Diving into Real Estate Success with Gib Irons: Stories, Strategies, and Syndications

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Bolling here with Pivot to Prosperity, the podcast brought to you by Pivotal Real Estate Investments, where we help our investors build wealth and income through commercial real estate that improves communities. And today we have Gib Irons with us. And Gibb, thank you for coming.

Thank you, Jenny. Great to be here.

Yeah. I'm going to read your bio and then you can fill in what occurs to you that might not be in it right now. Okay. Gib Irons is an attorney, entrepreneur and real estate investor. He is the founder and CEO of Irons Equity. Gibb is a resident of Greenville, North Carolina. Owns 14 single family condominiums, a commercial building and a short term rental property. And Seaverville. Did I pronounce that right?

It's Sevierville. Kind of like severe weather, but yeah, you're, you're close. It's Sevierville.

Okay. And that's in Tennessee, named Smoky Mountain Masterpiece.

That's it.

Gib is a passive investor in a 660 unit portfolio in Arlington, Texas, 344 unit apartment building in Dallas, a 295 unit property in Fayetteville, Arkansas, and a 666 unit portfolio in Houston, Texas. Gibb is a founding member and general partner in the 10Y organization that is poised to build more than two dozen Class A townhome communities in Phoenix, Arizona over the next decade. In addition to Gibbs real estate investing experience, Gibb is the owner and managing partner of Irons and Irons professional attorneys, or P.A.

Yeah, P.A. is fine.

Okay. Yeah, I forget what it stands for from time to time.

Professional Professional Association, I believe. Yeah.

Okay. A multi million dollar law firm based in North Carolina and established in 2007. Right. What is not in there? Did you, did you catch anything you'd.

Want to add, Jenny? No, I think, I think that's, you know, pretty much a good representation of, of what I've done. But, but yeah, I, I, and I appreciate you having me here, but yeah, I'm an attorney and an entrepreneur and a real estate investor. Just to kind of give you my, my laser talk and, and those are the things that, that I love doing.

So. Do you feel that? Well, so, well, your law, your law practice is not including real estate, right?

No, it's not. That's, that's a great question. So, so my law practice, we do not do any real estate law at all. Now in the past, when I first started practicing law, I actually started out in real estate and I always had an affinity towards real estate. But what I realized is that real estate law, or the kind of real estate law that I was doing at the time was basically loan closings. And so I was going to a bunch of residential loan closings. And it wasn't, you know, it wasn't regulation d, you know, 506 offerings or syndications. It was just your, your, you know, boilerplate real estate, residential real estate closings. And that was just a bunch of paperwork. And I really, I wanted to try my hand in the courtroom and get some exposure to the judges. So. So no, what I do is predominantly I do family law. And my firm also has a personal injury department that is very successful. And then we have an education law department as well. And so I do have, I have some experience in real estate law. But right now I do mostly trial work, mostly civil trial work. A lot of high net worth divorce and automobile accidents.

And so what made you start looking at getting back to real estate?

Yeah, yeah. So, you know, I actually was fishing in a tournament called the Big Rock Blue Marlin Tournament. And the Big Rock is an annual tournament that takes place in June of every year here in, in Morehead City, North Carolina. I live in Greenville. Morehead City is actually have a law office down in Morehead City as well. I have three office locations, but one of my offices is down in Moorhead. And I was fishing in a, in a tournament called the Big Rock Blue Marlin Tournament. And a friend of mine that was on the boat actually started sharing with me how he had accumulated 200 properties and he had bought all these single family condominiums and he paid like 15% down for every unit. He had done some capex or renovations. He had renovated each one of those units and increased the rents and had been able to refinance and get all of his down payment back. All of that, the down payment that he had made, he was able to do a cash out refinance. And basically then he was making money in perpetuity. Right. He had really no money in the deals, but he continued to acquire properties like that. And Jenny, when I got off that boat after surfing, or after surfing, after fishing in this tournament, I really walked off the boat as a different person. And I was really intrigued by what he had shared with me about acquiring all these real estate properties. And what he had broken it down for me as is, he had told me that basically if he got $1,000, if he received $1,000 in rent, property and the properties were paid for, you know, other than some, a few costs like taxes and things that you're going to have, he was basically going to have a net profit of $1,000 per month per unit. And if you have 200 units, that's $200,000 per month, you know, $2.4 million per year. And so I got to thinking, you know, this guy didn't have a lot of education. He had worked as a, he had owned a commercial, like a fish market, you know, commercial fishing, a fish market for many years and, and ran a seafood market. And he had done this with very little money. So I really got to thinking, gosh, if he can do it. Well, he actually told me, said, gibb, if I can do it, then you can do it as well. And so that was what really motivated me. And without jumping too far ahead, just Jenny, I, I went, I got off that boat. That was in June of 2019. And in August of 2019, I started acquiring properties. And I acquired 14 single family properties in 14 months. And so if that shows anything, you know, I'm one of those people that goes from zero to a hundred real quickly. And when I get into something, I'm all in. And so I tend to be a little bit over the top. And I went ahead and bought 14 properties in a, in a period of 14 months following that, that tournament.

Very good. Interesting too, but condominiums for my experience and, and whatnot, I would think. Ooh, depends on where they are and what the fees are, because I live in Florida, where the, the maintenance fees tend to be high. So you, you've done okay with them though, I gather, because you still own some, right?

Yeah, yeah, so. So I still own all 14 of those properties. And I have done okay with lucked out. To be honest with you. I didn't have any kind of education regarding, you know, real estate investing. I just, this was purely a guy that was like a blue collar kind of guy telling me that he did it and, and, and he had, you know, no formal education. And so he was like, if, you know, and he prompted me to go do it. But yes, they, we have actually done pretty well with those, Jenny. They're all located here in Greenville, North Carolina, where I live. And we've got long term tenants in them. They're, they're, you know, almost always a hundred percent occupied. We will have a unit turnover every once in a while, but it'll just be like a single unit. We'll have maybe 30 days where we're turning the unit over and we'll get another tenant in there. But I acquired those properties for $75,000 a piece, you know, on average, and I put about $25,000 into it, into capex or renovations. And so I've got a cost basis of about $100,000 in each one of those 14 properties. And I could sell every single one of those properties today for 175 or more. And so they're cash flowing positive and I could, and I actually make a lot more money if I sold them, you know, today. It would be a great time to sell them. Prices are sky high still on these condos. And, and you're right, the homeowners association fees are, you know, one thing you have to consider with condos. But I have done pretty well on them just based on appreciation and rent growth. And when I bought those condos, most of them were renting for about 8,5900 per month. And now we're getting 1300 for the smaller units and 1500 for the larger units. And that's just in a period of five years. So we've acquired a lot of them in 19 where it's 2024 now that when we're recording this episode, you know, It's April of 2024. And within the past five years they have appreciated so significantly that they've more than doubled in value.

Yeah, that's great. That is, are these two bedroom units?

Almost all of them are two bedrooms. I have one three bedroom unit and I think there are 13 if I'm not mistaken. There's 13 two bedrooms and one three bedroom. And they're all beautiful condos. I mean, we remodeled them. New countertops, new backsplash, stainless steel appliances. You know, we did, we did everything conceivable. New light fixtures, new plumbing fixtures. You know, we changed out everything you could think of. And they're so beautiful that you or I could live there without complaining. Now I don't, I don't want to live in a place that small, candidly. But you know, the finishes are as nice as, as you could hope for. And we've enjoyed the condos, I think. You know, my wife is the real estate professional of our, of our team. And so my wife manages those 14 condos and that was part of what we needed in order for her to be a qualified real estate professional. You know, she needed properties to manage and so we acquired those properties. I managed them the first year and found that it was a lot more work than I anticipated. And then ever since my wife has, has managed those and that's, that goes towards her 750 hours to be a qualified real estate professional.

Yeah. And that helps with the tax deductions. And whatnot, of course, but we're not going to go into that so much because what I want to do is carry that. You tip, you put your toe in the water with those, you learn that you'd rather someone else manage it. And then what, you went commercial or what?

Yeah, yeah, so that's exactly right. Yeah. So my, my wife took over managing those 14 properties. We did acquire a short term rental property that you talked about when you read my, my bio in the introduction. You know, we acquired a, a short term rental property in Sevierville, Tennessee. And that property has cash flowed for us really, really well. I think it's cash flow positive, about $100,000 per year. So we make about $100,000 of net profit from that property every year. Which is, which is not bad, right? Yeah. And so then after that I got into commercial real estate and I started going to a bunch of conferences, you know, and I, I joined Brad Somerock's mastermind. And Brad, you know, and his team taught me underwriting and they taught me deal sourcing and deal analysis and they taught me about asset management. And I began investing as the limited partner in syndications in December of 2022.

And today what you have all those? I just read up.

Really?

So, yes, you've gone fast and furious.

I really have, Jenny. You know, I, I have invested with four different operators on, as a limited partner with four different operators. And I've got properties, you know, as you read off, I've got a lot of stuff in dfw and then I have a property in Rogers, Arkansas near Fayetteville. And I've got, you know, I've got several properties in the DFW area, but those are the two places I've focused. And yeah, it's been really great. As a limited partner, I haven't had to do anything with those properties. I don't have any managerial role over the property. I don't have to worry about. You know, what I did was I vetted the sponsors and decided that these are operators that I want to work with. And then I reviewed the deal itself to make sure that the metrics, you know, aligned with my personal investing goals. And then I basically just placed my capital with those operators. And, and, and now, now my only responsibility is to wait and collect my mailbox money, so to speak, and, you know, let the whole period run its course. So I've been very happy with my investments as a limited partner and, and now I've moved on to being a general partner in a Build to Rent Community that we're doing out in Phoenix, Arizona. So I'm now on the capital raising side and I'm actually raising money from, you know, friends and family and from, and some of my investors are, you know, I've just met recently. They're not even, they're not friends or family or people that I have known for a long period of time. They're people that I have met through my marketing campaigns and, and have come into my network. But, but now I'm, I'm raising capital for this project and just really excited about that.

That's terrific. It is. And, and it, it is different like you say, to go from. Well, first of all, I couldn't have said it better how you describe the limited partners role. First you bet the people, then the property and the plan and make sure there's congruence. And then once you invest, you watch and get that mailbox money. But you of course read the quarterly reports and monitor. But it's just as easy as investing in stocks. If you're putting the same amount in any stocks, you're going to spend that much time to research too. Anyway, so, and, but the thing is this is such a durable asset. Real estate is the end all. There's been, that's been what words have been fought over for generations, centuries. So anyway, I wanted to thank you for that perfect description there for one. But then now go into briefly the Build to Rent. What is, what is that all about? I haven't talked about it, I don't think at all on this show.

Yeah, yeah. So Build to Rent is a, a concept where we are doing ground up construction. So basically it's ground up construction. You know, you're basically acting as the developer and you're coming in and you're buying a piece of land and you're getting the land entitled and handling all the zoning. And then once the land is fully entitled and we have everything taken care of, we then transfer the land into the fund. So we're currently operating in a fund structure and the fund is expected to be, you know, a 10 to 12 year hold period. And we take care of the entitlements, move the land into the fund and then we build a townhouse community on the land. And depending on the size of the land and you know, the location of the land, we may build as few as 60 units. Like we have a couple of townhouse communities in this fund that will be 60 units and then we may have some that could be 300 units or larger. So you know, we're we're building a lot of doors out there in Phoenix. And the way it works is the investors invest with us, you know, just like they would in a value add deal, except it's really not going to cash flow at the very beginning because it's a bill to rent. We're not going to have any cash flow to distribute until the property is fully, you know, until we built the property and we've done the lease up and the stabilization, and then and only then will it start cash flowing. So, you know, build to rent offerings are very attractive to us, Jenny, because we believe there is a higher delta when you build. In other words, you know, it's better to build than it is to buy, is the way I like to tell people. And, you know, when we build it, we're going to have a higher profit margin. And that means that when things happen that are unforeseen circumstances or, you know, negative issues that we have to deal with, we have a little bit more wiggle room there to deal with that. We're not necessarily, we don't want to have really thin profit margins on any kind of a business deal. Right. And so we believe that the profit margins are much thicker and build to rent and we're able to handle unforeseen circumstances a little bit better. But basically we build the property, we lease it, we lease it out, we stabilize it, and then it starts to cash flow. And eventually we will probably sell the asset, but there will be some cash flow during the period of time once we've got it stabilized and before we sell it. But it's more, it's really not a cash flow play. It's really more of an equity multiple play. And so we're telling folks, you know, don't expect a lot of cash flow from this deal and don't go into it thinking that there's going to be cash flow, because there's really not. We're hoping to sell these properties as fast as we can and once we prove proof of rents, we will sell the properties. And therefore the goal is to have equity growth. You know, like, we want to consider this as a equity multiplier, like a long term wealth equity multiplier, as opposed to a cash flow play. So it's a little bit different. But just like you said with stocks, you know, you, you use the stock analogy, and I really like that analogy. You know, you want to have a diversification within your stock portfolio. I think it's nice to have some diversification within your real estate portfolio too. So I'm Encouraging folks, you know, do some value add deals, do some BTR deals and maybe even look at some of the other asset classes within real estate like you know, mobile home parks or self storage. There's just a lot of different opportunities out there and I like to encourage my investors to, to have some diversification even within their real estate holdings.

Yeah, exactly. I would say the same. And I, I can vouch for the fact that the, the margin, the profit margins on new construction have always been understood and known. I was an appraiser in the 80s. You know, we've always known there's more risk. So it's up to the team and how they can recognize when it's coming, contain it, manage it and the rest of it. Just like what you're saying. And, and it's, it, it is a rewarding way to invest certainly especially if you don't need that cash flow. And as it is with the value add, the cash flow is not the big thing as unless you invest enough, it's more the bump right in the middle of the end. So I think that yeah, there's plenty of ways to look at it and for diversification alone, that's a biggie. And as you know, diversification can also be addressed geographically and otherwise too. But so yours are townhome communities and I love that because I think that that's the ideal especially for the Gen X, Gen Z, all the rest of them, because at least you can have some privacy. You can have. Well, are you doing options? Are these strictly rental? Are you doing any kind of lease option play on that too or.

No, no, they're, they're strictly rental right now. But you're right in that in terms of our exit strategy, we've got multiple options, right. We could sell off the townhomes individually to individual buyers. You know, we're going to sell this town home to this person and this townhome to this other person. Our, our plan A, our, a plan A is to sell the entire townhouse community to about, to one specific buyer or something.

Probably would love them.

Sure. That we continue renting the property, you know, in the same way that we're doing it. But a different exit strategy which is always good to have multiple contingencies would be to sell them off one at a time. And so I think with townhouse communities you do have multiple exit strategies, which is attractive. And Jenny, these properties are, are beautiful class A properties with very, very nice finishes. I mean very high end luxury finishes. There are three bedrooms, two baths or two and a half baths. Rather, and we're also in. A lot of these properties are going to have two car garages, which if you look at the inventory in Phoenix, Arizona right now, there's not a ton of new townhouse communities out there. Like most of the time you're competing against older properties. But even on top of that, another cherry on top is these two car garages. A lot of times you're charged extra for a garage. And it, this is all included within the rent analysis that we've prepared in our, our pro forma, you know, reflects basically renting out the property with a two car garage. That would come standard. And so that's great. I've been out. Yeah, yeah, it's really, it's really helpful. I think. I've been out there to Phoenix four times within the past 12 months because I like to get my hands on the project. I like to go down there and meet the lead sponsor and spend time with him and get updates. And I want to know, I want to know enough that if my investors call, I can give them a really solid update. And so I've been out there four times and I have actually gone to all the properties nearby. You know, the, the, the land that we've located. You know, I've gone and looked at all the nearby properties and I've gotten the rent sheets for those properties. And so I actually have visited those properties, I have asked them for their rent sheets. I have looked at, you know, what the comps are, you know, and really done my own due diligence. Like some people don't do that for me. If I'm going to invest in an opportunity, I want to fly out there, I want to drive to the competitors and say, okay, this is our competition. I'm going to go inside the leasing office and I'm going to get a rent sheet and I'm going to compare, you know, make sure I'm comparing apples to apples and really see. And what I found was that our rents and our underwriting were very conservative and that we probably can demand a much higher rent because we were underwriting at rents that were less than these older properties, which, you know, or 10, 15 years old. And so clearly we can demand more for a superior product. But I like having very conservative underwriting and I like being going out there and looking at it myself because, you know, the sponsor can tell me whatever he wants to tell me, but it sure does make me feel a lot better to go out there and see it for myself.

Yeah, that's, that's how I am too. And I check out all the comps and all that myself. And, and when we're raising capital, that's. That's the way I see it. It's critical that we do that. We need to be sure that there's a real knowledge of what's going on and whatnot. But hey, I see that it's at three now, so I'm going to have to ask you the key questions here so we can get going.

Sure.

I don't want to go over time here much as I ask everybody, I'd like to pose to you. Is there a pivotal person or event that you can think of that's made a huge difference in your life?

Yeah. You know, I'm going to go back to that, that little story that I shared with you earlier, you know, at the Big Rock Blue Marlin tournament. You know, really, when I look back on it, that was such a pivotal moment for me. You know, we did not catch any fish. We fished for four days with zero luck. I mean, we were trolling the Atlantic Ocean and did not get a bite. And that could be perceived as a very disappointing event in that, you know, you spent all this money on this fishing tournament. It's like a $50,000 entry fee to participate in this tournament, by the way. I didn't mention that, but we're fishing on multi million dollar boats, $50,000 entry fee. It's a big deal. Okay. This is not your mom and pop fishing tournament. But, but you know, the gentleman that I spoke with on that boat, that information that he gave me really changed the trajectory of my life. And it was funny because we were just fishing together. And so I took time away from work to go fishing. And because of that, I learned from somebody that had a ton of knowledge. And so I think, you know, one lesson that I learned is you can learn from anybody, you know, whether they're above you or below you in certain things, whether that their background is similar to yours or diverse. You know, I always like to think I can learn from anybody. And this guy really had it going on when it came to real estate. And I'm so, so pleased that he shared with me what he did, because ever since then, you know, it's been five years now, and I just, I love real estate. I love what I'm doing with real estate. And that was a pretty big demarcation point in my investing career and just the trajectory of my life.

All right, so do you want to do a shout out and say his name?

Yeah. Yeah. So the guy's Name is Ashley Blue, and Ashley lives here in eastern North Carolina and has been one of my mentors that brought me into apartment investing. But we were doing it one door at a time. It was just a lot different than what I do now. But, yes, I'd like to give him a shout out and, you know, great guy, Brilliant, brilliant guy with just a ton of tenacity. And, you know, to me, I remember him also telling me about how much debt he had. And I remember him saying it like he was bragging. You know, he was like, GIB, I have $15 million of debt. You know, And I remember thinking, oh, that's horrible. But he was like, but let me tell you why it's a good thing, because look at all these properties I've acquired and I've got equity in all of them. And so, you know, I think it also changed my perspective on debt, that debt can be a good thing at times, which is similar to the Robert Kiyosaki rich dad, poor dad paradigm shift that you learn from reading Robert's book.

Right?

Yeah. Yeah.

Well, that's great. That is. And so we'll do a shout out for him. And I. Well, I'd like you to say how to reach YouTube, because we'll be putting that into the show notes. And so go ahead. Why don't you remember, some people won't see the YouTube. They'll just hear it on Spotify or itunes or something. So spell out anything you feel you need to.

Yeah, yeah, sure. So anybody that wants to get a hold of me, the easiest way to reach me is to go to my website@ironsequity.com. that's Iron I R O N S E Q U I T Y irons equity dot com. And I'll be happy to talk to anybody, whether they're interested in real estate investing or just have a general question. I love, you know, talking with folks, sharing any. Any knowledge or resources that I can and, you know, would be happy to speak with anybody that wants to connect.

And he's on LinkedIn, and I'll have that in the show notes as well. And I thank you very much for coming on the show.

Yeah, thank you, Jenny. I enjoyed it. It's been my pleasure.

Yes, we need to keep talking, too. We'll definitely need to discuss some of the Dallas Fort Worth things in particular.

Sounds great.

Thank you again. Take care.

All right, thank.

You.