Subscribe via:
Show Summary
In this conversation, Van Preston shares her journey of balancing a successful music career with his passion for real estate investing. Starting from her first deal in the 90s — which she financed by maxing out credit cards — Van discusses her evolution from flipping houses to owning multifamily and commercial properties. She highlights the challenges of the 2007 recession, her first multifamily purchase in 2012, and how creativity played a key role in finding and structuring unique deals, including ventures into the motel and Airbnb sectors. Van emphasizes the importance of adaptability, persistence, and networking in navigating the ever-changing real estate market while leveraging her diverse background in marketing and music to build a sustainable investment career.
Resources and Links from this show:
-
Listen to the Audio Version of this Episode
Investor Fuel Show Transcript:
Van Preston (00:00)
Well, two years ago is when I started buying literal.like motels. And ⁓ it’s just that I found some that were really super cheap and because motels are dying. mean, just they’re not, ⁓ you know, little roadside motels aren’t doing well at all. Airbnb came in sort of squashed a lot of motels. And of course, now the economy sort of affecting, I think, ⁓ travel for enjoyment and recreation. But so two years ago, I I ⁓ found three in Mississippi that were just ridiculously cheap. mean, like five thousand dollars.
unit. So it’s like, okay, I’ve got to make this happen. I’ve just got to make this happen. How can I make this happen?
Dylan Silver (00:00)
Hey folks, welcome back to the show. Today’s guest, Van Preston, is in the Mississippi Delta area and focuses on multifamily creative deals. Van, welcome to the show.Van Preston (00:13)
Thank you Dylan, I’m glad to be here.Dylan Silver (00:16)
Great to have you on here and I was mentioning before hopping on to the show here with you how interested I am in this creative deal structuring in the multifamily space and I think there’s a lot for many people to learn, especially folks who want to get into the multifamily space. But before we hop into that, I do want to ask you how you got into real estate.Van Preston (00:28)
Mm-hmm.Well, it was in the 90s, so I’m in my 50s and I was in my mid-20s when I got into it.
Basically, my husband at the time and I had searched for about two years to find a Minnesota cabin, lake cabin. And we lived in the Twin Cities. And in Minnesota, like half the people there have lake cabins. So we spent two years looking for one. We finally found the one we wanted. And a few months later, I found one on the market that was really ridiculously cheap. And so my husband didn’t want to buy it and flip it. So I just maxed out my credit cards, and I did it myself. And that was the start of a career. And I’ve been doing that since I was
know, since then. So I have a real estate ⁓ degree, my goodness, I have a real estate license and then a marketing and management diploma from College of St. Catharines in Minnesota. So I do marketing and I do real estate and all of those things help with what I do in investing.
Dylan Silver (01:36)
I want to ask youabout that deal, credit card, and the specifics of that. So was it down payment that you got from the card? How did that work? I’ve not heard of people doing this.
Van Preston (01:47)
Yeah,well, I was really lucky. ⁓ So like I said, we’d spent two years. So I knew the market of the cabins in northern Minnesota on lakes. And someone put a cabin on the market for $5,000. And ⁓ that was about the limit of my credit cards at the time. I think I was 26 years old. And ⁓ we had just had a baby. So I had a baby in tow. And so I maxed out my cards and bought it and then flipped it. ⁓ I flipped it fairly quickly. I probably could have spent
Dylan Silver (02:15)
Okay.Van Preston (02:17)
time and made a lot more money than I did but I kept on buying small ones and then yeah so that was how I did it. I think it’s a different path for everyone but that was just you know how I ended up finding my first great deal and sort of getting my feet wet and jumping in.Dylan Silver (03:22)
I want to ask you a granular question and maybe give away some of the gold here but not the whole gold bar. So was this an on market deal off market this first deal?Van Preston (03:32)
So it was an off-market deal. So back then the internet was not really around. This was 97. So at the time I would get the St. Paul newspaper every morning and scour the classifieds. So, and that’s one of my, I guess, my really great talents is I will uncover every rock. I’ll look everywhere I can to find a good deal. But back then, you know, I just was looking in the for sale by owner classified section of the newspaper. ⁓Dylan Silver (03:56)
Wow, so buying this deal, $5,000, wasit done, I’m assuming, title company, you go to a closing and you’re both there signing papers and they say, hey, it’s $5,000 and you swipe the card, is that how it was?
Van Preston (04:10)
You know, no, no, I actually like, I think I went and got cash from my cards or something. So, you know, I got the cash in order to like do a cashier’s check or something. And it’s been so long, I don’t remember exactly how I got the cash, but I got it from my cards. ⁓Dylan Silver (04:16)
Let’s have it with advance, okay.Goodness.
Van Preston (04:26)
And I actually don’t recall if there was a closing or if he just did a quit claim. There must have been a closing because I would have been worried about liens or something like that. So there must have been a closing, but my memory is starting to fade these days. So it’s been almost 30 years that I’ve been investing, essentially.Dylan Silver (04:39)
It’s it’sIt’s a while ago that first deal can sometimes create an everlasting imprint. I want to pivot a bit here and ask you about the arc from that first deal we’re talking 90s to when you start looking at multifamily and how that transition happened.
Van Preston (05:00)
Okay, well, so I flipped for a while for about a year and a half before I got my real estate license. I got my license in 99, but I discovered back then it was instead of driving three to five hours to look at a property that I had not seen any pictures of because the internet wasn’t a thing at that time, I decided to get my real estate license and start buying locally in Minneapolis and St. Paul. So I did that for a while. I moved to Nashville, Tennessee in 2004 and I started instantlydoing co-living because I had to. So I bought a large house on Percy Priest Lake in Nashville and I think it had five bedrooms and I turned the den into another bedroom and I just did co-living. just, you know, rented out every single room except my room. And so I sort of fell into multifamily, if you could consider that multifamily. Before 2004, I’d never kept a property that I’d rented. I was just flipping. So then in 2004 was when I started
renting, became a landlord. And then in 2012, I bought my first multifamily. So I’m also a singer-songwriter, and I got a song on a pretty large duo that was on a record label in Nashville. And so my first commission check, I told myself, I’m going to use this, and I’m going to try to find a multifamily and buy it. And so I bought, I found one in a small town about two hours outside of Nashville, and that was my first multifamily. That was 2012.
2012. And then from there, I just kind of kept doing it, but I mostly was focusing on single families. And then in 2016, I bought a commercial building in sort of a prime area of Memphis, and I was doing rentals there. 2012 was my first multifamily and kind of been doing it since then.
Dylan Silver (06:37)
Hmm.Thanks.
So I’m seeing really multiple things. So first, ⁓ singer-songwriter, at that point in time, we’re talking 2012 timeframe, was that like all of your time and energy was the music career or was it a little bit of both real estate and music? What was your day-to-day life?
Van Preston (06:58)
ThankWell, when I moved to Nashville in 2004, I was still flipping like crazy because that’s basic. was my primary thing. And then I, like I said, I was renting out rooms in my house just to make, you know, cover my bills and things like that. The recession sort of, I noticed the recession in 2007. And I think that might’ve been when the no-doc loans stopped because before that time I’d been investing, you know, 10 % down on no-doc loans. so from,
It actually coincided really well because I was doing my own music and I had some success and I had to go and tour in Europe and a few other places that I was invited to tour. So I didn’t do a lot of real estate between, well actually between 2005 and 2011.
Dylan Silver (10:43)
So day to day we’re talking that this 2010 2012 time frame and slightly earlier than that What was your day to day like was it a lot of music a lot of real estate or was a little bit of both?Van Preston (10:57)
So from like when I got to Nashville in 2004I was juggling flipping houses with, you know, doing music. And then I would say, so my music career sort of started taking off in 2005 after I recorded my first album. And then I started doing a lot of shows and radio tours and started getting invited to do tours in Europe. And I went to Australia to do some shows there too. So from 2005 until I guess like 2011, I didn’t do nearly as much real estate. I was still doing a little bit.
⁓ But I wasn’t doing as much as I had been before I moved to Nashville. And then, ⁓ and so, and part of that was due to the recession. was just like I couldn’t buy properties because there was no, there were no more ⁓ no-doc loans, which is how I had been buying them before, you know. So when that gravy train ended, you know, my career in flipping houses took, you know, took a little downturn because I didn’t have that much cash to keep buying with cash. I paid, you know, cash for,
Dylan Silver (11:39)
Yeah.Yeah.
it.
Van Preston (12:00)
couple of properties, but I wasn’t selling those. ⁓ yeah, it kind of worked out really well though, because during that timeframe that the real estate market sort of took a nosedive, ⁓ my music career was kind of taking off. And so I did a lot of music in that timeframe. We bought one house during the recession that we were planning to flip and it ended up we couldn’t sell it. So we kept it as a rental. then, yeah, so we, we actually, there were two or threeDylan Silver (12:27)
There you go.Van Preston (12:30)
that we’d bought during that time that ended up being rentals because we just couldn’t sell them. But that worked out pretty well. And then, like I said, in 2012 when I started buying multifamilies, I started with a Triplex in Jackson, Tennessee, and ⁓ then started buying commercial in 2016 in Memphis. My one regret is I wish I had started doing large multifamily a lot, lot sooner. Because the sooner you do it, the sooner it’s so much easier toyou know, make a really good living when you’re doing multifamily instead of when you’re flipping or investing in single families.
Dylan Silver (13:04)
Yeah Thethe the Addages is that that you’ll have a similar number of obstacles and hurdles headaches if you will and so you might as well go larger There is some leverage there There is some risk, but if you bring on partners and if you have people who can guide you I think it’s a great thing when you’re getting from the single-family space into the commercial space was there a certain
Van Preston (13:24)
Mm-hmm.Dylan Silver (13:34)
asset class within commercial that you were heavily looking at, small multifamily, were you looking at several different types of deals or were you in many ways agnostic to what you were looking at as long as it made sense?Van Preston (13:49)
⁓ I think like a lot of investors, I was following my heart instead of really studying the best ways to do it.What I did is I had a whole bunch of single families in Jackson, Tennessee that I had acquired from 2012 until about 20, well, 2016 when I bought my first commercial building. And because I couldn’t get a loan on this commercial building, I decided I was going to sell all of my single family residential rentals to pay cash for the commercial building. yeah, so that’s what I ended up doing. And it’s just very hard to get financing for commercial or for
Dylan Silver (14:21)
Bye.Van Preston (14:29)
multifamily. It’s extremely difficult. ⁓ And so I didn’t really, I wasn’t participating in any real estate investor groups and I really wish I had been because you even back then I think there were, those were strong. I’ve been kind of a lone ranger most of my real estate career and I think a lot of people probably ⁓ learn things a lot sooner than I did because they’re part of real estate investor groups. ⁓ But so I’ve sort of learned on my own through trial and error. ⁓ But yeah that was, I sold everything.I had to get that commercial building. ⁓ then that’s kind what I’ve done to get most of my commercial buildings. And I’ve found really affordable deals. I’ve found things that ⁓ either needed a lot of work or they were sort of oddball properties. Like I bought an old medical building that I’m converting to an Airbnb sort of ⁓ hostel type, like a European hostel type building. And we’re putting a bar in the lower level of it.
Dylan Silver (15:58)
it.Okay.
Van Preston (16:10)
And so I’ve just had to be super creative because when there’s a lack of funding, you you just start where you can and you find what you can afford and you just keep building from there.Dylan Silver (16:21)
When youwhen you talk about these commercial spaces Do you have ⁓ a specific exit strategy that you favor you mentioned this Airbnb, you know like a European ⁓ Hostel, you know type of thing or a hotel with a bar Is that is that something that you’ve done in mass or is each commercial property different as each is each deal unique?
Van Preston (16:45)
Yeah, each deal is just unique. ⁓ Like, for example, we’re now buying motels that we’re converting to studio apartments. And one of them ⁓ has a restaurant. It was a Holiday Inn Express previously. So we’re going to do a restaurant in that one. But we’re going to lease out that space because I absolutely don’t want to get into the food industry. The real estate industry keeps me busy enough. ⁓Yeah, so each one has its own, like whatever I feel like it’s best suited for is kind of what we’re doing with each property.
Dylan Silver (17:18)
I want to ask you about this idea of ⁓ if I’m not mislabeling, this hotel space, So buying motels, turning properties into hotels and motels. I’ve heard this is a tricky area of real estate to be involved in and that there’s more oversight, more maintenance, more issues that can come up. What’s been your experience in this space and how did you decide, hey, I’m going to buy hotels and motels?Van Preston (17:48)
Well, two years ago is when I started buying literal.like motels. And ⁓ it’s just that I found some that were really super cheap and because motels are dying. mean, just they’re not, ⁓ you know, little roadside motels aren’t doing well at all. Airbnb came in sort of squashed a lot of motels. And of course, now the economy sort of affecting, I think, ⁓ travel for enjoyment and recreation. But so two years ago, I I ⁓ found three in Mississippi that were just ridiculously cheap. mean, like five thousand dollars.
unit. So it’s like, okay, I’ve got to make this happen. I’ve just got to make this happen. How can I make this happen?
And the first one, I was able to find a hard money lender who would do it. Most of the hard money lenders that I approached, because I’ve worked a ton of deals with hard money lenders since I moved to Memphis, but most of them wanted to do a joint venture on it, on these properties. it’s like, I didn’t want to give that up.
didn’t want to do that. I wanted to keep this for myself because the profit’s going to be there. ⁓
Dylan Silver (18:52)
Yeah.Van Preston (19:00)
⁓ So the first one, I did get a hard money lender actually outside of Nashville that did that first one for me. And then the others have owner financed because motels are just like a lot of them in the smaller towns. You you can’t get, I mean, you have to have, it’s just almost impossible to get a loan on a motel because the small ones are dying. So their numbers aren’t up for, you know, for the local lenders and stuff. And so I wanted to turn those into, you know, studio apartments.Dylan Silver (19:13)
Yeah.Van Preston (19:30)
And so that’s kind of what we’ve been doing. And it’s just like, oh my gosh, the returns are amazing. If you can buy them, super cheap, between $5,000 and $10,000 a unit.Dylan Silver (19:41)
I want to ask you about finding these deals. So a little bit different strategy I imagine than that first deal in the 90s, right? So when we talk about buying motels and buying properties that can be turned into affordable housing for people, I’ve heard specifically when it comes to motels, you can find some of these deals like on a loop net, but also you might just be able to go and identify a distressed seller from knowing the area. What has been your strategy in the case of that motel? How did you come across that motel?Van Preston (19:45)
Mm-hmm.Mm-hmm.
up.
So I just like back in the 90s when I used to scour the classifieds, like I literally I scour every deal wholesalers send me. I scour, I used to scour Craigslist but I don’t even bother with them anymore because there’s a lot of scams on there now. But so Facebook Marketplace, Loopnet, ⁓
CREXI, I don’t know if I’m saying that right, C-R-E-X-I. ⁓ And I mean, even right now, if you look at motels on ⁓ LoopNet, can find quite a few. For the smaller towns, a lot of people are overpricing their motels. I’ll probably be willing to go up to 15 or 20,000 per room. But ⁓ other than that, I mean, there’s so many variables and you’re paying more expenses for motels than you would for a regular apartment complex because you have to pay the utilities.
Dylan Silver (20:34)
Yeah.Yeah.
Van Preston (21:00)
andstaff and you things like that but but when you get them cheap enough so you know it can it can make it work even with the expenses being higher but I would just say you know just look everywhere you can I mean I’ve told every wholesaler that calls me and texts me which is all the time you know please look out for multifamilies and motels and even weird buildings I almost bought a school building I was going to convert to multifamily and because each you know classroom already had its own bath
Dylan Silver (21:03)
That’s right.Mmm.
Van Preston (21:30)
and things like that and the seller wouldn’t come down off his price so I didn’t buy that one but it would have been a good one as well. And a lot of these weird buildings like a medical office building or a school, I mean the price per square foot is just insane and the number of units you can make in those large spaces is just incredible. I mean for me just doing it on my own without any partner or anything like that, I’ve basically justDylan Silver (21:32)
Yeah.Van Preston (22:00)
focused on what can I get that I can get the most bang for the buck and put the most people in here and make the most number of units inside that property.Dylan Silver (22:10)
I want to ask you about schools, you’re looking at some creative deals, right? But there’s also, I would say, a barrier to entry for folks who may be in the space and looking at getting into some of these creative deals. If I’m someone, let’s say I have experience flipping, right? And I’m looking at getting into multifamily, what would be your advice to me? Whether it’s start looking at all these places that you mentioned, wholesalers, crack seed, loop net, Facebook.Van Preston (22:16)
Mm-hmm.Mm-hmm.
Dylan Silver (22:39)
And would you tell me, know, hey, this is an asset class that you should really look at, like, for instance, motel, you should really take a look at motels.Van Preston (22:46)
Mm-hmm.Well, ⁓ what I would probably suggest to someone asking that exact question would be ⁓ because it is hard to get into motels and, you know, multifamily or even commercial buildings that you can turn into multifamily, start with like the largest houses in the best areas you can get ⁓ that you’re going to flip or that you’re going to do the BRRR method. The problem with doing the BRRR method is you’re not going to get your whole profit out that you’re going to need, you know, in order to go
and have the absolute most cash to put down. If a distressed owner is willing to do owner financing for a short term, and then you can roll it into an SBA loan once you’re in there, or you can get a commercial loan once you’re into the property. But I would just say, get the largest, like if you can buy, say, a single family home that’s got another home on the back lot behind it that you can possibly get 50 to 75,000 equity if you reach.
refinance it or if you flip it, you might get 80 to 120 if you make a profit like that. ⁓ And then you can take that and that’s your seed capital that you can go and do your first deal and get your first commercial property. like with the motels, ⁓ with the first one that ⁓ we got a couple of years ago, ⁓ basically, I mean, it had like 200,000 equity. So then you can take that out when you refinance it.
Dylan Silver (23:52)
Yeah.Van Preston (24:16)
And you know, and you’ve got that, but you have to start somewhere. So you have to build some capital because you’re not going to be able to get hard money loans on some of the best deals. ⁓ And so a lot of the distressed owners will, yeah, they’ll, a lot of the distressed owners will take, if they can see you’re really hungry, they’ll take, you know, as, you know, as much of a cash down payment as you have, and they’ll give you, I’ll do super short-term owner financing. I’ll say six months to 12 months, and then I’ll just pound the payment until I findDylan Silver (24:27)
you’ll need that.it.
Van Preston (24:46)
know, a way to refinance it or put it into an SBA loan or something. ⁓ there’s, mean, I would say just look everywhere you can for the best deal you can.Dylan Silver (24:54)
Right.Look for the best deal. I mean I think
about my journey in real estate But I also have spoken with so many people who are going through either right now or in the last you 12 months going through a Transition and what they’re investing in but also maybe having to learn something new whether it’s flippers going into ground-up construction Or people going into modular homes. There’s definitely a lot of interest I would say in
different deal structures when you talk about even things like self storage and RV parts, which does have some synergy with what you’re talking about here. People are having to get crafty and learn new skills. We are coming up on time here though, Van. Where can folks go if maybe they’re interested in reaching out to you and maybe they have a deal in the Mississippi Delta area they’d like you to take a look at? How can folks get in contact with
Van Preston (25:30)
Thank⁓ Well, so my. ⁓
I’m on all the social media sites under Van Preston. So I’m on Facebook, LinkedIn, know, Instagram. I think I did reactivate my TikTok, ⁓ but I don’t really do a lot of real estate on any of those. I am a licensed real estate agent in Tennessee. So I do work with buyers and sellers in the Memphis area and, know, in other areas of Tennessee. I’m about to get my Mississippi license. I don’t do as much with buyers and sellers as I used to just because I stay pretty busy.
doing my own sort of thing. ⁓ But yeah, so if they look me up on those social media sites, they can also email me at vanprestin.memphis at gmail.com. So that’s like my personal email. And ⁓ then I have a website of my music. So it’s vanprestin.com. And so that I have several like links to my music there. And I’m about to start recording another album. So I’m very excited about that. My husband’s also a musician, so and a producer. ⁓
Dylan Silver (26:26)
ThankVan Preston (26:49)
recordingengineer. So he’s going to do a lot of it. And then I’ve got just a boatload of songs that I’ve written in the last 10 years or so that haven’t seen the light of day yet. So I’m excited about that. Thank you. Thank you so much.
Dylan Silver (26:59)
Dan, thank you so much for coming on the show today.
