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Show Summary
In this episode of the Investor Fuel podcast, host Michelle Kesil interviews Michael Wagman, a capital raising expert and entrepreneur in the real estate sector. Michael shares insights into his journey in multifamily investing, his current projects including a unique motel-to-boutique hotel conversion, and his innovative strategies for raising capital. He discusses the importance of building relationships with investors, navigating challenges in the real estate market, and his experiences traveling while managing capital raising efforts. The conversation also touches on market forecasts and the future of real estate investing.
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Investor Fuel Show Transcript:
Michael Wagman (00:00)
But it was all worth it because we’re getting 100 % owner financing on a 60 unit motel. The purchase price is 1.2 million. So there’s only 440K to put down and it’s interest only for five years. So the monthly mortgage on this 60 unit motel is going to be 3,700 bucks a month.So there’s basically, you know, it’s going to cashflow like crazy. Obviously there’s a lot of things we need to do to it, but it’s in a really, really good market called Eureka Springs. This is actually known as the little Switzerland of America because it’s got these kind of winding roads with springs everywhere and like very historical buildings. And it’s a town of only 3000 people, but it actually gets a million visitors per year. So tourism is the main draw and there’s nothing.
quite like this that exists in that market right
Michelle Kesil (02:17)
Hey everybody, welcome to the Investor Fuel podcast. I’m your host, Michelle Kesil. Today I’m joined by someone that I’ve been looking forward to chatting with, Michael Wagman, who’s been making serious moves raising capital. So really excited to have you here on the show today, Michael.Michael Wagman (02:18)
Yeah.Yeah, thanks so much for having me. Excited to be here.
Michelle Kesil (02:40)
Awesome. think the listeners are really going to take something away from how you’re approaching raising capital, working with investors and yeah, your new projects that we can dive into all of that.Michael Wagman (02:54)
get into it.Michelle Kesil (02:55)
Perfect, so yeah, first off, for people who are not familiar with you and your world, can you give the short version of what your main focus is?Michael Wagman (03:04)
Yeah, absolutely. So I really cut my teeth in the multifamily world actually before that, even single family and all sorts of residential investing. But for the last four or five years, my focus at Nimble Capital has kind of been multifamily, but it’s evolved ⁓ as markets evolve and opportunities present themselves. So now I would really say we’re more of kind of all sorts of alternative asset class syndicators. So a lot of traditional value add multifamily ground up.multifamily development, commercial retail, and now a boutique hotel as well.
Michelle Kesil (03:37)
amazing and do you work like nationwide are you working in just certain parts of the US like what’s your market?Michael Wagman (03:38)
Thank you.Yeah, so we’re based in Phoenix in Arizona. We buy in Arizona, New Mexico, Texas, Oklahoma, and now Arkansas too. kind of Sunbelt Southwest.
Michelle Kesil (03:56)
Okay, awesome. Yeah, so I would love to just hear a bit more about how you’re like working with your business. I know that you raise capital and you have like a business partner. So yeah, what exactly do you guys, how does this process like work together?Michael Wagman (04:12)
Yeah, you know, I’m very, very grateful for the fact that I do have a business partner because we have complimentary skill sets. And I think anybody who gets into the multifamily world that you should know that it’s very, very much a team sport, especially in commercial real estate. It’s you could do it all yourself, but you’d probably hate your life. And there’s a lot of different skill sets and a lot of different things to master. So I come from a tech sales background and I was really good at.marketing and capital raising, finding money, you know, basically the sales and people facing side of the business. My business partner is also good at that, I like to say, but he’s, he’s really the brains behind the operation when it comes to underwriting broker relationships, asset management, you know, everything that’s involved in actually once you’ve acquired these properties.
Michelle Kesil (05:45)
Awesome. how, like, what kind of projects are you guys working on right now? Is it still focused on the multifamily realm or where are you guys putting your focus and attention right now?Michael Wagman (05:58)
⁓ so right now I’d say our main focus is actually on three different properties. ⁓ one is a commercial retail redevelopment that we bought a basically half of a city block, tore it down to the studs and we’re putting in like a restaurant, gastropub, cocktail bar, all sorts of, ⁓ you know, really interesting places for people to go in this town. That’s kind of really desperate for, for that sort of product.Then we have our ground up development, which is actually in the same town because there’s a massive housing shortage there. So that’s 176 unit multifamily ground up. And then the one that I’m really the most excited about is actually a motel to boutique hotel conversion in Arkansas that we are under contract on right now. Just finished at the capital race for that. And that’s going to be a really, really exciting project because
It’s on 10 acres of forested land and we’re doing a whole like boutique wellness sort of millennial draw. You we’re going to have cold plunges in the middle of the forest and sauna and spa and movie theater in the middle of the forest and all these kinds of things that really make a property super unique and special.
Michelle Kesil (07:03)
Amazing, I love that. Yeah, I would love to hear more about this project. Like, how does it kind of work from like that start to finish of going from a motel to, yeah, something totally more like holistic and unique.Michael Wagman (07:18)
Yeah. Well, so it’s a pretty cool story. So, ⁓ you know, usually I would say me and my business partner, we go out and find the deals, but this one actually came to us because, I’m a capital raising coach. have students, I teach people how to raise capital. And actually my first student, after, know, over a year of knowing him, he comes from the Airbnb world. He was actually in the top 1 % of all Airbnb listings because he would do.these really unique things like create a beach in the backyard or put a sauna or something to just make it more interesting, right? But at the end of the day, an Airbnb is still just a house and it’s only as valuable as the house next door to it. You know, the comps, despite, you know, even if it’s pumping out a half a million year in revenue, it doesn’t actually make it any more valuable. So he ended up selling his whole portfolio to a private equity company and he said, well, the next logical step is what he likes to call commercial Airbnb or boutique hotels.
And so I taught him how to raise capital and then he actually underwrote over 2,000 deals before he found this one. So about a year of time spent just trying to find this deal.
But it was all worth it because we’re getting 100 % owner financing on a 60 unit motel. The purchase price is 1.2 million. So there’s only 440K to put down and it’s interest only for five years. So the monthly mortgage on this 60 unit motel is going to be 3,700 bucks a month.
So there’s basically, you know, it’s going to cashflow like crazy. Obviously there’s a lot of things we need to do to it, but it’s in a really, really good market called Eureka Springs. This is actually known as the little Switzerland of America because it’s got these kind of winding roads with springs everywhere and like very historical buildings. And it’s a town of only 3000 people, but it actually gets a million visitors per year. So tourism is the main draw and there’s nothing.
quite like this that exists in that market right
Nothing with really special amenities to actually stand out above the competition.
Michelle Kesil (09:09)
Amazing, I love that. That’sso unique and it sounds like you guys are bringing such, yeah, like what the town needs and creating that life and flow there. So you mentioned that you educate people on raising capital. Can you expand on what that looks like? Maybe share a tip with the audience?
Michael Wagman (10:05)
Yeah, sure. So, you know, I do private one-on-one coaching, but I also have a video course available for people as well, where I kind of break down my whole model. And I think something that I did that maybe a lot of the bigger players do, but I certainly don’t see it very common in sort of the smaller syndicators is I actually took what I learned when I was working in startups in tech sales. And I started out as an SDR, as a sales development person making a hundred cold calls a day.And then I would set qualified appointments for the person above me who was actually sort of the deal closer. And eventually I became that person and I was closing the deals. but I just took that model and I kind of imprinted it onto capital raising. Cause you know, I had all these leads in my database and I just had to, I knew on some level I have to call these people, but for some reason I just couldn’t make myself do. I couldn’t make myself be the cold collar anymore. Cause nobody was paying me to do it. Only me pays me. Right. But I was like, you know what?
I can hire an SDR. So I actually got a VA in the Philippines and I trained her how to be my SDR. And so she would cold call all my leads and basically create qualified appointments in my calendar so that by the time they ended up already booked in my calendar, I would know how much they’re looking to invest, whether they’re accredited or not, if they’ve done a syndication before, know, if they’re accredited, I said that already, you know, all these sort of things.
So I’d basically go in locked and loaded. And at that point, my job is just to be the deal closer and get them over the hump. And I think that’s something that I did with capital raising that, you I hadn’t heard of too many people ever doing before. it allowed me to raise over $20 million in the last few years.
Michelle Kesil (11:37)
So yeah, that’s such a smart process to go through. Yeah, I’ve never heard of that, so super fascinating and I love that you’re teaching people, so that’s awesome.Michael Wagman (11:47)
Yeah. And I think the thing about it that is really special is like I mentioned, I have a business partner who’s my operator. ⁓ so at the end of the day, I’ve really specialized myself into my business where this is my only focus. It’s finding the money and making sure that we get new leads and that when we have a deal that the money is there. and what that actually allowed me to do was the last year in 2024.⁓ I actually spent the year traveling the world. So I went to 19 countries. I would spend like a month in each country and then hit little countries on the side. But I was still raising capital the whole time. So no matter where I was working remote, I actually raised over five and a half million dollars that year while I was traveling the world.
Michelle Kesil (12:25)
Amazing.What do you think was the takeaway from being able to raise capital while traveling? How were you able to manage all of that?
Michael Wagman (12:38)
I mean, it wasn’t that different. As long as I could make the time zones work, I’ll say when I was in Asia, that was a lot harder working in Asia. But as long as I was in South America or Europe, I’d start work at 2 p.m. and I’d work until midnight and show up to the call when it’s in your calendar. And as long as I had an internet connection, I could call someone from anywhere and it worked out great.Michelle Kesil (12:40)
Right? Yeah.Absolutely, I love that. That’s such a fun way to do it. So let me ask you this, what are you most focused on solving or scaling next for your business?
Michael Wagman (13:12)
Yeah. So I would say that of the 20 million we’ve raised so far, it’s entirely been from retail investors. know, everyday Joe’s accredited people who’ve got maybe 50, 100K lying around and they, you know, want to put it to work for them, but they don’t want to go out and do the work of buying a duplex or something, being their own real estate investor, right? So with us, they get tax benefits, cashflow, they get appreciation, but they don’t have any liability and they don’t have to do any of the work.⁓ but you know, if you’re raising $5 million, 50 K at a time, that’s a hundred people, right? That’s a lot of investors. and so my real focus now is moving into the world of family offices where, know, it’s patient money. have different goals. They’ll write you a $5 million check. And the priority is don’t lose my money. I’m not trying to triple it immediately or anything. Don’t lose my money. Right. and so.
That’s kind of my main goal moving forward is how to ingratiate myself in the world of Family Office.
Michelle Kesil (14:47)
Yeah, that’s super unique. So how do you find these leads that you work with to raise the capital?Michael Wagman (14:51)
ThankWell, so the first thing you have to, there’s a dozen strategies, right? And they all have their merits. The one that was ultimately the most successful for us, which maybe not everybody has the means to do it first, but we would run Facebook ads. And that’s kind of like, you know, the way we grew our database to over 5,000 was with Facebook ads. But a lot of…
Michelle Kesil (14:59)
short.Michael Wagman (15:15)
The best investors that you get are just going to be from your personal network because the trust is already there. There’s people that, know, you have to go out and tell everybody what you’re doing and you know, who you are, what you’re trying to accomplish, tell them that you’re raising capital so that when the day comes that you ask for money, they’re not going to be surprised. They already know that you’re doing it. Right. so, you know, some of the best investors that I have are people I’ve known since high school even. Right. And, ⁓ you know, it, I would say that’s probably.The best way is to start with your network and then once that well runs dry, because it might eventually after four or five deals, you you start realizing I need to find new investors. That’s when you kind of go to 506 C accredited only running Facebook ads, going to conferences, networking meetups, hosting your own meetup, creating lead magnets, all these kinds of things.
Michelle Kesil (16:04)
Yeah, absolutely. That makes sense with all of the networking that you have to do. Like what kind of networking, relationship building skills and maybe strategies have made the biggest difference for you?Michael Wagman (16:19)
⁓ I mean, people want to do business with people that they like and trust. mean, it’s really kind of that simple. the higher up you go the chain, like I mentioned with family offices, like the ones that I’ve met, these people don’t even like talking about money. Money is not a concern. They want to get to know you as the person, right? Because at the end of the day, in this world, in the syndication, the passive investor really only has control over like three things, right? They have control overthe asset class, once they’ve made that decision, then they have control over the market. And once they decided on those two things, then the last thing is the operator and that’s it. That’s kind of the end of their control. So you’re really kind of betting on the jockey, not the horse here. And at the end of the day, you know, it’s about building that trust more than anything and ⁓ making sure that these are the kind of people who understand that when things ultimately don’t go right, because something goes wrong in every deal,
that you’re going to be the person who makes the right kind of calls with their money.
Michelle Kesil (17:17)
Yeah, absolutely. That makes the biggest difference. Could you share a story, an example of one of those deals that maybe you had to make a pivot and, yeah, find that solution fast for your client?Michael Wagman (17:32)
Well, sure. if anybody’s, you know, of your listeners, I’m sure are familiar with what happened in July of 2022, right? Suddenly your 3 % interest rate went to seven overnight. And a lot of people, especially multifamily guys at that time, were buying deals with bridge loans because that was all you could get. If you wanted to go Fannie and Freddie, you’d have to wait six, 10 months. You couldn’t even close in time, right? They were just so overloaded. So everybody was doing theseadjustable rate bridge loans. And we only had one deal thankfully with an adjustable rate. But we closed that deal in June of 2022. So we only owned it for one month before our mortgage more than doubled overnight basically. So it went from 13,000 a month to like almost 30 after one month of owning this thing and just completely killed our cashflow.
And it’s a shame because that would have absolutely been our biggest, our best deal to date if that didn’t happen. I mean, we were able to capture like $400 plus rent bumps with minimal renovation needed just based on where we bought it in the market and stuff like that. But ⁓ yeah, our investors really had to sit tight for almost, I think it was a year and a half before we were actually able to complete a refi.
It’s been over a year now since we got that done, but we got it into fixed debt and we lowered our debt service by probably $10,000 a month, but still, right? That was a year and a half of lost time. And I think the key there is really just communication at the end of the day, letting them know everything that’s going on. You name it, in the world of value add multifamily, we’ve had people cooking meth, we’ve had people drive their cars through walls.
⁓ you know, all sorts of crazy stuff, the cops, homeless people, these things all happen in the world of multifamily. And what you can’t do is you can’t hide it from your investors. The last thing you ever want to do is go silent. And when a deal isn’t going right, they appreciate it so much more that you’re communicating with them the whole time.
Michelle Kesil (19:30)
Yeah, absolutely. Well, that’s pretty wildof all those things that can happen, but it definitely teaches you to overcome those challenges and to have those expectations with the investors. So as far as your like…
Relationships with investors, are you supporting them in other ways besides the capital raising? What other avenues do you work with them in?
Michael Wagman (20:01)
Well, I mean, so it’s, really important that you stay in contact with your entire database as much as possible. one thing that we’ve found really effective is instead of just sending out an email every quarter and just being like, these are the highlights is we record a video because some of these people we’ve never met in person, right? These are people who maybe came in through a Facebook ad and, know, we managed to convince them that we were worth investing in. Right. But we want to maintain that human connection. We want to maintain that.sort of relationship. So it’s really important that they see our faces and they hear from us as much as possible. So we try to do a bunch of things like record video updates instead of just emails. I also run a podcast. So, you know, if you go to our Instagram page, you can see all the clips of us talking to other investors and talking to me and my business partner, talking about what’s going on in the market, but it’s
There’s all these sort of little things that you have to continuously do to stay on top of your database all the time and continue building that trust.
Michelle Kesil (20:59)
Yeah, absolutely. And yeah,what do you kind of see like forecasted for the market as far as those some of those things that you’re sharing?
Michael Wagman (21:09)
Well, so I just heard yesterday that apparently the Fed is going to pump a ton of money back into the market in Q1. That should be really interesting. I don’t have a crystal ball and anybody with any sort of sense will tell you I have no freaking idea what’s going on, right? And it’s kind of you roll with the punches and do deals if they make sense in any market, but you got to be really tight about what works in certain markets. The last two and a half, three years in multifim, we have kind of been a crap shoot. mean, anybody knows that.No deal is cash flow anymore when interest rates and cap rates are 6%. There’s no spread, right? So it’s kind of just hanging on to the market right now and seeing when things ultimately turn back around. know Powell has to step down in May of next year. That will be interesting. Who knows if Trump gets his way then or not. I don’t know, but we’re going to keep monitoring it and keep sort of seeing what happens. I am hopeful that next year will be the year that things finally start.
pushing back in the right direction, but they may not. It may be another year, who knows.
Michelle Kesil (22:08)
Yeah,absolutely. It’s definitely something that’s out of the control and you can only do what you can. So before we wrap up here, if people want to reach out, connect, collaborate and learn more from you, where is the best place that they can find you?
Michael Wagman (22:27)
Yeah. ⁓ I would say our Instagram and a nimble underscore capital underscore group is a great place. ⁓ there you can get access to our podcast beyond the deal, where I also interview people like yourself. and we talk a lot about real estate and specifically the kind of things that go beyond the deal, you know, if you will, of sort of the mental health aspects of being an entrepreneur and keeping sane and healthy, and how to get deals done.⁓ And then lastly, I am a capital raising coach. So I’ll give you maybe the link for my course. You can put in the show notes and anybody can get ahold of me there. If you’re interested in learning how to raise capital.
Michelle Kesil (23:03)
Well, listen, appreciate your time, your story, and your perspective. So thank you again for being here.Michael Wagman (23:10)
Yeah, thanks so much for having me.Michelle Kesil (23:11)
Absolutely. And for those of you tuning into the show, if you got value from this, make sure you’ve subscribed. We have more conversations coming with operators just like Michael, who are building real businesses. And we’ll see you all on our next
