deal was in the market. So it was a competitive situation but using my team, I was able to take it down.

 

Rod Khleif: Okay. Okay. You mentioned team. Talk about… so, have you put together a team now? And if so, tell us what the components of the team are?

 

Anna Simpson: Right. What I usually say, “Investment in real estate is a very much of team sport”. And when you invest in houses you maybe can do it on your own with couple of people involved but here it’s essential that you have a team created for yourself because this is a very complex business.

 

And you have to have a different… You have to have a mortgage broker, mentor, insurance broker. Of course, you have to have relationships with the listing agents. It’s essential to engage these people at the right time. And of course, the most important is your property manager because that’s how you evaluate your deal. Once you’re ready to evaluate your deal, you’ve got to be able to involve them, as well, so they help you do your due diligence. [overlap talk]

 

Rod Khleif: That’s how you do it. You utilize them to help with your due diligence. They bring their team in, they go through the leases, they go through all the units. Great!

 

Anna Simpson: Yeah, that’s when they have a deal on the contract but before that, absolutely when they underwrite the deal even before I submit the LOI, I always try to engage my property management, go through pro forma, check on my numbers. I have my numbers, they have theirs and we compare just to make sure that we are on the same page because they’re the ones going to be managing my properties.

 

Rod Khleif: Sure. You have them help you confirm market rents…

 

Anna Simpson: Correct.

 

Rod Khleif: And take a look at your expense numbers. See if they make sense. See if they’re consistent with what their experience dictates. Do you bring your property managers in as an equity partner or just as men… vendor?

 

Anna Simpson: No. On the lending side, I noticed that the lender doesn’t want your property manager to be involved. They actually like it to be a third party, not affiliated; in different states to my loan documents, so because they prefer it that way.

 

Rod Khleif: Did you go Freddie Mac?

 

Anna Simpson: Yes. [overlap talk]

 

Rod Khleif: Yeah, okay. That’s why, okay, got it.

 

Anna Simpson: Yeah, because these are smaller transactions, so…

 

Rod Khleif: Mm-hmm. Yeah, and guys, those of you listening. We had James Eng from Old Capital. I know you were interviewed on Old Capital. And James talked about… You know, with Freddie Mac, if you don’t have the experience you can actually bring in a property manager to satisfy that requirement under Freddie Mac.

 

You can’t with Fannie Mae. You have to actually have a key principle with experience but with Freddie Mac you can actually bring in a property management company if they fit the profile that they’re looking for to satisfy that requirement.

 

If you’ve got the net worth and the income and you contract with a local property management company like I said that meets their profile you can actually get a Freddie Mac loan but you’re already a KP. You have that experience.

 

Anna Simpson: Right.

 

Rod Khleif: Okay.

 

Anna Simpson: It helps a lot to get a good terms on the loan. In my first deal, I actually invited another person to be my KP and co-sponsor because he got several Fannie loans on his resume. And it always helps and that’s also part of the team. The people that you ask to co-sign on the loan with you. It’s also important that they bring a good resume.

 

Rod Khleif: Sure.

 

Anna Simpson: Because I have net worth liquidity. I have some experience. Well, if I bring someone else with even more experience, that’s even better.

 

Rod Khleif: Sure. Sure. Just make sure that the deal closes and there’s no surprises, no last minute rate changes or anything that pops up. There is this absolutely a subjective nature to lending. It’s not completely empirical. Their opinions matter.

 

Anna Simpson: Right.

 

Rod Khleif: And the more you can bolster your loan package the better you are.

 

Anna Simpson: Well, the good deal, of course, that now I may be able to also bring value to other people because now that I have a three agency loans on my resume. Now, of course, some other people ask me if I would like to be KP for them. That works both ways. You get your Freddie or Fannie card and then you’re able to help other people with that. So, that’s great.

 

Rod Khleif: Now, that absolutely is great! You’ve got another deal about to close. Tell us about that.

 

Anna Simpson: Right. We should be closing in a couple of days. That’s 76 units in Forth Worth and I’m very excited about this deal.

 

My first deal was a syndication. A group purchase when I accepted several equity partners. And this group is actually tenants in common structure.

 

Rod Khleif: It’s a partnership, basically. You didn’t have to do any SEC. Anything with the SEC because everybody is actively involved.

 

Anna Simpson: Correct.

 

Rod Khleif: And guys you can do that. That’s a high level difference between a syndication and a partnership. And you did this as tenants in common and if everybody has an involvement in the deal in some fashion. They sign on the loan or they are actively involved in the decision making, you don’t have to do a syndication. You can just do it as a partnership like you just did. That’s awesome! Fantastic.

 

Anna Simpson: Correct. And in our case, we actually were not able to do this syndication. And the reason is, I’m going to give you some technical details. One of my partners, he is doing 1031 exchange, so to be able to qualify for that, he has to sell real estate and buy real estate.

When you do syndication by definition, you’re buying shares in LLC. You cannot complete 1031. Our case was a little bit more complicated. And that’s why we decided to not go syndication, not go partnership but actually go straight teak.

 

Rod Khleif: Yeah.

 

Anna Simpson: So, that’s interesting.

 

Rod Khleif: In my opinion, I like those deals better. Frankly, you don’t have to spend the money. You’re not under the scrutiny. You don’t have… It’s just a partnership.

 

Now, of course, you wanna make sure that the partnership documents are… Everybody’s protected and you have somebody that’s done a lot of those, put it together and include a lot of things you have to think about when you’re doing a high-level partnership like that. Buy-out provisions and how the decisions are made, who plays different roles in a group, if any

 

[00:10:03]

 

Anna Simpson: Right.

 

Rod Khleif: And all that.

 

Anna Simpson: Yes, in our case, these two partners of mine, they are from different states. And I am playing local goods on the ground in these deals. And that’s very good for all of us because they would otherwise be unable to actually supervise the deal. And I otherwise will not be able to purchase the deal of that size by myself. It worked together for the three of us to put our money together and our resources and my time, of course.  

 

Rod Khleif: Yeah.

 

Anna Simpson: It all worked out good.

 

Rod Khleif: This is adding a ton of value to my listeners ‘cause they’re all able to get ideas from this. This is great, that it’s a unique structure. Now, did you say you have another one on the horizon that you’re…

 

Anna Simpson: We are looking for other deals, as well.

 

Rod Khleif: Okay.

 

Anna Simpson: Usually submitting LOIs. For my next one will be in a week, on a bigger deal. It’s just constantly… Once you reach one goal, you have to set a bigger one and go for it [chuckle].

 

Rod Khleif: That’s right. Yeah, anybody who listens to this podcast knows how I feel about goals. That’s a great segue because I know you’re a big proponent for mindset.

 

You’ve got your psychology degree, it’s obviously a love of yours. Let’s talk about that a little bit ‘cause my listener base is… There are a lot of people that have not taken down their first property yet. And I know many of them may have limiting belief system but I call them BS limiting belief systems.

 

[chuckles]

 

Rod Khleif: And or fear of the unknown, fear of failure. And some of the analytical ones have fear of rejection. How would you speak to them?

 

Anna Simpson: I think, you always have to do this SWOT analysis, I guess. To evaluate what do you have and to what you not have. And also make a road map for yourself. Like [overlap talk]…

 

Rod Khleif: Okay, let me stop you for one second. Guys, the SWOT analysis is something that entrepreneurs and business people use to evaluate where their business is going. And the SWOT stands for strengths, weaknesses, opportunities and threats. And it’s a great exercise to go through. I love that you suggested that. That’s never come up before but you can actually do it as it relates to you.

 

Anna Simpson: Right.

 

Rod Khleif: What are your strengths, what are your weaknesses, what opportunities do you see and what are some threats? Love it. Thank you.

 

Anna Simpson: So, great! That’s what I did for myself. And then of course, you have to evaluate your path. Like where you are and where you want to be. Then make a plan how to get there. For me, what I usually like to say, do not create a bicycle just to find someone who’d been there, done that, and follow their steps. That’s what I did for myself.

 

Rod Khleif: You found a mentor and you had somebody to learn from. And, yeah, this is not a simple business. I mean, I’m not gonna say it’s insurmountable. Obviously, it’s not. It’s definitely doable but you can’t dabble at it. And if you’re getting into the millions of dollars, you absolutely should have some oversight and somebody that’s done it before that can keep you from making big mistakes.

 

Anna Simpson: That’s what I learned from Robert Kiyosaki because that’s how it all started for me. He said, “Just find someone who’d done it and done it successfully.” And since we are talking about mindset, there are a lot of people who I call negative Nancies, nay-sayers. Do not listen to them because they’re always going to say why you’re not going to achieve what is it that you are trying to achieve. Listen to someone who had done that and done it successfully because that’s the only way to win here.

 

Rod Khleif: Yeah.

 

Anna Simpson: What I go for myself, I know my goal, I surround myself with the right people and just look at all of them because they’re always a lot of people to learn from. And each person can be your teacher.

 

I choose my teachers. I like this person, what he done, I like this person, so I learned what they did and follow their path. That’s the best. And try to find someone who is successful because they usually will be positive and optimistic.

 

Rod Khleif: No question. Yeah, be careful who you allow to influence you.

 

Anna Simpson: Absolutely.

 

Rod Khleif: And stand guard at the door to your mind. Sometimes it’s a family member even. Love them but don’t allow them to influence you. This comes up all the time. And no question, team, well, not just team but who you surround yourself with is who you become.

 

Anna Simpson: Oh, absolutely.

 

Rod Khleif: It’s just a fact of life so the four people closest to you, take a look at how much money they make and who they are because that’s you. That’s who you’re gonna become, if it’s not already you.

 

Anna Simpson: That’s what I like saying, yeah. You become one of these people that you surround yourself.

 

Rod Khleif: No question. Pick a high peer group because that’s how you escalate. I remember when I tell the story, I drive in my Ford four-door Granada and I work for a guy and he had a Corvette. And I elevated my thought process mentally because we all… It’s very common to have financial limitations that we place in ourselves. You make what you must make and you need to elevate that must.

 

Anna Simpson: Right.

 

Rod Khleif: And you do that by surrounding yourself with people, so you can see that habit. So, you can see it can be done.

 

Anna Simpson: I love it. And what I want to add also, I think it’s important to always push your limits because once we are comfortable, we are not making progress. This feel like sometimes when something very difficult comes and I feel like, “Oh my, god! How can I overcome it?”, and then I just tell myself, “If it was easy, everybody would be doing it.”  

 

Rod: [chuckles]

 

Anna Simpson: It is difficult for the reason and that’s why I have to go for it and go over. Go over my fears and just do it because only when you’re in a discomfort that’s when you reach something. Every time when I feel like something is difficult, okay, that’s it. I just said that’s it…

 

Rod Khleif: I love that you’ve set that trigger for yourself. That is fantastic way to twist things that threaten you… Is to make that declaration. If anybody could do it, if it was easy, anybody could do it.

 

Anna Simpson: Right.

 

Rod Khleif: Love it! I absolutely love that. That’s very good. I know that if someone is struggling and hasn’t taken action, what would you say to that person if somebody’s thinking about this business? Pretend you’re their coach, how would you coach them?

 

Anna Simpson: Well, there are, sometimes people come to me and ask, “How do I start, what do I do?” Again, I would just start by saying, “Where you are? And where you want to be?” And to just find someone who might have been there because sometimes it’s difficult for people to relate if someone is very successful or wealthy and it’s difficult to relate. Maybe, find someone who did just that. If this person is struggling, maybe give an example of someone who’ve been there but they reached something now.

 

Rod Khleif: Well, you are setting an example today, definitely.  And we don’t have a lot of women on the show and that’s not by design. That just, I guess, it’s the business. It’s a real treat to have you. And you’re such a treat to have on the show and you’re successful and you’re motivating. I know you’re gonna inspire people.

 

And guys, you know we’re talking about the SWOT analysis. I want to hammer something home. Everybody has strengths. And play to your strengths and shore up your weaknesses with your team. Find people to help you with these other components of the business because, like Anna said, it is absolutely a team sport.

 

What books do you gift the most to people?

 

Anna Simpson: Everything started for me with Robert Kiyosaki.

 

Rod Khleif: Right.

 

Anna Simpson: Whenever people say, “Well, how do you even start in this business? How do you set your mindset?” I said, “I just basically read this, Rich Dad, Poor Dad. And if it doesn’t do anything for you, nothing will help.”

 

[Laughter]

 

Anna Simpson: ‘Cause if you read that Rich Dad, Poor Dad and your mentality doesn’t change immediately, I don’t know.

 

My daughter was eight years old; now, she’s nine, when she read it by accident because I actually bought it for someone else. She started to read it and she started to ask me all these questions. And I said, “That’s good.”

 

Rod Khleif: Oh, I love it.

 

Anna Simpson: Because that’s how you start. And then, of course, there are a lot of other books but for me, I do not have too much time. What I do to educate myself and to motivate myself, I listen to a lot of podcasts because nowadays with a busy life, it’s difficult to just sit down with a book, quite honestly. Every time I drive or do something, I’m just listening to the podcast.

 

Rod Khleif: Yeah.

 

Anna Simpson: And I have a choice of maybe 10 podcasts. And now yours is one of them as well.

 

Rod Khleif: Oh, that’s sweet. Thank you. Thank you.

 

Anna Simpson: That’s what I do because you can always find time to listen to something and educate yourself because you maybe thinking, well, real estate, you don’t have to get formal education. Well, maybe not but you have to help yourself.

 

Rod Khleif: Don’t be a dabbler, though. Dabblers get crushed. If you’re not gonna… You don’t need a formal education but you definitely need to educate yourself.

 

And I tell people, you take two paths in this business. You do the book study, or the courses and then you’re after evaluating deals and making relationships. And you have to do both. You can’t do one or the other.

 

The analytical people love to do the book study, and the courses, and evaluate deals but they’re not great with the relationships. And the people like me, the type A-squared people, make every mistake in the book because they didn’t take the time to learn the business properly. And I’m not afraid to admit it. I’ve made every possible mistake you can make.

 

Anna Simpson: It’s essential to not treat it as a hobby because…

 

Rod Khleif: Right, that’s what I meant.

 

Anna Simpson: After all this is not a hobby. And the reason is, if you buy a house, what do you stand to lose?

 

[00:20:00]

 

Anna Simpson: Maybe money. But if you’re a deal syndicator, and maybe you have 20, 40 people that invested with you, you do not have a chance for mistake.

 

Rod Khleif: No, absolu…

 

Anna Simpson: That’s going to be the last deal. And you’re gonna to have to move to another state.

 

Rod Khleif: Right, yeah. No, you absolutely have to…

 

Anna Simpson: You have to educate yourself.

 

Rod Khleif: You have to educate yourself. That’s the point and like I said, two ways. You have to be out there and you have to do the book study. You can’t do one or the other.

 

Let me ask you this, you are very driven. What makes you jump out of bed in the morning? That’s a question I like to ask sometimes. And I definitely wanna hear your answer.

 

Anna Simpson: Well, it’s just that, this business excites me a lot. I think, you can really reach a lot. It’s not like maybe having a job where you have a certain limit, above which, you cannot go. I think this business almost has no limits. The only limit is what you set yourself for this business. And that’s very exciting because if you can go and reach heights, I think, that’s exciting.

 

Rod Khleif: Yeah, now.

 

Anna Simpson: Because as a human being, we like to grow and we like to achieve. For me, it’s ultimate achievement to be successful in this business. When I think about this, it keeps me moving because I think it’s exciting.

 

Rod Khleif: Now, it is exciting and you guys have heard me say on the show, “You need to love it.” If you don’t love it, associate pleasure with it. And I tell people equate it to hunting for treasure because it really is. And it’s critical that you enjoy it because otherwise go find something else to do. Life’s too short…

 

Anna Simpson: I agree with you.

 

Rod Khleif: … To do something you don’t like. Go ahead. Now, please…

 

Anna Simpson: You just have to be passionate about this. That’s kinda what you’re saying.

 

Rod Khleif: Yes.

 

Anna Simpson: Because, you see, this business, there will be adversity. There will be difficult times and whenever you hit the problem and you’re not passionate about this business, you may potentially, actually, go out of business.

 

Rod Khleif: Yeah. It could be a seminar.

 

Anna Simpson: Yeah.

 

Rod Khleif: It could be your last seminar in this business.

 

Anna Simpson: Yeah.

 

Rod Khleif: Yeah, I think goals are critical. I think, knowing what it is you want and as importantly why you want it is critical. I use pictures of my goals. What do you do to motivate yourself? Do you have your goals written out? Do you have pictures? What do you do there?

 

Anna Simpson: Yes, I do some New Year’s resolutions and it’s not notorious like some people do but I write down my goals. And I put timeline to them because that’s the only way you’re going to go for them.

 

I do my goals, I break them into smaller goals. Let’s say, this is for this year but to reach this goal, it’s like how do you eat the elephant? You eat the elephant by piece. You break into little pieces and you just go by little piece and you have a timeline for each because if you don’t, you’re going to do, “Well, I’m doing okay.” Well, maybe you’re not because you didn’t just hit your goal timeline.  

 

Rod Khleif: It’s like saying I’m gonna lose some weight but you didn’t say how many pounds by what day. Now, goals have to be clear and measurable, guys. They have to be measurable and I love that you shared that. And I love the fact that you shared, some of these goals are big! Like you said, how do you eat an elephant? One bite at a time. You break it down, I love it.

 

Anna Simpson: Right.

 

Rod Khleif: Great feedback. Okay, what’s the question I haven’t asked you that you wish I had?

 

Anna Simpson: Mmm [chuckle]… I don’t know.

 

Rod Khleif: Okay, well, what’s next for you? Bigger properties?

 

Anna Simpson: Yes. I mentioned I do have the IRA money that I invest passively but my goal right now, is of course, to look for other deals as a deal syndicator.

 

Rod Khleif: Right.

 

Anna Simpson: And buy them as a group purchase. That way, of course, not only I benefit from it but also the equity partners that I invited for my deals.

 

Rod Khleif: Sure, you’re gonna syndicate and bring in…

 

Anna Simpson: Yeah, because the, essentially, equity partners, they do not have the opportunity to purchase those bigger commercial deals by themselves.

 

Rod Khleif: Right.

 

Anna Simpson: It’s a great opportunity for all of us to take down the larger assets together.

 

Rod Khleif: Sure.

 

Anna Simpson: That’s my goal. That’s what I’m going to be focusing on.

 

Rod Khleif: Oh, good luck with it. It’s exciting. The snowball is rolling down the hill now.

 

Anna Simpson: Right.

 

Rod Khleif: If people wanna reach you, they can reach you at simpsonmultifamily.com?

 

Anna Simpson: Correct. Yes.

 

Rod Khleif: Alright. Fantastic. Well, Anna it’s been a real treat. I can’t wait to see where you are a year from now or two years from now.

 

Anna Simpson: Thank you.

 

Rod Khleif: I’m sure it’s gonna be extraordinary. Well, thank you for being on the show and I hope we can stay in touch.

 

Anna Simpson: Thank you. I appreciate.

 

Rod Khleif: Alright, bye-bye.

 

[music]

 

Thank you for listening to the Lifetime CashFlow Through Real Estate Investing Podcast. If you’ve enjoyed the show, please subscribe, and then take a moment to visit iTunes and leave a five star rating and review. For more resources to connect with us further, please visit our website at lifetimecashflowpodcast.com. Tune in next week for our next show.

 

[music]

 

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