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Show Summary
In this conversation, Irwin Boris shares his extensive experience in real estate investment, emphasizing a conservative approach focused on cash flow rather than speculative gains. He discusses the importance of understanding market dynamics, building strong relationships with investors, and maintaining transparency in financial reporting. Irwin advocates for a ‘boring’ investment strategy that prioritizes stability and long-term growth over high-risk, high-reward ventures. He also highlights current market opportunities and the significance of adapting to changing economic conditions.
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Investor Fuel Show Transcript:
Irwin Boris (00:00)
Great, thanks for having me on the show, Quentin. Yes, know, boring is better. You know, having been in this business a very long time, over 30 years, having been, you know, first starting, you know, my background as a CPA, looking at the numbers and then being, and working for owners and lenders and helping people capitalize deals and working on the asset management. Some people like the adrenaline of getting the deal done.⁓ I like the adrenaline of knowing that the cash flow comes in consistently and I keep the properties busy and full and that’s why we are boring comes better.
Quentin Edmonds (02:08)
Hello everyone, welcome to the Real Estate Pros podcast. I am your host Q Edmonds. I’m excited to be here today. Not sure where you are in this part of world when you’re watching this, but me and Mr. Irwin, we’re in similar places demographically. So we’re experiencing some snow, where we are a little snowstorm. He was able to get out, I’m still snowing, but we’re here. We’re here to give you an incredible show, incredible information.And that’s why I’m excited to have this gentleman here today. And listen, a tagline that he has, he says, boring is better. I’m gonna let him explain what that means, but I wanna introduce you all to Mr. Irwin Boris. Mr. Irwin, how you doing today,
Irwin Boris (02:50)
Great, thanks for having me on the show, Quentin. Yes, know, boring is better. You know, having been in this business a very long time, over 30 years, having been, you know, first starting, you know, my background as a CPA, looking at the numbers and then being, and working for owners and lenders and helping people capitalize deals and working on the asset management. Some people like the adrenaline of getting the deal done.⁓ I like the adrenaline of knowing that the cash flow comes in consistently and I keep the properties busy and full and that’s why we are boring comes better.
We’re not chasing multiples through crazy value add strategies that require you to go with negative leverage and no cash flow and pray that everything comes out and having been in office and medical and student housing and multifamily and industrial.
You know, we do find that borrowing is better. It’s better to know that the properties don’t, they have longer term leases. You have largely triple net or modified gross leases where you don’t have any exposure to the operating expenses. And you sleep better at night without having, you know, 80 or 90 % financing with mezzanine and all sorts of stuff in there. just have a more conservative 60 or 65 % loan. So you know that the property can still play its cashflow, assuming you lose a couple of tenants.
Quentin Edmonds (04:12)
Yeah, I love it. I love it. So right now, are you still an active CPA or have you moved on from that and and how does it incorporate with what you do with real estate?Irwin Boris (04:21)
Well, I moved on from that a long time ago. ⁓ It gave me a good insight into looking at financial statements and to this day, it helps me ask the right questions. But ⁓ I was afforded the ability to understand, to actually be a property manager for a large owner operator when I left public accounting. So I could really see what goes into those numbers that we all look at in a financial statement. You say, what do you mean payroll costs so much? How come repair and maintenance keeps going up?You really don’t understand that until you actually run a property and really look at the bills and see what some of the headaches are. ⁓ So no, I gave that up a long time ago, but it is something that I continue to call on when I review financial statements. reviewing a financial statement goes hand in hand with physically walking the property and seeing how it operates and looking at the equipment that’s there.
Quentin Edmonds (06:03)
So I love it. CPA, property management. It seemed like these things directly correlate to where you are now. So tell me a little bit about what your main focus is now.Irwin Boris (06:13)
Sure. My main focus now is cash flow streams. And so we’ve exited pretty much all of our multifamily. We have a little bit of office exposure, a little bit of hotel, but it’s largely shallow bay industrial and traditional industrial with some manufacturing and research and development properties. And these we’ve owned for 15 plus years, some of them. We’ve been in this sector.And before it became sexy with people like BlackRock and Starwood and others and everybody chasing it when they couldn’t do an apartment deal, syndicators that changed asset classes. It’s always been pretty full. We’ve never had a problem. so not being exposed to the operating expenses really gives you stability in knowing what your net operating income is as an owner and as an investor.
Quentin Edmonds (07:13)
Yeah. So listen, I love it. Thank you so much. Thank you for sharing where you are now, kind of giving us a little bit of an origin story of how you got to where you are. I want to take it even further back. So I have a saying where I say destiny has no wasted moments, meaning no matter where we go through in life, there are things to help us be kind of who we are today. And so I would love to know, when did it click for you that you were good with numbers? I put down organizational skills. Like, when did it click that you wasgood with processing organization, like throughout your life, when did your mind click to say, hey, this is what I want to do. This is how I can do it. Like, is there anything from your childhood that you can point to? Like, when did it all kind of just make sense to you?
Irwin Boris (07:57)
Well, I’ve always liked investments that were tangible. So your real estate is tangible. It’s not like I’m buying a stock. It’s not like it’s a binary, you know, a derivative or something like that. I always like things I could touch. And I always like to take things apart to see how they work. They didn’t always get them back together. Or if I did, I had leftover parts, but I like to understand how things work and real estate by walking the property and seeing what eachperson on site, whether it’s an apartment building or the engineers in the office building and seeing what they do gives you a better understanding how the building’s run. now that I work on helping people make investments, it’s walking around with the financial statements and seeing what goes on in the building so you can tie the two together. And one of my early jobs when I left public accounting, I worked as a banker for a savings bank and
You know, I was always good at developing personal relationships with the borrowers and brokers. And so even though my job was an originator, was a loan officer, they thought that the best use of my time was more in the business development side. And so I could always touch a deal and sort of smell that made sense. I’ll admit that I wasn’t always the best at putting the numbers in the boxes the way, you know, a bank wanted them. So they gave me help to do that.
And over time, even today, I like talking to people. It’s about relationships and how you get deals done. you may not be the buyer with the highest price, but based on your execution and your relationships and your reputation, sometimes you end up with the deals and sometimes the deals come back to you first. Oh, we should give you the deal even though you were 10 % lower because we know you’re close.
And even today when I work with investors, I like to do the investor relations because when you call me with a question as an investor, you don’t want to say, ⁓ here, let me check and get back to you. You want to know that it’s somebody who’s involved in the deal that knows firsthand and can explain to you real time. And so I find that by the way my team is set up here.
everybody is involved with the deal. Asset management, property management, as well as ownership and other principles and the origination side, we’re all involved with the deal. So we all have our input because I’ve seen so many deals go sideways after the deal is closed and it’s handed off to asset management. They have a different vision. And so the deal takes on a new life and investors say, what’s going on?
we invested in this deal, this was the business plan. You go in a different direction. Why? And so I find it’s better for continuity. It’s being boring. It’s It’s better for investor relations to have them understand. And, know, we’ve had investors that say, hey, you know, we’re going to be in the neighborhood. We’d like to come meet you. I’m like, sure, come on in. So we’re very, you know, open book, full disclosure.
And I’ve even had investors question why, you know, our monthly financial statements are six megabytes. They’re like, what is this? said, I’ve never seen something like this. I said, well, you know, it’s being an accountant. It’s a financial reporting package. You get an income statement, you get a balance sheet, you get a general ledger, you get accounts, see if you’re able to accounts payable. get a rent, well, you get companies with the bank statements. That’s what it is. Yeah. And so it makes a lot. You know, people get really comfortable. You know, I look at them.
And I say to them, the only thing you really need to look at is the executive summary. Maybe it’s on the first page. It could be a paragraph in the email. We might tell you that we’re 100 % occupied. There’s nobody expiring for three years. That’s all you have to worry about. ⁓ And even now, it’s like I spoiled a lot of investors because a lot of times I’m able to get the quarterly distributions out before the end of the quarter. So the few times that we get busy or
There’s banking holidays like this year, way Christmas and New Year’s fell midweek and people taking vacations. Some of the distributions rolled off until the first week of January. People are like, what happened? What happened? Tell me the deal’s okay, right? And I’m like, yeah, I told you that. Sometimes they would not happen until the first week of the next quarter.
Quentin Edmonds (12:29)
I love it, man. I love the relationship that you have with your investors. And I’m going come back to that. I want to ask you this, though. What is the next real goal of your business? What are you looking to solve at Scale Next?Irwin Boris (13:15)
Well, we see a lot of interesting deals where we are on the cycle that either owners are aging out and the next generation really doesn’t want the real estate. We’re seeing a lot of sellers that don’t want to be involved in the property management anymore. And so they’re selling. ⁓ We’re seeing owners that may occupy part of the real estate for their own business that they’re selling and they don’t want to be the landlord even after they sell.So there are a lot of opportunities out there, ⁓ larger deals, you know, as well as smaller deals. ⁓ So we’re seeing a lot of interesting opportunities where we are on the cycle. And so for us right now, it’s trying to develop additional investor relations with people who want steady cashflow, don’t want the wild swings and the hype of, know, evaluating multifamily that doesn’t work. And to be honest, I look at some of these multifamily deals, we love apartments, but
when you look at how many times some of these buildings have traded in the last 10 to 12 years, and I have a huge cloud of offering memorandums, so I could typically find the building by its address because they always change the name. And how many times can you tell an investor you’re going to renovate kitchens and bathrooms and move the rents $300? How many times can you rip out a floor and a granite countertop and put your appliances in? It’s kind of comical. And then when I look at how
expenses are outpacing wages, what kind of turnover in an apartment building do you need to have to really get that and how does that affect your returns? So it’s an interesting part of the cycle and especially with you know our president with looking for on-shoring and the growth of e-commerce and and all this AI stuff. So we see a lot of interesting opportunities where we think that if we could buy buildings that have
you know, existing power of 15 megawatts or more, which may not be enough for a true data center, but they’re more than enough for, you know, what they call enterprise or cloud service. So if the existing manufacturing tenant went out and I have that power feed, you know, sometimes someone down the road that’s building a data center might pay me to give up that feed, which case it becomes a regular warehouse and not manufacturing, and it might be worth more than I paid for the building.
Yeah. So I like to have multiple options on my exit. So right now, you know, power is a concern. It’s not my reason for buying the building, but it’s sort of like, you know, it helps my downside if I go to retenants down the road. So we’re looking at things a little bit differently. And I’ve also learned over the years of doing shallow bay and industrial that unlike multifamily where you might focus.
largely on comparable rents, ⁓ or sales per unit, or maybe operating expenses per unit. Here, we’re really doing deep dives on the tenants and their business and their staff, their employees. And that really gives us a good sense of how sticky they’re going to be. What’s their investment in the property? How long is the average tenure? How long does the average employees commute? Are they trying to hire?
You know, and you look at that and what’s going on with competitors of theirs or other businesses looking to hire. And that really gives you a good feel for the other saying it’s easier for them over, you know, 10 years to absorb, you know, a dollar 50 or two dollars a square foot in rent than it is to move 15 or 20 miles and have to replace a third of their staff because people aren’t going to commute the extra distance. So it’s an interesting change in how
most people look at, you know, comparables. And I find that, you know, it’s good for us. And I also, you know, seeing that I like to tinker, it gives me a little bit of an insight into a lot of businesses and how they operate and exactly what they do.
Quentin Edmonds (18:05)
I love it. So you talked about, you made this statement, spoiling your investors, right? And so I want to talk a little bit about relationships and relationship building. How do you value building relationships in business? Has this served you well? Like, what is your take on building relationships within business?Irwin Boris (18:25)
Well, think relationships are key. know, working with investors, I’m not trying to sell them anything. I’m just trying to explain to them what we do, understand, you know, pain points or disappointments they might have had in other investments of theirs and other asset classes, trying to help them solve for some future need or some cash flow ⁓ growth over time and really just, you know, keep staying in contact with them. I find that, you know, building a relationship is sort of like dating.You you got to see if you like the person. you like what they’re saying? Do you want to, you know, have a drink with them? Do you want to have dinner with them? You eventually, you know, if they have an interest, they will call me and they will say, you know, I followed you. I’ve seen all the deals that you close. I’m on your mailing list. I’ve seen I’ve looked at some how they performed. I’m ready. I find that those are the best investors rather than, know, you see these.
Owners that are all over social media that come up in your whether it’s you know, the same ones are on facebook They’re on instagram. They’re on on on ⁓ tiktok linkedin It’s like my god It’s almost like they’re trying to subliminally get into your brain that you almost want to call them up and give them your money And yeah, there is a psychology to marketing Yeah, and there’s also a dark side of the psychology to marketing from what i’ve studied and It’s like I’d rather not
be that guy that sort of used, you know, under, you know, influence or trickery or psychological mastery or whatever you want to call it, be the magician and get you to invest with me. I want you to really want to invest with me.
Quentin Edmonds (20:10)
Yeah, I absolutely love it. I hear you and I love how you said building relationships is like dating. My wife and I, say, you know, dating is gathering data. So you’re absolutely right. It’s like I am dating the people that I’m going to be in partnership with because I need to gather as much data as possible so that I can make sure that this partnership is exactly what I want it to be. And so, Mr. Irwin, thank you, man. This has been great. If someone wanted to reach out to you, connect with you, collaborate, learn more about what you’re doing,How can they get in contact with you,
Irwin Boris (20:40)
I’m all over social media and I’m highly searchable. If you put my name into the search bar, Google, you’ll find me and the firms that I’m affiliated with. You can go to LinkedIn, my calendar is there, my cell phone is there. I’m not someone that has to hide from investors or hide from building relationships. So if you just want to book a half hour and talk and explore a little bit, by all means, the calendar’s there.If there’s something you want to use me as a sounding board, know, by all means book an appointment. I’ll take a look at it ⁓ There are a lot of interesting opportunities that you know, and sometimes you know If you have something that you’re stuck in that I maybe I can give you some advice You know if I think it’s really bad. I’ll tell you I wouldn’t throw good money after bad Which you know everybody thinks well, it’ll get better. I’ll get better. I’ll put more money in it That doesn’t always happen. I’ve been in that situation myself and sometimes you have to know when you know
put your big boy pants on and, you know, and take your losses. It’s, tough for anybody. ⁓ And, you know, when I invest, it’s, it’s my personal money as well as my partners. And I don’t like to lose money. It’s okay if I don’t make any money and I come at whole and I got eight or 10 % the year for, you know, five or seven or whatever years it is. And I got the depreciation. That would be a bad investment. there was no appreciation, I just got cashflow and I got out even. And I’m okay with that if it happens. ⁓ And so.
It’s about understanding what you’re trying to achieve and knowing that there are very few rocket ships.
Quentin Edmonds (22:15)
Yeah, what I love him is to everyone. I listen man. I want to say first. Thank you for your time. But I’m sure of course time is valuable. You don’t went out in the snow to make this happen. So definitely thank you for your time. Thank you for your story. I appreciate that and definitely thank you for your perspective the way you think and bringing that mindset to this platform. Thank you so much for being here today. I appreciate it. Absolutely. So listen, y’all heard Mr. Irwin. You got the nuggets. He gave you nuggets after nuggets. So you got you got that.Irwin Boris (22:36)
My pleasure, thanks for having me, Q.Quentin Edmonds (22:45)
Look in the show notes, check him out. But definitely make sure you are subscribed here, because I promise you we’re going to continue to bring up amazing people just like Mr. Irwin. So sir, thank you again. And to everyone else, have a fantastic day.
