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Show Summary
In this episode of the Real Estate Pros podcast, host Erika speaks with Mike Angelo, founder of Nimble Capital Group, about his journey from corporate America to becoming a successful real estate investor. Mike shares insights on the challenges and opportunities in the multifamily investing space, the importance of building a network, and the strategies he employs to analyze markets and properties. He also discusses the lessons learned from setbacks and his future goals in real estate development, emphasizing the need for collaboration and expertise in the industry.
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Mike Angelo (00:00)
Yeah, great question. ⁓ I would spend a lot of, I would still do the same thing that I started with, which is get yourself behind the curtain with another operator. So if you try to take this all on your own, you can’t, you’re gonna struggle or you’re gonna buy a single family duplex, triplex, maybe. If you wanna get into the big space, which is, we look at 100 units plus, meaning 100 apartment units per project. That’s really the better space. The bigger space is 200 plus, but 100 to 200. You need partners, you need experience.Erika (02:00)
Hey, everyone. Welcome to the Real Estate Pros podcast. I’m your host, Erika And today I’m excited to be chatting with Mike Angelo. He’s been making serious moves with his company Nimble Capital Group. Mike, I’m so glad to have you on the show today.Mike Angelo (02:16)
Yeah, thanks for having me. Excited to be here.Erika (02:17)
Great, great. So let’s dive on in for our listeners who may not be familiar with your world yet. Mike, tell us how you got into real estate.Mike Angelo (02:27)
Absolutely. ⁓ As we were talking earlier, you know, I spent 20, almost 25 years in corporate America. I worked for three companies during that time. So I was a sales leader in the construction supply space. ⁓ Towards the end of 2019, I saw the writing on the wall that I may not have a position and started to dive in and find alternative ways of making money. I have a family to support and a mortgage. And so we were looking at, I stumbled across podcasts around real estate investing, knew nothing about it.The only experience in real estate I had prior was a couple of residential flips that I did back 10 years ago. so learned and stumbled again upon multifamily investing and basically came home and told my wife how excited I was that we could buy an apartment. And she looked at me like I was crazy. And I just said, we got to listen to stuff. And so I dove right in, fast forward into early 2020. We all kind of know what happened there as far as the world, but I dove in and left my W2 job and started a real estate company with
No experience, but we brought in expertise. I signed it for an education platform and really that just hyper focuses on multifamily. So it was a, like a one year mentorship and 15 months later, we bought a 60 unit apartment complex in New Mexico. And that was, that kind of got the ball rolling. So that first 15 months was brutal. Lots of underwriting, lots of no’s, you you got a thousand no’s and one yes. And so ⁓ it was, it was the start of our journey, right? So we’re five years in now and
have about 700 apartment doors across ⁓ four states, some development projects in the works, a small team that we try to keep nimble and stay small, but we love what we’re doing and there’s lots of challenges in the marketplace, but lots of opportunities as well.
Erika (04:04)
Yeah, wow, you’ve done a lot in five years already. So that first year must have been pretty pivotal, Mike. Can you share more about what that was like and some key takeaways from starting off?Mike Angelo (05:05)
Yeah, I think ⁓ one, jumping in and being an entrepreneur, ⁓ very difficult, right? So there’s a whole lot of mindset stuff that you have to do. you again, as I mentioned, corporate role, always had a company to fall back on, always had a paycheck to fall back on. And so, you we had a runway of time and money that we had saved up. So that covered the financial gap. Then it was just like, how do I put my hat on and become a real estate empire, real estate empire, start a real estate empire, real estate investor.So it was the daily habits is really, I think what helped us get there, which was wake up in the morning, put on a polo shirt, get on the computer. The world was shut down. So we weren’t running around a whole lot meeting people. So it was finding, you know, networking groups to be a part of reaching out to brokers that were selling these apartment deals, building relationships with relationships with them or the phone and underwriting. just analyzing, analyzing, analyzing and trying to see which deals made sense. Most did not.
So that was my strength was going after deals and trying to put something together in front of an investment group that would help us buy it. There’s a lot of parts and pieces to buying an apartment building as you probably know. So we had to put a team together. So my job was quarterbacking, but really focusing on the underwriting side.
Erika (06:16)
fast forwarding today with having 700 doors, had to figure out, you know, how to keep all those plates spinning and having a good system. What was that like?Mike Angelo (06:27)
Yeah, it’s definitely not perfect. Definitely lots of stumbling. ⁓ One thing is our CRM just to manage our current investor base. So, you we’re primarily an investment company that happens to buy apartment buildings, right? So our customer is our investor. So managing that platform through a couple different software tools that we use ⁓ and then buying different deals. So depending on the deal, deal size, we have different partners within each one of those deals. ⁓ Michael, my partner and I are the core guys and all of them.But ⁓ we leverage relationships with more experienced folks because we didn’t know anything about investing in apartments. And buying an apartment is like buying a business. And so if you’re going to get a loan, if you’re going to raise money, you need credibility and experience, which we didn’t have. So we went out and built those relationships, brought those folks into our deals. And so everybody gets a small piece of the pie. But yeah, lots of places to spend. And so we have managing the actual property, buying it and raising the capital and then making sure you don’t screw it up so that
down the road when we sell it, we’re all gonna do pretty well.
Erika (07:27)
Yeah, what is it like building that network and you don’t have the experience and you may not have a lot of connections yet. What kind of advice would you give for those who are just getting started?Mike Angelo (07:39)
Yeah, I think that’s one of the hardest things to do. And I would say maybe the advantage I had was I spent 20 years in sales. so knocking on doors was something I was relatively used to. Now you have to change your vernacular. You have to change what you’re talking about. And you also don’t have any credibility because I didn’t have sales training on real estate necessarily, right? So lots of YouTube videos, lots of podcasts. know, podcasts like what you guys put out. I comb through Apple podcasts and YouTube and I listen to everyreal estate syndicator or multifamily investor that show that was out there and I called because at the end of the call typically when you’re on a show, know that operators shares their information whether it’s LinkedIn or Facebook or email or whatever. I called every one of them. So hundreds of people I reached out to and that in itself is people don’t do that. They don’t take action and fortunately I was able to get a lot of time from from these other operators who were very giving of their time 15 minutes 20 minutes.
And so I got a peek behind the curtain. I told them what I wanted to do. I wanted to be like them. And they gave me some direction, right? Some advice of, hey, you know, focus on deal finding or focus on putting capital together, focus on partnerships. There’s so many things you could do. And so we just kind of took it all, took it all in, like drinking from a fire hose and, and try to put them in buckets and then finding people that could compliment my skill set.
Right, so if I’m my partner Michael, who happened to be in the same network, we both live in Phoenix, we just didn’t know each other, and we stumbled through the network and found each other. So it was kind of interesting that way, but has worked out. He’s on the capital side, I’m on the asset management slash deal sourcing side.
Erika (09:48)
It’s really awesome to see what you’ve built today, Mike, when it comes to those doors that you have, what markets are you operating in, and what drew you to them in the first place?Mike Angelo (10:00)
Sure, yeah. So we’re living in Phoenix, Arizona. That’s where we started, right? It’s our back door and ⁓ the backyard. And so the challenge became when we were looking at deals in Phoenix in 2020, everybody was looking at deals in Phoenix in 2020. And so we were getting beat by everybody. So we started here, but we started to then go outside of our marketplace and we landed in New Mexico. So we have a couple of properties there, San Antonio, Texas, and then today also Tulsa, Oklahoma. So.Some of the bigger markets, but I would say maybe secondary to a lot of folks that know Dallas or LA or again, Phoenix was really hot, Denver’s really hot. So we just, looked at areas that we knew. I spent a lot of my life, prior career life in New Mexico, in San Antonio, Texas, and in Oklahoma, just traveling around in my prior job. So at least I have familiarity with the market. And this was a different lens I had to put on because now I’m looking at job growth. I’m looking at…
median income, properties available, all those different pieces that we have to look at in our business. But I came from an analytical background, so it was just a matter of understanding the data and seeing where there’s an opportunity.
Erika (11:02)
Yeah, absolutely. And when you’re analyzing that data, Mike, are there certain things that you’re looking for? And well, you talked about the positives, but are there any red flags that you would say that people should be aware of?Mike Angelo (11:16)
Yes, ⁓ declining population is the first one. Crime, there’s crime indicators that you can look at, crime index, ⁓ the ratings of the schools. So even within a market, like you can say generically, Phoenix is a great market. Well, there’s parts of Phoenix I would never invest in, right? Just like depending on where you are in your city, there’s sub markets that you don’t wanna be a part of because there’s no growth there or there’s too much crime there. And you could have the best property that looks phenomenal. Maybe it’s even performing really well, but in a really tough neighborhood.And you’re going to struggle, right? You’re just going to struggle because you can’t pick up the property and move it. So we really try to look for and dive into, you know, again, four, was four communities, four sub markets that we’re a part of, even though we say the Southwest U S it’s four cities, right? And within those cities, there are like blocks and blocks that we will buy in and nothing else. ⁓ because we’ve become now, I would, I don’t want to say the word expert. We become more familiar and we know the nuances of those neighborhoods. maybe what new jobs are coming.
What projects are in place? What are they doing to help maybe change the demographic or adjust the demographic? All those really come into, okay, once we’ve done that, now let’s look for properties within those spaces. And if they’re not in there, we just say no. It saves us a lot of time actually. At the very beginning in 2020, I wanted to get everything. Every property in any city, I didn’t care. One, it was more about doing the reps and getting the habit built. But then I started realizing like we can’t be experts in every market.
Hopefully that answers your question.
Erika (12:36)
Yeah, yeah. And when it comes to branching out to new markets, how do you do that methodically? Do you ever have boots on the ground or is it more about the analytical work that you were talking about?Mike Angelo (12:49)
Yes, it’s both. It’s absolutely a combination. So both of the ground helps. Having folks that are in the markets that you’re in, whether they’re partners or other brokers is a big piece. We will definitely fly out to all of our markets and spend time in those places for a couple of days, look at it, go back, fly back. And so you have to be, if you’re gonna own real estate in, again, I’ll use Tulsa, Oklahoma, you need to be there. You need to understand what’s going on with that specific area that you’re looking at. We have other folks, obviously, that we wanna rely on. ⁓Erika (12:50)
hahaMike Angelo (13:17)
The property manager is a big piece. live and breathe the, they’re our key partner technically, right? In all of our deals. They’re living and breathing that apartment complex every day. And or they’re gonna be your partner in the new project that you’re gonna buy. So definitely lean heavily on them and they’re gonna tell us all the things that I need, right? What’s going on with market rents? Like today, the market rents are declining in many markets because there’s a lot of new product or there’s a pretty big recession and people are just, you know, there’s a lot more concessions. So.apartment prices are coming down. Well, how does that help our underwriting or how does that impact our underwriting? It’s pretty significant, right? We need to plan for that.
Erika (13:52)
Yeah, and with all the experience that you’ve had, I’m sure you can plan for a lot, Mike, and having all those doors too. You know, there’s got to be some sort of story there that a deal went sideways or you had the pivot fast. Can you share one of those moments along your journey and what you learned from it?Mike Angelo (14:52)
Yeah, so many stories, maybe a couple of good, some definitely challenging ones. I would say a really good example is we bought a property in San Antonio. The documentation showed that there was a certain amount of tenants in the building. And so we kind of based our growth based on that. But once we really owned the property, we dug in, we started to find some skeletons in the closet. And you could do all the due diligence in the world, which is basically all the homework you do before you buy a property.⁓ But if a few months elapses, it’s again not near us. ⁓ Personnel changes, all those factors impacted the quality of the data that we were getting. And so when we owned the property, we took it over, we were like, man, we’re really 20 points below what we expect. So if you see a property at 80, 85%, we end up buying it at 65%. Well, that’s a pretty big difference in income, right? ⁓ And so that was a tough, tough piece. And honestly, takes us a long time to clean that up.
Again, that was 2022, tail end of COVID. If you recall, a lot of things were going on in the multifamily space. Tenants were allowed to not pay rent, right? They were allowed to pay, you know, basically hold their payments. Well, guess what? The landlords didn’t get to hold their mortgage payments. So we still had to make mortgage payments, right? And so if you have a space where tenants don’t have to pay, but you have to pay, well, where does that money come from? Right? So very, very challenging.
And honestly, you know, it impacted our long-term perspectives of where we’re going to invest. ⁓ I won’t bash any other states, but there’s a state that’s far west of here and it’s a beautiful place to be, but I’ll never invest there because they’re very tenant friendly versus landlord friendly. ⁓ And so that just becomes one of these challenges where you go, hey, if we need to run a business, our business is to provide good, safe, clean housing. People need that. But in exchange, we need to bring in some income, right? People need to pay for that.
So there’s some, not to get political, but there’s politics involved in where we invest as well.
Erika (16:45)
Yeah, absolutely. And, you know, Mike, I’m sure a lot has changed in five years with investing. So looking at the market today, if someone if you were going to invest today and you were starting from scratch, what would you do?Mike Angelo (17:02)
Yeah, great question. ⁓ I would spend a lot of, I would still do the same thing that I started with, which is get yourself behind the curtain with another operator. So if you try to take this all on your own, you can’t, you’re gonna struggle or you’re gonna buy a single family duplex, triplex, maybe. If you wanna get into the big space, which is, we look at 100 units plus, meaning 100 apartment units per project. That’s really the better space. The bigger space is 200 plus, but 100 to 200. You need partners, you need experience.So I would say figure out what your skill set is. Maybe you’re analytical, maybe you’re really good at talking to people, maybe you can raise money. There’s like five or six hats that people can wear and bring that skill set to an operator like again, ourselves and let’s talk. Maybe you’re in a great market that we want to be in and you could be boots on the ground, right? ⁓ But get with a partner, get with a, again, I I use the word partner loosely, but it is truly a marriage. But at the beginning, you need to find people that want to help you, right?
That’s what I would start with. And then research, there’s so much free content available. You can sign up for a membership or a mentorship if you’d like. I think there’s some good ones, but there’s some bad ones out there too. But you can get all this content for free. As far as the actual education, but the experience comes from calling Mike on the phone and saying, hey, how can I bring value to you? Here’s what I can do. That’s what I would do.
Erika (18:18)
That’s fantastic advice. Well, Mike, with all that you’ve accomplished already, I have to ask what’s next on the horizon?Mike Angelo (18:25)
Yeah, great question. Development. So we came from this construction supply world. I wanted to build something and I want to be a developer. And so we’ve gotten to dip our toes in that development space. Extremely challenging, a whole new set of responsibilities and risks. But we have a project coming, getting ready to come out of the ground. It’s been a few years in the works, which again, didn’t realize it was going to take that long. But those are things that you learn along the way. But what did we do? We brought expertise into that space.So our goal is to build more housing, more affordable housing, because we see a shift in the demographics, in the income gap, income inequality. There’s a lot of that stuff there. so folks need good affordable housing. So if we could find a way to lower the cost of housing, then we can make it more available to more people. our perspective is, I think, a truly win-win of we get to make money, we get to provide good housing, so a good return and good safe housing for people, which is a need.
Erika (19:21)
Yeah, those win-win-win situations are pretty awesome. When it comes to the timeline there, what are specifically those hurdles that make it in a development off the ground? What makes it takes a long?Mike Angelo (19:34)
Yeah, so ⁓ one is just finding a good place to buy it. The demographics and all the metrics that we study, it’s the same that applies to existing buildings. But now you have to understand, well, what’s my pipeline? You know, is there 50 other projects that are just like me, right? In the same space, I know you have a saturation challenge. Cost, sometimes you don’t know what you’re buying, what’s below the dirt. So there’s a lot of due diligence there. were, on wood here, we were lucky that we didn’t run into anything challenging there.But ⁓ it could be 18 months to four years. It just depends on how quickly you can get all of your design work done, your lending, your equity. ⁓ If you’re new, again, like us, raising money for a new project is very challenging. So we brought our general contractor in who’s a partner. We brought a development manager in who has a lot of experience. So we brought partners to boost our own resume, right? Because we knew that was a shortfall. So I think being humble, number one.
but being number two is just put people around you that are better than you and so that’s how development is much different than anything else, but I would say also similar, right? But we want to build two or three of these a year. I kind of go back to your other question. If we can do two or three of these projects per year, we are very, very happy because we get to build something from nothing, right? That’s amazing, I think.
Erika (20:51)
Yeah, and what you have going on at Nimble Capital Group is really exciting, Mike. If someone here wants to connect, learn more, collaborate, how can they reach you?Mike Angelo (21:01)
Yeah, a couple ways I can share my email. It’s mike at nimble capital group.com. It’s the best way to get ahold of me. I’m on most of the social. So Instagram, it’s multifamily Mike, LinkedIn. It’s Mike Ashish Angelo. It’s M I K E A S H I S H Angelo. A N G E L O. Reach me. I’m not on LinkedIn as much as I should be, but those are the best ways to get ahold of me. Book a book some time on the clock if you want. Happy to give you 15, 20 minutes. And if there’s any way I can bring value to folks.I’d like to give back.
Erika (21:30)
That is so generous of you and thanks so much for being on the podcast sharing your story and your expertise. It’s been really great.Mike Angelo (21:38)
Yeah, thanks for having me, Erika. I appreciate it.Erika (21:40)
And for our listeners, if you got value from this episode, make sure that you’re subscribed to the Real Estate Pros podcast. We’ve got more conversations lined up with pros like Mike who are out there building fantastic real estate businesses. We’ll see you on the next episode.
