Ivan Barratt is the Founder and CEO of The BAM Companies, which specialize in the acquisition and management of multifamily apartment communities. The BAM Companies consist of BAM Capital, BAM Management, and BAM Construction and have over $593 million in total assets. Ivan’s company has been listed three times on the Inc. 5000 list.
In addition to his role at The BAM Companies, Ivan is also a Managing General Partner for 11 apartment complexes, the Owner of two apartment complexes, and the President of the Reserve at Broad Ripple Homeowners Association. He has held several leadership positions at the Penrod Society and is an active member of the Young Presidents’ Organization (YPO).
Here’s a Glimpse of What You’ll Hear:
- Ivan Barratt discusses his experience working in real estate during the 2008-2009 financial crisis
- How Ivan started a real estate company — and his family’s influence on the entrepreneurial journey
- The impact of Entrepreneurs’ Organization (EO) and Young Presidents’ Organization (YPO)
- How does Ivan improve the culture of his company?
- Ivan’s tips for raising capital and gaining peoples’ trust
- How the pandemic affected The BAM Companies
- The people that have influenced Ivan
In this episode…
Every business faces challenges in its launch period. But what does it take to build your business during all-encompassing economic hardships?
Ivan Barratt has the answer. Two years after the financial crisis in 2008, Ivan started his real estate company. Ten years later, they were hit again with the COVID-19 pandemic. Luckily, Ivan built a strong foundation for his business, allowing them to flourish during the tough times. So, what’s his secret? Much of his company’s success lies in its culture. For Ivan, it’s important that his team has fun, lifts each other up, and continues growing — because when your people grow, your company grows.
In this episode of the Top Business Leaders Show, John Corcoran is joined by Ivan Barratt, Founder and CEO of The BAM Companies, to talk about leading through challenging times. Ivan shares his tips for finding success in your business, the importance of company culture and client experience, and the people that have taught him valuable lessons. Stay tuned!
- Ivan Barratt on LinkedIn
- The BAM Companies
- Scott Anderson on LinkedIn
- Entrepreneurs’ Organization (EO)
- Young Presidents’ Organization (YPO)
- Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki
- Invent and Wander: The Collected Writings of Jeff Bezos With an Introduction by Walter Isaacson by Jeff Bezos
- Giftology: The Art and Science of Using Gifts to Cut Through the Noise, Increase Referrals, and Strengthen Retention by John Ruhlin
- “How to Use Strategic Gifting to Get Ahead” with John Ruhlin on the Smart Business Revolution Podcast
- Good to Great: Why Some Companies Make the Leap and Others Don’t by Jim Collins
- Collusion: How Central Bankers Rigged the World by Nomi Prins
- The Deficit Myth by Stephanie Kelton
- Jerry Collins
Sponsor for this episode
At Rise25, we’re committed to helping you connect with your Dream 100 referral partners, clients, and strategic partners through our done-for-you podcast solution.
We’re a professional podcast production agency that makes creating a podcast effortless. Since 2009, our proven system has helped thousands of B2B businesses build strong relationships with referral partners, clients, and audiences without doing the hard work.
What do you need to start a podcast?
When you use our proven system, all you need is an idea and a voice. We handle the strategy, production, and distribution – you just need to show up and talk.
The Rise25 podcasting solution is designed to help you build a profitable podcast. This requires a specific strategy, and we’ve got that down pat. We focus on making sure you have a direct path to ROI, which is the most important component. Plus, our podcast production company takes any heavy lifting of production and distribution off your plate.
We make distribution easy.
We’ll distribute each episode across more than 11 unique channels, including iTunes, Spotify, and Google Podcasts. We’ll also create copy for each episode and promote your show across social media.
Co-founders Dr. Jeremy Weisz and John Corcoran credit podcasting as being the best thing they have ever done for their businesses. Podcasting connected them with the founders/CEOs of P90x, Atari, Einstein Bagels, Mattel, Rx Bars, YPO, EO, Lending Tree, Freshdesk, and many more.
The relationships you form through podcasting run deep. Jeremy and John became business partners through podcasting. They have even gone on family vacations and attended weddings of guests who have been on the podcast.
Podcast production has a lot of moving parts and is a big commitment on our end; we only want to work with people who are committed to their business and to cultivating amazing relationships.
Are you considering launching a podcast to acquire partnerships, clients, and referrals? Would you like to work with a podcast agency that wants you to win?
Contact us now at firstname.lastname@example.org or book a call at rise25.com/bookcall.
Rise25 Co-founders, Dr. Jeremy Weisz and John Corcoran, have been podcasting and advising about podcasting since 2008.
About Dr. Jeremy Weisz and John Corcoran
Dr. Jeremy Weisz is the Co-founder of Rise25. He has been involved in podcasting for 11 years and was a Senior Producer for one of the early business podcasts; he assisted in putting all of their systems in place and helped them add volume, feature, and edify various business leaders.
Dr. Weisz has also been running his podcast, Inspired Insider, since 2011. He has featured top entrepreneurs, founders, and CEOs of P90X, Atari, Einstein Bagels, Mattel, the Orlando Magic, and many more.
In addition to running Rise25, Dr. Weisz owns a nutritional supplement business and runs his chiropractic and massage facility, Chiropractical Solutions & Massage.
John Corcoran is a recovering attorney, an author, and was a former White House writer and speechwriter to the Governor of California. Throughout his career, John has worked in Hollywood, the heart of Silicon Valley, and has run his boutique law firm in the San Francisco Bay Area catering to small business owners and entrepreneurs.
John has been the host of the Smart Business Revolution Podcast since 2012. He has interviewed hundreds of CEOs, founders, authors, and entrepreneurs, from Peter Diamandis and Adam Grant to Gary Vaynerchuk and Marie Forleo.
John is also the Co-founder of Rise25, a company that connects B2B businesses with their ideal clients, referral partners, and strategic partners and generates ROI through their done-for-you podcast service.
Welcome to the Top Business Leaders Show. Powered by Rise25 Media, we featured top founders, executives and business leaders from all over the world.
John Corcoran 0:20
All right, welcome everyone. John Corcoran here. I’m the host of this show. And every week I get to have great conversations with CEOs, founders and entrepreneurs of all kinds of companies. Take a look at our archives. We’ve got some great interviews with the founders of Netflix and Kinkos and Activision Blizzard, lending tree, YPO, EO, Open Table, and many more. I’m also the co founder of Rise25, where you help connect b2b business owners to their ideal prospects. And this is part of our series with in partnership with Scott Anderson from a Doubledare executive coaching. Thank you to Scott for our introduction to our guest today. His name is Ivan Barratt. He is a real estate investor and property manager and syndicator specializes in large apartment communities in the Midwest. Since 2015. I didn’t has raised nearly 150 million in equity acquired over 5000 units. His company is a three time Inc 5000 listed company, which is really hard to do. So we’re gonna talk a little bit about how he’s done that today. He focuses primarily on equity, finance acquisitions and company strategy. And his company manages about $600 million in syndicated assets, but just not too shabby. Of course, this episode is brought to you by rise 25 media, where we help b2b businesses to get clients referrals and strategic partnerships with Dunphy podcast and content marketing, you can go to our website at rising media.com To learn more about that. Alright, Ivan, it’s a pleasure to have you here. I’m excited to have you and to to gain some great lessons for you. First of all, I love asking anyone who was in real estate at the time, about your own personal pandemic, which was the 2008 2009 financial meltdown, not your personal data, but our entire economies, pandemic. It was such a traumatic time. I was practicing law at the time for a firm that did real estate. And we had so many real estate investors coming to us that were upside down, just over extended, and looking for help on our way out. It was a really harsh time. But you were working for a mentor at the time in real estate and working to work your way up. Tell me a little bit about what that experience was like. But that period of time, like for you.
Ivan Barratt 2:31
Sure, John. And before I forget, thank you for having me. I’ve been looking forward to this for a while now. So I’m glad we finally were able to sync our calendars and thanks to Scott for introducing us Scott’s been a very meaningful part of my, my journey, my growth for gosh, I think as long as I’ve been in EEO maybe six years now. I met Scott very, very early on in EO since since have moved on to YPO but wouldn’t be where I’m at without without EO. Um, so yes. So, you know, in short, 2008, for me was the was it’s the tale of two cities, it was the worst of times for real estate. At the same time, it actually ended up being as I reflect back on it all the time forever altered my DNA. As an investor as an entrepreneur, it was the best of times. Um, I’ve been working since the basically the beginning of 2000, after graduating college business school, for my mentor, still, whenever I can corner him and buy him lunch, I still take him out maybe once or twice a year if I can get on his calendar. But I’ve been working for him for a long time, or, you know, five years or so. And when the cracks started forming. Bottom line, a lot of bad things happened. I was a young, arrogant kid with a fancy business school degree that thought I knew everything in real estate thought it was easy. It was sort of a hey, you just build it and people come and buy it from you sort of mentality and was
John Corcoran 4:11
your mentor were they doing something similar buying or building or acquiring multifamily is apartment buildings.
Ivan Barratt 4:18
So my my mentor is a what we would call a boutique residential developer. So he’s done everything from multifamily to land development, very, very experienced long track record in entitlements or zoning. So buying, buying acquiring land, figuring out what the highest and best uses for it and developing a project in hopes that one day you can sell it. So he had all kinds of things going on here in Indianapolis. And for him, you know, he’s a very conservative guy. And so he was able to go through that great recession relatively unscathed, didn’t make didn’t make a lot of money, but was very good at turning down deals. We need another guy on his team, you know, young in our 20s, we didn’t see a deal that we didn’t like, right? Yeah. He was turning, turning down deals left and right. But many of the subdivisions and in developments that we had in our pipeline, basically went back to the bank in workout. Wow. So he didn’t make a lot of money. But he didn’t he didn’t lose it either. He didn’t have other people’s equity at stake.
John Corcoran 5:30
But for you, was it more observing others in the industry that were going under that was so traumatic, since you’re the mentor you are working for, you know, survived relatively unscathed?
Ivan Barratt 5:42
Yeah, a lot of observation would happen to other people, losing businesses, losing marriages, losing homes, people that were way out over their skis, you know, Warren Buffett would say you don’t see his swimming naked until the tide rolls back. Lots of people swimming naked. And you know, myself included, I had a small percentage low man on the totem pole of a couple 100 million development deals that I would be paid out on as they succeeded. And, and as a early, you know, to mid 20s, now, real estate cowboy, I started taking on big, private personal loans to finance my lifestyle in my 20s. Because surely, my development deals are gonna work out I would just write it off later,
John Corcoran 6:31
right. A lot of people saw signing personal guarantees during that time period that they didn’t even realize it was in the final Yeah,
Ivan Barratt 6:39
yeah. So you know, all these things basically went poof, everything went off a cliff. All these these fancy deals with poof, but the debt that I had personally was still there. So I’m negative net worth, I’m negative cashflow. I don’t I didn’t have any assets. I just had real estate that I was betting on the column that that I would be able to basically flip, right? Yeah. And so I got a very large slice of humble pie. And at the same time, I’m trying to convince my my now wife of, Gosh, 12 years, I’m trying to convince her to marry me that I’m a good prospect. And and that was that was one of the lowest points in my career. At the same time, we made a decision. I don’t talk about this a lot. But I actually started delivering pizzas. 45 minutes from my house, so that nobody would recognize me, just to get some cash coming in the door, we’re buying shoes at Walmart. That was the bottom of the bottom very humbling experience as I started my company and started to basically crawl out of the hole that I’d put myself in. Wow. And that, like I said, that forever altered my DNA. The time I saw what large apartment companies were doing, how they were able to manage risk through the that sorts of debt that they had the government mandates to provide affordable housing. So they weren’t they weren’t getting the calls from lenders, hey, we’re calling your loan. And that’s what really killed a lot of real estate investors was the the lending market for drying up much real estate most real estate completely froze. Yeah. So the same time I saw this, you know, this going on, it really ended up being John, the single greatest gift of my entrepreneurial career.
John Corcoran 8:42
Why do you say that
Ivan Barratt 8:44
age? Why do you say that, um, you know, born out of born out of those mistakes I made, were these valuable lessons that I received as far as how to look at real estate how to how to value it, pursuing cash flow before pursuing, you know, potential appreciation, capital gains, and upside and really strengthening my thesis that the, the most anti fragile, the best, what we call risk adjusted return, meaning the lowest amount of risk in real estate is the acquisition of apartment projects. Still gotta still gotta execute. Well, it’s not easy, but it’s pretty simple of all the real estate classes. At least for us, we feel it’s the best risk versus reward. Yeah, model that you can that you can pursue.
John Corcoran 9:37
You think that if you hadn’t been through the 08 09 meltdown that you would have pursued other asset
Ivan Barratt 9:43
classes? Oh, shit, man. I would have been I would have been run over. I mean, if I if if what had happened hadn’t happened for another 10 years. My own you know, bubble just would have been bigger when it popped. I would have been the guy with the fancy cars in the driveway, the house on the lake, you know, living level, living high on the hog. Right? Yeah, um, because I didn’t know any better than I thought this is just how it was done.
John Corcoran 10:14
Right, right. So you, you end up going out of your own starting your own company in 2010, which is a fascinating time to start a real estate company in real estate, considering the market, you know, had been going downward for, I guess, a couple years at that point. Yeah, it hadn’t quite turned back upwards. Again. On the other hand, you know, real estate would values were down during that period of time. So in retrospect, looking back, was that a good time to start a company? I’m sure a lot of people at the time were like, You’re crazy. Starting a company, a real estate company now? See nuts?
Ivan Barratt 10:49
Oh, yeah, I was. I was told I was crazy. What I can’t believe you’re buying in that area are you’re buying real estate right now? Like, what are you thinking? I mean, I remember being at a cocktail party and somebody asking me what I did. And I said, I’m in I’m in real estate, and they kind of were like, Oh, I’m so sorry to hear that. And, you know, I don’t look in the rearview mirror, John. But if I had a time machine, I would have bought everything I could have gotten my hands on at the time.
John Corcoran 11:17
Yeah, cuz the values are just so depressed. I guess at that time. Yeah, it
Ivan Barratt 11:21
was it was very depressed. Now money was harder to find at that time, but but values were quite depressed.
John Corcoran 11:27
Yeah. And you also had a lot of personal debt when you started your company. Talk a little bit about how that affected things?
Ivan Barratt 11:33
Oh, yeah. I mean, I’m lucky my wife had a pretty good paying job. So she she helped take on, you know, we lived in a small house, we didn’t have really kids yet. So we were very budget conscious. But we, you know, we bought a course on the fastest way to smartest way to pay down debt. And from my earlier, real estate transactions and small victories, I would just make make these chunks out of the debt, restructuring it, paying it down as fast as I could now today, you know, a lot more a lot more debt. But thankfully, it’s all good death these days. Yeah.
John Corcoran 12:12
Now, when you grew up, you were kind of in a in a family of entrepreneurs, your dad was a solopreneur, solo practitioner, blah, Y’all said rental properties. You had an uncle also that was really influential on you didn’t finish high school, but had had bought up gas stations, talk a little bit about the influence. And your mom also talk a little bit about the influence that that had on you.
Ivan Barratt 12:37
Yes, and another uncle that was a realtor that owned apartments as well. But so I had to two uncles that were entrepreneurs in one way or another, my dad had his own law practice and on rental properties on the side, mom, interior designer marching to the beat of her own drum. So I had these influences about sort of going your own way and blazing your own path versus going to work for someone else. When Rich Dad Poor Dad came out, I think my dad bought me five copies of a book that can give some of your friends very, very lucky and blessed from that standpoint, to have some of those earlier influences because, for me, real estate always made sense. And I always wanted to own a large company that fires always been in my belly. The back in time, I really didn’t know which way would go in real estate whether at one point I thought I would build like high end resorts and hotels, another time, I wanted to own all different kinds of real estate, retail and industrial office, it really was up to leading up to going through the Great Recession, that really crystallized the the tremendous value in the minimal amount of risk that one needs to take to build a large portfolio of apartments. And so I really zeroed in on that.
John Corcoran 14:05
And eventually, you realize that, you know, it’s helpful to zero in on one skill set, right, you know, or or one knowledge base, you know how to do an apartment building, you can do it again and again and again. And again.
Ivan Barratt 14:20
Yeah, you took the words right out of my mouth, John, you know, somewhere in these books behind you, is a theme that comes up a lot. It’s a lot of these success stories in business are people that pursued one formula and pursued it vigorously, trying to do one thing really, really well. versus trying to do multiple, multiple things. Yeah. being scattered in that way.
John Corcoran 14:47
Yeah. Talk a little bit about the impact that you mentioned EO earlier and YPO, which you’ve been a member of. Talk a little bit about the impact that that’s had for you being a part of forum Which I’m sure everyone who listens to this podcast has heard me talk about it before, but it’s a small group of appears in other companies you get together with on a monthly basis to pass through your challenges, but talk about the impact that that had for you.
Ivan Barratt 15:15
So, you know, Think and Grow Rich calls it the mastermind, EO calls it forum YPO calls it forum. For me, it’s been, I mean, if we could if we could really pin down some of the some of the the top five or top 10 Things that have had the most impact on my growth as an entrepreneur. And as a person. AEO is easily in the top five, if not, if not a little bit higher. So, you know, I talked a little bit about this. Going into EEO, you got to qualify with a million in revenue. And I think it was maybe six years ago now maybe going closer to seven. But I had just gotten over that hump. I wanted to join you, I heard how great it was. And at the time, I didn’t really know how I was going to work any harder. And as I told you, I’m working as hard as I can, I’m only making revenue a little over a million year back not profit. No, not profit free. Right.
John Corcoran 16:18
Right. Reminds me of first time I told my mom about EO, I was explaining the qualification criteria. And I said it’s a million dollars. And she said, you make a million dollars. No, no mom, oh, boy, don’t make a million dollars.
Ivan Barratt 16:36
But, but long story short, getting into EO and being around other entrepreneurs. And then also, that was when I was first deciding that I needed to coach my life as a sort of a counterbalance to the forum concept. And that’s when I met Scott, who’s been an integral part of my, my coaching team, all these many years. And I’ve added other coaches since those two things being in that mastermind, being in that forum. And then having coaches in areas where I want improvement from, of course, business, but my marriage, right being a good dad, being physically fit, nutrition, spiritual, being spiritually fit, however, that whatever that means to the individual, all those things, all those areas of my life, I now have a coach in, and I’m in a few different forums or masterminds. Both those things are freaking rocket fuel to my growth as an entrepreneur, which enabled me to grow a larger company that to evolve from being a solopreneur to owning a small business, and then to scaling, you know, with with our sights on being a big company. Yeah.
John Corcoran 17:48
Also talk about, you know, right now, one of the big struggles that businesses are dealing with is attracting good people, putting it in the right seats on the bus, as Jim Collins would say, What have things been like for you in terms of the labor market and recruiting good people to work for you?
Ivan Barratt 18:07
Yeah, I’d be lying. If I said it’s not a little bit tougher than it used to be. Yeah, we’ve certainly had to pay up for the right people. But I figured out something a long time ago that if you paid a little bit more for for someone who, you know, if you pay what somebody thinks they’re worth, you’re typically going to get somebody who’s going to do a better job. Stick around for a while, and, and maybe maybe be a good influence on others who, you know, may come to work alongside. The reason it’s not so hard these days for us is because we’ve been really focused on culture since the beginning. It was a dream of mine, early on to have a management company, a real estate company that people would want to work at, versus a lot of traditional Property Management cultures where, you know, it’s a revolving door, people hate what they do lots of turnover. We found ways to make that more fun and more engaging, and people
John Corcoran 19:07
get like, give me some examples of that. What sorts of things do you do in order to make it more fun and engaging and prove the culture?
Ivan Barratt 19:13
Well, one of our core values is we’re weird, man. We’re silly. We don’t take ourselves too seriously. So we look for other weird, silly people that don’t take themselves too seriously. We’re very lucky. We found, you know, it’s a little bit old hat now, but I found slack through EO back in 2014 by hanging out with a tech entrepreneur. He’s like, what’s this thing you guys are using? And he’s like, Well, this is how I eliminated. You know, 100 emails a day was this thing called slack? And for us, Slack also became this way for people, people that are spread out across four states now that most of our employees John are on site at an apartment community. They’re not in a centralized office. So way before COVID and way before we needed it We found these ways to have fun, give each other shout outs. We call them Bamaversaries instead of anniversaries, BAM babies, we’re all about the BAM fam. Part of our core value is if values are, are growing a family type organization, no matter how big we get. For us, it’s all about employee growth. We say when people grow, BAM grows. And so really, you know, these little tools and tricks are, are secondary to finding some really key people early on, that I overpaid for at the time. Because I’m a fire ready, then a entrepreneur overpaid for at the time, but they were able to pick up that proverbial baton, buy into the dream of the culture, and then and then put their own spin on it, take charge of it, I don’t get the credit for it anymore. It’s the people at the top, who pushed that down into the organization because they believe in it too. And it’s also important to them. For example, you know, we’re not going to change our health care plan to save a few bucks on the bottom line, if it’s going to be this huge disrupter disruptive thing for all all our, our employees. It’s not only about the bottom line for us, it’s about how does it affect how does it affect the management team. We have a lot of investor capital, as you said earlier, we’re over 150 million in equity that we’re charged with stewarding the management team is what makes that all work because apartments are the most management intensive real estate on the planet. That’s why we we can get the big returns. Because we’ve got the management piece figured out. And such a huge part of that is attracting and keeping good quality. Talented people that believe in the cause, believe in the mission are a little weird. Let’s still work hard and play hard. You know,
John Corcoran 22:03
networking is so important, especially as you work your way up the ladder and you grow your business and everything. You know, you’re a kid that came from in your words of middle class family, you had a great upbringing, but middle class, and 150 million in you know, raise funds is pretty phenomenal Any way you slice it. So what have been some of your tips and tricks or resources or the keys behind getting that amount of money and people to trust you?
Ivan Barratt 22:36
Well, let’s let’s let’s use Jim Collins, Jim Collins in the flywheel to frame this up. Right. So this is the way we did it’s much harder in the beginning, because we literally raised capital, one small investor at a time, you know, some checks would be bigger than others. But what we focused on is best we could was that client experience delivering those returns. And what happens is, when you when you deliver on behalf of your client or investor in my case, and they come back for more, and they tell a few friends, the momentum of investor starts building up. And so it’s quite simple. So far, we’re approaching 500 investors, some have 15 million with us and some have 50,000 with us, and everything in between. But one thing we’ve done really well is we have we’ve made happy investors, and happy investors tend to come back for more and they tend to tell their friends. So today our single greatest source of new investors even though we advertise and I get on podcasts and we have all these channels for attracting investors by far the number one channel is current investors that preferring us clients. And what’s funny about that is you know, I’m reading Jeff Bezos’ book right now is the collected writings. I didn’t know this Amazon was a word of mouth business in the beginning for a better word straight from Jeff Bezos man for
John Corcoran 24:10
investors or for people purchasing books on amazon prime real estate
Ivan Barratt 24:13
for people purchasing yeah his customers my customers an investor his customers buying but you know we’re buying writing books on Amazon
John Corcoran 24:21
and Do you do anything any little you know little things like you know if you’re sending a check back to an investor for a successful project Do you do anything special or you know for the higher priority investors who are any little tips along that those lines? Oh, I
Ivan Barratt 24:38
think it’s good you know, to find ways to take care of your investor I think John Ruhlin it giftology has got a really cool thing going. We use we use him. We definitely like to keep in contact with our investors keep a high level of communication so you’re not only calling them when you’re when you’re looking for more capital. Yep. And certainly you know some of those some of those larger investors, you know, make it a little bit more VIP status when it comes to events, or maybe they get some tickets to a game or something like that if they’re in town. Right, right. Um, but I think one thing that really, I want to impress upon any entrepreneurs listening to this, whether you’re in real estate or another company, it’s this is agnostic. If you can treat everyone, like they’re invested with 10 million, even if they just have 50,000, if you can find a way for your team to treat everyone, really, really well. It doesn’t happen overnight. But but it’s, it’s this magical thing. It’s that flywheel and Good to Great, it’s a lot harder to get it started. It takes a while to get it moving. But it’s such a big thing that once you get it moving, it starts gaining its own momentum. And if you stick with it long enough, it becomes this thing that’s almost unstoppable. on its own. And for me as an entrepreneur, that’s that’s the real goal is to create this living, breathing organism that is BAM, that can grow. Without me, it’s almost like my fourth child, John, if I can raise this this organism to make its own decisions and grow on its own, then I can have the life I want the financial freedom I want, without necessarily having to work much harder or even even work at all.
John Corcoran 26:29
Yeah, great advice there. And John Ruhlin, past guests on this show, good friend, he’s a great guy. Definitely recommend everyone, check out that past episode. All right. We’re running a little short on time. But I want to ask you about March of 2020. course that’s when the world shuts down. Yeah, and Demick. And I love to ask people about where your head was at what did what did you experience? What kind of trauma was it like? And also, as you emerge from it, when did you realize that? You know, things were going to be okay.
Ivan Barratt 27:01
Yeah, so, I mean, to frame that up. So it’s, you know, it’s actually February for me in and I follow some smart people. And my wife will thank me for this because I told her in early February, like, Hey, I don’t know what’s gonna happen here. This might not be a big deal, but I need you to go to Costco and get like six months worth of supplies.
John Corcoran 27:19
Now, that’s like, the opposite of my marriage. My wife was coming back from Costco with all these supplies. I’m like, What are you doing? Like, you don’t need all this stuff. It’s, it’s like Ebola, you know, you know, I thought it wasn’t gonna be a big thing.
Ivan Barratt 27:31
Yeah, yeah. So I, you know, we, I didn’t know at the time, I said, Hey, let’s be prepared. I don’t want to be like in Costco lines for days. So like, let’s just stock up on stuff. Um, and then, you know, it hits. And I mean, we’re, you know, our model is supposed to work better in a recession. But we didn’t know at the time. I mean, this is like the greatest correction in recorded history. So I’ve got my CFO modeling out 70% 80% of rent collected, where, where’s our new breakeven, we run this thing called a breakeven analysis, when we buy a new apartment project, it’s like buying a business, right? What Yeah, where does the business breakeven how many people have to be paying rent, for it to break even on a monthly basis, so we’re having him redo all the models. At the same time, I’ve got two assets under contract to buy a hard money down, meaning if I don’t close I, I’ve got to put hard money down at this time. And if I don’t, I’m not gonna be able to do the deal. Or if we, if we get them under contract, and then we don’t, we don’t close, we lose our money, hundreds of 1000s of dollars, my own personal capital, my partners. And so we had to make a pretty big bet. Now, I’m a big reader of Fed policy and financial history. You know, the good, the bad and the ugly. Naomi Prins, wrote a great book called collusion here behind me got another one here, the deficit myths are like reading all the different sides of monetary policy, and what happened in different crises. So we, we’ve made a pretty big bet with our own capital or investor capital, that what would happen would happen would be the Fed would ease they would print more money. They were so afraid of 2008 being a deflationary death spiral. In for all intents purposes, whether you like the Fed or not, they saved our asses in 2008. It could have been much, much worse. And they also realized they didn’t act fast enough. So for us, we said, okay, they’ve got the OA playbook. They don’t want 1929 to start all over again. They’re going to liquefy everything, which thankfully they did. Because we chose to buy those assets. I had a lot of investor phone calls at that time explaining our thesis, and why. Luckily, we had some really good investor loyalty why they should While they should continue to invest, they were supportive. Yeah, when a lot of people were pausing, a lot of people were pausing. A lot of big institutions were coming in and look at deals fly in to look at deals. And so we got this opportunity, we ended up buying some really fantastic assets in, in, in 2020. With these existing
John Corcoran 30:20
apartment buildings or yeah, all
Ivan Barratt 30:23
all existing, that’s typically what we do is we buy existing assets where we, it’s like buying a business that we know we can improve it fix it up. Yeah, yeah, we make it a better business than we sell it in apartments for all you EBITA driven folks out there in apartments on sale right now. It’s anywhere from 17 to 21 times in a lie, which is my EBIT. Ah, hmm. So the multiples are great. Wow. Amazing. Yeah. If you can execute. Yeah. And so yeah, we had to stare the Abyss in the face make a pretty big investment decision. When when the crowd started going the other way, right? Remember, contract said, No, we’re buyers. And we bought assets. And and it worked out very, very well. The renter was pretty much bailed out. What we were buying only when up in demand. We weren’t buying urban apartments, John, we never bought into that. Demographically. We’re buying garden apartments in suburbs, with cool, good school districts, even though people were talking about urbanization prior to COVID.
John Corcoran 31:27
We thought I’d talk talk about that. Yeah, yeah, we thought, well, there’s gonna be a lot of people
Ivan Barratt 31:31
that are entering a chapter in their life, they’re going to start pairing up, they’re going to start moving to safer, safer environments with good schools, and more space. A
John Corcoran 31:41
lot of that. I mean, I know my area, a tonne of that. People moving out outside of the urban areas over the last 18 months. Yeah.
Ivan Barratt 31:47
And so we were buying apartments in there, all the way up to and through COVID. So for us the bets really paid off in a dramatic way to the upside. Our occupancy improved beyond what we what we ever thought we could hit apartments, which were usually targeting 96% occupancy, we were hitting 98. And we’ve been raising rents all the way through COVID. It just ended up being a really, really great recession. For owning income, residential property.
John Corcoran 32:19
Wow. Well, I want to wrap things up with the question I always asked which is, you know, a big fan of gratitude. So if you look around at your your peers and your contemporaries, others in your industry, however you want to define that it could be mentors, it could be, you know, forum mates, could be respect. Who do you admire that’s doing good work these days?
Ivan Barratt 32:39
Well, you know, I’m glad I’ve seen your show and had a little time here to think about it. There’s actually like three people that come to the came to mind right away that when I first heard this question, on another episode, a guy named Jerry Collins, his company, Flaherty, Collins owns, gosh, I think around 15,000 apartments now maybe maybe larger. And he’s just been such a warm, transparent, you know, making time for me, individual, I would call him a mentor, whether he knows it or not been very helpful over the years and in in figuring out how to scale a larger size company, just phenomenal human being. One of my early investors, Jimmy, I won’t say his last name in case he doesn’t want anybody to know. But Jimmy, a very smart private equity guy started investing with me a long time ago. Sometimes the most amazing annoying in your face. Critical investor you could imagine. I mean, his email mannerism, his bedside manner and email is very aggressive. But in sometimes I have to remind my team that we’re literally getting 10s of 1000s of dollars if not more and free consulting from Jimmy because he’s given me some of the best advice in continuous improvement and and being a better providing a better customer experience for our investors. So having that that, that constructive criticism, or
John Corcoran 34:12
squeaky wheels can be painful, but
Ivan Barratt 34:15
hurt when I get it. I’m very thankful. And I tell that to his face if you’re here he’s he’s a great guy and then maybe you’ve come across Don winter DLP phenomenal real estate operator. He is he’s got a really awesome thing going and awesome mastermind I can’t wait to hang out with him some more. He’s, he’s doing well. I’m doing it three times the size I am. And he’s 36 and wow. He is crushing it as a as a man of faith as a husband as a father. And I can’t wait to spend some more time with him. Wow,
John Corcoran 34:54
I love those specific answers really cool. Ivan, this has been great. Where can people I know you have a second funding that you’re launching where can people go learn more about that or learn more about BAM companies?
Ivan Barratt 35:04
Yeah, BAM companies, the BAM companies.com We are closing out our second fund, it’s a great time to check us out if you’re looking to have part of your portfolio in real estate, which is also a good thing if you want to be non correlated to market swings, owning owning real estate in your portfolio, however you go about it, but learn about passive investing. If you’re not educated out there and you want to know more, we’ve got some great educational resources. And we are closing out our second fund. So it’s a really good time to to invest with us at the end of a fundraise, you can see most of the assets that are in the fund and get a really good idea of what you’re buying versus some of the earlier investors and we think of them as vintages like wine and our second fund I think is going to be a very delicious vintage for the investors fan. Thebamcompanies.com
John Corcoran 35:59
gone. Excellent. Ivan, thanks so much.
Ivan Barratt 36:01
Thank you for having me.
thanks for listening to the Top Business Leaders Show powered by Rise25. Visit rise25.com to check out more episodes of the show and to learn more about how you can start your own podcast.