TLP20: LPs Beware! With Paul Moore

Season #1

Joining us today is Paul Moore. He invested in an oil and gas deal in North Dakota in 2010. At that time, North Dakota had a massive housing shortage. There were tens of thousands of oil workers, executives, and folks descending on their towns that didn’t have housing. So, Paul and his partner quickly built a multifamily facility, which became the stepping stone of his real estate investing career.

Paul will touch on how to make money in a gold rush. What’s the best way to invest during a gold rush? He will also discuss value-add properties and share why they decided to look for assets that had a lot more mom-and-pop owners. He will also speak on the drawbacks of just jumping into a deal and not vetting the operators or syndicators. What are the things that investors or partners need to be aware of? Listen now to find out!

 

Key Points from This Episode:

 

  • Paul has a degree in petroleum engineering.
  • Paul invested in an oil and gas deal in North Dakota in 2010 which led them to find out that there was a massive housing shortage there.
  • He and his partner quickly built a multifamily facility that they operated as a long-term furnished hotel.
  • Paul wrote a book called The Perfect Investment about Multifamily.
  • They decided to expand into self-storage and mobile home parks.
  • What happened to the oil and gas deal that he invested in?
  • The tried-and-true assets or the “boring” assets are the fundamental way to look at your investing strategy.
  • Paul had difficulty finding deals in the multifamily space because every year the prices kept going up.
  • They decided to look for assets that had a lot more Mom and Pop owners.
  • Mom and Pops typically don’t have the desire, knowledge, or resources to increase income to maximize the value of their property.
  • They leave a lot of meat on the bone for a professional operator to come in and improve.
  • These are people with properties that have intrinsic value or a lot of potential value that they’re not tapping into.
  • A pro can significantly increase the income of this type of property.
  • When you find the right operator, you can unlock the value of an asset that already exists.
  • Residential real estate value is based on the neighborhood or based on comps.
  • Commercial real estate value is based on math; it’s based on a value formula.
  • Paul explains how to get the value of your commercial real estate property.
  • Paul gives an illustration of a type of value-add that provides explosive returns to investors.
  • Paul explains how the acquisition fees can be much more painful than investors really think through.
  • Paul talks about some of the biggest mistakes people make when investing.
  • What is his advice on the first step to finding the right operators?



Tweetables:

“The perfect investment is not perfect if you can't find deals that make sense on paper.” [00:02:57]

“To invest in a gold rush, be a boring investor, don't chase the latest crypto deal, although those are fun, you know, on the side, but don't make that your life's ambition.” [00:05:06]

“The good news is about being a limited partner, of course, is that you can't lose more than you’ve invested. But let's all face it, you can lose what you’ve invested.” [00:19:10]

 

Links Mentioned

Paul Moore on LinkedIn

Company website

The Perfect Investment: Create Enduring Wealth from the Historic Shift to Multifamily Housing by Paul Moore

The Hands-Off Investor: An Insider’s Guide to Investing in Passive Real Estate Syndications by Brian Burke


About Paul Moore

Paul Moore is the Founder of Wellings Capital. It is a real estate private equity firm that manages a number of investment funds. They work with accredited investors and provide diversification across self-storage and mobile home park assets.

Their Core Values are: Conservative Approach, Integrity, Quality Investor Experience, and Giving Back.

Wellings Capital works with operators with stellar track records and distribution history. Track records and experience are everything and they are happy to share their detailed track records of their approved operators and their due diligence on them with everyone.

They have managers with decades of experience in recession-resistant asset classes who know precisely what to do at this point in the market cycle. They also partner with syndicators who share their risk-averse approach and have a proven acquisition strategy and a seasoned asset and property management team. 

After graduating with an engineering degree and then an MBA from Ohio State, Paul started on the development management track at Ford Motor Company in Detroit. After five years, he departed to start a staffing company with a partner. They sold it to a publicly traded firm for $2.9 million five years later. Along the way, Paul was a finalist for Ernst and Young’s Michigan Entrepreneur of the Year for two years straight. Paul later entered the real estate sector, where he completed 85 real estate investments and exits, appeared on an HGTV Special Real Estate episode, rehabbed and managed dozens of rental properties, developed a waterfront subdivision, and started two successful online real estate marketing firms. Three successful developments, including assisting with the development of a Hyatt hotel and a multifamily housing project, led him into the multifamily investment arena. Paul co-hosts a wealth-building podcast called ‘How to Lose Money’ and is a writer for Bigger Pockets. Paul is the author of ‘The Perfect Investment - Create Enduring Wealth from the Historic Shift to Multifamily Housing' (2016).