Episode #14 Commercial Lending with Andy Weiss

 

Show Notes:

Episode #14 Commercial Lending with Andy Weiss                                                                                                                                               In this episode of Real Estate Investing Made Simple, Andy Weiss talks about the ins and outs of Commercial Lending.

Andy is a Commercial Real Estate Mortgage Broker at Dansker Capital Group. He works with owners and operators to find the most attractive loans for his client’s properties.  He is also the host of the podcast, Rising Titans with Andy Weiss, and enjoys highlighting the success of his peers through this medium.

 

Contact Andy Weiss:

Instagram

Linkedin

Email:

aweiss@danskergroup.com

Book recommendations:

The Real Estate Game by William J. Poorvu

Miracle Morning by Hal Elrod

Other Peoples Money by Charles Bagli


Podcast Transcription: 

Introduction  0:02  

Welcome to The Real Estate Investing Made Simple podcast, the show empowering and educating people on how they can grow, manage, and protect their wealth through real estate investing. Now, here’s your host, Bailey Kramer

 

Bailey Kramer  0:23  

Hello and welcome back to the Real Estate Investing Made Simple podcast. The goal of this show is to break down complex real estate investing strategies that you can use to grow, manage, and protect your wealth. I’m your host Bailey Kramer, and today we are joined by our very special guest Andy Weiss to talk with us about commercial London. Andy is a commercial real estate mortgage broker at Dansker Capital Group. He works with owners and operators to find the most attractive loans for his client’s properties. He is the host of the podcast Rising Titans with Andy Weiss and enjoys highlighting the success of his peers through this medium. Welcome to the show, Andy

 

Andy Weiss  1:00  

Wow, Bailey, thank you for having me. I appreciate it, love, love the podcast. You know, respect from a fellow podcast host?  Thank you for having me on. I’m pumped.

 

Bailey Kramer  1:12  

Yeah, absolutely. It’s awesome having you on as well. So why don’t you go ahead and start by telling the listeners a little bit more about your background and how you got started in the real estate industry?

 

Andy Weiss  1:22  

Sure, sure. Although I think I think it’d be cool to this point out, you know, how to be connected online through Absolutely. through LinkedIn, like you reached out to me, I’m an AEPI alum, you’re an AEPI undergrad, like, love that. Love the hustle and love the fraternal relations always. So thank you for that and you made this happen. That’s awesome. But just a little bit about me. I actually started my career. More on the side of the financial services, actually focusing on residential mortgage-backed securities used to do valuation and transaction services PricewaterhouseCoopers PwC was the rebrand as I started in 2012. So did that for about five years. But called two, three years in, I was like, not sure if I really want to pursue this as a long term career and stay in the accounting firm world. Not a bad life, but a pretty good life, but definitely wanted to experience something else. And it was on like, doing the CPA and CFA, they’re very technical. And after a few years, I kind of started stumbling upon real estate through my network, just being involved in different communities here in New York City, and eventually decided to take the plunge into mortgage brokerage.

 

Bailey Kramer  2:46  

Awesome, awesome. And so for those listeners who aren’t sure, can you explain kind of what a commercial mortgage broker does?

 

Andy Weiss  2:54  

Sure, sure. So that’s a great question because before I was a commercial mortgage broker, I had no idea Be able to commercial mortgage broker did. And so, you know, much like any other broker, we’re intermediaries. So we exist in between a bank and a borrower. Generally the borrower, for us really always the borrower is our client. We go out to the marketplace to any variety of lenders on behalf of them to help finance their deal to source a mortgage for either acquisition, or something I think to note, specifically in commercial real estate, which is much different than the residential space is refinances because refinancings aren’t just something that commercial real estate operators, you know, would enjoy doing, per se or like oh, rates are down with refinances. It’s a necessity. Most commercial real estate loans are five or seven-year term loans, sometimes 10 years but, but I’d say in the five to 10-year range is the most common term and so once Come out, unless you want to fork over a couple of mils, however, many million dollars you’re taking out on your mortgage, you got to find a new lender. So that’s where I commend.

 

Bailey Kramer  4:10  

Awesome, awesome. So after an investor either, you know, is getting ready to acquire property or refinances. They go to someone like you to find them a new loan. Who do you go to? Where do you go shopping for those loans?

 

Andy Weiss  4:25  

Sure. So every broker calls it has their relationships. And there’s a wide variety of lending options available in the marketplace, depending on what you’re investing in. Our team we have, as our primary focuses, call it New York City, urban real estate specifically multifamily, and that that kind of spreads out to surrounding areas. We do a lot of work in Boston, Philadelphia, Connecticut, New Jersey, but a lot of the lenders that we work With our smaller local savings banks, regional savings banks, credit unions, who, you know, do work, lend on a six-unit walk-up in New York City, which, you know, you walk by 16 a building, it doesn’t faze you, but that building’s worth a couple million dollars on the streets of Manhattan. It’s worth millions and a half 2 million bucks. And in parts of Brooklyn, even more, I mean, certain parts of Brooklyn are just as nice as Manhattan.

 

And, you know, that’s a lot of the work we do, but right now I’m, I’m working on financing down in Charlotte, you know, multifamily financing. And that’s, that’s the credit union service organization. They’re an aggregator of credit unions. So really, the capital source is varied. And there’s field-specific and it’s the job of a broker really, to help advise a client on what’s the best possible financing solution for them. And you know, one thing that how

 

The right is that, especially when I start on the business too, you know, a lot of people think they think the rate is like the critical issue. And the race is not necessarily always a critical issue, sometimes are very sensitive, but it depends sometimes people want flexibility on prepayment because commercial loans are generally not pre-payable at anytime, compared to a residential loan, which most people are accustomed to, you could generally prepay that at any time. Sometimes people want more leverage. Sometimes people want recourse or non recourse right like it or they’re willing to give up one one thing or the other. So I think there’s there’s a little bit more nuanced when it comes to commercial real estate loans. And beyond that, just underwriting a deal, understanding the deal, and working with lenders to get on board with the deal. Those are all things that a commercial mortgage broker is going to work with. Right, right.

 

Bailey Kramer  6:55  

So let’s go into some of the variables that Can that can take place in a loan? So like you said, there’s recourse for versus non recourse. Can you explain kind of what that is?

 

Andy Weiss  7:08  

Sure. Yeah. So I mean, basically, very simply, you know, I don’t want to overcomplicate things here, I’m also not a lawyer. So I don’t get too technical myself. But it really comes down to just like a personal guarantee, you know, and with certain properties in certain markets, recourse is a must, you know, if you’re going to finance a six unit building, go back to that classic example here in New York City. You know, there there are plenty of there’s a lot of competition for that. There. There are a lot of local banks that their business is lending on real estate, you know, they borrow from their their depositors. Bank works and they’re, they’re lending out to, to real estate owners, right. Like that’s, that’s literally how they make money. And it’s a very competitive landscape. And New York real estate is viewed as Very solid currency call it right and so not only is it a solid currency, but like I said, there’s a lot of competition. And so there’s a what that helps produce is a marketplace where, you know, most real estate operators who are buying a six family building that that is income producing, meaning all of its lease stuff, and you’re getting your loan sized or called your loan size based on the current cash flows of the building, they’re going to get a non recourse loan. That should be an issue meaning they won’t have to personally guarantee the loan. Outside of there’s something called standard carve outs or bad boy carve outs. If you do something fraudulent or negligent, then a bank and go after you but otherwise like if, you know if for some reason, you were to default on the mortgage, you’re not personally liable. That’s I guess that’s more of like a what if scenario But also practically speaking, it’s not going to show up on your, your global real estate owned. If you’re if you’re submitting it to a bank for a new loan, and they see that you have recourse on all your loans, well, they’re competing with other lenders now, potentially, if you default on everything for what’s left of your assets when they need to come claim it right. So it all kind of factors in there. It’s an optics thing, just as much as it is a potential liability, I think.

 

Bailey Kramer  9:30  

Right? So basically non recourse if things go bad, you’re not liable. That’s just the general gist. And if you have recourse things go bad. Your other assets could be in jeopardy.

 

Andy Weiss  9:43  

Yeah, I mean, if the bank and go after you, you’re personally on the hook for, you know, whatever the bank is owed. Now, it’s not like you’re gonna be on the hook for the entire loan balance most likely because, you know, odds are banks can be able to sell your asset right. Like if you have a 50% loan to value. I would I would hope that you’re buying something that’s gonna sell for more than 50%. But But again, in distress case, you know, like, all bets are off the table. Who knows what happened the asset and you look right now at what’s going on with real estate, there are plenty of hotels and retail assets and office assets that are that are underwater. And so it that’s where it comes into play, like the what if scenario, is that happening? So whoever went on that with recourse, I’m sure they’re somewhat happier, but at the same time, you know it, it becomes a negotiation probably because there’s so many assets that are defunct at this point. And lenders are not necessarily looking to just push their borrowers out of their assets.

 

Bailey Kramer  10:49  

Like you said, hotels, offices, a lot of people kind of in trouble. So definitely, there’s no such thing as a typical loan per se, but multifamily loans are all A lot different than residential. So can you kind of touch on the difference between the two? And what makes them so different?

 

Andy Weiss  11:07  

Gotcha, gotcha. Yeah. And I mean, I think you mentioned that a lot of people listen to your podcast, they’re looking to get into apartment syndication, which, you know, to be honest, is, is great, because it’s, it’s definitely the greatest form of wealth building in America. So respect to your respect as everyone listening. I’d say the significant difference, that really comes down to the fact that residential loans are underwritten, to the borrower, your underwriting the borrower, and it’s a very basic underwriting, in that there are certain quality metrics that needs to be met. There’s a minimum FICO score and a debt to income ratio. They’re going to check those boxes and they’re going to say, all right, you’re pre approved, right? There’s no such thing as being pre approved in commercial lending. It’s an asset specific underwriting generally, they’re going to underwrite the sponsor a lot more when it comes to transitional assets, meaning, you know, maybe a building that has some vacancies and needs to lease up, you know, they’re going to want to understand the sponsor a lot more. And and don’t get me wrong. They’re going to underwrite the sponsor, but the primary the primary element in underwriting a, an occupied multifamily garden style complex, let’s say, there’s really the cash flows, the rent roll and the expenses as opposed to the borrower. You know, there’s also nuance I would say, when it comes down to the actual market place for those loans and how they’re funded in the residential space. You generally have Fannie Mae, Freddie Mac, and FHA loans. So those are, those are very homogenous product, very easy to finance products. There is there are agency loans, like those same agencies have a role in the multifamily market as well. But the way that they are securitized meaning the way that they’re kind of taken off of the lenders balance sheet and sold off to whoever is buying them insurance companies, endowments, whatever, that that’s different, but but the government plays a role in both in helping to guarantee either implicitly or explicitly the principal payments to whoever’s buying them. But when it comes down to just an origination standpoint, and underwriting the deal, a residential loan is a much more clear cut. You know, what, like, easy peasy, like, let’s, let’s move commercial, it’s gonna it’s going to be a little bit more of a process, definitely standardized in the agency space. Like I said, it really depends what market you’re in, and what the product type is. That’s going to determine the actual length They are the source of capital on the commercial side.

 

Bailey Kramer  14:04  

Right right. So if you can give us kind of a behind the scenes look what actually happens when someone finds a deal and they talk to someone like you and what actually takes place

 

Andy Weiss  14:18  

I don’t know if I’m gonna get devote all my secrets now I get I get Well listen, you know at the end of the day I don’t proclaim to know everything. But But I do I do. I would say that I know the markets that I play in I know them pretty well and myself and everyone else on my team. I don’t know if I mentioned before, but we’re, we’re dancer Capital Group. We’re a we’re eight people. small, small and growing team. We left Marcus and Millichap earlier this year on very good terms and kind of spawned our own mortgage brokerage shop. So not all of us are actively talking to lenders day in day out quoting deals, hearing what’s what’s going on in the market and If it’s something in my neighborhood, I’ll tell I could tell someone pretty much off the bat, you know, oh, this is what you’re looking at. Okay, this this one’s a it’s a five year deal. It’s three and a half percent. You know, here’s, here’s where I think it’s gonna, it’s gonna figure for the proceeds the actual dollar amount. It it really it really, there’s there’s nuance, I guess, like I said, everything’s case specific on market asset type. But if it’s something that I don’t know, necessarily where like, I’m like, here’s where I think it’s gonna price. I’ll say, let me let me make a call. I’ll call up a lender, I’ll say, Hey, you know, would you do something like this?

 

You know, for us, we we like to be very pinpoint and targeted. We’re not the type of brokers who are going to blast 50 lenders.

 

I say especially related to you know, more your target market, with the garden style complex is really when it comes to agency lenders, it’s really about the relationship with the lender and that I shouldn’t say, just emotion that like, it’s always about the relationship with the lender and and brokers sometimes. I guess well, I would, I’d say, really all the time, or the majority of time you’re paying a broker in part for their relationships, right? Like, they have an ability, not only have they figured out and know who to call, but the guy who they’re going to call is going to answer their phone call right away. Right? Like that’s, that’s part of the advantage. And, you know, when they have a problem, which inevitably arise in commercial real estate loans, and any commercial transaction as a problem, you want someone who’s just been able to get on the phone and resolve this for you. And so, going back, I guess, at the inception, when it’s just get the feedback point. Really, it comes down just having conversation like, Hey, here’s where I think it’s going to be. Is this in line with what you think and what Would this work really for your underwriting? Right? Because that’s, that’s what your that’s what you as a borrower are trying to figure out, it’s like, I’m going to buy this, how much money am I going to make? And I need to understand how much I’m going to be getting from from a lender and how much I’m gonna be paying for it. Especially because that’s the largest component of your capital set.

 

Bailey Kramer  17:20  

And and Are you the one actually doing the underwriting? Or is the lender doing the underwriting?

 

Andy Weiss  17:25  

Good, good question. So, so we have analysts on our team who will put together a package and and underwrite the deal. Depending on the operator and their and their level experience, you know, we’ll we’ll leverage what they’ve already put together or we’ll we’ll do our own. I would I would also say multifamily underwriting isn’t it’s not it’s not rocket science. You know, so if there are like, there are a few expenses, there’s income. You know, it’s part of the beauty of it is it simplicity of it. Right? It’s, it’s, it’s simple. But that being said, understanding how lenders will underwrite, you know, that’s, that’s a value. And I would say a lot of lender is going to fully do their own underwriting at a certain point, right? Like, they’re not gonna be like, Oh, yeah, I’ll just take this as given, they’re going to put in their own assumption set. And every lender does underwrite a little differently, both in terms of the income and expense side, but also around, you know, how they’re going to stress the rate. Or maybe they’re going to stress the noi see how, see how the cash flow is going to hold up. You know, different lenders have different debt service requirements. And maybe sometimes they even stress that meaning the amount of cash flow needed to support the loan, the ratio of the noi to the debt service payments, your principal and interest. But what I’d say you know, part of what I have Do a mind when I’m talking to a client, or potential client is I’m listening to them, they’re telling me about the deal. They’ll send me a rent roll and some expenses. And I’m gonna size it up in my head or in Excel, whatever I need to do, but I’m going to get an idea of where it could price and I’m going to tell them part of my job is really just setting expectations. I’m gonna say, Hey, listen, you know, here’s where I think your deal figures and it doesn’t come into play so much in the garden style always because the cap rate environment, like the rate of returns are higher. And so you’re generally gonna always support 75% loan to value. But in New York, in a city like New York, where cap rates have traditionally, at least in recent history been fairly low with with a low interest rate environment, you’re not really figuring for 75%, which is I’m using 75%. As a general cap of loan to value. Sometimes it can be 80%. But that being the maximum proceeds allowed by Value meaning, even if even if there’s more cash to support it, the lenders are basically saying I want, I want sponsor equity in the deal. I want I want 20 25% of the deal. But in New York, you’re generally constricted by by cash flow with that formula I mentioned before around debt service coverage. And so part of my job is really understanding very well, what’s the income of the property? And how much do I realistically think they’re going to receive from a bank, and that that helps save time on everyone’s end, right? Like, my end there, and lenders and so I would say that’s, that’s, that’s kind of my job is to really help vet out a deal not only for myself, but also for a borrower. And, you know, part of what we as brokers do is synthesize that information that we’re constantly hearing on one side and bring it to to the The other side, you know, one thing I would say, in relation more to like the garden style stuff, and really any real estate asset, but if you’re buying something that’s maybe underperforming, or call it not cash flowing to the extent you’d want it to, like, let’s say you’re going to do a rehab, and you’re buying a complex for $5 million, you’re gonna put in 500,000 hours of work. You know, there are bridge loans for those types of things and just helping walk a borrower through, you know, what’s your cash flow? Now? What’s it going to be? Does it figure for a takeout loan, call it right, you’re gonna get up a bridge loan from one of these agency lenders. So Fannie and Freddie don’t directly lend they, they basically, for Fannie they call them dust lenders, designated underwriting service, I believe is the term Freddie, I don’t think that’s such a formal term, but there are basically people hold licenses to distribute them. Mae and Freddie Mac right like they can underwrite on behalf of them. And one of them actually does not believe Freddie allows their underwriters to just their

 

Freddie will provide an underwriting on their own as well after their, their lender, you know, brings it to them, but Fannie just designates their, their death lender. You know, go ahead. And and then Fannie and Freddie help securitize the loan, right, like they guarantee the loan for an investor base in the capital markets. And that’s what helps drive down the cost of loans in America on the residential side on the commercial side.

 

But, you know, ultimately,

 

ultimately, those guys are going to are, there’s like a commoditized lending product in a sense, right, but they all provide a bridge platform for dealing Like this to basically say, Hey, you know, I can help you fund your, on the short term your construction costs, whatnot, fairly attractive terms. But you know, you’re gonna have to do the, the Fannie Freddie take out with me and they priced in an exit fee to make sure they’re gonna get paid.

 

Bailey Kramer  23:18  

Right. So so the bridge loan is kind of just a shorter term loan during periods where maybe your occupancy doesn’t meet the standards of Freddie Mae, Freddie Mac. And you know, when you once you do or when that loans up, you have to get a new loan after a few years. Is that is that right?

 

Andy Weiss  23:36  

Yeah, I mean, again, it’s not always with Fannie Mae, Freddie Mac, like, you can get bridge loans with all types of lenders, and you’re not getting the bridge loan from Fannie Mae or Freddie Mac. It’s their designated lenders. You know, they basically have this as an add on service to capture business, right like, because it is a commoditized product in a lot of ways. But like I said, going back to our Well, I said earlier, it’s very relationship based. And so having a strong relationship. So even even in that space, I think there’s a decent amount of brokered work. Because, you know, like, a lot of these guys are, you know, based in major cities. And let’s say there’s someone a small market doesn’t have as good a relationship with a guy doesn’t know a guy personally. But all of a sudden, you meet the guy like me, and he’s like, Andy, like, you know, can you work with these guys? I’m insanely busy right now I’m looking for new deals. I’m working on negotiating few contracts, like, Can you speak with, with your body, like, speak with your friend like that? That’s a lot of times what’s happening behind the scenes, right? Something at work with this guy, like, see what see what we can do here. You know, you do a lot of business with this guy. And I think a lot of times people don’t really see that dynamic or think about that dynamic. But that’s a lot of the interpersonal relations of business, and especially in a business that’s very transactional. Both like real estate. That’s what happens a lot of times. But I guess to go back to your direct question about bridge lending, exactly as a bridge loan is, is a call it a thing outside of real estate as well. It’s just a finance. It’s a short term financing interest in general term for short term financing. I would call it generally one to three years. And like you said, it’s taking you from that period of, you know, sub sub optimal occupancy to full occupancy or near or full market occupancy. Or, you know, let’s say you’re not your your rents are under market, but your units are also outdated. Building hasn’t been renovated in 15 years. You’re going to go and you’re going to spend, you’re buying the units for 20 k a door, you’re going to spend five k a door and it’s going to be worth 35 k a door, right? So, you know, these these lenders, these Fannie and Freddie lenders out there, they’re going to come in and say, Okay, well, you know, I’ll give you 85% of your total loan to cost. So you’re paying 25 k a door, whatever your your all in cost, including your construction is 6 million, whatever, I’m gonna give you 85% of that number as opposed to saying, I’m going to give you 85 80% of your purchase price. Now, they’re, they’re willing to do that, potentially, because they know that it’s going to be worth a lot more afterwards, and you’re going to be limited. Your dollars will be limited if your project doesn’t figure for 75% of the of the value of the finished product, which ultimately, any bridge lender is just underwriting said more succinctly, any bridge lenders underwriting their their dollar amount that they’re going to lend to at a maximum to whatever take out, aka refinancing options available once you’re done. And so these guys they’re always under Adding to a Fannie Freddie take out. And so they’re going to say all right, well, what does this what would this figure for based on the pro forma like the future projected cash flows? What would this loan figure for based on Fannie Mae or Freddie Mac’s lending criteria? Right, this way they can make sure that they’re not gonna have an issue getting the loan refinanced

 

Bailey Kramer  27:22  

with this with lending to theirs, it’s so there’s so many layers to it. So you’re there’s there’s a lot that we’re not even gonna be able to cover on the show. I mean, tons of tons of stuff, but you know,

 

Andy Weiss  27:33  

yeah, and if I gave away all my secrets, and no one’s gonna call me right.

 

Bailey Kramer  27:38  

How long does the process take? So if I if I find a multifamily deal 100 units, standard deal nothing Nope, nothing crazy to it. And I came to you, how long could I expect for you to get back to me with with terms to a loan?

 

Andy Weiss  27:56  

Well, with with terms to a loan, I could A day like, you know, a day, two days a week, it really depends on how readily available information is. Sometimes a lender is going to want to vet a few things before they issue a term sheet. The broker is going to want to vet it out front first. It really is deal specific, I’d say soup to nuts on a permanent financing. You know, I’d say 60 to 90 days is what I would recommend leaving yourself more towards the 90. If that’s like, you’re going to first start thinking about the financing at that point, like 60 days is more rushed. If you’re going like soup to nuts, like, you know, the initial conversation to closing. That’s probably not as realistic, doable. You know, an acquisition is definitely doable. And to be frank in New York, it’s a different marketplace than the rest of the country to the New York. There’s no diligence period, you know, your heart on your contract and you just got to close. Sometimes you get you get a You know, you have an extension option for 30 days, but there’s no financing contingencies in New York. So we’re definitely very used to pushing and getting the deal closed, because the last thing you want, and you know, I guess I’ll give a little pitch a value of a mortgage broker. And just, I’d say it’s really just value in doing business with people you trust in general. The last thing you ever want is to be at a closing table and not have your lender show up, or or be retreated at the closing table. Yeah, when you have real dollars down or you have real investors dollars down, like, that’s, that’s the worst when you have someone else’s money down, and someone screwing you over. And so I think a lot of times, a broker helps in, in driving a close both in terms of pushing throughout the process, but ultimately, you know, a broker from from a business perspective, you know, from a lender’s business perspective, a broker is isn’t great Future source of business, right? And so, you know, you may say, it’s a deterrent, right? Like, lenders, like, who this guy like, I’m gonna, I’m not gonna do another deal with him or, you know, I don’t care if I screw him over and people think like this. Obviously, I don’t, I don’t believe you do, but like there are people who think like that, and then make decisions like that. But ultimately, I think you’re less likely to want to screw over a guy who’s going to bring you however many deals over the next however many years on a recurring basis, right. So school will pitch value add for all mortgage brokers out there, shout out, shout out to everyone on the hospital.

 

Bailey Kramer  30:40  

Definitely, definitely. Before we move on to our next section of the show, is there any last piece of information? Anything else you want to say about, you know, London mortgage brokers in general?

 

Andy Weiss  30:51  

Yeah, I guess I guess the, you know, I’d say I’ve been doing this for a few years now. And I really do think that that interview mediators play a tremendous role in commercial real estate in particular, information doesn’t flow so freely. And and I think there’s a lot of value in consulting at least with with a broker, even if you have direct relationships, just understanding where the markets at, because it’s very easy to overpay or not get the best possible terms sometimes because it’s, it’s, you know, you think about just like a bait shop, right? Like, if you don’t know what something’s worth, or what the market rate is like, and someone else knows more than you do. You’re going to get taken advantage of, and so I think, especially as you’re doing your first few transactions, I would recommend reaching out to a mortgage broker. I mean, I know a good one if you want to talk but uh, no, I, I would, I would say like, find someone that you trust to work with, that you like working with. And and I think that’s really the same for all service providers and business partners in general equity providers, like, find people that you’re, you have a good time with that you you like you trust, you think they’re good people your lives, I actually maybe unconventionally think finding people that you’re more intertwined with can can be good and I don’t know better or better the right word, but I’m definitely a fan of working people work with people that you know, I just find there’s less friction in the relationship information flows more easily and people feel like they can share more with you. And ultimately, you want everyone to work with to share as much of the information that they have as possible.

 

Unknown Speaker  32:50  

For sure, for sure.

 

Bailey Kramer  32:53  

Awesome. So we’re now going to move on to our next section of the show, which is our big four where we asked all of our guests the same question. Questions. So Andy, what’s your number one habit for success.

 

Andy Weiss  33:03  

The number one habit for success. I feel like it’s ever evolving. But the past few years, I have very much gotten into the idea of like morning routine, and trying to do mostly most of the same things every morning and making them like the small wins of the morning. It’s like I grew up, never making my bed. But I have started in the last few years, like I make my bed every morning. Like, I get up, I make my bed I make my coffee. I’m Jewish, and I like to wrap to fill in. I’m not particularly overly religious, but every morning I try to wrap fill in for a few minutes. It’s a good ritual and if you’re not Jewish, you’re listening. It’s like a morning prayer ritual for Jews. Jews pray three times a day. In the morning they they use these these bands that are attached to like two little boxes. One goes on your arm, one goes on your head and You know, you pray with them on. And, you know, for me, it’s just a good reminder every day of who I am and God above and I like that. I’ve been much more diligent about reading in the morning. So I very much like to read consistently exercise, and then I’m less than less good with my like app, morning affirmations and journaling, a little more frequent those but if I could squeeze all that in in the morning for like an hour, hour and a half, whatever it is like, and that is a great way to start the day. Like, I feel so much better when I do that. Like I’m more at ease. So that’s, that’s my number one. Call it habit for success.

 

Bailey Kramer  34:47  

All right, awesome. And number two limiting beliefs, our thoughts in our heads that hold us back from realizing our potential. What is one limiting belief that you were able to crush and how did that impact your life

 

Andy Weiss  34:59  

definitely. Big fan of that, like

 

I would say, I guess not to focus on the limiting belief side but more more on than just the idea of like changing for me what I think what what started to change in my life and what helped me kind of I was at PwC for five years in like your three or so I was like are I need to leave. But it took me two years to actually leave because I didn’t have a certain confidence that I needed. And and I wasn’t, I wasn’t sure enough, but I wasn’t ready to take the jump. But ultimately, I think having the belief that you can do whatever you put your mind to. You just have to consistently do it and keep taking the risk. keep taking the gamble, keep pushing yourself. Eventually you’ll achieve and for me learning to to just be able to jump right like learning to just I heard this Steve Harvey video once my friend Ben showed it to me is like if you don’t jump, you never do enough you got a parrot if your passion is going to open, right, like everyone’s got a parachute, you don’t know if it’s gonna open until you jump. And, and I think that we’re all kind of wish that we’re all like, Oh yeah, everyone’s everyone’s nurtured in a certain way to have certain beliefs about themselves what they can achieve, and realistically, whatever you can, whatever you tell yourself you’re going to do is what you’re going to do. So when you learn to kind of remove those superfluous thoughts about, Oh, I can’t do this, and I used to say that and my back I set up a CPA like my background in accounting, it’s like very in the box, right? Like, it took a while to brainwash myself out of that, and to say, I could do a lot more like I have a friend right now she’s starting up a chocolate bar company, like she’s selling chocolate bar. She literally just started making it one day and posts on Instagram and like someone hit her up and check out, I could sell this. And and this is something I’ve actually been thinking about recently. You don’t, you don’t have to be like what’s an expert, right? Like, people will be like, Oh, I’m not an expert in that I can’t, I can’t like sell that or I can’t, I can’t make I can make this insulting. You can make and sell everyone someone’s willing to buy it. Right? And so you don’t need to be an expert in something a quote unquote, expert, you just need to be better than the guy next to you. Right? Like if you learn how to do something, and you could go to someone else and say, Hey, I can help you through this process. You know, whatever you’re going to pay whatever the market rate you think, is owed to you for that service. Like, you can go do that. Right? You don’t have to be faster than the bear. You just have to be faster than the guy you’re running.

 

Bailey Kramer  37:48  

Right? Right. Totally agree with that. I’m gonna even want to re listen to that because you hit on a lot of things that I really like to hit on to.

 

Andy Weiss  37:56  

Yeah, we’re probably reading the same things and more brainwashing. claim wise. I love it. I love it.

 

Bailey Kramer  38:02  

It’s definitely transforming your mind to think a certain way. There’s no one’s naturally. Just I can do anything. You know, you have to, you have to really train yourself to really convince yourself what’s possible.

 

Andy Weiss  38:14  

Yeah, yeah. Well, and I mentioned like affirmations before, which I’m not necessarily good and diligent with every day, but I really think a lot of these things that sound very corny, like, I think sometimes people kind of poopoo the very cliche Tony Robbins motivational speakers like, there is a method to the madness and, and I really do think like Rich Dad, Poor Dad, Robert Kiyosaki, like, Guys like that. They’re constantly drilling in and affirming the same beliefs over and over again. And once once you do, like, it’s almost like you’re branding yourself to yourself, right? And like, you think about the way that Instagram works and all marketing works. Like you keep putting out the same message over and over again. That’s what people think. Think of you. Right? Like, people don’t think of Bailey the like a nine year old kid causing trouble in the playground. And I’m not saying that you were causing trouble as a nine year old. I was but you know, but uh, but no, but I’m serious like that’s and that’s why people are able to rebrand in their lives right like, ultimately not everyone is his boat, even yourself but you’re not focused on who you are enough every day and when you tell yourself over and over again, this is who I am. This is who I am. This is who I am. You start believing, right?

 

Bailey Kramer  39:34  

Totally agree. Number three, what advice would you give to someone who’s considering investing actively or passively in real estate for their first time?

 

Andy Weiss  39:44  

Well, actively I would say also i full disclosure I have I have not invested in real estate myself yet, which is a which something I hope to change within the next year, two years. Especially with what My clients, that’s something I look forward to doing in the next few years. But I guess actively, I would say, I think it’s my investing in general, I think, prudence and, and care with any investment, understanding and knowing what your investment is, what’s the risk of loss of principle, especially if we’re going to take other people’s money is hugely important. And don’t let yourself get oversold. You know, I think I think in the market and markets in general, there’s a lot of overexuberance people, myself included right everyone base is subject to some type of behavioral bias and you know, when you hear something that’s too good to be true a lot of times it is too good to be true right like either the the asset isn’t what it’s supposed to be or the guy who’s marketing to you is blowing smoke up your up your ass like a no I’m serious, like It’s not It’s not easy to find a good deal. But that being said, Don’t throw away a good deal because you’re like, Oh, no, it’s too good to be true, you know. But but i think i think kind of tempering yourself and finding some way to force yourself to reevaluate is key. And actually, I’ll share the wisdom of Benjamin Graham, the father of value investing wrote the book, the Intelligent Investor, which is probably one of the most well respected and renowned books in the financial community. And he he basically preaches that you should create an investment contract with yourself. Like I will not sell x stock below this price or right like some type making it almost algorithmic for yourself, because, you know, sometimes you start like, you’re struggling to find a deal Maybe like Allah knows, you know, this one’s like kind of there but not exactly where I want it to be like being very clear on what your criteria are for investing and sticking within that, I think that’s probably the most difficult thing. And my guess is a lot of people have trouble with it. Because you want to do deals inherently right like that, right? Especially when for an active guy. I guess for a passive guy. My advice would just be more so like, be aware, you know, caveat emptor, you gotta you got to be cautious and, you know, real estate’s indicators there they’re out looking for capital and their job is to sell you on why their deal is good. And you know, at the end of the day, especially if they’re if they’re in contract on a deal and they’re raising capital and they need to close you know, they’re I’m not saying they’re gonna lie or cheat you per se, right like i’m not i’m not accusing real estate, investors that doing that, I think it’s more so just like understanding there are elements of human nature play in all, all aspects of business, everyone’s human and you got to protect yourself interest. And especially when you are you’re really as an LP investor, limited partner investor, you’re you’re giving up you’re giving up certain upside to your end fees to to your to the syndicator the general partner and you’re taking the same downside risk. So understanding that and being very clear on what are the returns what’s the likelihood of the returns like is this betting out the business model right like this? Is this a realistic business model? Are these rent competition me real? Call a broker in the market in the local market. Just be diligent. And same, same, same on going back to the active guys. Still inactive guy because especially if you’re buying national multi family and you’re not in that market, you know, you’re kind of like a biocide broker at that time, right? Like you’re, you’re, you may have an expertise in the market, but you may not understand that specific random walk. You know, just like, do as much homework as you can.

 

Bailey Kramer  44:20  

Awesome. And number four, what is your favorite real estate business or personal development related book?

 

Andy Weiss  44:28  

Oh, man, I’m very big on the personal development stuff. So appreciate that question. I guess, uh, all right, rattle off a couple book recommendations. But I would say the real estate game was on the first real estate books I read. Pretty, pretty phenomenal book. Great overall read. I think if you want to learn about the, the Oh a crisis like the Great Recession. Other people’s money by Charles Bosley oddly are bogged down by a phenomenal book on just the pitfalls of of market optimism and it’s always a remarkable story. I love studying personally, like I’ve read a lot of books on on the topic. And, you know, I’d say in terms of just like broad personal development, obviously thinking grow rich. It’s just like, just totally up there How to Win Friends and Influence People, those classics, but more of a modern one that I think had a tremendous and profound impact on me was never eat alone by Keith ferrazzi. He was the youngest Chief Marketing Officer for Deloitte came from a blue collar background but really ascended within the the business world very fast. And I mean, the book title kind of gives it away, but it’s really just the idea of like how to connect with People and how to build relationships. And you know, I guess just a plug overall for reading. It’s like I think, think reading goes beyond just the immediate content you remember, on a day to day basis, because your brain is a computer, right? Like a computer is made because a human conceived it. So there’s short term memory, and there’s long term memory. And so not all of these concepts that you take in our everyday like churning in the front of your mind, and in your short term memory, it’s not like you can just recall them, but they get embedded in your subconscious in many respects, I think. And they start to change the way you think and act. Not in a bad way, right. Like we’re all impressionable, but understanding, like, like I said before about branding and marketing, right, like, we are malleable. And so whatever you feed yourself every day, in terms of the information you take in is going to start impacting you. And so if you’re taking in positive information, and you beneficial things for you, you’re gonna do good things, you start consuming good content that motivates you. You’re gonna live a happy life, I think. And I think, frankly, not to go on too much of a tangent, but like, a lot of people get stuck watching the media like just like constant 24 hour news cycle today. And it gives them such a negative outlook on life like the world’s ending, like, I honestly, I don’t watch the news. I don’t really listen to the news. I don’t read much news. because realistically, it’s not relevant to me, and it doesn’t impact my life. Like I’m going to be the same either way. I’m guilty. I spend a good amount of time on Instagram. I’m pretty active on there at the end, if you want to follow but and LinkedIn but, you know, like, I’m guilty of consuming media, but I I genuinely, you know, I value consuming Instagram media because I have friends out there who are doing inspiring things. You know, they’re waking up early. They’re working out they’re starting businesses. And when I see that it just reinforces the behaviors that I want. So, you know, at the tie back to reading, like I think reading is tremendously important to success and, you know, happy to discuss those books or any other books with you and and anyone listening anytime.

 

Bailey Kramer  48:20  

Awesome, awesome. Yeah, I totally agree with you. And kind of like you said, it’s kind of what you surround yourself with. That’s who you become, that’s who you want to become ultimately, and kind of the reading kind of what you consume. In that sense. You’re reading good content. And that, you know, that motivates you that uplift you versus reading or watching something like the news, which you said, and I totally agree with you. It’s not It’s not good. It’s not good. It’s just with you kind of feeding yourself content that inspires you and uplifts you.

 

Andy Weiss  48:52  

Yeah, I mean, what? Curious on your end like what what books you know, you you’ve clearly been motivated to start a podcast. I You You’re in your mastermind networks and what books what books have you read? Like what’s what’s motivating you?

 

Bailey Kramer  49:06  

Yeah, one of the books was right here. The Miracle Morning, dude, that’s that’s how I got

 

Andy Weiss  49:11  

it’s a morning routine saver. Yeah,

 

Bailey Kramer  49:14  

I could I could tell exactly. Because you were talking about your, your, like, you said something about scribing. And working out.

 

Andy Weiss  49:21  

Yeah. basin visualization, exercise, reading. And what’s what’s the last SS? Silence. Silence and scribing are the two Yeah,

 

Bailey Kramer  49:31  

yeah. So one must read for anyone out there. Great book. It just it just starts your day off with such a positive instead of the way I look at it. Look at it is it’s the difference between waking up and saying, Oh, I’m so tired. I have to wake up now. versus this is like I’m ready for this day. I’m ready to do something positive and just uplifting your day.

 

Andy Weiss  49:55  

I it’s so true. And and I think you know It goes into another great book Seven Habits of Highly Effective People. It’s like, one of the habits is be proactive. And, you know, a lot of people, myself included, sometimes start the day off and you’re reactive, like, you know, you snooze your alarm a few times, and you’re like, gosh, crap, I got to be in my office in 30 minutes or used to have to be in my office 30 minutes. Now, I work a couple feet from my bed here. But no, I think it’s, it’s, it’s a noticeable difference when you’re starting your day off and you’re kind of taking care of yourself. First, you know, practically, like, this is me time. I’m gonna, before the day starts, four people are going to hit me up. I’m going to do what I need to do in my day to make sure I’m right and ready, I’m healthy, and I’m living a good life and take stock of my life. And, you know, I think it goes even beyond like the day to day right? Like, it’s like finding time consistently in your life to to kind of reset and recharge every week, every month, every year, you know, and I will admit I’m not always always the best at it and I burned myself out a lot, but I’m working day in and day out on just being better.

 

Bailey Kramer  51:15  

Definitely, there’s, there’s not it’s not a destination. It’s really the journey that that’s the whole that’s the whole key. Dude.

 

Andy Weiss  51:23  

Hit it on the nail on the head. Now on the head, Wow, that’s great. I love that. It’s think it’s the journey. It’s a journey. Really. That’s actually how part of my like podcast intro for it tightens. Like literally, like, that’s because it because I think that’s it’s like learning to embrace the process. Because like, life is just a process and you’re never going to get to a destination. You know, it’s not like, it’s not that you just can’t, you can’t all of a sudden be like, Oh, I just got here one day like, let me let me stop, you know, like I’m in the shape that I want to be in. So now I gotta stop working out. Now you you got to work out harder to get to the next level or even just maintain.

 

Bailey Kramer  52:07  

Awesome. So Andy, Where can the listeners get ahold of you?

 

Andy Weiss  52:12  

So I just did before but I I do I do like to interact with people on Instagram a lot at the Andy Weiss

 

And I’m on on LinkedIn

 

and not really so active on Twitter, you know, shoot me an email you know, give you all any contact info I can I can give you put in the link to the, to the podcasts. But, you know, definitely definitely pretty accessible. Like, like I said, that’s how, that’s how we connected. But I will say, you know, like, I think I think it’s very, very good like how you did it and I connect with people when there’s a good ask on LinkedIn or like, hey, saw we know so and so and Tom and want to talk to you about this. I feel like A lot of times people reach out or like, they’ll just send a blank connection. And I’ll connect with some people but like, I’m just like, sometimes I’m like, What like, like, make it make it like, specific or at least, like something actionable, where it’s like, you know, the two of us connecting is gonna, like, make something happen in the world that’s gonna be, like, bigger than the both of us, you know? Which, you know, when we’ve done like, you know, 2030 deals together like 30 years from now, like, we’re gonna look back and be like, that was a that was cool. That was cool. Very true.

 

Bailey Kramer  53:35  

Very true. And also your podcast Rising Titans with Andy Weiss.

 

Andy Weiss  53:40  

yeah. Yeah, that’s true. I got the Instagram for that at rising Titans. USA. You know, we’re working on that. It’s it’s always a work in progress, but I definitely it’s a journey right? Yeah, yeah, it’s less it. I will say it like this. I like I like your podcast format because you got a nice kind of like, nickel market segment. And then you get more of the personal development. I definitely focus on personal development and not every person I interview is in real estate a lot are, but, but I definitely try and get over a picture of who someone is and kind of go into, like, their struggles is something that I try to think about a lot. It’s like, whenever you’re looking at someone or you meet someone, you got to just always remember, you know, you’re gonna snap judge that person, like, always remember that person has been through some shit, you know, like, just like, you’ve been through things and you have things in your life that have plagued you and every person has esteem issues. Every person has their own issues at home, with their family, their friends, you know,

 

realizing that we’re all the same in that way,

 

for me, is very, it’s just very, like, peaceful and I really have started to see I think I’ve done 12 podcasts. Now 1312 or 13, five Kasmin, you start to see a lot of the same common themes and people. And it’s cool. It’s cool to know. We’re all human. For sure,

 

Bailey Kramer  55:11  

for sure. So Andy, you know, it was an absolute pleasure having you on today. Thank you so much for sharing all of your commercial lending knowledge, your your mindset knowledge and you know, sharing a lot about yourself. So it was great having you on.

 

Andy Weiss  55:24  

Thank you so much for having me, Bailey. I love love what you’re doing here on the podcast and starting to syndicate at a young age and I have a feeling you will be very successful at it. I not just feeling like I know you will also keep doing what you’re doing my man. Thank you. Thank you. All that.

 

Introduction  55:43  

Thank you for listening to the real estate investing Made Simple podcast. For more resources or to connect with us further, please visit our website, http://www.baileykramer.com. We’ll see you next time.