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Show Summary
In this episode of the Real Estate Pros Podcast, Michael Pouliot shares his journey from a family background in real estate to a successful career in investing and education. He discusses his transition from finance to real estate, the strategies he employs in investing, and the importance of education in empowering new investors. Michael emphasizes the significance of taking action and not getting stuck in analysis paralysis, while also providing insights into the current market and advice for aspiring investors.
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Investor Fuel Show Transcript:
Michael Pouliot (00:00)
Yeah, I think the repeated mistakes is that people are less, are not really willing to make mistakes. They get stuck in ⁓ education as much as, as much as it is an education community. Something that we always say is like, if you, after this workshop, you have all the information you needed in order to go do deals. So if you leave this workshop and then you go into YouTube and you spend another 50 hours, you know, looking for the next secret, the secret is that there is no secret. You just have to go out there and do the work. And if you do, if you go out there and do the work, you’re going to be ahead of 90 % of your competition.Most people, they stay where they’re comfortable. They’re more looking for entertainment than they are looking for. They want the change, but they’re not really willing to sacrifice to get it. So if you’re willing to sacrifice, that might be time or maybe perception of who you are, if you’re willing to kind of get rid of those things and push through them, then the success is just another side of the activity. So that’s what we try to focus on the action part of it.
Kristen Knapp (02:25)
Welcome back to the Real Estate Pros Podcast. I’m Kristen and I’m here with Michael Pouliot who is of Carbon CREI and EON Capital Partners. So thank you for being here, Michael.Michael Pouliot (02:34)
Thank youso much for having me. I’m looking forward to it.
Kristen Knapp (02:36)
So you’re doing a lot in the investing space and you’re doing a lot to educate others. How did you fall in love with real estate to begin with?Michael Pouliot (02:43)
Yeah, well, thanks for that question. So my family’s been in real estate for a few generations now, and so I have been on job sites since I could walk and smell the paint and the two by fours and the two by tens and walking the two by tens from the garage into the framed out house. So yeah, from a young age, you could say it’s sort of in my blood.Kristen Knapp (03:03)
Amazing. so does your family still work in real estate with you?Michael Pouliot (03:07)
Not with me, but we’ve all sort of independently worked in some way and real estate my father. He’s retired now, but really focused on building single family luxury spec homes, at least in the last 10 years of his career. Previously doing like suburban developments and other projects like that. But yeah, I got the got the pleasure. I’ll use the word pleasure. It was it’s always difficult working with family, I think, or at least in my opinion, it was.can be difficult. And yeah, so yeah, I worked for him many summers, good pay, but really tough work, long hours digging holes. I’m not sure how relevant the holes I was digging were, but again, great cash pay. And as a kid, you don’t need that much money. So when you’re working construction, it feels like you’re rich, 20 bucks an hour, right?
Kristen Knapp (03:48)
built character.That’s awesome that you fell in love with it right away and you stuck with it and you really loved it. So when did you kind of go off on your own and start doing this full time for yourself?
Michael Pouliot (04:01)
Mm-hmm. Mm-hmm. Yeah.Yeah, so even though I had all of this experience in kind of working job sites as essentially like a day laborer or a gopher, depending on how you kind of look at it, I decided to pursue my career in finance. So I went the kind of that traditional route. I went to school in Boston, which is also where I met my wife. And then, you know,
and worked in New York. I graduated in 2011, which was not the best time to be going into finance. And I didn’t really know that at the time. I wasn’t as aware of the economy and everything as I maybe am now. But I was able to land a analyst position in the program that year.
fixed income for JP Morgan in New York. Did that through the entire program period, which is like a two or three year program. And then realized that the 100 hour weeks and I was commuting four hours a day from Princeton to New York. And so was a train to two subways to a walk. And that just was brutally brutal.
Kristen Knapp (05:08)
Yeah.Michael Pouliot (05:56)
So.It was sort of like, I’m either going to move to the city 20 minutes outside or with a 20 minute walk to the office. Because I had to be in by the morning meeting before the market opened. And that was like a seven o’clock morning meeting. So I had to be up at like 430 to get to the office in time. And then I was mostly working for clients. And I would stay as the analyst after everyone else left. And so it was four o’clock to one o’clock job sometimes, which ⁓ is a great experience, I think.
You know, you really, can work that hard. It is possible. You’re not gonna die necessarily. Although I guess some, ⁓ you know, well, neither are there. So that being said, from there, I was like, hey, we wanna start a family. We wanted to kind of like have a life. And that was not the life that we envisioned or I envisioned or my wife. ⁓
Kristen Knapp (06:27)
Yeah.Michael Pouliot (06:43)
fiance at that time did. So I moved into consulting and worked for private equity firms, hedge funds, family offices to help them with their complex investments. So they’ll buy private companies or they’ll buy positions in companies. And then I would come in and consult with them, help them understand more about what they bought, what they own, what it’s worth, as well as advise on workouts, bankruptcies, spin-outs, roll-ups, whatever.when I was there, and at that time I was like, oh, that job’s gonna be easier. That was still a pretty challenging job, long hours, and still very much being paid by the hour there, right? Because I was literally being billed out by the hour, so it was very clear. Kind of I had a ceiling, I could only work so much, and this was pre-AI, so all the work I was doing was relatively manual in Excel and presentations and stuff. Now I feel like I could’ve done 10 times as much work as I was doing then now.
And so then that’s when I started saying, I gotta find something new that is going to pay me sideways or passively and build my income so that could leave this job ultimately and pursue something that I set my own schedule and was able to accommodate a lifestyle that made more sense to me. And that’s when I started buying single family homes and made my way back to real estate once again.
Kristen Knapp (07:58)
Amazing. Well, I mean, it’s kind of nice to have that background of working so hard because then you have just like a well-rounded perspective of things and then you get into this and you’re probably way more knowledgeable.Michael Pouliot (08:09)
Yeah, I mean, I think it definitely helps to realize that there’s a lot that can be, yeah, if you can work two times as hard as other people, like just by putting in more hours and it’s something that you can just commit to and you’ll get ahead compared to everyone else who’s, not everybody else, but a lot of people who aren’t willing to put in that type of effort.Kristen Knapp (08:31)
And are you still predominantly in single family homes?Michael Pouliot (08:33)
⁓ Not not well, so we have kind of a barbell type of kind of strategy or rather kind of where I focus on so we have our I did start in single-family homes and you know, my first property was a $25,000 row home in South Philly and I was totally bombed out type of property we went in we renovated the whole thing or I renovated it and then we did the birth strategy on it and byuh, renovate rent refinance. So I was able to kind of recycle my money and then kind of do about dozen of those deals in a year. This was back in the mid 2010. So 2016, 17 credit was available. Uh, deals were not that expensive. There was, seemed to be a lot of opportunity. Uh, I can pretty much buy, I wouldn’t say anything, but as long as I was willing to buy a distress property, I could usually get at a great price. Uh, at least where I was investing in Philadelphia, West Philadelphia, South Philadelphia, places where I felt like there was path of progress due to usually.
and meds, so large education facilities and then medical facilities. then so I did single family, I did about 50 properties in the single family space over about two years, either doing birth strategies or I did some foreclosure flips. then after that, again, I was like, my gosh, this is so much activity, so much work and.
you know, it’s gonna take me, you know, it’s like $100 cash flow a house, but then I have to pay my bookkeeper and like there’s other holding company expenses that don’t translate in a spreadsheet that you have to accommodate for. And when you’re doing a dozen projects at a time, you know, who’s gonna do the project management? I was still working 70 hours a week and at that time and had a young child one at that time. And so that’s when I…
started saying, hey, I need to buy more units at a time. So that’s when I started doing that. I sold a few single family houses and I bought a 36 unit apartment complex in Chicago. I was not living in Chicago at the time, but I, but I always sort of invested remotely. So I was very comfortable with the idea of doing that. And Chicago was a very easy and quick flight from Colorado, which is where we had moved by that point. So that’s when I started buying multifamily and then, you know, kept on doing that process.
Kristen Knapp (10:16)
Yeah.Michael Pouliot (11:18)
It’s essentially the birth strategy again, but just with bigger properties a little bit longer to get it done But and a lot more a lot if you make mistakes, the numbers are a lot worse for you. So you got to be careful but Was able to get a number of probably about seven or eight of those transactions in the 20 to 50 unit space done After I got the first one done I had to start raising capital and JV and with other people because I ran out of my own money and then after doing a bunch of those propertiesmoved into larger apartment complexes and mostly in that space at this point we operate in the southeast doing 100 to 250 unit apartment complexes. We’re vertically integrated. do our own.
Obviously we raise our own capital, we find the deals, we manage those deals through our property management company, we do our own construction through our construction company, and we are actually in the process right now of taking contract services in so that we can do our own landscaping and snow removal. Although there’s not a lot of snow removal in the southeast, but certainly landscaping, there’s definitely a lot. So, yeah, so vertically integrated and continuing to do more of that. So that was like, that’s the, I guess the high end of the barbell. On the other side, we have education.
Kristen Knapp (12:08)
Wow.Michael Pouliot (12:22)
arm.We’re focused on helping investors find their first deal or get their first deal, whether that’s a wholesale, right? Just to find a property that and Bird Dog on behalf of another investor, which is a great way to get started to fix and flipping their own properties or buying rentals. And so we have a education community that’s absolutely free that we bring people into. They go through some variety of educational experiences to get what they need. And then we hopefully help support them through the process of
of getting that first deal.
Kristen Knapp (12:53)
I love that. mean, first of all, it’s so impressive that you guys are vertically integrated. feel like people think that’s more simple to do than it is. It’s very challenging to be vertically integrated like that. And then moving to the education platform, I mean, I’m sure that’s incredibly fulfilling to give back and help people get started.Michael Pouliot (13:11)
Yeah, I’ll hit on both of those things, because you’re absolutely right. The vertical integration process took us about 12 to 18 months to get done. I think one of the things that…I think we knew going in, but was still a challenge, was that a lot of the deals that we had, they all have lender approval rights for management. So in order to build your own property management company, or rather have that company manage your own properties, if you already have a book of business, you have to get lender approval, but you can’t get lender approval until you build it. So you sort of have to hire all the people on the basis that you’re gonna get approval, which is risky for pretty much everyone, right? The people you hire, for us.
right because we’re taking on all these expenses without the know the revenue and so it really was it’s very much like building the plane in this in the air as you know as you’re trying to fly or maybe as you’re falling to the ground depending on how you look at it so
Kristen Knapp (13:58)
Yeah.Michael Pouliot (14:41)
But yeah, so it took us about 12 to 18 months. And definitely, we did burn some cash. Or invest is maybe the better word of saying it. But now, it’s the impact on property operations, control, communication, hiring. Hiring is probably the most impactful part of maybe any business. But certainly, with apartments, the team on the ground is absolutely critical to your success. And no one cares about your property more than you do. And so having your own people at the property,having a deep bench of people you can bring in if someone, you know, a vacancy comes in, which happens all the time. I mean, there’s never a time when we’re full, right? Every seat is full. We’re always hiring for something and we’re always trying to build the bench so that when we do have someone go, we can bring in someone else as well as floating resources to handle things like that. So I would say the people game is still very, very much alive, at least in property. And on the education side, yeah, it’s been it’s been fantastic.
to be able to bring, you know, it’s a little bit like…
what’s the imposter syndrome, right? So like when you’re, yeah, I’ve done a lot of real estate and I’ve been doing this for a while and I’ve got this background and like if you read my bio, it seems very impressive or whatever, but when I’m actually going out and trying to help people, I’m like, am I really qualified to be helping anybody do anything? I feel like I could barely get through the day, get the kids to school, get the lunches out, whatever.
But yeah, I mean, at end of the day, if you’re just a step or two ahead of someone else, you can always share a little wisdom and help them understand what’s coming. So that’s what we try to do.
It’s been pretty successful. got a few, you know, three or four thousand people in the community now and really helping support them to that first deal, like I said, or, you know, if they’re better suited to bird dogging or they’re better suited to, you know, other activities within the business. We help facilitate those activities through our group. Since we also do our own transactions, we’re able to actually bring our students in and say, hey, you know, help us find a buyer for this. Why don’t you go out, make some calls, introduce us as a buyer.
and then they can get real world experience in a way that they couldn’t otherwise get if they were on their own.
Kristen Knapp (16:49)
What is something, like I’m sure working with so many first time investors, are some repeated mistakes that you see over and over?Michael Pouliot (16:56)
Yeah, I think the repeated mistakes is that people are less, are not really willing to make mistakes. They get stuck in ⁓ education as much as, as much as it is an education community. Something that we always say is like, if you, after this workshop, you have all the information you needed in order to go do deals. So if you leave this workshop and then you go into YouTube and you spend another 50 hours, you know, looking for the next secret, the secret is that there is no secret. You just have to go out there and do the work. And if you do, if you go out there and do the work, you’re going to be ahead of 90 % of your competition.Most people, they stay where they’re comfortable. They’re more looking for entertainment than they are looking for. They want the change, but they’re not really willing to sacrifice to get it. So if you’re willing to sacrifice, that might be time or maybe perception of who you are, if you’re willing to kind of get rid of those things and push through them, then the success is just another side of the activity. So that’s what we try to focus on the action part of it.
Kristen Knapp (17:48)
Absolutely, and whatwould you say to somebody wanting to get into investing but maybe a little nervous about the market or not really sure if it’s the right time?
Michael Pouliot (17:56)
Yeah, so the, you know, what’s the quote is the best time to plant a tree is 10 years ago or something. And the second best time is today. So the thing about real estate is you really never know when a good time is. And typically when people are most fearful, that’s when the best time is to be on the buy side. So I’m of the mind right now thatIn the single family space is a little more challenging because you are competing with individual homeowners as well. But certainly in the investment space, when people are making decisions based on cap rates and interest rates and population growth and rent growth, I find that right now is a fantastic opportunity to be buying large pieces of commercial real estate or even smaller pieces of probably even that one to $5 million space is even more opportunity because the rates are even higher. And so really looking for
property at you know in today’s market we’re looking for stuff that’s we can put fixed rate debt on we can add value and grow revenues you know 20 30 percent over the next three to five years with fixed debt with you know three to six percent cash yield in year one with growing with an expectation of growth and if I can do that with where I can buy a property today I know I’m to make really good money over a 10-year period and we’re always we’re long-term holders we’re not looking to fix and you know we’re not looking to flip these properties in three
years, really looking to be kind of even more than 10 years. Although we tell our investors 10 years and we model that out, but the expectation is that we’re going to hold this property as long as it makes financial sense. We’re never going to sell a property just to make a promote. At the end of the day, you know, I’d love to own the properties that I’m buying and never sell them, maybe recapitalize them and give liquidity to investors. But once you own a property, you know it really well. If that’s a good performer, there’s a lot less risk in just maintaining that existing property versus
is trying to buy something totally new, the expense of it and the unknown and the execution risk. So we’re long-term holders and I would say now is a fantastic opportunity to buy as long as you’re buying at the right price with positive cash flow and ideally fixed rate debt. And that’s what I would say.
Kristen Knapp (19:56)
And is that something that you see a lot? People maybe get little impatient or people just want to make money very quickly.Michael Pouliot (20:02)
Yeah, so.Definitely see a lot of that in the single family and in the wholesale space. And for people who are maybe unfamiliar with that term, just means that you’re finding properties that are typically distressed in some way that you can acquire the property at a discount to maybe fair market value. And then typically what someone like that would do is then sell that contract during the life of the contract to a buyer who would be the person who’s going to actually do the fix and flip or the buy and hold. So you’re providing them what I would consider to be an essential
service
in the market. A lot of fix and flippers or just landlords, they don’t want to go through the process of going direct to owner or running ads or doing any of the marketing activities or the sales activities necessary to find inventory. And so really as a wholesaler, you’re providing inventory for a key part of the market. And I think the wholesaling space gets a little bit of a bad rap because of maybe some folks’ business practices. I think if you are honest, you’re an honest broker with your buyers, your sellers, and you
you’re willing to take deals down if you have to, which is another part of.
or the benefit of having some scale in the business. I think you can be very effective in this space. But yes, in the wholesale space, I think there’s a lot of people toting, getting rich quick, getting deals done in a few days, like from start. a lot of case studies of that. And I think that those case studies are largely true, but they’re from people who have been in the game for five or 10 years, and they’re saying it took six days. Yeah, like six days after the first 10 years. Like, yes, you figure
Kristen Knapp (21:33)
right?Michael Pouliot (21:34)
out how to get that sale done. But also, you know, as many I did have a high reaction. I just like we don’t want to say it because like that makes it sound bad. But we had a marketing effort where we reached out to someone and then within six days we did. We signed a contract on it. We’ll make thirty, thirty five thousand dollars on that contract. But that was like, you know, that’ll happen like once out of every 30 deals. They’ll be like that. Like most deals I have to talk to that person. We have to talk to that person 10 times or more. It might take, you know,a month or a year, sometimes depending on the circumstance, they’re in probate or it’s a divorce. There’s just some natural events that make deals take longer. And in order to be successful, in my opinion, in that space, you really have to be, you have to monetize your entire funnel to be successful. You can’t just go for the deals that you’re gonna get done in the first five days, or you’ll be leaving like eight out every 10 deals on the table, ⁓ which is where the real money is. So, yeah.
Kristen Knapp (22:28)
yeah, I think that’s great advice for people and great perspective as well. So we’re getting to the end of our time, but tell everybody where to find you.Michael Pouliot (22:36)
sure, yeah,thanks. So if anyone wanted to learn more about how to become an investor, learn how to find deals, analyze deals, or sell those deals and work in…
wholesale or fix and flip, and hold. We offer all of that education absolutely for free inside of our community. It’s called the Dealmaker Fast Track. It’s inside of the school community. So, skool.com and I’m sure it’ll be in the show notes, but just if you look up Dealmaker, you’ll find it pretty easily. And then if you’re more of a credit investor or you’re looking to really put just money to work and you like apartments and the benefits, the tax benefits and the depreciation and cash flow and general
generational wealth, that sort of a thing. That’s gonna be more carbon. there’s investwithcarbon.com is a great place to go. Or you can go to my website, michaelpouliot.com. And yeah, we’ll put all that in the show notes. And yeah, I look forward to chatting with anyone who’s interested in talking.
Kristen Knapp (23:29)
Amazing. Well, thank you so much for being here, Michael.Michael Pouliot (23:31)
Yeah, thank you for having me. It was a pleasure.Kristen Knapp (23:32)
And thank you everybody for listening. We will see you back next time. Bye.
