Real estate investing can generate massive profits, but it takes a clear strategy before it becomes passive income. Your systems and operations need to be efficient. It’s also critical to avoid reinventing the wheel just because you think you can do something better.

In this episode, John Wappler, President of Evergreen RE LLC, joins us to share his experience building his real estate portfolio and the suite of companies he uses to manage his growing real estate empire. He weighs in on the future of real estate investing and what metrics we should consider when considering property deals in today’s market.

If you want to know how to build a real estate portfolio efficiently, then this episode is for you!

Here are some power takeaways from today’s conversation:

• How John started his real estate journey


• John’s lessons in building his property management and construction businesses to support his real estate portfolio


• Why outsourcing is important


• Future trends in the real estate industry


• What essential metrics to consider when looking at a deal

Episode Highlights:

[06:40 ] Property Management

Evergreen, among other things, manages scattered site single-family portfolios. At first, John did everything solo. But handling the portfolio alone was too much, so he built a management team. Once he creates a business plan for a deal, he and his team execute his vision from there.

[14:45 ] Don’t Reinvent the Wheel

There’s no reason to reinvent the wheel when somebody’s doing it well already. Reach out to experts or outsource to firms that have already built lasting relationships and can get the job done efficiently. What is your time worth?

[16:25 ] Future of Real Estate Investing

Many external factors have affected the multi-family and single-family markets. Despite this, John thinks the market is not that different from normal. He observes that value in real estate still exists, but these opportunities need to be created. The cap rates are still higher than interest rates. If the latter eclipses the former, things might change a little bit.

[25:24 ] Metrics to Look Out For in a Deal

Make sure you trust the sponsor. Dig into their track record and experience. The person running it has to be a good operator for the deal to be successful.

Internal rate of return (IRR) is the best metric as it provides a neutral way to compare one project to another. It’s based on cash inflows and cash outflows. IRR is also independent of time. Looking into the cap rate is also recommended.

Notable Quotes:

[13:10 ] “Putting together the pro forma at the beginning of the deal, everything looks great on paper. It's about hitting the numbers. And, if you can't hit the numbers, then the whole thing was worthless, so you got to figure out a way to keep that on track.”

[17:15 ] “My feel for the market actually is not much different than where we normally are. I still feel like the value that is there needs to be created.”

[31:00 ] “The flexibility, family, all of that, and again, kind of generating that income growth stream off of real estate. Real estate gives you a unique ability to do that as opposed to some other professions.”

Links to Resources:

Evergreen Real Estate Website

Evergreen RE LLC Website and Instagram

John Wappler: LinkedIn