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Show Summary
In this conversation, Steve Olson shares his extensive experience in the real estate industry, discussing his journey from entering the market in 2007 to focusing on new construction and development. He emphasizes the importance of understanding risk in real estate investments, particularly in new construction, and highlights the advantages of investing in fourplexes as a strategic entry point for new investors. The discussion also covers the evolving landscape of real estate investing and offers advice for aspiring investors looking to navigate this complex field.
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Investor Fuel Show Transcript:
Steve Olson (00:00)
I’ve probably done as many, if not more, fourplexes than anybody in the country because we ran with a very specific niche on that for a long time, about 4,000 doors, right? Lots of fourplexes in four different states. And it’s true, just like single family is a springboard into small multifamily, small multifamily is a springboard into development andyou for example, apartment complexes or build to rent communities.
Dylan Silver (01:59)
Hey folks, welcome back to the show. Today’s guest, Steve Olson, is with The Peak Group focusing on new construction projects ranging from single-family homes up to fourplexes, many times in larger communities. Steve, welcome to the show.Steve Olson (02:17)
Glad to be here, Dylan. Thanks for having me.Dylan Silver (02:20)
It’s great to have you on here. ⁓ How is Salt Lake right now? I’m in a very different area of the world. How’s Salt Lake these days?Steve Olson (02:28)
⁓ it’s hot. Yeah, this is the hot time of year, but the leaves are starting to change. It’s not gonna be hot for much longer.Dylan Silver (02:38)
It’s interesting because this was a weird one for me. I moved out, I actually live in Santo Domingo in the Dominican Republic. I moved out here in August. It was actually a cool year relatively speaking in Dallas. I lived in DFW this last year and it was relatively cool so I don’t know if we flip-flopped with some other areas of the country. At the top of the show here I typically ask folks how they got involved in the real estate space.Steve Olson (03:06)
⁓ man, I mean, we don’t have that much time, but I’ll do my best. ⁓ You know, I started working in the real estate business, call me a crazy person, in 2007. And things got really interesting not too long after I got started. So, ⁓ ever since 08 when things melted down, I’ve been involved in anything from single family to development to even some of those… ⁓bulk foreclosure packages back when you could buy big chunks of notes from Fannie Mae. And so yeah, kind of dabbling through that and finding my way through that crisis, I really got into the rental side. And more specifically since 2014, that’s when I really got into new construction and development. Like being able to control the process front to back as much as you can when…
cities and municipalities are involved. You never have full control when when those guys get involved.
Dylan Silver (04:07)
Let’s talk about going from getting in in 2007 to then getting into new builds. Walk me through some of the transitions and then how you ended up getting into new construction.Steve Olson (05:08)
So, you know, there’s this saying that goes around that it takes just as much work to do a single family deal as it does a large multifamily deal. And it’s kind of true, but it leaves a lot to be desired. it was true enough for me, right? You do underwriting, you do all these things, all this vetting, and you can really do a lot of work for one small house.Dylan Silver (05:19)
Right.Steve Olson (05:39)
and not a ton more for a large development, right? And then once you start beginning to understand that process and become comfortable with the risk, I think it lends itself to development. I was talking to somebody about this earlier today, where if you are going to be in new construction and development, you need to be the kind of person that can start down the road and not yet fully understand where it’s going to lead.If you’ve got to check all the boxes and have everything be certain, new construction and development is not for you. So you’ve got to be comfortable with that risk profile of, I’m going to go down this road, I’m going to hit some potholes, I’m going to figure it out.
Dylan Silver (06:22)
It’s one of the things, right, with risk and reward, right? I’ve often, as a Texas licensed drilltor, I’ve often thought about the folks who are looking at commercial, right, and want to get into commercial. But of course, with commercial, the transactions are fewer. There might be some more meat on the bone, but also there’s a lot more potential for risk.And if you have one bad commercial deal that can kind of do you in at least for some time. And so in the new construction space, this is interesting because for me, I’m a distressed real estate guy. I came from the wholesale background. ⁓ Really, so many people can probably relate to this. Some other people may find this funny. It was the whole thing where, hey, I was working a different job actually in the automotive space. And I was thinking, well, I want to start looking at buying a house. Homes are expensive and they’re no less expensive right now.
Steve Olson (06:48)
Yeah.Dylan Silver (07:13)
And real estate just kept coming to my mind and then also through Google searches how to build wealth real estate seemed to be the way so I said, okay Let me go try this wholesale thing just really by luck that I ended up getting involved in that space andThen slowly over time and you’ve probably seen the same trend from about 2023 up until now it’s and even then it wasn’t too easy. It’s become trickier and trickier and trickier to do fix and flipping. So then I started to kind of have to pivot away from finding these distressed properties where the flippers that I was working with weren’t doing that as much in Texas to then looking for like infill lots and undeveloped land and burnt down houses that needed to be torn.
Steve Olson (07:33)
youDylan Silver (07:59)
down completely and a new build gone up. So then I started to really really look at ⁓ new constructions and new builds and see how I could get involved in you know kind of land deals if you will and say hey I don’t necessarily know too much about this space but the new build seems to be the way to go.Steve Olson (08:18)
Yeah, I mean, you do have, like I said, it’s true and it’s not that you have more control, but a lot of people subscribe to the theory of buy assets that are already performing but are distressed and you remove a lot of the risk. And I think that the risk in development, it’s just that entitlement process of can I do with this land what I want to do with this land? I mean, that’s what it means. What are you entitled?legally to do with the land. And, you know, that can be a little ⁓ open-ended, but for somebody who’s willing to go through a rezone or go through that whole process, there’s a reason people do it. Higher risk, higher reward. And, you know, I’ve just found you kind of have that in you or you don’t.
Dylan Silver (09:43)
100%. I think, ⁓First, ability to get into real estate in the initially is challenging, even if you’re not doing new builds or multiple units, right? Building out subdivisions really, even if you’re not involved in that, getting into real estate as a wholesaler was no easy, small task. And then to continue to grow on that and then to kind of see that market become trickier and trickier for people who are just starting out having to pivot myself, I can
I can speak from kind of bootstrapping it and saying that anyone who’s been involved in real estate you mentioned 2007 as long as you have you’ve had to pivot walk me through some of that pivoting What’s that been like was there a deal was there a time period or was it? ⁓ Maybe a season in a year where you said, you know this strategy I don’t know if I can continue to do this or I may have to go do something slightly different
Steve Olson (10:40)
You know, it’s funny you say that because I might be in the middle of another pivot right now. ⁓ And we’ll see. This one doesn’t necessarily mean you stop doing what you were, but I’m kind of adding to it. But ⁓ I have made a great living in the fourplex world. It’s this really specific niche ⁓ is where single family and multifamily meet. In fourplexes, you getA lot of the benefits of single family, meaning they’re probably a little more liquid, you can get fixed rate debt on a fourplex, right? You have multiple tenants. So if you go unoccupied, you have to really take a hit on occupancy to be struggling. And that’s a really good benefit. And so you see a lot of that kind of come together. And I got into that when the retail investor was extremely interested in that.
because they wanted those benefits, but they wanted those really low rates that were coming with the 30 year fixed rate debt. so once I saw the light on that and the demand for it as an owner and a developer, for me, don’t want to say I was done with single family because I still do own some single family. I’ve used single family kind of like, I have a friend who works for National Car Rental and he told me that their business model
is not making a bunch of revenue off of leasing cars, although they do that. The whole point is to sell these cars a couple of years down the line and leasing them along the way is how they carry it. And so I think single family is a springboard, right? You stay in the game by leasing them, but your money is going to come from an increase in value and principal pay down and selling later on. So then you can transition into multi, which is that’s where we make cashflow, right?
Dylan Silver (12:15)
Right.Steve Olson (12:36)
And so that’s kind of the realization that I had. And another one I’m going through right now too, you know, it’s my, I’m getting a little older. I want less hassle is I love triple net flex space, right? Stuff that doesn’t cost a lot to build that gives you that flexibility where the taxes and insurance and those things are somebody else’s problem where that gets as close to completely passive as you possibly can get. Now, granted, when the unit comes up for lease and you’re having to remarket, that’s another thing, butI’m starting to really expand into that and we’re doing some cool things taking that to retail investors who want to be totally passive on a triple net basis.
Dylan Silver (13:13)
I’m a big fan of fourplexes. You mentioned four quadplexes, right? I have heard this from lenders. I’ve heard this from ⁓ investors, both younger and more experienced, that fourplexes, quadplexes can be a way for folks to get into real estate when they might not necessarily even qualify for some other… ⁓loan products, I thought that was so mind blowing the first time I heard that, but then it started to make more sense, because if a bank is gonna get four doors, if this person defaults, they’re gonna get four doors versus one, and then it’s still, like you mentioned, and honestly, this is outside of my area of expertise, but like you mentioned, it qualifies for a lot of the more traditional loan instruments, because it’s one to four units, it’s not yet five and up, right?
Steve Olson (14:00)
Yeah, totally. I don’t say this to, well,I’ve probably done as many, if not more, fourplexes than anybody in the country because we ran with a very specific niche on that for a long time, about 4,000 doors, right? Lots of fourplexes in four different states. And it’s true, just like single family is a springboard into small multifamily, small multifamily is a springboard into development and
you for example, apartment complexes or build to rent communities.
Like I’m doing a deal right now. This one’s in Idaho. I’m the general partner on a 48 unit apartment complex. And a lot of times when you’re trying to get, for example, Fannie Mae or HUD financing, they need to see a track record. They need to see experience, but you’re kind of going, well, if you need to see experience on running an apartment complex, but I’ve never done it before, what, you know, this is a chicken or the egg deal.
But fourplexes are a way where if you’ve got the down payment in the credit score, you can buy it regardless of track record, right? The lenders will give you that money. So you start knocking down a few of those, right? You are operating some small multifamily. There is a narrative that you can tell for the big loans on apartment complexes and such. it’s springboard after springboard. If you want to, a lot of people want tons and tons of doors. I want to manage some big fund. Cool.
But a lot of times, if you had, I don’t know, eight or nine or 10 free and clear fourplexes, you’re making more money with a lot less hassle. And you’re the only, you you’re the partner, you don’t answer to other investors. So you can think about it that way too.
Dylan Silver (16:24)
I want to ask you about, mentioned the springboard, right? It’s an interesting thing because I come from the wholesale background, I’m a newly licensed realtor, and I’m thinking about, okay, I gotta get my name on some properties, I gotta get some…I gotta be a property owner. work with all these investors. I gotta put myself in the game, right? But then I also think, I work with so many fix and flippers who go to note buying. I know so many note buyers who go to distressed debt or go to commercial or go to land and RV parks, right? Texas, right? Texas Licensed Realtor, so much land, right? I’m curious to get your perspective on some of these shifts.
If something has, if somebody has something that maybe they’ve done that maybe they feel like is more transactional based, like for instance, being a realtor, right? I’m a realtor myself, but being a realtor, you can’t just turn off the lead flow and then continue to make money. It’s based on transactions. Would you…
Recommend to these folks. Hey, you’ve got a business that is Transactional, but you’ve scaled it to a certain point Let’s figure out how to automate this or would you say conversely which is I think what a lot of people Think of when they’re in this position Let me go to a different asset class where it is truly more passive where I don’t have to be the producer so to speak
Steve Olson (17:47)
I don’t know that there’s like a across the board, right answer to what you just asked. I think it’s a matter of personal preference, right? I used to own a home Vestor franchise and after a year I was like, I don’t like this, right? ⁓ you know, it involved a lot of wholesaling and chasing down really distressed deals. taught me some very, very valuable skills that I still use, but I also knew I don’t want to spend my life doing this. Right. And so I think,Dylan Silver (18:02)
Yeah.Steve Olson (18:17)
The cool thing about being an agent and being transactional and working on a lot of deals is you get to dip your big toe in a lot of different kinds of deals. And you may have a skill set that lends itself more to one of those than the others. You get to experience it a little bit without being all in, right? And taking on all the risk and everything that comes from running that kind of a business. So I definitely recommend to people get involved as an investor-friendly agent.work on some commercial, work on some residential, work on some industrial, and chances are you’re gonna start to see, hey, you know what? I like working with these kind of people on these kinds of deals over there. And I think that’s why people springboard, why they graduate, so to speak, because you’re a jack of all trades and a master of none, but after a while you realize, okay, I’m gonna master this one. I’ve seen it enough to where that’s where I wanna be.
Dylan Silver (19:10)
Yeah, they become, I mean, passionate about it. For me, ⁓ I feel like that distressed area, just loved initially the idea of being able to get in, know, cash for keys type of thing. But then I saw, you know, there’s this real need for, you mentioned Home Vest or franchise. You probably dealt with a lot of distressed properties, I imagine. And so it’s…Steve Olson (19:31)
That’s about all wedealt with,
Dylan Silver (19:32)
Yeah, it’s one of these things where you see so many of these cases where if it’s not the the wholesaler if it’s not that distressed investorThis person’s gonna lose their property. It’s gonna become a huge, maybe potential legal quandary for them. You’re bringing families together in many cases. You’re like a therapist, mediator, investor. You know, have to be able to explain it to them. So many different hats. So really, my hat goes off to everyone in that space, and it’s something that I’m very passionate about. But Steve, we are coming up on time here. Where can folks go if maybe they are interested in…
a new construction themselves, maybe they’re in the Salt Lake area, maybe they’re in DFW or in any of the areas where Peat Group operates, how can they reach out to you?
Steve Olson (20:18)
Yeah, it’s pretty easy. Just go to thepeak.group. That’s our website. You can see what we’re working on there. New properties hitting there all the time. If you’re an investor who just wants to invest instead of go source this and do it on your own, we’re a great fit.Dylan Silver (20:34)
Steve, thank you so much for coming on the show here today.Steve Olson (20:36)
Thank you.
