Multifamily Investing Due Diligence: How Ayse Kurtoglu Avoids Costly Deals

Ayse Kurtoglu (00:00)
So they’re calling me now. They’re like, okay, let’s do 45 days. I’m like, no, my broker said 60 days. So you have to really have a team that knows exactly what they’re doing because you were in this as a team. you have to really like ask questions and keep the things in your mind because this is a field of numbers and, and really stick to the things they’re saying, pull them out. Like, okay, you said this, like, what do you mean by that? So people try to cover a lot of dirt underneath the paperwork. And then you don’t know it until you sign those papers. like, my God, what did I do right now? And so we try to prevent all that.

Michelle Tack (00:28)
Yep. Yep.

Yeah.

Hi, I’m Michelle Tack. am the Real Estate Pros podcaster here. We have a great operator that we have today. Kurtoglu think is that close to the heritage of, Thank you for joining us today. We really appreciate it. One of the things that we got going is to

Ayse Kurtoglu (02:21)
You got it, Michelle. Hi.

Thanks for having me.

Michelle Tack (02:32)
prep for this podcast, I found was super interesting is that you’re very focused in a specific geographic area. Manassas, Virginia and the greater Northern Virginia area, which has a lot of military people, a great need for rentals ⁓ and that the city seemed to be, because a shortage of rental is more open to doing land development.

⁓ and multifamily. Given that, can you explain for those people that don’t come from your area of ⁓ expertise in your business, what exactly you do and what markets you serve?

Ayse Kurtoglu (03:10)
Hmm?

Sure, so I’m located in Northern Virginia, as you had given the great instructions to me. I do multifamily acquisition and I syndicate the deals. So I also invest in my deals. We do many different options. We do multifamily, where rent is mostly needed and we do land developments. We accrue the lands, control the lands, and then we ⁓ get all the licensing and permits needed by the city. And then we join winter with the developers and then complete these deals.

Michelle Tack (03:21)
Ha ha!

Ayse Kurtoglu (03:44)
Another thing that we do is, this is a new thing that we’re doing is, well, we’re finding Turkish investors in Turkey that are very interested in investing in America because there’s so much opportunity for investors to invest in America compared to the properties they buy because appreciation level and the rental level is completely different in Turkey compared to America.

Michelle Tack (04:07)
That’s a great description in terms of what, you know, we all know that there’s risk out there today with mortgage rates, you know, changing what have you. Yeah. But what really interested me was the fact that you’re very focused and not trying to take too much risk, but enough and know the areas. Can you talk to how you’re keeping your business running smoothly, you know, given those factors of focus, et cetera. ⁓

Ayse Kurtoglu (04:13)
Yes. Everything has.

Mm-hmm.

Michelle Tack (04:35)
I’m sure people would love to hear that.

Ayse Kurtoglu (04:36)
Yeah,

yes, absolutely. ⁓ I rely on my teams. I have different teams, but you know, your broker, your CPA, you have to really rely, you have to have a team of networks that you rely on. And you really want to, since I invest in many of these ⁓ opportunities myself, I also, you know, don’t want to lose any of the money that we put in. So we do very calculated risks. So some risk, if, you know, we don’t see it forward ahead, we just don’t move.

Don’t move with the opportunities. So if the numbers doesn’t run out right and some of these listings when they’re on Craxi or other opportunities I don’t really like to go move forward with them because they have been on the market for so long So I feel like this could be something wrong, we still you know the run the number and sometimes some brokers they run the pro-noi and I don’t follow with that because I they will they expect you to pay for

something that is not intact yet. So I look at what’s currently running as a rent roll and why, and then I, you know, I want to pay for what’s current right now. What’s not what I’m going to do for the future.

Michelle Tack (06:33)
Yeah, that’s really wise. think, you know, risk mitigation becomes important. You’re taking enough risks, obviously.

Ayse Kurtoglu (06:38)
Yeah, I tell my brokers.

Yeah, I’m like, okay, like I understand, like they expect 50,000 dollar for, you know, NOI for the following year, but am I going to be able to put that together? So it needs it needs a repair. I don’t know. It could be gut repair. I have no idea. So that means I have to get more money from the investors to putting it and then his investors are really willing to do that. So I can’t pay, make them pay something for the future.

Michelle Tack (06:47)
Mm-hmm.

That makes sense. As you grow and expand, and even now, there’s always challenges in the business, right? And every operator I talk to mentions that. But I’m wondering if you could talk about a situation where maybe a deal was going sideways or south, and you had to pivot really quickly to address it and to either, you know, get it back on the right track, or if it didn’t,

Ayse Kurtoglu (07:08)
Yes.

Michelle Tack (07:29)
you learn something from that experience. ⁓ Could you share something like that with the folks on the podcast today?

Ayse Kurtoglu (07:37)
Sure, so there is one opportunity that it’s a 16 unit apartment in Baltimore and we were incurred about it. It was for $1.6 million. And the realtor, they give us the opportunity. They said there’s two offers on the table for $1.4 million. And I run my numbers and I said, you know, based on what I see, I could offer $1.3 million. And it’s like, okay, we’ll see if they can accept it and all that.

Then they came back to me and they wanted me to do an escrow off a down payment for like a hundred thousand dollars. And I said, that’s not really how it works. You you normally put one to five percent. So I’m willing to put like 13 percent upfront and 13, 13,000 upfront and 13,000 later. And she’s like, OK, I’ll run with the with the seller. And when she came back, she was like, oh, yeah, that can work. So here I was going to put like one hundred thousand dollar. If I didn’t know what it was, I could have

you know, lost that money. So and then they wanted me to do a 30 day due diligence. Yeah. And then a 30 day closing. And then I call my broker and said, hey, so they want the 30 day closing and this and he’s like, are you crazy? You can’t close a commercial deal like in that sort of Yeah. He’s like, okay.

Michelle Tack (08:50)
No way!

Ayse Kurtoglu (08:52)
And then so they’re calling me now. They’re like, okay, let’s do 45 days. I’m like, no, my broker said

60 days. So you have to really have a team that knows exactly what they’re doing because you were in this as a team. And then this property was also an auction. So I’m like, so why are you putting the property on auction? They’re like, well, they put it off the auction because now you have an offer. So what happened to those, you know, $1.4 million? So you have to really like ask questions and keep the things in your mind because this is a field of numbers and, and really

Michelle Tack (09:04)
Yep. Yes.

yeah.

Ayse Kurtoglu (09:25)
Stick to the things they’re saying, pull them out. Like, okay, you said this, like, what do you mean by that? So people try to cover a lot of dirt underneath the paperwork. And then you don’t know it until you sign those papers. like, my God, what did I do right now? And so we try to prevent all that.

Michelle Tack (09:33)
Yep. Yep.

Yeah.

Well, yeah, I mean, there’s hard truths, right? And they’re in the numbers. Sometimes the numbers are, hey, a commercial property you still need to do even after you’ve accepted it. You you still have unknown things. Maybe the plumbing, it looked fine, but something’s wrong with it. But you’ve got to do due diligence through those 60 days. And that’s sort of a non-negotiable unless the price, guess, is so crazy good. But

Ayse Kurtoglu (09:57)
Absolutely.

Michelle Tack (10:04)
Yeah, I really admire the fact that you’re sticking to what you know and Trying to do all the things that you you can to ensure that It’s the right, know, it’s right for your buy box when we talk up Yeah, ⁓ of course I will they’ll pressure you there’s no doubt

Ayse Kurtoglu (10:09)
Mm-hmm.

Yeah, they will really will push you. They will really try to push you and yeah. And then like it’s

everything is great. I understand. I want to have that units too. But like, is it really worth for me and me and my investors to really go into it? Because if I can pay 1.3 million, I mean, that’s 200,000 dollar difference that we could put on the down payment. So our fix one of the units. So, ⁓ yes, if you

Michelle Tack (10:40)
Absolutely.

Ayse Kurtoglu (10:44)
If you, is the three units empty? you next year you can make extra $50,000. I don’t know that. Let me talk with the property manager. Yeah. So I asked her, said, okay, I need to talk with the property manager. Why they’re not being leased out. let’s figure that out.

Michelle Tack (10:48)
Yep. Well, you don’t know. Yeah. Yep.

Yeah, exactly. You got to get really into those dark crawl spaces, right? You figuratively, sometimes literally to get that information out. We talked about some of your future plans. Can you talk about where your focus for the next 12 months is? And. Great.

Ayse Kurtoglu (11:35)
is our thing.

Yes, absolutely. So

I’m like I said, I’m really interested in a land development. In this area, there’s so much opportunity for rental properties, affordable properties. And you know, this area, it’s it’s become so on on affordable. So we want to have ⁓ a really nice homes that people able to afford. So there’s a land that is about 10 million dollars.

It’s a four acre lands right here in Manassas. It’s already shallow ready, all the permits, everything is ready. So that’s what we’re trying to make a control of. And if everything goes smoothly, we can control the land, we want to join when the developer or have enough of investors come into this and have a 300 unit apartment. So it’s a quite large complex. And that’s my plan. And then we’re thinking it’s going to cost about

Michelle Tack (12:17)
Mm-hmm.

Ayse Kurtoglu (12:39)
50 to $60 million to complete this. mean, of course, we don’t need all of the money. We’ll get 70 % for land and then 30 % equity from the investors. So that’s the thing that I’m really working on. And I see a lot of opportunity for us and the investors to get something out of this. And then I have another opportunity. Yeah. And I have another opportunity. This one is in Odinta, Maryland. It is four by four.

Michelle Tack (12:43)
huh. Right.

That’s awesome.

Ayse Kurtoglu (13:05)
This one is we’re getting at lands partial by partial and we’re kind of still talking with the neighborhood. The city is really willing to give us the permits. It’s about three acres we have, we’re trying to put under control and this can go up to 10 acres. So this land is much more affordable than the land that we are currently here because it’s not…

⁓ the license and permits and none of those things has been done. based on what the city is telling me, telling us, it could finish within the six months to a year, which is normally it could take two to three years just to get those permits going.

Michelle Tack (13:46)
Can you talk about the network that you have? You have a number of different items that you talk about. You also have a construction company. Can you tell me about how you developed a network and what it looks like today?

Ayse Kurtoglu (13:58)
So the networks, even when I was in healthcare initially, and we have a medical transportation business and I I was forming a few different businesses in my, in my career. So, and one thing that I really keep in contact is the networking, networking of a professional. So even I went to networking events and different events, I really kept my networking going. So when I started this capital group,

those networks has been given me opportunities. So now I’m able to form those networks, ⁓ which are pretty locals and everybody’s know me by my face, by my name, if I call them, I can ask them questions. So it’s especially important in this ⁓ community for you to form networks even before you get into it. Because if you scratch from scratch, it’s already a hard…

I like the infrastructure to penetrate because you have a lot of like wealthy rich people, know, that that’s just gonna like wipe you up. You know what I’m saying? It’s not something so easy to get in. And if you don’t have the team that you trust in, you’re gonna get hit by like a fly. Just move aside. Yeah, so networking has been amazing. I have the broker that I work with right now. He’s not only become

Michelle Tack (15:08)
Understood.

Ayse Kurtoglu (15:18)
my broker, he’s also like my family friend. So a lot of the people that in my network, they’re like my family friends. So they look out for me as much as I look out for

Michelle Tack (15:27)
That’s awesome. Before we go, can you talk about the other part of the business, is your heritage is Turkish, obviously, from what we talked about before, and the Turkish investors that are in Turkey that want to invest in the United States. Can you talk about that business a little bit before we close?

Ayse Kurtoglu (15:28)
Mm-hmm.

Yes. Yes.

Sure. So I do capital funding. So what I did was I send over a million dollars to Turkey to do a lot of investments and buy properties in Turkey. And then I bought a few properties in Turkey. And what I realized is that this is another thing, you you have to really evaluate yourself. The apartment complexes in Turkey rises way faster than here, but the rents compared to what you get from here is completely different. So let’s say

if $100,000 property that you have in Turkey will give you maybe $3,400, where here you can put that $100,000 down payment for a $700, $800 property, and you can make $24,000 depending on the area. So then I was like, okay, if I’m not comfortable with the properties that I bought and the rental income that’s coming, a lot of people are gonna have it. And at that time, had a very successful lawyer that I was dealing with.

Michelle Tack (17:14)
Yes, that’s right.

Ayse Kurtoglu (17:19)
was doing my probate case in Turkey as well. And I talked to him about, said, you know, I don’t feel comfortable, you know, really investing in Turkey. I want to bring that money back to USA. And I feel like what I’m having issues, I’m sure there’s other investors in Turkey. They’re also looking for opportunities to bring them home here. And he’s like, it’s funny you brought me up because I was kind of thinking about like the way how your background is, you know, you have so much people skills and you know, your background, I think a really good idea for us to do that. So

Michelle Tack (17:34)
Right, exactly.

Ayse Kurtoglu (17:48)
He was, we were like, I was like, okay, so set up the team, put everybody together, let’s open an office and then we can do consulting firm. And then whoever wants to come in, can have, I teach them. It’s not about like selling because this business is not about selling or pushing. You really want investors to come to you and really suck that information in and.

Michelle Tack (17:57)
That’s awesome.

Ayse Kurtoglu (18:12)
And then, and come out of it like they learn something, not like, oh God, now they want million dollars from me. Let them, let them learn. And a lot of Turkish people are thirsty for learning things and, they want to, you know, like educate themselves. And we’re not talking about like a million dollar investments, maybe you have $10,000, $20,000. And to put that into something in America, it’s quite a large because the appreciation is there, your rental is taken out and then we have the

Michelle Tack (18:17)
Yeah, absolutely.

Ayse Kurtoglu (18:40)
you know, everything is based on NLI, whatever the rental comes out, that’s what your property is, you price that. Not in Turkey, you can have million dollar rental, it’s still the same money. So that was like, okay, we need to move to USA. I’m going, bye.

Michelle Tack (18:52)
Yeah.

look, you’ve been an incredible ⁓ provider of great information, ⁓ international plus what you’re doing in the local area in Northern Virginia. Can you provide for those that have interest in speaking with you, maybe they want to invest with you or team with you or just level up their game?

Can you provide your contact information and then spell it out please for those that may want to contact you?

Ayse Kurtoglu (19:24)
Sure, so my name is Ayse AYSE last name is Kurtoglu K-U-R-T-O-G-L-U my email address is Ayse AYSE at Kurt K-U-R-T Capital Group kurtcapitalgroup.com

they can also reach out to me through LinkedIn, it’s Ayse Kurtoglu the same first name and last name.

Michelle Tack (19:45)
Thank you very much. For those that ⁓ enjoyed the content today, we appreciate you subscribing and please continue to. Those that have not subscribed yet, we’d love for you to subscribe and continue to get great content. ⁓ Ayse thank you again. ⁓ Good luck in the future. It was a pleasure as well. ⁓ We’ll keep in touch and see how things develop for you.

Ayse Kurtoglu (19:55)
Thank you.

Oh, thanks, Michelle. was a pleasure. Yes. was a pleasure as well. Appreciate it.

Absolutely. Yes, you take care now.

Michelle Tack (20:14)
Take care.