Interview with Matt Lefebvre of Elm Grove Companies

Meet Matt Lefebvre –  a rising star in the Manchester / Southern NH real estate world, and at one point the youngest agent in the entire state.

Matt helped me find my first multifamily property – a 6 unit building in Manchester. As an agent for Elm Grove Realty, Matt specializes in representing buyers of investment properties as well as tenants seeking retail, office, or industrial space for their business. He’s in charge of all commercial leasing for Elm Grove Companies and is the Vice President of the New Hampshire Real Estate Investors Association.  Elm Grove continues to be a great partner for us, managing our 6 unit building and providing strategic advice and deal flow.

Below, Matt discusses a variety of topics with us – from foregoing college and pursuing a career in real estate, to his opinion on what makes Manchester a strong market for multifamily investment properties.

On becoming an agent at an early age and foregoing college to pursue a career in real estate

I became interested in real estate at an early age from the books I was reading. First I was just reading general business books, and then I started reading business books that talked about real estate, which then turned into reading real estate specific books.

My parents had always been very supportive of me and put a big focus on my education. They always wanted to make sure that I was in a good school and was learning, and they felt that it was important to be flexible with how exactly that worked. So, in my sophomore year of high school I made the decision to get out of a traditional brick and mortar school and instead started doing online curriculum to finish up the few remaining credits that I needed to graduate. Then the plan was to get involved with internships to do some hands-on learning and try out different professions before applying to college.

So I got an internship with Keller Williams Realty, where I shadowed a few agents and went through their training programs. I learned a lot throughout that process, and my plan was to keep interning at different real estate companies for a while. Eventually, I wanted to apply to the University of Pennsylvania because they had a phenomenal international business program with a real estate concentration – which is what interested me the most at the time.

But after sticking around for a few months at KW, I decided to get a real estate license and try out brokering real estate for real. So I decided to take what I thought would be a gap year from college – which isn’t too uncommon. My parents were supportive of me being able to do that, because it would allow for me to make some money and gain more professional experience before starting school. Three days after graduating from high school, when I turned 18, l officially got my real estate license.

Eventually it just worked out so well for me and I was so passionate about it that I decided college was not the right choice for me. I’d learned so much with on the job training and decided that I didn’t need to spend all this time in the classroom where I’m going to be bored out of my skull for 90% of the material and only maybe find 10% that’s going to be really relevant / interesting to me.

So I decided to stick with making a living in the real estate industry before I really had any other thoughts about getting back into the higher education world. It was “well I’m going to go to college” and then it was “well maybe I’m not going to go to college immediately, I’m going to try to things first and then go to college” and then it was, “nope I cannot go to college at this point, after working for full time for a year it’s just going to happen.”

If you actually look back at my post ~ 4 years ago on biggerpockets.com, I asked the forums about going to college versus going to work full time, and if a degree was worth four years and hundreds of thousands of dollars. The advice that people gave me on that post helped solidify my decision, because it was predominantly people saying – “you should go out and try something and if you like it, you like it.”

On why he gravitated towards real estate instead of other types of businesses

When I started learning about business and entrepreneurship, nothing really jumped out at me in terms of a product that I could create a business around or a service that I could offer that was unique. When I started learning about this concept of building wealth through real estate investments, that seemed like the perfect way to get involved in business.

At the time I was a 15 year old kid who had maybe 100 bucks to his name, so I couldn’t exactly go buy a building. I figured if I can’t buy them myself, then I’m going to sell them to people who can buy them and build up cash until I can do it myself.

On what new multifamily investors should look for in an agent / broker

The first thing you should look for when evaluating a real estate broker is if their experience and knowledge matches your investment goals. My guess is that 90% of the real estate brokers in the country are are strictly focused on residential sales and leasing to owner occupants. They might sell a duplex every couple of years, but they aren’t going to be an expert on multi-family investments. If buying single families or small multi-families (4 units and under) is your strategy, then these retail agents can be a great asset. However, if you’re looking for larger multifamily properties you want to engage the services of a more commercial based agent that understands how commercial real estate sales work.

Especially if you’re looking for a larger multifamily property, a broker should be good with running numbers. I’m using spreadsheets in my business every day. As you deal with larger properties — it becomes less about the total dollars that go into your pocket every month and more about the percentage of those dollars that go into your pocket based on how much money came out of your pocket in the beginning. So as a new investor, you want to make sure that you are working with someone that can help you effectively analyze the financials of a deal.

They should also have experience with evaluating property condition, be able to give a rough baseline of repair estimates and speak to the property condition with respect to the neighborhood.

Some good questions to ask a prospective broker could be asking about what kind of analyses they run on properties, asking about what kind of sales they’ve done in a particular area etc. Those are all important factors that should be considered when looking into what kind of broker you want to work with.

On how brokers allocate their time and energy to clients

It might be a bit of a general generalization, but if a real estate broker is prospecting, he’s talking with people that are selling their buildings. If this particular broker comes across a property that is going to be coming up for sale, if it’s a sizable deal then it’s going to weed out a lot of the smaller investors out there. Your first goal as a broker is going to be to make the sale as smooth as possible. That means the broker wants to bring in a buyer that has a track record of performing on these types of transactions. They know what their numbers are, they know the area, and they know in the beginning if it’s going to work or if it’s not going to work out. The broker wants to look good in front of their seller and as such they’re going to make sure that the first person that they call when they have a property for sale is going to be somebody that they know can perform.

So if you are looking to work with a real estate broker for the first time I would say the most important thing to come to the table with is a plan and knowing what you’re looking for. Having the capital to close is an important factor as well – either your own or with identified and committed partners.

When you have an initial meeting with your broker, you should be able to communicate what type of return you’re looking for, how much capital you have / have access to, what your risk tolerance is etc.. Do you want to buy a property this turnkey or do you want to buy something that has a little bit of hair on it? The more you have your criteria nailed down the more the broker can help you pinpoint properties that meet that criteria.

On how a new agent should decide what brokerage to work with

When I was at KW, I worked on a team that did a lot of business in the residential, owner occupant space. I learned very quickly that it wasn’t for me. While it’s fulfilling to help people find a home, I really didn’t like the endless discussions where people would walk away because they didn’t like the flooring or the bedroom paint color. Working with investors who understand that they might have invest some money upfront to get a better return on their investment down the road was more appealing to me. That’s a more difficult conversation with someone shopping for a home that they’re going to live in. You can explain to them that it would only take a small investment to remedy a lot of the things they have issues with, but ultimately that could kill a lot more deals than I could help them out with.

So dealing with people who were much more dollars and cents minded, people who were very analytical in the way that they looked at properties, really suited itself better to me and what kind of business I wanted to get into. You can only sell the same home so many times before it gets boring, whereas in the commercial real estate world the sky’s the limit. And there are never two deals that are going to be the exact same.

So that was the primary motivation for me landing at a company like Elm Grove. It was just it was just a fantastic opportunity. They’re a local, tight knit brokerage, and they have a huge impact in the multifamily market here in Manchester, New Hampshire and around the state in general. They do property management, they work on their own acquisitions, they have a construction company, and they have a very strong maintenance team etc. It’s just lends itself very well to somebody who deals with real estate investors a lot and wants to focus more on that type of clientele. Working for a company or an umbrella of companies that does all those things already, it was just a match made in heaven for someone like me.

For a new agent, especially if you’re on the commercial side, I think the biggest factor to consider is what you can get in terms of training and education. In the long run that’s going to set you up for success. A lot of new agents make their decision based on their commission split, but I think you really need to prioritize your training and education first and foremost. You’ll do more business over the long run. Each person has their preference if they want to deal with a small local firm or a giant like Cushman and Wakefield or CBRE, but that’s going to boil down to personal preference. Again, the most important thing that you can look for right out of the gate is the training and the education that the brokerage can provide.

On developing a personal brand

The core of my approach to developing a personal brand is knowing what my target market is and then being where those people are at. If you’re involved with multifamily, joining a local Real Estate Investors Association is a great opportunity to network with those people. If you’re interested in large scale commercial property management then looking into an organization like IREM which is the Institution of Real Estate Management will allow you to network with other owners other managers that deal specifically with those types of things. So I would say priority #1 is to go where your clients are and go where you can hopefully learn something as well and further your industry education. I think face to face networking is going to beat cold calling every single time.

Second to that is building a consistent brand and persona around your business. My online presence is very consistent across the board with what I’m looking to do. I have the same professional profile picture for every single account that I work off of, which might seem like a small thing but if you have one that was taken four years ago one picture taken six months ago, for someone who has a young face like me in general, I look like a completely different person.

But having a consistent brand online is another important thing too. If you’re focused on making investors a return on their money then make sure that that’s cited in every professional profile that you have. If your focus is helping businesses find retail locations for their business or if your focus is working with office users who are expanding / moving around their business, then make sure that your tagline supports that specific function.

On why Manchester NH is a strong market for multifamily investments

When you’re dealing with an area like Manchester New Hampshire or southern New Hampshire in general, you have a very unique situation compared to a lot of other states and a lot of other municipalities. You’re dealing with an area that has a very low rental vacancy rate comparatively across the national average. In New Hampshire it’s much lower than say somewhere like Oklahoma or Washington state. I believe we carry a ~2% residential vacancy rate across the state in New Hampshire based on an article I recently read.

Other nearby states – Massachusetts, Connecticut, Rhode Island, southern New York – prices are just incredibly high in comparison to what you’re getting in Manchester. I was at a course a couple of weeks ago and talking to other brokers in New York City, New Jersey, Long Island areas and they were talking about what kind of cap rates they were seeing out there for multi-family buildings. And when I told them we’re seeing 6-8% cap rates for a lot of these properties, they’re saying “oh my God what? In New York City, if you get a 3 percent cap rate you’re lucky.”

So, with Manchester you’re dealing with a market that’s very affordable for investors, the properties produce strong cash flow with consistent rent growth and low vacancy rates. And you’re in a pretty good state that you is favorable to businesses and balanced in terms on tenant / landlord regulations. In general, Manchester is a very balanced place to be and I think it’s a really good market for multifamily investment.

Connect with Matt:

E:  mlefebvre@elmgroverealty.com

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