Ep. 204: How to Evaluate Multifamily Sponsors with Spencer Hilligoss

Spencer Hilligoss worked a full-time job in technology so he opted to invest passively in real estate. Starting with a duplex in the Bay Area, then turnkey rentals in the Midwest, before focusing on passive apartment syndications. Spencer managed to work his full-time job and invest passively until he was earning enough from his passive investments to become a full-time real estate investor. Spencer and his wife Jennifer are partners in over 5,000 units, valued at over $600 million. Now, he has launched Madison Investing to help others invest in multifamily.

Key Takeaways:

Exposed to real estate at a young age as his parents were in real estate. Worked open houses as a kid, made him run to the technology field
Quit his technology leadership career right before Covid19 hit and is a passive and active full-time real estate investor
Worked at LendingTree and learned how much investors make on deals piqued his interest in REI
How he found his first rental property in 2016 and pulled a ‘newbie” move that didn’t give him the cashflow he wanted
The importance of underwriting skills

You can build the perfect plan, but success comes down to the operator

Understanding the 3 pillar framework of analyzing a market: Team, market and deal
Why deal analysis should include more analysis about the “who” in the deal
Why Spencer invests in multifamily properties vs. turnkey properties
The best question to ask a sponsor operator to gain valuable insight into their work ethic and business values
Evaluating risk factors in a deal
Spencer answers today’s biggest question: Why should I invest in real estate during COVID19?
The challenges of investing and running 5000+ units

Bullseye Tips

Apparent Failure:

The way we conduct ourselves in business when times are bad, is when your true qualities shine through.

Digital/Mobile Resource:

Syndicated Deal Analyzer

Most Recommended Book:

Rich Dad, Poor Dad by Robert Kiyosaki

Daily Habit:

Calendar blocking

Wish I Knew When I Was Starting Out:

Understanding goal setting on cash flow

Current Curiosity: