How to Win Multifamily Deals with John Funderburk

John Funderburk (00:00)
I’m a full time person. Some syndicators have a W-2. I am a full time real estate investor operator. I do have another investment opportunity that I’m involved in. I’m a general partner of, but I am full time in multifamily real estate investing.

Quentin (00:17)
Love it, man. But then let me ask you this. What are you most focused on solving or scaling next? Like, what’s the next real goal?

John Funderburk (00:24)
So our goal right now is we think that there’s roughly a roughly an 18 month window here to acquire properties. We feel like most economists feel like the interest rates are going to compress here coming really, really soon. Eighty four billion dollars of multifamily real estate came due this year. Eighty six billion comes due next year. So what we’re seeing right now is a lot of operators loans, their debt is coming due.

And we’re able to buy properties, we’re offering roughly 30 to 40 % below peak market value for properties, and we’re winning the bids.

Quentin (02:31)
Hello everyone. Welcome to the Investor Fuel podcast. I am your host Q Edmonds and I always say it and I mean it every time. I’m excited. I’m excited to be here today. I’m excited about our guests. You know, I get the chance to interview some of the most incredible people and today is no short. You know, I have somebody who is full time in the multi-family syndication. I mean, this guy, you know, researched property. This guy knows what he’s doing.

John Funderburk (02:53)
music.

Quentin (02:58)
He has a lot of different things going on and you know how I like to do it. I like to tee people up, but I also love when they talk about themselves, right? This is the platform when people get to highlight themselves and not feel bad about it, right? Because we want our guests to get the best information and we got the best people. And today is no different. So I want to introduce you all to my friend, Mr. John Funderburk How you doing today, sir?

John Funderburk (03:02)
I like to do it. So I can tell you how to do it. it’s basically a practice. You get to do it. So, you know, it’s a practice.

Great, Quentin. How are you?

Quentin (03:26)
Man, I’m doing great, man. I’m doing great. It’s been fun chatting you up, you know, in the pre-podcast. And I’m excited, man. I’m excited about our listeners getting to glean from your knowledge, man. So if you don’t mind, brother, I want to dive in. Tell the people, know, people, they may not be familiar with your world. I want you to bring them into it. Tell them what’s your main focus these days. And man, what markets are you rock reading?

John Funderburk (03:51)
Awesome. Thanks Quentin. Yeah. So my name is John Funderburk I’m with Rampant Lion Capital. I’m the founder and CEO of Rampant Lion. So we are syndicators of multifamily. So we acquire multifamily buildings either through a direct syndicate, usually direct syndication or fund level syndications. have, we actually have one of those going on right now. So we purchase properties typically in the Sunbelt region.

We have a significant focus on Charlotte. A couple of my business partners are Boots on the Ground in Charlotte, which we think is important for to have operations there in that actual market. gives us some in-depth market knowledge, but also gives us the ability to go to the properties ourselves without having to travel all the way across the country. we essentially underwrite Prover. ⁓ We research properties. We have broker relationships.

search for off market properties constantly. One kind of unique thing that’s going on right now is some of the on market properties are better than the off market properties. So it’s a very kind of a unique situation in the multifamily world right now where a lot of people talk about off market deals and how those are the best deals, but we’re seeing some really good deal flow right now. And that’s basically how we do. we…

have relationships, we underwrite the deals, we acquire the deals, we raise the capital from a limited partner, general partner structure. We have some equity partners that come into our larger deals. And then we acquire the properties, we operate them, and then we sell them or refinance them in order to be financially free. That’s the entire goal. One of the things that I typically say to people is,

My goal is to pay as little in federal income tax as humanly possible.

So that’s one of the things that people don’t know about real estate investing is the depreciation offsets and the tax play from a real estate perspective is extremely beneficial, both for us and our investors. So that’s kind of who we are, how we operate, and I’m looking forward to digging into things.

Quentin (06:46)
Absolutely, What I love, the word that you use, the partner word that you use, man, I love how you talk about how you’ll bring people in. You can bring them in as co-partners. you talked about how you invite people to the, and partners to the call. I love how you want to gain trust with the community that you’re building. That’s what really struck my attention as we was talking earlier,

John Funderburk (07:08)
Yeah, one of the things that that a lot of people that we talk to say to actually I get some criticisms from this from time to time is how open I am with people. I’m very transparent when it comes to our operations. We invite all of our partners to every single call that would operational call that we have that we have with our property manager, our insurance people, anything that’s going on. We send out.

constant updates to all of our partners. I say constant on a weekly basis. We’ll send out updates to all of our partners. I do get, had just this morning, I had an hour and a half long call with one of our co-GPs on how a property is going and some other investments that we’re involved in as well. And it’s just an open call. We talked about our kids for a long time. So I like to get to know people in order to help them in

really anywhere that I can possibly help them. So if we can help somebody that comes into a deal at a small level, if we can help them be an aspiring GP and go out and be the largest department complex operator in the nation, that’s a win for us. Even though we may not be involved in those deals, if we can give back to people,

That’s always what I’m trying to do. So I have a small network of 15 to 20 people that we coach free of charge. come into our deals and we like to know that they are aspiring to do this. So not everybody can get into it, but the big thing for me is just giving back and helping as many people as we possibly.

Quentin (08:42)
Yeah, no man, I love it. I appreciate it. I love where your head is at. I love the connection that you’re making. I love like the coaching, like giving back to the small group to make sure in a sense kind of nobody is left behind, right? And so that’s not easy always, you know, being the person in this environment that really cares, right? So I would love to know man, what’s been the key to keeping that machine running smoothly, brother?

John Funderburk (09:06)
I you know, it’s it’s being very so it’s patience patience as well as diligence. So if you look at the multifamily market and the way it’s gone there multifamily got really hot during covid the market heated up interest rates were at its lowest and we were extremely patient 2023 interest rates were as high as they could possibly get and we were patient and not not acquiring anything.

So we knew that once we started to do deals and started acquiring properties, they were going to be the right deals, the good deals. So the other thing is diligence, being open to talking to really anybody. It doesn’t matter who it is. I will get on. I tell people all the time. I answer my phone. I’ve had people call me from other podcasts that I’ve done just out of the blue. And I answer the phone and have a three hour long conversation with them.

Just about what we do how we can work together What their deals are like what our deals are like? I tell people I answer my phone now I’ve kind of reigned that back in just because of so many spam calls that I get nowadays But I’m in the real estate game. I’m a people person I answer my phone and talk to people and that’s really in today’s digital age I find that that’s that people have a craving for just

Quentin (10:09)
Yeah. Yeah.

John Funderburk (10:23)
Personal interaction with another person that cares about what they’re doing that can offer some insight It may not be I may not tell them the right way to go They may not appreciate it, but I’m gonna be honest with them. That’s that’s my entire philosophy

Quentin (11:14)
I love it. I love it, man. Absolutely. So listen, let me ask you this show, know, every operator has a moment where things get real, right? Maybe a day will go sideways or a time when you had to pivot fast. Mr. John, you mind sharing one of those stories with the listeners, man?

John Funderburk (11:31)
Yeah, I look some of the deals can go sideways really fast. So in some of our in some of our properties, we learned that micro managing the process may not be the best thing forever. So squeezing every single penny out of every single thing that you get is not always the best thing to do. So as as newer operators, you may want to get in and just start

digging in and think about self-managing the property, managing the property yourself instead of hiring a property manager to do it or getting in the middle of the property manager, managing the property. I would just caution anybody that that’s not always the best thing to do. Certainly holding your property manager to high expectations and managing them accordingly and attempting to work with them in order to benefit the properties that you’re doing.

I would advise everybody to work with as many professionals as you possibly can, especially if you’re new to the game, regardless of what you’ve done in your previous life and what your business experience is and stuff like that. I’m a business person. I’m not a property manager. I’m not, I’m not going to get in and manage. I’m not going to get in and interrupt the property manager on how we should do work orders. That’s not, that’s not my role.

⁓ My role is to set an expectation for the property manager and then manage that expectation so they so they can put it in and find success out of what they’re doing. We pay people we pay professional people to do things. Let them do it. So Charles Koch actually I came I came out of the oil and gas industry as well. Charles Koch has a great book. He’s his his philosophy is market-based management. It’s putting the right people.

in the right positions to succeed. And I will tell you that if you apply that to every business that you’re in, you will be successful.

Quentin (13:26)
See Mr. John, you’re serious about making those connections. You’re serious about really educating and empowering people. Like you walking and talking, man. I absolutely love it, man. I absolutely love it. And this is for me, this is why I know you’ll be in it for the long term, man. You’re just not dabbling. You’re really about that connection, And I love it, man. I absolutely love it.

John Funderburk (13:46)
a full time person. Some syndicators have a W-2. I am a full time real estate investor operator. I do have another investment opportunity that I’m involved in. I’m a general partner of, but I am full time in multifamily real estate investing.

Quentin (14:03)
Love it, man. But then let me ask you this. What are you most focused on solving or scaling next? Like, what’s the next real goal?

John Funderburk (14:10)
So our goal right now is we think that there’s roughly a roughly an 18 month window here to acquire properties. We feel like most economists feel like the interest rates are going to compress here coming really, really soon. Eighty four billion dollars of of multifamily real estate came due this year. Eighty six billion comes due next year. So what we’re seeing right now is a lot of operators loans, their debt is coming due.

and we’re able to buy properties, we’re offering roughly 30 to 40 % below peak market value for properties, and we’re winning the bids.

Our underwriting is very, very, very conservative when it comes to rent escalations. So we don’t go in and just completely raise every single rent. We understand people need to be kind of worked into that.

⁓ But really that’s what we’re doing. Charlotte is really the market that we see a lot of growth in right now. There’s a lot of deals out there. We’ve got one portfolio in our pipeline right now that we just put under contract and we’ve got five more that we have offerings out on.

So we feel like that that market is gonna continue to grow. There’s fewer people coming to Florida from up in the Northeast. So they’re stopping and we call them in betweeners.

So they’re stopping in Charlotte. The population is growing. The market’s there. The employment base is there. It’s just, it’s an overall great market.

Quentin (16:07)
Yeah. ⁓

Yeah, yeah. I love it, man. I love it. I love what you’re doing. I love the forward thinking. And so, ⁓ you know, you talked about connections. You are a connector. You love serving people. So, you know, a lot of people that’s listening, they’re early in their journey. They’re looking to level up. And I think they’ll benefit from hearing this when it comes to building relationships and growing your network. What’s made the biggest difference for you?

John Funderburk (16:40)
⁓ I learned to be a question asker, not an edge, specifically from the investor standpoint. You really have to understand where a person is in their life and really guide them directly. I tell some investors that this is some prospective investors, this is not the right asset for you to invest in. So you do have to be honest with people. Don’t just chase the dollar.

Every person is unique. These investments aren’t for everybody. So somebody may have $50,000 to invest in a deal or $100,000 or $250,000. They may not be the right investor for your specific deal or your asset class. So I’ve learned to ask questions from investors rather than simply be an educator. From a partner standpoint, it’s about help.

⁓ It’s about just connecting with that person on a human level offering them as much education that you can possibly give them upfront and then Allowing them to spread their wings allowing them to thrive not holding their hand for the entire time that you’re working with them because People will see more benefit if they are actually doing learn and then do

I’m here to help, but I can’t be your crutch your entire career. So allowing people to thrive, so letting go of partners from time to time and just let them learn and succeed, that’s where I am with partnerships.

Quentin (18:15)
Yeah. Again, man, again, to me, you’re doubling down on empowering people. Like you like to connect. Listen, I’m gonna give you an opportunity, but I love how you said, listen, I’m not gonna hold your hand the whole process, even like, you gotta get out there. You gotta do it. You gotta get your feet wet. You gotta fail forward. Like I’ll hold your hand, but hey, you gotta get out here and put the work in. And so again, that just shows me a heart. We’re trying to connect with people, educate people, really empower people.

And so with that being said, you know, I only probably got two questions left and this is one of them. And I kind of want to open the floor up to you. Is it any kind of maybe words that you want to inspire people with or, you know, any encouragement that you want to give? Like anything that you’ve been thinking that maybe people need to hear right now. I just want to open the floor up to you to deliver that message to our viewers.

John Funderburk (19:04)
The thing that I’ve always tried to do is aspire high. But not outside of your reach. if you aspire high and you constantly fail, it’s just going to be so demoralizing that you’re not. So aspire as high as you can. Don’t shut anybody out based on your impression of who they are. I’ve met some ultra high

net worth people that drive a 1985 F Ford pickup that get out of the truck in in a in pair of shorts and a t-shirt. Do not judge people based on what your impression of them are. Don’t judge don’t judge people. If you think that somebody is a very high moral person, don’t assume that.

⁓ Go into your relationships with an open mind. Aspire to do as much as you possibly can. There are opportunities out there in the world right now. There are significant opportunities in the world. The news is constantly pushing down on us, but hey, turn the news off, turn social media off, get out there and do something and just have a goal and go after it.

Quentin (20:13)
I love it man, I love it. Man, I appreciate you so much. I appreciate you being here Mr. John. Thank you so much. Listen, before we wrap, if someone wanted to reach out to you, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way for them to reach you, sir?

John Funderburk (20:30)
So I’m on the socials, I’m on LinkedIn, I’m on Facebook. You can look me up. I’m probably one of three John Funderburks that are out there. But I also say this, my phone number is 941. My personal phone number is 941-960-6613. Shoot me a text message. You will get a response from me, whether it’s texts, we can arrange a call. My website is rampantlioncapital.com. You can book a meeting with me there.

My email address is johnf at rampantlioncapitol.com. I tell people if you reach out, you will get a response. It may not be immediate, but within a few hours or I have a 24 hour policy on returning communications. So you’ll get a response from me to try to get something on a calendar and have a conversation. That’s all I need to get in touch with someone.

Quentin (21:19)
Listen, there he is, y’all, Mr. John Funderburg. Thank you, sir. Listen, man, I really appreciate your time. I appreciate your story, your perspective, man. You’re doing it the right way. You’re empowering people. You’re educating people without handicapping people, right? You’re like, will walk alongside you, but we’re going to do this thing together. We’re going to it the right way. So, sir, I thank you for being with us today,

John Funderburk (21:40)
Thanks very much, Quinn. I really appreciate it at the time.

Quentin (21:43)
Absolutely. And listen, for those who’s tuning in, you know, I say this part very slowly. If you got value from this, please make sure you are subscribed. You do not want to miss out on these amazing conversations. I tell you this all the time. One day you’re going to take me up on the offer and I hope today is the day. Subscribe, subscribe. Mr. John again, thank you, sir. We appreciate you, man. And to everyone else, we’ll see you on the next time.

John Funderburk (22:08)
Thanks, guys.