Multifamily Is on Sale: Finding DFW Apartments 20–40% Below Prior Values | Ryan Porter

Ryan Porter (00:00)
And so really where I see the opportunity is that there are assets right now in the Dallas-Fort Worth area that are trading at 20, 30, 40% below the values that they traded just four to five, six years ago. And effectively there is a rebasing of the market there. There was a frothy market in the 2020, 2021 timeframe where a lot of new players came in and they were purchasing assets at high prices using bridge debt. And that bridge debt is coming due right now, and the numbers just don’t compute.

Scott Bursey (02:12)
Welcome back to the Real Estate Pros Podcast powered by Investor Fuel. I’m your host, Scott Bursey. Glad you’re with us. And today we are thrilled to be joined by Ryan Porter. Ryan bridges two worlds perfectly. He’s a tech veteran with twenty five years in the Bay Area, currently a principal consultant at Amazon Web Services, and is the founder of Porter Legacy Group. He brings hands on real estate experience flipping, remodeling and renting apartments from California to Latin America. Today we’re going to learn how he brings that high level, data driven rigor to the world of multifamily investing for rock solid returns. Ryan, welcome to the show.

Ryan Porter (02:54)
Thank you, Scott. It’s great to be here.

Scott Bursey (02:56)
It is awesome having you here, my friend, and to help our listeners get up to speed. Please give us the ninety second highlight reel of how your career ignited and where you’re pouring your fuel now.

Ryan Porter (03:07)
Yeah, Scott. Well, it started about 10 years ago. I’ve been working, as you mentioned, in the technology industry in the San Francisco Bay Area for over 25 years. And I really had an inkling for real estate from the time that I purchased my first condominium unit in San Francisco in the Mission District and started remodeling that. And it also goes back before that. I kind of grew up in the industry with my father and my uncle running a real estate shop on the on the East Coast of the United States in the Pocono areas outside of New York City where he sold single family houses to kind of high net worth individuals coming out of the city. And so I had that exposure at a young age. I moved to California, I purchased my first condominium, probably about 15 years ago. Started remodeling that and just got the bug to do more. And so over time I did a number of remodels in California and I got exposed to Colombia, Medellín, Colombia, and traveled down there and did a number of fix and flip and midterm rentals. In the city of Medellín, traveling back and forth, learning Spanish at the time. And so at that point I felt like, wow, this is very cool. I’m having a great time. It’s a great creative outlet, just envisioning creating these condominium units for digital nomads and professionals that are being moved into an area. Or just traveling on their own because that’s what they want to do. I wanted to scale the business. I wanted to understand how I could take something that was kind of a hobby and really develop it into something that was much larger and, would kind of pay returns that were that were larger. And so I happened upon multifamily. And so I started learning and studying and I picked a market. That market is Dallas-Fort Worth. And so over the last few years now, we have purchased two buildings. One of them’s 150 units, the other is 147 units in the Dallas-Fort Worth area. And right now, as we speak, we’re getting geared up to raise capital on our third purchase, which we’re I’m super, excited about. It’s about 250 units that we’re gonna get at an incredible basis.

Scott Bursey (05:46)
That’s an incredible journey, Ryan. Truly impressive how you balance those two high-stake worlds. And what really caught my attention about you was the way you’ve been able to apply that enterprise-level engineering mindset to the chaos of real estate markets, essentially treating a multifamily asset like a scalable cloud infrastructure project. Building on that, curious to know. What is your greatest strength when translating your corporate AWS experience into your real estate acquisitions?

Ryan Porter (07:05)
Yeah, Scott, I think just from the tech background and seeing, a business, the size and scale of Amazon, systems and systems thinking and how to build systems and to continuously improve them and measure them and work on them and get them to deliver results. So that’s the answer.

Scott Bursey (07:26)
And wondering, Ryan, what do you see as a personal weakness or perhaps blind spot that you’ve had to overcome while managing properties in diverse markets like Latin America?

Ryan Porter (07:38)
Yeah, so our weakness, I think, on the multifamily side is basically marketing and top of the funnel activities, getting investors in, getting them interested in what we’re doing, and then walking them through the journey and getting them ready to invest in multifamily assets. Now I there is an advantage that I have in that space is which I know a lot of tech folks, right? And they’re high earners. And they are paying a lot of taxes. And they’re really focused on being an employee. And if you think of Robert Kiyosaki’s CASHFLOW Quadrant they’re really focused on that employee side of things. And what we’re trying to do is to help them get over to the I, the investor side of things, so that they can get their funds, their, investments, their money working for them when they’re sleeping, right? And they’re not trading their time for dollars. So what we’re trying to improve our weakness right now is to get access to those folks and to get them to understand this asset class and invest with us in this asset class.

Scott Bursey (08:56)
Appreciate you being real about the challenges, Ryan. Digging into the opportunity side of things. Where do you see the biggest untapped potential for data-driven multifamily investing currently?

Ryan Porter (09:09)
Well, multifamily is a cyclical business, as we’ve seen and many of us know. And we’re at the bottom of the of the of the portion in the in the cycle right now. And we’re starting to see some signs of of improvement. And so really where I see the opportunity is that there are assets right now in the Dallas-Fort Worth area that are trading at 20, 30, 40% below the values that they traded just four to five, six years ago. And effectively there is a rebasing of the market there. There was a frothy market in the 2020, 2021 timeframe where a lot of new players came in and they were purchasing assets at high prices using bridge debt. And that bridge debt is coming due right now, and the numbers just don’t compute. And so we have an opportunity right now to go in and pick up solid assets that cash flow now. And so that is really what we see as the great opportunity for us.

Scott Bursey (10:18)
Ryan, in your view, is that something a newer investor could replicate without a tech background?

Ryan Porter (10:25)
Well, y yes, it depends on if you’re going to be on the general partner side and you’re running and managing the deal, or if you’re on the limited partner side where you’re effectively an investor that, there’s not a lot of management that’s required of you. You just put up capital and you wait effectively for returns and hopefully you get you get good communication and you understand the asset. You underwrite it perhaps, you look at the market, you look at the neighborhood. And so if you’re on the LP side of things, you it is fairly easy to kind of get started and involved. It just involves you taking the risk of putting your capital into a deal. Now, of course, if you want to move yourself to the GP side of stuff, which is where I’m I’m both an LP investor and a GP investor, that takes time, right? That takes a lot of education and just getting up to speed on how to run and manage those deals and those assets.

Scott Bursey (11:27)
Appreciate that there, Ryan. Reflecting on the current landscape, what do you view as the biggest threat to the multifamily asset class in let’s say the next twelve to twenty-four months?

Ryan Porter (11:39)
Yeah, so one thing that we keep a close eye on is our market demographics. So we are focused on C class and lower, B minus class buildings. And what we’re doing is a value add strategy where we’re taking capital and executing a forced appreciation by investing in the building and bringing the building up to snuff, so to speak. Because over this period of time where interest rates have been high, rents have been flat, and there’s been distress in the market, we know that many of these assets are missing, the TLC that they that they require. And so effectively the demographic of the folks that rent from these C class buildings are what we call workforce housing individuals. And so they are the laborers, they are folks that are living on fixed income and they’re renting because they have to rent. And so we’re watching that demographic, and there are some constraints, I will say, with housing formation, new folks, creating, new homes and deciding to kind of get together and move in together. There are immigration challenges as we know with the current immigration policy and ICE. We’ve had ICE raids at our at our buildings. We’ve had really good paying folks get up in the middle of the night and just kind of leave without warning. And so that’s something that we’re watching is just how the population and this market demographic goes over this next couple of months. Now, fortunately, we’re operating in DFW and there are approximately 400 people that moved to DFW a day. And so we have an influx of people coming in due to market conditions, jobs and what have you. But we also have to be concerned about this demographic and how much of them are leaving as well. So we’re watching that.

Scott Bursey (14:31)
Does your corporate risk management background change how you’re positioning your current portfolio?

Ryan Porter (14:37)
I think it does. I mean, I think we do focus in our underwriting and in everything that we do on managing risk because our money’s going into the deal, obviously. I have friends and family members that are investing in the in these deals and our biggest concern is capital preservation and kind of managing risk. And so we do look at risk quite significantly.

Scott Bursey (15:07)
Ryan, really wanna ask, what is the specific strength you’ve developed in your tech career that has directly improved your tenant retention for operational efficiency?

Ryan Porter (15:20)
Yeah, this one might be a surprising answer. One of the things that I’ve learned at Amazon and AWS over the last five years or so since I’ve been there is the discipline and study of emotional intelligence. And as an engineer and a person that thinks about systems a lot, you can tend to leave the emotional side of life and of business without developing that and so I believe it’s core to what I’m doing in both my life and business is really focusing on being able to work with people and understand people and kind of manage and regulate my own my own emotions and that allows me to kind of connect and get to a deeper perspective with the folks that I am working with, partnering with, that are renting from me, that are my contractors and so forth. And so that has been an area that I have focused on greatly over the last five years, I’d say.

Scott Bursey (16:27)
Could you give us a quick example of a system you built that changed the game for your rentals?

Ryan Porter (16:33)
So we are using intelligence, artificial intelligence in our business as much as we can. But specifically when we’re when we’re underwriting and when we are producing analysis documents in regards to a specific asset. We have found that writing and keeping long prompts, art of artificial intelligence prompts that we can put into Gemini, for example, because we use Google to manage our email and manage our systems internally and we have kind of like corporate paid access to Gemini. And so we use standard operating procedures. And within those SOPs, we have prompts that we have developed over time that each time we want to look at and analyze a property, we can enter this prompt and we can see information. It produces a document, a report for us. That report tells us about the schools in the school district. It tells us about the crime in the area. It goes out and looks for any type of publications that have may have purchased may have published something about a robbery or a murder or something like that. And so it produces this whole kind of investor analysis document. And so that’s that really improves and lessens the amount of time it takes to gather all that information together. And so it saves a great deal of time.

Scott Bursey (18:07)
Ryan, for the listener that’s absorbing your intellect here and they’re thinking to themselves, hey, this is somebody that I really like. What would you like them to know about Porter Legacy Group?

Ryan Porter (18:18)
Well, we would like them to know that we are in the multifamily space and we are investing what we think is the top or one of the top markets in the United States. We would like them to know that we think that the timing is fantastic. The cycle in the market is right there. And if they are looking for returns. And especially if they’re high income W-2 earners that want to have passive tax-advantaged returns, we can help them get that. And that’s what I was looking for personally, is to get more involved in real estate and to do so kind of in a passive way. And so that’s really what we’re helping them do. We want to help my demographic get better invested in real estate and asset class that we think that will serve them for the long term and especially their tax needs.

Scott Bursey (19:20)
Ryan, if you could take us down the path, what does your professional network look like right now?

Ryan Porter (19:25)
So I have several different networks. So we’ve talked a lot about the tech background. And so in the San Francisco Bay Area, I’m well connected with folks at Facebook and Twitter. Also obviously at Amazon. I worked with Microsoft technologies for a long time. I have many, friends working at Microsoft. And so that’s kind of the professional network. I have spent a lot of time over the last few years in Dall Dallas-Fort Worth. And so I’m well connected there with the multifamily broker community, the lenders and the other GP operators there. So I’m in Dallas generally once a month. And then I have a contingent of folks I would say from the East Coast that are friends and family of that’s where I I grew up and I go to New York quite often and spend time there. So I have friends that are in various industries there. And so I would say that those are the three buckets that I that I have.

Scott Bursey (20:32)
Love hearing that. Collaboration is key. And Ryan, we have to know, if you were forced to start over with only your tech knowledge and no capital, what is the most valuable data point or metric you would hunt for to identify your first deal?

Ryan Porter (20:49)
Wow. Tough one there. So I think creating value is the name of the game to push returns. And so I would say that any time that you can get in at a really good basis of any type of asset and that asset is a is a tangible piece of property that you can touch and feel that’s when you are looking at an opportunity and so I would look at basis first an incredible basis will solve a lot of problems

Scott Bursey (21:27)
Thank you for sharing that wisdom. And Ryan, you have shared a lot of wisdom with our listeners here today. But is there any additional golden nugget or two that you’d like to leave with our listeners?

Ryan Porter (21:39)
I would say that it’s a journey, right? What I have learned over time is that investing and being an entrepreneur and being in business is not for the faint of heart. It takes a certain amount of stamina and stick-to-itiveness that frankly I didn’t know that I had in my in myself. It developed over time, with setbacks. And so, I think that just having the right attitude, having patience, having emotional intelligence and being able to kind of make it through the ups and downs and come out the other side is really the biggest lesson that I have learned through this journey.

Scott Bursey (22:25)
Powerful. That is so powerful. And for those of our listeners, Ryan, that would like to keep this conversation moving, stay in your lane, or perhaps even collaborate with you on future deals, what’s the best way for them to reach you?

Ryan Porter (22:38)
Yeah, our website is porterlegacy.com. And they can anyone can go to porterlegacy.com and there’s an invest with us button there. They can enter their information, they would get on our mailing list, they would receive our monthly newsletter. And then also via the website, they can follow us on social media platforms. We’re pretty active in posting. My father is. And so that would be a great way to get connected with us.

Scott Bursey (23:08)
Ryan, thank you so much for joining us today on the Real Estate Pros Podcast.

Ryan Porter (23:12)
Thank you. Thank you, Scott. This has been awesome.

Scott Bursey (23:15)
Yes, it has. And to our listeners, we appreciate you. If you receive value from today’s episode, please subscribe. We’ll be filling your tanks with a lineup of elite guests, just like Ryan Porter, who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you on the next episode, everyone.