Ep 16: Knowing a Bad Egg When You See One with Annie Dickerson and Julie Lam
We were happy to get a chance to speak to Annie Dickerson and Julie Lam from Goodegg Investments on the show today. Goodegg connects investors to syndicators by acting as a go-between, focussing specifically on value-add class B multifamily assets, having completed 23 deals over the last few years. As busy working moms, passive investing made a lot of sense to Annie and Julie. Bringing people like them into these benefits was the impetus behind Goodegg. They get into the challenges of moving from passive investing into syndication itself and the merits of investing in multifamily despite a slouch in recent returns. One of the main topics for today is how Goodegg goes about looking for new deals and they let us in on the fact that finding a good team is their top priority.
We also speak more about how Goodegg helps to educate their new investors and some of the main questions they get asked. People are always interested in knowing when they will get their money back and also have many trust issues, which is understandable in a climate with so many Ponzi schemes and glossy investment decks. We also hear more about how Goodegg sees its role concerning the operators and the investors they work with, and how they vet their new partners to make sure that they remain trustworthy and always deliver the best!
Key Points From This Episode:
Julie and Annie’s journey with passive investing leading up to Goodegg.
A description of Goodegg’s service: leading people to good passive investing deals.
How passive investing can help people who have busy lives.
What makes people who have moved from passive investing to syndication wish they hadn’t.
Goodegg is trying to move to syndication in a way that won’t be too time-consuming.
The value of picking the right investors while scaling a syndication business.
Why it’s still a good idea to stick with the lower returns of multifamily due to its low risk.
How Goodegg distinguishes good from bad deals: choosing teams rather than deals.
The value of vetting reliable operators in a climate with many shady deals.
What Goodegg offers as far as returns per year in light of recent drops in general return rates.
The fact that a 20% return per year doesn’t exist anymore in multifamily, and why.
What investors should look for in the underwriting and track records of syndicators.
The biggest questions Goodegg gets asked, which have to do with money and trust.
What Goodegg tells investors about why they choose value-add B class multifamily.
Goodegg earns investor trust by educating them about what they do to mitigate risk.
The connection between the rifeness of Ponzi schemes and investors struggling to have trust.
John’s experiences working with mistrusting investors and how he earns their trust.
How Goodegg handles being the middleman between investors and syndicators.
Goodegg finds deals for busy investors while saving lead sponsors time.
How Goodegg uses a dating strategy to vet new operators.
“That’s what you do when you have three kids on a Saturday night – look at your bank account.” — Julie Lam [0:06:09]
“No matter the market, no matter the submarket or the numbers, we’re always looking first and foremost at the team that’s going to be operating the deal because a great team can turn a bad deal into a great one and vice versa.” — Annie Dickerson [0:13:47]
“I could get my seven-year-old to put together a great deck and pull numbers out of his head but at the end of the day could he deliver on those deals? Absolutely not.” — Annie Dickerson [0:14:25]
“We like to poke a lot of holes because we know at the end of the day our investors are going to be asking us those questions. So we need to be asking the sponsors those questions.”— Julie Lam [0:36:56]
Links Mentioned in Today’s Episode:
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