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Show Summary
In this episode of the Real Estate Pros Podcast, host Michelle Kesil speaks with Janice Greenley, a multifamily real estate investor in Texas. Janice shares her journey into real estate, the keys to her success, and the challenges she has faced along the way. She emphasizes the importance of providing safe and clean housing for working-class families and discusses her strategies for finding and partnering with investors. Janice also outlines her future goals for scaling her business and the lessons she has learned throughout her investing journey.
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Janice Greenley (00:00)
We were supposed to take a supplemental loan to have the right LTV and also increase our returns. But there was some retrade that happened due to what we found during due diligence. So that changed the numbers enough where it threw off our LTV, so the initial lender didn’t lie.like our supplemental loan, and so it just created this kind of trickle-down effect. And so we had to figure out, all right, what are we gonna do? Are we gonna raise more capital? Are we gonna go back and renegotiate? But we had to figure that out because you have to.
You you just make it work. we really had to re-underwrite the entire property
Michelle Kesil (02:20)
Hey everyone, welcome to the Real Estate Pros Podcast. I’m your host, Michelle Kesil and today I’m joined by someone that I’m looking forward to chatting with, Janice Greenley who has been making serious moves as an investor who has purchased her first multifamily property this year. So, excited to have you on the show today, Janice.Janice Greenley (02:43)
Thank you Michelle, I’m really excited to be here. I’m honored, really appreciate your time.Michelle Kesil (02:48)
Yeah, absolutely. think our listeners are really going to take something away from how you’re approaching working in the Texas market. So let’s dive in.Janice Greenley (03:00)
Awesome.Michelle Kesil (03:01)
First off, for those not yet familiar with you and your world, can you share what your main focus is?Janice Greenley (03:09)
Sure, absolutely. So our main focus, and I’m in business with my husband, but I am kind of the face of our company. Our main business is investing in multifamily real estate in the Texas market, mostly DFW, but also tertiary markets.We’re also expanding and looking at some self storage. We’ve been close on a couple of self storage deals but have not gotten one over the closing table yet. ⁓
Michelle Kesil (03:42)
Awesome. How did you get started on your journey as investors?Janice Greenley (03:48)
Sure, so ⁓ it’s funny, I feel like most of us kind of fall into our careers by accident. ⁓ And that’s really how we got started in real estate. We have another small business where we provide ⁓ essential services like internet and electricity to. ⁓customers and a lot of our best referral partners were leasing agents, property managers, and that’s really when we learned about syndicating and the opportunity to be an owner of some of these communities. And so we jumped right in and said we need to figure this out.
Michelle Kesil (04:25)
Awesome. What have been some of the main keys that have allowed your business to be able to run smoothly?Janice Greenley (05:22)
finding really great partners to work with, trustworthy folks that are risk averse, that do what they say they’re going to do, and ⁓ are a great support team for all of us. I would say that’s the best thing.Michelle Kesil (05:43)
Yeah, absolutely.So I know that multifamily is what you mentioned that you’re focusing on. Can you share a bit why that’s what you chose and
Janice Greenley (05:54)
Yes, actually I’m really passionate about the multifamily space, specifically housing ⁓ for working class families. ⁓I feel like there’s always going to be a need for someone to have a place to live. And I want to provide housing that is clean and safe. So when maybe a single mom pulls in at night and they feel good about going home to that space. ⁓
I don’t do luxury housing. I don’t do anything that is really beat up. I don’t want to be a slumlord. I really want to provide something that people can be proud to go home to that space every day.
Michelle Kesil (06:44)
Yeah, amazing. And as far as this deal that you have accomplished, can you share what that process looked like?Janice Greenley (06:54)
Sure, so one of our partners was approached with the deal late last year and we did underwriting and it looked pretty good. ⁓kind of negotiated the initial price. And then in December, a team of us went ⁓ to the location and did a week long due diligence. So we checked every unit. I mean, we looked under the hood really, really well and decided that we wanted to move forward. So ⁓ we closed.
Gosh, we closed the end of April, which took a little while, but there were multiple things in play, including some 1031 money that invested in our deal. So we had some dates that we had to meet. But we closed end of April, and then we, as a team, decided, all right, here’s the projects, here are the things that we need to do from a value add perspective. Here’s what we need to do from a how do we make this
property better for our tenants. So now we’re in the process of we’ve prioritized all of them and we’re initiating those things like updating some of the units. We’re converting a basketball court to a pickleball court. We’re updating the playground, you know, doing all of those value add things as well as some of the things that were lender required projects as well. And I can go into a lot more of the nitty gritty details, but that’s really it.
⁓ on a grand scale of what we’re doing. And we do plan to hold it for at least five years. We were really blessed to assume a loan at a great interest rate. ⁓ So it just makes sense for us to utilize all of that time ⁓ to pay down that mortgage, gain equity, and really do a good job for our investors when we do sell in the future.
Michelle Kesil (08:54)
Yeah, amazing. Sounds like a great opportunity that you have.Janice Greenley (08:58)
Thank you.Michelle Kesil (08:59)
So every business owner has those moments where things get more real, maybe a deal doesn’t go the way that you planned for it, and you have to make some pivots. Would you mind sharing a moment like that that you have gone through and how you overcame it?Janice Greenley (09:13)
Absolutely.Sure, absolutely.
I have two examples that I think will be relevant to your listeners. The first one is on this deal.
We were supposed to take a supplemental loan to have the right LTV and also increase our returns. But once we were really in the thick of it, there was some retrade that happened due to what we found during due diligence. So that changed the numbers enough where it threw off our LTV, so the initial lender didn’t lie.
like our supplemental loan, and so it just created this kind of trickle-down effect. And so we had to figure out, all right, what are we gonna do? Are we gonna raise more capital? Are we gonna go back and renegotiate? But we had to figure that out because you have to.
You you just make it work. Now it wasn’t large enough where it made it a deal not worth keeping, but we did have to figure out, all right, how does this affect our numbers? How does this affect our investor returns? How does this affect our long-term goal? And so we really had to re-underwrite the entire property
and ⁓ restructure the way that we brought the capital to the table. But it happens. So we did, it worked.
Our numbers are still good and we should be, ⁓ without giving too much information, dividends should be coming soon. it’s good. And then the second deal is we were involved in a storage property. It was a really good deal, good market. ⁓ There were some issues with the seller.
Let’s just say once it went under contract, they weren’t fighting to keep it occupied. Then it became unstable. Then the bank wasn’t happy. Then that changed lending terms. So all of these things kind of snowballed ⁓ and we ended up backing out of the deal because it was no longer a viable deal with the new lending terms. And we really had to adjust. We had to go back to our investors that…
had already wired money and returned their funds, which was fine, but it was, it’s tough when you get that far in and you know, you’re just a couple of weeks from closing to go, hold on a minute, wait, we need to pause. ⁓ It’s a little bit humbling to call your investors back and say, hold on, this deal really isn’t happening, we’ve changed our mind. But it was in the best interest of the investors, so I’m not sad that we did it, but we certainly learned a lot from it.
Michelle Kesil (12:27)
Yeah, absolutely. Sounds like some good learning lessons to take with you. Yeah, especially when you’re doing this for a longer term vision.Janice Greenley (12:31)
Absolutely. Yeah.right. And ultimately our investors are counting on us. That’s their hard-earned money and I don’t take that lightly. We really have to take care of them.
Michelle Kesil (12:38)
Awesome.Yeah. What kind of investors are you partnering with? Is there a certain criteria that you have?
Janice Greenley (12:53)
So it’s very deal specific. ⁓We typically, when we get into a new deal, we will open it up to 506B, so sophisticated, non-accredited investors initially. And then at some point, should the need arise and maybe we need to advertise a little bit, then we’ll switch to ⁓ 506C, accredited investors. ⁓ But typically when that happens, the amount of money that is a minimum goes up because of all the extra work that it takes for accredited investors.
Michelle Kesil (13:26)
Right. And what are your marketing strategies or networking strategies to find and connect with these investors?Janice Greenley (13:35)
So I’m on LinkedIn quite a bit, ⁓ just due to my background as an IT recruiter. I have quite a few connections there and my husband does as well. So I’m on LinkedIn a lot. I network a lot in my local market. ⁓ I find that there are a lot of… ⁓other general partners such as myself that we need to passively invest in other deals also. And so it’s really good for me to have that network. ⁓ I do belong to a couple of real estate groups as well. So I’m really, I’m all over the place. I’m doing what I can to yes, raise capital, but honestly raise awareness. I wasn’t aware of this. ⁓
capability five years ago. I had no idea that I could be a passive investor in real estate and start building up my wealth and getting mailbox money now. And so my goal is to share that with as many folks as I can because I think ⁓ it’s a shame that more people don’t diversify their portfolio, not rely solely on the stock market or on their 401k for their financial well-being at retirement.
experiment.
Michelle Kesil (14:51)
Yeah, absolutely. That’s important advice.What are you most focusing on solving or scaling to next in your business?
Janice Greenley (15:41)
So right now, my husband and I are searching for additional properties to invest in. ⁓ Of course, we have partners that we’re all kind of looking. We are all out there talking to brokers, for properties, maybe even off market. So we’re looking for two different things personally. We are looking for something smaller ⁓ so that we can have something local and maybe even self-manage a little bit. I think we’ll have a better appreciation.for property managers if we have to go through that pain a little bit. Plus we would like some legacy properties that we can put in a trust for our children. And then long term, ⁓ we would also like some additional larger properties that we syndicate with partners so that we can have. ⁓
passive investors opportunity to grow their wealth as well. And those are typically, we normally look for 150-ish units from a size perspective.
and we look in the North Texas area. There are a few areas that we really like outside of North Texas, but ⁓ we’re very selective. We’re looking for markets, not just where there’s growth. We’re not looking for explosive growth areas. We’re looking for steady, comfortable.
kind of boring areas where there’s just there’s not a whole lot of up and down. No investors like the roller coaster. They don’t like it in the 401k and they don’t want it in their real estate as well. So we look for areas that are just nice steady employment growth, population growth, low crime. ⁓ And so we’ve got a few few markets that we keep an eye on.
Michelle Kesil (17:28)
Yeah, amazing. That’s good to have your specific target and strategy.And are there any goals that you have for the direction where you want your business to go?
Janice Greenley (17:41)
Absolutely. So I would say initially we really want to scale up and ⁓purchase probably two or three properties a year for the next several years. We really want to go full cycle. So meaning, you know, purchase, hold and then sell at the back end. ⁓ And then eventually the goal is to just be a passive investor and have enough income from those passive investments that ⁓ we no longer have to be as hands on as we are now. But that’s really probably about five years.
or so down the road.
Michelle Kesil (18:18)
And yeah, absolutely, that’s exciting to get to that point.Janice Greenley (18:23)
I’m ready. Let’s go.Michelle Kesil (18:24)
Yeah. What are some of the things that you have learned during your process of starting to invest that you didn’t know until you got started?Janice Greenley (18:37)
So ⁓ the first thing is invest passively. Honestly, start as soon as you can. Learn ⁓ that there are alternatives. I wish I would have known that years ago. ⁓ Also, it’s a lot more work to be a general partner than most people think it is. It takes a lot to run a $10 million business.And when you think of it, we really are buying a business. We aren’t just buying real estate. It’s the business behind it that we’re running. And that takes a lot of folks. So find really good partners. I’m so glad that we have great people that have ended up in our lives. But I have watched others that weren’t so lucky. And so that was a…
Even though I didn’t have to learn the hard way, it was still something I learned by watching others. You have to have great partners. You have to have people that have the same morals, ethics, vision, approach as you do. Or there’s either conflict or ⁓ maybe failed properties. And nobody wants to see that. I hate to see investors lose their money.
Michelle Kesil (19:54)
Yeah, absolutely. That’s really an important lesson and some key things to look out for. Yeah. So before we wrap up here, if someone wants to reach out, connect, learn more, stay in contact with you, where can people find you and connect with you?Janice Greenley (20:16)
So two places, they can head over to my website and there’s a form on there they can fill out and request a meeting with me. Happy to hop on a Zoom. And that is ⁓ greenrootcapital.com.or they can find me on LinkedIn and I am just under Janice Greenley. So, linkedin forward slash Janice Greenley. It’s easy to find me there. I’ve got a white suit jacket on, so should be able to recognize my profile there.
Michelle Kesil (20:47)
Perfect. Well, I really appreciate your time, your story, and your perspective. Thank you so much for being here.Janice Greenley (20:55)
Thank you, Michelle. I really do appreciate you having me on.Michelle Kesil (20:57)
Yeah, of course. And for the listeners tuning into the show, if you got value from this, make sure that you’ve subscribed. We have more conversations with operators just like Janice, who are building real businesses. And we’ll see you all on our next episode.
