Leveraging Strategic Relationships

The Wealthy Apartment Investor Podcast

Leveraging Strategic Relationships

Tanner Bickelhaupt, CEO and Founder of the Tanbic Company

Growing a Business Outward, Not Upward

(1:24) – When first bringing an attorney onto Bickelhaupt’s team, he says he considered things like deal structures and experience. Tanbic’s attorney and CPA, as well as his management team all contribute something specific. He says outsourcing things on the operations side has been more affordable and has lead to better sharing of ideas.

“You can have a really big team by having relationships where they’re on the payroll but we’re only paying for what we’re using specifically. Attorneys are very expensive, CPAs are very expensive, and it’s just trying to be as efficient with the dollars as possible. That all flows back to the investor anyway,” said Bickelhaupt.

(3:16) – Patrick Antrim, CEO of Multifamily Leadership, brings up that growth isn’t about headcount; business growth can be seen through cash flow or through other results.

“The biggest competitive advantage is that it allows everyone to do what they’re good at,” said Bickelhaupt. “So I’m not focused on the legal or on the operating side because we can scale up and add 5,000 units in a week with a back-end office, or we could scale down and the company maintains the same level of margin. That means that all of our fair housing is already in place there, so we’re not focused on that… We get to focus on what we like to do, and that’s working with our managers, leasing apartments. And I think that our managers now, even though their job scope is perhaps a little bit bigger, it allows them to be a little more hyper-focused most of the time on what’s important, and that’s leasing apartments.”

(5:30) – “Do you see benefit in hiring the ‘who’ that knows the ‘how’ versus trying to become the expert,” asked Antrim.

“That’s the only way you can buy experience, is to partner,” answered Bickelhaupt. He says that’s true even at the broker level. He explains, the broker that gets the listing will usually remain loyal to the seller, since that’s where the broker gets paid.

Antrim points out that those brokers can give you intel beyond what an internal team can provide.

How Long Does It Take to Develop Those Relationships?

(7:30) – Building relationships is tough; everyone is busy. The length of time it takes to form them depends on size.

“If someone just says, ‘I want to do an apartment syndication and buy 200 units, Class B or Class A right now in Phoenix,’ it’s going to be really hard to get a broker’s attention if he doesn’t already know you. They have a plethora of buyers. It’s a seller’s market right now. But if you’re new and you want to buy 20 units, there’s brokers out there that specialize in that. So it’s just understanding what you want to do and what your capabilities are,” said Bickelhaupt.

Establishing credibility could help you with the lender. But keep in mind, the broker has probably already seen the deal you’re approaching about, and has already chosen to pass.

“When I first got started, that was the difficult, uneasy feeling of, ‘Why am I seeing this?’ Because the broker is going to be loyal to the customer that’s bought a lot of deals from him, rightfully so,” said Bickelhaupt. “So it’s just more work, and it takes more time.”