Journey to Multifamily Millions

Working Your Dream Job, Thanks to Real Estate with Maria Zondervan, Episode 75

December 21, 2023 Tim Season 1 Episode 75
Journey to Multifamily Millions
Working Your Dream Job, Thanks to Real Estate with Maria Zondervan, Episode 75
Show Notes Transcript Chapter Markers

Today's guest is  Maria Zondervan, She is the CEO of Blue Vikings Capital a real estate

investment firm and founder of Valhalla Villas, a non-profit organization dedicated to providing housing and independent living services for autistic adults. 

An accomplished wildlife biologist, she was able to keep working her dream job thanks to the additional income she was getting from real estate. She is the perfect example of how someone can continue doing the job they love while building wealth in real estate.

Maria ventured into real estate early, while still in college. She later transitioned from investing in single-family homes to managing a 12-unit apartment complex. 

Maria discussed the responsibilities of managing others' investments, the importance of understanding the market, and her commitment to providing secure future housing for her autistic son and others in similar circumstances. Stay tuned!

Episode Topics

[01:41]  Meet our guest, Maria Zondervan
[03:29] First Steps and Challenges in Real Estate
[05:59] Balancing Business and Real Estate Investments
[09:40] Understanding the Real Estate Market and Investment Risks
[15:31] The Role of a Professional Capital Raiser
[18:28] The Importance of Due Diligence and Investor Trust
[25:20] The Value of Diversification and Market Exposure
[34:16] What is one red flag every investor should look out for?
[34:46] What is a myth about the real estate business?
[37:15] Connecting to  Maria 

Notable Quotes

  • "We were already into the buy-and-hold strategy. We weren't flipping. So we were in a safer position as it was, which is why we decided to keep some." -Maria Zondervan
  • "If you're holding it for the long term, you can weather that storm until things rebound—the appreciation, especially in insulated markets." - Tim Little
  • "I didn't want to be practicing with other people's money. I really wanted to know my stuff." -Maria Zondervan
  • "People who owned apartment buildings weren't suffering nearly as much as those who were being speculative at the single-family level." - Tim Little
  • "As a business owner, we'd love it too because now that I'm a professional... we would be saving enough in taxes." -Maria Zondervan
  • "You have to look at it over like a strategy, not just one-time events. Talking with your CPA can make it seem more manageable." - Tim Little
  • "As a professional capital raiser, my money goes in first. I invest alongside you, ensuring commitment and aligning interests for success." -Maria Zondervan

Connect with  Maria Zondervan 

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Ep 75 - Maria Zondervan (audio)

[00:00:00] Maria Zondervan: Networking is huge in this world because it's more of a team sport than the single-family route. And I wasn't used to that. I was very uncomfortable with that at first. I like to sit in the corner of the room and have to get out of that shell and get to know everybody because you're not just looking at the deal. You're not just vetting the property and the potential numbers here. You're vetting those sponsors. You want to know that they're going to take it as seriously as you do because you're bringing your friends and your families. Money into this, right? So it's serious stuff. So there's the doing the due diligence on the property, the market, all that kind of stuff, but also on the sponsors themselves,

[00:01:13] Tim Little: Hello everyone and welcome to the journey to multifamily millions I'm your host founder and CEO of ZANA Investments Tim Little and on today's show we have with us Maria Zondervan Maria is the CEO of Blue Vikings Capital a real estate investment firm and founder of Valhalla villas a non profit organization Dedicated to providing housing and independent living services for autistic adults She is the perfect example of how someone can continue doing the job they love while building wealth in real estate, and I can't wait to get into that. Maria, welcome to the show.

[00:01:48] Maria Zondervan: you so much for having me, Tim.

[00:01:50] Tim Little: Yeah, it is great to have you. 

I gave everyone a little preview of your background, but please get into the details of how you got started on your journey. And how you got to where you are today.

[00:02:01] Maria Zondervan: right. we're going to have to travel back in time, back to my college days, actually, because I actually bought my first real estate property while I was still a college student. I was up late at night studying as we all did. And, they used to run those dang infomercials, And I'd have the TV just run into the background while I was studying. And there was this infomercial. Marshall from Carlton Sheets, some of the old timers on your show might know, and he was talking all about buying real estate with no money down, and I'm like, oh, can you really do that? That can't be possible, but as a bro college student, no money down is exactly how much I had, so I decided to, take my book funds for that semester and instead buy the course instead of the books, and Yeah, the rest is kind of history. I got into real estate investing, but I just did it on the side. My main passion was wildlife, so I became a wildlife biologist, and that's what I did full-time. But I invested on the side in real estate, and that's how it all got started.

[00:02:55] Tim Little: Yeah, so let's dig into the details a little bit more. What type of deals were you doing at first? Was this just buying single-family homes and then holding it long-term, fixing and flipping? What kind of deals were you doing? And what did that first deal look like for you?

[00:03:12] Maria Zondervan: Yeah, the first deal was a lease option, which at the time was the newest, latest, greatest thing. most people had not heard of it. So when you approached owners of property with that concept, a lot of them had no idea what you were talking about. So it took some educating, but yeah, that was the first one that got in on the lease option. But, trying to hand out a bunch of different things. I say our hands because my husband got involved with this too. When we started doing some flipping, we found out we sucked at it. Sorry if I can't say that word on your podcast. But, yeah, it just took a lot longer than we anticipated. Always cost more than we anticipated and I just didn't have the eye for it. So although we made a little bit of money on it, we didn't want to pursue that. So we primarily did buy and hold. but we also read the tea leaves, right?  Read the markets. So this all started, way back when. So we went through the whole 2008, nine, 10. Downward turn of that market, but my husband at the time was doing mortgage brokerage, so he could see what was going on. He won't believe the kinds of loans they're having us do right now. He's this insane. As a matter of fact, he quit the business because of it, because he's this just isn't right. And, so we were holding quite a bit of property at that time and the prices had gone really high. So we decided to go ahead and cash out on some of that, which was smart because the bubble really burst and a lot of people got in trouble there. but we did also, take advantage of some of the loans they were offering them. So we got into some properties with no money down. From the actual banks, they would give you a 75 percent loan as your first mortgage and a 25 percent loan plus closing costs on the second mortgage on the same property. So it was just insane. But luckily we were in great markets where the rents held up. And so those properties did fine. And then, once we cashed out, we took that money and put it into buying a business. So you've got the franchise rights for Massage Envy, which is now a large franchise at the time. They were just getting off the ground. It was a new thing, where you have membership-based services for massage, and that took off. That was downtown Orlando. We still have that location today. Cash flow is great. So we use real estate to get into that. We had the money for the down payment. And then when you go get a business loan, they want Of course, what's every bank want? They want leverage. And so real estate is great for that. So the real estate we're still holding became the leverage for those business loans. That's how that went, and now that cash flows, and now that cash flow goes back into buying more real estate. So it's a great little cycle going back and forth, and we've since bought another location there, and so my husband now runs the massage envy side of things, and I run the real estate side of things.

[00:05:52] Tim Little: Awesome, yeah. Again, a lot of history there. But it sounds like you had a unique experience and position, one having your husband there as an inside man, and then you are the outside with real estate yourself.  It sounds like you dodged a bullet that many people did not during the great financial crisis and, how, you, you heard your husband talking about how some of these loans were ridiculous. And people were getting loans that they certainly didn't deserve at the time for much more than they could afford. And I guess were those the big signs for you that you should probably cash out while you were on top? Because not many people are very good at reading the market, right? Because everybody gets caught up in the hype and that's why it keeps going until it doesn't. talk to me a little bit more about that. and how much of your, say, portfolio, did you wind up selling? Was it,50 percent of what you had

[00:06:51] Maria Zondervan: about 50%. Yes. And it wasn't massive at the time, but it was in good neighborhoods. We only bought properties in good neighborhoods. So back before all that mess, you could buy a house pretty much at market prices and rent it. In cash flow, it wasn't as hard as it is today. but of course, we always worked hard to get deals that did even better than that. So we had a good margin there. So we knew if rents went down a little bit, we'd be okay. But when a lot of people lose their homes, unfortunately, you have. More demand for rentals, so the rents really didn't decrease. And so we were okay from that. I think the people that got in a lot of trouble were the ones that were buying with the anticipation of selling at a higher price, right? So they were buying and flipping them basically, sometimes not without doing any work or doing very minor work. And some of them had a lot of deals going all at once. We were already into the buy-and-hold strategy. We weren't flipping. So we were in a safer position as it was, which is why we decided to keep some. We knew we didn't know, but we suspected the value might go down, but as long as it was cash flow that was okay, and of course, those values have regained many times since. and we still have some of those properties cause we really do believe in buying and holding for the long term. You could, of course, refinance, get money back out if you need to, but we really like having that steady cash flow coming in and the tremendous tax write-offs. Right.

[00:08:17] Tim Little: Yeah, and I think that's an important point that you bring up. We talk about, The great financial crisis and how we sometimes assume that everybody lost value, right? If you were invested in real estate at all, whether it was single-family, or multifamily, a lot of people make broad generalizations, that things just went bad. And that's not necessarily the case, right? There were some markets that were more insulated than others. like you talked about how you buy. and then if you're holding it for a long term, you can weather that storm for a couple of years until things rebound, which is where you said a lot of people got caught up because they were almost being speculative in how they were buying, right? Like a stock that they thought was about to jump up. So they just buy more and more houses, whereas those folks who were buying and holding, rents don't really drop that much. If anything, like you said, they have the potential to go up when more people are renting. Now, the value of that property may go down and if you're over-leverage, you could get in a bad place.  But, if you did it somewhat conservatively, and you were holding for the long term and you had that long-term debt, You were probably okay because you were able to hold on to it long enough to get through that storm and still sell it, at a much higher price down the road. once you get past all the ugliness of the financial crisis. So I think those are really important points because again, we make sweeping generalizations sometimes about how everything was terrible, especially in real estate. And I think that's true for multifamily too, right? Commercial multifamily apartments. people who weren't, people who owned apartment buildings weren't suffering nearly as much as those who were being speculative at the single-family level. for a variety of

[00:10:08] Maria Zondervan: they're valued completely differently, right? So that had a lot to do with that because like you said, the rent kept coming and they actually increased in many places. I think a lot of it was also when you bought like we didn't buy anything at the top of that bubble. We bought it before then and we're holding it. So the loans we had were also not those crazy loans because some people bought at the top, even if they were cash flow and were able to make their payments. The loans were calling, the banks were calling the loans due because the property was no longer worth what,, the loan was for, right? So they started calling loans even if you were doing everything right, you're making your payments, right? We luckily didn't get caught up in that either because we did buy low and before all of that. And we had more stable loans. We didn't go with those crazy loan products. The ones my husband got out of business because they wanted him to push.

[00:10:58] Tim Little: No, that was smart. And you were doing it sounds like a single family. Did you transition to a small multifamily and then into commercials? Multifamily, what did that progression look like for you?

[00:11:11] Maria Zondervan: I was pretty much stuck in the single-family home world, all through while I was still employed as a wildlife biologist. So it wasn't until I really decided it was time to leap into real estate full-time that I decided the best way to do that was to scale. And the fastest way to scale, by far, is multifamily, as I know you know and you're listeners now. That's really where... You can get law units under your name rather quickly and can scale and you have more control, right? We just talked about evaluations of single-family versus multifamily. It's all income-based. So you can really control that. at least to some degree, you have more control, I should say that basically happened for me in 2019 when we got into our first multifamilies. And first, I bought the first apartment complex while I was still working and then said, okay, yep, this can work. I know what I'm doing. I'm going to take the leap and do this full-time. And that's when I quit my job.

[00:12:09] Tim Little: Yeah, and that's interesting because it sounded like you were pretty convinced pretty quickly. What about Multifamily Syndication drew you in and made you want to stay there?

[00:12:20] Maria Zondervan: Yeah. So I didn't do syndication at first. I just bought the property for myself. cashed in some of the single families. 1031 exchanged into the first multifamily, right? And then that one worked well and then did another one. So moved that way. So I learned on my own property first because I didn't want to be practicing, so to speak, with other people's money. I really wanted to know my stuff. And it's not until you've gone through the process a couple of times and done asset management because people think buying them is the hard part. No, it is not. It's managing those suckers. It's a lot of work and it can be complex even when you have professional property managers in place. You have to make sure they're staying on the ball. You have to make sure you get the right property managers. I made mistakes there, but I learned with my money before I started asking other people. To believe in me and invest alongside me,

[00:13:14] Tim Little: Yeah, and I think that's a really important point, too so let's talk about that, that first, commercial multifamily property that you did the 10 31 exchange and just, for the listeners to, to help understand what a 10 31 exchange is. Why don't you go ahead and explain that? I've done one as well. so I'm familiar, but just so people understand what that process is and why it might be beneficial.

[00:13:39] Maria Zondervan: So rather than selling the single-family homes and taking the tax hit on that, you can do what's called a 10 31 exchange where you exchange like-kind property. So this is a rental property for rental property. Yes. One's multifamily, one single family, nobody cares in the tax world on that. And, so basically you're. Rolling over your basis into the new property. So there's not a taxable event and you can keep doing that and scaling until you die, really. And then when your kids inherit or whoever inherits, if you don't have kids, the tax basis resets. So you end up never realizing the gains are the. The hit of those taxes, right? So the capital gains taxes, never come to fruition really. So it's a way of either pushing that down the line or never realizing it. So that could be a huge savings. If you think about how much each sale could cost you, how much money you'd have to pay, and the future value of that money. So that's what that strategy is. But you do have a timeline like you have to identify the property in a certain length of time, you have to close it in a certain length of time, there is stress and pressure in that, and you have to be careful not to get into a bad deal just to make that timeline.

[00:14:49] Tim Little: Yeah, that's a huge point. Cause like anything, there are downsides, right? And so that's the potential downside that you start running against that clock and you need to find that replacement property, the one that you want to purchase and you're like, okay, I'm only, I only got a little time left. And then you feel the pressure to get a property that is not a good deal. And I would caution anyone against doing that.  because... Against doing the bad deal part not 1031 because let me mean let's think about the worst-case scenario, right? You pay the tax You pay the taxes that you would have had to pay that in the long run can be better than doing a bad deal. that might wind up costing you much more money in the long run than those taxes would have. So just, go into it knowing that there are a whole lot of positives, but there are those challenges associated with it too. And as you said, you could feasibly do it forever, right? Going from. Single-family to a bigger single family to a duplex to a triplex and just keep. scaling up, as you go. What was that property that you scaled into, on that 1030, first 1031 exchange?

[00:16:02] Maria Zondervan: that was a 12-unit apartment complex here in Florida, and it was a class C property, so in a not, Great neighborhood, but that came with challenges. We were not accustomed to it because their single-family homes have been very nice neighborhoods. So that was a stressor. I did want to go back to 1 point. You're talking about the 1031 exchanges real quick. I didn't realize at the time I'd learned since, with multifamily, you have the cost segregation and the bonus depreciation stuff going on, and you can use that to write off a lot of those taxes. Had I known that at the time, I may have chosen to take the tax hit, but then write them off that bonus depreciation. but again, I wasn't knowledgeable about that at the time. But now that's an option for folks while we still have bonus depreciation. It's going down 20 percent every year now, but, there is the option if you want to not have to think about those taxes, take the tax hit and then write it off.

[00:16:56] Tim Little: Yeah, and that is important too because a lot of times we tend to look at taxes as a one-for-one thing. But, as, I've learned some of those same lessons, I need to look at it more holistically, right? It's more of a tax strategy, and you have these little taxable events. Along the way, for example, I did a 1031 exchange from a duplex into a triplex on the triplex. I was like, you know what, I'm going to take the hit on this one and use the proceeds to invest in multifamily. But in that investment, we had accelerated depreciation, and cost segregation. And that was able to counter just like you talked about the taxable event that I had before and wipe it out. So you have to look at it over like a strategy, not just one-time events, and talking with your CPA. I'm not a CPA. None of this is tax advice, it can make it seem a lot more manageable and not as, what was me to say? Oh, I got this big tax bill. yeah. What can you do? counter that though. And one of those things is, either passively or actively investing in commercial multifamily and which is what we're going to get

[00:18:12] Maria Zondervan: And as a business owner, we'd love it too, because now that I'm a professional. a real estate professional under the tax guys, under the IRS eyes, right? My husband's income, which is active income from his business, I can write off a lot of that with our passive losses, which are just paper losses on that depreciation, right? So when I was debating whether or not to leave my job, we did some math on that because we're paying a lot of taxes for the massage envy, a lot of taxes. It turned out that we would be saving enough in taxes from being able to use depreciation to offset that once I was a professional real estate person, that it almost took the place of the salary I was making my W 2, and of course, my W 2 is taxed at the very highest level too. So if you do the accounting for that, it was like, it almost doesn't make sense for me to keep this job.

[00:19:09] Tim Little: Yeah.

[00:19:10] Maria Zondervan: went into the decision process. Still hard to give up. Paycheck. You're used to having come every two weeks and all the benefits and all that is still a hard decision. But, once you start doing that, yes, we're not tax advisors, but there are tax considerations when it comes to real estate that are really powerful. And you should look into it if you're considering doing something like that.

[00:20:05] Tim Little: Yeah. And you're especially right if you're a dual-income household and your spouse is, even relatively high income, and gets taxed at that high level. the ability to write down those taxes is something unique to military or sorry, professional, real estate status because otherwise, you would only be able to write those, that depreciation down against your investments, which is nice and it's great, you can't write it down to get your spouse's w two income until you have that professional. which is something that so many people strive for, but there are strict guidelines in place. It's not a part-time job. the IRS wants to make sure that you're actually doing real estate, full-time, if you're going to get that nice little perk. so you talked a little bit too about not wanting to practice with other people's money. And I, I really respect that. because it just goes to the point of what a massive responsibility it is to be, in what the steward of other people's money, right? they're entrusting you, with their, the money that they've worked so hard for, and you didn't want to take that lightly. So this was your way to learn the ropes as it were, and, really feel confident in what you were doing before you took on, That awesome responsibility and I certainly understand that one of the ways that I did that too was becoming a passive investor first, that way I was able to understand the position of the passive investor and, how much, like even something, and I say small, for me, it was huge, like 25, 000, it felt like a lot of money to be giving over to someone and just saying, please do the right thing with this. Now I see people hand over 100, 150, 000. And they're like, yeah, you got it. I trust you. And that's sometimes I'm still surprised by that. but I understand the level of trust that goes into that. I understand the questions and the concerns that passive investors have. As a result of having that role first, and it also helped me, as I progressed into an active investor because I was able to ask questions and learn how deals work before jumping in one myself and even that first deal that I jumped into. a syndication deal that I jumped into, I jumped in as a GP, but I did not raise any money on that deal. So there, you could almost think of it as an internship, whereas, I may not be getting paid that much because I didn't get a big cut of the deal. but I also wasn't responsible for anyone's money, but my own, and I was getting on-the-job training as well. So I think those are really important points and something for passive investors. Should be looking out for the right house. How seriously does this person take the responsibility of taking my money?

[00:23:06] Maria Zondervan: It's a huge responsibility. I've got best friends from back in high school who are vested with me. I've got family members and neighbors. These are people I need to be able to look in the eye and say, yes, we did right by your money. So it's a huge responsibility. Much like you, I did the LP route first, right? Let's see how they do. Let's see what the process is like. Let's learn from them because it's a little less risky than going straight to GP. So I did both, I bought apartment complexes on my own and then I did LP investments and then I started capital raising for others as well. And that couldn't happen by pure accident. As I'm analyzing deals, as I'm learning more, I'm just looking at tons and tons of deals and trying to pick the best ones and then I'd find one and then I'd be telling a friend about it and they're like, Oh, can I get in on that deal too? And I'm like, sure, I'll hook you up with the sponsor. And before long I found I had all these people that they didn't want to do their own due diligence. They want me to do all the due diligence and then tell them what to invest in. And I was like, maybe I should. Make this into a business, right? Cause I'm really good at underwriting, really good at looking at numbers and vetting sponsors. And then networking is huge in this world because it's more of a team sport than the single-family route. And I wasn't used to that. I was very uncomfortable with that at first. I like to sit in the corner of the room and have to get out of that shell and get to know everybody because you're not just looking at the deal. You're not just vetting the property and the potential numbers here. You're vetting those sponsors. You want to know that they're going to take it as seriously as you do because you're bringing your friends and your families. Money into this, right? So it's serious stuff. So there's the doing the due diligence on the property, the market, all that kind of stuff, but also on the sponsors themselves,

[00:24:49] Tim Little: Yeah, and so expand on that a little bit more in terms of Your role and, sometimes we on here, we talk about like fun managers and fund the funds or syndicators, slash sponsors. We have all kinds of names for the same thing.  Syndicators, what exactly is your role in the title? And what, and you talked about it a little bit, is the value that you're bringing versus that person going directly to that sponsor slash general partner who's, who found the deal and it will be running the deal.

[00:25:25] Maria Zondervan: So that, so there are people who do both, right? They have their own deals and they raise money for those, but in between those deals, they might raise for somebody else. And so the benefit of being with somebody that raises for other people's deals is. They are getting lots of deals, like I have people come to me every week. Hey, raise money for this deal. Raise money for that deal. I have more of that coming at me than I have time to really look at. But, so I have a quick checklist. Does it meet X, Y, and Z? If not, I immediately chuck that. And then... I started digging deeper and if they check everything, okay, here's what I'm really going to consider. And I might bring that to the top, but I'm looking at lots and lots of deals versus if you go straight to a sponsor, they've got that one deal going on right now. And it's really important to them that they close on time. And so they're going to be pushing that deal pretty hard. so I guess I'm coming in with a little bit of a less biased situation because it's not my deal that's on the line to close. So I can look at it. from a little offset situation. So I'm gonna, and I'm only gonna pick the very best deals to get into. And then the next thing is my money goes in first. I invest in everything that I make available to anybody else to invest in. So when I say invest alongside me, that's exactly what I mean. I'm putting my money in the deal because I believe in this deal. And now I'll invite you to come in and do the same thing. And then, you mentioned fund managers. Versus co-GPs is what we often call them, right? So in some cases in the deal, the lead sponsor, the lead general partner, syndicator, whatever you want to call them, would invite me to raise money for their deal and bring me in as a co-GP. If they do that means I am now part of the general partnership, right? I'm going to be part of the meetings about what's going on. I'm going to have the inside scoop of what's happening. And if I see them making some sort of decision that I think might not benefit my investors, I have the right to speak up there. I have a say, I have a certain ownership in that partnership. Okay. So there'll be even voting rights in there to where I can try to protect the investor. so that's helpful for people to come down that way. In other cases, you mentioned might be a fund-the-funds kind of thing. You come in with a fund of money. And in this case, you're not in the general partnership. Generally, it comes in as a limited partner. So I'm always invested on the limited partner side anyway, I'm always going to have money on that side. But in this case, the fund brings all the money to the limited partnership side. But the nice thing is that I'm in an alliance with a lot of other capital raisers. There are 29 of us currently. So we can go after capital raising on some really large deals, 40, 50 million deals, sometimes more. And we can go to the lead sponsor and say, Hey, you need to raise 20 million or whatever it is. If we bring you half of that if we bring you 10 million, what kind of preferential returns can you give our investors? So a lot of times we can stretch, and structure things much more beneficial to that investor than if they went straight to the sponsor. So maybe the sponsor's offering a 6 percent preferred return and a 60-40 split on the equity, for example. We could say, hey, if we take care of half the capital raising for you, maybe all the capital raising for you, whatever. and understand the sponsors. They're dealing with a lot of stuff when they're looking at that closing line, right? Capital raising is just one aspect of it. They're doing all the due diligence. They're handling the loans. They're getting everything lined up. There's so much for them to do with the relief of not having to do all that capital raising that has a cost. Like there's value to that for them. So they might say okay instead of the 6 percent prep. We'll give you 8 percent prep to your investors. All right, that's going to make my capital raising easier. It's going to make it more likely that I'm going to be able to bring in that 10 million with the other group. And maybe instead of that 60-40 split, we get a 70-30. And perhaps there's a hurdle at 15 percent where the investors after they reach 15 percent returns, there's a 50-50 split. Maybe that doesn't apply to my investors, right? So we can negotiate much better terms because we're coming in with a large check.

[00:29:42] Tim Little: Yeah. No. And obviously, it makes sense. you're saving them a lot of time and work by bringing that money to the table. how, and just based on your experience, do your terms, cause you're talking about a bigger chunk than I'm used to hearing, right? A lot of times we'll hear funds coming in with 1 million. Two million dollars. But if you're talking about the capability to raise like 20 plus millions of dollars, then you're competing with family offices and private equity firms. How do your terms compare with those different entities?

[00:30:16] Maria Zondervan: So I actually have a good friend of mine who's in this business who just got screwed by a family office. I hate to say that, but we hear this happening a lot where they're coming in as a preferred equity partner or something. They're bringing a really big chunk of money. So they, yes, they can negotiate good terms for themselves as well, but they have been known to pull out at the last minute. And pull that check and then your whole deal goes in the toilet, right? You were expecting a 10 million check and it doesn't show up. They waited three days before closing to read the paperwork and there was something in there they didn't like, some terms they didn't like, maybe some preference for the bank loan, or whatever the case may be. so there's a lot of, I think some sponsors are afraid to bring them in sometimes because that's happened. quite frequently. So I think for someone, if they're used to working in that office and they've done it before, it's probably fine, but sometimes it can be a little scary. And, when we're doing a fund like this, it's still a lot of individual investments, right? And they've already placed their money with us. We're not going to pull out last minute and pull all those funds back and refund, all those people, their money, that, that would just be a nightmare. I think it's a safer bet for the sponsor side.

[00:31:31] Tim Little: Yeah. And so from what I'm hearing is basically that level of commitment, if you do that handshake deal, that agreement that you will. Raise this much money for a deal, you're gonna do it. compared to those family offices, which, unfortunately, as you said, happens, not infrequently. They tend to pull out at the last minute for a variety of reasons, the strict guidelines that they have set, which I don't know, maybe sometimes they don't discover till the last minute or just something about the deal like you said, that spooks them and then all of a sudden. You're out this huge chunk of capital that you needed, in some cases to even close, which could be a terrible situation to be in. I've seen it where they've pulled out where the sponsors still had enough to close, but then you still have to continue to raise money after that in order to do the renovations and everything else that you wanted to do on the deal. So it can really. throw a wrench into a sponsor's plan for sure.

[00:32:31] Maria Zondervan: And the other thing about using, going in with a professional capital raiser is if you want to diversify your portfolio, let's say you want to go from multifamily apartment complexes over to, new development perhaps, or into self-storage, RV parks, or whatever the case may be. Yeah. Now, if you want to invest directly with sponsors, you have to go find a whole different group. Of the sponsors, right? Because the people you were investing with before, had their specialty. They may not do those other asset classes where you do, whereas professional capital raisers, probably know somebody in all of those areas. And they know how to underwrite all of those different things. So you're not having to learn a new game all the time. They can bring you stuff that they have vetted. All

[00:33:13] Tim Little: Yeah, that makes a lot of sense. And I, I think just the, what you talked about of you vet a lot of deals, right? And so what does that do? That gives you. Visibility on what's happening in the market, allows you to see things that may not be quite right. compared to others that are doing the right thing. And just by pure exposure, you start to understand deals and markets at a deeper level than someone who doesn't see that many deals. All right, I think we do need to transition to the turbo round now. So I am going to ask you three questions that I ask every guest that I have on this show. I just ask you for some quick, honest answers. All right, question one. What is one red flag every investor should look out for?

[00:34:03] Maria Zondervan: Right now, bridge loans. Watch out for bridge loans. It's still extremely expensive to buy rate caps. And, they're coming in just really high. Those loans come in really high and rents are not moving up fast enough. Like they were in the past too, to make up the difference. Be very cautious of bridge loans.

[00:34:20] Tim Little: Yeah, I would almost say it's impossible for rents to move up as fast as rates have been moving up. So there's that. all What is a myth about this business that you would like to set straight?

[00:34:34] Maria Zondervan: That 's easy. That it's passive. It's passive only if you're a limited partner in a syndication. There's nothing passive or easy on the other side of this. It's a lot of work. It's a lot of freaking work.

[00:34:46] Tim Little: Yeah. and there's nothing wrong with a lot of work as long as you expect it. And I think that's where a lot of people get tripped up. they passively invest and they think, Oh, I could do this. and then they come in and it winds up being a lot more work than they expect, especially if they still have their job and everything else. And then they're expected to have certain responsibilities if they are on that. General partner team, right? You will have to go to meetings. You will have to make decisions. You will have responsibilities and Yeah, I 100 percent agree. It is a lot of work if you want to be passive. That's great And I certainly encourage that but the only way to really do that is to be that limited partner who is passively investing All right, final question. What does success look like to you?

[00:35:36] Maria Zondervan: Changing lives. That's really what it's all about. One of the reasons I left The field I was so passionate about being a wildlife biologist saving endangered species was because I have an autistic son. And, as he started getting closer to adulthood, it dawned on me. It's oh my gosh, I've been so focused on just getting him through school. I hadn't thought about that long-term projection. Will he ever be able to fully support himself? Odds are. And so I need to not only be able to support him now while I'm alive, but beyond that, and to do that, I got to scale. And so a lot of the people that invest with me are actually parents of other special needs kids that we've gotten to know along the line. And so I'm trying to help them change lives to set that secure future up for their children. And. Also, the nonprofit that I started, the Valhalla Villas, where we're creating affordable housing for autistic adults who have the services they need to live securely and their parents can know that they'll have a safe place to live even when the parents can't take care of them anymore. And there are services there to catch them if they fall.

[00:36:41] Tim Little: Yeah, that's awesome because you're talking about, setting that legacy that's going to continue to help people You know long after you're gone. That's beautiful.  All right, Maria. hey, this has been awesome Please tell our listeners how they can get ahold of you and if you have anything else that you'd like to share with them

[00:36:58] Maria Zondervan: Absolutely. So blue Vikings with an S capital. com. So I'm a blue Viking. I'm from Sweden originally. So our flag is blue and we have Viking blood running through our veins. So it's And I do have a book out that's free for anybody who wants to get into passive investing. You can download it from that website. So feel free to take advantage of that. And if you do have a special needs child, I just wrote a guide about that. future retirement planning as a special needs parent. It's everything about retirement and just future housing and all those things that you need to think about when you have a special needs child, special needs trust, all that kind of stuff. I've outlined it for you. All those resources are available through my website, my emails there, and my social media handles all of that. So you can reach out to me if you can't find any of those things, or if you want further information.

[00:37:49] Tim Little: Awesome. we'll certainly have all that information in the show notes Maria I appreciate you coming on and look forward to continuing to see you do big things on your journey to multi-family millions

[00:38:01] Maria Zondervan: Thank you so much.

[00:38:03] Tim Little: Thank you. 

Ep 75 - Maria Zondervan (audio)
Introduction and Guest Background
Maria's Journey into Real Estate
First Steps and Challenges in Real Estate
Navigating the 2008 Financial Crisis
Transitioning into Business Ownership
Balancing Business and Real Estate Investments
Insights on Market Trends and Investment Strategies
Benefits of Long-term Investment and Tax Strategies
Understanding the Real Estate Market and Investment Risks
Transitioning from Single Family to Multifamily Investments
The Role of a Professional Capital Raiser
The Importance of Due Diligence and Investor Trust
The Value of Diversification and Market Exposure
Defining Success and Leaving a Legacy
Closing Remarks and Contact Information