Robert Martinez has been a successful real estate investor for more than a decade. But he made headlines recently when MF1 Capital foreclosed on one of his Houston properties.
So, how did it happen? What factors contributed to Robert losing the first deal of his career?
Robert is the visionary syndicator behind Rockstar Capital, a multifamily investing firm with a portfolio of 21 apartment communities encompassing 3,762 rental units.
In 10 years, Robert has led the underwriting, acquisition and management of 30 multifamily properties, and he is the only two-time National Apartment Association Independent Rental Owner of the Year.
On this episode of Financial Freedom with Real Estate, Robert describes the perfect storm that led to his first foreclosure, discussing how the Fed rate hikes impacted his business.
Robert explains why hiring a third-party management company for help backfired and shares what he did to try and save the deal—and why it didn’t work.
Listen in to understand how Robert benefited from being transparent with investors and learn what he is doing to regain their trust before he expands the Rockstar portfolio.
Key Takeaways
How Robert got into real estate investing
- Didn’t have control of financial future in corporate sales
- Fell in love with multifamily at Del Walmsley event
- Partnered with GP to build 2,000-unit portfolio in 4 years
The challenges Robert faced in his business recently
- Unexpected Fed rate hikes (11 consecutive)
- Expenses ballooned with hire of third-party management
- Rising costs of taxes and insurance
Why Robert stopped self-managing his portfolio
- Gave others too much authority and culture changed
- Thought experienced large company could help
What factors contributed to Robert’s first foreclosure
- Aggressive underwriting, closed day before first rate hike
- Unit walks failed to identify Airbnbs (70 of 280 units)
- Insurance went from $700 to $1,600 per door
What Robert did to try and save the deal from foreclosure
- Hired workout specialist but several proposals rejected
- Put $850,000 of own money into deal
- Raised $4.5M from investors in emergency calls
Why Robert eventually bailed on the deal
- Lender asked him to return to third-party management
- Knew he needed to self-manage to execute plan
How Robert benefited from being transparent with investors
- Increased communication as soon as deal in trouble
- Shows character to be honest
Why Robert isn’t looking for new deals right now
- Focused on replacement reserves on existing properties
- Rebuilding management company
- Regain investors’ trust, resume distributions first
Connect with Robert Martinez
Connect with Michael Blank
Apartment Investor Network Facebook Group
Email [email protected]
Resources
Explore Michael’s Mentoring Program
Join the Nighthawk Equity Investor Club
Schedule a Call with Michael’s Team
Review the Podcast on Apple Podcasts
Financial Freedom with Real Estate Investing by Michael Blank
‘Multifamily Distress: MF1 to Foreclose on Rockstar Capital Complex’ in The Real Deal
