Real Estate Without the Risk: How Lauren Rogers is Building Wealth Through Workforce Housin

Lauren Rogers (00:00)
And I just think a lot of people miss that. We’re not very financially literate in this country. And it’s super, if you factored the tax component into my returns, I would be.

even more compelling, right? But some people do that and that’s a little misleading, I think. So I don’t factor that into my returns, but if I did, ⁓ it would be even more interesting. I just think that’s what our investors tend to be looking for is tax advantaged strategies, conservative in the sense of wealth preservation,

Scott Bursey (02:10)
Welcome back to the Real Estate Pros podcast. I’m your host Scott Bursey. And today we have a fantastic guest, Lauren Rogers from Veritas Equity Partners. Lauren, it’s great to have you here. Thanks for joining us.

Lauren Rogers (02:23)
Thank you very much for having me. I’m super excited to be here and hopefully I can share some valuable tidbits today and I appreciate your time.

Scott Bursey (02:31)
those of our listeners who may not be familiar with your journey, please tell us how did your career begin and where are you at now?

Lauren Rogers (02:38)
For sure, I have a bit of a…

Interesting journey into real estate, I think a little bit different. came from the tech world. ⁓ so over a decade at AWS, Tableau and Gong, but primarily Amazon was the bulk of my career. So I learned an awful lot there. had great experiences at Amazon. think it teaches you, it teaches you a lot of things to function in that type of, you know, high pressure, high demand corporate environments, but I just reached.

point where

I was really proud of what I built, but I wasn’t sure that I wanted to continue climbing the corporate ladder. So I started thinking about other ways to make money and to invest my money. And really primarily it started with investing where I think I was doing a bit too much podcasting, listening to too much bigger pockets and was like, I’m going to be a real estate investor. And I know exactly what I’m doing because I’ve listened to like, know, 50 podcasts or whatever.

I’m

gonna buy duplex and one of my friends was like, hey, maybe you shouldn’t do that. Maybe you should talk to someone who’s actually done that. And I’m old enough and wise enough now that instead of just saying, no, I’m gonna go do this. I said, you know what, you’re right. Totally introduced me to that person. And that was my…

Scott Bursey (03:43)
Yeah

Lauren Rogers (04:03)
Now my real life partner and business partner, Alex Birch, who worked at Amazon, but we didn’t know each other at the time. Obviously it’s a huge company, but we had a lot of mutual connections and he’d been buying workforce housing in Washington state for 15 years. He started kind of above the duplex game. think his first unit was, or his first building was eight units. And then just kind of 1031 that into a couple hundred.

unit. So really interesting story, very inspiring to me. And I was I was like, wow, you have enough cash flow to be, you know, sort of retired like

Yeah, I was like, that’s pretty cool when you’re, you know, 34 years old. So I want to do that. And then turned into, you know, long story short, he was like, I actually want to raise money. And I feel really confident that I’ve come up with a strong thesis. I know what I’m doing and I have friends and family asking to get in on this, but I need someone to help. Right. And I don’t want to do this. I don’t want to be a solo entrepreneur.

So I was initially brought in to real estate

to raise capital from my tech network. ⁓

which has worked out very well for us, because I have a lot of people that have a lot of money that’s really doing nothing for them. So I go to those people and I say, why don’t you diversify a little bit? And if you don’t want to buy your own duplex, I have something better for you that’s going to be much easier and much better returns. And so that’s how I got into real estate. Now I think we’re.

Two and a half years in or something like that.

Scott Bursey (06:32)
That’s awesome. What a journey. What an incredible story. Let’s dive in, Lauren. Given Veritas equity partners track record, how do you specifically define the success metrics for your current fund investments?

Lauren Rogers (06:46)
We are always looking for deals that are, you know, can at least return like a 15 % IRR.

year total. So I’m talking, you know, on exits, when we sell the building combined with the cash flow, you know, think about it. We’re generally kind of trying to double people’s money in five years. And that is very possible in workforce housing. And it’s also I would say we’re seeing an increase and we’re actually focusing a little bit more on the cash flow component as well. We used to really

do more of an appreciation play where we wouldn’t be cash flowing from day one because we would come in and really vomit all over the units right away. You know, we basically turn as many of them as we could. Now we’re a little slower and more methodical where it’s like, hey, we want to…

Yeah, we want to be providing, we provide distributions right away. And this has switched a little bit more recently. This is what our investors and newer investors have been telling us that they want is I’m, I am hearing more of this emphasis on cashflow, which is, which makes sense to me. I actually think that’s great. think cashflow is king. I tell people it really, I work with clients that have tens of millions of dollars and very little cashflow. So I’m like,

don’t chase net worth, it doesn’t really matter that much. What I think people should be chasing is cashflow that covers your lifestyle. And as soon as you accomplish that, you are financially free and it doesn’t really matter what your net worth is. If you do that, you will also have net worth, right? But yeah, so that’s kind of my little tangent there, get myself off track. But yeah, that’s my two cents, but I would say the returns.

you know, I think are better than the stock market. And then obviously, you know, we’re giving people tax free cash flows. So I’m like, hey, here’s, you know, whatever it is, eight grand a year, that looks like a big negative and you’re banking your depreciation. So when we sell the building, you’re not paying taxes on that either. And I just, there’s nothing else like real estate when it comes to taxes. ⁓

And I just think a lot of people miss that. We’re not very financially literate in this country. And it’s super, if you factored the tax component into my returns, I would be.

even more compelling, right? But some people do that and that’s a little misleading, I think. So I don’t factor that into my returns, but if I did, ⁓ it would be even more interesting. I just think that’s what our investors tend to be looking for is tax advantaged strategies, conservative in the sense of wealth preservation,

right? Something that they’re not going to lose their money. They’re a little less interested.

and crypto or maybe those people just don’t talk to me because I’m certainly a more conservative investment right but I like to think that I get the smarter people that are like yeah I’m not trying to 50x my money I don’t want to be a part of crazy private equity where I might lose everything I just want someone to protect my money and and grow it you know and and I think we’re we’re really really good at that

Scott Bursey (10:50)
summed up very nicely what would you say Lauren is Vertis equities partners biggest strength right now.

Lauren Rogers (10:58)
biggest strength is one, being very dedicated to our mission, having a lot of experience with workforce housing and specific pockets of Washington State. So we only buy two to $10 million buildings and we’re focused in specific markets in Eastern Washington and then Pierce and Snohomish County.

And that’s all we do when we do the same thing over and over. kind of touched on it, right? But we buy a building, we do the unit turns, we make sure that there’s room in the rents, we make sure that it’s been a little bit mismanaged. A lot of these buildings have been held by an owner for a very long time, so they’re certainly not trying to squeeze every dollar out of it. They’re kind of lackadaisical about there’s a lot of places where you can be more efficient and actually provide better service and a better unit to tenants for less

money because we’re just so in the weeds on this and there is like a million areas where when you get really good at one thing right we can kind of scale our our things that we’ve learned and improve you know improve the tenant experience improve the building and ⁓ maximize you know maximize returns all at the same time. Where was I going with that? I’m like I’ll pause.

Scott Bursey (12:16)
That is some

really good core strengths and I love the direction. I love the vision. Lauren, let me ask you this. When evaluating potential secondary markets for new investments, what key demographic or economic indicators does Vertus Equity Partners focus on the most?

Lauren Rogers (12:34)
Hmm. Good question. So we…

We try to buy right around Seattle. are big believers in our city. There’s a lot of people that don’t like blue states. But what I would say is there’s a lot of people that want to live here. There are a lot of big companies here. And I’m talking really big. Like we are headquarters, obviously, to Amazon, but Starbucks, Boeing, Microsoft. We have some of the biggest health care, ⁓ you know, in the country. We also have huge Google and Meta offices. ⁓ I could I could go on and on, but there’s

It’s a huge economy in the greater Seattle area. And just because it’s a little bit harder to manage. First of all, think people really blow out of…

portion how hard it is to manage here. If you follow the rules, it’s not really that different than being a landlord anywhere else. We also buy right outside of Seattle. So we’re not dealing with Seattle proper. We’re pushing into those markets that are, know, Snohomish County. So we buy in places like Marysville and Everett and Linwood, Pierce County, Tacoma, which is where the military base is. So places that

are still, you know, benefit from the economy, but our kind of class of tenant gets pushed out to those areas because Bellevue, Redmond, downtown Seattle, very, very expensive, but there’s just no land here to build. And that’s the number one thing. And that’s why we’re so married to this particular area is like, Hey, people might be, first of all, people are migrating here and a lot of people want to live here. But okay.

sure people are going to Houston too, but when you can build a building next to your building next to your building forever and ever and ever.

it’s not really worth anything. At a certain point, it’s like if you can build forever and we cannot build anything here. And in fact, our government is making it even more difficult to build and more expensive, which is unfortunate because we have a housing crisis. from my perspective, for my business, that’s not a bad thing. I mean, just don’t have enough housing. Rents only go up and up and up here.

So we just don’t have

You know the problems that other markets have with these, you know, rents dropping. Sure, they might hold flat for a year something, but they’re not going to just drop 20%. That just does not happen in a market like Seattle. So anyway, I could go.

on and on about it, but there’s just a ton of, there is a ton of opportunity here. And that’s why we are so focused on one thing is it’s like, Hey, why, you know, why chase another market when your backyard.

is one of the best markets and I have a lot of data to back that up. You can go to my LinkedIn. You can look at all the reports that I did not produce that are produced by people more sophisticated than myself. I just went to a crew panel, is a, a, a cruise of big women’s real estate, networking group. And one of the biggest reads in the country, along with one of the biggest, ⁓ multifamily developers in the country, they, these two women were speaking and they were like, Seattle is one of our top.

markets and it is a primary market. It’s not a secondary market. you know, it’s just funny because people on the East Coast think that we’re like these crazy liberals and but at the end of the day, the people who really know their shit are buying here big, big funds, know, big money down to retail investors, particularly those who live here because they understand this is a this is it’s wonderful place. It’s a place that people want to live and it’s a place that people have to live because

Their jobs are here.

Scott Bursey (17:02)
It sounds like it’s a good situation to be in, Lauren.

Lauren Rogers (17:06)
It’s a good situation to be in. And that is one other thing too, I would say actually, when investing in someone, I do personally think.

⁓ That the operator should live close to their deals. So that’s another piece of advice that I give people is like hey real estate is a local game You you absolutely must know the owners and the brokers You must be able to see your property manager every day You must be able to see your tenants and your building in my opinion So, you know for us as well I’m like there it’s not to say that I think every other Park it in the country is bad or something’s obviously not

the case, but I’m like, hey, my expertise is here. My relationships are here. And that’s why you, that’s why people pick a syndicator, right? It’s like, ⁓ they, have relationships that I don’t have. They get access to deals that I don’t have because they do a lot of volume in one place. know, brokers want to work with me because I’m buying, you know, four to 10 deals a year. So I’m

I’m pretty interesting to them, you know, when it comes to, I get first pass at deals and that’s just something that you can’t do even with individuals that do have two to $10 million actually to go buy their own building. They still work with us because they reckon they’re smart enough to say, I don’t have those relationships. also, most of them don’t want to manage their own buildings. And so they’re deploying that capital with us, just not in a syndication, you know,

in a JV deal, but I think that’s really, really wise of them. And I try to say, hey, don’t do a DST if you need a real estate part of your portfolio. I think the move is to find someone who can. ⁓

we you know, we consider ourselves like a little family office and that’s an offshoot of our business that we weren’t expecting. We were mostly just syndicating, you know, we have 10 to, you know, 10 to 40 people basically in a deal. But then we had a lot of people start to reach out and say, Hey, I have this warehouse that I don’t know what to do with. I have this office building that I’m losing money on. have this rental house, you know, blah, blah, goes on and on. And we’ve started

1031

in people’s money and doing bigger deals with individual investors and that’s been kind cool as well.

Scott Bursey (19:31)
Focusing on your backyard is smart. It really is. And Lauren, in today’s competitive capital raising landscape, what unique difference does Veritas Equity Partners offer to institutional LPs?

Lauren Rogers (19:45)
That is a great question. I will be totally transparent that I don’t think we are the, I don’t have all the answers there. We have a lot of institutional conversations. ⁓ We do have one larger partner. I would not constitute them necessarily as institutional. They were a very large syndicator.

⁓ They have over a billion dollars worth of stuff and they just wanted to be in Washington and so we did a straight, you know, basically a 50-50 split, a co-GP ⁓ with them and that’s been a wonderful experience because their terms were very fair and we’ve learned a lot from them. Quite frankly, they vetted us.

aggressively all these institutional people do, which is, you know, there’s, there’s lots of perks, I would say from the institutional conversations I’m having, it’s very, my stance has been like, hey, if I could raise the money myself, I certainly wouldn’t work with you because you’re taking pretty big cut here. And it’s like, I don’t, I’m not desperate. I don’t work for free, you know? So, ⁓ that being said, you know, we’re, we are continuing to look for

the right partners, the group that we have been working with is great, but they’re not traditional institutional. And I would say some of the conversations have been frustrating in the sense that they are looking for inflated numbers and it’s almost feels like we’re incentivized to lie. Like in order for them to justify their fees, they’re saying, well, we need a 27 % IRR.

And it’s like, just doesn’t, we can’t do that right now. We just, not going to tell you that we can do that. We don’t say that to our investors and we don’t want to say that to you, you know, but, so we’re, we’re new to this game. There’s obviously, you know, some, maybe someone institutional will listen to this and reach out to me and give me the, the T and tell me, yeah, you need to, I don’t know, inflate your returns a little bit or.

You’re just not talking to the right people, it’s an interesting, this institutional world is an interesting game that I’m not an expert on, but I am enjoying working for my individual families and people. And I would, you know, I’m happy to stay there. I’m really happy to stay there. I’m not trying to be Grant Cardone and, you know, bye.

deploy hundreds of millions of dollars a year. I don’t need to do that, you know, but if the right institutional partner came along, I’d also be interested. just want to be, I really do want to be honest. So I’ll end it there.

Scott Bursey (22:27)
broken down very good. And on this note here, very curious, looking ahead to the next 18 months beyond traditional asset classes, what is the one non-core real estate asset versus equity partners is closely analyzing for the future?

Lauren Rogers (22:46)
That’s a great question too. You know, I would say I am so heavily focused on real estate, ⁓ you know, debt funds are interesting and I think that’s going to be a little bit less competitive.

for obvious reasons and I think real estate is going to be more interesting and I think the markets are also really tough right now. I’m not going to pretend I’m some hedge fund expert or anything, but with everything that’s going on with AI and I come from the tech world, right? So I do have money in tech and in the market, obviously have to have liquidity in order to buy deals and I’m not so anti-

market that I would say to put nothing, you know, I wouldn’t encourage people to put everything in real estate. I think it’s a component of most people’s portfolio. For me, it’s a very heavily weighted component because I control it myself, which is a little bit different. But I’m not sure what’s going to happen with these valuations of tech companies. I’m really not. It’s over my head. I think that we can all agree that the valuations are ⁓ higher than they should

be that they’re doing some misleading things and you know in terms of the debt structure and whatnot to you know to make returns look a certain way. You know there’s so much to it and then AI coming in on top of it well it’s like well what software companies then really will I wouldn’t

banking on a tech company even five years out the way I would have in the past. would say I’m gonna put this in Microsoft, Oracle, Amazon, and I’m gonna sit back and I’m gonna wait. And now it’s shifting so rapidly. I don’t want to bank my future on these companies that are shifting on the daily. So on my soapbox here. I would say tech is a little over my head right now in my own

stock portfolios confusing to me all the more reason to put something in ⁓ workforce housing or real estate which has the benefit of cash flow being very tangible and people always need a place to live and so that’s not confusing to me.

Scott Bursey (25:04)
Well, to be honest, it’s confusing to a lot of people. There’s just so many question marks out there, but you were able to provide some very solid light on that. And thank you for that with your background. And Lauren, what would you like our listeners to take away? Is there any advice that you’d like to give to our listeners here today?

Lauren Rogers (25:25)
Hmm. I think that I would just encourage people, certainly encourage people to look into real estate as a part of their portfolio. I think it’s a beautiful strategy, particularly, you know, high earners who need ⁓ really anyone who needs tax benefits and also just talk to

you know, talk to different operators. think it’s a beautiful thing to allow people to get into alternative investments. It also does come with risk, I think.

I think the benefits far outweigh that. don’t think the market is going to do what it’s historically done. I think the market is quite frankly, just as risky. But so I think you, you know, it would be wise for people to get to know some different operators and find someone that really can work hard on their behalf and build a relationship with that person wherever or whoever and wherever it is. If you really like old people homes or real estate, you know,

RV parks or construction doesn’t matter. There’s lots of ways to skin the cat in real estate that are really cool and people who are experts in all of those things. But I do think it’s worth, you know, having some conversations, trying to find someone that can do this because the ability to really make these kinds of returns as a mom and pop investor is not nearly as easy as

People make it sound. And you can do better if you work with an expert. It’s just a matter of finding that person that you connect with and that you can trust. And I would encourage people to do that.

Scott Bursey (27:07)
absolutely. That’s excellent advice. And those relationships are so critical, especially in this space.

Lauren Rogers (27:13)
All real, it’s a real estate is entirely a relationship game, you know, so I think anyone who wants to get into real estate gets that, but from the property managers to the tenants, to the brokers, to the investors, you know, everything is a relationship and it’s, some of it’s just, yeah, what’s my gut read on this person and, do I like their strategy? But I love talking to people about.

Scott Bursey (27:13)
in.

Lauren Rogers (27:38)
what we do. So I’m always open for an educational conversation. I’m happy to compare, you know, do high level underwriting to a different deal. It’s good learning for me too. So I would encourage people to reach out, you know, to myself and other operators that are kind of my size because we’re a little more accessible than some of the big ones, right? And I think that’s a really beautiful thing. I generally do take calls with people that just say, Hey, I, I might not.

money right now, but in a year I will or I’m just trying to learn. You know, and I just bought this building. Would you tell me what you think and what would you do if you were me? And I’m, I’m open to some of those conversations ⁓ in a way, but you know, maybe some other people are not, and I’m not the only person. So yeah, I think reach out to your, you know, your local operator or whoever is doing the thing that inspires you and.

you know, take it from there.

Scott Bursey (28:36)
And speaking of which, Lauren, we love fostering connections here at the Real Estate Pros. For the listeners who want to follow your journey or collaborate with you, what’s the best way for them to reach you?

Lauren Rogers (28:47)
Absolutely. Follow me on LinkedIn. I’m very active on LinkedIn and provide a lot more detail about everything we kind of talked about here. So hopefully I try to keep it very educational and not a sales pitch. @ LaurenRogers/VeritasEquityPartners on LinkedIn, ⁓ or you can email me [email protected]. And those are probably the two fastest ways to get in touch with me.

you

Scott Bursey (29:17)
Thank you so much for joining us today, Lauren. This has been so educational. It’s been a pleasure to have you here.

Lauren Rogers (29:23)
Well, thank you so much. It’s been an absolute pleasure for me as well and I really, really appreciate it. Hope that someone gets something out of it.

Scott Bursey (29:32)
And for our listeners, we appreciate you. If you did get value out of today’s episode, please subscribe. We have more conversations coming up with exceptional operators, just like Lauren. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.